ANNUAL REPORT
EUROPRIS ASA 2021
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Content
Content
About Europris �������������������������������������������������������������������������������� 4
Key gures ������������������������������������������������������������������������������������� 7
Letter from the CEO ����������������������������������������������������������������������� 9
Directors’ report ���������������������������������������������������������������������������� 10
The board ������������������������������������������������������������������������������������� 22
Corporate governance ����������������������������������������������������������������� 24
Sustainability report ���������������������������������������������������������������������� 33
The management ������������������������������������������������������������������������� 63
Consolidated nancial statements ����������������������������������������������� 65
Income statement ������������������������������������������������������������������������� 67
Balance sheet ������������������������������������������������������������������������������� 68
Statement of changes in equity ���������������������������������������������������� 70
Statement of cash ows ��������������������������������������������������������������� 71
Notes �������������������������������������������������������������������������������������������� 72
Parent company ������������������������������������������������������������������������� 103
Income statement ����������������������������������������������������������������������� 104
Balance sheet ����������������������������������������������������������������������������� 105
Statement of changes in equity �������������������������������������������������� 107
Statement of cash ows ������������������������������������������������������������� 108
Notes ������������������������������������������������������������������������������������������ 109
Decleration to the annual report ��������������������������������������������������117
Alternative performance measures denitions ���������������������������118
Auditor’s report ��������������������������������������������������������������������������� 120
Shareholder information ������������������������������������������������������������� 125
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Europris – Europris –
Norway´s #1 discount variety retailerNorway´s #1 discount variety retailer
30 years of consecutive growth
1992
Founded by
Wiggo Erichsen
2004
Acquired by IK
Investment Partners
2015
Listing on Oslo Børs
2006
Store #150
2017
Store #250
2012
Acquired by Nordic
Capital
2021
1 million customer
club members
2013
JV with Tokmanni
and opened Shanghai
sourcing ofce
Store #100
2000
2021
Acquired 67% of
Lekekassen and
Lunehjem
5
9
modernised
stores
5
relocated
stores
4
new
stores
Number
of stores
270
1
million
customer club
members
6
Europris employees are models in the photos.
Clear
Simple
Europris´values
Positive
attitude
Business
acumen
Proactive
7
(Amounts in NOK million)
FY 2021 FY 2020
GROUP KEY INCOME STATEMENT FIGURES
Sales directly operated stores 7,438 7,240
Sales from partly owned subsidiaries 423 -
Sales from wholesale to franchise stores 707 689
Franchise fees and other income 80 84
Total operating income
8,648 8,013
% growth in total operating income 7�9% 28�5%
Cost of goods sold
4,592 4,534
Gross prot 4,056 3,478
Gross margin 46�9% 43�4%
Opex 1,973 1,773
Opex-to-sales ratio 22�8% 22�1%
EBITDA 2,083 1,705
EBITDA margin 24�1% 21�3%
EBIT (Operating prot) 1,512 1,166
EBIT margin (Operating prot margin) 17�5% 14,5%
Net prot 1,104 804
Prot attributable to owners of the parent
1,082 804
Earnings per share (in NOK)
6.72 4.86
Dividend per share (in NOK)
4.00 2.70
GROUP KEY CASH FLOW AND BALANCE SHEET FIGURES
Net change in working capital
(139) 227
Capital expenditure
131 104
Financial debt
3,010 2,846
Cash
570 540
Net debt
2,440 2,306
- Lease liabilities
1,914 1,851
Net debt ex lease liabilities
526 455
Cash and liquidity reserves
1,981 1,926
EUROPRIS CHAIN KEY FIGURES
Total chain sales
8,569 8,388
% growth in total chain sales
2�2% 27�8%
% growth in like-for-like chain sales
1�5% 26�7%
Total number of chain stores at end of period
270 266
- Directly operated stores
242 237
- Franchise stores
28 29
* For denitions and reconciliations of APMs, please see page 118
Key figures
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9
Letter from the CEO
Espen Eldal
CEO of Europris
30 years, but still young and promising
Europris added 2021 to our run of successful years.
Since the rst store opened its doors at Stavanger’s
Støperigata in 1992, we have enjoyed three decades of
growth and success – every single year. That is
impressive.
Regardless of who has owned or led our company, we
have grown stronger year by year and taken ever larger
market shares. The most important component for us is
not the owners or the management – it is the culture and
the people. That has been the formula for our success.
During another year marked by Covid-19, we
succeeded in adapting to more or less
continuous changes in infection control
measures and pandemic effects. That
was demanding for the workforce,
but we collectively succeeded in
adapting well and, not least, in
taking good care of the opportu-
nities offered by the market.
At Europris, we always strive to
concentrate on the things we can
affect ourselves. We focus our
attention where we can make a
difference and try not to be distracted
by external factors beyond our control.
At the same time, a culture has been
established for continuous development and
improvement where employees seek constantly to
become a little better in everything they do. Overall, this
yields a company which concentrates on opportunities
rather than threats and which constantly strengthens its
competence.
We are emerging from the Covid-19 pandemic
as a stronger company. This time has been used well.
We have improved our concept and the way we work,
and we have produced a good plan for the future. Over
the past two years, we have:
• strengthened our price position in the market
by executing campaigns better
• improved the customer experience by upgrading
several important categories
• safeguarded customer growth by recruiting more
than a million members to our customer club
• strengthened our e-commerce commitment with
the acquisition of Lunehjem and Lekekassen
• made operational improvements in our organisa-
tion which benet both employees and customers.
This means we are well equipped to meet day-to-day
life in 2022, our 30th anniversary year. The battle over
customers is going to be harder. Norwegian consumers
will now be lured to carefree nightlife and holiday
travel in a reopened society, at the same time
as power companies, service stations
and banks will seize a larger share of
their disposable income. The ght for
their wallets will be tough.
In more difcult times, our
concept should do well. When
customers must watch their
pennies, having good products at
low prices is an advantage. A
broad product range and low
prices have been a relative market
winner for many years – not only in
world. Condence in discount variety
stores is increasing, and customers are ever
more positive to trying private labels. While it used
to be considered “cheap” to shop in such places, the
“smart” customers are now ocking to this part of the
market.
A broad range of products at low prices represent a
growing part of the market, and we are a winner in this
segment. As the market leader, we accept that our
success will be noted and that more players will seek to
emulate us. We have lived with that for 30 years, and
would dare to claim that the competition sharpens us.
The trick is to concentrate on what we can inuence
ourselves and constantly get a little better at everything
we do.
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Directors’ report
Europris exceeded its previous record year of 2020
for both sales and prot in 2021. A cold winter gave a
strong start to the year. Solid seasonal execution and
good performance for upgraded categories ensured a
good performance throughout the year. As in 2020, the
group benetted from closed borders as a result of
Covid-19 for large parts of the year.
Towards the end of January 2021, the government
imposed strict restrictions which led to temporary store
closures from 23 January to 6 June. On average, nine
per cent of the chain’s stores were shut during the rst
half of 2021. Society reopened gradually from mid-June
and fully by the end of September, until restrictions were
reimposed in mid-December. Employees did a
tremendous job in adapting to rapid changes in infection
control measures and quarantines, and to a higher sick
leave because of Covid-19.
Europris successfully completed two acquisitions
during 2021, securing holdings of 67 per cent in the
online players Lunehjem and Lekekassen. These
strategic transactions have strengthened the group’s
online position in the home and interior and toy
categories and reinforce its expertise in e-commerce.
Both companies reported growth in sales and prots for
2021 on top of record performances in 2020. Synergies
through joint sourcing of products and services have
already begun to show results.
Owing to a favourable xed-rate agreement for
inbound freight, Europris was not affected by the supply
chain crisis which caused distribution problems for
retailers globally during 2021. These difculties led to
higher prices in the market, which in turn had a positive
effect on the gross margin for the group.
For 2021 as a whole, total sales growth for retail and
shopping centres was higher than for the Europris
chain. This development must be seen in relation to
the extraordinary sales growth achieved by the chain
in 2020. Taking 2020 and 2021 together, Europris
strengthened its position as a market leader in variety
retail and was a market winner with 30 per cent growth.
By comparison, variety retail achieved 17.9 per cent
growth over the same two-year period.
*Virke retail index (using igur
es reported by Statistics Norway )
** Kvarud Analyse shopping centre index
Total sales were NOK 8,648 million, up by 7.9 per
cent. Excluding companies acquired during 2021, sales
growth was 2.6 per cent. Where the Europris chain is
concerned, the basket increased while the number of
customer visits declined compared with 2020, but was
still well above the 2019 level. The basket was positively
affected by price, the product mix and a larger number
of articles.
The gross margin was very strong at 46.9 per cent, an
improvement of 3.5 percentage points. The xed-rate
agreement for inbound freight affected positively, in
addition to positive effects obtained from currency
hedging and the product mix. The latter was from a
higher share of seasonal items compared with 2020 and
from sales growth in upgraded higher-margin
categories.
Opex was NOK 1,973 million (NOK 1,773 million).
Development was affected by the consolidation of
part-owned subsidiaries, an increase in the number of
directly operated stores (from 237 to 242) and higher
costs from the product mix owing to a bigger share of
large-volume seasonal items which are more costly to
handle and transport.
The majority’s share of net prot was NOK 1,082
million (NOK 804 million). The board of Europris ASA
will propose an ordinary dividend of NOK 2.50 per share
for 2021 to the general meeting. This represents a 13.6
per cent increase from the ordinary dividend of NOK
2.20 for 2020. To reect the strong nancial perfor
-
mance, the board also proposes to pay an additional
dividend of NOK 1.50 per share for 2021. In total, the
proposed dividend will be NOK 4.00 per share and
amounts to NOK 644 million (excluding treasury shares
at 31 December 2021) which represents 59.5 per cent of
the majority’s share of the prot.
Sales growth
2021
2020
Two years
combined
Virke: total retail*
+4�6% +10�0% +14�6%
Virke: groceries*
-0�2% +15�9% +15�7%
Virke: variety retail*
-0�6% +18�5% +17�9%
Kvarud shopping
centre index**
+3�6% +4�0% +7�6%
Europris chain
+2.2% +27.8% +30.0%
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Net cash ow for the year was an inow of NOK 30
million (outow of NOK 28 million). Net debt at 31
December 2021 amounted to NOK 2,440 million (NOK
2,306 million). Adjusted for lease liabilities, it was NOK
526 million (NOK 455 million). Cash and available
credits were NOK 1,981 million at 31 December 2021
(NOK 1,926 million).
Business operations and strategy
Europris is Norway’s largest discount variety retailer
by sales. It has a exible business model which delivers
a unique value proposition for shoppers by offering a
broad range of quality private-label and branded
merchandise across 15 product categories. Europris is
a campaign-driven, low-price retailer focused on
conducting campaigns and providing good customer
offerings every week of the year. It aims to ensure that
advertised products are readily available in all stores
throughout the campaign period.
The Europris chain comprised a network of 270
stores nationwide at 31 December 2021. Of these,
242 were directly operated and 28 run as franchises.
Europris stores are designed to facilitate a consistent,
easy and efcient shopping experience with a dened
layout, making use of a distinctive shop-in-shop
concept.
Europris strengthened its e-commerce presence
during 2021 through the acquisition of two pure online
players in addition to strengthening the Europris.no
platform.
The group’s head ofce is located in Fredrikstad.
Europris opened its new central warehouse in Moss in
2019. Europris has had signicant volume growth in
2020 and 2021. To cope with future seasonal summer
volumes, the group has decided to expand warehouse
capacity in Moss.
Europris employs a low-cost operating model, with
attention concentrated on efciency across the entire
value chain from factory to customer. It aims to maintain
a low cost base through optimised and efcient
sourcing, logistics and distribution processes. Goods
are mainly sourced directly from suppliers in large
volumes. High-quality sourcing is central to the group’s
value proposition, and it benets from its cooperation
with Tokmanni and ÖoB. The acquisition of Lekekassen
and Lunehjem provides synergies for all parties through
joint sourcing of products and services.
The group contributes to local communities by
supporting local activities and organisations such as
sports clubs, humanitarian and charitable organisa
-
tions, cultural festivals and other local events. Through
its agreement with the City Mission of the Church of
conditions for people in difcult circumstances. Its
membership in the Norwegian Retailers Environment
Fund allows it to contribute to local and global initiatives
on reducing plastic waste.
The group’s key strategic initiatives are:
• strengthen the price and cost position
• improve the customer experience
• drive customer growth.
Operational review
Concept and category development
During the rst quarter of 2021, Europris upgraded
its home and interior department. This is an important
category, with a high share of own brands and
above-average margins. The upgrade has been well
received by customers and was one of the categories
with the highest growth in 2021. It upgraded the
chocolate and snacks category during the third and
fourth quarters of 2021. This was good timing, since
the border is opening, and this category is exposed to
cross-border trade�
The acquisition of Lekekassen provides access to
premium toy brands for sale in the Europris chain’s
physical stores. A trial run in 10 stores during parts of
the fourth quarter showed good results, with sales
growth above the chain average in the toy category.
Testing continues and a full roll-out is scheduled for
the second half of 2022.
E
uropris works continuously to improve its concept
and customer experience. It tested self-service sales of
selected outdoor seasonal items during 2021, allowing
customers to shop whenever it suits them by simply
scanning products and paying with the aid of the Vipps
mobile app. A test where customers were offered the
loan of a car trailer to facilitate more convenient
transport home of larger seasonal items has been well
received, and more stores will offer this service in 2022.
The group initiated two projects during 2021 to
increase efciency for handling the ow of goods in the
stores. These are expected to be rolled out to all stores
12
during the rst half of 2022. The rst project involves
measures to improve store readiness every week ahead
of campaigns, while the second aims to improve the
process of restocking stores. Both involve new routines
and a new way of working for store employees. Positive
effects from these projects are an increase in both
campaign and total sales, more efcient operations,
an improved customer experience and better working
conditions for employees.
Europris conducts a customer and market survey
every year via Mediacom, covering both the group
and key competitors. The results from the 2021 survey
conrm strong progress for price perception, deals,
product quality, shopping experience and service.
This is very satisfying, since the group has worked
on improving these areas.
For many years, Europris has worked systematically
with sustainability and ethical trade in the purchase of
goods. This work will continue. At the same time
Europris has set the target of making it easier for
customers to reach sustainable choices in its stores.
With its large volumes and efcient operations, the
group can ensure that ethical and sustainable products
are more easily accessible to customers at competitive
prices. For a start, Europris has collected 20 ofcial
sustainability certications under a single common
umbrella brand. This will make it easier for customers
to locate these sustainable products. Europris is also
in the process of testing the co-location of sustainable
products in its stores so that these have a more
prominent place and clearer labelling.
E-commerce and e-CRM
E-commerce sales from Europris.no amounted to
NOK 147 million in 2021, up by 71 per cent. Customers
prefer to collect their orders at the stores, and around
85 per cent of sales were click and collect. As a
response to this and to improve the customer
experience, the range offered for home delivery at
Europris.no is in the process of being slimmed, while
the number of products offered as click and collect will
be increased.
Europris is positioning itself as an omnichannel
retailer, and the interaction between physical and digital
marketing is an important factor in growing customer
visits to the stores. The goal is to shape an environment
where customers nd good information online and can
shop in the way which best suits them, whether online
or by visiting one of the chain’s physical stores. On
average, Europris.no had 2.6 million visitors every
month during 2021 (2.3 million). Around 700,000
newsletters are distributed electronically on a weekly
basis, in addition to some one million printed leaets.
Digital newsletters will gradually become more person-
alised and reect products and offers relevant to the
individual customer, with the aim of increasing store
visit frequency and basket size.
The group has continued recruiting members to its
Mer customer club. Launched in 2019, this reached over
a million members during 2021, up by more than 50 per
cent from the year before. Expansion of the membership
base reects successful recruitment campaigns, the
conversion of xed multibuy offers to exclusive Mer
offers, and campaign prices available only to Mer
members�
Lekekassen performed strongly in 2021, with record
sales in Norway and a promising start in Denmark. In
Sweden, competition and price pressure rose during
2021. Total sales for the Lekekassen group were NOK
591 million, an increase of 8.5 per cent. EBITDA was
NOK 110 million (up by 17.1 per cent) and the EBITDA
margin was 18.5 per cent (a rise of 1.4 percentage
points). Improved margins illustrate that synergies from
the cooperation can already be seen.
Lunehjem had a good year on top of a strong 2020,
with sales of NOK 32 million in 2021 (up by 12.8 per
cent) and EBITDA of NOK 4.4 million (a rise of 56.7 per
cent). One new position was created during 2021, with a
logistics manager hired to handle the company’s
growth. Warehouse capacity has reached its limits and
the company will relocate during 2022 to handle future
volumes.
Store estate
Europris opened four new stores in 2021, bringing the
total number in the chain to 270 at 31 December 2021.
The group has a healthy pipeline of new stores, with
board approval for an additional 10 in 2022 and beyond.
Of these, two are subject to planning permission.
Month Store County
March Austevoll Vestland
June Xhibition Vestland
September Jåttå Rogaland
November Selbu Trøndelag
New store openings in 2021
13
Europris relocated ve stores and completed nine
store modernisations/expansions during 2021. New
stores are an important driver for growth, and continued
expansion of the store base – in addition to relocations,
refurbishments and expansions of existing stores – will
remain important.
An analysis of stores opened in recent years showed
a performance in line with similar studies carried out
previously. This shows that, on average, sales growth
is strong in the rst four years after opening, before
stabilising at the same level as the chain’s like-for-like
growth. The most recently opened stores have
performed in accordance with their strict investment
criteria�
The appeal court proceedings over the Grini store
have been nalised and Europris can continue to
operate there. This is one of its larger stores, with
annual sales of around NOK 60 million.
Central warehouse
To cope with future volumes, Europris has decided to
expand warehouse capacity in Moss by 21,000 square
metres to 83,000 square metres. Finalisation of the
construction phase is scheduled for the rst half of
2023. Automation of the high-bay area is expected to be
completed in the rst quarter of 2024, and the old
central warehouse in Fredrikstad can then be nally
vacated. The total investment will be around NOK 100
million.
The ramp-up of automation for the low-bay area at
the central warehouse in Moss, with an original deadline
for nalisation before the summer of 2021, has been
delayed by technical issues. To avoid risking product
deliveries during the fourth-quarter high season, the
ramp-up was postponed until early 2022. Savings from
the total warehouse project remain intact, but are
delayed as a result of this late ramp-up.
ÖoB equity transaction and
operational development
Europris acquired a 20 per cent equity stake in ÖoB
on 13 December 2019, with payment in Europris shares.
As part of the agreement with ÖoB, the group holds an
option to acquire the remaining 80 per cent of the ÖoB
shares. This option runs for six months from the date
the parties reach an agreement on ÖoB’s 2019 EBITDA.
Pricing at both stages is based on an EV/EBITDA
multiple of 7.7, adjusted for net debt and average net
working capital.
The parties have not been able to reach an
agreement on the group’s EBITDA for 2019 and an
arbitration process has been initiated, but no date has
yet been set. The arbitration regarding the disagree-
ment over the legal right for Europris to challenge the
2020 EBITDA was concluded in favour of Europris in
February 2022�
Eva Lundqvist, the former head of HR, was appointed
as the new CEO of ÖoB on 15 November 2021.
Sales declined for ÖoB in 2021, but an improved
gross margin contributed to a higher EBITDA.
Key gures for ÖoB (preliminary and unadited)
* Excluding IFRS 16 effects.
Financial review
Income statement
Operating income amounted to NOK 8,648 million in
2020 (NOK 8,013 million), up by 7.9 per cent. Excluding
part-owned subsidiaries, sales growth was 2.6 per cent.
The key drivers for revenue growth were the acquisition
of part-owned subsidiaries, a 1.5 per cent increase in
the chain’s like-for-like sales, and new store openings.
Gross prot was NOK 4,056 million (NOK 3,478
million). The gross margin was 46.9 per cent (43.4 per
cent), an improvement of 3.5 percentage points. Gross
prot was positively affected by the xed-rate
agreement on inbound freight, in addition to the product
mix. The cost of goods sold included a net unrealised
gain of NOK 49 million (loss of NOK 30 million) on
hedging contracts and accounts payable.
Opex came to NOK 1,973 million (NOK 1,773 million).
It was affected by the inclusion of part-owned subsidi
-
aries and the increase in directly operated stores from
237 to 242. Operating expenses were 22.8 per cent
(22.1 per cent) of consolidated revenue.
SEK million
FY 2021 FY 2020
Sales 3,899�0 4,186�0
EBITDA*
70�8 62�3
14
Operating prot amounted to NOK 1,512 million (NOK
1,166 million), up by NOK 346 million or 29.7 per cent.
Net nancial expenses in 2021 were NOK 94 million
(NOK 139 million). The group recognised a net unrea
-
lised prot of NOK 26 million on interest swaps for 2021
(prot of NOK 11 million). In 2020, the group booked a
non-recurring interest expense totalling NOK 32 million
related to an error in interest-rate calculations, which
was discovered in connection with the transition to a
new IFRS 16 system.
Prot before tax was NOK 1,418 million (NOK 1,029
million).
Income tax expense in 2021 was NOK 314 million
(NOK 225 million), giving an effective tax rate of 22.1
per cent (21.9 per cent).
Net prot for 2021 was NOK 1,104 million (NOK 804
million), up by NOK 300 million. Net prot in 2021 from
acquired companies was NOK 68 million. The net prot
margin was 12.8 per cent (10 per cent). Prot attribu
-
table to non-controlling interests was NOK 22 million
and prot attributable to owners of the parent amounted
to NOK 1,082 million.
Earnings per share in 2021 were NOK 6.72, compared
with NOK 4.86 in 2020.
Cash ow
Net cash ow generated from operating activities was
NOK 1,591 million (NOK 1,705 million). The net change
in working capital was negative at NOK 139 million
(positive at NOK 227 million). Working capital was
negatively affected by timing differences for accounts
payable and the payment of other provisions and
accruals, as well as increased inventory owing to the
inclusion of part-owned subsidiaries and to shipping
goods earlier.
Net cash ow used in investing activities was negative
at NOK 684 million (negative at NOK 112 million). The
increase is related to the automation of the low-bay area
at the central warehouse in Moss, start-up investment
for automation in the coming expansion of the high-bay
area, and a larger number of store projects. In addition,
the acquisition of 67 per cent of Lekekassen was
completed during 2021, with NOK 501 million paid.
Net cash from nancing activities was negative at
NOK 877 million (negative at NOK 1,621 million). The
year 2020 was affected by renancing the group’s term
loan and the repayment of old term loan. In addition,
sales of treasury shares related to share programmes
for the employees, executive management and the
board amounted to NOK 7 million (buy-back of treasury
shares of NOK 245 million).
The net change in cash for 2021 was an inow of
NOK 30 million (outow of NOK 28 million).
Financial position
Financial debt at 31 December 2021 was NOK 3,010
million (NOK 2,846 million).
Net debt at 31 December 2021 was NOK 2,440 million
(NOK 2,306 million). Adjusted for lease liabilities, net
nancial liabilities were NOK 526 million (NOK 455
million). The group is in compliance with its nancial
covenant.
Cash and liquidity reserves for the group at 31
December 2021 amounted to NOK 1,981 million (NOK
1,926 million).
Equity
Equity at 31 December 2021 was NOK 2,889 million
(NOK 2,214 million) and represented an equity ratio for
the group of 33.4 per cent. The increase in equity was
made up of NOK 1,104 million in net prot and NOK 7
million in the sale of treasury shares, less NOK 434
million in dividend paid.
Allocation of prot
Europris ASA (the parent company) posted a prot of
NOK 639 million for 2021.
The board proposes the following allocation (NOK
million):
Ordinary dividend 418
Additional dividend 251
Retained earnings (30)
Total 639
15
The Europris group achieved a prot of NOK 1,104
million in 2021. Prot attributable to the owners of the
parent company amounted to NOK 1,082 million.
The board of Europris ASA will propose an ordinary
dividend of NOK 2.50 per share for 2021 to the general
meeting. This represents a 13.6 per cent increase from
the ordinary dividend of NOK 2.20 for 2020. To reect
the strong nancial performance, the board also
proposes to pay an additional dividend of NOK 1.50 per
share for 2021. In total, the proposed dividend will be
NOK 4.00 per share and amounts to NOK 644 million
(excluding treasury shares at 31. December 2021). The
proposed dividend represents 59.5 per cent of the
majority’s share of the prot.
Pursuant to section 3-3a of the Norwegian Account-
ing Act, the board conrms that the nancial statements
have been prepared on the assumption that the group
is a going concern.
Risk and risk management
The board pays great attention to risk, risk
management and internal control procedures, and
reviews the company’s risk register annually. Risk
classication is subject to periodic review by
management to identify any change in classication
and to follow up any actions agreed in order to mitigate
risks. For each key category, risks are identied and
classied in accordance with the likelihood of their
occurrence and the potential impact should they occur.
The risk register focuses on the following key risk
categories:
• nancial
• market
• operational
• strategic
The key risks identied are presented in the tables
below.
Risk type Description of risk Internal control
Interest rate
risk.
Interest-rate volatility
affecting the group’s
interest costs.
The nancial policy includes hedging interest rates. Sixty per cent of the
group’s long-term loan is currently hedged.
Liquidity risk.
Increased indebtedness
affecting the group’s
ability to grow and posing
a threat of breaching
nancial covenants.
Projected cash ows are updated regularly, and the group has sufcient
cash and credit facilities available.
Credit risk.
Risk of customers
defaulting.
Europris has limited exposure to credit risk. The clear majority of revenue
transactions are settled by debit card or in cash. Trade receivables relate mainly
to the group’s franchisees, where losses on trade receivables have historically
been limited. Sales to B2B customers are still a relatively small part of total
revenues and historically involve limited losses. All B2B customers are subject to
credit rating review.
Financial risk
16
Risk type Description of risk Internal control
Natural disaster,
conict,
pandemic, etc.
N
atural disasters and
conicts may affect the
production and supply of
goods.
A pandemic, depending on
restrictions imposed and
customer behaviour, could
have either a positive or a
negative effect.
Europris has many suppliers, who are located in different geographic regions. The prob
-
ability that the entire value chain will be affected is therefore low. The group can adapt its
range and campaign of
fering on the basis of available goods. Online shopping and click
and collect can also be offered to customers as a substitute for shopping in physical stores.
Europris’ store network is spread over a large geographical areas, thereby limiting the risk
that many of them will be affected by the same restrictions/effects simultaneously. The
product range consists mainly of products which all households need in their everyday
lives.
Macroeconomic
environment.
Changes in the macro-
economic environment
which reduce consumer
spending.
The Europris concept is resilient in uncertain times, with a wide and accessible store
network, a broad product offering at low prices, and attractive campaigns. The wide range
of products and price points allows customers to trade up and down. The operating model
is based on low costs to keep sale prices as low as possible. Forecasting and planning
models are detailed so that the group can react fast if the economic outlook changes.
Competition.
Signicantly increased
competition in the market.
Management follow developments in the market closely through regular reporting of
market data as well as through its own competitor analysis. Price surveys are conducted
systematically to monitor the group’s competitiveness on a continuous basis. Category
development is an important element, where Europris can, if desired, reduce its product
offering in categories facing strong competition while introducing new products in cate-
gories where competition is less erce.
Digitalisation.
Change in shopping
patterns as a result of
digitalisation.
Europris has a well-functioning e-commerce solution, with a broad range of products
available for click and collect in the stores or home delivery. The number of members in
the Mer customer club has reached more than one million, and a new e-CRM system
which permits personalised direct marketing is in place. Market
ing is directed to a greater
extent at social and digital media. Europris sees increased digitalisation as an opportunity
to use e-CRM to expand trafc in the physical stores. A large part of the range is low-value
products, less exposed to online shopping. Europris has also strengthened its online
presence in some categories through the acquisition of 67 per c
ent stakes in Lekekassen
and Lunehjem.
Sustainability.
Change in shopping
patterns as a result of
sustainability.
Sustainability forms an integrated part of Europris’ strategy and is taken into account in
product development and strategic initiatives. In addition, a separate sustainability strategy
has been developed. Seventy-ve per cent of all products sourced from the Shanghai
ofce were from externally certied factories (BSCI) in 2021. Europris also conducts its
own audits with its team at the Shanghai ofce and has several employees at this ofce
dedicated solely to sustainability and of supplier quality. In 2021, a new position was also
lled with a packaging expert whose main job is to reduce packaging and contribute to
more efcient transport and thereby cut CO
2
emissions. Detailed programmes for reducing
waste and energy consumption are in place for the stores, the logistics centre and the
main ofce.
Purchasing
prices, including
currency, and
overall cost
development.
Increased purchasing
prices, including currency
rate volatility, and rise in
other costs�
Purchasing prices and general cost development would also affect competitors in the
same way, and historically these types of cost increases have been absorbed by the
market. The group’s nancial policy includes a currency strategy, whereby all purchase
orders in USD and EUR are hedged for up to six months. This allows sufficient time to
adj
ust the retail price. Historically, this has proved to work well during periods with large
uctuations in the currency market.
Market risk
17
Risk type Description of risk Internal control
Central infra-
structure, property�
Loss of operating facilities
affecting operations or causing
serious injury to employees.
The group’s buildings are properly protected against re, and re drills are
conducted regularly. The group’s assets are covered by full-value insurance
in addition to business interruption policies.
IT infrastructure,
including cyber
risk.
Damage to IT infrastructure. Europris has good routines for backup and data security. Extensive IT security
tests, both physical and digital, are carried out and deviations handled and
improved on an ongoing basis. Europris has agreements with third-party providers
both for continuously monitoring logs for rapid identication of any security breach
-
es and a cyber incident agreement which ensures swift assistance should anything
arise�
Product risk,
food risk, harm to
people, animals,
the environment or
property�
Risk if a product harms
people, animals or the
environment.
Europris uses reputable suppliers who are well-established and have good ex
-
pertise in their categories and product types. Seventy-ve per cent of all products
sourced from the Shanghai ofce were from externally certied factories (BSCI) in
2021, in addition to audits by the team at the Shanghai ofce. The group performs
quality tests before approval and sale of products, in addition to random testing of
food products. Follow-up of suppliers with high-risk products have been intensied.
Routines for product withdrawals are established. Europris has insurance to cover
product risk and any consequential damage.
Supply chain.
Disruption to the supply chain
leading to shortages of goods
in stores.
Europris has a xed agreement with a solid logistics company for inbound freight
for long-travelled goods. Two transport rms are used for outbound logistics and,
if one fails. volumes can be shifted to the other. Other transport methods can also
be evaluated if a need for this should arise. Inventory levels in the stores are
sufcient to manage for some time without deliveries.
Regulation and
compliance.
Breach of regulatory or
legislative requirements
resulting in nancial penalties
and/or reputational damage.
The group has established policies and procedures with instructions in such areas
as ethical behaviour, diversity and equality, anti-corruption, data protection, compli
-
ance and corporate governance in the company. These are revised annually by the
board, and employee training is regularly conducted. Seventy-ve per cent of all
products sourced from the Shanghai ofce were from externally certied factories
(BSCI) in 2021, in addition to supplier audits by the team at the Shanghai ofce and
quality checks both at the Shanghai ofce and the quality ofce in Norway. Europris
conducts on-site inspections of suppliers in addition to extensive product testing.
Reliance on key
management.
Loss of key personnel/skills
which are critical to business
operations.
Europris has a structured approach to succession planning and talent manage-
ment. In this work, all managers are evaluated and potential successors in both
short and long terms are identied. In addition, plans are implemented for retention,
development and training of key staff.
Operational risk
18
Risk type Description of risk Internal control
Concept and cate-
gory development.
Lack of innovation entailing
lower margins and growth.
Europris has dedicated category teams which work systematically on concept and
category development. This is a strategic priority area for the group. The market
and consumer trends are continuously monitored and the group can rapidly adapt
to changes.
New store rollout.
Lack of protable new store
locations which affects the
group’s growth plans.
The property development team has a pipeline of potential locations and works
continuously to expand this list. The group maintains good relationships with land-
lords and is working strategically with other retailers for co-location of stores. New
store openings must meet strict investment criteria and all are
subject to board
approval. Development of new stores is monitored closely and shows that these
have historically performed well.
Omnichannel and
e-commerce�
Incomplete development
of solutions.
The group has developed a separate strategic plan for digitalisation, including
omnichannel and e-commerce. As part of this work, the board has appointed a
digital advisory board to support management. The group also made two acqui-
sitions of pure online players during 2021, strengthening expertise in this eld.
Alliances and
cooperation.
Improving sourcing prices and
co-developing PL range.
Europris has a collaboration with Tokmanni and ÖoB for sourcing and product
development, in order to achieve better purchasing prices and to realise synergies.
Europris and Tokmanni also have a joint venture at the Shanghai ofce.
Central warehouse
and automation.
Failure in implementing the
new warehouse and automa-
tion solutions, and in realising
communicated cost savings.
Finalising automation of the low-bay area has been delayed. However, the group is
condent that communicated savings are intact but at a delayed pace. A dedicated
team with sufcient expertise and resources is assigned to the project, and the
board monitors progress and conducts risk reviews on a regular basis. External
partners are highly rated professionals in their elds.
The high-bay area is already established and working well. Expansion of the
central warehouse in Moss will include automation of the expanded high-bay area,
which works well, while expansion of the low-bay area will be conventional.
Strategic risk
Directors’ and ofcers’
liability insurance
liability insurance policy for the group and its subsidi-
aries. This covers legal costs and personal liability for
directors and ofcers arising out of possible claims
made against them while serving on a board of directors
or as an ofcer.
Corporate governance
annually. Reporting accords with section 3-3b of the
Norwegian Accounting Act and the Norwegian code of
practice for corporate governance as updated most
recently on 14 October 2021. See page 24 for a detailed
statement on corporate governance at Europris.
Organisation and corporate
social responsibility
Employees and organisation
The employee engagement score, which showed an
all-time high in 2020, was exceeded again in 2021.
During two challenging years, it is particularly pleasing
that employees feel well cared for and enjoy their
workplace. Europris devotes great attention to employee
development. Improved virtual training during 2021, in
addition to courses with physical attendance, has been
greatly valued by participants.
Europris has high attention on ensuring a safe
working enviroment. As in 2020, the pandemic
continued to affect everyday working conditions for the
employees in 2021. Europris’ main focus during the
pandemic has been to ensure a safe place for
employees to work and for customers to shop. The
organisation has handled the pandemic in an
impressive way, especially when strict restrictions were
imposed and stores were forced to close temporarily at
19
very short notice. Managing store closures, sick leave
(from illnesses affecting both employees and their
children) and quarantines has not been an easy task,
but the Europris culture has again showed itself at its
best�
The global supply chain market has been demanding,
but this has been dealt with in an excellent manner by
employees handling the logistics operations. Through
hard work, the group managed to get all products to the
stores in time.
Equal opportunities and discrimination
Europris is a workplace with equal opportunities in all
areas. Where gender equality in parent company
Europris ASA is concerned, women accounted for 43
per cent of directors and 25 per cent of the executive
management group in 2021. The group’s ambition is to
increase the proportion of women in senior positions.
The group has 3,298 employees, of whom 60 per cent
are women. Working time arrangements are
independent of gender.
Europris’ policy is to promote equal human rights
and opportunities, and to prevent discrimination on the
grounds of age, gender, religion, ethnicity, nationality,
disability, sexual orientation, sexual identity or stage of
life. The group is working actively to promote Norway’s
Anti-Discrimination Act in its business. These activities
include recruitment and promotion, training and
development, pay and working conditions, and
protection against any type of harassment.
The actual condition in the organisation related to
gender equality and the actions implemented to full the
duty of activity in accordance with the Equality and
Anti-Discrimination Act § 26, are described in more
detail in a separate section of this annual report.
See page 49.
Natural environment
The group does not pollute the natural environment
beyond the level considered normal for this type of
business.
Pursuant to section 3-3c of the Norwegian Accounting
Act, the board has drawn up guidelines covering
business ethics and corporate social responsibility. The
main principles are covered in the company’s sustaina
-
bility policy, available on its website at https://investor.
europris.no. Europris’ activities in the area of corporate
social responsibility, including human rights, labour
rights, the working environment, equality, discrimination,
anti-corruption and the natural environment, are
described in more detail in a separate section of this
annual report. See page 33.
Transactions with related parties
No signicant transactions were conducted with
related parties in 2021.
Market developments and outlook
Rising energy prices, higher interest rates, continued
uncertainty related to Covid-19 and turbulence in the
world contribute to an uncertain macroeconomic
environment. In addition, price levels for groceries and
other goods are expected to increase. In total, these
represent signicant elements, which are expected to
affect consumer spending in 2022. The Europris
concept has proved resilient in uncertain times, with a
wide and accessible store network, a broad product
offering at low prices and attractive campaigns.
Europris signicantly improved its competitive position
in 2020 and 2021. With its unique and customer-friendly
concept, the group is a market winner and is conti
-
nuously gaining market share. It will continue to devote
attention to improving the shopping experience through
concept and category development, while the Mer
customer club provides a unique channel for promoting
activities which will bring trafc to the stores.
In addition, acquiring Lunehjem and Lekekassen have
broadened Europris’ exposure to the online channel for
certain categories. Expertise from these acquisitions will
also enhance the group’s online initiatives and
seamlessly integrate online shopping, digital activities
and shopping in physical stores.
The market for container freight is still unstable. No
indications of disruptions affecting Europris can
currently be seen, but a major Covid-19 outbreak,
market tubulence or other factors in the global supply
chain may change this picture. Europris is monitoring
the situation closely. Securing sourcing capacity is a
main priority, and a two-year agreement for inbound
freight from Asia has therefore been signed. This
ensures guaranteed capacity for an agreed level of
volumes. The annualised increase in costs for inbound
freight is estimated at NOK 170-200 million, and will
affect the nancial gures from March 2022.
20
With its exible business model, Europris has proven
its ability to adapt quickly to changes, and the board is
condent that the group is well positioned for the future.
The group’s long-term nancial and operational
ambitions remain unchanged:
• continue to deliver like-for-like growth above market
performance over time
• aim to open an average of ve new stores net per
annum, depending on the availability of locations
which meet strict requirements for the rate of return
as well as the potential for relocations, expansion
and refurbishment
• increase the EBITDA margin over time through
improved sourcing and a more cost-effective value
chain
• continue a dividend policy of paying out 50-60 per
cent of net prot while maintaining an efcient
balance sheet.
The board emphasises that uncertainty is faced in
assessing the outlook.
Events after the reporting period
No material events have occurred since 31 December
2021�
Fredrikstad, 24 March 2022
THE BOARD OF DIRECTORS OF EUROPRIS ASA
Claus Juel-Jensen
Karl Svensson
Espen Eldal
CEO
Tom Vidar Rygh
Chair
Hege Bømark
Tone Fintland
Pål Wibe
Bente Sollid Storehaug
21
22
The board
Tom Vidar Rygh is an adviser to the Nordic Capital Funds. He holds a degree in
economics and business administration (siviløkonom) from the Norwegian School
of Economics (NHH). Rygh has held various leading executive positions in industrial
and nancial companies, including executive vice president of Orkla ASA, CEO of SEB
Enskilda and partner in/CEO of NC Advisory AS – adviser to the Nordic Capital Funds. He has served as chair
and director of several companies in a number of sectors, including Telenor ASA, Oslo Børs, Carlsberg Brewer-
ies A/S, Storebrand ASA, Aktiv Kapital ASA, Eniro AB, Netcom ASA, Helly Hansen ASA, Dyno ASA, Industrikap-
ital Ltd, Actinor Shipping ASA, Borregaard Forests AS, Holberg Inc, Orkla Eiendom AS, Telia Overseas AB and
Baltic Beverage Holding AB. Rygh has also served as an adviser to a number of prominent investment groups,
such as TPG and the John Fredriksen group. He is regarded as independent of senior executives, material
business associates and the company’s major shareholders. Number of shares in Europris ASA: 610,035.
Hege Bømark
is a director of AF-Gruppen ASA, OBOSbanken AS and the Institute
for Eating Disorders. She has also been a director of Oslo Areal ASA, Norgani Hotels
ASA, BWGHomes ASA, Norwegian Property ASA and Fornebu Utvikling ASA, all of
which are or have been listed companies. Prior to becoming a full-time professional
director, Bømark served as a project broker in AS Eiendomsutvikling and as a nancial
analyst at Fearnley Finans AS and Orkla Finans AS. She holds a degree in economics and
business administration (siviløkonom) from the Norwegian School of Economics (NHH). Bømark is regarded as
independent of senior executives, material business associates and the company’s major shareholders. Number
of shares in Europris ASA: 8,129.
Tone Fintland has many years of experience as a senior executive in the pharma-
ceutical industry. She has functioned since 2016 as global procurement Director
at TEVA Pharmaceuticals, and has previously held similar positions in the Actavis
Group and Alpharma Inc. In addition, Fintland is a President of NIMA (the Norwegian
Association for Purchasing and Logistics) and NIMA Oslo Akershus Afliate. She holds
a Bachelor in Business Administration from the BI Norwegian Business School. Fintland is
regarded as independent of senior executives, material business associates and the company’s major
shareholders. Number of shares in Europris ASA: 10,808.
Tom Vidar Rygh
(chair)
Hege Bømark
Tone Fintland
23
Claus Juel-Jensen is a professional board member and has extensive boardroom
experience from different companies in food and non-food retail, food production
and wholesale in Germany, Denmark, Sweden and Norway. In his professional
career, he was the CEO of Netto Germany, a joint venture between Edeka Germany and
Dansk Supermarked Group, from 1995-2004 and after that CEO of Netto International (DK,
DE, SE, PL, UK) from 2005-2017. Juel-Jensen has extensive experience in the food discount industry and the
internationalisation of retail concepts. He holds a Master of Business Administration and an MSc from Copen-
hagen Business School and the University of Cologne, and has the rank of captain in the Royal Danish Guard.
Juel-Jensen is regarded as independent of senior executives, material business associates and the company’s
major shareholders. Number of shares in Europris ASA: 7,112.
Karl Svensson
Claus Juel-Jensen
Pål Wibe
Bente Sollid Storehaug
Pål Wibe joined XXL ASA as its chief executive ofcer in 2020. He has been the CEO
of Europris from 2014 to 2020. Prior to that appointment, he served as CEO of Nille AS
for almost seven years and CEO of Travel Retail Norway AS for two years. Before that,
he held various executive positions at ICA Ahold AB for six years and worked for ve
years in McKinsey & Co. Wibe holds a degree in economics and business administration
(siviløkonom) from the Norwegian School of Economics (NHH) and an MBA from the University of California at
Berkeley. He is regarded as independent of senior executives, material business associates and the company’s
major shareholders. Number of shares in Europris ASA: 408,572.
Bente Sollid Storehaug is CEO of Digital Hverdag and non-executive director of Polaris
Media, Hafslund E-CO, Nortel, Questback, Motor Gruppen and Eika Gruppen.
She is also chair of PlaceWiseGroup, Ocean Visioneering and Vinje Ullvarefabrikk.
Storehaug has been a member of several policy advisory boards for government ministers
in Norway. She has also been appointed by the government to an expert committee on the
future funding of the Norwegian Broadcasting Corporation (NRK). Storehaug established her own internet consul-
tancy in 1993, which is listed today on Oslo Børs as Bouvet ASA. She is the youngest member of the Norwegian
Association of Editors. Storehaug is regarded as independent of senior executives, material business associates
and the company’s major shareholders.
Karl Svensson is a director of RuNor AS, the Svensson family’s special purpose
vehicle for its investment in Europris. He is partner of Zurich-based nancial advisory
rm Lilja Capital Advisory Partners. Svensson also has operational retail experience,
having previously worked for Runsvengruppen AB, the parent company of ÖoB.
He graduated from Uppsala University in 2003 with an MSc in business and economics.
Svensson is regarded as independent of senior executives, material business associates and the company’s major
shareholders, with the exception that Europris holds an option to acquire the remaining 80 per cent of the ÖoB
shares. Number of shares in Europris ASA: 281,891.
24
1. Implementation and reporting on
corporate governance
The board of Europris is conscious of its responsibility
for the development and implementation of internal
procedures and regulations to ensure that the group
complies with applicable principles for corporate
governance.
Europris is listed on Oslo Børs and subject to
reporting requirements for corporate governance under
the Norwegian Accounting Act as stock exchange
regulations. Europris complies with the Norwegian Code
of Practice for Corporate Governance (the code), last
revised on 14 October 2021, which is available on the
Norwegian Corporate Governance Committee’s website
at www.nues.no.
Application of the code is based on the “comply or
explain” principle and any deviation from the code is
explained under the relevant item. At 31 December
2021 Europris deviated from the recommendation in one
section of the code during 2021 pertaining to the
establishment of separate guidelines regulating
responses to takeover bids (section 14).
The principles and implementation of the code are
subject to annual reviews by the board and a statement
is included in the annual report in accordance with the
requirements of the continuing obligations for listed
companies from Oslo Børs as well as the Norwegian
code�
2. The business
Europris is Norway’s largest discount variety retailer
by sales. The group offers a broad range of quality own
brand and branded merchandise across a wide range of
product categories. The group’s merchandise is sold
through the Europris store chain, which consisted at 31
December 2021 of a network of 270 stores throughout
Norway. Of these, 242 are directly owned by the group
and 28 operate as franchise stores. While Europris also
offers online shopping, physical stores will continue to
be the main sales channel in Europris for the forese
-
eable future. The group’s growth strategy remains
unchanged, and its expansion in discount variety
retailing will continue through both physical stores and
the online channel. The group’s headquarters and
storage facilities are located in Fredrikstad and Moss,
Norway.
The company’s business purpose, as presented in
article 3 of the company’s articles of association, is as
follows: “The company’s business is commercial activity
in the European wholesale and retail market, or
business in relation to this, including issuing loans, and
collateral and issuing guarantees for group companies
and direct or indirect involvement in business with
similar or other company object, as well as other
business in relation to the above mentioned”.
The board has established clear objectives, strategies
and risk proles for the group’s business activities, to
create value for its shareholders and to ensure that its
resources are utilised in an efcient, sustainable
manner to the benet of all its stakeholders. Europris,
as a consumer group, actively seeks to reduce risk and
the potential for negative business effects by integrating
sustainability in its business strategy. This is an
approach which also creates opportunities for growth
and long-term value creation. Europris has developed
various policies providing business practice guidance,
including on sustainability, code of conduct, ethical
trade, anti-corruption, data protection, trade sanctions
and whistleblowing. These policies set the standards for
the behaviour which can be expected internally and
externally in order to build trust, loyalty and responsible
behaviour internally, and to prevent violations and
negative effects externally.
Europris’ sustainability policy and supplier code of
conduct are available from the group’s website at https://
investor.europris.no. The group’s objectives, strategies
Corporate governance
Europris ASA has made a strong commitment to ensuring trust in the group and
to enhancing shareholder value through effective decision-making and improved
communication between the management, the board of directors and the share-
holders. The group’s framework for corporate governance is intended to reduce
business risk, maximise value and utilise the group’s resources in an efcient,
sustainable manner to the benet of shareholders, employees and society.
25
and risk prole are described on pages 10-20 of the
2021 annual report, while the group’s sustainability
efforts are described on pages 33-62.
Deviations from the code: None.
3. Equity and dividends
Capital structure
At 31 December 2021, the group’s equity totalled NOK
2,889 million, which corresponded to an equity ratio of
33.4 per cent. The board considers Europris’ capital
structure to be adequate in relation to the group’s
objectives, strategy and risk prole.
Dividend policy
Europris aims at a dividend pay-out ratio of 50-60 per
cent of the group’s net prot while maintaining an
efcient balance sheet. The group intends to provide
shareholders with a competitive return on invested
capital, taking into account its risk prole. It plans to pay
out surplus liquidity (funds not necessary for the group’s
day-to-day operations) in the form of a dividend or by
means of a capital reduction through distribution to the
shareholders. The group considers whether the
available liquidity should be used for new investment or
repayment of debt, instead of being paid out as
dividend. Subject to the approval of the AGM, the aim is
to pay dividend annually. Dividend payments are subject
to certain legal restrictions pursuant to the Norwegian
Public Limited Companies Act and should also take
account of the group’s capital requirements and
nancial position as well as general business condi-
tions.
Based on the nancial results for 2021 the board will
propose a dividend of NOK 2.50 per share. To reect
the strong nancial performance, the board proposes to
pay an additional dividend of NOK 1.50 per share for
2021. In total, the proposed dividend is NOK 4.00 per
share. The proposed dividend represents 59.5 per cent
of the majority’s share of the prot. Europris’ leverage
policy is to run the business with moderate leverage and
to maintain an efcient balance sheet.
Board mandates
The annual general meeting on 5 May 2021 granted
two separate mandates to the Europris board. Both
mandates are valid until the next AGM in 2022, but in
any event no longer than to 30 June 2022. A separate
vote was held on each mandate. For supplementary
information, reference is made to the minutes of the
AGM in 2021.
• A mandate to increase the share capital of Europris
ASA by a maximum of NOK 16,696,888� The
mandate corresponds to ten per cent of the shares
and share capital of the company. It may be used for
necessary strengthening of the company’s equity
and the issue of new shares as consideration for the
acquisition of relevant businesses. As of 31
December 2021, the authorisation had not been
used�
• A mandate to repurchase Europris ASA’s own shares
up to a total nominal value of NOK 16,696,888. The
maximum amount that can be paid for each share is
NOK 100 and the minimum is NOK 10. The mandate
corresponds to ten per cent of the shares and share
capital. Shares acquired pursuant to the mandate
may be deleted in connection with a later reduction
of the registered share capital, used as consideration
shares with regard to the acquisition of businesses
or used in the company’s incentive and investment
schemes for employees, executive management and
the board of directors� At 31 December 2021, the
company owns 5,997,376 treasury shares.
Deviations from the code: None.
4. Equal treatment of shareholders
Europris has one class of shares and all shares have
equal rights. Each share has a nominal value of NOK
1.00 and carries one vote. Europris ASA owned
5,997,376 treasury shares at 31 December 2021�
The board has a mandate to increase the company’s
share capital which allows the board to waive the
pre-emptive right of existing shareholders. In the event
of such a capital increase, the reason for the transaction
and the waiver will be provided in a public announ
-
cement. There were no such events in 2021.
Transactions involving treasury shares will be under
-
taken on the stock exchange or otherwise at the listed
price and reported immediately.
Deviations from the code: None.
26
5. Shares and negotiability
The Europris share is freely transferable on Oslo
Børs. No restrictions are set in the articles of associ-
ation on owning, trading or voting for shares.
Deviations from the code: None.
6. General meetings
The general meeting is the highest authority in
Europris ASA. It is open to all shareholders, and
Europris encourages shareholders to participate and
exercise their rights at the company’s general meetings.
In order to vote, the shareholder must be registered with
the Norwegian Central Securities Depository (VPS) at
the time of the general meeting.
Notication
The annual general meeting will be held each year
before 30 June. The 2021 AGM is scheduled for 21 April
2022. Extraordinary general meetings may be called by
the board at any time. The auditor or shareholders
representing at least ve per cent of the shares may call
in writing for an extraordinary general meeting to
discuss a specied matter.
Written notice of a general meeting, along with
supporting documents, is sent to all shareholders with a
known address at least 21 days prior to the date of the
meeting. Pursuant to article 7 of the articles of associ
-
ation, the notication and supporting documents need
not be sent to the shareholders if they are made
available to them on the group’s website at https://
investor.europris.no. Any shareholder may nevertheless
request that the documents be sent by mail by contact-
ing the investor relations department at Europris ASA or
by e-mail to ir@europris.no.
Registration and proxies
The registration deadline is normally ve days before
the general meeting, pursuant to article 7 of the articles
of association, and all the necessary registration
information is provided in the notice.
Shareholders who are unable to attend may vote by
proxy. The notice of the meeting will contain more
detailed information about the procedure for appointing
a proxy, including an authorisation form which permits
separate votes for each item up for consideration at the
general meeting. In addition, a person will be appointed
who can act as proxy on behalf of shareholders.
The board may decide that shareholders can submit
their votes in writing, including the use of electronic
communication, during a period before the general
meeting.
Agenda and execution
The agenda for the general meeting is determined by
the board, and the main items which it must contain for
the AGM are specied in article 8 of the articles of
association. The agenda will include detailed infor-
mation on the resolutions to be considered and the
recommendations from the nomination committee.
The chair of the board, the chair of the nomination
committee, the CEO, the CFO and the group’s auditor
will attend general meetings under normal circum
-
stances and unless they have valid grounds to be
absent. The meeting will normally be chaired by the
chair of the board. In the event of any disagreement
over individual agenda items where the chair of the
board belongs to one of the factions, or for some other
reason is not deemed to be impartial, a different person
will be selected to chair the meeting in order to ensure
independence with respect to the matters concerned.
Deviations from the code: None.
7. Nomination committee
The company’s nomination committee is regulated by
article 6 of the articles of association. It will comprise
two to three members, and the majority will be
independent of the board and the group management.
The composition of the committee will ensure that the
interests of the shareholders are safeguarded.
Instructions for the nomination committee were
adopted at the general meeting on 13 May 2015. They
include the main principles for the nomination commit
-
tee’s work, making and supporting proposals and
general procedures. The instructions are subject to
annual reviews, and any proposed changes will be
submitted to the general meeting for approval.
The nomination committee makes recommendations
to the general meeting regarding the election of
shareholder-elected directors, remuneration of directors
including relevant subcommittees, the election of
27
members and the chair of the nomination committee
and remuneration of members of the nomination
committee. Each proposal is justied on an individual
basis and presented with the notice documents to the
AGM. Shareholders in Europris are encouraged to
nominate candidates for the board. More information on
this can be found on the group’s website at https://
investor.europris.no.
At 31 December 2021, the nomination committee
consisted of the following members:
• Mai-Lill Ibsen (chair)
• Inger Johanne Solhaug
• Alf Inge Gjerde.
The members are elected by the general meeting for
a term of two years, and all the members are up for
election in 2022. All the members are considered
independent of the board and executive management.
Remuneration of the members of the nomination
committee is determined by the general meeting.
Deviations from the code: None.
8. Board of directors: composition
and independence
Article 5 of the articles of association provides that the
board will consist of a minimum of three and a maximum
of ten directors, as determined by the general meeting.
The board had seven members at 31 December 2021,
of whom three were women. All shareholder-elected
directors are regarded as independent of senior
executives and material business associates. Europris
holds an option to acquire the remaining 80 per cent of
the shares in ÖoB (Runsvengruppen), and one of the
directors are related to this company. The person in
question does not participate in related cases. None of
the executives are directors.
The directors are elected for a term of two years and
may be re-elected. The general meeting elects the chair
of the board�
According to the instructions for the nomination
committee, the board’s composition will be broadly
based to ensure that it has the necessary experience,
qualications and capacity to safeguard the common
interests of the shareholders. Furthermore, the compo
-
sition of the board should allow it to function effectively
as a collegiate body and to act independently of special
interests. A detailed presentation of the expertise and
background of the directors is available on the group’s
website at https://investor.europris.no.
Europris ASA has no direct employees and therefore
no requirement to appoint employee representatives to
the board. Three employees are represented on the
board of the Europris AS subsidiary and as observers
on the board of Europris ASA.
Directors are encouraged to hold shares in Europris.
An overview of director shareholdings in the company
can be found in note 22 to the 2021 annual report and
on the company’s website at https://investor.europris.no.
Deviations from the code: None.
Name Postion Served since Up for election
Tom Vidar Rygh Chair 2012
1
2023
Bente Sollid Storehaug Director 2015
2023
Hege Bømark Director 2015
2023
Tone Fintland Director 2017
2023
Claus Juel-Jensen Director 2017
2023
Karl Svensson Director 2019
2023
Pål Wibe Director 2020
2022
1
Served since 2012 in Europris AS and in Europris ASA since 2015.
28
9. The work of the board of directors
Board’s responsibilities and tasks
The board is responsible for supervising the general
and day-to-day management of the group’s business,
ensuring proper organisation, preparing plans and
budgets for its activities, ensuring that the group’s
activities, accounts and asset management are subject
to adequate controls, and undertaking investigations
necessary to the performance of its duties. Further-
more, the board determines the group’s overall
objectives and strategy, in addition to appointing the
CEO and determining the terms and conditions of his
or her employment.
Instructions for the board of directors
The board has adopted instructions which describe its
responsibilities, duties and administrative procedures,
including handling of related party transactions. The
instructions also regulate the distribution of duties
between the chair and the CEO. The current instructions
were approved by the board in May 2015 and are
subject to annual reviews.
Instructions for the chief executive ofcer
(CEO)
The instructions for the CEO regulate the day-to-day
management of the group’s operations to ensure that
the group pursues and seeks to reach the strategic
targets set by the board. The CEO is also responsible
for keeping the group’s accounts in accordance with
prevailing Norwegian legislation and regulations, and for
managing the group’s assets in a responsible manner.
The CEO briefs the board about the group’s activities,
nancial position and operating results at least once a
month. The current instructions for the CEO were
approved by the board in May 2015 and are subject to
annual reviews.
Conicts of interests and disqualication
Directors and members of the executive management
must notify the board immediately if they have a direct
or indirect material interest in an agreement or trans-
action entered into by the group. The board’s conside-
ration of material matters in which the chair of the board
is, or has been, personally involved will be chaired by
some other director�
Related party transactions
The group will immediately make public any material
transaction between the group and shareholders,
directors, leading employees or any of their close
relations, as well as with other companies in the group.
In the event of such transactions, the board will evaluate
whether it is necessary to seek a third-party valuation.
An independent valuation is required for material
transactions between companies in the same group
where there are minority shareholders. There were no
transactions with close associates in 2021.
Financial reporting
The board receives nancial reports and comments
from the CEO at least once a month on the group’s
operations, economic position and nancial status. The
board will also be kept continuously informed of any
material legal disputes, contract terminations, changes
in management and material conicts related to clients,
suppliers and employees. The nancial report forms the
basis for enabling the board to maintain an informed
view of the group’s results, capital adequacy and
nancial position. Quarterly nancial reports are
reviewed at board meetings, and these provide the
basis for external nancial reporting.
The work of the board of directors
The board will meet at least ve times a year. It held
nine meetings in 2021, with one meeting conducted by
email, four meetings were held virtually and four were
physical meetings. The overall attendance rate at board
meetings was 97 per cent.
Audit committee
The group’s audit committee is governed by the
Norwegian Public Limited Liability Companies Act and
a separate instruction has been adopted by the board.
The members of the audit committee are appointed by
and among the directors.
The audit committee’s primary purpose is to act as a
preparatory and advisory body for the board on matters
concerning accounting, auditing and nance. The
committee reports and makes recommendations to the
board, but the latter retains responsibility for deciding
on and implementing such recommendations. The audit
committee held ve meetings in 2021, with an overall
29
attendance rate of 100 per cent. At 31 December 2021,
the audit committee consisted of three directors who all
were regarded as independent of the group:
• Hege Bømark (chair)
• Tom Vidar Rygh
• Claus Juel-Jensen.
Remuneration committee
The group’s remuneration committee is governed by a
separate instruction adopted by the board. The
members are appointed by and among the directors. Its
primary purpose is to assist the board in discharging its
duties related to determining the compensation of the
executive management. The committee reports and
makes recommendations to the board, but the latter
retains responsibility for implementing such recommen-
dations. The remuneration committee held two meetings
in 2021, with an attendance rate of 100 per cent. At 31
December 2021, the remuneration committee consisted
of three directors:
• Tom Vidar Rygh (chair)
• Bente Sollid Storehaug
• Tone Fintland.
Board’s evaluation of its own work
The board conducts an annual assessment of its own
work and expertise, which is presented to the
nomination committee. The assessment includes the
work of the board, the work of its committees and the
contribution made by the various directors. The board
sets individual and collective targets to measure
performance, in order to ensure that the evaluation is an
effective tool. An evaluation of this kind was last
conducted in December 2021.
Deviations from the code: None.
10. Risk management and
internal control
The board is responsible for ensuring that the group’s
risk management and internal control systems are
adequate in relation to the regulations governing the
business. The board reviews the group’s main areas of
risk and internal control systems annually, including the
group’s guidelines and practices on sustainability and
how consideration for its stakeholders is integrated into
the group’s value creation. The audit committee holds at
least one meeting a year with the auditor, who presents
the group’s internal control routines, including identied
weaknesses and areas subject to improvements, for
review by the committee.
The board works to a plan which ensures that all the
various operational areas are subject to a more in-depth
review at least once a year. Management follows a
similar schedule in performing an evaluation of the
same topics ahead of the board’s review, in addition to
a periodic risk review.
Europris has established a treasury policy to dene a
framework for managing nancial exposure and group
treasury operations. The most recent update was
approved by the board in March 2021. The policy takes
account of the nancial and commercial risks that
Europris is exposed to and details the allocation of
responsibility for nancial risk management between the
board, the CEO, the CFO and within the Europris group.
The policy further species the risks that Europris is
exposed to, and how they should be managed,
reported, measured and controlled. The content of the
treasury policy is described in detail as working proce
-
dures in the Europris nance manual, where processes
and procedures are established in the form of instruct-
ions which serve as a reference for compliance with the
treasury policy. The policy is subject to annual reviews
by the board�
Europris prepares its consolidated nancial state
-
ments in accordance with the International Financial
Reporting Standards (IFRS), which are intended to give
a true and fair view of the company’s and the group’s
assets, liabilities, nancial position and results of
operations. The board receives reports at least once a
month on the group’s business and nancial results,
providing a good overview of the group’s strategic and
operational performance as well as plans for the
forthcoming period. In addition, quarterly reports are
prepared in accordance with Oslo Børs’ recommenda-
tions, which are reviewed by the audit committee before
the board meeting and subsequent publication.
As a discount retailer, Europris is exposed to a range
of market, operational and strategic risks which may
adversely affect the group’s business. Further infor
-
mation regarding such risk factors and how these are
30
managed is disclosed in the directors’ report and the
notes to the annual accounts for 2021.
Europris furthermore monitors attendance by
employees and promotes the health and wellbeing of its
workforce. In addition, it devotes attention to the training
and education of employees across all aspects of its
business.
The group’s CFO is responsible for conducting
unbiased, complete audits of the group’s compliance
programme, including guidelines for anti-corruption, on
a regular basis in light of the group’s specic business
areas, geographical location and legal obligations.
Deviations from the code: None.
11. Remuneration of the board
of directors
The nomination committee is responsible for
proposing the remuneration of directors in order to
reect the responsibilities, expertise and time spent as
well as the complexity of the business. Members of the
audit committee and remuneration committee are
entitled to additional remuneration, reecting the extra
workload. The proposal is approved by the company’s
general meeting. Directors’ fees for 2021 were approved
by the AGM in 2021.
Directors’ fees at 31 December 2021 were not linked
to performance, and the company does not grant share
options to its directors. Additional information relating to
directors’ fees can be found in note 7 to the nancial
statements included in the 2021 annual report.
Directors and/or companies with which they are
associated should not take on specic assignments for
the group in addition to their board appointment. If they
do, however, this must be disclosed to and approved by
the full board.
Deviations from the code: None.
12. Salary and other remuneration
for executive personnel
Europris has a policy of offering competitive remune-
ration for the executive management based on current
market standards as well as on group and individual
performance. The board has established guidelines for
determining pay and other remuneration for members of
the executive management.
Remuneration consists of a basic pay element
combined with a performance-based bonus scheme
linked to the group’s nancial and operational perfor
-
mance. The bonus scheme is limited to annual pay-out
of 12 months of gross base pay. The management
group participates in the group’s insurances, and may
be entitled to certain fringe benets, such as free
newspaper, car and phone.
The board has prepared a statement on the determi
-
nation of salaries and other benets payable to senior
executives. The guidelines were presented to and
adopted by the 2021 AGM. Further details relating to the
pay and benets payable to the CEO and other senior
executives can be found in note 7 to the nancial
statements included in the 2021 annual report.
Deviations from the code: None.
13. Information and communications
Investor relations
Investor relation activities at Europris ASA aim to
ensure that the information provided to nancial markets
gives market participants the best possible foundation
for a correct valuation of the group. Europris communi-
cates in an open, precise and transparent manner about
the group’s performance and market position in order to
give nancial markets a correct picture of its nancial
condition and other factors which may affect value
creation. Europris complies with the Oslo Børs code of
practice for IR, last updated in March 2021. The group
has adopted an IR policy, which is available in a
condensed form on the website at https://investor.
europris.no.
All market participants will have access to the same
information published in English. All notices sent to the
stock exchange are made available on the group’s
website at https://investor.europris.no and at https://
newsweb.oslobors.no. The CEO, CFO and IR manager
are responsible for communication with shareholders
and analysts in the period between general meetings.
Financial information
Interim reports are published on a quarterly basis, in
line with Oslo Børs’ recommendations. In connection
31
with the publication of its interim results, Europris holds
open investor presentations to provide an overview of
the group’s operational and nancial performance,
market outlook and future prospects. These presenta-
tions are also made available through webcasts on the
group’s website.
Deviations from the code: None.
14. Take-overs
No defensive mechanisms against takeover bids are
provided in Europris’ articles of association. Nor are
any other measures implemented specically to hinder
the acquisition of shares.
Deviations from the code: The board has not
established written guidelines for how it should act in
the event of a takeover bid. Since such circumstances
are normally one-off by nature, drawing up general
guidelines is challenging.
Were a takeover bid to be made, the board would
consider the relevant recommendations in the code
and whether the specic circumstances permit
compliance with the recommendations in the code.
15� Auditor
The group’s auditor, BDO AS, is appointed by the
general meeting and is independent of Europris ASA.
The board has received a written conrmation from the
auditor that requirements for independence and
objectivity have been met.
The board requires the auditor annually to present to
the board and the audit committee a plan covering its
main auditing activities and a review of the group’s
internal control systems, including identied
weaknesses and proposals for improvement. In
addition, the board requires the auditor to attend the
board meeting dealing with the group’s annual
accounts in order to highlight any material changes to
accounting principles, comment on any material
estimates, and report on any topics where a signicant
difference of opinion exists between auditor and
management.
At least once a year, the auditor and the board hold
a meeting without any representatives of the group’s
executive management being present. The auditor
normally attends all meetings in the audit committee.
The board has established guidelines for any work
performed by the auditor. All material services, audit-
related and otherwise, must be approved in advance by
the audit committee. The CFO is authorised to approve
such services on condition that (1) services approved
by the CFO are reported to the next meeting of the
audit committee, (2) such services must need to be
approved at short notice to protect the group’s
interests, (3) such services, following a case-specic
evaluation, do not affect the independence of the
auditor and (4) the service amount to a maximum of
NOK 250,000 and is of a “normal” nature.
The board will inform the AGM about the remune
-
ration payable to the auditor, broken down between
auditing and other services. The AGM approves the
auditor’s fees. For further information about remune-
ration of the auditor, see note 6 in the 2021 nancial
statements.
Deviations from the code: None.
32
33
Sustainability report 2021
Sustainability
topics
Main priority
areas
Commitments UN SDGs
Sustainable
value chain
1. Sustainable
products
2. Safe and good-
quality products
3. Responsible
supply chain
management
Europris’ recognises that its main impacts on
ESG issues comes from the products sourced
and sold in the stores. The group commits
itself to ensuring that merchandise in all stores
is produced and sourced in a sustainable
manner and that this is communicated clearly
to encourage customers to make sustainable
choices.
Resource-
efficient
business
model
4. Climate-friendly
operations and
logistics
5. Circular
solutions and
waste
reductions
Europris acknowledges that its operations
have an impact on the environment and strives
to reduce its environmental footprint by
promoting circular initiatives in its operations.
The group seeks to limit the impact of the
business through resource-efficient operations
and logistics.
Responsible
employer
6. Equal
opportunities and
an inclusive work
environment
7. Health and safety
at the workplace
The group commits itself to being an ethical
and responsible business which develops and
cares for its employees.
Empowering
customers
and
communities
8. Satisfied
customers
9. Local value
creation and
community
engagement
Europris cares about its customers and the
local communities in which it operates. The
group commits itself to ensuring its customers’
wellbeing and satisfaction and to giving back
the to local communities.
The Europris approach - sustainability in all we do
The Europris approach – sustainability in all we do
34
Sustainability in all we do
Europris shares the vision of a sustainable future
and recognises that sustainable development can
only be realised through a concerted effort by all
businesses and markets. The group supports inter-
national initiatives such as the Paris agreement and
the UN sustainable development goals (SDGs).
Europris believes it can play a key role in providing
affordable and sustainable choices for everyone.
The group takes a broad approach to sustai
-
nable development, with the overall aim
of ensuring long-term value creation.
It integrates environmental, social
and governance (ESG) aspects
in its value chain and opera
-
tions, and in its engagements
with customers and commu-
nities. These four aspects
provide the structure for this
sustainability report, which is
divided into four main
chapters: sustainable value
chain, resource-efcient
business model, responsible
employer and empowering
customers and communities.
Sustainability as an integrated part
of the corporate culture
The group is continuing its efforts to discuss
sustainability issues with employees in day-to-day
work and to integrate sustainability into its corporate
culture through information and training. The internal
“sustainability week” held for the rst time in 2020
was repeated in 2021, with increased participation
by employees and building on the objective of
increasing the understanding of and engagement
with sustainability in Europris. Employees held
presentations in the priority areas – unlike 2020,
when external partners were invited to present
throughout the week. This shows an increased and
growing understanding of sustainability across the
organisation. Recordings are published on the
group´s social media channel (Workplace), which is
available to all employees. Moreover, sustainability
newsletters have been introduced and sent to all
employees with facts and updates on these issues.
In addition, a monthly challenge is passed from one
store to another, where each shares and explains
how it works with a particular sustainability issue in
order to increase knowledge about and inspiration
for work done in this area.
Knowledge of sustainability has increased among
employees in general. An evaluation after the
internal sustainability week and from questions on
this subject in the annual employee satisfaction
survey show that knowledge about and interest in
this topic have increased. The group believes that
creating a better understanding of sustainability in
the organisation is a vital step towards
incorporating this in the corporate
culture and ensuring that sustain-
ability is part of everything it
does. As employees increase
their understanding of
sustainability, the group is
experiencing improvements
in the priority areas and
sees greater progress
towards its goals.
Reporting standards
and achievements
The sustainability report for 2021
has been prepared in accordance with
the core option in the Global Reporting
Initiative (GRI) standards. Europris is updated on the
new 2021 GRI standards. The recommendations of
the task force on climate change (TCFD) are being
used to identify, assess and mitigate the climate-
related risks the group is exposed to. Since 2014,
Europris has also incorporated reporting of its
greenhouse gas (GHG) emissions in alignment with
the GHG protocol in order to manage the climate
impact of both its own operations and its value chain.
The group is proud to be recognised for its sustain-
ability work, with a B score for its climate reporting
from the CDP, the global non-prot environmental
organisation, for the third year in a row.
Europris received an A- score for its 2020 sustain-
ability report from the Governance Group following
an evaluation of such presentations from the 100
E
n
v
i
r
o
m
e
n
t
Empowering
customers and
communities
Responsible
employer
Sustainable
value chain
Resource-efcient
business model
Sustainability in all we do
S
o
c
i
a
l
G
o
v
e
r
n
a
n
c
e
2018 2019 2020 2021
C B B B
35
largest companies on the Oslo Stock Exchange.
The group is very proud of this recognition and
devotes great attention to increasing expertise on
and knowledge about sustainability throughout its
organisation.
A focus on the most material
sustainability aspects
Europris has identied key sustainability impacts in
its value chain. These were mapped in the materi-
ality matrix (see next page). Where the position of
each topic depends on its relevance to Europris and
the group’s stakeholders. The most relevant stake
-
holders were identied through workshops with
representatives from all parts of the organisation.
Europris is in continuous dialogue with key stake-
holders, both internal and external, as part of its
daily operations. This gives it valuable input and
knowledge about how to adapt the business even
further in a sustainable direction in order to ensure
that its sustainability goals are met. An illustration
of key stakeholder groups, the type of dialogue
Europris has with them and the frequency of the
dialogue is presented below.
Stakeholders Type of dialogue Frequency
Employees
Meetings
Newsletters
Committees on priority sustainability areas
Sustainability week
Employer survey
Weekly/monthly
Monthly
Quarterly
Annually
Annually
Customers
Brand tracker survey
Sustainability customer survey
Newsletter
Website and Social Media
Annually
Annually
Weekly
Daily
Investors
Roadshows
Investor seminars
Meetings
Quarterly
Two - four per year
On request
Other partners, such as Green
Dot, Amfori, Norwegian Retailers’
Environment Fund, Ethical Trade
Norway
Meetings
Information meetings
Webinars, courses
Semi-annually, annually
Semi-annually, annually
Bi-monthly/semi-annually
as required (regulatory updates)
Local community, such as
charities and local partnerships
Meetings Regularly
Suppliers
One-to-one meetings
Vendor meetings
Code of conduct
At least twice a year, normally more often
Annually
Annually, related to contracts
36
Information acquired through communication with
stakeholders is used to update the materiality matrix
to show the sustainability effects which the various
stakeholders have on the group’s sustainability
focus. It also presents the direction being taken by
Europris’ sustainability strategy and provides the
foundation for the sustainability report.
Adjustments from 2021
As a result of the updated stakeholder assessment
and internal discussions, the material topic “satised
customers” has been moved upwards in the matrix.
Satised customers have been and will remain the
top priority in all the work Europris does. At the same
time, “data protection” and “business ethics and
anti-corruption” have been removed from the matrix,
since these topics are considered a prerequisite for
good performance on customer satisfaction and
ESG issues. Furthermore, “community engagement”
and “local value creation” have been merged into
“community engagement and local value creation”.
● Sustainable value chain: sourcing and providing
sustainable products at affordable prices
▲Resource-efficient business model: more
efficient operations and logistics to reduce the
environmental footprint
■
Responsible employer: being an ethical,
inclusive and safe workplace
★
Empowering customers and communities:
contributing to local communities in order to foster
long-lasting relationships
Most
important
Inuence on stakeholder assessments and decisions
Important
Signicance of economic, environmental, and social impacts
Most important
Health and safety
at the workplace
■
■
●
●
●
★
★
Safe and good
quality products
Community
engagement and
local value creation
Climate-friendly operations and locistics
Sustainable products
Responsible supply-
chain management
Equal opportunities and an
inclusive work environment
Satised customers
Circular solutions
and waste reduction
▲ ▲
37
Sustainable value chain
COMMITMENT: ensure that merchandise
in all stores is produced and sourced in a
sustainable manner and communicated
clearly in order to encourage customers
to make sustainable choices.
38
Europris’ main impact on ESG issues relates to the
sourcing and production of products. Both the
manufacturing processes and the raw materials may
negatively affect forests, water supplies, local eco-
systems and the people involved in the group’s
supply chain. Europris seeks to decrease the
environmental footprint of these products by con-
tinuously improving its sourcing strategy in terms not
only of responsible and ethical trade but also of the
manufacturing processes, raw materials, the
packaging used in the products, and the quality of
the products sold by the group.
Sustainable products
As a leading retailer in Norway, Europris has the
opportunity to inuence its customers to make more
sustainable choices which are better for people and
the planet. As a group selling thousands of products
in many different product categories, Europris sees it
as its responsibility to provide customers with more
sustainable options. By offering these, and through
clear communication to help shoppers nd such
products in its stores, the group can make real
changes together with its customers.
Europris aims to achieve annual growth for sales
of sustainable products in its stores. Turnover
reported as sustainable is products veried by
third-party certications. Twenty such certications
have been considered relevant to the product range
offered by the group with regard to the environment
and/or ethical trade, quality and health. An updated
list of these third-party certications can be found at
Europris.no.
Packaging
Waste from packaging is an environmental issue
worldwide, including in Norway. Every year, millions
of tonnes of packaging end up in the oceans, and
most of this stems from land. Europris sells
thousands of products every year, enclosed in
different types of packaging. As a large retailer in
Norway, the group has a responsibility to ensure that
the packaging used with its products is made from
recycled or sustainable materials, and that this is
reduced as much as possible. Europris´ consumers
are demanding more sustainable packaging, and
dialogue with other stakeholders has also made it
very clear that this is a topic of great importance to
them as well. Packaging is an important part of
making Europris products more sustainable, but is
not yet dened as a criterion to be communicated
under the group´s sustainability symbol.
The group has a responsibility to help customers
increase recycling through proper labelling.
Actions and results
For the third year in a row, the group has increased
the share of sustainable products in its total sales.
They accounted for 7.8 per cent in 2021, a growth
from 7.3 per cent in 2020 and 5.9 per cent in 2019.
A corporate project was initiated at the end of 2021
with the aim of intensifying work on sustainable
products and communication. Among other things,
Since the group took the plastic pledge in 2019
through its membership of Green Dot Norway, the
following three goals have been its priorities for
directly sourced products:
1. reduce packaging used
2. increase the use of recycled plastic
3. design for recycling – which starts with the
use of recyclable materials and proper
labelling of products in order to increase the
recycling rate at the end of the product’s
lifecycle
39
this project will dene sustainability criteria in
different categories, and develop and implement
work processes and solutions which will facilitate
a further increase in sustainable products.
The group launched its own umbrella sustainability
symbol in April 2021, covering twenty third party-
certied products at 31 December 2021. The aim
wis help customers nd sustainable products more
easily, since these are marked with the sustainability
symbol on shelves and in marketing material.
Europris also signed the Norwegian Guide Against
Greenwashing
1
, an initiative by several organisations
to promote honest communication on sustainability.
A signicant step in working with the group’s
packaging and plastic goals in 2021 was the employ-
ment of a packaging engineer to work on the dened
priority areas for packaging. During 2021, the group
used 445,132 kilograms of recycled plastic in its
products and reduced the amount of plastic by 7,762
kilograms. In addition to the three initial goals in
terms of packaging, the group has also selected
increased lling rate in product packaging as an
additional goal within this area.
Targets and ambitions
Europris’ overall aim is to continue work on
increasing the sustainable options offered to
customers year by year. The corporate project
created to pursue sustainable products and commu
-
nication will be working regularly and in a dedicated
way through workshops, sprints, pilots and regular
reporting on outcomes and milestones to the
management.
Important ambitions for the group within this area in
the coming year is to improve sustainability within its
product categories, increase awareness of its
umbrella sustainability symbol, improve its processes
for optimising packaging for directly sourced goods
and enhancing data quality for packaging.
Safe and good quality products
Europris takes its responsibility for customer safety
seriously. The group works to ensure safe and good
quality products, and has a dedicated product quality
and safety department. All high-risk products are
tested to ensure that they comply with international
and national legislation. The group works diligently
to avoid hazardous substances in products and to
continue meeting high standards of quality, trans-
parency and safety. This is particularly important as
merchandise is sourced from a multitude of suppliers
across the globe, which increases the risk that
certain products may fail to meet national require-
ments.
Products are tested at the production site in
accordance with Norwegian product regulations.
In addition, all high-risk items, such as electrical
products, toys, chemicals, food items, food contact
materials and pet food, undergo strict checks by the
quality assurance department before production can
take place. The group wants to ensure that all its
products are safe and of good quality and has zero
tolerance for recalls and withdrawals.
Actions and results
The quality assurance department in Norway has
concentrated attention on optimising routines and
testing in collaboration with the quality team in the
Shanghai ofce, the group´s joint sourcing ofce with
Tokmanni in Asia. The quality team at the Shanghai
ofce ensures pre-shipment inspections are carried
out for products produced in Asia. Reports from
these inspections must be approved by the quality
assurance department at the head ofce in Norway
before the shipment is released. This provides time
for corrections to be made before products leave the
production site and reduces the risk of faulty or
defective products being transported to Norway.
Increased attention has also been paid to
improving quality on the basis of feedback on
product defects through follow-up at regular meetings
with product managers. In 2021, a total of 1,875
third-party quality inspections were carried out in
1
Guide Against Greenwashing (gronnvasking.no)
Kilograms 2020 2021
Recycled
plastic 491,256 445,132
Reduced amount
of plastic 1,496 7,762
40
Asia (1,190 in 2020). No incidents of non-compliance
were found concerning of products and services in
2021. Five incidents involving incorrect labelling of
products occurred in 2021. These errors were
detected and corrected by the quality assurance
department before the products were sent to the
stores�
Europris has implemented a new system which
enables improved tracking and reporting of customer
complaints and product defects. Greater data
accuracy will allow the group to work more efciently
on reducing defects and improving quality. This is an
important aspect for sustainability and will improve
perceived quality for customers.
The group has intensied the attention it devotes to
suppliers of high-risk products or product categories
which exceed a claim rate of three per cent over the
year. This aims to improve the quality of unsatisfactory
products. With time, it will improve the overall
perception of the quality of Europris merchandise.
Targets and ambitions
Europris’ ambition is to continue improving its work
on quality. The group aims to strengthen its reputation
as a trustworthy and dependable retailer of discount
variety merchandise, while making quality an
important criterion for sustainability in specic
categories.
Responsible supply chain management
Europris’ products are sourced from suppliers with
production sites across the world. The group has a
supplier code of conduct based on UN and Interna-
tional Labour Organisation (ILO) conventions.
Suppliers in the group´s identied risk areas are
pre-screened to map whether they meet at least
minimum criteria under the Europris code of conduct
before it will do business with them.
All suppliers are required to sign agreements and
the Europris supplier code of conduct. In addition to
upholding excellent standards for business ethics and
anti-corruption, suppliers are required by this code
to minimise adverse effects on human health, animals
or the environment throughout their value chains.
National and international environmental legislation
must be respected. In the event of any violation,
suppliers will be given a warning and remedial action
will be followed up. If a supplier shows no intention of
taking remedial action within the specied time frame,
the contract will be terminated. The group’s code of
conduct can be found at Europris.no.
Actions and results
Products sourced from east Asia are provided by
about 45 per cent of total suppliers and account for
some 40 per cent of Europris merchandise sales.
Remaining merchandise comes from producers in
Norway or Europe. Europris has identied Asia as
the source of the group´s highest risk of failing to meet
social and ethical standards. The group has imple-
mented several important initiatives to reduce this risk
and continues to work purposefully to improve in this
area�
The group´s inspection team works systematically
on screening suppliers through Amfori or the
supplier’s own inspections, and follows up suppliers
with a low score. Europris’ ambition is that all goods
sourced through the Shanghai ofce by the end of
2023 come from suppliers and factories which have
been audited (Amfori BSCI
2
, for instance). Despite
stricter measures and difculties in carrying out
planned audits over the past two years because of the
Covid-19 pandemic, Europris increased the proportion
of its goods sourced from BSCI-audited factories by
12 percentage points, from 63 per cent in 2020 to 75
per cent in 2021. Europris maintains a whistle-blower
system, available to all stakeholders via Europris.no,
to make sure that important issues can be reported
anonymously. This measure is aimed at managing
potential problems related to breaches of the group’s
ethical guidelines.
Targets and ambitions
Europris will continue to improve its approach to
sustainable supply management and to raise environ
-
mental, labour and human rights standards among its
suppliers in order to ensure that no harm is done in its
supply chain. This will be achieved by continuing and
improving the work already begun and through the
collaboration with Amfori and Ethical Trade Norway.
2
Amfori BSCI is a monitor system that enables companies to trade with purpose by improving social performance
in their supply chain. For more information, visit: https://www.amfori.org/content/amfori-bsci
41
42
43
The global climate challenge is growing more acute as
emissions rise and changing climates cause negative
effects around the globe. This inevitably presents new risks
for business and for society at large – but also opportu-
nities for those contributing to the green transition. Europris
acknowledges that its operations have an impact on the
environment and strives to reduce its environmental
footprint by reducing waste and energy consumption in its
own operations and by seeking ways to cut CO
2
emissions.
Physical climate-related risks, such as increased
frequency and severity of extreme weather events,
can have a negative effect on the Europris value
chain. Transitional and liability risks are linked to
changing customer preferences. To mitigate the
effect of the identied risks, Europris carries out
ongoing assessments of its product portfolio and
logistics operations. Regular dialogue with stake
-
holders is conducted to ensure that their expec-
tations are met.
Europris will also experience several climate-
related opportunities such as increased market
share by offering more sustainable products.
Working on making its value chain more sustainable
will result in reduced indirect emissions, for example
Resource-efficient business model
Europris has conducted a workshop to identify its most signicant climate-related risks and opportunities
in accordance with the TCFD framework. A summary of the results is presented in the gure below.
Opportunity
Risk
management
and
sustainability
strategy
Climate risk
Physical
• Disruptions in the supply chain
• Reduced access to products and
raw materials
• Public regulation
Transition
• Changes in consumer preferences
• Investor ESG demands
• Employee and talent engagement
Liability
• Reputational risk
New market for sustainability
• Increased share of sustainable
products
• Reduced emissions from production
• Increased low-emission transport
solutions
• Better operational control over
supply chain
• Attract new talent and employees
COMMITMENT: limit the impact
of the business through resource-
ecient operations and logistics.
Selected priority areas:
· reduce energy use per square
metre in stores by 15 per cent by
the end of 2022, compared with 2018
· reach an overall recycling
rate of 85 per cent for the group
by the end of 2022
44
from the production of its products and through
low-emission transport solutions. Sustainability is
an important criteria also for existing employees.
Working on these areas contributes to employee
satisfaction which can contribute to employee
retention and to attracting new talent and employees
to the company.
Climate-friendly operations and logistics
To achieve its environmental strategy objectives,
Europris measures and assesses its emissions and
energy use and utilises the GHG protocol initiative to
report its emissions. Its carbon inventory is divided
into three main scopes of direct and indirect
emissions.
Scope 1 covers all direct emission sources,
including all use of fossil fuels for stationary
combustion or transport in owned, leased or rented
assets. Where Europris is concerned, this represents
vehicles purchased or leased for its employees.
Scope 2 includes indirect emissions related to
purchased energy – electricity and heating/cooling.
Where Europris is concerned, this represents all
energy consumed in its stores, head ofce and
warehouses.
Scope 3 includes indirect emissions resulting from
the group’s upstream and downstream value chain
activities which it does not control. Europris currently
measures downstream transport and distribution,
waste and business travel within this scope.
Europris is pleased to see results from the action it
has taken to cut energy consumption. The group has
gone from ve to two warehouses, and has imple
-
mented energy efciency measures in stores. It has
measurable specic activities for promoting sustain-
able operations, technical solutions and optimised
energy use.
The group’s head ofce in Fredrikstad and its
logistic centre are both Eco-Lighthouse certied.
Its head ofce moved to new premises in 2019. This
building is constructed with energy-saving measures
such as good insulation, external sunshading, LED
lighting, motion detectors to control lights, a venti-
lation system which switches off after working hours,
and solar panels.
Actions and results
Europris reduced its total GHG emissions (scopes
1 and 2, and selected scope 3 categories) by 1.9 per
cent in 2021 despite opening additional stores during
the same period. This decrease primarily reects
energy efciency measures and lower energy
consumption. The group has a target to reduce
energy use per square metre in stores by 15 per cent
in 2022, compared with the 2018 level. It reached a
19.8 per cent reduction in 2021.
2014 2015 2016 2017 2018 2019 2020 2021
6,500
5,228
5,119
5,033
4,480
3,843
3,197
■
Energy
■Waste
■Business travel
■Own vehicles
■Fuel oil
2,783
Greenhouse gas emissions (tCO
2
e)
45
Total energy-related emissions decreased by 30
per cent from 2020 to 2021 as a result of targeted
emission-reduction activities and using less fossil
fuel in the energy mix. Goods transport, energy use
and waste were the group’s main sources of carbon
emissions during this period, while business travel
and transport using own vehicles accounted for
only 2.7 per cent.
Own vehicles
Europris updated its vehicle policy in June 2021.
When the group enters into lease agreements for
employee vehicles, zero-emission models will be
the preferred option. Requirements which indicate
that alternative-fuel vehicles need to be chosen
must be approved by the departmental head from
the management team. Seventy per cent of new
cars leased in 2021 were electric. Non-electric
vehicles were only used where required by the
mileage/range needs of district managers. This cut
scope 1 emissions in tCO
2
e by 6.9 per cent in 2021.
Energy
The group was very pleased to see the rst
results from self-generated renewable electricity
using solar panels at its head ofce in 2020. This
represents a small but meaningful measure in
efforts to reduce the group’s CO
2
footprint. The
solar panels generated 45.2 MWh in 2021 (47.7
MWh in 2020).
Europris warehouses achieved a 13 per cent cut
in electricity consumption while consumption of
district heating was reduced by 16 per cent. There
was a drop in emissions from the warehouses of 33
per cent.
The year 2021 saw much attention devoted to
energy-saving measures in stores, with close
monitoring of energy use and best practice shared
across stores and districts. These efforts led to
an 8 per cent drop in electricity consumption in the
stores. Specic measures taken during 2021 to
contribute to these results included:
• better monitoring technology
• improved routines for energy use and follow-up
of saving measures in stores
• additional LED light installation in 38 stores,
bringing the total to 81 per cent of stores.
Combined with emission reductions in the Nordic
electricity grid, driven primarily by increased use of
renewable energy, these efforts contributed to a
reduction in scope 2 emissions of 30% in 2021.
Through its partnership with Energima, Europris
has embarked on a pilot project for storing
electrical energy. This work is partly funded by
Enova SF, a company owned by the Ministry of
Climate and the Environment. The project will help
to cut greenhouse gas emissions, develop energy
and climate technology, and strengthen security
of supply.
The pilot aims to learn how to improve the lifecycle
of both new and second-hand batteries, while
handling peak load management (peak shifting) in
a building’s power grid. An installation at Europris
Råde will primarily be used for testing and
optimising a cloud-based energy management
system (EMS). This controls charging and
discharging of the battery pack to avoid peak
tariffs or to buy energy when prices are low over a
24-hour cycle. Using the batteries smoothens the
load on the mains supply and reduces losses in
the electrical transmission system. Local electrical
capacity is effectively increased without the need
to upgrade the building’s power intake.
Pilot project with second-hand use of batteries for energy storage
46
Transport
Emissions from transporting sourced goods were
included in the climate report for the rst time in 2019,
and showed that goods transport released more
GHGs than Europris´ own direct emissions. The group
recognises that it shares this impact with suppliers,
and is working to nd efcient logistical solutions with
low emissions. Monitoring emissions from transporting
sourced goods provides a basis for further dialogue
with partners on nding more sustainable solutions.
Higher sales volumes and a larger number of stores
have led to an increase in CO
2
emissions from
transportation of goods from the warehouses to the
stores. Initiatives have been taken to reduce the
number of heavy goods vehicles (HGVs) on the road
by expanding the size of modular semi-trailers. This
removed an average of 350 HGVs from the road in
2021. Increasing the load factor on HGVs removed
another 75 in 2021. Europris evaluates alternative
transport methods where viable options are feasible.
Emissions from upstream goods transport was
included from 2019, resulting in a signicant increase
in reported emissions of CO
2
. The total carbon
footprint for Europris in 2021 was 9,246.4 tonnes
of CO
2
e, including upstream goods transport.
The table below shows CO
2
emissions, including
goods transport.
Targets and ambitions
The group will continue to look at ways of reducing
its emission from energy consumption and transport
by identifying internal initiatives and by collaborating
with external partners to reduce amounts emitted in
these areas�
Europris intends to set science-based targets
(SBT) in 2021 approved by the SBT initiative.
A workshop on scope 3 was conducted with an
interdisciplinary group in 2021. This identied
overcoming a lack of data as a rst step, and work on
improvements here will start in 2022. A challenge in
this area is the lack of existing information required to
calculate emissions in the relevant indirect areas,
especially for purchased goods. Ensuring reliable
data will be the rst step towards establishing SBTs
and establishing the basis for further strategic work
on reducing direct and indirect CO
2
emissions.
Circular solutions and waste reduction
An expanding number of stores puts pressure on
Europris to decouple business growth and environ-
mental impact. This underlines the importance of
waste management and circular solutions. The group
is committed to reducing waste in its own operations.
It will continue to seek solutions for reducing waste in
its operations and for helping its customers to do the
same�
Europris has a partnership with Ragn-Sells to
increase its efforts with waste management. This
applies to all stores, the logistic centre and the head
ofce. The aim is to reach a total recycling rate for
the group of 85 per cent by the end of 2022.
Actions and results
Europris has signicantly reduced emissions from
waste management by cutting the total weight of
waste and increasing recycling. Emissions from
waste in 2021 were up by 24 per cent compared with
2020, while the recycling rate rose from 73 to 75 per
cent over the same period. The rise in emissions
from waste reects the inclusion of estimates for the
remaining stores where Europris does not have data
and which have not been included previously.
Excluding these estimates there was a reduction
of 2 per cent.
Recycling rate 2020 2021
Stores 73% 74%
Warehouse 83% 86%
Head ofce 53% 89%
9,246
9,427
8,758
2019 2020 2021
■Own vehicles
■Fuel Oil
■Energy
■Business travel
■Waste
■Upstream transport
Greenhouse gas emissions (tCO
2
e)
47
Recycling rate in the stores increased to 74 per cent
during 2021, compared with 73 per cent in 2020.
Europris understands that more attention needs to be
devoted to further increasing the recycling
rate and reducing waste in its stores, and
this will be done in 2022.
The central warehouse had a
recycling rate of 86 per cent in 2021,
up from 83 per cent in 2020, which
demonstrates the high level of attention
paid to waste management. Amongst the
specic measures contributing to these
results were an increased number of waste
disposal points and the introduction of a compactor for
cardboard�
The Europris head ofce had a recycling rate of
less than 45 per cent at the beginning of 2020.
Subsequent measures contributed to a solid impro
-
vement, with a recycling rate of 53 per cent at the
end of the 2020 and 89 per cent at the end of 2021.
Among the specic measures contributing to these
results were clear labelling and information about
waste disposal on all bins as well as the installation
of textile containers and strengthening the
partnership with the local City Mission of the Church
of Norway, which has reduced waste from product
samples.
Evaluation of the pilot project with
Too-Good-To-Go revealed that other
initiatives are more signicant in terms of
reducing food waste, and greater attention
will therefore be paid to these. When
several stores were required to close
temporarily because of the pandemic in
2021, the Too-Good-To-Go cooperation was
benecial for minimising food waste.
Targets and ambitions
The group is pleased with the improvements made
to the recycling rate at its warehouses and head
ofce. It understands that reaching its total recycling
rate of 85 per cent by 31 December 2022 requires a
big concentration on nding solutions and further
improvements. Europris will continue to increase
efforts together with its waste management partner
Ragn-Sells to achieve further gains in this area.
GHG emission, tCO
2
e 2019 2020 2021
Change from
previous year
Scope 1
Transport total
210�6 163�3 152�1 (6.9%)
Scope 2
Location-based electricity
2,150�0 2,038�3 1,425�7 (30.1%)
Market-based electricity
11,246�3 13,075�9 10,403�3 (12.8%)
District heating
15�1 3�6 4�2 16�7%
Location based indirect energy consumption
2,165�1 2,041�9 1,429�9 (30.0%)
Market based indirect energy consumption
11,261�4 13,078�5 11,409�6 (12.8%)
Scope 3
Upstream transport and distribution 4,914�6 6,230�6 6,462�1 3�7%
Waste
1,203�9 889�8 1,106�6 24�4%
Business travel
262�9 101�6 95�7 (5.8%)
Total location based GHG emissions
8,757.1 9,427.2 9,246.4 (1.9%)
Total market based GHG emissions
17,853.4 20,463.8 19,226.1 (6.0%)
Note: Europris reporting of GHG emissions and energy consumption accords with a corporate accounting and
reporting standard. It takes account of the GHGs, all converted to CO
2
e: CO
2
, CH
4
, N
2
O, SF
6
, HFCs, PFCs and NF
3
.
Statistics from the International Energy Agency (IEA Stat) provide electricity emission factors. These are based on
either local averages in heating/cooling or average IEA statistics. GHG emissions are consolidated on the basis of
where the group has operational control.
6%
improvement
of total GHG
emissions
48
49
Responsible employer
Dedicated employees are the groups most
important asset. The workforce will be assured an
inclusive and safe working environment, where
personnel can develop and have long and
meaningful careers. The group’s core values and
business ethics are communicated regularly and
clearly so that employees can use them as guide-
lines in their working day. The policies and guide-
lines in place apply to all employees, whether they
are full-time, part-time, permanent, or temporary
hires�
The group maintains a whistle-blower system
which is available to all stakeholders, both internal
and external, via its website. This ensures that
important matters can be reported anonymously
– such as any breaches of the group’s ethical
guidelines, including discrimination, harassment
and sexual harassment. Five cases were reported
in 2021, none involving discrimination. All
incidents were handled and resolved
by the HR and legal departments.
Equal opportunities
and an inclusive work
environment
The group believes in equal
opportunities for all people,
regardless of age, gender,
religion, ethnicity, nationality,
disability, sexual orientation, sexual
identity, or stage of life. A separate
policy on diversity and non-discrimination
has been approved by the board. Previously this
topic was covered in the ethical policy but has been
separated to underline the importance of this area and
to strengthen how Europris will work to prevent any
harassment or discrimination and work for equality.
The group has a working environment committee
(AMU), which holds four meetings a year. It
comprises representatives from the head ofce,
the stores and the warehouses. AMU plays an
important part when it comes to how the group
works with i) investigating risk for discrimination,
non-equality or risk within HSE, ii) analysing any
causes for the identied risks, iii) suggest and
ensure implementation of appropriate measures
and iv) evaluate results from measures taken. AMU
took part in drawing up the group’s improvement
strategy for a health-promoting workplace. Through
participation in workshops and meetings, employee
representatives play a natural role in producing all
processes or policies affecting the workforce. The
annual employee engagement survey is also an
important channel to receive feedback from
employees.
In order to map risks, safety hazards or breaches
to policies the group uses an electronic deviation
system and regularly performs employee interviews,
risk assessments, conducts physical inspection
rounds, and performs a climate survey and an
employee satisfaction survey on an
annual basis. Employees can also
report work-related risks or any
deviations/breaches via their
managers, the HSE manager or
the HR department. In addition,
risk and deviations can be
reported anonymously through
the external whistle-blower
system. The HSE managers,
accompanied by the safety
delegates and other employees,
follow up any identied deviations.
Actions and results
Recruitment and promotion
The group works with diversity through a trans-
parent and open recruitment policy and has a zero-
discrimination policy. The group works to provide all
employees with the opportunity for growth in the
organisation. Europris has an ambition that at least
COMMITMENT: be an
ethical and responsible
business which develops
and cares for its employees.
50
50 per cent of store managers are internally recruited.
Internal recruitment of store managers was 85 per cent
in 2021 (75 per cent in 2020). Although the group
devotes attention to internal recruitment, every recru-
itment process is advertised externally to ensure that
all aspects of diversity are maintained. A new system
for testing candidates was implemented in 2021 to
ensure the candidates are ranked on the basis of their
personal traits and skills and to reduce the risk of
discrimination and unconscious prejudice during the
recruitment process. Whenever possible, the aspiration
is to have at least one candidate from each gender in
the nal round of the recruiting process.
Europris welcomed 1,147 new employees in 2021
(1,004 in 2020). The employee turnover rate was 19.8
per cent, down from 22.6 per cent in 2020.
Europris collaborates with social welfare schemes
such as the one run by the Norwegian Labour and
Welfare Administration (NAV). The group welcomed 27
new employees under this scheme in 2021 (18 in
2020). This is an important partnership for Europris
because it allows the group to contribute to an
extended aspect of value creation by providing people
with the opportunity to gain work experience and return
to the workforce.
Training and development
The Europris Academy was revitalised in 2020 and
provides relevant learning for employees across the
organisation. A learning management system (LMS)
was put in place to ensure that competence
development and training are documented, followed
up, systematised and available at all times.
Store employees participate in training across a
diverse range of areas during a year, both virtually and
physically, depending on the topic to be covered. The
main training given to store employees falls within the
following categories:
• Product, concept and seasonal execution
• Leadership and store management
• Onboarding of new employees
• Health, Safety and Environment
To ensure a good onboarding process for new store
managers, Europris introduced a mentor programme
in 2020 with the aim of inspiring and supporting such
personnel. A total of 17 mentors had been trained at
31 December 2021�
A new platform for virtual training was introduced for
administrative personnel in 2021. It comprises a wide
range of courses in several categories. All product
managers underwent a certication course during 2021
in negotiating techniques, while IT personnel attended
project management training. To prepare leaders for
changing market trends, a combined strategy and
leadership programme was developed and rolled out
to all mid-level managers in 2021. This programme will
continue in 2022 and 2023.
Pay and working conditions
The group devotes attention to its gender balance
and strives to have at least one candidate of each
gender in the nal round of all recruitment processes.
Generally speaking, more women work in the stores
and more men in the warehouses, which is represen
-
tative for this type of industry. So is the high proportion
of part-time contracts. Europris has started to map
involuntary part-time work and will address this topic
more closely in the future.
The pay gap for the group show that men are paid on
average 12 per cent more than women. This reects a
larger number of men in more senior positions and an
age differential where men on average have greater
seniority. The group monitors that employees with
individual pay agreements receive equal pay for equal
work. Any deviations must be explained by differences
in education, training, competence, age or other
relevant criteria. Should any inequitable pay gap be
discovered, such differences will be handled on a
case-by-case basis. Many employees are covered by
collective pay agreements. This ensures equal pay for
equal work for most of the personnel in the group.
Targets and ambitions
The group will continue to work towards constant
improvement in fostering an inclusive and safe
workplace, without discrimination or non-equality. The
gender pay gap is part of the annual pay adjustment
process, where any inequitable differences will be
addressed. Diversity is taken into account in recruit-
ment and promotion processes. The group will also
maintain its partnership with NAV to continue including
people who have dropped out of the working life.
Turnover Women Men Total
Group 19�7% 20�0% 19�8%
51
Gender balance,
number of
employees
Temporary
contracts
Part-time
contracts
Involuntary
part-time work
Parental
Leave
(average weeks)
Women Men Women Men Women Men Women Men Women Men
1,978 1,320 17% 12% 44% 22% 9% 3% 22 6
Share of women and men are based on the total numer of emplyees in the group.
Gender balance and pay difference
Number of
women
Number of
men
Pay difference
men vs women
Group
1
1,920 1,281 12�0%
Executive management
2
2 6 NA
Central management 8 35 10�7%
Store managers 137 111 4�2%
Remaining staff on individual pay agreements 77 92 17�3%
Employees on collective agreements 1,696 1,037 1�7%
Board of directors, age
and gender distrubution Women Men
Under 30 years - -
30-50 years - 1
Over 50 years 3 3
Employees, gender
distribution Women Men
Group 60�0% 40�0%
Executive management 25�0% 75�0%
Central management 18�6% 81�4%
Store managers 55�2% 44�8%
Remaining staff on
individual pay agreements
45�6% 54�4%
Employees on collective
agreements
62�1% 37�9%
Employees, age
distribution
Under 30
years
30-50
years
Over 50
years
Group 45�8% 40�9% 13�2%
Executive management - 37�5% 62�5%
Central management 2�3% 60�5% 37�2%
Store managers 7�7% 68�5% 23�8%
Remaining staff on
individual pay agreements
11�8% 58�6% 29�6%
Employees on collective
agreements
52�2% 37�0% 10�8%
1
Excluding Lekekassen and Lunehjem.
2
Pay difference is not published as there is less than ve women in this group.
52
The group has established two projects to pursue
further improvements in diversity and equal opportu-
nities. One revolves around more accurate data for
better analysis and for enabling the group to work
more strategically on this topic. The other aims at a
better structuring the work already being done in this
eld. The group will work continuously on diversity,
equality, non-discrimination and a healthy
and safe working environment in the
areas of recruitment, promotion,
training and development, pay
and working condtions, including
unwanted part-time contracts,
accommodation of special
needs, stages of life, harass-
ment and sexual harassment.
Health and safety
at the workplace
Most of the group’s employees work
in the stores and warehouses. Ensuring
that the stores are welcoming and stocked with the
merchandise customers want requires physical
work, and the group’s employees are therefore
prone to occupational injuries and illness. HSE
measures are accordingly of central importance to
Europris in promoting a safe working environment
and preventing accidents. The group has a
dedicated human resources (HR) department and
two designated HSE managers who work conti-
nuously to follow up any issues and to ensure
learning and improvement.
Actions and results
The workplace must never pose health and/or
safety hazards for employees. To ensure safe and
healthy working conditions, the group devotes great
efforts to preventative and rehabilitative measures
– including e-training, in-house HSE courses and
specialised courses for elected safety delegates.
Preventive initiatives are important for creating a
workplace which promotes good health. All
employees are covered by a management system
for human resources.
This contains several modules which ensure easy
management of employees and provide a solid
foundation of secure master data on human
resources in accordance with the general data
protection regulation (GDPR). All employees have
access to information, processes and routines in
internal handbooks, which are updated in accor
-
dance with current laws and regulations.
Work on strengthening the group as
a health promoting workplace in
2021 involved increasing the
awareness and training of
employees in key roles. Other
important priority areas
encompass preventive, rehabili
-
tative and inclusive initiatives.
The pandemic affected the level
of sick leave in both 2020 and 2021.
More employees caught Covid-19 in
2021 than the year before, which was in line
with overall developments in society. Employees
have done a tremendous job in handling all the
quarantine-related absences, since working from
home is not an option for the majority of the group’s
workforce.
A total of nine lost-time injuries was recorded for
2021, none resulting in long term absence.
Targets and ambitions
The group works continuously on being a safe and
health promoting workplace. A signicant ambition
up to 2025 is to improve attendance and reduce sick
leave among employees. To achieve this, the group
will facilitate HSE-related learning and training
programmes for all managers and employees. It will
conduct more ergonomic reviews and seek to
identify the root causes of work-related sick leave.
Specic initiatives targeting mental health are high
on the agenda, since absences related to this cause
have increased during the pandemic.
Sick leave 2020 2021
Group 8�6% 8�8%
53
54
55
Europris cares about its customers and the local
communities in which it operates. It engages with
local communities through sponsorships,
partnerships and other community-building
activities, and with charities contributing to both
social and environmental causes.
Satised customers
Europris’ works to strengthen and maintain its
leading position in the Norwegian discount
variety retail market. The group is
dependent on a strong customer base
and therefore strives to provide
customers with a positive and
welcoming shopping experience.
Europris has conducted an annual
market and customer survey since
2007 though an external agency
(Mediacom brand tracker) to evalu-
ate its performance on important
parameters�
Europris´ slogan “pay less – save more”
promises to help customers save both time and
money. When visiting an Europris store, customers
should have a good shopping experience with
helpful and friendly staff and the opportunity to
choose between a wide range of products.
Actions and results
The group is pleased to see an increase in
customer satisfaction in the annual market and
customer survey from Mediacom in 2021. This is a
result of the great attention paid to important areas
such as price perception, deals/promotions, product
quality, the shopping experience and service.
Several categories, such as kitchen, home and
interior, and chocolate and candy, have been
upgraded in recent years. A shop-in-shop strategy,
combined with reduced complexity through greater
use of a basic range in campaigns, improves the
shopping experience and makes it easier for
customers, while being at the same time more
efcient for the stores in maintaining a good
operating standard.
Several projects based on Lean methodology
have also been run throughout the organisation in
recent years. This improves the working day for
employees. A project concentrated on centra
-
lising and improving customer service
was launched in 2021. This
involved more standardised
procedures, updating customer
system and increased
training.
Targets and ambitions
The group will continue
having customer satisfaction
as a high priority in all areas of
the organisation, with the aim of
strengthening the positive
perception of Europris each year. The
road ahead will still involve analysing the results of
customer surveys and customer data to keep ajour
with evolving customer needs and expectations.
Local value creation and
community engagement
Europris’ stores are located across Norway,
including many in smaller communities. The group
recognises its position as a local value creator, will
always comply with local tax regulations and will
strive to create value through local job creation and
through supporting the local community via indirect
Empowering customers
and communities
COMMITMENT: ensure the wellbeing
and satisfaction of customers and give
back to local communities.
56
value creation. Europris contributes to the latter by
supporting local activities and organisations, such as
sports clubs, humanitarian and charitable organisa-
tions, cultural festivals and other events which take
place in the areas where it has a presence.
Through its agreement with the City Mission since
2016, the group provides annual nancial contribu
-
tions to help improve conditions for those in need.
Europris also contributes to this partnership for
instance through supplying products for specic
projects at cost price, providing surplus products,
distributing their marketing campaigns through the
groups communication platforms, and placing
clothes containers outside its stores.
Europris has been a member of the Norwegian
Retailers Environment Fund since 2018. All the
members donated NOK 0.50 to the fund per plastic
bag sold in 2021, and these proceeds are invested in
local and global initiatives to reduce plastic waste,
particularly in the sea.
Actions and results
Europris continued its efforts to raise awareness
among its employees of the group’s main
partnerships in this area. In addition, action taken
locally by the stores has been highlighted and
communicated to all employees. During the internal
sustainability week, three store managers were
invited to share what they do locally in order to
inspire other store owners while helping to raise
awareness and build a sense of pride in belonging to
a group which contributes to the community. A
monthly newsletter where store managers share
stories on this topic is also distributed to all
employees.
A questionnaire sent to store employees showed
that they regard helping the local community as
motivating and important. They would like to
increase their contribution to local communities
instead of having it centralised. However, they want
dened guidelines to help facilitate this work. The
group has therefore created a corporate project
starting in 2022 with the aim of standardising proce
-
dures and providing local store managers with tools
which make them better able to serve the commu-
nities they are part of.
Moreover, Europris supplied products to several
projects initiated locally by the City Mission, the
Helping Heart and other local organisations, together
with local sponsorship of sports clubs.
Europris contributed NOK 8 million to the
Norwegian Retailers Environment Fund in 2021.
The fund has participated in several initiatives this
year, including:
• initiating Clean Norway, the country’s rst
comprehensive national clean-up programme,
in 10 counties
• helping to clear away 1,000 tonnes of plastic
waste from the natural environment
• helping to clean up 5,000 kilometres of coastline
• launching and conducting Norway’s largest
campaign to address the use of plastic bags,
which has already reached out to millions of
Norwegians through many channels.
Targets and ambitions
Europris will continue to strengthen its local
presence by establishing stores in new locations
throughout Norway. This allows people to access
products where they live, making their lives more
convenient and providing sustainability for everyone.
The group will continue to foster strategic
partnerships with local initiatives, and thereby
encourage social and environmental value creation
outside its immediate operations. Its corporate
project in this area will produce plans to create and
provide a tool kit which enables local stores to
achieve better results by positioning themselves as
important contributors to their community.
57
Store openings in 2021
Jåttå, September
Selbu, November
Austevoll, March
Xhibition, June
58
GRI section
Description Comments Page
Organisational prole
102-1 Name of the organisation Europris ASA -
102-2 Activities, brands, products and services In the directors´ report 10
102-3 Location of headquarters Dikeveien 57, 1661 Rolvsøy, Norway -
102-4 Location of operations In the directors´ report 10
102-5 Ownership and legal form In the directors´ report 10
102-6 Markets served In the directors´ report 10
102-7 Scale of the organisation In the directors´ report 10
102-8 Information on employees and other workers In the sustainability report 49
102-9 Supply chain In the directors´ report and sustainability report 10,37
102-10
Signicant changes to the organisation and
its supply chain
In the directors´ report 10
102-11 Precautionary principle or approach The precautionary principle is applied -
102-12 External initiatives In the sustainability report 55
102-13 Membership of associations In the sustainability report 55
Strategy
102-14 Statement from senior decision-maker Message from the CEO 9
Ethics and integrity
102-16
Values, principles, standards and norms of behaviour In the sustainability report 6,33
Governance
102-18 Governance structure In the corporate governance report 24
Stakeholder engagement
102-40 List of stakeholder groups
Employees, customers, shareholders, investors
& nancial community, local communities, NGOs,
suppliers
35
102-41 Collective bargaining agreements In the consolidated nancial statements, note 8 85
102-42 Identifying and selecting stakeholders In the sustainability report 33
102-43 Approach to stakeholder engagement In the sustainability report 33
102-44 Key topics and concerns raised In the sustainability report 33
Reporting practice
102-45
Entities included in the consolidated nancial statements
In the consolidated nancial statements, note 1.2 72
102-46 Dening report content and topic boundaries In the sustainability report 33
102-47 List of material topics In the sustainability report and GRI index 33,58-62
102-48 Restatements of information NA -
102-49 Changes in reporting NA -
102-50 Reporting period 01�01�21-31�12�21 -
102-51 Date of most recent report Annual Report 2020 -
102-52 Reporting cycle Anually -
102-53 Contact point for questions regarding the report Tatiana Gutierrez Eide - tatiana.eide@europris.no -
102-54
C
laims of reporting in accordance with the GRI Standards GRI standards core -
102-55 GRI content index Europris GRI index - 2021 58-62
General disclosures
Global Reporting Initiative (GRI) is an independent international standards organisation which has developed
the world’s most widely used framework for sustainability reporting. These guidelines consist of reporting
principles, aspects and indicators which organisations can use to disclose information related to their nancial,
environmental and social performance.
This report has been prepared in accordance with the GRI Standards: core option.
The table below shows Europris reporting relative to the GRI Standards.
Europris GRI index 2021
59
Material topics
GRI section
Description Comments Page
Sustainable value chain
Sustainable products
GRI 103 - Management approach
103-1
Explanation of the material topic and its boundary
In the sustainability report,
section "Sustainable value chain"
38
103-2
The management approach and its components
In the sustainability report,
section "Sustainable value chain"
38
103-3
Evaluation of the management approach
In the sustainability report,
section "Sustainable value chain"
38
G4 FP1- Procurement/sourcing practices
FP1
Percentage of purchased volume from suppliers
compliant with company’s sourcing policy
Information not available - Europris
will work on a sourcing policy in 2022
-
G4 FP2 - Procurement/sourcing practices
FP2
Percentage of purchased volume which is veried as being in
accordance with credible, internationally recognised responsible
production standards, broken down by standard
In the sustainability report, section
”Sustainable value chain”
38
Responsible supply-chain management
GRI 103 - Management approach
103-1
Explanation of the material topic and its boundary
In the sustainability report, section
”Sustainable value chain”
40
103-2
The management approach and its components
In the sustainability report, section
”Sustainable value chain”
40
103-3
Evaluation of the management approach
In the sustainability report, section
”Sustainable value chain”
40
GRI 308 - Supplier environmental assessment
308-1
New suppliers which were screened
using environmental criteria
Information not available - Europris is currenly
screening suppliers post contract signing,
according to BSCI principles
-
GRI 414 - Supplier social assessment
414-1 New suppliers which were screened using social criteria
Information not available - Europris is currenly
screening suppliers post contract signing,
according to BSCI principles
-
Safe and good quality products
GRI 103 - Management approach
103-1 Explanation of the material topic and its boundary
In the sustainibilty report, section
”Safe and good quality products”
39
103-2 The management approach and its components
In the sustainibilty report, section
”Safe and good quality products”
39
103-3 Evaluation of the management approach
In the sustainibilty report, section
”Safe and good quality products”
39
GRI 416 - Customer health and safety
416-1
Assessment of the health and safety impacts
is done for all high risk products
In the sustainibilty report, section
”Safe and good quality products”
39
416-2
Incidents of non-compliance concerning the health
and safety impacts of products and services
In the sustainibilty report, section
”Safe and good quality products”
39
GRI 417 - Marketing and labelling
417-2
Incidents of non-compliance concerning products
and service information labelling
In the sustainibilty report, section
”Safe and good quality products”
39
60
GRI 306 - Efuents and waste (2016)
306-2 Waste by type and disposal method
In the sustainability report, section ”Circular
solutions and waste reduction”
46
Responsible employer
Equal opportunities and an inclusive work environment
GRI 103 - Management approach
103-1
Explanation of the material topic and its boundary
In the sustainability report, section
”Responsible employer”
49
103-2
The management approach and its components
In the sustainability report, section
”Responsible employer”
49
103-3
Evaluation of the management approach
In the sustainability report, section
”Responsible employer”
49
GRI 401 - Employment
401-1
New employee hires and employee turnover
In the sustainability report, section “Equal
opportunities and an inclusive work environment”
- “Recruitment and promotion”
49
401-3
Parental leave
In the sustainability report, section “Equal
opportunities and an inclusive work environment”
51
GRI 404 - Training and eductation
404-1
Average hours of training per year per employee
“In the sustainability report, section “Equal
opportunities and a constructive work environment”.
Currently reporting type of training and participation
rate”
50
GRI 405 - Diversity and equal opportunity
405-1
Diversity of governance bodies and employees
In the sustainability report, section “Equal
opportunities and an inclusive work environment”
51
405-2
Ratio of basic pay and remuneration of women to men
In the sustainability report, section “Equal
opportunities and an inclusive work environment”
51
GRI 406 - Non-discrimination
406-1
Incidents of discrimination and corrective actions taken
In the sustainability report, section “Equal
opportunities and an inclusive work environment”
49
GRI section
Description Comments Page
Resource-efcient business model
Climate-friendly operations and logistics
GRI 103 - Management approach
103-1
Explanation of the material topic and its boundary
In the sustainability report, section
”Resource-efcient business model”
43
103-2
The management approach and its components
In the sustainability report, section
”Resource-efcient business model”
43
103-3
Evaluation of the management approach
In the sustainability report, section
”Resource-efcient business model”
43
GRI 302 - Energy
302-1 Energy consumption within the organisation Table ”GHG emissions” 47
GRI 305 - Emissions
305-1
Direct (scope 1) GHG emissions Table ”GHG emissions” 47
305-2
Energy indirect (scope 2) GHG emissions Table ”GHG emissions” 47
305-3
Other indirect (scope 3) GHG emissions Table ”GHG emissions” 47
Circular solutions and waste reduction
GRI 103 - Management approach
103-1 Explanation of the material topic and its boundary
In the sustainability report, section
”Resource-efcient business model”
43
103-2 The management approach and its components
In the sustainability report, section
”Resource-efcient business model”
43
103-3 Evaluation of the management approach
In the sustainability report, section
”Resource-efcient business model”
43
61
Health and safety at the workplace
GRI 103 - Management approach
103-1
Explanation of the material topic and its boundary
In the sustainability report, section
”Responsible employer”
52
103-2
The management approach and its components
In the sustainability report, section
”Responsible employer”
52
103-3
Evaluation of the management approach
In the sustainability report, section
”Responsible employer”
52
GRI 403 - Occupational health and safety (2016)
403-1
Occupational health and safety management system
In the sustainability report, section
“Health and safety at the workplace”
52
403-2
Hazard identication, risk assesment and incident investigation
In the sustainability report, section
"Health and safety at the workplace"
52
403-3
Occupational health services
In the sustainability report, section
“Health and safety at the workplace”
52
403-4
Worker participation, consultation and
communication on occupational health and safety
In the sustainability report, section
“Health and safety at the workplace”
52
403-5
Worker training on occupational health and safety
In the sustainability report, section
“Health and safety at the workplace”
52
403-6
Promotion of worker health
In the sustainability report, section
“Health and safety at the workplace”
52
403-7
Prevention and mitigation of occupational health and
safety impacts directly linked by business relationships
In the sustainability report, section
“Health and safety at the workplace”
52
403-10
Work-related ill health
In the sustainability report, section
“Health and safety at the workplace”
52
GRI section Description Comments Page
Empowering customers and communities
Satised customers
GRI 103 - Management approach
103-1 Explanation of the material topic and its boundary
In the sustainibilty report, section
”Empowering customers and communities”
55
103-2 The management approach and its components
In the sustainibilty report, section
”Empowering customers and communities”
55
103-3
Evaluation of the management approach
In the sustainibilty report, section
”Empowering customers and communities”
55
Europris - own indicator
1
Mediacom customer survey results
In the sustainibilty report,
section ”Satised customers”
55
2 Number of customer complaints
In the sustainibilty report,
section ”Satised customers”
55
GRI 201 - Economic performance
201-1 Direct economic value generated and distributed
In the sustainibilty report, section ”Local
value creation and community engagement”
55
Europris - own indicator
3
Description of approach
In the sustainibilty report, section ”Local
value creation and community engagement”
55
Local value creation and community engagement
GRI 103 - Management approach
103-1 Explanation of the material topic and its boundary
In the sustainibilty report, section
”Empowering customers and communities”
55
103-2 The management approach and its components
In the sustainibilty report, section
”Empowering customers and communities”
55
103-3 Evaluation of the management approach
In the sustainibilty report, section
”Empowering customers and communities”
55
GRI section
Description Comments Page
62
63
The management
Espen Eldal was appointed CEO of Europris in April 2020.
He has been the Chief Financial Ofcer of the company since
2014. Prior to his appointments in Europris, he served as
managing director of Berendsen Tekstil Service AS, and Sales
& Marketing Director and Finance Manager of PartnerTech,
Norway. Prior to this, Mr Eldal worked as a Finance Manager in Travel Retail Norway,
prior to which he held various executive positions in Gate Gourmet both in Scandina-
via and in Switzerland. Mr Eldal holds a Bachelor in Finance and Administration from
Oslo University College, is a certied auditor and has completed the Ofcers’ Training
School. Mr Eldal is a Norwegian citizen and resides in Norway.
Espen Eldal - CEO
Stina Charlene Byre started as CFO of Europris in January 2021.
Ms Byre came from the position as CFO of COWI AS, where she
had been CFO since 2019. Prior to this, she spent 10 years in
Orkla, holding various nancial management positions; CFO of
Orkla Health Group, CFO of Pierre Robert Group, Financial Manager
of Lilleborg and Financial Manager of Orkla Brands. Ms Byre started her career as
a management consultant at McKinsey & Company. She holds a Master of Business
and Economics from BI Norwegian Business School, including exchange program
at Texas A&M University in the USA. Ms Byre is a Norwegian citizen and resides in
Norway.
Stina C Byre - CFO
64
About Europris �������������������������������������������������������������������������������� 4
Key gures ������������������������������������������������������������������������������������� 7
Letter from the CEO ����������������������������������������������������������������������� 9
Directors’ report ���������������������������������������������������������������������������� 10
The board ������������������������������������������������������������������������������������� 22
Corporate governance ����������������������������������������������������������������� 24
Sustainability report ���������������������������������������������������������������������� 33
The management ������������������������������������������������������������������������� 63
Consolidated nancial statements ����������������������������������������������� 65
Income statement ������������������������������������������������������������������������� 67
Balance sheet ������������������������������������������������������������������������������� 68
Statement of changes in equity ���������������������������������������������������� 70
Statement of cash ows ��������������������������������������������������������������� 71
Notes �������������������������������������������������������������������������������������������� 72
Parent company ������������������������������������������������������������������������� 103
Income statement ����������������������������������������������������������������������� 104
Balance sheet ����������������������������������������������������������������������������� 105
Statement of changes in equity �������������������������������������������������� 107
Statement of cash ows ������������������������������������������������������������� 108
Notes ������������������������������������������������������������������������������������������ 109
Decleration to the annual report ��������������������������������������������������117
Alternative performance measures denitions ���������������������������118
Auditor’s report ��������������������������������������������������������������������������� 120
Shareholder information ������������������������������������������������������������� 125
Content
65
EUROPRIS ASA
GROUP 2021
66
67
Figures are stated in NOK 1,000 Note 2021 2020
Revenue 5 8,568,379 7,928,658
Other income 5 79,798 83,971
Total operating income 5 8,648,177 8,012,629
Cost of goods sold (COGS) 20 4,592,143 4,534,134
Employee benet expensees 6,7,8 1,230,303 1,138,193
Depreciation 12,13,14 571,223 539,927
Other operating expenses 6,9,14 742,749 634,794
Total operating expenses 7,136,420 6,847,049
Operating prot 1,511,758 1,165,580
Interest income 10 102 181
Other nancial income 10 28,253 11,227
Total nancial income 28,354 11,408
Interest expense 10,14 101,548 131,583
Other nancial expense 10 21,201 18,893
Total nancial expense 122,750 150,476
Net nancial income (expense) (94,395 ) (139,068 )
Prot/(loss) from associated companies 16 189 2,600
Prot before tax 1,417,551 1,029,112
Income tax expense 11 313,588 225,489
Prot for the year 18 1,103,963 803,624
Prot attributable to non-controlling interests 22,152 -
Prot attributable to owners of the parent 1,081,811 803,624
Earnings per share (basic and diluted) – in NOK 18 6.72 4.86
Consolidated statement of comprehensive income
Prot for the year 1,103,963 803,624
Other income and expense - -
Total comprehensive income for the year 1,103,963 803,624
Prot attributable to non-controlling interests 17 22,152 -
Prot attributable to owners of the parent 1,081,811 803,624
Notes 1 to 29 are an integral part of the consolidated nancial statements
Consolidated income statement
68
Figures are stated in NOK 1,000 Note 31-12-2021 31-12-2020
ASSETS
Non-current assets
Software 12 65,421 58,030
Trademark 12 591,266 387,573
Goodwill 12,15 2,073,373 1,617,731
Land 13,15 46,190 24,966
Buildings 13,15 119,362
Fixtures and ttings 13 328,520 301,400
Right-of-use assets 14 2,320,022 2,262,555
Investment in associated companies 16 128,844 128,487
Other investments 383 424
Other receivables 19,25 28,391 28,179
Derivatives 19,24,25 37,676 11,796
Total non-current assets 5,739,449 4,821,141
Current assets
Inventories 20 1,997,312 1,633,927
Trade receivables 19,25 215,480 195,287
Other receivables 19,25 44,241 50,514
Provisions 19,25 60,816 37,302
Derivatives 19,24,25 11,494 -
Cash 21,25 570,286 540,056
Total current assets 2,899,629 2,457,086
Total assets 8,639,078 7,278,227
Notes 1 to 29 are an integral part of the consolidated nancial statements
Consolidated balance sheet
69
Figures are stated in NOK 1,000 Note 31-12-2021 31-12-2020
EQUITY AND LIABILITIES
Equity
Share capital and share premium 22 212,624 212,471
Other paid-in capital 22 20,718 17,475
Other equity 2,386,704 1,983,662
Total shareholders' equity 2,620,046 2,213,608
Non-controlling interests 17 268,680 -
Total equity 2,888,726 2,213,608
Liabilities
Non-current liabilities
Deferred tax liability 11 52,332 4,726
Borrowings 2,23,25 1,091,521 995,082
Lease liabilities 14,23 1,913,555 1,850,561
Total non-current liabilities 3,057,407 2,850,369
Current liabilities
Borrowings 2,23,25 5,000 -
Current lease liabilities 14 490,164 473,739
Accounts payable 2,25 843,854 742,753
Tax payable 11 324,057 251,879
Public duties payable 25 376,023 323,511
Put option liability 2,15 246,528 -
Other current liabilities 2,23 404,379 380,788
Derivatives 24,25 2,940 41,580
Total current liabilities 2,692,945 2,214,250
Total liabilities 5,750,352 5,064,619
Total equity and liabilities 8,639,078 7,278,227
Notes 1 to 29 are an integral part of the consolidated nancial statements
Consolidated balance sheet
Fredrikstad, 24 March 2022
THE BOARD OF DIRECTORS OF EUROPRIS ASA
Claus Juel-Jensen
Karl Svensson
Espen Eldal
CEO
Tom Vidar Rygh
Chair
Hege Bømark
Tone Fintland
Pål Wibe
Bente Sollid Storehaug
70
Notes 1 to 29 are an integral part of the consolidated nancial statements
Figures are stated in NOK 1,000
Share
capital
Treasury
shares
Share
premium
Other
paid-in
capital
Other
equity Total
Non-
controlling
interests
Total
equity
Equity 01.01.2021 166 969 (6,150 ) 51,652 17,475 1,983,661 2,213,608 - 2,213,608
Prot for the period - - - - 1,081,811 1,081,811 22,152 1,103,963
Dividend - - - - (434,207 ) (434,207 ) - (434,207 )
Net purchase/sale of treasury shares - 153 - 3,243 3,874 7,270 - 7,270
Non-controlling interests on
acquisition of subsidiary
Put option liability - - - - (246,528 ) (246,528 ) - (246,528 )
Translation differences - - - - (1,907 ) (1,907 ) - (1,907 )
Other comprehensive income - - - - - - - -
Equity 31.12.2021 166,969 (5,997 ) 51,652 20,718 2,386,704 2,620,046 268,680 2,888,726
Equity 01.01.2020 166,969 (1,150 ) 51,652 17,475 1,742,923 1,977,870 - 1,977,870
Prot for the period - - - - 803,624 803,624 - 803,624
Dividend - - - - (323,346 ) (323,346 ) - (323,346 )
Net purchase/sale of treasury shares - (5,000 ) - - (239,539 ) (244,539 ) - (244,539 )
Other comprehensive income - - - - - - - -
Equity 31.12.2020 166,969 (6,150 ) 51,652 17,475 1,983,661 2,213,608 - 2,213,608
In accordance with sections 9-4 and 9-5 of the Norwegian Public Limited Liability Companies Act, the board is mandated to acquire the
company’s own shares subject to specic conditions. See note 22 for details of treasury shares.
Consolidated statement of changes in equity
71
Figures are stated in NOK 1,000 Note 2021 2020
Cash ows from operating activities
Prot before income tax 1,417,551 1,029,112
Adjusted for:
– Depreciation xed assets 13,14 546,123 520,350
– Amortisation intangible assets 12 25,100 19,578
– Unrealised gain and loss on derivatives 10,17 (25,880 ) 11,191
– Net interest expense exclusive of change in fair value derivatives 10 124,877 144,608
– Prot from associated companies 16 (189 ) (2,600 )
Changes in net working capital (exclusive effect of acquistions): (138,706 ) 227,127
– Inventory (184,661 ) (63,509 )
– Accounts receivable and other current receivables (17,334 ) (40,969 )
– Accounts payable and other current debt 139,302 314,625
– Decrease/(increase) in nancial assets at fair value through prot or loss (76,013 ) 16,980
Interest received 102 181
Interest paid 10 (99,099 ) (127,809 )
Income tax paid 11 (258,529 ) (116,814 )
Net cash generated from operating activities 1,591,351 1,704,924
Cash ows from investing activities
Proceeds from sale of xed assets 13 176 -
Purchases of xed assets 13 (98,450 ) (72,238 )
Purchases of intangible assets 12 (32,490 ) (31,908 )
Acquisitions 15 (553,204 ) (7,979 )
Proceeds from sale of nancial assets 62 -
Net cash used in investing activities (683,906 ) (112,125 )
Cash ows from nancing activities
Proceeds from borrowings 2,636 1,000,000
Repayment of debt to nancial institutions (3,750 ) (1,651,675 )
Principal paid on lease liabilities 12 (449,162 ) (401,218 )
Dividend (434,207 ) (323,346 )
Sale/buy-back of treasury shares 7,270 (244,539 )
Net cash from nancing activities (877,214 ) (1,620,778 )
Net decrease/increase in cash 30,231 (27,979 )
Cash at beginning of year (01.01) 540,056 568,036
Cash at end of year (31.12) 570,286 540,056
Notes 1 to 29 are an integral part of the consolidated nancial statements
Consolidated statements of cash flows
72
1.1 Basis of preparation
The consolidated nancial statements for Europris
ASA (”the group”) have been prepared in accordance
with the International Financial Reporting Standards
(IFRS) as adopted by the European Union, as well as
Norwegian disclosure requirements pursuant to section
3-9 of the Norwegian Accounting Act at 31 December
2021. The accounting policies adopted are consistent
with those of the previous nancial year.
The board approved the consolidated nancial
statements on 24 March 2022.
The consolidated nancial statements have been
prepared on a historical cost basis with the following
exceptions:
• derivative instruments are recognised at fair value
through prot and loss.
The group has applied the going concern assumption
in preparing its consolidated nancial statements. When
assessing this assumption, management has assessed
all available information regarding future expectations.
The preparation of nancial statements in conformity
with the IFRS requires the use of certain critical account-
ing estimates. It also requires management to exercise
its judgement in the process of applying the group’s
accounting policies. The areas involving a higher degree
of judgement or complexity or where the assumptions
and estimates are signicant for the consolidated
nancial statements are disclosed in note 3.
1.2 Consolidation
The consolidated nancial statements include the
parent company Europris ASA and all its subsidiaries.
The group applies the acquisition method to account
for business combinations. The consideration trans
-
ferred for the acquisition of a subsidiary is the fair value
of the assets transferred, the liabilities incurred to the
former owners of the acquiree and the equity interests
issued by the group. The consideration transferred
includes the fair value of any asset or liability resulting
from a contingent consideration arrangement. Identi-
able assets and liabilities and contingent liabilities
assumed in a business combination are measured
initially at their fair value at the acquisition date. Subse-
quent changes to the fair value of the contingent
consideration which is deemed to be an asset or liability
is recognised in prot or loss. A contingent conside
-
ration which is classied as equity is not re-measured,
and its subsequent settlement is accounted for within
equity.
The group recognises any non-controlling interest in
the acquiree on an acquisition-by-acquisition basis,
either at fair value or at the non-controlling interest’s
proportionate share of the recognised amounts of the
acquiree’s identiable net assets.
Goodwill is initially measured as the excess of the
aggregate consideration transferred and the amount of
non-controlling interest over the net identiable assets
acquired and liabilities assumed. If this consideration is
lower than the fair value of the net assets of the subsi
-
diary acquired, the difference is recognised in prot and
loss.
Intercompany transactions, balances, revenue and
expenses arising from transactions between group
companies are eliminated. Accounting policies of
subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the
group.
The consolidated nancial statements include
Europris ASA and its subsidiaries.
The subsidiaries acquired by Europris AS in 2020 –
Kilen Lavpris AS and Vågsbygd Lavpris AS – were both
merged with Europris Butikkdrift AS at 1 January 2021.
The Stjørdal Lavpris AS company was acquired by
Europris AS at January 2021 and merged with Europris
Butikkdrift AS with effect from 1 January 2021.
Subsidiaries are all entities (including structured
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
Note 1 Accounting principles
Company Ownership/voting share
Europris ASA parent company
Europris Holding AS 100%
Europris AS 100%
Europris Butikkdrift AS 100%
Lunehjem.no AS 67%
Lekekassen Holding AS 67%
73
its power over the entity. Subsidiaries are fully consoli-
dated from the date on which control is transferred to the
group. They are de-consolidated from the date on which
that control ceases. When the group ceases to have
control, any remaining interest in the entity is re-mea-
sured to its fair value at the date when control ceases,
with the change in carrying amount recognised in prot
and loss. The fair value is the initial carrying amount for
the purposes of subsequently accounting for the
remaining interest as an associate, joint venture or
nancial asset.
IFRS 10 Consolidated nancial statements is based on
the principle of using the control term as the decisive
criterion to decide whether a company should be
included in the consolidated nancial statements. The
application guidance to the standard provides guidance
when determining whether an entity has control over a
franchisee. Based on the guidance in IFRS 10, the group
has determined that it does not control its franchisees
and the franchises are therefore not consolidated. This
is based on a judgement of the criteria in IFRS 10 as to
whether or not Europris controls the franchises.
1.3 Investment in associates
The group has investments in associates. Associates
are entities over which the group has signicant
inuence, but not control over nancial and operating
management.
The considerations made in determining whether the
group has signicant inuence over an entity are similar
to those necessary to determine control over subsidi
-
aries�
Associates are accounted for using the equity method
from the date when signicant inuence is achieved until
such inuence ceases.
Investments in an associate are initially recognised at
cost. The contingent consideration is included in cost
and changes in estimated contingent consideration will
be recognised as an adjustment of cost. The carrying
amount of the investment is adjusted to recognise
changes in the group’s share of the net assets of the
associate since the acquisition date. Goodwill relating to
the associate is included in the carrying amount of the
investment and is not tested for impairment individually.
The statement of prot or loss reects the group’s
share of the results of operations of the associate. In
addition, when there has been a change recognised
directly in the equity of the associate, the group recog
-
nises its share of any changes, when applicable, in the
statement of changes in equity. Unrealised gains and
losses resulting from transactions between the group
and the associate are eliminated to the extent of the
interest in the associate.
If there are indications that the investment in the
associate is impaired, the group will perform an impair-
ment test of the carrying amount of the investment.
Any impairment losses are recognised as share of prot
of an associate in the statement of prot or loss.
If the group’s share of the loss surpasses the carrying
amount of the associate, the carrying amount is set to
zero and further loss is not recognised unless the group
has an obligation to make up for the loss.
Upon loss of signicant inuence over the associate,
such that the equity method ceases to apply, the group
measures and recognises any retained investment at its
fair value. A new measurement of remaining ownership
interests will not be performed if the equity method is still
applicable.
1.4 Segment reporting
The Europris group as a whole is dened and
identied as one operating segment. The chief operating
decision-maker, who is responsible for allocating
resources and assessing performance of the operating
segment, has been identied as the group management.
Operating segments are reported in a manner consistent
with internal reporting provided to the chief operating
decision-maker.
1.5 Foreign currency translation
Foreign currency transactions are translated into the
functional currency of the respective group entity, using
the exchange rates prevailing at the dates of the transac-
tions (spot exchange rate). Foreign exchange gains and
losses resulting from the settlement of such transactions
and from the re-measurement of monetary items
denominated in foreign currency at year-end exchange
rates are recognised in the income statement. Non-
monetary items are not re-translated at year-end and are
measured at historical cost (translated using the
exchange rates at the transaction date), except for
non-monetary items measured at fair value which are
translated using the exchange rates at the date when fair
value was determined.
74
Non-monetary items which are measured at fair value
in foreign currency are translated into the functional
currency at the reporting date. Changes in exchange
rates are recognised continuously in operating prot.
The consolidated nancial statements are presented
in NOK, which is the group’s presentation and functional
currency.
1.6 Revenue from contracts with
customers
Revenue from contracts with customers is recognised
when control of the goods or services is transferred to
the customer at an amount which reects the consider-
ation which the group expects to be entitled to in
exchange for those goods or services. The group has
generally concluded that it is the principal in its revenue
arrangements, because it typically controls the goods or
services before transferring them to the customer.
Revenue from the sale of goods
The group operates a chain of stores in the discount
variety retail sector and online stores which sells
consumer goods, including sales to franchise stores.
The group recognises revenue from the sale of goods
at the point in time when control of the goods is trans
-
ferred to the customer. Control of an asset refers to the
ability to direct the use of and obtain substantially all of
the remaining benets from the asset, and the ability to
prevent others from directing the use of and receiving
the benets from the asset. Revenue is generally
recognised on delivery of the goods. Revenue from the
sale of goods over the internet is recognised at the point
that control of the inventory have passed to the
customer, which is the point of delivery. Retail sales are
usually in cash or by debit or credit cards.
Certain contracts provide a customer with a right to
return the goods within a specied period. The group
uses the expected value method to estimate the goods
which will not be returned, because this method best
predicts the amount of variable consideration to which
the group will be entitled.
Franchise fee
The fees received from franchises are recorded as
“other income”.
1.7 Current and deferred income tax
The tax expense for the period comprises current and
deferred tax. Tax is recognised in the income statement,
except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this
case, the tax is also recognised in other comprehensive
income or directly in equity respectively.
The current income tax charge is calculated on the
basis of the tax laws enacted or substantively enacted
at the balance sheet date in Norway, 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
nancial statements. However, deferred tax liabilities are
not recognised with regard to goodwill arising from
business combinations. Deferred income tax is deter-
mined using tax rates (and laws) which 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 prot 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, associates and joint arrangements, except
for the 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 diffe
-
rence will not reverse in the foreseeable future.
Generally, the group is unable to control the reversal of
the temporary difference for associates.
Deferred income tax assets are recognised on
deductible temporary differences arising from invest
-
ments in subsidiaries, associates and joint arrange-
ments only to the extent that it is probable the
temporary difference will reverse in the future and there
75
is sufcient taxable prot available against which the
temporary difference can be utilised.
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 and there is an intention to settle the balances
on a net basis.
1.8 Property, plant and equipment
Property, plant and equipment are recorded at
historical cost less depreciation. Historical cost includes
expenditure which is directly attributable to the acqui-
sition of the items. Subsequent costs are included in the
asset’s carrying amount or recognised as a separate
asset, as appropriate, only when it is probable that
future economic benets associated with the item will
ow to the group and the cost of the item can be
measured reliably. The carrying amount of replaced
parts is derecognised when replaced. All other repairs
and maintenance expenditures are recognised in prot
and loss in the period when the expense is incurred.
Depreciation of property, plant and equipment is
calculated using the straight-line method to depreciate
their cost to their residual value over the estimated
useful lives, as follows:
technical and electrical installations 5-15 years
xture and ttings 7-10 years
vehicles 5 years
machinery and equipment 3 years
IT equipment 3 years
buildings 5-25 years
land not depreciated
The residual values and useful lives of the assets are
reviewed and adjusted, if appropriate, at the end of each
reporting period.
An asset’s carrying amount is written down immedi
-
ately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable
amount.
Gains and losses on disposals are determined by
comparing the proceeds with the carrying amount and
are recognised in the income statement.
1�9 Leases
Identifying a lease
At the inception of a contract, the group assesses
whether the contract is or contains a lease. A contract is
or contains a lease if the contract conveys the right to
control the use of an identied asset for a period of time
in exchange for a consideration.
The group as a lessee
Separating components in the lease contract
For contracts which constitute or contain a lease, the
group separates lease components if it benets from the
use of each underlying asset either on its own or
together with other resources which are readily
available, and the underlying asset is neither highly
dependent on, nor highly interrelated with, the other
underlying assets in the contract. The group then
accounts for each lease component in the contract as a
lease separately from non-lease components of the
contract.
Recognition of leases and exemptions
At the lease commencement date, the group recog
-
nises a lease liability and corresponding right-of-use
asset for all lease agreements in which it is the lessee,
except for the following exemptions applied:
• short-term leases (dened as 12 months or less)
• low-value assets
For these leases, the group recognises the lease
payments as other operating expenses in the statement
of prot or loss when they are incurred.
Lease liabilities
The lease liability is recognised at the commen
-
cement date of the lease. The group measures the
lease liability at the present value of the lease payments
for the right to use the underlying asset during the lease
term which were not paid at the commencement date.
The lease term represents the non-cancellable period of
the lease together with periods covered by an option to
extend the lease if the lessee is reasonably certain to
exercise that option.
76
The lease payments included in the measurement
comprise:
• xed lease payments (including in-substance xed
payments), less any lease incentives receivable
• variable lease payments which depend on an index
or a rate, initially measured using the index or rate
as at the commencement date
• the exercise price of a purchase option, if the group
is reasonably certain to exercise that option
• payments of penalties for terminating the lease, if
the lease term reects the group exercising an
option to terminate the lease.
The lease liability is subsequently measured by
increasing the carrying amount to reect interest on the
lease liability, reducing the carrying amount to reect the
lease payments made and remeasuring the carrying
amount to reect any reassessment or lease modica
-
tions, or to reect adjustments in lease payments due to
an adjustment in an index or rate.
The group does not include variable lease payments in
the lease liability. Instead, the group recognises these
variable lease expenses in prot or loss.
The group presents its lease liabilities as separate line
items in the statement of nancial position.
Right-of-use assets
The group measures the right-of use asset at cost,
less any accumulated depreciation and impairment
losses, adjusted for any remeasurement of lease liabi
-
lities. The cost of the right-of-use asset comprises:
• the amount of the initial measurement of the lease
liability recognised
• any lease payments made at or before the
commencement date, less any incentives received
• any initial direct costs incurred by the group
• an estimate of the costs to be incurred by the group
in dismantling and removing the underlying asset,
restoring the site on which it is located or restoring
the underlying asset to the condition required by the
terms and conditions of the lease, unless those costs
are incurred to produce inventories.
The group applies the depreciation requirements in
IAS 16 Property, Plant and Equipment in depreciating
the right-of-use asset, except that the right-of-use asset
is depreciated from the commencement date to the
earlier of the lease term and the remaining useful life of
the right-of-use asset.
The group applies IAS 36 Impairment of Assets to
determine whether the right-of-use asset is impaired and
to account for any impairment loss identied. Store
protability is monitored on an ongoing basis and stores
that deliver below expectations are followed up and
necessary measures implemented.
1.10 Intangible assets
Goodwill
Goodwill arises on the acquisition of subsidiaries and
represents the excess of the consideration transferred,
the amount of any non-controlling interest in the acquiree
and the fair value at the acquisition date of any previous
equity interest in the acquiree over the fair value of the
identiable net assets acquired. If the total consideration
transferred, non-controlling interest recognised and
previously held interest measured at fair value are less
than the fair value of the net assets of the subsidiary
acquired, in the case of a bargain purchase, the diffe-
rence is recognised directly in the income statement.
For the purpose of impairment testing, goodwill
acquired in a business combination is allocated to the
cash generating unit (CGU) which is expected to benet
from the synergies of the combination. Each unit or
group of units to which the goodwill is allocated repre
-
sents the lowest level within the entity at which the
goodwill is monitored for internal management purposes.
Goodwill is monitored at the operating segment level.
Goodwill impairment reviews are performed annually
or more frequently if events or changes in circumstances
indicate a potential impairment. The carrying value of the
CGU containing the 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.
Trademarks and contractual rights
Separately acquired trademarks and contractual rights
are recognised at cost. Trademarks and contractual
77
rights acquired in a business combination are recog-
nised at fair value at the acquisition date. Trademarks
(the brand name “Europris” and “Lekekassen”) are
deemed to have an indenite lifetime and are not
amortised as a consequence, but tested for impairment
annually. Contractual rights and licences have a nite
useful life and are carried at cost less accumulated
amortisation. Amortisation is calculated using the
straight-line method to allocate the cost of contractual
rights over their estimated useful life.
Software
Costs associated with maintaining computer software
programmes are recognised as an expense as incurred.
Development costs which are directly attributable to the
design and testing of identiable and unique software
products controlled by the group are recognised as
intangible assets when the following criteria are met:
• it is technically feasible to complete the software
product so that it will be available for use
• management intends to complete the software
product and use or sell it
• there is an ability to use or sell the software product
• it can be demonstrated how the software product
will generate probable future economic benets
• adequate technical, nancial and other resources
to complete the development and to use or sell the
software product are available
• the expenditure attributable to the software product
during its development can be reliably measured.
Computer software development costs recognised as
assets are amortised over their estimated useful lives of
three years�
1.11 Financial instruments
A nancial instrument is any contract which gives rise
to a nancial asset of one entity and a nancial liability
or equity instrument of another entity.
Financial assets
The group´s nancial assets are derivatives, trade
receivables, other receivables and cash.
The classication of nancial assets at initial recog
-
nition depends on the nancial asset’s contractual cash
ow characteristics and the group’s business model for
managing them. With the exception of trade receivables
which do not contain a signicant nancing component,
the group initially measures a nancial asset at its fair
value plus, in the case of a nancial asset not at fair
value through other comprehensive income, transaction
costs�
The group classies its nancial assets in these
categories:
• nancial assets at amortised cost
• derivatives at fair value through prot and loss.
The group does not apply hedge accounting.
Financial assets at amortised cost
The group measures nancial assets at amortised
cost if both of the following conditions are met:
• the nancial asset is held within a business model
with the objective to hold nancial assets in order
to collect contractual cash ows
• the contractual terms of the nancial asset give rise
on specied dates to cash ows which are solely
payments of principal and interest on the principal
amount outstanding.
Financial assets at amortised cost are subsequently
measured using the effective interest (EIR) method and
are subject to impairment. Gains and losses are recog
-
nised in prot or loss when the asset is derecognised,
modied or impaired.
The group’s nancial assets at amortised cost include
trade receivables and other current deposits. Trade
receivables which do not contain a signicant nancing
component are measured at the transaction price
determined under IFRS 15 Revenue from contracts with
customers. Receivables are subsequently measured at
amortised cost using the EIR method minus provision
for expected credit losses.
Derivatives at fair value through prot and loss
Derivatives at fair value are carried in the statement
of nancial position at fair value with net changes in fair
value in prot or loss. The category includes foreign
exchange contracts and interest rate swaps.
78
Derecognition of nancial assets
A nancial asset (or, where applicable, part of a
nancial asset or part of a group of similar nancial
assets) is primarily derecognised (in other words,
removed from the group’s consolidated statement
of nancial position) when:
• the rights to receive cash ows from the asset
have expired, or
• the group has transferred its rights to receive cash
ows from the asset or has assumed an obligation
to pay the received cash ows in full without material
delay to a third party under a ”pass-through”
arrangement; and either
a. the group has transferred substantially all the
risks and rewards of the asset, or
b. the group has neither transferred nor retained
substantially all the risks and rewards of the asset,
but has transferred control of the asset.
Financial liabilities
Financial liabilities are classied, at initial recognition,
as loans and borrowings, payables, or derivatives
through prot and loss. Derivatives are recognised
initially at fair value and, in the case of loans and
borrowings and payables, net of directly attributable
transaction costs. Derivatives are nancial liabilities
when the fair value is negative, accounted for in the
same way as derivatives as assets.
Loans, borrowings and payables
After initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortised
cost using the EIR method. Gains and losses are
recognised in prot or loss when the liabilities are
derecognised as well as through the EIR amortisation
process�
Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs
which are an integral part of the EIR. The EIR amorti
-
sation is included as nance costs in the statement of
prot or loss. Payables are measured at their nominal
amount when the effect of discounting is not material.
Borrowings are classied as current unless the group
has an unconditional right to delay the payment of the
debt for more than 12 months from the reporting date.
Derecognition of nancial liabilities
A nancial liability is derecognised when the obligation
under the liability is discharged or cancelled or expires.
When an existing nancial liability is replaced by another
from the same lender on substantially different terms, or
the terms of an existing liability are substantially
modied, such an exchange or modication is treated as
the derecognition of the original liability and the recog
-
nition of a new liability. The difference in the respective
carrying amounts is recognised in the statement of prot
or loss.
1.12 Inventories and cost of
goods sold
Inventories are stated at the lower of cost and net
realisable value. Net realisable value is the estimated
sales price for the goods. Historical cost is calculated
using a weighted average historical cost and includes
expenditures directly linked to getting the goods to their
nal location and condition. Foreseeable obsolescence
is assessed continuously. The group’s inventories
consist solely of goods purchased for resale.
Goods for sale are often purchased in currencies other
than Norwegian kroner, and the purchase price in
Norwegian kroner is locked in through the use of foreign
currency derivative contracts. Both unrealised and
realised gains or losses on the foreign currency deriva
-
tives which are economic hedges for inventory
purchases are included as part of cost of goods sold
(COGS). Similarly, unrealised foreign currency exchange
gains and losses on inventory trade payables and
realised foreign currency exchange gains or losses at the
time of payment are also included as part of COGS.
1�13 Cash
Cash includes cash in hand and bank deposits. Bank
overdrafts are presented in the statement of cash ows
less cash.
1�14 Treasury shares
When treasury shares are repurchased, the purchase
price including directly attributable costs is recognised in
equity. Treasury shares are presented as a reduction in
equity. Losses or gains on transactions involving
treasury shares are not recognised in the statement
of comprehensive income.
79
1.15 Post-employment benets
The group has two post-employment schemes: one
dened contribution and one contractual retirement
scheme. The contractual retirement scheme is effective
from 1 January 2011 and is deemed to be a dened
benet multi-employer plan, but recognised as a dened
contribution agreement since insufcient reliable infor-
mation is available to estimate the group’s proportionate
share of pension expense, liability and funds in the
collective scheme.
In a dened contribution arrangement, the group
contributes to a public or private insurance plan. The
group has no remaining liabilities after the contribution
to the insurance plan has been made. The contributions
are recognised as a personnel expense when they are
incurred.
1.16 Provisions
Provisions for environmental restoration, restructuring
costs and legal claims are recognised when the group
has an existing legal or constructive obligation as a
result of past events, it is probable that an outow of
resources will be required to settle the obligation, and
the amount can be reliably estimated.
Provisions are recognised when the group has an
existing obligation (legal or constructive) as a result of
a past event, it is probable (more likely than not) that an
outow of economic resources will be required from the
group, and the amount can be estimated reliably. The
timing or amount of the outow may still be uncertain.
Provisions are measured at the estimated expenditure
required to settle the existing obligation, based on the
most reliable evidence available at the reporting date,
including the risks and uncertainties associated with the
existing obligation.
A provision for warranties is recognised when the
underlying products or services are sold. The provision
is based on historical warranty data and an assessment
of all possible outcomes and the accompanying probabi
-
lities.
1.17 Written put options over
non-controlling interest
The group has a written put option over a non-
controlling interest in Lekekassen Holding AS
(“Lekekassen”). The holder of the non-controlling shares
is also the CEO of Lekekassen. If the CEO resigns, the
group has a right and an obligation to purchase the
shares in Lekekassen for a cash consideration. The
consideration to be paid is based on a multiple of
EBITDA. At initial recognition, a nancial liability is
recognised for the present value of the redemption
amount, with a corresponding charge directly to share
-
holders’ equity. The present value of the redemption
amount is estimated to be no less than equal to the
amount payable if the put option were exercised at the
end of the period. The nancial liability is remeasured
to reect changes in the estimated redemption amount,
with a corresponding charge to shareholders’ equity.
The non-controlling interest continues to be recog
-
nised, and is attributed its share of prot and loss and
total comprehensive income.
1.18 Contingent liabilities and assets
Contingent liabilities are not recognised in the nancial
statements. In cases where the possible outow of
economic resources as a result of existing obligations
is considered improbable or remote, no liability is
recognised.
A contingent asset is not recognised in the nancial
statements, but disclosed if it is probable that the benet
will ow to the group.
1.19 Subsequent events
New information after the reporting date regarding the
group’s nancial position at the reporting date is taken
into consideration in the consolidated nancial state-
ments. Events after the reporting date which do not
affect the group’s nancial position at the reporting date,
but which will affect the nancial position of the group in
the future, are noted if they are considered signicant.
1.20 New standards, amendments
and interpretations not yet adopted
by the group
The group’s intention is to adopt the relevant new
and amended standards and interpretations when they
become effective.
There are no IFRSs or IFRIC interpretations which
are not yet effective which would be expected to have
a material impact on the group.
80
2 Financial risk management
The group’s core business is discount variety retail.
This exposes the group to a variety of nancial risks:
market (including currency, fair value interest-rate and
price), credit and liquidity risk. The goal of the group’s
overall risk management programme is to minimise
potential adverse nancial performance effects of these
risks, which result from unpredictable changes in capital
markets. The group uses nancial derivatives to hedge
against certain risks. Hedge accounting is not applied.
The nancial risk management programme for the
group is carried out by its central treasury department
under policies approved and monitored by the board.
The treasury department identies, evaluates, hedges
and reports nancial risks in cooperation with the
various operating units in the group. The board
approves the principles of overall risk management as
well as policies covering specic areas, such as
currency exchange risk, interest-rate risk, credit risk, the
use of nancial derivatives and liquidity management.
2.1 Market risk
2.1.a Currency exchange risk
The group is exposed to currency exchange risk
arising from the import of goods for sale. These trans-
actions are mainly settled in USD and EUR. The group
aims to achieve predictable cash outows in NOK by
using forward contracts as a hedging strategy for its
exposure to USD and EUR. The hedging strategy is
based on an assessment of the possibilities and
estimated time period required to adjust the business
to the changes in foreign exchange rates.
The following table illustrates the sensitivity of the
group to potential currency changes.
Hedge accounting is not applied.
2.1.b Price risk
The group has limited exposure to price risk.
2.1.c Interest-rate risk
The group’s exposure to interest-rate risk arises from
its bank borrowings. The interest-bearing debt has
oating rates, which means it is affected by changes in
interest-rates. The group’s nancial policy includes a
detailed descripton of hedging, and 60 per cent of the
principal of the group’s bank loans is presently hedged.
The current interest-rate swaps expire in July 2027 and
2030. Management monitors development in the
market, and regularly assesses the exposure to
interest-rate risk. The interest-rate risk which arises from
loans with a oating interest rate is managed by using
interest-rate swaps.
The following table illustrates the sensitivity of the
group to potential interest-rate changes.
Hedge accounting is not applied.
2�2 Credit risk
The group has limited exposure to credit risk, since
most of its revenue transactions are settled by cash
or debit cards. However, a small share of its revenue
comes from franchise agreements, where each
franchisee is granted credit. As a franchisor, the group
monitors its franchisees closely to mitigate the credit
risk. Losses on trade receivables have historically been
limited.
2.3 Liquidity risk
The treasury department prepares and monitors cash
ow forecasts of the groups’s liquidity requirements to
ensure that the group has sufcient cash to meet
operational commitments, and to maintain sufcient
exibility to meet unused credit facilitiy requirements
(see note 23) without breaching nancial covenants.
Foreign currency
sensitivity
Changes in
currency Effect on post-tax prot
2021 2020
USD/NOK +10% -53,844 -48,471
-10% +53,844 +48,471
EUR/NOK +10% -14,364 -16,023
-10% +14,364 +16,016
Figures are stated in NOK 1,000
Interest-rate sensitivity
Changes in
interest rate
Effect on
post-tax prot
2021 +1% -3,890
-1% +3,890
2020 +1% -3,120
-1% +3,120
Figures are stated in NOK 1,000
Notes to the consolidated financial statements
81
2.4 Capital management risk
The group’s objectives when managing capital are
to ensure the ability to continue as a going concern in
order to provide returns for shareholders and to
maintain an optimal capital structure to reduce the cost
of capital, including compliance with covenants in the
loan agreements (see note 23 for further information).
The long-term nancial ambition is a dividend policy of
paying out 50-60 per cent of net prot while maintaining
an efcient balance sheet.
At 31 December 2021, the group’s equity totalled
NOK 2,889 million, which corresponded to an equity
ratio of 33.4 per cent. The board considers Europris’
capital structure to be adequate in relation to the
group’s objectives, strategy and risk prole.
3 Critical accounting estimates
and judgements
Estimates and judgements are continuously evaluated
and are based on historical experience and other
factors, including expectations of future events which
are believed to be reasonable.
3.1 Critical accounting estimates
and assumptions
The group prepares estimates and assumptions
regarding future expectations. The resulting accounting
estimates will by denition seldom equal the related
actual results. Estimates and assumptions which
represent a signicant risk of causing material adjust-
ments to the book value of assets and liabilities within
the next nancial year are discussed below.
3.1.a Provision for obsolescence
The group makes provision for obsolescence. These
provisions are based on a detailed assessment of the
age distribution of inventory items and whether the
goods are part of an active or expired product range.
The assessment is made on each individual inventory
item and the obsolescence provision increases the
longer the item remains in stock. Goods older than three
years have the highest write-down rate. Write-down for
obsolescence is made when the cost of the goods is
higher than the expected net sales value. These
provisions are estimate-based and require in-depth
knowledge about goods and market.
The following table sets out the contractual maturities (representing undiscounted cash ows) of
nancial liabilities.
At 31.12.2021
Up to 6
months
Between
6 and 12 months
Between
1 and 2 years
Between
2 and 5 years Total
Accounts payable 843,854 - - - 843,854
Other current liabilities 404,379 - - - 404,379
Borrowings including interest 15,745 14,480 114,672 1,022,000 1,166,897
Put option liability 246,528 - - - 246,528
Derivatives 2,940 - - - 2,940
Total 1,263,978 14,480 114,672 1,022,000 2,415,130
At 31.12.2020
Up to 6
months
Between
6 and 12 months
Between
1 and 2 years
Between
2 and 5 years Total
Accounts payable 742,753
- - - 742,753
Other current liabilities 380,788 - - - 380,788
Borrowings including interest 11,000 11,000 22,000 1,017,082 1,061,082
Derivatives 41,580 - - - 41,580
Total 1,134,541 11,000 22,000 1,017,082 2,184,623
Figures are stated in NOK 1,000
Notes to the consolidated financial statements
82
3.1.b IFRS 16 Leases
In determining the lease term for each contract,
the group must continuously assess whether there are
extension options and termination rights which should
be taken into account when determining the rental
period. The group has established guidelines for these
assessments. Typically, lease contracts are renego-
tiated at the end of the non-cancellable period, and
a new contract is entered into on better terms in the
form of both shorter duration and lower rent. This means
that extension options in the lease contracts are not
normally included in the IFRS 16 calculation.
Determination of the discount rate as a basis for
calculating the present value of future lease liabilities
also involves the use of discretion. A xed methodology
has also been established for this process. The
approach is based on interval division of the leases
according to the remaining term of the contracts.
The basis for the discount rate calculation is a risk
free interest rate plus a margin reecting the maturity
of the contracts.
3.1.c Written put options over non-
controlling interest
The group has a written put option over a non-
controlling interest in Lekekassen Holding AS
(“Lekekassen”). The holder of the non-controlling
shares is also the CEO of Lekekassen. If the CEO
resigns, the group has a right and an obligation to
purchase the shares in Lekekassen for a cash conside-
ration. The consideration to be paid is based on a
multiple of EBITDA. According to IAS 32 Financial
Instruments: Presentation, a nancial liability should
initially be recognised at the present value of the
redemption amount with a corresponding charge to
equity. The IFRS does not provide guidance on which
component of equity should be charged, and on
whether the non-controlling interest should continue
to be recognised. The group has thus exercised
judgement in developing its accounting policy.
The group has considered that the present ownership
interest of the non-controlling shares remains with the
non-controlling shareholder. The group has thus
considered it appropriate to continue to recognise the
non-controlling interest in the statement of nancial
position, and to attribute its share of prot and loss and
other comprehensive income to the non-controlling
interest. The nancial liability for the put option over
the non-controlling interest is therefore recognised with
a corresponding charge to shareholders’ equity.
IAS 32 provides limited guidance on how the nancial
liability for the written put option over the non-controlling
interest should be measured when the purchase date
and/or the redemption amount are/is not known, but
subject to a formula. When developing an accounting
principle, the group has considered guidance in other
IFRSs, more specically the guidance in IFRS 13 Fair
Value Measurement, which states that the fair value of
a nancial liability with a demand feature is no less than
the amount payable on demand, discounted from the
rst date that the amount could be required to be paid.
The group has established an accounting principle
where the nancial liability is estimated to be no less
than equal to the amount payable if the put option were
exercised at the end of the period.
The nancial liability for the put option over the
non-controlling interest is remeasured to reect changes
in the estimated redemption amount. The adjustment to
the nancial liability is recorded with a corresponding
charge to shareholders’ equity. When establishing the
policy of recording the adjustment against equity, the
group has considered the guidance in IFRS 10, which
states that changes in a parent’s ownership interest in
a subsidiary which do not result in the parent losing
control of the subsidiary are equity transactions.
3.2. Judgements in applying the group’s
accounting principles
IFRS 10 (Consolidated nancial statements) requires
entities to consolidate entities they control. The
standard provides extended guidance to determine
whether control is present. Franchising is explicitly
mentioned in the standard. The franchises are not
included in the consolidated nancial statements of
Europris ASA. This is based on a judgement of the
criteria in IFRS 10 of whether Europris controls the
franchises. Through the franchise agreements, Europris
essentially has control and rights related to protection
of the brand name and the concept. Such rights are not
sufcient to gain control under the provisions of IFRS
10. The decision-making rights which affect variable
returns are primarily held by the franchisee and the
nancial risk of the business lies with the franchisee.
Based on an assessment of these criteria in IFRS 10,
Europris does not control the franchises, and they are
thus not consolidated.
The group conrms that there have not been any
other judgements which are deemed to have a signi
-
cant impact on the consolidated nancial statements.
83
4 Segment information
The group manangement is the group’s chief operating decision-maker. Reporting to the group management,
which is responsible for evaluating protability and achivements, is on a consolidated basis which forms the basis
for the group management’s assessment of protability at a strategic level. The group as a whole is therefore
dened and identied as one segment.
5 Total operating income
The group operates a chain of stores in the discount variety retail sector and online stores which sells consumer
goods, including sales to franchise stores.
The group is required by Norwegian law to have a mandatory occupational pension plan. The group has a
pension plan which fullls the legal requirements, which covers all employees and is a dened contribution plan.
6 Employee benet expenses and remuneration to auditor
Figures are stated in NOK 1,000 2021 2020
Revenue 8,568,379 7,928,658
Income from franchise fees 78,404 79,381
Other income 1,395 4,590
Total other income 79,798 83,971
Total operating income 8,648,177 8,012,629
Figures are stated in NOK 1,000 2021 2020
Pay expenses 1,051,020 972,018
Social security costs 140,392 128,412
Pension expenses 24,560 21,496
Other benets 14,332 16,267
Total 1,230,303 1,138,193
Number of employees 3,298 3,120
Full-time employees 2,116 1,992
Discounted shares for employees
In 2021, the group had a programme which gave employees, including the executive management, the
opportunity to buy a limited number of shares at a discount in relation to the market price. Europris ASA sold
in total 85,099 shares in this programme. The share price was NOK 45.65 per share, including a 25 per cent
discount on the market price. The lock-in period for shares purchased in this programme is one year. The costs
wof the employee share programme amounted to approximately NOK 1.3 million.
84
7 Management remuneration
Remuneration of chief executive ofcer (CEO) and chief nancial ofcer (CFO)
Remuneration statement
The board will provide a statement on salary and
other remuneration for senior executives to the annual
general meeting on 21 April 2022.
Remuneration guidelines
The board has established guidelines for the remune-
ration of the members of the executive management.
The company’s policy is to offer the executive
management competitive remuneration based on
current market standards as well as on group and
individual performance. The remuneration consists
of a basic salary element combined with a performance-
based bonus programme as set out below. The
executive management participates in the company’s
insurance policies and can be entitled to certain fringe
benets. The remuneration committee is a sub-
committee of the board which acts as a preparatory
and advisory body in relation to the group’s remune-
ration of the executive management and ensures
thorough and independent preparation of matters
relating to the compensation of executive personnel.
Bonus programme
Europris has established a bonus scheme for the
executive management, which is based on nancial and
operational performance. The maximum bonus grant for
a nancial year under this scheme is 13.5 months of
gross base salary for the CEO and up to nine months
of gross base salary for the other executive manage-
ment. Maximum bonus payment during any single
nancial year is 12 months gross pay.
Figures are stated in NOK 1,000 2021 2020
Auditor fees
Audit services 1,684 1,206
Technical services related to nancial reporting 110 666
Total 1,794 1,873
Auditor fees are presented exclusive of VAT. No auditor fees have been recorded in equity in connection with
equity transactions.
Remuneration of the executive management group (eight individuals)
NOK 13,809 in accrued bonus is recognised in the nancial statements for the executive management group for
2021 (NOK 9,636 in 2020).
Figures are stated in NOK 1,000
Title Salary Bonus Pension Other Total
Espen Eldal CEO 3,722 1,463 129 40 5,355
Stina Charlene Byre CFO 1,566 - 124 155 1,845
Figures are stated in NOK 1,000
2021 2020
Pay expenses, including bonuses 34,099 27,851
Social security costs 4,809 3,929
Pension expenses 1,191 1,044
Other benets 26 -
Total 40,125 32,824
85
Sharebased remuneration
In accordance with the renumeration guidelines,
directors and senior executives may participate in a
restricted share programme for an investment amount
limited to NOK 500,000. This programme is subject to
annual approval by the board. Shares acquired through
this programme are subject to a two-year lock-up
period. Each restricted share will be issued at a
purchase price corresponding to the volume-weighted
average price of the company’s shares on the Oslo
Stock Exchange during the 10 trading days before the
award, adjusted for the reduction in value from the
two-year transfer restriction. The reduced value appli-
cable to the programme run in 2021 was 19 per cent.
Share purchases are borne by the participants, and the
company does not provide credit or nancing. The
share programme was run for the rst time in 2021 and
completed on 16 September 2021. Europris ASA sold in
total 68,941 shares in this programme. The market price
for the shares, ie, the volume weighted average for the
10 trading days before the allocation 6 date (2-15
September 2021), was NOK 61.51. The purchase price,
adjusted for the reduced value from the restrictions, was
NOK 49�82�
The executive management group is employed by
the Europris Holding AS subsidiary.
The CEO and the VP Commercial have severance
packages of 12 and six months respectively. Apart from
these, no members of the executive management group
have severance packages.
No loans or issued guarantees have been provided
to the executive management group, the members of
the board or other related parties.
Remuneration of the board of directors
Annual fees in 2021 for the board of directors:
Through a related company, a director has received
NOK 10,000 for digital services.
8 Pension liabilities
Figures are stated in NOK 1,000
The group has a contractual retirement pension scheme (AFP). This is a multi-employer plan, and accounted
for as a dened contribution plan. The annual premium is expensed. The entity pays a premium currently set at
2,5 per cent of the employee’s salary. Pension cost (premium) in 2021 was NOK 7,810 (2020: NOK 6,784).
In addition, the group has a pension agreement with DNB Forsikring which fulllls the legal requirement under
Norwegian law and covers all employees. The scheme is a dened contribution plan. Pension costs in 2021 were
NOK 16,749 (2020: NOK 14,712).
Both schemes had 2,116 members in 2021 (2020: 1,992).
Board of directors
Chair NOK 556,000 per year
Director NOK 283,000 per year
Audit committee
Chair NOK 74,000 per year
Member NOK 48,000 per year
Remuneration committee
Chair NOK 34,000 per year
Member NOK 23,000 per year
9 Other operating expenses
Figures are stated in NOK 1,000
2021 2020
Leasing and other cost of premises 83,703 88,054
Transport/distribution 246,047 196,293
Marketing and other expenses 412,999 350,447
Total 742,750 634,794
Leasing and other cost of premises relates to variable lease payments, in addition to payments for short-term
leases and low-value assets.
86
The tax on the group’s pre-tax prot differs from the theoretical amount which would arise from using the weighted
average tax rate applicable to the prots of the consolidated entities as follows.
10 Financial income and expenses
11 Income tax expense
Financial expenses:
Interest to nancial institutions 26,304 33,253
Leasing interest cost 72,702 92,245
Other interest expense 92 10
Amortised interest on bank loan 2,450 6,075
Other nancial expenses 21,201 18,893
Total 122,749 150,476
Net nancial income (expense) (94,395) (139,068)
Figures are stated in NOK 1,000
2021 2020
Financial income:
Other interest income 102 181
Other nancial income 2,373 36
Gain in fair value of nancial instruments
– Unrealised interest-rate swap income 25,880 11,191
Total 28,354 11,408
Figures are stated in NOK 1,000
2021 2020
Tax payable
Current tax on prot for the year 321,941 251,872
Tax from acquired companies 2,117 7
Total tax payable in the balance sheet 324,057 251,879
Deferred tax
Change in temporary differences 47,631 (26,948)
Change in temporary differences related to mergers and acquisitions (58,100) 558
Total deferred tax (10,469) (26,390)
Total income tax expense 313,588 225,489
Figures are stated in NOK 1,000
2021 2020
Prot before tax 1,417,551 1,029,112
Tax calculated at domestic tax rates applicable to prots (22%) 311,861 226,405
Tax effects from:
- Non-taxable income (15,898) (4,617)
- Non-deductible expenses 1,019 7,527
- Other directly recognised differences 16,605 (3,826)
Tax expense recognised in the income statement 313,588 225,489
Effective tax rate 22,1% 21,9%
87
2021 2020
The analysis of deferred tax assets and deferred tax liabilities is as follows
Deferred tax assets
- Deferred tax assets to be recovered later than 12 months (15,276) (16,648)
- Deferred tax assets to be recovered within 12 months (79,980) (65,011)
Deferred tax assets (95,257) (81,659)
Deferred tax liabilities
- Deferred tax liabilities to be recovered later than 12 months 137,430 92,924
- Deferred tax liabilities to be recovered within 12 months - -
Deferred tax liabilities 137,430 92,924
Loss carried forward (12) (12)
Deferred tax related to directly recognised differences 10,170 (6,552)
Unrecognised deferred tax asset - 25
Deferred tax liabilities (net) 52,332 4,726
Deferred tax asset/liability rates 22% 22%
Change in deferred tax liabilities recognised in the balance sheet
Balance at 01.01 4,726 31,763
Change during the year recognised in the income statement 47,606 (27,038)
Balance at 31.12 52,332 4,726
Specication of change in deferred tax liabilities/tax assets
Figures are stated in NOK 1,000
Tangible
xed assets
Non-
current
debt Total
Deferred tax liabilities
Balance at 01.01.2020 103,826 1,759 105,584
Recognised deferred tax in prot for the period (11,983) (677) (12,660)
Balance at 31.12.2020 91,843 1,082 92,924
Balance at 01.01.2021 91,843 1,082 92,924
Recognised deferred tax in prot for the period 44,824 (319) 44,505
Balance at 31.12.2021 136,667 763 137,430
Figures are stated in NOK 1,000 Inventories Receivables
Provision for
other liabilities
Loss
carried
forward Total
Deferred tax assets
Balance at 01.01.2020 (64,521) (401) (6,185) (12) (71,118)
Recognised deferred tax in prot for the period (71) (19) (10,463) - (10,553)
Balance at 31.12.2020 (64,592) (420) (16,648) (12) (81,671)
Balance at 31.12.2021 (64,592) (420) (16,648) (12) (81,671)
Recognised deferred tax in prot for the period (14,968) (1) 1,371 - (13,598)
Balance at 31.12.2021 (79,560) (421) (15,276) (12) (95,269)
88
Figures are stated in NOK 1,000 Software Trademark Contractual rights Goodwill Total
Financial year 2020
Carrying amount at 01.01.2020 45,699 387,573 - 1,611,397 2,044,669
Additions 31,908 - - 6,334 38,242
Amortisation (19,578) - - - (19,578)
Carrying amount at 31.12.2020 58,030 387,573 - 1,617,731 2,063,334
At 31.12.2020
Acquisition cost 215,572 411,352 250,700 1,617,731 2,495,355
Accumulated amortisation (157,542) (23,779 ) (172,356) - (353,677)
Accumulated impairment - - (78,344) - (78,344)
Net carrying amount 31.12.2020 58,030 387,573 - 1,617,731 2,063,334
Financial year 2021
Carrying amount at 01.01.2021 58,030 387,573 - 1,617,731 2,063,334
Additions through the acquisition of subsidiaries 2 203,694 - 455,641 659,337
Additions 32,490 - - - 32,490
Amortisation (25,100) - - - (25,100)
Carrying amount at 31.12.2021 65,421 591,267 - 2,073,373 2,730,061
At 31.12.2021
Acquisition cost 237,887 622,140 250,700 2,073,373 3,184,099
Accumulated amortisation (172,466 ) (30,873) (172,356) - (375,695)
Accumulated impairment - - (78,344) - (78,344)
Net carrying amount 31.12.2021 65,421 591,267 - 2,073,373 2,730,061
12 Intangible assets
The group’s trademarks is linked to the brand names
”Europris” and ”Lekekassen”. The ”Europris” name has
existed for a long time and has shown a healthy
development since its origination. The ”Lekekassen”
name is a strong brand which is linked to the online store
Lekekassen - Norway’s largest online toy store. There
are clear intentions to retain and further develop both
brand names for the forseeable future. As a conse-
quence, the brand names are not depreciated, but tested
for impairment annually.
The contractual rights are related to franchise agree
-
ments.
Goodwill comprises a number of elements which
individually cannot be quantied. Most signicant is the
well positioned business and the established reputation
in the market. The skilled workforce, as well as supplier
and customer relations (non-contractual), are also
important elements.
Impairment testing of goodwill
and trademarks
Goodwill and the trademarks are annually tested for
impairment by comparing their carrying amount and
recoverable amount (greater of fair value less costs to
sell and value in use). Goodwill is allocated to the groups
of cash-generating units which are expected to benet
from the synergies of the combination. The group has
one operating segment and goodwill is tested for impair-
ment at this level, which represents the lowest level in
the entity at which goodwill is monitored for internal
management purposes.
The recoverable amount of a cash-generating unit is
calculated on the basis of the value which the asset will
provide to the business (value in use). In this calculation,
the forecasts of future cash ows are based on budgets
and long-term plans approved by the management
covering a ve-year period (2022-2026). The gross
margin is stable in the period, and in range with the
89
historical performance. EBITDA percentages of sales are also stable in the 2022-2026 period. Cash ows beyond
the ve-year period are calculated using the expected ination rate as a long-term growth rate. A market-based rate
of return of 7.6 per cent (5.5 per cent in 2020) before tax is derived using the weighted average cost of capital
(WACC) model.
Lekekassen was acquired in 2021 and is dened as a separate cash-generating unit and the brand name
Lekekassen will be tested for impairment at this level.
The recoverable amount is signicantly above the carrying amount of the group’s goodwill and trademarks.
13 Property, plant and equipment
Figures are stated in NOK 1,000
Land Buildings
Fixtures and
ttings Total
Financial year 2020
Carrying amount at 01.01.2020 24,966 - 313,396 338,362
Financial leases (IAS 17) reclassied to leases IFRS 16 - - (14,102) (14,102)
Additions through the acquisition of subsidiaries - - 2,605 2,605
Additions - - 72,242 72,242
Disposals - - (1,974) (1,974)
Depreciation charge for the year - - (70,767) (70,767)
Carrying amount at 31.12.2020 24,966 - 301,400 326,366
At 31.12.2020
Accumulated cost 24 966 - 839,921 864,887
Accumulated depreciation - - (538,512) (538,512)
Net carrying amount 31.12.2020 24 966 - 301,400 326,366
Financial year 2021
Carrying amount at 01.01.2021 24,966 - 301,400 326,366
Additions through the acquisition of subsidiaries 21,224 118,776 3,787 143,787
Additions - 2,823 95,627 98,450
Disposals - - (176) (176)
Depreciation charge for the year - (2,237) (72,118) (74,355)
Carrying amount at 31.12.2021 46,190 119,362 328,520 494,072
At 31.12.2021
Accumulated cost 46,190 121,599 752,714 920,502
Disposals at cost - - (176) (176)
Accumulated depreciation - (2,237) (424,018) (426,254)
Net carrying amount 31.12.2021 46,190 119,362 328,520 494,072
90
14 Leases
Figures are stated in NOK 1,000 Buildings Vehicles
Fixtures
and ttings Total
Right-of-use assets
Carrying amount at 01.01.2021 2,146,047 16,753
99,754 2,262,554
Additions 412,855 3,522
9 408 425,784
Additions through the acquisition of subsidiaries 18,242 -
- 18,242
Adjustments (CPI) 85,210 -
- 85,210
Depreciation (451,505) (4,842)
(15,422) (471,769)
Terminations - -
- -
Net carrying amount 31.12.2021 2,210,848 15,433
93,741 2,320,022
Lease liabilities 2021 2020
Carrying amount at 01.01.
2,324,300 2,418,081
Additions
425,129 267,302
Additions through the acquisition of subsidiaries
18,242 12,300
Adjustments (CPI)
85,210 27,212
Interest expense
72,702 90,560
Lease payments
(521,864) (491,156)
Net carrying amount 31.12.
2,403,718 2,324,300
Undiscounted lease liabilities and maturity of cash outows
Less than one year
518,195 485,890
One-ve years
1,470,243 1,386,091
More than ve years
697,832 731,221
Total undiscounted lease liabilities at 31.12.
2,686,269 2,603,201
Lease expenses recognised in consolidated income statement
Interest expense on lease liabilities
72,702 90,560
Variable lease payments
3,258 4,663
Operating expenses related to short-term leases
12,120 20,827
Operating expenses related to low-value assets
1,415 1,596
Payments in lease agreements
538,657 518,242
Current lease liabilities
490,164 473,739
Non-current lease liabilities
1,913,555 1,850,561
Total lease liabilities at 31.12.
2,403,718 2,324,300
91
Practical expedients applied
The group also leases smaller machinery and equipment with contract terms of 1 to 3 years. The group has
elected to apply the practical expedient of low value assets for some of these leases and does not recognise
lease liabilities or right-of-use assets. The leases are instead expensed when they incur. The group has also
applied the practical expedient to not recognise lease liabilities and right-of-use assets for short-term leases,
presented in the table above.
Variable lease payments
In addition to the lease liabilities above, the group is committed to pay variable lease payments for some of
their leases. The variable lease payments are expensed as incurred.
Extension options
The lease term represents the non-cancellable period of the lease together with periods covered by an option
to extend the lease if the lessee is reasonably certain to excercise that option.
Generally it is not considered reasonable certain that extension options will be exercised. Typically, lease
contracts are renegotiated at the end of the non-cancellable period, and a new contract is entered into on better
terms, in the form of both shorter duration and lower rent. This means that extension options in the lease
contracts are not normally included in the IFRS 16 calculation.
There are no indications of a need for impairment of right-of-use assets in 2021.
15 Acquisitions of companies
On 30 June 2021, the group acquired 67 per cent of Lekekassen Holding AS (Lekekassen) – Norway’s largest
player in online shopping for toys. Through this acquisition, Europris entered a strategically important product
category and strengthened its expertise in e-commerce. Lekekassen is one of the fastest growing online retailers
in Norway and entered the Swedish market with the ToySpace.se brand in May 2019 and Denmark with
ToySpace.dk in September 2021. Synergies are expected from joint sourcing and development of products and
services. Through this acquisition Europris will also improve its product offering, both in physical stores and
online, with access to an improved and broader range of well-known brands within the toy category.
The remaining 33 per cent of Lekekassen Holding AS is owned by Andreas Skalleberg through his company
Andrino Invest AS. Andreas Skalleberg is employed as CEO of Lekekassen. Europris has a right and obligation
to buy Skalleberg’s share if Skalleberg’s employment is terminated by either of the parties. The price to be paid
is based on a multiple of EBITDA, and is consistent with the price formula used in the original purchase of 67 per
cent. A nancial liability has been recognised for Europris obligation to purchase Skalleberg’s share if Skalleberg
resignes, with a corresponding charge directly to shareholders equity. The liability shall be estimated at the
present value of the redemption amount, which is estimated to the consideration to be paid if the employment is
terminated at period end. In the statement of nancial position, the liability is recognised separately as put option
liability.
In March 2021, Europris acquired 67 per cent of the online player Lunehjem.no. Lunehjem.no is a pure
e-commerce player established in 2005 which specialises in the high-growth interior segment. It offers a
large selection of products in furniture, candles and interiors, with an emphasis on Scandinavian design.
The acquisition contributes to revenue growth in a strategically important product category with strong online
growth. It also provides attractive positioning towards younger and more quality-conscious customer segments.
In addition, the acquisition will strengthen Europris’ expertise in online shopping.
92
Goodwill comprises a number of elements which individually cannot be quantied. Most signicant is the well
positioned business and the established reputation in the market. The skilled workforce, as well as supplier and
customer relations (non-contractual), are also important elements.
16 Investments in associated companies
In June 2018, the group acquired 20 per cent of Runsvengruppen AB (ÖoB), a Swedish discount variety retailer.
ÖoB has its headquarters in Skänninge and runs 93 stores across Sweden.
The Europris group owns 20 per cent of the shares and voting rights in Runsvengruppen AS.
Based on equity value, using a xed multiple of 7.7 on adjusted EBITDA for ÖoB in 2018, the purchase price was
determined as NOK 115.2 million. NOK 4.3 million in transaction expenses has also been recognised as part of the
acquisition cost, bringing the total investment to NOK 119.5 million. The vendor note issued when closing the deal is
converted to 4,349,695 Europris shares, corresponding to 2.61 per cent of the share capital.
Acquired companies Acquisitions Allocation of excess values After acquisition date
Figures in NOK million
Date of
control
Ownership
and voting
rights
Acquisition
cost
Buildings Trademarks
Deferred
tax
Goodwill
Operating
income
Net
prot
Lekekassen Holding AS August 2021 67% 501 26 204 (51) 448 395 64
Lunehjem.no AS March 2021 67% 10 - - - 8 28 3
Both acquisitions are paid in cash.
Acquired companies statement of nancial position Total fair value
Total intangible assets
204
Total xed assets
160
Total nancial assets
-
Inventories
174
Receivables
12
Cash
95
Total assets
646
Provisions
(51)
Non-current liabilities
(112)
Current liabilities
(165)
Non-controlling interests
(269)
Net assets
48
Goodwill
456
Net asset acquired 31.12.2021
504
93
Figures in SEK million 2021 2020
Unaudited
Audited
Total operating income
3,899.0 4,186.0
Prot for the year
NA 1�9
Current assets
NA 847�1
Non-current assets
NA 1,170.6
Current liabilities
NA 740�0
Non-current liabilities
NA 893�1
Equity
NA 384�6
Book value 01.01
128�5 125�9
Estimated prot for the period
0�2 2�6
Book value 31.12
128.7 128.5
The group's share of equity
77�1 78�7
Goodwill
49�8 49�8
Goodwill adjustment
1�8 -
Book value 31.12
128.7 128.5
A summary of the nancial information from Runsvengruppen AB group, based on 100 per cent gures:
Europris holds an option to acquire the remaining 80 per cent of the shares in Runsvengruppen AB.
Whether the option is to be exercised has been further delayed.
The fair value of the option is considered immaterial and is not recognised in the balance sheet.
94
Figures are stated in NOK 1,000 2021 2020
Changes in non-controlling interests
Non-controlling interests 01.01
- -
Increase due to acquisitions in companies with non-controlling interests
246,528 -
Non-controlling interests’ share of prot/loss
22,152 -
Non-controlling interests 31.12
268,680 -
Breakdown of non-controlling interests' share of prot/loss
Lunehjem.no AS
1,086 -
Lekekassen Holding AS
21,067 -
Total non-controlling interests' share of prot/loss
22,152 -
Breakdown of non-controlling interests
Lunehjem.no AS
1,812 -
Lekekassen Holding AS
266,868 -
Total non-controlling interests
268,680 -
17 Non-controlling interests
18 Earnings per share
Earnings per share are calculated by dividing prot attributable to ordinary shareholders by a weighted average
of ordinary shares outstanding during the period. The average number of shares outstanding was adjusted to take
account of the holding of treasury shares.
Figures are stated in NOK 1,000, except per share amounts 2021 2020
Prot for the period
1,103,963 803,624
Prot available to holders of ordinary shares
1,081,811 803,624
Number of ordinary shares
166,969 166,969
Weighted average of ordinary shares outstanding
160,870 165,189
Earnings per ordinary share (basic)
6.72 4.86
Earnings per ordinary share (diluted)
6.72 4.86
95
Figures are stated in NOK 1,000 2021 2020
Trade receivables
Trade receivables
216,080 195,887
Provision for impairment
(600) (600)
Net trade receivables
215,480 195,287
-
Other receivables
Unbilled receivables
38,242 48,267
Prepaid expenses
215 47
Other receivables
5,784 2,200
Other receivables
44,241 50,514
Provisions
60,816 37,302
Total
320,538 283,103
-
Non-current receivables
Deposits and loans to franchisees
28,391 28,179
Other receivables
28,391 28,179
Total current and non-current receivables
348,929 311,282
The carrying amount of trade receivables, prepayments and other receivables is assessed as not differing
materially from fair value.
Figures are stated in NOK 1,000 2021 2020
Provision for impairment of trade receivables
At 01�01
600 600
Change in provision
- -
At 31.12
600 600
Ageing of trade receivables
Not due
206,870 190,946
Due
8,610 4,342
Total
215,480 195,287
19 Trade receivables and other receivables
Accounts receivable older than 90 days constituted an insignicant portion of overdue items at 31.12.
This applies to both years.
96
Figures are stated in NOK 1,000 2021 2020
Inventories
2,025,769 1,669,210
- Provision for obsolescence
(28,457) (35,283)
Booked value
1,997,312 1,633,927
Provision for obsolescence
At 01�01 (35,283) (32,171)
Change in accruals
6,826 (3,112)
Provision for impairment at 31.12
(28,457) (35,283)
Carrying amount of inventory which has been impaired
323,854 404,865
The group makes provisions for impairment of inventory. These provisions are estimated and require in-depth
knowledge of the goods and market conditions. See more details in note 3.1.a.
Figures are stated in NOK 1,000 2021 2020
Cost of goods sold
4,638,884 4,494,243
Foreign exchange currency effects
(46,741) 39,891
Net cost of goods sold
4,592,143 4,534,134
Figures are stated in NOK 1,000 2021 2020
Cash
570,286 540,056
Total
570,286 540,056
Figures are stated in NOK 1,000 2021 2020
Cash
567,347 539,780
Bank deposits restricted for employee tax witholdings
2,939 276
Net cash
570,286 540,056
21 Cash
Unrealised gains and losses are classied as part of the cost of goods sold (COGS) in the prot or loss statement.
Similarly, unrealised foreign currency exchange gains and losses on inventory trade payables are also included as
part of COGS. All gains and losses, both realised and unrealised, related to the acquisition of inventory are included
as part of COGS�
Net cash in the consolidated statement of cash ows includes the following
The group has established a guarantee for employee tax withholdings of a total of NOK 65 million.
The group has overdraft facilities of NOK 1,425 million in all. See note 23 for further information.
20 Inventories and cost of goods sold
97
22 Share capital and shareholder information
The share capital of Europris is NOK 166,968,888, consisting of 166,968,888 shares with a par value of NOK 1.
The company’s share capital consists of one class of shares, where all shares have the same voting rights.
Major shareholders at 31 December 2021 Number of shares Share of capital
FOLKETRYGDFONDET 19,590,839 11�7%
VERDIPAPIRFONDET ALFRED BERG GAMBA 6,554,850 3�9%
THE BANK OF NEW YORK (ARCTIC FUNDS) Nominee 6,448,013 3�9%
EUROPRIS ASA 5,997,376 3�6%
RUNOR AS 4,349,695 2�6%
STATE STREET BANK AND TRUST COMPANY Nominee 3,974,302 2�4%
VERDIPAPIRFONDET STOREBRAND NORGE 3,164,738 1�9%
STATE STREET BANK AND TRUST COMPANY Nominee 3,130,774 1�9%
SKANDINAVISKA ENSKILDA BANKEN AB Nominee 2,850,000 1�7%
VERDIPAPIRFONDET HOLBERG NORDEN 2,400,000 1�4%
THE BANK OF NEW YORK MELLON Nominee 2,377,257 1�4%
VERDIPAPIRFONDET ALFRED BERG NORGE 2,250,716 1�3%
BROWN BROTHERS HARRIMAN & CO Nominee 2,250,000 1�3%
THE NORTHERN TRUST COMPANY, LONDON Nominee 2,139,800 1�3%
THE BANK OF NEW YORK MELLON Nominee 2,129,606 1�3%
VPF DNB AM NORSKE AKSJER 2,036,069 1�2%
VEVLEN GÅRD AS 2,000,000 1�2%
STATE STREET BANK AND TRUST COMPANY Nominee 1,969,350 1�2%
SKANDINAVISKA ENSKILDA BANKEN AB Nominee 1,926,927 1�2%
VERDIPAPIRFONDET HOLBERG NORGE 1,900,000 1�1%
OTHER SHAREHOLDERS 87,528,576 52�4%
Total shares 166,968,888 100.0%
Shares held by directors, CEO and CFO
Title Number of shares
Tom Vidar Rygh (directly and indirectly through Retiro AS) Chair 610,035
Pål Wibe (Nordkronen II AS) Director 408,572
Karl Svensson (directly and indirectly through RuNor AS) Director 281,891
Tone Fintland Director 10,808
Hege Bømark Director 8,129
Claus Juel-Jensen Director 7,112
Espen Eldal (directly and indirectly through Knipen AS) CEO 610,528
Stina C Byre CFO 10,528
98
Other non-current liabilities
Lease liabilities 1,913,555 1,913,555 1,850,561 1,850,561
Sub-total 1,913,555 1,913,555 1,850,561 1,850,561
Total 3,005,075 3,013,544 2,845,643 2,850,561
The amortised cost of the bank debt is assessed as not differing materially from fair value. The term loan has
been renanced in 2020, and the risk premium and the interest-rate margin would not be materially changed.
Fair value is therefore assumed to be approximately equal to the carrying amount at the balance sheet date.
The group’s business risk and credit risk have not changed signicantly in the period.
Treasury shares have been deducted from equity at cost. The nominal value of the shares has been deducted
from paid-in capital.
Average cost price for treasury shares is NOK 44.47.
Treasury shares at 31 December 2021
Nominal value Number of shares Fair value (NOK)
Shares owned by Europris ASA 5,997,376 5,997,376 419,666,386
Change in number of treasury shares
Treasury shares 1 January 2021 6,150,305
Buy-back of treasury shares 1,111
Sale of treasury shares to employees (85,099)
Sale of treasury shares to senior execuitives and directors (68,941)
Treasury shares 31 December 2021 5,997,376
23 Bank borrowings
The group signed a new loan agreement in December 2019 and the nancing was in place in January 2020.
The new loan agreement is a three-year term loan and revolving credit facility agreement with options for one plus
one year. One option period is already expired and was not exercised, while the second option to extend for one
year has been exercised and the loan agreement runs until January 2024. The loan is syndicated through three
credit institutions: DNB Bank, Danske Bank and Nordea.
2021 2020
Figures are stated in NOK 1,000 Amortised cost Nominal value Amortised cost Nominal value
Non-current liabilities
Debt to nancial institutions 1,091,521 1,099,989 995,082 1,000,000
Sub-total 1,091,521 1,099,989 995,082 1,000,000
99
Covenants are measured and reported quarterly. In the bank agreement, the covenant (leverage ratio) will be at
3.25 for any test date in the remainder of the agreement period.
The group was in compliance with nancial convenants in 2021.
Figures are stated in NOK 1,000 2021 2020
Current liabilities
First-year instalment non-current debt 5,000 -
Overdraft facilities - off-balance sheet
The loan facility includes an overdraft facility, which consists of
Overdraft and multi-currency group account 225,000 200,000
Revolving facility loan 1,174,000 1,174,000
Guarantees 26,000 26,000
Total 1,425,000 1,400,000
Drawn guarantees 14,544 14,029
Undrawn overdraft facilities 1,410,456 1,385,971
Convenants related to bank agreement
At 31.12.2021
Leverage ratio – net debt/adjusted EBITDA (according to the bank agreement) 3�25
Europris leverage ratio – net debt/adjusted EBITDA (according to the bank agreement) 0�34
See note 2.3 for the maturity structure of all nancial liabilities.
No assets are currently pledged under the loan agreement.
Maturity structure including interest
2021 2020
Within one year 30,225 22,000
One to two years 114,672 22,000
Two to ve years 1,022,000 1,017,082
After ve years - -
Effective interest rate at 31.12
2021 2020
Term loan 2�04% 2�20%
100
24 Derivatives
Figures are stated in NOK 1,000 2021 2020
Interest-rate swaps – expiring within one year - -
Interest-rate swaps – expiring after ve years 37,676 11,796
Total derivatives - asset 37,676 11,796
Forward exchange contracts – expiring within one year 2,940 41,580
Total derivatives - liability 2,940 41,580
Net derivative asset (liability) 34,736 (29,784)
Amount in
NOK 1,000
Average
exchange rate
Termination
Nominal principal forward contracts to purchase (USD) 466,399 8�64 Jan-May 2022
Nominal principal forward contracts to purchase (EUR) 105,803 10�12 Jan-May 2022
2021 2020
Lowest xed interest rate in interest-rate swap agreement 0�780% 0�780%
Highest xed interest rate in interest-rate swap agreement 0�917% 0�917%
Nominal principal in interest-rate swaps 600,000 600,000
Forward exchange contracts
The group faces currency risk arising from purchases in foreign currencies. The group hedges currency uctua-
tions by entering into forward exchange contracts. The group does not use hedge accounting. Forward exchange
contracts are measured at fair value through prot and loss.
Interest rate swaps
The group has entered into interest-rate swap agreements of a total of NOK 600 million to hedge part of its
interest-rate risk uctuations. Of these contracts, NOK 300 million expires in June 2027 and NOK 300 million in
June 2030. With these contracts 60 per cent of the principal of the group’s bank loans is presently hedged.
The group does not use hedge accounting. The interest-rate swaps are measured at fair value through
prot and loss.
101
25 Financial instruments by category
Figures are stated in NOK 1,000 2021 2020
Financial assets measured at amortised cost
Non-current receivables 28,391 28,179
Trade receivables 215,480 195,287
Other receivables 44,241 50,514
Cash 570,286 540,056
Financial liabilities measured at amortised cost
Non-current debt (1,091,521) (995,082)
First year instalment non-current debt (5,000) -
Accounts payable (843,854) (742,753)
Put option liability (246,528) -
Other current payables (780,402) (704,300)
Assets/liabilities measured at fair value through prot and loss
Derivatives - asset 49,169 11,796
Derivatives - liability (2,940) (41,580)
Net nancial instruments (2,062,676) (1,657,882)
All the group’s nancial instruments measured at fair value are classied as level 2. Level 2 consists of nancial
instruments with no quoted prices in active markets for identical assets or liabilities which are observable for the
asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). Level 2 assets and
liabilities are measured by using valuation methods. These valuation methods utilise observed data and the
group’s own estimates. If all signicant data required to measure the fair value of an instrument is observable data,
then the instrument is classied as level 2.
Special valuation methods which are being used to value nancial instruments include:
- fair value of interest-rate swaps is measured as the net present value of estimated future cash ows based
on the observable yield curve
- fair value of forward exchange contracts is measured as the net present value of the difference between the
contractual forward rate and the forward rate of the currency at the balance-sheet date, multiplied by the
contractual volume in foreign currency.
102
26 Reconciliation of liabilities arising from nancing activities
27 Related parties
The group’s related parties include its associates, key management personnel, directors and major shareholders.
All subsidaries included in note 1.3 are related parties of Europris ASA.
For management remuneration, refer to note 7 – Management remuneration.
No signicant transactions were conducted with related parties in 2021.
28 Contingent liabilities
There are no signicant contingent liabilities at 31.12.2021.
29 Events after the balance-sheet date
There were no subsequent events after the balance sheet date and before the date of the approval of the nancial
statements which provide new information about conditions which existed at the balance sheet date which are not
currently reected in the nancial statements, or signicant events after the balance sheet date which require further
disclosures.
Figures are stated in NOK 1,000
Financial
liabilities
01.01.
Acquisition
of
subsidiaries Cash ows Leases
Other
changes Total 31.12
2021
Borrowings 995,082 102,553 (3,750) - 2,636 1,096,521
Current liabilities - - - - - -
Lease liabilities 2,324,300 18,242 (449,162) 510,339 - 2,403,718
Financial liabilities 3,319,382 120,795 (452,912) 510,339 2,636 3,500,239
2020
Borrowings - - 1,000,000 - (4,918) 995,082
Current liabilities 1,642,007 - (1,651,675) - 9,668 -
Lease liabilities 2,432,361 - (401,218) 306,814 (13,658) 2,324,300
Financial liabilities 4,074,368 (1,052,893) 306,814 (8,908) 3,319,382
Non-cash changes
103
EUROPRIS ASA
PARENT COMPANY 2021
104
Figures are stated in NOK 1,000
Note
2021 2020
Total operating income
- -
Employee benets expense 2 2,869 2,111
Other operating expenses 2 9,754 7,152
Total operating expenses 12,623 9,263
Operating income (12,623) (9,263)
Group contribution from subsidiary 5 659,264 702,172
Other interest income 1 393
Other nancial income - 4
Total nancial income 659,265 702,569
Other interest expense 1,813 3,764
Other nancial expenses 5,583 4,542
Total nancial expenses 7,397 8,306
Net nancial income (expenses) 651,868 694,263
Prot/(loss) from associated company 4
189
2 600
Prot before income tax 639,434 687,600
Income tax expense 6 - -
Prot for the year 639,434 687,600
Statement of comprehensive income
Prot for the year 639,434 687,600
Other comprehensive income - -
Total comprehensive income for the year 639,434 687,600
Notes 1 to 10 are an integral part of the nancial statements.
Income statement
105
Figures are stated in NOK 1,000
Note
31-12-2021 31-12-2020
ASSETS
Non-current assets
Investments in subsidiaries 3 925,500 925,500
Investment in associated companies 4 128,676 128,487
Total non-current assets 1,054,176 1,053,987
Current assets
Receivable from group companies 5, 9 668,275 702,172
Other receivables 9 606 933
Cash 9 - 2
Total current assets 668,880 703,108
Total assets 1,723,056 1,757,095
Notes 1 to 10 are an integral part of the nancial statements.
Balance sheet
106
Figures are stated in NOK 1,000
Note
31-12-2021 31-12-2020
EQUITY AND LIABILITIES
Equity
Share capital and share premium 212,623 212,471
Other paid-in capital 20,718 17,476
Other equity 1,486,081 1,276,979
Total shareholders' equity 1,719,422 1,506,925
Liabilities
Current liabilities
Accounts payable 9 1,061 853
Tax payable 6 - -
Current debt to group companies 5,9 - 246,698
Other current liabilities 4,9 2,573 2,617
Total liabilities 3,634 250,169
Total equity and liabilities 1,723,056 1,757,095
Notes 1 to 10 are an integral part of the nancial statements.
Balance sheet
Fredrikstad, 24 March 2022
THE BOARD OF DIRECTORS OF EUROPRIS ASA
Claus Juel-Jensen
Karl Svensson
Espen Eldal
CEO
Tom Vidar Rygh
Chair
Hege Bømark
Tone Fintland
Pål Wibe
Bente Sollid Storehaug
107
In accordance with sections 9-4 and 9-5 of the Norwegian Public Limited Liability Companies Act, the board is
mandated to acquire the company’s own shares on specic conditions. See note 7 for details of treasury shares.
Figures are stated in NOK 1,000
Share
capital
Treasury
shares
Share
premium
Other
paid-in
capital
Retained
earnings
Total
Equity 01.01.2021 166,969 (6,150) 51,652 17,475 1,276,977 1,506,923
Prot for the period - - - - 639,434 639,434
Dividend - - - - (434,207) (434,207)
Net purchase/sale of treasury shares - 153 - 3,243 3,874 7,270
Other comprehensive income - - - - - -
Equity 31.12.2021 166,969 (5,997) 51,652 20,718 1,486,080 1,719,422
Equity 01.01.2020 166,969 (1,150) 51,652 17,475 1,152,264 1,387,210
Prot for the period - - - - 687,600 687,600
Dividend - - - - (323,346) (323,346)
Net purchase/sale of treasury shares - (5,000) - - (239,539) (244,539)
Other comprehensive income - - - - - -
Equity 31.12.2020 166,969 (6,150) 51,652 17,475 1,276,977 1,506,923
Notes 1 to 10 are an integral part of the nancial statements.
Statement of changes in equity
108
Figures are stated in NOK 1,000
2021 2020
Cash ows from operating activities
Prot before income tax 639,434 687,600
Share of the (prot)/loss of associates (189) (2,600)
Change in account payable 208 537
Change in other working capital (658,981) (701,656)
Net cash from operating activities (19,529) (16,119)
Cash ows from nancing activities
Change in group cash pool deposits (255,292) 253,400
Payments from group companies (417) 417
Payments of group contribution 702,172 330,189
Dividend (434,207) (323,346)
Sale/buy-back of treasury shares 7,270 (244,539)
Net cash from nancing activities 19,526 16,120
Net increase in cash (2) -
Cash at beginning of year (01.01) 2 2
Cash at end of year (31.12) - 2
Notes 1 to 10 are an integral part of the nancial statements.
Statement of cash flows
109
Europris ASA is the parent company of the Europris
group, consisting of Europris Holding AS and subsidi-
aries�
The nancial statements of Europris ASA have been
prepared in accordance with the simplied IFRS
pursuant to section 3-9 of the Norwegian Accounting
Act and the directive on simplied IFRS issued by the
Norwegian Ministry of Finance on 21 January 2008.
The board approved the nancial statements on 24
March 2022.
1.1 Simplied IFRS
The company has applied the following simplica-
tions to the IFRS recognition and measurement
principles:
• IFRS 1 First-time adoption of IFRS no 7 regarding
use of continuity of historical acquisition cost of
investments in subsidiaries
• dividends and group contributions are recognised
as income in the same year as the dividend or
group contribution is recognised in the nancial
statements of the group company which pays the
dividend or group contribution, in accordance with
Norwegian generally accepted accounting
principles.
1.2 Basis of preparation
The nancial statements have been prepared in
accordance with the historical cost convention. The
company has applied the going concern assumption
when preparing its nancial statements.
1.3 Investment in associates
The company has investments in associates.
Associates are entities over which the company has
signicant inuence, but not control over nancial and
operating management.
The considerations made in determining whether the
company has signicant inuence over an entity are
similar to those necessary to determine control over
subsidiaries�
Associates are accounted for using the equity
method from the date when signicant inuence is
achieved until such inuence ceases.
Investments in an associate are initially recognised at
cost. The contingent consideration is included in cost
and changes in estimated contingent consideration will
be recognised as an adjustment of cost. The carrying
amount of the investment is adjusted to recognise
changes in the company’s share of the net assets of
the associate since the acquisition date. Goodwill
relating to the associate is included in the carrying
amount of the investment and is not tested for impair-
ment individually.
The statement of prot or loss reects the company’s
share of the results of operations of the associate. In
addition, when there has been a change recognised
directly in the equity of the associate, the company
recognises its share of any changes, when applicable,
in the statement of changes in equity. Unrealised gains
and losses resulting from transactions between the
company and the associate are eliminated to the extent
of the interest in the associate.
If there are indications that the investment in the
associate is impaired, the company will perform an
impairment test of the carrying amount of the
investment. Any impairment losses are recognised as
share of prot of an associate in the statement of prot
or loss.
If the company’s share of the loss surpasses the
carrying amount of the associate, the carrying amount
is set to zero and further loss is not recognised unless
the company has an obligation to make up for the loss.
Upon loss of signicant inuence over the associate,
such that the equity method ceases to apply, the
company measures and recognises any retained
investment at its fair value. A new measurement of
remaining ownership interests will not be performed if
the equity method is still applicable.
1.4 Revenue recognition
Group contributions and dividends received from
subsidiaries are recognised as income if the amount is
within the net income of the subsidiary after the
acquisition date. Group contributions and dividends
which exceed the net income of the subsidiary after the
acquisition date are recognised as a reduction of the
carrying value of the subsidiary. When recognising
income, the gross group contribution (before tax) is
presented on a separate line in the income statement.
Note 1 Accounting principles
110
Group contributions to subsidiaries from the company
increase the carrying value of the investment. Group
contributions to subsidiaries are recognised net, after
tax.
1.5 Current and deferred income tax
Tax expense for the period comprises current and
deferred tax. Deferred tax/deferred tax asset is recog-
nised on temporary differences arising between the tax
bases of assets and liabilities and their carrying
amounts in the nancial statements.
Deferred income tax assets are recognised only to the
extent that it is probable that future taxable prot will be
available against which the temporary differences can
be utilised. The company recognises previously
deferred tax assets to the extent that it has become
probable that the company can utilise the deferred tax
asset. Similarly, the company will reduce deferred tax
assets to the extent that the company no longer
considers it probable that it can utilise the deferred tax
asset�
Deferred tax liabilities and deferred tax assets are
measured on the basis of the anticipated future tax rate
relating to items where the temporary difference has
arisen.
Deferred tax liabilities and deferred tax assets are
recognised at nominal value and are classied as xed
assets (non-current liabilities) in the balance sheet.
Current tax and deferred tax are recognised directly in
equity to the extent that the tax items relate to equity
transactions or changes in accounting principles.
1�6 Cash
Cash includes cash in hand and bank deposits.
1.7 Provisions
Provisions are recognised when the company has a
present obligation (legal or constructive) as a result of a
past event, it is probable (more likely than not) that an
outow of economic resources will be required from the
company, and amounts can be estimated reliably. If the
effect is material, provisions are calculated by discount-
ing the expected future cash ows at a pre-tax discount
rate which reects current market assessments of the
time value of money and, if relevant, the risks specic
to the liability.
A provision for warranties is recognised when the
underlying products or services are sold. The provision
is based on historical warranty data and an assessment
of all possible outcomes and the accompanying proba
-
bilities.
1.8 Contingent liabilities and assets
A contingent liability is recorded in the books of
accounts only if the contingency is probable and the
amount of the liability can be estimated. In cases where
the possible outow of economic resources as a result
of present obligations is considered improbable or
remote, no liability is disclosed.
A contingent asset is not recognised in the nancial
statements, but disclosed if it is probable that the benet
will ow to the company.
1.9 Subsequent events
New information after the reporting date regarding the
company’s nancial position at the reporting date is
taken into consideration in the nancial statements.
Events after the reporting date which do not affect the
company’s nancial position at the reporting date, but
which will affect the nancial position of the company
in the future, are disclosed if they are considered to be
signicant.
111
Note 2 Employees, pensions and remuneration to auditor
The company has no employees. As a result, it has no obligation to have a pension scheme according to the
Norwegian Act on mandatory occupational pensions.
No salaries or other remunerations have been paid to the CEO.
Compensation for directors is stipulated at NOK 2,869 in 2021.
There are no obligations to pay the directors a settlement in the event of a termination of service.
No loans or guarantees have been provided for any related parties.
Note 3 Investments in subsidiaries
Investments in subsidiaries are stated at acquisition cost and accounted for using the cost method.
Figures are stated in NOK 1,000
2021 2020
Audit fees, divided by type of service (exclusive VAT)
Statutory audit
373 186
Technical services related to nancial reporting
38 647
Total audit fees 410 833
Figures are stated in NOK 1,000
Registered
ofce
Ownership
share
Equity
31.12.2021
Net prot 2021
Carrying
value
Subsidiary
Europris Holding AS Fredrikstad 100% 1,502,177 8,174 925,500
112
Europris holds an option to acquire the remaining 80 per cent of the shares in Runsvengruppen AB. Whether the
option is to be exercised has been further delayed. The fair value of the option is considered immaterial and is not
recognised in the balance sheet.
Note 4 Investments in associated companies
In June 2018, the group acquired 20 per cent of Runsvengruppen AB (ÖoB), a Swedish discount variety retailer.
ÖoB has its headquarters in Skänninge and runs 93 stores across Sweden.
The Europris group owns 20 per cent of the shares and voting rights in Runsvengruppen AS.
Based on equity value, using a xed multiple of 7.7 on adjusted EBITDA for ÖoB in 2018, the purchase price was
determined as NOK 115.2 million. NOK 4.3 million in transaction expenses has also been recognised as part of the
acquisition cost, bringing the total investment to NOK 119.5 million. The vendor note issued when closing the deal is
converted to 4,349,695 Europris shares, corresponding to 2.61 per cent of the share capital.
A summary of the nancial information from Runsvengruppen AB group, based on 100 per cent gures:
Figures are stated in SEK million 2021 2020
Unaudited
Audited
Total operating income
3,899.0 4,186.0
Prot for the year
NA 1�9
Current assets
NA 847�1
Non-current assets
NA 1,170.6
Current liabilities
NA 740�0
Non-current liabilities
NA 893�1
Equity
NA 384�6
Book value 01.01 128�5
125�9
Estimated prot for the period 0�2
2�6
Book value 31.12 128.7
128.5
The group's share of equity
77�1 78�7
Goodwill
49�8 49�8
Goodwill adjustment
1�8 -
Book value 31.12
128.7 128.5
113
Note 5 Non-current liabilities and receivables to group companies
Liabilities and receivables to group companies is included with the following amounts:
Note 6 Income tax expense
Liabilities and receivables to group companies is included with the following amounts:
Figures are stated in NOK 1,000
2021 2020
Liabilities
Debt in the group's cash pool agreement - 246,281
Other current debt to subsidiaries - 417
Total liabilities - 246,698
Receivables
Group contribution 659,264 702,172
Deposits in the group's cash pool agreement 9,011 -
Total receivables 668,275 702,172
Figures are stated in NOK 1,000
2021 2020
Basis for income tax expense and tax payable
Prot before tax 639,434 687,600
Non-deductible expenses (639,434) (687,600)
Basis for the tax expense - -
Reconciliation of the income tax expense
Tax payable (22% of the basis for tax payable in the income statement) 140,675 151,272
Income tax expense - -
Difference (140,675) (151,272)
Difference consists of:
22% of non-deductible expenses (140,675) (151,272)
Total explained difference (140,675) (151,272)
Tax payable in the balance sheet
Tax payable in income tax expense - -
Tax payable in balance sheet - -
114
Note 7 Share capital and shareholder information
The share capital of Europris ASA is NOK 166,968,888, consisting of 166,968,888 shares with par value of NOK 1.
The company’s share capital consists of one class of shares, whereby all shares have the same voting rights.
Major shareholders at 31 December 2021 Number of shares Share of capital
FOLKETRYGDFONDET 19,590,839 11�7%
VERDIPAPIRFONDET ALFRED BERG GAMBA 6,554,850 3�9%
THE BANK OF NEW YORK (ARCTIC FUNDS) Nominee 6,448,013 3�9%
EUROPRIS ASA 5,997,376 3�6%
RUNOR AS 4,349,695 2�6%
STATE STREET BANK AND TRUST COMPANY Nominee 3,974,302 2�4%
VERDIPAPIRFONDET STOREBRAND NORGE 3,164,738 1�9%
STATE STREET BANK AND TRUST COMPANY Nominee 3,130,774 1�9%
SKANDINAVISKA ENSKILDA BANKEN AB Nominee 2,850,000 1�7%
VERDIPAPIRFONDET HOLBERG NORDEN 2,400,000 1�4%
THE BANK OF NEW YORK MELLON Nominee 2,377,257 1�4%
VERDIPAPIRFONDET ALFRED BERG NORGE 2,250,716 1�3%
BROWN BROTHERS HARRIMAN & CO Nominee 2,250,000 1�3%
THE NORTHERN TRUST COMPANY, LONDON Nominee 2,139,800 1�3%
THE BANK OF NEW YORK MELLON Nominee 2,129,606 1�3%
VPF DNB AM NORSKE AKSJER 2,036,069 1�2%
VEVLEN GÅRD AS 2,000,000 1�2%
STATE STREET BANK AND TRUST COMPANY Nominee 1,969,350 1�2%
SKANDINAVISKA ENSKILDA BANKEN AB Nominee 1,926,927 1�2%
VERDIPAPIRFONDET HOLBERG NORGE 1,900,000 1�1%
OTHER SHAREHOLDERS 87,528,576 52�4%
Total shares 166,968,888 100.0%
Shares held by directors, CEO and CFO
Title Number of shares
Tom Vidar Rygh (directly and indirectly through Retiro AS) Chair 610,035
Pål Wibe (Nordkronen II AS) Director 408,572
Karl Svensson (directly and indirectly through RuNor AS) Director 281,891
Tone Fintland Director 10,808
Hege Bømark Director 8,129
Claus Juel-Jensen Director 7,112
Espen Eldal (directly and indirectly through Knipen AS) CEO 610,528
Stina C Byre CFO 10,528
115
Treasury shares at 31 December 2021
Nominal value Number of shares Fair value (NOK)
Shares owned by Europris ASA 5,997,376 5,997,376 419,666,386
Figures are stated in NOK 1,000
2021 2020
Financial assets measured at amortised cost
Other current receivables 668,880 703,106
Cash - 2
Financial liabilities measured at amortised cost
Other current liabilities - (249,316)
Accounts payable (1,061) (853)
Net nancial instruments 667,819 452,939
Change in number of treasury shares
Treasury shares 01�01�2021 6,150,305
Buy-back of treasury shares 1,111
Sale of treasury shares (85,099)
Sale of treasury share to senior execuitives and directors (68,941)
Treasury shares 31.12.2021 5,997,376
Note 8 Transactions with related parties
Information regarding salaries of senior executives is disclosed in note 2. Information on intercompany
receivables and liabilities is disclosed in note 5. No material transactions were conducted with related
parties in 2021 other than the information included in the notes.
Note 10 Subsequent events
There were no subsequent events after the balance sheet date and before the date of the approval of
the nancial statements which provide new information about conditions which existed at the balance sheet
date which are not currently reected in the nancial statements), or signicant events after the balance
sheet date which require further disclosures.
Note 9 Financial instruments by category
Treasury shares have been deducted from equity at cost. The nominal value of the shares has been deducted
from paid-in capital.
Average cost price for treasury shares is NOK 44.47.
116
Europris head ofce in Fredrikstad.
117
Responsibility statement
We conrm, to the best of our knowledge, that the nancial statements for the period 1 january to
31 December 2021 have been prepared in accordance with current applicable accounting standards,
and give a true and fair view of the assets, liabilities, nancial position and prot and loss of the entity
and the group taken as a whole. We also conrm that the directors’ report includes a true and fair view
of the development and performance of the business and the position of the entity and the group, together
with a description of the principal risks and uncertainties facing the entity and the group.
Declaration to the annual report 2021
Fredrikstad, 24 March 2022
THE BOARD OF DIRECTORS OF EUROPRIS ASA
Claus Juel-Jensen
Karl Svensson
Espen Eldal
CEO
Tom Vidar Rygh
Chair
Hege Bømark
Tone Fintland
Pål Wibe
Bente Sollid Storehaug
118
APMs are used by Europris for annual and periodic
nancial reporting in order to provide a better under-
standing of the group’s nancial performance. APMs are
considered as well-know and frequently used by users
of the nancial statements and are also used in internal
reporting and by management to measure operating
performance.
Gross prot / gross margin
Gross prot is dened as Total operating income
minus the cost of goods sold (COGS). The gross prot
represents revenue that the group retains after incurring
the direct costs associated with the purchase of the
goods. Gross margin is dened as gross prot divided
by total revenue and is useful for benchmarking direct
costs associated with the purchase of the goods vs total
revenues.
Opex
Operating expenses (Opex) is the sum of employee
benets expense and other operating expenses. It is
useful to look at cost of these two components
combined, as they compose a large part of the xed
operating costs. The Opex-to-sales ratio divides the
Opex by Total operating income and is useful for
benchmarking this cost base vs the development in
sales.
EBITDA / EBITDA margin
EBITDA is earnings before interests, tax, depreciation
of property, plant and equipment and right-of-use assets
and amortisation of other intangibles. EBITDA is a
well-known and widely used term among users of the
nancial statements and is useful when evaluating
operational efciency on a more variable cost basis as
they exclude amortisation and depreciation expense
related to capital expenditure. EBITDA margin is
EBITDA divided by Total operating income and is
useful for benchmarking this protability parameter
vs the development in sales.
EBIT
EBIT is earnings before interest and taxes and is the
same as the IFRS denition of operating prot. EBIT is a
well-known and widely used term among the users of
the nancial statements and is useful when evaluating
operational protability. EBIT margin is EBIT divided by
Total operating income, and thus the same as Operating
prot divided by Total operating income.
Working capital
Working capital is the sum of inventories and trade
receivables and other receivables less the sum of
accounts payable and other current liabilities. Net
change in working capital is the change in the
mentioned parameters; i.e., net change in working
capital is the sum of change in inventories and trade
receivables and change in other receivables less the
sum of change in accounts payable and other current
liabilities. Net change in working capital is a well-known
and widely used term among the users of the nancial
statements and is useful for measuring the group’s
liquidity, operational efciency and short-term nancial
conditions.
Capital expenditure
Capital expenditure (Capex) is the sum of purchases
of xed assets and intangible assets as used in the
cash ow. Capex is a well-known and widely used term
(Amounts in NOK million)
FY 2021 FY 2020
Employee benets expense
1,230 1,138
+ Other operating expenses
743 635
= OPEX 1,973 1,173
Opex-to-sales ratio
22�8% 21�1%
(Amounts in NOK million)
Definitions of Alternative Performance Measures (APM)
FY 2021 FY 2020
Change in Inventory
(185) (64)
Change in accounts receivable
and other current receivables
(17) (41)
Change in accounts payable
and other current debt
139 315
Decrease/(increase) in nancial assets
at fair value through prot og loss
(76) 17
Net change in working capital
(139) 227
(Amounts in NOK million)
FY 2021 FY 2020
Operating prot
1,512 1,166
+ Depreciation
571 540
= EBITDA 2,083 1,706
EBITDA margin
24�1% 21�3%
(Amounts in NOK million)
FY 2021 FY 2020
Total operating income
8,648 8,013
- Cost of goods sold
4,592 4,534
= Gross prot 4,056 3,478
Gross margin
46�9% 43�4%
119
among the users of the nancial statements and is a
useful measure of investments made in the operations
when evaluating the capital intensity.
Financial debt
Financial debt is the sum of borrowings and lease
liabilities. Financial debt is useful to see total debt as
dened by IFRS.
Cash and liquidity reserves
Cash liquidity reserves is dened as available cash
plus available liquidity through overdraft and credit
facilities. This measure is useful to see total funds
available short term.
Equity ratio
Equity ratio is a nancial ratio indicating the relative
proportion of equity used to nance a company’s
assets; calculated as equity divided by total assets.
Equity ratio is a well-known and widely used term
among the users of the nancial statements and is
useful when evaluating nancial robustness.
Total chain sales
Total chain sales are sales from all chain stores, that
is both directly operated and franchise stores. This KPI
is an important measure of the performance of the total
Europris chain and considered useful in order to under-
stand the development of the entire chain, regardless of
ownership structure of stores.
Denition of other terms used
Directly operated store
Directly operated store means a store owned and
directly operated by the group.
Franchise store
Franchise store means a store operated by a
franchisee under a franchise agreement with the group.
Chain
Chain means the sum of directly operated stores and
franchise stores under the Europris brand name.
Like-for-like sales growth
Like-for-like growth is dened as the growth in total
Europris chain sales for stores that have been open for
every month of both the previous and the current
calendar year.
FY 2021 FY 2020
Sales directly operated stores
7,438 7,240
Sales franchise stores
1,131 1,148
= Total chain sales
8,569 8,388
(Amounts in NOK million)
Definitions of Alternative Performance Measures (APM)
FY 2021 FY 2020
Purchases of xed asets
98 72
Purchases of intangible assets
32 32
= Capital expenditure
131 104
(Amounts in NOK million)
FY 2021 FY 2020
Borrowings
1,092 995
Current borrowings
5 -
Lease liabilities
1,914 1,851
= Financial debt
3,010 2,846
(Amounts in NOK million)
FY 2021 FY 2020
Cash
570 540
+ Total facilities
1,425 1,400
- Total drawn
(15) (14)
= Cash and liquidity reserves
1,981 1,926
(Amounts in NOK million)
FY 2021 FY 2020
Total shareholder´s equity
2,889 2,214
Total assets
8,639 7,248
= Equity ratio
33.4% 30.4%
(Amounts in NOK million)
120
BDO AS
Munkedamsveien 45
Postboks 1704 Vika
0121 Oslo
Independent Auditor's Report Europris ASA - 2021 Page 1 of 5
Independent Auditor's Report
To the General Meeting in Europris ASA
Report on the Financial Statements
Opinion
We have audited the financial statements of Europris ASA.
The financial statements comprise:
• The financial statements of the parent
company, which comprise the balance
sheet as at 31 December 2021, income
statement, statement of
comprehensive income, statement of
changes in equity and cash flows for
the year then ended, and notes to the
financial statements, including a
summary of significant accounting
policies, and
• The financial statements of the group,
which comprise the balance sheet as at
31 December 2021, and income
statement, statement of
comprehensive income, statement of
changes in equity and cash flows for
the year then ended, and notes to the
financial statements, including a
summary of significant accounting
policies.
In our opinion:
• The financial statements comply with
applicable statutory requirements,
• The accompanying financial statements
give a true and fair view of the
financial position of the company as at
31 December 2021, and its financial
performance and its cash flows for the
year then ended in accordance with
simplified application of international
accounting standards according to
section 3-9 of the Norwegian
Accounting Act.
• The accompanying financial statements
give a true and fair view of the
financial position of the group as at 31
December 2021, and its financial
performance and its cash flows for the
year then ended in accordance with
International Financial Reporting
Standards as adopted by the EU.
Our opinion is consistent with our additional
report to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company and
the Group as required by laws and regulations and International Ethics Standards Board for
Accountants’ International Code of Ethics for Professional Accountants (including International
Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in
accordance with these requirements.We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit
Regulation (537/2014) Article 5.1 have been provided.
BDO AS
Munkedamsveien 45
Postboks 1704 Vika
0121 Oslo
Independent Auditor's Report Europris ASA - 2021 Page 1 of 5
Independent Auditor's Report
To the General Meeting in Europris ASA
Report on the Financial Statements
Opinion
We have audited the financial statements of Europris ASA.
The financial statements comprise:
• The financial statements of the parent
company, which comprise the balance
sheet as at 31 December 2021, income
statement, statement of
comprehensive income, statement of
changes in equity and cash flows for
the year then ended, and notes to the
financial statements, including a
summary of significant accounting
policies, and
• The financial statements of the group,
which comprise the balance sheet as at
31 December 2021, and income
statement, statement of
comprehensive income, statement of
changes in equity and cash flows for
the year then ended, and notes to the
financial statements, including a
summary of significant accounting
policies.
In our opinion:
• The financial statements comply with
applicable statutory requirements,
• The accompanying financial statements
give a true and fair view of the
financial position of the company as at
31 December 2021, and its financial
performance and its cash flows for the
year then ended in accordance with
simplified application of international
accounting standards according to
section 3-9 of the Norwegian
Accounting Act.
• The accompanying financial statements
give a true and fair view of the
financial position of the group as at 31
December 2021, and its financial
performance and its cash flows for the
year then ended in accordance with
International Financial Reporting
Standards as adopted by the EU.
Our opinion is consistent with our additional
report to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company and
the Group as required by laws and regulations and International Ethics Standards Board for
Accountants’ International Code of Ethics for Professional Accountants (including International
Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in
accordance with these requirements.We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit
Regulation (537/2014) Article 5.1 have been provided.
121
Independent Auditor's Report Europris ASA - 2021 Page 2 of 5
We have been the auditor of Europris ASA for 6 years from the election by the general meeting of
the shareholders on May 13, 2016 for the accounting year 2016.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
Description of the key audit matter How the key audit matter was addressed in
the audit
Valuation of inventory
Inventory amounts to NOK 1 997 million in the
Financial Statements for 2021. We refer to
note 20 for more information on provisions for
impairment on inventory.
Inventory is measured at the lower of cost and
net realisable value. When determining the
provisions for impairment on inventory,
judgements are applied to assess the items
which may be ultimately sold below cost due to
reduced customer demand, and in estimating
the net realisable value of these items.
Different categories are assessed individually
and are subject to specific provisions for
impairment based on information of historical
and statistical sales data. These assessments
are also based on management’s expectations
for future sales.
The complexity and the judgements involved
has led us to define this as a high risk area for
the audit.
We have reviewed management’s policy for
assessing the impairment of inventory and that
management applies the impairment policies
consistently year on year. We have also
reviewed the documentation of obsolescence
for both inventory in stores and in central
warehouse, and evaluated the assumptions
used, for reasonableness. We have also tested
the arithmetical accuracy of the Group’s
calculation of the profit margin on older goods.
Our audit procedures included observing the
stocktaking in a selection of stores and
reviewing internal controls and procedures as
well as performing re-counts. We have also
tested internal controls and procedures related
to stocktaking at the central warehouse. In
addition, we have tested the calculation of
cost of goods sold.
Valuation of intangible assets
Intangible assets include goodwill and
trademark, amounting to NOK 2 073 million and
NOK 591 million respectively. We refer to note
12 for more information.
Under IFRS, the Group is required to test the
amount of intangible assets for impairment
annually.
The impairment test was significant to our
audit due to the complexity of the assessment
process and the significant judgements and
assumptions involved. The impairment test is
Our audit procedures included, among others,
reviewing management’s documentation of the
group’s impairment assessment for intangible
assets.
We have reviewed the methodology used and
assessed the WACC against the criteria in IAS
36. We have also compared the cash-flows used
in the impairment test with the Group’s budget
and business plan and considered if there are
factors indicating that these estimates are not
realistic. We have also tested the arithmetical
122
Independent Auditor's Report Europris ASA - 2021 Page 3 of 5
based on a value in use calculation for defined
cash generating units. Value in use is
calculated based on a pre-tax free cash flow
and discounted with a pre-tax WACC.
accuracy of the calculations in the impairment
test.
We have involved our internal valuation
experts to assist us in evaluating the
assumptions and methodologies applied by the
Group.
Purchase price allocation
The group acquired 67% of the shares in
Lekekassen Holding AS and 67% of the shares
in Lunehjem.no AS during 2021. The total
purchase price amounts to NOK 511 million in
the Financial Statements of 2021. We refer to
note 15 for more information.
Under IFRS, the Group is required to allocate
the purchase price to the identified assets and
liabilities acquired.
The purchase price allocation was significant to
our audit due to the complexity involved in
identifying all relevant assets and liabilities,
and the significant judgements and
assumptions involved in measuring the fair
value of assets at the acquisition date.
Our audit procedures included, among others,
reviewing management’s documentation of the
purchase price allocation.
We have reviewed the methodology used and
assessed the purchase price allocation against
the criteria in IFRS 3. We have reviewed an
external valuation related to the excess value
for buildings. Moreover, we have assessed the
relief from royalty valuation method applied by
management for measuring fair value of
trademarks. Our assessment included, among
others, an assessment of forecasted cash flows,
of royalty rate applied and of WACC discount
rate used. We have also tested the arithmetical
accuracy of the calculations in the purchase
price allocation.
We have involved our internal valuation
experts to assist us in evaluating the
assumptions and methodologies used by the
Group.
Other information
The Board of Directors and the Managing Director (management) is responsible for the other
information. The other information comprises the Board of Directors’ report and other information
in the Annual Report, but does not include the financial statements and our auditor’s report
thereon. The other information in the Annual Report is expected to be made available to us after
that date. Our opinion on the financial statements does not cover the other information.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the consolidated financial statements or our knowledge obtained in the audit or otherwise appears
to be materially misstated. If, based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
When we read the Annual Report, if we conclude that there is a material misstatement therein, we
are required to communicate the matter to the Board of Directors.
Independent Auditor's Report Europris ASA - 2021 Page 3 of 5
based on a value in use calculation for defined
cash generating units. Value in use is
calculated based on a pre-tax free cash flow
and discounted with a pre-tax WACC.
accuracy of the calculations in the impairment
test.
We have involved our internal valuation
experts to assist us in evaluating the
assumptions and methodologies applied by the
Group.
Purchase price allocation
The group acquired 67% of the shares in
Lekekassen Holding AS and 67% of the shares
in Lunehjem.no AS during 2021. The total
purchase price amounts to NOK 511 million in
the Financial Statements of 2021. We refer to
note 15 for more information.
Under IFRS, the Group is required to allocate
the purchase price to the identified assets and
liabilities acquired.
The purchase price allocation was significant to
our audit due to the complexity involved in
identifying all relevant assets and liabilities,
and the significant judgements and
assumptions involved in measuring the fair
value of assets at the acquisition date.
Our audit procedures included, among others,
reviewing management’s documentation of the
purchase price allocation.
We have reviewed the methodology used and
assessed the purchase price allocation against
the criteria in IFRS 3. We have reviewed an
external valuation related to the excess value
for buildings. Moreover, we have assessed the
relief from royalty valuation method applied by
management for measuring fair value of
trademarks. Our assessment included, among
others, an assessment of forecasted cash flows,
of royalty rate applied and of WACC discount
rate used. We have also tested the arithmetical
accuracy of the calculations in the purchase
price allocation.
We have involved our internal valuation
experts to assist us in evaluating the
assumptions and methodologies used by the
Group.
Other information
The Board of Directors and the Managing Director (management) is responsible for the other
information. The other information comprises the Board of Directors’ report and other information
in the Annual Report, but does not include the financial statements and our auditor’s report
thereon. The other information in the Annual Report is expected to be made available to us after
that date. Our opinion on the financial statements does not cover the other information.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the consolidated financial statements or our knowledge obtained in the audit or otherwise appears
to be materially misstated. If, based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
When we read the Annual Report, if we conclude that there is a material misstatement therein, we
are required to communicate the matter to the Board of Directors.
123
Independent Auditor's Report Europris ASA - 2021 Page 4 of 5
Opinion on the Board of Director’s report
Based on our knowledge obtained in the audit, in our opinion the Board of Directors’ report
• is consistent with the financial statements and
• contains the information required by applicable legal requirements.
Our opinion on the Board of Director’s report applies correspondingly for the statements on
Corporate Governance and Corporate Social Responsibility.
Responsibilities of the Board of Directors and the Managing Director for the Financial Statements
Board of Directors and the Managing Director (management) are responsible for the preparation of
financial statements that give a true and fair view, for in accordance with simplified application of
international accounting standards according to section 3-9 of the Norwegian Accounting Act, and
for the preparation and fair presentation of the financial statements of the group in accordance
with International Financial Reporting Standards as adopted by the EU, and for such internal control
as management determines is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s and
the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to
liquidate the Company or Group or to cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
For further description of Auditor’s Responsibilities for the Audit of the Financial Statements
reference is made to:
https://revisorforeningen.no/revisjonsberetninger
Report on compliance with Regulation on European Single Electronic Format (ESEF)
Opinion
We have performed an assurance engagement to obtain reasonable assurance that the financial
statements with file name 5967007LIEEXZXGA8G28-2021-12 -31-en.zip have been prepared in
accordance with Section 5-5 of the Norwegian Securities Trading Act (Verdipapirhandelloven) and
the accompanying Regulation on European Single Electronic Format (ESEF).
In our opinion, the financial statements have been prepared, in all material respects, in accordance
with the requirements of ESEF.
124
This document has been electronically signed, and therefore does not contain a handwritten signature.
Independent Auditor's Report Europris ASA - 2021 Page 5 of 5
BDO AS, a Norwegian liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the
international BDO network of independent member firms. The Register of Business Enterprises: NO 993 606 650 VAT.
Management’s Responsibilities
Management is responsible for preparing, tagging and publishing the financial statements in the
single electronic reporting format required in ESEF. This responsibility comprises an adequate
process and the internal control procedures which management determines is necessary for the
preparation, tagging and publication of the financial statements.
Auditor’s Responsibilities
For a description of the auditor’s responsibilities when performing an assurance engagement of the
ESEF reporting, see: https://revisorforeningen.no/revisjonsberetninger
BDO AS
24 March 2022
Roger Telle-Hansen
State Authorised Public Accountant
(This document is signed electronically)
Independent Auditor's Report Europris ASA - 2021 Page 5 of 5
BDO AS, a Norwegian liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the
international BDO network of independent member firms. The Register of Business Enterprises: NO 993 606 650 VAT.
Management’s Responsibilities
Management is responsible for preparing, tagging and publishing the financial statements in the
single electronic reporting format required in ESEF. This responsibility comprises an adequate
process and the internal control procedures which management determines is necessary for the
preparation, tagging and publication of the financial statements.
Auditor’s Responsibilities
For a description of the auditor’s responsibilities when performing an assurance engagement of the
ESEF reporting, see: https://revisorforeningen.no/revisjonsberetninger
BDO AS
Roger Telle-Hansen
State Authorised Public Accountant
(This document is signed electronically)
125
Europris ASA was listed on the Oslo Stock Exchange
in 2015.
The share price closed year-end 2021 at NOK 69.98,
which implies a market value of NOK 11.7 billion. The
highest share price was NOK 70.50 and the lowest was
NOK 47.14 in 2021. An ordinary dividend of NOK 2.20
per share and an additional dividend of NOK 0.50 per
share to reect the strong nancial performance, was
paid out in May 2021.
Europris ASA had 12,395 registered shareholders in
the Norwegian Central Securities Depository (VPS) at
31 December 2021. The company’s shareholders are
located in 25 different countries together with Norway.
About 97 per cent of the company’s shareholders are
based in Norway, while 61 per cent of the shares are
registered to foreign shareholders.
Analyst coverage
10 equity analysts have covered Europris ASA in 2021:
Financial calendar
Europris publishes its quarterly result 07:00 am
CET. The report and presentation will be available
at the company’s web page and at Oslo Børs’
Newsweb.
Share information
Number of shares 166,968,888
Nominal value per share NOK 1�00
Ticker at Oslo Børs EPR
ABG Sundal Collier Petter Nystrøm
Andreas Lundberg
petter.nystrom@abgsc.no
andreas.lundberg@abgsc.no
Arctic Securities Carl Frederick Bjercke cfb@arctic.com
Carnegie Eirik Rafdal eirik.rafdal@carnegie.no
DNB Markets Ole Martin Westgaard
Erik Lundby
ole.martin.westgaard@dnb.no
erik.lundby@dnb.no
Handelsbanken Capital Markets Nicklas Skogman nisk03@handelsbanken.se
Kepler Cheuvreux Markus Borge Heiberg mheiberg@keplercheuvreux.com
Nordea Kristoffer Pedersen kristoffer.b.pedersen@nordea.com
Pareto Securities Gard Aarvik gard.aarvik@paretosec.no
SEB Markus Bjerke
Stefan Nelson
markus.bjerke@seb.no
stefan.nelson@seb.se
Sparebank 1 Markets Øyvind Mossige oyvind.mossige@sb1markets.no
21 April 2022 Annual General Meeting
28 April 2022 First quarter 2022
14 July 2022 Second quarter 2022
03 November 2022 Third quarter 2022
80
70
60
50
40
30
20
10
0
Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec
EPR share price development 2021
Shareholders information
126
Notes
127
NO-1661 Rolvsøy
Switchboard: +47 971 39 000
email: ir@europris.no
www.europris.no