Carsoe Seafood Aps

Management's review

Key activities Carsoe Seafood is a leading global provider of niche processing equipment and services for the onboard seafood and food processing industries. Carsoe Seafood’s activities comprise product development, manufacturing, engineering, installation, and service Development in the year Carsoe Seafood continued to supply customers globally with our market leading solutions in 2023. Carsoe Seafood managed to win several new large and medium-sized green-field contracts. The contracts are geographically diverse and in line with the core offering of Carsoe. Besides the new, large contracts, Carsoe Seafood has successfully continued to grow its aftersales segment and strengthened sales of its standard product portfolio. Carsoe has further consolidated its operational footprint and focused on strengthening core business operations. This includes strengthening supply chain resilience, engineering efficiency, product standardisation and innovation. In addition, the data foundation has been strengthened for improved financial transparency and operational planning. The past year and follow-up on development expectations from last year The income statement of the Company for 2023 shows a profit of TDKK 41,464, and at 31 December 2023 the balance sheet of the Company shows a positive equity of TDKK 57,567. Special risks - operating risks and financial risks Operating risks Carsoe Seafood’s most significant operating risks relate to its ability to gain and retain client relations, key employees and always to be at the forefront of technological development within Carsoe Seafood’s business areas. Refer to the sections Knowledge resources and Research and development activities below for information on how Carsoe Seafood work with knowledge and development. Financial risks The Group does not hedge the currency rate between Danish Krone (DKK) and the Euro (EUR) as this rate is fixed. Exposure to other currencies is limited, as euro is used as the main contract currency. Currency adjustments of investments in subsidiaries which are independent entities are recognized directly in equity. As a main rule, currency risks related to the investment in subsidiaries are not hedged, as Carsoe Seafood regards these as long-term strategic investments that are not affected by short term fluctuations in currency rates. Carsoe Seafood’s worldwide activities imply a credit risk in connection with sales to customers. We take measures to hedge our exposure, for instance by introducing letters of credit. Targets and expectations for the year ahead In 2024, Carsoe Seafood will continue investing in and executing on its profitable growth plan, while improving its operations to increase long-term margins. The Company expects the results for 2024 to be in the range of MDKK 10-14. Carsoe Seafood has a proven ability to grow into new markets and offer new sought-after solutions to its customers. Carsoe expects to continue strengthening its position in the consolidating market for onboard turnkey seafood processing solutions, including through a stronger aftermarket offering, while expanding its presence within new niche segments and actively selling its products standalone. The continued market uncertainty and economic conditions, especially the interest rates may affect the demand for the products and solutions offered by Carsoe Seafood in 2024. Research and development Our research and development activities are primarily carried out at the ead offices in Denmark. Development activities include the development of equipment and solutions within Carsoe Seafood's business areas. A total of 9 FTEs was allocated during the financial year to development activities, with a particular focus on standardisation, automation, and leveraging the inhouse competences across all product capabilities. Intellectual capital resources Carsoe Seafood is dedicated to supplying cutting-edge equipment and installations for manufacturing and processing in the food and seafood sectors. This demands a wealth of knowledge resources, including the expertise of our employees and fine-tuned business practices, with focus on engineering, project management, and aftermarket services. Attracting and retaining top-tier talent is pivotal for Carsoe Seafood's success. Our commitment to Environmental, Social, and Governance (ESG) efforts plays a crucial role in this regard, as it is increasingly recognized as a primary factor for individuals seeking employment. We continuously cultivate a robust company culture centred on collaboration, innovation, and ongoing improvement, fostering a work environment that is both positive and engaging. Advancing in our ESG journey, we've reached a point where we can effectively communicate our ESG initiatives both internally and externally, enhancing our attractiveness to prospective talent. Environment and climate Carsoe Seafood is dedicated to promoting sustainable practices within the fishing industry, prioritizing the responsible management of global fish resources. Our commitment extends to developing products and systems that ensure high-quality results while minimizing waste. We recognize the importance of both environmental protection and ethical business strategies in maintaining long-term success. Our aim is to implement an ethical business strategy that not only benefits our customers, but also our staff and society as a whole. For Carsoe to continue its success as a leading seafood processing company, it must establish a business model that can endure over time. It is crucial for businesses to prioritize both environmental protection and effective risk management to operate sustainably. Carsoe's business activities, in the seafood industry, entail several significant material risks to the environment and climate. These risks primarily stem from resource consumption, waste generation, energy usage, and potential impacts on marine ecosystems. We seek to manage/mitigate these with the following commitments: •Carsoe Seafood manufactures and distributes products in Denmark, the US and Norway. The company recognizes the importance of addressing the environmental impact in terms of waste and CO2 emissions•Mapping and reducing our CO2 footprint (Scope 1, 2 and eventually scope 3 (Screening) through the GHG protocol.•Our current solutions aim to enhance traceability and effectively monitor fishing quotas.•Enhance the process of handling and disposing of waste, decrease the amount of residual waste, and increasing the utilization of purchased materials and goods.•Enhance the longevity of products by retrofitting, servicing, and repairing machines and production lines that are already in use, with a focus on life cycle and disposal of our machinery.•Minimize the utilization of non-renewable energy sources. •Contribute to minimize climate and environmental impact per kilogram protein, by improving energy efficiency and integrate selected process and performance to enhance productivity. With measurable goals based on the ESG agenda, Carsoe Seafood has formulated a comprehensive environmental policy that will be completed by 2024. Integral to the organization's goals regarding product quality and manufacturing facilities, the strategy is founded on environmentally responsible practices.Monthly meetings of the ESG groups are held to review the development of ongoing initiatives and activities. In addition to their strategic efforts, Carsoe begun an initiative concerning the organization's policies and procedures in 2023. Corruption and bribery Carsoe Seafood maintains a strict zero-tolerance policy against corruption and bribery, and we take all necessary measures to prevent such risks in our business relationships. Any suspected violations of this policy are thoroughly investigated. To ensure compliance with our core values and Code of Ethics, the group has developed written compliance guidelines and policies that contains our anti-corruption policies, as well as policies related to Supplier Code of Conduct, money laundering, export control, and international trade sanctions. Our executives are required to confirm their compliance with these policies every three months. Our Code of Ethics requires employees to act with integrity and uphold acceptable ethical standards for human rights. To mitigate risks associated with our business partners, Carsoe Seafood has a Supplier Code of Conduct that sets out the same requirements for our suppliers of goods and services. Throughout the financial year 2023, management remained vigilant, diligently monitoring for any signs of non-compliance. No breaches of the stringent compliance rules were detected, affirming the effectiveness of the established procedures and controls. Carsoe Seafood is poised to uphold its reputation for integrity while navigating evolving regulatory landscapes with confidence and integrity, securing anti-corruption and bribery is top of mind in all business affairs. Carsoe Seafood does not foresee any material risks related to corruption and bribery and processes as policies have been calibrated to mitigate these concerns effectively, aligning with our commitment to compliance with rules and regulations Human rights Our Code of Ethics requires employees to act with integrity and uphold acceptable ethical standards for human rights. To mitigate risks associated with our business partners, Carsoe Seafood has a Supplier Code of Conduct that sets out the same requirements for our suppliers of goods and services. If a supplier violates our rules, we will work closely with them to help improve business standards and employee well-being. However, Carsoe Seafood reserve the right to terminate contracts with suppliers who intentionally violate our rules and refuse to cooperate in implementing planned improvements. In the 2023 period, we did not identify any breaches of our Code of Ethics or Supplier Code of Conduct, and we are committed to maintaining our current procedures in the future. Employees Achieving the company’s strategic and financial targets depends on our employees and their skills and commitment. The escalating complexity of the business landscape, coupled with an evolving competitive environment and the pervasive impact of digitalization, has heightened the demand for proficient employees and executives. Therefore, it is vital for Carsoe to fortify our position for the most qualified individuals. With this objective in mind, several key actions have been implemented. In 2023, we initiated a new setup that aimed at enhancing our performance appraisals, refining management training, and optimizing course selection. Additionally, we formulated a new set of values to clearly articulate Carsoe’s purpose and foster a sense of belonging among employees. Furthermore, 2023 marked the initiation of Carsoe's inaugural well-being study, an exercise expected to be repeated in 2024, revealing a workforce that is both content and motivated, affirming our dedication to prioritizing employee welfare and fulfilment. Carsoe Seafood does not foresee any material risk in connection with employees when comes to the overall well-being or motivation and the expectation is that employee wellbeing will continue on the current high levels. The company's policy for working with Social and Personnel Affairs is maintained and communicated through both the company's personnel handbook and its compliance policy. Carsoe's strategy includes developing young talents through apprenticeship programs, and actively engaging in dialogues with youth and vocational schools to serve as an active partner and an integral part of the surrounding community. Skills and competencies The skills and ideas that our talented employees bring to the table are crucial to our success. We endeavour to foster a collaborative, innovative, and resourceful culture where each of our team members can bring their best selves to work. In 2023, we successfully concluded training programs that specifically targeted the enhancement of skills relevant to our employees' job function. Management training Management training is conducted for various reasons. Managers often encounter complex and critical decisions, requiring effective prioritization to optimize team performance. In alignment with this objective, we have initiated the enrolment of our middle managers in communication and leadership courses designed to enhance their skills in leading and managing employees. Recognizing the importance of effective communication, we understand its critical role in enabling managers to convey expectations, provide constructive feedback, and cultivate a positive work environment. Employee survey Employee turnover poses significant risks, both financially and in terms of overall productivity. Conducting an employee survey can help us identify areas for improvement and develop strategies to enhance workplace satisfaction. It was crucial for us that the survey provided a structured way for our employees to share their thoughts, opinions, and concerns. As part of our ongoing efforts to ensure we support and develop our workforce, we conducted an employee engagement survey in Denmark (DK), ensuring anonymity and focusing on job satisfaction, engagement, and other factors. Our 2023 employee engagement survey indicated a high level of engagement and a strong emphasis on teamwork. However, it also highlighted the need for attention to performance management. This transparency enables us to work strategically on areas that require improvement. Enhanced focus on sickness absence We have increased our emphasis on managing sickness absence and remain dedicated to supporting individual employees facing health difficulties. It is crucial to adopt a fair and consistent approach, offering support to employees while ensuring their eventual return to work. To facilitate this, we have developed a tool for collecting data on sickness absence, resulting in a Bradford score for each employee. This tool serves as a communication aid for managers to take early action if an employee's absence rate starts to rise, providing an opportunity to implement preventive measures before it escalates into prolonged sickness absence. Uncertainty relating to recognition and measurement There has been no uncertainty regarding recognition and measurement in the Annual Report. Unusual events The financial position at 31 December 2023 of the Company and the results of the activities and cash flows of the Company for the financial year for 2023 have not been affected by any unusual events. Subsequent events No events materially affecting the assessment of the Annual Report have occurred after the balance sheet date.