1
CVR No: 38 47 34 92
Date of the Annual General Meeting: 1st March 2024
Chairman of the Annual General Meeting: Tinneke Torpe
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Present in 12 locations
879 aircraft on contract 9 repair facilities
unique customers 20,000 wheels and
brakes in stock
+640
Customers in more
than 100 countries
19,200 m
2
warehouse
16 years of operation
Close to 400 employees
Since its foundation in 2008, TP Aerospace has
grown from a small start-up in Copenhagen,
Denmark to the globally leading aftermarket
supplier of aircraft wheels and brakes. The com-
pany was built with a vision to bring simplicity to
a highly complex niche within the aviation indus-
try, and this is still the case today.
We have evolved into becoming a one-stop-shop
for aircraft wheels and brakes, supporting a re-
curring customer base of airlines, lessors, bro-
kers, maintenance facilities and others.
At our 12 locations around the world, we employ
close to 400 employees, most of which are em-
ployed within one of our repair facilities. In total,
our repair facilities conduct repairs and over-
hauls on more than 43,000 wheels and brakes
every year to support our customers all over the
world.
+700,000
landings supported
ABOUT TP AEROSPACE
3
Programs
Provides commercial aircraft operators worldwide with a simple
alternative to component management. Through our integrated wheel and
brake programs, we offer long-term and all-inclusive solutions designed
to simplify wheel and brake maintenance and repair activities and
accommodate our customers’ short and long-term requirements.
Components
Provides operators, brokers, and lessors with unmatchable access to
critical wheel and brake components. With the world’s largest inventory
of ready-to-go aircraft wheels and brakes in the aftermarket, we support
a recurring customer base on an outright and ad-hoc exchange basis,
catering to both routine and AOG deliveries worldwide. Components is
also a critical strategic enabler and sourcing channel of used serviceable
material (USM) for Programs.
Distribution
Provides airlines, repair facilities and brokers with easy access to new
wheel and brake piece parts and assemblies across all major commercial
platforms. Through close partnerships with the Original Equipment
Manufacturers (OEM), we ensure availability of most part numbers across
platforms at a competitive price and with minimal lead time. Distribution is
also a key supplier to support our own maintenance operations.
TP Aerospace operates three distinct business divisions that each deliver a particular service or product to the market. While
having some inherent differences, the three divisions are complementary with distinct synergies, primarily because they share an
extensive unmatched customer and logistics network leveraging customer access.
Sourcing Inventory
Customers
In-house MRO
Sourcing Inventory Customers
BUSINESS MODEL
Aircraft on Ground, or AOG, is an aviation term indicating that a maintenance issue is serious enough to prevent an aircraft from flying.
Acquiring and fitting parts is time sensitive as the aircraft must return to service as quickly as possible to prevent delays or cancellations.
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CPH (HQ)
Copenhagen, DK
2008
69 employees (+9)*
EMA
East Midlands, UK
2018
21 employees (+3)*
HAM
Hamburg, DE
2010
101 employees (-2)*
BRQ
Brno, CZ
2023
21 employees (+21)*
MCO
Orlando, US
2015
59 employees (+2)*
LAS
Las Vegas, US
2011
12 employees (-1)*
OUR GLOBAL TEAM
* ( ) indicates change in employee count from 2022
SIN
Singapore, SG
2013
45 employees (+4)*
BKK
Bangkok, TH
2019
8 employees (+2)*
KUL
Kuala Lumpur, MY
2020
11 employees (+4)*
SZX
Shenzhen, CN
2019
1 employee (+0)*
MEL
Melbourne, AU
2016
26 employees (+1)*
BNE
Brisbane, AU
2023
8 employees (+8)*
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2 / STRATEGY & BUSINESS
Market & strategic priorities .....................21
Fueling growth from the core ....................22
Fueling the operational backbone. . . . . . . . . . . . . . . . 24
Fueling our people & culture ..................... 26
3 / SUSTAINABILITY
Sustainability ..................................... 28
Environment & climate .......................... 30
People ............................................ 32
Governance & ethics ............................ 34
Other sustainability information ................ 35
4 / RISK MANAGEMENT
Risk management ................................ 37
Key risk .......................................... 38
1 / OVERVIEW
Chairman’s insight ................................ 8
Letter from Executive Management .............10
Key events ........................................12
Financial highlights & key figures ................14
Financial review ..................................16
5 / MANAGEMENT
Board of Directors ............................... 42
Executive Management .......................... 44
6 / FINANCIAL STATEMENTS
Consolidated Financial Statements .............. 47
Parent Company Financial Statements .......... 83
Signatures .........................................94
7 / OTHER INFORMATION
Definition of key figures ..........................98
Additional management duties of the Board .... 99
Company details ................................105
TABLE OF
CONTENTS
Page 12
Get an overview of our
milestones and key
events achieved in 2023.
Read about our market
and strategy priorities
as we continue to secure
our market position.
6
WHEELS
AND
BRAKES
7
8
After some years with a high level
of volatility in the aviation industry,
2023 saw a more normalized global
activity level and pattern as we
know it from previous years. While
air traffic has returned to stable
levels, TP Aerospace exited the year
with one of the strongest financial
performances in its history.
In the past year, not only have
we delivered an outstanding
performance, but we have also
taken decisive action to ensure
the company’s continued success.
A key element of this has been
strengthening our Executive
Management team with two pivotal
appointments. In January, Felix
Ammann started his role as Chief
Operating Officer, followed by
Nicolai Hertz in October as our new
Chief Commercial Officer.
I am fully confident that with this
robust leadership team in place
—comprising of both the new
competencies and more seasoned
members - we possess the collective
experience, skills, and visionary
leadership necessary to effectively
execute our long-term strategy.
Continued growth in 2023
As we embarked on the 2023
financial year, our projections
anticipated a more modest growth
trajectory compared to 2022—a
year marked by a rebound from
the pandemic. In contrast, the
market dynamics of 2023 reflected
a return to normality. Despite
this stabilization, TP Aerospace
successfully managed to cater to
additional activity levels, culminating
in a financial performance
characterized by solid and
sustainable growth rates.
Our annual report for 2023
demonstrates a full-year revenue
of USD 176.9m — an increase
of 20% from 2022. This surge
was predominantly fueled by
our Programs customers, who
experienced an impressive growth
rate of 30% from the prior year. The
Distribution division also mirrored
this upward trend with comparable
growth percentages but starting
from a smaller base.
Throughout the course of the
year, TP Aerospace committed
substantial resources to strengthen
its operational capabilities. These
strategic investments included
an expansion of maintenance
capacity and enhancement of both
operational efficiency and supply
chain capabilities through further
digitization initiatives. Despite these
significant outlays, earnings saw
an approximate increase of 12%,
leading to an EBITDA that reached
USD 67.5m.
CHAIRMAN’S INSIGHT
continued
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
“
This financial resilience is
testament to our ability
not only to adapt swiftly in
shifting markets but also to
continue investing in our
future while delivering strong
economic results.
9
When we started the 2023 financial
year, we expected a lower growth
rate than in 2022. Due to the
rebound from the pandemic, 2022
was extraordinary in terms of
yearly growth and in 2023, we saw
a more normalized market, yet TP
Aerospace still managed to cater to
additional activity. This ultimately
resulted in a strong financial
performance in 2023, characterized
by strong but manageable growth
rates.
Preparing for growth and strong
profitability
The year 2023 was marked by
dynamic progress and strategic
foresight. We dedicated
considerable time and resources
to prepare the operation for
further sustainable growth all while
maintaining a vigilant focus on the
profitability of our business.
This year’s most significant
investments were channeled into
establishing new maintenance
facilities in the Czech Republic
and Australia, as well as acquiring
components that serve the diverse
requirements of our three divisions.
As an organization with high
ambitions and a proactive stance
on capturing market share, we are
in a continuous state of balancing
growth, profitability and returns.
Ensuring the right balance is one
of the most strategically important
decisions that we are making, and
thus something that is on top of the
agenda for the Board of Directors.
Sometimes, this means that we
accept a lower margin for something
that has a longer-term strategic
impact, while at other times it
means opting out of an attractive
opportunity to protect our bottom
line.
In 2023, our profitability was
negatively impacted by two key
challenges outside the control of TP
Aerospace. First was the continued
disruption to the global supply
chain post pandemic, which caused
prolonged and unpredictable lead
times on materials necessary for
our repair activities during the
year. Second was the significant
price increases imposed on TP
Aerospace from our key OEM
suppliers. Both challenges ultimately
lead to increased pressure on cost
and liquidity. While action was
taken to protect our profitability
throughout the year, we were only
partly successful in mitigating these
challenges, which is evident from our
year-end results.
The strong commitment to
enhancing profitability requires a
team of devoted individuals backed
by seasoned leadership. The ability
to act swiftly and decisively has
been crucial, and the Board has
confidence that the management
team ensures that we are well-
positioned to navigate these
decisions effectively in the future.
Managing towards high
sustainability standards
As we expand our business and
reinforce our leading position in
the market, we remain dedicated to
contributing to a more sustainable
aviation sector. Our goal is to uphold
high sustainability standards in
managing our business, thereby
becoming a reliable ally for both our
customers and business partners.
We have endorsed globally
recognized sustainability standards
and pledges. This includes our
ongoing support for the UN Global
Compact since 2017 and our recent
pledge in 2022 to the Science Based
Targets initiative (SBTi).
Just one year into our SBTi
commitment, we are already
making significant strides towards
achieving an absolute reduction
of 28% in scope 1 and 2 emissions
by 2030. As of 2023, compared to
the baseline year of 2019, we have
reduced emissions by 22%, while
simultaneously increasing sales
by 22%. The transition towards
renewable energy sources has been
a key driver of this achievement.
Looking ahead, the bar is rising for
the aviation industry, and companies
in general have to increasingly run
their business with respect for the
climate, value chain and society in
general. We pledge to be a leader in
this shift—not only to comply with
growing regulatory demands but
also to maintain the trust placed in
us by our customers.
Our strategy will continue to have
sustainability embedded at its heart
as we annually implement measures
that further refine a continuously
sustainable business model.
Flemming Jensen, Chairman
CHAIRMAN’S
INSIGHT
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
10
For everyone in TP Aerospace, 2023
was a year focused on executing
our strategy and finalizing and
implementing the initiatives that
were kicked off the previous year. A
lot of our initiatives revolved around
the continued optimization of our
operational backbone, ensuring
that both our existing and potential
new customers are provided with
the best possible solutions and
services. We saw the results of that
determined focus.
Harvesting synergies
Over the past years, we have seen
a trend amongst airlines signaling
a strategic shift towards less
asset-heavy operations; a trend
that continued in 2023 and that
was materialized in an increasing
demand for our services. This
trend combined with an underlying
increase in air traffic, provides
a unique opportunity for TP
Aerospace to not only grow with the
market, but also to further capture
market share.
To catch these opportunities now
and in the future, our strategic
focus in 2023 has not only been on
leveraging scale benefits within our
operations, but also on increasingly
harvesting the synergies of our
three commercial divisions. With
our solid experience from both our
Programs and our Components
businesses, as well as our growing
exposure within Distribution, we
are continuously assured that
the synergies between the three
divisions set our business model
apart and are key to our strong
position in the market. The benefits
of those synergies are evident both
upstream towards customers and
business partners and downstream
through the supply chain.
This reaffirms the strategic direction
that we set out to follow many
years ago and demonstrates that
our business model has never been
more relevant to the market than it
is today.
Growth across the divisions
While we ended 2023 with strong
performance across all core regions
and within all three business
divisions, the strong momentum
within our Programs division
continued from 2022.
In 2023, we supported 700,000
more landings among our Programs
customers compared to the previous
year, ending with a revenue growth
of approximately 30%. While we
secured a number of new contracts
during the year, this performance
was largely driven by activity growth
within the existing customer base as
well as by extensions of contracts to
embrace new aircraft additions to
the fleet.
Since its inception in 2020,
the Distribution division has
experienced remarkable growth.
In 2023 alone, the division saw
a substantial increase of 40%
compared to the prior year. The
largest activity level was in in the
Americas and EMEA covering
respectively 40% and 38% of the
global revenue. Furthermore,
growth was evident in general
across all core regions.
LETTER FROM EXECUTIVE
MANAGEMENT
continued
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
11
Distribution is governed by
OEM agreements, and to ensure
continued growth, we are dedicated
to building strong and mutually
beneficial relationships with the
OEMs. Towards the end of 2023, we
secured another significant OEM
agreement which we expect will
accelerate the growth further in
2024.
Within the Components division,
we experienced an expected lower
growth rate of 14% from 2022 to
2023. While this was partly driven
by external factors and market
dynamics, it was also a result of
some of the strategic decisions and
priorities we made to secure the
allocation of aircraft components to
support new and growing Programs
customers.
Components remains a core element
of our combined product offering,
and we expect to see a continued
growth within this division in the
years to come. However, the value
of Components lies increasingly in
its key role in enabling us to capture
and support a growing customer
base via our long-term contracts in
Programs.
Unwavering commitment to our
customers
While the global component market
is large and wide ranging, our
specific dedication to wheel and
brake components and services
allows us to keep an unwavering
focus on delivering on our
customers’ needs and expectations.
In the beginning of 2023,
we successfully completed a
comprehensive global customer
survey with the support of an
external provider. The survey set
out to give us an unbiased view of
our overall customer satisfaction
as well as insights into areas of
improvement.
While the survey provided us with
invaluable feedback on how we
ensure to uphold a customer-centric
business approach centered around
delivering value for our customers,
we were pleased to see that we
secured a high score across various
key metrics.
All three divisions performed above
the benchmark and the vast majority
of our customers reported that they
would promote TP Aerospace as
their wheel and brake partner.
In particular, we are proud that
our customers reported a high
level of trust in TP Aerospace. This
is of course a testament to the
underlying value of our products
and services, but even more so to
the people within our organization.
We continue to be very proud of
the dedication and work ethics
of our team across the world,
who work hard every day to give
our customers the best possible
service. Our people are what make a
difference.
While we always strive to improve
and become a better business
partner for our customers, we
believe that the survey results
underscore our ability to understand
the evolving needs of our diverse
customer base, an essential
parameter for driving TP Aerospace
forward and remaining the world’s
leading one-stop-shop for wheel and
brake solutions.
Happy reading.
Nikolaj Lei Jacobsen, CEO
Felix Ammann, COO
Tinneke Torpe, CFO
Nicolai Hertz, CCO
LETTER FROM
EXECUTIVE MANAGEMENT
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
12
PROCONTROL ROLLED
OUT TO EUROPEAN
PROGRAMS CUSTOMERS
At the beginning of the year, we started the
ofcial rollout of our new online customer
portal, PROControl. Throughout the year, the
solution was implemented across the majority
of our European Programs customers and
concurrently continued the enhancement of
the solution for increased value-add for TP
Aerospace and our customers.
WELCOMING NEW CHIEF
OPERATING OFFICER
At the close of 2022, we were excited to announce
our new Chief Operating Ofcer. This year, we had
the pleasure of welcoming Felix Ammann to the TP
Aerospace team. With a rich background spanning
over three decades in aviation, Felix Ammann brings
extensive expertise and possesses strong leadership
skills to oversee TP Aerospace’s daily operations.
FURTHER EXPANSION OF
DISTRIBUTION AGREEMENTS
TP Aerospace signed additional distribution agreements
for wheels and brake piece parts and assemblies with
key OEMs. The continued focus on strengthening our
relations with the OEMs and securing mutually benecial
agreements are key to delivering on the strategic
ambitions.
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of
2
10TH ANNIVERSARY
IN SINGAPORE
Our Singapore establishment celebrated its 10th anniversary.
Since 2013, Singapore has been home to TP Aerospace’s Asia-
Pacic headquarters, which has grown tremendously over the last
decade. Starting with a team of ten people during the rst year,
the Singapore site is now home for close to 50 team members and
our team in the region has reached over 100 people.
KEY
EVENTS
EASA APPROVALS IN
MALAYSIA AND THAILAND
During the fall of 2023, our two facilities in Kuala
Lumpur, Malaysia and Bangkok, Thailand were audited
and approved by the European Aviation Safety
Authorities. As a result, they added an EASA Part-
145 approval to the existing approvals from the Civil
Aviation Authority of Malaysia and the Civil Aviation
Authority of Thailand.
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OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
13
NEW MILESTONE IN
REDUCING EMISSIONS
At the end of 2023, we had secured an absolute
reduction of 22% in scope 1 and 2 emissions
compared to 2019. This was driven by the installation
of solar panels at our Singapore facility and landed us
on a solid track towards our goal of a 28% absolute
reduction by 2030.
700,000 LANDINGS SUPPORTED
By the end of 2023, we had reached a new record for
the number of landings supported within our Programs
Division in a calendar year. Across our global customer
base, we supported more than 700,000 landings in 2023
via our all-inclusive service programs. This was over 10%
more than 2022.
APPOINTMENT OF NEW CHIEF
COMMERCIAL OFFICER
In the fall of 2023, we appointed Nicolai Hertz as the
new Chief Commercial Ofcer (CCO) of TP Aerospace.
Nicolai Hertz brings more than 30 years of experience
from the aviation industry and as he stepped into the
new role as CCO, Co-founder Thomas Ibsø stepped
down as President as planned at the end of 2023.
EXPANSION IN AUSTRALIA
In March 2023, we secured an extension of our
collaboration with our longtime customer Virgin Australia.
With this, we announced the plan to open a second facility
in Australia to secure the capacity needed to support the
growing customer base in the country. The new facility was
established in Brisbane during the second half of the year
and was at year-end awaiting nal approval from the Civil
Aviation Authority of Australia.
KEY EVENTS
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of
2
NEW SITE IN EASTERN
EUROPE APPROVED
The establishment of the new maintenance and
warehouse facility in Brno, Czech Republic was
successfully completed and approved by the
European Aviation Safety Authorities (EASA) by
the end of 2023. The new facility is our 9th repair
facility and with a total of 10,000 m2 it is the
largest facility in our global network.
CONSOLIDATION OF
EUROPEAN WAREHOUSE
During the year, we consolidated our European warehouses
at our main hubs in Germany and Czech Republic by moving
the oldest warehouse in the Group from Copenhagen
to Czech Republic. With this move, all inventory within
our global network is now located together with our
maintenance facilities, creating better synergies between the
different areas of our organization.
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OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
14
FINANCIAL HIGHLIGHTS
& KEY FIGURES
continued
Income statement (USDm)
2023 2022 2021 2020 2019
Revenue 179.7 147.0 88.8 67.7 119.3
Revenue growth (%) 22.2% 65.5% 31.3% -43.3% 7.7%
Gross prot 101.9 85.1 53.1 40.4 65.0
Gross prot margin (%) 56.7% 57.9% 59.8% 59.8% 54.5%
EBITDA before special items 63.7 60.2 31.3 21.4 37.8%
Proforma EBITDA before special items 63.7 56.6 33.5 22.8 37.8
EBITDA margin before special items (%) 35.5% 40.9% 35.2% 31.6% 31.7%
Proforma EBITDA margin before special items (%) 35.5% 38.5% 37.7% 33.6% 31.7%
EBITA before special items 19.7 22.8 7.7 1.2 12.7
Proforma EBITA before special items 19.7 19.2 9.9 2.6 12.7
EBITA margin before special items (%) 10.9% 15.5% 8.7% 1.8% 10.6%
Proforma EBITA margin before special items (%) 10.9% 13.1% 11.2% 3.8% 10.6%
EBIT before special items
(Operating prot before special items)
18.8 21.5 6.5 0.4 12.1
Proforma EBIT before special items 18.8 17.9 8.7 1.8 12.1
EBIT margin before special items (%)
(Operating prot before special items margin)
10.5% 14.6% 7.4% 0.6% 10.1%
Proforma EBIT margin before special items (%) 10.5% 12.2% 9.8% 2.6% 10.1%
Special items 6.0 2.1 2.0 6.8 5.1
EBIT after special items
(Operating prot after special items)
12.8 19.4 4.5 -6.4 7.0
EBIT margin after special items (%)
(Operating prot after special items margin)
7.2% 13.2% 5.1% -9.5% 5.8%
Net nancials -8.4 -5.1 -2.5 -7.5 -3.9
Prot before tax 4.5 14.3 2.0 -13.9 3.0
Net prot for the period 2.0 11.7 1.5 -11.4 2.2
Net prot for the period (%) 1.1% 8.0% 1.7% -16.8% 1.8%
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
Employees
2023 2022 2021 2020 2019
Number of employees (end of year) 382 331 245 228 284
Average number of employees 375 281 234 260 278
15
Balance sheet (USDm)
2023 2022 2021 2020 2019
Non-current assets
126.3 117.3 107.2 116.0 108.7
Additions to tangible assets 55.1 51.3 27.4 30.2 48.5
Total assets 223.4 228.1 189.9 198.1 201.3
Equity 105.4 103.3 91.9 90.2 89.6
Net interest-bearing debt 75.6 79.7 69.3 76.7 73.6
Invested capital 138.5 138.9 116.1 122.1 119.0
Net working capital 69.6 80.3 64.8 62.1 67.9
Total aircraft components 126.9 124.0 103.4 112.2 111.5
Cash ow (USDm)
2023 2022 2021 2020 2019
Cash flow from operating activities 19.6 4.8 14.5 -2.7 5.3
Cash ow from investing activities -12.8 -14.4 -6.2 -9.5 -19.3
Cash ow from nancing activities -7.3 10.6 -7.7 11.5 13.6
Net cash ow -0.5 1.0 0.7 -0.6 -0.5
Free cash ow 6.8 -9.6 8.4 -12.1 -14.0
Free cash ow before interest paid 14.7 -3.5 12.3 -6.4 -9.8
FINANCIAL HIGHLIGHTS
& KEY FIGURES
Financial Raos
2023 2022 2021 2020 2019
Return on invested capital excluding goodwill (ROIC) (%) 45.9% 47.2% 26.3% 17.7% 34.0%
Net interest-bearing debt to EBITDA 1.2x 1.3x 2.2x 3.6x 1.9x
Equity ratio (%) 47.2% 45.3% 48.4% 45.5% 44.5%
Return on Equity (ROE) (%) 1.9% 12.0% 1.7% -12.6% 2.5%
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
16
TP Aerospace succeeded in
delivering strong financial
performance in 2023 with record-
high top-line growth as well as
improved gross profit and earnings
before interest, tax, depreciation
and amortization. This was driven by
the strong recovery in flight activity
which continued throughout the
year combined with a diversified
customer base and broad
geographical reach in all business
divisions. The number of aircraft on
contract ended at 879 by the end of
2023.
Despite substantial investments
in aircraft components and the
expansion of production capacity
at the new locations in Brno, Czech
Republic and Brisbane, Australia,
TP Aerospace generated a free
cash flow of USD 6.8m, thereby
laying the foundation for further
growth and strong cash generation
in 2024. Free cash flow before
interest paid reached USD 14.7m,
an improvement of USD 18.2m
compared to 2022.
Income statement
Overall, 2023 revenue of USD
179.7m increased by 22.2%
compared to USD 147.0m in 2022.
The revenue improvement reflected
a further rise in air traffic demand,
aircraft utilization and the global
fleet from 2022 to 2023, with fleet-
in-service recovered to the 2019
level.
The 2023 revenue of USD 91.2m
in the Programs division increased
by 25.0% from USD 72.9m in 2022,
of which USD 41.3m was realized
in the first half of the year and USD
49.9m in the second half of the year.
Besides the impact of higher
air traffic demand in 2023, the
main drivers behind the revenue
improvement were additional
aircraft and new platforms added
by existing Programs customers,
and the signing of several programs
with new customers. TP Aerospace
continued to benefit from diversified
aircraft platforms and geographically
diversified portfolio of larger and
smaller customers, with 68% of total
contracted aircraft being passenger
operators and 32% being cargo
operators.
The 2023 revenue from the
passenger segment grew by 50.1%
to USD 59.8m reflecting the
post-pandemic recovery, whereas
revenue from the cargo segment
declined by 5.2% from the pandemic
driven highs to USD 31.4m.
Within the Programs division, EMEA
increased by 29.4% and APAC by
38.0% while Americas decreased
by 5.9% from 2022 to 2023. The
improved performance in EMEA and
APAC was driven by the Passenger
segment and ACMI
1
operators with
APAC reflecting the first year of fully
recovered aircraft operations since
the pandemic. The revenue decrease
in the Americas was primarily driven
by the drop in the Cargo segment
and reflected an overall lower
activity level in the air cargo industry
in the North American market.
Compared to 2022, revenue from
existing customers improved by
USD 17.7m, an increase of 25.0%,
whereas new customers signed
during the year contributed with
USD 2.5m of the revenue, an
increase of USD 0.5m compared
to the revenue share from new
customers in 2022. Activity with
existing customers was positively
impacted by customers expanding
their activities and the improved
market situation, with higher flight
activity.
The Programs division ended
the year with 879 aircraft on
contract, a net decrease of 27
aircraft compared to 2022. Existing
customers added 95 new aircraft
to the portfolio, while a further
63 aircraft were added by new
customers. These additions were
offset by the unfavorable impact of
179 aircraft coming off contract due
to various airline restructurings and
ordinary contract adjustments. Of
the 179 aircraft, 68 aircraft were
related to customers adjusting the
number of aircraft due to phase-
outs while the customer remained
on contract with TP Aerospace.
In comparison, 2022 included
138 aircraft additions by existing
customers and 58 aircraft additions
from new customers, offset by 124
aircraft coming off contract.
Within our two program types,
revenue from the Flat-Rate
programs improved by 18.3% while
revenue from the For-Less programs
increased by 36.5%. The increased
revenue in For-Less programs
partially reflected that some
customers shifted from Flat-Rate to
For-Less programs throughout the
year.
The 2023 revenue in the
Components division of USD 65.4m
improved by 13.6% compared
to 2022 revenue of USD 57.6m,
thereby reaching an all-time high
revenue in the Components division.
Driven by the strong recovery in
aviation in general, the Components
division experienced significant
growth during the year, with airlines
and lessors continuing repair work
which had been delayed during the
pandemic years. The imbalances in
wheels and brakes OEM
2
vendors’
global supply chains also led to
longer lead times and order backlogs
on factory-new equipment which
positively impacted the demand for
used serviceable wheels and brakes.
FINANCIAL REVIEW
continued
Revenue (USDm)
200
150
100
50
0
2020
68
89
147
180
2021 2022 2023
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
1. Aircraft, Crew, Maintenance, Insurance. 2. Original Equipment Manufacturer.
17
The increased revenue in the
Components division reflected
improvements in EMEA and APAC
with revenue growth of 19.1% and
41.0%, respectively. Revenue in
the Americas, on the other hand,
declined by 13.5%.
In 2023, the share of revenue from
repeat customers
3
totaled 57%
in the Components division, and
aircraft components were sold to
customers in 83 countries, adding
two new countries during the year
while other countries no longer are
serviced. In comparison, the share
of revenue from repeat customers
constituted 50% in 2022.
The 2023 revenue in the
Distribution division of USD 17.7m
increased by USD 5.0m, equal to
38.8% growth compared to the
2022 revenue of USD 12.8m. The
increase was especially driven by a
strong traction in sales of Safran and
Goodrich assemblies and piece parts
and the Honeywell 737CL platform
for which TP Aerospace in 2020 was
awarded exclusive distributorship,
and the B767 platform for which TP
Aerospace entered a distribution
agreement with Honeywell in 2022.
Gross profit for 2023 amounted
to USD 101.9m compared to USD
85.1m in 2022. The gross profit
margin of 56.7% was slightly below
2022, at 57.9% due to high repair
costs and freight costs on selected
programs, which partially was
counterbalanced by higher margins
in the Components and Distribution
divisions compared to 2022.
Staff Costs and Other External
Expenses including Other Income
amounted to USD 38.1m in 2023
compared to USD 24.9m in 2022,
reflecting an increase of USD
13.3m or 53.3%. Around 50% of
the higher costs were driven by
more headcount, especially in
production functions, as a result
of the 25% growth in activity level
in Programs and the expansion of
production capacity in two new
locations. Furthermore, other
external expenses increased due
to several operational initiatives
to improve scalability and cost
efficiency and initiatives to
strengthen process governance
and functional competences for
future growth, including the roll-out
of the PROControl platform. In
addition, 2023 included an increase
in provision for bad debt of USD
0.7m. In comparison, 2022 included
income from government support
schemes of USD 3.6m.
Earnings before interest, tax,
depreciation, and amortization
(EBITDA before special items) for
2023 amounted to USD 63.7m,
which was USD 3.5m higher than
USD 60.2m in 2022. The EBITDA
margin before special items was
35.5%, a drop of 5.5% points
compared to 2022, mainly driven
by the increase in Staff Costs and
Other External Expenses relative
to the increase in revenue as well as
the lower gross profit margin in the
Programs division.
Reflecting the income from
government support schemes
received in the year where the
related costs were incurred,
Proforma EBITDA before special
items for 2022 amounted to USD
56.6m while Proforma EBITDA
margin was 38.5% and thus,
compared to Proforma EBITDA for
2022, EBITDA before special items
in 2023 improved with USD 7.1m
while EBITDA margin only dropped
with 3.0 percentage points.
Earnings before interest, tax,
amortization and special items
(EBITA before special items) for
2023 amounted to USD 19.7m
which was a decline of USD 3.1m
compared to USD 22.8m in 2022.
In addition to the change in EBITDA
before special items, the higher
activity in the Programs division as
well as accelerated depreciation
from terminated Flat-Rate programs
drove depreciation of MRO repair
costs up by USD 6.2m to USD 38.9m
compared to USD 32.6m in 2022.
Excluding the income from
government support schemes
recognised in 2022 but related
to costs incurred in 2020 and
2021, EBITA before special items
improved by USD 0.5m in 2023
compared to Proforma EBITA of
USD 19.2m in 2022.
FINANCIAL
REVIEW
3. Defined as customers who have made purchases in 2023 as well as in 2022.
continued
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
Proforma EBITDA before special items
70
60
50
40
30
20
10
0
40
30
20
10
0
(%)USDm
2020
23
34
64
2021 2022 2023
EBITDA before special items margin
EBITDA before special items
57
Proforma EBITA before special items
20
15
10
5
0
14
12
10
8
6
4
2
0
(%)USDm
2020
3
10
20
2021 2022 2023
EBITA before special items margin
EBITA before special items
19
18
Earnings before interest, tax and
special items (EBIT before special
items) for 2023 amounted to USD
18.8m compared to USD 21.5m
in 2022. The EBIT margin before
special items was 10.5% compared
to 14.6% in 2022.
Excluding the income from
government support schemes
recognised in 2022 but related to
costs incurred in 2020 and 2021,
EBIT before special items improved
by USD 0.9m in 2023 compared to
Proforma EBIT of USD 17.9m in
2022.
Special items amounted to USD
-6.0m compared to USD -2.1m in
2022 and mainly related to one-off
costs for advisory and consultancy
fees on special projects during the
year, but also included non-recurring
costs from the establishment of two
new sites in Brno in Czech Republic
and Brisbane in Australia as well as
other one-off items.
Net financial items for 2023
amounted to USD -8.4m compared
to USD -5.1m in 2022. The increase
was driven by higher interest rates
and higher net interest bearing debt
(NIBD) throughout 2023 compared
to 2022. Average net draw in
the year increased by USD 6.4m
compared to 2022.
Profit before tax amounted to USD
4.5m compared to USD 14.3m in
2022.
Tax on the profit for 2023 was an
expense of USD 2.5m and was
mainly impacted by limitation
on interest deduction and non-
deductible expenses.
The effective tax rate equalled
54.9%.
Net profit for the year amounted to
USD 2.0m compared to USD 11.7m
in 2022.
Assets
On 31 December, 2023,
TP Aerospace’s total assets
amounted to USD 223.4m, a
decrease of USD 4.7m from
USD 228.1m in 2022. This was
driven by a decrease in vendor
prepayments of USD 7.3m while
aircraft components increased with
USD 2.9m, primarily related to new
contracts in the Programs division,
and property, plant and equipment
increased by USD 2.1m due to the
establishment of new repair shops in
Brno, Czech Republic and Brisbane,
Australia. By the end of 2023,
aircraft components amounted to
USD 126.9m, of which USD 57.6m
was classified as property, plant and
equipment under non-current assets
(aircraft components assigned to the
program activities) and USD 69.3m
as inventory (accounting treatment
is further explained in the section
“Consolidated Financial Statements”
under notes).
continued
FINANCIAL
REVIEW
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
Proforma EBIT before special items
20
15
10
5
0
14
12
10
8
6
4
2
0
(%)USDm
2020
2
19
2021 2022 2023
EBITA before special items margin
EBITA before special items
18
9
19
FINANCIAL
REVIEW
Net working capital
Net working capital ended at USD
69.6m compared to USD 80.3m
in 2022. The decrease was mainly
driven by lower vendor prepayments
as well as lower aircraft components
inventory, reflecting the ramp-up in
activity and improved inventory turn
across all three business divisions.
The aircraft components owned
by TP Aerospace are all deemed
current based on the composition of
parts and the aircraft platforms for
which they are used.
Equity
Total equity amounted to USD
105.4m as of 31 December, 2023,
compared to USD 103.3m by year-
end 2022, equal to a change of USD
2.1m deriving from the 2023 result.
Net interest-bearing debt
As of 31 December, 2023, the net
interest-bearing debt amounted
to USD 75.6m or 1.2x EBITDA
before special items, compared to
USD 79.7m or 1.3x EBITDA before
special items as of 31 December,
2022.
Return on invested capital (ROIC)
The return on invested capital
excluding goodwill was equal to
45.9% compared to 47.2% in 2022.
Despite a higher EBITDA before
special items, the increase in average
invested capital, especially in aircraft
components, resulted in a decrease
in ROIC.
Cash flow
Cash flow from operating activities
amounted to USD 19.6m compared
to USD 4.8m in 2022, while free
cash flow amounted to USD 6.8m
compared to USD -9.6m in 2022.
The growth in 2023 and the
expansion of production capacity
in EMEA and APAC demanded
significant asset investments,
however the cash flow generated
during the year, was sufficient to
fund these asset investments and
the interests on the interest-bearing
debt while still securing an adequate
liquidity position entering 2024.
Free cash flow before interest
paid totaled USD 14.7m and thus
improved by USD 18.2m compared
to USD -3.5m in 2022.
Outlook
There were continued positive
development in air traffic demand,
aircraft utilization and aircraft fleet
in service in 2023, which is assumed
to continue throughout 2024. Thus
our expectation is an overall increase
in the market and in the activity level
among our customers and thereby
higher activity level, particularly
in the Programs and Distribution
divisions. On this basis, revenue
is expected at a level in the range
of USD 180-210m. Furthermore,
the positive development in
demand and revenue combined
with a growing scalability in our
operations are expected to result
in earnings margin before interest,
tax, depreciation, amortization,
and special items (EBITDA margin
before special items) in the range of
35-40%.
The expectations stated above
are based on the assumptions
that the global macroeconomic
and geopolitical situation will not
worsen significantly and thereby
change the business conditions
for TP Aerospace, that inflation
will stabilize at a level below 4%
throughout 2024, and that the
exchange rates, especially the US
dollar versus the Euro and Danish
krone, will remain around the end-
2023 level throughout 2024.
This outlook is subject to risks and
uncertainties as various factors,
many of which are beyond TP
Aerospace’s control, may cause the
actual development and financial
results to differ materially from
expectations.
NIBD/EBITDA before special items
NIBD
NIBD & NIBD/EBITDA
before special items
80
60
40
20
0
4
3
2
1
0
(X)
USDm
77
69
80 76
2020 2021 2022 2023
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
20
21
During 2023, TP Aerospace
continued to execute its business
strategy designed to secure our
competitiveness and market
position. To achieve our long-term
growth targets, our continued
focus remains on assessing and
improving how we create value for
our customers while ensuring that
the growth is sustainable for our
financials, our organization, and the
society around us.
Market outlook and attractiveness
The aviation industry is forecasting
solid growth over the coming years.
From 2024, we expect that the
wheels and brakes market, together
with the overall aviation components
market will experience healthy
growth rates of ~7% towards 2027.
This will fuel significant demand
increases across all three divisions.
On top of attractive overall market
growth, we expect that the following
two trends will drive increased
growth in our specific market:
1. Increasing appetite for
outsourcing; A larger part of the
mid and large sized airlines in
our core regions are looking to
outsource maintenance to keep their
operations focused on their core
competence.
2. Focus on financial transparency
and predictability; Our cycle-flat-
rate programs give the airline cost
transparency and predictability
which is not obtainable with other
maintenance setups.
2023 Strategy review
TP Aerospace completed an internal
strategy review aimed at ensuring
that our long-term objectives are on
track. The overall direction was once
again affirmed as TP Aerospace has
shown and continues to show above
market growth rates and margins,
with no signs of slowing down.
The performance across all
divisions underlines the synergies
achieved by catering to the wheel
and brake market from three
different angles. Both our know-
how within procurement of used
material (Components) and access
to cheaper OEM new piece parts
and assemblies (Distribution) are
key drivers of Programs profitability
margins.
Also, all divisions share an
overlapping customer group
giving rise to many commercial
opportunities. The rapid top line
growth of the Distribution division is
a testament to the industry expertise
and network built over many years
in the Programs and Components
divisions.
Strategic priorities
While our overall strategy provides
for a detailed description of how we
will increase our value and where
to focus our efforts, resources, and
investments, it centers around three
strategic priorities.
1. Fueling growth from the core
2. Fueling the operational backbone
3. Fueling our people and culture.
MARKET & STRATEGIC
PRIORITIES
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
22
TP Aerospace’s strategy is
built on securing growth from
the core. For TP Aerospace
that means staying focused
on our core products and
services, driving our existing
business divisions to their
full potential, and capturing
market share.
Growth across three
divisions
In 2023, TP Aerospace
experienced an overall
growth rate of 22%
compared to the previous
year.
The largest absolute
growth was achieved within
Programs which in 2023
ended at USD 91.2m, which
was a 25% revenue growth
from 2022. The momentum
for our Programs solutions
remained the strongest
within the European market,
which constituted 75% of
the Programs revenue in
2023, while Asia Pacific and
the Americas represented
11% and 14%, respectively.
Overall, we supported
around 700.000 landings
equal to an increase of 10%
compared to 2022.
We secured 11 new
programs in 2023 covering a
total of 57 aircraft. Despite
these additions, Programs
ended the year with 879
aircraft on contract, which
was down from 906 at
the beginning of the year.
This decrease was mainly
driven by external factors,
such as aircraft phase-outs
and airlines suspending
operations. Further, some
programs were actively
closed by TP Aerospace due
to customer inactivity.
At the end of year, the 879
aircraft were supported
via 81 operators, spanning
both passenger and cargo
operators, national flag
carriers, low-cost carriers
as well as a mix of well-
established and new start-up
airlines.
The Components division
grew by 13.6%, which
was a significantly lower
growth rate compared to
last year and compared to
the other two divisions. The
more modest growth was,
among other things, driven
by external factors and
market dynamics, such as a
limited number of aircraft
retirements and teardowns.
This resulted in limited
USM availability. Further, it
was the result of strategic
choices that we made to
allocate inventory to new
and expanding Programs
customers. Set against this
background, continuing to
generate sales growth in
2023 can be considered a
strong achievement.
To continue to grow
Components independently
while also being a strong
enabler for securing growth
within Programs, it is key
that we continue to have
available inventory across a
wide range of part numbers.
To do so, we are constantly
monitoring market activity
and acquisition opportunities
for used serviceable material.
At the end of 2023, our global
inventory counted a total of
20,000 wheels and brakes.
Finally, the Distribution
division had a successful
year as well, ending 2023
revenue at USD 17.7m, which
was 39% above 2022. This
reflected sales across all
major OEMs as well as a mix
of piece parts and assemblies.
We also saw an increase in
reoccurring customer sales
with 57% of the customer
base being repeat customers.
Expanding OEM relations
There are further
opportunities for Distribution
to grow and we continue to
expand our partnership with
OEMs and our recurring
customers. Our agreements
with OEMs increase our sales
opportunities and revenue.
These agreements also add
to our value as a one-stop-
shop for wheels and brakes
because we aim at having the
right piece parts available
for our Programs customers,
recurring customers and
potential customers.
During 2023, we secured an
additional global distribution
agreement with a key OEM,
adding a wider range of piece
parts and assemblies to our
catalogue. This agreement
provides TP Aerospace
with access to customers
operating on different
platforms that we until now
have not been able to pursue.
We go into 2024 with a clear
focus on further developing
our go-to-market strategy
for Distribution to secure our
future position as a preferred
distribution partner for
manufacturers of wheel
and brake piece parts and
assemblies.
FUELING GROWTH
FROM THE CORE
continued
Distribution revenue
increase from 2022
39%
Programs revenue
increase from 2022
25%
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
23
Supporting customer
growth
During 2023, TP Aerospace
supported more than 640
customers in over 100
countries across all regions.
While our core customer
base continues to consist
of small and medium-sized
operators, our level of activity
in the larger fleet segment is
growing. This is evident both
from the intensifying dialogue
with larger operators as
well as the general growth
amongst some of our existing
customers who have grown
substantially during the
contract duration of their
Programs contracts.
In 2023, our Programs
customers added a total of 95
additional aircraft to existing
contracts. Our largest
customer operated a fleet of
more than 120 aircraft during
the year.
For comparison, in 2018
our customers added 43
aircraft to existing contracts,
which underlines the
accelerating growth of our
existing customer base in
recent years. In line with this
development, our average
fleet size has grown by 49%
in the same period.
We consider this a testimony
to the uniqueness and
relevance of our product
FUELING GROWTH
FROM THE CORE
increase in average
customer fleet size since
2018
49%
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
24
Securing long-term growth
requires a consistent focus
on how we deliver value
to our customers. For TP
Aerospace, this means
allocating the necessary
resources to strengthen and
sustain the core operations
across our global network,
including processes,
infrastructures, systems and
technologies and production
efficiency.
Efficiency gains through
workflow optimizations
In 2023, a total of 43,300
wheels and brakes* were
repaired within our global
maintenance facilities. This
was 19% more than the year
before. This increase was
driven by a growing demand
across all key regions and
was enabled by efficiency
improvements within our
larger facilities in particular.
Such improvements
came, amongst others,
from investments in
new and more efficient
machinery and in resources
dedicated to working with
the implementation of
lean methods within the
maintenance set-up.
As an example, a new
overhaul line was established
at the Hamburg facility, which
came into operation right
before the summer high
season. The new line enabled
a better production flow by
separating the repair area
and overhaul area. Together
with other initiatives, this
improvement resulted in
an increase in output of
16% from 2022, while also
leading to a record 300 units
released in just five working
days.
We also achieved an increase
in output within our two
major hubs in the Americas
and Asia regions. In the
Orlando facility, we secured
a stable output growth of
10% from 2022. This was
a result of the extensive
transformation project
carried out and completed
in 2022 within the Orlando
facility. In Singapore, the
move to a new facility in 2022
fully materialized in 2023,
resulting in an output growth
of 26% from the previous
year.
Securing future capacity
While we aim to constantly
increasing efficiency in
our existing facilities, both
across the maintenance
activities and within our
warehouse and logistical
hubs, the utilization rate of
existing facilities was high,
especially in Europe and
Australia. As in previous
years, we have continuously
assessed our global footprint
to ensure that we have
available capacity to cater to
growth while also remaining
agile in adapting to market
developments and customer
demands for proximity.
In 2022, we laid the
foundation for a new facility
in Central Europe with
the signing of a 10,000m2
building in Brno, Czech
Republic. In 2023, we
turned the building into the
largest wheel and brake
maintenance and warehouse
facility in our network. This
process included not only
the establishment of the
physical layouts, but also
system implementation
and onboarding of a new
team in TP Aerospace’s
processes and systems.
From the summer of 2023,
the facility officially opened
the 6,000m2 warehouse for
shipping and receiving of all
aircraft components. Our
Copenhagen warehouse
was closed, and all inventory
moved to Brno, this being
part of our strategic decision
to consolidate the European
warehouses.
FUELING THE OPERATIONAL
BACKBONE
continued
Wheels and brakes
repaired globally in 2023
- 19% increase from 2022
43,300
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
* Measured in standard units. A standard unit equals the repair of one narrow-body main wheel.
25
By late December 2023, the facility
was approved by the aviation
authorities and is now ready to
support our customers with high-
quality repair, overhaul and logistics
support.
In the UK, we further added another
1,100m2 of warehouse space as
an expansion of the existing facility
in East Midlands. This was done
to secure the future capacity for
supporting customers in the region.
Finally, we welcomed new colleagues
in Australia as we established a new
facility in Brisbane to complement
the existing facility and team
in Melbourne. The new facility
adds approximately 1,300m2
of maintenance and warehouse
space to our global network and is
strategically located near Brisbane
airport and key customers in the
country. At the end of the year, we
were awaiting final approval from
the Civil Aviation Authority of
Australia.
Tools and data to support
sustainable processes
Data and digitalization were key
priorities for most projects in 2023.
This included both projects related
to how we collect, use and secure
high-quality data, as well as projects
aimed at determining how we best
use data to forecast our customers’
activity and our internal capacity
demand.
Again in 2023, one of the key
challenges we faced was related to
the global supply chain challenges,
resulting in longer lead times and
general uncertainty in the supply of
materials. While the global supply
chain disruptions remain outside
our control, this challenge puts
increasing pressure on our ability to
forecast our demand for materials
as accurately as possible in order
to mitigate the risk of negative
impacts on our operations. In 2023,
efforts to address this included the
further development and roll out
of global planning and forecasting
tools. These tools are based on
internal data and market intelligence
and helped secure increased
data transparency to guide our
procurement activities throughout
the year. These initiatives were
successful in partly mitigating the
challenges faced during the year.
However, our 2023 performance
was unfavorably impacted by the
lack of materials and the subsequent
pressure on cost.
In the beginning of 2023, we
officially launched our new digital
customer portal – PROControl - to
our Programs customers in Europe.
PROControl offers our customers
a modern and efficient tool for
managing their wheel and brake
programs and data.
By year-end, most of our
European Programs customers
were onboarded to PROControl
and throughout the season
approximately 30% of all
transactions from our European
customers were handled through
the portal. While it will take some
time to fully transition customers
globally, we still saw a significant
increase in efficiency compared to
previous years. This has been seen
in both the ease of ordering for our
customers and in the automation of
processes and dataflow internally.
This was truly a milestone in our
persistent journey to automate
processes and strengthen the smart
use of data as a foundation for
easier, smoother, and more efficient
exchanges between TP Aerospace
and our customers. We believe
that this strengthens our customer
relationships through the seamless
integration of IT systems and
electronic data interchange.
FUELING THE
OPERATIONAL BACKBONE
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
26
Our ability to deliver on
the strategic direction of
TP Aerospace relies on our
unyielding commitment to
developing our organization,
building robustness, and
reinforcing a positive
organizational culture to drive
the company forward.
Robust regional structure
During 2023, we continued
our efforts to strengthen our
global organizational blueprint
to ensure that our in-house
competencies are scalable to
the needs of our operations and
match the growing expectations
from our stakeholders.
At end of year, our global
organization had grown by
15% from the end of 2022. The
majority of this growth was
driven by increases in operational
staff and primarily related to
our two new maintenance and
warehouse facilities in Brno,
Czech Republic and Brisbane,
Australia.
With this growth across most
core regions, we strengthened
our global operational structure
with the clear division into four
core regions being the Americas,
EMEA, Asia and Oceania. With
strong leadership competencies
in place to drive each region, we
are confident in this structure
delivering on future growth
and targets while also ensuring
strong knowledge sharing across
the global team.
Centralization of key functions
With a global team of
approximately 400 people across
12 locations and 10 countries,
managing organizational
competences and sharing best
practice across functions and
geographies are key to driving
TP Aerospace forward. To
strengthen the synergies across
the global company, we did some
organizational restructuring in
2023.
Halfway into the year,
we centralized the global
commercial team under a
Global Sales Director. This
reorganization was a key step
towards strengthening our global
market position and fostering
stronger synergies across the
regions under experienced and
dedicated leadership.
Being the closest link to our
customers and the market, it
is fundamental that our sales
teams are in proximity to our
customers, both in terms of
understanding their current
and future needs, but also
with regards to understanding
local cultures, languages, and
market dynamics. With the new
structure, we continue to have
regional sales team members
fully integrated in the regions
and working alongside the
remaining regional organization
to deliver high quality service
to our customers. However, we
now have a stronger link and
direct reporting lines as part of a
global sales team defining a clear
direction and benchmark for a
unified organization.
The restructuring also
included further centralization
and expansion of the global
Engineering and Compliance
Management function which was
kicked off in 2022.
With a global team and unified
processes in place across all
regions, we are increasingly
benefiting from having clearly
defined roles and responsibilities,
ultimately promoting more
efficient decision-making
and workflows. Further, this
structure enables better
utilization of local specialist
resources and cross-location
knowledge sharing and support.
This not only creates a more
robust but also a scalable support
function which is suitable for the
growing organization.
Transitioning from founder-
driven to founder-inspired
In October 2023, we welcomed
Nicolai Hertz as the new Chief
Commercial Officer for TP
Aerospace which was part of
the plan for a natural transition
from the company’s founders.
After a handover period, we said
farewell to Co-founder Thomas
Ibsø at the end of 2023 as he
stepped down as President of TP
Aerospace.
With this change, TP Aerospace
completed the planned
succession for its two founders,
both of whom have stepped
down as executive directors of
the company and handed over
the leadership of the business to
the new executive management
team. Both Thomas Ibsø and
Peter Lyager remain co-owners
of TP Aerospace.
The transition marked an
important milestone in TP
Aerospace’s development and is
a testament to the organization’s
robustness and to the global
leadership who continue to lead
the company forward and build
a sustainable foundation for the
future.
Nevertheless, the ambitions
and core culture of the
company remain unchanged,
TP Aerospace continues to be
inspired by the visions and values
of the founders upon which
the company was established
15 years ago. To succeed in
transitioning to a larger-scale
company, we will actively work
on transforming and adapting
the core elements of our culture
to become scalable to the
organization that TP Aerospace
is today and aims to be in the
future.
FUELING OUR PEOPLE
& CULTURE
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
27
SUSTAINABILITY
28
Aviation is a key enabler of social, economic,
and cultural development. Being the only
mode of rapid transportation across the
world, our industry is at the center of global
connectivity. But air travel has its impacts,
and our sustainability efforts are focused on
ensuring that we assess, understand and take
responsibility for our share of those impacts.
While our operations pose a risk to the
environment, environmental concerns are also
increasingly posing a risk to our business. With
growing climate changes, it is necessary that the
industry transitions towards more efficient and
sustainable solutions; to mitigate these risks, we
have made sustainability a part of our day-to-
day business and we take into account having a
responsible growth strategy.
Our sustainability framework focuses on areas
within Environment & Climate, People, and
Governance & Ethics. Within each area, we have
analyzed how our efforts and business model
contribute to the Sustainable Development
Goals (SDGs). Though we contribute to many
SDGs, we have identified five priority areas that
are relevant to our strategy and business model,
and where we have the potential for the most
positive contribution.
UN Global Compact
Since 2017, we have participated in the UN
Global Compact, the world’s largest voluntary
initiative for responsible business conduct.
Through this participation we committed to
aligning our business strategy and operations
with the ten universally accepted principles
within human rights including labor rights,
environment, and anti-corruption. Our overall
approach to sustainability continues to be built
on and aligned with the ten principles of the UN
Global Compact.
SUSTAINABILITY
continued
28
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
29
GOVERNANCE & ETHICS
Commitments
Provide full carbon transparency on scope 1
and 2 emissions.
Reduce carbon footprint (scope 1 and 2
emissions).
Measure and take action to reduce scope 3
emissions.
Focus areas
Commitment to sustainable growth, diversity as a quality and
to providing good and safe working conditions for employees
around the world.
Safe and healthy working conditions are a fundamental priority
at TP Aerospace, and our policy is to make safety everyone’s
business. Our employees must always feel safe without
worrying about any negative impact on their physical or mental
health as a result of their work.
TP Aerospace recognizes the value and strength of diversity
and is focusing on inclusivity and equality.
Commitments
Provide equal opportunities for all employees and
candidates.
Securing a safe and injury-free work environment.
Safeguard the human rights of the people within
our sphere of influence.
1
1
2
2
3
3
SUSTAINABILITY
Focus areas
To take leadership in ethical business conduct and always
uphold a zero tolerance policy towards corruption in our
industry.
High business ethics are at the core of who we are, and we want
to supply high-quality products to a market characterized by
fair competition.
TP Aerospace has zero tolerance towards bribery and
corruption in any form.
Commitments
Always conduct business with integrity.
Always provide employees with adequate training
and knowledge to avoid involvement in illegal
practices.
Provide an open, effective and anonymous
whistleblower scheme.
1
2
3
PEOPLE
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30
continued
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31
Waste management
Waste management and circularity
are closely linked to carbon
emissions and other environmental
impacts. Therefore, another key
focus of our environmental policy is
how we work with waste reduction
initiatives.
As leaders within aircraft wheels
and brakes, our waste management
efforts are directed towards the
proper disposal of end-of-life
components and on management
of waste generated from our
production and warehouse
operations.
If not properly managed, waste,
particularly within our maintenance
facilities, can pose a risk to the
environment. Therefore, we actively
monitor our waste activities to
ensure that we, within every
location, comply with high standards
for waste management practices.
We track the handling of all
hazardous waste in accordance with
industry standards and regulations,
and in 2023, we did not experience
any incidents related to the
unintentional discharge of waste.
In 2023, we conducted a
companywide environmental,
health and safety review, including
full due diligence audits at our
three main maintenance facilities.
The review, which was carried out
by third parties, did not identify
any major risks related to the
management of waste from our
operations. The audits resulted in
some recommendations for further
strengthening our procedures
across some of our sites. At year end,
some of these recommendations
had already been implemented while
others were in progress.
ENVIRONMENT
& CLIMATE
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
32
TP Aerospace is committed to
always being a safe and inclusive
place to work. It is our policy
to build and maintain a work
environment characterized by
respect and empowerment and to
be a place where growth is driven
by the individual’s professional
development and engagement.
With ambitious growth plans, we
are strongly guided by the need to
manage potential risks and mobilize
human potential to ensure that we
continue to have the talent to drive
and develop the company in the
future.
From the end of 2022 to the end of
2023, the global organization had
grown from 331 to 382 employees
across 12 locations and more than
50 different nationalities.
Human rights in business
Employee rights are human rights,
and our efforts and policies are all
aligned with the requirements of the
UN Guiding Principles on Business
and Human Rights. These guidelines
provide us with a framework
for understanding human rights
in a business context and for
continuously identifying, assessing,
and mitigating potential risks.
It is our policy to always have
procedures and mechanisms in
place to ensure that we do not
negatively impact the people within
our sphere of influence, and we
continuously assess human rights
risks of the countries in which
we operate. Our human rights
framework is further described and
explained in our Employee Code of
Conduct.
In 2023, our human right
assessments did not find any severe
human rights impacts. The primary
risks related to Human Rights within
TP Aerospace revolves around
diversity and occupational health
and safety. Going forward, we will
continue to conduct assessments to
ensure that we adapt to a potential
shift in the risk picture.
Diversity and inclusion
continued
2023
Top management
Total number of members 7
Underrepresented gender % 14 %
Target % 40 %
Year for meeng target 2030
PEOPLE
UNDERREPRESENTED
GENDER IN
MANAGEMENT
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
33
women at
management level
39%
Health & Safety
Due to the nature of our operations,
health and safety remains a
top management priority at
TP Aerospace. Our greatest
occupational health and safety risks
lie within our repair and warehouse
environments where our employees
work with heavy components and
machinery on a daily basis.
In 2023, we conducted a thorough
environmental, health and safety
assessment across all our facilities,
amongst other to identify potential
health and safety hazards within
our work environment. The
assessment, which was carried out
by independent consultants and
auditors, did not reveal any critical or
severe findings. For some facilities,
TP Aerospace was provided with
a list of recommendations to help
further strengthen occupational
health and safety measures and
culture. At year end, some of these
recommendations had already been
implemented while others were in
progress.
During the year, a few lost-time
injuries were recorded across
our global organization. These
resulted from the use of incorrect
lifting techniques, tripping and
finger injury. Action was taken to
remediate all workplace incidents.
We consider the number of
incidents in 2023 to be at a
reasonable level and within our
target. However, we adhere to the
principle that no injury is acceptable,
and thus always aim for an incident-
free work environment.
PEOPLE
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
34
We are committed to supplying
high-quality products to a market
characterized by fair competition.
At any point in time, it is our policy
to promote high business ethics and
to conduct business in an honest,
transparent, and fair manner.
As a result of the highly global and
dynamic nature of our industry,
exposure to corruption is a risk
to our business. To mitigate this,
all employees are subject to our
Employee Code of Conduct, through
which we guide employees regarding
our principles and on how to avoid
involvement in any unethical and
illegal practices.
Corporate governance
Our principles for good governance
are based on our Articles of
Association and governed by
our Board of Directors and our
Executive Management team. We
align our corporate governance
efforts with the “Recommendations
on Corporate Governance” issued
by the Danish Committee on
Corporate Governance. This is
achieved by maintaining an ongoing
dialog with our owners and other
stakeholders, reporting results
monthly, and facilitating an ongoing
strategic development process that
creates value for our stakeholders.
We are further subject to the
guidelines issued by the Danish
private equity association Active
Owners Denmark, of which our
owners, CataCap is a member.
These guidelines recommend
extended coverage in several
areas in annual reports, including
corporate governance, financial risk,
employee relations and strategy.
Anti-bribery and corruption
TP Aerospace has a zero-tolerance
policy towards corruption and
bribery in any form. Our policy
is built on the United Nations
Convention against Corruption
and various national laws, including
the UK Bribery Act and is designed
to secure the highest level of
compliance across our global
operations.
Through our Anti-bribery &
Corruption Policy, Whistleblower
Policy and employee Code
of Conduct, we set forth our
commitments, responsibilities and
ethical obligations as a company and
provide guidance to our employees
and anyone else acting on behalf of
TP Aerospace. These further cover
topics such as gifts and hospitality
and the duty to report any concerns
or suspected policy breaches.
To mitigate the potential risk of
non-compliance, we have various
procedures and control mechanisms
in place.
Throughout 2023, we continued
our efforts to widen our employees’
awareness of bribery and
corruption challenges as well as of
relevant legislation. This included
continuous awareness campaigns
of relevant policies, guidelines,
and whistleblower scheme as well
as mandatory recurring anti-
corruption and bribery training
for all employees in positions
where they are at risk of potential
exposure to bribery and corruption.
The training is aligned with our
policy commitments and is regularly
updated to ensure continued
compliance with various anti-
corruption legislation.
In 2023, a few whistleblower
cases were reported through
the confidential and anonymous
whistleblower portal. All were
managed and processed in
accordance with our Whistleblower
Policy and Guidelines. Going
forward, we will continue our efforts
to increase awareness of anti-
bribery and corruption risks and to
promote and encourage the proper
use of our Whistleblower scheme.
GOVERNANCE & ETHICS
“
continued
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
35
Accounting Principles - Energy
Consumption and GHG reporting
Our own energy consumption comes from our
use of natural gas, gasoline, diesel, electricity
and district heating. Reported consumptions
are based on meter readings and invoices.
Calculation of energy contents are based on
the latest published DEFRA statistics.
Scope 1 and 2 emission conversion factors: A.
Electricity: We use site-specific or actual local
CO2 conversion factors where available, and
if not available, the latest published country
specific factors from the International Energy
Agency. B. Liquid and gaseous fuels: We use
the latest published GHG conversion factors
from DEFRA. C. District heating: We use
site-specific or actual local CO2 conversion
factors where available, and if not available, we
estimate emissions based on emission levels in
the specific country.
Emissions are calculated and reported in
accordance with the Greenhouse Gas (GHG)
Protocol.
All companies within the TP Aerospace Group
are included in the reporting scope. Due to
ongoing development of our data collection
processes, comparison figures from previous
years may include minor adjustments since first
reported.
OTHER SUSTAINABILITY
INFORMATION
Topic Page Reference
Section 99A
Business model pp. 3
Policies, actions, risks, KPIs and performance Environmental and climate matters - pp. 30
Social matters, pp. 33
Respect for human rights incl. labor rights - pp. 32
Anti-corruption and bribery, pp. 35
Section 99B
Target for the underrepresented gender in
management
pp. 32
Section 99D
Data Ethics pp. 34
NON-FINANCIAL DISCLOSURE REQUIREMENTS AS PER
THE DANISH FINANCIAL STATEMENTS ACT
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
36
RISK
MANAGEMENT
37
During volatile times, risk management
becomes core to responding, managing, and
recovering from difficult and unforeseen
events. This has also been the case for TP
Aerospace during the past few years, and
therefore we do not view risk management
as risks we need to avoid, but rather as risks
we need to be aware of. Our approach to risk
management is key to remaining resilient
towards challenging market conditions.
Risk management is fully integrated into
the strategic and operational activities in
TP Aerospace, and with a risk policy and
procedures in place, we have a systematic
approach to efficient risk management,
allowing us to identify risk early and
proactively work to prevent an increase
in exposure. With our risk management
structure, we ensure proper and efficient
identification, assessment, and mitigation of
risks to reduce the likelihood of unforeseen
events causing harm to TP Aerospace, our
people, our business model or our strategy.
Risk is continuously identified and monitored
by the Executive Management and presented
to the Audit Committee who monitors the risk
management procedures in advance of the
non-executive board review. Identified risks
are assessed based on their potential impact
on our business and the likelihood of the risk
materializing. The most significant risks are
reported to the Board of Directors. The key
risk areas related to TP Aerospace’s business
are presented in the matrix and described
further on the following pages.
RISK MANAGEMENT
1
1
2
3
4
5
2 3 4 5
G
C
H
I
D
B
P
Q
L
J
K
F
A
R
M
O
N
E
Potential Impact to TP Aerospace
Likelihood of Risk Occuring
Risk Matrix
Commercial
A Component availability
B Market
C Oil prices
IT
D Cybersecurity
Financial
E Liquidity
F Credit
G Currency
H Inflation
Sustainability
I Environmental
J Anti-corruption
People
K Qualified employees
L Occupational Health & Safety
Operating
M MRO Capacity
N Supply Chain
O Safety
P Asset Security
Q Quality
R Geopolitics
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
38
continued
Risk
A Component availability
B Market
C Oil prices
D Cybersecurity
E Liquidity
F Credit
Description of risk
Lack of available piece parts, tires and wheels and
brakes in the market.
Risk related to market and competitive trends.
High oil prices have an impact on airlines’ operating
costs and profitability.
Disruptions to our IT systems, especially cyber-
attacks, pose a risk to our business and our industry
in general.
The risk of not being able to meet our future cash
flow needs.
The risk of incurring a financial loss if a customer
or counterparty fails to fulfill their contractual
obligations.
Risk control measures
Our strong market position enables us to cooperate closely with key stakeholders in the industry to
ensure a sufficient influx of aircraft components and maintain a considerable inventory level at any time.
Diversification is core to our strategy and to mitigating our portfolio and market risk. We have a high
level of geographic diversity while we also secure product diversity through our various offerings and a
contract portfolio spanning widely across passenger and cargo aircraft.
The potential impact for TP Aerospace is considered low due to limited correlation between oil prices
and demand for repair services.
Continuous improvements of procedures pertaining to cyber security, i.e., through cyber security
awareness training, cyber vulnerability assessments, security testing, and disaster recovery plans. To
mitigate the potential impacts of an attack, we have disaster recovery procedures in place, which are
tested on an ad hoc basis.
We continuously assess and monitor capital resources and liquidity to meet our existing and future
obligations, including securing required loan facilities, when necessary. Also, we work in a structured
way with cash management to ensure timely collection of receivables from customers and timely
settlement of our obligations to vendors. If any additional liquidity is needed, our owners hold a strong
financial position.
Our diverse and fragmented customer portfolio together with our credit and collection policies,
including continuous risk assessments, allow us to take the necessary precautions to mitigate this risk.
KEY RISK
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
39
KEY RISK
continued
Risk
G Currency
H Inflation
I Environmental
Risk
J Anti-corruption
K Qualified employees
L Occupational
Health & Safety
Description of risk
TP Aerospace’s functional currency is USD, and
currency risk from operations is mainly towards
DKK and EUR.
The effect of inflation and the increased pressure on
the cost of materials, products, and resources.
With the increasing focus on climate change from
society and authorities, the industry in general is
increasing its requirements for companies to take
action to reduce their carbon footprint and ensure
carbon transparency.
The risk of being involved in or associated with illegal
or unethical acts within our company or value chain,
potentially leading to criminal action against TP
Aerospace or reputational damage.
Risk related to a potential shortage of qualified
employees.
The safety of our employees is our highest priority as
incidents could have serious consequences for our
staff, operations, and TP Aerospace’s reputation. The
biggest safety risk is in our repair shops.
Risk control measures
The typical exposure towards currencies other than USD is not deemed significant. Contracts with our
customers and key suppliers are usually denominated in USD.
We continuously review and reflect our cost base, including inflation impact in our pricing while at the
same time focusing on optimizing our operations to remain competitive.
We work in a structured way with environmental concerns throughout TP Aerospace, and since 2021
we have reported our carbon footprint in accordance with the Greenhouse Gas protocol, aiming to
create carbon transparency and working actively to reduce our footprint. This is also anchored in our
commitment
Through our Anti-Bribery and Corruption Policy, we define the minimum standards of conduct that
all employees must abide by. Our focus is on creating awareness about our zero-tolerance policy and
training our employees to identify illegal or unethical situations and report potential concerns.
Through various initiatives, we continuously work to raise the skill level of our workforce and
strengthen our employer brand to attract the right talent. The risk is continuously assessed by Executive
Management to ensure that appropriate mitigation efforts are put in place in due time.
Through our safety management system, we manage safety risks in the workplace by conducting regular
risk assessments of the different workstations, implementing new policies and procedures, and by
increasing employees’ awareness of safety risks and appropriate safety behavior.
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
40
KEY RISK
Risk
M Repair capacity
N Supply chain
O Safety
P Asset security
Q Quality
Quality
R Geopolitics
Description of risk
The risk of our repair capacity not meeting market
demands or our sales expectations
Disruptions and imbalances in the global supply
chains may lead to material shortages and an
increasing pressure on costs.
Hull losses as well as liability for passenger injuries,
environmental and third-party damage caused by
aircraft accidents related to TP Aerospace.
Damage to our stock could potentially have a critical
financial impact on our business.
Failing to obtain or maintain the necessary approvals
to stay in operation and/or defects in product quality
Risk of significant geopolitical escalations resulting in
increased sanctions and trade barriers.
Risk control measures
By continuously optimizing our operational model and footprint, we continue to expand and scale our
capacity to match market demands. In 2023, we established two new repair facilities in Australia and
Eastern Europe as a response to the growing demand.
We work closely with our suppliers to ensure that we monitor changes in lead times and set our
replenishment levels accordingly. We further manage this risk by maintaining a stock of the most
relevant part numbers in Distribution to support customers as well as our own repair activities.
We live up to the highest quality and safety standards of some of the world’s most recognized aviation
authorities, including the FAA and EASA. In case of an incident, our aviation liability insurance provides
coverage for financial damages.
We maintain an appropriate stock level at various facilities worldwide, thereby mitigating the potential
risk of asset damage on our delivery performance. Our assets are generally secured through insurance
taken out with well-established insurance companies.
Policies, procedures, and systems are in place to ensure that our operations and products live up to the
highest quality standards and to continuously assess and improve our quality procedures.
We continuously assess our commercial and operational footprint in light of the geopolitical risks across
the world.
Further, we maintain an agile business model enabling us to react quickly to changing circumstances.
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
41
MANAGEMENT
42
BOARD OF DIRECTORS
continued
Flemming Jensen
Chairman
Born 1959, Appointed by CataCap
Member since 2017
Peter Lyager
Member & Co-founder
Born 1971, Appointed by Peter Lyager and
Thomas Ibsø through their respective holding
companies
Member since 2022
Flemming holds the position of CEO of
DSB, the Danish Railways, but brings
almost 30 years’ experience from
aviation. He is a trained pilot from the
Royal Danish Air Force and spent almost
10 years as a fighter pilot. He entered
the commercial aviation industry in the
‘80s, first with Sterling Airways and
later SAS as Captain and Chief Pilot,
respectively. Before joining DSB in
2015, Flemming held the position of
COO of SAS for several years.
Peter is a partner in the Danish private
equity fund CataCap and has a strong
operational background. He holds an
Executive MBA from the Cranfield
School of Management and a master’s
degree in Accounting from Copenhagen
Business School. Throughout his career,
he has gained extensive experience
within private equity, but has also gained
insight into the aviation industry as CFO
of FLS Aerospace/SR Technics UK.
Peter held the position of CEO of TP
Aerospace from the company’s start in
2008 until 2021. After completing his
military service with the Royal Danish
Navy, Peter acquired a B.Sc. in Economics
and Business Administration from
Copenhagen Business School and has
since then gathered more than 25 years
of experience from the aviation industry.
Peter stepped down as CEO at the end
of 2021, transitioning to a non-executive
position in the Board of Directors in March
2022.
Peter Ryttergaard
Deputy Chairman
Born 1970, Appointed by CataCap
Member since 2017
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43
BOARD OF DIRECTORS
Andrew Hoad
Member
Born 1963, Appointed by CataCap
Member since 2017
Vilhelm Hahn-Petersen
Member
Born 1960, Appointed by CataCap
Member since 2017
Michael Humphreys
Member
Born 1964, Appointed by CataCap
Member since 2018
Nina Fisker Olesen
Member
Born 1991, Appointed by Kirk Kapital
Member Since 2019
Andrew is an aviation veteran, having
been in the industry for more than half
his life. He is particularly strong in the
technical aspects of aviation and holds
a degree in Mechanical Engineering.
Throughout his more than 30 years in
the industry, Andrew has held various
positions. Most recently, he comes
from 14 years as Senior Vice President,
Engineering, at Emirates in Dubai.
Andrew is also currently Chairman of
MAAS Aviation and Non-Executive
Director of Aerfin Ltd.
Vilhelm is a partner in the Danish
private equity fund CataCap and he is
experienced in strategic and operational
management from both Danish and
international business environments.
He holds a master’s degree in Political
Science from Aarhus University and
has several years’ experience from the
aviation industry, first as CEO of FLS
Aerospace and later as COO of easyJet.
Since obtaining a BSc. in Aeronautics
and Astronautics from the University
of Southampton, Mike has held a
number of senior executive positions
with aircraft maintenance providers
including CEO of FLS Aerospace, EVP of
Component Services at SR Technics and,
most recently, President of Airinmar.
Through more than 30 years’ experience
in the commercial aviation aftermarket,
Mike has obtained strong skills in
strategy and business development.
Nina is Investment Director in the
Danish family-owned investment
company Kirk Kapital. Nina serves
on the Board of Cookie Information,
Ellepot, Globeteam, Mobilhouse,
and TPS Rental Systems. She holds
a master’s degree in Business
Administration, Finance and Accounting
from Copenhagen Business School, and
worked in Nordea Corporate Finance
before joining Kirk Kapital in 2017.
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
44
EXECUTIVE
MANAGEMENT
Nikolaj Lei Jacobsen Born 1983
Nikolaj joined TP Aerospace as CFO in
2018, before transitioning to COO in
2020. In January 2022, he took on the role
of CEO after Peter Lyager.
Nikolaj holds an MSc in Business
Administration from Aarhus University
and is an experienced leader from
various positions in large international
corporations. Nikolaj’s specialties revolve
around corporate strategy and finance.
Tinneke Torpe Born 1976
Tinneke joined TP Aerospace as CFO in
October 2021. Tinneke holds an MSc in
Business Economics and Auditing from
Copenhagen Business School and has
more than 20 years’ experience from
various senior finance positions, both in
Denmark and abroad. Besides her extensive
background within financial reporting,
controlling, operational finance, risk
management and governance, Tinneke’s
specialties include process optimization
through technology.
Felix Ammann Born 1963
Felix Ammann joined TP Aerospace in
January 2023. Felix has over 30 years
of extensive aviation experience, most
recently from a position as CEO of
RUAG MRO International. Before this,
he spent 27 years in various positions in
SR Technics Switzerland, most recently
as EVP Global Component Services.
He has a strong track record of leading
large operations focusing on all areas
relating to the provision of a high-quality
service to customers.from the MRO
aftermarket.
Nicolai Hertz Born 1967
Nicolai Hertz joined TP Aerospace
in October 2023. He brings almost
30 years of experience from the
aviation industry from both Satair, SAS
Component Group and ST Aerospace.
Most recently, he was with Satair for
15 years, most recently in the role of
Head of Used Service Material & Senior
Vice President Business Development
/ Strategy. He brings extensive
commercial experience and knowledge
from the MRO aftermarket.
CEO
COO
CFO
CCO
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
45
CONSOLIDATED
FINANCIAL
STATEMENTS
46
TABLE OF
CONTENTS
CONSOLIDATED FINANCIAL STATEMENTS
Key figures ............................................................................................................................................................................................................................... 47
Profit and loss ................................................................................................................................................ .........................................................................48
Statement of comprehensive income .........................................................................................................................................................................48
Balance sheet .......................................................................................................................................................................................................................... 49
Statement of changes in equity ......................................................................................................................................................................................50
Cash flow statement ........................................................................................................................................................................................................... 51
Notes ........................................................................ ................................................................................................................................................................ 52
PARENT COMPANY FINANCIAL STATEMENTS
Profit and loss ................................................................................................................................................ .........................................................................83
Statement of comprehensive income .........................................................................................................................................................................83
Balance sheet .......................................................................................................................................................................................................................... 84
Statement of changes in equity ......................................................................................................................................................................................85
Cashflow statement ............................................................................................................................................................................................................ 86
Notes ........................................................................ ................................................................................................................................................................ 87
SIGNATURES
Statement by the Board of Directors and Executive Management ............................................................................................................. 94
Independent Auditors’ Report .......................................................................................................................................................................................95
47
KEY FIGURES
2023
USD’000
2022
USD’000
2021
USD’000
2020
USD’000
2019
USD’000
Financial highlights
Prot and loss accounts
Revenue 179,661 147,044 88,815 67,665 119,267
Gross prot 101,854 85,077 53,144 40,430 64,984
Operating prot before special items 18,803 21,507 6,544 414 12,059
Operating prot after special items 12,848 19,385 4,524 -6,436 6,971
Net nancials -8,368 -5,134 -2,523 -7,469 -3,927
Prot for the period 2,021 11,695 1,504 -11,370 2,184
Balance sheet
Non-current assets 126,324 117,289 107,215 116,048 108,665
Additions to tangible assets 55,069 51,280 27,351 30,214 48,528
Total assets 223,420 228,128 189,872 198,079 201,329
Total equity 105,423 103,339 91,861 90,163 89,650
Cash ow
Net cash ow from operating activities 19,569 4,751 14,543 -2,677 5,257
Net cash ow from investing activities -12,774 -14,374 -6,181 -9,466 -19,306
Cash ow from nancing activities -7,269 10,642 -7,711 11,523 13,577
FTEs (full me equivalents)
Average number of FTEs 375 281 234 260 278
Financial raos
Gross margin (%) 56.7% 57.9% 59.8% 59.8% 54.5%
EBIT before special items 10.5% 14.6% 7.4% 0.6% 10.1%
EBIT after special items 7.2% 13.2% 5.1% -9.5% 5.8%
Return on equity (%) 1.9% 12.0% 1.7% -12.6% 2.5%
Equity ratio (%) 47.2% 45.3% 48.4% 45.5% 44.5%
For a denition of nancial ratios and special items a reference is made to note 1 - Accounting policies.
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
48
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
1 JANUARY - 31 DECEMBER
Notes 2023
USD’000
2022
USD’000
Prot for the period 2,021 11,695
Other comprehensive income
Exchange differences on translation of subsidiaries (net) 63 -225
Cash ow hedge 23 0 9
Tax on other comprehensive income 0 -1
Other comprehensive income for the period, net of tax 63 -217
Total comprehensive income for the period 2,084 11,478
CONSOLIDATED STATEMENT
OF PROFIT AND LOSS
1 JANUARY - 31 DECEMBER
Notes 2023
USD’000
2022
USD’000
Revenue 3 179,661 147,044
Cost of sales -77,807 -61,967
Gross prot 101,854 85,077
Other income 4 -27 3,559
Other external expenses -10,857 -7,837
Staff costs 5 -27,238 -20,603
Depreciation, amortisation and impairment losses 6 -44,929 -38,689
Operang prot before special items 18,803 21,507
Special items 8 -5,955 -2,122
Operang prot aer special items 12,848 19,385
Financial income 9 2,589 4,560
Financial expenses 10 -10,957 -9,694
Prot before tax 4,480 14,251
Tax for the period 11 -2,459 -2,556
Prot for the period 2,021 11,695
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
49
CONSOLIDATED BALANCE
SHEET 31 DECEMBER
CONSOLIDATED BALANCE
SHEET 31 DECEMBER
Notes 2023
USD'000
2022
USD'000
Intangible assets 12 50,396 51,211
Property, plant and equipment 13, 14 74,507 64,227
Deferred tax asset 15 1,421 1,851
Total non-current assets 126,324 117,289
Inventories 16 69,347 74,648
Trade receivables 17 20,790 21,964
Other receivables 2,794 2,285
Prepayments 1,198 8,501
Cash 2,967 3,441
Total current assets 97,096 110,839
Total assets 223,420 228,128
Note 2023
USD'000
2022
USD'000
Share capital 18 651 651
Share premium 64,441 64,441
Reserve for exchange rate translation -300 -363
Retained earnings 40,631 38,610
Total equity 105,423 103,339
Borrowings 19 75,024 79,509
Lease liabilities 14, 19 6,861 7,436
Provisions 20 2,756 2,346
Total non-current liabilies 84,641 89,291
Borrowings 19 3,559 3,597
Lease liabilities 14, 19 2,548 2,217
Trade payables 15,989 18,763
Tax payables 2,157 2,174
Related party payables 529 448
Other payables 7,739 5,491
Prepayments from customers 835 2,808
Total current liabilies 33,356 35,498
Total liabilities 117,997 124,789
Total equity and liabilities 223,420 228,128
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
50
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
Share capital
USD’000
Share premium
USD’000
Reserve for exchange
rate translation
USD’000
Reserve for cash
ow hedges
USD’000
Retained earnings
USD’000
Total
USD’000
Equity at 31.December 2021 651
6
4,441 -138 -8 26,915 91,861
Prot for the period 01.01.2022 - 31.12.2022 0 0 0 0 11,695 11,695
Cash ow hedges 0 0 0 8 0 8
Exchange rate differences 0 0 -225 0 0 -225
Total comprehensive income for the period 0 0 -225 8 11,695 11,478
Equity at 31 December 2022 651
-363 0 38,610 103,339
Prot for the period 01.01.2023 - 31.12.2023 0 0 0 0 2,021 2,021
Cash ow hedges 0 0 0 0 0 0
Exchange rate differences 0 0 63 0 0 63
Total comprehensive income for the period 0 0 63 0 2,021 2,084
Equity at 31 December 2023 651 64,441 -300 0 40,631 105,423
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
51
CONSOLIDATED CASH FLOW STATEMENT
1 JANUARY - 31 DECEMBER
Notes 2023
USD’000
2022
USD’000
Operating profit after special items
Depreciation and amortization 28 5,364 4,899
Change in net working capital 26 11,340 -12,691
Cash ow from primary operating activities 29,552 11,593
Interests paid -7,937 -6,142
Tax paid -2,046 -700
Cash ow from operang acvies 19,569 4,751
Purchase of property, plant and equipment -12,646 -13,879
Purchase of intangible assets -34 -224
Other non-cash changes -94 -271
Cash ow used for invesng acvies -12,774 -14,374
Proceeds from borrowings 27 0 12,408
Repayments of borrowings 27 -4,954 0
Proceeds from intergroup borrowings 81 161
Repayments of lease liabilities -2,396 -1,927
Cash ow from nancing acvies -7,269 10,642
Net cash ow for the year -474 1,019
Cash and cash equivalents, beginning of the year 3,441 2,422
Cash and cash equivalents at end of the year 2,967 3,441
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
52
NOTES
Notes
1. Accounting policies
2. Critical accounting estimates and judgements
3. Revenue
4. Other income
5. Staff costs
6. Depreciation, amortisation and impairment losses
7. Audit fees
8. Special items
9. Financial income
10. Financial expenses
11. Tax on profit for the year
12. Intangible assets
13. Property, plant and equipment
14. Leases
15. Deferred tax asset
Notes
16. Inventories
17. Trade receivables
18. Share capital
19. Borrowings
20. Provisions
21. Related parties
22. Commitments and contingent liabilities
23. Financial risk management
24. Financial assets and liabilities
25. Events after the balance sheet date
26. Changes in net working capital
27. Changes in liabilities arising from financing activities
28. Depreciations and amortization
29. Exemption from audit of foreign subsidiaries
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
53
1. ACCOUNTING
POLICIES
The consolidated financial statements include
the parent company TPA Holding I A/S and
subsidiaries in which TPA Holding I A/S directly
or indirectly holds more than 50% of the voting
rights or otherwise has a controlling interest.
The Consolidated financial statements for
TPA Holding I A/S have been prepared in
accordance with IFRS accounting standards
as issued by the International Accounting
Standards Board (IASB) and as adopted by the
European Union as well as additional Danish
disclosure requirements applying to entities of
reporting class C (large).
The accounting policies applied remain
unchanged from last year.
General information on recognition
and measurement
The financial statements have been prepared
under the historical cost method.
Change in accounting estimates
There has been no changes in accounting
estimates in the financial year 2023.
New standards implemented
in the financial year
No significant new IFRSs or IFRIC
interpretations have been implemented
in 2023 affecting the recognition and
measurement in the financial statements.
New standards not yet effective
There are no IFRSs or IFRIC interpretations
that are not yet effective that is expected to
have a material impact on the Company.
Basis of consolidation
Subsidiaries are all entities over which the
Group has control. The Group controls an
entity when the group is exposed to, or has
rights to, variable returns from its involvement
with the entity and has the ability to affect
those returns through its power to direct
the activities of the entity. Subsidiaries are
fully consolidated from the date on which
control is transferred to the Group. They are
deconsolidated from the date that control
ceases.
On consolidation, elimination is made of
intra-group income and costs, shareholdings,
intra-group balances and dividend and realised
and unrealised profits or losses on transactions
between the consolidated companies.
Non-controlling interests in the results and
equity of subsidiaries are shown separately
in the consolidated statement of profit and
loss, statement of comprehensive income,
statement of changes in equity and balance
sheet respectively.
Foreign currency translation
Functional and presentation currency
Items in the financial statements of each of
the reporting companies of the Group are
measured in the currency of the primary
economic environment in which the company
operates (the functional currency).
The financial statements are presented in US
Dollars (USD), due to the Group’s international
activities, which is also the parent company’s
functional currency. The financial statements
have been rounded to the nearest thousand.
Transactions and balances
Foreign currency transactions are translated
into the functional currency using the exchange
rate at the dates of the transactions. Foreign
exchange gains and losses resulting from the
settlement of such transactions and from the
translation of monetary assets and liabilities
denominated in foreign currencies at year
end exchange rates are generally recognised
in the statement of profit and loss. They are
deferred in equity if they relate to qualifying
cash flow hedges and qualifying net investment
hedges or are attributable to part of the net
investment in a foreign operation.
Foreign exchange gains and losses that relate
to borrowings are presented in the statement
of profit and loss, within finance costs.
Group companies
The results and financial position of all the
group entities that have a functional currency
different from the presentation currency are
translated into the presentation currency as
follows:
a) Assets and liabilities for each balance sheet
presented are translated at the closing rate at
the date of that balance sheet;
b) Income and expenses for each income
statement are translated at average exchange
rates; and
c) All resulting exchange differences are
recognised in other comprehensive income.
Goodwill and fair value adjustments arising on
the acquisition of a foreign entity are treated
as assets and liabilities of the foreign entity
and translated at the closing rate. Exchange
differences arising are recognised in other
comprehensive income.
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
54
Business combinations
The acquisition method of accounting is used
to account for all business combinations,
regardless of whether equity instruments or
other assets are acquired. The consideration
transferred for the acquisition of a subsidiary
comprises the:
• fair values of the assets
transferred
• liabilities incurred to the former
owners of the acquired business
• equity interests issued by the
group
Identifiable assets, liabilities and contingent
liabilities of acquired businesses are measured
initially at fair values at the acquisition date.
Acquisition-related costs are expensed as
incurred.
The excess of the consideration transferred
over the fair value of the net identifiable
assets acquired is recorded as goodwill. If
those amounts are less than the fair value
of the net identifiable assets of the business
acquired, the difference is recognised directly
in the statement of profit and loss as a bargain
purchase.
Revenue
In the Components division, revenue consists
of sale of repaired or overhauled wheels and
brakes to different types of aircraft. In the
Distribution division, revenue consists of sale
of piece parts and assemblies to different
type of aircraft. In the Programs division, the
Group delivers repaired or overhauled wheels
or brakes to its customers either as a service
(CFR) or as sale of the repaired or overhauled
wheel or brake (LFL). In the Programs division,
the Group exchanges the core units of the
wheel or brake (core asset) with its customers’
core unit, and the sale therefore consists of the
repair or overhaul of the wheel or brake. Other
revenue consists of leasing out wheels and
brakes to airlines and of maintenance, repair
or overhaul of wheels or brakes for customers
(MRO).
Sale of goods in Components, Distribution,
LFL business and MRO
Sales is recognized at a point in time, when
control of the wheels or brakes has transferred
to the customer, being when they are delivered
to the customer and there is no unfulfilled
obligation that could affect the customers’
acceptance of the products. Delivery occurs
when the wheels and brakes are handed over
to the customer at the company’s shop or
when the customer takes delivery from an
in-house stock of parts and thereby accepts
the products in accordance with the sales
contract. In the MRO business, revenue is
recognized when the maintenance, repair or
overhaul is finalized, delivered and invoiced to
the customer.
Distribution revenue consists of sale of factory
new piece parts and assemblies on behalf of
the OEMs, and revenue is recognized when the
piece parts and assemblies are delivered and
invoiced to the customer.
There is no volume discounts or other variable
payments in these contracts and no element
of financing. Revenue is therefore recognized
with the amount specified in the contract
Sale of services in the CFR business
The CFR business provides services in the form
of repair and overhaul of wheels and brakes.
Revenue is recognized in the period in which
the services are rendered. In the CFR business,
the service is delivered over the period where
the customer uses the wheels and brakes on its
aircraft. Revenue is recognized based on the
amount of cycles (landings) that the customers
have incurred with the wheels and brakes in
the given period.
Any increases or decreases in estimated
cycles and associated costs are reflected in the
statement of profit and loss in the period in
which the circumstances that give rise to the
revision become known by management.
The Group fulfils its performance obligations
upon delivery at one point in time or over a
short period of time. The payment terms follow
the industry standards and are individually
negotiated. No contracts have a significant
financing element and no contracts comprise
variable consideration elements. The Group
has no obligations for returns and refunds.
Cost of sales of goods
Costs of sales for the financial year are
measured at cost, adjusted for ordinary
inventory write-downs. Costs of sales include
amounts for the restoration liability which
the Group has for customer owned assets
that could be included in some CFR programs
(mutual pools) and is based on an estimate of
the expected repair costs for those assets.
Other external expenses
Other external expenses include expenses
relating to the Group’s ordinary activities,
including expenses for premises, consultancy
and advisory fees, office supplies, marketing
costs, losses on receivables, etc. This
also includes write-downs of receivables
recognized in current assets.
Other operating income and expenses
Other operating income and other operating
expenses comprise items of a secondary nature
to the main activities of the Company.
Staff costs
Staff costs comprise salaries and wages,
pensions, bonuses, social security
contributions and other staff related costs for
companies’ staff.
Depreciation, amortisation
and impairment losses
Depreciation, amortisation and impairment
losses relating to intangible assets and
property, plant and equipment comprise
depreciation, amortisation and impairment
losses for the financial year, calculated on the
basis of the residual values and useful lives if
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
55
the individual assets and impairment testing
as well as gains and losses from the sale of
intangible assets as well as property, plant and
equipment.
Special items
Special items are disclosed separately in the
financial statements where it is necessary to
do so to provide further understanding of the
financial performance of the Group. They are
material items of income or expense that have
been shown separately due to the significance
of their nature or amount.
Financial income
Financial income comprises interest income,
including interest income on receivables
from group enterprises, net capital gains on
securities, payables and transactions in foreign
currencies, amortization of financial assets
as well as tax relief under the Danish tax
legislation etc.
Financial expenses
Financial expenses comprise interest
expenses, including interest expenses on
payables to group enterprises, net capital
losses on securities, payables and transactions
in foreign currencies, amortization of financial
liabilities as well as tax surcharge under the
Danish tax legislation etc.
Income tax and deferred tax
The Company is jointly taxed with the parent
company CC Green Wall Invest ApS and other
Danish companies. The Danish income tax
payable is allocated between the jointly taxed
Danish companies based on their proportion
of taxable income (full absorption including
reimbursement of tax deficits). The jointly
taxed companies are taxed under the Danish
tax legislation. Additions, deductions and
allowances are recognized under financial
income or financial expenses.
The income tax expense or credit for the period
is the tax payable on the current period’s
taxable income based on the applicable income
tax rate for each jurisdiction adjusted by
changes in deferred tax assets and liabilities
attributable to temporary differences and to
unused tax losses.
The current income tax charge is calculated
on the basis of the tax laws enacted or
substantively enacted at the balance sheet
date in the countries where the Company and
its subsidiaries operate and generate taxable
income. Management periodically evaluates
positions taken in tax returns with respect to
situations in which applicable tax regulation
is subject to interpretation. It establishes
provisions, where appropriate, on the basis
of amounts expected to be paid to the tax
authorities.
Deferred income tax is recognised on
temporary differences arising between the
tax bases of assets and liabilities and their
carrying amounts in the Consolidated Financial
Statements. However, deferred tax liabilities
are not recognised if they arise from the initial
recognition of goodwill; deferred income
tax is not accounted for if it arises from the
initial recognition of an asset or liability in a
transaction other than a business combination
that, at the time of the transaction, affects
neither accounting nor taxable profit or loss.
Deferred income tax is determined using tax
rates (and laws) that have been enacted or
substantively enacted by the balance sheet
date and are expected to apply when the
related deferred income tax asset is realised or
the deferred income tax liability is settled.
Deferred income tax assets are recognised
only to the extent that it is probable that future
taxable profit will be available, against which
the temporary differences can be utilised.
Deferred income tax liabilities are provided
on taxable temporary differences arising
from investments in subsidiaries, except for
deferred income tax liability where the timing
of the reversal of the temporary difference is
controlled by the Group and it is probable that
the temporary difference will not reverse in the
foreseeable future.
Deferred income tax assets and liabilities are
offset when there is a legally enforceable right
to offset current tax assets against current
tax liabilities and when the deferred income
tax assets and liabilities relate to income taxes
levied by the same taxation authority on either
the same taxable entity or different taxable
entities where there is an intention to settle
the balances on a net basis.
Intangible assets
Goodwill
Goodwill arises on the acquisition of
subsidiaries and represents the excess of the
consideration transferred over the Group’s
interest in net fair value of the net identifiable
assets, liabilities and contingent liabilities of the
acquired.
For the purpose of impairment testing, goodwill
acquired in a business combination is allocated
to each of the CGU’s, or groups of CGU’s, that
is expected to benefit from the synergies of
the combination. Each unit or group of units
to which the goodwill is allocated represents
the lowest level within the entity at which the
goodwill is monitored for internal management
purposes.
Goodwill impairment reviews are undertaken
annually or more frequently if events or
changes in circumstances indicate a potential
impairment. The carrying value of goodwill is
compared to the recoverable amount, which
is the higher of value in use and the fair value
less costs of disposal. Any impairment is
recognised immediately as an expense and is
not subsequently reversed.
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
56
Customer Contracts
The customer contracts were acquired as part
of a business combination. They are recognised
at their fair value at the date of acquisition and
are subsequently amortised on a straight-line
based on the timing of projected cash flows of
the contracts over their estimated useful lives
of 10 years.
Software
Software is measured at cost less accumulated
amortisation. Software is amortised on a
straight line basis over the useful life, which is
estimated at 3 years.
Rights
Rights are measured at cost less accumulated
amortisation. Rights are amortised on
astraight line basis over the useful life, which is
estimated at 10 years, which is in accordance
with the period of the underlaying agreement
of which the rights referred to.
Impairment of non-financial assets
Intangible assets that have an indefinite useful
life (goodwill) are not subject to amortisation
and are tested annually for impairment. Assets
that are subject to amortisation are reviewed
whenever events or changes in circumstances
indicate that the carrying amount may not be
recoverable. An impairment loss is recognised
for the amount by which the asset’s carrying
amount exceeds its recoverable amount.
The recoverable amount is the higher of an
asset’s fair value less cost of disposal and
value in use. For the purposes of assessing
impairment, assets are grouped at the lowest
levels for which there are largely independent
cash inflows (cash-generating units). Prior
impairment of non-financial assets (other than
goodwill) is reviewed for possible reversal at
each reporting date.
Property, plant and equipment
Leasehold improvements, assets held for
lease and other fixtures and fittings, tools
and equipment are measured at cost less
accumulated depreciation.
Cost comprises acquisition price and costs
directly related to the acquisition until such
time as the assets are ready for use.
Depreciation on other assets, listed below, is
calculated using the straight line method to
allocate their cost or revalued amounts, net
of their residual values over their estimated
useful lives, as follows:
Leasehold improvements . . . . . . . . . . . . . 3-5 years
Other fixtures and fittings,
tools and equipment . . . . . . . . . . . . . . . . 3-20 years
Assets held for lease-out . . . . . . . . . . . . . . 20 years
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 years
Core units for wheels and brakes, included in
other fixtures and fittings . . . . . . . . . . . . . .20 years
Depreciation on assets, listed below, is
calculated using a production based method to
allocate their cost over their estimated useful
lifes. The depreciation is calculated based on
the actual usage of the asset (MRO).
The average cycles - useful life - is estimated
based on historical data and contractual
conditions in which the assets are used. The
useful life for each individual asset types is as
follows:
MRO, Steel brakes (CFR)
1,000 - 1,200 cycles
MRO, Carbon brakes (CFR)
1,400 - 1,600 cycles
MRO, Wheels (CFR)
170 - 270 cycles
The assets’ residual values and useful lives are
reviewed, and adjusted if appropriate, at the
end of each reporting period.
Gains and losses arising from disposal of
property, plant and equipment are calculated
as the difference between the sales price less
sales costs and the carrying amount at the
time of sale. Gains and losses are recognised in
the profit and loss account as other operating
income or other operating costs.
An asset’s carrying amount is written down
immediately to its recoverable amount if the
asset’s carrying amount is greater than its
estimated recoverable amount. An impairment
loss is recognised in the income statement
when the impairment is identified.
Leases and lease obligations
Assets and liabilities arising from a lease are
initially measured on a present value basis.
Lease liabilities include the net present value of
the following lease payments:
• fixed payments (including in-substance
fixed payments), less any lease incentives
receivable
• amounts expected to be payable by the
lessee under residual value guarantees
• the exercise price of a purchase option if the
lessee is reasonably certain to exercise that
option, and
• payments of penalties for terminating the
lease, if the lease term reflects the lessee
exercising that option.
The lease payments are discounted using the
interest rate implicit in the lease, if that rate
can be determined, or the Group’s incremental
borrowing rate.
Right-of-use assets are measured at cost
comprising the following:
• the amount of the initial measurement of
lease obligation
• any lease payments made at or before
the commencement date less any lease
incentives received
• any initial direct costs, and restoration costs.
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
57
Extension and termination options
Extension and termination options are included
in a number of property and equipment leases
across the Group. These terms are used to
maximise operational flexibility in terms of
managing contracts. The majority of extension
and termination options held are exercisable
only by the Group and not by the respective
lessor.
Inventories
Inventories are measured at the lower of cost
price or net realisable value. Cost consists
of the purchase price of the goods. The net
realisable value of the inventories is calculated
as the estimated selling price less completion
costs and costs incurred to execute sale.
Cost prices of goods sold are calculated based
on the sales price (or the estimated sales price
for group internal sales) and the assumed
fixed gross margin. The net realisable value of
the inventories is calculated as the estimated
selling price less completion costs and costs
incurred to execute sale.
Receivables
Receivables are initially recognized at fair
value adjusted for any transaction costs.
Subsequently, receivables are measured at
amortized cost, as the receivables are assets
held for collection of cash flows, where the
cash flows represent solely payments of
principal and interest. Amortized cost usually
corresponds to the nominal value. Write-down
is made to net realisable value to provide for
expected losses.
For trade receivables, the Group applies
the simplified approach permitted by IFRS
9 which requires expected lifetime losses to
be recognized from initial recognition of the
receivables.
Prepayments
Prepayments comprise aircraft components
purchases for Programs activities and
Components replenishment and prepayments
in advance for subsequent financial years.
Prepayments are measured at cost.
Equity
Reserve for exchange rate translation
The reserve for exchange adjustments consists
of exchange rate differences that occur when
translating the foreign subsidiaries’ financial
statements from their functional currency into
the Group’s presentation currency. On disposal
of the net investment, the reserve for exchange
adjustments of that foreign subsidiary is
recognized in the income statement. Reduction
of a net investment in a foreign operation
which does not result in loss of control is not
treated as a disposal.
Reserve for cash flow hedges
The reserve for hedge accounting consists of
the effective portion of gains and losses on
hedging instruments designated as cash flow
hedges.
Dividend distribution
Dividends are recognised as a liability at
the time of adoption at the Annaul General
Meeting.
Provisions
Lending of assets included in the programs by
customers (mutual pool) occasionally occurs
in connection with the CFR program activities.
In case that these programs end, the Company
must return similar assets in the same
condition as when the lending took place. The
provisions include an amount counterbalancing
the restoration liability based on an estimate
of the expected expenses. The liability is
recognized during the application period of
the mutual pool assets. The provisions are
recognized and measured as the best estimate
of the expenses required to settle the liabilities
at the balance sheet date. Provisions that are
estimated to mature more than one year after
the balance sheet date are measured at their
discounted value.
Borrowings
Borrowings are initially recognised at fair
value, net of transaction expenses incurred.
Borrowings are subsequently measured at
amortised cost. Any differences between
the proceeds and the redemption value are
recognised in the income statement over the
period of the borrowings using the effective
interest method.
Other liabilities
Other debt or liabilities covering trade
creditors and other debt are recognised at
amortised cost which usually corresponds to
the nominal value.
Prepayments received from
customers (contract liabilities)
Prepayments received from customers
comprise amounts received from customers
prior to delivery of the goods agreed or
completion of the service agreed.
Contract liabilities represent mainly obligations
in relation to CFR programmes where there
may be an obligation to maintain, repair and
overhaul (MRO) customer owned units.
Cash flow statement
The cash flow statement shows the
consolidated cash flows during the year
distributed on operating, investing and
financing activities, changes in cash and cash
equivalents at the beginning and at the end of
the year.
Cash flows from operating activities are
calculated using the indirect method and
comprise profit for the year adjusted for
non-cash items, changes in working capital,
interest paid and received etc., and payments
of corporate tax.
Cash flows from investing activities comprise
payments in connection with acquisitions and
divestment of businesses and purchase and
sale of enterprises, activities and fixed asset
investments as well as purchase, improvement
and sale, etc. of intangible assets and property,
plant and equipment, including acquisition of
assets held under finance lease.
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
58
Cash flows from financing activities comprise
changes in the size or composition of the
contributed capital and related costs as well as
the raising of loans, inception of finance leases,
instalments on interest-bearing debt, purchase
of treasury shares, and payment of dividend.
Cash and cash equivalents
In the consolidated cash flow statement, cash
and cash equivalents include cash in hand and
bank deposits.
Consolidated Key Figures
The key figures and financial ratios have been
prepared on a consolidated basis. The financial
ratios have been calculated in accordance with
the following definitions:
• Gross margin is calculated as the gross
profit divided by net revenue.
• Special items are defined as income and
expenses of a special nature in terms of the
Group’s revenue-generating activities.
• Operating profit before special items margin
is calculated as the operating profit before
special items margin divided by net revenue.
• Operating profit after special items margin
is calculated as the operating profit after
special items margin divided by net revenue.
• Return on equity is calculated as the profit
or loss for the year after tax divided by the
average equity.
• Equity ratio is calculated as the equity
divided by the total assets.
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
59
2. CRITICAL
ACCOUNTING
ESTIMATES
AND
JUDGEMENTS
The Group makes estimates and assumptions
concerning the future. The resulting
accounting estimates will, by definition, seldom
equal the related actual results. The estimates
and assumptions that have a significant risk of
causing a material adjustment to the carrying
amounts of assets and liabilities within the next
financial year are addressed below.
The judgements, estimates and assumptions
made are based on historical experience and
other factors that management considers
to be reliable, but which by their very
nature are associated with uncertainty and
unpredictability. These assumptions may
prove incomplete or incorrect, and unexpected
events or circumstances may arise. The most
critical judgements, estimates and assumptions
for the individual items are described below.
The Group is also subject to risks and
uncertainties that may lead to actual results
differing from these estimates, both positively
and negatively.
Customer relations
The value of customer relations and the
expected useful life are assessed based on long-
term and stable relations with the customers
and the expected related profitability.
The measurement is based on the expected
cash flows from customer relations, costs
relating to invested capital, the tax effect and a
calculated discount rate.
The carrying amount of customer relations is
USD 1.163k at 31 December 2023.
Impairment test of goodwill
The Group annually tests whether goodwill has
suffered any impairment, in accordance with
the accounting policy stated in note 1.
The recoverable amounts of cash-generating
units have been determined based on value-in-
use calculations. These calculations require the
use of estimates.
The estimates and assumptions are based on
historical experience and other factors, such
as management but as by nature it is uncertain
and unpredictable. Due to the risks and
uncertainties which the Group is subject to,
actual outcomes may differ from the estimates
made.
Goodwill amounts to USD 46.139k and no
impairment losses have been recognised in
2023. Information on the impairment test,
hereunder critical asumptions are disclosed
and described in note 12.
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
60
Property, plant and equipment
(depreciation period)
The Group recognises its core units as
property, plant and equipment with respect
to core units included as part of the Group’s
programme activities. Core units used for the
Group’s programme activities are subject to
impairment during their useful lives that ends,
at the same time as the aircraft platform it
services, is terminated.
The depreciation period has been determined
at 20 years for these core units with a residual
value of 20%. Management’s estimate of the
expected useful lives is based on historical
experience and market data factors, but is
naturally subject to uncertainty.
The depreciation periods for core units are
reassessed every year.
Costs for maintenance, repair and overhaul
(MRO) of wheels and brakes are capitalised as
part of fixed assets related to the enterprises’
CFR programme activities and are in average
depreciated over 170 - 270 cycles in respect
of the wheels, 1,000 - 1,200 cycles in respect
of the steel brakes and 1,400 - 1,600 cycles in
respect of the carbon brakes.
The average cycles have been determined
based on historical data, corresponding to
useful life for wheels, steel brakes and carbon
brakes, respectively.
The number of cycles, for which depreciation
of maintenance, repair and overhaul (MRO) is
made, will be reassessed every year.
Valuation of inventory
Inventory is stated at the lower of cost or
market value. The Group determines cost
using the first-in, first out method. The Group
analyses its inventory levels periodically and
writes down inventory to its net realizable
value if it has become obsolete, has a cost basis
in excess of its expected net realizable value or
is in excess of expected demand (obsolescence).
There were write-downs of USD 3.1m related
to obsolescence as of 31 December 2023
(2022: USD 2.7m).
Provisions
Lending of assets included in the programs
by customers (mutual pool) occasionally
occurs in connection with the CFR program
activities. In case that these programs end,
the Company must return similar assets in the
same condition as when the lending took place.
The provisions for such restoration liabilities
include an amount counterbalancing the
expected expenses. The amount is based on an
estimate.
Revenue
Revenue related to programs is recognized as a
service exclusive of the value of the core assets
that are exchanged during delivery within the
program as they are considered exchange
of assets of similar nature and value. Cost of
the delivered core asset is transferred for
recognition as cost of the core asset received.
For assets to be included in programs, the
allocation of total cost between the core
element and the MRO element, respectively, is
determined at the first exchange based on an
estimate.
The sales value of the CFR programs is
recognized concurrently with the customer’s
use of the asset delivered (per cycle). Cost
related to CFR programs are depreciated
over the useful life (either years or number of
cycles).
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
61
3. REVENUE
2023
USD’000
2022
USD’000
Revenue from contracts with customers 174,327 143,332
Other revenue, MRO revenue 5,334 3,712
Total 179,661 147,044
Programs 2023 CFR LFL Leasing Total
USD’000 USD’000 USD’000 USD’000
Revenue 57,081 33,409 704 91,194
Total 57,081 33,409 704 91,194
Timing of revenue recognion
At point in time 0 33,409 0 33,409
Over time 57,081 0 704 57,785
Total 57,081 33,409 704 91,194
Programs 2022 CFR
USD’000
LFL
USD’000
Leasing
USD’000
Total
USD’000
Revenue 48,795 23,545 608 72,948
Total 48,795 23,545 608 72,948
Timing of revenue recognion
At point in time 0 23,545 0 23,545
Over time 48,795 0 608 49,403
Total 48,795 23,545 608 72,948
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
62
3. REVENUE
Components, Distribuon
and Maintenance
2023
Components
USD’000
Distribuon
USD’000
Maintenance,
repair and
overhaul
USD’000
Total
USD’000
Revenue 65,410 17,723 5,334 88,467
Total 65,410 17,723 5,334 88,467
Timing of revenue recognion
At point in time 65,410 17,723 5,334 88,467
Over time 0 0 0 0
Total 65,410 17,723 5,334 88,467
Components, Distribuon
and Maintenance
2022
Components
USD’000
Distribuon
USD’000
Maintenance,
repair and
overhaul
USD’000
Total
USD’000
Revenue 57,613 12,771 3,712 74,096
Total 57,613 12,771 3,712 74,096
Timing of revenue recognion
At point in time 57,613 12,771 3,712 74,096
Over time 0 0 0 0
Total 57,613 12,771 3,712 74,096
2023
Europe, Middle
East and Africa
USD’000
Americas
USD’000
Asia Pacic
USD’000
Total
USD’000
Revenue from contracts with
customers
110,224 34,397 29,707 174,327
Other revenue, MRO revenue 329 71 4,934 5,334
Total 110,553 34,468 34,641 179,661
Timing of revenue recognion
At point in time 62,785 33,165 27,112 123,061
Over time 47,768 1,303 7,529 56,600
Total 110,553 34,468 34,641 179,661
2022
Europe, Middle
East and Africa
USD’000
Americas
USD’000
Asia Pacic
USD’000
Total
USD’000
Revenue from contracts from
customers
86,530 36,855 19,947 143,332
Other revenue, MRO revenue 44 15 3,653 3,712
Total 86,574 36,870 23,600 147,044
Timing of revenue recognion
At point in time 42,792 36,777 18,072 97,641
Over time 43,782 93 5,528 49,403
Total 86,574 36,870 23,600 147,044
There was no revenue recognised in the current reporting period that relates to performance
obligations that were satisfied in a prior year.
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
63
4. OTHER INCOME3. REVENUE
The group has recognised the following
revenue-related contract liabilities
2023
USD’000
2022
USD’000
Contract liabilies - Programs, CFR
Opening balance 2,346 1,910
Net additions 410 436
Closing balance 2,756 2,346
2023
USD’000
2022
USD’000
Programs, CFR 0 0
Total 0 0
2023
USD’000
2022
USD’000
Government grants -27 3,559
Total -27 3,559
There were no significant changes in the contract liability balances during the reporting period.
Revenue recognised which was included as contract liabilities at the beginning of the period:
The Group has not realised any contract liability costs in the period.
Government grants primarily contain income from relief packages.
The amount for 2023 is adjustment to previous years relief packages.
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
64
5. STAFF COSTS
2023
USD’000
2022
USD’000
Wages and salaries 23,263 17,579
Pensions 747 572
Other social security costs 2,351 1,652
Other staff costs 877 800
Total 27,238 20,603
Average number of employees 375 281
Number of shares 2023
USD’000
2022
USD’000
As at 1 January 228,543 233,143
Granted during the year 0 0
Forfeited during the year 0 -4,600
As at 31 December 228,543 228,543
2023
USD’000
2022
USD’000
Wages and salaries 1,751 1,047
Pensions 74 49
Execuve board 1,825 1,096
Remuneration of management in total:
Executive Board 1,825 1,096
Board of Directors 148 128
Total 1,973 1,224
Key Management Compensation
Key management includes Board of Directors and Executive Board. The compensation paid or
payables to key management for employee services is shown below:
Shares program
In 2023 and earlier years, employees, management and Board of Directors of TP Aerospace have
been offered the opportunity to purchase shares in TPA Green Manco ApS which is a shareholder
of TP Aerospace Group. The participants acquired the shares at an estimated market price. If an
employee leaves the Group before an exit, the company has the option to buy back the shares at
an estimated market price. As the program does not have any negative effect on the company, no
expense is recognized in the income statement.
The following table shows the number of shares granted and outstanding at the beginning and end
of the reporting period:
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
65
6. AMORTISATION, DEPRECIATION
AND IMPAIRMENT LOSSES
7. AUDIT FEES
9. FINANCIAL INCOME
8. SPECIAL ITEMS
2023
USD’000
2022
USD’000
PwC
Statutory audit 181 109
Tax assurance services 55 94
Other services 1,058 11
Total 1,294 214
Other auditors
Statutory audit 51 33
Total 51 33
2023
USD’000
2022
USD’000
Amortisation 858 1,246
Depreciation 44,071 37,443
Total
44,929 38,689
2023
USD’000
2022
USD’000
Interest income 9 1
Interest from group companies 23 9
Exchange rate adjustments 2,557 4,550
Total 2,589 4,560
2023
USD’000
2022
USD’000
Non-recurring write-downs of receivables (incl. reversals of prior year) 0 -111
Net losses related to cease of operations in Russia 159 1,012
Costs related to new operations in Czech Republic and Brisbane 2,327 98
Non-recurring restructuring of the organisation including management 0 30
Advisory and consultancy fees for special projects 1,777 0
Other non-recurring items 1,692 1,093
Total 5,955 2,122
Depreciations of USD 706k has been classified under special items and can be attributed to the
commencement of operations at new sites in Brno and Melbourne.
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
66
10. FINANCIAL EXPENSES 11. TAX ON PROFIT
FOR THE YEAR
2023
USD’000
2022
USD’000
Interest expenses 7,765 4,826
Exchange rate adjustments 3,192 4,868
Total 10,957 9,694
2023
USD’000
2022
USD’000
Current tax:
Current tax on prot for the year 1,968 2,047
Current tax on prot for previous years 61 83
Total current tax expense 2,029 2,130
Deferred tax:
Deferred tax for the year 430 1,234
Deferred tax for previous years 0 -808
Total deferred tax 430 426
Total tax for the period 2,459 2,556
Tax for the period is specied as follows:
Calculated 22% tax on prot before tax 986 3,135
Tax eects of:
Higher/lower tax rate in subsidiaries 8 -56
Current tax of prot for previous years 61 83
Deferred tax for previous years 0 -808
Interest cap limitation 918 199
Tax on other comprehensive income 0 1
Non-deductible expenses 486 2
Total 2,459 2,556
Effective tax rate 55% 18%
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
67
12. INTANGIBLE ASSETS
Impairment test for goodwill
Goodwill is monitored by management at the level of
TPA Holding I A/S as one cash generating unit.
The Group tests on an annual basis whether goodwill
has suffered any impairment. The recoverable amount
is determined based on value-in-use calculations
which require the use of assumptions. The calculations
use cash flow projections based on financial budgets
approved by management covering a nine-year period.
Cash flows beyond the nine-year period are
extrapolated using the estimated growth rates stated
in the table. These growth rates are consistent with
forecasts included in industry reports specific to the
industry in which the Group operates.
Software
USD’000
Goodwil
USD’000
Customer
relations
USD’000
Rights
USD’000
Total
USD’000
Cost:
At 01.01.2022 186 46,139 3,490 4,214 54,029
Additions during the year 224 0 0 0 224
At 31.12.2022 410 46,139 3,490 4,214 54,253
Amorsaon and impairment:
At 01.01.2022 90 0 1,629 525 2,244
Amortisation for the year 27 0 349 422 798
At 31.12.2022 117 0 1,978 947 3,042
Carrying amount 31.12.2022 293 46,139 1,512 3,267 51,211
Cost:
At 01.01.2023 410 46,139 3,490 4,214 54,253
Additions during the year 34 0 0 0 34
At 31.12.2023 444 46,139 3,490 4,214 54,287
Amorsaon and impairment:
At 01.01.2023 117 0 1,978 947 3,042
Amortisation for the year 78 0 349 422 849
At 31.12.2023 195 0 2,327 1,369 3,891
Carrying amount 31.12.2023 249 46,139 1,163 2,845 50,396
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
68
12. INTANGIBLE ASSETS
Description of assumptions
Average sales growth is the average annual growth rate over the forecast period from 2024 to 2032.
It is based on past performance and management’s expectations of market development.
Revenue projection is based on existing and new sales supporting passenger or cargo demand.
Existing passenger sales rely on leading industry experts’ views on the return profile of passenger
activity. Existing cargo sales are projected based on dialogues with customers and expectations
going forward. New customers, both within the passenger and cargo segments, are based on historic
growth combined with TP Aerospace’s current pipeline.
EBITA margin is the average margin as a percentage of revenue over the forecast period 2024 -
2032. It is based on the current sales margin levels, expectations to sales mix and expectations to
scalability improvements which positively impact EBITDA.
Marginal tax rate is the expected rate over the nine-year forecast period. It is based on current
Danish tax legislation.
Sensitivity to changed assumptions
The calculated value in use of the cash generating unit is considerably higher than the carrying
amount, and the prepared impairment test shows that goodwill and customer relations are not
impaired. In management’s opinion, no reasonable likely change to the above-mentioned assumptions
will imply that the carrying amount of the cash generating unit will exceed the value in use
significantly.
Impairment test for goodwill - continued
Key assumptions, long term growth rate and discount rate used in the value-in-use
calculations are as follows:
Assumptions at 31.12.2023
Average sales growth (% annual growth rate) from year 2024 to year 2032 7.0%
EBITA margin (%) 17.0%
Marginal tax rate (%) 22.0%
Long term growth rate (%) 3.0%
Pre-tax discount rate (%) 10.1%
Assumptions at 31.12.2022
Average sales growth (% annual growth rate) from year 2023 to year 2031 7.2%
EBITA margin (%) 13.0%
Marginal tax rate (%) 22.0%
Long term growth rate (%) 2.0%
Pre-tax discount rate (%) 11.0%
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
69
13. PROPERTY, PLANT AND EQUIPMENT
Land and buildings
USD'000
Other xtures and ttings,
tools and equipment
USD'000
Leasehold improvements
USD'000
Total
USD'000
Cost:
At 01.01.2022 15,709 59,593 1,158 76,460
Exchange rate differences 52 -467 0 -415
Additions during the year 3,611 47,292 377 51,280
Disposals during the year -1,257 -31,538 -237 -33,032
At 31.12.2022 18,115 74,880 1,298 94,293
Depreciaon and impairment:
At 01.01.2022 8,137 14,667 505 23,307
Exchange rate differences 0 -40 0 -40
Depreciation for the year 2,127 35,129 170 37,426
Reversal regarding disposals -1,257 -29,168 -202 -30,627
At 31.12.2022 9,007 20,588 473 30,066
Carrying amount 31.12.2022 9,108 54,292 825 64,227
Cost:
At 01.01.2023 18,115 74,880 1,298 94,293
Exchange rate differences -7 0 0 -7
Additions during the year 2,350 51,664 1,055 55,069
Disposals during the year 0 -39,287 0 -39,287
At 31.12.2023 20,458 87,257 2,353 110,068
Depreciaon and impairment:
At 01.01.2023 9,007 20,588 473 30,066
Exchange rate differences 3 2 5
Depreciation for the year 2,755 41,631 230 44,617
Reversal regarding disposals 0 -39,127 -39,127
At 31.12.2023 11,765 23,092 705 35,561
Carrying amount 31.12.2023 8,693 64,165 1,648 74,507
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
70
Amounts recognised in the balance sheet
The balance show the following amounts relating to leases:
Amounts recognised in the statement of profit and loss
The statement of profit and loss shows the following amounts relating to leases:
14. LEASES
2023
USD'000
2022
USD'000
Lease liability
Non-current 6,861 7,436
Current 2,548 2,217
Total 9,409 9,653
Land and buildings
USD'000
Total
USD'000
Right-of-use assets
Carrying amount 1 January 2022 7,498 7,498
Exchange rate differences 12 12
Additions 3,611 3,611
Depreciation for the year -2,119 -2,119
Carrying amount 31 December 2022 9,002 9,002
Right-of-use assets
Carrying amount 1 January 2023 9,002 9,002
Exchange rate differences 195 195
Additions 2,152 2,152
Depreciation for the year -2,755 -2,755
Carrying amount 31 December 2023 8,594 8,594
2023
USD’000
2022
USD’000
Depreciaon charge of right-of-use assets
Land and buildings 2,755 2,119
Total 2,755 2,119
Interest expense
Expenses relating to leases 411 303
Total 411 303
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
71
72
15. DEFERRED TAX 16. INVENTORIES
The recognised deferred tax asset is attributable to tax loss temporary differences between
accounting values and tax values. In the coming years the group expects earnings and taxable income
to be positive and has accordingly recognised deferred tax asset at 31 December 2023.
The cost of inventories recognised as an expense and included in ‘Cost of sales’ amounted to USD
70,340k.
Provision for inventory write-downs amounts to USD 3,084k at 31 December 2023. Provision for
inventory write-downs is carried out based on a write-down model used by the Group as a whole.
The write-down principles are based on a comparison of the book value per part number and
internal market data for net realisable value. Write-downs of inventories are made when the book
value is above net realisable value.
2023
USD'000
2022
USD'000
Deferred tax at 1 January 1,851 2,277
Deferred tax recognised in the income statement -430 -426
Deferred tax at 31 December 1,421 1,851
Deferred tax relates to:
Intangible assets -424 -465
Property, plant and equipment 979 631
Provisions 521 451
Amortisation costs 345 300
Tax loss carry-forward 0 934
Total 1,421 1,851
Of which presented as deferred tax asset -1,421 -1,851
2023
USD'000
2022
USD'000
Finished goods 72,431 77,394
Total inventories 72,431 77,394
Less: Provision for inventory write-downs -3,084 -2,746
Total net inventories 69,347 74,648
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
73
17. TRADE RECEIVABLES
Expected credit losses
The Group applies the simplified approach for providing expected credit losses as prescribed by
IFRS 9, allowing for the use of lifetime expected loss provisions for all trade receivables. Trade
receivables are grouped based on shared credit risk characteristics and days past due to measure
expected credit losses, which also incorporate forward-looking information. Generally, the credit
risk is considered immaterial.
2023
USD’000
2022
USD’000
Trade receivables and other receivables 31 December 22,730 23,036
Less: Provision for write-down of trade receivables -1,940 -1,072
Trade receivables, net 20,790 21,964
Movements on the Group provision for write-down of
trade receivables are as follows:
Opening balances 1,072 1,049
Allowances during the year 1,106 591
Write-downs during the year 0 -113
Reversed write-downs -238 -455
Provision for write-downs of trade receivables at 31
December 1,940 1,072
Allocation of receivables, overdue but no write-down, by
maturity period is as follows:
Up to 30 days 4,646 4,133
Between 31 and 90 days 1,858 2,882
More than 90 days 1,135 1,396
Overdue trade receivables, net at 31 December 7,639 8,411
18. SHARE CAPITAL
The share capital comprises 4,449,950 shares of a nominal value of USD 0.15 each. No shares
carry any special rights.
Capital management
The Group’s objectives when managing capital are to secure the Group’s ability to continue as a
going concern in order to provide returns for shareholders and benefits for other stakeholders and
to maintain an optimal capital structure to reduce cost of capital. Any surplus liquidity is used to
reduce debt.
The Board of Directors monitors the share and capital structure to ensure that the Group’s capital
resources support the strategic goals.
Number of shares Nominal value
USD'000
Changes in share capital:
Share capital at 08.03.2017 500,000 73
Capital increase at 27.04.2017 3,949,950 578
Share capital at 31 December 2023 4,449,950 651
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
74
19. BORROWINGS
The borrowings comprise acquisition related loans as well as revolving facilities to fund the
ongoing operations. There are covenants attached to the loan facilities.
The terms and conditions of the loan from credit institutions, term loan and revolving facility were
extended to current maturity in December 2023. The extension included an option to extend all loan
facilities with additional twelve months from maturity to 30 April 2025’.
Loan from credit institutions started repayment on 26 May 2020 and is paid in full by maturity.
Term loan is repayable in instalments as of 27 April 2019 to maturity.
Revolving facilities were increased with USD 8m in 2022. Revolving facilities start repayment as of
30 November 2024 and is paid in full at maturity.
Eecve
interest rate
Currency Maturity Carrying
amount
USD'000
Loan from credit institution 5.3% - 7.8% DKK, USD 30 April 2025 31,413
Term Loan 9.98% USD 30 April 2025 5,982
Revolving Facility 10.0% - 11.0% DKK, EUR, USD 30 April 2025 41,187
Total bank borrowings at 31 December 2023 78,583
Loan from credit institution 2.3% - 4.2% DKK, USD 30 November 2024 33,567
Term Loan 5.90% USD 30 November 2024 6,582
Revolving Facility 5.6% - 9.5% DKK, EUR, USD 30 November 2024 42,957
Total bank borrowings at 31 December 2022 83,106
20. PROVISIONS
Lending of assets included in the programs by customers (mutual pool) occasionally occurs in
connection with the CFR program activities. In case that these programs end, the Group must
return similar assets in the same condition as when the lending took place. The provisions include an
amount counterbalancing the restoration liability based on an estimate of the expected expenses.
The liability is recognised during the application period of the lended assets.
2023
USD'000
2022
USD'000
Provisions at 1 January 2,346 1,910
Additions during the year 410 436
Provisions at 31 December 2,756 2,346
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
75
21. RELATED PARTIES
The Group is controlled by TPA Holding II A/S which is controlled by CC Green Wall Invest ApS. The Group’s
ultimate parent company is CataCap I K/S.
‘Key management compensation’ is disclosed in note 5.
The following transactions were carried out with related parties:
Dancing Monkey ApS is controlled by Peter Lyager and Thomas Ibsø, who are part of the Board of
Directors and Executive Management of TP Aerospace Group, respectively.
2023
USD’000
2022
USD’000
Transacons with CataCap Management A/S:
Costs from CataCap Management A/S 4 9
Total 4 9
Transacons with CC Green Wall Invest ApS:
Settlement of taxes in joint taxation -915 -1,058
Interest income 47 15
Proceeds from borrowings 60 0
Total -808 -1,043
Transacons with TPA Holding II A/S:
Proceeds from borrowings -5 38
Interest expense -3 0
Total -8 38
Transacons with Dancing Monkey ApS:
Purchase of goods 4,488 6,161
Payments for goods 5,968 6,974
Total 10,455 13,135
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
76
22. COMMITMENTS
AND CONTINGENT
LIABILITIES
Contingent liabilities
Joint taxation
The Group companies are jointly and severally liable for tax on the jointly taxed income, etc. for
the Danish companies of the TP Aerospace Group. The total amount of corporation tax payable
is disclosed in the annual report of CC Green Wall Invest ApS which is the management company
of the joint taxation. Moreover, the Group companies are jointly and severally liable for Danish
withholding taxes by way of dividend tax, tax on royalty payments and tax on unearned income.
Any subsequent adjustment of corporation taxes and withholding taxes may increase the Group’s
liability.
Charges and security
As security for borrowings and Group companies’ bank commitments, security in the form of
share capital, inventory, tangible assets, and goodwill is effective for TP Aerospace PRO ApS, TP
Aerospace Solutions ApS, TP Aerospace Distribution ApS, TP Aerospace Holding A/S, and TPA
Holding I A/S, with a nominal value of USD 13.9m.
Guarantee obligations
The Group has issued a payment guarantee between the Danish Group companies (TP Aerospace
PRO ApS, TP Aerospace Solutions ApS, TP Aerospace Distribution ApS, TP Aerospace Holding A/S,
and TPA Holding I A/S) and the Group’s credit institutions.
77
Financial risk factors
The Group’s activities expose it to a variety of financial risks:
currency risk, interest risk, credit risk and liquidity risk. The
Group’s overall risk management program focuses on the
unpredictability of financial markets and seeks to minimise
potential adverse effects on the Group’s financial performance.
The financial risks of the Group are managed centrally. The
overall risk management guidelines and policies have been
approved by the Board of Directors. The Board provides written
principles for overall risk management, as well as written policies
covering specific areas, such as foreign exchange risk, interest
rate risk, credit risk, use of derivative financial instruments and
non-derivative financial instruments, and investment of excess
liquidity. Executive management manages contracts and risk
exposures in accordance with the guidelines and policies and
reports to the Board of Directors on a regular basis.
Market risk
Foreign exchange risk
Due to the Group’s structure, most net sales and expenditures
in foreign currency offset each other, reducing significant
exposure to exchange rate risks.
The Group’s revenue and expenses are mostly in the functional
currency of the operating entity creating a natural currency
hedge. Consequently, the Group’s treasury risk management
policy is not to hedge foreign exchange rate risks.
The main borrowings are in USD or DKK. The Board of
Directors has decided not to hedge borrowings in DKK and the
Group’s main currency risk is therefore related to loan in DKK.
Sensitivity analysis
The Group is primarily exposed to changes in DKK/USD
exchange rate. The sensitivity of profit or loss to changes in
the exchange rates arises mainly from expenses and loans in
DKK.
Interest rate risk
The Group’s interest rate risk arises from long-term borrowings
related to the acquisitions. Borrowings issued at variable rates
expose the Group to cash flow interest rate risk. Borrowings
issued at fixed rates expose the Group to fair value interest rate
risk. Group policy is to conduct an annual assessment of the
interest risk exposure on group level and the cost associated with
a hedging scheme, and on this basis the exectuive management
will in alignment with the Board determine whether to hedge the
risk with interest rate swaps or similar.
Sensitivity analysis
Profit or loss is sensitive to higher/lower interest from
borrowings and fair value changes of interest rate derivatives
as a result of changes in interest rates. The sensitivity analysis is
calculated after the impact of the hedging instruments.
Credit risks
Credit risk is managed on a group basis, including managing and
analysing the credit risk related to accounts receivable balances
and for new customers before standard payment and delivery
terms and conditions are offered. For credits over a certain
amount, executive management has to be consulted.
Credit risk arises from cash and cash equivalents and deposits
with banks and financial institutions, as well as credit exposures
to customers, including outstanding receivables. For banks and
financial institutions, only independently rated parties with a
high credit rating are accepted. For customers, individual risk
limits are set based on internal or external ratings in accordance
with limits set by the Board. The utilisation of credit limits is
regularly monitored.
The maximum exposure corresponds to the carrying amount
of receivables. Due to the short-term nature of the current
receivables, their carrying amount is considered to be the same
as their fair value.
The Group applies the simplified approach to providing for
expected credit losses prescribed by IFRS 9, which permits
the use of the lifetime expected loss provision for all trade
receivables. To measure the expected credit losses, trade
23. FINANCIAL RISK MANAGEMENT
Impact on post tax prot 2023
USD'000
2022
USD'000
DKK/USD exchange rate
– increase 10%
2,663 3,439
DKK/USD exchange rate
– decrease 10%
-2,663 -3,439
All other variables are kept constant.
Impact on post tax prot 2023
USD'000
2022
USD'000
Interest rates – increase by
100 basis points
-807 -838
Interest rates – decrease by
100 basis points 807 838
All other variables are kept constant.
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
78
receivables have been grouped based on shared credit risk characteristics and the days past
due. The expected credit losses also incorporate “forward looking” information. The credit risk is
generally considered immaterial.
Hedging
The Group’s activities expose it to foreign currency risk and interest rate risk. In order to minimise
any adverse effects on the financial performance of the Group, derivative financial instruments,
such as interest rate swaps can be used to fix variable future cash flows, when deemed beneficial.
These instruments reduce the uncertainty of interest payments. Derivatives are used exclusively
for hedging purposes and not as trading or speculative instruments.
If entering interest rate swap contracts, the Group agrees to exchange the difference between
fixed and floating rate interest amounts calculated on agreed notional principal amounts. Such
contracts will enable the Group to mitigate the risk of changing interest rates on the fair value of
issued fixed rate debt and the cash flow exposures on the issued variable rate debt. The fair value of
interest rate swaps outstanding at the end of the reporting period is determined by discounting the
future cash flows using the curves at the end of the reporting period and the credit risk inherent
in the contract. During 2023, the Group did not enter into any interest rate swap contracts and no
instruments were outstanding by the end of the reporting period.
As the critical terms of the interest rate swap contracts and their corresponding hedged items are
the same, the Group performs, when entering into interest swap contracts, a qualitative assessment
of effectiveness and it is expected that the value of the interest rate swap contracts and the value
of the corresponding hedged items will systematically change in opposite direction in response
to movements in the underlying interest rates. The main source of hedge ineffectiveness in these
hedge relationships is the effect of the counterparty and the Group’s own credit risk on the fair
value of the interest rate swap contracts, which is not reflected in the fair value of the hedged item
attributable to the change in interest rates.
The following tables detail various information regarding interest rate swap contracts outstanding
at the end of the reporting period and their related hedged items. Interest rate swap contract
assets and liabilities are included in the ‘Other receivables’ and ‘Other payables’ line items in the
consolidated statement of financial position respectively.
Notional principal
USD'000
Amount
recognised in OCI
USD'000
Fair value
USD'000
Interest rate swaps
- cash ow hedge
0 0 0
As at 31 December 2023 0 0 0
Interest rate swaps
- cash ow hedge
7,182 9 0
As at 31 December 2022 7,182 9 0
Derivave nancial instruments – interest rate swaps 2023
USD'000
2022
USD'000
Carrying amount ((-) Liability) 0 0
Maturity Date N/A N/A
Hedge ratio N/A N/A
Weighted average hedged rate for the year N/A N/A
The Group’s interest rate swap contracts matured on 27 May 2022 and no new instruments have
been entered.
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
79
Liquidity
Cash flow forecasting is performed on group level by management. Management monitors rolling
forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational
needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all
times so the Group does not breach borrowing limits or covenants (where applicable) or any of its
borrowing facilities. Such forecasting takes into consideration the Group’s debt financing plans and
covenants compliance.
The Group has undrawn borrowing facilities of USD 4.3m that, together with the USD 2.9m in
cash and cash equivalents, provides for a total of USD 7.2m available for settling future operating
activities and capital commitments.
The table below analyses the Group’s non-derivative financial liabilities into relevant maturity
groupings based on the remaining period at the balance sheet date to the contractual maturity date.
The amounts disclosed in the table are the contractual undiscounted cash flows.
For floating rate borrowings, the rate at the balance sheet date has been applied.
Non-derivaves Less than
1 year
USD’000
1-5 years
USD’000
More than
5 years
USD’000
Total
USD’000
As at 31 December 2022
Borrowings 10,631 78,444 0 89,076
Lease liabilities 2,486 7,520 816 10,822
Trade payables 18,763 0 0 18,763
Other payables 5,491 0 0 5,491
Total 37,371 85,964 816 124,151
As at 31 December 2023
Borrowings 11,326 77,578 0 88,904
Lease liabilities 2,939 7,746 170 10,855
Trade payables 15,989 0 0 15,989
Other payables 7,739 0 0 7,739
Total 37,993 85,324 170 123,487
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
80
The Group classifies its financial assets at amortised cost only if both of the following criteria are met:
• The asset is held within a business model with the objective of collecting the contractual cash flows, and
• The contractual terms give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal outstanding.
No events of importance to the 2023 annual report have occurred after the balance sheet date.
24. FINANCIAL ASSETS AND
LIABILITIES
25. EVENTS AFTER THE BALANCE
SHEET DATE
26. CHANGES IN NET WORKING
CAPITAL
2023
USD’000
2022
USD’000
Financial assets
Financial assets at amorsed cost:
Trade receivables 20,790 21,964
Other receivables 2,794 2,285
Prepayments 1,198 8,501
Cash 2,967 3,441
Total 27,749 36,191
Financial liabilities
Financial liabilies at amorsed cost:
Borrowings 78,583 83,106
Lease liabilities 9,409 9,653
Trade payables 15,989 18,763
Other payables 7,739 5,491
Prepayments from customers 835 2,808
Total 112,555 119,821
2023
USD’000
2022
USD’000
Changes in inventories 5,301 -11,410
Non-cash inventory transfer from property, plant and equipment 160 2,370
Changes in trade receivables 1,174 -7,566
Changes in other receivables and prepayments 6,794 -8,187
Changes in trade payables, other payables and prepayments from
customers
-2,499 11,666
Change in provisions 410 436
Total 11,340 -12,691
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
81
27. CHANGES IN LIABILITIES
ARISING FROM FINANCING
ACTIVITIES
28. DEPRECIATIONS AND
AMORTISATIONS
29. EXEMPTION FROM AUDIT
OF FOREIGN SUBSIDIARIES
The German subsidiary TP Aerospace Technics GmbH made use of the exemption option in
accordance with §264 paragraph 3 HGB (German Commercial Code) concerning the obligation to
prepare a management report including note disclosures as well as to audit and disclose the annual
financial statements and the management report for fiscal year 2023.
Depreciation related to capitalised maintenance costs on the CFR programs has a direct impact
on the Group’s cash flow and is therefore adjusted in the cash flow statement for the financial year
2023.
2023
USD’000
2022
USD’000
Proceeds from borrowings -1,432 15,864
Repayment of borrowings -3,522 -3,456
Total -4,954 12,408
2023
USD’000
2022
USD’000
Depreciation and amortisation, refer to note 6 45,635 38,689
Depreciation related to capitalised maintenance costs -40,271 -33,790
Total 5,364 4,899
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
82
PARENT COMPANY
FINANCIAL
STATEMENTS
83
STATEMENT OF PROFIT AND
LOSS 1 JANUARY - 31 DECEMBER
(parent company)
STATEMENT OF
COMPREHENSIVE INCOME
1 JANUARY - 31 DECEMBER
(parent company)
Note 2023
USD’000
2022
USD’000
Other external expenses -5 -63
Operang prot -5 -63
Financial income 3 379 227
Financial expenses 4 -583 -491
Prot before tax -210 -327
Tax for the period 5 13 54
Prot for the period -197 -273
Note 2023
USD’000
2022
USD’000
Prot for the period -197 -273
Fair value changes for the year, cash ow hedge 0 9
Tax on other comprehensive income 0 -1
Other comprehensive income for the period, net of tax 0 8
Total comprehensive income for the period -197 -265
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
84
BALANCE SHEET 31 DECEMBER
(parent company)
BALANCE SHEET 31 DECEMBER
(parent company)
Notes 2023
USD’000
2022
USD’000
Investment in subsidiaries 6 88,075 88,075
Deferred tax asset 7 25 43
Total non-current assets 88,100 88,118
Receivables from group enterprises 10 4,490 5,027
Other receivables 0 224
Tax receivables 23 80
Cash 4 11
Total current assets 4,517 5,342
Total assets 92,617 93,460
Note 2023
USD’000
2022
USD’000
Share capital 8 651 651
Share premium 64,441 64,441
Reserve for cash ow hedges 0 0
Retained earnings 21,489 21,686
Total equity 86,581 86,778
Borrowings 9 5,382 5,982
Total non-current liabilies 5,382 5,982
Borrowings 600 600
Other payables 54 100
Total current liabilies 654 700
Total liabilies 6,036 6,682
Total equity and liabilies 92,617 93,460
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
85
STATEMENT OF CHANGES IN EQUITY
(parent company)
Share capital
USD’000
Share
premium
USD’000
Reserve for
cash ow
hedges
USD’000
Retained
earnings
USD’000
Total
USD’000
Equity at 01.01.2022 651 64.441 -8 21,959 87,043
Prot for the period 01.01.2022 - 31.12.2022 0 0 0 -273 -273
Fair value change in the year 0 0 8 0 8
Total comprehensive income for the period 0 0 8 -273 -265
Equity at 31.12.2022 651 64.441 0 21,686 86,778
Prot for the period 01.01.2023 - 31.12.2023 0 0 0 -197 -197
Fair value change in the year 0 0 0 0 0
Total comprehensive income for the period 0 0 0 -197 -197
Equity at 31.12.2023 651 64.441 0 21,489 86,581
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
86
CASH FLOW STATEMENT
1 JANUARY - 31 DECEMBER
(parent company)
Noter 2023
USD’000
2022
USD’000
Operating prot -5 -63
Change in net working capital 13 178 281
Cash ow from primary operating activities 173 218
Interests received 1 0
Interests paid -583 -454
Cash ow from operang acvies -409 -236
Repayment of borrowings -600 -600
Proceeds from intergroup borrowings 1,003 846
Cash ow from nancing acvies 403 246
Net cash ow for the year -6 10
Cash and cash equivalents, beginning of the year 11 1
Cash and cash equivalents, end of the year 5 11
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
87
NOTES
(parent company)
Notes
1. Accounting policies
2. Critical accounting estimates and judgements
3. Financial income
4. Financial expenses
5. Tax on profit for the year
6. Investment in subsidiaries
7. Deferred tax
8. Share capital
9. Borrowings
10. Related parties
11. Commitments and contingent liabilities
12. Events after the balance sheet date
13. Changes in net working capital
14. Changes in liabilities arising from financing activities
15. Capital management
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
88
New standards
The annual report is prepared according to standards and interpretations effective for financial
years beginning on 1 January 2023. No standards or interpretations have been adopted early.
The parent company has the same accounting policies for recognition and measurement as Group.
The parent company’s accounting policies deviate from the Group’s accounting policies as described
below. For a detailed description of the group’s accounting policies please refer to the consolidated
financial statements, Note 1.
The functional currency of the parent Company is USD. The financial statement have been rounded
to the nearest thousand.
Dividend
Dividend from investments in subsidiaries are recognised as income in the parent company profit
and loss account in the year where the dividends are declared.
Investments in subsidiaries
Investments in subsidiaries are measured at cost.
Impairment tests are performed on subsidiaries if events or changes in circumstances indicate that
their carrying amount may not be recoverable. If cost exceeds the recoverable amount, the carrying
amount is written down to the recoverable amount.
The company makes estimates and assumptions concerning the future. The resulting accounting
estimates will, by definition, seldom equal the related actual results. The estimates and assumptions
that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are addressed below.
The judgments, estimates and assumptions made are based on historical experience and other
factors that Management considers to be reliable, but which by their very nature are associated
with uncertainty and unpredictability. These assumptions may prove incomplete or incorrect,
and unexpected events or circumstances may arise. The most critical judgments, estimates and
assumptions for the individual items are described below.
The company is also subject to risks and uncertainties that may lead to actual results differing from
these estimates, both positively and negatively.
Impairment of investment in subsidiary
The group tests, if there are indicators of impairment, whether investment in subsidiary has suffered
any impairment, in accordance with the accounting policy. The recoverable amounts of cash-
generating units will be determined based on value-in-use calculations. These calculations require
the use of estimates.
For a description of other significant accounting estimates, assumptions and uncertainties please
refer to the consolidated financial statements, stated in note 2.
It is the managements judgement that no critical accounting estimates and judgements are made
with regards to the accounting principles of the parent company, except for the above described.
1. ACCOUNTING POLICIES 2. CRITICAL ACCOUNTING
ESTIMATES AND JUDGEMENTS
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
89
3. FINANCIAL INCOME
4. FINANCIAL EXPENSES
5. TAX ON PROFIT FOR THE YEAR
2023
USD’000
2022
USD’000
Other interest income 1 0
Interest income from group enterprises 378 227
Total 379 227
2023
USD’000
2022
USD’000
Interest expenses 583 467
Other nancial expenses 0 24
Total 583 491
2023
USD’000
2022
USD’000
Current tax:
Current tax on prot for the year -23 -79
Current tax on prot for previous years -8 0
Total current tax expense -31 -79
Deferred tax:
Temporary differences 18 25
Adjustment to previous years 0 0
Total deferred tax 18 25
Tax for the period -13 -54
Tax for the period is specied as follows:
Calculated 22% tax on prot before tax -46 -72
Tax eects of:
Interest cap limitation 41 12
Adjustments in respect of prior years -8 6
Total -13 -54
Eecve tax rate 6% 13%
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
90
6. INVESTMENT IN SUBSIDIARIES
2023
USD’000
2022
USD’000
Cost:
At 1 January 95,422 95,422
Additions during the year 0 0
At 31 December 95,422 95,422
Impairment:
At 1 January 7,347 7,347
Impairment charge 0 0
At 31 December 7,347 7,347
Carrying amount 31 December 88,075 88,075
2023
USD’000
2022
USD’000
Deferred tax at 1 January 43 68
Deferred tax recognised in the income statement -18 -25
Deferred tax 31 December 25 43
Deferred tax relates to:
Amortised loan cost, bank debt 25 28
Tax loss carry-forward 0 15
Total 25 43
Name Place of registered oce Vote and ownership
TP Aerospace Holding A/S Hvidovre, Denmark 100%
TP Aerospace Solutions ApS Hvidovre, Denmark 100%
TP Aerospace PRO ApS Hvidovre, Denmark 100%
TP Aerospace Distribution ApS Hvidovre, Denmark 100%
TP Aerospace Asia Pte. Ltd. Singapore 100%
TP Aerospace Americas Corp Las Vegas, US 100%
TP Aerospace Technics LLC Orlando, US 100%
TP Aerospace Technics NV LLC Las Vegas, US 100%
TP Aerospace Technics GmbH Norderstedt, Germany 100%
TP Aerospace Technics Czech s.r.o. Brno, Czech Republic 100%
TP Aerospace Asia Technics Pte. Ltd. Singapore 100%
TP Aerospace Malaysia Sdn. Bhd. Kuala Lumpur, Malaysia 100%
TP Aerospace Technics Pty Ltd. Melbourne, Australia 100%
TP Aerospace Technics UK LTD. United Kingdom 100%
TP Aerospace (Thailand) Co., Ltd. Bangkok, Thailand 100%
7. DEFERRED TAX
The recognised deferred tax asset is attributable to amortised loan costs. In the coming
years the Danish joint taxation group expects earnings and taxable income to be positive
and has accordingly recognised deferred tax asset at 31 December 2023.
Investments in subsidiaries are specified as follows:
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
91
8. SHARE CAPITAL
9. BORROWINGS
For a specification of share capital please refer to note 18 in the consolidated financial statements.
For a specification of the Company’s borrowings, please refer to note 19 in the consolidated
financial statements.
The Company is controlled by TPA Holding II A/S. The Company’s ultimate parent company is
CataCap I K/S.
Key management compensation’ is disclosed in note 5 in the consolidated financial statement.
The following transactions were carried with with related parties:
Expected credit losses – Receivables from group enterprises
At year end, TPA Holding I A/S had receivables from group enterprises amounting to USD 4,490k
(2022: USD 5,027k). The write-downs of receivables from group enterprises are considered
immaterial.
10. RELATED PARTIES
2023
USD’000
2022
USD’000
Transacons with TP Aerospace Holding A/S:
Interest income 354 227
Proceeds from borrowings -953 -915
Total -599 -688
2023
USD’000
2022
USD’000
Transacons with CC Green Wall Invest ApS:
Interest income 23 0
Proceeds from borrowings 23 26
Total 46 26
Transacons with TPA Holding II A/S:
Interest expenses 1 0
Group contribution 1 0
Total 2 0
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
92
11. COMMITMENTS AND
CONTINGENT LIABILITIES
Contingent liabilities
Joint taxation
The Group companies are jointly and severally liable for tax on the jointly taxed income, etc., for
the Danish companies of the TP Aerospace Group. The total amount of corporation tax payable
is disclosed in the annual report of CC Green Wall Invest ApS which is the management company
of the joint taxation. Moreover, the Group companies are jointly and severally liable for Danish
withholding taxes by way of dividend tax, tax on royalty payments and tax on unearned income.
Any subsequent adjustment of corporation taxes and withholding taxes may increase the Group’s
liability.
Charges and security
As security for bank loans, as well as Group companies’ bank commitments, security in share capital
regarding the subsidiary TP Aerospace Holding A/S nominal USD 0.3m, is effective.
Guarantee obligations
TPA Holding I A/S has issued a guarantee of payment between the parent company TPA Holding II
A/S and Nordea Danmark, Filial af Nordea Bank AB (publ), Sweden.
Furthermore, TPA Holding I A/S has issued a guarantee of payment between the subsidiaries
TP Aerospace PRO ApS, TP Aerospace Solutions ApS, TP Aerospace Distribution ApS and TP
Aerospace Holding A/S and Nordea Danmark, Filial af Nordea Bank AB (publ), Sweden.
13. CHANGES IN NET WORKING
CAPITAL
12. EVENTS AFTER THE
BALANCE SHEET DATE
No events of importance to the 2023 annual report have occurred after the balance sheet date.
14. CHANGES IN LIABILITIES
ARISING FROM FINANCING
ACTIVITIES
15. CAPITAL MANAGEMENT
For a description of capital management, please refer to note 18 in the consolidated financial
statements.
2023
USD’000
2022
USD’000
Changes in other receivables 224 224
Changes in trade and other payables -46 57
Total 178 281
2023
USD’000
2022
USD’000
Cash ow from nancing activities at 1 January 6,581 7,181
Proceeds from borrowings 0 0
Repayment of borrowings -600 -600
Cash ow from nancing acvies at 31 December 5,981 6,581
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
93
SIGNATURES
94
Executive Board
Board of Directors
95
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
96
CVR No 33 77 12 31
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
97
98
DEFINITION OF
KEY FIGURES
AND FINANCIAL
RATIOS
Definition Description
Net interest-bearing debt
Mortgage debt and debt to credit institutions less cash at bank and
in hand, interest-bearing current investments and receivables.
Net working capital
Inventories + receivables - current liabilities except for corporation
tax receivable/payable as well as mortgage debt and debt to credit
institutions.
Invested capital
Equity, including minority interests + net interest-bearing debt at
year-end.
Free cash ow
Cash ow from operating activities less net investments in
property, plant and equipment and plus dividends from associates.
Return on invested capital
excluding
goodwill (ROIC)
EBITDA before special items as a percentage of average invested
capital, excluding goodwill.
Net interest-bearing debt/ EBITDA
before special items
The ratio of net interest-bearing debt at year end to EBITDA.
Equity ratio Equity at year end as a percentage of total assets.
Return on equity (ROE) Consolidated prot after tax as a percentage of average equity.
Aircraft components Wheel and brake components regardless of accounting treatment
including piece parts.
Special items See Special items note under the “Financial Statements” section.
Definition Description
EBITDA
Earnings before interest, tax, depreciation, amortisation and
impairment losses as well as prot from sale of property, plant and
equipment and amortisation of intangible assets.
EBITDA margin EBITDA as a % of net revenue.
Proforma EBITDA
Adjusted EBITDA reecting the income from government support
schemes in the year where the related costs were incurred instead
of the year where the income was recognised.
Proforma EBITDA margin (%) Proforma EBITDA as a % of net revenue.
EBIT Earnings before interest and tax.
EBIT margin EBIT as a percentage of net revenue.
Proforma EBIT
Adjusted EBIT reecting the income from government support
schemes in the year where the related costs were incurred instead
of the year where the income was recognised.
Proforma EBIT margin (%) Proforma EBIT as a % of net revenue.
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
99
Peter Ryttergaard
Company Funcon
Ryttergaard Invest A/S
Board of Directors, Executive Management,
Founder, Legal Owner, CEO
Buldus ejendomme ApS CEOr
Investeringsselskabet af 27/12 1985 ApS CEO
Kjærulff Pedersen A/S Board Member
CataCap Management A/S Executive Management
CataCap OP ApS Executive Management, Founder
CataCap DM ApS Executive Management, Legal Owner
CataCap DM II ApS Executive Managemen, Legal Ownert
CC II Management Invest 2017 GP ApS Executive Management
CataCap General Partner I ApS Executive Management
CataCap General Partner II ApS Executive Management
CataCap General Partner III ApS Executive Management
CC BidCo ApS Executive Management
CC BidCo IV ApS Executive Management
Altantic HoldCo Limited Deputy Chairman
Altantic OfferCo Limited Deputy Chairman
CC Globe Invest ApS Executive Management
CC DAFA Invest ApS Executive Management
CC HoldCo ApS Executive Management
CC HoldCo IV ApS Executive Management
CC North Invest ApS Executive Management
CC Toaster Invest ApS Executive Management
CC TopCo IV Invest ApS Executive Management
Peter Ryttergaard
Company Funcon
CC Green Wall Invest ApS Board Member, Executive Management
TPA Holding I A/S Deputy Chairman
TPA Holding II A/S Deputy Chairman
TP Aerospace Holding A/S Deputy Chairman
TPA Green ManCo ApS Executive Management
Luxplus MIIP ApS Executive Management
DAFA MIIP ApS Executive Management
Globe ManCo ApS Executive Management
CC Fly Invest ApS Executive Management
Rekom ManCo ApS Executive Management
Aern Holdings Limited Deputy Chairman
Aern Limited Deputy Chairman
CC Green Wall Invest ApS Board Member, Executive Management
ADDITIONAL
MANAGEMENT
DUTIES OF
THE BOARD
continued
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
100
Peter Ryttergaard
Company Funcon
CC II APCIV K/S Executive Management
TAP MIIP ApS Executive Management
CC TopCo Invest ApS Executive Management
CC TopCo Invest ApS Executive Management
CC TopCo V Invest ApS Executive Management
CC NLM Invest ApS Executive Management
NLM VANTINGE A/S Board Member
NLM Vantinge Group Holding ApS Board Member
CC TopCo V Invest ApS Executive Management
CC HoldCo V ApS Executive Management
Peter Ryttergaard
Company Funcon
CC BidCo V ApS Executive Management
NLM A/S Board Member
Lipitec A/S Board Member
ADDITIONAL
MANAGEMENT
DUTIES OF THE
BOARD
continued
Andrew Hoad
Company Funcon
TPA Holding I A/S Board Member
TPA Holding II A/S Board Member
TP Aerospace Holding A/S Board Member
TD Aerospace (UK) Ltd Managing Director
Aern Ltd Board Member
Aern Holdings Ltd Board Member
Atlantic Offer Company Ltd Board Member
Atlantic HoldCo Ltd Board Member
MAAS Aviation Ltd Chairman
Jelly Bean Paint Company Ltd Chairman
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
101
Nina Fisker Olesen
Company Funcon
TPA Holding I A/S Board Member
TPA Holding II A/S Board Member
TP Aerospace Holding A/S Board Member
PlantPaper Production A/S Board Member
ELLEPOT A/S Board Member
Danish Horticulture Group A/S Board Member
Plantpaper Holding ApS Board Member
Sungrow A/S Board Member
Nina Fisker Olesen Holding ApS CEO
Dover BidCo ApS Board Member
Nina Fisker Olesen
Company Funcon
Globeteam HoldCo ApS Board Member
Mobilhouse Holding ApS Board Member
Mobilhouse A/S Board Member
Mobilhouse TOPCo A/S Board Member
Globeteam Holding ApS Board Member
Mobilhouse Invest ApS Board Member
Dalsgaard Pavillioner A/S Board Member
Dalsgaard Byg A/S Board Member
ADDITIONAL
MANAGEMENT
DUTIES OF THE
BOARD
continued
Flemming Jensen
Company Funcon
TPA Holding I A/S Chairman
TPA Holding II A/S Chairman
TP Aerospace Holding A/S Chairman
DSB Executive Management
The Confedeation of Danish Industry Member of the Central Board
Employers of Industry in Denmark Board Member
Naviair Chairman
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
102
Vilhelm Hahn-Petersen
Company Funcon
Myco ApS Executive Management, Legal Owner
Airhelp Board Member
CataCap Management A/S Executive Management
CataCap OP ApS Executive Management
CataCap DM ApS Executive Management, Legal Owner
CataCap DM II ApS Executive Management, Legal Owner
CC II Management Invest 2017 GP ApS Executive Management
CATACAP GENERAL PARTNER I ApS Executive Management
CataCap General Partner II ApS Executive Management
CataCap General Partner III ApS Executive Management
CC North Invest ApS Executive Management
CC Toaster Invest ApS CEO
CC Green Wall Invest ApS Executive Management
CC TopCo Invest ApS Executive Management
DAFA MIIP ApS Executive Management
Globe Manco ApS Executive Management
CC Globe Invest ApS Executive Management
Atlantic Holdco Limited Board Member
Atlantic Offerco Limited Board Member
Aern Holdings Limited Board Member
Aern Limited Board Member
Luxplus MIIP ApS Executive Management
DAFA A/S Chairman
Vilhelm Hahn-Petersen
Company Funcon
TPA Holding I A/S Board Member
TPA Holding II A/S Board Member
TP Aerospace Holding A/S Board Member
TPA Green ManCo ApS Executive Management
CC HoldCo ApS Executive Management
CC BidCo V ApS Executive Management
CC DAFA Invest ApS Executive Management
CC BidCo IV ApS Executive Manage
Rekom Group A/S Deputy Chairman
Rekom ManCo ApS Executive Management
CC Fly Invest ApS Executive Management
CC BidCo ApS Executive Management
CC Fly Holding II A/S Deputy Chairman
ADDITIONAL
MANAGEMENT
DUTIES OF THE
BOARD
continued
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
103
Vilhelm Hahn-Petersen
Company Funcon
CC HoldCo IV ApS Executive Management
TAP MIIP ApS Executive Management
CC Mist NEW Holding II ApS Deputy Chairman
CC Toaster Holding I Aps Board Member
CC Toaster Holding II ApS Board Member
Dafa Group A/S Deputy Chairman
DAFA Holding I ApS Deputy Chairman
DAFA Holding II ApS Deputy Chairman
CC TAP Invest ApS Executive Management
LUXPLUS ApS Board Member
Rekom Group Holding ApS Deputy Chairman
CC HoldCo V ApS Executive Management
CC TopCo IV Invest ApS Executive Management
CC TopCo V Invest ApS Executive Management
ADDITIONAL
MANAGEMENT
DUTIES OF THE
BOARD
continued
Vilhelm Hahn-Petersen
Company Funcon
CC STORM UK TOPCO LTD Executive Management
CC STORM UK HOLDCO LTD Executive Management
REKOM NOTTINGHAM LTD Executive Management
REKOM COLCHESTER LTD Executive Management
REKOM CARDIFF LTD Executive Management
REKOM CARDIFF LTD Executive Management
REKOM A LTD Executive Management
REKOM B LTD Executive Management
REKOM C LTD Executive Management
REKOM D LTD Executive Management
REKOM E LTD Executive Management
SWITCH OPERATING LIMITED Executive Management
SWITCH SOUTH LIMITED Executive Management
CC STIM UK TRADECO 9 LTD Executive Management
CC STIM UK TRADECO 8 LTD Executive Management
CC STIM UK TRADECO 6 LTD Executive Management
CC STIM UK TRADECO 5 LTD Executive Management
CC STIM UK TRADECO 4 LTD Executive Management
CC STIM UK TRADECO 3 LTD Executive Management
CC STIM UK TRADECO 2 LTD Executive Management
CC STIM UK TRADECO 1 LTD Executive Management
CC STIM UK TOPCO LTD Executive Management
CC STIM UK HOLDCO LTD Executive Management
CC STIM UK SPV LTD Executive Management
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
104
Michael Humphreys
Company Funcon
TPA Holding I A/S Board Member
TPA Holding II A/S Board Member
TP Aerospace Holding A/S Board Member
GHF Advisory Ltd. Executive Management
Aern Ltd Board Member
Aern Holdings Ltd Board Member
Atlantic HoldCo Limited Board Member
Atlantic OfferCo Limited Board Member
ADDITIONAL
MANAGEMENT
DUTIES OF THE
BOARD
Peter Lyager
Company Funcon
TPA Holding I A/S Board Member
TPA Holding II A/S Board Member
TP Aerospace Holding A/S Board Member
PETER LYAGER HOLDING ApS Executive Management
Dancing Monkey Holding ApS Executive Management
OVERVIEW STRATEGY & BUSINESS SUSTAINABILITY RISK MANAGEMENT MANAGEMENT FINANCIAL STATEMENTS OTHER INFORMATION
105
COMPANY
DETAILS
The Company
TPA Holding I A/S
c/o TP Aerospace
Stamholmen 165R
2650 Hvidovre
Telephone: +45 8993 9929
CVR no.: 38473492
Registered in Hvidovre
Financial period:
1 January - 31 December 2023
Website: www.tpaerospace.com
Email: sales@tpaerospace.com
Board of Directors
Flemming Jensen
Peter Ryttergaard
Andrew Hoad
Peter Lyager
Nina Fisker Olesen
Vilhelm Hahn-Petersen
Michael Humphreys
Executive Management
Nikolaj Lei Jacobsen
Tinneke Torpe
Felix Ammann
Nicolai Hertz