VII. Segment Information

The segment information is, for the first time, being provided in conformity with IFRS 8 Operating Segments. As described in “New accounting pronouncements”, Bechtle applied this standard for the first time ever during the reporting period.

Bechtle AG currently has operations in two segments: “IT system house & managed services” (formerly “IT system house”) and “IT e-commerce”. The two segments differ in terms of their areas of activity and their sales processes for IT products. Their strategic alignment and expansion strategies are also different.

Bechtle's IT system house & managed services segment caters to small and medium-sized businesses, financial service providers and the public sector by handling all their IT infrastructure and application support needs. Its services range from IT strategy consulting and supplying hardware and software to project planning and execution, system integration, maintenance and training to countless IT services, including full-service IT hosting. The Bechtle IT system house segment has over 50 offices distributed throughout Germany, Switzerland and Austria so it can remain close to its customers at all times.

“Managed services” was added to this segment's name during the reporting period. This was done to clearly and visibly express the growing importance of managed services – i.e. the services involved in outsourcing and outtasking customer IT processes – which are closely tied to the conventional IT system house business. This was a change in name only; the service differentiation and allocation remains the same.

The IT e-commerce segment comprises the group's Internet, catalogue, and telesales-based trading activities. Bechtle pursues a multi-brand strategy in this segment. Its Bechtle direct brand is represented in ten European countries; its ARP Datacon brand operates in five countries; and its Comsoft software licensing companies are represented in four countries outside Germany. As a specialised IT reseller with more than 37,000 IT products, Bechtle offers the full range of standard products from about 300 manufacturers. To a limited extent, ARP Datacon also offers products under its own label.

Most of the Bechtle Group's offices are in Germany. It maintains foreign offices in Austria, Belgium, France, Ireland, Italy, the Netherlands, Spain, Switzerland, Taiwan and the United Kingdom.

Most of its administration – especially the strategic management of the individual companies – is centralised in Gaildorf and Neckarsulm with Bechtle AG as the group parent with the Executive Board.

The same accounting policies apply to the segment information as to the consolidated financial statements. An aggregation of operating segments has not been presented.

The segment information presented here conforms to the measures that are used in the internal reporting and management system and applied by the group's management to assess performance and allocate resources. It contains all the revenues, expenses, assets and liabilities of the Bechtle Group's central units/functions, as provided or used in the two segments “IT system house & managed services” and “IT e-commerce”. The segments' earnings-related key performance indicator (KPI) is operating profit, i.e. earnings before financial income, financial expense and taxes. The KPI does not include financial earnings because Bechtle AG provides most of the financing for the segments, and so Bechtle AG incurs/earns most of the external interest cost/income. For this reason, financial income and expenses are only recognised at the group level and used to determine financial earnings. This is then used to determine earnings before taxes in the Bechtle Group and, after accounting for taxes at the group level, earnings after taxes in the Bechtle Group.

An asymmetric allocation (IFRS 8.27 f) exists in the sense that the segments' reported assets and liabilities comprise interest-bearing assets and liabilities as well as tax assets and liabilities. If the allocation was symmetrical, segment assets and liabilities would be lower and the segments' earningsrelated KPI would be broader and also include financial income, finance expenses and taxes.

An insignificant volume of transactions is conducted between the two segments. The transactions are settled at market rates. The transactions along with their revenues, receivables and payables are expressly disclosed below in the interest of completeness and transparency. External revenue consists of revenue generated by the two segments with non-group entities and thus, in its sum, constitutes the consolidated revenue of the Bechtle Group. The same principle applies to the receivables, payables, assets and liabilities of the two segments and, thus, of the Bechtle Group.

The investments, depreciation and amortisation are recognised for intangible assets (including goodwill) and property, plant and equipment.

In the segment report according to regions (domestic or abroad), revenue is assigned to the country where the subsidiary is domiciled. From the subsidiary's point of view, it only generates revenue in its own country. Only external revenue is reported. Assets, liabilities and investments are also assigned to the domestic market (Germany) or abroad depending on the subsidiary's domicile.

in th. euros		2008						2007
		IT system house & managed services		IT e-commerce		Total Group		IT system house & managed services		IT e-commerce		Total Group
According to Segments
Total segment revenues		928,216		504,010				887,762		497,945
minus revenues with another segment		- 686		- 78				- 1,990		- 264
External revenues		927,530		503,932		1,431,462		885,772		497,681		1,383,453
Amortisation/depreciation		9,402		4,508		13,910		9,743		3,758		13,501
Operating earnings		38,444		21,785		60,229		33,065		25,188		58,253
Financial result						1,304						753
Earnings before taxes						61,533						59,006
Income taxes						16,105						18,047
Earnings after taxes						45,428						40,959
Investments		12,054		2,018		14,072		8,434		2,851		11,285
Investments by changes to consolidated companies		7,509		0		7,509		4,816		2,881		7,697
Total segment assets		326,971		169,254				296,276		155,789
minus receivables from another segment		- 125		- 32				- 81		- 561
Assets		326,846		169,222		496,068		296,195		155,228		451,423
Total segment liabilities		122,559		62,217				104,550		71,050
minus liabilities to another segment		- 32		- 125				- 561		- 81
Liabilities		122,527		62,092		184,619		103,989		70,969		174,958

The IT e-commerce segment's reported operating profit for the reporting period contains the following significant non-cash items: an impairment of 600 thousand euros for the Artikona brand and a capital gain of 466 thousand euros from the deconsolidation of TomTech. The other non-cash items in the two segments are restricted to the customary transactions occurring in the ordinary course of business (e.g. changes in trade receivables and trade liabilities).

in th. euros		2008						2007
		Domestic market		Abroad		Total Group		Domestic market		Abroad		Total Group
According to Regions
External sales		938,868		492,594		1,431,462		902,367		481,086		1,383,453
Investments		10,988		3,084		14,072		6,794		4,491		11,285
Investments by changes to consolidated companies		4,148		3,361		7,509		1,519		6,178		7,697
Assets		273,040		223,028		496,068		251,590		199,833		451,423
Liabilities		103,296		81,323		184,619		98,821		76,137		174,958

Switzerland accounted for 250,870 thousand euros of the external revenue (prior year: 253,114 thousand euros). The rest is distributed among the remaining countries of Austria, Belgium, France, Ireland, Italy, the Netherlands, Spain, Taiwan and the United Kingdom, each of which contributed less than five per cent of the Bechtle Group's external revenue.

There was no customer who accounted for more than ten per cent of the Bechtle Group's revenue in the reporting period or in the prior year (IFRS 8.34).

Employee numbers, broken down by segment and region, are disclosed in Item X. “Employees” of the notes to the consolidated financial statements.