Expedit a/s 8370 Hadsten Årsrapport 2014 Annual Report 2014 CVR nr. 37 75 25 17
Contents Statement by the Board of Directors and the Executive Board 1 Independent auditors' report 2 Summary 3 Financial highlights for the Group 4 Company details 6 Group chart 8 Management's review 10 Income statement for 2014 21 Statement of comprehensive income 22 Assets at 31 December 2014 23 Equity and liabilities at 31 December 2014 24 Cash flow statement 25 Statement of changes in equity, consolidated 26 Statement of changes in equity, parent company 27 Notes 28
Statement by the Board of Directors and the Executive Board The Board of Directors and the Executive Board have today discussed and approved the annual report of Expedit a/s for 2014. The annual report has been prepared in accordance with International Financial Reporting Standards as adopted by the EU and Danish disclosure requirements for annual reports of listed companies. In our opinion, the consolidated financial statements and the parent company financial statements give a true and fair view of the Group's and the Parent Company's assets, liabilities and financial position at 31 December 2014 and of the results of the Group's and the Parent Company's operations and cash flows for the financial year 1 January 31 December 2014. Further, in our opinion, the Management's review includes a fair review of the development in the Group's and the Parent Company's operations and financial matters, results for the year, cash flows and financial position as well as describes the most significant risks and uncertainties affecting the Group and the Parent Company. We recommend that the annual general meeting approve the annual report. Hadsten, 11 March 2015 Executive Board: Steen Bødtker Board of Directors: Ib Mortensen Gottfried Wanzl Bernhard Renzhofer Chairman Lars Karstenskov Andersen* Bent Holm* *elected by the employees 1
Independent auditors' report To the shareholders of Expedit a/s Independent auditors' report on the consolidated financial statements and the parent company financial statements We have audited the consolidated financial statements and the parent company financial statements of Expedit a/s for the financial year 1 January 31 December 2014. The consolidated financial statements and the parent company financial statements comprise income statement, 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 and the Parent Company. The consolidated financial statements and the parent company financial statements are prepared in accordance with International Financial Reporting Standards as adopted by the EU and Danish disclosure requirements for annual reports of listed companies. Management's responsibility for the consolidated financial statements and the parent company financial statements Management is responsible for the preparation of consolidated financial statements and parent company financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the EU and Danish disclosure requirements for annual reports of listed companies and for such internal control that Management determines is necessary to enable the preparation of consolidated financial statements and parent company financial statements that are free from material misstatement, whether due to fraud or error. Auditors' responsibility Our responsibility is to express an opinion on the consolidated financial statements and the parent company financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing and additional requirements under Danish audit regulation. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the consolidated financial statements and the parent company financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements and the parent company financial statements. The procedures selected depend on the auditors' judgement, including the assessment of the risks of material misstatement of the consolidated financial statements and the parent company financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the Company's preparation of consolidated financial statements and parent company financial statements that give a true and fair view 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 Company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by Management as well as evaluating the overall presentation of the consolidated financial statements and the parent company financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our audit has not resulted in any qualification. Opinion In our opinion, the consolidated financial statements and the parent company financial statements give a true and fair view of the Group's and the Parent Company's financial position at 31 December 2014 and of the results of the Group's and the Parent Company's operations and cash flows for the financial year 1 January 31 December 2014 in accordance with International Financial Reporting Standards as adopted by the EU and Danish disclosure requirements for annual reports of listed companies. Statement on the Management's review Pursuant to the Danish Financial Statements Act, we have read the Management's review. We have not performed any further procedures in addition to the audit of the consolidated financial statements and the parent company financial statements. On this basis, it is our opinion that the information provided in the Management's review is consistent with the consolidated financial statements and the parent company financial statements. Aarhus, 11 March 2015 KPMG Statsautoriseret Revisionspartnerselskab Anette Harritz State Authorised Public Accountant Mads Klausen State Authorised Public Accountant 2
Management's review Summary Expedit improves profit before tax by DKK 15 million The Expedit Group realised a profit before tax of DKK 6.5 million for 2014, which is an increase of DKK 15.2 million compared to profit before tax for 2013. Revenue for 2014 amounted to DKK 432.9 million as against DKK 442 million in 2013. Revenue increased by 1% measured in fixed exchange rates. EBITDA for 2014 was realised at DKK 26.3 million as against DKK 13.3 million for 2013. EBIT for 2014 was positive with DKK 10.5 million as against negative EBIT of DKK 4.8 million for 2013. Through focus and measures previously initiated, the Group managed to reduce its breakeven revenue by 12% during 2014. Cash flows from operating activities were positive at DKK 24.3 million for 2014 as against cash flows from operating activities of DKK 10.3 million for 2013. Consolidated net interest-bearing debt for 2014 was reduced by DKK 20.1 million compared to 2013, primarily due to payment of instalments on lease contracts and bank loans. Expedit's total assets amounted to DKK 232.0 million at 31 December 2014, which is a minor decrease compared to last year. Equity amounts to DKK 96.3 million at 31 December 2014, equivalent to a solvency ratio of 41.5%. During 2015, Expedit expects to generate a minor revenue increase and improved profits. 3
Financial highlights for the Expedit Group Hovedtal Key figures Enhed Unit 2010 2011 2012 2013 2014 Omsætning mio. DKK 416,6 474,8 520,4 442,0 432,9 Revenue Bruttoresultat mio. DKK 66,0 81,1 95,2 88,5 96,2 Gross profit Resultat før afskrivninger og finansielle poster (EBITDA) mio. DKK 11,0 18,0 25,3 13,3 26,3 Earnings before interest, tax, depreciation and amortisation (EBITDA) Resultat af primær drift (EBIT) mio. DKK -6,0 0,4 8,7-4,8 10,5 Operating profit/loss Resultat af finansielle poster mio. DKK -3,5-2,6-5,2-3,9-4,0 Profit/loss from financial income and expenses Resultat før skat (EBT) mio. DKK -9,5-4,4 3,1-8,7 6,5 Profit/loss before tax (EBT) Årets resultat mio. DKK -7,1-2,8 3,9-8,2 4,7 Profit/loss for the year Balancesum mio. DKK 251,6 285,0 259,1 240,1 232,0 Balance sheet total Egenkapital mio. DKK 102,8 98,9 104,3 94,5 96,3 Equity Pengestrøm fra driften mio. DKK 13,3 15,1 10,2 10,3 24,3 Cash flows from operating activities Pengestrøm til investering, netto mio. DKK -11,6-11,7-12,0-13,7-4,6 Cash flows from investing activities, net Heraf til investering i materielle anlægsaktiver mio. DKK -11,8-6,6-10,3-11,6-2,7 Portion relating to investment in property, plant and equipment Pengestrøm fra finansiering mio. DKK -2,8 10,7-7,0 5,6-7,9 Cash flows from financing activities Pengestrøm i alt mio. DKK -1,1 14,0-8,8 2,2 11,8 Total cash flows from operating, investing and financing activities 4
Nøgletal: Financial ratios: Enhed Unit 2010 2011 2012 2013 2014 Bruttomargin % 15,6 17,1 18,3 20,0 22,2 Gross margin EBITDA-margin % 2,6 3,7 4,8 3,0 6,1 EBITDA margin Overskudsgrad (EBITmargin) Operating margin % -1,4 0,1 1,7-1,1 2,4 Afkastningsgrad (afkast af investeret kapital inkl. goodwill) % -2,5 0,2 3,2-2,0 4,5 Return on investment (Return on invested capital including goodwill) Egenkapitalforrentning % -6,8-2,8 3,8-8,2 4,9 Return on equity Soliditetsgrad % 40,9 34,7 40,2 39,4 41,5 Solvency ratio Gælds gearing 6,9 3,7 2,7 5,6 2,1 Debt gearing Resultat pr. aktie (EPS) kr. -46-18 25-53 30 Earnings per share (EPS) Gennemsnitligt antal medarbejdere 304 323 354 342 302 Average number of employees Earnings per share have been calculated in accordance with IAS 33 (note 25). Other financial ratios are calculated in accordance with the Danish Society of Financial Analysts' guidelines on the calculation of financial ratios "Recommendations and Financial Ratios 10". For definitions of financial ratios, please see page 59. 5
Management's review Company details Expedit a/s Toftegårdsvej 4 DK-8370 Hadsten Telephone: +45 87 612 200 Telefax: +45 87 612 300 Website: www.expedit.dk E-mail: expedit@expedit.dk CVR No.: 37 75 25 17 Established: 1964 Registered office: Favrskov, Denmark Board of Directors Ib Mortensen, Denmark CEO (chairman) Age of 68, served on the Board of Directors of Expedit since 2010 Gottfried Wanzl, Germany Chairman of the Supervisory Board of Wanzl GmbH & Co. Holding KG Age of 60, served on the Board of Directors of Expedit since 2012 Bernhard Renzhofer Managing Director Age of 46, served on the Board of Directors of Expedit since 2013 Lars Karstenskov Andersen, Denmark Product Developer, elected by the employees Age of 49, served on the Board of Directors of Expedit since 1995 Bent Holm, Denmark Semi-skilled worker, elected by the employees Age of 52, served on the Board of Directors since 2008 Executive Board Steen Bødtker CEO CEO of Granhøj Holding ApS Other directorships: Strandgaarden Wine & Spirits A/S Secure Nordic Secondary A/S Secure Art A/S Secure Gsf A/S Secure Spe A/S Private Equity A/S I-Makers A/S Euro Lumex Aps 21 managing positions in companies in the Wanzl Group Managing Director of the following companies: Wanzl GmbH & Co. Holding KG Wanzl GmbH Wanzl Metallwarenfabrik GmbH Wanzl Beteiligungsgesellschaft mbh Wanzl Shop Solutions GmbH TB Beteiligungs GmbH & Co. KG TB Verwaltungs GmbH Wanzl SAS Directorships: Dafa A/S NOPA Nordic A/S ElmerPrint A/S 6
Management's review Company details Auditors KPMG Statsautoriseret Revisionspartnerselskab Bredskifte Allé 13 8210 Aarhus V Denmark 7
Management's review Chart of the Expedit Group The Expedit Group consists of the following companies: Expedit a/s, Denmark 100% Expedit AB, Sweden 100% Expedit Norge AS 100% Expedit Finland (branch) Expedit focuses on three customer segments within retail trading: Food Retail, which comprises all customers within the groceries trade, including the convenience segment. Specialist Trade, which comprises "heavier" specialist trade customers, including DIY shops, etc. Fashion & Lifestyle, which comprises the finer specialist trade, including clothing chains, etc. As a common denominator for all customer segments, the Expedit Group's core competence is to supply complete shopfitting solutions where Expedit offers to take responsibility for the entire process from concept development, design and project management to production, delivery and installation of customised shopfitting solutions as well as after-sale service. The parent company Expedit a/s has, for many years, been among the most important players within Food Retail and Specialist Trade on the Danish market. Since 2011, Expedit has also managed to develop a platform within Fashion & Lifestyle. Expedit is primarily engaged in co-operation with the major chains in Denmark and has, in recent years, become a total solutions partner for the retail trade for the purpose of shop openings. Expedit supplies both shopfitting equipment produced on the company's factories in Denmark or sourced from sub-suppliers as well as supplementary equipment such as entrance systems, shopping trolleys, lighting and checkouts purchased from various business partners. Production in Denmark comprises metal production as well as wood protection and handles all tasks right from production of prototypes or single units to production of major production batches on the company's automated production lines. Products manufactured in Denmark are sold through all the Group's companies. The activity in Finland is carried out through a branch of the parent company. The entity markets shopfitting and shopfitting solutions towards the Finnish retail trade. The branch operates primarily within the customer segments, Food Retail and Specialist Trade. 8
Management's review Chart of the Expedit Group Expedit Norge AS services the Norwegian retail trade with shopfitting and shopfitting solutions. The company is capable of handling the entire shopfitting process for the customers, and the company markets itself towards the three customer segments on the Norwegian market. Expedit AB provides the Swedish retail trade with shopfitting and shopfitting solutions. The company is capable of handling the entire shopfitting process for the customers, and the company markets itself towards the three customer segments on the Swedish market. The company's primary focus remains on the Swedish retail trade but is to an increasing degree engaged in business relationships with customers outside Sweden and remains focused on developing, meeting and servicing the need of Nordic retail chains for total solutions at home and abroad. The company has a minor wood production to ensure proximity with customers and to be able to be flexible in terms of short delivery times, but sources the vast part of the goods and services from the parent company and external suppliers. In January 2015, Expedit established Expedit Baltic SIA, which is a production company situated in Latvia. Expedit Baltic will, among other things, produce labour-intensive subjects to the group enterprises. 9
Management's review Strategy and objectives The headline of Expedit's strategy reads as follows: From manufacturer of steel and wood products to knowledge-based total concept/solution provider in selected markets The vision of the Expedit Group reads as follows: Expedit's vision is to be the leading shopfitting supplier to the Nordic area, recognized as "the expert" adding real value to our customers, and the best performing shopfitting company delivering sound and stable financial results and its mission statement as follows: Expedit's mission is to develop unique and functional customer-oriented shopfitting solutions, and thereby to develop sustainable business, while allowing each individual employee to thrive The Expedit Group's three-year plans were updated in 2014. The plans have been broken down to customer groups and individual customers. The strategy is implemented as set out in the plan, and all of the Group employees are regularly informed about the progress in the strategy implementation. Having managed to turn the 2013 deficit into profit in 2014, the Group remains of the opinion that results should be driven by profitable growth. Accordingly, the three targets set out below are continuously deemed the most important in implementing the Group s strategy: Organic growth of 5% per year or at least above market average A return on investment of more than 15% Profit before tax of a minimum of 6% of revenue. In line with recent years, the Group invested in development of the entire Group and its employees. The development activities take place both in the individual companies and at Group level, with many initiatives being underway to rely on synergies and utilize the opportunities offered by the size of the Group. 10
Management's review Financial performance and market conditions Expedit has during 2014 generated improved profits before tax by DKK 15,0 million compared to profits for 2013. Expedit Group realised profit before tax of DKK 6.5 million for 2014 based on revenue of DKK 432.9 million. The results were generated during a strong 2 nd half of 2014, as the initial half-year generated a loss. The results are positive and are in line with the forecast after the first half-year 2014. Revenue for 2014 amounted to DKK 432.9 million, which is a revenue decline of 2% compared to revenue for 2013 of DKK 442.0 million. The reduction in revenue was solely attributable to the exchange rate development during 2014, and measured on the basis of fixed exchange rates, consolidated revenue was up by 1%. EBITDA for 2014 amounted to DKK 26.3 million as against DKK 13.3 million in 2013, and EBIT was positive at DKK 10.5 million for 2014 as against negative EBIT for 2013 of DKK 4.8 million. Profit before tax amounted to DKK 6.5 million, equivalent to an increase of DKK 15.2 million compared to 2013. Through focus and measures previously initiated, the Group further increased the contribution ratio for 2014 and managed to significantly reduce its level of capacity costs, including restructuring costs. In addition to the notable performance improvement, the Group's break-even revenue was also reduced. Development on the Danish, Swedish, Norwegian and Finnish markets are set out below. The positive results produced positive cash flows from operations of DKK 24.3 million for 2014 as against DKK 10.3 million for 2013. Cash flows from operating activities were positively affected by the development in consolidated working capital, where especially the focus on reducing inventories in all entities has paid off. Cash flows from investing activities amounted to DKK 2.7 million and net settlement of longterm debt to DKK 7.9 million, resulting in positive cash flows for 2014 of DKK 11.8 million as against positive cash flows of DKK 2.2 million last year. The Expedit Group's net interest-bearing debt for 2014 was reduced by DKK 20.1 million compared to 2013, primarily due to repayment of lease contracts and bank loans. Financial expenses represented a net amount of DKK 4 million for 2014, which was in line with financial expenses for 2013. Costs were negatively affected by an increase in interest margin, while the movements in the Expedit Group's working capital had a positive impact on financial expenses for 2014. The Expedit Group's total assets amount to DKK 232 million at 31 December 2014 as against DKK 240.1 million last year. The decrease can primarily be attributed to investment restraint and optimisation of consolidated working capital, with inventories being reduced by DKK 6.7 million. Equity amounts to DKK 96.3 million at 31 December 2014, equivalent to a solvency ratio of 41.5% as against a solvency ratio of 39.4% at 31 December 2013. Market situation in general Retail trading remains under pressure in the Nordic region. Consumer spending is stagnating in the individual countries, with consumers displaying reluctant spending behaviour and webbased shopping is constantly gaining ground within many lines of business. 11
Management's review Retail trade is therefore faced with a general revenue decline, which ultimately may lead to shops closing. Expedit's primary customers are major retail chains, which are affected by a slow-down in sales, but not to the same extent as minor chains or stand-alone shops. Even though the customers within the Food segment are not affected by the negative trends to the same extent as the segment, Fashion & Lifestyle, all customer segments are marked by economic decline. Excess capacity is still the order of the day in the shopfitting industry, which together with fierce competition from the Far East and Eastern Europe continuously puts market prices under pressure. The derived lower market price level remains unchanged, and no immediate changes are expected in the coming year. Expedit has in 2014 and in line with recent years, continuously focused on generating positive results based on the lower price levels. 2014 saw the bankruptcy of several competitors, and especially the bankruptcy of the New Store Europe Group domiciled in Norway and with revenue of approx. DKK 1.3 billion made its mark in the market. In the beginning of Q4, Expedit took over assets from the bankruptcy after one of its Danish competitors, EM Retail Solutions. During Q4, Expedit undertook several deliveries to former customers of EM Retail Solution, which generated a positive impact on revenue and results for 2014. The market trends have also in 2014 resulted in a revenue decline in the parent company in Denmark and the branch in Finland compared both to 2013 figures and the 2014 forecast. In Denmark, the revenue decline took place during the first six months, when customers displayed an unusual restraint in investments, while growth was on a satisfactory level during the last six months. In Finland, the decline was recorded throughout the entire year. Expedit Sweden experienced satisfactory growth for 2014, which, together with a strong focus on optimisation of results, resulted in a profit increase of more than SEK 13 million for 2014. Despite the general decline on the Norwegian market, Expedit Norway realised good growth, thus reported improved results. The effect of the integration of factories in Denmark as well as closing offices in Sweden and Norway, is reflected in results for 2014, and the consequences of production, sales and design resources on a lower number of locations were positive in 2014. At the beginning of 2015, the order book was at a satisfactory level, and based on trends especially during the last six months of 2014, the outlook for 2015 is positive. Production, investments and quality Considering liquidity, the Group displayed investment restraint also in 2014, with investments amounting to a modest DKK 2.7 million. The decision to establish "Fremtidens Fabrik" (the Factory of the Future) in Hadsten resulted in minor investments in 2014, of which the last part will be realised in 2015, when the full effect of the integration will occur during the last six months. In 2014, the Expedit Group decided to set up a production company in Latvia, Expedit Baltic. The company was established in January 2015. It is Expedit's objective that the name, Expedit, both in terms of products and services and on all markets and areas, is associated with high quality. As a consequence, Expedit strives to continuously develop quality management systems directed at proactively preventing errors 12
Management's review and the repetition of errors. Also during 2014, investment has been made in training employees in processes and self-control, in order to ensure a continuously high quality level. Intellectual capital and organisation Competent staff is the most important asset for the strategic development of the Group, and Expedit has continuous focus on strengthening and developing the organisation as a whole as well as individuals. In 2014, the Academy of the Expedit Group remained a priority, ensuring continuous focus on the development of the Group s employees in all entities and all levels. As an important part of the company s social responsibility, and in compliance with the health and safety policies of the Expedit Group, it is, cf. description in the section regarding corporate social responsibility, Expedit's intention, through continued, focused and systematic efforts, to offer all its employees a safe and sound working environment, and efforts are continuously made to improve health among its employees and protect them against occupational deceases and accidents at work. Development activities The development activities primarily involve product development in the companies in Denmark and in Sweden. In addition to the development of Expedit's standard product range, a typical development engagement is undertaken in cooperation with the customer in accordance with the increasing need for individual shopfitting solutions. Furthermore, all entities participate in ad hoc development work with suppliers of goods for resale in order to customise the products marketed by the Group in the Nordic countries to the current customers. Outlook Following the positive trends during the last six months of 2014, the outlook for 2015 remains positive at the beginning of the year. The market is continuously undergoing major changes, and therefore the level of activities for 2015 is fairly difficult to predict. Competition in the industry remains fierce, thus earnings will remain under pressure. The Expedit Group's order book is at a satisfactory level at the beginning of 2015, which, together with initiatives taken in Denmark and Sweden, offers promising prospects for 2015 performance. Overall the Group expects to generate a minor revenue increase and realise positive results for 2015. Special risks Operating risks The largest individual business risk relates to the customer mix, comprising many of the large retail chains in the Nordic countries. Therefore, there is regular focus on entering into cooperation with new customers, which over the past couple of years has resulted in intake of several new customers. This strengthens Expedit's customer platform and contributes to reducing dependency on single customers. Earnings of the Expedit Group are sensitive to the development in the prices of the Group s raw materials, primarily steel and wood. To counter this risk, Expedit's trading agreements with the customers contain a proviso for the development in these raw materials. On the basis 13
Management's review of international indexes, Expedit regularly adjusts its prices towards the customers in the case of unforeseen developments in the prices of one or several raw materials. The high share of in-house production in the Expedit Group, particularly in the parent company, entails that the Group is exposed to fluctuations in activity. Together with large seasonal fluctuations, the development in the activity level in 2013 and 2014 has put heavy demands on the flexibility in production and logistics. The Group s risk management system is further dealt with under Corporate Governance. Financial risks The financial risks of the Expedit Group and management of these is dealt with in note 21, which states that Expedit is exposed to movements in the exchange rates of SEK and NOK and, to a certain extent, interest rate fluctuations, since part of the Group s interest-bearing debt is floating-rate debt. The Board of Directors and the Executive Board have relied on the going concern principle for the purpose of the financial reporting. By the end of 2014, consolidated cash resources, including undrawn drawing rights, were significantly improved compared to same time last year, and consolidated liquidity is deemed sufficient to realise the plans set out in the strategic plan and budgets, including establishment in Latvia. At the financial reporting date, the Board of Directors and the Executive Board are not aware of factors leading to any doubt as to whether the Expedit Group and the parent company can continue operations at least until the next balance sheet date. Accounting risks valuation of non-current assets Based on impairment tests of goodwill and non-current assets regarding Expedit Denmark (exclusive of the building in Ulstrup, which is assessed separately, see below), Expedit Sweden and Expedit Norway, Management has assessed that at 31 December 2014 there is no need for impairment of carrying amounts, including investments in the parent company financial statement. Assumptions and uncertainties are described in note 8, to which reference is made. Expedit will still have production in Ulstrup during 2015, and as the future use of the property has not been finally determined, Management has, based on the current use of the property, assessed whether there is need for impairment of the property. Management has taken the view that no such need exists. As a result of the uncertainties involved in the assessments, the valuation in the annual report for 2014 is subject to uncertainty. Events after the balance sheet date No material events have occurred after the balance sheet date considerably affecting the 2014 annual report. 14
Management's review Corporate Governance Expedit has prepared a statutory annual corporate governance statement, cf. section 107b of the Danish Financial Statements Act, for the financial year 2014 and published the statement on the Group s website http://www.expedit.eu/investor/corporate-governance/principles-of-corporate-governance The statement outlines how Expedit fulfils the Corporate Governance Recommendations and describes the main elements of the Group s internal control and risk management systems as well as the composition of the Group s governing bodies. Social responsibility The Expedit Group wants the surroundings to have the best possible conditions and has constant focus on the Group s conduct, but also wants to influence suppliers and collaboration partners to show decent and responsible behaviour. Being a player in the global community, Expedit has therefore decided to operate in accordance with the UN Global Compact and has prepared the Code of Conduct of the Expedit Group, which states the ethical guidelines and values on which the Group s conduct is based, including the Group s position regarding human rights, and which must govern the Group s trade with the suppliers. In association with the Code of Conduct, a number of policies have been prepared and implemented - policies which the Expedit Group internally finds it important to comply with in order to meet customer expectations and needs and to ensure that the Group s employees thrive. Everything must take place in a way so that Expedit can conduct business with the least possible environmental impact. Policies have been worked out for Environment, Purchasing, Market Behaviour and HR, which are available on the Group s website. Expedit has moreover a policy for gender quotation of Management. Other than set out in the Code of Conduct, Expedit has no separate policies regarding human rights and climatic impacts. The following sections describe policy/targets, actions and results regarding gender quotation of Management, Market Behaviour and collaboration with suppliers (Market Behaviour and Purchasing), environment/climate (Environment) and working environment/health (HR). Targets and policy for gender quotation on Expedit's management In accordance with the policy adopted, it is the opinion of Expedit that all jobs in the Group are to be occupied by the candidates best qualified, including also the positions at the top managerial levels. In addition to this, Expedit strives to secure diversity and equal opportunities for both genders, in all parts of the Group s organisation, including Management. Expedit has redefined the scheduled period for reaching the targeted increase in the number of women serving on the Board of Directors to the effect that in 2017 at least 33% of the board members are to be women. At the annual general meeting in April 2014, the shareholders reelected the board members, thus the share remains unchanged from last year. The gender of potential candidates to serve on the Board of Directors will be an important factor when electing new board members. At the present point, the Board of Directors of Expedit does not contain female members, and this also applies to the Boards of Directors of the subsidiaries. 15
Management's review It is the opinion of Expedit that an equal balance between genders creates the best working conditions in all departments and functions and at all levels in the Group s organisation. At the present point of time, the share of women in the management of the Expedit Group makes up 19% as against 10% last year. To foster this equal balance, the gender of potential executives will be a decisive factor in future hiring and promotions. The strong focus on increasing the share of female executives will be based on the consideration that employees, including executives, are always employed on the basis of professional and personal competencies. Market behaviour and collaboration with suppliers Expedit's policy for good market behaviour describes how the Group's employees are to act when in the market, including in problematic situations and moral dilemmas. It is the policy of Expedit, that the Expedit Group and its employees always comply with local legislation and act in a professional manner towards cooperation partners. that no bribery, in any form whatsoever, is acceptable, that Expedit does not act in an anti-competitive way in the market and does not enter price or market agreements with competitors. that Expedit does not tolerate or contribute to any money laundering. that Expedit does not participate in violating human rights. All suppliers to the Expedit Group whose trading with Expedit will exceed DKK 0.5 million must, prior to start-up of the cooperation, sign Expedit's Code of Conduct, and thereby confirm that as a minimum they will live up to the requirements set out therein. Accordingly, Expedit is vested with the right to be able to check at any time that the individual supplier complies with the Group s Code of Conduct, either through Expedit's own checking or through the assistance of external partners checking up on the issues, and in the regular follow-up meetings with the suppliers, compliance with Expedit's Code of Conduct is a permanent item on the agenda. At the end of 2014, 128 suppliers had signed Expedit's Code of Conduct, and they thus include all the most important suppliers of the Group. Today, signing of the Code of Conduct by the suppliers has become a natural part of the procedures regarding approval of a supplier prior to start-up of cooperation, and regular follow-up takes place at meetings with the suppliers. Environment/climate The Expedit Group considers the environmental impact of the company an important part of corporate social responsibility and therefore works environmentally consciously in its efforts to reduce the environmental impact of the Expedit Group, primarily from the factories in Denmark and Sweden. The focus is primarily on the following three areas: Reduction in energy consumption, primarily in production, but also by sound practices in the administrative functions in all entities Continuous focus on reducing consumption of materials and lowering waste 16
Management's review Through new investments to reduce energy consumption in as many processes as possible. Expedit considers the environment in the way the companies are run. By focused development of new products and processes and implementation of relevant contingency plans and procedures, continuous efforts are made to minimise the consumption of resources and the environmental impact within financially justifiable frameworks. When new investments are decided, the energy consumption forms part of the basis of decision, and experience from investments in recent years show that much can be gained from these efforts. Expedit commits itself as a minimum to comply with all applicable legislation and regulations, and implements the required standards, procedures, contingency measures and control systems to ensure that the companies are run in a safe and justifiable manner. No systematic measurement and follow-up on results has been implemented. Working environment/health Expedit sees it as an important and continuous task to protect its employees against accidents at work and occupational deceases, ensure a sound working environment in all the Group s companies and at all times, as a minimum, comply with the legal requirements applying in this field. Expedit commits itself to contribute actively and proactively to improvements and development of the companies layouts, procedures, processes, standards and products, so that the preconditions exist for all employees to work in a safe and healthy environment. Expedit is of the opinion that the employees must be involved so that sound and lasting solutions can be implemented, and at the same time all employees are expected to take responsibility and learn from their own experiences as well as the experiences of others. In co-operation with Teksam (a co-operative body), Expedit conducted an employee satisfaction survey in Q1. The findings of the survey have been presented to the employees, and measures have been taken to improve any areas needing address according to the survey. Business partners working on the premises of one of the Group companies are subject to the same working environment requirements which apply to Expedit's own employees. Expedit continuously targets zero working accidents, and the employee committee is attentive to this aspect relying on i.a. workplace assessments. The situation in 2014 was as planned, and despite a higher number of minor working accidents, the accidents were not of a serious nature. 17
Management's review Shareholder information Financial ratios and ownership Unit 2010 2011 2012 2013 2014 Earnings per share DKK -46-18 25-53 30 Cash Flow Per Share DKK 86 98 66 67 77 Net asset value per share DKK 668 642 677 614 626 Market price at year end DKK 230 199 295 430 475 Price/book value DKK 0.3 0.3 0,4 0.7 0.8 Price Earnings DKK -5.0-10.8 11,7-8.1 15.8 Price Cash Flow DKK 2,7 2.0 4,5 6.4 6.2 Payout ratio % 0.0 0.0 0,0 0.0 0.0 Dividend per share DKK - - - - - Reference is made to definitions in note 24, accounting policies. Share capital and ownership The share capital of the parent company Expedit a/s amounts to a nominal value of DKK 15.4 million, corresponding to 154,000 shares of DKK 100 each, of which class A shares account for DKK 1.5 million and class B shares for DKK 13.9 million. A-shares carry voting rights at the ratio of 10 to 1. The Board of Directors is of the opinion that the split of the company s share capital into two classes of shares is appropriate at the present point of time, in consideration of the development of the company. The B-shares are listed on the Nasdaq OMX Nordic Stock Exchange Copenhagen under the ID code DK0015312474. The shares are freely negotiable. The Board of Directors continues to regard the capital structure appropriate. The following shareholders hold more than 5% of the share capital and 5% of the votes: Share holding RW Finanz AG, Switzerland 35.7% Volksbank Günzburg eg, Germany 19.9% Wanzl-Metallwarenfabrik GmbH, Germany 13.6% Olav W. Hansen 10.3% Walter Manser AG, Switzerland 5.1% Members of the Board of Directors and the Executive Board do not own shares. 18
Management's review Dividends Expedit strives to distribute dividends to its shareholders when motivated by Expedit's financial development and equity ratio. However, the company has taken the view that its results primarily are to be used for the continued development of the Group and to foster a potential for the required and targeted expansion. The Board of Directors recommends to the company in General Meeting that no dividends be distributed for the financial year 2014. Incentive schemes The Expedit Group has not introduced any actual incentive schemes (share-based payment). The Executive Boards of the parent company and the subsidiaries receive performancerelated bonus based on financial ratios and personal targets. Policy for treasury shares Expedit has an annual authorisation from the General Meeting to acquire up to 10% of treasury shares. Expedit a/s has no treasury shares at 31 December 2014. Management agreements on compensation upon dismissal/takeover bid and change of control clauses" Expedit has no agreements with its Board of Directors, Executive Board or other employees on any financial compensation in case of dismissal or a takeover bid from a new owner, nor are there any other "change of control clauses". 19
Management's review Stock Exchange Notices issued in 2014 and 2015 In 2014 and until 11 March 2015, Expedit a/s has issued the following Stock Exchange Notices: Stock Exchange Notice No. 1/2014 of 28 January 2014: Expedit in the red due to revenue decline in Q4 Stock Exchange Notice No. 2/2014 of 12 March 2014: Announcement of the annual report for the 2013 financial year Stock Exchange Notice No. 3/2014 of 29 April 2014: Interim update Stock Exchange Notice / 29 April 2014: Minutes of the General Meeting of Expedit on 29 April 2014 Stock Exchange Notice No. 4/2014 of 10 July 2014: Revised issue of interim reports Stock Exchange Notice No. 5/2014 of 29 July 2014: Announcement of majority shareholders Stock Exchange Notice No. 6/2014 of 29 August 2014: Interim report for the period 1 January 30 June 2014 Stock Exchange Notice No. 7/2014 of 14 October 2014: Expedit is acquiring Stock Exchange Notice No. 8/2014 of 22 October 2014: Interim update Stock Exchange Notice No. 9/2014 of 17 December 2014: Financial calendar for 2015 Financial calendar Expedit a/s plans to issue the following Stock Exchange Notices in 2015: 11 March 2015: Announcement of the annual report for the 2014 financial year 28 April 2015: Interim update 31 August 2015: Interim report for the period 1 January 30 June 2015 21 October 2015: Interim update The company's annual General Meeting is to be held on 28 April 2015. 20
21 Resultatopgørelse / Income statement Note tdkk Koncern Moderselskab Notes Consolidated Parent Company 2014 2013 2014 2013 1 Omsætning 432.886 441.952 241.457 248.376 Revenue 2,3 Produktionsomkostninger 336.644 353.487 192.286 200.129 Production costs Bruttoresultat 96.242 88.465 49.171 48.247 Gross profit 2,3 Salgs- og distributionsomkostninger 60.679 62.601 31.803 30.103 Selling and distribution costs 2,3 Administrationsomkostninger 24.865 24.693 15.482 14.416 Administrative expenses 3 Særlige poster 185 5.963 185 3.889 Separate items Resultat af primær drift (EBIT) 10.513-4.792 1.701-161 Operating profit/loss (EBIT) 4 Finansielle indtægter 279 393 4.248 397 Financial income 5 Finansielle omkostninger 4.247 4.253 3.202 2.762 Financial expenses Resultat før skat 6.545-8.652 2.747-2.526 Profit/loss before tax 6 Skat af årets resultat -1.892 453 113-481 Tax on profit/loss for the year Årets resultat 4.653-8.200 2.860-3.007 Profit/loss for the year 7 Resultat/udvandet resultat pr. aktie (EPS-D) 30-53 Earnings/diluted earnings per share (EPS-D)
Totalindkomstopgørelse / Statement of comprehensive income NotetDKK Koncern Moderselskab Notes Consolidated Parent company 2014 2013 2014 2013 Årets resultat 4.653-8.200 2.860-3.007 Profit/loss for the year Anden totalindkomst Otber comprehensive income Poster der kan blive reklassificeret til resultatopgørelsen: Items that can be reclassified to income statement: Værdiregulering af sikringsinstrumenter: Value adjustment of hedging instruments Årets værdiregulering -538 575-538 575 Value adjustments for the year Værdiregulering overført til finansielle poster 256 260 256 260 Value adjustment transferred to financial income and financial expenses Skat af værdiregulering vedrørende sikringsinstrumenter 71-209 71-209 Tax on value adjustment of hedging instruments Valutakursreguleringer ved omregning af udenlandske enheder -2.604-2.600 0 0 Foreign exchange adjustments on the translation of foreign entities Regulering af udskudt skat på omvurdering af ejendom som følge af nedsættelse af dansk selskabsskatteprocent fra 25 % til 22 % i 2016 0 396 0 396 Adjustment of deferred tax, revaluation of property following reduction in Danish corporation tax rate from 25% to 22% in 2016 Anden totalindkomst efter skat -2.815-1.578-211 1.022 Other comprehensive income after tax Totalindkomst i alt 1.838-9.778 2.649-1.985 Total comprehensive income 22
23 Aktiver pr. 31. december / Assets at 31 December Note tdkk Koncern Moderselskab Notes Consolidated Parent Company 2014 2013 2014 2013 Goodwill 13.822 14.583 2.265 2.265 Goodwill Udviklingsprojekter 818 1.725 0 0 Development projects 8 Immaterielle aktiver 14.640 16.308 2.265 2.265 Intangible assets Grunde og bygninger 70.217 70.918 54.582 56.741 Land and buildings Tekniske anlæg og maskiner 22.223 29.292 18.874 25.464 Plant and machinery Andet driftsmateriel og inventar 3.626 6.085 2.773 4.687 Fixtures and fittings, other plant and equipment Anlæg under opførelse 0 3.607 0 0 Assets under construction 9 Materielle aktiver 96.066 109.902 76.229 86.892 Property, plant and equipment 10 Kapitalandele i dattervirksomheder - - 41.913 41.913 Investments in subsidiaries 14 Udskudt skat 6.469 6.679 5.228 5.045 Deferred tax Andre langfristede aktiver 6.469 6.679 47.141 46.958 Other non-current assets Langfristede aktiver 117.175 132.889 125.635 136.115 Non-current assets 11 Varebeholdninger 51.643 58.342 30.506 29.623 Inventories 12 Tilgodehavender 48.564 43.493 51.797 38.323 Receivables 13 Forudbetalt selskabsskat 454 511 0 0 Corporation tax prepaid Periodeafgrænsningsposter 5.144 4.435 3.520 3.924 Prepayments Likvide beholdninger 9.031 401 0 20 Cash at bank and in hand Kortfristede aktiver 114.836 107.182 85.823 71.890 Current assets Aktiver 232.011 240.071 211.458 208.005 Total assets
24 Passiver pr. 31. december/ Equity and liabilities at 31 December Note tdkk Koncern Moderselskab Notes Consolidated Parent Company 2014 2013 2014 2013 Aktiekapital 15.400 15.400 15.400 15.400 Share capital Overkurs ved emission 14.196 14.196 14.196 14.196 Share premium Reserve for opskrivning 10.285 10.285 10.285 10.285 Revaluation reserve Reserve for valutakursreguleringer -3.452-848 0 0 Translation reserve Reserve for sikringstransaktioner -1.052-841 -1.052-841 Hedging reserve Overført resultat 60.968 56.315 66.587 63.727 Retained earnings Egenkapital i alt 96.345 94.507 105.416 102.767 Total equity 15 Realkredit- og kreditinstitutter 36.316 44.722 33.681 41.115 Mortgage credit institutions and banks 21 Anden langfristet gæld 0 1.869 0 0 Other non-current liabilities Langfristede forpligtelser 36.316 46.591 33.681 41.115 Non-current liabilities 15 Realkredit- og kreditinstitutter 26.806 29.885 19.854 20.531 Mortgage credit institutions and banks 16 Leverandørgæld og andre gældsforpligtelser 69.529 67.430 51.114 42.475 Trade and other payables 15,22 Afledte finansielle instrumenter (negativ dagsværdi) 1.393 1.111 1.393 1.111 Derivative financial instruments (negative fair value) 13 Skyldig selskabsskat 1.622 547 0 6 Corporation tax payable Kortfristede forpligtelser 99.350 98.973 72.361 64.123 Current liabilities Forpligtelser 135.666 145.564 106.042 105.238 Liabilities Passiver 232.011 240.071 211.458 208.005 Total equity and liabilities 17 Sikkerhedsstillelser Collateral 18 Eventualforpligtelser og -aktiver Contingent liabilities and contingent assets 19 Operationel leasing Operating leases 20 Køb af dattervirksomheder og aktiviteter Acquisition of subsidiaries and activities 21 Finansielle risici og finansielle instrumenter Financial risks and financial instruments 22 Nærtstående parter Related party disclosures 24 Begivenhender efter balancedagen Subsequent events 25 Anvendt regnskabspraksis Accounting policies
Pengestrømsopgørelse / Cash flow statement NotetDKK Koncern Moderselskab Notes Consolidated Parent Company 2014 2013 2014 2013 Resultat før skat 6.545-8.652 2.747-2.526 Profit/loss before tax Regulering for ikke-likvide poster: Adjustment for non-cash items: Afskrivninger (inkl. fortjeneste/tab af langfristede aktiver) 15.356 15.779 12.212 10.726 Depreciation (including gains/losses on non-current assets) Øvrige reguleringer og urealiserede valutakursreguleringer m.v. -888-1.065 1-18 Other adjustments, unrealised foreign exchange adjustments, etc. Pengestrøm før ændring i driftskapital 21.013 6.062 14.960 8.182 Cash flows before changes in working capital Ændring i varebeholdninger 6.699 7.838-883 3.482 Changes in inventories Ændring i tilgodehavender -5.780 6.243-13.070-4.958 Changes in receivables Ændring i leverandørgæld og anden gæld 2.241-10.338 8.639 101 Changes in trade and other payables Betalt selskabsskat, netto 123 529-6 -115 Corporation tax paid, net Pengestrøm fra driftsaktivitet 24.296 10.334 9.640 6.692 Cash flows from operating activities Køb af materielle og immaterielle langfristede aktiver -2.687-17.038-1.549-12.526 Acqusition of property, plant and equipment and intangible assets Salg af materielle langfristede aktiver 0 5.405 0 5.405 Disposal of property, plant and equipment 21 Køb af dattervirksomheder og aktiviteter -1.869-2.100 0 0 Acquisition of subsidiaries and activities Pengestrøm til investeringsaktivitet -4.556-13.733-1.549-7.121 Cash flows from investing activities Afdrag på langfristede gældsforpligtelser -7.935-11.318-7.451-11.318 Repayment of long-term debt Optagelse af lån 0 16.959 0 16.959 Inception of loans Pengestrøm til finansieringsaktivitet -7.935 5.641-7.451 5.641 Cash flows from financing activities Årets pengestrøm 11.805 2.242 640 5.212 Net cash flows from operating, investing and financing activities Likvide beholdninger 1. januar -19.834-22.365-10.861-16.073 Cash and cash equivalents at 1 January Kursregulering 375 289 0 0 Foreign exchange adjustments Likvide beholdninger 31. december -7.654-19.834-10.221-10.861 Cash and cash equivalents at 31 December Som fordeles således: Recognised as follows: Likvide beholdninger 9.031 401 0 20 Cash at bank and in hand Gæld, kreditinstitutter (kortfristet træk, kreditter) -16.685-20.235-10.221-10.881 Debt, credit institutions (short-term drawings, credits) Total -7.654-19.834-10.221-10.861 Total 25