Ege Carpets A/S

Ledelsesberetning

Ege Carpets in shortEge Carpets was founded by Mads Eg Damgaard in . The company is one of Europe's leading carpet manufacturers and is driven by a strategy of designing beautiful carpets for a sustain-able future". Production takes place at ive factories in Denmark using the most advanced technology in the industry. Further-more, carpet yarns in primary wool are manufactured at a factory in Lithuania. Ege Carpets annually produces around  million m² carpets, which primarily are sold to the commercial market.Ege Carpets produces unique loor designs in a more sustain-able way by turning waste into resources, while striving to keep the material components in closed loops. Via  showrooms and more than  partners worldwide, Ege Carpets supplies Cradle to Cradle-certiied carpets to e.g. hotel, oice and marine projects in over  countries. Visit egecarpets.com for further details.Financial highlights mDKK / / / / / Revenue      EBITDA      Proit before net inancials and tax EBIT      Net inancials - - - - - Proit before tax      The Group's net proit    -  Total assets, end of year      Share capital      Equity, end of year, Excluding minority interests      Net working capital      Net interest bearing debt      Cash lows from operating activities      Number of employees      Investments in property, plant, and equipment excluding acquisition of enterprise      Depreciation and amortisation      Financial ratios Proit margin EBIT margin      Return on invested capital ROIC    -  Return on equity after tax    -  Solvency ratio      Ratio of net working capital to revenue      Group structureMads Eg Damgaards FamiliefondDenmarkEge FondenMEDF Holding A/SVibeke & Mads Eg Damgaards FondDenmarkDenmarkEge Carpets A/SDenmarkProduction and buildings Production and buildingsBentzon Carpets A/SEge Carpets Norway ASDenmarkNorwayHammer Tæpper A/SEge Carpets Sweden ABDenmarkSwedenFoamtex ApSEge Carpets UK Ltd.DenmarkUnited KingdomUAB LitspinEge Carpets e.u.r.lLithuaniaFranceCarpet Concept Immobilien GmbH & Co KGEge Carpets GmbHGermanyGermanyCarpet Concept Teppichfabrik GmbH & Co KGEge Americas Inc.GermanyUSAEge Carpets Asia Pte.SingaporeReview /Ege Carpets' purpose – 'Designing beautiful carpets for a sus-tainable future' – continues to be the lodestar that guides all the work taking place at Ege Carpets. In / Ege Carpets achieved a revenue of  mDKK, from looring products, this is   lower than last year. Throughout the iscal year Ege Car-pets has increasingly been aected by the general turmoil in the global market conditions, where a e.g. continued war in Ukraine, shipping crisis in the Red Sea, global inlation and introduction of US taris have negatively impacted the global market condi-tions. / has been a year of two periods, after the irst  quarters revenue from looring products were up by  com-pared to last year, but with a signiicant drop in revenue during quarter , the full year revenue ended  lower than last year. The revenue has been generated in  geographical markets and under these market conditions, we are happy to see that  of both established and new geographical markets experi-enced growth in /. Following the weak fourth quarter May bounched back and exceeded the expectations of the month. Also June looks promising, and the order pipeline and activity is back at a more normal level./ was a year where Ege Carpets introduced several new and exciting collections and updates to existing collections - in-cluding Una Tempo, Una Stripe, Thurat and ReForm Spectrum. Further a new collection for one of our bestselling concepts, Re-Form Memory, was introduced. The new ReForm Memory col-lection is designed by Carol Appleton, who is also the talent be-hind ReForm Mark of Time, Shadowplay and Artworks. The new Memory collection is human-centered carpet design focused on rich texture and calming colours to comfort and enhance the space. Featuring  familiar and relatable colours to create vari-ous moods through perfect yet surprising harmonies. The light or softly tinted neutrals are chosen for their ability to promote the interaction between architecture, materials and natural light sources – and for making harmonious combinations for inten-tional zones or eective wayinding. All produced using regener-ated and regenerable ECONYL® yarns produced from discarded ishing nets, used carpets and other industrial nylon waste.During the iscal year Ege Carpets also launched new collections for Rugs. Our vast Rugs programme now consists of more than  designers,  collections, endless unique colours,  dierent pile constructions and various eco-friendly yarns. All available through our market-leading online conigurator tool, Rug Crea-tor. Hereby it is possible to conigurate unique rugs in "any size and any shape", hence the concept provides almost ininite pos-sibilities for customers, whether furnishing a modern oice land-scape, a unique boutique hotel or a stylish concept store.Ege Carpets continues to invest in digitalization of the full value chain. The value of our continued digital eorts is paying o as Ege Carpets continues to take digital market shares across the main markets and we have improved our conversion rates though the various online tools. In / we invested time and resources in mapping out the customer journey and internal processes as a starting point for developing a digital roadmap. This roadmap deines our plan and deliverables as we embark on a journey of digital transformation. We have already started executing our plan, we have developed and launched our Mood-board Creator, a tool that engages our customers and supports the journey from awareness to inspiration and action. Currently there are two major ongoing initiatives, implementation of a new master data system and the development of our new website set to launch in /. The new website will simplify the customer journey, enable personalization, improve product indability, and elevate the overall brand experience, bringing us closer to our goal of becoming a love brand for architects and designers. In / Ege ReUse was introduced. The initiative is fully aligned with our mission of circular thinking and keeping re-sources within a closed loop. This ongoing commitment drives us to set new goals and standards, aiming to create the world's most sustainable carpets. With Ege ReUse, we're extending the life of our high-quality products, keeping resources within a closed loop, reducing waste and signiicantly reducin CO emis-sions. Within the iscal year we successfully established an op-erating model with feedstock sourcing and carpet tile cleaning process in Scandinavia, making the ReUse tiles ready for a com-mercial second life. Further in / Ege Carpets succeeded in selling ReUse carpet tiles to customers, which has provided invaluable experience for the next phases of the journey. In the coming year the focus will be on further developing the oper-ating model, expanding the geographical reach and the go-to-market approach to ensure that the carpet tiles we have diverted from incineration and landill are also ending up in the hands of customers to be used for many years to come."Ege ReUse gives us a unique opportunity to reduce the carbon footprint of our building projects without com-promising on function, quality or aesthetics. Thanks to Ege ReUse, the choice is made easy, requiring no major changes or risks. Saving the planets resources can be exciting"Thomas Gilhøj Lundsgaard,Head of sustainability, KT Erhvervsbyg.In / Ege Carpets has continued to create a more diverse and accommodating workplace with equal opportunities for everyone. In the iscal year Ege Carpets has made signiicant strides in promoting gender diversity, increasing the number of female managers to  at group level, up from  last year. Women now account for  of the total workforce. The compa-ny continues to focus on attracting female executives and man-agers to bridge the gap between the representation of women in the workforce and management positions.In line with the Danish practical training scheme, Ege Carpets has successfully increased the number of trainees and apprentices, achieving  trainee points, surpassing both national expecta-tions and internal ambitions. The company has also introduced a social programme for trainees to foster a sense of belonging and community.Ege Carpets remains committed to reducing accidents leading to absence at production units. Despite a slight increase in acci-dents this year, various initiatives such as safety walks, blue lash-ing lights on reversing trucks and updated safety policies have been implemented to enhance workplace safety. Additionally, the company has opened a itness centre at the head oice to promote employees' mental and physical health.The Ege GoWork programme continues to combine environ-mental and social actions by recycling yarn cones and providing practical training positions for job centre candidates. This initia-tive supports the company's sustainability goals and contributes to a circular economy. In /;  tonnes of yarn and card-board were sent to recycling and thereby avoided incineration. InspectionWe inspect and evaluate the used carpet tiles on-site and agree on compensation for collection and sorting.Removal and packingFollow our simple guide to remove, sort and pack the used carpet tiles. Ege Carpets can also help or take care of the whole process.Collection and transportWe organise and pay for pick up and transport of the carpet tiles ready for reuse.Proof of ReUseWe clean, repair, test and control the carpet tiles in order for them to be approved for ReUse.Ege GoWork can now have  concurrent candidates at any time, in / courses have been completed in collabo-ration with the local job centres. The courses are structured as investigative practical training programmes, language training and skill upgrading plans. High school students, students and trainees from STU, which is a three-year secondary education programme for young people with special needs, have also been involved. They all share a desire to be part of a workplace that meets them on their own terms. Besides the candidates who attend the production line, Ege GoWork has an agree-ment with Diagergård and Kuglen, which are residential care units for mentally vulnerable and socially marginalised people. They are using Ege GoWork to oer sheltered employment to the residents, who thereby realise a work-related identity. The collaboration also contributes to the residents being able to maintain weekly routines and structures, which is an important part of their process to achieve an everyday life that is as normal as possible.Read more about Ege Carpets' ESG work in the ESG Policy at egecarpets.com.Ege Fonden supports local charitiesEge Carpets is partly owned by Vibeke and Mads Eg Damgaards foundation, also known as the Ege Foundation. Through this foundation, Ege Carpets supports non-proit and charitable ac-tivities. These are for artistic and cultural purposes, as well as ac-tivities related to humanitarian and charitable causes. We mainly support local activities in areas where Ege Carpets is present. The foundation's share of ownership in Ege Carpets means that over the last  years almost  mDKK have gone back to our local communities. In this way, charitable work is built into our busi-ness model. This year, donations were distributed by the founda-tion's Board for many dierent purposes, such as:• A recreative area for associations and citizens to experience nature at a local steam• An opera festival that aims to make a classical art accessible to all by moving it out of the traditional concert halls and into the city• Scholarships for specialised psychological assistance and play therapy to The Children's Cancer Foundation• Renovation of a music venue that works to create strong mu-sical experiences in the local communityFinancial reviewGroupRevenueRevenue of the Group amounts to  mDKK against  mDKK last year, corresponding to a decrease of .From st May  Ege Carpets discontinued the sales of Rooms, adjusted for this the decrease in revenue was . Even though the consolidated revenue is lower than last year  of  Sales Divisions achieved a higher revenue compared to last year. The lower than expected revenue is due to the general tur-moil in the global market conditions, aecting especially quarter  of the iscal yearExpensesOther external expenses amount to  mDKK compared to  mDKK last year. The increase can be attributed to investments in commercial activities. Sta costs amount to  mDKK compared to  mDKK last year. The increase is predominantly due to three reasons,  in-vestments in new competences mainly within purchasing and digitalization,  salary increases and  redundancy cost. Depreciations amount to  mDKK which is identical to last year. Proit before net inancials EBITEBIT amounts to  mDKK  against  mDKK  last year, the result is considered not satisfactory as the result is below budget expectations. During the year market conditions have had a negative eect on the iscal year's EBIT result. The lower EBIT is a consequence of the lower revenue.Financial itemsFinancial items make up - mDKK against - mDKK last year.The result of the yearProit before tax amounts to  mDKK against  mDKK last year. Tax on the proit for the year is  mDKK against  mDKK last year. Net proit for the year amounts to  mDKK against  mDKK last year.EquityThe group's equity is  mDKK against  mDKK last year. The solvency ratio is  compared to last year's .Net interest bearing debtNet Interest debt amounts to  mDKK and has increased by  mDKK during the iscal year. The main reason for the increase is commercial investment in local stock for new segments and markets.Cash low statementCash low from operating activities amounts to  mDKK, com-pared to  mDKK last year. The lower cash low from operating activities is due to less activity and change in working capital.Cash lows for investments amount to - mDKK against - mDKK last year. Combined this has generated a free cash low of  mDKK, com-pared to  mDKK last year.Cash lows from inancing amount to - mDKK against - mDKK last year.  mDKK have been paid in dividend in the is-cal year. Changes in cash and cash equivalents amount to - mDKK, and liquid assets thus amount to  mDKK at the end of the year.InvestmentsInvestments in long term assets of the year amount to  mDKK compared to  mDKK last year. The majority of the investments have been made in lowering Ege Carpets CO emissions through electriication of the production. Further investments have been made in digitalization, employee facilities and in various facto-ries.The parent companyProposed distribution of proit mDKK is proposed to be distributed as dividend.OutlookIn / we expect a growth in revenue between - cor-responding to a revenue between  and  billion DKK, and an EBIT margin of -. In the strategic work, growth potentials have been identiied both in relation to products as well as geo-graphical market growth potentials.The growth must be proitable so it is possible both to reinvest in the company and also to pay dividends to the company's own-ers. In doing so Ege Carpets can continue to facilitate donations to charitable and non-proit projects in the local area in-line with Ege Carpets purpose "Designing beautiful carpets for a sustain-able future".Risk managementGeneral risksThrough Ege Carpets operation and strategy Ege Carpets is subject to risk factors of both a commercial and inancial na-ture. The risks may aect the value of the group's earnings as well as the value of assets and liabilities but are generally no dierent from what is usual for other companies in the carpet industry.Financial risksAs a result of its operations, investments and inancing, the group is exposed to changes in exchange rates and interest rates.Currency risksThe Group is characterized by the fact that the majority of pro-duction takes place in Denmark, while invoicing primarily is in foreign currency. In / of the revenue was exported and sold in foreign currencies, which is a small decrease com-pared to last year.Interest rate risksThe net interest bearing debt has increased by  mDKK during the year to  mDKK.The vast majority of the group's interest bearing debt has a ixed interest. An increase in the interest rate level of  p.a. in relation to the year's actual interest rates, all other things being equal, would have a negative impact on proit and equity of  mDKK /:  mDKK.Credit risksThe group's receivables are generally not considered to be as-sociated with unusual credit risk. If more than usual uncertainty is attached to the credit assessment of trading partners, receiva-bles are secured. Such security typically consists of inancialguarantees or credit insurance.Research and development activitiesIn the group there is continuous optimization of existing prod-ucts, development of new products and new innovative produc-tion methods are explored. This work is done both internally, in collaboration with suppliers and other relevant contributors. Costs for this are recognised in the income statement.Subsequent eventsNo subsequent events have occurred by year end closing of sig-niicant importance to the inancial position in the Group or in the parent company.