Damstahl A/S

Management's reviewOperating reviewOperating reviewFinancial risksThe Group conducts effective credit control and credit insurance to minimize the credit risks on its trade receivables.The interest rate risk relating to interest-bearing current and non-current liabilities is assessed and controlled by Management on a regular basis. Operating credit lines are normally established by using variable interest rates, whereas loans regarding the financing of non-current assets to some extent, are made by using a fixed rate.Risks in foreign currencies are monitored and controlled by Management in order to minimize foreign exchange risks. Transactions with subsidiaries are not hedged, nor are investments in foreign subsidiaries.Risks related to underlying commodities in stainless steel such as nickel, chromium and molybdenum are monitored and controlled by Management on a continuous basis. During the year the Group started conducting hedging in the underlying commodities.

Financial reviewProfit/loss for the year2022 was a year effected by gigantic price fluctuations. The outbreak of the Russian war against Ukraine caused the prices to explode late in February and the market conditions during the year were characterized by increasing prices during especially the first half year both as a consequence of the suddenly increase in Nickel end Q1, high energy prices and then uncertainty about the general availability of goods in the market. Towards the second half of the year, concerns about the economic development in the world began to increase based on real macroeconomic key figures. The whole industry as such was influenced by that with a declining demand and booming stocks both at the mills and stockholders throughout Europe. This resulted in prices dropping drastically and the prices of stainless steel were thereby back to the starting point of 2022.Total volumes on the European market fell by 5% during 2022. The apparent demand, however, dropped even further due to restocking in the last half of 2022, and the global crude steel output fell by 11,5%. During most of the year, there was also a general oversupply into the market, this except for long products where the European market was highly influenced by the tragic accident at Ugitech France – a long term partner of Damstahl since 1989.Overall, the Group increased their market shares in vital segments and markets. During the year, the Group expanded its physical presence in Eastern Europe by opening a new entity including a warehouse in Latvia. Further, the Group expanded its presence in Switzerland by opening a warehouse to serve BtB customers. Delta Inox grew fast based on a group of skilled people being onboarded in Q3. Finally, the group’s +60 years of focusing solely on stainless changed by the acquisition of Metalservice Horsens A/S now adding aluminium and red metals to the product portfolio.The actions around the green agenda, with a vision of creating transparency for our customers, increased throughout 2022. The focus on digitalization continued with great success as the digital penetration on Group level ended up at 65% and brought the Group a revenue of app. 130 MEUR.Income statementConsolidated revenue increased to KEUR 434.538 in 2022 from KEUR 296.186 in 2021. 25% of the growth in revenue derived from an increase in sales activities where the remaining 75% was price driven.Despite the turbulent market situation, the Group's margin ended up being KEUR 70.791 compared to KEUR in 73.776 in 2021.The Group’s operating costs and staff costs increased from KEUR 45.669 to KEUR 52.266 in 2021. The increasing operation costs are like last year influenced by the ongoing focus in development of Group's e-commerce and ERP solution, all with the aim to optimize the business and increase the customer experience and generate substantial customer value. Beyond that, the operating costs are also influenced by the general higher prices during 2022 for i.e. freight, transportation and packaging material. And then the market expansions as well as the preparations for the new high racking systems in both Skanderborg and Langenfeld in Germany have also had an effect on the operational costs this year.The Group realized a profit after tax of KEUR 13.926. The Group as such made the profit in first half year, whereas second half year was characterised by losses as consequences of the drop in prices. Beyond that, the year is impacted by a stock write down of KEUR 5.239 due to the price development. The final result is considered satisfying, however not extraordinary.Balance sheetThe consolidated balance sheet totalled KEUR 273.368 against KEUR 210.464 in 2021. The Group’s inventory increased by KEUR 43.403 during 2022, both as a consequence of the Group strategy on expanding its product offering, but also as a consequence of the increasing prices.Self-financing continues to be high, and equity arrived at KEUR 125.257, corresponding to a solvency ratio of 45%.