[36] Segment report

IFRS 8 specifies the 'management approach' for defining operating segments. Under this approach, the internal reports that are regularly used by the chief operating decision maker to make decisions on the allocation of resources to a segment and to assess the performance of a segment must be used as the basis for defining operating segments. The chief operating decision maker in the KION Group is its key management team comprising Gordon Riske (CEO), Otmar Hauck (COO) and Harald Pinger (CFO).

The chief operating decision makers divide the KION Group into the Linde Material Handling (LMH), STILL and OM brands for management purposes. Segment reporting follows the same breakdown, taking into account the relevant organisational structures and corporate strategy of the KION Group.

Linde Material Handling (LMH)

Linde Material Handling manufactures material-handling products under the Linde, Fenwick and Baoli brands and also produces hydraulic components that are used both in its own trucks and in the products of external manufacturers.

Baoli operates in the market as an independent brand focusing on the economy segment in China and other growth markets.

STILL

The STILL brand positions itself as the leading provider of intelligent intralogistics management tools. In addition to core products (forklifts, warehouse handling equipment and tow tractors), the product range includes pioneering material flow services.

OM

As a leading Italian manufacturer, OM provides customers in the value segment with reliable, technologically advanced electric and diesel trucks as well as warehouse handling equipment.

Other

The 'Other' segment comprises holding companies together with service companies that provide cross-segment services for the KION Group. The bulk of the revenue in this segment is generated by internal IT and logistics services.

The basis for internal reporting is a presentation of the financial position and financial performance based on data from continuing operations, excluding the effects of the acquisition of the KION Group in December 2006 and excluding non-recurring items. In addition to the above items, other net financial income/expenses and profit/loss from equity investments are also excluded from the performance indicator known as 'management reporting EBIT'. Segment reporting therefore includes a reconciliation of externally reported consolidated earnings before interest and tax (EBIT) including purchase price allocation effects and non-recurring items with the adjusted EBIT for the segments ('management reporting EBIT').

Segment reports are prepared in accordance with the same accounting policies as the consolidated financial statements, as described in detail in note 7. Intra-group transactions are generally conducted on an arm's length basis.

The following tables show information for the KION Group's operating segments for 2010 and 2009

The increase in revenue in the 'Other' segment is the result of including URBAN-TRANSPORTE GMBH, Unterschleissheim in the consolidation for the first time.

The breakdown of segment revenue by region is as follows

There are no relationships with individual customers that generate revenue deemed to be significant as a proportion of total consolidated revenue.

Financial income and expenses including all interest income and expenses are described in note 12 and note 13.

The KION acquisition items comprise a net write-down on the fair value adjustments identified as part of the purchase price allocation (PPA). The non-recurring items mainly comprise severance payments, social plan costs, costs relating to the relocation of production and consultancy costs.

Segment capital expenditures include additions to intangible assets and property, plant and equipment, but not additions to leased assets. A separate segment report for leased assets is shown in note 17.

Depreciation/amortisation relates to intangible assets with finite useful lives and property, plant and equipment.

The regional breakdown of non-current assets excluding financial assets, financial instruments, deferred tax assets and post-employment benefits is as follows: