The classification of asset and income figures as well as of other key figures by business sector or by region in accordance with IFRS 8 is presented in “Segment Reporting”. The segments presented correspond to the internal organizational and reporting structure of the Merck Group. Within the Merck Serono division, we focus on specialist therapeutic areas and market innovative prescription drugs of chemical and biotechnological origin. The Consumer Health Care division comprises Merck’s business with high-quality over-the-counter products for preventive health care and self-treatment of minor ailments. These two divisions form the Pharmaceuticals business sector.
With the acquisition of Millipore, the Chemicals business sector was reorganized. The new Merck Millipore division combines the acquired activities with large sections of the former Life Science Solutions business. The new Performance Materials division comprises the Liquid Crystals and Pigments & Cosmetics business units as well as the Advanced Technologies unit with its materials for LEDs (light-emitting diodes) and photovoltaics as well as other innovative technologies. Accordingly, the Merck Millipore and Performance Materials segments are reported within the Chemicals business sector in the Segment Reporting as of December 31, 2010. The previous year’s figures have been adjusted.
The segment Corporate and Other mainly includes the income and expenses that cannot be allocated to the operating segments, e.g. expenses for central administrative functions.
The financial result and taxes on income are also allocated in full to the segment Corporate and Other. The operating segments are described in detail in the sections about the divisions in the management report.
Apart from total revenues, the success of a segment is mainly determined by the division’s operating result as well as free cash flow and the key figures derived from these such as “Underlying free cash flow on revenues (FCR)“ and “Return on Sales (ROS)”. The accounting standards used to calculate these performance indicators are the same as those used in external reporting (IFRS).
Transfer prices for intragroup sales are determined on an arm’s-length basis. There were no significant intercompany relations between the business segments.
Neither in 2010 nor in 2009 did any single customer account for more than 10% of Group sales.
The following reconciliation applied to operating assets in the Segment Reporting:
| XLS |
|
EUR million |
Dec. 31, 2010 |
Dec. 31, 2009 |
|
Assets |
22,388.0 |
16,712.6 |
|
Monetary assets (cash and cash equivalents, loans, securities) |
–1,042.4 |
–2,119.7 |
|
Financial assets covering pensions |
–216.9 |
–209.6 |
|
Non-operating receivables, tax receivables, deferred taxes and deferred pension payments |
–723.1 |
–635.6 |
|
Assets held for sale |
–36.7 |
– |
|
Operating assets (gross) |
20,368.9 |
13,747.7 |
|
Trade accounts payable |
–1,200.1 |
–935.7 |
|
Other operating liabilities |
–698.3 |
–465.3 |
|
Operating assets (net) |
18,470.5 |
12,346.7 |
The Merck Millipore division accounted for EUR 0.9 million (2009: EUR 0.1 million) and the Corporate and Other segment for EUR 3.2 million (2009: EUR 3.4 million) of the investment result disclosed in the income statement.