APC 2007 Annual Report Download - page 76

Download and view the complete annual report

Please find page 76 of the 2007 APC annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 190

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190

74
At December 31, 2007, capitalization of development costs
had a positive net impact on operating profit of 87 mil-
lion, down slightly from 98 million in 2006.
EBITA margin by region
To enhance the quality of segment information by region,
General Management expenses that cannot be allocated
to a particular segment are presented under "Holding
Company". The data below concerns the ratio of EBITA to
revenue.
In Europe, the EBITA margin narrowed by 0.6 point to
17.2%. On a proforma basis, i.e., including APC as from
February 2006, EBITA margin increased by 0.4 point.
North America reported an EBITA margin of 16.5% at year-
end, up 1.3 points from December 31, 2006. With APC as
from February 2006, the margin showed a proforma in-
crease of 3.0 points.
EBITA margin in the Asia-Pacific region declined by 0.4
point to end the year at 13.6%. The proforma margin with
APC in 2006 increased by 0.7 point.
EBITA margin in the Rest of the World came to 15.9%
compared to 17.0% in 2006. Including APC as from Feb-
ruary 2006, the margin widened by 0.4 point.
EBITA margin by business
EBITA margin in the Electrical Distribution business rose
by 0.8 point to 18.1%.
The Automation & Controls business achieved an EBITA
margin of 14.2%, down 0.5 point from 2006.
In Critical Power & Cooling Services, the EBITA margin
narrowed by 1.2 points to 12.7%. The margin was heavily
impacted by the consolidation of APC in February 2007.
Finance costs and
other financial income and
expense, net
Finance costs and other financial income and expense, net
totaled a negative 266 million compared with a negative
121 million in 2006.
Net finance costs amounted to 247 million, up from 104
million in 2006. This reflects the increase in average net
debt to 3,370 million in 2007 from 1,700 million the year
before.
Exchange rate fluctuations, including the impact of cur-
rency hedging positions, added 20 million to financial ex-
pense compared with 15 million in 2006.
Changes in the fair value of financial instruments did not
have an impact on this item in 2007.
Income tax
The effective tax rate stood at 27.1% compared with 28.5%
at December 31, 2006.
Share of profit/(losses) of associates
The Group’s share of profits of associates came to 4 mil-
lion at December 31, 2007 versus 2 million at December
31, 2006.
Minority interests
Minority interests totaled 38 million in 2007. Minority in-
terests mainly correspond to the share of profit attributable
to minority shareholders of Feller AG, STIE, Clipsal Asia
and a number of Chinese companies.
Profit attributable
to equity holders of the parent
Profit attributable to equity holders of the parent grew
20.9% to 1,583 million.
Earnings per share
The 13.9% increase to 6.78 from 5.95 reflects growth in
profit for the period, partially offset by dilution from the
March 2007 capital increase.
3. Change in
financial situation
Balance sheet and cash flow
statement items
Total assets stood at 23,268 million at December 31,
2007, up 22.7% from the previous year-end. Non current
assets amounted to 15,018 million and represented
64.5% of total assets–a 44.3% increase that stemmed pri-
marily from the year’s acquisitions.
Goodwill
Goodwill rose by 1,955 million over the year to 8,141
million, or 35.0% of total assets.
Acquisitions in 2007 added 2,885 million, while the di-
vestment of MGE's small systems business reduced good-
will by €221 million.
The currency effect also reduced total goodwill, by €660
million.
Impairment tests conducted at the end of the year did not
reveal any material losses.
Property, plant and equipment
and intangible assets
Property, plant and equipment and intangible assets came
to €5,571 million, or 23.9% of total assets, up 79.2% from
the year before.
Intangible assets
Trademarks rose by €1,487 million over the year to €2,247
million. Acquisitions added €1,776 million (of which
€1,400 million for the APC trademark and €358 million for
the Pelco trademark), while the divestment of part of MGE
UPS’s business reduced the total by €100 million. The cur-
rency effect had a negative impact of €189 million.