Note 4

Segment reporting

iLOQ Group is a technology company offering electronic locking solutions. The Group operates a network business model to manufacture and distribute its products. The Group’s products are sold via the iLOQ retail channel, which offers professional installation, servicing, and maintenance services. The Group has national companies in Sweden, Denmark, Norway, Germany, the Netherlands, France, and Spain.

The Group’s operations are managed and monitored as a single entity. The national companies are sales organizations whose net sales consist of commission charges earned from the Group’s parent companies. On the basis of the nature of the business, the products and services, and the similarity of production processes and customer groups, the Group has a single operating segment. The most senior operational decision-making authority is the Group’s Management Group. The Group’s Management Group evaluates the company’s performance and the use of resources as a whole.

The composition and geographical distribution of the Group’s net sales are described under the notes on net sales. The Group does not have any individual external customers from which its receivable sales revenue exceeds 10 percent of the organization’s earnings. The Group’s most significant non-current assets are in the parent company’s country of domicile.

Revenue

iLOQ’s net sales are earned from digital locking and access management systems. The Group’s products consist of supplied locks, as well as lock operation and maintenance services. The Group’s customers are retailers of locking products and partners.

Sales revenues are recognized when control over the relevant goods or services is transferred to the customer. Lock deliveries are capitalized when control is transferred on the basis of the shipment of the products, when the risks and benefits have been transferred to retailers. The ExWorks Incoterm general applies to product deliveries. For one major customer, the performance obligation is considered to be fulfilled when delivery has taken place, so the Delivered Duty Paid Incoterm applies to these deliveries. Maintenance and repair services are capitalized over time because the end customer receives the benefit of the service when it has been performed.

Standard payment terms apply to sales agreements. Annual discounts may be granted to customers based on the products sold. The recognition principles are described in Note 3 Accounting principles behind the consolidated financial statements. The warranty terms connected to sold products are described in note 24 Provisions.

The following describes the geographical distribution of the Group’s net sales.