Annual Report
2023
Brødrene A & O Johansen A/S
Rørvang 3, DK-2620 Albertslund, Denmark
CVR no. 58 21 06 17
Contents
In brief
4 Our purpose
5 At a glance
6 Performance highlights
7 ESG highlights
8 Letter from the CEO
9 Highlights of the year
10 Five year summary
11 Outlook for 2024
Strategy
13 Business model
14 Industry and market trends
15 Corporate strategy
17 Strategic ambitions
18 Sustainability
Performance
Gaining market shares
in challenging market
conditions 24-29 →
Business model
AO's omni-channel business model secures
a coherent customer experience for all
customers across touchpoints. →
Follow us
→
AO in brief. →
3
Business model and strategy. →
12
Performance
25 Financial results
27 Q4 financials
28 B2B performance
29 B2C performance
Corporate governance
31 Risk management
34 Corporate Governance
36 Board of Directors
41 Executive Board
42 Shareholder information
Financial statements
46 Consolidated financial statements
96 Parent company financial statements
Statements
127 Management’s statement
128 Independent auditor’s report
132 Company information
Performance Corporate governanceStrategy Financial statementsIn briefAnnual Report 2023
In brief
4 Our purpose
5 At a glance
6 Performance highlights
7 ESG highlights
8 Letter from the CEO
9 Highlights of the year
10 Five year summary
11 Outlook for 2024
Situated in Albertslund the automated central
warehouse is able to service the store network in
Denmark as well as in Sweden.
Annual Report 2023
Our purpose
AO was founded in 1914 with the purpose of creating value for our
customers. The purpose is at least as relevant now as it was 110
years ago.
In AO, we lend a hand. We are determined to contribute to making
our customers' lives easier. No matter the market conditions or the
current mega trends, walking an extra mile for the customer will
always be the AO way. AO is proud to be part of the customer team!
Financial statementsPerformance
In brief
Corporate governanceStrategyAnnual Report 2023
B2B
88.5%
Serving the
construction
industry and
professional
tradesmen
B2C
11. 5%
Serving private
DIY consumers
At a glance
Segments
DK East
29
DK West
28
Sweden
5
B2C Webshops Our long-term ambitions
Beat the market by
2%
year by year
EBITDA margin of
10%
8,000
daily customer interactions in the stores
BilligVVS.dk
BilligVVS.no
CompletVVS.dk
Greenline.dk
LampeGuru.dk
LampeGuru.no
LavprisEL.dk
LavprisVVS.dk
LavprisVærktøj.dk
Ljusochlampor.se
VVSochBAD.se
Stores
Solvency
40%+
and capital structure
(gearing 1.0 - 2.5)
Performance
In brief
Corporate governanceStrategy Financial statementsAnnual Report 2023
3,583 857
282 576
2019 2019
2019 2019
4,098 946
328 618
2020 2020
2020 2020
4,800 1,119
417 702
2021 2021
2021 2021
5,375 1,310
492 819
2022 2022
2022 2022
5,261 1,234
405 829
2023 2023
2023 2023
4.9
7.9 %
23.9%
16.1%
5.5
8.0%
23.1%
15.1%
6.1
8.7%
23.3%
14.6%
6.0
9.1%
24.4%
15.2%
5.8
7.7%
23.5%
15.8%
Performance highlights
Revenue
(MDKK)
Gross profit
(MDKK)
EBITDA
(MDKK)
Cost of doing
business
Gross proft
Gross profit margin
EBITDA
Margin
Cost of doing business
Cost of doing business ratio
Net revenue
Revenue per employee
Performance
In brief
Corporate governanceStrategy Financial statementsAnnual Report 2023
Electricity
Heating
Company cars/
forklift trucks
2020
Baseline
2,2 32
tons CO
2
827
tons CO
2
774
tons CO
2
631
tons CO
2
870
tons CO
2
694
tons CO
2
674
tons CO
2
910
tons CO
2
654
tons CO
2
612
tons CO
2
500
tons CO
2
689
tons CO
2
412
tons CO
2
2,238
tons CO
2
2, 211
tons CO
2
1,566
tons CO
2
2021 2022 2023
Scope 3 results
overview*
t CO
2
e
17%
Asia
<1%
Other countries
83%
of our purchases
originates from Europe
79%
Cat 11 - Use of Sold
Products
18%
Cat 1 - Purchased
G&S
2%
Cat 4 - Upstream
transportation
1%
Cat 9 - Downstream
Transportation &
Distribution
ESG highlights
Carbon emissions for scope 1 and 2
Scope 3 baseline established:
Use of products is the main contributor to our scope3 emissions
Purchasing patterns:
Performance
In brief
Corporate governanceStrategy Financial statementsAnnual Report 2023
At AO, we have taken important
steps to make our EA product
range available nationwide.
When we acquired EA in 2022,
the product range was sold
through 7 outlets, 6 of which
were in the western part of
Denmark. At the end of 2023,
EA's range is included in another
7 outlets, 5 of which are in the
eastern part of Denmark. We are
satisfied with the progress and
look forward to continuing the
roll-out during 2024.
Step by step we have seen the synergies from the new
shuttle system at our central warehouse kick in, and we
are satisfied to observe that our picking capacity has
increased significantly. Our central warehouse is ready
to support future growth in AO.
In times where competitors are closing outlets, AO
has continued to invest in ensuring that customers
have access 24/7 to appealing stores with the widest
possible range of products. We will continue to upgrade
our store network during 2024.
In addition to offering the best network of stores, we
continue to make it easier for our customers to do busi-
ness with AO. We provide a range of digital sales chan-
nels which are increasingly popular with our customers.
Today, AO is an efficient omni-channel business with
our nationwide physical store network being combined
with innovative digital solutions.
We have implemented several sustainability initiatives
alongside preparing for future sustainability reporting
requirements. AO remains committed to reducing our
Letter from the CEO
AO has continued its strategic execution
during a challenging 2023
own carbon impact by half by 2025, staying on track as
planned by the end of 2023.
Last but not least, our skilled and highly motivated
colleagues continue to be a competitive advantage.
Customers can rely on being served by capable
employees who willingly go the extra mile. Similarly,
AO's sales team can trust that their colleagues across
the organisation will support them to better serve our
customers.
The competition is expected to be fierce in 2024.
Demand is anticipated to fall short of wholesale
capacity. AO remains selective in bidding for projects
with unattractive gross margins but is committed to
being active in the project market despite the tough
conditions.
The future market and customers will require whole-
salers to take responsibility for leading the way in
promoting and advising customers regarding the green
transition and raising the bar in offering increased
convenience to customers. This will be another way of
lending a hand, and AO will invest in ensuring it is a
future leader in these capabilities.
The market conditions are expected to put increased
pressure on margins and increase the cost of doing
business in 2024. Investing in being the winner of
tomorrow will always be more important than short-
term profit optimisation for AO.
While 2023 did not meet our expectations and 2024
may present challenges, our focus is not to merely win
one quarter or one year. Our priority is to serve our
customers and make decisions based on our customers'
needs. We believe this approach positions us well to
succeed in the future.
Best regards
Niels A. Johansen, CEO
Performance
In brief
Corporate governanceStrategy Financial statementsAnnual Report 2023
Highlights of the year
As expected, 2023 proved to be
a challenging year for the market.
Overall demand lowered in the
second half of the year, and
cost inflation continued to put
pressure on earnings. AO took
strategic steps to prepare for
the future and continued to gain
market shares in a competitive
market.
At the end of 2023, EA's product range was rolled
out to 7 additional outlets, whereof 5 are in the
eastern part of Denmark. We are satisfied with
the execution and are looking forward to contin-
uing the roll out during 2024.
Step by step we have seen how the new shuttle
synergies kicks in, and we are satisfied to
observe that the picking capacity has increased
significantly. The central warehouse is ready to
support future growth in AO.
Our new flagship store in Aarhus opened on 2
November 2023, and only two weeks later, our
store in Roskilde re-opened after having been
enlarged and refurbished.
We have dedicated ourselves to ensuring the
successful implementation of the new CSRD
reporting starting in 2024. Moreover, our ongoing
commitment includes advancing efforts to halve
our scope 1 and 2 carbon footprint by 2025.
Our commercial digitalisation team and our IT
organisation have moved closer together in order
to further strengthen our efforts to provide our
customers with the best and the most innovative
digital solutions.
AO has continued to gain market shares in 2023
and is in a good position to continue doing so in
the future.
Performing well in a
challenging market
Performance
In brief
Corporate governanceStrategy Financial statementsAnnual Report 2023
Five year summary
(mDKK) 2023 2022 2021 2020 2019
Key figures
Revenue 5,261.0 5,375.0 4,800.5 4,098.3 3,582.7
Gross margin 1,234.3 1,310.3 1,119.3 945.7 857.4
Earnings before interest, taxes, depreciation and
amortisation (EBITDA) 405.3 491.6 417.2 328.2 281.6
Operating profit or loss (EBIT) 292.2 383.6 316.7 223.8 175.9
Financial income and expenses, net (30.4) (6.1) 9.4 (3.0) (6.4)
Profit or loss before tax (EBT) 261.8 377.4 326.1 220.8 168.4
Tax on profit or loss for the year (55.7) (83.0) (72.3) (47.9) (37.4)
Net profit or loss for the year 206.1 294.5 253.8 172.9 131.0
Non-current assets 1,805.9 1,727.3 1,472.7 1,320.0 1,349.2
Current assets 1,436.5 1,591.0 1,235.9 1,063.2 957.5
Total assets 3,242.4 3,318.3 2,708.5 2,383.2 2,306.7
Share capital 28.0 28.0 28.0 28.0 28.0
Equity 1,475.3 1,4 07.5 1,239.9 1,030.2 870.3
Non-current liabilities 535.2 539.5 295.9 330.6 337.4
Current liabilities 1,231.9 1,371.4 1,172.7 1,022.4 1,099.0
Cash flow from operating activities 346.4 215.8 308.1 375.4 302.7
Cash flow from investing activities (130.2) (333.3) (212.7) (66.3) (52.7)
Of which investments in property, plant and
equipment, net (94.8) (164.5) (170.5) ( 37.3) (26.1)
Cash flow from financing activities (161.7) 15.5 (91.6) (256.2) (186.2)
Cash flow for the year 54.5 (102.0) 3.7 52.8 63.8
2023 2022 2021 2020 2019
Financial ratios
Gross profit margin 23.5% 24.4% 23.3% 23.1% 23.9%
EBITDA margin 7.7% 9.1% 8.7% 8.0% 7.9 %
Profit margin 5.6% 7.1% 6.6% 5.5% 4.9%
Return on capital employed 8.9% 12.7% 12.4% 9.5% 7. 9%
Return on equity 14.3% 22.2% 22.4% 18.2% 16.1%
Net gearing 1.3 1.1 0.5 0.8 1.8
Solvency ratio 45.5% 42.4% 45.8% 43.2% 37.7 %
Book value* 52.7 50.3 44.3 36.8 31.1
Share price at the end of the year** 70.3 83.11 136.00 60.40 34.80
Price Earnings Basic (P/E Basic) 9.3 7.7 14.6 9.4 7.3
Dividend per DKK 1 share ** 3.75 5.25 4.5 1.5 0.6
Earnings per share (EPS Basic), DKK ** 7.6 10.8 9.3 6.4 4.8
Diluted earnings per share (EPS-D), DKK ** 7.6 10.8 9.3 6.4 4.8
Number of employees (FTE average) 912 889 784 741 734
Number of employees excluding temporary
workers (FTE average) 841 822 705 678 683
Number of employees at year-end (FTE) 833 850 734 686 678
Basic EPS and diluted EPS have been calculated in accordance with IAS 33. Other financial ratios have been prepared in accordance with the CFA
Society Denmark's "Recommendations and Financial Ratios". See definition of key figures on page 94
* Financial ratios for the respective periods have been restated retroactively for the share split.
** Comparrative figures related to shares have been restated to reflect share split in 2022.
Performance
In brief
Corporate governanceStrategy Financial statementsAnnual Report 2023
Outlook for 2024
Sensitivity to the outlook for 2024:
Geopolitical and macroeconomic tensions brings higher uncertainty to estimates than normally.
Continued change in the geopolitical and macroeconomic climate, supply disruptions and devel-
opments in raw material prices and interest rates may impact outlook for 2024.
Organic growth and gross margins are sensitive to revenue mix from ReMoVe versus projects and
to price pressure driven by competition.
Follow-up on previously announced outlook for 2023
AO delivered a growth in revenue of -2%. The negative
growth was expected due to market slowdown. AO
continued to gain market share during 2023.
It's AO's ambition to reach an annual growth which is at
least 2% higher than the market growth.
An EBITDA for the year of DKK 405m corresponding to
7.7% of net sales for the year, and profit before tax of
DKK 262m, corresponding to 5.0% of net sales of DKK
5,261m are in line with the latest outlook announced as
at 26 October 2023, of net sales of DKK 5,150 – 5,300m,
an EBITDA of DKK 400 – 430m and a profit before tax in
the order of DKK 260 – 290m.
2024 outlook
AO is in a good position to grow the business. Partly due
to the current momentum in AO and partly due to market
opportunities for instance in expanding the EA product
range nationwide, expanding activities within green
transition, expanding the geographical footprint in AO
Sweden and by seeking M&A opportunities.
The market activity slow down that kicked in mid-2023
is expected to continue in 2024. The negative growth is
expected to be approximately 10-15% at the beginning
of the year. Market activity is expected to gradually
increase during 2024, and is expected to show a higher
sales index than in the first quarter of the year.
While the market growth for the full year is expected to
be approximately -3% to -7.5% the AO momentum and
the growth within the EA product range is expected to
mitigate the market reduction, and thus AO is expecting
revenues 1-5% shy of 2023.
Given that demand will fall short of wholesale capacity,
the competition is expected to be fierce and put pres-
sure on gross profit margins. AO will continue the tight
cost management but is committed to invest in addi-
tional competencies within green transition and climate
as well as other focus areas. AO will be continuing
the investments in digital solutions, logistics and our
outlets. The investment level in 2024 is expected to be
approximately DKK 150 - 200m to facilitate the longer
term growth.
Based on the above estimates and assumptions, AO
expects a revenue of DKK 5,000-5,200m, an EBITDA in
the range of DKK 340-370m, an an EBT in the range of
DKK 200-230m. Estimated earnings for 2024 does not
reflect the longer term potentials and ambitions for AO.
The 2024 guidance is as follows
2023
Revenue, (mDKK)
5,261
EBITDA, (mDKK)
405
EBT, (mDKK)
262
Outlook 2024
5,000 – 5,200
Growth -5.0% to -1.2%
340 – 370
EBITDA margin 6.5% to 7.4%
200 – 230
EBT margin 3.8% to 4.6%
Performance
In brief
Corporate governanceStrategy Financial statementsAnnual Report 2023
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The customer
is at the centre of
everything that
we do at AO and
has been at the
core ever since we
were founded
Tradesmen
B2B
Construction
B2B
AO
employee
Consumers
B2C
Business
model
AO's omni-channel business model secures
a coherent customer experience for all
customers across touchpoints.
AO works with more than 1,000 suppliers and is continuously expanding our
range of products to target more customers and support one-stop-shopping.
The automated central warehouse in Albertslund and the logistics centre in
Horsens are corner stones in AO. 90% of all products are picked automati-
cally, thus ensuring both high service quality and efficiency.
AO's product range and service are promoted across a number of different
sales channels that support the individual customer's preference.
AO is providing the best of two worlds via value-added digital services and
close customer relations through our local stores.
Modern wholesaling is a matter of offering the right products at the right
prices and making customers’ lives as simple and as flexible as possible.
The AO365 concept is one such example. With AO365, customers hold a
digital key to all AO stores, - securing both convenience and flexibility for
the individual customer.
1.
Suppliers
More than 1,000 suppliers
provide the widest product
range in the wholesale
business
3.
Sales
channels
Omnichannel business
with 57 physical stores
in Denmark and five in
Sweden enabling 8,000
daily customer interactions.
Digital share of sales makes
up 50% of revenue. B2C
customers are served out of
10 unique webshops
2.
Central
warehouse
Automated warehouse
solution ready to serve
growth. 600,000 SKUs
available for sale
4.
Services
As a true omnichannel
business AO offers a
wide range of services
from selfservice through
AO365 to advanced
project advice via our
compentency centres
Financial statementsPerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Industry and
market trends
AO's strategy is shaped by the prevailing
megatrends that exert influence on the current
market landscape. These trends present both
challenges and significant opportunities for
AO's business development.
The dominant themes within these market trends
revolve around the green transition, climate changes,
and the escalating pace of digitalisation.
These trends have been categorised into five
megatrends that steer our strategic focus areas.
Green transition
The green transition megatrend symbolises
a global shift toward sustainability and
eco-conscious practices across industries.
It encompasses renewable energy adoption,
resource efficiency, and circular economy
principles. Consumers increasingly support
eco-friendly products and services, driving
market demand. 2022 and 2023 have shown
that energy prices are a major driver behind
green transition demand.
AO has a wide range of products that
directly service the green transition. In addi-
tion, AO aims to be the wholesale company
with the best and most accurate data on
the environmental impact of our products
enabling our customers to make informed
choices in their purchases.
Digitalisation
The digital agenda provides opportunities
for efficiency gains but also requires compa-
nies to serve their customers with data and
enable them to make data-driven decisions.
AO has been at the forefront of digitalisation
and will continue to be so. Providing our
customers with accurate data on the prod-
ucts – including ESG data will be a key point
in being the best partner for our customers.
RPA and AI bring new opportunities for
efficiencies.
Consolidation
Installers are increasingly joining forces
either by mergers or by joining purchasing
organisations. The consolidation is
happening within and across installer
segments. Larger groups of installers seek
to use their purchasing power to get better
terms as well as their larger flexibility to
serve a broader range of customers.
AO has good and long experience in working
with various purchasing organisations and
is in a good position to service these organi-
sations via our omni-channel offerings.
Climate change
As part of the climate change adaptation in
both Denmark and Sweden there is a need
for investments in the water infrastructure.
In both countries Sewage & Drainage as well
as Water Supply in general are due for an
overhaul.
AO is in a good position to deliver into these
projects.
Electrification
The electrification agenda is a pivotal shift
toward cleaner energy sources, driving inno-
vation and sustainability. It encompasses
electrifying transportation, revolutionising
industries, and advancing renewable energy
infrastructure.
AO plays a part in the electrification agenda
by supplying electrical components, cables,
EV chargers, and solar panels.
Financial statementsPerformanceIn brief Corporate governance
Strategy
Annual Report 2023
We lend
a hand
The Group’s strategy is to serve the professional market via AO in Denmark
and Sweden and to serve the private markets in Denmark, Norway and
Sweden via our portfolio of differentiated webshops run on a common
platform.
In the professional market, it is AO’s ambition to be the trademens' and
large construction customers' preferred supplier of technical installation
materials. As a rule of thumb, the ReMoVe market represents about 70%,
while project sales represent about 30%.
Corporate
strategy
At AO, the customer is at the heart of everything we do and
develop. We want to create value for our professional and
private customers. That’s something we aim to do every
single day, and why we say: “We lend a hand”. It builds on
AO's genuine and heartfelt interest in understanding the
present and future needs of our customers and being able
to help them.
Part of
the team
AO is as much a sparring partner as a
wholesaler. And we are proud to be part
of the team when the tradesmen reno-
vate, modernise and maintain Denmark.
It is our strategy to remain the leader in
the ReMoVe business by continuing the
development of the value creation in our
omni-channel offerings.
Towards
common goals
AO's projects department creates a
secure framework for large construction
projects. We are not only focused on
the offer, but also on ensuring that your
project gets done better, cheaper and
faster. It is our strategy to become one
of the best partners to construction
customers, by developing new digital
support services.
It pays to start in
the right place
AO has the industry's most complete B2C
offer within simple home improvements
and DIY. We are close to the customers
with all the inspiration, advice and
service they need. It is our strategy to
remain the onlineleader in DIY, by contin-
uing to offer new product ranges and
solutions, and thus making DIY easier.
Actively contributing to
a sustainable world
AO wants to be the leading green whole-
saler to the construction industry and
make it easy for all installers to comply
with climate requirements, and to
ensure a minimal environmental impact.
AO wishes to help promote a sustainable
world by supporting and contributing to
a sustainable construction sector.
Financial statementsPerformanceIn brief Corporate governance
Strategy
Annual Report 2023
“
Our strategy is to continue to innovate and develop our omni-channel offer-
ings – a hybrid business strategy, embracing the human touch in physical
and digital touchpoints and securing efficiency, flexibility and scalability via
digitalised stores and harvesting the best of two worlds. We will continue to
expand our product range and utilise it across target groups.
We aim to increase the business in Sweden too as we see a strong potential
for organic growth.
The major construction customers are served via our Group projects depart-
ment with competencies targeting the special needs of the construction
industry. We will increase both the digital, logistics and advisory services,
and we will make it easy to comply with the increasing sustainability needs
and requirements.
In the private DIY market, it's AO’s ambition to be the leading online trading
platform for the sale of technical home improvement materials in Denmark
and one of the leading online platforms in Sweden and Norway.
We will continue to evaluate opportunities within M&A in both B2B and B2C.
At AO, we believe that everyone has a duty to manage available resources
and opportunities in a responsible way, ensuring the best possible condi-
tions for the next generation to build on. That is why we take responsibility
through our climate goals: to reduce CO
2
by 50% by 2025 in compliance with
GHG Protocol scope 1 and 2, and to make AO carbon neutral by 2030.
At AO, the customer is at
the heart of everything we
do and develop. We want
to create value growth
for our professional and
private customers. That's
something we aim to do
every single day, and why
we say: "We lend a hand".
Financial statementsPerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Strategic ambitions
Profitable growth
· It is a strategic priority for AO to maintain and expand the industry's best
B2B opportunities and the market's best B2C opportunities.
· The pressure on profit margins is estimated to increase in the future,
but AO will pursue a profitable growth via an ambitious and data-driven
purchasing and pricing strategy.
· AO has the widest installer coverage with increasing cross-sell across
product categories. New growth opportunities await in new business
segments and in AO Sweden.
· AO´s omni-channel strategy secures both digital efficiency and close
customer relations
· It´s AO´s ambition to beat the market with a minimum of 2% each year via
organic and acquisitive growth
High efficiency
· It´s AO’s ambition to continue to optimise internal and external
processes, so that we use our skills for the complex task that make a
difference for our customers and automate simple manual tasks.
· AI has been heralded as the most important technology of our time.
We believe in a proactive approach to the use of artificial intelligence
across AO.
· AO has made substantial investments in optimising efficiency and
increasing capacity at the central warehouse in Albertslund and the
Logistics Centre West in Horsens. We will continue to exploit these
synergies.
· It's our ambition to have the highest efficiency in the market and to
reach an EBITDA margin of 10%.
Solid foundation
· AO must attract and retain the industry's best employees with high agility,
professionalism and well-being.
· At AO, we have the best team in the industry. An organisation rounded out by
AO's culture and with the industry's most loyal and experienced employees.
The most important thing for AO's future competitiveness is the employees.
· IT plays a decisive role in AO's transformational power. It is crucial that AO has
an IT landscape that is agile, scalable and future-proof, so that we can use as
many resources as possible on development rather than operation.
· AO has a strong balance sheet and a robust capital structure, enabling AO
to resist headwind and to seize opportunities. End of 2023 the debt consists
solely of mortgage debt and lease liabilities. To make sure that AO has the
flexibility to act on potential M&A opportunities, the Board has decided to
change the gearing target from 0.5-1.5 times EBITDA to 1.0-2.5 times EBITDA.
Financial statementsPerformanceIn brief Corporate governance
Strategy
Annual Report 2023
“
Brødrene A & O Johansen A/S
Rørvang 3, 2620 Albe rtslund, Den mark
CVR-no. 58 21 06 17
Statutory Repor t on Corporate Social Responsibilit y,
cf. Section 99a of the Danish Financial St atements Act
Sustainability
Report 2023
Sustainability
At AO, we believe that everyone has a duty to manage available
resources and opportunities in a responsible way, ensuring the best
possible conditions that the next generation can build on.
AO wants to help make our world sustainable by
supporting and contributing to a sustainable society by
focusing on climate and the environment, social issues
and governance based on integrity and fairness.
Responsibility and integrity are an integral part of
the AO culture and are expressed in our dealings with
customers, suppliers and business associates, in the
daily management of our employees and our cooper-
ation with the society that we are part of and want to
contribute to.
AO supports and respects the Ten Principles of the UN
Global Compact on human rights, workers’ rights, the
environment and anti-corruption in all aspects of our
company’s business, and we support the UN Global
Goals with specific actions in respect of selected Global
Goals.
The full statutory report on corporate social responsi-
bility/ESG for the 2023 financial year, under Section
99a of the Danish Financial Statements Act and the EU
Taxonomy Regulation, can be viewed or downloaded
at https://ao.dk/globalassets/download/regnsk-
AO’s policy for corporate social responsibility has been
approved by the Board of Directors and can be viewed
or downloaded at https://ao.dk/om-ao/investor-rela-
tions/in-english/company-profile/policy-for-csr-2023
Environment and climate
AO focuses on continuous improvement of its envi-
ronmental and climate initiatives. As a company, AO
wishes to protect our environment and climate and is so
striving to remain at the cutting edge of developments
in the fields prioritised by AO as focus areas, so that
society can evolve on a sustainable basis.
Our focus areas are:
· waste – reduction and recycling
· energy consumption – reducing our consump-
tion of electricity and heating and the use of
fossil fuels
· transport – reducing its volume and environ-
mental impact.
As an IT and logistics
company selling a
variety of goods to
tradesmen, and with
very limited in-house
production via our
activities at Vaga Teknik,
our direct and indirect
carbon footprint is
limited (scope 1 and 2),
amounting to 1,566 tons
of CO
2
in 2023.
→ Sustainability report 2023
https://ao.dk/globalassets/download/regnsk-
absdata/2023/esg_report_2023.pdf
Financial statementsPerformanceIn brief Corporate governance
Strategy
Annual Report 2023
CO
2
emission
CO
2
emission
50% reduction
2,232
50%
2020
2025
AO to be carbon
neutral by 2030
As an IT and logistics company selling a variety of goods to tradesmen, and
with very limited in-house production via our activities at Vaga Teknik, our
direct and indirect carbon footprint is limited (scope 1 and 2), amounting to
1,566 tonnes of CO
2
in 2023*.
Although our CO
2
emissions are modest compared to the size of the company,
we have set an ambitious target to reduce our CO
2
emissions by at least 50%
by 2025 and to be CO
2
neutral on scope 1 and 2 emissions by 2030.
Scope 3 and SBTi
AO has established a scope 3 CO
2
emissions baseline for our operations and
value chain. Based on a 2022 baseline, we committed to the Science Based
Targets initiative (SBTi) in 2023, and we are currently awaiting SBTi's approval
of both our near-term and net zero targets.
Electricity
Heating
Cars/trucks
0
2030
CO
2
emission
Carbon neutral
* Our carbon footprint is calculated according to the environmental declaration on scope 1
and 2 emissions. Calculated according to the electricity declaration, our climate footprint
amounts to 3,118 tonnes of CO
2
.
Financial statementsPerformanceIn brief Corporate governance
Strategy
Annual Report 2023
People
Our highly skilled and motivated staff is our greatest
asset and forms the foundation of our success and
performance. This is why AO seeks to ensure a respon-
sible, safe and healthy working environment that
promotes the welfare of our colleagues across AO.
We focus on:
· welfare and retention
· development and training
· sick leave and occupational accidents.
It is important for us to focus on continuous devel-
opment of the personal and professional skills of our
staff, so that we can continue to meet the ever-changing
market needs.
AO seeks to ensure that the company’s gender compo-
sition is reflected in the company’s various manage-
ment levels in the long term.
AO has defined targets for the gender composition
of the senior management body and the underrepre-
sented gender at other company management levels
and has devised a policy to increase the proportion
of the underrepresented gender at other company
management levels.
Financial statementsPerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Financial statementsPerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Financial statementsPerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Diversity policy
AO also has a diversity policy which is applied in
the composition of the company’s management. The
statutory report on diversity under section 107d of the
Danish Financial Statements Act and the diversity policy
can be viewed or downloaded at:
→ Statutory report on gender composition
of management
https://ao.dk/globalassets/download/regnskabsdata/2023/
diversity_2023_report.pdf
→ Statutory report on diversity
https://ao.dk/globalassets/download/regnskabsdata/2023/
diversity_2023_report.pdf
→ Diversity policy
Governance
We manage and control our business in a responsible
manner at AO, ensuring integrity and fairness in the way
in which we do business.
As regards sustainability, this work is taking place
through a well-defined governance structure to ensure
it is rooted throughout the AO organisation.
Whistleblower
In December 2021, we established an internal whistle-
blower scheme that allows our employees, Executive
Board and Board of Directors to report any reasonable
suspicion of serious matters or offences in the workplace.
The scheme is administered externally, and an annual
assessment is performed to see whether the scheme
is working as intended, and whether we wish to extend
it so as to include external partners, citizens, etc. The
Board will evaluate the potential need to expand the
current scheme on an ongoing basis.
Green due diligence
In 2022, we developed a green due diligence method
that will be used going forward to weight the green
transition in connection with takeovers on the basis of a
double materiality approach, assessing both the impact
of the green transition of the takeover target on AO’s
financial performance and the environmental impact on
the surroundings.
Data ethics
It is important for AO to ensure that customers,
suppliers and other partners can rely on AO’s data
processing.
Data and the use of new technologies are crucial when
supporting our customers and giving them the best
experience when they shop with us. Data is also impor-
tant when it comes to assessing the digital security of
our suppliers and other partners.
Furthermore, we want our staff to feel secure when it
comes to AO’s processing of their data, which includes
ensuring that only necessary information is recorded
and used for objective reasons.
We established a data ethics task force in late 2021,
and the data ethics policy was re-approved by the Board
of Directors in 2023.
The statutory report on data ethics under Section 99d
of the Danish Financial Statements Act can be viewed or
downloaded at:
→ Statutory report on data ethics
Corporate governance
The Board of Directors maintains engaged and active
communication on compliance with Recommendations
on Corporate Governance (Anbefalinger for god sel-
skabsledelse), which leads to changes in the work of
the Board of Directors when necessary. It is important
for the Board of Directors to ensure that these recom-
mendations add value for the company’s stakeholders.
That is why we have chosen to follow 33 of 40 recom-
mendations in 2023.
CSRD readiness
In preparation for the CSRD reporting for 2024 the
Board of Directors has approved the preliminary double
materiality assessment that sets the direction for AO's
ESG effforts. More information can be found in the
Sustainability Report.
Financial statementsPerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Financial results
Performance
Gaining market
shares in challenging
market conditions
Revenue
Organic revenue development was -3.3% (7.9%) and
revenue for 2023 was DKK 5,261m (DKK 5,375m), in line
with our latest outlook in our Q3 report. Second half of
2023 saw decreasing sales in terms of volume but with
a high amount of orders and customer visits.
The B2C segment returned to positive growth rates
in Q4.
Gross profit
Gross profit ended at DKK 1,234m (DKK 1,310m),
corresponding to a gross profit margin of 23.5%
(24.4%). Last year the gross profit margin was affected
by one-off effects from supplier-driven price increases
impacting 2022 margins with approx. 0.8 percentage
point.
External costs and staff costs
In total, external operating costs and staff costs made
up 15.8% of revenue (15.2%). Total organic cost devel-
opment has been kept stable despite cost and salary
inflation. The decreasing average customer order
towards the end of the year contributes to driving the
cost ratio upwards.
In 2023 we achieved an EBITDA result of DKK 405m
(DKK 492m) in line with our latest guidance. Organic
growth was -3.3% (7.9%) and gross profit margin ended
at 23.5% (24.4%) with minimal one-off impacts
Financial statements
Performance
In brief Corporate governance
Strategy
Annual Report 2023
Year end FTEs were 833 (850). During 2023 the number
of FTEs has been reduced as synergies from the EA
acquisition are realised.
EBITDA
EBITDA ended at DKK 405m (DKK 492m), corresponding
to an EBITDA margin of 7.7%. (9.1%). Margins were
under pressure from cost inflation and limited price
increases. In addition the lower B2C share of the
revenue results in lower overall margins. The results of
the segments is presented in the following pages.
Financials
Net financials amounted to DKK -30m (DKK -6m).
Increasing interest rates as well as a higher average
debt level have affected the financials.
Earnings before tax (EBT)
EBT ended at DKK 262m (DKK 377m).
Income tax
Income tax amounted to DKK -56m (DKK -83m), corre-
sponding to an effective tax rate of 21.3% (22.0%).
Earnings after tax (EAT)
EAT ended at DKK 206m (DKK 294m).
Equity
At the end of the year equity amounted to DKK 1,475m
(DKK 1,407m). Thus, the solvency ratio at year-end was
45.5% (42.4%) and the target of maintaining a solvency
of 40%+ was achieved.
Cash flows
Average net working capital for the year was 5.8%
(3.5%) of revenue. At the end of the year net working
capital was 5.6% (6.0%) of revenue.
Cash flow from operating activities totalled DKK 346m
(DKK 216m).
Change in receivables was DKK 85m (DKK -107m) driven
by the Q4 activity as well as timing of payments.
Change in inventories contributed with a positive cash
flow of DKK 100m (DKK -219m). After Q1 an inventory
reduction project was started delivering a DKK 172m
reduction in inventory in Q2-Q4.
Cash flow from investing activities totalled DKK
-130m (DKK -333m). 2022 had a high investment level
including the acquisition of EA Værktøj.
Cash flow from financing activities was DKK -162m (DKK
16m) reflecting a high level of dividend payouts as well
as a reduction of the net interest bearing debt.
Net interest bearing debt amounted to DKK 522m (DKK
543m) at year end. Financial gearing was 1.3 times
EBITDA (1.1 times).
At the end of 2023 AO had undrawn credit facilities of
DKK 600m.
Financial statements
Performance
In brief Corporate governance
Strategy
Annual Report 2023
Q4 financials
Q4 saw a slow-down of the market compared to previous quarters
of 2023. The number of customer visits stayed high, but the
average basket size decreased and the anticipated pick up of the
market for heating pumps did not take place. Last year, margins
and results were helped by reaching stair bonus levels in supplier
bonuses which did not happen to the same degree in 2023.
Revenue
Revenue development was negative by 7.8% resulting
in a revenue of DKK 1.361m (DKK 1.476m). The negative
revenue development was seen in the B2B segment
whereas the B2C segment returned to growth in Q4.
Gross profit
Gross profit of DKK 318m (DKK 380m) corresponds to a
profit margin of 23.4% (25.7%). In 2022 Q4 gross profit
was positively impacted by achieving supplier stair
bonus levels. The same effect has only been seen to a
limited degree in 2023. In addition supplier bonuses
have been more evenly distributed over 2023 than in
2022. The effect comparing quarter to quarter is DKK
25m.
External expenses and staff costs
Tight cost control has contributed to the external
expenses and staff cost totalling DKK 222.9m (DKK
240.7m) despite salary and cost inflation. The cost of
doing business ratio was therefore kept stable at 16.4%
(16.3%).
EBITDA
EBITDA ended at DKK 95m (DKKK 139m), corresponding
to an EBITDA margin of 7.0% (9.4%). Margins were under
pressure from cost inflation and limited price increases.
In addition a higher level of depreciations and financial
items put pressure on EBITDA.
Earnings before tax (EBT)
EBT of the quarter ended at DKK 58m (DKK 109m).
MDKK Q4 2023 Q4 2022
Revenue 1,361.4 1,476.2
Cost of sales (1,043.6) (1,098.6)
Gross profit 317.8 377.6
Other operating income 0.4 2.2
Gross margin 318.2 379.8
External expenses (90.1) (107.9)
Staff costs (132.7) (132.7)
Earnings before interest, taxes, depreciation and amortisation (EBITDA) 95.4 139.2
Depreciation and amortisation (29.6) (26.7)
Operating profit or loss (EBIT) 65.8 112.5
Financial income 0.7 0.0
Financial expenses (8.6) (3.4)
Profit or loss before tax (EBT) 57.9 109.1
Tax on profit or loss for the year (11.5) (24,2)
Net profit or loss for the year 46.4 84.9
Financial statements
Performance
In brief Corporate governance
Strategy
Annual Report 2023
B2B performance
B2B
The B2B segment services the professional tradesmen as well as
large construction companies out of 57 stores in Denmark and
five stores in Sweden. In Denmark, AO is the wholesaler with the
broadest product range serving more trades than our competitors.
The B2B segment has roughly 70% of its revenue within repair
and maintenance and 30% within projects. In the B2B segment
AO has gained market shares in 2023 but was affected by the
market decline in Q4.
Revenue
Segment revenue was DKK 4,659m (DKK 4,736m) for the
year and DKK 1,173m (DKK1,301m) for the quarter. The
development was in line with expectations from the last
outlook.
Gross profit
Gross profit of DKK 1,070m (DKK 1,129m) corresponds
to a profit margin of 23.0% (23.8%). The reduction in
margin is related to the large one-off impacts from
supplier-driven price increases in 2022.
Direct expenses
Tight cost control has contributed to direct expenses
being kept stable at DKK 486m (DKK 484m) despite
2023 having three months of EA expenses more on the
books.
EBITDA
Segment EBITDA ended at DKK 585m (DKK 646m).
Distribution of sales channels
MDKK 2023 2022 Q4 2023 Q4 2022
Revenue 4,658.6 4,735.6 1,173.0 1,303.8
Cost of goods sold (3,427.4) (3,440.3) (864.9) (931.7)
Product margin 1,231.1 1,295.2 308.0 372.0
Distribution (160.7) (165.8) (41.5) (46.3)
Gross profit 1,070.4 1,129.4 266.5 325.7
Direct expenses (485.9) (483.8) (122.4) (145.1)
EBITDA before indirect expenses 584.5 645.6 144.1 180.6
Key figures
Gross margin % 23.0% 23.8% 22.7% 25.0%
EBITDA % 12.5% 13.6% 12.3% 13.9%
Physical
57%
Digital
43%
Financial statements
Performance
In brief Corporate governance
Strategy
Annual Report 2023
B2C performance
B2C
AO is the market leader within online DIY sales in Denmark. Sales
are done out of 11 webshops operating on a shared back-end
platform. For the year, sales were declining but Q4 saw a return to
growth. Scale of the business is even more important in the B2C
segment when it comes to profit margins, and it is the ambition to
grow the segment both organically and through acquisitions.
Revenue
Segment revenue was DKK 603m (DKK 639m) for the
year and DKK 189m (DKK 172m) for the quarter. During
Q4 the B2C segment had a record-breaking sales during
“Black Week” boosting revenue but at slightly lower
margins.
Gross profit
Gross profit of DKK 164m (DKK 181m) corresponds to a
profit margin of 27.2% (28.3%). The reduction in margin
is mainly related to the large one-off impacts from
supplier-driven price increases in 2022 but it is still
higher than the margins in the rest of the business.
Direct expenses
The expense level has been under pressure for cost and
salary inflation but has been kept stable at DKK 133m
(DKK 135m)
EBITDA
Segment EBITDA ended at DKK 31m (DKK 46m). It is the
ambition that the segment EBITDA margin should reach
at least 10% which is to be achieved through growing
the top line.
Number of households serviced
MDKK 2023 2022 Q4 2023 Q4 2022
Revenue 602.5 639.4 188.5 172.4
Cost of goods sold ( 387.8) (411.3) (119.9) (105.4)
Product margin 214.6 228.2 68.5 67.1
Distribution (50.7) (47.3) (16.7) (13.0)
Gross profit 163.9 180.9 51.8 54.1
Direct expenses (133.2) (135.4) (40.3) (42.9)
EBITDA before indirect expenses 30.7 45.5 11.5 11.2
Key figures
Gross margin % 27.2% 28.3% 27.5% 31.4%
EBITDA % 5.1% 7.1% 6.1% 6.5%
432,1872022
448,1702023
Financial statements
Performance
In brief Corporate governance
Strategy
Annual Report 2023
Risk management
The identification and management of
business risks form part of the annual
strategic plan for the Group, which is
approved by the Board of Directors.
The Executive Board and the Board of
Directors also establish the framework for
determination of credit risk, currency risk,
interest rate risk and liquidity risk.
Risk management is an integral part of the business management at AO.
We prioritise having the necessary competencies within the business areas
in which we operate. A yearly reassessment of risks and methods for risk
identification and management is conducted. To define risk appetite and
assess risks, risks are mapped in a classical risk model based on probability
(frequency) and financial impact.
Risk identification
The focus of the risk management process is to identify and evaluate opera-
tional and strategic risks for AO in the short, medium, and long term. These
risks are defined as events or developments that have a significant negative
impact on AO's ability to:
· achieve profit goals
· execute on the strategy
· maintain a "license to operate".
Both gross risks (inherent risk) and net risks (residual risk) are considered.
Gross risks are defined as the product of the consequence and probability
of a risk, assuming that no risk mitigation measures are in place. Net risks
are the product of the remaining risk after risk-reducing measures. Net risks
should align with AO's risk appetite.
Risk assessment
The significance of risks is assessed as a combination of the probability of
the risk materialising and the consequences if it does. The probability is
evaluated based on the frequency with which AO expects the risk to occur,
while the consequences are assessed on various parameters:
· impact on results (direct or indirect financial effect)
· impact on reputation
· compliance (license to operate, including personal safety).
Risk Management
The purpose of identifying, assessing, and subsequently managing risks is
to reduce net risk to an acceptable level in accordance with the decided level
of risk appetite. In the risk management system, we employ four strategies
to handle risks:
· avoid – cease or make changes to activities that pose risks.
· transfer – shift risk to a third party.
· mitigate – seek to minimise identified risks to an acceptable level.
· accept – monitor risk and create contingency plans if the risk occurs.
Dynamic risk adaption
Mitigation
Devise and
implement stra
tegies to reduce
the impact of
risks.
Reporting
Communication
of identified
risks and results
from analysis to
stakeholders.
Analysis
Evaluation of risk
nature, proba-
bility, and impact
across variuous
business aspects.
Identification
Systematic
recognition of
potential risks
within AO's
operations.
Ongoing key risk reassessment Tracking
Financial statementsPerformanceIn brief
Corporate governance
Strategy
Annual Report 2023
A
New entrants
in the market
B
Geopolitical and
macroeconomic uncertainty
C
Credit
Management
Description
A new or existing player is expanding in the
Danish market, resulting in increased competi-
tion and/or margin pressure, thereby having a
negative impact on the profit.
Risk of market decline due to geopolitical or
macroeconomic uncertainties.
Risk of losses associated with extending credit
to customers.
Impact
The risk of increased consolidation in the
Danish market creating stronger competitors
could mean that AO loses competitive advan-
tages and is unable to meet the goal of gaining
market share. The result could be lost revenue
and earnings.
Probability:
Medium
Impact:
Medium
Geopolitical uncertainties can lead to macroe-
conomic downturns involving inflation, rising
interest rates, increasing energy costs, etc. This
could impact the construction industry overall
and decrease market demand.
Probability:
High
Impact:
Medium
Customer credits are an established part of
the wholesale industry, and the majority of the
group's sales are conducted on credit. The risk
increases during downturns in the construction
industry, where the likelihood of sudden bank-
ruptcies among the customer base rises.
Probability:
Medium
Impact:
Medium
Risk response
Mitigation
To minimise the potential impact, AO aims to
continue making it as easy and transparent
as possible for customers to trade with AO.
Emphasis on streamlining the supply chain and
overhead costs is intended to ensure that AO
can remain competitive in terms of pricing, even
compared to larger competitors.
Acceptance
AO acknowledges that the risk cannot be
entirely avoided and actively monitors the
actions of existing and potential new compet-
itors.
Acceptance
AO acknowledges that the risk cannot be
entirely avoided and actively works to monitor
market developments. In budgets and fore-
casts, AO establishes the foundation for
business initiatives. AO aims to have a scal-
able business with lower overhead costs than
competitors, which can mitigate the impact.
Mitigation
AO has established a credit policy and contin-
uously monitors customers' outstanding
balances. Accounts with overdue balances are
closed, reducing the risk of further losses.
Transfer
AO insures larger customer engagements
through credit insurance, providing coverage
against significant individual losses.
Acceptance
There is an acceptance of a certain level of risk
in customer credits.
Net risks are
identified and
classified
High
Medium
AO's top risks are mapped
out in terms of probability
and impact.
Financial statementsPerformanceIn brief
Corporate governance
Strategy
Annual Report 2023
D
Global supply chain
E
People
F
IT risks
G
Cyberattack
Description
Risk of product unavailability due to supply chain
uncertainties.
Risk of inability to attract or retain key employees.
Additionally, there is a risk of a deficient talent pipe-
line for key positions, including top management.
Risk of breakdowns in business-critical systems,
including the failure to fully leverage IT integrations.
Risk of IT breakdown due to a cyberattack.
Impact
In the event that AO cannot supply the products
customers need, there is a risk of losing customers
to competitors, ultimately affecting revenue and
earnings.
Probability:
High
Impact:
High
AO's employees are viewed as a key asset and the
primary element in 'winning the market,' making the
inability to retain employees a significant risk. There
is a risk of dilution of the AO culture. The failure to
attract and retain the right leaders and specialists
can impede both development and daily opera-
tions, ultimately affecting the ability to execute the
strategy.
Probability:
Medium
Impact:
Medium
Frequent but short-term IT outages resulting in oper-
ational losses, leading to an inability to maintain
the desired efficiency and service level for AO's
customers. There is a risk that the lack of optimisa-
tion in operations could result in productivity loss.
Probability:
High
Impact:
Medium
Business disruption due to compromised data, de
nial-of-service attacks, ransomware etc. are among
the consequences of a cyberattack. The duration
of such a business disruption can be lenghty and
have significant impact on AO's ablility to conduct
business.
Probability:
Medium
Impact:
High
Risk response
Mitigation
AO collaborates closely with its key suppliers,
gaining an understanding of their supply situations.
In dialogue with the sales and procurement organisa-
tion, min/max inventory levels are established, and
shortages are monitored. Where possible, efforts are
made to have alternative products and suppliers for
essential items. During crisis periods, buffer stocks
are built up to ensure AO can fulfill customer orders.
Mitigation
AO strives to be an attractive workplace with a focus
on employee development. Employee satisfaction
surveys are conducted, and action plans are imple-
mented to address feedback. Goals are set, and turn-
over among employees is monitored.
For key positions, including top management, active
work is done on succession plans, identifying both
internal and external candidates for relevant roles.
AO has successfully nurtured internal talents, and
there is ongoing effort to identify new leadership
talents within the sales organisation.
Mitigation
AO collaborates closely with its key partners and
works on expanding a robust IT organisation to
support AO's activities.
Mitigation
AO has established an IT Security Council reporting
to AO's management, which provides guidelines for
AO's IT security. Business Continuity Plans are in
place to mitigate the impact.
Transfer
AO has obtained insurance coverage against cyberat-
tacks, thus reducing but not eliminating the potential
impact.
High
Medium
Financial statementsPerformanceIn brief
Corporate governance
Strategy
Annual Report 2023
Group Management
Corporate Governance
The Board of Directors/Audit Committee and the Executive Board
have overall responsibility for the Group’s internal controls and risk
management in connection with the financial reporting process,
including compliance with applicable legislation and other regulations
in relation to financial reporting.
AO has established internal control and risk manage-
ment systems to ensure that financial reporting
is carried out in accordance with IFRS and other
accounting regulations applicable to listed Danish
companies. In addition, the systems increase the
certainty that the internal and external financial
reporting provides a true and fair presentation that is
free from material misstatement.
The Audit Committee monitors the control and risk
management systems in the Group on an ongoing
basis. In this context, risks that may affect the Group’s
financial reporting process are likewise assessed on an
ongoing basis. The risk assessment is based on signifi-
cant items and other business-critical areas.
Recommendations on corporate governance
All recommendations have been analysed and consid-
ered by the Board of Directors and the Executive Board
of Brødrene A & O Johansen A/S, and the Board of Direc-
tors is of the opinion that the management of Brødrene
A & O Johansen A/S complies with the most important
recommendations in the report.
The company has opted to implement another approach
to seven areas in 2023, which is one fewer than in 2022.
Two-tier governance structure
Shareholders
Board of Directiors
Audit
Committee
Normination
Committee
Excutive Board
Organisation
Remuneration
Committee
Financial statementsPerformanceIn brief
Corporate governance
Strategy
Annual Report 2023
A summary of the seven areas where the
Group has chosen to follow a different
practice is provided below:
· Given the company’s ownership structure, the Board
reserves the right to reject takeover bids in certain
cases without submission to shareholders.
· The Chief Executive Officer is a member of the Board.
· General management is carried out by a member of
the Board.
· 3 out of 5 of the Directors elected by the Annual
General Meeting are not independent as they have
been members for more than 12 years.
· 2 out of 4 of the members of the Audit Committee are
not independent. This committee is made up solely of
members of the company’s Board of Directors, which
is why there is no requirement for independence.
· The Chair of the Board is also the Chair of the Audit
Committee.
· The company has implemented a whistleblower
scheme which is available only to the company’s
employees, which is compliant with applicable
legislation.
Brødrene A & O Johansen A/S has prepared a full report
on corporate governance for the 2023 financial year
under Section 107b of the Danish Financial Statements
Act. This can be viewed or downloaded at:
→ Corporate Governance 2023
Financial statementsPerformanceIn brief
Corporate governance
Strategy
Annual Report 2023
Board of Directors
Brødrene A & O Johansen A/S’ Board of Directors comprises a
total of eight members who have been elected to protect the
interests of the shareholders as best as possible and to ensure
an appropriate and balanced development of the company both
in the short and the long term.
The Board of Directors oversees the overall and stra-
tegic management of the company.
· Five members are elected by the General Meeting.
The holders of Class B shares have the right to elect
one Board member whereas the holders of Class
A shares elect the remaining Board members. The
election of Board members representing each indi-
vidual share class is determined by a simple majority
of votes. The Board members resign every year, but
re-elections may take place.
· In Denmark, the Company’s employees elect three
Board members according to the current provisions
of the Danish Companies Act. Staff-elected Board
members are elected for a term of four years. In
addition, the Company’s employees also elect an
equivalent number of alternates who are elected for a
similar term.
Staff-elected Board members have good knowledge of
the Company’s activities and contribute in a construc-
tive way to the decisions of the Board, and they have
the same rights, duties, and responsibilities as Board
members elected by the General Meeting.
The Board of Directors holds meetings 6-7 times a year.
Audit Committee
The purpose of the Audit Committee's work is to make
an independent assessment of whether the Company's
financial reporting, internal control, risk management
and statutory audit are appropriate in relation to the
Company's and the Group's size and complexity.
The Audit Committee has the following tasks:
· to monitor and report on the financial reporting
process,
· to monitor the efficiency of the Company's internal
control, internal audit, if any, and risk management
systems,
· to monitor the statutory audit of the financial state-
ments,
· to monitor and review the independence of the
auditor, including reviewing and approving the
nature and extent of the external auditor's non-audit
services,
· to recommend the appointment of auditors,
Meetings
The Audit Committee consists of four members who are
appointed from and among the Board of Directors. The
Audit Committee hold meetings 4-5 times a year.
Nomination Committee
The Board of Directors has set up a Nomination
Committee consisting of two members responsible for
performing the following preparatory tasks:
· describing the required qualifications for a given
member of the Board of Directors and the Execu-
tive Management, the estimated time required for
performing the duties of this member of the Board
of Directors and the competencies, knowledge and
experience that are or should be represented in the
two management bodies,
· on an annual basis evaluating the Board of Directors
and the Executive Management’s structure, size,
composition, and results and preparing recommen-
dations for the Board of Directors for any changes,
· in cooperation with the chairperson handling the
annual evaluation of the Board of Directors and
assessing the individual management members’
competencies, knowledge, experience, and succes-
sion as well as reporting on it to the board of direc-
tors,
· handling the recruitment of new members to the
Board of Directors and the Executive Management
and nominating candidates for the Board of Directors'
approval,
· ensuring that a succession plan for the Executive
Management is in place,
· supervising Executive Managements’ policy for the
engagement of executive employees, and
· supervising the preparation of a diversity policy for
the Board of Directors’ approval.
Financial statementsPerformanceIn brief
Corporate governance
Strategy
Annual Report 2023
Remuneration committee
The Remuneration Committee is made up of two
members who are appointed from among the Board of
Directors. The committee is responsible for:
· preparing a draft remuneration policy for the Board
of Directors’ approval prior to the presentation at the
general meeting,
· providing a proposal to the Board of Directors on
the remuneration of the members of the executive
management,
· providing a proposal to the Board of Directors on the
remuneration of the Board of Directors prior to the
presentation at the General Meeting,
· ensuring that the management’s actual remuneration
complies with the Company’s remuneration policy
and the evaluation of the individual member’s perfor-
mance, and
· assisting in the preparation of the annual remunera-
tion report for the Board of Directors’ approval prior
to the presentation for the General Meeting's advi-
sory vote.
Board member Board Meetings
Audit
Committee
Remuneration
Comittee
Nomination
Comittee
Henning Dyremose
Erik Holm
Peter Gath
Niels A. Johansen
Ann Fogelgren
René Alberg
Leif Hummel
Marlene L. Jakobsen
Michael Kjær
Meeting participation in 2023, % 97.4% 100% 100% 100%
Participation in Board meetings in 2023
Board evaluation procedure
The Board of Directors performs an annual evaluation
based on a survey regarding the following:
· Board composition and management
· Strategy, priorities and financial targets
· Meeting effectiveness
· Effectiveness of the Chair
· Effectiveness of the Board
· Financial reporting, business follow-up and compli-
ance
The conclusion of the evaluation is that the Board of
Directors and the Executive Board possess the compe-
tencies and qualifications deemed sufficient and neces-
sary to run AO in both the short and long term.
Proposals for the Annual General Meeting
The Annual General Meeting will be held completely
electronically at 2 p.m. on March 20 2024.
1. Allocation of profits
The net profit for the year amounts to TDKK 206,096.
The Board of Directors proposes to distribute a dividend
of DKK 3.75 per DKK 1 share, corresponding to around
50% of the profit after tax for the year and 375% of the
share capital.
2. Approval of remuneration policy
The Board of Directors proposes that the Annual
General Meeting approves the amended remuneration
policy adopted by the Board of Directors. The full text
of the revised remuneration policy is attached to the
notice to attend the Annual General Meeting.
3. Authorisation to acquire own shares
The Board of Directors proposes that it be authorised
by the General Meeting during the period until 1 May
2025 to let the Company acquire own shares equiva-
lent to a total of 10% of the Company’s share capital
at the time of being granted authorisation, provided
that the Company’s total holding of own shares at no
point exceeds 10% of the Company’s share capital. The
consideration must not deviate by more than 10% from
the official price quoted at Nasdaq Copenhagen at the
time of acquisition.
4. Authorisation of the Chair
The Board of Directors proposes that the Chair of the
Annual General Meeting (with the right of substitution)
be authorised to register the resolutions passed by
the Annual General Meeting with the Danish Business
Authority and to make such alterations as the Danish
Business Authority may require for registration or
approval.
Financial statementsPerformanceIn brief
Corporate governance
Strategy
Annual Report 2023
Members of the Board of Directors
Henning
Baunbæk Dyremose
Erik
Holm
Chair
Born: 1945
Joined: 1997, Char since 2007
Nationality: Danish
Chair of the Audit Committee
Elected by Class A shareholders
As Henning Dyremose has been a member of the Board of Directors for more than 12 years, he cannot,
according to the ‘Danish Recommendations on Corporate Governance’, be characterised as being inde-
pendent of special interests.
Deputy Chair
Born: 1960
Joined: 2009
Nationality: Danish
Member of the Audit Committee
Elected by Class A shareholders
As Erik Holm has been a member of the Board of Directors for more than 12 years, he cannot, according
to the ‘Danish Recommendations on Corporate Governance’, be characterised as being independent of
special interests.
Qualifications
Broad leadership experience in business, finance and politics.
Experience as managing director of a wholesale company with the same customers as Brødrene A & O
Johansen A/S.
Former Minister of Finance.
Qualifications
Experience as managing director of a wholesale company with the same customers as Brødrene A & O
Johansen A/S.
Broad leadership experience in sales, finance, and logistics, both in Denmark and internationally.
Experience of Board work in other listed companies.
Managerial Posts
Chair of the Board of AO Invest A/S.
CEO of Henning Dyremose ApS, HD Invest, Virum ApS, HCE Invest, Virum ApS, CD Invest, Virum ApS and
Elly Dyremose ApS.
Managerial Posts
Chair of the Boards of CR EL & TEKNIK A/S, Norr11 Holding ApS, Norr11 International ApS, Hotel Kold-
ingfjord A/S and ScanCom International A/S.
Deputy Chairman of the Boards of SP Group A/S, Arvid Nilssons Fond and AO Invest A/S.
Member of the Boards of Miluda Invest ApS, Dragsholm Slot P/S and Hotelselskabet af 8. februar 2018
K/S.
CEO of Erik Holm Holding ApS and JU-CH Holding Aps
Share ownership
59,770 (59,770) Class B shares
Share ownership
0 (0) Class B shares
Financial statementsPerformanceIn brief
Corporate governance
Strategy
Annual Report 2023
Ann
Fogelgren
Peter
Gath
Niels
A. Johansen
Member
Born: 1974
Joined: 2023
Nationality: Swedish
Member of the Audit Committee
Elected by Class A shareholders
According to the ‘Danish Recommendations on Corporate Governance’ Ann Fogel-
gren is considered to be independent of special interests.
Member
Born: 1965
Joined: 2023
Nationality: Danish
Deputy Chair of the Audit Committee
Elected by Class B shareholders
According to the ‘Danish Recommendations on Corporate Governance’ Peter Gath
is considered to be independent of special interests.
Member
Born: 1939
Joined: 1979
Nationality: Danish
Elected by Class A shareholders
As Niels A. Johansen has been a member of the Board of Directors for more than
12 years, he cannot, according to the ‘Danish Recommendations on Corporate
Governance’, be characterised as being independent of special interests.
Qualifications
PhD in Information Systems from Copenhagen Business School in 2005
Chief Information Officer of GN Store Nord A/S.
Former CIO posts at a number of large Danish companies
Former CDO
Qualifications
State-authorised public accountant in 1996
Cand.jur. (Master of Law) in 1991
Former long term audit partner at KPMG and EY and former Chair of FSR (the
Danish Association of Chartered Accountants).
Former external auditor for Brødrene A & O Johansen A/S
Qualifications
Long-time managerial experience as CEO.
In-depth knowledge of the wholesale industry of installation materials in
Denmark and the rest of Europe.
Managerial Posts
Member of the Board of AO Invest A/S
Managerial Posts
Chair of the Board of FSRs Studie- & Understøttelsesfond and Fonden Johannes
Hages Hus.
Member of the Board of AO Invest A/S, Milde-Fonden, Lyn Mildé A/S and Konsol-
idator A/S.
CFO of St. Jørgen Holding ApS and CEO of Strategia Finans ApS.
Managerial Posts
Chair of the Board of Directors of Avenir Invest ApS.
Niels A. Johansen is the CEO and member of the Board of Directors of a consol-
idated company and the Chair of the Board of Directors of three consolidated
companies
Share ownership
28,270 (28,270) Class A shares and 2,810,400 (2,810,400) Class B sharesShare ownership
7,000 (0) Class B shares
Share ownership
0 (0) Class B shares
Members of the Board of Directors
Financial statementsPerformanceIn brief
Corporate governance
Strategy
Annual Report 2023
René
Alberg
Leif
Hummel
Marlene
L. Jakobsen
Employee-elected member
Elected in 2022, term expires in 2026
Born: 1971
Joined: 2006
Nationality: Danish
Product Manager
Employee-elected member
Elected in 2022, term expires in 2026
Born: 1963
Joined: 2022
Nationality: Danish
Warehouse Operations Manager.
Employee-elected member
Elected in 2022, term expires in 2026
Born: 1983
Joined 2022
Nationality: Danish
Store Manager
Share ownership
500 (500) Class B shares
Share ownership
5,200 (4,200) Class B shares
Share ownership
294 (124) Class B shares
Members of the Board of Directors
Financial statementsPerformanceIn brief
Corporate governance
Strategy
Annual Report 2023
Executive Board
Niels
A. Johansen
Per
Toelstang
Stefan
Funch Jensen
Lili
Johansen
CEO
Born: 1939
Chair of the Board of Directors of
Avenir Invest ApS.
Niels A. Johansen is the CEO and member of the Board of
Directors of a consolidated company and the Chair of the
Board of Directors of three consolidated companies
Holds 28,270 (28,270) Class A shares and 2,810,400
(2,810,400) Class B shares either directly or indirectly
CFO, Deputy CEO
Born: 1966
CEO of
MP Toelstang Holding ApS, Toelstang Invest ApS,
Ridersclub ApS
Chair of the Board of Directors of
Høvegaard ApS
Member of the Board of Directors of
Kohberg Bakery Group A/S
Holds 20,000 (20,000) Class B shares either directly or
indirectly
CTO
Born: 1974
Holds 0 (0) Class B shares either directly
or indirectly
CHRO
Born: 1957
Member of the Board of Directors of
Avenir Invest ApS.
Holds 28,110 (28,110) Class A shares and 360,000
(360,000) Class B shares either directly or indirectly
AO Management Team
Jeanette Roed Berthelsen
Sales Director, HVAC & Projects
David Carlbom
Commercial Director, AO Sweden
Lars Kestner
Sales Director, Electricals
Ian Schlottmann
Procurement Director
Sebastian Sigvaldason
Logistics Director
Financial statementsPerformanceIn brief
Corporate governance
Strategy
Annual Report 2023
Shareholder information
Dividend
The Board of Directors proposes that a dividend of DKK
3.75 per DKK 1 share be distributed for 2023 corre-
sponding to a payout ratio of 50.9%. The proposal is in
line with the capital allocation policy which stipulates a
payout ratio of 33% - 50%.
Shareholders, capital, and voting rights
AO has two classes of shares. Class A shares cannot be
negotiated without the approval of the Board, whereas
Class B shares are freely negotiable. In addition, the B
share class carries special rights in the form of payment
of cumulative dividends.
The Company’s nominal share capital is TDKK 28,000.
Of which TDKK 5,640 are Class A shares and TDKK
22,360 are Class B shares. Each class A share of DKK
100 carries 1,000 votes, whereas each Class B share
of DKK 1 carries 1 vote. In addition to the difference in
the number of votes, the two share classes differ in the
following respects:
The Class A shares are non-negotiable instruments,
whereas the Class B shares are listed on Nasdaq Copen-
hagen under ID code DK0061686714.
The holders of Class B shares have a preferential cumu-
lative dividend right of 6%. This means that no dividend
will be paid for Class A shares until the Class B shares
have achieved a cumulative dividend of 6%.
In the event of liquidation, Class B shares take prece-
dence over Class A shares.
Changes to the Company’s Articles of Association
require that two thirds of cast votes and two thirds
of the represented capital at a general meeting are in
favour of the change.
The Company’s Board of Directors consists of eight
members who do not have to be shareholders. Five
members are elected by the Annual General Meeting,
and three members are elected by the staff. Holders
of Class B shares are entitled to appoint and elect one
Board member, while holders of Class A shares elect the
remaining Board members.
A share B share
Shares 56,400 22,360,000
Nominal value per share (DKK) 100 1
Nominal value (DKK) 5,640,000 22,360,000
Votes per share 1,000 1
Treasury shares 823,900
Stock Exchange Nasdaq Copenhagen
Ticker: AOJ B
ISIN: DK0061686714
Share price year-end (DKK) 70,3
Market Cap year-end (MDKK) 396,492,000 1,571,908,000
AO shares
Dividend payments
TDKK 2023 2022 2021 2020 2019
Dividend 105,000 147,000 126,000 42,000 16,800
Payout ratio 51% 50% 50% 24% 13%
Financial statementsPerformanceIn brief
Corporate governance
Strategy
Annual Report 2023
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
Jan
DKK Shares
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
40
50
60
70
80
90
100
By making factual, relevant, and reliable information
available to shareholders and other stakeholders, the
management of Brødrene A & O Johansen A/S aims
at giving the share market the best possible basis for
pricing the Company’s shares fairly.
Brødrene A & O Johansen A/S’s Investor Relations
activities are designed to ensure that the disclosure of
information is in accordance with the current disclosure
requirements established by Nasdaq Copenhagen A/S.
Brødrene A & O Johansen A/S’s financial communication
with stakeholders takes place mainly through company
announcements, quarterly webcasts, and investor
meetings.
Brødrene A & O Johansen A/S does not comment on
any information relating to financial results or expec-
tations in the period between the end of an accounting
period and the date on which results are published.
The Company’s management will refrain from holding
investor meetings and the like in this period. The
Company will also be reluctant to arrange meetings
in periods where it is dealing with matters that could
result in decisions that are to be announced to the
public.
Investor relations policy
Financial calendar
21/2 2024 Annual Report
20/3 2024 Annual General Meeting
24/4 2024 Quarterly Report Q1 2024
14/8 2024 Quarterly Report Q2 2024
23/10 2024 Quarterly Report Q3 2024
Analysts
The AO share is covered by the following
financial institutions:
· SEB (initiated coverage in 2023)
Investor contacts
CEO Niels A. Johansen
CFO, Deputy CEO Per Toelstang
Head of IR Nicolaj Harmundal Petersen
IR@AO.dk
Number
of Class A
shares
(DKK 100)
Number
of Class B
shares
(DKK 1)
Number of
shares –
nominal value Capital, % Votes, %
Avenir Invest ApS 56,220 208,000 5,830,000 20.82% 71.65%
Niels A. Johansen 160 2,706,400 2,722,400 9.72% 3.64%
Other registered
shares 20 16,145,164 16,147,164 57.67 % 20.52%
Unregistered shares 0 2,476,536 2,476,536 8.84% 3.14%
Total, excluding
treasury shares 56,400 21,536,100 27,176,100 97.0 6% 98.95%
Treasury shares 0 823,900 823,900 2.94% 1.05%
Total 56,400 22,360,000 28,000,000 100.00% 100.00%
Total volume Closing price
AO share price 2023
Financial statementsPerformanceIn brief
Corporate governance
Strategy
Annual Report 2023
Financial
statements
46 Consolidated financial statements
96 Parent company financial statements
126 Statements
Investing in the network of outlets
continues to a priority for AO. We
want to be the wholesaler that
provides the best service to our
customers with the best range of
sales channels.
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Parent company financial statements
Primary statements
Income statement
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
1 Basis of preparation
1.1 Accounting policies
1.2 Significant estimated uncertainties and
assumptions
2 Income statement
2.1 Segment information
2.2 Cost of sales
2.3 Other operating income
2.4 External expenses
2.5 Staff costs
2.6 Depreciation and amortisation
2.7 Tax on profit or loss for the year
3 Invested Capital
3.1 Intangible assets
3.2 Property, plant and equipment
3.3 Right-of-use assets and lease liabilities
3.4 Inventories
3.5 Trade receivables
3.6 Earnings per share
3.7 Corporation tax receivable/payable
3.8 Deferred tax
3.9 Other payables
4 Capital Structure and financing
4.1 Equity
4.2 Financing activities
4.3 Financial risks
4.4 Financial income
4.5 Financial expenses
5 Other notes
5.1 Acquisition of enterprise
5.2 Contingent liabilities, security, etc.
5.3 Share based remuneration
5.4 Related parties
5.5 Subsequent events
5.6 New accounting regulation
Consolidated financial statements
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Parent company financial statements
Income statement
For 1 January – 31 December
DKK thousands Note 2023 2022
Revenue 2.1 5,261,016 5,375,006
Cost of sales 2.2 (4,028,780 ) (4,068,255 )
Gross profit 1,232,236 1,306,751
Other operating income 2.3 2,029 3,573
Gross margin 1,234,265 1,310,324
External expenses 2.4 (310,666 ) (318,517 )
Staff costs 2.5 (518,315 ) (500,240 )
Earnings before interest, taxes, depreciation
and amortisation (EBITDA) 405,284 491,567
Depreciation and amortisation 2.6 (113,079 ) (108,014 )
Operating profit or loss (EBIT) 292,205 383,553
Financial income 4.4 3,338 3,033
Financial expenses 4.5 (33,739 ) (9,158 )
Profit or loss before tax (EBT) 261,804 377,428
Tax on profit or loss for the year 2.7 (55,708 ) (82,959 )
Net profit or loss for the year 206,096 294,469
Earnings per share 3.6
Earnings per share (EPS) 7.6 10.8
Diluted earnings per share (EPS-D) 7.6 10.8
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Parent company financial statements
Statement of comprehensive income
For 1 January – 31 December
DKK thousands Note 2023 2022
Other comprehensive income
Net profit or loss for the year 206,096 294,469
Items which will be reclassified to the income statement
Foreign currency translation adjustment relating
to foreign entities 987 (6,156 )
Tax on other comprehensive income 0 0
Other comprehensive income after tax 987 (6,156 )
Total comprehensive income 207,083 288,313
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Parent company financial statements
Balance sheet as at 31 December
Assets
DKK thousands Note 2023 2022
Non-current assets
Intangible assets 3.1
Goodwill 508,539 499,685
Intellectual property rights 44,611 48,153
Software 82,913 64,188
Property, plant and equipment 3.2
Land and buildings 832,268 795,870
Leasehold improvements 15,530 13,609
Fixtures and operating equipment 221,966 224,782
Right-of-use assets 3.3 99,838 80,740
Other non-current assets
Other investments 247 284
Total non-current assets 1,805,912 1,727,311
DKK thousands Note 2023 2022
Current assets
Inventories 2.2, 3.4 757,411 865,953
Trade receivables 3.5 542,788 636,439
Joint tax contribution 0 15,931
Other receivables 20,573 16,199
Prepayments and accrued income 26,174 21,514
Cash and short-term deposits 89,504 34,973
Total current assets 1,436,450 1,591,009
Total assets 3,242,362 3,318,320
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Parent company financial statements
Balance sheet as at 31 December
Equity and liabilities
DKK thousands Note 2023 2022
Equity 4.1
Share capital 28,000 28,000
Reserve for foreign currency translation adjustments (7,657 ) (8,644 )
Retained earnings 1,349,956 1,241,142
Proposed dividend for the financial year 105,000 147,000
Total equity 1,475,299 1,407,498
Non-current liabilities
Deferred tax 3.8 70,098 64,612
Credit institutions 4.2 398,705 418,011
Lease liabilities 3.3, 4.2 66,352 56,836
Total non-current liabilities 535,155 539,459
DKK thousands Note 2023 2022
Current liabilities
Credit institutions 4.2 109,343 73,689
Lease liabilities 3.3, 4.2 36,844 28,973
Trade payables 4.2, 4.3 1,006,632 1,181,319
Joint tax contribution 8,357 0
Corporation tax payable 3.7 3,062 3,501
Provisions for liabilities 3.9 500 6,740
Other payables 3.9 67,170 77,141
Total current liabilities 1,231,908 1,371,363
Total liabilities 1,767,063 1,910,822
Total equity and liabilities 3,242,362 3,318,320
Segment information 2.1
Contingent liabilities, security, etc. 5.2
Notes without reference 5.3-5.6
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Parent company financial statements
Cash flow statement
DKK thousands Note 2023 2022
Cash flow from operating activities
Operating profit or loss (EBIT) 292,205 383,553
Depreciation and amortisation 2.6 113,079 108,014
Other non-cash operating items, net 3,393 1,543
Cash flow from operations before change in working capital 408,677 493,110
Change in inventories 99,688 (219,340 )
Change in receivables 84,617 (107,160 )
Change in trade payables and other current payables (191,014 ) 145,278
Change in working capital (6,709 ) (181,222 )
Cash flow from operations 401,968 311,888
Net financials paid (30,401 ) (6,125 )
Corporation tax paid (25,151 ) (89,970 )
Cash flow from operating activities 346,416 215,793
DKK thousands Note 2023 2022
Cash flow from investing activities
Purchase of intangible assets (33,934 ) (41,010 )
Purchase of property, plant and equipment (94,819 ) (164,530 )
Sale of other non-current assets 37 0
Acquisition of enterprise 5.1 (1,500 ) (127,763 )
Cash flow from investing activities (130,216 ) 333,303
Cash flow from financing activities
Repayment of debt to credit institutions (76,357 ) (85,975 )
Raising of loans from credit institutions 92,705 247,973
Repayment of lease liabilities (35,342 ) (24,169 )
Dividends paid (142,675 ) (122,292 )
Cash flow from financing activities (161,669 ) 15,537
Cashflow for the year 54,531 (101,973 )
Cash and short-term deposits at beginning of year 34,973 136,946
Cash and short-term deposits at end of year 89,504 34,973
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Parent company financial statements
Consolidated statement of changes in equity
DKK thousands
Share
capital
Foreign
currency
translation
adjustment
Proposed
dividend for
the year
Retained
earnings Total equity
Equity at 1 January 2023 28,000 (8,644 ) 147,000 1,241,142 1,407,498
Net profit for the year 0 0 105,000 101,096 206,096
Foreign currency translation adjustment 0 987 0 0 987
Total comprehensive income 0 987 105,000 101,096 207,083
Dividend distribution 0 0 (142,675 ) 0 (142,675 )
Dividend, treasury shares 0 0 (4,325 ) 4,325 0
Sharebased remuneration 0 0 0 3,393 3,393
Total transactions with owners 0 0 (147,000 ) 7,718 (139,282 )
Equity at 31 December 2023 28,000 (7,657 ) 105,000 1,349,956 1,475,299
Equity at 1 January 2022 28,000 (2,488 ) 126,000 1,088,422 1,239,934
Net profit for the year 0 0 147,000 147,469 294,469
Foreign currency translation adjustment 0 (6,156 ) 0 0 (6,156 )
Total comprehensive income 0 (6,156 ) 147,000 147,469 288,313
Dividend distribution 0 0 (122,292 ) 0 (122,292 )
Dividend, treasury shares 0 0 (3,708 ) 3,708 0
Sharebased remuneration 0 0 0 1,543 1,543
Total transactions with owners 0 0 (126,000 ) 5,251 (120,749 )
Equity at 31 December 2022 28,000 (8,644 ) 147,000 1,241,142 1,407,498
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Basis of preparation
Section 1
1.1 Accounting policies
1.2 Significant estimated uncertainties and assumptions
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 1
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 1
1.1 Accounting policies (continued)
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 1
1.1 Accounting policies (continued)
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 1
1.1 Accounting policies (continued)
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Income statement
Section 2
2.1 Segment information
2.2 Cost of sales
2.3 Other operating income
2.4 External expenses
2.5 Staff costs
2.6 Depreciation and amortisation
2.7 Tax on profit or loss for the year
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 2
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 2
2.1 Segment information (continued)
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 2
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 2
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 2
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 2
2.7 Tax on profit or loss for the year (continued)
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Invested capital
3.1 Intangible assets
3.2 Property, plant and equipment
3.3 Right-of-use assets and lease liabilities
3.4 Inventories
3.5 Trade receivables
3.6 Earnings per share
3.7 Corporation tax receivable/payable
3.8 Deferred tax
3.9 Other payables
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 3
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 3Section 3
3.1 Intangible assets (continued)
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 3Section 3
3.1 Intangible assets (continued)
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 3
3.1 Intangible assets (continued)
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 3Section 3
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 3Section 3
3.2 Property, plant and equipment (continued)
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 3Section 3
3.2 Property, plant and equipment (continued)
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 3Section 3
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 3Section 3
3.3 Right-of-use assets and lease liabilities (continued)
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 3
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 3
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 3
3.5 Trade receivables (continued)
Key accounting judgments and estimates
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 3
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 3
3.8 Deferred tax (continued) 3.9 Other payables
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Capital structure
and financing
Section 4
4.1 Equity
4.2 Financing activities
4.3 Financial risks
4.4 Financial income
4.5 Financial expenses
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 4
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 4
4.1 Equity (continued)
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 4
4.2 Financing activities (continued)
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 4
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 4
4.3 Financial risks (continued)
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 4
4.3 Financial risks (continued)
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 4
4.3 Financial risks (continued)
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 4
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Other notes
Section 5
5.1 Acquisition of enterprise
5.2 Contingent liabilities, security, etc.
5.3 Share based remuneration
5.4 Related parties
5.5 Subsequent events
5.6 New accounting regulation
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 5
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 5
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 5
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Parent company financial statements
Section 5
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Primary statements
Income statement
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
1 Basis of preparation
1.1 Accounting policies
1.2 Significant estimated uncertainties and
assumptions
2 Income statement
2.1 Cost of sales
2.2 Other operating income
2.3 External expenses
2.4 Staff costs
2.5 Depreciation and amortisation
2.6 Tax on profit or loss for the year
3 Invested Capital
3.1 Intangible assets
3.2 Property, plant and equipment
3.3 Right-of-use assets and lease liabilities
3.4 Investments in subsidiaries
3.5 Inventories
3.6 Trade receivables
3.7 Deferred tax
3.8 Other payables
4 Capital Structure and financing
4.1 Equity
4.2 Financing activities
4.3 Financial risks
4.4 Financial income
4.5 Financial expenses
5 Other notes
5.1 Contingent liabilities, security, etc.
5.2 Related parties
5.3 Subsequent events
Parent company financial statements
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Income statement
For 1 January – 31 December
DKK thousands Note 2023 2022
Revenue 4,993,407 5,093,723
Cost of sales 2.1 (3,838,845) (3,868,876)
Gross profit 1,154,562 1,224,847
Other operating income 2.2 1,520 2,201
Gross margin 1,156,082 1,227,0 4 8
External expenses 2.3 (291,076) (310,082)
Staff costs 2.4 (495,051) (476,601)
Earnings before interest, taxes, depreciation
and amortisation (EBITDA) 369,955 440,365
Depreciation and amortisation 2.5 (144,717) (120,472)
Operating profit or loss (EBIT) 225,238 319,893
Subsidiaries' profit after tax 3.4 46,353 47,221
Financial income 4.4 3,686 3,360
Financial expenses 4.5 (26,044) (7,260)
Profit or loss before tax (EBT) 249,233 363,214
Tax on profit or loss for the year 2.6 (43,137) (68,745)
Net profit or loss for the year 206,096 294,469
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Statement of comprehensive income
For 1 January – 31 December
DKK thousands Note 2023 2022
Other comprehensive income
Net profit or loss for the year 206,096 294,469
Items which will be reclassified to the income statement
Foreign currency translation adjustment relating
to foreign entities 987 (6,156)
Tax on other comprehensive income 0 0
Other comprehensive income after tax 987 (6,156)
Total comprehensive income 207,0 83 288,313
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Balance sheet as at 31 December
Assets
DKK thousands Note 2023 2022
Non-current assets
Intangible assets 3.1
Goodwill 464,822 455,968
Intellectual property rights 44,195 47,6 83
Software 82,913 64,188
591,930 567,839
Property, plant and equipment 3.2
Land and buildings 138,869 142,219
Leasehold improvements 16,500 14,544
Fixtures and operating equipment 219,767 223,662
Right-of-use assets 3.3 195,974 205,272
571,110 585,697
Other non-current assets
Investments in subsidiaries 3.4 349,421 336,872
Other investments 247 284
349,668 337,156
Total non-current assets 1,512,708 1,490,692
DKK thousands Note 2023 2022
Current assets
Inventories 2.1, 3.5 723,896 834,240
Trade receivables 3.6 517,196 613,305
Receivables from subsidiaries 3.6 139,863 63,179
Joint tax contribution 0 18,645
Other receivables 16,151 12,763
Prepayments and accrued income 22,886 18,020
Cash and short-term deposits 46,810 291
Total current assets 1,466,802 1,560,443
Total assets 2,979,510 3,051,135
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Balance sheet as at 31 December
Equity and liabilities
DKK thousands Note 2023 2022
Equity 4.1
Share capital 28,000 28,000
Reserve according to the equity method 221,846 209,298
Reserve for development costs 62,875 41,242
Reserve for foreign currency translation adjustments 0 0
Retained earnings 1,057,578 981,958
Proposed dividend for the financial year 105,000 147,000
Total equity 1,475,299 1,407,498
Non-current liabilities
Deferred tax 3.7 32,371 29,063
Credit institutions 4.2 84,418 87,4 89
Lease liabilities 3.3, 4.2 119,054 135,961
Other non-current liabilities 0 0
Total non-current liabilities 235,843 252,513
DKK thousands Note 2023 2022
Current liabilities
Credit institutions 4.2 95,199 61,078
Lease liabilities 3.3, 4.2 80,202 74,353
Trade payables 4.2 976,874 1,154,025
Amounts owed to subsidiaries 53,066 28,032
Joint tax contribution 3,658 0
Corporation tax payable 0 0
Provisions for liabilities 500 6,740
Other payables 3.8 58,869 66,896
Total current liabilities 1,268,368 1,391,124
Total liabilities 1,504,211 1,643,637
Total equity and liabilities 2,979,510 3,051,135
Contingent liabilities, security, etc. 5.1
Notes without reference 5.2 - 5.3
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Cash flow statement
DKK thousands Note 2023 2022
Cash flow from operating activities
Operating profit or loss (EBIT) 225,238 319,893
Depreciation and amortisation 2.5 144,717 120,472
Other non-cash operating items, net 3,393 1,543
Cash flow from operations before change in working capital 373,348 441,908
Change in inventories 101,490 (215,913)
Change in receivables 87,855 (80,319)
Change in trade payables and other current payables (191,426) 142,892
Change in working capital (2,081) (153,340)
Cash flow from operations 371,267 288,568
Net financials paid (22,358) (3,900)
Corporation tax paid (17,527 ) (83,403)
Cash flow from operating activities 331,382 201,265
DKK thousands Note 2023 2022
Cash flow from investing activities
Purchase of intangible assets (33,934) (41,010)
Purchase of property, plant and equipment (40,085) (53,395)
Change in receivables from subsidiaries (51,650) 42,920
Dividends received 34,792 35,250
Sale of other non-current assets 37 0
Acquisition of enterprise (1,500) (127,163)
Sale of enterprise 0 0
Cash flow from investing activities (92,340) (143,398)
Cash flow from financing activities
Repayment of debt to credit institutions (61,655) (39,860)
Raising of loans from credit institutions 92,705 45,000
Repayment of lease liabilities (80,897) (51,090)
Dividends paid (142,675) (122,292)
Cash flow from financing activities (192,522) (168,242)
Cashflow for the year 46,520 (110,375)
Cash and short-term deposits at beginning of year 291 110,666
Cash and short-term deposits at end of year 46,810 291
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
DKK thousands
Share
capital
Equity
method
Reserve for
development
costs
Proposed
dividend for
the year
Retained
earnings Total equity
Equity at 1 January 2023 28,000 209,298 41,242 147,000 981,958 1,407,498
Net profit for the year 0 46,353 0 105,000 54,743 206,096
Movement for the year 0 0 21,633 0 (21,633) 0
Foreign currency translation adjustment 0 987 0 0 0 987
Total comprehensive income 0 47,3 40 21,633 105,000 33,110 207,0 83
Dividend distribution 0 0 0 (142,675) 0 (142,675)
Dividend treasury shares 0 0 0 (4,325) 4,325 0
Dividend received 0 (34,792) 0 0 34,792 0
Sharebased remuneration 0 0 0 0 3,393 3,393
Total transactions with owners 0 (34,792) 0 (147,000) 42,510 (139,282)
Equity at 31 December 2023 28,000 221,846 62,875 105,000 1,057,578 1,475,299
Equity at 1 January 2022 28,000 203,483 28,956 126,000 853,495 1,239,934
Net profit for the year 0 47,221 0 147,000 100,248 294,469
Movement for the year 0 0 12,286 0 (12,286) 0
Foreign currency translation adjustment 0 (6,156) 0 0 0 (6,156)
Total comprehensive income 0 41,065 12,286 147,000 87,9 62 288,313
Dividend distribution 0 0 0 (122,292) 0 (122,292)
Dividend treasury shares 0 0 0 (3,708) 3,708 0
Dividend received 0 (35,250) 0 0 35,250 0
Sharebased remuneration 0 0 0 0 1,543 1,543
Total transactions with owners 0 (35,250) 0 (126,000) 40,501 (120,749)
Equity at 31 December 2022 28,000 209,298 41,242 147,000 981,958 1,407,498
Company statement of changes in equity
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Basis of preparation
Section 1
1.1 Accounting policies
1.2 Significant estimated uncertainties and assumptions
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Section 1
1.1 Accounting policies
The financial statements of the parent company Brødrene
A & O Johansen A/S for 2023 are presented in accordance
with International Financial Reporting Standards (IFRS) as
adopted by the EU and additional disclosure requirements
in the Danish Financial Statements Act.
The accounting policies of the parent company remain
unchanged from last year. Significant accounting policies
are identical to those applied by the AO Group except for
those mentioned below. A general description of accounting
policies can be found in note 1.1 of the consolidated finan-
cial statements.
Result of investments in subsidiaries
In the parent company’s income statement, the propor-
tionate share of the individual subsidiaries’ profit/(loss)
after tax is recognised after the full elimination of internal
gains/losses.
Investments in subsidiaries in the parent
company’s financial statements
Investments in subsidiaries are measured according to the
equity method.
Investments in subsidiaries are measured at the propor-
tionate share of the companies’ net worth calculated
according to the Group’s accounting policies with the
addition or deduction of unrealised intra-group profits
and losses, and the addition or deduction of the remaining
value of positive or negative goodwill calculated according
to the acquisition method.
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Section 1
1.2 Significant estimated uncertainties
and assumptions
When calculating the carrying amount of certain assets and
liabilities, estimates are made of how future events affect
the value of these assets and liabilities at the balance sheet
date.
The estimates and assumptions may have a significant
effect on the financial reporting and can be categorised as
significant accounting judgements or significant accounting
estimates and assumptions.
The estimates made are based on historical experience and
other factors that the management considers reasonable
in the circumstances, but which are inherently uncertain
and unpredictable. The assumptions may be incomplete or
inaccurate, and unexpected events or circumstances may
arise. Furthermore, the company is subject to risks and
uncertainties that may cause actual results to differ from
those estimates.
It may be necessary to change previous estimates due to
changes in the circumstances underlying them or due to
new knowledge or subsequent events.
Significant accounting judgements, estimates and
assumptions
Significant accounting estimates and judgements include
assumptions and estimates of the future and other uncer-
tainty, that could potentially affect the company within the
next 12 months. Estimates that are material to the financial
reporting are made, inter alia, by valuing the impairment
testing of goodwill, receivables, and inventories and by
calculating depreciation and impairment.
The following estimates and accompanying assessments
are deemed material for the preparation of the financial
statements:
· Impairment testing for goodwill and other intangible
assets
· Valuation of receivables
· Inventory valuation
These estimates and assessments are described in the
following notes:
Note 3.1 Intangible assets
Note 3.5 Inventories
Note 3.6 Trade receivables
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Income statement
Section 2
2.1 Cost of sales
2.2 Other operating income
2.3 External expenses
2.4 Staff costs
2.5 Depreciation and amortisation
2.6 Tax on profit or loss for the year
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Section 2
2.2 Other operating income
The item includes property rental income.
2.3 External expenses
DKK thousands 2023 2022
Remuneration for the auditor elected by the annual general meeting:
Total remuneration may be specified as follows:
Statutory audit (1,231) (1,304)
Tax and VAT related advisory services (30) (17)
Other services (410) (185)
(1,671) (1,506)
Other services primarily relate to concultancies regarding CSRD implementation and ESG strategies.
2.1 Cost of sales
DKK thousands 2023 2022
Cost of goods purchased during the year (3,502,625) (3,960,528)
Distribution costs (193,669) (194,024)
(3,696,294) (4,154,552)
Change in inventories:
Inventory at the beginning of the year 834,240 552,192
Change in cost during the year 9,899 11,609
Inventory writedown, net 22,308 (15,237)
Inventory at the end of the year 723,896 834,240
Change in inventory for the year (142,551) 285,676
Cost of sales for the year (3,838,845) (3,868,876)
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Section 2
The Group only has defined contribution plans.
The increase in full time employees for the Company primarily relates to the full year effect of the acqui-
sition of EA Værktøj which contributed with 110 FTEs from april 2022.
2.4 Staff costs
DKK thousands 2023 2022
Wages and salaries (400,684) (395,023)
Pension contributions (36,272) (28,789)
Share-based remuneration (3,393) (1,543)
Other social security costs (5,884) (5,519)
Other staff expenses (3,169) (3,105)
Staff costs excl. temporary employees (449,402) (433,979)
Wages temporary employees (45,649) (42,622)
Staff costs total (495,051) (476,601)
Wages and salaries include remuneration for:
Board of Directors (2,625) (2,508)
Board of Directors total (2,625) (2,508)
Executive Board (21,570) (27,224)
Share-based remuneration (1,402) (1,089)
Pension contributions (2,633) (2,639)
Benefits (787) (838)
Executive Board total (26,392) (31,790)
Board of Directors and Executive Board total (29,017) (34,298)
Average number of full-time employees incl. temporary employees 879 856
Average number of full-time employees 808 789
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Section 2
2.5 Depreciation and amortisation
DKK thousands 2023 2022
Intangible assets (18,676) (26,060)
Property, plant and equipment (45,374) (43,458)
Right-of-use assets, external (32,883) (23,766)
Right-of-use assets, subsidiaries (48,013) (27,323)
Gains/losses from the disposal of assets 229 135
(144,717) (120,472)
2.6 Tax on profit or loss for the year
DKK thousands 2023 2022
Current tax for the year (39,501) (61,980)
Adjustment related to previous years (328) (2)
Addition from acquisition 0 (74)
(39,829) (62,056)
Adjustment of deferred tax for the year (4,085) (7,0 87 )
Adjustment of deferred tax for previous years 777 398
Total (43,137) (68,745)
Tax on profit/loss for the year can be explained as follows:
Calculated tax on profit/loss before tax, not incl. subsidiaries' profits 44,634 69,519
Tax effect of:
Non-taxable income (886) (1,070)
Other non-deductible costs 273 618
Adjustment of tax for previous years (884) (322)
43,137 68,745
Effective tax rate 21.3% 21.8%
Taxes paid during the financial year (17,527 ) (83,403)
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Invested capital
Section 3
3.1 Intangible assets
3.2 Property, plant and equipment
3.3 Right-of-use assets and lease liabilities
3.4 Investments in subsidiaries
3.5 Inventories
3.6 Trade receivables
3.7 Deferred tax
3.8 Other payables
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Section 3
3.1 Intangible assets
DKK thousands Goodwill
Intellectual
property
rights Software
Cost at 1 January 2023 455,968 68,502 344,757
Foreign currency translation adjustment 0 0 0
Additions from acquisitions 0 0 0
Additions during the year 8,854 0 33,934
Disposals during the year 0 0 (48,279)
Cost at 31 December 2023 464,822 68,502 330,412
Amortisation and depreciation at 1 January 2023 0 (20,819) (280,569)
Foreign currency translation adjustment 0 0 0
Amortisation and depreciation for the year 0 (3,488) (15,188)
Disposals during the year 0 0 48,258
Amortisation and depreciation at 31 December 2023 0 (24,307) (247,499)
Carrying amount at 31 December 2023 464,822 44,195 82,913
DKK thousands Goodwill
Intellectual
property
rights Software
Cost at 1 January 2022 368,313 60,344 303,747
Foreign currency translation adjustment 0 0 0
Additions from acquisitions 87,655 8,158 0
Additions during the year 0 0 41,010
Disposals during the year 0 0 0
Cost at 31 December 2022 455,968 68,502 344,757
Amortisation and depreciation at 1 January 2022 0 (17,704) (257,625)
Foreign currency translation adjustment 0 0 0
Amortisation and depreciation for the year 0 (3,115) (22,944)
Disposals during the year 0 0 0
Amortisation and depreciation at 31 December 2022 0 (20,819) (280,569)
Carrying amount at 31 December 2022 455,968 47,683 64,188
Apart from goodwill, all intangible assets are considered to have definite useful lives. No significant
changes have been made in estimates relating to intangible assets. Intellectual property rights relate
to Billig VVS', Greenline's, LampeGuru's and EA Værktøj's trademarks, domain names, etc.
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Section 3
3.1 Intangible assets (continued)
Development costs
Development costs are included in "Software". The net value of capitalised development costs may be
illustrated as follows:
DKK thousands 2023 2022
Company Completed
Work in
progress Completed
Work in
progress
Cost at 1 January 133,870 22,279 118,651 461
Additions during the year 18,560 24,207 14,758 22,279
Transfer 9,731 (9,731) 461 (461)
Cost at 31 December 162,161 36,755 133,870 22,279
Amortisation and depreciation at 1 January (103,275) 0 (81,989) 0
Amortisation and depreciation for the year (15,033) 0 (21,286) 0
Amortisation and depreciation
at 31 December (118,308) 0 (103,275) 0
Carrying amount at 31 December 43,853 36,755 30,595 22,279
Accounting policy
Impairment testing for goodwill and other intangible assets
In the annual impairment tests of intangible assets, including goodwill and rights, estimates are made
of how the parts of the business (cash-generating units) to which goodwill and rights are attributed will
be able to generate sufficient positive net cash flows in the future to support the value of the goodwill
and rights.
Due to the nature of the business, expected cash flows must be estimated for many years to come,
leading to some uncertainty. This uncertainty is reflected by the chosen discount rate.
Impairment testing has been described in note 3.1 of the consolidated financial statements.
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Section 3
3.2 Property, plant and equipment
DKK thousands
Land and
buildings
Leasehold
improve-
ments
Fixtures and
operating
equipment
Cost at 1 January 2023 190,558 28,787 563,485
Foreign currency translation adjustment 0 0 0
Additions from acquisitions 0 0 0
Additions during the year 4,664 5,714 31,413
Disposals during the year 0 (311) (5,964)
Cost at 31 December 2023 195,222 34,190 588,934
Amortisation and depreciation at 1 January 2023 (48,339) (14,243) (339,823)
Foreign currency translation adjustment 0 0 0
Amortisation and depreciation for the year (8,014) (3,756) (33,604)
Disposals during the year 0 309 4,260
Amortisation and depreciation at 31 December 2023 (56,353) (17,690) (369,167)
Carrying amount at 31 December 2023 138,869 16,500 219,767
DKK thousands
Land and
buildings
Leasehold
improve-
ments
Fixtures and
operating
equipment
Cost at 1 January 2022 195,148 23,229 501,052
Foreign currency translation adjustment 0 0 0
Additions from acquisitions 0 2,018 8,119
Additions during the year 769 3,540 54,451
Disposals during the year (5,359) 0 (137)
Cost at 31 December 2022 190,558 28,787 563,485
Amortisation and depreciation at 1 January 2022 (44,540) (11,207) (303,299)
Foreign currency translation adjustment 0 0 0
Amortisation and depreciation for the year (3,799) (3,036) (36,596)
Disposals during the year 0 0 72
Amortisation and depreciation at 31 December 2022 (48,339) (14,243) (339,823)
Carrying amount at 31 December 2022 142,219 14,544 223,662
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Section 3
3.3 Right-of-use assets and lease liabilities
Right-of-use assets
Land and
buildings
Fixtures and
operating
equipment Total
Balance at 1 January 2023 190,693 14,579 205,272
Foreign currency translation adjustment 0 0 0
Additions during the year 39,239 41,643 80,882
Disposals during the year (6,660) (5,782) (12,442)
Remeasurement of lease liability 2,796 362 3,158
Amortisation and depreciation for the year (68,960) (11,936) (80,896)
Carrying amount at 31 December 2023 157,10 8 38,866 195,974
Right-of-use assets
Land and
buildings
Fixtures and
operating
equipment Total
Balance at 1 January 2022 157,031 15,931 172,962
Foreign currency translation adjustment 0 0 0
Additions during the year 77,757 6,897 84,654
Disposals during the year (3,026) (714) (3,740)
Remeasurement of lease liability 2,485 0 2,485
Amortisation and depreciation for the year (43,554) (7,535) (51,089)
Carrying amount at 31 December 2022 190,693 14,579 205,272
Lease liabilities 2023 2022
Maturity of lease liabilities
0-1 year 86,694 77,49 0
1-5 years 103,536 118,190
>5 years 30,537 19,499
Total un-discounted lease liabilities at 31 December 220,767 215,179
Short-term lease liabilities, less than 1 year 80,202 76,887
Long-term lease liabilities, more than 1 year 119,054 133,427
Lease liabilities recognised in the balance sheet 199,256 210,314
Amounts recognised in the income statement
Interest expenses on lease liabilities (2,809) (1,747)
Expenses related to low value leasing arrangements (232) (318)
Expenses related to short term leasing arrangements (1,563) (1,639)
Depreciation related to right-of-use assets (80,896) (51,089)
Total (85,500) (54,793)
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Section 3
3.4 Investments in subsidiaries
DKK thousands 2023 2022
Cost at 1 January 127,575 126,575
Additions during the year 0 39,745
Disposal due to merger 0 (38,745)
Cost at 31 December 127,575 127,575
Value adjustment at 1 January 209,297 203,483
Disposal due to merger 0 0
Dividends (34,792) (35,250)
Forign currency translation adjustments 987 (6,156)
Subsidiaries' results 46,353 47,221
Value adjustment at 31 December 221,846 209,297
Carrying amount at 31 December 349,421 336,872
2023 2022
Name Registered office
Ownership
interest
Ownership
interest
AO Invest A/S Albertslund 100% 100%
AO Sverige AB Sweden 100% 100%
VVSochBAD Sverige AB Sweden 100% 100%
Billig VVS AS Norway 100% 100%
LampeGuru AS Norway 100% 100%
3.5 Inventories
DKK thousands 2023 2022
Carrying amount of inventories recognised at net selling price 41,819 20,766
Accounting policy
Inventories
The estimated uncertainty of inventories relates primarily to slow-moving goods and thus to impair-
ment to the net realisable value.
Impairment requirements are continuously assessed on inventories based on historical sales and the
assessment of future sales.
Key accounting judgments and estimates
Supplier bonus
Reporting from suppliers as well as AO’s own records are used when assessing the supplier bonus
that is due to AO. Estimates are used when reporting from suppliers have not been received or when
the reporting from suppliers do not reconcile with AO’s records. Ongoing retrospective reviews are
performed to ensure that supplier bonus is included correctly in the financial statements.
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Section 3
3.6 Trade receivables
Trade receivables consist of sale of goods to business customers which, in essence, have the same
risk profile. Provisions for bad debts are made in accordance with the simplified expected credit loss
model, taking into account AO's credit policy and debt collection procedure. AO has taken up credit
insurance on customers with large balances.
Historically, the Company has incurred no losses on receivables from subsidiaries, and is not ex pected
to going forward.
Calculated on the basis of a weighted loss ratio, the expected credit losses on trade receivables are as
follows:
DKK thousands Loss ratio
Receivable
amount
Expected
loss Total
2023
Not yet due 0.6 % 491,225 (2,754) 488,471
Due within 1-30 days 3.6 % 19,806 (704) 19,102
Due within 31-60 days 15.6 % 2,651 (414) 2,237
Due in more than 60 days 83.5 % 44,861 (37,475) 7,38 6
Total at 31 December 2023 558,543 (41,347) 517,19 6
2022
Not yet due 1.8% 601,879 (10,658) 591,221
Due within 1-30 days 7.6% 12,199 (931) 11,268
Due within 31-60 days 9.8% 6,116 (602) 5,514
Due in more than 60 days 85.1% 35,560 (30,258) 5,302
Total at 31 December 2022 655,754 (42,449) 613,305
* Expected losses are shown including VAT.
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Section 3
3.6 Trade receivables (continued)
DKK thousands 2023 2022
Provision for losses on receivables:
Provision for losses on receivables at 1 January excl. VAT 36,215 39,325
Realised loss during the year - use of previous provision (8,271) (14,009)
Adjustment of provisions for losses 5,616 10,899
Provision for losses on receivables at 31 December 33,560 36,215
Recognised previously written-off receivables (298) (120)
Losses recognised in the year and not previously provided for 0 0
Operating effect, net from loss and provision for losses on receivables 5,318 10,779
Accounting policy
Receivables
Estimates are used when assessing the probability of receivables. Due to the financial situation in
society, the risk of losses on doubtful receivables remains high, which has been taken into account
when assessing new customers, by way of impairment losses at the balance sheet date, and in the
day-to-day governance and control of the receivables.
Customer bonus
Estimates are used in relation to the determination of the bonus levels reached on bonus agreements
with a duration of more than one year. The applied estimates are reviewed on an ongoing basis to
ensure a correct valuation of bonus due to customers.
3.7 Deferred tax
DKK thousands 2023 2022
Deferred tax at 1 January 29,063 21,183
Foreign currency translation adjustment 0 0
Merger / acquisition of enterprise 0 1,190
Change in deferred tax for the year 4,085 7,087
Change in deferred tax relating to previous years (777) (397)
Deferred tax at 31 December 32,371 29,063
Deferred tax relates to:
Intangible assets 27,654 10,098
Property, plant and equipment 13,621 26,177
Receivables (7,455) (5,729)
Liabilities (1,449) (1,483)
Tax deficit 0 0
Deferred tax at the end of the year 32,371 29,063
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Section 3
3.8 Other payables
DKK thousands 2023 2022
Holiday allowance 18,027 18,003
Salary-related items 18,584 19,380
Acquisition of enterprise and earn-out 0 1,500
VAT and taxes 12,962 2,702
Other payables 9,296 25,311
58,869 66,896
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Capital structure
and financing
Section 4
4.1 Equity
4.2 Financing activities
4.3 Financial risks
4.4 Financial income
4.5 Financial expenses
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Section 4
4.1 Equity
Share capital
The share capital consists of the following classes:
Class A-share capital:
56,400 shares of DKK 100 each 5,640,000
Class B-share capital:
22,360,000 shares of DKK 1 each 22,360,000
Total share capital 28,000,000
Of the Company's share capital of TDKK 28,000 TDKK 5,640 is in the form of Class A-shares and TDKK
22,360 is in the form of Class B-shares. Each A-share of DKK 100 carries 1,000 votes whereas each
Class B-share of DKK 1 carries one vote. In addition to the the difference in the number of voting rights,
the two share classes differ in the following respects:
The Class A-shares are non-negotiable securities. The Class B-shares are listed on Nasdaq Copen-
hagen. The Class B-share capital has a preferential dividend right of 6%. In case of liquidation, Class
B-shares take precedence over Class A-shares. As at December 31 2023 there are no outstanding obli-
gations related to preferential dividends to Class B-shares.
An alteration to the Company's Articles of Association requires that two thirds of cast votes and two
thirds of the represented capital at a general meeting are in favour of the alteration.
Holders of Class B-shares are entitled to appoint and elect one member of the Board of Directors, while
holders of Class A-shares elect the remaining Board members.
Number of shares
Nomimal value
(DKK thousands) % of share capital
Treasury shares 2023 2022 2023 2022 2023 2022
1 January 823,900 823,900 824 824 2.9% 2.9%
Holding at
31 December 823,900 823,900 824 824 2.9% 2.9%
There have been no transactions with treasury shares in 2023. According to the authorisation of the
annual general meeting, Brødrene A & O Johansen A/S is allowed to acquire treasury shares up to a total
holding of 10% of the share capital.
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Section 4
4.1 Equity (continued)
Dividend
The payment of dividends to the Company's shareholders has no tax implication for Brødrene A & O
Johansen A/S. Proposed dividend for 2023 amounts to TDKK 105,000 corresponding to DKK 3.75 per
share.
Other reserves
Reserve for net revaluation according to the equity method contains value adjustments related to
investments in subsidiaries. Included in reserve for development costs is an amount corresponding to
capitalised intangible assets meeting the criteria for being defined as a development project.
Reserve for net revaluation according to the equity method and reserve for development costs are
unavailable for distribution to shareholders.
4.2 Financing activities
DKK thousands 2023 2022
Mortgage loans - floating interest rate - 5 years 90,061 95,048
Bank loans - floating short-term interest rate 89,556 53,519
Lease liabilities - floating interest rate 199,256 210,314
378,873 358,882
Payables relating to financing activities:
Beginning-of-year 358,882 286,981
Repayment of debt to credit institutions (61,655) (39,860)
Raising of loans from credit institutions 92,705 45,000
Debt from acquisition 0 29,408
Addition, lease liabilities, net 69,839 88,443
Repayment, lease liabilities (80,897) (51,090)
Year-end 378,873 358,882
According to the leases there are no contingent rents. The contractual cash flows appear from note 4.3.
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Section 4
4.3 Financial risks
The companys payables fall due as follows:
DKK thousands
Carrying
amount
Contractual
cash flows
Less than
1 year
1 to
5 years
More than
5 years
2023
Mortgage loans 90,061 123,999 8,168 32,284 83,547
Bank loans 89,556 89,556 89,556 0 0
Lease liabilities 199,256 220,767 86,694 103,536 30,537
Trade payables 976,874 976,874 976,874 0 0
Intra-group balances 53,066 53,066 0 53,066 0
31 December 1,408,813 1,464,262 1,161,292 188,886 114,084
2022
Mortgage loans 95,048 130,558 7,4 06 32,051 91,100
Bank loans 53,519 53,519 53,519 0 0
Lease liabilities 210,314 215,179 7 7,49 0 118,190 19,499
Trade payables 1,154,025 1,154,025 1,154,025 0 0
Intra-group balances 28,032 28,032 0 28,032 0
31 December 1,540,939 1,581,315 1,292,441 178,274 110,599
4.4 Financial income
DKK thousands 2023 2022
Interest income from current assets 2,918 2,065
Interest income from subsidiaries 768 411
Gain from sale of subsidiary 0 1,500
Foreign exchange gains, net 0 (616)
3,686 3,360
4.5 Financial expenses
DKK thousands 2023 2022
Interest expenses on liabilities (17,305) (5,493)
Expenses, lease liabilities, external (1,541) (755)
Expenses, lease liabilities, subsidiaries (1,268) (992)
Other interest expenses (122) (20)
Foreign exchange losses, net (5,808) 0
(26,044) (7,260)
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Other notes
Section 5
5.1 Contingent liabilities, security, etc.
5.2 Related parties
5.3 Subsequent events
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Section 5
5.1 Contingent liabilities, security, etc.
Land and buildings with a total carrying amount of TDKK 102,256 (2022: TDKK 110,777) are provided as
security for the Company's payables to mortgage credit institutions and finance lease liabilities.
As a normal part of doing business AO can be invovled in disputes or legal proceedings. The outcome
of pending legal actions is not expected to have any material impact on the financial position of the
Company.
The company is jointly taxed with AO Invest A/S and the ultimate Danish parent company Avenir Invest
ApS, which is the administration company for joint taxation purposes. The company is unlimited, jointly
and severally liable with other jointly taxed companies towards the Danish tax authorities for the total
corporation tax. Payable corporation taxes within the joint taxation group amounted to TDKK 8,357 at
31 December 2023 (2022: TDKK -8,933).
Any adjustment to the taxable income subject to joint taxation might entail an increase in the Compa-
ny's liability. Group companies are not subject to withholding tax on dividends. Transactions appear
from note 5.2.
The company manages cash pooling for the Group entities and is jointly and severally liable for this. At
31 December 2023, the cash-pool arrangement amounts to TDKK 89,132 (2022: TDKK 34,682).
5.2 Related parties
The Company's related parties comprise the parent company Avenir Invest ApS (Axeltorv 2, DK-1607
Copenhagen V, Denmark), the Board of Directors, the Executive Board and management employees.
Avenir Invest ApS has control over the company through its ownership of the majority of the voting
rights. During the year, no transactions were carried out with Avenir Invest ApS apart from payment of
dividends and corporate tax.
During the year, no significant transactions were carried out with the Board of Directors, the Executive
Board, management employees or major shareholders apart from normal management remuneration,
cf. note 2.4, and dividend payments.
In addition, related parties are the Company's subsidiaries to whom letters of subordination have been
submitted. Trading with subsidiaries comprises the following:
DKK thousands 2023 2022
Sale of goods 109,765 125,744
Rental expenses 48,542 44,623
Management fee 3,955 3,728
Transactions with subsidiaries are eliminated in the consolidated financial statements in accordance
with the accounting policies.
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Contents
Consolidated financial statements
Parent company financial statements
Income statement
Statement of comprehensive Income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Basis of preparation
Income statement
Invested capital
Capital structure and financing
Other notes
Section 5
The Company's balances with subsidiaries at 31 December can be seen in the balance sheet. Balances
with subsidiaries comprise ordinary trading balances related to the sale of goods. Ordinary trading
balances attract no interest and are subject to the same terms of trade as other customers of the
Company. Balances with subsidiaries also comprise the construction and conversion of buildings.
Return on balances appears from notes 4.4 and 4.5.
The Company has entered into building leases with AO Invest A/S, cf. note 3.3.
As the Company is jointly taxed with other Danish Group entities, it is liable to pay taxes of TDKK 3,658
(2022: TDKK -1,360).
5.3 Subsequent events
No events have occurred after 31 December 2023 that are considered to have a material effect on the
annual report for 2023.
5.2 Related parties (continued)
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Management’s statement
Executive Board
Board of Directors
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Independent auditor’s report
Report on the audit of
theFinancial Statements
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
CVR no 3377 1231
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Company information
DK-2620 Albertslund
Phone: +45 70 28 00 00
Website: www.ao.dk
CVR number: 58 21 0 6 1 7
LEI code 5 2 99 00 4B6Z EGVC R 9ZR75
ID code: DK0060803831
Founded: 1914
Registered Office: Albertslund
Board of Directors
Henning Dyremose, Chair
Erik Holm, Deputy Chair
René Alberg
Ann Fogelgren
Peter Gath
Leif Hummel
Marlene L. Jakobsen
Niels A. Johansen
Executive Board
Niels A. Johansen, Chief Executive Officer
Stefan Funch Jensen, Chief Transformation Officer
Lili Johansen, Chief Human Resources Officer
Per Toelstang, Chief Financial Officer/
Deputy Chief Executive Officer
Auditors
PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab
Annual General Meeting
The Annual General Meeting will be held on 20
March 2024.
Company information
Financial statements
PerformanceIn brief Corporate governance
Strategy
Annual Report 2023
Brødrene A & O Johansen A/S
Rørvang 3, DK-2620 Albertslund, Denmark
CVR no. 58 21 06 17