Gram Equipment A/S

Revenue for 2022 amounts to DKK 936 million against DKK 754 million last year. EBITDA amounts to DKK 77 million against DKK 77 million last year. Result for the year after tax amounts to DKK 60 million against DKK 68 million last year. The results were negatively affected by the global supply chain crisis.
During 2022, we experienced price pressure on raw materials and components due to the global supply chain and inflation crisis which resulted in decreasing operating margins. We also experienced a normalization of order intake from the very high level in 2021 driven by the aforementioned boost from the COVID-19 pandemic in segments of the market - especially the take-home segment - where Gram Equipment has its core business.
During 2022, we kept working with key suppliers to try and mitigate the impacts from the global supply chain crisis.
Foreign branches
The parent company has a registered foreign branch in Norway, Gram Equipment Norge.

Data ethics
We comply with all legal requirements but acknowledge and respect that our use of data (both personal data and nonpersonal data) may create risks for the users that applicable laws do not cover. We manage these risks as described below.
We strive for high data ethics standards for the use of both personal and non-personal data. This can only be done by upholding and communicating transparency and openness concerning our data and ensuring that the data principles remain clear, understandable, and easily accessible. We set high standards in collecting data from other sources and our operations. We have mandatory IT safety awareness training for all employees covering ethical standards for data from external and internal sources.
Risks
To continue improving our understanding of our general risk level, Gram Equipment has during 2022 further worked on its Enterprise Risk Management system (ERM) that was implemented during 2021. The system is designed and developed to focus on five main risk arears: Strategic, Financial, Operational, Hazard and Compliance risks. All identified risks will be reported in the ERM, where all follow up will take place.
Credit risks
The primary credit risk for the Group is that customers fail to pay the amounts they owe for products and services delivered to them by the Group. The Group’s customers are predominantly large, international blue-chip producers of ice cream with excellent credit ratings, high solvency ratios, spread across several geographical markets. This provides for a natural hedge of credit risks.

To limit its credit risks further, the Group’s credit policies contain guidelines and regulations for assessing credit risk of new customers, payment terms and procedures and processes for handling outstanding claims. All sales orders, where a certain credit risk is expected, will be covered through letters of credit, prepayments and/or other security.
Currency risks
The Group sells its products and services globally and invoices predominantly in EUR and USD. Further, the Group has significant receivables and payables in those currencies. Consequently, the Group is exposed to currency development between EUR/DKK and USD/DKK. The Group benefits to some extent from natural hedges due to EUR and USD denominated costs and its establishment in the US. Management assesses hedging of foreign exchange exposure on a case-by-case basis, while the EUR exchange rate risk is regarded as low because of Denmark's fixed exchange rate policy towards EUR.
Project risks
A significant part of the Group’s revenues relates to delivery of larger turnkey projects (equipment machinery for production of ice cream). Therefore, it is important that the Group has controls and procedures in place to ensure proper project governance and financial control. Proper project governance and financial control procedures have been implemented in the organization, which has significantly reduced project risks within the Group.

During 2022 the projects execution has been impacted by the supply chain crisis and the shortage of components.
Liquidity risks
Following the supply chain situation and the negatively impacted turnkey projects, the Group experienced postponed milestone payments, which together with increased inventories have resulted in rising net working capital and negatively impacting liquidity during 2022.

The Group's ability to manage customer contracts, including, among others, ensuring timely fulfillment of milestone conditions and collection of payments, is important to manage the Group's liquidity.

Interest risks
The Group’s financial debt is denominated in EUR with a EURIBOR floating rate. The floating rate is currently not hedged. Gram Equipment’s interest rate risk is moderate. Interest rates increased significantly in Europe during 2022 which also impacted the Group´s interest payments. Given the high inflation in the world currently there is still a risk that the interest can increase further, but the likelihood is decreasing with the recent drops in the inflations rates in Europe and USA.
Special risks
The war in Ukraine and the ongoing supply chain and inflation crisis poses a risk for Gram Equipment. Both as a direct risk in our ability to get the materials and components we need, but also indirectly as this can impact the global economy and our customers’ needs for investments in new ice cream production equipment. The potential prolonged effects on the Group’s profit and financial position will naturally depend on how this situation with continue to unfold, which is unknown at the time of this report.
Non-financial matters
Gram Equipment’s strategy is to be ice cream producers’ preferred supplier of equipment and process solutions, with emphasis on quality, efficiency, on-time delivery, and value-added services. At the same time, Gram Equipment wants to be an attractive employer, as well as a fair and good customer of its suppliers.