Precision Technic Defence A/S

Development in activities and financesThe company experienced a very positive development, with key figures showing significant progress.
The annual financial statement for 2022/2023 showed a turnover that was 16% lower than the revised budget. However, the turnover increased by 163% compared to the 2021/2022 fiscal year.

The global situation affected our business, and the two primary areas of impact were:

Suppliers/Partners
Many of our suppliers and partners are affected by the war in Ukraine. This has and will continue to have an impact on the global supply chain, leading to significant price increases and delays in deliveries.

On some of our existing framework agreements, we are experiencing price adjustments from suppliers that are not regulated according to the contract. This presents challenges when negotiating extraordinary price increases with the Danish Ministry of Defence Acquisition and Logistics Organisation (DALO)
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Therefore, we need to have a greater focus on this aspect in relation to the supplier even before entering into a contract with DALO, ensuring that the supplier understands and accepts the most essential/unconditional requirements and conditions that are decisive for the framework agreement (rules for price adjustments, delivery times, minimum orders, potential penalty sizes, etc.). The longer the framework agreement, the more important it is for the supplier to be aware of the conditions.

Rising component costs
The worldwide component shortage had a significant price impact on raw materials such as connectors, active and passive electronic components. These components had, on average, increased by 10-30% over the past year, but we also saw price increases of over 100% for certain components. Unfortunately, this has had a significant negative effect on our procurement prices.

It mainly affected some of our existing framework agreements, where the company is bound by contractual terms and conditions. To mitigate significant losses on several item numbers, the company had to request extraordinary price adjustments the Danish Ministry of Defence Acquisition and Logistics Organisation (DALO) to bring sales prices to an acceptable level.




The war in Ukraine
The war in Ukraine had a major impact on our procurement prices, with significant increases on many different products. We attempted to cover some of the increases in our sales prices, but where it was not possible, we had to reduce our margin.
The war has also led Denmark to establish various donation programs in support of Ukraine. These programs had a significant influence on our turnover.
The donations accounted for approximately 25% of the total turnover in 2022/2023.

Key activities in the fiscal year 2022/2023
The donation programs became an important focus area and with the government's decision to establish the national donation fund, this will require additional resources the next 2-3 years.
The contract for the Modular Sensor System (MSS), which was signed back in January 2022, was postponed to December 2022 due to various reasons. Unfortunately, we had to realize that FMI once again had to postpone the project when the previous government called for parliamentary elections in November 2022. With additional delays in Q1-2023 we do not expect to receive orders before summer 2023.

Employee Status
As of August 1, 2022, the management of PTD A/S has undergone changes. Jeppe Müller has transitioned from CEO to Chairman of the Board, and Jesper Rom Knudsen has transitioned from COO to CEO.
Additionally, a new board of directors has been established with expertise in the legal and business development fields.

The company has also hired a new Sales Director and a Product Manager within the Platform & Sensor Systems pillar. Furthermore, a new employee has been hired in Inside Sales, and a student assistant has been hired in Finance.

The Finance, Shipping, and Inside Sales departments are central and crucial functions for the company, and it is essential that employees possess the necessary skills as they hold key positions.
Due to the increased activities in the donations area, efforts are currently underway to strengthen the Product Management department with an additional staff member.

Standards
The company has initiated the preparations for obtaining the necessary certifications in NATO quality standards (AQAP). We are working on the implementation of the AQAP 2110 standard (requirements for design, development, and production), which is one of the primary quality standards, as well as the AQAP 2105 standard (additional requirements for quality plans), which is one of the two secondary quality standards.

Sustainability strategy
During the last year, the company has initiated work on our future sustainability strategy. The strategy will be developed in accordance with the requirements expected from our customers. Furthermore, our sustainability strategy will reflect the goals described in the "Ministry of Defense's Green Action Plan 2021-2025."

The company is committed to integrating green initiatives into our business practices. The company has adopted a sustainable approach to our operations and strives to reduce our environmental impact. Some of the green initiatives the company has implemented:

The company has implemented energy-efficient LED lighting everywhere in the building to reduce our energy consumption.
The company has initiated the first waste management activities that focuses on waste reduction, reuse of materials whenever possible, and recycling. Additionally, we will work closely with our suppliers and partners to reduce packaging waste and promote recyclable alternatives.

The company has been working towards obtaining the environmental certifications ISO 14001, which recognizes our commitment to environmental management and sustainable practices. The certifications serve as confirmation of the company´s efforts to minimize our environmental footprint.

Through these first green initiatives, the Company demonstrates our commitment to operating an environmentally responsible business.

The company has been working towards obtaining the environmental certifications ISO 14001, which recognizes our commitment to environmental management and sustainable practices. The certifications serve as confirmation of the company´s efforts to minimize our environmental footprint.
Through these first green initiatives, the Company demonstrates our commitment to operating an environmentally responsible business.

Corporate Social Responsibility
The company´s Corporate Social Responsibility (CSR) aim to have a positive impact on the society and the environment, and our CSR initiatives includes:

Social initiatives and engagement. The company conducts various social activities with the purpose of strengthening collaboration and improving the quality of life for our employees.

Some of our most important social initiatives are our support for veterans. The company has today employed two veterans and we have for several years financially supported the veteran organization Operators Hockey Club.

Employee well-being: The company prioritizes the well-being of our employees by providing a safe and inclusive work environment, offering training and education opportunities, and we have implemented policies that promote work-life balance.

Ethical business practices: The company has a well-described CSR policy which ensures that the company and the employees adhere to the described ethical principles.

Stakeholder engagement: The company actively engages with our customers, suppliers, and employees to understand their needs and concerns.

Overall, the company's CSR initiatives aim to create a positive impact beyond our business operations.

Customer satisfaction and feedback from relevant stakeholders
In December 2022, an external consultant conducted a survey with key individuals from DALO and the Army Operational Command regarding "Future Procurement Processes" and "The Danish Defense Sustainability Agenda."

Based on the various feedback received, we received positive responses regarding the company and employees' product knowledge and their ability to support and advise our customers. Additionally, there were areas identified where our customers felt we could improve.
The feedback has subsequently been used in the development of the company's strategic plan for 2023-2026.
The overall assessment is generally satisfactory.