Fayard A/S

Ledelsesberetning

Key activities Fayard A/S is a maritime service company primarily engaged in service, maintenance, retrofits and conversion of ships. Its customers are all over the world. Development in the year The Company’s revenue for 2023/24 was TDKK 1,324,876 compared to TDKK 1,108,456 last year. The income statement for 2023/24 shows a profit of TDKK 231,733 compared to TDKK 137,035 last year, and the Company's balance sheet at 30 September 2024 shows equity of TDKK 182,462 compared to TDKK 187,729 last year, which is considered very satisfactory by Management taking the current market into consideration and compared to the Company’s expectations for the year.The realized result deviates positively from the expectation due to enter of new orders after the end of the previous financial year, which have contributed positively.There are engaged approx. 900 people at the yard throughout the period. Of these 145 are directly employed by Fayard A/S, the rest is engaged by business partners. Targets and expectations for the year ahead The management expects a profit before tax next year in the range of DKK 80-100m, but this estimate is associated with some uncertainty. In addition to the financial objectives, there will be a focus on strengthening internal processes and cooperation with suppliers to ensure high quality and responsibility throughout the value chain. Furthermore investment in employee development and optimization of internal work processes to strengthen the company's organizational foundations is prioritized. At the same time, sustainability and a green transition to meet society's expectations about environmental responsibility is at the top of the agenda. These initiatives must support long-term, balanced growth that creates value for both the company and its stakeholders. Intellectual capital resources Fayard A/S employs a significant number of apprentices, which aligns with the shipyard's focus on ensuring the necessary workforce at various levels within the company moving forward. This is also essential for future-proofing the workforce at the shipyard and in the shipyard industry in general. Fayard A/S also focuses on engaging regular partners to secure apprenticeship placements for apprentices. As part of this commitment, Fayard A/S has established an apprentice workshop during the fiscal year. The workshop serves as a supplement to the training apprentices receive at vocational schools and has been created in close collaboration with these educational institutions. Fayard A/S considers the education of the next generation to be one of the most important societal tasks both locally and nationally. This is reflected in the hiring of apprentices in various trades, while the company also begins to employ younger generations in other roles. Emphasis is placed on skills development through training and courses to ensure that employees develop professionally and contribute to the continued operation of the shipyard. Fayard A/S also prioritizes other internal development among employees within the organization. Additionally, Fayard A/S is an active partner in the LSP (Center for Large Structure Production) project at the University of Southern Denmark. Fayard A/S has a goal that 10% of the workforce among the hourly employees who work at Fayard A/S must be apprentices. The objective was met on the status day. After the end of the financial year, additional apprentices were hired. The target of 10% is maintained for the coming financial year. *Environmental and climate risks:* With its production activities in mind, Fayard A/S works on limiting its impact on the environment and climate. Fayard A/S acknowledges that environmentally conscious management is crucial for a sustainable business. The company has developed an environmental policy and an ESG policy, which are based on environmentally responsible operations. This applies to both the use and disposal of materials and wastewater. Consequently, continuous investments are made in environmental improvement measures. The company also recognizes the requirement for mandatory energy audits and climate assessments in accordance with Regulation 761 of 18.06.2024. All significant risks and corrective actions are described in our section on ISO 9001/14001/45001 standards. Under the ISO 14001 system, you will find up-to-date safety data sheets on all chemicals to which all users have access 24/7. Our ISO 9001 certification was last renewed in March 2021, and ISO 14001 was renewed in May 2023: Fayard A/S is newly certified ISO 45001 in June 2023. Through our ESG efforts, we focus on the risks associated with the environment and climate. Among the identified risks are severe weather conditions such as extreme high tides and floods, which can affect the power supply. We have implemented and tested measures against these challenges, and they have proven effective so far. Additionally, we are working diligently to ensure supply security by phasing out old installations. This effort is an ongoing process that we prioritize to minimize operational risks. These factors are considered significant risks, even though operations are under control, and they are continuously prioritized to ensure ongoing improvements. The risks associated with discharges are assessed as limited due to the considerable focus and professional management of such risk by carrying out work in dry docks in closed-loop systems whereany impact on the environment is encased. We expect to keep focus on this area in the next financial year. Fayard A/S is committed to continuously reducing resource consumption and minimizing the impact on the external environment. The company actively explores the market for new technologies that can ensure environmentally efficient work processes. Internal energy-saving measures are a significant part of this effort, with a focus on managing waste, wastewater, and oil from ships. This contributes to optimal resource utilization, aiming to minimize waste and reduce the company's emissions as much as possible. For example, diesel plants have been phased out in favor of electric plants, resulting in a 50% energy saving. To contribute to the reduction of overall CO₂ emissions and noise levels, Fayard A/S offers all ships arriving at the shipyard the option to use shore power from mobile shore power units, where technically feasible due to the infrastructure in the area. Approximately 47.9% of the ships use shore power during their stay, ensuring a more environmentally friendly energy source than what the ships' own generators can produce. This reduces both emissions and noise in the area. Fayard A/S develops its business by actively servicing, maintaining, and installing products to improve efficiency and climate impact in the maritime sector, which is reflected in Fayard's resource consumption. By implementing solutions that optimize ships' energy efficiency and propulsion, Fayard A/S helps reduce the environmental impact of individual ships. After their stay at the shipyard, many ships achieve more fuel-efficient operation and lower environmental impact. Additionally, Fayard A/S enhances the overall environmental profile of shipping by providing services that reduce ships' fuel consumption and emissions through energy-efficient measures. The company ensures that its solutions meet the applicable regulatory requirements, including EEXI and CII regulations, thereby contributing to a more sustainable maritime industry. Fayard A/S has also intensified its work with products such as silicone paint, which can reduce ships' fuel consumption. The number of ships and the treated area with silicone paint have increased from 2022/23 to 2023/24. These energy-saving and efficiency-improving measures are continuously communicated on our website through updated brochures with new initiatives, to inspire interested parties to consider similar energy-saving measures in the maritime industry. Additionally, Fayard A/S has established an ESG project to collect consumption data covering scopes 1, 2, and 3, in order to measure the total CO₂ emissions from Fayard A/S's activities. As part of the project, work has commenced on a double materiality analysis to assess the relevant data points within the ESRS standards in accordance with the requirements of the CSRD directive. The aim of the project is to prepare comprehensive ESG reporting with relevant data, even though Fayard A/S is not yet subject to legal requirements in this regard. Fayard A/S holds a comprehensive environmental approval and has no unresolved issues with environmental authorities in the form of injunctions or prohibitions. The environmental approval is extensive and of recent date compared to similar environmental approvals in Denmark and Europe. *Risks related to social and employee matters:* Fayard A/S is focussed on a healthy and good working environment. Attention is generally paid to safety and current legislation on the working environment in the workplace. The risk of occupational injury is assessed to be low for the industry, as the Company is subject to formal regulation of ordinary work and industry standards, of which safety is an integrated part. Safety will remain a focal point in the next financial year. Occupational hazards also pose a risk, but Fayard A/S continuously works to ensure proper and safe working conditions. Compliance is a central part of our efforts, especially related to occupational health and safety, which is a particular focus in Fayard A/S's code of conduct applicable to work performed by Fayard A/S and on Fayard A/S's premises. Fayard A/S has a range of policies related to social matters, including a mental health policy, health and safety policy, occupational health policy, and ESG policy. Continuous monitoring of compliance with occupational health and safety regulations and good practices is central to ensuring they remain part of the regular routines. Based on this, Fayard A/S gives priority to thorough planning and organisation of all work assignments to create optimal conditions for the Company's employees during their performance of the work. Fayard A/S has established both a working environment committee and a cooperation committee, each contributing to the company's development and well-being. The working environment committee is responsible for ongoing follow-up on compliance and improvement of Fayard A/S's policies, with a particular focus on occupational health, well-being, and safety. Meanwhile, the cooperation committee, consisting of representatives from both daily management and employees, ensures close dialogue on potential improvement measures. The committee meets quarterly to discuss and summarize input from significant parts of the organization. Additionally, Fayard A/S takes great social responsibility by offering its employees assistance with health treatments and other support schemes. The working environment is of high priority throughout the Company. The employees constitute the Company's most important resources and are a prerequisite for success. In the past financial year, work continued on reducing the number of occupational accidents through regular follow-up, including instructions and training of staff. In addition, action plans have been prepared that address identified risks and ensure a systematic effort to improve the working environment. The number of accidents has been decreasing in the financial year, from 33 incidents in 2022/23 to 25 incidents in 2023/24. Fayard A/S's clear objective is to avoid any occupational accident and work is continuously being done to reduce cases of illness to a low level. Fayard A/S works on the basis of a safety manual, which is updated continuously, to which further instruction has been initiated for its own employees, regular business partners and subsuppliers. Fayard A/S has maintained a strong focus on reducing employee absence over the past fiscal year. In the fiscal year 2022/2023, the absence rate was at 5.21%, while in 2023/2024, it was reduced to 3.79%. This represents a reduction of 27.26%, reflecting the company's targeted efforts to improve employee well-being and working environment. Fayard A/S has a health policy that includes offering healthy meals in the canteens and prompt follow-up and action on employee absence. All employees are offered health insurance. *Respect for human rights and risk of human rights violation:* Fayard A/S respects internationally recognized human rights and operates in accordance with the UN Global Compact, including principles for anti-corruption and ethical business practices. The company has a zero-tolerance policy towards corruption, bribery, money laundering, and extortion, and promotes responsible behavior in all aspects of its operations. Fayard A/S regularly undergoes customer audits, which include assessments of working environment, safety, and anti-corruption, and there are no unresolved issues related to these audits. Fayard A/S is an international operator and ensures compliance with applicable legislation. Fayard A/S does not accept work which is in violation of fundamental human rights. The risk of violating human rights is primarily associated with our use of suppliers who may not comply with applicable national laws and international standards. However, we assess this risk to be minimal, as Fayard A/S operates in countries with strong support for human rights. In 2023/24, no reports of human rights violations were received by the Company or its business partners, including during ISO 9001 audits by customers. We will continue this work in future. Please also refer to Fayard A/S' Code of Conduct on www.fayard.dk. *Risk of corruption and bribery:* Fayard A/S is an international operator who neither tolerates corruption nor bribery. Such conduct is moreover not accepted by Fayard A/S. The risk of involvement in corruption and bribery is primarily associated with our use of suppliers who may not comply with applicable national laws and international standards. However, we assess this risk to be minimal, as Fayard A/S operates in countries with a low risk of corruption. In 2023/24, no information was received about any cases of corruption or bribery in the Company or at business partners. Fayard A/S naturally complies with all relevant legislation, and to ensure this, a code of conduct has been prepared (available to everyone on www.fayard.dk), which provides ethical guidelines for our employees and subcontractors on how to act with respect to, for example, child labour, discrimination and corruption, etc. Employment contracts of the Company’s staff include the employee’s obligation to read and follow the Fayard A/S Code of Conduct. Once a year, subcontractors of Fayard A/S confirm their compliance with the Company’s Code of Conduct. Finally, in continuation of the above, it should be noted that, in 2022, Fayard A/S implemented a whistleblower scheme allowing employees to report issues anonymously. In 2023/24, no inquiries were received via the whistleblower scheme. 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 30 September 2024 of the Company and the results of the activities and cash flows of the Company for the financial year for 2023/24 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.