Note 4

Segment reporting

The iLOQ Group is a technology company that offers solutions for electronic locking. The Group operates with a network business model in the manufacture and distribution of products. The Group’s products are sold through iLOQ’s distribution channel providing professional installation and maintenance services. The Group has country offices also in Sweden, Denmark, Norway, Germany, the Netherlands, France, Spain and the UK.

The Group’s business operations are managed and monitored as one entirety. Subsidiaries are sales organizations and their turnover consists of commission charges from the Group’s parent company. Based on the similarity of business operations, products, services and production process, the Group has only one operating segment. The Executive Board is the Group’s chief operating decision maker. The Group’s Executive Board evaluates the performance of the company and the use of resources as a whole.

Composition of Group’s turnover and geographical distribution is presented with the notes related to turnover. The Group has no external customers with net sales over 10 % of the Group’s total net sales. The Group’s most significant non-current assets are located at the domicile state of the parent company.

Revenue

The revenue of iLOQ consists of 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 and partners of locking products.

Revenue is recognized when control over the goods or the service is transferred to the customer. Lock deliveries are capitalized when control is transferred on the basis of the delivery of the products, when the risks and benefits have been transferred to retailers. ExWorks Incoterms delivery term is generally used on the delivery of products. For one significant customer, performance obligation is satisfied at the time of the delivery, and for these deliveries Delivered Duty Paid -Incoterms are applied. Revenue from maintenance and repair services is recognized over time as the customer receives the benefits simultaneously as the service is provided.

Sales contracts are made with the regular payment terms. A yearly discount can be granted to customers for products sold. Revenue recognition principles are presented in note 3 Accounting policies for the consolidated financial statements. Warranty clauses related to the products sold are presented in note 24 Provisions.

The Group’s revenue by geographical area is presented below.

The proportion of Finland’s revenue of the revenue from Northern Europe was EUR 32,619 in 2019 (EUR 26,402 in 2018).

The classification of revenue according to the timing of product deliveries and service production is presented below.

During the financial years presented there were no recognized credit losses on sales. Trade receivables are presented in note 15 Trade and other receivables.