ANNUAL REPORT
2021
NORBIT ANNUAL REPORT 2021
2
BUSINESS AREAS
NORBIT ANNUAL REPORT 2021
3
BUSINESS AREAS
COVERING THE WORLD.
UNCOVERING POSSIBILITIES.
NORBIT is a global provider of tailored
technology to carefully selected niches.
CONTENTS
NORBIT in brief
.......................................................
5
Highlights and key figures
.......................................
6
Letter from the CEO
.................................................
8
Business segments
................................................
12
Oceans
................................................................................
12
Connectivity
........................................................................
14
Product Innovation and Realization (PIR)
............................
16
Executive management
.........................................
18
Board of directors
.................................................
20
Board of directors’ report
......................................
23
ESG report
.............................................................
35
Financial statements
.............................................
54
Consolidated financial statements
.....................................
56
Notes to the consolidated financial statements
.................
60
Financial statements – NORBIT ASA
...................................
87
Notes to the financial statements – NORBIT ASA
...............
90
Statement by the board of directors and CEO
.....................
97
Auditor’s report
..................................................................
98
Definitions of alternative performance measures
.............
104
NORBIT ANNUAL REPORT 2021
5
NORBIT IN BRIEF
Oces
Local representation
Associated companies
NORBIT IN BRIEF
NORBIT is a global provider of tailored technology to selected
niches, solving challenges through sustainable and innovative
solutions, in line with its mission to Explore More. The company
is structured in three business segments to address its key
markets: Oceans delivering technology solutions to global
maritime markets, Connectivity supplying solutions for asset
identification, monitoring and tracking, and Product Innovation
& Realization (PIR) oering R&D services and contract
manufacturing.
NORBIT has a strong corporate culture inspired by great
explorers. Deep domain knowledge from each segment ensures
that innovations by NORBIT ́s experienced R&D engineers are
fully market driven. Vertically integrated manufacturing ensures
good scalability and quality control, elements that are vital to
further growth and expansions.
NORBIT is headquartered in Trondheim with manufacturing in
Norway and a worldwide sales and distribution platform.
~
400
EMPLOYEES
22
NATIONALITIES
15
COUNTRIES
NORBIT ANNUAL REPORT 2021
6
HIGHLIGHTS
■
In 2021, NORBIT regained and accelerated its momentum across all three business
segments, Oceans, Connectivity and PIR, resulting in all time high revenues, growth of
27 per cent and improved profitability
■
NORBIT completed the acquisition of iData Kft, a company specialised in vehicle
tracking and fleet management related services
■
Improved profitability driven by higher revenue base and operational leverage, despite
cost inflation on raw materials
■
The board of directors has decided to propose to the annual general meeting an
ordinary dividend for 2021 of NOK 0.30 per share
■
NORBIT updated its ambitions and long-term financial targets. The ambition is to
deliver organic revenues of NOK 1.5 billion, implying an annual growth rate of 25 per
cent from 2020, and an EBITDA margin above 25 per cent in 2024.
HIGHLIGHTS
NORBIT ANNUAL REPORT 2021
7
HIGHLIGHTS
KEY FIGURES NORBIT
1
Amounts in NOK million (except percentages, EPS and DPS)
2021
2020 2019 2018 2017
Revenues
787.8
618.8
668.2
438.4
350.1
EBITDA
142.6
93.5
149.7
74.8
40.5
EBITDA margin
18%
15%
22%
17%
12%
EBIT
73.5
44.3
102.9
38.0
7.9
EBIT margin
9%
7%
15%
9%
2%
Profit for the period
47.9
27.3 77.3
48.0
28.5
Earnings per share (EPS)
0.83
0.48 1.45
1.11
-
Dividend declared per share (DPS)
0.30
0.30 0.60
- -
Cash & cash equivalents
21.7
15.0
21.7
9.1
14.8
Equity ratio
51%
65%
74%
34%
33%
Net interest-bearing borrowings
266.5
79.7
(2.4) 160.9
117.4
Cash flow from operations
47.7
92.1
41.2 15.9
12.8
Cash flow from investments
(217.6)
(136.7)
(81.9)
(46.2)
(41.4)
Cash flow from financing
176.6
37.8
53.3
37.024.6
R&D investments
51.2
63.2
59.0
38.2
30.2
R&D investments (% revenues)
6%
10%
9% 9% 9%
Net working capital
291.6
196.8
207.3
122.6
75.5
Net working capital (% LTM revenues)
37%
32%
31%
22%28%
Average number of employees – full-time equivalents
311
246 245
176
145
1) For definitions of alternative performance measures, please see page 104.
0
100
200
300
400
500
600
700
800
20212020201920182017201620152014201320122011
REVENUES
NOK million
139
138
361
292
380
310
350
438
668
619
788
0%
3%
6%
9%
12%
15%
18%
21%
24%
20212020201920182017201620152014201320122011
EBITDA
Per cent
11%
7%
13%
7%
14%
6%
12%
17%
22%
15%
18%
KEY FIGURES
NORBIT ANNUAL REPORT 2021
8
LETTER FROM THE CEO
TECHNOLOGY IS PART OF THE SOLUTION
LETTER FROM THE CEO
In 2021, NORBIT came back on our profitable growth trajectory where we saw strategic
decisions across all three segments yielding positive results. We believe technology is part
of the solution, whether it’s exploring and protecting the ocean space or enabling clients to
further digitise their operations.
At the entry of 2021, we had already strengthened our
foundation for delivering long-term value creation following a
broadening of the product oering towards carefully selected
niches and expansion of our production capacity. During the
year, we saw the results of strategic initiatives and directions
where all three business segments – Oceans, Connectivity
and Product Innovation & Realization (PIR) – contributed to
the growth of 27 per cent for the group.
Looking ahead, we have identified two major trends where
technology in general, and NORBIT in specific, can play an
important role: growth in the ocean economy and the digital
transformation.
As we prepare for the next phase of our strategy of profitable
growth, with new financial targets for 2024, we intend to
reinforce the elements that have served the company well in
the past, including market-driven innovation, recruiting and
refining of top talents, capitalising on our global sales and
distribution platform and a strong corporate culture of always
exploring more.
BLUE ECONOMY
Oceans, which oers a range of ground-breaking technologies
and products that enable eective and safe operations
in the ocean space, has experienced tremendous growth
internationally the last years and accounted for almost half of
our revenues in 2021.
Our new sonar family WINGHEAD, targeting the higher-
end professional market and demanding the best possible
performance, was a significant contributor in its first full year
after the market introduction in 2020. This is a good example
of our market-driven R&D investments generating an attractive
return profile.
It’s estimated that only five per cent of the oceans – covering
two thirds of the Earth’s surface – have been explored, implying
that there is a large market opportunity for our solutions. Our
products can be used to conduct bathymetric surveys, to
monitor dredging operations in real time, identifying potential
corridors for navigation, mapping of seabed for inspection of
oshore wind structures, quay walls and bridges, just to name
a few examples.
Oceans also has a strong oering within environmental
monitoring and technology which can be used for bottom
classification for environmental protection. To read more about
the five main areas where Oceans' products are well-positioned
for sustainable growth in the ocean industries see page 12.
DIGITISATION AND THE ELECTRIFICATION
MEGATRENDS
Our two other business segments, Connectivity and PIR, are
specialised within electronics and innovations which are
at the core of the digital transformation and electrification
megatrends. This covers in-house multidisciplinary R&D and
world-class manufacturing and extensive experience working
with wireless technology, customised integrated antennas,
embedded software and low power devices.
We started 2021 by announcing the acquisition of the
Hungarian software company iData, a company specialised in
vehicle tracking and fleet management related services with
a subscription based recurring revenue business model. The
acquisition is part of our strategy to broaden the platform for
NORBIT ANNUAL REPORT 2021
9
LETTER FROM THE CEO
– Technology will be a vital element in
solving several of the major challenges
ahead of us, and NORBIT is positioned
to contribute.
growth, allowing us to take a stronger position in the asset and
vehicle tracking and monitoring market.
In the second half of the year, we decided to rename
Intelligent Trac Systems (ITS) to Connectivity, where ITS as
a sub-segment continues to oer tailormade solutions within
Dedicated Short-Range Communications (DSRC), in addition
to a sub-segment named Smart Data consisting of iData and
selected initiatives within Connected Solutions. Connectivity
provides a better description of what we do in this business unit
- namely enabling our clients to further digitise and make their
operations more eective, with optimised planning of routes
resulting in reduced trac. This is done through data collection
NORBIT ANNUAL REPORT 2021
10
LETTER FROM THE CEO
and analyses with tailored sensors and connectivity devices,
cloud computing and data fusion directly integrated into the
client's own business software or as stand-alone services.
Connected Solutions enable ecient digitalisation in almost any
business vertical. 25 billion devices are currently connected to
the Internet according to the research and business intelligence
firm Gartner. Sensors and devices connected to the Internet are
used in a variety of applications and redefining industries. We
have identified vehicle and asset tracking and monitoring as a
good extension of our Connectivity business. In addition, we see
verticals where we can act as a technology and manufacturing
partner for other companies to bring Connected Solutions into
their core domains.
PIR is a supplier of R&D services and contract manufacturing
to clients varying in size from start-ups to large international
corporations, working across industries such as automotive,
medical, security, energy, marine and subsea. PIR is also
benefiting from the electrification megatrend, providing R&D
expertise and manufacturing capabilities of tailored electronic
components. In 2021, PIR grew its revenues by almost 30 per
cent, utilising our increased production capacity at Røros.
With the ongoing disruption in supply chains globally and
geopolitical risk, we experience that the attractiveness of
Norway as a manufacturing location continues to increase.
SUPPORT IN OUR CORE VALUES
Our diversified business model has proven to be resilient and
tested through various market cycles. In 2021, we experienced
the challenging supply market for components and unreliable
lead times, impacting the wider organisation. With support
in our core values, “We deliver!” and “Safe under pressure”,
we adapted to a new reality. As risk mitigating actions, we
increased inventory levels to safeguard deliveries and worked
day and night with suppliers to secure the needed components
to deliver as planned. By entering the year with a security level
of inventory, we also succeeded in winning orders from new
clients when our peers could not deliver.
I would like to thank all employees for their eorts and
commitment throughout the year, exploring for solutions rather
than finding problems.
LONGTERM AMBITIONS
Since 2010, we have grown our revenues by close to 30 per
cent per year on average, mostly organic, and at the same
time remained firm to our objective of delivering sustained
and profitable growth.
In August, we updated our ambitions and long-term financial
targets. According to the updated plan, the ambition is to
deliver organic revenues in excess of NOK 1.5 billion and an
EBITDA margin above 25 per cent in 2024. In addition, we will
continue to pursue value-accretive acquisitions to accelerate
growth further.
An integral part of our strategy is the worldwide sales and
distribution network. After adding further geographies during
the year we are now present with oces in 15 countries and
had clients in over 60 countries across all populated continents
in 2021.
For Oceans, the growth towards 2024 will be driven by
increased demand for technology to explore and monitor the
oceans domain, combined with our vast domain knowledge
and proven ability to innovate. In Connectivity, we expect
increased demand for tailored IoT hardware and Connected
Solutions for digitalisation where we can use our competence in
design and manufacturing of low power wireless devices. Broad
R&D experience and leading-edge robotised manufacturing
processes together with “Made in Europe” are strengths that
PIR can continue to capitalise on going forward.
Technology will be a vital element in solving several of the major
challenges ahead of us, and NORBIT is positioned to contribute.
Per Jørgen Weisethaunet
CEO of NORBIT ASA
NORBIT ANNUAL REPORT 2021
12
BUSINESS AREAS
The Oceans segment
delivers tailored technology and solutions to the global maritime markets.
NORBIT’s sonar solutions have been the primary growth driver for the segment in the last few years.
The sonar solutions are based on highly integrated and compact sonars with light detection and
ranging (LIDAR) and a global positioning system (GPS) for surface and subsea imaging and mapping. In
addition, Oceans oers solutions for environmental monitoring, customised cable assemblies through
NORBIT Connect and tailored products for the aquaculture and security markets.
NORBIT has established a global indirect sales and
distribution network for its sonar business, supported by
regional oces covering a wide range of customers in
various industries. The segment generally has a low revenue
visibility of 2 to 4 weeks, due to the short time from receipt
of an order to customer delivery. The segment experiences
quarterly fluctuations in revenues due to seasonal variations,
where second and fourth quarter have historically been the
seasonally strongest periods.
SUBSEA
NORBIT Subsea specialises in ultra-compact wideband
multibeam sonars for hydrographic applications, forward-
looking applications, as well as advanced subsea solutions
such as leakage detection. NORBIT’s subsea technologies are
based on the latest analogue and digital signal processing,
and the products provide comprehensive coverage monitoring
combined with high sensitivity and accuracy.
CONNECT
NORBIT Connect delivers customised cable assemblies,
electromechanical box builds and business operations
solutions with a proven track record over the last 25 years.
APTOMAR
NORBIT Aptomar is a leading provider of environmental
monitoring and surveillance solutions for the marine sector
and delivers sensors, control systems and remote operations
through professional mariners from the Aptomar Global
Maritime Control Centre. Customers use the monitoring
solutions within oshore production and exploration, ports
and harbours. The technology is also used by civilian and
military vessels for remote sensing.
SECURITY
NORBIT Security combines a selection of products from
across the NORBIT group. Each segment and product
group has strong ancestry and capabilities within the
security industry. NORBIT can deliver high performance and
integrated solutions by leveraging the group’s data fusion
and display skills.
AQUA
NORBIT Aqua provides tailored products for the aquaculture
industry, including high power underwater lights, power
cabinets and additional sensor solutions.
MAIN EVENTS 2021
■
In February, segment Oceans received an order for
multiple WINGHEAD sonars from a leading global survey
company. The value of the order is approximately NOK 10
million. The sonars were delivered in the second quarter
2021.
■
In June, segment Oceans was awarded a NOK 13 million
contract from an undisclosed European governmental
customer for delivery of the SeaCOP system for three
multipurpose law enforcement vessels. The system is
designed for early detection of possible pollution to the
marine environment and as the main decision support
tool for the following emergency response and recovery
operation.
■
Sales of NORBIT’s WINGHEAD, a compact and ultra-high
resolution curved array broadband multibeam sonar
platform, continued to grow and significantly contributed
to the Oceans segment results.
■
By the end of the year, NORBIT had delivered sonar
equipment to more than 50 countries.
OCEANS
20212020201920182017
REVENUES – OCEANS
NOK million
102.3
189.9
249.0
267.2
378.5
20212020201920182017
30.1
54.0
64.1
59.6
133.6
35%
22%
26%
28%
29%
EBITDA – OCEANS
■
NOK million
–
Margin %
20212020201920182017
17.8
38.9
50.6
45.6
108.9
29%
17%17%
20%20%
EBIT – OCEANS
■
NOK million
–
Margin %
NORBIT ANNUAL REPORT 2021
13
BUSINESS AREAS
NORBIT ANNUAL REPORT 2021
14
BUSINESS AREAS
The Connectivity segment
enables clients to digitise their operations further through data collection
and tailored sensor analysis with connectivity devices, cloud computing and data fusion being directly
integrated into the client’s business software or as stand-alone services. Connectivity consists of the
Intelligent Trac Systems (ITS) and Smart Data sub-segments.
INTELLIGENT TRAFFIC SYSTEMS
ITS oers tailored connectivity solutions based on dedicated
short-range communication (DSRC) technology for intelligent
trac systems and truck applications. ITS has a leading
position as an independent supplier for dedicated solutions to
industrial blue-chip customers within automotive and satellite-
based tolling, as well as to leading insurance companies. The
contracts are generally frame agreements with medium to
long-term visibility.
NORBIT oers connectivity devices for satellite-based truck
tolling, i.e. tailored DSRC integrated with GPS and GSM
antennas, and DSRC based connectivity devices for smart
tachographs. The markets for NORBIT’s DSRC solutions for
global navigation satellite systems (GNSS) based tolling
devices and DSRC devices for smart tachographs are both
considered relatively dependent on the size of the market for
trucks. This is partially due to the intensified EU-initiated focus
on utilisation of smart tachographs, distance-based tolling
and the EU priority to connect all tolling in Europe and enable
vehicles to only need one On-Board Unit (“OBU”) that connect
to any European electronic tolling system. EU regulations
related to smart tachographs was implemented from 15 June
2020. From this date all new trucks registered in the EU must
have a smart tachograph installed in the vehicle.
SMART DATA
Smart Data consists of the software service provider iData,
which specialises in vehicle monitoring, tailored reporting,
fleet management and fuel control, and has more than
15 years of experience in this domain. With its iTrack GPS
tracking system, iData’s solutions are used by more than
4800 companies in around 40000 vehicles. iData also
oers e-toll payment solutions that are used in more than
10000 vehicles. iData operates predominantly in Hungary
where it has a strong market position. More than 85 per
cent of the revenues generated are recurring, either through
subscriptions, rental or e-toll payment.
Smart Data also covers selected initiatives within Connected
Solutions.
MAIN EVENTS 2021
■
NORBIT renamed the business segment Intelligent
Trac Systems (ITS) to ‘Connectivity’ following the iData
acquisition.
■
In March, NORBIT entered into a letter of intent with
Fremtind Service to develop solutions for safer trac
and simplified payment systems along Norwegian roads.
NORBIT later secured a NOK 27 million contract with
Fremtind Service, a subsidiary of one of the largest
insurance companies in Norway, to deliver OBUs for
electronic toll collection in Norway.
■
In April, Connectivity signed an agreement with a
European insurance company to deliver OBUs for
electronic toll collection worth approximately NOK 50
million.
■
In July, NORBIT acquired iData, a technology company
specialising in vehicle tracking and fleet management.
The acquisition was completed for a total consideration
of EUR 14.5 million. As part of the settlement at closing,
NORBIT issued EUR 2.5 million in new shares to the
sellers and EUR 6.0 million was paid in cash.
■
In December, NORBIT secured a NOK 35 million order
from an existing undisclosed European customer to
deliver enforcement modules to satellite-based tolling
systems.
CONNECTIVITY
20212020201920182017
REVENUES – CONNECTIVITY
NOK million
42.9
39.5
186.3
145.1
146.3
20212020201920182017
(1.9)
9.6
83.1
42.5
23.8
16%
29%
45%
24%
(4%)
EBITDA – CONNECTIVITY
■
NOK million
–
Margin %
20212020201920182017
(7.5)
3.6
69.9
27.7
0.9
1%
19%
38%
9%
(17%)
EBIT – CONNECTIVITY
■
NOK million
–
Margin %
NORBIT ANNUAL REPORT 2021
15
BUSINESS AREAS
NORBIT ANNUAL REPORT 2021
16
BUSINESS AREAS
The Product Innovation & Realization (PIR)
segment oers Research and Development (R&D)
products and services, alongside contract manufacturing services to long-term and key industrial
customers. With both manufacturing and R&D as in-house capabilities, NORBIT has a setup that allows
for development of new technologies and solutions in parallel with production process innovation,
enabling ecient and optimised realisations of new products. The PIR segment has mainly long-term
relations to selected key customers both for contract manufacturing and for the sale of products based
on proprietary technology.
R&D SERVICES
NORBIT has more than 25 years of experience with R&D and
technology innovations. NORBIT engineers have created a
broad range of tailored solutions for many market domains.
In the PIR segment, vast industrial R&D experience is available
and oered to key external clients. In addition, special R&D
projects for professional clients in dierent market domains
bring together challenges needed to refine and grow new
generations of NORBIT engineers. This provides NORBIT with
access to new valuable domain knowledge for the future.
The segment has also developed a range of customised
products based on NORBIT Intellectual Property throughout
the years. These are sold to long-term key customers under
either the customer’s brand or dual branding.
CONTRACT MANUFACTURING
For decades, NORBIT has provided contract manufacturing
of electronics for external customers. With a focus on highly
robotised, world-class manufacturing processes, PIR supplies
electronic products to demanding markets such as the
automotive, medical, security, energy, marine and ocean-
related industries.
Contract manufacturing for external customers gives NORBIT
a continued benchmark of the company’s manufacturing
capabilities, securing leading-edge processes and routines for
the entire group.
MAIN EVENTS 2021
■
In April, NORBIT completed the ISO 13485 certification
of the Selby factory in Norway. The certification enables
NORBIT to manufacture high-quality medical devices
using best-in-class and highly robotised manufacturing
processes.
■
A “Fast Track” department was established for rapid
prototyping and piloting, covering complete units
including electronics, mechanical parts both in plastic
and metal, benefiting from synergies between the R&D
department and contract manufacturing.
PIR
NORBIT ANNUAL REPORT 2021
17
BUSINESS AREAS
20212020201920182017
REVENUES – PIR
NOK million
229.3
221.1
259.9
224.6
291.0
20212020201920182017
19.9
20.0
22.6
2.3
16.4
6%
1%
9% 9% 9%
EBITDA – PIR
■
NOK million
–
Margin %
20212020201920182017
5.7
4.4
6.3
(14.9)
(3.8)
(1%)
(7%)
2%
3%
2%
EBIT – PIR
■
NOK million
–
Margin %
Per Jørgen Weisethaunet
Chief executive ocer (CEO)
Per Jørgen Weisethaunet has been
the group’s CEO since 2001 and
co-owner of NORBIT since 2008. He
has several years of experience as
an R&D project engineer and has
worked with various electronics
designs across several positions. Per
Jørgen also previously worked as an
operations manager in Cargoscan
Metler Toledo. Weisethaunet has been
chair and director of several executive
boards. Weisethaunet holds a Master
of Science degree in RF & Microwave
electronics from the Norwegian
University of Technology (NTNU), a
Bachelor of Science in electronics from
Trondheim University of Engineering
(TIH), business economics from
Trondheim Economic University center
of competence (TØHK) and supply
chain management from BI Norwegian
Business School.
Number of NORBIT shares* at
24 March 2022: 6973588
Per Kristian Reppe
Chief financial ocer (CFO)
Per Kristian Reppe has been the
group’s CFO since July 2020.
Before joining NORBIT, Reppe held
various senior positions in the Aker
group, including CFO of Abelee and
Investment Manager and Head of
Investor Relations at Aker ASA. Prior
to that, he worked as a management
consultant at Arkwright and as an
equity analyst at Pareto Securities.
Reppe holds a Master of Science
degree from the Norwegian School
of Economics (NHH) with a major in
financial economics.
Number of NORBIT shares* at
24 March 2022: 28544
Arild Søraunet
Chief technical ocer (CTO)
Arild Søraunet has been the group’s
CTO since 2018. Søraunet was
previously the Business Manager of
the R&D Services part of the business
segment PIR, formerly known as
ODM. Before that, he was the CEO of
NORBIT Subsea AS from 2011 to 2016,
and project manager of NORBIT ODM
from 2002 to 2011. Arild has additional
development engineer experience
from Cavotec Micro-Control AS
between 2000 to 2002 and Kongsberg
Defence & Aerospace AS from 1997
to 2000. Søraunet holds a Master of
Science in applied physics from the
University of Tromsø and a Bachelor of
Science in electronics from Levanger
College of Engineering.
Number of NORBIT shares* at
24 March 2022: 721989
NORBIT ANNUAL REPORT 2021
18
EXECUTIVE MANAGEMENT
EXECUTIVE MANAGEMENT
Stein Martin Beyer
Chief operating ocer (COO) and
business unit director PIR
Stein Martin Beyer has been the
group’s COO and Business Unit
Director of PIR since 2012. Beyer has
36 years of experience with industrial
management and leadership, including
10 years in NORBIT and 10 years as
CEO in Servi Cylinderservice AS. Beyer
holds a Master of Science in material
technology from the Norwegian
University of Technology (NTNU) and
a business economics degree from BI
Norwegian Business School.
Number of NORBIT shares* at
24 March 2022: 295147
Peter Koldgaard Eriksen
Business unit director Oceans
Peter Koldgaard Eriksen has been
the group’s Business Unit Director
of Oceans since 2016. Koldgaard
Eriksen has nine years of experience
in NORBIT Subsea AS, seven years in
RESON Inc and Goleta California as
CEO, EVP, group CTO, and business
development. He also has 11 years of
experience in RESON AS Slangerup
Denmark as an R&D engineer and
R&D manager. During his time at
RESON AS, he worked as CTO and
Production Manager and in the global
management team.
Koldgaard Eriksen holds a Master of
Science in active vibration control from
Aalborg University Center, as well as
various educations from MBA Kellogg
Chicago US, HKUST Hong Kong and
Vallendar Germany.
Number of NORBIT shares* at
24 March 2022: 748570
Peter Tschulik
Business unit director Connectivity
Peter Tschulik has been the group’s
Business Unit Director of Connectivity
since 2016. Tschulik has several years
of domain experience, including
his experience as a Global Product
Management and Marketing and
Center of Competence for Electronic
Tolling in Siemens, Austria. In addition,
he has six years of experience
in the energy sector as Head of
Communications and Head of Account
Manager in Siemens, Austria, and 16
years of experience in the ICT sector
as Head of Technical Sales Support
& Development in Fixed Network.
Tschulik has a PhD from the University
of Vienna and studies of electronics
from the Technical University of
Vienna.
Number of NORBIT shares* at
24 March 2022: 201640
* Number of shares is including shares held
by related parties.
NORBIT ANNUAL REPORT 2021
19
EXECUTIVE MANAGEMENT
Finn Haugan (1953)
Chair
Finn Haugan was the CEO of Sparebank
1 SMN from 1991 to 2019. Sparebank 1
SMN’s equity certificates were listed
on the Oslo Stock Exchange during
this period. Sparebank 1 Gruppen was
established, and the bank’s total assets
grew from NOK 16 to 165 billion. Before
Sparebank 1 SMN, Haugan held mana
-
gerial positions at Forretningsbanken
and Fokus Bank, his final two years as
deputy CEO. Haugan has experience
from several board positions, including
chair of Sparebank 1 Gruppen, the indus
-
try organisation, Finance Norway, and
Norwegian Bank’s Guarantee Fund. He
currently serves as chair of Sparebank 1
Sør Øst Norge (listed company), Sinka
-
berg Hansen AS, Forte Fondsforvaltning
AS, Elekt AS, Solon Eiendom AS and is a
director of OKEA ASA and LL Holding AS.
Chair since May 2019, re-elected 4 May
2021 for a period of one year. Chair of
the remuneration committee.
Haugan attended 15 board meetings in
2021 (100% attendance rate).
Number of NORBIT shares* at
24 March 2022: 92498
Bente Avnung Landsnes (1957)
Deputy chair
Bente Avnung Landsnes served as the
CEO and president of Oslo Børs ASA and
Oslo Børs VPS Holding ASA from 2006
to 2019. Landsnes started her career
at Bankenes Betalingssentral and was
the CEO of Bankenes Utredningsselskap
and senior vice president at Bankenes
Betalingssentral before joining Spare
-
banken NOR in 1996. From 2000 to 2003,
Landsnes held the position of group exec
-
utive vice president in Gjensidige NOR
Sparebank. She was the group executive
vice president at DNB NOR (IT and opera
-
tions) from 2003 to 2006. Landsnes has,
amongst others, experience with change
and reputation management, financial
reporting, investor relations, corporate
governance, ESG and digital transfor
-
mation. Since 2019, she has worked as
a non-executive director, mentor and
advisor. Deputy chair since May 2019,
re-elected 4 May 2021 for a period of two
years. Member of the audit committee.
Landsnes attended 15 board meetings in
2021 (100% attendance rate).
Number of NORBIT shares* at
24 March 2022: 60473
NORBIT ANNUAL REPORT 2021
20
BOARDOFDIRECTORS
BOARD OF DIRECTORS
According to NORBIT’s articles
of association, the board
of directors shall consist of
a minimum of three and a
maximum of seven directors
elected by the general meeting.
The general meeting elects the
chair and deputy chair of the
board. At 31 December 2021,
NORBIT’s board of directors
comprises five members, all of
which all were elected at the
company’s general meeting on
4 May 2021. NORBIT’s board
is composed to be able to act
independently of any special
interests. All directors are
deemed to be independent
of senior executives, material
business associates and the
company’s largest shareholders.
Tom Solberg (1962)
Director
Tom Solberg holds a Masters’ degree
in law and is currently the chair,
partner and lawyer in Pretor Advokat
AS. He also serves on the board of
directors of several other companies,
including as chair in Pretor Advokat
AS, Brilliant AS and Romy Clima AS in
Trondheim, and deputy chair in MSG
Production AS in Skien. Director since
January 2004, re-elected 4 May 2021
for a period of one year. Member of
the remuneration committee.
Solberg attended 15 board meetings in
2021 (100% attendance rate).
Number of NORBIT shares* at
24 March 2022: 65789
Trond Tuvstein (1972)
Director
Trond Tuvstein is currently the
CEO of Trym, a construction and
property development company.
Before Trym, Tuvstein was the CFO
of SalMar ASA in the period 2013
to 2019. Prior to that, he spent two
years as the company’s Head of
Investor Relations. In addition, he
has extensive accounting experience,
having worked in partner positions in
audit firms, PricewaterhouseCoopers
(PWC) and Systemrevisjon. Tuvstein’s
core competencies include financial
reporting, strategy and financing, as
well as mergers and acquisitions.
Director since May 2019, re-elected
4 May 2021 for a period of two years.
Chair of the audit committee.
Tuvstein attended 15 board meetings
in 2021 (100% attendance rate).
Number of NORBIT shares* at
24 March 2022: 32894
Marit Collin (1960)
Director
Marit Collin holds a Bachelor of
Science in economics from Trondheim
Økonomiske Høgskole. In addition,
Collin has attended the Master of
Management program at NTNU.
Collin has been the CEO of Kantega
AS since 2011. She serves as a
director of BN Bank ASA, Sparebank 1
Regnskapshuset SMN AS, Rosenborg
Ballklubb, and is the chair of Secure
Identity Holding AS. Director since
May 2019, re-elected 4 May 2021 for
a period of one year. Member of the
remuneration committee.
Collin attended 14 board meetings in
2021 (93% attendance rate) .
Number of NORBIT shares* at
24 March 2022: 41447
* Number of shares is including shares held
by related parties.
NORBIT ANNUAL REPORT 2021
21
BOARDOFDIRECTORS
NORBIT ANNUAL REPORT 2021
23
BOARDOFDIRECTORS’REPORT
NORBIT ASA reported good progress in 2021, with all-time high revenues, despite challenges relating
to the pandemic and shortage in supply of raw material components. Revenues came in at NOK 787.8
million, representing an increase of 27 per cent from 2020, with an EBITDA margin of 18 per cent, up
from 15 per cent in 2020. During the year, NORBIT provided an update on its ambitions and long-term
financial targets. The group's ambition is to deliver organic revenues in excess of NOK 1.5 billion and an
EBITDA margin above 25 per cent in 2024. In addition, NORBIT is continuing to pursue value-accretive
acquisitions to accelerate growth further. Based on the group's strong financial position and positive
long-term market outlook, the board proposes a dividend of NOK 0.30 per share for the fiscal year 2021.
OVERVIEW OF THE BUSINESS
The board of directors’ report for the NORBIT group (“NORBIT”
or “the group”) comprises NORBIT ASA (“the parent company”)
and all subsidiaries. The parent company, NORBIT ASA , is a
Norwegian public limited liability company.
Business and location
Trondheim, Norway, with production facilities at Selbu, Røros
and Trondheim in Norway. NORBIT has a global sales and
distribution platform with subsidiaries in Sweden, Denmark,
Poland, Austria, Hungary, Czech Republic, Slovakia, Croatia,
Italy, Singapore, Brazil, China, the UK and the US. NORBIT also
has ownership interests in two companies located in Germany
and Iceland, reported as associated companies.
NORBIT is organised in three business units: Oceans, Connectivity
and Product Innovation and Realization (PIR). Oceans delivers
tailored technology solutions to the global maritime markets
and the Connectivity segment is a leading supplier of solutions
for asset identification, monitoring and tracking. PIR oers R&D
products and services and contract manufacturing services to
key customers.
Through its three business segments, NORBIT has a diversified
business model where the segments are exposed to dierent
markets drivers, customer bases and risks. The group’s
diversified oering across its segments makes NORBIT well
positioned to meet various market scenarios.
A further description of each business unit is presented under
the section “Business segments”.
Core purpose, vision and values
NORBIT has defined its core purpose to be
“Explore More”
.
NORBIT’s vision is:
"To be recognised as world class, enabling
people to explore more"
. This is reflected in all the group’s
activities. From exploring customers’ needs and commercial
opportunities where NORBIT can bring new tailored technology,
to always exploring how to improve performance in all aspects.
The group has strong core values, deeply rooted in the
organisation, securing customer orientation and acting as
important guidelines in the daily work:
■
We deliver!
■
Safe under pressure
■
Refinement of talents
BOARD OF DIRECTORS’ REPORT FOR 2021
MOVING TOWARDS THE 2024 AMBITION LEVEL
NORBIT ANNUAL REPORT 2021
24
BOARDOFDIRECTORS’REPORT
Financial ambitions and strategic platform
Since 2010, NORBIT has grown its revenues by close to 30 per
cent per year on average, mostly organic, and at the same time
remained firm to the financial objective of growing profitably.
Successful components to the progress made have been:
■
a tailored growth strategy for each individual segment
■
relentless focus on market-driven innovation in carefully
selected niches
■
a strong corporate culture
■
a diversified business model
■
recruiting and refining top talent
■
maintaining control and proximity to highly robotised
in-house production in order to remain competitive
In 2021, NORBIT updated its ambitions and long-term financial
targets. NORBIT intends to reinforce the elements that have
served the group well in the past, and further capitalise on
its global sales and distribution platform and innovation
capabilities.
NORBIT has set out an ambition to deliver organic revenues
of NOK 1.5 billion and an EBITDA margin above 25 per cent
in 2024. In addition, NORBIT will continue to explore value-
accretive acquisitions through defined criteria to accelerate
growth further, although remaining disciplined. The group’s
diversified product oering, targeting multiple industries and
geographies, combined with the organisation’s ability to adapt
and to successfully introduce new market-driven innovation
makes the group robust.
NORBIT has a strategy for continued profitable growth through
investing in innovation. The strategic priorities for each segment
are described in more detail below.
Oceans
For segment Oceans, strategic priorities remain on broadening
the product portfolio and expanding into new geographies and
adjacent markets, capitalising on a global sales and distribution
platform. Market-driven innovation is a cornerstone in the
growth strategy. Successful launches of the WINGHEAD sonar
family and the Guardpoint surveillance sonar are two examples
of such innovation, where both are expected to contribute to
continued growth.
Oceans has set out an ambition to deliver organic revenues of
NOK 700 million and an EBITDA margin in excess of 35 per cent in
2024. In 2021, Oceans delivered NOK 378.5 million in revenues
and an EBITDA margin of 35 per cent.
Connectivity
In segment Connectivity, NORBIT has a strategy to grow the
new sub-segment Smart Data based on selected Connected
Solutions, complementing its strong position in the dedicated
short-range communication (DSRC) domain. The ambition with
Smart Data is to increase the share of income generated from
subscription-based business models, providing growth in
recurring revenues. Along with this strategy, Connectivity as a
whole will focus on investing in innovation by developing new
products and solutions, capitalising on its capabilities within
software and low power wireless devices for asset tracking,
identification and monitoring.
Connectivity has the ambition to deliver revenues of NOK 350
million in 2024, with an EBITDA margin in excess of 35 per cent.
In 2021, Connectivity delivered NOK 146.3 million in revenues
and an EBITDA margin of 16 per cent.
PIR
Benefiting from the investments made in increasing the
manufacturing capacity, the strategic objective in PIR remains
to organically grow the segment. PIR is experiencing increasing
demand, both supported by a general electrification trend and
an increasing preference among new clients to manufacture
products in geographical proximity to its operation. By having
in-house R&D and manufacturing capabilities, PIR can oer a
strong value proposition, supporting clients from prototype
development to full scale production.
PIR has the ambition to deliver revenues of NOK 450 million
in 2024, with an EBITDA margin between 8 and 10 per cent. In
2021, PIR reported NOK 291 million in revenues and an EBITDA
margin of 6 per cent.
FINANCIAL REVIEW
All amounts in brackets are comparative figures for 2020 unless
otherwise specifically stated.
The following financial review is based on the consolidated
financial statements of NORBIT ASA and its subsidiaries.
The statements have been prepared in accordance with the
International Financial Reporting Standards (IFRS).
In the view of the board, the income statement, the statements
of comprehensive income, changes in equity and cash flow, the
balance sheet and the accompanying notes provide satisfactory
information about the operations, financial results and position
of the group and the parent company at 31 December 2021.
Target
2024
Revenues
2021
Target
2024
EBITDA
2021
OCEANS
Revenues
– NOK million
EBITDA
– per cent
379
700 35%
>35%
Target
2024
Revenues
2021
Target
2024
EBITDA
2021
CONNECTIVITY
Revenues
– NOK million
EBITDA
– per cent
146
350
16%
>35%
Target
2024
Revenues
2021
Target
2024
EBITDA
2021
PIR
Revenues
– NOK million
EBITDA
– per cent
291
450
6%
8–10%
NORBIT ANNUAL REPORT 2021
25
BOARDOFDIRECTORS’REPORT
NORBIT ANNUAL REPORT 2021
26
BOARDOFDIRECTORS’REPORT
Pursuant to section 3-3a of the Norwegian Accounting Act, it
is confirmed that the accounts have been prepared based on
the assumption that NORBIT is a going concern, and the board
confirms that this assumption continues to apply.
Consolidated statement of income
Total operating revenues for 2021 amounted to NOK 787.8
million (NOK 618.8 million), corresponding to an increase of 27
per cent from the year before. The largest segment, Oceans,
achieved an increase in revenues of 42 per cent, driven by higher
sonar sales. Revenues from segment Connectivity in 2021 were
relatively stable, after a weak first half of the year. Segment PIR
reported revenue growth of 30 per cent. The increase from 2020
were attributable to higher sales of contract manufacturing and
R&D services.
Other gains and losses were NOK 1.2 million and relate to the
acquisition of 65 per cent of the shares in Kilmore Marine,
segment Oceans’ distributor in the UK and the Middle East,
where NORBIT previously had a 35 per cent ownership interest.
Raw material expenses and change in inventory were NOK 363.3
million (NOK 292.7 million).
Employee benefit expenses amounted to NOK 187.7 million
(NOK 155.6 million). The increase is primarily explained by the
acquisition of iData in 2021 and a general strengthening of the
organisation due to the higher activity level.
Other operating expenses were NOK 95.5 million (NOK 77.1
million). The increase from 2020 was primarily explained by
the iData acquisition, which represented NOK 15.7 million of
the increase.
Operating profit before depreciation and amortisation (EBITDA)
amounted to NOK 142.6 million (NOK 93.5 million), corresponding
to an EBITDA margin of 18 per cent (15 per cent). Adjusted for
transaction costs related to the iData acquisition, EBITDA was
NOK 150.0 million, equaling a margin of 19 per cent.
Depreciation and amortisation were NOK 69.0 million (NOK
49.1 million) with the increase explained by amortisation on
completed R&D investments and full year eect of depreciations
related to investments at the production facility at Røros and in
machinery and equipment.
Operating profit for 2021 was NOK 73.5 million (NOK 44.3
million).
Net financial items amounted to negative NOK 9.8 million for
the full year (expense of NOK 9.5 million), mainly explained
by reduced foreign exchange losses, oset by an increase in
interest expenses.
NORBIT recorded a profit before taxes of NOK 63.7 million (NOK
34.8 million). Tax expenses amounted to NOK 15.9 million for
2021 (NOK 7.5 million).
Consequently, profit for 2021 ended at NOK 47.9 million (NOK
27.3 million).
Consolidated statement of financial position
NORBIT had total assets of NOK 976.9 million at 31 December
2021, an increase from NOK 671.6 million at the end of 2020.
Total non-current assets amounted to NOK 503.8 million at 31
December 2021, up from NOK 345.1 million the year before, of
which the largest items include intangible assets and property,
plant and equipment.
Intangible assets rose to NOK 242.3 million (NOK 171.5 million)
primarily due to the acquisition of iData and the associated fair
value adjustments of the transaction, in total NOK 56.2 million.
Total investments in R&D during 2021 amounted to NOK 51.2
million (NOK 63.2 million), corresponding to 6.5 per cent of
revenues for 2021 (10.2 per cent).
Property, plant and equipment increased to NOK 164.9 million
(NOK 150.0 million) mainly explained by NOK 29.0 million
investments, a NOK 10.5 million reclassification of inventory
to property, plant and equipment and NOK 9.3 million related
to the iData acquisition, partly oset by depreciations of NOK
24.9 million.
Total current assets amounted to NOK 473.2 million, up from
NOK 326.5 million at 31 December 2020.
At 31 December 2021, inventories amounted to NOK 263.2
million, compared to NOK 164.6 million at the end of 2020. The
increase in the inventory level is primarily related to NORBIT
purchasing components to safeguard deliveries due to the
challenging situation in the market for the supply of raw material
components, as well as the underlying growth in activity.
Trade receivables were NOK 154.9 million at 31 December 2021,
up from NOK 121.4 million at the end of 2020, mainly explained
by an increase in revenues comparing fourth quarter 2021 with
the corresponding period of 2020.
NORBIT ANNUAL REPORT 2021
27
BOARDOFDIRECTORS’REPORT
Cash and cash equivalents amounted to NOK 21.7 million at 31
December 2021, up from NOK 15.0 million at the end of 2020.
Total liabilities were NOK 479.1 million at year-end 2021, up from
NOK 234.9 million as of 31 December 2020, of which the largest
items include interest-bearing borrowings and trade payables.
Total equity ended at NOK 497.9 million, up from NOK 436.8
million at 31 December 2020. This represents an equity ratio of
51 per cent (65 per cent). The increase is mainly explained by
NOK 47.9 million in profit for the period, and share issues of NOK
33.5 million, partly oset by NOK 17.0 million in dividends paid.
Consolidated statement of cash flows
Operating activities generated a cash flow of NOK 47.7 million
for 2021 (NOK 92.1 million), including a net increase in working
capital of NOK 83.7 million (decrease of NOK 8.7 million). The
increase is mainly driven by an increase in trade receivables
and inventories.
Cash flow used for investment activities was NOK 217.6 million
for the year (NOK 136.7 million). The investments mainly consist
of NOK 126.9 million related to the acquisitions of iData and
Kilmore Marine, NOK 51.2 million in R&D investments and NOK
39.5 million investments in property plant and equipment,
including a NOK 10.5 million reclassification of inventory.
Financing activities generated a cash flow of NOK 176.6 million
(NOK 37.8 million), primarily explained by an increase in net
interest-bearing borrowings of NOK 194.6 million. During 2021,
NORBIT distributed total dividends of NOK 17.0 million (NOK 34.1
million), equating to NOK 0.30 per share.
Financing and capital structure
At the end of 2021, NORBIT had NOK 288.2 million in interest-
bearing borrowings (NOK 94.7 million) and NOK 266.5 million
(79.7 million) when adjusting for cash and cash equivalents.
NORBIT had NOK 183.5 million in undrawn committed credit
facilities at 31 December 2021.
During the year, NORBIT entered into an agreement to refinance
and increase the credit limit on its revolving credit facility
(RCF) to NOK 200 million from previously NOK 150 million, and
established a new NOK 55 million term loan, strengthening the
liquidity with NOK 105 million. The maturity date for the RCF is
February 2025 and July 2024 for the term loan. The margin for
both loans is NIBOR + 1.8 per cent margin p.a. The term loan
amortises over 15 years. Covenants remain unchanged.
NORBIT has a policy of maintaining a leverage ratio, defined as
net-interest-bearing borrowings (including leasing liabilities)
divided by EBITDA, in the range of 1.0 – 2.5x. At the end of
2021, the ratio was 1.8x (1.0x). The equity ratio was 51 per cent
(65 per cent). Further information regarding NORBIT’s capital
management policy can be found in Note 20 to the financial
statements.
PARENT COMPANY RESULTS AND ALLOCATION OF
NET PROFIT
The financial statements for the parent company are prepared
in accordance with the Norwegian Accounting Act and generally
accepted accounting principles in Norway.
The parent company had a profit before taxes of NOK 49.8
million (a profit of NOK 38.2 million). After a tax expense of
NOK 17.0 million, the company recorded a net profit of NOK 32.8
million (net profit of NOK 29.8 million).
Dividends
The board proposes the following allocation of the net profit
for the parent company:
Amounts in NOK million
Dividend (NOK 0.30 per share)
17.5
Transferred to other equity
15.3
The proposed dividend is in line with the dividend policy, which
is to distribute annual dividends in the range of 30 to 50 per
cent of the group’s ordinary net profit after tax.
When evaluating the dividend proposal, the board of directors
considers NORBIT’s financial position, investment plans as well
as the financial flexibility needed to provide for sustainable
growth. The board considers NORBIT’s financial capacity for
further growth to be strong. Furthermore, the board of directors
has concluded that the group will have equity and liquidity after
paying the proposed dividend which is acceptable in relation to
the risks and scope of its activities.
The proposed dividend will be considered at NORBIT’s annual
general meeting on 4 May 2022.
For the fiscal year 2020, NORBIT paid dividends in the aggregate
amount of NOK 17.0 million (NOK 0.30 per share).
28
NORBIT ANNUAL REPORT 2021
29
BOARDOFDIRECTORS’REPORT
SEGMENT INFORMATION
NORBIT is organised in three operating segments: Oceans,
Connectivity and Product Innovation and Realization (PIR).
Oceans
Financial review
Revenues for the segment amounted to NOK 378.5 million
in 2021, representing an increase of 42 per cent from 2020
(NOK 267.2 million). Growth was mainly attributed to strong
sonar sales, where revenues increased across all geographies
compared to the corresponding period of 2020.
The segment has a highly diversified customer base worldwide
with the five largest customers in 2021 accounting for
approximately 10 per cent of revenues. Revenues were equally
split between Americas, Europe/Middle East and Asia-Pacific
in 2021.
Operating expenses for segment Oceans, including employee
expenses and other operating expenses, amounted to NOK 105.6
million for 2021 (NOK 87.8 million). The increase is explained by
the inclusion of NORBIT Kabelpartner in the Oceans segment
(reported within PIR in 2020), representing NOK 21.7 million of
the increase.
EBITDA for the Oceans segment was NOK 133.6 million for 2021
(NOK 59.6 million), representing a margin of 35 per cent (22
per cent). The improved results are due to operational leverage
following growth in revenues and a favourable product mix in
the sonar business.
Connectivity
Financial review
Revenues for Connectivity amounted to NOK 146.3 million for
2021 (NOK 145.1 million), after experiencing a weak first half of
the year. iData reported NOK 33.2 million in revenues in the
period of August to December. Revenues were impacted by a
particularly challenging first half of the year for sub-segment
ITS, where the pandemic and the exposure to the European
automotive industry resulted in lower volumes sold.
Operating expenses for segment Connectivity amounted to NOK
72.0 million for the full year of 2021 (NOK 33.4 million). The
increase is primarily related to operating expenses in iData of
NOK 25.0 million, increased use of external consultants and
increased production cost for ITS related products.
For the full year of 2021, EBITDA for Connectivity totalled NOK
23.8 million (NOK 42.5 million), representing an EBITDA margin
of 16 per cent (29 per cent). The decline in EBITDA and margin is
primarily explained by higher operating expenses and the weak
first half experienced by sub-segment ITS with low profitability.
Product Innovation and Realization (PIR)
Financial review
Revenues for PIR amounted to NOK 291.0 million for 2021 (NOK
224.6 million), representing an increase of 30 per cent as a
consequence of higher sales of contract manufacturing and
R&D services. In 2021, contract manufacturing represented 75
per cent of the revenues in the segment, while R&D services
and products represented the remainder. Within contract
manufacturing, approximately 70 per cent of the revenues
relates to the automotive industry.
Operating expenses for the PIR segment amounted to NOK 93.6
million for 2021 (NOK 110.8 million). The reduction from last year
is primarily explained by the reclassification of Kabelpartner to
segment Oceans.
The PIR segment recorded an EBITDA for the year of NOK 16.4
million (NOK 2.3 million), representing a margin of 6 per cent
(1 per cent). The improved results are mainly attributed to the
higher revenue base combined with lower operating expenses.
EVENTS AFTER THE BALANCE SHEET DATE
■
Oceans was awarded an order for multiple Guardpoint
surveillance sonar systems for a total value of NOK 20
million with delivery in the second quarter of 2022
■
Connectivity secured several important contracts,
including a NOK 30 million order from Toll Collect, a
NOK 25 million extension order for OBUs to a European
customer, a NOK 15 million order for OBU’s from a French
customer, and an agreement with Flyt AS was entered
into for delivery of OBUs
■
NORBIT strengthened its liquidity with NOK 120 million by
refinancing its overdraft facility, and entered into a NOK
110 million non-recourse factoring agreement
■
NORBIT announced it was in exclusive negotiations
regarding an add-on acquisition of an undisclosed
international maritime company, to be included in
segment Oceans if acquired. The target company is
valued at USD 3.6 million on a cash- and debt-free basis,
expected to be financed 65 per cent by cash and 35 per
cent through a private placement of shares
NORBIT ANNUAL REPORT 2021
30
BOARDOFDIRECTORS’REPORT
RESEARCH AND DEVELOPMENT
Investments in research and development (R&D) is an important
part of NORBIT’s strategy to develop new and innovative
technological solutions and remains an important part of the
group’s strategy going forward. For 2021, the group invested a
total of NOK 51.2 million in R&D (NOK 63.2 million), representing
6.5 per cent of the revenues for the year. A significant part
of NORBIT’s investments in R&D in 2021 was allocated to
segment Oceans and Connectivity to further broaden the
product oering.
In 2022, NORBIT expects its R&D investments to be between
NOK 50 and 60 million.
RISKS AND RISK MANAGEMENT
NORBIT is subject to several risks which may aect the group’s
operations, performance, finances and share price. These risk
factors are further described below. These risks are monitored
by the corporate management and reported to the board on a
regular basis.
Operational risk
NORBIT considers shortage of supply of consumables/electronic
components to be the main operational risk. While production
is an in-house capability, NORBIT relies on a significant supply
of electronic components to produce and deliver its equipment
and systems. A large portion of the electronic components are
bought in a global market. The current supply environment
for raw material components continues to be challenging,
particularly within the semiconductor industry. The supply
market is characterised by low visibility as lead times have
increased and remains unreliable due to capacity constraints,
both on manufacturing as well as transportation and freight.
This impacts the scheduling of planned deliveries leading to
delays and, in the worst case, cancellation of planned orders.
There is also a risk that customers may cancel orders due to
challenges in their own supply chain beyond the scope of
NORBIT.
NORBIT has maintained a strategy of keeping extra inventory of
electronic components to maintain flexibility, which has been a
successful strategy in the current component market.
NORBIT is working actively to mitigate the risk of supply
shortages by increasing inventory levels, evaluating the use
of component equivalents in close dialogue with customers,
as well as working with suppliers to secure the raw material
components needed to deliver according to plan.
Market risk
The activities of the group are international, with the delivery of
high-technology products, systems and solutions with related
services to a variety of markets and customers. Market risk
can therefore vary somewhat within these dierent segments.
Further, the group has exposure to a wide range of industries
through its engineering and manufacturing services and covers
amongst other various industrial customers.
Each operating segment is exposed to a separate competitive
landscape. Increased competition in the markets where the
group operates may have a material adverse eect on the
group’s business, results and cash flow.
Geopolitical risk
NORBIT is a global group of companies with close to 80 per cent of
its revenues generated outside of Norway. As a result, NORBIT’s
operations are subject to a variety of country, regulatory and
political risks, including, but not limited to, regulatory changes,
trade barriers, restrictive government actions and changes in
law and government policies. Sourcing of components might
also be subject to taris or increased costs, which may not be
recoverable.
NORBIT has almost no direct exposure to Ukranie and Russia.
However, the war in Ukraine could have indirect eects on
NORBIT through the supply chain, which may lead to inflationary
pressure, disruptions and shortage of components
Pandemics
The Covid-19 virus caused global disruption throughout 2021
and impacted NORBIT’s supply chain across its operating segments.
The number of new covid-19 cases increased significantly at the
end of the year. A broader infection throughout the organisation
poses a risk that production processes might temporarily stop due
to sick leave, which might impact revenues and cash flow in such
periods. The pandemic has also had financial consequences on
certain of the partners NORBIT trade with, resulting in particularly
increased credit risk on trade receivables NORBIT has outstanding
at any given time. Furthermore, pandemic outbreaks could also
occur in the future and may impact NORBIT’s operations, business
activity and finances.
Financial risk
NORBIT is exposed to several financial risks. Note 5 to the
financial statements explain the group’s exposure to financial
risks and how these could aect the group’s future financial
performance. Financial risks are managed centrally by the
finance department.
NORBIT ANNUAL REPORT 2021
31
BOARDOFDIRECTORS’REPORT
Interest rate risk
The group’s main interest rate risk arises from borrowings with
variable rates in EUR, USD and NOK, which expose the group to
cash flow interest rate risk. NORBIT has no financial instruments
designated to hedge interest rate risk.
Trade and other receivables and trade and other payables are
interest free and with a term of less than one year, hence there
is no interest rate risk associated with these financial assets
and liabilities.
Currency risk
NORBIT has international operations and clients and is exposed
to currency risk through customer contracts and purchase of
products and services in currencies other than the functional
currency (NOK). NORBIT is primarily exposed to EUR and USD
currencies.
Fluctuations in exchange rates can lead to increased or
decreased profit margin in contracts with customers compared
to the initial project calculus. The group was a net seller of EUR
and a net buyer of USD during 2021.
The group rebalances the short-term (within 90 days) main
currency exposures on a monthly basis in order to have a neutral
currency position on trade receivables, trade payables and cash.
There is currently an ongoing process to optimise the medium
to long-term hedging practice.
Credit risk
The group is exposed to credit risk related to cash and cash
equivalents, trade receivables and other current receivables.
Cash is held with reputable banks with strong credit ratings,
implying a low credit risk. Receivables carry a higher credit
risk due to the fact that NORBIT conducts its business with a
fragmented customer base. Historically, NORBIT has had limited
losses on its receivables.
The exposure to credit risk is monitored on an ongoing basis
within the finance department as a risk mitigating action. The
group’s receivables are not credit insured.
Liquidity risk
Liquidity risk is the risk that the group is unable to meet the
obligations associated with its financial liabilities. For NORBIT,
liquidity risk is managed by maintaining sucient cash deposits
and available committed credit lines that the group can draw
on to meet its obligations as they occur. NORBIT has a centrally
managed multi-currency cash pool arrangement where most
subsidiaries are connected. The liquidity trend is monitored
frequently, supported by budgets and forecasts.
At 31 December 2021, NORBIT had NOK 183.5 million in undrawn
credit facilities.
CORPORATE GOVERNANCE
NORBIT ASA is subject to annual corporate governance reporting
requirements under §3-3b of the Norwegian Accounting Act
and the Norwegian Code of Practice for Corporate Governance,
cf. section 4.4 of the Oslo Stock Exchange Rule Book II. The
Accounting Act may be found (in Norwegian) at
www.lovdata.no
.
The Norwegian Code of Practice for Corporate Governance may
be found at
www.nues.no
. NORBIT ASA follows the Norwegian
Code of Practice for Corporate Governance, and the company’s
practice is in accordance with these recommendations. The
annual statement on corporate governance for 2021 has been
approved by the board and can be found in the ESG section on
page 43 of this annual report.
CORPORATE SOCIAL RESPONSIBILITY
NORBIT is required to report on its corporate social responsibility
and selected related issues under §3-3a and §3-3c of the
Norwegian Accounting Act, as well as provide an annual
statement on its eorts to secure equal opportunities under
§26-a in the Equality and Anti-discrimination Act of Norway.
NORBIT has chosen to report on its eorts to integrate
environment and climate issues, social conditions and working
environment (hereunder injuries, sickness leave, equality and
non-discrimination, respect for human rights and measures
against corruption and bribery) in the separate ESG report,
approved by the board of directors. The detailed reporting on all
relevant topics can be found from page 35 of this annual report.
EMPLOYEES AND ORGANISATION
In 2021, NORBIT had an average workforce of 311 full time
equivalents (FTEs), compared to an average of 246 in 2020.
NORBIT is a global group of companies with employees in 15
countries.
NORBIT ANNUAL REPORT 2021
32
BOARDOFDIRECTORS’REPORT
Number of full-time equivalents:
Country
Average 2021
Per year-end
Norway
233
246
USA
5 5
Hungary
59
117
Austria
2 2
Poland
1 1
Italy
2 2
Singapore
2 2
China
1 1
Denmark
0 1
United Kingdom
3 3
Czech Republic
0 1
Croatia
4 8
Slovakia
1 3
Total
311
391
Employee share purchase programs
In July, the board of directors introduced incentive share
purchase programs for all employees in NORBIT. In total, 98
employees participated in the programs, representing close
to 40 per cent of the total employees eligible for participation.
Changes to the executive management and board of
directors
The Articles of Association provide that the board of directors
shall consist of a minimum of three and a maximum of seven
directors elected by NORBIT ASA’s shareholders. The board
consists of Finn Haugan (chair), Bente Avnung Landsnes (deputy
chair), Trond Tuvstein, Marit Collin and Tom Solberg.
The board of directors was elected on the company's general
meeting on 4 May 2021, and there were no changes to the board
of directors in 2021.
Directors and ocers liability insurance
NORBIT ASA has a directors and ocers liability insurance
with AIG for the group, including the parent company and its
subsidiaries. The insurance covers the board members, CEO and
members of the management team. The insurance comprises
personal legal liabilities, including defence and legal costs.
SHARE AND SHAREHOLDER MATTERS
NORBIT ASAs shares are listed at Euronext Oslo Børs (Oslo Stock
Exchange) under the ticker “NORBT”.
During 2021, the share traded between NOK 17.40 and NOK
35.40 per share, with a closing price of NOK 31.30 at year-end
2021.
At 31 December 2021, NORBIT ASA had a total of 1 384
shareholders, of which the 20 largest shareholders held 83.8
per cent of the total outstanding shares. NORBIT ASA has a total
of 58 459 302 issued and outstanding shares as at year-end
2021. There were no treasury shares or options outstanding at
the same date.
NORBIT ASA’s annual general meeting for 2022 is planned
to be held at the company’s headquarter, Stiklestadveien 1,
Trondheim, on 4 May 2022 16:00 CET.
Equity issues
In connection with the share purchase programs to employees,
the board of directors of NORBIT ASA resolved to increase the
parent company’s share capital by NOK 46 021.90 through the
issuance of 460 219 new shares, each with a par value of NOK
0.10. The resolution was based on the authorisation to increase
the share capital granted by the general meeting on 4 May 2021.
As settlement for the acquisition of iData, completed on 30
July 2021, the board of directors resolved to issue 1 212 165
new shares as a private placement to the sellers of iData at a
subscription price of NOK 20.65.
OUTLOOK
In 2021, NORBIT made good progress towards its 2024 ambition
level despite experiencing challenges relating to the pandemic
and shortage in supply of components. In total, NORBIT grew
its revenues by 27 per cent from 2020. Supported by the higher
revenue base and operational leverage, profitability increased
with particularly segment Oceans contributing with strong
results. The board wishes to thank its external stakeholders
for their continued support, as well as thank all employees for
their eorts and for the results achieved in 2021.
As NORBIT enters a new year, the board of directors is optimistic
about the outlook. The target for 2022 is to deliver revenues
in excess of NOK 1.0 billion, supported by growth in all three
business segments. As in previous years, quarterly seasonal
fluctuations are expected, along with the impact of currency
movements as a substantial share of NORBIT’s revenues is
NORBIT ANNUAL REPORT 2021
33
BOARDOFDIRECTORS’REPORT
Trondheim, Norw
ay, 24 March 2022
The board of directors and CEO
NORBIT ASA
Finn Haugan
Bente Avnung Landsnes Tom Solberg
Chair of the board Deputy chair of the board
Director
Trond Tuvstein
Marit Collin
Per Jørgen WeisethaunetDirector Director
Chief executive ocer
denominated in foreign currencies. Longer term, NORBIT has set
out an ambition to deliver organic revenues of NOK 1.5 billion
and an EBITDA margin above 25 per cent in 2024. In addition,
NORBIT will continue to explore value-accretive acquisition
through its defined criteria to accelerate further growth.
Continued long-term growth will require further investments
in R&D to broaden the product portfolio and in manufacturing
equipment. In 2022, NORBIT expects its R&D investments
to be NOK 50–60 million, while investments in fixed assets
are anticipated to be NOK 40–50 million. The increase from
2021 reflects investments in two production lines to support
underlying demand from existing and new customers.
For the fiscal year 2021, the board of directors proposes a
dividend of NOK 0.30 per share, in line with the company’s
dividend policy. When proposing the annual dividend, the board
of directors has considered the company’s financial position,
investment plans and the needed financial flexibility to provide
for sustainable growth. Considering NORBIT’s solid liquidity
position, the board of directors considers the financial capacity
for further profitable growth to be strong.
In 2021, a NORBIT iWBMS underwater
multibeam sonar was used during Save the
White, a 20-day scientific expedition around
the Svalbard archipelago, logging 1300
nautical miles. The activity allowed the
team to produce new data is partially
charted or completely uncharted
regions of the archipelago,
identifying potential corridors
for navigation several points of
very shallow waters.
NORBIT ANNUAL REPORT 2021
35
ESG REPORT
At NORBIT, we act and
conduct business with
integrity and transparency.
Part of this also includes
transparent reporting and
disclosure of how the group's
day-to-day operations impact
environmental, social and
governance factors. NORBIT
aims to create value for customers,
shareholders, employees, and society;
first and foremost, by producing a variety
of specialised products and solutions that
support the customers' sustainability strategies.
NORBIT’s license to operate rests on confidence from its key
stakeholders. All employees are therefore committed to comply
with the group’s code of conduct to ensure maintenance of high
ethical standards in its business concept and relations with
customers, suppliers and employees. The ethical guidelines
apply to all employees and include, among others, guidelines
on personal conduct, conflicts of Interests, anti-corruption and
fair competition.
The ambition is to contribute to sustainable development both
in terms of acting responsible in the group’s own value chain
(internal focus), as well as developing and selling products that
contribute to solving sustainability challenges for customers
and the society at large (external focus).
COMMITTED TO MAKING UN GLOBAL COMPACT
PRINCIPLES A PART OF DAILY OPERATIONS
NORBIT is committed to making the UN Global Compact and
its principles part of the group strategy, culture and day-to-
day operations.
As part of this commitment, NORBIT reports on practical actions
taken or planned by the group to implement the UN Global
Compact principles and measurement of outcomes of these
actions. NORBIT has submitted a Communication on Progress
Report in March 2022, describing undertaken activities and
outcomes in 2021. This report can be found on the UN Global
Compact's website
www.unglobalcompact.org
.
Supporting our customers’ sustainability strategies
NORBIT also aims to create value for customers, shareholders,
employees and the society at large; first and foremost, by
producing a variety of specialised products and solutions that
support the customers’ sustainability strategies within two
main areas; digital transformation and blue economy.
As part of the progress report to the UN Global Compact,
NORBIT has identified four sustainable development goals
(SDGs) that the group contributes to today and will continue
to work towards in the future:
ESG REPORT
9
8
7
6 5
4
3
2
1
10
H
U
M
A
N
R
I
G
H
T
S
L
A
B
O
U
R
S
T
A
N
D
A
R
D
S
E
N
V
I
R
O
N
M
E
N
T
C
O
R
R
U
P
T
I
O
N
A
N
T
I
-
Business should work
against corruption in all
its forms, including
extortion and bribery.
Business should support
and respect the protection
of internationally pro-
claimed human rights.
Business should
uphold the freedom
of association and the
eective recognition
of the right to
collective bargaining.
Business should
uphold the elimination
of all forms of forced
and compulsory
labour.
Business should
uphold the eective
abolition of child labour.
Business should
support a precautonary
approach to
environmental
challenges.
Business should
undertake initiatives
to promote greater
environmental
responsibility.
Business should
encourage the
development of
environmentally
friendly technologies.
Business should
uphold the elimination
of discrimination in respect
of employment and
occupation.
Business should make
sure that they are not
complicit in human
rights abuse.
NORBIT ANNUAL REPORT 2021
36
ESG REPORT
ENVIRONMENT
NORBIT's ambition is to create environmental value. "Doing
more with less" is the group environmental tag, which is
reflected in the group's Code of Conduct. The following
information provides examples of the group's standards and
ongoing initiatives relating to environmental considerations. In
addition, NORBIT intends to identify and implement additional
activities in line with SDG 13 and 14, reducing CO
2
emissions
from the transportation sector and sustainably using the
oceans, both of which are priority areas for the group.
Oceans and the Blue Economy
The oceans are an integral part of the world economy, from
harvesting of seafood and extraction of resources such as
minerals and energy to maritime commerce and transport.
Today, ocean industries, known as the Blue Economy, have an
estimated turnover of between USD 3 and 6 trillion annually,
according to the UN, but are expected to become even more
important over the next decades. DNV GL forecast a nine-fold
increase in demand for ocean space for sustainable aquaculture
and energy production towards 2050, made possible by
technology innovation.
The Blue Economy brings endless opportunities, but there is
also a need to find solutions that protect marine biodiversity
and ensures safe operations at sea. Within segment Oceans,
there are five main areas where Oceans’ technology and
products are well-positioned to support in the Blue Economy:
safety of navigation, renewable energy, security, fisheries and
environmental monitoring.
Within marine transport, Oceans oers tools for safe underwater
navigation and our high-performance sonars are used when
conducting maintenance or construction of infrastructure such
as quay walls, bridges and pipelines.
For marine renewable energy projects, Oceans has solutions
for permitting surveys, planning surveys, construction and
maintenance support as well as planning of water resources
and reservoirs. Towards 2050, Blue Economy investments in
oshore wind will exceed oil and gas according to DNV GL.
Creating safe and decent
work conditions
NORBIT develops and oers
technology to detect threats,
both to humans, assets, and
infrastructure. This technol
-
ogy enables safe and decent
work conditions for dierent
occupational groups, ranging
from truck drivers to platform
workers.
Stimulating innovation in a
range of dierent industries
NORBIT is oering R&D services
and contract manufacturing ser
-
vices realising ground-break
-
ing innovations, systems, and
solutions for industrial custom
-
ers in markets such as automo
-
tive, medical, security, energy,
marine and subsea.
Reducing CO
2
emissions from
the transportation sector
The transport sector is respon
-
sible for one third of global CO
2
emissions. NORBIT’s solutions
withing fleet management con
-
tribute in reducing the CO
2
emis
-
sions from the transport sector,
for instance by route optimi
-
sation.
Sustainability using
the oceans
NORBIT delivers tailored tech
-
nology and solutions to the
global maritime markets. Com
-
bining remote sensing technol
-
ogies with state-of-the-art data
fusion and artificial intelligence,
the user gets information and
tools to increase eciency and
reduce cost, while at the same
time ensuring the safety of the
environment and marine assets.
NORBIT ANNUAL REPORT 2021
37
ESG REPORT
ENVIRONMENTALMONITORING
■
Bottom classification for environmental protection
■
Ponds detection/documentation
■
Pollution and oil spill detection
FISHERIES
■
OEM OLEX for habitant detection for planning
of asset deployed on seafloor
OCEANS AND THE
BLUE ECONOMY
SECURITY
■
Disaster help, fly in assets
■
Surveys for support of dive sites
■
Securityof sites
RENEWABLE ENERGY
■
Permitting surveys
■
Planning surveys
■
Construction support
■
Planning of water resources/reservoirs
SAFETY OF NAVIGATION
■
Maintenance of infrastructure
■
Construction of infrastructure
NORBIT ANNUAL REPORT 2021
38
ESG REPORT
Fisheries are expected to have a key role in transforming food
systems and eliminating hunger and malnutrition, according
to The Food and Agriculture Organization (FAO). Oceans
provide solutions for habitant detection for planning of asset
deployed on seafloor, in addition to technology and services
to the aquaculture segment allowing for sustainable growth of
ocean related proteins.
Over recent years, Oceans has built up a strong presence within
environmental monitoring through its SeaCOP Surveillance
System. The purpose of the system is to give the user situational
awareness, information and tools to increase eciency and
reduce cost, at the same time ensuring the safety of people, the
environment and marine assets. In 2021, sales of such solutions
represented approximately 15 per cent of Oceans’ revenues.
Connectivity’s contribution to lower CO
2
emissions
Through Connectivity, NORBIT enables our clients to further
digitise and make their operations and logistics more eective,
with optimised planning of routes resulting in reduced trac.
Sub-segment Smart Data has systems and software designed
to monitor, control and protect vehicles through fleet
management, using real-time data to determine the current
location of a vehicle or asset and allowing for improved route
planning, including identifying more fuel-ecient roads.
Certifications
NORBIT has three production facilities, of which two are
certified according to the international standard that specifies
requirements for an eective environmental management
system, ISO 14001. The third production site is in process
of being Eco-Lighthouse certified. The three manufacturing
sites have dierent KPIs defined for electricity and water
consumption.
Energy eciency
In 2020, NORBIT completed the expansion of the production
facility at Røros. The new facility was built with energy eciency
in mind, with thermal energy storage as the main energy source.
Vendor assessment
In 2021, NORBIT completed the development of a new supplier
quality management system, expecting the system to be rolled-
out during 2022.
SOCIAL
At year-end 2021, NORBIT had 391 full-time equivalents across
15 jurisdictions. NORBIT's main asset is its employees. NORBIT's
core value "Refinement of talents" serves as a guiding principle
for continuous development of all employees' skills and
personal attributes. NORBIT strives to protect all its employees'
health, safety, human rights, and labour rights. NORBIT also
conducts its work maintaining a high ethical standard in its
business concept and relations with customers, suppliers and
employees. NORBIT's Code of Conduct describes the group's
policies and goals related to these standards.
Labour rights
NORBIT complies with established standards and employment
legislation. The Code of Conduct is founded on key UN and
International Labour Organisation (ILO) conventions and
documents. NORBIT employees have the right to join or form
trade unions of their own choosing and to bargain collectively.
Workers’ representative roles are established, and such
employees have access to carry out their representative
functions in the workplace. NORBIT describes employees'
rights, compensation, benefits, and responsibilities through
several policy documents.
Working environment
NORBIT shall promote a working environment characterised by
diversity, equality, and mutual respect. This includes providing
equal opportunities for all employees in an inclusive work
culture. NORBIT appreciates that every individual is unique
and valuable and should be respected for his or her individual
abilities.
Diversity
NORBIT is committed to promoting diversity. NORBIT is a global
group of companies with oces in 15 countries worldwide,
having employees of 22 dierent nationalities. NORBIT’s
employees have a broad and diversified background, both
culturally as well as by education and work experience.
Dierent expertise and experience contribute positively to
NORBIT's development.
NORBIT is supportive of gender diversity, strengthening the
collaborative foundation between employees. Within the group,
the gender balance varies across functions. Of the total 311
FTE’s in the group, 88 are women, giving a female percentage
of the workforce of 28 per cent. The board of directors consists
of five members, of which two were women, while six out of six
members of the management team are men. In 2021, the group
had 43 part-time employees, of which 70 per cent were women
and 30 per cent were men, and 65 temporary employees of
which 74 per cent were men and 26 per cent were women.
There were no involuntary part-time engagements in the group
in 2021. During 2021, 10 Norwegian employees, divided into 8
Oceans has solutions for permitting
surveys, planning surveys, construction
and maintenance support as well
as planning of water resources and
reservoirs.
Photo: XOCEAN Ltd
NORBIT ANNUAL REPORT 2021
40
ESG REPORT
men and 2 women, had parental leave. The average parental
leave in the Norwegian companies was 15 weeks for men and
23 weeks for women. NORBIT follows applicable laws and
regulations governing parental leave.
Equality
NORBIT strives to ensure that work of equal value shall
receive equal pay, regardless of social dierences. Salaries
are determined based on a variety of factors, including, but
not limited to, seniority, performance, responsibility and
qualifications. Salary adjustments are carried out once a
year. Salary levels vary across jurisdictions depending on
competition for such resources and the general wage level
of the countries NORBIT operates in. As a general guideline,
NORBIT shall provide competitive salaries, but not be market
leading. In addition to salaries, employees have pension and
insurance schemes, which is governed by the employment
agreements. All employees with 50 per cent working interest
or more are entitled to participate in employee share incentive
programs.
In 2021, NORBIT carried out a salary survey for its Norwegian
companies in the group. The table below sets out the results of
the survey. The salary gap between women and men is found
in the administration / other category and is primarily explained
by a larger share of men being employed in senior positions.
Number of employees
Female
Men
Ratio female to
male (average)
Overall (excl executive
management team)
80
167
83%
Engineers
6
67
100%
Production
42
103%54
Administration / other
32
46
82%
Respect
NORBIT does not accept any form of harassment or
discrimination based on gender, religion, race, national or
ethnic origin, cultural background, social group, disability,
sexual orientation, marital status, age, or political opinion. This
is governed by NORBIT’s Code of Conduct, which all employees
are obliged to follow according to the employment agreement.
Whistleblowing is an important channel for receiving information
about negative issues so that they can be properly corrected
and followed up. NORBIT encourages its employees to report
suspected or actual occurrences of inappropriate, unethical,
or illegal events or breaches of the Code of Conduct. NORBIT
has therefore drawn specific guidelines for whistleblowing,
including whom to report to, how to report and how the group
is required to act on the report. There were no such incidents
reported in 2021.
Recruiting
As a growing group, NORBIT is in continuous search of
new skilled employees. Recruiting is generally carried out
through open channels, and in certain cases with support
from recruitment agencies. The recruitment agencies are well
familiar with NORBIT’s values and Code of Conduct. NORBIT
welcomes all relevant applications to its open positions, and
we treat applications with strict confidentiality.
Employee relationships and satisfaction
NORBIT gives each employee considerable scope in making
decisions regarding their work. This implies a significant
degree of freedom and places a substantial responsibility on
employees.
The organisational culture shall be characterised by openness
and good internal communication so that any misconduct or
problems can be addressed, discussed, and resolved in a timely
manner. All NORBIT employees are encouraged to report any
incident of discrimination.
According to an employee satisfaction survey conducted during
2021, the working environment in the group is perceived as
very good.
Health, safety and security
A safe, secure, and healthy working environment is a key priority
in the group, and this applies wherever the group operates. The
specific business units have defined safety routines and work
instructions for the use of potentially harmful tools.
NORBIT has defined specific KPIs for HSS related injuries and
sick leave. NORBIT strives for zero injuries, and in 2021 no
significant injuries or accidents were recorded. NORBIT is
working proactively to maintain a low sick leave. The group
had 3.3 per cent sick leave in 2021, compared to 3.5 per cent
in 2020. Sick leave within the Norwegian workforce is lower
than the country average of approximately 6.5 per cent (as of
Q3 2021), according to Statistics Norway.
Ethical standards
NORBIT maintains a high ethical standard in its business concept
and relations with customers, suppliers and employees. The
following ethical guidelines are practised in the group and apply
to all employees:
NORBIT ANNUAL REPORT 2021
41
ESG REPORT
REVOLVE NTNU
An independent student organisation at the
Norwegian University of Science and Technology
with more than 60 members who work voluntarily to
develop and build a race car from scratch in one year,
since 2017. The car competes in one of the largest
engineering competitions for students in the world,
Formula Student.
PROPULSE NTNU
A rocketry team that aims to give students hands-on
experience with engineering projects. The students
join the team as an extracurricular activity on a
voluntary basis with the goal of learning as much as
they can about rockets, engineering and teamwork.
ORBIT NTNU
A non-profit student organisation that has designed
and build Norway’s first operational student satellite,
FRAMSat-1. The satellite will be launched in 2022 in
the ISAR Spectrum rocket from Andøya Space Center,
Norway. Orbit’s first mission, SelfieSat, is set to launch
summer 2022 on a SpaceX Falcon 9.
ASCEND NTNU
An aerial robotics team consisting of students with
a goal to become the best performing team at the
International Aerial Robotics Competition, American
Venue, and the AlphaPilot competition. Ascend NTNU
aims high, work hard, and create new and innovative
solutions to some of the most challenging problems
in cybernetics and autonomy as of today.
SELECTED STUDENT SPONSORSHIPS:
NORBIT ANNUAL REPORT 2021
43
ESG REPORT
1.
Personal conduct:
All employees and representatives of
the group shall behave with respect and integrity towards
business relations and partners, customers and colleagues.
The executive management team has a particular
responsibility to promote openness, loyalty and respect.
2.
Conflict of Interests:
Employees or representatives
shall avoid situations in which a conflict between their
own personal and/or financial interests and the group's
interests may occur.
3.
Confidential Information:
Employees or representatives
of the group possessing confidential information related
to the group shall conduct themselves and safeguard
such information with great care and loyalty and comply
with any and all signed confidentiality statements.
4.
Competition:
The group supports fair and open
competition. Employees and representatives shall never
take part in any activities that may constitute a breach of
competition legislation.
5.
Influence:
Employees and representatives shall neither
directly nor indirectly oer, promise, request, demand,
or accept illegal or unjust gifts of money or any other
remuneration in order to achieve a commercial benefit.
NORBIT has zero-tolerance for any form of corruption, bribery,
fraud, or dishonesty. This means that NORBIT has no tolerance
for paying, facilitating, or receiving any bribes or facilitation,
payments, extortion, kickbacks or any other improper private
or professional benefits to customers, agents, contractors,
suppliers or employees of any such party or government
ocials.
Supporting the engineers of the future
NORBIT’s recruiting strategy includes oering internships to
students. As part of the internship programmes, the students
learn and experience how technology can innovate and be
applied in various contexts. During 2021, the group had 20
internship positions within R&D across Oceans, Connectivity
and PIR.
NORBIT also contributes with both monetary support and non-
financial initiatives to various student organisations in order
to stimulate the engineers of the future to become interested
in innovation and development. In close collaboration with
educational institutions, NORBIT inspires a new generation of
engineers to explore the technology area in search of new
knowledge.
Community engagements
NORBIT aspires to be a positive contributor in the societies
where the group has operations. This covers various
activities, ranging from providing reflective vests to children in
kindergartens, to being a proud sponsor of several local sports
associations. In 2021, NORBIT provided monetary support to
over 10 local sport associations.
COPORATE GOVERNANCE
Report on the Norwegian Code of Practice for
Corporate Governance
NORBIT aims to maintain a high standard of corporate
governance. Good corporate governance strengthens the
confidence in the group and contributes to long-term value
creation by regulating the division of roles and responsibilities
between shareholders, the board of directors and executive
management.
Corporate governance at NORBIT ASA (the “company”) shall
be based on the following main principles:
■
All shareholders shall be treated equally
■
NORBIT shall maintain open, relevant and reliable
communication with its stakeholders, including its
shareholders, governmental bodies and the public about
its activities
■
NORBIT’s board of directors shall be autonomous and
independent of the executive management
■
The majority of the directors shall be independent of
major shareholders
■
There shall be a clear division of roles and responsibilities
between shareholders, the board and management
NORBIT’s corporate governance principles are in accordance
with the Norwegian Accounting Act §3-3b and based on the
current Norwegian Code of Practice (the Code) for Corporate
Governance, most recently issued on 14 October 2021. The
Code is available at
www.nues.no
.
A review and presentation of NORBIT’s compliance with the
Code’s recommendations follow herein. NORBIT’s principles
are consistent with the recommendations.
NORBIT ANNUAL REPORT 2021
44
ESG REPORT
1. IMPLEMENTATION AND REPORTING ON
CORPORATE GOVERNANCE
NORBIT’s corporate governance principles are determined
by the board of directors (the “board”), which has the overall
responsibility for ensuring that the group has a high standard
of corporate governance. The board has prepared a corporate
governance policy document addressing the framework of
guidelines and principles regulating the interaction between the
shareholders, the board and the Chief Executive Ocer (the CEO).
The purpose of the corporate governance policy is to ensure
appropriate separation of roles and responsibilities between
shareholders, the board and executive management, as well
as to ensure satisfactory controls of the group’s business
activities. The board and executive management perform an
annual assessment of its principles for corporate governance.
Deviations from the Code: None
2. BUSINESS
NORBIT is a global provider of tailored technology solutions to
carefully selected niches. The business purpose is set out in
the company’s Articles of Association as:
"The company is the parent company of an internationally
focused technology group which provides custom-made
high-technology products in selected niche markets. This is
done through acquisition, management and trading in shares,
partnership interests and other securities."
The board has defined clear objectives, strategies and risk
profiles for the group, to ensure sustainable value creation
for the shareholders. The board evaluates the company’s
objectives, strategy and risk profiles at least yearly, and when
carrying out this work, the board takes into account financial,
social and environmental considerations.
In 2021, NORBIT updated its ambitions and long-term financial
targets. NORBIT intends to reinforce the elements that have
served the company well in the past, and further capitalise on
its global sales and distribution platform. The ambition is to
deliver organic revenues of NOK 1.5 billion, implying an annual
growth rate of 25 per cent from 2020, and an EBITDA margin
above 25 per cent in 2024. In addition, NORBIT will continue
to explore value-accretive acquisitions through defined criteria
to accelerate growth further, although remaining disciplined.
Deviations from the Code: None
3. EQUITY AND DIVIDENDS
The board is committed to maintaining a satisfactory capital
structure for the group according to the group’s goals, strategy
and risk profile, thereby ensuring that there is an appropriate
balance between equity and other sources of financing. The
board continuously assess the capital requirements related to
the group’s strategy and risk profile.
Equity
At 31 December 2021, the group’s equity was NOK 497.9
million, which corresponds to an equity ratio of 51 per cent.
The board considers NORBIT’s financial position to be solid
with the necessary capacity to support its objectives, strategy
and risk profile.
Dividends
The board has established a dividend policy. Long term, the
policy is to pay out between 30 and 50 per cent of the group’s
ordinary net profit after tax as dividends. When deciding on
the annual dividend, the board considers the group’s financial
position, investment plans as well as the needed financial
flexibility for strategic growth.
Based on the financial results for 2021, the board proposes
a dividend of NOK 0.30 per share, in line with the group’s
dividend policy.
Board authorisations
In the event that a board authorisation is proposed for a capital
increase, acquisition of treasury shares or similar, or for multiple
purposes, each authorisation should be treated as a separate
issue and subject to vote by the general meeting. Board
authorisations are valid for such periods as the shareholders’
meeting decides. Authorisations to the board to increase the
share capital or to buy own shares will normally not be given
for periods longer than until the next annual general meeting.
It follows from the purpose of the authorisations that the
board may need to waive existing shareholders’ preference
rights, which is permitted under the terms of the authorisations
concerned.
At the annual general meeting 2021, the board was granted
the following authorisations:
■
To increase the company’s share capital by up to an
aggregate nominal value of 30 per cent of the total
share capital in connection with investments, mergers,
demergers and transactions
NORBIT ANNUAL REPORT 2021
46
ESG REPORT
■
Increase in the company’s share capital by up to 2 per
cent of the share capital in connection with incentive
programs to the group’s employees
■
Acquisition of treasury shares by up 10 per cent of the
share capital on behalf of the company
In 2021, and based on the above authorisations, the board
resolved to issue 1212165 new shares in connection with the
acquisition of iData Kft at a price of NOK 20.65 per share as
partial settlement of the transaction. This represented 2.1 per
cent of the total share capital prior to the transaction.
The board also resolved to increase the company's share capital
by NOK 46 021.90, in connection with incentive share purchase
programs for employees, through the issuance of 460 219 new
shares, each with a par value of NOK 0.10. This represented
0.8 per cent of the total share capital prior to the transaction.
Following these share capital increases, the company's share
capital at 31 December 2021 is NOK 5 845 930.20, divided into
58 459 302 shares, each with a par value of NOK 0.10.
Deviations from the Code: None
4. EQUAL TREATMENT OF SHAREHOLDERS
NORBIT has a single class of shares, and all shares carry the
same rights in the company. Equal treatment of shareholders
is essential in NORBIT’s corporate governance principles. In
the event of capital increases based on authorisations issued
by the general meeting, where the existing shareholders’ pre-
emptive rights are waived upon, the board will justify the reason
for such waiver through a public announcement in connection
with the capital increase.
Any transactions in the company’s own shares are carried out
through the stock exchange or at prevailing market price.
Deviations from the Code: None
5. SHARES AND NEGOTIABILITY
NORBIT’s shares are freely tradeable and there are no
restrictions on owning or voting for shares. The shares are
registered in the Norwegian Central Securities Depository
(VPS). The company's registrar is DNB Markets. The shares
carry the securities number ISIN NO 001 0734338.
Deviations from the Code: None
6. GENERAL MEETINGS
Meeting notification, registration and participation
The general meeting is NORBIT’s highest decision-making
body. All shareholders have the right to participate in the
general meetings of the company and NORBIT encourages all
of its shareholders to participate. The annual general meeting
for 2022 will take place on 4 May 2022.
Pursuant to article 8 of the company’s articles of associations,
shareholders who wish to participate in a general meeting,
shall notify the company of this within a deadline which is set
out in the notice of the general meeting, and which cannot
expire earlier than five days prior to the meeting. The cut-o for
confirmation of attendance shall be set as short as practically
possible.
Shareholders who are unable to physically attend a general
meeting have a right to request to attend electronically to
vote directly on individual agenda items. Shareholders unable
to attend may also vote by proxy. The procedures for proxy
voting instructions are described in the meeting notification
and published on the company website.
Shareholders may also send notification of their attendance,
using the form provided, by post or email to the company’s
account manager DNB, or via the company’s website, www.
norbit.com.
The full notice for general meetings shall be sent to the
shareholders no later than 21 days prior to the meeting. The
board will ensure that the notice includes information about
the proposed resolutions and that supporting information is
suciently detailed to allow shareholders to form a view on all
matters to be considered at the meeting. Notices shall provide
information on procedures that shareholders shall observe in
order to participate in and vote at the general meeting. The
notice should also set out: (i) the procedure for representation
at the meeting through a proxy, including a form to appoint a
proxy, and (ii) the right for shareholders to propose resolutions
in respect of matters to be dealt with by the general meeting.
The form for the appointment of a proxy should also be designed
to make voting on each individual matter possible.
In accordance with article 8 of the company’s articles of
association, documents relating to matters to be addressed at
a general meeting of shareholders shall be made available on
NORBIT’s website. The same applies to documents which by law
must be included in or attached to the invitation to attend the
general meeting. If the documents are made available in this
NORBIT ANNUAL REPORT 2021
47
ESG REPORT
way, the statutory requirement with respect to distribution to
shareholders is not applicable. A shareholder may nevertheless
ask to be sent documents relating to matters to be discussed
at a general meeting by post.
Meeting chair and voting
The general meeting elects the person to chair the meeting. The
board and the chair of the nomination committee should attend
the general meetings. The company’s auditor is expected to
attend the general meetings when the matters to be dealt with
are of such nature that this is considered necessary.
The general meeting elects the members of the nomination
committee and shareholder elected directors.
Minutes of the general meeting will be published as soon as
practical via the Oslo Stock Exchange’s messaging service
www.newsweb.no
(ticker: NORBT) and on the company’s
website
www.norbit.com
.
Deviations from the Code: None
7. NOMINATION COMMITTEE
NORBIT has a nomination committee as required by Article 7
of the company’s articles of association. On 4 May 2021, the
general meeting elected the following chair and members to
the nomination committee for a period of one year:
■
Reidar Stokke, chair
■
Berit Rian
■
Janniche Fusdahl
The general meeting determines the committee’s remuneration.
The guidelines for the nomination committee have been
approved by the general meeting. According to these guidelines,
the nomination committee should comprise at least three
members. The members of the nomination committee should
be selected to consider the interests of shareholders in general,
where the majority of the committee members are independent
of the board and the executive management team. Members
of the board or the executive management team shall not be
members of the nomination committee.
The primary responsibilities of the nomination committee are
to recommend and propose to the general meeting candidates
and remuneration for the company’s directors and nomination
committee, and remuneration to the members of any sub-
committees. The nomination committee should justify its
proposal, and the recommendation will include a proposal
for the appointment of the chair. The nomination committee
must make a written recommendation, which is published and
presented to the general meeting.
Proposal for board candidates should be communicated to the
chair of the nomination committee by sending an email to
reidar.
olaf.stokke@gmail.com
prior to 31 December.
Deviations from the Code: None
8. BOARD OF DIRECTORS: COMPOSITION AND
INDEPENDENCE
Composition
NORBIT does not have a corporate assembly. According to
article 5 of the NORBIT’s articles of associations, the board
shall consist of a minimum of three and a maximum of seven
directors elected by the general meeting. The general meeting
elects the chair of the board and the deputy chair of the board.
Proposals for the election period by the nomination committee
to the general meeting should not exceed two years at a time,
with the possibility of re-election.
At 31 December 2021, NORBIT’s board comprised five members,
who were all re-elected at the company’s general meeting on
4 May 2021. Three of the directors were re-elected for a period
of one year, and two of the directors were re-elected for a
period of two years. The current composition of the board is
presented in this annual report, and is also available from the
company’s website
www.norbit.com
. The presentation includes
an overview of the directors’ competence and background,
meeting attendance and whether they are considered to
be independent.
In appointing members to the board, it is emphasised that the
board shall have the required competency to independently
evaluate the cases presented by the executive management
team as well as the company’s operation. It is also considered
important that the board can function well as a body of
colleagues.
Directors are encouraged to own shares in the company. At 31
December 2021, all the directors held shares in NORBIT, further
disclosed in Note 26 to the financial statements.
Independence of the board
NORBIT’s board is composed such that it is able to act
independently of any special interests. The board does not
NORBIT ANNUAL REPORT 2021
48
ESG REPORT
include members of the executive management. All the
directors of NORBIT are deemed to be independent of senior
executives, material business associates and the company’s
largest shareholders, although, Prétor Advokat, a Norwegian
law firm, in which the director Tom Solberg is a partner, renders
legal services to the group in the ordinary course of business.
See section 11 for further information.
Deviations from the Code: None
9. THE WORK OF THE BOARD OF DIRECTORS
The board has adopted guidelines for their work and for the
executive management. According to these guidelines, the
board shall ensure that the group has proper management with
a clear internal distribution of responsibilities and duties. A
clear division of work has been established between the board
and the executive management team. The CEO is responsible
for the executive management of the group.
The board has the overall responsibility for the management of
the group and the supervision of its day-to-day management
and business activities. The board shall prepare an annual
plan for its work with special emphasis on goals, strategy and
implementation. The board’s primary responsibility shall be (i)
participating in the development and approval of the group’s
strategy, (ii) performing necessary monitoring functions and (iii)
acting as an advisory body for the executive management team.
The board is also responsible for ensuring that the operation
of the group is compliant with the group’s values and ethical
guidelines. The chair of the board is responsible for ensuring
that the board’s work is performed in an eective and correct
manner.
All members of the board shall regularly receive information
about the group’s operational and financial development. The
group’s strategies shall regularly be subject to review and
evaluation by the board.
According to the board’s instructions, any transactions,
agreements or arrangements between the company or group
entities and its shareholders, members of the board, members
of the executive management team or close associates of any
such parties may only be entered into as part of the ordinary
course of business and on arm’s length market terms. All such
transactions shall comply with the procedures set out in the
Norwegian Public Limited Liability Companies Act and be in
accordance with the recommendations of the Norwegian Code
of Practice for Corporate Governance.
The regulations governing the board’s working practices include
guidelines for how individual directors and the CEO should
conduct themselves with respect to matters in which they may
have a personal interest. Among them is the stipulation that
each director must make a conscious assessment of his/her
own impartiality and inform the board of any possible conflict
of interest on matters concerned at each board meeting.
The board shall consider whether to arrange for a valuation
to be obtained from an independent third party unless
the transaction, agreement or arrangement in question is
considered to be immaterial or otherwise not cause any with
respect to whether the agreement is on arm's length market
terms. Directors and members of the executive management
team shall immediately notify the board if they have any
material direct or indirect interest in any transaction entered
into by the company.
Additional information on transactions with related parties can
be found in Note 24 to the 2021 financial statement.
The board evaluates its own performance and expertise once
a year. The board held a total of 15 meetings in 2021 and the
attendance rate was 98.7 per cent.
Sub-committees of the board
Audit committee
Pursuant to the Norwegian Public Limited Liability Companies
Act and the listing rules of the Oslo Stock Exchange, the
company shall have an audit committee. The audit committee
is appointed by the board. At 31 December 2021, the audit
committee comprised the following:
■
Trond Tuvstein, Chair
■
Bente Avnung Landsnes
The composition of the committee meets the requirements of
the Norwegian Public Limited Liability Companies Act and the
Code as regards to independence and competence.
The committee’s main responsibilities are governed by the
Norwegian Public Limited Liability Companies Act and the
instructions of the audit committee include the following tasks:
■
Prepare matters to be considered by the board and to
support the board in the exercise of its management and
supervisory responsibilities
■
Monitor and assess the quality of the statutory audit
■
Prepare the follow-up of the financial reporting process
NORBIT ANNUAL REPORT 2021
50
ESG REPORT
for the board of directors, including assessing the quality
and make recommendations to secure process integrity
■
Monitor the performance and eectiveness of the group’s
internal control and risk management systems in relation
to the financial reporting process
■
Maintain an ongoing dialogue with the auditor
■
Review the independence and objectivity of the auditor
and ensure compliance with applicable rules and
guidelines regarding the provisions of additional services
rendered by the auditor
■
Prepare the company’s appointment of an external auditor
and submit its recommendation to the board
The audit committee held six meetings in 2021. The attendance
rate was 100 per cent.
Remuneration committee
NORBIT has a remuneration committee appointed by the board.
At 31 December 2021, the remuneration committee comprised
the following:
■
Finn Haugan, Chair
■
Tom Solberg
■
Marit Collin
The committee’s main responsibilities are set out in the
instructions to the committee and includes in brief as follows:
■
Evaluate and review the executive management team’s
agreements, compensation, benefits, including goals and
objectives relevant to the compensation
■
Prepare for consideration matters relating to salary and
terms of the CEO to the board of directors
■
Assisting the CEO in determining the remuneration of the
other members of the executive management team
■
Prepare for consideration matter of principles and
guidelines for remuneration to the CEO and executive
management team, including propose recommendations
to the board, with respect to incentive compensation
plans and equity-based plans
■
Provide general compensation related advise to the board
The remuneration committee held three meetings in 2021.
The attendance rate was 100 per cent.
Deviations from the Code: None
10. RISK MANAGEMENT AND INTERNAL CONTROL
The board shall ensure that NORBIT has sound internal control
and systems for risk management that are appropriate in
relation to the extent and nature of the group’s activities.
The objective of risk management and internal control is to
ensure the successful conduct of the group’s business and to
support the quality of its financial reporting.
The board shall carry out an annual review of the group’s most
important areas of exposure to risk and its internal control
arrangements.
The board shall provide an account in the annual report of
the main features of the group’s internal control and risk
management systems as they relate to the group’s financial
reporting.
Internal control of financial reporting is achieved through day-
to-day follow-up by management, and supervision by the audit
committee.
Deviations from the Code: None
11. REMUNERATION OF THE BOARD OF DIRECTORS
Remuneration of directors shall be reasonable and reflect
the board's responsibilities, expertise, time invested and the
complexity of the business. Work in sub-committees may be
compensated in addition to the remuneration received for
board membership.
The general meeting shall determine the board’s
remuneration after considering recommendations by the
nomination committee. Information on all remuneration paid
to individual directors is presented to the general meeting
in the Remuneration Report for 2021 and in Note 26 to the
financial statements. The remuneration to the directors is not
performance-related nor include share option elements. The
board does not participate in incentive programs available to
employees in the group or any other share-based incentive
schemes.
The board shall be informed if individual directors perform tasks
for the company or any group entities other than exercising
their role as directors. The fee for any such services shall be
approved by the board. In 2021, director Tom Solberg performed
legal services in the ordinary course of business for the group
through his employer Pretor Advokat. The service fee to Prétor
NORBIT ANNUAL REPORT 2021
51
ESG REPORT
Advokat, in aggregate, is disclosed in Note 24 to the financial
statements. The agreement and fee have been reviewed and
approved by the board of directors.
Deviations from the Code: None
12. SALARY AND OTHER REMUNERATION FOR
EXECUTIVE PERSONNEL
Pursuant to Section 6-16a of the Public Limited Companies Act, the
board has adopted clear and understandable guidelines for the
remuneration of the executive management team. A description
of the guidelines is presented to the general meeting in the form
of a separate document, to be approved by the shareholders.
The company’s remuneration principles shall be designed to
ensure responsible and sustainable remuneration decisions that
support the company’s business strategy, long-term interests,
and sustainable business practices. To this end, salaries and
other employment terms shall enable the company to retain,
develop and recruit skilled senior executives with relevant
experience and competence. The remuneration shall be on
market terms, competitive, and reflect the performance and
responsibilities of individual senior executives. A ceiling has
been set for performance-related remuneration.
Pursuant to Section 6-16b of the Public Limited Companies Act,
the board will prepare to the general meeting a Remuneration
Report which includes information on remuneration paid to the
executive management team in accordance with the guidelines.
Deviations from the Code: None
13. INFORMATION AND COMMUNICATIONS
Investor relations
The company’s reporting of financial and other information is
based on transparency and equal treatment of shareholders,
the financial community and other interested parties. The
objective of the company’s investor relations activities is to
ensure that the financial markets and shareholders receive
accurate and timely information that can aect the company’s
share price. All market participants shall have access to the
same information, and all information is published in English.
All notices sent to the stock exchange are made available on
the company’s website and at
www.newsweb.no
.
NORBIT’s ambition is to comply with the Oslo Stock Exchange’s
Code of Practice for IR (“the IR Code”). The company has, in
line with the IR Code, also adopted an IR Policy. The CEO and
CFO are responsible for the communication with shareholders
in the period between general meetings.
Financial information
The company holds investor presentations in association with
the publication of its quarterly results. These presentations are
open to all and provide an overview of the group’s operational
and financial performance in the previous quarter, as well as
an overview of the general market outlook and group’s future
prospects. These presentations are also made available on the
company’s website.
Quiet period
NORBIT will minimise its contacts with analysts, investors and
media in the 30 days period prior to publication of its results.
This is to ensure that all interested parties in the market are
treated equally.
Deviations from the Code: None
14. TAKEOVERS
In a takeover process, should it occur, the board and the
executive management team each have an individual
responsibility to ensure that the company’s shareholders are
treated equally and that there are no unnecessary interruptions
to the group’s business activities. The board has a particular
responsibility in ensuring that the shareholders have sucient
information and time to assess the oer.
In the event of a take-over process, the board shall ensure that
the following principles are complied with:
■
the board will not seek to hinder or obstruct any takeover
bid for the company’s operations or shares unless there
are particular reasons for doing so;
■
the board shall not undertake any actions intended to
give shareholders or others an unreasonable advantage
at the expense of other shareholders or the company;
■
the board shall not institute measures with the intention
of protecting the personal interests of its members at the
expense of the interests of the shareholders;
■
the board shall be aware of the particular duty it has for
ensuring that the values and interests of the shareholders
are protected; and
■
the main terms of the agreements entered into between
the company and the bidder that is material to the market's
evaluation of the bid are publicly disclosed no later than
NORBIT ANNUAL REPORT 2021
52
ESG REPORT
at the same time as the announcement that the bid will be
made is published.
In the event of a takeover bid, the board will, in addition to
complying with relevant legislation and regulations, seek to
comply with the recommendations in the Code. This could
include obtaining a valuation and fairness opinion from an
independent expert. On this basis, the board shall draw up a
statement containing a well-grounded evaluation of the bid and
make a recommendation as to whether or not the shareholders
should accept the bid. The evaluation shall specify how, for
example, a takeover would aect long-term value creation
of NORBIT. Any transaction that is in eect a disposal of the
company’s activities should be decided by a general meeting.
Deviations from the Code: None
15. AUDITOR
The auditor is appointed by the general meeting. The auditor
makes an annual presentation of the auditing plan to the audit
committee. Further, the auditor provides the board with written
confirmation that the requirement of independence has been
met.
The auditor participates in all meetings of the audit committee
that concerns the quarterly accounts and in the board meeting
that deals with the annual accounts. The auditor reports to the
audit committee and board on the assessment of the internal
control on the financial reporting process.
The auditor reviews, with the board and audit committee, any
material changes in the company’s accounting principles and
assessments of material accounting estimates. The outcome
of this review is presented to the board. There have been no
disagreements between the auditor and management on any
material issues in 2021.
The board and the audit committee have met with the auditor
without representatives of executive management being
present regarding the preparation of the annual accounts for
2021.
The board has adopted guidelines and authorisations for
ensuring compliance with applicable laws and regulations
concerning the rendering of non-audit services from the
appointed auditor, The audit committee is responsible for
monitoring compliance under the relevant policy. Non-audit
service assignments are either approved by the audit committee
or the CFO prior to engagement, depending on the materiality
of the assignment. The CFO receives at least once a year from
the auditor a summary of the services other than auditing that
have been provided to the group companies. The summary is
presented to the audit committee.
At the annual general meeting the board present a review of
the auditor’s compensation as paid for auditory work required
by law and remuneration associated with other specific
assignments. Compensation paid is presented in Note 8 to
the financial statements.
The board shall arrange for the auditor to attend all general
meetings.
Deviations from the Code: None
FINANCIALSTATEMENTS 2021
NORBIT ANNUAL REPORT 2021
55
FINANCIAL STATEMENTS
NORBIT GROUP NORBIT ASA
Consolidated statement of income
.........................................
56
Consolidated statement of other comprehensive income
.....
56
Consolidated statement of financial position
..........................
57
Consolidated statement of changes in equity
........................
58
Consolidated statement of cash flows
....................................
59
Notes to the consolidated financial statements
.....................
60
Note 01 Company information
.............................................................
60
Note 02 Basis for preparation and estimates and assumptions
.........
60
Note 03 Significant changes and future changes to
accounting policies
..................................................................
61
Note 04 Accounting principles
..............................................................
61
Note 05 Financial risk and exposure
....................................................
65
Note 06 Segment information
..............................................................
67
Note 07 Salaries, pension and social security costs
...........................
68
Note 08 Other operating expenses
......................................................
69
Note 09 Financial income and financial expenses
..............................
69
Note 10 Income tax expense
................................................................
70
Note 11 Earnings per share
...................................................................
71
Note 12 Property, plant and equipment and leases
...........................
72
Note 13 Goodwill and intangible assets
..............................................
73
Note 14
Inventories
..............................................................................
74
Note 15 Financial assets and financial liabilities
.................................
75
Note 16 Trade receivables
....................................................................
75
Note 17 Cash and cash equivalents
.....................................................
76
Note 18 Interest-bearing borrowings
..................................................
76
Note 19 Other current liabilities
...........................................................
77
Note 20 Capital management
..............................................................
77
Note 21 Business combinations
...........................................................
78Note 22 Equity-accounted investees
...................................................
79
Note 23 Share capital and shareholder information
...........................
80
Note 24 Related parties
.........................................................................
81
Note 25 Share-based arrangements
...................................................
82
Note 26 Remuneration to the board of directors and
executive management
..........................................................
82
Note 27 Contingencies and claims
......................................................
84
Note 28 Government grants
.................................................................
84
Note 29 Events after the balance sheet date
......................................
84
Statement of income – NORBIT ASA
........................................
87
Statement of financial position – NORBIT ASA
.......................
88
Statement of cash flows – NORBIT ASA
.................................
89
Notes to the financial statements – NORBIT ASA
...................
90
Note 01 Company information
.............................................................
90
Note 02 Accounting principles
.............................................................
90
Note 03
Revenues
..................................................................................
91
Note 04 Payroll expenses, number of employees and benefits
..........
91
Note 05 Other operating expenses
......................................................
92
Note 06 Financial income and financial expenses
..............................
92
Note 07
Taxes
........................................................................................
93
Note 08
Equity
.......................................................................................
94
Note 09 Tangible and intangible assets
..............................................
94
Note 10 Investments in subsidiaries and associated companies
.......
95
Note 11 Receivables and liabilities
......................................................
96
Note 12 Forward contracts
...................................................................
96
Note 13 Restricted bank deposits
........................................................
96
Note 14 Transactions with related parties
...........................................
97
Auditor’s report
........................................................................
98
Definitions of alternative performance measures
.................
104
NORBIT ANNUAL REPORT 2021
56
FINANCIAL STATEMENTS | NORBITGROUP
CONSOLIDATED STATEMENT OF INCOME
Amounts in NOK million
Note
2021
2020
Revenue
4, 6 787.8 618.8
Other gains and losses -
21 1.2
Raw materials and change in inventories 292.7
14 363.3
Employee benefit expenses 187.7 155.6
7, 26
Depreciation and amortisation expenses 69.0 49.1
12, 13
Other operating expenses 95.5 77.1
8
Operating profit 73.5 44.3
Share of profit of associates 0.6
22
(0.3 )
Financial income 1.0
9 0.3
Financial expenses 11.1
9 9.8
Net financial items
(9.8 )
(9.5 )
Profit before tax 63.7 34.8
Income tax expense
10
(15.9 )
(7.5 )
Profit for the period 47.9 27.3
Attributable to:
Owners of the company 47.9 27.3
Non-controlling interests 0.0 0.0
Sum 47.9 27.3
Average no. of shares outstanding basic and diluted 57 467 325 56 786 918
11
Earnings per share
Basic (NOK per share) 0.48
11 0.83
Diluted (NOK per share) 0.48
11 0.83
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
Amounts in NOK million
Note
2021
2020
Profit for the period 47.9 27.3
Items that may be reclassified to profit or loss
Exchange dierences on translation of foreign operations 0.2
(3.2 )
Items that will not be reclassified to profit or loss
Changes in the fair value of equity investments at fair value through other comprehensive income - -
Other comprehensive income for the period, net of tax 0.2
(3.2 )
Total comprehensive income for the period 44.7 27.4
Total comprehensive income for the period is attributable to:
Owners of the company 44.7 27.5
Non-controlling interests
(0.0 )
(0.0 )
Sum 44.7 27.4
NORBIT ANNUAL REPORT 2021
57
FINANCIAL STATEMENTS | NORBITGROUP
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Amounts in NOK million
Note
31.12.2021
31.12.2020
ASSETS
Property, plant and equipment 150.0
12 164.9
Intangible assets 171.5
13 242.3
Goodwill -
13 82.1
Deferred tax asset 19.7
10 13.3
Equity-accounted investees 3.4
22 0.9
Shares in other companies 0.2
15 0.2
Other non-current assets - 0.3
Total non-current assets 503.8 345.1
Inventories 164.6
14 263.2
Trade receivables 121.4
16 154.9
Other receivables and prepayments 33.3 25.6
Cash and cash equivalents
17 21.7 15.0
Total current assets 473.2 326.5
Total assets 976.9 671.6
LIABILITIES
Interest-bearing borrowings 162.6 11.6
18, 20
Lease liabilities
12 6.5 14.7
Other non-current liabilities 7.2 1.3
Total non-current liabilities 176.3 27.6
Trade payables 67.4
5 100.2
Current tax liabilities 0.9
10 8.8
Interest-bearing borrowings 125.6 83.1
18, 20
Lease liabilities 8.5 8.5
12
Other current liabilities 47.5
19 59.7
Total current liabilities 302.7 207.3
Total liabilities 479.1 234.9
EQUITY
Share capital 5.7
23 5.8
Share premium 275.4
23 308.8
Retained earnings 155.2
23 183.3
Equity attributable to equity holders of the parent company 497.9 436.3
Non-controlling interests - 0.5
Total equity 497.9 436.8
Total equity and liabilities 976.9 671.6
Trondheim, Norway, 24 March 2022
The board of directors and CEO
NORBIT ASA
Finn Haugan
Bente Avnung Landsnes Tom Solberg
Chair of the board Deputy chair of the board
Director
Trond Tuvstein
Marit Collin
Per Jørgen WeisethaunetDirector Director
Chief executive ocer
NORBIT ANNUAL REPORT 2021
58
FINANCIAL STATEMENTS | NORBITGROUP
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to owners
Amounts in NOK million
Note
Share
capital and
premium
Other
equity
Retained
earnings
Total
Non-
controlling
interests
Total
equity
Balance at 31 December 2019 5.7 275.4 161.9 443.0 0.5 443.6
Profit for the period - - 27.3 27.3 - 27.3
Other comprehensive income - - 0.2 0.2 0.2
(0.0 )
Total comprehensive income for the period - - 27.4 27.4 - 27.4
Transaction with owners in their capacity as owners:
Transaction with non-controlling interest - -
(0.1 )
(0.1 )
(0.1 )
(0.2 )
Dividends paid - - -
23
(34.1 )
(34.1 )
(34.1 )
Total transactions with owners - -
(34.2 )
(34.2 )
(0.1 )
(34.2 )
Balance at 31 December 2020 5.7 275.4 155.2 436.3 0.5 436.8
Attributable to owners
Amounts in NOK million
Note
Share
capital
Share
premium
Retained
earnings
Total
Non-
controlling
interests
Total
equity
Balance at 31 December 2020 5.7 275.4 155.2 436.3 0.5 436.8
Profit for the period - - 47.9 47.9 - 47.9
Other comprehensive income - -
(3.2 )
(3.2 )
(0.0 )
(3.2 )
Other changes in equity - - 0.4 0.4 -
(0.4 )
Total comprehensive income for the period - - 45.1 45.1 44.7
(0.5 )
Transaction with owners in their capacity as owners:
Share issue 0.2 33.3 - 33.5 - 33.5
Dividends paid - - -
23
(17.0 )
(17.0 )
(17.0 )
Total transactions with owners 0.2 33.3 16.5 - 16.5
(17.0 )
Balance at 31 December 2021 5.8 308.8 183.3 497.9 - 497.9
NORBIT ANNUAL REPORT 2021
59
FINANCIAL STATEMENTS | NORBITGROUP
CONSOLIDATED STATEMENT OF CASH FLOWS
Amounts in NOK million
Note
2021
2020
Profit for the period 47.9 27.3
Adjustments for:
Income tax expense recognised in profit or loss 7.5
10 15.9
Income taxes paid -
10
(0.4 )
Share of profit of associates
22 0.3
(0.3 )
Gain on disposal of interest in former associate -
(1.2 )
Net (gain)/loss arising on financial liabilities designated as at fair value through profit or loss -
(0.2 )
Depreciation and amortisation 69.0 49.1
12, 13
Movements in working capital:
(Increase)/decrease in trade receivables 28.5
(24.9 )
(Increase)/decrease in inventories 3.2
(91.2 )
Increase/(decrease) in trade payables 31.0
(21.8 )
Increase/(decrease) in accruals 1.4
(1.2 )
Net cash generated by operating activities 47.7 92.1
Cash flows from investing activities
Payments for property, plant and equipment
12
(29.0 )
(73.5 )
Reclassified from inventory to property, plant and equipment -
12
(10.5 )
Payments for intangible assets
13
(51.2 )
(63.2 )
Net cash outflow from acquisition of subsidiaries -
21
(126.9 )
Net cash (used in)/generated by investing activities
(217.6 )
(136.7 )
Cash flows from financing activities
Proceeds from issue of equity instruments of the company 7.2 -
Transactions with non-controlling interests -
(0.2 )
Proceeds from borrowings 32.7
18 166.3
Repayment of borrowings
18
(7.4 )
(6.8 )
Repayment of lease liabilities
12
(8.2 )
(3.4 )
Net change in overdraft facility 49.5
18 35.7
Dividends paid
23
(17.0 )
(34.1 )
Net cash (used in)/generated by financing activities 176.6 37.8
Net increase in cash and cash equivalents 6.7
(6.7 )
Cash and cash equivalents at the beginning of the period 15.0 21.7
Cash and cash equivalents at the end of the period 21.7 15.0
NORBIT ANNUAL REPORT 2021
60
FINANCIAL STATEMENTS | NORBITGROUP
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE
Company information
on the Oslo Stock Exchange with the ticker “NORBT”.
The consolidated financial statements of NORBIT ASA for the year ended
31 December 2021 incorporate the financial statements of the parent com
-
pany NORBIT ASA and its subsidiaries (collectively referred to as the “group”
and separately as “group companies”).
NOTE
Basis for preparation and estimates and assumptions
STATEMENT OF COMPLIANCE
The consolidated financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS) and interpretations
by the IFRS Interpretation Committee (IFRIC), as adopted by the EU, as well
as additional Norwegian reporting requirements pursuant to the Norwe
-
gian Accounting Act.
The consolidated financial statements for 2021 were approved and author
-
ised for issue by the board of directors on 24 March 2022. The consolidated
financial statements will be submitted to NORBIT’s annual general meeting,
to be held 4 May 2022, for final approval.
GOING CONCERN BASIS OF ACCOUNTING
The consolidated financial statements have been prepared on the assump
-
tion of the business being a going concern.
BASIS FOR MEASUREMENT
The consolidated financial statements have been prepared on the basis of
the historical cost principle, with the following modifications:
■
Derivative financial instruments are measured at fair value
■
Fair value of share-based payments (IFRS 2), see note 25.
FUNCTIONAL CURRENCY AND PRESENTATION CURRENCY
The consolidated financial statements are presented in Norwegian kroner
(NOK), which is the functional currency of NORBIT ASA and the Norwegian
subsidiaries in the group. Foreign subsidiaries operate with local currency
as the functional currency.
Financial information presented in NOK has been rounded to the nearest
million with one decimal, except when otherwise stated. As a result of
rounding dierences, amounts and percentages may not add up to the total.
The results and financial position of group companies whose functional
currency is dierent from the presentation currency (NOK) are translated
to NOK in the following way:
■
Balance sheet items are translated using the exchange rates at the
balance sheet date
■
Profit and loss items are translated at average exchange rates for the
reporting period
■
All resulting exchange dierences are recognised in other
comprehensive income
USE OF ESTIMATES AND JUDGMENTS
The preparation of annual financial statements in conformity with IFRS
requires management to make judgements, estimates and assumptions
that aect the reported amounts of assets and liabilities, income and
expenses. Although management believes these assumptions to be rea
-
sonable, given historical experience, actual amounts and results could
dier from these estimates. Estimates and underlying assumptions are
reviewed and assessed on an on-going basis. Changes to accounting esti
-
mates are recognised in the period in which the estimates are revised and
in future periods if aected.
Estimates and assumptions that could have a significant impact on the
carrying amount of assets and liabilities within the next financial year are
discussed below.
Impairment testing of intangible assets
NORBIT has significant investments in intangible assets. In accordance
with applicable accounting principles, the group considers whether there
are indications of impairment on the carrying amounts. If such indications
exist, an impairment test is performed to determine whether any intangible
assets recorded in the balance sheet should be impaired. The value in use
can be significantly impacted by market conditions. Evaluating whether
an asset is impaired or if an impairment should be reversed, requires a
high degree of judgment and may to a large extent depend upon the
selection of key future assumptions, including determining appropriate
cash-generating units, discount rate, projecting future cash flows and
assumptions on future market conditions. Reference is made to note 13
for further information.
Impairment testing of goodwill
During 2021, NORBIT made a preliminary purchase price allocation for the
acquisitions of Kilmore Marine Ltd and iData Kft and its three subsidiaries.
As part of the purchase price allocation, NORBIT recognised NOK 82.1 mil
-
lion in goodwill. Reference is made to note 13 and 21 for further information.
In accordance with applicable accounting principles, the group considers
whether there are indications of impairment on the goodwill. If such indi
-
cations exist, an impairment test is performed to determine whether any
goodwill recorded in the balance sheet should be impaired. These calcula
-
tions require management to estimate future cash flows and discount rate,
including assumptions on future market conditions, all of which involves a
high degree of judgment.
NORBIT ANNUAL REPORT 2021
61
FINANCIAL STATEMENTS | NORBITGROUP
Loss allowance for trade receivables
NORBIT has exposure to a diversified and fragmented customer base, of
which a majority is international. Thus, the group is exposed to credit risk
on its trade receivables. The group applies the IFRS 9 simplified approach to
measuring expected credit losses. This assessment involves a high degree
of judgment, particularly relating to assessing scenario probabilities. Ref
-
erence is made to note 5 and 16 for further information.
Warranty provisions
A provision is made for expected warranty expenditures for the group com
-
panies. The warranty period is generally 12 to 24 months, while some clients
have purchased extended warranties. The level and duration of warranty
provisions are based on historical data. Assessing and determining the
potential warranty expenditures requires a high degree of judgment.
NOTE
Significant changes and future changes to accounting policies
The group did not apply any amendments to the standards that were eec
-
tive for the current year as such standards did not have any material impact
on the amounts reported in the financial statements. The group has chosen
not to adopt early any standards, interpretations or amendments that have
been issued but are not yet eective as these changes are not expected
to have a material eect on the financial statements.
NOTE
Accounting principles
The accounting principles presented below have been applied consistently
for the reporting period and for the group companies presented in the con
-
solidated financial statements.
GROUP ACCOUNTING AND CONSOLIDATION PRINCIPLES
Subsidiaries
Subsidiaries are all entities over which the group has control. The group
controls an entity when the group is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to aect
those returns through its power over the entity. Subsidiaries are consoli
-
dated from the date on which control is transferred to the group until the
date of which control ceases.
Investment in associates
Associates are all entities over which the group has significant influence,
but which is not a subsidiary nor a joint arrangement. Significant influence
is the power to participate in the financial and operating policy decisions
of the investee, without having control or joint control of these policies.
This is generally the case where the group holds between 20 and 50 per
cent of the voting rights.
Investments in associates are accounted for using the equity method of
accounting, after initially being recognised at cost. Subsequent to initial
recognition, the consolidated financial statements include the group’s
share of the profit and loss and OCI of the associate, until the date on
which significant influence ceases to exist. Share of profit or loss of the
equity-accounted associate is reported as part of net financial items in the
consolidated accounts.
Dividends received from associates are presented as part of net cash flow
from operating activities in the statement of cash flows. Received dividends
are recognised as a reduction of the carrying amount of the investment.
Business combinations
Business combinations are accounted for using the acquisition method
as of the acquisition date, which is the date when control is transferred to
the group. The consideration given is measured at the fair values of the
assets transferred, the equity instruments that have been issued, liabilities
assumed on the transfer of control and direct costs relating to the actual
purchase. The cost of acquisition also includes the fair value of all assets or
liabilities that are the result of an agreement on contingent consideration.
Identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are measured initially at their fair val
-
ues at the acquisition date. The costs associated with the business combi
-
nation are expensed when they are incurred.
If the aggregate of the consideration transferred, the carrying amount of
non-controlling interests and the fair value on the acquisition date of any
previously held ownership interests exceeds the fair value of the acquired
entity’s identifiable net assets, the dierence is capitalised as goodwill. If
the aggregate is less than the company’s net assets, the dierence is imme
-
diately recognised in profit or loss as a bargain purchase.
Contingent consideration is classified either as equity or a financial liability.
Amounts classified as a financial liability are subsequently remeasured to
fair value with changes in fair value recognised in profit or loss.
Elimination of transactions upon consolidation
Intra-group balances and transactions, and any significant unrealised gains
and losses or income and expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial statements. Unreal
-
ised gains arising from transactions with associated and joint ventures are
eliminated to the extent of the group’s interest in the entity.
FOREIGN CURRENCY TRANSLATIONS AND TRANSACTIONS
Foreign currency transactions are translated into each group company’s
functional currency using the exchange rates at the dates of the transac
-
tions. Monetary assets and liabilities in foreign currencies are translated
into the group company’s functional currency using the exchange rate on
the balance sheet date. Foreign exchange gains and losses resulting from
the settlement of such transactions and from the translation of monetary
assets and liabilities denominated in foreign currencies other than NOK are
recognised in the income statement under net financial items.
Non-monetary assets and liabilities that are measured at fair value in a
foreign currency are translated to the functional currency at the exchange
NORBIT ANNUAL REPORT 2021
62
FINANCIAL STATEMENTS | NORBITGROUP
rates on the date the fair value is determined. Translation dierences on
assets and liabilities carried at fair value are reported as part of the fair
value gain or loss.
REVENUE RECOGNITION
The core principle of IFRS 15 is that an entity should recognise revenue to
depict the transfer of promised goods or services to customers in an amount
that reflects the consideration to which the entity expects to be entitled
in exchange for those goods or services. The group recognises revenue
when (or as) a performance obligation is satisfied, that is when 'control' of
the goods or services underlying the particular performance obligation is
transferred to the customer.
The majority of revenue for the group relates to sale of goods where the
control is transferred to the customer at a point in time, depending on the
contracted delivery terms. There is only one performance obligation in
each contract and no variable consideration.
For the revenue that is recognised over time, the group is using cost incurred
compared to total expected cost (cost to cost) as a measure of progress. The
contracts usually consist of only one performance obligation and there are
no significant variable components in the transaction price.
Sale of goods
The group manufactures and sells a range of electronic equipment in the
industrial market. Sales are recognised when control of the products has
transferred, being when the products are delivered to customer, the cus
-
tomer has full discretion over the channel and price to sell the products, and
there is no unfulfilled obligation that could aect the customer’s acceptance
of the products. Delivery occurs when the products have been shipped to
the specific location, the risks of obsolescence and loss have been trans
-
ferred to the customer, and either the customer has accepted the prod
-
ucts in accordance with the sales contract, the acceptance provisions have
lapsed, or the group has objective evidence that all criteria for acceptance
have been satisfied.
A receivable is recognised when the goods are delivered as this is the point
in time that the consideration is unconditional because only the passage
of time is required before the payment is due.
Sale of services
Revenue from providing services is recognised in the accounting period
in which the services are rendered. For fixed-price contracts, revenue is
recognised based on the actual service provided to the end of the report
-
ing period as a proportion of the total services to be provided, because
the customer receives and uses the benefits simultaneously. This is deter
-
mined based on the actual cost spent relative to the total expected costs.
Some contracts include multiple deliverables, such as the sale of hard
-
ware and related installation services. Where the contracts include mul
-
tiple performance obligations, the transaction price will be allocated to
each performance obligation based on the stand-alone selling prices.
Where these are not directly observable, they are estimated based on
expected cost plus margin. If contracts include the installation of hard
-
ware, revenue for the hardware is recognised at a point in time when the
hardware is delivered, the legal title has passed and the customer has
accepted the hardware.
Estimates of revenues, costs or extent of progress toward completion are
revised if circumstances change. Any resulting increases or decreases in
estimated revenues or costs are reflected in profit or loss in the period in
which the circumstances that give rise to the revision become known by
management.
In the case of fixed-price contracts, the customer pays the fixed amount
based on a payment schedule. If the services rendered by the group exceed
the payment, a contract asset is recognised. If the payments exceed the
services rendered, a contract liability is recognised.
Financing components
The group does not expect to have any contracts where the period between
the transfer of the promised goods or services to the customer and payment
by the customer exceeds one year. As a consequence, the group does not
adjust any of the transaction prices for the time value of money.
PENSION
For defined contribution plans, contributions are paid into pension insur
-
ance plans. Contributions to defined contributions plans are charged to the
income statement in the period to which contributions relate.
GOVERNMENT GRANTS
Government grants are recognised where there is reasonable assurance
that the grant will be received and all attached conditions will be complied
with. Government grants are recognised at the value of the contribution at
the transaction date. Government grants are either accounted as reduc
-
tion of payroll, other operating expenses, or intangible assets if a grant is
related to research and development of capitalised assets.
FINANCIAL INCOME AND EXPENSE
Financial income and financial expenses comprise interest income and
expense on borrowings, foreign exchange gains and losses, dividend
income, gains and losses on derivatives and change in the fair value of
financial assets at fair value through the income statement. Foreign cur
-
rency gains and losses are reported on a net basis.
INCOME TAX
Income tax recognised in the income statement comprises current and
deferred tax. Income tax is recognised in the income statement except
to the extent that it relates to items recognised directly in equity or other
comprehensive income.
Current income tax is the expected tax payable on the taxable income
for the year, using tax rates enacted or substantially enacted as at the
balance sheet date, and any adjustment to the tax payable in respect of
previous years.
Deferred tax is recognised, using the liability method, in respect of tempo
-
rary dierences between the carrying amounts of assets and liabilities for
financial reporting and the amounts used for taxation purposes. Deferred
tax is not recognised for:
■
Goodwill not deductible for tax purposes
■
The initial recognition of assets and liabilities in a transaction that is
not a business combination and that aect neither accounting nor
taxable profit
■
Temporary dierences relating to investments in subsidiaries, if it is
probably that they will not reverse in the foreseeable future
Deferred income tax is determined using tax rates (and laws) that have
been enacted or substantially enacted as at the balance sheet date and
are expected to apply when the related deferred income tax asset is real
-
ised or the deferred income tax liability is settled.
NORBIT ANNUAL REPORT 2021
63
FINANCIAL STATEMENTS | NORBITGROUP
Deferred tax assets and liabilities are oset if:
■
There is a legally enforceable right to oset current tax assets and
liabilities
■
They related to income taxes levied by the same taxation authority on
the same taxable entity, or on dierent taxable entities which intend
either to settle current tax liabilities or assets on a net basis, or to
realise the tax assets and settle the liabilities simultaneously.
Deferred tax assets are recognised if it is probable that future taxable prof
-
its will be available against which the temporary dierences can be utilised.
CURRENT/NON-CURRENT CLASSIFICATION
An asset is classified as current when it is expected to be realised or is
intended for sale or consumption in the group’s normal operating cycle, it
is held primarily for the purpose of being traded, or it is expected/due to
be realised or settled within twelve months after balance sheet date. Other
assets are classified as non-current.
A liability is classified as current when it is expected to be settled in the
group’s normal operating cycle, is held primarily for the purpose of being
traded, the liability is due to be settled within twelve months after the bal
-
ance sheet date, or if the group does not have an unconditional right to
defer settlement of the liability for at least twelve months after the report
-
ing period. All other liabilities are classified as non-current.
PROPERTY, PLANT AND EQUIPMENT
An item of property, plant and equipment is recognised as an asset if it is
probably that the future economic benefit associated with the assets will
flow to the group, and its cost can be reliably measured. Property, plant
and equipment is stated at historical cost less accumulated depreciation
and impairment losses. Historical cost includes expenditure directly attrib
-
utable to the asset’s acquisition.
When significant parts of an item of property, plant and equipment have dif
-
ferent useful lives, major components are accounted for as separate items.
Gains and losses on disposals are determined by comparing proceeds with
carrying amount. These are included in the income statement. An asset’s
carrying amount is written down immediately to its recoverable amount if the
asset’s carrying amount is greater than its estimated recoverable amount.
Subsequent costs
Subsequent costs are included in the asset’s carrying amount or recognised
as a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the group and the
cost of the item can be measured reliably. The carrying amount of any com
-
ponent accounted for as a separate asset is derecognised when replaced.
All other repairs and maintenance are charged to the income statement
during the reporting period as incurred.
Depreciation
Depreciation is recognised in the income statement on a straight-line basis
over the estimated useful life of each major component of an item of prop
-
erty, plant and equipment, taking residual value into consideration. Depre
-
ciation methods, useful lives and residual values are reviewed at each
balance sheet date. The depreciation methods and periods used by the
group are disclosed in note 12.
INTANGIBLE ASSETS
Research and development
Development activities involve a plan or design for the production of new
or substantially improved products and processes. Development expendi
-
ture is capitalised only if development costs can be measured reliably, the
product and process is technically and commercially feasible, future eco
-
nomic benefits are probable, and the group intends to and has sucient
resources to complete development and to use or sell the asset.
The capitalised expenditure includes cost of materials, direct labour costs
and operating expenses that are directly attributable to developing and
preparing the asset for its intended use. Other development expenditures
are recognised in the income statement as an expense in the period in
which it occurs.
Capitalised development expenditures are recognised at historic cost
less accumulated amortisation and impairment losses. Acquired intangi
-
ble assets is measured following the same principle.
Amortisation is recognised in the income statement on a straight-line basis
over the estimated useful lives of the intangible assets unless such use
-
ful lives are indefinite. Intangible assets are amortised from the day they
are available for use. The amortisation methods and periods used by the
group are disclosed in note 13.
GOODWILL
Goodwill acquired in a business combination represents cost price of the
acquisition in excess of the net fair value of identifiable net assets in the
acquired entity at the time of acquisition. Goodwill is recognised initially
at cost and subsequently measured at cost less accumulated impairment
losses. See Business combinations for further details on measurement
of goodwill.
INVENTORY
Inventory is stated at the lower of cost and net realisable value. Cost is
determined by the first-in first-out (FIFO) method. The cost of purchased
inventory is determined after deducting rebates and discounts. Net realis
-
able value is the estimated selling price in the ordinary course of business
less the estimated costs of completion and selling expenses.
FINANCIAL ASSETS AND FINANCIAL LIABILITIES
The group classifies its financial assets in the following measurement cat
-
egories:
■
Those to be measured subsequently at fair value (either through OCI
or through the income statement), and
■
Those to be measured at amortised cost
The classification depends on the entity’s business model for managing the
financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded
in the income statement or OCI. For investments in equity instruments
that are not held for trading, this will depend on whether the group has
made an irrevocable election at the time of initial recognition to account for
the equity investment at fair value through other comprehensive income
(FVOCI).
Regular way purchases and sales of financial assets are recognised on
trade-date, the date on which the group commits to purchase or sell the
asset. Financial assets are derecognised when the rights to receive cash
NORBIT ANNUAL REPORT 2021
64
FINANCIAL STATEMENTS | NORBITGROUP
flows from the financial assets have expired or have been transferred and
the group has transferred substantially all the risks and rewards of own
-
ership.
Trade receivables
Trade receivables are amounts due from customers for goods sold or ser
-
vices performed in the ordinary course of business. They are generally due
for settlement within 30 to 90 days and are therefore classified as current.
Trade receivables measured at fair value upon initial recognition, and there
-
after at amortised cost, less allowance made for credit losses. The interest
rate element is disregarded if insignificant, which is the case for the vast
majority of the group’s trade receivables.
Cash and cash equivalents
Cash and cash equivalents consist of bank deposits on call with financial
institutions and other short-term, highly liquid investments with original
maturities of less than three months.
Trade and other payables
Trade payables are recognised at the original invoiced amount. Other pay
-
able are recognised initially at fair value. Trade and other payables are val
-
ued at amortised cost using the eective interest rate method. The interest
rate element is disregarded if it is insignificant, which is the case for the
vast majority of the group’s trade payables.
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value, net of
transaction costs incurred. Subsequent to initial recognition, interest-bear
-
ing borrowings are measured at amortised cost with any dierence between
cost and redemption value being recognised in the income statement over
the period of the borrowings on an eective interest basis.
IMPAIRMENT
Impairment of non-financial assets
The carrying amount of the groups non-financial assets (other than deferred
tax assets and inventory) are reviewed at the end of each reporting period
to determine whether there is any indication of impairment. If an indication
of impairment exists, the asset’s recoverable amount is estimated. Intan
-
gible assets with an indefinite useful life and intangible assets that are not
yet available for use are tested for impairment annually, or more frequently
if events or changes in circumstances indicate that they might be impaired.
For the purposes of impairment testing, assets are grouped together into
the smallest group of assets that generates cash inflows from continuing
use that are largely independent of the cash inflows from other assets or
groups of assets (cash-generating units).
An impairment loss is recognised for the amount by which the asset's carry
-
ing amount exceeds its recoverable amount and recognised in the income
statement. The recoverable amount is the higher of an asset's fair value
less costs of disposal and value in use. In assessing value in use, the esti
-
mated future cash flows are discounted to their present value using a pre-
tax discount rate that reflects the current market assessments of the time
value of money and the risks specific to the asset.
An impairment loss on goodwill is not reversed. For assets other than
goodwill, an impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount. An impairment loss
is reversed only to the extent that the asset’s carrying amount does not
exceed the carrying amount, net of depreciation or amortisation, calculated
as if no impairment loss had been recognised.
Impairment of financial assets
The group assesses on a forward-looking basis the expected credit losses
associated with its debt instruments carried at amortised cost and FVOCI.
The impairment methodology applied depends on whether there has been
a significant increase in credit risk.
There are mainly trade receivables that are subject to the expected credit
loss model in IFRS 9. For trade receivables, the group applies the simplified
approach permitted by IFRS 9, which requires expected lifetime losses to
be recognised from initial recognition of the receivables. Trade receivables
are grouped based on shared credit risk characteristics and days past due.
Expected losses are calculated through an individual and specific assess
-
ment of each customer / receivable. The assessment is carried out by senior
sta in the group's finance department in dialogue with the management
of the operating segments. For trade receivables that are more than 90
days past due date, a scenario analysis is performed. The scenario analy
-
sis includes scenarios for (i) the client's bankruptcy, (ii) the client executes
debt negotiations and (iii) the customer pays the claim in full.
PROVISIONS
A provision is recognised when the group has a present obligation as a
result of a past event that can be estimated reliably and it is probable that
the group will be required to settle the obligation. If the eect is material,
provisions are determined as the present value of expected future cash
flows, discounted by a market based pre-tax discount rate.
Warranty provisions are made for expected future expenses related to deliv
-
ered products and services. The provisions are based on historic data of
incurred warranty expenses.
LEASES
The group applies IFRS 16 and its leasing agreements primarily consist of
rent of oce premises and production facilities with various lease terms
and conditions.
Upon entering into a contract, an assessment is made of whether an agree
-
ment contains a lease arrangement entitling the group to control the use of
an identified asset. If the lease is identified as such, assets and associated
liabilities are recognised at the start of the lease. The group determines
the lease term as the non-cancellable term of the lease, together with any
periods covered by an option to extend the lease if it is reasonably certain
to be exercised, or any period covered by an option to terminate the lease if
it is reasonably certain to be exercised. Lease payments for the first twelve
month following the balance sheet date is classified as current liabilities.
Right-of-use assets
The group recognises right-of-use asset at the lease commencement date.
The right-of-use asset is initially measured at cost, and subsequently at cost
less any accumulated depreciation and impairment losses and adjusted
for certain remeasurements of the lease liability. The cost of right-of-use
asset includes the amount of lease liability recognised, initial direct costs
incurred and lease payments made at or before the commencement date,
less any lease incentives received. The right-of-use asset is depreciation
on a straight-line basis over the shorter of the asset’s estimated useful
life and the lease term and is subject to impairment assessment of non-fi
-
nancial assets.
Lease liabilities
The lease liability is initially measured at the present value of the lease pay
-
ment that are not paid at the commencement date, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily determined,
NORBIT ANNUAL REPORT 2021
65
FINANCIAL STATEMENTS | NORBITGROUP
the group’s incremental borrowing rate as the discount rate which is gen
-
erally the case for the group. The lease payments include fixed payments
and variable lease payments that depend on an index or rate.
The lease liability is subsequently increased by the interest cost on the
lease liability and decreased by the lease payment made. It is remeasured
when there is a change in future lease payments arising from a change in
an index or rate, or as appropriate, changes in the assessment of whether
an extension option is reasonably certain to be exercised or a termination
option is reasonably certain not to be exercised.
Short-term leases and lease of low value assets
The group applies the recognition exemption to its leases that have a lease
term of 12 months or less from the commencement date and do not con
-
tain a purchase option. The group also applies recognition exemption to
leases that are considered low-value assets, mainly IT and oce equipment.
Lease payments associated with short-term leases and low-value assets are
recognised on a straight-line basis as an expense in the income statement.
DIVIDENDS
Dividends are recorded in the group’s consolidated financial statement in
the period which they are approved by the general meeting.
NOTE
Financial risk and exposure
NORBIT is exposed to dierent types of financial risk, including interest-,
currency-, credit-, and liquidity risks. The group’s finance department is
responsible for carrying out the policies and guidelines for financial risk
management approved by the Board.
INTEREST RATE RISK
The group’s main interest rate risk arises from long-term borrowings with
variable rates, which expose the group to cash flow interest rate risk. NOR
-
BIT has no financial instruments related to hedging of interest rates.
Trade and other receivables and trade and other payables are interest free
and with a term of less than one year, hence there is no interest rate risk
associated with these financial assets and liabilities.
The following table shows the group's sensitivity to potential changes in
interest rates. The calculation takes into account all interest-bearing finan
-
cial instruments. The calculation in the table shows the eect based on
interest-bearing financial instruments at the balance sheet date.
Interest rate exposure
Amounts in NOK million
Impact on pre-tax profit
2021
Impact on pre-tax profit
2020
Interest rates - increase by 100 basis points *
(2.9)
(0.8)
Interest rates - decrease by 100 basis points *
2.9
0.8
*) Ceteris paribus
CURRENCY RISK
NORBIT has international operations and clients and is exposed to currency
risk through customer contracts and purchase of products and services in
currencies other than the functional currency (NOK). NORBIT is primarily
exposed to EUR and USD currencies.
The group’s exposure to foreign currency risk, expressed in NOK million, at
the end of the reporting period is set out in the table below.
Foreign exchange exposure:
Amounts in NOK million
31.12.2021
31.12.2020
Receivables
146.4
83.7
Payables
(67.5)
(42.4)
Bank deposits
11.7
8.6
Overdraft facility*
54.2
60.7
Sellers credit
(60.2)
0.0
Net position
84.6
110.6
* NORBIT has a multi-currency overdraft facility (EUR, USD, GBP and NOK). The over
-
draft facility is shown net in the consolidated financial statements. At 31 December
2021, the USD, EUR and GBP balance on the overdraft facility was NOK 54.2 million
(i.e. net cash).
Financial assets and liabilities – net foreign exchange exposure by
major currencies:
31.12.2021
Currency
NOK
USD
(1.5) (13.6)
EUR
8.0
79.4
GBP
0.6
7.2
HUF
602.1
16.3
PLN
0.6 1.4
SEK
(2.7) (2.7)
DKK
0.3 0.4
JPY
(52.3)
(4.2)
Other
-
0.5
Net position
- 84.6
Fluctuations in exchange rates can lead to increased or decreased profit
margin in contracts with customers compared to the initial project calcu
-
lus. The group was a net seller of EUR and a net buyer of USD during 2021.
The group rebalances the short-term (within 90 days) main currency expo
-
sures on a monthly basis in order to have a neutral currency position on
trade receivables, trade payables and cash deposits.
NORBIT ANNUAL REPORT 2021
66
FINANCIAL STATEMENTS | NORBITGROUP
Derivatives
There were no derivatives outstanding as per 31 December 2021 or at 31
December 2020. There is currently an ongoing process to optimise foreign
exchange hedging through the use of derivatives.
Classification of derivatives
Derivatives are only used for economic hedging purposes and not as spec
-
ulative investments. However, the group’s hedging policy does not meet
the hedge accounting criteria. Hence, they are classified as ‘held for trad
-
ing’ for accounting purposes and are accounted for at fair value through
profit or loss. They are presented as current assets or liabilities to the
extent they are expected to be settled within 12 months after the end of
the reporting period.
Fair value measurement
Fair value measurements of foreign currency contracts, if any, are based
on Marked to Market reports from leading Norwegian currency traders,
primarily major Norwegian banks.
CREDIT RISK
Credit risk is the risk that one party to a financial instrument will cause a
financial loss for the other party by failing to discharge an obligation. The
group is exposed to credit risk related to cash and cash equivalents, trade
receivables and other current receivables. The exposure to credit risk is
monitored on an ongoing basis within the group.
Cash and cash equivalents
Bank deposits are held with reputable banks with strong credit-ratings.
Based on their credit ratings, management does not expect any of these
financial institutions to fail to meet their obligations.
Trade receivables
The group has inherent credit risk through the fact that a client may not be
able to meet its obligations under a contract. The group applies the IFRS
9 simplified approach to measuring expected credit losses which uses a
lifetime expected loss allowance for all trade receivables. Reference is
made to note 4 and note 16.
LIQUIDITY RISK
Liquidity risk is the risk that the group is unable to meet the obligations
associated with its financial liabilities. For NORBIT, liquidity risk is managed
by maintaining sucient cash deposits and available committed credit lines
that the group can draw on to meet its obligations as they occur. NORBIT
has a centrally managed multi-currency cash pool arrangement where most
subsidiaries are connected. The liquidity trend is monitored frequently, sup
-
ported by budgets and forecasts.
At 31 December 2021, NORBIT had NOK 183.5 million in undrawn credit
facilities, of which NOK 140.0 million was available under the revolving
credit facility and NOK 43.5 million under the overdraft facility, providing
a solid liquidity buer.
Maturities of financial liabilities
The table below provides an overview of the maturity profile of all finan
-
cial liabilities. For interest-bearing borrowings the stated amount of con
-
tractual cash flows is including estimated interest payments. Other items
are stated at booked amounts. In cases where the counterparty may claim
earlier redemption, the amount is placed in the earliest period the payment
may be required from the counterparty.
Contractual maturities of financial liabilities at 31 December 2021
Amounts in NOK million
Less than 1 year
Between 1 year
and 5 years Over 5 years
Total contractual
cash flows
Carrying amount
(assets) / liabilities
At 31 December 2021
Trade payables
100.2 100.2
- -
100.2Interest-bearing borrowings
132.1 164.1
6.0
302.3
288.2
Lease liabilities
8.5
6.5
-
15.0 15.0
Other payables
40.0 40.0
- -
40.0Total
280.7 170.7
6.0
457.4
443.4
Contractual maturities of financial liabilities at 31 December 2020
Amounts in NOK million
Less than 1 year
Between 1 year
and 5 years Over 5 years
Total contractual
cash flows
Carrying amount
(assets) / liabilities
At 31 December 2020
Trade payables
67.4 67.4
- -
67.4Interest-bearing borrowings
84.9
11.7
1.2
94.797.9
Lease liabilities
8.5
15.4
-
23.9
23.2
Other payables
15.8 15.8
- -
15.8Total
176.6
27.1
1.2
204.9
200.1
NORBIT ANNUAL REPORT 2021
67
FINANCIAL STATEMENTS | NORBITGROUP
NOTE
Segment information
DESCRIPTION OF SEGMENTS AND PRINCIPAL ACTIVITIES
NORBIT ASA is organised in three operating segments; Oceans, Connectiv
-
ity and Product, Innovation & Realization (PIR). The operating segments are
aligned with the internal reporting and the operating segments are compo
-
nents of the group that are evaluated regularly by the management team.
The Oceans segment delivers tailored technology solutions to global mar
-
itime markets, and the Connectivity segment is a leading supplier of solu
-
tions for asset identification, monitoring and tracking. The third segment,
PIR, provides R&D products and services and contract manufacturing to
key customers
Oceans encompasses all NORBIT’s knowledge and competence targeting
the global maritime markets, including proprietary technology and solu
-
tions. The business unit oers ultra-compact sonars for a range of special
applications including seabed mapping and hydrography. The segment
has further developed proprietary solutions and software for maritime and
environmental monitoring. NORBIT is continuously working on expanding
its oering in selected niches.
The Connectivity segment enables clients to digitise their operations
through data collection and tailored sensor analysis with connectivity
devices, cloud computing and data fusion being directly integrated into
the client’s business software or as stand-alone services. Connectivity con
-
sists of the Intelligent Trac Systems (ITS) and Smart Data sub-segments.
The Product Innovation and Realization segment (PIR) oers R&D services
and contract manufacturing to long-term key industrial customers through
in-house capabilities and a high degree of robotised production. In addi
-
tion, the segment sells products based on proprietary technology, including
special instrumentation based on radar, radio frequency and embedded
signal processing technology.
Financial results reportable segments
2021
Amounts in NOK million
Oceans
Connectivity
PIR
Group/
eliminations
Total
Revenues 378.5
146.3
291.0
(27.9)
787.8
Other gains and losses
- - -
1.2
1.2
Raw materials and change in inventories
139.2
50.5
181.0
(7.5)
363.3
Operating expenses
105.6 72.0 93.6
12.1
283.2
EBITDA
133.6
23.8
16.4(31.3)
142.6
EBITDA margin
35%
16% 6%
18%
Depreciation
11.9
4.7
15.0 1.6
33.2
Amortisation and impairment
12.8
18.1
5.3
(0.4)
35.8
EBIT
108.9
0.9
(3.8)
(32.5)
73.5
Total financial items (not allocated)
(9.8)
Profit before tax
63.7
Taxes (not allocated)
(15.9)
Profit after tax
47.9
Timing of revenues
- At point in time
325.7
130.9
261.6
- Over time
52.7
15.3
29.4
Total
378.5
146.3
291.0
NORBIT ANNUAL REPORT 2021
68
FINANCIAL STATEMENTS | NORBITGROUP
2020
Amounts in NOK million
Oceans
Connectivity
PIR
Group/
eliminations
Total
Revenues
267.2
145.1
224.6
(18.2)
618.8
Raw materials and change in inventories
119.9 69.2
111.5
(7.9)
292.7
Operating expenses
87.8
33.4 110.8
0.7
232.7
EBITDA
59.6
42.5
(11.0)2.3
93.5
EBITDA margin
22%
29%
1%
15%
Depreciation
4.5
1.0 12.0
3.1
20.6
Amortisation and impairment
9.5
13.8
-5.2
28.5
EBIT
45.6
27.7
(14.0)(14.9)
44.3
Total financial items (not allocated)
(9.5)
Profit before tax
34.8
Taxes (not allocated)
(7.5)
Profit after tax
27.3
Timing of revenues
- At point in time
238.7
145.1
201.3
- Over time
28.6
-
23.3
Total
267.2
145.1
224.6
NOTE
Salaries, pension and social security costs
Payroll expenses
Amounts in NOK million
2021
2020
Salaries
171.8
150.3
Pension costs
8.4
7.6
Payroll tax
24.1
17.9
Capitalised payroll expenses as development asset
(22.1)
(22.9)
Other payroll expenses
5.5
2.7
Total employee benefit expenses
187.7
155.6
Average number of FTEs
311
246
Pension arrangements
The Norwegian group companies have pension plans secured through col
-
lective agreements in life insurance companies and are subject to the Nor
-
wegian Act on Occupational Pension. The group meets the requirement of
this legislation. The group has pension plans with defined contribution plans.
The defined contribution plan means that the company has not incurred any
future obligation. After the annual grant is paid the company has fulfilled
its obligation in accordance with the arrangement.
In addition, some of the Norwegian companies in the group are members
of an agreement-based early retirement plan (AFP). The scheme provides
the employees the opportunity to retire before the normal retirement age
in Norway of 67 years. Employees who choose retirement will retain a life
-
long benefit from the age of 62 years. The Norwegian Accounting Standards
Board has issued a statement concluding that the AFP plan is a multi-em
-
ployer defined benefit plan. The AFP plan exposes the participating enti
-
ties to actuarial risk associated with employees of other entities with the
result that there is no consistent and reliable basis for allocating the obli
-
gation, plan assets and costs to individual participating entities. Sucient
information is not available to use defined benefit accounting and the AFP
plan is accounted for as a defined contribution plan.
The group’s subsidiaries outside of Norway have pension plans based on
local practice and regulations.
NORBIT ANNUAL REPORT 2021
69
FINANCIAL STATEMENTS | NORBITGROUP
NOTE
Other operating expenses
Amounts in NOK million
2021
2020
External services
57.5
43.1
Travel expenses
3.1
3.5
Freight
5.3
7.8
Oce supplies
2.7
1.9
Marketing
1.7
2.6
Guarantee, service and support
3.9
3.5
Other operating expenses
21.2
14.7
Total operating expenses
95.5
77.1
Fees to the auditors
The table below summarises audit fees, as well as fees for audit services, tax services and other non-audit
services incurred by the group during 2021 and 2020.
Amounts in NOK million
2021
2020
Audit fee
0.9
1.6
Tax advisory fee -
0.1
Non-audit services
0.7
0.2
Auditor's remuneration in other operating expenses
1.6
1.8
NOTE
Financial income and financial expenses
Amounts in NOK million
2021
2020
Financial income
Foreign exchange gain (net) - -
Interest income
0.1
-
Other financial income
0.2
1.0
Financial income
0.3
1.0
Financial expenses
Interest expenses
8.2
1.0
Foreign exchange loss (net)
0.3
5.4
Other financial expense
1.2
4.7
Financial expenses
9.8
11.1
Share of profit of associates
(0.3)
0.6
Net financial items
(9.8)
(9.5)
Please refer to note 22 for further information regarding share of profits from associates.
NORBIT ANNUAL REPORT 2021
70
FINANCIAL STATEMENTS | NORBITGROUP
NOTE
Income tax expense
Income tax specification
Amounts in NOK million
2021
2020
Current tax
Current tax on profits Norwegian companies -
8.4
Current tax on profits foreign companies
1.2
1.3
Adjustments for current tax of prior periods -
0.2
Total current tax expense
9.8
1.3
Deferred income tax
Decrease/(increase) in deferred tax (asset)
6.0
6.2
Total deferred tax expense/(benefit)
6.0
6.2
Total income tax expense
15.9
7.5
Reconciliation between nominal and eective tax rates
Amounts in NOK million
2021
2020
Profit before income tax expense
63.7
34.8
Tax at the rate of 22%
14.0
7.7
Tax eect of amounts which are not deductible (taxable) in calculating taxable income:
Income from associated companies
0.1
(0.1)
Change in unrecognised tax asset
0.2
0.8
Other permanent dierences
1.6
(0.8)
Subtotal
15.9
7.5
Eective tax rate
25%
22%
Amounts recognised directly in equity
Amounts in NOK million
2021
2020
Deferred tax - -
Total
-
-
Deferred tax assets
Amounts in NOK million
2021
2020
The balance comprises temporary dierencs attributable to:
Tax losses
-
(6.9)
Intangible and fixed assets
(12.3)
(12.4)
Inventories
(1.2)
(1.2)
Other assets and liabilities
(1.9)
(1.4)
Total
(15.4)
(21.9)
Total deferred tax assets
(15.4)
(21.9)
Unrecognised deferred tax assets
2.2
2.2
Net deferred tax assets
(13.3)
(19.7)
NORBIT ANNUAL REPORT 2021
71
FINANCIAL STATEMENTS | NORBITGROUP
Deferred tax
Amounts in NOK million
2021
2020
The balance comprises temporary dierencs attributable to:
Intangible and fixed assets
4.0
-
Total
4.0
-
Change in deferred tax assets
Amounts in NOK million
Tax losses
Intangible
and fixed
assets
Inventories Other
Total
Movements
At 1 January 2020
(14.8)
(10.1)
(0.7)
(0.1)
(25.6)
(Charged)/credited
-to profit or loss
7.9
(2.2)
(0.6) 0.8
6.2
At 31 December 2020
(6.9)
(12.4)
(1.2)
0.7
(19.7)
At 1 January 2021
(6.9)
(12.4)
(1.2)
0.7
(19.7)
(Charged)/credited - to profit or loss
6.9
0.1 0.1
(0.4)
6.6
At 31 December 2021
(0.0)
(12.3)
0.3(1.2)
(13.3)
Change in deferred tax
Amounts in NOK million
Tax losses
Intangible
and fixed
assets
Inventories Other
Total
Movements
At 1 January 2020
- - - -
-
(Charged)/credited
-to profit or loss
(0.2)
(0.2)
Acquisition of subsidiary
4.1
4.1
At 31 December 2021
- -
4.0
-4.0
NOTE
Earnings per share
Amounts in NOK
2021
2020
Basic earnings per share
Total basic earnings per share attributable to the ordinary equity holders of the company
0.83
0.48
Diluted earnings per share
Total diluted earnings per share attributable to the ordinary equity holders of the company
0.83
0.48
NORBIT ANNUAL REPORT 2021
72
FINANCIAL STATEMENTS | NORBITGROUP
Reconciliations of earnings used in calculating earnings per share
Amounts in NOK million
2021
2020
Basic earnings per share
Profit from continuing operations attributable to the ordinary equity holders of the company:
Used in calculation basic earnings per share
47.9
27.3
Used in calculating diluted earnings per share
47.9
27.3
Weighted average number of shares used as the denominator
Number
2021
2020
Weighted average number of ordinary shares and potential ordinary shares used as the
denominator in calculating diluted earnings per share
57 467 325
56 786 918
Basic earnings per share
Basic earnings per share amounts are calculated by dividing net profit for
the period attributable to ordinary equity holders of the parent company
by the weighted average number of ordinary shares outstanding during
the period.
Diluted earnings per share
Diluted earnings per share amounts are calculated by dividing the net profit
attributable to equity holders of the parent company by the weighted aver
-
age number of shares outstanding during the year plus the number of poten
-
tial shares that would be issued.
NOTE
Property, plant and equipment and leases
Amounts in NOK million
Land and
properties
Machinery,
fixtures
and fittings
Right-of-use
assets
Total
Cost at 1 January 2020
43.7
177.8
32.9
254.5
Accumulated depreciation
18.5
132.6
24.7
175.8
Net book amount 1 January 2020
25.2
45.2
8.2
78.7
Additions
46.2
27.2
19.9
93.4
Disposals
- - -
-
Depreciation charge
2.4
14.7
5.022.1
Net book amount 31 December 2020
69.0
57.8
23.2
150.0
Cost at 1 January 2021
89.9
205.1
52.8
347.8
Accumulated depreciation
20.9
147.3
29.7
197.9
Net book amount 1 January 2021
69.0
57.8
23.2
150.0
Additions from acquisition of companies
0.3
9.0 -
9.3
Additions
4.4
35.1
-
39.5
Depreciation charge
5.1
19.7
8.4
33.2
Currency eects
-
(0.6)
-(0.6)
Net book amount 31 December 2021
68.6
81.5
14.8
164.9
Useful life
25 years
3-7 years
1-5 yearsDepreciation method
Linear Linear Linear
NORBIT ANNUAL REPORT 2021
73
FINANCIAL STATEMENTS | NORBITGROUP
Right-of-use assets and lease liabilities
NORBIT has chosen to present the right-of-use assets as part of property,
plant and equipment, and the lease liabilities as separate line items the
balance sheet. The group does not have any right-of-use assets that would
meet the definition of investment property.
At year-end 2021, the group had a portfolio of 4 leases (2020: 6) which
mainly consist of lease of oce premises and production facilities. At
31 December 2021, the leases had a weighted average remaining lease
term of 23 months. Extension options in the lease agreements have been
assessed and reflected in the IFRS 16 calculations if use of the option is
reasonably certain.
There are no explicitly identifiable interest rates in the lease agreements.
Hence, an estimated marginal borrowing cost has been used, equivalent
to NIBOR 1M at the time of the agreements and the credit margin accord
-
ing to the revolving credit facility (1.8 per cent) agreement.
The movement in the lease liabilities during 2021 and 2020 is summarised
in the following:
Amounts in NOK million
Lease liabilities at 1 January 2020
8.4
New lease agreements
19.9
Interest expense
0.2
Lease payments
(5.2)
Balance at 31 December 2020
23.2
Lease liabilities at 1 January 2021
23.2
New lease agreements
-
Interest expense
0.4
Lease payments
(8.6)
Balance at 31 December 2021
15.0
Current leasing
8.5
Non-current liabilities
6.5
Total
15.0
Impairment loss and compensation
There were no impairment losses in 2021 and 2020.
Change in depreciation period
There were no changes to the depreciation period for the fixed assets.
NOTE
Goodwill and intangible assets
Intangible assets
Amounts in NOK million
Development costs
Trademark
and customer
relationships
Total
Goodwill
Cost at 1 January 2020
269.4
0.0
269.4
0.0
Accumulated amortization
121.7
0.0
121.7
0.0
Accumulated impairment
12.3
0.0
12.3
0.0Net book amount 1 January 2020
135.3
0.0
135.3
0.0
Additions
63.0 0.0
63.0
0.0Disposals
0.0 0.0
0.0
0.0Amortization charge
26.9
0.0
26.9
0.0Net book amount 31 December 2020
171.5
0.0
171.5
0.0
Cost at 1 January 2021
332.4 0.0
332.4
0.0
Accumulated amortization
148.6 0.0
148.6
0.0Accumulated impairment
12.3
0.0
12.3
0.0Net book amount 1 January 2021
171.5
0.0
171.5
0.0
Additions from acquisition of companies
10.1 46.1
56.2
82.1
Additions
51.2
0.0
51.2
0.0Amortization charge
33.9 1.9
35.8
0.0
Currency eects
(0.7)
0.0
(0.7)
0.0Net book amount 31 December 2021
198.2
44.2
242.3
82.1
Useful life
3-7 years
n.a 10 years
NORBIT ANNUAL REPORT 2021
74
FINANCIAL STATEMENTS | NORBITGROUP
Intangible assets
Intangible assets primarily comprise capitalised development costs related
to plan or design for the production of new or substantially improved tech
-
nology products. In addition, NORBIT recognised NOK 56.2 million in intan
-
gible assets following the acquisition of iData Kft in July 2021, of which NOK
43.9 million related to fair value adjustments of customer relationships.
In 2021, further development was made on own technology and own
products, mainly within the market segments Oceans and Connectivity.
In Oceans, the majority of the capital spent relates to the development
of new applications on the ultra-high resolution sonar WINGHEAD, which
was released in 2020, in addition to hardware and software development
on the other sonar products.
In the Connectivity segment, the development projects are primarily
related to next generation connectivity devices for GNSS tolling for trucks,
DSRC-modules and software solutions for the products delivered by iData.
Amortisation methods and useful lives
Capitalised development is normally amortised over three to seven years
on a straight-line basis. Economic benefit is, however, considered for each
product and the amortisation period is equal to the estimated useful life
of the developed product.
Impairment considerations
At the end of each reporting period, the group assess whether there are
indications that any intangible asset has been impaired. If such indications
are present, an estimate of the recoverable amount of the asset is calcu
-
lated. Regardless of whether there is an indication of impairment, intangi
-
ble assets with indefinite useful lives or intangible assets that are not yet
available for use at the balance sheet date, are tested every year.
To assess whether indications of impairment exist, a simplified analysis of
future cash flows from intangible assets similar to the requirements under
IAS 36.39 is prepared. In this analysis estimated contribution per product
is applied, that is sales value less direct material cost and direct person
-
nel costs. Both external documentation, budgets and forecasts are used in
preparing the analysis. It is also considered to what extent previous esti
-
mates of future cash flows have been met. Prevailing market conditions
are also taken into account, particularly related to covid-19 and the impact
on estimates and forecasts.
Future cash flows are calculated at the present value using a discount rate
specific to the relevant asset, ranging from 8.6 per cent to 9.6 per cent.
These rates are calculated based on the rates implicit in the current mar
-
ket transactions for similar assets or based on the weighted average cost
of capital of several listed companies that are relevant for a single asset
(or portfolio of assets), that in terms of potential performance and risk cor
-
responds to the relevant asset being tested for impairment.
No indication of impairment was identified in 2021 or in 2020. It is referred
to note 4 for accounting policies relevant to intangible assets.
Change in amortisation period
There were no changes in amortisation profiles during 2021.
Goodwill
In 2021, NORBIT made a preliminary recognition of NOK 82.1 million in
goodwill in connection with the acquisitions of Kilmore Marine Ltd and
iData. Acquired companies are integrated into each reporting segment,
where Kilmore Marine Ltd is included in segment Oceans and iData in seg
-
ment Connectivity. NORBIT did not perform an impairment test as of 31
December 2021 due to recent acquisitions. There were no indications of
impairment as of the balance sheet date. Reference is made to note 21 for
further information regarding the acquisitions.
NOTE
Inventories
Amounts in NOK million
2021
2020
Current assets
Raw materials and stores
199.0
118.8
Work in progress
11.3
8.6
Finished goods - at cost
53.0
37.2
Book value
263.2
164.6
Inventory held at cost
267.4
170.0
Obsolescence raw materials
(3.7)
(5.1)
Obsolescence finished goods
(0.5)
(0.3)
Book value
263.2
164.6
Amounts in NOK million
2021
2020
Spesification of raw materials and consumables used
Purchase of goods
455.8
284.9
Freight, customs etc.
6.1
4.6
Change of inventories
(98.6)
3.2
Total
363.3
292.7
NORBIT ANNUAL REPORT 2021
75
FINANCIAL STATEMENTS | NORBITGROUP
NOTE
Financial assets and financial liabilities
Financial assets
Amounts in NOK million
2021
2020
Financial assets at fair value
Aptomar do Brazil
0.1
0.1
Tangen Næringsbygg AS
0.1
0.1
Total shares in other companies (through OCI)
0.2
0.2
Financial assets at amortised cost
Trade receivables
154.9
121.4
Other receivables and prepayments
33.3
25.6
Derivatives
-
-
Cash and cash equivalents
21.7
15.0
Total
209.9
161.9
Financial liabilities
Amounts in NOK million
2021
2020
Liabilities at amortised cost
Trade payables
100.2
67.4
Interest-bearing borrowings
288.2
94.7
Lease liabilities
15.0
23.2
Derivatives
-
-
Other payables
40.0
15.8
Total
443.4
201.1
NOTE
Trade receivables
Amounts in NOK million
2021
2020
Current assets
Trade receivables
163.1
127.0
Loss allowance
(8.1)
(5.6)
Total
154.9
121.4
Amounts in NOK million
2021
2020
Not due
118.1
89.0
1-30 days past due date
16.4
17.6
31-60 days past due date
8.7
2.8
60+ days past due date
19.9
17.6
Total
163.1
127.0
During 2021, NORBIT made NOK 2.5 million in provisions relating to expected loss on accounts receivables.
Total provisions stood at NOK 8.1 million as per year-end 2021, representing 5.0 per cent of the par value of accounts receivables.
NORBIT ANNUAL REPORT 2021
76
FINANCIAL STATEMENTS | NORBITGROUP
NOTE
Cash and cash equivalents
Restricted cash and cash equivalents were NOK 8.4 million as per year-end 2021 (NOK 6.4 million in 2020) for the group. Restricted bank deposits are
tax deductions made on behalf of employees.
Amounts in NOK million
2021
2020
Bank deposits payable on demand
13.2
8.6
Bank deposits restricted to tax payments
8.4
6.4
Total
21.7
15.0
NOTE
Interest-bearing borrowings
2021
Amounts in NOK million
Current Non-current
Total
Revolving credit facility -
60.0
60.0
Overdraft facility
86.5 -
86.5
Term loan
3.7
50.4
54.1
Seller's credit
30.1 30.1
60.2
Other borrowings
5.3
22.1
27.4
Total interest-bearing borrowings
125.6 162.6
288.2
2020
Amounts in NOK million
Current Non-current
Total
Revolving credit facility
29.3 -
29.3
Overdraft facility
50.8 -
50.8
Other borrowings
3.1
11.6
14.6
Total interest-bearing borrowings
83.1
11.6
94.7
The Group has three main loan facilities, comprising of a long-term revolving
credit facility (RCF), a short-term overdraft facility and a term loan. NORBIT
had drawn NOK 86.5 million on the overdraft facility as per 31 December
2021, compared to the credit limit of NOK 130 million. NOK 60.0 million was
drawn on the RCF, while NOK 54.1 million was outstanding on the term loan.
The RCF and term loan are priced at 3M NIBOR + 1.8 per cent margin p.a.,
while the overdraft facility is priced at 1M NIBOR + 1.4 per cent margin p.a.
During 2021, NORBIT entered into an agreement to increase the credit limit
on its RCF to NOK 200 million from previously NOK 150 million, and estab
-
lished a new NOK 55 million term loan facility for its real estate properties.
The maturity date for the RCF is February 2025 and July 2024 for the term
loan. The term loan amortises over 15 years. The overdraft facility is refi
-
nanced each year on a rolling basis.
Refer to note 20 for details on covenants related to the credit facilities.
Secured borrowings
Amounts in NOK million
2021
2020
Long term debt
132.5
11.6
Short term debt
95.5
83.1
Total secured borrowings
228.0
94.7
NORBIT ANNUAL REPORT 2021
77
FINANCIAL STATEMENTS | NORBITGROUP
The carrying amounts of assets pledged as security for current and non-current borrowings are:
Amounts in NOK million
2021
2020
Current
Receivables
117.0
118.3Inventories
254.2
158.6
Total current assets pledged as security
371.2
276.9
Non-current
Property, plant and equipment
130.7
129.0
Total non-current assets pledged as security
130.7
129.0
Total assets pledged as security
501.9
405.9
NOTE
Other current liabilities
Amounts in NOK million
2021
2020
Payroll tax and other statutory liabilities
8.8
10.9
Holiday pay accrual
17.4
14.6
Prepayments from customers
5.4
13.3
Warranty provisions
4.5
3.2
Other payables and accruals
23.7
5.5
Total
59.7
47.5
NOTE
Capital management
Capital allocation
NORBIT’s capital allocation framework and strategy are determined by the
board of directors. Based on the framework, NORBIT has made the follow
-
ing capital priorities to ensure continued profitable growth, while at the
same time maintaining a robust financial position to mitigate financial risks:
1.
Maintain a solid balance sheet
2.
Working capital and sustaining capital expenditures
3.
Investments in research and development to support organic growth
4.
Strategic acquisitions to accelerate growth
5.
Shareholder distributions
The group’s objectives when managing the solidity of its balance sheet and
liquidity position are the following:
■
Safeguard its ability to continue as a going concern, so that it can
provide a competitive risk-adjusted return for shareholders and
benefits for other stakeholders
■
Maintain financial robustness and an optimised capital structure in
order to reduce cost of capital
■
Provide for financial flexibility
■
Maintain a robust headroom to covenants in loan agreements
In order to optimise the capital structure, the group may adjust the amount
of dividends paid to shareholders, return capital to shareholders, issue new
shares, reduce investments or sell assets to reduce debt.
Covenants
The group monitors its covenants on the basis of the following leverage
ratios:
■
Carrying value of total equity as per cent of carrying value of total
assets
■
Net interest bearing debt (NIBD) including lease liabilities over EBITDA
(“NIBD ratio”)
NORBIT has a policy of maintaining a NIBD ratio in the range of 1.0 – 2.5x
in order to ensure a solid balance sheet.
NORBIT ANNUAL REPORT 2021
78
FINANCIAL STATEMENTS | NORBITGROUP
Loan covenants
Amounts in NOK million
2021
2020
Equity ratios 31 December
Total equity
497.9
436.8
Total assets
976.9
671.6
Equity ratio
51%
65%
Amounts in NOK million
2021
2020
NIBD ratios 31 December
Interest bearing borrowings
288.2
94.7
Lease liabilities*
15.0
-
Cash and cash equivalents
21.7
15.0
NIBD
281.5
79.7
EBITDA**
152.8
93.5
NIBD to EBITDA ratio
1.84
0.85
* Lease liabilities were excluded from the covenant calculations in 2020
** EBITDA in 2021 is adjusted to include 12-month financials from the acquisition of iData Kft, completed 30 July 2021
Under the terms of the major borrowing facilities, the group is required
to comply with the following financial covenants:
■
Equity ratio:
Carrying value of total equity as per cent of carrying
value of total assets shall exceed 30 per cent. To be reported by 30
June and 31 December
■
NIBD ratio:
Total interest-bearing borrowings and lease liabilities less
cash and cash equivalents over EBITDA (IFRS, as reported) shall not
exceed 4.0 times. To be reported each quarter. EBITDA is calculated
on a 12 month rolling basis.
The group has complied with these covenants throughout the reporting
period and as per year-end 2021.
Dividend policy
NORBIT’s dividend policy is to pay out annual dividends between 30 and
50 per cent of the group’s ordinary net profit after tax. When deciding
on the annual dividend, the board of directors will consider the group’s
financial position, investment plans as well as the needed financial flexi
-
bility to provide for sustainable growth.
The board of directors has proposed that NOK 0.30 per share is paid as
dividend for the financial year 2021, or NOK 17.5 million, representing
36.1 per cent of net profit after tax.
In 2021, NORBIT paid NOK 0.30 per share in dividends to the sharehold
-
ers (NOK 17.0 million) for the financial year 2020, representing 62.5 per
cent of net profit after tax.
NOTE
Business combinations
In February 2021, NORBIT ASA acquired a 65 per cent ownership interest
in Kilmore Marine Ltd for a total consideration of GBP 450000. Kilmore
Marine Ltd. acts as segment Oceans' distributor in the UK and Middle East.
Prior to the acquisition, NORBIT ASA held a 35 per cent ownership inter
-
est, which was reported as an equity-accounted investee in the consoli
-
dated accounts. As part of the transaction, NORBIT recognised a preliminary
goodwill of NOK 6.0 million and a gain on existing ownership of NOK 1.2
million, reported as other gains and losses in the profit and loss accounts.
Capitalised goodwill related to acquisitions comprises synergies, assets
related to employees, other intangible assets that do not qualify for sepa
-
rate capitalisation, future excess earnings and the fact that deferred tax in
accordance with IFRS is not discounted
Purchase price allocation:
Amounts in NOK million
Kilmore Marine
Cash consideration
5.3
Fair value of previous equity interests
2.9
Total considerations
8.2
Total identifiable net assets *
2.1
Goodwill
6.0
Cash and cash equivalents in acquired business
2.1
Total cash outflow from acquisition of business
3.2
* The purchase price allocation is preliminary and may be subject to adjustments.
NORBIT ANNUAL REPORT 2021
79
FINANCIAL STATEMENTS | NORBITGROUP
On 30 July 2021, NORBIT completed the acquisition of iData, a Hungarian
technology company specialised in vehicle tracking and fleet mangement
related services. iData has three subsidiaries in Hungary (Beta Blue Kft.),
Croatia (iData Fleet Management d.o.o.) and Slovakia (iData Slovakia s.r.o.),
collectively with iData Kft. referred to as "iData". iData is reported under
segment Connectivity in the segment reporting. Through the acquisition,
the Connectivity segment is creating a broader platform for growth into the
asset and vehicle tracking market, where iData has a strong position in its
home markets. The total consideration for the shares was EUR 14.5 million
and was paid through a combination of cash, seller's credit and issuance
of consideration shares. The purchase price and fair value of assets and
liabilities acquired are presented in the table. The main fair value adjust
-
ments were related to customer relationships and trademark. The company
was consolidated from the date of acquisition and the preliminary acquisi
-
tion analysis gave rise to goodwill of NOK 76.1 million. Goodwill is not tax
deductible. From 30 July to 31 December, iData contributed with revenues
of NOK 33.2 million to the Group, NOK 6.5 million in EBITDA and NOK 1.3
million to EBIT. Transaction costs amounted to NOK 7.6 million.
Purchase price allocation:
Amounts in NOK million
Idata
Considerations shares
26.1
Cash consideration
62.7
Seller's credit
62.2
Total
151.0
Recognised amount of identifiable assets and
acquired liabilities assumed
Trademark
2.2
Customer relationships
43.9
Other intangible assets
10.1
Property, plant and equipment
9.3
Inventories
7.4
Trade receivables
8.7
Other current assets
3.8
Cash and cash equivalents
1.2
Deferred tax
(4.1)
Non-current liabilities
(1.3)
Trade payables
(1.8)
Other current liabilities
(4.5)
Total identifiable net assets*
74.8
Goodwill
76.1
Cash and cash equivalents in acquired business
1.2
Total cash outflow from acquisition of business
123.7
* The purchase price allocation is preliminary and may be subject to adjustments.
NOTE
Equity-accounted investees
Equity-accounted investees include associated companies of NORBIT and
are defined as related parties. See note 24 for overview of transactions
and balances with associated companies.
Interests in associates
Set out below are the associates of the group as per 31 December 2021.
The entities listed below have share capital consisting solely of ordinary
shares, which are held directly by the parent company. The proportion
of ownership interest is the same as the proportion of voting rights held.
Ownership
Carrying amount
Amounts in NOK million
2021
2020
20212020
Associated company Head oce
Kilmore Marine Ltd.
Aberdeen
100%
35% -
2.6
Kvikna Consulting Ehf.
Reykavik
33%
33%
0.9
0.8
Norbit Germany GmbH
Hamburg
50% - -
Total
0.9
3.4
Kilmore Marine Ltd
Kilmore Marine Limited is a private limited company located in Aberdeen,
Scotland. Kilmore Marine Ltd. acts as NORBIT Oceans’ distributor in the
UK and Middle East. In February 2021, NORBIT ASA acquired the remain
-
ing 65 per cent of the shares in the company for a total consideration
of GBP 450000. Kilmore Marine Ltd. was consolidated in the financial
statements from 10 February 2021.
NORBIT ANNUAL REPORT 2021
80
FINANCIAL STATEMENTS | NORBITGROUP
Kvikna Consulting Ehf
Based in Reykjavik, Iceland, Kvikna Consulting Ehf. is a software com
-
pany providing services to all of NORBIT’s operating segments. NORBIT
ASA owns 33.33 per cent of the shares in the company.
Norbit Germany GmbH
Norbit Germany GmbH is located in Hamburg. NORBIT ASA owns 50 per
cent of the shares in the company. Norbit Germany GmbH did not deliver
services to the NORBIT group of companies during 2021 or 2020.
Share of profits from associates
Amounts in NOK million
2021
2020
Kilmore Marine Ltd. -
0.5
Kvikna Consulting Ehf.
0.1
0.0
Norbit Germany GmbH -
(0.4)
Share of profit from associates
(0.3)
0.6
NOTE
Share capital and shareholder information
Share capital and share premium
The share capital in NORBIT ASA as per 31 December 2021 consists of
one share class with a total of 58 459 302 shares with a face value of
NOK 0.10 with a total share capital of NOK 5 845 930.
Number of shares
2021
2020
Ordinary shares
Fully paid
58 459 302
56 786 918
Total number of shares
58 459 302
56 786 918
Movements in ordinary shares
Amounts in NOK million
Number of shares
Par value Share premium
Total
Details
Opening balance 1 January 2020
56 786 918
5.7
275.4
281.1
Balance 31 December 2020
56 786 918
5.7
275.4
281.1
Ordinary issue
1 672 384
0.2
33.3
33.5
Balance 31 December 2021
58 459 302
5.8
308.8
314.6
In connection with the share purchase programs to employees, the board
of directors of NORBIT ASA resolved to increase the company’s share cap
-
ital by NOK 46 021.90 through the issuance of 460 219 new shares, each
with a par value of NOK 0.10. The resolution was based on the authorisa
-
tion to increase the share capital granted by the Company’s general meet
-
ing on 4 May 2021.
As settlement for the acquisition of iData, completed on 30 July 2021, the
Board of Directors resolved to issue 1 212 165 new shares as a private place
-
ment to the sellers of iData at a subscription price of NOK 20.65.
NORBIT ANNUAL REPORT 2021
81
FINANCIAL STATEMENTS | NORBITGROUP
RETAINED EARNINGS
Movements in retained earnings were as follows:
Amounts in NOK million
2021
2020
Balance at 1 January
155.2
161.9
Net profit for the period
47.9
27.3
Other comprehensive income
(3.2)
0.2
Transaction with non-controlling interest -
(0.1)
Other changes in equity -
0.4
Dividends
(17.0)
(34.1)
Balance 31 December
183.3
155.2
The 20 largest shareholders in NORBIT ASA were as follows at 31 December 2021:
Shareholder
Shares
PecentageVHF
Invest As 7 686 495
13.15%
Petors AS (100% owned by CEO Per Jørgen Weisethaunet) 6 965 695
11.92%
Reitan Kapital AS
5 829 083
9.97%
Draupnir Invest AS
5 102 949
8.73%
Clearstream Banking S.A.
3 349 312
5.73%
Esmar AS
3 162 286
5.41%
J.P. Morgan Bank Luxembourg S.A.
3 140 771
5.37%
Eidco AS 3 062 286
5.24%
The Bank of New York Mellon SA/NV 2 731 329
4.67%
J.P. Morgan Bank Luxembourg S.A.
1 129 777
1.93%
Citibank
1 056 409
1.81%
Danske Invest Norge Vekst
1 050 000
1.80%
Danske Bank A/S (of which 748 570 shares controlled by BUD Peter K. Eriksen)
759 039
1.30%
Usegi AS (100% owned by CTO Arild Søraunet)
721 989
1.24%
Sonstad AS
684 822
1.17%
J.P. Morgan Bank Luxembourg S.A.
669 492
1.15%
Carnegie Investment Bank AB
627 216
1.07%
Danske Bank A/S
525 000
0.90%
Nordea Bank ABP
395 610
0.68%
Middelboe AS
347 639
0.59%
Total 20 largest
48 997 199
83.81%
Other
9 462 103
16.19%
Total outstanding shares
58 459 302
100.00%
NOTE
Related parties
Related party relationships are those involving control (either direct or indi
-
rect), joint control or significant influence. Related parties are in a position
to enter into transactions with the company that would not be undertaken
between unrelated parties. All transactions with related parties in NORBIT
have been based on arm’s length basis.
Transactions with management and board directors
During 2021, the group purchased legal services of NOK 1.3 million from
Prétor Advokat AS, in which Director Tom Solberg is one of the partners.
There were no other related party transactions between the company and
the parties in the management or the board in 2021 or 2020.
NORBIT ANNUAL REPORT 2021
82
FINANCIAL STATEMENTS | NORBITGROUP
Transactions with associates
The table below summarises the transactions and balance sheet items
with associates.
Amounts in NOK million
2021
2020
Trade receivables -
9.8
Trade payables
0.8
2.6
Revenues -
13.9
Operating expenses
4.6
6.6
NOTE
Share-based arrangements
Share incentive programs to employees
At the general meeting held 4 May 2021, the board of directors was granted
an authorisation to increase NORBIT ASA’s share capital by up to 2.0 per
cent of the share capital to be used to issue share to the group’s employ
-
ees in connection with incentive programs. The authorisation is valid until
the annual general meeting in 2022 to be held 4 May 2022.
In July 2021, the board of directors approved and implemented an incen
-
tive share purchase programs for all eligible employees in NORBIT for the
fiscal year 2021, which also included the executive management team, but
not the board of directors.
The first program was a share purchase program where eligible employees
were oered the opportunity to acquire shares for up to NOK 25000 less a
20 per cent discount and subject to a lock-up period of 12 months. The oer
price (before discount) for the new shares was NOK 18.71, corresponding to
the five-day average volume weighted price of the NORBIT ASA share prior
to 24 June. Employees were oered financing from NORBIT for the invested
amount, to be repaid through deduction of salary over a 12-month period.
The second program was a share matching program, where eligible par
-
ticipants were oered the opportunity to acquire shares at market value,
and in turn, obtain a right to receive compensation in new shares equiva
-
lent to their invested amount after 24 months if certain conditions are met.
There is no lock-up on the shares acquired. The oer price was set to NOK
18.38, corresponding to the five-day average volume weighted price of
NORBIT ASA’s share prior to 28 June. NORBIT did not provide financing
for the second program.
In connection with the programs, the board of directors resolved to issue
new 460 219 new shares, of which 81 224 under program 1 and 378 995
under program 2. This represented 0.8 per cent of the total share capital
prior to the transactions.
There were no share incentive programs to employees in 2020.
Share-based remuneration to the executive management team
There were no share-based payments to the corporate management team
in 2021 or 2022.
NOTE
Remuneration to the board of directors and executive management
Remuneration to the board of directors
Compensation to the members of the board of directors is set out below,
referring to the actual expenses paid in the year.
The board’s remuneration is determined by the general meeting after receiv
-
ing proposal from the nomination committee. The remuneration comprises
of a fixed payment for board membership and work in sub-committees. In
addition, the board members are compensated for travel expenses. NOR
-
BIT is responsible for payment of social security taxes, as well as costs for
directors’ and ocer’s liability insurance.
The remuneration to the board members is not performance-related nor
include share option elements. The board does not participate in incentive
programs available to employees in the group or any other share-based
incentive schemes.
For further information, refer to NORBIT’s Remuneration Report to be pub
-
lished to the general meeting 4 May 2022.
NORBIT ANNUAL REPORT 2021
83
FINANCIAL STATEMENTS | NORBITGROUP
Board of directors compensation 2021
Amounts in NOK thousand
Remuneration
Finn Haugan
515
Bente Avnung Landsnes
325
Tom Solberg
165
Trond Tuvstein
200
Marit Collin
165
Board of directors compensation 2020
Amounts in NOK thousand
Remuneration
Finn Haugan
520
Bente Avnung Landsnes
325
Tom Solberg
170
Trond Tuvstein
200
Marit Collin
170
Remuneration to the members of the executive management team
Compensation to the executive management team consists of a fixed sal
-
ary, variable pay, pension benefits and non-financial benefits. In accord
-
ance with the guidelines determined by the general meeting, a ceiling
has been set for variable pay.
No member of the executive management team receive remunera
-
tion for directorships in the group entities. The executive management
team has no special pension and insurance plans. There are no perfor
-
mance-based pension plans. No loans, prepayments or other forms of
credit issued to any members of the executive personnel.
Compensation to the executive management team for 2021 and 2020 is
set out below. For further information, refer to NORBIT’s Remuneration
Report to be published to the general meeting 4 May 2022, in accord
-
ance with the Norwegian Public Limited Liability Companies Act Section
6-16b and related regulations. The report will also include information
related to derogation and deviation to the guidelines as approved by the
general meeting 4 May 2021.
Fixed salary paid Variable pay
Amounts in NOK million
Salary
1)
Pension
benefits
Other
benefits
Performance-
based bonus
paid
2)
Other bonus
paid
3)
Total
paid
Performance-
based bonus
accrued
4)
Total
paid and
accrued
Per Jørgen Weisethaunet
2021
3.0 - - 0.5
0.1
0.03.1
3.6
(Group CEO)
2020
2.7
0.1
0.0 - - -
2.8
2.8
Per Kristian Reppe
2021
2.0 - 0.2
0.1
0.02.3
0.32.6
(Group CFO)
5)
2020
0.9 0.0
0.1 - - -
1.0
1.0
Stian Lønvik
2021 - - - - - - - -
(Group CFO)
6)
2020
1.1 0.1
0.0 - - -
1.2
1.2
Arild Søraunet
2021
1.7
0.1
0.0 - - 0.3
1.8
2.1
(Group CTO)
2020
1.3
0.1
0.0 - - -
1.4
1.4
Peter Koldgaard Eriksen
2021
3.7
0.1 0.1 -
0.6
4.5
0.5
5.0
(Business unit director Oceans)
7)
2020
2.8
0.1 0.1 - -
1.5
4.4
4.4
Peter Tschulik
2021
1.8
0 - - -
1.8
0.3
2.1
(Business unit director Connectivity)
8)
2020
1.8 -
0.0 - - -
1.8
1.8
Stein Martin Beyer
2021
2.0 - - 0.4
0.1
0.02.2
2.5
(Business unit director PIR and group COO)
2020
2.0 - - -
0.1
0.02.2
2.2
1) Salaries as expensed, excluding social security taxes
2) Variable performance-based cash bonus paid during the year under the incentive program, excluding social security expenses
3) Other cash bonus paid in the year outside the incentive program, excluding social security expenses
4) Variable performance based bonus accrued, to be paid the year after under the incentive program, excluding social security expenses
5) 2020 remuneration from 20.7 to 31.12
6) 2020 remuneration from 1.1 to 31.7
7) Remuneration in USD, translated to NOK
8) Remuneration in EUR, translated to NOK
NORBIT ANNUAL REPORT 2021
84
FINANCIAL STATEMENTS | NORBITGROUP
Directors’ and executive management’s shareholding
The following number of shares is owned by the directors and the members
of the executive management (and their related parties) as of 31 December
2021. In connection with incentive program for all employees in NORBIT,
certain members of the corporate management team participated in the
programs, whereas part of these shares acquired is subject to a lock-up
of 12 months.
Name
Shares subject
to lock-up
Shares not subject
to lock-up
Total shares at
year-end
Percentage
Board of directors
Finn Haugan -
81 078 81 078
0.14%
Bente Avnung Landsnes -
60 473 60 473
0.10%
Tom Solberg (through Mariteam AS) -
65 789 65 789
0.11%
Trond Tuvstein (through TTU Invest AS) -
32 894 32 894
0.06%
Marit Collin (through Collin AS) -
41 447 41 447
0.07%
Total shares held by board of directors -
281 681 281 681
0.48%
Executive management
Per Jørgen Weisethaunet (through Petors AS) -
6 973 588 6 973 588
11.93%
Per Kristian Reppe
1 336 27 208 28 544
0.05%
Peter K. Eriksen (through Danske Bank A/S)
2 672
745 898
748 570
1.28%
Stein M. Beyer -
295 147 295 147
0.50%
Peter Tschulik
1 336 200 304 201 640
0.34%
Arild Søraunet (ownership through Usegi AS) -
721 989 721 989
1.24%
Total shares held by executive management
5 344
8 964 134 8 969 478
15.34%
NOTE
Contingencies and claims
The group was not involved in any material contingencies or legal claims
at 31 December 2021 or 31 December 2020.
NOTE
Government grants
The group received government grants of a total of NOK 6.8 million in
2021 (NOK 8.1 million in 2019).
NOTE
Events after the balance sheet date
■
Oceans was awarded an order for multiple Guardpoint surveillance
sonar systems for a total value of NOK 20 million with delivery in the
second quarter of 2022
■
Connectivity secured several important contracts, including a NOK 30
million order from Toll Collect, a NOK 25 million extension order for
OBUs to a European customer, a NOK 15 million order for OBU’s from a
French customer, and an agreement with Flyt AS was entered into for
delivery of OBUs
■
PIR was awarded a four-year frame agreement with an undisclosed
European industrial customer for delivery of electronic modules for
charging products. The value of the contract is NOK 120 million.
■
NORBIT strengthened its liquidity with NOK 120 million by refinancing
its overdraft facility, and entered into a NOK 110 million non-recourse
factoring agreement
■
NORBIT announced it was in exclusive negotiations regarding an
add-on acquisition of an undisclosed international maritime company,
to be included in segment Oceans if acquired. The target company is
valued at USD 3.6 million on a cash- and debt-free basis, expected
to be financed 65 per cent by cash and 35 per cent through a private
placement of shares
NORBIT ANNUAL REPORT 2021
87
FINANCIAL STATEMENTS | NORBITASA
STATEMENT OF INCOME NORBIT ASA
Amounts in NOK million
Note
2021
2020
Revenue
3
25.3
24.4
Employee benefit expenses
4
26.6
19.0
Depreciation and amortisation expenses
9
0.9
0.6
Other operating expenses
5
31.7
19.7
Operating profit
(33.8)
(14.9)
Financial income
6
108.5
57.5
Financial expenses
6
24.9
4.5
Net financial items
83.7
53.0
Profit before tax
49.8
38.2
Income tax expense
7
17.0
8.4
Profit for the period
32.8
29.8
Allocations and transfers
Dividends
8
17.5
17.0
Transferred to/from other equity
8
15.3
12.7
Total allocations
32.8
29.8
NORBIT ANNUAL REPORT 2021
88
FINANCIAL STATEMENTS | NORBITASA
STATEMENT OF FINANCIAL POSITION NORBIT ASA
Amounts in NOK million
Note
31.12.2021
31.12.2020
ASSETS
Oce equipment
9
2.5
1.9
Intangible assets
9
0.7
0.4
Deferred tax asset
7
0.1
0.1
Investments in associated companies
10
-
1.1
Investments in subsidiaries
10
264.0
247.2
Loan to group companies
91.2
0.3
Total non-current assets
358.5
251.1
Trade receivables
1.0
3.8
Receivables on group companies
10
286.8
264.7
Other receivables
2.1
0.9
Cash and cash equivalents
13
1.0
0.8
Total current assets
290.8
270.1
Total assets
649.3
521.2
LIABILITIES
Trade payables
1.5
2.3
Other payables
0.5
0.5
Interest-bearing borrowings
11
86.5
80.1
Tax payable
7
8.4
0.0
Other current liabilities
25.6
20.3
Total current liabilities
122.5
103.1
Interest-bearing borrowings
11
60.0
-
Total non-current liabilities
60.0
-
Total liabilities
182.5
103.1
EQUITY
Share capital
8
5.8
5.7
Share premium
8
308.8
275.4
Other equity
8
152.2
136.9
Total equity
466.8
418.0
Total equity and liabilities
649.3
521.2
Trondheim, Norway, 24 March 2022
The board of directors and CEO
NORBIT ASA
Finn Haugan
Bente Avnung Landsnes Tom Solberg
Chair of the board Deputy chair of the board
Director
Trond Tuvstein
Marit Collin
Per Jørgen WeisethaunetDirector Director
Chief executive ocer
NORBIT ANNUAL REPORT 2021
89
FINANCIAL STATEMENTS | NORBITASA
STATEMENT OF CASH FLOWS NORBIT ASA
Amounts in NOK million
Note
2021
2020
Cash flow from operations
Profit before income taxes
49.8
38.2
Depreciation and amortisation expenses
9
0.9
0.6
Impairment of financial assets -
20.5
Changes in other operating assets and liabilities
6.0
0.7
Net cash generated by operating activities
77.2
39.4
Cash flow from investments
Payments for oce equipment and intangible assets
9
(1.7)
(1.6)
Purchase of shares and investments in other group companies
(23.3)
(19.2)
Payment of group receivables (long/short term)
(112.9)
50.2
Net cash (used in)/generated by investing activities
(137.9)
29.5
Cash flow from financing
Proceeds from issue of equity instruments of the company
8 -
33.5
Net change in overdraft facility
11
35.7
50.8
Proceeds from borrowings
11
34.2
32.7
Payment to group companies
10
(22.0)
(125.3)
Dividends paid
8
(17.0)
(34.1)
Repayment of borrowings
11
(3.4)
(3.4)
Net cash (used in)/generated by financing activities
60.9
(79.3)
Net change in cash and cash equivalents
0.2
(10.4)
Net increase in cash and cash equivalents
0.2
(10.4)
Cash and cash equivalents at the beginning of the period
0.8
11.2
Cash and cash equivalents at the end of the period
11
1.0
0.8
NORBIT ANNUAL REPORT 2021
90
FINANCIAL STATEMENTS | NORBITASA
NOTES TO THE FINANCIAL STATEMENTS NORBIT ASA
NOTE
Company information
NORBIT ASA is the parent company of the NORBIT group of companies.
NORBIT ASA is domiciled in Norway with headquarter at Stiklestadveien 1,
Trondheim. NORBIT ASA is listed on the Oslo Stock Exchange with ticker
“NORBT”.
NOTE
Accounting principles
The annual accounts have been prepared in compliance with the Accounting
Act and accounting principles generally accepted in Norway. The financial
statement is presented in NOK which is the functional currency of the par
-
ent company. Financial information presented in NOK has been rounded
to the nearest million with one decimal, except when otherwise stated.
USE OF ESTIMATES
The preparation of financial statements in compliance with the generally
accepted accounting practices requires management to make estimates
and assumptions that aect the reported amount in the profit and loss
statement, the measurement of assets and liabilities, and the disclosure
of contingent assets and liabilities at the balance sheet date. Actual results
may dier from estimates.
SHARES IN SUBSIDIARIES AND ASSOCIATED COMPANIES
Subsidiaries
Subsidiaries are all entities over which the parent company has control. The
parent company controls an entity when the parent company is exposed
to, or has rights to, variable returns from its involvement with the entity
and has the ability to aect those returns through its power over the entity.
Investment in associates
Associates are all entities over which the parent company has significant
influence, but which is not a subsidiary nor a joint arrangement. Signifi
-
cant influence is the power to participate in the financial and operating
policy decisions of the investee, without having control or joint control of
these policies. This is generally the case where the parent company holds
between 20 and 50 per cent of the voting rights.
Accounting principles
The cost method is used as a principle for investments in subsidiaries and
associated companies. Investments are valued at acquisition cost for the
shares unless a write-down has been necessary. Investments are written
down to market value if the decline is viewed as not transitory in nature
and when deemed necessary. Write-downs are reversed if the basis for the
write-down is no longer present. The cost price is increased when funds
are raised through capital increase or when group contributions are made
to subsidiaries. Dividends received are initially recognised as income. Div
-
idends and group contributions from subsidiaries are recognised in the
same year as the subsidiary allocates the amount.
REVENUE RECOGNITION
Income arising from royalties and management services provided to sub
-
sidiaries is recognized if all the following conditions are satisfied:
■
A service has been transferred to a subsidiary based on a contract or
a service level agreement
■
It is probable that the economic benefits associated with the
transaction will flow to the company; and
■
The amount of revenue can be measured reliably
Revenue is valued at the fair value of the consideration, net after deduction
of value added tax, returns, discounts and other discounts.
CLASSIFICATION OF BALANCE SHEET ITEMS
Current assets and short-term liabilities include items that are due within
one year after time of acquisition. The remaining items are classified as
non-current assets or long-term liabilities. Current assets are valued at the
lower of acquisition cost and fair value. Current liabilities are recorded in
the balance sheet at face value at the time of transaction.
Non-current assets are recorded at acquisition cost and depreciated on a
straight-line basis over the expected economic lifetime. Upon a change in
value not deemed to be temporary, the aected fixed asset is written down
to market value. Long-term liabilities are recorded in the balance sheet at
face value at the date they are assumed.
TANGIBLE ASSETS
Tangible assets are stated at acquisition cost less accumulated depreci
-
ation and impairment losses. Acquisition cost of tangible assets include
fees, taxes and other direct purchase expenses necessary to prepare the
fixed asset for operation. Maintenance of fixed assets is expensed under
operating costs on an ongoing basis. Costs and improvements are added
to the cost of the asset and depreciated in line with the asset. The dier
-
ence between maintenance and cost / improvement is calculated in rela
-
tion to the condition of the asset at the time of acquisition.
Depreciations are charged to the income statement using the straight-line
method over estimated utilized lifetime.
When an indication that the carrying amount of a fixed asset is higher
than its fair value occurs, an impairment test is performed. If the carrying
NORBIT ANNUAL REPORT 2021
91
FINANCIAL STATEMENTS | NORBITASA
amount is higher than both the sales value and the recoverable amount,
a write-down is made to the higher of the sales value and the recoverable
amount. Previous write-downs, with the exception of the write-down of
goodwill, are reversed if the conditions for the write-down no longer exist.
RECEIVABLES
Receivables are recognised in the balance sheet at face value after deduc
-
tion for provisions for expected losses. Provisions for losses are made on
the basis of an individual assessment of the receivables. Other receivables,
both current and non-current receivables, are recognised at the lower of
par value and fair value.
FOREIGN CURRENCY
Foreign-currency-denominated monetary items are valued at the year-
end exchange rate, and currency translation eects are presented as part
of net financial items. Foreign currency transactions are recorded at the
exchange rate on the transaction date.
PENSIONS
Commitments to contribute pension arrangements to employees are
charged to the income statement when they occur.
TAXES
The tax expense in the income statement includes both the tax payable for
the period and the change in deferred tax. Deferred tax is calculated on
the basis of the temporary dierences that exist between accounting and
tax values, as well as any tax loss carryforwards at the end of the financial
year. Tax-increasing and tax-reducing temporary dierences that reverse
or can reverse in the same period are oset. The recognition of deferred
tax assets on net tax-reducing dierences that are not oset and loss car
-
ryforwards is justified on the basis of expected future earnings. Deferred
tax and tax assets that can be recognised in the balance sheet are entered
net in the balance sheet. Tax reduction on group contribution provided,
and tax on received group contribution, which is recognised as a reduc
-
tion of the capitalised amount on investment in subsidiaries, is recognised
directly against tax in the balance sheet (against tax payable if the group
contribution has an eect on tax payable and against deferred tax if the
group contribution has an impact on deferred tax). Deferred tax is recog
-
nised at nominal amount.
CASH FLOW STATEMENT
The cash flow statement is prepared according to the indirect method.
Cash and cash equivalents comprise cash, bank deposits, and other short-
term liquid placements.
NOTE
Revenues
All revenue relates to license fees, oce rent and management services to the Norwegian group companies.
NOTE
Payroll expenses, number of employees and benefits
Amounts in NOK million
2021
2020
Salaries/wages
22.2
15.6
Payroll tax
3.2
2.1
Pension expenses
0.9
0.8
Other remuneration
0.3
0.5
Total employee benefit expenses
26.6
19.0
Average number of FTEs
18
14
NORBIT ANNUAL REPORT 2021
92
FINANCIAL STATEMENTS | NORBITASA
Remuneration paid to executives
2021
2020
Amounts in NOK million
CEO
Board
CEO Board
Salaries
3.0
-
2.7
-
Board fees
-
1.4
-
1.4
Pension expenses
0.1
-
0.1
-
Other remuneration
0.0
-
0.0
-
Total
3.1
1.4
2.8
1.4
The parent company has pension plans secured through collective
agreements in life insurance companies. NORBIT ASA is subject to the
Norwegian Act on Occupational Pensions, and the parent company
meets the requirement of this legislations through its defined contribu
-
tion plans. The defined contribution plan means that the parent company
has not incurred any future obligation. After the annual grant is paid
NORBIT ASA has fulfilled its obligation in accordance with the arrange
-
ment.
NOTE
Other operating expenses
Amounts in NOK million
2021
2020
Oce premises
8.0
5.6
External services
19.4
8.2
Audit fees
1.1
1.2
Marketing
0.6
0.7
Other operating expenses
2.6
4.0
Total other operating expenses
31.7
19.7
Expensed audit fee
Amounts in NOK million
2021
2020
Audit fee
0.4
1.1
Tax advisory fee
0.0
0.0
Other audit related services
0.7
0.1
Total audit fees
1.1
1.2
NOTE
Financial income and financial expenses
Amounts in NOK million
2021
2020
Financial income - investment in subsidiaries
100.9
52.0
Interest income from group companies
1.2
0.0
Other interest income
2.1
4.8
Other financial income
4.4
0.7
Total financial income
108.5
57.5
Impairment of shares in subsidaries
(20.0)
0.0
Other interest expenses
(1.4)
(0.7)
Other financial expenses
(3.5)
(3.9)
Total financial expenses
(24.9)
(4.5)
Total net financial items
83.7
53.0
NORBIT ANNUAL REPORT 2021
93
FINANCIAL STATEMENTS | NORBITASA
NOTE
Taxes
Calculation of deferred tax/deferred tax benefit
Amounts in NOK million
2021
2020
Temporary dierences
Tangible
(0.4)
(0.2)
Net temporary dierences
(0.4)
(0.2)
Basis for deferred tax
(0.4)
(0.2)
Basis for income tax expense, changes in deferred tax and tax payable
Profit/(loss) before taxes
49.8
38.2
Permanent dierences
27.6
0.0
Basis for the tax expense for the year
77.5
38.2
Change in temporary dierences
0.1
(0.0)
Basis for payable taxes in the income statement
77.6
38.2
+/- Group contributions received/given
(39.5)
(38.2)
Taxable income (basis for payable taxes in the balance sheet)
38.1
-
Components of the income tax expense
Payable tax on this year's profit/(loss)
17.1
8.4
Change in deferred tax
(0.1)
0.0
Tax expense
17.0
8.4
Payable tax in the tax charge
17.1
8.4
Tax eect of group contribution
(8.7)
(8.4)
Payable tax in the balance sheet
8.4
-
Reconciliation of the tax expense
Tax expense based on current year tax rate
11.0
8.4
Tax eect of permanent dierences
6.1
0.0
Tax expense
17.0
8.4
NORBIT ANNUAL REPORT 2021
94
FINANCIAL STATEMENTS | NORBITASA
NOTE
Equity
Change in equity for the year
Amounts in NOK million
Share capital Share premium
Other equity
Total
Equity at 1 January
5.7
275.4
136.9
418.0
Ordinary share issue
0.2
33.3
0.033.5
Profit for the year
0.0 0.0
32.8
32.8
Dividends
0.0 0.0
(17.5)
(17.5)
Equity at 31 December
5.8
308.8
152.2
466.8
The parent company’s share capital consists of 58 459 302 shares with
a par value of NOK 0.10. The board of directors has proposed that NOK
0.30 per share is paid as dividend for the financial year 2021 (NOK 17.5
million).
During 2021, the parent company issued 460 219 new shares to employ
-
ees in connection with incentive programs. The parent company also
issued 1 212 165 shares in connection of the acquisition of iData Kft to
the sellers of the company, on behalf of its two subsidiaries NORBIT
Holding Kft and NORBIT Hungary Kft,
NOTE
Tangible and intangible assets
Amounts in NOK million
Patents Oce equipment
Buildings
Total
Purchase cost 1 January
0.4
3.8
0.04.2
Additions
0.2
1.1
0.41.7
Purchase cost 31 December
0.7
4.9
0.4
6.0
Accumulated depreciation 31 December
0.0
2.7
0.1
2.8
Net book value at 31 December
0.7
2.2
0.3
3.2
Depreciation in the year
0.8
0.1
0.9
Estimated useful life
Indefinite
3-5 years
3-5 years
Depreciation plan
N/A
Linear Linear
NORBIT ANNUAL REPORT 2021
95
FINANCIAL STATEMENTS | NORBITASA
NOTE
Investments in subsidiaries and associated companies
Value in NOK thousand
Business oce
Ownership/
voting right
Equity last
year (100%)
Profit/(loss)
last year (100%)
Book value
Subsidiary
NORBIT Subsea AS
Trondheim
100.00%
58.7
66.2
84.9
NORBIT ITS AS
Trondheim
100.00%
60.6
(11.9)
81.3
NORBIT EMS AS
Selbu/Røros
100.00%
87.2
4.4
66.3
NORBIT ODM AS
Trondheim
100.00%
13.8
(0.8)
15.2
NORBIT Aptomar AS
Trondheim
100.00%
45.1
6.8
3.2
Fenrits AS
Trondheim
100.00%
0.8 0.0
1.4
NORBIT NV AS
Trondheim
100.00%
0.3 (0.0)
0.6
NORBIT Kabelpartner AS
Trondheim
100.00%
5.6
6.5
3.5
NORBIT GmbH
Vienna
100.00%
(0.1)
0.0
0.5
NORBIT s.r.l
Lanciano
100.00%
0.1
0.0
0.1
NORBIT Hungary Kft.
Budapest
100.00%
0.4 (2.0)
0.1
NORBIT Sweden AB
Gothenburg
100.00%
0.0 (0.0)
0.1
NORBIT Singapore Ltd.
Singapore
100.00%
0.3 0.2
0.1
NORBIT Poland Sp. z.o.o.
Gdansk/Sopot
100.00%
1.50.0
0.0
NORBIT US Ltd.
Santa Barbara
100.00%
2.6 2.0
0.0
NORBIT China Co., Ltd
Shanghai
100.00%
0.2
0.1
0.2
Kilmore Marine Ltd.
Aberdeen
100.00%
3.1
0.9
6.4
NORBIT Holding Kft
Budapest
100.00%
0.0 0.0
0.0
NORBIT Czezh Republic s.r.o
Brno
100.00%
0.0 0.0
0.0
NORBIT Denmark ApS
Copenhagen
100.00%
0.1
0.0
0.1
Book value per 31 December
264.0
Associated companies
Kvikna Consulting Ehf.
Reykjavik
33.33%
0.0 0.0
0.0
NORBIT Germany GmbH
Hamburg
50.00% 0.0 0.0
0.0
Book value at 31 December
0.0
Trade receivables
Other receivables
Amounts in NOK million
2021
2020
2021 2020
Group companies
1.0
3.8
286.8
264.7
Sum
1.0
3.8
286.8
264.7
Trade payables Other short-term liabilities
Amounts in NOK million
2021
2020
2021 2020
Group companies
-
0.6
-
-
Sum
-
0.6
--
Non current receivables
Non current liabilities
Amounts in NOK million
2021
2020
2021 2020
Group companies
91.2
0.3
-
-
Sum
91.2
0.3
-
-
NORBIT ANNUAL REPORT 2021
96
FINANCIAL STATEMENTS | NORBITASA
NOTE
Receivables and liabilities
Receivables with maturity later than one year
Amounts in NOK million
2021
2020
Loans to companies in the same group
91.2
0.3
Interest-bearing borrowings
Overdraft facility
86.5
50.8
Revolving credit facility
60.0
29.3
Total
146.5
80.1
Debt secured by mortgage
Long-term debt
60.0
0.0
Short-term debt
86.5
80.1
Total
146.5
80.1
Book value of pledged assets
Fixed assets
3.2
0.6
Receivables
287.8
268.5
Total
291.0
269.1
The parent company has two loan facilities, comprising of a long-term
revolving credit facility (RCF) and a short-term overdraft facility. The facili
-
ties have a credit limit of NOK 200 million and NOK 130 million, respectively.
NOK 86.5 million was drawn on the overdraft facility as per 31 December
2021, while NOK 60.0 million was drawn on the RCF. The RCF is priced at
3M NIBOR + 1.8 per cent margin p.a., while the overdraft facility is priced at
1M NIBOR + 1.4 per cent margin p.a. The maturity date for the RCF is Febru
-
ary 2025. The overdraft facility is refinanced each year on a rolling basis.
NOTE
Forward contracts
NORBIT ASA has no forward exchange contracts or other financial
instruments at the end of the financial year.
NOTE
Restricted bank deposits
Restriced bank deposits
Amounts in NOK million
2021
2020
Bank deposits restricted to tax payments
1.0
0.8
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FINANCIAL STATEMENTS | NORBITASA
NOTE
Transactions with related parties
Balances with group companies are specified in note 10.
Interest to / from group companies is shown by separate lines in the income statement.
Related-party transactions:
Amounts in NOK million
2021
2020
Sales of goods and services
Revenue from licenses, management fees and services to group companies
25.3
24.4
STATEMENT BY THE BOARD OF DIRECTORS AND CEO
WE CONFIRM, TO THE BEST OF OUR KNOWLEDGE, THAT
■
The group financial statements for the period from 1 January to 31 December 2021 have been prepared in accordance with
IFRS, as adopted by the EU
■
The financial statements of NORBIT ASA for the period from 1 January to 31 December 2021 have been prepared in
accordance with Norwegian Accounting Act and accounting standards and practices generally accepted in Norway
■
The financial statements give a true and fair view of the group and the company’s consolidated assets, liabilities, financial
position and results of operations
■
The report of the board of directors provides a true and fair view of the development and performance of the business and
the position of the group and the company, together with a description of the key risks and uncertainty factors that the
group and the company is facing
Trondheim, Norway, 24 March 2022
The board of directors and CEO
NORBIT ASA
Finn Haugan
Bente Avnung Landsnes Tom Solberg
Chair of the board Deputy chair of the board
Director
Trond Tuvstein
Marit Collin
Per Jørgen WeisethaunetDirector Director
Chief executive ocer
NORBIT ANNUAL REPORT 2021
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FINANCIAL STATEMENTS | NORBITASA
AUDITOR’S REPORT
PricewaterhouseCoopers AS,
Brattørkaia 17B, Postboks 6365 Torgard, NO-
7492 Trondheim
T:
02316
, org. no.: 987
009
713 MVA,
www.pwc.no
Statsautoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap
To
the General Meeting
of
NORBIT ASA Independent Auditor’s Report
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of NORBIT ASA, which comprise:
•
The financial statements of the parent company
NORBIT ASA
(the Company), which comprise the balance sheet as at 31 December 2021, the income statement and cash flow statement for
the year then ended, and notes to the financial statements, including a summary of significant
accounting policies, an
d
•
The consolidated financial statements of NORBIT ASA and its subsidiaries (the Group), which
comprise the balance sheet as at 31 December 2021, the income statement, statement of
comprehensive income, statement of changes in equity and statement of cash flows for the
year then ended, and notes to the financial statements, including a summary of significant
accounting policies.
In our opinion:
•
the financial statements comply with applicable statutory requirements,
•
the financial statements give a true and fair view of the financial position of the Company as at
31 December 2021, and its financial performance for the year then ended in accordance with
the Norwegian Accounting Act and accounting standards and practices generally accepted in
Norway, and
•
the financial statements give a true and fair view of the financial position of the Group as at 31
December 2021, and its financial performance and its cash flows for the year then ended in
accordance with International Financial Reporting Standards as adopted by the EU.
Our opinion is consistent with our additional report to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the
Auditor’s Responsibilities for the
Audit of the Financial Statements
section of our report. We are independent of the Company and the
Group as required by laws and regulations and the International Ethics Standards Board for
Accountants’ International Code of Ethics for Professional Accountants (including International
Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in
NORBIT ANNUAL REPORT 2021
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Independent Auditor's Report -
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(2)
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit
Regulation (537/2014) Article 5.1 have been provided.
We have been the auditor of the Company for
13
years from the election by the general meeting of the shareholders on 22 September 2009 for the accounting year
20
. 09
Key Audit Matter
s
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matter
s.
Value of intangible assets
involves similar
complexity and risks as the previous year and have been considered a key audit matter also for 2021.
Valuation
of inventory
carries less risk than previous years and has not been considered as a key audit
matter for 2021. As the Group acquired two companies this year, we gave the resulting Accounting for
business combinations due attention.
Key Audit Matter How our audit addressed the Key Audit Matter
Value of intangible assets
Intangible assets mainly consist of self-
developed software and hardware used in
own products. The value represents
approximately 25% of the total assets,
with a book value of mNOK 242,3 as of
31.12.2021. The year-end result reflects
depreciation of mNOK 26,9 spread over
the three segments as described in the
note 6. No impairments have been
recognized in 2021 as the management
analysis of the values concluded that
there were no impairment indicators
present.
The value of these assets depends on
future income. We focused on this area
due to the significance of the amount and
the valuation that depends on
discretionary assumptions around the
projections for future income and costs
and discount rate used.
A more detailed description of the
methodology management used to
identify impairment indicators is
described in note 4 and 13.
We obtained and understood management’s
documentation of whether any impairment indicators
related to the intangible assets were present. The
documentation shows that management’s
evaluation is
done per group of intangible assets. Furthermore, the
main assumptions made by management to identify
possible impairment indicators are documented. Our
assessment suggests that management’s model is based
on the recognized valuation methodology. We also
assessed the logical structure and tested mathematical
accuracy of the model without finding material
deviations.
We challenged management’s use of assumptions for
projections of future income and costs by comparing
these against company’s hi
storic results and approved
budgets. To form an opinion about accuracy of the
budgets we compared historical year-end results with
previous years’ budgets. To evaluate assumptions about
future income and costs we analyzed whether the
budgets were based on historical income and
considered whether the growth assumptions were
reasonable. We found that the assumptions were
aligned with historical results and in line with budgets,
and that there was a reasonable alignment between the
historical year-end results and respective budgets.
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(3)
The discount rate used is assessed against empirical
data and expectations about the future return, relevant
risk premium and gearing ratio. We concluded that the
used discount rate is reasonable.
We read the relevant notes and found the information
and explanations provided consistent and sufficient.
Accounting
for
business combinations During the year, NORBIT acquired two
companies, of which the acquisition of the
Hungarian company iData was the most
significant.
For each business combination, the
management prepared a
purchase price
allocation (PPA) analysis in which the
difference between the net assets in the
acquired company and the purchase price
was allocated to identified assets fr
om
the
acquired company. Customer
relationships
,
trademark and goodwill
w
ere
among the identified assets. To determine the value of the identified
intangible assets, management used
judgement and performed calculations
based on expectations about the acquired
companies' future development.
Customer relationships, unlike goodwill
and trademarks, are written off over their
expected useful lives. Furthermore,
acquired inventories are valued at fair
value, i.e., sales price in the acquisition
analyzes.
The d
ribution of values in the ist
acquisition analysis may have a
significant impact on the financial
statements.
We focused on this area due to the
judgmental nature of purchase price
allocation calculations.
The Group's disclosures and principles
for accounting for business combinations
and valuation of goodwill, trademark and
customer relationships are described in
the annual report under note 4
,
and 21. 13
We obtained and
reviewed the
PPA and understood
how management identified goodwill and other
intangible assets
.
We obtained and examined the acquisition agreements
and evaluated the terms of the agreements and had
extensive discussions with management. We confirmed
the cash consideration from the agreements to bank
receipts.
To challenge managements judgement,
we e
xamined the
acquisition analyses with emphasis on methods and
assumptions
used
for identifying and valuing intangible assets such as customer relationships and trademark.
We traced the information in the PPA to the target’s
financial statements. We tested the mathematical
accuracy of the calculations and challenged the
Company`s allocations based on our expectations from
the underlying business drivers in the acquired
companies. Based on our audit procedures we found
the methods and assumptions to be reasonable.
We also read the relevant notes 4, 13 and 21 and found
the information and explanations provided sufficient.
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(4)
Other Information
The Board of Directors
and the Managing Director
(management) are responsible for the information in the Board of Directors’ report. The other information comprises information in the annual report,
but does not include the fi
nancial statements and our auditor’s report thereon. Our opinion on the
financial statements does not cover the information in the Board of Directors’ report.
In connection with our audit of the financial statements, our responsibility is to read the Board of
Directors’ report. The purpose is to consider if there is material inconsistency between the Board of
Directors’ report and the financial statements or our knowledge obtained in the audit, or whether the
Board of Directors’ report otherwise appears to
be materially misstated. We are required to report if
there is a material misstatement in the Board of Directors’ report. We have nothing to report in this
regard.
Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’
report
•
is consistent with the financial statements and
•
contains the information required by applicable legal requirements.
Our opinion on the Board of Director`s report applies correspondingly to the report on
Environmental, Social and Governance (ESG).
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in
accordance with the Norwegian Accounting Act and accounting standards and practices generally
accepted in Norway, and for the preparation and true and fair view of the consolidated financial
statements of the Group in accordance with International Financial Reporting Standards as adopted
by the EU, and for such internal control as management determines is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, management is responsible for assessing the Company’s a
nd the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern. The financial statements of the Company use the going concern basis of accounting insofar as
it is not likely that the enterprise will cease operations. The consolidated financial statements of the
Group use the going concern basis of accounting unless management either intends to liquidate the
Group or to cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilit
ies for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that inc
ludes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
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(5)
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
•
identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error. We design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
•
obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's or the Group's internal control.
•
evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
•
conclude on the appropria
teness of management’s use of the going concern basis of
accounting, and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Company and the
Group's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in
the financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Company and the Group
to cease to
continue as a going concern.
•
evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves a true and fair view.
•
obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
We communicate with the Board of Directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the Board of Directors, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
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(6)
Report on Other Legal and Regulatory Requirements
Report on compliance with Regulation on European Single Electronic Format
(ESEF)
Opinion
We have performed an assurance engagement to obtain reasonable assurance that the financial
statements with file name NORBIT-
2021
-12
-31
-en
have been prepared in accordance with Section .zip
5-5 of the Norwegian Securities Trading Act (Verdipapirhandelloven) and the accompanying
Regulation on European Single Electronic Format (ESEF).
In our opinion, the financial statements have been prepared, in all material respects, in accordance
with the requirements of ESEF.
Management’s Responsibilities
Management is responsible for preparing, tagging and publishing the financial statements in the single
electronic reporting format required in ESEF. This responsibility comprises an adequate process and
the internal control procedures which management determines is necessary for the preparation,
tagging and publication of the financial statements.
Auditor’s Responsibilities
For a description of the auditor’s responsibilities when performing an assurance engagement of the
ESEF reporting, see: https://revisorforeningen.no/revisjonsberetninger
Trondheim
,
24 March 2022 PricewaterhouseCoopers AS
Kjetil Smørdal
State Authorised Public Accountant
(This document is signed electronically)
NORBIT ANNUAL REPORT 2021
104
FINANCIAL STATEMENTS | NORBITASA
EB
ITDA
Short for earnings before interest, tax, depreciation and
amortisation. EBITDA corresponds to operating profit before
depreciation and amortisation expenses, as reported in the
consolidated statement of profit and loss. EBITDA is a key
performance indicator that the company considers relevant
for understanding the generation of profits.
EBITDA margin
EBITDA as a percentage of revenues. The EBITDA margin
is a key performance indicator that the company considers
relevant for understanding the profitability of the business and
for making comparisons with other companies.
EBIT
Short for earnings before interest and tax and corresponds to
operating profit in the consolidated statement of profit and loss.
EBIT is a key performance indicator that the company considers
relevant, as it facilitates comparisons of profitability over time
independent of corporate tax rates and financing structures.
EBIT margin
EBIT as a percentage of revenues. The EBIT margin is a key
performance indicator that the company considers relevant for
understanding the profitability of the business and for making
comparisons with other companies.
EQUITY RATIO
Total equity divided by total assets. The equity ratio is a key
performance indicator that the company considers relevant for
assessing its financial leverage.
NET INTERESTBEARING BORROWINGS
Net interest-bearing borrowings is defined as total interest-
bearing borrowings less cash and cash equivalents.
NET WORKING CAPITAL
Net working capital is defined as the sum of inventories, trade
receivables and other receivables and prepayments, less the
sum of trade payables and other current liabilities, as reported
in consolidated statement of financial position.
R&D INVESTMENTS
R&D investments is equal to payments for intangible assets, as
reported n the consolidated statement of cash flows.
DEFINITIONS OF ALTERNATIVE PERFORMANCE MEASURES
NORBIT ASA
Norway
T: +47 73 98 25 50
www.norbit.com