Desmi A/S (Koncern)

Beskrivelse af virksomhedens væsentligste aktiviteter

Primary activities
The Group designs, produces, markets and services pumps and pumping systems, environmental equipment and solutions related to these.
The Group’s activity is divided into the business segments:
Marine & Offshore
Industry
Oil Spill Response
Defence & Fuel
Utility
The product range, which is completed by agency products from globally leading manufacturers, is also supplemented by associated services in the form of complete design and installation of pumping systems including automation/controls and aftersales service through the well-developed group network of subsidiaries and service centers.
Annual Activities
DESMI Group revenue reached DKK 1,953 million in 2023 and increased by 4% compared to 2022. The revenue from Ballast Water Management Systems (BWMS) declined as expected in 2023 as the deadline for mandatory retrofit of BWMS nears the deadline in the fall of 2024. The revenue from the Group’s other product areas within pumps, flow control and environmental equipment has a whole increased significantly in 2023 ensuring overall revenue growth.
The Group improved or maintained its market position in the pump and flow control business to the Marine & Offshore, Industry, Defense and Utility segments and maintained its market position in the environmental equipment for oil spill response and sargassum removal thereby increasing revenue in these business areas significantly (by 25%) in 2023. Contributing to the growth was continued strong growth in the aftersales business comprising spare parts and aftersales service. This is an area where the Group over the latest years have focused on developing and widening its offering to customers.
The BWMS market declined in 2023 due to the expected decline in the retrofit market with the deadline for installation of retrofit BWMS in September 2024. However, the Group has continued to improve its market position also in 2023 by continued development of its offering and dedicated sales efforts. In total, revenue from BWMS declined by 28% in 2023. Although it will be at a lower revenue level, the BWMS market is expected to hold long term opportunities from the newbuild and service business also after the end of the mandatory retrofit period.
The global supply chain situation which affected 2022 negatively improved in 2023. The global supply chain stability and performance is still not fully back to pre-COVID 19 pandemic, however, with a strong focus on managing the challenges in 2023 by the DESMI organization, the improvements in the Group’s supply chain and logistics had a positive impact on gross profit relative to 2022.
During 2023, the Group has focused on improving operations and our global processes – with a particular focus on, among other, working capital improvement, logistic improvements, lead-time reductions, commercial excellence, and product life cycle management. This has contributed to the revenue growth, to the improvements in gross profit and to a significant reduction of working capital.
Also, during 2023, the Group developed an ambitious growth strategy for 2024-2028 – “Unleashing the full potential”. The strategy aims at both organic and inorganic growth within a number of – both existing and new – target verticals. The strategy is expected to lead to strong growth in the 2025 to 2028 period. To achieve these growth ambitions, the Group has increased its cost base in 2023 and will continue to invest into e.g. new product development, commercial setup, IT infrastructure and uniform global processes.
Driven by the growth in revenue and gross profit, the Group has increased earnings (profit for the year) by 10% over 2022

Beskrivelse af udviklingen i virksomhedens aktiviteter og økonomiske forhold

Development in activities and financial affairs
The profit for the financial year 2023 amounted to DKK 167.1 million after tax compared to DKK 152.4 million in 2022. The equity amounts to DKK 727.7 million at the end of 2023 compared to 574.9 million at the end of 2022. The revenue in 2023 meets the expectations for the year while the profit for the year exceeds expectations and is considered satisfactory.
Financial Resources
The Group generated strong operational cash flow in 2023 via strong earnings and significant working capital reduction. Cash flow from operating activities amounted to DKK 343.9 million in 2023 compared to DKK 13.5 million in 2022. The net investments in fixed assets amounted to DKK 11.8 million in 2023 compared to DKK 9.8 million in 2022. Given the strong cash generation in 2023 and a strong cash position, the Group considers its financial resources to be more than adequate.

Omtale af betydningsfulde hændelser, som er indtruffet efter regnskabsårets afslutning

Subsequent events
No material events with effect for the annual accounts have occurred after the balance sheet date.

Beskrivelse af virksomhedens forventede udvikling

Outlook
Given the expected decline in the BWMS business in 2024 as the mandatory retrofit period nears its end, the Group expects lower revenue in 2024 compared to 2023. The cost base is expected to increase in 2024 for executing the Group’s growth strategy – which is expected to lead to significantly higher revenue from 2025 onwards. Therefore, the profit for the year is expected to be at a level of approximately DKK 125 million in 2024.