Notes to the consolidated financial statements
Year ended 31 July 2009

2. Segmental analysis

Wolseley’s reportable segments, which are those reported to the Board, are the operating businesses overseen by distinct continental and divisional management teams responsible for their performance. All reportable segments derive their revenue from a single business activity, the distribution and supply of construction materials and services.

In 2009 management responsibility for heavy-side businesses in Eastern Europe was transferred from Central and Eastern Europe to the Nordic management team. These businesses are therefore now included in the Nordic segment results. The comparative figures for 2008 have been restated to reflect the transfer of £93 million of revenue and £3 million of operating loss from Central and Eastern Europe to Nordic. The effect on trading profit is not material. The amounts reported in 2008 for the US building materials segment have also been restated. The part of the business sold is presented as discontinued operations and the construction loan business retained is shown as North America loan services.

The Group’s business is not highly seasonal but revenue and trading profit are normally slightly higher in the second half.
The Group’s customer base is highly diversified, with no individually significant customer.

The revenue, trading profit and operating (loss)/profit of the Group’s reportable segments are detailed in the following three tables.

Revenue by reportable segment for continuing operations	2009 £m	2008 (restated) £m
UK and Ireland	2,699	3,203
France	2,144	2,116
Nordic	2,113	2,290
Central and Eastern Europe	965	908
Europe	7,921	8,517
US plumbing and heating	5,820	5,613
Canada	700	684
North America	6,520	6,297
Group	14,441	14,814

Trading profit by reportable segment for continuing operations (note 12)	2009 £m	2008 (restated) £m
UK and Ireland	55	176
France	32	103
Nordic	96	159
Central and Eastern Europe	–	–
European central costs	(4)	(10)
Europe	179	428
US plumbing and heating	317	397
Canada	32	39
North America plumbing and heating	349	436
North America loan services	(24)	(19)
North American central costs	(8)	(8)
North America	317	409
Group central costs	(49)	(50)
Group	447	787

Operating (loss)/profit by reportable segment and reconciliation to (loss)/profit before tax for continuing operations	2009 £m	2008 (restated) £m
UK and Ireland	(251)	99
France	9	80
Nordic	(329)	103
Central and Eastern Europe	(108)	(15)
European central costs	(7)	(14)
Europe	(686)	253
US plumbing and heating	206	349
Canada	25	32
North America plumbing and heating	231	381
North America loan services	(55)	(19)
North American central costs	(8)	(8)
North America	168	354
Group central costs	(88)	(52)
Group operating (loss)/profit	(606)	555
Finance revenue	72	72
Finance costs	(217)	(228)
Share of after tax loss of associate	(15)	–
(Loss)/profit before tax	(766)	399

The change in revenue and trading profit between the years ended 31 July 2008 and 31 July 2009 can be analysed into the effects of changes in exchange rates, the effects of disposals made during the financial year, and the effect of taking in a full year’s revenue and trading profit of businesses acquired part way through the previous year, with the remainder being organic change.

Analysis of change in revenue	2008 (restated) £m	Exchange £m	Disposals £m	Increment on 2008 acquisitions £m	Organic change £m	Organic change %	2009 £m
UK and Ireland	3,203	46	–	1	(551)	(17.0)	2,699
France	2,116	342	(20)	22	(316)	(12.9)	2,144
Nordic	2,290	299	–	–	(476)	(18.4)	2,113
Central and Eastern Europe	908	158	(15)	9	(95)	(8.9)	965
Europe	8,517	845	(35)	32	(1,438)	(15.4)	7,921
US plumbing and heating	5,613	1,533	–	12	(1,338)	(18.7)	5,820
Canada	684	61	–	–	(45)	(6.0)	700
North America	6,297	1,594	–	12	(1,383)	(17.5)	6,520
Group	14,814	2,439	(35)	44	(2,821)	(16.4)	14,441

Analysis of change in trading profit (note 12)	2008 £m	Exchange £m	Disposals £m	Increment on 2008 acquisitions £m	Organic change £m	Organic change %	2009 £m
UK and Ireland	176	–	–	–	(121)	(68.7)	55
France	103	17	(1)	1	(88)	(73.0)	32
Nordic	159	22	–	–	(85)	(47.1)	96
Central and Eastern Europe	–	3	1	–	(4)	(127.4)	–
European central costs	(10)	–	–	–	6		(4)
Europe	428	42	–	1	(292)	(62.0)	179
US plumbing and heating	397	108	–	2	(190)	(37.6)	317
Canada	39	4	–	–	(11)	(25.6)	32
North America plumbing and heating	436	112	–	2	(201)	(36.7)	349
North America loan services	(19)	(5)	–	–	–	3.1	(24)
North American central costs	(8)	(3)	–	–	3		(8)
North America	409	104	–	2	(198)	(38.4)	317
Group central costs	(50)	1	–	–	–		(49)
Group	787	147	–	3	(490)	(52.3)	447

Other segmental information:

For the year ended 31 July 2009	UK and Ireland £m	France £m	Nordic £m	Central and Eastern Europe £m	US plumbing and heating £m	Canada £m	North America loan services £m	Group centre £m	Dis-continued operations £m	Total £m
Depreciation of property, plant and equipment	52	35	24	12	85	4	–	1	15	228
Impairment of property plant and equipment	34	–	–	8	–	–	–	–	16	58
Amortisation of non- acquired intangibles	1	–	1	2	3	–	–	12	–	19
Impairment of non- acquired intangibles	–	–	–	3	–	–	–	40	–	43
Amortisation of acquired intangibles	14	3	55	1	31	1	–	–	12	117
Impairment of acquired intangibles	109	–	359	22	–	–	–	–	288	778
	210	38	439	48	119	5	–	53	331	1,243
Additions to property, plant and equipment	19	30	25	5	10	2	–	–	3	94
Additions to non-acquired intangible assets	–	1	–	–	2	–	–	74	–	77
	19	31	25	5	12	2	–	74	3	171
Segment assets	1,394	1,188	1,847	417	2,237	305	207	195	–	7,790
Reconciliation to total assets as reported in the Group balance sheet:
Investment in associate										53
Deferred tax assets										244
Financial assets – current and non-current										158
Current tax receivable										124
Derivative financial assets										57
Cash and cash equivalents										635
Total assets as reported in the Group balance sheet										9,061
Segment liabilities	927	565	546	220	856	106	165	145	–	3,530
Reconciliation to total liabilities as reported in the Group balance sheet:
Current tax payable										173
Bank loans and overdrafts										1,699
Obligations under finance leases										71
Derivative financial liabilities										36
Deferred tax liabilities										176
Total liabilities as reported in the Group balance sheet										5,685

For the year ended 31 July 2008	UK and Ireland £m	France £m	Nordic £m	Central and Eastern Europe £m	US plumbing and heating £m	Canada £m	North America loan services £m	Group centre £m	Dis-continued operations £m	Total £m
Depreciation of property, plant and equipment	52	30	20	10	68	4	–	1	27	212
Amortisation of non- acquired intangibles	1	–	1	2	2	–	–	9	–	15
Impairment of non- acquired intangibles	–	–	–	12	–	–	–	3	–	15
Amortisation of acquired intangibles	19	2	52	3	27	2	–	–	30	135
Impairment of acquired intangibles	46	–	–	11	–	–	–	–	114	171
	118	32	73	38	97	6	–	13	171	548
Additions to property, plant and equipment	50	33	30	14	92	4	–	1	11	235
Additions to non-acquired intangible assets	–	–	–	17	2	–	–	80	–	99
	50	33	30	31	94	4	–	81	11	334
Additions to goodwill	10	37	–	4	22	–	–	–	11	84
Additions to acquired intangible assets	3	10	–	–	36	–	–	–	15	64
Segment assets	1,857	1,315	2,222	522	2,427	326	264	156	794	9,883
Reconciliation to total assets as reported in the Group balance sheet:
Deferred tax assets										52
Financial assets – current and non-current										9
Current tax receivable										18
Derivative financial assets										16
Cash and cash equivalents										321
Total assets as reported in the Group balance sheet										10,299
Segment liabilities	833	666	553	201	767	111	240	98	206	3,675
Reconciliation to total liabilities as reported in the Group balance sheet
Current tax payable										219
Bank loans and overdrafts										2,716
Obligations under finance leases										87
Derivative financial liabilities										8
Deferred tax liabilities										235
Total liabilities as reported in the Group balance sheet										6,940

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