Kilroy International A/S (Koncern)

Management’s Report

The Kilroy Group again delivered a positive resultfor 2023. Turnover increased to DKK 1,447 millionfrom a turnover of DKK 1,271 million in 2022.The operating profit (EBITDA) was DKK 44 million,compared with a profit of DKK 63 million in 2022.The profit before tax (EBT) was DKK 32 million.Consequently, the financial performance exceeded thetargets set for 2023. This achievement was primarilydriven by robust demand in the Danish market and anoverall increase in liquidity, which had a positive impacton financial items.The Board of Directors expressed satisfaction with theresult.The EBITDA development for the Kilroy Group is shownin the chart below.Market environmentThe beginning of 2023 saw the lingering effects of astrong post-pandemic demand, leading to traveldemand exceeding sales capacity in some of theGroup's markets. Consequently, efforts were focusedon expanding the sales organisation. However, as theyear progressed, customer demands normalised,requiring the full reinstatement of marketing activities bythe end of 2023.The Group’s turnover per market is illustrated in thechart to the right.DistributionCustomer behaviour in planning and making purchasesis increasingly diverse, and we recognise theimportance of providing a wide range of contact andsales channels for their discretionary use. However,personalised counselling remains central to ourapproach.The increased use of online meetings has become anintegral part of the Group's distribution strategy.Nevertheless, we continue to emphasise the value ofphysical presence, enabling customers to meetadvisors face-to-face.In 2023, the Group's portfolio of locations wasenhanced. In Denmark, Jysk Rejsebureau opened anew sales location in Odense. We signed a rentalagreement for a major new sales location in theVesterbro district of Copenhagen, and KILROY alsorelocated to larger premises in the city of Aarhus. InNorway, both BENNS and KILROY relocated to new,larger premises in the Nydalen section of Oslo.Furthermore, in the UK, KILROY opened a new high-street sales location in Bristol.M&A and structural changesThroughout 2023, several merger and acquisitionopportunities were explored but none were deemedviable.The Group remains committed to exploring any suchopportunities in businesses and assets that have thepotential to contribute and increase long-term growthand profitability.On the Danish market, the Group operates three travelbrands, BENNS, Jysk Rejsebureau and KILROY. Dueto mergers and acquisitions in the past, the activities ofthe three brands are embedded in two legal companies.Moving forward, it’s our intention to have each brand ina separate legal entity. These changes will take placestep by step and are expected to be fully implementedby the end of 2024.TechnologyA condition for the Group’s continued development isreducing transaction costs so we can focus employees’time on creating more value for our customers.Investments in technology, alignment of workprocesses and, not least, upgrading employees’competences are crucial for our long-term success.All sales units use the same IT platform, which pavesthe way for accelerating and unifying best practices.Our proprietary software is developed and maintainedin-house to ensure customer centricity, and to fast-track lead-time on critical development tasks. In 2023the propriety sales platform was strengthened byadding a new, advanced customer relationshipmanagement (CRM) system, “Salesforce,“ across allsales units within the Group.For processes where alignment and efficiency exceedthe importance of customer focus and differentiation, itremains a priority to use mainstream technology andcloud services in all parts of our systems infrastructure.This ensures our readiness for adopting the newestmarket trends and developments.EquityThroughout 2020 and 2021, the pandemic completelyeroded the Group’s equity, including free reserves ofDKK 100 million.Consequently, it was necessary to re-establish theequity and liquidity to a level that ensured that theGroup could continue operation. This was completed inApril 2021, and consisted of new capital from all currentowners, subordinated loans from EIFO (Export &Investment Fund of Denmark) and the majority owner.The management expects to continue the restoration ofequity to the pre-pandemic level by means of earningsin the coming years.With the profit in 2022 and again in 2023, the Group hastaken important steps towards this restoration and atthe end of 2023, the equity was again positive.The Board proposes that no dividend be paid for 2023.Future dividends will be proposed according to thegovernance associated with the subordinated loans, aswell as the Kilroy Group’s expansion plans,consolidation, and liquidity requirements.The development of equity is shown in the chart to theright.Shareholder information & annual reportThe ownership structure remained unchanged in 2023as the Danish company, SSTS A/S, holds 100% of theshares in Kilroy International A/S.SSTS A/S currently has no other activities than theownership of the Kilroy Group. The company is ownedby a group of Nordic investors who have, or have had,management positions within the Group. Within theownership of SSTS, the majority owner,Eignarhaldfelagid Kilroy ehf., acquired 6.9 % of theshares from the Estate of Tapio Kiiskinen in 2023.Detailed information about the group of owners can befound in note 17.The Annual Report of Kilroy International A/S isincluded in the Annual Report of SSTS A/S.The Annual Report of SSTS A/S can be obtained fromSSTS A/S, Nytorv 5, 1450 Copenhagen K, DenmarkAuditingGrant Thornton is the main auditor of the Group.