Nopa Nordic A/S

Ledelsesberetning

DKK’000 2023/24 2022/23 2021/22 2020/21 2019/20 Revenue 926,817 849,423 737,906 739,528 665,809 Gross profit 233,219 193,648 167,020 197,759 164,870 Profit before financial income and expenses (EBIT) 69,127 54,026 28,940 56,474 35,698 Loss from financial income and expenses -1,485 -1,696 -1,506 -957 -1,112 Profit for the year 52,947 40,968 21,745 42,106 25,867 Total assets 506,276 470,195 445,017 382,888 371,661 Equity 312,242 279,326 241,442 228,710 201,610 Cash flows from operating activities 74,742 50,036 4,864 53,695 77,345 Cash flows from investing activities -25,445 -34,433 -49,510 -21,434 -21,560 Hereof investment in property, plant and equipment -25,445 -34,433 -49,510 -21,434 -21,560 Cash flows from financing activities -24,360 -7,309 24,503 -7,681 -47,325 Total cash flows 24,937 8,294 -20,143 24,580 8,460 Return on invested capital 13.7 11.8 9.5 21.9 13.4 Solvency ratio 61.7 59.4 54.3 59.3 54.1 Average number of full-time employees 247 224 215 219 210 Operating review Principal activities of the Group and development Nopa Nordic Group's principal activities are to develop, produce and sell private brand, private label and OEM detergents, cleaning products and products for personal care.Nopa Nordic Group is primarily active on the European markets. Consumer insights, product and production innovation remain competitive differentiators for the Nopa Nordic Group, as it strives to meet the evolving requirements of both consumers and customers. During the year, a considerable number of new products were developed and launched, and several of our products won quality, concept or design awards. Over the last years, the Nopa Nordic Group has developed its supply chain management capability to optimise production planning and deliveries to customers using near real-time out-of-store sales data. This capability has been implemented with several customers, resulting in a higher order predictability and fulfilment rate compared to other customers who do not supply actual sales data and who call off goods more erratically. We expect to implement the system with more customers over the coming years. Financial performance and position Financial performance in 2023/2024 was continuously influenced by the war in Ukraine and the war in the Middle East causing disruptions in parts of the supply chain. In spite of this significant turbulence in the supply chain during this financial year, a very high delivery performance has been achieved thanks to the supply chain management capability and a strong relationship with suppliers. The Group reported a profit of DKK 52.9 million for 2023/24, and as of 30 April 2024, equity stood at DKK 312.2 million. Nopa Nordic Group's results and financial performance for 2023/24 were above budget and satisfactory under the present market conditions. Revenue totalling DKK 926.8 million was an improvement compared to last year totalling DKK 849.4 million. Operating profit was up from DKK 54.0 million in 2022/23 to DKK 69.1 million in 2023/24. Growth was driven by a significant volume increase primarily coming from the export markets and new product categories. Sales prices were continuously reduced throughout the financial year based on lower raw material prices. However, we experienced slightly increased raw material prices at the end of the year. Cash flows from operating activities were up from DKK 50.0 million in 2022/2023 to DKK 74.7 million, mainly due to the development in results. Outlook We will continue the implementation of all new lines. Additional investments in the development of the Group’s production capabilities are ongoing. For the 2024/25 financial year, consolidated revenue is, despite reduced sales prices, expected to increase due to new contracts, product categories and a strong pipeline. Based on the uncertain geopolitical situation, it is hard to set more specific expectations. The strong program of re-investment in the further development of the Company will continue. Operating review Events after the balance sheet date No significant events have occurred after the balance sheet date with an impact on the financial statements. Risks Sales price risks Nopa Nordic A/S constantly seeks to improve its clients' competitiveness by remaining cost competitive. Inflation in the costs of raw materials and packaging poses the most significant commercial risk to the Company because these are the greatest cost drivers. During short periods of time and due to contractual commitments to our customers, price increases in raw materials and packaging may not be reflected in the sales prices charged for our final products. However, long-term risk is significantly reduced through indexing of sales prices to the prices of raw materials and packaging. Currency risks Commercial currency risk is considered low. Interest rate risks Interest-bearing debt is limited, and moderate changes in interest rates are not expected to have a major impact on earnings. Human resources Nopa Nordic A/S makes use of state-of-the-art production technology and seeks to attract and retain skilled labour to remain efficient and competitive. For example, it takes up to 1½ year to train new operators to run the most advanced production lines. Nopa Nordic A/S therefore continuously invests in the training and development of its employees' skills.In 2024/25, we expect to increase our investment in our competence development program. We also have an increased focus on developing our future colleagues throughout the organisation. We have e.g. several Industry Operator trainees and other trainee programs in cooperation with universities and university colleges. Quality and environment In March 2024, Nopa Nordic was audited according to the IFS HPC standard. Today both production sites in Denmark are IFS HPC certified. Since April 2021, Nopa Nordic A/S also has been the world’s first company in the “Home, Laundry and Personal Care” category to achieve the Bureau Veritas Certificate for the “UN Sustainable Development Goals”. Since 1998, Nopa Nordic A/S has been certified to DS/EN ISO 9001 and ISO 14001. Accordingly, Nopa Nordic A/S is required to reduce the environmental impact of its activities to an absolute minimum and to ensure that the health and safety of the individual employee remains a constant priority. Furthermore, Nopa Nordic A/S has been certified to the A.I.S.E. charter for sustainable cleaning, focusing on the environment, work environment and consumer safety. The certification supports Nopa Nordic A/S' green profile and the commercial potential of its products. Since December 2015, a voluntary annual audit has been conducted in accordance with the ISO 22716/GMP standard, and Nopa Nordic A/S was subsequently awarded a certificate of conformity confirming that our production processes and facilities are compliant with this standard. All certificates are renewed on time as required by the individual standards. Research and development Nopa Nordic A/S continuously develops and optimises its production equipment, processes, and products. Associated costs are regularly expensed. In a market where requirements and expectations constantly change, an intense focus is maintained on optimising our products together with our customers. The Nopa Nordic Family’s Product and Business Development teams strive to stay on the forefront via the development of new, even greener, innovative products and concepts and via the upgrading and enhancement of existing products. The Company also makes significant investments in long-term research and development projects in cooperation with universities and suppliers. While committed to using green energy sources only and reducing our energy consumption, we are concerned that a singular focus on CO2 reduction only could lead to sub-optimal choices that may harm the Planet in other ways. We are therefore developing a unique LCA (Life Cycle Analysis) tool that will help us asses a broader range of dimensions and will allow us to develop the most planet-friendly product possible. The LCA Tool was implemented in our product development process during 2023.