Annual Report (ESEF) • Mar 23, 2023
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Download Source File254900PS6TE65C9V4D712022-01-012022-12-31iso4217:NOK254900PS6TE65C9V4D712021-01-012021-12-31254900PS6TE65C9V4D712022-12-31254900PS6TE65C9V4D712021-12-31254900PS6TE65C9V4D712020-12-31254900PS6TE65C9V4D712020-12-31ifrs-full:IssuedCapitalMember254900PS6TE65C9V4D712020-12-31ifrs-full:SharePremiumMember254900PS6TE65C9V4D712020-12-31ifrs-full:OtherEquityInterestMember254900PS6TE65C9V4D712020-12-31ifrs-full:ReserveOfChangeInValueOfForeignCurrencyBasisSpreadsMember254900PS6TE65C9V4D712021-01-012021-12-31ifrs-full:OtherEquityInterestMember254900PS6TE65C9V4D712021-01-012021-12-31ifrs-full:ReserveOfChangeInValueOfForeignCurrencyBasisSpreadsMember254900PS6TE65C9V4D712021-12-31ifrs-full:IssuedCapitalMember254900PS6TE65C9V4D712021-12-31ifrs-full:SharePremiumMember254900PS6TE65C9V4D712021-12-31ifrs-full:OtherEquityInterestMember254900PS6TE65C9V4D712021-12-31ifrs-full:ReserveOfChangeInValueOfForeignCurrencyBasisSpreadsMember254900PS6TE65C9V4D712022-01-012022-12-31ifrs-full:OtherEquityInterestMember254900PS6TE65C9V4D712022-01-012022-12-31ifrs-full:ReserveOfChangeInValueOfForeignCurrencyBasisSpreadsMember254900PS6TE65C9V4D712022-01-012022-12-31ifrs-full:IssuedCapitalMember254900PS6TE65C9V4D712022-01-012022-12-31ifrs-full:SharePremiumMember254900PS6TE65C9V4D712022-12-31ifrs-full:IssuedCapitalMember254900PS6TE65C9V4D712022-12-31ifrs-full:SharePremiumMember254900PS6TE65C9V4D712022-12-31ifrs-full:OtherEquityInterestMember254900PS6TE65C9V4D712022-12-31ifrs-full:ReserveOfChangeInValueOfForeignCurrencyBasisSpreadsMember ANNUAL REPORT 2022 | CONTENTS Komplett Group in brief ................................4 CEO’s letter ...................................................8 Business segments .....................................12 Board and management ............................. 18 Board of Directors’ report ...........................27 Corporate governance ............................... 40 Sustainability ..............................................48 Financial statements ................................. 114 KOMPLETT ASA ANNUAL REPORT 2022 2 KOMPLETT ASA ANNUAL REPORT 2022 3 | OUR VISION TO BE “THE OBVIOUS CHOICE” This expresses how Komplett Group would like to be perceived and where we are heading. Our vision provides guidance and energy. Each and every day, we strive to be “the obvious choice” for customers, suppliers and employees, and for the community around us. | OUR MISSION To develop complete solutions that MAKE LIFE SIMPLER. | OUR VALUES Our values are fundamental to our corporate culture. Our values tell us how to work, how to treat each other, and how we are perceived by the world around us. PRECISION Keep our promises, meet deadlines, keep up, be clear and accurate. Have respect for and condence in each other. SIMPLICITY Think smart, nd sim- ple solutions. Make life easier for our customers and ourselves. ENTHUSIASM Get involved and wish each other well. Create enthusiasm and gain pleasure from our work. | AN ONLINE-FIRST ELECTRONICS CHAMPION OF THE NORDICS Komplett Group is the largest online rsne first electronics retailer in the Nordic area and offers its customers one of the market’s broadest selections of consumer electronics and business solutions. The group operates an ecient and scalable business model and is widely recognised for having an industry leading cost position. Through its well-known brands Komplett, NetOnNet, Webhallen and Itegra, the group is serving customers in the B2C, B2B and distribution segments. Building on decades of knowhow, expertise and deep customer commitment, the group enjoys industry leading cus- tomer satisfaction and a loyal and growing customer base. Our customers are served from ten webshops, 17 physical stores and 30 complementary self-service, logistics and warehouse shops. With its exs flexible logis- tics and delivery platform, the group is at the forefront when it comes to same-day delivery and last-mile ser- vice from its warehouses in Sandefjord, Norway, and Stockholm and Borås, Sweden. The group employed an average of 1 955 employees throughout the year 2022. The average number of full- time equivalents (FTEs) was 1 251. These se figures include the employees of Ironstone. Komplett ASA is headquartered in Sandefjord, Norway and listed on the Oslo Stock Exchange. KOMPLETT ASA ANNUAL REPORT 2022 4 KOMPLETT IN BRIEF | LEADING SAME-DAY AND LAST-MILE SERVICE Same day delivery SWEDEN >50% Same + next day delivery SWEDEN >90% Central fulllment NetOnNet local fulllment Distribution centres located in the most densely populated areas in Norway and Sweden Same day delivery NORWAY >40% Same + next day delivery NORWAY >90% KOMPLETT ASA ANNUAL REPORT 2022 5 KOMPLETT IN BRIEF | HIGHLIGHTS & KEY FIGURES REVENUESBYCOUNTRY DENMARK 2% NORWAY 50% SWEDEN 48% Revenues 2022 NOK 14.6 billion REVENUESBYSEGMENT DISTRIBUTION 22% B2C 67% B2B 11% Revenues 2022 NOK 14.6 billion KEY FIGURES KOMPLETT GROUP Amounts in NOK million 2022 2021 Operating revenue 14 618 11 043 Growth (%) 32.4% 11.9% Gross prot 1 794 1 462 Gross margin (%) 12.3% 13.2% Operating expenses (ex dep) (adj.) (1 451) (945) Depreciation and amortisation (256) (129) Total operating expenses (adj.) (1 707) (1 074) Operating cost percentage (adj.) (11.7%) (9.7%) EBIT (adj.) 87 388 EBIT margin (adj.) (%) 0.6% 3.5% One-off cost (80) (19) EBIT 6 369 Net nancials (104) (22) Prot before tax, continued operations (98) 347 Prot for the period (32) 300 * Denitions of alternative performance measures (APM) can be found on page 168 of this report. NetOnNet has been consolidated into the Komplett Group’s nancial statements as of 1 April 2022. NetOnNet Synergies on track Material inventory improvement Cash ow from operations of NOK 1.1 billion Industry- leading cost position KOMPLETT ASA ANNUAL REPORT 2022 6 KOMPLETT IN BRIEF Key milestones from our establishment in 1991: 2022: — Market position doubled following combination with NetOnNet 2021: — Komplett ASA listed on Oslo Stock Exchange 2013: — Webhallen becomes a part of the Komplett Group 2011: — Canica acquires 100 per cent of Komplett ASA and the Company is delisted from Oslo Stock Exchange. — NetOnNet delisted by SIBA Invest 2000: — Komplett ASA listed at Oslo Stock Exchange NetOnNet AB listed at Stockholm Stock Exchange 1999: — Itegra, NetOnNet and Webhallen established 1998: — Norek and Komplett merged 1996: — Launch of online retail with Komplett.no 1991: — Establishment of Norek AS Komplett was established in Sandefjord, Norway in 1991. In 1996 we introduced e-commerce to the Norwegian market by establishing the online platform and webshop “Komplett.no”. We are a pioneer within online retail and have a particular heritage for consumer electronics and gaming products. 20222021202020192018 EBIT EBIT adjusted (NOK million) EBIT adjusted (%) (71) 48 276 388 87 0.6% 3.5% 2.8% 0.6% (1.1%) 20222021202020192018 20222021202020192018 NOK million ex. NetOnNet NetOnNet 6 697 7 543 9 866 11 043 4 784 9 834 14 618 20222021202020192018 837 960 1 318 1 462 1 794 20222021202020192018 20222021202020192018 OPERATING COST LEADERSHIP Per cent Operating cost Adjusted for M&A 13.5% 9.6% 12.1% 10.6% 9.7% 11.7% 10.3% 1) Figures for 2018 have been restated. KOMPLETT ASA ANNUAL REPORT 2022 7 KOMPLETT IN BRIEF CHIEF EXECUTIVE OFFICER: | A MUCH STRONGER POSITION Marking my rst ocial letter as the CEO of Komplett Group, I would like to start by acknowledging the tremendous effort and amount of work that has gone into strengthening the group's position in 2022. The past year was no easy period for the retail industry, and I am impressed by the many different workstreams that have come together. Despite lower consumer con- dence throughout 2022, the group made bold decisions and acquired NetOnNet in February 2022. The combina- tion of two strong brands has cemented Komplett’s posi- tion in the market as a leading online-rst electronics platform in the Nordics and doubled our market share. Moving forward, we remain committed to realising the transaction’s signicant cost synergies of at least NOK 200 million on an annual basis. In 2022, the retail industry experienced the effects of overlled warehouses and corresponding price pressure across the industry. Komplett acted swiftly in response to the inventory build-up and successfully reduced its inven- tory by NOK 600 million during the year. As we neared the end of the year, our inventory position was healthy, and the gross margins have started to recover. Ahead of the holiday season, we entered a period asso- ciated with increased spending. At Komplett, we ramped up campaign activities with the aim of providing our cus- tomers with a trusted platform where they gain access to the products they want and need. We are also near- ing a replacement cycle where consumers will seek to replace their current technology. Undoubtedly, tech- nology and electronics continue to play a major role in society, and we will always aim to meet our customers’ expectations. The nal quarter of the year also represents a time for Komplett where we get to opportunity to give back. In November, we supported Barnekreftforeningen (the Chil- dren’s Cancer Association) through a concept named “Gamers against childhood cancer”. Through a three-day live-streaming event, we raised NOK 1.9 million to sup- port Barnekreftforeningen’s efforts to help children and young people affected by cancer. Similar initiatives were made in NetOnNet and Webhallen. Operating in the electronics industry, we are also aware of the need to recycle and reuse electronic components. This is why the group offers programs such as Komplett "FLEX", Webhallen’s "Revive" and NetOnNet’s "Byt in" ser- vice as part of our initiatives to promote circularity. The aim of these programs is to facilitate the resale of prod- ucts in the second-hand market. The group also demonstrated its commitment to run- ning a sustainable and responsible business in 2022 with the launch of its new packaging line. With an internal task force of logisticians and tech enthusiasts, Komplett launched a packaging line reducing the annual usage of plastic by 16-19 tons. This project has also signicantly reduced the amount of air being shipped to customers and decreased the number of containers transporting our packages by 390 per year. We remain committed to our ESG goals and will increase our efforts to reduce our climate footprint. Part of that work includes mapping our emissions and monitor - ing our progress. Even with our new packaging line, we will continue identifying solutions that will make the transportation of our packages even more ecient. There is no doubt that operating sustainably is high on our agenda, and moving forward, we will work hard to ensure that we continue to run a healthy business that takes care of its people, surrounding community and the environment. In summary, the group is well-placed to continue build- ing on its strong market position and is entering 2023 in a much stronger position than when it entered 2022. We have a healthy stock composition with sought-af- ter products and have signicantly improved working capital. Between improved inventory and market prices normalising, we are condent that the pressure on our gross margin will begin to alleviate. Though the tepid consumer sentiment is expected to carry on into 2023, we anticipate that the market is nearing a replacement cycle which will initiate higher consumer demand. Going forward, we will continue to build on the strong market position that Komplett has in Norway and Sweden, and to deliver continued good results as well as realising the potential that lies in the acquisition of NetOnNet. KOMPLETT ASA ANNUAL REPORT 2022 8 CHIEF EXECUTIVE OFFICER | THE GROUP IS WELL-PLACED TO CONTINUE BUILDING ON ITS STRONG MARKET POSITION Personally, I am excited to embark on this new chapter and explore the opportunities that lie ahead. Komplett Group is the largest e-commerce player in the Nordics, regardless of industry, with huge opportunities ahead. On this journey, we will have the best customer experi- ences, innovative and sustainable solutions, the lowest cost position, competitive sourcing terms, enabling us to be a very protable and cash generating company with good returns to our shareholders. Yours sincerely Jaan Ivar Semlitsch CEO Komplett ASA KOMPLETT ASA ANNUAL REPORT 2022 9 CHIEF EXECUTIVE OFFICER KOMPLETT ASA: | SHARE INFORMATION The Komplett Group aims to be an attractive investment. Supported by strong commercial execution and a competitive, scalable, and cost-ecient business model, the Komplett Group is well-positioned to create value both for our customers and shareholders. Komplett ASA is a public limited liability company organ- ised pursuant to the Norwegian Public Limited Com- panies Act, which is part of the laws of Norway. The company was listed on the Oslo Stock Exchange on 21 June 2021 under the ticker code KOMPL. Komplett has one class of shares, and in accordance with the Norwegian Public Limited Companies Act, all shares have equal rights and are freely transferable. The total number of shares issued at 31 December 2022 were 175 297 579. The nominal value per share is NOK 0.40. SHARE CAPITAL CHANGES The combination of Komplett ASA and NetOnNet AB was completed 4 April 2022. As part of the settlement, 35 242 424 new shares were issued to SIBA Invest, making SIBA Invest the second largest shareholder of Komplett ASA. At the end of 2022, a private placement of 67 800 000 new shares was completed at a subscription price of NOK 14.75 per share, raising gross proceeds of NOK 1000050 000. The net proceeds from the private placement and new long-term credit facilities were used to repay the NOK 1 500 million bridge loan, which was obtained in connection with the combination with NetOnNet AB. At year-end 2022, there was a remaining balance of NOK 500 million on the bridge loan, which was repaid in 2023. In January 2023, the company launched a subsequent offering of up to 3 390 000 new shares, each with a nomi- nal value of NOK 0.40, at a subscription price of NOK 14.75. The company received subscriptions for a total of 43 582 shares. Following the issuance of the 43 582 offer shares, the company’s share capital is NOK 70 136 464.40, divided into 175 341 161 shares, each with a nominal value of NOK 0.40. TRADING IN THE KOMPLETT SHARE The average daily volume of Komplett shares traded on the Oslo Stock Exchange in 2022 was 0.13 million, equiv- alent to 0.07 per cent of the total number of Komplett shares issued that year. The share closed at NOK 14.44 on 31 December 2022. The highest closing price was NOK 71.72 and the lowest clos- ing price was NOK 13.42. Komplett’s market capitalisation was NOK 2.53 billion at 31 December 2022. OUR DIVIDEND POLICY The group has a policy of distributing 60-80 per cent of net prot as annual dividend adjusted for one-offs and special items but expects no dividend to be paid for the nancial year 2022. SHARE BUYBACKS At the annual general meeting in 2022, the board of direc- tors was granted an authorisation, on behalf of the com- pany, to acquire Komplett shares with a total nominal value equal to 10 per cent of the company’s share capital at the time the authorisation was granted. The authorisation is valid until the company’s annual gen- eral meeting in 2023, but no longer than 30 June 2023. The authorisation was not used in 2022, and the company owns no treasury shares at year-end 2022. VOTING RIGHTS Komplett has one class of share, and each share carries one vote. Shareholders are entitled to vote for the number of shares they own. The shares must be registered in the Norwegian Central Securities Depository (VPS) at the date of the general meeting. KOMPLETT ASA ANNUAL REPORT 2022 10 KOMPLETT IN BRIEF SHAREHOLDERS At 31 December 2022, Komplett had 3 288 shareholders. The top 20 shareholders own 93 per cent of the shares. Top 20 shareholders at 31 December 2022: Name Holding Stake Type of account 1 Canica Invest AS 74 376 317 42.43% Ordinary 2 SIBA Invest AB 55 581 404 31.71% Ordinary 3 Verdipapirfondet Alfred Berg Gambak 5 532 206 3.16% Ordinary 4 The Bank of New York Mellon 4 398 418 2.51% Nominee 5 The Bank of New York Mellon 3 331 182 1.90% Nominee 6 The Northern Trust Comp, London 3 300 000 1.88% Nominee 7 Verdipapirfondet Holberg Norge 2 100 000 1.20% Ordinary 7 Verdipapirfondet Holberg Norden 2 100 000 1.20% Ordinary 9 Morgan Stanley & Co. Int. Plc. 1 887 234 1.08% Nominee 10 Sole Active AS 1 883 646 1.07% Ordinary 11 Wenaasgruppen AS 1 273 370 0.73% Ordinary 12 Verdipapirfondet Storebrand Norge 1 174 943 0.67% Ordinary 13 BNP Paribas 1 162 340 0.66% Nominee 14 Verdipapirfondet Pareto Investment 1 145 000 0.65% Ordinary 15 Citibank, N.A. 910 735 0.52% Nominee 16 UBS Europe SE 898 359 0.51% Nominee 17 Strømstangen AS 713 539 0.41% Ordinary 18 Vineberg Invest AS 713 538 0.41% Ordinary 19 Nian AS 685 625 0.39% Ordinary 20 UBS AG 618 057 0.35% Nominee Total top 20 163 785 913 Total number of shares 175 297 579 FINANCIAL CALENDAR: Date Event 27 April 2023 Q1 2023 reporting 9 May 2023 Annual general meeting 20 July 2023 Q2 2023 reporting 26 October 2023 Q3 2023 reporting SHARE PRICE DEVELOPMENT: Scan the QR-code for access to the share price development. ANALYST COVERAGE: Firm Contact Phone Email ABG Sundal Collier Petter Nystrøm +47 22 01 61 35 [email protected] DNB Ole Martin Westgaard +47 24 16 92 98 [email protected] Pareto Joachim Huse +47 24 13 21 07 [email protected] SEB Håkon Fuglu +47 21 00 85 49 [email protected] KOMPLETT ASA ANNUAL REPORT 2022 11 KOMPLETT IN BRIEF KOMPLETT ASA ANNUAL REPORT 2022 12 BUSINESS SEGMENTS BUSINESS SEGMENTS: | BUSINESS TO CONSUMER (B2C) The Komplett Group’s operations in the B2C segment cover sales to private consumers across Norway, Sweden and Denmark through the brands Komplett, NetOnNet and Webhallen. The group serves the private consumer market for electron- ics, technology products and consumer goods through six online shops, selling products sourced from third-party brands and its own private labels. Komplett serves its B2C customers on the platforms Komplett. no, Komplett.se and Komplett.dk. Komplett also operates two pick-up points, one in Oslo and one at the warehouse in San- defjord. Webhallen is an omnichannel provider within consumer electron- ics, with the online platform Webhallen.com and 17 retail stores and pick-up points in Sweden, located strategically around Stock- holm and bigger cities in Sweden. NetOnNet has two online shops in Sweden and Norway, NetOnNet. se and NetOnNet.no, and a total of 30 complementary self-service, logistics and warehouse shops located in Sweden and Norway. The combination of the Komplett Group and NetOnNet was suc- cessfully completed on 4 April 2022. For accounting purposes, NetOnNet has been consolidated into the company’s nancial statements with effect from 1 April 2022 and is reported as part of the B2C segment from this date. The Komplett Group began its operations in the B2C segment in Norway in 1996. 22% B2B 11% 67% NOK 9.8 billion 20222021202020192018 REVENUES 4 882 4 523 Revenues (NOK million) Gross margin (%) 6 142 6 382 9 785 15.1% 13.4% 12.9% 15.4% 13.6% 20222021202020192018 EBIT 22 (72) EBIT (NOK million) EBIT margin (%) 194 230 12 0.4% (1.6%) 0.1% 3.2% 3.6% 20222021202020192018 OPERATINGCOST 12.9% 14.5% Per cent of revenue 11.9% 11.8% 13.5% KOMPLETT ASA ANNUAL REPORT 2022 13 BUSINESS SEGMENTS KOMPLETT ASA ANNUAL REPORT 2022 14 BUSINESS SEGMENTS BUSINESS SEGMENTS: | BUSINESS TO BUSINESS (B2B) Komplett B2B is an online player market for corporate customers in the Nordics focusing on the small and medium sized enterprises and small oce/home oce segments. Komplett B2B offers its customers a fully digital cus- tomer journey through its web shops Komplettbedrift. no and Komplettforetag.se and serving the Norwegian and Swedish market, respectively. The Komplett Group further expanded its operations in the B2B segment during 2021 through the acqui- sition of Ironstone, which is a pure cloud technology company offering IT services to corporate custom- ers that complement traditional hardware purchases. Ironstone was consolidated into the group’s opera- tions from 1 September 2021, and its operations are reected in the B2B segment reporting from this date. The Komplett Group began its operations in the B2B market in Norway in 2002. 22% B2C 67% 11% NOK 1.6 billion 20222021202020192018 REVENUES 1 125 913 Revenues (NOK million) Gross margin (%) 1 286 1 528 1 615 17.1% 18.0% 17.0% 15.5% 15.4% 20222021202020192018 EBIT 48 66 EBIT (NOK million) EBIT margin (%) 109 146 116 5.3% 5.9% 8.5% 9.6% 7.2% 20222021202020192018 OPERATINGCOST 10.1% 9.6% Per cent of revenue 8.6% 8.4% 9.9% KOMPLETT ASA ANNUAL REPORT 2022 15 BUSINESS SEGMENTS KOMPLETT ASA ANNUAL REPORT 2022 16 BUSINESS SEGMENTS BUSINESS SEGMENTS: | DISTRIBUTION The Komplett Group began its operations in the distribution segment in 1999. The group’s activities in the distribution segment consist of large-scale distribution contracts for sale to resellers and other big entities not covered by B2B, which are operated under the Itegra brand and its own platform. Itegra is present in Norway and Swe- den and serves its customers through the websites Itegra.no and Itegra.se, respectively. The Komplett Group began its operations in the Distribution segment in Norway in 1999. B2B 11% B2C 67% 22% NOK 3.2 billion 20222021202020192018 REVENUES 1 522 1 263 Revenues (NOK million) Gross margin (%) 2 426 3 124 3 207 5.4% 6.2% 6.8% 7.6% 7.5% 20222021202020192018 EBIT (9) 11 EBIT (NOK million) EBIT margin (%) 51 79 63 (0.7%) 0.7% 2.1% 2.5% 2.0% 20222021202020192018 OPERATINGCOST 8.2% 6.8% Per cent of revenue 4.8% 3.7% 3.4% KOMPLETT ASA ANNUAL REPORT 2022 17 BUSINESS SEGMENTS JO OLAV LUNDER Chair since 2022, not independent Jo Olav Lunder (born 1961) has more than 25 years of broad directorial and exec - utive experience from multiple private and public companies within telecom - munications, IT services, business solu- tions, and e-commerce. Lunder has held positions such as COO of Telenor Mobile AS, CEO of Ementor ASA, Presi - dent of Ferd Capital, CEO of Vimpelcom Ltd and CEO of John Fredriksen group. Lunder currently holds board positions in various companies, including as chair of Elopak ASA, Axxelerator Capital AS, Element Logic Holding AS, Swoosh group AB, Oleter group AB, DeepOcean group Holding AS, BUS AS, and Cigalep AS and director of Canica AS and Sten - shagen Invest AS. He also served as a board director of Komplett ASA from 2018 until 4 April 2022. Lunder has an MBA from Henley Business School, and a bachelor’s degree from Oslo Business School. He is a Norwegian citizen, cur - rently residing in Norway. Jo Olav Lunder is not independent of the company’s main shareholder, Can- ica Invest AS. Lunder and related parties held 391 777 shares in Komplett ASA at 01.03.2023. Lunder attended 10 of 11 board meet- ings in 2022. JENNIFER GEUN KOSS Director since 2020, independent Jennifer Geun Koss (born 1977) is a founding partner of Springbank Collec - tive, a venture fund investing in com- panies building tools, products and services that disproportionately bene - t women across the themes of Career, Care and Household Consumer. She is also the founder of the retail agency BRIKA, which was acquired by the expe - riential commerce agency Salt XC. Prior to her current roles, she has had shorter engagements with the investment banks JP Morgan and Goldman Sachs, and has worked as a management con - sultant at The Parthenon group and The Bridgespan group, as well as a private equity investor at Ontario Teachers’ Pri - vate Capital as both a general partner and a limited partner. Koss holds various board positions, including Dream Unlim - ited (publicly listed on the Toronto Stock Exchange), Active Brands AS and Møller Eiendom Holding AS. Koss has an MBA from Harvard Business School, an MPhil from the University of Oxford and an A.B. from Harvard University. She is a US and a Canadian citizen, currently residing in Norway. Koss and related parties held 4 166 shares and no options in Komplett ASA at 01.03.2023. Koss attended 13 of 15 board meetings in 2022. LARS BJØRN THORESEN Director since 2019, independent Lars Bjørn Thoresen (born 1970) has sev- eral years of directorial experience from service as chair and director of various private and public companies. He cur- rently serves in boards for companies such as Kristian Gerhard Jebsens Red- eri, LER Invest, Ragde Partner Invest, LT Invest AS and numerous Verdane related portfolio companies both in Norway and internationally. Thoresen is also board advisor to Nordic Investment Opportuni- ties AS and CEO of the investment com- pany LT Invest. Thoresen has, for a period of over 20 years, held various manage- rial positions since he was part of the founding team of the private equity rm Verdane Capital, where he also served as managing partner from 2008 until 2016. Prior to joining Verdane, Thoresen worked at Braxton Associates in London, UK, and Deloitte Consulting. Thoresen has a bachelor of science from St. John’s University, and an MBA from INSEAD. He also serves on the board of directors of INSEAD Alumni Norway. He is a Norwe- gian citizen, currently residing in Norway. Thoresen serves the role as chair of the audit committee in Komplett. Thoresen and related parties held 378 646 shares in Komplett ASA at 01.03.2023. Thoresen attended 14 of 15 board meet- ings in 2022. | BOARD OF DIRECTORS KOMPLETT ASA ANNUAL REPORT 2022 18 THE BOARD OF DIRECTORS SARAH C. J. WILLAND Director since 2021, independent Sarah C. J. Willand (born 1977) took up the position as CEO of Cappelen Damm in February 2023. Prior to that, she was director for marketing, com- munication, and organisation at TV 2, and has previously held management positions at Egmont Publishing and Geodata AS, and worked as a consult- ant at Centre for Corporate Diversity. Willand also holds various board posi- tions at companies such as Cappelen Damm AS, Mediebedriftenes Lands- forening, and the Norwegian Opera & Ballet. Willand has a master of sci- ence in business and an executive master of management from the Nor- wegian Business School (BI). She is a Norwegian citizen, currently residing in Norway. Willand serves the role as chair of the remuneration committee in Komplett. Willand and related parties held no shares in Komplett ASA at 01.03.2023. Willand attended 13 of 15 board meet- ings in 2022. FABIAN BENGTSSON Director since 2022, not independent Fabian Bengtsson (born 1972) has extensive experience in retail and e-commerce as the former CEO of SIBA AB from 2001 to 2015 and with several positions and directorships within the SIBA Invest group from 1987. He is the current chair of SIBA Invest AB and CEO of SIBA Fastigheter AB, a real estate company. He is also member of the board of Axfood AB and chair of the Swedish federation of Business Owners (Företagarna AB). Bengtsson has served as the for- mer chair of NetOnNet from 2012 to 2015 and as a director of the board at NetOnNet, prior to the combination with Komplett. He holds a bachelor of science in business and econom- ics from Lund University, Sweden. Bengtsson is a Swedish citizen, cur- rently residing in Sweden. Fabian Bengtsson is not independent of the company’s large shareholder SIBA Invest AB. Bengtsson and related parties indi- rectly held 55 581 404 shares in Kom- plett ASA at 01.03.2023. through his ownership of approximately one third of the votes and shares in SIBA Invest. Bengtsson attended 12 of 12 board meetings in 2022. NORA ELIN ELDÅS Worker director since 2021, independent Nora Elin Eldås (born 1995) joined the group in 2016 as a salesperson at Webhallen AB in Täby, Sweden. Eldås currently holds the position as prod- uct manager at Webhallen. She is also a part of Webhallen Loyalty Strategy Force Club, where she works in a team with the development of Webhal- len’s website loyalty program. Prior to this, Eldås has held various positions within the service industry. She has experience as a waitress in the res- taurant industry, and experience with health care for elderly people. She is a Swedish citizen, currently residing in Sweden. Eldås and related parties held no shares in Komplett ASA at 01.03.2023. Eldås attended 12 of 15 board meet- ings in 2022. Continues on next page > KOMPLETT ASA ANNUAL REPORT 2022 19 BOARD OF DIRECTORS ANDERS ODDEN Worker director since 2019, independent Anders Odden (born 1978) joined the group in 2007 as Nordic product man- ager for PC components. Odden cur- rently holds the position as a sales director in the group, and he has also worked as a sales manager in the group. Odden has experience as a sales manager and key account man- ager in various companies within the electronics industry. Odden holds a bachelor of science in management from the Norwegian Business School (BI). He is a Norwegian citizen, cur- rently residing in Norway. Odden and related parties held 8 333 shares and 11 411 options in Komplett ASA at 01.03.2023. Odden attended 14 of 15 board meet- ings in 2022. CARL ERIK HAGEN Board observer since 2022, not independent Carl Erik Hagen (born 1988) currently works in the nancial investment arm of Canica AS, which is part of Canica International. He holds board posi- tions in Canica AS and Brandbassa- dor AS. He has studied Business and Entrepreneurship at the International University of Switzerland, Business Studies at Marymount Manhattan Col- lege, and impact investing at Harvard Business School. He is a Norwegian citizen, currently residing in Swit- zerland. Hagen has held the position as observer at the board since 2022, but has held the positions as dep- uty board director and board director since 2013, thus having a longer con- nection to the group’s operations than what his position as board observer is associated with. Carl Erik Hagen is not independent of the company’s main shareholder, Canica Invest AS. Hagen and related parties held no shares and no options in Komplett ASA at 01.03.2023. Hagen attended 10 of 12 board meet- ings in 2022. ROLAND VEJDEMO Board observer since 2022, not independent Roland Vejdemo (born 1957) has served as the chair of NetOnNet since 2015, as well as the chair of the remu- neration committee. Vejdemo has extensive experience from the IT industry, as the former CEO of Com- paq Computer AB and Hewlett Pack- ard AB from 2001 to 2010, and through his board directorship in Avensia AB. Vejdemo holds a master’s degree in business and economics from Stock- holm University. He is a Swedish citi- zen, currently residing in Sweden. Roland Vejdemo is not independent of the company’s large shareholder SIBA Invest AB. Vejdemo and related parties held no shares in Komplett ASA at 01.03.2023. Vejdemo attended seven of nine board meetings in 2022. KOMPLETT ASA ANNUAL REPORT 2022 20 THE BOARD OF DIRECTORS KOMPLETT ASA ANNUAL REPORT 2022 21 THE BOARD OF DIRECTORS JAAN IVAR SEMLITSCH Chief executive ocer (CEO) Jaan Ivar Semlitsch joined the group as CEO in February 2023. Jaan Ivar was previously the CEO of Orkla ASA from 2019 to 2022. After that, he ran his own consulting business, Scilla AS. Prior to joining Orkla, Semlitsch was the CEO of Elkjøp Nordic, where he joined in 2013. During this period, he was also the managing director of Dix- ons Carphone International, managing all operations outside the UK. Sem- litsch also has extensive experience in grocery and consumer goods as CEO of REMA Industrier and from various companies in Scandinavia and the UK during his six years as a consultant at McKinsey & Company. Semlitsch holds a Master of Business Econom- ics (Siviløkonom) from the Norwegian School of Economics (NHH). He is a Norwegian citizen, residing in Norway. Semlitsch and related parties held 125000 shares and 500000 options in Komplett ASA at 01.03.2023. SUSANNE HOLMSTRÖM Deputy CEO and managing director of NetOnNet Susanne Holmström joined the group as deputy CEO and managing direc- tor of NetOnNet in 2022. Holmström has served as the CEO of NetOnNet from 2018. Prior to joining NetOnNet, Holmström was the head of B2C at Trygg-Hansa and director in the board of directors of Bubbleroom and Skan- dia. She also held several leadership positions in Tele2. Holmström holds a master of science in international business from the University of Goth- enburg, Sweden. She is a Swedish cit- izen, currently residing in Sweden. Holmström and related parties held 48 shares in Komplett ASA at 01.03.2023. THOMAS RØKKE Chief nancial ocer (CFO) Thomas Røkke joined the group as CFO 1 March 2023. Since Decem- ber 2018, Thomas Røkke has held the position of group CFO of Saferoad based in Oslo, Norway. He has previ- ously held similar senior positions at FristadsKansas group (formerly Kwin- tet), headquartered in Sweden, and the Danish diversied food business Løgismose Meyers. Further, Røkke has broad international experience in both operational management posi- tions and strategy consulting. He holds a master’s degree in addition to a PhD in nance and accounting from the University of St. Gallen in Switzerland. He is a Norwegian citi- zen, currently residing in Denmark and Norway. Røkke and related parties held no shares in Komplett ASA at 01.03.2023. | GROUP MANAGEMENT KOMPLETT ASA ANNUAL REPORT 2022 22 GROUP MANAGEMENT ROGER SANDBERG Chief procurement ocer Roger Sandberg joined the group as chief procurement ocer in 2022, fol- lowing the completion of the combina- tion of NetOnNet and Komplett. He is one of the founders of NetOnNet and was the CEO of NetOnNet in 1999. Fur- ther, Sandberg has held the position as chief operating ocer of NetOn- Net from 2016 until April 2022, the position as interim CEO from May 2018 until November 2018 and the position as chief purchasing ocer from 2011 until 2016. Sandberg also has experi- ence from SIBA AB and has held the position as purchase manager from 2005 until 2012. He is a Swedish citi- zen, residing in Sweden. Sandberg and related parties held no shares in Komplett ASA at 01.03.2023. TRINE-LISE JENSEN Head of group supply chain/IT program Trine-Lise Jensen joined the group in 2019, as chief technical ocer (CTO). She served as chief infor- mation ocer (CIO) and chief oper- ating ocer (COO) since February 2020, before taking up the position as head of group supply chain/IT pro- gram in April 2022. Prior to joining the group, Jensen has held various CIO and COO positions in the retail and e-commerce industry, including CIO for Boots Norge and CIO/COO for Helly Hansen. She also has 13 years of experience from working with IT at Orkla. Jensen has a bachelor’s degree in management from the Norwegian Business School (BI). She is a Norwe- gian citizen, currently residing in Nor- way. Jensen and related parties held 102590 shares and 32668 options in Komplett ASA at 01.03.2023. KRISTIN HØDAL TORGERSEN Chief HR ocer Kristin Hødal Torgersen joined the group in 2021 as interim HR director, and has held the position as chief HR ocer since March 2022. Prior to this, Torgersen has held various manage- ment positions with Danske Bank and the position as CEO at Huseby Kjøkken and CEO at Neas ASA. She also has experience from Vital Eiendom, from various positions at Mars and as head of sales at Cinet AS. Kristin Hødal Torgersen holds a master of science in economics and business adminis- tration from Copenhagen Business School (CBS). She is a Norwegian citi- zen, currently residing in Norway. Torgersen and related parties held 11 835 shares in Komplett ASA at 01.03.2023. Continues on next page > KOMPLETT ASA ANNUAL REPORT 2022 23 GROUP MANAGEMENT ANDERS TORELL Managing director Webhallen Anders Torell joined the group in April 2022, and holds the position of man- aging director of Webhallen Sver- ige AB, a Swedish subsidiary of the group. Previous experience includes the position as managing director in Kronans Apotek as well as serving as chair or board director in his fam- ily-owned business mainly within mechanical equipment and services, with Smålandsstenars mekaniska Verkstad SMV Industrier AB as the parent company. He holds a master’s degree in mechanical engineering from Chalmers University of Technol- ogy in Gothenburg, Sweden. Torell is a Swedish citizen, currently residing in Sweden. Torell and related parties held 16 949 shares in Komplett ASA at 01.03.2023. ERLEND STEFANSSON Managing director B2B Erlend Stefansson joined the group in June 2022 as CEO for Ironstone and was appointed managing director B2B in February 2023. Prior to Komplett, he has held the position as Managing Director of Arcus’ Spirits Division for 9 years responsible for product development, marketing and sales of the group’s spirits brands globally. He was also responsible for Production in two years at Arcus’ facilities at Gjelleråsen Norway. Erlend held the position as group Director Sales in Ringnes AS (part of Carlsberg group) for four years. He was CEO of Spits ASA from 2006 to 2008, and has held several management positions in sales, retail development, marketing and com- munication. He has also three years’ experience as a management consult- ant in McKinsey & Co. Erlend holds a Master of Business Economics (Siviløkonom) with spe- cialisation in nance from BI Norwe- gian Business School. Stefansson and related parties held 50847 shares in Komplett ASA at 01.03.2023. KOMPLETT ASA ANNUAL REPORT 2022 24 THE BOARD OF DIRECTORS KOMPLETT ASA ANNUAL REPORT 2022 25 THE BOARD OF DIRECTORS KOMPLETT ASA ANNUAL REPORT 2022 26 THE BOARD DIRECTORS' REPORT BOARD OF DIRETORS’ REPORT 2022: | ATTRACTIVELY POSITIONED FOR THE LONG-TERM: PERFORMANCE IN 2022 HAMPERED BY CHALLENGING MARKETS In 2022, the group succeeded in strengthening its market position through the combination with NetOnNet, where synergy realisation is progressing as planned. Financial performance for the year was impacted by challenging market conditions for online retail across the Nordics. Revenue for the year came in at NOK 14.6 billion, corresponding to a 32.4 per cent growth from the year before, driven by the acquisition of NetOnNet. Adjusted EBIT came in at NOK 87 million, compared with NOK 388 million one year earlier. Even in a challenging market environment, the group maintained its industry- leading cost position, secured new nancing facilities and successfully reduced excess inventory. Going into 2023, the top line continues to be impacted by a challenging market while a more positive trend is expected on the gross margin. In 2022, the market experienced a signicant decline in demand following historically strong sales in 2020 and 2021. This led to a situation where many industries were left with excess inventories due to high level of incoming goods and lags in the supply chain. One of the key rea- sons for this decline was the shift in consumer behav- iour, with many customers opting to return to physical stores and shopping malls, rather than continuing to shop online as they had been doing during the Covid-19 pandemic. This shift in consumer behaviour also led to an increase in spending on services such as travel, res- taurants, and other social activities. The consumer elec- tronics industry was particularly hard hit by this trend, seeing a steeper decline in sales compared to other retail sectors. Despite these challenges, the company was able to main- tain good cost control, and reduce its operating expenses thanks to its scalable business model. This helped to mit- igate the negative impact on the company’s bottom line. Additionally, the company was able to reduce its inven- tory back to healthy levels, although this did come at the cost of a negative impact on gross margin. In 2022, the Komplett Group doubled its market size fol- lowing the strategic acquisition of NetOnNet. Komplett and NetOnNet are both recognised for their scalable business models and cost leadership positions and share a strong track record of protable growth and market share gain. The transaction is expected to enable reali- sation of cost synergies, mainly related to sourcing, of at least NOK 200 million on an annual basis with expected full effect within the rst quarter of 2024. Komplett has also strengthened its nancial position in 2022 with a private placement of new shares in the amount of NOK 1 billion and new credit facilities. The company used the proceeds to partly repay a bridge loan obtained for the acquisition of NetOnNet and replaced its existing loan facilities. At the end of the year, the com- pany had a strong liquidity reserve and good liquidity. In terms of nancial gures, the company saw an increase in sales in 2022 compared to 2021, driven by the inclusion of NetOnNet from 1 April 2022. Excluding the contribution from NetOnNet, sales for 2022 decreased by 10.9 per cent from the previous year due to the decline in the market and the shift in consumer behaviour. The company’s gross margin also saw a decline in 2022, down to 12.3 per cent, compared to 13.2 per cent in 2021. This decrease was a result of inventory reductions in combination with weaker markets which led to tougher competition and price pressure across the industry. Despite the underlying decrease in sales and gross mar- gin, the company was able to maintain a positive EBIT of NOK 6 million in 2022, compared to NOK 369 million in 2021. This was a result of the efforts to control costs and reduce operating expenses. Prot for the year was neg- ative NOK 32 million, a decrease from NOK 300 million in 2021. The decrease was due to the volume decline and KOMPLETT ASA ANNUAL REPORT 2022 27 THE BOARD DIRECTORS' REPORT reduced gross margin. The company expects market demand to remain chal- lenging into 2023, which will impact top line growth. A positive trend in gross margin was reported towards the end of the year 2022 and, supported by synergy extrac- tion from the NetOnNet acquisition and continued strong cost control, the company believes it will be well posi- tioned for further gross margin improvements. In the longer term, the company will continue to benet from the long-term growth in online sales and its scalable, multi-segment business model. OVERVIEW OF THE BUSINESS The board of directors’ report for Komplett Group (“Kom- plett” or “the group”) encompasses Komplett ASA (“the parent company” or “the company”) with subsidiaries in Norway and Sweden. Business concept and location Komplett ASA is a public limited liability company organ- ised and existing under the laws of Norway pursuant to the Norwegian Public Limited Companies Act. The shares of Komplett ASA are listed on Oslo Børs with the stock ticker KOMPL. Komplett is the leading online-rst player in the e-com- merce segment for electronics and IT-products in the Nordic region. The group is headquartered in Sandefjord, Norway. The group has oces at Lysaker, Norway and in Borås (NetOnNet), Stockholm and Gothenburg to serve the Swedish and Danish markets. The group has an ecient and central fullment set-up based on its warehouses in Sandefjord, Stockholm, and Borås. The group has also a purchase oce in located in Dongguan, China, which also functions as a developer of NetOnNet’s private label products. Komplett offers a broad range of products and services within categories such as components, gaming, brown goods, peripherals, white goods & home, handheld & accessories and PC for consumers, the business market and the public sector. The online-rst concept implies that products are sold mainly through online channels supplemented with physical retail stores. Ten different web shops consti- tute the main sales channel together with 17 physical retail stores in Sweden under the Webhallen brand. The group also has local presence throughout Sweden and Norway with 30 NetOnNet warehouse shops, of which 27 are located in Sweden, and three are located in Nor- way. Komplett.no also operates two pick-up points in Norway, one in Oslo and one at the warehouse in San- defjord. The business model is ecient and scalable, supporting cost leadership and enabling a competitive product offering. The vision of Komplett is to be the «the obvious choice» for its customers, suppliers, employees and investors through competitive prices, great customer service, e- cient supply chain and being the sole link between the producers and the end customers. The group has industry-leading customer satisfaction, a loyal and growing customer base, strong brands with a long heritage and high awareness, and a strong company culture driven by tech enthusiasts. Business segments The business is organised in three business segments: The "B2C" (consumer market) segment comprises the brands Komplett, NetOnNet and Webhallen and repre- sented 67 per cent of group revenues in 2022 The "B2B" (business to business) segment operates under the brands Komplett Bedrift, Komplett Företag and Ironstone, and accounted for 11 per cent of group revenues in 2022 The "Distribution" segment includes the Itegra brand and accounted for 22 per cent of group revenues in 2022 The group has B2C operations in Norway, Sweden and Denmark, while the B2B and Distribution operations are mainly in Norway, although with small-scale operations in Sweden. In addition to the business segments mentioned above, the company operates with two segments on group level. The "Other" segment represents group costs not allo- cated to the business segments. Typical cost elements under this segment include management costs and group strategic initiatives. The different effects of "IFRS 16" (International Financial Reporting Standards) are not part of the operational measures and are excluded from the business segments. Market presence and position The competitive landscape for e-commerce implies global competition for all players. Komplett focuses on local customers in Norway, Sweden and Denmark. Busi- ness in Norway accounts for 50 per cent of group reve- nues, Sweden 48 per cent and Denmark 2 per cent. On 9 February 2022 the company announced that an agreement for the acquisition of Net-On-Net had been entered into, and the completion of the transaction was announced on 4 April 2022. The combined company cre- KOMPLETT ASA ANNUAL REPORT 2022 28 THE BOARD DIRECTORS' REPORT ates an even stronger player as the leading online-rst electronics platform in the Nordic area. Komplett and NetOnNet are both attractively positioned in the large and structurally growing Nordic electronics and IT-prod- ucts market and they benet further from the growth impact of accelerating online migration. The aggregated market share in the Nordic area is estimated to be in the level of 10 per cent, approximately double that of the respective companies’ estimated market shares prior to the combination. Komplett and NetOnNet combined is the largest online-rst electronics platform in the Nor- dic area. Komplett and NetOnNet are both recognised for their scalable business models and cost leadership positions and share a strong track record of protable growth and market share gain. NetOnNet also contrib- utes with an extensive portfolio of own brands enabled by a local purchasing presence in China since 2005. Building on their complementary market positions and strengths, Komplett and NetOnNet will be even better positioned together to deliver a market leading online shopping experience to their customers. The group’s market share varies between the differ- ent segments and markets, with a particularly strong position in the B2C segment (Komplett, NetOnNet and Webhallen). Komplett is also well positioned in the B2B segment (Komplett Bedrift, Komplett Foretag, and Iron- stone) and in long term and large-scale distribution contracts through the Itegra brand. The group has a sig- nicant competitive edge through superior customer satisfaction, a very ecient logistics operation shared between all three segments and lower costs than most business peers. Komplett is well-positioned to continue benetting from a large structurally growing electronics and IT-products market driven among other by continued technology development and product innovation. As an online-rst | KOMPLETT AND NETONNET COMBINED IS THE LARGEST ONLINE-FIRST ELECTRONICS PLATFORM IN THE NORDIC AREA. KOMPLETT ASA ANNUAL REPORT 2022 29 THE BOARD DIRECTORS' REPORT retailer the group benets from an increasing preference among consumers for online shopping and introduction of exible and convenient delivery solutions. Strategy In 2018, Komplett launched its back to core strategy and went back to the roots as an online-rst retailer of elec- tronic goods and services. As an online-rst player, the group has been able to optimise its e-commerce plat- form without balancing resources and compromising against a physical retail offering and strategy. As a result, Komplett is attractively positioned in the large and struc- turally growing Nordic electronics and IT-products mar- ket and benets from the growth impact of increasing preference for online trade. Komplett operates an ecient and scalable business model which has given rise to its cost leadership position and enables an attractive and competitive product offer- ing. Komplett is deeply committed to delivering best in class customer experience supported by competitive prices, attractive delivery options and payment solutions, and sustainable business concepts. Komplett’s strategy is built on ve pillars: 1. Maintain a superior cost position The Komplett Group has an industry-leading cost posi- tion compared to peers and it considers its ability to continuously improve its cost position as a key lever for future success in the Nordic electronics goods market. Komplett Group has seen a particularly strong develop- ment in its product margin over the last years, and sees clear potential to improve margins further from contin- ued supplier cooperation and negotiations. NetOnNet has seen signicant contributions from its own brands and sees clear potential to drive further improvement in this area for the combined group. Furthermore, the combi- nation of the Komplett Group and NetOnNet is expected to realise signicant synergies within purchasing. This is expected to further increase the cost competitiveness of the group going forward. 2. Next-generation supply chain and IT as a growth enabler The Komplett Group has planned investments into sup- ply chain and IT systems over the coming years, which are expected to facilitate long-term growth and improved operational eciency for the group. While the group’s warehouse in Sandefjord has capacity to absorb up to approximately twice its current volume on the current infrastructure, the warehouse in Stock- holm has potential to improve operations from increased automation. NetOnNet’s central warehouse facilities and supply chain have also been under review with plans for upgrades over the coming years. When implementing any supply chain and IT initiatives, such could lead to oper- ational disruptions, and the group would need to handle the challenge of implementing such updates while main- taining focus on its day-to-day business. Even though NetOnNet and the rest of the group have separate project teams to drive the planning and imple- mentation of new supply chain and IT set-up, the group is in a process of optimising the businesses, including coor- dinating its platforms and logistics. The group will look at the combined supply chain and IT systems, and how to best facilitate long-term growth and eciency for the combined company. 3. Sustainability in everything we do Sustainability is a key theme for the group, and it is seen as instrumental to support a long-term viable busi- ness model, as sustainability is becoming increasingly important among consumers, investors, sharehold- ers, employees and regulators. Within sustainability, the group’s strategy focuses on circularity, inclusiveness, environmental footprint and sustainable products. Read more about these topics in the Sustainability report on page 48. 4. Brand improvement and innovation A focus for the group is also to continuously improve its customer experience, product offering and go-to-market strategy, to secure growth and strengthening of its mar- ket position. As part of improving the customer experi- ence and product offering, the group sees clear potential to launch services such as subscription model for prod- ucts, home installation support and PC support, as well as initiatives that will be implemented within customer care to replace customers’ in-store needs. This will add recurring revenue, allow customers to have access to the latest technology in a sustainable manner and improve convenience for customers. The group plans to expand its successful private label and the "Komplett PC" offer- ing, as well as improving its broader own brand offer- ing through leveraging NetOnNet’s capabilities within the area. Given the group’s strong track record in intro- ducing adjacent products to its core offering, the group seeks to continue to launch new product groups and expand its product categories as a key strategic priority. To increase customer retention, customer life-time value and reduce customer acquisition costs, the group will also work actively with campaigns, digital marketing and personalisation to create an even better customer expe- rience, putting customers at the centre of the group’s daily operations. KOMPLETT ASA ANNUAL REPORT 2022 30 THE BOARD DIRECTORS' REPORT 5. Accelerate growth with M&A opportunities There is a strong rationale behind driving consolidation within B2C electronic goods in the Nordics and the group will consider proceeding with M&A opportunities. The company believes that acquisitions could have the poten- tial to further strengthen the group’s position in the Nor- dic electronics market and allow the group to leverage further on its track record of realising synergies across brands to create value. It would also offer potential syn- ergies on purchasing back-oce functions and from cross selling of the group’s private label products. M&A could also be used to accelerate the group’s sustainabil- ity strategy, particularly within circularity, which is a key theme for the group today. The company’s acquisitions of NetOnNet and Ironstone demonstrates the ability to nd M&A opportunities and provide an attractive offering to potential targets. Fur- ther, the transaction demonstrates the clear rationale behind consolidating in this industry, with substantial synergies identied through thorough analysis. KOMPLETT ASA ANNUAL REPORT 2022 31 THE BOARD DIRECTORS' REPORT | OUR 2025 BUSINESS STRATEGY IS BUILT ON FIVE STRATEGIC PILLARS; ONE OF THESE IS TO PROMOTE SUSTAINABILITY IN EVERYTHING WE DO. 5. Accelerate growth with M&A 1. Maintain superior cost position 3. Sustainability in everything we do FINANCIAL REVIEW (All gures in brackets refer to the corresponding period or balance date in 2021, unless otherwise specied) The following nancial review is based on the consol- idated nancial statements of Komplett ASA and its subsidiaries. The statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU as well as the Nor- wegian accounting legislation. In the view of the board, the statement of prot and loss, the statement of nancial position, the statement of cash ows, the statement of changes in equity and the accompanying notes provide satisfactory information about the operations, nancial results and position of the group and the parent company at 31 December 2022. Statement of prot and loss Total operating revenue was NOK 14 618 million in 2022, corresponding to an increase of 32.4 per cent compared with NOK 11 043 million in 2021. NetOnNet has been con- solidated into the gures from 1 April 2022 and contrib- uted NOK 4 784 million. Excluding the contribution from NetOnNet, the group’s revenue decreased by 10.9 per cent mainly due to the challenging market conditions for the B2C segment across the Nordics. Cost of goods sold was NOK 12 824 million in the full year, compared with NOK 9 581 million in 2021. NetOn- Net accounted for NOK 4 098 million of the total cost of goods sold in 2022. The gross margin decreased from 13.2 per cent in 2021 to 12.3 percent in 2022, and was neg- atively impacted by price pressure in the industry and efforts to reduce inventory for the group. Softer demand has led to inventory build-up across the industry result- ing in tougher competition, higher campaign activity and increased price pressure. Employee benet expenses were NOK 820 million for the year, compared to NOK 511 million in 2021. NetOnNet accounted for NOK 332 million of the employee benet expenses in 2022. Depreciation and amortisation totalled NOK 256 mil- lion, of which NOK 35 million is related to amortisation of acquired customer value. Other operating expenses were NOK 712 million in the full year compared with NOK 453 million in 2021. The increase was driven by operating expenses from NetOnNet of NOK 216 million. The operating result (EBIT) for the full year amounted to NOK 6 million, compared with a prot of NOK 369 million in the full year of 2021. The EBIT included a positive con- tribution of NOK 43 million from NetOnNet. Net nancial items in the full year totalled a negative NOK 104 million, compared with a negative NOK 22 million in the same period last year. The increase is driven by NOK 41 million in interest costs related to the bridge facility. Tax income was NOK 56 million in the full year, compared with a tax expense of NOK 48 million in 2021. A tax deduc- tion of NOK 47 million has been recognised related to losses from Marked Gruppen for previous years. Prot from discontinued operations was NOK 10 million net of tax. The full amount is explained by a repayment of a supplier guarantees from the bankruptcy estates of the former subsidiaries Comtech GmbH and JES Computer GmbH (Comtech group). Prot for the period came in at negative NOK 32 million, compared with a prot of NOK 300 million in the full year last year. NetOnNet represented a prot of NOK 22 million and Ironstone reported a loss of NOK 6 million for the period. The results in NetOnNet were impacted by decline in rev - enues and pressure on gross margins, while Ironstone in 2022 focused on building the platform for future growth. Statement of cash ows Cash ow from operating activities amounted to a positive NOK 1 102 million (NOK 65 million), of which prot for the year had a negative impact of NOK 86 million. The positive cash ow from operations was driven by inventory reduc- tions of NOK 686 million and reduction in trade receivables of NOK 421 million, of which NOK 380 million was derived from factoring, while reduced trade payables had a nega- tive impact of NOK 149 million. In total, changes in net core working capital had a positive effect of NOK 958 million. Depreciation and amortisation contributed with an addi- tional NOK 256 million. Cash ow used in investing activities amounted to NOK 1701 million, compared with NOK 114 million in the same period last year. The cash ow used in investing activities was driven by the NetOnNet acquisition. Cash ow from nancing activities amounted to NOK 706 million in the full year, an increase from NOK 36 million in the same period last year. The increase was driven by the private placement in the fourth quarter. Statement of nancial position and liquidity Non-current assets amounted to NOK 4 487 million at the end of the full year of 2022, including NOK 416 million related to NetOnNet, compared with NOK 971 million at the end of last year. The additions were related to good- will adjustment of NOK 1 699 million and NOK 1 355 million in other intangible assets. Current assets amounted to NOK 3 046 million at the end of the year, compared with NOK 2 498 million in the same KOMPLETT ASA ANNUAL REPORT 2022 32 THE BOARD DIRECTORS' REPORT period last year. Current assets at the end of Decem- ber 2022 included NOK 1 250 million from NetOnNet, of which inventory in NetOnNet represented NOK 948 mil- lion. Excluding NetOnNet, current assets were reduced by NOK 703 million in 2022. Total cash and cash equivalents amounted to NOK 149 million at the end of the full year 2022 versus NOK 41 mil- lion over the same period last year. Equity amounted to NOK 3 496 million at the end of the full year 2022, including NOK 488 million from NetOn- Net, compared with NOK 806 million in the same period last year. The increased equity was mainly driven by increased share premium from the issuance of 35 242 424 new shares to SIBA Invest in April as part of the set- tlement of the NetOnNet transaction and the issuance of 67 800 000 new shares in November and December 2022. The share capital of Komplett ASA at 31 December 2022 was NOK 70 119 031.60, divided into 175 297 579 shares, each with a nominal value of NOK 0.40. Total liabilities amounted to NOK 4 037 million at the end of the full year 2022, of which NetOnNet accounted for NOK 1 177 million, compared with NOK 2 663 million in the same period last year. The main driver was increased bank overdraft and trade payables. Total equity and liabilities amounted to NOK 7 533 million at the end of the full year 2022, including NOK 1 666 mil- lion from NetOnNet, compared with NOK 3 469 million in the same period last year. Financing and capital structure Komplett has strengthened its nancial position in 2022, and liquidity is good. In November and December 2022 the company com- pleted a private placement of 67 800 000 new shares in the company at a subscription price of NOK 14.75 per share raising gross proceeds of NOK 1 000 050 000. The company also secured a new revolving credit facility in the amount of NOK 1 300 million and an overdraft facility in the amount of NOK 400 million (increased to NOK 500 million in Q4 each year). The new loan facilities replaced the company’s existing overdraft facilities of NOK 500 million, as well as its two existing revolving credit facili- ties of NOK 500 million and SEK 650 million. The company used the net proceeds from the private placement, a new factoring agreement and funds availa- ble under the new facilities to repay the NOK 1 500 million bridge loan, which was obtained in connection with the company’s combination with NetOnNet AB, announced 9 February 2022. The last repayment of NOK 500 million on the bridge loan was repaid after year-end. | IMPROVING OUR PACKAGING LINE When Komplett rst started to consider ways to improve the packaging line, it was clear that we wanted to address the amount of air delivered to customers. So, we put together an internal task force of logisticians and tech enthusiasts with the ambition to signicantly improve our pack- aging line and make it sustainable and t for the future. In 2022, our packaging line underwent a complete overhaul, and we are proud to see our efforts result in a packaging system that consid- ers our customers, employees, and the environ- ment. With the new packaging line in place, as many as 99 per cent of our orders leaving AutoStore are shipped without plastic. This has led to an annual 16–19-ton reduction in our use of plastic. We have also worked on using as little material as possible whilst ensuring a damage-free delivery, result- ing in a line consisting of three packaging boxes instead of ten. This has signicantly reduced the amount of air being shipped to customers and decreased the number of containers transport- ing our packages by 390 each year. Our new packaging line is an excellent testament to our commitment to customers and to operat- ing a sustainable and responsible business. KOMPLETT ASA ANNUAL REPORT 2022 33 THE BOARD DIRECTORS' REPORT At 31 December 2022, NOK 49 million of the credit facil- ities, NOK 476 million of the revolving credit facility and NOK 500 million of the bridge loan were utilised. Includ- ing available cash of NOK 149 million, the liquidity reserve was NOK 1 333 million at the end of 2022 compared with NOK 534 million one year earlier. The equity ratio was 46.4 per cent at the end of the year compared with 23.2 per cent at the end of 2021. Net interest-bearing debt at 31 December was NOK 876 million excluding IFRS 16 and NOK 1 434 million including IFRS 16. The leverage ratio (NIBD / LTM EBITDA) was 3.7x at the close of 2022. Comparable gures for the last year were a net interest-bearing debt including IFRS 16 of NOK 876 million, which gave a leverage ratio of 1.7x. SEGMENT INFORMATION The business is organised in three reporting segments: B2C, B2B and Distribution. Additional information about these segments can be found on page 12 of this annual report. B2C nancial review Comments below are based on reported gures, with NetOnNet included from 1 April 2022. In B2C, revenues increased due to the acquisition of NetOnNet. Excluding NetOnNet, revenues declined mainly as a result of more conservative consumer spending espe- cially in capital intensive categories, and temporary mar- ket saturation following the consumption peak during the Covid-19 pandemic. The share of online retail trade has also settled back in line with pre-pandemic trends but is expected to continue to grow in a long-term perspective. Operating revenues for the B2C segment were NOK 9 785 million in 2022, an increase of 53.3 per cent from 2021. NetOnNet has been consolidated into the gures from 1 April 2022 and contributed NOK 4 784 million. Without the contribution from NetOnNet, revenues declined 19.6 per cent in 2022. In local currency, the operations in Norway and Swe- den had a revenue decline of 17.9 per cent and a revenue growth of 139.6 per cent, respectively. Denmark, which represents approximately 2.5 per cent of the B2C sales volume, had a decline of 33.0 per cent. Gross prot was NOK 1 334 million, an increase from NOK 984 million in 2021. NetOnNet represented NOK 686 mil- lion of the gross prot in 2022. Gross margin decreased to 13.6 per cent in 2022 compared to 15.4 per cent in 2021. Without the contribution from NetOnNet, gross margin in 2022 was 13.0 per cent. Gross margin was negatively impacted by increased pricing pressure in the market and efforts to reduce inventory. Operating expenses was NOK 1 322 million in 2022, com- pared to NOK 754 million in 2021. NetOnNet represented NOK 626 million of the operating expenses in 2022. With- out the contribution from NetOnNet, operating expenses declined by 7.7 per cent i 2022, demonstrating the group’s cost ecient and scalable business model. Operating prot (EBIT) declined to NOK 12 million in 2022, down from NOK 230 million in 2021. NetOnNet contrib- uted NOK 59 million in 2022. The EBIT margin was 0.1 per cent in 2022, compared to 3.6 per cent in 2021. The decline is mainly due to lower sales volume and price pressure in the market. B2C Key gures: NOK million 2022 2021 Operating revenues 9 785 6 382 Gross prot 1 334 984 Gross margin (%) 13.6% 15.4% Operating expenses (ex dep) (1 259) (706) Depreciation and amortisation (64) (48) Total operating expenses (1 322) (754) Operating cost percentage (%) (13.5%) (11.8%) Operating prot (EBIT) 12 230 Operating prot (EBIT) margin (%) 0.1% 3.6% B2B nancial review The B2B segment has experienced lower demand from smaller businesses in the SME segment towards the end of the year, which are displaying similar behaviours to that of consumers in the B2C segment. Revenue growth was also negatively impacted by supply issues due to Covid-19 lockdowns in China with major constraints on Apple products. Operating revenues for the B2B segment was NOK 1 615 million in 2022, an increase of 5.7 per cent from 2021. In local currency, the operation in Norway delivered growth of 6.5 per cent, Sweden had a revenue growth of 4.2 per cent. Gross prot was NOK 276 million, compared with NOK 275 million in 2021. Gross margin decreased to 17.1 per cent in 2022 compared with 18.0 per cent in 2021. The margin decline is mainly a result of increased sales of lower mar- gin products and reduction of inventory. Operating expenses were NOK 160 million in 2022, up from NOK 129 million in 2021, the increase is mainly a result of the acquisition of Ironstone. Total operating expenses relative to the operating revenue increased from 8.4 per cent in 2021 to 9.9 per cent in 2022. KOMPLETT ASA ANNUAL REPORT 2022 34 THE BOARD DIRECTORS' REPORT Operating prot (EBIT) decreased to NOK 116 million in 2022, down from NOK 146 million in 2021. This gave an EBIT mar - gin of 7.2 per cent in 2022 compared to 9.6 per cent in 2021. In the third quarter of 2021 Komplett acquired 65.1 per cent of the shares in Ironstone Holding AS. Ironstone has been consolidated into the nancial statements as of 1 Septem - ber 2021. In 2022, Ironstone accounted for NOK 109 mil- lion of the revenues, NOK 32 million of the gross prot and an EBIT result of negative NOK 6 million. In 2021, Ironstone accounted for NOK 27 million of the revenues, NOK 8 million of the gross prot and an EBIT of negative NOK 2 million. B2B Key gures: NOK million 2022 2021 Operating revenues 1 615 1 528 Gross prot 276 275 Gross margin (%) 17.1% 18.0% Operating expenses (ex dep) (152) (120) Depreciation and amortisation (8) (9) Total operating expenses (160) (129) Operating cost percentage (%) (9.9%) (8.4%) Operating prot (EBIT) 116 146 Operating prot (EBIT) margin (%) 7.2% 9.6% Distribution nancial review Total revenues reached NOK 3 207 million and grew by 2.7 per cent from NOK 3 124 million in 2021. Increased sales to large customer accounts and strong sale of Apple products contributed positively to the sales growth, but an overall weaker consumer sentiment impacted demand also in the Distribution segment. Sup- ply issues due to Covid-19 lockdowns in China resulted in constraints on Apple products, but the impact dimin- ished towards year-end. In local currency, the operation in Norway delivered growth of 3.1 per cent, Sweden had a revenue growth of 1.8 per cent. Gross prot amounted to NOK 173 million, down 10.8 per cent from 2021. Gross margins decreased to 5.4 per cent in 2022 compared with 6.2 per cent in 2021. The new dis- tribution agreements primarily include a signicant share of products at lower gross margins but are well-suited for Komplett’s business model with low handling costs. More ecient logistics and increased economies of scale from new distribution agreements lowered the total operating expenses per centage from 3.7 per cent in 2021 to 3.4 per cent in 2022. Distribution recorded operating prot (EBIT) of NOK 63 million in 2022, down from NOK 79 million in 2021. This gave an EBIT margin of 2.0 per cent in 2022 compared with 2.5 per cent in 2021. Distribution key gures: NOK million 2022 2021 Operating revenues 3 207 3 124 Gross prot 173 194 Gross margin (%) 5.4% 6.2% Operating expenses (ex dep) (103) (109) Depreciation and amortisation (6) (6) Total operating expenses (109) (115) Operating cost percentage (%) (3.4%) (3.7%) Operating prot (EBIT) 63 79 Operating prot (EBIT) margin (%) 2.0% 2.5% GOING CONCERN The board of directors rmly believes that Komplett Group has the ability to continue its operations in the foreseeable future and hence conrms that the accounts have been prepared on a going concern basis and that this assump- tion is appropriate at the date for the accounts, and that the group, after the proposed dividend, has sucient equity and liquidity to full its obligations. PARENT COMPANY RESULTS AND ALLOCATION OF NET PROFIT The parent company Komplett ASA had no commercial oper- ations in 2022, and revenues, costs and prots are mainly recorded in the operational subsidiaries. Komplett ASA recorded prot before taxes of NOK 19 million in 2022, com - pared to a prot before taxes of NOK 219 million in 2021. The prot included group contributions from subsidiaries of NOK 84 million in 2022 compared with NOK 241 million in 2021. The company’s prot after taxes in 2022 was NOK 67 mil- lion compared with a net prot of NOK 168 million in 2021. The board proposes the following allocation of the net prot of NOK 67 million for the parent company: Transferred to other equity: NOK 67 million The board proposes that no dividend is to be paid for 2022. Following an evaluation, the board has concluded that the group will have an equity and liquidity which is acceptable in relation to the risks and scope of its activities. RESEARCH AND DEVELOPMENT The group does not perform research and development activities beyond development activities connected to technical solutions and functionality on the group’s web - stores. KOMPLETT ASA ANNUAL REPORT 2022 35 THE BOARD DIRECTORS' REPORT RISK FACTORS AND RISK MANAGEMENT Below is a summary of the key risks for the group. See note 4 for a more detailed description of the company’s nancial and market risks. Financial risks The group is exposed to nancial risk in various areas, including currency risk. The objective is to reduce the nancial risk from nancial instruments to the great- est extent possible. The company's current strategy includes the use of nancial instruments in the business in Sweden, while the the currency risk for the business in Norway is primarily sought reduced by continuously matching the selling price of the products against devel- opments in purchase for goods measured in NOK, as well as buying currency at the same time placed for goods in a foreign currency. The currency is then used to pay suppli- ers. Many of Komplett's products are purchased and sold in a market where prices can change up to several times per day. The best hedging of currency uctuations has therefore historically been shown to be close follow-up and change of selling price, combined with high turnover rate of goods exposed to currency risk. Credit risks New suppliers and business customers are credit eval- uated by the group’s own credit department. The risk on sales to end consumers is mitigated by limiting the aver- age order size and by customer prepayment. Liquidity risks Komplett continuously strives to improve working cap- ital focusing on inventory management, current assets and liabilities. Improved working capital and protability shall contribute to strengthening the group’s liquidity. At the end of 2022 the short-term interest-bearing debt was NOK 643 million including IFRS. KOMPLETT ASA ANNUAL REPORT 2022 36 THE BOARD DIRECTORS' REPORT Market risks Komplett Group provides products to consumers, busi- nesses, and the public sector in the Nordics. The demand situation in its main markets is correlated with the gen- eral economic development of each country. The group sees considerable uncertainties in the development of relevant markets in 2023, both in terms of reduced pur- chasing power among consumers and uncertainties fol- lowing the war in Ukraine. Russia’s invasion of Ukraine in February 2022 caused a dramatic increase in energy costs. There is a risk that energy prices will stay elevated on continued uncertainty, which may in turn impact costs of raw material and other input factors. Higher energy prices , ination and interest rates may inuence consumer preferences and have an adverse impact on consumer spending, which could neg- atively impact demand for electronics products. ENVIRONMENTAL, SOCIAL AND GOVERNANCE The group’s sustainability strategy is based on three pillars: Komplett Circularity Komplett Environment, and Komplett Tolerance Komplett Circularity is the path for developing new and cir- cular business concepts, focusing on recycling, durability, and reusability. A particular emphasis is put on miner- als and materials used in electronics that have signicant environmental footprints. Komplett aims to develop meth- ods for salvaging these resources so that they can be rein- corporated into the lifecycle of electronic products. Komplett Environment serves as a guidance toward decreasing the environmental impact of the group’s operations. This commitment is focused on reducing GHG emissions associated with the transportation of our products. Komplett Tolerance consolidates how the Komplett Group is committed to creating and upholding a healthy workspace where our employees feel included and val- ued. Further, the group also emphasises the need to improve documentation and secure decent work stand- ards among its suppliers through increased due diligence. The wider societal focus of Komplett Tolerance includes promoting digital inclusion in all parts of society. Corporate social responsibility Komplett is required to report on its corporate responsi- bility and selected related issues under §3-3a and §3-3c of the Norwegian Accounting Act. Reporting on relevant top- ics is approved by the board of directors and can be found in the Sustainability section on page 48 of this report. Komplett Group will publish a statement of the due dili- gence required in the Transparency act before 30 June 2023. The statement will be published at https://www. komplettgroup.com/. Activities on gender equality and non- discrimination Komplett is required to provide an annual equality state- ment describing the company’s efforts to secure equal opportunities under section 26-a in the Norwegian Equal- ity and Anti-Discrimination Act. The annual statement on equality is included in the Komplett Tolerance chapter in the Sustainability section on page 89 of this report. People and organisation During 2022, the group had 1 955 employees. The number of full-time equivalents (FTEs) that has been employed during 2022 was 1 251. These gures include the employ- ees of Ironstone. Komplett is, during certain periods, using contracted personnel mainly within warehouses, logistics and customer service. In 2022, the group had 328 temporary workers. Many of these were students helping out during weekends and summer holidays. The working environment is considered to be healthy. Komplett has since the end of 2019 introduced a tool to follow the working environment on a weekly basis. The tool is based on input from employees and is evaluated on an ongoing basis both by employees and managers in addition to the executive management. Further, the tool is based on a broader system for following up on health, safety and environment. Average sick leave in 2022 was 6.0 per cent compared with 4.4 per cent in 2021. During 2022, one work related injury was reported resulting in long term sick leave in the subsidiary NetonNet. For further information please refer to the Komplett Tol- erance chapter included in the Sustainability section on page 85 of this report. Changes to the executive management and board of directors Following the combination of Komplett and NetOnNet during 2022, several changes have been made to the executive management team. Susanne Holmström, man- aging director of NetOnNet, was appointed deputy CEO of Komplett Group, and Roger Sandberg joined the group as chief procurement ocer during 2022. The articles of association provide that the board of direc- tors shall consist of between three and nine directors elected by the company’s shareholders. Fabian Bengtsson was elected director at the extraordinary general meeting on 16 March 2022. Jo Olav Lunder has been a director since KOMPLETT ASA ANNUAL REPORT 2022 37 THE BOARD DIRECTORS' REPORT 2018 and was elected chair of the board at the annual gen- eral meeting on 2 June 2022. The board consists of Jo Olav Lunder (chair), Jennifer Geun Koss, Lars Bjørn Thoresen, Fabian Bengtsson, Sarah Willand, Anders Odden (worker director) and Nora Elin Eidås (worker director). Directors’ and ocers’ insurance Komplett ASA has a board liability insurance for the group, including the parent company and its subsidiaries. The insurance covers the board members, CEO and members of the management team. The insurance comprises per- sonal legal liabilities, including defence- and legal costs. CORPORATE GOVERNANCE The board of directors recognises the importance of good corporate governance. The goal to ensure the pro- tection of all shareholders’ interests and to ensure that the company complies with high ethical and social stand- ards. Komplett ASA has established a corporate gov- ernance policy in order to ensure a clear division of roles between the board of directors, the executive manage- ment and the shareholders. The policy is based on the Norwegian Code of Practice for Corporate Governance. The corporate governance policy is published on the Komplett Group website, together with other relevant policy documents such as the investor relation policy, guidelines for remuneration of executives and instruc- tions for handling inside information. Komplett is subject to corporate governance report- ing requirements under section 3-3b of the Norwegian Accounting Act and the Norwegian Code of Practice for Corporate Governance, cf. section 4-4 on the continu- ing obligations of stock exchange listed companies. The Accounting Act may be found (in Norwegian) at www.lov- data.no. The Norwegian Code of Practice for Corporate Governance, which was last revised on 14 October 2021, may be found at www.nues.no. The annual statement on corporate governance for 2022 has been approved by the board of directors and can be found on page 40 of this annual report of 2022. SHARE INFORMATION Komplett ASA is listed on the Oslo Stock Exchange where it trades under the ticker symbol KOMPL. The company was listed on the Oslo Stock Exchange on 21 June 2021. On 15 November 2022 the company completed a private placement of 67 800 000 new shares in the company at a subscription price of NOK 14.75 per share raising gross proceeds of NOK 1 000 050 000. In an extraordinary general meeting on 8 December 2022 the board of directors was granted an authorisation to carry out a subsequent offering of up to 3 390 000 new shares at a subscription price equal to the subscription price in the private placement. At 31 December 2022, the company’s share capital con- sisted of 175 297 579 ordinary shares. During 2022, the share traded between NOK 13.42 and NOK 71.72 per share, with a closing price of NOK 14.44 at year-end 2022. Komplett ASA’s annual general meeting is planned to be held 9 May 2023. EVENTS AFTER 31 DECEMBER 2022 On 6 January 2023 the company launched a subse- quent offering of up to 3 390 000 new shares at a sub- scription price of NOK 14.75. The company received subscriptions for a total of 43 582 shares. Following the issuance of these shares, the company’s share capital is NOK 70 136 464.40, divided into 175 341 161 shares, each with a nominal value of NOK 0.40. Jaan Ivar Semlitsch was appointed new Chief Execu- tive Director (CEO) of Komplett ASA effective from 10 February 2023. Mr. Semlitsch takes over the role from Lars Olav Olaussen, who has been the CEO of Komplett since 2018. Thomas Røkke has been appointed Chief Financial Ocer (CFO) of Komplett ASA, effective from 1 March 2023. At 22 March 2023, the management team consist of Jaan Ivar Semlitsch (CEO), Thomas Røkke (CFO), Susanne Holmström (managing director NetOnNet), Anders Torell (managing director Webhallen), Erlend Stefansson (managing director B2B), Trine-Lise Jensen (head of group SC/IT program), Kristin Hødal Torgersen (chief HR ocer), and Roger Sandberg (chief procure- ment ocer). SUMMARY AND OUTLOOK The previous year has proven to be a challenging period for the entire retail industry, and the board expects mar- ket demand to remain challenging into 2023. Over time, market demand and the share of online trade is expected to return to its attractive growth trajectory. As reported, the gross margin trended positive in the fourth quarter. The group expects its gross margin perfor- mance to continue to improve going forward, supported by good cost control and a healthy inventory position. The group's protability is also set to benet from its solid and scalable business model, as well as from the realisation of synergies and other initiatives to reduce operating costs. KOMPLETT ASA ANNUAL REPORT 2022 38 THE BOARD DIRECTORS' REPORT The combination with NetOnNet allows for signicant econ- omies of scale. Execution of the integration continues to progress as planned, and supplier negotiations are yield - ing the expected synergies. Cost synergies, mainly related to supplier terms, of at least NOK 200 million on an annual basis are expected to have full effect within the rst quar - ter of 2024, of which an annual run rate of NOK 100 million is expected as from 2023. The group has succeeded in maintaining an indus- try-leading cost position, and identied and implemented further eciency gains and cost-reducing initiatives. In NetOnNet, initiatives have been launched to reduce oper- ating costs by approximately SEK 70-90 million at a gross level with effect from 2023. The Komplett Group expects annual capital expenditures related to maintenance at the level of NOK 80-100 million for the period 2023-2025. In addition, expansion of sup- ply chain facilities and upgrades to the group’s IT systems involve planned investments in the range of NOK 350- 400 million in the coming years. The programme is ex- ible, without any committed agreements, and the board will evaluate the capex programme based on the market development. The group has a policy of distributing 60-80 per cent of net prot adjusted for one-off and special items as annual dividend but the board proposes that no dividend be paid for the nancial year 2022. In sum, the group has quickly responded to the market challenges seen in 2022. The group enters 2023 with a healthy stock composition, a stronger balance sheet and strong cost control. Supported by its highly competitive, scalable and cost-ecient business model, the Kom- plett Group is in a strong position to benet from a market recovery. STATEMENT FROM THE BOARD OF DIRECTORS We conrWe confirm that the nt the financial statements for the period 1 January up to and including 31 December 2022 have, to the best of our knowledge, been prepared in accordance with applicable accounting standards and give a true and fair view of the assets, liabilities, nas, financial position and prot od profit or loss of the company and the group as a whole, and that the board of directors’ report includes a fair review of the development and performance of the business and the position of the company and the group as a whole, together with a description of the principal risks and uncertainties that they face. Sandefjord, 22 March 2023 Board of directors, Komplett ASA Jo Olav Lunder Chair Jennifer Geun Koss Director Lars Bjørn Thoresen Director Fabian Bengtsson Director Sarah Willand Director Anders Odden Worker director Nora Elin Eidås Worker director Jaan Ivar Semlitsch CEO KOMPLETT ASA ANNUAL REPORT 2022 39 THE BOARD DIRECTORS' REPORT KOMPLETT ASA ANNUAL REPORT 2022 40 CORPORATE GOVERNANCE KOMPLETT ASA: | CORPORATE GOVERNANCE Komplett considers good corporate governance to be a prerequisite for value creation, trust from shareholders, and adequate access to capital. In order to secure a sound and sustainable corporate governance, Komplett considers it important to ensure good and healthy business practices, reliable nancial reporting, and an environment of compliance based on applicable legislation and regulations, across the group structure. 1. STATEMENT OF POLICY ON CORPORATE GOVERNANCE Komplett is required to report on corporate governance under section 3-3b of the Norwegian Accounting Act and the Norwegian Code of Practice for Corporate Govern- ance. The Accounting Act may be found (in Norwegian) at www.lovdata.no. The Norwegian Code of Practice for Corporate Governance, which was last revised on 14 October 2021, may be found at www.nues.no. This state- ment of policy will be an item of business at Komplett’s annual general meeting on 9 May 2023. The compa- ny’s auditor has assessed whether the information with regard to section 3-3b of the Accounting Act provided in this statement is consistent with the information pro- vided in the annual nancial statements. The auditor’s statement is attached to this annual report. The board of directors at Komplett actively adheres to good corporate governance standards and will at all times ensure that Komplett complies with the requirements of section 3-3b of the Accounting Act and the Norwegian Code of Practice for Corporate Governance. This is done by ensur - ing that the topic of good governance is an integral part of the decision-making process in matters dealt with by the board. Furthermore, the board annually assesses and dis - cusses the principles, and has also considered this state- ment at a board meeting. Komplett’s corporate governance policy is structured in the same way as the Code of Practice, covers each point of the Code, and describes how Komplett complies with the Code requirements. 2. ACTIVITIES Komplett’s objectives, as dened in its articles of associ- ation, are as follows: The objective of the company is trade in computer equip- ment, electronics, and other goods, and to participate in other companies and businesses. In accordance with its objects clause, Komplett oper- ates in several segments and countries. The group’s core business is electronic consumer goods across the seg- ments B2C, B2B, and distribution. The group primarily operates in Norway and Sweden, but also has activities in Denmark. Komplett’s vision is to be “the obvious choice” for customers, suppliers, employees, and society, and Komplett’s mission is "to develop complete solutions that make life easier". Komplett’s values are fundamental to our corporate culture. Our values tell us how to work, how to treat each other, and, not least, how we want to be per- ceived by the world around us. Komplett’s values are pre- cision, simplicity, and enthusiasm. The board of directors and executive management ensures good corporate governance by transparent and trustful cooperation between all parties involved with the group and its business. These include the company’s shareholders, board of directors, and executive manage- ment team, employees, customers, suppliers, and other business partners, as well as public authorities, and soci- ety at large. The core objectives in achieving transparent and trustful cooperation are transparent communication, independence between stakeholders, and equal treat- ment and rights for all of the company’s shareholders. Komplett’s sustainability strategy is based on three main pillars: tolerance, by taking care of our employees, cus- tomers, and suppliers, circularity, by contributing to a circular economy, and environment, by reducing our emissions. 3. EQUITY AND DIVIDENDS The board of directors ensures that the company has an equity capital at a level appropriate to its objectives, strategy, and risk prole, and continuously monitors the group’s capital situation. At 31 December 2022, the group equity totalled NOK 3 496 million. During 2022, 35 242 424 new shares were issued to SIBA Invest as part of the set- tlement for the acquisition of NetOnNet, making SIBA Invest the second largest shareholder of Komplett ASA. On 15 November 2022 the company completed a private placement of 67 800 000 new shares in the company at KOMPLETT ASA ANNUAL REPORT 2022 41 CORPORATE GOVERNANCE a subscription price of NOK 14.75 per share raising gross proceeds of NOK 1 000 050 000. In an extraordinary general meeting on 8 December 2022 the board of directors was granted an authorisation to carry out a subsequent offering to shareholders who were not allocated shares in the private placement. After year-end, the subsequent offering was launched, and the company received subscriptions for a total of 43 582 shares. Following the issuance of these shares, the com- pany’s share capital is NOK 70 136 464.40, divided into 175 341 161 shares, each with a nominal value of NOK 0.40. Komplett shall, at all times, have a clear and predicta- ble dividend policy. Komplett targets stable growing div- idends year-on-year, and a pay-out ratio of 60-80 per cent of net prot adjusted for one-off costs and special items. The board of directors has proposed that no div- idend be paid out for the 2022 nancial year. Authorisa- tions empowering the board of directors to increase the company’s share capital or to purchase treasury shares are limited to dened purposes and are granted for a period no longer than until the next general meeting. The general meeting is given the opportunity to vote on every purpose covered by the authorisation. Questions con- cerning increases in share capital must be submitted to the general meeting for decision. 4. EQUAL TREATMENT OF SHAREHOLDERS Komplett has one class of shares. Each share of the com- pany carries one vote, and all shares carry equal rights. Each share has a nominal value of NOK 0.40. Further information on voting rights at general meetings is pro- vided under the section for general meetings. Any decision to waive the pre-emption rights of exist- ing shareholders to subscribe for shares in a share capi- tal increase, shall be justied by the common interest of the company and the shareholders, as well as applicable equal treatment regulations. If the board of directors resolves to issue new shares and deviate from existing shareholders’ pre-emptive rights pursuant to an authorisation granted to the board of directors, the stock exchange announcement issued in connection with the share issue shall also include a justi- cation for the deviation. The company’s transactions in treasury shares shall be carried out through Oslo Børs’ trading platform at the prevailing trading price or by making a public offer to all shareholders. If the company’s shares suffer from weak liquidity, the board of directors shall take particu- lar care even when making purchases and sales through the stock exchange, in order to ensure equal treatment of shareholders. 5. FREELY TRANSFERABLE SHARES The shares of the company are freely transferable and there are no limitations on any party’s ability to own or vote for shares in the company. No special limitations on transactions have been laid down in Komplett’s articles of association. 6. GENERAL MEETINGS Komplett seeks to ensure that as many shareholders as possible are able to exercise their rights by participating in general meetings, and that the general meeting is an effective meeting place for shareholders and the board of directors. The annual general meeting is held every year before the end of May. Notices of general meetings and related documents are made available on Komplett’s web- site no later than 21 days prior to the date of the meeting. The nal date for giving notice of attendance is no ear- lier than three days prior to the general meeting. Share- holders are given the opportunity to vote on the election of every single candidate to an oce in the nomination committee and on the board of directors. The auditor and members of the board of directors and nomination com- mittee are present at general meetings. Under Norwegian law, only shares that are registered in the name of the shareholder include the right to vote. Shares that are registered in a nominee account must be reregistered in the VPS for the shareholder to be able to vote with the shares. Further information may be found in the notice of the general meeting and on Komplett’s web- site. Shareholders who are unable to attend the general meeting may vote in advance or by proxy. Komplett will appoint the board chair or meeting chair to vote for the shareholders. The proxy form is designed in such a way that voting instructions can be given for each item of business that is to be considered. Both the notice of the general meeting and Komplett’s website pro- vide further information regarding the use of proxies and shareholders’ right to submit items of business for con- sideration at general meetings. Under the rst paragraph of article eight in the articles of association, the board of directors may decide that documents concerning items of business to be considered at the general meeting are not to be sent to shareholders when the documents are made available on the company’s website. This also applies to documents which by law must be included in or attached to the notice of the general meeting. A shareholder may nonetheless ask to be sent documents pertaining to items of business to be considered at the general meeting. The provision in the articles of association departs from the general rule in chapter ve of the Public Limited Liability Companies Act which prescribes that the annual nan- cial statements, the report of the board of directors, the auditor’s report, and the board of directors’ report on remuneration of the executive management pursuant to KOMPLETT ASA ANNUAL REPORT 2022 42 CORPORATE GOVERNANCE section 6-16b must be sent to all shareholders no later than one week prior to the general meeting. The company facilitates the election of an independent chair of the general meeting. The nomination committee chair and members of the board of directors are present at general meetings, but normally not the entire board. To date, no items of business at general meetings have made this necessary. The board chair, the general man- ager, and the heads of the various business areas are nor- mally present in order to reply to any questions that may be raised. Two extraordinary general meetings were held during 2022, on 16 March and 8 December, in connection with the acquisition of NetOnNet. Meeting notices and min- utes were published on Newsweb.no and on the compa- ny’s website. 7. THE NOMINATION COMMITTEE Under the articles of association, Komplett has a nomi- nation committee that is elected at the general meeting. The nomination committee consists of three members, who are elected for a term of up to two years. The major- ity of the nomination committee shall be independent from the company’s board of directors and executive management. The general meeting elects the chair and members of the committee, and determines its remuner- ation. The committee is tasked with submitting the fol- lowing reasoned recommendations: Recommendation to the general meeting recommend candidates for the election to the board of directors and the nomination committee, and recommend a suitable remuneration for the members of the board of directors and the nomination committee. The nomination committee’s recommendation of can- didates to the board of directors shall ensure that the board of directors is composed to comply with legal requirements and principles of corporate governance and that they represent a broad group of the company’s shareholders. The rules of procedure for the nomination committee contain further guidelines for the preparation and imple- mentation of elections to the nomination committee and the board of directors, as well as criteria for eligibility, general requirements regarding recommendations, the number of members in the committee and their term of service, and detailed procedural rules for the work of the nomination committee. The participants at the general meeting elected the fol- lowing members for the nomination committee: Sverre R. Kjær, chair, elected until the annual general meeting of 2024 Nina Camilla Hagen Sørli, member, elected until the annual general meeting of 2024 Martin Bengtsson, member, elected until the annual general meeting of 2024 Input and proposals submitted to the nomination com- mittee may be sent to the chair of the nomination com- mittee by email to [email protected] by 1 April 2023 at the latest. Information regarding the composition of the nomination committee is posted on Komplett’s website under “Inves- tor Relations”. The composition of the nomination committee is intended to ensure that the interests of all the sharehold- ers are served, and meets the requirement of the Nor- wegian Code of Practice for Corporate Governance as regards independence of the company’s management and board of directors. None of the members of the nom- ination committee is a member of the board of directors of Komplett ASA. Neither the general manager nor other senior executives are members of the committee. 8. THE BOARD OF DIRECTORS, COMPOSITION, AND INDEPENDENCE The composition of the board of directors is intended to serve the interests of all the shareholders and to meet the company’s need for competence, working capacity, and diversity. The board’s composition meets the require- ments of the Norwegian Code of Practice for Corporate Governance as regards board members’ independence of the company’s executive management, main sharehold- ers, and material business relationships. At least two of the directors are dened as non-independent of the com- pany’s main shareholders. All the directors are dened as independent of the company’s executive manage- ment or material business relationships. There are few instances in which directors are disqualied from con- sidering board matters. Representatives of the executive management are not members of the company’s board of directors. Under article 5 of Komplett’s articles of asso- ciation, the company’s board of directors shall consist of between 3 and 9 members, according to the decision of the participants at the general meeting. There are no other provisions in the articles of association governing the appointment and replacement of directors. Under Norwegian law and in accordance with Komplett’s current system of corporate democracy, group employ- ees have the right to elect two members of the board of directors of Komplett ASA. KOMPLETT ASA ANNUAL REPORT 2022 43 CORPORATE GOVERNANCE The board held a total of 15 meetings in 2022, three of which were written proceedings, including six ordi- nary meetings. The extraordinary meetings were mainly related to the acquisition of NetOnNet. The attend- ance rate was 91.4 per cent. A description of the compe- tence and background of the individual board members can be found on page 18 of this annual report for 2022 and on https://www.komplettgroup.com/about/ board-and-management. The directors are encouraged to hold shares in the company. 9. THE WORK OF THE BOARD OF DIRECTORS The tasks of the board of directors are laid down in the rules of procedure for the board of directors, which govern the board’s responsibilities and duties and the administrative procedures of the board, including which matters are subject to board consideration and rules for convening and holding meetings. The board’s rules of procedures also contain rules regarding the general manager’s duty to inform the board about important matters and to ensure that board decisions are imple- mented. There are also provisions intended to ensure that company employees and other parties involved are adequately informed of board decisions, and that the guidelines for preparing matters for board consideration are followed. Other instructions to the board and clar- ication of its duties, authorisations, and responsibili- ties in respect of the general management are provided through routine communication. The rules of procedure further establish that a direc- tor must not take part in the consideration of or a deci- sion on an issue that is of such importance to himself or herself or to any related party that the member must be considered to have an obvious personal or nancial interest in the matter. It is incumbent upon each director to consider on an ongoing basis whether there are mat- ters which, from an objective point of view, are liable to undermine the general condence in that board mem- ber’s independence and impartiality, or which could give rise to conicts of interest in connection with the board of directors’ consideration of the matter. Such matters must be discussed with the board chair. According to the Komplett’s code of conduct, employees must on their own initiative inform their superior if they should recuse themselves from dealing with or if they have a conict of interest in connection with a matter, and consequently should not take part in considering the matter. The board of directors adopts an annual meeting and activity plan that covers strategic planning, business issues, and oversight activities. Transactions between the company and its shareholders, a shareholder’s parent company, members of the board of directors, executive management or closely associ- ated persons to any such party that are deemed material under the Norwegian Public Limited Liability Companies Act, are subject to approval by the participants at the general meeting. Furthermore, the board of directors is required to arrange an independent auditor valuation of the transaction. The board of directors has established two perma- nent board committees, which are described in further detail below. These committees do not make decisions but supervise the work of the company management on behalf of the board and prepare matters for board con- sideration within their specialised areas. In this prepara- tory process, the committees have the opportunity to draw on company resources, and to seek advice and rec- ommendations from sources outside the company. The remuneration committee The remuneration committee members are Sarah Willand (chair), Fabian Bengtsson and Jo Olav Lunder. The com- position of the committee meets the requirements of the Norwegian Code of Practice for Corporate Governance as regards independence, and all the committee mem- bers are considered to be independent of the executive management. The mandate of the committee, which is set out in the Instructions for the remuneration commit- tee, is as follows: review the remuneration and benets strategy for the members of the executive management review the performance of the chief executive ocer (CEO) versus the adopted objectives and recruitment policies, career planning, and management develop- ment plans; and prepare matters relating to other material employ- ment issues in respect of the executive management. The committee will otherwise deal with special ques- tions relating to compensation for group employees insofar as the committee nds that these ques- tions concern matters of particular importance for the group’s competitive position, corporate identity, recruitment ability, etc. The audit committee The audit committee members are Lars Bjørn Thoresen and Jennifer Geun Koss. The composition of the commit- tee meets the requirements of the Norwegian Code of Practice for Corporate Governance as regards independ- ence and competence. The Nomination Committee’s rec- ommendation of candidates for election to the board contains information as to which board members satisfy the requirements as regards independence and com- petence to sit on the audit committee. The committee’s KOMPLETT ASA ANNUAL REPORT 2022 44 CORPORATE GOVERNANCE mandate, which is set out in the Instructions for the audit committee, is as follows: inform the board of directors of the outcome of the company’s statutory audit and explain how the stat- utory audit contributed to the integrity of nancial reporting and what the role of the audit committee was in that process monitor the company’s nancial reporting process and submit recommendations or proposals to the board of directors to ensure its integrity monitor the effectiveness of the company’s inter- nal quality control and risk management systems and, where applicable, its internal audit, regarding the company’s nancial reporting, without breaching its independence monitor the statutory audit of the group’s annual and consolidated nancial statements, in particular, its performance, taking into account any ndings and conclusions by the Norwegian nancial supervisory authority review and monitor the independence of the compa- ny’s statutory auditor, and in particular the appropri- ateness of the provision of non-audit services to the company be responsible for the procedure for the selection of the company’s statutory auditor and recommend the statutory auditor to be appointed. The board of directors’ evaluation Each year, the board of directors carries out an eval- uation of its own activities and competence, and discusses improvements in the organisation and imple- mentation of its work, both at an individual level and as a group, in relation to the goals that were set for its work. The results are made available to the nomination com- mittee. 10. RISK MANAGEMENT AND INTERNAL CONTROL The board of directors is responsible for ensuring a sound organisation of the business and management of the group. This is done, among other things, through the group’s structure for monitoring nancial protabil- ity and eciency in the value chain. The executive man- agement group wants to ensure operational and nancial follow-up and effective decision-making based on open- ness, clear communication, and understanding of roles and responsibilities across the organisation. Komplett Group is subject to several risk areas, includ- ing market and competition risk, nancial risk, oper- ational risk, and cyber security. The board and the executive management are continuously monitor- ing the group’s risk exposure and the group constantly strives to improve its internal control processes. An active approach is taken to risk management, where an annual risk assessment and mitigation is presented and discussed with the board. The management of each business unit is responsible for risk management and internal control to ensure: identication and exploitation of business opportunities goal-oriented and ecient operations compliance with applicable laws and regulations operations in accordance with governing policies and procedures, including ethical and corporate responsibility guidelines. Governing documents clarifying the standards that apply to the group’s businesses are available to all employees through the internal web portals. Risk management The group’s risk management is centralised and intends to ensure that all signicant risks, including both oper- ational and strategic risk areas, are identied, analysed, and effectively followed up by business units and func- tions. The group controlling function is responsible for the risk management model, including: presenting the group’s consolidated risk matrix to the executive management group, the audit committee, and the board of directors maintaining guidelines and templates for risk manage- ment and reporting A key objective of the enterprise risk management pro- cess is to highlight risk areas relevant for review by the board and the audit committee, and to facilitate their dis- cussions of risk mitigating activities with the executive management. All business units update their risk assessments on a reg- ular basis to ensure proper reporting and follow-ups of risk indicators and associated risk mitigation measures. Environment, health, and safety Risk identication is also an important tool to prevent unwanted incidents related to the environment, health, and safety. The group’s Norwegian operations are cer- tied under ISO 14001:2015. The environmental impact from the business operations is estimated to be what KOMPLETT ASA ANNUAL REPORT 2022 45 CORPORATE GOVERNANCE is expected to be normal for these kinds of businesses. Komplett Group is compliant to relevant environmental acts and regulations, and through partners, the group handle outdated ICT products and toxic waste. The nancial reporting processes Komplett Group prepares and presents its consolidated nancial statements in accordance with current interna- tional nancial reporting standards (IFRS). The nancial statements are prepared according to uniform principles, and all subsidiaries follow the same accounting princi- ples as the parent company. Every month, each subsidiary reports its nancials to the group reporting function using standardised tem- plates and a general chart of accounts. The reporting is expanded in the year-end reporting process to meet various requirements for supplementary information. Financial data are consolidated and checked at several management levels, including monthly business reviews with business units. The group provides the board of directors with monthly nancial reports and prepares quarterly reports that are made public. The audit committee and the external audi- tor review the quarterly and annual reports before they are approved by the board. 11. REMUNERATION OF THE BOARD OF DIRECTORS Remuneration of directors shall be reasonable and reect the board’s responsibilities, expertise, time invested, and the complexity of the business. All remu- neration of the board of directors is disclosed in note 7 to Komplett ASA’s nancial statements and in the remu- neration report. The note shows that remuneration of the directors is not linked to the group’s performance and that no options have been issued to directors. 12. REMUNERATION OF THE EXECUTIVE MANAGEMENT GROUP The board of directors has adopted clear and under- standable guidelines for the remuneration of the exec- utive management team. The guidelines are approved by the participants at the general meeting. The compa- ny’s remuneration principles shall be designed to ensure responsible and sustainable remuneration decisions that support the company’s business strategy, long-term interests, and sustainable business practices. The board’s remuneration committee presents a recom- mendation concerning the terms and conditions for the CEO to the board of directors and monitors the general terms and conditions for other senior executives in the group. The board assesses the CEO and his terms and conditions once a year. A description of the remunera- tion of the executive management and the group’s com- pensation and benets policy, including the scope and design of bonus and share-price-related programmes, is given in the board of directors’ statement of guide- lines for the remuneration of executive management approved by the general meeting and the remuneration report; see note 7 to the group consolidated nancial statements. 13. INFORMATION AND COMMUNICATIONS Komplett seeks to ensure that its accounting and nan- cial reporting inspires investor condence. Komplett’s accounting procedures are highly transparent. The board of directors’ audit committee monitors company report- ing on behalf of the board. Komplett strives to communi- cate actively and openly with the market. The company’s annual and quarterly reports contain extensive infor- mation on the various aspects of the company’s activi- ties. The company’s quarterly presentations are webcast live and may be found on Komplett’s website, along with the quarterly and annual reports under “Investor Rela- tions”. Komplett aims to hold a capital markets day at reg- ular intervals, on which occasion the market is given an in-depth review of the group’s strategic direction and operational development. All shareholders and other nancial market players are treated equally as regards access to nancial informa- tion. The group’s investor relations department maintains regular contact with company shareholders, potential investors, analysts, and other nancial market stake- holders. The board is regularly informed of this activity. The nancial calendar for 2023 may be found on Kom- plett’s website. 14. TAKEOVERS The board of directors will not seek to hinder or obstruct any takeover bid for the company’s operations or shares. In the event of such a bid as discussed in section 14 of the Norwegian Code of Practice for Corporate Govern- ance, the board of directors will, in addition to complying with relevant legislation and regulations, seek to com- ply with the recommendations in the code of practice. This includes obtaining a valuation from an independent expert. On this basis, the board will make a recommendation as to whether or not the shareholders should accept the bid. There are no other written guidelines for procedures to be followed in the event of a takeover bid. The group has not found it appropriate to develop any principles for Komplett’s conduct in the event of a takeover bid, other than the actions described above. In addition, the board of directors will refer to what is stated in the code of practice regarding this issue. 1 KOMPLETT ASA ANNUAL REPORT 2022 46 CORPORATE GOVERNANCE 5. AUDITOR The board of directors has decided that the external audi- tor shall regularly report to the board. Every year, the external auditor presents to the board an assessment of risk, internal control, and the quality of nancial report- ing at Komplett, and an audit plan for the following year. The external auditor also takes part in the board’s dis- cussions of the annual nancial statements. The board of directors ensures that relevant matters may be dis- cussed with the external auditor without the presence of the management. The external auditor is invited to all meetings of the board’s audit committee. Komplett has established guidelines for the right of the general man- agement to use the external auditor for services other than auditing. Responsibility for monitoring such use in detail has been delegated to the audit committee. Details of the company’s use and remuneration of the external auditor are disclosed in note 7 to the group consolidated nancial statements. The participants of the general meeting are informed about the group’s overall remu- neration to the auditor, broken down in accordance with statutory requirements into remuneration for statutory auditing and remuneration for other services. In con- nection with the auditor’s participation in the audit com- mittee and the board of directors’ consideration of the annual nancial statements, the auditor also conrms his independence. KOMPLETT ASA ANNUAL REPORT 2022 47 CORPORATE GOVERNANCE KOMPLETT ASA ANNUAL REPORT 2022 48 SUSTAINABILITY REPORT | SUSTAINABILITY REPORT 2022 Sustainability at Komplett Group ................ 51 Materiality assessment ......................................... 52 Materiality and stakeholder dialogue .................... 53 Our sustainability pillars .......................................54 The sustainable development goals ...................... 56 Governance perspectives ...........................58 Sustainability governance structure .................... 58 Business Conduct ................................................. 58 Customer privacy and product safety....................61 Supply chain engagement and human rights ........ 65 Komplett circularity ...................................69 Circular business ..................................................69 Waste management ............................................. 72 Sustainable products and services ...................... 75 Komplett environment ............................... 79 Climate and nature impact ................................... 79 Komplett tolerance .....................................85 Employee health ................................................... 85 Diversity and inclusion ..........................................89 Competence development .................................... 93 Community engagement initiatives ...................... 95 Plans and aims going forward .................... 97 Appendix ..................................................... 98 Numbers and statistics ........................................ 98 GRI-index.............................................................. 101 Carbon accounting report 2022 (Cemasys) .........105 KOMPLETT ASA ANNUAL REPORT 2022 49 SUSTAINABILITY REPORT In 2022, company representatives from all our subsidiaries participated in our materiality assessment to ensure that our work and priorities within sustainability are relevant and targeted. Komplett’s FLEX initiative offered 1000 products to consumers. NetOnNet’s Hyreshyllan allowed customers to rent products, reducing EE-waste by 12000-15000 items in 2022. Webhallen’s Revive program was expanded to include products beyond phones, resulting in 485 trades with a total product value of SEK 709781 in 2022. We achieved a 6 percentage point increase in the average share of women in our workforce in 2022, mainly due to efforts by NetOnNet. Our zero-tolerance policy on discrimination was upheld with no reported incidents in 2022. Komplett’s operation in Norway improved its SHE index score by 12 points in 2022, and women in management positions earned an average of 7.3 per cent more than their male counterparts. NetOnNet launched a sustainable recruitment training program in 2022, including recruitment guidelines aimed at creating balanced workgroups. This is the rst time Komplett Group reports its emissions on a group level including all subsidiaries. The total emission for the group was 5 083 tCO 2 e. Conducted a group wide materiality assessment Komplett Group made signicant progress in promoting circular business practices in 2022 Improved diversity efforts Prioritised to improve the data quality in our climate account KOMPLETT ASA ANNUAL REPORT 2022 50 SUSTAINABILITY REPORT | SUSTAINABLILITY PERFORMANCE AT A GLANCE SUSTAINABILITY REPORT 2022: | SUSTAINABILITY AT KOMPLETT GROUP This sustainability report aims to offer insights into our integration of sustainability throughout the strategy and operations of our entire group. The 2022 materiality assessment rearmed that circularity, environment, and tolerance should remain our top priorities across all our companies. SUSTAINABILITY IS INTEGRATED IN OUR BUSINESS MODEL AND STRATEGY Komplett Group operates an ecient and scalable business model that supports cost leadership, and enables a com - petitive product offering. The company serves customers in the B2C, B2B and distribution markets in Norway, Sweden and Denmark, and is deeply focused on delivering best in class customer experience with focus on sustainable prod - ucts with a high quality and long shelf life. In 2020, we developed our 2025 Business Strategy, which serves as our roadmap to become the leading e-retail com - pany in the large and structurally growing Nordic market for electronics and IT products by 2025. As part of this strategy, “sustainability in everything we do” is one of the group’s ve pillars. Read more about our business model and 2025 business strategy in the board of directors’ report. SUSTAINABILITY REPORTING The information in the Sustainability Report 2022 is pre- pared with reference to the GRI Universal Standard 2021. Since 2020, Komplett Group has used the GRI as a report- ing guideline. Going forward, we aim to report in accord- ance with the GRI Universal Standard. The GRI index at the end of this report provides an overview of the disclosures made according to the GRI Universal Standard. The report, which is published annually, covers the scal year from 1 January 2022, to 31 December, 2022. It is pub- lished as part of the annual report of 2022. No restate- ments from previous reports have been made, and the sustainability reporting has not been externally assured. This report covers the entire Komplett Group, including its subsidiaries; Komplett, Webhallen and NetOnNet. When data and sustainability efforts pertain to a specic sub- sidiary, the report species this accordingly. In general, NetOnNet has more extensive sustainability data available than Komplett and Webhallen. GOVERNANCE ENVIRONMENT SOCIAL Business ethics Governance structure Code of conduct Supply chain engagement and human rights Circular business Sustainable products and services Climate and nature impact Less transportation Human rights and decent working conditions Emplyee health Diversity and inclusion Community engagement and competence development KOMPLETT CIRCULARITY KOMPLETT ENVIRONMENT KOMPLETT TOLERANCE KOMPLETT ASA ANNUAL REPORT 2022 51 SUSTAINABILITY REPORT | MATERIALITY ASSESSMENT The 2022 materiality assessment conducted for the entire group identied three main material topics that are of highest importance for both Komplett Group and its key stakeholders. These topics conrmed that Kom- plett Group's strategic pillars of circularity, environment, and tolerance continue to be top priorities across all our companies. The 2022 assessment process began with a materiality assessment with management representatives from all subsidiaries in the group. The assessment was based on a stakeholder analysis and an evaluation of megatrends as well as an industry analysis. The company represent- atives discussed developments in the world, changes in the industry’s focus on sustainability, and how per- ceptions of the company and the value chain may have changed in relation to ESG issues. The main topics discussed were: Economic downturns Human and labour rights Equality and diversity (conscious recruitment and hiring) Employees (working conditions, salary, living conditions) Equality and diversity (conscious recruitment and hiring) Climate – emissions Circular economy (reuse, rental, repair, product design) Risks in the value chain – Chinese dependence In the discussion, Komplett Group representatives high- lighted concerns about the economic downturn, as well as the importance of equality and diversity in a relatively male-dominated industry. They also emphasised the need to reduce climate emissions and explore circular business concepts, and acknowledged challenges related to human and labor rights among suppliers in the global value chain. These discussions, along with stakeholder and industry analyses, formed the foundation of Komplett Group’s 2022 materiality assessment: KOMPLETT ASA ANNUAL REPORT 2022 52 SUSTAINABILITY REPORT OUR STAKEHOLDERS Employees Majority owner Suppliers Other investors Non-governmental institutions The public Financial institutions B2C customers Government (The Norwegian Environment Agency) B2B customers Community | MATERIALITY AND STAKEHOLDER DIALOGUE Komplett Group conducted a stakeholder analysis to identify key stakeholders for the 2022 materiality assessment. Communications and sustainability man- agers, as well as the CEO's advisor, participated in the discussion, resulting in the addition of three key new stakeholders: nancial institutions, non-governmental organisations, and the general public. Ongoing engagement with these stakeholders is a top priority for Komplett Group. Below follows a summary of the key stakeholders identied for Komplett Group: Majority owners Other investors Financial institutions B2C customers B2B customers Suppliers Government Community Employees NGOs The public (Nordic countries) KOMPLETT ASA ANNUAL REPORT 2022 53 SUSTAINABILITY REPORT | OUR SUSTAINABILITY PILLARS The material topics identied for 2022 are closely linked to Komplett Group's sustainability strategy, which is based on three pillars – Circularity, Environment and Tol- erance. Each pillar has a distinct set of ambitions and corresponding activities, and we aim to track progress in each of these impact areas. | KEY FIGURES FROM OUR THREE PILLARS KOMPLETT ASA ANNUAL REPORT 2022 54 SUSTAINABILITY REPORT 5 083 tonnes CO 2 e Total GHG emissions 33% Women 67% Men 2.1% Return rate Komplett 2.0% Return rate Webhallen 3.6% Return rate NetOnNet 64.5% Komplett Group’s average share of renewable energy use 1 955 of employees during 2022 Circularity Environment Tolerance KOMPLETT CIRCULARITY KOMPLETT ENVIRONMENT KOMPLETT TOLERANCE WHAT IT IS Komplett Circularity is our path to developing new and circular business concepts focusing on recycling, durability, and reusability. We focus particularly on the minerals and materials used in the electronics industry that leave signicant environmental footprints. Our goal is to develop methods to recover these resources so that they can be reintegrated into the lifecycle of electronic products. The Komplett Environment principle is designed to help us reduce the impact of our operations on the environment. This commitment focuses on reducing GHG emissions associated with the transportation of our products. Komplett Group is committed to creating and maintaining a healthy work environment where our employees feel included and valued. We work to improve documents and demand decent labour standards from our suppliers. We promote digital inclusion in all parts of society. WHAT WE WANT TO ACHIEVE Increase the durability and reusability of everything we sell. Ensure that products purchased from Komplett Group are made from more recycled materials. Create solutions that make it easier for customers to choose to repair or reuse electronic equipment. Introduce longer warranties and upgrade solutions and continue to improve our buyback and leasing options. We record, document, and limit our emissions through various environmental programs and ISO certications. We work with our suppliers to nd transportation solutions with a lower carbon footprint. We guide our customers towards more environmentally friendly products. Promote an inclusive work environment by encouraging and mentoring our employees. Promote digital inclusion in all areas where we have a presence. Develop a complete view of our value chain – taking care of people and resources at all levels. WHAT IT WILL TAKE We will invest in the development of new services to encourage recycling and reuse of products. We will improve the management of these initiatives by introducing tools and systems for easier use. We will strengthen our service and circular business models and take measures to communicate the importance of a circular economy to our customers and suppliers. Continue to closely track and monitor our GHG emissions. Work with our suppliers to nd the most effective and environmentally friendly forms of transportation. We prioritise suppliers who are committed to reducing their GHG emissions, and encourage our existing partners to work towards this as well. Promote sustainable products in our inventory. Establish mechanisms to measure and manage employee satisfaction and well-being at all levels of our organisation. Implement processes to improve transparency in our value chain and ensure collaboration with suppliers in this area. Promote digital inclusion by raising awareness, forming partnerships, and conducting fundraising activities together with suppliers and customers. SDGs SDG 13: Climate Action SDG 12: Responsible consumption and production SDG 5: Gender equality SDG 8: Decent work and economic growth SDG 10: Reduced inequalities KOMPLETT ASA ANNUAL REPORT 2022 55 SUSTAINABILITY REPORT | THE SUSTAINABLE DEVELOPMENT GOALS Our strategic pillars are closely linked to the UN Sustainable Development Goals (SDGs), which are important guiding principles that identify challenges for society, but also promote solutions for the future. The 17 goals can only be achieved through signicant efforts of businesses globally and we aim to support all goals through our business. With our three impact areas - Circularity, Environment and Tolerance - serving as a foundation, we have identied the following goals that we believe our core business can have a signicant contribution to and that we will prioritise going forward: SDG 5: As we operate in an industry that is considered typically male-dominated and our main activities are related to warehousing, SDG 5 is a priority for Komplett Group. To address the challenges that may arise from this imbal- ance, we work constantly to ensure equality at all lev- els of the group. Our priorities are to recruit and retain female employees and to ensure that all our employees are treated fairly, both in terms of opportunities and com- pensation. And that all employees feel safe and protected from discrimination and harassment. SDG 8 and 10: To strengthen and communicate our commitment to ensure decent working conditions and respect for fundamental workers’ and human rights, both within our company and across our value chain, we empha- sise SDGs 8 and 10. One priority is to improve our sys- tems for conducting due diligence to closely monitor the impact of our operations by our suppliers. This is particularly true for those who rely on labour in regions with a high risk of human and labour rights violation. Through this work, we can help reduce regional and global inequalities and advocate for bet- ter working and economic conditions for all workers affected by our supply- and value chain. SDG 12: As part of our work with SDG 12 and the core of the cir- cularity principle, we strive to contribute to more reuse, repair, and sustainable management of electronic prod- ucts. Electronic waste is a major international challenge that Komplett Group seeks to minimise. Many electronic components are highly dependent on minerals, which are in short supply and increasingly needed. This is another reason as to why we need to work with our partners to develop solutions that improve the recycling and recov- ery of these scarce minerals. The group recognises that electronics manufacturing presents many challenges, and we strive to produce and consume all our products responsibly to reduce our material footprint. SDG 13: We believe it is crucial for Komplett Group to focus on SDG 13 because our operations contribute to GHG emis- sions, primarily through the production and transpor- tation of goods. Therefore, it is important for us to map our current climate footprint and initiate actions that will reduce our emissions in the coming years. This also relates to scope 3 emissions, especially emis- sion related to our supply chain and the production of goods. KOMPLETT ASA ANNUAL REPORT 2022 56 SUSTAINABILITY REPORT KOMPLETT ASA ANNUAL REPORT 2022 57 SUSTAINABILITY REPORT | OUR VALUE CHAIN AND KEY SUSTAINABILITY IMPACTS Producer Sourcing Warehouse Sales Packaging Logistics Customer End of line 1 Circular business concepts 2 Sustainable packaging 3 Innovative solutions with partners 4 Circular value chain 5 Zero emissions logistics 6 Responsible supply chain 7 Competence development 8 Inclusive workplace 9 Climate impact 10 Digital inclusion 11 Sustainable products 12 Renewable energy 13 Business ethics 14 Employee health 15 Community engagemnet Komplett Circular We will contribute to a circular economy Komplett Tolerance We will take care of people at all levels of our value chain Komplett Environment We will reduce our emissions Signicant Impact Impact IMPACT: | GOVERNANCE PERSPECTIVES To ensure commitment to the highest standards of business ethics, we have incorporated sustainability into our strategy, business model and governance policies. This is a long-term commitment, and we believe it is key to ensure growth and business success. Komplett Group’s governance model is closely aligned with the “Norwegian Code of Practice for Corporate Govern - ance”. For additional information on our group’s governance model and policy, please read the Corporate Governance Statement on page 40, or click or scan the QR-code. | SUSTAINABILITY GOVERNANCE STRUCTURE Sustainability permeates all operations and the organisa- tional structure, from top-level board and management to all levels of the organisation. Each subsidiary has a Head of Sustainability and Communications or a Communica- tion Manager that handles the group’s ESG initiatives. The CFO is involved in overseeing these efforts and has the ultimate responsibility for corporate governance, includ- ing the oversight of strategic planning, review of strategic processes and sustainability reporting. GROUP STANDARDS AND POLICIES The group's policies are discussed with local manage- ment teams as part of our risk management, internal control, and governance processes. All policies and guidelines are available on the Kom- plett, Webhallen and NetOnNet intranet pages. In addi- tion, employees can nd delegation of authority policies, employee handbooks (including country-specic ver- sions), ethics and harassment policies, the General Data Protection Regulation (GDPR) policy and guidelines for remuneration of executives here. Where applicable, the standards and policies have been developed based on internationally recognised initia- tives such as the UN Guiding Principles on Business and Human Rights. Komplett Group is also certied according to ISO 9001 and ISO 14001. | BUSINESS CONDUCT CODE OF CONDUCTS Each subsidiary within Komplett Group has a separate Code of Conduct, which describes its commitment to maintaining high ethical standards in line with the group’s overall ambition. We require all employees across our subsidiaries to make a personal commitment to these Code of Conducts. Mandatory onboarding sessions in our companies’ Code of Conducts are provided to all new employees across our organisation. In addition, employees can nd informa- tion and guidance on our standards and procedures for ethical business conduct, available on our subsidiaries’ intranet pages. In 2022, no major breaches of the subsidiaries’ Code of Conducts were reported. KOMPLETT ASA ANNUAL REPORT 2022 58 SUSTAINABILITY REPORT Essential insights from our subsidiaries’ Code of Conducts: Komplett Webhallen NetOnNet In 2021, Komplett initiated a review process to update its Code of Conduct in line with its increased sustainability standards and to bring it up to internationally recognised initiatives, such as the UN Guiding Principles on Business and Human Rights. The process is ongoing as of 2022. A newly hired compliance ocer, who will take up the position from 1March 2023, will be responsible for completing the process. Webhallen’s Code of Conduct for employees describes its commitment to maintaining high ethical standards in everything the company does. It sets out the standards of behaviour that Webhallen can expect from internal parties, and what external parties can expect from Webhallen. The Code of Conduct for employees is part of its People policy, which is available at the intranet, and the company aims to further develop this during 2023. NetOnNet has done extensive work in recent years to develop, implement and update the HR policy, guidelines and its Code of Conducts for both employees and suppliers. This work continued in 2022 and the company aims to do more in subsequent years. KOMPLETT ASA ANNUAL REPORT 2022 59 SUSTAINABILITY REPORT SUPPLIER CODE OF CONDUCT Komplett Group continuously works to improve inter- nal training and maintain close dialogue with our exter- nal suppliers. Across all our subsidiaries we want to work with suppliers that share our values and requirements regarding responsible business conduct. NetOnNet has come far on this matter, and has specied its supplier requirements in its Code of Conducts. The require - ments include commitments within key subjects such as: Quality, Environmental Health & Safety (QEHS), anti-corrup - tion and business ethics, fair pay and working conditions, compliance with laws and regulations, and audit rights. In 2023, Komplett aims to adapt standards and require- ments from NetOnNet’s Supplier Code of Conduct. This will be an important aspect to comply and report in line with the expectations and regulations of the Transpar- ency Act, which came into force in Norway in July 2022. NetOnNet’s Global Procurement Policy provides guide- lines to ensure a transparent and consistent pro- curement process that supports its Code of Conduct, strategy, and other policies. For more information, please see section Supply Chain Engagement and Human Rights. ANTI-CORRUPTION Komplett Group has a zero tolerance for corruption and is committed to comply with anti-corruption laws and regulations across all its subsidiaries. All of our subsidi- aries explicitly express their commitment to zero corrup- tion through their respective Code of Conducts. In 2023, Komplett Group will prioritise strengthening its anti-corruption policies, with a particular focus on inte- grating NetOnNet’s standards and policies into a unied anti-corruption program. For more information on our approach to the supply chain, please see the section “Supply chain engagement and human rights”. Takeaways from our subsidiaries’ anti-corruption and anti-bribery efforts in 2022: Komplett NetOnNet Komplett’s Code of Conduct provides information on its zero-tolerance policy on bribery and corruption. This is signed by all employees during onboarding. In addition, Komplett has included anti-corruption guidelines in its employee ethics manuals, which all employees must sign. Komplett’s purchasing policy explicitly states its zero tolerance for bribery and corruption. Through the educational platform Learnier, all employees in Komplett must undergo regular courses on corruption risk and business ethics. Komplett Group aims to integrate Webhallen’s managers into these digital courses in 2023. NetOnNet has integrated the zero tolerance for corruption and bribery in both its internal code of conduct, its Supplier Code of Conduct and its supply chain management program. NetOnNet requires all subcontractors to comply with the Supplier Code of Conducts, with the aim to prohibit all forms of corruption, bribery, extortion and embezzlement. In cases where a product supplier has not signed the Supplier Code of Conducts, the suppliers themselves have a stricter policy than NetOnNet’s Code of Conduct. NetOnNet works with an external whistleblowing system that is shared with all employees and all suppliers of private labels to make it easy to report any objectionable incidents. ANTI-COMPETITIVE BEHAVIOUR In 2020, Komplett Group made its anti-competitive behaviour manual available to all employees via the sub- sidiaries’ intranet. Since the implementation, key staff in each subsidiary have received training on the subject. As of 2022, the group has not received any reported cases or claims of anti-competitive behaviour, anti-trust or monopoly practices. KOMPLETT ASA ANNUAL REPORT 2022 60 SUSTAINABILITY REPORT | CUSTOMER PRIVACY AND PRODUCT SAFETY PRIVACY AND DATA PROTECTION Komplett Group is committed to protecting the privacy of our employees and everyone with whom we do business, especially our customers. Our customers submit their personal information when they purchase our products or join our customer club. We are committed to handling this data responsibly. Personal data will only be used for appropriate purposes and processed in accordance with the mandatory policies of EU GDPR which came into effect in 2018. Key takeaways from our subsidiaries’ data protection efforts in 2022: Komplett Webhallen NetOnNet Most of the IT operations of Komplett are run internally. We keep both technical sys- tems and organisational procedures up to date to protect against improper access or misuse, and work proactively to make improvements. All suppliers are subject to strict requirements set out in agree- ments with data processors, with specic instructions to track and regularly report on security risks. All our customer ser- vice staff are trained in the GDPR and are constantly reminded of the importance of high compliance. Komplett conducts spot checks, reviews reports and commissions security tests from external, independ- ent suppliers as required. An e-commerce platform has been developed that includes instructions on how developers should assess data protection and the need for the storage of personal data when devel- oping new systems. A contingency plan has been created in the event of serious incidents. There is also a separate rou- tine for when the security of personal data is breached. In 2022, Komplett did not receive any substantiated complaints about the violation of customer privacy- or the loss of data. Webhallen runs a hybrid IT Operations where a major part of infrastructure is on-prem, in addition to SAAS service. All infra- structure is secured with adequate IT Security soft- ware and hardware, and constantly reviewed and improved if needed. Dur- ing 2022, Webhallen had no identied leaks, thefts or losses of customer data. Webhallen’s primary touch- point for identifying leaks is Customer Service, who has instructions to relay all GDPR related support tick- ets to the IT Department. In general, Webhallen cares for and listens to its cus- tomers. During 2022 there was one complaint from a customer on Data Privacy that resulted in a review of the GDPR policy and a deci- sion to rewrite some parts of the policy during 2023. Most of the IT operations of NetOnNet are run internally. Some systems are operated externally if the system is a SAAS solution. The company has implemented techni- cal systems and routines for handling customer privacy in a responsible manner, and all employees handling cus- tomer service are educated on GDPR. In 2022, NetOnNet recorded a total of 41 identi- ed leaks, thefts or losses of customer data, of which four were reported to the IMY. None of the four incidents reported to the IMY resulted in monitoring. NetOn- Net registered 35 custom- er-identied incidents and no authority-identied inci- dents substantiated com- plaints of breaches and loss of customer data. NetOn- Net registers all incidents regardless of their size. INFORMATION SECURITY Komplett Group is committed to protecting business information and information systems, such as proprie- tary design data, intellectual property of external stake- holders entrusted to Komplett Group, and personal data, from any unauthorised access or misuse. For online visitors to the group’s websites, personal data is collected via Google Analytics. If the visitor does not wish to provide personal data, users can choose to block cookies. Other cookies and tracking pixels, for instance for Facebook and personalisation must be accepted by the visitor. KOMPLETT ASA ANNUAL REPORT 2022 61 SUSTAINABILITY REPORT Subsidiaries’ subscriber statistics for 2022: Komplett Webhallen NetOnNet Komplett Bedrift’s blog has 3000 voluntary subscribers who receive notications on new posts, with each post typically receiving approxi- mately 30000 monthly read- ers. At the end of 2022, Webhallen had 382477 subscribers to its news- letters, which represents 46 per cent of the compa- ny’s members. In 2022, 96 per cent of NetOnNet’s website visitors accepted the use of personal cook- ies. The remaining either left the site or blocked the option for cookies. A total of 77 per cent of the online visitors signed up for newsletters. This amounts to a total of 2 mil- lion people. KOMPLETT ASA ANNUAL REPORT 2022 62 SUSTAINABILITY REPORT PRODUCT SAFETY AND QUALITY CONTROL Komplett Group is at the forefront of delivering high qual- ity products and all our products undergo strict safety assessments. Continuous process improvement is a key priority to meet customer, regulatory and internal quality requirements. Across all our companies, we closely monitor defect rates, the feedback we receive on products, and take action if they fail to meet our customers’ high expectations for quality and durability. For these reasons, we regularly remove products from our shelves that do not meet our customers’ expectations. When we develop new products, the product development team analyses the requirements for functions and the applicable legal regulations, which include the EU Eco-de- sign Directive, to ensure high quality. In addition, a risk assessment process, Product Development test (PD) and Final Quality Control (FQC) tests are conducted, to ensure the safety and user-friendliness of potential new prod- ucts. See next page for more information about PD and FQC tests. Subsidiaries’ reported product safety incidents for 2022: Komplett Webhallen NetOnNet Komplett had no incidents related to product safety in 2022. In 2022, one incident related to product safety was handled by Webhallen. The product was immediately sent to the manu- facturer for inspection, but no fault was found with the product itself. Nevertheless, the partner manufacturer paid all expenses related to the damage. Recalls due to defects amounted to less than one per cent in 2022 and Webhallen had no signicant recalls in 2022. NetOnNet had 11 reported incidents of non-compliance related to the health and safety impacts of products and services, either through customers returning with com- plaints or through self-inspections based on the work mentioned above. For this reason, NetOnNet removed one product from the shelf line. None of these products have violated any guidelines or laws of the country in which they were sold, neither EU nor national laws, but the incidents were based solely on voluntary commitments from NetOnNet. WHISTLEBLOWER PROGRAM Komplett Group’s employees are encouraged to report any misconduct related to the company by using the available whistleblower channels available at our subsid- iaries’ intranet websites. Whistleblower reports are han- dled in accordance with our established whistleblower programs. Reporting concerns can relate to any area, including the environment, human and labour rights, equality and diversity, health and safety, business ethics and anti-cor- ruption, and conicts of interest. These channels aim to prevent discrimination and ensure professional conduct. Reports of misconduct are handled by a whistleblower group in each subsidiary. All reported concerns are inves- tigated to identify root causes and evaluate corrective and preventive actions, including the potential involve- ment of relevant authorities, while maintaining the condentiality of reports in accordance with relevant jurisdiction. To enable anonymous reporting, the group aims to have an anonymous whistleblower channel in each subsidiary, managed by independent third parties. Webhallen aims to establish their channel in 2023. In 2022, no report was made through the group’s availa- ble whistleblower channels. RESPONSIBLE MARKETING In Komplett Group, we take a case-by-case approach to product recalls, as such incidents do not occur frequently. We take all inquiries seriously and have appropriate pro- cedures in place to reach customers through private infor- mation as well as in-store and online advertising. KOMPLETT ASA ANNUAL REPORT 2022 63 SUSTAINABILITY REPORT Subsidiaries’ product recall statistics for 2022: Komplett Webhallen NetOnNet Komplett was found to have infringed the Marketing Control Act and the Financial Agree- ments Act in two separate cases by the Consumer Coun- cil in 2022. However, Komplett complied with the Council’s orders in both cases, and at the end of 2022, one of the cases has been resolved. Webhallen reported no incidents of non-compliance with applica- ble marketing laws and voluntary regulations regarding product information. There were also no non-compliances related to product and service information, labelling, or marketing commu- nications. NetOnNet reported no incidents of non-compliance with applica- ble marketing laws and voluntary regulations regarding product information. There were also no non-compliances related to prod- uct and service information, labelling, or marketing communi- cations. | KEY FACTS ABOUT PD TESTS AND FQC CHECKS PRODUCT DEVELOPMENT TEST (PD) Tests to ensure that each product is of sucient quality, functions according to specications, is user-friendly and does not contain any chemicals that are harmful to health. Any potential devia- tions will require action, which will be provided by the supplier and reviewed by the companies. FINAL QUALITY CONTROL (FQC) Checks before shipments leaves factories, fol- lowing international standards developed to ensure consistent quality. The checks include a visual inspection to ensure that the product is not damaged, that it has correct information such as the serial number and energy label, that the user manual is included, and that the product has been commissioned and all functions tested according to specications. KOMPLETT ASA ANNUAL REPORT 2022 64 SUSTAINABILITY REPORT | SUPPLY CHAIN ENGAGEMENT AND HUMAN RIGHTS SUPPLY CHAIN MAPPING At Komplett Group, we value transparency as a key com- ponent to ensure that the products we sell are of high quality and are manufactured in safe and clean con- ditions with no violations of human rights. We have implemented supply chain mapping throughout all our subsidiaries to identify any potential risks and ensure compliance with our standards. By having a clear under- standing of our supply chain, we can make informed decisions and take necessary actions to reduce our envi- ronmental impact. In 2022, NetOnNet was the only subsidiary of Komplett Group to screen all new suppliers using social criteria based on international guidelines. However, going for- ward, the entire company, including our subsidiaries Komplett and Webhallen, will implement procedures and report on their performance in due diligence for human rights and decent working conditions in line with the OECD guidelines and the Transparency act. NetOnNet aims to screen all new suppliers of private labels against environmental criteria in 2023, as some consumer electronics products may contain conict min- erals or have been collected under working conditions violating human rights (i.e. gold, tantalum, tin and tung- sten). In 2021, NetOnNet initiated a third-party review of its private label products to address this issue. Komplett Group aims for all its subsidiaries to implement a process similar to what NetOnNet has initiated. KOMPLETT ASA ANNUAL REPORT 2022 65 SUSTAINABILITY REPORT Key takeaways from Komplett Group’s subsidiaries’ 2022 supply chain mapping: Komplett Webhallen NetOnNet In 2022, Komplett collaborated with 509 suppliers. Based on revenue, the most popular product categories in 2022 were: PCs Phones Komplett PC Monitors Tablets TVs In 2022, Webhallen collaborated with 754 suppliers. In 2022, NetOnNet collaborated with 167 suppliers. In total, NetOnNet conducted 88 audits in 2022, including both announced and unannounced audits. Of these audits, 26 were conducted at new suppliers. For 2023, NetOnNet has set a target to screen all new suppliers of private labels against environmental criteria. PRIVATE LABEL Our private label lines and products are becoming increasingly popular with our customers. In 2022, Komplett initiated a project to further monitor sourcing partners through audits for compliance with the standards and requirements set out in its Code of Con- duct and the EU Regulations on Registration, Evaluation, Authorisation, and Restriction of Chemicals. This project is still ongoing and will be strengthened in the coming year with the introduction of the 4human TQM Manage- ment System. The new system will provide the company with a platform to improve management of its private label suppliers. Komplett and NetOnNet are working together to consol- idate private label products, and this new system will therefore also feed into Komplett’s routines for monitor- ing sourcing partners. Key takeaways from Komplett Group’s subsidiaries’ 2022 private label lines: Komplett Webhallen NetOnNet Komplett’s procurement part- ners for its private label prod- ucts are F&H, CBK and Calisto. Komplett offers private label products under the brand names Svive, Iiglo, Intono, Khameleon, Komplett PC, 3241 and Protech. Webhallen does not have its own private labels, and source these from NetOnNet and Komplett. NetOnNet’s private labels are sourced through the company’s sourcing oce in Dongguan in China. In 2022, NetOnNet introduced 356 new products. KOMPLETT ASA ANNUAL REPORT 2022 66 SUSTAINABILITY REPORT NETONNET - SUSTAINABLE PRODUCTION LINES ARE KEY TO LONG-TERM GROWTH NetOnNet purchases products directly from global con- sumer electronics manufacturers and from distributors. Asia dominates the production of consumer electron- ics, with China being by far the dominant manufacturing country with 166 active factories in China and 1 in Tur- key. From this perspective, NetOnNet's home markets are small and its ability to inuence global supply chains is therefore also limited. However, as a leading Nordic player, NetOnNet sees the opportunity to inuence the Swedish and Norwegian markets in the right direction through our choices. Using nudging, which means to inuence people’s behav- iour by making it easier for them to make certain deci- sions, NetOnNet aims to encourage its customers to make more sustainable choices and can expand its product range actively through industry collaborations. NetOnNet also has the opportunity to carefully select its collaboration partners, set requirements for sustainabil- ity in the purchasing process, and thereby inuence the sustainability of its product range. The external suppliers NetOnNet purchase from must also adhere to its Supplier Code of conduct, which is based on the UN Universal Declaration of Human Rights, the ILO’s (International Labour Organiation) eight fun- damental human rights conventions on working life, the Convention on the Rights of the Child, UN Global Com- pact, and the OECD Guidelines for the Operations of Multi- national Enterprises. If its suppliers have their own Code of conduct, they must comply with at least the same level and provide NetOnNet with information about its subcon- KOMPLETT ASA ANNUAL REPORT 2022 67 SUSTAINABILITY REPORT tractors upon request. All of NetOnNet’s suppliers have signed NetOnNet’s Supplier Code of conduct. NetOnNet does not conduct physical inspections to verify compli- ance with its Supplier Code of Conduct of suppliers other than its own brands due to lack of capacity. For this rea- son, the expected compliance is clearly stated in its con- tracts. Various types of risks related to the working environment occur in the supply chain. In this regard, NetOnNet places extensive requirements to suppliers, and these are a standard appendix included in its contract to other sup- pliers. This includes requirements for materials, work- ing conditions, and whistleblowing programs, which are thoroughly described in the Supplier Code of conduct. Through its Supplier Code of conduct, NetOnNet ensures that its suppliers contractually regulate these risks, and for its own brands NetOnNet also carries out controls. NetOnNet does, however, experience some diculties in its control of private label distributors, as some large suppliers, such as Apple, have their own Code of con- duct. Moreover, NetOnNet has carried out extensive work to update its policies and training in GDPR in 2022. All employees have access to its GDPR policies on its intranet. NetOnNet’s ability to inuence suppliers of its own brands is greater, even though NetOnNet is only a small customer to most of its factories. NetOnNet has com- mercial agreements with all its 166 suppliers in China, where its Supplier Code of Conduct is a key component. Compliance is ensured through ongoing physical inspec- tions as part of its factory audits. The aim is to inspect each factory at least every two years. Despite restrictions linked to the pandemic in the begin- ning of the year, NetOnNet still managed to carry out 88 audits in 2022. NetOnNet's inspection protocol is based on the standards from ISO and includes approximately 70-100 questions for each of the three areas: Corporate Social Responsi- bility (CSR), Quality Management System (QMS) and Envi- ronmental Management System (EMS). The QMS and CSR were updated in 2021 and the EMS in 2022. The greatest risk associated with CSR is that NetOnNet’s employees are not covered by fundamental rights. There- fore, the updated CSR now covers nine subcategories: Child labour Forced Labour Discrimination Compensation Environment Work environment Health Union Rights Disciplinary action Potential suppliers are scored on all categories during pre-screening. NetOnNet's QMS includes about 70 questions and covers energy, greenhouse gas emissions, air pollution, waste and waste management, chemical management, and environmental compliance for new products. NetOnNet now has a high level of expertise in CSR and QMS. EMS is new to the company, and NetOnNet is gradually build- ing its skills and knowledge. In 2022, ve suppliers were audited using the EMS protocol. In 2023, NetOnNet aims to audit all suppliers regarding EMS. In addition to audits, NetOnNet aims to provide all suppli- ers with mentors who can help them set requirements for their subcontractors, of which there are typically 40-50 per factory. NetOnNet is constantly looking at the pos- sibility of doing inspections on subcontractors as well. However, its suppliers are not allowed to use subcon- tractors that are not approved by NetOnNet. The plan is to conduct inspections of approximately 100 suppliers in 2023 in accordance with the new inspection protocol. This work is followed up by the company’s local dele- gation in China, where the employees are familiar with local conditions. In this context, NetOnNet is pleased to announce that none of its factories had any reported inci- dents of child- or forced labour. Komplett Group's journey to secure transparency With the enforcement of the newly established Transpar- ency Act in Norway, we continue to focus our efforts on increasing transparency and overview at all stages of our value chain to safeguard the people who are impacted by our business. Complying with the standards put forth in the new law is of great importance to our business. Kom- plett Group is currently preparing for increased human rights due diligence from our suppliers. To secure the necessary progress, Komplett has engaged external consultants to assist in the establishment of new procedures. Komplett Group will publish a statement of the due diligence required in the Transparency act before 30 June 2023. The statement will be published at https://www.komplettgroup.com/ KOMPLETT ASA ANNUAL REPORT 2022 68 SUSTAINABILITY REPORT | KOMPLETT CIRCULARITY Komplett Group sees the transition to a circular economy as necessary from a societal perspective and as a great opportunity from a business perspective. By exploring models that contribute to more circular consumption patterns, we aim to contribute to reducing the industry’s impact while strengthening our market position and relationship with customers At Komplett Group, we recognise that the retail busi- ness faces many sustainability challenges. These include resource scarcity, the environmental footprint of resource extraction, and hazardous components that must be safely handled. Additionally, electronic products tend to be replaced frequently. Komplett Group aims to contribute more to business models based on circular models’ principles for optimal reuse and recycling, than on traditional linear production. Our goal is to reduce the use of consumption of natu- ral resources, reduce waste and develop new high-qual- ity electronic products from recycled resources and raw materials. This is an important measure to prevent the loss of valuable resources. As a leading online electronic retailer, our products should be designed to meet a sus- tainable standard where all products are built to last. Our products are designed to meet a sustainable stand- ard for longevity. We continuously work with our suppli- ers to constantly improve the quality and design of our products. We are committed to implementing a sustainable waste management system and ensuring that the products we sell are recollected, handled responsibly, and reused. | CIRCULAR BUSINESS The consumers in the Scandinavian market are becoming increasingly interested in circular services and products. In 2021 Komplett Group introduced solutions to enhance recycling of electronic waste from e-commerce. By partnering with waste management actors in Norway and Sweden as well as our suppliers, we have developed new ways to eciently collect electronic waste from our customers. We have also introduced concepts that offer customers the opportunity to buy, or rent used and remanufactured products and buybacks. In 2022, we developed these solutions and services fur- ther in Komplett, Webhallen and NetOnNet: CIRCULAR ECONOMY RESOURCES WASTE U S E M A K E R E C Y C L E KOMPLETT ASA ANNUAL REPORT 2022 69 SUSTAINABILITY REPORT KOMPLETT FLEX – A PRODUCT SUBSCRIPTION SERVICE In May 2021, Komplett launched FLEX, a service that ena- bles a consumer to subscribe to a product, with an option after 2 years, to either return the used product or keep it. Customers can now choose this service for 1 000 of Kom- plett’s products. This gives Komplett more control over the product life cycle and makes it easier for the con- sumer to dispose of their products. Komplett ensures that returned products are either refurbished and given a new owner or recycled in an eco-friendly manner, align- ing with Komplett Group's goal of promoting sustainable product life cycles. Today, FLEX represents approxi- mately 10 per cent of sales in Norway and Sweden. The aim is to grow FLEX to 50 per cent of Komplett’s revenue. In 2022, Komplett improved the FLEX subscription ser- vice with help of its partners. The use of data and statis- tics was vital in assessing FLEX's sustainability, with the number of products recycled or reused being a key met- ric. The FLEX subscriptions are to be renewed starting in 2023. WEBHALLEN REVIVE - A PRODUCT BUY-BACK PROGRAM Webhallen launched the new buy-back program, Revive, in Sweden in December 2021. The service enables cus- tomers to bring their old mobile phone, iPad or Macbook to Webhallen in exchange for a new one. Based on cri- teria set by Corporate Mobile Recycling (CMR), Webhal- len receives a buy-back value of the product. This value can be used for new purchases or is given out on a gift card. The rst launch was primarily for mobile phones but opened for other products such as computers from Apple in 2022. In 2022 there were a total of 485 trades with an average value of SEK 1 463. The total product value was SEK 709 781. These products are bought by the partner company CMR who sells the products as second-hand products. NETONNET - BUY-BACK AND RENT PROGRAMS Byt in NetOnNet launched their service “Byt in’’ both online and in warehouses in Norway in 2022 and Sweden in 2020. The service enabels customers to purchase used prod- ucts. When a customer turns in their old product, they are either rewarded with a gift card or a discount on a new product. In 2022, 95 per cent of products were reused. In 2022, NetOnNet offered about 8 800 products through the service, worth around eight million SEK. The estimated CO 2 e savings from this service is about 600 tonnes. | THE ESTIMATED CO 2 SAVINGS FROM THIS SERVICE IS ABOUT 600 TONNES NetOnNet's partner, Foxway, purchases NetOnNet's used products, repairs them, and produces spare parts, cre- ating a second lifecycle for the devices. This approach saves energy and resources by avoiding the production of new products. Repairing old equipment saves energy and nite resources that would otherwise be consumed in the production of new products. The remanufacturing and remarketing of used ICT equipment and IT devices ben- et all parties. Partners and consumers receive a work- ing device at a signicantly lower price. In 2022, Foxway received about 8 800 individual products from NetOnNet SE. Only a small percentage of items are sent to recy- cling. The majority of devices are given a new life by being sold to new customers. The collected products are sorted according to their con- dition. Some items do not need much attention and can simply be sent to the 2nd Lifecycle after repair, while oth- ers need to undergo a more thorough repair. To replace broken or worn parts, NetOnNet reuses components from unrepairable products as far as possible before using new parts. Some items are severely damaged and therefore not suitable for 2nd Lifecycle. The items can still be recycled, and the raw materials can be reused. HYRESHYLLAN Through NetOnNet's service “Hyreshyllan” the company provides the customers with an opportunity to rent what KOMPLETT ASA ANNUAL REPORT 2022 70 SUSTAINABILITY REPORT they need for as long as they want. At the end of the rental period, the product is returned, stored, and then offered for rent to other customers. This ensures that the products can be used throughout their lifetime. This service was launched in Sweden in February 2022. After the launch, the project received great media atten- tion and was warmly welcomed by NetOnNet's cus- tomers. The project is still in the testing phase, and a signicant challenge is to nd out whether it is possible to build a sustainable business with the rental model. NetOnNet opened an online outlet in 2022, offering bar- gain and outbound products for sale in addition to items returned by customers. All products for sale in the online outlet are of high quality but cannot be sold as A-grade goods. The initiative has reduced NetOnNet's e-waste by 12000–15 000 items in 2022. KOMPLETT ASA ANNUAL REPORT 2022 71 SUSTAINABILITY REPORT | WASTE MANAGEMENT For Komplett Group, effective and responsible waste man- agement is a top priority in our sustainability strategy. We continually strive to nd solutions to reduce waste in our operations and to help our customers do the same. This includes establishing a sustainable waste system, recovering valuable resources more eciently by incor- porating them into the life cycle of new products and ser- vices. Waste management key gures: Komplett NetOnNet Webhallen Komplett Group Tonnes 2022 2021 2022 2021 2022 2021 2022 Metal and glass 23.4 14 42.5 51.8 7.5 - 73.5 Wood 311.1 378 358.3 434.6 2.5 - 672.0 Plastic 20.4 36 16.9 21.8 16.6 - 48.1 Paper and coardboard 418.7 688 417.1 541.9 148.8 - 984.6 Electronic waste, mixed EE waste 11.6 5 196.4 239.7 20.3 - 228.2 General waste, including food waste 110.4 127 255.5 286.4 42.6 - 408.4 Hazardous waste 0.1 0.14 0.9 0.4 3 - 4 Total 895.7 1 248.1 1 287.5 1 576.5 241.3 - 2 424.5 Numbers are based on HQ Sandefjord (Komplett), Warehouse and e-shop (CWB), HQ, retail Sweden, technical service (Borås) (NetOnNet) and Retail, warehouse, HQ and Cong (Webhallen) In 2022, the total amount of waste in the Komplett Group was approximately 2 424 tonnes. This is an increase from 2021 due to the inclusion of NetonNet and Webhallen in the gure. For the group, the largest waste fractions were paper and cardboard, wood, general waste and electronic waste. All fractions are in general recycled, either as materials or as energy recovery. The total amount of waste in Komplett in 2022 was about 896 tonnes, which represents a decrease of 353 tonnes from 2021. 53 per cent of the waste was recycled, an improvement of 46 per cent over 2021. For Webhallen, the total amount of waste in 2022 was approximately 241 tonnes, 62 per cent was recycled as materials and 36 per cent went to energy recovery. For NetOnNet, the total amount of waste in 2022 was approximately 1 287 tonnes, a decrease from 2021 of 289 tonnes. Most of the waste was recycled, of which 196 tonnes was electronic waste. KOMPLETT ASA ANNUAL REPORT 2022 72 SUSTAINABILITY REPORT | SHARE OF WASTE AND MATERIALS RECYCLED IN OUR SUBSIDARIES IN 2022 Komplett NetOnNet Webhallen 53% 49% 62% KOMPLETT ASA ANNUAL REPORT 2022 73 SUSTAINABILITY REPORT PARTNERSHIPS TO ENHANCE RECYCLING To enhance waste management efforts, we have part- nered up with waste companies. Norsirk handles the e-waste for Komplett and NetOnNet in Norway as well as most of the IT-sector in the country. They aim to develop new methods for the recovery and recycling of elec- tronic products. The partnership provides us with valua- ble insight on how to improve our waste management and recycling. In Sweden, NetOnNet has partnerships with LBC Borås, Stena Recycling and El-kretsen. These partners contrib- ute to recycling and to meet the requirements in the EU Waste Electrical and Electronic Equipment directive. MANAGEMENT OF ELECTRONIC WASTE Products containing electronic materials can be both dangerous and toxic. Therefore, it is very important that these products are recycled when they no longer func- tion or if they are no longer in use. Materials such as lead, chromium, mercury, beryllium, arsenic, and cadmium can be dangerous if not handled properly. There is also a risk if these chemicals get into the soil and water. Komplett Group encourages all customers to return their broken or damaged electronics to us so that we can make sure all e-waste is recycled in an approved manner. In accordance with existing policies on e-waste, we accept all E- and EE-waste free of charge. Customers can bring their old or broken e-waste to one of our ware- houses during normal business hours. For customers who purchased online or are unable to transport it them- selves, they may contact our customer service depart- ment for help, and we offer to send them a delivery bill. Subsequently, they can drop off the item at their nearest post oce. Of the group’s total recycled waste in 2022, 228 tonnes were e-waste. All e-waste is recycled by our partners. Komplett and NetOnNet in Norway are members of Nor- sirk, which has producer responsibility for electron- ics, packaging, and batteries. This means that Norsirk collects these fractions depending on what Komplett imports and puts on the market. Komplett paid NOK 3 972 956 in environmental fees which directly contributed to better management of electronic waste. NetOnNet in Sweden has partnered with Förpackning- sinsamlingen (FTI), Stena, LBC, ElKretsen and Norsirk (Norway). There is an expanded quality work in the pur- chasing department and an expanded collaboration with external partners to dispose of used goods which previ- ously could be seen as obsolete, which led to a reduction of the amount of electronic waste by 18 per cent in 2022, despite an increased focus on collecting used electron- ics from our customers in warehouses. In 2022, NetOn- Net paid NOK 100 288 678 in environmental fees which directly contribute to better management of electronic waste. All Webhallen’s stores have the option of accepting e-waste free of charge. All e-waste is handled by the Ser- vice & Return department who ships it to Stena Recy- cling. Some stores in Malmø use the partner Rang-Sells for the handling of e-waste. Plastic casings are inciner- ated for energy, metal is sent to smelters, and glass is also recycled. Hazardous materials, such as mercury, are disposed of at approved facilities. | CUSTOMERS CAN BRING THEIR OLD OR BROKEN E-WASTE TO ONE OF OUR WAREHOUSES DURING NORMAL BUSINESS HOURS. Komplett GroupWebhallenNetOnNetKomplett ENERGY RECOVERY Per cent 46% 50% 36% 44% KOMPLETT ASA ANNUAL REPORT 2022 74 SUSTAINABILITY REPORT | SUSTAINABLE PRODUCTS AND SERVICES For Komplett Group, it is important to reduce the use of natural resources and develop new high-quality elec- tronic products from recycled resources and raw materi- als. We aim to make our packaging more sustainable and strive to reduce the consumption of materials and the number of non-renewable materials. SUSTAINABLE PACKAGING In 2022 the group used both renewable packaging mate- rials such as cardboard and wood and non-renewable materials like plastics. The aim is to use as much certied material as possible. The most common materials in our packaging are paper, cardboard, plastics, and disposable wooden pallets. Webhallen works to reuse packaging as much as possi- ble to reduce their environmental impact. The main pack- aging supplier, Boxon, is certied with ISO 9001 and FSC, and is assessed by EcoVadis annually. Webhallen has established routines for recycling packaging in all stores and warehouses, and pallets and boxes sent to Webhal- len stores are reused. Products are sent from the ware- houses to the stores, where internal cartons and pallets are used multiple times until they are no longer func- tional. However, reusing packaging brings some chal- lenges in terms of packaging quality. The company therefore works with different recycling quality policies. Komplett and Webhallen’s main suppliers of packag- ing operate with strict environmental policies that are KOMPLETT ASA ANNUAL REPORT 2022 75 SUSTAINABILITY REPORT reected in packaging in a variety of ways. Many pack- ages are for instance made from recycled bres, plastics can be incinerated without producing hazardous gases, or they are members of the Forest Stewardship Coun- cil (FSC), an international organisation that promotes the labelling of products from sustainable forests. NetOnNet has actively worked on its own brand prod- ucts by reducing the proportion of plastic and corrugated cardboard that does not add a protective value to the packaging. The company has enhanced the effective- ness of packaging by reducing airspace. In 2022, NetOn- Net reduced 22 per cent plastics and 23 per cent paper in terms of total weight generated waste. To take this even further, the company has during Q4 2022 worked to develop a new packaging strategy which will be imple- mented in 2023. INITIATIVES TO REDUCE THE USE OF CARDBOARD IN KOMPLETT AND WEBHALLEN Almost all of Komplett and Webhallen products are shipped in cardboard boxes, often lled with a lot of air or with llers like paper or plastics. Up until 2022, all pack- aging has been based on standardised box sizes, where Komplett and Webhallens system suggests which size to use based on the content of each order. Due to the standardised sizes, the boxes are often larger than the products ordered. The use of material and trans- port volume is therefore bigger than necessary. This has been a huge challenge for effective material use and transport, and a big concern expressed by our custom- ers. To handle this challenge, Komplett has introduced new packaging machines at the warehouse in Sandefjord. With the new packaging line in place, as many as 99 per cent of Komplett’s orders leaving AutoStore are shipped without plastic. This has led to an annual 16 to 19 tonnes reduction in our use of plastic. This has signicantly reduced the amount of air being shipped to custom- ers, and decreased the number of trucks and containers transporting our packages by 390 each year. Webhallen has purchased and started to use a new card- board wrapping during 2022. These are used for small goods and it is now possible to send packages with less air and without lling material. The purchases of lling material have decreased most of all material being pur- chased during 2022. Approximately 25 per cent of Webhallen’s orders are being sent in these new cardboard wrappers. The new minimum height that is possible to send is now one centi- metre instead of 10 centimetres. KOMPLETT ASA ANNUAL REPORT 2022 76 SUSTAINABILITY REPORT Webhallen’s new cardboard wrappers have resulted in an estimated decrease of 450 m 3 in volume being sent, lead- ing to a reduction in transport volumes. In addition, the company has experienced a signicant increase in pro- ductivity since implementing these boxes. REUSE OF PACKAGING MATERIALS Some of Komplett’s suppliers use Styrofoam as a packag- ing material to protect their products before they arrive at the warehouses. Through an innovative collaboration with Norsirk, Komplett has been able to reduce the amount of Styrofoam that gets thrown away. Komplett reuses the Styrofoam to package other products. That way, the mate- rial is repurposed, and as a result, gets a longer lifespan. Webhallen has established routines for recycling pack- aging in all stores and warehouses. Many products are sent from the warehouses to the stores, where internal cartons and pallets are used multiple times until they are no longer functional. However, reusing packaging brings some challenges in terms of packaging quality. Webhal- len works with different recycling quality policies where, for instance, large cartons, which are not defective or have affected strength, are reused two to three times for internal deliveries. NetOnNet’s upcoming packaging strategy for 2023 will include measures for extended use of recycled materials. Material use for Komplett, Webhallen and NetOnNet in 2022: In tonnes Komplett NetOnNet Webhallen Cardboard and paper 580.3 173.8 134.4 Single-use wood pallets 113.9 238 94.5 Plastics 181.6 25.6 19 Steel 11.4 - 0.02 Total 875.8 437.3 247.9 KOMPLETT ASA ANNUAL REPORT 2022 77 SUSTAINABILITY REPORT KOMPLETT ASA ANNUAL REPORT 2022 78 SUSTAINABILITY REPORT | KOMPLETT ENVIRONMENT Komplett Group recognises that the transition to a low-carbon society presents both challenges and opportunities for development. The group welcomes the transition and aims to contribute by reducing its own emission and seek to help customers make environmentally friendly choices. | CLIMATE AND NATURE IMPACT In 2022, the group has prioritised improving the data quality in our climate accounts and continued mapping the organisation’s GHG emissions, including all its subsid- iaries in the process. 2022 marks the rst year we report on all our subsidi- aries’ climate accounts, and we have dedicated signi- cant time and effort to improve the quality in our climate accounts, including the use of recognised and updated conversion factors. This has resulted in some changes in historical gures, and as we now include all subsidiaries, comparisons with previous periods are of less relevance in 2022. We enlisted the help of a third party to assist with our 2022 climate account. Additional details on the account- ing methods and ndings can be found in their report on page 104. CARBON ACCOUNTS In 2022, Komplett Group made signicant strides towards reducing its carbon footprint, including increas- ing its use of renewable energy sources and minimising travel activities across its subsidiaries. Komplett Group has a relatively low direct carbon footprint in a global context. However, the carbon footprint of our value chain, is signicant and represents 85.5 per cent of our carbon footprint, as our scope 3 emissions represent 85.5 per cent of our carbon footprint. While we have been able to collect data from more sources than previous years, we acknowledge that there are still weaknesses concerning our carbon account for 2022. We have not been able to map our entire climate footprint, especially emissions from our upstream trans- portation and distribution. Despite this, many areas of the organisation have improved data collection processes, resulting in improved data quality. We still have a long way to go in structuring and streamlining our routines to ease data collection, and we will continue to improve the extent of our reporting going forward. Total GHG emissions t CO 2 e 2022 Komplett 1525.2 NetOnNet 3174.1 Webhallen 383.4 Total 5 082.6 Includes scope 1,2,3 (Source: Cemasys). Scope 3Scope 2 location based Scope 1 KOMPLETTGROUPGHG EMISSIONS PER SCOPE2022 Tonnes COe 102 633 4 348 (Source: Cemasys) KOMPLETT ASA ANNUAL REPORT 2022 79 SUSTAINABILITY REPORT Komplett Group’s carbon accounts includes the following sources of GHG emissions Direct emissions (Scope 1): Emissions from the use of fuel oil and gas for heating and processes, as well as from the production of dis- trict heating at Komplett Group’s storages. Indirect emissions from electricity (Scope 2): Emissions from electricity consumption and dis- trict heating or cooling from external suppliers. The CO 2 emission factors used for electricity are loca- tion-based and in accordance with GHG Protocol Scope 2 Guidance. Indirect emissions (Scope 3): Included emission sources are waste, fuels and ener- gy-related activities, business travel, upstream trans- portation, and distribution, as well as purchased goods and services. Scope 1 Komplett Group’s Scope 1 emissions stem from the fuel combustion from leased vehicles and refrigerants. The total of Scope 1 emissions was 102 tCO 2 e, which is two per cent of the share of total emissions. Komplett Group has no stationary combustion. Scope 2 Komplett Group’s Scope 2 includes emissions from acquired electricity, heat, and cooling in oces, ware- houses, and stores. The total GHG emissions in Scope 2 stands for 12.4 per cent of Komplett Groups’ total emis- sions with a total of 633 tCO 2 e. The total energy consumption related to all scope 2 emis- sions was 18 129.7 MWh. Energy from electricity and heat- ing at our owned and leased locations makes up most of our total energy consumption and scope 2 emissions. For 2022, it has been particularly dicult to collect energy consumption data from our operations at Web- hallen in Sweden. Webhallen has gone through multiple changes over the past year including changes in the staff responsible for data collection which might have affected the data quality. In 2023, the group will evaluate our reporting and data collection routines to ensure that we report the most correct and precise data every year. Scope 3 Komplett Group’s Scope 3 emissions stands for a total of 85.5 per cent of the total carbon footprint. Upstream transportation and distribution accounted for the larg- est share of emissions, representing 55 per cent of the total GHG emissions for the group. The second larg- est category was purchased goods and services, which accounted for 25 per cent of the emissions and included emissions from the production of materials used for packaging. Other Scope 3 emissions were waste (2 per cent), fuels- and energy-related (3 per cent) and business travel (1 per cent). It should be noted, however, that the Scope 3 emissions are not yet complete or fully mapped, and as more emis- sion sources are included in the carbon accounting, the distribution of emissions per category is likely to change. To address this, Komplett Group is committed to expand- ing the Scope 3 emissions to include more emission sources and improving data quality going forward. This is critical to track the emission pathway and increase the comparability of emissions over time, enabling the set- ting of meaningful mitigation targets. Scope 3: Upstream transportation and distribution Scope 3: Purchased goods and services Scope 3: Fuel and energy related activities Scope 3: Waste Scope 3: Business travel Scope 2: Electricity Scope 2: DH Nordic locations Scope 2: Electric veichles Scope 1: Transportation Scope 1: Refrigerants TOTAL GHG EMISSIONS PER CATEGORY2022 Tonnes COe 85 347 285 1 253 128 121 2 787 58 17 0 Source: Cemasys (location-based reporting). KOMPLETT ASA ANNUAL REPORT 2022 80 SUSTAINABILITY REPORT Key gures GHG emissions Category Unit Total group Komplett NetOnNet Webhallen Scope 1 Transportation total tCO 2 e 85.3 7.6 77.8 - Refrigerants total tCO 2 e 16.9 - 16.9 - Scope 1 emission tCO 2 e 102.3 7.6 94.7 - Scope 2 District heating location total tCO 2 e 285.2 221.2 64 Electric vehicles total tCO 2 e 0.2 0.2 Electricity location-based total tCO 2 e 347.1 120.2 189.2 37.7 Scope 2 emission tCO 2 e 632.5 120.2 410.6 101.7 Scope 3 Waste Total tCO 2 e 121.3 71.6 27.5 22.2 Fuel-and-energy-related activities total tCO 2 e 128.4 10.3 84.2 33.9 Business travel total tCO 2 e 58.3 30.2 28.1 - Upstream transportation and distribution total tCO 2 e 2 787.2 235.8 2529 22.5 Purchased goods and services total tCO 2 e 1 252.6 1 049.6 - 203.1 Scope 3 emission tCO 2 e 4 347.8 1 397.5 2 668.8 281.7 Total (scope 1 + 2) tCO 2 e 734.8 127.8 505.3 101.7 Total emissions (scope 1 + 2 + 3) tCO 2 e 5 082.6 1 525.2 3174.1 383.4 Annual market-based GHG emissions Category Unit Total group Komplett NetOnNet Webhallen Electricity total (scope 2) with market-based calculations tCO 2 e 1 920.7 1 136.2 398.5 386.0 Scope 2 total with market-based electricity calculations tCO 2 e 2 206.0 1 136.2 619.9 449.9 Scope 1+2+3 total with market-based electricity calculations tCO 2 e 6 656.1 2 541.2 3 383.4 731.6 (Source: Cemasys) Upstream transportation and distribution As an e-commerce actor, transport logistics is an exten- sive part of our business. This means that we transport large quantities of goods every day. We recognise that our impact from the upstream transportation and dis- tribution is our largest contributor to GHG emissions as it counts for over a half of the total Group emissions of 2022. Komplett Group works with several small and large cou- rier suppliers for our outgoing transportation in Sweden, Denmark, and Norway, as well as several suppliers and producers who deliver products to our warehouses. In 2022, we have increased our efforts to collaborate with our delivery suppliers and to nd collective solutions to this mutual industry challenge. Webhallen’s transports, both internally and with part- ners, must be carried out in the most climate-friendly way possible. Solutions like biodiesel, ecient packaging to reduce the number of transports, or optimised transpor- tation routes to reduce fuel consumption are key. All out- going shipments are handled through the warehouses, where Webhallen cooperates with various transportation partners. Through participation in the branch-initiative “Fossil free deliveries” driven by Svensk Handel, NetOnNet works towards fossil-free deliveries with the goal of becom- ing fossil-free somewhere between 2025 and 2030. The transporters “Best” and “Instabox” are already operating fossil-free, but the partner PostNord are experiencing diculties due to their community mission and cannot KOMPLETT ASA ANNUAL REPORT 2022 81 SUSTAINABILITY REPORT yet drive exclusively fossil-free in all areas of Sweden. Moreover, NetOnNet will in 2023 take part in a research project in Sweden, which sets out to research the envi- ronmental footprints of e-retail versus physical stores. ENERGY CONSUMPTION Komplett Group uses energy in the form of electricity, district heating and during transportation. Total con- sumption of electricity in 2022 was 12 388.8 MWh. The total use of energy from district heating and was 5 734.1 MWh, represented 31 per cent of total energy consump- tion and 6 per cent of Komplett Groups total emissions (285.2 tCO 2 e) Energy consumption key gures MWh 2022 Komplett 4 652.9 NetOnNet 10 996.4 Webhallen 2 869.9 Total 18 519.1 (Source: Cemasys) The group has an ambition to reduce energy consump- tion and establish more renewable sources for energy generation at our locations. In 2022, Komplett had a total renewable energy share of 75.5 per cent, NetonNet had a total renewable energy share of 61.1 per cent, and Web- hallen had a total renewable energy share of 60.1 per cent. NetOnNet uses green electricity at all properties where the company is free to decide the electricity supplier. LED-lightning was installed a few years back in all our stores in Sweden. For the stores in Norway this is still in process. Going forward, NetOnNet aims to increase its share, and will look into the possibilities of solar panels going forward. Key gurures energy Category Unit Total group Komplett NetOnNet Webhallen Scope 1 Transportation total MWh 389.5 29.9 359.6 - Refrigerants total MWh - - - - Scope 1 total MWh 389.5 29.9 359.6 - Scope 2 District heating location total MWh 5734.1 - 4 315.3 1 418.8 Electric vehicles total MWh 6.7 - 6.7 0 Electricity total MWh 12 388.8 4 623 6 314.7 1 451.1 Scope 2 total MWh 18 129.7 4 623 10 636.7 2 869.9 Total energy MWh 18 519.1 4 652.9 10 996.4 2 869.9 GJ 66 668.9 16 750.3 39 586.9 10 331.7 Scope 1 renewable energy MWh 53.2 - 53.2 - Scope 1 renewable energy share % 13.6% - 14.8% - Scope 2 renewable energy MWh 11 899.7 3 513.5 6 662.5 1 723.7 Scope 2 renewable energy share % 65.6% 76% 62.6% 60.1% Total renewable energy MWh 11 952.9 3 513.5 6715.7 1 723.7 Total renewable energy share % 64.5% 75.5% 61.1% 60.1% Percentage change 8% Komplett sources about 8 per cent of its energy in Norway from renewable solar energy, gener- ated by its installed solar panels at its warehouse in Sandefjord. KOMPLETT ASA ANNUAL REPORT 2022 82 SUSTAINABILITY REPORT | FEWER RETURNS – LESS TRANSPORTATION The high return rate within the e-commerce business is receiving increased public attention because of its negative climate impact. Komplett Group strives to reduce the return rate to a mini- mum serving both our business and the environ- ment by reducing our emissions. This requires us to ensure that our customers receive the correct products with the expected standard and qual- ity. Detailed descriptions of our products, along with reviews from other customers, play a part in maintaining low return rates. Return rates MWh 2022 2021 Komplett 2.1% 2.1% Webhallen 2.0% 2.2% NetOnNet 3.6% 3.3% KOMPLETT ASA ANNUAL REPORT 2022 83 SUSTAINABILITY REPORT KOMPLETT ASA ANNUAL REPORT 2022 84 SUSTAINABILITY REPORT | KOMPLETT TOLERANCE Our employees contribute to the continuous development and growth of our company, and their safety and well-being are key to our success. It is our top priority that our employees feel responsibility, security, and motivation. We want to be an employer where managers, in their respected role, create the conditions for employees’ development and success. We strive to be a driving force for safety, equality, and diversity. Through our strategic principle of tolerance, these are integral to our sustainability strategy and are implemented throughout the entire Komplett Group. Promoting these principles commits us to ensure diver- sity and safety in our organisation and to actively work to include people with different backgrounds, characteris- tics, and experiences. We continually strive to create and maintain an inclusive and uplifting work environment that ensures motivated, active, and healthy employees who are committed to our vision and values. As a group that relies on many suppliers, some from regions with a higher risk of human and labour rights vio- lation, we recognise that we have an important responsi- bility to manage and document our social impact beyond our own direct operations. Promoting digital inclusion is another important part of our sustainability strategy, as we see it as crucial to creating equal opportunities for all groups in society. Through innovative solutions and our position as the leading online retailer of electronic products in Scandi- navia, we aim to make technology and digital services accessible to all. Komplett Group aspires to be a desired employer with high integrity, both internally and externally. To achieve this, we work systematically to create a good and safe working environment for all our people in our supply- and value chain, and to ensure that we always act ethically as a company. | EMPLOYEE HEALTH The health, safety and wellbeing of our employees is of paramount importance to Komplett Group. Our occupa- tional health and safety management systems are being developed on an on-going basis. Through regular training and development of routines and procedures, Komplett Group actively works to prevent harm and promote health at work. Our warehouse routines and mitigation efforts are reg- ularly assessed to secure the safety and welfare of employees. Non-conformities are reported and man- aged, and measures are taken to prevent similar inci- dents in the future. HEALTH AND SAFETY NetOnNet has an ambition to have a sick leave per cent- age below 5.5 per cent , Komplett 4 per cent and Webhal- len below 6 per cent in 2023. The Covid 19 pandemic continued to impact our lives and work environment in early 2022. It was important to maintain the safety measures implemented in 2020 and 2021 to prevent contagion and illness among our employ- ees. All administrative tasks were delegated to the home oces during the most restrictive times of the year to maintain normal operations and protect our critical oper- ations from further infections. During the course of the year, however, we are pleased that the impact of the pan- demic on our business and people decreased, and we were able to return to normal operations. KOMPLETT ASA ANNUAL REPORT 2022 85 SUSTAINABILITY REPORT At Komplett Group we are systematically striving to reduce occupational and health-related risks. Komplett, Webhallen and NetOnNet have occupational health and safety policies and guidelines based on national laws and emphasise the managers’ obligation to act respon- sibly. Our managers are responsible for ensuring that all internal policies and legal requirements for occupa- tional health and safety are complied with. Each of our locations have health and safety representatives who, in cooperation with managers, regularly review work- ing conditions to ensure the safety and well-being of our employees. The risk of occupational accidents in the Komplett Group is highest in logistics and in our ware- houses, where vehicles and several people are in circula- tion. Komplett Group’s warehouse routines and risk miti- gation measures are regularly reviewed to ensure the safety and well-being of our employees. Occupational health and safety issues are discussed on a regular basis in various committees, as well as with works council representatives, safety representatives and manage- ment representatives at the various levels of the com- pany. In addition, health and safety training is part of the on-boarding process. Komplett Group has established whistleblower programs in each subsidiary. To allow for anonymous reporting, the group has one anonymous whistleblower channel in each subsidiary. At Komplett and NetOnNet the channels are managed by independent third parties. For more informa- tion on our whistleblower program, see page 63. Komplett’s work on safety is led by a protection commit- tee consisting of managers and employees from different areas of the company and meets quarterly. Violations are reported and addressed on an ongoing basis, and meas- ures are taken to prevent similar incidents in the future. All warehouse employees are required to wear safety shoes, and Komplett provides in-house training on equip- ment and forklift operator requirements. All deviations are registered in the management system TQM, where an email is sent to the responsible manager who must close any deviations. Komplett is a member of the Occupational Health Services and provides health insurance for its employees and a massage therapist in the workplace. Webhallen has integrated injury reporting systems in its warehouses. Webhallen currently uses ADAPT as its system for reporting health and injury incidents. These reports are sent to safety representatives and manage- ment. Webhallen’s injury risk assessments are reviewed two to three times a year. For each reported case, Web- hallen creates an action plan for its warehouses to pre- vent repetitive and frequent injuries. In 2022, Webhallen conducted a comprehensive and thorough review of re safety in all its stores. All manag- ers, safety representatives, and leaders receive annual training on re safety and routines. In 2023, Webhallen plans to conduct an overall risk assessment and implement routines to improve how it communicates its policies to its employees. All manag- ers will be trained in SAM (systematiskt arbetsmiljöar- bete) and labour law. Webhallen will continue to roll out its SAM action plan with training, appointing safety rep- resentatives and regular health and safety check-ups throughout the year. Webhallen’s system ADAPT will serve as an enabler and regulator in ensuring it complies with existing laws and regulations. In 2022, NetOnNet converted its HR system and digitised several of its HR and payroll processes through SD Worx. Digitising these processes has allowed the company to reserve more time in 2022 and future years for value-cre- ating tasks. NetOnNet’s HR policy is primarily a support for managers and summarises how NetOnNet works with a wide range of HR-related issues, from recruit- ment, employee health, diversity and inclusion to targets, skills development and working conditions. All NetOn- Net’s employees have received training on these policies. All truck drivers must undergo training each year, where they are obliged to conduct an assessment with the safety representative each year. In addition, all NetOn- Net’s employees have participated in workshops to famil- iarise themselves with and sign its Code of Conduct. Good leadership is an important tool in creating a good work environment where employees can develop and thrive. NetOnNet’s leadership is relationship-based and insight-driven. Leaders must build relationships with KOMPLETT ASA ANNUAL REPORT 2022 86 SUSTAINABILITY REPORT their own employees by being responsive to them and caring about their personal and professional well-being. All leaders and managers meet three times per year to discuss the work environment. This is complemented by weekly surveys of all employees on how they experience their work situation through Winningtemp. NetOnNet continuously works on risk assessment related to health, safety, and well-being. All serious workplace accidents and risks are addressed and evaluated. The system applies to all of NetOnNet’s organisational units in Norway and Sweden. In the case of any organisational changes, both Webhal- len and NetOnNet conduct thorough risk assessments, including looking at the pace of changes, how this affects the relevant department, cooperation between depart- ments, safety, and consequences for the work environ- ment. These risk assessments are conducted and applied by management, HR and safety representatives. EMPLOYEE SATISFACTION Komplett Group values feedback from our employees and believes we can use this information to ensure our employees thrive in the workplace. To engage with our employees and measure employee satisfaction, Komplett Group makes use of the AI soft- ware Winningtemp. The tool helps us measure indicators such as leadership, employee satisfaction, work situa- tion, and personal development, and serves as a channel for feedback. Surveys are sent to all employees regularly. KOMPLETT ASA ANNUAL REPORT 2022 87 SUSTAINABILITY REPORT Rating of employee satisfaction: Komplett Webhallen NetOnNet Average rating 7.4 out of 10 7.3 out of 10 7.3 out of 10 Change from 2021 - N/A +6.9% Response rate 86% 72% 53% * Winningtemp was introduced in April 2021 Webhallen is pleased to report increased score on “Team feeling" from 7.8 to 8.2 and “Personal develop- ment” from 6.1 to 6.6. Its NPS score has also increased from –5 to 11. The average score of Webhallen has increased by 0.4 in each measured category compared to the previous year. To improve its scores in 2023, Web- hallen plans to conduct an additional employee sur- vey, followed by customised action plans for each team and manager. This process will be repeated annually to track progress. The company is particularly focused on improving in the area of "Personal development" in Win- ningtemp, but also aims to improve in other areas. Both at Komplett and NetOnNet “Team feeling” is one of the categories that consistently receives high scores from employees during annual check-ins (8.1 out of 10). We continuously work to improve the response rate in all our subsidaries, and NetOnNet has initiated a project in order to increase the response rate in 2023. The data obtain from the employee surveys are systematically reviewed and appropriate measures are taken to continu- ously improve the work environment. Komplett established the Komplett Employee Advisory Board in 2021. The role of the Employee Advisory Board is to provide input from our employees and implement actions that have been agreed upon with the manage- ment team. Employees at all levels of Komplett's busi- nesses are involved in and can identify with the 2025 Corporate Strategy. Komplett's aim is to improve the overall satisfaction, commitment, and well-being of its employees. Komplett's work with this board has contin- ued in 2022, and it is committed to use the group's stra- tegic principles to translate these responses into action items for 2023. FREEDOM OF ASSOCIATION An important prerequisite for the well-being and safety in our organisation is respect for the fundamental human rights of our employees. Komplett Group fully supports the right of workers to freedom of association and col- lective bargaining as enshrined in the International Labour Organisation’s Core Convention. Operating in a labour-intensive industry, we understand and recognise the importance of unions in protecting the rights of our workers and creating a cooperative and safe work envi- ronment. In 2022, 64 employees in Komplett were unionised and a total of 124 employees were covered by collective bar- gaining agreements in Norway. In Sweden, employees are aliated with the Unionen (administrative employ- ees) and Handels unions (store and warehouse employ- ees), while in Norway employees are aliated with the EL & IT Forbundet and Fellesforbundet. Komplett Group is a member of the employer associations NHO Service, Virke (in Norway) and Svensk Handel (in Sweden). | AN IMPORTANT PREREQUISITE FOR THE WELL-BEING AND SAFETY IN OUR ORGANISATION IS RESPECT FOR THE FUNDAMENTAL HUMAN RIGHTS OF OUR EMPLOYEES. KOMPLETT ASA ANNUAL REPORT 2022 88 SUSTAINABILITY REPORT | DIVERSITY AND INCLUSION Komplett Group is committed to being a preferred employer and to providing equal opportunities at all lev- els of our organisation. We always seek to ensure that our employees enjoy their work and feel valued for what they do. As a company that is constantly looking to grow and improve its services, we value diversity as essential to developing new ideas and solutions that will lead our company into the future. Moreover, we welcome people who have fallen on the outside a way back into working life where they can develop and thrive. We welcome people with different backgrounds and ways of thinking to cre- ate a dynamic and organic work environment where our employees feel comfortable and thrive. Discrimination or harassment based on gender, nationality, ethnicity, lan- guage, sexual orientation, age, or religious and political beliefs will not be tolerated in any part of our organisation. Our zero-tolerance policy is reected in the fact that no incidents of discrimination were reported in 2022. To actively work to promote diversity and inclusion, as well as develop and retain existing skills and attract quali- ed employees, Komplett Group offers competitive com- pensation packages. We offer good insurance schemes and a comprehensive human resources policy. We believe that the combination of competitive compensation and comprehensive policies that promote a positive and engaging environment makes us a desired employer. At 31 December 2022, Komplett Group had a total of 1 955 permanent employees, a signicant increase from a total of 755 in 2021. The signicant increase from last year is mainly due to the inclusion of NetOnNet in the gures. Total number of employees in 2022 Head count Komplett 363 NetOnNet 1 278 Webhallen 287 Ironstone (72.15% ownership) 27 Total 1 955 * Full-time employees in average during 2022. KOMPLETT ASA ANNUAL REPORT 2022 89 SUSTAINABILITY REPORT Our team continues to grow and develop. Throughout 2022, Komplett Group welcomed 205 new employees, 138 men and 67 women. The average turnover rate in our sub- sidiaries was 24 per cent in 2022. Parts of our business, particularly logistics and cus- tomer service, are subject to signicant seasonal and volume-related uctuations. As a result, we rely on the support of temporary staff during the busiest times of the year. In total, the group had 328 temporary employees hired during 2022. Collecting HR data from various departments has been challenging in previous years due to an outdated system that required manual calculations. To address this, Kom- plett Group implemented the CatalystOne HRM system in September 2022, solving many of the previous chal- lenges, despite still being in the early implementation phase. Komplett: 27%Women 73%Men NetOnNet: 35%Women 65%Men Webhallen: 29%Women 71%Men | KEY DIVERSITY FIGURES FOR KOMPLETT GROUP 2022 (HEAD COUNT) 1 955 Employees total 205 New hires AGE DISTRIBUTION OF NEW HIRES: Age <30 119 Age 30-50 82 Age 50+ 4 KOMPLETT ASA ANNUAL REPORT 2022 90 SUSTAINABILITY REPORT 328Employ- ees temporary EQUALITY AND DIVERSITY In 2022, the average share of female employees in Kom- plett Group was 32 per cent, which represents an increase of 5 percentage points from 2021. The increase is due to the higher share of women in NetOnNet. The gender imbal- ance is mainly due to several departments, such as ware- housing and logistics, being traditionally considered male domains. However, the imbalance varies between depart- ments; in some areas of our business, particularly in administrative positions, women and men are equally rep- resented. Obtaining an improved gender balance will be an important focus area for the subsequent years for the group. Komplett supports and participates in the SHE Index ini- tiative to contribute to transparency in gender equality. Komplett’s operation in Norway received a high SHE- score for the year 2022, with an increase of 12 points compared to the previous year. At Komplett Group, we strive to encourage both parents to use their available parental leave. We believe that by providing good conditions for parental leave, we facilitate the phase of life adjustment and enable an equal every- day life that allows both parents to play a caring role in the family. In 2022, a total of 115 employees took paren- tal leave, including 135 men and 95 women. The aver- age number of weeks of parental leave was 36 weeks for women and 12 weeks for men. | WE STRIVE TO ENCOURAGE BOTH PARENTS TO USE THEIR AVAILABLE PARENTAL LEAVE. Pay gap statistics in our subsidiaries 2022: Komplett Webhallen NetOnNet At Komplett, male employees earn on average 1.3 per cent more per year than female employees, not including CEO compensation. This must be seen in the context of the gender distribution in the company. Women tend to hold more administrative positions, while men make up a larger proportion in our warehouse and logistics departments.However, when looking at management levels (L1- L3), women earn on average 7.3 per cent more than men. In line with its commitment to promoting fair and equitable compensation practices, Webhallen has set a goal to conduct a comprehensive analysis of salaries in 2023. This analysis will provide a more complete overview of the company’s compensation practices and allow for the identication of any areas in need of improvement. Based on the ndings of this analysis, Webhallen will take necessary initiatives and actions to ensure that its employees are fairly and equitably compensated. This includes addressing any gender, racial, or other disparities that may be present in the company’s compensation practices. NetOnNet has a strong focus on gender equality. On an overall level, NetOnNet consists of 35 per cent women and 65 per cent men. At management level, the balance is 38 per cent women and 62 per cent men. As part of NetOnNet’s work on equality, it updated its hiring policies in 2021. NetOnNet also implemented a sustainable recruitment training program in 2022, where equality is a central focus. This includes recruitment guidelines with the overall goal of balanced workgroups, meaning that at least one member of the underrepresented gender of the workgroup being recruited should be among the nal candidates. However, nal hiring decisions are always made based on how candidates will strengthen the company by meeting short- and long-term needs. KOMPLETT ASA ANNUAL REPORT 2022 91 SUSTAINABILITY REPORT For further information about diversity and inclusion in Komplett Group 1 , see "Number and statistics" on page 98. DIGITAL INCLUSION As a leading provider of digital technologies in Scandi- navia, Komplett Group uses its position to promote dig- ital inclusion. We continuously work on innovations and well-designed services, and occationally introduce initia- tives to include all groups in society. The group works to develop its websites in line with uni- versal design. Universal design is based on the idea that services should be accessible to everyone, regardless of age, functional ability, or education. We have already appointed a Universal Design Lead among our developers and have held workshops to provide insight and aware- ness. Our goal is to be a leader in universal design and keep availability as part of our digital inclusion strategy. 1 Komplett Group is present in both Sweden and Norway and different legal framework applies when it comes to equality and inclusion in Norway and Sweden. Komplett Norway,i.e. Komplett Services AS, has initiated a process to report on its systematically work to promote diversity and combat discrimination following the the four mandatory steps outlined in Norwegian law, in the Equality and Anti-discrimination Act: (1) risk assessment, (2) analysis of identied risks, (3) implementation of appropriate measures, and (4) evaluation of results from steps 1-3.. The statement will be posted at the company’s website. We promote gaming as an important arena for learning, development, and social networking where everyone should be able to participate. As one of the largest suppli- ers of gaming equipment, Komplett Group invests heavily in gaming and e-sports in the Nordic countries. We want to use our position to counteract the negative image of gaming in many parts of society by showing that gaming is an important activity with a positive impact on the lives of many people. Another important aspect of this issue is ensuring a gen- der-equal gaming and esports environment. The number of female gamers is still signicantly lower than that of men, and many girls and women who participate in gam- ing are subject to prejudice and harassment. Komplett Group is committed to using its position to create a safe and welcoming space for all who want to participate in gaming. As part of our philanthropic work, gaming makes an important contribution. Our annual initiatives include “Gamers against Cancer’’ in Norway and “Webhallen festi- val” in Sweden. KOMPLETT ASA ANNUAL REPORT 2022 92 SUSTAINABILITY REPORT | COMPETENCE DEVELOPMENT Komplett Group believes that skills enhancement is an important prerequisite for a successful business. The ben - ets are twofold: It is an important requirement for the well-being of our employees to develop and challenge them - selves, and it is an important investment in our company. At Komplett Group, training our employees is critical to ensure they are adequately prepared for their role as part of the team. In addition to mandatory safety training and new employee onboarding, we offer training courses in GDPR, ergonomics, customer management, and sales to all employees who wish to improve and expand their knowledge. All employees are offered courses on the company’s environmental policy. Training and education can not only motivate our employ- ees, but also build the necessary skills within the com- pany. Komplett’s Logistics School was established in 2019 together with its external partner Fønix. It has also developed a modular logistics course for the purchasing department. Komplett is in the planning phase of establishing a pro- gram for identifying and developing talents in the organi- sation. The program will be developed in 2023. As part of its initiatives in our local community of San- defjord, Komplett has been working with Sandefjord High School since 2014 as part of the 4S partnership, in offer- ing apprenticeships for students. The students, who typi- cally start at the age of 15-16, are given the opportunity to work as apprentices in various areas of the company for two years. In 2022, two apprentices passed their appren- ticeship exams, and Komplett still has four apprentices who will continue their training until 2023. By partici- pating in the program, students earn a general univer- sity entrance qualication or a vocational qualication in sales and oce administration. Webhallen has implemented several arenas for employee skills development and will launch new skills develop- ment programs in 2023, such as sales trainings, leader- ship trainings and trainee programs. All employees will have a unique development plan, related to their work. This plan will be reviewed and fol- lowed up regularly during the year and revised annually. A new onboarding process is being implemented to ensure the best possible employee experience. The rou- tine includes both administrative, informative and inclu- sive actions. Throughout Webhallen’s organisation, it conducts per- formance appraisals for all employees and talent assess- ments at various levels through our HRM. In the second half of 2022, it also set out to track these talent reviews more closely. Webhallen has integrated processes for offboarding, which include “exit conversations” as a ser- vice to the employees. This has proven to be helpful as the company is dominated by many younger employees who can use the feedback from exit conversations as they take on new roles in the future. Through Webhallen’s Internal Warehouse Leadership Program, all warehouse employees can receive training to become team managers. This program is implemented to secure succession and nd and evaluate talents in real working environments. Additionally, this is an effective method to ensure that it has enough highly skilled leaders during peak periods. Webhallen is also looking forward to the launch of its online leadership training program, which will be rolled out to all managers in 2023. Continuous skill development is important to NetOnNet, and all systems, onboarding programs and other training programs apply to all employees, regardless of their posi- tion. A digital learning platform was introduced in 2021. At this learning platform, employees have access to a digital course catalogue that NetOnNet is constantly adding new courses to. Through this tool, NetOnNet has digitised its onboarding program, dened training requirements, and held digital lectures. NetOnNet has thorough onboarding processes, where all new employees undergo mandatory onboarding courses, depending on their position. Through its HR-system, a full list of checkpoints is sent to their manager with a pro- gram for their onboarding. Additionally, all new employ- ees are also included in its Winningtemp systems. All employees have access to how NetOnNet works with these issues through the company’s intranet. In 2022, NetOnNet launched its sustainable development training program. The company’s skills development routines are complemented by cycles of conversations in which it carries out annual conversations with all its employees. In these conversations, the work situation as well as goals and development are discussed, and at least one skills development goal must be dened. KOMPLETT ASA ANNUAL REPORT 2022 93 SUSTAINABILITY REPORT | AT KOMPLETT GROUP, TRAINING OUR EMPLOYEES IS CRITICAL TO ENSURE THEY ARE ADEQUATELY PREPARED FOR THEIR ROLE AS PART OF THE TEAM. KOMPLETT ASA ANNUAL REPORT 2022 94 SUSTAINABILITY REPORT | COMMUNITY ENGAGEMENT INITIATIVES At Komplett Group, we are dedicated to giving back to our communities and contributing to society. We aim to con- tribute to the development of local communities through offering jobs, supporting local businesses and initiatives and by trying to be good neighbours. Managers at Komplett lecture at Gokstad Akademiet, a lifelong education academy near our headquarter. Every year, employees may apply for funding for activi- ties (sports clubs etc) they are involved in from “Komplett sponsorfond” (sponsorship”). Broad and visible engage- ment in our local community is our focus going forward. Komplett initiated a project in the early days of the war in Ukraine, collaborating with Fabres (its subsidiary in Poland) and the Ukrainian Association of Eastern Norway. The following actions were taken: Fabres collected returned equipment such as PCs, mobile phones, power banks, etc. worth approximately NOK 100000. The employees from Fabres personally travelled to Ukraine to deliver this equipment to local aid organisations. The Ukrainian Association of Eastern Norway, in col- laboration with the Ukrainian embassy and Norwegian Ukraine Aid, requested donations. Komplett sent its Private Label products (ashlights, headlamps, power banks, batteries, etc.). Additionally, the company donated a total of NOK 1 036 560 to Ukraine to aid vic- tims of the war. Webhallen’s project Streamhjälpen was introduced to take a stand to reduce inequality and contribute to digi- tal inclusion in gaming. The purpose of the initiative was to collect donations in terms of games and consoles for organisations working with vulnerable children and youth. This included kindergartens, sheltered housing, and hospitals where children do not have the opportunity to participate in digital play. In December, Streamhjälpen 2022 raised SEK 770020 for "En tryggere barndom". Overall, the project has collected SEK 3509756 from 2017 to 2022. Additionally, Webhallen donated christmas presents to Bymisjonen in Oslo and Stadsmissionen in 2022. NetOnNet has decided to donate to a charity project every year instead of Christmas gifts to employees. The previ- ous years the chosen project has been MIND, a non-prot organisation promoting, supporting, and educating the public on mental health issues. MIND operates online chats and phone lines for different mental health issues and groups in the society. KOMPLETT ASA ANNUAL REPORT 2022 95 SUSTAINABILITY REPORT | GAMERS AGAINST CANCER Komplett's Black Week charity initiative, “Gamers against Cancer”, was established in 2020. The community aims to raise money for the Child- hood Cancer Society in Norway, an organisation that contributes to the ght against childhood cancer. In 2022, Komplett continued the success of pre- vious years. During “Black Week” several of Nor- way’s top gaming inuencers joined Komplett for a livestream from its studio in Sandefjord. The campaign also has an educational aspect, as rep- resentatives from the Childhood Cancer Society participated during the event, providing infor- mation on current research, and on the areas of the organisation that the funds will support. Fur- ther, its suppliers also supported the initiative by donating money to the cause and products as giveaways. Komplett's yearly Black Friday Live Stream is its biggest stream with a total of 42 300 viewers. It is therefore the best occasion to raise the most donations for this cause. At its peak, 3 555 view- ers were streaming at the same time. The event raised NOK 1.9 million for the Childhood Cancer Society in the course of the 54-hour livestream event. | WEBHALLEN FESTIVAL Webhallen has arranged several e-sport tourna- ments, in collaboration with the digital culture centre SPACE. It’s a Corporate Social Respon- sibility activation, which is conducted together with schools from the Stockholm metropolitan area. The participants learn how to code ses- sions at SPACE academy, and events are con- ducted in Webhallen’s stores. SPACE is a digital cultural centre in the heart of Stockholm. A physical meeting place for the dig- ital generation. Here, some of the most impor- tant ingredients in digital culture are combined - gaming, music, content creation and digital know-how, all under the same roof. An inclusive house where people can meet, collaborate and create together - a community where new forma- tions and business ideas take off. KOMPLETT ASA ANNUAL REPORT 2022 96 SUSTAINABILITY REPORT | PLANS AND AIMS GOING FORWARD Komplett Group will continue to invest and take greater responsibility for how our customers use their electronics. We aim to make it easier to return expired products, and we will continue to identify and test how we can contribute more to closing the material loop with full product life cycles. We aim to set high goals for recycling to contribute to slowing down and closing resource ows. We strive to reduce the environmental footprint caused by production of products and packaging. Going forward, Komplett Group will increase the efforts to reduce our climate footprint. Continuing to map our emissions and monitoring progress, are the rst steps towards identifying appropriate action areas to reduce our GHG emissions further. We acknowledge that we still have much work to do to secure high-quality data, and our reporting process this year has demonstrated the need to establish structured data collection routines. We will continue identifying solutions for ecient trans- port, while also actively engaging with our transportation suppliers to establish and uphold environmentally con- scious transport standards throughout our value chain. We will further develop our environmental management system, and engage with our stakeholders on initiatives to reduce the climate impact of our entire value chain. Komplett, Webhallen and NetOnNet all have different strengths on tolerance work, and we look forward to see- ing how we can implement the work in these areas into the other businesses. We believe this is an effective way for us to strengthen our position, both as a desired employer and as a responsible social actor. Komplett recognises the importance of updating its code of conduct to ensure it is compliant across our entire value chain. This collaborative effort is planned for 2023 and will be done in collaboration with NetOnNet, who has extensive experience in this area. With the enforcement of the newly established Transpar- ency Act in Norway, we continue to focus our efforts on increasing transparency and overview at all stages of our value chain to safeguard the people who are impacted by our business. Komplett Group’s board of directors has delegated responsibility and adopted plans to imple- ment the Norwegian Transparency Act and guidelines for the entire group, including our subsidiaries. While legis- lation may vary across the Nordic countries, we remain fully committed to promoting a value chain that priori- tises human and labor rights in all of our operations in all regions. Going forward, we will seek to strengthen our work with sustainability reporting and draw on the knowledge and experience of the subsidiary companies. For more information about sustainability in Komplett Group and the sustainability reporting, please contact: Komplett Group: Kristin Hovland, head of communications. E-mail: [email protected] Komplett: Daniel Hauan, communications manager. E-mail: [email protected] Webhallen: Åsa Lundberg, communications manager. E-mail: [email protected] NetOnNet: Kristina Wärmare, head of communications and sustainability. E-mail: [email protected] | WE WILL ENGAGE WITH OUR TRANSPORTATION SUPPLIERS AND DEVELOP STANDARDS FOR ENVIRONMENTALLY CONSCIOUS TRANSPORT SOLUTIONS IN OUR VALUE CHAIN. KOMPLETT ASA ANNUAL REPORT 2022 97 SUSTAINABILITY REPORT | APPENDIX | NUMBERS AND STATISTICS Unit Total group Komplett NetOnNet Web hallen 2021 2) EMPLOYMENT 1) Employees in Komplett Group Total employees Head count 3) 1 928 363 1278 287 755 Number of permanent employees Head count 1 580 343 961 276 682 Of which are full time Head count 1 014 329 530 155 497 Of which are part time Head count 566 14 431 121 185 Number of temporary employees Head count 328 0 317 11 22 Of which are full time Head count 46 0 46 0 4 Of which are part time Head count 282 0 271 11 18 Number of total management positions Head count 158 50 79 28 48 Number of trainees Head count 4 4 0 0 6 New hires Total Head count 205 42 99 64 135 Women Head count 67 9 31 27 Men Head count 138 33 68 37 By age group Age <30 Head count 119 21 60 38 Age 30-50 Head count 84 20 39 23 Age >50 Head count 4 1 0 3 Total man-years by region Total FTE 1 222 Norway FTE 367 326 41 0 Sweden FTE 831 15 621 195 China FTE 23 0 23 0 Turnover Total Per cent of total (head count) 24% 15% 22% 35% 18% Women Per cent of total (turnover) 28% 18% 34% 31% Men Per cent of total (turnover) 61% 82% 66% 35% 1) These gures excludes the employees from Ironstone. The average FTE from Ironstone during 2022 was 29 and the average number of full time employees was 27. 2) Numbers from 2021 are not directly comparable with 2022 gures, due to all companies being included for the rst time in 2022. 3) Head count gures and FTE gures are based on average employees and man-years through the year. KOMPLETT ASA ANNUAL REPORT 2022 98 SUSTAINABILITY REPORT Unit Total group Komplett NetOnNet Web hallen 2021 * Turnover by age group Age <30 Per cent of total (turnover) 42% 20% 50% 56% Age 30-50 Per cent of total (turnover) 53% 71% 47% 43% Age >50 Per cent of total (turnover) 5% 10% 4% 1% Turnover by region Norway Per cent of total (turnover) 24% 15% 32% n/a Sweden Per cent of total (turnover) 25% 19% 22% 35% DIVERSITY AND EQUALITY Gender balance Total female employees Per cent of total (head count) 32% 27% 35% 29% 27% Full time positions Per cent of total (head count) 24% 26% 22% 32% 38% Part time positions Per cent of total (head count) 28% 50% 17% 17% 33% Management positions Per cent of total (head count) 34% 30% 38% 31% 31% Age distribution* Age <30 Head count 493 66 388 39 73 Age 30-50 Head count 776 236 501 39 250 Age >50 Head count 115 42 72 1 42 Parental leave Employees in parental leave (women) Head count 95 11 81 3 16 Employees in parental leave (men) Head count 135 14 109 12 12 Average weeks parental leave (women) SWE Head count 36 22 14 n/a 14 Average weeks parental leave (men) SWE Head count 12 6 6 n/a Average weeks parental leave (women) NO Head count 34 11 23 n/a 8 Average weeks parental leave (men) NO Head count 21 10 11 n/a Pay gap (salary ratio women to men) Total employees Per cent 101% 100% - (11%) Executive committee Per cent 45% - - (26%) Management Per cent 107% - - (2%) * Numbers from 2021 are not directly comparable with 2022 gures, due to change all companies being included for the rst time in 2022. KOMPLETT ASA ANNUAL REPORT 2022 99 SUSTAINABILITY REPORT Unit Total group Komplett NetOnNet Web hallen 2021 2) HEALTH AND SAFETY Estimated man hours Amount 1 035 274 668 389 - 366 885 1 035 853 Sick leave Per cent 6% 5% 6% 7% 4% Work related Injuries Amount 20 - 12 8 - Work related Injuries leading to long-time sick leave (>6 months) Amount 1 - 1 - - Fatalities Amount - - - - - Unit Total group Komplett NetOnNet Web hallen 2021 2) Total emissions (tCO 2 e) tCO 2 e 5 083 1 525.2 3174 380 4 540 Scope 1 Transportation and refrigerants tCO 2 e 102 8 95 n.a. 24 Scope 2 Electricity tCO 2 e 347 120 - 38 235 District heating (Sweden) tCO 2 e 285 n.a 221 64 17 Electric veichles n.a 189 n.a Scope 3 Upstream transportation and distribution tCO 2 e 2 787 236 2 529 23 3 091 Waste tCO 2 e 121 72 28 19 49 Business travel tCO 2 e 58 30 28 n.a. 18 Fuel-and-energy-related activities tCO 2 e 128 10 84 34 n.a Purchased goods and services tCO 2 e 1 253 1 050 n.a. 203 n.a WASTE Total waste Tonnes 2 425 896 1 288 241 1 249 ELECTRONIC WASTE Electronic waste, (incl. EE-waste) Tonnes 228 12 196 20 n.a PACKING MATERIALS Plastics Tonnes 226 182 26 19 123 Paper and coardboard Tonnes 889 580 174 134 672 Single-use wood pallets Tonnes 446 114 238 95 276 ENERGY CONSUMPTION Total energy consumption (scope 1,2) MWh 18 519 16 750 10 997 2 870 9 555 Scope 1 MWh 390 30 360 n.a n.a Scope 2 (district heating, electric veichles and electricity) MWh 18 130 4 653 10 637 2 870 n.a Total renewable energy MWh 11 953 3 514 6 716 1 724 n.a Total renewable energy share % 65% 76% 61% 60% n.a * Numbers from 2021 are not directly comparable with 2022 gures, due to change in climate accounting and all companies being included for the rst time in 2022. KOMPLETT ASA ANNUAL REPORT 2022 100 SUSTAINABILITY REPORT | GRI-INDEX GRI universal standard disclosure number Disclosure title Status Reference/response General disclosures GRI 2-1 Organisational details Completed p.4 , 28 GRI 2-2 Entities included in the organisation's sustainability reporting Completed p. 51 GRI 2-3 Reporting period, frequency and contact point Completed p. 51 GRI 2-4 Restatements of information Completed p. 51 GRI 2-6 Activities, value chain and other Completed p. 57 GRI 2-7 Employees Completed p. 37, 89 , 98 GRI 2-8 Workers who are not employees In progress p. 37 , 98 GRI 2-9 Governance structure and composition Completed p. 18-25 , 58 GRI 2-10 Nomination and selection of the highest governance body Completed p. 43-44 GRI 2-11 Chair of the highest governance body Completed p. 18 GRI 2-12 Role of the highest governance body in overseeing the management of impacts Completed p. 44 , 58 GRI 2-13 Delegation of responsibility for managing impacts Completed p. 44 , 58 GRI 2-14 Role of the highest governance body in sustainability reporting Completed p.58 GRI 2-15 Conicts of interest In progress p.44 GRI 2-16 Communication of critical concerns In progress 54-55 , 63 GRI 2-17 Collective knowledge of the highest governance body In progress p.18-24 GRI 2-18 Evaluation of the performance of the highest governance body Completed p.38 GRI 2-19 Remuneration policies Completed p.38 GRI 2-20 Process to determine remuneration Completed p.38 GRI 2-22 Statement on sustainable development strategy Completed p. 54-55 GRI 2-23 Policy commitments In progress p. 58-60 GRI 2-24 Embedding policy commitments In progress p. 56-60 GRI 2-25 Processes to remediate negative impacts In progress p. 61 GRI 2-26 Mechanisms for seeking advice and raising concerns In progress p. 63 GRI 2-27 Compliance with laws and regulations Completed p. 64 GRI 2-28 Membership associations Completed p. 88, 99 GRI 2-29 Approach to stakeholder engagement Completed p. 53 GRI 2-30 Collective bargaining agreements Completed p. 88 Material topics GRI 3-1 Process to determine material topics Completed p. 52-53 GRI 3-2 List of material topics Completed p. 52 GRI 3-3 Management of material topics Completed p. 52-57 Economic performance 201-1 Direct economic value generated and distributed Completed p.114-169 201-3 Dened benet plan obligations and other retirement plans Completed p. 127, 136 Anti-corruption 205-1 Operations assessed for risks related to corruption In progress p. 60 205-2 Communication and training about anti-corruption policies and procedures In progress p. 60 , 63 205-3 Conrmed incidents of corruption and actions taken Completed p. 60 Anti-competitive behaviour 206-1 Legal actions for anti-competitive behaviour, anti-trust, and monopoly practices Completed p. 60 KOMPLETT ASA ANNUAL REPORT 2022 101 SUSTAINABILITY REPORT GRI universal standard disclosure number Disclosure title Status Reference/response KOMPLETT PILLARS: CIRCULARITY AND ENVIRONMENT Materials 301-1 Materials used by weight or volume In progress p. 80-81 301-2 Recycled input materials used Completed p. 70, 72, 74, 76-77 301-3 Reclaimed products and their packaging materials Completed p, 63, Energy 302-1 Energy consumption within the organisation Completed p. 82, 100 302-2 Energy consumption outside of the organisation In progress p. 82, 100 302-4 Reduction of energy consumption In progress p. 82 Emissions 305-1 Direct (Scope 1) GHG emissions In progress p. 79-81, 100 305-2 Energy indirect (Scope 2) GHG emissions Completed p. 79-81, 100 305-3 Other indirect (Scope 3) GHG emissions In progress p. 79-81, 100 305-5 Reduction of GHG emissions In progress p. 81 Euents and waste 306-2 Waste by type and disposal method Completed p. 69-77 , 100 306-6 Transport of hazardous waste In progress p. 72 Environmental compliance 307-1 Non-compliance with environmental laws and regulations Completed No cases recorded in 2022 Supplier environmental assessment 308-1 New suppliers that were screened using environmental criteria In progress for NetOnNet p. 65-66 KOMPLETT PILLAR: TOLERANCE Employment 401-1 New employees hires and employee turnover In progress p. 90 401-3 Parental leave In progress p. 91 Occupational health and safety 403-1 Occupational health and safety management system In progress p. 86-87 403-2 Hazard identication, risk assessment, and incident investigation In progress p. 86-87 403-5 Worker training on occupational health and safety In progress p. 86-87 403-8 Workers covered by an occupational health and safety management system In progress p. 86-87 403-9 Work-related injuries In progress p.86 Training and education 404-2 Programs for upgrading employee skills and transition assistance programs In progress p. 93 Diversity and equal opportunity 405-1 Diversity of governance bodies and employees Completed p. 90-91 405-2 Ratio of basic salary and remuneration of women to men In progress p. 91 KOMPLETT ASA ANNUAL REPORT 2022 102 SUSTAINABILITY REPORT GRI universal standard disclosure number Disclosure title Status Reference/response Non-discrimination 406-1 Incidents of discrimination and corrective actions taken Completed p. 63, 68 , 89. No incidents recorded in 2022. Child labour 408-1 Operations and suppliers at signicant risk for incidents of child labour Completed for NetOnNet p. 68 Forced or compulsory labour 409-1 Operations and suppliers at signicant risk for incidents of forced or compulsory labour Completed for NetOnNet p. 68 Human rights assessment 412-2 Employee training on human rights policies or procedures Completed for NetOnNet p. 93 Supplier social assessment 414-1 New suppliers that were screened using social criteria In progress for NetOnNet p. 68 Customer health and safety 416-1 Assessment of the health and safety impacts of product and service categories Completed p. 63-64 416-2 Incidents of non-compliance concerning the health and safety impacts of products and services Completed p. 63-64 Marketing and labelling 417-1 Requirements for product and service information and labeling In progress p. 63-64 417-2 Incidents of non-compliance concerning product and service infprmation and labelling In progress p. 63-64 417-3 Incidents of non-compliance concerning marketing communications In progress p. 63-64 Customer privacy 418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data Completed p. 61-62. No cases recorded in 2022 Material topic Material topic imprtance SDG GRI disclosure number Circular business Very high materiality for Komplett and stakeholders SDG 12, 13 301-1, 301-2, 301-3, 306-2, 306-6 Sustainable products and services Very high materiality for Komplett and stakeholders SDG 12, 13 301-1, 301-2, 301-3, 306-2, 306-6 Human rights and decent working conditions Very high materiality for Komplett and stakeholders SDG 5, 6, 10 412-2, 416-1, 416-2 Climate and nature impact Very high materiality for Komplett, high materiality for stakeholders SDG 12, 13 302-3, 302-4, 305-1, 305-2, 305-4 Employee health Very high materiality for Komplett, high materiality for stakeholders SDG 5, 6, 10 403-1, 403-2, 403-5, 403-8, 403-9 Diversity and inclusion Very high materiality for Komplett, high materiality for stakeholders SDG 5, 6, 10 405-1, 405-2 Business ethics High materiality for Komplett and stakeholders SDG 5, 6, 10 205-1, 206-1, 406-1, 408-1, 409-1, 412-1 Competence development High materiality for Komplett and stakeholders SDG 5, 6, 10 404-2 KOMPLETT ASA ANNUAL REPORT 2022 103 SUSTAINABILITY REPORT KOMPLETT ASA ANNUAL REPORT 2022 104 SUSTAINABILITY REPORT 22 Carbon Accounting Report 2022 Komplett Group KOMPLETT ASA ANNUAL REPORT 2022 105 SUSTAINABILITY REPORT 33 Content This report provides an overview of the organization’s greenhouse gas (GHG) emissions, which is an integrated part of an organization’s climate strategy. Carbon accounting is a fundamental tool in identifying tangible measures to reduce GHG emissions. The annual carbon accounting report enables the organization to benchmark performance indicators and evaluate progress over time. This report includes emissions from Komplett Group including the organizational units Komplett ASA, NetonNet and Webhallen. The input data is based on consumption data from internal and external sources, which are converted into tonnes of CO2-equivalents (tCO2e). The carbon footprint analysis is based on the international standard; A Corporate Accounting and Reporting Standard, developed by the Greenhouse Gas Protocol Initiative (GHG Protocol). The GHG Protocol is the most widely used and recognized international standard for measuring greenhouse gas emissions and is the basis for the ISO standard 14064-I. 2023-03-07 KOMPLETT ASA ANNUAL REPORT 2022 106 SUSTAINABILITY REPORT 44 Carbon accounting 2022 Figure 1: Total GHG emissions per category for 2022 KOMPLETT ASA ANNUAL REPORT 2022 107 SUSTAINABILITY REPORT 66 Komplett Groups´Carbon accounting 2022 Komplett has started the work of calculating their greenhouse gas emissions. This is the first time Komplett Group reports their emissions on a group level including the organizational unit NetonNet. The absolute emissions have increased by 543.6 tCO2e from 4539 to 5082.6 tCO2e, which is an increase of 12% compared to the emissions calculated in 2021. Upstream transportation and distribution stand for the largest share of the emissions (55%) in the carbon accounting for 2022. The second largest category is Purchased goods and services (emissions from the production of the materials used for packaging) which stand for 25% of the total emissions. However, it should be noted that the Scope 3 emissions are not complete or fully mapped and that the distribution of emissions per category is likely to change as more emission sources are included in the carbon accounting. Komplett Group will continue to work on expanding Scope 3 to include more emission sources as well as on improving the data quality. This is fundamental to tracking the emission pathway and increasing the comparability of emissions over time in order to be able to set fruitful mitigation targets. The greenhouse gas emissions are distributed to the different scopes accordingly: • 102 tCO2e (2% share of total emissions) in Scope 1. • 633 tCO2e (12.4% of total emissions) in Scope 2. This is according to the location-based reporting method. • 4 348 tCO2e (85.5% of total emissions) in Scope 3. Figure 3 : Annual GHG emissions per Scope (tCO2e) KOMPLETT ASA ANNUAL REPORT 2022 108 SUSTAINABILITY REPORT 77 Scope 1 The emissions in Scope 1 stem from the fuel combustion from leased vehicles as well as refrigerants. The total consumption of fuel for mobile combustion from transportation in 2022 was 39161 liters, resulting in emissions of 102 tCO2e from fuel combustion. The fuels used by Komplett Group are petrol and diesel. Komplett Group has no stationary combustion. Scope 2 The emissions in Scope 2 stand for 12.4 % of Komplett Groups’ total emissions with a total of 633 tCO2e. Scope 2 includes emissions from acquired electricity, heat, and cooling. The data points included in Komplett Groups’ Scope 2 calculations are electricity and district heating and cooling . The numbers include data from all units within Komplett Group, i.e., NetonNet, Webhallen and Komplett. The total consumption of electricity under 2022 was 12 395 554 kWh, resulting in 347.1 tCO2e (location-based reporting). The emissions from electricity with a market-based reporting in 2022 are 1921 tCO2e. Komplett Group purchases electricity from renewable energy for some of its premises (a total of 5080261 kWh). In the market-based reporting, the emissions covered by GoOs (Guarantees of Origin) are considered 0. The practice of presenting emissions from electricity consumption with two different emissions factors is explained further under Scope 2 in Methods and Sources. Furthermore, the emissions from district heating and cooling stand for 6 % of Komplett Groups total emissions, 285.2 tCO2e. Scope 3 Scope 3 rmission sources in 2022 are waste, fuels and energy-related activities, business travel, upstream transportation, and distribution, as well as purchased goods and services. W W a a s s t t e e : : Waste stands for 2% of Komplett Group´s total emissions in 2022. The total amount of 241.36 ton waste resulted in 121 tCO2e. The numbers include data from all units within Komplett Group, i.e. NetonNet, Webhallen and Komplett. F F u u e e l l s s a a n n d d e e n n e e r r g g y y - - r r e e l l a a t t e e d d a a c c t t i i v v i i t t i i e e s s : : Fuels- and energy-related activities stands for 3 % of Komplett Group´s total emissions in 2022. The total amount of emissions resulted in 128 tCO2e. Included in this category are the upstream emissions from the fuel and energy in Scope 1 and 2. The numbers include data from all units within Komplett Group, i.e., NetonNet, Webhallen and Komplett. B B u u s s i i n n e e s s s s t t r r a a v v e e l l : : Business travel stands for 1 % of Komplett Group´s total emissions in 2022. The total emissions from business travel in 2022 were 58.3 tCO2e, whereof 32.4 tCO2e from air travel, 25.9 tCO2e from millage KOMPLETT ASA ANNUAL REPORT 2022 109 SUSTAINABILITY REPORT 88 allowance and close to 0 tCO2e from train. The numbers include data from NetonNet and Komplett, but not Webhallen. U U p p s s t t r r e e a a m m t t r r a a n n s s p p o o r r t t a a t t i i o o n n a a n n d d d d i i s s t t r r i i b b u u t t i i o o n n : : The category upstream transportation and distribution stands for the largest share of Komplett Group’s total emissions in the accounting year 2022, namely of 55 %. The total emissions from upstream transportation and distribution in 2022 was 2,787 tCO2e. Emissions data were received directly from suppliers and include transports for NetonNet, and part of Webahallens and Kompletts acquired transportation. P P u u r r c c h h a a s s e e d d g g o o o o d d s s a a n n d d s s e e r r v v i i c c e e s s : : Purchased goods and services stand for 25 % of Komplett Group´s total emissions in 2022, which amounts to 1 253 tCO2e. This year it includes only materials from packaging for Komplett and Webhallen. KOMPLETT ASA ANNUAL REPORT 2022 110 SUSTAINABILITY REPORT Methodology The Greenhouse Gas Protocol Initiative (GHG Protocol) was developed by the World Resources Institute (WRI) and World Business Council for Sustainable Development (WBCSD). This analysis is done according to A Corporate Accounting and Reporting Standard Revised edition, currently one of four GHG Protocol accounting standards on calculating and reporting GHG emissions. The reporting considers the following greenhouse gases, all converted into CO2-equivalents: CO2, CH4 (methane), N2O (laughing gas), SF6, HFCs, PFCs and NF3. For corporate reporting, two distinct approaches can be used to consolidate GHG emissions: the equity share approach and the control approach. The most common consolidation approach is the control approach, which can be defined in either financial or operational terms. The carbon inventory is divided into three main scopes of direct and indirect emissions. S S c c o o p p e e 1 1 includes all direct emission sources. This includes all use of fossil fuels for stationary combustion or transportation, in owned and, depending on the consolidation approach selected, leased, or rented assets. It also includes any process emissions, from e.g. chemical processes, industrial gases, direct methane emissions etc. S S c c o o p p e e 2 2 includes indirect emissions related to purchased energy; electricity and heating/cooling where the organisation has operational control. The electricity emission factors used in Cemasys are based on national gross electricity production mixes from the International Energy Agency’s statistics (IEA Stat). Emission factors per fuel type are based on assumptions in the IEA methodological framework. Factors for district heating/cooling are either based on actual (local) production mixes, or average IEA statistics. In January 2015, the GHG Protocol published new guidelines for calculating emissions from electricity consumption. Primarily two methods are used to “allocate” the GHG emissions created by electricity generation to the end consumers of a given grid. These are the location- based and the market-based methods. The location-based method reflects the average emission intensity of the grids on which energy consumption occurs, while the market-based method reflects emissions from electricity that companies have purposefully chosen (or not chosen). Organisations who report on their GHG emissions will now have to disclose both the location- based emissions from the production of electricity, and the marked-based emissions related to the potential purchase of Guarantees of Origin (GoOs) and Renewable Energy Certificates (RECs). KOMPLETT ASA ANNUAL REPORT 2022 111 SUSTAINABILITY REPORT 2 The purpose of this amendment in the reporting methodology is on the one hand to show the impact of energy efficiency measures, and on the other hand to display how the acquisition of GoOs or RECs affect the GHG emissions. Using both methods in the emission reporting highlights the effect of all measures regarding electricity consumption. The location-based method: The location-based method is based on statistical emissions information and electricity output aggregated and averaged within a defined geographic boundary and during a defined time period. Within this boundary, the different energy producers utilize a mix of energy resources, where the use of fossil fuels (coal, oil, and gas) result in direct GHG-emissions. These emissions are reflected in the location-based emission factor. The market-based method: The choice of emission factors when using this method is determined by whether the business acquires GoOs/RECs or not. When selling GoOs or RECs, the supplier certifies that the electricity is produced exclusively by renewable sources, which has an emission factor of 0 grams CO2e per kWh. However, for electricity without the GoO or REC, the emission factor is based on the remaining electricity production after all GoOs and RECs for renewable energy are sold. This is called a residual mix, which is normally substantially higher than the location-based factor. As an example, the market-based Norwegian residual mix factor is approximately 7 times higher than the location-based Nordic mix factor. The reason for this high factor is due to Norway’s large export of GoOs/RECs to foreign consumers. In a market perspective, this implies that Norwegian hydropower is largely substituted with an electricity mix including fossil fuels. S S c c o o p p e e 3 3 includes indirect emissions resulting from value chain activities. The scope 3 emissions are a result of the company’s upstream and downstream activities, which are not controlled by the company, i.e. they are indirect. Examples are business travel, goods transportation, waste handling, consumption of products etc. In general, the carbon accounting should include information that users, both internal and external to the company, need for their decision making. An important aspect of relevance is the selection of an appropriate inventory boundary which reflects the substance and economic reality of the company’s business relationships. KOMPLETT ASA ANNUAL REPORT 2022 112 SUSTAINABILITY REPORT 3 References Department for Business, Energy & Industrial Strategy (2019). Government emission conversion factors for greenhouse gas company reporting (DEFRA) IEA (2019). CO2 emission from fuel combustion, International Energy Agency (IEA), Paris. IEA (2019). Electricity information, International Energy Agency (IEA), Paris. IMO (2014). Reduction of GHG emissions from ships - Third IMO GHG Study 2014 (Final report). International Maritime Organisation, http://www.iadc.org/wp- content/uploads/2014/02/MEPC-67-6-INF3-2014-FinalReport-complete.pdf IPCC (2014). IPCC fifth assessment report: Climate change 2013 (AR5 updated version November 2014). http://www.ipcc.ch/report/ar5/ AIB, RE-DISS (2019). Reliable disclosure systems for Europe – Phase 2: European residual mixes. WBCSD/WRI (2004). The greenhouse gas protocol. A corporate accounting and reporting standard (revised edition). World Business Council on Sustainable Development (WBCSD), Geneva, Switzerland /World Resource Institute (WRI), Washington DC, USA, 116 pp. WBCSD/WRI (2011). Corporate value chain (Scope 3) accounting and reporting standard: Supplement to the GHG Protocol corporate accounting and reporting standard. World Business Council on Sustainable Development (WBCSD), Geneva, Switzerland /World Resource Institute (WRI), Washington DC, USA, 149 pp. WBCSD/WRI (2015). GHG protocol Scope 2 guidance: An amendment to the GHG protocol corportate standard. World Business Council on Sustainable Development (WBCSD), Geneva, Switzerland /World Resource Institute (WRI), Washington DC, USA, 117 pp. KOMPLETT ASA ANNUAL REPORT 2022 113 SUSTAINABILITY REPORT Consolidated statement of comprehensive income ................................................................ 116 Consolidated statement of nancial position ......................................................................... 117 Consolidated statement of nancial position ......................................................................... 118 Consolidated statement of cash ows ..................................................................................... 119 Consolidated statement of changes in equity ......................................................................... 120 Notes to the consolidated nancial statements ...................................................................... 121 Note 01 General information and basis for preparation ......................................................................121 Note 02 Critical accounting estimates and judgements .....................................................................121 Note 03 Accounting policies ...............................................................................................................122 Note 04 Financial instruments – risk management ........................................................................... 127 Note 05 Segment Information .............................................................................................................131 Note 06 Revenues from contracts with customers ............................................................................133 Note 07 Employee benet expenses and audit fees...........................................................................134 Note 08 Finance income and expenses .............................................................................................. 137 Note 09 Income tax ............................................................................................................................. 138 Note 10 Earnings per share ................................................................................................................140 Note 11 Intangible assets ....................................................................................................................141 Note 12 Property, plant, and equipment .............................................................................................144 Note 13 Investments in associates ..................................................................................................... 144 Note 14 Trade and other receivables .................................................................................................. 145 Note 15 Inventories ............................................................................................................................. 147 Note 16 Cash and cash equivalents .................................................................................................... 147 Note 17 Share capital, shareholder information, and dividend .......................................................... 147 Note 18 Share option plan ...................................................................................................................149 Note 19 Leases ...................................................................................................................................150 Note 20 Other current liabilities and long-term debt ..........................................................................152 Note 21 Provision for service and guarantee obligations ...................................................................152 Note 22 Notes supporting the cash ows ........................................................................................... 152 Note 23 Pledges and guarantees ........................................................................................................ 153 Note 24 Related party transactions ....................................................................................................154 Note 25 Consolidated companies .......................................................................................................155 Note 26 Business combinationsand discontinued operations ...........................................................155 Note 27 Events after the reporting date ............................................................................................. 157 FINANCIALSTATEMENTS | KOMPLETT GROUP KOMPLETT ASA ANNUAL REPORT 2022 114 FINANCIAL STATEMENTS Statement of prot and loss – Komplett ASA .......................................................................... 158 Statement of nancial position – Komplett ASA .................................................................... 159 Statement of nancial position – Komplett ASA ................................................................... 160 Statement of cash ows – Komplett ASA ................................................................................ 161 Notes to the nancial statements – Komplett ASA ................................................................. 162 Note 01 Accounting principles............................................................................................................162 Note 02 Corporate changes ................................................................................................................163 Note 03 Investments in subsidiaries and associated companies .......................................................163 Note 04 Cash and cash equivalents ....................................................................................................164 Note 05 Group balances (receivables and payables) .........................................................................164 Note 06 Equity ...................................................................................................................................164 Note 07 Income tax ............................................................................................................................ 165 Note 08 Pledges and guarantees ......................................................................................................166 Note 09 Employee benet expenses .................................................................................................166 Note 10 Items that are aggregated in the nancial statement .......................................................... 167 Note 11 Financial market risk ............................................................................................................ 167 Alternative performance measures (APM) ..........................................................................................168 FINANCIALSTATEMENTS | KOMPLETT ASA KOMPLETT ASA ANNUAL REPORT 2022 115 FINANCIAL STATEMENTS | CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER Amounts in NOK million Note 2022 2021 Operating revenues Revenues from sale of goods 14 299 10 903 Other operating income 319 1 40 Total operating income 6 14 618 11 043 Operating expenses Cost of goods sold 15 (12 8 24) (9 5 81) Employee benet expenses 7 (8 2 0) (5 11) Depreciation and amortisation expense 11, 12, 19 (2 5 6) (1 2 9) Other operating expenses 19, 21, 26 (7 1 2) (4 5 3) Total operating expenses (14 612) (10 6 74) Operating prot 6 36 9 Finance income and expenses Share of post-prots from equity accounted investments 13 4 3 Finance income 8 2 3 Finance expenses 8, 19 (111) (2 8) Net nance income and expenses (1 0 4) (2 2) Prot before tax 5 (9 8) 3 47 Tax expense 9 56 (4 8) PROFIT FROM CONTINUING OPERATIONS (42) 3 00 Prot/(loss) from discontinued operations 26 10 - Prot for the year (3 2) 300 Other comprehensive income Items that will or may be reclassied to prot or loss: Exchange gains arising on translation of foreign operations 14 (1 4) Total comprehensive income (1 8) 286 Prot for the year attributable to: Owners of the parent (3 2) 300 Total (3 2) 300 Total comprehensive income attributable to: Owners of the parent (1 8) 286 Total (1 8) 286 Earnings per share Continued operation (basic and diluted) - in NOK 10 (0 . 4 0) (3 3 .1 4) Discontinued operation (basic and diluted) - in NOK 10 0.09 - KOMPLETT ASA ANNUAL REPORT 2022 116 FINANCIAL STATEMENTS – KOMPLETT GROUP | CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER (ASSETS) Amounts in NOK million Note 31 December 2022 31 December 2021 NON-CURRENT ASSETS Non-current nancial assets Goodwill 11 2 131 43 3 Software 11 21 8 113 Other intangible assets 11 1 424 7 3 Total intangible assets 3 773 620 Property, plant, and equipment Right-of-use assets 2, 3, 19 559 25 3 Leasehold improvements 12 13 3 Machinery and xtures 12 1 21 25 Total property, plant, and equipment 69 2 2 8 1 Other non-current assets Deferred tax asset 9 - 2 5 Investments in equity-accounted associates 13 14 11 Other receivables 4, 14, 19 8 3 4 Total other non-current assets 22 70 TOTAL NON-CURRENT ASSETS 4 487 97 1 CURRENT ASSETS Inventories 15 1 928 1 305 Total inventories 1 928 1 305 Current receivables Trade receivables - regular 4, 14 3 09 6 7 6 Trade receivable from deferred payment arrangements 4, 14 91 130 Other current receivables 4, 14, 19 46 4 31 5 Prepaid expenses 104 3 1 Total current receivables 96 8 1 152 Cash and cash equivalents Cash and cash equivalents 4, 16 149 41 Total cash and cash equivalents 149 41 TOTAL CURRENT ASSETS 3 046 2 498 TOTAL ASSETS 7 533 3 469 KOMPLETT ASA ANNUAL REPORT 2022 117 FINANCIAL STATEMENTS – KOMPLETT GROUP | CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER (EQUITY AND LIABILITIES) Amounts in NOK million Note 31 December 2022 31 December 2021 Equity Share capital 17 7 0 29 Share premium 17 3 741 1 07 5 Other equity (3 1 4) (2 9 8) Total equity 3 496 806 Liabilities Non-current liabilities Deferred tax liabilities 9 24 5 - Pension liability 3 - Provisions and other liabilities 46 49 Interest-bearing loans and borrowings 4, 20 40 0 4 00 Non-current lease liabilities 3, 19, 20 39 1 23 0 Total non-current liabilities 1 084 679 Current liabilities Short-term loans 4, 16, 22, 23 6 25 207 Trade payables 4 1 412 1 124 Public duties payable 4 395 29 3 Current income tax 9 1 7 6 8 Current lease liabilities 3.19 1 67 80 Other current liabilities 4, 6, 20, 21 33 7 2 12 Total current liabilities 2 953 1 984 Total liabilities 4 037 2 663 TOTAL EQUITY AND LIABILITIES 7 533 3 469 Sandefjord, 22 March 2023 Board of directors, Komplett ASA Jo Olav Lunder Jennifer Geun Koss Lars Bjørn Thoresen Fabian Bengtsson Chair Director Director Director Sarah Willand Anders Odden Nora Elin Eldås Jaan Ivar Semlitsch Director Worker director Worker director CEO KOMPLETT ASA ANNUAL REPORT 2022 118 FINANCIAL STATEMENTS – KOMPLETT GROUP | CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER Amounts in NOK million Note 2022 2021 Cash ows from operating activities Prot before income tax (9 8) 3 47 Prot/(loss) on discontinued operations (before tax) 12 - Prot for the year (8 6) 3 47 Income taxes paid (1 9) - Depreciation and amortisation expense 11, 12 256 129 Long-term incentive programme 18 (2) 5 Payment received on nance lease receivable 19 12 10 Interest on nance lease receivable 8, 19 0 2 Share of post-tax prots from equity accounted investments 13 (4) (3) Net nance items 8 10 9 2 5 Changes in deferred payment arrangements receivables 14 3 9 22 Changes in inventories, trade payables, and trade receivables 15 95 8 (4 2 3) Currency effects (2) (9) Other changes in accruals (1 5 8) (3 9) Net cash ows from operating activities 1 102 6 5 Investing activities Investments in property, plant, and equipment 11, 12 (1 7 7) (5 6) Acquisition of subsidiary, net of cash acquired 26 (1 5 26) (5 9) Dividend from associated company 2 1 Net cash used in investing activities (1 7 01) (1 1 4) Financing activities Proceeds from loans and borrowings 20, 22 1 500 400 Repayment of loans and borrowings 20, 22 (1 000) - Changes in bank overdrafts 22 (5 2 4) 15 5 Principal paid on lease liabilities 19 (1 47) (7 2) Interest paid on lease liabilities 8, 19 (1 8) (1 4) Net Interest paid on loans and overdrafts 8 (9 1) (1 3) Issue of share capital 98 7 - Distributions to owners - (4 2 0) Net cash (used in)/from nancing activities 706 3 6 Net increase in cash and cash equivalents 108 (1 2) Cash and cash equivalents at beginning of year 16 41 54 Cash and cash equivalents at end of year 16 1 49 41 KOMPLETT ASA ANNUAL REPORT 2022 119 FINANCIAL STATEMENTS – KOMPLETT GROUP | CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER Foreign Share Share Other currency Total Amounts in NOK million Note capital premium equity changes equity At 1 January 2021 29 1 075 (1 8 9) 2 91 7 Prot for the year - - 300 - 300 Other comprehensive Income - - - (1 4) (1 4) Total comprehensive Income for the year - - 30 0 (1 4) 28 6 Long-term incentive programme - - 2 - 2 Dividend/group contribution 17 - - (4 0 0) - (4 0 0) Contributions by and distributions to owners - - (3 9 8) - (3 9 8) At 31 December 2021 29 1 075 (2 8 7) (1 1) 80 6 At 1 January 2022 29 1 075 (2 8 7) (1 1) 80 6 Prot for the year - - (32) - (32) Other comprehensive Income - - - 1 4 14 Total comprehensive income for the year - - (32) 1 4 (1 8) Long-term incentive programme - - 2 - 2 Issue of share capital 17 41 2 679 - - 2 720 Transaction costs - (1 3) - - (1 3) Contributions by and distributions to owners 41 2 666 2 - 2 708 At 31 December 2022 70 3 741 (3 17) 3 3 496 KOMPLETT ASA ANNUAL REPORT 2022 120 FINANCIAL STATEMENTS – KOMPLETT GROUP | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 01 GENERAL INFORMATION AND BASIS FOR PREPARATION Komplett ASA is a public company, registered in Norway, listed on the Oslo Stock Exchange and headquartered at Østre Kullerød 4, 3241 Sandefjord, Norway. Komplett, with its 10 web-shops, is a leading player in e-commerce in the Nordic region The bulk of products offered are in the he field of electronics. The width of the number of product groups varies slightly in the different stores. The risk prolfile is relatively similar, but the return proofile varies depending on the main focus of the individual store. The group has established distribution networks based on deliveries to the various markets from warehouses in Norway and Sweden. The following describes the main accounting policies used in the preparation of the consolidated nd financial statements. These policies are applied in the same way in all periods presented, unless otherwise stated in the description. These ne financial statements were approved by the board of directors on 22 March 2023, and it will be submitted for nr final approval of the general meeting on 9 May 2023 Basis for preparations The consolidated nancial statemened financial statements have been prepared in accordance with applicable international standards for nfinancial reporting (IFRS) and interpretations from the IFRS Interpretation Committee (IFRIC), as approved by the EU. The consolidated nd financial statements are based on a modiefied historical cost principle. The exceptions from historical cost relates to tes to financial assets and liabilities at fair value through proofit or loss. The accounting principles used are consistent with those of last year. These consolidated nfinancial statements have been prepared on the assumption of going concern. NOTE 02 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS The preparation of n of financial statements in accordance with IFRS requires the management to make some assessments, calculate estimates, and set assumptions that affect the amounts reported in the ne financial statements and in the corresponding notes. The management bases its estimates and assessments on historical experience, as well as a number of other factors considered relevant in the situation. This in turn forms the basis for the assessments made related to the carrying amount of assets and liabilities where this is not obviously available from other sources. The main areas of assessment and estimation with uncertainty on the balance sheet date, which have a signicficant risk of creating signiificant change in the carrying amount of assets and receivables during the next t financial year, apply to: Impairment of intangible assets The group's management assesses whether there is an impairment of an intangible asset when indicators indicate that the book value cannot be recovered. The determination of recoverable amounts of intangible assets is based in part on the management's assessment, including estimates of future performance, the asset's revenue generating capacity, as well as assumptions about future market conditions. Changes in the situation, as well as in the management's assessment and assumptions, can cause losses as a result of impairments during the relevant periods. As a minimum, the group performs an annual impairment test of goodwill and other intangible assets that are not depreciated. The test is bases on calculations of the value in use of the cash-generating units that have goodwill associated with them. To estimate the value of use, the group must estimate expected future cash oh flow from the cash h flow- generating units, as well as select a suitable discount rate for the current value calculation of cash h flow. For detailed information about the impairment tests see note 11. Software Cost of acquiring software, including expenses to get the applications operational, are capitalised as an intangible asset according to the accounting principles discussed below. Whether the cost of buying and developing software shall be capitalised as an intangible asset is based on the managements assumptions about future cash oh flow related to the acquisition, discount rate, and useful life. The group's assessment is that the economic life of the software is from three to seven years, and the carrying amount is depreciated accordingly. KOMPLETT ASA ANNUAL REPORT 2022 121 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Cloud computing arrangment (CCA/SaaS) is normally accounted for as a service contract and expensed in the same period as the supplier provides access to the application software. Costs for congurationnfiguration and customisation are expensed as long as these services do not create an intangible asset. Other intangible assets Other intangible assets mainly relate to brand names and customer relationships. These assets have been acquired in business combinations. Customer relationships are amortised over the expected economic life. Brand names are considered to have an indeefinite economic life and are not amortised, but are instead tested annually for impairment. Provision for service and warranty obligation The cost of service and warranty repairs is mainly reated to self-produced PCs and sales of private label products. The provision depends on several parameters, such as time spent per repair, the share of products sold returned, and how the return rate develops through the service and warranty period. These parameters are based on historical experience and are constantly reassessed. There may be estimate uncertainty because the parameters change over time. 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. 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 markets. Customer loyalty programme Club members with the NetOnNet card vest bonus points when purchasing products either in the stores or online. These points can be exchanged to value checks and used as discounts on future purchases. The provision depends on estimates on which discount the points will generate when they are applied and the likelihood of actually being applied. These parameters are based on historical experience. The right to return purchased products The group has a policy regarding the right of return when selling to end users. Number of days might vary both from entity to entity and from time of the year. Provision for estimated return is recognised at the same time as the sales transaction. The estimate is based on historical experience. NOTE 03 ACCOUNTING POLICIES NOTE 3.1 ACCOUNTING POLICIES Consolidation policies Subsidiaries are all entities that the group has control over. Control over an entity occurs when the group is exposed to variability in the return from the entity and has the ability to inufluence that return through its power over the entity. Subsidiaries are consolidated from the day control is obtained and de consolidate when control ceases. The consolidated nancial statemened financial statements are prepared according to uniform principles. Intercompany transactions and balances, including internal protsernal profits and unrealised gains and losses, have been eliminated. The subsidiaries follow the same accounting policies as the parent company. Associated companies are entities where the group has signiificant int influence, but not control (normally at a stake of between 20 per cent and 50 per cent). Associates are accounted for according to the equity method in the consolidated nd financial statements. The groups share of prot ofit or loss is included in the consolidated ted financial statements from the time of acquisition and is classiefied as as financial income. The share of proofit or loss is added to (or subtracted) the carrying amount of the investments in shares in associated companies. Business combinations and goodwill When acquiring a business, the acquisition method is used. The consideration that is provided is measured at the fair value of transferred assets, liabilities incurred and issued equity instruments. Included in the consideration is also the fair value any contingent consideration agreement. Identified assets, liabilities and contingent liabilities are recognised at fair value at the transaction date. Non- controlling interests in the acquired entity are measured from a business combination to business combination either at fair value or to their share of the fair value of acquired entity's net assets. Transaction cost related to acquisitions are expensed when they are incurred. If business combinations take place in several stages, ownership from previous purchases shall be revalued at fair value when control is obtained with any changes in fair value recognised in proofit or loss. Contingent consideration is measured at fair value at the transaction date. Subsequent changes in the fair value of the contingent consideration is recognised through proofit or loss. For contingent consideration classiefied at equity is recognised in equity and is not subsequently remeasured. KOMPLETT ASA ANNUAL REPORT 2022 122 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS If the consideration (including any non-controlling interests and fair value of previous holdings) exceeds the fair value of identiafiable assets and liabilities in the acquisition, the excess amount is recognised as goodwill. If the consideration (including any non-controlling interests and fair value of previous holdings) constitutes less than the fair value of net assets in the subsidiary as a result of a purchase on favourable terms, the difference is recognised as a gain in the income statement. Transactions with non-controlling owners in subsidiaries that do not result in loss of control are treated as equity transactions. In the event of further purchases, the difference between the consideration and the shares' proportional share of the carrying amount of net assets in the subsidiary is recognised against the equity of the parent company's owners. Gains or losses on sale to non- controlling owners are recognised accordingly in equity. Goodwill and other intangible assets with indenit indefinite economic life are tested annually or more frequently if events or changes in circumstances indicate a potential for impairments. In connection with this, the intangible assets are allocated to cash oh flow-generating units or groups of cash oh flow-generating entities that are expected to beneefit from the synergies of the business association. Each unit or group of units where goodwill has been allocated represents the lowest level of the enterprise where goodwill is followed up for internal management purposes. Goodwill is followed up by operating segment. Functional currency and presentation currency The group's presentation currency is NOK. This is also the parent company's functional currency. Subsidiaries with other functional currencies are converted into the balance sheet date's exchange rate for balance sheet items, and proofit and loss items are converted at the exchange rates prevailing at the dates of the transactions. As an approach to the specic exfic exchange rate each day the monthly average rates are used. Translation differences are recognised in equity. Foreign currency Transactions in foreign currency are converted at the exchange rate at the time of the transaction. Monetary items in foreign currency are converted into NOK using the balance sheet date's exchange rate. Non-monetary items measured at historical exchange rates expressed in foreign currency are converted into NOK using the exchange rate at the time of the transaction. Gains and losses from exchange rate changes are recognised in the income statement on an ongoing basis during the accounting period. Currency gains and losses related to purchase of inventory are classiified as cost of goods. This consists mainly of accounts payable in foreign currency. Assets and liabilities in foreign operations are converted into NOK using the balance sheet date's currency rate. Revenues and expenses in foreign operations are converted into NOK using average prices. The translation difference resulting from the conversion of foreign operations is recognised in other comprehensive income. Accumulated translation differences in equity are recircled into proofit and loss upon divestment of foreign operations. Revenues from contracts with customer Revenue from sale of goods is recognised in the income statement when the product is delivered to the customer. Revenues are recognised net of discounts and vat. The group's policy regarding the right of return when selling to end users varies from store to store and from country to country depending on the markets where they operate. Number of days changes periodically throughout the year and the different seasons and varies from 10 to 90 days. Estimated returns are treated as a reduction of revenues. Provisions for estimated returns is based on past experiences and recognised at the time of sale. In one of the group's customer loyalty programs, the members can vest bonus points when purchasing products. These points can be exchanged to value checks, which can reduce the price on future purchases. Revenues are recognised net of the values of these points. Payment on sales to private individuals is most often made using credit cards, credit sales handled by third parties, or the application of the group's 's financing solutions. Credit card fees are recognised in the income statement as other operating expenses. Payment on sales to corporate customers may also be made after ordinary invoice credit based on the company's credit rating. Webhallen offers deferred payment to customers. The income from this includes forward fees, establishment fees, and interest income. The income is accrued based on effective interest rates and classiefied as operating income. In addition, Komplett offers a ns a financing solution via the partners Komplett Bank and Resurs Bank. This generates a commission income which is recognised in the income statement as other operating income. Komplett also offers the opportunity buy insurance through partners when purchasing specictners when purchasing specific products. Komplett receives a commission based on insurance policies sold. NetOnNet offers the customers to buy mobile phone subscriptions and streaming services from partners when purchasing products. For this a commission is recognised as income when the correspoding products is sold. Gift certicficates are recognised as a liability when they are sold, while the income is recognised when the certicficates either have been applied to purchase products or when the certicates etificates expire. KOMPLETT ASA ANNUAL REPORT 2022 123 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Classicfication of balance sheet items Current assets and current liabilities include items due for payment within a year after the balance sheet date, as well as items that relate to the operating cycle. Other items are classiified as s fixed asset / long-term liabilities. Receivables from deferred payment are considered as being part of the operating cycle, and consequently classiefied as a current asset. Financial assets The group classiifies its ts financial assets into one of the categories discussed below, depending on the n financial asset’s contractual cash ow flow characteristics and the group’s business model for managing them. Apart from nfinancial assets in a qualifying hedging relationship, the group's accounting policy for each category is as follows: Fair value through prot ofit or loss This category comprises in-the-money derivatives and out-of-money derivatives where the time value offsets the negative intrinsic value (see the "Financial liabilities" section for out-of-money derivatives classiefied as liabilities). They are carried in the statement of nf financial position at fair value with changes in fair value recognised in the consolidated statement of comprehensive income in the ne finance income or expense line. Apart from derivative ive financial instruments which are not designated as hedging instruments, the group does not have any assets held for trading nor does it voluntarily classify any ny financial assets as being at fair value through prot orthrough profit or loss. Amortised cost These assets arise principally from the provision of goods and services to customers (e.g. trade receivables), but also incorporate other types of nf financial assets where the objective is to hold these assets in order to collect contractual cash oash flows and the contractual cash ows flows are solely payments of principal and interest. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment. Impairment provisions for current and non-current trade receivables are recognised based on the simplied simplified approach within IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses. During this process, the probability of the non-payment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade receivables. For trade receivables, which are reported net, such provisions are recorded in a separate provision account with the loss being recognised in proofit or loss. On conrfirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision. The group's s financial assets measured at amortised cost comprise trade and other receivables and cash and cash equivalents in the consolidated statement of nancial positi of financial position. Cash and cash equivalents includes cash in hand, deposits held at call with banks, and – for the purpose of the statement of cash owh flows – bank overdrafts. Bank overdrafts are shown within loans and borrowings in current liabilities on the consolidated statement of nf financial position. Part of the bank deposits have limitations on disposition rights, see note 16. Financial liabilities The group classiifies its ts financial liabilities into one of two categories, depending on the purpose for which the liability was acquired. Apart form nm financial liabilities in a qualifying hedging relationship (see below), the group's accounting policy for each category is as follows: Fair value through prot ofit or loss This category comprises out-of-the-money derivatives where the time value does not offset the negative intrinsic value. (See "Financial assets" for in-the-money derivatives and out-of-money derivatives where the time value offsets the negative intrinsic value). They are carried in the consolidated statement of nt of financial position at fair value with changes in fair value recognised in the consolidated statement of comprehensive income. The group does not hold or issue derivative instruments for speculative purpose but for hedging purposes. Other than these derivative nfinancial instruments, the group does not have any liabilities held for trading nor has it designated any ny financial liabilities as being at fair value through prot ofit or loss. Other nancial liabilitiOther financial liabilities Other nr financial liabilities include the following items: Bank borrowings and the group's redeemable preference shares are initially recognised at fair value net of any transaction costs directly attributable to the issue of the instrument. Such interest-bearing liabilities are subsequently measured at amortised cost using the effective interest rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the consolidated statement of t of financial position. For the purposes of each ch financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding. Liability components of convertible loan notes are measured as described further below. Trade payables and other short-term monetary liabilities are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method. Inventories Inventory is reported at the lower of cost and net realisable value. The costs comprise all costs of purchase and include expenditures directly linked to getting the goods to the KOMPLETT ASA ANNUAL REPORT 2022 124 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS central warehouses. Net realisable value is the estimated sales price (future selling price) less the estimated transaction costs. The portion of the group's inventory that is valued at net realisable value is mainly related to products that have been returned from customers. The estimated sales price of these products is assessed and calculated on the basis of historical experience, as well as the condition (quality state) of the products and which discount that needs to be given to be able to re-sell the relevant products. The discount is set based on the past experience with similar products and quality following the return. In addition, estimated transaction costs, as explained below, are deducted. When assessing realisable the value of inventory, the group considers its estimated expenses to sale of goods, which primarily comprise estimated transaction costs, such as payment fees (for debit and credit card payment processing, etc.), marketing costs and distribution costs. Other (unsold) products are valued at costs after deduction of provisions for obsolescence. Foreseeable obsolescence is assessed continuously. See note 2, section "Provision for obsolescence". The group’s inventories consist solely of goods purchased for resale. Property, plant, and equipment Items of property, plant, and equipment are initially recognised at cost. As well as the purchase price, cost includes directly attributable costs and the estimated present value of any future unavoidable costs of dismantling and removing items. The corresponding liability is recognised within provisions. Depreciation on assets under construction does not commence until they are complete and available for use. Depreciation is provided on all other items of property, plant, and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following rates: Freehold buildings 2% per annum straight line Plant and machinery 15%-25% per annum straight line Fixtures and d fittings 20% per annum straight line Computer equipment 33% per annum straight line Motor vehicles 33% per annum straight line Externally acquired intangible assets Externally acquired intangible assets are initially recognised at cost and subsequently amortised on a straight-line basis over their useful economic lives. Intangible assets are recognised on business combinations if they are separable from the acquired entity or give rise to other contractual/ legal rights. The amounts ascribed to such intangibles are arrived at by using appropriate valuation techniques. The signiificant intangibles recognised by the group, along with their useful economic lives, are: w Trade names (indeniteindefinite) w Non-contractual customer relationships (five years). Goodwill Goodwill represents the excess of the cost of a business combination over the group's interest in the fair value of identiabletifiable assets, liabilities and contingent liabilities acquired. Cost comprises the fair value of assets given, liabilities assumed, and equity instruments issued, plus the amount of any non-controlling interests in the acquire, plus, if the business combination is achieved in stages, the fair value of the existing equity interest in the acquire. Contingent consideration is included in cost at its acquisition date fair value and, in the case of contingent consideration classiefied as a d as a financial liability, remeasured subsequently through prot or profit or loss. For business combinations completed on or after 1 January 2010, direct costs of acquisition are recognised immediately as an expense. Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the consolidated statement of comprehensive income. Where the fair value of identiafiable assets, liabilities and contingent liabilities exceed the fair value of consideration paid, the excess is credited in full to the consolidated statement of comprehensive income on the acquisition date. Impairment of non-nan non-financial assets (excluding inventories and deferred tax assets) Impairment tests on goodwill and other intangible assets with indenitwith indefinite useful economic lives are undertaken annually at the ne financial year-end. Other non-nfinancial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs to sell), the asset is written down accordingly. Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the smallest group of assets to which it belongs for which there are separately identiafiable cash h flows; its cash generating units. (Goodwill is allocated on initial recognition to each of the group's CGUs that are expected to beneefit from a business combination that gives rise to the goodwill). Impairment charges are included in proofit or loss, except to the extent they reverse gains previously recognised in other comprehensive income. An impairment loss recognised for goodwill is not reversed. Provision for service and warranty obligation Provision for service and warranty obligations covers future warranty obligations and other statutory obligations in connection with sold goods. The provision represents the best estimate, based on historical data and future expectations. Equity Share capital Share capital means Komplett ASA's fully paid share capital at face value. KOMPLETT ASA ANNUAL REPORT 2022 125 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Share premium Amount subscribed for share capital in excess of nominal value. Less transaction cost related to share issues. Other equity Includes other paid-in equity, retained earnings, and accumulated translation reserves. Cost of equity transactions Transaction costs related to equity transactions are recognised directly in equity, reducing the share premium paid. Dividends and group contributions Dividends and group contributions are re first classiified as liabilities when adopted by the general meeting. Taxes The tax expense in the income statement includes both current tax payable and changes in deferred tax / deferred tax assets. Current tax constitutes the expected tax payable on the year's taxable result at the applicable tax rates on the balance sheet date and any corrections of tax payable for previous years. Tax payable and deferred tax/deferred tax assets are calculated at the tax rate based on the in the countries that Komplett is liable to pay tax. Deferred tax/deferred tax assets are calculated on the basis of the temporary differences that exist between accounting and tax bases of assets and liabilities, as well as tax losses carried forward at year-end. Net deferred tax assets are recognised to the extent that there is convincing evidence that there will be taxable income available to utilise the deferred tax asset. Cash ow sh flow statement The cash h flow statement has been prepared according to the indirect method. Segment reporting The group's segments are based on the group's internal management reporting. The company's top decision-maker, responsible for allocating resources to and assessing earnings in the operating segments, is denfined as the group management. Leases All leases are accounted for by recognising a right-of-use asset and a lease liability except for: X Leases of low value assets; and X Leases with a duration of 12 months or less. Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate determined by reference to the rate inherent in the lease unless (as is typically the case) this is not readily determinable, in which case the group’s incremental borrowing rate on commencement of the lease is used. Variable lease payments are only included in the measurement of the lease liability if they depend on an index or rate. In such cases, the initial measurement of the lease liability assumes the variable element will remain unchanged throughout the lease term. Other variable lease payments are expensed in the period to which they relate. On initial recognition, the carrying value of the lease liability also includes: X amounts expected to be payable under any residual value guarantee X the exercise price of any purchase option granted in favour of the group if it is reasonably certain to assess that option X any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of termination option being exercised. Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased for: X lease payments made at or before commencement of the lease X initial direct costs incurred X the amount of any provision recognised where the group is contractually required to dismantle, remove or restore the leased asset (typically leasehold dilapidations – see note 19). Subsequent to initial measurement, lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are reduced for lease payments made. Right-of-use assets are amortised on a straight- line basis over the remaining term of the lease or over the remaining economic life of the asset if, rarely, this is judged to be shorter than the lease term. When the group revises its estimate of the term of any lease (because, for example, it re-assesses the probability of a lessee extension or termination option being exercised), it adjusts the carrying amount of the lease liability to reeflect the payments to make over the revised term, which are discounted using a revised discount rate. The carrying value of lease liabilities is similarly revised when the variable element of future lease payments dependent on a rate or index is revised, except if the discount rate remains unchanged. In both cases, an equivalent adjustment is made to the carrying value of the right-of-use asset, with the revised carrying amount being amortised over the remaining (revised) lease term. If the carrying amount of the right- of-use asset is adjusted to zero, any further reduction is recognised in proofit or loss. KOMPLETT ASA ANNUAL REPORT 2022 126 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Pension DenedDefined contribution plans Dened conDefined contribution plans comprise arrangements whereby the company makes monthly contributions to the employees' pension plans, and where the future pensions are determined by the amount of the contributions and the return on the individual pension plan asset. Payments related to the contribution plans are expensed as incurred, as a part of employee beneefit expenses. Participation in multi-employer schemes In Norway, some of the employees are included in a multi- employer pension arrangement. The arrangement provides a lifelong addition to the ordinary pension. Employees can choose to take out the pension from the age of 62, also next to being in work, and it provides further earnings when working until the age of 67. The scheme is a deefined benet fit pension scheme and is funded through premiums that are determined as a percentage of salary. Currently, there is no reliable measurement and allocation of commitment and funds in the scheme. In accounting, the scheme is treated as a deefined contribution pension scheme, where premium payments are expensed on an ongoing basis, and no provisions are made in the accounts. The current premiums are set at 2.6 per cent of total salaries between 1G and 7.1G. As the scheme is set up as a pay as you go arrangement, the premiums are expected to increase in the years ahead. In Sweden, some of the employees are included in a multi- employer pension arrangment (ITP2). This arrangment is split in two parts where one part is a lifelong pension based on nn final salary and another part where the company makes monthly contributions to the employees' pension plans. The future pension of the latter is determined by the amount of the contributions and the return on the individual pension plan asset. Following "Uttalande från rådet för nfinansiell rapportering", UFR10, this scheme is recognised as a dened contribution defined contribution scheme. The premium for lifelong pension varies for each individual members, but the average premium for 2022 was 15.2 per cent. The employees in Sweden who are not part of ITP2 arrangment are part of ITP1, which is a normal deefined contribution scheme and recognised on an ongoing basis and no provision is made in the accounts. Events after the balance sheet date New information about the company's position on the balance sheet date is included in the he financial statements. Events that occur after the balance sheet date that do not affect the company's position on the balance sheet date, but which affect the company's future position are reported if it is of signicficance. NOTE 3.2 CHANGES IN ACCOUNTING POLICIES The following standards and amendments was mandatory application for the re first time for the reporting period commencing 1 January 2022: X Annual Improvements to IFRS: 2018-2020 Cycle amendmetns to IFRS 1, IFRS 9, IAS 41 and the Illustrative Examples accompanying IFRS 16 X Conceptual Framework for Financial Reporting (Amendments to IFRS 3) X IAS 37 Provisions, Contingent Liabilities and Contingent Assets (Amendment – Onerous Contracts – Cost of Fulllingulfilling a Contract) X IAS 16 Property, Plant and Equipment (Amendment – Proceeds before Intended Use) None of the amendments listed above have had any impact on the e financial statements. Standards and amendments issued but not yet effective The following standards and amendments was mandatory application for the re first time for the reporting period commencing after 1 January 2022: X IFRS 17 Insurance Contracts X Disclosure of Accounting Policies (Amendment to IAS 1 and IFRS Practice Statement 2) X Deefinition of Accounting Estimates (Amendment to IAS 8) X Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12) X Lease Liability in a Sale and Leaseback (Amendment to IFRS 16) X IAS 1 Presentation of Financial Statements (Amendment – Classification of Liabilities as Current or Non-Current None of the amendments listed above is expected to have any material any impact on t on financial statements. NOTE 04 FINANCIAL INSTRUMENTS – RISK MANAGEMENT General objectives, policies, and processes The group is exposed to nd to financial risk in various areas, including currency risk. The objective with th financial instruments is to reduce the ne financial risk to the greatest extent possible. The company's current strategy includes the use of ne of financial instruments in the business in Sweden, while the the currency risk for the business in Norway is primarily sought reduced by continuously matching the selling price of the products against developments in purchase for goods measured in NOK, as well as buying KOMPLETT ASA ANNUAL REPORT 2022 127 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS currency at the same time placed for goods in a foreign currency. The currency is then used to pay suppliers. Many of Komplett's products are purchased and sold in a market where prices can change up to several times per day. The best hedging of currency y fluctuations has therefore historically been shown to be close follow-up and change of selling price, combined with high turnover rate of goods exposed to currency risk. Capital management The group assess its capital based on the desired equity ratio based on the risk assessments in the individual companies. The objective of capital management is that the group shall have an adequate capital base for the ongoing operations and potential new projects. The capital base is mainly governed in dialogue with the owners in relation to how much of the current results are distributed in dividends. Currency risk The group is exposed to currency exchange risk arising from the import of goods for sale, both into Norway and Sweden. These transactions are mainly settled in USD and EUR. As part of the company's revenues are in foreign currency, the group is also exposed to changes in exchange rates, especially SEK and DKK. The company has entered into forward contracts for the business in Sweden to reduce the company's foreign exchange risk and thereby reduce the operating market risk. This for the same reason as mentioned above. The net exposure in each currency is as stated in the table below. The exposure is split on the functional currency of each subsidiary in the group. 31.12.2022 Functional currency (All gures in(All figures in OCur million) NOK SEK Exposed currency NOK - 40.0 SEK 5.9 - EUR 0.5 6.3 USD 0.6 6.5 DKK (3.1) (0.7) GBP 0.2 0.0 PLN (0.7) - 31.12.2021 Functional currency (All gures in(All figures in OCur million) NOK SEK Exposed currency NOK - 0.7 SEK 16.8 - EUR (0.3) 0.7 USD 0.5 0.2 DKK (4.8) 7.7 GBP 0.2 0.0 PLN (0.8) - Interest rate risk The group has a net overdraft facility at the end of 2022 which has not been utilised, it has a loan linked to the deferred payment portfolio in Webhallen which is drawn with NOK 49.2 million, a credit facility in NetOnNet which is drawn with NOK 76.1 million, a long-term loan at the end of 2022 of NOK 400 million, and an agreement on nt on floating interest for both bank deposits and overdrafts. If interest rates change by one per cent, net interest expense changes by approx. NOK 1.6 million. The group has income from credit via partial payment and deferred payment and changes in interest rates will affect these. A change in interest rates by one per cent will result in a change in revenues of NOK 1.3 million per an year. Credit risk The risk of selling to private end customers is limited by the average order size, and by the fact that in the vast majority of cases, the customer pays the goods credit card. Pr. Private individuals are normally not granted credit. New retailers and business customers are credit-rated by a dedicated credit department. Careful credit limits are set and KOMPLETT ASA ANNUAL REPORT 2022 128 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS customers are manually assessed as soon as the credit limit is reached or they have overdue payments. Komplett issues only one debt collection notice prior to submission to an external debt collector. All major customers are assessed manually at each quarter- end closing. Upon review, speciific provisions are made based on assessments made by the head of the credit department. This review assesses the customer's payment history. A new credit rating of the customer is obtained where new credit information is collected from our partner Bisnode. Provisions are made for all ongoing debt collection cases based on expected collection, derived from the experience of the debt collector. Currently, this amounts to 50 per cent. All cases that are added to surveillance are continuously lost. At the end of the year, the receivables from deferred payment amounted to NOK 91 million. All customers applying for deferred payment go through the group's automatic credit rating scorecard system. The scorecard systems are built together with a debt collection partner and credit reference agencies. Provisions are made based on the share for debt collection, and the debt collection company's expectations for the rate of collection. Liquidity risk At the end of 2022, the group has net unused overdraft rights of NOK 1 189.7 million. Net working capital is positive with NOK 644.5 million. The group has large seasonal al fluctuations in relation to turnover. The table below shows the maturity structure of the group's ns financial liabilities Amounts in NOK million Total 0-6 months 6-12 months 2-3 years 4-5 years After 5 years 31 December 2022 Long-term loans 1) 486 13 13 50 410 - Short-term loans 634 634 - - - - Trade payables 1 412 1 412 - - - - Public duties 395 395 - - - - Other short-term liabilities 339 339 - - - - Total 3 265 2 792 13 50 410 - Amounts in NOK million Total 0-6 months 6-12 months 2-3 years 4-5 years After 5 years 31 December 2021 Long-term loans 1) 446 5 5 21 415 - Short-term loans 209 209 - - - - Trade payables 1 124 1 124 - - - - Public duties payable 293 293 - - - - Other short-term liabilities 212 212 - - - - Total 2 284 1 843 5 21 415 - 1) On 31 May 2021, Komplett ASA entered into a NOK 500 million unsecured revolving credit facility agreement with Skandinaviska Enskilda Banken AB (publ), with a three years' duration and 1 + 1 year renewal option. At 31 December 2022, NOK 400 million were utilised. KOMPLETT ASA ANNUAL REPORT 2022 129 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Financial instruments based on category 31 December 2022 Amounts in NOK million Financial assets at fair value Financial assets at amortised cost Financial liabilities at fair value Financial liabilities at amortised cost Assets Non-current receivables - 5 - - Other non-current non-current financial assets - 3 - - 1 Trade receivables - 400 - - Other current nt financial asset - 589 - - Cash - 149 - - Currency forwards 2 Liabilities Long-term loans - - - 400 Short-term loans - - - 625 Trade payable, public duties payable, and other current liabilities - - - 2 148 31 December 2021 Amounts in NOK million Financial assets at fair value Financial assets at amortised cost Financial liabilities at fair value Financial liabilities at amortised cost Assets Non-current receivables - 34 - - Trade receivables - 806 - - Other current nt financial asset - 346 - - Cash - 41 - - Liabilities Long-term loans 400 Short-term loans - - - 207 Trade payable, public duties payable, and other current liabilities - - - 1 629 KOMPLETT ASA ANNUAL REPORT 2022 130 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 05 SEGMENT INFORMATION Through its well-known brands Komplett, NetOnNet, Webhallen, and Itegra, the group is serving customers in the B2C, B2B, and distribution segments. Building on decades of know-how, expertise, and deep customer commitment, the group enjoys industry leading customer satisfaction and a loyal and growing customer base. Our customers are served from ten webshops, 17 physical shops, and 30 complementary self-service, logistics and warehouse shops. With its ts flexible logistics and delivery platform, the group is at the forefront when it comes to same-day delivery and last-mile service from its warehouses in Sandefjord, Norway, and Stockholm and Borås, Sweden. For management purposes, the segments are divided relative to whether the customer is a consumer (B2C), a private company or a public entity. Further, the sale to private companies is divided into sale to resellers (Distribution) and sale to companies where the company is the end user (B2B). The segmentation is independent of the legal structure of Komplett Group and doesn't necessarily reeflect the legal company in a different country. The main reason for the segmentation is the characterisation of the consumer, how to drive sales, different gross margins, and different cost structure. Komplett Group has a signicficant infrastructure serving all three segments. The cost related to the infrastructure is allocated to the different segments in a proportion of the usage. Webhallen and NetOnNet have a separate infrastructure and does not receive this allocation to the same extent. B2C Komplett Group’s operations in the B2C segment cover sales to private consumers across Norway, Sweden, and Denmark through the brands Komplett, NetOnNet, and Webhallen. The group serves the private consumer market for electronics, technology products, and consumer goods through six online shops, selling products sourced from third-party brands and its own private labels. Komplett serves its B2C customers on the platforms Komplett.no, Komplett.se and Komplett.dk. Komplett also operates two pick-up points, one in Oslo and one at the warehouse in Sandefjord. Webhallen is an omnichannel provider within consumer electronics, with the online platform Webhallen. com and 17 retail stores and pick-up points in Sweden, located strategically around Stockholm and other bigger cities. NetOnNet has two online shops in Sweden and Norway, NetOnNet.se and NetOnNet.no, and a total of 30 complementary self-service, logistics and warehouse shops located in Sweden and Norway. B2B Komplett B2B is an online player market for corporate customers in the Nordics focusing on the small and medium sized enterprises and small ol office / home oce office segments. Komplett B2B offers its customers a fully digital customer journey through its web shops Komplettbedrift.no and Komplettforetag.se and serving the Norwegian and Swedish market, respectively. Komplett Group further expanded its operations in the B2B segment during 2021 through the acquisition of Ironstone, which is a pure cloud technology company offering IT services to corporate customers that complement traditional hardware purchases. Ironstone was consolidated into the group’s operations from 1 September 2021, and its operations are reeflected in the B2B segment reporting from this date. Distribution The group’s activities in the distribution segment consist of large-scale distribution contracts for sale to resellers and other big entities not covered by B2B, which are operated under the Itegra brand and its own platform. Itegra is present in Norway and Sweden and serves its customers through the websites Itegra.no and Itegra.se, respectively. Other The "Other" segment represents group costs not allocated to the business segments. Typical cost elements under this segment include management costs and group strategic initiatives. IFRS The different effects of "IFRS 16" (International Financial Reporting Standards) are not part of the operational measures and are excluded from the business segments. The segmentation above is according to the internal reporting on both daily and monthly basis. Further, the segments has separate management and employees to run their business. Every month, the segments need to report to the executive management team. Transactions between the segments and the legal companies in the group are on arms-length terms. In all internal and external reporting, these transactions are eliminated. KOMPLETT ASA ANNUAL REPORT 2022 131 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Information about the group's segments is presented below. Prot oofit or loss - 2022 Amounts in NOK million B2C B2B Distribution Other IFRS 16 Total Operating income Revenues from contract with customers 9 606 1 501 3 191 - - 14 299 Other operating revenues 178 114 16 23 (12) 319 Total operating income 9 785 1 615 3 207 23 (12) 14 618 Operating expenses Cost of goods sold (8 450) (1 339) (3 035) (0) - (12 824) Employee benet e benefit expenses (627) (80) (60) (53) - (820) Depreciation, amortisation, and impairments (64) (8) (6) (37) (141) (256) Other operating expenses (632) (72) (44) (130) 165 (712) Total operating expenses (9 773) (1 499) (3 144) (220) 24 (14 612) OPERATING RESULT 12 116 63 (197) 12 6 Financial income and nancial e financial expenses Share of protShare of profit or loss from associates - - - 4 - 4 Financial income - - - 2 0 2 Financial expenses - - - (93) (18) (111) Net Net financial items - - - (87) (18) (104) PROFIT OR LOSS BEFORE TAXES 12 116 63 (284) (6) (98) Prot oofit or loss - 2021 Amounts in NOK million B2C B2B Distribution Other IFRS 16 Total Operating income Revenues from contract with customers 6 298 1 495 3 110 - - 10 903 Other operating revenues 84 33 14 21 (12) 140 Total operating income 6 382 1 528 3 124 21 (12) 11 043 Operating expenses Cost of goods sold (5 399) (1 252) (2 931) 1 - (9 581) Employee benet e benefit expenses (331) (63) (65) (52) - (511) Depreciation, amortisation, and impairments (48) (9) (6) (1) (65) (129) Other operating expenses (375) (57) (44) (62) 85 (453) Total operating expenses (6 153) (1 382) (3 046) (114) 20 (10 674) OPERATING RESULT 229 146 79 (93) 9 369 Financial income and nancial e financial expenses Share of protShare of profit or loss from associates - - - 3 - 3 Financial income - - - 1 2 3 Financial expenses - - - (15) (14) (28) Net Net financial items - - - (10) (12) (22) PROFIT OR LOSS BEFORE TAXES 229 146 79 (104) (3) 347 KOMPLETT ASA ANNUAL REPORT 2022 132 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 06 REVENUES FROM CONTRACTS WITH CUSTOMERS Disaggregation of revenue The group has disaggregated revenue into various categories in the following table which is intended to: depict how the nature, amount, timing and uncertainty of revenue and cash owh flows are affected by economic date, and to enable users to understand the relationship with revenue segment information provided in note 5. Disaggregation based on type of customers Amounts in NOK million 2022 2021 Sale to consumers (B2C) 9 785 6 382 Sale to corporates (B2B) 1 615 1 528 Sale to resellers (B2B) 3 207 3 124 Other 11 9 Total 14 618 11 043 Revenues based on geographic location of customers Amounts in NOK million 2022 2021 Norway 7 351 7 126 Sweden 7 025 3 553 Denmark 243 364 Total 14 618 11 043 Revenues by product or service Amounts in NOK million 2022 2021 Sale of goods 14 299 10 903 Commission from deferred payment and sale of insurance 319 140 Total 14 618 11 043 Critical judgements The group used the following assessments which have a signiificant impact on the amount and time of recognition of income from contracts with customers: Sale of goods Liabilities and assets related to sales to the consumer with open purchase. In the event of ordinary sales to customers, the group allows the customer to return the item for a full refund, The terms varies from store to store and from country to country depending on the markets, but are within the range of10- 90 days (open purchase). Based on this, a refund liability is recognised (included in the line "Sales revenue of goods") and a right to returned goods (included in the line "cost of goods sold"). Historical data is used to estimate the extent of returns at the time of sale. Since the proportion of returns has been stable over it is certain that a signiificant reversal of income will not occur because of changes in the return grade. The estimates of returns are reassessed on each balance sheet day. The group's liabilities for repair and/or exchange of defective products under ordinary guarantees are recognised as a liability included in the line "Other current liabilities" in the ne financial statements. Customer loyalty programmes Komplett has a customer loyalty programme related to sales to consumers where the customer accumulates points based on completed purchases. Total vested points will put the customer at different levels, which give different benets.benefits. Club members in Klubbhyllan, with the NetOnNet card, vest bonus points when purchasing products either in the stores or online. These points can be exchanged to value checks and used as discounts on future purchases. The provision depends on estimates on which discount the points will be generated when they are applied and the likelihood of actually being applied. These parameters are based on historical experience KOMPLETT ASA ANNUAL REPORT 2022 133 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Commissions The group receives commissions for the distribution of nfinancing via partners Komplett Bank and Resurs Bank. The consideration consists of a ts of a fixed part based on volume and a variable part based on the funding period. Since the nfinances are not timed, the income recognition of the part variable part is postponed until the group is entitled to the consideration. Gift certictificates Gift certicficates can be purchased in all webshops and physical stores. The value of the gift certicficates can vary as can the experation time. Until the gift certicficate has been applied to purchase products, or until the certicficate has expired, there is recognised a liability in the balance sheet. Contract balances for contracts with customers Amounts in NOK million 2022 2021 Refund liabilities 21 5 Provision for warranties 20 17 Customer loyalty programme 8 - Gift certicatestificates 38 24 Total 86 46 NOTE 07 EMPLOYEE BENEFIT EXPENSES AND AUDIT FEES Amounts in NOK million 2022 2021 Salaries 530 298 Social security expenses 138 67 Contribution to pension schemes 39 20 Fees for external staff 89 87 Share option plan (see note 18) 2 2 Bonuses 9 28 Other expenses 13 9 Total 820 511 The number of man-years that has been employed during the ne financial year: 1 251 565 Key management compensation in 2022: Amounts in NOK million Salary Bonuses earned Pension Other benets benefits Value of options granted Total Lars Olav Olaussen, CEO 4.48 - 0.02 0.26 - 4.76 Krister Pedersen, CFO 2.43 - 0.02 0.08 - 2.53 Trine L Jensen, head of group supply chain/IT program 2.31 - 0.02 0.21 - 2.54 Kristin H Torgersen, chief HR of HR officer 2.10 - 0.02 0.31 - 2.43 Kjetil Wisløff, category and buying director (Mar-Dec) 1.18 - 0.02 0.04 - 1.24 Henri Blomqvist, managing director Webhallen (Jan-Mar) 2.26 - 0.42 0.09 - 2.77 Per Skøien, head of category and procurement 1.70 - 0.02 0.21 - 1.93 Jan Erik Svendsen, director B2B & Itegra (interim) (Sep-Dec) 1.53 - 0.01 0.01 - 1.55 Susanne Holmström, deputy CEO and managing director of NetOnNet (Apr-Dec) 3.45 1.65 1.46 0.10 - 6.67 Anders Torell, Managing director of Webhallen (Apr-Dec) 2.16 - 0.55 0.05 - 2.75 Roger Sandberg, chief procurement ocer (AprRoger Sandberg, chief procurement officer (Apr-Dec) 2.06 1.00 0.71 0.26 - 4.03 Martin Klafstad, managing director of Komplett 3.90 - - - - 3.90 Total 29.57 2.65 3.27 1.62 - 37.11 KOMPLETT ASA ANNUAL REPORT 2022 134 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS X The bonus scheme for group management consists of the following elements: 1) budgeted EBIT, 2) budgeted sale, 3) discretionary share X Group management is included in the group's ordinary dened contributiondefined contribution pension schemes. X The company provides severance pay that is regulated by the employment contract and which is considered to be fair and reasonable for the position in question and the scope of responsibility the position holds. In special situations, the ne final consideration can be increased if the reason for the termination of the employment implies it. Key management compensation in 2021: Amounts in NOK million Salary Bonuses earned Pension Other benets benefits Value of options granted Total Lars Olav Olaussen, CEO 3.85 2.81 0.02 0.26 0.92 7.87 Krister Pedersen, CFO 2.24 1.78 0.02 0.01 0.58 4.63 Trine L Jensen, chief information & operating og officer 2.17 1.58 0.02 0.22 0.52 4.51 Kristin H Torgersen, HR director (interim) (May-Dec) 1.09 0.99 0.02 0.20 - 2.29 Kjetil Wisløff, category and buying director (Mar-Dec) 1.96 1.62 0.02 0.11 0.64 4.34 Henri Blomqvist, managing director Webhallen 2.52 1.47 0.73 0.30 0.58 5.61 Kristin Hovland, head of commincation an advisor to CEO 0.71 0.55 0.01 0.01 0.18 1.46 Hanne Elisabeth Hagen, HR director 1.50 - 0.02 0.13 0.36 2.02 Per Skøien, head of category and procurement 1.52 0.99 0.02 0.21 0.36 3.11 Stian Gabrielsen, director B2B & Itegra (Jan-Aug) 2.08 - 0.02 0.01 0.50 2.62 Kristoffer G. Langballe (Jan-Apr) 0.73 0.40 0.01 0.05 - 1.18 Mats Hansen, category and buying director (Jan-Apr) 0.52 0.38 0.01 0.00 - 0.91 Jan Erik Svendsen, director B2B & Itegra (interim) (Sep-Dec) 0.38 0.40 0.01 0.01 0.22 1.01 Total 21.26 12.96 0.95 1.51 4.87 41.56 X The bonus scheme for group management consists of the following elements: 1) budgeted EBIT, 2) budgeted sale, 3) discretionary share X Group management is included in the group's ordinary dened contributiondefined contribution pension schemes. X The company provides severance pay that is regulated by the employment contract and which is considered to be fair and reasonable for the position in question and the scope of responsibility the position holds. In special situations, the ne final consideration can be increased if the reason for the termination of the employment implies it. Compensation to the board of directors: Amounts in NOK million Role Committee 2022 2021 Jo Lunder (22-24) Chair Compensation 0.48 0.22 Nils Selte (21-Jun 22) Chair Compensation 0.18 0.37 Lars B Thoresen (19-23) Director Audit 0.41 0.27 Sarah Willand (21-23) Director Compensation 0.38 0.25 Jennifer Geun Koss (20-23) Director Audit 0.36 0.38 Anders Odden (18-23) Worker director 0.15 0.14 Nora Eldås (21-23) Worker director 0.15 0.10 Camilla Johansen (19-21) Worker director - 0.03 Sverre Kjær (21-23) Nomination 0.08 - Karin B Orgland (21-23) Nomination 0.04 - Nina C. H Sørli (21-23) Nomination 0.04 - Total 2.27 1.76 Effective since June 2021, a long-term incentive programme (the "LTI program") was established for the executive management team, key employees and certain identied ified young talents. At 31 December 2022, 23 employees were included in the option programme. The share option plan is further presented in note 18. Below is an overview of management share options: KOMPLETT ASA ANNUAL REPORT 2022 135 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Key management - share option Opening balance Granted For- feited Exer- cised Average exercise price (A) Ending balance Average exercise price (B) Average maturity Lars Olav Olaussen, CEO 58 127 - - - - 58 127 64.43 3.48 Krister Pedersen, CFO 36 711 - - - - 36 711 64.43 3.48 Trine L Jensen, Head of group supply chain / IT program 32 668 - - - - 32 668 64.43 3.48 Kjetil Wisløff, category and buying director (Mar 21 - Mar 22) 40 566 - (40 566) - - - - - Henri Blomqvist, managing director Webhallen (Oct 20 - Apr 22) 36 714 - (29 372) - - 7 342 61.80 3.48 Per Skøien, head of category and procurement (Sep 19 - Mar 22) 22 944 - - - - 22 944 64.43 3.48 Jan Erik Svendsen, director B2B & Itegra (interim) (Sep 21 - Mar 22) 13 575 - - - - 13 575 64.43 3.48 Total 275 415 - (88 294) - 187 121 - - (A) - average exercise price for options exercised during the year (B) - Average exercise price for options at the end of the year The options will vest gradually over three years after grant, of which 20 per cent of the options will vests after one year, 20 per cent will vest after two years, and the remaining 60 per cent will vest after three years. All options will expire re five years after the date of grant. Shares held by group management and board members at 31 december 2022: Number of shares Lars Olav Olaussen, CEO (R og L Invest AS) 516 164 Susanne Holmström, deputy CEO and managing director of NetOnNet 48 Krister Pedersen, CFO (Crit AS) 174 684 Trine L Jensen, Head of group supply chain/IT program (TLJ Invest AS) 102 590 Kristin H Torgersen, chief HR of HR officer 11 835 Jon Martin Klafstad, managing director of Komplett (AS Master Trading) 50 564 Anders Torell, managing director of Webhallen (Grand Mosse Konsult AB) 16 949 Jo Olav Lunder, Chair (Cigalep AS) 391 777 Fabian Bengtson, Director (SIBA Invest AB) 55 581 404 Lars Bjørn Thoresen, Director (LT Invest AS) 378 646 Jennifer Geun Koss, Director 4 166 Anders Odden, Worker director 8 333 Total 57 237 160 Pension: Komplett is obliged to have occupational pension pursuer of the Mandatory Occupational Pension Act and in 2006 established a scheme with a de defined contribution pension for employees in Norway. The scheme complies with the requirements of this Act. Employees in the Norway also have a contractual pension scheme (AFP). Due to the employee's age composition, obligations related to this are not actuated and no obligation has been made relating to this. This year's recognised expenses for dened defined contribution plans (including multi employer plans) amount to NOK 11.4 million In Sweden, there are two pension schemes: ITP1 and ITP2. Employees born in 1978 or before are members of ITP2, while the remaining employees are part of ITP1. ITP2 is a mixed scheme with one part based on nn final salary and one part based one a xe a fixed contribution. ITP2 is is a multi- employer plan and fully recognised as a deefined contribution plan. This according to UFR10 "Uttlanade från rådet för nfinansiell rapportering". ITP1 is a deefined contribution plan and in total, this year's recognised expenses for dened defined contribution plans amount to NOK 27.8 million. KOMPLETT ASA ANNUAL REPORT 2022 136 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Audit fees The table below shows BDO and Deloitte’s total charges for auditing and other services. All amounts are exclusive of VAT. Audit fees to the auditors in the group entities is as follows (excluding VAT) Amounts in NOK million 2022 2021 Statutory audit 4.41 2.80 Other assurance services 0.22 0.31 Other non-assurance services 0.23 0.85 Total 4.86 3.96 NOTE 08 FINANCE INCOME AND EXPENSES Finance income Amounts in NOK million 2022 2021 Interest income 1.69 1.03 Interest from leases 0.26 1.90 Other nr finance income 0.17 0.23 Total nancial incomeotal financial income 2.13 3.16 Finance expenses Amounts in NOK million 2022 2021 Interest on debts and borrowings 82.66 14.46 Interest on leases 17.89 13.70 Foreign exchange losses (0.13) (0.21) Other nance eOther finance expenses 10.48 0.42 Total l finance expenses 110.90 28.37 KOMPLETT ASA ANNUAL REPORT 2022 137 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 09 INCOME TAX Taxable income Amounts in NOK million 2022 2021 Result from continued operations (98) 347 Result from discontinued operations 12 - Non taxable items 1) 51 8 Correction of previous years - (96) Use of tax loss carried forward (218) (34) Changes in temporary differences 45 (22) Taxable income (208) 202 Income tax expense: Current income tax (29) 66 Correction of previous years current income taxes 2) (0) (21) Changes in deferred tax (24) 2 Total income tax expense (54) 48 Income tax expenses from discontinued operation 3 - Income tax expense from continued operation (56) 48 Total income tax expense from continued - and discontinued operation (54) 48 Income tax expense Norwegian operations (39) 53 Income tax expense foreign operations (15) (5) Total income tax expense (54) 48 KOMPLETT ASA ANNUAL REPORT 2022 138 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Temporary differences and tax positions Amounts in NOK million 2022 2021 Intangible assets 1 437 89 Property, plant, and equipment (26) (84) Inventories (34) (19) Receivables (6) (3) Provisions (28) (26) Tax losses carried forward 3) (352) (282) Total temporary differences and tax positions 992 (324) Temporary differences and tax positions not included in the basis for deferred tax 202 208 Basis for deferred tax 1 194 (116) Net deferred tax 245 (25) SpecicationSpecification in the statement of nancial positf financial position: Deferred tax asset 245 (25) Net deferred tax 245 (25) Tax payable in the statement of nt of financial position: Current income tax payable 4) (29) 66 Used not capitalised deferred tax asset 47 - Prepaid tax (1) 2 Net tax payable 17 68 1) Includes non-deductible costs such as transaction costs, representation, gifts and non-taxable income such as capital gains and dividends from associated companies. 2) NOK 22 million is a result of a positive outcome in a tax case that applies to the years 2012 to 2016 and which has not previously been included in the basis for capitalised deferred tax assets 3) The tax loss carried forward has occurred in the period 2002 - 2019. When calculating the group's deferred tax assets, tax loss carried forward is only included to the extent that there is convincing evidences that tax losses can be utilised. It is the company's assessment that the activated tax benet cefit can be exploited. Under current tax rules, there is no expiration date related to the tax-reducing temporary differences. 4) The main part of this tax claim lapses in the event of a positive outcome in an unresolved tax case Reconciliation of effective tax rate Amounts in NOK million 2022 2021 Prot befProfit before tax (86) 347 Income tax based on applicable tax rate (22%) (19) 76 Effect from foreign currency and different tax rates 1 (0) Changes in not recognised tax loss carried forward 0 3 Effect of income from associated company after tax (1) (0) Correction of previous years current income taxes (0) (21) Not deductible expenses 12 2 Effect of used not capitalised deferred tax asset (47) (1) Effect of recognition of deferred tax asset - (11) Income tax expense (54) 48 Effective tax rate 62.6% 13.7% KOMPLETT ASA ANNUAL REPORT 2022 139 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 10 EARNINGS PER SHARE The basic earnings per share are calculated as the ratio of the proofit for the period that is due to the shareholders of the parent divided by the weighted average number of ordinary shares outstanding. On the 28th of May, the shareholders meeting resolved to merge the two separate classes of shares , by changing all shares to ordinary shares. For the calculation of earning per share this is treated as a settlement of the preference shares by issuing ordinary shares. The difference between the fair value the ordinary shares "issued" and the carrying amount of the preference shares settled is charged against the result allocated to the holders of ordinary shares. Dividends paid or payable to the holders of preference shares is also charged against the result allocated to the holders of ordinary shares. Earnings per share Amounts in NOK million 2022 2021 Result allocated to the holders of ordinary shares Prot from contiProfit from continuing operations (42) 300 Prot from discontProfit from discontinued operations 10 0 Dividend payable to preference share holders - (48) Additional dividend paid to holders of preference shares - (173) Difference between fair value and carrying amount on conversion 1) - (1 775) Result allocated to the holders of ordinary shares (32) (1 696) Prot from discontProfit from discontinued operations 10 0 Prot fProfit from continued operations (42) (1 696) Average number of shares Shares at the beginning of the period 72 255 155 4 335 309 Effect of merging the two classes of shares - 5 900 838 Effect of new shares 32 459 501 - Average number of shares 104 714 656 10 236 147 Effect of 1 to 5 split 2) 51 180 734 Earnings per share (basic and diluted) - in NOK (0.31) (33.14) Earnings per share (basic and diluted) in NOK from continuing operations (0.40) (33.14) 1) Canica holds 100 per cent of the preference shares and close to 100 per cent of the ordinary shares. The theoretical loss/charge towards the result allocated to the holders of ordinary shares is an off market transaction, and the charge included above holds little meaning and is just theoretical. 2) In May, the shareholders at the shareholders meeting resolved a 1 to 5 split of the shares in the company. For the calculation of earnings per share, the split is adjusted for retrospectively. Diluted earnings per share The group has an option programme (see note 18), but since earnings per share are negative, this has no dilutive effect. There are also no other instruments that will have a dilutive effect on earnings per share at 31 December 2022. KOMPLETT ASA ANNUAL REPORT 2022 140 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 11 INTANGIBLE ASSETS Amounts in NOK million Goodwill Software Other intangible assets Total Cost at 31 December 2021 553 545 243 1 341 Additions from acquisition of companies 1 688 63 1 381 3 132 Additions - 89 - 89 Disposals - (2) - (2) Foreign currency effects 10 (0) 7 16 Cost at 31 December 2022 2 251 694 1 631 4 576 Acc. amortisation and impairments at 31 December 2021 (119) (432) (170) (721) Amortisation charge - (47) (37) (84) Disposals - 2 - 2 Foreign currency effects - 0 1 1 Acc. amortisation and impairments at 31 December 2022 (119) (476) (206) (802) Carrying amount at 31 December 2021 433 113 73 620 Carrying amount at 31 December 2022 2 131 218 1 424 3 773 Carrying amount of assets with indefinite life 2 131 - 1 127 3 259 Amortisation rate 15 - 25% 14 - 20% The group amortises all intangible asset based on the linear method. Useful economic life 2022 2021 Customer relations 5 - 7 year 5 - 7 year Software 3 - 7 year 3 - 7 year Other intangible assets relate to the purchase of brand names, customer relationships and added value on leases. Brand names are considered to have an indenfinite lifetime and are therefore not depreciated but are subject to annual impairment testing. The depreciation period for customer relationships is based on the best estimate for economic life for the assets. Goodwill acquired through acquisitions is allocated to six individual cash-generating units for the impairment test. Intangible assets by segment or CGU at 31 December 2022 Amounts in NOK million Goodwill Trade names Customer relations Total CGU/Segment Komplett B2C 148 - - 148 Komplett B2B 223 - - 223 Itegra 68 5 - 73 Webhallen Sweden AB 290 48 - 338 Ironstone 78 5 10 94 NetOnNet 1 324 1 069 287 2 679 Total at 31 December 2022 2 131 1 127 297 3 555 KOMPLETT ASA ANNUAL REPORT 2022 141 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Impairment test of goodwill and intangible assets Goodwill is allocated to the group's cash sh flow-generating units as shown above. The recoverable amount of the cash- generating units is calculated based on the value of the asset for the business (value of use). The impairment tests are based budgets for next year with a projection based on long-term strategic plans. The man- agement has set budgeted gd figures for 2023 based on previ- ous performance and expectations for market developments. Growth rates for the period 2023 - 2027, are in accordance with the management's long-term plan and are used as pro- jections of budgeted ted figures for 2023. After 2027 two per cent perpetual growth is based on cash sh flows in the year 2027. The discount rate used is after tax and reects tax and reflects specic specific risks to the relevant operating segment/CGU. Impairment test of the cash-generating unit Komplett B2C The impairment test shows that the calculated value in use estimated usage value is higher than the carrying amount. The calculation is based on a model with budgeted/projected cash oh flows for a period of f five years with residual value after year ar five. The cash oh flows estimate includes estimated annual growth of -1.7 per cent to 11.2 per cent in revenues in the he first vfive-year period, which is reduced to a 2.0 per cent perpetual growth from year 6. The EBIT margin is assumed to be in the range 1.9 - 4.2 per cent in the re firs s five-year period, and 3.0 per cent in the calculation of the terminal value. A WACC of 11.0 per cent after tax is used for the value in use calculation. Sensitivity The following reasonable possible changes in key assumption would result in the value in use being equal to the carrying amount. Changes in cash oh flow assumptions below are related to changes in the terminal value. In per cent Change in revenues growth N/A Changes in EBIT margin Decrease from 3.0 to -0.1% Change in discount rate increase from 11.0% to 34.2% Any changes in key assumption that would result in the value in use being equal to the carrying amount is considered to exceed reasonable changes. Impairment test of the cash-generating unit Komplett B2B The impairment test shows that the calculated value in use estimated usage value is higher than the carrying amount. The calculation is based on a model with budgeted/projected cash oh flows for a period of f five years with residual value after year ar five. The cash oh flows estimate includes estimated annual growth of 2.0- 12.4 per cent in revenues in the he first st five-year period, which is reduced to a 2.0 per cent perpetual growth from year 6. The EBIT margin is assumed to be in the range 8.8 - 10.8 per cent in the he firs rs five-year period, and 8.0 per cent in the calculation of the terminal value. A WACC of 11.0 per cent after tax is used for the value in use calculation. Sensitivity The following reasonable possible changes in key assumption would result in the value in use being equal to the carrying amount. Changes in cash oh flow assumptions below are related to changes in the terminal value. In per cent Change in revenues growth N/A Changes in EBIT margin Decrease from 8.0% to -1.4% Change in discount rate Increase from 11.0% to 43% Any changes in key assumption that would result in the value in use being equal to the carrying amount is considered to exceed reasonable changes. Impairment test of the cash-generating unit Itegra The impairment test shows that the calculated value in use estimated usage value is higher than the carrying amount. The calculation is based on a model with budgeted/projected cash oh flows for a period of f five years with residual value after year ar five. The cash oh flows estimate includes estimated annual growth of 2.0 - 5.8 per cent in revenues in the n the first st five-year period, which is reduced to a 2.0 per cent perpetual growth from year 6. The EBIT margin is assumed to be in the range 2.1 - 2.4 per cent in the re firs s five-year period, and 2.4 per cent in the calculation of the terminal value. A WACC of 11.0 per cent after tax is used for the value in use calculation. Sensitivity The following reasonable possible changes in key assumption would result in the value in use being equal to the carrying amount. Changes in cash oh flow assumptions below are related to changes in the terminal value. In per cent Change in revenues growth N/A Changes in EBIT margin Decreased from 2.4% to 1.2% Change in discount rate Increased from 11% to 16.8% Any changes in key assumption that would result in the value in use being equal to the carrying amount is considered to exceed reasonable changes. Impairment test of the cash-generating unit Webhallen Sweden AB The impairment test shows that the calculated value in use estimated usage value is higher than the carrying amount. The calculation is based on a model with budgeted/projected cash oh flows for a period of f five years with residual value after year ar five. The cash oh flows estimate includes estimated annual growth of 3.0 - 9.4 per cent in revenues in the he first st five-year period, which is reduced to a 2.0 per cent perpetual growth from year 6. The EBIT margin is assumed to be in the range -0,1 per cent to + 3.5 per cent in the re first vt five-year period, and 3.5 per cent in the calculation of the terminal value. A WACC of 10.0 per cent after tax is used for the value in use calculation. KOMPLETT ASA ANNUAL REPORT 2022 142 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Sensitivity The following reasonable possible changes in key assumption would result in the value in use being equal to the carrying amount. Changes in cash oh flow assumptions below are related to changes in the terminal value. In per cent Change in revenues growth Decrease from 2.0% to-0.9% Changes in EBIT margin Decrease from 3.5% to 2.7% Change in discount rate Increase from 10.0% to 11.7% The value in use is close to the carrying amount and changes in key assumption might change the conclusion related to impairment. Calculated headroom 31 December 2022 is SEK 131 million. Impairment test of the cash-generating unit Ironstone The impairment test shows that the calculated value in use estimated usage value is higher than the carrying amount. The calculation is based on a model with budgeted/ projected cash sh flows for a period of d of five years with residual value after year ar five. The cash oh flows estimate includes estimated annual growth of 15 - 59 per cent in revenues in the the first vt five-year period, which is reduced to a 2.0 per cent perpetual growth from year 6. The EBIT margin is assumed to be in the range 3.1 - 8.7 per cent in the e first t five-year period, and 6.2 per cent in the calculation of the terminal value. A WACC of 12.0 per cent after tax is used for the value in use calculation. Sensitivity The following reasonable possible changes in key assumption would result in the value in use being equal to the carrying amount. Changes in cash oh flow assumptions below are related to changes in the terminal value. In per cent Change in revenues growth Decreased from 2.0 to -3.1% Changes in EBIT margin Decreased from 6.2 to 3.8% Change in discount rate Increased from 12.0 to 15.3% The value in use is close to the carrying amount and minor changes in key assumption might change the conclusion. Calculated headroom 31 December 2022 is NOK 38 million. Impairment test of the cash-generating unit NetOnNet The impairment test shows that the calculated value in use estimated usage value is higher than the carrying amount. The calculation is based on a model with budgeted/ projected cash sh flows for a period of d of five years with residual value after year ar five. The cash oh flows estimate includes estimated annual growth of negative 3 per cent to positive 10 per cent in revenues in the he first t five-year period, which is reduced to a 2.0 per cent perpetual growth from year 6. The EBIT margin is assumed to be in the range 2.1 - 5.6 per cent in the the firs s five-year period, and 5.0 per cent in the calculation of the terminal value. A WACC of 10.0 per cent after tax is used for the value in use calculation. Sensitivity The following reasonable possible changes in key assumption would result in the value in use being equal to the carrying amount. Changes in cash oh flow assumptions below are related to changes in the terminal value. In per cent Change in revenues growth Decreased from 2.0 to 1.7% Changes in EBIT margin Decreased from 5.0 to 4.9% Change in discount rate Increased from 10.0 to 10.2% The value in use is close to the carrying amount and minor changes in key assumption might change the conclusion. Calculated headroom 31 December 2022 is SEK 75 million. KOMPLETT ASA ANNUAL REPORT 2022 143 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 12 PROPERTY, PLANT, AND EQUIPMENT Amounts in NOK million Leasehold improvements Machinery and equipment Total Cost at 31 December 2021 30 320 351 Additions from acquisition of companies 12 64 76 Additions 2 58 60 Disposals (1) (39) (39) Foreign currency effects 0 (1) (1) Cost at 31 December 2022 44 402 446 Acc. depreciation and impairments at 31 December 2021 (28) (295) (323) Depreciation (4) (27) (31) Disposals 0 39 39 Foreign currency effects (0) 2 1 Acc. depreciation and impairments at 31 December 2022 (31) (282) (313) Carrying amount at 31 December 2021 3 25 28 Carrying amount at 31 December 2022 13 121 134 Economic life 3 - 5 years 3 - 7 years Depreciation rate 20% 15 - 25% Depreciation method Linear Linear NOTE 13 INVESTMENTS IN ASSOCIATES The following entities have been included in the consolidated nd financial statements using the equity method: Name Country Industry Proportion of ownership Fabres Sp. Z.o.o. Poland Consulting 40.0% Based on an overall assessment where size and complexity are taken into account, Fabres Sp. Z.o.o. is considered to be signicsignificant associates. Further information regarding this company is disclosed below. Fabres Sp. Z.o.o. Book value Amounts in NOK million 2022 2021 At 1 January 10.8 8.7 Share of prot afit after tax 4.4 3.2 Dividend (1.6) (1.1) At 31 December 13.6 10.8 Fabres Sp. Z.o.o. is domiciled in Poland with ocffice in Poznan. The company is a consulting rg firm providing IT an n finance services. KOMPLETT ASA ANNUAL REPORT 2022 144 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Fabres Sp. Z.o.o. Summarised nanciaSummarised financial information Amounts in NOK million 2022 2021 Assets 17.4 14.3 Liabilities 1.8 1.9 Equity 15.5 12.4 Revenues 24.5 20.1 Total operating expenses (17.9) (15.1) Net Net financial items (0.2) 0.0 Prot oofit of the year 6.3 5.0 NOTE 14 TRADE AND OTHER RECEIVABLES Trade receivables Amounts in NOK million 2022 2021 Trade receivables at face value at 31 December 315 684 Less: Provision for impairment of trade receivables (6) (8) Net trade receivables 309 676 Receivables written off during the years 15 8 Collected on receivables written of in prior periods (3) (3) Changes in provision during the year (2) 2 Impairment loss during the year 10 8 The lifetime expected loss provision for trade receivables is as follows: Total Current 0-30d 30-60d 60-90d >90d At 31 December 2022 309 225 58 12 9 6 At 31 December 2021 676 579 82 8 4 4 KOMPLETT ASA ANNUAL REPORT 2022 145 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Receivables from deferred payment arrangements Amounts in NOK million 2022 2021 Gross amount receivable at 1 January 135 166 Less provision at 1 January (5) (14) Carrying amount 1 January 130 152 Additions during the year 101 88 Down payments (127) (122) Interest income 21 25 Net losses during the year (2) (22) Change in loss provision (3) 8 Carrying amount 1) at 31 December 119 130 Receivables due during next twelve months 78 51 Receivables due after twelve months 21 84 Less provision for losses (9) (5) Total 91 130 1) Carrying amount = gross receivables - loss provision Other current receivables Amounts in NOK million 2022 2021 Public duties receivable (VAT)/Tax 3 - Receivables from suppliers 332 261 Current lease liabilities - 12 Prepaid payroll element on option 11 21 Other receivables and prepaid expenses 117 21 Sum 464 315 Non-current receivables Amounts in NOK million 2022 2021 Rent deposits 4 1 Warranty - The Swedish Customs 1 1 Pension premium fund 3 1 Other non-current receivables - 1 Non-current lease receivable - 32 Sum 8 34 KOMPLETT ASA ANNUAL REPORT 2022 146 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 15 INVENTORIES Amounts in NOK million 2022 2021 Inventories carried at cost 1 979 1 316 Provision not allocated to specic goods specific goods (50) (20) Booked value 1 928 1 305 Amounts in NOK million 2022 2021 Changes in provision for impairment included in cost of cost sold 9 5 NOTE 16 CASH AND CASH EQUIVALENTS Amounts in NOK million 2022 2021 Cash at hand and on demand bank deposits 149 41 Restricted funds Amounts in NOK million 2022 2021 Bank deposits bound for payment of tax due 2.2 0.8 Rent deposits 1.2 - NOTE 17 SHARE CAPITAL, SHAREHOLDER INFORMATION, AND DIVIDEND Number of shares 2022 2021 Ordinary shares 175 297 579 72 255 155 Date/year Number of shares Nominal value NOK Type of change Share capital NOK million Share premium reserve NOK million 31 December 2019 14 451 031 2.00 29 1 075 31 December 2020 14 451 031 2.00 29 1 075 May 2021 72 255 155 0.40 Split 1) 29 1 075 31 December 2021 72 255 155 0.40 29 1 075 04 April 2022 107 497 579 0.40 43 2 780 16 November 2022 134 997 579 0.40 54 3 175 08 December 2022 175 297 579 0.40 70 3 741 1) In May 2021, the shareholders at the shareholders meeting resolved a 1 to 5 split of the shares in the company. KOMPLETT ASA ANNUAL REPORT 2022 147 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS All issued shares have equal voting rights and the right to receive dividend. For computation of earning per share and diluted earning per share, see note 10. The 20 largest shareholders at 31 December 2022 Name Holding Stake Type of account 1 Canica Invest AS 74 376 317 42.43% Ordinary 2 SIBA Invest AB 55 581 404 31.71% Ordinary 3 Verdipapirfondet Alfred Berg Gambak 5 532 206 3.16% Ordinary 4 The Bank of New York Mellon 4 398 418 2.51% Nominee 5 The Bank of New York Mellon 3 331 182 1.90% Nominee 6 The Northern Trust Comp, London 3 300 000 1.88% Nominee 7 Verdipapirfondet Holberg Norge 2 100 000 1.20% Ordinary 8 Verdipapirfondet Holberg Norden 2 100 000 1.20% Ordinary 8 Morgan Stanley & Co. Int. Plc. 1 887 234 1.08% Nominee 10 Sole Active AS 1 883 646 1.07% Ordinary 11 Wenaasgruppen AS 1 273 370 0.73% Ordinary 12 Verdipapirfondet Storebrand Norge 1 174 943 0.67% Ordinary 13 BNP Paribas 1 162 340 0.66% Nominee 14 Verdipapirfondet Pareto Investment 1 145 000 0.65% Ordinary 15 Citibank, N.A. 910 735 0.52% Nominee 16 UBS Europe SE 898 359 0.51% Nominee 17 Strømstangen AS 713 539 0.41% Ordinary 18 Vineberg Invest AS 713 538 0.41% Ordinary 19 Nian AS 685 625 0.39% Ordinary 20 UBS AG 618 057 0.35% Nominee Total top 20 163 785 913 93.43% Total number of shares 175 297 579 100.00% Shares held by board directors and CEO Title Number of shares Jo Lunder (Cigalep AS) Chair 391 777 Fabian Bengtsson (SIBA Invest AB) Director 55 581 404 Lars Bjørn Thoresen (LT Invest AS) Director 378 646 Jennifer Koss Director 4 166 Anders Odden Worker director 8 333 Lars Olav Olaussen (R og L Invest AS) CEO 516 164 Dividends/group contributions The company has paid out the following dividends (group contributions): Amounts in NOK million 2022 2021 Extraordinary dividends to A-shares - 400 KOMPLETT ASA ANNUAL REPORT 2022 148 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 18 SHARE OPTION PLAN The company has a long-term incentive programme, implemented as a share option programme, for members of the management, key employees and certain identiefied young talents. The programme has been adopted by the board of directors of Komplett ASA ("the company") to reward employees by enabling them to acquire shares of the company. At 31 December 2022, 23 employees were included in the option programme. The strike price for the options granted are based on the nfinal offer price including a premium of 3 per cent annually from grant date until the options are vested. The programme is measured at fair value at the date of the grant and the value of the issued options is expensed over the vesting period, which in this case is gradually over three years after grant. The Black-Scholes option-pricing model has been used to calculate the fair value. The cost of the employee share-based transaction is expensed over the average vesting period. The value of the issued options of the transactions that are settled with equity instruments (settled with the company’s own shares) is recognised as salary and personnel cost in prot afit and loss and in other equity. Social security tax on options is recorded as a liability and is recognised over the estimated vesting period. No options were granted during 2022. Total costs and social security provisions Amounts in NOK million 2022 2021 Total IFRS cost 1.72 2.30 Total social security provisions - 0.11 Quantity and weighted average prices 2022 2021 Activity Number of instruments Weighted average Strike price Number of instruments Weighted average Strike price Outstanding options 1.1 618 025 64.43 - - Granted - - 651 107 64.43 Terminated (217 000) 64.62 (33 082) 64.43 Outstanding options 31.12 401 025 64.32 618 025 64.43 Vested CB 92 973 61.80 - - Outstanding Instruments Overview at 31. December 2022 Outstanding Instruments Vested Instruments Expiry/ vesting date Strike price Number of instruments Weighted average remaining contractual life Weighted average strike price Vested instruments 31.12.2022 Weighted average strike price 2022 61.80 123 594 4.48 61.80 92 973 61.80 2023 63.65 123 594 4.48 63.65 - - 2024 65.56 370 837 4.48 65.56 - - Total 401 025 92 973 KOMPLETT ASA ANNUAL REPORT 2022 149 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Outstanding Instruments Overview at 31. December 2021 Outstanding Instruments Expiry/vesting date Strike price Number of instruments Weighted average remaining contractual life Weighted average strike price 2022 61.80 123 594 4.48 61.80 2023 63.65 123 594 4.48 63.65 2024 65.56 370 837 4.48 65.56 Total 618 025 NOTE 19 LEASES Right-of-use assets The group's leased assets include ocffices and other real estate. The group's right of use assets are categorised and presented in the table below: Summary of the right-of-use assets Amounts in NOK million Land and buildings Vehicles Total At 1 January 2021 255 - 255 Additions incl.adjustments to existing contracts 70 - 70 Amortisation (65) - (65) Foreign currency effects (6) - (6) At 31 December 2021 253 - 253 At 1 January 2022 253 - 253 Additions from acquisition of companies 336 2 339 Additions incl. adjustments to existing contracts 105 0 106 Amortisation (140) (1) (141) Foreign currency effects 3 - 3 At 31 December 2022 557 2 559 Economic life/lease term 1-9 years Amortisation method Straight line Lease liabilitiies Amounts in NOK million 31.12.2022 31.12.2021 Undiscounted lease payments and year of payment Less than 1 year 172 80 1-2 years 150 71 2-3 years 114 58 3-4 years 70 45 4-5 years 42 26 More than 5 years 51 67 Total undiscounted lease payments 599 347 KOMPLETT ASA ANNUAL REPORT 2022 150 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Summary of the lease liabilities Amounts in NOK million 2022 2021 At 1 January 2022 310 318 Additions 379 70 Interest expenses 18 14 Lease payments (165) -85 Foreign currency effects 16 -6 Total lease liabilities at 31 December 558 310 Whereof: Current lease liabilities 167 80 Non-current lease liabilities 391 230 Total cash outflows for leases 165 85 The lease contracts do not include any restrictions with regards to the group's dividend policy or nr financing opportunities. Lease payment expensed Amounts in NOK million 2022 2021 Summary of the right-of-use assets Expensed lease payment for short-term leases and low value leases 17.6 2.4 Variable lease payments 22.4 0.1 Lease receivable from nm finance lease The group subleases the facilities that were used by the subsidiary Marked Gruppen AS. The sublease is for the remaining lease period and is therefore a n finance lease. Amounts in NOK million 2022 2021 At 1 January 2020 - Additions 60 Interest income 2 Lease payments received (11) Total lease reveivable at 31 December 2020 51 At 1 January 43 51 Additions (31) 2 Interest income 0 2 Lease payments received (13) (12) Total lease reveivable at 31 December - - Whereof: Current lease receivable - 12 Non-current lease receivable - 32 KOMPLETT ASA ANNUAL REPORT 2022 151 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 20 OTHER CURRENT LIABILITIES AND LONG-TERM DEBT other current liabilities Amounts in NOK million 2022 2021 Provision for service and guarantee obligations 30 17 Accrued employee benet expenses benefit expenses 89 62 Provision from contract with customer (cf. note 6) 86 46 Other short term liabilities 132 86 Total other current liabilities 337 212 Long term debt Amounts in NOK million 2022 2021 Long-term loans 400 400 Lease liabilities 391 230 Total long term debt 791 630 NOTE 21 PROVISION FOR SERVICE AND GUARANTEE OBLIGATIONS Amounts in NOK million 2022 2021 At 1 January 17 15 Additions from acquisition of companies 15 - Utilised during the year (29) (3) Additions services and guarantee obligations for the year 27 5 At 31 December 30 17 Provisions for service and warranty obligations are made on an ongoing basis based on obligations from sales. The provision is based on estimated costs for service and warranty repairs and an expectation of returns of products sold based on historical data. NOTE 22 NOTES SUPPORTING THE CASH FLOWS Transactions without cash sh flow effects from nm financing activities are presented in the reconciliation of the movement in nn financial liabilities in the subsequent tables. 2022 Amounts in NOK million Non-current loans and borrowings Current loans and borrowings Other non-current nancifinancial liabilities Total At 1 January 2022 (400) (207) (49) (656) Cash owsCash flows - 24 - 24 Non-cash ows:sh flows: - Additions from acquisition of companies - (442) - (442) - Miscellaneous provisions - - (8) (8) - Fair value adjustments of issued put liability - - 12 12 At 31 December 2022 (400) (625) (46) (1 071) KOMPLETT ASA ANNUAL REPORT 2022 152 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2021 Amounts in NOK million Non-current loans and borrowings Current loans and borrowings Other non-current nancifinancial liabilities Total At 1 January 2021 - (48) - (48) Cash owsCash flows (400) (160) - (560) Non-cash ows:sh flows: - Fair value adjustments of issued put liability - - (49) (49) At 31 December 2021 (400) (207) (49) (656) NOTE 23 PLEDGES AND GUARANTEES Amounts in NOK million ClassicClassification Total facility Covenants (C) /Pledge (P) Utilised 31.12.2022 Utilised 31.12.2021 Type Revolving credit facility Long-term loans NOK 500 million C - leverage ratio < 3.00 400 400 Overdraft facility Bank overdraft NOK 500 million C - acc. receivable/ Inventory > 500 - 162 Credit facility Bank overdraft SEK 100 million P - sales agreements eligible of e of financing > 0 49 45 Revolving Credit facility Short-term loans SEK 650 million C - equity ratio < 0.25 leverage ratio < 3.25 P - business mortage SEK 450 million and Inventories NOK 100 million 76 - Bridge loan Short-term loans NOK 500 milion 500 - Total 1 025 607 On 31 May 2021, Komplett ASA entered into a NOK 500 million unsecured revolving credit facility agreement with Skandinaviska Enskilda Banken AB (publ), with a three years' duration and 1 + 1 year renewal option. At 31 December 2022, NOK 400 million were utilised. The group has a Cash pool with a multi-currency overdraft limit of NOK 500 million, at 31 December 2022. This has not been utilised at 31 December 2022. Komplett Services AS is the principal in the cash pool arrangement. In addition, there is a credit facility secured by collateral in Webhallen's Swedish receivables from deferred payment arrangements. The agreement is limited up to SEK 100 million, at 31 December 2022, SEK 52 million were utilised. NetOnNet AB has a revolving credit facility of SEK 650 million, as at 31 December 2022, SEK 80 million were utilised. The bridge loan is linked to the aquisition of the shares in NetOnNet AB and was initially of NOK 1 500 million, as at 31 December 2022 the bridge loan was NOK 500 million. Covenants are measured and reported quarterly. The group was in compliance with ith financial covenants in 2022. In December 2022, the company has secured a new revolving credit facility in the amount of NOK 1 300 million and an overdraft facility in the amount of NOK 400 million (increased to NOK 500 million in Q4 each year). These will be effect in Q1 2023 and replace all the beforementioned facilities except the bank overdraft of SEK 100 million which will continueas before. In 2022, the company entered into a factoring agreement with Resurs Bank and at 31 December 2022, there is a plegde in trade receivables in Komplett Services AS and Komplett Distribusjon AS of NOK 900 million respectively. KOMPLETT ASA ANNUAL REPORT 2022 153 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Financial guarantees Amounts in NOK million 2022 2021 Guarantees related to leases 24 6 The tax collector 12 12 Total 36 18 Total mortgage-backed liabilities and nancial financial guarantees 161 64 NOTE 24 RELATED PARTY TRANSACTIONS In addition to subsidiaries and associated companies, the group’s related parties include its majority shareholders, all members of the board of directors, and key management, as well as companies in which any of these parties have either controlling interests, board appointments or are senior staff. All transactions have been entered into in accordance with the arms' length principle, meaning that prices and other main terms and conditions are deemed to be commercial. All signiificant transactions with related parties that are not eliminated in the group accounts are presented below: Parties Amounts in NOK million 2022 2021 Kullerød Eiendom AS Eiendom AS¹ Lease of oce andffice and warehouse 26 25 F&H Asia Limited¹ Purchase of products 66 108 Resurs & Solid² Sales of products 7 - Resurs & Solid² Sale of services and prot sfit sharing 103 - SIBA Fastigheter ABB² Lease of oce andffice and warehouse 13 - Total 215 133 1) Related entities owned by the company's ultimate parent company in the greater Canica group of companies. 2) Related entities owned by the company's ultimate parent company in the greater Siba group of companies. KOMPLETT ASA ANNUAL REPORT 2022 154 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 25 CONSOLIDATED COMPANIES The following companies are included in the consolidated ted financial statement for 2022 Parent company Komplett ASA Subsidiaries Country of incorporation Proportion of ownership Komplett Services AS Norway 100.0% Komplett Services Sweden AB Sweden 100.0% Komplett Distribusjon AS Norway 100.0% Komplett Distribution Sweden AB Sweden 100.0% NetOnNet AB Sweden 100.0% Webhallen Sverige AB Sweden 100.0% Ironstone Holding AS Norway 72.15% Ironstone AS 1) Norway Ironstone AB 1) Sweden Subsidiaries without activity Marked Gruppen AS Norway 100.0% 1) 100 per cent owned by Ironstone Holding AS. NOTE 26 BUSINESS COMBINATIONS AND DISCONTINUED OPERATIONS Business combinations in 2022 On 9 February 2022, the group announced that it had entered into an agreement with SIBA Invest for the combination of Komplett Group and NetOnNet Group through an acquisition of all issued and outstanding shares in NetOnNet by the company. The transaction was structured as an acquisition, where SIBA Invest received a consideration that comprised the combination of (i) 35242424 new s35 242 424 new shares and (ii) NOK 15d (ii) NOK 1 500 million in cash, with an addition of 4 per cent interest calculated from 30 September 2021 to 4 April 2022. The combination of NetOnNet and Komplett was completed 4 April 2022, at which date SIBA Invest subscribed for the listing shares. NetOnNet has been consolidated into Komplett's ns financial statements as of 1 April 2022. The transaction supports Komplett’s strategic ambitions and is expected to allow for signicant economies ofsignificant economies of scale and enable cost synergies, mainly related to sourcing, of at least NOK 200 million on an annual basis with expected full effect within 24 months of the completion of the transaction. The share price is for pro forma purposes set at NOK 48.80, which was the share price on the Oslo Stock Exchange on 4 April 2022. NetOnNet Group was founded in 1999, and believes it is a leading online--first electronics platform that offers both well-known third party brands and private label products. Sales are generally generated online, as well as through complementary service centres in Sweden and Norway. NetOnNet Group is known for low prices and a passion for making electronics accessible in the most convenient way possible. The customer loyalty club, "Klubbhyllan", has over one million members and represents a majority of NetOnNet Group's revenue. NetOnNet Group is headquartered in Viared, outside Borås, Sweden. Based on the purchase price allocation the fair value of identiifiable assets acquired and liabilities assumed at the acquisition date are as follows: KOMPLETT ASA ANNUAL REPORT 2022 155 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Identiable assetIdentifiable assets acquired and liabilities assumed Amounts in NOK million Fair value Brand name 1 062 Customer relations 319 Fixed assets 112 Other assets 1 536 Total assets 3 030 Deferred tax liabilities 285 Long-term debt 13 Short-term debt 1 172 Total liabilities 1 470 Net identiable assetsifiable assets 1 560 Goodwill 1 688 Acquisition cost 3 248 Hereby by cash settlement 1 529 Hereby by future obligations 1 720 Total goodwill recognised from the acquisition amount to NOK 1 688 million. Goodwill includes the value of expected synergies from the acquisition and the competence and intellectual property from employees. Of the identied ified goodwill of NOK 1 688 million, NOK 1 313 million has been allocated to CGU NetOnNet, NOK 258 million to CGU Webhallen Sverige, NOK 46 million to CGU Komplett B2C and NOK 70 million to CGU Komplett B2B. Total acquisition costs amounted to NOK 39 million and are classiified under other operating expenses. In the period between the acquisition date and 31 December 2022, NetOnNet contributed with NOK 4 784 million to the group's total revenue and a prorofit of NOK 42.8 million to the group's operating result (EBIT). If the acquisition had occurred at the beginning of 2022, revenues for 2022 and profit before taxes for 2022 for the group would have been NOK 6 252 million and NOK 31 million respectively. Changes in business combinations prior periods During 2022, the purchase obligation identified in the acquisition of Ironstone has been revalued. On 31 December 2022 the obligation is NOK 37 million and the revaluation effect of NOK 4 million has been recognised as Other operating expenses in the statement of comprehensive income. Business combinations in 2021 On 26 August 2021, Komplett ASA entered into an agreement to acquire 65 per cent of the shares in Ironstone Holding AS, a leading supplier of cloud-based IT solutions and services for a cash settlement of NOK 62 million. Komplett will acquire 54.3 per cent of the shares from the current shareholders, and as part of the transaction, Komplett will inject NOK 35 million in new equity, giving Komplett a total ownership of 65.1 per cent. The capital injection will be divided into two equally sized tranches, of which the he first will be paid immediately after closing and the second will be paid in 2022. At 31 December 2021, Komplett has a total ownership of 60.42 per cent. Komplett ASA has entered into a sales and purchase option agreement with the minority interest in Ironstone AS for the remaining 35 per cent of the shares. The purchase will thus be accounted for as an acquisition of 100 per cent of the shares in Ironstone AS. An obligation of NOK 52 million which reeflects the fair value of the remaining obligation was recognised at the acquisition date. Subsequent changes in the purchase obligation will be recognised in the statement of proofit or loss. The transaction costs related to the acquisition were approximately NOK 5 million, and have been recognised as other operating expenses. This acquisition meets the growing demand from corporate customers for basic IT services to complement traditional hardware purchases. The pure cloud technology and IT service offered by Ironstone makes a strategically good d fit with Komplett's wide-ranging customer base. Ironstone leverages the Microsoft Cloud technology platform to provide IT services to both large corporations and small and medium-sized enterprises. The core offering comprises cutting edge innovative managed services, built on top of Microsoft technologies such as Microsoft Azure, Microsoft 365 and security, as well as consulting and migration. Its experienced team of ~20 employees generated revenues of NOK ~68 million in 2020 and a positive EBITDA contribution. Since its foundation in 2016, they have grown its customer base to count ~100 and receive excellent customer satisfaction scores. Based on the purchase price allocation, the fair value of identiifiable assets acquired and liabilities assumed at the acquisition date are as follows: Identiable assetIdentifiable assets acquired and liabilities assumed Amounts in NOK million Fair value Brand name 5 Customer relations 14 Fixed assets 0 Other assets 13 Total assets 32 Deferred tax liabilities 4 Long-term debt 4 Short-term debt 14 Total liabilities 23 Net identiable assetsifiable assets 9 Goodwill 78 Prepaid payroll element on option 26 Acquisition cost 114 Hereby by cash settlement 62 Hereby by future obligations 52 KOMPLETT ASA ANNUAL REPORT 2022 156 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Total goodwill recognised from the acquisition amounts to NOK 78 million. Goodwill includes the value of expected synergies from the acquisition and the competence and intellectual property from employees. The prepaid payroll element of the option part is recognised as per the sales and purchase option agreement, according to which the purchase price for the remaining shares held by employees involves a lock-up period of 42 months. The prepaid payroll element will be recognised as employee benets enefits expenses over the lock-up period. No change in the purchase obligation was identiefied at 31D31 December 2022. In the period between the acquisition date and 31 December 2021, Ironstone contributed with NOK 27 million to the group's total revenue and a loss before taxes of NOK 2 million to the group's proofit before tax. If the acquisition had occurred at the beginning of 2021, revenues for 2021 and loss before taxes for 2021 for the group would have been NOK 79 million and NOK 3 million respectively. Discontinued operations 2022 Proofit from discontiuned operations of NOK 10 million net of tax is related to the repayment and reversal of provision of a supplier guarantee from the bankruptcy estate of the former subsidiary Comtech GmbH and JES Computer GmbH both in the former Comtech Group back to 2019. NOTE 27 EVENTS AFTER THE REPORTING DATE On 6 January 2023, the company launched a subsequent offering of up to 3 390 000 new shares at a subscription price of NOK 14.75. The company received subscriptions for a total of 43 582 shares. Following the issuance of these shares, the company’s share capital is NOK 70 136 464.40, divided into 175 341 161 shares, each with a nominal value of NOK 0.40. In December 2022, the company secured a revolving credit facility of NOK 1 300 million and an overdraft facility of NOK 400 million (increased to NOK 500 million in Q4). The new facilities include covenants for a minimum equity ratio of 30 per cent and a ratio of net debt to EBITDA. The net debt to EBITDA covenants are set at 4.0x and 3.75x for Q1 and Q2 of 2023 (adjusted for certain exceptional items) and will reduce to 3.0x thereafter (3.5x in Q3). The new facilities will become effective in Q1 2023. Jaan Ivar Semlitsch was appointed new chief executive oofficer (CEO) of Komplett ASA effective from 10 February 2023. Mr. Semlitsch takes over the role from Lars Olav Olaussen, who has been the CEO of Komplett since 2018. Thomas Røkke has been appointed chief nef financial ocl officer (CFO) of Komplett ASA, effective from 1 March 2023. KOMPLETT ASA ANNUAL REPORT 2022 157 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | STATEMENT OF PROFIT AND LOSS – KOMPLETT ASA FOR THE YEAR ENDED 31 DECEMBER Amounts in NOK million Note 2022 2021 Operating revenues Revenues from sale of goods - - Total operating income - - Operating expenses Employee benet expenses 9 (5) (3) Other operating expenses 9 (23) (16) Total operating expenses (28) (19) OPERATING PROFIT (28) (19) Finance income and expenses Income from investments in subsidiaries 2 1 Finance income 10 111 242 Finance expenses 10 (65) (5) Net nance 48 238 PROFIT BEFORE TAX 19 219 Tax expense 7 47 (51) PROFIT FOR THE YEAR 67 168 Attributable to: Ordinary dividends - 210 Other equity 6 67 (41) TOTAL 67 168 KOMPLETT ASA ANNUAL REPORT 2022 158 FINANCIAL STATEMENTS – KOMPLETT ASA | STATEMENT OF FINANCIAL POSITION – KOMPLETT ASA AT 31 DECEMBER (ASSETS) Amounts in NOK million Note 31 December 2022 31 December 2021 NON-CURRENT ASSETS Intangible assets Deferred tax asset 7 2 2 Total intangible assets 2 2 Non-current nancial assets Investments in subsidiaries 2, 3 4 412 1 079 Investments in associates 3 5 5 Total other non-current assets 4 417 1 083 TOTAL NON-CURRENT ASSETS 4 418 1 085 CURRENT ASSETS Current receivables Current receivables from group companies 5 106 242 Other current receivables 1 2 Total current receivables 107 244 Cash and cash equivalents Cash and cash equivalents 4 - - Total cash and cash equivalents - - TOTAL CURRENT ASSETS 107 244 TOTAL ASSETS 4 525 1 329 KOMPLETT ASA ANNUAL REPORT 2022 159 FINANCIAL STATEMENTS – KOMPLETT ASA | STATEMENT OF FINANCIAL POSITION – KOMPLETT ASA AT 31 DECEMBER (EQUITY AND LIABILITIES) Amounts in NOK million Note 31 December 2022 31 December 2021 EQUITY Paid in equity Share capital 70 29 Share premium 3 741 1 075 Other paid in equity 32 30 Total paid in equity 6 3 843 1 134 Retained earnings Other equity (301) (577) Total retained earnings 6 (301) (577) TOTAL EQUITY 6 3 542 558 LIABILITIES Non-current provisions Provisions 2 37 49 Total non-current provision 37 49 Non-current liabilities Long-term loans 8 400 400 Total non-current liabilities 400 400 Current liabilities Short-term loans 8 500 - Current payables to group companies 5 24 58 Trade payables 5 0 Income tax payable 7 - 47 Provision for group contribution 5 - 210 Other current liabilities 5 17 8 Total current liabilities 545 322 TOTAL LIABILITIES 983 771 TOTAL EQUITY AND LIABILITIES 4 525 1 329 Sandefjord, 22 March 2023 Board of directors, Komplett ASA Jo Olav Lunder Jennifer Geun Koss Lars Bjørn Thoresen Fabian Bengtsson Chair Director Director Director Sarah Willand Anders Odden Nora Elin Eldås Jaan Ivar Semlitsch Director Worker director Worker director CEO KOMPLETT ASA ANNUAL REPORT 2022 160 FINANCIAL STATEMENTS – KOMPLETT ASA | STATEMENT OF CASH FLOWS – KOMPLETT ASA FOR THE YEAR ENDED 31 DECEMBER Amounts in NOK million Note 2022 2021 Cash ows from operating activities Prot before tax 19 219 Change in fair value of nanial liabilities (12) - Group contribution received (84) (241) Changes in trade payables 5 (0) Other changes in accruals 11 (7) Net cash ows from operating activities (61) (29) Investing activities Investments in subsidiaries 2, 3 (1 587) (82) Net cash used in investing activities (1 587) (82) Financing activities Proceeds from loans and borrowings 8 500 400 Changes in bank overdrafts (80) 112 Group contributions received 241 - Issue of share capital 987 - Dividend paid to equity holders of the parent - (400) Net cash (used in)/from nancing activities 1 649 112 Net increase in cash and cash equivalents - - Cash and cash equivalents at beginning of year - - Cash and cash equivalents at end of year - - KOMPLETT ASA ANNUAL REPORT 2022 161 FINANCIAL STATEMENTS – KOMPLETT ASA | NOTES TO THE FINANCIAL STATEMENTS – KOMPLETT ASA NOTE 01 ACCOUNTING PRINCIPLES The nancial statements have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting principles in Norway. The following describes the main accounting policies used in the preparation of the nancial statements of the parent company. These policies are applied in the same way in all periods presented, unless otherwise stated in the description. Subsidiaries and investment in associates Subsidiaries and investments in associates are valued at cost in the company accounts. The investment is valued as cost of the shares in the subsidiary, less any impairment losses. An impairment loss is recognised if the impairment is not considered temporary, in accordance with generally accepted accounting principles. Impairment losses are reversed if the reason for the impairment loss disappears in a lather period. Dividends, group contributions and other distributions from subsidiaries are recognised in the same year as they are recognised in the nancial statement of the provider. If dividends / group contribution exceed withheld prots after the acquisition date, the excess amount represents repayment of invested capital, and the distribution will be deducted from the recorded value of the acquisition in the balance sheet for the parent company. Distributions The proposed dividend/group contribution for the nancial year are recognised as current liabilities. Balance sheet classication Current assets and short term liabilities consist of receivables and payables due within one year, and items related to the inventory cycle. Other balance sheet items are classied as xed assets / long-term liabilities. Current assets are valued at the lower of cost and fair value. Short-term liabilities are recognised at nominal value. Fixed assets are valued at cost, less depreciation and impairment losses. Long-term liabilities are recognised at nominal value. Accounts receivable and other receivables Accounts receivable and other current receivables are recorded in the balance sheet at nominal value less provisions for doubtful accounts. Provisions for doubtful accounts are based on an individual assessment of the different receivables. For the remaining receivables, a general provision is estimated based on expected loss. Liabilities Short-term and long-term liabilities are recognised in the balance sheet at the nominal amount at the time of establishment. Foreign currency translation Transactions in foreign currency are translated at the rate applicable on the transaction date. Monetary items in a foreign currency are translated into NOK using the exchange rate applicable on the balance sheet date. Non- monetary items that are measured at their historical price expressed in a foreign currency are translated into NOK using the exchange rate applicable on the transaction date. Non-monetary items that are measured at their fair value expressed in a foreign currency are translated at the exchange rate applicable on the balance sheet date. Changes to exchange rates are recognised in the income statement as they occur during the accounting period. Income tax The tax expense consists of the tax payable and changes to deferred tax. Period tax constitutes the expected tax payable on this year's taxable result at the current tax rates on the balance sheet date and any corrections of tax payable for previous years. Deferred tax / tax assets are calculated on all differences between the book value and tax value of assets and liabilities. Deferred tax is calculated as 22 percent of temporary differences and the tax effect of tax losses carried forward. Deferred tax assets are recorded in the balance sheet when it is more likely than not that the tax assets will be utilised. Taxes payable and deferred taxes are recognised directly in equity to the extent that they relate to equity transactions. Cash ow statement The cash ow statement is presented using the indirect method. Cash and cash equivalents includes cash, bank deposits and other short-term, highly liquid investments with maturities of three months or less. At year-end, cash and cash equivalents consist of cash and bank deposits. KOMPLETT ASA ANNUAL REPORT 2022 162 NOTES TO THE FINANCIAL STATEMENTS - KOMPLETT ASA NOTE 02 CORPORATE CHANGES On 4 April 2022, Komplett ASA acquired 100 per cent of the shares in NetOnNet AB, a leading online rst electronics retainer. On 26 August 2021, Komplett ASA acquired 60.4 per cent of the shares in Ironstone Holding AS, a leading supplier of cloud-based IT solutions and services. See note 26 to the consolidated nancial statement for additional information. NOTE 03 INVESTMENTS IN SUBSIDIARIES AND ASSOCIATED COMPANIES Amounts in NOK Share capital Currency Number of shares Face value Ownership= voting rights Carrying amount Subsidiary (in NOK million) Komplett Services AS 900 000 NOK 900 1 000 100.0% 503 Komplett Services Sweden AB 100 000 SEK 1 000 100 100.0% 137 Komplett Distribusjon AS 10 000 000 NOK 100 100 000 100.0% 110 Komplett Distribution Sweden AB 300 000 SEK 3 000 100 100.0% 23 NetOnNet AB 604 068 SEK 6 040 680 0.10 100.0% 3 287 Webhallen Sverige AB 210 000 SEK 210 1 000 100.0% 200 Ironstone Holding AS 410 400 NOK 3 623 113 72.15% 152 Marked Gruppen AS 1 000 000 NOK 1 000 000 1 100.0% - Total 4 412 Amounts in NOK Share capital Currency Number of shares Face value Ownership= Voting rights Carrying amount Associated company (in NOK million) Fabres Sp. z o.o. 950 000 PLN 19 000 50 40.0% 5 Total 5 Information about the subsidiaries' equity and prot and loss in accordance with the latest nancial statements: Amounts in NOK million Business oce Equity Prot or loss before tax Company Komplett Services AS Sandefjord 320 77 Komplett Distribusjon AS Sandefjord 193 45 Komplett Services Sweden AB Solna in Sweden 38 2 Komplett Distribution Sweden AB Göteborg in Sweden 14 0 NetOnNet AB Borås in Sweden 490 32 Webhallen Sverige AB Solna in Sweden 39 (79) Ironstone Holding AS Oslo 21 (6) Marked Gruppen AS Sandefjord (225) (0) KOMPLETT ASA ANNUAL REPORT 2022 163 NOTES TO THE FINANCIAL STATEMENTS - KOMPLETT ASA NOTE 04 CASH AND CASH EQUIVALENTS The company has no restricted bank deposits at 31 December 2022 (or at 31 December 2021). NOTE 05 GROUP BALANCES (RECEIVABLES AND PAYABLES) Receivables Amounts in NOK million 2022 2021 Group contribution 84 241 Current receivables from group companies 22 - Total 106 241 Liabilities Amounts in NOK million 2022 2021 Current payables to group companies 24 58 Other current liabilities - 2 Total 24 60 NOTE 06 EQUITY Receivables Amounts in NOK million Share capital Share premium Other equity Total Equity at 31 December 2021 29 1 075 (546) 558 Prot for the year - - 67 67 Long-term incentive programme - - 2 2 Issue of share capital 41 2 679 - 2 720 Transaction costs - (13) - (13) Reversal of dividends - - 210 210 Equity at 31 December 2022 70 3 741 (269) 3 542 KOMPLETT ASA ANNUAL REPORT 2022 164 NOTES TO THE FINANCIAL STATEMENTS - KOMPLETT ASA NOTE 07 INCOME TAX Basis for current income tax Amounts in NOK million 2022 2021 Prot before tax 19 219 Non-deductible income and expenses (15) (1) Changes in temporary differences (5) (3) Use of tax loss carried forward (215) - Basis for current income tax (215) 215 Income tax expense Current income tax (22%) (47) 47 Changes in deferred tax - 3 Income tax expense (47) 51 Temporary differences and tax positions Amounts in NOK million 2022 2021 Provision - (5) Interest deductions carried forward (8) (8) Total (8) (13) Differences not included in the basis for deferred tax - 5 Basis for deferred tax (8) (8) Deferred tax asset (2) (2) Reconciliation of effective tax rate Amounts in NOK million 2022 2021 Prot before tax 19 219 Income tax based on applicable tax rate (22%) 4 48 Income tax expense (47) 51 Deviation 51 (2) Reconciliation Non-deductible expenses 3 0 Tax loss not included in deferred tax asset 1 44 No use of tax loss carried forward 47 (47) Total 51 (2) KOMPLETT ASA ANNUAL REPORT 2022 165 NOTES TO THE FINANCIAL STATEMENTS - KOMPLETT ASA NOTE 08 PLEDGES AND GUARANTEES Amounts in NOK million Classication Total facility Covenants (C) / pledge (P) Utilised 31.12.2022 Utilised 31.12.2021 Type Revolving credit facility Long-term loans NOK 500 million C - Leverage Ratio < 3.00 400 400 Bridge loan Short-term loans NOK 500 million 500 - Total 900 400 On 31 May 2021, Komplett ASA entered into a NOK 500 million unsecured revolving credit facility agreement with Skandinaviska Enskilda Banken AB (publ), with a three years' duration and 1 + 1 year renewal option. At 31 December 2022, NOK 400 were utilised. Covenants are measured and reported quarterly. The group was in compliance with nancial covenants in 2022. Financial guarantees Amounts in NOK million 2022 2021 The tax collector 12 12 Warranty for account payables (parent company guarantees) 396 105 Total 408 117 Komplett ASA guarantees for an additional amount of NOK 1339 million related to loans in subsidiaries. NOTE 09 EMPLOYEE BENEFIT EXPENSES Employee benet expenses Amounts in NOK million 2022 2021 Compensations to board members 1.78 1.48 Social security expenses 0.25 0.21 Total 2.03 1.69 There are no employees in the company. Members of the group management are employed by either Komplett Services AS, NetOnNet AB or Webhallen AB. For additional information see note 7 to the consolidated nancial statement. Audit fees Audit fees to the auditors in the group entities is as follows (excluding VAT) Amounts in NOK million 2022 2021 Statutory audit 1.87 0.39 Other assurance services 0.03 0.12 Other non-assurance services 0.22 1.36 Total 2.13 1.87 KOMPLETT ASA ANNUAL REPORT 2022 166 NOTES TO THE FINANCIAL STATEMENTS - KOMPLETT ASA NOTE 10 ITEMS THAT ARE AGGREGATED IN THE FINANCIAL STATEMENT Finance income Amounts in NOK million 2022 2021 Interest received from group companies 1.6 - Group contribution received 84.3 241.4 Changes in nancial liabilities 12.0 - Income related to guarantees 12.4 - Other nancial income 0.7 0.4 Total 111.0 241.8 Finance expenses Amounts in NOK million 2022 2021 Interest paid to group companies - 0.1 Other interest expenses 64.9 5.0 Other nancial expenses - (0.2) Total 64.9 4.8 NOTE 11 FINANCIAL MARKET RISK Overview Komplett ASA is a holding company that has investments in subsidiaries. The company expects that future revenues will be dividends from investments in subsidiaries and associated companies. Currency risk The company is exposed to currency risk from investments and loans to subsidiaries. For additional information, see note 4 to the consolidated nancial statement. Interest rate risk Interest rate risk occurs in the short and medium term because of the company's debt having oating interest rates. The loan portfolio is linked to SEB base rate and uctuates in relation to uctuations in this. KOMPLETT ASA ANNUAL REPORT 2022 167 NOTES TO THE FINANCIAL STATEMENTS - KOMPLETT ASA ALTERNATIVE PERFORMANCE MEASURES (APM) The APMs used by Komplett Group are set out below (presented in alphabetical order): EBIT adjusted: Derived from the nancial statements as operating result (EBIT) excluding one-off costs. The group has presented this item because it considers it to be a useful measure to show the management's view on the eciency in the prot generation of the group's operations before one-off items. Reconciliation FY 2022 FY 2021 Total operating revenue 14 618 11 043 EBIT 6 369 + One-off cost 80 19 = EBIT adjusted 87 388 EBIT margin adjusted 0.6% 3.5% EBIT margin: Operating result (EBIT) as a percentage of total operating revenue. The group has presented this item because it considers it to be a useful measure to show the management's view on the eciency in the prot generation of the group's operations as a percentage of total operating revenue. Reconciliation FY 2022 FY 2021 Total operating revenue 14 618 11 043 EBIT 6 369 EBIT margin 0.0% 3.3% EBIT margin adjusted: EBIT adjusted as a percentage of total operating revenue. The group has presented this item because it considers it to be a useful measure to show the management's view on the eciency in the prot generation of the group's operations before one-off items as a percentage of total operating revenue. Reconciliation - see above under EBIT adjusted. EBITDA excl. impact of IFRS 16: Derived from nancial statements as the sum of operating result (EBIT) plus the sum of depreciation and amortisation for the segments B2C, B2B, Distribution and Other. The group has presented this item because it considers it to be a useful measure to show the management's view on the overall picture of operational prot and cash ow generation before depreciation and amortisation in the group's operations, excluding any impact of IFRS 16. Reconciliation FY 2022 FY 2021 EBIT 6 369 - EBIT - IFRS 16 (12) (9) + Dep B2C, B2B, Distribution, Other 115 64 = EBITDA excl IFRS 16 109 424 Gross margin: Gross prot (as dened below) as a percentage of total operating revenue. The group has presented this item because it considers it to be a useful measure to show the management's view on the eciency of gross prot generation of the group's operations as a percentage of total operating revenue. Reconciliation - see below under gross prot. Gross prot: Total operating revenue less cost of goods sold. The group has presented this item because it considers it to be a useful measure to show the management's view on the overall picture of prot generation before operating costs in the group's operations. Reconciliation FY 2022 FY 2021 Total operating revenue 14 618 11 043 - Cost of goods sold (12 824) (9 581) = Gross prot 1 794 1 462 Gross margin 12.3% 13.2% Net interest-bearing debt: Interest-bearing liabilities less cash and cash equivalents. The group has presented this item because the management considers it to be a useful indicator of the group's indebtedness, nancial exibility and capital structure. The net interest-bearing debt incl. IFRS 16 is a useful measure as indebtedness, included the lease liabilities from IFRS 16, is relevant for the covenants of the groups credit facilities. Reconciliation FY 2022 FY 2021 Long-term loans 400 400 + Bank overdraft 625 207 - Cash/cash equivalents (149) (41) = Net interest bearing debt 876 566 + IFRS 16 558 310 = Net interest bearing debt including IFRS 16 1 434 876 KOMPLETT ASA ANNUAL REPORT 2022 168 NOTES TO THE FINANCIAL STATEMENTS - KOMPLETT ASA Net working capital: Working capital assets, comprising inventories plus total current receivables less trade receivables from deferred payment arrangements less current lease receivables, less working capital liabilities, comprising total current liabilities less current lease liabilities less bank overdraft. The management considers it to be a useful indicator of the group's capital eciency in its day-to-day operational activities. Reconciliation FY 2022 FY 2021 Inventories 1 928 1 305 + Total current receivables 968 1 152 - Deferred payment (91) (130) - Current lease receivables - (12) - Total current liabilities (2 953) (1 984) + Current lease liabilities 167 80 + Bank overdraft 625 207 = Net working capital 644 619 Operating cost percentage (adjusted): Total operating expenses less cost of goods sold and one-off cost as a percentage of total operating revenue. The group has presented this item because the management considers it to be a useful measure of the group's eciency in operating activities. Reconciliation FY 2022 FY 2021 Total operating revenue 14 618 11 043 Total operating expenses 14 612 10 674 - Cost of goods sold (12 824) (9 581) - One-off cost (80) (19) = Total operating expenses (adj.) 1 707 1 074 Operating costs percentage (adj.) 11.7% 9.7% Operating free cash ow: EBITDA excl. impact of IFRS 16 less investment in property, plant and equipment, less change in net working capital less change in trade receivable from deferred payment arrangements. The group has presented this item because the management considers it to be a useful measure of the group's operating activities' cash generation. Reconciliation FY 2022 FY 2021 EBITDA excl IFRS 16 109 424 - Investments (177) (56) +/- Change in net working capital 750 (455) +/- Change in deferred payment 39 22 = Operating free cash ow 721 (65) Total operating expenses (adj.): Total operating expenses less cost of goods sold and one-off cost. The group has presented this item because the management considers it to be a useful measure of the group's eciency in operating activities. Reconciliation - see above under operating cost percentage KOMPLETT ASA ANNUAL REPORT 2022 169 NOTES TO THE FINANCIAL STATEMENTS - KOMPLETT ASA • • • • • Penneo Dokumentnøkkel: 4UTDK-XLD8I-5XX64-1EX8E-VPECT-SQV5O KOMPLETT ASA ANNUAL REPORT 2022 170 FINANCIAL STATEMENTS Penneo Dokumentnøkkel: 4UTDK-XLD8I-5XX64-1EX8E-VPECT-SQV5O KOMPLETT ASA ANNUAL REPORT 2022 171 FINANCIAL STATEMENTS Penneo Dokumentnøkkel: 4UTDK-XLD8I-5XX64-1EX8E-VPECT-SQV5O KOMPLETT ASA ANNUAL REPORT 2022 172 FINANCIAL STATEMENTS • • Penneo Dokumentnøkkel: 4UTDK-XLD8I-5XX64-1EX8E-VPECT-SQV5O KOMPLETT ASA ANNUAL REPORT 2022 173 FINANCIAL STATEMENTS Penneo Dokumentnøkkel: 4UTDK-XLD8I-5XX64-1EX8E-VPECT-SQV5O KOMPLETT ASA ANNUAL REPORT 2022 174 FINANCIAL STATEMENTS KOMPLETT ASA ANNUAL REPORT 2022 175 FINANCIAL STATEMENTS
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