Annual Report
2023
DANÆG Holding A/S
Group
Danægvej 1, 6070 Christiansfeld
CVR
-nr. 35 53 02 23
The annual report was drawn
up and approved at the
company's annual general
meeting on 26/6 2024
Dirigent
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Executive Board
Board of Directors
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CVR No 33 77 12 31
Company Information
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The Company DANÆG Holding A/S
Mail: danaeg@danaeg.com
Web: www.danaeg.com
CVR No: 35 53 02 23
Financial Year: 1 January - 31 December
Municipality: Kolding
Board of Directors
Executive Board
Auditor
Ole Thulstrup Bruhn, Chairman
Jesper Pagh, Vice chairman
Niels Dengsø Jensen
Robert Helge Beck
Jens Skovgaard-Jensen
Camilla Simonsen
Mikael Robert Gilbertsson
Jann Dollerup Vig Jensen
Hans Christian Lei
Financials Highlights
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2023
2022
2021
2020
2019
In million DKK
Income statement
Revenue
2.083
1.879
1.481
1.105
1.308
Gross Profit
320 234 207 144 170
Profit after tax (EAT)
82 14 50 21 33
Balance sheet
Total assets
902 885 844 409 419
Investments in property, plant and equipment
68 54 46 40 31
Group equity
312 227 226 191 200
Cash flow statement
Cash flow from operating activites
164 23 150 37 73
Cash flow from investment activities
-71 -55 -309 -41 -34
Cash flow from financing activities
-97 34 159 -4 -32
Chage in cash and cash equivalents for the year
-4 3 1 -7 7
Full-time employees, FTE
389 357 331 244 239
Ratios
Gross margin, %
15,4% 12,5% 14,0% 13,0% 13,0%
Operating margin, %
5,5% 1,4% 4,2% 2,3% 3,2%
Return on assets, %
12,8% 3,1% 7,4% 6,1% 10,0%
Equity ratio, %
34,6% 25,5% 26,6% 46,7% 47,7%
Return on equity, %
32,9% 6,3% 24,2% 10,7% 16,1%
EBITDA
156 77 77 46 64
Gearing ratio
1,7 4,6 4,1 1,6 0,6
EBIT
116 27 62 25 42
EBT
102 20 58 26 41
Net interest bearing debt, NIBD
270 354 318 74 40
Net working capital, NWC
151 142 113 101 97
Net income, EAT
82 14 50 21 33
In 2023, the Danæg Holding Group has switched to using the international accounting standard, IFRS. The stated figures for
2023 and 2022 and the balance sheet items for 2021 were prepared according to the IFRS standards, other figures were
prepared in accordance with provisions of the Danish Financial Statements Act.
Management Report Danæg Holding A/S
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In 2023, the Danæg Holding Group has switched to using the international accounting standard, IFRS. All figures for 2023 and 2022
as well as the balance sheet items for 2021 have been prepared in accordance with IFRS standards, while other figures have been
prepared in accordance with the provisions of the Danish Financial Statements Act.
Main activities
The Group's main activities are to collect, sort and market the cooperatives' egg production as well as the production and marketing of
egg-related products.
The Group has production facilities in Denmark, Sweden and Finland, which are also the Group's primary markets, but the Group
continues to experience growth in export markets outside the Nordic region.
The Group's long-term strategy is to create profitable growth through a market-oriented range of primarily self-produced and
secondarily purchased products.
Development during the year
The Group's income statement for 2023 shows a profit of 82.5 million DKK (2022: 14.0 million DKK) and the Group's balance sheet
as of 31 December 2023 shows an equity of 311.6 million DKK (2022: 224.2 million DKK).
The result for the year is significantly better than expected at the beginning of the financial year and is mainly attributable to the
Group's foreign subsidiaries' financial performance during the year as well as several significant non-recurring incomes, including the
transition to IFRS accounting standards.
Large-scale global cases of avian flu, combined with egg shortages in a wide range of markets, have meant that sales opportunities
have been good and new geographic markets have opened up. As in previous years, the Group's home markets have been
characterised by high volatility and market changes. This applies both to the Group's direct customers, consumer preferences and the
supply situation, which has required a number of adjustments. In general, however, the group has also seen that the foodservice
segment in particular is showing signs of normalisation, after a number of years with significant fluctuations due to pandemic and,
most recently, inflation.
During the financial year, investments of 70.2 million DKK (2022: 53.9 million DKK) have been made, the vast majority of which was
made in production equipment and facilities. At the end of July 2023, the Danæg Holding Group acquired Torggummans Ägg AB in
Sweden, whose activities are primarily concentrated on purchasing and packing locally produced eggs.
In 2023, Danæg A/S realised a profit of +9.7 million DKK (2022: -0.9 million DKK). The result is higher than expected and can be
attributed to a reasonable balance between weigh-in and sales throughout the year as well as reasonable sales opportunities in the
industrial price market for the excess quantities that have been available.
Kronägg AB, the Group's egg packing plant in Sweden, has realised a profit of +8.5 million DKK in 2023 (2022: +3.8 million DKK).
The result is at the expected level despite significant challenges throughout the year due to salmonella outbreaks at the company's
largest egg producer, which for the Swedish market in general has had the consequence that there has been a significant shortage of
eggs.
In 2023, Danæg Products A/S has realised a profit of +8.5 million DKK (2022: -4.0 million DKK). Overall, the year has been
challenging compared to the expectations at the beginning of the financial year and negatively impacted by very high industrial prices
due to a general shortage of eggs. At the same time, the situation has provided a number of new market opportunities which have
positively affected the company.
Källbergs Industri AB, the Group's product business in Sweden, has realised a profit of +10.7 million DKK in 2023 (2022: +11.2
million DKK). The result is better than expected, taking in to account that the company has been negatively affected by high raw
material prices. However, the global challenges of avian flu have also provided a number of market opportunities for this company.
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Munax Oy, which has activities with both production and packing of shell eggs and processed products, has realised a profit of +20.9
million DKK in 2023 (2022: +6.1 million DKK). The result is better than expected and is positively affected by increasing own
production of eggs combined with good market demand.
Torggummans Ägg AB, which the Group acquired in mid-2023, has achieved a better-than-expected result of +0.7 million DKK.
Overall, the Group result for the year is considered very satisfactory.
Capital readiness
The solvency ratio amounts to 34.6% (2022: 25.5%) corresponding to an equity as of 31 December 2023 of 311.6 million DKK (2022:
224.2 million DKK).
Special risks - operational risks and financial risks
Operation
The Danæg Holding Group is exposed to the usual commercial risks, including fluctuations in commodity prices and currency prices.
These are closely monitored as part of the day-to-day operation of the business, and major fluctuations may have an impact on the
result. Appropriate policies have been implemented to reduce exposure.
The Danæg Holding Group has a very high quality standard within hygiene, traceability, working environment and waste and energy
management. Likewise, the demands on our Danish, Swedish and Finnish egg producers continue to increase. The very high quality
of Danish, Swedish and Finnish eggs, where the occurrence of salmonella is minimal, must be maintained and further expanded, but
at the same time, this entails higher production costs.
The Danæg Holding Group has taken out the insurances relevant to the Group in accordance with the Group's insurance policy. The
Group's insurance policies are reviewed annually together with an insurance advisor.
Currency
The Danæg Holding Group is exposed to currency risks, which are continuously hedged via various hedging instruments.
Objectives and expectations for the coming year
For the financial year 2024, a decline in profit to a level of DKK 45-65 million DKK after tax is expected. The expected decline is
justified by the fact that the financial year that has just ended, has been extraordinarily good and at the same time positively impacted
by non-recurring incomes, which is not expected to be repeated in 2024.
At the beginning of the year, the market is expected to remain very volatile and affected by avian flu and other deceases, as well as a
general shortage of eggs, especially in the Swedish market, which is, however, expected to be rebuilt and normalised during the year.
There will be a continued high focus on streamlining all companies to ensure continued competitiveness.
The basis of earnings
Research and development
The Group's development activities primarily include further development of the company's products and concepts as well as
development of new products for the retail, foodservice and industrial segments.
Ongoing costs are incurred for the development and marketing of new products in the individual companies as well as for the
optimisation of methods and processes.
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External environment
The Danæg Holding Group is an environmentally conscious group and attaches crucial importance to reducing the environmental
impacts of the companies' operations, e.g. by reducing the total amount of waste and reducing energy consumption. In addition, there
is an ongoing focus on improving the individual processes and eliminating heavy lifting and repetitive work.
Knowledge resources
The Group has built an organisation with a high level of knowledge within egg packing and refining. Alongside an efficient production,
we are constantly working to optimise food safety throughout the production process, and the Group has continued and maintained
certification according to a number of applicable standards.
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Statement of gender composition cf. section 99b of the Financial Statements Act
The Danæg Holding Group has developed a comprehensive policy for diversity in the management bodies of the Group with the aim
of ensuring a more equal distribution between the sexes in the different management levels in the long term.
Board of Directors:
It is a goal of the board that the composition should reflect the gender composition of the ownership groups, with due respect for the
democratic choices that lie behind, among other things, the selection of DANÆG amba's Board of Directors, from which parts of the
Board of Directors of DANÆG Holding A/S are elected. Since spring 2022, one female member has been elected to the Board of
Directors. The goal is still to obtain more female members, and during 2023 the board has decided to encourage our female egg
producers to consider a board position prior to next election in 2024, and by 2025 to reach the goal of 2 female members of the board.
Management layers:
The female gender is currently underrepresented in the top management teams of the Danæg Holding A/S. In line with our diversity
policy, we have focused on raising awareness of qualified candidates of the female gender in connection with recruitment processes
Total
ACTUAL - 31 DECEMBER 2023
Female (pct) Male (pct)
GOAL - 31 DECEMBER 2025
Female
(pct) Male (pct)
Board of Directors 7 1 14 % 6 86% 2 29 % 5 71%
Group Management 7 1 14 % 6 86% 2 29 % 5 71%
By a corresponding measurement of the management teams of the individual companies in the Group, the female share of members
amounts to an average of 27% (2022: 19%). Internal promotion and new hires have developed in the right direction, and the Danæg
30% of female members by the end of 2025
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Uncertainty in recognition and measurement
There has been no uncertainty in recognition and measurement in the annual report.
Unusual circumstances
The Group's assets, liabilities, and financial position as at 31 December 2023 as well as the result of the Group's activities and cash
flows for 2023 are not affected by unusual circumstances other than those described.
Post-balance sheet event
After the balance sheet date, it has been decided to distribute dividends of 50.0 million DKK on an extraordinary general meeting. No
other circumstances have occurred that have a material impact on the assessment of the annual report.
Consolidated income statement
for the year ended 31 December 2023
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In thousands DKK
Notes
2023
2022
Revenue from contracts with customers
3
Production costs
Gross profit
-1.762.797 -1.644.992
Distribution costs
-121.998
-124.542
Administrative expenses
-93.218
-105.250
Other operating income
4
Other operating expenses
4
-31 -15
Operating profit
Financial income
7
Financial expenses
7
-17.743 -8.132
Profit before income tax
Income tax expense
8
-19.934 -5.767
Net profit for the year
Consolidated statement of comprehensive income
for the year ended 31 December 2023
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Profit for the year
Other comprehensive income
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations
-7.923
Exchange differences on IFRS-16
Net gain/(loss) on cash flow hedges, net of tax
Other comprehensive income for the period, net of tax
Total comprehensive income for the year
Extraordinary dividend after year end
Total extraordinary dividend after year end per share in DKK
In thousands DKK Notes 2023 2022
Consolidated balance sheet
as at 31 December 2023
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Other financial assets at amortised cost
As at 1 January
In thousands DKK
Notes
2023
2022
2022
Assets
Non-current assets
Goodwill
10, 16
Completed development projects
10
Acquired trademarks and other rights
10
Property, plant and equipment
11
Biological assets
12
Right-of-use assets
15
Financial assets
Deferred tax assets
9
Total non-current assets
Current assets
Inventories
13
Trade receivables
14
Other receivables
17
Prepayments
Income tax receivable
Cash and cash equivalents
Total current assets
Total assets
Consolidated balance sheet
as at 31 December 2023
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As at 1 January
In thousands DKK
Notes
2023
2022
2022
Equity
Share capital
22
Foreign currency translation reserve
-5.264
-7.053
Reserve for cash flow hedges
Retained earnings
Proposed dividend
Total equity
Liabilities
Non-current liabilities
Borrowings
17
Lease liabilities
15
Deferred tax liabilities
9
Other liabilities
17
Total non-current liabilities
Current liabilities
Borrowings
17
Lease liabilities
15
Trade payables
17
Income tax liabilities
Other liabilities
Total current liabilities
Total liabilities
Total liabilities and equity
Consolidated statement of changes in equity
for the year ended 31 December 2023
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As at 1 January 2023
-7.053 1.048 193.297
Profit for the period
Other comprehensive income
Total comprehensive income
Transactions with owners in their
capacity as owners
Dividends paid
As at 31 December 2023
-5.264 - 276.888
In thousands DKK
Share capital
Foreign currency
Reserve for cash flow
translation reserve
hedges
Retained earnings
Proposed dividend
Total equity
Consolidated statement of changes in equity
for the year ended 31 December 2022
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As at 1 January 2022
As at 31 December 2022
In thousands DKK
Share capital
Foreign currency
Reserve for cash flow
translation reserve
hedges
Retained earnings
Proposed dividend
Total equity
Profit for the period
Other comprehensive income
-7.620
Total comprehensive income
-7.923 303 14.302
Transactions with owners in their
capacity as owners
Dividends paid
-5.000 -5.000
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Consolidated statement of cash flows
for the year ended 31 December 2023
In thousands DKK
Notes
2023
2022
Cash flows from operating activities
Net profit for the year
Adjustments
21
Changes in net working capital
21
-22.905
Interest received
Interest paid
-17.743
-8.132
Income taxes paid
Net cash inflow from operating activities
-8.101 -5.696
Cash flows from investing activities
Payment for acquisition of subsidiaries, net of cash acquired
-8.338
Payments for intangible assets
-2.191
-1.019
Payments for property, plant and equipment
-67.963
-53.594
Payments for biological assets
-14.222
Proceeds from sales of tangible assets
Net cash outflow from investing activities
-70.785 -68.168
Cash flows from financing activities
Repayment of borrowings
-105.169
Proceeds from borrowings
Principal elements of lease payments
-2.948
-2.314
Dividends paid to shareholders
-5.000
Other financing activities
Net cash inflow (outflow) from financing activities
-96.779
Net increase (decrease) in cash and cash equivalents
-3.719
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at end of year
Contents of the notes to the consolidated financial statements
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Note 1 Material accounting policy information
Note 2 Critical estimates, judgements and errors
Note 3 Revenue from contracts with customers
Note 4 Other income and expense items
Note 5 Staff costs
Note 6 Depreciation, amortisation and impairment
Note 7 Financial income and expenses
Note 8 Income tax expense
Note 9 Deferred tax
Note 10 Intangible assets
Note 11 Property, plant and equipment
Note 12 Biological assets
Note 13 Inventories
Note 14 Trade receivables
Note 15 Leases
Note 16 Impairment tests
Note 17 Financial assets and financial liabilities
Note 18 Financial risk management
Note 19 Hedging
Note 20
Fair values
Note 21 Cash flow specifications
Note 22 Share capital
Note 23 Capital management
Note 24 Contingent liabilities, commitments and contingencies
Note 25 Business combinations
Note 26 Related party transactions
Note 27 Fee to auditors appointed at the general meeting
Note 28 Subsidiaries
Note 29 Subsequent events
Note 30 First time adoption of IFRS
Contents of the notes to the consolidated financial statements
Note 1 Material accounting policy information
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This note provides a list of the significant accounting policies adopted in the preparation of these consolidated financial statements.
These policies have been consistently applied to all the years presented, unless otherwise stated. The consolidated financial
statements are for the group consisting of Danæg Holding A/S and its subsidiaries ('the Group').
Basis of preparation
The consolidated financial statements for the Group have been prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the EU as well as additional the Danish disclosure requirements applying to entities of reporting
class C for large enterprises.
The consolidated financial statements are presented in thousands Danish Kroner ('DKK') and all values are rounded to the nearest
thousand, except when otherwise indicated.
First-time adoption of IFRS
These consolidated financial statements are the first consolidated financial statements that are presented in accordance with IFRS.
The comparative figures for 2022 in the income statement and the balance sheet items as at 1 January 2022 and 31 December 2022
were restated in accordance with IFRS. The accounting policies applied are based on the standards and interpretations effective for
2023. No standards or interpretations which are not yet effective have been adopted.
Refer to note 30 for information on how the Group adopted IFRS.
New standards and interpretations not yet adopted
Certain new accounting standards, amendments to accounting standards and interpretations have been published that are not
mandatory for 31 December 2023 reporting periods and have not been early adopted by the Group. These standards, amendments
or interpretations are not expected to have a material impact on the Group in the current or future reporting periods and on
foreseeable future transactions.
Principles of consolidation
Subsidiaries
Subsidiaries are all entities over which the Group has control. The Group controls an entity where the Group is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct
the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are
deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the Group.
Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised
losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of
subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
Contents of the notes to the consolidated financial statements
Note 1 Material accounting policy information
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Business combinations
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or
other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:
-
fair values of the assets transferred
-
liabilities incurred to the former owners of the acquired business
-
equity interests issued by the Group
-
fair value of any asset or liability resulting from a contingent consideration arrangement, and
-
fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited
exceptions, measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the
acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s proportionate share of
the acquired entity’s net identifiable assets.
Acquisition-related costs are expensed as incurred.
The excess of the:
-
consideration transferred,
-
amount of any non-controlling interest in the acquired entity, and
-
acquisition-date fair value of any previous equity interest in the acquired entity
over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the
net identifiable assets of the business acquired, the difference is recognised directly in profit or loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present
value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar
borrowing could be obtained from an independent financier under comparable terms and conditions.
Contingent consideration is classified as a financial liability and subsequently remeasured to fair value, with changes in fair value
recognised in profit or loss.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity
interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from such remeasurement are
recognised in profit or loss.
Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Danish
Kroner (DKK), which is the also parent's functional currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation of monetary assets
and liabilities denominated in foreign currencies at year end exchange rates, are generally recognised in profit or loss. They are
deferred in equity if they are attributable to part of the net investment in a foreign operation.
Contents of the notes to the consolidated financial statements
Note 1 Material accounting policy information
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The results and financial position of foreign operations that have a functional currency different from Danish Kroner are translated
into Danish Kroner as follows:
-
assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet
-
income and expenses for each statement of profit or loss and statement of comprehensive income are translated at average
exchange rates, and
-
all resulting exchange differences are recognised in other comprehensive income
On consolidation, exchange differences arising from the translation of any net investment in foreign entities are recognised in other
comprehensive income. When a foreign operation is sold, the associated exchange differences are reclassified to profit or loss, as
part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the
foreign operation and translated at the closing rate.
Leases
The Group leases various properties, vehicles, and other equipment. Property contracts typically have a duration of 12 months to 3
years but may have extension and termination options, see note 15.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present
value of the following lease payments:
-
fixed payments (including in-substance fixed payments), less any lease incentives
-
variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement
date
-
amounts expected to be payable by the group under residual value guarantees
-
the exercise price of a purchase option if the group is reasonably certain to exercise that option, and
-
payments of penalties for terminating the lease, if the lease term reflects the group exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is
generally the case for leases in the Group, the incremental borrowing rate is used, being the rate that the individual lessee would
have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic
environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Group:
-
where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect changes
in financing conditions since third party financing was received
-
uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by the group, and
-
makes adjustments specific to the lease, e.g term, country, currency and security.
The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in
the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability
is reassessed and adjusted against the right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period
so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets are measured at cost comprising the following:
-
the amount of the initial measurement of lease liability
Contents of the notes to the consolidated financial statements
Note 1 Material accounting policy information
Page 25 of 88
-
any lease payments made at or before the commencement date less any lease incentives received
-
any initial direct costs, and
-
restoration costs.
Right-of-use assets are depreciated over the lease term on a straight-line basis.
Payments associated with short-term leases of property, vehicles and equipment and all leases of low-value assets are recognised
on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less without a
purchase option. Low-value assets comprise IT equipment and small items of office furniture.
Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and
non-lease components based on their relative stand-alone prices.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements
do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not
be used as security for borrowing purposes.
Derivatives and hedge accounting
Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and
subsequently remeasured at fair value over profit and loss. Derivatives are carried as financial assets, presented under other
receivables, when the fair value is positive and as financial liabilities, presented under other payables, when the fair value is
negative.
At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship and the risk
management objective and strategy for undertaking the hedge.
Changes in the fair value of derivative financial instruments designated as cash flow hedges are recognised in other comprehensive
income and presented under “Reserve for cash flow hedges” (equity). Where the expected future transactions results in the
acquisition of non-financial assets, any amounts deferred under equity are transferred from equity to the cost of the asset. Where
an expected future transaction results in income or expense, any amounts deferred under equity are transferred from equity to the
income statement in the same item as the hedged transaction as a reclassification adjustment.
The amount included in the hedging reserve is the lower of, in absolute amounts, of the cumulative fair value adjustment of the
hedging instrument and the hedged item. Ineffectiveness is recognised in the income statement.
Income statement
Revenue
The Group produces and sells a wide range of egg and egg-related products in the wholesale market.
The Group enters into various framework agreements with customers, which lay the groundwork for future product purchases.
Each product order represents a single performance obligation. The Group's customer contracts may include various forms of
variable consideration, such as retrospective volume discounts based on the quantity of products sold to a specific customer over a
12-month period. These volume discounts are estimated, and a liability is recognised for the expected amount to be paid to the
customer. Sources of variable consideration are accounted for as a reduction in the transaction price, and thus reduces the revenue
being recognised.
Revenue from each order is recognised when control has transferred to the customer, which is upon delivery of the goods. No
significant element of financing is deemed present as the sales are made with an average credit term of approximately 30 days.
Contents of the notes to the consolidated financial statements
Note 1 Material accounting policy information
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Production costs
Production costs includes the costs incurred to achieve the year's revenue. The cost price comprises raw materials, auxiliary
materials, direct wages, indirect production costs, such as maintenance and depreciation etc. as well as operation, administration
and management of factories. Depreciation of goodwill is also recognised under production costs to the extent that goodwill relates
to the production activity. In addition, changes in fair value of the biological assets is recognised in production costs.
Distribution costs
Distribution costs comprises direct costs fowages for sales and distribution staff, advertising and marketing costs, transportation
costs and depreciation, etc. Depreciation of goodwill is also included to the extent that goodwill relates to the distribution activity.
Administration expenses
Administrative costs comprises costs for the management, the administrative staff, office costs, depreciation etc. Depreciation of
goodwill is also included in the share relating to the administration activity.
Other operating income and expenses
Other operating income and other operating costs comprise accounting items of a secondary nature in relation to the Group's main
activity, including profit and loss on the sale of intangible and tangible assets.
Financial income and expenses
Financial income and expenses (net financial items) include interest income and expenses calculated in accordance with the
effective interest method, exchange rate adjustments, amortisation of mortgage loans as well as supplements and reimbursements
under the advance tax scheme.
Financial income and expenses are recognised in the income statement at the amounts relating to the financial year.
Income tax
The income tax expense or credit for the period is the tax payable on the current period’s taxable income, based on the applicable
income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences
and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting
period in the countries where the company and its subsidiaries and associates operate and generate taxable income. Management
periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to
interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Group
measures its tax balances either based on the most likely amount or the expected value, depending on which method provides a
better prediction of the resolution of the uncertainty.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not
recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects
neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted
or substantively enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is
realised or the deferred income tax liability is settled.
Contents of the notes to the consolidated financial statements
Note 1 Material accounting policy information
Page 27 of 88
Deferred tax assets and liabilities
Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary
differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of
investments in foreign operations where the company is able to control the timing of the reversal of the temporary differences and
it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and
where the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the
entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability
simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in
equity, respectively.
Balance sheet
Goodwill
Goodwill on acquisitions of subsidiaries is measured as described under business combinations. Goodwill is not amortised but it is
tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is
carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of
goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-
generating units or groups of cash-generating units that are expected to benefit from the business combination in which the
goodwill arose. The units or groups of units are identified at the lowest level at which goodwill is monitored for internal
management purposes.
Development projects
Costs associated with research are recognised as an expense as incurred. Development costs that are directly attributable to the
design and testing of identifiable and unique software products controlled by the group are recognised as intangible assets where
the following criteria are met:
-
it is technically feasible to complete the software so that it will be available for use
-
management intends to complete the software and use or sell it
-
there is an ability to use or sell the software
-
it can be demonstrated how the software will generate probable future economic benefits
-
adequate technical, financial and other resources to complete the development and to use or sell the software are available, and
-
the expenditure attributable to the software during its development can be reliably measured.
Directly attributable costs that are capitalised as part of a development project include employee costs and an appropriate portion
of relevant overheads.
Capitalised development costs are amortised from the point at which the asset is ready for use.
Contents of the notes to the consolidated financial statements
Note 1 Material accounting policy information
Page 28 of 88
Machinery
Acquired trademarks and other rights
Separately acquired trademarks and other rights are shown at historical cost. Trademarks and other rights acquired in a business
combination are recognised at fair value at the acquisition date. They have a finite useful life and are subsequently carried at cost
less accumulated amortisation and impairment losses.
Amortisation methods and useful lives
The Group amortises intangible assets with a limited useful life, using the straight-line method over the following periods:
Completed development projects
Acquired trademarks and other rights
3 - 5 years
10 years
Goodwill Not amortised
Property, plant and equipment
Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
Depreciation methods and useful lives
Depreciation is calculated using the straight-line method to allocate the cost of the assets, net of their residual values, over their
estimated useful lives as follows:
Land and buildings
Production assets and machinery
10 - 25 years
6 - 10 years
Other fixtures, fittings and equipment 3 - 6 years
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs
and maintenance are charged to profit or loss during the reporting period in which they are incurred.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its
estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss.
Biological assets
Biological assets are measured on initial recognition and at the end of each reporting period at fair value less costs to sell. Changes
in fair value of the Group's hens are recognised in profit or loss as part of production costs. Costs related to harvesting the eggs are
expensed as incurred.
Fair value of the biological assets decreases linearily over its estimated useful life due to a decrease in remaining egg production.
The estimated useful life of the biological assets are 95 weeks. At the time of harvest, eggs are measured at fair value less costs to
sell and transferred to inventories.
Methods used to measure fair value less costs to sell are provided in note 20. Key assumptions used to determine
the fair value of biological assets and sensitivity analysis are provided in note 12.
Contents of the notes to the consolidated financial statements
Note 1 Material accounting policy information
Page 29 of 88
Financial assets
Financial assets comprises ownership shares in trading associations, which are valued at cost price.
Impairment of assets
Goodwill and development projects in progress are not subject to amortisation and are tested annually for impairment, or more
frequently if events or changes in circumstances indicate that they might be impaired. Other non-current assets are tested for
impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely
independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than
goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
Inventories
Inventories are measured at the lower of cost and net realisable value under the FIFO method. The net realisable value of
inventories is calculated at the amount expected to be generated by sale of the inventories in the process of normal operations with
deduction of selling expenses.
The net realisable value is determined allowing for marketability, obsolescence and development in expected selling price. The cost
of goods for resale equals landed cost. The cost of finished goods and work in progress comprises the cost of raw materials,
consumables and direct labour.
Trade receivables
Trade receivables are recognised initially at the amount of consideration that is unconditional, unless they contain significant
financing components when they are recognised at fair value. They are subsequently measured at amortised cost less loss
allowance. The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected
loss.
Other receivables
Other receivables consist of accrual accounting, deposits, other accounts receivable and hedging instruments.
Prepayments
Prepayments consist of prepaid expenses concerning rent, insurance premiums, subscriptions and interest.
Financial liabilities
Trade and other payables
These amounts represent liabilities for goods and services provided to the group prior to the end of the financial year which are
unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as
current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their fair
value and subsequently measured at amortised cost using the effective interest method.
Contents of the notes to the consolidated financial statements
Note 1 Material accounting policy information
Page 30 of 88
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at
amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit
or loss over the period of the borrowings using the effective interest method.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that
some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no
evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity
services and amortised over the period of the facility to which it relates.
Equity reserves
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a
deductions, net of tax, from the proceeds.
Foreign currency translation reserve
Exchange differences arising on translation of the parent company and of foreign controlled entities into DKK, are recognised in
other comprehensive income and accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit
or loss when the net investment is disposed of.
Reserve for cash flow hedges
Reserve for cash flow hedges comprises accumulated changes in the fair value of derivative financial instruments that qualify for
hedging of future cash flows, where the hedged position has not yet been realised. The changes in fair value are transferred either
to the income statement when the hedged positions are realised.or to the cost price of a non-financial assets, if this is the hedged
item.
Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the
Group, on or before the end of the reporting period, but not distributed at the end of the reporting period.
Statement of cash flows
The cash flow statement shows the Group's cash flows for the year broken down by operating, investing and financing
activities, changes for the year in cash and cash equivalents as well as the Group's cash and cash equivalents at the
beginning and end of the year.
Cash flows from operating activities are calculated as the net profit/loss for the year adjusted for changes in working capital and
non-cash operating items such as depreciation, amortisation and impairment losses. Working capital comprises current assets less
short-term debt, excluding items included in cash and cash equivalents.
Cash flows from investing activities comprise cash flows from acquisitions and disposals of intangible assets, property, plant and
equipment as well as fixed asset investments.
Cash flows from financing activities comprise cash flows from the raising and repayment of long-term debt and principal element
on lease payments as well as payments to and from shareholders.
Contents of the notes to the consolidated financial statements
Note 1 Material accounting policy information
Page 31 of 88
Cash and cash equivalents
Cash and cash equivalents comprises cash and bank balances.
Key figures
The financial ratios have been calculated in accordance with the recommendations of the Association of Danish Financial Analysts.
Gross margin
Operating margin
Gross margin x 100 / revenue
Operating profit x 100 / revenue
Return on assets Operating profit x 100 / total assets ultimo
Equity ratio Equity ultimo x 100 / total assets ultimo
Return on equity Net profit (loss) x 100 / average equity
Gearing ratio Net interest-bearing debt / EBITDA
Net interest bearing debt (NIBD) Net interest-bearing debt minus cash
Net working capital (NWC) Inventory + trade receivables - trade and other payables
Contents of the notes to the consolidated financial statements
Note 2 Critical estimates, judgements and errors
Page 32 of 88
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual
results. Management also needs to exercise judgement in applying the group’s accounting policies.
This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more
likely to be materially adjusted due to estimates and assumptions turning out to be wrong. Detailed information about each of
these estimates and judgements is included in other notes together with information about the basis of calculation for each affected
line item in the financial statements. In addition, this note also explains where there have been actual adjustments this year as a
result of an error and of changes to previous estimates.
This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more
likely to be materially adjusted due to estimates and assumptions turning out to be wrong. Detailed information about each of
these estimates and judgements is included in other notes together with information about the basis of calculation for each affected
line item in the financial statements. In addition, this note also explains where there have been actual adjustments this year as a
result of an error and of changes to previous estimates.
Significant judgements
Biological assets
Method for valuation of poultry
The fair value of poultry is determined by reference to market prices for poultry for that local area adjusted for obsolescence.
Significant judgements include applying a cost approach, often referred to as current replacement cost, as a fair value model
because this incorporates the specific location and genetics for the poultry, and in the management's view, is the most appropriate
valuation model for estimating the fair value. Another approach would be to use a discounted cash flow model, which would
estimate an entity-specific fair value. This approach, however, would not give a fair value of the biological assets relative to the
market due to a significant amount of entity inputs.
Key assumptions to determine fair value of the biological assets and sensitivity analysis are provided in note 12.
Critical estimates
Impairment of non-financial assets
Goodwill
Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher
of its fair value less costs of disposal and its value in use. The value in use calculation is based on a DCF model. The cash flows are
derived from the budget for the next five years and do not include restructuring activities that the Group is not yet committed to or
significant future investments that will enhance the performance of the assets of the CGU being tested. The recoverable amount is
sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for
extrapolation purposes. These estimates are most relevant to goodwill recognised by the Group. The key assumptions used to
determine the recoverable amount for the different CGUs are disclosed and further explained in note 16.
Contents of the notes to the consolidated financial statements
Note 3 Revenue from contracts with customers
Page 33 of 88
Disaggregation of revenue from contracts with customers
The Group derives revenue from the transfer of goods at a point in time in the following geographical regions and from the
following product categories:
2023
In thousands DKK
Denmark
Finland
Sweden
Other
Total
Shell eggs
414.617
215.316
267.834
71.930
969.697
Processed products
192.796 165.762 399.298 355.445
1.113.301
607.413 381.078 667.132 427.375
2.082.998
2022
In thousands DKK Denmark Finland
Sweden Other
Total
Shell eggs
355.355
212.602
418.053
101.284
1.087.294
Processed products
148.049 127.418 201.839 314.503
791.809
503.404 340.020 619.892 415.787 1.879.103
Revenues from external customers come from the sale of goods on a wholesale basis.
Contents of the notes to the consolidated financial statements
Note 4 Other income and expense items
Page 34 of 88
In thousands DKK 2023 2022
Other income and expenses
Change in contingent consideration related to business combination
10.486 22.606
Other income
92 184
Other expenses
Change in contingent consideration related to business combination is specified in note 17.
-31 -15
10.547 22.775
Contents of the notes to the consolidated financial statements
Note 5 Staff costs
Page 35 of 88
In thousands DKK 2023 2022
Wages and salaries
152.837
142.907
Pension cost, defined contribution plans
16.033 15.698
Other social security costs
15.117 13.675
Other staff costs
8.394 8.403
192.381 180.683
Average number of employees
Key management personnel compensation
Key management personnel consists of the Executive Board and the Board of Directors. The compensation paid or payables to key
management personnel for employee services is shown below:
In thousands DKK
Executive
Board
Board of
Directors
Total
2023
Wages and salaries
9.725 1.460 11.185
Other social security costs
1.650
- 1.650
11.375 1.460 12.835
In thousands DKK
Executive
Board
Board of
Directors
Total
2022
Wages and salaries
7.948 1.337 9.285
Other social security costs
1.068
- 1.068
9.016 1.337 10.353
Contents of the notes to the consolidated financial statements
Note 6 Depreciation, amortisation and impairment
Page 36 of 88
In thousands DKK 2023 2022
Depreciation and amortisation
Depreciation of property, plant and equipment
36.580 38.039
Depreciation of right-of-use assets
2.902 2.448
Amortisation of intangible assets
5.268 4.994
44.750 45.481
Impairment
Impairment of intangible assets
6.000 29.460
6.000 29.460
Total depreciation, amortisation and impairment
50.750 74.941
Contents of the notes to the consolidated financial statements
Note 7 Financial income and expenses
Page 37 of 88
In thousands DKK 2023 2022
Financial income
Interest income from bank and customers
4.596 162
Foreign exchange rate gains
-
945
Total financial income
4.596
1.107
Financial expenses
Interest expenses on borrowings
-17.321 -8.065
Interest expenses on lease liabilities
-148 -67
Foreign exchange rate losses
-274
-
Total financial expenses
-17.743
-8.132
Net finance costs
-13.147
-7.025
Contents of the notes to the consolidated financial statements
Note 8 Income tax expense
Page 38 of 88
In thousands DKK 2023 2022
Current tax
Current tax on profits for the year
-15.255 -3.303
Adjustments for current tax of prior periods 27 44
Deferred income tax
-4.706 -2.508
Income tax expense
-19.934 -5.767
In thousands DKK 2023 2022
Reconcilliation of effective tax rate
Calculated tax at the Danish tax rate of 22% (2022: 22%)
22.591 7.377
Less tax in foreign operations in relation to the Danish tax
rate of 22% rate (2022: 22%)
-792 -360
Tax effects of amounts which are not deductible (taxable) in
calculating taxable income:
Other non-deductible expenses
-1.838 -1.206
Adjustments for current tax of prior periods
-27
-44
Income tax expense at the effective tax rate of 19,4%
(2022: 17,3%)
19.934
5.767
Contents of the notes to the consolidated financial statements
Note 9 Deferred tax
Page 39 of 88
In thousands DKK 2023 2022
Deferred tax at 1 January
7.317
5.567
Deferred tax recognised in the statement of profit or loss
4.744 2.465
Exchange adjustment
-74 -715
Deferred tax at 31 December
11.987 7.317
Deferred tax relates to:
Intangible assets
841 2.104
Property, plant and equipment
-8.047 -7.410
Right-of-use assets
-66 -44
Inventories
284 -135
Tax losses carried forward
-685 -685
Other
19.660
13.487
Deferred tax asset, recognised
11.987
7.317
Of which presented as deferred tax assets
7.646 6.122
Of which presented as deferred tax liabilities
19.633
13.439
Deferred tax at 31 December
11.987
7.317
In line with the requirements in IAS 12, the deferred tax assets and liabilities are offset as they have a legal right to set off and
relate to income tax with the same taxation authority.
The recogonised tax assets that relates to tax losses carried forward, which is the result of previous years taxable income
ascertained in 2018. In connection with the assessment of the utilisation of the tax assets, special emphasis has been placed on that
the most significant tax loss carry forward are in markets, where the Group now is well established and these operations are
expected to generate positive results going forward.
Contents of the notes to the consolidated financial statements
Note 10 Intangible assets
Page 40 of 88
In thousands DKK
Goodwill
Completed
development
projects
Acquired
trademarks and
other rights
Total
Cost:
At 1 January 2022 242.181 24.766 6.817 273.764
Additions
- 1.019 - 1.019
Additions from business combinations
- - - -
Disposals
- -1.461 - -1.461
Transfers
- - - -
Exchange differences
-57
- - -57
At 31 December 2022 242.124 24.324 6.817 273.265
Accumulated depreciation and impairment:
At 1 January 2022 - -9.699 - -9.699
Amortisation charge
- -2.791 -744 -3.535
Impairment
-29.460 - - -29.460
Exchange differences
57
- - 57
At 31 December 2022
Carrying amount 31 December 2022
-29.403 -12.490 -744 -42.637
-
212.721 11.834 6.073 230.628
Cost:
At 1 January 2023 242.124 24.324 6.817 273.265
Additions
- 2.191 - 2.191
Additions from business combinations
6.355 - 1.919 8.274
Disposals
- -4.898 - -4.898
Transfers
- - - -
Exchange differences
At 31 December 2023
3 18 - 21
248.482 21.635 8.736 278.853
Accumulated depreciation an
d
impairment:
At 1 January 2023 -29.403 -12.490 -744 -42.637
Amortisation charge
- 421 -823 -402
Impairment
-6.000 - - -6.000
Exchange differences
-2
-4 - -6
At 31 December 2023
Carrying amount 31 December 2023
-35.405 -12.073 -1.567 -49.045
213.077 9.562 7.169 229.808
Contents of the notes to the consolidated financial statements
Note 10 Intangible assets
Page 41 of 88
Impairment charge
The carrying amount of the Finland CGU has been reduced to its recoverable amount through recognition of an impairment loss
against goodwill. This loss is included in administrative costs in the statement of profit or loss. The impairment charge was
primarily due to effects from higher energy prices and freight, feed prices and consumer changes due to inflation in both the
Finnish market and the egg market in general, which has a negative impact on the performance in 2022.
The carrying amount of the Denmark CGU has been reduced to its recoverable amount through recognition of an impairment loss
against goodwill. This loss is included in administrative expenses in the statement of profit or loss. The impairment charge was
due to decreasing sales and the subsequent out-phasing of cage eggs.
See note 16 for specifications on the impairment tests of goodwill.
Development projects
Development projects comprises the cost directly related to the development of the software in Group.
Acquired trademarks and other rights
Acquired trademarks and other rights are related to the subsidaries aquired in 2021 and 2023. The trademarks are mostly related
to the name and logo, which are valuable to consumers, hence a part of the purchase value have been allocated to the trademarks
and is subsequently amortised according to the accounting policies in note 1.
Contents of the notes to the consolidated financial statements
Note 11 Property, plant and equipment
Page 42 of 88
Dis
p
osals
In thousands DKK
Land and
buildings
Plant and
machinery
Other fixtures,
fittings and
equipment
Total
Cost:
At 1 January 2022 280.466 449.912 40.850 771.228
Adjustment relating to prior years
- - 321 321
Additions
26.111 24.746 2.737 53.594
Additions from business combinations
- - - -
Transfers
-5 111 -105 1
Disposals
-5 -187 -1.501 -1.693
Exchange differences
-2.741 -14.099 -984 -17.824
At 31 December 2022
303.826 460.483 41.318 805.627
Accumulated depreciation and impairment:
At 1 January 2022 -137.402 -288.530 -28.325 -454.257
Adjustment relating to prior years
- - -34 -34
Depreciation charge
-8.828 -26.663 -1.500 -36.991
Impairment
- - - -
Exchange differences
2.010 10.282 901 13.193
At 31 December 2022 -144.220 -304.911 -28.958 -478.089
Carrying amount 31 December 2022
159.606
155.572
12.360
327.538
Cost:
At 1 January 2023 303.826 460.683 41.318 805.827
Additions
21.966 41.606 4.392 67.964
Additions from business combinations
- - - -
Transfers
- - - -
Disposals
- -7.875 -890 -8.765
Exchange differences
427 1.103 56 1.586
At 31 December 2023
326.219 495.517 44.876 866.612
Accumulated depreciation and impairment:
At 1 January 2023 -144.220 -304.911 -28.958 -478.089
Depreciation charge
-9.522 -17.470 -2.499 -29.491
Impairment
- - - -
Exchange differences
-168 -748 -51 -967
At 31 December 2023
-153.910 -323.129 -31.508 -508.547
Carrying amount 31 December 2023
172.309
172.388
13.368
358.065
Contents of the notes to the consolidated financial statements
Note 12 Biological assets
Page 43 of 88
I
n thousands DKK
V
ariance
Increase /
decrease in
fair value
Estimated fair value
2023
2022
In thousands DKK 2023 2022
Poultry
Carrying amount at 1 January 14.222 5.229
Increase due to purchases
8.192 16.676
Change in fair value due to price changes
-681 -871
Decrease due to obsolescence
Carrying amount at 31 December
-14.282 -6.812
7.451 14.222
The Group’s biological assets consist of poultry and is used as part of its normal operations as production of barn eggs. The Group's
poultry is located in Finland. The poultry is placed in henhouses when they are around 4 month old, after which they are involved
in egg production until the expected time of culling when they are around 20-23 month old. Yearly production is around 8.000
tons of egg.
Refer to note 1 to see how the Group accounts for biological assets. See note 18 for risk management strategies regarding biological
assets.
Valuation of biological assets
For poultry, market-based prices are not available in its present location and condition, hence fair value should be measured on the
basis of a valuation technique which is appropriate in the circumstances and for which sufficient data is available to measure fair
value.
The Group determines the fair value less costs to sell of its poulty using the depreciated replacement cost approach adjusted for
obsolescence, as this reflects the amount that would be required currently to replace the service capacity of the Group's poultry.
Obsoloscene in this case is the decreased production of eggs by poultry as they age and diseases etc.
The Group has classified its biological assets within level 3 of the fair value hierachy, being that the transaction prices used in the
depreciated replacement cost approach is not observable in active markets.
Valuation inputs and the relationship to the fair value is, as a consequence of the depreciated replacement cost approach, based on
transaction prices, which means that the higher the market price of the poultry, the higher the fair value.
Sensitivity analysis of significant unobservable inputs
Poultry market price
5,00% 373 7.824 14.933
Valuation process
The Group has a team within the External Reporting department that performs the valuation of biological assets. When
considering the appropriate market prices for poultry to use, the team reviews available information such as the latest transaction
prices. The valuation policies and procedures, as well as changes in the fair value measurements are reviewed by the chief financial
officer (CFO) annually. The CFO is responsible for the Group’s valuation team.
Contents of the notes to the consolidated financial statements
Note 13 Inventories
Page 44 out of 88
The Group's inventories comprise the following:
In thousands DKK 2023 2022
Amounts recognised in the balance sheet
Raw materials and stores
49.563 46.243
Finished goods
95.336
144.899
76.916
123.159
There have been no write downs on inventory in 2023 or 2022.
Amounts recognised in profit or loss
Inventories recognised as an expense during the year ended 31 December 2023 amounted to 1.606 mDKK (2022: 1.494 mDKK).
Contents of the notes to the consolidated financial statements
Note 14
Trade receivables
Page 45 out of 88
In thousands DKK 2023 2022
In thousands DKK 2023 2022
Trade receivables from contracts
135.941
152.951
Loss allowance
-270
-225
135.671
152.726
Classification as trade receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business.
They are generally due for settlement within 30 days and are therefore all classified as current. Trade receivables are recognised
initially at the amount of consideration that is unconditional, unless they contain significant financing components, when they
are recognised at fair value. The Group holds the trade receivables with the objective of collecting the contractual cash flows and
therefore measures them subsequently at amortised cost using the effective interest method.
For further information on the loss allowance provision, see note 17.
Transferred receivables
The carrying amounts of the trade receivables include receivables which are subject to a factoring arrangement. Under this
arrangement, the Group has transferred the relevant receivables to the factor in exchange for cash and is prevented from selling
or pledging the receivables. However, the Group has retained late payment and credit risk, and therefore continues to recognise
the transferred assets in their entirety in its balance sheet.
Carrying amount of transferred trade receivables
8.831 17.924
Management considers that in substance the factor collects the amounts receivable on the Group's behalf and retains the cash in
settlement of the separate financing transaction. The Group therefore presents the cash inflows received from the bank as
financing cash inflows and the subsequent payments by the debtor as both operating cash inflows and financing cash outflows.
Fair value of trade receivables
Due to the short-term nature of the current receivables, the carrying amount is considered to be the same as the fair value.
Offsetting arrangements
The Group gives volume-based rebates to selected wholesalers. Under the terms of the supply agreements, the amounts payable
by the Group are offset against receivables from the wholesalers and only the net amounts are settled. The relevant amounts
have therefore been presented net in the statement of financial position. The offsetting arrangements amounts to DKK 35.604
thousands in 2023 (2022: DKK 26.976 thousands). If presented gross, the recognised trade receivables would have been DKK
171.275 thousands in 2023 (2022: DKK 179.702 thousands) and the recognised trade payables would have been DKK 165.669
thousands in 2023 (2022: DKK 161.125 thousands).
Contents of the notes to the consolidated financial statements
Note 15 Leases
Page 46 of 88
Equipment
In thousands DKK 2023 2022
Amounts recognised in the balance sheet
The balance sheet shows the following amounts relating to leases:
Right-of-use assets
Properties
476 -
Vehicles
3.410 2.686
Other equipment
2.014 2.091
5.900 4.777
Lease liabilities
Current
2.931 2.240
Non-current
3.264 2.737
6.195 4.977
Additions to the right-of-use assets
4.214 1.667
Amounts recognised in the statement of profit or loss
The statement of profit or loss shows the following amounts relating to leases:
Depreciation charge of right-of-use assets
Properties
187 -
Vehicles
1.897 1.751
Other equipment
818
697
2.902
2.448
Interest expense on lease liabilities
-148
-67
Expense relating to short-term leases
303 223
Expense relating to leases of low-value assets
18
11
Total cash outlow for leases
3.077
2.397
Extension and termination options
Property leasing covers on single property located in Färgelanda, Sweden. The contract commenced on 1 March 2016 and was
initially set to expire on 28 February 2020. However, the contract automatically extends for one year if neither the lessor nor
Danæg gives notice of termination to the other party. This notice must be given at least nine months before the contract's
expiration.
Car leases generally have a lease period of three to five years, with no extension or termination options included in the contracts.
Leases for machinery and other equipment generally have a lease period of three to five years, with no extension or termination
options included in the contracts.
Contents of the notes to the consolidated financial statements
Note 16 Impairment tests
Page 47 of 88
2023
I
n thousands
D
KK
Denmark Finland
Sweden
Total
Impairment tests for goodwill
Goodwill is allocated to the following operating segments for the purpose of impairment testing goodwill acquired through
business combinations. The carrying amount of goodwill amounts to DKK 213.077 thousands (2022: DKK 213.721 thousands) and
relates to the acquisitions of Munax Oy and Torggummans Ägg AB. The Group tests whether goodwill has suffered any impairment
on an annual basis. For the 2023 and 2022 reporting periods, the recoverable amount of the CGU's was determined based on value
in use calculations which require the use of assumptions.
Goodwill
- 206.721 6.356 213.077
Goodwill
6.000 206.721 - 212.721
Description of impaired CGU
Denmark
CGU's in the Group are based on entity level. The CGU in Denmark produces eggs and egg related products and was impaired due
to a decrease and subsequent out-phasing of the sale of cage eggs.
Finland
The impaired CGU in 2022 in Finland is an entity, which produces eggs and egg related products similar to the rest of the Group.
For additional information on the impairment, see note 10.
Key assumptions used for value in use calculations
The Group tests whether goodwill has suffered any impairment on an annual basis. For the 2023 and 2022 reporting periods, the
recoverable amount of the CGU's was determined based on value in use calculations which require the use of assumptions.
The calculations use cash flow projections based on financial budgets approved by management covering a five-year period. Cash
flows beyond the five-year period are extrapolated using the estimated growth rates stated below. These growth rates are
consistent with the average growth rates in the economy.
The following table sets out the key assumptions for the goodwill:
2023
Key assumptions
Denmark
Finland
Sweden
Long-term growth rate for terminal period:
1,5%
1,5%
1,5%
Pre-tax discount rate:
11,3% 11,3% 11,3%
Budgeted annual revenue growth rate:
2,0% 3,3% 4,3%
Budgeted EBIT margin
7.3% 8,6% 4,6%
Annual capital expenditure (DKK thousands)
4 1.717 3.128
2022
I
n thousands DKK
Denmark Finland
Sweden
Total
Contents of the notes to the consolidated financial statements
Note 16 Impairment tests
Page 48 of 88
2022
Key assumptions
Denmark
Finland
Sweden
Long-term growth rate for terminal period:
1,5%
1,5%
-
Pre-tax discount rate:
10,0% 11,4%
-
Average budgeted annual revenue growth rate:
- 4,1%
-
Budgeted EBIT margin
9,4% 8,0%
-
Annual capital expenditure (DKK thousands)
- 2.620 -
Management has determined the values assigned to each of the above key assumptions as follows:
• Long-term growth rate for terminal period: This is the weighted average growth rate used to extrapolate cash flows beyond the
budget period. The rates are consistent with forecasts in the economy.
• Pre-tax discount rate: Reflect specific risks relating to the relevant segments and the countries in which they operate.
• Budgeted annual revenue growth rate: Average annual growth rate over the five-year forecast period; based on current industry
trends and including long-term inflation forecasts for the respective countries.
• Budgeted EBIT margin: Based on past performance and management’s expectations for the future.
• Annual capital expenditure: This is based on the historical experience of management, and the planned expenditures.
Contents of the notes to the consolidated financial statements
Note 17 Financial assets and financial liabilities
Page 49 of 88
In thousands DKK 2023 2022
The Group holds the following financial instruments:
Financial assets
Derivatives not designated as hedging instruments
Foreign exchange forward contracts
44 5
Total financial assets at fair value
44 5
Financial assets at amortised cost
Trade receivables
Other receivables
Cash and cash equivalents
135.671 152.726
4.367 11.977
305 305
140.343 165.008
Derivatives not designated as hedging instruments reflect the positive change in fair value of those foreign exchange forward
contracts that are not designated in hedge relationships, but are, nevertheless, intended to reduce the level of foreign currency risk
for expected sales and purchases
Financial liabilities
Derivatives not designated as hedging instruments
Foreign exchange forward contracts
Derivatives designated as hedging instruments
Interest rate swaps
147 1
- 110
Financial liabilities at fair value through profit or loss
Contingent consideration
Total financial liabilites at fair value
65.993 76.380
66.140 76.491
Liabilities at amortised cost
Trade payables
Other liabilities
Borrowings
Lease liabilities
130.065 134.149
96.627 66.976
264.463 358.294
6.195 4.977
497.349 564.396
Trade payables are unsecured and are usually paid within 30 days of recognition. Where trade payables are settled via electronic
cash transfer, they are derecognised when the Group has no ability to withdraw, stop or cancel the payment, has lost the practical
ability to access the cash as a result of the electronic payment instruction, and the risk of a settlement not occurring is insignificant.
The carrying amounts of trade and other payables are considered to be the same as their fair values, due to their short-term nature.
Derivatives not designated as hedging instruments reflect the negative change in fair value of those foreign exchange forward
contracts that are not designated in hedge relationships, but are, nevertheless, intended to reduce the level of foreign currency risk
for expected sales and purchases.
Contents of the notes to the consolidated financial statements
Note 17 Financial assets and financial liabilities
Page 50 of 88
I
n thousands DKK
2023
Current Non-current
Total
2022
Current Non-current
Total
Derivatives designated as hedging instruments reflect the negative change in fair value of interest rate swaps, designated as cash
flow hedges to hedge interest rate risk.
Contingent consideration is in relation to acquisition of a subsidiary in 2021, where part of the total purchase value is based on an
earn-out agreement. This earn-out agreement is payable in the financial years 2022, 2023 and 2027 and is contingent on EBITDA
achieved by the subsidiary for the financial years above. The potential undiscounted amount payable under the agreement is DKK
53,8 millions. The fair value of the contingent consideration was estimated by calculating the present value of the future expected
cash flows discounted by the incremental borrowing rate of Finnish unsecured debt instruments, without adjustment of any
interest supplement but assumed probability-adjusted sales. It is assessed that the earn-out agreement payable in the financial year
2027 is highly probable, hence the recognised amount is close to the expected cash payment.
Borrowings
Mortgage loans
11.666 109.964 121.630 15.129 127.870 142.999
Bank loans
33.131 109.702 142.833 62.603 152.692 215.295
44.797 219.666 264.463 77.732 280.562 358.294
For the borrowings, the fair values are not materially different from their carrying amounts, since the interest payable on those
borrowings is either close to current market rates or the borrowings are of a short-term nature. All financial instruments are
measured based on level 2 input. The fair values of non-current borrowings are based on discounted cash flows using a current
borrowing rate.
The borrowings for the Group are divided into mortgage and bank loans and covers plenty different loans. Part of them is
remunerated at fixed rate in the range of 0,90% to 1,55%. Their maturity period ends from beginning of 2024 until end of 2032.
The other part is remunerated at variable rate in the range of 5,25% to 8,24% and the maturity periode ends in 2029 and 2043.
The Group’s exposure to various risks associated with the derivative financial instruments are explained in note 18 and 19.
Contents of the notes to the consolidated financial statements
Note 18 Financial risk management
Page 51 of 88
In thousands DKK 2023 2022
The Group’s principal financial liabilities, other than derivatives, primarily comprise mortgage loans, bank loans, and trade and
other payables. The main purpose of these financial liabilities is to finance the Group’s operations. The Group’s principal financial
assets include trade receivables, and cash and cash equivalents. The Group also enters into derivative transactions.
The Group is exposed to market risk, credit risk and liquidity risk. The Group’s management oversees the management of these
risks. The Group’s management is supported by the Board of Directors that advises on financial risks and the appropriate financial
risk governance framework for the Group. The Board of Directors provides assurance to the Group’s management that the Group’s
financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and
managed in accordance with the Group’s policies and risk objectives. The Board of Directors reviews and agrees policies for
managing each of these risks, which are summarised below.
Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
prices. Market risk for the Group comprises interest rate risk and currency risk. Financial instruments affected by market risk
include borrowings, trade receivables, trade payables and derivative financial instruments.
Interest rate risk
The Group’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Group to cash flow
interest rate risk. The Group continuously monitor interest rate trends and market conditons to anticipate potential changes and
regularly assess the impact of interest rate fluctuations on financial statements and adjust financial strategies accordingly.
Generally, the Group's policy was to enter into long-term borrowings at floating rates and swap them into fixed rates. Going
forward, the Group's policy will be to enter into long-term fixed rate borrowings to mange risks. For additional information on the
interest rate swaps, see note 19. During 2023 and 2022, the Group’s borrowings at variable rate were primarily denominated in
DKK and EUR.
A reasonably possible change in the market interest rate compared to the interest rates as of the end of the reporting period will
have the following hypothetical impact on profit after tax and equity:
Impact on post tax profit and equity
Interest rate - increase of 1% (2022 of 2%)
Interest rate - decrease of 1,5% (2022 of 0,5%)
-1.786 -4.472
2.679 1.118
The interest rate swap has been redeemed in 2023 and is no longer expected to occur going forward. The Group will instead use
loans with a fixed interest rate to reduce the interest rate risk.
Currency risk
The Group operates internationally and is exposed to foreign exchange risk, primarily Euro, SEK, GBP and the USD. Foreign
exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is
not the functional currency of the relevant Group entity. The Group uses foreign currency forwards to hedge its exposure to foreign
currency risk, see note 17.
The table below demonstrates the sensitivity to a reasonably possible change in USD, SEK and GBP exchange rate, with all other
variables held constant. The Group’s exposure to changes in EUR is not material due to DKK/EUR fixed rate policy.
Contents of the notes to the consolidated financial statements
Note 18 Financial risk management
Page 52 of 88
In thousands DKK 2023 2022
Impact on post tax profit and equity
Change in USD rate - increase of 5% (2022 of 4%)
-309 -616
Change in USD rate - decrease of 3% (2022 of 3%)
185 462
Change in SEK rate - increase of 4% (2022 of 4%)
-9.978 -8.134
Change in SEK rate - decrease of 3% (2022 of 3%)
7.483 6.101
Change in GBP rate - increase of 4% (2022 of 4%)
-275 -240
Change in GBP rate - decrease of 2% (2022 of 3%)
138 180
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to
a financial loss. Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as well as
credit exposures to wholesale customers, including outstanding receivables.
Credit risk is managed on a Group basis. For banks and financial institutions, the Group has established relationships with reliable
banks. Furthermore, the Group maintains adequate cash reserves and identifies risks while ensuring proper segregation of duties
where possible.
Trade receivables
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss
allowance for all trade receivables.
To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days
past due. On that basis, the loss allowance as at 31 December 2023 and 31 December 2022 was determined as follows for both trade
receivables.
In thousands DKK
Current
More than 30
days past due
More than 60
days past due
More than 120
days past due
Total
At 31 December 2023
Expected loss rate
0,01 0,00 0,20 0,50 -
Gross carrying amount - trade receivables
125.827 9.559 761 -206 135.941
Loss allowance
125
-
100 45 270
At 31 December 2022
Expected loss rate
0,01 0,10 0,25 0,00 -
Gross carrying amount - trade receivables
151.170 2.419 57 -695 152.951
Loss allowance
125 79 21 - 225
The loss allowances for trade receivables as at 31 December reconcile to the opening loss allowances as follows:
Contents of the notes to the consolidated financial statements
Note 18 Financial risk management
Page 53 of 88
Opening loss allowance
225 225
Reserved for loss allowance during the year
45 -
Receivables written off during the year as uncollectible
Closing loss allowance
- -
270 225
For some trade receivables the Group may obtain security in the form of credit insurance, which can be called upon if the
counterparty is in default under the terms of the agreement. The Group has insured approximately 70% of its trade receivables at a
large global insurance company, while the remaining uninsured 30% are trade receivables from counterparties with no historic
loss. Trade receivables and contract assets are written off where there is no reasonable expectation of recovery.
Impairment losses on trade receivables are presented as net impairment losses within operating profit. Subsequent recoveries of
amounts previously written off are credited against the same line item.
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount
of committed credit facilities to meet obligations when due. Due to the dynamic nature of the underlying businesses, the Group
maintains flexibility in funding by maintaining availability under committed credit lines. To obtain the flexibility in funding the
Group has selected to obtain short term overdraft facilities in different currencies to be able to meet obligations when due. The
bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice.
The Group’s policy is to secure adequate liquidity to always meet the planned future financial and operational payment obligations
for minimum of the next 12 months period. The Group has an adequate liquidity position allowing management to carry out the
planned strategy. The Group monitors the liquidity risk through follow up against plans and forecasting of cash flow.
Maturities of financial liabilities
The amounts disclosed in the following table are the contractual undiscounted cash flows. Balances due within 12 months equal
their carrying balances as the impact of discounting is not significant.
In thousands DKK
Total
Less than
More than contractual
Carrying
Contractual maturities of financial liabilities
1 year
1 - 5 years
5 years
cash flows
amount
At 31 December 2023
Trade payables
130.065 - - 130.065 130.065
Mortgage loans
13.224 66.120 65.702 145.046 121.630
Bank loans
38.181 108.909 786 147.876 142.833
Lease liabilities
2.931 3.264 - 6.195 6.195
Other liabilities
111.776 50.990 - 162.766 162.766
296.177 229.283 66.488 591.948 563.489
Trade receivables
I
n thousands DKK 2023 2022
Contents of the notes to the consolidated financial statements
Note 18 Financial risk management
Page 54 of 88
In thousands DKK
Total
Less than
More than contractual
Carrying
Contractual maturities of financial liabilities
1 year
1 - 5 years
5 years
cash flows
amount
At 31 December 2022
Trade payables
134.149 - - 134.149 134.149
Mortgage loans
15.875 75.272 64.115 155.262 142.999
Bank loans
73.151 142.000 8.009 223.160 215.295
Lease liabilities
2.240 2.737 - 4.977 4.977
Other liabilities
66.553 25.967 50.947 143.467 143.467
291.968 245.976 123.071 661.015 640.887
Financial risk management strategies for biological assets
The Group is exposed to risks arising from disease outbreak and financial risk in respect of the Group's biological assets. The Group
manages disease outbreak by segregating of poultry as well as significant testing of both poultry and eggs. The Group has strong
environmental policies and procedures in place to comply with environmental and other laws.
To reduce risk related to disease outbreak, the Group has insurance which ensures that the cost price of the poultry would be
claimed to the insurance company.
The Group is exposed to risks arising from fluctuations in the price of poultry, however the Group has long-term relationships with
poultry suppliers to ensure a stable supply. For price fluctuations, the Group follows analyses the market for the input of raising the
poultry, hence the Group has an overview of price fluctuations.
Contents of the notes to the consolidated financial statements
Note 19 Hedging
Page 55 of 88
The Group uses interest rate swap contracts to hedge and interest risk regarding highly probable future cash flows and designates
them as cash flow hedges subject to meeting the criteria for application of cash flow hedging.
The hedging ratios are determined as the notional value of the instrument divided by the notional value of the hedge item. The
Group seeks to establish hedge relationships with a hedging ratio of 1:1. Due to the nature of the hedge items risk, this will be
possible by either designating a proportion of the hedge instrument or the hedge notional value being equal or lower of the hedge
items notional value.
The table below shows the movement in the reserve for cash flow for hedging.
In thousands DKK 2023 2022
Fair value change of cash flow hedges
Cumulative fair value change at 1 January -110 -499
Fair value adjustment at year-end, net
- 389
Reclassified from OCI to profit or loss
110
-
Cumulative fair value change at 31 December - -110
Interest rate risk
The Group’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Group to cash flow
interest rate risk. Group policy has been to maintain some of its borrowings at fixed rate, using floating-to-fixed interest rate swaps
to achieve this when necessary. Going forward, the Group's policy will be to enter into long-term borrowings with fixed interest
rates instead of using interest rate swaps. The interest rate risk arising from the borrowings have been swapped from variable rate
to a fixed rate of 2.56% and 5.36% for borrowings with a notional amount of DKK 742 thousands and DKK 2,283 thousands
respectively. The Group's interest rate swaps was fulfilled in 2023.
The economic relationship is established as a match of criterial terms between the hedge item and hedge instrument. The Group
has assessed the following terms when entered into the hedge relationship:
•
Installments on the facilities
•
Payment date of interest and installment
•
Timing differency in the maturity of the hedge item and hedge instrument
The expected causes of hedging ineffectiveness relate to:
•
The credit value/debit value adjustment on the interest rate swaps which is not matched by the loan
•
Differences in critical terms between the interest rate swaps and loans.
Hedge ineffectiveness in relation to the interest rate swaps was negligible for 2023 and 2022.
Contents of the notes to the consolidated financial statements
Note 20 Fair values
Page 56 of 88
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are
recognised and measured at fair value in the financial statements. The Group has no financial instruments measured at fair value
based on level 1 input (quoted active market prices).
All financial instruments are measured based on level 2 input (input other than quoted prices that are observable either directly or
indirectly), except biological assets which are measured based on level 3 input. See note 12 for a specification on biological assets.
Derivative financial instruments
The fair value of currency and interest rate derivatives is determined based on generally accepted valuation methods using
available observable market data. Calculated fair values are verified against comparable external market quotes.
Biological assets
The Group has classified its biological assets within level 3 of the fair value hierachy, being that the transaction prices used in the
depreciated replacement cost approach is not observable in active markets.
Contingent consideration
The Group has classified its contingent consideration in relation to a previous business combination within level 3 of the fair value
hierachy, being that the liability is based on the present value of discounted cash flows - see note 17.
The following table provides the fair value measurement hierarchy of the Group’s assets and liabilities.
2023 Fair value hierarchy
In thousands DKK
Total
Level 1
Level 2
Level 3
Assets measured at fair value
Derivative financial instruments
Foreign exchange forward contracts
44
- 44 -
44 - 44 -
Other assets measured at fair value
Biological assets
7.451
- - 7.451
7.451 - - 7.451
Liabilities measured at fair value
Derivative financial instruments
Foreign exchange forward contracts
147 - 147 -
Interest rate swaps
-
- - -
147 - 147 -
Other liabilities measured at fair value
Contingent consideration
65.993
- - 65.993
65.993 - - 65.993
Contents of the notes to the consolidated financial statements
Note 20 Fair values
Page 57 of 88
2022 Fair value hierarchy
In thousands DKK
Total
Level 1
Level 2
Level 3
Assets measured at fair value
Derivative financial instruments
Foreign exchange forward contracts
5
- 5 -
5 - 5 -
Other assets measured at fair value
Biological assets
14.222
- - 14.222
14.222 - - 14.222
Liabilities measured at fair value
Derivative financial instruments
Foreign exchange forward contracts
1 - 1 -
Interest rate swaps
110
- 110 -
111 - 111 -
Other liabilities measured at fair value
Contingent consideration
76.380
- - 76.380
76.380 - - 76.380
There were no transfers between any levels during 2023 (2022: no transfers).
Contents of the notes to the consolidated financial statements
Note 21 Cash flow specifications
Page 58 of 88
In thousands DKK 2023 2022
Adjustments
Financial income
-4.596 -1.107
Financial expenses
17.743 8.132
Depreciation, amortisation and impairment charges
50.750 74.941
Income tax
19.934 5.767
Foreign currency translation
630 -5.529
Other adjustments
-9.013 -21.569
75.448 60.635
Changes in net working capital
Change in inventories
-21.740 -12.827
Change in trade receivables and prepayments
23.343 -33.996
Change in trade payables, other payables and contract liabilities
25.701 23.530
Change in cash flow hedges
-110 389
27.194 -22.905
Non-cash investing and financing activities
Non-cash activity
- -
Net debt reconciliation
This section sets out an analysis of net debt and the movements in net debt for each of the periods presented.
Liabilities from financing activities
In thousands DKK
Borrowings Leases Total
Net debt:
At 1 January 2022 -319.046 -5.631 -324.677
Cash flows
-39.250 2.397 -36.853
New leases
- -1.667 -1.667
Foreign exchange adjustments
- - -
Other changes
- -76 -76
At 31 December 2022 -358.296 -4.977 -363.273
Cash flows
93.831 3.077 96.909
New leases
- -4.214 -4.214
Foreign exchange adjustments - - -
Other changes
- -81 -81
At 31 December 2023 -264.464 -6.195 -270.659
Contents of the notes to the consolidated financial statements
Note 22 Share capital
Page 59 of 88
2023 2022
The share capital comprise:
Ordinary shares (fully paid)
400.000 40.000 400.000 40.000
No shares carry any special rights.
Total dividend paid out for the year
Total dividend proposed for the year
DKK per share
- 12,5
- -
2023 2022
N
ominal value in tDKK
Number o
f
shares
Nominal
value
Number o
f
shares
Nominal
value
Contents of the notes to the consolidated financial statements
Note 23 Capital management
Page 60 of 88
The Group’s objectives when managing capital are to:
- safeguard the ability to continue as a going concern and to continue to provide returns for shareholders and benefits for other
stakeholders, and
- maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce debt.
The Group monitors capital on the basis of the net debt to EBITDA ratio (leverage). As part of the acquisition of Munax Oy in
Finland in 2021, the Group has increased the net interest-bearing debt significantly, and with a long term settlement plan. The
leverage has been highly negative affected by the net debt increase, with a goal of significant improvements towards 2024, to a
level below 3,0. Furthermore the Group monitors the net debt to equity ratio (gearing).
In thousands DKK 2023 2022
Net interest-bearing debt
270
354
Equity
312 227
EBITDA
156 77
Ratios
Leverage (net debt / EBITDA)
1,7 4,6
Gearing (net debt / equity)
87% 156%
During 2023, the Group’s strategy was unchanged from 2022.
Loan covenants
Under the terms of the major borrowing facilities, no covenants exists.
The Group's goal is to reach and/or maintain the following levels on key figures no later than 2025:
• the leverage (NIBD/EBITDA) must be <2,0
• the gearing (NIBD/equity) must be <75%
• the equity ratio (equity/total assets) to be above 40%
Dividends
No dividend has been paid during 2023. The board has recommended payment of dividend in 2024 of 50,0 mDKK, which has been
appoved on an extraordinary general meeting in February 2024, from retained earnings at 31 December 2023 of 276,9 mDKK.
Contents of the notes to the consolidated financial statements
Note 24 Contingent liabilities, commitments and contingencies
Page 61 of 88
-
-
In thousands DKK 2023 2022
Assets pledged as security
The carrying amounts of assets pledged as security for borrowings are:
Collateral for mortgage institutions
The following assets are secured for the mortgage institution:
Land and buildings with a carrying amount of:
Collateral for bank loans
Unlisted shares in Munax Oy, tEUR
24.427 26.393
75 75
Contingent liabilities
For information on the contingent consideration in connection with the acquisition of Munax Oy, see note 17.
Capital commitments
Significant capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows:
An agreement has been made with a supplier on a minimum stock of packaging, which the Group has agreed to purchase. The
obligation can amount to a maximum of DKK 2,252 thousands.
For continued egg production, the Group has made an agreement with a supplier for the delivery of poultry. The obligation is
expected to amount to approximately of DKK 4,040 thousands.
The Group has made an agreement for the purchase of tangible assets under property, plant and equipment for an amount of DKK
790 thousands
The Group's companies are jointly and severally liable for tax on the Group's jointly taxed income, etc. The total amount of
corporation tax due is shown in the annual report for Vitfoss A/S, CVR-nr. 82 77 62 14, which is the management company in
relation to the joint taxation. The Group's companies are also jointly and severally liable for Danish withholding taxes in the form
of dividend tax, royalty tax and interest tax. Any subsequent corrections to corporation taxes and withholding taxes may result in
the company's liability amounting to a higher amount.
Contents of the notes to the consolidated financial statements
Page 62 of 88
In thousands DKK
Note 25 Business combinations
Summary of acquisition
On 31 July 2023, the Group acquired 100% of the voting shares in Torggummans Ägg AB, a Swedish egg packaging company based
in Färgelanda and originally founded in 1948. As part of the agreement with the former owners, the activities were transferred to a
newly founded company. The aquisition will only have a minor impact on the Group's revenue and share of the Swedish market.
Details of the purchase consideration, the net assets acquired and goodwill are as follows:
Purchase consideration
Cash paid
8.338
Net outflow of cash - investing activities
8.338
The assets and liabilities recognised as a result of the acquisition are as follows:
In thousands DKK
Fair value
Inventories
1.548
Intangible assets, trademarks
1.919
Plant and equipment
3.748
Other receivables and prepayments
134
Contract liabilities
-5.241
Other employment benefit obligations
-125
Net identifiable assets acquired
1.983
Goodwill arising from the acquisition
6.355
Net assets acquired
8.338
The goodwill is attributable to the knowhow of the workforce and synergies between the Group and the acquired. It will not be
deductible for tax purposes.
Revenue and profit contribution
The acquired business contributed revenues of 19,3 mDKK and net profit of 0,7 mDKK to the Group for the period from 31 July to
31 December. If the acquisition had occurred on 1 January 2023, consolidated pro-forma revenue and profit for the year ended 31
December 2023 would have been 2.129 mDKK and 84 mDKK respectively.
Acquisition-related costs
Transaction costs of DKK 50 thousands were expensed and are included in administrative expenses.
Contents of the notes to the consolidated financial statements
Page 63 of 88
Note 26 Related party transactions
The Group is controlled by the following entities:
Name of entity
Type
Place of business
Ownership interests
2023
2022
Dansk Landbrugs Grovvareselskab
Ultimate parent
A.M.B.A.
company and
controlling party
Fredericia
50%
50%
Danæg A.M.B.A Significant non-
controlling party
Christiansfeld
50% 50%
Vilofoss A/S Immediate parent
company
Fredericia
50% 50%
Dansk Landbrugs Grovvareselskab A.M.B.A. holds 100% of the issued ordinary shares of Vilofoss A/S. The Group is included in
the consolidated financial statements of Dansk Landbrugs Grovvareselskab A.M.B.A.
Information about remuneration to key management personnel has been disclosed in note 5.
Interests in subsidiaries are set out in note 28.
Transactions with related parties
The following table provides the total amount of transactions that have been entered into with related parties for the relevant
financial year.
In thousands DKK 2023 2022
The following transactions occurred with related parties:
Dansk Landbrugs Grovvareselskab A.M.B.A
Purchase of employee services from parent
499 473
Danæg A.M.B.A
Purchase of shell eggs
610.864 595.267
Terms and conditions of transactions with related parties
The purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding
balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or
received for any related party receivables or payables.
Contents of the notes to the consolidated financial statements
Note 27 Fee to auditors appointed at the general meeting
Page 64 of 88
In thousands DKK 2023 2022
PricewaterhouseCoopers
Audit fee
683 538
Other assurance services
- -
Tax advisory service
66 33
Other services
388 81
1.137 652
Contents of the notes to the consolidated financial statements
Note 28 Subsidiaries
Page 65 of 88
The Group’s principal subsidiaries at year end are set out below. Unless otherwise stated, they have share capital consisting solely
of ordinary shares that are held directly by the Group, and the proportion of ownership interests held equals the voting rights held
by the group. The country of incorporation or registration is also their principal place of business.
Ownership interests held by
the group
Name of entity
Place of business
2023 2022
DANÆG A/S
Christianfeld, Denmark
100%
100%
DANÆG Products A/S Roskilde, Denmark
100% 100%
Kronägg AB Perstorp, Sweden
100% 100%
Källbergs Industri AB Töreboda, Sweden
100% 100%
Munax Oy Laitila, Finland
100% 100%
Torggummans Ägg AB Färgelanda, Sweden
100% 100%
Contents of the notes to the consolidated financial statements
Note 29 Subsequent events
Page 66 of 88
After the balance sheet date, it has been decided to distribute dividens of 50.0 million DKK on an extraordinary general meeting.
No other circumstances have occurred that have a material impact on the assessment of the annual report.
Contents of the notes to the consolidated financial statements
Note 30 First time adoption of IFRS
Page 67 of 88
The financial statements for the year ended 31 December 2023 are the first that the Group has prepared in accordance with IFRS.
For periods up to and including the year ended 31 December 2022, the Group prepared its financial statements in accordance with
The Danish Financial Statements Act (’Danish GAAP’)
The Group has prepared financial statements that comply with IFRS applicable as at 31 December 2023, together with the
comparative period information for the year ended 31 December 2022.
In preparing these financial statements, the Group’s opening statement of financial position was prepared as at 1 January 2022
(date of transition to IFRS).
The disclosures required by IFRS 1 First-time Adoption of IFRS explaining the principal adjustments made by the Group in
restating Danish GAAP financial statements are provided below.
Except in respect of leases, as described below, there was no material impact on the cash flow statement in the adoption of IFRS.
Notes to the reconciliation from Danish GAAP to IFRS
Biological assets
The Group has adopted IAS 41 and has as a consequence recognised its poultry as biological assets, which are measured at fair
value. Under Danish GAAP, the biological assets were classified as prepayments and depreciated over the lifetime of the poultry. As
a result, the biological assets, which had a carrying amount of DKK 5.229 thousands at the transition date, have been reclassified
from current to non-current.
Leases
In accordance with the provisions in IFRS 1, the Group has adopted IFRS 16 Leases from the date of transition. With the adoption
of IFRS 16, the Group recognised lease liabilities in relation to leases which under Danish GAAP were classified as operating leases.
These liabilities were measured at the present value of the remaining lease liabilities as at the transition date using the incremental
borrowing rates of 1 January 2022. The weighted average incremental borrowing rate applied was 1,25% at the date of transition.
The associated right-of-use assets were measured at the amount equal to the lease liability, adjusted by the amount of any prepaid
or accrued lease payments.
In the cash flow statement, lease payments were under presented in cash flow from operating activities Danish GAAP. Under IFRS,
the principal element of lease payments are presented in cash flows from financing activities, whereas the interest element is
presented as cash flows from operating activities.
Contingent consideration
In accordance with the provisions in IFRS 1, the Group remeasured the contingent consideration in relation to a business
combination made before the transition date. The contingent consideration is remeasured at fair value and the resulting
adjustment is recognised directly in retained earnings at the date of transition.
Contents of the notes to the consolidated financial statements
Note 30 First time adoption of IFRS
Page 68 of 88
Exemptions applied
IFRS 1 allows first-time adopters certain exemptions from the retrospective application of certain requirements under IFRS. The
Group has applied the following exemptions:
- Leases: Lease liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s
incremental borrowing rate at 1 January 2022. Right-of-use assets were measured at the amount equal to the lease liabilities,
adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the statement of financial
position immediately before 1 January 2022. The lease payments associated with leases for which the lease term ends within 12
months of the date of transition to IFRS and leases for which the underlying asset is of low value have been recognised as an
expense on either a straight-line basis over the lease term or another systematic basis.
- The Group assessed all contracts existing at 1 January 2022 to determine whether a contract contains a lease based upon the
conditions in place as at 1 January 2022.
- IFRS 3 Business Combinations has not been applied to either acquisitions of subsidiaries that are considered businesses under
IFRS, or acquisitions of interests in associates and joint ventures that occurred before 1 January 2022. Use of this exemption means
that the Danish GAAP carrying amounts of assets and liabilities, that are required to be recognised under IFRS, are their deemed
cost at the date of the acquisition. After the date of the acquisition, measurement is in accordance with IFRS. Assets and liabilities
that do not qualify for recognition under IFRS are excluded from the opening IFRS statement of financial position. The Group did
not recognise any assets or liabilities that were not recognised under Danish GAAP or exclude any previously recognised amounts
as a result of IFRS recognition requirements.
- IFRS 1 also requires that the Danish GAAP carrying amount of goodwill must be used in the opening IFRS statement of financial
position (apart from adjustments for goodwill impairment and recognition or derecognition of intangible assets). In accordance
with IFRS 1, the Group has tested goodwill for impairment at the date of transition to IFRS. There was no impairment recognised
on goodwill at 1 January 2022.
Group reconciliation
In thousands DKK
As at 1 January 2022
Assets Liabilities Equity
For the year
ended 31
December
As at 31 December 2022
2022
Profit for the
year
Assets Liabilities Equity
According to the
Danish Financial
5.344 2.524 2.820 42 4.593 1.732 2.861
According to IFRS
843.812 618.202 225.610 14.302 884.827 657.535 227.292
Statements Act
838.468 615.678 222.790 14.260 880.234 655.803 224.431
IFRS adjustments
Biological assets
- - - 302 302 - 302
Leases
5.344 5.344 - -260 4.291 4.552 -261
Other payables
- -2.820 2.820
-
- -2.820 2.820
Annual Report 2023
DANÆG Holding A/S
Parent company
Management Report Danæg Holding A/S
Development during the year
Page 70 of 88
The Group's income statement for 2023 shows a profit of 71.1 million DKK (2022: 14.3 million DKK) and the Group's balance sheet
as of 31 December 2023 shows an equity of 297.4 million DKK (2022: 224.4 million DKK).
Uncertainty in recognition and measurement
There has been no uncertainty regarding recognition and milestones in the annual report.
Unusual circumstances
The company's assets, liabilities and financial position as of 31 December 2023 and the result of the company's activities and cash
flows for 2023 are not affected by unusual conditions.
Post-balance sheet event
After the balance sheet date, it has been decided to distribute dividends of 50.0 million DKK on an extraordinary general meeting.
No other circumstances have occurred that have a material impact on the assessment of the annual report.
Parent income statement
for the year ended 31 December 2023
Page 71 of 88
Revenue
Gross profit
46.069 38.112
46.069 38.112
Administrative expenses
1
-48.099 -42.772
Other operating income
2
10.486 22.606
Other operating expenses
2
-31 -15
Operating profit
8.425 17.931
Income from investments in subsidiaries
67.729 -2.972
Financial income
3
7.094 2.100
Financial expenses
3
-14.148 -4.288
Profit before income tax
69.100 12.771
Income tax expense
4
2.009 1.490
Net profit for the year
71.109 14.261
Distribution of profit
Net revaluation reserve according to the equity method
57.729 -2.972
Retained earnings
13.380 17.233
71.109 14.261
In thousands DKK Notes 2023 2022
Parent balance sheet
as at 31 December 2023
In thousands DKK Notes 2023 2022
Page 72 of 88
Other financial assets at amortised cost
Assets
Completed development projects
5.534 6.991
Intangible assets
5
5.534 6.991
Land and buildings
24.427 26.392
Plant and equipment
4.841 5.711
Property, plant and equipment
6
29.268 32.103
Investments in subsidiaries
7
567.301 497.617
Fixed assets investments
305 305
Financial assets
567.606 497.922
Total non-current assets
602.408 537.016
Receivables from group entities
7.356 4.648
Other receivables
19 39
Deferred tax
10.149 9.726
Income tax receivable
1.660 1.484
Prepayments
2.981
2.161
Total current assets
22.165
18.058
Total assets
624.573
555.074
Parent balance sheet
as at 31 December 2023
In thousands DKK Notes 2023 2022
Page 73 of 88
Equity
Share capital
40.000 40.000
Net revaluation reserve according to the equity method
71.257 11.739
Reserve for cash flow hedges
- 1.048
Retained earnings
Total equity
186.158 171.644
297.415 224.431
Liabilities
Non-current liabilities
Mortgage loans
45.548 35.436
Bank loans
101.639 144.175
Other liabilities
53.810 79.200
Total non-current liabilities
8
200.997 258.811
Current liabilities
Mortgage loans
8
1.663 2.203
Bank loans
8
97.682 40.508
Lease liabilities
- 425
Trade payables
4.413 2.418
Payables to group ntities
- 22.297
Other liabilities
8
22.403
3.981
Total current liabilities
126.161
71.832
Total liabilities
327.158
330.643
Total liabilities and equity
624.573
555.074
Contingent liabilities, commitments and contingencies
10
Related parties
11
Material accounting policy information
12
I
n thousands DKK
Share capital
Net revaluation
reserve according to
Reserve for cash flow
the equity method
hedges
Retained earnings
Proposed dividend
Total equity
Parent statement of changes in equity
for the year ended 31 December 2023
As at 1 January 2023 40.000 11.739 1.048 171.644 - 224.431
Currency exchange foreign entities
- 1.789 - - - 1.789
Change in cash flow hedges
- - 110 - - 110
Tax of the years change in cash flow hedges
- - -24 - - -24
Transfer of reserves
- - -1.134 1.134 - -
Profit for the period
- 57.729
- 13.380 - 71.109
As at 31 December 2023
40.000 71.257
-
186.158
-
297.415
Page 74 of 88
Contents of the notes to the parent financial statements
Note 1 Staff costs
Page 75 of 88
I
n thousands DKK
Executive Board of
Board Directors
Total
In thousands DKK 2023 2022
In thousands DKK 2023 2022
Wages and salaries
21.367
21.200
Pension cost, defined contribution plans
1.240 1.294
Other social security costs
359 352
Other staff costs
576 698
23.542 23.544
Wages, salaries, pensions, other social security costs and staff costs are presented in income
statement as administrative expenses.
23.542 23.544
Average number of employees
20 20
Remuneration paid or payables to the Executive Board and the Board of Directors is shown below:
2023
Wages and salaries
1.750 1.152 2.902
1.750 1.152 2.902
2022
Wages and salaries
3.200 1.352 4.552
3.200 1.352 4.552
Note 2 Other income and expense items
Other income and expenses
Change in contingent consideration related to business combination
10.486 22.606
10.486 22.606
I
n thousands DKK
Executive Board of
Board Directors
Total
Contents of the notes to the parent financial statements
Note 3 Financial income and expenses
Page 76 of 88
In thousands DKK 2023 2022
Financial income
Interest income from group entities
3.162 1.375
Interest income from bank and customers
3.932 24
Foreign exchange rate gains
-
701
Total financial income
7.094
2.100
Financial expenses
Interest expenses from group entities
-52 -134
Other interest expenses
-12.943 -4.119
Foreign exchange rate losses
-1.153
-35
Total financial expenses
-14.148
-4.288
Net finance costs
-7.054
-2.188
Contents of the notes to the parent financial statements
Note 4 Income tax expense
Page 77 of 88
In thousands DKK 2023 2022
Current tax
Current tax on profits for the year
1.560 1.086
Adjustments for current tax of prior periods 2 -
Deferred income tax
423 318
Income tax expense
The tax is specified as follows:
1.985 1.404
Tax on profits for the year
Tax on changes in equity
2.009 1.490
-24 -86
1.985 1.404
Contents of the notes to the parent financial statements
Note 5 Intangible assets
Page 78 of 88
In thousands DKK
Completed
development
projects
Cost:
At 1 January 2023
17.936
Additions
2.146
Disposals
-4.898
At 31 December 2023
15.184
Accumulated depreciation and impairment:
At 1 January 2023
-10.945
Depreciation charge
-3.571
Depreciation and impairment on disposals for the year
4.866
At 31 December 2023
-9.650
Carrying amount 31 December 2023
5.534
Note 6 Property, plant and equipment
Land and
Plant and
In thousands DKK
buildings equipment
Cost:
At 1 January 2023 109.660 8.702
Additions
- 1.209
Disposals
- -402
At 31 December 2023 109.660 9.509
Accumulated depreciation and impairment:
At 1 January 2023 -83.268 -2.989
Depreciation charge
-1.965 -2.081
Depreciation and impairment on disposals for the year
- 402
At 31 December 2023 -85.233 -4.668
Carrying amount 31 December 2023 24.427 4.841
Period of depriciation
10-25 years 3-6 years
Contents of the notes to the parent financial statements
Note 7 Investments in subsidiaries
Page 79 of 88
In thousands DKK 2023 2022
Cost:
At 1 January 2023 485.214 485.214
Additions
10.165
-
At 31 December 2023 495.379 485.214
Revaluations:
At 1 January 2023 12.403 40.190
Exchange rate adjustment
1.789 -7.923
Profit/Loss for the year
80.980 28.219
Received dividends for the year
-10.000 -16.892
Amortisation goodwill
-13.954 -30.491
Adjustment in internal profit on inventories
704 -700
At 31 December 2023
Carrying amount 31 December 2023
71.922 12.403
567.301 497.617
Positive difference amounts, which are identified on first recognition of subsidiaries
at net asset value
Remaining positive difference amount, which is included in the above accounting
value
Investments in subsidiaries are specified as follows:
8.275 -
226.696 232.376
DANÆG A/S
Christianfeld, Denmark
tDKK 3.100 100%
DANÆG Products A/S Roskilde, Denmark
tDKK 1.000 100%
Kronägg AB
Källbergs Industri AB
Perstorp, Sweden
Töreboda, Sweden
tSEK 4.000 100%
tSEK 12.000 100%
Munax Oy Laitila, Finland
Torggummans Ägg AB Färgelanda, Sweden
tEUR 75 100%
tSEK 100 100%
Name of entity
Place of business
Capital Share
Ownership
interests held
by the group
Contents of the notes to the parent financial statements
Note 8 Long-term liabilities
Page 80 of 88
Maturities of financial liabilities
Repayments due within 1 year are listed under short-term liabilities. Other liabilities are recognized under long-term liabilities.
In thousands DKK
Less than
More than
Carrying
Contractual maturities of financial liabilities
1 year
1 - 5 years
5 years
amount
At 31 December 2023
Mortgage loans
1.663 7.296 38.252 47.211
Bank loans
97.682 93.981 7.658 199.321
Other Liabilities
22.403 53.810 - 76.213
121.748 155.087 45.910 322.745
In thousands DKK
Less than
More than
Carrying
Contractual maturities of financial liabilities
1 year
1 - 5 years
5 years
amount
At 31 December 2022
Mortgage loans
2.203 8.859 26.577 37.639
Bank loans
40.508 108.945 35.230 184.683
Other liabilities
3.981 25.433 53.767 83.181
46.692 143.237 115.574 305.503
Contents of the notes to the parent financial statements
Note 9 Derived finansial instruments
Page 81 of 88
-
-
Agreements have been entered into on derivative financial instruments in the form of interest rate swaps. The fair value of
derivative financial instruments on the balance sheet date is:
Liabilities
- 110
Agreements of interest rate swaps is used to secure the future interest payments on long-term borrowings with variable interests.
The agreements have been fullfilled in the financial year.
Note 10 Contingent liabilities, commitments and contingencies
Assets pledged as security
The carrying amounts of assets pledged as security for borrowings are:
In thousands DKK 2023 2022
Collateral for mortgage institutions
The following assets are secured for the mortgage institution:
Land and buildings with a carrying amount of:
24.427 26.393
Collateral for bank loans
Unlisted shares in Munax Oy, tEUR
75 75
Lease commitments
Lease commitments from operative leasing agreements. Total future
leasing payments:
Less than 1 year 931 882
1-5 years
559 528
1.490 1.410
The Group's companies are jointly and severally liable for tax on the Group's jointly taxed income, etc. The total amount of
corporation tax due is shown in the annual report for Vitfoss A/S, CVR-nr. 82 77 62 14, which is the management company in
relation to the joint taxation. The Group's companies are also jointly and severally liable for Danish withholding taxes in the form
of dividend tax, royalty tax and interest tax. Any subsequent corrections to corporation taxes and withholding taxes may result in
the company's liability amounting to a higher amount.
In thousands DKK 2023 2022
Contents of the notes to the parent financial statements
Note 11 Related parties
Page 82 of 88
DANÆG Holding A/S is owned equally by DANÆG amba and Dansk Landbrugs Grovvareselskab amba. Dansk Landbrugs
Grovvareselskab A.M.B.A. holds 100% of the issued ordinary shares of Vilofoss A/S. DANÆG Holding A/S is included in the
consolidated financial statements of Dansk Landbrugs Grovvareselskab A.M.B.A. The consolidated annual report can be requested
on the adress of Ballesvej 2, 7000 Fredericia.
Name of entity
Type
Place of business
Ownership interests
2023
2022
Dansk Landbrugs Grovvareselskab
Ultimate parent
A.M.B.A.
company and
controlling party
Fredericia
50%
50%
Danæg A.M.B.A Significant non-
controlling party
Christiansfeld
50% 50%
Vilofoss A/S Immediate parent
company
Fredericia
50% 50%
Contents of the notes to the parent financial statements
Note 12 Material accounting policy information
Page 83 of 88
The annual report for DANÆG Holding A/S of 2023 has been prepared in accordance with the reporting requirements of the
Danish Financial Statements Act of class B enterprises with a few areas from class C.
The accounting policies have not been changed from last year.
The financial statements are presented in thousands Danish Kroner ('DKK') and all values are rounded to the nearest thousand,
except when otherwise indicated.
Recognition and measurement
The income is recognised in the income statement as earned. Further to this, value adjustments of financial assets and liabilities
measured at fair value or amortised cost are recognised. Furthermore, all costs incurred to earn the profit or loss for year have been
recognised in the income statement, including amortisation, depreciation, write-down and provisions as well as reversals as a
consequence of changed accounting estimates of amounts previously recognised in the income statement.
Assets are recognised in the balance sheet when it is probable that future economic benefits will flow into the Company, and the
value of the asset can be measured reliably.
Liabilities are recognised in the balance sheet when it is probable that future economic benefits will flow out of the Company, and
the value of the liability can be measured reliably.
On initial recognition, assets and liabilities are measured at cost. Subsequently, assets and liabilities are measured as described
below for each financial statement item.
Business combinations
Business combinations completed on or after 1 July 2018
Purchases of subsidiaries are treated according to the acquisition method, according to which the acquired company's identifiable
assets and liabilities are measured at fair value at the time of acquisition.
The time of acquisition is the time when the group obtains control over the acquired company.
The cost price of the purchased business constitutes the fair value of the agreed consideration, including consideration contingent
on future events. Transaction costs that can be directly attributed to the purchase of subsidiaries are recognised in the income
statement as they are incurred.
Positive difference between the cost price of the acquired business and the identified assets and liabilities is recognised in the
balance sheet under intangible assets as goodwill, which is written off straight-line in the income statement over the expected
useful life. If the difference amount is negative, this is recognised immediately in the income statement.
If the purchase price allocation is not final, positive and negative difference amounts from purchased subsidiaries, as a result of
changes in recognition and measurement of the identified net assets, can be adjusted up to 12 months from the time of acquisition.
These adjustments are simultaneously reflected in the value of goodwill or negative goodwill, including in depreciations already
made.
If the cost includes contingent consideration, these are measured at fair value at the time of acquisition. Contingent remuneration
is subsequently remeasured at fair value. Value adjustments are recognised in the income statement.
Contents of the notes to the parent financial statements
Note 12 Material accounting policy information
Page 84 of 88
In the case of incremental acquisitions, the value of the previous holding of capital shares in the acquired company is remeasured
to the fair value at the time of aquisition. The difference between the book value of the previous equity share and the fair value is
recognised in the income statement.
Business combinations completed before 1 July 2018
Company acquisitions completed before 1 July 2018 are, with certain exceptions, treated according to the same accounting
practices as business combinations completed on 1 July 2018 or later. The main exceptions are:
-
Identified assets and liabilities in the acquired business are only recognised if they are probable.
-
Identified contingent liabilities in the acquired company are not recognised in the consolidated balance sheet.
-
If the purchase price allocation is not final, positive and negative difference amounts, as a result of changes in recognition
and measurement of acquired net assets, can be adjusted until the end of the financial year that follows the year of
acquisition.
-
Transaction costs that can be directly attributed to the purchase of subsidiaries are included as part of the purchase price.
-
Adjustment of contingent consideration after initial recognition is recognized directly against the original purchase price,
whereby a correction is made to the value of goodwill or negative goodwill.
-
In the case of incremental acquisitions, the book value of the existing capital shares is included in the cost price.
Business mergers
In the case of group internal business pooling, the pooling of interest is used. In this way, the two companies are merged at book
values, and no difference amounts are identified. Any consideration that exceeds the book value of the acquired company is
recognised directly in equity. The merger method is carried out as if the two companies had always been merged when adjusting
comparative figures.
Leasing
Leasing contracts, where the company has all significant risks and benefits associated with ownership (financial leasing), are
recognised in the balance sheet at the lower of the fair value of the asset and the present value of the lease payments, calculated
using the lease agreement's internal interest rate or an alternative loan interest rate as a discount factor.
The capitalised residual leasing obligation is recognised in the balance sheet as a liability, and the interest part of the leasing
service is expensed on an ongoing basis in the income statement.
All other leasing contracts are considered operational leasing. Services in connection with operational leasing are recognised on a
straight-line basis in the income statement over the leasing period.
Foreign currency translation
Danish kroner is used as the presentation currency. All other currencies are considered foreign currency.
Transactions in foreign currency are converted at the exchange rate on the day of the transaction. Exchange rate differences that
arise between the exchange rate on the day of the transaction and the exchange rate on the day of payment are recognised in the
income statement as a financial item. If currency positions are considered to be a hedge of future cash flows, the value adjustments
are recognised directly in equity.
Contents of the notes to the parent financial statements
Note 12 Material accounting policy information
Page 85 of 88
Receivables, debts and other monetary items in foreign currency that are not settled on the balance sheet date are measured at the
balance sheet date's exchange rate. The difference between the exchange rate on the balance sheet date and the exchange rate at the
time the receivable or debt arose is recognised in the income statement under financial income and expenses.
Fixed assets purchased in foreign currency are measured at the exchange rate on the day of the transaction.
Derived finansial instruments
Derivative financial instruments are first recognised in the balance sheet at cost and subsequently measured at fair value. Positive
and negative fair values of derivative financial instruments are classified as "Other receivables" and "Other liabilities".
Changes in the fair value of derivative financial instruments are recognised in the income statement, unless the derivative financial
instrument is classified as and meets the criteria for hedge accounting.
Hedge accounting
Changes in the fair value of financial instruments that are classified as and meet the criteria for hedging the fair value of a
recognised asset or a recognised liability are recognised in the income statement together with the changes in the fair value of the
hedged asset or the hedged liability that can be attributed to the risk that is hedged.
Changes in the fair value of financial instruments that are classified as and meet the conditions for hedging expected future
transactions are recognised in equity under the fair value reserve as far as the effective part of the hedge is concerned. The
ineffective part is recognised in the income statement. If the secured transaction results in an asset or a liability, the amount
deferred under equity is transferred from equity and recognised in the cost price of the asset or liability respectively. If the hedged
transaction results in income or a cost, the amount deferred under equity is transferred from equity to the income statement in the
period in which the hedged transaction is recognised. The amount is recognised in the same item as the secured transaction.
Changes in the fair value of financial instruments that are classified as and meet the criteria for hedging net investments in
independent foreign subsidiaries or associated companies are recognised directly in equity as far as the effective part of the hedge
is concerned, while the ineffective part is recognised in the income statement.
Income statement
Revenue
When selling goods, net revenue is recognised when the benefits and risks relating to the sold goods have passed to the buyer, the
net revenue can be measured reliably, and it is likely that the financial benefits of the sale will accrue to the company.
Services are recognised in step with the performance of the service to which the contract relates using the production method,
whereby the net turnover corresponds to the sales value of the service performed for the year. The method is used when the total
income and costs of the service and the degree of completion on the balance sheet date can be calculated reliably, and it is likely
that the financial benefits, including payments, will accrue to the company. Costs incurred in relation to the expected total costs of
the service are used as degree of completion.
The net turnover is measured at the remuneration received and is recognised exclusive of VAT and with the deduction of discounts
in connection with the sale.
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Note 12 Material accounting policy information
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Administrative expenses
Administrative costs comprises costs for the management, the administrative staff, office costs, depreciation etc. Depreciation of
goodwill is also included in the share relating to the administration activity.
Other operating income/ -expenses
Other operating income and other operating costs comprise accounting items of a secondary nature in relation to the Company's
main activity, including profit and loss on the sale of intangible and tangible assets.
Income from investments
In the income statement, the proportionate share of profit for the year is recognised under the item "Income from investment in
subsidiaries".
Financial income/ -expenses
Financial income and expenses are recognised in the income statement with the amounts relating to the financial year.
Tax on profit og loss for the year income
Tax on the year's result consists of the year's current tax and deferred tax and is recognised in the income statement with the part
that can be attributed to the year's result, and directly on the equity with the part that can be attributed to entries directly on the
equity.
The company is jointly taxed with other Danish group companies. The tax effect of the joint taxation with the subsidiaries is
distributed to both profit-making and loss-making Danish companies in relation to their taxable income (full distribution with
refund regarding tax losses).
Balance sheet
Completed development projects
Directly attributable costs that are capitalised as part of a development project include employee costs and an appropriate portion
of relevant overheads. Capitalised development costs are amortised from the point at which the asset is ready for use.
Property, plant and equipment
Property, plant and equpment are measured at cost less accumulate amortisation and depreciation.
Cost comprises the acquisition price as well as costs directly related to the adquisition until the time when the asset is ready to be
put into operation.
The depreciation basis, which is calculated as cost price reduced by any residual value, is distributed linearly over the assets'
expected useful life, which amounts to:
Production buildings
Other buildings
Plant and equipment
Depreciation period and residual value are reassessed annually.
10-25 years
10-25 years
3-6 years
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Note 12 Material accounting policy information
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Impariment of plant and equipment
The carrying amount of intangible assets and property plant and equipment is reviewed annually for indication of impaiment for
loss, apart from what is expressed by usual amortisation and depreciation. If this applies, impairment for loss is made of each asset
or group of assts, respectively, to lower recoverable amount.
Investment in subsidiaries
Investments in subsidiaries have been recognised according to the equity method.
In the balance sheet, under the item "Investment in subsidiaries", the proportional ownership share of the companies' accounting
equity value is calculated based on the fair value of the identifiable net assets at the time of acquisition, with the deduction or
addition of unrealised intra-group profits or losses and with the addition of the residual value of any capital gains and goodwill
calculated at the time of the acquisition of the companies.
The total net revaluation of capital shares in subsidiaries is allocated via the profit allocation to "Net revaluation reserve according
to the equity method" under equity. The reserve is reduced by dividend distributions to the parent company and regulated by other
equity movements in the subsidiaries.
Subsidiaries with a negative net asset value are recognised at DKK 0. If the parent company has a legal or actual obligation to cover
the company's underbalance, a provision for this obligation is recognised.
Fixed assets investments
Fixed assets investments, recognised under fixed assets, include listed bonds and shares, which are measured at the fair value on
the balance sheet date. The fair value is calculated on the basis of the most recently quoted sales price.
Investments that are not traded on an active market are measured at cost price or a lower recoverable amount.
Receivables
Receivables are measured in the balance sheet at amortised cost or a lower net realisable value, which is normally nominal value
less impairment losses.
Prepayments
Prepayments comprise prepaid costs relating to rent, insurance premiums, subscriptions and interest.
Equity and liabilities
Dividends
Dividends that management proposes to distribute for the financial year are shown as a separate item under equity.
Deferred tax assets and liabilities
Deferred tax is measured according to the liability method of temporary differences between the accounting and tax value of assets
and liabilities, calculated on the basis of the planned use of assets, respectively settlement of the liability.
Deferred tax assets, including the tax value of the tax losses to be carried forward, are measured at the value at which the asset is
expected to be realised, either by offsetting tax on future earnings or by offsetting deferred tax liabilities within the same legal tax
unit.
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Note 12 Material accounting policy information
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Deferred tax is measured on the basis of the tax rules and tax rates that will apply with the balance sheet date's legislation when the
deferred tax is expected to be used as current tax. Changes in deferred tax, as a result of changes in tax rates, are recognised in the
income statement or in equity when the deferred tax relates to items recognised in equity.
Current tax receivables and liabilities
Current tax liabilities and current tax receivable are recognised in the balance sheet as calculated tax on the year's taxable income
adjusted for tax on previous years' taxable income and for taxes paid on account. Interest reimbursement and interest surcharge
under the Danish Tax Prepayment Scheme are recognised in the income statement under financial items.
Financial liabilities
Loans, such as mortgage loans and loans from credit institutions, are recognised when the loan is taken out at the proceeds
received, less transaction costs incurred. In subsequent periods, the loans are measured at amortised cost, so that the difference
between the proceeds and the nominal value is recognised in the income statement as an interest expense over the loan period.
Priority debt is thus measured at amortised cost price, which for cash loans corresponds to the remaining debt of the loan. For
bond loans, the amortised cost corresponds to a residual debt calculated as the loan's underlying cash value at the time of taking
out the loan adjusted by a write-off over the repayment period of the loan's exchange rate adjustment at the time of taking out the
loan.
Other liabilities are measured at amortised cost, which essentially corresponds to nominal value.