xbrli:pureiso4217:DKK459985172022-01-012022-12-31cmn:ConsolidatedMember459985172022-01-012022-12-311cmn:ConsolidatedMember459985172022-01-012022-12-311cmn:ConsolidatedMember459985172022-01-012022-12-312cmn:ConsolidatedMember459985172022-01-012022-12-311459985172022-01-012022-12-312459985172022-01-012022-12-313459985172022-01-012022-12-314459985172022-01-012022-12-315459985172022-01-012022-12-316459985172022-01-012022-12-312cmn:ConsolidatedMember459985172022-01-012022-12-31459985172021-01-012021-12-31cmn:ConsolidatedMember459985172021-01-012021-12-31459985172022-01-012022-12-31fsa:ReserveForCurrentValueAdjustmentsOfCurrencyGainsMembercmn:ConsolidatedMember459985172022-01-012022-12-31fsa:ReserveForCurrentValueOfHedgingMembercmn:ConsolidatedMember459985172022-01-012022-12-31fsa:ReserveForNetRevaluationAccordingToEquityMethodMembercmn:ConsolidatedMember459985172022-01-012022-12-31fsa:RetainedEarningsMembercmn:ConsolidatedMember459985172022-01-012022-12-31fsa:ProposedDividendRecognisedInEquityMembercmn:ConsolidatedMember459985172022-01-012022-12-31fsa:EquityAttributableToParentMembercmn:ConsolidatedMember459985172022-01-012022-12-31fsa:MinorityInterestsMembercmn:ConsolidatedMember459985172022-01-012022-12-31fsa:ProposedDividendRecognisedInEquityMembercmn:ConsolidatedMember459985172021-01-012021-12-31fsa:ProposedDividendRecognisedInEquityMembercmn:ConsolidatedMember459985172022-01-012022-12-31fsa:RetainedEarningsMembercmn:ConsolidatedMember459985172021-01-012021-12-31fsa:RetainedEarningsMembercmn:ConsolidatedMember459985172022-01-012022-12-31fsa:MinorityInterestsMembercmn:ConsolidatedMember459985172021-01-012021-12-31fsa:MinorityInterestsMembercmn:ConsolidatedMember459985172022-01-012022-12-31fsa:ReserveForCurrentValueOfHedgingMember459985172022-01-012022-12-31fsa:ReserveForNetRevaluationAccordingToEquityMethodMember459985172022-01-012022-12-31fsa:RetainedEarningsMember459985172022-01-012022-12-31fsa:ProposedDividendRecognisedInEquityMember459985172022-01-012022-12-31fsa:ProposedDividendRecognisedInEquityMember459985172021-01-012021-12-31fsa:ProposedDividendRecognisedInEquityMember459985172022-01-012022-12-31fsa:RetainedEarningsMember459985172021-01-012021-12-31fsa:RetainedEarningsMember459985172022-12-31cmn:ConsolidatedMember459985172021-12-31cmn:ConsolidatedMember459985172022-12-31459985172021-12-31459985172022-01-01cmn:ConsolidatedMember459985172021-01-01cmn:ConsolidatedMember459985172022-01-01fsa:ContributedCapitalMembercmn:ConsolidatedMember459985172022-01-01fsa:ReserveForCurrentValueAdjustmentsOfCurrencyGainsMembercmn:ConsolidatedMember459985172022-01-01fsa:ReserveForCurrentValueOfHedgingMembercmn:ConsolidatedMember459985172022-01-01fsa:ReserveForNetRevaluationAccordingToEquityMethodMembercmn:ConsolidatedMember459985172022-01-01fsa:RetainedEarningsMembercmn:ConsolidatedMember459985172022-12-31fsa:ContributedCapitalMembercmn:ConsolidatedMember459985172022-12-31fsa:ReserveForCurrentValueAdjustmentsOfCurrencyGainsMembercmn:ConsolidatedMember459985172022-12-31fsa:ReserveForCurrentValueOfHedgingMembercmn:ConsolidatedMember459985172022-12-31fsa:ReserveForNetRevaluationAccordingToEquityMethodMembercmn:ConsolidatedMember459985172022-12-31fsa:RetainedEarningsMembercmn:ConsolidatedMember459985172022-01-01fsa:ProposedDividendRecognisedInEquityMembercmn:ConsolidatedMember459985172022-01-01fsa:EquityAttributableToParentMembercmn:ConsolidatedMember459985172022-01-01fsa:MinorityInterestsMembercmn:ConsolidatedMember459985172022-12-31fsa:ProposedDividendRecognisedInEquityMembercmn:ConsolidatedMember459985172022-12-31fsa:EquityAttributableToParentMembercmn:ConsolidatedMember459985172022-12-31fsa:MinorityInterestsMembercmn:ConsolidatedMember459985172022-01-01fsa:ContributedCapitalMember459985172022-01-01fsa:ReserveForCurrentValueOfHedgingMember459985172022-01-01fsa:ReserveForNetRevaluationAccordingToEquityMethodMember459985172022-01-01fsa:ReserveForDevelopmentExpenditureMember459985172022-01-01fsa:RetainedEarningsMember459985172022-12-31fsa:ContributedCapitalMember459985172022-12-31fsa:ReserveForCurrentValueOfHedgingMember459985172022-12-31fsa:ReserveForNetRevaluationAccordingToEquityMethodMember459985172022-12-31fsa:ReserveForDevelopmentExpenditureMember459985172022-12-31fsa:RetainedEarningsMember459985172022-01-01fsa:ProposedDividendRecognisedInEquityMember459985172022-01-01459985172022-12-31fsa:ProposedDividendRecognisedInEquityMember459985172022-01-012022-12-31fsa:ContributedCapitalMembercmn:ConsolidatedMember459985172022-01-012022-12-31fsa:ContributedCapitalMember459985172022-01-012022-12-316cmn:ConsolidatedMember459985172022-01-012022-12-311cmn:ConsolidatedMember459985172022-01-012022-12-313cmn:ConsolidatedMember459985172021-01-012021-12-316cmn:ConsolidatedMember459985172021-01-012021-12-311cmn:ConsolidatedMember459985172021-01-012021-12-313cmn:ConsolidatedMember459985172022-01-012022-12-31fsa:ManagementMembercmn:ConsolidatedMember459985172021-01-012021-12-31fsa:ManagementMembercmn:ConsolidatedMember459985172022-01-012022-12-31fsa:BoardOfDirectorsMembercmn:ConsolidatedMember459985172021-01-012021-12-31fsa:BoardOfDirectorsMembercmn:ConsolidatedMember459985172022-01-012022-12-31fsa:ManagementMember459985172021-01-012021-12-31fsa:ManagementMember459985172022-01-012022-12-31fsa:BoardOfDirectorsMember459985172021-01-012021-12-31fsa:BoardOfDirectorsMember459985172022-01-012022-12-31fsa:OtherShorttermPayablesMembercmn:ConsolidatedMember459985172022-01-012022-12-31fsa:ShorttermDeferredIncomeMembercmn:ConsolidatedMember459985172022-01-012022-12-31fsa:OtherShorttermPayablesMember459985172022-01-012022-12-31fsa:ReserveForDevelopmentExpenditureMemberGrundlag for konklusionKonklusion2023-03-312023-03-3133963556Deloitte Statsautoriseret RevisionspartnerselskabRevisionspåtegningRegnskabsklasse C, stor virksomhed2021-12-312021-01-0133963556Weidekampsgade 6Deloitte Statsautoriseret Revisionspartnerselskab2300 København S2022-12-312022-01-01Kvadrat A/S45998517ÅrsrapportAarhus C80002City Tower, VærkmestergadeSyddjursEbeltoft8400<br /><br />10LundbergsvejThe Board of Directors and the Executive Board have today considered and approved the annual report of Kvadrat A/S for the financial year 01.01.2022 - 31.12.2022.The annual report is presented in accordance with 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 31.12.2022 and of the results of their operations and the consolidated cash flows for the financial year
01.01.2022 - 31.12.2022.We believe that the management commentary contains a fair review of the affairs and conditions referred to therein.We recommend the annual report for adoption at the Annual General Meeting.EbeltoftAnders ByrielMette Rønn BendixCEOProduct DirectorLars Monrad-GyllingAnders ByrielMette Rønn BendixTorsten Leif MoeMikael Fabian SchillerClaire MidwoodChairmanTo the shareholder of Kvadrat A/SWe have audited the consolidated financial statements and the parent financial statements of Kvadrat A/S for the financial year 01.01.2022 - 31.12.2022, which comprise the income statement, balance sheet, statement of changes in equity and notes, including a
summary of significant accounting policies, for the Group as well as the Parent, and the consolidated cash flow statement. The consolidated financial statements and the parent financial statements
are prepared in accordance with 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 31.12.2022 and of the results of their operations and the consolidated cash flows for the financial year 01.01.2022 - 31.12.2022 in accordance
with the Danish Financial Statements Act.We conducted our audit in accordance with International Standards on Auditing (ISAs) and 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 for Accountants’ International Code of Ethics for Professional
Accountants (IESBA Code) and the additional ethical requirements applicable in Denmark, and we have fulfilled
our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.Management is responsible for the preparation of consolidated financial statements and parent financial statements that give a true and fair view in
accordance
with 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 Entity’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 Entity 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 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:<br />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.
<br />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 Entity’s internal control.
<br />Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by Management.
<br />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 Entity’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 Entity to cease to continue as a going concern.
<br />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.<br />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.Management is responsible for the management commentary.
Our opinion on the consolidated financial statements and the parent financial statements does not cover the management commentary, 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
commentary and, in doing so, consider whether the management commentary 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 commentary provides the information
required under the Danish Financial Statements Act.<br />Based on the work we have performed, we conclude that the management commentary 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 commentary.AarhusMichael BachJens Lauridsenmne19691mne34323State Authorised Public AccountantState Authorised Public AccountantFinancial highlights2022
DKK'0002021
DKK'0002020
DKK'0002019
DKK'0002018
DKK'000Key figuresRevenue1,868,1631,596,0571,452,9931,722,6541,407,751Gross profit/loss686,164608,673522,182593,359502,845Operating profit/loss35,41744,41514,38495,798127,850Net financials(11,464)(16,868)(9,429)(7,104)(5,418)Profit/loss for the year16,57627,1906,49582,39196,645Profit for the year excl
.
minority interests20,28518,90936375,18691,011Balance sheet total1,549,5241,527,2131,245,4201,198,004990,244Investments in property, plant and equipment43,494152,02640,99292,41231,424Equity411,644433,386375,940417,093403,797Equity excl. minority interests378,604396,927364,380403,603393,053Average number of
employees1,057986898981693RatiosGross margin (%)36.7338.1435.9434.4435.72Return on equity (%)5.234.970.0918.8825.63Equity ratio (%)24.4325.9929.2633.6939.69Financial highlights are defined and calculated in accordance with the current version of "Recommendations &
Ratios" issued by the CFA Society Denmark.Gross margin (%)
:Gross profit/loss * 100
RevenueReturn on equity (%)
:Profit/loss for the year excl. minority interests * 100
Average equity excl. minority interestsEquity ratio (%)
:Equity excl. minority interests * 100
Balance sheet totalPrimary activitiesKvadrat has been leading the field in textile innovation since 1968 when our company was founded.
We develop, produce and sell contemporary high-quality textiles and textile-related products for architects, designers and private consumers to specify in public spaces and domestic interiors.
Development in activities and financesThe revenue for the Group for 2022 amounted to DKK 1.868m compared to DKK 1.596m in 2021. Profit
before tax amounted to DKK 33,7m compared to DKK 31,7m in 2021.
The revenue for the parent company for 2022 amounted to DKK 837m compared to DKK 726m in 2021.
Profit before tax amounted to DKK 12,7m compared to DKK 1,4m in 2021.
The annual report for both the group and the parent company has – like previous years - been significantly affected by a high level of investments in strategic projects with the purpose of streamlining internal processes as well as readjusting our customer approach in terms of the products offered and the platform used to support the trade (online vs. offline). The investments will – according to our plans - pay off over a short period of years once the strategic projects have been completed and are fully operational.
Profit/loss for the year in relation to expected developmentsThe development in Group and parent company revenue and profits must be compared to the primarily positive expectations in the annual report for Kvadrat A/S for 2021.
The Executive Board and Board of Directors considers the results for 2022 to be satisfactory.
Uncertainty relating to recognition and measurementRecognition and measurement in the consolidated financial statements and parent company financial statement are not subject to any material uncertainties.Unusual circumstances affecting recognition and measurementNo particular circumstances exert material influence on the consolidated financial statements and parent company financial statement.
Neither the Group nor the parent company is exposed to particular risks apart from those generally occurring in our line of business.OutlookWe expect to continue investing in our current business, subsidiaries and internal processes in 2023 and strive to finalize and implement the ongoing strategic projects. As in previous years, any uncertainty is primarily related to developments in exchange rates and commodity prices as well as the overall economic developments in the markets where Kvadrat is an active player.
The primarily negative impacts from COVID-19 and thereto related known-on effects diminished during FY 2022 and only select markets and regions of Kvadrat Group are negatively affected by this at the end of FY 2022.
We expect to see both revenue and profits in 2023 to be above the levels realized in 2022.
Knowledge resourcesTo future-proof the Group in terms of the expected growth and expansion of the number of employees we are working proactively and continuously on developing all people in the organization to be able to best execute our Group strategy. The changes in our organizational footprint, having both sales, production and development companies in our portfolio, has meant that we have to increase the learning curriculum that we apply. We have also - in that respect - worked even more with cultural journeys to assure the corporate culture and identity.
We are currently more than 140 managers across production, sales subsidiaries, development companies and HQ functions. In 2021 we decided to strengthen the set up around our senior management and a larger group of leaders by creating a People Partner set up, where we internally support managers in people and performance related topics. Instead of working with external consultants to train and support our managers we do this from our own People Development department utilizing their knowledge of context and more direct availability. In 2022 this has been extended with insourcing manager training, where our own People Development department handles all learning. This we do to train our leaders in a Kvadrat context instead of sending them individually to business schools. This also creates strong social and working bonds across the organization when leaders from different parts of the company are trained together.
We continue to work on our leadership quality and also work more proactively and formalized with our People and organizational reviews. We continue to develop our own new managers via an internal program for High Potentials that we believe could assume more responsibility in a managerial role in the future. This program has generated 33 new managers during the last 5 years. Finally, we are proceeding to build the necessary competencies through our Kvadrat Academy which serves as a training forum for all Kvadrat’s employees. All training and competence development is organized as blended, a mix of digital and on-site learning.
In our employee surveys, the employees are asked about their general satisfaction and specific matters related to their everyday working life. The questions in 2022 were limited to overall satisfaction and Senior management related topics as we decided to move the “big” survey to Q1 2023, due to heavy workloads in Q4 2022. In 2022 we saw a decrease from 2021 from 74 to 72. We are not content with the result even though we have included new entities and still have the ongoing impact of our implementation of D365.
Our Strategic Direction in Kvadrat
The aspiration in Kvadrat is to “Push the boundaries of high-quality textiles through design and innovation”. This is based on Kvadrat being a dynamic, forward-looking design company that continuously seeks to push the boundaries of aesthetics and sustainable textile design globally. Kvadrat collaborates with architects to shape spaces, designers and furniture manufacturers to craft furniture, and encourages consumers to bring their personality and identity with tactility and color into their homes.
Success in Kvadrat is defined by four KPIs: Employee Temperature, Customer Pulse, Brand Reputation and Financial Health (Revenue, EBIT, ROIC). These four KPIs are the ultimate objectives for both our short- and long-term success, and therefore, all activities must strive to maximize value across these dimensions. The four KPIs are included in Kvadrat’ s global incentive program.
The 2021 – 2023 Kvadrat Group Strategy
The overall ambition of the 2021 – 2023 Kvadrat Group Strategy is to win market shares, increase efficiency and strengthen the organization to become a truly global business partner. To support this ambition, three strategic themes have been selected:
• Win market share to maintain and develop our strong market position
• Reduce complexity to create a scalable business model and increase efficiency
• Strengthen the organization to sharpen our competitive edge
We will win market shares by outperforming within our core product categories upholstery and curtains. This includes a sharp focus on new product development, globalization, and increase in customer’s wallet share. Sustainability is another important lever to increase our market share. Our aim in Kvadrat is to become market leader within Sustainability by 2030. In 2021, we defined our 2030 sustainability strategy, that includes a clear direction and ambitious targets for our products as well as our global activities. Besides other commitments, we aim to increase the share of recycled and new materials in our products and ensure substantial impact reduction from our carbon emissions, packaging materials and waste. We did in 2022 achieve approvement of our scope 1 and 2 target by the Science Based Target initiative and is aiming for scope 3 approvement start Q3 in 2023. This for us to lead the way to a zero-carbon economy.
In 2023 our focus is to: 1) take our North America business to the next level to release full market potential, 2) increase efficiency in all processes to increase speed and profitability, and 3) focus on creating a regenerative business. This for us to grow and simplify in accordance with our 2021 – 2023 strategy.
Environmental performanceKvadrat is very environmentally conscious and continuously strives to reduce the environmental impact from our operations. More detailed information regarding our environmental performance can be found in our sustainability report below.Research and development activitiesThe development of our products happens in a close collaboration between external affiliated designers and our internal product development team.
The costs related to research activities are expensed in the income statement. The costs related to development activities are either expensed in the income statement or capitalized in the balance sheet depending on the viability and economic return of the specific development project and whether the criteria for recognition in the balance sheet have been fulfilled.
The costs to research and development activities in 2022 exceeds the incurred costs in 2021 as well as the budgeted costs for 2022.
Statutory report on corporate social responsibility
Our attitudes and initiatives regarding environmental issues, social responsibility and gender composition in management are described in our sustainability report "Our commitment to sustainability" and can be found on our website at:
https://www.kvadrat.dk/en/about/sustainability-applied/sustainability-report
The report focuses on the four main areas of our work on sustainability - Environment, Employees, Culture and Compliance.
As Kvadrat has been a member of the UN Global Compact since 2013, our sustainability report is based on the UN Global Compact's 10 principles, which we evaluate and communicate annually in terms of status, risks, development, and objectives. In addition, Kvadrat supports the UN's 17 World Objectives which are also addressed in our sustainability report.
Statutory report on the underrepresented genderKvadrat is subject to the rules on target figures and policies for the gender composition of management. The statutory report on the underrepresented gender is included in our sustainability report for 2022 which is available at the above-mentioned link.Statutory report on data ethics policyOur policies regarding data ethics can be found on our website at:
https://www.kvadrat.dk/en/legal
Events after the balance sheet dateNo events have occurred after the balance sheet date to this date, which would influence the evaluation of this annual report. 1868163000159605700083674800072590900023428000186020002159000017675000809739000688019000551522000492144000395688000317967000134629000126576000686164000608673000172187000124864000567731000497647000158539000153046000830160006661100030376000288340003541700044415000-16728000-570160009713000418400010777000418400061400021060008633000191000012078000189740009405000151500003366600031731000127400001408000170900004541000-7545000-18440000165760002719000000971300010572000020285000-370900003500000020285000-16091000-370900082810002028500019848000030214000-9929000003500000020285000-15152000892990009724700081187000906480003174500037793000184760001435800087995000619020000682600005500020903900020376800099663000105061000180508000139574000143154000101184000107120002325000366400014570001351040001466860003307700039077000717420007639700044750005391000033644000033644000398066000398626000184370000180753000412350005426200046929000628820001252600001855000158700009647000537610006390900035931000041026500066086600066630300064334300069607900084200009383000842000093830004084660003875680002438810002470800004989000600000498900060000042187500039755100025729000025706300024785100022197600023036000316980004225000185600012550001161000153702000128628000391310003820200019844000139590001968400022310000139830001503800020139000167580001158100083410003322850003022630002221460001976640001344980001610960001610960001272250001028200066970008886580008609100004897180004614240001549524000152721300011330610001157503000100000000100000000100000000100000000-46770003915000874100014880008741000148800014040001443100070990007085400027313600024209300020579800013486500003500000003500000037860400039692700033040000364590004116440004333860001000000003915000148800014431000242093000100000000-4677000874100014040002731360003500000039692700036459000433386000037860400033040000378604000396927000100000000148800070854000547200001348650001000000008741000709900056966000205798000350000003969270000300500051030001992500017530002293000068560002842000269900027604000303460003041400033224000116052000176857000974890001609570005898100057817000827300010189000133090002589000013309000177270002159460002909100001494850002220970005548200097817000471800007412600052451600038122700037012200028673500034941000179270002312000316600011273600088302000628720005353300027640009470004738200028306000513390005406100050988000528270005997000187290001093870001354050002127400037087000184200016460008990040007960610006021300005357800001114950000108697100075161500075787700015495240001527213000113306100011575030000-35000000-35000000-10972000-459720000-35000000-350000000-8592000-226900000-108610000-108610000-4497000-108610000-153580009361000093610000000000112620001126200001794600000-2108000000-21080000-2108000-2108000000-2108000-2047100020471000000-240860002408600009361000093610009361000Operating profit/loss from discontinued operationsChanges in intercompany activitiesProfit from sale of shares0-13300000-7933000-17309000-1945400008301600066611000-52123000-11951300038923000-390960006140002106000-12078000-18974000-32850000-2480000050750001216000-316000-79548000-7614000-19394000-45740000-760990006218000183600003080000020471000990000-26665000-61867000-26981000-141415000014769000-969640000-459720000143319000160517000383000175286000-26598000338710001344980001610960001 Revenue2022
DKK'0002021
DKK'000Other EU countries1,380,5291,217,445Other countries487,634378,612Total revenue by geographical market1,868,1631,596,057The Group’s business is divided into business segments and geographical markets.
The Group’s primary segment comprises development and sale of design textiles and textile-related products.
Secondary business areas are irrelevant. Referring to S. 96 of the Danish Financial Statements Act, Management does not want to provide additional information on the geographical distribution of revenue since a
detailed distribution of revenue by geographical market will be highly detrimental to the Group's competitive
situation. 1 Revenue2022
DKK'0002021
DKK'000Other EU countries667,784584,316Other countries168,964141,593Total revenue by geographical market836,748725,909The Company’s business is divided into business segments and geographical markets.
The Company’s primary segment comprises development and sale of design textiles and textile-related products. Secondary business areas are irrelevant. Referring to S. 96 of the Danish Financial Statements Act,
Management does not want to provide additional information on the geographical distribution of revenue
since a detailed distribution of revenue by geographical market will be highly detrimental to the Company's
competitive situation.2 Other operating income2022
DKK'0002021
DKK'000Compensation(35)0Salary reimbursement3,2673,750Profit from sale of shares19,45414,238Public grants616614Other income126023,42818,6022 Other operating income2022
DKK'0002021
DKK'000Compensation(727)0Salary reimbursement2,7353,437Profit from sale of shares19,45414,238Other income300Public grants98021,59017,6753 Fees to the auditor appointed by the Annual General Meeting2022
DKK'0002021
DKK'000Statutory audit services1,2611,222Other assurance engagements26112Tax services751316Other services6672672,7051,9174 Staff costs2022
DKK'0002021
DKK'000Wages and salaries479,231421,996Pension costs40,12239,366Other staff costs48,94138,160568,294499,522Staff costs classified as assets(563)(1,875)567,731497,647Average number of full-time employees1,057986Remuneration
of manage- ment
2022
DKK'000Remuneration
of manage- ment
2021
DKK'000Executive Board7,8159,148Board of Directors1,1661,4988,98110,6463 Staff costs2022
DKK'0002021
DKK'000Wages and salaries145,482140,187Pension costs10,93510,728Other social security costs2,1222,131158,539153,046Average number of full-time employees225229Remuneration
of
Manage- ment
2022
DKK'000Remuneration
of Manage- ment
2021
DKK'000Executive Board7,8159,148Board of Directors1,1661,4988,98110,6461057986225229Remuneration
of manage- ment
2022
DKK'000Remuneration
of manage- ment
2021
DKK'000Executive Board7,8159,148Board of Directors1,1661,4988,98110,646Remuneration
of
Manage- ment
2022
DKK'000Remuneration
of Manage- ment
2021
DKK'000Executive Board7,8159,148Board of Directors1,1661,4988,98110,646781500091480001166000149800078150009148000116600014980005 Depreciation, amortisation and impairment losses2022
DKK'0002021
DKK'000Amortisation of intangible assets42,81533,854Depreciation on property, plant and equipment40,05533,115Profit/loss from sale of intangible assets and property, plant and equipment146(358)83,01666,6114 Depreciation, amortisation and impairment losses2022
DKK'0002021
DKK'000Amortisation of intangible assets18,78315,849Depreciation on property, plant and equipment11,69212,985Profit/loss from sale of intangible assets and property, plant and equipment(99)030,37628,8346 Other financial income2022
DKK'0002021
DKK'000Other interest income6142,1066142,1065 Other financial income2022
DKK'0002021
DKK'000Financial income from group enterprises966957Other financial income7,6679538,6331,9107 Other financial expenses2022
DKK'0002021
DKK'000Other financial expenses12,07818,97412,07818,9742022
DKK'0002021
DKK'000Other financial expenses12,07818,97412,07818,974<br />6 Other financial expenses2022
DKK'0002021
DKK'000Financial expenses from group enterprises0324Other financial expenses9,40514,8269,40515,150<br />2022
DKK'0002021
DKK'000Financial expenses from group enterprises0324Other financial expenses9,40514,8269,40515,1508 Tax on profit/loss for the year2022
DKK'0002021
DKK'000Current tax22,22522,891Change in deferred tax(5,135)(18,350)17,0904,5417 Tax on profit/loss for the year2022
DKK'0002021
DKK'000Change in deferred tax(7,993)(17,539)Adjustment concerning previous years4480Refund in joint taxation arrangement0(901)(7,545)(18,440)9 Proposed distribution of profit/loss2022
DKK'0002021
DKK'000Ordinary dividend for the financial year035,000Retained earnings20,285(16,091)Minority interests' share of profit/loss(3,709)8,28116,57627,1908 Proposed distribution of profit and loss2022
DKK'0002021
DKK'000Ordinary dividend for the financial year035,000Retained earnings20,285(15,152)20,28519,84810 Intangible assetsCompleted development projects
DKK'000Acquired trademarks
DKK'000Goodwill
DKK'000Development projects in progress
DKK'000Cost beginning of year137,57275,416132,6086,826Exchange rate adjustments(8)02360Transfers7,84100(7,841)Additions5,86463140,4731,120Cost end of year151,26976,047173,317105Amortisation and impairment losses beginning of year(40,325)(37,623)(70,706)0Exchange rate adjustments60(236)0Impairment losses for the year000(105)Amortisation for the year(21,651)(6,679)(14,380)0Amortisation and impairment losses end of year(61,970)(44,302)(85,322)(105)Carrying amount end of year89,29931,74587,9950Completed development projects
DKK'000Acquired trademarks
DKK'000Goodwill
DKK'000Development projects in progress
DKK'000Cost beginning of year137,57275,416132,6086,826Exchange rate adjustments(8)02360Transfers7,84100(7,841)Additions5,86463140,4731,120Cost end of year151,26976,047173,317105Amortisation and impairment losses beginning of year(40,325)(37,623)(70,706)0Exchange rate adjustments60(236)0Impairment losses for the year000(105)Amortisation for the year(21,651)(6,679)(14,380)0Amortisation and impairment losses end of year(61,970)(44,302)(85,322)(105)Carrying amount end of year89,29931,74587,9950<br />9 Intangible assetsCompleted development projects
DKK'000Acquired trademarks
DKK'000Development projects in progress
DKK'000Cost beginning of year112,43935,08355Transfers550(55)Additions5,7597,6260Cost end of year118,25342,7090Amortisation and impairment losses beginning of year(21,791)(20,725)0Amortisation for the year(15,275)(3,508)0Amortisation and impairment losses end of year(37,066)(24,233)0Carrying amount end of year81,18718,4760<br />Completed development projects
DKK'000Acquired trademarks
DKK'000Development projects in progress
DKK'000Cost beginning of year112,43935,08355Transfers550(55)Additions5,7597,6260Cost end of year118,25342,7090Amortisation and impairment losses beginning of year(21,791)(20,725)0Amortisation for the year(15,275)(3,508)0Amortisation and impairment losses end of year(37,066)(24,233)0Carrying amount end of year81,18718,476011 Development projectsThe completed development projects and development projects in progress primarily consists of a new ERP-system as well as a digital trading platform as part of a substantial digital strategic plan towards 2023 and onwards. The ERP-system was successfully launched in 2020 while the first phases of the digital trading platform has been launched at the end of 2021. Management expects a significant potential from the optimization and digitalization of the business, as future cash flows will ensure repayment of investments in the development projects, and Management does not see any indication of impairment to exist.10 Development projectsThe completed development projects primarily consists of a new ERP-system as well as a digital trading platform as part of a substantial digital strategic plan towards 2023 and onwards. The ERP-system was successfully launched in 2020 while the first phases of the digital trading platform has been launched at the end of 2021. Management expects a significant potential from the optimization and digitalization of the business, as future cash flows will ensure repayment of investments in the development projects, and Management does not see any indication of impairment to exist.12 Property, plant and equipmentLand and buildings
DKK'000Plant and machinery
DKK'000Other fixtures and fittings, tools and equipment
DKK'000Leasehold improvements
DKK'000Property, plant and equipment in progress
DKK'000Cost beginning of year180,0793,916271,722140,12733,644Exchange rate adjustments(25)(53)(89)1,9180Transfers33,6440(89)89(33,644)Additions11,6499,83311,69610,3160Disposals0(1,372)(6,098)(2,601)0Cost end of year225,34712,324277,142149,8490Depreciation and impairment losses beginning of year(40,505)(1,591)(125,036)(63,730)0Exchange rate adjustments320434020Transfers0023(23)0Depreciation for the year(4,337)(642)(19,952)(15,124)0Reversal regarding disposals06012,8843680Depreciation and impairment losses end of year(44,839)(1,612)(142,038)(78,107)0Carrying amount end of year180,50810,712135,10471,742011 Property, plant and equipmentLand and buildings
DKK'000Plant and machinery
DKK'000Other fixtures and fittings, tools and equipment
DKK'000Leasehold improvements
DKK'000Property, plant and equipment in progress
DKK'000Cost beginning of year139,1591,72491,16014,29333,644Transfers33,644000(33,644)Additions11,0352,9891,9921,0470Disposals0(690)(3,662)00Cost end of year183,8384,02389,49015,3400Depreciation and impairment losses beginning of year(37,975)(267)(52,083)(8,902)0Depreciation for the year(2,709)(167)(6,853)(1,963)0Reversal regarding disposals0752,52300Depreciation and impairment losses end of year(40,684)(359)(56,413)(10,865)0Carrying amount end of year143,1543,66433,0774,475013 Financial assetsInvestments in associates
DKK'000Deposits
DKK'000Other receivables
DKK'000Cost beginning of year39,83109,647Transfers09,647(9,647)Additions02,8790Cost end of year39,83112,5260Revaluations beginning of year14,43100Exchange rate adjustments(2,269)00Amortisation of goodwill(2,901)00Share of profit/loss for the year9,85100Adjustment of intra-group profits2,76300Dividend(20,471)00Revaluations end of year1,40400Carrying amount end of year41,23512,5260Investments in associates comprise unamortised goodwill of DKK 1,1m at 31.12.2022.
AssociatesRegistered inOwnership
%Wooltex UK Ltd.England46,03 Days of Design ApSDenmark20,0Innvik ASNorway30,012 Financial assetsInvestments in group enterprises
DKK'000Investments in associates
DKK'000Deposits
DKK'000Cost beginning of year289,01748,8071,587Transfers3,010(3,010)0Additions37,6180268Disposals(11,919)(5,967)0Cost end of year317,72639,8301,855Revaluations beginning of year56,77914,0750Exchange rate adjustments(2,149)(2,348)0Transfers(1,753)1,7530Amortisation of goodwill(6,967)(2,901)0Share of profit/loss for the year32,33510,9150Adjustment of intra-group profits(5,904)2,7630Dividend(83,332)(24,086)0Investments with negative equity value depreciated over receivables (800)00Investments with negative equity value transferred to provisions 14300Other adjustments(7,306)00Reversal regarding disposals11,7546,9280Revaluations end of year(7,200)7,0990Carrying amount end of year310,52646,9291,855Investments in group enterprises comprise unamortised goodwill of DKK 31,7m at 31.12.2022.
Investments in associates comprise unamortised goodwill of DKK 1,1m at 31.12.2022.
A specification of investments in subsidiaries is evident from the notes to the consolidated financial statements.Investments in
associatesRegistered inOwnership
%Wooltex UK Ltd. England 46.003 Days of Design ApS Denmark 20.00Innvik ASNorway 30.00Kvadrat Maharam Pty. Ltd.Australia50.0014 Contract work in progress2022
DKK'0002021
DKK'000Contract work in progress22,29320,248Progress billings(18,068)(18,392)4,2251,85615 Deferred tax2022
DKK'0002021
DKK'000Intangible assets(23,903)(27,760)Property, plant and equipment(18,814)(22,220)Inventories6,5445,457Receivables(1,283)(731)Provisions11,72212,486Liabilities other than provisions3,4579,237Tax losses carried forward58,40356,630Deferred tax36,12633,099
Changes during the year2022
DKK'0002021
DKK'000Beginning of year33,09915,353Recognised in the income statement5,13518,350Recognised directly in equity(2,108)(604)End of year36,12633,099Deferred tax has been recognised in the balance sheet as follows2022
DKK'0002021
DKK'000
Deferred tax assets39,13138,202
Deferred tax liabilities(3,005)(5,103)36,12633,099Deferred tax assetsDeferred tax assets consist primarily of timing differences on depreciation of fixed assets as well as tax-loss
carryforwards from foreign subsidiaries and parent company, which are expected to use the losses within 1-5 years as a result of future positive operations. 13 Deferred tax2022
DKK'0002021
DKK'000Intangible assets(16,833)(19,735)Property, plant and equipment(4,196)(6,413)Inventories6,0014,904Provisions104139Liabilities other than provisions6113,375Tax losses carried forward34,15731,689Deferred tax19,84413,959
Changes during the year2022
DKK'0002021
DKK'000Beginning of year13,959(2,978)Recognised in the income statement7,99317,539Recognised directly in equity(2,108)(602)End of year19,84413,959Deferred tax assetsDeferred tax assets consists primarily of timing differences on depreciation of fixed assets as well as tax-loss carryforwards, which the company expects to use within 1-5 years as a result of future positive operations. 16 PrepaymentsPrepayments comprise incurred costs relating to subsequent financial years. Prepayments are measured at
cost. 14 PrepaymentsPrepayments comprise incurred costs relating to subsequent financial years. Prepayments are measured at
cost. 17 Contributed capitalNumberNominal
value
DKK'000The shares are not divided into classes1,000100,0001,000100,00018 Other provisions Other provisions comprise primarily costs from other contractual obligations expected to be incurred by the Group.19 Other payables2022
DKK'0002021
DKK'000Holiday pay obligation13,30914,357Other costs payable011,53313,30925,89016 Other payables2022
DKK'0002021
DKK'000Holiday pay obligation13,30912,918Other costs payable04,80913,30917,72720 Non-current liabilities other than provisionsDue within 12
months
2022
DKK'000Due within 12
months
2021
DKK'000Due after
more than 12
months
2022
DKK'000Outstanding
after 5 years
2022
DKK'000Mortgage debt2,8102,87827,60424,650Bank loans44,97671,934116,0520Lease liabilities4,92012,47458,98137,565Other payables2,77610,53113,30913,30955,48297,817215,94675,52417 Non-current liabilities other than provisionsDue within 12
months
2022
DKK'000Due within 12
months
2021
DKK'000Due after
more than 12
months
2022
DKK'000Outstanding
after 5 years
2022
DKK'000Mortgage debt2,8102,87830,41415,675Bank loans39,64158,77497,4890Lease liabilities1,9531,9438,2730Other payables2,77610,53113,30913,30947,18074,126149,48528,98421 Other payables2022
DKK'0002021
DKK'000VAT and duties5,6814,743Wages and salaries, personal income taxes, social security costs, etc. payable16,02521,421Holiday pay obligation21,89435,729Derivative financial instruments4,18513,389Other costs payable61,60260,123109,387135,405Derivative financial instruments are described in note 24.22 Deferred incomeDeferred income includes grants for DKK 5,3m related to development projects in progress, of which DKK 3,4m has been recognized in line with the depreciation of the associated development project. Deferred income is recognized as other income in the income statement and in note 2.18 Other payables2022
DKK'0002021
DKK'000Wages and salaries, personal income taxes, social security costs, etc. payable6,86113,601Holiday pay obligation7,8448,106Derivative financial instruments4,18513,389Other costs payable2,3841,99121,27437,087Derivative financial instruments are described in note 19.23 Changes in working capital2022
DKK'0002021
DKK'000Increase/decrease in inventories(24,324)(88,444)Increase/decrease in receivables(26,946)(27,352)Increase/decrease in trade payables etc.(853)(3,717)(52,123)(119,513)24 Derivative financial instrumentsThe Company have no hedged currencies at the balance date 31 December 2022.
Other payables include the negative fair value of an interest rate swap of DKK 4,1m and DKK 0,1m, respectively. The interest rate swap was made to hedge a fixed interest rate on the Company’s floating-rate mortgage loan. The interest swap has a principal amount of DKK 20,0m and 18,1m, respectively and ensures a
fixed interest rate of 4,82% and 5,18% in the remaining term of 15 years and 1 years. 19 Derivative financial instrumentsThe Company have no hedges currencies at the balance sheet date 31 December 2022.
Other payables include the negative fair value of an interest rate swap of DKK 4,1m and DKK 0,1m, respectively. The interest rate swap was made to hedge a fixed interest rate on the Company’s floating-rate mortgage loan. The interest swap has a principal amount of DKK 20,0m and 18,1m, respectively and ensures a
fixed interest rate of 4,82% and 5,18% in the remaining term of 15 years and 1 years.25 Unrecognised rental and lease commitments2022
DKK'0002021
DKK'000Total liabilities under rental or lease agreements until maturity 246,948269,34720 Unrecognised rental and lease commitments2022
DKK'0002021
DKK'000Total liabilities under rental or lease agreements until maturity 12,99214,18026 Assets charged and collateralMortgage debt is secured by way of mortgage on properties. The carrying amount of mortgaged buildings is
DKK 181m recognised under land and buildings.22 Assets charged and collateralMortgage debt is secured by way of mortgage on properties. The carrying amount of mortgaged buildings is
DKK 143m recognised under land and buildings. 27 Transactions with related partiesThe annual report only dislose transactions with related parties that have not been completed on market
terms. No such transactions have been completed during the financial year. 24 Transactions with related partiesThe annual report only dislose transactions with related parties that have not been completed on market
terms. No such transactions have been completed during the financial year. 28
Group relationsName and registered office of the Parent preparing consolidated financial statements for the largest group:
Kvadrat Holding A/S, CVR-nr. 15 12 00 02, Ebeltoft, Denmark.Name and registered office of the Parent preparing consolidated financial statements for the smallest group:
Kvadrat Holding A/S, CVR-nr. 15 12 00 02, Ebeltoft, Denmark. 29 Pro-rata consolidated companiesRegistered inOwnership
%Kvadrat Maharam Pty. Ltd.Australia50.0030 SubsidiariesRegistered inOwnership
%Danskina BVNetherlands100.00Febrik BVNetherlands51.67Gaudium BVNetherlands99.80ASA BV Netherlands99.80de Pol BV Netherlands99.80Kinnasand GmbH Germany100.00Kvadrat AB Sweden100.00Kvadrat AG Switzerland97.00Kvadrat Asia Investment Ltd. Hong Kong50.50Kvadrat China Co. Ltd. China50.50Kvadrat Singapore Pte. Ltd. Singapore50.50Kvadrat Austria GmbHAustria97.00Kvadrat BV Netherlands95.00Kvadrat Finland Oy Finland100.00Kvadrat GmbHGermany98.00Kvadrat Iberia S.L.Spain95.00Kvadrat Inc. USA100.00Kvadrat Japan Co. Ltd. Japan80.00Kvadrat Korea Co. Ltd. South Korea100.00Kvadrat Ltd.United Kingdom100.00Kvadrat Middle East DMCCUAE 100.00Kvadrat Norge AS Norway100.00Kvadrat SAFrance95.00Kvadrat Acoustics A/SDenmark79.00Fabric Systems Ltd.United Kingdom79.00Kvadrat Soft Cells A/S Inc. USA79.00Kvadrat Soft Cells Hong Kong Ltd. Hong Kong 79.00Kvadrat Soft Cells Sp. Z.o.o.Poland79.00Kvadrat SpAItaly100.00Kvadrat Czech Republic s.r.o.Czech Republic100.00Registered inOwnership
%Personal Design SrLItaly100.00Kvadrat REALLY ApSDenmark95.00Sahco GmbHGermany100.00Kvadrat Shade Holding BVNetherlands100.00Kvadrat Shade Services BV Netherlands100.00Kvadrat High Performance Textiles BVNetherlands100.00Kvadrat Shade Assembly BVNetherlands100.00Kvadrat Shade Properties BV Netherlands100.00VEROSOL Australia Pty Ltd. Australia80.00Tecnología de Control Solar Espana Holding SLU Spain100.00VEROSOL Ibérica SAUSpain100.00Tecnologia de Control Solar Mexicana, SA de CVMexico100.00Tecnologia de Control Solar Mexicana de Servicios, SA de CVMexico100.00VW Solarflex SA de CVMexico100.00Convert A/SDenmark66.671946300067480000310526000345796000569660005472000028420002699000-83332000833320000002246000-2246000015 Provisions for investments in group enterprisesProvisions for investments in group enterprises is a result of investment in group enterprises with negative equity.21 Contingent liabilities2022
DKK'0002021
DKK'000Recourse and non-recourse guarantee commitments413,165235,988Contingent liabilities to group enterprises413,165235,988
The Company has provided a guarantee for the bank debt of subsidiaries and Kvadrat Holding A/S. The
secured bank debt amounts to DKK 413m at 31.12.2022, which consists of the subsidiaries drawing on the
credit facilities at their bank.
The Company has provided performance guarantees for DKK 42,2m at 31.12.2022. The Company participates in a Danish joint taxation arrangement with Kvadrat Holding A/S serving as the
administration company. According to the joint taxation provisions of the Danish Corporation Tax Act, the
Entity is therefore liable for income taxes etc for the jointly taxed companies and for obligations, if any,
relating to the withholding of tax on interest, royalties and dividends for the jointly taxed companies. The
jointly taxed entities' total known net liability under the joint taxation arrangement is disclosed in the administration company's financial statements. 23 Related parties with controlling interestThe Parent Kvadrat Holding A/S, Central Business Reg. No: 15 12 00 02, Ebeltoft holds all shares in the
Company and thus has a controlling interest in the Company. This annual report has been presented in accordance with the provisions of the Danish Financial Statements Act
governing reporting class C enterprises (large).The accounting policies applied to these consolidated financial statements and parent financial statements are consistent with those applied last year.
A few reclassifications of the comparative figures have been made in the consolidated financial statements
as well as in the parent financial statements to make the figures comparable with this year. The changes
have not had any impact on neither profit nor equity in the consolidated and parent financial statements.falseRecognition and measurementAssets are recognised in the balance sheet when it is probable as a result of a prior event that future economic
benefits will flow to the Entity, and the value of the asset can be measured reliably.
Liabilities are recognised in the balance sheet when the Entity has a legal or constructive obligation as a
result of a prior event, and it is probable that future economic benefits will flow out of the Entity, and the
value of the liability can be measured reliably.
On initial recognition, assets and liabilities are measured at cost. Measurement subsequent to initial
recognition is effected as described below for each financial statement item.
Anticipated risks and losses that arise before the time of presentation of the annual report and that confirm
or invalidate affairs and conditions existing at the balance sheet date are considered at recognition and
measurement.
Income is recognised in the income statement when earned, whereas costs are recognised by the amounts
attributable to this financial year. <br />Consolidated financial statementsThe consolidated financial statements comprise the Parent and the group enterprises (subsidiaries) that are controlled by the Parent. Control is achieved by the Parent, either directly or indirectly, holding more than 50% of the voting rights or in any other way possibly or actually exercising controlling influence.
Enterprises in which the Group, directly or indirectly, holds between 20% and 50% of the voting rights and exercises significant, but not controlling influence, are regarded as associates.<br />Basis of consolidationThe consolidated financial statements are prepared on the basis of the financial statements of the Parent and its subsidiaries. The consolidated financial statements are prepared by combining uniform items. On consolidation, intra-group income and expenses, intra-group accounts and dividends as well as profits and losses on transactions between the consolidated enterprises are eliminated. The financial statements used for consolidation have been prepared applying the Group’s accounting policies.
Subsidiaries’ financial statement items are recognised in full in the consolidated financial statements. Minority
interests’ proportionate share of profit or loss is presented as a separate item in Management’s proposal for
distribution of profit or loss, and their share of subsidiaries’ net assets is presented as a separate item in
group equity.
Investments in subsidiaries are offset at the pro rata share of such subsidiaries’ net assets at the takeover date, with net assets having been calculated at fair value.Business combinationsNewly acquired or newly established enterprises are recognised in the consolidated financial statements from
the time of acquiring or establishing such enterprises. Divested or wound-up enterprises are recognised in
the consolidated income statement up to the time of their divestment or winding-up.
The purchase method is applied at the acquisition of new enterprises, under which identifiable assets and
liabilities of these enterprises are measured at fair value at the acquisition date. Provisions for costs of
restructuring of the enterprise acquired are only made in so far as such restructuring was decided by the
enterprise acquired prior to acquisition. Allowance is made for the tax effect of restatements.Positive differences in amount (goodwill) between cost of the acquired share and fair value of the assets and
liabilities taken over are recognised under intangible assets, and they are amortised systematically over the
income statement based on an individual assessment of their useful life. If the useful life cannot be estimated
reliably, it is fixed at 10 years. Useful life is reassessed annually. Negative balances (negative goodwill) are
recognised as income in the income statement.
Profit or loss from divestment of enterprisesProfits or losses from divestment or winding-up of subsidiaries are calculated as the difference between
selling price or settlement price and the carrying amount of the net assets at the time of divestment or
winding-up, inclusive of non-amortised goodwill and estimated divestment or winding-up expenses. Foreign currency translationOn initial recognition, foreign currency transactions are translated applying the exchange rate at the transaction date. Receivables, payables and other monetary items denominated in foreign currencies that have
not been settled at the balance sheet date are translated using the exchange rate at the balance sheet date.
Exchange differences that arise between the rate at the transaction date and the rate in effect at the payment
date, or the rate at the balance sheet date are recognised in the income statement as financial income or
financial expenses. Property, plant and equipment, intangible assets, inventories and other non-monetary
assets that have been purchased in foreign currencies are translated using historical rates.
When recognising foreign subsidiaries and associates that are independent entities, the income statements
are translated at average exchange rates for the months that do not significantly deviate from the rates at
the transaction date. Balance sheet items are translated using the exchange rates at the balance sheet date.
Goodwill is considered belonging to the independent foreign entity and is translated using the exchange rate
at the balance sheet date. Exchange differences arising out of the translation of foreign subsidiaries’ equity
at the beginning of the year at the balance sheet date exchange rates as well as out of the translation of income statements from average rates to the exchange rates at the balance sheet date are recognised directly in equity.
Exchange adjustments of outstanding accounts with independent foreign subsidiaries which are considered
part of the total investment in the subsidiary in question are classified directly as equity.Derivative financial instrumentsOn initial recognition in the balance sheet, derivative financial instruments are measured at cost and subsequently at fair value. Derivative financial instruments are recognised under other receivables or other payables.
Changes in the fair value of derivative financial instruments classified as and complying with the requirements
for hedging the fair value of a recognised asset or a recognised liability are recorded in the income statement
together with changes in the value of the hedged asset or the hedged liability.
Changes in the fair value of derivative financial instruments classified as and complying with the requirements
for hedging future transactions are recognised directly in equity. When the hedged transactions are realised,
the accumulated changes are recognised as part of cost of the relevant financial statement items.
For derivative financial instruments that do not comply with the requirements for being treated as hedging
instruments, changes in fair value are recognised currently in the income statement as financial income or
financial expenses.Public grantsPublic grants are recognised when a final commitment has been received from the grantor and it is probable
that
the conditions of the grant will be fulfilled. Grants are recognised as income in the income statement
as earned.
Grants awarded for acquisition of assets are recognised as deferred income in the balance sheet,
which is taken
to income on a straight-line basis over the useful life of the asset.RevenueRevenue from the sale of manufactured goods and goods for resale is recognised in the income statement
when delivery is made and risk has passed to the buyer. Revenue is recognised net of VAT, duties and sales
discounts and is measured at fair value of the consideration fixed.Contract work in progress is included in revenue based on the stage of completion so that revenue corresponds to the selling price of the work performed in the financial year (the percentage-of-completion
method). Other operating incomeOther operating income comprises income of a secondary nature as viewed in relation to the Entity’s primary
activities.Cost of salesCost of sales comprises goods consumed in the financial year measured at cost, adjusted for ordinary
inventory
writedowns.Other external expensesOther external expenses include expenses relating to the Entity’s ordinary activities, including expenses for
premises, stationery and office supplies, marketing costs, etc. This item also includes writedowns of receivables recognised in current assets. Staff costsStaff costs comprise salaries and wages as well as social security contributions, pension contributions, etc
for entity staffDepreciation, amortisation and impairment lossesDepreciation, amortisation and impairment losses relating to property, plant and equipment and intangible
assets comprise depreciation, amortisation and impairment losses for the financial year, as well as revenue recognition of grants recieved related to the intagible fixed assets and gains and losses from the sale of intangible assets as well as property, plant and equipment.Income from investments in group enterprisesIncome from investments in group enterprises comprises the pro rata share of the individual enterprises’ profit/loss after full elimination of intra-group profits or losses.
<br />Income from investments in associatesIncome from investments in associates comprises the pro rata share of the individual
associates’
profit/loss after pro rata elimination of intra-group profits or losses.
Other financial incomeOther financial income comprises dividends etc received on other investments, interest income, including
interest income on receivables from group enterprises, net capital or exchange gains on securities, payables
and transactions in foreign currencies, amortisation of financial assets as well as tax relief under the Danish
Tax Prepayment Scheme etc. Other financial expensesOther financial expenses comprise interest expenses, including interest expenses on payables to group enterprises, net capital or exchange losses on securities, payables and transactions in foreign currencies, amortisation of financial liabilities as well as tax surcharge under the Danish Tax Prepayment Scheme etc. Tax on profit/loss for the yearTax for the year, which consists of current tax for the year and changes in deferred tax, is recognised in the
income statement by the portion attributable to the profit for the year and recognised directly in equity by
the
portion attributable to entries directly in equity.The Parent is jointly taxed with all of its Danish group enterprises. The current Danish income tax is allocated
among
the jointly taxed entities proportionally to their taxable income (full allocation with a refund
concerning tax losses).GoodwillGoodwill is the positive difference between cost and fair value of assets and liabilities arising from acquisitions. Goodwill is amortised straight-line over its estimated useful life, which is fixed based on the experience
gained by Management for each business area. For amounts of goodwill, useful life has been determined based on an assessment of whether the enterprises are strategically acquired enterprises with a strong market position and a long-term earnings profile and whether the amount of goodwill includes intangible resources of a temporary nature that cannot be separated and recognised as separate assets. Useful lives are
reassessed annually. The amortisation periods used are 10 years.
Goodwill is written down to the lower of recoverable amount and carrying amount.<br />Intellectual property rights etc.Intellectual property rights etc comprise development projects completed and in progress with related intellectual property rights and acquired intellectual property rights. Development projects on clearly defined and identifiable products and processes, for which the technical rate
of utilisation, adequate resources and a potential future market or development opportunity in the enterprise
can be established, and where the intention is to manufacture, market or apply the product or process in
question, are recognised as intangible assets. Other development costs are recognised as costs in the income
statement as incurred. When recognising development projects as intangible assets, an amount equalling
the costs incurred less deferred tax is taken to equity under Reserve for development costs that is reduced
as the development projects are amortised and written down.
The cost of development projects comprises costs such as salaries, external costs and amortisation that are
directly and indirectly attributable to the development projects.
Indirect production costs in the form of indirectly attributable staff costs and amortisation of intangible assets
and depreciation on property, plant and equipment used in the development process are recognised in cost
based on time spent on each project.
Completed development projects are amortised on a straight-line basis using their estimated useful lives
which are determined based on a specific assessment of each development project. If the useful life cannot
be estimated reliably, it is fixed at 10 years. For development projects protected by intellectual property
rights, the maximum amortisation period is the remaining duration of the relevant rights. Intellectual property rights acquired are measured at cost less accumulated amortisation. Patents are amortised over their remaining duration, and licences are amortised over the term of the agreement.
Intellectual property rights etc are written down to the lower of recoverable amount and carrying amount. Property, plant and equipmentLand and buildings as well as other fixtures and fittings, tools and equipment are measured at cost less
accumulated depreciation and impairment losses. Land is not depreciated.
Cost comprises the acquisition price, costs directly attributable to the acquisition and preparation costs of
the asset until the time when it is ready to be put into operation. For assets held under finance leases, cost
is the lower of the asset’s fair value and present value of future lease payments.
The basis of depreciation is cost less estimated residual value after the end of useful life. Straight-line
depreciation is made on the basis of the following estimated useful lives of the assets:Useful life
Buildings30-40 yearsPlant and machinery3-5 yearsOther fixtures and fittings, tools and equipment3-5 yearsLeasehold improvementscontract periodFor leasehold improvements and assets subject to finance leases, the depreciation period cannot exceed
the contract period.
Estimated useful lives and residual values are reassessed annually.
Items of property, plant and equipment are written down to the lower of recoverable amount and carrying
amount.Investments in group enterprisesIn the parent financial statements, investments in group enterprises are recognised and measured according
to the equity method. This means that investments are measured at the pro rata share of the enterprises'
equity value plus unamortised goodwill and plus or minus unrealised intra-group profits and losses. Refer to
the above section on business combinations for more details about the accounting policies used on acquisitions of investments in group enterprises.
Group enterprises with negative equity value are measured at DKK 0. Any receivables from these enterprises
are written down to net realisable value based on a specific assessment. If the Parent has a legal or constructive obligation to cover the liabilities of the relevant enterprise, and it is probable that such obligation
will involve a loss, a provision is recognised that is measured at present value of the costs necessary to settle
the obligations at the balance sheet date.
Upon distribution of profit or loss, net revaluation of investments in group enterprises is transferred to
reserve
for net revaluation according to the equity method in equity.
Goodwill is the positive difference between cost and fair value of assets and liabilities arising from acquisitions. Goodwill is amortised straight-line over its estimated useful life, which is fixed based on the experience
gained by Management for each business area. For amounts of goodwill, useful life has been determined
based on an assessment of whether the enterprises are strategically acquired enterprises with a strong market position and a long-term earnings profile and whether the amount of goodwill includes intangible resources of a temporary nature that cannot be separated and recognised as separate assets. Useful lives are
reassessed annually. The amortisation periods used are 10 years.
Investments in group enterprises are written down to the lower of recoverable amount and carrying amount.
Investments in associatesInvestments in associates are recognised and measured according to the equity method. This means that
investments are measured at the pro rata share of the enterprises' equity values plus unamortised goodwill and plus or minus unrealised pro rata intra-group profits and losses. Refer to the above section on business
combinations for more details about the accounting policies used on acquisitions of investments in associates.
Associates with negative equity value are measured at DKK 0. Any receivables from these enterprises are
written down to net realisable value based on a specific assessment. If the Parent has a legal or constructive
obligation to cover the liabilities of the relevant associate, and it is probable that such obligation will involve
a loss, a provision is recognised that is measured at present value of the costs necessary to settle the obligations at the balance sheet date.
Upon distribution of profit or loss, net revaluation of investments in associates is transferred to Reserve for
net revaluation according to the equity method under equity.
Goodwill is the positive difference between cost and fair value of assets and liabilities arising from acquisitions. Goodwill is amortised straight-line over its estimated useful life, which is fixed based on the experience
gained by Management for each business area. For amounts of goodwill, useful life has been determined
based on an assessment of whether the enterprises are strategically acquired enterprises with a strong market position and a long-term earnings profile and whether the amount of goodwill includes intangible resources of a temporary nature that cannot be separated and recognised as separate assets. Useful lives are
reassessed annually. The amortisation periods used are 10 years.
Investments in associates are written down to the lower of recoverable amount and carrying amount.
Investments in associates fall within the definitions of both participating interests and associates, yet in these consolidated financial statements they have been presented as investments in associates because this designation reflects more accurately the Group’s involvement in the relevant entities.
ReceivablesReceivables are measured at amortised cost, usually equalling nominal value, less writedowns for bad and
doubtful debts.InventoriesInventories are measured at the lower of cost using the FIFO method and net realisable value.
Cost consists of purchase price, design fee’s plus delivery costs.
The net realisable value of inventories is calculated as the estimated selling price less completion costs and
costs incurred to execute sale.Contract work in progressContract work in progress is measured at the selling price of the work carried out at the balance sheet date.
The selling price is measured based on the stage of completion and the total estimated income from the
individual contracts in progress. Usually, the stage of completion is determined as the ratio of actual to total
budgeted consumption of resources.
If the selling price of a project in progress cannot be made up reliably, it is measured at the lower of costs
incurred and net realisable value.
Each contract in progress is recognised in the balance sheet under receivables or liabilities other than provisions, depending on whether the net value, calculated as the selling price less prepayments received, is
positive or negative.
Costs of sales work and of securing contracts as well as finance costs are recognised in the income statement
as incurred.Deferred taxDeferred tax is recognised on all temporary differences between the carrying amount and the tax-based
value of
assets and liabilities, for which the tax-based value is calculated based on the planned use of each
asset.
However, no deferred tax is recognised for amortisation of goodwill disallowed for tax purposes and
temporary
differences arising at the date of acquisition that do not result from a business combination and
that do not have
any effect on profit or loss or on taxable income.
Deferred tax assets, including the tax base of tax loss carryforwards, are recognised in the balance sheet at
their estimated realisable value, either as a set-off against deferred tax liabilities or as net tax assets.
Deferred tax relating to retaxation of previously deducted losses in foreign subsidiaries is recognised on the
basis of an actual assessment of the purpose of each subsidiary.PrepaymentsPrepayments comprise incurred costs relating to subsequent financial years. Prepayments are measured at
cost.CashCash comprises cash in hand and bank deposits.DividendDividend is recognised as a liability at the time of adoption at the general meeting. Proposed dividend for
the financial year is disclosed as a separate item in equity. Extraordinary dividend adopted in the financial
year is recognised directly in equity when distributed and disclosed as a separate item in Management's
proposal for distribution of profit/loss.Minority interestsOn initial recognition, minority interests are measured at the minority interests’ share of the acquiree’s net assets measured at fair value. No goodwill related to the minority interests’ equity interests in the acquiree is recognised.Other provisionsOther provisions comprise anticipated costs of decided and published restructuring, etc.
Other provisions are recognised and measured as the best estimate of the expenses required to settle the
liabilities at the balance sheet date. Provisions that are estimated to mature more than one year after the
balance sheet date are measured at their discounted value.Mortgage debtAt the time of borrowing, mortgage debt to mortgage credit institutions is measured at cost which corresponds to the proceeds received less transaction costs incurred. Mortgage debt is subsequently measured at
amortised cost. This means that the difference between the proceeds at the time of borrowing and the nominal repayable amount of the loan is recognised in the income statement as a financial expense over the term
of the loan applying the effective interest method. <br />Other financial liabilitiesOther financial liabilities are measured at amortised cost, which usually corresponds to nominal value.Lease liabilitiesLease liabilities relating to assets held under finance leases are recognised in the balance sheet as
liabilities
other than provisions, and, at the time of inception of the lease, measured at the present value of
future lease
payments. Subsequent to initial recognition, lease liabilities are measured at amortised
cost. The difference
between present value and nominal amount of the lease payments is recognised in the
income statement as a
financial expense over the term of the leases.Prepayments received from customersPrepayments received from customers comprise amounts received from customers prior to delivery of the
goods agreed or completion of the service agreed.Tax payable or receivable Current tax payable or receivable is recognised in the balance sheet, stated as tax computed on this year's
taxable income, adjusted for prepaid tax.Deferred incomeDeferred income comprises income received for recognition in subsequent financial years. Deferred income
include grants received for development projects according to the Danish Financial Statements Act's requirement for gross presentation cannot be offset in the development cost in the balance sheet, but must presented separately under liabilities. Prepayment are measured at cost less a straight line income recognition in line with the linear depreciation of the associated activated project.Cash flow statementThe cash flow statement shows cash flows from operating, investing and financing activities as well as cash
and cash equivalents at the beginning and the end of the financial year.
Cash flows from operating activities are presented using the indirect method and calculated as the operating
profit/loss adjusted for non-cash operating items, working capital changes and income taxes paid.
Cash flows from investing activities comprise payments in connection with acquisition and divestment of
enterprises, activities and fixed asset investments as well as purchase, development, improvement and sale,
etc of intangible assets and property, plant and equipment, including acquisition of assets held under finance
leases.
Cash flows from financing activities comprise changes in the size or composition of the contributed capital
and related costs as well as the raising of loans, inception of finance leases, instalments on interest-bearing
debt, purchase of treasury shares and payment of dividend.
Cash and cash equivalents comprise cash and short-term securities with an insignificant price risk less shortterm bank loans.
The cash flow statement shows cash flows from operating, investing and financing activities as well as cash
and cash equivalents at the beginning and the end of the financial year.
Cash flows from operating activities are presented using the indirect method and calculated as the operating
profit/loss adjusted for non-cash operating items, working capital changes and income taxes paid.
Cash flows from investing activities comprise payments in connection with acquisition and divestment of
enterprises, activities and fixed asset investments as well as purchase, development, improvement and sale,
etc of intangible assets and property, plant and equipment, including acquisition of assets held under finance
leases.
Cash flows from financing activities comprise changes in the size or composition of the contributed capital
and related costs as well as the raising of loans, inception of finance leases, instalments on interest-bearing
debt, purchase of treasury shares and payment of dividend.
Cash and cash equivalents comprise cash and short-term securities with an insignificant price risk less shortterm bank loans.
2023-03-31Lars Monrad-Gylling