Wärtsilä Corporation Annual report 2014

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1. Segment information
In 2014, the business of Wärtsilä consists of one business area, the Power Business. The Power Business is subdivided into two mutually supportive market areas, Ship Power and Power Plants. These offer customers the same product concept modified for specific applications. The main products for both these markets are gas and diesel engines and related services. The market segments are highly dependent on each other.
In the Power Business, the design-related research and development and manufacturing required for the engines sold to both markets take place in the same R&D centres and factories. The manufacturing process is the same for each market. Similarly, the same Group companies are responsible for the distribution of these products and the services related to them. Capacity costs cannot be reliably allocated to the two different markets. These costs are significant and vary between the two units in different years. Customers in both markets are capital-intensive corporations with global operations. The development of the two market areas is strongly linked to global economic trends.
As geographical information, Wärtsilä reports the geographical areas Finland, other European countries, Asia, the Americas and other continents. In the geographical information net sales is split by the customer’s destination and non-current assets by origin.
Geographical information
Restated
2014 2013
MEUR Net sales Non-current
assets*
Net sales Non-current
assets*
Finland 54 233 44 306
Other European countries 1 348 1 255 1 284 1 292
Asia 1 989 133 1 713 125
The Americas 840 74 1 068 57
Other 548 8 498 7
Total 4 779 1 704 4 607 1 787
* Non-current assets consist of goodwill, intangible assets, property, plant and equipment, investment properties and investments in associates and joint ventures.
Business area information
Internal management reporting is used to monitor the development of operations on the basis of market-based business areas. Reporting serves internal goal setting and strategic follow up, and is thus a management tool rather than an actual external economic indicator.
Wärtsilä’s highest operative decision maker (CODM, Chief Operating Decision Maker) is the President and CEO with the support of the Board of Management and, in some cases, the Board of Directors. The President and CEO assesses the Group’s financial position and its development as a whole, not based on the results of the business areas. As the Group’s level of integration is high, the reported indicators from business areas do not give a true picture of the business areas’ financial position and development. It is also considered that they are of limited value to an external reader due to poor comparability, for example.
Against this background, Wärtsilä’s business cannot be divided into separate operating segments with individual reporting.
During the financial period 1 January–31 December 2014 and 1 January–31 December 2013, Wärtsilä did not have any individual significant customers or countries.
Net sales
Restated
MEUR 2014 2013
Power Plants 1 138 1 459
Ship Power 1 702 1 309
Services 1 939 1 842
Other -2
Total 4 779 4 607
Comparison figures related to the statement of income have been restated due to the two-stroke business being classified as discontinued operations.

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