Segment reporting by operating segments

The Management Board sets performance targets, approves and monitors the budgets prepared by servicing units. Servicing units are not identical to the strategic sectors.

FMO's strategic sectors represent the economic sectors in which FMO operates. The three strategic sectors are Agribusiness Food and Water, Financial Institutions and Energy, which represent economic sectors. As per December 31, 2022, FMO's Management Board steers on the following four operating segments: Financial Institutions, Energy, Agribusiness Food and Water and Private Equity.

In 2022, two transactions are transferred from Financial Institutions to Agribusiness Food & Water. This transfer amounted up to €5.9 million in total. In addition, one transaction was transferred from Energy to PE, the loan was converted to equity. The total amount of the transfer was €3.5 million.

FMO presents the results of the operating segments using a financial performance measure called underlying profit. Underlying profit excludes the EUR/USD currency effects related to the results from equity investments, since all fair value changes including currency effects are now recorded in the profit and loss account instead of shareholder's equity since the adoption of IFRS 9.

Underlying profit as presented below is an alternative performance measure. A reconciliation of the underlying net profit to the net profit as reported under the statement of profit and loss is performed in the table here below.

December 31, 2022	Financial Institutions	Energy	Agribusiness, Food and Water	Private Equity	Other	Total

Interest income	152,832	118,082	62,123	2,916	15,131	351,084
Interest expenses	-23,104	-25,349	-10,969	-42,986	-13,892	-116,300
Net fee and commission income	-2,354	2,957	-2,511	533	-522	-1,897
Dividend income	-	-	-	41,423	-	41,423
Results from equity investments	-	-	-	-33,354	-	-33,354
Results from financial transactions	-11,798	-1,382	-18,870	-33,860	47,079	-18,831
Remuneration for services rendered	5,705	6,543	3,921	12,695	4,073	32,937
Gains and losses due to derecognition	3	299	-	-3	-299	-
Other operating income	-	-	-	-	299	299
Allocated income	10,956	12,021	5,202	20,384	-48,563	-
Total underlying income	132,240	113,171	38,896	-32,252	3,306	255,361

Operating expenses	-40,942	-35,065	-25,829	-48,154	-2,450	-152,440
Total operating expenses	-40,942	-35,065	-25,829	-48,154	-2,450	-152,440

Impairments on loans and guarantees	-15,395	-77,571	-49,171	-402	-244	-142,783
Total impairments	-15,395	-77,571	-49,171	-402	-244	-142,783

Profit/(loss) before taxation	75,903	535	-36,104	-80,808	612	-39,862
Share in results from associates	-	-	-	-58,597	-	-58,597
Taxation	-13,716	-97	6,524	26,403	-109	19,005
Underlying net profit/(loss)	62,187	438	-29,580	-113,002	503	-79,454

Currency effect equity investments	-	-	-	80,489	-	80,489
Net profit/(loss)	62,187	438	-29,580	-32,513	503	1,035

December 31, 2021	Financial Institutions	Energy	Agribusiness, Food and Water	Private Equity	Other	Total

Interest income	105,708	103,276	48,206	2,807	6,566	266,563
Interest expenses	-7,251	-8,456	-3,723	-12,282	-4,142	-35,854
Net fee and commission income	843	6,322	-1,365	349	-452	5,697
Dividend income	-	-	-	22,066	-	22,066
Results from equity investments	-	-	-	188,254	-	188,254
Results from financial transactions	1,559	-10,844	-4,161	-19,083	6,110	-26,419
Remuneration for services rendered	6,742	5,893	4,426	10,600	4,596	32,257
Gains and losses due to derecognition	536	3,505	1,094	-	-	5,135
Other operating income	-	-	-	-	116	116
Allocated income	1,939	2,261	995	3,284	-8,479	-
Total underlying income	110,076	101,957	45,472	195,995	4,315	457,815

Operating expenses	-29,356	-26,010	-19,517	-34,016	-5,251	-114,150
Total operating expenses	-29,356	-26,010	-19,517	-34,016	-5,251	-114,150

Impairments on loans and guarantees	22,930	-8,397	-4,850	-1,424	807	9,066
Total impairments	22,930	-8,397	-4,850	-1,424	807	9,066

Profit/(loss) before taxation	103,650	67,550	21,105	160,555	-129	352,731
Share in results from associates	-	-	-	63,902	-	63,902
Taxation	-22,526	-14,681	-4,587	11,180	28	-30,586
Underlying net profit/(loss)	81,124	52,869	16,518	235,637	-101	386,047

Currency effect equity investments	-	-	-	104,599	-	104,599
Net profit/(loss)	81,124	52,869	16,518	340,236	-101	490,646

Segment assets December 31, 2022	Financial Institutions	Energy	Agribusiness, Food and Water	Private Equity	Other	Total

Loans to the private sector	2,590,592	1,524,168	961,131	22,521	11,223	5,109,635
Equity investments and investments in associates	-	-	-	2,579,596	-	2,579,596
Other assets	744,821	438,213	276,335	748,135	3,226	2,210,730
Total assets	3,335,413	1,962,381	1,237,466	3,350,252	14,449	9,899,961
Contingent liabilities – Effective guarantees issued	90,403	19,308	28,098	550	-	138,359
Assets under management (loans and equity investments) managed for the risk of the state	123,617	184,469	160,730	563,026	-	1,031,842

Segment assets December 31, 2021	Financial Institutions	Energy	Agribusiness, Food and Water	Private Equity	Other	Total

Loans to the private sector	2,260,346	1,514,056	960,103	25,166	15,020	4,774,691
Equity investments and investments in associates	-	-	-	2,315,987	-	2,315,987
Other assets	705,330	472,454	299,595	730,545	4,687	2,212,611
Total assets	2,965,676	1,986,510	1,259,698	3,071,698	19,707	9,303,289
Contingent liabilities – Effective guarantees issued	49,905	18,919	-	517	-	69,341
Assets under management (loans and equity investments) managed for the risk of the state	145,350	179,044	139,367	561,741	-	1,025,502