6. Segment reporting
Operating segments are based upon the Company’s management reporting structure. The Company’s operating segments are primarily at a country level as this is how the Chief Operating Decision Maker (CODM) assesses performance and makes decisions about resource allocation. This is due to the integrated operations within each country and the ability to reallocate production based on the individual capacity of each plant. Additionally, economic factors that may impact our results of operations, such as currency fluctuations and energy costs, are also assessed at a country level.
The Company’s North America reportable segment is the result of the aggregation of the operating segments of the United States and Canada. These operating segments have been aggregated as they have similar long-term economic characteristics and there is similarity of competitive and operating risks and the political environment in the United States and Canada. The Company’s Europe reportable segment is the result of the aggregation of the operating segments of Spain and France. Similar to our United States and Canada operating segments, our Spain and France operating segments are grouped together based on the relative similarity of the EBITDA margins, competitive risks, currency risks (i.e. risks relating to the Euro), operating risks and, given they are each part of the European Union and the European Economic Community, the political and economic environment.
During 2017, upon further evaluation of the management reporting structure, it was concluded that our reportable segments would be amended to no longer reflect Venezuela as a separate reportable segment. The decision was taken as a result of on-going economic, political and social instability in the region which has resulted in uncertainty surrounding the cash flow generation capacity of our operations. During the year-ended December 31, 2016, due to the uncertainty in Venezuela substantially all assets were impaired. The segment previously recognized ‘Electrometallurgy – Venezuela’ now forms part of our ‘Other segments’. The comparative periods have been restated to conform to the 2017 reportable segment presentation.
The consolidated income statements at December 31, 2017, 2016 and 2015, by reportable segment, are as follows:
|
|
|
2017 |
||||||||||
|
|
|
Electrometallurgy - |
|
Electrometallurgy - |
|
Electrometallurgy - |
|
|
|
Adjustments/ |
|
|
|
|
|
North America |
|
Europe |
|
South Africa |
|
Other segments |
|
Eliminations (**) |
|
Total |
|
|
|
US$'000 |
|
US$'000 |
|
US$'000 |
|
US$'000 |
|
US$'000 |
|
US$'000 |
|
Sales |
|
541,143 |
|
1,083,200 |
|
122,504 |
|
60,199 |
|
(65,353) |
|
1,741,693 |
|
Cost of sales |
|
(303,096) |
|
(690,589) |
|
(81,744) |
|
(33,616) |
|
65,650 |
|
(1,043,395) |
|
Other operating income |
|
2,701 |
|
12,681 |
|
2,868 |
|
15,619 |
|
(15,670) |
|
18,199 |
|
Staff costs |
|
(90,802) |
|
(147,595) |
|
(23,495) |
|
(39,851) |
|
(220) |
|
(301,963) |
|
Other operating expense |
|
(68,537) |
|
(107,130) |
|
(24,462) |
|
(55,955) |
|
16,158 |
|
(239,926) |
|
Depreciation and amortization charges, operating allowances and write-downs |
|
(66,789) |
|
(27,404) |
|
(5,788) |
|
(4,557) |
|
9 |
|
(104,529) |
|
Operating profit (loss) before impairment losses, net gains/losses due to changes in the value of assets, gains/losses on disposals of non-current assets and other gains and losses |
|
14,620 |
|
123,163 |
|
(10,117) |
|
(58,161) |
|
574 |
|
70,079 |
|
Impairment losses |
|
(30,618) |
|
— |
|
— |
|
(323) |
|
(16) |
|
(30,957) |
|
Net gain due to changes in the value of assets |
|
— |
|
— |
|
7,222 |
|
— |
|
282 |
|
7,504 |
|
(Loss) gain on disposal of non-current assets |
|
(3,718) |
|
301 |
|
(138) |
|
(818) |
|
57 |
|
(4,316) |
|
Other (loss) gain |
|
— |
|
(13,604) |
|
— |
|
(2,625) |
|
13,616 |
|
(2,613) |
|
Operating (loss) profit |
|
(19,716) |
|
109,860 |
|
(3,033) |
|
(61,927) |
|
14,513 |
|
39,697 |
|
Finance income |
|
448 |
|
6,733 |
|
404 |
|
191,261 |
|
(195,138) |
|
3,708 |
|
Finance costs |
|
(4,567) |
|
(40,106) |
|
(7,361) |
|
(48,486) |
|
35,108 |
|
(65,412) |
|
Financial derivative loss |
|
— |
|
— |
|
— |
|
(6,850) |
|
— |
|
(6,850) |
|
Exchange differences |
|
(191) |
|
5,938 |
|
(1,197) |
|
3,730 |
|
(66) |
|
8,214 |
|
(Loss) profit before tax |
|
(24,026) |
|
82,425 |
|
(11,187) |
|
77,728 |
|
(145,583) |
|
(20,643) |
|
Income tax benefit (expense) |
|
29,386 |
|
(26,031) |
|
2,068 |
|
9,692 |
|
(294) |
|
14,821 |
|
Profit (loss) for the year |
|
5,360 |
|
56,394 |
|
(9,119) |
|
87,420 |
|
(145,877) |
|
(5,822) |
|
Loss (profit) attributable to non-controlling interests |
|
4,734 |
|
(370) |
|
(147) |
|
951 |
|
(24) |
|
5,144 |
|
Profit (loss) attributable to the Parent |
|
10,094 |
|
56,024 |
|
(9,266) |
|
88,371 |
|
(145,901) |
|
(678) |
|
|
|
2016 (*) |
||||||||||
|
|
|
Electrometallurgy - |
|
Electrometallurgy - |
|
Electrometallurgy - |
|
|
|
Adjustments/ |
|
|
|
|
|
North America |
|
Europe |
|
South Africa |
|
Other segments |
|
Eliminations (**) |
|
Total |
|
|
|
US$'000 |
|
US$'000 |
|
US$'000 |
|
US$'000 |
|
US$'000 |
|
US$'000 |
|
Sales |
|
521,192 |
|
949,547 |
|
142,160 |
|
90,337 |
|
(127,199) |
|
1,576,037 |
|
Cost of sales |
|
(325,254) |
|
(672,026) |
|
(99,124) |
|
(79,912) |
|
132,904 |
|
(1,043,412) |
|
Other operating income |
|
362 |
|
25,908 |
|
3,422 |
|
4,713 |
|
(8,190) |
|
26,215 |
|
Staff costs |
|
(82,032) |
|
(132,440) |
|
(23,589) |
|
(58,577) |
|
239 |
|
(296,399) |
|
Other operating expense |
|
(64,606) |
|
(118,269) |
|
(28,834) |
|
(37,964) |
|
5,727 |
|
(243,946) |
|
Depreciation and amortization charges, operating allowances and write-downs |
|
(73,530) |
|
(31,730) |
|
(4,732) |
|
(12,818) |
|
(2,867) |
|
(125,677) |
|
Operating (loss) profit before impairment losses, net gains/losses due to changes in the value of assets, gains/losses on disposals of non-current assets and other gains and losses |
|
(23,868) |
|
20,990 |
|
(10,697) |
|
(94,221) |
|
614 |
|
(107,182) |
|
Impairment losses |
|
(193,000) |
|
(1,077) |
|
(8,147) |
|
(59,248) |
|
(6,617) |
|
(268,089) |
|
Net gain (loss) due to changes in the value of assets |
|
— |
|
— |
|
1,896 |
|
— |
|
(5) |
|
1,891 |
|
Gain (loss) on disposal of non-current assets |
|
— |
|
— |
|
21 |
|
446 |
|
(127) |
|
340 |
|
Other (loss) gain |
|
— |
|
(32,655) |
|
— |
|
(2,514) |
|
35,129 |
|
(40) |
|
Operating (loss) profit |
|
(216,868) |
|
(12,742) |
|
(16,927) |
|
(155,537) |
|
28,994 |
|
(373,080) |
|
Finance income |
|
1 |
|
11,551 |
|
744 |
|
6,639 |
|
(17,399) |
|
1,536 |
|
Finance costs |
|
(3,249) |
|
(16,540) |
|
(6,038) |
|
(13,629) |
|
9,205 |
|
(30,251) |
|
Exchange differences |
|
(438) |
|
2,436 |
|
(2,164) |
|
(3,290) |
|
(57) |
|
(3,513) |
|
(Loss) profit before tax |
|
(220,554) |
|
(15,295) |
|
(24,385) |
|
(165,817) |
|
20,743 |
|
(405,308) |
|
Income tax benefit (expense) |
|
9,982 |
|
(10,505) |
|
4,433 |
|
40,160 |
|
2,625 |
|
46,695 |
|
(Loss) profit for the year |
|
(210,572) |
|
(25,800) |
|
(19,952) |
|
(125,657) |
|
23,368 |
|
(358,613) |
|
Loss (profit) attributable to non-controlling interests |
|
6,044 |
|
(93) |
|
856 |
|
11,827 |
|
1,552 |
|
20,186 |
|
(Loss) profit attributable to the Parent |
|
(204,528) |
|
(25,893) |
|
(19,096) |
|
(113,830) |
|
24,920 |
|
(338,427) |
|
|
|
2015 (*) |
||||||||||
|
|
|
Electrometallurgy - |
|
Electrometallurgy - |
|
Electrometallurgy - |
|
|
|
Adjustments/ |
|
|
|
|
|
North America |
|
Europe |
|
South Africa |
|
Other segments |
|
Eliminations (**) |
|
Total |
|
|
|
US$'000 |
|
US$'000 |
|
US$'000 |
|
US$'000 |
|
US$'000 |
|
US$'000 |
|
Sales |
|
10,062 |
|
1,174,968 |
|
219,890 |
|
129,123 |
|
(217,453) |
|
1,316,590 |
|
Cost of sales |
|
(6,200) |
|
(811,114) |
|
(134,978) |
|
(88,041) |
|
221,597 |
|
(818,736) |
|
Other operating income |
|
17 |
|
52,211 |
|
5,070 |
|
2,109 |
|
(43,656) |
|
15,751 |
|
Staff costs |
|
(1,983) |
|
(148,652) |
|
(24,663) |
|
(30,574) |
|
3 |
|
(205,869) |
|
Other operating expense |
|
(276) |
|
(142,867) |
|
(29,237) |
|
(67,347) |
|
39,431 |
|
(200,296) |
|
Depreciation and amortization charges, operating allowances and write-downs |
|
(1,183) |
|
(35,255) |
|
(7,744) |
|
(22,492) |
|
(376) |
|
(67,050) |
|
Operating profit (loss) before impairment losses, net gains/losses due to changes in the value of assets, gains/losses on disposals of non-current assets and other gains and losses |
|
437 |
|
89,291 |
|
28,338 |
|
(77,222) |
|
(454) |
|
40,390 |
|
Impairment losses |
|
— |
|
— |
|
— |
|
(52,042) |
|
— |
|
(52,042) |
|
Net gain (loss) due to changes in the value of assets |
|
— |
|
— |
|
1,336 |
|
(2,249) |
|
1 |
|
(912) |
|
Gain (loss) on disposal of non-current assets |
|
— |
|
1,468 |
|
— |
|
(3,681) |
|
(1) |
|
(2,214) |
|
Other (loss) gain |
|
— |
|
(40,983) |
|
— |
|
9,257 |
|
31,379 |
|
(347) |
|
Operating profit (loss) |
|
437 |
|
49,776 |
|
29,674 |
|
(125,937) |
|
30,925 |
|
(15,125) |
|
Finance income |
|
6 |
|
36,206 |
|
501 |
|
4,869 |
|
(40,486) |
|
1,096 |
|
Finance costs |
|
(109) |
|
(19,287) |
|
(5,015) |
|
(14,060) |
|
8,066 |
|
(30,405) |
|
Exchange differences |
|
(44) |
|
8,617 |
|
2,498 |
|
24,833 |
|
— |
|
35,904 |
|
Profit (loss) before tax |
|
290 |
|
75,312 |
|
27,658 |
|
(110,295) |
|
(1,495) |
|
(8,530) |
|
Income tax expense |
|
— |
|
(22,953) |
|
(7,807) |
|
(16,580) |
|
(2,602) |
|
(49,942) |
|
Profit (loss) for the year |
|
290 |
|
52,359 |
|
19,851 |
|
(126,875) |
|
(4,097) |
|
(58,472) |
|
(Profit) loss attributable to non-controlling interests |
|
(41) |
|
(61) |
|
226 |
|
9,019 |
|
6,061 |
|
15,204 |
|
Profit (loss) attributable to the Parent |
|
249 |
|
52,298 |
|
20,077 |
|
(117,856) |
|
1,964 |
|
(43,268) |
(*)The amounts for prior periods have been re-presented to show the results of the Spanish energy business within income from continuing operations as part of the Other segments, as described in Note 1 to the consolidated financial statements. In addition, the Venezuela segment is reflected as part of the Other segments, as described in Note 6 to the consolidated financial statements.
(**)The amounts correspond to transactions between segments that are eliminated in the consolidation process.
The consolidated statements of financial position at December 31, 2017 and 2016, by reportable segment are as follows:
|
|
|
2017 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
Consolidation |
|
|
|
|
|
Electrometallurgy - |
|
Electrometallurgy - |
|
Electrometallurgy - |
|
|
|
Adjustments/ |
|
|
|
|
|
North America |
|
Europe |
|
South Africa |
|
Other segments |
|
Eliminations (*) |
|
Total |
|
|
|
US$'000 |
|
US$'000 |
|
US$'000 |
|
US$'000 |
|
US$'000 |
|
US$'000 |
|
Goodwill |
|
205,287 |
|
— |
|
— |
|
— |
|
— |
|
205,287 |
|
Other intangible assets |
|
26,724 |
|
20,381 |
|
1,505 |
|
10,048 |
|
— |
|
58,658 |
|
Property, plant and equipment |
|
512,003 |
|
167,314 |
|
64,331 |
|
174,326 |
|
— |
|
917,974 |
|
Financial assets |
|
16,174 |
|
69,555 |
|
— |
|
6,055 |
|
— |
|
91,784 |
|
Inventories |
100,856 |
204,240 |
42,478 |
13,657 |
— |
361,231 |
||||||
|
Receivables |
|
165,006 |
|
260,612 |
|
35,330 |
|
833,243 |
|
(1,175,756) |
|
118,435 |
|
Other assets |
|
20,380 |
|
22,767 |
|
41,008 |
|
23,473 |
|
(45,212) |
|
62,416 |
|
Cash and cash equivalents |
|
10,886 |
|
153,967 |
|
6,912 |
|
12,707 |
|
— |
|
184,472 |
|
Total assets |
|
1,057,316 |
|
898,836 |
|
191,564 |
|
1,073,509 |
|
(1,220,968) |
|
2,000,257 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
521,819 |
|
198,059 |
|
62,933 |
|
154,947 |
|
— |
|
937,758 |
|
Deferred income |
|
— |
|
2,034 |
|
— |
|
1,138 |
|
— |
|
3,172 |
|
Provisions |
|
28,602 |
|
56,654 |
|
11,080 |
|
19,156 |
|
— |
|
115,492 |
|
Bank borrowings and other financial liabilities (excluded finance leases) |
|
— |
|
4,918 |
|
— |
|
133,516 |
|
— |
|
138,434 |
|
Debt instruments |
|
— |
|
— |
|
— |
|
350,270 |
|
— |
|
350,270 |
|
Obligations under finance leases |
|
1,994 |
|
— |
|
— |
|
80,639 |
|
— |
|
82,633 |
|
Trade payables |
|
321,710 |
|
584,542 |
|
95,082 |
|
380,834 |
|
(1,176,336) |
|
205,832 |
|
Other non-trade payables |
|
183,191 |
|
52,629 |
|
22,469 |
|
(46,991) |
|
(44,632) |
|
166,666 |
|
Total equity and liabilities |
|
1,057,316 |
|
898,836 |
|
191,564 |
|
1,073,509 |
|
(1,220,968) |
|
2,000,257 |
|
|
|
2016 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
Consolidation |
|
|
|
|
|
Electrometallurgy - |
|
Electrometallurgy - |
|
Electrometallurgy - |
|
|
|
Adjustments/ |
|
|
|
|
|
North America |
|
Europe |
|
South Africa |
|
Other segments |
|
Eliminations (*) |
|
Total |
|
|
|
US$'000 |
|
US$'000 |
|
US$'000 |
|
US$'000 |
|
US$'000 |
|
US$'000 |
|
Goodwill |
|
230,210 |
|
— |
|
— |
|
— |
|
— |
|
230,210 |
|
Other intangible assets |
|
33,243 |
|
18,946 |
|
1,355 |
|
9,295 |
|
— |
|
62,839 |
|
Property, plant and equipment |
|
540,794 |
|
154,379 |
|
58,559 |
|
111,807 |
|
(83,933) |
|
781,606 |
|
Financial assets |
|
— |
|
113,157 |
|
— |
|
17,329 |
|
(110,769) |
|
19,717 |
|
Inventories |
|
73,901 |
|
183,868 |
|
40,475 |
|
20,575 |
|
(2,117) |
|
316,702 |
|
Receivables |
|
50,000 |
|
275,823 |
|
34,852 |
|
217,307 |
|
(354,497) |
|
223,485 |
|
Other assets |
|
37,220 |
|
30,050 |
|
20,285 |
|
59,576 |
|
(52,257) |
|
94,874 |
|
Cash and cash equivalents |
|
38,389 |
|
87,997 |
|
15,195 |
|
55,402 |
|
(52) |
|
196,931 |
|
Assets and disposal groups classified as held for sale (Note 29) |
|
— |
|
— |
|
— |
|
— |
|
92,937 |
|
92,937 |
|
Total assets |
|
1,003,757 |
|
864,220 |
|
170,721 |
|
491,291 |
|
(510,688) |
|
2,019,301 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
646,397 |
|
220,948 |
|
59,756 |
|
(6,798) |
|
(28,261) |
|
892,042 |
|
Deferred income |
|
— |
|
2,229 |
|
— |
|
1,719 |
|
1 |
|
3,949 |
|
Provisions |
|
29,837 |
|
50,482 |
|
11,770 |
|
11,832 |
|
(2,337) |
|
101,584 |
|
Bank borrowings and other financial liabilities (excluded finance leases) |
|
— |
|
313,910 |
|
29,620 |
|
171,395 |
|
(5,575) |
|
509,350 |
|
Obligations under finance leases |
|
3,181 |
|
— |
|
2,055 |
|
81,383 |
|
(81,382) |
|
5,237 |
|
Trade payables |
|
193,128 |
|
237,286 |
|
49,667 |
|
172,230 |
|
(463,867) |
|
188,444 |
|
Other liabilities |
|
131,214 |
|
39,365 |
|
17,853 |
|
59,530 |
|
(36,949) |
|
211,013 |
|
Liabilities associated with assets held for sale (Note 29) |
|
— |
|
— |
|
— |
|
— |
|
107,682 |
|
107,682 |
|
Total equity and liabilities |
|
1,003,757 |
|
864,220 |
|
170,721 |
|
491,291 |
|
(510,688) |
|
2,019,301 |
(*) These amounts correspond to balances between segments that are eliminated at consolidation.
Other disclosures
Sales by product line
Sales by product line are as follows:
|
|
|
2017 |
|
2016 |
|
2015 |
|
|
|
US$'000 |
|
US$'000 |
|
US$'000 |
|
Silicon metal |
|
739,618 |
|
751,508 |
|
592,458 |
|
Manganese alloys |
|
363,644 |
|
223,451 |
|
260,371 |
|
Ferrosilicon |
|
266,862 |
|
242,788 |
|
228,830 |
|
Other silicon-based alloys |
|
188,183 |
|
173,901 |
|
105,702 |
|
Silica fume |
|
36,338 |
|
37,480 |
|
29,660 |
|
Other |
|
147,048 |
|
146,909 |
|
99,569 |
|
Total |
|
1,741,693 |
|
1,576,037 |
|
1,316,590 |
Information about major customers
Total sales of $820,897 thousand, $656,907 thousand, and $524,821 thousand were attributable to the Company’s top ten customers in 2017, 2016, and 2015 respectively. During 2017, sales corresponding to Dow Corning Corporation represented 12.2% of the Company’s sales (2016: 13.7%). The sales are to the Electrometallurgy - North America and Electrometallurgy - Europe segments. However, during 2015 no single customer represented more than 10% of the Company’s sales.