105 Cloudberry Annual report 2022 Financial statements Note 4 Business segments Accounting principle An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses. The Company has defined that the Board of Directors is the chief operating decision maker. Business segments are reported in a manner consistent with how the Group internally follows up the business. The Group’s segment financials are reported on a proportionate basis. This is consistent with how the internal financial reporting to the Group’s chief operating decision maker is. The business segments are determined based on the differences in the nature of their operations. Management provides this because these measures are used internally for key performance measures (KPIs) and financial risk assessments. These measures represent the most important KPI’s to support decision making for achieving the Group’s strategic goals. The main performance indicator for segment reporting is EBITDA. The key differences between the proportionate and the consolidated IFRS financials are that all entities are included with the respective ownership share in each accounting line by the Group. Associated companies and joint ventures are included in the financial accounting lines, the profit or loss statement and share of assets and net debt, using the respective proportionate ownership share. While in the consolidated financials associated companies and joint ventures are consolidated with the equity method. Subsidiaries that have non-controlling interests are in the proportionate reporting presented with only the Group’s ownership share, while in the consolidated financials they are included with 100%. The Group reports its operations in four business segments; Production, an active owner of renewable power assets in the Nordics; Development, a greenfield developer both onshore and off-shore with a long history of organic, in-house developments of wind and hydropower assets in Norway and Sweden; Operations, an asset manager and operator of renewable power assets, that also delivers industrial digital solutions, and a cost efficient Corporate segment ensure management tasks for the Group like financing, marketing, reporting and other corporate activities. Proportionate financials are further defined and described in the APM section of this report. Production The Production segment owns long-term yield hydro and wind assets in Norway and Sweden. Revenues come mostly from power production sold on a continuous basis through bilateral agreements or through the spot market, Nordpool. Production is also the local manager and delivers management services to the portfolio of power plants owned by Forte Energy Norway AS, see note 20, Investments in associated companies and joint ventures. Development The Development segment has a significant onshore and offshore development portfolio with renewable assets in Sweden and Norway. Development is responsible for development of hydro and wind power assets from early stage until the projects receive construction permits. Cloudberry has ongoing dialogue with landowners, municipalities and grid companies to clarify opportunities for new wind power projects. Operations (Captiva) The Operations segment includes the activities organized in the Captiva Group. Captiva is an asset manager and operator of wind and hydro assets in the Nordics with more than 15 years of history. Cloudberry is currently a 60% owner of Captiva with the option to purchase 100% of the business by 2025 (the remaining 40% is owned by the previous sellers). Captiva has organized its business into management services and digital solutions. Corporate Corporate consists of the activities of corporate services, management, and group finance. The corporate management aims to remain a cost-effective, agile and dynamic team. By year end, there were seven employees in the corporate segment.
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