ANNUAL REPORT
AUGUST JULY
STARK Group A/S
C. F. Richs Vej 115
2000 Frederiksberg
Denmark
CVR 41952725
EVERY SECONDS,
WE DELIVER BUILDING
MATERIALS TO
CONSTRUCTION SITES
ACROSS EUROPE
WE CONNECT SUPPLIERS AND TRADESPEOPLE THROUGH A LEADING
DISTRIBUTION PLATFORM CONTRIBUTING TO A MORE EFFICIENT BUILDING
INDUSTRY AND ITS TRANSITION TO NET ZERO
Branches and
distribution centres
,
Customers
,
Suppliers
,
Colleagues
,
EUR BILLION
ACTING WITH A LOCAL ATTITUDE AND
LEVERAGING OUR SCALE HAVE MADE
US AN INDUSTRY LEADER.
MARKET BY MARKET WE HAVE SECURED
LEADING POSITIONS IN THE ATTRAC
TIVE EUROPEAN MARKET FOR HEAVY
AND CIVIL ENGINEERING BUILDING
MATERIALS THAT IS WORTH EUR
BILLION ANNUALLY.
Denmark
Sweden
Norway (regionally)
Finland
United kingdom
Germany
Austria
#
#
#
#
#
#
#
INDUSTRY LEADER ON
A GROWTH TRAJECTORY
DRIVEN BY CONTINUED INVESTMENTS IN BUILDING
THE STRONGEST DISTRIBUTION PLATFORM FOR THE FUTURE
ACCELERATING
GROWTH
THROUGH M&A
DIGITAL IN
EVERYTHING
WE DO
LEVERAGING
SCALE AND
BUYING POWER
BEST PARTNER
FOR SUSTAINABLE
BUILDING
ADVANCING OUR
DISTRIBUTION
PLATFORM
SEGMENTS' SHARE OF NET SALES
NORDICS
GERMANY
& AUSTRIA
UNITED
KINGDOM
TOPTIER PERFORMANCE
ON SUSTAINABILITY
NET SALES
EUR Million
ADJUSTED EBITDA
EUR Million
,
STARK GROUP A/S – Annual Report 2024
HOW WE LEVERAGE YEARS OF STRENGTH
TOWARD UNDISPUTED MARKET LEADERSHIP
ATTRACTIVE
MARKET
ADVANCING EUROPEAN
LEADERSHIP
ACCELERATING BUSINESS
TRANSFORMATION
LEVERAGING ESG
LEADERSHIP
Critical distribution platform
Connects manufacturers with tradespeople, providing
valued distribution and logistics services as a critical link
in a complex chain.
Resilient RMI market
Leading position in the attractive and stable renovation,
maintenance, and improvement (RMI) market, comprising
60% of the European market for heavy and civil engineer-
ing building materials worth EUR 280 billion.
Structural growth drivers
· Population growth and urbanisation leading to contin-
ued housing deficits and ongoing renovation needs.
· Strong demand for energy renovation driven by EU and
national legislation that calls for action by 2030 and
net zero by 2050.
Unique market position
A leading distributor of heavy building materials to
tradespeople in Europe, with # 1 and #2 market positions
in the Nordics, Germany, Austria and the UK.
Growth
High growth rates year-on-year with 10.3% net sales
growth despite weak market demand in 2023/24,
approximately doubling the size of our business in less
than five years.
Integrated M&A strategy
25 acquisitions across our footprint since 2021, signifi-
cantly enhancing growth and our strategic position.
Winning market share
Strategic focus on strengthening relationships with small
and medium-sized customers, resulting in consistent
organically increased market share.
Transformation initiatives
• Active M&A agenda with an integrated team and
above-market organic growth focused on the RMI
segment and SME customers.
• Leverage our unique scale to build our leading digital,
sourcing, and distribution capabilities.
• Commercialise sustainability and continue to be a
leader in ESG.
Local empowerment
Focus on local responsibility and accountability to drive
efficiency and customer service.
Top tier rating
EcoVadis Platinum Rating and top 1% globally.
Pledge
Commitment to Science Based Targets and net zero by
2050.
Sustainability as a commercial success
Partnering with suppliers and tradespeople to offer
attractive and sustainable products and services.
Innovation
Introduced KlimaLog tool to make CO footprint trans-
parent, aiding product evaluation and selection.
EUROPEAN MARKET
LEADER
Through acquisitions incl.
STARK UK and specialist
businesses
ACCELERATED
GROWTH WITH CVC
Advancing transformation
strategy and execution
under new ownership
PLATFORM FOR
GROWTH IN GERMANY
Acquiring STARK
Deutschland
REFOCUSED STRATEGY
WITH LONE STAR FUNDS
Divesting Silvan (B2C) and
changing name to STARK
Group under new ownership
TAKEN PRIVATE BY
CVC AND WOLSELEY
In a public-to-private
deal. Owned by Wolseley
from 2006.
NORDIC MARKET
LEADER
Expanding into Sweden,
Norway, and Finland
NATIONAL MARKET
LEADER
through organic and M&A
growth in Denmark
PUBLICLY LISTED
COMPANY FOUNDED
through the merger of
‘Jørgensen & Stilling’ and
‘Petersen & Matzen’
OUR STORY IN SHORT
STARK GROUP A/S – Annual Report 2024
In the past year, our net sales increased by
10.3%. Explore the performance of our market
segments and see how our focus on small and
medium-sized customers in the renovation,
maintenance, and improvement sectors has
provided resilience.
What makes our market attractive, and how do
we plan to expand our market share and
strengthen customer relationships? In recent
years, we have launched several initiatives and
made substantial investments. Discover our
progress over the past year.
The past year has affirmed our strategy. Despite
facing weak demand and a challenging macro-
economic environment, we have made significant
strides in our growth and transformation programme.
LETTER FROM THE CEO
OUR PERFORMANCE
OUR BUSINESS
CONTENTS
INTRODUCTION
Letter from the CEO
Performance highlights
Key events
OUR BUSINESS
Our market
Our role in the market
Our strategy and progress
Risk management
OUR PERFORMANCE
Financial overview
Financial review
Sustainability review
Financial review by segments
Statement of financial position
Cash flow statement
Outlook
MANAGEMENT
Executive Management and
Chair of the Board of Directors
FINANCIAL STATEMENTS
Income statement
Comprehensive income
Statement of financial position
Statement of changes in equity
Cash flow statement
Parent company financial statement
REPORTS
Management's statement on the consolidated
finacial statements
Independent Auditor's Report
Page 6
Page 12
Page 19
INTRODUCTION
What is the state of our business? In the past financial year, we
achieved net sales growth, although the year differed significantly
from the previous three. The macroeconomic environment
resulted in weak market demand and deflationary pressure on
building materials.
We navigated these challenges effectively, delivering solid
financial performance and making continued progress on our
accelerated growth and transformation programme.
Letter from the CEO
Financial highlights
Key events
STARK GROUP A/S – Annual Report 2024
6
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Business
Management
Introduction
Our
performance
STARK GROUP A/S – Annual Report 2024
ACCELERATED
TRANSFORMATION
AMID MARKET
SETBACKS
LETTER FROM THE CEO
The past financial year was characterised by exceptionally weak
demand and deflation in building materials. Despite these
challenges, we achieved significant progress in our growth and
transformation programme, positioning us for growth when
markets recover. Our resilient performance in markets with
greater exposure to the Renovation, Maintenance, and
Improvement (RMI) segment validated our winning strategy,
which aims at making life as easy as can be for small and
medium-sized customers (SMEs) working in this segment.
SØREN
P. OLESEN
Group CEO,
STARK Group A/S
JENS BJØRN
ANDERSEN
Joined STARK Group
A/S as Chair of the
Board in April 2024
Continues
7
STARK GROUP A/S – Annual Report 2024
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
STARK GROUP A/S – Annual Report 2024
Business
Management
Introduction
Our
performance
STARK Group has embarked on a remarkable growth
journey, achieving high growth rates from 2021 to 2024.
The past year, however, has been notably different
from the preceding three.
From 2021 to 2022, we successfully navigated through
years of extraordinary activity levels and financial
results. The financial year 2022/23 marked a water-
shed moment and a pivotal shift, with strong activity
levels in the first half, followed by a decline in the
second half, which extended into our past financial
year.
Nevertheless, we delivered 10.3% net sales growth and
an adjusted EBITDA of EUR 372 million.
While I had hoped for more, we have successfully
gained market share and absorbed significant infla-
tionary pressures on our cost base.
However, winning market share, being disciplined on
costs and simplifying our business were not enough
to offset the adverse impact from inflation hikes
and associated interest rate spikes in 2022/23 that
led to exceptionally weak demand and deflationary
pressure on building materials in the past 18 months.
Our industry has in the past year experienced activity
levels below the ones following the financial crises in
2008.
Considering the macroeconomic environment, we can
take pride in our financial results.
SME AND RMI STRATEGY CONFIRMED
We have made significant progress on our accelerated
growth and transformation programme, which is a
core pillar in our strategy. Fundamentally, our strategy
focuses on growing our market share, deepening
customer relations, driving efficiency, and managing
our assets effectively.
The past year has confirmed our strategic focus on
small and medium-sized customers (SMEs) in the
Renovation, Maintenance, and Improvement (RMI)
segment, which has shown greater resilience com-
pared to new-build.
A strong presence in the RMI segment has supported
our Nordic business to demonstrate resilience and
protect our earnings. In contrast, our German business
faced greater challenges in defending its topline
due to a tough macroeconomic environment and its
higher exposure to large accounts and the new-build
segment.
The turnaround of STARK UK has positively impacted
our net sales and EBITDA. Following the acquisition
in the previous financial year, our UK business has
made significant strides in restoring gross margin and
improving profitability, despite weak demand and price
inflation on its cost base.
Both our UK and German businesses are diligently
working towards expanding their SME customer base
and increasing our share in the RMI market.
REINVESTING IN OUR BUSINESS
As part of our accelerated growth and transformation
programme, we expanded our distribution platform
by expanding our branch network near major cities
and opening a state-of-the-art central warehouse and
light-hub facility in Stockholm.
In Germany, we launched our distribution and branch
clustering programme, to drive even better service and
efficiency in our customer offerings.
In the UK, active asset management allowed us to
invest in bigger, better branches offering a wider prod-
uct range, always-in-stock guarantee and enhanced
distribution through an optimised branch network and
reliable delivery services.
Supporting our aim of making sustainability commer-
cially viable in the marketplace, we launched KlimaLog.
This innovative reporting tool is a leap in commer-
cialising sustainability as it aggregates all available
product data to provide a comprehensive overview of
the CO
2
footprint of building materials purchased from
us. KlimaLog makes the CO
2
footprint as transparent
as the price, facilitating easier evaluation and selection
of products and their alternatives.
Simultaneously, we are overhauling our digital infra-
structure by establishing a modern digital platform
that enhances key business processes and provides
value-added services to customers. The digital trans-
formation has paved the way for pilot initiatives that
explore how we can utilise AI when serving customers.
SØREN P. OLESEN
CEO, STARK Group
To deliver this significant enhancement of our plat-
form, we invested EUR 148 million, which was funded
partly by active asset management, leaving us with a
net CAPEX spend of less than 1% of net sales.
HOW WILL MARKETS DEVELOP?
Geopolitical unrest and challenging macroeconomic
conditions are likely to persist. However, the impact on
the construction industry is expected to diminish as
the housing deficit and the push for enhanced energy
efficiency increase. These factors are anticipated to
support market dynamics and drive sustainable growth
for decades to come.
It is my sincere belief that the recent turmoil has only
affected the timing of activities in our market, not the
underlying baseline demand for housing and construc-
tion work. We have likely passed the softest years in
terms of demand, and recovery is now visible on the
horizon. Over the past four years, we have experienced
both extraordinarily good times and a period of
exceptionally weak demand and deflation.
As we move forward, we see more and more light at the
end of the tunnel, and I believe that the light is bright.
Letter from the CEO
8
STARK GROUP A/S – Annual Report 2024
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
PERFORMANCE HIGHLIGHTS
Net sales grew by 10.3% to EUR 7,780 million, with
a positive impact from the acquisition of STARK UK.
Weak demand and price deflation adversely impacted
net sales, although the RMI market proved to be more
resilient than new-build. Organic growth excluding
acquisitions and currency translation was negative
at 10.2%.
Gross profit increased by 12.7% to EUR 2,041
million, driven by growth in net sales support-
ed by our acquisition in the UK. We managed
our gross margin effectively and benefited from
higher gross margin levels in the UK, which
accounted for a larger share of net sales during
the year. The gross margin increased by 0.5
percentage point to 26.2%.
Adjusted EBITDA was EUR 372 million, a
decrease of 18.4%. Despite group-wide efforts
to mitigate high inflation levels on union-agreed
staff and other operating expenses, these
measures were not enough to offset the effects
of weak market demand and price deflation
across several categories.
Scope 1 and 2 emissions were 19.6% lower than
our baseline year 2019/20, surpassing our target
of 16.8% and well below the 1.5-degree trajectory.
In the past year, scope 1 and 2 emissions
decreased by 0.2 percentage point.
NET SALES
EUR Million
GROSS PROFIT
EUR Million
ADJUSTED EBITDA
EUR Million
CARBON SCOPE &
Absolute tCOe
FY23 FY24
0
2,000
4,000
6,000
8,000
FY23 FY24
0
500
1000
1500
2000
2500
0
100
200
300
400
500
FY23 FY24
0
30,000
60,000
90,000
120,000
FY23 FY24
Target 2024 Target 2027
9
STARK GROUP A/S – Annual Report 2024
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
SEE VIDEO
KEY EVENTS
CONTINUED PUSH ON THE
FOREFRONT OF SUSTAINABILITY
We have made significant strides in commercialis-
ing sustainability. In the past year, we introduced
KlimaLog, a reporting tool that aggregates all available
product data to provide a comprehensive overview
of the CO footprint of building materials purchased
from us. This innovation makes the CO footprint as
transparent as the price, facilitating easier evaluation
and selection of products and their alternatives.
Our climate reporting tools were launched in Denmark
and Sweden, with plans for introduction in all our
markets. KlimaLog received the prestigious Finans
Impact Climate Award 2024.
Additionally, we expanded our range of product alter-
natives and enhanced our advisory services by training
additional 260 sustainability ambassadors this year.
In the past year, third-party eco-labelled products
accounted for one-forth of our net sales. 3.9% of
our employees were trained in our Sustainability
Ambassador Programme, surpassing our 2024 target
of 3%.
ACCELERATED INVESTMENT PROGRAMME
TO GROW AND TRANSFORM OUR BUSINESS
Significant attention was given to enhancing our
distribution and digital platforms.
We expanded our distribution network by opening 15
advanced branches near major cities and a state-of-the-
art central warehouse and light-hub facility in Sweden.
The central warehouse, spanning 63,000 square metres
(equivalent to 12 football fields), enables our Swedish
operations to quintuple the number of stock-keeping
units to 100,000 and ensure day-to-day deliveries to
construction sites and branches across the 1,600-kilo-
meter length of the country.
In Germany, we launched our distribution and branch
clustering programme, which in earlier years signifi-
cantly improved efficiency and customer service in the
Nordics.
Our digital programme aims to overhaul the digital infra-
structure, in particular in the Nordics, by establishing a
modern platform that enhances key business processes
and provides value-added services to address essential
customer needs.
Continues
10
STARK GROUP A/S – Annual Report 2024
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
SEE VIDEO
SEE VIDEO
MOMENTUM FOR MAJOR
ACQUISITION IN THE UK
We gained solid momentum in the turn-
around of STARK UK. Acquired in March
2023, this significant undertaking aimed to
revitalise one of the UK's leading distributors
with a strong heritage that had been under-
performing for years.
Several sales brands, including the leading
Jewson brand, were relaunched alongside
the introduction of Jewson’s “Branch of the
Future” concept that features innovative
elements inspired by our branch concepts in
the Nordics, Germany, and Austria.
The business has undergone a strategic shift
from centralised leadership to empowering
branches with responsibility and accounta-
bility. Simplifying our business has shifted
focus to meeting the needs of professional
tradespeople, offering a broader product
range, an always-in-stock guarantee, and
We have initiated the formation of an exter-
nal board of directors. The assignment was
placed in the hands of Jens Bjørn Andersen
who is the former CEO of DSV, a globally
leading transport and logistics company.
Jens Bjørn Andersen was elected as Chair of
STARK Group A/S on 23 April 2024.
NEW CHAIR TO ESTABLISH EXTERNAL
BOARD OF DIRECTORS
We expanded our European Supplier Programme, incorporating
more key suppliers and enhancing knowledge sharing and market
analysis. This programme, unique in its scale and significance within
our industry, was established in 2020 and has since evolved into a
platform for participation in sector-specific working groups, including
the Sustainability Round Table.
This year, our sourcing set-up was reorganised to better align with
our supplier base. We strengthened our group-wide category efforts
for major categories to leverage group-wide sourcing benefits for
both suppliers and ourselves. Additionally, our local sourcing efforts
were strengthened to ensure agility and responsiveness to local
market demands.
EXPANSION OF
THE EUROPEAN
SUPPLIER
PROGRAMME
enhanced distribution through an optimised
branch network and reliable delivery
services.
A significant growth and transformation
programme has been enabled by active
asset management and the consolidation of
smaller branches into larger ones.
Key events
11
STARK GROUP A/S – Annual Report 2024
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
OUR BUSINESS
The European market for building materials distribution is
fragmented yet highly attractive. How have we secured and
enhanced our leadership?
We have made significant progress, expanding our market share
and strengthening customer relationships. Additionally, we have
leveraged scale benefits by enhancing key business processes
digitally and commercialising sustainability initiatives.
Our market
Our role in the market
Our strategy and progress
Risk management
STARK GROUP A/S – Annual Report 2024
12
Introduction
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Our
performance
ATTRACTIVE GEOGRAPHICAL
FOOTPRINT
We are present in some of the most stable countries in Western
Europe characterised by robust market fundamentals such as
steady GDP growth, a reliable regulatory framework, and strong
structural growth drivers. These drivers include an estimated
population increase of 2.25 million people (1.2% to 191 million)
between 2024 and 2029
2
, urbanisation, and a push for enhanced
energy efficiency and sustainability in the existing housing
stock.
We are a leading European company in the frag-
mented and highly attractive market for the distribu-
tion of heavy and civil engineering building materials.
Our objective is to capture and consolidate this
market, which is valued at EUR 280 billion in Europe
alone
1
. The market is characterised by strong fun-
damentals, supported by structural trends such as
stable GDP growth, urbanisation, and accelerated
demand for energy renovations.
We focus particularly on the Renovation,
Maintenance, and Improvement (RMI) segment,
which constitutes approximately 60% of our address-
able market and shows greater cyclical resilience.
More than 450,000 tradespeople in this segment rely
on us to simplify their work by providing the essential
building materials for constructing, renovating, and
maintaining the cities and communities that shape
people’s lives.
By supporting these tradespeople in building their
businesses, we strengthen our market leadership.
1
Estimate based on 19 countries in Europe from Euroconstruct 2022
2
Statista
RESILIENT RMI MARKET
Our primary market is the highly attractive Renovation, Maintenance,
and Improvement (RMI) market of the construction industry. This sec-
tor is crucial for addressing the old housing stock and the persistent
housing shortage, exacerbated by years of limited new construction.
The more resilient RMI market benefits from the growing demand for
energy efficiency, further supported by the EU’s push for decarbonis-
ing the building stock.
The total European market for heavy and civil
engineering building materials is
estimated at approximately
EUR 280 billion, with the
RMI segment representing
60% of this value.
ATTRACTIVE CUSTOMER SEGMENT
Our primary customers are tradespeople working in the RMI
segment. While we serve a diverse range of customer segments,
our core focus is on small and medium-sized customers (SMEs)
involved in small to medium RMI projects or subcontracting
roles. This segment is particularly active in the RMI market and
operates across various cities. Hence, SME tradespeople highly
appreciate our extensive branch network, efficient distribution,
comprehensive and reliable product range, and exceptional
services.
OUR MARKET
ACCELERATING DEMAND FOR
ENERGY RENOVATIONS
The EU’s European Green Deal and 2023 revision of the Energy
Performance of Buildings Directive (EPBD IV) have significantly
heightened demand for energy efficiency. The updated directive
mandates a 55% reduction in greenhouse gas (GHG) emissions
by 2030 and aims for a fully decarbonised building stock by
2050. Achieving these targets will largely depend on increasing
the renovation rate of the least energy-efficient buildings across
EU Member States.
STARK GROUP A/S – Annual Report 2024
13
Introduction
Business
Our
performance
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
SOURCE
SELL
DISTRIBUTE
We source at scale and break truckloads into
smaller quantities and product mix needed
at building sites. Keeping stock of a market
leading assortment in warehouses and branches
secures high levels of availability, product
integrity and competitive prices.
KEY
RESOURCES
400,000 SKU numbers
sourced, sold and
distributed
+450,000 tradespeople
15,000 suppliers
1,100 branches and
distribution centres
19,000 employees
125 years of heritage
Leading sales brands
VALUE
CREATED
More and better housing, office
spaces, and community buildings
Building industry efficiency
Advice, service, and credit
Great place to work
Competitive shareholder returns
We offer a comprehensive product range
and full availability, facilitating sales through
project provision and bidding planning services.
Our offerings include competitive pricing,
product and sustainability advice, product
documentation, and credit options to bridge
liquidity gaps.
Through our network of branches and hubs
we distribute building materials, significantly
reducing the time tradespeople spend on
procurement. Also, our modified trucks and
direct delivery capabilities enable us to
efficiently manage the complex
distribution of heavy and often
fragile materials to building sites.
We operate in an industry crucial to building and
renovating future cities and communities. With ongo-
ing population growth, there is a growing demand
for housing, office space, and community buildings
to accommodate people expecting a high quality of
life, as well as more energy-efficient and sustainable
urban development.
STARK Group is a leading distributor of heavy
building materials used for transforming these cities
and communities.
We play a vital role in connecting building material
manufacturers with tradespeople. We source over
400,000 SKUs from more than 15,000 suppliers,
providing market insights and customer feedback
to manufacturers. Our extensive network of 1,100
warehouses, distribution centres, branches, and
shops, located close to building sites, ensure
product availability and delivery on time in full for
tradespeople.
Every second, we receive an order from the more than
450,000 tradespeople who rely on us for efficient
procurement, expert advice, documentation, credit,
and effective distribution. Every ten seconds, we
deliver building materials to construction sites across
Europe. Doing this well creates value not only for our
customers but also for our shareholders, employees,
and the communities where we operate.
OUR ROLE IN
THE MARKET
STARK GROUP A/S – Annual Report 2024
14
Introduction
Business
Our
performance
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
We are on a trajectory of growth and market consolidation. Seven years
ago, we refocused our strategy on SME tradespeople working in the RMI
segment. The acquisition of STARK Deutschland established a platform
for growth into the German market for heavy building materials and
specialist areas such as civil engineering, roofing, and tiles.
In the past years, we have completed 25 acquisitions, significantly
boosting our growth. Among our recent acquisitions was STARK UK,
which represents nearly one-third of our business. Acquisitions in Austria
expanded our platform further into the DACH region, and the acquisition
of FagFlis Group in Norway and Sweden enhanced our Nordic foothold in
the attractive specialist area of tiles, where we are a leader in Germany.
While turning around our major acquisition of STARK UK and managing
a tough macroeconomic environment, we continue to invest in organic
growth. Last year, we expanded our network with 15 new advanced
branches near major cities and a state-of-the-art distribution centre near
Stockholm.
FIVE MAJOR INITIATIVES TAKE PRIORITY IN OUR
ACCELERATED TRANSFORMATION PROGRAMME,
DESIGNED TO SUSTAIN ABOVEMARKET GROWTH RATES.
BY CONTINUING TO BUILD AND LEVERAGE OUR SCALE,
WE ARE COMMITTED TO SECURING CONTINUED HIGH
GROWTH RATES.
ACCELERATING GROWTH
THROUGH M&A
In the spring of 2023, we reviewed our strategy to
future-proof our plans towards 2027. The strategy
outlines how we intend to grow our market share and
deepen customer relations, drive efficiency, and man-
age our assets. Several initiatives have been launched
in recent years, showing solid progress.
These initiatives support the accelerated transforma-
tion programme of STARK Group, primarily focusing
on enhancing our operations in the Nordics, where our
winning recipe has been applied the longest.
In other markets, the recipe is being applied through a
three-staged approach to build leading positions:
1. Kicking off strategic and financial turnarounds
2. Implementing key operating concepts
3. Advancing commercial mindsets
Today, our Nordic business has completed its turn-
around and is working to advance our commercial
mindset while implementing key operating concepts.
Our German business, acquired in late 2019,
announced its turnaround soon after and is currently in
the process of implementing key operating concepts.
Our UK business, which joined in 2023, is diligently
working through a strategic and financial turnaround.
OUR STRATEGY
AND PROGRESS
ACQUISITIONS
Total number Select companies
STARK GROUP A/S – Annual Report 2024
15
Introduction
Business
Our
performance
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Delivering to a building site every ten seconds through a complex dis-
tribution and logistics setup requires a robust digital foundation. Since
2022, we have focused on renewing this foundation to enhance processes,
create synergies, and provide value-adding services that address key
customer pain points.
The Athene programme, a strategic digital transformation initiative,
encompasses 11 IT and business projects. These projects will enhance
essential areas such as sales, warehouse management, supply chain
planning, logistics, and finance.
Significant progress has been made, with new solutions piloted, intro-
duced, or fully implemented. Notable achievements include the launch of
a new sales app and a supply chain planning system to improve availabil-
ity and inventory management.
We uphold high ESG standards, and we work to make sustainability a com-
mercial success, benefiting tradespeople and advancing a net-zero future.
Our strategy emphasises driving sustainability through our scale and
position to foster industry collaboration, aiming for higher growth in this
segment.
We plan to provide carbon data on products, expand third-party eco-
labeled and energy-efficient offerings and enhance sustainability services,
including advisory, documentation, and carbon-efficient distribution.
This year, we launched KlimaLog, a digital tool for tracking CO footprints
of building materials. First launched in Denmark with CVC Planet & People
Grant support, KlimaLog will be expanded across our business.
We distribute building materials through a network of 1,100 branches, ensuring
high proximity to tradespeople and building sites with market-leading branch
concepts. At the national level and in major cities, we enhance our distribution
by clustering around distribution branches and establishing regional and
national hubs and central warehouses.
Following our successful Nordic blueprint, we have initiated a distribution
clustering programme in Germany and begun the implementation of a similar
setup in the UK.
Additionally, we are enhancing our above-branch logistics to improve range
and availability. The new central warehouse in Stockholm has significantly
boosted our next-day delivery services and product range. This improvement
will continue as we introduce new light-hub capabilities and expand lighthubs
to more markets.
We purchase building materials worth over EUR 5.5 billion annually, using our
scale to benefit tradespeople, improve margins, achieve synergies and expand
a leading own brand range.
Our group-wide sourcing organisation offers suppliers a single entry point,
data-driven negotiations and access into new geographical markets.
We continue to leverage our scale to deliver a high-quality, competitive own
brand range, including the RAW, Raptor, Kermos, Terralis and SKY brands, with
a revamped offering underway.
DIGITAL IN
EVERYTHING WE DO
BEST PARTNER FOR
SUSTAINABLE BUILDING
ADVANCING OUR
DISTRIBUTION PLATFORM
LEVERAGING SCALE AND
BUYING POWER
STARK GROUP A/S – Annual Report 2024
16
Introduction
Business
Our
performance
Financial
statements
Consolidated
financial
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Parent
company
financial
statements
Management
SME focus: We aim to win SME customers, actively reduce churn, and do more
business with existing customers.
Customer promise: We aim to offer great product range and availability
with best-in-class delivery services while expanding our offering in must-win
categories, such as tiles, energy efficiency and light building supplies.
Best branch proximity: We aim to hone our network through high proximity
and market-leading branch concepts, enhanced logistics capabilities
and lighthubs that offer above-branch logistics with superior ranging and
availability.
Digital in everything we do: We aim to establish a modern digital foundation
that makes key processes more effective, frees up time and provides smarter,
value-adding services that solve essential customer pain points.
Empowering people: We aim to organise for local responsibility and account-
ability, work smartly with efficiency and performance and ensure that we have
capable and engaged people serving our customers.
Smart pricing: We aim to secure best prices and pricing consistency tailored
for individual customers while enhancing automated pricing practices through
improved use of data and AI.
Europe’s #1 sourcing channel: We aim to leverage our scale and buying power to
regain margin from suppliers, chase synergies and roll out a rejigged Own Brand
offering.
M&A leadership: We aim to consolidate our industry to secure scale benefits to
tradespeople, build local proximity in growth zones and fuel must-win category
plays.
Commercial real estate: We aim to manage our property portfolio actively to
secure operational excellence and reinvest in our business and branch network.
Best partner for sustainable building: We aim to make carbon data on
products available to customers and expand the eco-labelled, low-carbon
and energy-efficiency product range while enhancing our sustainability
advisory, documentation and carbon-efficient distribution services.
• Improved Net Promoter Score (NPS) to 63
• Strong customer acquisition in the Nordics maintained net active SMEs at
index 100
• Launched a distribution and branch clustering programme in Germany
• Opened a new central warehouse near Stockholm consolidating existing
warehouse facilities and adding new above-branch logistics capacity and
light-hub competencies
• Opened 15 new branches near major cities
• Secured solid progress in the Athene digitalisation programme, enhancing
key business processes and providing value-added services
• Secured solid progress in the UK turnaround programme by setting a new
management team, giving back responsibility to branches and simplifying
the organisation above branches
• Maintained top-tier employee NPS
• Launched award-winning climate monitoring tools in Denmark and Sweden
• Increased share of third-party verified eco-labelled products that made up
6% of our stocked assortment and accounted for 24% of total sales
• Trained 3.9% of our employees in our Sustainability Ambassador
Programme, surpassing our 2024 target of 3%
• Advanced our global sourcing set-up to leverage our scale for major catego-
ries while securing agility and responsiveness in local markets
• Delivered on our fast-paced turnaround plan for the UK securing an EBITDA-
margin improvement of close to 1 pp. in year one
• Recycled property and other assets with a total positive cash impact of EUR
93 million which was invested into our accelerated investment programme
WIN LOCAL ZONE
TO GROW MARKET
SHARE
CATALYSE BU
POWER INTO THE
LOCAL ZONE
BENEFIT FROM
EUROPE’S LARGEST
PLATFORM
BEST PARTNER
FOR SUSTAINABLE
BUILDING
Our strategy and progress STRATEGIC PILLAR PROGRESS
STARK GROUP A/S – Annual Report 2024
17
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Business
Our
performance
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
STARK GROUP A/S – Annual Report 2024
Our risk management process is designed to ensure
business continuity, protect and enhance value,
and safeguard the well-being of our employees. It
aims to swiftly identify and address emerging risks
that could impact the Group and our business units
in the global market. Integrated with the Internal
Control framework, the objective of our risk manage-
ment efforts is to identify, prioritise, and manage key
risks, thereby supporting informed decision-making,
optimal resource allocation, and the timely leverag-
ing of opportunities as they arise.
RISK GOVERNANCE
Our Board of Directors holds overall responsibility
for risk governance. Our Audit Committee, acting on
behalf of the Board, monitors the effectiveness and
design of the Group's risk management framework.
Executive Management is responsible for the
operational execution of risk management, led by
the CEOs of individual business units, who ensure
the implementation of our Risk Management Policy
and Internal Controls framework. A group-wide risk
and control team oversees the execution of risk
mitigation measures, tracks trends and issues within
the control framework, and ensures comprehensive
reporting to the Audit Committee.
RISK
MANAGEMENT
KEY RISKS
Mitigation
We are committed to minimising information
security risks through a comprehensive security
strategy that focuses on compliance and the
development of robust, tailored IT infrastructure.
Significant investments are made in upgrading
technology, enhancing internal expertise,
conducting employee awareness training, and
increasing governance and adherence to infor-
mation security standards. We closely monitor
progress in the implementation of these initiatives
and remain alert towards emerging technologies
and trends that may influence or require integra-
tion into our security protocols.
ECONOMIC
DOWNTURN
Impact
Persistent inflation spikes and interest rate hikes
contributing to a broader economic slowdown,
which adversely impacts customer demand
within the our industry. Rising inflation directly
affects the cost of goods sold, as well as general
operating expenses, while increasing interest
rates significantly drive up the cost of debt. These
factors pose a risk to our short-term strategic
operational plans and market growth objectives.
Mitigation
We have greater exposure in the Renovation,
Maintenance, and Improvement (RMI) market,
that has shown more resilience compared to new
builds. Over the past year, we have activated
pre-established economic contingency plans
across all business units to adapt operations
to the challenging market environment. At the
same time, we have used this period of time to
strengthening our business and positioning it
for future growth when markets recover. Our
Executive Management continuously monitors
market conditions, closely tracks the performance
of our business to secure that actions align
with the latest operational insights and market
developments, thereby ensuring local adaptability
to changing market dynamics.
SUPPLY CHAIN DISRUPTION
AND PRICING MANAGEMENT
Impact
Our supply chain is vulnerable to disruptions from
a range of external factors, including geopolitical
conflicts, material shortages, trade restrictions,
extreme weather events, and logistical challenges.
We prioritise responsible sourcing but may face
difficulties in swiftly substituting key suppliers
and products during disruptive events, potentially
resulting in the loss of product range and market
share.
Mitigation
We source the major part of our products from
countries that are close to the markets where we
operate, and hence, markets where the risk expo-
sure is low. We maintain close collaboration with
our suppliers and logistics partners to promptly
address concerns and mitigate associated risks.
The Group strives to secure a diverse base of
alternative suppliers to ensure product availability
and uninterrupted service to customers. Enhanced
screening and monitoring of supplier performance
and product quality are central to identifying and
addressing potential concerns in a timely manner.
Effective communication with vendors, along
with reinforced inventory management practices,
is crucial to managing sourcing processes and
mitigating the risk of supply shortages.
INFORMATION SYSTEMS
AND CYBER RISK
Impact
Our operations depend on secure, reliable, and
accessible data across all entities. As the Group's
digital footprint grows, risks related to cybersecu-
rity are amplified by technological advancements
and geopolitical tensions. Disruptions in key
information systems, vulnerabilities, human error,
or data breaches could severely impact daily
operations, customer service, and lead to reputa-
tional harm.
STARK GROUP A/S – Annual Report 2024
18
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Financial
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Consolidated
financial
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Parent
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financial
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Management
OUR
PERFORMANCE
How did our business perform financially and in terms of
sustainability? Despite macroeconomic headwinds, we achieved
continued net sales growth, driven by acquisitions from the
previous year. While we managed our costs effectively, earnings
were pressured by weak demand.
We made solid progress towards our net-zero commitment and
successfully advanced our transformation programme that aims at
positioning our business for growth when markets recover.
Financial overview
Financial review
Sustainability review
Financial review by segments
Statement of financial position
Cash flow statement
Outlook
STARK GROUP A/S – Annual Report 2024
19
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Financial
statements
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financial
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Management
STARK GROUP A/S – Annual Report 2024
FINANCIAL
OVERVIEW
EUR million 2023/24 2022/23
2
2021/22 2020/21
1
INCOME STATEMENT
Net sales
Gross profit
EBITDA
Adjusted EBITDA
Depreciation and amortisation of non-current assets
EBIT
3
Financial items, net
Earnings before tax
Net earnings
BALANCE SHEET
Total assets
Intangible non-current assets
Tangible non-current assets
Investments in property, plant and equipment
Equity
Capital expenditure (Capex), total
Net Capex, total
Operational Capex, base
Operational Capex, development
CASH FLOW
Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Total cash flow
KEY RATIOS
Gross profit margin
EBITDA margin
Adjusted EBITDA margin
1. 2020/21 includes 3 months of operating activities for STARK Group from the
acquisition on 4 May 2021.
2. 2022/23 includes 5 months of operating activities for STARK UK from the
acquisition on 28 February 2023.
3. EBIT in 2022/23 includes bargain purchase gain of EUR 205 million. The bargain
purchase gain is presented in a separate line in the consolidated income
statement after EBITDA.
For glossary and calculation of key figures and financial ratios disclosed in
the Annual Report please refer to note 1.2 Group accounting policies in the
consolidated financial statements.
STARK GROUP A/S – Annual Report 2024
20
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Business
Financial
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Management
We delivered another year of solid performance despite
market headwinds.
In the financial year 2023/24, STARK Group delivered net
sales growth of 10.3% and an adjusted EBITDA of EUR 372
million.
During the past year, net sales grew by
10.3% to EUR 7,780 million, compared to
EUR 7,054 million in the previous year. The
full-year impact of our acquisition of STARK
UK impacted net sales positively, while
positive currency translations from British
pound sterling (GBP) and negative ones from
Swedish and Norwegian Kroner had a total
negative impact of 0.3%. Organic growth
declined by 10.2%.
Weak demand and adverse pricing effect
negatively impacted organic net sales, with
two-thirds of this decline attributable to
demand and one-third to pricing.
Throughout the financial year, markets and
activity levels remained weak, continuing the
trend first observed in the third quarter of
the previous financial year. Across markets,
the SME customer segment and collect
business from our branch network showed
some resilience due to their better position-
ing in the RMI market.
Direct sales, which are more often related
to large accounts and the new-build market,
decreased significantly more compared to
collect sales. Due to their greater exposure
to large accounts and direct sales, STARK
Germany and Austria accounted for nearly
half of the Group’s net sales decline.
The deflation impact on several categories
continued into the past financial year. Market
dynamics varied across our segments, with
the deflation impact being more significant
in the first half of the year and less, but still
negative, in the second half.
FINANCIAL REVIEW
GROUP
ADJUSTED INCOME STATEMENT
EUR milion Reported Nonrecurring Adjusted Reported Nonrecurring Adjusted
Net sales
Cost of sales
Gross profit
Gross profit margin % pp
Staff costs
Other expenses
Total operating expenses
Other income and expenses
EBITDA
EBITDA margin % pp
To better understand the underlying performance an adjusted summary income statement with comparisons for STARK Group is included above.
The income statement has been adjusted to exclude non-recurring items, mainly related to acquisitions and integration of acquisitions as well as restructuring activities.
To supplement the adjusted income statements, adjusted segment summary income statements for the three segments, Nordics, Germany & Austria and United Kingdom (UK), have
also been included.
NET SALES
EURm
ADJUSTED EBITDA
EURm
Continues
2023/24
2022/23
10.3%
2023/24
2022/23
-18.4%
STARK GROUP A/S – Annual Report 2024
21
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Business
Financial
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Consolidated
financial
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Parent
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financial
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Management
million the previous year. This was largely driven by
acquisitions, which contributed 25% to this increase.
On a like-for-like basis, staff costs were 1.1% lower
than the previous year.
Adjusted other operating expenses increased by 22.5%
to EUR 578 million, with the acquisition of STARK UK
contributing 35% to this increase. Despite inflation
across most cost categories, organic development
improved 12%, primarily due to cost-reduction
measures and, to a lesser extent, variable costs that
fluctuate with activity levels.
On a like-for-like basis, operating expenses decreased
by 5% compared to the previous year, despite signif-
icant inflationary pressures on staff costs and other
operating expenses.
OTHER OPERATING INCOME AND EXPENSES
Other operating income and expenses consist of
gains and losses from sales of intangible and tangible
non-current assets. The net gain in 2023/24 of EUR
35 million (2022/23: net gain of EUR 3 million) was
primarily related to sales of properties driven by the
ongoing network optimisation in the UK.
EBITDA
Adjusted EBITDA decreased by 18.4% to EUR 372
million, down from EUR 456 million the previous year.
The acquired STARK UK business improved its margin
from 2.7% to 3.6%, contributing an additional EUR
57 million due to enhanced profitability and an extra
seven months of operations.
However, these gains and cost measures implemented
group-wide in the current and previous years were
STARK UK, acquired in the previous financial year,
supported the past year’s net sales with an additional
seven months of contribution to net sales compared
to the prior year. The business’ contribution increased
by EUR 1,296 million, reaching a total of EUR 2,449
million.
GROSS PROFIT AND GROSS MARGIN
Adjusted gross profit increased by 12.8% to EUR 2,043
million, driven by growth in net sales, which was
supported by our acquisition in the UK. The adjusted
gross margin increased by 0.6 pp. to 26.3%.
Managing the gross margin was challenging in a defla-
tionary market where demand and activity levels were
volatile and weak throughout the year. We maintained
our focus on effective price and inventory manage-
ment, strategic sourcing initiatives with support from
own brands and growing our share of sales to SME
customers to safeguard margins.
Gross margin levels vary across our markets, with
the UK market being more favourable compared to
others. The gross margin was supported by STARK UK
accounting for a larger share of our net sales.
OPERATING EXPENSES
Operating expenses were effectively managed due to
a strong emphasis on cost discipline and streamlining
operations.
Adjusted operating expenses increased by 23.4% to
EUR 1,675 million, primarily driven by acquisitions,
which adversely impacted by 29% to this increase.
Managing staff costs proved challenging due to wage
inflation and union-agreed tariffs. Adjusted staff costs
rose by 24.0% to EUR 1,097 million, up from EUR 885
Financial Review
TAXES
Income tax was an income of EUR 29 million (previous
year: expense of EUR 12 million) with an effective
tax rate of 13% (previous year: 8%). Effective tax in
2023/24 was especially impacted by limitation of
interest deduction and change in valuation of net tax
assets. Effective tax rate in 2022/23 was impacted by
limitation of interest deduction and non-deductible
M&A costs and by the bargain purchase gain of EUR
205 million with no related tax.
NET EARNINGS
Net earnings for 2023/24 were negative at EUR 201
million (previous year: profit of EUR 144million). The
results for the year benefited from the inclusion of an
additional seven months of performance from the UK,
as well as a range of initiatives aimed at strengthening
and optimising the business in anticipation of future
growth. Net earnings were also impacted by the soft
market conditions affecting net sales and gross profit
in combination with rising interest rates. The prior
year’s net earnings were positively impacted by a one-
time recognition of a bargain purchase gain of EUR
205 million related to the UK acquisition.
OTHER COMPREHENSIVE INCOME
Other comprehensive income was a loss of EUR 11
million (2022/23: gain of EUR 26 million) and consisted
of a net loss of EUR 1 million (2022/23: gain of EUR
9 million) related to exchange gains from translation
of foreign operations and a net loss of EUR 11 million
(2022/23: gain of EUR 17 million) from actuarial
valuation of retirement benefit plans.
insufficient to offset the significant negative impact
on gross profit from weak demand and adverse pricing
effects on organic net sales growth.
DEPRECIATION AND AMORTISATION
Depreciation and amortisation amounted to EUR
335 million for the year, reflecting depreciation and
amortisation of tangible and intangible assets of EUR
142 million and EUR 193 million related to right-of-use
assets (IFRS 16). The level of depreciation and amorti-
sation is impacted by fair value assessment of tangible
assets and recognition of intangible assets from the
acquisition of STARK Group as of 4 May 2021 as well
as the acquisition of STARK UK as of 28 February
2023.
FINANCIAL ITEMS, NET
Financial items for the year amounted to a net expense
of EUR 221 million compared to EUR 197 million in the
previous year.
The main components were interest expenses on
financing from related parties of EUR 132 million
(previous year: EUR 84 million) and interest expenses
on financing from third parties amounting to EUR 32
million (previous year: EUR 15 million). Calculated
interest expenses on leasing liabilities amounted
to EUR 44 million (previous year: EUR 27 million).
Foreign exchange gains amounted to EUR 9 million
(previous year: loss of EUR 49 million) mainly related
to exchange differences on financing from related
parties.
In general, financial expenses were impacted by
financing in relation to acquisitions and increases in
effective interest levels during the year.
22
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Business
Financial
statements
Consolidated
financial
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Parent
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financial
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Management
STARK GROUP A/S – Annual Report 2024
As an industry leader and responsible
corporate citizen, we have significantly
enhanced our ESG performance in
recent years. Our Sustainability Report
2024 offers comprehensive insights into
our ESG initiatives and progress.
0
30,000
60,000
90,000
120,000
FY20
(Baseline)
FY23 FY24
Target 2024 Target 2027
CARBON SCOPE &
Absolute tCO
2
e
GROUP
Continues
STARK GROUP A/S – Annual Report 2024
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financial
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Management
Sustanability Review
SUSTAINABILITY REPORT
Our sustainability initiatives are detailed in the separate
Sustainability Report 2024. The report represents the statutory
corporate social responsibility statement and the statutory data
ethics statement of our Group as required according to EU Directive
2014/95/EU and Sections 99a and 99d of the Danish Financial
Statements Act.
STARKGROUP.DKPUBLICATIONS
SUSTAINABILITY OVERVIEW
Baseline has been restated to include M&As according to our accounting principles
Fixed currency rates as of baseline year
Baseline year for GHG Scope Indirect emissions
The target has remained from and stands at towards
2023/24 2022/23 2021/22 2020/21 2019/20 Target 2027
CARBON Baseline
GHG Scope 1&2 (absolute tCO
2
e)
1
93,783 93,992 98,173 99,381 116,586 -29.4%
GHG Scope 1 (absolute tCO
2
e)
1
74,384 80,989 82,721 83,793 87,245 -29.4%
GHG Scope 2 (absolute tCO
2
e)
1
19,399 13,003 15,452 15,588 29,341 -29.4%
GHG Scope 3: Indirect emissions (absolute MtCO
2
e)
1
4.15 4.39
3
-14.3%
WASTE
Total waste (t/mEUR net sales)
2
5.9 5.2 5.1 5.3 6.7 -20%
HEALTH AND SAFETY
Injury rate (per 1 million worked hrs) 4.4 5.6 7.9 8.8 8.0 5.7
Lost workday rate (per 1 million worked hrs) 96.0 52.7 81.2 64.3 64.3 40
EMPLOYEE ENGAGEMENT
Employee engagement survey score (satisfaction & motivation) 71 74 74 74 75 76
Employee engagement survey score (loyalty) 80 80 80 83 - 82
STARK Group Participation rate (%) 82 82 83 81 91 85
TOPTIER PERFORMANCE
ON SUSTAINABILITY
24
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
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Parent
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financial
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Management
Our Nordic business delivered another year of good
performance, benefiting from greater exposure to the
more resilient RMI market.
Despite facing market headwinds from weak demand and
deflation, our Nordic business strengthened its leading
position by gaining significant market share. The Nordics
contributed nearly half of our Group’s EBITDA.
after the war in Ukraine broke out, but began
recovering late in the second half of the past
financial year.
Significant market share gains were insuf-
ficient to offset overall weak demand and
price deflation. The 7.4% decrease in organic
net sales was equally attributable to volumes
and pricing.
Managing the gross margin was challenging
in a deflationary market with overall declin-
ing volumes and particularly weak demand in
several higher-margin categories. Gross profit
ended at EUR 742 million, a decline of EUR
73 million compared to the previous year.
Wage inflation and union-agreed tariffs were
mitigated by an emphasis on cost discipline
and streamlining operations. While staff
costs increased by 1.1%, other operating
expenses decreased by 5.3%. Overall,
operating expenses decreased by 1.1% to EUR
561 million.
The reduction in operating expenses did not
fully offset the decrease in net sales and
gross profit. Adjusted EBITDA was EUR 182
million (EUR 249 million in the previous year),
resulting in an EBITDA margin of 6.5%.
During the past financial year, reported net
sales were EUR 2,808 million, a decline of
8.1%. There was a negative currency impact of
1.5% from the Swedish and Norwegian Kroner.
The Nordic markets have developed
differently throughout the recent market
slowdown. Denmark and Sweden benefitted
from significant market share gains and
greater exposure to the RMI market. These
two markets experienced weak demand
throughout the year but recovered early and
late in the second half, respectively. Finland
has experienced as significant decline in
net sales since the summer of 2022, soon
ADJUSTED SEGMENT INCOME STATEMENT NORDICSSHARE OF GROUP NET SALES
EURm
SHARE OF GROUP'S ADJ. EBITDA
EURm
NORDICS
FINANCIAL REVIEW BY SEGMENTS
EUR milion %
Net sales
Cost of sales
Gross profit
Gross profit margin %
pp
Staff costs
Other expenses
Total operating expenses
Other income and expenses
EBITDA
EBITDA margin %
pp
Nordics Group total
2024
2023/24
2022/23
2023/24
2022/23
STARK GROUP A/S – Annual Report 2024
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FINANCIAL REVIEW BY SEGMENTS
Our Germany and Austria business faced strong head-
winds from the German macroeconomic environment.
With greater exposure to the new-build segment, the
adverse impact on net sales was significant.
Despite weak demand and deflation across several
categories, our Germany and Austria business managed
to mitigate high inflation levels on its cost base, resulting
in a slight improvement of 0.4% in operating expenses.
Germany and Austria delivered an EBITDA of EUR 102
million.
GERMANY & AUSTRIA
Managing the gross margin was challenging
in a deflationary market with declining vol-
umes. The gross margin was 24.1%, compared
to 24.0% in the previous year. Lower net sales
due to weak demand resulted in a gross
profit of EUR 607 million, an 11.1% decrease
compared to the previous year.
Emphasis on cost discipline and streamlining
operations took priority to offset wage
inflation and union-agreed tariffs, particu-
larly in Germany. While staff costs increased
by 1.5%, other operating costs decreased by
4.3%. Overall, operating expenses decreased
by 0.4% to EUR 506 million.
Adjusted EBITDA was EUR 102 million
compared to EUR 176 million in the previous
year, resulting in an EBITDA margin of 4.0%.
Reported net sales were EUR 2,523 million,
a decrease of 11.3%. Weak demand observed
after the third quarter of our financial year
2022/23 persisted into the past financial
year, significantly impacting net sales.
Our German and Austrian operations, which
are more reliant on large accounts and
direct sales linked to the new-build market,
experienced the most substantial decline, as
the new-build sector has not shown the same
resilience as the RMI market. The majority of
the decrease was volume-related, with the
remaining one-fifth due to pricing.
ADJUSTED SEGMENT INCOME STATEMENT GERMANY & AUSTRIASHARE OF GROUP NET SALES
EURm
EUR milion %
Net sales
Cost of sales
Gross profit
Gross profit margin %
pp
Staff costs
Other expenses
Total operating expenses
Other income and expenses
EBITDA
EBITDA margin %
pp
Germany & Austria Group total
2023/24
2022/23
2023/24
2022/23
SHARE OF GROUP'S ADJ. EBITDA
EURm
STARK GROUP A/S – Annual Report 2024
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SHARE OF GROUP NET SALES
EURm
FINANCIAL REVIEW BY SEGMENTS
UNITED KINGDOM
Our UK business is well into its strategic and financial
turnaround following the acquisition in March 2023, with
results reflecting the first full 12 months of operations as
part of STARK Group.
Despite weak demand, price deflation and platform
consolidation, our UK business has successfully restored
gross margins and significantly improved profitability
through its turnaround initiatives. The UK improved its
margin by 0.9 pp. to 3.6% and delivered an EBITDA of EUR
88 million.
On a like-for-like basis, net sales declined by
some 8%. Approximately two-thirds of this
decline was volume-related, while one-third
was due to pricing.
Gross profit ended at EUR 694 million, an
improvement of EUR 381 million due to
the additional seven months of operations
and better price management following
depressed gross margins in the previous
year. The gross margin increased by 1.2% pp.
to 28.3%.
Operating expenses on a 12 month basis
increased to EUR 608 million. Underlying
operating expenses decreased by 10.5%. This
improvement was due to a comprehensive
cost-out programme related to the financial
turnaround of the business, which more than
compensated for high inflation levels on
wages and other expenses.
The cost-out programme and improved gross
margins resulted in higher profitability for
the year. Adjusted EBITDA increased by EUR
57 million to EUR 88 million, resulting in an
EBITDA margin of 3.6%.
Reported net sales were EUR 2,449 million,
including a positive impact from an addi-
tional seven months of operations and a
positive currency translation impact of 2.0%
from British pounds sterling.
As a newly acquired business, STARK UK
is undergoing a significant financial and
strategic turnaround. The platform is being
refined to meet the needs of SME tradespeo-
ple in the more resilient RMI market. Loss-
making and sub-scale branches are being
consolidated into larger ones, while some are
being closed and divested to free up cash for
investments in the platform transformation.
ADJUSTED SEGMENT INCOME STATEMENT UNITED KINGDOM
The UK segment is included with five months of operations in 2022/23 (Mar-Jul)
SHARE OF GROUP'S ADJ. EBITDA
EURm
EUR milion
Net sales
Cost of sales
Gross profit
Gross profit margin %
Staff costs
Other external operating expenses
Total operating expenses
Other income and expenses
EBITDA
EBITDA margin %
United Kingdom Group total
2023/24
2022/23
2023/24
2022/23
STARK GROUP A/S – Annual Report 2024
27
Introduction
Our
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Business
Financial
statements
Consolidated
financial
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Parent
company
financial
statements
Management
STATEMENT OF FINANCIAL POSITION
INTANGIBLE ASSETS
Total intangible non-current assets amounted to EUR
1,828 million as of 31 July 2024 (31 July 2023: EUR
1,814 million) and consisted primarily of goodwill, trade
names and customer relations identified in connection
with acquisitions.
Additions during the year mainly related to goodwill
and intangibles recognised on acquired businesses
and investments in software of EUR 34 million.
TANGIBLE ASSETS
Total tangible non-current assets amounted to EUR
2,325 million as of 31 July 2024 (31 July 2023: EUR
2,318 million). The amount was primarily related to
owned properties, which amounted to EUR 1,154
million (31 July 2023: EUR 1,155 million) and in addition
EUR 925 million (31 July 2023: EUR 891 million) has
been recognised as right of use assets (primarily
leased properties). Capital expenditure during the year
amounted to EUR 114 million (in previous year: EUR 79
million).
CAPITAL EXPENDITURE CAPEX
During the financial year, the Group continued to
invest in and expand the branch network to support
growth.
Total capital expenditure was EUR 148 million
(2022/23: EUR 108 million), of which EUR 81 million
was related to operational CAPEX and EUR 67 million
was related to freehold investments. The level for
operational CAPEX was EUR 10 million higher than
last year, driven mainly by increased investments in IT
and equipment. In relation to freehold investments, the
Group expanded and upgraded strategic locations in
the branch network.
Net CAPEX for the year was EUR 55 million (2022/23:
EUR 94 million) as the Group continued its network
optimisation and divested properties and other assets
with a total positive cash impact of EUR 93 million
(2022/23: EUR 14 million).
WORKING CAPITAL
Trade working capital (inventories, trade receivables
less trade payables) for the Group was EUR 477 million
as of 31 July 2024 (31 July 2023: EUR 572 million). The
decrease in working capital was driven by a decline in
trade receivables and inventory and increased trade
payables.
Developments in other working capital components
were in accordance with expectations and in line with
the performance of the business.
EQUITY
Equity was EUR 644 million as of 31 July 2024
compared to EUR 858 million as of 31 July 2023. The
decrease of EUR 214 million can primarily be attributed
to the net result for the period of negative EUR 201
million and other comprehensive income of negative
EUR 11 million. Dividend to non-controlling interests
amounted to EUR 2 million, which has been partly paid
out.
The Company and its subsidiaries did not acquire any
of its own shares during the period ended 31 July 2024,
and the Company and its subsidiaries do not hold own
shares as of 31 July 2024.
CASH FLOW STATEMENT PARENT COMPANY,
STARK GROUP AS
OPERATING ACTIVITIES
Operating activities generated a positive cash flow
of EUR 114 million (in previous year: EUR 311 mil-
lion). The decrease in the cash inflow was primarily
driven by positive effects from effective working
capital management not being able to offset
lower EBITDA as a result of challenging markets
in combination with higher interest payments due
to increasing effective interest levels. In addition
tax payments were EUR 20 million higher than in
the previous year as a delayed consequence of the
extraordinary performance in previous years.
INVESTING ACTIVITIES
Investing activities during the year amounted to
a net cash out flow of EUR 83 million (in previous
year: EUR 673 million). The decrease was mainly
related to a decrease in cash used for acquisitions
(2023/24: EUR 28 million, 2022/23: EUR 579
million). Net investments in tangible and intangible
non-current assets amounted to EUR 55 million
(2022/23: EUR 94 million).
FINANCING ACTIVITIES
Net cash flow from financing activities amounted
to an outflow of EUR 97 million (in previous year:
inflow of EUR 424 million). The cashflow for the
previous year was impacted by a net cashflow
from borrowings of EUR 537 million compared
to a net cashflow from borrowings in 2023/24 of
EUR 16 million. In 2023/24, a change in utilisation
of revolving credit facilities had a positive impact
of EUR 55 million. Instalments on leasing debt
increased to EUR 166 million from EUR 113 million
in the previous year.
The parent company income statement includes
normal activities in relation to the operations
of STARK Group headquarters. Costs related to
operating the subsidiaries have been recharged to
these companies and is recognised as net sales in
the income statement.
In 2022/23, the parent company incurred signifi-
cant expenses related to M&A activities due to the
acquisition of STARK UK. No significant
M&A related expenses have been incurred in
2023/24, which is the primary driver of the
decrease in other external operating expenses
from EUR 23 million in 2022/23 to EUR 5 million in
2023/24.
In 2023/24, the investment in STARK Suomi Oy has
been impaired by EUR 12 million and the impair-
ment made in 2022/23 of EUR 12 million related to
Neumann Bygg AS has been reversed. Additions to
investments in subsidiaries in 2023/24 of EUR 406
million relates to capital contributions to
subsidiaries as part of normal ongoing manage-
ment of capital structures across the group.
No other unusual items or transactions occurred
during the year.
STARK GROUP A/S – Annual Report 2024
28
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Challenging macroeconomics and geopolitical unrest
are likely to persist. Still, the impact on our industry
will decrease as market fundamentals, including
population growth, urbanisation, as well as energy
efficiency and sustainability, call for revitalised growth.
For the financial year 2024/25, we anticipate continued
weak demand and price deflation to persist into the
first half with a gradual recovery in market conditions
during the second half, in line with leading economic
forecasts. Price volatility is expected to stabilise over
the year, with volumes remaining stable in the first half
and showing a moderate upward trend in the second
half.
We expect to partially mitigate inflationary pressures
on our cost base through stringent cost discipline and
streamlined operations, alongside positive run-rate
effects from initiatives implemented in 2023/24.
For EBITDA, we anticipate positive underlying
developments in 2024/25, driven by market recovery,
incremental gross margin improvements, and emphasis
on cost discipline.
OUTLOOK
EUR billion EUR million
Net sales in the range of
EBITDA in the range of
..
THE GROUP EXPECTS TO DELIVER THE FOLLOWING FOR
STARK GROUP A/S – Annual Report 2024
29
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
STARK GROUP A/S – Annual Report 2024
MANAGEMENT
We have initiated the formation of an external board of directors,
led by a new independent chair. Meet our chair and executive
management team, including our new Group CFO, who joined
STARK Group in September 2024.
Executive Management and Chair of the Board of Directors
STARK GROUP A/S – Annual Report 2024STARK GROUP A/S – Annual Report 2024
30
Introduction
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Our
performance
STARK GROUP A/S – Annual Report 2024
EXECUTIVE
MANAGEMENT
CHAIR OF
THE BOARD OF
DIRECTORS
THOMAS AHLE
Group CFO
Born in 1971
Danish nationality
Thomas Ahle became CFO of STARK Group in September 2024. Prior he
held the position of CFO at Danish Crown (2020-2024) and has previ-
ously held various positions in Refresco (2014-2020) and Lantmännen
Unibake (2010-2014). Thomas Ahle has an MSc in Economics from Aarhus
University and an MBA in Strategic Management and Leadership from the
Scandinavian International Management Institute (SIMI).
SØREN P. OLESEN
Group CEO
Born in 1967
Danish nationality
Søren P. Olesen was appointed CEO of STARK Group in November 2016.
Previously, he held the position of CEO at STARK Danmark (2014-2016).
Søren P. Olesen joined the Group from a position of CEO at Flügger Group
A/S (2007-2013). Søren P. Olesen holds a Master of Arts (Econ) from
Limburg Rijksuniversiteit, the Netherlands, and a Master of Science in
Economics from Aalborg University, Denmark.
Selected board positions
Søren P. Olesen holds board positions in Hempel A/S, and Industriens
Arbejdsgivere i Danmark.
JENS BJØRN ANDERSEN
Chair
Born in 1966
Danish nationality
Jens Bjørn Andersen was appointed Chair of the Board in June 2024. He
previously served as CEO of DSV A/S (2008-2024), a leading transport and
logistics company, having joined the company in 1988.
Selected board positions
Jens Bjørn Andersen holds board positions in the Danish Central Bank
(Nationalbanken), Unicef Denmark as well as Danish Childrens’ Cancer
Association, and chairs two philanthropic foundations: Nordea Fonden
and Tietgenfonden.
STARK GROUP A/S – Annual Report 2024STARK GROUP A/S – Annual Report 2024
31
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Business
Financial
statements
Consolidated
financial
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Parent
company
financial
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Management
CONSOLIDATED
FINANCIAL
STATEMENTS
Income Statement
Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Cash Flow Statement
NOTES
BASIS OF REPORTING
Basis of reporting
Group accounting policies
Key accounting estimates
and judgements
INCOME STATEMENT
Net sales
Staff costs
Financial income and expenses
Taxation
INVESTED CAPITAL
Acquisitions of businesses
Intangible assets
Tangible noncurrent assets
Leases
Impairment review
WORKING CAPITAL AND PROVISIONS
Inventories
Trade receivables
Provisions
CAPITAL STRUCTURE AND FINANCING
Share capital and share premium
Dividend
Borrowings
Financial instruments
risk management policies
OTHER FINANCIAL NOTES
Deferred tax assets and liabilities
Employee benefit obligations
Cash flow adjustments and reversals
Cash flow changes in working capital
Contingent liabilities
Fee to statutory auditors
Securities
Related parties
Subsequent events
List of Group companies
Reports
Introduction
Business
Our
performance
Management
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
33
INCOME STATEMENT COMPREHENSIVE INCOME
EUR million Note 2023/24 2022/23
Net sales 2.1 7,780 7,054
Cost of sales 4.1 (5,739 ) (5,243 )
Gross Profit 2,041 1,811
Staff costs 2.2 (1,135 ) (903 )
Other external operating expenses (615 ) (520 )
Other operating income and expenses 35 3
Earnings before interest, tax, depreciation and amortisation (EBITDA) 326 391
Depreciation and amortisation of non-current assets 3.2/3.3/3.4 (335 ) (243 )
Bargain purchase gain 3.1 - 205
Earnings before interest and tax (EBIT) (9 ) 353
Financial income and expenses 2.3 (221 ) (197 )
Earnings before tax (230 ) 156
Income tax 2.4 29 (12 )
Net earnings (201 ) 144
Net earnings is attributable to:
Shareholders in Stark Group A/S (201 ) 141
Non-controlling interests 0 3
Total (201 ) 144
EUR million Note 2023/24 2022/23
Net earnings (201 ) 144
Other comprehensive income/(loss):
Items that may be reclassified subsequently to profit or loss:
Exchange gain/(loss) on translation of foreign operations (1 ) 9
Items that will not be reclassified to profit or loss:
Actuarial gain/(loss) on retirement benefit plans 6.2 (13 ) 19
Tax on actuarial gain/(loss) on retirement benefit plans 6.2 3 (2 )
Other comprehensive income/(loss) (11 ) 26
Total comprehensive income/(loss) (212 ) 170
Total comprehensive income is attributable to:
Shareholders in Stark Group A/S (212 ) 167
Non-controlling interests 0 3
Total (212 ) 170
STARK GROUP – Annual Report 2024
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STATEMENT OF FINANCIAL POSITION
ASSETS EQUITY AND LIABILITIES
EUR million Note
31 July
2024
31 July
2023
Non-current assets
Goodwill 3.2 831 825
Other intangible assets 3.2 997 989
Total intangible non-current assets 1,828 1,814
Property 3.3 1,154 1,155
Plant and equipment 3.3 180 174
Non-current tangible assets under construction 3.3 66 98
Right of use assets 3.4 925 891
Total tangible non-current assets 2,325 2,318
Investment in joint ventures 4 1
Other non-current financial assets 17 25
Total financial non-current assets 21 26
Total non-current assets 4,174 4,158
Current assets
Inventories 4.1 1,052 1,087
Trade receivables 4.2 787 823
Corporate tax receivables 27 11
Other receivables 49 50
Prepayments 37 21
Cash and cash equivalents 242 307
Total current assets 2,194 2,299
Total assets 6,368 6,457
EUR million Note
31 July
2024
31 July
2023
Equity
Share capital 5.1 2 2
Reserves 634 846
Equity, shareholders in STARK Group A/S 636 848
Non-controlling interests 8 10
Total equity 644 858
Non-current liabilities
Leasing liabilities 3.4 761 714
Deferred tax liabilities 6.1 295 322
Provisions 4.3 95 148
Employee benefit obligations 6.2 87 71
Loans from related parties 5.3 / 6.8 2,292 2,253
Borrowings 5.3 147 143
Total non-current liabilities 3,677 3,651
Current liabilities
Leasing liabilities 3.4 173 146
Provisions 4.3 38 21
Loans from related parties 5.3 / 6.8 15 6
Borrowings 5.3 104 28
Payables to related parties 31 31
Trade payables 1,362 1,338
Corporate tax payables 15 43
Other liabilities 309 335
Total current liabilities 2,047 1,948
Total liabilities 5,724 5,599
Total equity and liabilities 6,368 6,457
STARK GROUP – Annual Report 2024
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financial
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Management
Reports
STATEMENT OF CHANGES IN EQUITY
Reserves
Equity,
shareholders
in STARK
Group A/SEUR million Share capital
Translation
reserve
Retained
earnings
Non-
controlling
interests Total equity
Balance as of 1 August 2023 2 8 838 848 10 858
Comprehensive income/(loss):
Net earnings - - (201 ) (201 ) 0 (201 )
Other comprehensive income/(loss) - (1 ) (10 ) (11 ) - (11 )
Comprehensive income/(loss) - (1 ) (211 ) (212 ) 0 (212 )
Dividend paid - - - - (2 ) (2 )
Balance as of 31 July 2024 2 7 627 636 8 644
Balance as of 1 August 2022 2 (1 ) 680 681 11 692
Comprehensive income/(loss):
Net earnings - - 141 141 3 144
Other comprehensive income/(loss) - 9 17 26 - 26
Comprehensive income/(loss) - 9 158 167 3 170
Dividend paid - - - - (4 ) (4 )
Balance as of 31 July 2023 2 8 838 848 10 858
STARK GROUP – Annual Report 2024
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Financial
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financial
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Management
Reports
CASH FLOW STATEMENT
EUR million Note 2023/24 2022/23
Cash flow from operating activities
Net earnings (201 ) 144
Adjustments and reversals, non-cash 6.3 500 269
Changes in working capital 6.4 62 36
(Decrease)/increase in provisions and other liabilities (31 ) (15 )
Cash flow from operating activities before financial items and tax 330 434
Net interest paid (176 ) (103 )
Tax paid (40 ) (20 )
Cash flow from operating activities 114 311
Cash flow from investing activities
Acquisition of businesses (net of cash acquired) 3.1 (28 ) (579 )
Purchases of property, plant and equipment 3.3 (114 ) (79 )
Proceeds from sale of land, property, plant and equipment 93 14
Purchases of intangible assets 3.2 (34 ) (29 )
Cash flow from investing activities (83 ) (673 )
Free cash flow 31 (362 )
EUR million Note 2023/24 2022/23
Cash flow from financing activities
Change in utilisation of revolving credit facilities 5.3 55 -
Proceeds from borrowings 5.3 23 132
Repayment of borrowings 5.3 (7 ) (14 )
Proceeds from loans from related parties 5.3 - 794
Repayment of loans from related parties 5.3 - (375 )
Payment of dividend to minority interests (2 ) -
Repayment of leasing liabilities 5.3 (166 ) (113 )
Cash flow from financing activities (97 ) 424
Net cash (used)/generated (66 ) 62
Effects of exchange rate changes 1 (16 )
Net increase/(decrease) in cash and cash equivalents (65 ) 46
Cash, cash equivalents, beginning balance 307 261
Cash and cash equivalents, ending balance 242 307
STARK GROUP – Annual Report 2024
37
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Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
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Management
Reports
. BASIS OF REPORTING
Overview of business
The Group was established on 16 December 2020. The Group
completed the acquisition of STARK Group as of 4 May 2021.
STARK Group is a leading business-to-business (“B2B”)
distributor focusing mainly on customers in the resilient and
structurally growing renovation, maintenance and improve-
ment (“RMI”) end-markets within the greater construction
sector across Northern Europe. Following the acquisition of
STARK UK with closing as of 28 February 2023, the business
is divided into three regions: “Nordics” (Denmark, Sweden,
Finland and Norway), “Germany and Austria” (Germany and
Austria) and “UK” (United Kingdom). The UK is included with
5 months of operations in financial year 2022/23 (March-July
2023) and fully included in the financial year 2023/24.
Basis of reporting
The Consolidated Financial Statements have been prepared
in accordance with IFRS (International Financial Reporting
Standards) Accounting Standards as adopted by the
European Union (EU).
The accounting policies are consistent with those applied in
the consolidated financial statements for 2022/23, except
for the changes to accounting standards that were effective
from 1 August 2023 and were endorsed by the EU.
In May 2023, the IASB issued amendments to IAS 12 Income
Taxes, which provides temporary relief from the requirement
to recognise and disclose deferred taxes arising from
enacted or substantively enacted tax law that implements
the Pillar Two Model Rules published by the OECD, including
tax law that implements qualified domestic minimum top-up
taxes. The relief has been applied. The change did not have
any impact on the result or equity for prior or current
financial year. Expected impact from Pillar Two Model rules
is described in note 6.1. Except for this change, the account-
ing principles are unchanged compared to last year.
Management does not anticipate any significant impact on
recognition and measurement in future periods from the
adoption of new or amended standards not yet effective.
A few reclassifications have been made in the comparative
figures. These reclassifications have not had any impact on
the result and the equity. The reclassifications performed are
deemed immaterial.
STARK GROUP – Annual Report 2024
38
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
. GROUP ACCOUNTING POLICIES
A summary of the material accounting policies applied by
the Group in the preparation of the consolidated financial
statements is set out below and together with the notes to
which they relate. The descriptions of accounting policies
in the notes form part of the overall description of the
accounting policies.
Consolidation
The Consolidated Financial Statements include the results
of the Company and its subsidiary undertakings and its
share of the results of its joint ventures, see note 6.10 for list
of subsidiaries.
Subsidiaries are all entities (including structured 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.
Subsidiaries are deconsolidated from the date that control
ceases.
Intra-group transactions and balances and any unrealised
gains and losses arising from intra-group transactions are
eliminated in the consolidated figures.
Foreign currencies
The Consolidated Financial Statements are presented in
Euros which is the presentation currency of the Group. Items
included in the financial statements of each of the Group’s
companies are measured using the currency of the primary
economic environment in which the companies operate (the
“functional currency”).
Cash flow statement
The consolidated statement of cash flows shows cash flows
from operating, investing and financing activities, and the
Group’s cash and cash equivalents at the beginning and end
of the year. Cash flow from operating activities is compiled
using the indirect method starting with net earnings for the
year adjusted for non-cash items, received and paid financial
items, corporate income tax paid and change in working
capital. Cash flow from investing activities comprises
payments relating to the acquisition and sale of companies
and noncontrolling interests, intangible assets, and property,
plant and equipment. Cash flow from financing activities
comprises proceeds from borrowings, repayment of principal
on interest-bearing debt, repayment of lease liabilities and
payment of dividends. Cash and cash equivalents comprises
cash at bank deposits due on demand. Cash flows in foreign
currencies are translated to EUR at the average exchange
rate for the respective years.
OTHER SPECIFIC ACCOUNTING POLICIES
WITHOUT A NOTE REFERENCE
Cost of sales
Cost of sales includes costs for the goods sold and con-
sumed in order to obtain net sales for the year. The Group
enters into arrangements with certain vendors providing
purchase rebates. These purchase rebates are recognised
when earned and are recorded initially as a reduction in the
cost price for the inventory resulting in a reduction in cost of
sales when the related product is sold. The key accounting
estimate is further described in note 1.3 in key accounting
estimates on trade payables.
Other external expenses
Other external expenses comprise operating expenses such
as sales, marketing and distribution costs, costs related to
infrastructure and logistics, and corporate costs.
Other operating income and expenses
Other operating income and other operating expenses
comprise items of a secondary nature to the main activities
of the Group, including gains and losses on the sale of
intangible assets and property, plant and equipment.
Cash and cash equivalents
Cash and cash equivalents include cash in hand and depos-
its held at call with banks. Bank overdrafts are shown within
borrowings in current liabilities to the extent that there is
no legal right of offset and/or no practice of net settlement
with cash balances. Cash, which is not freely available to the
Group, is disclosed as restricted cash.
DEFINITIONS OF TERMS
FINANCIAL RATIOS
Gross profit margin Gross profit as a percentage of net sales
EBITDA margin EBITDA as a percentage of net sales
Adjusted EBITDA margin Adjusted EBITDA as a percentage of net sales
GLOSSARY
Adjusted EBITDA EBITDA excluding non-recurring items
Non-recurring items Items of a material and exceptional nature which are adjusted for to provide a better
understanding of the underlying performance of the Group
Capital expenditure (Capex) Investments in property, plant and equipment and investments in intangible assets
(IT software).
Operational Capex Investments related to the normal business and excludes Freehold Capex
Freehold Capex Capex related to investments in new land/properties as well as upgrades/
refurbishments to existing ones.
Base Capex Capex related to maintaining the normal operations of the business.
Development Capex Capex related to expansion of the business to improve earnings capabilities or secure
compliance.
Net Capex Total Capex minus cash inflow from disposals of non-current tangible and intangible
assets
Trade payables
Trade payables are non-interest bearing and are recognised
initially at fair value and subsequently measured at amor-
tised cost using the effective interest method.
STARK GROUP – Annual Report 2024
39
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
. KEY ACCOUNTING ESTIMATES AND JUDGEMENTS
In the process of applying the Group’s accounting policies,
management makes various accounting judgements and
estimates that form the basis of presentation, recognition
and measurement of the Group’s assets, liabilities, income
and expenses.
The judgements and estimates made are based on historical
experience and other factors that management assesses
to be reliable, but that, by nature, are associated with
uncertainty and unpredictability and may therefore prove
incomplete or incorrect. Should these judgements or
estimates prove incorrect there may be an impact on the
following year’s Consolidated Financial Statements.
The Group believes that the judgements and estimates that
have been applied in these Consolidated Financial State-
ments will not give rise to a material impact within the next
financial year. The judgements or estimates are reviewed on
an ongoing basis.
When determining estimates and assumptions, Management
has assessed the qualitative and quantitative impact of
climate related risks. It is Management’s assessment that
the effects of climate related risks do not significantly
impact estimates and assumptions.
The key accounting estimates and judgements are described
in the note which they relate to. Following key accounting
estimates and judgements have been described in the
related notes:
·
Expected useful life and residual value for non-current
assets (note 3.2)
·
Determining the lease term of contracts with renewal
options in lease contracts where the Group is a lessee
(note 3.4)
·
Judgement in CGU determination and discounted
cashflows estimates (note 3.5)
·
Valuation of inventory (note 4.1)
·
Valuation of expected credit losses on accounts receivable
(note 4.2)
·
Estimates related to provisions for dilapidations (note 4.3)
·
Valuation of defined benefit plans (note 6.2)
OTHER KEY ACCOUNTING ESTIMATE
WITHOUT A NOTE REFERENCE
TRADE PAYABLES
Assessment of supplier rebates (estimates)
The Group enters into agreements with many of its vendors
that provide rebates. Many of these agreements include
thresholds defined based on purchases within a calendar
year rather than the Group’s financial year.
Under certain agreements, the rebate percentage is based
on quantities or values of purchases made. The Group
adjusts the cost of purchases to reflect estimated rebates
receivable, which can depend on the projected volume, value
and mix of purchases from a vendor through to the end of
the qualifying period.
STARK GROUP – Annual Report 2024
40
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Our
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Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
. NET SALES
EUR million 2023/24 2022/23
Sale of goods 7,780 7,054
Total net sales 7,780 7,054
Geographical split:
Nordics 2,808 3,057
Germany & Austria 2,523 2,844
United Kingdom 2,449 1,153
Total net sales 7,780 7,054
The net sales in Denmark, which is the domicile market
of the Group amounted to EUR 1,302m in 2023/24
(2022/23: EUR 1,312m).
. STAFF COSTS
EUR million 2023/24 2022/23
Salaries and wages 947 750
Pensions - contribution plans 57 40
Pensions - defined benefit plans 3 3
Other expenses for social security 128 110
Total staff costs 1,135 903
Compensation for the Executive Management of the Group:
Salaries and wages 3 5
Pensions - contribution plans 0 0
Other expenses for social security 0 0
Total compensation paid to the Executive Management 3 5
2023/24 2022/23
Average number of fulltime employees 19,388 15,302
Number of employees at the end of the financial period 20,238 21,504
Net sales
The Group is a distributor of heavy building materials. The
sold goods are used for building and renovating houses,
offices spaces, community buildings, and infrastructure.
The Group mainly derives its revenues from contracts with
customers for the transfer of goods at a point in time. Net
sales comprise the fair value of consideration received or
receivable for the sale of goods in the ordinary course of
the Group’s activities. Net sales from the sale of goods
for resale and finished goods is recognised in the income
statement when control of the goods has transferred
to the customer, being when the goods are delivered to
the buyer and the amount of net sales can be measured
reliably.
Net sales is recorded net of returns, discounts and value
added taxes.
The members of the Executive Management as well as other
employees are entitled to a cash bonus based on fulfilment
of pre-defined financial and non-financial targets.
Compensation paid to the Board of Directors in the parent
company amounts to EUR 0.1m (2022/23: No compensa-
tion).
The Group has not established share-based incentive
programs.
Staff expenses
Staff expenses comprise wages and salaries as well as
other payroll expenses. Salaries and wages, social security
contributions, holiday and sick leave, bonuses and other
monetary and non-monetary benefits are recognised in
the year in which the employees render the associated
services. Bonus for eligible personnel is recognised based
on the estimated or agreed bonus as of year-end calculat-
ed in accordance with the agreed bonus schemes.
The average number of employees is calculated as average
of the number of employees at the end of each month.
ACCOUNTING POLICIES
§
ACCOUNTING POLICIES
§
1. A new member of the Executive Management was appointed effective from 1 September 2024. The disclosed compensation relates to the Executive
Management as of 31 July 2024.
STARK GROUP – Annual Report 2024
41
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
. FINANCIAL INCOME AND EXPENSES
EUR million 2023/24 2022/23
Financial income:
Foreign exchange gains 9 -
Interest income from third party 2 2
Other financial income 2 1
Total financial income 13 3
Financial expenses:
Interests on loans from related parties (132) (84)
Interests on loans from third party (32) (15)
Amortisation of financing fees (15) (19)
Leases interest (IFRS16) (44) (27)
Interest on financial liabilities measured at amortised costs (223) (145)
Net interest on employee benefit obligations (4) (3)
Unwinding of discount on provisions (5) -
Foreign exchange losses - (49)
Other financial expenses (2) (3)
Total financial expenses (234) (200)
Total financial income/(expenses), net (221) (197)
STARK GROUP – Annual Report 2024
42
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
. TAXATION
EUR million 2023/24 2022/23
Current tax 0 35
Deferred tax (13) (23)
Adjustment of current tax regarding previous years (5) 2
Adjustment of deferred tax regarding previous years (11) (2)
Total income tax for the year (29) 12
Tax on items charged/(credited) to the statement of other comprehensive income:
Deferred tax charge/(credit) on actuarial gain/loss on retirement benefit plans (3) 5
Total tax on items charged/(credited) to other comprehensive income (3) 5
2023/24 2022/23
%
EUR
million %
EUR
million
Tax reconciliation:
Corporation tax rate in Denmark 22% (51) 22% 34
Adjustment of calculated tax in foreign Group entities relative to 22% 3% (7) 3% 5
Non-deductible expenses -5% 12 6% 10
Non-taxable income 3% (6) -28% (45)
Change in valuation of net tax assets -10% 22 6% 10
Non-deductible interest expenses -7% 17 7% 11
Adjustment relating to prior year 7% (16) 0% 0
Other 0% 0 -8% (13)
Tax rate on profit before tax 13% (29) 8% 12
Taxation
The tax expense included in the consolidated income
statement consists of current and deferred tax.
Current tax is the expected tax payable on the taxable
income for the year, using tax rates enacted or substan-
tively enacted at the balance sheet date. Tax expense is
recognised in the consolidated income statement except
to the extent that it relates to items recognised in the con-
solidated statement of comprehensive income or directly
in the consolidated statement of changes in equity.
Current tax receivables and liabilities are recognised in
the balance sheet at the amount calculated on the basis
of the expected taxable income for the year adjusted for
tax prepayments.
Tax receivables and liabilities are offset to the extent that
there is legal right to set-off, and items are expected to be
settled net or simultaneously.
ACCOUNTING POLICIES
§
STARK GROUP – Annual Report 2024
43
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
. ACQUISITIONS OF BUSINESSES
ACQUISITIONS IN FINANCIAL YEAR
In March 2023, STARK Group signed an agreement to
acquire the family owned Schilowsky Baumarkt und
Baustoffhandel KG in Austria. The acquisition will increase
STARK Group’s presence in Austria’s largest cities. The
consideration amounted to EUR 27m net of cash on balance
sheet. Closing took place as of 1 August 2023.
In April 2024, STARK Group acquired Odin Flissenter AS. The
consideration amounted to EUR 1m net of cash on balance
sheet. Closing took place as of 2 May 2024.
Following recognition of acquired identifiable assets and
liabilities at their fair values, the goodwill related to the
acquisitions in 2023/24 amounted to EUR 9m. The recog-
nised goodwill represents primarily the value of the staff and
expected synergies from combining the acquired entities
with the existing STARK Group activities. The goodwill is not
deductible for tax purposes.
The acquisitions in total contributed with EUR 108m to the
Net sales.
Transaction and acquisition costs incurred in 2023/24
amounts to EUR 1m which are recognised as part of Other
external operating expenses.
ACQUISITIONS IN FINANCIAL YEAR
STARK UK
In December 2022, STARK Group signed an agreement with
Compagnie de Saint-Gobain SA to acquire Saint-Gobain
Building Distribution Ltd. (“SGBDUK“). Closing took place
as of 28 February 2023. The consideration amounted to EUR
484m net of cash on balance sheet.
The acquisition of SGBDUK resulted in a negative goodwill of
EUR 205m, which in accordance with IFRS was recognised
in the consolidated income statement as a bargain purchase
gain in financial year 2022/23. The bargain purchase gain
was assessed to have arisen due to the low historical
financial performance of the acquired entity combined with a
need for investments and significant efforts from the Group
to implement a new strategy and operating model to support
a turn-around of the entity.
Other acquisitions
During the financial year 2022/23 other minor acquisitions
were completed. Total net consideration was EUR 95m,
which was financed with existing available facilities.
Goodwill related to the acquisitions in 2022/23 was totally
measured at EUR 41m. The recognised goodwill represented
primarily the value of the staff and expected synergies from
combining the acquired entities with the existing STARK
Group activities. The goodwill is not deductible for tax
purposes.
Transaction and acquisition costs incurred in 2022/23
amounted to EUR 25m which were recognised as part of
Other external operating expenses and are part of total
non-recurring items.
The fair values of the identifiable assets and liabilities acquired as of the acquisition dates and the consideration for the
acquisitions closed and taken over are as follows:
2023/24 2022/23
EUR million Germany Nordics Total UK Others Total
Customer relationships 17 - 17 - 35 35
Trade names 3 - 3 - 1 1
Other intangible assets 6 - 6 0 0 0
Property, plant and equipment 2 0 2 512 14 526
Right of use assets 11 1 12 349 26 375
Inventories 6 0 6 350 28 378
Receivables 13 1 14 410 25 435
Tax receivable - - - 14 - 14
Cash and cash equivalents 0 0 0 108 3 111
Trade and other payables (17) (1) (18) (501) (26) (527)
Borrowings (10) - (10) - (7) (7)
Leasing obligations (11) (1) (12) (302) (26) (328)
Deferred tax - 0 0 (24) (11) (35)
Tax payable - - - - (5) (5)
Provisions (1) 0 (1) (119) - (119)
Total 19 0 19 797 57 854
Goodwill arising 8 1 9 - 41 41
Bargain purchase gain arising - - - (205) - (205)
Consideration 27 1 28 592 98 690
The net outflow of cash in respect of the
purchase of businesses is as follows:
Total consideration as cash payment 27 1 28 592 98 690
Cash and cash equivalents acquired (0) (0) (0) (108) (3) (111)
Net cash outflow 27 1 28 484 95 579
STARK GROUP – Annual Report 2024
44
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
Business combinations
The cost of an acquisition is measured as the fair value of
the assets given, equity instruments issued, and liabilities
incurred or assumed at the date of exchange. Identifiable
assets acquired and liabilities and contingent liabilities
assumed in a business combination are measured initially
at their fair values at the acquisition date, irrespective of
the extent of any non-controlling interests. Deferred tax is
calculated on fair value adjustments. Acquisition related
costs are expensed.
The excess of the cost of acquisition over the fair value of
the Group’s share of the identifiable net assets acquired is
recorded as goodwill. If the cost of acquisition is less than
the fair value of the Group’s share of the net assets of the
subsidiary acquired, negative goodwill, the difference is
recognised directly in the consolidated income statement
as “Bargain purchase gain”.
. ACQUISITIONS OF BUSINESSES CONTINUED
. INTANGIBLE ASSETS
If the initial accounting for a business combination is
incomplete by the end of the reporting period in which
the combination occurs, the Group reports provisional
amounts for the items for which the accounting is
incomplete. Those provisional amounts are adjusted
during the measurement period (which cannot exceed one
year beyond the acquisition date), or additional assets
or liabilities are recognised, to reflect new information
obtained about facts and circumstances that existed as
of the acquisition date that, if known, would have affected
the amounts recognised as of that date.
Changes in estimates of contingent consideration that
reflect additional information received in the measurement
period are adjusted retrospectively. Other changes in
estimates of contingent consideration are generally
recognised in the income statement.
ACCOUNTING POLICIES
§
2023/24
EUR million Goodwill
Trade
names
Customer
relation-
ships
Software
and other
intangible
assets
Intangible
assets not
yet in use Total
Cost as of 1 August 2023 825 489 509 55 39 1,917
Business acquisitions 9 3 17 6 - 35
Additions - - - 2 32 34
Transfers - - - 39 (39) -
Exchange rate adjustment (3) (1) (2) 1 1 (4)
Cost as of 31 July 2024 831 491 524 103 33 1,982
Amortisation as of 1 August 2023 - - (73) (30) - (103)
Amortisation for the period - - (37) (14) - (51)
Exchange rate adjustment - - - 0 - 0
Amortisation as of 31 July 2024 - - (110) (44) - (154)
Carrying amount as of 31 July 2024 831 491 414 59 33 1,828
STARK GROUP – Annual Report 2024
45
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
. INTANGIBLE ASSETS CONTINUED
2022/23
EUR million Goodwill
Trade
names
Customer
relation-
ships
Software
and other
intangible
assets
Intangible
assets not
yet in use Total
Cost as of 1 August 2022 810 497 489 36 28 1,860
Business acquisitions 41 1 35 0 - 77
Additions - - - 3 26 29
Transfers - - - 17 (15) 2
Exchange rate adjustment (26) (9) (15) (1) 0 (51)
Cost as of 31 July 2023 825 489 509 55 39 1,917
Amortisation as of 1 August 2022 - - (39) (15) - (54)
Amortisation for the period - - (35) (15) - (50)
Exchange rate adjustment - - 1 0 - 1
Amortisation as of 31 July 2023 - - (73) (30) - (103)
Carrying amount as of 31 July 2023 825 489 436 25 39 1,814
Expected useful life and residual value
for non-current assets
Useful life is initially assessed when the assets are
acquired and is estimated individually in each case.
Amortisation of non-current assets is based upon an
expected useful life for the assets and an estimated
residual value. Management reassesses expected useful
life and the residual value on an on-going basis.
KEY ACCOUNTING ESTIMATES AND JUDGEMENTS
!
Goodwill
Goodwill represents the excess of the cost of an acqui-
sition over the fair value of the Group’s share of the net
identifiable assets of the acquired subsidiary undertaking
at the date of acquisition. Goodwill on acquisitions of
subsidiary undertakings is included within intangible
assets.
Goodwill is not amortised but is tested annually for im-
pairment and carried at cost less accumulated impairment
losses. See note 3.5.
Other intangible assets
An intangible asset, which is an identifiable non-monetary
asset without physical substance, is recognised to the
extent that it is probable that the expected future econom-
ic benefits attributable to the asset will flow to the Group
and that its cost can be measured reliably. The asset is
deemed to be identifiable when it is separable or when it
arises from contractual or other legal rights.
Intangible assets, primarily trade names and customer
relationships, acquired as part of a business combination
are capitalised separately from goodwill and are carried
at cost less accumulated amortisation and accumulated
impairment losses. Amortisation is calculated using the
straight-line method.
Trade names with indefinite useful lives are not amortised
but are tested for impairment annually and whenever there
is an indication of impairment. See note 3.5.
Software that is not integral to an item of property, plant
and equipment is recognised separately as an intangible
asset and is carried at cost less accumulated amortisation
and accumulated impairment losses. Costs include
software licences, consulting costs attributable to the
development, design and implementation of the software
and internal costs directly attributable to the develop-
ment, design and implementation of the software. Costs
in respect of training and data conversion are expensed as
incurred.
The cost of the intangible assets is amortised and charged
to the consolidated income statement over their estimated
useful lives as follows:
Customer relationships 7 - 15 years
Software and other intagible assets 3 - 7 years
Intangible assets not yet in use are not depreciated but
are tested for impairment annually. See note 3.5.
ACCOUNTING POLICIES
§
When changing the amortisation due to a change in the
useful life and/or residual value, the effect on amortisation
is recognised prospectively as a change in accounting
estimates.
The Group continues to invest in retaining brand
awareness and thereby expects to maintain the value of
the trade names. Management has determined that trade
names have indefinite lives. The reasonableness of this
determination is reassessed annually.
Customer relations are amortised over 7 - 15 years based
upon historical experience, market trends and strong
relationships between STARK Group and the customers.
STARK GROUP – Annual Report 2024
46
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
. TANGIBLE NONCURRENT ASSETS
Gains and losses on disposals or retirements are recog-
nised in the consolidated income statement as other
operating expenses or income.
2023/24
EUR million Property
Plant &
equipment
Property,
plant and
equipment
under
construction Total
Cost as of 1 August 2023 1,205 239 98 1,542
Business acquisitions 1 1 - 2
Additions 26 26 62 114
Disposals (52) (5) (2) (59)
Transfers 65 27 (92) -
Exchange rate adjustment 8 0 0 8
Cost as of 31 July 2024 1,253 288 66 1,607
Depreciation as of 1 August 2023 (50) (65) - (115)
Depreciation for the period (49) (42) - (91)
Disposals 1 - - 1
Exchange rate adjustment (1) (1) - (2)
Depreciation as of 31 July 2024 (99) (108) - (207)
Carrying amount as of 31 July 2024 1,154 180 66 1,400
2022/23
EUR million Property
Plant &
equipment
Property,
plant and
equipment
under
construction Total
Cost as of 1 August 2022 751 155 46 952
Business acquisitions 405 55 66 526
Additions 15 19 45 79
Disposals (9) (2) - (11)
Transfers 40 16 (58) (2)
Exchange rate adjustment 3 (4) (1) (2)
Cost as of 31 July 2023 1,205 239 98 1,542
Depreciation as of 1 August 2022 (19) (33) - (52)
Depreciation for the period (31) (34) - (65)
Disposals 0 1 - 1
Exchange rate adjustment 0 1 - 1
Depreciation as of 31 July 2023 (50) (65) - (115)
Carrying amount as of 31 July 2023 1,155 174 98 1,427
Property, plant and equipment
Property, plant and equipment are measured at cost less
accumulated depreciation and less any accumulated
impairment losses. Cost comprises the cost of acquisition
and expenses directly related to the acquisition up until
the time when the asset is ready for use. Interest expenses
on loans raised for financing the construction of property,
plant and equipment and which are related to the period
of construction are recognised in the consolidated income
statement when incurred.
ACCOUNTING POLICIES
§
Depreciation based on cost is calculated on a straight-line
basis over the expected useful lives of the assets,
which are:
Office buildings up to 50 years
Commercial buildings and office
premises in connection herewith up to 25 years
Plant and equipment 3 - 10 years
Property, plant and equipment under construction are not
depreciated.
For impairment review refer to note 3.5.
At the balance sheet date, an assessment is made of the
residual values, useful life left and amortisation pattern.
Changes are accounted for as changes in accounting
estimates.
STARK GROUP – Annual Report 2024
47
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
. LEASES
2023/24
EUR million
Land and
buildings
Other
equipment Total
Cost as of 1 August 2023 888 215 1,103
Business acquisitions 11 1 12
Additions 82 89 171
Disposals (21) (19) (40)
Additions due to revised lease terms 55 4 59
Exchange rate adjustment 1 1 2
Cost as of 31 July 2024 1,016 291 1,307
Depreciation as of 1 August 2023 (163) (49) (212)
Depreciation for the period (134) (59) (193)
Disposals 6 17 23
Exchange rate adjustment 0 0 0
Depreciation as of 31 July 2024 (291) (91) (382)
Carrying amount as of 31 July 2024 725 200 925
2022/23
EUR million
Land and
buildings
Other
equipment Total
Cost as of 1 August 2022 569 84 653
Business acquisitions 286 89 375
Additions 15 48 63
Disposals (9) (8) (17)
Additions due to revised lease terms 42 1 43
Exchange rate adjustment (15) 1 (14)
Cost as of 31 July 2023 888 215 1,103
Depreciation as of 1 August 2022 (76) (24) (100)
Depreciation for the period (94) (34) (128)
Disposals 4 8 12
Exchange rate adjustment 3 1 4
Depreciation as of 31 July 2023 (163) (49) (212)
Carrying amount as of 31 July 2023 725 166 891
RIGHT OF USE ASSETS
Right of use assets and related leasing liabilities derive
from the Group being lessee in leasing arrangements from
especially leasing land and buildings representing
branches in the Group’s business units.
In 2023/24, short term, low value and variable leases have
been expensed as other external operating costs with EUR
20m (2022/23: EUR 16m).
In UK, the Group has subleased right of use assets. The
lease income from operational subleases amounts to EUR
7m (2022/23: EUR 3m).
STARK GROUP – Annual Report 2024
48
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
. LEASES CONTINUED
LEASING LIABILITY
EUR million 2023/24 2022/23
Less than 1 year 210 184
Between 1 and 5 years 571 536
More than 5 years 447 412
Undiscounted leasing liability as of 31 July 1,228 1,132
Current 173 146
Non-current 761 714
Discounted leasing liability as of 31 July 934 860
Amounts recognised in the statement of cash flows:
Repayment of liabilities 166 113
Interest 44 27
Short term, low value and variable leases included in cash flows from operations 20 16
Total cash outflow for leases 230 156
Determining the lease term of contracts
with renewal options
The Group determines the lease term as the non-cancella-
ble term of the lease, together with any periods covered by
an option to extend the lease if it is reasonably certain to
be exercised. The Group has several lease contracts that
include extension options. The Group applies judgement
in evaluating whether it is reasonably certain to exercise
the option to renew or whether to terminate the lease.
With due consideration to the Group’s location plans and
strategy, the Group considers all relevant factors that
create an economic incentive for it to exercise the renewal
option or to let the leases expire. Unless contractually
obligated, the Group never estimates lease lengths of
more than ten years as the Group cannot predict with a
very high degree of certainty that it will in all cases remain
in leaseholds beyond a planning horizon of 10 years. The
estimated lease term is reassessed at each reporting date.
KEY ACCOUNTING ESTIMATES AND JUDGEMENTS
!
Right of use lease assets and lease liabilities
The Group recognises a right of use asset and a lease
liability at the commencement date for all lease agree-
ments that the Group has entered into as lessee. Right of
use assets consist primarily of property and equipment,
except short-term leases and leases of low value assets.
For short-term leases and leases of low-value assets,
the Group has opted to recognise a lease expense on a
straight-line basis as permitted by IFRS 16. This expense is
presented within “other external operating expenses”.
The lease liability is initially measured at the present
value of the future lease payments, discounted using the
incremental borrowing rate for the individual lease.
The lease liability is subsequently measured by increasing
the carrying amount to reflect interest and by reducing
the carrying amount to reflect the lease payments made.
Further, lease liabilities are changed when re-measure-
ments are needed with a corresponding adjustment to the
related right of use asset.
Gains or losses from a lease modification, not accounted
for as a separate lease, is recognised in profit and loss.
The initial right of use assets comprise the amount of the
initial measurement of the lease liability, lease payments
made at or before the commencement day, initial direct
costs and costs to restore the underlying asset at the end
of the lease period. The right of use assets are subse-
quently measured at cost less accumulated depreciation
and impairment losses.
The right of use assets are depreciated over the
shorter period of the lease term and the useful life of the
underlying asset according to the straight-line method.
Property leases normally have a lease term of up to 20
years, whereas leases of plant and equipment normally
have lease term of up to 10 years. Property leases may
include extension options with the intention of securing
flexibility in the lease. Extensions options are included in
the lease term if the extension option is reasonably certain
to be exercised.
Subleases
The group enters into arrangements to sublease
properties, where the group acts as both the lessee and
lessor of the same underlying asset. If a right of use asset
is subleased under terms transferring substantially all
remaining risks and rewards under the head lease to the
lessee in the sublease, the right of use asset is derec-
ognised, and a lease receivable is recognised (finance
lease). Lease receivable is recognised in the balance sheet
as Other non-current financial assets (non-current) and
Other financial assets (current). Income from subleases
not classified as finance leases are recognised over the
term of the lease.
ACCOUNTING POLICIES
§
STARK GROUP – Annual Report 2024
49
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
. IMPAIRMENT REVIEW
The impairment review is an assessment of whether the
cash generating units (“CGUs”) or aggregations of CGUs
will be able to generate sufficient positive net cash flow in
the future to support the carrying amount of the assets
related to the CGUs.
Goodwill, Trade names and Intangible assets not yet in
use are tested annually as of 31 July. The impairment test
performed in 2023/24 did not result in recognition of
impairment loss (2022/23: No impairment loss).
As of 31 July 2024, it has been assessed that impairment
indicators exist in some countries in relation to other
non-current non-financial assets (Intangible assets being
amortised, Property, plant & equipment, Non-current
tangible assets under construction and Right of use
assets) due to prolonged weakness in demand and
macro-economic uncertainty with high interest rates. The
impairment test on these assets performed in 2023/24 did
not result in the recognition of impairment loss (2022/23:
No impairment indicators).
Sensitivity analysis
Management has performed a sensitivity analysis for
CGUs containing goodwill, trade names and intangible
assets not yet in use, using reasonably possible changes
in pre-tax discount rate, long-term growth rate and
compound yearly growth rate in net sales keeping all other
assumptions constant.
With an increase in discount rate of 1%-point or a decrease
in the long-term growth rate of 1%-point, the sensitivity
testing did not identify any need for impairment. In addition,
a sensitivity test with a decrease in the compound yearly
growth rate in net sales in the 5-year strategy period of
0.5%-point did not identify any need for impairment.
Impairment will need to be assessed in certain CGUs if the
pre-tax discount rate increases by 1.7%-points or more or if
the long-term growth rate decreases to negative growth of
-0.9% or lower. In addition, impairment will need to be
assessed, if the compound yearly growth rate in net sales
is 0.6%-points lower than anticipated in the strategic plan.
Goodwill and trade names with indefinite lives can be specified as follows per business unit:
Pre-tax discount rate Goodwill Trade names
31 July
2024
31 July
2023
31 July
2024
31 July
2023
31 July
2024
31 July
2023
Germany 10.3% 10.7% 276 276 209 209
Austria 10.2% 10.7% 17 9 6 3
UK 12.1% 12.5% - - - -
Denmark 9.3% 9.9% 229 229 128 128
Sweden 8.7% 9.8% 173 173 81 82
Finland 9.8% 10.2% 94 94 66 66
Norway 10.4% 10.6% 42 44 1 1
Total 831 825 491 489
The measurement of the recoverable amount of assets is a
complex process that requires significant Management
judgements in determining various assumptions to be
used in the calculation of cashflow projections, discount
rates and calculating the value in use of the cash-generat-
ing unit as well as the determination of CGUs.
CGUs (judgement)
The CGU determination involves judgement and is based
on the smallest identifiable CGU as determined primarily
by analysing independent cash inflows.
The Group has identified it’s CGUs as either geographic
areas or more granular groupings under the geographic
level based on the branch network. In general, the Group
has identified it’s CGUs as groups of branches that share
cash inflow due to geographical proximity and overlapping
customer base. In some cases, individual sites with no
shared cash inflow are CGUs.
For the purpose of impairment test of intangible assets
CGUs have been aggregated. For testing of impairment of
goodwill CGUs has been aggregated to business units as
this represents the lowest level at which the goodwill is
monitored for internal management purpose.
Discounted cashflows (estimates)
The value in use is based on discounting of expected
future cashflow.
The cash flow forecasts for year one to five are derived
from the most recent approved strategic plan. The
strategic plan for the Group is based on management
expectations and assumptions considering current market
conditions, future growth expectations, capital allocation
and other factors (including macro-economic trends)
impacting the performance at a geographical level. The
key components of the cash flow forecasts are net sales,
costs of goods sold (COGS), operating expenses (OPEX),
EBITDA, working capital and capital expenditures
(CAPEX).
Cash flow in the terminal period has been based on an
assumption of a long-term growth rate of 2.0% for all
geographical areas (2022/23: 2.0%).
The cash flow is discounted using risk-adjusted, pre-tax
discount rate, calculated by reference to the weighted
average cost of capital (“WACC”).
KEY ACCOUNTING ESTIMATES AND JUDGEMENTS
!
Impairment test
Assets that have an indefinite useful life, such as Goodwill
and Trade names and Intangible asset not yet in use are
not subject to amortisation but are tested for impairment
annually or if there is any indication of impairment.
Intangible asset that are being amortised and non-current
tangible assets (property, plant & equipment, non-current
assets under construction and right-of-use assets) are
ACCOUNTING POLICIES
§
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 carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s fair value
less costs to sell and value in use.
STARK GROUP – Annual Report 2024
50
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
. INVENTORIES
EUR million
31 July
2024
31 July
2023
Trading goods 1,158 1,224
Provision for excess and obsolete goods (106) (137)
Total inventories 1,052 1,087
. TRADE RECEIVABLES
EUR million
31 July
2024
31 July
2023
Trade receivables
Trade receivables, gross 838 866
Provision for expected credit losses (51) (43)
Net Trade receivables 787 823
Of this, due after more than 1 year - -
31 July 2024
EUR million
Gross
carrying
amount
Expected
credit
loss
Net
trade
recei v ables
Amounts not yet due 633 (7) 626
Past due not more than one month 126 (4) 122
Past due more than one month and less than two months 19 (2) 17
Past due more than two months and less than three months 9 (2) 7
Past due more than three months and less than six months 12 (6) 6
Past due more than six months 39 (30) 9
As of 31 July 2024 838 (51) 787
31 July 2023
EUR million
Gross
carrying
amount
Expected
credit
loss
Net
trade
recei v ables
Amounts not yet due 669 (6) 663
Past due not more than one month 141 (4) 137
Past due more than one month and less than two months 16 (1) 15
Past due more than two months and less than three months 6 (1) 5
Past due more than three months and less than six months 6 (4) 2
Past due more than six months 28 (27) 1
As of 31 July 2023 866 (43) 823
Inventories
Inventories, which comprise goods purchased for resale,
are stated at the lower of cost and net realisable value.
Cost is determined using the first-in, first-out (“FIFO”)
method. The cost of goods purchased for resale includes
import and custom duties, transport and handling costs,
freight and packing costs and other attributable costs
less supplier rebates. Net realisable value is the estimated
selling price in the ordinary course of business, less
applicable variable selling expenses.
Valuation of inventory
Provisions are made against slow-moving, obsolete and
damaged inventories for which the net realisable value is
estimated to be less than the cost.
The risk of obsolescence of slow-moving inventory is as-
sessed by comparing the level of inventory held to future
sales projected on the basis of historical experience.
ACCOUNTING POLICIES
§
KEY ACCOUNTING ESTIMATES AND JUDGEMENTS
!
In 2023/24, inventory purchases of EUR 5,739m has been
expensed (2022/23: EUR 5,243m).
STARK GROUP – Annual Report 2024
51
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
. TRADE RECEIVABLES CONTINUED
EUR million 2023/24 2022/23
Movements in the provision for expected credit losses are as follows:
Provision as of 1 August (43) (27)
Business acquisitions (2) (11)
Net charge for the period (9) (10)
Utilised in the period 3 5
As of 31 July (51) (43)
KEY ACCOUNTING ESTIMATES AND JUDGEMENTS
!
Valuation - expected credit losses
Provision is made for expected credit losses in respect
of the Group’s trade and other receivables, which are
estimated to occur if a customer subsequently is unable
to pay. In connection with the assessment of whether the
Group’s provisions for expected credit losses are sufficient,
management analyses accounts receivable and estimates
lifetime expected credit losses applying a provision matrix
as defined in the accounting policy for trade receivables
by reference to past default experience and analysis of the
current financial position, including historical credit losses,
customer credit worthiness, current economic trends
and changes in customer payment terms and also takes
into account the extent to which protection is provided
for through credit insurance arrangements. If customers’
financial conditions were to deteriorate compared to the
assumed trends, it may be necessary to recognise further
credit losses in future periods.
Trade receivables are non-interest bearing and are
recognised initially at transaction price, and subsequently
at amortised cost using the effective interest rate method,
less provision for expected credit losses.
The Group measures the provision for expected credit
losses at an amount equal to lifetime expected credit loss-
es (ECL). The expected credit losses on trade receivables
are estimated using a provision matrix by reference to past
default experience of the debtor and an analysis of the
debtor’s current financial position, adjusted for factors
that are specific to the debtors, general economic con-
ditions of the industry in which the debtors operate and
ACCOUNTING POLICIES
§
an assessment of both the current as well as the forecast
direction of conditions at the reporting date. The estimate
also takes into account the extent to which protection is
provided through customer insurance arrangements.
The Group writes off a trade receivable when there is
information indicating that the debtor is in severe financial
difficulty and there is no realistic prospect of recovery, e.g.
when the debtor has been placed under liquidation or has
entered into bankruptcy proceedings, or when the trade
receivable is over two years past due, whichever occurs
earlier. None of the trade receivables that have been
written off are subject to enforcement activities.
The Group is utilising a trade receivable factoring
agreement covering a facility for a total of EUR 100m of
which EUR 64m was utilised as of 31 July 2024 (31 July
2023: EUR 74m). The Group has no obligations on the sold
receivables. As of 31 July 2024 the agreement had an
expiry date on 22 October 2024. Subsequent to the
balance sheet date the agreement has been extended.
Refer to note 6.9.
Provisions for expected credit losses are based on the
simplified expected credit loss model. Credit loss
provisions on individual receivables are provided for when
objective indications of credit losses occur such as
customer bankruptcy and uncertainty about the custom-
ers’ ability and/or willingness to pay, etc.
In addition to this, allowances for expected credit losses
are made on the remaining trade receivables based on a
simplified approach.
STARK GROUP – Annual Report 2024
52
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
The Environmental provision is related to risks for
potential claims on properties.
Provisions for restructuring mainly includes provisions for
staff redundancy costs as well as expected unavoidable
losses closed branches.
Dilapidation provision covers estimated costs for repairing
leaseholds when they terminate. The provision is primarily
related to STARK UK. Other provisions include warranty,
legal cases and other provisions.
Provisions for dilapidation (estimate)
Provisions for dilapidations are recognised when the Group
has a present legal or constructive obligation as a result of
past events, when it is more likely than not that an outflow
of resources will be required to settle the obligation, and
when the amount can be reliably estimated.
Provisions are recognised when, in consequence of an
event that occurred before or on the balance sheet date,
the Group has a legal or constructive obligation, and it is
probable that economic benefits must be given up settling
the obligation. Provisions are measured at the present
value of the expenditures expected to be required to settle
the obligation using a pre-tax discount rate that reflects
current market assessments of the time value of money
and the risks specific to the obligation.
Such provisions are measured at the present value of
management’s best estimate of the expenditure required to
settle the present obligation at the balance sheet date. The
discount rate used to determine the present value reflects
current market assessments of the time value of money.
The increase in the provision due to passage of time is
recognised as interest expense.
2023/24
EUR million
Environ-
mental
Restruc-
turing
Dilapi-
dations
Other
pro-
visions Total
Provision as of 1 August 2023 12 13 120 24 169
Business acquisitions - - - 1 1
Utilised in the period (1) (12) (8) (1) (22)
Charge/(credit) for the period - 16 (10) - 6
Unwinding of discounting - - 5 - 5
Unused amounts reversed during the period (3) (2) (22) (3) (30)
Exchange rate adjustment 1 1 3 (1) 4
Provision as of 31 July 2024 9 16 88 20 133
2022/23
EUR million
Environ-
mental
Restruc-
turing
Dilapi-
dations
Other
pro-
visions Total
Provision as of 1 August 2022 10 6 5 19 40
Business acquisitions 2 2 111 4 119
Utilised in the period - (6) (1) (5) (12)
Charge/(credit) for the period 0 11 3 9 23
Unused amounts reversed during the period - - (1) (3) (4)
Exchange rate adjustment - - 3 0 3
Provision as of 31 July 2023 12 13 120 24 169
31 July
2024
31 July
2023
Other provisions can be specified as follows:
Warranty commitments 2 3
Legal 2 1
Miscellaneous 16 20
Total other provisions 20 24
Maturity of provisions are expected to be:
Current 38 21
Non-current 95 148
Total provisions 133 169
ACCOUNTING POLICIES
§
KEY ACCOUNTING ESTIMATES AND JUDGEMENTS
!
. PROVISIONS
STARK GROUP – Annual Report 2024
53
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
EUR million
Number
of shares
Share
capital
Share
premium Total
Incorporation - 16 December 2020 40,000 1 0 1
Non-cash capital increase - 15 December 2021 14,960,000 1 - 1
Balance as of 31 July 2024 15,000,000 2 0 2
No dividends have been paid during the financial year
to the shareholder in STARK Group A/S and no dividends
are proposed to be distributed of the net earnings for
2023/24.
. SHARE CAPITAL AND SHARE PREMIUM . DIVIDEND
Share capital
On 16 December 2020, the Company was incorporated
with a subscribed and fully paid up capital amounting
to DKK 40,000.
On 15 December 2021, the Company made a non-cash
capital increase (bonus shares) of DKK 14,960,000 to
DKK15,000,000.
The share capital as of 31 July 2024 is unchanged
compared to 31 July 2023.
STARK GROUP – Annual Report 2024
54
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
MATURITY ANALYSIS OF BORROWINGS CHANGES IN ASSETS AND LIABILITIES FROM FINANCING ACTIVITIES
EUR million
31 July
2024
31 July
2023
Current
Credit facilities 55 -
Bank loans and loans from non-controlling interests 49 28
Loans from related parties 15 6
Current total 119 34
Non-current
Bank loans 147 143
Loans from related parties 2,292 2,253
Non-current total 2,439 2,396
Total borrowings 2,558 2,430
Within 1 year 119 34
Between 1 and 5 years 1,803 1,786
After 5 years 636 610
Carrying amount 2,558 2,430
2023/24
EUR million
1 August
2023
Cash
flows
Acqui-
sitions
Other
non-cash
1
31 July
2024
Credit facilities - 55 - - 55
Bank loans 153 16 10 (2) 177
Loans from related parties 2,259 - - 48 2,307
Loans from non-controlling interests 18 - - 1 19
Total change in financing activities from borrowings 2,430 71 10 47 2,558
Leasing liabilities 860 (166) 12 228 934
Total change from financing activities 3,290 (95) 22 275 3,492
1. Other non-cash includes accrued interest of EUR 34m on loans from related parties, new leasing contracts amounting to EUR 167m
and re-measurements of EUR 69m.
2022/23
EUR million
1 August
2022
Cash
flows
Acqui-
sitions
Other
non-cash
2
31 July
2023
Bank loans 26 120 7 - 153
Loans from related parties 1,795 419 - 45 2,259
Loans from non-controlling interests 17 (2) - 3 18
Total change in financing activities from borrowings 1,838 537 7 48 2,430
Leasing liabilities 556 (113) 328 89 860
Total change from financing activities 2,394 424 335 137 3,290
2. Other non-cash includes accrued interest of EUR 26m on loans from related parties, new leasing contracts amounting to EUR 63m
and re-measurements of EUR 43m.
. BORROWINGS
Borrowings
Interest-bearing loans from related parties and credit
institutions and overdrafts are initially recorded at fair
value, net of attributable transaction costs.
Subsequent to initial recognition, interest-bearing bor-
rowings are stated at amortised cost with any difference
between proceeds and redemption value being recognised
in the consolidated income statement over the period of
the borrowings on an effective interest basis.
ACCOUNTING POLICIES
§
STARK GROUP – Annual Report 2024
55
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
. FINANCIAL INSTRUMENTS, RISK MANAGEMENT POLICIES
Risk management
As a result of its operations, investments and financing, the
Group is exposed to changes in exchange and interest rates.
The Group’s financial management is exclusively aimed at
the management of financial risks related to finance. Thus, it
is the Group’s policy not to engage in speculation in financial
risks.
Capital Risk Management
The Group’s sources of funding currently comprise equity
contributed by the sole shareholder and cash flows generat-
ed by operations, loans from related parties and borrowings
from banks. The Group’s capital management is reflected in
the financing arrangements as set out in note 5.3 and note
6.8 and in the specifications in these notes.
Liquidity Risks
The Group maintains a policy of ensuring sufficient
borrowing headroom to finance all investments and
capital expenditures included in the strategic plan, with an
additional contingent safety margin. The Group substantially
manages its liquidity needs with cash flow from operations
and to achieve effective management of the Group’s cash,
cash pooling is used. The Group’s liquidity reserves consist
of cash and an undrawn credit facility.
Currency risks
The Group’s currency risk is limited since costs of wages
and purchases of supplies are largely incurred in the same
currency as sales are generated. Currency risks are primarily
related to international purchases and to a limited extent,
sale of goods in foreign currencies.
The Group is subject to translation risk when results of
subsidiaries are translated into EUR. Translation risk is not
hedged with financial contracts. Currently translation risk is
primarily related to SEK, NOK and GBP.
It is the Group’s policy to actively monitor the impact of
exchange rate changes on the results and the Group’s
financial position. The Group does not engage in speculative
currency transactions.
Credit risk
Financial counterparty risk is reduced by only entering into
transactions or arrangements with financial counterparties
that have a satisfactory credit quality. Furthermore, maxi-
mum credit limits for each financial counterparty applies.
The Group has no material risks relating to an individual
customer or business partner. The Group’s policy for
accepting credit risks means that all major customers and
other partners are credit rated continuously.
The Group’s credit risk is related to accounts receivable,
other receivables and cash. The maximum credit risk related
to receivables and cash correspond to the balance sheet
values recognised. All cash balances are held with reputable
financial institutions. Significant outstanding and overdue
balances are reviewed on a regular basis and resulting
actions are put in place on a timely basis.
In some cases, protection is provided through credit
insurance arrangements.
Interest rate risk
Fluctuating interest rates influence the Group’s income
statement and the present value of future cash flows
resulting from changes in interest rates. The objective of
actively managing the Group’s interest rate exposure is to
maintain the interest rate risk at a known and acceptable
level and to minimise the Group’s borrowing costs.
The majority of the long-term financing is with variable
interests. Disregarding any hedges or similar arrangements
to temporarily fix the variable interest, a 1% change in
interest levels would result in a structural change of interest
expenses of approximately EUR 20m on an annual basis.
STARK GROUP – Annual Report 2024
56
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
FINANCIAL INSTRUMENTS
Maturity and contractual cashflows on the financial liabilities:The carrying amount of financial instruments by category:
EUR million
31 July
2024
31 July
2023
Financial assets:
Other non-current financial assets 17 25
Trade receivables 787 823
Other receivables 49 50
Cash and cash equivalents 242 307
Financial assets at amortised cost 1,095 1,205
Financial liabilities:
Payables to related parties (31) (31)
Trade and other payables (1,671) (1,673)
Less: Tax and social security 30 40
Less: Payroll accruals 10 12
Net trade and other payables (current) (1,662) (1,652)
Loans from related parties (2,307) (2,259)
Borrowings (251) (171)
Leasing liabilities (934) (860)
Financial liabilities at amortised cost (5,154) (4,942)
EUR million
Trade and
other
payables
(current)
Loans
from
related
parties Borrowings
Leasing
liabilities Interest Total
31 July 2024
Due in less than one year (1,662) - (105) (173) (187) (2,127)
Due in two to five years - (1,792) (30) (480) (456) (2,758)
Due in over five years - (512) (120) (281) (379) (1,292)
Total (1,662) (2,304) (255) (934) (1,022) (6,177)
31 July 2023
Due in less than one year (1,652) (19) (28) (146) (93) (1,938)
Due in two to five years - (1,794) (29) (455) (285) (2,563)
Due in over five years - (496) (116) (259) (370) (1,241)
Total (1,652) (2,309) (173) (860) (748) (5,742)
. FINANCIAL INSTRUMENTS, RISK MANAGEMENT POLICIES CONTINUED
The future interest for borrowings and payables to
related parties have been estimated using the current
interest rates.
Fair value is considered to be equal to or approximate the
carrying amounts of the various loans and payables.
Cash and cash equivalents includes EUR 7m of restricted
cash held as collateral for guarantees in UK.
STARK GROUP – Annual Report 2024
57
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
. FINANCIAL INSTRUMENTS, RISK MANAGEMENT POLICIES CONTINUED
Financial instruments
A financial instrument is any contract that gives rise to a
financial asset, a financial liability or equity instrument.
Financial assets and financial liabilities are recognised in
the Consolidated statement of Financial Position when
the Group becomes a party to the contractual provisions
of the instrument. The Group’s financial instruments com-
prise trade and other receivables (including amounts owed
by related parties), derivative financial instruments, cash
and cash equivalents, trade and other payables (including
amounts owed to related parties) and borrowings.
Financial assets and financial liabilities are initially
measured at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial assets
and financial liabilities (other than financial assets and
financial liabilities at fair value through profit or loss) are
added to or deducted from the fair value of the financial
assets or financial liabilities, as appropriate, on initial
recognition. Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities at fair
value through profit or loss are recognised immediately in
profit or loss.
ACCOUNTING POLICIES
§
Financial assets at amortised cost are subsequently meas-
ured using the effective interest rate (EIR) method and are
subject to impairment. Gains and losses are recognised in
profit or loss when the asset is derecognised, modified or
impaired. The Group’s financial assets at amortised cost
includes trade and other receivables.
The classification of financial assets at initial recognition
depends on the financial asset’s contractual cash flow
characteristics and the Group’s business model for
managing them.
A financial asset (or, where applicable, a part of a financial
asset or part of a group of similar financial assets) is
primarily derecognised (i.e., removed from the Group’s
consolidated statement of financial position) when:
·
The rights to receive cash flows from the asset have
expired or
·
The Group has transferred its rights to receive cash
flows from the asset or has assumed an obligation to
pay the received cash flows in full without material
delay to a third party under a ‘pass-through’ arrange-
ment; and either (a) the Group has transferred substan-
tially all the risks and rewards of the asset, or (b) the
Group has neither transferred nor retained substantially
all the risks and rewards of the asset, but has trans-
ferred control of the asset.
When the Group has transferred its rights to receive cash
flows from an asset or has entered into a passthrough
arrangement, it evaluates if, and to what extent, it has
retained the risks and rewards of ownership. When it has
neither transferred nor retained substantially all of the
risks and rewards of the asset, nor transferred control of
the asset, the Group continues to recognise the trans-
ferred asset to the extent of its continuing involvement.
In that case, the Group also recognises an associated
liability. The transferred asset and the associated liability
are measured on a basis that reflects the rights and
obligations that the Group has retained.
STARK GROUP – Annual Report 2024
58
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
Deferred tax
Deferred tax is provided for using the balance sheet
liability method, providing for temporary differences
between the carrying amounts of assets and liabilities for
financial reporting purposes and the tax base of assets
and liabilities.
Deferred tax is calculated at the tax rates that are
expected to apply in the period when the liability is settled
or the asset realised. Deferred tax is charged or credited in
the consolidated income statement, except when it relates
to items charged or credited directly to the consolidated
ACCOUNTING POLICIES
§
statement of changes in equity or the consolidated
statement of comprehensive income, in which case the
deferred tax is recognised in equity, or other comprehen-
sive income, respectively.
Deferred tax assets are recognised to the extent that it
is probable that taxable profits will be available against
which deductible temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at
each balance sheet date and reduced to the extent that it
is no longer probable that sufficient taxable profits will be
available to allow all or part of the assets to be recovered.
EUR million 2023/24 2022/23
Balance as of 1 August 322 312
Business acquisitions (0) 35
Recognised in the income statement regarding current year (13) (23)
Recognised in other comprehensive income (3) 5
Adjustment of deferred tax regarding previous years (11) (2)
Exchange rate adjustment 0 (5)
Balance as of 31 July 295 322
EUR million
31 July
2024
31 July
2023
Assets Liabilities
Net
Net
Deferred (tax assets)/tax liabilities:
Intangible assets (16) 229 213 211
Property, plant and equipment (3) 179 176 165
Pensions (9) 10 1 4
Inventories (4) 0 (4) (6)
Tax loss carryforwards etc. (79) - (79) (37)
Other assets and liabilities (85) 73 (12) (15)
Total deferred (tax assets)/tax liabilities (196) 491 295 322
Offset within legal tax entities and jurisdictions 196 (196) - -
Total net deferred (tax assets)/tax liabilities 295 295 322
. DEFERRED TAX ASSETS AND LIABILITIES
The Group has an unrecognised deferred tax asset of
EUR 30m relating to tax loss carry forwards where the
timing of possible future utilisation is not certain. The
related tax losses can be carried forward indefinitely.
We have assessed our potential exposure to the Pillar Two
rules and have completed the calculation of the Transi-
tional Safe Harbour, in accordance with the applicable
guidelines. Based on this assessment, we have confirmed
that all our jurisdictions meet one or more of the tests.
Therefore, we have concluded that we are not exposed to
any obligations under Pillar Two in any of our jurisdictions.
STARK GROUP – Annual Report 2024
59
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
. EMPLOYEE BENEFIT OBLIGATIONS
The Group has entered into pension plans with those of
the Group’s employees who are eligible. The Group has
entered into both defined contribution plans and defined
benefit plans.
Defined contribution plans
The Group finances these plans by paying premiums to an
independent insurance company that is responsible for
the pension obligations. Once the pension contributions to
the defined contribution plans have been paid, the Group
has no further pension obligation to current or retired
employees.
Defined benefit plans
The Group operates defined benefit plans with employees
of the Group´s subsidiaries in Germany and Sweden.
Plan assets are related to defined benefit plans in Germa-
ny, and consist of properties occupied by the Group.
EUR million 2023/24 2022/23
Analysis of liability in the consolidated statement of financial position:
Fair value of plan assets 45 43
Present value of defined benefit obligations (132) (114)
Net liability recognised in the consolidated statement of financial position (87) (71)
Analysis of total expense recognised in the consolidated income statement:
Current service cost (3) (4)
Charged to staff costs (3) (4)
Calculated interest on pension liabilities (5) (4)
Calculated interest on plan assets 1 1
Credited/(charged) to finance costs (4) (3)
Total expense recognised in the consolidated income statement (7) (7)
Analysis of amount recognised in the consolidated statement of comprehensive income:
Actuarial gain/(loss) (13) 19
Taxation 3 (5)
Total amount recognised in the consolidated statement of comprehensive income (10) 14
FINANCIAL IMPACT OF PLANSSensitivity analysis
The Group considers that the most sensitive assumptions
are the discount rate, inflation and life expectancy. Below
presented as a weighted view across the active benefit
plans.
·
A change in discount rate of +/- 0.25% respectively
would impact the defined benefit obligation by -4% or
+4% respectively (31 July 2023: -4% or +4% respectively).
·
A change in the inflation rate of +/-0.25% respectively
would impact the defined benefit obligation by +3% or
-3% respectively (31 July 2023: +3% or -3% respectively).
·
Changing expectations for the number of years of life
after retirement with 1 year would increase the defined
benefit obligation by 4% (31 July 2023: +4%).
STARK GROUP – Annual Report 2024
60
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
. EMPLOYEE BENEFIT OBLIGATIONS CONTINUED
EUR million 2023/24 2022/23
Fair value of plan assets:
As of 1 August 43 47
Calculated interest on plan assets 1 1
Disbursed benefits (2) (3)
Fair value gain on plan assets 3 (2)
As of 31 July 45 43
Present value of defined benefit obligations:
As of 1 August (114) (139)
Current service cost (3) (4)
Calculated interest on pension liabilities (5) (4)
Disbursed benefits from the Group 4 3
Disbursed benefits from plan assets 2 3
Actuarial gain/(loss) - demographic assumptions (1) (5)
Actuarial gain/(loss) - financial assumptions (15) 26
Currency translation 0 6
As of 31 July (132) (114)
EUR million
31 July
2024
31 July
2023
Analysis of present value of defined benefit obligations:
Amounts arising from wholly unfunded plans (65) (48)
Amounts arising from plans that are wholly or partly funded (67) (66)
Total (132) (114)
Analysis of present/fair value of plan assets:
Property 45 43
Total 45 43
STARK GROUP – Annual Report 2024
61
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
. EMPLOYEE BENEFIT OBLIGATIONS CONTINUED
31 July
2024
31 July
2023
The actuarial calculations are based on the following assumptions:
Germany:
Discount rate 3.49% 4.06%
Rate of inflation 2.30% 2.60%
Increases to pensions in payment 2.30% 2.60%
Increase in salary 3.00% 2.10%
Current pensioners 1,062 1,072
Future pensioners 743 775
Average duration (years) 10 10
Sweden:
Discount rate 3.00% 4.10%
Rate of inflation 1.70% 1.80%
Increases to pensions in payment 2.70% 2.80%
Increase in salary 2.70% 2.80%
Current pensioners 809 784
Future pensioners 525 571
Average duration (years) 17 16
Post-employment obligations
Contributions to defined contribution pension plans and
other post-retirement benefits are charged to the income
statement as incurred. For defined benefit plans, obliga-
tions are measured at discounted present value (using
the projected unit credit method) whilst plan assets are
recorded at fair value. The operating and financing costs of
such plans are recognised separately in the consolidated
income statement; service costs are spread systematically
over the expected service lives of employees and financing
costs are recognised in the periods in which they arise.
Actuarial gains and losses are recognised immediately
in the consolidated statement of other comprehensive
income. Payments to defined contribution schemes are
recognised as an expense as they fall due.
Where a plan shows a surplus funding, the asset recognised
is limited to the present value of any amount which the
Group expects to recover by way of refunds or a reduction
in future contributions.
ACCOUNTING POLICIES
§
KEY ACCOUNTING ESTIMATES AND JUDGEMENTS
!
Valuation of defined benefit plans (estimate)
The value of the defined benefit plans is based on
valuations from external actuaries. The valuation is based
on multiple actuarial assumptions, including discount
rates, expected return on plan assets, expected growth in
wages and salaries, mortality and retirement benefits.
STARK GROUP – Annual Report 2024
62
Introduction
Our
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Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
. CASH FLOW, ADJUSTMENTS
AND REVERSALS
. CASH FLOW, CHANGES
IN WORKING CAPITAL
EUR million 2023/24 2022/23
Financial expenses, net 221 197
Depreciation and amortisation 335 243
Bargain purchase gain - (205)
Gain from sale of properties and equipment (35) (3)
Income tax (29) 12
Other 8 25
Adjustments and reversals, non-cash 500 269
EUR million 2023/24 2022/23
(Increase) / decrease in inventories 46 101
(Increase) / decrease in trade and other receivables 40 117
Increase / (decrease) in trade and other payables (24) (182)
Changes in working capital 62 36
. CONTINGENT LIABILITIES
As part of the Group’s ordinary operations, the Group is
involved in various legal proceedings and disputes. The
outcome of these legal cases is not expected to have a
material significance for the Group’s financial position.
Contingent liabilities
A contingent liability is disclosed when the Group identifies
a possible obligation that arises from past events and
where the existence will be confirmed only by one or more
uncertain future events outside the Group’s control, it is not
probable that an outflow of resources will be required to
settle the obligation or the amount of the obligation cannot
be measured sufficiently reliably.
Contingent liabilities are disclosed based on the best
estimate of the expenditure required to settle the potential
obligation at the end of the reporting period.
ACCOUNTING POLICIES
§
. FEE TO STATUTORY AUDITORS
EUR million Deloitte
Other
audit
firms
2023/24
Total Deloitte
Other
audit
firms
2022/23
Total
Statutory audit 3 1 4 3 1 4
Assurance engagements - 0 0 - - -
Tax advisory - 1 1 - 0 0
Other services 0 - 0 0 0 0
Total fee to statutory auditors 3 2 5 3 1 4
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63
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Our
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Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
. SECURITIES
The shareholdings in the major group companies have
been pledged as security for the external financing
obtained by the single shareholder Winterfell Financing
S.à r.l. and the same major group companies are
jointly and several liable for the Term loans amounting
to EUR1,795m and the Senior Revolving Credit facilities
agreement with lenders up to EUR 371m.
. RELATED PARTIES
The Group has most of its financing from related parties
with the single shareholder Winterfell Financing S.à r.l.
The financing consists of several loans which to a certain
extent mirrors the conditions and maturities of the exter-
nal financing managed in the shareholder company. The
borrowers are Stark Group A/S (EUR 1,078m), Winterfell
Sweden AB (EUR 450m) and Winterfell Germany GmbH
(EUR 776m including capitalised interests). In general, the
financing consists of longer-term financing with varying
interest. In 2023/24 the weighted average interest rate
including amortisation of financing fees on the financing
with related parties was 6.6% (2022/23: 5.3%). Interest
is paid on a portion of the debt and accrues on the rest.
Interest expensed including amortisation of financing fees
in the financial period amounted to EUR 147m (2022/23:
EUR 103m).
Related parties are considered to be the parent company
Winterfell Financing S.à r.l. and its subsidiaries. Reference
is made to the list of group companies in note 6.10.
Other related parties with significant influence over
STARK Group A/S comprise Winterfell Financing S.à r.l.,
Winterfell S.à r.l., Winterfell Investments S.à r.l., Winterfell
Holdings S.à r.l., Winterfell ManCo I S.A., Winterfell
ManCo II S.A., Winterfell Topco S.à r.l. and the Company’s
Board of Managers. Furthermore, transactions with the
respective companies’ Boards of Directors, Supervisory
Boards and senior employees and their immediate family
members are included. Related parties also include
companies where the mentioned persons have significant
interests.
Remuneration to key management personnel is disclosed
in note 2.3.
Controlling interest
The ultimate shareholders of the company are limited
partnerships with CVC Capital Partners VII Limited acting
as General Partner.
The utilisation of credit facilities consist of drawdowns
on the senior revolving credit facilities (EUR 25m as of 31
July 2024) along with overdraft facilities carved out from
the senior revolving credit facilities (EUR 30m as of 31 July
2024).
As of 31 July 2024 the Group had pledged properties with
a book value of EUR 266m as security for the secured
bank loans. In addition, EUR 55m is pledged related to
pension liabilities.
The Group is utilising a trade receivable factoring
agreement as described in note 4.2. As of 31 July 2024
the agreement had an expiry date on 22 October 2024.
Subsequent to the balance sheet date the agreement has
been extended covering a facility of EUR 75m with new
expiry date on 22 July 2025.
. SUBSEQUENT EVENTS
STARK GROUP – Annual Report 2024
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Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
. LIST OF GROUP COMPANIES
Name Registered office
Voting and
ownership share
Parent:
STARK Group A/S Frederiksberg, Denmark
Investments:
Denmark and Greenland
LSF10 Wolverine BidCo ApS Frederiksberg, Denmark 100%
STARK Sourcing A/S Frederiksberg, Denmark 100%
STARK Danmark A/S Aarhus, Denmark 100%
Electro Energy A/S Albertslund, Denmark 100%
C.F. Richs Vej 115 ApS Aarhus, Denmark 100%
Fragtvej 7-9 ApS Aarhus, Denmark 100%
Jarlsberggade 10 ApS Aarhus, Denmark 100%
Stark Kalaallit Nunaat A/S Nuuk, Greenland 100%
Anpartsselskabet af 4.1.2024 Billund, Denmark 25%
K/S af 4.1.2024 II Billund, Denmark 25%
Name Registered office
Voting and
ownership share
Germany
Winterfell Germany GmbH Offenbach, Germany 100%
Stark Group Holding Germany GmbH Frankfurt, Germany 100%
Stark Deutschland GmbH Offenbach, Germany 100%
Melle Gallhöfer Dach GmbH Neus, Germany 100%
Fliesen Discount GmbH Berlin, Germany 100%
Dr. Sporkenbach GmbH Magdeburg, Germany 100%
Muffenrohr Tiefbauhandel GmbH Ottersweier, Germany 100%
Platten Peter Fliesenzentrum Nord GmbH Münster, Germany 100%
Germany – continued
Saxonia Baustoffe GmbH Dresden, Germany 87.50%
Sporkenbach GbR Magdeburg, Germany 80.95%
Balzer Group:
2
Balzer Verwaltungsgesellschaft mbH Marburg, Germany 67.40%
Chr. Balzer GmbH & Co. KG Marburg, Germany 67.34%
1. The company has been recognised as a joint venture and are hereby not fully consolidated.
2. The companies in the Balzer Group are owned through both vertical and horizontal ownerships and in total, the Group owns approximately 50% and as
such is deemed to have controlling influence. In this overview only the two top entities of the Balzer Group are included. The Balzer Group in total
comprises 8 entities. Measured on net sales, the Balzer group represents about 5% of the total German business.
Austria
STARK Group Holding Austria GmbH Eberstalzell, Austria 100%
Dach und Wand handels GmbH Eberstalzell, Austria 100%
Schilowsky Baustoffhandel GmbH Eberstalzell, Austria 100%
United Kingdom
STARK Group Holding UK 1 Ltd. Coventry, United Kingdom 100%
STARK Group Holding UK 2 Ltd. Coventry, United Kingdom 100%
STARK Building Materials UK Limited Coventry, United Kingdom 100%
STARK UK Property Holdings Limited Coventry, United Kingdom 100%
Norman Limited Coventry, United Kingdom 100%
Jewson Limited Coventry, United Kingdom 100%
STARK GROUP – Annual Report 2024
65
Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
Sweden
Winterfell Sweden AB Stockholm, Sweden 100%
DT Holding (Sweden) AB Stockholm, Sweden 100%
Beijer Byggmaterial AB Stockholm, Sweden 100%
Vagn Jensens Byggkomponenter AB Trelleborg, Sweden 100%
Kakeldax i Sverige AB Stockholm, Sweden 100%
Centro Kakel & Klinker AB Stockholm, Sweden 100%
BraByggare Sverige AB Stockholm, Sweden 50%
Vivaldi AB Stockholm, Sweden 51%
Lund Sandby 6:45 AB Malmö, Sweden 100%
Sierra-Stark HoldCo AB Sollentuna, Sweden 100%
Finland
Stark Suomi Oy Espoo, Finland 100% Espoo, Finland 100%
Norway
Neumann Bygg AS Oslo, Norway 100%
FagFlis Group Holding AS Oslo, Norway 100%
Flis Fram AS Oslo, Norway 100%
L-Flis & Interiør AS Oslo, Norway 100%
Odin Flissenter AS Oslo, Norway 100%
Stark Norway Propco AS Bergen, Norway 100%
Margrethe Jørgensen Vei 6 AS Bergen, Norway 100%
. LIST OF GROUP COMPANIES CONTINUED
Name Registered office
Voting and
ownership shareName Registered office
Voting and
ownership share
STARK GROUP – Annual Report 2024
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Introduction
Our
performance
Business
Financial
statements
Consolidated
financial
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Parent
company
financial
statements
Management
Reports
PARENT COMPANY
FINANCIAL
STATEMENTS
Income Statement
Statement of Financial Position
Statement of Changes in Equity
NOTES
BASIS OF REPORTING
Basis for reporting
Group accounting policies
INCOME STATEMENT
Net sales
Staff costs
Financial items
Taxation
INVESTED CAPITAL
Goodwill
Tangible noncurrent assets
Investments in subsidiaries
CAPITAL STRUCTURE AND FINANCING
Share capital and share premium
Payables to related parties
Proposed distribution of profit
OTHER FINANCIAL NOTES
Contingent liabilities
Securities
Related parties
Subsequent events
Reports
Introduction
Business
Our
performance
Management
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
67
INCOME STATEMENT
EUR million Note 2023/24 2022/23
Net sales 2.1 20 18
Gross Profit 20 18
Staff costs 2.2 (13) (9)
Other external operating expenses (5) (23)
Earnings before interest, tax, depreciation and amortisation (EBITDA) 2 (14)
Amortisation of goodwill (1) (2)
Earnings before interest and tax (EBIT) 1 (16)
Income from investments in subsidiaries 13 448
Financial income 2.3 81 31
Financial expenses 2.3 (116) (66)
Earnings before tax (21) 397
Income tax 2.4 3 4
Net earnings 5.3 (18) 401
STARK GROUP – Annual Report 2024
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Consolidated
financial
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Management
Reports
STATEMENT OF FINANCIAL POSITION
EQUITY AND LIABILITIESASSETS
EUR million Note
31 July
2024
31 July
2023
Equity
Share capital 5.1 2 2
Share premium 5.1 - -
Retained earnings 893 911
Total equity 895 913
Non-current liabilities
Payables to related parties 5.2 1,080 1,081
Total non-current liabilities 1,080 1,081
Current liabilities
Payables to related parties 5.2 1,093 736
Borrowings 55 -
Trade payables 1 2
Other liabilities 4 5
Total current liabilities 1,153 743
Total liabilities 2,233 1,824
TOTAL EQUITY AND LIABILITIES 3,128 2,737
EUR million Note
31 July
2024
31 July
2023
Non-current assets
Goodwill 3.1 2 3
Total intangible non-current assets 2 3
Tangible non-current assets
Improvement leasehold 3.2 2 -
Total tangible non-current assets 2 -
Investments in subsidiaries 3.3 2,150 1,744
Deferred tax asset 3 0
Receivables from related parties 725 708
Total financial non-current assets 2,878 2,452
Total non-current assets 2,882 2,455
Current assets
Deferred tax - 1
Receivables from related parties 89 71
Corporate tax receivables 4 10
Other receivables 5 4
Cash and cash equivalents 148 196
Total current assets 246 282
TOTAL ASSETS 3,128 2,737
STARK GROUP – Annual Report 2024
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69
Financial
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Consolidated
financial
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Parent
company
financial
statements
Management
Reports
STATEMENT OF CHANGES IN EQUITY
EUR million
Share
capital
Share
premium
Retained
earnings
Total
equity
Equity as of 1 August 2023 2 0 911 913
Changes in equity for 2023/24:
Net earnings - - (18) (18)
Equity as of 31 July 2024 2 0 893 895
Equity as of 1 August 2022 2 0 510 512
Changes in equity for 2022/23:
Net earnings - - 401 401
Equity as of 31 July 2023 2 0 911 913
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Our
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70
Financial
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Consolidated
financial
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Parent
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financial
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Management
Reports
. BASIS OF REPORTING
Basis of reporting
The Financial Statements of STARK Group A/S have been
prepared in accordance with the provisions of the Danish
Financial Statements Act for reporting class C – large
companies.
The Financial Statements are presented in million Euros,
which is the presentation currency of the Company.
. GROUP ACCOUNTING POLICIES
Recognition and measurement
The Financial Statements have been prepared under the
historical cost method.
Income in the form of dividends are recognised in the income
statement as earned. Furthermore, value adjustments of
financial assets and liabilities measured at fair value or
amortised cost are recognised. Moreover, all expenses
incurred to achieve the earnings for the year are recognised
in the income statement, including depreciation, amortisa-
tion, impairment losses and provisions as well as reversals
due to changed accounting estimates of amounts that have
previously been recognised in the income statement.
Assets are recognised in the balance sheet when it is
probable that future economic benefits attributable to the
asset will flow to 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.
Assets and liabilities are initially measured at cost. Subse-
quently, assets and liabilities are measured as described for
each item below.
Recognition and measurement consider predictable losses
and risks occurring before the presentation of the Annual
Report which confirm or invalidate affairs and conditions
existing at the balance sheet date.
Foreign currencies
Transactions in foreign currencies are translated to the
functional currency using the exchange rates at transaction
date. At each balance sheet date, monetary assets and
liabilities that are denominated in foreign currencies are
translated to the functional currency at the rate prevailing on
the balance sheet date. All differences are recognised in the
income statement.
Net sales
Service fee from subsidiaries is recognised over the service
period.
Other external operating expenses
Other external expenses comprise operating expenses such
as administration and professional services expenses.
Financial income and expenses
Financial income and expenses comprise interest realised
and unrealised exchange gains and losses as well as interest
surcharge and interest reimbursements under the Danish
Tax Prepayment Scheme.
Tax on result for the year
The Company is subject to the Danish rules for compulsory
joint taxation with the Group’s Danish Subsidiaries. Danish
subsidiaries are included in joint taxation from the time
they are acquired or incorporated by a Danish Group
company until the date that control is no longer effective.
The Company is administration company of the Danish joint
taxation group and, consequently, settles all payments of
corporation tax with the tax authorities.
In compliance with section 86(4) of the Danish Financial
Statements Act, the Company has not presented cash flow
statement on a stand-alone basis. Reference is made to the
consolidated cash flow statement of the Group.
The accounting principles are unchanged compared to
last year.
STARK GROUP – Annual Report 2024
Introduction
Our
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Business
71
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
The current Danish corporation tax is allocated by settling
joint taxation contributions between the jointly taxed com-
panies in proportion to their taxable income. In connection
with this, companies with tax losses receive joint taxation
contributions from companies that have been able to utilise
this loss to reduce their own tax profit/loss.
The tax for the year, consisting of current corporate income
tax, the year’s joint tax contribution and change in deferred
taxes - including as a result of a change in tax rate - are
recognised in the income statement with the part attribut-
able to the profit for the year and directly to equity with the
part that can is attributable to entries directly in equity. The
Company is subject to the Danish Tax Prepayment Scheme.
Interest reimbursement and interest surcharge have been
recognised in financial income and expenses.
Goodwill
Goodwill represents the excess of the cost of an acquisition
over the fair value of the Group’s share of the net identifiable
assets of the acquired subsidiary undertaking at the date of
acquisition.
The cost of goodwill is amortised in the income statement
over the useful live which is estimated to 10 years.
Investments in subsidiaries
Investments in subsidiaries are measured at cost. Where
cost exceeds the recoverable amount, write down is made
to this lower value. Write down of investments is presented
in the income statement as income from investments in
subsidiaries.
Prepayments
Prepayments comprise costs incurred relating to
subsequent financial years.
Cash and cash equivalents
Cash and cash equivalents include cash in hand and
deposits held at call with banks.
Borrowings
Interest-bearing loans from group enterprises are initially
recorded at fair value, net of attributable transaction
costs. Subsequent to initial recognition, interest-bearing
borrowings are stated at amortised cost with any difference
between proceeds and redemption value being recognised in
the income statement over the period of the borrowings on
an effective interest basis.
Current tax receivables and payables
Current tax liabilities and receivables are recognised in
the balance sheet as the expected taxable income for the
year adjusted for tax on taxable incomes for prior years
and tax paid on account. Surcharges or refunds under the
on-account taxation scheme are recognised in the income
statement in financial income and expenses.
Equity
Proposed dividend for the financial year is presented as a
separate item in equity.
Liabilities
Liabilities have been measured at amortised cost, which
corresponds to nominal value.
. GROUP ACCOUNTING POLICIES CONTINUED
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Our
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72
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
. NET SALES
. STAFF COSTS
. FINANCIAL ITEMS
. TAXATION
EUR million 2023/24 2022/23
Service fees from subsidiaries 20 18
Total net sales 20 18
EUR million 2023/24 2022/23
Salaries and wages 12 8
Pensions - contribution plans 1 1
Total staff costs 13 9
Compensation for the Executive Management:
Salaries and wages 3 5
Pensions - contribution plans 0 0
Other expenses for social security 0 0
Total compensation paid to the Executive Management 3 5
2023/24 2022/23
Average number of fulltime employees 56 49
EUR million 2023/24 2022/23
Financial income
Interests received from related parties 81 30
Other financial income - 1
Total financial income 81 31
Financial expenses
Interests on loans from related parties 91 54
Foreign exchange losses 4 2
Other interest expenses 21 10
Total financial expenses 116 66
EUR million 2023/24 2022/23
Current tax 2 3
Deferred tax recognised in income statement 1 1
Adjustment of current tax regarding previous years - 0
Total income tax 3 4
The members of the Executive Management as well as
other employees are entitled to a cash bonus based on
fulfilment of pre-defined financial and non-financial
targets.
Compensation paid to the Board of Directors in Stark
Group amounts to EUR 0.1m (2023/24: No compensation).
The Company has not established share-based incentive
programs.
1. A new member of the Executive Management was appointed effective from 1 September 2024. The disclosed compensation relates to the Executive
Management as of 31 July 2024.
STARK GROUP – Annual Report 2024
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Business
73
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
. GOODWILL
. TANGIBLE NONCURRENT ASSETS
EUR million 2023/24 2022/23
Cost as of 1 August 5 5
Additions - -
Cost as of 31 July 5 5
Amortisation as of 1 August (2) (0)
Amortisation charge for the period (1) (2)
Amortisation as of 31 July (3) (2)
Carrying amount as of 31 July 2 3
EUR million
Leasehold
improvement
Cost as of 1 August 2023 -
Additions 2
Cost as of 31 July 2024 2
Depreciation as of 1 August 2023 -
Depreciation for the year 0
Depreciation as of 31 July 2024 0
Carrying amount as of 31 July 2024 2
. INVESTMENTS IN SUBSIDIARIES
EUR million 2023/24 2022/23
Cost as of 1 August 2,650 2,621
Additions 406 36
Disposals - (7)
Cost as of 31 July 3,056 2,650
Impairment losses as of 1 August (906) -
Impairment for the period
2
0 (906)
Impairment losses as of 31 July (906) (906)
Carrying amount as of 31 July 2,150 1,744
1) Additions to investments in subsidiaries in 2023/24 of EUR 406 million relates to capital contributions to subsidiaries as part of normal ongoing
management of capital structures across the group.
2) In 2023/24, the investment in STARK Suomi Oy has been impaired by EUR 12 million and the impairment made in 2022/23 of EUR 12 million related to
Neumann Bygg AS has been reversed. In 2022/23 the company received EUR 1,310m in dividend from LSF10 Wolverine Bid Aps. EUR 894m of this has
been recognised as an impairment of the carrying value to the net asset value in LSF10 Wolverine Bid Aps as of 31 July 2023.
INVESTMENTS IN SUBSIDIARIES AS OF JULY ARE SPECIFIED AS FOLLOWS
Company Registered office
Voting and
ownership share
Winterfell Sweden AB Stockholm, Sweden 100%
Winterfell Germany GmbH Frankfurt, Germany 100%
Stark Danmark A/S Viby J, Denmark 100%
Stark Suomi Oy Espoo, Finland 100%
Neumann Bygg AS Oslo, Norway 100%
LSF10 Wolverine Bidco ApS Frederiksberg, Denmark 100%
Stark Group Holding Austria GmbH Eberstalzell, Austria 100%
STARK Building Materials UK Limited Coventry, UK 100%
Stark Group Holding UK 1 Limited Coventry, UK 100%
STARK GROUP – Annual Report 2024
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Business
74
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
. SHARE CAPITAL AND SHARE PREMIUM
. PAYABLES TO RELATED PARTIES
. PROPOSED DISTRIBUTION OF PROFIT
EUR million
Number of
shares
Share
capital
Share
premium Total
Changes in equity for 2023/24:
Balance as of 1 August 2023 15.000.000 2 0 2
Balance as of 31 July 2024 15.000.000 2 0 2
Changes in equity for 2022/23:
Balance as of 1 August 2022 15.000.000 2 0 2
Balance as of 31 July 2023 15.000.000 2 0 2
Changes in equity for 2021/22:
Balance as of 1 August 2021 40.000 1 0 1
Non-cash capital increase 14.960.000 1 - 1
Balance as of 31 July 2022 15.000.000 2 0 2
EUR million 2023/24 2022/23
Maturity analysis of payables to related parties
Within 1 year 1,093 736
Between 1 and 5 years 1,080 1,081
After 5 years - -
Carrying amount as of 31 July 2,173 1,817
EUR million 2023/24 2022/23
Proposed distribution of profit:
Dividend - -
Retained earnings (18) 401
Total (18) 401
STARK GROUP – Annual Report 2024
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Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
. SECURITIES
The shares in the major subsidiaries with a carrying
amount of EUR 2,150m have been pledged as security
for external financing obtained by the single shareholder
Winterfell Financing S.à r.l. and the same major subsidiar-
ies are jointly and several liable for Term loans amounting
to EUR 1,795m and Senior Revolving Credit facilities
agreement with lenders up to EUR 371m. The utilisation
of credit facilities consist of drawdowns on the senior
revolving credit facilities (EUR 25m as of 31 July 2024)
along with overdraft facilities carved out from the senior
revolving credit facilities (EUR 30m as of 31 July 2024).
. CONTINGENT LIABILITIES
Stark Group A/S has provided guarantees for the
obligations of its subsidiaries as part of normal business
operations. These guarantees primarily cover the financial
obligations of certain subsidiaries mainly related to lease
contracts, were as Stark Group A/S has guaranteed the
repayment of certain lease obligations undertaken by
its subsidiaries. As of 31 July 2024, the total value of the
guarantees provided by the Parent Company amounts
to EUR 145m. Stark Group A/S have recharged a risk
premium of the guarantees to it's subsidiaries of EUR 2m.
This have been recognised in net sales.
These guarantees are not expected to be called upon,
as all subsidiaries currently maintain a strong financial
position and are fully capable of meeting their contractual
obligations. However, Stark Group A/S regularly monitors
the financial performance and risk exposure of its
subsidiaries to mitigate any potential future liabilities.
Stark Group A/S has operating lease commitments
amounting to EUR 3m as of 31 July 2024.
The Company is administration company of the Danish
joint taxation group. As a management company, the
Company assumes unlimited and joint liability for Danish
company taxes for the Danish companies included in the
joint taxation. The total known net tax liability of jointly
taxed companies on corporation taxes is EUR 14m as of 31
July 2024.
Any subsequent corrections of joint taxation income could
result in the Company’s liability amounting to a larger
amount.
. RELATED PARTIES
On 4 May 2021 Stark Group A/S utilised a EUR 628m
shareholder loan provided by the parent company,
Winterfell Financing S.à r.l. The Loan is a subordinated
loan. The loan will mature on 4 May 2028. Interest on the
loan is set to reflect an arm’s length transaction. Interest
expensed in the financial year amounts to EUR 31m
(2022/23: EUR 22m).
On 31 March 2023 Stark Group A/S utilised a EUR 450m
shareholder loan provided by the parent company,
Winterfell Financing S.à r.l. The Loan is a subordinated
loan. The loan will mature on 31 March 2026. Interest
on the loan is set to reflect an arm’s length transaction.
Interest expensed in the financial year amounts to EUR
43m (2022/23: EUR 13m).
Controlling interest
Winterfell Financing S.à r.l., 29, Avenue de la Porte Neuve,
Luxembourg is the parent company and owns 100% of the
share capital of the Company. The ultimate shareholders
of the company are limited partnerships with CVC Capital
Partners VII Limited acting as General Partner.
The Group’s related parties with significant influence
comprise Winterfell Financing S.à r.l., Winterfell S.à r.l.
and the Company’s Board of Managers. Furthermore,
transactions with the respective companies’ Boards of
Directors, Supervisory Boards and senior employees and
their immediate family members are included. Related
parties also include companies where the mentioned
persons have significant interests.
There have been no transactions with the Board of
Directors, Executive Management, significant sharehold-
ers, group enterprises or other related parties, except for
intercompany transactions and regular salaries and bonus
to the Executive Management as disclosed in note 2.2.
All transactions are made on an arm’s length basis and,
according to the Danish Financial Statements Act §98c, 7,
they are not disclosed.
The Company and its subsidiaries are included in the
consolidated financial statements of Winterfell Topco
S.à r.l. which can be obtained at the following address:
Winterfell Topco S.à r.l.
29, Avenue de la Porte Neuve
L-2227 Luxembourg
R.C.S. Luxembourg: B 250.784
. SUBSEQUENT EVENTS
No events have occurred after the balance sheet date that
materially affect the Company’s financial statements.
STARK GROUP – Annual Report 2024
Introduction
Our
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Parent
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Management
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MANAGEMENT’S STATEMENT ON THE
CONSOLIDATED FINANCIAL STATEMENTS
Board of Directors
(Chair )
(Vice-chair )
Executive Management
STARK GROUP – Annual Report 2024
Introduction
Our
performance
Business
78
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
INDEPENDENT AUDITOR’S REPORT
STARK GROUP – Annual Report 2024
Introduction
Our
performance
Business
79
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
Business Registration No 33 96 35 56
Identification No (MNE) mne32208
Identification No (MNE) mne34490
INDEPENDENT AUDITOR’S REPORT CONTINUED
STARK GROUP – Annual Report 2024
Introduction
Our
performance
Business
80
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
COMPANY INFORMATION
Company STARK Group A/S
Denmark
CVR No. 41 95 27 25
Financial year: 1 August – 31 July
Incorporated: 16 December 2020
Current financial period: 1 August 2023 – 31 July 2024
4th financial year
Executive Management Søren P. Olesen (CEO)
Thomas Ahle (CFO)
Board of Directors Jens Bjørn Andersen (Chair)
Søren Vestergaard-Poulsen (Vice-chair)
Christoffer Helsengreen Sjöqvist
Philip Bendorff Røpcke
Søren P. Olesen
Thomas Ahle
Auditor Deloitte
Statsautoriseret Revisionspartnerselskab
Annual General Meeting 29 November 2024
STARK GROUP – Annual Report 2024
Introduction
Our
performance
Business
81
Financial
statements
Consolidated
financial
statements
Parent
company
financial
statements
Management
Reports
