Hardi International A/S

Ledelsesberetning

Management commentary Management comm entary 2024/25 2023/24 2022/23 2021/22 2020/21 DKK'000 DKK'000DKK'000DKK'000DKK'000 Financial highlights Key figures Revenue371.013546.383590.442512.466486.022Gross profit/loss 28.02156.21672.68731.90758.631Operating profit/loss including subsidiariesbefore restructuring (101.962)(47.528)6.504(36.795)(43.275)Net financials before subsidiaries(4.639)(10.916)(11.083)(8.703)(8.549)Restructuring expenses before tax effects0000(5.296)Profit/loss for the year(109.047)(57.248)(17.929)(39.577)(54.852)Total assets333.774384.589411.132401.037412.278Investments in property, plant and equipment6.5974.86717.0389.3367.690Equity25.01434.30959.45072.464115.013Ratios Gross profit (%)7,610,312,36,212,1EBIT margin incl. result from subsidiaries on Parent Company Revenue (%)(27,5)(8,6)1,1(7,2)(8,9)Current Ratio0,870,901,011,201,67Solvency Ratio7,58,914,518,127,9Primary activities The principal activities of the Company are development, production and sales of sprayers and spraying equipment primarily to the agricultural industry. Management commentary Development in activities, finances, sales and distribution As expected, this year has proved to be very challenging. The up-tick in the market, which we expected to see the beginning of when we closed the last financial year, substantially, did not materialise. The market has gone from bad to worse to a further degree than anticipated. The order intake has been deteriorating across the HARDI group and the low orderbook values remain low. The uncertainty relating to the US Government implementing very high import tariffs and the resulting trading conflict and the de-funding of US AID has given farmers in the US substantial challenges. As farm incomes have significantly reduced in the US coupled with high import tariffs into the US, HARDI has experienced a notable decline in new machine orders in the US, whereas our OEM business despite the tariff complications, continues to thrive on the back of a strong competitive position. In Australia, the weather again impacted farmers’ willingness to invest in new machinery. Rain in important crop areas in South Australia and the south western part of Western Australia has come late resulting in lower than expected yields. Generally, the South Eastern parts of the country saw better weather conditions. From 2020 through 2023, Australia has experienced very strong market conditions with high yields, high prices and government subsidies to encourage farm machinery investment. This resulted in unnaturally high demand in those years and as a consequence, the farm machines are quite new and trade-ins pending. In Europe, the farm incomes are very mixed, partly as a result of large variations in weather patterns and yields. In the northern part of Europe conditions have generally been strong whereas some central and eastern parts have experience unusually low yields. Due to the aforementioned market conditions, stock at importers and dealers have remained high throughout the year resulting in cautiousness in placing new orders. Farmers also seem to have been reluctant to invest and the high level of investment activity in prior years appears to have created a subsequent vacuum in the activity related to investment in farming equipment. As a result of all of the above conditions, the revenue of the Company as well as for the HARDI Group reached its lowest level in many years. Earnings have decreased substantially, due to very tough market conditions and as a result of the below-mentioned realignment of HARDI Group and the consequential attention to quality, write-off of discontinued product and reorganisation of management and employees. Realignment of HARDI Group During the first part of the financial year, Management has developed HARDI Strategy 2030, which re-aligns our focus areas in the next five years. In the past six years, HARDI Group has re-structured critical areas of the supply chain. Production sites have been closed in Spain, the US and in France and besides an emphasis on optimising production flows and distribution, safety has become a key focus area. This focus will continue. However, Strategy 2030 sets out the course to transform HARDI Group into the global player it deserves to be by producing Intuitive, Accessible, and Reliable precision farming equipment. During the financial year 2024/25, the Company has aligned the organisation in key areas and initiated a number of actions to ensure execution of the Strategy. The key areas hereof are described below. 1. Safety, Customers, and Quality Safety remains our number one priority — for our people, our partners, and our customers. The Company will continue to strengthen satisfaction and loyalty by embedding net promoter score (NPS) as a key metric and by simplifying our product platforms for improved reliability and serviceability. Quality will be visible in every process, every machine, and every interaction. 2. Innovation and Market Growth The Company will reclaim growth by focusing on trailers and lift, while self-propelled complements our offering. By listening to our customers and utilising digital tools such as customer relationship management (CRM) and sales configurators, we ensure transparency and value at every step. Our product roadmap will combine incremental improvements with breakthrough innovations. 3. Culture and Accountability The Company will nurture a culture of ownership, accountability, and collaboration — where every team member contributes to results. This defines how we work and succeed together. 4. People, Planet, and Performance The Company’s success depends on our people. We will improve employee satisfaction, strengthen onboarding, and foster teamwork across departments and regions. Through our ESG commitment, we extend machine life via parts and service, while raising operating efficiencies to boost productivity and reach a 10% operational profit (EBITDA) by 2030. Production and product development Quality is at the forefront of everything we do. During the financial year, we have started to transform the quality mind-set throughout the value chain to improve quality in every delivery. To achieve this, the quality organisation has been strengthened as has our post-delivery service and support organisation. Delivery times remained satisfactorily throughout the year. Cost prices have been relatively stable after some years with drastic increases. We have continued the focus on improving efficiency which again this year has been more difficult than expected. The process of industrialising new products for local and overseas markets continue to be very challenging. This also combined with the general decline in orders causing a smaller scale of production output where efficiency level and targets have been very difficult to uphold. During the next fiscal year, the Company will introduce a completely new self-propelled machine and mark an important milestone after years of development. The design and production of this new machine is done in close cooperation with our sister division in France. The machine will initially be launched in Europe and later on the Australian and US markets. During the year, the Company has continued investments into new production equipment, which will improve efficiency in the coming years. We continue to evolve a product offering of the group with a focus on reducing chemical and water consumption during crop care and thus improve the TCO of our customers. New products are produced on a newly developed platform strategy following the re-alignment of our production footprint. We continue with the implementation and further development of a common new electronic platform prepared for customers’ future demand and this will create the future base for the entire Hardi group’s product range. Further, in Australia, during the year we have realigned the market strategy to focus on trailers and lift production and distribution. As a global initiative, HARDI Group will work to develop next generation precision spraying and intuitive, reliable and accessible trailers and lift-mounted machines. As a consequence, a strategic decision to stop production of self-propelled machines has resulted in complete realignment of our market approach. In future, we will sell and distribute European self-propelled units on the Australian market. This decision has been made to refocus on HARDI’s core competency, which is trailers and lift. Consequently, we have written off a substantial sum of current and pending inventory and provided the cost of the restructure in order reflect the true financial situation from the start of the coming financial year. During the final part of the financial year, in Australia we launched an upgraded trailer built on the European and North American platform. This work will expand in the coming year on other product families in Australia. Results and balance sheet Figures in brackets are for 2023/24 Revenue amounts to DKK 371.0 million (DKK 546.4 million). Gross profit amounts to DKK 28.0 million (DKK 56.2 million). EBIT including results of subsidiaries was DKK -102.0 million (DKK -47.5 million) corresponding to -27.5% (-8.6%) of revenue. Depreciation was DKK 9.8 million (DKK 9.2 million). Net financials were DKK -4.6 million (DKK -10.9 million) of which DKK 3.5 million (DKK 1.2 million) is due to exchange rate adjustments on receivables in foreign currencies. Result before tax was DKK –47.6 million (DKK -108.7 million) The balance sheet was reduced by 6.5% to DKK 384.6 million (DKK 411. million). Equity at 30 September is DKK 25.0 million (DKK 34.3 million) resulting in a solvency ratio of 7.5 (8.9). Uncertainty relating to measurement and recognition Deferred tax assets are measured at estimated realisable value. The value of tax losses carried forward has been assessed during the year and due to the past performance and the current uncertainties in the market the current tax loss has not been capitalised in 24/25. Capital funding and Liquidity resources It is Group policy to continuously ensure the existence of adequate financial resources. The liquidity risk is monitored by the utilisation of short-term credit facilities combined with long-term, fixed credit facilities with a number of banks and intergroup financing. On 30 September 2025, the Company recorded net financial debt of DKK 91.5 million (DKK 152.5 million) of which DKK 47.7 million (DKK 67.2 million) is long-term debt. The Parent, EXEL Industries S.A, will ensure that any needed interim financing is provided for the Group. Outlook After two years with continuous decline of our orderbook, we anticipate an activity level which will increase in the coming year. We see clear signs of an uptick in many European markets but the US and Australian markets continue to remain at historically very low levels. We expect to see continuous improvements in our European markets and our market shares as our Strategy 2030 is implemented albeit the latter will have limited impact in the coming year. In Australia, the fleet of farm machines are reaching an age now where replacements would normally take effect and coupled with new product launches on trailers in late 2025 and during 2026, we expect to see an increased interest in our product. The current interest rate has dampened capital investment demands and unpredictability in macroeconomic tendencies is adding further to the caution in the market. As stock levels at our importers and distributors are moving towards a lower level, we expect the product demand to increase slowly. We have the previous year invested in our production equipment to improve quality, safety and efficiency and we have investments planned for the coming year as well. From the beginning of the new financial year 2025/26, we have created an organisation for Global Innovation. This organisation is created with the intent to manage the ideas process, improve current solutions and identify transformative solutions for our customers in the medium to long term. In respect of management’s expectations for the coming year’s sales, based on order back-log going into 2024/25, we expect a difficult year with lot of uncertainty on in the markets. We expect an increase in activity with an estimated level of sales increasing between 15-25% but also expect improvement in efficiency and profitability. We anticipate a continued interest burden to affect the Company’s result leading to a negative result both before and after tax the coming year but still expect an improvement in both compared to 2024/25. The critical component in achieving these ambitions will be continued reductions in inventory levels at our importers and distributors as well as stability on price development of raw materials and components. Further, aforementioned realignment of strategic direction of the HARDI Group implemented during the current financial year is intended to drive renewed focus on customers’ needs for new and innovative solutions, being a leader on plant protection and application solutions. We do not envisage significant exceptional items in the next fiscal year and subject to stabilisation of market conditions, the result from operations including subsidiaries is expected to remain positive. Particular risks The activities of the Hardi Group are exposed to a number of financial risks. To the greatest extent possible, the Group tries to meet and to limit the risks that can be influenced by the Company through own actions. Financial risk Hardi Group’s international activities imply that the performance and equity of the Group are affected by financial exposure, including liquidity, interest rate, currency, credit and debtor risks. Financial instruments are not applied to mitigate financial risk. Currency risk Hardi Group is an internationally-oriented Group with a considerable currency exposure. In 2024/25, approx. 95% of the Group’s revenue was settled in other currencies than DKK (mainly EUR) which is close to 2024/25 (96%). Part of the currency risk is reduced to the extent that the Group has assets, equity and liabilities or operating expenses in foreign currencies equivalent to the sales in whole or in part. Credit risk The credit risk relating to cash and cash equivalents and ongoing financing is minimised by exclusively co-operating with financial institutions with a high credit rating. Debtor risk The Company’s trade receivables have – primarily due to reduced activity level in the last part of year – decreased to DKK 32,6 million at the end of September 2025 (DKK 39.9 million). The Company actively uses credit insurance or letters of credit to secure the trade receivables. Traditionally, the Company has experienced few losses and steps are taken to minimise the loss risk through a thorough credit rating and an extensive use of safe terms of payment. Interest rate risk The Company does not hedge interest rate risk. The Company’s interest rate exposure on interest-bearing receivables and debt to group companies fluctuates with EURIBOR floored at zero percent. A one percent increase in EURIBOR would lead to an increase in interest expense of approximately DKK 2.5 million. Liquidity risk The Company is not subject to financial covenants on its long term financing. Intellectual capital resources Knowledge of product and market Hardi Group works closely together with the final users of the Company’s products in order to build a knowledge of market demands. Together with information about competitors, regulatory initiatives, etc., this knowledge is currently directed to the Company’s headquarters in Denmark and contributes to the current product development and marketing. Knowledge management and knowledge sharing To ensure coordinated knowledge management and knowledge sharing, intranet and internet as well as the Company’s project management systems and manuals are used. Finally, a structured meeting activity across the functional areas and companies ensures that knowledge is currently exchanged. Staff development An ongoing development of the staff takes place in the Group based on the individual subsidiaries’ vision, mission and values. As part of the employees’ competence development, annual appraisal interviews take place with the aim of discussing future career prospects, tasks and training and education. Research and development activities The Company has a great focus on Research and Development. The past year the total cost for R&D was 34.2 mDKK as presented in the income statement. The expenses cover work to simplify products and features, improve quality and efficiency in our existing product portfolio as well as developing new features and framework for future products. In general we seek to improve quality and offer product that can contribute to reduce chemical usage within the farming industry. Events after the balance sheet date No events have occurred after the balance sheet date to this date which would influence the evaluation of this annual report.