KPMG Integrated report 2021/2022

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. The Group has the following primary operating segments, which have been identified based on the way operations and financial information are organized and financial information is reported to the Board of Management:

Assurance;
Advisory.

The operating results of all operating segments for which discrete financial information is available is reviewed regularly by the Board of Management so that it can make decisions about resources to be allocated to the segment and to assess the segment's performance.

As the Group operates in the Netherlands, there is only one geographic segment.

The pricing of intersegment transactions is determined in accordance with the applicable internal policies.

The Group’s operating segments are its reportable segments.

Information about reportable segments

Information related to each reportable segment is set out below. Net sales, Income and Operational results are used to measure performance as management believes this information to be the most relevant in evaluating the results of the respective segments relative to other entities that operate in the same industries. In addition, average FTEs per segment are closely monitored.

Segmentation 2021/2022	Assurance	Advisory	Total reportable segments	Other segments and intersegment eliminations	Total
EUR 000
Net sales	342,005	250,765	592,770	-2	592,768
Income	330,189	261,640	591,829	-351	591,478
Operational result	94,025	91,121	185,146	-100,454	84,692

	Assurance	Advisory	Total reportable segments	Other segments	Total
	Assurance	Advisory	Total reportable segments	Other segments	Total
Average FTEs
Partners	90	62	152	6	158
Other professionals	1,710	1,171	2,881	-	2,881
Support staff	152	70	222	552	774
Total FTEs	1,952	1,303	3,255	558	3,813

Segmentation 2020/2021	Assurance	Advisory	Total reportable segments	Other segments and intersegment eliminations	Total


EUR 000
Net sales	309,840	210,538	520,378	-	520,378
Income	298,530	221,822	520,352	-975	519,377
Operational result	93,188	76,336	169,524	-84,929	84,595

	Assurance	Advisory	Total reportable segments	Other segments	Total
	Assurance	Advisory	Total reportable segments	Other segments	Total
Average FTEs
Partners	86	53	139	6	145
Other professionals	1,590	1,036	2,626	-	2,626
Support staff	147	59	206	513	719
Total FTEs	1,823	1,148	2,971	519	3,490

Reconciliation of information on reportable segments to the amounts reported in the financial statements

EUR 000	2021/2022	2020/2021
Net sales and income
Net sales	592,768	520,378
Adjustment internal revenue	-1,290	-1,001
Income	591,478	519,377
Client related expenses	63,968	49,295
Consolidated revenue	655,446	568,672

Operational result
Operational result	84,692	84,595
Advanced fees paid to the Cooperative	37,606	34,824
IFRS 16 adjustments	1,976	2,112
Extraordinary results	2,648	-1,512
Consolidated Operating result	126,922	120,019

Work performed by employees for internal purposes (adjustments internal revenue) is included in net sales for internal reporting purposes. This is excluded from income or consolidated revenue.

Income for internal reporting purposes is exclusive of client-related expenses, such as travel expenses, expense declarations or external client-related invoices. When these expenses are invoiced to the client, they are included in consolidated revenue.

Operational result for internal reporting purposes is exclusive of advanced fees paid to the Cooperative, the effects of IFRS 16 and extraordinary results such as the book gain on the sale of the KPMG Investments Malta Ltd., which are included in consolidated operating result.