NOVEM ANNUAL REPORT 2023/24
Established in
1947
4,887
12
employees
worldwide
locations
worldwide
NOVEM AT A GLANCE
The Novem Group operates from the German town of Vorbach and is
the world leader in high-quality trim elements and decorative function
elements in car interiors. The customers include all major premium
carmakers worldwide. They appreciate the innovative technology,
exclusivity and exquisite design of Novem’s products.
NOVEM ANNUAL REPORT 2023/24
2
GLOBAL LEADER IN HIGH-END CAR INTERIORS
We build perfect decorative
trim elements for the
best cars in the world.
Vision
NOVEM ANNUAL REPORT 2023/24
3
OUR LOCATIONS
Germany
Vorbach
Eschenbach
Luxembourg
Czech Republic
China
USA
Contern
Pilsen
Langfang
Atlanta
Cottondale
Detroit
Italy
Slovenia
Bergamo
Žalec
Mexico
Querétaro
Honduras
Tegucigalpa
Americas
Europe
Asia
1,780 employees
2,434 employees
673 employees
NOVEM ANNUAL REPORT 2023/24
4
KEY RESULTS
In accordance with the European Securities and Markets Authority (ESMA) guide-
lines on Alternative Performance Measures (APMs), the Group provides a defini-
tion, the rationale for use and a reconciliation of APMs used. The Group uses the
APMs shown in the following table. The definitions and required disclosures of
all APMs are provided in the glossary of this Annual Report.
All mentioned APMs are used to track the Group’s operating performance. It
is neither required by nor presented in accordance with IFRS. It is also not a
measure of financial performance under IFRS and should not be considered as
an alternative to other indicators of operating performance, cash flow or any
other measure of performance derived in accordance with IFRS.
in € million
FY 2022/23
FY 2023/24
Income statement
Revenue
700.3
635.5
Adj. EBIT
81.7
69.1
Adj. EBIT margin (%)
11.7%
10.9%
Adj. EBITDA
114.2
102.0
Adj. EBITDA margin (%)
16.3%
16.1%
Cash flow
Capital expenditure
17.9
16.1
Capital expenditure as % of revenue
2.6%
2.5%
Free cash flow
84.5
53.8
in € million
31 Mar 23
31 Mar 24
Balance sheet
Trade working capital
53.3
50.5
Total working capital
124.0
132.7
Net financial debt
123.0
164.9
Net leverage (x Adj. EBITDA)
1.1x
1.6x
NOVEM ANNUAL REPORT 2023/24
5
ABOUT THIS REPORT
Novem Group publishes both financial and non‑financial informa-
tion in its Annual Report 2023/24. The financial year of Novem
Group S.A. ends on 31 March and therefore covers the period
from 1 April 2023 to 31 March 2024. This Annual Report includes
a Non‑financial Report in accordance with the Non‑Financial
Reporting Directive (NFRD), Luxembourg Law and with reference
to the Global Reporting Initiative (GRI) Standards.
The consolidated financial statements of Novem Group S.A. and
the stand‑alone financial statements of Novem Group S.A. were
audited by KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG).
EDITORIAL NOTE
The report is only available in English and solely pub-
lished in digital form. All references to people such
as employees, shareholders, etc. in this report apply
equally to all identities.
NOVEM ANNUAL REPORT 2023/24
6
TABLE OF CONTENTS
CONTENTS
1 TO OUR SHAREHOLDERS
4 CONSOLIDATED FINANCIAL
STATEMENTS
Letter from the CEOꢀ
ꢀ9
Report of the Supervisory Boardꢀ
ꢀ11
Consolidated statement of comprehensive incomeꢀ
ꢀ64
Novem and the capital marketꢀ
ꢀ13
Consolidated statement of financial positionꢀ
ꢀ65
Consolidated statement of cash flowsꢀ
ꢀ66
1
Consolidated statement of changes in equityꢀ
ꢀ67
2 NON-FINANCIAL REPORT
Notes to consolidated financial statementsꢀ
ꢀ68
TO OUR
SHAREHOLDERS
Responsibility statementꢀ
ꢀ116
Organisationꢀ
ꢀ16
Setup and organisation of the Management Boardꢀ
ꢀ117
2
Complianceꢀ
ꢀ21
Independent auditor’s reportꢀ
ꢀ118
Supply chainꢀ
ꢀ24
NON-FINANCIAL
Employees and societyꢀ
ꢀ26
REPORT
5 ANNUAL ACCOUNTS
Energy and emissionsꢀ
ꢀ30
3
Balance sheetꢀ
ꢀ123
GROUP
3 GROUP MANAGEMENT REPORT
Profit and loss accountꢀ
ꢀ124
MANAGEMENT
REPORT
Notes to the annual accountsꢀ
ꢀ125
4
Corporate structure and business activitiesꢀ
ꢀ34
Responsibility statementꢀ
ꢀ134
Key eventsꢀ
ꢀ35
Independent auditor’s reportꢀ
ꢀ135
Business and general environmentꢀ
ꢀ37
CONSOLIDATED
FINANCIAL
Financial performanceꢀ
ꢀ39
STATEMENTS
6 ADDITIONAL INFORMATION
Financial positionꢀ
ꢀ43
5
Cash flowsꢀ
ꢀ46
Segment reportingꢀ
ꢀ47
Financial calendarꢀ
ꢀ140
ANNUAL
Stand‑alone results of operations and financial position of
Contactꢀ
ꢀ140
ACCOUNTS
Novem Group S.A.ꢀ
ꢀ48
Imprintꢀ
ꢀ140
6
Risks and opportunitiesꢀ
ꢀ49
Glossaryꢀ
ꢀ141
Corporate governance statementꢀ
ꢀ58
Disclaimerꢀ
ꢀ143
ADDITIONAL
Subsequent eventsꢀ
ꢀ61
INFORMATION
Outlookꢀ
ꢀ62
NOVEM ANNUAL REPORT 2023/24
7
Burned wood open pore
1
To our
shareholders
LETTER FROM THE CEO
CONTENTS
Ladies and gentlemen,
In the present time of transition in the entire automotive industry, we have
focused above all on identifying the best possible answers to the economic
challenges for Novem. Even though market conditions remain challenging
in the short term, we see good prospects for the future of Novem. This is
based on a solid order intake indicating positive business development in
1
the medium term and the acquisition of new customers such as Avatr and
Tesla. Reflecting the trend towards shorter development cycles, various
platforms for which Novem has been newly nominated will start production
TO OUR
within a reasonable period of time.
SHAREHOLDERS
2
Starting the year at a robust margin despite the difficult market environment,
we saw continued unfavourable trading conditions accompanied by softer
demand over the course of the year. Although the ongoing geopolitical and
NON-FINANCIAL
economic uncertainties remain challenging, we assume that most of these
REPORT
conditions are temporary and are seeing small signs of an easing of the
3
economic situation. In contrast to the previous year, when positive currency
effects played into our hands, we experienced the opposite, which, together
with a number of other factors, meant that we were unable to achieve growth
GROUP
for the year as a whole. Against this backdrop, we are particularly grateful
MANAGEMENT
for the commitment of our employees. Thanks to their dedication, Novem
REPORT
stands on a stable foundation from which we are facing up to the adverse
4
conditions, remaining patient as well as vigilant and utilising our resilience.
We maintain our focus on acquiring new customers and expanding our busi-
CONSOLIDATED
ness with premium brands. As an enhancement to our customer portfolio,
FINANCIAL
we have succeeded in winning Avatr, Kia and Tesla as new customers, which
STATEMENTS
marks a milestone in strengthening the Group’s position in all regions. Our
5
local tech centre in Langfang, an independent engineering hub for custom-
ers in the Asian market, was key to gaining Avatr as a new Chinese premium
customer and thus also consolidating our good reputation in Asia. In this
ANNUAL
way, our successful China strategy opens up excellent prospects for further
ACCOUNTS
acquisitions, growth and close cooperation with our customers there.
6
Looking at Europe and Americas, we can report a remarkable business
success. For the facelift of the Tesla Model Y, we were not only nominated
ADDITIONAL
for the aluminium and carbon interior design but also for a matching key
INFORMATION
Markus Wittmann
NOVEM ANNUAL REPORT 2023/24
9
Chief Executive Officer
CONTENTS
exterior part. This is the aluminium tailgate for which
As the production of climate-neutral cars is the clear
cost structure and taking reasonable measures to
Novem offers the certainty of getting the best out of the
goal for all those involved, we are contributing our
safeguard our business model, including the closure
material. The decision in favour of Novem was made at
share by achieving climate neutrality in Germany by
of the Italy plant and personnel adjustments in Europe.
a strategic level, as we can draw on sound know-how in
2025, in Europe by 2030 and globally by 2035. More
Going forward, we uphold our mid-term guidance of
the processing of aluminium. After all, it shows recogni-
than ever, we want to fulfil our responsibility within our
5–6% revenue growth p.a. and an Adj. EBIT margin
tion of our extensive expertise and excellent knowledge
supply chains and therefore take great care to ensure
of 14–15%.
of materials. We use familiar technologies and transfer
that our suppliers meet high environmental, social and
1
our many years of experience from interior to exterior
sustainability standards.
On behalf of the Management Board and our employ-
design. Production will start in 2025.
ees, I would like to thank you all for your support in
Following our first FSC® certification Preferred by
the financial year 2023/24. We value you as loyal
TO OUR
For us, sustainability is a fundamental attitude we act
Nature, which we received for our site in Langfang, we
shareholders who stand by the Novem Group. I am
SHAREHOLDERS
on at all levels for the benefit of the environment, as
are planning to carry out such certification for our site
convinced that we are ideally positioned to face the
2
well as for the benefit of our employees, our customers
in Pilsen in the financial year 2024/25. The certification
tasks ahead and to meet current challenges. I am there-
and our suppliers. As a global corporate citizen, we con-
states that we meet the requirements of the FSC stand-
fore looking forward with great enthusiasm to working
sider ourselves responsible for the society and environ-
ard with the Chain of Custody and Controlled Wood
together and exchanging ideas in the new financial year
NON-FINANCIAL
ment in which we operate. Ensuring the health of our
System. One of the areas our research is currently
with Novem’s best interests in mind.
REPORT
staff and consistently complying with workplace safety
focussing on is bio-based solutions in which renew-
3
standards worldwide is important to us and is crucial
able raw materials replace fossil-based ingredients. In
Kind regards,
to Novem’s success. Since we began the process of
this way, we are making a further active contribution
ISO 45001 occupational health and safety certification
to environmental protection while keeping our eye on
GROUP
in March 2022, this has been successfully completed
top quality.
MANAGEMENT
for the German sites, Langfang (China), Pilsen (Czech
REPORT
Republic), Querétaro (Mexico) and Žalec (Slovenia). To
Considering the overall situation, we assess Novem’s
4
achieve greater sustainability, we are progressing as
future business prospects with cautious optimism.
Markus Wittmann
planned towards our aim of greenhouse gas neutrality.
We are managing the challenges by improving our
Chief Executive Officer
CONSOLIDATED
FINANCIAL
STATEMENTS
5
“ Our strategic direction is proving to be right, and we
have a solid and resilient foundation on which we will
ANNUAL
ACCOUNTS
further build for the future.ꢀ”
6
— Markus Wittmann (CEO)
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
10
REPORT OF THE
SUPERVISORY BOARD
CONTENTS
Dear shareholders,
The financial year ending 31 March 2024 was still affected by several
geopolitical uncertainties and their direct and indirect effects on the
automotive industry. Worldwide economic uncertainties still tense the
1
supply chains. Novem had to cope with market weaknesses and the
ongoing volatile call‑offs by OEMs at a significantly lower level. It was
the Company’s aim to stabilise the ability to act economically and
TO OUR
improve costs as much as possible.
SHAREHOLDERS
2
In the financial year ending 31 March 2024, the Supervisory Board of
Novem Group S.A. diligently fulfilled its duties in accordance with the
statutory requirements and the Company’s Articles of Association.
NON-FINANCIAL
The Supervisory Board consistently provided counsel and continuously
REPORT
monitored the work of the Management Board in terms of strategic
3
and operational decisions as well as governance topics and compli-
ance. Actions of the Management Board were approved by the Super-
visory Board as mandated by the Articles of Association following
GROUP
a thorough review. In the financial year ending 31 March 2024, the
MANAGEMENT
Supervisory Board consisted of Dr. Stephan Kessel (Chairman), Mark
REPORT
Wilhelms (Deputy Chairman), Natalie C. Hayday, Florian Schick and
4
Philipp Struth.
The Supervisory Board held a total of seven meetings and made one
CONSOLIDATED
circular resolution during the financial year ending 31 March 2024. In
FINANCIAL
two of seven of the Supervisory Board meetings, all members were
STATEMENTS
present, while the majority of the members were present in person.
5
In the meetings, the Management Board regularly provided compre-
hensive updates to the Supervisory Board on the Group’s status and
performance, including opportunities and risks, its market position,
ANNUAL
business trajectory as well as relevant financial data. The discussions
ACCOUNTS
were founded on detailed reports, both verbal and written, regularly
6
presented by the Management Board. Moreover, the Management
Dr. Stephan Kessel
Board and the Supervisory Board upheld frequent communication also
Chairman of the Supervisory Board
outside of the regular meetings to exchange crucial group-related infor-
ADDITIONAL
mation. This close collaboration also included strategy discussions as
INFORMATION
NOVEM ANNUAL REPORT 2023/24
11
CONTENTS
well as information on organisational development. As
the Second Shareholders’ Rights Directive (SRD II, Direc-
On behalf of the Supervisory Board, I would like to thank
Frank Schmitt’s mandate ended on 24 August 2023,
tive (EU) 2017/828). The Remuneration and Nomination
the Management Board of Novem Group S.A. for their
the Supervisory Board appointed Maria Eichinger as
Committee held four meetings via conference calls. All
continued excellent performance throughout the last
a member of the Management Board effective as of 1
members attended all meetings of the Remuneration
financial year and their ongoing open and efficient coop-
September 2023. After Günter Brenner stepped down
and Nomination Committee.
eration, regardless of the personnel changes. I would
as CEO of the Company and member of the Manage-
also like to extend my appreciation to all employees
ment Board on 30 September 2023, Markus Wittmann
The Supervisory Board examined the Company’s annual
for their loyalty and support towards the Company’s
1
was appointed as a member of the Management Board
accounts, the consolidated financial statements and
success during demanding times and, last but not least,
effective from 1 October 2024 by the Supervisory Board
the Group Management Report for the financial year
our shareholders for their continuous support.
in the course of the succession planning.
ending 31 March 2024. Representatives of the audi-
TO OUR
tor KPMG attended the meetings of the Audit and Risk
Luxembourg, 17 June 2024
SHAREHOLDERS
During the reporting period, the Audit and Risk Com-
Committee on 25 May 2023, 22 June 2023, 8 February
On behalf of the Supervisory Board of Novem Group S.A.
2
mittee consisted of Mark Wilhelms (Chairman), Dr.
2024 and 22 May 2024, at which the financial state-
Stephan Kessel and Natalie C. Hayday. Significant
ments were examined. The representatives of the
Yours sincerely,
questions related to auditing, accounting, risk manage-
auditor delivered detailed reports on their findings,
NON-FINANCIAL
ment, compliance and internal control systems were
accompanied by a written presentation and were on
REPORT
especially reviewed by the Audit and Risk Committee. It
hand to offer further explanations and opinions. The
3
monitored the effectiveness of the internal control sys-
Supervisory Board did not raise objections to the Com-
tem, the risk management system, the internal audit-
pany’s annual accounts or to the consolidated financial
Dr. Stephan Kessel
ing system and the compliance management system.
statements drawn up by the Management Board for the
Chairman of the Supervisory Board
GROUP
The Audit and Risk Committee discussed the quarterly
financial year ending 31 March 2024 and to the audi-
MANAGEMENT
reports, the relationship with investors as well as the
tors’ presentation. Additionally, the Supervisory Board
REPORT
audit assignment to KPMG Luxembourg, including the
approved the Non‑financial Report of Novem Group S.A.
4
focus areas of the audit. In the financial year ending
31 March 2024, the Committee held five meetings. All
The Supervisory Board agreed to the proposal of the
members were present at all of the five meetings. All
Management Board, recommended by the Audit and
CONSOLIDATED
meetings were held via conference calls.
Risk Committee, and approved the Company’s annual
FINANCIAL
accounts and the consolidated financial statements for
STATEMENTS
In the reporting period, the Remuneration and Nomina-
the financial year 2023/24. The auditor issued unquali-
5
tion Committee was composed of Dr. Stephan Kessel
fied audit opinions on 17 June 2024.
(Chairman), Mark Wilhelms and Natalie C. Hayday. The
Committee discussed all remuneration and nomination-
During the financial year ending 31 March 2024, there
ANNUAL
related topics. It prepared the Remuneration Report in
were no conflicts of interest between the members of
ACCOUNTS
accordance with the Luxembourg Law of 1 August 2020,
the Supervisory Board and the Company.
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
12
NOVEM AND THE CAPITAL MARKET
CONTENTS
Stock market
consecutive year of loss with a decline of -11.2%. The
index showed a modest recovery over the first three
Expectations in the run-up to the stock market year
months of 2024.
2023 were not overly optimistic. Although the year
began with continued elevated inflation rates and
During 2023, production disruptions due to semi-
fears of recession, it got off to a surprisingly good start,
conductor shortages became less frequent, and the
predominantly carried by technology stocks. However,
automotive sector seems to have found its new normal
1
this was quickly clouded again in March by a minor
on this topic. Nevertheless, other challenges, such as
banking crisis that wiped out one of the best-known
wage inflation, the shift to electric vehicles and the Red
European banks and some smaller US banks. The
Sea crisis keep the industry on its toes.
TO OUR
Federal Reserve System (Fed) announced four interest
SHAREHOLDERS
rate hikes in the US up until July 2023 and held rates
During the reporting period (1 April 2023 to 31 March
2
steady for the rest of the year after first signs of nor-
2024), the broad MSCI World Index recorded a sig-
malising inflation rates emerged. The European Central
nificant increase of 22.6%. With a surge of 28.1%, the
Bank (ECB) pursued a similar approach by raising the
S&P500 even topped this performance. A glance at
NON-FINANCIAL
interest rate six times up to September and keeping it
Europe shows that the EURO STOXX 50 also developed
REPORT
stable since then. Statements by the Fed and ECB in
favourably with a growth of 17.9%. In Germany, the blue
3
conjunction with easing inflation rates and stabilising
chips in the DAX rose by 18.4%, clearly outperform-
economic data fuelled expectations of interest rate
ing small caps. The corresponding SDAX recorded a
cuts in the near future. This ultimately triggered a rally,
comparatively lower but nevertheless solid increase
GROUP
particularly towards the end of 2023, making it a pros-
of 8.5%. Looking at our benchmark index, the DAX-
MANAGEMENT
perous year on the stock market, albeit characterised
subsector Auto Parts & Equipment posted a moder-
REPORT
by a great deal of turbulence and volatility. As 2024 gets
ate plus of 2.5% and thus demonstrated an apparent
4
underway, the euphoria seems to continue with several
underperformance.
major indices trading at or close to their all-time highs
after the first quarter of the calendar year.
CONSOLIDATED
Stock performance
FINANCIAL
While equities in the US and Europe have performed
STATEMENTS
very well over the course of 2023, the picture in China
On 3 April 2023, Novem started its financial year
5
was rather the opposite. Although all signs pointed to
2023/24 at a share price of €9.86. After a few weeks
a flourishing 2023 following the end of the strict zero‑
of a sideways development, the share marked its high
Covid policy, China’s economy has not recovered as
at €11.30 on 11 August 2023. This was followed by
ANNUAL
strongly as many investors had hoped due to a string of
declining share prices, which ultimately led to the low
ACCOUNTS
problems. Probably the biggest concern was the severe
for the financial year and an all‑time low of €5.20 on 20
6
crisis in the property sector, which worsened towards
March 2024. The stock closed the financial year with a
Dr. Johannes Burtscher
the end of the year. This also weighed on the stock
slight recovery at €5.70 on 28 March 2024.
Chief Financial Officer
market and led to the MSCI China marking its third
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
13
CONTENTS
Annual General Meeting
payment for the financial year 2023/24 at the Annual
and Frankfurt, facilitating one‑on‑one interactions with
General Meeting on 22 August 2024. The decision is
existing shareholders and potential investors.
Novem’s Annual General Meeting (AGM) was held on
merely based on the overall economic uncertainties
24 August 2023, at which 92.4% of the voting share
and poor market development. Furthermore, this will
Recognising the paramount importance of actively
capital was represented. The AGM approved all items
help in coping with the current volatile and still difficult
listening to stakeholders and valuing their input, the IR
on the agenda by a large majority, including the Remu-
trading environment, which only allows for a limited
team has identified the persistently low trading volume
neration Report, KPMG as the independent auditor and
visibility.
as a key challenge. Despite the need for patience in
1
the dividend distribution. For the financial year 2022/23,
bolstering trading activity, efforts to address this issue
Novem paid a dividend of €1.15 (PY: €0.40) per share.
will continue. To this end, ODDO BHF was appointed as
Investor Relations activities
The amount comprised an ordinary dividend of €0.40
the second designated sponsor alongside mwb fair-
TO OUR
per share and a special dividend of €0.75 per share. A
trade. Novem is particularly eager to invite investors
SHAREHOLDERS
strong free cash flow and low net leverage ratio for the
Given the constantly shifting market landscape, it was
and analysts to its central office to provide a first‑hand
2
financial year 2022/23 paved the way for this special
essential for the Investor Relations (IR) team to uphold
impression of the products and production processes,
dividend and shares Novem’s success with its share-
a continuous, transparent dialogue with capital mar-
thereby rendering its business model and potential
holders even beyond the targeted payout ratio. With a
ket stakeholders. This involved numerous one-on-one
more tangible.
NON-FINANCIAL
total distribution of €49.5 million, this corresponded to
meetings and conference calls alongside the regular
REPORT
99.0% of the net income.
quarterly investor and analyst conferences to foster
3
even treatment, timely disclosure of information and
SHARE DATA
sustained engagement. Furthermore, the team con-
Dividend
as of 31 March 2024
ducted three roadshows – two digitally and one in
GROUP
Frankfurt – to establish lasting contacts and increase
MANAGEMENT
In agreement with the Supervisory Board, the Manage-
market visibility for the share. Additionally, Novem
REPORT
ment Board will propose the suspension of the dividend
participated in three conferences in London, Munich
• Ticker symbol: NVM
4
• ISIN: LU2356314745
• WKN: A3CSWZ
CONSOLIDATED
“ Despite facing tough market conditions,
FINANCIAL
• Frankfurt Stock Exchange
STATEMENTS
• Market segment: Prime Standard
5
Novem once again managed to deliver
• Number of shares: 43,030,303
• Dematerialised shares with no nominal value
a solid financial performance.ꢀ”
ANNUAL
• Market capitalisation: €245,272,727
ACCOUNTS
• Highest price FY 2023/24: €11.30
— Dr. Johannes Burtscher (CFO)
6
• Lowest price FY 2023/24: €5.20
• Closing price: €5.70
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
14
Fabrics made of recycled yarn
2
Non‑financial
Report
ORGANISATION
DEMONSTRATING FUNCTIONALITY
AND SUSTAINABILITY
CONTENTS
Business model
Companies of the Novem Group
As a prime example at the Novem Interior
World, the new Cocoon illustrates our so-
Novem was founded in 1947 and can look back on
•
Novem Group S.A.
phistication in the interaction of technology
decades of success. Over the years, we have grown
•
Novem Group GmbH
and material for decorative interior com-
continuously, tapped into new markets and diversified
•
Novem Beteiligungs GmbH
ponents. With many years of experience
our product and material portfolio. Novem is the global
•
Novem Deutschland GmbH
in developing premium trim elements, the
market leader for high‑quality trim parts such as centre
•
Novem Car Interior Design GmbH
Cocoon stands for a comfortable place for
1
consoles, beltlines or dashboards as well as decora-
•
Novem Car Interior Design Vorbach GmbH
passengers where future innovations can be
tive functional elements in car interiors. In 2023/24,
•
Novem Car Interior Design Metalltechnologie GmbH
explored in the smallest space. Sustainable
we delivered around 22.4 million trim elements for a
•
Novem Car Interior Design S.p.A. Bergamo
materials such as bamboo, cork and paper
TO OUR
wide range of vehicles, with a key focus on the pre-
•
Novem Car Interior Design k.s.
meet hidden morphing buttons and wire-
SHAREHOLDERS
mium car segment. Our customer base is continuously
•
Novem Car Interior Design d.o.o.
less charging solutions. A camera-assisted
2
expanding and includes the world’s leading premium
•
Novem Car Interior Design, Inc.
display that reacts to its surroundings com-
car manufacturers.
•
Novem Car Interior Design Mexico S.A. de C.V.
pletes showcasing the trends in car interiors.
•
Novem Car Interior Design S. de R.L.
NON-FINANCIAL
Novem Group S.A. has been listed on the Frankfurt
•
Novem Car Interiors (China) Co., Ltd.
REPORT
Stock Exchange since 19 July 2021.
3
Economic stability and capacity for
Novem locations worldwide
transformation
GROUP
MANAGEMENT
•
Europe: 2,434 employees | Czech Republic, Ger-
The automotive industry is undergoing a fundamental
REPORT
many, Italy, Luxembourg, Slovenia
transformation. Electrification, autonomation and digi-
4
•
Americas: 1,780 employees | Honduras, Mexico,
talisation are changing the way vehicles are designed,
USA
manufactured and used. Along with these develop-
•
Asia: 673 employees | China
ments, the concept of the vehicle interior is also chang-
CONSOLIDATED
ing. New surfaces and spaces are emerging, presenting
FINANCIAL
From our central office in Vorbach in Bavaria, Germany,
an opportunity to redesign the interior. Furthermore, the
STATEMENTS
we manage our global network of production, logis-
rise of autonomous driving is adding an experiential
Cocoon uniting expertise in technologies
5
tics and sales locations. The parent company Novem
dimension to this space, prompting consumers to have
and materials
Group S.A. is located in Contern, Luxembourg. We cur-
ever higher expectations of functionality and comfort.
rently have 12 locations in Europe, Americas and Asia
ANNUAL
and employ 4,887 people worldwide. Our international
Being the global industry leader, Novem wants to
Sustainability plays a central role here: with renew-
ACCOUNTS
presence helps us to be close to our customers and to
actively shape this change. We are responding to the
able and recycled raw materials as well as a design
6
distribute our products worldwide.
transformation of the industry with targeted invest-
for circularity, we reduce our ecological footprint and
ments to prepare our employees and our locations
create sustainable values for our customers. For
for the challenges ahead and to drive forward the
example, we are researching alternative materials
ADDITIONAL
development of new technologies and innovation.
such as bio‑based synthetics, water‑based lacquers
INFORMATION
NOVEM ANNUAL REPORT 2023/24
16
CONTENTS
Product safety and quality
and one-material concepts. We are also developing
After Novem disclosed a part of its business activities
new designs that cater to our customers’ increasing
as eligible in financial year 2021/22 in accordance with
demands for functionality, sustainability and quality.
the widespread interpretation of the EU taxonomy for
Our products are not safety-relevant components in
Our spirit of research is reflected in the large number
automotive suppliers at the time, the EU Commission
the vehicle. Nevertheless, we are committed to high
of patents held by Novem.
updated the regulations on the EU taxonomy. For finan-
standards of quality and safety along the entire value
cial year 2023/24, all of Novem’s business activities had
chain – from planning and manufacturing to the deliv-
A solid economic foundation enables us to make invest-
been reassessed regarding the latest developments of
ery to our customers. We aspire to the highest quality
1
ments that secure our future viability as a company. In
the EU taxonomy.
and, therefore, use high-end materials and modern
the financial year 2023/24, the Novem Group achieved
production processes. At all its locations, Novem has
sales of €635.5 million (PY: €700.3 million).
Even so the newly added activity 3.18 Manufacture of
a Quality Management System certified in conformity
TO OUR
automotive and mobility components in the amend-
with IATF 16949 in place. This is how we consistently
SHAREHOLDERS
ments of the Delegated Regulation (EU) 2021/2139
improve our processes and ensure that our products
2
Addressing the EU taxonomy
suggested a reasonable fit to Novem’s business port-
are in compliance with the high quality standards.
folio, the analyses showed that interior or trim com-
In accordance with the European Non‑Financial Report-
ponents are not essential for delivering and improving
All safety and quality aspects are controlled by Central
NON-FINANCIAL
ing Directive (NFRD), companies are required to include
the environmental performance of the vehicle and
Quality Management, which defines the guidelines
REPORT
taxonomy disclosures in their non‑financial reporting
therefore not an exact match to the definition of the
applicable to all locations in the Group. Each location
3
as of 2021. This also applies to Novem. The EU taxon-
above-mentioned activity.
has a dedicated Quality Manager who is responsible
omy is a classification system for economic activities
for implementing all central regulations.
aimed at achieving the goals of the Paris Agreement by
Besides the assessment of Novem’s main business
GROUP
means of transparency in the capital market.
activities, the analysis in financial year 2023/24 showed
In line with our commitment to quality, we craft many of
MANAGEMENT
that no other material investments made fall under the
our products to a relatively high degree by hand, adding
REPORT
The taxonomy regulation with its corresponding del-
EU taxonomy either. The only taxonomy relevant activ-
a unique exclusivity. By combining different materials
4
egated acts sets threshold values for economic activi-
ity at Novem relates to operational expenditures for the
such as wood, aluminium, carbon and premium syn-
ties. An economic activity contributes substantially
vehicle fleet. Nevertheless, the expenses incurred in the
thetics and by using renewable raw materials such as
to the achievement of one environmental objective
financial year do not account for a significant propor
-
flax (linen) and bamboo, we create highly individual,
CONSOLIDATED
(taxonomy alignment) if the threshold values, so called
tion of total expenses and are therefore not reported
innovative products. In addition, at our Novem Interior
FINANCIAL
technical screening criteria, for this environmental
separately. Further information on turnover, opex and
World design centre, we work on ideas for new and
STATEMENTS
objective are met, none of the other five environmental
capex can be found in chapter Consolidated financial
sustainable surfaces.
5
objectives is negatively affected by the economic activ-
statements of the Annual Report.
ity (Do No Significant Harm (DNSH)) and the minimum
safeguards are met. This year, companies are required
Novem proactively addresses sustainability regulation.
ANNUAL
to report the extent of taxonomy eligibility and align-
Therefore, Novem is well prepared to fulfil the require-
ACCOUNTS
ment on the two climate-related objectives and eligibil-
ments in the areas of taxes, anti-corruption, fair com-
6
ity on the other four environmental objectives.
petition, and human rights. Novem has implemented
the German Supply Chain Act (Lieferkettensorgfalts-
pflichtengesetz (LkSG)).
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
17
CONTENTS
Sustainability management
Sustainability organisation of the Novem Group
Embracing social, environmental and sustainable
economic responsibility will empower Novem and the
Sustainability
entire automobile industry to move forward into the
Board
Executive Board
future. The benchmark for this at Novem is provided by
of the Novem Group
customer goals and consumer aspirations, alongside
1
significant social developments.
Responsibility for sustainability
The strategic responsibility for sustainability at Novem
TO OUR
lies with the Executive Board, which heads the Sustain-
SHAREHOLDERS
ability Board of the Novem Group. This body, compris-
2
ing representatives from the central divisions, decides
Legal and
Human
Quality
on the strategic direction in matters of sustainability.
Purchasing
Compliance
Resources
Management
To achieve this goal, it maintains ongoing exchange
NON-FINANCIAL
with the relevant specialist departments and receives
REPORT
monthly updates from all departments regarding
Coordination
Responsibility for
3
sustainability-relevant matters.
Responsibility for
Responsibility for
of group-wide
social and environ-
compliance
employee concerns
sustainability
mental standards in
activities
the supply chain
Various departments manage the sustainability agenda
GROUP
for our operational activities: the EHS and Sustainability
MANAGEMENT
team, which is part of Central Quality Management, is
REPORT
responsible for coordinating global activities on the
4
topics of environment, health and safety. The Human
Resources department deals with all the concerns and
EHS and Sustainability
requirements that affect the employees. Compliance
CONSOLIDATED
with social and environmental standards in the supply
Operational controlling of sustainability and coordination
FINANCIAL
chain is the responsibility of Purchasing.
STATEMENTS
of sustainability activities of the Group
5
ANNUAL
reports on aspects relating to sustainability
ACCOUNTS
6
EHS coordination of the plants
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
18
CONTENTS
Integration of stakeholders
Suppliers and partners: supplier portal, membership of
•
Lüdenscheid Plastics Institute (Kunststoff-Institut
various networks, trade fairs and exhibitions
Lüdenscheid)
As a globally active enterprise, we are in constant
•
Partner Circle of the University of Applied Sciences
dialogue with numerous stakeholder groups. These
Politics: associations, direct communication with local
(OTH) Amberg-Weiden
include our existing and potential employees, custom-
representatives
•
Partner Duale Hochschule Gera-Eisenach
ers and consumers, suppliers and partners, as well
as policymakers and members of the general public.
Press and media: reports, website, press releases,
1
Determination of material sustainability topics
We keep our employees constantly informed about all
social media
important developments in the Group. We also seek
close cooperation with customers, consumers and
Investors and analysts: investor relations website,
In 2020, we conducted an analysis to identify material
TO OUR
our suppliers and partners. Besides using digital and
publications, capital market presentations, confer-
topics in the area of sustainability. In this context, we
SHAREHOLDERS
analogue media to facilitate communication, we also
ences, investor relations newsletter, roadshows, calls
evaluated a total of 13 topics in terms of their impact
2
take the opportunity to meet stakeholders in person at
and meetings
on people and the environment (inside-out perspective),
events such as trade fairs, exhibitions and conferences.
taking into account the views of our stakeholders. We
We maintain an ongoing discourse with politicians and
Memberships and partnerships (selection)
extended this analysis in 2021 to include the perspec-
NON-FINANCIAL
business leaders, particularly through our member-
tive of business relevance (outside‑in perspective). For
REPORT
ships in various associations and initiatives. In addition,
•
German Association of the Automotive Industry
this purpose, we conducted an online survey among
3
we promote direct communication at local level.
(Verband der Automobilindustrie (VDA))
managers who are familiar with sustainability issues at
•
Association of the Wood Industry and Plastics
Novem. We combined the results of these two analyses
Our formats for dialogue with stakeholders
Processing Bavaria/Thuringia (Verband der Holz‑
to obtain an initial assessment of the material topics.
GROUP
wirtschaft und Kunststoffverarbeitung Bayern/
MANAGEMENT
Employees: employee newspaper inside, intranet
Thüringen e.V.)
In the concluding phase, the results underwent discus-
REPORT
NovemNET, Family Day, Open Day, website, social
•
BF/M Research Centre on Business Management
sion, validation and partial adjustment by the managers
4
media, employee portal
for Questions of Medium‑sized Companies (BF/M
involved. This led to the identification of eight topics
Betriebswirtschaftliches Forschungszentrum für
that can be classified as material both with regard
Applicants: cooperation with universities (e.g. OTH
Fragen der Mittelständischen Wirtschaft e.V. (BF/M
to our impact on the environment and society and in
CONSOLIDATED
Amberg-Weiden, University of Bayreuth), Code of
Bayreuth))
terms of their relevance to our business. These topics
FINANCIAL
Conduct, job advertisements, website, social media,
•
Federal Association for Supply Chain Manage-
were validated by management again at the beginning
STATEMENTS
regional career fairs at institutes of higher education
ment, Procurement and Logistics (Bundesverband
of 2024.
5
or as organised by supra-regional associations
Materialwirtschaft, Einkauf und Logistik e.V. (BME))
•
Plastics Information Europe (Kunststoff Informa-
Customers and consumers: brochures, website, com-
tion Verlagsgesellschaft mbH)
ANNUAL
pany presentations, corporate videos, roadshows
•
German-speaking SAP User Group (Deutschspra-
ACCOUNTS
(attendance or digital), personal customer appoint-
chige SAP Anwendergruppe e.V. (DSAG))
6
ments, dispatch of design samples and catalogues,
•
VOICE – Federal Association of IT Users (VOICE –
trade fairs and exhibitions (e.g. with other suppliers
Bundesverband der IT-Anwender e.V.)
or partners), presentations at international specialist
•
ISELED (Intelligent Smart Embedded LED) Alliance
ADDITIONAL
conferences
•
Driving Vision News (DVN)
INFORMATION
NOVEM ANNUAL REPORT 2023/24
19
CONTENTS
Material non-financial topics
Non-financial aspects
Material non-financial topics
Chapter
according to the Non-Financial
Reporting Directive (NFRD)
High‑quality Products and
1
Customer Satisfaction
Business model
Business model
Economic Stability
Transformation Capability
TO OUR
Combating corruption and
Compliance
Responsible corporate governance
SHAREHOLDERS
bribery
2
Procurement and Supply Chain
Supplier management and sustainable procurement
Human rights
Management
Human rights
Supplier management and sustainable procurement
Decent Working Conditions and
Employee matters
NON-FINANCIAL
Human Rights
Employees and society
Social issues
REPORT
Occupational Health and Safety Employees and society
Employee matters
3
Energy and Emissions Climate protection
Environmental concerns
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
20
COMPLIANCE
CONTENTS
Responsible corporate governance
the principles defined therein. Any breach or violation
Elements of the Novem Code of Conduct
of those principles can be reported by internal or exter-
Value-based action is the foundation for our global
nal persons via our web-based whistleblower system,
•
Compliance with applicable laws on a local, national
business activities. Responsibility is one of our four
which can be used to submit reports anonymously
and international level
core values. This entails assuming responsibility for
and in encrypted form. These are then examined by
•
General principles of conduct
the impact of our business and always considering
the Corporate Legal and Compliance department and,
•
Working conditions and human rights
our stakeholders’ expectations. Conscious and ethi-
where necessary, result in corrective measures being
•
Dealings with business partners and third parties
1
cally correct behaviour towards employees, colleagues,
taken in close coordination with the specialist units and
•
Competition and corruption
business partners, society and the environment is
the management under strict confidentiality. We are
•
Protection of property
integral to Novem’s system of values. Each and every
not aware of any violations of the Code of Conduct
•
Data privacy and data security
TO OUR
individual is required to act responsibly, fairly and in
principles in this reporting year.
•
Protection of the environment
SHAREHOLDERS
accordance with the rules.
•
Communication and financial responsibility
2
The foundation of our own corporate actions and
collaborations with suppliers and partners lies in our
The foundation of our actions
Compliance
commitment to universally valid human rights and rec-
NON-FINANCIAL
ognised social standards. Therefore, the Code of Con-
REPORT
Being a global player and a partner of leading automo-
duct and our Declaration of principle on the German
Conduct in accordance with integrity and statutory
3
tive manufacturers in the premium segment, we are
Supply Chain Act (LkSG) reflect the principles relating
legislation forms the basis for our business operations.
subject to many different statutory regulations and the
to human rights and decent working conditions in
In our Code of Conduct, we have clearly formulated
high standards prevailing in the automobile industry.
accordance with the United Nations Charter of Human
the ground rules for this behaviour. Novem upholds
GROUP
We are committed to complying with the regulations
Rights and the International Labour Organisation Dec-
fair and undistorted competition involving compliance
MANAGEMENT
in place, and we take responsibility for our actions. Our
laration on Fundamental Principles and Rights at Work.
with the relevant competition and antitrust regulations.
REPORT
Quality Management has been certified in conformity
Furthermore, the Code of Conduct adopts the content
Each employee at Novem is responsible for acting in
4
with IATF 16949. This international standard based on
of various national regulations on conflict minerals
accordance with these principles. Our employees are
EN ISO 9001 combines existing general requirements
as its guideline for a responsible procurement policy.
supported and advised by the relevant supervisors.
for Quality Management Systems in the automobile
The protection of the environment is likewise part of
CONSOLIDATED
industry.
our Code of Conduct and our Declaration of principle
The Corporate Legal and Compliance department at
FINANCIAL
on the German Supply Chain Act. As a result of the
Novem, which reports directly to the Management
STATEMENTS
In our Code of Conduct, we have defined how we live up
recent changes, our entire value chain is committed to
Board, manages the issue of compliance. Compliance
5
to our responsibility throughout the Group. This docu-
ensuring compliance with all environmental regulations
management provides support for adherence to ethi-
ment defines essential statutory regulations, ethical
and further measures for continuous improvement of
cal conduct in conformity with statutory regulations in
principles, values and ideals, as well as internal and
environmental and energy efficiency.
the course of routine day-to-day business and also
ANNUAL
external guidelines for integrity of conduct. It applies
ensures integrity at organisational level. For this pur-
ACCOUNTS
equally to all the employees, management staff and
pose, compliance management works closely with the
6
executive managers working at the Novem Group, as
specialist departments and operational business units.
well as to the supervisory boards elected at the individ-
Furthermore, local compliance partners are available
ual companies. We also expect our business partners,
to provide advice at all locations throughout the world.
ADDITIONAL
suppliers and sub-suppliers to act in accordance with
Employees and external business partners alike can
INFORMATION
NOVEM ANNUAL REPORT 2023/24
21
CONTENTS
report any breaches or infringements of these princi-
in line with the growth of the Group, for example by
tax authorities in various jurisdictions. Information is
ples by telephone, email or via the web-based whistle-
integrating sustainability aspects. This involves ana-
regularly exchanged with the responsible local and
blower system on our website www.novem.com.
lysing matters such as transitory risks resulting from
national tax authorities. Within the Group, we con-
new statutory legislation and regulations on climate
stantly identify and assess tax risks on the basis of
Our Compliance Policy provides our employees with
protection, such as the introduction of a CO2 tax or
management and controlling systems. The Vice Presi-
concrete guidelines for acting in harmony with the
a ban on diesel vehicles in large cities. We also take
dent Accounting and Tax reports to the Management
rules and regulations. This document can be accessed
technological innovations into account. From today’s
Board and Supervisory Board committees on important
1
at any time on the intranet. In the reporting year, we
perspective, there are no ESG-related (Environmental,
tax issues and projects on a monthly basis. If complex
provided further training on the content of the Code of
Social, Governance) risks or opportunities associated
decisions must be made, expert reports and opinions
Conduct, on the issue of anti-bribery, on competition
with Novem’s own business activities, business rela-
are obtained from outside the company. The area of
TO OUR
and antitrust law as well as on IT, information security
tionships or products and services that could have
corporate taxes is subject to a complex, fast-moving
SHAREHOLDERS
and data privacy, each with high participation rates of
a significant negative impact on the non‑financial
and highly regulated framework that requires constant
2
well beyond 90%. These trainings help to sensitise our
aspects in accordance with the NFRD. To keep track,
monitoring. On the one hand, this requires the area to
employees on how to deal with partners and suppliers
we use the EcoVadis IQ application, which is integrated
be backed up by educated and trained personnel and,
while behaving with integrity and in compliance with
into our Supplier Quality Management system. We also
on the other hand, efficient and effective processes are
NON-FINANCIAL
the law. We continue to provide all relevant employees
work with this tool for the ESG risk assessment for our
needed, which must be further enhanced and strength-
REPORT
with annual training on these topics. We are not aware
own business area as well as the downstream value
ened through system-oriented checks.
3
of any incidence of corruption in the reporting year.
chain, among other things, to fulfil the obligations of
At regular intervals, we conduct workshops with the
the German Supply Chain Act.
Data protection and information security
specialised departments to provide ongoing training
GROUP
on selected compliance-relevant topics.
MANAGEMENT
Taxes
Ensuring the protection of data and maintaining the
REPORT
As a matter of principle, we record potential corruption
confidentiality of information are fixed components of
4
risks as part of our compliance risk management and
Operating globally, we have to deal with a wide range
our corporate principles. We consistently comply with
assess them based on probability and damage con-
of complex tax regulations in the countries we oper-
the relevant laws and regulations on data protection
sequences. In the reporting year, we also conducted
ate in. The Novem Group and its companies have
whenever we collect, store, process or transfer per-
CONSOLIDATED
compliance risk workshops and analyses at all loca-
both unrestricted and restricted tax liability in various
sonal data and information.
FINANCIAL
tions worldwide. The insights gained from these work-
countries. Complying with the applicable tax laws and
STATEMENTS
shops are incorporated into the group-wide compliance
meeting the associated tax obligations is part of our
The protection of confidential and secret data is abso-
5
management system.
fundamental principles.
lutely essential, particularly in cooperation with our
business partners. When we exchange confidential
The Management Board at Novem is responsible for
information with customers and suppliers of Novem,
ANNUAL
Risk management
compliance with tax obligations. Based on the alloca-
we conclude appropriate non-disclosure agreements
ACCOUNTS
tion of business activity, this responsibility is part of
to protect the secrecy of this information. To live up
6
Novem deals with any and all risks that may exist or
the remit of the Vice President Accounting and Tax.
to its responsibility, Novem has a dedicated IT and
arise from and for its business activities as part of its
Continuous communication and consultation take
information security team that is made up of repre-
central risk management in the Controlling department.
place with all stakeholder groups that have an inter-
sentatives from IT Security and Compliance. We have
ADDITIONAL
We aim to continuously improve this risk management
est in this matter. Novem is regularly audited by the
also established a central notification office at Novem
INFORMATION
NOVEM ANNUAL REPORT 2023/24
22
CONTENTS
for IT issues and malfunctions relevant to security. The
Novem Group is also supported by an external Data
Protection Officer.
To safeguard the necessary IT and information security,
Novem has established a certified information security
management system in accordance with the TISAX
1
Standard (Trusted Information Security Assessment
Exchange). This is based on the DIN EN ISO 27001
standard. In this context, we have implemented and
TO OUR
tested technical and organisational measures. These
SHAREHOLDERS
are reviewed, improved and renewed continuously. In
2
the financial year 2023/24, we successfully carried
out the planned certification of Eschenbach (Ger-
many), Pilsen (Czech Republic) and Žalec (Slovenia) in
NON-FINANCIAL
conformity with TISAX. The recertification of Vorbach
REPORT
(Germany) has been started in January 2024 and is
3
intended to be completed during the financial year
2024/25. In addition, we also continue to internally
assess all plants and locations regarding IT and infor-
GROUP
mation security.
MANAGEMENT
REPORT
Every employee has an obligation to deal responsibly
4
with personal data in compliance with applicable statu-
tory regulations and safeguarding confidential informa-
tion.Tofacilitatethis, wehavesummarisedallprovisions
CONSOLIDATED
under data protection legislation and regulations on IT
FINANCIAL
and information security in relevant guidelines. Regular
STATEMENTS
online training sessions are conducted to provide our
5
employees with information on the topics of data pro-
tection, IT and information security. In the reporting year,
well beyond 90% of employees with PC workstations at
ANNUAL
the European locations took part in online training on
ACCOUNTS
data protection. Furthermore, a continuously running
6
phishing simulation was implemented in Germany to
raise awareness for cyber security. A global roll-out is
foreseen for the financial year 2024/25.
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
23
SUPPLY CHAIN
CONTENTS
Supplier management and sustainable
some countries. The share of local sourcing amounted
Code of Conduct and the Declaration of principle on
procurement
to 41%. For auxiliary and process materials, the figure
the German Supply Chain Act. Given this context, we
improved by six percentage points to 72% (PY: 66%).
expect our suppliers to have an energy management
Given the wide variety of materials we use, our value
system in place, implement the EU Chemicals Regula-
chain is highly diverse. Consequently, it becomes
tion (REACH), confirm the exclusion of conflict minerals
Guidelines for procurement
imperative for us to build stable, trusting and long-
and use reusable packaging.
term relationships with our partners. This is the basis
1
for purchasing materials that meet our demanding
The Novem Code of Conduct as well as the Declara-
Environmental and social standards
quality requirements. Close partnerships also enable
tion of principle on the German Supply Chain Act define
us to swiftly adapt to changing and more stringent
basic requirements that we apply to cooperation with
TO OUR
requirements.
our suppliers, such as the prohibition of child labour,
The Novem supplier network spans multiple countries,
SHAREHOLDERS
respect for human rights, commitment to freedom
each with varying environmental and social require-
2
of association and compliance with environmental
ments. Naturally, we always comply with national
The supply chain at Novem
regulations. In the reporting year, we were not aware
legislation in these areas. Wherever our internal rules
of any infringements of these requirements throughout
transcend the relevant statutory regulations, we apply
NON-FINANCIAL
Novem maintains a global network of around 423 sup-
the Novem supplier network. In the course of supplier
our higher standards. We have established the social
REPORT
pliers for the procurement of production materials,
management, we review compliance with the Code of
and environmental requirements applicable to our
3
including both small family businesses and large
Conduct and our Declaration of principle on the Ger-
suppliers in the group-wide Novem procurement condi-
corporations. During the reporting year, we purchased
man Supply Chain Act on a random basis. Suspected
tions, the Supplier Manual, the Declaration of principle
goods valued at €284 million for production. The larg-
breaches can be reported to our Central Compliance
on the German Supply Chain Act and the Code of Con-
GROUP
est product groups in terms of sales include untreated,
Management either by internal personnel or by exter
-
duct. Every year, all Novem employees undergo training
MANAGEMENT
galvanised and painted plastic parts, electrical com-
nal parties. Business partners, suppliers and third
on the Code of Conduct, encompassing human rights
REPORT
ponents, surface materials, granules, speaker grilles,
parties can also submit reports via our web-based
within our value chain.
4
aluminium sheets and veneers. These account for
whistleblower system. If infringements of the Code
around 85% of the total procurement volume.
of Conduct and/or the Declaration of principle on the
Novem requires all new suppliers of series materials
German Supply Chain Act are substantiated, Novem
to confirm compliance with the Code of Conduct and
CONSOLIDATED
Purchasing at Novem is handled centrally on the basis
insists on immediate compliance and reserves the right
the Supplier Manual. In line with these requirements,
FINANCIAL
of product groups. Moreover, local Purchasing depart-
to impose sanctions as appropriate (e.g. new business
new suppliers can only be integrated into the system
STATEMENTS
ments assist in procuring goods. The procurement
on hold), including the possibility of terminating the
if they have made a commitment to compliance with
5
strategy at Novem provides for sourcing the necessary
business relationship.
the Code of Conduct. Environmental management is
materials for series production from national suppliers
also an important aspect when selecting new suppliers.
wherever possible. This approach minimises the risk of
In our Supplier Manual, we describe concrete, group-
Certification of specific suppliers in conformity with
ANNUAL
delivery bottlenecks, avoids long transportation routes
wide standards for the relationships with our suppliers.
ISO 14001 and ISO 50001 has therefore been defined
ACCOUNTS
and supports the local economy. However, the high
These include quality, environmental and health protec-
as an objective. Each year, relevant suppliers are deter-
6
requirements placed on our products by our custom
-
tion and compliance with the principles set out in our
mined based on an assessment of the manufacturing
ers mean that this is only feasible to a certain extent in
processes for the supplied products.
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
24
CONTENTS
The certification is included in the annual supplier
assessment. Currently, 88% of the largest suppliers of
series materials in terms of purchasing volume com-
ply with the ISO 14001 standard, and 57% comply with
the ISO 50001 standard. Failure on the part of a sup-
plier to comply with this requirement has a negative
impact on the supplier assessment in accordance with
1
IATF 16949. Since financial year 2021/22, the evalua-
tion of suppliers of relevant product groups additionally
considers whether they have implemented a certified
TO OUR
occupational health and safety management system
SHAREHOLDERS
in place in accordance with the ISO 45001 standard.
2
In financial year 2023/24, we successfully continued
to evaluate our suppliers by EcoVadis IQ platform. Sup-
NON-FINANCIAL
pliers accounting for 96% (PY: 74%) of annual turnover
REPORT
were assessed in this reporting period. We have, there-
3
fore, exceeded our target of evaluating suppliers that
account for at least 90% of revenue by June 2024. The
Corporate Social Responsibility (CSR) assessment is
GROUP
incorporated into the general supplier assessment.
MANAGEMENT
REPORT
As required by the German Supply Chain Act, we have
4
incorporated the EcoVadis IQ tool into our risk-based
approach. We consider the risk of human rights viola-
tions in our supply chains to be very low, given that
CONSOLIDATED
most of our suppliers are well-established, globally
FINANCIAL
recognised and certified companies within the auto-
STATEMENTS
motive industry.
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
25
EMPLOYEES AND SOCIETY
CONTENTS
Decent working conditions
Dialogue and communication
included in the HR goals on a management level to
increase the focus on this figure and to ensure we pay
Our employees, with their knowledge, their motivation
more attention to the reasons why employees decide
Our common purpose also includes our commitment
and their commitment, constitute our most valuable
to leave. This information is gained through exit inter-
to collective freedom of association. We therefore pro-
asset. Ensuring the health and safety of our employees
views and analysis with superiors. Where recommend-
mote close cooperation with employee representatives
is our top priority, as outlined in our corporate policy. At
able, we also use a tool that allows us to detect the risk
at various levels. The consideration of employee inter-
Novem, we offer all our employees a working environ-
of employees leaving the company at an early stage.
ests is anchored in our Code of Conduct and applies
1
ment characterised by fairness and trust, regardless
The findings are used to define further measures to
equally at all locations. During the reporting period,
of their location. Our overarching personnel strategy is
avoid undesired fluctuation.
there were no business locations where the right to
therefore based on the universally applicable corporate
freedom of association and collective bargaining was
TO OUR
values of the Novem Group: Responsibility, Excellence,
infringed or put at risk.
SHAREHOLDERS
Employees by region and gender at the Novem
Innovation and Commitment.
2
Group
Depending on country and location, the form of direct
Our Code of Conduct defines our way of working
and indirect participation of employees at Novem
together across all locations. To safeguard the stand-
varies. In Germany, the Works Constitution Act regu-
FY
FY
FY
NON-FINANCIAL
ards and principles for personnel work in the interests
lates the corporate co-determination of employees.
2021/22
2022/23
2023/24
REPORT
of the Group, human resources at Novem are managed
We also cooperate on the basis of mutual trust with
Europe
3
both by the central office and decentrally so that all
the individual local works councils at each location.
Total
2,969
2,893
2,434
employees can be offered the best possible support
The economic situation of the business is regularly
Female
44%
44%
43%
and development at a local level. Every employee has
discussed on the Economics Committee. Potential
GROUP
a defined local contact to whom they can turn with
changes for the workforce are always discussed with
Male
56%
56%
57%
MANAGEMENT
their issues and concerns. We promote international
the works council. We inform our employees in good
REPORT
Americas
communication through a regular worldwide HR Con-
time of any operational changes that may impact them
Total
1,842
1,807
1,780
4
ference, which took place in 2023 and is planned again
by posting notifications on the bulletin board and on our
Female
44%
46%
47%
for 2025.
intranet NovemNET. In the case of time-limited collec-
Male
56%
54%
53%
tive bargaining agreements and company agreements,
CONSOLIDATED
At our locations across the world, a total of 4,887
Asia
we approach the respective contractual party in good
FINANCIAL
people were employed at the end of the financial year
time to initiate the conclusion of new agreements as
STATEMENTS
Total
729
788
673
2023/24. During this period, we were able to recruit a
necessary.
Female
35%
36%
37%
5
total of 872 new employees.
Male
65%
64%
63%
We are also committed to cooperating with employee
Total worldwide
5,540
5,488
4,887
The undesired fluctuation rate among employees was
representatives at our international locations, for exam-
ANNUAL
around 3.8% for the central office in the reporting year
ple, with the local unions in Bergamo (Italy), Querétaro
ACCOUNTS
(PY: 3.5%). To keep this fluctuation at a low level, we
(Mexico) and Žalec (Slovenia). Our approach is char-
6
are increasing our efforts to develop up-and-coming
acterised by mutual respect and trust, and we strive to
junior staff and are focusing our human resources
find solutions to issues and challenges that take appro-
work on further training for managers. Furthermore,
priate account of the interests of all parties involved.
ADDITIONAL
the undesired fluctuation rate in the central office was
INFORMATION
NOVEM ANNUAL REPORT 2023/24
26
CONTENTS
Health and safety
Attractive employer
Number of employees on parental leave
We offer our employees a working environment that
We safeguard the health and safety of our employees
FY
FY
FY
also acknowledges their performance through financial
2021/22
2022/23
2023/24
through a comprehensive health and safety manage-
rewards. We provide performance-based compensa-
ment system. The topics of workplace safety and
Employees in
1,329
1,271
1,146
tion systems worldwide by means of bonus systems
Germany
health protection within the Novem Group are man-
that we have established in the individual countries. In
aged by the central EHS Team, seamlessly integrated
On parental leave
1
Germany, around 90% of all employees are remuner-
into Central Quality Management. Additionally, each
Female
14
31
34
ated under collective bargaining agreements. In addi-
site has an EHS Officer responsible for implementing
Male
40
36
29
tion, there are non-payscale components that take
the central objectives and goals.
TO OUR
Total
54
67
63
account of the individual operational circumstances
SHAREHOLDERS
in the various departments.
Novem has defined multilocational processes in the
2
Given our attractive conditions, our goal is to retain our
guideline for health and safety in order to comply with
Additional benefits round off our compensation pack-
staff while also attracting new talents. This is increas-
statutory requirements for health and safety. We have
age. In Germany, we offer to contribute to an additional
ingly important in view of the current labour market
introduced a certified occupational health and safety
NON-FINANCIAL
pension plan for our employees. Furthermore, we offer
challenges: demographic change and the associated
system in conformity with ISO 45001 in the financial
REPORT
them capital‑forming benefits under the collective bar-
shortage of skilled workers are having an impact on
year 2022/23. In 2023, the German locations in Vor-
3
gaining agreement. In addition, we provide a corporate
Novem – especially when it comes to filling vacant
bach and Eschenbach as well as the production sites
benefits program and fitness network membership in
positions. It is becoming particularly difficult to find
in Langfang (China), Querétaro (Mexico) and Žalec
Germany. We acknowledge the changing needs of our
specialists, especially in the fields of engineering and
(Slovenia) were successively certified. The certification
GROUP
employees and support a healthy work-life balance
IT. In 2022, we started using Instagram with an HR
of the production site in Pilsen (Czech Republic) was
MANAGEMENT
for combining career ambitions and familial responsi-
focus as a pilot project to address new talents under
successfully completed at the beginning of 2024.
REPORT
bilities. We therefore support flexible working models
these conditions. This has now been implemented as a
4
and offer individual solutions in consultation with our
regular communication channel. The account provides
Safety in the workplace
employees.
insights into working at Novem, the benefits we offer
our employees and our understanding of teamwork. On
CONSOLIDATED
Likewise, at our international locations, we provide
the one hand, this is a platform to show and remind our
We are committed to complying with the legal require-
FINANCIAL
our employees with remuneration packages that fre-
own employees of what Novem provides. On the other
ments for health and safety. Furthermore, we want to
STATEMENTS
quently extend beyond the local statutory regulations.
hand, this allows us to reach younger target groups bet
-
contribute to improving systems and take appropriate
5
For example, Novem enables numerous employees in
ter, such as trainees, participants in dual study degree
action to prevent accidents from occurring. At Novem,
Mexico and Honduras to obtain health and life insur-
programmes and career starters. From September
our emphasis lies in correctly handling hazardous sub-
ance. Novem also offers employees in these two coun-
2022 until the end of financial year 2023/24, we created
stances such as paints, coatings and finishes.
ANNUAL
tries financial benefits such as vacation and Christmas
175 posts and gained more than 710 followers.
ACCOUNTS
bonuses in addition to the statutory requirements.
Our risk assessment process is the basis for haz-
6
ard- and accident-free work. Holistically designed, it
covers all the key steps: hazards are determined, the
level of risk is assessed and protective measures are
ADDITIONAL
defined on this basis. The method is strictly regulated
INFORMATION
NOVEM ANNUAL REPORT 2023/24
27
CONTENTS
Health promotion
and takes national, international and Novem‑specific
We ensure that all third-party subcontractors can
requirements into account. This ensures an overall view
operate with maximum safety at Novem sites. A leaf-
of the workplace while at the same time guaranteeing
let provides them with details regarding all relevant
Apart from prioritising workplace safety, we also
the highest possible level of safety. It can, therefore,
plant‑specific regulations, along with instructions on
actively promote the health of our employees. As a
be applied to all Novem locations and is correspond-
workplace and plant safety, fire prevention and envi-
central component, our integrated Company Health-
ingly implemented everywhere. We regularly review
ronmental protection. Simultaneously, we expect our
care Management (CHM) goes beyond the statutory
and update risk assessments, for example, when new
suppliers to adhere to all statutory and country‑specific
requirements and includes numerous measures for
1
work resources are introduced, when new workplace
regulations as well as plant‑specific rules at Novem.
basic medical care and preventive health care.
conditions arise, in response to accidents or to evalu-
ate existing protective measures.
In 2023, the pilot project lunch break in motion took
TO OUR
Indicators for health and safety at the Novem
place from fall to Christmas in Vorbach. Interested
SHAREHOLDERS
Group
We consistently involve all our employees in workplace
colleagues were able to spend their lunch break once
2
safety topics. Employees must immediately inform
a week doing various fitness exercises under profes-
their supervisors of work-related risks or hazardous
sional guidance. A continuation of this activity is being
per 1 million hours
FY
FY
FY
worked
2021/22
2022/23
2023/24
situations. As part of the occupational safety commit-
planned.
NON-FINANCIAL
tee meetings held on a quarterly basis at our German
Number of occupa-
REPORT
tional accidents with
72
77
76
locations, we provide an opportunity for employee and
All Novem employees have access to an occupational
a period of absence
3
employer representatives to discuss current issues
health service. Each of our locations has its own
LTIF (Lost Time Injury
relating to health and safety. Similar meetings are also
company doctor, who carries out all functions under
6.8
7.0
7.4
Frequency)
held at our international locations.
the workplace safety laws and participates in tours of
Number of fatal oc-
GROUP
inspection to assess ergonomic conditions. The loca-
0
0
0
MANAGEMENT
cupational accidents
We regularly provide our employees with training on
tions of Querétaro (Mexico) and Tegucigalpa (Hondu-
REPORT
occupational safety matters, using digital training
ras) have a medical service that also provides basic
4
methods and practical instruction sessions at relevant
medical care. At the German sites and many locations
potential hazard points. The training sessions are pre-
abroad, several vaccinations are also offered directly
pared and carried out by the relevant EHS departments,
on-site by the occupational healthcare service.
CONSOLIDATED
partly in cooperation with the specialist departments.
FINANCIAL
Our employees in administration at the Group’s central
STATEMENTS
office receive annual safety briefings.
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
28
CONTENTS
Equal opportunity and diversity
Commitment to society
We are also committed to enthusing young women for
technical vocations and study courses, for example, in
Our Code of Conduct defines principles for a working
wood technology or mechanical engineering. As part of
Novem sees itself as a global corporate citizen and
environment that promotes diversity and guarantees
this initiative, Novem participated in Girls’ Day in 2023
therefore as part of society. Consequently, we also
equal opportunities and equal treatment, regardless
and will take part again in 2024. We can also report a
want to shoulder responsibility beyond the bounda-
of ethnic background, skin colour, gender, disability,
balanced gender ratio among the participants in our
ries of our Group and play our part to ensure that the
beliefs, religion, nationality, sexual orientation or social
dual study degree programmes.
communities at our locations continue to develop
1
origin.
sustainably in the future. We make our contribution to
Inclusion also plays an important role at Novem. Dur-
a sustainable society above all in the form of cash and
The Novem Group is opposed to all forms of discrimi-
ing the year under review, we exceeded the statutory
in-kind donations, but we are also actively involved with
TO OUR
nation. Every superior is urged to be the first point of
quota in Germany for employing people with disabili-
the communities we operate in. The volume of dona-
SHAREHOLDERS
contact for possible cases of discrimination. Internal
ties by around 46% (PY: 20%). We employ people with
tions and sponsorship for the financial year 2023/24
2
and external notifications and infringements can also
disabilities at our plant and thus promote their social
amounted to approximately €36,000. In accordance
be reported in confidence using the whistleblower
participation.
with our business principles, all activities were evalu-
reporting system on the company website or by email
ated and approved by the Management Board.
NON-FINANCIAL
to Corporate Legal and Compliance. In addition, any
REPORT
affected employee can consult the relevant works
Our donations and sponsoring focus on the promo-
3
council. No cases of discrimination became known at
tion of local and regional facilities, associations and
Novem in the reporting year 2023/24.
organisations at the individual sites where the Group
is located. We see it as our mission to strengthen
GROUP
We support the principle of equal opportunities and
social, cultural and community life. The donations are
MANAGEMENT
equal treatment. Our employees receive the same
typically carried out as financial payments. We support
REPORT
remuneration for equivalent work, irrespective of gen-
hospitals and public organisations in the local com-
4
der. Across the world in 2023/24, the proportion of
munities such as kindergartens, elementary schools,
women on the highest level of management at Novem,
fire brigades and football clubs. We also supported a
which reports directly to the Management Board, was
reforesting project near Eschenbach.
CONSOLIDATED
around 25% (PY: 25%). The share of women on the
FINANCIAL
Management Board was 25% and on the Supervisory
STATEMENTS
Board 20% at the end of 2023/24.
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
29
ENERGY AND EMISSIONS
CONTENTS
Climate protection
Energy consumption
The respective EHS coordinator reports the environ-
mental impacts to the respective plant manager and
Our corporate policy defines environmental protec-
the central EHS manager on a regular basis. We also
As a manufacturing company, the various stages in our
tion, energy-saving and careful use of resources as
actively monitor ESG-related risks and opportunities
production processes consume a considerable amount
being integral to our identity. For us, optimising energy
and furthermore all relevant regulatory environmental
of energy. The majority of this energy is used for sur-
usage while minimising greenhouse gas emissions is
risks that impact our business. We monitor interna-
face manufacturing, injection moulding, pressing and
essential.
tional and national environmental legislation as well
milling operations, primarily sourced from electricity
1
as customer‑specific requirements, for example, along
and natural gas.
Group-wide responsibility for environmental concerns
with other regulations in order to preclude possible vio-
lies with the EHS Team, which is part of the central
lations (Sustainability organisation of Novem).
Our German locations in Vorbach and Eschenbach
TO OUR
Quality Management department. Each location also
as well as the production site in Žalec (Slovenia) are
SHAREHOLDERS
has one or more EHS managers responsible for imple-
certified in conformity with the energy management
2
menting and monitoring central regulations and site-
standard ISO 50001. Novem also has an energy audit
specific measures. They are appointed by the facility
system at the European site Pilsen (Czech Republic)
management and in agreement with central EHS at the
that complies with ISO 16247.
NON-FINANCIAL
Novem Group. The central EHS department, in coop-
REPORT
eration with the Management Board, sets group-wide
In cooperation with the EHS coordinators at the plants,
3
targets each year, on the basis of which the Novem
our central energy manager constantly reviews our
locations define their own environmental targets and
overall energy consumption and the associated sav-
action plans.
ings potential. For this purpose, we use an external
GROUP
energy data recording system at our sites in Vorbach,
MANAGEMENT
All Novem production sites worldwide have certified
Eschenbach and Žalec. In accordance with federal
REPORT
environmental management systems in conformity
regulations, our site in Querétaro (Mexico) uses the
4
with ISO 14001. This also extends to identification of
Schneider metering system.
potential negative impacts. To record these throughout
the individual stages, we have carried out a mandatory
When any new infrastructure is put in place or the man-
CONSOLIDATED
impact assessment at all our sites every year since
ufacturing process is upgraded, modern and efficient
FINANCIAL
2009 in order to derive appropriate group-wide targets
technology is a top priority. This includes, for example,
STATEMENTS
and measures. For each individual category of relevant
the installation of energy‑efficient heating systems,
5
environmental impact, including for example waste,
air-heating pumps and LED lighting. We implemented
water and emissions, the severity and probability of
numerous of these measures in the financial year
occurrence are assessed along with the applicable
2023/24.
ANNUAL
legal framework.
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
30
CONTENTS
Energy consumption within the Novem Group
assessments, reduction potentials are to be identified
by energy source
and measures for reducing emissions are to be out-
lined. Our aim is to obtain the Climate Neutral Company
label for the German sites by 2025.
in kWh
FY 2021/22
FY 2022/23
FY 2023/24
Consumption of non-renewable fuels (oil and gas)
28,904,293
29,226,510
25,485,119
In the reporting year, we recorded a significant reduc-
Electricity, heat and cooling energy and steam purchased for
tion in our Scope 1 and Scope 2 emissions compared
116,629,474
116,770,473
110,412,711
consumption, individually (electricity and district heating)
1
to the previous reporting year. In Scope 1, this was
Total energy consumption
145,533,767
145,996,983
135,897,830
primarily due to lower production volumes and favour-
able weather conditions reducing the need for heating
TO OUR
agents. Furthermore, a lower quantity of refrigerants
SHAREHOLDERS
Energy intensity at the Novem Group
since 2019. We record all the relevant climate gases1
was required in the financial year 2023/24. The reduc-
2
to determine CO2 equivalent values. This calculation
tion in Scope 2 emissions reflects our efforts to
is based on the requirements of the Greenhouse Gas
decrease electricity consumption and at the same time
FY 2021/22 FY 2022/23 FY 2023/24
(GHG) Protocol. A distinction is drawn here between
improve the quality of the energy mix used. Since the
NON-FINANCIAL
direct (Scope 1), indirect (Scope 2) and other indirect
beginning of 2024, our site in Langfang (China) has
Total consump-
REPORT
145,533,767 145,996,983 135,897,830
tion (in kWh)
greenhouse gas emissions (Scope 3). Scope 1 emis-
covered its entire electricity demand from renewable
3
sions at Novem arise, for example, from the combus-
sources via a Green Power Purchase Agreement (PPA).
Produced
28,562,299 29,037,179
24,326,075
parts
tion of fuels at our sites and from the fuel consumption
of our company car fleet. The overwhelming proportion
Our efforts are intended to meet the increasing require-
Energy inten-
GROUP
sity ratio (kWh/
5.1
5.0
5.6
of Scope 1 emissions at our own production facilities
ments of our customers that we expect in the future.
MANAGEMENT
component)
is due to the use of natural gas and heating oil. Our
In light of this, Novem is permanently evaluating sev-
REPORT
Scope 2 emissions are attributable to energy produc-
eral opportunities to effectively reduce its emissions.
4
tion at our electricity suppliers. The other indirect
This may involve transitioning our heating system to
Greenhouse gas emissions
emissions – in the category of Scope 3 – are due to
renewable energy and installing photovoltaic power
activities in the supply chain related to activities such
plants. Additionally, we intend to offset greenhouse gas
CONSOLIDATED
As a result of energy consumption at our production
as the production of raw materials or the manufacture
emissions by supporting regional and supra-regional
FINANCIAL
facilities, we generate greenhouse gas emissions.
of intermediate products. Currently, we systematically
environmental projects. During the reporting period, we
STATEMENTS
Emissions are also produced within our value chain in
record only Scope 1 and Scope 2 emissions from our
began and are continuing to explore the international
5
the course of our upstream and downstream activities.
prioritised emission sources. Since 2022/23, we have
environmental and green power project landscape to
By continuously reducing and offsetting our emissions,
started recording defined Scope 3 emissions from
identify suitable collaboration opportunities.
we aim to reach greenhouse gas neutrality in our Ger-
the German sites in Vorbach and Eschenbach with
ANNUAL
man sites by 2025, in our European sites by 2030 and
an external partner to gain a more comprehensive
ACCOUNTS
worldwide by 2035.
understanding of our Scope 3 emissions. Based on
6
the results of the above-mentioned carbon footprint
To determine our annual emissions, we have been
using an environmental footprint software from Sphera
1
These include CO2, CH4, N2O, HFCs, PFCs, SF6, NF3 and all other
ADDITIONAL
volatile compounds from their chemical constituents.
INFORMATION
NOVEM ANNUAL REPORT 2023/24
31
CONTENTS
Scope 1 – Direct GHG emissions at the Novem Group
in tonnes of CO2 equivalent
FY 2021/22
FY 2022/23
FY 2023/24
Natural gas
5,484
5,652
4,972
Heating oil
2,193
2,162
1,831
LPG
391
272
221
1
Refrigerants
577
2,018
852
Fuels (company car fleet) incl. flights
1,159
1,456
1,347
TO OUR
Total Scope 1 emissions
9,803
11,559
9,224
SHAREHOLDERS
2
Scope 2 – Indirect GHG emissions at the Novem Group
NON-FINANCIAL
in tonnes of CO2 equivalent
FY 2021/22
FY 2022/23
FY 2023/24
REPORT
Power1
63,762
67,269
56,305
3
Total Scope 2 emissions
63,762
67,269
56,305
1
The market‑based method was applied for this calculation; value for FY 2023/24 by location‑based method: 52,117 t CO2 equivalent.
GROUP
MANAGEMENT
REPORT
Scope 1 & 2 – GHG emission intensity at the Novem Group
4
FY 2021/22
FY 2022/23
FY 2023/24
Total GHG emissions (in t CO2 equivalent)
73,565
78,828
65,529
CONSOLIDATED
FINANCIAL
Produced parts
28,562,299
29,037,179
24,326,075
STATEMENTS
GHG emission intensity (t CO2 equivalent/component)
0.00258
0.00271
0.00269
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
32
Aluminium brushed
3
Group
Management Report
CORPORATE STRUCTURE AND BUSINESS ACTIVITIES
CONTENTS
Novem Group S.A., Luxembourg, hereafter also referred
For more than 70 years, the Group has successfully
Using novel materials such as rattan, linen or fibreglass,
to as the “Company”, is a public limited liability com-
used wood as raw material, which has helped the
the Group creates a new atmosphere in the vehicle inte-
pany (Société Anonyme) incorporated in Luxembourg
Group become the world leader in fine woods through
rior. In combination with light, this is how the Group’s
and governed by Luxembourg Law. The Company’s
high quality and natural processing. With the help of
trendsetting designs are created.
registered office is at 19, rue Edmond Reuter, 5326
new technologies, material combinations and surface
Contern, Luxembourg.
finishes, there is a steady and consistent refinement
The special material properties not only directly influ-
of the processing of this raw material. Trims made of
ence the design and atmosphere of the interior, but are
1
Novem Group S.A. is the parent of the Novem Group
veneers are synonymous with exclusivity, as the natural
also specifically selected according to the criteria of
including its subsidiaries (hereinafter referred as
growth and individual grain of the wood as raw material
sustainability, reduced weight and economy.
“Novem” or the “Group”). To ensure and maintain prox-
are unique.
TO OUR
imity to customers, the Group has a global presence
Due to expert knowledge in handling different materials,
SHAREHOLDERS
with 12 locations in China, Czech Republic, Germany,
The processing of lightweight metal aluminium is
the Group is able to meet customer requirements at the
2
Honduras, Italy, Luxembourg, Mexico, Slovenia and
carried out through production processes that pre-
desired level, as in the past. In order to continuously
USA. The financial year of the Group is a 12‑month
serve the feel of this material. The trims are printed,
evolve further in terms of interior design, the Group
period from 1 April until 31 March of the following year.
painted, brushed, polished, galvanised or anodised
always uses materials in an innovative manner. This is
NON-FINANCIAL
using advanced processes. This creates surfaces that
also underlined by the certification of the Group plants
REPORT
The Group did not purchase any own shares in the
convey a feeling of sporty elegance and modernity in
according to IATF 16949 as well as DIN EN ISO 14001
3
financial year ended 31 March 2024 and did not hold
the vehicle interior.
and DIN EN ISO 50001. This ensures environmentally
any own shares at that time.
friendly production for the customer, combined with
Carbon is seen as the material of the future. Due to its
up‑to‑date quality and environmental requirements.
GROUP
As the global market leader in high-end interiors, the
lightweight, it is particularly suitable for fast, dynamic
MANAGEMENT
Group operates as a developer, supplier and system
and energy‑efficient driving. Furthermore, as a mate-
REPORT
supplier for trim parts and decorative functional ele-
rial made of carbon fibres, carbon entails the attrib-
4
ments in vehicle interiors. The products combine
utes of impact resistance and temperature resistance.
valuable raw materials with the latest technology and
Through high quality lacquering, priming and polishing
processing. The customers include all major premium
processes, its premium finishing creates special 3D
CONSOLIDATED
carmakers worldwide. The Group has an extensive
effects giving an impression of depth.
FINANCIAL
exclusive product portfolio of instrument panels,
STATEMENTS
impact-resistant trim parts in the centre console, door
Premium synthetics enable versatile design and pro-
5
trims, beltlines and decorative functional elements in
cessing options. A variety of optical effects can be
the car interior. Premium materials are used to ensure
achieved through creative processing techniques. Mod-
high quality standards. The surfaces are versatile,
ern injection moulding processes such as 2K technol-
ANNUAL
ranging from fine woods, aluminium and carbon to
ogy ensure excellent profiling and customer‑oriented
ACCOUNTS
premium synthetics or leather, and present a different
adjustment.
6
feel depending on the selection.
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
34
KEY EVENTS
CONTENTS
Novem’s third year as a listed company was character-
A noticeable reluctance of buyers led to a decline
technology while allowing independence from external
ised by demanding market conditions and continued
in demand and thus weaker call-offs, which directly
partners. Furthermore, the design centre Novem Inte-
headwinds. The Group had to cope with persistently
impacted the Group’s annual sales. In addition, the
rior World in Vorbach has welcomed a new addition
volatile call-offs, weaker demand in the automotive
automotive industry is grappling with the transition
in the form of the Cocoon. The Cocoon showcases
sector and inflationary pressure.
to electric vehicles and the current poor demand for
the fusion of technology and material, envisioning a
these, partly due to the cancellation of subsidies in
potential future mobile biosphere.
Following the Covid‑19 pandemic, the continued war in
some European countries. Beyond this, call-offs
1
Ukraine has severely impacted the automotive market,
remained volatile causing ongoing inefficiencies in
The acquisition of new customers, such as Kia from
especially in Europe. Further geopolitical turmoil was
managing personnel and production utilisation. In
Korea and Avatr from China, also supported the strong
added when Hamas launched an attack on Israel in
response to these developments and to improve the
order intake. Apart from that, Novem also won back
TO OUR
October 2023, triggering an escalation of the Israeli-
cost structure, savings measures included the closure
Tesla as a customer and was named supplier for the
SHAREHOLDERS
Palestinian conflict and a war in Gaza. In this context,
of the production facility in Bergamo (Italy) and per-
Model Y in Europe and Americas with SOP in 2025.
2
anti-Israeli Houthi militants began attacking container
sonnel adjustments in Germany. To further support
Alongside the nomination for the respective alumin-
ships in the Red Sea, hampering trade in the area.
the cost base, it was essential for Novem to demand
ium and carbon interior design, Novem also secured
Consequently, this led to the majority of cargo ships
compensation from customers and pass on some of
a matching key exterior component. The acquisition
NON-FINANCIAL
avoiding the region and taking longer alternative routes
the inflation‑related additional costs for materials and
of the aluminium tailgate marks Novem’s entry into
REPORT
via the Cape of Good Hope. National and global trade
wages to the OEMs.
the premium exterior trim market. Since familiar tech-
3
barriers, partly caused by political decisions, required
nologies are used, Novem can tap into its expertise in
increased efforts to maintain stable supply chains.
Close collaboration between Sales, Concept engineer-
handling and processing aluminium for this first‑time
These circumstances have led to longer delivery times
ing and Design enabled the Group to achieve a sub-
project.
GROUP
and higher transportation costs as well as lower avail-
stantial volume of incoming orders in the financial year
MANAGEMENT
ability of primary products and thus to safety stocks.
2023/24 relating to platforms with SOP spread over
During the financial year 2023/24, all Novem Group
REPORT
the next three financial years. The key was the holistic
plants underwent successful recertification for the IATF
4
Amid the Eurozone’s most rapid interest rate hiking
approach between all three functions and understand-
16949 certificate (International Automotive Task Force).
cycle in history, the fixed interest rate of 4.5% published
ing customer needs to provide competitive solutions. A
The IATF summarises various quality management
by the ECB in September 2023 reached a record high.
highlight of this collaboration was the world’s first wire-
systems. Holding up‑to‑date certificates is impera-
CONSOLIDATED
This also marked the last interest increase by the ECB
less charging solution with a wooden décor, which has
tive for securing contracts with automotive industry
FINANCIAL
in the current rate hike due to declining inflation rates.
already been brought to series production for an Asian
customers.
STATEMENTS
A decrease in prime rates of especially ECB and Fed is
OEM. In addition, further milestones in the integration
5
expected but difficult to forecast due to a core inflation
of light were achieved. For another customer, Novem
As an automotive supplier, another important accredi-
rate in the European Union above the target value and
developed a decorative wooden element with a large
tation for Novem is the TISAX certification, which has
strong economic development in the US. This uncer-
number of backlit symbols spanning the entire surface,
been successfully completed for Eschenbach, Pilsen
ANNUAL
tainty ultimately led to one of the lowest volatilities in
where only a thin installation space was available. As
and Žalec. This certificate proves that Novem’s infor-
ACCOUNTS
the US Dollar to Euro in the last 50 years. In compari-
lighting and its integration become increasingly impor-
mation security standards and baselines are also
6
son, the Mexican Peso strengthened its position due
tant for trim parts, Novem has further strengthened
implemented in all plants abroad. In January 2024, the
to Mexico’s economic stability paired with a high and
its expertise in this field and established its first in‑
recertification for Vorbach was initiated as part of a
stable prime interest rate, which led to the strongest
house light simulation. This enables significantly faster
regular process.
ADDITIONAL
Mexican Peso to Euro and US Dollar since 2015.
digital processing of OEM enquiries including lighting
INFORMATION
NOVEM ANNUAL REPORT 2023/24
35
CONTENTS
Since the changeover to SAP S/4HANA is planned for
Novem has also received recertification for the FSC
the coming financial year 2024/25, several upstream
certificate (Forest Stewardship Council®) in China.
projects are necessary. During the financial year and
The process guarantees that only exclusively certified
as part of these preparations, the SAP authorisation
veneers from controlled cultivation areas are used in
concept was redesigned so that permissions will be
the entire production sequence for specific custom-
assigned on a departmental and role basis and no
ers. Environmental aspects within supply chains are
longer according to individual demands. This change
becoming increasingly important and require com-
1
significantly reduces the operational impact and
panies to change processes and integrate them into
increases transparency. Furthermore, another three
existing workflows due to legal and customer require-
preliminary projects were implemented as planned.
ments. In order to be more sustainable and prepare
TO OUR
The introduction of the Customer Vendor Integration
for agreed-upon changes to REACH legislation in the
SHAREHOLDERS
in June 2023 was followed by the migration to the New
coming years, Novem has already started working with
2
General Ledger in August 2023 and the implementa-
the respective suppliers to develop certain alternative
tion of SAP BW/4HANA in December 2023. From an
surface treatment materials. Besides that, Novem has
accounting perspective, the New General Ledger
successfully implemented the sustainability rating and
NON-FINANCIAL
ensures a parallel and simplified presentation of IFRS
tracking of suppliers using the Ecovadis platform. By
REPORT
and the respective country‑specific accounting regula-
the end of the current financial year 2023/24, 96% of
3
tions. Overall, the SAP S/4HANA project is progressing
series suppliers had been registered and rated. The
according to plan.
achieved rating will be part of the annual supplier evalu-
ation in order to measure future developments.
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
36
BUSINESS AND GENERAL ENVIRONMENT
CONTENTS
World economy
Inflation declined slightly, partly due to the interest
Global light vehicle production in 2023 amounted to
rate hikes, which significantly slowed the rise in prices
90.8 million and increased by 10.2% compared to the
The global economy in 2023 was influenced by a large
worldwide. Another reason for the fall in inflation is the
prior calendar year.1
number of different factors like the release of signifi-
easing of the energy markets. The average inflation
cant economic and inflation data, interest rate hikes
rate worldwide was around 8.1% in 2023, after 8.7% in
Germany recorded an increase of 7.3% in new car reg-
by the world’s leading central banks, the suspension of
2022 compared to the previous year. Consumer prices
istrations compared to the previous year, which was
the US debt ceiling, the ongoing Ukraine war and the
in Germany increased by 5.9% in 2023 compared to
influenced by the weaker result in December 2023.
1
escalation of the conflict in Israel‑Gaza/Middle East.
7.9% in 2022.
Looking at registrations in Europe, battery-electric vehi-
Despite the many negative factors, the financial mar-
cles (BEV) became the third most popular choice for
kets in many regions of the world performed positively.
Nevertheless, the global gross domestic product (GDP)
buyers in 2023 with a 14.6% market share. As a result,
TO OUR
increased by 3.1% in 2023 compared to the previous
battery-electric drives replaced diesel, which remained
SHAREHOLDERS
The attacks on container ships by the Houthis in the Red
calendar year. GDP grew by 0.5% in the Eurozone, 2.0%
stable at 13.6%. Petrol cars are still leading with 35.3%,
2
Sea since November 2023 have forced some shipping
in Japan, 2.4% in the USA and 5.4% in China.
while hybrid-electric vehicles took second place with a
companies to act and reroute their container ships via
25.8% market share.
the longer alternative route around the Cape of Good
In Germany, the GDP decreased by 0.3% compared
NON-FINANCIAL
Hope. This consequently impacted global logistics and
to the previous year. As a result, Germany technically
At the same time, sales of electric vehicles in Germany
REPORT
the energy market due to longer shipping times and
slipped into a recession last year. Sharply increased
are expected to decline for the first time in eight years,
3
higher transportation costs. The shorter and therefore
prices at all levels of the economy have slowed the
primarily due to cuts in subsidies in December 2023. At
very essential trade route through the Red Sea, which
German economy. The recovery from the deep slump in
this point, the coalition government temporarily discon-
runs between Africa and Asia to Europe, accounts for
GDP of the Covid-19 year 2020 could not be continued.
tinued subsidies for electric cars one year earlier than
GROUP
a high percentage of global sea trade.
planned. In Germany, 523,300 BEVs were sold in 2023
MANAGEMENT
and therefore far behind China, the frontrunner with 6.3
REPORT
Automotive markets
In 2023, inflation remained a key topic. The major
million vehicles. The USA ranks second with 1.1 million
4
central banks, the European Central Bank (ECB) and
BEVs sold in 2023.
the Federal Reserve System (Fed), responded to the
The calendar year 2023 was very positive for the
sharp rise in inflation by raising key interest rates to a
European automotive market. In 2023, car sales were
In China, the largest sales market in the automotive
CONSOLIDATED
high level by historical standards. Due to the positive
consistently positive and often recorded double-digit
industry, domestic electric car manufacturers are
FINANCIAL
development of the aforementioned measure, interest
growth. The only decline of -3.3% compared to 2022
becoming increasingly established and can offer their
STATEMENTS
rate cuts are already being discussed. The sharp rise in
was recorded in December 2023. This decrease was
cars at lower prices and additional discounts on their
5
interest rates has primarily combated high consumer
due to the relatively high output figures of December
local market also due to government subsidies. These
prices and thereby also dampened demand. If interest
2022. In 2023, the EU car market closed with a solid
harmed the sales figures of traditional European car
rates rise, consumers, companies and the economy
growth of 13.6% compared to 2022, reaching a total
brands, whose cars are priced higher in comparison.
ANNUAL
will have to spend more on loans or borrow less money.
volume of 18.0 million produced units.
As a result, the European carmakers are losing market
ACCOUNTS
As a result, growth would slow down or even decline.
share in China. In the meantime, the Chinese automo-
6
This increases the risk of high unemployment, financial
The automotive industry and in particular the volume
bile manufacturer BYD has announced the construction
crises and the economy slipping into recession.
market saw a catch-up effect in 2023 after several
of an electric car factory in Europe, which is expected
stops of production lines and a lack of components,
ADDITIONAL
particularly in the semiconductor sector, in 2022.
1
According to GlobalData as per April 2024
INFORMATION
NOVEM ANNUAL REPORT 2023/24
37
CONTENTS
to be in operation after 2026. BYD has already replaced
quarter of 2023, the inflation rate has already fallen to
Volkswagen as the largest car manufacturer in China in
2.9% in January 2024 and 2.5% in February. This may
the first quarter of 2023. In total, more than 29 million
be due to the passing on of higher producer prices and
vehicles were produced in China in 2023.
wages, which could increase the core inflation rate or
keep it at the same stable level.
For the current calendar year 2024, the German Asso-
ciation of the Automotive Industry (VDA) is forecasting
The German government now only expects a minimal
1
a decline in sales of -1.0% for Germany, while sales in
increase in GDP of 0.1%. Last autumn, it still forecasted
Europe are expected to rise by 4.0%, in the USA by 2.0%
1.3%. High interest rates and inflation as well as an
and in China by 1.0%.
overall weak global economy have led to German GDP
TO OUR
falling by -0.3% in 2023. A stronger economic perfor-
SHAREHOLDERS
mance of 1.4% is forecast for 2024.
2
Forecast for global economic development
2023/2024
The IMF forecasts that Germany’s GDP will grow by
0.1% in 2024, while global trade is expected to grow by
NON-FINANCIAL
The global economy will grow slower for the third time
2.8% this year and 3.2% in 2025. In the Eurozone, GDP
REPORT
in a row because of major uncertainties for 2024, such
is expected to grow by 0.7% in 2024 and 1.5% in 2025.
3
as high interest rates, global crises, geopolitical ten-
sions, many new elections and low investment.
The short-term outlook remains challenging, and the
conflict in the Middle East and Ukraine could further
GROUP
Inflation in the US fell to 3.1% in January, although
exacerbate the situation. This escalation could again
MANAGEMENT
experts had forecast a fall to 2.9%. The inflation trend
lead to a rise in energy prices, which in turn could have
REPORT
is important for the US Federal Reserve’s future inter
-
an impact on global economic output and inflation.
4
est rate decisions. Due to the weakening of inflation,
Falling inflation is a glimmer of hope, and the resulting
interest rate cuts were already under discussion, but
rise in real incomes is likely to be the strongest driver
with the weaker development of the decline in inflation,
of this year’s economy. However, it should be noted
CONSOLIDATED
these cuts could be postponed. However, higher inter-
that political and economic crises are causing supply
FINANCIAL
est rates hit poorer countries particularly hard. Higher
chains to falter, resulting in supply bottlenecks.
STATEMENTS
costs for loans can turn them into a debt crisis.
5
Climate change and the rapid development of artificial
The overall inflation rate for the year 2023 was 8.1%.
intelligence will increasingly take centre stage in the
For 2024, the International Monetary Fund (IMF)
coming years.
ANNUAL
experts forecast an overall inflation rate of 7.5% and
ACCOUNTS
4.8% for 2025. The inflation rate in Germany for 2024
Most economies, whether industrialised nations or
6
is expected to be 2.3%, well below the rate in 2023 but
developing countries, will continue to grow more slowly
higher than the ECB’s 2.0% target. After 8.2% in the first
than before the Covid-19 pandemic.
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
38
FINANCIAL PERFORMANCE
CONTENTS
in € million
FY 2022/23
FY 2023/24
Change
% change
Revenue
700.3
635.5
-64.8
-9.3%
Increase or decrease in finished goods and work in process
-7.5
-15.4
-7.9
>100.0%
Total operating performance
692.8
620.1
-72.7
-10.5%
Other operating income
25.8
18.9
-6.9
-26.8%
Cost of materials
-354.7
-303.3
51.4
-14.5%
1
Personnel expenses
-168.6
-173.2
-4.6
2.7%
Depreciation, amortisation and impairment
-32.5
-33.7
-1.2
3.7%
Other operating expenses
-82.4
-69.5
12.9
-15.7%
TO OUR
SHAREHOLDERS
Operating result (EBIT)
80.5
59.3
-21.1
-26.3%
Finance income
3.6
7.4
3.8
>100.0%
2
Finance costs
-13.1
-19.9
-6.9
52.4%
Financial result
-9.5
-12.6
-3.0
31.9%
NON-FINANCIAL
Income taxes
-15.7
-13.1
2.7
-17.0%
REPORT
Deferred taxes
-5.2
1.1
6.3
<-100.0%
3
Income tax result
-20.9
-12.0
9.0
-42.8%
Profit for the period attributable to the shareholders
50.0
34.8
-15.2
-30.4%
GROUP
MANAGEMENT
Differences from currency translation
0.2
-1.6
-1.8
<-100.0%
REPORT
Items that may subsequently be reclassified to consolidated profit or loss
0.2
-1.6
-1.8
<-100.0%
4
Actuarial gains and losses from pensions and similar obligations (before taxes)
8.6
-1.6
-10.1
<-100.0%
Taxes on actuarial gains and losses from pensions and similar obligations
-2.2
0.5
2.7
<-100.0%
Items that will not subsequently be reclassified to consolidated profit or loss
6.3
-1.1
-7.4
<-100.0%
CONSOLIDATED
FINANCIAL
Other comprehensive income/loss, net of tax
6.6
-2.7
-9.2
<-100.0%
STATEMENTS
Total comprehensive income/loss for the period attributable to the shareholders
56.6
32.1
-24.4
-43.2%
5
Earnings per share attributable to the equity holders of the parent (in €)
basic
1.16
0.81
-0.35
-30.4%
ANNUAL
diluted
1.16
0.81
-0.35
-30.4%
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
39
CONTENTS
Revenue
Change in finished goods and work in
performance, personnel expenses increased by 3.6
process
percentage points year‑on‑year to 27.9% this year (PY:
Total revenue of €635.5 million in the financial year
24.3%). Personnel costs were negatively affected by
2023/24 decreased by €‑64.8 million or ‑9.3% compared
Change of finished goods and work in process
inefficiencies due to the weak customer call‑offs.
to last year. Based on prior year (constant) exchange
decreased by €-7.9 million (>100%) from €-7.5 million
rates, revenue would have been higher by 2.1%. This
in the financial year 2022/23 to €‑15.4 million in the
Depreciation, amortisation and impairment
currency impact was primarily influenced by the weak
financial year 2023/24 driven by lower finished goods
1
US Dollar and Chinese Renminbi. On a segmental basis,
(€-4.0 million), work in process (€-2.3 million) as well
revenue in 2023/24 was generated in Europe (€287.0
as lower tooling inventories (€‑1.3 million) and profit in
Novem reported depreciation, amortisation and impair-
million), followed by Americas (€271.9 million) and Asia
stock elimination (€-0.3 million).
ment of €‑33.7 million in financial year 2023/24, a slight
TO OUR
(€76.6 million).
increase of 3.7% or €‑1.2 million compared to financial
SHAREHOLDERS
year 2022/23. The increase was primarily attributable
2
Other operating income
to higher accelerated depreciation (€-0.7 million) as
Revenue development
well as higher depreciation on machinery (€-0.5 million).
Other income decreased by €-6.9 million from €25.8 mil-
NON-FINANCIAL
lion last year to €18.9 million in financial year 2023/24.
in € million
FY 2022/23 FY 2023/24 % change
REPORT
Other operating expenses
The deviation mainly resulted from less currency trans-
Revenue Series
618.2
553.1
-10.5%
3
lation gains of €-4.3 million, lower income from other
Revenue Tooling
82.1
82.5
0.5%
periods of €-2.4 million as well as lower other income
Other operating expenses declined from €-82.4 million
Revenue
700.3
635.5
-9.3%
of €-1.6 million, partly compensated by higher income
in financial year 2022/23 by €12.9 million to €‑69.5
GROUP
from the release of accruals of €1.4 million.
million in financial year 2023/24. This decrease mainly
MANAGEMENT
resulted from lower order-related expenses, foreign
REPORT
Revenue Series
currency translation losses and loss allowances on
4
Cost of materials
receivables as well as lower legal and advisory fees.
Revenue Series recorded at €553.1 million in the cur-
rent financial year, ‑10.5% below last year (PY: €618.2
Cost of materials decreased from €-354.7 million in
CONSOLIDATED
Finance income and costs
million). Revenue Series generated 87.0% of total rev-
financial year 2022/23 to €‑303.3 million in financial
FINANCIAL
enue and remained the key pillar of the business.
year 2023/24, resulting in a year‑on‑year change of
STATEMENTS
-14.5%. The cost of materials to output (total operat-
The financial result amounted to €‑12.6 million for
5
ing performance) ratio decreased by -2.3 percentage
financial year 2023/24, compared to last year’s amount
Revenue Tooling
points to 48.9% in financial year 2023/24 (PY: 51.2%).
of €-9.5 million.
ANNUAL
Revenue Tooling contributed €82.5 million to total
Finance income increased from €3.6 million in financial
ACCOUNTS
Personnel expenses
revenue in the financial year 2023/24 (PY: €82.1 mil-
year 2022/23 by €3.8 million to €7.4 million in current
6
lion). This led to a year-on-year increase of €0.4 mil-
financial year. The positive deviation was predomi-
lion (+0.5%), predominantly due to a different project
Personnel expenses amounted to €-173.2 million in
nantly attributable to currency translation effects and
phasing.
financial year 2023/24, up €‑4.6 million or 2.7% com-
interest income.
ADDITIONAL
pared to last year. As a percentage of total operating
INFORMATION
NOVEM ANNUAL REPORT 2023/24
40
CONTENTS
Finance costs in financial year 2023/24 recorded at
€‑19.9 million (PY: €‑13.1 million), an increase of €‑6.9
million or 52.4%. Higher interest rates increased finance
costs in the current financial year, while lower foreign
currency exchange effects compared to previous year
impacted the result positively.
1
Income tax result
TO OUR
Income tax result in financial year 2022/23 in the
SHAREHOLDERS
amount of €-20.9 million decreased by €9.0 million
2
to €‑12.0 million in financial year 2023/24 (‑42.8%).
Both income taxes (€-13.1 million) as well as deferred
taxes (€1.1 million) decreased in current financial year
NON-FINANCIAL
2023/24 compared to prior year.
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
41
CONTENTS
Adjustments
Adj. EBIT
in € million
FY 2022/23
FY 2023/24
Change
% change
Revenue
700.3
635.5
-64.8
-9.3%
Adj. EBIT represents the operating result adjusted
EBIT
80.5
59.3
-21.1
-26.3%
for exceptional non-recurring items. As such, Novem
1
EBIT margin
11.5%
9.3%
adjusts certain one-off effects to better show the
underlying operating performance of the Group. The
Restructuring
-
8.9
8.9
-
adjustments made follow a pre‑defined and transpar-
Covid-19 costs
0.3
-
-0.3
-100.0%
TO OUR
ent approach and form part of the regular monthly
SHAREHOLDERS
Others
0.9
0.8
-0.1
-10.9%
closing and reporting routines.
2
Exceptional items
1.3
0.8
-0.4
-34.5%
Discontinued operations
-
-
-
-
Adjustments
Adjustments
1.3
9.7
8.4
>100.0%
NON-FINANCIAL
REPORT
Adj. EBIT
81.7
69.1
-12.7
-15.5%
Adjustments in the financial year 2023/24 were sig-
Adj. EBIT margin
11.7%
10.9%
3
nificantly higher than last year by €8.4 million and
contained €5.3 million restructuring costs in connec-
Depreciation and amortisation
32.5
33.0
0.5
1.5%
tion with the plant closure in Bergamo, €3.6 million
Adj. EBITDA
114.2
102.0
-12.2
-10.7%
GROUP
restructuring costs relating to plant Vorbach, €0.5 mil-
Adj. EBITDA margin
16.3%
16.1%
MANAGEMENT
lion project costs and €0.3 million Others.
REPORT
4
The Adj. EBIT margin of 10.9% for the financial year
2023/24 recorded ‑0.8 percentage points below prior
year’s figure of 11.7%. Therefore, the Adj. EBITDA
CONSOLIDATED
margin of 16.1% was also behind the 16.3% margin of
FINANCIAL
previous year.
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
42
FINANCIAL POSITION
CONTENTS
Assets
Equity and liabilities
in € million
31 Mar 23
31 Mar 24
Change
% change
in € million
31 Mar 23
31 Mar 24
Change
% change
Share capital
0.4
0.4
0.0
0.0%
Intangible assets
2.4
2.8
0.4
16.8%
Capital reserves
539.6
539.6
0.0
0.0%
Property, plant and equipment
185.1
193.9
8.8
4.7%
Retained earnings/accumulated
1
Trade receivables
46.3
49.8
3.5
7.5%
-443.4
-459.2
-15.8
3.6%
losses
Other non-current assets
10.3
13.1
2.8
27.6%
Currency translation reserve
10.6
9.1
-1.6
-14.7%
Deferred tax assets
8.3
10.6
2.3
27.1%
TO OUR
Total equity
107.3
89.9
-17.4
-16.2%
SHAREHOLDERS
Total non-current assets
252.5
270.2
17.7
7.0%
Pensions and similiar obligations
27.0
28.7
1.7
6.3%
2
Inventories
116.3
99.4
-16.9
-14.5%
Other provisions
1.4
2.3
0.9
66.3%
Trade receivables
47.5
41.3
-6.2
-13.0%
Financial liabilities
248.2
248.8
0.5
0.2%
Other receivables
38.0
30.0
-8.0
-21.1%
Trade payables
-
0.0
0.0
-
NON-FINANCIAL
Other liabilities
33.3
55.6
22.4
67.2%
REPORT
Other current assets
18.2
19.6
1.4
7.6%
Deferred tax liabilities
0.6
1.4
0.7
>100.0%
Cash and cash equivalents
165.5
141.5
-24.0
-14.5%
3
Total non-current liabilities
310.6
336.8
26.2
8.4%
Total current assets
385.5
331.9
-53.6
-13.9%
Tax liabilities
19.1
7.6
-11.5
-60.2%
Assets
638.0
602.1
-35.9
-5.6%
GROUP
Other provisions
46.7
38.9
-7.8
-16.8%
MANAGEMENT
Financial liabilities
1.2
1.2
0.0
1.2%
REPORT
Trade payables
60.6
45.4
-15.1
-25.0%
4
Other liabilities
92.7
82.4
-10.3
-11.1%
Total current liabilities
220.2
175.5
-44.7
-20.3%
CONSOLIDATED
Equity and liabilities
638.0
602.1
-35.9
-5.6%
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
43
CONTENTS
Total assets
Working capital
generated in the financial year 2023/24 (€34.8 million).
Currency translation differences to Euro decreased by
Total assets amounted to €602.1 million as of 31 March
€‑1.6 million (‑14.7% y/y).
in € million
31 Mar 23
31 Mar 24 % change
2024, a decrease of €-35.9 million or -5.6% compared
Inventories
64.1
56.2
-12.3%
to the end of the last financial year 2022/23 (31 March
Trade
Non-current liabilities
43.7
35.1
-19.7%
2023: €638.0 million).
receivables
Trade payables
-54.5
-40.2
-26.3%
1
Non-current liabilities increased from €310.6 million as
Trade working
Non-current assets
53.3
51.1
-4.0%
of 31 March 2023 by 8.4% to €336.8 million as of 31
capital
March 2024. This was largely driven by the aforemen-
TO OUR
Tooling net
55.5
67.3
21.2%
Non-current assets increased from €252.5 million as
tioned renewal of existing lease contracts.
SHAREHOLDERS
Contract assets
15.3
14.9
-2.2%
of 31 March 2023 by 7.0% to €270.2 million as of 31
2
Total working
March 2024. This movement was mainly attributable
124.0
133.3
7.5%
capital
Net financial debt
to an increase in property, plant and equipment by
€8.8 million or 4.7% due to the renewal of existing lease
NON-FINANCIAL
contracts, higher tooling amortisation trade receivables
Total working capital amounted to €133.3 million as
REPORT
in € million
31 Mar 23
31 Mar 24 % change
of €3.5 million and the recognition of development con-
of 31 March 2024 and, therefore, 7.5% higher than as
Liabilities to
3
tributions for won platforms during the financial year
of 31 March 2023. The increase was mainly due to a
249.4
249.9
0.2%
banks
2023/24.
higher tooling net position and lower trade payables,
Liabilities from
with an offsetting effect in trade receivables. The
-
0.1
-
derivatives (-)
GROUP
largest changes in tooling net related to a decrease in
MANAGEMENT
Lease liabilities
39.1
56.5
44.6%
Current assets
the tooling-related deferred income position of €13.0
REPORT
Gross financial
million due to project closures as well as a rise in
288.5
306.4
6.2%
debt
4
Current assets decreased to €331.9 million compared
tooling receivables of €4.7 million, positively affected
Cash and cash
to the previous balance sheet date (€385.5 million),
by a decrease in tooling inventories by €-11.5 million.
-165.5
-141.5
-14.5%
equivalents
down €-53.6 million or -13.9%. This change primarily
Consequently, total working capital in % of LTM revenue
Net financial debt
123.0
164.9
34.1%
CONSOLIDATED
stemmed from a lower cash position (€-24.0 million)
increased by 3.3 percentage points to 21.0% (31 March
FINANCIAL
due to the dividend payment of €49.5 million distributed
2023: 17.7%).
STATEMENTS
in August 2023 and lower inventories (€-16.9 million).
Gross financial debt stood at €306.4 million as of 31
5
Further drivers were lower other receivables (€‑8.0 mil-
March 2024 and thus saw an increase of €17.9 million,
Equity
lion), resulting from lower VAT receivables, and lower
mostly due to the increase in lease liabilities of €17.4
trade receivables (€-6.2 million). Through non-recourse
million. Cash and cash equivalents decreased by €‑24.0
ANNUAL
factoring, Novem sold €44.3 million trade receivables
As of 31 March 2024, the equity position dropped
million compared to the end of the last financial year
ACCOUNTS
as of 31 March 2024, falling below the volume of €54.1
from €107.3 million at the end of the last financial year
2022/23, mainly driven by the dividend payment. Both
6
million as of 31 March 2023 by €-9.8 million.
2022/23 to €89.9 million, attributable to the dividend
effects are accountable for the unfavourable increase
payment of €49.5 million, which was offset by the profit
in the net financial debt of €41.9 million.
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
44
CONTENTS
Net leverage
in € million
31 Mar 23
31 Mar 24
Net financial debt
123.0
164.9
LTM Adj. EBITDA
114.2
102.0
Net leverage ratio
1.1x
1.6x
1
The net leverage ratio is defined as net financial debt
divided by Adj. EBITDA for the last 12 months. The ratio
TO OUR
rose from 1.1x Adj. EBITDA at the end of the financial
SHAREHOLDERS
year 2022/23 to 1.6x Adj. EBITDA as of 31 March 2024
2
due to the adverse development of both key indicators
net financial debt and LTM Adj. EBITDA.
NON-FINANCIAL
REPORT
Current liabilities
3
Current liabilities amounted to €175.5 million as of 31
March 2024, down -20.3% or €-44.7 million compared to
GROUP
the end of the last financial year 2022/23. The decrease
MANAGEMENT
primarily resulted from lower trade payables of €-15.1
REPORT
million, followed by lower tax liabilities of €-11.5 million
4
or -60.2% and lower other liabilities of €-10.3 million due
to tooling project closures resulting in revenue recogni-
tion of received advanced payments.
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
45
CASH FLOWS
CONTENTS
in € million
FY 2022/23
FY 2023/24
Change
% change
Cash flow from operating activities
98.3
63.8
-34.6
-35.1%
Cash flow from investing activities
-13.8
-10.0
3.8
-27.3%
Cash flow from financing activities
-35.5
-77.8
-42.2
>100.0%
Net increase (+)/decrease (-) in cash and cash equivalents
49.0
-24.0
-73.0
<-100.0%
Effect of exchange rate fluctuations on cash and cash equivalents
-0.5
0.0
0.5
<-100.0%
1
Cash and cash equivalents at the beginning of the reporting period
117.0
165.5
48.5
41.5%
Cash and cash equivalents at the end of the reporting period
165.5
141.5
-24.0
-14.5%
TO OUR
SHAREHOLDERS
2
Cash flow from operating activities
Cash flow from financing activities
Cash flow from operating activities fell from €98.3 mil-
Cash out‑flow for financing activities showed the larg-
NON-FINANCIAL
lion by €‑34.6 million to €63.8 million in financial year
est deviation and increased by €-42.2 million to €-77.8
REPORT
2023/24. The development resulted from a decline in
million in the financial year 2023/24. The underlying
3
profit of €‑15.2 million as well as a decrease in provi-
reasons include the elevated interest rate level of the
sions of €-21.1 million and other liabilities of €-18.4
financing structure due to the raised base rate, resulting
million compared to the same reporting period last
in an increase in interest paid of €-8.4 million, along
GROUP
year. In addition, taxes paid increased by €-15.8 mil-
with the effect of the dividend distribution of €-32.3
MANAGEMENT
lion. This was partially offset by favourable changes of
million.
REPORT
€13.8 million in other assets and €11.6 million in trade
4
receivables.
CONSOLIDATED
Cash flow from investing activities
FINANCIAL
STATEMENTS
Cash out‑flow for investing activities reached €‑10.0
5
million in the financial year 2023/24 (PY: €‑13.8 million).
The main changes related to higher interest received of
€2.5 million and lower investments made in the amount
ANNUAL
of €1.8 million. This was counterbalanced by previous
ACCOUNTS
year’s positive effect from the sale of the production
6
premises in Kulmbach.
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
46
SEGMENT REPORTING
CONTENTS
Europe
Americas
Asia
External revenue in Europe decreased significantly
America’s external revenue increased from €264.1 mil-
External revenue in Asia reduced by -25.9% or €-26.7
from €332.9 million in the last financial year 2022/23
lion last year to €271.9 million this year and exceeded
million from €103.3 million in financial year 2022/23
to €287.0 million in 2023/24, a decline to prior year by
prior year by 3.0% or €7.8 million. The currency transla-
to €76.6 million this financial year 2023/24. The effect
-13.8% or €-45.9 million.
tion impact amounted to €-7.1 million.
of currency translation totalled €-6.0 million.
1
In financial year 2023/24, Europe accounted for 45.2%
Americas contributed 42.8% of total revenue in the
Revenue from Asia equalled 12.0% of total revenue in
of total revenue (PY: 47.5%).
financial year 2023/24 (PY: 37.7%).
the financial year 2023/24 (PY: 14.7%).
TO OUR
Adj. EBIT in financial year 2023/24 reduced to €5.8 mil-
Adj. EBIT in the region Americas came in at €56.2 mil-
Adj. EBIT in Asia amounted to €7.1 million in the cur-
SHAREHOLDERS
lion, ‑74.8% short of prior year (PY: €23.1 million). As a
lion in 2023/24 and was therefore 27.1% higher com-
rent financial year 2023/24, which shows a decline of
2
result, the Adj. EBIT margin also declined to 1.8% from
pared to previous year (PY: €44.2 million). Therefore,
‑51.1% year‑on‑year (PY: €14.5 million). The Adj. EBIT
6.0% last year.
the Adj. EBIT margin increased to 16.6% from 13.0%
margin decreased from 11.8% last year to 7.7%.
previous year.
NON-FINANCIAL
Weak customer call‑offs caused operational inefficien-
The decrease in Asia was attributable to lower rev-
REPORT
cies in the region Europe. An unfavourable product mix
The region Americas benefitted from the release of
enue Series stemming from the phase-out of larger
3
impacted the bottom line, although customer com-
accruals, buoyant revenue from SUV platforms as well
platforms and slower ramp-up of the new Chinese
pensation payments partially alleviated the negative
as improvements in freight expenses and input costs.
programs, which was partially offset by strong Tool-
deviation.
ing business.
GROUP
MANAGEMENT
REPORT
4
in € million
FY 2022/23 FY 2023/24 % change
in € million
FY 2022/23 FY 2023/24 % change
in € million
FY 2022/23 FY 2023/24 % change
External revenue
332.9
287.0
-13.8%
External revenue
264.1
271.9
3.0%
External revenue
103.3
76.6
-25.9%
Revenue between
Revenue between
Revenue between
51.5
44.4
-13.7%
74.8
66.5
-11.0%
18.7
15.6
-16.5%
CONSOLIDATED
segments
segments
segments
FINANCIAL
STATEMENTS
Total revenue
384.4
331.5
-13.8%
Total revenue
338.9
338.4
-0.1%
Total revenue
122.0
92.2
-24.4%
Adj. EBIT
23.1
5.8
-74.8%
Adj. EBIT
44.2
56.2
27.1%
Adj. EBIT
14.5
7.1
-51.1%
5
Adj. EBIT margin
6.0%
1.8%
Adj. EBIT margin
13.0%
16.6%
Adj. EBIT margin
11.8%
7.7%
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
47
STAND-ALONE RESULTS OF OPERATIONS AND FINANCIAL
POSITION OF NOVEM GROUP S.A.
CONTENTS
Financial position
In accordance with the provisions of article 1720-1 (3)
of the Law of 10 August 1915 in relation to commercial
companies, the Company opted to present one annual
Total assets and total liabilities amounted to €928.6
report including the consolidated management report
million each (31 March 2023: €933.6 million).
1
and the management report on the annual accounts
as one annual report only. For the stand‑alone annual
Fixed assets essentially comprised shares in affiliated
accounts of Novem Group S.A., please refer to chapter
undertakings, which remained unchanged at €674.2
TO OUR
Annual accounts.
million (31 March 2023: €674.2 million) and a share-
SHAREHOLDERS
holder loan with a principal amount of €250.0 million
2
(31 March 2023: €250.0 million).
Results of operations
Current assets amounted to €2.3 million (31 March
NON-FINANCIAL
The Company’s other income amounted to €2.6 million
2023: €6.4 million) and included mainly the incorpo-
REPORT
(PY: €1.6 million) and resulted from services that are
rated intercompany loan as part of the refinancing,
3
provided to other Novem Group entities based on the
receivables from the service agreement, receivables
service agreement.
from the tax authorities and the Company’s cash
position.
GROUP
The external charges of €1.1 million (PY: €1.0 million)
MANAGEMENT
included mainly advisory, insurance and audit fees and
The Company’s capital and reserves decreased to
REPORT
to a smaller amount of legal fees.
€673.7 million (31 March 2023: €681.8 million).
4
The income from participating interests of €40.0
The amounts owed to credit institutions carried €250.0
million (PY: €18.0 million) derived from the dividend
million (31 March 2023: €250.0 million). In the course
CONSOLIDATED
distribution.
of the private placement and stock exchange listing
FINANCIAL
in financial year 2021/22, Novem Group S.A. entered
STATEMENTS
The interest income of €15.8 million (PY: €6.6 million)
into a facilities agreement comprising a term loan with
5
derived from an intercompany loan to another Novem
a principal amount of €250.0 million and an undrawn
Group entity. The total interest expenses of €13.3 mil-
revolving credit facility of €60.0 million. As part of
lion (PY: €6.4 million) occurred from interest expenses
the replacement of the former bond of Novem Group
ANNUAL
and fees to banks in loan-related terms. The increase
GmbH, the principal amount was transferred with
ACCOUNTS
resulted from higher total interest rates during the
the incorporation of a shareholder loan from Novem
6
financial year.
Group S.A. to Novem Group GmbH.
The profit for the financial year 2023/24 amounted to
ADDITIONAL
€41.4 million (PY: €16.2 million).
INFORMATION
NOVEM ANNUAL REPORT 2023/24
48
RISKS AND OPPORTUNITIES
CONTENTS
Risk and opportunity management
and efficiency of the system are continuously adapted
followed at all times or effectively detect and prevent
to new circumstances to provide a holistic picture of
violations of the applicable laws by one or more of
Within its global footprint, Novem is exposed to dynamic
the situation at all times.
the employees, consultants, agents or partners. As a
conditions and thus faces several opportunities and
result, Novem could be subject to penalties and mate-
risks. These include political and sector‑specific risks,
rial adverse consequences on the business, financial
Legal risks
the risk of ensuring appropriate liquidity, currency risks,
condition or results of operations if the Group failed to
financial risks, business process risks, research and
prevent any such violations.
1
development risks, litigation risks, loss of know-how
The Group’s companies are and could become involved
and IT risks. Realising any of these risks could have
in legal, administrative and arbitration proceedings.
Members of governing bodies, employees, author-
a material and adverse effect on business, financial
These proceedings or potential proceedings could
ised representatives or agents may intentionally or
TO OUR
condition and results of operations. Sustainable suc-
involve, in particular in the United States, substantial
unintentionally violate applicable laws and internal
SHAREHOLDERS
cess is ensured through active risk management and
claims for damages or other payments. Based on a
standards and procedures, in particular in relation to
2
the ability to correctly anticipate market trends and
judgment or a settlement agreement, Novem could
anti-corruption, money-laundering, anti-trust and sanc-
developments. Operational management is respon-
be obligated to pay substantial damages. The litiga-
tions compliance, as well as compliance with laws
sible for identifying and exploiting opportunities. The
tion costs and those of third parties could also be
and regulations regarding sales practices, products
NON-FINANCIAL
aim is to identify opportunities in a timely manner and
significant.
and services, environment, finance, employment and
REPORT
to take appropriate measures to utilise them. Novem
general corporate and criminal law. However, there can
3
states in its long-term strategy the high relevance of
Doing business on a worldwide basis requires Novem
be no certainty that the internal controls, procedures,
identifying risks and opportunities arising from opera-
to comply with the laws and regulations of various
compliance systems and risk management systems
tions at an early stage, assessing them appropriately
jurisdictions. The international operations are subject
will be able to identify such violations, ensure that
GROUP
and mitigating them by specific measures. Compliance
to applicable anti-corruption laws and regulations and
they are reported in a timely manner, evaluate them
MANAGEMENT
with economic, social and environmental standards is
economic sanctions programs. Such programs may
correctly or take the appropriate countermeasures and
REPORT
deeply rooted in the corporate philosophy. The Man-
restrict business dealings with certain sanctioned
that they will be adequate for an enterprise of Novem’s
4
agement Board makes use of various tools and control
countries. As a result of doing business in foreign
scale and complexity.
systems to prevent and, in case of the occurrence of an
countries, Novem is exposed to a risk of violating anti-
event, minimise the impact on the Group. Amongst the
corruption laws and sanctions regulations applicable
There can further be no certainty that any countermeas-
CONSOLIDATED
key components are continuous and detailed internal
in those countries where Novem, partners or agents
ures Novem implements will be appropriate to reduce
FINANCIAL
reporting and controlling processes as a focus of risk
operate. Worldwide operations increase the risk of vio-
the corresponding business risks effectively, that
STATEMENTS
management, which aim to identify risks to assets,
lations of anti-corruption laws or similar laws. Some
breaches of law, regulations or internal controls have
5
income or liquidity as early as possible and to take
of the countries in which Novem operates still lack a
not occurred in the past or that their discovery would
appropriate and effective steps to manage risks and
developed legal system with high standards regarding
not result in significant liability or reputational dam-
seize opportunities. By monitoring the market and all
anti-corruption and similar laws and are perceived to
age for the Group. Moreover, in light of continuously
ANNUAL
stakeholders, continuous optimisation and adaptation
have high levels of corruption.
evolving legal and regulatory requirements and internal
ACCOUNTS
to current challenges are guaranteed. Novem’s busi-
developments such as corporate reorganisations, there
6
ness opportunities and risks are recorded, analysed
While there are policies and procedures in place that
can be no certainty that the risk management systems,
and evaluated through active multi-tiered planning,
are designed to promote compliance with applicable
internal controls and compliance systems and related
information and control processes. The effectiveness
anti-corruption laws and sanctions, there can be no
governance structures will adequately identify and
ADDITIONAL
assurance that the policies and procedures will be
address all relevant requirements.
INFORMATION
NOVEM ANNUAL REPORT 2023/24
49
CONTENTS
Financial risks
Novem has to comply with different regulatory regimes
Even if Novem enters into certain further hedging
across the world that change frequently and are con-
arrangements in the future, there can be no assurance
tinuously evolving and becoming more stringent, in
Novem operates worldwide and is therefore exposed
that hedging will be available on commercially reason-
particular with respect to environmental regulations,
to financial risks arising from exchange rate changes.
able terms. In addition, if the Group were to use any
chemicals and hazardous materials, as well as health
The primary exposure is to the Euro to US Dollar, US
hedging transactions in the future in the form of deriva-
and safety regulations. This also applies to air, water
Dollar to Mexican Peso and Euro to Chinese Renminbi
tive financial instruments, such transactions may result
and soil pollution regulations and to waste legislation
exchange rates. Currency exchange fluctuations could
in mark-to-market losses.
1
and regulation, all of which have recently become more
cause losses if assets denominated in currencies with
stringent through new laws.
a falling exchange rate lose value, while at the same
Liquidity and credit risks
time liabilities denominated in currencies with a ris-
TO OUR
Moreover, Novem globally faces increasing require-
ing exchange rate appreciate. In addition, fluctuations
SHAREHOLDERS
ments regarding matters of corporate responsibility
in foreign exchange rates could increase or reduce
Working capital requirements can vary, depending
2
management and transparency, not only with respect
fluctuations in the prices of materials, since Novem
in part on the level, variability and timing of custom-
to expectations from internal stakeholders, customers,
purchases some of the raw materials with foreign
ers’ vehicle production, the number of new platform
investors and the general public but also concerning
currencies. As a result of these factors, fluctuations in
launches and the payment terms with customers and
NON-FINANCIAL
legal requirements.
exchange rates and, in particular, a significant apprecia-
suppliers. Liquidity could also be adversely impacted
REPORT
tion of the Euro against other major currencies could
if suppliers were to suspend normal trade credit terms
3
In addition, for the manufacturing facilities and opera-
affect the results of operations.
and require payment in advance or on delivery. If the
tions, Novem requires various permits and has to
available cash flows from operating activities are not
comply with the requirements specified therein. In the
External and internal transactions involving the deliv-
sufficient to fund ongoing cash needs, Novem would
GROUP
past, adjusting to new requirements has necessitated
ery of products and services to and/or by third parties
be required to look to cash balances and availability
MANAGEMENT
significant investments and the Group assumes that
result in cash in‑flows and out‑flows, denominated in
for borrowings, including under the senior facilities
REPORT
further significant investments in this regard will be
currencies other than the Euro or the functional cur-
agreement dated 18 June 2021, to satisfy those needs.
4
required in the future.
rency of the respective subsidiary dealing with such
There can be no assurance that Novem, its suppliers
cash flow. To the extent that cash out‑flows are not
or customers will continue to have access to these or
The vehicle approval process (homologation) and the
offset by cash in‑flows resulting from operational
other sources of liquidity. This may increase the risk
CONSOLIDATED
implementation of increasingly stringent emission and
business in such currency, the remaining net foreign
that the Group cannot produce products or will have
FINANCIAL
consumption regulations are becoming increasingly
currency exposure is not neutralised.
to pay higher input prices, which may not be recovered
STATEMENTS
complex and time-consuming and may vary by country.
in selling prices.
5
While the Group hedges a portion of the exposure to
Furthermore, any additional requirements restricting
the exchange rate of the Euro to the US Dollar, Novem
Novem’s suppliers typically seek to obtain credit insur-
or limiting car traffic with an aim at reducing green-
currently does not hedge all foreign exchange risks.
ance for deliveries of raw materials and components
ANNUAL
house gas or other emissions could lead to a mate-
In addition, a number of the consolidated companies
to Novem. If, for any reason, the suppliers were not
ACCOUNTS
rial decrease in car sales and consequently adversely
report in currencies other than the Euro, which requires
able to obtain such credit insurance, or not at com-
6
affect demand for the Group’s products and services.
Novem to convert the respective financial information
mercial terms, they may not be able to offer the same
into Euro when preparing the consolidated financial
payment terms that the Group has historically received,
statements.
which could significantly increase working capital
ADDITIONAL
requirements.
INFORMATION
NOVEM ANNUAL REPORT 2023/24
50
CONTENTS
Any significant change in the needs for or the avail-
financial result and earnings. The Group constantly
that ongoing and/or future tax audits may lead to an
ability of working capital financing or credit insurance
monitors the financial markets in order to identify
additional tax expense and/or payment, which may be
may have a material adverse effect on liquidity. To
potential impacts in a timely manner and to determine
accompanied by potential double taxation, penalties or
strengthen the working capital structure, Novem
any need for action.
interest on tax payments and may, therefore, negatively
practices a silent and non-recourse factoring program
impact Novem’s financial performance, financial posi-
with a limit of €65 million. In case of liquidity short-
tion and cash flow.
Tax risks
ages, Novem possesses further facilities of €77 million.
1
Thereof €13 million are linked to an unused uncommit-
Regarding the global minimum taxation, it is important
ted credit line for Novem Car Interiors (China) Co., Ltd.
Novem is subject to taxation in, and to the tax laws and
to note that under Luxembourg Law, a minimum tax
regulations of, multiple jurisdictions as a result of the
rate of 15% for multinational companies with an annual
TO OUR
international scope of the operations and corporate and
revenue exceeding €750 million is being introduced to
SHAREHOLDERS
Interest rate risks
financing structure. Thus, the effective tax rate varies
prevent profit shifting to low tax jurisdictions (Pillar 2).
2
in each jurisdiction where Novem conducts business.
Novem, which operates internationally and whose rev-
Novem faces moderate interest rate risks, which mainly
Changes in the mix of earnings between jurisdictions
enue is close to the threshold, could be impacted by
derive from obligations based on reference interest
with lower tax rates and those with higher tax rates
this regulation in the future when reaching a revenue
NON-FINANCIAL
rates. Such variable interests affect the factoring pro-
could have a material adverse effect on profitability,
level of over €750 million, potentially leading to an
REPORT
gram as well as the senior facility agreement. The two
similar to a rise in tax rates in individual jurisdictions.
increased tax burden.
3
decisive reference interest rates are the 3-month Euri-
bor relating to factoring fees for EUR-receivables and
In addition, the tax authorities in any applicable juris-
Tax risks are identified, regularly monitored and
interest expenses for the senior facility agreement and
diction may disagree with the positions Novem has
assessed by the Tax department and necessary meas-
GROUP
the SOFR, which represents the base rate for factoring
taken or intends to take regarding the tax treatment
ures are taken.
MANAGEMENT
fees resulting from USD-receivables. The continued
or characterisation of any transactions, including the
REPORT
interest rate hike by the European Central Bank in 2023
tax treatment or characterisation of indebtedness
4
Customs risks and opportunities
led to a material increase in financial expenses aris-
or the deduction of interest expenses. Some Novem
ing from the senior facility agreement. Nevertheless,
subsidiaries have loss carryforwards and/or interest
a further 10% increase in both reference rates from
carryforwards as a result of applying the statutory
The sales volume of Novem’s products and services
CONSOLIDATED
today would have no material impact regarding the
interest ceiling rules that limit the deduction of net
depends upon the general global economic situation.
FINANCIAL
senior facility agreement and the factoring program.
interest expenses for tax purposes. The absence of tax-
Particular risks to the economic environment, inter-
STATEMENTS
able profits or relevant interest expenses could limit the
national trade and demand for the Group’s products
5
The interest rate risk regarding pension obligations
benefit of such carryforwards. The Group could also
may arise from growing protectionist sentiment in key
is also moderate as their share of total assets is less
fail, whether inadvertently or through reasons beyond
markets and the introduction of further tariff and non-
than 5%.
its control, to comply with tax laws and regulations,
tariff barriers or similar measures due to increasing
ANNUAL
which could result in unfavourable tax treatment.
protectionist tendencies.
ACCOUNTS
6
Financial market opportunities
Novem could accrue unanticipated tax expenses in
Since the beginning of 2018, the previous US admin-
relation to previous tax assessment periods which
istration announced a series of potential measures
Favourable developments in interest rates and
have not yet been subject to a tax audit or are cur-
relating to international trade that, individually or in
ADDITIONAL
exchange rates can have a positive impact on Novem’s
rently subject to a tax audit. It cannot be ruled out
aggregate, could have a material adverse impact on the
INFORMATION
NOVEM ANNUAL REPORT 2023/24
51
CONTENTS
global economy, international trade or the automotive
extreme weather events, global pandemics and disrup-
parts and components needed to manufacture cars
industry. The US administration enacted a number of
tions to the energy supply can lead to problems such
and other vehicles. An example of this is the war in
measures aimed at restricting the access of Chinese
as a shortage of cargo space, extreme delays and
Ukraine, where all these disruptions became apparent.
companies to the US market. Therefore, they began to
fluctuations in delivery times and customs clearance,
impose tariffs on certain products originating in China,
among others. This poses the risk of price increases,
Despite various trade barriers and unpredictable events,
including a 25% tariff on automotive trim parts and a
the normalisation of which can be unpredictable. The
such as the Russia-Ukraine war, the implementation of
7.5% on imports of aluminium. The Chinese government
EU announced a series of potential measures relat-
new free trade agreements between the EU and other
1
retaliated by imposing tariffs on several US products.
ing to international trade and the automotive industry.
third countries (such as Canada, Japan, Vietnam and
Even though the United States and China entered into
EUDR (EU Deforestation Regulation) and CBAM (Car-
Singapore in the past years) and efforts to build new
an Economic and Trade Agreement in January 2020 as
bon Border Adjustment Mechanism) are only two of
trade relations could reduce existing tariff barriers as
TO OUR
a first step, the trade conflict between the two countries
these actions that should lead to a more sustainable,
well as non-tariff measures. Novem also counters
SHAREHOLDERS
has not been resolved until today. But the agreement
green and fair supply chain. As a result, rising prices
these risks by constantly monitoring the markets,
2
in January 2022 on the import of steel and aluminium
and higher duties not only for transportation but also
focusing on the less affected market segments as
products from the EU into the US within the frame-
for gas and other purchased materials can negatively
well as adapting the global supply chains to changing
work of a tariff quota and the resulting elimination of
affect overall market demand and therefore Novem’s
customs and foreign trade conditions.
NON-FINANCIAL
additional tariffs will enable a positive development for
results of operations.
REPORT
international trade between the EU and the US and is a
Research and development risks and
3
first effort towards minimising trade barriers.
In addition, the increase in regional or international
opportunities
trade barriers, including anti-dumping tariffs and the
Also, the replacement of the North American Free
withdrawal of countries from bilateral and multilateral
GROUP
Trade Agreement (NAFTA) with the new United States‑
trade agreements could have a negative impact on
Future success depends on the ability to anticipate
MANAGEMENT
Mexico-Canada Agreement (USMCA) in 2020, which
the global economic environment and can thus lead
market trends as well as technological changes and
REPORT
includes more stringent rules of origin provisions (e.g.
to lower demand for the Group’s products. The automo-
to develop and bring new and improved products to the
4
increase of regional value content) and requirements
tive industry supply chain has developed over decades
market in a timely manner. The automotive market, in
for a minimum percentage of manufacturing being
and relies on existing trade arrangements to provide
particular, is characterised by progressive development
made with labour above a certain minimum wage
for cross-border supplies of raw materials, automotive
towards more driver and passenger comfort features,
CONSOLIDATED
could result in higher prices for vehicles, which could,
parts and other components.
digital user experience and assistance systems.
FINANCIAL
in turn, harm the demand for vehicles and thereby
STATEMENTS
indirectly Novem’s products. Novem has substantial
Extreme risks from acts of war can no longer be ruled
There can be no assurance that Novem will be suc-
5
operations in Mexico, currently supplying customers
out in the future and may also influence Novem’s
cessful in developing new products or systems or in
located in the United States under a preferred tariff sys-
further development. This could lead to a tightening
bringing them to market in a timely manner or at all.
tem. The imposition of additional import restrictions,
of export controls, political and economic sanctions
Further, it cannot be guaranteed that products or tech-
ANNUAL
non‑tariff trade barriers and/or tariffs could adversely
against countries as well as entities and massive bar-
nologies developed by others will not render offerings
ACCOUNTS
affect the ability to supply customers in the United
riers to importing and exporting goods. Also, the supply
obsolete or non-competitive or that customers will not
6
States or elsewhere. In addition, the results of opera
-
of strategic raw materials could be restricted and thus
substitute the Group’s products with competing prod-
tions could also be affected by retaliatory measures
become more expensive. The termination of existing
ucts. Additionally, there is no certainty that the market
from Europe, China or other countries imposing tariffs
trade agreements could significantly disrupt supply
will accept Novem’s innovations, that competitors will
ADDITIONAL
on the United States. Natural disasters, climate-related
chains and lead to immediate shortages of crucial
not be able to produce non-patented products more
INFORMATION
NOVEM ANNUAL REPORT 2023/24
52
CONTENTS
inexpensively from other sources or that the Group
for innovations. Therefore, the maturity level of our
the future continue to engage, in highly competitive
will be able to adjust its cost structure in the event of
offerings must increase significantly. If there is a shift
strategies, such as predatory pricing or mergers and
contraction of demand. Should Novem fail to develop
away from the use of materials or technologies in which
acquisitions, to gain market share. While Novem cur-
appropriate strategies as a response to these or other
Novem invests, the costs may not be fully recovered,
rently has a strong market position in the market for
market trends and should fail to enhance existing prod-
including, for example, the costs and expenses incurred
premium decorative interior trim elements, if consoli-
ucts, develop new products or keep pace with develop-
in connection with the development of or investment in
dation continues in the automotive components sec-
ing market trends or technology, growth opportunities
such material or technology. Novem may be placed at a
tor, the Group may have to compete against growing
1
could be lost or the Group could lose the opportunity
competitive disadvantage if other materials or technolo-
competitors who benefit from increased economies of
to win new platforms from existing customers. Fur-
gies emerge as industry-leading. One of the most impor-
scale or are part of large integrated groups and who
thermore, if Novem devotes resources to the pursuit of
tant future challenges is sustainability, where OEMs
may have greater financial and other resources or a
TO OUR
new technologies and products that fail to be accepted
already demand a high degree of recycled raw materi-
broader global footprint. Such competitors may also
SHAREHOLDERS
in the marketplace or that fail to achieve high process
als and a precise action plan towards CO2-neutrality.
be less margin-sensitive than Novem and attempt to
2
robustness, all or part of these engineering and devel-
The focus on sustainability of the business is seen as
increase their market share through pricing below cost.
opment expenses may be lost.
essential for the long-term success of the Group.
In addition, suppliers that do not currently compete with
Novem could expand their product portfolios to include
NON-FINANCIAL
A trend to highly integrated products on the OEM side,
Additionally, private users increasingly use modes of
products that are in direct competition. Changes in the
REPORT
including mechanical and electronic components, can
transportation other than the private automobile, espe-
product focus of larger suppliers could also result in
3
lead to a trend where only full system suppliers will
cially in connection with growing urbanisation and car
such suppliers establishing relationships with custom-
be Tier‑1 suppliers. Novem’s business requires a high
sharing. The increased use of car sharing concepts
ers that reduce or entirely replace Novem’s business
level of technical expertise for the design, develop-
and new city-based car rental schemes could reduce
with those customers. Given the Group’s strong market
GROUP
ment and manufacturing of products. Novem invests
dependency on private automobiles and demand for
position, OEMs have in the past awarded and may in
MANAGEMENT
in technology, new materials and innovation, which
customised premium vehicles. On the other hand, the
the future award certain platforms to competitors to
REPORT
the Group believes will be critical to long-term growth.
trend towards shared mobility can lead to a need for
diversify their supplier portfolio, which has resulted
4
Furthermore, it needs to continually adapt its exper-
more premium interiors as a differentiation method for
or may result in the loss of nominations in the future
tise in response to technological innovations, industry
mobility providers.
and which may limit the potential for future growth of
standards and customer requirements or preferences.
Novem’s market share.
CONSOLIDATED
FINANCIAL
Customer and market risks and
The ability to anticipate changes in technology and
The financial condition of customers is affected by
STATEMENTS
opportunities
market trends and to successfully develop and intro-
the sales of their vehicles, which may be impacted by
5
duce new and enhanced products or manufacturing
several factors, including general economic conditions.
processes on a timely basis will be a significant factor
Novem’s products are highly competitive in terms of
In particular, purchases of the customers’ products
in the ability to remain competitive. New technologies,
price, quality, delivery performance, innovation, product
may be limited by their customers’ inability to obtain
ANNUAL
materials or changes in industry and customer require-
design, engineering capability and service. They face
adequate financing for such purchases or by decreas-
ACCOUNTS
ments may render one or more of the current offerings
significant competition in all regions within each major
ing customer demand for light vehicles in general.
6
obsolete, excessively costly or otherwise unmarket-
product category.
able. Another factor that poses challenges is the trend
The Group may not fully or accurately assess the cred-
towards reduced development times. Especially EV
Some of Novem’s competitors, in particular in the
itworthiness of customers. In particular, the financial
ADDITIONAL
companies and Asian OEMs reduce the time to market
Asian market, have in the past engaged, and may in
condition of and demand for Novem’s products from
INFORMATION
NOVEM ANNUAL REPORT 2023/24
53
CONTENTS
OEM customers have been and continue to be affected
could also materially impact the financial position and
does not actively hedge against the risk of rising prices
by the consequences of the Covid‑19 pandemic and
results of operations.
of raw materials or energy. Contracts with customers
the Russia‑Ukraine war. Significantly lower global pro-
do not include pass-through mechanisms regarding
duction levels, tightened liquidity and increased cost
Market‑specific opportunities primarily relate to con-
inflationary price increases on raw materials or energy
of capital have in the past combined to cause financial
sumer spending trends concerning the automotive
prices and if Novem is not able to compensate for such
distress amongst many OEMs and other customers as
industry. The trend for interior design is to view the car
price increases or undertake cost-saving measures
well as suppliers in the automotive industry and could
more as a wellness oasis on wheels. Interior design
elsewhere in operations, they could have a material
1
have a similar impact in the future.
and details set standards and decisively influence
adverse impact on the financial results.
consumer behaviour. Novem’s objective is to stabilise
Although Novem supplies products to almost all lead-
and maintain its attained growth and to generate future
TO OUR
Logistics risks
ing premium OEMs, the Group depends on certain large
profitable growth. Management pays close attention to
SHAREHOLDERS
customers for a significant proportion of revenue. In
how the automotive market responds to developments
2
the financial year 2023/24, the three largest customers
in consumer confidence. The Group’s product and ser-
Complex supply and delivery chains make logistics
represented approximately 71% of revenue. The loss
vice range put Novem in a good position to benefit from
processes in Novem’s industry very vulnerable to dis-
of all or a substantial portion of the revenue with any
expected future trends. Its global presence allows it to
ruptions. Conflicts, such as those currently unfolding
NON-FINANCIAL
large-volume customers could have a material adverse
shift activities in markets in order to realise its cost-
in the Red Sea, complicate and delay this exchange of
REPORT
impact on Novem’s business, financial condition and
cutting potential and further enhance its proximity to
goods. As a result, Novem has experienced temporary
3
results of operations. This risk could also materialise
the customer.
decreases in orders from customers due to supply
if the content per vehicle awarded to Novem were to
chain disruptions in the past and expects this to con-
decrease or if a lower amount of content per vehicle
tinue in the future.
Material and supplier risks
GROUP
than expected is awarded. While Novem has generally
MANAGEMENT
benefitted from increasing content per vehicle in the
In general, supply chain disruptions may result from
REPORT
past, there have also been platforms with decreasing
Prices of certain raw materials and the energy the
many reasons, including closures of supplier facili-
4
content per vehicle.
Group relies on are linked to commodity markets and
ties or critical manufacturing facilities due to strikes,
thus subject to fluctuation. The primary raw materials
mechanical breakdowns, electrical outages, fire and
In addition, the market for premium vehicles is signifi-
and components used in the products are chrome and
explosions, as well as logistical complications resulting
CONSOLIDATED
cantly consolidated with a limited number of premium
plastic parts, wood, aluminium, granulates, glue and
from weather or other natural disasters, mechanical
FINANCIAL
OEMs primarily based in Europe. The amount of busi-
synthetic materials. The prices of such raw materials
failures, border controls, health checks and delayed
STATEMENTS
ness with Asia-based OEMs generally lags that of the
have fluctuated significantly in recent years. Compared
customs processing or due to limitation of travel in
5
largest customers in Europe, partly due to the existing
to the increases in the last two years, prices have bot-
logistics caused by the Covid-19 or another pandemic.
relationships between these Asian OEMs and their
tomed out and began to reduce. In addition, Novem
preferred suppliers.
uses large amounts of energy in the manufacturing
In recent years, Novem has broadened its supplier base
ANNUAL
process, the price of which is also subject to signifi-
to include new suppliers in local markets, particularly
ACCOUNTS
Consolidation amongst customers could result in an
cant volatility. Such volatility in the prices of these com-
in the United States, Mexico, Canada and Asia, who
6
increasingly concentrated client base of large custom-
modities could increase the costs of manufacturing
have not yet proven their ability to consistently meet
ers, which could, among others, increase the bargaining
products. In addition, supply shortages or delays in the
the Group’s requirements. The lack of even a small
power of current and future customers. Mergers of cus-
delivery of raw materials, components or energy can
single subcomponent or raw material necessary to
ADDITIONAL
tomers with entities that are not Novem’s customers
also result in increased manufacturing costs. Novem
manufacture one of the products, for whatever reason,
INFORMATION
NOVEM ANNUAL REPORT 2023/24
54
CONTENTS
could force Novem to cease production, possibly for
personnel, could have a material adverse effect on the
students) as of 31 March 2024. The labour force in
a prolonged period. Similarly, a potential quality issue
Group’s market position. Due to intense competition
the automotive industry, including Novem’s, is highly
could force Novem to halt deliveries while validating the
within the industry, there is a risk of losing qualified
unionised, especially in Europe and Mexico. Over the
products. Even where products are ready to be shipped
employees to competitors or being unable to find a suf-
past several years, the Group’s industry and the indus-
or have been shipped, delays may arise before they
ficient number of appropriate new employees. Consid-
tries in which Novem’s customers operate have experi-
reach the customer. If Novem ceases timely deliveries,
erable expertise could be lost or access thereto gained
enced strikes, lockouts or refusals to work. Although in
the Group has to absorb its own costs for identifying
by competitors.
the recent past the Group has not experienced, and at
1
and solving the cause of the problem, as well as expedi-
present is not experiencing any major labour disputes,
tiously producing and shipping replacement products.
There is no assurance that the Group will be successful
the relationships with employees and unions at vari-
in retaining its executives and employees in key posi-
ous locations could deteriorate in the future and the
TO OUR
If Novem is unable to deliver products to the custom-
tions or in attracting new employees with correspond-
Group could experience strikes, further unionisation
SHAREHOLDERS
ers on time, the customers may be forced to cease
ing qualifications. Although Novem tries to retain the
efforts or other types of conflicts with labour unions
2
production and may seek to recoup losses, which could
commitment of qualified executives and key employ-
or employees. Refusals to work or work downtime
be significant. Thus, any supply chain disruption could
ees through a trustful individualised leadership rela-
experienced by customers or other suppliers could
cause the complete shutdown of an assembly line of
tion, open-minded, diverse and fault-tolerated culture
result in delays, decreased productivity or closures
NON-FINANCIAL
one of Novem’s customers, which could expose the
as well as performance-based remuneration systems,
of assembly facilities where the Group’s products are
REPORT
Group to material claims for compensation.
there is a risk that any such individuals will leave the
needed for assembly.
3
Group, including as a result of collective bargaining on
In addition, the Group is exposed to the risk of lower
terms that may be considered below market standard
The labour market has also changed. It is becoming
order volumes from customers due to a disruption
by employees.
increasingly challenging to find the employees needed
GROUP
to their supply chain, which is unrelated to Novem’s
to fill vacancies.
MANAGEMENT
products. OEMs continue to be confronted with geopo-
The manufacture of many of the Group’s products
REPORT
litical turmoil, leading to lower production volumes and
requires significant technical skills and expertise. The
Increasing labour costs due to inflation in many coun-
4
temporary production suspensions for many OEMs,
success of the operations and growth strategy will
tries in which the Group operates, such as China, the
including some of Novem’s customers.
therefore also depend on attracting and retaining skilled
Czech Republic, Honduras, Mexico or Slovenia, may
and qualified personnel maintaining high quality stand-
erode the profit margins and compromise price com-
CONSOLIDATED
Rising prices in the supply chain could also be caused
ards globally. The labour markets for production staff in
petitiveness. Recent wage increases have increased
FINANCIAL
by the requirements of the German Supply Chain
some regions where Novem is active, such as the Czech
average wage expenses per employee. Although Novem
STATEMENTS
Act (LkSG).
Republic, Germany, Mexico or Slovenia, are character-
undertakes various incentive programs to improve the
5
ised by very low unemployment rates and strong historic
productivity of employees, as well as cost-effective
employment growth, resulting in intense competition for
automation initiatives designed to reduce labour costs,
Personnel risks and opportunities
qualified personnel and an increased turnover rate.
these measures may be insufficient to offset increases
ANNUAL
in personnel costs or the Group may be unable to man-
ACCOUNTS
Novem’s success depends on attracting and retaining
The business could be adversely impacted by strikes,
age these increases in the future effectively.
6
managing directors, executive officers, senior manage-
labour disputes and natural disasters.
ment, key employees and other skilled and unskilled
Personnel development and apprenticeship programs
personnel. The loss of key employees, including
Novem operates a large, global business with 4,887
are a specific chance to retain a high standard and
ADDITIONAL
management, directors, executives and other skilled
employees (excluding leased workers, interns and
knowledge within Novem’s workforce.
INFORMATION
NOVEM ANNUAL REPORT 2023/24
55
CONTENTS
The development of employees is a key issue. This is all
considered a necessity or premise for the acceptance of
quality requirements could negatively affect the market
about giving people the skills to pursue entrepreneurial
products by customers and markets. As such, Novem
acceptance of the Group’s other products and market
goals while simultaneously combining this with the spe-
must obtain and maintain the relevant certifications
reputation in various market segments.
cific development aspirations of individual needs. Along-
to be nominated as a supplier as well as for an ongo-
side the annual employee appraisal interviews, regular
ing business relationship. Maintaining such standards,
Environmental, health and safety risks
feedback talks and development discussions are held
which are regularly reviewed by customers, is essential
at Novem. As part of their discussions, supervisors and
to building long-term customer relationships.
1
their employees identify the necessary areas for action
Many of the sites at which Novem operates have been
and therefore create individually tailored programmes.
As a manufacturer, Novem is subject to product liability
used for industrial purposes for many years, leading
lawsuits and other proceedings alleging violations of
to contamination risks and resulting in site restoration
TO OUR
Novem believes that the responsibility for independ-
due care, violation of warranty obligations (implied
obligations. In addition, under federal and state environ-
SHAREHOLDERS
ent career development is with individual employees.
and expressed), treatment errors, safety provisions
mental laws and regulations (including state property
2
Supervisors and Human Resources see themselves
and claims arising from breaches of contract or fines
transfer laws), the Group could be held responsible
as facilitators by making instruments, training courses
imposed by government or regulatory authorities. Given
for the remediation of off-site areas impacted by its
and feedback talks available. These include, amongst
the large amounts of products manufactured and dis-
sites and operations, natural resource damages and/
NON-FINANCIAL
others, development meetings that enable Novem to
tributed to a variety of customers in the automotive
or third-party claims (e.g. for bodily injury or property
REPORT
identify employees’ career aspirations and agree on a
sector, Novem is from time to time faced with liability
damage). Regulatory authorities could assert claims
3
plan of action. Through continuous learning, the Group
claims related to actual or potentially deficient charges
against Novem as the current or former owner or ten-
prepares its employees for future challenges. Thinking
of products and may therefore be held liable in cases
ant (operator) of the affected sites or as the party that
ahead and strengthening the development of individu-
of death, bodily injury or damage to property caused
caused or contributed to the contamination, for the
GROUP
als is a key strategy for Novem to shape future talents.
by a defective product manufactured by the Group. The
investigation or remediation or containment of such
MANAGEMENT
risks arising from such warranty and product liability
soil or groundwater contamination or other environ-
REPORT
lawsuits, proceedings and other claims are insured up
mental media (e.g. surface waters), including related
4
Quality risks and opportunities
to levels the Group considers economically reasonable.
to Novem’s use of non-owned treatment, storage and
Still, the insurance coverage could prove insufficient in
disposal sites or order the Group to dispose of or treat
As a supplier of premium decorative interior trim prod-
individual cases.
contaminated soil excavated or water encountered
CONSOLIDATED
ucts, one of the determining factors for Novem’s cus-
in the course of construction. Novem could also be
FINANCIAL
tomers in purchasing components and systems is the
Furthermore, Novem manufactures many products
liable to the owners or occupants of sites leased, sites
STATEMENTS
high quality of products and manufacturing processes.
pursuant to customer specifications and quality
the Group sells or other impacted properties. Costs
5
A decrease in the actual or perceived quality of prod-
requirements. If the products manufactured and deliv-
typically incurred in connection with such claims are
ucts and processes could damage Novem’s image and
ered do not meet the requirements stipulated by the
generally difficult to predict. Also, if any contamination
reputation as well as those of the products. In addition,
customers at the agreed date of delivery, production
were to become a subject of public discussion, there
ANNUAL
defective products could result in loss of sales, loss
of the relevant products is generally discontinued until
is a risk that the reputation or relations with customers
ACCOUNTS
of customers and loss of market acceptance or could
the cause of the product defect has been identified
could be harmed.
6
damage the Group’s reputation and market perception.
and remedied. Furthermore, Novem’s customers could
potentially claim damages for breach of contract, even
Greenhouse gas emissions have increasingly become
At some locations, certain product certifications with
if the cause of the defect is remedied at a later point
the subject of substantial international, national,
ADDITIONAL
regard to specifications and quality standards are
in time. In addition, failure to perform with respect to
regional, state and local attention. Greenhouse gas
INFORMATION
NOVEM ANNUAL REPORT 2023/24
56
CONTENTS
emission laws and regulations have been promulgated
The nature of operations subjects Novem to various
The risk of computer viruses, cyber-attacks and security
in some of the jurisdictions in which Novem operates,
statutory and regulatory compliance and litigation risks
breaches is further increased as a growing number of
and additional greenhouse gas requirements are in vari-
under health, safety and employment laws. There can
employees work remotely. A significant or large‑scale
ous stages of development. In addition, the US Environ-
be no assurance that there will be no accidents or
malfunction or interruption of one or more IT systems
mental Protection Agency (EPA) has issued regulations
incidents suffered by employees, contractors or other
could adversely affect the ability to keep operations
limiting greenhouse gas emissions from mobile and
third parties on the Group’s sites. If any accidents or
running efficiently or at all and affect product availabil-
stationary sources pursuant to the US Clean Air Act.
incidents occur, Novem could be subject to prosecu-
ity. Furthermore, it is possible that a malfunction of
1
The final Carbon Pollution Standards for new, modified
tion and litigation, which could result in fines, penalties
data security measures or a cyber-attack could enable
and reconstructed power plants reflect the degree of
and other sanctions and could cause damage to the
unauthorised persons to access sensitive business or
emission limitation achievable through the application
reputation.
personal data, including information on the Group’s
TO OUR
of the best system of emission reduction that the EPA
intellectual property or business strategy or those of
SHAREHOLDERS
has determined has been adequately demonstrated for
The implementation and maintenance of management
customers. Such failure could cause economic loss
2
each type of unit. Novem’s customers may seek price
systems for environment, health and safety are required
for which Novem could be liable and may expose the
reductions to account for their increased costs result-
to fulfil legal and customer obligations. Ongoing audits
Group to governmental investigations, disciplinary
ing from greenhouse gas requirements.
from third parties must confirm the effectiveness of
actions and fines. A failure of the IT systems could
NON-FINANCIAL
these systems to validate these certificates and thus
also cause damage to Novem’s reputation, which could
REPORT
As one of the measures intended to meet national
be considered as a supplier.
harm the business.
3
climate targets, Germany expanded its national CO2
pricing and trading system to include emissions from
More and more partners request to collaborate closely
IT risks
burning fossil fuels by vehicles. The system entails
on online platforms. While this brings more efficiency
GROUP
mandatory emission certificates that must be acquired
to established processes, it also requires strict techni-
MANAGEMENT
by sellers of fossil fuels and the costs of which are
Novem relies heavily on centralised, standardised
cal and organisational policies to ensure the security
REPORT
expected to be passed on to end consumers, i.e. vehicle
information technology systems and networks to
of data and knowledge.
4
users. The initial price for an emission certificate has
support business processes as well as internal and
been set at €45 per ton of CO2 for 2024 and is expected
external communications. Any failure in the operation
to step up to approximately €55 to €65 per ton of CO2
of these IT systems could result in material adverse
CONSOLIDATED
in 2026. The new system has already resulted in higher
consequences, including disruption of operations, loss
FINANCIAL
fuel prices in Germany and is expected to have a further
of information or an unanticipated increase in costs.
STATEMENTS
impact in the future, which could in turn have a negative
In addition, from time to time, the Group is required to
5
effect on the demand for vehicles in Germany.
make investments to maintain and/or upgrade the IT
systems and networks and such investments may be
Growing pressure to reduce greenhouse gas emissions
significant.
ANNUAL
from mobile sources could reduce automobile sales,
ACCOUNTS
thereby reducing demand for products and ultimately
6
revenue.
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
57
CORPORATE GOVERNANCE STATEMENT
CONTENTS
The Company is a Luxembourg public limited liability
applied accordingly to a public limited liability company
The internal control systems and risk management
company (Société Anonyme) and as such is subject
(Société Anonyme) with a two-tier governance system
for the establishment of financial information are
to the corporate governance regime as set forth in
under Luxembourg Law.
described in the section Risk and opportunity man-
particular in the Companies’ Law.
agement. According to the Articles of Association, the
The Company’s Supervisory Board or its Audit and
Management Board must be composed of at least two
As the Company’s shares are listed on a regulated mar-
Risk Committee arranges for the Company’s external
members, whereas the Supervisory Board must be
ket, the Company is further subject to the provisions of
auditors to inform it and note in the Audit Report if,
composed of at least three. The Supervisory Board has
1
the Shareholders’ Rights Law.
during the performance of the audit, the external audi-
set up the following committees in accordance with
tors identify any facts that indicate an inaccuracy in
the Articles of Association: the Audit and Risk Com-
Being a Luxembourg public limited liability company,
adhering to the recommendations in C.10, D.3, D.9 or
mittee and the Nomination and Remuneration Com-
TO OUR
with its shares exclusively listed on a regulated market
D.11 of the GCGC, in each case applied accordingly to a
mittee. The Audit and Risk Committee is responsible
SHAREHOLDERS
in Germany, the Company is neither required to adhere
public limited liability company (Société Anonyme) with
for the consideration and evaluation of the auditing
2
to the Luxembourg corporate governance regime appli-
a two-tier governance system under Luxembourg Law.
and accounting policies and the Company’s financial
cable to companies admitted to the regulated market in
controls and systems. The Remuneration Committee is
Luxembourg nor to the German corporate governance
For the avoidance of doubt, the Company is subject
responsible for making recommendations to the Super-
NON-FINANCIAL
regime applying to stock corporations organised in
to Luxembourg Law with respect to the accounting
visory Board and the Management Board on the terms
REPORT
Germany.
principles relating to its financial statements and there-
of appointment and the benefits of the members of the
3
fore does not fall within the application of the German
Management Board of the Company. Further details
The Company has set up its own corporate governance
Commercial Code (Handelsgesetzbuch). As a result,
on the composition and purpose of these committees
structure in order to address its own specific needs
recommendation D.3 of the GCGC was followed by the
and the Supervisory Board are described in the sec-
GROUP
and interests and has, for such purpose, adopted and
Company to the extent possible.
tion Report of the Supervisory Board as well as in the
MANAGEMENT
chosen to abide by its own corporate governance rules,
section Setup and organisation of the Management
REPORT
as further described below, rather than to voluntarily
By virtue of European and Luxembourg Law, Novem
Board regarding the Management Board. The Annual
4
apply either of the Luxembourg or Germany govern-
Group is obliged to report on non‑financial and diversity
General Meeting shall be held at such time as speci-
ance regimes, and to set up its corporate governance
information relating to it. Novem’s Non‑financial Report
fied by the Management Board and/or the Supervisory
structure.
will be published together with this Annual Report, i.e.
Board in the convening notice.
CONSOLIDATED
on 27 June 2024. In accordance with Article 7bis of the
FINANCIAL
As the German corporate governance code (GCGC)
Shareholders’ Rights Law, the Company must further
The Management Board and Supervisory Board may
STATEMENTS
does not apply to the Company, it does not have to
draw up a Remuneration Policy for the Supervisory
convene extraordinary general meetings as often as
5
issue a declaration of conformity with the GCGC under
Board and the Management Board of Novem Group S.A.
the Company’s interests so require. An extraordinary
section 161 of the German Stock Corporation Act
reflecting the principles and measurement for the
general shareholders’ meeting must be convened upon
(Aktiengesetz).
remuneration of the members of such boards. The
the request of one or more shareholders who together
ANNUAL
Company must as well publish a Remuneration Report,
represent at least one-tenth of the Company’s share
ACCOUNTS
Solely for purposes of section 4.1.1.1 of the Guide to
which will be published separately from this Annual
capital.
6
the DAX Equity Indices of STOXX Ltd., the Company
Report on the Novem IR website on 19 July 2024. The
declares that it does not deviate from recommenda-
Remuneration Policy can already be accessed on the
Each share entitles the holder to one vote.
tions C.10, D.3, D.9 and D.11 of the GCGC, in each case
Novem IR website.
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
58
CONTENTS
The right of a shareholder to participate in a General
D) The Articles of Association of the Company do not
G) Powers of the Management Board:
Meeting and to exercise the voting rights attached to
contain any restrictions on voting rights.
their shares are determined with respect to the shares
•
The Company is managed by a Management
held by such shareholder on the 14th day before the
E) There are no agreements with shareholders which
Board under the supervision of the Supervisory
General Meeting.
are known to the Company and may result in restric-
Board.
tions on the transfer of securities or voting rights
•
The Management Board is vested with the
Each shareholder can exercise their voting rights in
within the meaning of the Transparency Directive.
broadest powers to perform or cause to be
1
person, through a proxy holder or in writing (if provided
performed any actions necessary or useful in
for in the relevant convening notice).
F) Rules governing the appointment and replacement
connection with the purpose of the Company.
of Management Board members and the amend-
•
All powers not expressly reserved by the Com-
TO OUR
The information required pursuant to Article 10.1 of
ment of the Articles of Association:
panies’ Law or by the Articles of Association to
SHAREHOLDERS
Directive 2004 / 25 / EC on takeover bids which has
the General Meeting or the Supervisory Board
2
been implemented by Article 11 of the Takeover Law is
•
The members of the Management Board are
fall within the authority of the Management
set forth here below under Disclosure Regarding Article
appointed by the Supervisory Board, or in the
Board.
11 of the Luxembourg Law on Takeovers of 19 May 2006.
case of a vacancy, by way of a decision adopted
•
Certain measures are subject to the prior
NON-FINANCIAL
by a majority of the remaining Management
approval of the Supervisory Board on the terms
REPORT
Board members for the period until the next
set out in the Articles of Association and the
Disclosures pursuant to Article 11 of the
3
Supervisory Board Meeting.
Rules of Procedure of the Management Board.
Luxembourg Law on Takeovers of 19 May
•
Management Board members are appointed for
•
The Management Board may appoint one or
2006
a term not exceeding six years and are eligible
several persons, including but not limited to
GROUP
for re-appointment.
members of the Management Board or share-
MANAGEMENT
•
Management Board members may be removed
holders, at the exclusion of any member of the
REPORT
A) For information regarding the structure of capital,
at any time with or without cause by the Super-
Supervisory Board, who shall have full authority
4
reference is made to section 3.8 of the Consoli-
visory Board by a simple majority of the votes.
to act on behalf of the Company in all matters
dated financial statements.
•
Resolutions to amend the Articles of Association
pertaining to the daily management and affairs
may be adopted in the manner foreseen by the
of the Company.
CONSOLIDATED
B) The Articles of Association of the Company do not
Companies’ Law, i.e. by a majority of two-thirds
•
The Management Board is also authorised to
FINANCIAL
contain any restrictions on the transfer of shares
of the votes validly cast, without counting the
appoint one or several persons, either members
STATEMENTS
of the Company.
abstentions, if the quorum of half of the share
of such board or not, at the exclusion of any
5
capital is met. If the quorum requirement of half
member of the Supervisory Board, for the pur-
C) According to the voting rights notifications received
of the share capital of the Company is not met
poses of performing specific functions at every
until 31 March 2024, the following shareholders
at the Annual General Meeting, the sharehold-
level within the Company.
ANNUAL
held more than 5% of total voting rights attached to
ers may be re-convened to a second General
•
The Management Board may also appoint com-
ACCOUNTS
Novem shares: COFRA Holding (indirect: 33,505,583
Meeting. No quorum requirements apply with
mittees to which it may delegate some of its
6
voting rights attached to shares or 77.87% of total
respect to such second General Meeting and
tasks and the members of which may, but do
voting rights).
the resolutions are adopted by a majority of
not have to be members of the Management
two-thirds of the votes validly cast, without
Board, at the exclusion of any member of the
ADDITIONAL
counting the abstentions.
Supervisory Board.
INFORMATION
NOVEM ANNUAL REPORT 2023/24
59
CONTENTS
•
The Management Board is authorised to issue
shares in the Company under the Articles of
Association, which set the authorised capital
of the Company, including the issued share
capital at €520,000, represented by 52,000,0000
shares. Such authorisation has been granted
for a period of five years beginning on 30 June
1
2021. During such period the Management
Board, with the consent of the Supervisory
Board, may issue new shares under the author-
TO OUR
ised share capital, limit or cancel any preferen-
SHAREHOLDERS
tial subscription rights.
2
•
The Articles of Association of the Company
allow for a redemption of shares within the
limits of the law, however, there is currently
NON-FINANCIAL
no buyback authorisation to the Management
REPORT
Board in place.
3
H) The Company is, given the nature of its business
and its field of activity, party to agreements which
GROUP
would take effect, alter or terminate upon a change
MANAGEMENT
of control of the company following a takeover bid,
REPORT
as is usual in the sector in which it operates.
4
I) There are no agreements between the Company
and its Management Board members or employ-
CONSOLIDATED
ees providing for compensation if they resign or
FINANCIAL
are made redundant without valid reason or if their
STATEMENTS
employment ceases because of a takeover bid.
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
60
SUBSEQUENT EVENTS
CONTENTS
There were no events or developments that could have
materially affected the measurement and presentation
of the Group’s assets and liabilities as of 31 March 2024
other than disclosed in note 5.15 of the Consolidated
financial statements.
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
61
OUTLOOK
CONTENTS
Albeit to different degrees, challenges such as inflation
-
ary forces, supply chain disruptions and geopolitical
tensions persisted during the financial year 2023/24,
influencing economic dynamics worldwide. As a result,
elevated input costs hindered overall economic growth.
As a key industry in Germany, the automotive sector
1
struggles with the transition to electric vehicles and
softening demand. In line with this development, recent
market data suggests only slight growth in light vehi-
TO OUR
cle production for 2024/25, taking the aforementioned
SHAREHOLDERS
stress factors into account. By streamlining the produc-
2
tion footprint and implementing further cost-cutting
measures, Novem is adapting to the current market
environment and remains vigilant in closely monitoring
NON-FINANCIAL
further developments.
REPORT
3
In the face of ongoing global uncertainties, offering
a reliable outlook is not feasible. Short-term market
conditions will remain difficult and therefore continue
GROUP
to put pressure on the Group’s performance. However,
MANAGEMENT
Novem confirms its mid‑term guidance on the back of
REPORT
a solid order intake during the financial year 2023/24.
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
62
Ash open pore
4
financial statements
Consolidated
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the financial year ended 31 March 2024
CONTENTS
in € thousand
Note
FY 2022/23
FY 2023/24
Revenue
4.1
Decrease in finished goods and work in process
-7,491
-15,416
Total operating performance
Other operating income
4.2
Cost of materials
4.3
-354,689
-303,282
1
Personnel expenses
4.4
-168,645
-173,246
Depreciation, amortisation and impairment
4.5
-32,467
-33,660
TO OUR
Other operating expenses
4.6
-82,377
-69,480
SHAREHOLDERS
Operating result (EBIT)
2
Finance income
4.7
Finance costs
4.7
-13,087
-19,947
NON-FINANCIAL
Financial result
-9,532
-12,571
REPORT
Income taxes
4.8
-15,728
-13,053
3
Deferred taxes
4.8
-5,209
Income tax result
-20,937
-11,975
GROUP
Profit for the period attributable to the shareholders
MANAGEMENT
REPORT
Differences from currency translation
3.8
-1,562
4
Items that may subsequently be reclassified to consolidated profit or loss
-1,562
Actuarial gains and losses from pensions and similar obligations (before taxes)
3.9
-1,576
CONSOLIDATED
Taxes on actuarial gains and losses from pensions and similar obligations
-2,229
FINANCIAL
STATEMENTS
Items that will not subsequently be reclassified to consolidated profit or loss
-1,103
5
Other comprehensive income/loss, net of tax
-2,665
Total comprehensive income/loss for the period attributable to the shareholders
ANNUAL
Earnings per share attributable to the equity holders of the parent (in €)
ACCOUNTS
basic
4.9
6
diluted
4.9
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
64
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as of 31 March 2024
CONTENTS
Assets
Equity and liabilities
in € thousand
Note
31 Mar 23
31 Mar 24
in € thousand
Note
31 Mar 23
31 Mar 24
Intangible assets
3.1
Share capital
3.8
Property, plant and equipment
3.2
Capital reserves
3.8
1
Trade receivables
3.4
Retained earnings/accumulated losses
3.8
-443,414
-459,222
Other non-current assets
3.7
Currency translation reserve
3.8
Deferred tax assets
4.8
Total equity
TO OUR
SHAREHOLDERS
Total non-current assets
Pensions and similiar obligations
3.9
2
Inventories
3.3
Other provisions
3.11
Trade receivables
3.4
Financial liabilities
3.12
Other receivables
3.5
Trade payables
3.15
NON-FINANCIAL
REPORT
Other current assets
3.7
3.13
Other liabilities
3.14
Cash and cash equivalents
3.6
3
3.16
Total current assets
Deferred tax liabilities
4.8
Assets
Total non-current liabilities
GROUP
MANAGEMENT
Tax liabilities
3.10
REPORT
Other provisions
3.11
4
Financial liabilities
3.12
Trade payables
3.15
3.13
CONSOLIDATED
FINANCIAL
Other liabilities
3.14
STATEMENTS
3.16
5
Total current liabilities
Equity and liabilities
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
65
CONSOLIDATED STATEMENT OF CASH FLOWS
for the financial year ended 31 March 2024
CONTENTS
in € thousand
Note
FY 2022/23
FY 2023/24
in € thousand
Note
FY 2022/23
FY 2023/24
Profit for the period
Cash paid (-) for subsidies/grants
-4
-4
Income tax expense (+)/income (-)
4.8
3.13
Cash paid (-) for lease liabilities
5.6
-9,797
-11,370
Financial result (+)/(-) net
4.7
5.10
Depreciation, amortisation and impairment (+)
4.5
Interest paid (-)
4.7
-8,533
-16,898
Other non-cash expenses (+)/income (-)
-9,134
3.8
1
Dividends paid (-)
-17,212
-49,485
5.6
Increase (-)/decrease (+) in inventories
3.3
Cash flow from financing activities
-35,546
-77,757
3.4
Increase (-)/decrease (+) in trade receivables
-9,438
5.2
TO OUR
Net increase (+)/decrease (-) in cash and cash
-23,999
SHAREHOLDERS
equivalents
Increase (-)/decrease (+) in other assets
3.7
-3,184
2
Effect of exchange rate fluctuations on cash and
Increase (-)/decrease (+) in deferred taxes
4.8
-1,072
-493
cash equivalents
Increase (-)/decrease (+) in prepaid expenses/
3.16
-2,019
Cash and cash equivalents at the beginning of
deferred income
3.6
the reporting period
NON-FINANCIAL
Increase (+)/decrease (-) in provisions
3.11
-18,419
REPORT
Cash and cash equivalents at the end of the
3.6
Increase (+)/decrease (-) in trade payables
3.15
-10,048
-14,147
reporting period
3
3.13
Increase (+)/decrease (-) in other liabilities
-7,962
3.14
Gain (-)/loss (+) on disposals of non-current
GROUP
assets
MANAGEMENT
REPORT
Cash received (+) from/cash paid (-) for
5.6
-8,721
-24,488
income taxes
4
Cash flow from operating activities
Cash received (+) from disposals of property,
plant and equipment
CONSOLIDATED
FINANCIAL
Cash paid (-) for investments in intangible
STATEMENTS
3.1
-288
-1,200
assets
5
Cash paid (-) for investments in property, plant
3.2
-17,646
-14,887
and equipment
Interest received (+)
4.7
ANNUAL
Cash flow from investing activities
-13,779
-10,015
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
66
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the financial year ended 31 March 2024
CONTENTS
Other retained
earnings/
Currency
Capital
accumulated
translation
in € thousand
Note
Share capital
reserves
losses
reserve
Equity
Balance as of 01 Apr 22
-482,826
Profit or loss for the year
3.8
1
Other comprehensive income or loss
3.9
4.8
Comprehensive income or loss for the year
TO OUR
Other capital-related transactions
-36
-36
SHAREHOLDERS
3.8
2
Dividends
-17,212
-17,212
5.6
Reclassifications
Balance as of 31 Mar 23
-443,414
NON-FINANCIAL
REPORT
Balance as of 01 Apr 23
-443,414
3
Profit or loss for the year
3.8
Other comprehensive income or loss
3.9
-1,103
-1,562
-2,665
GROUP
4.8
MANAGEMENT
REPORT
Comprehensive income or loss for the year
-1,562
4
3.8
Dividends
-49,485
-49,485
5.6
Balance as of 31 Mar 24
-459,222
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
67
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1
General information
1.1 Reporting entity
On 30 June 2021, the extraordinary General Share- holders’ Meeting converted the Company’s corporate form from a private limited liability company (Société à responsabilité limitée) to a public limited liability com- pany (
Société Anonyme
). As a consequence, the shares (parts sociales) were also converted and became actions with no nominal value. The Company’s corpo- rate name was amended to Novem Group S.A.
Novem Group S.A. (hereinafter also referred to as the “Company”) is domiciled in
Contern
, Luxembourg, and is registered in the commercial register of Luxembourg under register file number B 162.537. The Company’s registered office is at
19, rue Edmond Reuter, 5326
Contern , Luxembourg.
The Group’s principal place of
business is Vorbach, Germany
.
The Company’s financial year is from 1 April to 31 March of the following year (12-month period). The consoli- dated financial statements include Novem Group S.A. and its subsidiaries (hereinafter also referred to as “Novem” or the “Group”).
Novem operates as a developer, supplier and system supplier for trim parts and decorative functional ele- ments in vehicle interiors in the premium sector. The products combine valuable raw materials with the lat- est technology and processing. Typically, the products are used as instrument panels, impact-resistant trim parts in the centre console, door trims, beltlines and decorative functional elements in the car interior.
The consolidated financial statements were authorised for issue by the Management Board on 17 June 2024.
Under Luxembourg Law, the consolidated financial statements are approved by the shareholders at their Annual General Meeting.
The official version of the accounts is the ESEF ver- sion available with the Officially Appointed Mechanism (OAM) tool.
1.2 Basis of preparation and presentation
method
These consolidated financial statements have been prepared on the basis of historical costs. This excludes derivative financial instruments and trade receivables that are sold under factoring agreements. These are measured at fair value through profit or loss.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transac- tion between market participants at the measurement date. The fair value can either be directly observable or otherwise be estimated using a valuation technique. When measuring fair value using a valuation technique, it has to be categorised into one of the following levels
depending on the available observable parameters and the significance of these parameters for measurement as a whole:
•
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
•
Level 2 inputs are inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, or can be derived indirectly from other prices.
•
Level 3 inputs are unobservable inputs for the asset or liability.
The Group recognises reclassifications between differ- ent levels at the end of the reporting period in which the change occurred.
The Group classifies assets and liabilities as current if they are expected to be realised or settled within 12 months after the reporting date. If assets and liabilities have both a current and non-current component, they are broken down into their maturity components and reported as current and non-current assets or liabilities in accordance with their accounting classification.
These consolidated financial statements are presented in Euro, the Company’s functional currency. All amounts are rounded to the nearest thousand Euro unless other- wise indicated. Totals in tables were calculated on the basis of exact figures and rounded to the nearest thou- sand Euro. For computational reasons, there may be rounding differences to the exact mathematical values in tables and references (monetary units, percentages, etc.). The Group has consistently applied the account- ing and consolidation policies to all periods presented
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
68
in these consolidated financial statements. The con- solidated statement of comprehensive income has been prepared using the nature of the expense method.
The consolidated financial statements as of 31 March 2024 have been prepared in accordance with the Inter- national Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), as adopted by the European Union (EU). The term IFRS includes all applicable International Account- ing Standards (IAS) as well as all interpretations and amendments by the International Financial Reporting Standards Interpretations Committee (IFRS IC) – for- merly the International Financial Reporting Interpreta- tions Committee (IFRIC).
Novem Group S.A. has prepared the consolidated financial statements as of 31 March 2024 on a going concern basis. From the current perspective, there are no risks to the continued existence of the Company. In its assessment, management considered the profit for the last years as well as the strong cash positions. The management also considered the positive cash in‑flow from operating activities. Reference is also made to section 3.6 and section 3.8.
1.3 Effects of new financial reporting
standards
The IASB has issued or revised a number of reporting standards and interpretations that will not become effective until a future date. These new standards and interpretations will not be applied by the Group before they become effective in the EU.
The following table shows the new or amended stand- ards, including their effects expected from first‑time adoption. If the Group does not expect any effects on the consolidated financial statements from first‑time adoption, this is due to the fact that the transactions, other events or conditions affected by the new IFRSs do not currently exist within the Group.
| Potential impact on the | ||
| Effective date | New standards or amendments | consolidatedfinancial |
| statements | ||
| Annual periods beginning on | Amendments to IAS 1: Classification of Liabilities as Current or | Negligible |
| or after 1 January 2024 | Non-current (with Covenants) | |
| Annual periods beginning on | Amendments to IFRS 16: Clarification how a seller‑lessee | Negligible |
| or after 1 January 2024 | subsequently measures sale and leaseback transactions | |
| Annual periods beginning on | Amendment to IAS 7 and IFRS 7: Supplier finance | Negligible |
| or after 1 January 2024 | arrangements | |
| Annual periods beginning on | Amendments to IAS 21: The Effects of Changes in Foreign | Negligible |
| or after 1 January 20251 | Exchange Rates: Lack of Exchangeability | |
| Annual periods beginning on | IFRS 18 Presentation and Disclosure in Financial Statements: | In review |
| or after 1 January 20271 | Replacement of IAS 1 | |
| Annual periods beginning on | IFRS 19 Subsidiaries without Public Accountability: | Negligible |
| or after 1 January 20271 | Disclosures | |
| Deferred indefinitely | Amendments to IFRS 10 and IAS 28: Sale or Contribution of | Negligible |
| Assets between an Investor and its Associate or Joint Venture |
1
EU endorsement still pending
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
69
The Group observed all standards and interpretations adopted by the International Accounting Standards Board (IASB) and the EU that are mandatory as of 1 January 2023. The following table shows the new or amended standards effective in 2023. Applying the new standards has not significantly impacted these financial statements.
| Impact on the | ||
| Effective date | New standards or amendments | consolidatedfinancial |
| statements | ||
| Annual periods beginning on | Amendments to IAS 8: Changes in Accounting Estimates and | Negligible |
| or after 1 January 2023 | Errors: Definition of Accounting Estimates | |
| Annual periods beginning on | Amendments to IAS 1 and IFRS Practice Statement 2: | Refer to description |
| or after 1 January 2023 | Disclosure of Accounting Policies | below |
| Annual periods beginning on | IFRS 17 Insurance Contracts: Replacement of IFRS 4 and | No impact |
| or after 1 January 2023 | Amendments to IFRS 17 | |
| Annual periods beginning on | Amendments to IAS 12 Income Taxes: Deferred Tax related to | Negligible |
| or after 1 January 2023 | Assets and Liabilities arising from Single Transaction | |
| Annual periods beginning on | Amendment to IAS 12 Income Taxes: Pillar 2 model rules | No impact |
| or after 1 January 2023 |
The Group adopted Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) from 1 January 2023. Although the amendments did not result in any changes to the accounting policies themselves, they had an impact on the accounting pol- icy information disclosed in the financial statements.
The amendments require the disclosure of mate- rial instead of significant accounting policies. The
amendments also provide guidance on the application of materiality in the disclosure of accounting policies, assisting entities to provide useful, entity‑specific accounting policy information that users need to understand other information in the financial state- ments. Management reviewed the accounting policies and updated the information disclosed in Material accounting policies (PY: Accounting policies) in line with the amendments.
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
70
1.4 Consolidated entities and basis of
consolidation
Consolidated entities
In addition to Novem Group S.A., the consolidated financial statements include all subsidiaries that can be controlled by the Group. According to IFRS 10, a company controls an entity when it has the power over the entity, is exposed or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
The consolidated financial statements include Novem Group S.A. as well as 13 international subsidiaries.
1
Entities included in the consolidated financial statements according to IFRS that have exercised the exemption clauses under §264 (3) HGB.
2
Plant closed as of December 2023. The entity continues to operate as a buy-sell distributor.
| Registered office | Ownership interest in % | |
| Novem Group GmbH | Vorbach, Germany | 100 |
| Novem Beteiligungs GmbH1 | Vorbach, Germany | 100 |
| Novem Car Interior Design GmbH1 | Vorbach, Germany | 100 |
| Novem Car Interior Design Metalltechnologie GmbH1 | Vorbach, Germany | 100 |
| Novem Car Interior Design Vorbach GmbH1 | Vorbach, Germany | 100 |
| Novem Deutschland GmbH | Vorbach, Germany | 100 |
| Novem Car Interiors (China) Co., Ltd. | Langfang, China | 100 |
| Novem Car Interior Design k.s. | Pilsen, Czech Republic | 100 |
| Novem Car Interior Design S.de R.L. | Tegucigalpa, Honduras | 100 |
| Novem Car Interior Design S.p.A.2 | Bergamo, Italy | 100 |
| Novem Car Interior Design S.A. de C.V. | Querétaro, Mexico | 100 |
| Novem Car Interior Design d.o.o. | Žalec, Slovenia | 100 |
| Novem Car Interior Design Inc. | Detroit, USA | 100 |
Basis of consolidation
Subsidiaries are entities controlled by Novem Group S.A., Luxembourg. A company controls an investee when it is exposed to, or has rights to, variable returns from its involvement with the investee and the ability to use its power over the investee to affect the amount of the Company’s returns.
In assessing control, all facts and circumstances are considered. This particularly includes the purpose and structure of the investee. For example, changes to decision-making rights can mean that the relevant activities are no longer directed through voting rights, but instead, other agreements, such as contracts, give another party or parties the current ability to direct the relevant activities. The assessment of control requires the consideration of all facts and circumstances at the discretion of management.
If necessary, the financial statements of group enti- ties are adapted to the accounting policies of Novem Group S.A. The financial statements of the group enti- ties Novem Car Interiors (China) Co., Ltd., China, and Novem Car Interior Design S.A. de C.V., Mexico, whose reporting date is 31 December, are adapted to the par- ent company’s reporting date. The deviating reporting dates compared to the parent company result from the respective national legislation.
1.5 Foreign currency translation
The consolidated financial statements are prepared in accordance with the functional currency concept. The consolidated financial statements are presented in Euros, the parent company’s functional currency.
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
71
Transactions in foreign currencies are translated into Euros at the exchange rate applicable on the transac- tion date. In subsequent reporting periods, monetary assets and liabilities denominated in foreign currency are translated at the closing rate. Any resulting gains and losses are recognised in the consolidated state- ment of comprehensive income. Non-monetary assets and liabilities are translated into Euros at the exchange rate applicable on the transaction date.
Assets and liabilities of foreign subsidiaries whose functional currency is not the Euro are translated into Euros at the closing rate on each reporting date. Equity items are translated at historical exchange rates. The income statements and statements of cash flows are translated into Euros at the applicable average exchange rates for the period. The resulting foreign currency translation differences are presented in the translation currency reserve in accumulated other com- prehensive income.
The Group used the following major exchange rates for currency translation:
| Currency | Closing rate | Average rate | ||
| EUR 1 equals | 31 Mar 23 | 31 Mar 24 | 2022/23 | 2023/24 |
| CNY | 0.13343 | 0.13027 | 0.13958 | 0.12948 |
| CZK | 0.04266 | 0.03952 | 0.04118 | 0.04118 |
| HNL | 0.03728 | 0.03719 | 0.03895 | 0.03737 |
| MXN | 0.05099 | 0.05591 | 0.04892 | 0.05329 |
| USD | 0.91954 | 0.92498 | 0.95743 | 0.92237 |
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
72
2
Material accounting policies
2.1 Use of judgments and estimates
In preparing the financial statements in accordance with IFRS, management has made judgments and estimates that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.
Due to unforeseeable developments beyond the con- trol of management, the actual figures may differ from these estimates. Estimates and underlying assump- tions are reviewed on an ongoing basis. Revisions to estimates are recognised in accordance with IAS 8 in the period in which they occur and in each subsequent period affected by the revisions.
The most important forward-looking assumptions and other major sources of estimation uncertainty on the reporting date that have a significant risk of result- ing in a material adjustment to the carrying amounts of assets and liabilities in the next financial year are explained below.
Measuring the fair value of financial instruments
If the fair values of financial assets and financial liabili- ties cannot be measured using quoted prices in active markets, they are determined by applying valuation techniques including the discounted cash flow method. The inputs used in the model are based – to the extent possible – on observable market data. If such data is unavailable, fair value is determined to a considerable extent based on judgment. Judgments concern inputs such as liquidity risk, credit risk and volatility. Changes in the assumptions for these inputs may affect the
recognised fair values of financial instruments. Please refer to section 5.2 for an overview of the financial instruments measured at fair value.
Impairment of non-financial assets
At the end of each reporting period, management assesses whether there is any objective evidence that assets are impaired. Any intangible assets not yet available for use as of the reporting date in the form of capitalised development costs are also tested for impairment annually. Further tests are conducted when there is objective evidence of impairment. Other non- financial assets or cash‑generating units are tested for impairment when there is evidence that the carrying amount is not recoverable. The recoverable amount of an asset or a cash-generating unit is the higher of fair value less costs to sell and value in use. The measure- ment of fair value less costs to sell is based on avail- able data from binding sales transactions between independent business partners for similar assets or observable market prices less costs directly attribut- able to the sale of the asset. The discounted cash flow method is used to measure value in use. Cash flows are derived from the budget for the next five years, which does not include restructuring measures to which the Group has not yet committed and material future invest- ments that will increase the profitability of the tested cash-generating unit. The recoverable amount depends on the discount rate used in the discounted cash flow method as well as the expected future cash in‑flows and the growth rate used for extrapolation purposes.
Capitalisation of development costs
When capitalising development costs, management’s estimates regarding the technical and economic fea- sibility of the development projects are considered
in the recognition decision. This is usually the case when an internal development project has reached a specific milestone in the existing project management model. Measurement of the capitalised development costs depends on assumptions regarding the amount and period of expected future cash flows as well as discount rates to be applied. For more details, please see section 3.1.
Net realisable value of inventories
Inventories are stated at the lower of cost and net real- isable value. The measurement of net realisable value requires assumptions by management, particularly on the development of sales prices and costs still to be incurred until sale. Please refer to section 3.3 for further details.
Loss allowances on receivables
Estimates regarding the amount and necessary scope of loss allowances on receivables sometimes require subjective assessments with regard to the creditwor- thiness of customers. These are therefore subject to the inherent uncertainty of judgment. Please refer to section 3.4 and section 5.4 for further details.
Deferred tax assets on tax loss carryforwards
Deferred tax assets are recognised for tax loss car- ryforwards to the extent that it is considered likely that the related tax benefits will be realised through future taxable profits based on management’s profit forecasts for the group entities. The determination of deferred tax assets requires significant judgment by management with regard to the expected occurrence and amount of future taxable income as well as future tax. Please refer to section 4.8 for further details.
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
73
Provisions
Significant estimates are required in the determination of provisions related to pensions and other obligations, contract losses, warranty costs and legal proceedings. Please refer to section 3.9 and section 3.11 for further details.
Determination of the term of leases with extension/ termination options
The Group determines the term of its leases based on the non-cancellable period of the lease as well as the periods arising from the option to extend the lease, provided it is reasonably certain that it will exercise this option, or the periods arising from the option to terminate the lease, provided it is reasonably certain that it will not exercise this option. The Group has concluded several leases that include extension and/ or termination options. It exercises judgment in deter- mining whether it is reasonably certain that the option to extend or terminate the lease will or will not be exer- cised. That is, it considers all relevant criteria that cre- ate an economic incentive for it to exercise either the extension or termination option. After the commence- ment date, the Group re-determines the lease term if there is a significant event or change in circumstances that is within its control and has an effect on whether or not it will exercise the option to extend or terminate the lease (e.g. major leasehold improvements or material adjustment of the underlying asset).
Please refer to section 5.10 for details on potential future lease payments for periods after the date of exercising the extension and termination options that are not taken into account in the lease term.
Revenue recognition
For the purpose of revenue recognition, it is necessary to identify all distinct performance obligations within a contract with a customer. The assessment of whether a performance obligation is distinct requires judgments by management.
Moreover, determining and allocating the transaction price to distinct performance obligations of a contract requires assumptions and estimates by manage- ment. This particularly concerns scenarios in which a stand-alone selling price for a good or service is not directly observable and must therefore be estimated or cases in which the transaction price includes variable components. In addition, management must assess whether there is participation in the development costs of automobile manufacturers in exchange for goods or services transferred by customers to the Group, which is customary in the automotive industry. Should this not be the case, estimates of the future contract volume under the contracts with customers involving such participation are necessary.
Furthermore, determining whether a performance obligation is satisfied at a point in time or over time also requires management judgment. This particularly concerns the assessment of whether the criteria for recognition of revenue over time are satisfied in the individual case.
Climate change
Increasing expectations from stakeholders require explaining how climate-related matters are considered in preparing the financial statements to the extent they are material. Climate change and potential future devel- opments on the entity, including the sustainability of its
Underlying, the Group actively contributes to reducing the footprint of CO2-neutral production by improving manufacturing processes with modern and efficient technology. Sustainability is also reflected in product innovations and concepts, which may potentially even create a competitive advantage for acquiring new projects.
Geopolitical and macroeconomic environment
The increasingly complex and uncertain macroeco- nomic and geopolitical environment, particularly due to the Ukraine war and the conflict in Israel‑Gaza/Mid- dle East, requires continuous and close observation by
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
74
the management. The ongoing attacks by Houthis on numerous commercial ships using the Red Sea route compelled container shipping companies to use alter- native routes. The alternative route around the Cape of Good Hope extended the sea voyage duration and increased costs due to higher bunker consumption, additional port and terminal fees as well as higher labour costs.
Thus, the Group faced high inflation, increased interest rates and volatile foreign currencies as well as ris- ing concerns about a slowdown in economic growth across significant markets compared to prior years.
Those trends could impact fair values and carrying amounts of assets and liabilities, amount and timing of results of operations and cash flows of Novem. Estimates and assumptions are generally based on existing knowledge and best information available.
The management has regularly reviewed the implica- tions of the changing geopolitical and macro-economic conditions and has not identified a going concern or significant issue, beyond the general scope of impact, on the performance and financial position of the Group as of today. Management continues to monitor the cur- rent developments and their potential impact on the Group.
2.2 Intangible assets
Purchased intangible assets
Intangible assets acquired for valuable consideration are recognised at cost. If they have a finite useful life, these intangible assets are amortised on a straight-line basis over these useful lives. After initial recognition,
intangible assets are recognised at cost less accumu- lated amortisation and any accumulated impairment losses. Amortisation and impairment losses are rec- ognised in profit or loss.
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset it relates to. All other expenses are recognised as expenses in the period in which they are incurred.
The useful lives of software and licenses are estimated at two to five years.
Amortisation methods and useful lives are reviewed at each reporting date and adjusted as necessary.
Internally generated intangible assets
In order to continuously assess the need to capitalise development expenditure, ongoing development pro- jects are monitored at a central level and broken down into multi‑stage project phases. If the requirements according to IAS 38 are fulfilled from a particular pro- ject phase, the associated expenditure is capitalised as internally generated intangible assets. Otherwise, the expenses for research and non-capitalised development services are recognised in profit or loss as incurred.
Capitalised development expenditure is amortised on a straight-line basis over its useful life of three to seven years. The useful life is determined on the basis of the estimated use of the technologies in line with technical progress or on the basis of the specific application of the development on current platforms. Amortisation methods and useful lives are reviewed at each report- ing date and adjusted as necessary.
Intangible assets from development projects not yet available for use are tested for impairment annually.
2.3 Property, plant and equipment
Property, plant and equipment, except from right‑of‑use assets under leases (IFRS 16), are measured at cost less any accumulated depreciation and any accumu- lated impairment losses.
To the extent relevant, cost includes the estimated costs of site dismantlement, removal and restoration of the asset.
Depreciation is calculated to write off the cost of items of property, plant and equipment less their estimated residual values using the straight-line method over their useful lives and is generally recognised in profit or loss. Land is not depreciated.
The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:
| Useful lives of property, plant and equipment | |
| Buildings | 10 to 33 years |
| Furniture and fixtures, office equipment | 3 to 13 years |
| IT equipment | 4 years |
| Leasehold improvements | 10 years |
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
75
The residual values, useful lives and depreciation meth- ods of assets are reviewed at the end of each financial year and adjusted as necessary.
2.4 Impairment of assets
Non-financial assets
According to IAS 36, non‑financial assets with finite useful lives are assessed at the end of each reporting period to determine whether there is any indication that an asset may be impaired, e.g. particular events or market developments indicating a possible impair- ment. The carrying amounts of intangible assets with indefinite useful lives as well as intangible assets not yet available for use are tested for impairment at the end of each reporting period.
For impairment testing, assets that cannot be individu- ally assessed are grouped into the smallest identifiable group of assets generating cash in‑flows through continuing use, which are largely independent of the cash in‑flows from other assets or groups of assets (cash-generating units).
Within the Group, the smallest identifiable group of assets is usually at the level of individual entities.
If any such indication exists, or in cases where annual impairment testing is required, the recoverable amount of the asset is estimated. If the recoverable amount of an asset or corresponding cash-generating unit is less than its carrying amount, an impairment loss is recognised. The resulting difference between the car- rying amount and recoverable amount is recognised as an expense in profit or loss.
Measuring recoverable amount
The recoverable amount of an asset or a cash-generat- ing unit is the higher of its fair value less costs to sell and its value in use. Value in use is measured by dis- counting the estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. The discount rate is a pre‑tax rate that reflects current market assessments of the time value of money and the risks specific to the asset.
For assets to which cash flows cannot be directly allo- cated, the recoverable amount of the cash-generating unit to which the asset belongs is determined.
Financial assets
The Group mainly recognises allowances for expected credit losses for:
•
trade receivables measured at amortised cost
•
contract assets
Loss allowances for trade receivables and contract assets are always measured at an amount equal to life- time expected credit losses (ECL). Lifetime expected credit losses are ECL that result from all possible default events over the expected life of a financial instrument. The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.
To assess whether the credit risk of a financial asset since initial recognition has significantly increased and to evaluate expected credit losses, the Group consid- ers reasonable and supportable information which is relevant and available without undue cost or effort. This
covers both quantitative and qualitative information and analysis which is based on past experience of the Group and in-depth assessments, including forward- looking information.
The Group assumes that the credit risk on a financial asset has increased significantly when it is more than 30 days past due.
The Group considers a financial asset in default when it is unlikely that the borrower will be able to repay its loan commitment to the Group in full, without the Group having to resort to measures such as sale of collateral (should it exist).
Measurement of expected credit losses
Expected credit losses are defined as the weighted average of credit losses with the respective risks of a default occurring as the weights. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between all contractual cash flows that are due to an entity in accordance with the contract and all cash flows that the entity expects to receive).
Expected credit losses are measured within the Group based on a classification of trade receivables and assets by customer, refer to section 5.4 for further details.
Presentation of impairment for expected credit losses in the statements of financial position and consolidated statement of comprehensive income
Impairment losses on trade receivables measured at amortised cost and on financial assets are deducted from the gross carrying amount of the assets.
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
76
The expected credit losses are presented in other operating expenses of the Consolidated statement of comprehensive income.
Impairment
The gross carrying amount of a financial asset is fully or partially impaired if – according to an appropriate assessment – the Group does not assume that the financial asset can be partly or wholly recovered. In this regard, the Group makes an individual assessment as to the point in time and amount of the impairment.
2.5 Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease.
For all classes of assets in the context of leases, the Group has decided – pursuant to IFRS 16.15 – not to separate non-lease components and instead to recog- nise lease and non-lease components as a single lease component.
At the commencement date, the Group recognises a right-of-use asset and a lease liability. The right-of-use asset is initially measured at cost commensurate with the initial measurement of the lease liability, adjusted by the payments made on or before the commencement date plus any initial direct costs and estimated costs for the dismantling or removal of the underlying assets or the restoration of the underlying assets or site where the asset is located, less any received lease incentives.
The right‑of‑use asset is subsequently depreciated using the straight-line method from the commence- ment date to the end of the lease term unless the
lease transfers ownership of the underlying asset to the Group at the end of the lease term or the cost of the right‑of‑use asset reflects that the Group will exercise a purchase option. In that case, the right-of-use asset is depreciated over the useful life of the underlying asset, which is determined in line with the requirements for property, plant and equipment. In addition, the right‑of‑ use asset is continually tested for impairment where necessary and adjusted by specified remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be read- ily determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
To determine its incremental borrowing rate, the Group obtains interest rates from a bank and makes corre- sponding adjustments to account for the lease condi- tions and type of asset.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments resulting from a change in an index or (interest) rate, when there is a change in the Group’s estimate of the amounts expected to be payable under a residual value guar- antee, when the Group changes its assessment of whether it will exercise a purchase, renewal or termi- nation option or when there is a revised in-substance fixed lease payment.
The Group presents right-of-use assets for leases in property, plant and equipment and lease liabilities in other financial liabilities.
Furthermore, the Group has decided not to report right-of-use assets and lease liabilities for leases based on low-value assets as well as for short-term leases pursuant to IFRS 16.6. The Group recognises the lease payments associated with these leases in the Consolidated statement of comprehensive income as other operating expenses on a straight-line basis over the term of the lease.
2.6 Inventories
Inventories are stated at the lower of cost and net realisable value.
Cost is determined using the moving average cost method.
Inventories also include tools at Novem as the benefi- cial ownership of tools does not usually lie with Novem. The tools must be presented as inventories under cur- rent assets until they are transferred to the OEM. In accordance with IAS 2.10, the cost of inventories shall comprise all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.
2.7 Other assets
One-off participations in the development costs of auto- mobile manufacturers are recognised as assets by the Group. The exclusive position occupied vis-à-vis busi- ness partners means that these payments are recouped through future serial business and the resulting revenue. Based on these contract conditions, payments are rec- ognised continually as reducing revenue from the start of serial production and the asset is correspondingly
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
77
written down. The write-down is recognised in this regard as the ratio of goods already supplied to the expected total amount of goods to be provided.
Furthermore, contract assets are created through the production of customised serial parts, as there is no alternative use for these serial parts. In this regard, a legal claim exists for payment of the work rendered thus far should the customer terminate the contract. Consequently, control over these goods (pursuant to IFRS 15) is transferred over time, which is also why the corresponding revenue is to be recognised over time. If the Group has not yet received consideration in this regard for the transferred goods and at the same time there is no unconditional right to payment, the corre- sponding contract assets are recognised.
2.8 Cash and cash equivalents
Cash and cash equivalents mainly include cash and other highly‑liquid financial investments with a term of not more than three months. Petty cash and cash in banks are stated at nominal value.
2.9 Financial instruments
Definition of initial recognition
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument in another entity. Financial instru- ments are recognised as soon as the Group becomes a party to the financial instrument contract. A financial asset (unless it is a trade receivable without a sig- nificant financing component) or financial liability is initially measured at fair value. In the case of an item
not measured at fair value through profit or loss, trans- action costs are added that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price. Subsequently, financial assets and liabilities are measured according to the category to which they are assigned to.
Financial assets
All purchases and sales of financial assets are recog- nised as of the trading day, i.e. on that date upon which the Group is obliged to acquire the assets. Financial assets with a remaining maturity of more than one year are classified as non‑current.
All financial assets not classified as measured at amor- tised cost (FAAC) or financial assets measured at fair value through other comprehensive income (FAFVOCI) based on their contractual cash flow characteristics and the business model they are held in are classified as financial assets measured at fair value through profit and loss (FAFVTPL). This includes all derivative finan- cial assets and trade receivables sold in the context of factoring agreements.
The following is applicable for the subsequent meas- urement of financial assets and the associated gains and losses:
Financial assets at amortised cost are measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses as well as impairment losses are recognised as other operating expenses or income. A gain or loss from derecognition is recognised in profit or loss (in other operating income or other operating expenses).
The Group derecognises a financial asset when the con- tractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred.
Assets are also derecognised when the Group neither transfers nor retains substantially all the risks and rewards of ownership and does not retain control of the transferred asset.
In order to recognise incoming payments in a timely fashion, the Group partially sells its trade receiva- bles – mainly from automobile manufacturers and their suppliers – to a bank. Due to Novem’s continuing involvement, the trade receivables are to be derecog- nised except for the amount of the first loss guarantee. The so-called Seller Guarantee is a limited default guar- antee under which Novem is liable for up to 2% of the average monthly outstanding trade receivables in the total portfolio. This amount continues to be recognised as an asset and as a liability to banks.
Financial liabilities
Except for derivative financial instruments, the Group measures financial liabilities at amortised cost (FLAC) using the effective interest method.
Derivative financial instruments
The Group uses derivative financial instruments to hedge currency risks resulting during the course of operations.
Derivative products are measured at fair value upon ini- tial recognition. Derivatives are subsequently measured
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
78
at fair value (FLFVPL/FAFVPL). Any changes therein are generally recognised in other operating expenses or other operating income. The Group does not apply hedge accounting according to IFRS 9.
2.10 Other provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obliga- tion, whose amount can be estimated reliably, and it is probable that an out‑flow of economic benefits will be required to settle the obligation (probability of occur- rence is greater than 50%).
Warranty obligations may arise on account of statutory stipulations, an agreement or ex-gratia arrangements. Provisions are recognised for expected claims arising from warranty obligations. Utilisation of the provision can be expected in particular if the warranty has not yet expired, if warranty expenditure was incurred in the past or if there are specific signs of warranty cases. Depending on the facts of the situation, the warranty risk is derived either using individual estimates or empirical values from the past, for which a correspond
-
ing provision is recognised. The Group does not offer any further warranties beyond this in terms of addi- tional maintenance and services. Thus, the warranties are Assurance Type Warranties, which – in accordance with IAS 37 – are to be recognised and which do not fall within the scope of IFRS 15.
Provisions for restructuring expenses are recognised when the Group has set up and communicated a detailed formal plan for restructuring and has no real- istic possibility of withdrawing from these obligations.
Should the recognition criteria for provisions not be sat- isfied, then a contingent liability is shown in the notes if certain conditions are met.
2.11 Employee benefits
There are defined benefit obligations within the Group. Pursuant to IAS 19, pension obligations are measured using the projected unit credit method on the basis of actuarial reports. The present value of beneficiaries’ future claims is estimated using actuarial methods on the basis of the benefits earned by staff in the current and preceding periods. The required actuarial calcula- tions are made in the Group by external actuaries.
Actuarial gains and losses from measuring the obliga- tion are recognised in other comprehensive income and shown separately in the consolidated statement of comprehensive income. Expenses from the unwinding of discounts on defined benefit obligations as well as interest income (net interest expense) are shown under net finance income/costs. The service cost is taken into account in personnel expenses, although past service costs are recognised immediately in profit or loss.
Payments to defined contribution plans are recognised as an expense when employees have rendered the work entitling them to the benefits. To the extent necessary, these are shown as a liability on the reporting date.
2.12 Profit-sharing rights of members of
management
The Group established cash-settled share-based pay- ment agreements for members of the Management
Board. The Performance Share Plan is granted in annual tranches of virtual shares with a respective performance period of four years.
According to IFRS 2, for cash‑settled share‑based payment transactions, the Group has to measure the liability incurred at the fair value of the liability. The fair value of the share-based payments of the Performance Share Plan has been measured at the end of each quar- ter by using a Monte-Carlo-Simulation. Any changes in the liability are recognised in profit or loss.
2.13 Revenue recognition
Revenue is recognised for all contracts with customers on the sale of goods or rendering of services according to the five‑step model specified under IFRS 15.
The model specifies that revenue as of a point in time (or over time) of transfer of control of the goods or services from the entity to the customer is to be rec- ognised in the amount to which the entity is expected to be entitled.
The Group usually concludes multiple-element con- tracts with customers which contain more than one performance obligation. In this regard, two or more agreements are generally combined as these are nego- tiated as a package with one single economic purpose. The agreements relate to the sale of trim and function elements, the provision of development services as well as construction of tools necessary for the production of the trim and function elements. Whereas in the case of the agreements for providing development services and the construction of tools, signing of the contract generally satisfies the criteria of an agreement pursu- ant to IFRS 15, a contract within the meaning of IFRS 15
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
79
is typically established for agreements for the delivery of serial parts only as of the date of initial delivery of serial parts. In the case of subsequent, later deliveries, this then involves contract modifications that are to be accounted for separately from the contracts.
As part of multiple-element contracts, the Group has identified the following performance obligations:
•
the provision of development services and the sale of tools necessary for the production of serial parts
•
sale of serial parts
•
with respect to the sale of tools, the Group car- ries out maintenance of these tools, which will be invoiced separately to the OEM
Warranty obligations always constitute assurance-type warranties that are recognised according to IAS 37.
The transaction price includes the fair value of the received or receivable consideration, taking into account rebates or volume discounts granted in the serial process, which – to the extent necessary – are estimated based on historical experience, as well as an appropriate allocation of one-off payments rendered upfront (e.g. participation in the development work of the OEM). When determining the transaction price, the promised consideration is adjusted for the interest effect of any potentially existing financing component.
To account for the time value of money (adjustment of promised consideration), the group uses a discount rate that would be reflected in a separate financing transaction.
In subsequent periods, interest income is recognised on an accrual basis using the effective interest method and presented as finance income.
The expected-cost-plus-a-margin approach is used for estimating the stand-alone selling prices as part of allocating the transaction price to the individual performance obligations.
For the one‑off payments to be paid by the Group, which grant the Group an exclusive position as sup- plier and which can be recouped through sales from the related agreement.
In terms of type of revenue recognition, it is necessary to differentiate between performance obligations that are fulfilled over time and those that are fulfilled at a point in time.
Performance obligations that are satisfied at a point in time
The Group is commissioned by customers to develop special tools, which are sold to the customer upon completion. In such constellations, the development work and subsequent sale of the tools constitute one single performance obligation. The associated revenue is recognised upon completion and sale of the tool to the customer, i.e. at a point in time.
The point in time of revenue recognition from the sale of tools generally corresponds – depending on the respective customer contract and respective order – to the date of delivery or acceptance, as control of the good transfers as of this point in time to the customer and the Group has thus fulfilled its contractual perfor- mance obligation.
Advance payments received from customers for tools are shown as contract liabilities under other liabilities.
Performance obligations that are satisfied over time
The Group is commissioned by the customer to manu- facture customised serial parts. An asset with no alter- native use generally arises when the serial part is highly customised for a particular customer. Furthermore, in such cases, the Group has an enforceable right to pay- ment for services rendered to date. As a result, revenue for these serial parts is recognised over time and the contract asset for this is recognised, amounting to at least any costs of performance completed to date plus a reasonable profit margin.
The payment terms contractually agreed on with all customers (series and tools) are generally between 30 and 90 days.
Revenue from service agreements is recognised over time in those periods in which the service is rendered.
2.14 Net finance income/costs
The Group’s finance income and finance costs include:
•
interest income
•
interest expenses
•
foreign currency gains and losses
•
expenses and income from measuring certain financial instruments at fair value
Interest income and expense are recognised on an accrual basis using the effective interest method.
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
80
2.15 Income taxes
The tax assessment is generally made at the level of the individual circumstances, taking into account any interactions that may exist. If the recognition of the tax treatment is probable, the current and deferred taxes are recognised on this basis. If, on the other hand, rec- ognition is uncertain (not probable), the most probable amount that would be recognised for tax purposes is used, unless the expected value of different scenarios leads to more meaningful results. Full knowledge of the facts by the tax authorities is always assumed. The assumptions and decisions made are reviewed at each reporting date and, if necessary, adjusted on the basis of new findings.
Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the finan- cial year, based on the tax rates applicable or shortly to become applicable on the reporting date, and any adjustment to tax payable for prior years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. Cur- rent tax also includes any tax arising from dividends.
Deferred taxes
Deferred tax is recognised in respect of temporary dif- ferences between the carrying amounts of assets and liabilities in the statements of financial position and the amounts used for taxation purposes.
Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable
that the associated tax benefits will be realised. Impair- ment losses are reversed if the probability of generating taxable earnings in the future increases.
Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
81
3
Notes to the consolidated statements
of financial position
3.1 Intangible assets
The development of the Group’s carrying amounts of intangible assets is shown in the following table for financial years 2022/23 and 2023/24.
| Concessions, industrial | ||||
| property rights and | ||||
| similar rights and | ||||
| assets as well as | ||||
| licenses to such rights | Advance payments | |||
| and assets acquired for | Internally generated | and assets under | ||
| in € thousand | a consideration | intangible assets | construction | Intangible assets |
| Cost | ||||
| As of 01 Apr 22 | 7,148 | 2,271 | - | 9,420 |
| Currency differences | - | - | - | - |
| Additions | 288 | - | - | 288 |
| Disposals | 7 | - | - | 7 |
| Reclassifications | - | - | - | - |
| As of 31 Mar 23 | 7,430 | 2,271 | - | 9,702 |
| As of 01 Apr 23 | 7,430 | 2,271 | - | 9,702 |
| Currency differences | -1 | - | - | -1 |
| Additions | 566 | 36 | 542 | 1,144 |
| Disposals | 1,801 | - | - | 1,801 |
| Reclassifications | 56 | - | - | 56 |
| As of 31 Mar 24 | 6,249 | 2,307 | 542 | 9,099 |
| Accumulated amortisation | ||||
| As of 01 Apr 22 | 5,901 | 420 | - | 6,320 |
| Currency differences | 2 | - | - | 2 |
| Depreciation expenses | 682 | 274 | - | 957 |
| Disposals | 7 | - | - | 7 |
| As of 31 Mar 23 | 6,579 | 694 | - | 7,272 |
| As of 01 Apr 23 | 6,579 | 694 | - | 7,272 |
| Currency differences | 1 | - | - | 1 |
| Depreciation expenses | 516 | 274 | - | 790 |
| Disposals | 1,801 | - | - | 1,801 |
| As of 31 Mar 24 | 5,295 | 968 | - | 6,262 |
| Carrying amount | ||||
| As of 31 Mar 23 | 851 | 1,577 | - | 2,430 |
| As of 31 Mar 24 | 955 | 1,339 | 542 | 2,837 |
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
82
Additions to intangible assets in the financial year 2023/24 amounted to €1,144 thousand compared to €288 thousand in the financial year 2022/23. The addi- tions included €542 thousand (PY: €0) from advance payments and assets under construction for the con- version to SAP S/4HANA.
Purchased intangible assets
Purchased concessions, patents, licenses, trademarks and similar rights and assets mainly concern expenses for third parties in connection with the acquisition of application software.
No impairment losses were recognised for purchased intangible assets in the financial years 2022/23 and 2023/24.
Internally generated intangible assets
Research costs and non-capitalisable development costs are expensed as incurred. The development expenses to be capitalised amounted to €1,339 thou- sand (31 March 2023: €1,577 thousand). This largely involves the development in the area of trims with integrated lighting designs, development in electronic components in the trim part and lighting concepts in car interiors as well as the development of sensor elements.
The Group differentiates between customer-based and non-customer-based (internal) development work in this regard. Internal development work that can be used across customers is recognised as internally generated intangible assets if the corresponding rec- ognition criteria are met and the assets are amortised over their expected useful life.
No impairment losses were recognised for internally generated intangible assets in the financial years 2022/23 and 2023/24.
The Group recognised €1,098 thousand (31 March 2023: €1,288 thousand) in research and development expenses in the financial year 2023/24. Amortisation of capitalised internal development projects amounted to €274 thousand (31 March 2023: €274 thousand).
3.2 Property, plant and equipment
| in € thousand | 31 Mar 23 | 31 Mar 24 |
| Land, leasehold rights | ||
| and buildings, including | 82,131 | 97,939 |
| buildings on third-party land | ||
| Thereof right-of-use | 32,757 | 52,338 |
| assets from leases | ||
| Technical equipment and | 82,135 | 75,172 |
| machinery | ||
| Thereof right-of-use | - | 26 |
| assets from leases | ||
| Other equipment, operating | 13,921 | 13,289 |
| and office equipment | ||
| Thereof right-of-use | 6,160 | 5,543 |
| assets from leases | ||
| Advance payments and | 6,929 | 7,507 |
| assets under construction | ||
| Property, plant and | 185,116 | 193,907 |
| equipment |
Property, plant and equipment include right‑of‑use assets due to the application of IFRS 16 (Leases). Please refer to section 5.10 for additional information on future lease payments.
During the financial year 2023/24, the Group capitalised €43,431 thousand (31 March 2023: €33,758 thousand) including leasing in property, plant and equipment. The additions included €3,491 thousand (31 March 2023: €4,894 thousand) from advance payments and assets under construction.
The depreciation expenses included impairment losses on right-of-use assets relating to buildings amounting to €705 thousand (31 March 2023: €10 thousand) due to existing dismantling obligations for buildings which can be allocated to the regions Europe and Americas.
The development of the Group’s carrying amounts of property, plant and equipment is shown in the following table for the financial years 2022/23 and 2023/24.
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
83
| Land, leasehold | Advance | ||||
| rights and buildings, | Technical | Other equipment, | payments and | ||
| including buildings | equipment and | operating and | assets under | Property, plant | |
| in € thousand | on third-party land | machinery | office equipment | construction | and equipment |
| Cost | |||||
| As of 01 Apr 22 | 146,366 | 286,370 | 51,712 | 7,855 | 492,303 |
| Currency differences | 1,948 | -1,481 | 362 | -136 | 693 |
| Additions | 12,357 | 9,306 | 7,200 | 4,894 | 33,758 |
| Disposals | 4,657 | 5,912 | 4,759 | 37 | 15,365 |
| Reclassifications | 201 | 4,803 | 604 | -5,608 | - |
| As of 31 Mar 23 | 156,215 | 293,086 | 55,118 | 6,969 | 511,388 |
| As of 01 Apr 23 | 156,215 | 293,086 | 55,118 | 6,969 | 511,388 |
| Currency differences | -140 | -3,384 | -359 | -71 | -3,954 |
| Additions | 26,744 | 8,295 | 5,443 | 2,949 | 43,431 |
| Disposals | 3,845 | 13,821 | 5,465 | - | 23,130 |
| Reclassifications | 310 | 1,710 | 48 | -2,125 | -56 |
| As of 31 Mar 24 | 179,285 | 285,885 | 54,785 | 7,722 | 527,678 |
| Accumulated amortisation | |||||
| As of 01 Apr 22 | 65,569 | 202,158 | 39,629 | 41 | 307,397 |
| Currency differences | 1,160 | -1,014 | 233 | -1 | 378 |
| Depreciation expenses | 9,902 | 15,643 | 5,965 | - | 31,510 |
| Thereof impairment losses | 10 | - | - | - | 10 |
| Disposals | 2,547 | 5,837 | 4,630 | - | 13,014 |
| Reclassifications | - | - | - | - | - |
| As of 31 Mar 23 | 74,084 | 210,950 | 41,198 | 40 | 326,272 |
| As of 01 Apr 23 | 74,084 | 210,950 | 41,198 | 40 | 326,272 |
| Currency differences | -590 | -2,580 | -368 | 1 | -3,537 |
| Depreciation expenses | 10,737 | 16,110 | 6,021 | 2 | 32,870 |
| Thereof impairment losses | 705 | - | - | 2 | 707 |
| Disposals | 2,886 | 13,570 | 5,379 | - | 21,835 |
| Reclassifications | - | -196 | 25 | 171 | - |
| As of 31 Mar 24 | 81,346 | 210,714 | 41,497 | 214 | 333,771 |
| Carrying amount | |||||
| As of 31 Mar 23 | 82,131 | 82,135 | 13,920 | 6,929 | 185,116 |
| As of 31 Mar 24 | 97,939 | 75,172 | 13,289 | 7,507 | 193,907 |
3.3 Inventories
| in € thousand | 31 Mar 23 | 31 Mar 24 |
| Raw materials and | 33,409 | 34,320 |
| consumables | ||
| Work in process | 13,125 | 10,757 |
| Finished goods and | 17,530 | 11,069 |
| merchandise | ||
| Tools | 50,955 | 39,471 |
| Advance payments for tools | 1,259 | 3,784 |
| Advance payments for raw | 28 | 35 |
| materials | ||
| Inventories | 116,306 | 99,436 |
The majority of inventories consisted of tools as well as raw materials and consumables.
Inventories that are expected to be turned over within 12 months amounted to €99,436 thousand (31 March 2023: €116,306 thousand). The write‑downs recog- nised on inventories amounted to €5,272 thousand in the financial year 2023/24 (31 March 2023: €7,401 thousand). In the case of write-downs, marketability, age as well as all apparent storage and inventory risks are taken into account. Compared to 31 March 2023, adjustments were made to the model used to deter- mine the respective write‑downs. Firstly, the maximum possible devaluation rate was reduced from 100% to 90% based on a retrospective analysis. Secondly, the previously used general daily grid was replaced by consideration of the individual product life cycle to identify the corresponding devaluation rates. These adjustments lead to a more comprehensible approach and ensure an appropriate true and fair value.
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
84
Since there is no alternative use option for the finished parts on stock as of the reporting date, for which there are also firm purchase commitments by the OEMs, an adjustment was made to the inventories in the amount of €11,078 thousand (31 March 2023: €12,129 thousand) based on recognition of revenue over time under IFRS 15, together with the recognition of con- tract assets amounting to €12,402 thousand (31 March 2023: €14,124 thousand).
3.4 Trade receivables
Trade accounts receivable included the following items:
| in € thousand | 31 Mar 23 | 31 Mar 24 |
| Trade receivables | 95,448 | 91,449 |
| Expected credit losses on | -1,609 | -336 |
| trade receivables | ||
| Trade receivables | 93,839 | 91,113 |
| Non-current | 46,329 | 49,789 |
| Current | 47,510 | 41,324 |
Trade receivables are mainly receivables from con- tracts with customers.
The overall decrease in receivables was primarily driven by a decline of current receivables due to lower business volumes and a decline in demand from OEMs. Contrary to this, the long-term receivables slightly increased due to higher tooling amortisation receivables.
Factoring
Two of the Group’s subsidiaries, Novem Car Interior Design GmbH and Novem Car Interior Design Inc., par- ticipate in a revolving multi-seller securitisation vehicle for its trade receivables.
In conjunction with a factoring agreement, receivables were sold to a bank at a purchase price of €44,313 thousand as of 31 March 2024 (31 March 2023: €54,022 thousand), of which €911 thousand (31 March 2023: €1,046 thousand) representing a limited Seller Guarantee (2% of the average outstanding nominal amount of the European sold receivables). The Seller Guarantee represents the Group’s maximum exposure to any losses in respect of trade receivables previously sold under the factoring program.
These receivables were carried at fair value through profit or loss until the date of their disposal.
The Group concluded that it does not control, and there- fore should not consolidate, the securitisation vehicle. Taken as a whole, the Group does not have power over the relevant activities of the securitisation vehicle.
Expected credit losses
Trade receivables are written down in full or in part when there are indications that they are not recoverable. Fur- thermore, in accordance with IFRS 9, expected credit losses for trade receivables which are not measured at fair value through profit or loss are calculated on a portfolio basis (refer here also to section 5.4). For this purpose, Novem groups the receivables by individual customers. The expected default rates for each coun- terparty are provided by an external rating agency. This individual probability of default per customer is applied
uniformly throughout the Novem Group. Current external credit information and ratings that reflect the prevalent expectations regarding the potential impact of global economic developments were used for the consolidated financial statements as of 31 March 2024. An additional adjustment of the valuation allowance was thus not required under this model.
The allowances for trade accounts receivables devel- oped as follows:
| in € thousand | FY 2022/23 | FY 2023/24 |
| Loss | Loss | |
| allowance | allowance | |
| As of 01 Apr | 1,115 | 1,609 |
| Additions | 515 | 75 |
| Reversals | -27 | -1,350 |
| Used | - | - |
| Exchange rate effects | 6 | 2 |
| As of 31 Mar | 1,609 | 336 |
The reversal effect resulted primarily from a change in the external rating provider. The provider’s approach resulted in a more precise rating overall, which led to slightly better probabilities of default, but had a dis- proportionately positive effect on the expected credit losses due to the long-term nature of the correspond- ing tooling receivables.
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
85
3.5 Other receivables
The Group’s other receivables comprise the following components:
| in € thousand | 31 Mar 23 | 31 Mar 24 |
| From VAT | 33,695 | 24,954 |
| From employees | 539 | 694 |
| From payroll tax | 14 | 21 |
| From social security | - | 64 |
| From advance payment | 319 | 524 |
| receivables | ||
| From financial assets | - | 169 |
| Others | 3,432 | 3,573 |
| Other receivables | 37,999 | 29,999 |
The majority were receivables from tax authorities. This is the result of regular offsetting and notification of paid and received VAT. As of 31 March 2024, the amounts shown in the column Others include income tax receivables in the amount of €2,618 thousand (31 March 2023: €2,459 thousand) and other operating receivables amounting to €955 thousand (31 March 2023: €973 thousand).
3.6 Cash and cash equivalents
| in € thousand | 31 Mar 23 | 31 Mar 24 |
| Cash on hand | 34 | 38 |
| Cash at banks | 165,440 | 141,476 |
| Cash and cash equivalents | 165,474 | 141,514 |
Cash and cash equivalents are not subject to any restrictions. The amount corresponds to the value shown in the Consolidated statement of cash flows. Cash and cash equivalents are concentrated at Novem Beteiligungs GmbH, which operates a group-wide cash pooling system.
3.7 Other non-current/current assets
| in € thousand | 31 Mar 23 | 31 Mar 24 | ||||
| Current | Non-current | Total | Current | Non-current | Total | |
| Prepaid expenses | 800 | 14 | 814 | 758 | 12 | 770 |
| Miscellaneous other assets | 600 | 351 | 951 | - | 362 | 362 |
| Contract assets | 14,669 | - | 14,669 | 14,939 | - | 14,939 |
| Contribution to develop for later supply | ||||||
| contracts | 2,166 | 9,911 | 12,077 | 3,917 | 12,735 | 16,652 |
| Other non-financial assets | 18,235 | 10,276 | 28,511 | 19,614 | 13,109 | 32,723 |
Other non‑financial non‑current assets of €13,109 thousand (31 March 2023: €10,276 thousand) included development contributions for later supply contracts.
expected credit losses on contract assets (refer also to section 5.4), which are shown within other operating expenses, developed as follows on Group level:
| in € thousand | FY 2022/23 | FY 2023/24 |
| As of 01 Apr | 30 | 12 |
| Additions | 2 | 3 |
| Reversals | -20 | -7 |
| Used | - | - |
| As of 31 Mar | 12 | 8 |
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
86
3.8 Equity
Please refer to the Consolidated statement of changes in equity for detailed information on changes in consoli- dated equity. Overall, the equity position changed from €107,256 thousand at the end of the last financial year to €89,887 thousand, which mainly resulted from profit for the year and, on the contrary, from the distribution of the dividend.
Share capital
As of 31 March 2024, the share capital of the Company amounted to €430 thousand (31 March 2023: €430 thousand) and is divided into 43,030,303 ordinary shares (31 March 2023: 43,030,303 ordinary shares) in a dematerialised form with no nominal value. All ordi- nary shares rank equally with regard to the Company’s residual assets. Each share of the Company represents a par value of €0.01 in the Company’s share capital. All shares are fully paid. Holders of these shares are entitled to dividends as declared from time to time and are entitled to one vote per share at general meetings of the Company.
The authorised capital of the Company is set at €520,000 thousand divided into 52,000,000 shares with no nominal value. The Management Board is author- ised to increase the current issued capital up to the amount of the authorised capital, in whole or in part, from time to time during five years after IPO.
Authorisation for repurchase of own shares
On 30 June 2021, the extraordinary General Sharehold- ers’ Meeting of the Company resolved to authorise the Management Board to effect on one or several occa- sions repurchases and disposals of shares on the
regulated market on which the Company’s shares are admitted for trading, or by such other means resolved by the Management Board during a period of five years from the date of the General Shareholders’ Meeting, for a maximum number corresponding to 20% of the ordi- nary shares of the Company, within a price range from a price per share not lower than 10% below the shares’ official price reported in the trading session on the day before carrying out each individual transaction; to a price per share no higher than 10% above the shares’ official price reported in the trading session on the day before carrying out each individual transaction.
During the financial year 2023/24, the Company did not buy any of its own shares.
Capital reserves
The capital reserves amounted to €539,594 thousand as of 31 March 2024 (31 March 2023: €539,594 thou- sand). Directly attributable transaction costs of €1,209 thousand (31 March 2023: €1,209 thousand) were rec- ognised and thus diminished the capital reserves. In this context, deferred tax assets of €187 thousand (31 March 2023: €267 thousand) were recognised.
Other retained earnings
Retained earnings amounted to €-459,222 thousand as of 31 March 2024 (31 March 2023: €‑443,414 thou- sand). Retained earnings comprise the past undistrib- uted net income and other comprehensive income of the companies included in the consolidated financial statements. The negative amount primarily results from a recapitalisation and a related Group re-organi- sation in the financial year 2019/20.
Difference in equity from currency translation
The statements of financial position and of total com- prehensive income for all foreign subsidiaries whose functional currency is not the Euro are translated into Euro. The currency translation differences arising are recognised in other comprehensive income and reported in the currency translation reserve in equity; they amounted to €9,085 thousand as of 31 March 2024 (31 March 2023: €10,646 thousand). The change resulted from differences in currency translation of €1,562 thousand (31 March 2023: €224 thousand).
Dividend
The Management Board, in agreement with the Supervi- sory Board, will propose the suspension of the dividend payment for the financial year 2023/24 to the Annual General Meeting on 22 August 2024.
The total dividend in prior year amounted to €49,485 thousand and thus corresponded to a payout ratio of 99.0% of the consolidated net profit. It consisted of an ordinary dividend of €0.40 per share as well as a special dividend of €0.75 per share, which resulted in a total dividend of €1.15 per share (ordinary plus special) for the financial year 2022/23.
3.9 Employee benefits
The Group grants its staff in and outside of Germany pension and other post‑employment benefit enti- tlements, which are either defined‑contribution or defined‑benefit pension plans. In this regard, besides the ongoing contributions, the defined contribution plans do not lead to any further payment obligations. The pension provision for the defined benefit plans is
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
87
generally calculated using the projected unit credit method. Under this projected unit credit method, expected future increases in salaries and pensions are taken into account in addition to the pensions and vested entitlements known as of the reporting date. The present value of the obligation (Defined Benefit Obligation or DBO) is determined by discounting the future expected cash out‑flows using a discount rate that is based on the returns on high‑quality fixed‑rate corporate bonds in the same currency. In doing so, the underlying corporate bonds are used to derive a yield curve and the related discount rate is determined using the term of the future obligations.
Defined benefit plans
The significant defined benefits are in Germany and include staff’s entitlements to retirement benefits in the case of disability or upon reaching retirement age – and also in the event of death in individual cases. The gen- eral commitment specifies payments for a standard basic sum, which rises by a fixed amount for each year of service completed. Furthermore, there are various individual commitments in Germany based on final salary. The benefit entitlements applicable to Germany encompassed defined benefit obligations amounting to €26,398 thousand as of 31 March 2024 (31 March 2023: €23,849 thousand) and thus accounted for 91.0% of the total obligation (31 March 2023: 88.0%). There are retirement benefit obligations in Italy, Slovenia and Mexico with entitlement to capital sums based on stat- utory regulations. In addition, employees in Mexico are entitled to a statutory seniority provision termination benefit, which functions in a similar way to the retire- ment indemnity and is also included with an amount of €472 thousand (31 March 2023: €350 thousand).
The risks associated with the defined benefit plans essentially include the usual risks of defined benefit pension plans relating to possible changes to the dis- count rate and, to a lesser extent, inflation trends and longevity. In order to limit the risks of changing capital market conditions and demographic developments, the most recent general pension plan was closed to new entrants in Germany in 2015. The specific risks of salary-based obligations within the Group are minimal.
The present value of the defined benefit obligations developed as follows:
| in € thousand | FY 2022/23 | FY 2023/24 |
| Present value of the benefit | 34,871 | 27,044 |
| obligations on 01 Apr | ||
| Current service cost | 826 | 812 |
| Past service cost | - | 94 |
| Interest expense | 802 | 1,131 |
| Employer’s direct benefit | -989 | -1,813 |
| payments | ||
| Actuarial gains (‑)/ | -8,572 | 1,576 |
| losses (+) | ||
| Thereof on account of | ||
| changes to demographic | 1 | -129 |
| assumptions | ||
| Thereof on account of | ||
| changes to financial | -8,279 | 1,710 |
| assumptions | ||
| Thereof on account | ||
| of experience-based | -294 | -5 |
| adjustments | ||
| Effects of changes in | 106 | 98 |
| foreign exchange rates | ||
| Present value of the benefit | 27,044 | 28,942 |
| obligations on 31 Mar |
The employee benefit expense for defined benefit plans recognised in profit or loss consisted of the following items:
| in € thousand | FY 2022/23 | FY 2023/24 |
| Current service cost | 826 | 812 |
| Past service cost | - | 94 |
| Service cost | 826 | 906 |
| Interest expense | 802 | 1,131 |
| Pension and similar | ||
| obligations expense for | 1,628 | 2,037 |
| benefit plans |
The past service cost reported in FY 2023/24 is related to an incentivised restructuring plan in Italy that took place over the course of the financial year.
The pensions and similar obligations provision was as follows:
| in € thousand | FY 2022/23 | FY 2023/24 |
| Present value of benefit | ||
| entitlements from benefit | 27,044 | 28,942 |
| plans | ||
| Financing status | 27,044 | 28,942 |
| Pension and similar obliga- | 27,044 | 28,942 |
| tions provision on 31 Mar |
The benefits paid out in the financial year 2023/24 amounted to €1,813 thousand (PY: €989 thousand). Payments amounting to €1,231 thousand are expected for 2024/25, which are directly rendered by the employer.
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
88
The pensions and similar obligations provision devel
-
oped as follows:
| in € thousand | FY 2022/23 | FY 2023/24 |
| Pension and similar obliga- | 34,871 | 27,044 |
| tions provision on 01 Apr | ||
| Pension expense | 1,628 | 2,037 |
| Actuarial gains (‑)/losses (+) | ||
| recognised in other | -8,572 | 1,576 |
| comprehensive income | ||
| Employer’s direct benefit | -989 | -1,813 |
| payments | ||
| Effects of changes in | 106 | 98 |
| foreign exchange rates | ||
| Pension and similar obliga- | 27,044 | 28,942 |
| tions provision on 31 Mar |
Actuarial gains and losses are recognised directly in other comprehensive income. They are part of retained earnings and will never be reclassified to the profit or loss.
The actuarial assumptions for calculating the Group’s pension and similar obligations are shown below:
| 31 Mar 23 | 31 Mar 24 | |
| Discount rate | 4.3% | 3.9% |
| Salary trend/growth of | 2.7% | 2.8% |
| pension expectancies | ||
| Future pension growth | 2.2% | 2.2% |
| Life expectancy from age 65 (in years) – | ||
| Obligations in Germany | ||
| Retiring today (member age | 20.8 / 24.2 | 20.9 / 24.3 |
| 65) – male/female | ||
| Retiring in 20 years (member | 23.5 / 26.4 | 23.6 / 26.5 |
| age 45) – male/female | ||
The financial assumptions shown above are weighted averages. A discount rate of 3.66% was set for Ger- many (31 March 2023: 4.10%). For the remaining Eurozone countries, i.e. Italy and Slovenia, the discount rates used on 31 March 2024 were 3.65% and 3.55% respectively (31 March 2023: 4.15% and 4.00%). For Mexico, a discount rate of 9.5% was set on 31 March 2024 (31 March 2023: 9.4%).
Heubeck’s 2018 G guideline tables were used as the demographic basis for calculations in Germany – the resulting life expectancy figures are shown above as of 31 March 2024 and 31 March 2023 for comparison.
An increase or decrease in the discount rate by 25 basis points would impact the present value of the total ben- efit entitlements as of 31 March 2024 as follows:
| in € thousand | 31 Mar 24 |
| Change in present value of the benefit | |
| entitlements if the | |
| discount rate were to be 25 basis points | -1,028 |
| higher | |
| discount rate were to be 25 basis points | 1,091 |
| lower |
A decrease or increase in assumed life expectancy by one year would impact the present value of the ben- efit entitlements in Germany1 as of 31 March 2024 as follows:
| in € thousand | 31 Mar 24 |
| Change in present value of the benefit | |
| entitlements if the | |
| life expectancy were to be 1 year higher | 1,083 |
| life expectancy were to be 1 year lower | -1,099 |
An increase or decrease in the pension progression by 25 basis points would impact the present value of the benefit entitlements as of 31 March 2024 as follows:
| in € thousand | 31 Mar 24 |
| Change in present value of the benefit | |
| entitlements if the | |
| pension progression were to be 25 basis | 774 |
| points higher | |
| pension progression were to be 25 basis | -740 |
| points lower |
The weighted average duration of the defined benefit obligations on 31 March 2024 was 15 years (31 March 2023: 15 years).
Defined contribution plans
The amounts for the Group’s statutory pension insurance are treated as defined contribution plans pursuant to IAS 19. Expenses amounting to €9,956
1
Since changes in life expectancy have no or minimal impact on capital commitments outside of Germany, the benefit entitlements abroad are not taken into account.
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
89
thousand were reported in the financial year 2023/24 (PY: €10,306 thousand) in Germany, Italy, the Czech Republic, Slovenia, Luxembourg and the US.
3.10 Tax liabilities
| Income tax | ||
| in € thousand | Current | liabilities |
| Change in tax liabilities | ||
| As of 01 Apr 22 | 13,805 | 13,805 |
| Used | -2,171 | -2,171 |
| Addition | 7,412 | 7,412 |
| Exchange rate difference | 10 | 10 |
| As of 31 Mar 23 | 19,056 | 19,056 |
| As of 01 Apr 23 | 19,056 | 19,056 |
| Used | -21,214 | -21,214 |
| Addition | 9,748 | 9,748 |
| Exchange rate difference | 1 | 1 |
| As of 31 Mar 24 | 7,591 | 7,591 |
The Group is subject to income taxes in different juris- dictions. Therefore, key assumptions are necessary to consider the various tax legislations and determine the global income tax liability.
The Group might be subject to tax risks attributable to previous tax assessment periods and might be subject to unanticipated tax expenses in relation to previous tax assessment periods that have not yet been subject to a tax audit or are currently subject to a tax audit. It cannot be ruled out that tax authorities may apply a different approach in ongoing and/or future tax audits from the one adopted by the Group, which may lead to
an additional tax expense and/or payment, which could have a material and adverse effect on our business, financial condition and results of operations.
The Group recognises potential risks related to uncer- tain tax positions in accordance with IFRIC 23.
3.11 Other provisions
The provisions cover all identifiable risks and other uncertain obligations. The provisions are shown in the following in each case broken down into non-current and current provisions.
The non‑current provisions developed as follows:
| Other | ||||
| Obligations from | Employee | non-current | ||
| in € thousand | sales | benefits | Other risks | provisions |
| As of 01 Apr 22 | 1,867 | 1,305 | - | 3,172 |
| Used | -1,600 | -105 | - | -1,705 |
| Reversal | - | - | - | - |
| Addition | - | -67 | - | -67 |
| Discounting of provision | - | -27 | - | -27 |
| Reclassification to current provisions | - | - | - | - |
| As of 31 Mar 23 | 267 | 1,106 | - | 1,373 |
| As of 01 Apr 23 | 267 | 1,106 | - | 1,373 |
| Used | -267 | -20 | - | -287 |
| Reversal | - | - | - | - |
| Addition | - | 243 | 955 | 1,198 |
| Discounting of provision | - | - | - | - |
| Reclassification to current provisions | - | - | - | - |
| As of 31 Mar 24 | - | 1,329 | 955 | 2,284 |
The non-current provisions amounted to €2,284 thou- sand as of 31 March 2024 (31 March 2023: €1,373 thousand) and are expected to fall due between one and five years.
Of this amount, €1,329 thousand (31 March 2023: €1,106 thousand) were fully attributable to provisions in the personnel area. These personnel-related obliga- tions relate to long-service awards, which are calcu- lated using actuarial reports. A further amount of €955 thousand was attributable to provisions for dismantling obligations of buildings. The provisions attributable to the sales area primarily included risks arising from warranty claims. The usage of €267 thousand in the financial year 2023/24 was related to a quality claim.
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
90
The development of current provisions is set out in the table below:
| Obligations from | Employee | Other current | ||
| in € thousand | sales | benefits | Other risks | provisions |
| As of 01 Apr 22 | 40,241 | 1,741 | 5,992 | 47,974 |
| Used | -12,703 | -1,267 | -3,320 | -17,290 |
| Reversal | -8,768 | -51 | -2,263 | -11,082 |
| Addition | 22,698 | 1,328 | 2,816 | 26,842 |
| Exchange rate difference | 128 | 102 | 19 | 249 |
| Reclassification from non‑current provisions | - | - | - | - |
| As of 31 Mar 23 | 41,596 | 1,853 | 3,244 | 46,693 |
| As of 01 Apr 23 | 41,596 | 1,853 | 3,244 | 46,693 |
| Used | -2,380 | -272 | -913 | -3,565 |
| Reversal | -12,933 | -57 | -25 | -13,015 |
| Addition | 7,336 | 903 | 466 | 8,705 |
| Exchange rate difference | -27 | 71 | 5 | 49 |
| Reclassification from non‑current provisions | - | - | - | - |
| As of 31 Mar 24 | 33,592 | 2,498 | 2,777 | 38,867 |
Current provisions as of 31 March 2024, which were recognised for uncertain obligations within one year, included in particular provisions from obligations from the personnel and sales areas as well as other risks of €38,867 thousand (31 March 2023: €46,693 thousand).
The personnel-related obligations related largely to provisions for partial retirement benefits, severance payments and performance-based obligations.
The provisions attributable to the sales area included especially risks arising from warranty claims, price risks and not yet finalised customer debit notes.
Management’s best estimate was used as a basis when measuring warranty provisions. These are esti- mated based on past experience with respect to the Group’s liability. Specific individual cases are also taken into account.
The outstanding customer debit notes recognised in the consolidated financial statements relating to price or quantity differences, as well as quality deficiencies, were based on assumptions or estimates made on account of ongoing customer negotiations or past experience with customers.
The remaining risks primarily involved a number of discernible individual risks and uncertain liabilities that were accounted for at their probable settlement amounts.
In 2023, the decision was made to close the production in Bergamo (Italy). The local presence in Italy will remain and continue to operate as a buy-sell distributor. The production of the platforms was transferred to other European locations in order to improve overall plant capacity utilisation. The total amount of the restructur- ing costs amounted to €5,073 thousand. This amount included severance payments for employees, removal and relocation costs. Of this amount, €853 thousand is still unused, which is reflected in the employee benefits and other risks of the non-current provisions as of 31 March 2024.
At the beginning of 2024, Novem decided to carry out restructuring measures in Vorbach (Germany), which consequently led to employee redundancies. The total amount of the restructuring costs, mainly consisting of severance payments and costs related to a trans- fer company, amounted to €3,552 thousand. As of 31 March 2024, the provisions for employee benefits and other risks contained the not yet utilised provision of €1,587 thousand.
It is expected that all current provisions will be used during the course of the following financial year.
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
91
3.12 Financial liabilities
| in € thousand | 31 Mar 23 | 31 Mar 24 | ||||
| Current | Non-current | Total | Current | Non-current | Total | |
| Liabilities to banks | 1,151 | 248,220 | 249,371 | 1,165 | 248,754 | 249,919 |
| Financial liabilities | 1,151 | 248,220 | 249,371 | 1,165 | 248,754 | 249,919 |
Total current and non‑current financial liabilities amounted to €249,919 thousand as of 31 March 2024 (31 March 2023: €249,371 thousand).
In June 2021, a new term loan agreement for €310,000 thousand in total (€250,000 thousand as a term loan and €60,000 thousand as a revolving credit facility) was entered into between Novem Group S.A. and an interna- tional syndicate of banks. Accordingly, the refinancing was implemented as of 23 July 2021 by the drawdown of the term loan of €250,000 thousand and matures in July 2026.
After the deduction of transaction costs and pro rata interest incurred, €248,754 thousand (31 March 2023: €248,220 thousand) of the liabilities to banks of €249,919 thousand (31 March 2023: €249,371 thou- sand) related to the utilised term loan. The remaining amount of €1,165 thousand (31 March 2023: €1,151 thousand) mainly resulted from the Seller Guarantee derived from factoring as described in section 3.4.
3.13 Other financial liabilities
Other financial liabilities were composed as follows:
| in € thousand | 31 Mar 23 | 31 Mar 24 |
| Other current financial liabilities | ||
| Lease liabilities | 7,938 | 7,295 |
| Other non-current financial liabilities | ||
| Lease liabilities | 31,143 | 49,229 |
| Loan (benefits fund) | 4 | - |
| Other financial liabilities | 39,085 | 56,524 |
The liabilities to leases contained changes due to cash out‑flow of €11,370 thousand in the financial year 2023/24 (PY: €9,797 thousand). The increase of the total lease liabilities resulted primarily from contract modifications to building contracts and current leases as well as from a currency translation effect in the amount of €1,345 thousand.
The lease liabilities of €56,524 thousand as of 31 March 2024 (31 March 2023: €39,081 thousand) were largely from leasing land and buildings (refer to section 5.10).
3.14 Other non-financial liabilities
Other non‑financial liabilities break down as follows:
| in € thousand | 31 Mar 23 | 31 Mar 24 |
| Other current liabilities | ||
| Employee-related liabilities | 7,420 | 8,753 |
| VAT | 5,029 | 4,739 |
| Other liabilities | 4,643 | 6,581 |
| Contract liabilities | 31,562 | 21,111 |
| Other current liabilities | 48,654 | 41,184 |
| Other non-current liabilities | ||
| Other liabilities | 360 | 4,377 |
| Other non-current liabilities | 360 | 4,377 |
Current non‑financial liabilities amounted to €41,184 thousand as of 31 March 2024 (31 March 2023: €48,654 thousand). This item included especially contract liabilities in the form of advance payments received for tools, VAT liabilities as well as personnel- related liabilities, which were recognised in the context of social security for social insurance contributions still outstanding. In addition, the OEMs’ development con- tributions are shown under other liabilities.
Non‑current non‑financial liabilities amounted to €4,377 thousand as of the reporting date (31 March 2023: €360 thousand). These primarily related to the OEMs’ development contributions.
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
92
The following table shows the significant changes in contract liabilities which always have a duration of less than one year:
| in € thousand | FY 2022/23 | FY 2023/24 |
| Revenue recognised in the | ||
| financial year that was inclu- | ||
| ded in the carrying amount of | 8,405 | 23,454 |
| the contract liabilities at the | ||
| beginning of the financial year | ||
| Increase in the financial year | ||
| on account of advance pay- | 16,867 | 13,003 |
| ments for tools |
3.15 Trade payables
Trade payables comprise outstanding obligations from the exchange of the Group’s goods and services. Trade payables amounted to €45,455 thousand on the reporting date (31 March 2023: €60,597 thousand). The decline was mainly caused by the lower business volume, which also led to a reduction in the need for procurement. Moreover, this development was driven by cash flow management and the maturity of liabilities.
3.16 Deferred liabilities/accruals
| in € thousand | 31 Mar 23 | 31 Mar 24 |
| Personnel-related accruals | 12,843 | 11,887 |
| Outstanding invoices for | 20,920 | 18,630 |
| trade payables | ||
| Costs related to the | ||
| year-end audit and annual | 1,815 | 3,280 |
| financial statements | ||
| Other deferred liabilities | 2,292 | 2,140 |
| Deferred liabilities/accruals | 37,870 | 35,937 |
| Non-current | 1,767 | 2,025 |
| Current | 36,103 | 33,912 |
Accruals are disclosed under other liabilities. Accru- als are liabilities to pay for goods or services already received which have not been paid or invoiced by the supplier.
These largely comprised outstanding obligations within the Group from the exchange of goods and services as well as on account of personnel-related accruals, which mainly include matters such as leave not yet taken, Christmas and holiday pay or performance-related salary components.
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
93
4
Explanatory notes on the consolidated statement of comprehensive income
4.1 Revenue
In the financial year 2023/24, Novem generated total revenue of €635,509 thousand (PY: €700,304 thou- sand), which marks a -9.3% decrease compared to last year. The distribution of revenue among the locations is provided in Geographical information in section 5.9. As in previous years, the wood surface area accounted for the largest share of Novem’s success, followed by aluminium and premium synthetics. Revenue can be broken down by the surface areas mentioned below:
| in € thousand | FY 2022/23 | FY 2023/24 |
| Wood | 520,900 | 512,467 |
| Aluminium | 135,604 | 87,579 |
| Premium synthetics | 43,799 | 35,463 |
| Revenue | 700,304 | 635,509 |
Revenue Series developed negatively in the financial year 2023/24 and recorded at €553,053 thousand, down by -10.5% compared to the same reporting period last year (PY: €618,226 thousand). Revenue Series gen- erated 87.0% of total revenue (PY: 88.3%) and remained the key pillar of the business.
Revenue Tooling, which comprises performance obli- gations for development work and the subsequent sale of tools as well as maintenance activities, contributed €82,456 thousand to total revenue for the financial year 2023/24 (PY: €82,077 thousand). This corresponds
to a year-on-year increase of 0.5% or €379 thousand. Revenue within the Group can be allocated to business areas as follows:
| in € thousand | FY 2022/23 | FY 2023/24 |
| Revenue Series | 618,226 | 553,053 |
| Revenue Tooling | 82,077 | 82,456 |
| Revenue | 700,304 | 635,509 |
The following breakdown determines the type of revenue recognition, as revenue from Series and maintenance activities are considered to be goods and services trans- ferred over time, while revenue from the development work and subsequent sale of tools must be classified as goods and services transferred at a point in time.
| in € thousand | FY 2022/23 | FY 2023/24 |
| Goods and services | 620,775 | 557,662 |
| transferred over time | ||
| Goods and services | 79,529 | 77,847 |
| transferred at a point in time | ||
| Revenue | 700,304 | 635,509 |
There was also a corresponding adjustment of revenue in the amount of €2,316 thousand (PY: €1,510 thou- sand) on account of current contract terms, whereby, on the start of production (SOP) on some platforms, the revenue recognised is reduced in line with the units delivered and the asset for the development contribu- tions is reversed accordingly.
Novem expects that revenue for its delivery obligations not (or only partially) fulfilled at the end of the financial year will be recognised within a year and therefore applies the practical expedient in IFRS 15.121.
4.2 Other operating income
| in € thousand | FY 2022/23 | FY 2023/24 |
| Income from the disposal | ||
| of property, plant and equip- | 13 | 188 |
| ment and intangible assets | ||
| Foreign currency translation | 9,369 | 5,034 |
| gains | ||
| Income from charging out | 5,337 | 2,714 |
| to third parties | ||
| Other income | 11,097 | 10,966 |
| Other operating income | 25,816 | 18,902 |
Other operating income decreased in the financial year 2023/24 by €‑6,914 thousand from €25,816 thousand to €18,902 thousand year-on-year. Other operating income mainly included €5,034 thousand (PY: €9,369 thousand) currency translation effects as well as €2,714 thousand (PY: €5,337 thousand) income from charging out to third parties. Other income also included €9,387 thousand (PY: €7,985 thousand) income from reversal of provisions, €415 thousand (PY: €2,830 thousand) income from other periods as well as €634 thousand (PY: €282 thousand) insurance reimbursements.
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
94
4.3 Cost of materials
The cost of materials includes the expenses for raw materials, consumables and purchased goods/ser- vices. For further information on inventories, refer to section 3.3.
| in € thousand | FY 2022/23 | FY 2023/24 |
| Cost of raw materials | ||
| and consumables and of | 329,364 | 281,731 |
| purchased goods | ||
| Cost of purchased services | 25,325 | 21,551 |
| Cost of materials | 354,689 | 303,282 |
The reported cost of materials decreased by -14.5% year-on-year. The decline contrasts with a contrac- tion in sales of -9.3%. Hence, the cost of materials to output (total operating performance) ratio decreased slightly to 48.9% (PY: 51.2%). In conjunction with the lower turnover, the cost of materials also diminished, as inventories are at a reduced level in connection with current demand.
4.4 Personnel expenses
The high level of vertical integration means personnel expenses in the Group account for a considerable portion of total expenses. The personnel expenses include social security, pension and other benefits. The increase in personnel expenses was due to the closure of the production in Bergamo (Italy) and the restructuring of the German location in Vorbach. The total personnel expenses from severance in Bergamo amounted to €4,357 thousand. The restructuring in Vorbach includes severance expenses and other per- sonnel costs with a value of €2,567 thousand.
Management’s compensation as well as those of staff in managerial positions is designed with variable com- ponents in differing proportions. The variable payments are based on fulfilling the Group’s revenue and earnings targets as well as on individual objectives.
| in € thousand | FY 2022/23 | FY 2023/24 |
| Wages and salaries | 140,378 | 146,505 |
| Social security | 26,476 | 24,833 |
| Pension expense | 1,791 | 1,908 |
| Personnel expenses | 168,645 | 173,246 |
The personnel expenses ratio (personnel expenses to total operating performance) increased compared to the previous year and equalled 27.9% (PY: 24.3%).
The table below sets forth the number of employees (by headcount including headquarters and exclud- ing leased workers, interns and students) the Group employed as of the dates indicated for each of the regions in which the Group operate:
| 31 Mar 23 | 31 Mar 24 | |
| Europe | 2,893 | 2,434 |
| Americas | 1,807 | 1,780 |
| Asia | 788 | 673 |
| Number of employees | 5,488 | 4,887 |
4.5 Amortisation, depreciation and impairment
losses
| in € thousand | FY 2022/23 | FY 2023/24 |
| Intangible assets | 957 | 790 |
| Property, plant and | 31,510 | 32,870 |
| equipment | ||
| Thereof impairment | 10 | 707 |
| losses | ||
| Thereof right-of-use | 8,982 | 9,940 |
| assets from leases | ||
| Amortisation, depreciation | 32,467 | 33,660 |
| and impairment losses |
Amortisationanddepreciationof€33,660thousandwas recognised in the financial year 2023/24 (PY: €32,467 thousand). Of this amount, €707 thousand (PY: €10 thousand) were attributable to impairment losses.
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
95
4.6 Other operating expenses
Other operating expenses included especially:
| in € thousand | FY 2022/23 | FY 2023/24 |
| Order-related expenses | 23,714 | 19,401 |
| Legal and advisory fees | 11,051 | 9,465 |
| Maintenance expenses | 9,677 | 9,574 |
| Personnel-related expenses | 6,870 | 7,500 |
| Leasing and rent expenses | 3,247 | 2,835 |
| Expenses for insurance, | 3,644 | 3,377 |
| feeds and contribution | ||
| Other services | 4,751 | 5,165 |
| Expenses for environmen- | 1,815 | 1,605 |
| tal protection | ||
| Expenses from foreign cur- | 8,901 | 4,975 |
| rency translation | ||
| Expenses relating to other | 1,484 | 816 |
| periods | ||
| Loss allowance on receiva- | 1,269 | - |
| bles and contract assets | ||
| Other expenses | 5,953 | 4,767 |
| Other operating expenses | 82,376 | 69,480 |
Other operating expenses decreased in the financial year 2023/24 by €‑12,896 thousand from €82,376 thou- sand to €69,480 thousand. Other operating expenses mainly included order-related expenses, which mostly consisted of outgoing freight expenses totalling €13,281 thousand (PY: €17,248 thousand). Other services amounting to €5,165 thousand (PY: €4,751 thousand) mainly contained security and cleaning expenses. The remaining expenses amounting to €4,767 thousand (PY: €5,953 thousand) primarily included IT, vehicle and office material costs.
4.7 Net finance income/costs
The financial result amounted to €12,571 thousand in the financial year 2023/24 (PY: €9,532 thousand).
Finance income
| in € thousand | FY 2022/23 | FY 2023/24 |
| Interest income | 3,361 | 5,872 |
| Income from currency | 194 | 1,504 |
| translation | ||
| Finance income | 3,555 | 7,376 |
Finance income amounted to €7,376 thousand in the financial year 2023/24 (PY: €3,555 thousand) and was largely attributable to interest income from customer tooling of €3,080 thousand (PY: €2,820 thousand) as well as interest income from banks of €2,792 thousand (PY: €541 thousand). This item also included income from foreign currency translation of €1,504 thousand (PY: €194 thousand).
Finance costs
| in € thousand | FY 2022/23 | FY 2023/24 |
| Interest paid to banks | 6,710 | 13,619 |
| Transaction costs directly | ||
| attributable to the issue of a | 613 | 595 |
| financial liability | ||
| Interest expense from | 829 | 1,175 |
| discounting of provisions | ||
| Interest expense arising | 546 | 1,165 |
| from leases | ||
| Other interest expenses | 1,790 | 3,317 |
| Expenses from currency | 2,600 | 76 |
| translation | ||
| Finance costs | 13,088 | 19,947 |
The finance costs of €19,947 thousand in the financial year 2023/24 (PY: €13,088 thousand) mainly arose from interest expenses for banks and other interest expenses. With the exception of the interest expense from the discounting of provisions, interest expenses were calculated using the effective interest method.
4.8 Tax expenses
The income tax expense for the financial years 2022/23 and 2023/24 can be broken down as follows:
| in € thousand | FY 2022/23 | FY 2023/24 |
| Current taxes | 13,927 | 12,688 |
| Current taxes prior years | 1,800 | 364 |
| Deferred taxes | 5,209 | -1,077 |
| Taxes on income | 20,937 | 11,975 |
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
96
Deferred taxes totalling €-1,077 thousand can be broken down in €-2,259 thousand from interest car- ryforwards, loss carryforwards and tax credits with an offsetting effect of €1,182 thousand resulting from temporary differences.
The Group tax rate remained at 26.9% and is based on a corporation tax rate of 15.0% and a solidarity surcharge of 5.5% on the corporation tax as well as a trade tax rate of 11.1% (PY: 11.1%).
Reconciliation of the income taxes in the financial years 2022/23 and 2023/24 using a total tax rate of 26.9% (PY: 26.9%) (corporation tax and trade tax of the main country of operations being Germany) to the income tax expense shown in the consolidated statement of comprehensive income was as follows:
| in € thousand | FY 2022/23 | FY 2023/24 |
| Profit/loss before tax | 70,920 | 46,756 |
| Weighted average tax rate | 26.9% | 26.9% |
| (%) | ||
| Tax expense at average | 19,085 | 12,591 |
| weighted tax rate | ||
| Causes for additional amounts/shortfalls | ||
| Non-deductible expenses | 1,566 | 4,040 |
| Tax-exempt income | -1,347 | -317 |
| Tax income/expense | 3,269 | 728 |
| relating to other periods | ||
| Tax rate differential | -1,873 | -3,284 |
| Other effects | 238 | -1,783 |
| Disclosed expense for | 20,937 | 11,975 |
| income taxes | ||
The disclosed income tax expense of €11,975 thousand was lower than the expected income tax expense of
€12,591 thousand that resulted from applying the Group tax rate of 26.9% to the Group’s consolidated profit before income tax.
The tax impact of non-deductible expenses consisted pri- marily of expenses that are non-deductible in the deter- mination of the taxable profits in Germany and effects resulting from the Mexican maquiladora structure.
The tax effect reported as a tax rate differential reflects the difference between the Group tax rate of 26.9% rel- evant to the Group and the tax rates applicable to the individual subsidiaries in varying countries.
Other effects amounting to €1,783 thousand arose from deferred tax assets in the amount of €1,540 thousand on loss carryforwards in Italy, Slovenia and Luxembourg as well as €243 thousand on tax credits carried forward in Slovenia.
Deferred tax claims are only to be reported if it is likely that future taxable income can be offset against tax credits, interest and losses carried forward. In the case of tax credits and losses carried forward, a planning period of four years is used, based on the most recent budget planning of the Group.
In Slovenia, tax credits amounted to €1,103 thousand (PY: €2,991 thousand), on which deferred tax assets were capitalised. For the current financial year, deferred tax assets were recognised for the interest carryfor- ward of €21,399 thousand (PY: €19,784 thousand). Tax losses carried forward, which can be applied indefi- nitely, in the amount of €8,980 thousand (PY: €10,603 thousand) existed in Italy and Slovenia. Deferred tax assets of €718 thousand (PY: €2,229 thousand) have not been recognised because it is not probable in the short‑term perspective that future taxable profits will
be available against which the Group can use the ben- efits therefrom.
Deferred tax assets and liabilities resulted from tempo- rary differences in the following items in the statements of financial position and are broken down as follows:
| in € thousand | FY 2022/23 | FY 2023/24 |
| Property, plant and | ||
| equipment and | 5,935 | 5,108 |
| intangible assets | ||
| Receivables and other | 620 | 240 |
| assets | ||
| Tax interest carryfor- | ||
| ward, loss carryforward, | 4,776 | 6,765 |
| tax credits | ||
| Liabilities | 232 | 6,898 |
| Provisions | 6,119 | 5,669 |
| Deferred income tax | 17,682 | 24,680 |
| assets (gross) | ||
| Offset | 9,350 | 14,093 |
| Deferred income tax | 8,332 | 10,587 |
| assets | ||
| Property, plant and | ||
| equipment and | 4,643 | 7,620 |
| intangible assets | ||
| Receivables and other | 3,575 | 7,032 |
| assets | ||
| Liabilities | 1,131 | 316 |
| Provisions | 650 | 478 |
| Deferred income tax | 9,998 | 15,446 |
| liabilities (gross) | ||
| Offset | 9,350 | 14,093 |
| Deferred income tax | 648 | 1,353 |
| liabilities | ||
| Deferred income tax asset | 7,684 | 9,234 |
| (net) |
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
97
In accordance with IAS 12.81(f), deferred taxes on outside basis differences were not recognised in the current year and in the previous year and amounted to €10,446 thousand (PY: €12,641 thousand). No income tax consequences arose from the distribution of divi- dends to the Company’s shareholders.
In financial year 2023/24, deferred taxes of €‑473 thousand (PY: €2,229 thousand) resulting from defined benefit plans were recognised in other comprehensive income and €0 (PY: €36 thousand) directly in equity.
Amounts recognised in other comprehensive income
| in € thousand | FY 2022/23 | FY 2023/24 |
| Remeasurements of defined | 8,572 | -1,576 |
| benefit liability (before taxes) | ||
| Tax expense | -2,229 | 473 |
| Net of tax | 6,343 | -1,103 |
4.9 Earnings per share
The earnings per share for the financial year ended 31 March 2024 amounted to €0.81 (PY: €1.16). Earnings per share are calculated by dividing the profit for the period attributable to shareholders of the parent by the weighted average numbers of shares issued in the reporting period.
| FY 2022/23 | FY 2023/24 | |
| Profit attributable to share- | ||
| holders of the parent | 49,983 | 34,781 |
| (in € thousand) | ||
| Number of weighted shares | 43,030,303 | 43,030,303 |
| Earnings per share basic (in €) | 1.16 | 0.81 |
| Earnings per share diluted (in €) | 1.16 | 0.81 |
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
98
5
Other disclosures
5.1 Working capital
Trade working capital is, amongst others, a key per- formance indicator to track the Group’s operating performance. It is neither required by nor presented in accordance with IFRS as adopted by the EU. It is also not a measure of financial performance under IFRS as adopted by the EU and should not be considered as an alternative to other indicators of operating perfor- mance, cash flow or any other measure of performance derived in accordance with IFRS as adopted by the EU.
The following table shows the amounts of the working capital broken down by balance sheet class position:
| in € thousand | 31 Mar 23 | 31 Mar 24 |
| Inventories – non-tooling | 64,092 | 56,180 |
| Receivables from third | 43,703 | 35,106 |
| parties | ||
| Payables to third parties (-) | 54,541 | 40,173 |
| Trade working capital | 53,253 | 51,113 |
| Tooling net | 55,492 | 67,270 |
| Contract assets | 15,281 | 14,947 |
| Working capital | 124,026 | 133,330 |
The following table shows the reconciliation of the working capital:
| in € thousand | 31 Mar 23 | 31 Mar 24 |
| Inventories | 116,306 | 99,436 |
| Tools | -50,955 | -39,471 |
| Advanced payment for | -1,259 | -3,785 |
| tools | ||
| Inventories – non-tooling | 64,092 | 56,180 |
| Receivables from third | 93,839 | 91,113 |
| parties | ||
| Trade receivables > 1 year | -46,329 | -49,789 |
| Trade receivables tooling | -3,807 | -6,218 |
| Receivables from third | 43,703 | 35,106 |
| parties | ||
| Trade payables non-tooling | 60,597 | 45,455 |
| Trade payables and | -6,056 | -5,282 |
| services tooling | ||
| Payables to third parties (-) | 54,541 | 40,173 |
| Trade working capital | 53,254 | 51,113 |
| Tooling inventories | 50,955 | 39,471 |
| Current tooling trade | 3,807 | 6,218 |
| receivables | ||
| Non-current tooling trade | 46,329 | 49,789 |
| receivables | ||
| Tooling-related trade | -6,056 | -5,282 |
| payables | ||
| Advance payment tooling | 1,259 | 3,784 |
| Tooling received advanced | -31,562 | -21,110 |
| payment current | ||
| Other provisions | -9,241 | -5,600 |
| Tooling net | 55,491 | 67,270 |
| Contract asset | 15,269 | 14,939 |
| ECL contract asset < 1 year | 12 | 8 |
| Contract asset | 15,281 | 14,947 |
| Working capital | 124,026 | 133,330 |
Total working capital amounted to €133,330 thousand as of 31 March 2024 and thus increased compared to 31 March 2023 with €124,026 thousand. The increase of €9,304 thousand was mainly driven by higher tooling trade receivables and other provisions.
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
99
5.2 Financial instruments
The following table shows the carrying amounts and fair values of the financial instruments broken down by balance sheet class and category:
| in € thousand | 31 Mar 23 | 31 Mar 24 | |||
| Carrying | Carrying | ||||
| Financial assets by classification | Category | amount | Fair value | amount | Fair value |
| Trade receivables | FAAC | 88,711 | 88,711 | 85,798 | 85,798 |
| Trade receivables within the scope of factoring | FAFVTPL | 5,128 | 5,128 | 5,315 | 5,315 |
| agreements | |||||
| Seller Guarantee | FAFVTPL | 1,046 | 1,046 | 911 | 911 |
| Derivatives with positive market values | FAFVTPL | 600 | 600 | 169 | 169 |
| Cash and cash equivalents | FAAC | 165,474 | 165,474 | 141,514 | 141,514 |
| Financial liabilities by classification | |||||
| Trade payables | FLAC | 60,597 | 60,597 | 45,455 | 45,455 |
| Liabilities to banks (non-derivative) | FLAC | 249,3711 | 251,152 | 249,8682 | 252,470 |
| Liabilities to banks (derivative) | FLFVTPL | - | - | 50 | 50 |
| Summary by category | |||||
| FAAC | 259,314 | 260,360 | 227,312 | 227,312 | |
| FAFVTPL | 6,774 | 6,774 | 6,395 | 6,395 | |
| FLAC | 309,968 | 309,968 | 295,323 | 297,925 | |
| FLFVTPL | - | - | 50 | 50 | |
1
Including the Seller Guarantee in the amount of €1,046 thousand.
2
Including the Seller Guarantee in the amount of €911 thousand.
The fair value for liabilities to banks (non-derivative) was calculated by discounted cash flows. The valuation model considers the present value of expected pay- ments, discounted using a risk-adjusted discount rate.
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
100
The following table provides an overview of the clas- sification of financial instruments presented above in the fair value hierarchy:
| 31 Mar 23 | 31 Mar 24 | |||||
| in € thousand | Level 11 | Level 22 | Level 33 | Level 11 | Level 22 | Level 33 |
| Financial assets | ||||||
| Trade receivables within the scope of factoring | - | 5,128 | - | - | 5,315 | - |
| agreements | ||||||
| Seller Guarantee | - | 1,046 | - | - | 911 | - |
| Derivatives with positive market values | - | 600 | - | - | 169 | - |
| Financial liabilities | ||||||
| Derivative financial instruments | - | - | - | - | 50 | - |
1
Measurement of fair value based on quoted prices (non‑adjusted) for these or identical instruments on active markets.
2
Measurement of fair value based on inputs that are either directly (i.e. as prices) or indirectly (i.e. derived from prices) observable on active markets.
3
Measurement of fair value based on inputs that do not represent any observable market data.
There were no transfers between the different levels of the fair value hierarchy in the financial year 2023/24.
Fair value is the price at which an orderly transaction to sell an asset or to transfer a liability would take place between market participants at the measurement date. The following methods and assumptions were used to estimate fair values in the financial year:
The invoice amount of receivables is used as a reason- able approximation for the fair value of trade receiva- bles in conjunction with factoring agreements.
For trade receivables not subject to factoring arrange- ments and for cash and cash equivalents, given their maturity, it is assumed that the carrying amount is a reasonable approximation of fair value due to their predominantly short-term nature. Similarly, for trade payables and other financial liabilities, it is assumed that the carrying amount is the fair value.
The fair values of the derivative financial instruments in the form of forward exchange contracts with banks are determined using the present value method based on market prices.
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
101
The following table shows net gains and losses from financial instruments by category:
| Derivatives | ||||||
| Fair value | Currency | with positive | Seller | |||
| in € thousand | Interest | measurement | translation | Impairment | market values | Guarantee |
| FY 2022/23 | ||||||
| FAAC | 3,361 | - | 468 | 1,269 | - | - |
| FLAC | 7,322 | - | - | - | - | - |
| FLFVTPL | - | - | - | - | - | - |
| FAFVTPL | - | - | - | - | 6001 | 1,046 |
| FY 2023/24 | ||||||
| FAAC | 5,872 | - | 59 | -738 | - | - |
| FLAC | 14,214 | - | - | - | - | - |
| FLFVTPL | - | 50 | - | - | - | - |
| FAFVTPL | - | - | - | - | 1692 | 911 |
1
In addition to the €600 thousand derivatives with positive market values reported as of 31 March 2023, €7,075 thousand in realised losses were generated during the financial year 2022/23.
2
In addition to the €169 thousand derivatives with positive market values reported as of 31 March 2024, €237 thousand in realised profits were generated during the financial year 2023/24.
Interest income and expense on financial assets and liabilities accounted for at amortised cost is included in interest income on financial assets and in interest expense on financial debt (refer to section 4.7).
5.3 Share-based payments
The Management Board members of Novem Group S.A. participate in a long-term incentive (Performance Share Plan) in the form of virtual shares. The Perfor- mance Share Plan is classified according to IFRS 2 as cash-settled share-based payment.
The Performance Share Plan is granted in annual tranches of virtual shares with a respective perfor- mance period of four years. Deviating from this, the per- formance period of the tranche 2021 started on the day of the listing of Novem Group S.A. (IPO) and will end on 31 March 2025. The second tranche (tranche 2022) started at the beginning of financial year 2022/23 and will end on 31 March 2026. The third tranche (tranche 2023) started at the beginning of financial year 2023/24 and will end on 31 March 2027.
The conditionally granted number of virtual shares at the beginning of the performance period is calculated for each tranche by dividing a contractually defined individual target amount by the start share price of the
share of Novem Group S.A. (arithmetic mean of the closing prices of the stock during the last 60 trading days prior to the start of the performance period).
The final number of virtual shares is determined by mul- tiplying the total target achievement by the condition- ally granted number of virtual shares. The total target achievement depends on the target achievement of the two financial figures relative Total Shareholder Return (70% weighting) and EBIT margin (30% weighting). The target achievement of relative Total Shareholder Return and EBIT margin can range between 0% and 150%.
In order to determine the payout in cash, the final num- ber of virtual shares is multiplied by the end share price of the share of Novem Group S.A. (arithmetic mean of the closing prices of the stock during the last 60 trading days prior to the end of the performance period) plus the sum of the dividends disbursed during the perfor- mance period. The payout is capped at 200% of the contractually defined individual target amount.
The first tranche of the Performance Share Plan was allocated to Management Board members of Novem Group S.A. for the financial year 2021/22 and the num- ber of conditionally granted virtual shares amounted to 40,826, corresponding to a provision of €108 thousand as of 31 March 2024 (31 March 2023: €170 thousand).
The second tranche was awarded for the financial year 2022/23 comprising 60,384 conditionally granted vir- tual shares, resulting in a provision of €254 thousand as of 31 March 2024 (31 March 2023: €140 thousand).
The third tranche was awarded for the financial year 2023/24 with a total number of 83,287 conditionally granted virtual shares, corresponding to a provision of €268 thousand as of 31 March 2024 (31 March 2023: €0).
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
102
These provisions have been included in non-current deferred liabilities (refer to section 3.16).
In total, the expenses for financial year 2023/24 amounted to €319 thousand (PY: €241 thousand).
The fair value of the Performance Share Plan to calcu- late expenses and provisions was determined by using a Monte-Carlo-Simulation. The expected volatility has been based on the average of the median volatility of SDAX companies (term-congruent) and the historical volatility of Novem for the period available. The fair value and the inputs used in the assessment of the fair value as of 31 March 2024 were as follows:
| Valuation as of | Tranche | Tranche | Tranche |
| 31 March 2024 | 2021 | 2022 | 2023 |
| Performance | 19 Jul 21 – | 1 Apr 22 – | 1 Apr 23 – |
| period | 31 Mar 25 | 31 Mar 26 | 31 Mar 27 |
| Start share | |||
| price Novem | €16.46 | €11.25 | €9.06 |
| Group S.A. | |||
| Remaining | |||
| duration of | 1.0 year | 2.0 years | 3.0 years |
| performance | |||
| period | |||
| Expected | 41.3% | 49.7% | 43.1% |
| annual volatility | |||
| Risk-free annual | 3.4% | 2.8% | 2.5% |
| interest rate | |||
| Expected target | |||
| achievement | |||
| for internal | 100% | 100% | 100% |
| target EBIT | |||
| margin | |||
| Fair value per | €2.96 | €5.27 | €5.10 |
| virtual share |
For comparative purposes, the fair value and inputs used in the assessment of the fair value as of 31 March 2023 were as follows:
| Valuation as of | Tranche | Tranche |
| 31 March 2023 | 2021 | 2022 |
| Performance period | 19 Jul 21 – | 1 Apr 22 – |
| 31 Mar 25 | 31 Mar 26 | |
| Start share price | €16.46 | €11.25 |
| Novem Group S.A. | ||
| Remaining duration of | 2.0 years | 3.0 years |
| performance period | ||
| Expected annual volatility | 45.8% | 47.6% |
| Risk-free annual interest rate | 2.7% | 2.5% |
| Expected target achievement | ||
| for internal target EBIT | 100% | 100% |
| margin | ||
| Fair value per virtual share | €8.82 | €8.85 |
5.4 Risk reporting
Management of financial risks
The Group is exposed to a wide range of risks and oppor- tunities within the scope of its business activities. Its business operations are focused on seizing opportuni- ties and identifying and controlling the related risks early on. Group-wide risk management aims to identify risks based on operations as early as possible to take appro- priate and effective steps to manage or avoid these risks. The Group is exposed to the following risks in particular:
•
liquidity risks
•
credit risk
•
financial market risks (exchange rate risks and interest rate risks)
The Group’s management has overall responsibility for establishing and overseeing the Group’s risk manage- ment system. The Finance department is responsible for developing and monitoring the risk management system and reports regularly on these matters to management.
The core of risk management is an internal reporting system that continually optimises the monitoring of all business-relevant key data and is adapted to current challenges. In addition, business opportunities and risks are recorded, analysed and evaluated in a multi-tiered planning, information and control process, allowing changes to the business environment and deviations from plan to be recognised early and countermeasures introduced in advance. Additionally, important Alternative Performance Measures (e.g. order intake, revenue, Adj. EBIT, EBITDA, staffing level, fluctuation and quality data) are reported monthly and evaluated by management.
Liquidity risks
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. Liquid- ity risks arise from current liabilities due to long-term rental agreements, interest and repayments.
Funds are largely generated from operations and used to cover financing needs.
To ensure and monitor liquidity, the Corporate Treasury department permanently tracks, optimises and docu- ments the current cash flows of all entities and has established a rolling 12‑month liquidity planning. The planning takes into account the maturities of financial investments and financial assets (e.g. receivables and other financial assets) as well as expected cash flows from the operating activities. Both the liquidity status (weekly) and the liquidity plan (monthly) are reported to
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
103
management, and if this results in changes in financing needs, measures are initiated at an early stage. This approach allows the entire Group’s needs and those of individual group companies to be addressed optimally.
The Group ensures compliance with the financing require- ments of its operating business and with financial obliga- tions by means of cash pooling agreements, intragroup loans and credit lines based on the respective legal and tax regulations. As of 31 March 2024, the Group had a total of €60,000 thousand (31 March 2023: €60,000 thousand) in unused revolving credit facility from the term loan agreement to ensure liquidity. Additionally, the Group possessed a €4,000 thousand credit line drawn in the amount of €3,416 thousand as a guarantee facility. Furthermore, Novem Car Interiors (China) Co., Ltd. had a local unused uncommitted credit line of €13,027 thou- sand (¥100,000 thousand) as of 31 March 2024.
The following overview shows the contractually agreed terms of financial liabilities, which represent expected future cash out‑flows:
| Less than one | Between one and | More than five | Financial | |
| in € thousand | year | five years | years | liabilities |
| As of 31 Mar 23 | ||||
| Liabilities to banks (non-derivative) | 12,594 | 274,001 | - | 286,595 |
| Liabilities to banks (derivative) | - | - | - | - |
| Trade payables | 60,597 | - | - | 60,597 |
| Lease liabilities | 7,938 | 20,482 | 10,661 | 39,081 |
| As of 31 Mar 24 | ||||
| Liabilities to banks (non-derivative) | 13,461 | 263,936 | - | 277,397 |
| Liabilities to banks (derivative) | 50 | - | - | 50 |
| Trade payables | 45,447 | 8 | - | 45,455 |
| Lease liabilities | 7,295 | 20,514 | 28,715 | 56,524 |
The contractually agreed cash flows related to non‑ derivative banks include a variable interest as well as the repayment amount of the loan. The expected cash flows for derivative liabilities to banks are in the form of forward exchange contracts and incorporate their negative value as of reporting date. Based on the cur- rent state of knowledge, the cash out‑flows presented are not expected to occur significantly earlier or to considerably deviate in amount from the values shown in the table.
Credit risk
Credit risk is the risk of financial losses if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Credit risk arises mainly from trade receivables, with the maximum credit risk corresponding to the carrying amount of the financial assets. Impairment losses are also recorded for con- tract assets.
The following tables give information on the carrying amounts of trade receivables and contract assets aris- ing from contracts with customers:
| in € thousand | 31 Mar 23 | 31 Mar 24 |
| Trade receivables | 93,839 | 91,113 |
| Contract assets | 15,281 | 14,947 |
Accumulated impairment losses on trade receivables and contract assets were as follows:
| in € thousand | FY 2022/23 | FY 2023/24 |
| Trade receivables | 1,609 | 336 |
| Contract assets | 12 | 8 |
| Impairment loss | 1,621 | 344 |
Trade receivables
Credit risk relates in particular to a receivable being repaid late, partially or not at all. The Group uses a number of measures to minimise this risk. As part of receivables management, the Group continuously monitors open positions, conducts maturity analyses and contacts the customer at an early stage if pay- ment delays emerge. The highest priority is placed on monitoring early indicators. On the statements of financial position, the residual risk for trade receivables is accounted for by calculating expected credit losses. In general, the Group’s exposure to credit risk is influ- enced mainly by the individual characteristics of each customer. Trade receivables are spread essentially over the major manufacturers in the automotive industry, which, due to solid sector performance in Americas, Europe and Asia, is assessed as representing relatively low default risk for the Group. This assessment is
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
104
based primarily on long-standing business relation- ships with most customers and the ratings of the major rating agencies. Historical default rates for these receivables are extremely low. In the event that one of the three largest customer defaults (currently assessed as unlikely), credit risk arising from open receivables as of 31 March 2024 would be between €3,934 thousand and €19,113 thousand (31 March 2023: €5,688 thou- sand and €14,079 thousand).
Expected credit losses for trade receivables recognised at amortised cost are measured based on the lifetime expected credit losses. This involves the receivables being grouped according to the individual customers. For these customers, a one‑year default probability is determined via a credit agency. Expected credit losses per customer are calculated ultimately as the product of the gross carrying amount of the receivable, the customer’s probability of default (maturity-adjusted as required) and an appropriate insolvency ratio.
The gross carrying amounts and related probabilities of default of customers for trade receivables measured at amortised cost were as follows:
| FY 2022/23 | FY 2023/24 | |||
| in € thousand | Gross carrying amount | Probability of default | Gross carrying amount | Probability of default |
| 59,8191 | < 1% | 77,7711 | < 1% | |
| 1,400 | 1% < x < 2% | 5,682 | 1% < x < 2% | |
| 20,751 | 2% < x < 5% | 5,368 | 2% < x < 5% | |
| 13,478 | > 5% | 2,628 | > 5% | |
| Trade receivables | 95,448 | 91,449 | ||
1
Thereof trade receivables within the scope of factoring agreements amounting to €5,315 thousand (31 March 2023: €5,128 thousand) were measured at fair value through profit or loss. No expected credit losses were recognised for this portion. Thereof Seller Guarantee within the scope of factoring agreement amounting to €911 thousand (31 March 2023: €1,046 thousand). No expected credit losses were recognised for this portion.
Contract assets
As of 31 March 2024, contract assets were recognised amounting to €14,947 thousand (31 March 2023: €13,689 thousand). These assets have arisen with the right to consideration acquired from contractual obliga- tions already satisfied. Contract assets are reclassified to trade receivables as soon as an unconditional right to payment arises, which is obtained by invoicing the customer for the quantities actually delivered.
Expected credit losses for contract assets are meas- ured using the lifetime expected credit losses. This involves the contract assets being grouped according to the individual customers. For these customers, a one-year default probability is determined via a credit agency. Expected credit losses per customer are cal- culated ultimately as the product of the gross carrying amount of the contract asset, the customer’s probabil- ity of default (maturity‑adjusted as required) and an appropriate insolvency ratio.
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
105
The gross carrying amounts and related probabilities of default of customers for contract assets were as follows:
| FY 2022/23 | FY 2023/24 | |||
| in € thousand | Gross carrying amount | Probability of default | Gross carrying amount | Probability of default |
| 10,746 | < 1% | 13,416 | < 1% | |
| 1 | 1% < x < 2% | 2 | 1% < x < 2% | |
| 2,792 | 2% < x < 5% | 1,341 | 2% < x < 5% | |
| 150 | > 5% | - | > 5% | |
| Contract assets | 13,689 | 14,947 | ||
Cash and cash equivalents
As of 31 March 2024, the Group had cash and cash equivalents of €141,514 thousand (31 March 2023: €165,474 thousand). Thus, this amount represents the maximum exposure to credit risk in terms of these assets. The cash and cash equivalents are held at banks with Fitch ratings of BBB to AAA. For reasons of materiality, no expected credit losses were recognised for cash and cash equivalents by the Group. Moreover, external ratings indicate that these assets have only low credit risk.
Derivatives
Derivatives are concluded with banks with a rating from Fitch Ratings of at least BBB+. As of 31 March 2024, derivatives in the form of forward exchange contracts had a positive market value totalling €169 thousand as well as negative market value totalling €50 thousand. In comparison to the prior financial year, the market value from derivatives was positive and amounted to €600 thousand.
Finance market risks
Finance market risks are the risks of changes in market prices, such as exchange rates or interest rates, that affect the Group’s earnings or the value of the finan- cial instruments it holds. The objective of managing finance market risks is to manage and control market risk exposure within an acceptable range while optimis- ing income.
Exchange rate risk
Foreign currency risks arise when Group companies settle transactions in currencies other than their func- tional currency. Through its subsidiaries, the Group has assets and liabilities outside the Eurozone. These assets and liabilities are denominated in local currencies. If the value of net assets is translated into Euro, exchange rate fluctuations from one period to the next result in changes to these net asset values. Accordingly, the Treasury department undertakes actions to minimise the resulting foreign currency risks. The Group mainly has foreign currency exposure to Chinese Renminbi (CNY), Czech Koruna (CZK), Honduran Lempira (HNL),
Mexican Peso (MXN) and US Dollar (USD), which arise from trade receivables/payables and from procurement. The Group counters its foreign currency risks through natural hedging, i.e. by raising the purchase volume in the foreign currency area or increasing local produc- tion. To further secure operating activities, the option of group netting foreign currency exposures within the Group is used. A further measure taken is to manage the volume of excess liquidity arising from the respec- tive hedged items in foreign currency based on incre- mental FX spot transactions within a prescribed scope.
A sharp appreciation of the Euro against currencies of other exporting countries could, however, negatively impact the Group’s competitiveness.
A reasonably possible change in exchange rates would influence consolidated earnings due to the fair values of the monetary assets and liabilities. The following table is based on the exchange rates determined at the reporting date. It illustrates the effects of appreciation or deprecia- tion of the main currencies to be considered (CNY, CZK, MXN, USD) of +10% or -10% against the respective func- tional currency. The overall result for each currency thus includes effects calculated based on the appreciation or depreciation of the Euro, where the functional currency corresponds to the currency stated in the table.
| in € thousand | 31 Mar 23 | 31 Mar 24 | ||
| Changes | ||||
| in foreign | +10% | -10% | +10% | -10% |
| exchange rates | ||||
| (gain) | ||||
| CNY | -126 | 122 | -106 | 176 |
| CZK | 31 | -31 | -4 | 188 |
| MXN | -522 | 522 | -769 | 500 |
| USD | 9,170 | -10,535 | 3,757 | -2,497 |
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
106
To further reduce foreign currency risk from US Dollar exposures, the Group concluded a number of forward exchange contracts with UniCredit and JP Morgan. Using these derivative instruments, the significant part of the forecast net foreign currency exposures for the respective next 12 months is hedged in US Dollar. In this case, they are not presented as hedges: instead, the derivatives are measured at fair value through profit or loss.
Interest rate risks
Net finance income/costs and financial performance can be positively influenced by favourable interest rate and exchange rate developments. To allow prompt reactions to positive developments, the financial mar- kets are monitored continuously.
As of 31 March 2024, the Group’s interest-bearing financial instruments can be aggregated as follows with regard to the basic structure of the respective interest rate:
| in € thousand | 31 Mar 23 | 31 Mar 24 |
| Variable rate instruments | 250,000 | 250,000 |
| Financial liabilities | ||
| Interest rate exposure | 250,000 | 250,000 |
As of 31 March 2024, financial liabilities with fixed rates amounted to zero. Interest rate risk exists for the syndi- cated loan as it is linked to the 3-month Euribor. In view of the declining inflation rate and the outlook by the European Central Bank (ECB), it is to be expected that the interest rate will decrease in the next 12 months.
Further moderate interest rate risks exist for pension obligations and the factoring program. The factoring
program depends on the 3-month Euribor relating to factoring fees for EUR‑receivables and the SOFR, which represents the base rate for factoring fees resulting from USD-receivables. A 1% change in the reference interest rates would have no material impact regarding factoring fees.
The interest rate risk regarding our pension obligations is also manageable as their share of total assets only amounts to approximately 5%.
5.5 Capital management
The objective of the Novem Group’s capital manage- ment is to ensure the ability to continue as a going con- cern and to maintain a stable capital case to maintain investor, creditor and market confidence. Opportunities to repay and refinance liabilities and finance future business activities and future investments depend on how the total operating revenue of the Group develops and its ability to obtain sufficient liquidity. Due to the business model and the operations on global markets, the Group generates predictable and sustainable cash flows under normal business conditions. The Group therefore manages its capital structure and makes necessary adjustments based on the prevailing busi- ness conditions.
The Group has a total of €60,000 thousand in unused revolving credit facility. Additionally, the Group pos- sesses a €4,000 thousand credit line, which was drawn in the amount of €3,416 thousand as a guarantee facil- ity. Furthermore, Novem Car Interiors (China) Co., Ltd. had a local unused uncommitted credit line of €13,027 thousand (¥100,000 thousand) as of 31 March 2024.
For monitoring the capital structure, the Group utilises, amongst others, the ratio of net financial debt and Adj. EBITDA, which is also used as a covenant in the senior facilities agreement. Regular quarterly monitoring of the financial ratios has been implemented. The Group does not expect a breach of this covenant.
In order to maintain or adjust the capital structure, the Group may increase or decrease the dividends, issue new shares or return capital to the shareholders, and raise additional or reduce parts of the outstanding debt.
5.6 Consolidated statement of cash flows
The statement of cash flows is prepared in accordance with IAS 7 and is broken down into cash flows from operating, investing and financing activities. In‑flows and out‑flows from operating activities are presented in accordance with the indirect method and those from investing and financing activities by the direct method.
Cash held comprises current available funds and cash equivalents less bank liabilities due on demand (cur- rent account liabilities). With profit for the period as the starting point, the non-cash expenses and changes in net working capital are accounted for to calculate cash flows from operating activities. Income tax payments of €24,488 thousand (PY: €8,721 thousand) are also recognised in cash flows from operating activities.
Investing activities comprise payments to acquire intangible assets, property, plant and equipment and financial assets as well as proceeds from the sale of intangible assets, property, plant and equipment and financial assets. Financing activities include the cash paid for lease liabilities and dividends. Interest
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
107
payments of €16,898 thousand (PY: €8,533 thousand) are also reflected in cash out‑flows from financing activities.
The table below shows the details of changes in the Group’s financial liabilities, which are classified in the Group’s consolidated statement of cash flows as cash flows from financing activities:
| Liabilities | Lease | ||
| in € thousand | to banks | liabilities | Dividends |
| As of 01 Apr 22 | 249,087 | 34,857 | - |
| Changes from | |||
| financing cash | 421 | -9,797 | -17,212 |
| flows | |||
| Effect of changes | |||
| in foreign | - | 152 | - |
| exchange rates | |||
| Other changes | 2421 | 13,869 | - |
| As of 31 Mar 23 | 249,3711 | 39,081 | -17,212 |
| As of 01 Apr 23 | 249,371 | 39,081 | - |
| Changes from | |||
| financing cash | 98 | -11,370 | -49,485 |
| flows | |||
| Effect of changes | |||
| in foreign | - | -425 | - |
| exchange rates | |||
| Other changes | 450 | 29,238 | - |
| As of 31 Mar 24 | 249,919 | 56,524 | -49,485 |
1
Adjusted according to IAS 8.42 as the disclosure of the changes was different.
5.7 Operating segments
Segment information is provided on the basis of the Group’s internal reporting in order to assess the type and financial impact of the Group’s business activities as well as the economic environment in which it oper- ates. Transactions between the operating segments based on transfer prices are determined according to arm’s length conditions typical for the market.
The Group is structured into divisions, with business activities organised over the geographical sales regions of Europe, Americas and Asia.
The Chief Operation Decision Maker (CODM) makes the assessment. The CODM within the meaning of IFRS 8 is the management of the parent company, as it regu- larly reviews the segments in terms of their profitability and resource allocation using internal management reporting.
The management of the parent company evaluates the performance of the operating segments based on a measure for segment earnings (performance indica- tor) designated as Adj. EBIT, as this provides the most relevant information for assessing the earnings of spe- cific segments in relation to other companies operating in these sectors.
Adj. EBIT is EBIT adjusted by management primarily for business transactions of a one-off and non-recurring nature. The accounting policies for segment reporting are based on the IFRSs applied in these consolidated financial statements.
Segment reporting as determined by management is disclosed for the segments Europe, Americas and Asia. There are no further segments within the Group.
| Reportable segments | Business activities |
| Production, processing and | |
| Europe | sale of high‑quality trims and |
| decorative functional elements | |
| in vehicle interior | |
| Production, processing and | |
| Americas | sale of high‑quality trims and |
| decorative functional elements | |
| in vehicle interior | |
| Production, processing and | |
| Asia | sale of high‑quality trims and |
| decorative functional elements | |
| in vehicle interior |
5.8 Reporting by region
The Group is organised and managed at regional level. The three reportable operating segments of the Group are Europe, Americas and Asia. The product portfolio is broadly similar in these three regional segments.
| in € thousand | Europe | Americas | Asia |
| FY 2022/23 | |||
| Revenue | |||
| generated from | 332,932 | 264,091 | 103,280 |
| third parties | |||
| FY 2023/24 | |||
| Revenue | |||
| generated from | 287,039 | 271,906 | 76,564 |
| third parties |
Breakdown of revenue according to Novem company location (i.e. from the invoiced by perspective)
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
108
In the financial year 2023/24, between 17.4% and 59.1% (PY: 28.4% and 47.0%) in the three regions were attrib- utable to the respective most significant customers.
Overall, Novem generated revenue of €203,820 thou- sand (PY: €240,267 thousand) and €190,242 thousand (PY: €233,010 thousand) with two major customers in all segments.
Revenue was spread over the individual segments according to surfaces as follows:
| in € thousand | Europe | Americas | Asia |
| FY 2022/23 | |||
| Wood | 226,558 | 204,538 | 89,804 |
| Aluminium | 71,347 | 51,992 | 12,265 |
| Premium | 35,027 | 7,561 | 1,211 |
| synthetics | |||
| FY 2023/24 | |||
| Wood | 205,445 | 237,786 | 69,236 |
| Aluminium | 49,751 | 30,530 | 7,298 |
| Premium | 31,843 | 3,590 | 30 |
| synthetics |
Revenue was distributed among the individual seg- ments according to business areas as follows:
| in € thousand | Europe | Americas | Asia |
| FY 2022/23 | |||
| Revenue Series | 280,485 | 249,473 | 88,269 |
| Revenue Tooling | 52,447 | 14,619 | 15,011 |
| FY 2023/24 | |||
| Revenue Series | 226,884 | 260,304 | 65,865 |
| Revenue Tooling | 60,154 | 11,603 | 10,699 |
The breakdown of revenue between the individual seg- ments according to the category of revenue recognition was as follows:
| in € thousand | Europe | Americas | Asia |
| FY 2022/23 | |||
| Goods and servi- | |||
| ces transferred | 281,786 | 250,557 | 88,432 |
| over time | |||
| Goods and servi- | |||
| ces transferred at | 51,146 | 13,535 | 14,848 |
| a point in time | |||
| FY 2023/24 | |||
| Goods and servi- | |||
| ces transferred | 229,719 | 261,892 | 66,051 |
| over time | |||
| Goods and servi- | |||
| ces transferred at | 57,320 | 10,014 | 10,513 |
| a point in time |
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
109
5.9 Reconciliation of information on reportable
segments
The following table shows further information on the Adj. EBIT performance indicator, which is used to assess the performance of the operating segments:
Adjustments
| Europe | Americas | Asia | ||||
| in € thousand | FY 2022/23 | FY 2023/24 | FY 2022/23 | FY 2023/24 | FY 2022/23 | FY 2023/24 |
| Restructuring | - | 8,888 | - | - | - | - |
| Covid-19 costs | -12 | - | 59 | - | 289 | - |
| Others | 825 | 647 | 114 | 189 | - | - |
| Exceptional items | 813 | 647 | 173 | 189 | 289 | - |
| Discontinued operations | - | - | - | - | - | - |
| Adjustments | 813 | 9,535 | 173 | 189 | 289 | - |
For both financial years 2022/23 and 2023/24, the most significant effects were related to Europe. The financial year 2023/24 contained €8,888 thousand restructuring costs (PY: €0), €140 thousand related to severance payments (PY: €520 thousand), €455 thousand project costs (PY: €295 thousand), €2 thou- sand of accelerated depreciation (PY: €10 thousand), as well as €50 thousand costs caused by the flood in
Slovenia. Adjustments in the financial year 2023/24 were significantly higher than last year, reflecting the €5,336 thousand restructuring costs resulting from the plant closure in Bergamo (Italy). Furthermore, €3,552 thousand restructuring costs were incurred at the plant Vorbach, mainly attributable to personnel expenses and costs for a transfer company.
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
110
Segment reporting
| Europe | Americas | Asia | Total segments | Other/consolidation | Group | |||||||
| in € thousand | FY 2022/23 | FY 2023/24 | FY 2022/23 | FY 2023/24 | FY 2022/23 | FY 2023/24 | FY 2022/23 | FY 2023/24 | FY 2022/23 | FY 2023/24 | FY 2022/23 | FY 2023/24 |
| External revenue | 332,932 | 287,039 | 264,091 | 271,906 | 103,281 | 76,564 | 700,304 | 635,509 | - | - | 700,304 | 635,509 |
| Revenue between | 51,484 | 44,423 | 74,775 | 66,524 | 18,733 | 15,646 | 144,992 | 126,593 | -144,992 | -126,593 | - | - |
| segments | ||||||||||||
| Total revenue | 384,416 | 331,462 | 338,866 | 338,430 | 122,014 | 92,210 | 845,296 | 762,102 | -144,992 | -126,593 | 700,304 | 635,509 |
| Adj. EBITDA | 38,551 | 22,016 | 56,062 | 67,766 | 19,571 | 12,222 | 114,184 | 102,004 | - | - | 114,184 | 102,004 |
| Depreciation and | ||||||||||||
| amortisation | 15,454 | 16,192 | 11,887 | 11,608 | 5,116 | 5,153 | 32,457 | 32,953 | - | - | 32,457 | 32,953 |
| Adj. EBIT | 23,097 | 5,824 | 44,175 | 56,158 | 14,455 | 7,069 | 81,727 | 69,051 | - | - | 81,727 | 69,051 |
| Adjustments | 813 | 9,535 | 173 | 189 | 289 | - | 1,275 | 9,724 | - | - | 1,275 | 9,724 |
| Operating Result (EBIT) | 22,284 | -3,711 | 44,002 | 55,969 | 14,166 | 7,069 | 80,452 | 59,327 | - | - | 80,452 | 59,327 |
The amounts shown above in the Other/consolida- tion column include the elimination of transactions between the segments and specific items at group level that relate to the Group as a whole and cannot be allocated to the segments.
Within the segment reporting in the three regions of Europe, Americas and Asia and in relation to the recog- nition of contract assets and associated revenue over time according to IFRS 15, €2,405 thousand related to Europe, €8,965 thousand to the Americas region and €1,032 thousand to Asia (PY: €3,422 thousand to Europe, €8,010 thousand to Americas and €2,450 thousand to Asia).
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
111
Geographical information
Revenue was spread over the different locations as follows:
| in € thousand | FY 2022/23 | FY 2023/24 |
| Czech Republic | 204 | 303 |
| Germany | 313,494 | 276,086 |
| Italy | 19,154 | 10,178 |
| Slovenia | 80 | 472 |
| Europe | 332,932 | 287,039 |
| Honduras | 7 | 1 |
| Mexico | 436 | 368 |
| USA | 263,648 | 271,537 |
| Americas | 264,091 | 271,906 |
| China | 103,280 | 76,564 |
| Asia | 103,280 | 76,564 |
| Total | 700,304 | 635,509 |
Breakdown of revenue according to Novem company location (i.e. from the invoiced by perspective)
The table below provides information on the breakdown of non‑current assets by Novem location:
| in € thousand | FY 2022/23 | FY 2023/24 |
| Czech Republic | 24,565 | 21,993 |
| Germany | 45,140 | 38,866 |
| Italy | 952 | 1,041 |
| Luxembourg | 124 | 225 |
| Slovenia | 30,316 | 27,382 |
| Europe | 101,097 | 89,507 |
| Honduras | 8,565 | 7,764 |
| Mexico | 37,746 | 59,854 |
| USA | 7,132 | 6,273 |
| Americas | 53,443 | 73,891 |
| China | 33,005 | 33,346 |
| Asia | 33,005 | 33,346 |
| Total | 187,545 | 196,744 |
Non-current assets consist of intangible assets and property, plant and equipment.
Reconciliation of Adj. EBITDA to earnings before taxes
The following table shows the reconciliation of Adj. EBIT to EBIT and to earnings before taxes for the financial years 2022/23 and 2023/24:
| in € thousand | FY 2022/23 | FY 2023/24 |
| Adj. EBITDA | 114,184 | 102,004 |
| Depreciation and | 32,457 | 32,953 |
| amortisation | ||
| Adj. EBIT | 81,727 | 69,051 |
| Adjustments | 1,275 | 9,724 |
| EBIT | 80,452 | 59,327 |
| Finance income | 3,555 | 7,376 |
| Finance costs | 13,088 | 19,947 |
| Earnings before taxes | 70,919 | 46,756 |
Adj. EBIT includes transactions with a one-off and non- recurring nature that occurred in the ordinary course of business.
5.10 Leases
In the ordinary business, the Novem Group is the les- see in different leases of land and buildings as well as parts of operating and office equipment. The lease term for land and buildings is typically between one and 19 years. Leases of technical equipment and machinery generally have a term of three years. Leases of operating and office equipment usually have a term of between one and 19 years. The Group applied the practical expedient in IFRS 16.6 by not accounting for short-term leases (leases with a lease term of less than
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
112
12 months) and low-value assets (underlying assets <5,000€/$, e.g. printers and copiers) as right‑of‑use assets. For all leases, respective lease term options (e.g. renewal options) are considered. The majority of the current options to extend or terminate the leases can only be exercised by the Novem Group and not by the respective lessor. The future undiscounted lease payments from lease term options not yet exercised amounted to €43,124 thousand.
Some leases of land and buildings provide for addi- tional lease payments based on a change in the local price indices.
Future cash out‑flow from variable lease payments not incorporated into the measurement of the lease liability amounted to €3,010 thousand (31 March 2023: €2,361 thousand). These mainly related to leases of buildings.
There are no leases in which the Novem Group S.A. acts as a lessor. Information on leases in which the Group is the lessee is presented below.
Right-of-use assets
Amounts recognised in profit and loss and cash flows
| in € thousand | FY 2022/23 | FY 2023/24 |
| Interest expense for lease | 546 | 1,165 |
| liabilities | ||
| Short-term lease expenses | 1,771 | 1,362 |
| Lease expenses for low value | ||
| assets except short-term | 1,180 | 1,132 |
| leases for low value assets | ||
| Expense for variable lease | ||
| payments not included in | 296 | 341 |
| the measurement of lease | ||
| liabilities | ||
| Total cash out‑flow for leases | 12,817 | 12,708 |
As of 31 March 2024, the lease liabilities amounted to €56,524 thousand (31 March 2023: €39,081 thousand). Thereof €7,295 thousand are due within the next finan- cial year 2024/25.
| Technical | Other equipment, | |||
| Land and | equipment and | operating and | Right-of-use | |
| in € thousand | buildings | machinery | office equipment | assets |
| Depreciation FY 2022/23 | 5,937 | 12 | 3,032 | 8,982 |
| Additions to right-of-use assets | 11,076 | - | 5,035 | 16,112 |
| Carrying amount as of 31 Mar 23 | 32,757 | - | 6,160 | 38,917 |
| Depreciation FY 2023/24 | 6,805 | 7 | 3,128 | 9,940 |
| Additions to right-of-use assets | 25,871 | 33 | 2,584 | 28,488 |
| Carrying amount as of 31 Mar 24 | 52,338 | 26 | 5,543 | 57,907 |
5.11 Other financial liabilities and contingent
liabilities
There were no significant other financial obligations occurring after the reporting date. There were only financial obligations within the usual range resulting from the purchase commitment of €35,760 thousand on 31 March 2024. The total amount included tool- ing business costs of €26,183 thousand and €9,577 thousand for series business (PY: Tooling €15,620 thousand and Series €13,330 thousand).
Furthermore, tax risks are also included in contingent liabilities. The Group might be subject to tax risks attrib- utable to previous tax assessment periods and might be subject to unanticipated tax expenses in relation to previous tax assessment periods, which have not yet been subject to a tax audit or are currently subject to a tax audit. It cannot be ruled out that tax authorities may apply a different approach in ongoing and/or future tax audits from the one adopted by the Group, which may lead to an additional tax expense and/or payment. This could have a material and adverse effect on the busi- ness, financial condition and results of operations.
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
113
5.12 Related party transactions
Holding company
The direct holding company of the Group is
Rokoko
Automotive
Holdings (Jersey) Limited
, Jersey . During 2023/24, there were no transactions or outstanding balances with Rokoko Automotive Holdings (Jersey) Limited, Jersey.
Related parties
According to IAS 24, the Group has to disclose specific information about transactions between the Group and other related parties. Balances and transactions between the Group and its fully consolidated subsidiar- ies, which constitute related parties within the mean- ing of IAS 24, have been eliminated in the course of consolidation and are therefore not commented on in this note. The consolidated financial statements do not include any associated companies that are accounted for using the equity method.
In the financial year 2023/24, no transactions occurred with direct and indirect shareholders.
Related party transactions with other companies occurred in financial year 2023/24 regarding the purchase of components such as base frames. The related party belongs to the same group of companies pursuant to IAS 24.9b (i). The transaction volume was €144 thousand (PY: €118 thousand). No outstanding balance was recorded as of 31 March 2024 (31 March 2023: €16 thousand).
All outstanding balances and transactions with this related party are priced on an arm’s length basis and
are to be settled in cash within two months. None of the balances are secured. No guarantees have been given or received.
For the remuneration of and other transactions with key management personnel constitute related party transactions pursuant to IAS 24, please refer to sec- tion 5.3, section 5.13 and the Remuneration Report. The Remuneration Report will be published separately from this Annual Report on the Novem IR website on 19 July 2024.
5.13 Remuneration of key management
personnel
The key management personnel are the members of the Management and Supervisory Board of Novem Group S.A. The total remuneration paid to the Man- agement Board members is calculated as the sum of short‑term benefits and pensions, as well as the fair value of the share‑based Performance Share Plan. For further information regarding the share-based Perfor- mance Share Plan, please refer to section 5.3.
The Group is obliged by Luxembourg Law to draw up a Remuneration Policy as well as a Remuneration Report for the members of the Supervisory Board and Management Board of Novem Group S.A. The Remuneration Policy and Remuneration Report are prepared in accordance with Art. 7bis and Art. 7ter of the Luxembourg Law of 24 May 2011 on the exercise of certain rights of shareholders in listed companies, as amended.
In the reporting period, the total remuneration of the Management Board, including those members who have left the Company during the financial year, was as follows:
| in € thousand | FY 2022/23 | FY 2023/24 |
| Short-term employee | 2,259 | 2,055 |
| benefits | ||
| Share-based payments | 241 | 319 |
| Remuneration | 2,500 | 2,374 |
The present value of the pension entitlements of the Management Board amounted to €1,907 thousand (31 March 2023: €3,946 thousand). The defined ben- efit obligation of all pension commitments to former members of the Management Board amounted to €2,742 thousand (31 March 2023: €2,352 thousand).
The total remuneration paid to the Supervisory Board members, classified as short‑term benefits, is calcu- lated as the sum of fixed and committee compensation. For this period, the total remuneration for the members of the Supervisory Board amounted to €320 thousand (PY: €320 thousand).
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
114
5.14 Auditors’ fees
The following fees for KPMG Audit S.à r.l., Luxembourg, and other member firms of the KPMG network relate only to services directly connected with the parent company Novem Group S.A. and its subsidiaries:
| in € thousand | FY 2022/23 | FY 2023/24 |
| Audit fees | 744 | 838 |
| Thereof: KPMG Audit S.à r.l. | 190 | 238 |
| Other fees | 109 | 61 |
| Thereof: KPMG Audit S.à r.l. | - | - |
| Fees | 853 | 899 |
5.15 Subsequent events
There were no events or developments that could have materially affected the measurement and presentation of the Group’s assets and liabilities as of 31 March 2024.
CONTENTS
1
TO OUR
SHAREHOLDERS
2
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
115
RESPONSIBILITY STATEMENT
CONTENTS
We, Markus Wittmann (Chief Executive Officer), Dr.
Johannes Burtscher (Chief Financial Officer), Maria
Eichinger (Manager Consolidation) and Mathias Rieger
(Director Internal Audit), confirm, to the best of our
knowledge, that the consolidated financial statements
which have been prepared in accordance with the Inter-
national Financial Reporting Standards as adopted by
1
the European Union, give a true and fair view of the
assets, liabilities, financial position and profit or loss of
the Novem Group S.A. and the undertakings included
TO OUR
in the consolidation taken as a whole and that the
SHAREHOLDERS
Group Management Report includes a fair review of the
2
development and performance of the business and the
position of the Novem Group S.A. and the undertakings
included in the consolidation taken as a whole, together
NON-FINANCIAL
with a description of the principal risks and uncertain-
REPORT
ties that they face.
3
Luxembourg, 17 June 2024
GROUP
Novem Group S.A.
MANAGEMENT
Management Board
REPORT
4
Markus Wittmann
Dr. Johannes Burtscher
CONSOLIDATED
FINANCIAL
Maria Eichinger
Mathias Rieger
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
116
SETUP AND ORGANISATION OF THE MANAGEMENT BOARD
CONTENTS
In the financial year ending 31 March 2024, the Man-
agement Board of Novem Group S.A. diligently fulfilled
its tasks in accordance with the statutory requirements,
the Articles of Association of Novem Group S.A. as well
as the Rules of Procedure of the Management Board of
the Company, approved by the Management Board and
the Supervisory Board on 1 July 2021. It regularly made
1
decisions regarding strategic and operational topics.
In the financial year ending 31 March 2024, the mem-
bers of the Management Board were Günter Brenner
TO OUR
(Chairman and CEO, until 30 September 2023), Markus
SHAREHOLDERS
Wittmann (Chairman and CEO, since 1 October 2023),
2
Dr. Johannes Burtscher (CFO), Mathias Rieger (Director
Internal Audit), Frank Schmitt (Director Consolidation,
until 24 August 2023) and Maria Eichinger (Manager
NON-FINANCIAL
Consolidation, since 1 September 2023).
REPORT
3
The Management Board held in total 14 regular meet-
ings during the financial year ending 31 March 2024.
Five meetings were attended by all of the members
GROUP
of the Management Board. In the meetings, the Man-
MANAGEMENT
agement Board regularly discussed the status and
REPORT
performance of the Group including risks and oppor-
4
tunities, its market position, course of business as well
as relevant financial data. The discussions were based
on regular and extensive reports in verbal and written
CONSOLIDATED
form presented by the relevant members of the Man-
FINANCIAL
agement Board. The Management Board maintained
STATEMENTS
close contact also outside of the regular meetings
5
to exchange all important information related to the
Novem Group. This close collaboration also included
strategy discussions as well as information on the
ANNUAL
organisational development.
ACCOUNTS
6
During the financial year ending 31 March 2024, there
were no conflicts of interest between the members of
the Management Board and the Company.
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
117
INDEPENDENT AUDITOR’S REPORT
CONTENTS
Basis for opinion
To the Shareholders of
Revenue recognition for Tooling
Novem Group S.A.
19, rue Edmond Reuter
We conducted our audit in accordance with the EU
a) Why the matter was considered to be one of most
L - 5326 Contern
Regulation N° 537/2014, the Law of 23 July 2016 on
significant in our audit of the consolidated financial
Luxembourg
the audit profession (the “Law of 23 July 2016”) and
statements for the year ended 31 March 2024
with International Standards on Auditing (“ISAs”) as
adopted for Luxembourg by the Commission de Sur-
As mentioned in notes 2.13 Revenue recognition and
1
REPORT OF THE RÉVISEUR
veillance du Secteur Financier (the “CSSF”). Our respon-
4.1. Revenue, the Group’s revenues are generated from
D’ENTREPRISES AGRÉÉ
sibilities under the EU Regulation N° 537/2014, the Law
the sales of serial parts, the provision of development
of 23 July 2016 and ISAs as adopted for Luxembourg
services and the sale of tools necessary for the produc-
TO OUR
by the CSSF are further described in the « Responsi-
tion of serial parts, whereas the sale of tools amounted to
SHAREHOLDERS
Report on the audit of the consolidated
bilities of “réviseur d’entreprises agréé” for the audit
€82.5 million in the financial year ended 31 March 2024.
2
financial statements
of the consolidated financial statements » section of
our report. We are also independent of the Group in
Novem Group S.A. has determined that the develop-
accordance with the International Code of Ethics for
ment work and subsequent sale of the tools constitute
NON-FINANCIAL
Opinion
Professional Accountants, including International Inde-
one single performance obligation. The associated
REPORT
pendence Standards, issued by the International Ethics
revenue is recognised upon completion and transfer
3
We have audited the consolidated financial statements
Standards Board for Accountants (“IESBA Code”) as
of the tool to the customer. An asset is considered to be
of Novem Group S.A. and its subsidiaries (the “Group”),
adopted for Luxembourg by the CSSF together with the
transferred when the customer obtains control of that
which comprise the consolidated statement of finan-
ethical requirements that are relevant to our audit of the
asset. Novem Group S.A. recognises revenue for Tool-
GROUP
cial position as at 31 March 2024, and the consolidated
consolidated financial statements, and have fulfilled
ing at a point in time, in the amount to which Novem
MANAGEMENT
statement of comprehensive income, consolidated
our other ethical responsibilities under those ethical
Group S.A. expects to be entitled.
REPORT
statement of changes in equity and consolidated
requirements. We believe that the audit evidence we
4
statement of cash flows for the year then ended, and
have obtained is sufficient and appropriate to provide
The Management Board has presented the criteria for
notes to the consolidated financial statements, includ-
a basis for our opinion.
the recognition of revenue from the sale of Tooling
ing material accounting policy information and other
in a group-wide accounting policy and implemented
CONSOLIDATED
explanatory information.
specific recognition and cut‑off procedures. Although
FINANCIAL
Key audit matters
there exist defined criteria in Novem’s process for
STATEMENTS
In our opinion, the accompanying consolidated finan-
revenue recognition for Tooling, the process includes
5
cial statements give a true and fair view of the consoli-
Key audit matters are those matters that, in our profes-
manual accounting steps and is complex as control is
dated financial position of the Group as at 31 March
sional judgment, were of most significance in our audit
transferred without that the customer obtains physical
2024, and its consolidated financial performance and
of the consolidated financial statements of the current
possession of the tool.
ANNUAL
its consolidated cash flows for the year then ended
period. These matters were addressed in the context of
ACCOUNTS
in accordance with IFRS Accounting Standards as
the audit of the consolidated financial statements as a
There is the risk for the consolidated financial state-
6
adopted by the European Union.
whole, and in forming our opinion thereon, and we do
ments that revenue for Tooling is not correctly rec-
not provide a separate opinion on these matters.
ognised throughout the period and that at year-end
such revenues are overstated since the tools were not
ADDITIONAL
transferred to the customer at year-end.
INFORMATION
NOVEM ANNUAL REPORT 2023/24
118
CONTENTS
b) How the matter was addressed during the audit
Our opinion on the consolidated financial statements
disclosing, as applicable, matters related to going
does not cover the other information and we do not
concern and using the going concern basis of account-
In order to assess whether Tooling revenue is recog-
express any form of assurance conclusion thereon.
ing unless the Management Board either intends to
nised in the correct financial year, our audit procedures
liquidate the Group or to cease operations, or has no
consisted of, but were not limited, to:
In connection with our audit of the consolidated finan-
realistic alternative but to do so.
cial statements, our responsibility is to read the other
•
We assessed the design and implementation of
information and, in doing so, consider whether the other
Those charged with governance are responsible for
1
internal key controls relating to the revenue recogni-
information is materially inconsistent with the consoli-
overseeing the Group’s financial reporting process.
tion process in relation to Tooling, and in particular
dated financial statements or our knowledge obtained
the determination and verification of the actual
in the audit or otherwise appears to be materially mis-
TO OUR
Responsibilities of the réviseur d’entreprises
transfer of control.
stated. If, based on the work we have performed, we
SHAREHOLDERS
agréé for the audit of the consolidated financial
•
We assessed compliance of the group-wide
conclude that there is a material misstatement of this
2
statements
accounting policy regarding revenue recognition
other information, we are required to report this fact.
with IFRS 15 and have verified the correct applica-
We have nothing to report in this regard.
tion of the latter while recognising revenues.
The objectives of our audit are to obtain reasonable
NON-FINANCIAL
•
For a sample of Tooling transactions recorded in
assurance about whether the consolidated financial
REPORT
Responsibilities of the Management Board and
the general ledger we reconciled those selected
statements as a whole are free from material misstate-
3
Those Charged with Governance for the
sales records with customer invoices, the underly-
ment, whether due to fraud or error, and to issue a report
consolidated financial statements
ing order, the proof of transfer of control and the
of the “réviseur d’entreprises agréé” that includes our
payments received from customers.
opinion. Reasonable assurance is a high level of assur-
GROUP
•
We assessed the adequacy of the Group’s dis-
The Management Board is responsible for the prepara-
ance, but is not a guarantee that an audit conducted
MANAGEMENT
closures in respect of the accounting policies on
tion and fair presentation of the consolidated financial
in accordance with the EU Regulation N° 537/2014,
REPORT
revenue recognition as disclosed in notes 2.13 and
statements in accordance with IFRS Accounting Stand-
the Law of 23 July 2016 and with ISAs as adopted for
4
4.1. of the consolidated financial statements.
ards as adopted by the European Union, and for such
Luxembourg by the CSSF will always detect a mate-
internal control as the Management Board determines
rial misstatement when it exists. Misstatements can
is necessary to enable the preparation of consolidated
arise from fraud or error and are considered material if,
CONSOLIDATED
Other information
financial statements that are free from material mis-
individually or in the aggregate, they could reasonably
FINANCIAL
statement, whether due to fraud or error.
be expected to influence the economic decisions of
STATEMENTS
The Management Board is responsible for the other
users taken on the basis of these consolidated financial
5
information. The other information comprises the
The Management Board is responsible for presenting
statements.
information stated in the annual report including the
and marking up the consolidated financial statements
Group Management Report and the Corporate Govern-
in compliance with the requirements set out in the
Our responsibility is to assess whether the consoli-
ANNUAL
ance Statement but does not include the consolidated
Delegated Regulation 2019/815 on European Single
dated financial statements have been prepared in all
ACCOUNTS
financial statements and our report of the “réviseur
Electronic Format (“ESEF Regulation”).
material respects with the requirements laid down in
6
d’entreprises agréé” thereon.
the ESEF Regulation.
In preparing the consolidated financial statements,
the Management Board is responsible for assessing
As part of an audit in accordance with the EU Regula-
ADDITIONAL
the Group’s ability to continue as a going concern,
tion N° 537/2014, the Law of 23 July 2016 and with
INFORMATION
NOVEM ANNUAL REPORT 2023/24
119
CONTENTS
Report on other legal and regulatory
ISAs as adopted for Luxembourg by the CSSF, we exer-
However, future events or conditions may cause
requirements
cise professional judgment and maintain professional
the Group to cease to continue as a going concern.
skepticism throughout the audit. We also:
•
Evaluate the overall presentation, structure and
content of the consolidated financial statements,
We have been appointed as “réviseur d’entreprises
•
Identify and assess the risks of material misstate-
including the disclosures, and whether the consoli-
agréé” by the Shareholders on 24 August 2023 and the
ment of the consolidated financial statements,
dated financial statements represent the underlying
duration of our uninterrupted engagement, including
whether due to fraud or error, design and perform
transactions and events in a manner that achieves
previous renewals and reappointments, is 2 years.
1
audit procedures responsive to those risks, and
fair presentation.
obtain audit evidence that is sufficient and appropri-
•
Obtain sufficient appropriate audit evidence regard-
The Group Management Report is consistent with the
ate to provide a basis for our opinion. The risk of not
ing the financial information of the entities and
consolidated financial statements and has been pre-
TO OUR
detecting a material misstatement resulting from
business activities within the Group to express an
pared in accordance with applicable legal requirements.
SHAREHOLDERS
fraud is higher than for one resulting from error,
opinion on the consolidated financial statements.
2
as fraud may involve collusion, forgery, intentional
We are responsible for the direction, supervision
The Corporate Governance Statement is included in the
omissions, misrepresentations, or the override of
and performance of the Group audit. We remain
Group Management Report. The information required
internal control.
solely responsible for our audit opinion.
by Article 68ter paragraph (1) letters c) and d) of the
NON-FINANCIAL
•
Obtain an understanding of internal control relevant
law of 19 December 2002 on the commercial and
REPORT
to the audit in order to design audit procedures that
We communicate with those charged with governance
companies register and on the accounting records
3
are appropriate in the circumstances, but not for the
regarding, among other matters, the planned scope
and annual accounts of undertakings as amended, is
purpose of expressing an opinion on the effective-
and timing of the audit and significant audit findings,
consistent with the consolidated financial statements
ness of the Group’s internal control.
including any significant deficiencies in internal control
and has been prepared in accordance with applicable
GROUP
•
Evaluate the appropriateness of accounting poli-
that we identify during our audit.
legal requirements.
MANAGEMENT
cies used and the reasonableness of accounting
REPORT
estimates and related disclosures made by the
We also provide those charged with governance with a
We confirm that the audit opinion is consistent with the
4
Management Board.
statement that we have complied with relevant ethical
additional report to the audit committee or equivalent.
•
Conclude on the appropriateness of the Manage-
requirements regarding independence, and to com-
ment Board’s use of the going concern basis of
municate with them all relationships and other mat-
We confirm that the prohibited non‑audit services
CONSOLIDATED
accounting and, based on the audit evidence
ters that may reasonably be thought to bear on our
referred to in the EU Regulation N° 537/2014 were not
FINANCIAL
obtained, whether a material uncertainty exists
independence, and where applicable, actions taken to
provided and that we remained independent of the
STATEMENTS
related to events or conditions that may cast sig-
eliminate threats or safeguards applied.
Group in conducting the audit.
5
nificant doubt on the Group’s ability to continue as
a going concern. If we conclude that a material
From the matters communicated with those charged
We have checked the compliance of the consolidated
uncertainty exists, we are required to draw attention
with governance, we determine those matters that
financial statements of the Group as at 31 March 2024
ANNUAL
in our report of the “réviseur d’entreprises agréé” to
were of most significance in the audit of the consoli
-
with relevant statutory requirements set out in the ESEF
ACCOUNTS
the related disclosures in the consolidated financial
dated financial statements of the current period and
Regulation that are applicable to consolidated financial
6
statements or, if such disclosures are inadequate,
are therefore the key audit matters. We describe these
statements.
to modify our opinion. Our conclusions are based
matters in our report unless law or regulation precludes
on the audit evidence obtained up to the date of
public disclosure about the matter.
ADDITIONAL
our report of the “réviseur d’entreprises agréé”.
INFORMATION
NOVEM ANNUAL REPORT 2023/24
120
CONTENTS
For the Group it relates to:
Luxembourg, 17 June 2024
•
Consolidated financial statements prepared in a
KPMG Audit S.à r.l.
valid xHTML format;
Cabinet de révision agréé
•
The XBRL markup of the consolidated financial
statements using the core taxonomy and the
Yves Thorn
common rules on markups specified in the ESEF
Partner
1
Regulation as described in Note 1.
In our opinion, the consolidated financial statements
TO OUR
of Novem Group S.A. as at 31 March 2024, identified
SHAREHOLDERS
as Novem-2024-03-31-en.zip, have been prepared, in all
2
material respects, in compliance with the requirements
laid down in the ESEF Regulation.
NON-FINANCIAL
Our audit report only refers to the consolidated finan-
REPORT
cial statements of Novem Group S.A. as at 31 March
3
2024, identified as Novem-2024-03-31-en.zip, prepared
and presented in accordance with the requirements
laid down in the ESEF Regulation, which is the only
GROUP
authoritative version.
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
121
Granite open pore
5
accounts
Annual
BALANCE SHEET
as of 31 March 2024
CONTENTS
Assets
Capital, reserves and liabilities
in € thousand
Note
31 Mar 24
31 Mar 23
in € thousand
Note
31 Mar 24
31 Mar 23
Formation expenses
3
1,998
2,854
Capital and reserves
7
673,738
681,796
Fixed assets
924,258
924,283
Subscribed capital
430
430
1
Tangible assets
4
98
124
Share premium account
540,803
540,803
Other fixtures and fittings, tools and
Reserves
484
484
98
124
equipment
Legal reserve
43
43
TO OUR
Financial assets
5
924,159
924,159
SHAREHOLDERS
Other non-available reserves
441
441
Shares in affiliated undertakings
5.1
674,159
674,159
2
Profit or loss brought forward
90,594
123,851
Loans to affiliated undertakings
5.2
250,000
250,000
Profit or loss for the financial year
41,427
16,228
Current assets
2,321
6,404
Provisions
8
690
519
NON-FINANCIAL
Debtors
6
1,957
5,911
REPORT
Other provisions
690
519
Amounts owed by affiliated undertakings
6.1
1,249
5,478
Creditors
9
254,210
251,290
3
becoming due and payable within one year
1,249
5,478
Amounts owed to credit institutions
9.1
250,203
250,105
Other debtors
6.2
708
433
becoming due and payable within one year
203
105
GROUP
becoming due and payable within one year
708
433
becoming due and payable after more than
MANAGEMENT
250,000
250,000
Cash at bank and in hand
364
493
REPORT
one year
Prepayments
62
64
Trade creditors
9.2
33
16
4
Total assets
928,638
933,605
becoming due and payable within one year
33
16
Amounts owed to affiliated undertakings
9.3
2,995
1
CONSOLIDATED
becoming due and payable within one year
2,995
1
FINANCIAL
STATEMENTS
Other creditors
9.4
979
1,168
5
Tax authorities
245
355
Social security debts
12
13
Other creditors
722
800
ANNUAL
ACCOUNTS
becoming due and payable within one year
722
800
Total capital, reserves and liabilities
928,638
933,605
6
The accompanying notes form an integral part of these stand‑alone financial statements.
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
123
PROFIT AND LOSS ACCOUNT
for the financial year ended 31 March 2024
CONTENTS
in € thousand
Note
FY 2023/24
FY 2022/23
Other operating income
10
2,589
1,649
Raw materials and consumables and other external expenses
-1,158
-1,014
Raw materials and consumables
-15
-7
Other external expenses
11
-1,143
-1,007
Staff costs
12
-895
-965
1
Wages and salaries
-834
-914
Social security costs
-61
-51
TO OUR
Value adjustments
-942
-955
SHAREHOLDERS
in respect of formation expenses and on tangible and intangible fixed assets
-942
-955
2
Other operating expenses
-403
-373
Income from participating interests
13
40,000
18,000
NON-FINANCIAL
derived from affiliated undertakings
40,000
18,000
REPORT
Other interest receivable and similar income
14
15,784
6,595
3
derived from affiliated undertakings
15,784
6,595
Interest payable and similar expenses
15
-13,340
-6,382
GROUP
concerning affiliated undertakings
-37
-
MANAGEMENT
Other interest and similar expenses
-13,303
-6,382
REPORT
Tax on profit
16
-222
-2
4
Other taxes
14
-325
Profit for the financial year
41,427
16,228
CONSOLIDATED
FINANCIAL
The accompanying notes form an integral part of these stand‑alone financial statements.
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
124
NOTES TO THE ANNUAL ACCOUNTS
CONTENTS
1
General
has participation or in which it has a direct or indirect
and related uncertainties could result in outcomes that
interest. The Company may, for its own account as
require an adjustment to the carrying amount of assets
Novem Group S.A. (the “Company”, formerly Car Interior
well as for the account of third parties, carry out any
and liabilities affected in future periods.
Design (Luxembourg) S.à r.l.) was originally formed as
commercial, industrial or financial activities which may
a private company (Société à responsabilité limitée) for
be useful or necessary to the accomplishment of its
The increasingly complex and uncertain macroeco-
an unlimited period of time under the laws of Luxem-
purposes or which are related directly or indirectly to
nomic and geopolitical environment, particularly due
bourg on 12 July 2011 pursuant to a deed of incorpora-
its purpose.
to the Ukraine war and the conflict in Israel‑Gaza/Mid-
1
tion published in the Mémorial, Recueil des Sociétés et
dle East, requires continuous and close observation by
Associations C on 28 September 2011, number 2306.
The Company became listed on 19 July 2021 with its
the management. The ongoing attacks by Houthis on
shares listed on the Frankfurt stock exchange under
numerous commercial ships using the Red Sea route
TO OUR
In June 2021, the extraordinary General Shareholders’
the ISIN code LU2356314745.
led container shipping lines to use alternative routes.
SHAREHOLDERS
Meeting converted the Company from a private limited
The alternative route around the Cape of Good Hope
2
liability company (Société à responsabilité limitée) to
The Company’s financial year begins on 1 April and
increases the sea voyage duration and costs due to
a public limited liability company (Société Anonyme).
ends on 31 March of each year.
higher bunker consumption, additional port and termi-
As a consequence, the shares (parts sociales) were
nal fees, and higher labour costs.
NON-FINANCIAL
also converted and became shares with no nominal
The Company also prepared consolidated finan-
REPORT
value. The Company’s corporate name was amended
cial statements in accordance with EU regulation
Thus, the Company faces high inflation, increased inter-
3
to Novem Group S.A. The Company is registered under
1606/2002, which are available at the registered office
est rates and volatile foreign currencies, with a rising
the number B 162.537 in the Luxembourg trade register.
of the Company.
apprehension of a slowdown in economic growth
across significant markets compared to prior years.
GROUP
The Company is managed by a Management Board
The Company’s annual accounts are presented in
MANAGEMENT
under the supervision of a Supervisory Board.
Euro (€), the Company’s functional currency. All
Management has regularly reviewed the implications
REPORT
amounts are rounded to the nearest thousand Euro
of the changing geopolitical and macroeconomic
4
The Company is formed for an unlimited duration.
unless otherwise indicated. Totals in tables were cal-
conditions and has not identified a going concern or a
culated on the basis of exact figures and rounded to
significant issue, beyond the general scope of impact,
The purpose of the Company is the taking of participat-
the nearest thousand Euro. For computational reasons,
on the performance and financial position of the Com-
CONSOLIDATED
ing interests in whatsoever form in other, either in Lux-
there may be rounding differences to the exact math-
pany as of today. Management continues to monitor
FINANCIAL
embourg or foreign companies and the management,
ematical values in tables and references (monetary
the current developments and their potential impact
STATEMENTS
control and development of such participating inter-
units, percentages, etc.).
on the Company.
5
ests. The Company may, in particular, acquire all types
of transferable securities, either by way of contribution,
The board has made an assessment of the Company’s
The official version of the accounts is the ESEF ver-
subscription, option, purchase or otherwise, as well as
ability to continue its activities as a going concern.
sion available with the Officially Appointed Mechanism
ANNUAL
realise them by sale, transfer, exchange or otherwise.
It concluded that, as of the establishment of these
(OAM) tool.
ACCOUNTS
The Company may also acquire and manage all pat-
annual accounts, it is reasonable to assume that the
6
ents, trademarks, connected licenses and other rights
Company will be able to continue as a going concern.
deriving from these patents or complementary thereto.
However, market conditions subsequent to year‑end
The Company may borrow and grant any assistance,
ADDITIONAL
loan, advance or guarantee to companies in which it
INFORMATION
NOVEM ANNUAL REPORT 2023/24
125
CONTENTS
2
Summary of significant valuation and
Intangible and tangible assets
Formation expenses, tangible and financial fixed assets
accounting policies
denominated in currencies other than Euro are trans-
lated at the historical exchange rates.
Intangible and tangible assets are used for business
purposes and are measured at cost less accumulated
Basis of preparation
Cash at bank denominated in currencies other than
value adjustments. Depreciation on intangible and
Euro is translated at the exchange rates prevailing at
tangible assets is recorded on a straight-line basis in
The annual accounts were prepared in accordance with
the date of the balance sheet.
accordance with its utilisation and based on the useful
1
Luxembourg’s legal and regulatory requirements under
life of the asset. The residual value, depreciation meth-
the historical cost convention and the going concern
Current assets and liabilities denominated in currencies
ods and useful life are reviewed annually and adjusted
assumption. Accounting policies and valuation rules
other than Euro are translated separately respectively
if necessary.
TO OUR
are, besides the ones laid down by the Commercial Law
at the lower or at the higher of the value converted at
SHAREHOLDERS
dated 10 August 1915 as amended and the amended
the historical exchange rate or the value determined on
Useful life of tangible assets (Other fixtures and fittings,
2
Law of 19 December 2002, determined and applied by
the basis of the exchange rates effective at the balance
tools and equipment): 5 to 6 years
the Management Board.
sheet date. Solely the unrealised exchange losses are
recorded in the profit and loss account. The exchange
NON-FINANCIAL
Financial assets
From the current perspective, there are no risks to the
gains are recorded in the profit and loss account at the
REPORT
continued existence of Novem Group S.A. and its affili-
moment of their realisation.
3
ated companies.
Shares in affiliated undertakings are stated at acqui-
Long-term debts denominated in currencies other than
sition cost including the expenses incidental thereto.
In preparing the annual accounts in accordance with
Euro are translated at the historical exchange rates.
Value adjustments are recorded if a reduction in the
GROUP
Luxembourg Generally Accepted Accounting Principles,
value is expected to be permanent. The impairment
MANAGEMENT
management has made judgements and estimates
As a result, realised exchange gains and losses and
analysis is done individually for each investment.
REPORT
that affect the application of accounting policies and
unrealised losses are recorded in the profit and loss
4
the reported amounts of assets, liabilities, income and
account. Unrealised exchange gains are not recognised.
Loans to affiliated undertakings are recorded at their
expenses.
nominal value. Loans are written down to their recover-
able amount if there is a durable decrease in value.
CONSOLIDATED
Formation expenses
Due to unforeseeable developments beyond the con-
FINANCIAL
trol of management, the actual figures may differ from
These value adjustments may not be continued if the
STATEMENTS
these estimates. Estimates and underlying assump-
The position carries expenses arising from the context
reasons for which the value adjustments were recog-
5
tions are reviewed on an ongoing basis.
of the private placement and stock exchange listing
nised have ceased to exist.
(capital market transactions) of the Novem Group S.A.
relating to the newly issued shares and the refinanc-
ANNUAL
Foreign currency translation
Debtors
ing. Formation expenses are measured at cost less
ACCOUNTS
accumulated value adjustments and are written off on
6
The Company maintains its books and records in Euro.
a straight-line basis over a period of 5 years.
Current receivables are recorded at their nominal value.
The balance sheet and the profit and loss account are
They are subject to value adjustments where their
expressed in this currency.
recovery is compromised.
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
126
CONTENTS
3
Formation expenses
These value adjustments may not be continued if the
Board. The Performance Share Plan is granted in
reasons for which the value adjustments were recog-
annual tranches of virtual shares with a respective
nised have ceased to exist.
performance period of four years.
Formation expenses comprised expenses arising
from the context of the private placement and stock
According to IFRS 2, for cash‑settled share‑based pay-
exchange listing of the Novem Group S.A. relating to
Cash
ment transactions, the Company has to measure the
the newly issued shares and the refinancing.
liability incurred at the fair value of the liability. The fair
1
Cash at bank and in hand is recorded at its nominal
value of the share-based payments of the Performance
Formation expenses were written off on a straight‑line
value and comprises bank current accounts.
Share Plan has been measured at the end of each quar-
basis over a period of five years.
ter by using a Monte-Carlo-Simulation. Any changes in
TO OUR
the liability are recognised in profit or loss.
SHAREHOLDERS
Provisions
in € thousand
Total
2
Gross value
Creditors
Provisions are intended to cover losses or debts, the
Balance as of 01 Apr 22
4,247
nature of which is clearly defined and which, at the date
Additions
-
NON-FINANCIAL
of the balance sheet, are either likely to be incurred or
Debts are recorded at their reimbursement value.
REPORT
certain to be incurred but uncertain as to their amount
Where the amount repayable on account exceeds the
Disposals
-
3
or the date on which they will arise.
amount received, the difference is shown as an asset
Balance as of 31 Mar 23
4,247
and is written off over the period of debt.
Additions
-
Provisions may also be created to cover charges that
Disposals
-
GROUP
have originated in the financial year under review or in
MANAGEMENT
Dividend income
a previous financial year, the nature of which is clearly
Balance as of 31 Mar 24
4,247
REPORT
defined and which, at the date of the balance sheet,
4
Accumulated value adjustments
are either likely to be incurred or certain to be incurred
Dividend income is recognised at the moment the
but uncertain as to their amount or the date on which
Company obtains legal entitlement to such income.
Balance as of 01 Apr 22
534
they will arise.
Additions
859
CONSOLIDATED
FINANCIAL
Disposals
-
STATEMENTS
Balance as of 31 Mar 23
1,393
Share-based payments
5
Additions
856
The Company accounts for share-based payments in
Disposals
-
accordance with IFRS 2, as permitted under Luxem-
Balance as of 31 Mar 24
2,249
ANNUAL
burg Law. It adheres to the principle of substance over
ACCOUNTS
form, ensuring that the economic reality of transactions
Net book value
6
is accurately reflected in the financial statements.
Balance as of 31 Mar 23
2,854
Balance as of 31 Mar 24
1,998
The Company established cash-settled share-based
ADDITIONAL
payment agreements for members of the Management
INFORMATION
NOVEM ANNUAL REPORT 2023/24
127
CONTENTS
4
Fixed assets
The tangible fixed assets comprise office equipment
and vehicles. The Management Board assessed that
no value adjustment was required on the Company’s
Tangible assets
tangible assets as of 31 March 2024.
Fixed assets were depreciated on a straight‑line basis
5
Financial assets
over a period of up to six years.
1
5.1 Shares in affiliated undertakings
in € thousand
Total
TO OUR
SHAREHOLDERS
Gross value
The shares in affiliated undertakings of the Company
Balance as of 01 Apr 22
26
2
consist of an investment in the Novem Group GmbH.
Additions
141
The Company is the sole shareholder of Novem Group
Disposals
-
GmbH (the “Subsidiary”).
NON-FINANCIAL
Balance as of 31 Mar 23
147
REPORT
Percentage of
Additions
-
3
Subsidiary
Registered office
ownership
Closing date
Disposals
-
Weiden i.d. Oberpfalz
Novem Group GmbH
100%
31 Mar 24
Balance as of 31 Mar 24
147
(Germany)
GROUP
MANAGEMENT
Accumulated value adjustments
Result of the last
Book value at
Book value at
REPORT
in € thousand
Shareholder’s equity
financial period
31 Mar 23
31 Mar 24
Balance as of 01 Apr 22
4
4
Novem Group GmbH
674,156
21,496
674,159
674,159
Additions
20
Disposals
-
The Management Board has the opinion that no value
€185 thousand (31 March 2023: €35 thousand) was
Balance as of 31 Mar 23
24
CONSOLIDATED
adjustment was required on the Company’s financial
calculated on the basis of a 360-day year with months
FINANCIAL
Additions
25
assets as at 31 March 2024.
of actual days.
STATEMENTS
Disposals
-
5
Balance as of 31 Mar 24
49
5.2 Loans to affiliated undertakings
Net book value
ANNUAL
As of 31 March 2024, Loans to affiliated undertakings
ACCOUNTS
Balance as of 31 Mar 23
123
existed with Novem Group GmbH. The stated princi-
6
Balance as of 31 Mar 24
98
pal amount is €250,000 thousand (31 March 2023:
€250,000 thousand) and matures on 20 July 2026. The
accrued interest as of 31 March 2024 amounting to
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
128
CONTENTS
6
Debtors
7
Capital and reserves
There were the following changes in equity in financial
6.1 Amounts owed by affiliated undertakings
years 2022/23 and 2023/24:
Receivables from affiliated companies of €1,249
thousand (31 March 2023: €5,478 thousand) resulted
Share
1
premium
Special
Results
Profit for
largely from recharge of costs to affiliated undertakings
Subscribed and similar
Legal reserve net
brought the financial Capital and
and accrued interests (refer to section 5.2).
in € thousand
capital
premiums
reserve
wealth tax
forward
year
reserves
TO OUR
Balance as of 01 Apr 22
430
540,803
6
143
140,025
1,075
682,483
SHAREHOLDERS
Allocation of previous
6.2 Other debtors
-
-
-
-
1,075
-1,075
-
year’s profit
2
Dividend distributions
-
-
-
-
-17,212
-
-17,212
The amount of €708 thousand (31 March 2023: €433
Allocation to the legal
thousand) mainly related to receivables from the tax
-
-
37
-
-37
-
-
reserve
NON-FINANCIAL
authorities.
REPORT
Allocation to the net
-
-
-
298
-
-
298
wealth tax reserve
3
Profit for the financial
-
-
-
-
-
16,228
16,228
year
Balance as of 31 Mar 23
430
540,803
43
441
123,851
16,228
681,796
GROUP
MANAGEMENT
REPORT
Balance as of 01 Apr 23
430
540,803
43
441
123,851
16,228
681,796
Allocation of previous
4
-
-
-
-
16,228
-16,228
-
year’s profit
Dividend distributions
-
-
-
-
-49,485
-
-49,485
Profit for the financial
CONSOLIDATED
-
-
-
-
-
41,427
41,427
FINANCIAL
year
STATEMENTS
Balance as of 31 Mar 24
430
540,803
43
441
90,594
41,427
673,738
5
Subscribed capital
ordinary shares rank equally with regard to the Com-
ANNUAL
pany’s residual assets. Each share of the Company
ACCOUNTS
As of 31 March 2024, the share capital of the Company
represents a par value of €0.01 in the Company’s
6
amounted to €430 thousand (31 March 2023: €430
share capital. All shares are fully paid. Holders of these
thousand) and is divided into 43,030,303 ordinary
shares are entitled to dividends as declared from time
shares (31 March 2023: 43,030,303 ordinary shares)
to time and are entitled to one vote per share at general
ADDITIONAL
in a dematerialised form with no nominal value. All
meetings of the Company.
INFORMATION
NOVEM ANNUAL REPORT 2023/24
129
CONTENTS
Share premium and similar premiums
must set up a restricted reserve equal to five times the
thousand (31 March 2023: €128 thousand). The prior
amount of the net wealth tax credited. This reserve has
financial year also contained other provisions amount-
As of 31 March 2024, the share premium and simi-
to be maintained for a period of five years following the
ing to €81 thousand.
lar premiums account of the Company amounted
year in which it was created. In case of distribution of
to €540,803 thousand (31 March 2023: €540,803
the restricted reserve, the tax credit falls due during the
9
Creditors
thousand).
year in which it was distributed.
1
Reserve to be
Amount in
Legal reserve
9.1 Amounts owed to credit institutions
NWT of the year
created in FS
€ thousand
2016
2016
10,525
TO OUR
In accordance with Luxembourg Law, the Company is
In June 2021, a new term loan agreement for €310,000
SHAREHOLDERS
2017
2017
29,375
required to appropriate a minimum of 5% of the net
thousand in total (€250,000 thousand as a term loan
2018
2018
32,325
2
profit after tax for the year to a legal reserve until the
and €60,000 thousand as a revolving credit facility)
2019
2019
35,425
balance of such reserve is equal to 10% of the issued
was entered into between Novem Group S.A. and an
share capital. The legal reserve is not available for dis-
2020
2020
46,075
international syndicate of banks. Accordingly, the refi-
NON-FINANCIAL
tribution to shareholders except upon the dissolution
nancing was implemented as of 23 July 2021 by the
2021
2021
26,650
REPORT
of the Company. No allocation was made to the legal
drawdown of the term loan of €250,000 thousand and
2022
2022
52,475
3
reserve in the current year as the 10% maximum has
matures in July 2026. The revolving credit facility of
2023
2023
208,075
already been reached.
€60,000 thousand has not been used to date. For the
Total
440,925
drawn term facility, the margin range is between 2.0%
GROUP
and 1.0% per annum, depending on the total net lever-
MANAGEMENT
Authorised capital
age of the Group. Additionally, the respective 3-month
REPORT
Dividend
Euribor is reflected in the all‑in rate.
4
The authorised capital of the Company is set at
€520,000 thousand divided into 52,000,000 shares with
At the Annual General Meeting on 24 August 2023 the
The accrued interest as of 31 March 2024 amounting to
no nominal value. The Management Board is author-
Management Board, in agreement with the Supervisory
€203 thousand (31 March 2023: €105 thousand) was
CONSOLIDATED
ised to increase the current issued capital up to the
Board, resolved a total dividend of €1.15 per share (ordi
-
calculated on the basis of a 360-day year with months
FINANCIAL
amount of the authorised capital, in whole or in part,
nary plus special). The total distribution was €49,485
of actual days.
STATEMENTS
from time to time during five years after IPO.
thousand.
5
9.2 Trade creditors
8
Provisions
Special reserve net wealth tax (NWT)
ANNUAL
Trade accounts payable amounted to €33 thousand (31
ACCOUNTS
In accordance with paragraph 8a of the 16 October
Provisions comprised primarily share-based payments
March 2023: €16 thousand) and mainly consisted of
6
1934 Law as amended, the Company is entitled to
of €629 thousand (31 March 2023: €310 thousand)
invoices for insurance and advisory services.
reduce the net wealth tax due for the year by an amount
(refer to section 18) and provisions for bonuses of €61
which cannot exceed the corporate income tax due for
ADDITIONAL
the year. In order to avail of the above, the Company
INFORMATION
NOVEM ANNUAL REPORT 2023/24
130
CONTENTS
17 Related parties
9.3 Amounts owed to affiliated undertakings
number of employees in the financial year 2023/24
was four (PY: four employees), containing two full‑time
The liabilities to affiliated undertakings amounting to
employees (PY: two full‑time employees).
Novem Group S.A. is obliged by the European direc-
€2,995 thousand (31 March 2023: €1 thousand) mainly
tive and Luxembourg Law to draw up a Remuneration
comprised cash pooling.
Policy for the Supervisory Board as well as the Man-
13 Income from participating interests
agement Board. The principles and measurement of
the Remuneration Policy for the Management Board
1
9.4 Other creditors
The income from participating interests amounting to
and Supervisory Board of the Novem Group S.A. are
€40,000 thousand (PY: €18,000 thousand) derived from
prepared in accordance with Article 7bis of the Luxem-
The position of other creditors amounting to €979
the dividend distribution.
bourg Law of 24 May 2011 on the exercise of certain
TO OUR
thousand (31 March 2023: €1,168 thousand) contained
rights of shareholders in listed companies.
SHAREHOLDERS
mainly accruals for outstanding audit fees and not yet
2
14 Other interest receivable and similar
paid Supervisory Board compensation. In addition, it
In the financial years 2023/24 and 2022/23, no transac-
income
included tax liabilities amounting to €245 thousand (31
tions occurred with direct and indirect shareholders.
March 2023: €355 thousand) relating to the financial
NON-FINANCIAL
year.
The income from other interest receivable and similar
REPORT
18 Share-based payments
income derived from affiliated undertakings of €15,784
3
thousand (PY: €6,595 thousand) comprised the interest
10 Other operating income
from an intercompany loan. The increase originated
The Management Board members of Novem Group
from higher total interest rates.
S.A. participated in a long-term incentive (Performance
GROUP
The other operating income included reimbursements
Share Plan) in the form of virtual shares. The Perfor-
MANAGEMENT
for management services provided by Novem Group
mance Share Plan is classified according to IFRS 2 as
REPORT
15 Interest payable and similar expenses
S.A. to other Novem Group companies as well as
a cash-settled share-based payment.
4
recharge of costs amounting to €2,589 thousand (PY:
€1,649 thousand).
The position carried interest payables to banks amount-
The Performance Share Plan is granted in annual tranches
ing to €13,340 thousand (PY: €6,382 thousand) for the
of virtual shares with a respective performance period of
CONSOLIDATED
incorporated term loan. The increase resulted from
four years. Deviating from this, the performance period
FINANCIAL
11 Other external expenses
higher total interest rates during the financial year.
of the tranche 2021 started on the day of the listing of
STATEMENTS
Novem Group S.A. and will end on 31 March 2025. The
5
The amount of €1,143 thousand (PY: €1,007 thousand)
second tranche (tranche 2022) started at the beginning
16 Taxation
mainly included legal, advisory, insurance and audit
of financial year 2022/23 and will end on 31 March 2026.
fees as well as tax services.
The third tranche (tranche 2023) started at the beginning
ANNUAL
The Company is subject to Luxembourg Company Tax
of financial year 2023/24 and will end on 31 March 2027.
ACCOUNTS
Law. For detailed information on special reserve net
6
12 Employees
wealth tax, refer to section 7.
The conditionally granted number of virtual shares at
the beginning of the performance period is calculated
The Company employed four employees as of 31 March
for each tranche by dividing a contractually defined
ADDITIONAL
2024 (31 March 2023: four employees). The average
individual target amount by the start share price of the
INFORMATION
NOVEM ANNUAL REPORT 2023/24
131
CONTENTS
share of Novem Group S.A. (arithmetic mean of the
virtual shares, corresponding to a provision of €268
For comparative purposes, the fair value and inputs
closing prices of the stock during the last 60 trading
thousand as of 31 March 2024 (31 March 2023: €0).
used in the assessment of the fair value as of 31 March
days prior to the start of the performance period).
2023 were as follows:
These provisions have been included in other provisions.
The final number of virtual shares is determined by
Valuation as of
Tranche
Tranche
multiplying the total target achievement by the con-
In total, the expenses for financial year 2023/24
31 March 2023
2021
2022
ditionally granted number of virtual shares. The total
amounted to €319 thousand (PY: €241 thousand).
1
19 Jul 21 –
1 Apr 22 –
target achievement depends on the target achieve-
Performance period
31 Mar 25
31 Mar 26
ment of the two financial figures relative Total Share-
The fair value of the Performance Share Plan to calcu-
Start share price
holder Return (70% weighting) and EBIT margin (30%
late expenses and provisions was determined by using
€16.46
€11.25
Novem Group S.A.
TO OUR
weighting). Thereby, the target achievement of relative
a Monte-Carlo-Simulation. The expected volatility has
SHAREHOLDERS
Remaining duration of
Total Shareholder Return and EBIT margin can range
been based on the average of the median volatility of
2.0 years
3.0 years
performance period
2
between 0% and 150%.
SDAX companies (term-congruent) and the historical
Expected annual volatility
45.8%
47.6%
volatility of Novem for the period available. The fair
Risk-free annual interest rate
2.7%
2.5%
In order to determine the payout in cash, the final num-
value and inputs used in the assessment of the fair
NON-FINANCIAL
Expected target achievement
ber of virtual shares is multiplied by the end share price
value as of 31 March 2024 were as follows:
REPORT
for internal target EBIT
100%
100%
of the share of Novem Group S.A. (arithmetic mean of
margin
3
the closing prices of the stock during the last 60 trading
Valuation as of
Tranche
Tranche
Tranche
Fair value per virtual share
€8.82
€8.85
days prior to the end of the performance period) plus
31 March 2024
2021
2022
2023
the sum of the dividends disbursed during the perfor-
Performance
19 Jul 21 –
1 Apr 22 –
1 Apr 23 –
GROUP
mance period. The payout is capped at 200% of the
period
31 Mar 25
31 Mar 26
31 Mar 27
MANAGEMENT
19 Commitments, contingencies and
contractually defined individual target amount.
REPORT
Start share
pledges
price Novem
€16.46
€11.25
€9.06
4
Group S.A.
The first tranche of the Performance Share Plan was
allocated to Management Board members of Novem
Remaining
The Company entered into an English Law governed
duration of
Group S.A. for financial year 2021/22 and the number
intercreditor agreement together with some of its
1.0 year
2.0 years
3.0 years
performance
CONSOLIDATED
of conditionally granted virtual shares amounted to
subsidiaries and several financial institutions, with
FINANCIAL
period
40,826, resulting in a provision of €108 thousand as
the Company as the original borrower of the facilities
STATEMENTS
Expected
of 31 March 2024 (31 March 2023: €170 thousand).
41.3%
49.7%
43.1%
agreement and an external bank as the original facil-
annual volatility
5
ity agent and security agent. In connection with this
Risk-free annual
The second tranche was awarded for financial year
3.4%
2.8%
2.5%
agreement, the Company additionally entered into an
interest rate
2022/23 with a total number of 60,384 conditionally
account pledge agreement, a share pledge agreement
Expected target
ANNUAL
granted virtual shares, corresponding to a provision of
and a security assignment agreement in order to guar-
ACCOUNTS
achievement
€254 thousand as of 31 March 2024 (31 March 2023:
antee the underlying nominal amount of the facilities
for internal
100%
100%
100%
6
target EBIT
€140 thousand).
agreement.
margin
Fair value per
The third tranche is awarded for financial year 2023/24
Contingent liabilities constitute off-balance-sheet
€2.96
€5.27
€5.10
ADDITIONAL
virtual share
with a total number of 83,287 conditionally granted
contingent liabilities recognised in the amount of the
INFORMATION
NOVEM ANNUAL REPORT 2023/24
132
CONTENTS
valuation as of the reporting date. The Group possessed
a €4,000 thousand credit line drawn in the amount of
€17 thousand (31 March 2023: €17 thousand) as a
guarantee facility by the Company. The probability of
claims on this guarantee was assessed as low based
on past experience.
1
Commitments regarding the rents not yet paid
amounted to €75 thousand at the end of the financial
year (31 March 2023: €0). They related to the leasing
TO OUR
contract on office spaces.
SHAREHOLDERS
2
20 Subsequent events
NON-FINANCIAL
There were no events or developments that could have
REPORT
materially affected the measurement and presentation
3
of the Company’s assets and liabilities as of 31 March
2024.
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
133
RESPONSIBILITY STATEMENT
CONTENTS
We, Markus Wittmann (Chief Executive Officer), Dr.
Johannes Burtscher (Chief Financial Officer), Maria
Eichinger (Manager Consolidation) and Mathias
Rieger (Director Internal Audit), confirm, to the best of
our knowledge, that the annual accounts which have
been prepared in accordance with the legal require-
ments and generally accepted accounting principles
1
applicable in the Grand Duchy of Luxembourg, give a
true and fair view of the assets, liabilities, financial posi-
tion and profit and loss of Novem Group S.A. and that
TO OUR
the Group Management Report includes a fair review
SHAREHOLDERS
of the development and performance of the business
2
and the position of Novem Group S.A., together with
a description of the principal risks and uncertainties
that they face.
NON-FINANCIAL
REPORT
Luxembourg, 17 June 2024
3
Novem Group S.A.
Management Board
GROUP
MANAGEMENT
REPORT
Markus Wittmann
Dr. Johannes Burtscher
4
Maria Eichinger
Mathias Rieger
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
134
INDEPENDENT AUDITOR’S REPORT
CONTENTS
To the Shareholders of
du Secteur Financier (the “CSSF”). Our responsibilities
Valuation of Shares in affiliated undertakings and
Novem Group S.A.
under the EU Regulation N° 537/2014, the Law of 23
Loans to affiliated undertakings
19, rue Edmond Reuter
July 2016 and ISAs as adopted for Luxembourg by the
L - 5326 Contern
CSSF are further described in the « Responsibilities of
a) Why the matter was considered to be one of most
Luxembourg
“réviseur d’entreprises agréé” for the audit of the annual
significant in our audit of the annual accounts for the
accounts » section of our report. We are also independ-
year ended 31 March 2024
ent of the Company in accordance with the International
1
REPORT OF THE RÉVISEUR
Code of Ethics for Professional Accountants, including
Refer to note 2 Summary of significant valuation and
D’ENTREPRISES AGRÉÉ
International Independence Standards, issued by the
accounting policies and note 5 Financial assets of the
International Ethics Standards Board for Accountants
annual accounts.
TO OUR
(“IESBA Code”) as adopted for Luxembourg by the CSSF
SHAREHOLDERS
Report on the audit of the annual accounts
together with the ethical requirements that are relevant
Novem Group S.A. is the ultimate holding entity of a
2
to our audit of the annual accounts, and have fulfilled
group of entities which are specialised in the supply
our other ethical responsibilities under those ethical
of trim parts and decorative functional elements of
Opinion
requirements. We believe that the audit evidence we
vehicle interiors in the premium automotive sector.
NON-FINANCIAL
have obtained is sufficient and appropriate to provide
REPORT
We have audited the annual accounts of Novem Group
a basis for our opinion.
As a holding entity, the Company holds as at 31 March
3
S.A. (the “Company”), which comprise the balance sheet
2024, a direct investment in Novem Group GmbH and
as at 31 March 2024, and the profit and loss account for
has granted to it an intercompany loan. As at 31 March
Key audit matters
the year then ended, and notes to the annual accounts,
2024, the Company’s direct investment amounts to
GROUP
including a summary of significant accounting policies.
€674,159 thousand, and is disclosed under Shares
MANAGEMENT
Key audit matters are those matters that, in our profes-
in affiliated undertakings, whereas the intercompany
REPORT
In our opinion, the accompanying annual accounts
sional judgment, were of most significance in our audit
loan amounts to €250,000 thousand and is disclosed
4
give a true and fair view of the financial position of the
of the annual accounts of the current period. These
under Loans to affiliated undertakings, both amounts
Company as at 31 March 2024, and of the results of its
matters were addressed in the context of the audit of
representing in aggregate 99% of the total assets. Both
operations for the year then ended in accordance with
the annual accounts as a whole, and in forming our
the Shares in affiliated undertakings and the Loans to
CONSOLIDATED
Luxembourg legal and regulatory requirements relat-
opinion thereon, and we do not provide a separate
affiliated undertakings are recorded at their nominal
FINANCIAL
ing to the preparation and presentation of the annual
opinion on these matters.
value including any incidental costs thereto, if any,
STATEMENTS
accounts.
value adjustments if the recoverable amount is durably
5
impaired.
Basis for opinion
At least annually, the Management Board of the
ANNUAL
Company evaluates the carrying value of the Shares
ACCOUNTS
We conducted our audit in accordance with the EU Reg-
in affiliated undertakings and the Loans to affiliated
6
ulation N° 537/2014, the Law of 23 July 2016 on the
undertakings.
audit profession (the “Law of 23 July 2016”) and with
International Standards on Auditing (“ISAs”) as adopted
The evaluation of the carrying value of the Shares
ADDITIONAL
for Luxembourg by the Commission de Surveillance
in affiliated undertakings and the Loans to affiliated
INFORMATION
NOVEM ANNUAL REPORT 2023/24
135
CONTENTS
undertakings is considered a key audit matter due to
cash flow projections, including the growth rates
materially inconsistent with the annual accounts or our
their weight of the total assets. In addition, the mar-
and the expected margins as well as the net debt
knowledge obtained in the audit or otherwise appears to
ket capitalisation of Novem has decreased from the
as at 31 March 2024.
be materially misstated. If, based on the work we have
date of the stock listing, this being 19 July 2021, to
•
Verifying the mathematical accuracy of the DCF
performed, we conclude that there is a material mis-
the 31 March 2024, leading to an impairment trigger.
model.
statement of this other information, we are required to
In order to assess the potential durable reduction in
•
Comparing the equity value of the Shares in affiliated
report this fact. We have nothing to report in this regard.
value, the Management Board prepared a valuation of
undertakings determined by the Management Board
1
the Novem Group GmbH and its subsidiaries using a
through the DCF model with the carrying amount of
Responsibilities of the Management Board and
Discounted Cash Flow (DCF) model. Certain aspects of
the Shares in affiliated undertakings as recorded in
Those Charged with Governance for the annual
the DCF model require significant judgement, such as
the annual accounts as at 31 March 2024.
TO OUR
accounts
the estimation of the Weighted Average Cost of Capital
•
Comparing the results from the valuation using
SHAREHOLDERS
(WACC), the estimated cash flow projections including
the DCF model under the income approach with
2
the growth rates and the expected margins.
alternative valuation methods, such as the market
The Management Board is responsible for the prepa-
approach.
ration and fair presentation of the annual accounts
b) How the matter was addressed during the audit
in accordance with Luxembourg legal and regulatory
NON-FINANCIAL
We also assessed the adequacy of the Company’s
requirements relating to the preparation and presen-
REPORT
Our audit procedures in relation to the assessment of
disclosures in respect of the accounting policies on
tation of the annual accounts, and for such internal
3
the valuation of the Shares in affiliated undertakings and
impairment as disclosed in Note 2 and Note 5 to the
control as the Management Board determines is neces-
the Loans to affiliated undertakings performed by Man-
annual accounts.
sary to enable the preparation of annual accounts that
agement Board, consisted of but were not limited to:
are free from material misstatement, whether due to
GROUP
fraud or error.
MANAGEMENT
Other information
•
Gaining an understanding of the Management
REPORT
Board’s process and controls related to the identifi-
The Management Board is responsible for presenting
4
cation of impairment indicators and the impairment
The Management Board is responsible for the other
the annual accounts in compliance with the require-
test in relation to the Shares in affiliated undertak-
information. The other information comprises the
ments set out in the Delegated Regulation 2019/815 on
ings and Loans to affiliated undertakings (financial
information stated in the annual report including the
European Single Electronic Format (“ESEF Regulation”).
CONSOLIDATED
assets).
management report and the Corporate Governance
FINANCIAL
•
Assessing the appropriateness of the valuation
Statement but does not include the annual accounts
In preparing the annual accounts, the Management
STATEMENTS
methodology applied by the Management Board
and our report of the “réviseur d’entreprises agréé”
Board is responsible for assessing the Company’s
5
regarding the valuation of Shares in affiliated under-
thereon.
ability to continue as a going concern, disclosing, as
takings and Loans to affiliated undertakings.
applicable, matters related to going concern and using
•
Gaining an understanding of the Board of Manage-
Our opinion on the annual accounts does not cover the
the going concern basis of accounting unless the Man-
ANNUAL
ment’s process in relation to budgeting and recon-
other information and we do not express any form of
agement Board either intends to liquidate the Company
ACCOUNTS
ciling the budget used in the DCF model with the
assurance conclusion thereon.
or to cease operations, or has no realistic alternative
6
budget approved by the Supervisory Board.
but to do so.
•
Auditing the key parameters of the DCF model
In connection with our audit of the annual accounts,
applied by the Management Board, such inputs con-
our responsibility is to read the other information and,
Those charged with governance are responsible for
ADDITIONAL
sisting among others of the WACC, the estimated
in doing so, consider whether the other information is
overseeing the Company’s financial reporting process.
INFORMATION
NOVEM ANNUAL REPORT 2023/24
136
CONTENTS
Responsibilities of the réviseur d’entreprises
misrepresentations, or the override of internal
We also provide those charged with governance with a
agréé for the audit of the annual accounts
control.
statement that we have complied with relevant ethical
•
Obtain an understanding of internal control relevant
requirements regarding independence, and to com-
The objectives of our audit are to obtain reasonable
to the audit in order to design audit procedures that
municate with them all relationships and other mat-
assurance about whether the annual accounts as a
are appropriate in the circumstances, but not for the
ters that may reasonably be thought to bear on our
whole are free from material misstatement, whether
purpose of expressing an opinion on the effective-
independence, and where applicable, actions taken to
due to fraud or error, and to issue a report of the “révi-
ness of the Company’s internal control.
eliminate threats or safeguards applied.
1
seur d’entreprises agréé” that includes our opinion.
•
Evaluate the appropriateness of accounting poli-
Reasonable assurance is a high level of assurance, but
cies used and the reasonableness of accounting
From the matters communicated with those charged
is not a guarantee that an audit conducted in accord-
estimates and related disclosures made by the
with governance, we determine those matters that
TO OUR
ance with the EU Regulation N° 537/2014, the Law of
Management Board.
were of most significance in the audit of the annual
SHAREHOLDERS
23 July 2016 and with ISAs as adopted for Luxembourg
•
Conclude on the appropriateness of the Manage-
accounts of the current period and are therefore the key
2
by the CSSF will always detect a material misstatement
ment Board’s use of the going concern basis of
audit matters. We describe these matters in our report
when it exists. Misstatements can arise from fraud or
accounting and, based on the audit evidence
unless law or regulation precludes public disclosure
error and are considered material if, individually or in
obtained, whether a material uncertainty exists
about the matter.
NON-FINANCIAL
the aggregate, they could reasonably be expected to
related to events or conditions that may cast sig-
REPORT
influence the economic decisions of users taken on
nificant doubt on the Company’s ability to continue
3
Report on other legal and regulatory
the basis of these annual accounts.
as a going concern. If we conclude that a material
requirements
uncertainty exists, we are required to draw attention
Our responsibility is to assess whether the annual
in our report of the “réviseur d’entreprises agréé” to
GROUP
accounts have been prepared in all material respects
the related disclosures in the annual accounts or,
We have been appointed as “réviseur d’entreprises
MANAGEMENT
with the requirements laid down in the ESEF Regulation.
if such disclosures are inadequate, to modify our
agréé” by the Shareholders on 24 August 2023 and the
REPORT
opinion. Our conclusions are based on the audit
duration of our uninterrupted engagement, including
4
As part of an audit in accordance with the EU Regula-
evidence obtained up to the date of our report of
previous renewals and reappointments, is 2 years.
tion N° 537/2014, the Law of 23 July 2016 and with
the “réviseur d’entreprises agréé”. However, future
ISAs as adopted for Luxembourg by the CSSF, we exer-
events or conditions may cause the Company to
The management report, which is included on page 48
CONSOLIDATED
cise professional judgment and maintain professional
cease to continue as a going concern.
of the Group Management Report, itself included in the
FINANCIAL
skepticism throughout the audit. We also:
•
Evaluate the overall presentation, structure and
Novem Annual Report, is consistent with the annual
STATEMENTS
content of the annual accounts, including the dis-
accounts and has been prepared in accordance with
5
•
Identify and assess the risks of material misstate-
closures, and whether the annual accounts repre-
applicable legal requirements.
ment of the annual accounts, whether due to fraud
sent the underlying transactions and events in a
or error, design and perform audit procedures
manner that achieves fair presentation.
The Corporate Governance Statement is included in the
ANNUAL
responsive to those risks, and obtain audit evidence
Group Management Report. The information required
ACCOUNTS
that is sufficient and appropriate to provide a basis
We communicate with those charged with governance
by Article 68ter paragraph (1) letters c) and d) of the law
6
for our opinion. The risk of not detecting a mate-
regarding, among other matters, the planned scope
of 19 December 2002 on the commercial and compa-
rial misstatement resulting from fraud is higher
and timing of the audit and significant audit findings,
nies register and on the accounting records and annual
than for one resulting from error, as fraud may
including any significant deficiencies in internal control
ADDITIONAL
involve collusion, forgery, intentional omissions,
that we identify during our audit.
INFORMATION
NOVEM ANNUAL REPORT 2023/24
137
CONTENTS
accounts of undertakings as amended, is consistent
Luxembourg, 17 June 2024
with the annual accounts and has been prepared in
accordance with applicable legal requirements.
KPMG Audit S.à r.l.
Cabinet de révision agréé
We confirm that the audit opinion is consistent with the
additional report to the audit committee or equivalent.
Yves Thorn
Partner
1
We confirm that the prohibited non‑audit services
referred to in the EU Regulation N° 537/2014 were not
provided and that we remained independent of the
TO OUR
Company in conducting the audit.
SHAREHOLDERS
2
We have checked the compliance of the annual
accounts of the Company as at 31 March 2024 with
relevant statutory requirements set out in the ESEF
NON-FINANCIAL
Regulation that are applicable to annual accounts.
REPORT
3
For the Company it relates to:
•
Annual accounts prepared in a valid xHTML format;
GROUP
MANAGEMENT
In our opinion, the annual accounts of Novem Group S.A.
REPORT
as at 31 March 2024, identified as Novem-2024-03-
4
31-en.zip, have been prepared, in all material respects,
in compliance with the requirements laid down in the
ESEF Regulation.
CONSOLIDATED
FINANCIAL
Our audit report only refers to the annual accounts of
STATEMENTS
Novem Group S.A. as at 31 March 2024, identified as
5
Novem-2024-03-31-en.zip, prepared and presented in
accordance with the requirements laid down in the
ESEF Regulation, which is the only authoritative version.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
138
Paper open pore
6
information
Additional
FINANCIAL CALENDAR
CONTACT
CONTENTS
14 August 2024
Q1 2024/25 Results
Investor Relations
investor.relations@novem.com
22 August 2024
Annual General Meeting 2024
14 November 2024
HY 2024/25 Results
IMPRINT
06 February 2025
Q3 2024/25 Results
1
28 May 2025
FY 2024/25 Preliminary Results
TO OUR
26 June 2025
Annual Report 2024/25
SHAREHOLDERS
Published by
2
All information is constantly updated and available.
Novem Group S.A.
Please visit the investor section on the Company website:
19, rue Edmond Reuter
NON-FINANCIAL
www.ir.novem.com
5326 Contern, Luxembourg
REPORT
www.novem.com
3
Concept and layout
GROUP
MANAGEMENT
Novem Group
REPORT
4
Date of publication
CONSOLIDATED
27 June 2024
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
140
GLOSSARY
CONTENTS
Adj. EBIT is defined as EBIT as adjusted for certain
Days payables outstanding (DPO) is defined by divid-
Free cash flow is defined as the sum of cash flow from
adjustments which management considers to be
ing trade payables (as shown in the consolidated state-
operating and investing activities.
non-recurring in nature, as Novem believes such items
ment of financial position, but excluding tooling) by net
are not reflective of the ongoing performance of the
costs series incurred in the three months.
GlobalData is an independent and exclusively automo-
business.
tive-focused global forecasting and market intelligence
Days sales outstanding (DSO) is defined by dividing
service provider.
Adj. EBIT margin is defined as Adj. EBIT divided by
trade payables (as shown in the consolidated state-
1
revenue.
ment of financial position, but excluding tooling) by rev-
Gross financial debt is defined as the sum of liabilities
enue generated from the sale of series trim elements
to banks, hedging and lease liabilities.
Adj. EBITDA is defined as profit for the year before
in the last three months.
TO OUR
income tax result, financial result and amortisation,
LkSG stands for Lieferkettensorgfaltspflichtengesetz.
SHAREHOLDERS
depreciation and write-downs as adjusted for certain
EBIT is defined as profit for the year before income tax
2
adjustments which management considers to be
result and financial result.
Net financial debt is defined as gross financial debt
non-recurring in nature, as Novem believes such items
less cash and cash equivalents.
are not reflective of the ongoing performance of the
EBITDA is defined as profit for the year before income
NON-FINANCIAL
business.
tax result, financial result and amortisation and
Net leverage ratio is defined as the ratio of net financial
REPORT
depreciation.
debt to Adj. EBITDA.
3
Adj. EBITDA margin is defined as Adj. EBITDA divided
by revenue.
ECB stands for European Central Bank.
OEM stands for Original Equipment Manufacturer.
GROUP
Articles of Association means the articles of associa-
EOP stands for End of (series) production.
Order intake is defined as all offers for goods and ser-
MANAGEMENT
tion of the Company.
vices processed within a certain period of time.
REPORT
FAAC stands for Financial assets measured at amor-
4
Capital expenditure is defined as the sum of cash paid
tised cost.
Quality data includes, for example, key figures such
for investments in property, plant and equipment and
as scrap and rework rates as well as PPM (parts per
cash paid for investments in intangible assets exclud-
FAFVTPL stands for Financial assets measured at fair
million).
CONSOLIDATED
ing currency translation effects.
value through profit or loss.
FINANCIAL
Shareholders’ Rights Law is the Luxembourg Law of
STATEMENTS
Companies’ Law is the Luxembourg Law of 10 August
Fed stands for Federal Reserve System.
24 May 2011 on the exercise of certain rights of share-
5
2015 on commercial companies, as amended.
holders in listed companies, as amended.
FLAC stands for Financial liabilities measured at amor-
Days inventory outstanding (DIO) is defined by dividing
tised cost.
SOP stands for Start of (series) production.
ANNUAL
inventories (as shown in the consolidated statement
ACCOUNTS
of financial position, but excluding tooling) by revenue
FLFVTPL stands for Financial liabilities measured at
Staffing level is defined as the number of employees
6
generated from the sale of series trim elements in the
fair value through profit or loss.
working at any one time.
last three months.
Fluctuation is defined as the number of employees who
Takeover Law is the Luxembourg Law on Takeovers
ADDITIONAL
left the Group per year in relation to the total workforce.
of 19 May 2006.
INFORMATION
NOVEM ANNUAL REPORT 2023/24
141
CONTENTS
Total operating performance is defined as the sum of
revenue and increase or decrease in finished goods.
Total working capital is defined as the sum of inven-
tories, trade receivables and contract assets excluding
expected losses less trade payables, tooling received
advance payments received and other provisions
1
related to Tooling.
Trade working capital is defined as the sum of inven-
TO OUR
tories non-tooling and trade receivables related to
SHAREHOLDERS
non-tooling less trade payables related to non-tooling.
2
Transparency Directive is the Directive 2004 / 109 /
EC, as amended.
NON-FINANCIAL
REPORT
3
GROUP
MANAGEMENT
REPORT
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
142
DISCLAIMER
CONTENTS
Novem Group S.A. (the “Company”) has prepared this
Annual Report solely for your information. It should
not be treated as giving investment advice. Neither the
Company, nor any of its directors, officers, employees,
direct or indirect shareholders and advisors nor any
other person shall have any liability whatsoever for
any direct or indirect losses arising from any use of
1
this Annual Report. While the Company has taken all
reasonable care to ensure that the facts stated in this
Annual Report are accurate and that the opinions con-
TO OUR
tained in it are fair and reasonable, this Annual Report
SHAREHOLDERS
is selective in nature. Any opinions expressed in this
2
Annual Report are subject to change without notice and
neither the Company nor any other person is under any
obligation to update or keep current the information
NON-FINANCIAL
contained in this Annual Report. Where this Annual
REPORT
Report quotes any information or statistics from
3
any external source, you should not interpret that the
Company has adopted or endorsed such information
or statistics as being accurate. This Annual Report con-
GROUP
tains forward-looking statements, which involve risks,
MANAGEMENT
uncertainties and assumptions that could cause actual
REPORT
results, performance or events to differ materially from
4
those described in, or expressed or implied by, such
statements. These statements reflect the Company’s
current knowledge and its expectations and projections
CONSOLIDATED
about future events and may be identified by the con-
FINANCIAL
text of such statements or words such as “anticipate”,
STATEMENTS
“believe”, “estimate”, “expect”, “intend”, “plan”, “project”
5
and “target”. No obligation is assumed to update any
such statement. Numbers were rounded to one deci-
mal. Due to rounding, the numbers presented may not
ANNUAL
add up precisely to the totals provided.
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOVEM ANNUAL REPORT 2023/24
143
NOVEM ANNUAL REPORT 2023/24