SEGMEnT REPoRTinG - Fair Value Measurement

Standards and interpretations that have been published but are not yet mandatory

IFRS 13 Fair Value Measurement

5. SEGMEnT REPoRTinG

At the beginning of fiscal year 2012, the SMA Group re-organized its photovoltaics operations and adjusted the Group structure accordingly. The SMA Group is managed via strategic business units in the form of divisions, which are organized on the basis of the nature of the customer relationship and the characteristics of the sales organization.

As a consequence, the operational management of the Group and internal reporting also changed.

in accordance with the regulations of ifRS 8 “operating Segments” (management approach), this organizational repositioning led to a change in the segment reporting for all comparative periods. As a result, the number of report-able segments changed. on the basis of the information reported to the Group’s chief operating decision makers for the allocation of resources and performance, the operat-ing segments were identified by division accordoperat-ing to the structure of the photovoltaics operations in line with ifRS 8.

The Electronics Manufacturing segment was integrated in the former Medium Power Solutions (MPS) segment. off-Grid Solutions (oGS) was removed from the MPS segment as an independent segment. The High Power Solutions seg-ment (HPS) was renamed Power Plant Solutions (PPS). The new Service segment pools the functional service activities relating to photovoltaics, which were previously conducted in the previous MPS and HPS segments.

109 94 Notes 142 other information

94 notes SMA Group 112 notes to the Statement of

comprehensive income 117 notes to the Balance Sheet 128 notes to the consolidated Statements of cash flows 130 other Disclosures

2 To our Shareholders consolidated

86 financial Statements consolidated

20 Management Report

The Railway Technology, off-Grid Solutions and dtw seg-ments are immaterial according to ifRS 8 and are combined in the collective item “complementary Divisions”.

Segment Activities

Medium Power Solutions Development, production and distribution of system technology for photovoltaic applications in the grid-tied building and commercial field. Responsible for the Sunny Boy, Sunny Mini central and Sunny Tripower product families. The division also develops and distributes products used for monitoring PV systems and energy management.

Power Plant Solutions Development, production and distribution of system technology for photovoltaic applications in the power plant sector.

This includes the Sunny central product family in the market for large-scale solar power plants with outputs ranging from 500 kW to several megawatts.

service After-sales services in Germany and abroad to guarantee the technical avail-ability of SMA products during a lifespan of more than 20 years. The services include warranty services, service and mainte-nance contracts and commissioning.

Complementary Divisions

operations of dtw, off-Grid Solutions, in future Hybrid Energy Solutions, and Railway Technology.

The operating result of the segments is monitored separately by the Managing Board in order to make decisions on the allocation of resources and to determine the profitability of the segments. Group financing, currency and interest rate hedging and the income tax burden are controlled at Group level and are therefore not allocated to the individual operating segments.

As regards information about geographical segments, sales are assigned to countries using the destination principle.

The company waives to present non-current assets based on this classification. SMA Solar Technology AG develops and manufactures its products mainly in Germany. The production sites in north America and Poland are not capital intensive and therefore immaterial. Accordingly, a division of assets by regions is likewise not a part of internal management reporting.

The Group measures the performance of its segments through a measurement of segment profit or loss, which is referred to as “EBiT” in the internal management and reporting system. This measurement comprises gross profit, selling and general administrative expenses, research and non-capitalized development costs as well as other operat-ing income (expense).

Segment assets include the intangible assets attributed to the relevant segments and fixed assets, inventories, and trade receivables. Segment liabilities include trade payables that are directly attributable to the relevant segments. internal management reporting is in line with the accounting policies of external reporting.

The transfer prices between the business segments are de-termined using management prices based on usual arm’s length market conditions. income from external third parties is reported using the same valuation parameters as shown in the income statement.

110 SMA Solar Technology AG Annual Report 2012

Sales revenue in the Medium Power Solutions and Power Plant Solutions segments is subject to fluctuations for reasons including discontinuous incentive programs.

financial Ratios by Segments and Regions

segments Medium Power Solutions Power Plant Solutions service Complementary Divisions Reconciliation Continuing operations

€ million 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011

External sales 934.8 1,117.7 440.8 489.5 26.9 17.6 60.9 51.5 0.0 0.0 1,463.4 1,676.3

internal sales 100.5 80.8 27.4 24.7 84.7 72.4 76.3 42.0 –288.9 –219.9 0.0 0.0

Total sales 1,035.3 1,198.5 468.2 514.2 111.6 90.0 137.2 93.5 –288.9 –219.9 1,463.4 1,676.3

Depreciation and amortization 30.3 23.3 3.9 2.8 2.4 1.4 3.4 1.7 29.9 21.2 69.9 50.4

Operating profit (EBIT) 91.3 146.5 45.2 103.1 –15.8 –7.5 8.7 0.4 –27.4 –2.2 102.0 240.3

Segment assets 277.5 332.6 148.5 152.7 38.9 31.2 40.5 45.1 823.3 812.7 1,328.7 1,374.3

Segment liabilities 16.1 54.3 32.3 30.2 2.3 3.2 2.2 3.6 455.1 493.7 508.0 585.0

capital Expenditure 38.7 26.8 3.4 4.8 7.3 3.9 2.3 1.8 48.5 110.5 100.2 147.8

Sales by regions

Germany 525.8 635.6 106.1 141.9 8.4 2.2 16.9 17.2 0.0 0.0 657.2 796.9

European Union 259.8 332.6 78.7 174.1 14.4 15.3 23.6 21.5 0.0 0.0 376.5 543.5

Third-party countries 185.5 185.7 258.6 176.5 4.4 0.4 20.9 13.3 0.0 0.0 469.4 375.9

Sales deductions –36.3 –36.2 –2.6 –3.0 –0.3 –0.3 –0.5 –0.5 0.0 0.0 –39.7 –40.0

External sales 934.8 1,117.7 440.8 489.5 26.9 17.6 60.9 51.5 0.0 0.0 1,463.4 1,676.3

111 94 Notes 142 other information