Annual Report 2016 Short Version Excluding 2014 Figures
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Annual report 2016 Short version excluding 2014 figures 1 · Annual report 2016 Contents Management report Business 3 We design to shape light 4 2016 at a glance 5 A year of great progress 6 Key figures and ratios 8 Developments in 2016 Corporate 10 Corporate information 13 Danish design and world-class craftsmanship 15 Risk management Governance 17 Statutory report on corporate governance 17 Statutory report on corporate social responsibility 18 Statutory report on the underrepresented gender Financial statements Consolidated 20 Income statement for 2016 20 Balance sheet at 31.12.2016 21 Statement of changes in equity for 2016 22 Cash flow statement for 2016 22 Notes to consolidated financial statements Parent 26 Income statement for 2016 26 Balance sheet at 31.12.2016 27 Statement of changes in equity for 2016 28 Notes to parent financial statements Accounting policies and statements 30 Accounting policies 36 Statement by Management on the annual report 37 Independent auditor’s report We design to shape light Louis Poulsen is a Danish lighting manufacturer found- ed in 1874 and born out of the Scandinavian design tradition where form follows function. The function and design of our products are tailored to reflect and support the rhythm of natural light. Since our first collaboration with Poul Henningsen in 1924, his views on the dualities of design and light have influenced our light philosophy. Every detail in the design has a purpose. Every design starts and ends with light. We believe in passionate craftsmanship that produces quality lighting and appealing design products. In close partnership with world-class designers, archi- tects and other talents, we have established Louis Pouls- en as one of the key global suppliers of architectural and decorative lighting across the professional and private lighting markets for both indoor and outdoor applica- tions. Louis Poulsen has a global distribution network, 12 subsidiaries and dedicated showrooms in Copenha- gen, Stockholm, Miami, Oslo, Los Angeles, Tokyo and Dusseldorf. Our means are simple and beautiful design. Our purpose is to create an attractive ambience with a positive influ- ence on people and spaces. We design to shape light. 3 · Annual report 2016 2016 at a glance Exciting news and updated icons Steady growth and strong profitability We launched our new light philosophy – design to shape We continued Louis Poulsen’s steady revenue growth light – and completed a series of successful product and increased profitability significantly despite sizeable launches across customer segments and geographies investments in sales and marketing as well as new shop- during the year. in-shops in 2016. We saw good results of the efforts in 2016 with prestig- Our investments in research and development were ious design awards for Øivind Slaatto’s Patera pendant boosted, and we made targeted efforts to improve our and Clara von Zweigbergk – the designer behind the design and manufacturing process to reduce time-to- Cirque pendant. market and enhance efficiency. At the same time, perspectives for the coming years are Efforts made in 2016 and previous years paid off, and we promising with a strong product pipeline in place and initiated further efficiency measures in the areas of inter- the acquisition of manufacturing rights for Finn Juhl’s nal logistics, quality, assembly and painting to continue designs. the positive trend. In 2016, our product launches included: • Clara von Zweigbergk’s Cirque series inspired by Our financial and operational progress included: Tivoli • Revenue growth of 5% to DKK 750 million based • The Three Pendant series by Julie Richoz, Christian mainly on record sales in Sweden and Denmark. Flindt and Øivind Slaatto presented at light+building • A 17% increase in earnings (EBITDA) to DKK 104 in Frankfurt million corresponding to an EBITDA margin of 14%. • Vilhelm Lauritzen’s VL45 Radiohus pendant and VL38 • Establishing 50 new shop-in-shops with a view to table, wall and floor lamp add another 100 in 2017. • The colourful Panthella Mini table lamp • Reducing average time-to-market by 65% in product • Limited copper versions of the classic PH 3½-2½ development and launch process. floor lamp Revenue split 2016 Revenue and profitability 750 716 13.9 Scandinavia (51%) Revenue (DKK’m) EBITDA margin (%) Rest of Europe (16%) 12.4 Rest of World (33%) 2015 2016 4 · Annual report 2016 A year of great progress 2016 was a year of great progress for Louis Poulsen. Denmark or at trusted partners abroad with hand-picked Building on our company’s legacy, we launched our new components from all around the world. This approach is light philosophy – design to shape light – and a host applied whether we produce a classic Albertslund post, of new exciting products and limited editions of com- upgrade a PH Artichoke with LED components in Den- mended design icons. These efforts were supported by mark or get the complex hand painting work just right on significant organisational and operational improvements a new Cirque pendant in China. as well as strong financial performance. We have been fortunate enough to secure the rights for We continued to grow revenue steadily, while investing acclaimed Danish architect Finn Juhl’s designs, and we significantly in accelerating growth in the coming years. will pass on his legacy with great diligence and care, too. Our organisational setup was streamlined in several mar- Going forward, Louis Poulsen will thus produce the de- kets, and we expanded our sales force and established sign of the five iconic Danish designers Poul Henningsen, a new residential shop-in-shop concept with 50 new Arne Jacobsen, Verner Panton, Vilhelm Lauritzen and distribution points added during 2016 – and 100 more to Finn Juhl. come in 2017. We saw good effects of our efforts with record sales across Sweden and Denmark as well as Indeed, the future seems bright for Louis Poulsen with growth in the German market, which has been chal- a solid point of departure for further development of our lenged for years. exciting product range and a positive business outlook for the coming years with favourable market projections While we did spend substantial resources on building a in the high-end segment in mature and growth regions stronger business, we managed to simultaneously boost alike. We will build on our success and win market shares profitability based on successful strategic initiatives with- by continuing the work to upgrade our distribution point in design, manufacturing and sourcing. We reduced our network for residential sales and strengthen our profes- time to market for new products, allowing us to offer cus- sional sales to retail chains and in the outdoor market in tomers new light fixtures at a faster pace and optimising particular. the allocation of resources for design and manufacturing with a shorter running-in period. I would like to take the opportunity to thank all of our talented colleagues, designers and business partners for Our work is guided by four values – quality, passion, making our progress possible. To quote Poul Henningsen humanise and ambience – which are all reflected in the – “The future is inevitable, progress is not.” unique products designed in Denmark and manufac- tured by skilled craftspersons either at our own facility in Christian Engsted, CEO of Louis Poulsen 5 · Annual report 2016 Key figures and ratios 2016 2015 DKK’m’ DKK’m’ Financial highlights Key figures Revenue 750 716 Gross profit/loss 319 281 EBITDA (Earnings before depreciations and amortisation) 104 89 EBITA (Earnings before amortisation) 74 45 Operating profit/loss 62 33 Net financials (20) (11) Profit/loss for the year 27 13 Total assets 671 699 Investments in property, plant and equipment 22 12 Equity 278 247 Net working capital 0 26 Cash flows from (used in) operating activities 99 85 Cash flows from (used in) investing activities (38) (17) Cash flows from (used in) financing activities (227) (52) Ratios Gross margin (%) 42.5 39.2 Net margin (%) 3.6 1.8 EBITDA ratio (%) 13.9 12.4 EBITA ratio (%) 9.9 6.3 Return on equity (%) 10.3 5.6 Solvency ratio (%) 41.4 35.3 Financial highlights are defined and calculated in accordance with “Recommendations & Ratios 2015” issued by the Danish Society of Financial Analysts. Ratios Calculation formula Ratios Gross profit/loss x 100 Gross margin (%) Revenue The entity’s operating gearing. Profit/loss for the year x 100 Net margin (%) Revenue The entity’s operating profitability. EBITDA x 100 EBITDA ratio (%) Revenue The entity’s profitability before depriciation and amortisation EBITDA x 100 EBITA ratio (%) Revenue The entity’s profitability before amortisation Profit/loss for the year x 100 Average equity incl minority Return on equity (%) interests The entity’s return on capital invested in the entity by the owners. Equity x 100 Solvency ratio (%) Total assets The financial strength of the entity 6 · Annual report 2016 Original Coffee and bespoke lighting The quality-conscious team behind acclaimed coffee- house chain Original Coffee place great emphasis on ambience and interior design. The individual premises for each of the eight coffeehouses in the Copenhagen area have been carefully selected and furnished to suit both the local residents and the general atmosphere while re- specting the chain’s focus on relaxed simplicity. Luminaires have been hand-picked to underpin the spe- cial character of each location and provide pleasant illu- mination to create the perfect ambience. In collaboration with Louis Poulsen, Original Coffee has skilfully selected AJ Royal pendants for the intimate coffee bar on Øster- bro, the elegant PH 3½-3 lamp for the bright and airy set- ting at newly refurbished department-store Illum and the sparkling Cirque. 7 · Annual report 2016 Developments in 2016 Primary activities Louis Poulsen Holding A/S’ share capital is not divided The Louis Poulsen group manufactures and sells lighting into classes.