MOVING FORWARD IN POWER AND MOTION
ANNUAL REPORT
HydraSpecma 2023
HydraSpecma A/S · Company reg. ( CVR ) no.: 87552411
The annual report is considered and approved
at the company’s annual general meeting at 1 March 2024
Conductor: Hans Peder Aarre
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Annual report 2023 | 1
Contents
Management's statement and auditor's report
Management’s Statement 2
Independent Auditor’s Report 3
Management’s report
Company information 6
Group overview 7
Key figures and financial ratios 8
Management’s report 10
Consolidated financial statements
Statements of income and comprehensive income 16
Balance sheet 17
Cash flow statement 19
Statement of changes in equity 20
Notes 21
Parent company financial statements
Statements of income and comprehensive income 61
Balance sheet 62
Cash flow statement 64
Statement of changes in equity 65
Notes 66
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Management's statement and auditor's report
Management’s Statement
The Board of Directors and the Executive Management have today reviewed and approved the annual report
of HydraSpecma A/S for the financial year ended 31 December 2023.
The annual report has been prepared in accordance with the International Financial Reporting Standards as
adopted by the EU and additional Danish disclosure requirements for annual reports.
In our opinion, the consolidated and parent company financial statements give a true and fair view of the
Group’s and the company’s assets, liabilities and financial position at 31 December 2023 and of the results of
the Group’s and the company’s operations and cash flows for the financial year ended 31 December 2023.
In our opinion, the management’s report includes a fair review of the development and performance of the
Group and the company, the financial results and cash flows for the year and of the financial position, together
with a description of the principal risks and uncertainties that the Group and the parent company face.
We recommend that the annual report be adopted by the shareholders at the annual general meeting.
Skjern, 1 March 2024
Executive management:
Morten Kjær Graakjær Henrik Sillesen
Group CEO Group Director - EVP
Board of Directors
Jens Bjerg Sørensen Peter Kjær Kurt Bering Sørensen
Chairman
Jørgen Wisborg Carsten Thygesen Erik Lodberg
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Management's statement and auditor's report
Independent Auditor’s Report
To the Shareholders of HydraSpecma A/S
Opinion
In our opinion, the Consolidated Financial Statements and the Parent Company Financial Statements give a
true and fair view of the Group’s and the Parent Company’s financial position at 31 December 2023 and of the
results of the Group’s and the Parent Company’s operations and cash flows for the financial year 1 January to
31 December 2023 in accordance with IFRS Accounting Standards as adopted by the EU and further require-
ments in the Danish Financial Statements Act.
We have audited the Consolidated Financial Statements and the Parent Company Financial Statements of
HydraSpecma A/S for the financial year 1 January - 31 December 2023, which comprise income statement
and statement of comprehensive income, balance sheet, statement of changes in equity, cash flow statement
and notes, including material accounting policy information, for both the Group and the Parent Company (“fi-
nancial statements”).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional re-
quirements applicable in Denmark. Our responsibilities under those standards and requirements are further
described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We
are independent of the Group in accordance with the International Ethics Standards Board for Accountants’
International Code of Ethics for Professional Accountants (IESBA Code) and the additional ethical require-
ments applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Statement on Management’s Review
Management is responsible for Management’s Review.
Our opinion on the financial statements does not cover Management’s Review, and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read Management’s Review
and, in doing so, consider whether Management’s Review is materially inconsistent with the financial state-
ments or our knowledge obtained during the audit, or otherwise appears to be materially misstated.
Moreover, it is our responsibility to consider whether Management’s Review provides the information required
under the Danish Financial Statements Act.
Based on the work we have performed, in our view, Management’s Review is in accordance with the Consol-
idated Financial Statements and the Parent Company Financial Statements and has been prepared in accord-
ance with the requirements of the Danish Financial Statement Act. We did not identify any material misstate-
ment in Management’s Review.
Management’s Responsibilities for the Financial Statements
Management is responsible for the preparation of Consolidated Financial Statements and Parent Company
Financial Statements that give a true and fair view in accordance with IFRS Accounting Standards as adopted
by the EU and further requirements in the Danish Financial Statements Act, and for such internal control as
Management determines is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, Management is responsible for assessing the Group’s and the Parent
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting in preparing the financial statements unless Management
either intends to liquidate the Group or the Parent Company or to cease operations, or has no realistic alter-
native but to do so.
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Independent Auditor’s Report
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs and the additional requirements applicable in Denmark will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, indi-
vidually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark,
we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
> Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
> Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s and the Parent Company’s internal control.
> Evaluate the appropriateness of accounting policies used and the reasonableness of accounting esti-
mates and related disclosures made by Management.
> Conclude on the appropriateness of Management’s use of the going concern basis of accounting in
preparing the financial statements and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on the Group’s and
the Parent Company’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our auditor’s report. However, future events or condi-
tions may cause the Group and the Parent Company to cease to continue as a going concern.
> Evaluate the overall presentation, structure and contents of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in
a manner that gives a true and fair view.
> Obtain sufficient appropriate audit evidence regarding the financial information of the entities or busi-
ness activities within the Group to express an opinion on the Consolidated Financial Statements. We
are responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
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Annual report 2023 | 5
Independent Auditor’s Report
Auditor’s Responsibilities for the Audit of the Financial Statements (continued)
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
Århus, 1 March 2024
PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab
CVR No 33 77 12 31
Claus Lindholm Jacobsen Palle H. Jensen
State Authorised Public Accountant State Authorised Public Accountant
mne23328 mne32115
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Management’s report
Company information
HydraSpecma A/S
Bækgårdsvej 36
6900 Skjern, Denmark
Tel.: +45 97 35 05 99
E-mail: HSDK@hydraspecma.com
Website: www.hydraspecma.com
Company reg. (CVR) no.: 87 55 24 11
Founded: 7 June 1978
Municipality of registered office: Ringkøbing-Skjern
Board of Directors
Jens Bjerg Sørensen, Chairman
Peter Kjær
Kurt Bering Sørensen
Jørgen Wisborg
Carsten Thygesen
Erik Lodberg
Executive Management
Morten Kjær Graakjær, Group CEO
Henrik Sillesen, Group Director - EVP
Auditors
PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab
Jens Chr. Skous Vej 1
8000 Aarhus C, Denmark
Date of annual general meeting
Annual General Meeting to be held on 1 March 2024.
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Annual report 2023 | 7
Management’s report
Overview of group companies
Subsidiaries
Associates
HydraSpecma A/S, Denmark
HydraSpecma Wiro AB,
Sweden
100%
HydraSpecma Component
AB, Sweden
100%
HydraSpecma AB, Sweden
100%
Young Tech Company Ltd.,
South Korea
30%
HydraSpecma Hydraulic U.S
Inc, USA
100%
HydraSpecma Do Brasil
Mangueiras Hidraulicas Ltda,
Brazil, 90%
HydraSpecma Norge AS
100%
Specma Fastighets AB
100%
HydraSpecma USA Inc.,
USA
100%
HydraSpecma Hydraulic
Systems (Tianjin) Co., Ltd,
China, 100%
HydraSpecma Hydraulics
India Pvt. Ltd., India, 100%
HydraSpecma Renewables
AB, Sweden
100%
HydraSpecma Renewables
ApS, Denmark
100%
HydraSpecma ASIA Ltd.,
China
100%
HydraSpecma Renewables
(Tianjin) Co.,Ltd., China
100%
Micron Specma India
(Pvt.) Ltd., India
25%
NGIN A/S, Denmark
40%
Dansk Afgratningsteknik A/S,
Denmark, 60%
HydraSpecma Renewables
inc., USA
100%
HydraSpecma Polska Sp.
Z.o.o, Poland
100%
HydraSpecma Samwon Ltd,
UK
100%
HydraSpecma Hydraulic
(Shanghai) Co. Ltd, China,
100%
HydraSpecma BV,
Netherlands
100%
HydraSpecma OY, Finland
100%
HydraSpecma Produc-
tion BV, Netherlands
100%
HydraSpecma Renewables
India Pvt. Ltd, India
100%
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Annual report 2023 | 8
Management’s report
Key figures and financial ratios for the group
All amounts in DKK’000 2023 2022 2021 2020 2019
Revenue and income
Revenue 2.971,6 2.536,3 2.315,5 1.977,2 2.123,2
Gross profit 732,5 669,3 598,3 495,1 531,5
EBITDA 323,2 306,2 286,1 210,8 215,3
EBIT 199,7 211,4 191,0 123,0 136,1
Net financials (39,7) (13,0) (9,4) (41,2) (22,7)
Profit for the year 128,2 157,0 142,8 62,5 88,6
Invested capital and financing
Total non-current assets 1.257,7 654,6 691,0 695,4 635,9
Total current assets 1.560,2 1.290,5 1.274,6 1.029,1 1.055,5
Total assets 2.817,9 1.945,1 1.965,5 1.724,4 1.691,3
165,7 54,8 83,7 98,8 61,0
Total equity 980,2 755,1 692,3 574,8 530,2
Non-current liabilities 758,2 461,3 432,1 459,0 484,1
Current liabilities 1.079,5 728,7 841,1 690,6 677,1
Net interest-bearing debt 1.099,9 654,8 714,5 696,3 718,0
Cash flows
Cash flows from operating activities 190,7 190,5 75,4 197,1 176,7
Cash flows from investing activities (646,3) (69,5) (62,3) (113,4) (76,9)
Cash flows from financing activities 502,0 (119,6) (5,0) (92,5) (101,1)
Cash flows for the year 46,4 1,4 8,2 (8,8) (1,3)
Financial data
EBITDA margin 10,9% 12,1% 12,4% 10,7% 10,1%
Profit margin 6,7% 8,3% 8,2% 6,2% 6,4%
ROIC excluding goodwill 13,4% 17,6% 17,5% 12,8% 13,5%
ROIC including goodwill 11,5% 16,0% 15,7% 11,1% 12,0%
Current ratio 144,5% 177,1% 151,5% 149,0% 155,9%
Equity ratio 34,8% 38,8% 35,2% 33,3% 31,3%
Return on equity 14,8% 21,7% 22,5% 11,3% 17,7%
Average number of employees 1.452 1.274 1.195 1.161 1.221
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Accounting policies
The key figures and financial ratios provided in the preceding table were calculated as follows:
EBITA
Earnings before Interest, Taxes and
Amortazation
EBITDA margin:
Profit margin
ROIC excluding goodwill:
ROIC including goodwill:
Current ratio:
Equity ratio:
Return on equity:
EBITDA x 100
Revenue
EBIT x 100
Revenue
EBITA
Avg. Invested capital excluding goodwill
EBITA
Avg. Invested capital including goodwill
Current assets x 100
Current debt
Total equity at year end x 100
Total assets
Profit for the year x 100
Average equity
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Management commentary
The group main activities
HydraSpecma is a specialised hydraulic & electric solutions and components company, who deliver to both
aftermarket and OEM-customers with roots in the Nordic countries. HydraSpecma has the markets largest
product assortment from both branded suppliers and own production, and deliver and develop customized
products to hydraulic solutions, electrification, turnkey solutions and systems, central lubrication, manifolds,
pipes, hoses, and fittings. As well as cooling systems, filtration and lubrication systems, pitch hydraulic systems
and connectors.
HydraSpecma Group is the umbrella for 3 divisions working with customer segments within: Renewables,
Global OEM, and Nordic IAM & OEM. From these divisions, HydraSpecma, serves industries such as Com-
mercial Vehicles, Wind Turbine Generator, Construction Equipment, Marine, Material Handling, Agri-culture,
Forestry, and many others.
Headquartered in Skjern, Denmark, HydraSpecma employs more than 1,500 people in 11 countries world-
wide. The company is owned by Schouw & Co. and is listed on the Nasdaq Copenhagen.
In 2023, we divided our activities into three divisions, Renewables, Global OEM and Nordic IAM & OEM, op-
erating in the following business segments:
> Renewables:
> Global OEM:
Products and systems directly connected to the Renewables in-
dustry, with focus on Wind turbines, Solar and Power-to-X produc-
tion and aftermarket.
High volume hydraulic systems and fluid conveyance solutions for
customers with a global reach and comprehensive quality require-
ments, inside the segments Mobile hydraulics and Power systems,
to customers from the truck, bus, construction equipment, material
handling, marine, mining, defence industry.
> IAM & OEM:
Hydraulic Systems and fluid conveyance solutions for our custom-
ers with primarily a national reach and higher demands in regard to
proximity and availability, both national manufacturers as well as
walk-in customers in our Nordic Store set-up.
Headlines for the Group in 2023
Year 2023
HydraSpecma continued on its growth journey in 2023, delivering a revenue increase of more than 17% over
last year. The largest increase was provided by the Renewables division. The Division has increased revenue
with 64% which mainly are coming from the acquisition of Ymer Technology’s Wind division. The Global OEM
Division increased its revenue by 6%, driven by a large order backlog in the mobile business and increasing
activity in the Power Solution business as Marine and Defence. The market decreased in Finland due to the
continuing conflict in Ukraine. Prior the conflict, Russia was one of Finland’s largest business partners. As a
result, HydraSpecma recorded a minor revenue decline in the Nordic IAM &OEM division of 1%.
At the beginning of 2023, we made changes to the overall structure of HydraSpecma, dividing the business
into three divisions. The purpose of the structural change was to secure the right focus and level of service to
our customer portfolios in each of the three divisions. The new structure was also implemented to prepare for
the acquisition of the wind division from Ymer Technology.
The material supply situation stabilised in 2023. We experienced decreasing lead times and supplier on-time-
deliveries also improved. Purchase prices stabilised during the year after significant increases in 2022, which
continued into Q1 2023. We are seeing a few raw material price indexes decreasing, but due to long order
times we are also experiencing considerable time lags before lower prices filter through from our suppliers.
Transport costs also stabilised during the year to a lower level.
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Management commentary
Year 2023 (continued)
To comply with the increasing demand in central Europe, HydraSpecma has established a new facility in Star-
gard, Poland. The new facility of 16,000 m2 is designed with solar panels for electricity and heat pumps for
heating to avoid CO
2
e emissions related to the facility. It is located close to our existing facility in Poland, which
has been put up for sale.
HydraSpecma acquired the wind division from Ymer Technology AB effective at 1 February 2023. The Re-
newables marked is expected to experience significant growth in the near future, and through the acquisition
HydraSpecma obtained an even stronger position as a leading supplier and developer for Renewables
OEMs on cooling & conditioning systems, pitch hydraulics, lubrication and filtration systems and pipe and
hose solutions for the wind turbines, solar and Power-to-X OEMs.
Inflation rates also stabilised in 2023 across the countries where HydraSpecma is present. HydraSpecma has
faced a challenge of increasing wage demands but has successfully offset the effects through increased effi-
ciency thanks to investments in automation, production capacity and high-capacity utilisation.
Intending to optimise HydraSpecma’s global footprint, we have started to merge the newly acquired companies
with our existing operations, where possible. HydraSpecma has merged the companies in India in a process
expected to be finalised in Q1 2024. At the same time, HydraSpecma has initiated a 2,000 m2 expansion of
the existing new facility i Oragadam, India, to accommodate the increased business activity in India related to
the Renewables industry.
P&L 2023
The consolidated financial figures for 2023 is included in 11 months of operations from the acquired compa-
nies.
Revenue for 2023 amounted to DKK 2,972 million compared to DKK 2,536 million last year for an increase of
DKK 436 million that was partly due to the acquisition. EBITDA for the year amounted to DKK 323 million, up
from DKK 306 million in 2022. EBITDA 2023 was adversely affected by integration costs and adjustments for
purchase price allocation (PPA). EBITDA was up by 12% excluding the one-off cost for 2023. EBIT for the
year was DKK 200 million against DKK 212 million last year. Financial expenses more than doubled in 2023
due to higher interest rates and the loan obtained from Schouw & Co. to acquire the Renewables Division from
Ymer Technology AB. Last year, we gained more than DKK 9 million in currency effects, while in 2023 we the
gain was only DKK 2 million. Profit before tax for 2023 was DKK 162 million against DKK 199 million in 2022.
The profit for the year after tax was a little over DKK 128 million, compared with a profit of DKK 157 million in
2022.
The revenue was below the original expected guidance, but within the range of the latest guidance. The reason
for the lower revenue is cancelled and postponed orders at our customers. The EBITDA for the year was
satisfactory and in mid-range of the guidance.
Investing activity in 2023
Investing activity for the year included construction of a new facility in Stargard, Poland, general renovation of
facilities, automation, capacity expansion replacement equipment due to wear and tear. HydraSpecma has
capitalised the new large development project to customers. We assumed capitalised development costs in
connection with the acquisition of the Renewables division from Ymer Technology AB and will continue to
capitalise the existing and new large customer and own development projects.
Balance sheet, cash flows and interest-bearing debt in 2023
Total assets have increased by around DKK 900 million following the acquisition. Working capital rose from
DKK 814 million on 31 December 2022 to DKK 934 million at 31 December 2023. The increase in working
capital is due to overall effect of price increases, the acquisition and the increase in business activity.
The company funds ongoing capital needs through the credit facilities of its ultimate parent company Schouw
& Co.
Cash flows from operations for 2023 was just over DKK 191 million, which was slightly higher than last year.
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Management commentary
Balance sheet, cash flows and interest-bearing debt in 2023 (continued)
The return on invested capital (ROIC) excluding goodwill was reduced to 13.4% on 31 December 2023 from
17.6% on 31 December 2022. The decrease was due to the acquisition and the considerable investing activi-
ties.
Equity improved by DKK 225 million to stand at DKK 980 million after a DKK 50 million dividend payment to
the parent company. HydraSpecma has received a capital contribution of DKK 150 million from its ultimate
parent, Schouw & Co. The return on equity for the year was 14.8%, compared with 21.7% last year.
Events subsequent to the financial year-end
No material events have occurred after the end of the financial year.
Outlook for 2024
All three divisions are facing an uncertain market situation. HydraSpecma is getting various signals from cus-
tomers, as some are temporarily reducing the business activity involving HydraSpecma. Such reductions are
a result of both the current market situation and their efforts to improve their own net working capital. Some
customers are reporting a more permanent slowdown, while other customers are increasing their activity. Hy-
draSpecma expects to maintain its overall business activity in 2024 as in 2023, however with larger deviation
between the divisions. HydraSpecma expects to grow in the Renewables Division, despite of the stagnant
Renewables market, general expectations for 2024 outside of China, because HydraSpecma will deliver to the
Windmill platforms that will develop positive during 2024 and forward.
The level of activity in the Global OEM division is expected to decrease, but will still be at a relatively high
overall level. The customers in the Mobile segment have nearly caught up with their large order back-log, and
therefore the activity expects to reach a more normal level. The activity reduction is not expected to be fully
offset by new business from existing and new customers. Power Systems expects to increase activity, espe-
cially in the marine and defence segments.
HydraSpecma expects to maintain the level of activity in the Nordic IAM & OEM division by gaining market
share, especially in Sweden and a minor growth in Denmark, which will compensate for the expectedly reduced
business from Nordic OEM customers and the continuing difficult market situation in Finland.
During 2024, HydraSpecma intends to optimize its global footprint, including by merging the acquired company
in Denmark and China into existing companies in the respective countries and to finalize the merger process
in India. Furthermore, our companies outside of Europe will continue increasing production and sourcing lo-
cally.
If the present situation in the Gulf of Aden continues, it will have an impact on longer freight time and therefore
increasing freight costs.
As a result, HydraSpecma expects to generate FY 2024 revenue of DKK 2,9-3.2 billion and EBITDA in the
DKK 300-340 million range.
Capital resources
HydraSpecma derives a significant proportion of its financing from the cash reserves of its ultimate parent
company, Schouw & Co., and to a lesser extent from non-committed credit facilities.
The financing provided through Schouw & Co. consists mainly of a syndicated bank facility, which in Decem-
ber 2020 was refinanced with a total facility line of DKK 3,275 million.
The facility has a three-year term with an option for a one-year extension after the first and second year. The
first extension option was utilised in December 2021, and the second extension option was utilised in De-
cember 2022. The bank consortium consists of Danske Bank, DNB, Nordea as well as the international bank
Hongkong & Shanghai Banking Corporation (HSBC).
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Management commentary
Capital resources (continued)
Schouw & Co. issued Schuldscheins for EUR 136 million (DKK 1,013 million) in April 2019 and for EUR 225
million (DKK 1,677 million) in November 2023. The Schuldsheins mature in April 2024, April 2026, November
2026 and November 2030.
In December 2021, Schouw & Co. set up a DKK 400 million seven-year loan with the Nordic Investment
Bank related to specific Danish capacity-expanding investments and development costs.
In 2022 and 2023, Schouw & Co. established a number of term loans with Danske Bank, Nordea Bank,
DNB, HSBC and Jyske Bank, which currently total an outstanding amount of DKK 1,800 million, DKK 400
million of which matures in March 2024, while the remaining DKK 1,400 million matures in January 2025.
Like other of the major subsidiaries of the Schouw & Co. Group, HydraSpecma is a co-guarantor for the
above-mentioned facilities in the total amount of DKK 8,165 million, of which DKK 5,542 million had been
drawn at 31 December 2023. In addition, the Company has a number of minor facilities, established through
the Schouw & Co. Group’s global banker, HSBC, for a total amount of DKK 58 million, with drawings at 31
December 2023 amounting to DKK 47 million.
Debtor risk
Debtor creditworthiness is carefully monitored on an ongoing basis, and we perform in-depth credit assess-
ments of new customers and ongoing assessments of existing customers based on the risk in recent years.
We have insured some of our customers’ debts in some of our companies. For several years, HydraSpecma
has not recorded any material debtor losses.
Furthermore, debtor insurance regarding existing and new customer portfolios is reviewed on a current basis.
Risk factors
HydraSpecma has prepared a risk assessment of its business and IT-related matters. Based on the risk as-
sessment, the company has prepared action plans for mitigating risks in specific areas.
Financial risks are described in note 24.
IT
HydraSpecma focused on strengthening IT security during 2023, at both user and system levels, on enhancing
communications between group companies, reducing the number of ERP systems and on preparing a joint
infrastructure for all group companies.
R&D operations
On a regular basis, the company develops products within its main business areas in collaboration with cus-
tomers to provide solutions for new or amended, large or small systems as well as product optimisation solu-
tions to improve customer processes. Some of the solutions are developed for the customers and others are
developed with customers. R&D projects also include purely electronic and hybrid solutions for Power & Mo-
tion involving both hydraulic and electric components. We have a limited own development of products within
cooling, where we have obtained a patent.
Quality assurance
HydraSpecma holds ISO certification to current standards, and all companies are certified to ISO 9001:2015.
The companies that are suppliers to lorries and busses are also certified to IATF 16949.
Quality targets are applied in all parts of the supply chain, and new targets are set every year with defined
responsibilities. The work and follow-up on these targets contribute to ongoing improvements. Quality assur-
ance efforts also include preventive activities.
Knowledge resources
It is an essential prerequisite for the continued development of our business that we are able to attract, retain,
develop and motivate employees who have the necessary skills and capability. Important elements to support
this include the delegation of responsibility and competencies as well as cross-organisational solutions.
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Annual report 2023 | 14
Management commentary
Corporate responsibility and risk assessment
HydraSpecma has defined the group’s goals in terms of human rights, social and employee-related matters,
anti-corruption, business ethics as well as climate and the environment in cooperation with the parent company
Schouw & Co.
For HydraSpecma’s statutory reports on corporate responsibility and risk assessment pursuant to section 99a
of the Danish Financial Statements Act, please refer to the statutory report of Schouw & Co. The report is
available on Schouw & Co.’s website:
https://www.schouw.dk/ansvarlighed/corporate-governance.
Social issues and labour conditions
At HydraSpecma, we believe that results are created by people. We are committed to being a responsible
employer providing proper employment conditions, appropriate health and safety standards and a motivational
working environment for our employees.
> Accordingly, we do not accept child labour.
> We have committed to providing a safe and healthy working environment and, to that end, we take the
necessary steps to prevent industrial injuries.
> We respect the freedom of association and the right to collective bargaining.
> We observe applicable laws, rules and agreements on working hours, wages and salaries and holi-
days.
HydraSpecma’s code of conduct can be found on the HydraSpecma website.
https://www.hydraspecma.com/media/2510/code-of-conduct-hydraspecma.pdf
Human rights
HydraSpecma has business units in a number of countries around the world. Regardless of which country we
are in, we are committed to observing human rights and to treating our employees with dignity and respect.
We support and respect human rights as set out in the UN Universal Declaration of Human Rights and in the
conventions and recommendations of the ILO. All major companies of the HydraSpecma group are certified
to ISO 45001.
HydraSpecma’s code of conduct can be found on the HydraSpecma website.
https://www.hydraspecma.com/media/2510/code-of-conduct-hydraspecma.pdf
Anti-corruption and business ethics
HydraSpecma endeavours to maintain a high level of integrity and demonstrate ethical conduct. We combat
all forms of corruption, including bribery and facilitation payments.
Environmental matters and climate impact
The companies of the HydraSpecma group are involved in large-scale processing of commodities, and we
recognise the environmental impact of our production processes. Our ESG approach to climate and the envi-
ronment goes hand in hand with appropriate business acumen. We endeavour to protect the environment and
to continually reduce our emissions relative to production output.
All major manufacturing companies of the HydraSpecma group are certified to ISO 14001.
Our goals are to:
> reduce the overall environmental footprint of our value chain relative to production output
> reduce our energy consumption and carbon emissions relative to production output
> achieve more efficient use of materials
> reduce waste and increase recycling relative to production output.
HydraSpecma’s Environmental policy can be found on the HydraSpecma website.
https://www.hydraspecma.com/media/2831/hs_environmental_policy_2022.pdf
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Annual report 2023 | 15
Management commentary
Diversity
HydraSpecma is an international business with a natural level of diversity. In order to make the most of the
skills and talent available, the company makes it a priority to apply diversity throughout the organisation and
to ensure increased representation of diversity at its various management levels. HydraSpecma has a policy
on diversity and inclusion (DEI Policy), which is available on the company’s website, https://www.hy-
draspecma.com/store/dk/da/cms/dk-da/vores-dna/politikker.
The purpose of HydraSpecma’s policy on diversity and inclusion is for the company’s targets and efforts on
diversity to ensure a corporate culture supporting diversity. It is important that no barriers of opinion or as-
sumption (whether or not deliberate) exist that would restrict diversity or counteract equal employment or ca-
reer opportunities, regardless of age, gender, ethnicity etc. The company aims for relevant diversity to be
reflected at all levels of the organisation and considers diversity a strength that makes a positive contribution
to growth, risk management and value creation.
The policy specifies the company’s responsibility to promote a large degree of gender diversity in management.
HydraSpecma aims to be an attractive and stimulating workplace able to attract and retain the most qualified
employees and to provide equal career opportunities for all employees, regardless of gender. To support the
implementation of the policy in 2023 HydraSpecma has positive worked with recruitment and appointment
procedures to secure an inclusive culture for both genders and that when appointing managers, we must strive
to always have at least one candidate of each gender among the final candidates.
However, HydraSpecma will always appoint new employees on the basis of qualifications and skills without
regard to gender, race, nationality or sexual orientation.
HydraSpecma has for the first time defined a short-term tar-
get for the percentage of the under-represented gender in
both the top tier and other tiers of management, while also
setting a long-term target of having a minimum of 40% of
either gender at each management level. In addition, Hy-
draSpecma has implemented a joint HR and recruitment
system, which is intended to ensure a shared platform for a
uniform approach to HR and recruitment across the Group’s
country organisations and to support a focus on achieving
the short-term targets.
Dat
a ethics
At HydraSpecma, we believe that maintaining the highest standards of data integrity and transparency is es-
sential to gaining the trust of our business partners, employees and the general public.
HydraSpecma considers data ethics to be a core value for the way we run our business, and that a culture of
accountability is essential for success in a data-driven world that grows more and more complex with the
increasing use of advanced data.
For HydraSpecma’s statutory report on its data ethics policy pursuant to section 99d of the Danish Financial
Statements Act, please refer to the statutory report of Schouw & Co. in that company’s ESG report The report
is available on Schouw & Co.’s website: https://www.schouw.dk/ansvarlighed/corporate-governance.
2023 status
Top management
Number of members 6
Member of different gender 0%
Target in % 16,7%
Year for meeting target 2028
Remaining management level
Number of members 27
Member of different gender 22%
Target in % 25%
Year for meeting target 2028
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
1 January - 31 December
Note
2023 2022
1 Revenue
2.971.625 2.536.279
2 Cost of sales
(2.239.161) (1.866.964)
Gross profit
732.464 669.315
4 Other operating income
4.554 4.674
2 Distribution costs
(386.774) (350.168)
2, 3 Administrative expenses
(150.457) (112.376)
4 Other operating expenses
(122) (10)
EBIT
199.665 211.435
5 Profit after tax in associates
2.158 387
6 Financial income
14.425 12.670
7 Financial expenses
(54.124) (25.709)
Profit before tax
162.124 198.783
8 Tax on profit/loss for the year
(33.887) (41.752)
Profit for the year
128.237 157.031
Attributable to:
Parent company shareholders
103.281 106.173
Proposed dividend
25.000 50.000
Non-controlling interests
(44) 858
Profit for the year
128.237 157.031
Statement of comprehensive income
Items that can be reclassified to the income statement:
Foreign exchange adjustments of foreign subsidiaries
(6.004) (39.859)
Value adjustment of hedging instruments for the year
5.333 (4.094)
Other comprehensive income from associates
(401) (101)
Other adjustments recognised directly in equity
(896) (1.724)
Value adjustments transferred to financials
0 239
Value adjustments transferred to revenue
0 64
8 Tax on other comprehensive income
(1.173) 1.213
Other comprehensive income after tax
(3.141) (44.262)
Profit for the year
128.237 157.031
Total recognised comprehensive income
125.096 112.769
Attributable to:
Parent company shareholders
125.140 111.911
Non-controlling interests
(44) 858
Total recognised comprehensive income
125.096 112.769
Statements of income and comprehensive income
All amounts in DKK’000
Annual report 2023 | 16
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Consolidated balance sheet
at 31 December
Note
Assets
31.12.2023 31.12.2022
Goodwill
299.546 132.720
Finished development projects
4.328 0
Development projects in progress
21.624 0
Customer relations
136.830 37.629
Brands
10.472 15.632
Know-how
133.156 4.948
IT projects
13.036 12.096
9
Intangible assets
618.992 203.025
Land and buildings
331.898 206.633
Plant and machinery
93.775 79.578
Other fixtures and fittings, tools and equipment
37.137 29.747
Assets under construction, etc.
21.202 30.451
2, 10
Property, plant and equipment
484.012 346.409
5 Equity investments in associates
11.490 9.734
11 Lease assets
136.683 90.442
14 Deferred tax
1.820 2.894
Securities
21 21
13 Receivables
4.637 2.067
Other non-current assets
154.651 105.158
Total non-current assets
1.257.655 654.592
12 Inventories
743.904 661.017
13 Receivables
734.302 599.151
18 Income tax receivable
8.079 1.502
22 Cash and cash equivalents
73.938 28.863
Total current assets
1.560.223 1.290.533
Total assets
2.817.878 1.945.125
All amounts in DKK’000
Annual report 2023 | 17
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Consolidated balance sheet
at 31 December
Note
Liabilities and equity
31.12.2023 31.12.2022
Share capital
30.000 30.000
Hedge transaction reserve
225 (3.935)
Exchange-adjustment reserve
(96.803) (90.425)
Retained earnings
1.017.547 765.162
Proposed dividend
25.000 50.000
Equity attributable to parent company shareholders
975.969 750.802
Non-controlling interests
4.208 4.279
Total equity
980.177 755.081
14 Deferred tax
86.795 27.493
15 Provisions
11.562 10.383
16 Credit institutions
159.813 123.460
16 Debt to parent company
500.000 300.000
Non-current liabilities
758.170 461.336
16 Current portion of non-current liabilities
40.637 32.433
16 Credit institutions
1.610 10.255
16 Debt to parent company
524.284 227.210
17 Trade payables and other payables
491.724 435.989
15 Provisions
11.600 13.190
18 Income tax
9.676 9.631
Current liabilities
1.079.531 728.708
Total liabilities
1.837.701 1.190.044
Total equity and liabilities
2.817.878 1.945.125
23 - 31
Notes without reference
All amounts in DKK’000
Annual report 2023 | 18
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Consolidated cash flow statement
1 January - 31 December
Note
2023 2022
Profit before tax 162.124 198.783
Adjustment for non-cash operating items etc.:
2
Depreciation, amortisation and impairment losses 123.492 94.752
Other operating items, net 32.737 26.597
Provisions (631) (254)
5
Profit after tax in associates (2.158) (387)
6
Financial income (14.425) (12.670)
7
Financial expenses 54.124 25.709
Cash flows from operations before changes in working capital 355.263 332.530
19
Changes in working capital (73.371) (81.887)
Cash flows from operations before interest and tax 281.892 250.643
Interest received 9.138 1.147
Interest paid (51.834) (23.709)
Cash flows from ordinary operations 239.196 228.081
18
Income tax paid (48.541) (37.600)
Cash flows from operating activities 190.655 190.481
20
Purchase of intangible assets (7.188) (928)
20
Purchase of property, plant and equipment (165.682) (54.830)
Sale of property, plant and equipment 4.231 1.123
21
Acquisitions (477.642) (14.850)
Cash flows from investing activities (646.281) (69.485)
Loan financing:
Repayment of non-current liabilities (39.064) (46.501)
Proceeds from non-current liabilities incurred 0 60.560
Increase/repayment of amounts owed to group companies 449.870 (78.569)
Increase/repayment of bank overdrafts (8.763) (5.125)
Shareholders:
Capital contribution 150.000 0
Dividends paid (50.000) (50.000)
Cash flows from financing activities 502.043 (119.635)
Cash flows for the year 46.417 1.361
Cash and cash equivalents at 1 January 28.863 27.713
Value adjustment of cash and cash equivalents (1.342) (211)
22
Cash and cash equivalents at 31 December 73.938 28.863
All amounts in DKK’000
Annual report 2023 | 19
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Consolidated statement of changes in equity
At 31 December
Share
capital
Hedge
transac-
tion
reserve
Exchange-
adjustment
reserve
Retained
earnings
Proposed
dividend
Total
Non-
controlling
interests
Equity
Equity at 1 January 2022 30.000 (978) (50.685) 660.334 50.000 688.671 3.641 692.312
Changes in equity in 2022
0 0 (39.639) 0 0 (39.639) (220) (39.859)
0 239 0 0 0 239 0 239
0 64 0 0 0 64 0 64
0 (4.094) 0 0 0 (4.094) 0 (4.094)
0 0 0 (1.724) 0 (1.724) 0 (1.724)
Tax on changes in equity 0 834 0 379 0 1.213 0 1.213
0 0 (101) 0 0 (101) 0 (101)
Profit for the year 0 0 0 106.173 50.000 156.173 858 157.031
0 (2.957) (39.740) 104.828 50.000 112.131 638 112.769
Distributed dividends 0 0 0 0 (50.000) (50.000) 0 (50.000)
Total changes in equity in 2022 0 0 0 0 (50.000) (50.000) 0 (50.000)
Equity at 31 December 2022 30.000 (3.935) (90.425) 765.162 50.000 750.802 4.279 755.081
Changes in equity in 2023
0 0 (5.977) 0 0 (5.977) (27) (6.004)
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
0 5.333 0 0 0 5.333 0 5.333
0 0 0 (896) 0 (896) 0 (896)
Tax on changes in equity 0 (1.173) 0 0 0 (1.173) 0 (1.173)
0 0 (401) 0 0 (401) 0 (401)
Profit for the year 0 0 0 103.281 25.000 128.281 (44) 128.237
0 4.160 (6.378) 102.385 25.000 125.167 (71) 125.096
Capital contribution 0 0 0 150.000 0 150.000 0 150.000
Distributed dividends 0 0 0 0 (50.000) (50.000) 0 (50.000)
Total changes in equity in 2023 0 0 0 150.000 (50.000) 100.000 0 100.000
Equity at 31 December 2023 30.000 225 (96.803) 1.017.547 25.000 975.969 4.208 980.177
The share capital comprises 3,000 shares of DKK 10,000 each.
No special rights are attached to any share.
The share capital is fully paid up.
Total recognised comprehensive
income
Foreign exchange adjustments of
entities with functional currencies
other than Danish kroner
Hedging instruments transferred
to financials
Value adjustment of hedging
instruments for the year
Value adjustment of hedging
instruments for the year
Hedging instruments transferred
to financials
Foreign exchange adjustments of
entities with functional currencies
other than Danish kroner
Hedging instruments transferred
to revenue
Hedging instruments transferred
to revenue
Other comprehensive income,
associates
Total recognised comprehensive
income
Other adjustments recognised
directly in equity
Other adjustments recognised
directly in equity
Other comprehensive income,
associates
All amounts in DKK’000
Annual report 2023 | 20
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the consolidated financial statements
1 January – 31 December
Note
1
Revenue
Segments:
Global OEM
division
Local
IAM/OEM
division
Renewables
division
Total
Nordic region
511.501 897.057 373.353 1.781.911
Rest of Europe
423.708 20.091 171.751 615.550
Rest of world
127.959 14.661 431.544 574.164
Revenue i alt 1.063.168 931.809 976.648 2.971.625
Segments:
Global OEM
division
Local
IAM/OEM
division
Renewables
division
Total
Nordic region
451.714 904.211 218.492 1.574.417
Rest of Europe
415.453 21.627 97.518 534.598
Rest of world
131.729 17.378 278.157 427.264
Revenue i alt 998.896 943.216 594.167 2.536.279
2
Costs
2023 2022
Cost of sales
Cost of sales for the year includes costs of goods sold in the amount of 1.796.729 1.479.582
Cost of sales for the year includes inventory write-downs in the amount of 27.183 18.555
(7.519) (6.511)
Staff costs
Wages, salaries and fees
479.768 412.752
Defined contribution pension plans
51.055 44.233
Other social security costs
76.263 72.337
Share-based payment
4.309 3.524
Total staff costs recognised in the income statement 611.395 532.846
Staff costs are recognised as follows:
Production
303.228 262.137
Distribution
238.060 218.672
Administration
65.188 52.037
Total staff costs recognised in the income statement 606.476 532.846
Average no. of employees
1.452 1.274
Staff costs include the following amounts for the Executive Management and senior managers: sala-
ries and bonuses (current) of DKK 10,122 thousand (2022: DKK 8,591 thousand), pension contribu-
tions of DKK 1,583 thousand (2022: DKK 1,066 thousand) and share-based payment of DKK 4,309
thousand (2022: DKK 3,525 thousand), totalling DKK 16,014 thousand (2022: DKK 13,182 thousand).
Staff costs also include remuneration of the Board of Directors of DKK 500 thousand (DKK 375
thousand). Total remuneration of Management amounted to DKK 13,557 thousand (DKK 11,908
thousand).
2023
2022
Cost of sales for the year includes reversed inventory write-downs due to
sales in the amount of
The internal management and segment reporting was changed in connection with the acquisition of
Ymer Renewable AB in 2023. The comparative figures have been restated accordingly.
All amounts in DKK’000
Annual report 2023 | 21
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the consolidated financial statements
1 January – 31 December
Note
2
Costs (continued)
Share-based payment: Share option programme
Outstanding
options
Execu-
tive
Manage-
ment
Other Total
Exercise
price
(DKK) *)
Fair
value
(DKK)
per
option **)
Total fair
value
(DKK
’000) **)
Exercisa-
ble from
Exercisa-
ble until
Granted in 2019 20.000 26.000 46.000 574,35 71,47 3.288 March 22 March 23
Granted in 2020 27.000 10.000 37.000 523,42 44,10 1.632 March 23 March 24
Granted in 2021 32.000 16.000 48.000 678,19 125,37 6.018 March 24 April 25
Granted in 2022 32.000 16.000 48.000 527,07 68,35 3.281 March 25 April 26
Total outstanding
options at 31
December 2022
111.000 68.000 179.000
Lapsed from 2019
grant
(20.000) (26.000) (46.000) 574,35 71,47
Granted in 2023 32.000 22.000 54.000 577,50 96,55 5.214 March 26 April 27
Lapsed from 2020
grant
(27.000) (10.000) (37.000)
Total outstanding
options at 31
December 2023
96.000 54.000 150.000
*) On exercise after four years (at the latest possible date)
**) At the date of grant
Expected volatility
Expected term
Expected dividend
per share
Risk-free interest
rate
14 kr.
49 mo.
31,58%
2021 grant
2,66%
2020 grant
-0,54%
15 kr.
47 mo.
25,03%
2023 grant
-0,17%
The Executive Management and senior managers of the HydraSpecma Group are covered by the
share option programme of the parent company, Schouw & Co. The programme entitles participants
to acquire shares in Aktieselskabet Schouw & Co. at a price based on the officially quoted price at
the date of grant (2023: DKK 567.60) plus a premium (2023: 2%) from the date of grant until the date
of exercise. The exercise price is adjusted by deduction of ordinary dividends, which cannot exceed
the accrued interest. Costs relating to the option programme are calculated on the basis of the Black
& Scholes model and are expensed under staff costs on a straight-line basis over the option period
and settled with the parent company.
The following assumptions were applied in calculating the fair value of outstanding share options at
the date of grant:
24,82%
2022 grant
22,21%
There were in 2023 leapsed 37.000 options from 2020 at an average rate of 512,53 kr. The 2019
-0,97%
13 kr.
48 mo.
14 kr.
49 mo.
All amounts in DKK’000
Annual report 2023 | 22
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the consolidated financial statements
1 January – 31 December
Note
2
Costs (continued)
The expected volatility is calculated on the basis of 12 months’ historical volatility based on average
prices. If the option holders have not exercised their share options within the period specified, the
share options will lapse without any compensation to the holders. Exercise of the share options is
subject to the holders being in continuing employment during the above-mentioned periods. If the
share option holder leaves the Company’s employ before a share option vests, the holder may in
some cases have a right to exercise the share options early during a four-week period following
Schouw & Co.’s next following profit announcement. In the event of early exercise, the number of
share options will be reduced proportionately.
All amounts in DKK’000
Annual report 2023 | 23
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the consolidated financial statements
1 January - 31 December
Note
2023 2022
2 Costs (continued)
Depreciation, amortisation and impairment losses
Amortisation of intangible assets 39.593 20.928
Depreciation of property, plant and equipment 45.779 42.981
Depreciation of lease assets 38.120 30.843
Total depreciation, amortisation and impairment losses 123.492 94.752
Depreciation/amortisation and impairment is recognised in the income statement as follows:
Production 47.701 42.605
Distribution 62.677 41.499
Administration 13.114 10.648
Total depreciation, amortisation and impairment losses 123.492 94.752
3
Fees to auditors appointed by the general meeting
Statutory audit fees 1.452 1.202
Fees for tax and VAT-related services 37 30
Non-audit services 167 2.386
Total fees, auditors appointed by the general meeting 1.656 3.618
Statutory audit fees, other auditors 1.150 568
Non-audit services, other auditors 21 19
Fees for tax and VAT-related services, other auditors 43 44
Total fees, other auditors 1.214 631
4
Other operating income and expenses
Gains on disposal of property, plant and equipment and intangible assets 2.178 536
Other operating income 2.376 4.138
Total other operating income 4.554 4.674
Loss on disposal of property, plant and equipment and intangible assets 122 0
Other operating expenses 0 10
Total other operating expenses 122 10
All amounts in DKK’000
Annual report 2023 | 24
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the consolidated financial statements
1 January - 31 December
Note
2023 2022
5 Equity investments in associates
Cost at 1 January 6.869 6.869
Cost at 31 December 6.869 6.869
Adjustments at 1 January 2.865 2.579
Foreign exchange adjustments (402) (101)
Share of profit for the year 2.158 387
Adjustments at 31 December 4.621 2.865
Carrying amount at 31 December 11.490 9.734
The Group has the following associates:
Equity
interest
Equity
interest
Name Registered office
31.12.2023 31.12.2022
Young Tech Company Ltd. Changwon, South Korea 30% 30%
Micron Specma India (Pvt.) Ltd. Rohtak, Haryana, India 25% 25%
NGIN A/S Aarhus, Denmark 40% 40%
2023 2022
6 Financial income
Interest income, group companies 527 36
Foreign exchange adjustments 11.474 11.487
Other interest income 2.424 1.147
Total financial income 14.425 12.670
7
Financial expenses
Interest expenses, group companies 34.238 18.582
Foreign exchange adjustments 9.004 2.000
Interest expenses, lease debt 4.527 2.965
Other interest expenses 6.355 2.162
Total financial expenses 54.124 25.709
For lease assets we refer to note 11 and for lease liabilities we refer to note 16.
All amounts in DKK’000
Annual report 2023 | 25
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the consolidated financial statements
1 January - 31 December
Note
2023 2022
8 Tax on profit/loss for the year
Tax on the profit for the year is specified as follows:
Tax on profit/loss for the year 33.887 41.752
Tax on other comprehensive income 1.173 (834)
Total tax 35.060 40.918
Tax on the profit for the year has been calculated as follows:
Current tax 41.004 45.114
Deferred tax (7.117) (1.858)
Adjustment of prior-year tax charge 0 (1.504)
Total tax recognised in the income statement 33.887 41.752
Specification of the tax on the profit for the year:
Computed 22,0% tax on profit before tax 35.667 43.732
(876) (2.284)
Adjustment of prior-year tax charge 0 (653)
Tax in foreign subsidiaries adjusted relative to 22% (1.373) (1.342)
Tax effect of non-deductible costs and non-taxable income 469 2.299
Total tax recognised in the income statement 33.887 41.752
Effective tax rate 20,9% 21,0%
Before tax Tax After tax
Foreign exchange adjustments of foreign units, etc. (5.977) 0 (5.977)
Hedging instruments for the year 5.333 (1.173) 4.160
Other adjustments recognised directly in equity (896) 0 (896)
Other comprehensive income from associates (401) 0 (401)
(1.941) (1.173) (3.114)
Before tax Tax After tax
Foreign exchange adjustments of foreign units, etc. (39.639) 0 (39.639)
Hedging instruments transferred to financials 239 (53) 186
Hedging instruments transferred to revenue 64 (14) 50
Hedging instruments for the year (4.094) 901 (3.193)
Other comprehensive income from associates (101) 0 (101)
(43.531) 834 (42.697)
Total tax on items recognised in other comprehensive
income
Total tax on items recognised in other comprehensive
income
Non-capitalised tax asset
2022
2023
Tax on items recognised in other comprehensive
income
Tax on items recognised in other comprehensive
income
All amounts in DKK’000
Annual report 2023 | 26
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the consolidated financial statements
at 31 December
Note
9
Intangible assets
Goodwill
Finished
develop-
ment
projects
Develop-
ment
projects
in
progress
Custo-
mer
relations
Brands
Know-
how
IT
projects
Total
Cost at 1 January 132.720 0 0 97.841 52.087 16.516 49.724 348.888
Foreign exchange
adjustments
(5.250) 396 792 (1.139) 236 (1.744) 2.579 (4.130)
Additions 0 6.617 0 0 0 571 7.188
Additions on com-
pany acquisitions
172.076 8.517 14.215 118.136 0 140.116 996 454.056
Transferred/
reclassified
0 0 0 0 0 332 332
Cost at 31
December
299.546 8.913 21.624 214.838 52.323 154.888 54.202 806.334
Amortisation and
impairment at 1
January
0 0 0 (60.212) (36.455) (11.568) (37.628) (145.863)
Foreign exchange
adjustments
0 0 0 (761) (336) (382) (75) (1.554)
Amortisation 0 (4.585) 0 (17.035) (5.060) (9.782) (3.131) (39.593)
Transferred/
reclassified
0 0 0 0 0 0 (332) (332)
Amortisation and
impairment at 31
December
0 (4.585) 0 (78.008) (41.851) (21.732) (41.166) (187.342)
Carrying amount
at 31 December
299.546 4.328 21.624 136.830 10.472 133.156 13.036 618.992
Amortised over 3 years
10-15
years
10 years
10-15
years
3-10
years
31.12.2023
All amounts in DKK’000
Annual report 2023 | 27
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the consolidated financial statements
at 31 December
Note
9
Intangible assets (continued)
Goodwill
Finished
develop-
ment
projects
Develop-
ment
projects
in
progress
Custo-
mer
relations
Brands
Know-
how
IT
projects
Total
Cost at 1 January 142.975 0 0 96.540 56.516 17.920 52.216 366.167
Foreign exchange
adjustments
(10.255) 0 0 (6.528) (4.429) (1.404) (1.181) (23.797)
Additions 0 0 0 0 0 0 928 928
Additions on com-
pany acquisitions
0 0 0 7.829 0 0 0 7.829
Disposals 0 0 0 0 0 0 (2.239) (2.239)
Cost at 31
December
132.720 0 0 97.841 52.087 16.516 49.724 348.888
Amortisation and
impairment at 1
January
0 0 0 (53.898) (33.904) (10.758) (35.537) (134.097)
Foreign exchange
adjustments
0 0 0 3.914 2.657 843 1.237 8.651
Amortisation and
impairment of
assets disposed
of
0 0 0 0 0 0 511 511
Amortisation 0 0 0 (10.228) (5.208) (1.653) (3.839) (20.928)
Amortisation and
impairment at 31
December
0 0 0 (60.212) (36.455) (11.568) (37.628) (145.863)
Carrying amount
at 31 December
132.720 0 0 37.629 15.632 4.948 12.096 203.025
Amortised over
3 years 10 years 10 years 10 years
3-10
years
31.12.2022
All amounts in DKK’000
Annual report 2023 | 28
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the consolidated financial statements
at 31 December
Note
9
Intangible assets (continued)
Revenue
growth
WACC
after tax
WACC
before tax
2023 5,0% 8,0% 9,8%
2022 6,7% 8,8% 10,7%
HydraSpecma had other recognised intangible assets of DKK 319,5 million at 31 December 2023.
During the year, there were additions of Customer relations, Know-how and Development projects in
connection with acquisitions and IT projects. There are no indications of impairment of other
intangible assets.
The discount rate (WACC) was estimated on the basis of available market data and an assessment
of the risk profile of the entity. Specifically, a risk-free interest rate based on the current yield of a 10-
year government bond in the relevant geography plus an estimated market-risk premium are used to
estimate the required rate of return on equity. An estimated risk premium is added, depending on geo-
graphy. The required rate of return on debt is based on an estimated credit assessment of the entity
and the current interest rate level. The required rates of return on debt and equity, as set out below,
are weighted using a capital structure based on a group of company peers.
Assumptions
The impairment test performed at 31 December 2023 did not result in a write-down.
Sensitivity analyses were performed as part of the tests to determine if reduced cash flows or a
higher WACC would produce evidence of impairment. The sensitivity analyses showed that likely
changes in basic assumptions would not produce evidence of impairment.
The Management of HydraSpecma Group has tested the value in use of the carrying amount against
goodwill in the companies the group. In the tests performed, the Management has estimated the
expected free cash flow for a five-year budget and forecast period of the years 2024-2028. The free
cash flow after tax has been applied to a discounted cash flow model (the “value in use” principle) for
the purpose of assessing each CGU value which subsequently is compared against the carrying
amount recognised in HydraSpecma Group consolidated financial statements. As of 31 December
2023, HydraSpecma Group has recognised goodwill at a total value of DKKm 300 compared with
DKK 133 million in 2022. where DKK 172 million before exchanges adjustment are allocated to the
new acquired companies from Ymer Technology AB, and the rest are allocated to Specma.
All amounts in DKK’000
Annual report 2023 | 29
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the consolidated financial statements
at 31 December
Note
10
Property, plant and equipment
Land and
buildings
Plant and
machinery
Other
fixtures and
fittings, tools
and
equipment
Assets under
construction
Total
Cost at 1 January 288.495 221.528 101.210 30.451 641.684
Foreign exchange adjustments 7.983 3.235 596 1.097 12.911
1.344 4.999 2.810 0 9.153
Additions 3.145 31.805 17.049 113.683 165.682
Disposals (287) (1.565) (6.245) 0 (8.097)
Transferred/reclassified 121.613 1.666 750 (124.029) 0
Cost at 31 December 422.293 261.668 116.170 21.202 821.333
(81.862) (141.950) (71.463) 0 (295.275)
Foreign exchange adjustments 88 (1.394) (448) 0 (1.754)
52 397 5.038 0 5.487
Depreciation (8.673) (24.849) (12.257) 0 (45.779)
Transferred/reclassified 0 (97) 97 0 0
(90.395) (167.893) (79.033) 0 (337.321)
331.898 93.775 37.137 21.202 484.012
Depreciated over
10-50 years 5-10 years 3-7 years
4.807 1.529
31.12.2023
Liability at 31 December re.
purchase of property, machinery
and equipment
Carrying amount at 31
December
Depreciation and impairment at
1 January
Depreciation and impairment of
assets disposed of
Depreciation and impairment at
31 December
Additions on company
acquisitions
All amounts in DKK’000
Annual report 2023 | 30
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the consolidated financial statements
at 31 December
Note
10
Property, plant and equipment (continued)
Land and
buildings
Plant and
machinery
Other
fixtures and
fittings, tools
and
equipment
Assets under
construction
Total
Cost at 1 January 291.664 213.259 96.763 12.290 613.976
Foreign exchange adjustments (8.734) (8.407) (3.749) (771) (21.661)
10 770 275 0 1.055
Additions 6.166 9.560 8.733 30.371 54.830
Disposals (611) (2.402) (3.503) 0 (6.516)
Transferred/reclassified 0 8.748 2.691 (11.439) 0
Cost at 31 December 288.495 221.528 101.210 30.451 641.684
(75.252) (126.041) (65.522) 0 (266.815)
Foreign exchange adjustments 934 5.354 2.454 0 8.742
611 1.989 3.179 0 5.779
Depreciation (8.155) (23.252) (11.574) 0 (42.981)
Transferred/reclassified 0 0 0 0 0
(81.862) (141.950) (71.463) 0 (295.275)
206.633 79.578 29.747 30.451 346.409
Depreciated over
10-50 years 5-10 years 3-7 years
103.929 13.056
Depreciation and impairment at
1 January
Depreciation and impairment of
assets disposed of
Depreciation and impairment at
31 December
Carrying amount at 31
December
Additions on company
acquisitions
31.12.2022
Liability at 31 December re.
purchase of property, machinery
and equipment
All amounts in DKK’000
Annual report 2023 | 31
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the consolidated financial statements
at 31 December
Note
11
Lease assets
Property
Other fix-
tures and
fittings, tools
and equip-
ment
Total
Cost at 1 January 167.280 18.701 185.981
Foreign exchange adjustments (1.078) 154 (924)
Additions 59.933 5.770 65.703
Disposals (11.688) (6.759) (18.447)
Modifications 19.759 677 20.436
Cost at 31 December 234.206 18.543 252.749
Depreciation and impairment at 1 January (84.007) (11.532) (95.539)
Foreign exchange adjustments 450 (36) 414
Depreciation and impairment of assets disposed of 10.434 6.745 17.179
Depreciation (33.558) (4.562) (38.120)
Depreciation and impairment at 31 December
(106.681) (9.385) (116.066)
Carrying amount at 31 December 127.525 9.158 136.683
Depreciated over
5-10 years 2-7 years
Services
Low-value
leases
Leases with
terms of less
than 1 year
Total
Less than 1 year 345 2.153 0 2.498
1-5 years 375 1.481 0 1.856
More than 5 years 0 0 0 0
Total
720 3.634 0 4.354
Lease liabilities recognised in the balance sheet are detailed in note 16.
Services
Low-value
leases
Leases with
terms of less
than 1 year
Total
Expense for the year 355 3.230 0 3.585
Liability at 31 December for leases entered into 0
Lease payments amount to DKK 44,922 thousand (2022: DKK 37,121 thousand)
For lease interests we refer to note 7 and for lease liabilities we refer to note 16.
31.12.2023
31.12.2023
Lease liabilities not recognised in the balance
sheet
Recorded in the income statement
All amounts in DKK’000
Annual report 2023 | 32
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the consolidated financial statements
at 31 December
Note
11
Lease assets (comtinued)
Property
Other fix-
tures and
fittings, tools
and equip-
ment
Total
Cost at 1 January 156.647 17.738 174.385
Foreign exchange adjustments (7.764) (695) (8.459)
Additions 18.564 3.220 21.784
Disposals (2.942) (2.570) (5.512)
Modifications 2.775 1.008 3.783
Cost at 31 December 167.280 18.701 185.981
Depreciation and impairment at 1 January (64.961) (9.547) (74.508)
Foreign exchange adjustments 3.902 398 4.300
Depreciation and impairment of assets disposed of 2.942 2.570 5.512
Depreciation (25.890) (4.953) (30.843)
Depreciation and impairment at 31 December
(84.007) (11.532) (95.539)
Carrying amount at 31 December 83.273 7.169 90.442
Depreciated over
5-10 years 2-7 years
Services
Low-value
leases
Leases with
terms of less
than 1 year
Total
Less than 1 year 273 1.776 0 2.049
1-5 years 269 738 0 1.007
More than 5 years 0 0 0 0
Total
542 2.514 0 3.056
Recorded in the incom
Services
Low-value
leases
Leases with
terms of less
than 1 year
Total
Expense for the year 312 2.509 0 2.821
31.12.2023 31.12.2022
12 Inventories
Raw materials and consumables
152.026 119.658
Work in progress 35.610 31.618
Finished goods and goods for resale 556.268 509.741
Total inventories 743.904 661.017
Cost of inventories for which impairment losses have been recognised 140.918 130.477
Accumulated impairment losses on inventories (100.268) (88.963)
Net sales value 40.650 41.514
31.12.2022
31.12.2022
Lease liabilities not recognised in the balance
sheet
All amounts in DKK’000
Annual report 2023 | 33
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the consolidated financial statements
at 31 December
Note
31.12.2023 31.12.2022
13 Receivables
Receivables (non-current) 4.637 2.067
Trade receivables 638.354 563.331
Other receivables 23.661 14.267
Receivable from parent company 52.548 9.687
Prepaid expenses 19.739 11.866
Total receivables 738.939 601.218
Impairment losses on receivables:
Impairment losses 1 January (4.843) (2.594)
Foreign exchange adjustments (9) 353
Impairment losses for the year 101 (2.633)
Realised loss 553 31
Total impairment losses (4.198) (4.843)
Trade receivables are specified as follows:
31.12.2023 1-30 days 31-90 days >90 days Total
Trade receivables 555.593 61.344 13.629 11.986 642.552
0 (403) (1.197) (2.598) (4.198)
Trade receivables, net 555.593 60.941 12.432 9.388 638.354
Proportion of total receivables expected to be settled
99,3%
0,0% 0,7% 8,8% 21,7% 0,7%
31.12.2022 1-30 days 31-90 days >90 days Total
Trade receivables 490.276 52.844 16.020 9.034 568.174
(570) (502) (1.021) (2.750) (4.843)
Trade receivables, net 489.706 52.342 14.999 6.284 563.331
Proportion of total receivables expected to be settled
99,1%
Impairment rate
0,1% 0,9% 6,4% 30,4% 0,9%
Due between (days)
Impairment losses on trade
receivables
Not fallen due
Impairment rate
Due between (days)
No significant trade receivables are impaired at the balance sheet date, and 99,3% of receivables are
expected to be settled. There is a constant follow-up on overdue debtors.
No collateral has been received for trade receivables.
Not fallen due
Impairment losses on trade
receivables
Impairment losses on receivables have been calculated according the credit loss-model under IFRS
9. As the Group’s principal customers are well-capitalised global enterprises, receivables have not
historically been subject to significant impairment losses.
All amounts in DKK’000
Annual report 2023 | 34
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the consolidated financial statements
at 31 December
Note
31.12.2023 31.12.2022
14
Deferred tax
Deferred tax at 1 January 24.599 26.652
Foreign exchange adjustments (159) (1.903)
Additions on acquisitions 66.479 1.815
Deferred tax for the year recognised in profit/loss for the year (7.117) (1.858)
Deferred tax for the year recognised in equity 1.173 272
Other adjustments 0 (379)
Deferred tax at 31 December, net 84.975 24.599
Deferred tax Deferred tax is recognised as follows in the statement of financial position:
Deferred tax (asset) (1.820) (2.894)
Deferred tax (liability) 86.795 27.493
Deferred tax at 31 December, net 84.975 24.599
Deferred tax pertains to:
Intangible assets 68.789 12.776
Property, plant and equipment 8.173 7.710
Current assets (3.557) (4.107)
Equity 12.939 10.065
Provisions 0 (151)
Other liabilities (1.369) (1.694)
Deferred tax at 31 December, net 84.975 24.599
Tax losses with an aggregate value for tax purposes of DKK 3.282 thousand (2022: DKK 5,123
thousand) have not been recognised because it is considered unlikely that the deferred tax assets will
be realised. The tax loss can be carried forward indefinitely.
Capitalised deferred tax is expected to be utilised by being set off against future positive taxable
income.
The group has applied the temporary exception issued by IASB in May 2023 from the accounting
requirements for deferred taxes in IAS 12. Accordingly, the group neither recognizes nor discloses
information about deferred tax assets and liabilities to Pillar Two income taxes.
All amounts in DKK’000
Annual report 2023 | 35
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the consolidated financial statements
at 31 December
Note
14
Deferred tax (continued)
Change in deferred tax
Balance at
1 January
Foreign
exchange
adjustments
Additions on
acquisitions
Recognised
in the profit
for the year
Recognised
in equity
Balance at
31
December
Intangible assets 12.776 (81) 65.924 (9.830) 0 68.789
Property, plant and
equipment
7.710 0 555 (92) 0 8.173
Receivables (952) 10 0 1.237 0 295
Inventories (3.356) (8) 0 (954) 0 (4.318)
Other assets 201 2 0 263 0 466
Equity 10.065 14 0 1.687 1.173 12.939
Provisions
(151) 0 0 151 0 0
Other liabilities (1.694) (96) 0 421 0 (1.369)
Total change in
deferred tax
24.599 (159) 66.479 (7.117) 1.173 84.975
Balance at
1 January
Foreign
exchange
adjustments
Additions on
acquisitions
Recognised
in the profit
for the year
Recognised
in equity
Balance at
31
December
Intangible assets 15.948 (1.139) 1.815 (3.469) (379) 12.776
Property, plant and
equipment
10.245 (732) 0 (1.803) 0 7.710
Receivables (49) 3 0 (906) 0 (952)
Inventories (3.279) 234 0 (311) 0 (3.356)
Other assets 210 (15) 0 6 0 201
Equity 8.154 (582) 0 2.221 272 10.065
Provisions
(5.405) 386 0 4.868 0 (151)
Other liabilities 828 (58) 0 (2.464) 0 (1.694)
Total change in
deferred tax
26.652 (1.903) 1.815 (1.858) (107) 24.599
31.12.2023
31.12.2022
All amounts in DKK’000
Annual report 2023 | 36
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the consolidated financial statements
at 31 December
Note
31.12.2023 31.12.2022
15 Provisions
Provisions at 1 January 23.573 24.579
Foreign exchange adjustments 38 (715)
Used for the year (12.981) (8.459)
Reversed for the year (1.694) (191)
Provided for the year 14.226 8.359
Provisions at 31 December 23.162 23.573
Expected due dates:
Non-current 11.562 10.383
Current 11.600 13.190
Provisions at 31 December 23.162 23.573
16
Interest-bearing debt
Debt recognised in the balance sheet:
Mortgage debt (non-current) 55.631 57.602
Lease debt (non-current) 104.182 65.858
Debt to parent company (non-current) 500.000 300.000
Total recognised as non-current interest-bearing debt 659.813 423.460
Mortgage debt (current) 2.129 2.389
Lease debt (current) 38.508 30.044
Credit institutions (current) 1.610 10.255
Debt to parent company (current) 524.284 227.210
Recognised in current interest-bearing debt 566.531 269.898
Total interest-bearing debt 1.226.344 693.358
Fair value of interest-bearing debt 1.226.383 694.434
For lease interests we refer to note 7 and for lease assets we refer to note 11.
Provisions include contractual guarantees of 1-5 years.
All amounts in DKK’000
Annual report 2023 | 37
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the consolidated financial statements
at 31 December
Note
16
Interest-bearing debt (continued)
Maturity profile of interest-bearing debt
31.12.2023 31.12.2022 31.12.2023 31.12.2022 31.12.2023 31.12.2022
Overdraft facilities
without planned
repayment
525.894 237.465 0 0 525.894 237.465
Less than 1 year 63.595 43.958 22.958 11.525 40.637 32.433
1-5 years 650.247 392.530 43.993 25.189 606.254 367.341
More than 5 years 60.926 64.690 7.367 8.571 53.559 56.119
Total 1.300.662 738.643 74.318 45.285 1.226.344 693.358
Spot rate used for floating rate loans in the table above.
Whereoff leasing amounts to:
Less than 1 year 43.017 32.549 4.509 2.505 38.508 30.044
1-5 years 105.114 61.842 6.829 4.007 98.285 57.835
More than 5 years 5.988 8.298 91 275 5.897 8.023
Total 154.119 102.689 11.429 6.787 142.690 95.902
Interest rate risk
Fixed rate
Floating
rate
Total Fixed rate Floating rate Total
Interest-bearing
debt
0 1.226.344 1.226.344 0 693.358 693.358
Net exposure 0 1.226.344 1.226.344 0 693.358 693.358
31.12.2023 31.12.2022
17
Trade payables and other payables
Trade payables 350.607 309.915
Customer prepayments 73 626
Debt to parent company – non-interest-bearing 0 6.511
Other debt 141.044 118.937
Total trade payables and other payables 491.724 435.989
Substantially all trade payables and other payables fall due within one year.
Carrying amount
The Group hedges parts of the interest rate risk on its debt subject to a case-by-case assessment. In
addition to expectations for interest rate developments, such assessment includes the amount of the
total floating rate debt relative to equity. Hedging normally consists of interest rate swaps and interest
rate caps. All interest rate swaps and rate caps are used to hedge underlying loans/credit facilities.
There were no interest rate swaps at 31 December 2023.
A +/- 1% change in the interest rate level would increase/reduce financial expenses by approx. DKK
12.3 million.
Principal repayment
Interest
31.12.2023
31.12.2022
All amounts in DKK’000
Annual report 2023 | 38
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the consolidated financial statements
1 January - 31 December
Note 31.12.2023 31.12.2022
18 Income tax
Income tax payable at 1 January
8.129 3.037
Foreign exchange adjustments (199) 239
Additions on company acquisitions 1.204 0
Adjustment related to prior years
0 (1.504)
Current tax for the year 41.004 45.114
Taxes due recognised in equity 0 (1.157)
Income tax paid during the year (48.541) (37.600)
Income tax at 31 December 1.597 8.129
which is specified as follows:
Income tax receivable (8.079) (1.502)
Income tax payable 9.676 9.631
Income tax at 31 December 1.597 8.129
19
Changes in working capital
Change in inventories (17.591) (78.924)
Change in receivables 8.929 (43.682)
Change in trade payables and other payables (64.709) 40.719
Total changes in working capital (73.371) (81.887)
20
Adjustment for non-cash transactions
Purchase of intangible assets, see note 9 7.188 928
Paid relating to purchase of intangible assets 7.188 928
Purchase of property, plant and equipment, see note 10 165.682 54.830
Paid relating to purchase property plant and equipment 165.682 54.830
Financial liabilities incurred 65.703 96.435
of which lease debt (65.703) (35.875)
Proceeds from incurring financial liabilities 0 60.560
All amounts in DKK’000
Annual report 2023 | 39
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the consolidated financial statements
at 31 December
Note
2023 2022
21
Acquisition of subsidiaries and operations
Specification of acquired assets and liabilities at the acquisition date:
Intangible assets 281.980 7.829
Property, plant and equipment 9.153 1.055
Other financial assets 3.051 0
Inventories 92.683 7.935
Receivables 77.107 6.008
Cash and cash equivalents 39.574 275
Trade payables (51.731) (3.648)
Other debt (40.198) (2.514)
Deferred tax (66.479) (1.815)
Net assets acquired 345.140 15.125
Goodwill 172.076 0
Consideration 517.216 15.125
Of which cash and cash equivalents (39.574) (275)
Cash consideration 477.642 14.850
22
Cash and cash equivalents
Cash and cash equivalents 73.938 28.863
Total cash and cash equivalents 73.938 28.863
23
Categories of financial assets and liabilities
Financial assets
Non-current assets
Other investments and securities (other shareholdings)
21 21
Available-for-sale financial assets *)
21 21
Other receivables
4.637 2.067
Other receivables at amortised cost
4.637 2.067
Current assets
Trade receivables
638.354 563.331
Other receivables
23.369 12.798
Receivable from parent company
52.548 9.687
Cash and cash equivalents
73.938 28.863
Receivables
788.209 614.679
Other receivables (derivative financial instruments)
292 1.469
Trading portfolio **)
292 1.469
The goodwill of DKK 172 million comprises the value af extpected synergies arising from the
acquisition. None of the goodwill recognised is expected to be deductible for income tax purposes.
On 1. February 2023, the Group acquired 100% of Ymer Technology AB's Wind business in order to
strengthen the Group’s position in the Renewables market.
From the date of acquisition, the acquired companies contributed with DKK 445 million in revenue
and DKK 4,6 million in loss after tax.
All amounts in DKK’000
Annual report 2023 | 40
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the consolidated financial statements
at 31 December
Note
2023 2022
23
Categories of financial assets and liabilities (continued)
Financial liabilities
Non-current liabilities
Debt to mortgage-credit institutions
55.631 57.602
Other credit institutions
104.182 65.858
Debt to parent company
500.000 300.000
Financial liabilities at amortised cost
659.813 423.460
Current liabilities
Debt to mortgage-credit institutions
2.129 2.389
Debt to parent company
524.284 227.210
Other credit institutions
40.118 40.299
Trade payables and other debt
491.724 429.478
Financial liabilities at amortised cost
1.058.255 699.376
Other debt (derivative financial instruments)
0 6.511
Trading portfolio **)
0 6.511
*) Unlisted shares, stated at estimated value (level 3)
24
Financial risk
The Company’s risk management policy
Interest rate risks are described in greater detail in note 16.
Currency risk
A 5% depreciation of currencies in which group companies have significant exposure, based on the
companies’ functional currency, would impact profit for the year by about DKK 4,649 thousand (2022:
DKK 350 thousand). The amounts are based on the group companies’ balance sheet items at 31
December 2023.
Due to the currency peg to the Euro, no real currency risk is considered to exist between DKK and
EUR, and this is therefore omitted from the table below.
Set out in the table below is the Group's overall foreign exchange position at 31 December,
determined by aggregating the gross currency risks of the individual group companies.
It is the Group’s policy to hedge significant transaction risks related to future income streams not
naturally covered through purchases and sales. As a general rule, currency risks are hedged by way
of forward contracts with a duration of up to 12 months. The market value of currency hedges was an
asset of DKK 292 thousand (2022: An asset of DKK 1,469 thousand and a liability of 6,510 thousand).
**) Financial instruments valued by external credit institutions using generally accepted valuation
techniques on the basis of observable data (level 2).
Due to the nature of its operations, investments and financing, the Group is exposed to changes in
exchange rates and interest rates. The Group's policy is to not actively speculate in financial risk.
Accordingly, the Group’s financial management exclusively involves the management of financial risk
relating to its operations and investments.
All amounts in DKK’000
Annual report 2023 | 41
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the consolidated financial statements
at 31 December
Note
24
Financial risk (continued)
The Group’s currency risks in the balance sheet at 31 December 2023 translated to DKK
Currency
Securities
and cash
Cash and
receivables
Liabilities
Position
before
hedging
Hedged
using
financial
instruments
Position
after
hedging
USD/DKK 0 2.352 (41.796) (39.444) 0 (39.444)
DKK/USD 0 0 (17.159) (17.159) 0 (17.159)
SEK/DKK 0 116.822 (77.378) 39.444 0 39.444
NOK/DKK 0 443 0 443 0 443
EUR/GBP 0 25.977 (17.735) 8.242 0 8.242
USD/GBP 0 19.579 (412) 19.167 0 19.167
DKK/SEK 0 263 (84.594) (84.331) 0 (84.331)
USD/CNY 0 12.128 (480) 11.648 0 11.648
USD/SEK 0 4.350 (10.977) (6.627) 0 (6.627)
EUR/SEK 0 159.194 (92.742) 66.452 0 66.452
EUR/CNY 0 12.496 (25.650) (13.154) 0 (13.154)
EUR/INR 0 0 (35.581) (35.581) 0 (35.581)
CNY/INR 0 101 (1.532) (1.431) 0 (1.431)
EUR/PLN 0 42.564 (50.790) (8.226) 0 (8.226)
DKK/CNY 0 0 (1.591) (1.591) 0 (1.591)
SEK/BRL 0 0 (28.438) (28.438) 0 (28.438)
PLN/SEK 0 983 0 983 0 983
USD/EUR 0 1.751 0 1.751 0 1.751
GBP/SEK 0 0 (1.386) (1.386) 0 (1.386)
NOK/SEK 0 0 1.574 1.574 0 1.574
CNY/DKK 0 10.521 0 10.521 (9.469) 1.052
Other 0 2.027 (8.396) (6.369) 0 (6.369)
The Group’s currency risks in the balance sheet at 31 December 2022 translated to DKK
Currency
Securities
and cash
Cash and
receivables
Liabilities
Position
before
hedging
Hedged
using
financial
instruments
Position
after
hedging
USD/DKK 0 0 (17.291) (17.291) 0 (17.291)
DKK/USD 0 1.325 (8.192) (6.867) 0 (6.867)
EUR/GBP 0 21.696 (21.373) 323 0 323
USD/GBP 0 24.838 (12.323) 12.515 0 12.515
USD/SEK 158 2.188 (11.777) (9.431) 0 (9.431)
EUR/SEK 6.557 119.255 (80.920) 44.892 0 44.892
EUR/INR 0 321 (8.652) (8.331) 0 (8.331)
EUR/PLN 0 52.153 (47.309) 4.844 0 4.844
SEK/BRL 0 362 (30.997) (30.635) 0 (30.635)
PLN/SEK 0 11.895 (22) 11.873 0 11.873
CNY/DKK 0 15.323 (52) 15.271 (13.146) 2.125
Other 76 9.101 (20.338) (11.161) 0 (11.161)
All amounts in DKK’000
Annual report 2023 | 42
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the consolidated financial statements
at 31 December
Note
24
Financial risk (continued)
Credit risk
Provisions for bad debts are detailed in note 13.
Capital management
Liquidity risk
Maturity profiles etc. are detailed in note 16.
At 31 December, the Group’s cash resources consisted of:
31.12.2023 31.12.2022
Available operating credits 675.928 547.179
Drawn operating credits (525.894) (237.465)
Amount in the cash pool scheme 52.548 9.687
Cash and cash equivalents 73.938 28.863
276.520 348.264
It is the Group’s policy as a general rule to distribute the profit for the year after tax, in due
consideration of changes to the balance sheet and special liquidity requirements with respect to
investments. Dividend payments must be made in due consideration of the target level of equity.
To ensure that the Group always has the necessary capital resources to capitalise on any
opportunities for investment that may arise and to be able to settle liabilities, the Group has entered
into a number of agreements.
As a result of their short-term nature, the fair value of trade receivables, other receivables, trade
payables and other payables are deemed to correspond to the carrying amount.
The Group’s credit risk is primarily related to trade receivables. The Group seeks to avoid significant
exposure to individual customers or business partners. The Group’s policy for undertaking credit risks
involves an ongoing credit assessment of all major customers.
The Group regularly assesses the need for adjustment of the capital structure to weigh up the higher
required rate of return against the increased uncertainty related to debt financing. The ratio of equity
to total liabilities was 34.9% at 31 December 2022 (2022: 38.8%).
All amounts in DKK’000
Annual report 2023 | 43
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Notes to the consolidated financial statements
at 31 December
Note
25
NIBD
Change in NIBD for the year:
1 January Cash flows Acquisitions
For. ex.
adjustments
Other
31
December
Interest-bearing assets:
Current
receivables, group
companies
9.687 42.861 0 0 0 52.548
Cash and cash
equivalents
28.863 6.843 39.574 (1.342) 0 73.938
Interest-bearing liabilities:
Debt to mortgage-
credit institutions
(non-current)
57.602 0 0 0 (1.971) 55.631
Lease debt
(non-current)
65.858 0 0 0 38.324 104.182
Non-current debt
to group
companies
300.000 200.000 0 0 0 500.000
Current portion of
non-current
liabilities
2.389 (2.231) 0 0 1.971 2.129
Lease debt
(current)
30.044 (36.833) 0 0 45.297 38.508
Current debt to
group companies
227.210 292.731 0 4.343 0 524.284
Credit institutions
(current)
10.255 (8.763) 0 118 0 1.610
NIBD 654.808 395.200 (39.574) 5.803 83.621 1.099.858
Non-cash items
All amounts in DKK’000
Annual report 2023 | 44
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Notes to the consolidated financial statements
at 31 December
Note
26
Operating leases and rent commitments
Property Machinery Cars Total
Falling due within 0-1 years 390 1.174 589 2.153
Falling due within 1-5 years 0 1.481 0 1.481
Falling due after 5 years 0 0 0 0
Total 390 2.655 589 3.634
Property Machinery Cars Total
Falling due within 0-1 years 1.029 748 0 1.777
Falling due within 1-5 years 0 738 0 738
Falling due after 5 years 0 0 0 0
Total 1.029 1.486 0 2.515
27 Contingent liabilities and guarantees
Contingent liabilities
31.12.2023
Lease liabilities are measured at net present value. Operating lease liabilities comprise minor assets
and leases with terms of less than one year.
The Company is jointly taxed with the other Danish companies of the Schouw & Co. Group. As a
group company, the Company is jointly and severally liable with the other Danish group companies for
Danish income tax and withholding tax on dividends, interest and royalties within the joint tax pool.
The net liability of the jointly taxed entities to SKAT is specified in the consolidated financial state-
ments of the management company. Any subsequent corrections in income subject to joint taxation,
withholding taxes on dividends, etc. may result in the Company’s tax liability increasing.
31.12.2022
All amounts in DKK’000
Annual report 2023 | 45
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the consolidated financial statements
at 31 December
Note
27
Contingent liabilities and guarantees (continued)
Guarantees
31.12.2023 31.12.2022
The following assets have been provided as security to credit institutions:
Land and buildings with a carrying amount of 64.126 62.461
Plant and machinery with a carrying amount of 0 840
2.810 1.165
28
Related party disclosures
Management's remuneration and share option programmes are set out in note 2.
The above assets have been provided as security for the Group’s debt to credit and mortgage-credit
institutions of DKK 60,609 thousand (2022: DKK 61,171 thousand)
Other fixtures and fittings, tools & equipm. with a carrying amount of
The Group’s principal shareholder, Aktieselskabet Schouw & Co., is a related party exercising control.
Other related parties are group enterprises over which HydraSpecma exercises control and the Board
of Directors, the Executive Management and senior managers.
HydraSpecma derives a significant proportion of its financing from the cash reserves of its parent
company, Schouw & Co., and to a lesser extent from non-committed credit facilities.
Financing provided by the parent company consists mainly of a syndicated bank facility, which in
December 2020 was refinanced with a total facility line of DKK 3,275 million.
The facility has a three-year term with an option for a one-year extension after the first and second
year. The first extension option was utilised in December 2021, and the second extension option was
utilised in December 2022. The bank consortium consists of Danske Bank, DNB, Nordea as well as
the international bank Hongkong & Shanghai Banking Corporation (HSBC).
Schouw & Co. issued Schuldscheins for EUR 136 million (DKK 1,013 million) in April 2019 and for
EUR 225 million (DKK 1,677 million) in November 2023. The Schuldscheins mature in April 2024,
April 2026, November 2026 and November 2030.
In December 2021, Schouw & Co. set up a DKK 400 million seven-year loan with the Nordic
Investment Bank related to specific Danish capacity-expanding investments and development costs.
In 2022 and 2023, Schouw & Co. established a number of term loans with Danske Bank, Nordea
Bank, DNB, HSBC and Jyske Bank, which currently total an outstanding amount of DKK 1,800
million, DKK 400 million of which matures in March 2024, while the remaining DKK 1,400 million
matures in January 2025.
Like other of the major subsidiaries of the Schow & Co. Group, HydraSpecma is a co-guarantor for
the above-mentioned facilities in the total amount of DKK 8,165 million, of which DKK 5,542 million
had been drawn at 31 December 2023. In addition, the Company has a number of minor facilities,
established through the Schouw & Co. Group’s global banker, HSBC, for a total amount of DKK 58
million with drawings at 31 December 2023 amounting to DKK 47 million.
All amounts in DKK’000
Annual report 2023 | 46
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the consolidated financial statements
at 31 December
Note
28
Related party disclosures (continued)
The Group’s transactions with related parties
31.12.2023 31.12.2022
Parent company:
Management fee
1.950 1.875
Interest expenses
34.238 18.582
Payment to Schouw & Co. for share option programme
4.309 3.525
Interest income
527 36
29
Pillar Two
30
Events after the balance sheet date
31
New financial reporting regulations
Other than as set out elsewhere in this annual report, HydraSpecma A/S is not aware of events
occuring after 31 December 2023 which are expected to have a material effect on the Group's
financial position or outlook.
IAS 21 Currency translation: Translation of currencies that cannot freely be translated at an official
exchange rate.
The Group’s receivables from the parent company at 31 December are detailed in note 13. The
Group’s debt to parent company is detailed in note 16.
As of the date of publication of this annual report, the IASB had issued a number of new and
amended financial reporting standards and interpretations which are not mandatory for HydraSpecma
A/S in 2023. None of these new standards and interpretations are expected to have a material impact
of recognition and measurement for HydraSpecma A/S.
The following adopted standards and interpretations that have not yet come into force will be
implemented as and when they become mandatory for HydraSpecma A/S as per the EU effective
dates:
IAS 1 Presentation of financial statements clarifying the definition of current liabilities.
The pillar Two legislation enacted in Denmark in December 2023 will be effective for the Danish
Group's financial year beginning 1 January 2024. It implies that the parent company,
Aktieselselskabet Schouw & Co. will be required to pay top-up tax on profits of its subsidiaries to the
Danish tax authorities if these are locally taxed at an effective tax rate of less than 15 percent
(minimum tax). If the relevant jurisdiction has enacted local top-up tax rules, the top-up tax will be
paid locally.
The Group is in the process of assessing the potenital exposure arising from the complex Pillar Two
legislation. The assessment is currently not completed. Hence, quantitative information to indicate
potential exposure to Pillar Two income taxes is presently not known or reasonably estimable. The
assessment carried out so far indicates that the most jurisdictions should not be exposed, because
the effective tax rate is 15% or higher. The Group expects to complete the assessment in the first of
half of financial year 2024.
IFRS 16 (Leases): Amendments to IFRS 16 specifying rules for the recognition of sale and leaseback
agreements and the calculation of the present value of lease liabilities.
IAS 7 Statement of cash flows and IFRS 7 Financial instruments: New disclosure requirements for
supplier finance arrangements (reverse factoring).
All amounts in DKK’000
Annual report 2023 | 47
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Annual Report 2023 | 48
Notes to the financial statements
32 Accounting policies
HydraSpecma A/S is a public limited company domiciled in Denmark. The financial part of the annual
report for the period 1 January – 31 December 2023 includes both the consolidated financial statements
of HydraSpecma A/S and its subsidiaries (the Group) and the financial statements of the parent com-
pany.
The consolidated financial statements of HydraSpecma A/S for the year ended 31 December 2023 have
been prepared in accordance with the International Financial Reporting Standards as adopted by the
EU and other disclosure requirements pursuant to the Danish Financial Statements Act.
The parent company financial statements have been prepared in accordance with the International Fi-
nancial Reporting Standards as adopted by the EU and additional Danish disclosure requirements for
annual reports of reporting class C enterprises (large).
The Board of Directors and the Executive Management have on 22 February 2024 reviewed and ap-
proved the annual report of HydraSpecma A/S for the 2022 financial year. The annual report will be
presented to HydraSpecma A/S’s shareholders for approval at the annual general meeting to be held
on 1 March 2024.
Basis of preparation
The consolidated financial statements are presented in DKK rounded to the nearest thousand.
The consolidated financial statements are prepared on the basis of the historical cost principle.
The accounting policies described below have been consistently applied for the financial year and for
the comparative figures. For standards implemented prospectively, comparative figures are not restated.
New financial reporting standards
HydraSpecma A/S implemented amendments to IAS 1, IAS 8 and IAS 12 in 2023. Noneof the imple-
mented amendments had a material effect on recognition or measurement for HydraSpecma A/S.
Description of accounting policies
Significant accounting estimates
In preparing the financial statements, management makes a number of assessments, estimates and
assumptions necessary for calculating the carrying amount of certain assets and liabilities. The esti-
mates and assumptions applied are based on factors such as historical experience and other factors
that management considers reasonable under the circumstances, but which are inherently uncertain
and unpredictable. Such assumptions may be incomplete or inaccurate, and unexpected events or cir-
cumstances may arise. Due to the risks and uncertainties the Group is subject to, actual outcomes may
deviate from estimates made. It may be necessary to revise previous estimates as a result of changes
to the assumptions on which such estimates were based or due to new information or subsequent
events. Management has identified three areas of particular materiality for the financial reporting:
> Trade receivables amount to DKK 638 million. Management applies estimates when assessing
whether receivables at the balance sheet date are recoverable. Historically, the item has not
materially affected the income statement. Management regularly reviews the need for write-
downs and beliveves that its trade receivables are not subject to significant credit risk.
> Customer relations and know-how amount to a total of DKK 270 million. The item is tested for
impairment at least annually based on expectations for future customer relations and based on
expectations for the future utilisation of know-how.
> Inventories amount to DKK 744 million. When assessing its inventories, HydraSpecma applies
a general model whereby items are automatically written down when they have been in stock
for a certain period of time, combined with an individual assessment of newly sourced goods.
The company reviews the automatic model on a regular basis, and in management’s best esti-
mate, it provides an appropriate and fair view of the net realizable value of inventories.
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Annual Report 2023 | 49
Notes to the financial statements
32 Accounting policies
Significant accounting estimates (continued)
>
Acquisitions are accounted for by recognising the acquired enterprise’s assets, liabilities and
contingent liabilities at fair value. The principal assets are generally intangible assets, including
goodwill, as well as inventories and property, plant and equipment. The intangible assets most
often identified are the value of customers, brands and know-how. Intangible assets are valued
at the present value of expected future cash flows related to the asset. Depending on the nature
of the item, the determination of the fair value of the acquired company’s assets, liabilities and
contingent liabilities may be subject to uncertainty and may subsequently be adjusted.
> Valued at DKK 300 million, goodwill represents a significant amount in the balance sheet, and
the value of goodwill is subject to the future earnings of the underlying cash-generating units.
Management performs impairment tests at least once a year. See note 9 to the consolidated
financial statements.
> In connection with the acquisition of HydraSpecma Renewable AB, intangible assets of DKK
454,1 million including goodwill were identified. With the exception of the goodwill identified,
deferred tax was calculated on the acquired assets.
Consolidated financial statements
The consolidated financial statements comprise the parent company, HydraSpecma A/S, and subsidi-
aries in which HydraSpecma A/S exercises control.
Control is the power to govern a subsidiary’s financial and operating policies. Control also requires an
ability to make a financial return on the investment.
In assessing whether HydraSpecma A/S exercises control or significant influence, potential voting rights
exercisable at the balance sheet date are taken into account.
Enterprises in which HydraSpecma A/S exercises significant influence, but not control, over operating
and financial policy decisions are classified as associates. Significant influence exists when the Group,
directly or indirectly, holds or has the disposal of more than 20%, but less than 50%, of the voting rights.
A group overview is included in the Management’s review.
The consolidated financial statements are prepared by aggregating the financial statements of the par-
ent company and the individual subsidiaries prepared in accordance with the Group’s accounting poli-
cies. Intra-group income and expenses, shareholdings, intra-group balances and dividends and realised
and unrealised gains and losses on transactions between the consolidated companies are eliminated.
Unrealised gains on transactions with associates are eliminated in proportion to the Group’s interest in
the enterprise. Unrealised losses are eliminated in the same way as unrealised gains, to the extent that
they do not reflect impairment.
Financial statement items of subsidiaries are recognised 100% in the consolidated financial statements.
Non-controlling interests’ shares of profit/loss for the year and of equity in subsidiaries that are not wholly
owned are included in the consolidated profit/loss and equity, but are presented separately.
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Notes to the financial statements
32 Accounting policies
Business combinations
Newly acquired or newly established companies are recognised in the consolidated financial statements
from the date of acquisition. Enterprises divested or wound up are recognised in the consolidated finan-
cial statements until the date of disposal. Comparative figures are not adjusted to reflect acquisitions or
divestments.
The acquisition date is the date on which the Group effectively assumes control of the acquired busi-
ness.
The acquisition method is applied to acquisitions if the Group gains control of the company acquired.
Identified assets, liabilities and contingent liabilities in companies acquired are measured at their fair
value at the date of acquisition. Identifiable intangible assets are recognised if they are separable or
arise from a contractual right. Deferred tax on revaluations made is recognised.
Any excess of the consideration, the value of non-controlling interests in the acquired enterprise and the
fair value of any previously acquired investments over the fair value of the identifiable assets, liabilities
and contingent liabilities acquired (goodwill) is recognised as goodwill under intangible assets. Goodwill
is not amortised, but is tested for impairment annually. The first impairment test is performed before the
end of the year of acquisition.
On acquisition, goodwill is transferred to the cash-generating units that will subsequently form the basis
of future impairment tests. Any goodwill arising and any fair value adjustments made on the acquisition
of an entity whose functional currency is not the same as the Group’s presentation currency are treated
as assets or liabilities of an entity and initially translated to the acquired entity’s functional currency at
the exchange rate ruling at the transaction date.
Any negative difference (negative goodwill) is recognised in profit/loss at the acquisition date.
The consideration for an enterprise consists of the fair value of the agreed consideration in the form of
assets transferred, liabilities assumed and equity instruments issued. If part of the consideration is con-
tingent on future events occurring or on agreed conditions being met, that part of the consideration is
recognised at fair value at the acquisition date. Subsequent adjustment of contingent consideration is
recognised in the income statement.
Expenses incurred in connection with an acquisition are recognised in the income statement in the year
in which they are incurred.
If uncertainties exist at the acquisition date regarding identification or measurement of acquired assets,
liabilities or contingent liabilities or the determination of the consideration, initial recognition will be based
on preliminary values. If the identification or measurement of the consideration, acquired assets, liabili-
ties or contingent liabilities on initial recognition subsequently proves to have been incorrect, the calcu-
lation, including goodwill, is adjusted retrospectively until 12 months after the acquisition, and compar-
ative figures are restated. Subsequently, goodwill is not adjusted. Changes to estimates of contingent
consideration are recognised in profit/loss for the year.
Gains or losses on the sale or winding-up of subsidiaries and associates are stated as the difference
between the sales sum or the proceeds from the winding-up and the carrying amount of net assets,
including goodwill, at the date of disposal and costs to sell or wind up.
Non-controlling interests
On initial recognition, non-controlling interests are recognised either at the fair value of their interest or
at their pro-rata share of the fair value of the acquired company’s identifiable assets, liabilities and con-
tingent liabilities.
Accordingly, for the former option, goodwill is recognised relating to non-controlling interests in the ac-
quired business, while for the latter option, goodwill relating to non-controlling interests is not recognised.
The method of measuring non-controlling interests is determined on a case-by-case basis and disclosed
in the presentation of acquired businesses in the notes to the financial statements.
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Notes to the financial statements
32 Accounting policies
Foreign currency translation
A functional currency is determined for each of the reporting enterprises of the Group. The functional
currency is the currency in the primary economic environment in which the reporting entity operates.
Transactions in currencies other than the functional currency are transactions in foreign currencies.
On initial recognition, transactions in foreign currencies are translated to the functional currency at the
exchange rate ruling on the transaction date. Exchange differences arising between the exchange rate
at the transaction date and the exchange rate at the date of payment are recognised in the income
statement under financial income or financial expenses.
Receivables, payables and other monetary items denominated in foreign currency are translated to the
functional currency at the exchange rates at the balance sheet date. The difference between the ex-
change rate at the balance sheet date and the exchange rate at the date when the receivable or payable
arose or was recognised in the most recent financial statements is recognised in the income statement
under financial income or financial expenses.
On consolidation of enterprises with functional currencies other than Danish kroner, the income state-
ments and other comprehensive income are translated at the exchange rates at the transaction date,
and the balance sheets are translated at the exchange rates ruling at the balance sheet date. An aver-
age exchange rate for the month is used as the exchange rate at the transaction date to the extent that
this does not significantly distort the presentation of the transaction.
Exchange differences arising on translation of the opening equity of such enterprises at the exchange
rates at the balance sheet date and on translation of other comprehensive income from the exchange
rates ruling at the transaction date to the exchange rates at the balance sheet date are recognised in
other comprehensive income as a separate translation reserve under equity. Foreign exchange adjust-
ments are distributed between the parent company’s and the non-controlling interests’ shares of equity.
Foreign exchange adjustment of balances that are considered part of the overall investment in a sub-
sidiary with a functional currency other than Danish kroner is recognised in the consolidated financial
statements in other comprehensive income as a separate translation reserve under equity.
Similarly, exchange gains and losses on the part of loans and derivative financial instruments entered
into as hedges of the net investment in such enterprises, and effectively hedging against similar ex-
change gains or losses on the net investment in the enterprise, are recognised in other comprehensive
income as a separate translation reserve under equity.
On consolidation of associates and joint ventures with functional currencies other than Danish kroner,
the share of the results is translated at average exchange rates, and the share of equity including good-
will is translated at the exchange rates ruling at the balance sheet date.
Exchange differences arising on translation of the opening equity of associates and joint ventures at
exchange rates ruling at the balance sheet date and on translation of the share of the results for the
year from average exchange rates to the exchange rates ruling at the balance sheet date are recognised
in other comprehensive income as a separate translation reserve under equity.
On disposal of all or parts of wholly owned entities with functional currencies other than Danish kroner
and where control is relinquished, accumulated foreign exchange adjustments which are recognised in
other comprehensive income and are attributable to the entity are reclassified from other comprehensive
income to the income statement together with any gains or losses on disposal.
On disposal of partially owned subsidiaries with functional currencies other than Danish kroner and
where control is relinquished, the part of the translation reserve relating to non-controlling interests is
not transferred to the income statement.
On disposal of parts of subsidiaries with functional currencies other than Danish kroner without control
being relinquished, a proportionate share of the translation reserve is transferred from the parent com-
pany shareholders’ to the non-controlling shareholders’ share of equity.
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Annual Report 2023 | 52
Notes to the financial statements
32 Accounting policies
Foreign currency translation (continued)
On disposal of parts of associates and joint ventures, the proportionate share of the accumulated foreign
exchange adjustments which are recognised in other comprehensive income are reclassified to the in-
come statement together with any gains or losses on disposal.
Repayment of balances considered to be a part of the net investment is not in itself deemed to be a
disposal of part of the enterprise.
Derivative financial instruments
Derivative financial instruments are recognized from the trading date and are measured in the balance
sheet at fair value. Positive and negative fair values of derivative financial instruments, and offsets of
positive and negative values are only made when the company has the right and intention to settle
several financial instruments net.
Fair value hedges
Changes in the fair value of derivative financial instruments designated as and qualifying as effective
hedges of the fair value of a recognised asset or a recognised liability are recognised in the income
statement together with any changes in the value of the hedged asset or hedged liability as regards
the hedged portion. Hedges of future cash flows under a fixed agreement, other than currency
hedges, are treated as fair value hedges.
The portion of the value adjustment of a derivative financial instrument that is not part of a hedge is
presented under financial items.
Cash flow hedges
Changes in the portion of the fair value of derivative financial instruments designated as and qualifying
as a hedge of future cash flows and effectively hedging changes in future cash flows are recognised in
other comprehensive income as a separate hedging reserve under equity until the hedged cash flows
affect profit/loss. At that time, any gains or losses relating to such hedge transactions are reclassified
from other comprehensive income and recognised in the same item as the hedged item.
If the hedging instrument no longer qualifies for hedge accounting, the hedge is discontinued. The ac-
cumulated value change recognised in other comprehensive income is reclassified to the income state-
ment when the hedged cash flows affect profit or loss or are no longer likely to occur.
The portion of the value adjustment of a derivative financial instrument that is not part of a hedge is
presented under financial items.
Hedges of net investments
Changes in the fair value of derivative financial instruments used as hedges of net investments in sub-
sidiaries, associates and joint ventures with functional currencies other than Danish kroner, and which
effectively hedge against changes in foreign exchange rates in such enterprises, are in the consoli-
dated financial statements recognised in other comprehensive income as a separate translation re-
serve under equity. The portion of the value adjustment of a derivative financial instrument that is not
part of a hedge is presented under financial items.
Other derivative financial instruments
For derivative financial instruments that do not qualify for hedge accounting, changes in fair value are
recognised in the income statement under financial items as they occur.
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Annual Report 2023 | 53
Notes to the financial statements
32 Accounting policies
Income statement
Revenue
Sales of finished goods and goods for resale comprise components and accessories for hydraulics,
industrial hoses and related areas such as the supply of assembled goods, system solutions and the
manufacturing of hydraulic aluminium blocks, and are recognised in revenue when control of the indi-
vidual identifiable performance obligation in the sales contract passes to the customer, which according
to the terms of sale is at the date of delivery. Although a sales agreement regarding sales of finished
goods and goods for resale often contains more than one performance obligation, such obligations are
treated as one combined performance obligation because delivery typically takes place at one point in
time.
Revenue is measured at the fair value of the agreed consideration net of VAT and taxes charged on
behalf of third parties. All discounts granted are recognised in revenue. Fair value equals the agreed
price. Where the terms of payment exceed 12 months, the value is discounted to net present value. The
standard terms of payment are current month plus 1-3 months.
The part of the total consideration that is variable, for example in the form of discounts, bonus payments,
penalty payments, etc., is recognised in revenue when it is reasonably certain that it will not subse-
quently be reversed due to, for example, non-achievement of targets and the like.
Rental income
Rental income comprises the letting of part of the Company’s buildings to other enterprises under oper-
ating leases. Rent is accrued and recognised as income on a straight-line basis over the term of the
lease in accordance with the contract.
Government grants
Government grants are recognised in the income statement when it is more likely than not that the
Company will receive the grant. Government grants to cover costs are recognised in profit/loss as the
grant is earned, typically as costs are incurred. Government grants to cover costs are recognised in the
income statement under the items in which the costs are recognised. Accordingly, the principle of off-
setting applies in the recognition of government grants to cover costs. Other government grants are
recognised in other operating income.
Cost of sales
Cost of sales comprises costs incurred to achieve the year’s revenue. Enterprises engaged in trading
recognise cost of sales and enterprises engaged in manufacturing recognise production costs incurred
to achieve the year’s revenue. This includes direct and indirect costs of raw materials and consumables,
wages and salaries, leases and depreciation and impairment of plant and machinery and amortisation
and impairment of development projects.
Distribution costs
Distribution costs comprise expenses incurred in connection with the distribution of goods sold during
the year and in connection with sales campaigns, etc. run during the year, including costs of sales staff,
advertising and exhibition, as well as depreciation/amortisation and impairment.
Administrative expenses
Administrative expenses comprise expenses incurred during the year for management and administra-
tion of the Group, including costs of administrative staff, management, office premises and office ex-
penses, and depreciation and impairment. Administrative expenses also comprise impairment of trade
receivables.
Other operating income and expenses
Other operating income and expenses comprise items of a secondary nature relative to the companies’
activities, including gains and losses on current sales and replacement of intangible assets and property,
plant and equipment. Gains and losses on the sale of intangible assets and property, plant and equip-
ment are computed as the difference between the selling price less costs to sell and the carrying amount
at the date of disposal.
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Annual Report 2023 | 54
Notes to the financial statements
32 Accounting policies
Profit/loss from investments in subsidiaries and associates
The proportionate share of subsidiaries’ profits or losses after tax is recognised in the parent company’s
income statement after full elimination of intra-group gains/losses.
The proportionate share of associates’ profits or losses after tax is recognised in the income statement
of both the Group and the parent company after elimination of the proportionate share of intra-group
profits/losses.
Financial income and expenses
Financial income and expenses include interest and capital gains and losses on transactions in foreign
currency and impairment losses on securities. Also included are amortisation of financial assets and
liabilities, including finance lease liabilities, surcharges and refunds under the on-account tax scheme.
and changes in fair values of derivative financial instruments that do not qualify for hedge accounting.
Borrowing costs from general borrowing or loans that are directly attributable to the acquisition, con-
struction or development of qualifying assets are attributed to the cost of the specific individual asset.
Tax on profit/loss for the year
The Company is subject to the Danish rules on compulsory joint taxation of the Danish companies of
the Schouw Group. Danish subsidiaries are included in the joint taxation from the date at which they are
included in the consolidation until the date when they cease to be consolidated.
The parent company, Aktieselskabet Schouw & Co., is the designated management company of the tax
pool and handles the settlement of all income tax payments with the tax authorities.
The current Danish income tax liability is allocated among the companies of the tax pool in proportion
to their taxable income by payment of joint taxation contributions. In this connection, companies with
negative taxable incomes will receive joint taxation contributions from companies that have been able
to utilise such losses to reduce their own taxable profits.
Tax for the year comprises current tax and changes in deferred tax for the year. In addition, tax for the
year comprises changes to prior-year tax and changes in assessed provisions for uncertain tax posi-
tions. Tax for the year is recognised in profit/loss for the year, in other comprehensive income or directly
in equity, depending on where the transaction to which the tax relates is recognised.
To the extent the Group benefits from a deduction in the determination of taxable income in Denmark
or abroad due to share-based incentive programmes, the tax effect of such programmes is recognised
in tax on profit/loss for the year. If the overall tax deduction exceeds the overall accounting cost, the tax
effect of the excess tax deduction is recognised directly in equity.
Balance sheet
Intangible assets
Goodwill is initially measured in the balance sheet at cost. Subsequently, goodwill is measured at cost
less accumulated impairment. Goodwill is not amortised. The carrying amount of goodwill is allocated
to the Group’s cash-generating units at the date of acquisition. The determination of cashgenerating
units is based on the management structure and the in-house financial management.
Intangible assets such as customer relations, know-how and brands, acquired in connection with busi-
ness combinations are measured at cost less accumulated amortisation and impairment. Other intangi-
ble assets comprise IT solutions. Intangible assets are amortised on a straight-line basis over the ex-
pected useful lives of the assets, which are as follows:
Customer relations: 10-15 years
Know-how: 10-15 years
Brands: 10 years
Other intangible assets:
Goodwill is not amortised, but is tested for impairment once a year.
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Annual Report 2023 | 55
Notes to the financial statements
32 Accounting policies
Development projects, patents, licences, etc.
Development costs comprise salaries, amortisation and depreciation and other costs attributable to the
company’s development activities.
Clearly defined development projects are recognised as intangible assets where the technical feasibility
of the project, the availability of adequate resources and a potential future market or application oppor-
tunity in the company can be demonstrated and where the intention is to manufacture, market or use
the project if the cost can be measured reliably and it is probable that the future earnings or the net
selling prices can cover production and selling expenses, administrative expenses as well as the devel-
opment costs. Other development costs are recognised in the income statement as incurred.
Recognised development costs are measured at cost less accumulated amortization and impairment.
On completion of the development work, the development project is amortised on a straight-line basis
over the estimated useful life. The usual amortization period is three to seven years. The basis of amor-
tisation is calculated less any impairment.
Development costs are amortised on a straight-line basis over the expected useful lives of the assets,
which are as follows:
Development projects: 3 years
Property, plant and equipment
Land and buildings, plant and machinery and fixtures and fittings, tools and equipment are measured at
cost less accumulated depreciation and impairment.
Cost comprises the acquisition price and any costs directly attributable to the acquisition until the date
when the asset is ready for use. For assets produced in-house, cost comprises direct and indirect costs
of materials, components, third-party suppliers and labour as well as borrowing costs relating to specific
and general borrowing directly related to the construction of the individual asset. Cost is increased by
the present value of estimated liabilities for the removal and disposal of the asset and restoration of the
site on which the asset was used.
Subsequent costs, such as the cost of replacing components of property, plant and equipment, are
included in the asset’s carrying amount when it is probable that the costs will result in future economic
benefits for the Group. The replaced components are derecognised in the balance sheet and the carry-
ing amount is transferred to the income statement. All other ordinary repair and maintenance costs are
recognised in the income statement when incurred.
The cost of a total asset is divided into separate components that are depreciated separately if such
components have different useful lives. Property, plant and equipment are depreciated on a straight-line
basis over the expected useful lives of the assets/components, which are as follows:
Buildings 10-50 years
Plant and machinery 5-10 years
Other fixtures and fittings, tools and equipment 3-7 years
Land is not depreciated
The basis of depreciation is calculated in due consideration of the asset’s residual value, reduced by
any impairment losses. The depreciation period and the residual value are determined at the acquisition
date and reviewed annually. Where the residual value exceeds the carrying amount, the property ceases
to be depreciated.
If the depreciation period or the residual value is changed, the effect on depreciation going forward is
recognised as a change in accounting estimates.
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Annual Report 2023 | 56
Notes to the financial statements
32 Accounting policies
Property, plant and equipment (continued)
Depreciation is recognised in the income statement as production costs, distribution costs and adminis-
trative expenses, respectively, to the extent that deprecation is not included in the cost of goods pro-
duced inhouse.
Leases
A lease asset and a lease liability are recognised in the balance sheet when, under a lease for a specific
identifiable asset, the lease asset is made available to the Group during the term of the lease and when
the Group obtains substantially all of the economic benefits from the use of the identified asset and the
right to direct the use of the identified asset.
On initial recognition, lease liabilities are measured at the present value of future lease payments, dis-
counted using an alternative borrowing rate. The following lease payments are recognised as part of the
lease liability:
> Fixed payments
> Variable payments changing in accordance with changes in an index or an interest rate based
on the applicable index or rate.
> Amounts payable under a residual value guarantee.
> The exercise price of buy options that Management is highly likely to exercise.
> Payments under extension options that the Group is highly likely to exercise.
> Penalties related to termination options, unless the Group is highly likely not to exercise the
option.
The lease liability is measured at amortised cost under the effective interest method. The lease liability
is remeasured if there is a change in the underlying contractual cash flows due to changes in an index
or an interest rate, if there is a change in the Group’s estimate of a residual value guarantee or if the
Group changes its assessment as to whether it reasonably expects to exercise an extension or termi-
nation option.
On initial recognition, the lease asset is measured at cost, corresponding to the value of the lease liability
adjusted for prepaid lease payments, plus direct costs incurred and estimated costs of dismantling or
restoring the underlying asset or similar and less any discounts or other types of incentive payments
received from the lessor.
Subsequently, the asset is measured at cost less accumulated depreciation and impairment. The lease
asset is depreciated over the shorter of the lease term and the useful life of the lease asset. Depreciation
is recognised in the income statement on a straight-line basis.
The lease asset is adjusted for changes in the lease liability resulting from changes in the lease terms
or changes in the contractual cash flows according to changes in an index or an interest rate.
Lease assets are depreciated on a straight-line basis over the expected lease term, which is as follows:
Operating equipment 2-7 years
Properties 5-10 years
Lease assets are presented separately from lease liabilities in the balance sheet.
The group has decided not to recognise either lease assets of low value or short-term leases in the
balance sheet. Instead, lease payments on such leases are recognised on a straight-line basis in the
income statement.
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Annual Report 2023 | 57
Notes to the financial statements
32 Accounting policies
Investments in subsidiaries and associates
Investments in subsidiaries and associates are measured in the parent company financial statements
according to the equity method.
On initial recognition, investments in subsidiaries and associates are measured at cost, i.e. with the
addition of transaction costs. Cost is allocated in accordance with the acquisition method of accounting.
See the description of business combinations.
Investments in subsidiaries and associates (continued)
Cost is adjusted to reflect shares of profits after tax calculated in accordance with the Group’s accounting
policies with the deduction or addition of unrealised intra-group gains and losses.
Dividends received are deducted from the carrying amount.
Any value added and goodwill relative to the equity value of the underlying business is recognised in
accordance with the Group’s accounting policies.
In the consolidated financial statements, investments in associates are measured according to the eq-
uity method, at the proportionate share of the associates’ equity value calculated in accordance with the
Group’s accounting policies minus or plus the proportionate share of unrealised intra-group profits and
losses and plus values added on acquisition, including goodwill.
Acquisitions of investments in associates are accounted for according to the acquisition method of ac-
counting. See the description of business combinations.
Impairment testing of non-current assets
Goodwill and intangible assets with indefinite useful lives are tested annually for impairment, initially
before the end of the year of acquisition.
The carrying amount of goodwill is tested for impairment together with the other non-current assets in
the cash-generating unit or group of cash-generating units to which goodwill has been allocated and is
written down to recoverable amount through profit or loss if the carrying amount is higher. The recover-
able amount is generally calculated as the net present value of expected future cash flows from the
enterprise or activity (cash-generating unit) to which the goodwill relates.
The carrying amounts of other non-current assets are tested annually for any indication of impairment.
If such an indication exists, the recoverable amount of the asset is calculated. The recoverable amount
is the higher of an asset’s fair value less expected costs to sell and its value in use.
Value in use is calculated as the present value of expected future cash flows from an asset or the cash-
generating unit to which the asset belongs.
An impairment loss is recognised where the carrying amount of an asset or a cash-generating unit ex-
ceeds the recoverable amount of the asset or cash-generating unit. Impairment losses are recognised
in profit/loss as production costs, distribution costs or administrative expenses. Goodwill impairment is
recognised as a separate line item in the income statement.
Impairment of goodwill is not reversed. Impairment of other assets is reversed to the extent that changes
have occurred to the assumptions and estimates leading to the impairment. Impairment losses are only
reversed to the extent that the new carrying amount of an asset does not exceed the carrying amount
the asset would have had after depreciation/amortisation, had the asset not been impaired.
Other securities
Holdings of securities which do not enable the Company to exercise control or significant influence are
measured at fair value.
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Annual Report 2023 | 58
Notes to the financial statements
32 Accounting policies
Inventories
Inventories are measured at the lower of cost in accordance with the FIFO method and net realisable
value.
The cost of goods for resale, raw materials and consumables comprises the purchase price plus delivery
costs.
The cost of finished goods and work in progress comprises the cost of raw materials, consumables,
direct labour, indirect production costs and borrowing costs relating to specific and general borrowing
directly related to the production of the individual item of inventory. Indirect production costs include
indirect materials and labour as well as maintenance and depreciation of the machinery, factory build-
ings and equipment used in the manufacturing process as well as costs of production administration
and management.
The net realisable value of inventories is calculated as the sales amount less costs of completion and
costs necessary to make the sale and is determined taking into account marketability, obsolescence
and development in the expected selling price.
Receivables
Receivables are measured at amortised cost.
Provisions for bad debts are made in accordance with the simplified expected credit loss-model, under
which total losses are recognised immediately in the income statement at the same time as the receiv-
able is recognised in the balance sheet in the amount of the lifetime expected credit loss on the receiv-
able.
Interest on credit-impaired receivables is recognised as income based on the written-down value using
the effective interest rate for the individual receivable or portfolio.
Prepaid expenses
Prepaid expenses are measured at cost.
Equity
The hedging reserve comprises the accumulated net change in the fair value of hedging transactions
that qualify as hedges of future cash flows and for which the hedged transaction has yet to be realised.
The translation reserve in the consolidated financial statements comprises the parent company share-
holders’ share of foreign exchange differences arising on translation into Danish kroner of the financial
statements of entities with functional currencies other than Danish kroner.
Reserve for net revaluation according to the equity method
Reserve for net revaluation according to the equity method comprises net revaluation of investments in
subsidiaries and associates relative to cost.
The reserve may be eliminated against losses, realisation of investments or changes in accounting es-
timates. The reserve cannot be negative.
Dividend
Proposed dividend is recognised as a liability at the time of adoption by the shareholders at the annual
general meeting (the date of declaration). Dividends expected to be declared in respect of the year are
stated as a separate line item under equity.
Employee obligations
Pension obligations and similar long-term liabilities
The Group has set up pension plans and similar arrangements with the majority of the Group’s employ-
ees.
Liabilities relating to defined contribution plans are recognised in the income statement in the period in
which the benefits vest, and payments due are recognised in the balance sheet under other debt.
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Annual Report 2023 | 59
Notes to the financial statements
32 Accounting policies
Share option programme
Share option programmes under which employees can purchase shares at an agreed price are meas-
ured at fair value at the grant date, and any changes to their value are recognised in the income state-
ment under staff costs over the vesting period. The balancing item is recognised in liabilities until pay-
ment is made to the parent company.
On initial recognition of the share options, the number of options expected to vest is estimated. Subse-
quently, adjustment is made for changes to the estimated number of vested options, to the effect that
the total amount recognised is based on the actual number of vested options.
The fair value of options granted is estimated using a valuation model that takes into account the terms
and conditions of the options granted.
Income tax and deferred tax
Current tax liabilities and current tax receivables are recognised in the balance sheet as calculated tax
on the taxable income for the year, adjusted for tax on prior years’ taxable income and for tax paid under
the on-account tax scheme.
Deferred tax is measured in accordance with the balance sheet liability method on all temporary differ-
ences between the carrying amount and the tax base of assets and liabilities. However, deferred tax is
not recognised on temporary differences relating to goodwill not deductible for tax purposes and other
items where temporary differences have arisen at the date of acquisition without affecting either
profit/loss for the year or taxable income.
In cases where the tax base may be computed according to alternative tax rules, deferred tax is meas-
ured on the basis of the intended use of the asset or settlement of the liability.
Deferred tax assets, including the tax base of tax loss carry-forwards, are recognised at the expected
value of their utilisation, either as a set-off against tax on future income or as a set-off against deferred
tax liabilities within the same legal tax entity and jurisdiction.
Deferred tax assets are reviewed annually and recognised only to the extent that it is probable that they
will be utilised.
Deferred tax assets and tax liabilities are offset if the Group has a legally enforceable right to set off
current tax liabilities and tax assets and intends either to settle current tax liabilities and tax assets on a
net basis or to realise the assets and settle the liabilities simultaneously.
Deferred tax is adjusted for eliminations and unrealised intra-group gains and losses.
Deferred tax is measured based on the tax rules and rates in the respective countries that will apply
under the legislation in force at the balance sheet date when the deferred tax asset is expected to
crystallise as current tax. Changes in deferred tax resulting from changes in tax rates are recognised in
profit/loss for the year and in comprehensive income for the year.
Provisions
Provisions are recognised when, as a consequence of an event occurring before or at the balance sheet
date, the Group has a legal or constructive obligation, the settlement of which is likely to result in an
outflow of economic benefits, and the amount can be reliably measured. Provisions are measured as
Management’s best estimate of the amount expected to be required to settle the liability.
Warranty commitments are recognised as the sale of goods and services is effected, based on the level
of incurred warranty costs in prior financial years.
A provision for onerous contracts is recognised when the unavoidable costs under a contract exceed
the expected benefits to the Group from the contract.
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Annual Report 2023 | 60
Notes to the financial statements
32 Accounting policies
Financial liabilities
Debt to credit institutions etc. is recognised at the raising of a loan at fair value less transaction costs
incurred. Subsequently, financial liabilities are measured at amortised cost, applying the effective inter-
est method, to the effect that the difference between the proceeds and the nominal value is recognised
in profit/loss under financial expenses over the term of the loan.
In addition, the capitalised residual lease liability under finance leases is recognised in financial liabili-
ties, measured at amortised cost.
Other financial liabilities are measured at amortised cost.
Other payables
Other payables comprise debt to public authorities, holiday pay, etc. and are measured at amortised
cost, which usually corresponds to nominal value.
Cash flow statement
The cash flow statement presents cash flows for the year from operating, investing and financing activ-
ities, changes for the year in cash and cash equivalents and cash and cash equivalents at the beginning
and end of the year.
Cash flows from acquisitions and divestments of enterprises are shown separately under cash flows
from investing activities. Cash flows from acquired businesses are recognised in the cash flow statement
from the date of acquisition. Cash flows from divested businesses are recognised until the date of dis-
posal.
Cash flows from operating activities are calculated according to the indirect method as profit or loss after
tax adjusted for non-cash operating items, changes in working capital, interest received and paid, in-
cluding the interest component of recognised lease liabilities, dividends received and income tax paid.
Cash flows from investing activities comprise payments made in connection with the acquisition and
divestment of enterprises and operations and the acquisition and sale of intangible assets, property,
plant and equipment and financial assets.
Cash flows from financing activities comprise changes in the size or the composition of the share capital
and related costs as well as the raising of loans, repayment of interest-bearing debt and lease liabilities,
purchase and sale of treasury shares and payment of dividends to shareholders.
Cash and cash equivalents comprise cash.
Cash flows in currencies other than the functional currency are translated at average exchange rates
unless these differ significantly from the exchange rate ruling at the transaction date.
Financial ratios
Financial ratios are calculated in accordance with the definitions of financial ratios on page 9 of the
annual report.
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
1 January - 31 December
Note
2023 2022
1 Revenue
792.063 794.751
2 Cost of sales
(569.948) (574.043)
Gross profit
222.115 220.708
4 Other operating income
31.464 21.898
4 Other operating expenses
0 (93)
2 Distribution costs
(107.983) (121.185)
2, 3 Administrative expenses
(69.165) (47.146)
EBIT
76.431 74.182
5 Recognition of share of profit in subsidiaries
75.978 109.086
6 Profit after tax in associates
0 0
7 Financial income
13.309 263
8 Financial expenses
(26.031) (9.890)
Profit before tax
139.687 173.641
9 Tax on profit/loss for the year
(11.404) (17.468)
Profit for the year
128.283 156.173
Proposed distribution of profit:
Reserve for net revaluation according to the equity method
75.978 109.086
Proposed dividend
25.000 50.000
Retained earnings
27.305 (2.913)
Profit for the year
128.283 156.173
Statement of comprehensive income
Items that can be reclassified to the income statement:
Value adjustment of hedging instruments for the year
5.333 (4.094)
Value adjustments transferred to financials
0 303
Other adjustments
(7.276) (41.355)
9 Tax on profit/loss for the year
(1.173) 884
Other comprehensive income after tax
(3.116) (44.262)
Profit for the year
128.283 156.173
Total recognised comprehensive income
125.167 111.911
Parent company income statement and statement of
comprehensive income
All amounts in DKK’000
Annual report 2023 | 61
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Parent company balance sheet
at 31 December
Note
Assets
31.12.2023 31.12.2022
IT projects 0 0
2, 10 Intangible assets 0 0
Land and buildings 89.536 90.004
Plant and machinery 15.522 19.337
Other fixtures and fittings, tools and equipment 7.210 7.446
Assets under construction, etc. 3.257 0
2, 11 Property, plant and equipment 115.525 116.787
5 Investments in subsidiaries 1.192.986 696.086
12 Lease assets 2.676 2.576
Equity investments in associates 1.849 1.849
Securities 21 21
14 Receivables 116.822 0
Other non-current assets 1.314.354 700.532
Total non-current assets 1.429.879 817.319
13 Inventories 171.036 183.147
14 Receivables 328.056 301.505
19 Income tax receivable 2.152 0
22 Cash and cash equivalents 144 3.847
Total current assets 501.388 488.499
Total assets 1.931.267 1.305.818
All amounts in DKK’000
Annual report 2023 | 62
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Parent company balance sheet
at 31 December
Note
Liabilities and equity
31.12.2023 31.12.2022
Share capital 30.000 30.000
Hedge transaction reserve 290 (3.870)
Reserve for net revaluation according to the equity method 204.212 134.612
Retained earnings 716.467 540.060
Proposed dividend 25.000 50.000
Total equity 975.969 750.802
15 Deferred tax 2.632 1.292
17 Credit institutions 57.160 59.011
17 Debt to subsidiaries 17.752 0
17 Debt to parent company 500.000 300.000
Non-current liabilities 577.544 360.303
17 Current portion of non-current liabilities 3.330 3.609
17 Credit institutions 117 85
17 Debt to subsidiaries and parent companies 209.643 24.997
16 Provisions 10.174 12.981
18 Trade payables and other payables 154.490 151.252
19 Income tax 0 1.789
Current liabilities 377.754 194.713
Total liabilities 955.298 555.016
Total equity and liabilities 1.931.267 1.305.818
23-31 Notes without reference
All amounts in DKK’000
Annual report 2023 | 63
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Parent company cash flow statement
1 January - 31 December
Note 2023 2022
Profit before tax 139.687 173.641
Adjustment for operating items of a non-cash nature, etc.
2 Depreciation, amortisation and impairment losses 15.559 16.861
Other operating items, net 6.759 2.964
5 Share of profits/losses of subsidiaries (75.978) (109.086)
6 Profit after tax in associates 0 0
Provisions (2.807) (3.519)
Financial income (13.309) (263)
Financial expenses 26.031 9.890
Cash flows from operations before changes in working capital 95.942 90.488
20 Changes in working capital (12.384) (39.309)
Cash flows from operations 83.558 51.179
Interest received 4.391 163
Interest paid (25.091) (8.630)
Cash flows from ordinary operations 62.858 42.712
19 Income tax paid (15.178) (17.309)
Cash flows from operating activities 47.680 25.403
21 Purchase of property, plant and equipment (13.284) (7.038)
5 Acquisitions (527.216) 0
Sale of property, plant and equipment 414 0
Cash flows from investing activities (540.086) (7.038)
Loan financing:
Repayment of non-current liabilities (1.972) (18.141)
Proceeds from non-current liabilities incurred 0 60.560
Increase/repayment of amounts owed to group companies 393.223 (6.321)
Increase/repayment of bank overdrafts (228) 11
Repayment of lease debt (2.320) (2.240)
Shareholders:
Capital contribution 150.000 0
Dividends paid (50.000) (50.000)
Dividends received 0 56
Cash flows from financing activities 488.703 (16.075)
Cash flows for the year (3.703) 2.290
Cash and cash equivalents at 1 January 3.847 1.557
22 Cash and cash equivalents at 31 December 144 3.847
All amounts in DKK’000
Annual report 2023 | 64
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Statement of changes in equity
at 31 December
Share
capital
Hedge
transaction
reserve
Reserve for
net revalua-
tion accord-
ing to the
equity
method
Retained
earnings
Proposed
dividend
Equity
Equity at 1 January 2022 30.000 (913) 66.430 543.155 50.000 688.672
Changes in equity in 2022
Hedging instruments transferred to financials 0 303 0 0 0 303
Value adjustment of hedging instruments for the
year
0 (4.094) 0 0 0 (4.094)
Tax on changes in equity 0 834 328 51 0 1.213
Other adjustments of equity 0 0 (41.232) (233) 0 (41.465)
Profit for the year 0 0 109.086 (2.913) 50.000 156.173
Total recognised comprehensive income 0 (2.957) 68.182 (3.095) 50.000 112.130
Distributed dividends 0 0 0 0 (50.000) (50.000)
Total changes in equity in 2022 0 0 0 0 (50.000) (50.000)
Equity at 31 December 2022 30.000 (3.870) 134.612 540.060 50.000 750.802
Changes in equity in 2023
Value adjustment of hedging instruments for the
year
0 5.333 0 0 0 5.333
Tax on changes in equity 0 (1.173) 0 0 0 (1.173)
Other adjustments of equity 0 0 (6.378) (898) 0 (7.276)
Profit for the year 0 0 75.978 27.305 25.000 128.283
Total recognised comprehensive income 0 4.160 69.600 26.407 25.000 125.167
Capital contribution 150.000 0 150.000
Distributed dividends 0 0 0 0 (50.000) (50.000)
Total changes in equity in 2023 0 0 0 150.000 (50.000) 100.000
Equity at 31 December 2023 30.000 290 204.212 716.467 25.000 975.969
The share capital comprises 3,000 shares of DKK 10,000 each.
No special rights are attached to any share.
The share capital is fully paid up.
All amounts in DKK’000
Annual report 2023 | 65
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the parent company financial statements
1 January - 31 December
Note
1
Revenue
Segments:
Global OEM
division
Local
IAM/OEM
division
Renewables
division
Total
Nordic region
172.697 283.324 114.507 570.528
Rest of Europe
4.751 91.897 1.459 98.107
Rest of world
456 122.936 36 123.428
Total revenue 177.904 498.157 116.002 792.063
Segments:
Global OEM
division
Local
IAM/OEM
division
Renewables
division
Total
Nordic region
186.929 276.082 109.594 572.605
Rest of Europe
3.189 81.347 1.718 86.254
Rest of world
609 135.246 37 135.892
Total revenue 190.727 492.675 111.349 794.751
2
Costs
2023 2022
Cost of sales
Cost of sales for the year includes costs of goods sold in the amount of 497.207 494.403
Cost of sales for the year includes inventory write-downs in the amount of 8.257 9.894
(3.782) (4.065)
Staff costs
Wages, salaries and fees 134.442 138.954
Defined contribution pension plans 13.638 13.639
Other social security costs 3.425 3.621
Share-based payment 4.309 3.524
Total staff costs recognised in the income statement 155.814 159.738
Staff costs are recognised as follows:
Production 52.012 55.981
Distribution 78.096 79.973
Administration 25.706 23.784
Total staff costs recognised in the income statement 155.814 159.738
Average no. of employees 252 267
Employee shares
2023
2022
Share option programme
The terms and conditions of the grant of employee shares are described in note 2 to the consolidated
financial statements.
Cost of sales for the year includes reversed inventory write-downs due to
sales in the amount of
The terms and conditions of the share option programme are described in note 2 to the consolidated
financial statements.
The internal management and segment reporting was changed in connection with the acquisition of
Ymer Renewable AB in 2023. The comparative figures have been restated accordingly.
All amounts in DKK’000
Annual report 2023 | 66
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the parent company financial statements
1 January - 31 December
Note
2
Costs (continued)
Management remuneration
Depreciation, amortisation and impairment losses
2023 2022
Depreciation of property, plant and equipment
14.172 14.779
Depreciation of lease assets 1.427 2.082
Total depreciation, amortisation and impairment losses 15.599 16.861
Depreciation/amortisation and impairment is recognised in the income statement as follows:
Production 7.716 8.547
Distribution 6.033 6.050
Administration 1.850 2.264
Total depreciation, amortisation and impairment losses 15.599 16.861
3
Fees to auditors appointed by the general meeting
Statutory audit fees 485 436
Fees for tax and VAT-related services 37 30
Non-audit services 167 2.386
Total fees, auditors appointed by the general meeting 689 2.852
4
Other operating income and expenses
Gains on disposal of property, plant and equipment and intangible assets 40 0
Invoiced to subsidiaries 31.424 21.898
Total other operating income 31.464 21.898
Loss on disposal of property, plant and equipment and intangible assets 0 (93)
Total other operating expenses 0 (93)
For more information on salaries and bonuses, pensions and share-based payment to the Executive
Management and senior managers of HydraSpecma A/S, see note 2 to the consolidated financial
statements.
All amounts in DKK’000
Annual report 2023 | 67
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the parent company financial statements
at 31 December
Note
31.12.2023 31.12.2022
5 Investments in subsidiaries
Cost at 1 January 565.944 565.944
Additions (after off-set of intercompany receivables of TDKK 99,916) 427.300 0
Cost at 31 December 993.244 565.944
Adjustments at 1 January 130.142 61.958
Foreign exchange adjustments (6.378) (39.740)
Share of profit for the year 75.978 109.086
Other capital entries 0 (1.162)
Adjustments at 31 December 199.742 130.142
Carrying amount at 31 December 1.192.986 696.086
Equity
interest
Equity
interest
31.12.2023 31.12.2022
HydraSpecma Hydraulics India Private Ltd. India 100% 100%
HydraSpecma Hydraulic Systems (Tianjin) Co., Ltd. China 100% 100%
HydraSpecma USA Inc. USA 100% 100%
HydraSpecma AB Sweden 100% 100%
HydraSpecma Wiro AB Sweden 100% 100%
HydraSpecma Component AB Sweden 100% 100%
HydraSpecma OY Finland 100% 100%
HydraSpecma Polska Sp. Z.o.o Poland 100% 100%
HydraSpecma Samwon Ltd. UK 100% 100%
HydraSpecma BV Netherlands 100% 100%
HydraSpecma Production BV Netherlands 100% 100%
HydraSpecma Hydraulic (Shanghai) Co.Ltd China 100% 100%
HydraSpecma Hydraulic U.S. Inc
USA 100% 100%
HydraSpecma Norge AS Norway 100% 100%
Specma Fastighets AB Sweden 100% 100%
HydraSpecma Do Brasil Mangueiras Hidraulicas Ltda Brazil 90% 90%
HydraSpecma Renewables AB Sweden 100% 0%
HydraSpecma Renewables ApS Denmark 100% 0%
HydraSpecma Renewables India Pvt. Ltd India 100% 0%
HydraSpecma Renewables Inc. USA 100% 0%
HydraSpecma Renewables (Tianjin) Co.,Ltd. China 100% 0%
HydraSpecma Renewables ASIA Ltd. China 100% 0%
Dansk Afgratningsteknik A/S Skjern, Denmark 60% 60%
Registered
office
All amounts in DKK’000
Annual report 2023 | 68
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the parent company financial statements
at 31 December
Note
2023 2022
6 Investments in associates
Cost at 1 January 1.600 1.600
Cost at 31 December 1.600 1.600
Adjustments at 1 January 249 305
Share of profit for the year 0 0
Distributed dividends 0 (56)
Adjustments at 31 December 249 249
Carrying amount at 31 December 1.849 1.849
The Group has investments in the following associates:
Equity
interest
Equity
interest
Name
31.12.2023 31.12.2022
NGIN A/S
Aarhus,
Denmark
40% 40%
2023 2022
7 Financial income
Interest income, group companies 9.611 102
Foreign exchange adjustments 3.404 0
Other interest income 294 161
Total financial income 13.309 263
8
Financial expenses
Interest expenses, group companies 23.572 7.312
Foreign exchange adjustments 0 1.238
Interest expenses, lease debt 75 79
Other interest expenses 2.384 1.261
Total financial expenses 26.031 9.890
For lease assets we refer to note 12 and for lease liabilities we refer to note 17.
Registered
office
All amounts in DKK’000
Annual report 2023 | 69
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the parent company financial statements
1 January - 31 December
Note
2023 2022
9 Tax on profit/loss for the year
Tax on the profit for the year is specified as follows:
Tax on profit/loss for the year 11.404 17.468
Tax on other comprehensive income 1.173 (884)
Total tax 12.577 16.584
Tax on the profit for the year has been calculated as follows:
Current tax 9.805 17.746
Deferred tax 1.599 (344)
Adjustment of prior-year tax charge 0 66
Total tax recognised in the income statement 11.404 17.468
Specification of the tax on the profit for the year:
Computed 22,0% tax on profit before tax 14.016 14.202
Adjustment of prior-year tax charge 0 66
(2.612) 3.200
Total tax recognised in the income statement 11.404 17.468
Effective tax rate 8,2% 10,1%
Before tax Tax After tax
Hedging instruments for the year
5.333 (1.173) 4.160
5.333 (1.173) 4.160
Before tax Tax After tax
Hedging instruments transferred to financials 303 (67) 236
Hedging instruments for the year
(4.092) 900 (3.192)
Other adjustments recognised directly in equity (233) 51 (182)
(4.022) 884 (3.138)
2022
2023
Tax on items recognised in other comprehensive
income
Tax on items recognised in other comprehensive
income
Tax effect of non-deductible costs and non-taxable income
Total tax on items recognised in other comprehensive
income
Total tax on items recognised in other comprehensive
income
All amounts in DKK’000
Annual report 2023 | 70
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the parent company financial statements
at 31 December
Note
10
Intangible assets
IT projects Total
Cost at 1 January 26.360 26.360
Cost at 31 December 26.360 26.360
Amortisation and impairment at 1 January (26.360) (26.360)
Amortisation and impairment at 31 December (26.360) (26.360)
Carrying amount at 31 December 0 0
Amortised over 3-5 years
IT projects Total
Cost at 1 January 26.593 26.593
Disposals (233) (233)
Cost at 31 December 26.360 26.360
Amortisation and impairment at 1 January (26.360) (26.360)
Amortisation and impairment at 31 December (26.360) (26.360)
Carrying amount at 31 December 0 0
Amortised over 3-5 years
11
Property, plant and equipment
Land and
buildings
Plant and
machinery
Other
fixtures and
fittings, tools
and
equipment
Assets
under
construction
Total
Cost at 1 January 151.264 72.157 34.898 0 258.319
Additions 4.251 2.131 3.645 3.257 13.284
Disposals 0 (329) (2.929) 0 (3.258)
Cost at 31 December 155.515 73.959 35.614 3.257 268.345
(61.260) (52.820) (27.452) 0 (141.532)
0 36 2.848 0 2.884
Depreciation (4.719) (5.653) (3.800) 0 (14.172)
(65.979) (58.437) (28.404) 0 (152.820)
89.536 15.522 7.210 3.257 115.525
Depreciated over 25-50 years 5-10 years 3-7 years
31.12.2023
31.12.2022
31.12.2023
Depreciation and impairment of
assets disposed of
Depreciation and impairment at
31 December
Depreciation and impairment at
1 January
Carrying amount at 31
December
All amounts in DKK’000
Annual report 2023 | 71
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the parent company financial statements
at 31 December
Note
11
Property, plant and equipment (comtinued)
Land and
buildings
Plant and
machinery
Other
fixtures and
fittings, tools
and
equipment
Assets
under
construction
Total
Cost at 1 January 150.650 69.673 34.674 0 254.997
Additions 1.216 3.352 2.470 0 7.038
Disposals (602) (868) (2.246) 0 (3.716)
Cost at 31 December 151.264 72.157 34.898 0 258.319
(57.257) (47.532) (25.587) 0 (130.376)
602 861 2.160 0 3.623
Depreciation (4.605) (6.149) (4.025) 0 (14.779)
(61.260) (52.820) (27.452) 0 (141.532)
90.004 19.337 7.446 0 116.787
Depreciated over 25-50 years 5-10 years 3-7 years
12
Lease assets
Lease
assets
Total
Cost at 1 January 7.481 7.481
Additions 1.507 1.507
Disposals (3.472) (3.472)
Modifications 20 20
Cost at 31 December 5.536 5.536
Depreciation and impairment at 1 January (4.905) (4.905)
Depreciation and impairment of assets disposed of 3.472 3.472
Depreciation (1.427) (1.427)
Depreciation and impairment at 31 December (2.860) (2.860)
Carrying amount at 31 December 2.676 2.676
Depreciated over 3-5 years
For lease interests we refer to note 8 and for lease liabilities we refer to note 17.
Depreciation and impairment at
1 January
31.12.2023
Depreciation and impairment of
assets disposed of
Depreciation and impairment at
31 December
Carrying amount at 31
December
31.12.2022
All amounts in DKK’000
Annual report 2023 | 72
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the parent company financial statements
at 31 December
Note
12
Lease assets (continued)
Services
Low-value
leases
Leases with
terms of less
than 1 year
Total
Less than 1 year 141 0 390 531
1-5 years 184 0 0 184
More than 5 years 0 0 0 0
Total
325 0 390 715
Lease liabilities recognised in the balance sheet are detailed in note 17.
Recorded in the income statement
Services
Low-value
leases
Leases with
terms of less
than 1 year
Total
Expense for the year 143 0 1.017 1.160
Lease payments amount to DKK 1,880 thousand (2022: DKK 1,856 thousand)
Lease
assets
Total
Cost at 1 January 6.994 6.994
Additions 1.200 1.200
Disposals (881) (881)
Modifications 168 168
Cost at 31 December 7.481 7.481
Depreciation and impairment at 1 January (3.704) (3.704)
Depreciation and impairment of assets disposed of 881 881
Depreciation (2.082) (2.082)
Depreciation and impairment at 31 December (4.905) (4.905)
Carrying amount at 31 December 2.576 2.576
Depreciated over 3-5 years
31.12.2022
Lease liabilities not recognised in the balance
sheet
31.12.2023
All amounts in DKK’000
Annual report 2023 | 73
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the parent company financial statements
at 31 December
Note
12
Lease assets (continued)
Services
Low-value
leases
Leases with
terms of less
than 1 year
Total
Less than 1 year 134 0 565 699
1-5 years 154 0 0 154
More than 5 years 0 0 0 0
Total
288 0 565 853
Services
Low-value
leases
Leases with
terms of less
than 1 year
Total
Expense for the year 156 0 980 1.136
31.12.2023 31.12.2022
13
Inventories
Raw materials and consumables
4.276 5.831
Work in progress 13.311 6.220
Finished goods and goods for resale 153.449 171.096
Total inventories 171.036 183.147
Cost of inventories for which impairment losses have been recognised 60.063 71.160
Accumulated impairment losses on inventories (44.671) (44.903)
Net sales value 15.392 26.257
14
Receivables
Receivable from subsidiaries (non-current) 116.822 0
Trade receivables 179.486 177.829
Other receivables 1.621 2.525
Receivable from subsidiaries 142.113 118.493
Receivable from parent company 1.093 846
Prepaid expenses 3.743 1.812
Total receivables 444.878 301.505
Impairment losses on receivables:
Impairment losses 1 January (1.500) (910)
Impairment losses for the year (1.661) (602)
Realised loss 661 12
Total impairment losses (2.500) (1.500)
31.12.2022
Recorded in the income
statement
Lease liabilities not recognised in the balance
sheet
All amounts in DKK’000
Annual report 2023 | 74
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the parent company financial statements
at 31 December
Note
14
Receivables (continued)
Trade receivables are specified as follows:
31.12.2023
Not fallen
due
1-30 days 31-90 days >90 days Total
Total receivables 142.829 33.644 3.760 1.753 181.986
0 0 (747) (1.753) (2.500)
Trade receivables, net 142.829 33.644 3.013 0 179.486
Proportion of total receivables expected to be settled 98,6%
Impairment rate 0,0% 0,0% 19,9% 100,0% 1,4%
31.12.2022
Not fallen
due
1-30 days 31-90 days >90 days Total
Total receivables 149.905 23.573 3.490 2.361 179.329
0 0 (250) (1.250) (1.500)
Trade receivables, net 149.905 23.573 3.240 1.111 177.829
Proportion of total receivables expected to be settled 99,2%
Impairment rate 0,0% 0,0% 7,2% 52,9% 0,8%
Note 31.12.2023 31.12.2022
15
Deferred tax
Deferred tax at 1 January 1.292 1.477
Adjustment related to prior years 0 (113)
Deferred tax for the year recognised in profit/loss for the year 1.599 (344)
Deferred tax for the year recognised in equity (259) 272
Deferred tax at 31 December, net 2.632 1.292
Deferred tax is recognised as follows in the statement of financial position:
Deferred tax (liability) 2.632 1.292
Deferred tax at 31 December, net 2.632 1.292
Deferred tax pertains to:
Property, plant and equipment 4.977 4.778
Current assets (1.009) (1.792)
Provisions (2.238) (2.856)
Other liabilities 902 1.162
Deferred tax at 31 December, net 2.632 1.292
Due between (days)
Due between (days)
Impairment losses on trade
receivables
Impairment losses on trade
receivables
All amounts in DKK’000
Annual report 2023 | 75
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the parent company financial statements
at 31 December
Note
15
Deferred tax (continued)
Change in deferred tax
Balance at
1 January
Adjustments
Recognised
in the profit
for the year
Recognised
in equity
Balance at
31
December
Property, plant and equipment 4.778 0 199 0 4.977
Inventories (1.993) 0 518 0 (1.475)
Other current assets 201 0 265 0 466
Provisions (2.856) 0 618 0 (2.238)
Other liabilities 1.162 0 (1) (259) 902
1.292 0 1.599 (259) 2.632
Balance at
1 January
Adjustments
Recognised
in the profit
for the year
Recognised
in equity
Balance at
31
December
Intangible assets 51 0 0 (51) 0
Property, plant and equipment 6.703 0 (1.925) 0 4.778
Inventories (1.120) 0 (873) 0 (1.993)
Other current assets 210 (113) (219) 323 201
Provisions (3.630) 0 774 0 (2.856)
Other liabilities (737) 0 1.899 0 1.162
1.477 (113) (344) 272 1.292
Note 31.12.2023 31.12.2022
16
Provisions
Provisions at 1 January 12.981 16.500
Used for the year (12.981) (8.348)
Provided for the year 10.174 4.829
Provisions at 31 December 10.174 12.981
Expected due dates:
Current 10.174 12.981
Non-current 0 0
Provisions at 31 December 10.174 12.981
Total change in deferred tax
Provisions include contractual guarantees of 1-5 years
31.12.2023
31.12.2022
Total change in deferred tax
All amounts in DKK’000
Annual report 2023 | 76
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the parent company financial statements
at 31 December
Note 31.12.2023 31.12.2022
17
Interest-bearing debt
Debt recognised in the balance sheet:
Mortgagedebt (non-current) 55.631 57.602
Mortgage debt (current) 2.129 2.389
Lease debt (non-current) 1.529 1.409
Lease debt (current) 1.201 1.220
Debt to subsidiary (non current) 17.752 0
Credit institutions (current) 117 85
Debt to parent company (non-current) 500.000 300.000
Debt to parent company (current) 202.441 17.066
Debt to subsidiaries (current) 7.202 7.931
Total interest-bearing debt 788.002 387.702
Fair value of interest-bearing debt 788.041 387.606
For lease interests we refer to note 8 and for lease assets we refer to note 12.
Maturity profile of interest-bearing debt
31.12.2023 31.12.2022 31.12.2023 31.12.2022 31.12.2023 31.12.2022
Overdraft facilities
without planned
repayment
7.319 8.016 0 0 7.319 8.016
Less than 1 year 21.779 12.683 18.449 9.074 3.330 3.609
1-5 years 766.902 349.200 37.164 21.221 729.738 327.979
More than 5 years 54.891 56.394 7.276 8.296 47.615 48.098
Total 850.891 426.293 62.889 38.591 788.002 387.702
Spot rate used for floating rate loans in the table above.
Whereoff leasing amounts to:
Less than 1 year 1.268 1.274 67 54 1.201 1.220
1-5 years 1.586 1.448 57 39 1.529 1.409
More than 5 years 0 0 0 0 0 0
Total 2.854 2.722 124 93 2.730 2.629
Principal repayment
Interest
Carrying amount
All amounts in DKK’000
Annual report 2023 | 77
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the parent company financial statements
at 31 December
Note
17
Interest-bearing debt (continued)
Interest rate risk
Fixed rate
Floating
rate
Total Fixed rate Floating rate Total
Interest-bearing
debt
0 788.041 788.041 0 387.606 387.606
Net exposure 0 788.041 788.041 0 387.606 387.606
31.12.2023 31.12.2022
18 Trade payables and other payables
Trade payables 120.651 108.141
Debt to subsidiaries – non-interest-bearing 5.954 2.663
Debt to parent company – non-interest-bearing 0 6.511
Other debt 27.885 33.937
Total trade payables and other payables 154.490 151.252
Substantially all trade payables and other payables fall due within one year.
19
Income tax
Income tax payable at 1 January 1.789 2.330
Current tax for the year 9.805 17.746
Adjustment related to prior years 0 179
Taxes due recognised in equity 1.432 (1.157)
Income tax paid during the year (15.178) (17.309)
Income tax at 31 December (2.152) 1.789
which is specified as follows:
Income tax receivable (2.152) 0
Income tax payable 0 1.789
Income tax at 31 December (2.152) 1.789
31.12.2023
31.12.2022
The Group hedges parts of the interest rate risk on its debt subject to a case-by-case assessment. In
addition to expectations for interest rate developments, such assessment includes the amount of the
total floating rate debt relative to equity. Hedging normally consists of interest rate swaps and rate
caps. All interest rate swaps and rate caps are used to hedge underlying loans/credit facilities. There
were no interest rate swaps at 31 December 2023.
A +/- 1% change in the interest rate level would increase/reduce financial expenses by approx. DKK
7.9 million.
All amounts in DKK’000
Annual report 2023 | 78
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the parent company financial statements
at 31 December
Note
31.12.2023 31.12.2022
20 Changes in working capital
Change in inventories 12.343 (651)
Change in receivables (27.966) (22.542)
Change in trade payables and other payables 3.239 (16.116)
Total changes in working capital (12.384) (39.309)
21
Adjustment for non-cash transactions
Purchase of property, plant and equipment, see note 11 13.284 7.038
Paid relating to purchase property plant and equipment 13.284 7.038
Financial liabilities incurred 1.527 1.368
of which lease debt (1.527) (1.368)
Proceeds from incurring financial liabilities 0 0
22
Cash and cash equivalents
Cash and cash equivalents 144 3.847
Total cash and cash equivalents 144 3.847
23
Categories of financial assets and liabilities
Financial assets
Non-current assets
Other investments and securities (other shareholdings)
21 21
Available-for-sale financial assets *)
21 21
Current assets
Trade receivables
179.486 177.829
Other receivables
261.649 121.864
Cash and cash equivalents
144 3.847
Receivables
441.279 303.540
Financial liabilities
Non-current liabilities
Debt to mortgage-credit institutions
55.631 57.602
Other credit institutions
1.529 1.409
Debt to subsidiaries
17.752 0
Debt to parent company
500.000 300.000
Financial liabilities at amortised cost
574.912 359.011
All amounts in DKK’000
Annual report 2023 | 79
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the parent company financial statements
at 31 December
Note
23
Categories of financial assets and liabilities (continued)
31.12.2023 31.12.2022
Current liabilities
Debt to mortgage-credit institutions
2.129 2.389
Other credit institutions
1.318 1.305
Debt to parent company
202.441 17.066
Debt to subsidiaries
7.202 7.931
Trade payables and other debt
148.536 142.078
Financial liabilities at amortised cost
361.626 170.769
Other debt (derivative financial instruments)
0 0
Trading portfolio **)
0 0
24
Financial risk
The Company’s risk management policy
Interest rate risks are described in greater detail in note 17.
Currency risk
Due to the currency peg to the Euro, no real currency risk is considered to exist between DKK and
EUR, and this is omitted from the table above.
A 5% depreciation of currencies in which the Company has significant exposure, based on the
Company’s functional currency, would impact profit for the year by about DKK 60 thousand (2022:
DKK 321 thousand). The amounts are based on balance sheet items at 31 December 2023.
Due to the nature of its operations, investments and financing, the Company is exposed to changes
in exchange rates and interest rates. It is company policy to not actively speculate in financial
instruments. Accordingly, the Company’s financial management exclusively involves the
management of financial risk relating to its operations and investments.
Set out in the table below is the Company’s overall foreign exchange position at 31 December,
determined by aggregating the gross currency risks of the individual group companies.
**) Financial instruments valued by external credit institutions using generally accepted valuation
techniques on the basis of observable data (level 2).
*) Unlisted shares, stated at estimated value (level 3)
It is the Company’s policy to hedge significant transaction risks related to future income streams not
naturally covered through purchases and sales. As a general rule, currency risks are hedged by way
of forward contracts with a duration of up to 12 months. The market value of currency hedges was an
asset of DKK 292 thousand (2022: An asset of DKK 1,469 thousand and a liability of DKK 6,510
thousand).
All amounts in DKK’000
Annual report 2023 | 80
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the parent company financial statements
at 31 December
Note
24
Financial risk (continued)
Currency
Cash and
receivables
Liabilities
Position
before
hedging
Hedged
using
financial
instruments
Position
after
hedging
USD/DKK 1.420 (41.796) (40.376) 0 (40.376)
GBP/DKK 0 (714) (714) 0 (714)
SEK/DKK 116.822 (77.378) 39.444 0 39.444
NOK/DKK 443 0 443 0 443
CNY/DKK 10.521 0 10.521 (9.469) 1.052
CAD/DKK 0 (1.044) (1.044) 0 (1.044)
Currency
Cash and
receivables
Liabilities
Position
before
hedging
Hedged
using
financial
instruments
Position
after
hedging
USD/DKK 1.325 (8.192) (6.867) 0 (6.867)
GBP/DKK 0 (674) (674) 0 (674)
SEK/DKK 259 (734) (475) 0 (475)
NOK/DKK 323 (29) 294 0 294
CNY / DKK 15.323 (52) 15.271 (13.146) 2.125
CAD/DKK 0 (834) (834) 0 (834)
Credit risk
Capital management
Liquidity risk
The Company’s credit risk is primarily related to trade receivables. The Company seeks to avoid signi-
ficant exposure to individual customers or business partners. The Company’s policy for undertaking
credit risks involves regular credit assessments of all major customers.
The Company regularly assesses the need for adjustment of the capital structure to weigh up the
higher required rate of return against the increased uncertainty related to debt financing. The ratio of
equity to total liabilities was 50.6% at 31 December 2023 (2022: 57.5%).
To ensure that the Company always has the necessary cash resources to capitalise on any invest-
ment opportunities that may arise and to be able to settle liabilities, the Company has entered into
several agreements with recognised financial institutions, under which they provide credit lines to the
Company.
The parent company’s currency risks in the balance sheet at 31 December 2022 translated to
DKK
It is the Group’s policy as a general rule to distribute the profit for the year after tax, in due considerati-
on of changes to the balance sheet and special liquidity requirements with respect to investments.
Dividend payments must be made in due consideration of the target level of equity.
The parent company’s currency risks in the balance sheet at 31 December 2023 translated to
DKK
All amounts in DKK’000
Annual report 2023 | 81
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the parent company financial statements
at 31 December
Note
24
Financial risk (continued) 31.12.2023 31.12.2022
At 31 December, the Group’s cash resources consisted of:
Available operating credits 255.428 121.178
Drawn operating credits (209.760) (24.997)
Amount in the cash pool scheme
1.093 847
Cash and cash equivalents 144 3.847
46.905 100.875
25
NIBD
Change in NIBD for the year:
Non-cash items
1 January Cash flows
For. ex.
adjustments
Other
31
December
Interest-bearing assets:
80.847 117.167 (99) 0 197.915
Cash and cash equivalents 3.847 (3.703) 0 0 144
Interest-bearing liabilities:
57.602 (1.971) 0 0 55.631
300.000 200.000 0 0 500.000
2.389 (260) 0 0 2.129
24.997 202.398 0 0 227.395
Credit institutions (current) 85 32 0 0 117
Lease debt 2.629 (1.426) 0 1.527 2.730
NIBD 303.008 285.309 99 1.527 589.943
Current debt to group
companies
Current receivables, group
companies
Debt to mortgage-credit
institutions (non-current)
Non-current debt to group
companies
Current portion of non-current
liabilities
All amounts in DKK’000
Annual report 2023 | 82
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the parent company financial statements
at 31 December
Note
26
Operating lease liabilities and rent commitments
Operating leases and rent commitments: Property Cars Total
Falling due within 0-1 years 390 0 390
Falling due within 1-5 years 0 0 0
Falling due after 5 years 0 0 0
Total 390 0 390
Operating leases and rent commitments: Property Cars Total
Falling due within 0-1 years 565 0 565
Falling due within 1-5 years 0 0 0
Falling due after 5 years 0 0 0
Total 565 0 565
27
Contingent liabilities and guarantees
Contingent liabilities
Guarantees 31.12.2023 31.12.2022
The following assets have been provided as security to credit institutions:
Land and buildings with a carrying amount of 64.126 62.461
31.12.2023
31.12.2022
The above assets have been provided as security for the Group’s debt to credit and mortgage-credit
institutions of DKK 57,760 thousand (2022: DKK 59,991 thousand).
HydraSpecma derives a significant proportion of its financing from the cash reserves of its parent
company, Schouw & Co., and to a lesser extent from non-committed credit facilities.
The Company is jointly taxed with the other Danish companies of the Schouw & Co. Group. As a
group company, the Company is jointly and severally liable with the other Danish group companies
for Danish income tax and withholding tax on dividends, interest and royalties within the joint tax pool.
The net liability of the jointly taxed entities to SKAT is specified in the consolidated financial
statements of the management company. Any subsequent corrections in income subject to joint
taxation, withholding taxes on dividends, etc. may result in the Company’s tax liability increasing.
Lease liabilities are measured at net present value. Operating lease liabilities comprise minor assets
and leases with terms of less than one year.
Financing provided by the parent company consists mainly of a syndicated bank facility, which in
December 2020 was refinanced with a total facility line of DKK 3,275 million.
The facility has a three-year term with an option for a one-year extension after the first and second
year. The first extension option was utilised in December 2021, and the second extension option was
utilised in December 2022. The bank consortium consists of Danske Bank, DNB, Nordea as well as
the international bank Hongkong & Shanghai Banking Corporation (HSBC).
Schouw & Co. issued Schuldscheins for EUR 136 million (DKK 1,013 million) in April 2019 and for
EUR 225 million (DKK 1,677 million) in November 2023. The Schuldscheins mature in April 2024,
April 2026, November 2026 and November 2030.
All amounts in DKK’000
Annual report 2023 | 83
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the parent company financial statements
at 31 December
Note
27
Contingent liabilities and guarantees (continued)
Contingent liabilities
28
Related party disclosures
Related parties are described in note 27 to the consolidated financial statements.
In addition, the parent company had the following transactions with group companies:
2023 2022
Subsidiaries:
Divestments
53.004 73.748
Acquisitions
8.032 7.746
Management fee - income
28.566 17.358
Royalty fee - income
2.858 4.540
Parent company:
Management fee - expense
1.950 1.875
Interest expenses
22.630 7.312
Payment to Schouw & Co. for share option programme
4.309 3.524
The parent company’s receivables from group companies at 31 December are detailed in note 14.
The parent company’s debt to group companies is detailed in notes 17 and 18.
In December 2021, Schouw & Co. set up a DKK 400 million seven-year loan with the Nordic
Investment Bank related to specific Danish capacity-expanding investments and development costs.
In 2022 and 2023, Schouw & Co. established a number of term loans with Danske Bank, Nordea
Bank, DNB, HSBC and Jyske Bank, which currently total an outstanding amount of DKK 1,800
million, DKK 400 million of which matures in March 2024, while the remaining DKK 1,400 million
matures in January 2025.
Like other of the major subsidiaries of the Schow & Co. Group, HydraSpecma is a co-guarantor for
the above-mentioned facilities in the total amount of DKK 8,165 million, of which DKK 5,542 million
had been drawn at 31 December 2023. In addition, the Company has a number of minor facilities,
established through the Schouw & Co. Group’s global banker, HSBC, for a total amount of DKK 58
million with drawings at 31 December 2023 amounting to DKK 47 million.
All amounts in DKK’000
Annual report 2023 | 84
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
Notes to the parent company financial statements
at 31 December
Note
29
Pillar Two
30
Accounting policies
See note 32 to the consolidated financial statements.
31
New financial reporting regulations
See note 31 to the consolidated financial statements.
The pillar Two legislation enacted in Denmark in December 2023 will be effective for the Danish
Group's financial year beginning 1 January 2024. It implies that the parent company,
Aktieselselskabet Schouw & Co. will be required to pay top-up tax on profits of its subsidiaries to the
Danish tax authorities if these are locally taxed at an effective tax rate of less than 15 percent
(minimum tax). If the relevant jurisdiction has enacted local top-up tax rules, the top-up tax will be
paid locally.
The Group is in the process of assessing the potenital exposure arising from the complex Pillar Two
legislation. The assessment is currently not completed. Hence, quantitative information to indicate
potential exposure to Pillar Two income taxes is presently not known or reasonably estimable. The
assessment carried out so far indicates that the most jurisdictions should not be exposed, because
the effective tax rate is 15% or higher. The Group expects to complete the assessment in the first of
half of financial year 2024.
All amounts in DKK’000
Annual report 2023 | 85
Penneo dokumentnøgle: 6WFC6-XM3GD-2APNO-Q4MLQ-MV7Z7-X36U6
© HydraSpecma · Annual report 2023 · 02.2024
HydraSpecma A/S
Bækgårdsvej 36
6900 Skjern
+4597350599
HSDK@hydraspecma.com
hydraspecma.com
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Annual reportAuditor's report on audited financial statementsParsePort XBRL Converter2023-01-012023-12-312022-01-012022-12-315493003X6V92B0BSLH27Regnskabsklasse C, stor virksomhedOpinionBasis for Opinion5493003X6V92B0BSLH272023-01-012023-12-31cmn:ConsolidatedMember5493003X6V92B0BSLH272023-01-012023-12-315493003X6V92B0BSLH272022-01-012022-12-315493003X6V92B0BSLH272023-12-315493003X6V92B0BSLH272022-12-315493003X6V92B0BSLH272021-12-315493003X6V92B0BSLH272021-12-31ifrs-full:IssuedCapitalMember5493003X6V92B0BSLH272022-01-012022-12-31ifrs-full:IssuedCapitalMember5493003X6V92B0BSLH272022-12-31ifrs-full:IssuedCapitalMember5493003X6V92B0BSLH272021-12-31ifrs-full:ReserveOfCashFlowHedgesMember5493003X6V92B0BSLH272022-01-012022-12-31ifrs-full:ReserveOfCashFlowHedgesMember5493003X6V92B0BSLH272022-12-31ifrs-full:ReserveOfCashFlowHedgesMember5493003X6V92B0BSLH272021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5493003X6V92B0BSLH272022-01-012022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5493003X6V92B0BSLH272022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5493003X6V92B0BSLH272021-12-31ifrs-full:RetainedEarningsMember5493003X6V92B0BSLH272022-01-012022-12-31ifrs-full:RetainedEarningsMember5493003X6V92B0BSLH272022-12-31ifrs-full:RetainedEarningsMember5493003X6V92B0BSLH272021-12-31HYD:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember5493003X6V92B0BSLH272022-01-012022-12-31HYD:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember5493003X6V92B0BSLH272022-12-31HYD:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember5493003X6V92B0BSLH272021-12-31ifrs-full:EquityAttributableToOwnersOfParentMember5493003X6V92B0BSLH272022-01-012022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember5493003X6V92B0BSLH272022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember5493003X6V92B0BSLH272021-12-31ifrs-full:NoncontrollingInterestsMember5493003X6V92B0BSLH272022-01-012022-12-31ifrs-full:NoncontrollingInterestsMember5493003X6V92B0BSLH272022-12-31ifrs-full:NoncontrollingInterestsMember5493003X6V92B0BSLH272023-01-012023-12-31ifrs-full:IssuedCapitalMember5493003X6V92B0BSLH272023-12-31ifrs-full:IssuedCapitalMember5493003X6V92B0BSLH272023-01-012023-12-31ifrs-full:ReserveOfCashFlowHedgesMember5493003X6V92B0BSLH272023-12-31ifrs-full:ReserveOfCashFlowHedgesMember5493003X6V92B0BSLH272023-01-012023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5493003X6V92B0BSLH272023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5493003X6V92B0BSLH272023-01-012023-12-31ifrs-full:RetainedEarningsMember5493003X6V92B0BSLH272023-12-31ifrs-full:RetainedEarningsMember5493003X6V92B0BSLH272023-01-012023-12-31HYD:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember5493003X6V92B0BSLH272023-12-31HYD:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember5493003X6V92B0BSLH272023-01-012023-12-31ifrs-full:EquityAttributableToOwnersOfParentMember5493003X6V92B0BSLH272023-12-31ifrs-full:EquityAttributableToOwnersOfParentMember5493003X6V92B0BSLH272023-01-012023-12-31ifrs-full:NoncontrollingInterestsMember5493003X6V92B0BSLH272023-12-31ifrs-full:NoncontrollingInterestsMember5493003X6V92B0BSLH272023-01-012023-12-31cmn:ConsolidatedMember15493003X6V92B0BSLH272023-01-012023-12-31cmn:ConsolidatedMember25493003X6V92B0BSLH272023-01-012023-12-31cmn:ConsolidatedMember15493003X6V92B0BSLH272023-01-012023-12-31cmn:ConsolidatedMember25493003X6V92B0BSLH272023-01-012023-12-31cmn:ConsolidatedMember35493003X6V92B0BSLH272023-01-012023-12-31cmn:ConsolidatedMember45493003X6V92B0BSLH272023-01-012023-12-31cmn:ConsolidatedMember55493003X6V92B0BSLH272023-01-012023-12-31cmn:ConsolidatedMember65493003X6V92B0BSLH272023-01-012023-12-31cmn:ConsolidatedMember15493003X6V92B0BSLH272023-01-012023-12-31cmn:ConsolidatedMember25493003X6V92B0BSLH272023-12-31cmn:ConsolidatedMemberiso4217:EURxbrli:pure