Cwt Denmark A/S

Development in activities and financesThe worldwide pandemic resulting from the spread of the COVID-19 virus, and the subsequent slow, protracted recovery has caused a significant interruption to the Company’s business, beginning in March 2020. The Company management has taken decisive cost reduction and cash management actions to mitigate the impact on the Group and Company’s liquidity and financial position, including the CWT Group entering into a Chapter 11 process in the US in November 2021. In addition to the Group Chapter 11 process in late-2021, local actions have been taken to mitigate the volume reductions seen as a result of the pandemic and subsequent start of the recovery.

During Danish lockdown periods the Company has demonstrated that its internal policies, procedures, and technology have allowed it to continue normally with remote working, continuing to support its clients and staff. The Directors anticipate further returns to office working as the impacts of the Covid-19 pandemic continue to subside, but remote working remains an option for the longer term, aligned with government guidance.

Competition within the Danish business travel market continues to be a risk to the company, with global pressure on travel spends causing potential market and margin reductions. The company addresses these risks by maintaining a diversified client portfolio, continuing to increase its range of offered services, forging stronger business relationships with both clients and suppliers, and being focused on managing its working capital.

Macro-economic conditions have a direct impact on client, and wider industry behaviours. The overall level of business travel activity can be negatively impacted by economic recessions or similar periods of reduced spending. Current economic predictions for Denmark anticipate a slow GDP growth rate in 2023 which could negatively impact revenues in the market, further slowing the recovery from the Covid-19 pandemic. Longer-range projections are more positive.

There has been a recovery within the CWT Denmark in 2022 when compared to 2021 performance. The main driver has been improved volumes from key strategic clients that were maintained by the business through the pandemic period. With continued focus on costs management, the improved topline volumes seen in the business have increased revenues and corresponding income with losses significantly reduced in 2022. Both gross transactions and gross sales showed growth well above +100% year-on-year in 2022.

The continuing situation in Russia and Ukraine is not expected to have a direct impact on the CWT Denmark A/S business. The global CWT group has no owned operations in Russia, and the CWT Ukraine business is not material to global results.
However, it is not yet known with any certainty what longer-term impact the energy supply crisis and the war in Russia and Ukraine may have on European and global economies.

The Company remains focused on its core strategies in the longer-term, and continues to invest towards these goals, as evidenced by the announcement of a global $100M investment by the CWT Group in the myCWT travel management platform.
However, with the reduced trading levels in YTD 2023 compared to the 2019 pre-pandemic baseline, CWT will remain focused on controlling expenditure, and managing working capital efficiently until there is more certainty around the emergence from the pandemic.

The Board of Directors have concluded that it is appropriate to prepare the financial statements on a going concern basis. We draw attention to Note 1 in the Financial Statements.