Titan Storage Solutions A/S

Management's review

Business reviewTITAN Group has become perhaps the world’s largest privately owned company supplying shipping andstorage containers for a vast multitude of applications. TITAN Group's initial goal was to pass on theadvantages of high volume by providing end-users with top quality containers and services always by competitive prices.Today TITAN Group maintain the same targets, operates six brands, and can offer worldwide services witha network that is possibly the best in the marketplace. The emphasis of the business has always been a storage application.Aside from gaining logistic advantage, TITAN Group is generally not involved in the international container-shipping sector.TITAN Group owns and operates a fleet of ISO shipping and storage containers, purpose built refrigeratedstorage containers and DNV offshore containers for international and domestic rentals.Furthermore, TITAN Group presently operates 75 self-storage sites located in 12 countries, 19 containerdepots with container handling equipment in 8 countries and 26 container lorries in 6 countries.Through the Group's own and subsidiary offices in 22 countries, TITAN offers these containers and servicesto customers for domestic, offshore, and international hire. TITAN is also actively engaged in the purchaseand sale of new and used containers and in the supply of related services to a wide range of customers.Financial reviewThe group's income statement for the year ended 31 December 2022 shows a profit before tax of DKK159 million, and the balance sheet on 31 December 2022 shows equity of DKK 683 million.Revenue for the year amounted to DKK 780 million compared to DKK 711 million last year.Profit after tax was DKK 119 million compared to DKK 110 million last year.The development must be compared with the fact that in the annual report for 2022, the Group expectedan increase in revenue of 10%, based on our expectations of the uncertainty that the CV-19 pandemicas well as the challenges in the supply chains could cause. The Group managed to achieve the expectedrevenue increase 2022. The Group's rental income increased as expected and we experiencedsatisfactory growth within all the Group's focus brands.Management considers this year's result satisfactory.At the beginning of 2022, there was still great uncertainty about the corona pandemic, but as morecountries removed the restrictions, it led to many infections in the spring. Management still had a strongfocus on protecting employees, and working from home was used to minimize the risk of infection.During the Spring, employees returned to the offices. Today, work from home is considered a natural partof everyday life, and management encourages its use, provided, however, that it is organized in a way thatdoes not lead to disruptions of the daily operations.As an international group, management still considers it necessary for business travel to be carried out.However, management encourages that travel is carried out only if it is extremely necessary.This has resulted in fewer business trips, as the use of the digital solutions is still high even though theemployees have returned to the offices.In 2021, TITAN added more resources to the ISO project organization, which has worked purposefully withimplementations and ensuring that the organization was ready to achieve ISO certification. TITAN achievedglobal multi-site ISO certification within 9001 and 14001 in June 2022. We believe that an ISO certificationadapted to the specific conditions of TITAN is paramount. It is a project that aims to provide real long-termbenefits for all stakeholders and for TITAN. It must never threaten the real objectives or the existingwell-functioning processes that have resulted in the constant growth and shareholder, customer, and supplier satisfaction.The shortages of containers and shipping capacity continued in 2022 leading to significant highertransporting cost which main driver was higher fuel costs. TITAN was affected heavily by higher transportcosts because of the need for moving boxes to the markets where they were needed.The high freights continued until March 2022 where they started decreasing very fast during summer andfall due to insufficient cargo to fill the ships on major routes. By end of 2022 the freight rates were only1/5 of the rates from the beginning of 2022. The massive shortage of containers gave rise to massiveincreases of the price for new and used containers. The high prices of the containers continued for a longtime in 2022, but in the second half of 2022 prices began to fall. Prices reached a more normal level in late 2022 and early 2023.The war in Ukraine did not cause any losses to the TITAN Group, as the group had no activities in Russia or Ukraine.The aftermath of the war, such as higher energy prices, higher inflation, and supply chain disruptions, wasfelt in higher transport prices. We also faced challenges with getting available trucking services in some markets.Further, the Group benefitted from the globally higher container values and margins when sellingcontainers but during the end of 2022 and beginning of 2023 the margins fallen to lower levels because ofover-full depots in Europe.FinancingThe Groups loans with the main banks were re-negotiated in the beginning of 2022 and was extended to2026. Due to the general increase in the interests the Group’s interest expenses increased significantlyin 2022 and is expected to increase even further in 2023.Significant events occurring after the end of the financial yearNo events have occurred alter the balance sheet date which could significantly affect the group's financial position.Expected development of the company, including specific prerequisites and uncertaintiesIn 2023, the Group's total revenue is expected to increase at least by 10 %. The growth in rental income isexpected to increase with a higher percentage than sales revenue.The Group expects to continue to have positive cash flow from operating activities in 2023.Foreign branchesAs to the financial year in question, TITAN Group had branch offices in Ireland, Austria, Hungary, France,Switzerland, Slovakia, Croatia, and Australia.Profit for the year relative to the expectations most recently expressedTITAN Group's operating performance in 2022 was 119 million DKK. All brands responded well to themarket conditions in 2022. Performance across all product lines was strong with newer marketsstarting to make a more noticeable contribution to TITAN's total performance.