SKAKO A/S : Annual report 2023 (7 MB)

Revenue

(DKKm)

248.2

(+4.5%)

Up from 237.5

SKAKO A/S

CVR: 36440414

Bygmestervej 2

5600 Faaborg

Denmark

Annual report

2023

EBIT before special items

Order backlog

EBIT margin

ROIC

(DKKm)

(DKKm)

9.9%

91.5%

61.9

24.6

(+1.6pp)

(+74.6pp)

(-12.4%)

(+25.1%)

Up from 19.7

Up from 8.3%

Up from 16.9%

Down from 70.7

CONTENTS

Management review

1. Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

1.1 Letter to our shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 1.2 Key events 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

1.3 Financial key figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

1.4 Strategy and business model . . . . . . . . . . . . . . . . . . . . . . . . . . 13 1.5 Why invest in SKAKO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 1.6 Financial ambitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 1.7 Financial review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 1.8 Guidance 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

2. Discontinued activities, Business unit Concrete . . . . . . . . . . . . . . . . .23

2.0 Financial performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

3. Corporate governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

3.1 Company announcements 2023	25
3.2	Corporate social responsibility	26
3.3 Risk management	33
3.4	Corporate governance and remuneration report	35
3.5 Executive management	36
3.6	Board of directors	37
3.7	Shareholder information	39
4. Financial statements	40
4.1 Statement by Management	41
4.2	Independent auditor's report	42
4.3	Consolidated financial statements	48
4.4 Consolidated notes	55
4.5	Parent company financial statements	99
4.6 Parent company notes	104

| Annual report 2023

Important notice about this document

This document contains forward-looking statements. Words such as believe, expect, may, will, plan, strategy, prospect, foresee, estimate, project, anticipate, can, intend, outlook, guidance, target and other words and terms of similar meaning in connection with any discussion of future operation of financial performance identify forward- looking statements. Statements regarding the future are subject to risks and uncertainties that may result in considerable deviations from the outlook set forth. Furthermore, some of these expectations are based on assumptions regarding future events which may prove incorrect. Due to the war in Ukraine, increased geopolitical tension and uncertainty regarding interest rate and inflation, this guidance is subject to a higher-than-normal degree of uncertainty.

Due to the divestment of SKAKO Concrete activities at December 29, 2023 these activities are only included as discontinuing activities according to IFRS 5.

Page 2

SKAKO 2023 IN BRIEF

| Annual report 2023

			10%
PLANT ORDERS		15%	35%
Revenue split	AFTERSALES	Revenue
(DKK) 170,302	by plant orders	(DKK) 77,857	2023
and aftersales	DKK 248.2m

40%

Recycling		Minerals		Fasteners		Others

Order intake

(DKKm)

238.6

Down from 255.9

Order backlog

(DKKm)

61.9

Down from 70.7

Revenue

(DKKm)

248.2

Up from 237.5

EBIT before special

items (DKKm)

24.6

Up from 19.7

EBIT margin before

special items

9.9%

Up from 8.3%

Earnings per share

(DKKm)

26.34

Up from 8.13

Employees

115

Up from 112

ROIC

91.5%

Up from 16.9%

Page 3

1. HIGHLIGHTS

1.1 LETTER TO OUR SHARHOLDERS

1.2 KEY EVENTS 2023

1.3 FINANCIAL KEY FIGURES

1.4 STRATEGI & BUSINESS MODEL

1.5 WHY INVEST IN SKAKO

1.6 FINANCIAL AMBITIONS

1.7 FINANCIAL REVIEW

1.8 GUIDANCE 2024

2.0 FINANCIAL PERFORMANCE, DISCONTINUED ACTIVITIES

| Annual report 2023

Page 4

1.1 LETTER TO OUR SHAREHOLDERS

A strong year and ahead of the financial targets in the 2024 plan!

2023 was a year that will go into the SKAKO history books in more than one way. The company delivered very strong results, SKAKO turned 60 years and the SKAKO Concrete activities were sold off to Esbjerg based Zefyr Invest.

Entering the year 2023 things were pointing in other directions. The SKAKO Board of Directors had received an offer to sell all SKAKO activities at a price significantly above the market cap at that time and the board was looking into this opportunity. The opportunity did not materialize at the end, and the transaction was called off. However, the Board of Directors decided to test the general market appetite to buy SKAKO or one of the companies in SKAKO. The Esbjerg based industrial investment fund Zefyr Invest ended up buying the SKAKO Concrete activities by December 29 2023, at a significant premium price of DKK 123m, being 11 x EBIT of 2022 and 65% of the SKAKO Group market cap.

The transaction unlocked significant shareholder value and the share-price increased with 50% from from 71 to the 110 level. DKK 122m was distributed to shareholders by the end of February, representing more than the proceeds from the transaction after transaction costs. On top of this we are proposing an ordinary dividend of DKK 15m in line with last year.

We would like to use this opportunity to thank all SKAKO Concrete employees for an impressive job of turning the Concrete business around over the last 3 years. We are extremely happy to see the business continue under a new long sighted ownership committed to the domicile in Faaborg.

The continuing SKAKO Vibration activities performed well in 2023 with an EBIT of DKK 24.6m. This is an increase of 26% compared with 2022 and a little above our latest guidance of DKK 20-24m.

What should shareholders expect from the new SKAKO?

For many years, SKAKO has been operated as two completely separate businesses with their own independent managements and organizations in Concrete and Vibration. The divestment of SKAKO Concrete means that the company now can focus more on the business segments in SKAKO Vibration. This part of SKAKO has for many years delivered a stable return, with good profitability of around 10%, by selling sorting solutions based on vibration technology in 3 main segments:

Fasteners

SKAKO delivers advanced conveying solutions to subcontractors for the automotive industry. SKAKO is the market leader in Germany, which is by far the largest market in Europe. The European market is expected to grow by almost 5% annually until 2031.

Minerals/Mining

SKAKO has provided sorting and processing solutions to the Mining industry for over 50 years. The industry faces significant investments to ensure raw materials for the green transition. The global market is expected to grow by almost 6% per year until 2028.

Recycling

SKAKO has provided solutions to the waste sorting market for many years. In 2019, the board decided to invest more actively in this segment through the acquisition of the company Dartek, located in St. Sebastian, Spain. This acquisition has been instrumental in getting deeper understanding of the growing Recycling market boosted by the push for green transition. SKAKO will invest into organic growth and pursue M&A opportunities in this segment.

All years are different, and challenges and opportunities vary, but the dependance on skilled and satisfied employees as well as happy customers and partners is always important.

We would like to thank everyone for the support and trust in SKAKO in 2023.

Lionel Girieud	Jens Wittrup Willumsen
CEO	Chairman of the Board

| Annual report 2023

1.1 Letter to our shareholders

Page

5

Our purpose

We aim to make customers' production flow efficient, reliable and sustainable

Our values

We are dedicated

as our knowledge and competencies are inherited from more than 60 years of experience and dedicated to your needs

We are reliable

as we are known for setting the standards of quality and accuracy within our industry

We are accessible

as we are well represented around the world and always ready to help

Our brand promises

We develop sustainable, technology-based and visionary solutions

We meet customers with a future-oriented mindset and

engage our technical know-how, digitization and innovative capacity in companies' individual needs

We provide profitable business

We generate continuous and visible value for our customers and our investors

We are big enough to cope - and small enough to care

We match customers' needs and deliver scalable solutions

We commit ourselves in close partnerships

We put our customers' needs first and bring our service, customer-adapted solutions and engineering expertise.

| Annual report 2023

Page 6

1.2 KEY EVENTS 2023

Brand Manifesto

SKAKO Vibration has made a brand manifesto explaining the core of the business, which is to help the Minerals, Fasteners, and Recycling industries use and reuse the planet's resources in the best possible way.

Q1

Q1

From San Diego to Pennsylvania

To get closer to the majority of the customers in the USA, SKAKO Concrete has moved the premises from San Diego to Coopersburg, PA.

| Annual report 2023

The Precast Show

In February, SKAKO Concrete participated in the Precast

Show in Ohio.

Q1

Q2

Solar panels

SKAKO Vibration France has installed solar panels on the roof and is now generating its own electricity.

Page 7

1.2 KEY EVENTS 2023

60-year anniversary

On 1 July 2023, SKAKO had 60-year anniversary. The anniversary was celebrated with a reception in June and an employee event in September.

Q3

Q4

Rebuild Ukraine

SKAKO Concrete is ready to help rebuild Ukraine and participated in the Rebuild Ukraine exhibition in Poland in November.

| Annual report 2023

ExhibitionsPOLLUTEC

Both SKAKO Concrete and SKAKO Vibration have participated in many exhibitions during the year. Photo: In October, SKAKO Vibration participated in the Recycling exhibition POLLUTEC in Lyon, France.

Q4

Q4

Sale of SKAKO Concrete

SKAKO Concrete is no longer a part of SKAKO, as it has been sold to Zefyr Invest A/S.

Page 8

1.3 FINANCIAL KEY FIGURES

Key figures and financial ratios - DKK

DKK Thousands	2023	2022		2021	2020	2019
INCOME STATEMENT
Revenue	248,159	237,535		203,200	167,600	180,600
Gross profit	74,734	68,486		57,000	47,000	52,900
Operating profit (EBIT) before special items	24,599	19,659		14,139	9,576	16,668
Special items	(1,934)	(1,958)		-	-	-
Operating profit (EBIT) after special items	22,662	17,701		14,139	9,576	16,668
Net financial items	(3,330)	(2,226)		(4,004)	(2,458)	(2,080)
Profit before tax	19,332	15,474		10,135	7,118	14,588
Profit after tax	13,774	12,385		8,676	6,300	13,908
Profit for the year discontinued activities	67,463	12,689		2,183	7,946	1,210
Profit for the year	81,237	25,074		10,859	14,246	12,698
BALANCE SHEET
Non-current assets	55,001	88,599		84,216	84,265	85,947
Current assets	287,192	295,458		254,804	237,793	236,383
Assets	342,193	384,057		339,020	322,058	322,330
Equity	215,064	146,167		132,237	127,252	124,417
Non-current liabilities	14,454	26,473		29,122	38,455	32,851
Current liabilities	112,675	211,417		177,661	156,351	165,062
Net debt	(137,478)	20,997		26,987	40,187	32,370
Net working capital	54,684	110,681		105,703	111,295	93,427
OTHER KEY FIGURES
Investment in intangible assets	561	4,153		3,962	7,236	2,703
Investment in tangible assets	10,600	6,174		3,504	5,860	9,415
Cash flow from operating activities (CFFO)	16,783	35,665		30,276	4,806	24,451
Free cash flow*	12,159	28,850		22,810	(8,293)	(20,855)
Average number of employees	115	112		199	195	191

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1.3 Financial key figures

Page

* Free cash flow exclusive proceeds from sales of Concrete activities

9

Key figures and financial ratios - DKK CONTINUED

DKK Thousands	2023	2022	2021	2020	2019
FINANCIAL RATIOS
Gross profit margin	30.1%	28.8%	25.4%	23.2%	24.3%
Profit margin (EBIT margin) before special items	9.9%	8.3%	5.6%	4.5%	5.1%
Liquidity ratio	254.9%	126.2%	143.4%	152.1%	141.3%
Equity ratio	62.8%	37.5%	39.0%	39.5%	38.6%
Return on equity	42.5%	16.3%	10.2%	8.6%	12.2%
ROIC	91.5%	16.9%	10,3%	8,3%	9,1%
Financial leverage	-69.9%	17.8%	20.4%	31.6%	26.1%
Net debt to EBITDA	-4.7	0.6	1.0	1.8	1.4
Net debt to EBITDA after extraordinary dividends	-0.5	-	-	-	-
NWC/Revenue	22.0%	25.5%	29.1%	33.1%	26.4%
Earnings per share (EPS)	26.34	5.73	2.8	2.0	4.5
Equity value per share	69.74	27.38	42.9	41.3	40.1
Share price	103.0	62.6	55.2	49.8	45.9
Price-book ratio	1.4	1.3	1.3	1.2	1.1
Market cap	319,960	194,461	171,474	154,700	142,584
Order backlog	61,942	70,700	54,300	58,600	60,000

Figures before 2022 contains the "old" SKAKO Group including SKAKO Vibration and the discontinued business SKAKO Concrete.

For calculation of financial ratios please see note 26. Net working capital is calculated as Inventory, Trade receivables and Contract assets less Contract liabilities and Trade payables. Backlog represents revenue from signed contracts or orders executed but not yet completed or performed in full.

| Annual report 2023

1.3 Financial key figures

Page

10