Scanvogn Aps

Management's review

Development in activities and financial mattersThe Company and the Group obtained a profit of DKK 3.8 million in 2021/22 against DKK 6.3 million in 2020/21. Considering the circumstances, the profit for the year 2021/22 is considered satisfactory. The profit is significantly down on expectations stated in the latest annual report but is attributable to several circumstances as described below.The level of revenue increased significantly compared with last year, and generally exceeds expectations and derives from a broad customer segment, primarily driven by considerable activities within the construction and event industries.The after-effects of the COVID-19 pandemic, the war in Ukraine, supply crisis, increase in raw materials inventory and energy prices as well as a general shortage of manpower, have had a negative earnings impact. A high degree of adaptability and implementation of required corrective measures contributed to a reduction of the negative earnings effects.On 1 November 2021, the Company established a subsidiary in Ukraine with new production facilities. The production facility is mainly to supply the central European markets. The purpose of the new production facility is to increase the Company’s production capacity, as the capacity in Tornby is nearly fully utilised. The first cabins were manufactured in Ukraine before New Year, however, the breakout of the war in February 2022 caused a preliminary close-down of production in Ukraine. The production started again in July 2022 and is still running, however, at a level much lower than originally planned due to the uncertainty caused by the war. The establishment of the production facility in Ukraine and the above-mentioned close-down of production implied that the subsidiary affected the Group’s earnings negatively by approx. DKK 3.0 million.In recent years, Scanvogn dedicated significant resources for product development and made investments in production equipment, just as the organisation, procedures and systems are geared to handle expected growth in the coming years. The above measures are part of the implementation of the Company’s new 2025 strategy, which focuses particularly on growth, earnings, automation, and efficiency.To support the strategic growth ambitions, major investments were made in IT, a new on-line platform, and a new on-line strategy. Together with the new production facility in Ukraine, these initiatives will help ensure the Company’s strategic ambitions for further growth on selected European markets.To strengthen the Company’s market shares and the market-leading position, the Company continuously strives to further develop and increase the quality of products supplied.The Company has put efforts in improving the production efficiency as this is considered a significant parameter in mitigating price increases. These efforts have become even more topical as the Company’s suppliers have introduced price increases on raw materials, consumables and components for the production.