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ifrs-full:SeparateMemberRevisionspåtegningÅrsrapport24994570Lauritz.com A/SDynamovej112860SøborgDK1999-10-01Søborg+ 45 44 50 98 00www.lauritz.com2018-01-012018-12-312017-01-012017-12-312019-04-30Preben Vinkler LindgaardPreben Vinkler LindgaardThomas Rantzau Stensgaard CFOCCOBengt Olof Tony SundströmClaus Due PedersenJohn TyrrestrupMette Margrethe Rode Sundstrøm Preben Vinkler LindgaardChairman33963556Deloitte Statsautoriseret RevisionspartnerselskabWeidekampsgade60900København C33963556Deloitte Statsautoriseret RevisionspartnerselskabWeidekampsgade 60900 København CTo the shareholders of Lauritz.com A/SOpinionWe have audited the consolidated financial statements and the parent financial statements of Lauritz.com A/S for the financial year 01.01.2018 - 31.12.2018, which comprise the statement of comprehensive income, balance sheet, statement of changes in equity, cash flow statement and notes, including a summary of significant accounting policies, for the Group as well as for the Parent. The consolidated financial statements and the parent financial statements are prepared in accordance with International Financial Reporting Standards as adopted by the EU and additional requirements of the Danish Financial Statements Act. In our opinion, the consolidated financial statements and the parent financial statements give a true and fair view of the Group’s and the Parent’s financial position at 31.12.2018, and of the results of their operations and cash flows for the financial year 01.01.2018 - 31.12.2018 in accordance with International Financial Reporting Standards as adopted by the EU and additional requirements of the Danish Financial Statements Act. Our opinion is consistent with our audit book comments issued to the Audit Committee and the Board of Directors.Basis for OpinionWe conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the Auditor’s responsibilities for the audit of the consolidated financial statements and the parent financial statements section of this auditor’s report. We are independent of the Group in accordance with the International Ethics Standards Board of Accountants' Code of Ethics for Professional Accountants (IESBA Code) and the additional requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. To the best of our knowledge and belief, we have not provided any prohibited non-audit services as referred to in Article 5(1) of Regulation (EU) No 537/2014. We were appointed auditors of Lauritz.com A/S for the first time on 15 April 2015 following Lauritz.com A/S’ bond issue being listed on Nasdaq OMX Stockholm. We have been reappointed annually by decision of the general meeting up to and including the financial year 2018.Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements and the parent financial statements for the financial year 01.01.2018 - 31.12.2018. These matters were addressed in the context of our audit of the consolidated financial statements and the parent financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Capital structure and financing Refer to notes 18, 20 and 26 in the consolidated financial statements. Meeting it’s financial obligations under the terms of the bond debt and the availability of sufficient funding are important for the going concern assumption covering the period until 31 December 2019, are significant aspects in our audit. The going concern assessment is largely based on Management’s expectations and estimates. The expectations and estimates can be influenced by subjective elements such as forecasted auction turnover, revenue, EBITDA and estimated future cash flows. Management’s estimates are based on assumptions, including expectations regarding future developments in the online auction market. Accordingly, the capital structure and financing is considered to be a key audit matter. Based on our risk assessment, we performed audit procedures consisting of, among other things, an assessment of the assumptions made by Management in the budget for 2019 approved by the Board. We have specifically devoted attention to the assumptions made with respect to the future EBITDA and cash flow generation and expected available capital resources in order to assess the Group’s ability to continue meeting its payment obligations and its obligations according to the restructured bond terms agreed with bondholders in February 2019. Furthermore, we have read the description in the financial statements of the capital structure and financing, and challenged Management on their expectations to meeting the payment obligations as well as their assesment of Carrying value of goodwill and other intangible assets Refer to notes 1, 6 and 11 in the consolidated financial statements. The determination of recoverable amount for the reportable segment and cash-generating unit Lauritz.com was based on the value-in-use derived from future free net cash flow based on budgets and forecasts for the coming five years and cash flows from the terminal period. Significant judgement is required by Management in determining value-in-use, including free cash flow projections based on financial budgets for 2019 and financial forecasts for 2020-2023, discount rate and growth rate in the terminal period. Accordingly, the carrying value of goodwill and other intangible assets relating to Lauritz.com is considered to be a key audit matter. Based on our risk assessment, we have obtained and evaluated Management’s determination of value-in-use for goodwill and other intangible assets for Lauritz.com by which it was drawn up, including the mathematical accuracy of the underlying cash flow model and agreeing future growth, investment and margin assumptions to the budget for 2019 approved by the Board. We evaluated the appropriateness of key market-related assumptions in Management’s valuation model, including discount rates and terminal growth rates. We assessed the reasonableness of Management’s future forecasts of growth, investment and margin included in the cash flow forecasts and the current operational results. In assessing the level of headroom in the value-in-use calculations for Lauritz.com, we performed a downside sensitivity analysis around the key assumptions, using a range of higher discount rates, lower growth rates in the forecast period and lower terminal growth rates. Carrying value of contractual receivables. Refer to notes 1, 16 and 20 in the consolidated financial statements. When Management assess the measurement, including determination of the life time expeceted loss on contratual receivables from sale of partnership agreements, Management uses estimates of partners’ credit risk, including assessment of partners’ historical and future performance in order to determine partners’ ablity to repay contractual receivables. Management’s asssement is based on review of historical financial information and forecasts for future periods. Significant judgement is required by Management in determining partners’ auction turnover, EBITDA, including free cash flow projections in order to assess the credit risk that relates to partners. Accordingly, the carrying value of contractual receivables is considered to be a key audit matter. Based on our risk assessment, we have obtained and evaluated Management’s measurement of contractual receivables, including determination of credit risk and calculation of any lifetime expected loss. We assessed the underlying process by which Management drawn up their assessment. This included review of historical financial performance of partners. We performed test of the mathematical accuracy of the forecast model. We evaluated the appropriateness of key market-related assumptions in Management’s valuation model, including growth rate for partners’ revenue and cost and the applied discount rates. We evaluated the appropriateness of the life time expected loss.Management is responsible for the management review. Our opinion on the consolidated financial statements and the parent financial statements does not cover the management review, and we do not express any form of assurance conclusion thereon. In connection with our audit of the consolidated financial statements and the parent financial statements, our responsibility is to read the management review and, in doing so, consider whether the management review is materially inconsistent with the consolidated financial statements and the parent financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. Moreover, it is our responsibility to consider whether the management review provides the information required under the Danish Financial Statements Act. Based on the work we have performed, we conclude that the management review is in accordance with the consolidated financial statements and the parent financial statements and has been prepared in accordance with the requirements of the Danish Financial Statements Act. We did not identify any material misstatement of the management review.Management is responsible for the preparation of consolidated financial statements and parent financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the EU and additional requirements of the Danish Financial Statements Act, and for such internal control as Management determines is necessary to enable the preparation of consolidated financial statements and parent financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements and the parent financial statements, Management is responsible for assessing the Group’s and the Parent’s ability to continue as a going concern, for disclosing, as applicable, matters related to going concern, and for using the going concern basis of accounting in preparing the consolidated financial statements and the parent financial statements unless Management either intends to liquidate the Group or the Parent or to cease operations, or has no realistic alternative but to do so.Our objectives are to obtain reasonable assurance about whether the consolidated financial statements and the parent financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements and these parent financial statements. As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:  Identify and assess the risks of material misstatement of the consolidated financial statements and the parent financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the Parent’s internal control.  Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management.  Conclude on the appropriateness of Management’s use of the going concern basis of accounting in preparing the consolidated financial statements and the parent financial statements, and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's and the Parent’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements and the parent financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group and the Parent to cease to continue as a going concern.  Evaluate the overall presentation, structure and content of the consolidated financial statements and the parent financial statements, including the disclosures in the notes, and whether the consolidated financial statements and the parent financial statements represent the underlying transactions and events in a manner that gives a true and fair view.  Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements and the parent financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.Copenhagen2019-04-03Lars Siggaard HansenState-Authorised Public Accountantmne32208Lauritz.com has evaluated corporate social responsibility risks related to human rights, environment & climate, employee conditions and corruption and bribery. The primary risk concerning human rights is that employees or business partners may feel discriminated or not treated equally. Concerning corruption, the primary risk is that employees may use payments, gifts or other means to illegally influence business partners and clients or vice versa. For employee conditions, the primary risk is that employees may feel demotivated or that employees may suffer from work related illnesses. For environment and climate, the primary risk is related to the energy consumption of our offices, warehouses and in relation to transportation of goods. Overall, we perceive that our risks in these areas are considered low. The primary reason is that we operate in Scandinavia and therefore follow existing rules and laws in relation to human rights, employee conditions, environment and climate and anti-corruption. Therefore, we have also chosen not to have separate policies regarding these areas. We are, however, continuously reviewing the need for developing separate policies in relation to corporate social responsibility.The Board of Directors and the Executive Management are overall responsible for the Group’s control and risk management in connection with the reporting process, including compliance with applicable laws and regulations in connection with the financial reporting. The Group’s control and risk management systems may provide fair but not absolute certainty that unlawful use of assets, losses and/or significant errors or omissions in connection with the reporting process is reduced. There is no requirement for the Group to comply with a corporate governance codex. Control environment The Board of Directors assesses at least once a year the Group’s organisational structure, the risk of fraud and the presence of internal rules and guidelines. The Executive Management monitors the compliance with applicable laws and regulations and other rules and regulations in connection with the financial reporting on an ongoing basis and reports to the Board of Directors on an ongoing basis. Risk assessment in connection with the reporting process The Board of Directors makes at least once a year an overall risk assessment in connection with the reporting process. As part of the risk assessment, the Board of Directors considers the risk of fraud and the measures that need to be taken to reduce and/or eliminate such risks. At the same time, Management’s incentive/motive, if any, for fraudulent financial reporting or other fraud is discussed. Particular risks The IT-platform is critical for Lauritz.com. IT-related risks can significantly impact the operation of www.lauritz.com. These risks include crashes, loss of data, competitors or others monitor or hack into the system, as well as virus-/cyber-attacks. Financial risks As a result of its operations, its investments and its financing, the Group is exposed to changes in foreign exchange rates and the level of interest rates. The Parent controls the financial risks in the Group centrally and coordinates the Group’s cash management, including funding and placing of excess liquidity. The issuance of bonds in Swedish kroner means increased risk of exposure to financial items in connection with changes in foreign exchange rates between Swedish and Danish kroner, as Lauritz.com Group A/S presents its annual report in DKK. This risk is partly offset by part of the business having SEK as functional currency. The Interest rate on bonds issued in 2014 is based on 3M STIBOR + 750 basis points. The floating interest rate may thus affect the financial items of the company. In connection with the refinancing of the bonds in 2019 the interest rate is being converted to a fixed interest rate, resulting in an elimination of the exposure to changes in market level of interest rates (STIBOR). The financial risks are assessed on an ongoing basis. During 2018, no hedging transactions have been entered into and there are no open hedging transaction at 31 December 2018. Capital resources It is the objective of the Group to have sufficient capital resources to be able to make suitable dispositions in proportion to operations and investments. Management assesses the capital structure on an ongoing basis with a view to ensuring justifiable equity in the company. At 31 December 2018, the equity amounts to DKK –30.0.m (2016: DKK 39.9m), corresponding to an equity ratio of -8.6 percent (2017: 9.1 percent). Equity will be restored when the reduction of the bond debt becomes effective in 2019, impacting Equity positively by 80m after transaction cost and tax. Owners Lauritz.com Group A/S is since 22 June 2016 listed on Nasdaq First Premier Stockholm with the ticker LAUR. The largest shareholders of Lauritz.com Group A/S are founder Bengt Sundström (56.1%) and Mette Rode Sundstrøm (5.2%). Board of Directors’ committees The Board of Directors has appointed an Audit Committee consisting of Bengt Sundström, Chairman of the Board of Directors, and John Tyrrestrup, member of the Board of Directors. Altogether, the Audit Committee has extensive experience within financial areas and audit and accounting experience. The Audit Committee has held one meeting during 2018, going forward, the Committee expects to meet at least three times a year. The Board of Directors has appointed a Remuneration Committee consisting of Claus Due Pedersen (Chairman) and Bengt Sundström, both are members of the Board of Directors. The aim of the Remuneration Committee is to make recommendations for remunerations and terms of job interviews with Management of the Group. The Remuneration Committee has held three meetings during 2018, going forward, the Committee expects to meet at least three times a year. The Board of Directors has appointed a Nomination Committee consisting of Bengt Sundström and Claus Due Pedersen. The aim of the Nomination Committee is to make recommendations for the composition of the Board of Directors and Management of the Group. The Nomination Committee has held three meetings during the last year, and going forward, the Committee expects to meet at least three times a year. Information on board member’s other managerial posts Name Managerial post Subcommittees of the Board Bengt Olof Tony Sundström, Chairman Blixtz Holding A/S, Chairman of the Board of Directors Ejendomsselskabet Blixtz ApS, Managing Director Passionsfabrikken ApS, Managing Director Audit committee (Chairman) Remuneration committee Nomination committee (Chairman) Amio.dk ApS, Managing Director Vignelaure S.A.S., Managing Director SNC Soleil de Vignelaure, Managing Director John Tyrrestrup Blixtz Holding A/S, member of the Board of Directors Audit committee Mette Margrethe Rode Sundstrøm Preben Vinkler Lindgaard Claus Due Pedersen Weco Invest A/S, member of the Board of Directors Weco-Travel International A/S, member of the Board of Directors Weco-Travel Cee A/S, member of the Board of Directors Blixtz Holding A/S, Managing Director Stockholms Auktionsverk AB, Managing Director Lauritz.com Sverige AB, Managing Director None Domusnord ApS, owner and Commercial Director Due & Fangel ApS, owner and Commercial Director DN Retail ApS owner and Commercial Director None None Remuneration committee (chairman) Nomination committeeAt the end of 2018, the Board of Directors consisted of five board members elected by the annual general meeting, of which four are males and one is female. The objective is to have both genders represented in the Board of Directors, meaning that the target for the underrepresented gender is at least 20%. As the Board of Directors consists of five members, changes are infrequent and candidates with the right qualifications are scarce this target is evaluated as ambitious. The Executive management level consisting of CCO and CFO has a composition of two males and zero females at the end of 2018. For the next level of management (country managers and branch managers) there was a composition of three male and four females at the end of 2018. As the company has an equal number of men and women in the management positions, we do not have a separate policy regarding underrepresented gender. At Lauritz.com Group A/S we believe that diversity regarding education, nationality, gender etc. is a strength. We recruit solely on the basis of individual qualifications, and strive to reach a balanced gender representation at all levels of our organisation. Our non-discriminatory practices are an integrated part of how we recruit and develop our talents. We encourage our employees with management ambitions and talent, regardless of gender, to take on managerial tasks, and we support their development without gender bias. Further we have reviewed the employment conditions to ensure that there is no gender bias stemming from these, and when recruiting for management positions we ensure that qualified candidates of both genders are part of the process. Despite our position and efforts, we do not yet have a balanced gender representation at the Board and Executive management levels. We will continue the focus on creating equal opportunities and take further relevant initiatives in this field in the future.

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