SKAKO

Annual Report (ESEF) • Mar 12, 2025

SKAKO A/S SKAKO A/S CVR: 36440414 Bygmestervej 2 5600 Faaborg Denmark Order backlog (DKKm) 202.6 (+227.0%) Up from 61.9 Revenue (DKKm) 237.4 (-4.3%) Down from 248.2 EBIT before special items (DKKm) 21.2 (-13.9%) Down from 24.6 EBIT margin 8.9% (-1.0pp) Down from 9.9% ROIC 11.7% (-79.8pp) Down from 91.5% (impacted by divestment of Concrete activities) * 2024 Annual report | Annual report 2024 Page 2 CONTENTS Management review 1. Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 1.1 Letter to our shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 1.2 Key events 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 1.3 Financial key figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 1.4 A landmark year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 1.5 Strategy and business model . . . . . . . . . . . . . . . . . . . . . . . . . . 15 1.6 Why invest in SKAKO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 1.7 Financial ambitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 1.8 Financial review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 1.9 Guidance 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 2. Corporate governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 2.1 Company announcements 2024 . . . . . . . . . . . . . . . . . . . . . . . 26 2.2 Corporate social responsibility . . . . . . . . . . . . . . . . . . . . . . . . 27 2.3 Risk management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 2.4 Corporate governance and remuneration report . . . . . . . . . . . . . 35 2.5 Executive management . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 2.6 Board of directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 2.7 Shareholder information . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 3. Financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 3.1 Statement by Management . . . . . . . . . . . . . . . . . . . . . . . . . . 41 3.2 Independent auditor’s report . . . . . . . . . . . . . . . . . . . . . . . . . 42 3.3 Consolidated financial statements . . . . . . . . . . . . . . . . . . . . . 47 3.4 Consolidated notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 3.5 Parent company financial statements . . . . . . . . . . . . . . . . . . . 98 3.6 Parent company notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 Important notice about this document This document contains forward-looking statements. Words such as believe, expect, may, will, plan, strategy, prospect, foresee, estimate, project, anticipate, can, intend, outlook, guidance, target and other words and terms of similar meaning in connection with any discussion of future operation of financial performance identify forward- looking statements. Statements regarding the future are subject to risks and uncertainties that may result in considerable deviations from the outlook set forth. Furthermore, some of these expectations are based on assumptions regarding future events which may prove incorrect. Due to the war in Ukraine, increased geopolitical tension and uncertainty regarding interest rate and inflation, this guidance is subject to a higher-than-normal degree of uncertainty. | Annual report 2024 Page 3 SKAKO 2024 IN BRIEF PLANT ORDERS ( DKK ) 157,540 AFTERSALES ( DKK ) 79,898 Order intake (DKKm) 378.1 Up from 237.6 Order backlog (DKKm) 202.6 Up from 61.9 Revenue (DKKm) 237.4 Down from 248.2 EBIT before special items (DKKm) 21.2 Down from 24.6 EBIT margin before special items 8.9% Down from 9.9% Earnings per share (DKKm) 3.11 Down from 26.34 (impacted by divestment of Concrete activities) Employees 132 Up from 129 ROIC 11.7% Down from 91.5% (impacted by divestment of Concrete activities) Page 3 35% 46% 14% 5% Recycling Minerals Fasteners Others Revenue 2024 DKK 237.4m 34% 66% Revenue split by plant orders and aftersales | Annual report 2024 Page 4 1. HIGHLIGHTS 1.1 LETTER TO OUR SHAREHOLDERS 1.2 KEY EVENTS 2024 1.3 FINANCIAL KEY FIGURES 1.4 A LANDMARK YEAR 1.5 STRATEGY & BUSINESS MODEL 1.6 WHY INVEST IN SKAKO 1.7 FINANCIAL AMBITIONS 1.8 FINANCIAL REVIEW 1.9 GUIDANCE 2025 | Annual report 2023 Page 4 | Annual report 2024 Page 5 2024 overall did not deliver the expected revenue growth and profitability. This was below our original guidance for 2024. However, we expect 2025 to show strong revenue growth of 30% -40% and EBIT to grow between 20% and 40%. Thank you to all our shareholders and customers who believe in SKAKO and to all our dedicated employees around the world who worked hard in 2024 in a difficult European business climate. We look forward to deliver a strong growing business in 2025 and the years to come. 1.1 Letter to our shareholders Solid profitability despite a tough European business climate in 2024 and strong growth ahead! 2024 was characterized by a tough business climate but with a strong focus on building up our order books for future growth. Despite decreasing revenue and a tough business climate in Europe, we delivered a 9% EBIT margin due to our asset light business model. 2024 was the first year for the new SKAKO, focused on the Vibration businesses. The first part of the year involved several activities to separate the two businesses and returning dividends to shareholders, an extraordinary payment of DKK 122m and the ordinary dividend of DKK 15m. The share price has reacted very positively to the focused SKAKO business and the expectations for the future. The share is trading at levels above the average share price before the sale of SKAKO Concrete. 2024 turned out to be a challenging year proving the value of strategically being exposed in different markets and different segments. The fastener segment, which is very exposed in the German market, started the year being hit by the slow demand from the car manufacturing- and the building industries. We expected the market to turn more positive in the second half of 2024, but this did not happen. Especially the fastener business saw an unexpected large decline in the last two months of the year. Minerals The mineral business in Europe is developing slowly due to the higher interest rates in this capital-intensive industry. Despite this we grew revenue in Minerals with 10% since our customers made significant investments in Africa and in Europe many mineral processing plants decided to replace outdated machinery. SKAKO was fortunate to win two large orders with OCP in Morocco. We shall build parts of two new phosphate plants, identical to previous deliveries. The total order value is DKK 150m and the project will be delivered primarily in 2025 and 2026. This order will deliver strong revenue and EBIT growth in the coming 24 months. 1.1 LETTER TO OUR SHAREHOLDERS Jens Wittrup Willumsen Chairman of the Board Lionel Girieud CEO Recycling SKAKO earlier identified the recycling business as a strong supplement to the existing portfolio. The acquisition of DARTEK at the end of 2019 gave access to new technologies for SKAKO. In combination with the experiences from the fastener and the mining segment, SKAKO is today capable of supplying multiple tailormade solutions to the recycling industry. This has proven to be very valuable in the growth efforts on new European markets in 2024, where projects have been delivered to new important reference customers. Recycling was unexpectedly impacted negatively by the hesitant market in the last two months of the year where some orders were pushed in to the new year and therefor ended with a decline in revenue of 3.5%. However, we still expect recycling to show strong growth in the coming years given our strong product portfolio and the strong macro societal trends. | Annual report 2024 Page 6 Our purpose We help our customers use and reuse the planet’s resources in the best possible way Our values We are dedicated as our knowledge and competencies are inherited from more than 60 years of experience and dedicated to your needs We are reliable as we are known for setting the standards of quality and accuracy within our industry We are accessible as we are well represented around the world and always ready to help Our brand promises We develop sustainable, technology-based and visionary solutions We meet customers with a future-oriented mindset and engage our technical know-how, digitization and innovative capacity in companies’ individual needs We provide profitable business We generate continuous and visible value for our customers and our investors We are big enough to cope - and small enough to care We match customers' needs and deliver scalable solutions We commit ourselves in close partnerships We put our customers’ needs first and bring our service, customer-adapted solutions and engineering expertise. | Annual report 2024 Page 7 IFAT, Munich In May, SKAKO participated in one of the biggest recycling exhibitions worldwide. 1.2 KEY EVENTS 2024 Extraordinary dividend to shareholder DKK 122m The first part of the year involved several activities to separate the two businesses and returning dividends to shareholders, an extraordinary payment of DKK 122m Pilot Plant in Denmark The old storage room in Faaborg was completely renovated and became the new test center in our DK-plant, different SKAKO- machines are already in preparation to fill up the Pilot Plant to be able to show the customer all possibilities with SKAKO-solutions Q1 Q2 Q2 | Annual report 2023 Page 7 | Annual report 2024 Page 8 SOLIDS & RECYCLING Dortmund In October 2024, an important exhibition for the solids handling and recycling industry. Biggest order ever to SKAKO for more than DKK 150m SKAKO was fortunate to win two large orders with OCP in Morocco. The total order value is DKK 150m and the project will be delivered primarily in 2025 and 2026. Q3 Q4 Q4 | Annual report 2023 Page 8 1.2 KEY EVENTS 2024 New and bigger Pilot Plant in Spain The new and bigger test center in our plant in Spain was finished and is already in frequent use for the different tests with customer products on all available SKAKO- machines. | Annual report 2024 Page 9 1.3 Financial key figures 1.3 FINANCIAL KEY FIGURES Key figures and financial ratios – DKK DKK Thousands 2024 2023 2022 2021 2020 INCOME STATEMENT Revenue 237,438 248,159 237,535 203,200 167,600 Gross profit 72,885 74,734 68,486 57,000 47,000 Operating profit (EBIT) before special items 21,183 24,599 19,659 14,139 9,576 Special items - (1,934) (1,958) - - Operating profit (EBIT) after special items 21,183 22,662 17,701 14,139 9,576 Net financial items (2,990) (3,330) (2,226) (4,004) (2,458) Profit before tax 18,193 19,332 15,474 10,135 7,118 Profit after tax 13,600 13,774 12,385 8,676 6,300 Profit for the year discontinued activities (2,591) 67,463 12,689 2,183 7,946 Profit for the year 11,009 81,237 25,074 10,859 14,246 BALANCE SHEET Non-current assets 62,833 55,001 88,599 84,216 84,265 Current assets 168,731 287,192 295,458 254,804 237,793 Assets 231,563 342,193 384,057 339,020 322,058 Equity 87,281 215,064 146,167 132,237 127,252 Non-current liabilities 15,647 14,454 26,473 29,122 38,455 Current liabilities 127,272 112,675 211,417 177,661 156,351 Net debt 37,297 (137,478) 20,997 26,987 40,187 Net working capital 79,259 54,684 110,681 105,703 111,295 OTHER KEY FIGURES Investment in intangible assets 210 561 4,153 3,962 7,236 Investment in tangible assets 13,759 10,600 6,174 3,504 5,860 Cash flow from operating activities (CFFO) (24,135) 16,783 35,665 30,276 4,806 Free cash flow (34,810) 12,159 28,850 22,810 (8,293) Average number of employees 132 129 126 125 125 * Free cash flow in 2023 exclusive proceeds from sales of Concrete activities | Annual report 2024 Page 10 1.3 Financial key figures Figures for 2020 and 2021 contains the “old” SKAKO Group including SKAKO Vibration and the discontinued business SKAKO Concrete. For calculation of financial ratios please see note 26. Net working capital is calculated as Inventory, Trade receivables and Contract assets less Contract liabilities and Trade payables. Backlog represents revenue from signed contracts or orders executed but not yet completed or performed in full. Key figures and financial ratios – DKK CONTINUED DKK Thousands 2024 2023 2022 2021 2020 FINANCIAL RATIOS Gross profit margin 30.7% 30.1% 28.8% 25.4% 23.2% Profit margin (EBIT margin) before special items 8.9% 9.9% 8.3% 5.6% 4.5% Liquidity ratio 132.6% 254.9% 126.2% 143.4% 152.1% Equity ratio 37.7% 62.8% 37.5% 39.0% 39.5% Return on equity 7.3% 42.5% 16.3% 10.2% 8.6% ROIC 11.7% 91.5% 16.9% 10,3% 8,3% Financial leverage 42.1% -69.9% 17.8% 20.4% 31.6% Net debt to EBITDA 1.3 -4.7 0.6 1.0 1.8 Net debt to EBITDA after extraordinary dividends 1.3 -0.5 - - - NWC/Revenue 33.4% 22.0% 25.5% 29.1% 33.1% Earnings per share (EPS) 3.51 26.34 5.73 2.8 2.0 Equity value per share 28.32 69.74 27.38 42.9 41.3 Share price 81.2 103.0 62.6 55.2 49.8 Price-book ratio 2.9 1.4 1.3 1.3 1.2 Market cap 255,983 319,960 194,461 171,474 154,700 Order backlog 202,563 61,942 70,700 54,300 58,600 | Annual report 2024 Page 11 1.3 Financial key figures Key figures and financial ratios – EUR EUR Thousands 2024 2023 2022 2021 2020 INCOME STATEMENT Revenue 31,836 33,305 31,866 27,275 22,497 Gross profit 9,773 10,030 9,188 7,651 6,309 Operating profit (EBIT) 2,840 3,301 2,637 1,898 1,285 Special items - (260) (263) - - Operating profit (EBIT) after special items 2,840 3,041 2,375 1,898 1,285 Net financial items (401) (447) (299) (537) (330) Profit before tax 2,439 2,595 2,076 1,360 955 Profit after tax 1,823 1,849 1,662 1,165 846 Profit for the year discontinued activities (347) 9,055 1,702 293 1,066 Profit for the year 1,476 10,903 3,364 1,457 1,911 BALANCE SHEET Non-current assets 8,423 7,380 11,913 11,325 11,327 Current assets 22,618 38,532 39,728 34,264 31,964 Assets 31,041 45,912 51,640 45,589 43,291 Equity 11,700 28,855 19,654 17,782 17,105 Non-current liabilities 2,097 1,939 3,560 3,916 5,169 Current liabilities 17,061 15,118 28,430 23,890 21,017 Net debt 5,000 (18,446) 2,824 3,629 5,402 Net working capital 10,625 7,337 14,884 14,214 14,960 OTHER KEY FIGURES Investment in intangible assets 28 75 558 533 973 Investment in tangible assets 1,845 1,421 828 471 788 Cash flow from operating activities (CFFO) (3,240) 2,250 4,785 4,071 644 Free cash flow * (4,672) 1,630 3,871 3,067 (1,113) Average number of employees 132 129 129 129 129 * Free cash flow exclusive proceeds from sales of Concrete activities | Annual report 2024 Page 12 1.3 Financial key figures Figures for 2020 and 2021 contains the “old” SKAKO Group including SKAKO Vibration and the discontinued business SKAKO Concrete. Net working capital is calculated as Inventory, Trade receivables and Contract assets less Contract liabilities and Trade payables. Backlog represents revenue from signed contracts or orders executed but not yet completed or performed in full. On the translation of key figures and financial ratios from Danish kroner to euro, Danmarks Nationalbank’s rate of exchange at 31 December 2024 of 746.00 has been used for balance sheet items, and the average rate of exchange of 745.82 has been used for income statementand cash flow items. Key figures and financial ratios – EUR CONTINUED EUR Thousands 2024 2023 2022 2021 2020 FINANCIAL RATIOS Gross profit margin 30.7% 30.1% 28.8% 25.4% 23.2% Profit margin (EBIT margin) 8.9% 9.9% 8.3% 5.6% 4.5% Liquidity ratio 132.6% 254.9% 126.2% 143.4% 152.1% Equity ratio 37.7% 62.8% 37.5% 39.0% 39.5% Return on equity 7.3% 42.5% 16.3% 10.2% 8.6% ROIC 11.7% 91.5% 16.9% 10,3% 8,3% Financial leverage 42.1% -69.9% 17.8% 20.4% 31.6% Net debt to EBITDA 1.3 -4.7 0.6 1.0 1.8 Net debt to EBITDA after extraordinary dividends 1.3 -0.5 - - - NWC/Revenue 33.4% 22.0% 25.5% 29.1% 33.1% Earnings per share (EPS) 0.47 3.53 0.77 0.38 0.27 Equity value per share 3.80 9.36 3.67 5.77 5.55 Share price 10.88 13.82 8.39 7.42 6.69 Price-book ratio 3.3 1.4 1.3 1.3 1.2 Market cap 34,314 42,929 26,067 23,058 20,795 Order backlog 27,153 8,311 9,477 7,289 7,866 | Annual report 2024 Page 13 1.4 Strategy & business model Morocco: A Key Market for SKAKO Vibration SKAKO Vibration has been actively operating in the Moroccan market since the early 2000s and has strengthened its presence by establishing a local subsidiary over a decade ago. This long-term commitment underscores the strategic importance of Morocco to SKAKO Vibration’s business and its ambition to expand its footprint in North Africa. Morocco is one of the most economically developed nations on the African continent, boasting an impressive average annual GDP growth rate of 5.1% over the last decade. A major factor contributing to this growth is its vast natural resources, particularly phosphate rock. The country holds an estimated 70% of the world’s phosphate rock reserves, making it a dominant player in the global phosphate industry. These reserves are managed and exploited by the OCP Group (formerly known as "Office Chérifien des Phosphates"), a state-owned enterprise that plays a crucial role in the national economy. Recognizing the importance of modernizing and expanding its operations, OCP launched an ambitious five-year investment plan worth $13 billion in 2023. This substantial investment aims to enhance production capacities, optimize transport logistics, and integrate sustainable practices into the phosphate extraction and processing chain. Challenges in Raw Material Transportation for the Mining Industry One of the most significant challenges faced by mining companies worldwide is the transportation of large quantities of raw materials from extraction sites to processing facilities and export terminals. This challenge is particularly pronounced in Morocco, where phosphate mines are located inland, far from industrial processing centers and export hubs. To address this issue, OCP has implemented an innovative and efficient transportation solution: a phosphate slurry pipeline system. In this process, raw phosphate is mixed with water to form a slurry, which is then transported through a network of pipelines that stretch across Moroccan territory. Upon reaching its destination—often hundreds of kilometers away—the phosphate slurry undergoes a dehydration process to revert it to a solid state, making it ready for further processing and export SKAKO Vibration’s Contribution to Phosphate Processing SKAKO Vibration plays a critical role in the initial stage of this innovative transport system. The company provides specialized equipment designed to facilitate the dilution of phosphate before it is pumped into the pipeline system. SKAKO’s high-performance technology ensures a smooth and efficient process, optimizing the consistency of the phosphate slurry and enhancing the overall effectiveness of the transportation system. 1.4 A LANDMARK YEAR Example of SKAKO scrubbing equipment, currently operating in Morocco Example of SKAKO scrubbing equipment, currently operating in Morocco | Annual report 2024 Page 14 Extensive Experience in Phosphate Scrubbing Thanks to its extensive experience in phosphate processing, SKAKO Vibration has earned the trust of key industry players and secured significant contracts. In 2024, the company received two major orders to supply equipment for two additional scrubbing lines, representing a total contract value exceeding DKK 150 million. Each scrubbing line is composed of two essential pieces of equipment: • A “large washing drum”, which ensures thorough dilution of phosphate into water to create a homogeneous slurry. • A “high-capacity vibrating screen”, which plays a crucial role in separating unwanted stones and impurities from the phosphate mixture. This set of machines is integrated with advanced electronic components that allow precise control over their operation, ensuring maximum efficiency and reliability. The success of these new scrubbing lines will be based on the proven performance of a previous scrubbing line supplied by SKAKO in earlier years, which has demonstrated its effectiveness in phosphate processing. Future Project Timeline and Impact The execution of this large-scale project is planned over the next two years. While initial development and preparation activities took place end of 2024, the most substantial impact on SKAKO Vibration’s operations and revenue is expected to be realized in the following years as the scrubbing lines become fully operational. With its advanced technological solutions, extensive experience, and strong local presence, SKAKO Vibration continues to be a key contributor to Morocco’s phosphate industry. As the demand for high-quality phosphate processing solutions grows, SKAKO remains committed to delivering innovative and efficient systems to support OCP and other mining enterprises in achieving their long-term objectives. A LANDMARK YEAR Raw phosphate & water Phosphate slurry (toward the pipeline) Unwanted stones (waste) | Annual report 2024 Page 15 SKAKO Dartek Recycling – Expert Center SKAKO Vibration France Minerals – Expert Center SKAKO Vibration Denmark Fasteners – Expert Center 1.4 Strategy & business model Business areas SKAKO Vibration develops, designs, and sells equipment for the Recycling, Minerals, and Fasteners industries. Our engineering, assembly, and testing facilities are located in Faaborg (Denmark), Strasbourg (France), and San Sebastian (Spain). Our products are built on deep application expertise and proprietary technology. With a flexible production model, SKAKO Vibration sources components both internally and from external suppliers. Our primary markets are the EU and North Africa, where we have branch offices, while we maintain a presence in the USA, South America, and Asia through partnerships with local companies. We drive our success through a strong portfolio of high-quality products and a dynamic organization with extensive design and application know-how. Strategy As a leading supplier of vibratory equipment, SKAKO Vibration provides cutting- edge solutions centered around vibration technology, which are integral to our customers' industrial processes. In the Fasteners industry, we are the preferred partner in targeted markets, particularly among key players in Europe, Asia, and the US. In the Minerals sector, we have a strong presence, notably in phosphate mining in North Africa and the construction industry in Europe. Our recent focus has been on expanding in the Recycling sector, supported by our comprehensive product range dedicated to this industry. The acquisition of SKAKO Dartek at the end of 2019 has further strengthened our position. Since the end of the COVID-19 pandemic, demand from the recycling industry has surged, driving sustained growth. As waste recycling becomes increasingly crucial, we anticipate an accelerated growth trend in this market over the coming decades. Consequently, we are developing a strategy based on our three core business segments, with Recycling and Minerals as the primary growth drivers. Our objective is to achieve at least 50% growth by the end of 2028 while maintaining an EBIT ratio of around 10%. 1.5 STRATEGY & BUSINESS MODEL | Annual report 2024 Page 16 Our approach is to collaborate with key players in the Fasteners, Minerals, and Recycling industries, providing industrial solutions that address major global transformations. The Minerals Industry: A Sector in Transformation The Minerals industry is undergoing significant change, largely driven by the shift toward green growth. On one hand, a global race for mineral resources is underway, as countries seek to secure essential materials like lithium, nickel, copper, and rare earth elements for the green transition. Recent crises have further highlighted the importance of securing supply chains for raw materials. These trends will drive increased investment in the sector in the coming years. On the other hand, the construction and demolition material recycling sector is rapidly emerging as a key growth area, fueled by private investments and public incentives. Our highly reliable and efficient sorting and washing equipment plays a critical role in industrial processes within this sector. The Fasteners Industry: Impact of Automotive Sector Turbulence The European automotive industry is currently facing economic challenges due to multiple factors: • Reduced vehicle renewal rates due to high prices and an uncertain economic climate. • Slowing electric vehicle sales. • Intensified competition from Chinese manufacturers. These conditions have led to lower investment levels in the Fasteners industry, negatively impacting our sales in 2024. We anticipate stable revenue in this segment for 2025, followed by a rebound once market uncertainties subside. The demand for stronger, lighter, and more advanced fasteners remains high, necessitating future investments that will benefit SKAKO Vibration, given our strong reputation as a leading supplier in this industry. Recycling: The Primary Growth Driver Private sector investments in the Recycling industry has grown by more than 15% p.a. over the past five years, and this trend is expected to continue, especially in Europe, where ambitious circular economy policies are in place. Given that our core sales network is based in Europe, where unified recycling regulations and initiatives exist, we are focusing our resources on expanding our presence in this market. Leveraging the expertise of SKAKO Dartek and the broader group’s knowledge in the Minerals and Fasteners industries, we are continuously developing a specialized product range tailored to the needs of Recycling companies: • Size-based sorting: Our equipment classifies recycled materials by size 1. • Density-based sorting: Our solutions separate materials based on density. 1 • Washing: Our systems effectively clean recycled materials. 2 • Controlled distribution: Our equipment ensures a smooth, uniform, and regulated material flow. 3 By capitalizing on these capabilities, SKAKO Vibration is well-positioned to drive innovation and growth in the Recycling sector while strengthening its leadership in Fasteners and Minerals. 1 Sorting is essential for the Recycling sector and all sorting techniques are used and complement each other in the industrial processes of this segment. 2 Washing is one of the key operations in the recycling of construction & demolition materials and our long experience in the Minerals industry positions the company as one of the European leaders in this field. 3 Most sorting systems (optical or magnetic for example) need to be fed correctly and SKAKO Vibration has developed a remarkable know-how in this field, in particular thanks to the challenges posed by our customers of the Fasteners sector. STRATEGY & BUSINESS MODEL | Annual report 2024 Page 17 1.5 Why invest in SKAKO 1.6 WHY INVEST IN SKAKO + 50 years of knowhow with a successful asset light production model SKAKO runs a focused business based on vibration technology and advanced conveyer solutions. We operate with an asset light model based on substantial outsourcing to trusted partners, build up over years, increasing profitability. At SKAKO we aim to make our customers’ production flow;hassle-free, reliable, and sustainable. We use our know-how to define the industry and develop visionary sustainable and technology-based solutions. Based on this model, we have established a comprehensive installed fleet of SKAKO machinery all over the world and we provide our customers with support, spares and retrofit, whenever needed. Providing continued value to our customers, partners, and shareholders. The SKAKO asset light business model has proven to be sustainable, even under challenging conditions. Despite also being impacted by Covid-19, SKAKO succeeded in remaining profitable during the pandemic, and has since continued to grow, also despite tougher market conditions after the war in Ukraine. Dividend stock with solid capital structure It is our ambition to continuously deliver a strong dividend to our shareholders, while keeping a capital structure target of net debt to EBITDA of up to 2.5. Solid presence in global growing markets The markets in which SKAKO operates, are solid to strong growth markets. The demand for building materials as well as industrial machinery has seen growth for decades, and there are currently no signs of long-term reduction of this growth. • Recycling – This segment’s growth is driven by a global need to reuse our planets resources and are seeing large investments in key European markets. Recycling segment is expected to double by end of 2028. • Minerals/Mining – This segment’s growth is driven by the green transition and is expecting to grow with 5% p.a., but with massive investments, most recently demonstrated by the order SKAKO received of DKK 150m from OCP in Morrocco. • Fasteners – this segment is driven by the automotive and building industry, which in 2024 has seen negative growth particularly due to the German market. However, this segment is still expected to have an average growth of 5% p.a. In all segments, SKAKO has a large installed base of equipment which creates a constant sale of spare parts giving an attractive aftersales-share of 34%. And with a strong potential to expand the business into new market segments, we are convinced that the potential for future profitable growth is strong | Annual report 2023 Page 18 1.7 FINANCIAL AMBITIONS 1.6 Financial ambitions • Our ambition is to grow revenue with 50% over the period 2023 to 2028 with an operating margin (EBIT) of around 10%. • After the decline in 2024 revenue is expected to grow with 30-40% in 2025 driven by the two large orders for OCP in Morocco. • Despite the decline in revenue in 2024 revenue in Recycling is expected to double by end of 2028 with a backend loaded profile given SKAKO’s strong order portfolio and macro societal trends. Financial ambitions for the Vibration activities 0,0% 2,0% 4,0% 6,0% 8,0% 10,0% 12,0% 0 50 100 150 200 250 300 350 400 2023 2024 Guidance 2025 2026 2027 2028 EBIT% mDKK Revenue EBIT margin EBIT margin, ambition * Guidance 2025: Grey area shows the guidance interval 30-40% revenue growth | Annual report 2024 Page 19 1.7 Financial review 1.8 FINANCIAL REVIEW DKK Thousands 2024 2023 Change Plant order revenue 157,540 170,302 -7.5% Aftersales revenue 79,898 77,857 2.6% Total revenue 237,438 248,159 -4.3% Production costs (164,553) (173,425) -5.1% Gross profit 72,885 74,734 -2.5% Gross profit margin 30.7% 30.1% 0.6pp Distribution costs (28,384) (26,010) 9.1% Administrative expenses (23,317) (24,126) -3.4% Operating profit before special items (EBIT) 21,183 24,599 -13.9% Operating p rofit margin before special items (EBIT margin) 8.9% 9.9% -1.0pp Special items - (1,934) NA Operating profit after special items (EBIT) 21,183 22,662 -6.5% Profit for the year before discontinued activities 13,600 13,774 -1.3% Profit for discontinued activities (2,591) 67,463 -103.8% Profit for the period 11,009 81,237 -86.4% Order backlog beginning of period 61,942 72,550 -14.6% Order intake 378,059 237,551 59.1% Revenue (237,438) (248,159) -4.3% Order backlog end of period 202,563 61,942 227.0% Market development The market for Vibration in 2024 was impacted negatively by increasing uncertainty and slow macro-economic growth in Europe. Especially Fasteners was negatively impacted by a decline in activities in the automotive industry in Germany as well as the subdued European construction and building industry. Despite the uncertain European market Minerals showed a strong growth of 10% in 2024 and is expected to accelerate this growth in 2025 due to the two contracts with OCP amounting of DKK 150m. Many resources were committed to bidding for these contracts and preparing for delivery of the projects in 2025 and 2026. Previous years strong growth in Recycling turned into a slight decline in 2024 due to a more uncertain and hesitant market with some orders pushed into 2025 resulting in a large decline in Q4. Despite decreasing revenue and a tough business climate in Europe SKAKO delivered an EBIT of DKK 21.2m and EBIT margin of around 9%. This shows the robustness of SKAKO’s assets light business model. The very strong order inflow in 2024 from the two OCP contracts will ensure strong growth in both revenue and EBIT in 2025 despite the uncertain European marked. | Annual report 2024 Page 20 1.7 Financial review 1.8 FINANCIAL REVIEW Revenue Activity in the European automotive and construction industries developed more negatively than expected in the second half of the fourth quarter, which particularly affected the Fasteners customer segment. As a result, revenue for 2024 decreased by 4.3% driven by a 15% decline in Q4 2024. This was driven by a large decline in Fasteners of 15%, a decline of 4.4% in Recycling and decline in other of 47%. Minerals showed growth of 10% to some extent impacted by the OCP contract but also growth in other African countries due to significant investments from customers. In Europe, many mineral processing plants decided to replace outdated machinery, and our expertise in custom-made equipment was key to securing new orders. The decrease in revenue was driven by a decline in plant sales of 7.5% while the more stable and more profitable aftersales increased by 2.6%. Revenue for 2024 declined with 4.3% which was below our guidance of 8 November 2024 (expected revenue development in the range of -2% to 1%) Order intake and backlog Order intake was DKK 378m, an increase of 59% compared to 2023 driven by the largest order ever of DKK 150m with OCP in Morocco. Order backlog was DKK 203m compared to DKK 62m in 2023 equal to an increase of 227%. Gross profit and margin Gross profit decreased by 2.5% to DKK 73m in 2024, compared to DKK 75m in 2023. The decrease was driven by lower revenue and an increase in gross profit margin of 0.6pp to 30.7% due to a higher share of aftersales with higher margins than plant sales. Capacity costs Distribution costs increased with 9.1% mainly due to investments in the salesforce to enable future growth especially in Recycling. Administrative expenses declined with 3.4% despite salary increases of around 4%. This was due to employees participating in training courses with reimbursement due to low activity level, decrease in employees in administration and decrease in marketing expenses. Operating profit Operating profit before special items decreased by 14% to DKK 21.2m. This was driven by the decrease in revenue of 4.3%, and a decrease in margin of 1.0pp due to the investment in the salesforce to enable future growth. The realized operating profit of DKK 21.2m is equal to the preliminary non-audited numbers communicated on 21 February 2025 but below the latest guidance of DKK 24-28m communicated on 8 November 2024. Net financial items Net financial items amounted to a cost of DKK 3.0m compared to DKK 3.3m in 2023 and consist mainly of interest income, interest expenses along with realized and unrealized foreign exchange losses. Tax The income tax expense for the year amounted to DKK 4.6m (2023: DKK 5.6m), corresponding to an effective tax rate of 25% since the tax rate in France and Spain is higher than in Denmark (2022: 29%). REVENUE FY2024 FY2023 Change Q4 2024 Q4 2023 Change Fasteners 32,326 38,077 -15.1% 8,113 10,516 -22.9% Minerals 109,549 99,187 10.4% 27,769 34,296 -19.0% Recycling 82,804 86,619 -4.4% 21,639 23,814 -9.1% Other 12,759 24,277 -47.4% 2,985 2,271 31.4% Total 237,438 248,159 -4.3% 60,506 70,897 -14.7% | Annual report 2024 Page 21 1.7 Financial review 1.8 FINANCIAL REVIEW Profit for the year for continuing operations Profit for the year before tax decreased by 5.9% to DKK 18.2m while profit for the year decreased by 1.3% to DKK 13.6m. Result of the discontinued operations The finalization of the transaction for the divestment of the Concrete activities amounted to DKK 2.6m and was related to final re-payments and related transaction costs. Result including discontinued operations The result including discontinued operations amounted to DKK 11m compared to DKK 81m in 2023 where DKK 67.5m relates to discontinued activities. Earnings per share SKAKO Group delivered a result before discontinued activities of DKK 13.6 compared to DKK 13.7 in 2023 and earnings per share decreased to DKK 3.5 in 2024 compared to DKK 26.3 in 2023 which was positively impacted by the divestment. Balance sheet As of 31 December 2024, the Group’s assets totalled DKK 232m compared to DKK 342m last year. The decrease in assets is primarily due to the proceeds in 2023 from the divestment of the Concrete activities which had not yet been distributed to shareholders. Non-current assets increased by DKK 8m to DKK 63m, while current assets decreased with DKK 119m to DKK 169m due to the proceeds in 2023 from the divestment of the Concrete activities. Net debt was DKK 37m compared to a positive net debt of DKK 137m in 2023. The large decrease in net debt is mainly due to the proceeds in 2023 from the divestment of the Concrete activities which was distributed to shareholders end of February 2024. Return on invested capital In 2024, return on invested capital amounted to 11.7% compared to 91.5% in 2023 which was impacted by the divestment of the Concrete activities. Net working capital Net working capital increased by DKK 25m compared to the year before. The increase is primarily due to a higher level of inventories to mitigate supply chain challenges and invoicing of the first payments from the OCP projects at the end of Q4 2024 giving higher trade receivables. Cash flow development Cash flow from operating activities amounted to DKK (24)m compared to DKK 96m for 2023 which included proceeds from divestment of the Concrete activities. The negative cash flow in 2024 was driven by the increase in net working capital by DKK 24m. Capital structure Net interest bearing debt / EBITDA was 1.3 compared to negative 4.7 in 2023 which was impacted by the proceeds from the divestment of the Concrete activities since these had not yet been distributed to shareholders at the end of 2023. The gearing level is well below our gearing target of up to 2.5 and shows that SKAKO has financial capacity to pay out dividends in the future and to pursue acquisitions according to our strategy. | Annual report 2024 Page 22 1.8 FINANCIAL REVIEW Equity The Group’s equity was DKK 87m on 31 December 2024 (DKK 215m on 31 December 2022) matching an equity ratio of 37.7% (62.8% on 31 December 2023). The change in equity is mainly due to profit for the year of DKK 11.0m deducted by ordinary and extraordinary dividends in 2024 where more than DKK 137m was distributed to shareholders. Dividends Based on the results in 2024 and capital structure of SKAKO A/S as of 31 December 2024, the Board of Directors recommends a dividend distribution of DKK 2.5 per share (2023: DKK 5 per share) corresponding to 72% of profit for the year before discontinued activities and a total dividend distribution of DKK 7.9m. With a share price of DKK 81.2 as of 31 December 2023, this corresponds to a dividend yield of 3.1%. Ex-dividend date: 25 April 2025 Record date: 28 April 2025 Payment date: 29 April 2025 Interim dividends In February 2024, an extraordinary dividend of DKK 39.3 per share was paid to shareholders following the divestment of the Concrete activities. The Parent company The result before interest and tax in the Parent company amounts to a profit of DKK 10.9m. The profit comes from merger of subsidiaries whereas the costs primarily come from remuneration of the Board of Directors and costs for warrants. Events after the balance sheet date There have been no events that materially affect the assessment of this Annual Report 2024 after the balance sheet date and up to today. | Annual report 2024 Page 23 1.7 Financial review DKK Thousands Q42024 Q42023 Change Plant order revenue 36,617 39,721 -7.8% Aftersales revenue 23,889 31,176 -23.4% Total revenue 60,506 70,897 -14.7% Production costs (38,888) (50,024) -22.3% Gross profit 21,618 20,873 3.6% Gross profit margin 35.7% 29.4% 6.3pp Distribution costs (6,658) (6,813) -2.3% Administrative expenses (7,808) (6,434) 21.4% Operating profit (EBIT) 7,151 7,548 -5.3% Profit margin (EBIT margin) 11.8% 10.6% 1.2pp Profit for the period before discontinued activities 4,157 4,558 -8.8% Profit/( loss) for discontinued activities (1,006) 59,572 -101.7% Profit for the period 3,151 71,903 -95.6% Order backlog beginning of period 212,680 72,107 195.0% Order intake 50,389 60,732 -17.0% Revenue 60,506 70,897 -14.7% Order backlog endof period 202,563 61,942 227.0% Quarterly figures are unaudited Consolidated Q4 – 2024 result for continued activities | Annual report 2024 Page 24 Guidance 2025 Despite the uncertain marked conditions in Europe, strong growth in both revenue and operating profit (EBIT) is expected due to the two major contracts with OCP in Morocco. The development in the order backlog has been positive with an increase of 227% compared to the previous year. Guidance for 2025 is: • Revenue is expected to grow by 30-40% • Operating profit (EBIT) before special items is expected to be DKK 27-31m As a result of the geopolitical turmoil and uncertain marked conditions in Europe, expectations are subject to a higher than usual degree of uncertainty. | Annual report 2023 Page 24 1.9 GUIDANCE 2025 | Annual report 2024 Page 25 2. CORPORATE GOVERNANCE 2.1 COMPANY ANNOUNCEMENTS IN 2024 2.2 CORPORATE SOCIAL MANAGEMENT 2.3 RISK MANAGEMENT 2.4 CORPORATE GOVERNANCE AND REMUNERATION REPORT 2.5 EXECUTIVE MANAGEMENT 2.6 BOARD OF DIRECTORS 2.7 SHAREHOLDER INFORMATION | Annual report 2023 Page 25 | Annual report 2024 Page 26 3.1 Company announcements 2024 2.1 COMPANY ANNOUNCEMENTS 2024 Main company announcements in 2024 and 2025 26 February 01 – SKAKO pays an extraordinary dividend higher than expected of DKK 122m due to the sales of activities in SKAKO Concrete and expects to pay an ordinary dividend of DKK 15m. 14 March 02 – Annual report 2023 26 March 03 – Notice about ordinary general meeting 17 April 04 – Course of general meeting on 17 April 2024 22 May 05 – Interim report for the first quarter of 2024 30 May 06 – SKAKO increases share capital after use of warrants 31 May 07 – Total number of shares and voting rights on 31 May 2024 4 August 08 – SKAKO Vibration wins biggest order ever of more than DKK 150m on cleaning equipment for phosphate mining plants in Morocco 21 August 09 – Interim report for the first two quarters of 2024 8 November 10 – Update on expectations for 2024 13 November 11 – Interim report for the first three quarters of 2024 19 December 12 – Financial calendar 2025 21 February 2025 1 – Preliminary non-audited figures for 2024 and guidance for 2025 28 February 2025 2 – Change in Executive Management The company announcements are available on the company website: https://skako.com/about/investor-relations/#company_announcements | Annual report 2024 Page 27 3.2 Corporate social responsibility 2.2 CORPORATE SOCIAL RESPONSIBILITY Report on Corporate Social Responsibility, cf. Section 99a of the Danish Financial Statements Act SKAKO strives to operate its business in a responsible manner and wants to comply with the legislation in all the countries where operations are conducted. Furthermore, compliance with Human Rights and consideration for the environment are considerable focus areas for the Group. SKAKO’s work with corporate social responsibility is based on value creation and risk management. SKAKO has chosen to focus its work on social responsibility within five areas: Environment, human rights, working environment, anti-corruption, and equality. The policies below have been approved by the Board of Directors. For a description of SKAKOs strategy and business model please see section 1.5. Result for 2024 compared to goal for 2024 SKAKO realized 2.2% higher consumption of kWh in 2024 compared to the goal of 506,000 kWh. In 2024 we had the full year effect of solar collectors in France. In France, the production of electricity based on the solar collectors was much higher than the use of electricity. Results & goals Goal for 2024 Result 2024 Result 2023 Result 2022 Result 2021 506,000 516,886 790,316 804,777 848,268 Policy SKAKO seeks to reduce its impact on the environment by reducing energy consumption year by year. The Group is a know-how and engineering company with production of key components. The production mainly consists of assembling and testing and does not include energy-demanding or polluting processes. All surface treatment processes are outsourced to sub-suppliers. A part of SKAKO’s supplier “Code of Conduct” addresses impact on the environment. See under Human rights for more information about the supplier “Code of Conduct”. Furthermore, SKAKO has taken measures to reduce its energy consumption by, for example, installing LED lighting in its facilities and installing solar roof panels. Environment Actions SKAKO will reduce consumption of kWh year by year in its production sites. KPI Consumed kWh in production sites. Goal for 2025 is 500,000 kWh. The SKAKO Group aims to lower the consumption of kWh year by year even though the business is expected to grow. Risks It is not possible to decrease energy consumption fast enough due to high growth in activities. | Annual report 2024 Page 28 3.2 Corporate social responsibility Working environment Policy Our employees are our most valuable asset and key to providing high-quality products and services to our customers. It is vital to SKAKO’s future success that SKAKO is a safe, motivating and developing place to work. Actions 1. The sick rate among employees is monitored and we follow up on employees with high absence. 2. SKAKO will produce an annual employee satisfaction survey to monitor the development in employee satisfaction. Processes are in place to ensure that low-scoring departments receive guidance on how to improve employee satisfaction. 3. Number of on-the-job accidents is measured. 4. All employees must have at least one yearly performance appraisal interview. KPIs 1. The average sick rate among employees. 2. An average employee satisfaction score of at least 3.5. 3. Number of on-the-job accidents. 4. Percentage of performance appraisal interviews each year. Results for 2024 compared to goals for 2024 1. SKAKO reduced sick days to 4.0 days well below our goal of 5.0 and below 5.0 days for the SKAKO Group including Concrete activities. 2. In 2024 the employee survey resulted in an employee satisfaction of 3.8 which was above our goal of at least 3.5. 3. In 2024, SKAKO had 6 on-the-job accidents. Management does not find this satisfactory although it has been minor on-the-job accidents. Management will continue to work on eliminating on-the-job accidents. 4. In 2024, the score on appraisal interviews was 85% which was slightly below our goal of 90%. As this is a vital part of the employee well-being, we will keep pushing for this. Results & goals Goal for 2024 Result 2024 Result 2023 Result 2022 Result 2021 1 5.0 4.0 5.0 5.5 8.4 2 >3.5 3.8 3.8 4.1 N/A 3 0 6 8 10 5 4 90% 85% 85% 85% 85% Risks 1. The rate of illness increases due to an epidemic. 2. Internal information on corrective actions is not sufficient. 3. Unintentional violations of safety standards. 4. Performance appraisal interviews are not carried out on time due to high workload. *Measured as total number of sick days divided by the average number of employees in the year On a scale from 1 to 5, where 5 is the most positive score Goal for 2025 1 4.5 2 >3.5 3 0 4 90% | Annual report 2024 Page 29 3.2 Corporate social responsibility Anti-corruption and bribery Policy SKAKO seeks to avoid corruption and bribery by creating a framework that secures that employees at SKAKO are able to abide to laws and regulations, and that there will never exist any doubt with regards to a SKAKO employee’s impartiality. Actions 1. SKAKO enforces a gift policy. 2. SKAKO has introduced an internal whistle blower scheme to give employees the opportunity to report on corruption, bribery and other matters while being anonymous. 3. SKAKO has developed an Employee “Code of Conduct” e-learning that describes the way SKAKO expects all its employees to act in accordance with laws and regulations. The employee “Code of Conduct” also describes usage of the whistle blower scheme. Every year all SKAKO employees must conduct the Employee “Code of Conduct” e-learning session. 4. Whistle blower scheme will in the future also be available for external parties. KPIs 2. No reported violations of anti-corruption laws and regulations, and SKAKO Employee Code of Conduct. 3. All employees to pass SKAKO’s Employee “Code of Conduct” e-learning. Results for 2024 compared to goals for 2024 1. SKAKO A/S has maintained its gift policy throughout 2024. 2. SKAKO A/S has received no reported violations of anti-corruption laws and regulations, and SKAKO Employee Code of Conduct in 2024. 3. 85% of SKAKO employees have passed the SKAKO Employee Code of Conduct e-learning. The main reason for the result not being 100% is new hires in late 2024 who did not complete the Code of Conduct session yet. 4. The whistle blower scheme was not as planned made available to external parties this will be implemented in 2025. Furthermore, the whistle blower scheme is part of the SKAKO Employee Code of Conduct e-learning. Results & goals Risks 2. Employees lack knowledge of the whistle blower scheme. 3. Employee “Code of Conduct” e-learning is not prioritized. Goal for 2024 Result for 2024 Result for 2023 Result 2022 2 0 0 0 0 3 100% 85% 75% 80% | Annual report 2024 Page 30 3.2 Corporate social responsibility Human rights Policy To SKAKO, respect of human rights is about the company’s own employees’ conditions and securing that suppliers and sub-suppliers deliver services to the Group in a way that considers their employees’ rights including safety and health. Actions SKAKO has formulated a Supplier ”Code of Conduct” that specifies principles we expect our supplier to follow. This ensures that suppliers and their suppliers produce and deliver their services to the Group in a way that considers the environment and the employees’ rights. KPI The part of our main suppliers that have signed our supplier “Code of Conduct”. Result for 2024 compared to goal for 2024 SKAKO has not reached the goal of having all suppliers sign our code of conduct. This will be another target in 2025 and forward. Code of Conduct for SKAKO Group is currently being revised and will be launched in summer 2025. Results & goals Risks Lack of transparency in compliance with SKAKOs Supplier “Code of Conduct”. Goal 2024 Result for 2024 Result 2023 Result 2022 Result 2021 95% 90% 90% 95% 85% | Annual report 2024 Page 31 3.2 Corporate social responsibility Diversity, cf. Section 107d of the Danish Financial Statements Act Policy At SKAKO A/S we believe that a diverse and tolerant organization makes the company stronger, increases the competitiveness and creates a good and innovative working environment. We want to develop and benefit from the total potential of all employees and that all employees can develop their full potential in balance between working life and private life. Therefore, no discrimination based on gender, religion, ethnicity, sexual orientation, etc. is tolerated in SKAKO. When recruiting members to the SKAKO management team, we are convinced that diversity will add value to the company. To make sure all employees and management in SKAKO comply with SKAKOs policies of tolerance and inclusion, we have established an Employee “Code of Conduct” e-learning that describes the way SKAKO expects all its employees to act in accordance with our policies, and laws and regulations. Actions 1. SKAKO has developed an Employee “Code of Conduct” e-learning that describes the way SKAKO expects all its employees to act in accordance with laws and regulations. The employee “Code of Conduct” also describes usage of the whistle blower scheme. Every year all SKAKO employees must carry through the Employee “Code of Conduct” e-learning. The e-learning provides the management with insight on how to secure diversity in the organization and on management level. 2. Enhance the awareness in the SKAKO management team on the benefits of diversity. This could be in a workshop with this specific purpose KPIs 1. All employees to pass SKAKO’s Employee “Code of Conduct” e-learning. Results for 2024 compared to goals for 2024 1. 85% of SKAKO employees have passed the SKAKO Employee Code of Conduct e-learning. The goal for 2025: 100% of SKAKO employees have to pass the SKAKO Employee Code of Conduct e-learning. Risks 1. Employee “Code of Conduct” e-learning is not prioritized. Goal for 2024 Result 2024 Result 2023 Result 2022 Result 2021 1 100% 85% 75% 80% 95% Results & goals | Annual report 2024 Page 32 3.2 Data Ethics Data ethics (§99d ÅRL) Policy At SKAKO A/S we are acting with responsibility, when it comes to data ethics. This applies to all data, i.e. business intelligence data, employee information and supplier/ customer information. We have defined eight basic principles of working with data: Welfare: Data on society, democracy and social relations are treated with respect. Dignity: Treatment of data may not be used to harm an individual. Privacy: Any data treatment shall respect privacy and personal data shall be protected. It should always be considered what data are necessary and what are the sources of the data. Own rights: The individual should always have the right to obtain information on what data are stored and know for what purpose the data are intended. Equality: Treatment of data may not discriminate with regards to ethnicity, sexuality, sex, political opinions, religion, generical data, disability or other health related information. Justice: Treatment of data is performed with responsibility to local legislation. Data security: Treatment of data shall be sufficiently safe, robust and reliable. Data shall be stored and shared in way that unintended availability for unauthorized use is impossible. Responsibility: SKAKO is responsible for data collected, stored and distributed by SKAKO. Actions 1. Continuously communicate the basic principles of data ethics to SKAKO staff. 2. Implement annual review of data stored in CRM system. 3. Secure that all customers and suppliers are confirming their consent with data stored in CRM. | Annual report 2024 Page 33 3.3 Risk management 2.3 RISK MANAGEMENT First and foremost, risk management activities in the SKAKO Group focus on financial risks to which the Company is fairly likely to be exposed. In connection with the preparation of the Group’s strategic, budgetary and annual plans, the Board of Directors considers the risks identified in these activities. Financial risks Financial risk management concentrates on identifying risks in respect of exchange rates, credit and liquidity with a view to protecting the Group against potential losses and ensuring that Management’s forecasts for the current year are only to a limited extent affected by changes or events in the surrounding world – be the changes in exchange rates or in interest rates. It is Group policy to exclusively hedge financial risks arising from our commercial activities and not to undertake any financial transactions of a speculative nature. Exchange rate risks With more than 90% of the Group’s sales being invoiced in DKK and EUR currencies, reported revenue is only limited affected by movements in the Group’s trading currencies. Credit risks The Group’s credit risks relate primarily to trade receivables. For large projects we have a signed Letter of Credit from the customer’s bank before we undertake any work. Our remaining customer base is fragmented so credit risks in general only lead to minor losses on individual customers. Overall, we therefore estimate that we have no major credit exposure on Group level. With the two large orders with OCP in Morocco of DKK 150m the credit risk exposure on one single customer is higher than previously seen. This risk is mitigated through letter of credit for more than 80% of the payments and customary downpayments. Historically SKAKO has not had any credit losses with this customer. However late payment of invoices from countries in North Africa is often seen. Financial reporting process and internal controls SKAKO has established and maintains an internal control setup that supports correct and timely reporting to Management and Market. The responsibility of maintaining sufficient and efficient internal control and risk management in connection with financial reporting lies with the Executive Board. The Board of Directors has assessed the Group’s existing control environment and concluded that it is adequate andthat there is no need for setting up an internal audit function. Once every quarter we carry through a detailed planning and forecast process, and any deviations from the plans and budgets are carefully monitored. Furthermore, we perform weekly, monthly and quarterly reviews and assessments of all large projects. Liquidity risk The Group aims at having sufficient cash resources to be able to take appropriate steps in case of unforeseen fluctuations in cash outflows. With higher uncertainty regarding the timing of payments from OCP there is a risk that we see higher fluctuations in our liquidity. These fluctuations will be mitigated through suitable undrawn credit facilities. | Annual report 2024 Page 34 3.3 Risk management Safeguarding corporate assets Management continuously seeks to minimize any financial consequences of damage to corporate assets including any operating losses resulting from such damage. We have invested in security and surveillance systems to prevent damage and to minimize such damage, should it arise. Major risks, which cannot be adequately minimized, are identified by the Company’s Management, who will ensure that appropriate insurance policies are, on a continuous basis, established under the Group’s global insurance program administered by recognized and credit- rated insurance brokers and that such insurances are taken out with insurance companies with high credit ratings. The Group’s insurance program has deductible clauses in line with normal market terms. The Board of Directors reviews the Company’s insurance policies once a year including the coverage of identified risks and is briefed regularly on developments in identified risks. The purpose of this reporting is to keep the Board members fully updated and to facilitate corrective action to minimize any such risks. Declining market conditions Management continuously monitors market conditions and maintains close relations to significant customers in order to be able to make a timely response in light of changing circumstances. Monitoring of consequences regarding the Corona virus falls under this category, as well as geopolitical risks such as the current Ukraine war, inflation and increasing interest rates. Cyber security SKAKO maintains and enforces an IT safety policy to reduce risks from cyber crime. Furthermore, SKAKO has implemented an IT contingency plan based on recommendations from the Danish Data Protection Agency and other recommended authorities regarding cyber security. SKAKO’s head of IT operations oversees monitoring and enforcing of the IT contingency plan. Project execution The Company continuously executes projects across the world, and in some cases faces challenges in the execution. Management continuously monitors project execution to identify possible risks as early as possible. Furthermore, projects are actively distributed among project managers to ensure that the most experienced managers execute the most complex projects. Due to execution of the two large orders with OCP in Morocco this risk is higher than normal. However, the risk should be manageable since SKAKO has executed similar projects in Morocco before. | Annual report 2024 Page 35 3.4 Corporate governance and remuneration report 2.4 CORPORATE GOVERNANCE AND REMUNERATION REPORT Recommendations on corporate governance As a listed company on 31 December 2024, SKAKO observes the ´Recommendations on Corporate Governance´ (issued in November 2017 and updated in December 2020) implemented by Nasdaq Copenhagen in its ´Rules for issuers of shares´. The ´Recommendations on Corporate Governance´ contain 40 recommendations and are based on the comply-or-explain principle, which makes it legitimate for a company to explain why it does not comply with them. SKAKO fully complies with 38 of the 40 recommendations, and partially complies with one, and therefore complies with the ´Recommendations on Corporate Governance´ in all material respects. A complete schematic presentation of the recommendations and how we comply, Statutory report on corporate governance, cf. section 107 b of the Danish Financial Statements Act, is available on our website under Investor Relations. https://skako.com/about/investor-relations/ (in the Master Data section) We find it relevant to highlight a number of aspects and supplementary information on corporate governance in the SKAKO Group in this chapter. Deviations from recommendations SKAKO has not established a nomination or a remuneration committee. Given the size of SKAKO, the Board of Directors finds it most suitable that the total Board of Directors takes care of the tasks. Audit committee The Company’s Board of Directors has set up an audit committee. The Board of Directors appoints the chairman of the Audit Committee, who must be independent and who must not be Chairman of the Board of Directors. According to its charter, the Audit Committee, among other things, assists the Board of Directors in relation to internal accounting and financial control systems, the integrity of the company’s financial reports and engagements with external auditors. The audit committee also carries out ongoing assessments of the company’s financial and business risks. The audit committee has also a special focus on the divestment of Concrete activities. In 2024, the committee reviewed the main accounting principles, tax strategy and compliance and key risks, etc. In 2024, the Audit Committee held four meetings. Remuneration The Company has formulated remuneration policies for the Board of Directors and Executive Management. The policies were approved on the general assembly 28 April 2021. The policies are available on our website under Investor Relations. Furthermore, the Company has produced a remuneration report for the Board of Directors and Executive Management. The report is available on our website under Investor Relations. | Annual report 2024 Page 36 3.5 Executive management 2.5 EXECUTIVE MANAGEMENT Name Lionel Girieud Thomas Pedersen Born in 1971 1975 Title CEO Group CFO Member of the management since 2016 2022 Number of shares in SKAKO 5,166 0 Board positions – – | Annual report 2024 Page 37 3.6 Board of directors 2.6 BOARD OF DIRECTORS Name Jens Wittrup Willumsen Title Chairman of the Board of Directors and member of the audit committee Considered as a non-independent Board member Born in 1960 Board member since 2010 SKAKO shares Jens Wittrup Willumsen owns 50% of the shares in Frederik2 Aps. Frederik2 Aps owns 800,000 shares in SKAKO. Further, Jens Wittrup Willumsen has a direct ownership of 19,876 shares in SKAKO. Managerial positions in other companies Chairman of the Board: Licensewatch A/S, COMIT A/S, Begravelse Danmark A/S Deputy Chairman: Billund Lufthavn A/S Board member: FDM Travel A/S, Charlotte Sparre A/S, Experimentarium A/S, Museum Kolding, SEC Datacom Group A/S, TMC Nordic AS Otherspositions: Frederik2 ApS, Director own investment company Special competences Jens Wittrup Willumsen is educated Cand. Merc. from Copenhagen Business School and has had managing positions in Denmark and abroad. His competences include strategy, finance, financing, sales and marketing. Participation in board meetings Jens Wittrup Willumsen participated in all board and audit committee meetings in 2024. Carsten KrogsgaardThomsen Chairman of the Audit Committee Considered as an independent Board member 1957 2017 19,255 Board member: NTG Nordic Transport Group A/S, Carsten Krogsgaard Thomsen is educated Cand. Polit. and has had a long career with primary focus on economics and finance. Through his career, Carsten Krogsgaard Thomsen has accumulated extensive experience within M&A, and compliance in listed companies. From 2014 to 2020 Carsten Krogsgaard Thomsen was CFO in NNIT and previously also held positions as EVP and CFO in Dong Energy A/S, EVP in DSB (Danish State Railways), finance and planning manager at Rigshospitalet (the Copenhagen University Hospital) and consultant in McKinsey & Company. Carsten Krogsgaard Thomsen participated in all board and audit committee meetings in 2024. | Annual report 2024 Page 38 3.6 Board of directors Name Title Born in Board member since SKAKO shares Managerial positions in other companies Special competences Participation in board meetings Christian Herskind Jørgensen Considered as a non-independent Board member 1961 2009 Christian Herskind Jørgensen owns 50% of the shares in Frederik2 Aps. Frederik2 Aps owns 800,000 shares in SKAKO. Further, Christian Herskind Jørgensen has a direct ownership of 109,000 shares in SKAKO. Chairman of the Board: Fonden Amager Bakke, LABFLEX A/S, Taulov DryPort A/S, Skive Holding ApS, Associated Danish Ports A/S, Skive Holding ApS, Labflex Ltd. Board member: Nordsøenheden/Nordsøfonden, LM|Pihl A/S, Den Selvejende Institution Museum Fredericia Others positions: Herskind Venture Capital ApS, Director own holding company, Ejendomsselskabet Helsingør/Århus, Director Frederik2 ApS, Director own holding company Christian Herskind Jørgensen is educated lawyer from University of Copenhagen and University of London and is also Brigadier. His competences include significant experience within sales, marketing, strategy, management, HR and legal matters. Christian Herskind Jørgensen participated in all board meetings in 2024. Sophie Louise Knauer Considered as an independent Board member 1983 2020 – Board member: NTG Nordic Transport Group A/S, Solar A/S, Rekom Group A/S, Rekom Group Holding ApS, Ferm Living ApS, CC Globe Holding I ApS, CC Globe Holding II ApS, CC Fly Holding I ApS, CC Mist NEW Holding II ApS Other positions: Lady invest ApS and It’s a club ApS managing director and owner. Sophie Louise Knauer is educated HA JUR and Cand. Merc. in economy and strategic management from Copenhagen Business School. Her career includes top management in TDC, CEO for People Group A/S and senior consultant at McKinsey & Company. Sophie Louise Knauer has built strong competences within strategic management and digital transformation. Sophie Louise Knauer participated in all board meetings in 2024. | Annual report 2024 Page 39 3.7 Shareholder information 2.7 SHAREHOLDER INFORMATION As of 31 December 2024, SKAKO’s nominal share capital was 31,524,960 DKK divided into 3,152,496 shares of 10 DKK each. All shares are fully paid, the same class and carry one vote each. The Board of Directors has been authorized by the annual general assembly to initiate a share buy-back programme for up to 10% of the share capital. The authorization was valid until 1 April 2027. SKAKO A/S is listed at NASDAQ OMX Copenhagen A/S under identification code DK0010231877. By the end of 2024 the company had 1,989 registered shareholders compared with 2,003 registered shareholders by the end of 2023. The registered shareholders own a total of 93.5% of the share capital compared to 93.9% by the end of 2023. Specification of movements in share capital Shareholders with more than 5% of the share Dividends Based on the results in 2024 and capital structure of SKAKO A/S as of 31 December 2024, the Board of Directors recommends a dividend distribution of DKK 2.5 per share corresponding to 72% of profit for the year exclusive the profit from discontinued activities and a total dividend distribution of DKK 9.3m. With a share price of DKK 81.2 as of 31 December 2024, this corresponds to a dividend yield of 3.1%. Ex dividend date: Record date: Payment date: 25 April 2025 28 April 2025 29 April 2025 Financial calendar 2025 DKK Thousands 2024 2023 2022 2021 2020 Share capital 31,064 31,064 31,064 31,064 31,064 at 01.01. Capital increase 461 – – – – Share capital 31,525 31,064 31,064 31,064 31,064 at 31.12. Frederik2 ApS, Copenhagen Danica Pension,Copenhagen Maj Invest Holding A/S, Copenhagen 25.75% 10.48% 9.98% Presentation of the annual report Together with HC Andersen Capital, SKAKO A/S will do an online presentation of the annual report for 2024 on Thursday 13 March 2025 at 11.00 - 11.30 am. Registration for event: https://www.inderes.dk/videos/skako-presentation-of-annual- results-for-2024 Annual general meeting 2025 The annual general meeting will be held on Thursday 24 April 2025 at 3 p.m. at the Company’s head office at Bygmestervej 2, 5600 Faaborg, Denmark. Investor Relations Investors, analysts and medias are welcome to contact Jens Wittrup Willumsen (Chairman of the Board of Directors) by phone +45 2347 5640 or by e-mail to skako.dk@skako.com 12 March Annual report for 2024 24 April Ordinary general meeting 2025 21 May Trading statement Q1 2025 20 August Interim report for the first half -year of 2025 12 November Trading statement Q3 2025 | Annual report 2024 Page 40 3. FINANCIAL STATEMENTS 3.1 STATEMENT BY MANAGEMENT 3.2 INDEPENDENT AUDITOR’S REPORT 3.3 CONSOLIDATED FINANCIAL STATEMENT 3.4 CONSOLIDATED NOTES 3.5 PARENT COMPANY FINANCIAL STATEMENT 3.6 PARENT COMPANY NOTES | Annual report 2022 Page 40 | Annual report 2024 Page 41 4.1 Statement by Management Board of Directors Executive Board Thomas Pedersen CFO Jens Wittrup Willumsen Chairman Christian Herskind Jørgensen Carsten Krogsgaard Thomsen Deputy Chairman 3.1 STATEMENT BY MANAGEMENT Today, we have discussed and approved the Annual Report 2024 of SKAKO A/S for the financial year 1 January to 31 December 2024. The annual report has been prepared and presented in accordance with IFRS accounting standards as adopted by the EU and further requirements in the Danish Financial Statement Act. In our opinion, the consolidated financial statements and the parent company financial statements give a true and fair view of the Group’s and the parent company’s assets, liabilities and financial position on 31 December 2024 and of the results of the Group’s and the parent company’s operations and cash flows for the financial year 1 January to 31 December 2024. Further, in our opinion the Management’s report includes a fair view of the development and performance of the Group’s and the parent company’s business and financial condition, the profit for the year and of the Group’s and the parent company’s financial position, together with a description of the principal risks and uncertainties that the Group and the parent company face. In our opinion, the annual report of SKAKO A/S for the financial year 1 January to 31 December 2024 with the file name 529900WNR3U8C847AW24-2024-12-31-en.zip is prepared, in all material respects, in compliance with the ESEF Regulation. We recommend the Annual Report for 2024 be approved at the Annual General Meeting. Faaborg, 12 March 2025 Sophie Louise Knauer Lionel Girieud Director | Annual report 2024 Page 42 4.2 Independent auditor’s report 3.2 INDEPENDENT AUDITOR’S REPORTS To the shareholders of SKAKO A/S Report on the audit of the Financial Statements Our opinion In our opinion, the Consolidated Financial Statements and the Parent Company Financial Statements give a true and fair view of the Group’s and the Parent Company’s financial position at 31 December 2024 and of the results of the Group’s and the Parent Company’s operations and cash flows for the financial year 1 January to 31 December 2024 in accordance with IFRS Accounting Standards as adopted by the EU and further requirements in the Danish Financial Statements Act. Our opinion is consistent with our Auditor’s Long-form Report to the Audit Committee and the Board of Directors. What we have audited The Consolidated Financial Statements and Parent Company Financial Statements of SKAKO A/S for the financial year 1 January to 31 December 2024 comprise income statement and statement of comprehensive income, balance sheet, cash flow statement, statement of changes in equity and notes, including material accounting policy information for the Group as well as for the Parent Company. Collectively referred to as the “Financial Statements”. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the Auditor’s responsibilities for the audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Group in accordance with the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (IESBA Code) and the additional ethical requirements applicable in Denmark. We have also fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. To the best of our knowledge and belief, prohibited non-audit services referred to in Article 5(1) of Regulation (EU) No 537/2014 were not provided. Appointment We were first appointed auditors of SKAKO A/S on 26 April 2012 for the financial year 2012. We have been reappointed annually by shareholder resolution for a total period of uninterrupted engagement of 13 years including the financial year 2024. We were reappointed following a tendering procedure at the General Meeting on 19 April 2022. | Annual report 2024 Page 43 4.2 Independent auditor’s report Revenue recognition of plant sales from customer contracts Revenue from plant customer contracts is recognised over time. The proportion of revenue to be recognised in a particular period is calculated according to the percentage of completion of the plant project. This is measured by reference to the costs of performing the contract incurred up to the relevant balance sheet date as a percentage of the total estimated costs of performing the contract. Contract assets amounted to DKK 36 million (2023: DKK 38 million) net and contract liabilities amounted to DKK 1 million (2023: DKK 3 million) net. Recognition of the Group’s revenue involves a high degree of subjectivity in determining significant assumptions for the total estimated costs of plant projects. We focused on this area, as recognition of revenue involves judgements made by Management originating from percentage of completion and estimated cost to completion of plant projects. Reference is made to note 1 and 17. We considered the appropriateness of the Group’s accounting policies for revenue recognition and assessed compliance with applicable accounting standards. We performed risk assessment procedures with the purpose of achieving an understanding of it-systems, procedures and relevant controls relating to revenue recognition from customer contracts. In respect of controls, we assessed whether these were designed and implemented effectively to address the risk of material misstatement. We performed substantive procedures over input data from contracts and costs charged to plant projects. We assessed Management’s estimated cost to completion and contribution margin for customer contracts in order to evaluate the valuation of customer contracts and recognised revenue. We performed a retrospective analysis of Management’s ability to assess the cost to completion and expected contribution margin in prior years. We tested Management’s estimated percentage of completion by assessing subsequent development in costs allocated to the plant projects and Management’s updated estimates for cost to completion and contribution margin. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Statements for 2024. These matters were addressed in the context of our audit of the Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key audit matter How our audit addressed the key audit matter Deferred tax assets At 31 December 2024, the Group has recognised deferred tax assets of DKK 10 million (2023: DKK 10 million). Management is required to exercise considerable judgement when determining the appropriate amount to capitalise in respect of deferred tax. We focused on this area as the amounts involved are significant and the valuation of tax assets is dependent on highly subjective assumptions on budgeted taxable income for the coming years. Reference is made to note 15. We evaluated Management’s method for estimating the deferred tax assets. In understanding and evaluating Management’s method and assumptions we performed a retrospective analysis of Management’s ability to budget the taxable income in prior years. Further, we examined the Group’s budgets and projections for the coming years including significant assumptions. We evaluated and challenged the adequacy of the significant assumptions determined by Management in developing the accounting estimate. | Annual report 2024 Page 44 Management is responsible for Management’s Review. Our opinion on the Financial Statements does not cover Management’s Review, and we do not express any form of assurance conclusion thereon. In connection with our audit of the Financial Statements, our responsibility is to read Management’s Review and, in doing so, consider whether Management’s Review is materially inconsistent with the Financial Statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. Moreover, we considered whether Management’s Review includes the disclosures required by the Danish Financial Statements Act. Based on the work we have performed, in our view, Management’s Review is in accordance with the Consolidated Financial Statements and the Parent Company Financial Statements and has been prepared in accordance with the requirements of the Danish Financial Statements Act. We did not identify any material misstatement in Management’s Review. Management’s responsibilities for the Financial Statements Management is responsible for the preparation of consolidated financial statements and parent company financial statements that give a true and fair view in accordance with IFRS Accounting Standards as adopted by the EU and further requirements in the Danish Financial Statements Act, and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the Financial Statements, Management is responsible for assessing the Group’s and the Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Management either intends to liquidate the Group or the Parent Company or to cease operations, or has no realistic alternative but to do so. Statement on Management’s Review | Annual report 2023 Page 44 | Annual report 2024 Page 45 4.2 Independent auditor’s report Auditor’s responsibilities for the audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Financial Statements. As part of an audit in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the Parent Company’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management. • Conclude on the appropriateness of Management’s use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s and the Parent Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group or the Parent Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the Financial Statements, including the disclosures, and whether the Financial Statements represent the underlying transactions and events in a manner that gives a true and fair view. • Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the group as a basis for forming an opinion on the Consolidated Financial Statements. We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and, where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter. | Annual report 2024 Page 46 4.2 Independent auditor’s report Report on compliance with the ESEF Regulation As part of our audit of the Financial Statements we performed procedures to express an opinion on whether the annual report of SKAKO A/S for the financial year 1 January to 31 December 2024 with the filename 529900WNR3U8C847AW24-2024-12-31-en.zip is prepared, in all material respects, in compliance with the Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) which includes requirements related to the preparation of the annual report in XHTML format and iXBRL tagging of the Consolidated Financial Statements including notes. Management is responsible for preparing an annual report that complies with the ESEF Regulation. This responsibility includes: • The preparing of the annual report in XHTML format; • The selection and application of appropriate iXBRL tags, including extensions to the ESEF taxonomy and the anchoring thereof to elements in the taxonomy, for all financial information required to be tagged using judgement where necessary; • Ensuring consistency between iXBRL tagged data and the Consolidated Financial Statements presented in human-readable format; and • For such internal control as Management determines necessary to enable the preparation of an annual report that is compliant with the ESEF Regulation. Our responsibility is to obtain reasonable assurance on whether the annual report is prepared, in all material respects, in compliance with the ESEF Regulation based on the evidence we have obtained, and to issue a report that includes our opinion. The nature, timing and extent of procedures selected depend on the auditor’s judgement, including the assessment of the risks of material departures from the requirements set out in the ESEF Regulation, whether due to fraud or error. The procedures include: • Testing whether the annual report is prepared in XHTML format; • Obtaining an understanding of the company’s iXBRL tagging process and of internal control over the tagging process; • Evaluating the completeness of the iXBRL tagging of the Consolidated Financial Statements including notes; • Evaluating the appropriateness of the company’s use of iXBRL elements selected from the ESEF taxonomy and the creation of extension elements where no suitable element in the ESEF taxonomy has been identified; • Evaluating the use of anchoring of extension elements to elements in the ESEF taxonomy; and • Reconciling the iXBRL tagged data with the audited Consolidated Financial Statements. In our opinion, the annual report of SKAKO A/S for the financial year 1 January to 31 December 2024 with the file name 529900WNR3U8C847AW24-2024-12-31- en.zip is prepared, in all material respects, in compliance with the ESEF Regulation. Odense, 12 March 2025 PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab CVR no 3377 1231 Torben Jensen State Authorized Public Accountant mne18651 Mikael Johansen State Authorized Public Accountant mne23318 | Annual report 2024 Page 47 4.3 Consolidated financial statements DKK Thousands 2024 2023 Notes 1, 2 Revenue from contracts with customers 237,438 248,159 3, 4 Production costs (164,553) (173,425) Gross profit 72,885 74,734 4 Distribution costs (28,384) (26,010) 4, 5, 6 Administrative expenses (23,318) (24,128) Operating profit before special items (EBIT) 21,183 24,596 7 Special items - (1,934) Operating profit (EBIT) 21,183 22,662 8 Financial income 1,623 2,163 8 Financial expenses (4,613) (5,493) Profit before tax 18,193 19,332 9 Tax on profit for the year (4,593) (5,558) Profit for the year before discontinued activities 13,600 13,774 10 Result of discontinued activities after tax (2,591) 67,463 Profit for the year 11,009 81,237 Profit for the year attributable to SKAKO A/S shareholders 11,009 81,237 11 Earnings per share (EPS), DKK 3.51 26.34 11 Diluted earnings per share (EPS), DKK 3.49 25.36 11 Earnings per share continuing activities (EPS), DKK 4.35 4.47 11 Diluted earnings per share continuing activities (EPS), DKK 4.31 4.32 Consolidated income statement 3.3 CONSOLIDATED FINANCIAL STATEMENTS | Annual report 2024 Page 48 4.3 Consolidated financial statements Consolidated statement of comprehensive income DKK Thousand 2024 2023 Notes Profit for the year 11,009 81,237 Other comprehensive income: Items that have been or may subsequently be reclassified to the income statement: Foreign currency translation, subsidiaries (2,893) 2,661 Value adjustments of hedging instruments - 49 Other comprehensive income (2,893) 2,710 Comprehensive income 8,116 83,947 | Annual report 2024 Page 49 4.3 Consolidated financial statements Consolidated balance sheet 31 December DKK Thousands 2024 2023 Notes Intangible assets 25,132 25,189 Intangible assets under development 672 1,615 12 Intangible assets 25,804 26,804 14 Leased assets 12,715 8,025 13 Land and buildings 4,722 4,173 13 Plant and machinery 1,539 1,168 13 Operating equipment, fixtures and fittings 4,304 1,673 13 Leasehold improvements 2,620 2,427 13 Tangible assets under construction 246 74 Tangible assets 26,146 17,540 Other receivables 775 766 15 Deferred tax assets 10,107 9,891 Other non-current assets 10,882 10,657 Total non -current assets 62,833 55,001 16 Inventories 30,272 26,182 21 Trade receivables 66,312 58,274 17, 21 Contract assets 36,429 38,203 Other receivables 9,608 7,706 Prepaid expenses 1,271 800 Cash 24,839 156,027 Current assets 168,731 287,192 Assets 231,563 342,193 | Annual report 2024 Page 50 4.3 Consolidated financial statements Consolidated balance sheet 31 December CONTINUED DKK Thousands 2024 2023 Notes Share capital 31,525 31,064 Foreign currency translation reserve (150) 2,743 Hedging reserve - - Retained earnings 48,025 165,725 Proposed dividends 7,881 15,532 Equity 87,281 215,064 Other liabilities 2,308 2,300 19 Provisions 1,493 2,059 18 Loans and borrowings 2,074 4,106 14 Leasing 9,772 5,989 Non -current liabilities 15,647 14,454 19 Provisions 1,277 1,027 18 Loans and borrowings 2,290 2,270 18 Bank loans and credit facilities 45,083 3,278 14 Leasing 2,917 2,905 17 Contracts liabilities 1,009 3,310 Trade payables 52,745 64,665 Income tax 59 7,070 Other liabilities 23,255 28,150 Current liabilities 128,635 112,675 Liabilities 144,282 127,129 EQUITY AND LIABILITIES 231,563 342,193 | Annual report 2024 Page 514.3 Consolidated financial statements Consolidated cash flow statement DKK Thousnads 2024 2023 Notes 20 12 13 20 18,193 104,391 (9,119) (67,073) (8,648) 45,207 (4,090) (4,378) Profit before tax including discontinued activities Adjustments Changes in receivables, etc. Change in inventories Change in trade payables and other liabilities, etc. (17,880) (61,364) (21,544) 16,783 1,623 2,163 (4,613) (5,493) Cash flow from operating activities before financial items and tax Interest received Interest paid Taxes paid and received (7,685) (1,294) (32,219) 12,159 (210) (561) (5,128) (10,600) 1,894 24,094 Cash flow from operating activities Investment in intangible assets Investment in tangible assets Disposals Proceeds from sale of Concrete activities (2,591) 148,916 (6,035) 161,849 8,630 573 (6,847) (13,323) (136,522) (15,532) Cash flow from investing activities Proceeds from leasecontracts Repayments Paid dividends Change in short-term bank facilities 41,805 (34,841) (92,934) (63,123) (131,188) 110,885 156,027 45,142 24,839 156,027 Cash flow from financing activities Change in cash and cash equivalents Cash and cash equivalents 1 January Cash and cash equivalents 31 December Breakdown of cash and cash equivalents at the end of the year: Cash 24,839 156,027 Cash and cash equivalents at the end of the year: 24,839 156,027 | Annual report 2024 Page 52 4.3 Consolidated financial statements Consolidated statement of changes in equity DKK Thousands Share capital Foreign currency translation reserve Hedging reserve Retained earnings Proposed dividends Equity Equity 1 January 2024 31,064 2,743 - 165,725 15,532 215,064 Extraordinary dividends (121,989) 121,989 - Paid dividends 999 (137,521) (136,522) Increase of share capital 461 461 Comprehensive income in 2024: Profit for the year 3,128 7,881 11,009 Other comprehensive income: Recirculated currency translation adjustments, subsidiaries - (2,893) - - (2,893) Other comprehensive income - (2,893) - - (2,893) Comprehensive income, year - (2,893) - 3,128 7,881 8,116 Share -based payment, warrants - - - 163 - 163 Equity 31 December 2024 31,525 (150) - 48,025 7,881 87,281 | Annual report 2024 Page 53 4.3 Consolidated financial statements Consolidated statement of changes in equity DKK Thousands Share capital Foreign currency translation reserve Hedging reserve Retained earnings Proposed dividends Equity Equity 1 January 2023 31,064 82 (49) 99,538 15,532 146,167 Paid dividends (15,532) (15,532) Comprehensive income in 2023: Profit for the year 65,705 15,532 81,237 Other comprehensive income: Foreign currency translation adjustments, subsidiaries 2,661 2,661 Value adjustments of hedging instruments 49 49 Other comprehensive income 2,661 49 2,710 Comprehensive income, year 2,661 49 65,705 15,532 83,947 Share -based payment, warrants 482 482 Equity 31 December 2023 31,064 2,743 0 165,725 15,532 215,064 | Annual report 2024 Page 54 4.4 Consolidated notes 3.4 CONSOLIDATED NOTES 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. Note No. 1. 12. 15. 17. 19. Significant estimates and assessments: Notes to consolidated financial statements Revenue from contracts with customers . . . . . . . . . . . . . . . . . 55 Segment information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Production costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Staff costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Share-based payment, warrants . . . . . . . . . . . . . . . . . . . . . . 64 Fee to parent company auditors appointed at annual general meeting 66 Special items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Net financial items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Tax on profit for the year . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Discontinued activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Earnings per share (EPS) . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 Tangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 Leases – Right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . 79 Deferred tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .82 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84 Contract assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . 85 Bank loans and credit facilities . . . . . . . . . . . . . . . . . . . . . . . 87 Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 Adjustments, consolidated cash flow statement . . . . . . . . . . . . 91 Exchange rate, liquidity and credit risks . . . . . . . . . . . . . . . . . 92 Contractual liabilities, contingent liabilities and securities . . . . . . . 95 Related parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 Events after the balance sheet date . . . . . . . . . . . . . . . . . . . 95 Approval and publication . . . . . . . . . . . . . . . . . . . . . . . . . . 95 Group accounting policies . . . . . . . . . . . . . . . . . . . . . . . . . . 96 Description Page Page Description Note No. Revenue from contracts with customers . . . . . . . . . . . . . . 55 Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 Deferred tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 Contract assets and liabilities . . . . . . . . . . . . . . . . . . . . . 85 Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 | Annual report 2024 Page 55 4.4 Consolidated notes Accounting policy SKAKO develops, designs and sells high-end vibratory feeding, conveying, and screening equipment, used across the complete spectrum of material handling and processing. The main focus is on plant sales with a solid aftersales division. Administrative functions such as Finance, HR and IT are shared by the divisions. The administrative functions are based in the individual countries but supported by Group functions in Denmark. Shared costs are allocated to business segments based on assessment of usage. All intercompany transactions are made on market terms. Segment assets and liabilities comprise items directly attributable to a segment and items that can be allocated to a segment on a reasonable basis. Revenue is the fair value of consideration received or receivable from the sale of our plants and aftersales products or services and is the gross sales price less VAT and any price reductions in the form of discounts and rebates. Geographical information is based on the four regions that support the industries. Revenue is presented in the region in which delivery takes place. Segment income and costs include transactions between business areas. The transactions are eliminated in connection with the consolidation Revenue is recognized over time or at a point in time. Revenue is recognized over time when an asset on behalf of a customer is created with no alternative use and SKAKO has an enforceable right to payment for performance completed year to date, or the customer obtains control of a plant or product and thus has the ability to direct the use and obtain the benefit from the plant or product. Terms of payment are depending on conditions in the specific market. Plant sales orders are in general agreed with prepayment and payment milestones. Plant sales Plant sales are negotiated contracts to design and install concrete batching plants, and vibratory feeding, conveying and screening equipment for customers. Revenue will be recognized over time, as the above criteria are met, using “the percentage of completion method”. The proportion of revenue to be recognized in a particular period is calculated according to the percentage of completion of the project. For most contracts this is measured by reference to the costs of performing the contract incurred up to the relevant balance sheet date as a percentage of the total estimated costs of performing the contract. Reference to cost is assessed to be the most appropriate method as incurred hours and material costs are the value drivers for the projects. The sales value agreed in the contract is recognized over the contract period using above method. Contracts where the recognized revenue from the work performed exceeds progress billings are recognized in the balance sheet under assets Contracts for which progress billings exceed the revenue are recognized under liabilities. Prepayments from customers are recognized under liabilities. If it is likely that the total costs in relation to a construction contract will exceed the total revenue on a specific project, the expected loss is recognized immediately in the income statement in the current period. 1. Revenue from contracts with customers | Annual report 2024 Page 56 4.4 Consolidated notes Accounting policy CONTINUED Significant assessment by Management Assessments regarding contracts with customers is performed when determining if a contract for sale of a plant, spare parts or service, or a combination hereof, involves one or more performance obligations. Assessments regarding recognition method are made when determining if a contract for sale of a plant, spare parts or service is recognized as revenue over time or at a point in time. The assessments relate to whether we have an alternative use of the assets sold and if we have an enforceable right to payment throughout the contractual term. When assessing if an asset has no alternative use, we estimate the alternative use cost amount. We have limited historical data as we rarely redirect our assets. The estimate is based on the specifics of each contract. When assessing if we are entitled to payment throughout the contract term, an assessment is made based on the contract wording, legal entitlement and profit estimates. Significant estimates by Management Total expected costs related to plant sales are partly based on estimates as they include provisions for unforeseen cost deviations in future supplies of raw materials, subcontractor products and services plus construction and handing over. Provisions for warranties on work-in-progress for third parties are based on Management estimates for each project while taking contract obligations into account. 1. Revenue from contracts with customers CONTINUED SKAKO sell a range of spare parts and products as aftersales to the plant sales. Revenue is recognized when control of the products has transferred, being when the products are delivered to the customer. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and SKAKO has objective evidence that all criteria for acceptance have been fulfilled. Revenue from the service contracts is recognized in the period in which the services are provided based on amounts billable to a customer. Revenue is recognized based on usage of units, and price lists according to the contract. Aftersales, spare parts and products Aftersales services Order backlog The order backlog represents the value of outstanding performance obligations on effective contracts, where we will transfer control at a future point in time and the remaining performance obligations on contracts where we transfer control over time. | Annual report 2024 Page 57 4.4 Consolidated notes Revenue, DKK ThousandsGroup20242023Plant157,540170,302- Over time153,572165,323- Apoint in time3,9684,979Aftersales79,89877,857- Overtime--- Apoint in time79,89877,857Totalrevenue237,438248,159 Segregation of revenue Revenue,DKK Thousands 2024 2023Revenue recognizedthat was included in the contract liability balance at the beginning of the period:- Plantsales 3,310 3,700- Aftersales- -Totalrevenue recognized from contract liabilities 3,310 3,700 Segregation of revenue 1. Revenue from contracts with customers CONTINUED | Annual report 2024 Page 58 4.4 Consolidated notes Africa Revenue: DKK 29,005k (2023: DKK 23,271k) Hereof revenue in Morocco: DKK 11,149k (2023: DKK 1,796k) North America Revenue: DKK 6,027k (2023: DKK 7,337k) Rest of the world Revenue: DKK 7,941k (2023: DKK 10,371k) Europe Revenue: DKK 194,465k (2023: DKK 207,180k) Hereof revenue in Denmark: DKK 10,504k (2023: DKK 22,719) Hereof revenue in France: DKK 63,289k (2023: DKK 55,145k) Hereof revenue in the UK: DKK 11,919k (2023: DKK 15,617k) Hereof revenue in Germany: DKK 22,805k (2023: DKK 30,868k) Hereof revenue in Spain: DKK 43,320k (2023: DKK 42,657k) Geographical revenue information 1. Revenue from contracts with customers CONTINUED Geographical non-current assets information North America DKK 0k (2023: DKK 0k) Europe DKK 62,833k (2023: DKK 45,959k) Hereof in Denmark: DKK 38,312k (2023: DKK 29,710k) Hereof in France: DKK 14,950k (2023: DKK 13,313k) Hereof in Spain: DKK 8,900k (2023: DKK 1,452k) Hereof in Other: DKK 671k (2023: DKK 484k) | Annual report 2024 Page 59 4.4 Consolidated notes Not distributed including2024VibrationEliminations Group totalparent companyMinerals109,549- - 109,549Fasteners32,326- - 32,326Recycling82,804- - 82,804Other12,759- - 12,759Totalrevenue237,438- - 237,438Depreciations(5,785)(660) - (6,445)Operatingprofit (EBIT) before special items25,072(3,889) - 21,183Orderbacklog, beginning61,942- - 61,942Orderintake378,059- - 378,059Orderbacklog, ending202,563- - 202,563Segmentnon-current assets52,367340,280 (329,815) 62,833Segmentassets266,558428,897 (463,891) 231,564Segmentliabilities93,103186,540 (135,361) 144,282Investmentsin intangible and tangible asset13,440529 - 13,969Averagenumber of employees132- - 132 2024 DKK Thousands 2. Segment information | Annual report 2024 Page 60 4.4 Consolidated notes Not distributed 2023VibrationEliminations Group totalincludingparent companyMinerals99,187- - 99,187Fasteners38,077- - 38,077Recycling86,619- - 86,619Other24,277- - 24,277Totalrevenue248,159- - 248,159Depreciations(4,511)- - (4,511)Operatingprofit (EBIT) before special items27,157(2,558) - 24,599Orderbacklog, beginning72,550- - 72,550Orderintake237,551- - 237,551Orderbacklog, ending61,942- - 61,942Segmentnon-current assets44,97410,027 - 55,001Segmentassets258,248154,449 (45,237) 367,460Segmentliabilities102,79775,211 (45,237) 132,771Investmentsin intangible and tangible asset11,161- - 11,161Averagenumber of employees129- - 129 2023 DKK Thousands 2. Segment information | Annual report 2024 Page 61 4.4 Consolidated notes 3. Production costs Accounting policy Production costs are costs incurred to generate revenue. Production costs consist of raw materials, consumables, production staff, research and development cost as well as maintenance of and depreciation, amortisation and impairment losses on property, plant and equipment and intangible assets used in the production process. Research costs are always recognized in the Income Statement in step with the incurrence of such costs. Development costs include all costs not satisfying the capitalization criteria, but incurred in connection with development, prototype construction and development of new business concepts. Direct and indirect research and development incentives in terms of tax incentives and other grants and subsidy schemes for research and development are recognized when there is reasonable certainty that the conditions for such grants are satisfied and that they will be awarded. Grants are offset against research and development costs. The measurement and classification of government grants related to research and development is based on Management’s assessment. The incentive schemes applied do not require positive taxable income and hence government grants received have been accounted for in accordance with IAS 20. DKKThousands 2024 2023Costof goods sold during the year 101,832 106,073Write-downof inventories for the year, net 542 139Research and development costs 42 45Production staff costs and other costs 62,137 67,168Totalproduction costs 164,553 173, 425 | Annual report 2024 Page 62 4.4 Consolidated notes 4. Staff costs Accounting policy Staff costs consist of direct wages and salaries, remuneration, pension, share-based payments, training, etc. DKKThousands 2024 2023Wages,salaries and other remuneration 47,158 53,242Contributionplans and other social security costs, etc. 12,621 10,912Share-based payment, warrants 163 482Otherstaff costs 2,195 2,92962,137 67,565 The amounts are included in the items: Productioncosts 20,356 36,352Distributioncosts 25,248 20,706Administrativecosts 16,533 10,50762,137 67,565 The average number of employees was 132 (2023: 129). | Annual report 2024 Page 63 4.4 Consolidated notes DKKThousands 2024 2023Boardof Directors and Audit Committee 1,310 1,652ExecutiveManagementWages,salaries and other remuneration 5,832 7,648Contributionplans and other social security costs, etc. 301 341Share-based payment, warrants 163 4936,296 8,482 Total remuneration for Executive Management and Board of Directors 7,606 10,134 Remuneration to Executive Management and Board of Directors The Executive Management have been granted warrants to subscribe for shares in the company, cf. note 5. The Executive Management contracts are based on normal conditions. The board of directors and audit committee fee includes DKK 78k to board member for extraordinary work during the transaction and divestment of SKAKO Concrete activities 4. Staff costs CONTINUED | Annual report 2024 Page 64 4.4 Consolidated notes 5. Share-based payment, warrants Accounting policy Plans classified as equity-settled warrants are measured at fair value at grant date and are recognized in the income statement as staff costs in the period in which the final entitlement to the warrants is attained (the vesting period), as well as an inflow directly in equity. In connection with initial recognition of warrants, an estimate is made of the number of warrants to which Group Executive Management and key staff are expected to become entitled. Subsequent adjustment is made for changes in the estimate of the number of warrant entitlements, so the total recognition is based on the actual number of warrant entitlements. The fair value of the warrants allocated is estimated by means of the Monte Carlo model. The calculation takes into account the terms and conditions under which the share warrants are allocated. In 2021, the Executive Management and other key employees in the Group have been granted warrants to purchase a total of 150,000 shares in the company at a set price (strike price). The share-based programme has vesting conditions under which Management must stay employed for three years to receive the remuneration. The following exercise period runs for two years. In 2024, the Executive Management and other key employees in the Group have been granted warrants to purchase a total of 30,000 shares in the company at a set price (strike price). The share-based programme has vesting conditions under which Management must stay employed for three years to receive the remuneration. The following exercise period runs for two years. | Annual report 2024 Page 65 4.4 Consolidated notes The recognized fair value of warrants in the consolidated income statement amounts to DKK 163k (cost) (2023: DKK 482k, cost). The calculation of the fair value of warrants at the time of allocation is based on the following assumptions: 5. Share-based payment, warrants CONTINUED * For the 2021 programme, the preceding 48 months have been used ** The expected future dividend at the time of granting 2021 warrants 2024 warrantsGranted Strike priceExerciseGranted Strike priceExercise(all)period starts(all)period startsWarrants granted 150,000 55,60 April 2024 30,000 67.9 July 2028Executive management40,00030,000- hereof forfeited-Total executive management 40,000 -Other employees10,000-- Hereof forfeited-Total other employees 10,000 -Number of warrant entitlements 50,000 30,000 Granted 22 March 2021Granted 12 July 2024Average price per share 55.6 67.9Annual hurdle rate 0% 0%Strike price per share 55.6 67.9Expected volatility 33.5% 31.2%Expected dividends** 4.1% 5.0%Cost of equity 7.0% 8.5%Number of shares allocated 150,000 30,000Fair value per warrant, DKK 16.90 14.18Total fair value, DKK thousands 2,535 425 | Annual report 2024 Page 66 4.4 Consolidated notes 6. Fee to parent company auditors appointed at the annual general meeting In addition to the statutory audit, PwC, the Group auditors appointed at the Annual General Meeting, provides other assurance engagements and other consultancy services to the Group. A few Group enterprises are not audited by the Parent’s appointed auditors (PwC) or the auditors’ foreign affiliates. The fee for non-audit services delivered by PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab to the Group amounts to DKK 0.4m (2023: DKK 0.5m) and consists of tax, VAT and accounting advisory. DKKThousands 2024 2023PwCStatutoryaudit 1,011 1,164Otherassurance engagements 160 -Taxand indirect taxes consultancy 190 150Otherservices 176 3331,537 1,647Otheraudit firmsStatutoryaudit 298 224Otherassurance engagements 52 0Taxand indirect taxes consultancy 303 67Otherservices 453 3471,107 637 | Annual report 2024 Page 67 7. Special items Accounting policy Special items include significant expenses of a special nature that relates to the terminated transaction on divestment of SKAKO’s to divions SKAKO Concrete and SKAKO Vibration including all operating activities in SKAKO Group and that cannot be attributed directly to the Group’s ordinary operating activities. Special items include significant non-recurring items. Special items are shown separately from the Group’s ordinary operations as this gives a truer and fairer view of the Group’s operating profit. There has been no special items in 2024. Special items in 2023 consists of transaction costs for the terminated transaction process with Zefyr Invest and amounting to DKK 1.9m 4.4 Consolidated notes | Annual report 2024 Page 68 4.4 Consolidated notes 8. Net financial items Accounting policy Net financial items mainly consist of interest income and interest expenses and also include interest on lease debt as well as realized and unrealized foreign exchange gains and losses. Interest income and interest expenses are accrued based on the principal amount and the effective interest rate. The effective interest rate is the discount rate used for discounting expected future payments attaching to the financial asset or financial liability in order for amoritized cost to match the carrying amount of such asset or liability. DKKThousands 2024 2023Intereston cash and bank deposits 1,601 2,140Financialincome from financial assets not measured at fair value in the income statement 1,601 2,140Foreignexchange gains, net 22 23Financialincome 1,623 2,163Intereston bank debt (1,922) (2,011)Intereston lease debt (325) (102)Financial expenses on financial liabilities not measured at fair value in the income statement (2,247) (2,113)Foreignexchange losses, net - (170)Otherfinancial expenses (2,366) (3,210)Financialexpenses (4,613) (5,493)Netfinancial items (2,990) (3,330) | Annual report 2024 Page 69 4.4 Consolidated notes 9. Tax on profit for the year Accounting policy Tax for the year comprises current tax and changes in deferred tax and is recognized in the Income Statement with the share attributable to the profit for the year, and in the other comprehensive income with the share attributable to items recognized in other comprehensive income. Exchange rate adjustments of deferred tax are included as part of the year’s adjustments of deferred tax. Current tax comprises tax calculated on the basis of the expected taxable income for the year using the applicable tax rates for the financial year and any adjustments of taxes for previous years. DKKThousands 2024 2023Currenttax on the profit for the year (4,223) (1,788)Adjustmentof current tax, prior years - (1,371)Changein deferred tax (370) (2,399)Taxfor the period, net income (4,593) (5,558)Taxusing the Danish corporate tax rates (3,823) (1,036)Effectof tax rates in foreign jurisdictions (400) (675)Taxassets not previously capitalized (370) (2,476)Permanent and temporary differences and other items - (1,371)(4,593) (5,558) | Annual report 2024 Page 70 4.4 Consolidated notes 10. Discontinued activity Accounting policy Discontinued activities are excluded from the result of continuing activities and presented separately as profit/loss from discontinued activities in the income statement. Compared figures are restated. Cashflow from discontinued activities is presented separately as net cash from discontinued activities in the cash flow statement and specified in this section. Compared figures are restated. Analysis of income from the discontinued activities 2024 2023 Revenue- 268,446Cost(1,902) (253,672)Other operating income or loss (gains from divestment after tax)(3,580) 57,330Financial income 2,891 -Profit before tax from discontinued activities (2,591) 72,104Income tax - (4,641)Profit after tax from discontinued activities (2,591) 67,463 The SKAKO Concrete activities were sold to Zefyr Invest IV as of December 29, 2023. Net cash flow from the discontinued activities 2024 2023 Cash flow from operating activities (5,482) 14,933Cash flow from investing activities - 133,983Cash flow from financing activities 2,891 -Net cash flow from discontinued activities (2,591) 148,916 | Annual report 2024 Page 71 4.4 Consolidated notes 11. Earnings per share (EPS) Accounting policy Earnings per share (EPS) and diluted earnings per share (EPS, diluted) are measured according to IAS 33. Non-diluted earnings per share are calculated as the profit for the year divided by the total average number of shares outstanding during the year (shares issued adjusted for treasury shares). Diluted earnings per share are calculated as the profit for the year divided by the average number of shares outstanding less share options in-the-money (shares issued adjusted for treasury shares). DKKThousands 2024 2023EarningsProfitfor the year 11,009 81,238Numberof shares, averageNumberof shares issued 3,152,496 3,106,418Adjustmentfor treasury share (22,567) (22,567)Averagenumber of shares 3,129,929 3,083,851Earningsper share (EPS) 3.51 26.34Earningsper share, diluted 3.49 25.36Earnings per share continuing activities (EPS), DKK 4.35 4.47Diluted earnings per share continuing activities (EPS), DKK 4.31 4.32 As of 31 December 2024, SKAKO’s nominal share capital was 31,524,960 DKK divided into 3,152,496 shares of 10 DKK each. All shares are of the same class and carry one vote each. Treasury shares represents 0.71% of number of shares issued. | Annual report 2024 Page 72 4.4 Consolidated notes 12. Intangible assets assets Accounting policy Development projects for which the technical rate of utilization, sufficient resources and a potential future market or application in the Group can be demonstrated and which are intended to be manufactured, marketed or used are recognized as completed development projects. This requires that the cost can be determined, and it is sufficiently certain that the future earnings or the net selling price will cover production, sales and administrative costs plus the development costs. Other development costs are recognized in the income statement when the costs are incurred. Development costs consist of salaries and other costs that are directly attributable to development activities. Amortization of completed development projects is charged on a straight- line basis during their estimated useful life. Development projects are written down for impairment to recoverable amount, if lower. Development projects in progress are tested for impairment once a year. The amortization profile is systematically based on the expected useful life of the assets, taking into account the remaining agreement period and consumption (unit of production method) at the time of implementation. The basis of amortization is reduced by impairment, if any. Amortization takes place systematically over the estimated useful life of the assets which is as follows: • Development costs, 2-10 years • Software systems, 2-10 years • Other intangible assets, 3-5 years On initial recognition, goodwill is recognized and measured as the difference between the purchase price – including the value of non- controlling interests in the acquired enterprise and the fair value of any existing investment in the acquired enterprise – and the fair values of the acquired assets, liabilities and contingent liabilities. Please refer to Accounting policies in Note 26. On recognition, goodwill is allocated to corporate activities that generate independent payments (cash generating units). The definition of a cash- generating unit is in line with the Group’s managerial structure as well as the internal financial management reporting. SKAKO goodwill relates to SKAKO Dartek and goodwill is monitored as in previous years. Impairment test of goodwill are based on calculated capital value of the single unit, based on five-year business plans as well as a calculated terminal value that compared with carrying amount of the tested assets. The main assumptions of the business plans of the individual CGUs are linked to SKAKO’s expected growth and earnings over a number of years, and the applied gross profit margins and costs are based on management's expectations. Intangible assets with a finite useful life are measured at cost less accumulated amortization and impairment losses. Goodwill is not amortized but is tested for impairment at least once a year. If the recoverable amount of a cash-generating unit is lower than the carrying amounts of property, plant and equipment and intangible assets including goodwill, attributable to the particular cash generating unit, the particular assets will be written down. | Annual report 2024 Page 73 4.4 Consolidated notes Significant estimate by Management Impairment testing is carried out annually on preparation of the annual report or on indication of impairment in which discounted values of future cash flows are compared with carrying amounts. The calculations use cash flow projections based on financial budgets approved by Management covering a five-year period. Cash flows beyond the five-year period are extrapolated using growth rates estimated by Management. Other intangibleIntangible assets DevelopmentGoodwillSoftware Totalassetsunder developmentprojectsCostat 1 January 2024 22,295 - 1,615 1,472 4,936 30,318Foreignexchangeadjustments 4 3 3 10Investments15 195 210Disposals-Transferredbetween categories (947) 376 (571)Costat 31 December 2024 22,295 - 672 1,490 5,510 29,967Amortisationand impairment - - - 574 2,940 3,5141January 2024Foreignexchange adjustment 2 3 5Disposals-Amortisation162 482 644Amortisationand impairment - - - 738 3,425 4,16331December 2024Carryingamount 31 December 2024 22,295 - 672 752 2,085 25,804 DKK Thousands 12. Intangible assets CONTINUED | Annual report 2024 Page 74 4.4 Consolidated notes Other intangibleIntangible assets DevelopmentGoodwillSoftware Totalassetsunder developmentprojectsCostat 1 January 2023 25,440 4,426 4,237 1,458 30,098 65,659Foreignexchangeadjustments - - - - - -Investments- - 94 112 355 561Disposals(3,145) (4,426) (2,716) (98) (25,517) (35,902)Transferredbetween categories - - - -Costat 31 December 2023 22,295 - 1,615 1,472 4,936 30,318Amortisationand impairment 1- 2,868 - 469 21,897 25,234January2023Foreignexchange adjustment - - - - - -Disposals- (2,868) - (49) (19,523) (22,440)Amortisation- - - 154 566 720Amortisationand impairment 31- - - 574 2,940 3,514December2023Carryingamount 31 December 2023 22,295 - 1,615 898 1,996 26,804 DKK Thousands 12. Intangible assets CONTINUED | Annual report 2024 Page 75 4.4 Consolidated notes DKK Thousands 2024 2023 Depreciation is included in the items: Production costs 451 504Distributioncosts 161 180Administrativecosts 32 36644 720 Impairment test of goodwill: The carrying amount of goodwill related to SKAKO Dartek, DKK 22,295. 12. Intangible assets CONTINUED Key assumptions The recoverable amount determined in the impairment test is based on a value-in-use calculation. To determine the value-in-use, management is required to estimate the present value of the future free net cash flow based on budgets and strategy for the coming five years as well as projections for the terminal period. Significant parameters in the estimate of the present value are discount rate, revenue growth, EBIT margin, expected investments and growth expectations for the terminal period. The discount rate is determined to reflect the risks. The discount rate applied is the weighted average cost of capital (WACC) and reflects the latest market assumptions for the cost of equity and the cost of debt. The discount rate used amounts to 10.0% before tax and estimates for future revenue growth (2023: 10.0% before tax). The uncertainties associated with these expectations are reflected in the cash flow. The expected annual growth rate and the expected margins in the budget period are based on historical experience and the assumptions about expected market developments. The long-term growth rate for the terminal period is based on the expected growth in the world economy, specifically for the industries. The valuation method is based on annual revenue growth of 2% in 2025 to 2029 as well as in the terminal period (2023: 2%). Investments reflect both maintenance and expectations of organic growth. Over the next five years, the EBIT margin is expected at stable at the current level around 10% (2023: 10%). Sensitivity analysis Based on current assumptions we see no impairment indications, and our key assumptions are not sensitive to reasonable changes to an extent that will result in an impairment loss neither individually or in combination. For example, a lowering of perpetual growth to zero and increasing the discount rate by two percentage points will not lead to impairment. Similarly, a decrease in EBIT by 20% in combination with an increase in investments as a percentage of revenue by 1 percentage points will not lead to impairment. A sensitivity analysis has not been carried out, as negative changes in the fundamental assumption, which will result in impairment of goodwill, are considered unlikely to become a reality. | Annual report 2024 Page 76 4.4 Consolidated notes 13. Tangible assets Land and buildings, plant and machinery and other facilities, operating equipment and tools and equipment are measured at cost less accumulated depreciation and impairment losses. Depreciation is charged on a straight-line basis over the estimated useful life of the assets until they reach the estimated residual value. Estimated useful life is as follows: • Buildings, 10-40 years • Plant and machinery, 3-10 years • Operating equipment and other tools and equipment, 3-10 years • Leasehold improvements, 3-10 years • Land not depreciated Newly acquired assets are depreciated from the time they are available for use. Accounting policy | Annual report 2024 Page 77 4.4 Consolidated notes Tangible assetsPlant & Operating equipment, Leasehold Land & buildingsin course ofTotalmachineryfixtures and fittingsimprovementsconstructionCost1 January 2024 6,189 5,989 9,712 3,309 74 25,273Foreignexchange adjustments 18 15 (29) - - 3Investments903 631 3,422 - 172 5,128Disposals- (147) (211) - - (358)Transferred between categories - - - 571 - 571Costat 31 December 2024 7,109 6,488 12,894 3,880 246 30,617Depreciationand impairment 2,016 4,821 8,039 882 - 15,7581January 2024Foreignexchange adjustments 13 11 (91) - - (67)Disposals- (147) (211) - - (358)Depreciation358 264 852 378 - 1,852Depreciation and impairment 2,387 4,949 8,589 1,260 - 17,18531December 2024Carryingamount 31 December 2024 4,722 1, 539 4,304 2,620 246 13,432 DKK Thousands 13. Tangible assets CONTINUED | Annual report 2024 Page 78 4.4 Consolidated notes Tangible assetsPlant & Operating equipment, Leasehold Land & buildingsin course ofTotalmachineryfixtures and fittingsimprovementsconstructionCost1 January 2023 8,422 10,827 17,049 7,440 156 43,894Foreignexchange adjustments - (4) (9) - - (13)Investments1,942 260 819 557 - 3,578Disposals(4,176) (5,094) (8,147) (4,688) (81) (22,186)Transferred between categoriesCost31 December 2023 6,189 5,989 9,712 3,309 74 25,273Depreciationand impairment 1 January 2,601 9,589 14,591 4,534 - 31,3152023Foreignexchange adjustments - (3) (9) - - (12)Disposals(867) (4,951) (6,965) (3,943) - (16,726)Amortization282 186 422 292 - 1,182Depreciationand impairment 31 2,016 4,821 8,039 882 - 15,758December2023Carryingamount 31 December 20234,173 1,168 1,673 2,427 74 9,515 DKK Thousands DKK Thousands 2024 2023 Depreciation is included in the items: Production costs 1,296 827Distributioncosts 463 296Administrativecosts 93 591,852 1,182 13. Tangible assets CONTINUED | Annual report 2024 Page 79 4.4 Consolidated notes 14. Leases – right-of-use assets Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments: • Fixed payments, less any lease incentives receivable. • Variable lease payment that are based on an index or a rate, initially measured using the index or rate as the commencement date. • Amounts expected to be payable by the Group under residual value guarantees. • The exercise price of a purchase option if the Group is reasonably certain to exercise that option. • Payments of penalties for terminating the lease if the lease term reflects the Group exercising that option. The lease payments are discounted using the interest rate for implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group., the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Right-of-use assets are measured at cost comprising the following: • The amount of the initial measurement of lease liability. • Any lease payments made at or before the commencement date less any lease incentives received. • Any initial direct cost and restoration cost. Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. While the Group revalues its land and buildings that are presented within property, plant and equipment, it has chosen not to do so for the right-of-use buildings held by the Group. Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognized on a straight-line basis as an expense in profit or loss. Short-term leases are leased with a lease term of 12 months or less. Low-value assets comprise IT equipment and small items of office furniture. Accounting policy | Annual report 2024 Page 80 4.4 Consolidated notes Leaseassets Rental of promises Equipment Company cars TotalCosts1 January 2024 9,312 498 7,499 17,309Additions5,326 - 3,305 8,631Disposals- - (1,536) (1,536)Reclassification- - - -Exchangerate adjustment - 2 16 18Costs31 December 2024 14,638 500 9,284 24,422Depreciationand impairment loss 1 January 2024 4,379 171 4,734 9,284Depreciation2,164 67 1,718 3,949Depreciationreversed on disposals - - (1,536) (1,536)Exchangerate adjustment - 1 9 10Depreciationand impairment loss 31 December 2024 6,543 239 4,925 11,707Carryingamount 31 December 2024 8,095 261 4,359 12,715 DKK Thousands Leaseassets Rental of promises Equipment Company cars TotalCosts1 January 2023 10,561 682 9,490 20,733Additions4,404 342 2,276 7,022Transferredbetween categories (5,653) (526) (4,267) (10,446)Disposals- - - -Exchangerate adjustment - - - -Costs31 December 2023 9,312 498 7,499 17,309Depreciationand impairment loss 1 January 20234,544 475 6,928 11,947Depreciation1,271 15 1,323 2,609Depreciationreversed on disposals (1,436) (319) (3,517) (5,272)Exchangerate adjustment - - - -Depreciationand impairment loss 31 December 2023 4,379 171 4,734 9,284Carryingamount 31 December 2023 4,933 327 2,765 8,025 DKK Thousands 14. Leases – right-of-use assets CONTINUED | Annual report 2024 Page 81 4.4 Consolidated notes Leaseliabilities – DKK Thousands2024 2023Lease liabilities are recognized in the balance sheet as follows:Non-current liabilities 9,772 5,989Currentliabilities 2,917 2,905Totallease liabilities 12,689 8,894Recognizedin the profit and loss statement:Interest expensesrelated to lease liabilities 438 186Expenserelating to short-term leases (included in cost of goods sold and administrative expenses) 2,051 1,397Expenserelating to leases of low-value assets that are not shown above as short-term leases 7 7Expense relation to variable lease payments not included in lease liabilities - - Cashflow from leasing – DKK Thousands2024 2023Interests(438) (186)Liabilitiespayment (2,051) (1,397)Adjustmentsin total according to leases (2,488) (1,583) 14. Leases – right-of-use assets CONTINUED | Annual report 2024 Page 82 4.4 Consolidated notes 15. Deferred tax Deferred tax is calculated using the balance sheet liability method on temporary differences between the carrying amounts for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is calculated based on the applicable tax rates for the individual financial years. The effect of changes in the tax rates is stated in the income statement unless they are items previously entered in the statement of other comprehensive income. A deferred tax provision is made to cover re-taxation of losses in foreign enterprises if shares in the enterprises concerned are likely to be sold and to cover expected additional future tax liabilities related to financial year or previous years. No deferred tax liabilities regarding investments in subsidiaries are recognized if the shares are unlikely to be sold in the short term. The tax value of losses that are expected with adequate certainty to be available for utilization against future taxable income in the same legal tax unit and jurisdiction is included in the measurement of deferred tax. SKAKO A/S is jointly taxed with all Danish subsidiaries, SKAKO A/S being the administrator of the Danish joint taxation. All the Danish subsidiaries provide for the Danish tax based on the current rules with full distribution. Recognition of deferred tax assets and tax liabilities is made in the individual Danish enterprises based on the principles described above. The jointly taxed Danish enterprises are included in the Danish tax payable on account scheme. If companies in the Group have deferred tax liabilities, they are valued independently of the time when the tax, if any, becomes payable. Significant estimate by Management Deferred tax assets, including the tax value of tax losses allowed for carry forward, are recognized in the balance sheet at the estimated realisable value of such assets, either by a set-off against a deferred tax liability or by a net asset to be set off against future positive taxable income. At the balance sheet date, an assessment is made as to whether it is probable that sufficient taxable income will be available in the future against which the deferred tax asset can be utilized. Deferred tax on temporary differences between the carrying amounts and the tax values of investments in subsidiaries is recognized unless the Parent is able to control the time of realization of such deferred tax, and it is probable that such deferred tax will not be realized as current tax in the foreseeable future. Deferred tax is recognized in respect of eliminations of intra-Group profits and losses. Accounting policy | Annual report 2024 Page 83 4.4 Consolidated notes DKKThousands 2024 2023Deferred tax recognized in the balance sheet:Deferredtax assets 10,107 9,891Deferredtax, net 31 December 10,107 9,891Deferredtax, net 1 January 9,891 25,575Foreigncurrency translation adjustments - -Changesin deferred tax 216 (15,684)Deferredtax, net 31 December 10,107 9,891Deferredtax:Intangibleassets (456) (989)Property, plants and equipment (77) 55Inventories939 1,055Provisions- -Tax losses10,107 10,330Otheritems (406) (560)10,107 9,891Deferred tax assets not recognized:Intangibleassets - -Property, plants and equipment 205 205Inventories- -Other items 121 121Tax losses16,976 17,38417,302 17,710 Tax losses carried forward are not subject to time limitation. All recognized deferred tax assets are expected to be offset against positive taxable income within a five-year period. Recognition is based on current results and Management’s expectations for the future. The deferred tax assets are evaluated in each tax jurisdiction in the SKAKO Group, consisting of joint taxations in respectively Denmark, France, Germany, Spain and the UK. Management has performed a sensitivity analysis on expectations for the future. This shows that a 10 % decrease compared to expectations will result in a decrease of DKK 1.3m in the recognized deferred tax assets. Because the deferred tax assets are evaluated in each tax jurisdiction, the sensitivity cannot be applied on a linear basis. 15. Deferred tax CONTINUED | Annual report 2024 Page 84 4.4 Consolidated notes 16. Inventory Accounting policy Raw materials, work-in-progress and goods for resale are measured at cost according to the FIFO principle (according to which the most recently purchased items are considered to be in stock) or at their net realizable value, whichever is lower. Group-manufactured products and work in progress are measured at the value of direct cost, direct payroll costs, consumables and a proportionate share of indirect production costs (IPC), which are allocated on the basis of the normal capacity of the production facility. IPC include the proportionate share of capacity costs directly relating to Group-manufactured products and work in progress. Inventory– DKK Thousands 2024 2023Rawmaterials and consumables 5,528 3,854Work-in-progress 6,042 4,612Finishedgoods and goods for resale 18,702 17,717Inventories net of write-downs at 31 December 30,272 26,182Includedin Income Statement under production costs:Write-down of inventories for the year542139Write-down of inventories prior year101,832105,893Costs of goods sold during the year Write-downs for the year are shown net as breakdown into reversed write-downs. | Annual report 2024 Page 85 4.4 Consolidated notes 17. Contract assets and liabilities Accounting policy Revenue is recognized based on the value of the work completed at the balance sheet date. The revenue corresponds to the sales value of the year’s completed work based on costs incurred as a percentage of the total estimated costs (percentage of completion method). The stage of completion for the individual project is calculated as the ratio between the cost incurred at the balance sheet date and the total estimated cost to complete the project. In some projects, where cost estimates cannot be used as a basis, the ratio between completed sub-activities and the total project is used instead. All direct and indirect costs that relate to the completion of the contract are included in the calculation. When invoicing on account exceeds the value of the work completed, the liability is recognized as a contract liability under short-term liabilities. If projects are expected to be loss-making, the loss is recognized immediately in the income statement. Costs not yet incurred are provided for as other provisions. Provisions are based on individual assessment of the estimated loss until the projects have been completed. Significant assessment by Management Total expected costs related to work-in-progress for third parties are partly based on estimates as they include provisions for unforeseen cost deviations in future supplies of raw materials, subcontractor products and services plus construction and handing over. Provisions for warranties on work-in-progress for third parties are based on Management estimates for each project while taking contract obligations into account. | Annual report 2024 Page 86 4.4 Consolidated notes DKKThousands 2024 2023Totalcosts incurred 63,401 82,276Valuationafter IFRS 9 (note 21) (139) (139)Profitrecognized as income, net 18,247 26,633Contractassets 81,510 108,770Contractliabilities (46,090) (73,877)Netcontract assets and liabilities 35,420 34,893Ofwhich contract assets are stated under assets 36,429 38,203andcontract liabilities (1,009) (3,310)Netcontract assets and liabilities 35,420 34,893 Contract assets and liabilities consist of all open projects on 31 December including cost and profit recognized in prior years. The majority of all contract assets and liabilities on 31 December are expected to be revenue recognized in 2024. 17. Contract assets and liabilities CONTINUED | Annual report 2024 Page 87 4.4 Consolidated notes 18. Bank loans and credit facilities Accounting policy Debt to credit institutions is recognized at the date of borrowing at the proceeds received less transaction costs. For subsequent periods, financial liabilities are measured at amortized cost for the difference between proceeds and the nominal value to be recognized as a financial expense over the term of the loan. Carrying DKK ThousandsMore than 5Total2024 0-1 year 1-5 yearsWeighted averageyears amount effective interest rateCashand cash equivalents 24,839 - - 24,839 24,839 0.6%Assets24,839 - - 24,839 24,839 0.6%Leasedebt (2,917) (9,772) - (12,689) (12,689) 5.5%Otherdebt (2,290) - - (2,290) (2,290) 0.0%Debtto credit institutions - (2,074) - (2,074) (2,074) 1.0%Shortterm bank facilities (45,083) - - (45,083) (45,083) 5.0%Liabilities(50,290) (11,846) - (62,136) (62,136) 4.8%Netdebt (25,451) (11,846) - (37,297) (37,297) 4.3% | Annual report 2024 Page 88 4.4 Consolidated notes DKK ThousandsWeighted average2023 0-1 year 1-5 years TotalMore than 5CarryingYears amount effective interest rateCashand cash equivalents 156,027 - - 156,027 156,027 3.1%Assets156,027 156,027 156,027 3.1%Leasedebt (2,905) (5,989) - (8,895) (8,895) 3.4%Otherdebt (2,270) - - (2,269) (2,269) 0.0%Debtto credit institutions - (4,106) - (4,106) (4,106) 0.4%Shortterm bank facilities (3,278) - - (3,278) (3,278) 6.0%Liabilities(8,453) (10,095) - (18,548) (18,548) 3.4%Netdebt 147,574 (10,095) - 137,479 137,479 2.9% Based on the Group’s net debt at the end of the 2024 financial year, a rise of 1 percentage point in the general interest rate level will cause a decrease in consolidated annual earnings after tax and equity of approx. DKK 370k (DKK 150k in 2023). Cash management SKAKO is committed to maintaining a flexible capital structure. On 31 December 2024, SKAKO had undrawn committed credit facilities in the amount of DKK 44,053k (2023: DKK 168,797k). On 31 December 2024, SKAKO had ‘cash and cash equivalents’ and ‘bank overdraft’, net of DKK (20,244)k (2022: DKK 152,749k). Capital management SKAKO monitors capital on the basis of the net debt relative to EBITDA. At the end of the year, the net debt to EBITDA ratio was equity ratio was 1.3 (2023: negative 4.7). SKAKO has a medium-term goal of a net debt to EBITDA ratio below 2.5. 18. Bank loans and credit facilities CONTINUED | Annual report 2024 Page 89 4.4 Consolidated notes 19. Provisions Accounting policy Provisions are recognized when the Group, due to an event occurring before or at the balance sheet date, has a legal or constructive obligation and it is probable that financial benefits must be waived to settle the obligation. Provisions are measured according to Management’s best estimate of the amount whereby the obligation is expected to be settled. Provisions for warranty claims are estimated on a project-by-project basis based on historically realized cost related to claims in the past. The provision covers estimated own costs of completion, subsequent warranty supplies and unsettled claims from customers or subcontractors. Provisions regarding disputes and lawsuits are based on Management’s assessment of the likely outcome settling the cases based on the information at hand at the balance sheet date. Significant assessment by Management Management assesses provisions and the likely outcome of pending and probable lawsuits, etc. on an on-going basis. The outcome depends on future events, which are uncertain by nature. In assessing the likely outcome of lawsuits, etc., Management bases its assessment on internal and external legal assistance and established precedents. Warranties and other provisions are measured on the basis of empirical information covering several years. Together with estimates by Management of future trends, this forms the basis for warranty provisions and other provisions. Long-term warranties and other provisions discounted to net present value takes place based on the future cash flow and discount rate expected by Management. | Annual report 2024 Page 90 4.4 Consolidated notes DKKThousands 2024Warranties Other provisions TotalProvisionsat 1 January 1,427 1,659 3,086Foreignexchange adjustments - 5 5Additions1,904 1,268 3,172Used(1,029) (1,664) (2,693)Reversals(800) - (800)Provisionsat 31 December 1,502 1,268 2,770Thematurity of provisions is specified as follows:Current liabilities1,277 0 1,277Non-current liabilities 225 1,268 1,4931,502 1,268 2,770 DKKThousands 2023Warranties Other provisions TotalProvisionsat 1 January 3,524 4,351 7,875Foreignexchange adjustments 0 (2) (2)Additions1,827 1,659 3,486Used(2,724) (4,349) (7,073)Reversals(1,200) - (1,200)Provisionsat 31 December 1,427 1,659 3,086Thematurity of provisions is specified as follows:Current liabilities1,027 0 1,027Non-current liabilities 400 1,659 2,0591,427 1,659 3,086 Provisions for warranty covers a 1-3-year warranty period. Other provisions relate to provisions for disputes, etc. and are essentially expected to be applied within the next five years. 19. Provisions CONTINUED | Annual report 2024 Page 91 4.4 Consolidated notes 20. Adjustments, consolidated cash flow statement DKKThousands 2024 2023Amortisation and depriciation 6,445 4,511Changein provisions (316) (1,403)Financialitems received and paid 2,990 3,330Other- (73,511)9,119 (67,073) DKKThousands 2024 2023Borrowings1 January 18,548 29,757Repayments(6,847) (18,231)Newborrowings 50,435 7,022Currencyadjustments - -Borrowings31 December 62,136 18,548 Adjustments Change in borrowings and short-term credit facilities | Annual report 2024 Page 92 4.4 Consolidated notes 21. Exchange rate, liquidity and credit risks Accounting policy To measure the expected credit losses, trade receivables and contract assets have been grouped based on shared credit risk characteristics and the days past due. The contract assets relate to unbilled work in progress and have substantially the same risk characteristics as the trade receivables for the same types of contracts. The Group has therefore concluded that the expected loss rates for trade receivables are a reasonable approximation of the loss rates for the contract assets. The expected loss rates are based on the payment profiles of sales over a period of 36 months before 31 December 2024 and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. Trade receivables and contract assetsare written down when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group, and a failure to make contractual payments for a period of longer than 120 days past due. Impairment losses on trade receivables and contract assets are presented as net impairment losses within operating profit. Subsequent recoveries of amounts previously written down are credited against the same line item. Risk management activities in the SKAKO Group mainly focus on financial risks to which the Company is fairly likely to be exposed. In connection with the preparation of the Group’s strategic, budgetary and annual plans, the Board of Directors considers the risks identified in these activities. Financial risks Financial risk management concentrates on identifying risks in respect of exchange rates, credit and liquidity with a view to protecting the Group against potential losses and ensuring that Management’s forecasts for the current year are only to a limited extent affected by changes or events in the surrounding world – be the changes in exchange rates or in interest rates. It is Group policy to exclusively hedge financial risks arising from our commercial activities and not to undertake any financial transactions of a speculative nature. Exchange rate risks With more than 90% of the Group’s sales being invoiced in foreign currencies, primarily EUR, reported revenue is affected by movements in the Group’s trading currencies. The Group does not hedge (systematic) currency risks with financial instruments but seeks to minimize such exchange rate risks by matching positive and negative cash flows in the main currencies as much as possible. The Group conducts ongoing conversion to DKK in connection with the purchase and sale of foreign currency and monitoring of currency exposure. | Annual report 2024 Page 93 4.4 Consolidated notes Below is a sensitivity analysis in respect of exchange rates, given a positive change of 5% in the currencies with the highest exposures. We do not consider a currency risk on EUR. The estimate has been provided on a non-hedged basis. Liquidity risk The Group aims at having sufficient cash resources to be able to take appropriate steps in case of unforeseen fluctuations in cash outflows. We have access to suitable undrawn credit facilities and the liquidity risk is therefore considered to be low. Credit risks The Group’s credit risks relate primarily to trade receivables and contract assets. For large projects we have a signed Letter of Credit from the customer’s bank before we undertake any work. Our remaining customer base is fragmented so credit risks in general only involve minor losses on individual customers. Overall, we therefore estimate that we have no major credit exposure on Group level. The maximum credit risk relating to receivables matches the carrying amount of such receivables. All trade receivables are considered to be paid within one year Trade receivables can be allocated as follows: The Group has two types of financial assets that are subject to the expected credit loss model: • Trade receivables from contracts with customers • Contract assets from plant sales 2024: Potential impact on 2023: Potential impact onDKK ThousandsNet position Change in currencyP/L and Equity P/L and equityEUR47,106 0% 0 0USD2,604 10% 260 78GBP8,894 5% 445 598SEK588 5% 29 0NOK62 5% 3 0MAD18,740 5% 937 712 DKKThousands2024 2023Europe41,813 53,193TheUSA 903 112Africa23,111 4,969Other485 -66,312 58,274 21. Exchange rate, liquidity and credit risks CONTINUED | Annual report 2024 Page 94 4.4 Consolidated notes While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the identified impairment loss was immaterial. The loss allowance as at 31 December 2023 and 31 December 2024 was determined as follows for both trade receivables and contract assets: 31 December 2024 – DKK Thousands The closing loss allowances for trade receivables and contract assets as at 31 December 2023 reconcile to the opening loss allowances as follows: Due 31-120Not Due Due 0-30 daysDue 121-365 Due more thanTotaldays days 1 yearExpectedloss rate 0.6% 1.0% 1.5% 2.5% 57.0%Grosscarrying amount – trade receivables 49,190 5,794 4,464 4,306 7,243 70,997Grosscarrying amount – contract assets 36,429 0 0 0 0 36,429Lossallowance 462 58 67 108 4,129 4,824 31 December 2023 – DKK Thousands Due 31-120 Due 121-365 Due more thanNot Due Due 0-30 daysTotaldays days 1 yearExpectedloss rate 0.1% 0.4% 1.0% 1.9% 30.0%Grosscarrying amount – trade receivables 42,880 5,831 3,226 2,485 8,229 62,651Grosscarrying amount – contract assets 38,203 0 0 0 0 38,203Lossallowance 81 58 43 19 4,315 4,516 DKK ThousandsContract assets Trade receivables2024 2023 2024 20231January – calculated under IFRS 9 139 138 4,377 2,080Increase in loan loss allowance recognized in profit or loss during 139 139 4,685 4,377theyearReceivables written off during the year as uncollectible - - - -Unusedamount reversed (139) (138) (4,377) (2,080)At31 December 139 139 4,685 4,377 21. Exchange rate, liquidity and credit risks CONTINUED | Annual report 2024 Page 95 4.4 Consolidated notes The company’s financial institutions have provided bank guarantees for consignments and prepayments of a total of DKK 61.3m (2023: DKK 28.3m). Towards the company’s primary financial institution, a deposit of DKK 50m (2023: DKK 50m) has been provided with deposit in unsecured claims, stocks, tangible assets and intangible rights. There is a 21-month rent commitment related to a building in Denmark. The minimum rent liability amounts to DKK 3.5m (2023: DKK 2.1m). The Danish subsidiaries of the Group are liable for tax of the jointly taxed income, etc. of the Group. SKAKO A/S is the administrative company of the joint taxation. 22. Contractual liabilities, contingent liabilities and securities 25. Approval and publication At the Board meeting on 12 March 2025, our Board of Directors approved this Annual Report 2024 for publication. The report will be presented to the shareholders of SKAKO A/S at the annual general meeting on 24 April 2025. 24. Events after the balance sheet date There have been no events that materially affect the assessment of this Annual Report 2024 after the balance sheet date and up to today. 23. Related parties SKAKO A/S has no related parties with a controlling interest. Given its share of ownership, Frederik2 ApS are considered to have significant influence. The company’s related parties comprise the company’s Executive Management, Board of Directors and these persons’ related family members. Related parties also comprise companies in which the before-mentioned persons have controlling or common control. In addition, related parties comprise the subsidiaries cf. page 113 in which SKAKO A/S has controlling or significant influence. | Annual report 2024 Page 96 4.4 Consolidated notes The Group’s general accounting policies are described below. In addition to this, specific accounting policies are described in each of the individual notes to the consolidated financial statements. 26. Group accounting policies Generally The consolidated financial statements are presented in compliance with IFRS Accounting Standards (IFRS) as adopted by the EU and Danish disclosure requirements for annual reports published by reporting class D (listed) companies cf. the Danish executive order on IFRS issued in compliance with the Danish Financial Statements Act. The registered office of SKAKO A/S is in Faaborg, Denmark. The consolidated financial statements are presented in Danish kroner (DKK), which is the presentation currency for Group activities and the functional currency for the Parent. The consolidated financial statements are presented on the basis of historical cost except for share-based remuneration which are measured at their fair value. The financial statements for the Parent as well as the Parent’s accounting policies are presented from the consolidated financial statements and are shown on the last part of this Annual Report 2024. The accounting policies remain unchanged for the consolidated financial statements compared to 2023. Effect of new accounting standards New standards, amendments, and interpretations adopted but not yet effective The IASB has issued the following new standards, amendments and new interpretations which could be relevant to SKAKO A/S,but which have not yet been adopted by the EU: • IFRS 18, Presentation and Disclosure in Financial Statements: This new standard replaces IAS 1 and it implements set of new requirements for presentation and disclosures in the financial statements. The new standard requires the income statement to be structured into five categories, while also introducing two new subtotals. Furthermore, the new term “Management Performance Measures (MPM)” is introduced, which must be disclosed in the notes of the financial statements. The new requirements for presentation and disclosures are applicable for all financial statements, including consolidated financial statements, separate financial statements and interim financial statements. The amendment will be effective for financial years beginning on or after 1 January 2027. Early adoption of the amendment is permitted, when approved by the EU. Changes in accounting policies and classification for 2024 No new standards are expected to be implemented in 2024. Distribution costs Distribution costs include costs relating to training, sales, marketing, promotion materials, distribution, bad debts as well as depreciation, amortisation and impairment losses on assets used for distribution purposes. Income statement Income and costs are recognized on an accrual basis. The income statement is broken down by function, and all costs including depreciation, amortization and impairment losses are then charged to production, distribution and administration. Consolidation principles The consolidated financial statements are prepared on the basis of the financial statements for the Parent and its subsidiaries by aggregating uniform items. The financial statements included in the consolidated financial statements are prepared in accordance with the Group’s accounting policies. Intra-Group income, expenses, shareholdings, balances and dividends as well as unrealized intra- Group profits on inventories are eliminated. The accounting items of subsidiaries are recognized 100% in the consolidated financial statements. Consolidated financial statements The consolidated financial statements comprise SKAKO A/S (the Parent) and the enterprises in which the Parent can or actually does exercise control by either directly or indirectly holding more than 50% of the voting rights. Classification discontinued activities A discontinued operation is a component of the entity that has been disposed. The results of discontinued operations are presented separately in the statement of profit or loss. Comparatives in the statement of profit and loss for previous periods are restated to reflect the result of discontinued operations. Definition of materiality IFRS contain extensive disclosure requirements. The Group discloses the information required according to IFRS unless such information is deemed immaterial. Effect of new accounting standards not yet in force Revised and new standards and interpretations issued, but not yet effective or approved by the EU at the time of publication of this Annual Report 2024 have not been incorporated into this report. | Annual report 2024 Page 97 4.4 Consolidated notes Prepaid expenses Prepaid expenses recognized under assets include costs relating to the subsequent financial years. Prepaid expenses are measured at cost. Cash flow from investing activities comprises cash flows from the purchase and sale of intangible, tangible and financial non-current assets. Cash flow from financing activities comprises cash flows from raising and repaying long-term debt, instalments on lease liabilities and bank overdraft. 26. Group accounting policies CONTINUED Cash flow statement The cash flow statement is prepared according to the indirect method and reflects the consolidated net cash flow broken down into operating, investing and financing activities. Cash flow from operating activities includes inflows from the year’s operations adjusted for non-cash operating items, changes in working capital, financial income received and expenses paid, realized foreign currency translation gains and losses and income tax paid. Cash flow from investing activities includes the purchase, development, improvement or sale of intangible assets and property, plant and equipment. Treasury shares On the sales of treasury shares, the purchase price or selling price, respectively, is recognized directly in equity under other reserves (retained earnings). Equity Foreign currency translationreserve includesforeign currency translationadjustments on the translation of financial statements of foreign subsidiaries from their respective functionalcurrencies into Danish kroner. Foreign currency translation adjustments are recognized in the income statement on realizationof the net investment. Hedging reserves include fair value adjustments of derivatives satisfying the criteria for hedging of future transactions.The amounts are recognized in the income statement or the balance sheet in step with recognition of the hedged transactions. Cash and cash equivalents Cash and cash equivalents consist of bank deposits and certain overdrafts, and other liquid assets. Deferred income Deferred income includes income received relating to the subsequent financial year. Deferred income is measured at cost. Financial ratios Financial ratios are calculated as follows: • Gross profit margin = Gross profit x 100 / Revenue • Profit margin = EBIT x 100 / Revenue • Liquidity ratio = Total current assets x 100 / Total current liabilities • Equity ratio = Total equity x 100 / Total assets • Return on equity = Profit for the period x 100 / (Equity this year + equity prior year) / 2 • Financial leverage = Net interest-bearing debt x 100 / Equity • Net debt to EBITDA = Net debt / EBITDA (EBIT less depreciations) • NWC/Revenue = Net working capital x 100 / Revenue • Earnings per share = Profit for the period / Shares in free flow • Equity value per share = Equity / Total shares • Share price = Share price at end of period • Price-book ratio = Share price / Equity per share • Market capitalization = Total number of share x Share price • ROIC = NOPAT / (Invested capital this year + invested capital prior year) / 2 • NOPAT = Profit for the period +/- net financial income • Invested capital = Total assets - net cash and credits - deferred tax assets – non- interest-bearing current liabilities Estimates and judgements On the preparation of the consolidated financial statements, Management makes a number of accounting estimates and judgements. These relate to the recognition, measurement and classification of assets and liabilities. Many items can only be estimated rather than accurately measured. Such estimates are based on the most recent information available on preparation of the financial statements. Estimates and assumptions are therefore reassessed on an ongoing basis. Actual figures may, however, deviate from these estimates. Any changes in accounting estimates will be recognized in the reporting period in which such changes are made. See list of significant estimates and assessments in chapter 3.4 Administrative expenses Administrative expenses include administrative staff costs, office expenses as well as depreciation, amortisation and impairment losses on assets used for administrative purposes. | Annual report 2024 Page 98 4.5 Parent company financial statements 3.5 PARENT COMPANY FINANCIAL STATEMENTS Notes Revenue Other income 16,134 75,000 1,2 Administrative expenses (5,808) (3,078) Operating profit before special items (EBIT) 10,326 71,922 3 Special items - (1,934) Operating profit (EBIT) 10,326 69,988 4, 8 Financial income 1,303 1,915 4 Financial expenses (2,532) (4,888) Profit before tax 9,097 67,015 5 Tax on profit for the year 1,293 2,714 Profit for the year 10,390 69,730 Parent company income statement 2024 2023 DKK Thousands 2024 2023 Notes Profit for the year 10,390 69,730 Other comprehensive income - - Comprehensive income 10,390 69,730 Parent company statement of comprehensive income DKK Thousands | Annual report 2024 Page 99 4.5 Parent company financial statements Notes Leased assets 397 - 8 Tangible assets 397 - 9 Investments in subsidiaries 180,293 164,159 Other receivables - - 10 Deferred tax assets 1,782 1,928 Other non-current assets 182,075 166,087 Total non-current assets 182,472 166,087 Receivables from subsidiaries - 164 Trade receivables 1,429 - Income tax 10,441 1,806 Other receivables 61 60 Prepaid expenses 189 230 Other investments - - Cash 963 126,246 Current assets 13,083 128,506 Assets 195,555 294,593 Parent company balance sheet - 31 December DKK Thousands 20232024 | Annual report 2024 Page 100 4.5 Parent company financial statements Notes Share capital 31,525 31,064 Retained earnings 9,696 128,014 Proposed dividends 7,881 15,532 Total equi ty 49,102 174,610 Leasing 274 - Non -current liabilities 274 - Leasing 129 - Debt to subsidiaries 36,965 117,073 Bank loans and credit facilities 103,944 - Trade payables 416 627 Income tax - - Other liabilities 4,725 2,283 Current liabilities 146,179 119,983 Liabilities 146,453 119,983 EQUITY AND LIABILITIES 195,555 294,593 Parent company balance sheet - 31 December DKK Thousands 20232024 | Annual report 2024 Page 101 4.5 Parent company financial statements Notes Profit before tax 9,097 67,015 11 Adjustments (15,037) (74) Changes in receivables, etc. (1,389) - Change in trade payables and other liabilities, etc. (1,643) (1,225) Cash flow from operating activities before financial items and tax (8,972) 65,716 Interest received (1,303) (1,915) Interest paid 2,532 4,888 Taxes paid and received (4,892) - Cash flow from operating activities (12,635) 68,689 Investment in tangible assets (529) - Cash flow from investing activities (529) - Change in intra-Group balances (79,944) 79,339 Proceeds from leasecontracts 529 - Repayments (126) - Change in short-term bank facilities 103,944 (6,738) Distributed dividends (136,522) (15,532) Cash flow from financing activities (112,119) 57,069 Change in cash and cash equivalents (125,283) 125,758 Cash and cash equivalents 1 January 126,246 488 Cash and cash equivalents 31 December 963 126,246 Breakdown of cash and cash equivalents at the end of the year: Cash 963 126,246 Other investments Cash and cash equivalents at the end of the year 963 126,246 Parent company cash flow statement DKK Thousands 2024 2023 | Annual report 2024 Page 102 4.5 Parent company financial statements DKK Thousands Share capital Retained Earnings Proposed Dividends Equity Equity 1 January 2024 31,064 128,014 15,532 174,610 Extraordinary dividends (121,989) 121,989 - Paid dividends 999 (137.521) (136,522) Increase of share capital 461 461 Comprehensive income in 202 4: Profit for the year 2,509 7,881 10,390 Other comprehensive income Comprehensive income, year 2,509 7,881 10,390 Share -based payment, share warrants 163 163 Equity 31 December 2024 31,525 9,696 7,881 49,102 Parent company statement of changes in equity DKK Thousands Share capital Retained earnings Proposed dividends Equity Equity 1 January 2023 31,064 73,222 15,532 119,818 Distributed interim dividends (15,532) (15,532) Comprehensive income in 2023: Loss for the year 54,198 15,532 69,730 Other comprehensive income 112 112 Comprehensive income, year 54,310 15,532 69,842 Share -based payment, share warrants 482 482 Equity 31 December 2023 31,064 128,014 15,532 174,610 | Annual report 2024 Page 103 4.6 Parent company notes 3.6 PARENT COMPANY NOTES 1. Staff costs Number of employees in 2024: 0 (2023: 0) For information regarding Executive Management and Board of Directors remuneration, including share-based warrant plans, please refer to note 4 and note 5 in the consolidated financial statements. 2.Fee to parent company auditors appointed at the Annual General Meeting The fee for non-audit services delivered by PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab to the parent company amounts to DKK 0.3m (2023: DKK 0.5m) and consists of accounting and tax advisory. DKK Thousands 2024 2023 PwC Statutory audit 824 376 Other assurance engagements 125 - Tax and indirect taxes consultancy 190 119 Other services 146 333 Other audit firms 1,285 828 Statutory audit - - Other assurance engagements - - Tax and indirect taxes consultancy 235 - Other services 106 - 341 - | Annual report 2024 Page 104 4.6 Parent company notes DKK Thousands 2024 2023 Interest from subsidiaries - - Dividends received from subsidiaries - - Reversal of write-down of shares in subsidiaries - - Financial income from financial assets not measured at fair value in the income statement - - Other financial income 1,303 1,915 Financial income 1,303 1,915 Interest to subsidiaries (131) (2,602) Interest on bank debt (1,761) (1,711) Interest on lease debt (26) - Financial expenses on financial liabilities not measured at fair value in the income statement (1,918) (4,313) Other financial expenses (614) (574) Financial expenses (2,532) (4,888) Net financial items (1,229) (2,973) 4. Net financial income 3. Special items There has been no special items in 2024. Special items in 2023 consists of transaction costs for the terminated transaction process with Zefyr Invest and amounting to DKK 1.9m | Annual report 2024 Page 105 4.6 Parent company notes DKK Thousands 2024 2023 Current tax on the profit for the year 1,439 1,806 Adjustment of current tax, prior years - - Change in deferred tax (146) 908 Adjustment of deferred tax, prior years - - Impact on changes in corporate tax rates - - Tax for the period 1,293 2,714 Danish corporate tax rates 1,439 1,806 Effect of tax rates in foreign jurisdictions - - Impact in changes in corporate tax rates - - Tax assets not capitalized (146) 908 Permanent differences and other items - - 1,293 2,714 5. Tax on profit for the year | Annual report 2024 Page 106 4.6 Parent company notes DKK Thousands 2024 2023 Software Software Cost 1 January 907 907 Investments - - Disposals - - Transferred between categories - - Cost 31 December 907 907 Amortization and impairment 1 January 907 907 Disposals - - Amortisation - - Amortization and impairment 31 December 907 907 Carrying amount 31 December - - 6. Intangible assets | Annual report 2024 Page 107 4.6 Parent company notes 7. Tangible assets DKK Thousands Leasehold improvements Operating equipment, fixtures and fittings Total Cost 1 January 2023 341 2,168 2,509 Investments - - - Disposals - - - Transferred between categories - - - Cost 31 December 2023 341 2,168 2,509 Depreciation and impairment 1 January 2023 341 2,168 2,509 Transferred between categories - - - Disposals - - - Depreciation - - - Depreciation and impairment 31 December 2023 341 2,168 2,509 Carrying amount 31 December 2023 - - - DKK Thousands Leasehold improvements Operating equipment, fixtures and fittings Total Cost 1 January 2024 341 2,168 2,509 Investments - - - Disposals - - - Transferred between categories - - - Cost 31 December 2024 341 2,168 2,509 Depreciation and impairment 1 January 2024 341 2,168 2,509 Transferred between categories - - - Disposals - - - Depreciation - - - Depreciation and impairment 31 December 2024 341 2,168 2,509 Carrying amount 31 December 2024 - - - | Annual report 2024 Page 108 4.4 Consolidated notes Lease assets Company cars Total Costs 1 January 2024 - - Additions 529 529 Disposals - - Reclassification - - Exchange rate adjustment - - Costs 31 December 2024 529 529 Depreciation and impairment loss 1 January 2024 - - Depreciation 132 132 Depreciation reversed on disposals - - Exchange rate adjustment - - Depreciation and impairment loss 31 December 2024 132 132 Carrying amount 31 December 2024 397 397 DKK Thousands Lease assets Company cars Total Costs 1 January 2023 - - Additions - - Transferred between categories - - Disposals - - Exchange rate adjustment - - Costs 31 December 2023 - - Depreciation and impairment loss 1 January 2023 - - Depreciation - - Depreciation reversed on disposals - - Exchange rate adjustment - - Depreciation and impairment loss 31 December 2023 - - Carrying amount 31 December 2023 - - DKK Thousands 8. Leases – right-of-use assets | Annual report 2024 Page 109 4.6 Parent company notes DKK Thousands 2024 2023 Cost 1 January 260,534 260,534 Investments - - Disposals - - Cost 31 December 260,534 260,534 Write -down 1 January (96,375) (96,375) Reversal of write-down 16,134 - Write -down 31 December (80,241) (96,375) Carrying amount 31 December 180,293 164,159 9. Investments in subsidiaries Group companies are listed on page 113. | Annual report 2024 Page 110 4.6 Parent company notes DKK Thousands 2024 2023 Deferred tax recognized in the balance sheet: Deferred tax assets 1,782 1,928 Deferred tax liabilities - - Deferred tax, net 31 December 1,782 1,928 Deferred tax, net 1 January 1,928 1,020 Changes in deferred tax (146) 908 Deferred tax, net 31 December 1,782 1,928 Deferred tax assets: Tax losses 1,782 1,928 1,782 1,928 Deferred tax assets not recognized: Property, plants and equipment 205 205 Inventories - - Other items 121 121 Tax losses 2,993 2,847 3,319 3,173 10. Deferred tax Tax losses carried forward are not subject to time limitation. | Annual report 2024 Page 111 4.6 Parent company notes DKK Thousands 2024 2023 Depreciations (132) - Financial items received and paid 1,229 2,973 Release of reserves due to merger in subsidiaries (16,143) - Other - (3,047) (15,037) (74) 11. Adjustments, cash flow statement Adjustments DKK Thousands 2024 2023 Borrowings 1. January - 6,738 Repayments (126) (6,738) New borrowings 104,473 - Currency adjustments - - Borrowings 31. December 104,347 - Change in borrowings and short-term credit facilities 12. Contracts liabilities, contingent liabilities and securities Please refer to note 21 in the consolidated financial statements. As security for SKAKO Vibration Holding A/S’ and SKAKO Vibration A/S’ outstanding account in relation to its primary financial institution, the company has provided an unlimited, joint and several suretyships. Towards the company’s primary financial institution, a company deposit of DKK 50m (2023: DKK 50m) has been provided with deposit in unsecured claims, stocks, tangible assets and intangible rights. The company is jointly taxed with all Danish subsidiaries. The company is jointly and severally liable with the other companies in the joint taxation for Danish corporate taxes and withholding taxes on dividend, interests and royalties within the joint taxation. | Annual report 2024 Page 112 4.6 Parent company notes 14. Events after the balance sheet date Please refer to note 24 in the consolidated financial statements. 15. Accounting policies The financial statements for 2024 of the parent company, SKAKO A/S has been prepared in accordance with IFRS Accounting Standards (IFRS) as adopted by the EU and Danish disclosure requirements for annual reports of listed companies under reporting class D. The financial statements have been prepared in accordance with the historical cost convention, as modified by the revaluation of derivative financial instruments at fair value. The accounting policies for the financial statements of the parent company are unchanged from the last financial year and are the same as for the consolidated financial statements with the following additions. Supplementary accoun ting policies for the paren t company Investments in Subsidiaries Investments in subsidiaries are recognized at cost less impairment losses. Where the recoverable amount is lower than cost, investments are written down to this lower value. Dividends received from investments in subsidiaries and associates are recognized in the income statement in the financial year in which the dividends are declared. Intra-group transactions in the Parent Company Financial Statements Intra-group transactions are recognized in the parent company financial statements at the carrying amount. Accordingly, additions to or disposals of investments are recognized at the carrying amount, and any difference between the carrying amount of net assets and the consideration paid is recognized directly in equity. Comparative figures are not restated. Intercompany balances Intercompany balances which are expected to be settled as part of the normal operating cycle, or where an unconditional right to defer settlement. 13. Related parties Please refer to note 23 in the consolidated financial statements. In 2024, the Parent Company has sold services to primarily to SKAKO Vibration A/S for DKK 2,7m (2023: DKK 11.7m) and paid net interest expenses, cf. note 3. | Annual report 2024 Page 113 Subsidiaries Company name Country Interest SKAKO A/S Denmark Parent SKAKO Vibration Holding A/S Denmark 100% SKAKO GmbH Germany 100 % SKAKO Vibration A/S Denmark 100 % SKAKO Vibration Ltd. UK 100 % SKAKO Dartek S.L. Spain 100 % SKAKO Vibration S.A. France 100 % SKAKO Vibration Succursale Maroc Morocco Branch SKAKO Mineral Maroc Morocco Branch Bygmestervej 2 DK-5600 Faaborg Denmark Tel.: +45 63 11 38 60 skako.dk@skako.com www.skako.com CVR No. 36440414 5.6 Parent company notes Annual reportAuditor's report on audited financial statementsParsePort XBRL Converter2024-01-012024-12-312023-01-012023-12-31529900WNR3U8C847AW24Reporting class DOpinionBasis for Opinion529900WNR3U8C847AW242024-01-012024-12-31cmn:ConsolidatedMember529900WNR3U8C847AW242024-01-012024-12-31529900WNR3U8C847AW242023-01-012023-12-31529900WNR3U8C847AW242024-12-31529900WNR3U8C847AW242023-12-31529900WNR3U8C847AW242022-12-31529900WNR3U8C847AW242023-12-31ifrs-full:IssuedCapitalMember529900WNR3U8C847AW242024-01-012024-12-31ifrs-full:IssuedCapitalMember529900WNR3U8C847AW242024-12-31ifrs-full:IssuedCapitalMember529900WNR3U8C847AW242023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember529900WNR3U8C847AW242024-01-012024-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember529900WNR3U8C847AW242024-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember529900WNR3U8C847AW242023-12-31ifrs-full:ReserveOfCashFlowHedgesMember529900WNR3U8C847AW242024-01-012024-12-31ifrs-full:ReserveOfCashFlowHedgesMember529900WNR3U8C847AW242024-12-31ifrs-full:ReserveOfCashFlowHedgesMember529900WNR3U8C847AW242023-12-31ifrs-full:RetainedEarningsMember529900WNR3U8C847AW242024-01-012024-12-31ifrs-full:RetainedEarningsMember529900WNR3U8C847AW242024-12-31ifrs-full:RetainedEarningsMember529900WNR3U8C847AW242023-12-31SKA:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember529900WNR3U8C847AW242024-01-012024-12-31SKA:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember529900WNR3U8C847AW242024-12-31SKA:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember529900WNR3U8C847AW242022-12-31ifrs-full:IssuedCapitalMember529900WNR3U8C847AW242022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember529900WNR3U8C847AW242023-01-012023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember529900WNR3U8C847AW242022-12-31ifrs-full:ReserveOfCashFlowHedgesMember529900WNR3U8C847AW242023-01-012023-12-31ifrs-full:ReserveOfCashFlowHedgesMember529900WNR3U8C847AW242022-12-31ifrs-full:RetainedEarningsMember529900WNR3U8C847AW242023-01-012023-12-31ifrs-full:RetainedEarningsMember529900WNR3U8C847AW242022-12-31SKA:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember529900WNR3U8C847AW242023-01-012023-12-31SKA:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember529900WNR3U8C847AW242024-01-012024-12-31cmn:ConsolidatedMember1529900WNR3U8C847AW242024-01-012024-12-31cmn:ConsolidatedMember2529900WNR3U8C847AW242024-01-012024-12-31cmn:ConsolidatedMember1529900WNR3U8C847AW242024-01-012024-12-31cmn:ConsolidatedMember2529900WNR3U8C847AW242024-01-012024-12-31cmn:ConsolidatedMember3529900WNR3U8C847AW242024-01-012024-12-31cmn:ConsolidatedMember4529900WNR3U8C847AW242024-01-012024-12-31cmn:ConsolidatedMember1529900WNR3U8C847AW242024-01-012024-12-31cmn:ConsolidatedMember2529900WNR3U8C847AW242023-01-012023-12-31cmn:ConsolidatedMemberiso4217:DKKiso4217:DKKxbrli:sharesxbrli:pure