Approved at the Annual General Meeting,
x March 2021
Conductor
Carsten Gyldenlev Kristoffersen
Approved at the Annual General Meeting,
5 March 2021
Conductor
Carsten Gyldenlev Kristoffersen
Approved at the Annual General
Meeting, 4 March 2022
Conductor
Carsten Gyldenlev Kristoffersen
BORG Aut
omotive A/S
CVR: 87 32 24 16
Bergsøesvej 12
DK-8600 Silkeborg
Approved at the Annual General
Meeting, 3 March 2023
Conductor
2
CONTENT
CORPORATE INFORMATION ............................................................................................................................................................... 3
STATEMENT BY MANAGEMENT .......................................................................................................................................................... 4
INDEPENDENT AUDITOR’S REPORT ................................................................................................................................................... 5
FINANCIAL HIGHLIGHTS AND KEY RATIOS ...................................................................................................................................... 7
GROUP STRUCTURE ............................................................................................................................................................................. 9
MANAGEMENT REVIEW ..................................................................................................................................................................... 10
STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME ............................................................................................. 14
NOTES TO THE FINANCIAL STATEMENTS ....................................................................................................................................... 20
3
CORPORATE INFORMATION
Phone: +45 86 80 11 77
Web: www.borgautomotive.com
CVR no.: 87 32 24 16
Registered in: Denmark, Silkeborg
Financial year: 1 January – 31 December
Board of Directors
Executive Management
Auditors
PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab
Nobelparken
Jens Chr. Skous Vej 1
8000 Aarhus C
CVR-nr.: 33 77 12 31
4
Executive Management
Kim Kruse Andersen
CEO
Board of Directors
Jens Bjerg Sørensen Kurt Bering Sørensen
Chairman of the Board Vice Chairman of the Board
Søren Ulrik Toft-Jensen Carsten Thygesen
Jørgen Dencker Wisborg
5
INDEPENDENT AUDITOR’S REPORT
6
INDEPENDENT AUDITOR’S REPORT
CVR no. 33 77 12 31
FINANCIAL HIGHLIGHTS AND KEY RATIOS
2022 2021 2020 2019 2018
Revenue and income
Revenue
1.815.321
1.368.358
870.568
917.678
951.564
EBITDA
179.899
158.057
108.211
110.000
130.647
Depreciation and amortization
53.530
45.972
25.834
25.308
12.566
Operating profit (EBIT)
126.369
112.085
82.377
84.692
118.081
Net Financial items
-51.522
-17.227
-3.382
-985
-6.762
Profit for the year
44.316
71.217
61.257
60.364
84.621
Cash flows for the year
Cash flow from operating activities
-149.941
49.153
139.487
84.728
149.209
Cash flow from investing activities
-59.300
-17.885
-71.059
-26.684
-40.939
Cash flow from financing activities
199.723
-16.285
-62.438
-60.092
-113.946
Cash flows for the year
14.149
23.689
8.804
3.029
4.911
Invested capital and financing
Investments in property, plant and equipment
50.942
24.709
9.867
20.537
27.422
Net working capital
606.603
326.537
124.941
156.034
141.011
Invested capital
818.036
524.630
275.365
261.572
241.663
Total Assets
1.634.525
1.373.540
779.487
749.261
715.712
Equity
301.428
332.841
324.927
344.179
345.296
Net interest-bearing debt*
-426.524
-137.776
-5.274
-1.591
41.974
Financial ratios
EBITDA margin (%)
9,9%
11,6%
12,4%
12,0%
13,7%
EBIT margin (%)
7,0%
8,2%
9,5%
9,2%
12,4%
Net margin (%)
2,4%
5,2%
7,0%
6,6%
8,9%
Return on equity (%)
14,0%
21,7%
18,3%
17,5%
15,9%
Return on invested capital (%)
26,8%
39,5%
40,3%
43,7%
50,9%
Solvency (%)
18,4%
24,2%
41,7%
45,9%
48,2%
Financial data
Average number of employees
2.111
2.002
1.466
1.615
1.599
* A positive Net interest-bearing debt means that the deposits exceeds the debt.
CONSOLIDATED
Comparative figures for 2018 have not been restated to include IFRS 16 and similar comparative figures for 2018-2020 have not been
adjusted related to the changed accounting policies regarding the IFRIC agenda decision concerning configuration or customisation costs
in a cloud computing arrangement.
7
FINANCIAL HIGHLIGHTS AND KEY RATIOS
(continued)
The ratios included in financial highlights are
defined and calculated as follows:
EBITDA margin (%)
EBIT margin (%)
Net margin (%)
Return on equity (%)
Return on invested capital (%)
Solvency (%)
Additionally the following alternative performance measures are applied and calculated in the following manner:
2022 2021 2020 2019 2018
Inventories
954.020
714.177
370.070
369.421
336.632
Trade receivables
235.803
213.555
105.532
112.043
124.777
Other receivables
54.174 55.324 18.414 19.169 19.283
Prepayments
5.506 3.769 3.271 3.938 4.302
Trade payables
-255.124 -273.028 -79.570 -53.473 -49.941
Paybles to related parties, non-interest bearing
0 0 0 0 -25
Other payables
-387.776
-387.260
-292.776
-295.064
-294.017
Net working capital
606.603 326.537 124.941 156.034 141.011
Net working capital
606.603
326.537
124.941
156.034
141.011
Intangible assets
62.061
79.525
65.150
21.328
21.016
Property, plant and equipment
165.831
132.306
96.797
97.170
90.780
Provisions
-16.459
-13.738
-11.523
-12.960
-11.144
Invested capital 818.036 524.630 275.365 261.572 241.663
Non-current interest-bearing debt
-34.510
-48.843
-27.675
-25.983
-10.369
Current interest-bearing debt
-19.845
-22.153
-10.784
-10.921
-3.841
Other receivables, interest bearing
72
72
73
327
254
Receivables from parent company
0
0
24.308
31.957
51.019
Payables to parent company
-386.390
-90.541
0
0
0
Cash and cash equivalents
14.149
23.689
8.804
3.029
4.911
Net interest-bearing debt -426.524 -137.776 -5.274 -1.591 41.974
Average equity and average invested capital is calculated as a simple average of equity or invested capital beginnning of the year and
equity or invested capital end of year.
Equity x 100
Total assets
Revenue
Profit for the year x 100
Average equity
EBITDA x 100
Average invested capital
EBITDA x 100
Revenue
EBIT x 100
Revenue
Profit for the year x 100
8
9
GROUP STRUCTURE
BORG Automotive Group legal structure is illustrated below:
All shares in subsidiaries are owned 100%.
Aktieselskabet Schouw & Co. owns 100% of the shares in Borg Automotive A/S.
Borg Automotive A/S
Silkeborg, Danmark
Nom. DKK 1.000.000
Borg Automotive Sp. z.o.o.
Zdunska Wola, Polen
Nom. PLN 20.597.580
Borg Automotive UK Ltd.
Wednesbury, UK
Nom. GBP 10.600.001
Electro Steer Ltd.
Wednesbury, UK
Nom. GBP 1
Car Parts Industries Belgium SPRL
Nivelles, Belgium
Nom. EUR 18.550
Borg Automotive Spain S.L.U.
Pamplona, Spain
Nom. EUR 3.000
Borg Automotive Reman Spain S.L.U.
Pamplona, Spain
Nom. EUR 3.000
SBS Automotive A/S
Støvring, Denmark
Nom. DKK 40.000.000
SBS Deutschland GmbH
Eisenach, Germany
Nom. EUR 1.022.938
SBS France SAS
Beauvais, France
Nom. EUR 327.000
10
MANAGEMENT REVIEW
BORG Automotive Group (BA Group or Group) is an independent remanufacturer of automotive parts, covering the product
groups starters, alternators, air condition compressors, brake calipers, EGR valves, steering products, and turbo chargers. The
remanufacturing of parts take place at the production facilities in Poland, UK, and Spain, while the products are sold throughout
Europe by sales teams in Denmark and Belgium. On 1 July 2021 BORG Automotive Group acquired SBS Automotive Group which
supplies spare parts for the automotive business. SBS Automotive has distribution facilities in Denmark, Germany, France, and
Poland and the products are sold throughout Europe by sales teams in Denmark, Germany and France.
2022 AT A GLANCE
Revenue for the fiscal year for the Group was MDKK 1.815 compared to MDKK 1.368 in 2021, corresponding to an increase of
33%. The profits before tax ended at MDKK 75 against last year of MDKK 95 corresponding to a decrease of 21%. For the parent
company revenue for the fiscal year was MDKK 1.082 compared to MDKK 982 in 2021, while profits before tax amounted to
MDKK 57 compared to MDKK 88 in 2021.
For the Group profit for the year amounted to MDKK 44 (2021: MDKK 71), and to MDKK 44 (2021: MDKK 71) for the parent
company. Profit for the year for both the Group and parent company are impacted negatively by the adjustment of the SBS Earn-
out adjustment of MDKK 36, compared to MDKK 9 in 2021.
The increase in revenue is seen across all segments, but are a combined result of the acquisition of the SBS Automotive Group
which are consolidated for 12 months in 2022 compared to 6 months in 2021, and an organic growth within the Vital segment
of SBS Group. The increase was though also fuelled by the reopening of the markets where Borg Automotive operates, after a
2020 and 2021 which was heavily impacted by COVID-19. However, increasing energy cost, salaries and freight cost have had
a significant negative impact on the realised cost level and profits, also impacted by a high one off cost in the range of MDKK 17
related to the implementation of a new cloud based ERP solution in SBS. Further, the adjustment of the SBS Earn-out impacted
profits negatively by MDKK 36 (MDKK 9 in 2021).
Overall the performance in 2022 are considered satisfactory compared to the expected level, where revenue are realised higher
than expected (+33%), while comparable earnings before tax adjusted for SBS earn-out are realised 6% above 2021 which is
below the expected range of 15-25%, but when adjusting for the one-off cost for the SBS ERP solution, the results are within
the expected range and realised a satisfactory level.
During 2022 one of the focus areas for the Group has been navigating through an automotive marked that started well but
changed during 2022 as inflation took off and the marked stagnated in second half of 2022. The implementation of the new ERP
system in SBS Group has been taken a lot of resources in the short implementation timeframe available to be able to go live
January 2023. The strengthening and future proofing of the organisation to be able to meet and resist the current challenges,
but also to have the organisation in place to meet the expected increase in demand for remanufactured auto parts in the coming
years continues. As part of this process focus has been on strengthening the product portfolio and optimizing the production
setup at the production facilities in Poland, UK, and Spain. The production facility established in Lublin 2019 is growing as
planned and is expected to grow further in 2023.
The inventories within the Group have increased with MDKK 240 (34%) during 2022 compared to 2021. This significant increase
is as expected and relates to both the remanufacturing and trading business. Within the remanufacturing business, the increase
is seen partly in the finished goods inventory at the Distribution Center in Poland due to a reduced marked demand in second
half of 2022, and a deferred production capacity adjustment. The marked demand is expected to pick-up again during 2023,
and thus reduce the inventory levels accordingly. Secondly the change of the remanufacturing production process in Spain
entailed an increase in the raw materials inventory to ensure sufficient components. Within the trading business (SBS
Automotive Group) the inventory increase can be attributed to the disruption of the global supply chain and the increased
delivery times of goods out of China as a consequence of the COVID-19 pandemic.
The effective tax rate (ETR) in 2022 amounts to 41% compared to 25% in 2021. This significantly higher ETR relates primarily
to the non-deductibility of costs included in the accounts as financial expenses related to the SBS Earn-out (cf. note 11) and a
correction of prior year deferred tax in one of the subsidiaries.
The continued R&D activities consisting primarily of development activities cover development of new remanufacturing
methods, processes, and products as well as customer specific amendments to the existing portfolio. The development
activities in the Group are placed together with the production facilities in Poland, UK and Spain in order to fully optimize and
utilize all synergies between the various activities.
The headquarter in Silkeborg was sold in December 2021, and a 2 1/2 year lease contract has been made with the new owners.
At the same time land just outside Silkeborg has been acquired for a new headquarter. Construction has begun in 2022 and
progressing as planned and it is expected that the new facilities will be ready in beginning of 2024.
At year-end 2022, total assets for the Group amounted to MDKK 1.635 against MDKK 1.374 in 2021, while total equity ended
at MDKK 301 against MDKK 333 at year-end 2021. The average number of employees increased from 2.002 in 2021 to 2.111
in 2022. For the parent company assets amounted to MDKK 1.423 at year-end compared to MDKK 1.075 in 2021, while equity
was MDKK 301 against MDKK 333 last year.
11
The cash flow from operating activities for 2022 amounted to MDKK -150 (2021: MDKK 49), while the investing activities
amounted to MDKK -59 (2021: MDKK -18), of which MDKK 7,8 are related to the purchase of the business in Spain. The financing
activities in 2022 accounted for a total of MDKK 200 (2021: MDKK -16), of which MDKK 75 relates to dividend paid for the year
(2021: MDKK 60).
Overall, the development in 2022 shows a healthy and well-developed business with a strong base of both competent
employees and an appropriate production and distribution footprint in Europe.
EVENTS SUBSEQUENT TO THE FINANCIAL YEAR-END
No material events have occurred after the end of the financial year.
OUTLOOK FOR 2023
The market upon which BA Group operates is in these years characterized and affected by considerable customer
consolidations. A consequence of this consolidation is an increase in purchasing power of the customers and a change in the
existing trading patterns in the market. On the positive side of this consolidation is the potential increase in sales to the
consolidated customer groups. With existing broad product portfolio and a strong pipeline in place it is expected that this will
ensure a positive development in sales to both the free aftermarket and the OES customers and the turbo chargers acquisition
supports that development.
The current expectations of a positive development in sales levels are one of the main reasons for the turbo charger acquisition.
The larger product range and broader and more present geographical coverage brings in new customers as well as new products
to existing customers together with a level of service that lives up to a continuously increasing demand on quality, delivery
capability and product range.
Adding a third trading leg to the free aftermarket and the OES market via SBS Automotive will open new opportunities in the
future both in relation to offering wear and tear products such as brake disks to customers but also synergies in purchasing and
market approach.
The expected future growth in sales levels will potentially entail that the current distribution centre in Zduńska Wola, Poland
within the coming few years will reach its maximum capacity without no expandability options at the current site. Based on this
a suitable plot has been acquired in late 2019 near the current production facility in Zduńska Wola. The necessary licenses are
in place, and it is expected that the construction of the new distribution centre will commence during 2023. In 2023 the BA
Group will have a continued focus on capacity levels and invest in extended capacity when deemed ne3cessary.
BA Group expects a sales volume in 2023 on the same level as in 2022 and based on this both revenue and earnings before tax
is expected to be stable. It is expected that revenue will be in the range of MDKK 1.600-1.800 and the earnings before interests,
tax, depreciations and amortisation (EBITDA) are expected to be in the range of MDKK 160-190.
EMPLOYEE DEVELOPMENT AND APPRAISAL
An essential prerequisite for the continued development of BA Group is the employees, which entails a focus on both attracting
new and competent employees, but also a very keen and determined focus to retain, develop, and motivate the existing
workforce to ensure that the necessary skills and capabilities are present. Important elements to support this goal include
delegation of responsibility and competencies, establishment of cross-organisational solutions, compulsory annual employee
appraisals, and employee surveys.
ENVIRONMENTAL MANAGEMENT
BA Group makes continuous efforts to mitigate the environmental impact of the business activities. The largest environmental
impact identified relates to the consumption of energy, raw materials, and the derived materials waste at the production
facilities.
Group policy is always to comply with applicable local legislation, rules, and regulations and commits to progress at the
established initiatives within environment as well as health and safety. In 2018 to 2021 focus was specifically on reducing
electricity consumption as well as the use of cardboard and plastic, and the Lost Time Injury Frequency Rate (LTIFR). All KPI’s
are showing a positive trend. Further information about this can be found here:
In addition to the internal focus BA Group is also determined to contribute to ensure environmental management as well as
promote responsible behaviour throughout the value chain. Since the Group is an international supplier of auto parts, it is
imperative that all environmental and quality requirements are channelled to the Group´s partners and suppliers to ensure the
same high levels of quality, environment, safety, and ethics.
12
QUALITY MANAGEMENT
BA Group’s quality system is based on the standard ISO 9001a. In addition to this platform the Group has a close cooperation
with several customers who challenge the existing production setup as well as the quality management. This collaboration is
considered to have a very positive impact on the current and future quality of the products within the portfolio and is a valuable
and important aspect of the Group’s ability to continuously update, renew, and improve the product quality.
RESEARCH AND DEVELOPMENT ACTIVITIES
The Group is continuously developing new methods, processes, and products as well as customer specific amendments to the
existing portfolio. The development activities have during 2022 taken place in the subsidiaries in Poland, UK, and Spain.
In Poland remanufacturing of products within hybrid technology has been in focus to secure necessary skills and processes for
reverse engineering of future products and technologies. Several products are in a screening process with customers for
potentially being incorporated into BA's future product portfolio.
CORPORATE RESPONSIBILITY
BA Group is dedicated to being a responsible employer and a good corporate citizen. Our Code of Conduct (COC) represents
how suppliers are expected to act when doing business with the Group. A continuous focus is on updating the COC to reflect the
expectations both from the community and customers.
Any suspicions related to a breach of the COC are considered very serious and are always acted upon. In severe cases of non-
compliance with the COC, a termination of the business relationship will take place. As part of the Group’s business is the audit
of external suppliers of finished goods and spare parts. Since 2020 compliance with the COC has been part of these supplier
audits.
STATUTORY DESCRIPTION OF CORPORATE SOCIAL RESPONSIBILITY (CSR) AND GENDER REPRESENTATION
For BA Group’s statutory description of Corporate Social Responsibility, including human rights, social and labour conditions,
climate, environment, gender diversity and anti-corruption, in accordance with §99a and §99b in the Financials Statements act,
please refer to Schouw & Co, CVR no: 63 96 58 12, ESG report 2022 at:
The Group continually strives to improve the work environment and aim to strengthen and implement a shared corporate culture
to ensure that all colleagues are treated equally irrespective of location, gender, origin, or employment.
For the policies and targets regarding gender representation, reference is made to the annual report of the ultimate parent
company Schouw & Co.
DATA ETHICS
In BA Group we strive to achieve at high standard of data integrity and transparency for securing the trust of our business
partners and employees. A continuous focus and acknowledgement of the responsibility and co-responsibility are on all links of
the data processing chain to ensure the technical and organization measures which must be in place to support the ethically
responsible data processing.
For BA Group’s statutory description regarding Data ethics in accordance with §99d, paragraph 1 in the Financials Statements
act, please refer to Schouw & Co, CVR no: 63 96 58 12, ESG report 2022 at:
WORKING ENVIRONMENT
In BA Group the number of working hours is always set to comply with local labour legislation. In situations where overtime is
needed, the Group compensate according to the requirements related to all additional payments. No employees shall work more
than the hours set as a maximum by the UN Human Rights.
The Group continuously improves the internal work instructions and workflows to ensure that all phases of the supply chain are
planned and organised to promote a safe, healthy, and responsible working environment. The purpose is to avoid accidents and
to ensure that the physical and mental conditions of the employees will not deteriorate. It is indeed important to the Group to
have healthy employees.
During 2019, Schouw & Co established a whistle-blower-system for all companies within the Schouw & Co. Group, also covering
BA Group. The system provides a secure channel for all employees and business partners for reporting suspected criminal or
unethical matters.
OUTSTANDING ENVIRONMENTAL ISSUES
The Group always aims at conducting its business and operating in compliance with all existing environmental rules and
regulations and has set up internal task forces to handle the Group’s environmental affairs.
There are currently no known material environmental issues outstanding within the Group.
13
SPECIAL BUSINESS RISKS
The general financial risks relevant for the BA Group are described more detailed in note 29 to which reference is made, but
below is included a brief highlight of the special risks to which the Group is exposed.
OPERATIONAL RISKS
The Group is not considered to have special operational risks. The operations are located within a business area with a low
sensitivity to the general conjunctural changes and where the customer portfolio is considered broad and loyal. The risk to which
the Group is exposed relates more to the conjunctural changes within the automotive business.
RAW MATERIALS RISKS RELATED TO PURCHASE OF CORES
A large part of the raw materials (cores) is continuously purchased at prices that may fluctuate depending on market demand,
and with a correlation to significant changes in the metal prices.
FOREIGN CURRENCY RISK
The cross-country activities within the Group entails that both income, cash flow, and equity are affected by changes in
currencies especially PLN to DKK and USD to DKK. To reduce the currency risk, hedging of cash flows are carried out to cover
the exposure of trading between PLN and USD to DKK. The hedging is done based on 12 months rolling forecast. Reference is
made to note 30.
CREDIT RISK
The majority of the Group’s production is delivered to international customers, who has a long history with the Group. Any credit
risk related to the customers and trade receivables are covered by Group policy and with effective management of customer credit
assessments and regular and thorough analyses of customer creditworthiness and external insurance is obtained to reduce risk
accordingly. Furthermore, as part of the remanufacturing business setup, customers pay a core charge (deposit) on top of the
purchase price for the product. The deposit will be repaid if the customer returns a used unit (a core). This setup (depos system)
is an additional safeguard regarding potential losses related to customers, since the depos amount placed within the Group can
be offset in any outstanding balances.
These factors combined with external credit insurance have entailed that no material losses have been recorded in recent years.
CAPITAL STRUCTURE
BA Group is predominately financed by resources of the parent company Schouw & Co. as well as a number of committed and to a
lesser extent uncommitted credit facilities. BA Group, like other major subsidiaries in the Schouw & Co. Group, co-guarantees for
these facilities, see further details in note 31.
Based on the policies set by and for all companies within the Schouw Group the equity ratio for each individual company shall be
within a range which enables an assessment of this company as credit-worthy on a stand-alone basis.
STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
INCOME STATEMENT
Note 2022 2021 2022 2021
Revenue
3
1.082.155
982.242
Cost of sales
4,5,7,8
-1.320.014
-1.012.994
-916.136
-812.696
Gross profit 495.307 355.364 166.019 169.546
Other operating income
9
23.133
21.365
Distribution expenses
5,8
-267.458
-173.015
-84.520
-70.078
Administrative expenses
5,6,8
-102.410
-71.516
-53.129
-47.772
Other operating expenses 9 -208 -329 -21.403 0
Operating profit (EBIT) 126.369 112.085 30.100 73.061
Income from subsidiaries
16
48.845
22.157
Financial income
10
25.160
5.151
Financial expenses
11
-53.552
-19.181
-46.882
-12.849
Profit before tax 74.847 94.858 57.223 87.520
Tax for the year
12
-30.531
-23.641
-12.907
-16.303
Profit for the year 44.316 71.217 44.316 71.217
STATEMENT OF OTHER COMPREHENSIVE INCOME
Items that may be reclassified subsequently to the income
statement:
Exchange differences on translation of foreign operations
-7.572
-1.681
-7.572
-1.681
Value adjustment of hedging instruments for the year
8.681
2.659
Hedging instruments transferred to financials
-208
-208
0
Hedging instruments transferred to cost of sales
-9.023
-3.079
1.763
-3.079
Tax on other comprehensive income
12
-1.930
-56
-2.252
93
Value adjustment of subsidiaries
16
-1.141
526
Other comprehensive income after tax
-729
-1.482
-729
-1.482
Profit for the year
44.316
71.217
Total comprehensive income 43.587 69.735 43.587 69.735
Attributable to:
Shareholders of Borg Automotive A/S
43.587
69.735
CONSOLIDATED PARENT COMPANY
14
BALANCE SHEET
ASSETS
Note 2022 2021 2022 2021 2020
Completed development projects
0
294
6.463
Development projects in progress
3.456
838
907
Customer relations
11.385
16.615
18.461
Brands
0
0
0
Know-how
21.751
24.470
27.189
IT projects
2.493
3.456
4.949
Other intangible assets
0
14
85
Intangible assets 13 62.061 79.525 39.085 45.687 58.054
Land and buildings
0
0
12.001
Plant and machinery
0
0
9
Other fixtures, tools and equipment
17
31
102
Assets under construction, etc.
20.626
1.263
0
Property, plant and equipment 14 165.831 132.306 20.643 1.294 12.112
Investment in subsidiaries
16
501.130
468.421
337.651
Deferred tax
18
34.616
35.998
22.260
Lease assets
15
3.555
4.846
1.306
Receivables from related parties
21,23 0 0 516.365 246.317 193.618
Other receivables 10.327 12.130 0 0 0
Other non-current assets 134.649 148.772 1.055.666 755.582 554.835
Total non-current assets 362.541 360.603 1.115.394 802.563 625.001
Inventories
19
56.442
53.372
52.683
Trade receivables
29
125.831
121.282
74.026
Receivables from related parties
21,23
107.855
83.534
19.484
Corporate income tax
20
0
0
0
Joint taxation contribution
20
5.118
0
6.918
Other receivables
8.640
28
95
Prepayments
2.470
1.437
1.006
Cash and cash equivalents
804
12.602
6.254
Total current assets 1.271.984 1.012.937 307.160 272.255 160.466
Total assets 1.634.525 1.373.540 1.422.554 1.074.818 785.467
CONSOLIDATED PARENT COMPANY
15
BALANCE SHEET
EQUITY AND LIABILITIES
Note 2022 2021 2022 2021 2020
Share capital
22
1.000
1.000
1.000
Hedge transaction reserve
-1.227
6.231
-1.753
-1.426
Net revaluation reserve per equity method
Reserve for development projects
Exchange adjustment reserve -26.121 -18.549 0 0 0
Retained earnings 320.933 276.617 61.531 58.386 34.903
Proposed dividend 0 75.000 0 75.000 60.000
Total Equity 301.428 332.841 301.428 332.841 323.106
Deferred tax
18
0
0
0
Other payables
24
55.642
221.376
45.481
Payables to related parties
21,23
71.137
77.970
126.992
Interest bearing debt
15,23
1.087
2.527
8.595
Provisions
25
12.822
12.492
10.483
Total non-current liabilities 123.213 303.591 140.688 314.365 191.551
Current portion of non-current interest
bearing debt
15,23 19.845 22.153 2.188 5.728 1.142
Payables to related parties
21,23
538.861
169.443
70.056
Trade payables
21.476
24.529
14.311
Others payables
24
402.550
207.323
173.888
Corporation tax payable
20
6
0
0
Joint taxation contribution
20
0
6.989
0
Provisions
25
15.357
13.600
11.413
Total current liabilities 1.209.884 737.108 980.438 427.612 270.810
Total liabilities 1.333.097 1.040.699 1.121.126 741.977 462.361
Total equity and liabilities 1.634.525 1.373.540 1.422.554 1.074.818 785.467
Changes in working capital
27
Financial assets and liabilities
28
Financial risks
29
Derivative Financial instruments
30
Contingent liabilities
31
Related parties
32
CONSOLIDATED PARENT COMPANY
16
CASH FLOW STATEMENT
Note 2022 2021 2022 2021
Profit before tax 74.847 94.858 57.223 87.520
Adjustment for operating items of a non-cash nature,
etc.:
Depreciation and impairment losses
8
9.341
14.762
Other non-cash operating items, net -954 -1.484 -28 -624
Provisions 2.431 4.122 2.087 4.196
Income from subsidiaries
16
-48.845
-22.157
Financial income
10
-2.030
-1.954
-25.160
-5.151
Financial expenses
11
46.882
12.849
Cash flows from operating activities before changes
in working capital
Changes in working capital
27
-287.400
-79.558
103.536
-25.874
Cash flows from operating activities after changes in
working capital
-106.024 81.137 145.036 65.521
Interest income received
1.761
529
Interest expenses paid
-7.428
-2.756
-6.194
-10.796
Cash flow from ordinary activities -112.738 78.494 140.603 55.254
Income tax paid
20
-37.203
-29.341
-25.878
-16.041
Cash flows from operating activities -149.941 49.153 114.725 39.213
Purchase of intangible assets
26
-3.868
-644
-3.728
-538
Sale of intangible assets
3.531
0
Purchase of property, plant and equipment
26
-48.003
-23.505
-16.623
-921
Sale of property, plant and equipment
27
12.280
Acqusition of subsidiary
16
-22
0
Acqusition of business
17
-7.811
-6.026
0
0
Dividend received from subsidiaries
16
7.446
44.610
Change in financial assets
-45
0
0
Cash flows from investing activities -59.300 -17.885 -9.369 55.431
Repayment of non-current liabilities
23
-3.762
-5.794
-3.762
-4.891
Proceeds from incurring non current financial liabilities
0
0
Repayment of lease liabilities
23
-20.043
-14.589
-2.382
-1.327
Repayment of creditfacilties
23
-52.052
0
0
Change in net payables/receivables to group companies
23
-36.009
-22.014
Shareholders:
Dividend paid
-75.000
-60.000
-75.000
-60.000
Cash flows from financing activities 199.723 -16.285 -117.153 -88.232
Cash flows for the year
-9.518
-11.797
6.412
Cash at the beginning of the year
12.602
6.254
Value adjustment of cash and cash equivalents
23
-22
-98
-1
-64
Cash at the end of the year 14.149 23.689 804 12.602
CONSOLIDATED PARENT COMPANY
17
EQUITY STATEMENT
CONSOLIDATED
Share
Capital
Hedge
transaction
reserve
Exchange
adjustment
reserve
Retained
earnings
Proposed
dividend Total equity
Equity at 1 January 2022 1.000 -1.227 -18.549 276.617 75.000 332.841
Profit and other comprehensive income in 2022:
Exchange rate adjustment of foreign
subsidiaries
Value adjustment of hedging instruments
recognised during the year
Hedging instruments transferred to financials
-208
-208
Hedging instruments transferred to cost of
sales
Tax on hedging instruments
-1.930
-1.930
Profit for the year
Total recognised comprehensive income
Transactions with the owners:
Dividend distributed 0 0 0 0 -75.000 -75.000
Transactions with the owners for the
period
Equity at 31 December 2022 1.000 5.616 -26.121 320.933 0 301.428
Share
Capital
Hedge
transaction
reserve
Exchange
adjustment
reserve
Retained
earnings
Proposed
dividend Total equity
Equity at 1 January 2021 1.000 -1.426 -16.868 282.221 60.000 324.927
Change in accounting principles 0 0 0 -1.821 0 -1.821
Adjusted Equity 1 January 2021
Profit and other comprehensive income in 2021:
Exchange rate adjustment of foreign
subsidiaries
Hedging instruments transferred to cost of
sales
Value adjustment of hedging instruments
recognised during the year
Tax on hedging instruments
-56
-56
Profit for the year
-3.783
Total recognised comprehensive income
Transactions with the owners
Dividend distributed
-60.000
-60.000
Transactions with the owners for the
period
Equity at 31 December 2021 1.000 -1.227 -18.549 276.617 75.000 332.841
18
EQUITY STATEMENT
PARENT COMPANY
Share
capital
Hedge
transaction
reserve
Net revaluation
reserve per
quity method
Reserve for
development
projects
Retained
earnings
Proposed
dividend Total Equity
Equity at 1 January 2022 1.000 -1.753 199.980 228 58.386 75.000 332.841
Profit and other comprehensive income in 2022:
Exchange rate adjustment of
foreign subsidiaries
0 0 -7.572 0 0 0 -7.572
Hedging instruments transferred
to cost of sales
0 1.763 0 0 0 0 1.763
Hedging instruments transferred
to financials
0 -208 0 0 0 0 -208
Value adjustment of hedging
instruments recognised during the
year
0 8.681 0 0 0 0 8.681
Tax on equity adjustements
0
-2.252
0
0
0
0
-2.252
Value adjustment of hedging
instruments in subsidiary
0 0 -1.141 0 0 0 -1.141
Profit for the year
0
0
41.399
-228
3.145
0
44.316
Total recognised comprehensive
income
0 7.984 32.686 -228 3.145 0 43.587
Transactions with the owners:
Dividend distributed
0
0
0
0
0
-75.000
-75.000
Transactions with the owners for
the period
0 0 0 0 0 -75.000 -75.000
Equity at 31 December 2022
1.000
6.231
232.666
0
61.531
0
301.428
Share
capital
Hedge
transaction
reserve
Net revaluation
reserve per
quity method
Reserve for
development
projects
Retained
earnings
Proposed
dividend Total Equity
Equity at 1 January 2021 1.000 -1.426 223.588 5.041 36.724 60.000 324.927
Change in accounting principles 0 0 0 0 -1.821 0 -1.821
Adjusted Equity 1 January 2021
1.000 -1.426 223.588 5.041 34.903 60.000 323.106
Profit and other comprehensive income in 2021:
Exchange rate adjustment of
foreign subsidiaries
0 0 -1.681 0 0 0 -1.681
Hedging instruments transferred
to cost of sales
0 -3.079 0 0 0 0 -3.079
Value adjustment of hedging
instruments recognised during the
year
0 2.659 0 0 0 0 2.659
Tax on hedging instruments
0
93
0
0
0
0
93
Value adjustment of hedging
instruments in subsidiary
0 0 526 0 0 0 526
Profit for the year
0
0
-22.453
-4.813
23.483
75.000
71.217
Total recognised comprehensive
income
0 -327 -23.608 -4.813 23.483 75.000 69.735
Transactions with the owners:
Dividend distributed
0
0
0
0
0
-60.000
-60.000
Transactions with the owners for
the period
0 0 0 0 0 -60.000 -60.000
19
20
NOTES TO THE FINANCIAL STATEMENTS
CONTENT
1.
ACCOUNTING POLICIES ....................................................................................................................................................................21
2.
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS .............................................................................29
3. REVENUE .............................................................................................................................................................................................31
4.
COST OF SALES ...................................................................................................................................................................................31
5.
STAFF COST ........................................................................................................................................................................................32
6.
FEES TO AUDITORS APPOINTED BY THE GENERAL MEETING........................................................................................................34
7.
RESEARCH AND DEVELEOPMENT COSTS .........................................................................................................................................34
8.
DEPRECIATION, AMORTIZATION AND IMPAIRMENT LOSSES .......................................................................................................34
9.
OTHER OPERATING INCOME AND EXPENSES ..................................................................................................................................35
10.
FINANCIAL INCOME ...........................................................................................................................................................................35
11.
FINANCIAL EXPENSES .......................................................................................................................................................................35
12.
TAX ON PROFIT FOR THE YEAR .........................................................................................................................................................36
13.
INTANGIBLE ASSETS .........................................................................................................................................................................37
14.
PROPERTY, PLANT AND EQUIPMENT ................................................................................................................................................39
15.
LEASE ASSETS ....................................................................................................................................................................................41
16.
INVESTMENTS IN SUBSIDIARIES (PARENT COMPANY) ..................................................................................................................44
17.
ACQUISITION OF BUSINESS .............................................................................................................................................................45
18.
DEFERRED TAX ...................................................................................................................................................................................46
19.
INVENTORIES .....................................................................................................................................................................................48
20. CORPORATE INCOME TAX .................................................................................................................................................................48
21.
RECEIVABLES AND PAYABLES WITH RELATED PARTIES ................................................................................................................49
22.
SHARE CAPITAL ..................................................................................................................................................................................49
23.
INTEREST-BEARING DEBT ................................................................................................................................................................50
24.
OTHER PAYABLES ...............................................................................................................................................................................53
25.
PROVISIONS .......................................................................................................................................................................................54
26.
ADJUSTMENTS FOR NON-CASH TRANSACTIONS ............................................................................................................................54
27.
CHANGES IN WORKING CAPITAL......................................................................................................................................................54
28.
FINANCIAL ASSETS AND LIABILITIES ..............................................................................................................................................55
29.
FINANCIAL RISKS ...............................................................................................................................................................................58
30.
DERIVATIVE FINANCIAL INFORMATION ..........................................................................................................................................62
31.
CONTINGENT LIABILITIES AND GUARANTEES................................................................................................................................63
32.
RELATED PARTIES ..............................................................................................................................................................................64
21
NOTES TO THE FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES
Borg Automotive A/S is a limited liability company incorporated and domiciled in Denmark. The annual report for the period 1.
January – 31. December 2022 comprises both the consolidated accounts for Borg Automotive A/S and its subsidiaries (BA Group
or Group) and the annual accounts for the parent company Borg Automotive A/S.
The consolidated financial statements of Borg Automotive A/S and its subsidiaries have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by the European Union and additional Danish disclosure
requirements for annual reports applying for class C entities.
Basis of preparation
The consolidated financial statements and the parent company financial statements are presented in Danish kroner (DKK), which
is the presentation currency for the Group and the functional currency of the parent company. If not stated otherwise, all amounts
rounded to nearest thousands (‘000 or TDKK).
The consolidated financial statements and the parent company financial statements have been prepared on the basis of historical
cost, except for share based remuneration and derivative financial instruments that are measured at fair value.
Going concern
The Board of Directors and Executive Management have in connection to the preparation of the Financial Statements assessed
the Group´s and the Parent Company´s ability to continue as a going concern and thus whether this assumption can be applied.
Based in the knowledge of the Group and Parent Company including the future expectations including budgets, developments in
liquidity, the identified risks and uncertainties connected to the regular business the Board of Directors and Executive
Management considers it fair and justified to apply the going concern principle.
Change in accounting principles and presentation
New and amended standards and interpretations
The Group applied for the first-time certain standards and amendments, which are effective for annual periods beginning on or
after 1 January 2022. The Group has not early adopted any other standard, interpretation or amendment that has been issued
but is not yet effective.
The new and amended standards are:
IFRS 1, IFRS 9, IFRS 16,IFRS 3/IAS 37 and IAS 38
Except for IAS 38, these amendments had no material impact on the consolidated financial statements of the Group.
The implementation of IAS 38 entailed that BA Group have changed its accounting policy on configuration and customisation
costs related to cloud computing arrangements, also referred to as Software as a Service (SaaS). Previously, BA Group have
capitalised costs related to the implementation of cloud computing arrangements as intangible assets. Under the new policy,
implementation costs including costs to configure and customise the cloud provider´s application software recognised as
operating expenses when the services are received. The change in accounting principles related to SaaS have been incorporated
in the 2021 accounts and effect the consolidated and parent company figures as illustrated in below table together with a
Corrections of a prior period error in the Parent company as described in the following section:
2021
Consolidated
Parent company
In TDKK Reported Change
reg. SaaS
Restated Reported Change
reg. SaaS
Prior period
correction
Restated
EBITDA 162.123 -4.066 158.057
88.089 -266 0 87.823
Depreciations
-
46.484
+512
-
45.972
-
15.264
+502
0
-
14.762
Income from subsidiaries 0 0 0
25.123 -2.966 0 22.157
Profit before tax
98.412
-
3.554
94.858
90.250
-
2.730
0
87.520
Tax -24.413 772 -23.641
-16.251 -52 0 -16.303
Profit after tax
73.999
-
2.782
71.21
7
73.999
-
2.782
0
71.217
Intangible assets
85.414
-
5.889
79.525
47.786
-
2.099
0
45.687
Investment in subs. 0 0 0
471.387 -2.966 0 468.421
Deferred tax
88.447
1.286
89.733
35.536
+462
0
35.998
Inventories 0 0 0
503.884 0 -450.512 53.372
Total assets
1.378.143
-
4.603
1.375.540
1.529.933
-
4.60
3
-
450.512
1.074.818
Equity 01.01.2021
324.927
-
1.82
1
323.106
324.927
-
1.82
1
323.106
323.106
Equity 31.12.2021 337.444 -4.603 332.841
337.444 -4.603 332.841 332.841
22
The following new or amended IFRS Standards and Interpretations of relevance to the Group have been issued but not yet
adopted by the EU:
Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current and Non-current
Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statements 2: Disclosure of Accounting
Policies
Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting
Estimates
Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and liabilities arising from Singe Transactions
The new and amended Standards and Interpretations are not mandatory for the financial reporting for 2022. The Group expects
to adopt the new Standards and Interpretations when they become mandatory. It has been assessed that the implementation of
the new standards will not have any significant effect on the recognition and measurement of the balance sheet at 1 January
2023.
Correction of Prior Period Errors (Parent company)
During the period ending 31 December 2022, the parent company revised its assets and liabilities to correct an error related to
recognition of inventories in its subsidiaries as inventory in the parent company’s balance sheet with a corresponding increase in
Payables to related parties. The error resulted in an overstatement of the parent company’s assets with MDKK 451 as of 31
December 2021 (2020: MDKK 340 ) and an overstatement of the parent company’s total current liabilities and total liabilities of
MDKK 451 as of 31 December 2021 (2020: MDKK 340). Further, the error resulted in an understatement of both revenue and
cost of sales with MDKK 13 in 2022 (2021: MDKK 11), thus with a zero impact on the parent company’s profit for the year or
equity.
The comparative figures for 2021 and 2020 have been restated accordingly.
Basis of consolidation
The consolidated financial statements comprise Borg Automotive A/S and its subsidiaries at 31 December 2022.
Subsidiaries are entities controlled by BA Group. Control exists when the Group is exposed, or has rights, to variable returns from
its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the
Group controls an investee if, and only if, the Group has all of the following:
Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee)
Exposure, or rights, to variable returns from its involvement with the investee
The ability to use its power over the investee to affect its returns
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control
of the subsidiary.
The consolidated financial statements have been prepared by aggregating the financial statements of the parent company and
the individual subsidiaries prepared in accordance with the Group’s accounting policies. Intra-group income and expenses,
shareholdings, dividends, balances as well as realised and unrealised gains or losses on transactions between the consolidated
companies are eliminated. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are
included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control
the subsidiary.
Business combinations
Newly acquired or newly established companies are recognised in the consolidated financial statements from the date of
acquisition. Comparative figures are not adjusted to reflect acquisitions.
The purchase method is applied on acquisitions if the Parent Company gains control of the company acquired. Assets, liabilities
and contingent liabilities in companies acquired are measured at their fair value at the date of acquisition. Intangible assets are
recognised if they can be separated or if they arise from a contractual right and the fair value can be reliably measured. Deferred
tax on revaluations made is recognised.
Any excess of the consideration paid for the business over the fair value of the acquired assets, liabilities and contingent liabilities
is recognised as goodwill under intangible assets. In the event of uncertainty regarding measurement, goodwill may be adjusted
until 12 months after the acquisition. Goodwill is not amortised but is tested for impairment annually. The first impairment test is
performed before the end of the year of acquisition. On acquisition, goodwill is transferred to the cash-generating units that will
subsequently form the basis for future impairment tests.
Contingent consideration agreed in connection with company acquisitions and paid to the seller if certain conditions are met, are
recognised at fair value and considered part of the total consideration for acquiring the company. Changes in fair value of the
contingent consideration are recognised in the income statement.
23
Foreign currency translation
The Group’s consolidated financial statements are presented in Danish Kroner (DKK), which is also the Parent Company’s
functional currency. A functional currency is determined for each of the reporting entities in the Group. The functional currency is
the currency in the primary economic environment in which the reporting entity operates. Transactions in other currencies other
than the functional currency are considered transactions in foreign currencies.
On initial recognition, foreign currency transactions are translated applying the exchange rate at the transaction date. Receivables,
payables and other monetary items denominated in foreign currencies that have not been settled at the balance sheet date are
translated using the exchange rate at the balance sheet date. Exchange differences that arise between the exchange rate at the
transaction date and the exchange rate at the payment date, as well as the exchange rate at the balance sheet date are recognised
in the income statement as financial income or financial expenses.
Property, plant and equipment, intangible assets, inventories and other non-monetary assets that have been purchased in foreign
currencies are translated using historical exchange rates.
On consolidation of entities with functional currency different from Danish Kroner (DKK), the income statements are translated at
monthly average exchange rates prevailing at the dates of the transactions and the balance sheets are translated at the exchange
rate prevailing at the balance sheet date. The exchange differences arising on the translation are recognised in other
comprehensive income.
On disposal of a foreign operation, the component of other comprehensive related to that specific foreign operation is recognised
in the income statement.
Derivative financial instruments
The Group uses derivative financial instruments such as forward currency contracts to hedge its foreign currency risks (cash flow
hedges).
Derivative financial instruments are measured at fair value and recognised in the balance sheet under other receivables or other
payables, respectively. The fair value of derivative financial instruments is calculated based on current market data and
recognised valuation methods.
Changes in the fair value of derivative financial instruments that effectively hedge the fair value of a recognised asset or a
recognised liability are recognised in the income statement together with any changes in the value of the hedged asset or hedged
liability. Hedging of future cash flows under agreements are treated as hedging of the fair value of a recognised asset or a
recognised liability.
Changes in the part of the fair value of derivative financial instruments effectively hedging future cash flows are recognised in
other comprehensive income in the reserve for hedging transactions under equity. On realisation of the hedged transaction, any
gains or losses relating to such hedge transactions are transferred from other comprehensive income and recognised in the same
item as the hedged item.
For derivative financial instruments that do not qualify for hedge accounting, changes in fair value are recognised as interest
income or expenses and similar items in the income statement as they occur.
Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions
will be complied with. When the grans relates to an expense item, it is recognised as income on systematic basis over the periods
that the related costs, for which it is intended to compensate, are expensed. When the grant relates to and asset, it is recognised
as income in equal amounts over he expected useful life of the related asset.
When the Group receives grants of non-monetary assets, the asset and the grant are recorded at nominal amounts and released
to profit or loss over the expected useful life of the asset, based on the pattern of consumption of the benefits of the underlying
asset by equal annual instalments.
INCOME STATEMENT
Revenue
Revenue from contracts with customers comprises sales of finished goods and remanufactured products, added the market value
of cores and adjustment of core provisions. Revenue from the sale is recognised at the point in time when the control of products
is transferred to the customer, which is generally upon delivery. For contracts providing the customer with a right of return within
a specified period, the Group considers the timing of recognition.
Revenue from contracts with customers is measured at an amount that reflects the consideration to which the Group expects to
be entitled in exchange for those products. Amounts disclosed as net revenue exclude discounts, VAT and other duties.
24
The Group considers whether contracts include other promises that constitute separate performance obligations and to which a
portion of the transaction price needs to be allocated. In determining the transaction price, the Group considers the effects of
variable consideration. No element of financing is deemed present, as payment is generally received as cash - on delivery or up
to generally 60-90 days of credit.
Variable consideration:
The Group pays various discounts depending on the nature of the customer and business. Customer discounts comprise off-
invoice discounts, volume- and activity-related discounts. Off-invoice discounts arise from sales transactions where the customer
immediately receives a reduction in the sales price. This also includes cash discounts and incentives for early payments. Volume-
and activity-related discounts is a broad term covering incentives for customers to sustain business with the Group over a longer
time and may be related to a current campaign or a sales target measured in volumes or total value. Examples include discounts
paid as a lump sum, discounts for meeting all or certain sales targets or for exceeding targets, or progressive discounts offered in
step with increasing sales to a customer.
Cost of sales
Cost of sales comprises cost related to generating the revenue for the year. While trading companies recognise the costs of goods
sold, the manufacturing companies recognise production costs corresponding to the year’s revenue, including direct and indirect
costs for raw materials and consumables, wages and salaries, depreciation on leasing assets and on minor rent and leasing
arrangements, amortisation and impairment of intangible assets, depreciation and impairment of production buildings and
equipment and impairment of inventory.
Cost of sales also includes costs and expenses relating to the operation, administration and management of the production sites.
Additionally, is included costs for research and product development that do not meet the criteria for capitalization, as well as
amortisation and impairment of capitalized product development costs.
Distribution costs
Distribution costs comprise expenses incurred in connection with the distribution of goods sold during the year and in connection
with sales campaigns, etc. launched during the year under review, including cost of sales and logistics staff, advertising and
exhibition costs, as well as depreciation/amortisation and impairment losses.
Administrative expenses
Administrative expenses comprise expenses incurred during the year for management and administration, including expenses
for administrative staff, office premises and office expenses, and depreciation and impairment losses. Administrative expenses
also comprise write-downs on receivables.
Employee benefits
Executive Management and selected Key Management in BA Group are covered by the parent company Schouw & Co.’s share
option programme. The costs related to the programme are calculated according to “Black & Scholes” and are expensed as staff
costs linearly over the period of the option and settled to the parent company.
Other operating income and expenses
Other operating income and expenses comprise items of a secondary nature relative to the companies’ primary activities and
consist of the following:
Gains and losses on disposal of intangible assets and property, plant and equipment and lease assets.
Compensation from external parties for e.g. claims or insurance
Income from rental of facilities to external parties
Profit or loss in subsidiaries (Parent company)
The proportionate share of the profit or loss from individual subsidiaries after tax and after elimination of the proportionate
share of intra-group gains or losses is recognised in the income statement.
Financial income and expenses
Financial income comprises interest income and expenses including interest to group enterprises, net capital gains or losses on
securities, payables and transactions in foreign currencies, amortisation of financial assets, interests related to leases as well as
tax relief or surcharge under the Danish Tax Prepayment Scheme etc.
25
Tax for the year
Tax for the year comprise current tax including joint taxation contribution and deferred tax for the year. Tax relating to the result
for the year is recognised in the income statement, while tax expenses or income relating to changes in equity is recognised in
other comprehensive income.
BALANCE SHEET
Completed development projects
Completed development projects comprise specific projects related to the development of new products and processes and are
recognised as intangible assets when they are clearly defined, identifiable, and for which technical feasibility, sufficient resources
and a potential future market or application in the enterprise can be demonstrated. In addition, it is the intention with these
projects to manufacture, market or use the project for future commercial purposes. This applies if cost can be measured reliably
and sufficient certainty exists that future earnings or the net selling price can cover production costs, distribution costs, and
administration costs as well as research and development costs. Within BA Group this is underpinned by a gate process, where
these judgements are made at specific gates. Other development costs which does not fulfil the criteria for capitalization are
recognised in the income statement and incurred as research and development costs under cost of sales.
Development costs comprise salaries, external costs, amortisation and other costs attributable to the projects. Following
completion of the development work, development projects are amortised on a straight-line basis over their estimated useful
lives. The amortisation period is three to five years. The basis of amortisation is calculated net of any impairment losses. The
projects are measured at cost less accumulated amortisation and impairment losses.
IT-projects
IT projects comprises internally developed IT solutions and software for the purpose of supporting business operations.
Development costs comprise salaries, external costs, amortisation and other costs attributable to the projects. Following
completion of the development work, development projects are amortised on a straight-line basis over their estimated useful
lives. The amortisation period is three to five years. The basis of amortisation is calculated net of any impairment losses. The
projects are measured at cost less accumulated amortisation and impairment losses.
Other intangible assets
Other intangible assets comprise customers, know-how and IT licenses.
The cost of other intangible assets acquired from an external party are capitalized at cost at the date of acquisition. Following
initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses.
Other intangible assets are amortised on a straight-line basis over the expected useful lives of the assets which are as follows:
Customer relations: 10-15 years
Brands: 3-20 years
Know-how: 10-15 years
Other intangible assets: 1-10 years
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are recognised in the statement of profit or loss when the asset is
derecognised.
Intangible assets are assessed for impairment whenever there is an indication that the intangible asset may be impaired. The
amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end
of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits
embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in
accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit or
loss in the expense category that is consistent with the function of the intangible assets.
Property, plant and equipment
Land and buildings, plant and machinery as well as other fixtures, tools and equipment are measured at cost less accumulated
depreciation and impairment.
Cost comprises the acquisition price and any costs directly attributable to the acquisition and preparation of the asset until the
time when it is ready to be put into operation. The total cost of an asset is divided into separate components which are depreciated
separately if their useful lives differ.
26
Subsequent costs, such as the cost of replacing components of property, plant and equipment, are included in the asset´s
carrying amount when deemed likely that it will result in economic benefit. The replaced components are no longer recognised in
the balance sheet and the carrying amount is transferred to the income statement. All other ordinary repair and maintenance
costs are recognised in the income statement when incurred.
Property, plant and equipment are depreciated on a straight-line basis over the expected useful lives of the asset/components,
which are expected to be as follows:
Buildings: 5-40 years
Plant and machinery: 5-18 years
Other fixtures and fittings, tools and equipment: 3-18 years
Land is not depreciated
The basis for depreciations are calculated with due considerations to the asset´s scrap value, useful life and reduced by any
impairment losses. The residual value is determined at the acquisition date and reassessed annually and adjusted prospectively,
if appropriate.
In case of changes to the depreciation period or residual value the effect on depreciations going forward is recognised as a change
in accounting estimates.
Depreciation are recognised in the income statement as production costs, distribution costs or administrative expenses.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial
period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are
expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection
with the borrowing of funds. Usually borrowing costs do not exist.
Lease assets
Lease assets are “right-of-use-assets” arising from lease agreements. Lease assets are initially measured at cost comprising the
following:
the amount of the initial measurement of lease liability
any lease payments made at or before the commencement date less any lease incentives received
any initial direct costs
restoration costs
The lease assets are depreciated on a straight-line basis over the shorter period of the assets useful life and the lease term in the
contract. The lease assets can be adjusted due to modifications to the lease agreement or reassessment of the lease term.
The depreciation periods are as follows:
Property: 1-7 years
Cars: 1-3 years
Production equipment: 3-5 years
Other lease assets: 3-5 years
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an
expense in the income statement. Short-term leases are leases with a term of 12 month or less, while low value assets comprise
assets with a value below TDKK 75.
The Group sublets a share of a leased property which is classified as financial leasing, “Right-of-use-assets”. The future
expected income from this sublet is accounted for in assets as a receivables, non-current and current respectively.
Investments in subsidiaries (Parent company)
Investments in subsidiaries are, at first recognition measured at cost and subsequently at the proportionate share of the
companies' net asset values calculated in accordance with the parent company’s accounting policies with the deduction or
addition of unrealised intra-group gains or losses and with the addition or deduction of goodwill calculated according to the
acquisition method.
Investments in subsidiaries with negative net asset values are measured at cost at DKK 0 (nil). If the parent company has a legal
or contractual obligation to support a provision is recognised.
27
Net revaluation of investments in subsidiaries is recognised in the reserve for net revaluation under equity according to the equity
method to the extent that the carrying amount exceeds cost.
Subsidiaries acquired or established during the year are initially recognised in the financial statement from the date of acquisition,
while sold or liquidated companies are recognised until the date of disposal.
Impairment of non-current assets
Deferred tax assets are assessed on a yearly basis and are only recognised in case it is deemed likely that they will be utilized.
The carrying amount of development projects in progress is tested for impairment at least annually, and where the carrying
amount exceeds the net present value of the future net cash flows expected to be generated by the development project, the
project is written down to its recoverable amount in the income statement. Finished development projects are tested for
impairment if there is indication of impairment from the annual review.
The carrying amount of other non-current assets are tested annually to determine whether there is any indication of impairment.
If such an amount exists, the recoverable amount of the assets is calculated. The recoverable amount is the higher of the fair
value of the asset less expected costs to sell and the value in use. For the purpose of assessing impairment, assets are grouped
at the lowest levels for which there are separately identifiable cash flows (cash-generating units).
A write-down is recognised when the carrying amount of an asset or a cash-generating unit exceeds the recoverable amount of
the asset or the cash-generating unit. Write-downs are recognised in the income statement as production, distribution or
administration expenses.
Inventories
Inventories are measured at cost in accordance with the FIFO. Where the net realisable is lower than the cost, inventories are
written down to this lower value. The net realisable value of inventories is calculated as the estimated selling price less completion
costs and costs incurred to execute sale and is determined in consideration of marketability, obsolescence and movements in the
expected selling price.
The cost of goods for resale, raw materials and consumables comprise the purchase price and delivery costs.
The cost of finished goods and work in progress comprise of raw materials, consumables, direct labour and indirect production
costs, based on a normal operating activity. Indirect production costs comprise indirect materials and labour as well as
maintenance of and depreciation and impairment of the relating to machines, factory buildings and equipment used in the
manufacturing process as well as costs of factory management and administration. Financing costs are not included in cost.
Provision related to obsolescence is calculated based on 12-months sales forecast and is adjusted when sales forecast and stock
volumes changes.
Receivables
Receivables comprises of trade receivables, receivables from group companies, and other receivables. Receivables are
recognized initially at fair value and subsequently measured at amortized cost less impairment losses.
For trade receivables, BA Group applies the simplified approach related to impairment assessment, which permits the use of
lifetime Expected Credit Loss model (ECL). The ECL model involves a three-stage approach under which financial assets move
through the stages as their credit quality changes. The stages determine how impairment losses are measured and the effective
interest is applied. Provisions are determined based on grouping of trade receivables sharing the same credit risk characteristics
and days past due.
Regarding group intercompany loans, impairment losses will be recognized based on 12-month or lifetime ECL depending on
whether a significant increase in credit risk has arisen since initial recognition.
Corporate income tax
Current tax consists of tax payable or receivable including joint taxation contribution and is recognised in the balance sheet as
calculated tax on the taxable income for the year, adjusted for tax on prior years’ taxable income and for tax paid under the on-
account scheme. Receivables and payables regarding the joint taxation is presented separately in the balance sheet.
Borg Automotive A/S is taxed jointly with its parent company and other Danish subsidiaries. The current Danish income tax liability
is allocated among the companies of the tax pool in proportion to their taxable income. Companies that utilize tax losses from
other companies pay a joint contribution to the parent company at an amount corresponding to the tax value of the tax losses
utilized. Companies whose tax losses are utilized by other companies receive joint tax contribution from the parent company
corresponding to the tax value of the utilised losses (full absorption). The jointly taxed companies pay tax under the Danish on-
account tax scheme.
28
Prepayments
Prepayments include expenses paid in respect of subsequent financial years and are measured at cost.
Cash
Cash comprises cash in hand and short-term bank deposits.
SHAREHOLDERS EQUITY
Dividend
Dividend is recognised as a liability at the time of adoption by the shareholders at the annual general meeting (the date of
declaration). Dividends expected to be declared in respect of the year are stated as a separate line item under equity.
Hedge transaction reserve
The hedge transaction reserve contains the accumulated net change in the fair value of hedging transactions that meet the criteria
for hedging future cash flows and for which the hedged transaction has yet to be realised.
The hedge transaction reserve is dissolved, when the hedged transaction is realised, if the hedged cash flow are no longer
expected realised, or if the hedge is no longer effective.
Reserve for development projects (Parent company)
The reserve for development costs comprise recognized development costs reduced by amortizations and taxes. The reserve
cannot be used to distribute dividend or cover losses. The reserve will be reduced or dissolved if the recognised development
costs are no longer part of the Company´s operations by a transfer directly to the distributable reserves under equity.
Exchange adjustment reserve
The exchange adjustment reserve comprises exchange differences arising on the translation of the financial statements of foreign
enterprises from their functional currencies into Danish kroner including exchange differences on financial instruments
considered to be a part of the net investment or as hedging of the net investment. On realisation, accumulated value adjustments
are taken from equity to financial income and expenses in the income statement.
The exchange adjustment reserve is dissolved upon disposal of the subsidiary, or if the conditions for efficient hedging is no longer
present.
Net revaluation reserve (Parent company)
Net revaluation of investments in subsidiaries are recognised at cost in the reserve for net revaluation according to the equity
method. The reserve cannot be recognised at a negative amount. The reserve is dissolved upon disposal of the subsidiary.
Provisions
Provisions relates to warranty commitments which recognized when, as a consequence of an event occurring before or at the
balance sheet date, the Group has a legal or constructive obligation, the settlement of which is likely to result in an outflow from
the Group of economic benefit.
Financial liabilities
Debt to credit institutions is recognised at the raising of a loan at fair value less transaction costs. In subsequent periods, financial
liabilities are measured at amortised cost, applying the “effective interest rate method”, to the s effect that the difference between
the proceeds and the nominal value is recognised in the income statement under financial expenses over the term of the loan. In
addition, the capitalised lease liability is recognised under financial liabilities.
Other liabilities
Other liabilities including core liability (customer rebates) are measured at net realisable value, which normally will be equal to
nominal value.
Contingent consideration agreed in connection with company acquisitions and paid to the seller if certain conditions are met,
are recognized at fair value and considered part of the total consideration for acquiring the company. The liability is determined
by discounting the expected payments, taking into account the probability of the balance of the purchase price to be paid. The
pre-tax discount rate used reflects the general level of interest rates and the specific risk related to the earn-out. The differences
for the financial year In the discount elements are recognized in financial expenses. Changes in the fair value of the earn out
which may not be attributed to the discount element of the earn out is recognised in profit or loss.
29
Deferred tax
Deferred tax is measured using the balance sheet liability method on temporary differences between the carrying amount and
the tax base of assets and liabilities. However, no deferred tax is recognised on timing differences on non-deductible items for
which timing differences have arisen at the acquisition date without affecting the financial results or taxable income.
Deferred tax is measured based on the tax rules and rates in the respective countries that will apply under the legislation in force
on the balance sheet date when the deferred tax asset is expected to crystallise as current tax. Changes in deferred tax resulting
from changes in tax rates are recognised in the income statement.
Deferred tax assets, including the tax base of tax loss carry-forwards, are recognised under other noncurrent assets at the
expected value of their utilisation, either as a set-off against tax on future income or as a set-off against deferred tax liabilities
within the same legal tax entity and jurisdiction. Deferred tax adjustments are made regarding eliminations of unrealised
intercompany gains and losses.
Deferred tax assets are reviewed annually and recognised only to the extent that it is probable that they will be utilized within the
period of five years.
Fair value measurement
Fair value measurements are based on the principal market. If no principal market exists, the measurement is based on the
most advantageous market, i.e. the market that maximizes the price of the asset or liability less transaction and/or
transportation costs.
All assets and liabilities which are measured at fair value, or whose fair value is disclosed, are classified based on the fair value
hierarchy, see below:
Level 1: Value in an active market for similar assets/liabilities
Level 2: Value based on recognized valuation methods based on observable market information
Level 3: Value based on recognised valuation methods and reasonable estimates (non-observable market information).
Cash flow statement
The cash flow statement shows cash flows for the year distributed on operating, investing and financing activities, net changes
for the year in cash as well as cash and cash equivalents at the beginning and end of the year.
Cash flows from operating activities are calculated according to the indirect method as the profit for the year before tax adjusted
for non-cash operating items, changes in working capital and income taxes paid.
Cash flows from investing activities comprise payments in connection with acquisition and divestment of companies and
operation and the acquisition and disposal of intangible assets, property, plant and equipment.
Cash flows from financing activities comprise payments to and from shareholders and related expenses as well as the raising of
loans, re-payments of interest-bearing debt and repayment of lease liabilities.
2. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of the Group’s consolidated financial statements requires Management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures,
and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that
require a material adjustment to the carrying amount of assets or liabilities affected in future periods. Management continuously
reassesses these estimates and judgements based on several factors in the given circumstances. The following accounting
estimates are considered significant for the financial reporting:
Revenue
Offset in revenue are amounts related to the value of cores when these are later returned to BA Group from the external
customers, as well as an estimate related to the share of outstanding repayment obligations which are not expected to become
an obligation based on the historical rate of return rates from the external customers.
Reference is made to further details of the repayment obligation and value of cores in note 24.
30
Acquisitions
Acquisitions are accounted for using the purchase method, according to which the acquired enterprise’s identifiable assets,
liabilities and contingent liabilities are recognised in the balance sheet at fair value. The principal assets are generally goodwill,
property, plant and equipment, intangible assets and inventories and any tax thereon. As there is generally no efficient market for
the individual assets, the valuation of the respective assets are generally based on significant accounting estimates. See the note
17, “Acquisitions”.
Inventories
The uncertainty related to inventories of cores cover both the assessment of core market prices and the valuation related to cores
considered to be obsolete or lack of marketability.
Cores repurchased from customers for remanufacturing are valued based on the historical external purchase prices at the
production facilities. The uncertainty related to the core market price is the fact that the historical prices, though being the best
indicator available, are not necessarily equal to the price development in the market.
Goods considered to be obsolete or to have impaired marketability are written down to net realisable value. The assumption
applied regards to the valuation of cores on inventory relates to the principle applied that cores on stock for more than 1 years
expected sales are considered obsolete and thus written down to the scrap price.
Core liability
The core liability is composed of the core charge (deposit) paid be the customer upon purchase of a unit which is returned to
the customer conditional on and at the same rate as return of the used units (cores). The core charge is offset by the expected
value of the returned cores and the expected core return rate, which constitutes the elements of the core liability. The
uncertainty related to the core liability therefore covers both the estimation of the expected core return rate of cores as well as
the value of the outstanding cores.
Reference is made to further details of the repayment obligation and value of cores in note 24.
Deferred tax assets
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against
which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets
that can be recognised, based upon the likely timing and the level of future taxable profits, together with future tax planning
strategies.
A part of the deferred tax assets are tax losses carried forward, which relate to the subsidiary in UK and in France. The tax loss
carried forward do not expire and they may not be used to offset taxable income elsewhere in the Group. The tax value of tax
losses carried forward has been recognised, as it has been considered sufficiently probably that the losses will be utilised within
five years.
Further details on taxes are disclosed in Note 18.
3
REVENUE
2022 2021 2022 2021
Denmark
88.449
82.978
54.709
67.329
Europe, other than Denmark
1.726.248
1.285.380
1.027.446
914.913
Asia
624
0
0
0
Total revenue
1.815.321 1.368.358 1.082.155 982.242
Vital
905.970
634.604
344.331
336.442
Less vital
48.333
32.623
15.623
18.399
Non vital
861.018
701.131
722.201
627.401
Total revenue
1.815.321 1.368.358 1.082.155 982.242
4
COST OF SALES
2022 2021 2022 2021
Cost of goods sold
946.451 692.054 886.830 531.163
Inventory impairments
9.086 28.937 294 1.584
Reversed inventory impairments
-3.595 -32.446 -627 -240
Vital products relates to the control, steering or stopping of the vehicle when driving, less vital products are linked to the performance
of the car, while non vital products have no influence on the vehicle capabilities to steer nor break, but to wether the engine can start.
CONSOLIDATED PARENT COMPANY
31
5
STAFF COST
2022 2021 2022 2021
Wages and salaries
334.844 271.656 53.482 46.590
Defined contribution pension plans
7.059 5.939 5.151 4.538
Other social security costs
49.461 40.570 845 816
Share-based payment
3.286 2.485 2.932 2.297
Total staff costs
394.650 320.650 62.410 54.241
Staff costs are recognised as follows:
Cost of sales
237.696 211.952 9.298 8.778
Distribution
114.277 80.436 28.778 26.167
Administration
42.677 28.452 24.334 19.296
Development projects
0 0 0 0
Staff costs recognised in the income statement
394.650 320.840 62.410 54.241
Average number of employees
Remuneration to the Board of Directors, Executive Management and Key Management
2022 2021 2022 2021
Board of Directors and Executive Management
5.961 5.266 5.961 5.266
Remuneration to Key Management Personnel (Group Directors) 2022 2021
Salaries
13.604 10.659
Pensions
950 711
Short term-incentive plans
3.285 2.485
Total Remuneration
17.839 13.855
Headcount of Group Directors at year-end
6 5
With reference to the Danish Financial Statements Act Paragraph 98b, section 3 remuneration to the Key Management have not been
disclosed separately for the Parent company to ensure that remuneration for one single member is not disclosed.
CONSOLIDATED
Remuneration to Key Management Personnel as in accordance with IAS 1, comprise the Group Directors and covers Executive
Management and Key Management.
CONSOLIDATED PARENT COMPANY
CONSOLIDATED PARENT COMPANY
32
5
STAFF COST (Continued)
Share-based payment: Share option programme
Outstanding share options
Executive
Management Others Total
Granted in 2018
10.000
18.000
28.000
Lapsed (from 2018 grant)
0
-2.167
-2.167
Granted in 2019
10.000
18.000
28.000
Lapsed (from 2019 grant)
0
-4.167
-4.167
Total outstanding options at 31 December 2019
20.000 29.666 49.666
Granted in 2020
12.000
16.000
28.000
Lapsed (from 2018 grant)
0
-3.833
-3.833
Lapsed (from 2019 grant)
0
-1.833
-1.833
Total outstanding options at 31 December 2020
32.000 40.000 72.000
Granted in 2021
20.000
26.000
46.000
Total outstanding options at 31 December 2021
52.000 66.000 118.000
Lapsed from 2018 grant
-10.000
-12.000
-22.000
Granted in 2022
20.000
28.000
48.000
Total outstanding options at 31 December 2022
62.000 82.000 144.000
The assumptions for determining the fair value of unexercised share options at the date of allocation as follows:
On the date of allocation:
2022 grant 2021 grant 2020 grant
2019 grant
2018 grant
Expected volatility 24,82% 31,58% 22,21% 29,23% 21,10%
Expected option life 49 mth. 49 mth. 48 mth. 48 mth. 48 mth.
Expected dividend per share 14 DKK 14 DKK 13 DKK 13 DKK 12 DKK
Risk free interest rate -0,17% -0,54% -0,97% -0,52% -0,38%
Other information on option programme:
Exercise price in DKK (1) 527,07 678,19 528,40 574,35 705,58
Fair value in DKK per option (2) 68,35 125,37 44,10 71,47 58,51
Total fair value in '000 (2) 3.281 5.767 4.094 3.215 1.511
Can be exercised from March 2025 March 2024 March 2023 March 2022 March 2021
Can be exercised until March 2026 March 2025 March 2024 March 2023
March 2022
The expected volatility is calculated as 12 months' historical volatility based on average share prices. If the option holders have not
exercised their options at the end of the specified period, the options will lapse without any compensation to the holders. Exercise of
the share options is contingent to the holder being in continuing employment during the above-mentioned periods. If the share option
holder resigns before the vesting date, the holder may in some cases have a right to exercise the share option early during a four-week
period following the next interim report from Schouw & Co. In the event of early exercise, the number of options will be reduced
proportionally.
(2) At the date of allocation
(1) On exercise after 4 years (at the latest possible moments)
Management and Senior Managers in the Group are covered by the parent company Schouw & Co.´s share option programme. The
programme entitles participants to acquire shares in Aktieselskabet Schouw & Co. at a price based on the market price at the allocation
date (2022: DKK 518,00) plus a calculated rate (2022: 2%) from the allocation date to the date of exercise. The exercise price is
adjusted less ordinary dividends, which, however, cannot exceed the accrued premium. The costs related to the programme are
calculated according to “Black & Scholes” and are expensed as staff costs linearly over the period of the option and settled to the
parent company.
33
6 FEES TO AUDITORS APPOINTED BY THE GENERAL MEETING 2022 2021
Audit fees
1.822 1.646
Non-audit fees
23
0
Fees for tax- and VAT-related services
151 68
Fees for other services
363 200
Total fees
2.359 1.914
7
RESEARCH AND DEVELOPMENT COSTS
2022 2021 2022 2021
Research & Development costs expensed and development costs
incurred are shown below:
Research and development costs incurred
9.923 8.936 11.059 9.686
Amortisation and impairment of recognised development costs
403 6.163 0 6.163
Research and development costs expensed and recognised in
the income statements
10.326 15.099 11.059 15.849
8 DEPRECIATION, AMORTISATION AND IMPAIRMENT LOSSES 2022 2021 2022 2021
Amortisation of intangible assets
17.012 19.892 6.871 13.048
Depreciation of property plant and equipment
13.802 11.299 14 548
Depreciation of lease assets
17.105 14.827 2.456 1.166
Impairment of intangible assets
5.500 0 0 0
Impairment of property plant and equipment
111 -46 0 0
Total depreciation, amortisation and impairment losses
53.530 45.972 9.341 14.762
Depreciation/amortisation and impairment is recognised in the
income statement as follows:
Cost of sales
18.637 22.488 526 6.422
Distribution
30.542 18.568 5.048 5.182
Administration
4.351 4.916 3.767 3.158
Total depreciation, amortisation and impairment losses
53.530 45.972 9.341 14.762
CONSOLIDATED
With reference to the Danish Financial Statements Act Paragraph 96, section 3 Fees to auditors appointed by the General Meeting
have only been provided for the Group.
CONSOLIDATED PARENT COMPANY
CONSOLIDATED PARENT COMPANY
34
9 OTHER OPERATING INCOME AND EXPENSES 2022 2021 2022 2021
Gains on the disposal of property, plant and equipment and
intangible assets
95 225 92 34
Charged to Group companies (i.e. management services)
0 0 22.942 21.001
Other operating income
1.043 1.356 99 330
Total other operating income
1.138 1.581 23.133 21.365
Losses on the disposal of property, plant and equipment and
intangible assets
53 158 0 0
Storage compensation
0 0 21.403 0
Other operating expenses
155 171 0 0
Total other operating expenses
208 329 21.403 0
10
FINANCIAL INCOME
2022 2021 2022 2021
Interest
371 112 0 0
Interests from group loans and cash pool
135 1 24.947 4.020
Interest income on financial assets measured at amortised cost
506 113 24.947 4.020
Fair value adjustments of hedgingtransactions transferred from
equity
208 0 0 0
Other interests
0 0 213 0
Exchange rate adjustments
1.316 1.841 0 1.131
Total financial income
2.030 1.954 25.160 5.151
11
FINANCIAL EXPENSES
2022 2021 2022 2021
Interest expense
397 595 20 112
Interests from leasing
1.131 886 47 20
Interests from group loans and cash pool
6.413 1.275 7.258 2.175
Interest expenses from financial liabilities measured at amortised
cost
7.941 2.756 7.325 2.307
Amortisation of earn out purchase obligation
15.419 9.458 15.419 9.458
Adjustment of Earn-out obligation
20.745 0 20.745 0
Exchange rate adjustments
9.447 6.967 3.393 1.084
Total financial expenses
53.552 19.181 46.882 12.849
CONSOLIDATED PARENT COMPANY
35
12 TAX ON PROFIT FOR THE YEAR
2022 2021 2022 2021
Tax for the year is composed as follows:
Tax on profit for the year
30.531
23.641
12.907
16.303
Tax on other comprehensive income
1.930
56
2.252
-93
Total tax
32.461 23.697 15.159 16.210
Tax on the profit for the year has been calculated as follows:
Current tax
32.886
46.727
11.791
29.398
Deferred tax
348
-23.134
-870
-13.645
Adjustment of prior-year tax charge
-2.703
48
1.986
550
Total tax recognised in the income statement
30.531 23.641 12.907 16.303
Effective tax rate:
Calculated 22.0% tax of the profit for the year
16.466 20.869 12.589 19.254
Adjustment of tax related to subsidiaries and PEs
1.510 -2.017 -10.749 -4.877
Non-deductible costs and non-taxable income
17.764 5.073 9.081 1.375
Adjustment of prior-year tax charge
-2.703 49 1.986 550
Adjustment of deferred tax asset regarding previous years
-2.506 -334 0 0
Recognised tax income
30.531 23.640 12.907 16.302
Effective tax rate
40,8%
24,9%
22,6%
18,6%
Tax recognised in other comprehensive income:
2022
Before tax Tax After tax
Exchange rate adjustment of foreign subsidiaries 7.572 0 7.572
Value adjustment of hedging instruments for the year -18.004 3.962 -14.042
Hedging instruments transferred to cost of sales 9.023 -1.986 7.037
Hedging instruments transferred to financials 208 -46 162
Tax on items recognised in other comprehensive income -1.201 1.930 729
2021
Before tax Tax After tax
Exchange rate adjustment of foreign subsidiaries 1.681 0 1.681
Value adjustment of hedging instruments for the year -3.334 734 -2.600
Hedging instruments transferred to cost of sales 3.079 -678 2.401
Tax on items recognised in other comprehensive income 1.426 56 1.482
2022
Before tax Tax After tax
Exchange rate adjustment of foreign subsidiaries 7.572 0 7.572
Value adjustment of hedging instruments for the year -8.681 1.910 -6.771
Hedging instruments transferred to financials 208 -46 162
Hedging instruments transferred to cost of sales -1.763 388 -1.375
Other comprehensive income from subsidiaries 1.141 0 1.141
Tax on items recognised in other comprehensive income -1.523 2.252 729
2021
Before tax Tax After tax
Exchange rate adjustment of foreign subsidiaries 1.681 0 1.681
Value adjustment of hedging instruments for the year -2.659 585 -2.074
Hedging instruments transferred to cost of sales 3.079 -678 2.401
Other comprehensive income from subsidiaries -675 149 -526
Tax on items recognised in other comprehensive income 1.426 56 1.482
CONSOLIDATED PARENT COMPANY
CONSOLIDATED
PARENT COMPANY
36
13
INTANGIBLE ASSETS
2022
Completed
development
projects
Development
projects in
progress
Customer
relations Brands
Know-
how
IT
projects
Other
intangible
assets Total
Cost at 1 January
18.490 839 22.164 35.500 27.189 18.588 1.487 124.257
Foreign exchange adjustment
0
0
-3
0
0
-44
-2
-49
Additions
0
3.703
0
0
0
237
0
3.940
Disposals
0
0
0
0
0
0
-23
-23
Transferred/reclassified
0
-1.085
0
0
0
1.331
876
1.122
Cost at 31 December
18.490 3.457 22.161 35.500 27.189 20.112 2.338 129.247
Amortisation and impairment at 1
January
18.182 0 2.217 5.917 2.719 14.339 1.358 44.732
Foreign exchange adjustment
0
0
0
0
0
-33
-1
-34
Impairment
0
0
0
5.500
0
0
0
5.500
Amortisation
308
0
2.187
9.083
2.719
2.651
64
17.012
Amortisation and impairment of
disposed assets
0 0 0 0 0 0 -24 -24
Amortisation and impairment at 31
December
18.490 0 4.404 20.500 5.438 16.957 1.397 67.186
Carrying amount at 31 December
0 3.457 17.757 15.000 21.751 3.155 941 62.061
Amortized over (years)
3 10-15 3-20 10-15 3-5 3-5
2021
Completed
development
projects
Development
projects in
progress
Customer
relations Brands
Know-
how
IT
projects
Other
intangible
assets Total
Cost at 1 January
18.490 1.242 22.167 0 27.189 19.739 1.398 90.225
Change in accounting principles
0 -334 0 0 0 -2.214 0 -2.548
Adjusted cost at 1 January
18.490 908 22.167 0 27.189 17.525 1.398 87.677
Foreign exchange adjustment
0 0 -3 0 0 -9 -1 -13
Additions
0 719 0 0 0 118 21 858
Additions on company acqusitions
0 0 0 35.500 0 166 0 35.666
Disposals
0 0 0 0 0 0 -85 -85
Transferred/reclassified
0 -788 0 0 0 788 154 154
Cost at 31 December
18.490 839 22.164 35.500 27.189 18.588 1.487 124.257
Amortisation and impairment at 1
January
12.027 0 0 0 0 11.761 1.287 25.075
Change in accounting principles
0 0 0 0 0 -213 0 -213
Adjusted amortisation and
impairment at 1 January
12.027 0 0 0 0 11.548 1.287 24.862
Foreign exchange adjustment
0 0 0 0 0 -7 -1 -8
Amortisation
6.169 0 2.217 5.917 2.719 2.798 72 19.892
Amortisation and impairment of
disposed assets
0 0 0 0 0 0 -14 -14
Transferred/reclassified
-14 0 0 0 0 0 14 0
Amortisation and impairment at 31
December
18.182 0 2.217 5.917 2.719 14.339 1.358 44.732
Carrying amount at 31 December
308 839 19.947 29.583 24.470 4.249 129 79.525
Amortized over (years)
3 10-15 3-20 10-15 3-5 1-3
Legal obligation at 31 December for
the purchase of property, plant and
equipment
0 0 0 0 0 1.594 0 1.594
CONSOLIDATED
Management have not identified issues, which indicate need for impairment regarding intangible assets.
37
13 INTANGIBLE ASSETS
(Continued)
2022
Completed
development
projects
Development
projects in
progress
Customer
relations Brands
Know-
how
IT
projects
Other
intangible
assets Total
Cost at 1 January
18.490 838 18.461 0 27.189 16.402 1.238 82.618
Additions
0
3.703
0
0
0
97
0
3.800
Disposals
0
0
-3.531
0
0
0
0
-3.531
Transferred/reclassified
0
-1.085
0
0
0
1.085
0
0
Cost at 31 December
18.490 3.456 14.930 0 27.189 17.584 1.238 82.887
Amortisation and impairment at 1
January
18.196 0 1.846 0 2.719 12.946 1.224 36.931
Amortisation
308
0
1.699
0
2.719
2.145
0
6.871
Transferred/reclassified
-14
0
0
0
0
0
14
0
Amortisation and impairment at 31
December
18.490 0 3.545 0 5.438 15.091 1.238 43.802
Carrying amount at 31 December
0 3.456 11.385 0 21.751 2.493 0 39.085
Amortized over (years)
3 10-15 10-15 3-5 3-5
2021
Completed
development
projects
Development
projects in
progress
Customer
relations Brands
Know-
how
IT
projects
Other
intangible
assets Total
Cost at 1 January
18.490 1.241 18.461 0 27.189 17.795 1.323 84.499
Change in accounting principles
0 -334 0 0 0 -2.214 0 -2.548
Adjusted cost at 1 January
18.490 907 18.461 0 27.189 15.581 1.323 81.951
Additions
0 719 0 0 0 33 0 752
Disposals
0 0 0 0 0 0 -85 -85
Transferred/reclassified
0 -788 0 0 0 788 0 0
Cost at 31 December
18.490 838 18.461 0 27.189 16.402 1.238 82.618
Amortisation and impairment at 1
January
12.027 0 0 0 0 10.845 1.238 24.110
Change in accounting principles
0 0 0 0 0 -213 0 -213
Adjusted amortisation and
impairment at 1 January
12.027 0 0 0 0 10.632 1.238 23.897
Amortisation
6.169 0 1.846 0 2.719 2.314 0 13.048
Amortisation and impairment of
disposed assets
0 0 0 0 0 0 -14 -14
Amortisation and impairment at 31
December
18.196 0 1.846 0 2.719 12.946 1.224 36.931
Carrying amount at 31 December
294 838 16.615 0 24.470 3.456 14 45.687
Amortized over (years) 3
10-15
10-15
3-5 3-5
PARENT COMPANY
Management have not identified issues, which indicate need for impairment regarding intangible assets.
38
14 PROPERTY, PLANT AND EQUIPMENT
2022
Land and
buildings
Plant and
machinery
Other fixtures,
tools and
equipment
Assets under
construction Total
Cost at 1 January
84.192 35.456 19.161 22.462 161.271
Foreign exchange adjustment
-1.135
-835
-314
-416
-2.700
Additions
1.281
3.692
3.989
41.980
50.942
Disposals
0
-114
-522
0
-636
Transferred/reclassified
6.612
14.957
7.155
-27.736
988
Cost at 31 December
90.950 53.156 29.469 36.290 209.865
Depreciation and impairment at 1 January
7.130 12.068 9.767 0 28.965
Foreign exchange adjustment
-153
-342
-205
0
-700
Impairment
0
0
0
111
111
Depreciation
3.364
5.381
5.057
0
13.802
Depreciation and impairment of disposed assets
0
-108
-146
0
-254
Transferred/reclassified
0
2.333
-223
0
2.110
Depreciation and impairment at 31 December
10.341 19.332 14.250 111 44.034
Carrying amount at 31 December
80.609 33.824 15.219 36.179 165.831
Depreciated over (years)
5-40
5-18
3-18
Legal obligation at 31 December for the purchase of
property, plant and equipment
26.556 219 820 27.596
Interest recogniased during the period
0
0
0
144
144
Average interest used
1,69%
2021
Land and
buildings
Plant and
machinery
Other fixtures,
tools and
equipment
Assets under
construction Total
Cost at 1 January
68.323 30.426 14.210 4.174 117.133
Foreign exchange adjustment
-716
73
-148
-42
-833
Additions
456
2.801
2.833
18.619
24.709
Additions on company acqusitions
29.785
2.347
2.606
0
34.738
Disposals
-13.656
-243
-340
-83
-14.322
Transferred to leased assets/reclassified
0
52
0
-206
-154
Cost at 31 December
84.192 35.456 19.161 22.462 161.271
Depreciation and impairment at 1 January
6.338 7.750 6.203 45 20.336
Foreign exchange adjustment
-47
11
-60
0
-96
Impairment
0
0
0
-46
-46
Depreciation
3.005
4.414
3.880
0
11.299
Depreciation and impairment of disposed assets
-2.166
-107
-256
0
-2.529
Transferred/reclassified
0
0
0
1
1
Depreciation and impairment at 31 December
7.130 12.068 9.767 0 28.965
Carrying amount at 31 December
77.062 23.388 9.394 22.462 132.306
Depreciated over (years)
5-40
5-18
3-18
Legal obligation at 31 December for the purchase of
property, plant and equipment
0 60 878 938
CONSOLIDATED
No changes have been made in accounting estimates regarding property, plant and equipment.
No interests has been recognised during the period.
Management have not identified issues, which indicate need for impairment regarding property, plant and equipment.
39
14
PROPERTY, PLANT AND EQUIPMENT
(Continued)
2022
Land and
buildings
Plant and
machinery
Other fixtures,
tools and
equipment
Assets under
construction Total
Cost at 1 January
0 39 109 1.263 1.411
Additions
0
0
0
19.363
19.363
Cost at 31 December
0 39 109 20.626 20.774
Depreciation and impairment at 1 January
0 39 78 0 117
Depreciation
0
0
14
0
14
Depreciation and impairment at 31 December
0 39 92 0 131
Carrying amount at 31 December
0 0 17 20.626 20.643
Depreciated over (years)
5
3-5
Legal obligation at 31 December for the purchase of
property, plant and equipment
26.176 0 0 0 26.176
Interest recogniased during the period
0
0
0
144
144
Average interest used
1,69%
2021
Land and
buildings
Plant and
machinery
Other fixtures,
tools and
equipment
Assets under
construction Total
Cost at 1 January
13.656 67 365 0 14.088
Additions
0 0 41 1.263 1.304
Transfer
-13.656
-28
-297
0
-13.981
Cost at 31 December
0 39 109 1.263 1.411
Depreciation and impairment at 1 January
1.655 58 263 0 1.976
Depreciation
511 6 32 0 549
Transfer
-2.166
-25
-217
0
-2.408
Depreciation and impairment at 31 December
0 39 78 0 117
Carrying amount at 31 December
0 0 31 1.263 1.294
Depreciated over (years)
5-30
5
3-10
PARENT COMPANY
No significant changes have been made in accounting estimates regarding property, plant and equipment.
Management have not identified issues, which indicate need for impairment regarding property, plant and equipment.
No interests has been recognised during the period.
40
15 LEASE ASSETS
2022
Buildings
Production
equipment Cars Other assets Total
Cost at 1 January
59.840 6.159 8.311 694 75.004
Foreign exchange adjustment
-1.385
-133
-32
0
-1.550
Additions
5.518
119
1.705
0
7.342
Disposals
0
-929
-1.065
0
-1.994
Cost at 31 December
63.973 5.216 8.919 694 78.802
Amortisation and impairment at 1 January
19.979 4.362 3.752 2 28.095
Foreign exchange adjustment
-717
-100
-20
1
-836
Amortisation
12.696
1.103
2.976
330
17.105
Amortisation and impairment of disposed assets
0
-932
-1.062
0
-1.994
Amortisation and impairment at 31 December
31.958 4.433 5.646 333 42.370
Carrying amount at 31 December
32.015 783 3.273 361 36.432
Depreciated over (years)
1-7
3
3
3-5
Legal obligation at 31 December for the purchase
of property, plant and equipment
0 0 300 0 300
2021
Buildings
Production
equipment Cars Other assets Total
Cost at 1 January
34.634 4.366 5.604 240 44.844
Foreign exchange adjustment
774
14
-30
0
758
Additions
16.452
1.887
2.611
64
21.014
Additions on company acqusitions
8.343
1.095
1.943
630
12.011
Disposals
-363
-1.203
-1.817
-240
-3.623
Cost at 31 December
59.840 6.159 8.311 694 75.004
Amortisation and impairment at 1 January
10.810 2.332 2.828 198 16.168
Foreign exchange adjustment
380 -17 -16 -3 344
Impairment
0 1.629 0 0 1.629
Amortisation
8.935
1.621
2.602
40
13.198
Amortisation and impairment of disposed assets
-146
-1.203
-1.662
-233
-3.244
Amortisation and impairment at 31 December
19.979 4.362 3.752 2 28.095
Carrying amount at 31 December
39.861 1.797 4.559 692 46.909
CONSOLIDATED
41
15
LEASE ASSETS (Continued)
2022
Buildings
Production
equipment Cars Other assets Total
Cost at 1 January
2.864 0 3.561 0 6.425
Additions
69
0
1.096
0
1.165
Cost at 31 December
2.933 0 4.657 0 7.590
Amortisation and impairment at 1 January
0 0 1.579 0 1.579
Amortisation
1.150
0
1.306
0
2.456
Amortisation and impairment at 31 December
1.150 0 2.885 0 4.035
Carrying amount at 31 December
1.783 0 1.772 0 3.555
Depreciated over (years)
2 3
Legal obligation at 31 December for the purchase
of property, plant and equipment
0 0 300 0 300
2021
Buildings
Production
equipment Cars Other assets Total
Cost at 1 January
0
0
2.672
0
2.672
Additions
2.864
0
1.997
0
4.861
Disposals
0
0
-1.108
0
-1.108
Adjusted cost at 1 January
2.864 0 3.561 0 6.425
Amortisation and impairment at 1 January
0 0 1.366 0 1.366
Amortisation
0
0
1.166
0
1.166
Amortisation and impairment of disposed assets
0
0
-953
0
-953
Amortisation and impairment at 31 December
0 0 1.579 0 1.579
Carrying amount at 31 December
2.864 0 1.982 0 4.846
LEASE LIABILITIES
Lease liabilities expiring within the following
periods from the balance sheet date:
2022 2021 2022 2021
Within 1 year
19.544
18.391
2.188
1.966
Between 1 and 5 years
31.982
42.707
1.087
2.527
After 5 years
2.145
6.136
0
0
Total lease liability, non-discounted 53.671 67.234 3.275 4.493
Lease liabilities are recognised in the balance sheet as follows:
Non-current liabilities
34.127
48.843
1.087
2.527
Current liabilities
19.544
18.391
2.188
1.966
Total lease liabilities 53.671 67.234 3.275 4.493
Repayment of lease debt
20.043
14.589
2.382
1.327
Recognised interests on lease contracts
1.131
886
47
20
Lease payments in the year 21.174 15.475 2.429 1.347
PARENT COMPANY
CONSOLIDATED PARENT COMPANY
42
15
LEASE ASSETS (Continued)
Lease agreements not recognised in the balance sheet
Service*
Small
value
assets
Short term
leases Total Service*
Small
value
assets
Short
term
leases Total
Due for payment within 1 year 301 31 0 332 321 117 1.286 1.724
Due for payment within >1-5 years 67 19 0 86 133 1.199 0 1.332
Due for payment after 5 years 0 0 0 0 0 0 0 0
Total commitments 368 50 0 418 454 1.316 1.286 3.056
Recognised in the income statement
489 366 0 855 462 72 710 1.244
Service*
Small
value
assets
Short term
leases Total Service*
Small
value
assets
Short
term
leases Total
Due for payment within 1 year 205 12 0 217 185 11 0 196
Due for payment within >1-5 years 2 2 0 4 10 14 0 24
Due for payment after 5 years 0 0 0 0 0 0 0 0
Total commitments 207 14 0 221 195 25 0 220
Recognised in the income statement
378 11 0 389 318 11 0 329
Other leasing information
0-1 years 1-5 years > 5 years
Total
cash flow
Sublease 1.705 7.430 1.006 10.141
Sale-and lease back 1.196 600 0 1.796
Total cash-flow impact 2.901 8.030 1.006 11.937
BA Group have subleased a part of a Right-of-use assets to an external party. The expected income related to the sublease amounts to a
total of TDKK 12.588, of which TDKK 1.648 have impacted cash flow in 2022.
Further BA Group and the parent company have, related to the property sold in Denmark in 2021, entered into a sale-and leaseback
agreement with the external buyer.
The sublease and sale-and lease back arrangement will impact the cash-flows as listed below:
*) Comment: The service (variable) element of lease contracts is the part of the lease commitment that are not included in the lease
obligation in the balance sheet.
CONSOLIDATED
PARENT COMPANY
2022 2021
43
16 INVESTMENTS IN SUBSIDIARIES
2022 2021
Cost at 1 January
268.441 114.063
Additions
22 154.378
Cost at 31 December
268.463 268.441
Adjustments at 1 January
199.980 223.588
Foreign exchange adjustments
-7.572 -1.681
Result before tax
66.469 29.495
Tax in subsidiaries
-17.624 -7.338
Share of profit/(loss) after tax for the year
48.845 22.157
Other value adjustments
-1.140 526
Dividends paid
-7.446 -44.610
Adjustments at 31 December
232.667 199.980
Carrying amount at 31 December
501.130 468.421
Name Registered Office
Ownership
interest
2022
Ownership
interest
2021
Borg Automotive Sp. z.o.o. 100% 100%
Borg Automotive UK Ltd. 100% 100%
Electro Steer UK Ltd. 100% 100%
Car Parts Industries Belgium SPRL 100% 100%
Borg Automotive Spain S.L.
Spain, Palermo
100% 100%
Borg Automotive Reman Spain S.L.
Spain, Palermo
100% 0%
SBS Automotive A/S 100% 100%
SBS Deutschland GmbH Germany, Eisenach 100% 100%
SBS France SAS France, Beauvais 100% 100%
All subsidiaries are Limited Liability Companies.
Poland, Zdunska Wola
UK, Birmingham
Belgium, Nivelles
Denmark, Støvring
UK, Birmingham
44
17 ACQUISITION OF BUSINESS
The assets and liabilitites recognised as a result of the acqusition are as follows: 2022 2021
Brands 0 35.500
Other intangible assets 0 166
Property, plant and equipmet 0 34.738
Lease assets 0 12.011
Financial asset 0 855
Inventories 0 160.025
Receivables 0 120.434
Tax asset 0 16.842
Cash 0 1.775
Interest-bearing debt 0 -52.052
Provisions 0 0
Lease liabilitites 0 -31.403
Trade payables 0 -101.684
Other liabilities 0 -39.430
Tax payable 0 -3.399
Net assets acquired
0 154.378
Goodwill 0 0
Acquisition cost
0 154.378
Contingent consideration 0 -154.378
Earn-out settled 7.811 7.801
Total cash acquisition costs
7.811 7.801
In 2022 the group has paid the remaining earn-out, MDKK 7.8 relating to the acquisition of Turbo Motor Inyección, S.L.U. (TMI) and
Turbos y componentes automoción, S.L.U. (TCA) in 2020.
The acqusition of SBS Group in 2021, entail a contingent consideration impacting other debt with MDKK 200 end of 2022. Reference is
made to note 24.
45
18 DEFERRED TAX
2022 2021 2022 2021
Defered tax at 1 January 89.538 49.376 35.998 22.260
Foreign exchange adjustment
-475 242 0 0
Addition on company acqusition
0 16.842 0 0
Deferred tax for the year recognised in profit for the year
-348 23.134 870 13.645
Deferred tax for the year recognised in equity -1.930 -56 -2.252 93
Deferred tax at 31 December, net
86.785 89.538 34.616 35.998
Deferred tax is recognised as follows in the balance sheet:
Deferred tax asset
87.890 89.733 34.616 35.998
Deferred tax liability
-1.105 -195 0 0
Net deferred tax at 31 December
86.785 89.538 34.616 35.998
Deferred tax pertains to:
Intangible assets
2.010 4.972 -5.677 -6.529
Property, plant and equipment
6.122 2.279 -12 88
Receivables
-2.231 0 0 0
Inventories
11.303 8.787 0 0
Other current assets
548 1.707 0 0
Equity
-1.585 345 -1.758 494
Provisions
1.925 1.988 0 0
Liabilities other than provisions
59.173 55.031 42.063 41.945
Recaptured losses
0 5.085 0 0
Tax losses
9.520 9.344 0 0
Total deferred tax (net liability)
86.785 89.538 34.616 35.998
Tax losses carried forward are recognised in the balance sheet only if they are expected to be utilised within a period of 5 (five) years.
This principle entails that an amount of MDKK 12,9 (2021: MDKK 14,0) related to the subsidiary Borg Automotive UK Ltd. and SBS
France SAS have not been recognised in the balance sheet. The unrecognised tax loss may be carried forward for an unlimited period.
CONSOLIDATED PARENT COMPANY
46
18 DEFERRED TAX
(Continued)
2022
1 Jan.
Foreign
exchange
adjustment
Additions on
acquisition
Recognised in
profit for the
year
Recognised in
equity 31 Dec.
Intangible assets
4.972 0 0 -2.962 0 2.010
Property, plant and equipment
2.279 1 0 3.842 0 6.122
Receivables
0 0 0 -2.231 0 -2.231
Inventories
8.787 -110 0 2.626 0 11.303
Other current assets
1.707 0 0 -1.159 0 548
Equity, Hedging
345 0 0 0 -1.930 -1.585
Provisions
1.988 -41 0 -22 0 1.925
Liabilities other than provisions
55.031 0 0 4.142 0 59.173
Recaptured losses
5.085 -19 0 -5.066 0 0
Tax losses
9.344 -306 0 482 0 9.520
Deferred tax at 31 December, net
89.538 -475 0 -348 -1.930 86.785
2021
1 Jan.
Foreign
exchange
adjustment
Additions on
acquisition
Recognised in
profit for the
year
Recognised in
equity 31 Dec.
Intangible assets
-8.581 -2 8.355 5.200 0 4.972
Property, plant and equipment
-1.697 0 2.111 1.865 0 2.279
Inventories
7.119 -81 1.007 742 0 8.787
Other current assets
0 0 -220 1.927 0 1.707
Equity, Hedging
401 0 0 0 -56 345
Provisions
1.629 -25 0 384 0 1.988
Liabilities other than provisions
45.440 -10 772 8.829 0 55.031
Recaptured losses
283 -5 0 4.807 0 5.085
Tax losses
4.782 365 4.817 -620 0 9.344
Deferred tax at 31 December, net
49.376 242 16.842 23.134 -56 89.538
2022
1 Jan.
Foreign
exchange
adjustment
Additions on
acquisition
Recognised in
profit for the
year
Recognised in
equity 31 Dec.
Intangible assets
-6.529 0 0 852 0 -5.677
Property, plant and equipment
88 0 0 -100 0 -12
Equity, Hedging
494 0 0 0 -2.252 -1.758
Liabilities other than provisions
41.945 0 0 118 0 42.063
Deferred tax at 31 December, net
35.998 0 0 870 -2.252 34.616
2021
1 Jan.
Foreign
exchange
adjustment
Additions on
acquisition
Recognised in
profit for the
year
Recognised in
equity 31 Dec.
Intangible assets
-8.582 0 0 2.053 0 -6.529
Property, plant and equipment
-1.717 0 0 1.805 0 88
Equity, Hedging
401 0 0 0 93 494
Liabilities other than provisions
32.158 0 0 9.787 0 41.945
Deferred tax at 31 December, net
22.260 0 0 13.645 93 35.998
PARENT COMPANY
CONSOLIDATED
47
19 INVENTORIES
2022 2021 2022 2021
Raw materials and consumables
362.848 295.669 14.727 12.730
Finished goods and goods for resale
591.172 418.508 41.715 40.642
Total inventories
954.020 714.177 56.442 53.372
Inventory values are presented at lower of cost and net realisable value.
Cost of inventories for which impairment losses have been
recognised
285.943 319.165 1.057 1.952
Accumulated impairment losses on inventories
-73.803
-69.480
-935
-1.749
Net sales value 212.140 249.685 122 203
20 CORPORATE INCOME TAX
2022 2021 2022 2021
Income tax payable at 1 Janaury
-18.258 2.564 -6.989 6.919
Exchange adjustments
-26 11 0 0
Current tax for the year
-32.886 -46.727 -11.791 -29.398
Adjustment related to prior years
3.363 -48 -1.986 -551
Additions on acquisitions
0 -3.399 0 0
Corporate income tax paid during the year
16.048 13.309 3 9
Joint taxation contribution paid during the year
21.155 16.032 25.875 16.032
Income tax at 31 December
-10.604 -18.258 5.112 -6.989
Which is distributed as follows:
Corporate income tax, receivable
3.214 2.423 0 0
Joint taxation contribution, receivable
5.118 0 5.118 0
Corporate income tax, payable
-16.867 -13.692 -6 0
Joint taxation contribution, payable
-2.069 -6.989 0 -6.989
Income tax at 31 December
-10.604 -18.258 5.112 -6.989
CONSOLIDATED PARENT COMPANY
During 2022, TDKK 10.025 (2021: TDKK 4.530) was recognised in inventory as write-down of inventory to net realisable value at
Group level. The adjustment of TDKK 5.495 (2021: TDKK 1.655 as an income) is recognised in cost of sales as a cost.
In the Parent Company, TDKK 5.495 (2021: TDKK 4.530) was recognised during 2022 as a cost for inventories carried at net
realisable value. This cost was recognised in cost sales (TDKK 1.490) or as a part of result in shares in subsidiaries (TDKK 4.005).
CONSOLIDATED PARENT COMPANY
48
21 RECEIVABLES AND PAYABLES WITH RELATED PARTIES
2022 2021 2022 2021
Receivables from related parties, interest-bearing, non-current
0 0 516.365 246.317
Receivables from related parties, interest-bearing, current
0 0 106.066 80.886
Receivables from related parties, current
0 0 1.789 2.648
Payables to related parties, interest-bearing, non-current
0 0 -71.137 -77.970
Payables to related parties, interest-bearing, current
-386.390 -90.541 -389.582 -140.100
Payables to related parties, current
0 0 -149.279 -29.343
-386.390 -90.541 14.222 82.438
Recognised as follows in assets:
Receivables from related parties, non-current 0 0 516.365 246.317
Receivables from related parties, current 0 0 107.855 83.534
Payables to related parties, non-current 0 0 -71.137 -77.970
Payables to related parties, current -386.390 -90.541 -538.861 -169.443
-386.390 -90.541 14.222 82.438
22 SHARE CAPITAL 2022 2021
The share capital consists of 5.000 shares of each DKK 200.
1.000
1.000
Aktieselskabet Schouw & Co.
Chr. Filtenborgs Plads 1, 8000 Aarhus C
Company registration number: 63 96 58 12
The following shareholder is registered to hold 100 % of the shares and voting capital of the company:
CONSOLIDATED PARENT COMPANY
The shares have not been divided into classes. During the last five years, no changes have been made to the share capital.
49
23 INTEREST-BEARING DEBT
2022 2021 2022 2021
Debt recognised in the balance sheet:
Credit institutions
383 0 0 0
Lease liabilities
34.127 48.843 1.087 2.527
Payables to related parties
0 0 71.137 77.970
Non-current interest bearing debt
34.510 48.843 72.224 80.497
Current portion of non-current interest-bearing debt
19.845 22.153 2.188 5.728
Payables to related parties
386.390 90.541 389.582 140.100
Current interest-bearing debt
406.235 112.694 391.770 145.828
Total interest-bearing debt
440.745 161.537 463.994 226.325
Fair-value of interest-bearing debt
440.745 161.537 463.994 226.325
Weighted average effective rate of interest for the year was (%)
1,9% 0,9% 1,6% 0,8%
Weighted average effective rate of interest for the balance sheet
date was (%)
2,6% 2,1% 3,1% 1,1%
Interest-bearing debt per currency:
DKK
289.699 139.549 262.530 114.452
EUR
112.520 -2.362 180.939 95.742
PLN 22.696 24.599 14.587 16.130
GBP
12.834 11.135 4.193 0
USD
2.995 -11.385 1.745 0
Other
1 1 0 1
Total interest-bearing debt 440.745 161.537 463.994 226.325
PARENT COMPANYCONSOLIDATED
BA Group net-borrowings are mainly in DKK, EUR, PLN and GBP with floating rates. The fair value of the floating rate loans are
approximately the carrying amounts.
50
23 INTEREST-BEARING DEBT (Continued)
Development in Net interest-bearing debt
2022
1 Jan.
Cash flow
Acquisi-
tions
Currency
exchange
movements Other
31 Dec.
Interest-bearing assets
Non-current receivables
72 0 0 0 0 72
Cash
23.689 -9.518 0 -22 0 14.149
Interest-bearing liabilities
Non-current credit institutions
0 -684 0 0 301 -383
Non-current lease liabilities
-48.843 0 0 616 14.100 -34.127
Current part of non-current mortgage debt
-3.762 3.762 0 0 0 0
Current part of non-current, credit institutions
0 0 0 0 -301 -301
Current part of non-current lease debt
-18.391 20.043 0 241 -21.437 -19.544
Current debt to group companies
-90.541 -297.844 0 1.995 0 -386.390
Net interest-bearing debt
-137.776 -284.241 0 2.830 -7.337 -426.524
2021
1 Jan.
Cash flow
Acquisi-
tions
Currency
exchange
movements Other
31 Dec.
Interest-bearing assets
Non-current receivables
73 0 0 -1 0 72
Receivables from related parties, current
24.308 -24.308 0 0 0 0
Cash
8.805 13.210 1.775 -98 -3 23.689
Interest-bearing liabilities
Non-current mortgage debt
-3.759 0 0 0 3.759 0
Non-current credit institutions
-4.368 4.368 0 0 0 0
Non-current lease liabilities
-19.547 0 -25.935 -336 -3.025 -48.843
Current part of non-current mortgage debt
-525 523 0 0 -3.760 -3.762
Current part of non-current, credit institutions
-901 903 0 11 -13 0
Current part of non-current lease debt
-9.359 14.589 -5.468 -144 -18.009 -18.391
Current debt to group companies
0 -91.842 0 1.317 -16 -90.541
Repayment of creditfacilities
0 52.052 -52.052 0 0 0
Net interest-bearing debt
-5.274 -30.505 -81.680 749 -21.067 -137.776
CONSOLIDATED
Non-cash changes
Non-cash changes
51
23 INTEREST-BEARING DEBT (Continued)
Development in Net interest-bearing debt
2022
1 Jan.
Cash flow
Acquisi-
tions
Currency
exchange
movements Other
31 Dec.
Interest-bearing assets
Non-current receivables from related parties 246.317 253.337 0 -6.689 23.400 516.365
Current receivables from related parties 80.886 25.196 0 -16 0 106.066
Cash 12.602 -11.797 0 -1 0 804
Interest-bearing liabilities
Non-current lease liabilities -2.527 0 0 0 1.440 -1.087
Non-current payables to related parties -77.969 7.868 0 -5 -1.031 -71.137
Current part of non-current mortgage debt -3.762 3.762 0 0 0 0
Current part of non-current lease debt -1.966 2.382 0 0 -2.604 -2.188
Current payables to related parties -140.100 -250.392 0 910 0 -389.582
Net interest-bearing debt 113.481 30.356 0 -5.801 21.205 159.241
2021
1 Jan.
Cash flow
Acquisi-
tions
Currency
exchange
movements Other
31 Dec.
Interest-bearing assets
Non-current receivables from related parties
193.618 47.802 0 1.405 3.492 246.317
Current receivables from related parties
16.747 64.139 0 0 0 80.886
Cash
6.254 6.412 0 -64 0 12.602
Interest-bearing liabilities
Non-current credit institutions -4.368 4.368 0 0 0 0
Non-current mortgage debt -3.759 0 0 0 3.759 0
Non-current lease liabilities -467 0 0 0 -2.060 -2.527
Non-current payables to related parties -126.992 49.897 0 94 -968 -77.969
Current part of non-current mortgage debt -525 523 0 0 -3.760 -3.762
Current part of non-current lease debt -618 1.327 0 0 -2.675 -1.966
Current payables to related parties 0 -139.824 0 -276 0 -140.100
Net interest-bearing debt
79.890 34.644 0 1.159 -2.212 113.481
PARENT COMPANY
Non-cash changes
Non-cash changes
52
24
OTHER PAYABLES
2022 2021 2022 2021
Core liability, specification below
70.105
70.191
55.609
54.810
Contingent considerations (Earn-out)
0
163.836
0
163.836
Employee related debt
4.508
7.810
0
2.631
Other payables
33
99
33
99
Other payables, non-current 74.646 241.936 55.642 221.376
Core liability, specification below
210.317
210.573
166.826
164.431
Employee related debt
33.343
36.628
7.040
9.634
Hedging instruments
788
2.248
0
2.248
Customer bonus
51.351
33.367
22.048
20.500
VAT
6.861
8.101
4.053
7.921
Contingent considerations (Earn-out)
200.000
7.807
200.000
0
Other payables
10.470
18.243
2.583
2.589
Other payables, current
513.130 316.967 402.550 207.323
Total other payables 587.776 558.903 458.192 428.699
CORE LIABILITY 2022 2021 2022 2021
BA Group has a repayment obligation in respect of deposits
received from customers conditional on and at the same rate as
customers return of used units (cores).
Repayment obligation at year-end
643.061
613.050
512.938
487.968
Estimated value of cores
-362.639 -332.286 -290.503 -268.727
Net core liability accrued for in the balance sheet
280.422 280.764 222.435 219.241
Contingent consideration
There is no maximum on the earn-out as it is based on normalised EBITDA. The adjustment of the contingent consideration has been
recognised as part of other financial expenses, c.f. note 11.
In 2022 the group has paid the remaining earn-out, MDKK 7.8 relating to the acquisition of Turbo Motor Inyección, S.L.U. (TMI) and
Turbos y componentes automoción, S.L.U. (TCA) in 2020.
CONSOLIDATED PARENT COMPANY
Contingent consideration relating to the acquisition of SBS Automotive A/S and subsidiaries (SBS Group) in July 2021 is classified as
financial debt and measured at fair value through profit and loss at 31 December 2022. The contingent consideration is categorised
as Level 3.
The purchase price is a contingent consideration determined as 5 times the SBS Group’s normalised operating profit before
depreciation and amortisation (EBITDA) in 2022 less interest-bearing debt and with usual adjustments for deviations in net working
capital from a normalised level. The most significant non-observable input in the fair value estimate of the purchase price is the
normalising items affecting EBITDA. Any positive or negative change in items impacting normalised EBITDA of MDKK 1 will thus have
a corresponding positive or negative impact of MDKK 5 in the fair value of the contingent consideration.
The fair value of the contingent consideration was estimated to MDKK 154 at the date of acquisition. On 31 December 2022, the fair
value of the contingent consideration has preliminary been determined to MDKK 200 based on different estimated purchase price
scenarios and applying probability weights to the different outcomes. Discounting with a 8.2 percent discount rate, has been applied
as payment is due in Q2 2023, to reflect the fair value at 31 December 2022. There are significant uncertainties related to the
normalisation issues and there is no final agreement between the parties on the final purchase price. The final agreement between
the parties is expected in the beginning of Q2 2023.
53
25 PROVISIONS 2022 2021 2022 2021
At 1 January
26.355
22.106
26.092
21.896
Utilized during the year
-16.460
-11.523
-15.357
-11.413
Additions
19.516
15.772
17.444
15.609
At 31 December
29.411 26.355 28.179 26.092
Recognised in the balance sheet as follows:
Non-current liabilities
12.952 12.617 12.822 12.492
Current liabilities
16.459 13.738 15.357 13.600
Provisions 31 December
29.411 26.355 28.179 26.092
Recognised in the income statement:
Cost of sales
19.516
15.772
17.444
15.609
Provisions recognised in the income statement
19.516 15.772 17.444 15.609
The historical return rate of warranty units in 2022 was on average 11-12 months, which is the same levels in 2021.
26 ADJUSTMENT FOR NON-CASH TRANSACTIONS
2022 2021 2022 2021
Purchase of intangible assets
-3.940 -858 -3.800 -752
Of which had not been paid at the balance sheet date/adjustment
for the year
72 214 72 214
Amount paid in relation to intangible assets
-3.868 -644 -3.728 -538
Purchase of property, plant and equipment
-50.942
-24.709
-19.363
-1.304
Of which had not been paid at the balance sheet date/adjustment
for the year
2.939 1204 2740 383
Amount paid in relation to purchase of property, plant and
equipment
-48.003 -23.505 -16.623 -921
Incurring financial liabilities
7.739
21.014
1.165
4.861
Of which lease debt
-7.055 -21.014 -1.165 -4.861
Proceeds from incurring financial liabilities
684 0 0 0
27 CHANGES IN WORKING CAPITAL
2022 2021 2022 2021
Change in inventories
-249.028 -188.218 -3.070 -686
Change in receivables
-14.845 -32.978 -8.386 -47.256
Change in trade payables and other payables
-23.527 141.638 114.992 22.068
Changes in working capital in total -287.400 -79.558 103.536 -25.874
CONSOLIDATED PARENT COMPANY
CONSOLIDATED PARENT COMPANY
CONSOLIDATED PARENT COMPANY
Provisions made comprise of warranty commitments related to goods sold, since the company has a contractual obligation to provide
warranties up to 24 months. Under these warranties the company either replace or repair goods which do not function according to
promised standards. The statement of expected expiry dates is based on historical data and previous experience related to the
typical receival or return of goods.
54
28 FINANCIAL ASSETS AND LIABILITIES
CONSOLIDATED
2022
Carrying
amount Fair value 0-1 years 1-5 years > 5 years
Total cash
flow
Trade receivables
235.803
235.803
235.803
0
0
235.803
Receivables from related parties
0
0
0
0
0
0
Other receivables
59.396
59.396
48.790
9.597
1.009
59.396
Cash in hand and in bank
14.149
14.149
14.149
0
0
14.149
Receivables measured at amortised cost 309.348 309.348 298.742 9.597 1.009 309.348
Derivative financial assets (level 2)
7.988 7.988 7.988 0 0 7.988
Financial derivaties used for hedging purposes 7.988 7.988 7.988 0 0 7.988
Total financial assets 317.336 317.336 306.730 9.597 1.009 317.336
Interest bearing debt
684
684
336
417
0
753
Lease liabilities
53.671
53.671
20.326
32.896
2.153
55.375
Payables to related parties
386.390
386.390
386.390
0
0
386.390
Trade payables
255.124
255.124
255.124
0
0
255.124
Other payables
386.988
386.988
312.342
74.646
0
386.988
Financial liabilities measured at amortised cost 1.082.857 1.082.857 974.518 107.959 2.153 1.084.630
Derivative financial liabilities (level 2)
788 788 788 0 0 788
Contingent consideration (level 3)
200.000 200.000 200.000 0 0 200.000
Financial derivaties used for hedging purposes 200.788 200.788 200.788 0 0 200.788
Total financial liabilities 1.283.645 1.283.645 1.175.306 107.959 2.153 1.285.418
Non-contractual items such as accruals and dererred income are excluded from other receivables and other debt.
The maturity profile of financial assets and liabilities is disclosed below according to category and calss distributed on period to
maturity. All interest payments on and repayments of financial asasets and liabilitites are based on contracts. None of the cash
flows are discounted.
At 31 December 2022 exchange rate contracts have been applied for hedging of cash flows covering future periods. The hedging
relates to BA Groups purchase of finished goods in USD as well as the internal trade of finished goods in PLN. All contracts are
expected to expire - and thus affect results - in the financial year 2023. Derivatives are disclosed in note 30.
Due to the short term nature of trade receivables and trade payables as well as other receivables and other debt falling due within
1 year, their carrying amount are considered to be approximately the same as their fair value.
The fair value of the contingent consideration arrangement (earn out) was estimated by applying the income approach. The fair
value estimates are based on a discount rate of 8.2% and assumed probability adjusted outcome of the earnout arrangement. This
is a level 3 fair value measurement. The earnout is recognised at MDKK 200 and is due for payment in the beginning of 2023.
55
28 FINANCIAL ASSETS AND LIABILITIES
CONSOLIDATED
2021
Carrying
amount Fair value 0-1 years 1-5 years > 5 years
Total cash
flow
Trade receivables
213.555
213.555
213.555
0
0
213.555
Receivables from related parties
0
0
0
0
0
0
Other receivables
66.709
66.709
54.276
9.447
2.986
66.709
Cash in hand and in bank
23.014
23.014
23.014
0
0
23.014
Receivables measured at amortised cost 303.278 303.278 290.845 9.447 2.986 303.278
Derivative financial assets (level 2)
675 675 675 0 0 675
Financial derivaties used for hedging purposes 675 675 675 0 0 675
Total financial assets 303.953 303.953 291.520 9.447 2.986 303.953
Interest bearing debt
3.762
3.762
3.794
0
0
3.794
Lease liabilities
67.234
67.234
19.229
44.006
6.201
69.436
Payables to related parties
90.541
90.541
90.541
0
0
90.541
Trade payables
273.028
273.028
273.028
0
0
273.028
Other payables
384.318
384.318
310.096
74.222
0
384.318
Financial liabilities measured at amortised cost 818.883 818.883 696.688 118.228 6.201 821.117
Derivative financial liabilities (level 2)
2.248 2.248 2.248 0 0 2.248
Contingent consideration (level 3)
163.836 163.836 0 163.836 0 163.836
Financial derivaties used for hedging purposes 166.084 166.084 2.248 163.836 0 166.084
Total financial liabilities 984.967 984.967 698.936 282.064 6.201 987.201
PARENT COMPANY
2022
Carrying
amount Fair value 0-1 years 1-5 years > 5 years
Total cash
flow
Trade receivables
125.831
125.831
125.831
0
0
125.831
Receivables from related parties
624.220
624.220
129.616
350.921
287.113
767.650
Other receivables
8.640
8.640
8.640
0
0
8.640
Cash in hand and in bank
804
804
804
0
0
804
Receivables measured at amortised cost 759.495 759.495 264.891 350.921 287.113 902.925
Derivative financial assets (level 2)
7.988 7.988 7.988 0 0 7.988
Financial derivaties used for hedging purposes 7.988 7.988 7.988 0 0 7.988
Total financial assets 767.483 767.483 272.879 350.921 287.113 910.913
Lease liabilities
3.275
3.275
2.214
1.093
0
3.307
Payables to related parties
460.719
460.719
389.582
3.307
73.076
465.965
Trade payables
21.476
21.476
21.476
0
0
21.476
Other payables
387.776
358.903
0
55.642
0
55.642
Financial liabilities measured at amortised cost 873.246 844.373 413.272 60.042 73.076 546.390
Contingent consideration (level 3)
200.000 200.000 0 0 0 0
Financial derivaties used for hedging purposes 200.000 200.000 0 0 0 0
Total financial liabilities 1.073.246 1.044.373 413.272 60.042 73.076 546.390
56
28
FINANCIAL ASSETS AND LIABILITIES
PARENT COMPANY
2021
Carrying
amount Fair value 0-1 years 1-5 years > 5 years
Total cash
flow
Trade receivables
121.282
121.282
121.282
0
0
121.282
Receivables from related parties
329.851
329.851
83.534
255.420
0
338.954
Other receivables
28
28
28
0
0
28
Cash in hand and in bank
12.602
12.602
12.602
0
0
12.602
Receivables measured at amortised cost 463.763 463.763 217.446 255.420 0 472.866
Derivative financial assets (level 2)
0 0 0 0 0 0
Financial derivaties used for hedging purposes 0 0 0 0 0 0
Total financial assets 463.763 463.763 217.446 255.420 0 472.866
Interest bearing debt
3.762
3.762
3.794
0
0
3.794
Lease liabilities
4.493
4.493
2.007
2.549
0
4.556
Payables to related parties
697.925
697.925
697.925
0
0
697.925
Trade payables
24.529
24.529
24.529
0
0
24.529
Other payables
259.793
259.793
204.599
57.441
0
262.040
Financial liabilities measured at amortised cost 990.502 990.502 932.854 59.990 0 992.844
Derivative financial liabilities (level 2)
2.247 2.247 2.247 0 0 2.247
Contingent consideration (level 3)
163.836 163.836 0 163.836 0 163.836
Financial derivaties used for hedging purposes 166.083 166.083 2.247 163.836 0 166.083
Total financial liabilities 1.156.585 1.156.585 935.101 223.826 0 1.158.927
57
29 FINANCIAL RISKS
GROUP RISK MANAGEMENT
RAW MATERIAL PRICE RISK
The raw material risk for the Group is considered medium and the potential impact high on both the Groups results and equity.
The following table shows the groups and parent companies sensitivity to changes in raw material prices of cores:
CONSOLIDATED
Change
2022
2021
Revenue +5% 32.386 29.007
Profit for the year/Equity +5% 18.876 16.052
The opposite effect will impact revenue and profit for the year/equity per a 5% decrease in the raw material prices.
PARENT COMPANY
Change 2022 2021
Revenue +5% 27.475 24.462
Profit for the year/Equity +5% 16.530 14.199
The opposite effect will impact revenue and profit for the year/equity per a 5% decrease in the raw material prices.
FOREIGN CURRENCY RISK
BA Group actively monitors and manages financial risks to which the Group is exposed through its operations, investments and
financing activities. The financial risk management covers all areas of the business such as raw material price risk, foreign
exchange risk, interest rate risk, credit risk, liquidity risk and the capital structure of the Group.
As a main rule, BA Group hedges significant foreign exchange risks regarding in- and out going payments in foreign currencies in
accordance with the Group hedging policy. The sensitivity analysis shows the impact on the income statement and equity from
likely changes in the exchange rates for the currencies where a risk is identified.
The raw material risk relates to the risk of changes in the market prices of raw materials, the cores, to which BA Group is
exposed. The development in raw material prices not only affect the direct cost of purchasing the cores for production, but also
the value of the net core liability to customers accounted for in the balance sheet. The COVID-19 pandemic and the close down of
the countries around Europe illustrated that the reduced free flow of cores and also the reduced quantities of finished goods from
China, increased the prices of available cores in the market. Further, the core market price is upon significant changes in the
metal scrap value since the beginning of the pandemic has also increased the core market prices in general. Usually the core
market prices are not impacted upon minor changes in the metal-scrap values. The disruption of the supply-chain as a
consequnese of the COVID-19 pandemic, entailed during 2022 a reduction of the general availability and prices of of cores in the
market due to the number of scrapped cars/vehichles being significantly lower than previous years, which can be directly
attributted to a redcution in the number of newly produced cars available.
A reduction in the core market price will result in a short term loss for the Group due to the change in the purchase obligation to
the customers, but will in the longer perspective reduce the cost price of the raw materials thus affecting the result positively.
The opposite is also applicable.
The potential impact on the financial results may be of a significant size, since the price change of the cores can not immediately
be transferred to the sales prices. The development of the prices in the unregulated core market are therefore monitered
continously and closely, since the timing of the core purchases are of the essence, both in regards to the required quantities and
prices. The skills and market knowledge of the core purchasers are thus very crucial to reduce this raw material price risk.
BA Group´s presentation currency is DKK, but a large part of the Groups activities and investments is dominated in other
currencies. The Group is with reference to the high intercompany trading of both cores and finished goods therefore exposed to
the exchange rate risk when trading in PLN, EUR and GBP respectively. Consequently there is an inherent risk of exchange rate
fluctuations impacting both profits and the financial posisition in DKK.
58
29
FINANCIAL RISKS
Currency
Securities
and cash/
equivalents Receivables Debt
Net position
before
hedging
Hedged by
financial
instruments
Net position
after hedging
EUR / DKK 5.817 407.210 -678.692 -265.665 0 -265.665
EUR / GBP
70
23.789
-2.997
20.862
0
20.862
EUR / PLN
229
5.962
-2.167
4.024
0
4.024
GBP / DKK
651
23.259
-6.136
17.774
0
17.774
GBP / EUR
0
8.610
0
8.610
0
8.610
PLN / DKK
1.094
394.800
-140.464
255.430
0
255.430
USD/ DKK
442
0
-44.046
-43.604
41.859
-1.745
USD/ EUR
0
0
-25.606
-25.606
0
-25.606
Currency
Securities
and cash/
equivalents Receivables Debt
Net position
before
hedging
Hedged by
financial
instruments
Net position
after hedging
EUR / DKK 5.191 280.471 -556.759 -271.097 0 -271.097
EUR / GBP
1.144
8.892
-2.957
7.079
0
7.079
EUR / PLN
0
3.638
-3.692
-54
0
-54
GBP / DKK
1.245
45.035
-10.527
35.753
0
35.753
PLN / DKK
1.218
105.638
-32.014
74.842
0
74.842
USD/ DKK
11.397
1
-42.054
-30.656
0
-30.656
USD/ EUR
0
0
-48.270
-48.270
0
-48.270
Sensitivity of currency risk
Change
2022
2021
PLN/DKK
+ 5%
-9.962
-2.919
GBP/DKK
+ 5%
-693
-1.394
USD/DKK
+ 5%
68
-445
EUR /GBP
+ 5%
-814
-276
USD /EUR
+ 5%
999
1.883
To measure currency risk in accordance with IFRS 7, sensitivity is calculated as the change in fair value of future cash flow from
financial instruments as a result of fluctuations in exchange rates at the Balance Sheet date. Below analysis includes the effect on
profit after tax on a 5% increase in the exchange rates, all other things being equal. A 5% decrease are expected to have a
corresponding inverse effect.
The foreign exchange risk is considered low, but the potential impact on profits /(losses) and financial position are considered
medium.
CONSOLIDATED
The group's foreign exchange risks recognised in the balance sheet at 31 December 2021:
The Group's significant foreign exchange risks recognised in the balance sheet at 31 December 2022:
Below for both BA Group and the parent company is illustrated the most significant foreign exchange exposures at year-end:
The largest currency risk exposures for the BA Group and the Parent Company is the purchase of goods from the subsidiary in
Poland in PLN as well as the purchase of finished goods from China in USD by SBS. As a safeguard to this exposure a “rolling”
hedge strategy is applied by the Group Management, where the expected requirements of PLN and USD on a rolling 12 months
basis is hedged.
EUR cash flows are not hedged due to the Danish fixed exchange rate policy against EUR, while the GBP exposure relates mainly
to internal sales of a more limited size and are therefore not hedged.
The parent company also incure the foreign exchange risk related to Intercompany loans with subsidiaries which are in the local
currency of the subsidiaries and the risk relate to the net investments in foreign subsidiaries. Ths risk is not hedged.
Due to the DKK being fixed to the EUR, significant fluctuations on this exposure are not included in the sensitivity analysis below,
since it is considered immaterial.
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29
FINANCIAL RISKS
Currency
Securities
and cash/
equivalents Receivables Debt
Net position
before
hedging
Hedged by
financial
instruments
Net position
after hedging
EUR / DKK 4 335.810 -621.498 -285.684 0 -285.684
GBP / DKK
2
20.296
-6.136
14.161
0
14.161
USD / DKK
0
0
-1.745
-1.745
0
-1.745
PLN / DKK
773
394.800
-140.174
255.399
0
255.399
Currency
Securities
and cash/
equivalents Receivables Debt
Net position
before
hedging
Hedged by
financial
instruments
Net position
after hedging
EUR / DKK 0 253.310 -547.086 -293.776 0 -293.776
GBP / DKK
1
34.419
-10.527
23.893
0
23.893
PLN / DKK
641
105.638
-31.756
74.523
0
74.523
Sensitivity of currency risk
Change
2022
2021
GBP/ DKK
+5%
-552
-932
PLN/ DKK
+5%
-9.961
-2.906
INTEREST RATE RISK
The interest rate risk is not hedged since the risk and threat is considered low.
CONSOLIDATED
Change
2022
2021
Profit for the year
+1%
-3.418
-1.240
Equity
+1%
-3.418
-1.240
The opposite effect will impact revenue and profit for the year/equity per a 5% decrease in the raw material prices.
BA Groups interest rate risk related to interest-bearing debt and interest-bearing assets. The Groups interest-bearing assets and
debt relates mainly to deposits and borrowings with the parent company in the form of cash-pool accounts and to a minor extent
to deposits or borrowings with local external banks as well as leasing obligations towards external leasing companies. As of 31
December 2022 interest-bearing assets amounted to TDKK 14.221 (2021: TDKK 23.762) and interest-bearing debt of TDKK
440.524 (2021: TDKK 161.537).
PARENT COMPANY
The Parent Company's significant foreign exchange risks recognised in the balance sheet at 31 December 2022:
The Parent Company´s foreign exchange risks recognised in the balance sheet at 31 December 2021:
Below analysis includes the effect on profit after tax on a 5% increase in the exchange rates for the Parent company, all other
things being equal. A 5% decrease are expected to have a corresponding inverse effect.
Due to the DKK being fixed to the EUR, significant fluctuations on this exposure are not included in the sensitivity analysis below.
Below tables shows the sensitivity to changes in the interest rates as per Net Interest-bearing debt (NIBD) balance as per 31
December:
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29
FINANCIAL RISKS
PARENT COMPANY
Change
2022
2021
Profit for the year
+1%
-1.242
-885
Equity
+1%
3.058
1.059
CREDIT RISK
Trade receivables can be specified as follows:
2022 2021 2022 2021
Not overdue
176.170
164.258
100.520
92.200
Due below 30 days
43.249
36.246
25.146
22.796
Due between 31 and 90 days
9.802
12.624
48
6.281
Due above 90 days
10.644
8.119
117
5
Trade receivables before allowance 239.865 221.247 125.831 121.282
Impairment
-4.062
-7.692
0
0
Total trade receivables 235.803 213.555 125.831 121.282
98,3% 96,5% 100,0% 100,0%
Impairment rate
1,7% 3,5% 0,0% 0,0%
The impairment of TDKK 4.062 relate primarily to trade receivables due above 90 days.
Impairment losses on trade receivables 2022 2021 2022 2021
Impairment losses at 1 January
-7.692
0
0
0
Addition from acqusitions
0
-6.528
0
0
Impairment losses during the year 554 -1.270 3 0
Realised loss 3.075 106 -3 0
Impairment losses at 31 December -4.063 -7.692 0 0
The overall credit risk of the BA Group is considered to be low.
The parent company have positive NIBD and thus a 1% increase in the interest rate levels will impact positively the Profit for the
year, but due to intercompanies loans with subsidiaries this effect is reduced significantly with an offsetting effect from profit for
the year from subsidiaries and thus affecting equity negatively.
CONSOLIDATED PARENT COMPANY
Proportion of the total receivables which is
expected to be settled
The risk credit risk related to deposits on the cash pool accounts with Schouw & Co. via Danske bank as well as receviables from
the subsidiaries by the parent company are considered low.
CONSOLIDATED PARENT COMPANY
BA Group is exposed to credit risks arising from receivables and from balances with banks including derivative financial
instruments. Risks related to receivables are primarily with reference to external customers not fullfilling their contractual
obligations. Credit risk with banks occur when it is uncertain whether the bank is capable of settling its obligations when due
towards the Group.
The credit risk in relation to customers (trade receivables) is countered by Group policy, with effective management of customer
credit and thorough regular analyses based on customer type, country, and specific conditions. Generally, customers are
creditworthy and historically only a small and insignificant losses has been realized. Additionally external credit insurance from
Euler Hermes are generally used on all customers if possible, which together with the possibility to offset outstanding deposits
(core liability) on the outstanding amounts from customers reduces the risk of losses significantly. The risk of losses is therefore
considered low which is illustrated by the very insignificant losses incurred.
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29
FINANCIAL RISKS
LIQUIDY RISK
CAPITAL STRUCTURE
30
DERIVATIVE FINANCIAL INSTRUMENTS
CONSOLIDATED
Currency Period 2022 2021 2022 2021 2022 2021
PLN/EUR 0-1 year 150.000 120.000 4,9876 4,6349 7.988 -1.754
USD/DKK 0-1 year 8.000 12.000 6,9278 6,4895 775 526
USD/EUR 0-1 year 4.000 0 0,9742 N/A -1.564 0
Tax -1.584 -347
Total before tax 5.616 -1.574
PARENT COMPANY
Currency Period 2022 2021 2022 2021 2022 2021
PLN 0-1 year 150.000 120.000 4,9876 4,6349 6.231 -1.754
Tax 1.757 -495
Total before tax 7.988 -2.248
The BA Group Management monitors the capital structure of all legal entities within the Group and takes adequate measures to
ensure it is capitalised in the best interest of the Group and its shareholders. The overall objective is to ensure a continued
development and of BA Group which support the Groups strategy and growth ambitions.
BA Group uses forward contracts to hedge specific currency exposure related to the purchase of raw materials (cores) and
finished goods. Hedging contracts are not entered into for speculative purposes, but are only used to reduce the exposure to
changes in exchange rates relates to purchase or sales transactions.
Contractual value in
currency Average price
Gains and losses recognized
in the equity
Gains and losses recognized
in the equity
Contractual value in
currency Average price
It is the Management´s opinion that the Group has suffcient financial ressources to settle its oustanding obligations as they
become due, and the liquidity risk of BA Group is considered to be low.
At year-end 2022 the Groups liquidity reserve consist of both cash at hand and deposits at creditinstitutions and cash pool
accounts amounts to TDKK 29.870, of which TDKK 15.721 are cash-pool deposits. Based on the available facilities from the
ultimate parent company Schouw & Co., sufficient liquidity is consired to be in place.
BA Group is predominately financed by resources of the parent company Schouw & Co. as well as a number of committed and to
a lesser extent uncommitted credit facilities.The available facilities are continuously reviewed and the ultimate parent company
Schouw & Co. provides the adequate funds required for the Group to support the BA Group.
Liquidity is managed centrally and is continously monitored and assesed, to ensure that financial ressources are availables in all
BA Group companies at any given time.
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31
CONTINGENT LIABILITIES AND GUARANTEES
2022 2021 2022 2021
Guarantees
As security for the engagement with mortgage institutions,
mortgage deeds have been issued with a total value at year-end of: 0 9.870 0 9.870
The value of the related assets amounts to the following
0 0 0 0
Debt to the mortgage-institution at year-end amouted to
0 3.762 0 3.762
The asset to which the security of TDKK 9.870 relates to have been
sold in 2021, but the loan have not been redeemed until January
2022.
Borg Automotive A/S have issued a mortgage deed, which is in the
possession of the company. The mortgage deed amounts to: 35.000 35.000 35.000 35.000
Borg Automotive A/S have issued a guarantee towards HMRC in UK
related to postponed VAT accounting, a total of TGBP 900. The
guarantee in TDKK amounts to: 7.557 7.977 7.557 7.977
As security for the engagement with an external supplier a
subsidiary in BA Group have issued a bankguarantee of TEUR 270
with a total value at year-end of: 2.007 2.007 0 0
2022 2021 2022 2021
The following amount was drawn on the credit facilties as
mentioned above at year-end 402.111 140.770 389.582 140.100
Contractual commitments
BA Group have commited to the purchase of assets in the next year
of the following amounts: 27.896 2.532 26.476 0
A subsidiary in the Group have entered into an agreement with a
third-party regarding packaging operations in Poland. At year-end
the obligation amounts to: 4.714 6.300 0 6.300
CONSOLIDATED PARENT COMPANY
BA Group is predominately financed by resources of the parent company Schouw & Co. as well as a number of committed and to a
lesser extent uncommitted credit facilities.
The parent company Schouw & Co’s source of financing is primarily composed of a syndicated banking facility, which in December
2020 was refinanced with a total facility framework of MDKK 3.275. The facility is for a three-year period with the possibility of a one-
year extension after years one and two. In connection with the refinancing of the banking facility, the previous banking consortium,
consisting of Danske Bank, DNB and Nordea, was expanded with the international bank Hong Kong & Shanghai Banking Corporation
(HSBC). The first refinancing extension was used in December 2021, and the second was used in December 2022.
In April 2019 Schouw & Co. made a Schuldschein at total MDKK 1.011 (MEUR 136) with expery in 2024 (80%) and 2026 (20%).
In addition, Schouw & Co established a 7-year loan of MDKK 400 with Nordic investment Bank directly related to specific capacity
and development costs in Denmark.
In 2022 Schouw & Co. have established a line of term loans with Danske Bank, Nordea Bank, HSBC and Jyske bank on total MDKK
2.312. The loans is with a commitment which expires in with 50% in 2024 and 2025 respectively.
Borg Group, like other major subsidiaries in the Schouw & Co. Group, co-guarantees the aforementioned facilities of MDKK 6.998 of
which MDKK 5.197 has been deducted as of 31 December 2022. In addition to this commitment Schouw a Co. have established a
range of smaller facilities with HSBC of which MDKK 68 was deducted on 31 December 2022, out of a total facility of MDKK 78.
CONSOLIDATED PARENT COMPANY
63
31
CONTINGENT LIABILITIES AND GUARANTEES (continued)
Joint taxation liability
32 RELATED PARTIES
2022 2021 2022 2021
Sale of goods to subsidiaries
0
0
199.505
188.454
Purchase of goods from subsidiaries
0
0
885.809
782.920
Sales of services to subsidiaries
0
0
22.942
21.001
Purchase of services from subsidiaires
0
0
14.927
14.740
Purchase of customer and core liability, net from subsidiaires
0
0
0
-1.155
Sales of customer and core liability, net from subsidiaires
0
0
619
0
Sales of inventory to subsidiaries
0
0
10.620
0
Purchase of research and development from subsidiaries
0
0
11.059
9.686
Royalty income from subsidiaries
0
0
1.277
0
Storage financing
0
0
21.403
0
Interests paid to subsidiaries
0
0
1.032
968
Interests paid to parent company
6.413
1.275
6.226
1.207
Interests received from subsidiaries
0
0
24.932
4.019
Interests received from parent company
135
1
15
1
Management fee paid to parent company
1.875
1.400
1.875
1.400
Dividend paid to parent company
75.000
60.000
75.000
60.000
Dividend received from subsidiaries
0
0
7.446
44.610
Receivables from subsidiaries
0
0
624.220
329.851
Payables to subsidiaires
0
0
220.416
188.199
Payables to parent company
386.390
90.541
389.582
59.214
Borg Automotive A/S is jointly taxed with the other danish companies of Schouw & Co. Group. According to the joint taxation
provisions of the Danish Corporation Tax Act, the company is therefore liable for income taxes etc. for the jointly taxed companies
and also for obligations, if any, relating to the withholding of tax on interest, royalties and dividends for these companies. Schouw &
Co. serves as the administration company in a Danish joint taxation agreement.
The consolidated financial accounts for Schouw & Co. is publicly available and can be aquired at the following website:
www.schouw.dk
The Parent Company of BA Group, Borg Automotive A/S is owned 100% by Aktieselskabet Schouw & Co.
Additionally members of the Board of Directors, Executive management as well as their familiy members are considered related
parties. Furthermore, related parties are companies in which the above mentioned group of people has significant interests.
Transactions between companies within the BA Group and other entities within the Schouw & Co. Group are included below:
CONSOLIDATED PARENT COMPANY
The consolidated figures of BORG Automotive Group is included in the consolidated financial statements of the ultimate parent
company Aktieselskabet Schouw & Co., Aarhus, Denmark, CVR no: 63 96 58 12.
All companies within the Schouw & Co.Group including BA Group companies are considered related parties.
64