Annual Report (ESEF) • Mar 18, 2022
Preview not available for this file type.
Download Source File5493009S961JPI21WN662021-01-012021-12-315493009S961JPI21WN662020-01-012020-12-31ifrs-full:RetainedEarningsMember5493009S961JPI21WN662020-01-012020-12-31ifrs-full:EquityAttributableToOwnersOfParentMember5493009S961JPI21WN662020-01-012020-12-31ifrs-full:NoncontrollingInterestsMember5493009S961JPI21WN662020-12-31ifrs-full:IssuedCapitalMember5493009S961JPI21WN662020-12-31ifrs-full:AdditionalPaidinCapitalMember5493009S961JPI21WN662020-12-31ifrs-full:RetainedEarningsMember5493009S961JPI21WN662020-12-31ifrs-full:EquityAttributableToOwnersOfParentMember5493009S961JPI21WN662020-12-31ifrs-full:NoncontrollingInterestsMember5493009S961JPI21WN662021-01-012021-12-31ifrs-full:RetainedEarningsMember5493009S961JPI21WN662021-01-012021-12-31ifrs-full:EquityAttributableToOwnersOfParentMember5493009S961JPI21WN662020-01-012020-12-315493009S961JPI21WN662021-01-012021-12-31ifrs-full:NoncontrollingInterestsMember5493009S961JPI21WN662021-12-31ifrs-full:IssuedCapitalMember5493009S961JPI21WN662021-12-31ifrs-full:AdditionalPaidinCapitalMember5493009S961JPI21WN662021-12-31ifrs-full:RetainedEarningsMember5493009S961JPI21WN662021-12-31ifrs-full:EquityAttributableToOwnersOfParentMember5493009S961JPI21WN662021-12-31ifrs-full:NoncontrollingInterestsMember5493009S961JPI21WN662020-12-315493009S961JPI21WN662019-12-315493009S961JPI21WN662021-12-315493009S961JPI21WN662019-12-31ifrs-full:IssuedCapitalMember5493009S961JPI21WN662019-12-31ifrs-full:AdditionalPaidinCapitalMember5493009S961JPI21WN662019-12-31ifrs-full:RetainedEarningsMember5493009S961JPI21WN662019-12-31ifrs-full:EquityAttributableToOwnersOfParentMemberiso4217:SEKiso4217:SEKxbrli:shares ELANDERS’ ANNUAL AND SUSTAINABILITY REPORT 2021 P r i n t e d o n RECYCLED PAPER R e a d m o r e o n p a g e 1 3 1 100% Contents ELANDERS 2021 4 The year in summary 6 CEO comments OPERATIONS 10 Business concept, goals and strategies 12 Our value creation 14 External trends 16 Our business model 18 Our customers 20 Our contribution to a more sustainable world 22 Our focus areas within sustainability 24 Inside Elanders – Interviews 36 Five years in summary SHARE INFORMATION 40 Share information and ownership structure AUDITED ANNUAL REPORT 43 Board of directors’ report 47 – Risks and uncertainty factors 50 – Corporate governance report 55 – Sustainability report 66 Group 66 – Financial reports 70 – Notes 102 Parent company 102 – Financial reports 106 – Notes 115 Proposed appropriation of profits 116 Auditor’s report OTHER INFORMATION 120 Reconciliation alternative performance measures 122 Financial definitions 123 Specific terms 124 Board of directors 126 Group management, auditors and nomination committee 128 Contact Elanders 130 Annual general meeting and calendar The business is mainly run through two business areas, Supply Chain Solutions and Print & Packaging Solutions. Sustainability is an integrated part of Elanders’ business and strategy and Elanders considers it a responsibility and a business opportunity that provides great opportunities to create value and improve profitability. Not only for Elanders or the Group’s customers but for society at large. The demands regarding CSR made on major, multinational companies are just as high for their partners. Elanders’ sustainability work is largely governed by the very high demands made by customers who in their own environmental and quality documentation stipulate requirements that suppliers must meet as well. Elanders has approximately 7,000 employees and operates in some 20 countries on four continents. The most important markets are China, Germany, Singapore, Sweden, the United Kingdom, and the USA. Major customers are active in the areas Automotive, Electronics, Fashion & Lifestyle, Health Care & Life Science and Industrial. FROM END TO END AND BEYOND Delivering sustainable solutions Elanders is a global logistics company with a broad range of services of integrated solutions in supply chain management. Fashion & Lifestyle Automotive Industrial Health Care & Life Science Supply Chain Solutions Print & Packaging Solutions Electronics Elanders is one of the leading companies in the world in Global Supply Chain Management. Our services include taking responsibility for and optimizing customers’ material and informa- tion flows, everything from sourcing and procurement combined with warehousing to after sales service. Through its innovative force and global presence, the business area Print & Packaging oers cost-eective solutions that can handle custo- mers’ local and global needs for printed material and packaging, often in combination with advanced order platforms on the Internet, value-added services and just-in- time deliveries. Major customer segments Business areas GERMANY 45 locations 3,323 employees USA 10 locations 949 employees CHINA 12 locations 503 employees SINGAPORE 3 locations 496 employees UNITED KINGDOM 4 locations 163 employees SWEDEN 5 locations 152 employees NETHERLANDS 7 locations 146 employees BRAZIL 1 location 52 employees ROMANIA 1 location 5 employees CANADA 1 location 4 employees RUSSIA 1 location 2 employees CZECH REPUBLIC 5 locations 323 employees HUNGARY 4 locations 318 employees POLAND 3 locations 307 employees INDIA 2 locations 173 employees AUSTRIA 1 location 44 employees MEXICO 1 location 31 employees ITALY 1 location 22 employees TAIWAN 1 location 6 employees FROM END TO END AND BEYOND Delivering sustainable solutions Distribution & Outbound Services Life Cycle Management Procurement & Inbound Services Production & Assembly Retail E-commerce Consumers Factories Hospitals Services Recipients Net sales, MSEK , Number of employees , m 2 of production and warehouse space ,, Number of locations ELANDERS 2021 4 ANNUAL AND SUSTAINABILITY REPORT 2021 Organic growth in Europe in Fashion & Lifestyle >30% ELANDERS 2021 – THE YEAR IN SUMMARY Elanders experienced high organic growth during the year, primarily in the business area Supply Chain Solutions. At the same time several acquisitions have been made in fields that Elanders has identified as areas with discernable underlying growth; online sales, Life Cycle Management, outsourcing of logistic services and online print. The acquisition of Bergen Logistics in November 2021 provides Elanders with a completely new platform and opportunities to grow with existing customers on the North American market. The semiconductor shortage that primarily affected customer segments Automotive, Electronics and Industrial, had a negative impact on Group operations and the result. The shortage led to irregular capacity utilization in production when customers shut down or added shifts on short notice. Despite a weaker second half-year compared to last year, largely due to the semiconductor shortage, 2021 was Elanders’ best year ever in terms of result, clearly proving how robust the Group’s business model is. 2021 IN SUMMARY Just as the COVID-19 pandemic characterized 2020, the semiconductor shortage and continued pandemic overshadowed 2021. This led to disturbances in the global supply chain, which in turn had a negative impact on Group operations to differing degrees during various periods. At the same time, the year has also meant high growth, both organically and through acquisitions. THREE YEAR OVERVIEW Net sales, MSEK EBITDA, MSEK EBITA exl. IFRS 16, MSEK EBITA, MSEK EBITA adjusted, MSEK Result after financial items, MSEK Result after tax, MSEK Earnings per share, SEK ) Cash flow from operating activities per share, SEK Equity per share, SEK Dividend per share, SEK ) – EBITA-margin, % EBITA-margin adjusted, % Return on total assets, % Return on equity, % Return on capital employed, % Net debt/EBITDA ratio, times Net debt/EBITDA ratio excl. IFRS16, times Debt/equity ratio, times Equity ratio, % Average number of outstanding shares, thousands ) Thereisnodilution ) Proposedbytheboard ForReconciliationAlternativePerformanceMeasuresandFinancialDefinitionsseepages– 5 ANNUAL AND SUSTAINABILITY REPORT 2021 ELANDERS 2021 – THE YEAR IN SUMMARY OPERATING CASH FLOW EXCLUDING ACQUISITIONS PER QUARTER NET SALES PER QUARTER ADJUSTED EBITA AND ADJUSTED EBITA-MARGIN Supply Chain Solutions is Elanders’ largest business area and makes up three-fourths of the Group. This is the area where we see big growth potential going forward. The market is expanding, driven by a growing global middle class. New regulations and changing behavior patterns will probably have a major impact on future logistic flows, which puts high demands on actors that want a piece of this market. The business area Supply Chain Solutions experienced high demand in every customer segment throughout 2021, even though customer segments Automotive, Electronics and Industrial had problems with supplies of semiconductors and other disturbances in their supply chain. Both these factors had a negative impact on profitability. Supply Chain Solutions Fewer pandemic restrictions allowed more stores to open, leading to greater demand, particularly in customer segment Fashion & Lifestyle. This segment is now Elanders’ largest, if total annual net sales is included for the recent acquisition Bergen Logistics. Demand in online sales continued to be strong and in Europe organic growth surpassed 30 percent. The demand was so high the Group was forced to turn down several requests. However, the new acquisitions have reinforced the Group with the capacity it needs. Despite fewer pandemic restrictions and a return to a more normal life, the market for business area Print & Packaging Solutions continues to be tough. The market, where some actors give up and others merge, is being successively consolidated. For Elanders it creates opportunities to gain market shares while the shift to digital print and more recipient-adapted products, instead of traditional oset print with large editions, progresses. Several of the business area’s major customers that are part of customer segments Automotive and Industrial had serious problems with supplies of semiconductors in 2021, which in turn aected Elanders’ profitability in this business area. Print & Packaging Solutions Investments continue in online print, which is one of the few areas in the graphic industry showing organic growth. The acquisition of Schätzl Druck is one of these. Schätzl is specialized as a subcon- tractor in online print. Examples of products they manufacture are personalized and recipient-adapted children’s books, invitations, photo products and even smaller editions of books and catalogues. With the Schätzl acquisition Elanders becomes one of the utmost leading actors in Europe in online print. Furthermore Elanders continues to work on adding supply chain management services to printing plants, which provides customers with even more value while improving Group profitability. Operating cash flow, MSEK Operating cash flow, MSEK QQQQ Net sales, MSEK Net sales, MSEK QQQQ EBITA adjusted, MSEK EBITA adjusted, MSEK EBITA-margin adjusted, % EBITA-margin adjusted, % RörelseresultatMkr RörelseresultatMkr QQQQ % % % % % % Rörelsemarginal Rörelsemarginal 6 ANNUAL AND SUSTAINABILITY REPORT 2021 ELANDERS 2021 – CEO COMMENTS Despite the break-out of the COVID-19 pandemic last year Elanders entered 2021 with a strong financial position. This was a big boost for our acquisition work which has indelibly characterized the year. Meanwhile we have continued to build our business organically and intensified our sustainability work. A vital year ACQUISITIONS MADE THEIR MARK T hanks to Elanders’ strong balance sheet in 2021 we were able to make four important acquisitions in line with our strategy to grow in the fields outsourcing of supply chain services, online sales, online print and Life Cycle Management with a focus on circular economy. In general the year has also been characterized by the recovery of demand for our services. However, the semi- conductor shortage led to disturbances in material supply chains for many of our customers and even for us, as sub- contractors to these customers. Both our business areas were affected negatively, but Supply Chain Solutions was hit hardest and in particular customer segments Automotive, Electronics and Industrial. Despite this fly in the ointment we are really pleased to present our best year ever and note that the underlying demand from customers for our services continues to be very strong. CONTINUED STRONG FINANCES Elanders has been able to maintain its strong financial position during 2021. In the beginning of the year we built up our working capital as a result of our customers’ recovery after the lockdowns everywhere last year. Despite this, our underlying cash flow is stable. We refinanced the Group during the year and secured a new long-term credit agreement with better terms than previously. This provides the Group with more room to maneuver. Even though we had to manage the semiconductor shortage as well as higher shipping and material prices, we closed the year with seven percent organic growth. Furthermore, our growth continues to be profitable, evident in the fact that the result before tax this year was 16 percent higher than in 2020, which was already a year of improved profitability for the Group. SUPPLY CHAIN SOLUTIONS Strong demand has dominated the year in the business area Supply Chain Solutions. However, the previously mentioned semiconductor shortage meant that several of our customers periodically had to slow their production rate and adjust it according to access to semiconductors. This primarily impacted customer segments Automotive and Industrial and resulted in constant changes in delivery patterns and very uneven capacity utilization in our production apparatus. Some of our customers in Electronics were affected as well. On the other hand, we continued to grow in Fashion & Lifestyle in Europe mainly due to the strong growth of our customers in online sales. We experienced a considerable upswing from our customers during the year with lots of inquiries from both existing and new customers, especially in Fashion & Lifestyle. We were able to quickly fill the new facility in Oberhausen in northern Germany with orders for new customers. Focusing on identifying and winning Scandi- navian customers in Fashion & Lifestyle that are expand- ing in Europe we have attracted a number of new, highly interesting customers to our operations on the Continent. This underlines the importance of our strategy to have a global offer in Fashion & Lifestyle and it also strengthens our organic growth. Combined with our existing network of units in Europe and Asia the acquisition of the American Bergen Logistics means that we can now offer both global and local contract logistics solutions worldwide (read more on pages 26–27). Bergen Logistics is extremely sophisti- cated and maintains a very high standard regarding its own developed IT systems and processes, which allows them to have a new customer up and running within two to four weeks. With good profitability, the company handles hundreds of customers in the same facility. We continued our efforts to improve margins in customer segments Automotive and Industrial in 2021 by optimizing processes and renegotiating unprofitable busi- ness. In some cases we even turn down contract renewals when they are not sufficiently profitable. However, the changes currently taking place in Automotive open the door for new, interesting business. For instance, during the year we won two projects comprising warehousing, preassembling and delivering battery cells for two premium car models. We also see enormous potential for our customer segments Electronics and Health Care & Life Science in regards to both expanding existing contract logistics solutions and continuing to develop our offer in Life Cycle Management. These acquisitions of the Swedish ELANDERS 2021 – CEO COMMENTS We are really pleased to present our best year ever and note that the underlying demand from customers for our services continues to be very strong. MAGNUS NILSSON President and Chief Executive Ocer 8 ANNUAL AND SUSTAINABILITY REPORT 2021 ELANDERS 2021 – CEO COMMENT Even though we had to manage the semiconductor shortage as well as higher shipping and material prices, we closed the year with seven percent organic growth. Furthermore, our growth continues to be profitable, evident in the fact that the result before tax this year was 16 percent higher than in 2020, which was already a year of improved profitability for the Group. 9 ANNUAL AND SUSTAINABILITY REPORT 2021 companies ReuseIT in 2021 and Azalea Global IT in 2020 have increased our capacity in Renewed Tech market (read more on pages 34–35). In Renewed Tech we, among other things, prolong the useful life of our customers’ worn-out IT equipment, which has a positive impact on the environment and is a vital part of our sustainability work. With the acquisition of the Dutch Eijgenhuijsen we further broadened our offer in Life Cycle Management (read more on pages 28–29). Eijgenhuijsen is a leading actor on the Netherlands market in special transportation, installation, service and retrieval of advanced technical equipment with sensitive electronics or components. We are currently opening a new unit in Germany for our customers in Health Care & Life Science. In this facility we will be able to offer warehousing, packing and plucking, cold storage and a service center for repa- ration of medical equipment. Orders for our new clean room in Singapore are on the rise and during the year we have added several new, interesting customers. One of the things we do in this room with a controlled and completely sterile environment is assemble test kits for COVID-19. PRINT & PACKAGING SOLUTIONS Even in Print & Packaging Solutions the semiconductor shortage created problems for a lot of customers in 2021. Lower vehicle production led to less demand for manuals for both cars and trucks. During the year we continued to convert more units to focus primarily on digital print, but we have also expanded our capacity to provide logistics services in order to compensate for diminishing print volumes. Organic net sales contracted due to lower freight forwarding volumes for subscription boxes. We continued to invest in the growth area online print where we made an important acquisition of the German company Schätzl (read more on pages 32–33). It is a highly efficient, completely digital print company with one hundred percent focus on being the optimal subcontractor to different kinds of actors in online print. The acquisition is an important component in our exist- ing capacity in this field and it equips us for continued growth. All in all we are really pleased with the business area and our performance is clearly better than most of the competition. GREATER FOCUS ON SUSTAINABILITY In order to be competitive today it has become increas- ingly vital to have a sustainable supply chain. At Elanders we work continuously throughout the entire Group to reduce our consumption of energy and water as well as lower emissions of greenhouse gases. Sustainable business also includes proper business ethics and we regularly hold digital courses in regulatory compliance for our employees. We have also heavily invested in resources to develop sustainable services for our customers. As part of our concept with end-to-end solutions we contribute to ensur- ing the right quality and prolonging the useful life of our customers’ products with extra services such as quality control, assembly, after-sales, reparation and recycling/ reuse. Recycling and renovating equipment to sell on the second-hand market as we do for IT products contributes actively to reducing customers’ climate impact. We will continue to invest in this area and hope to develop similar concepts in other customer segments as well. During the year we have intensified our sustainability work by recruiting Nathalie Bödtker-Lund as our first Sustainability Director at Group level (read more on pages 24–25). In 2021 we began implementing a global digital platform that facilitates collation of sustainability data from all our facilities worldwide. This will make it possible to register our climate emissions in a standard- ized and uniform manner. We are also working on prepa- rations for presenting our sustainability reporting accord- ing to the standard GRI (Global Reporting Initiative). STRONG PLATFORM FOR THE FUTURE In conclusion, 2021 was a year when acquisitions made their mark on Elanders and I’m very pleased with our four important acquisitions. They span over areas with an enormous potential for organic growth going forward. Together with all the new customers we have success- fully recruited during the year Elanders has a very strong platform to build on in 2022. Now the work to successively improve our margins and prioritize business with a high level of value-added services continues. Going forward Elanders still sees a lot of opportunities to develop our business through new acquisitions. We will be on the lookout for interesting companies that supplement or develop our offer in some way. I want to end with a heartfelt thanks to all our employees that daily do their best to deliver at the highest level and thereby contribute to the continued success of Elanders. I also want to thank our customers for their trust in us and look forward to developing Elanders together into one of the world’s leading companies in supply chain management solutions. Magnus Nilsson President and Chief Executive Officer ELANDERS 2021 – CEO COMMENT 10 ANNUAL AND SUSTAINABILITY REPORT 2021 OPERATIONS – BUSINESS CONCEPT, GOALS AND STRATEGIES FOCUS ON FOUR GROWTH AREAS Elanders strives to have a balanced mix of customers, those with a high growth potential but which are less affected by oscillations in business cycles. Elanders has identified four areas where there is clear under- lying growth: online shopping, Life Cycle Management, outsourcing of logistic services and online print. Elanders intends to continue its growth in these four sectors. FROM LOCAL TO GLOBAL CUSTOMERS AND ACQUISITIONS Elanders develops with its customers. Global business often evolves through building up solid relationships when local needs are met and optimized through good solutions that are then implemented globally for customers. As the Group expands its capacity to meet customers’ needs on new geographic markets expands, which deep- ens customer relations. In addition to developing existing business, Elanders will continue to acquire new businesses that have the potential to increase sales, broaden its customer base, and complement its existing offer. An important criteria for acquisitions is that they provide access to new or further develop geographic markets or customer segments. Elanders’ acquisition strategy primarily priori- tizes acquisitions in the four above-named growth areas. Acquisitions within these areas will help the Group to grow while improving profitability. The objective is that acquisitions always broaden or complement Elanders’ range and, if possible, provide further niche expertise such as in Life Cycle Management where the company can actively contribute to a better and more sustainable society. Elanders has a particular focus on advanced logistic solutions with a large portion of value-added services. Together with them Elanders develops customers’ busi- ness, strengthens their competitiveness and makes their supply chain more sustainable. Managing the supply chain optimally reduces resource consumption in trans- portation, production and warehousing, which makes customers more cost-efficient and sustainable. BUSINESS CONCEPT Elanders is a global and strategic partner to customers in their business-critical processes. Its goal is to be a leader in global end-to-end solutions in supply chain management and best at meeting customers’ demands on efficiency and deliveries while focusing on sustainability. Elanders helps customers with their business-critical processes, locally and globally, through integrated and customized solutions for managing all or parts of their supply chains. At the same time customers’ climate foot- print is reduced by optimizing both material and product flows. FINANCIAL TARGETS To achieve its long-range financial targets and consis- tently deliver an increase in value and higher return to its shareholders year after year, Elanders continually devel- ops its offer to customers. A sustainable business model and new and continually improved services in combina- tion with innovative technology form a good platform for continued growth and development as well as greater value for shareholders. Elanders delivers Year Company Services 2021 BergenLogistics SupplyChainManagement 2021 Eijgenhuijsen LifeCycleManagement 2021 SchätzlDruck Onlineprint 2020, 2021 AzaleaITReuseIT LifeCycleManagement 2016 LGI SupplyChainManagement 2014 MentorMedia SupplyChainManagement Strategic acquisitions Elanders’ overarching goal is to be a leader in global solutions within supply chain management in a connected and sustainable world. LONG RANGE PROFITABILITY IN A NEW ERA Mål- Omsättningstillväxt – Mål- Omsättningstillväxt Mål- Omsättningstillväxt 11 ANNUAL AND SUSTAINABILITY REPORT 2021 Goal achieved Goal not achieved Goal OPERATIONS – BUSINESS CONCEPT, GOALS AND STRATEGIES The new goals should be able to reach within a few years. Long-term financial targets NET SALES GROWTH, % 3–5 percent annually over a business cycle EBITA MARGIN, % >7 percent NET DEBT/EBITDA The ratio should be under <2.5 At year-end 2019/20, Elanders established new long-range financial goals because the implementation of IFRS 16 affected how the previous goals were calculated. The new financial goals are as follows: Elanders has identified four areas where there is clear under lying growth: online shopping, life cycle management, online print and outsourcing of logistic services. Elanders’ greatest growth opportunities E-COMMERCE E-commerce’ share of global commerce 1) LIFE CYCLE MANAGEMENT Size of market for used IT equipment 2) ONLINE PRINT Online print vs. traditional print 3) OUTSOURCING % of logistics services that is outsourced 4) E-commerce opportunity, 80% Global e-commerce, 20% ) SourceThird-partyindustry research 2020 US $ 12,5 billion 2026 US $ 25 billion ) SourceThird-partyindustry research General print market, 80% Online print, 20% ) Sourcezipconconsultingand managementestimates RepresentNorthAmericaand Europe Currently insourced US $ 300 billion, 70% Outsourced US $ 130 billion, 30% ) SourceThird-partyindustry researchRepresentsNorth AmericaandEurope Strong growth opportunitiesin boththeFashion &Lifestyleand theElectronics area Onlineprint hasayearly growthof % Growth opportunities withinallour customer segments 12 ANNUAL AND SUSTAINABILITY REPORT 2021 OPERATIONS – OUR VALUE CREATION HUMAN CAPITAL • Approximately 7,000 employees in some 20 countries FINANCIAL CAPITAL • Equity of SEK 3.3 (2.9) bn • Total assets of SEK 11.8 (8.6) bn RELATIONAL CAPITAL • Thousands of customers with strong local and global brands • Long-term investors / owners • Multi-cultural operations employees in some 20 countries ~7,000 HOW WE CREATE VALUE By continuously developing our offer to customers, streamlining supply chains and expanding into new markets and segments through organic growth and acquisitions, we create value for all our stakeholders. Elanders is a global logistics company with a broad range of services of integrated solutions in supply chain manage ment. The business is mainly run through two business areas, Supply Chain Solutions and Print & Packaging Solutions. The Group has approximately 7,000 employees and operates in some 20 countries on four continents. The most important markets are China, Germany, Singapore, Sweden, the United Kingdom, and the USA. Major customers are active in the areas Automotive, Electronics, Fashion & Lifestyle, Health Care & Life Science and Industrial. STRATEGY Elanders should be a leader in global end-to-end solutions in supply chain management and be best at meeting customer demands on eciency and delive- ries focusing on sustainability. THE STRATEGY IS BUILT ON: • continuously developing our oer, • integrated total solutions, • implementation of innovative technology, • continuous growth, partly through organic growth, partly through acquisitions. We have identified a number of mega trends we believe could potentially impact Elanders’ business in the future. By under- standing them we can develop our oer and create a plat form to keep and strengthen the leading position that Elanders has on selected markets and thereby generates long-term profitable growth. Elanders Our resources Trends SUSTAINABILITY GLOBALIZATION AND URBANIZATION INCREASED E-COMMERCE INCREASED OUTSOURCING MANUFACTURED CAPITAL • > 100 sites with more than 1,000,000 m 2 production and warehouse space • Existing machinery P R O C U R E M E N T & I N B O U N D S E R V I C E S P R O D U C T I O N & A S S E M B L Y L I F E C Y C L E M A N A G E M E N T D I S T R I B U T I O N & O U T B O U N D S E R V I C E S 13 ANNUAL AND SUSTAINABILITY REPORT 2021 OPERATIONS – OUR VALUE CREATION Elanders manages and optimizes the flow of raw materials, components, final products, money, and information through every step of production – from suppliers and manufacturers to end consumers. We provide our customers with comprehensive solutions for the entire supply chain through a single contact. Business model Value creation Customer segments Automotive, Electronics, Fashion & Lifestyle, Health Care & Life Science, Industrial EMPLOYEES • Paid salaries of SEK 2.2 (2.0) bn • Safe and sustainable workplaces • Ongoing training and education INVESTORS AND FINANCIERS • Operating result of MSEK 580 (546) • Paid interest of MSEK 92 (110) • Dividend policy of 30–50% of result after tax SOCIETY AND THE ENVIRONMENT • Lower environmental impact through more ecient logistical flows • Paid income tax and social security contributions of around MSEK 524 (420) CUSTOMERS • > 1 million deliveries to end customers • Considerable savings through sustainable and ecient material and component flows • Innovative supply chain management solutions 14 ANNUAL AND SUSTAINABILITY REPORT 2021 OPERATIONS – EXTERNAL TRENDS IN SYNC WITH THE WORLD AROUND US Development and changes G reater globalization causes new trends to spread quickly all over the world and increases the de- mand for international products. Growing cities become financially more important and commerce can be aected by transportation limiting laws, regulations and fees. At the same time urbanization contributes to more ecient deliveries as more people are gathered in one location. These developments also increase the need for ecient freight forwarding. The trend in national and regional shipping is shifting towards network solutions with big logistics terminals and consolidated repacking warehouses with automated goods management. WHAT ELANDERS DOES Elanders’ strong position in Europe, Asia and North and South America provides a good base for handling greater inter- national commerce and competition as well as customers’ needs for global solutions. Elanders follows customers out into the world when they need help in a new location and continually increases its geographic presence through acquisitions, expanded networks, new forms of col- laboration and opening up new facilities. Through unique logistics solutions with networks and consolidation points for goods, Elanders is able to reduce heavy trac in city centers and at the same time streamline and optimize distribution. Globalization and urbanization I n the worldwide drive to create a sustainable society the challenges are enormous, particularly regarding the ever-growing global flow of goods. Current demands for reduced emis- sions, lower energy consumption, greater circularity and recycling will push existing structures to their limits. Future supply flows will have to change fundamentally to be sustainable. This greatly increases the complexity in the supply chain flow, putting even higher demands on intelligent IT solutions, automation and control. WHAT ELANDERS DOES Sustainability aspects permeate our work on all levels and essentially Elanders’ operations are all about optimizing customers’ flows in the best possible way while minimizing costs and climate impact. A good example of this is Elanders’ Renewed Tech that is part of the service area Life Cycle Management. Instead of scrapping cell phones, computers, com- puter screens and printers Elanders can restore them on behalf of our customers and sell them on the second-hand market. This extends the life of the products con- siderably and contributes to a sustainable society. Sustainability 15 ANNUAL AND SUSTAINABILITY REPORT 2021 OPERATIONS – EXTERNAL TRENDS B y outsourcing parts of, or the entire supply chain, companies enhance their delivery reliability while reducing overhead in plants, personnel and systems. Shifting invest- ments and risks over to their logistics partner this way gives companies the strength to fully concentrate on their core business. WHAT ELANDERS DOES Demand for ecient supply chain services increases with greater outsourcing. By using multi-sites where several custom- ers and similar operations are combined, Elanders can even out fluctuations in volumes and create scale advantages. The Group also has expertise in contract logistics and oers advanced end-to-end solutions where we take care of the prod- uct directly from the customer’s supplier and deliver it to the end customer. Increased outsourcing A ll over the world consumers have changed their purchasing habits and begun to buy more and more online. This development has accelerated and spread to more markets in conjunction with the COVID-19 pandemic. Even if bricks and mortar shopping does make a comeback after the pandemic, the unanimous opinion is that the shift is here to stay. Escalating online sales change what is needed in logistic services, and in many cases create a new direct relation to the end customer where, in addition to logistics, webshops, customer service and financial transactions for example have to be handled optimally. WHAT ELANDERS DOES Elanders oers specialized online sales solutions and a number of value-adding services that make it easier for custom- ers to meet consumers’ new purchasing habits. This may include the creation of the customer’s webshop, including, for example, content production, customer service and financial services. Increased e-commerce Electronics Health Care & Life Science Procurement & Inbound Services • Sourcing & Procurement • Customs Services • Freight Solutions • Warehouse & Inventory Management Production & Assembly • Cross Docking • Quality Control • Assembly & Testing • Production Distribution & Outbound Services • Pick & Pack • Consolidation & Transit • Global & Local Deliveries • JIS (Just-in-Sequence) • E-commerce Fashion & Lifestyle Automotive Industrial 16 ANNUAL AND SUSTAINABILITY REPORT 2021 OPERATIONS – OUR BUSINESS MODEL STANDS THE TEST OF TIME A business model that Elanders is a global logistics company that offers a broad range of services of integrated solutions in supply chain management. Sustainability is an intrinsic part of Elanders’ business and strategy. Elanders considers it both a responsibility and a business opportunity that opens the door wide to improved profitability and creating value. E landers contributes to increasing customers’ pro- ductivity, profitability and sustainability in both single services and tailor-made total solutions. Elanders’ customers generally fit into one of the segments Automotive, Electronics, Fashion & Lifestyle, Health Care & Life Science or Industrial. Elanders can support them with services through every step of a product’s lifecycle, from the moment product compo- nents go into production until they have served their final purpose and are ready for recycling. Elanders manages and optimizes the flow of raw materials, components, finished products, money and information throughout the product’s entire lifecycle for customers. Elanders’ offer includes handling everything from order management, procurement, purchasing components and warehousing to production logistics, manufacturing, con- figuration, quality control and delivery. The Group also handles payment flows, synchronizing purchasing and warehousing with demand, and after-sales service such as managing returned or worn-out products for recycling or resales. Read more about how our large customer segments provide long- term growth on pages 18–19. Life Cycle Management • Service & Installation • Reverse Logistics • Redistribution • Warranty Handling • Spare Parts • Repair & Refurbishment • Renewed Tech Retail E-commerce Consumers Factories Hospitals 17 ANNUAL AND SUSTAINABILITY REPORT 2021 OPERATIONS – OUR BUSINESS MODEL Elanders also offers value-added services connected to supply chains tailored to individual customers’ needs and desires - for example installation, test, reparation, off and on loading and repackaging of products. In online shopping Elanders offers to, in combination with logistic services, create and axel responsibility for customer’s webshops including content production and management, customer service and financial services. The Group also provides global total solutions within print that include everything from the production of printed matter and packaging to other related services such as kitting and packing for just-in-time or sequence deliveries. All of this is run efficiently and flexibly. Most of the growth in graphic services is in online print where Elanders has both its own, efficient order platforms as well as delivers printed matter to other well-established companies. Read more about how our services contribute to a more sustainable world on pages 64–65. 18 ANNUAL AND SUSTAINABILITY REPORT 2021 OPERATIONS – OUR CUSTOMERS Fashion & Lifestyle The industry includes some of the largest brands in the world and digital channels are trending over tra- ditional sales in stores. Many customers are looking for a partner that can take an extensive and com- prehensive responsibility and be deeply integrated into their e-commerce and other business. 30% (15%, 2020) Electronics Consumption of electronics is on the rise because of a growing middle class and lower prices for home electronics. At the same time, the industry is facing more stringent demands on resource eectiveness and sustainability. 30% (35%, 2020) FIVE LARGE CUSTOMER SEGMENTS Elanders is primarily focused on five large customer segments that show long- term growth: Automotive, Electronics, Fashion & Lifestyle, Health Care & Life Science and Industrial. Growth prospects: High Growth prospects: High Business cycle sensitivity: Low Business cycle sensitivity: Medium 19 ANNUAL AND SUSTAINABILITY REPORT 2021 OPERATIONS – OUR CUSTOMERS Managing returns, recycling and reuse of products are becoming increasingly important in supply chain manage- ment. Growing demands on industrial manufacturers re- quire them to have low manufacturing costs, high product quality, short lead times and high delivery precision. Con- trol and eciency at every stage is a prerequisite for busi- nesses to be competitive and profitable. From production to the after-sales market, logistics are a key factor. Industrial 10% (15%, 2020) Health Care & Life Science A heavily regulated industry that is growing due to factors such as an aging population, lifestyle diseases, and rapid technological developments. Demands on quality in processes and management are often extre- mely high. A quality-ensured and broad oer that covers customers’ needs has considerable potential in this area. < 5% (5%, 2020) Automotive The automotive industry is going through a period of significant and challenging transitions. As develop- ments shift to electric cars, self-driving vehicles and demands for climate neutrality, customers want to focus on their core business without having to com- promise on quality or safety in production logistics. 15% (25%, 2020) Growth prospects: Medium Growth prospects: Medium Growth prospects: Medium Business cycle sensitivity: High Business cycle sensitivity: High Business cycle sensitivity: Low 20 ANNUAL AND SUSTAINABILITY REPORT 2021 S ustainability is an integrated part of Elanders’ business and strategy and Elanders considers sustainability a responsibility and a business opportunity that can provide great opportunities to create value and improve profitability. In 2021 our work continued to be focused on the health and safety of our employees due to the ongoing pandemic. At the same time we have continued to invest in sustainability, for instance by acquiring ReuseIT in Life Cycle Management and by recruiting a Head of Sustainability. EXTERNAL AND INTERNAL DEMANDS Today’s society puts very high demands on CSR. These demands come not only from external actors such as customers, investors, authorities etc. but also internally from employees, and companies can make demands on their employees. All employees at Elanders are responsible for having a positive impact on the environment, improving working condi- tions, increasing equality and preventing corruption. Elanders uses guidelines for CSR and our ambition is to contribute to the development of society in the countries where the Group has operations. Elanders’ ambition is to further increase transparency when it comes to sustainability work by collecting and analyzing more sustain- ability data, as well as presenting the result. At the moment we are implementing a web-based tool that will aid us in this work. CARBON DIOXIDE EMISSIONS The Elanders Group’s carbon impact comes foremost from emissions and material and energy use. Emissions are mainly generated by the fleet of about 280 trucks the Group has at its disposal and that transport customers’ components and products. Material primarily consists of paper in printing operations. Energy consumption mainly takes place in the facilities where the Group has its operations. Elanders’ sustainability work covers the Group’s entire business model and permeates the company at every level. Sustainability matters are an integrated part of our operations and decision-making. The goal is to have a positive impact on the environment. Elanders should also contribute to a sustainable social development and be a responsible and attractive employer. A MORE SUSTAINABLE WORLD Our contribution to OPERATIONS – OUR CONTRIBUTION TO A MORE SUSTAINABLE WORLD In the following spread, you can read in general about how we work with the UN’s global goals, about our climate work and about our employees. On pages 55–65, we provide more in-depth sustainability information. A CIRCULAR ECONOMY In Life Cycle Management Elanders has taken the initiative to create more climate friendly services. There is a huge sustainability factor in extending the life of, and reusing, equip- ment before it is finally recycled since most of a product’s environmental impact comes from producing it. In the service area Renewed Tech Elanders annually handles around 100,000 obsolete units like computers, monitors, mobile phones, servers and other computer accessories. As a further step in Elanders’ sustainability work, and to actively contribute to a more circular economy, the Group has chosen to invest in this field in recent years. Promote sustained, inclusive, and sustainable economic growth, full and productive employment and decent work for all. Ensure an inclusive and equitable education and promote lifelong learning opportunities for all. Agenda 2030, the UN’s 17 Sustainable Development Goals were adopted by most of the world leaders in 2015 to promote socially, economically and environmentally sustainable development. Elanders contributes to the goals in varying degrees. The ambition is that Elanders sustainability work will create value for all stakeholders and thereby also contribute to these goals. The following seven goals have been identified as the most material for Elanders’ sustainability work: Agenda 2030 21 ANNUAL AND SUSTAINABILITY REPORT 2021 OPERATIONS – OUR CONTRIBUTION TO A MORE SUSTAINABLE WORLD Achieve gender equality and empower all women and girls. Reduce income inequality within and among countries. Take urgent action to combat climate change and its impacts. Agenda 2030 Build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation. Ensure sustainable consumption and production patterns. Read more about how we work with the UN’s global goals on page 63. Focus areas ahead • Formulate a sustainability strategy with realistic goals and long-term ambitions • Broaden the collection of sustainability data in the Group • Create innovative business models and use business opportunities that harmonize with the Group’s sustainability work CO 2 -savings 1) in thousands of ton from Elanders’ Renewed Tech operations ~17 ) TheCO savingsietheCO equivalenthavebeen calculatedinaccordancewiththeprinciplesstatedin RapportBProduktdatabasermiljöfördelarmed återbrukdevelopedbyIVLSvenskaMiljöinstitutetin collaborationwithInregoAB 22 ANNUAL AND SUSTAINABILITY REPORT 2021 OPERATIONS – OUR FOCUS AREAS WITHIN SUSTAINABILITY SUSTAINABILITY The work with our focus areas within Elanders has identified four main focus areas within the sustainability area that are relevant to the business and the company’s stakeholders. Employees Social conditions and human rights The Elanders Group has 7,019 employees in some 20 countries. To actively work with human resources is essential since employees that are healthy and moti- vated contributes to Group development and success on every level. WHAT ELANDERS DOES Work concerning employees is governed by the Group’s Code of Conduct. Employ- Because Elanders is a global business with operations on several continents, it is imperative to work with social condi- tions and human rights. Although ensur- ing fair working conditions on every level is a given, constant focus and follow-up is a necessity. As a globally active and influ- ential group, Elanders intends to be one of the best regarding CSR and corporate engagement in every area the company is engaged in. ees receive training continuously to ensure awareness of the Group's common values. Central monitoring takes place every other year and continually by each company to ensure that the Code of Conduct and Anti-Corruption Policy have been commu- nicated to all employees. Each company is responsible for creating their own pro- cedures and guidelines to ensure confor- mance with the code. WHAT ELANDERS DOES Elanders’ work regarding social conditions and human rights is based on the Group’s Code of Conduct. Elanders intends to be one of the best regarding CSR and corpo- rate engagement and all companies in the Group are encouraged to support and get involved in both global as well as regional/ local projects where they believe their con- tributions can make a dierence. 23 ANNUAL AND SUSTAINABILITY REPORT 2021 OPERATIONS – OUR FOCUS AREAS WITHIN SUSTAINABILITY Environment and climate Historically, Elanders’ operations have primarily had a direct impact on the environment through noise and solvent emissions. Since the acquisition of LGI in 2016 Elanders has a fleet of around 280 trucks with trailers. This fleet of trucks has a direct impact on the environment through transportation performed on behalf of customers. The extent of use for these trucks is largely beyond Elanders control, as it depends on the customers’ volumes. Transportation adds to noise levels, air pollution, acidi- fication, over fertilization and increased greenhouse eects. Another aspect of Elanders’ climate impact is energy consumption. Energy in Group facilities is mainly used in manufac- turing, heating, lighting and cooling. WHAT ELANDERS DOES Elanders work to reduce its negative impact on the environment and climate, and the Group places great importance on strictly following legal requirements concerning the environment. Elanders also strives for driving as environmentally friendly as possible, using transportation solutions that are as cost and energy-ecient as possible, and also optimizing the customers’ transportation. Elanders is also evaluating electric trucks as a potential transport solution. Elanders also works continuously to reduce energy consumption and to increase the proportion of renewable electricity in the operations. Ethics and anti-corruption An ethical and transparent approach is fundamental to Elanders reducing the risk for conflicts of interest as well as having a profitable and sustainable business with a strong brand. WHAT ELANDERS DOES Elanders follows all applicable laws and regulations, locally and internationally. Elanders has an Anti-Corruption Policy that comprises all employees, the Board and other persons that act in Elanders’ name. Read more about our sustainability work on pages 55–65. 24 ANNUAL AND SUSTAINABILITY REPORT 2021 OPERATIONS – INSIDE ELANDERS WORK ON SUSTAINABILITY Elanders accelerates its In April 2021 Elanders hired its first Sustainability Director, Nathalie Bödtker-Lund. This was done to accelerate the Group’s development of sustainable and circular solutions for customers and thereby increase our competitive capacity going forward. T he increasingly obvious consequences of climate change makes the transformation to a world where development is sustainable both urgent and unavoidable. For Elanders – and business in general – this entails more stringent demands from customers and society regarding sustainability. Businesses have to change and adjust to maintain their competitive edge. Sustainability is already an integrated part of Elanders’ offer and the Group intends to develop operations that are both resource-efficient and sustainable. In order to put further focus on these issues the Group has hired Nathalie Bödtker-Lund as Sustainability Director. She will help Elanders be the sustainability spearhead it wants to be, keeping the Group attractive for customers, employees, investors and financiers. Below she answers some questions about her role and what is currently on the agenda. WHO IS NATHALIE BÖDTKER-LUND? “I have a background in the arts and have worked a long time arranging public art and cultural events such as the Göteborg Film Festival, which is the largest film festival in the Nordic region. A deep social interest and political engagement led to my involvement in sustainability issues and during the past five years I’ve been in charge of the WIN WIN Gothenburg Sustainability Award, which is awarded annually to draw attention to outstanding efforts from all over the world. Some of the award winners are Gro Harlem Brundtland, Al Gore and Kofi Annan. This job has given me access to people in academia, business and the public sector and insights into how these three areas can collaborate positively.” WHAT ATTRACTED YOU TO THE JOB AT ELANDERS? “I’m someone who’s always on the move and interested in different contexts and sectors. Business is essential to the success of the necessary change of course in a sustain- able direction. At the same time it’s a fleet-footed and dynamic sector where the ball can get rolling quickly, which makes it exciting to be part of. Even better, Elanders opens up an international world for me, where the circumstances, attitudes and prioritizations vary between operations in different countries and regions. That in of itself is an exciting challenge. On top of that Elanders is a company that’s always been good at modernizing and driving change processes. A good example is how, at a strategically well-chosen point in time, Elanders got involved in Supply Chain Solutions while adapting print operations to a new reality. Recently, in the same spirit, the Group has invested in reducing customers’ carbon dioxide footprint through, for instance, Renewed Tech.” WHAT MAKES YOU RIGHT FOR THE JOB? “In a way it’s courageous of Elanders to give me this position. I’m neither an expert in sustainability nor an environmental scientist. My strengths lie in other areas. However, the company knows me well from the time I headed WIN WIN since Elanders is one of the sponsors of the award. My expertise is in building organizations, creating structures, setting ambition levels, building networks and getting people to want to move in the same direction. We’ll bring in the right experts to help us as needed. Furthermore, I will always fight for ambitious goals in sustainability, which I’m convinced will be beneficial to our business in the long run.” INTERVIEW 25 ANNUAL AND SUSTAINABILITY REPORT 2021 OPERATIONS – INSIDE ELANDERS WHAT HAVE YOU DONE IN 2021? “So far the work has primarily been about creating a platform and planning for the future, when and how things will be done. We’ve also started several major parallel processes, both short and long term. Having a dedicated Sustainability Director means these matters are a proper part of Group Management’s agenda. My role is to push the envelope and bring sustainability matters to the fore while respecting the fact that some things have to take time. To establish overarching visions and goals for the Group we have to start by mapping the current situation.” WHAT ARE THE SHORT TERM PRIORITIES? “We want to improve sustainability data collation which has thus far been done manually and contains too few measuring points. We’ve begun to work with a techni- cal platform that allows us to set up more ambitious measuring points and provides us with quicker results. It will also make it easier for Group companies to both add and access data. We’re also preparing to report according to the standard GRI (Global Reporting Initiative) ahead to make sustainability reporting more thorough and structured. In addition, we intend to start reporting our greenhouse gas emissions in 2022. These are practical but nonetheless rather substantial and demanding processes.” AND IN THE LONG TERM? “Even though there are already a number of good and ambitious sustainability projects in the Group that we can be proud of, we need to create a common perspective on sustainability. We have started a strategic process and will hold a lot of workshops in order to arrive at a shared vision for Elanders that expresses what we want, where we’re going, how we can weave sustainability into our offer and what we ought to invest in going forward in our business areas. This process will lead to a sustainability strategy and concrete goals. I want to underline that our vision, strategy and goals don’t just come from the top. On the contrary, we strive transparently to involve every part of the Group so that we can form a consensus around all of this. Only by building a culture of sustainability throughout the organization can we be successful. We also intend to hold courses for both management and workers to better engage them in these issues. I think our prospects are good since the entire Group agrees on the importance of taking sustainability issues seriously, making changes and setting ambitious goals. Elanders definitely has the driving forces needed!” NATHALIE BÖDTKER-LUND Sustainability Director In a way it’s courageous of Elanders to give me this position. I’m neither an expert in sustainability nor an environmental scientist. My strengths lie in other areas. FACTS GRI (Global Reporting Initiative) is an international, independent standardization organ that helps companies and other organizations to understand and, in a standardized manner, communicate their impact on climate change, human rights and corruption. 26 ANNUAL AND SUSTAINABILITY REPORT 2021 Elanders acquired the privately held contract logistics company Bergen Logistics in November 2021, boosting the group’s North American presence specifically within the Fashion & Lifestyle segment. Elanders can now offer unique global solutions for brands within this fast-growing market. A LOGISTICS SUCCESS BUILT ON PROPRIETARY TECHNOLOGY INTERVIEW OPERATIONS – INSIDE ELANDERS Ron Roman, CEO and founder of Bergen Logistics find new solutions. Most major e-commerce platforms are already fully integrated into Bergen Logistics’ system CloudX, and we continue adding new platforms as needed,” says Ron Roman. SEIZING OPPORTUNITIES It is all pretty impressive for a company that Ron Roman founded from a small storage space back in 1998. At the time, he was running a fashion company outside of New York. A friend with a similar business asked if he could help him ship some items. Soon after, Ron Roman real- ized there was a business opportunity which did not exist at that time. The company grew quickly solely through word of mouth and its great reputation. “Coming from the fashion industry enabled us to easily empathize and anticipate our partners’ needs and require- ments. It took a lot of hard work and dedication from our amazing team of employees. They are the backbone of this company. Seizing opportunities is the DNA of this company,” says Ron Roman. EXPANSION AND COOPERATION Now that Bergen Logistics has become part of the global Elanders group, it opens up for additional opportuni- ties, for example providing services in North America to Elanders’ established clients in Europe and vice versa. “We will continue providing the same high level of services as before, but now with the ability to expand to new markets. In addition, collectively with our sister companies, we can also negotiate better commercial terms for example with our carriers,” says Ron Roman. “Furthermore, we can share new leads and create new businesses within the group. Instead of turning away opportunities which may not fit our business model, we can pass them along to a sister company. There is definitely an added value being a global player offering different options and capabilities,” he concludes. T he acquisition considerably strengthens Elanders’ position in the North American market and expands its strategic oppor tunities in outsourcing of logistics services. It also makes Fashion & Lifestyle into one of Elanders’ largest customer segments, broadening its presence within the fast-growing market of e-commerce. Following the COVID-19 pandemic, about half of Bergen Logistics’ shipments go direct to consumers. Bergen Logistics is a third-party logistics provider with net sales of MUSD 108 in 2021. The company specializes in serving small and mid-sized brands in the fashion and lifestyle sectors utilizing its proprietary technology plat- form, CloudX, enabling them to manage a large number of clients in a highly profitable way. Bergen Logistics being an omni-channel expert, clients can seamlessly ship wholesale, retail and direct to consumer orders out of one bucket of inventory according to their clients’ needs and while respecting their branding requirements. “Our partners, as we like to refer to them, work largely in the better to luxury price point markets in the fashion and lifestyle sectors. We manage small to medium volume of high-value items, and our typical projects tend to be more complicated than what you would find at other fulfillment centers. We provide special services that help our partners with their branding, adding an ‘out-of-the- box’ experience for the consumer,” explains Ron Roman, founder and CEO of Bergen Logistics. TECHNOLOGY IS THE KEY With three facilities on the US East Coast, one on the West Coast, one in Toronto, Canada and one in the Netherlands, as well as presence in Asia through partners, Bergen Logistics today serves around 450 different clients overall. No single one of them represents more than four percent of total sales. Among them are some very well-known fashion brands from Scandinavia, Germany, France and other parts of Europe. Key to handling the complexity involved is the technology that the company has developed and keeps developing internally. “We have developers both in the US and in Moldova working tirelessly to expand our CloudX software code. Every week we deploy new system functions to help with operations, support integrations and enable new automa- tion for new and existing partners. Furthermore, our amazing team continuously look to build, improve and 28 ANNUAL AND SUSTAINABILITY REPORT 2021 OPERATIONS – INSIDE ELANDERS A SECOND LIFE All data carriers in the old pieces of equipment are wiped, with certificates being produced that verify for the cus- tomers that all their information has been securely deleted. Some customers also choose a Life Cycle Management solution where their old machines are refurbished and given a second life on the second-hand market. They are then sold, both locally within the Netherlands and to other countries within or outside the EU. “This goes hand in hand with the recent acquisitions of the Renewed Tech businesses in Sweden and some of the group’s operations in Germany,” Martin de Leng points out. Building on the experience from the photocopier/ printer and medical equipment business, there are also potential new opportunities in various other segments. One such example is bottle deposit machines in Dutch supermarkets, which are due for replacement. COMPLETING THE SERVICE PORTFOLIO “We are definitely a good match. Our company becomes more complete with this important last-mile service adding value to the service portfolio in our demand chain offer, while we add a new focus on warehousing to them, along with shipping and customs support. We also share similar values. As a family-owned business with a century-long history, Eijgenhuijsen has a strong, positive culture which goes well with a people-focused company like ours,” says Martin de Leng. The integration has started well, with people from both sides immediately starting to collaborate around common opportunities and making use of each other’s strengths. Both operations will be strengthened by exchanging best practices to improve efficiency and quality, while the acquired company’s systems and process will be aligned to what is already in place. “We will take things step by step and merge the two companies in a natural way, while trying to trigger people to find relations and cooperation. This is my aim in the change management looking forward,” he explains. E landers’ Supply Chain Solutions business in the Netherlands has been growing quite rapidly the last couple of years, with a strong focus on the Electronics and Health Care segment and a well- balanced portfolio including both larger and smaller cus- tomers in these segments. The business includes contract logistics as well as air and sea freight forwarding. Warehouse facilities are located in Amsterdam, Schiphol, Rotterdam and Dordrecht. The latter is a brand new 10,000 square meter facility that opened for business in December 2021, with a high-end medical equipment manufacturer as the first anchor customer. The facility is already being utilized close to capacity and adding yet another one is in the pipeline. “With the acquisition of Eijgenhuijsen, that has about 80 full-time employees, we are doubling our staff while getting a better geographical balance. We have been concentrated in Western Netherlands and they are also present in the Northern, Eastern and Southern parts of the country,” says Martin de Leng, Managing Director of LGI Netherlands. FULL RESPONSIBILITY The acquired company is specialized in delivering and in- stalling advanced technological equipment, such as copying machines, printers and pieces of medical equipment like x-ray units. With all the necessary equipment and know- how for special transportations, including moving large units within buildings and up and down stairs, the com- pany takes full responsibility for delivering and installing equipment on the premises of the end-customer. “Our drivers are not only good drivers but also have extensive technical knowledge. They can install photo- copiers, printers and other machines, including adding them in the network if needed. They give users a short introduction before leaving with the old machine and all the packaging waste. For advanced medical machinery, they can also have special engineers from the manufacturer with them – and often come and preview the premises in advance,” explains Martin de Leng. In November 2021 Elanders acquired the Dutch privately held company Eijgenhuijsen, which provides services within special transportation, installation and recovery of advanced technological equipment. This adds unique last-mile solutions to Elanders’ subsidiary LGI’s end-to-end demand chain offer in the Netherlands, while also growing the group’s Life Cycle Management business. With the acqui- sition of Eijgen- huijsen, that has about 80 full- time employees, we are doubling our staff while getting a better geographical balance. DOUBLES THE DUTCH WORKFORCE Technical logistics specialists acquisition INTERVIEW OPERATIONS – INSIDE ELANDERS A GREEN NEW FACILITY Meanwhile, sustainability will remain high on the agenda for the Dutch orga- nization, with a general switch to electric company cars and a zero waste tar- get to be achieved in 2022. The brand new facility in Dordrecht has also been built according to the highest environmental standards and is fully BREEAM certified. Charging stations for electric cars are in place and the building is more or less carbon emission free, powered by solar panels covering the roof and pre-existing wind power plants. Waste-water is collected in a sustainable way and the surroundings made green and bee-friendly. “These aspects are increasingly important both for our customers and on the labor market. Young people today want to work for responsible compa- nies that do not harm the environment. This is very important to consider for an expansive company like us,” concludes Martin de Leng. Martin de Leng, Managing Director of LGI Netherlands 30 ANNUAL AND SUSTAINABILITY REPORT 2021 OPERATIONS – INSIDE ELANDERS important as customers today strive for sustainability,” says Andrea Junge. WINNING TOGETHER A company culture of teamwork is an important factor for success. She describes the atmosphere as open- minded. Managers and colleagues are always there to help solve any possible problem. “In my spare time I play ice hockey and also coach children, so I know that you cannot win alone. We must work as a team in all our different roles. Here, it is valuable with different perspectives and a good mix of people. In a male-dominated environment I think female managers can make important contributions to this. Nevertheless, no matter if a colleague is male or female, the main thing is that we work together for the benefit of our customers,” she says. Looking forward, Andrea Junge plans to develop the cluster with more Electronics & Health Care customers, growing further through value-adding services and value recovery aimed at new customers and products. She also wants to pursue innovation. “For me it is very important to be part of innovative projects and grasping new opportunities offered by technology, software, artificial intelligence and big data. This is the future for logistics service providers and also something of a hobby for me – when I am not busy playing ice hockey!” A ndrea Junge, today 44 years old, has been working within the same organization, although in different roles, since starting an apprenticeship back in 1994. Ever since taking responsibility for one small customer at that time, she has enjoyed working in the logistics industry. “You can do so many different things within logistics to improve for the customers – developing processes, employees, technology and software. You really have room to bring in new ideas and be innovative. At work I am literally like a child getting to play with new stuff all the time. Also, you are constantly dealing with different customers and processes. Every day is different from the last and there are always new challenges to handle. I love it!” she says. EXPERIENCE CREATES OPPORTUNITIES Throughout her career Andrea Junge has had oppor- tunities to try new things and prove herself in different projects. She went on from administrative duties to business development, implementing new management systems and running optimization projects. After working with establishing a new customer’s business in Hungary she took on the role as warehouse manager in Budapest. Then she moved on to the in-house consulting team, where she worked on many different projects. “In 2013, I got the chance to become operations manager for our multi-customer site in Bondorf. This made me surprised and happy, since I had learned the business through all the different projects I had worked on, rather than formal studies,” she explains. MANAGER OF 200 EMPLOYEES In 2016, Andrea Junge moved on to her present role. As cluster manager based in Herrenberg, she is responsible for roughly 200 employees and 13 different Electronics & Health Care customers. This includes one of the Elanders group’s largest sites in Germany, handling many different processes and added services. “We are a premium logistics service provider offering end-to-end solutions with all the different processes our customers demand, throughout the product’s life-cycle. What truly sets us apart is that there is nothing we cannot do with high quality. We can for example offer a demo pool of new products, data staging and configuration, product delivery including unpacking and functional testing, repair services and value recovery from old equip- ment with secure data wiping. The latter is strategically Teamwork is a defining word for Andrea Junge, Cluster Manager for south-west Germany within Electronics & Health Care at Elanders’ subsidiary LGI. This is true, both when helping logistics customers with end-to-end solutions at work and in the ice hockey rink in her spare time. In 2013, I got the chance to become opera- tions manager for our multi- customer site in Bondorf. This made me surprised and happy “YOU CANNOT WIN ALONE” INTERVIEW 31 ANNUAL AND SUSTAINABILITY REPORT 2021 OPERATIONS – INSIDE ELANDERS dualizing our solutions. As a customer you never need to adjust to us, we truly partner with you and adapt to your needs,” she says. An advantage with a multi-customer warehouse is that it gives many opportunities to learn new things from different customers. “You learn and get new ideas from every customer. We are always developing and adopting new technologies and finding solutions to our customers’ challenges. This helps put us in the forefront. For example, we did om- ni-channel distribution already 15 years ago, even though we did not call it that,” she continues. SWITCH TO B2C On the present and future agenda for Fashion & Lifestyle customers is an increasing switch from a B2B to a B2C business model, a change that has been accelerated by the pandemic. “Since this is nothing new for us, we are the right part- ner for customers to go forward with. We have the routi- ne and the necessary know-how to help our customers in this transition. During the COVID-19 pandemic we have managed to set up a lean B2C solution for some of our customers in as little as four weeks. An added bonus for me is that this rapid development also means that my job will continue to be interesting for many years to come!” concludes Gabriele Bormuth. I t is clear that Gabriele Bormuth likes her role as one of two branch managers at the Munich site, which has more than 180,000 square meters of warehouse space and approximately 1,000 employees. She has held this position for more than 15 years but is far from bored. “Every day is different in this line of work and presents new challenges and surprises, a lot of them positive. The job is still not a routine,” she says. Today in her mid-50’s, Gabriele Bormuth originally went into freight forwarding because it gave her a chance to work all over the world. In the years following her studies she worked in Venezuela, Mexico and the USA before returning home to Germany again. When her children were small, she started at the company with a part-time job in the forwarding department. Later, she switched to contract logistics and the position she still has today. RESPECT ACROSS THE LINE “Something I appreciate here is that the world is still very present. People from many different cultures work together in the warehouse, in respect and tolerance of one another. We really have an open company culture where everyone is included in the same team,” she says. When it comes to being a woman in a leading position, Gabriele Bormuth never felt that this was an issue. “People are treated with respect no matter their gender, age or background. But I do believe a good diversity in the team is very beneficial for the company,” she says. To relax in her spare time, Gabriele Bormuth enjoys the mountains all year round. “Nothing beats the sense of freedom there. I go hiking with my family in the summer and skiing, both cross country and downhill, as well as snow-shoeing in the winter. I also like jogging and water sports by the sea. I have a big extended family and there are always lots of people at home, in ages ranging from three to 85,” she says. INDIVIDUALIZED SOLUTIONS The main focus of the Munich site is on Fashion & Lifestyle industry and the site serves many different customers. Responsibility for the customers is divided up between Gabriele Bormuth and her branch manager colleague. “In my job I enjoy seeing both people and companies develop. I have seen trainees evolve into managers and small start-ups become major brands. We help customers get all necessary processes in place and are good at indivi- When Gabriele Bormuth joined Elanders’ subsidiary ITG she told herself that she would quit when the job became a routine. After more than 20 years, that day has yet to come. As branch manager at ITG’s contract logistics center in Munich she still gets surprised every day. “I ENJOY SEEING PEOPLE AND COMPANIES DEVELOP“ INTERVIEW 32 ANNUAL AND SUSTAINABILITY REPORT 2021 OPERATIONS – INSIDE ELANDERS need to go through a similar process,” comments Sven Burkhard, head of Elanders’ business area Print & Packaging Solutions. ROBUST PRODUCTION Acquiring Schätzl creates synergies that can be lever- aged in areas like materials, organization, distribution and investment, while adding a bigger range of products available to customers. It more than doubles Elanders mass customization business. “Maybe most importantly, the addition of capacity makes our production more robust. This is a very seasonal business, with as much as 80 percent of profits being secured in the last two months of the year. Our customers are looking to make sure that production is not disrupted, something that has been especially emphasized by new threats to business continuity due to the COVID-19 pandemic. With bigger overall capacity, our sites have the ability to act as backup for one another so that we can ensure delivery to our customers with even more confidence,” says Sven Burkhard. AIMING TO INTERNATIONALIZE Elanders is now the number one of the digital print service providers in mainland Europe that does not belong to an e-commerce brand. The very large joint production capabilities in the field of photobooks and calendars make the company attractive as a partner to large e-commerce brands. With 70 percent of Schätzl’s customers being found outside Germany, looking for- ward, the aim is to further internationalize the business. “Since this is an increasing market with good margins, Elanders is planning to add similar processes in our sites in other markets like Sweden, the UK and the USA. Customers will meet the same system wherever they are and the individualized product will then be printed as closely as possible to them, thus saving both time and CO2 emissions through shorter shipping distances,” concludes Sven Burkhard. O ne of Elanders’ four strategic growth areas is online print. While volumes for traditional commercial offset printing are continuously decreasing, the trend is quite the opposite when it comes to digitally printed, mass customized output that is ordered online. The demand for per- sonalized photobooks, calendars, children’s books, invitation cards and other types of printed products are growing both on the business-to-business and business- to-consumer side. The monetization of digital content from social media is and will remain a growth driver for future years. Elanders has successfully established itself as an im- portant player in this market, both with its own brands and as a supplier to many major e-commerce brands. Newly acquired Schätzl Druck & Medien (“Schätzl”), located in Donauwörth, Bavaria, has also gone through a rapid change in this direction. A BUSINESS TRANSFORMED Founded in 1981, Schätzl has over the last years suc- ceeded in converting from being a traditional print shop to gaining a similar share of the mass customization digital printing market as Elanders, mainly as a supplier to e-commerce brands. Since starting its transition to purely digital print, the company has grown annually in the range of 15 to 35 percent and it has an annual turnover of approximately 19 million euros. “When I took over as owner and managing direc- tor in 2014, I saw where things were headed. I started the transformation of Schätzl into a state-of-the-art digital printing company with an offering of on-demand services with mass customized digital printing for hard- cover and softcover books, calendars, greeting cards, wall art and other products. We are now using a highly automated manufacturing process with editions of all sizes, all the way down to individualized output,” says Ulrich Schätzl, who after the acquisition was appointed Director of Mass Customization at Elanders. “In this role, Ulrich will bring his experience of a successful transformation to bear. Having established a kind of best practice he becomes a valuable asset for Elanders in the coming years, as some of our sites are still dependent on traditional print volumes and With the acquisition of Schätzl Druck & Medien in June 2021, Elanders’ operations in Germany has more than doubled its business within mass customized digital printing. Adding important capacity, the acquisition makes production more robust, and it also comes with valuable know-how within online print. MASS CUSTOMIZATION Massive within INTERVIEW 33 ANNUAL AND SUSTAINABILITY REPORT 2021 OPERATIONS – INSIDE ELANDERS Acquiring Schätzl creates synergies that can be leveraged in areas like materials, organization, distribution and investment, while adding a bigger range of products available to customers. Sven Burkhard, President, Print & Packaging Solutions and Ulrich Schätzl, CEO and founder Schätzl 34 ANNUAL AND SUSTAINABILITY REPORT 2021 OPERATIONS – INSIDE ELANDERS Through the acquisition of the Swedish companies, Azalea IT and ReuseIT, Elanders has begun an investment in the field of Renewed Tech and become an actor to reckon with on the Nordic market. The two businesses supplement each other almost seamlessly and the potential for growth is enormous. SIGNIFICANTLY REDUCED CLIMATE IMPACT WITH REUSED IT EQUIPMENT A SIMPLE PROCESS Elanders makes the process simple for customers. As sensitive business information is stored on the obsolete equipment, there are great values to protect. Erasing all data without risking leaks requires a sophisticated process. The equipment is sent in locked containers directly from the customer to Elanders’ security classi- fied facilities where the tool Blancco, a kind of industry standard for secure data erasure, is used. A certificate is generated for each individual unit containing data so that customers can verify that no data have come into the wrong hands. Network equipment is erased in a corresponding manner. After the data is eradicated Elanders’ personnel goes through the equipment, verifies its function and classes it according to its external condition. Then the operative system is restored as well as any other licensed soft- ware. Finally, the renewed IT equipment is sold with a guarantee via an online store, directly to existing customers or via retailers. The products are primarily sold in the Nordic market. DIFFERENT BUYERS Buyers of clients are consumers, schools and a growing number of companies that highly prioritize sustainability. Even units with cosmetic defects can be sold for the right price. “We’ve noticed how interest in buying second-hand has been on the rise in recent years, driven by a sustain- ability consciousness. The standard of IT equipment used by companies is generally high which means its service life can be extended,” says Agne Nilsson. In datacenters, however, technology develops much faster and therefore second-hand values are lower. Nonetheless a market exists, for example when broad- band operators need to expand or repair their old environments. “We sell reconditioned equipment to business customers directly, via the web or through retailers. We also offer storing products customers can have recurring need for. Some items are sold with final destinations in the Nordic region, other parts of Europe or North America,” says Henrik Cohn. L ife Cycle Management is one of four strategic growth areas for Elanders. Through acquisi- tions the Group has developed an attractive offer in Renewed Tech, which entails safely taking care of obsolete IT equipment, restoring it and giving it a second life with the intention of at least doubling its service life before recycling. In October 2020 Elanders acquired the Gothenburg company Azalea IT and in March 2021 ReuseIT, domiciled in Växjö. The companies have similar business models, but operate in different product and customer segments. The business model is twofold. These companies help businesses manage their worn-out IT equipment in an information secure, and environ- mentally and financially sound way. The positive environmental effect is significant since around 97 percent of the collected equipment can be reused instead of recycled, and this contributes to reducing climate impact. They then supply customers with reliable second- hand equipment which also reduces climate impact. Most of the equipment is sold but some of it is leased. In some cases customers are even offered the opportu- nity to lease new equipment which after the contracted period can become part of the second-hand range. PERFECT MATCH The match between the two acquired companies is close to perfect. Azalea IT is focused on equipment used in datacenters, i.e. servers, storage and network equip- ment, while ReuseIT works with clients, i.e. PCs, surf tablets and cell phones. “We’ve already been able to strengthen our offer under the short time since the acquisition was made by sending customers to each other,” says Agne Nilsson, Sales Director at ReuseIT and one of the company founders. “Azalea IT, ReuseIT and Elanders combined creates competitive advantages. At the same time, the customers can benefit from all the strengths of each individual company,” adds Henrik Cohn, CEO and co-founder of Azalea IT. INTERVIEW 35 ANNUAL AND SUSTAINABILITY REPORT 2021 FUTURE GROWTH IN SIGHT Both companies anticipate growing demand as con- sumers, businesses and other organizations prioritize the climate and sustainability more and more. They see major advantages in being part of the Elanders Group with its established logistics operations all over the world and strong position in the electronic segment that provide significant opportunities for expansion on new markets. “We’ve become more attractive for customers looking for global solutions and Elanders has a really good posi- tion with a broad range in Renewed Tech” says Agne Nilsson. “In addition, Elanders is a dynamic company willing to change and where decision-making processes are short and the tempo is high. We can still get our new ideas considered while taking advantage of the strength of a big, stable and listed group. It’s the best of both worlds,” concludes Henrik Cohn. We can still get our new ideas considered while taking advantage of the strength of a big, stable and listed group. It’s the best of both worlds. Henrik Cohn, CEO and co-founder of Azalea IT Agne Nilsson, Sales Director and co-founder ReuseIT 2020 2019 2017 2021 2018 OPERATIONS – FIVE YEARS IN SUMMARY CONTINUES TO GROW The Group The past decade has held many eventful years for Elanders with several significant acquisitions. These acquisitions have transformed Elanders into what it is today – a global logistics multinational with a diversified portfolio of operations to rely on. The ongoing pandemic has shown what a strong point this is. The COVID-19 pandemic had a consid- erable impact on our business during the first half-year. It started in Asia when restrictions were implemented to reduce the spread of the virus. This created disruptions in the supply chain for companies dependent on goods from Asia. When the virus reached Europe, countries closed their borders, and the component shortage became more severe, causing factories to close. During this period, Elanders was en- trusted with procuring PPE from Asia. After a weak first half-year there was a dramatic recovery during the second half of the year when factories were once again running at full speed. The year ended with a solid fourth quarter. Despite an ongoing pandemic, the Group had its best year ever. One im- portant factor was the lower cost base resulting from the measures taken in 2019. Print & Packaging Solutions and the Asiatic section of Supply Chain Solu- tions had one of their best years ever. This was overshadowed by the fact that a restructuring plan was needed in the European section of Supply Chain Solutions and accounting errors in transportation operations were discov- ered. After two years with strong cash flow resulting in a robust financial posi- tion Elanders is now seriously ready to make new acquisitions that can complement our existing oer. Excluding one-o items, Elanders presented its, up until then, best annual result ever with an adjusted EBITA of MSEK 563 (523). The year 2018 was also character- ized by strong organic growth, nine percent, and Group net sales reached over 10 billion Swedish krona for the first time. The customer projects that had created problems during the second half of 2017 continued to be a challenge in the beginning of 2018, but after measures to make them more ecient and raising our prices to customers they were set right. During the year, the majority of shares in LOGworks, Elanders’ stang opera- tions in Germany, were sold to Adecco. As part of the production consolidation process in Print & Packaging Solutions the operations in Beijing, China were divested while the oset operations in Sweden were shut down and 70 employees were made redundant. The year ended with Elanders’ best, until then, quarter ever. The year was characterized by strong organic growth, mainly in business area Supply Chain Solutions where growth was generated in both Asia and Europe. Several new deals were signed during the year. Organic growth amounted to six percent for the Group as a whole, but increased to 12 percent in the fourth quarter. Net sales amounted to SEK 9.3 billion and there were close to 7,000 employees at year-end. The robust growth led to some growing pains for the organization, which was apparent in the result in the form of extra start-up costs for several of the new, large customer projects in Supply Chain Solutions. Price pressure and overcapacity on the market for business area Print & Packaging Solutions continued and 50 employees were made redundant in the Swedish operations. The year was marked by the semi- conductor shortage, several acquisi- tions and strong growth in Europe in Fashion & Lifestyle. The semiconductor shortage was primarily problematic for customers in customer segments Automotive, Electronics and Industrial by creating disturbances in their supply chain. This created an uneven capacity utilization in production at Elanders, which in turn aected profit- ability. With the acquisition of Bergen Logistics in November 2021 customer segment Fashion & Lifestyle became Elanders’ largest. The acquisition also creates opportunities for Elanders to grow with existing customers that want to enter the attractive North American market. During the year Elanders also made investments and acquisitions in online print and Life Cycle Management, two areas with discernable underlying growth. Despite a weaker second half-year compared to last year, largely due to the semiconductor shortage, once again Elanders presented its best year ever in terms of result. OPERATIONS – FIVE YEARS IN SUMMARY INCOME STATEMENTS – SUMMARY MSEK Net sales Operating expenses – – – – – EBIT Financial items – – – – – Result after financial items Result for the year EBITDA EBITDA excl. IFRS 16 EBITA EBITA adjusted CASH FLOW – SUMMARY MSEK Cash flow from operating activities – Paid taxes – – – – – Investments – – – – – Operating cash flow – – Change in net debt – – BALANCE SHEETS – SUMMARY MSEK Goodwill Other fixed assets Inventory Accounts receivable Other current assets Cash and cash equivalents Equity Interest-bearing liabilities Non-interest-bearing liabilities Total assets IFRSiseectivefromJanuaryandhasaectedtheaccountingoftheGroup’sleaseagreementsThetransitiontoIFRS hasbeenbasedontheModifiedretrospectiveapproachwhichmeansthatthecomparisonperiodshavenotbeenadjustedExcluding IFRSmeansthatthesameaccountingprinciplesashavebeenusedOne-oitemshavebeenexcludedintheadjustedmeasures 38 ANNUAL AND SUSTAINABILITY REPORT 2021 OPERATIONS – FIVE YEARS IN SUMMARY Cash flow from operating activities, MSEK Net sales, MSEK EBITA margin adjusted, % Net debt, MSEK Net debt/EBITDA, times EBITA NET DEBT CASH FLOW Nettooms„ttningMkr % % % % % % EBITA-marginal Nettooms„ttningMkr RörelseresultatMkr – Nettooms„ttningMkr KEY RATIOS EBITA-margin, % EBITA-margin adjusted, % Operating margin, % Profit margin, % Equity ratio, % Risk capital ratio, % Interest coverage ratio, times Debt/equity ratio, times Return on equity, % Return on capital employed, % Return on total assets, % Average number of employees Number of employees at the end of the year Net debt/EBITDA, times Net debt/EBITDA excl. IFRS 16 ratio, times Enterprise Value, MSEK Risk capital, MSEK Capital employed, MSEK Net debt, MSEK Net debt excl. IFRS 16, MSEK IFRSiseectivefromJanuaryandhasaectedtheaccountingoftheGroup’sleaseagreementsThetransitiontoIFRS hasbeenbasedontheModifiedretrospectiveapproachwhichmeansthatthecomparisonperiodshavenotbeenadjustedExcluding IFRSmeansthatthesameaccountingprinciplesashavebeenusedOne-oitemshavebeenexcludedintheadjustedmeasures ForReconciliationAlternativePerformanceMeasuresandFinancialDefinitionsseepages– 39 ANNUAL AND SUSTAINABILITY REPORT 2021 OPERATIONS – FIVE YEARS IN SUMMARY Equity, MSEK ROE, % Capital employed, MSEK ROCE, % RETURN ON EQUITY RETURN ON CAPITAL EMPLOYED EQUITY RATIO Equity, MSEK Equity ratio, % EgetkapitalMkr % % % % % % % % Avkastning Nettooms„ttningMkr % % % % % % RörelseresultatMkr % % % % % % % % The Group’s diversification in both customers and operations is an evident strength. 40 ANNUAL AND SUSTAINABILITY REPORT 2021 SHARE INFORMATION AND OWNERSHIP STRUCTURE GREATER INTEREST IN THE SHARE The share price had a positive development during the beginning of the year. The lack of semiconductors, together with strong comparative figures, then put high pressure on the share price during the second half of the year. During the year, there has also been greater interest in the share and the company, which has increased the number of shareholders. History Elanders’ B shares were first listed on the Stockholm Stock Exchange on 9 January 1989. On 31 December 2021 the company had 33,542,938 (33,542,938) B shares listed on NASDAQ OMX Stockholm, Mid Cap, under the ELAN B symbol. Development during the year The market value of B shares increased by 45 (37) percent during 2021 while the Stockholm Stock Exchange index OMX Stockholm PI rose by 35 (11) percent during the same period. During 2021 a total of 6,583,884 (5,848,025) Elanders shares were traded, which is equivalent to an average trading rate of approximately 0.20 (0.17) times. The lowest share price during 2021 was SEK 118.40 on January 22 and the highest was SEK 192.00 on July 7. The final share price in 2021 was SEK 174.00 (119.60), which means that Elanders’ stock market value at year-end was approximately MSEK 6,152 (4,229). Share capital, class of shares and liquidity guarantee At the end of 2021 there were a total of 35,357,751 (35,357,751) issued shares in the company, of which 1,814,813 (1,814,813) were Class A shares and 33,542,938 (33,542,938) were Class B shares. Each Class A share is worth ten votes and each Class B share one. The shares’ quota value is SEK 10 and all shares are entitled to the same dividend. See the tables on the following pages for share capital and voting disposition. The Class B share is covered by a liquidity guarantee and ABG Sundal Collier is the guarantor. Share allocation According to Euroclear Sweden AB, Elanders had 4,557 (3,684) shareholders at year-end. The share of foreign shareholders amounted to 12 (11) percent of the capital. Swedish private DATA PER SHARE Net result, SEK Net result adjusted, SEK Share price at year-end, SEK P/E ratio Adjusted P/E ratio P/S ratio, times Dividend, SEK ) – Dividend yield, % Share price/equity, times Equity, SEK Risk capital, SEK EBITDA, SEK EBITDA excl. IFRS 16 Operating cash flow, SEK – – Cash flow from operating activities, SEK – Average number of outstanding shares, in thousands Turnover rate ) ProposedbytheBoard IFRSiseectivefromJanuaryandhasaectedtheaccountingoftheGroup’sleaseagreementsThetransitiontoIFRShas beenbasedontheModifiedretrospectiveapproachwhichmeansthatthecomparisonperiodshavenotbeenadjustedExcludingIFRS meansthatthesameaccountingprinciplesashavebeenusedOne-oitemshavebeenexcludedintheadjustedmeasures ForReconciliationAlternativePerformanceMeasuresandFinancialDefinitionsseepages– 41 ANNUAL AND SUSTAINABILITY REPORT 2021 SHARE INFORMATION AND OWNERSHIP STRUCTURE individuals and institutions owned 7 (8) per- cent and 29 (29) percent respectively of the capital. At the end of the year Carl Bennet AB controlled 66 (66) percent of the votes and 50 (50) percent of the capital and was the only owner who controlled more than 10 percent of the capital or 10 percent of the votes Dividend policy Regarding the proposed dividend in years to come, the Board of Directors has taken into account the Group’s development potential, its financial position and the adopted finan- cial goals relating to debt/equity ratio, equity ratio and profitability. The objective is to have dividends follow the long-term profit trend and, on the average, represent approximately 30–50 percent of profit after tax. Other information Elanders’ financial information can be found at the Group website www.elanders.com, under the section Investors. Questions can also be asked to Elanders directly via e-mail at [email protected]. Annual Reports, Quarterly Reports and other information can be requested from Group headquarters at telephone number +46 31 750 07 50, our website or through the above e-mail address. We are also happy to provide information about Elanders at events that are arranged by shareholder organizations, Swedish and foreign stockbrokers and banks. ABG Sundal Collier, Aktiespararna, Erik Penser Bank and Nordea continuously monitor our development and publishes analyses of Elanders. OMX Stockholm PI ELAN B Number of traded shares DEVELOPMENT OF THE ELANDERS SHARE 45% SEK smonth Swedish institutions and Investment companies Swedish companies Swedish private individuals Foreign owners PERCENT OF SHARE CAPITAL PERCENT OF VOTES SHAREHOLDER CATEGORIES 31 DECEMBER 2021 The market value of B shares increased by 45 percent during 2021 Source: Euroclear Sweden AB. 42 ANNUAL AND SUSTAINABILITY REPORT 2021 SHARE INFORMATION AND OWNERSHIP STRUCTURE SHARE CAPITAL DEVELOPMENT Number of A shares Number of B shares Accumulated number of shares Accumulated share capital, SEK AtStockExchangeintroductionin DirectedshareissuetoacquireFabritiusASinNorway – Bonusissue DirectedshareissuetoacquiretheGraphicSystemsGroup – DirectedshareissuetoacquireSkandinaviskaLithorex – DirectedshareissuetoacquireGummessons – NewshareissueinconnectionwiththeacquisitionoftheMinabGroup DirectedshareissuetoacquiretheSkogsGroup – DirectedshareissuetoacquirethesharesinKåPeGroup – DirectedshareissuetoacquirethesharesinNovumGroup – Newshareissueinconnectionwiththeacquisition ofSommerCorporateMedia Newshareissue Directedshareissuetoacquiredomandfotokasten – NewshareissueinconnectionwiththeacquisitionofMentorMedia NewshareissueinconnectionwiththeacquisitionofLGI OutstandingsharesandsharecapitalonDecember MAJORSHAREHOLDERSDECEMBER Number of A shares Number of B shares Percent of votes Percent of share capital Carl Bennet AB Didner & Gerge Funds – Svolder AB – Fourth Swedish National Pension Fund – Carnegie Funds – Protector Insurance – Third Swedish National Pension Fund – BNP Paribas SEC Services Paris – HSBC Bank – Avanza Pension – Other Shareholders – Total Source: Euroclear Sweden AB. SHAREHOLDERSTATISTICSDECEMBER Number of shares Number of shareholders Number of A shares Number of B shares Percent of share capital Percent of votes – – – – – – – – – Total Source: Euroclear Sweden AB. 43 ANNUAL AND SUSTAINABILITY REPORT 2021 E landers AB (publ) is the parent company of the Elanders Group and the company’s B shares are listed on NASDAQ OMX Stockholm, Mid Cap. Elanders AB (publ) is a subsidiary to Carl Bennet AB, corporate identity no 556379-0715, registered in Gothenburg. Carl Bennet AB prepares consolidated financial statements that include Elanders. OUR BUSINESS Elanders is a global logistics company with a broad range of services of integrated solutions in supply chain management. The business is mainly run through two business areas, Supply Chain Solutions and Print & Packaging Solutions. The Group has approximately 7,000 employees and operates in some 20 countries on four continents. Our most im- portant markets are China, Singapore, the United Kingdom, Sweden, Germany, and the USA. Our major customers are active in the areas Automotive, Electronics, Fashion & Lifestyle, Health Care & Life Science and Industrial. OUR OFFER Elanders helps its customers to more efficiently manage their entire supply chain, everything from raw materials to the product itself. By optimizing customers’ material and component flows, Elanders actively helps its customers to reduce their environmental impact and thus contributes to a more sustainable society. Elanders can take a global total responsibility for the entire supply chain, including procurement, warehousing, configuration, production and distribution. Our offer also includes order management, payment solutions and, after sales services for our customers. Our services are provided by business-oriented employees. They use their expertise and our advanced IT solutions to develop our customers’ offers which are often completely dependent on efficient product, com- ponent and service flows as well as traceability and information. In addition to our offer to B2B markets, the Group also sells photo products directly to consumers through the own brands fotokasten and myphotobook. NET SALES AND RESULT Net sales increased by MSEK 683 to 11,733 (11,050) compared to the same period last year. Cleared of exchange rate fluctuations and acquisi- tions, net sales increased by seven percent. Organic growth was primarily generated by the European division of Supply Chain Solutions. Last year some one-off deals concerning the procurement and sales of PPE had a positive effect on net sales and the result. Demand from customers continued to be good during the period even if several customers suffered disturbances in production due to the shortage of semiconductors and raw material. Adjusted EBITA, the operating result adjusted for amortization on assets identified in conjunction with acquisitions and excluding one- off items, increased by MSEK 60 to MSEK 658 (598). One-off items amounted to MSEK –17 (0) and referred solely to consultancy fees linked to acquisitions. With the same exchange rate as this period last year EBITA would have been MSEK 26 higher. The improvement in the result compared to last year is due in part to higher profitability in general but the shortage of semiconductors has affected this year’s result negatively. This has led to irregular capacity utilization when customers have shut down or added shifts on short notice. These disturbances primarily affected customer segments Automotive, Electronics and Industrial. Otherwise customer activities and the number of offers requested continued to grow. In the customer segment Fashion & Lifestyle, for example, the Group has had to turn away a number of projects due to a lack of capacity. The COVID-19 pandemic had a major impact on operations in 2020 and affected Group operations in 2021 as well but to a lesser extent. In 2021 the pandemic above all led to disruptions in many customers’ supply chains. What marked 2021 the most was the semiconductor shortage that had a different effect on Group customers depending on their field. Its greatest negative impact was on customer segments Automotive, Electronics and Industrial, all of which had problems with supplies of semiconductors. Several acquisitions were made during the year. The acquisition of Bergen Logistics and the platform it creates in North America will provide Elanders with completely new opportunities to grow with existing customers on the North American market. Despite the fact that the second half of the year was weaker than in 2020, primarily due to the semiconductor shortage, 2021 was Elanders’ best year ever in terms of result. Supply Chain Solutions The semiconductor shortage created disturbances in production and supply chains for several business area customers. It primarily affected customer segments Automotive, Electronics and Industrial. The distur- bances had a negative effect on the business area’s result since they led to irregular capacity utilization when customers reduced or added shifts on short notice. On the other hand, Fashion & Lifestyle grew substan- tially. The business area’s result was also charged with one-off items of MSEK –17 (0) which referred to consultancy fees linked to acquisitions. Demand from all customer segments was very good throughout the year and net sales grew organically by ten percent. Customers’ sales in stores began to recover in 2021 and activity continued to be high on their online shopping sites. Organic growth in the Group was primarily generated by the business area’s European division. In part it was driven by higher shipping rates for freight forwarding volumes and in part good demand in general. Last year the business area had some one-off deals concerning the procure- ment and sales of PPE which had a positive effect on net sales, the result and margins while the pandemic on the whole had a negative effect. The acquisition of Bergen Logistics provides Elanders with a completely new platform on the North American market, primarily in Fashion & Lifestyle. Now it will be easier to help European and Asian customers become established on the market as well as provide service for custom- ers already there. Even the acquisitions in Renewed Tech (ReuseIT) and Life Cycle Management (Eijgenhuijsen) were important complements to existing operations. BOARD OF DIRECTORS’ REPORT The Board of Directors and the President and Chief Executive Officer of Elanders AB (publ), corporate identity no 556008-1621, herewith present their annual report and the consolidated financial statements for 2021. AUDITED ANNUAL REPORT – BOARD OF DIRECTORS’ REPORT 44 ANNUAL AND SUSTAINABILITY REPORT 2021 Print & Packaging Solutions For business area Print & Packaging Solutions 2021 was a pretty challenging year. Brought on by the COVID-19 pandemic there were disturbances, like the semiconductor shortage, in global supply chains for several customers, particularly in Automotive and Industrial. At the same time paper mills for fine paper shut down which led to a shortage of fine paper causing a severe hike in paper prices. Despite this Print & Packaging Solutions had a very good year. The new acquisition Schätzl, which primarily focuses on growth area online print, contributed with a very strong end of the year. Now that societies are beginning to open up again, marketing activities such as exhibitions etc. should have a positive effect on printed matter volumes. The market in general continues, as in previous years, to be characterized by tough price pressure, contracting total volumes and surplus capacity. Combined with the ongoing pandemic this has led to financial problems for many competitors. Total print volumes continue to contract on nearly every market and the unmistakable trend towards digital print and products designed to suit receivers, instead of tradi- tional off-set print in big series, continues as well. The new acquisition Schätzl is specialized in online print, which is one of the few areas show- ing organic growth. It is primarily the American service area which handles subscription boxes and combines print, freight forwarding and packing as one cohe- sive service that contracted in 2021. One of the large customers decided to procure shipping themselves which had a negative effect on net sales, mainly in the second half of the year. As a response to contracting total volumes and the resulting price pressure the Group is continuing to consolidate production capacity, mostly regarding traditional off-set print. Elanders is also working on changes so that some existing print operations can also offer supply chain management services which has been successfully done in Brazil, Sweden and the USA. SIGNIFICANT EVENTS DURING THE YEAR The COVID-19 pandemic COVID-19 has since the beginning of 2020 quickly spread and developed into a pandemic with a large number of infected. The measures taken by different governments to limit the spread of the virus has impacted financial activities and the Group’s business in different ways. – Many Group customers have experienced major disturbances in supply chains and this has affected both their operations and ours negatively. In 2021, there have only been minor disturbances. – In order to dampen the effects of the COVID-19 virus outbreak the Group has received government support in some of the countries where we have operations. During 2021, Elanders has received MSEK 2 in support. There is still a great deal of uncertainty regarding how long the COVID-19 pandemic will continue, which makes it difficult to predict the precise effect the next year. New outbreaks stemming from mutations and dramatic measures to curb spreading the virus can have a significant effect on Group business. Semiconductor shortage The current semiconductor shortage in some industries has had a negative impact on the Group’s business. When shift patterns change on short notice it creates an uneven capacity utilization in production. Refinancing During the year the Group has renewed its main credit facilities and a new credit agreement is now in place. The agreement runs for three years with an option to extend it one plus one year. The counterparties of the agreement are one German and two Swedish banks. The new agreement will give the Group greater flexibility regarding, for example, making acquisitions. Acquisitions ReuseIT Sweden AB and ReuseIT Finance AB In March 2021 Elanders acquired 70 percent of the shares in ReuseIT Sweden AB and ReuseIT Finance AB (“ReuseIT”). The contract contains a mandatory put and call option that gives Elanders the right to acquire the remaining shares in the company during 2025. The option also gives the seller the right to sell the remaining shares for a defined purchase price. Net sales in ReuseIT in 2020 were almost MSEK 70 and profitabi- lity was good. The company, which has been consolidated into business area Supply Chain Solutions, is specialized in purchasing, securely erasing, renovating, reselling and renting out used IT equipment. This acquisition and the previous acquisition of Azalea Global IT AB in 2020 make Elanders one of the leading actors on the Swedish Renewed Tech market. At the same time this is part of a larger strategic investment in global sustainable services. The purchase price and acquisition costs charged cash flow in the first quarter by around MSEK 45. Schätzl Druck & Medien GmbH & Co. KG In July 2021 Elanders acquired all the shares in the German digital print company Schätzl Druck & Medien GmbH & Co. KG (“Schätzl”). The purchase price for the shares was MEUR 8 on a debt-free basis. The seller may also receive an additional sum which will be paid in 2024 if the company continues to develop positively. Schätzl had net sales of around MEUR 15 in the last twelve-month period with good profitability. Acquisition costs were around SEK 1 million and consisted primarily of consultancy fees. Schätzl, which is now part of business area Print & Packaging Solutions, is specialized as a subcontractor for different actors in online print, which is one of the few areas in the graphic industry showing organic growth. Elanders is already a well-established subcontractor in this area and to- gether with Schätzl Elanders will be one of the leading actors in Europe. Bergen Shippers Corp. In November Elanders acquired 80 percent of the shares in the American company Bergen Shippers Corp. which operates under the name Bergen Logistics. The company is specialized in contract logistics services for the customer segment Fashion & Lifestyle. The company’s net sales in 2021 were more than MUSD 100 and EBITDA amounted to around MUSD 15, excluding IFRS 16 effects. The company was valued at MUSD 155 on a debt-free basis. There is a mandatory option to purchase/ sell the remaining shares that can be used from 2024 on for a purchase price based on the company’s future result development. Bergen Logistics has been consolidated into business area Supply Chain Solutions. Acquisition costs were around MSEK 15 and consisted primarily of consultancy fees connected to the acquisition. Eijgenhuijsen Exploitatie BV Elanders acquired all the shares in Eijgenhuijsen Exploitatie BV and its subsidiary Eijgenhuijsen Precisievervoer BV (together Eijgenhuijsen) in November. Eijgenhuijsen operates in Life Cycle Management and offers special transportation and installation services for sensitive technical equipment as well as retrieves worn-out equipment. The company has annual net sales of around MEUR 10. The purchase price for the shares was MEUR 10 on a debt-free basis. Eijgenhuijsen has been consolidated into business area Supply Chain Solutions. Acquisition costs were around MSEK 2 and consisted primarily of consultancy fees connected to the acquisition. AUDITED ANNUAL REPORT – BOARD OF DIRECTORS’ REPORT 45 ANNUAL AND SUSTAINABILITY REPORT 2021 INVESTMENTS AND DEPRECIATION During the year, net investments amounted to MSEK 1,394 (116), of which acquisitions and divestments amounted to MSEK 1,267 (30). Investments have mainly been made in production equipment. Deprecia- tion, amortization and write downs amounted to MSEK 888 (885). FINANCIAL POSITION, CASH FLOW AND EQUITY RATIO Operating cash flow for the period amounted to MSEK –105 (1,783), whereof purchase price regarding acquisitions of operations amounted to MSEK –1,267 (–30). The decrease is mainly due to acquisitions and cut-off effects around previous year-end. Net debt increased to MSEK 5,249 compared to MSEK 2,854 at the beginning of the year. Purchase price for acquisitions and liabilities in acquired companies contributed to the increase of MSEK 2,269. Leverage, i.e. net debt/EBITDA for a rolling twelve-month period, is now at 3.6 (2.0). Excluding effects from IFRS 16 net debt/adjusted EBITDA ratio is 3.3 (1.5), calculated based on net debt of MSEK 2,539 (1,123). Adjusted for pro forma results for acquisitions and acquisition costs, net debt/EBITDA ratio is 2.8. The Group’s credit agreement contains financial covenants that must be met to secure the financing. The most important covenant is the net debt/ EBITDA ratio that is calculated excluding IFRS 16 effects. This financial covenant was with a good margin met as of the balance sheet date. RESEARCH AND DEVELOPMENT The Group continuously develops different offers that are usually developed in connection with specific customer projects. Continuous deve lopment of order platforms takes place in our e-commerce business where costs for most of the work are recognized as they occur. PERSONNEL The average number of employees during the period was 6,288 (6,260), whereof 150 (143) in Sweden. At the end of the period the Group had 7,019 (6,058) employees, whereof 152 (147) in Sweden. Further information concerning the number of employees, as well as salaries, remuneration, and terms of employment is given in note 5 to the consolidated financial statements. PARENT COMPANY The parent company has provided intragroup services. The average number of employees during the period was 11 (10) and at the end of the period 12 (10). Other information concerning the number of employees, salaries, remuneration, and conditions of employment is given in note 5 to the consolidated financial statements. INFORMATION CONCERNING COMPANY SHARES On 31 December 2021 there were 1,814,813 registered Class A shares and 33,542,938 registered Class B shares; in total 35,357,751 shares. The Class B shares are listed under the symbol ELAN B on NASDAQ OMX Stockholm, Mid Cap. Each Class A share represents ten votes, and each Class B share represents one vote. Shareholders may vote for all the shares they own or repre sent. All shares receive the same dividend. The Annual General Meeting has not given the Board any authority to purchase shares or issue shares. There are no bonus programs with dilution effects. Transferability There are no restrictions in Class B shares transferability according to the articles of association or current legislation. The articles of association do contain a pre-emption clause concerning the company’s Class A shares. The company knows of no other agreements between shareholders that limit the transferability of the shares. Shareholdings The only direct or indirect shareholding exceeding a tenth of the votes in the company per 31 December 2021 was Carl Bennet AB with 66 (66) percent. No shares are owned by personnel through pension foundations or similar. Contracts with clauses regarding ownership changes The company has certain customer contracts and bank agreements that can be terminated if there is a change in ownership. There are no contracts between the company and Board members or employees that prescribe remuneration if they terminate their contract, are made redundant without reasonable grounds or if their employment or assignment ceases to exist because of a public purchase offer. GUIDELINES FOR REMUNERATION TO SENIOR OFFICERS The company’s guidelines for remuneration to senior officers was adopted at the Annual General Meeting on April 28, 2021. The Board proposes that the Annual General Meeting 2022 adopts guidelines that for all intents and purposes are the same as for 2021, except the CEO’s variable remuneration. The new guidelines are as follows: Senior officers are persons who, together with the Chief Executive Officer, constitute Group Management. The guidelines are valid for employ- ment contracts signed after the Annual General Meeting has adopted the guidelines as well as those cases in which changes are made in existing agreements after the decision by the Annual General Meeting. The guidelines’ promotion of the company’s business strategy, long-term interests and sustainability Elanders shall be a global and strategic partner to the customers in their business-critical processes. By offering integrated and customized solutions for handling all or part of the customers’ supply chain, the business-critical processes may be optimized. The overriding goal is to be a leader in global and sustainable overall solutions within supply chain management and to best serve the customers’ requirements on efficiency and delivery, prioritizing sustainability. The strategy is to act within niche areas in each marketing area where the group may achieve a market- leading position. In order to fulfill the long-term financial goals, and to achieve value growth and increase shareholder return over time, Elanders continually develops its offer to the customers. With new and improved services, total integrated solutions, and implementation of innovative technology, a good platform for continuous growth and development, as well as greater value for shareholders is created. A prerequisite for the successful implementation of the company’s business strategy and safeguarding of its long-term interests, including its sustainability, is that the company is able to recruit and retain qualified personnel. To this end, it is necessary that the company offers competitive total remuneration, enabled by these guidelines. Variable cash remunera- tion covered by these guidelines shall aim at promoting the company’s business strategy and long-term interests, including its sustainability. Types of remuneration The remuneration shall be on market terms and may consist of the following components: fixed cash salary (basic wage), variable cash remuneration, pension benefits, and other benefits. Additionally, the general meeting, may irrespective of these guidelines, resolve on, among other things, share-related or share price-related remuneration. For the CEO and the CFO, variable cash remuneration may amount to, at most, 70 (60) respectively 50 (50) percent of the basic wage. For other executives, variable cash remuneration may amount to, at most, 40 (40) percent of the basic wage. Additional variable cash remuneration, how- ever not more than 100 (100) percent of the basic wage, may exceptionally be awarded after resolution by the Board of Directors, for the purpose of recruiting or retaining executives in light of local market conditions. AUDITED ANNUAL REPORT – BOARD OF DIRECTORS’ REPORT 46 ANNUAL AND SUSTAINABILITY REPORT 2021 For the CEO, pension benefits, including health insurance (Sw. sjuk- försäkring), shall be premium defined. Variable cash remuneration shall not qualify for pension benefits. The pension premiums for premium defined pension shall amount to, at most, 35 percent of the fixed annual cash salary. For other executives, pension benefits, including health insurance, shall be premium defined unless the individual concerned is subject to defined benefit pension under mandatory collective agreement provi- sions. Variable cash remuneration shall qualify for pension benefits to the extent required by mandatory collective agreement provisions. The pension premiums for premium defined pension shall amount to, at most, 35 percent of the fixed annual cash salary. Other benefits may include, for example, company cars and indus- trial health services (Sw. företagshälsovård). Such benefits may, in total, amount to a minor proportion of the total remuneration. Termination of employment The notice period may not exceed 18 months if notice of termination of employment is made by the company. Fixed cash salary during the period of notice and severance pay may together not exceed an amount equivalent to the cash salary for 18 months as regards the CEO and 12 months for other executives. The period of notice may not exceed six months, without any right to severance pay, when termination is made by the executive. Criteria for awarding variable cash remuneration The variable cash remuneration shall be linked to predetermined and measurable criteria, which can be financial or non-financial. They may also be individualized, quantitative or qualitative objectives. The criteria shall be designed to contribute to the company’s business strategy and long-term interests, including its sustainability by, for example, being clearly linked to the business strategy or promote the executive’s long- term development. To which extent the criteria for awarding variable cash remuneration has been satisfied shall be evaluated when the mea- surement period has ended (normally calendar year). The remuneration committee is responsible for the evaluation so far it concerns variable cash remuneration to the CEO. For variable cash remuneration to other executives, the CEO is responsible for the evaluation. For financial ob- jectives, the evaluation shall be based on the latest financial information made public by the company. Salary and employment conditions for employees In the preparation of the board of directors’ proposal to these remunera- tion guidelines, salary and employment conditions for all employees of the company have been taken into account by including information on the employees’ total income, the components of the remuneration as well as increase and growth rate over time. This information has then formed a basis for the remuneration committee’s and the Board of Directors’ evaluation of whether these guidelines and the limitations set out herein are reasonable. The decision-making process to determine, review and implement the guidelines The Board of Directors has established a remuneration committee. The committee’s tasks include preparing the Board of Directors’ decision to propose guidelines for executive remuneration. The Board of Directors shall prepare a proposal for new guidelines at least every fourth year and submit it to the annual general meeting. The guidelines shall be in force until new guidelines are adopted by the general meeting. The remunera- tion committee shall also monitor and evaluate programs for variable remuneration to the executive management, the application of the guidelines for executive remuneration, as well as the current remunera- tion structures and compensation levels in the company. The members of the remuneration committee are independent of the company and its executive management. The CEO and other members of the executive management do not participate in the Board of Directors’ processing of and resolutions regarding remuneration-related matters in so far as they are affected by such matters. Derogation from the guidelines The Board of Directors may temporarily resolve to derogate from the guidelines, in whole or in part, if in a specific case there is a special cause for the derogation and a derogation is necessary to serve the company’s long-term interests, including its sustainability, or to ensure the com- pany’s financial viability. As set out above, the remuneration committee’s tasks include preparing the Board of Directors’ resolutions in remunera- tion-related matters. This includes any resolutions to derogate from the guidelines. In 2021, the Board of Directors approved that variable remu- neration to an executive resident abroad could exceed the stipulated 40 percent of the basic wage. The reason is that the Board of Directors has deemed such derogation to be necessary in order to offer the executive competitive total remuneration in light of local market conditions. OUTLOOK Elanders continues to have a strong standing with its global customers where there is substantial potential for expansion both short and long term. Elanders’ market position and global outreach is therefore in sync with the times. The customer diversification Elanders has carried out in recent years ought to make the Group less sensitive to ups and downs in the business cycle going forward. EVENTS AFTER THE BALANCE SHEET DATE The war in Ukraine Russia invaded Ukraine in February 2022. The war has so far not had any significant negative impact on Elanders’ operations. However, some of the Group’s customers have subcontractors in Ukraine and Russia. These customers have therefore started to have some problems with their supply chain. There is still a great deal of uncertainty about how long the conflict will last and the extent of it. It is therefore difficult to predict the exact impact in the coming year. Increased sanctions and an increased scope of the conflict could have a significant impact on the Group’s operations. Apart from this, no major events have taken place between the bal- ance sheet date and the date this report was signed. APPROPRIATION OF PROFITS The Board of Directors and Chief Executive Officer propose that the profit and other unreserved funds of SEK 1,330,680,637 in the parent company at the disposition of the Annual General Meeting should be dealt with accordingly: • SEK 3.60 per share is distributed to the shareholders SEK 127,287,904 • the remaining balance is to be carried forward SEK 1,203,392,733 The Board of Directors believes that the proposed dividends are justifi- able in relation to the demands that the business’ nature, scope, and risks make on group equity and the Group’s consolidation needs, liquidity, and its position in general. AUDITED ANNUAL REPORT – BOARD OF DIRECTORS’ REPORT 47 ANNUAL AND SUSTAINABILITY REPORT 2021 AUDITED ANNUAL REPORT – BOARD OF DIRECTORS’ REPORT UNCERTAINTY FACTORS Risks and Elanders divides risks into business risks (customer concentration, operational risk, risks in operating expenses, contracts and disputes), financial risks (currency, interest, financing/liquidity and credit risk) as well as circumstantial risks (COVID-19 pandemic, business cycle sensitivity and the future of the services/products). For more detailed information than given below, as well as a sensitivity analysis, please see note 20 in the consolidated financial statements. WHAT ELANDERS DOES Customer concentration Elanders’ strategy is not only to be a supplier to our larger customers but to be a strategic partner who builds the basis for long-term business relations. Elanders has worked together with several of the Group’s largest customers for many years. Operational risk Elanders work to identify and prevent risks that can lead to disturbances in production. The work involves regular controls of the production sites where identified improvement areas are the basis for action plans. The Group also has business interrup- tion insurance that covers the loss of margins for up to twelve months. Elanders also works continuously to ensure processes for follow-up and control regarding IT security in order to be able to meet increased threats to cyber security. Elanders has also developed training to increase employees’ awareness of IT security. Risks in operating expenses The Group does not see any direct risk that any of these costs will rise in the near future to such a degree that it would have a material effect on group results. Elanders has also the possibil- ity within some agreements to pass on increased costs to the customers. Contracts and disputes Elanders is not aware of any dispute that may have any sig- nificant effect on the Group’s financial position. The Group’s insurance program contains global liability insurance that covers general liability, product liability, crime fidelity, business interruption and limited protection against environmental dam- age. The Group also has liability insurance for members of the Board and officers. RISKS AND UNCERTAINTY FACTORS Customer concentration The Group’s major customers are primarily active in the manufacturing industry and agreements with these customers normally run over two or three years. Elanders’ ten largest cus- tomers represent 53 (55) percent of net sales in 2021. Elanders has two customers whose sales exceed 10 percent of the Groups’ net sales. In 2021, sales to the Group’s largest customer repre- sent 14 (14) percent while sales to the next largest customer represent 12 (13) percent of the total net sales. Sales to these customers is made to several of their divisions, on several conti- nents and is based on multiple stand-alone agreements. Operational risk Elanders is dependent of IT-systems for production, logistics and sales. Disruptions or cyberattacks on the systems can mean dis- turbances and have a negative impact on the Groups reputation, profitability and financial position. Otherwise, the risk that the Group will suffer a major stop in production is relatively small. There are now critical interdependencies between the units within the respective business area or between the business areas. There are only a few cases where there are no alternative suppliers of critical input goods. Risks in operating expenses Elanders’ main operating costs are cost for goods for resale and other production material MSEK 2,529 (2,737), personnel costs MSEK 2,789 (2,600) and freight costs MSEK 2,870 (2,437). These categories represent 73 (74) percent of total operating costs in 2021. Contracts and disputes In business daily operations can give rise to disputes. Business risk Elanders encounters risks in operations daily, and normally these are within the Group’s control. Group Management’s close collaboration with the dierent group operations is a key factor in controlling these risks. 48 ANNUAL AND SUSTAINABILITY REPORT 2021 FÖRVALTNINGSBERÄTTELSEAUDITED ANNUAL REPORT – BOARD OF DIRECTORS’ REPORT RISKS AND UNCERTAINTY FACTORS Currency risk The Group runs into currency risk through transactions in currencies other than the companies’ local currency (transaction exposure) or when converting net result and net assets from foreign subsidiaries (translation exposure). Interest risk Exposure in the form of changes in the interest rate stems mainly from group interest-bearing liabilities with floating interest. Outstanding liabilities are primarily in EUR and USD. Financing/liquidity risk Elanders is dependent on obtaining financing from credit institutions. The Group’s financing needs comprises current operations and preparedness for possible future investments. The availability of financing depends on factors such as the general availability of capital and Elanders’ credit rating. Credit risk The Group is exposed to losses through the risk of a counter- party not meeting their obligations. Credit risk can be divided into financial credit risk and commercial credit risk where the financial risk primarily concerns investing surplus liquidity and trading exchange derivative instruments, and the commercial risk concerns accounts receivable. Elanders’ commercial credit risk is spread out over a large number of customers and at the same time a few customers represent a large part of the Group’s accounts receivable. WHAT ELANDERS DOES Currency risk Receivables and liabilities as well as in some cases purchase and sales orders are partly hedged by using forward exchange con- tracts. Exposure of net assets in foreign subsidiaries is mainly connected to EUR and USD and hedging has been made in part through loans in EUR and USD. Apart from this hedging, no other hedging has been made to counter the translation risk. Interest risk Elanders strives to achieve a balance between cost-effective financing and the risk exposure of a negative influence in the result if interest levels suddenly changed significantly. In light of the low interest rates expected by the market, no hedging has been made regarding interest rates. Elanders is following deve- lop ments closely and may enter into hedging arrangements. Financing/liquidity risk The Group has signed a new credit agreement during 2021. The agreement runs for three years with an option to extend it one plus one year. The counterparties of the agreement are one German and two Swedish banks. Credit risk The financial credit risk is limited and controlled by the fact that financial transactions may only be carried out with finan- cial institutions that are approved of by Group Finance. The commercial credit risk is primarily handled by each subsidiary through external checks on credit ratings, regular communica- tion with customers, monitoring their ability to pay and follow- ing up their financial reports. Financial risk The greatest financial risks for Elanders are currency risk, interest risk and financing/liquidity risk. AUDITED ANNUAL REPORT – BOARD OF DIRECTORS’ REPORT RISKS AND UNCERTAINTY FACTORS COVID-19 pandemic The COVID-19 pandemic has resulted in many deaths and infections. It has also entailed widespread disturbances in many countries, among them many of Elanders’ most important markets. There is a risk that the pandemic can continue to impact financial activities and the uncertainty around this is great. There is therefore a risk that the Group’s business will be negatively affected in the coming quarters since the demand for the Group’s services and products can contract. No one knows how long the pandemic will continue or how it will develop. Nor is it possible to predict how long the crisis measures and infection control restrictions implemented in different countries will continue or what further steps might be taken. Business cycle sensitivity The most tangible business cycle sensitivity is in group opera- tions that supply our customers in the manufacturing industry, particularly in automotive and consumer electronics. Sales to customers in foodstuffs, cosmetics, pharmaceuticals and the public sector as well as to consumers are less affected by the general economic situation. The war in Ukraine Russia invaded Ukraine in February 2022. The war has so far not had any significant negative impact on Elanders’ operations. However, some of the Group’s customers have subcontractors in Ukraine and Russia. These customers have therefore started to have some problems with their supply chain. There is still a great deal of uncertainty about how long the conflict will last and the extent of it. It is therefore difficult to predict the exact impact. Increased sanctions and an increased scope of the conflict could have a significant impact on the Group’s operations. Circumstantial risk The external factors that have and may have the greatest impact on Elanders operations are the ongoing pandemic, the global economy and the war in Ukraine. Since these factors are outside of Elanders’ control the Group continuously work to adjust operations to meet the new conditions. WHAT ELANDERS DOES COVID-19 pandemic Elanders’ first priority is to protect our employees and their surroundings as much as possible against the spread of the infection. Measures have been taken to protect our employees and the guidelines and recommendations of the respective authorities are followed. In order to soften any effects from lower demand from customers, we are keeping in close touch and working together with our customers and other partners. To a certain extent Elanders can adapt operations to changes in demand through furloughs, fewer temps and by making adjust- ments in costs. Business cycle sensitivity We work consciously to reduce the influence of business cycles by increasing sales to customers in less sensitive trades and customer groups as well as by increasing the geographic spread of sales. In most cases the expansions in supply chain do not involve significant investments in fixed assets and lease agree- ments are signed to match the customer contracts. A large part of the running costs in new projects are variable and can be adjusted in case of volumes changes. The war in Ukraine Elanders follows the course of events closely and works with various action plans for the various possible scenarios that may arise. The Group currently has no operations in Ukraine and only one sales office in Russia. Various parts of the Group help with humanitarian support on the ground in Europe, both for the employees affected and the refugee wave that is expected. 50 ANNUAL AND SUSTAINABILITY REPORT 2021 CORPORATE GOVERNANCE REPORT This Corporate Governance Report, a part of the Board of Directors’ Report in the Annual Report, describes Elanders’ corporate governance, which comprise the management and the administration of the company operations as well as internal control over financial reporting. T he role of corporate governance in Elanders is to create a good foundation for active and responsible ownership, a suitable distri- bution of responsibility between the different company bodies as well as good communication with all of the company’s interested parties. SWEDISH CODE OF CORPORATE GOVERNANCE Elanders follows the Swedish Code of Corporate Governance (“the Code”). The Code is based on the principle “follow or explain”, mean- ing that a company following the Code can deviate from certain rules, but then needs to explain why. The following deviations from the Code at Elanders are: • The Chairman of the Board is the Chairman of the nomination committee. This deviation is further explained in the section on the nomination committee. More information about the Code can be found at www.corporategovernanceboard.se. CORPORATE GOVERNANCE IN ELANDERS – A BRIEF OVERVIEW Corporate governance in Elanders is based on legal requirements (primarily the Companies Act), accounting regulations, the articles of association, NASDAQ OMX Stockholm’s issuer rules, internal regula- tions, policies, and the Code. The Elanders Group’s corporate governance, management and control are shared by the shareholders at the Annual General Meeting, the Board of Directors, and the Chief Executive Officer in accordance with the Companies Act, the articles of association as well as the Group Manage- ment. Shareholders appoint the company’s nomination committee, Board and external auditors at the Annual General Meeting. SHAREHOLDERS On 31 December 2021, there were 4,557 (3,684) shareholders. The foreign ownership in Elanders was 12 (11) percent of shares and 8 (8) percent of votes. The only direct or indirect shareholding exceeding a tenth of the votes in the company per 31 December 2021 was Carl Bennet AB with 66 (66) percent. No shares are owned by personnel through pension foundations or the like. ANNUAL GENERAL MEETING Shareholders execute their influence at the Annual General Meeting, the company’s highest decision-making body. All shareholders in the share register that have declared their intention to participate in the Annual General Meeting within the stated time limit have the right to participate in the Meeting. Shareholders that cannot participate in person can elect a representative. At the Annual General Meeting a Class A share repre- sents ten votes and a Class B share represents one vote. Class A shares and Class B shares have the same right to a share of company assets and profit. At the Annual General Meeting each person with voting rights is AUDITED ANNUAL REPORT – BOARD OF DIRECTORS’ REPORT Annual General Meeting 2021 The Annual General Meeting on 28 April 2021 decided: • to adopt the Annual Report for 2020, • to distribute a dividend of SEK 3.10 per share for 2020, • to discharge the members of the Board of Directors and the Chief Executive Ocer from liability for 2020, • to grant according to a proposal in the summons the Board and committee remuneration for a total of SEK 4,119,000 to be divided within the Board, • to appoint the following Board Members: – Carl Bennet (re-elected) – Eva Elmstedt (new elected) – Pam Fredman (re-elected) – Dan Frohm (re-elected) – Erik Gabrielson (re-elected) – Linus Karlsson (re-elected) – Cecilia Lager (re-elected) – Anne Lenerius (re-elected) – Magnus Nilsson (CEO) (re-elected) – Johan Stern (re-elected) – Caroline Sundewall (re-elected) • to appoint Carl Bennet Chairman of the Board, • to elect PricewaterhouseCoopers as company auditors until the Annual General Meeting 2022, • that the Nomination Committee prior to the next Annual General Meeting shall be formed and fulfill tasks in accordance with the proposal in the notice, and, • to approve the remuneration report submitted by the Board regarding remuneration to leading senior ocers. 51 ANNUAL AND SUSTAINABILITY REPORT 2021 entitled to vote for their entire holding or represented holding without restrictions. Elanders’ Class A shares are included in pre-emption as stated in the articles of association. The Annual General Meeting decides on changes in the articles of association, chooses a Chairman, the Board and external auditors, adopts the annual accounts, decides on dividends, if any, and any other disposition of the result as well as discharges the Board from liability. Furthermore, the Annual General Meeting decides on guidelines for salaries and other remuneration for leading senior officers, any new share issue, and the manner in which the nomination committee is to be elected. Any shareholder with a matter they would like the Annual General Meeting to deal with should present their proposal to the Chair- man of the Board or present any nomination proposal to the nomination committee. Minutes from Elanders’ Annual General Meetings can be downloaded from www.elanders.com under Corporate Governance. ANNUAL GENERAL MEETING 2022 The next Annual General Meeting for shareholders in Elanders will be held on Thursday 21 April, 2022. More information will be published in connection with the notice convening of the Annual General Meeting and will also be published on www.elanders.com. NOMINATION COMMITTEE The nomination committee prepares proposals for the Annual General Meeting concerning the election of, and remuneration to, the Chair- man of the Board, Board members, committee members, and external auditors, the latter having been proposed by the audit committee. The nomination committee meets as needed and at least once a year. The nomination committee met twice last year and discussed the work of the Board, the independence of Board members, Board members’ evaluation of the work of the Board, the work of the committees, the audit and the composition of the nomination committee. This year the committee has consisted of Carl Bennet, Chairman (Carl Bennet AB), Hans Hedström (Carnegie Funds), Fredrik Carlsson (Svolder) and Adam Gerge (Didner & Gerge Funds). During the year, Carl Gustafsson was replaced by Adam Gerge as a representative from Didner & Gerge. No remuneration has been paid to the nomination committee. The members’ contact information is found on page 127 in the Annual Report and on www.elanders.com under Corporate Governance. The Chairman of the Board is also the chairman of the nomination committee, which is a deviation from the Code. Elanders believes it is reasonable that the shareholder with the largest number of votes be the chairman of the nomination committee since he ought to have a decisive influence on the composition of the nomination committee, because he has a majority of the votes at the Annual General Meeting. THE BOARD OF DIRECTORS AND ITS WORK IN 2021 The Board is elected by the Annual General Meeting and proposed by the nomination committee. The Board is ultimately responsible for the management of the company, monitoring the work of the Chief Execu- tive Officer, and continuously following developments in operations as well as the reliability of the company’s internal control. The Board also decides on significant changes in the organization, investments and divestitures, adopts the budget, and approves the annual accounts. The Board is ultimately responsible for ensuring that the Group has adequate systems for internal control, that the accounts are prepared, and that they are reliable when published. The Group and its management have several methods to control the risks connected to operations. The Board supports Group Management by continually monitoring and identifying business risks in a structured manner as well as steering the work in the Group in how it handles the most significant risks. In conclusion this constitutes the Board’s responsibility for corporate governance. Elanders Board members are evaluated and appointed based on the company’s business, development phase and other relevant circumstances. The diversity of education, knowledge, and experience as well as age and gender represented in the Board is also taken into account. When considering the election and re-election of Board members these factors have been used to make the Board as diverse and efficient as possible. In accordance with Elanders’ articles of association the Board of Directors should consist of at least three and no more than ten members with a maximum of two deputies. During the year the Board consisted of nine members without deputies: Carl Bennet (Chairman), Johan Stern AUDITED ANNUAL REPORT – BOARD OF DIRECTORS’ REPORT Remuneration Committee Audit Committee Chief Executive Ocer Group Management Elanders’ Shareholders Annual General Meeting Nomination Committee Board of Directors External Auditors ELANDERS’ CORPORATE GOVERNANCE 52 ANNUAL AND SUSTAINABILITY REPORT 2021 (Vice Chairman), Eva Elmstedt, Dan Frohm, Erik Gabrielson, Cecilia Lager, Anne Lenerius, Magnus Nilsson, and Caroline Sundewall. In addition, employees were represented by Martin Schubach with Martin Afzelius as deputy. All the members of the Board elected by the Annual General Meeting have an independent relationship to the company except Magnus Nilsson. Eva Elmstedt, Cecilia Lager, Anne Lenerius, and Caroline Sundewall are independent in relationship to the company’s largest owner. Carl Bennet is dependent with regards to the shareholder Carl Bennet AB where he is Chairman of the Board and owner. Dan Frohm, Erik Gabrielson, and Johan Stern are also dependent in relation to Carl Bennet AB where Dan Frohm, Erik Gabrielson, and Johan Stern are members of the Board. The Board has produced and adopted a work plan that regulates the division of responsibility between the Board, its Chairman and the Chief Executive Officer. It also includes a general meeting plan and instructions on financial reports as well as the other matters that must be put before the Board. The work plan is revised once a year or as needed. The Board has seven ordinary meetings per year; four of them in conjunction with the year-end report and quarterly reports, one meeting dedicated to strategic matters, one meeting to adopt the coming year’s budget and one constitutional meeting following the Annual General Meeting. In addition, the Board is called to further meetings as needed. The Group’s external auditors participate in the meeting that deals with the report for the first nine months of the year as well as the meeting regarding the year-end report to inform the Board in its entirety about the result of their audit. The Board followed the meeting plan for the year. The Board also met on four occasions relating to matters and decisions in connection with the refinancing as well as decisions regarding acquisitions. At the constitutional meeting of the Board, the work plan and instruc- tions for the Chief Executive Officer are reviewed and the customary decisions concerning authorized signatories are taken. In addition, the work plans for the remuneration and audit committees are adopted and their members appointed. At the constitutional meeting of the Board after the Annual General Meeting 2021, Johan Stern was made Vice Chairman. The Board in its entirety was authorized to sign for the company or one of the Chairman of the Board and the Chief Executive Officer, respectively. At the meeting concerning the year-end report, the Board met the auditors without the presence of the Chief Executive Officer or any other member from Group Management. The Board travels as often as possible to visit and hold its meetings in one of the Group’s subsidiaries. The Board members’ remuneration and presence are presented in detail in the table below. Further information about the Board and the members can be found on pages 124–125. THE CHAIRMAN OF THE BOARD The Chairman leads and organizes the Board and is responsible for making sure the Board meets its responsibilities and that the members receive the information necessary to ensure the work done by the Board is of high quality and performed according to legal stipulations and the contract with the stock exchange. The Chairman of the Board must also make sure that during the year an evaluation of the Board’s work is car- ried out and that the nomination committee is informed of the results. The evaluation is carried out annually in the form of a questionnaire and encompasses the Board’s composition, remuneration, materials, admin- istration, work methods, meeting content, reports from the committees, and education. In addition, the Chairman of the Board represents the AUDITED ANNUAL REPORT – BOARD OF DIRECTORS’ REPORT MEMBERS OF THE BOARD, REMUNERATION, ATTENDANCE, ETC. Member Board, attendance (number of meetings) Remuneration Committee, attendance (number of meetings) Audit Committee, attendance (number of meetings) Total atten- dance, % Remuneration Board + Committee work, SEK ’000s Share- holding ) Independent Members chosen by the AGM Carl Bennet, Chairman () () Notmember A B Noowner Johan Stern, Vice Chairman () () () B Noowner Eva Elmstedt () Notmember () B Yes Pam Fredman 2) () () Notmember - – Yes Dan Frohm () Notmember () B Noowner Erik Gabrielson () () Notmember – Noowner Linus Karlsson 2) () () Notmember - – Yes Cecilia Lager () Notmember () B Ye s Anne Lenerius () Notmember () B Yes Magnus Nilsson, CEO () Notmember Notmember Employee B Nocompany Caroline Sundewall () Notmember () B Yes Employee representatives Martin Afzelius () Notmember Ingårej Employee – Nocompany Martin Schubach () Notmember Ingårej Employee B Nocompany Total ) ShareholdingasofDecemberThenumberofsharesisonlystatedforthepeoplewhowereintheBoardofDirectorsatthistime ) ResignedfromtheBoardofDirectorsattheAnnualShareholders’meetingonAprilth company in ownership matters and communicates viewpoints from the owners to the Board. The Chairman of the Board is elected by the An- nual General Meeting. Carl Bennet has been the Chairman of the Board since 1997. Dan Frohm, who has been a board member of Elanders AB since 2017, will be proposed by the Nomination Committee as the new Chairman of the Board at the Annual General Meeting on April 21, 2022. REMUNERATION COMMITTEE The remuneration committee is composed of Board members with the highest competence in this field. It deals with matters concerning remuneration to the Chief Executive Officer and officers that report directly to him. Decisions concerning remuneration to other employees in management positions in the Group are made by each individual’s closest superior in consultation with their closest superior, also known as the “grandfather principle”. During the year, the remuneration committee held one meeting during which they adopted their work plan and prepared a proposal for remuneration. During the year the remuneration committee consisted of Carl Bennet, Chairman, Erik Gabrielson and Johan Stern. The guidelines for remuneration to senior officers adopted at the Annual General Meeting 2021 can be found in note 5 in the consolidated financial statements and on the company’s website, www.elanders.com under Corporate Governance. The guidelines for remuneration to senior officers for 2021 and the Board of Director’s proposal for guidelines for 2022 can be found on pages 45–46 in the Annual Report 2021. The company has not issued, and will not issue, any share-based payment obligation, or any similar incitement programs. AUDIT COMMITTEE The audit committee is appointed from within the Board based on members’ experience of, and expertise in financial reporting, accounting, and internal control. The committee follows a work plan adopted by the Board. Its primary task is monitoring internal control, procedures for financial reporting, compliance of related laws and regulations as well as the external audit in the Group. The committee also evaluates the external auditors’ qualifications and independence. The audit committee reports their observations on a regular basis to the Board and provides, as needed, external auditor candidates to the nomination committee. The committee meets at least three times a year and as needed. The external auditors normally participate in committee meetings. The com- mittee met three times in 2021. The auditors reported on the audit of the nine-month report, and the year-end report, the company’s situation with the Code of Corporate Governance and internal control were discussed. The members of the audit committee were Johan Stern, Chairman, Eva Elmstedt, Dan Frohm, Cecilia Lager, Anne Lenerius, and Caroline Sundewall. CHIEF EXECUTIVE OFFICER The Chief Executive Officer is the President of the Group, a member of the Board, and leads the Group’s operations. The Chief Executive Officer’s work is steered by the Companies Act, other laws and regula- tions, current laws for listed companies including the Code, the articles of association, and the framework established by the Board in, among other things, the CEO instruction. The Chief Executive Officer is authorized to sign for Elanders AB, as well as sign for all significant subsidiaries. The Chief Executive Officer is responsible for providing the Board with continual reports on group results and financial position as well as the information the Board needs to make qualified decisions. The Chief Executive Officer also keeps the Chairman of the Board apprised of developments in operations. All the managing directors in the Group’s subsidiaries receive written instructions. These instructions contain guidelines the managing director must observe in the running of operations. GROUP MANAGEMENT The President and Chief Executive Officer lead the work performed by Group Management and make decisions in consultation with members of Group Management. Group Management is responsible for day-to-day financial and commercial management and follow-up in the Group. It also strives to continually achieve synergies, identify acquisi- tions and structural opportunities as well as to adapt group operations to market demands and short and long-term developments. Group Management makes sure that the competence and capacity of the Group is coordinated and adjusted to be as useful and profitable as possible in the short and long term. Group Management meets on a quarterly basis, often in conjunction with a visit to a unit within the Group. Elanders’ Group Management consists of: • Magnus Nilsson, President and CEO • Andréas Wikner, CFO • Bernd Schwenger, responsible for Supply Chain Solutions (LGI) • Kok Khoon Lim, responsible for Supply Chain Solutions (Mentor Media) • Sven Burkhard, responsible for Print & Packaging Solutions • Kevin Rogers, responsible for Global Sales Further information about Group Management and the members can be found on pages 126–127. THE BOARD’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING The purpose of internal control over financial reporting is to ensure that it is reliable and that the financial reports follow generally accepted accounting principles and otherwise follow applicable laws and regulations concerning listed companies. According to the Swedish Companies Act and the Code of Corporate Governance the Board is ultimately responsible for an effective, functioning internal control in the Group. Internal control is based on the framework for internal control published by COSO (Com- mittee of Sponsoring Organizations of the Treadway Commission) and which comprises the control environment, risk assess- ment, control activities, information, communication as well as follow- up. The Chief Executive Officer is responsible for an organization and processes that ensure the quality of financial reports to the Board and the market. AUDITED ANNUAL REPORT – BOARD OF DIRECTORS’ REPORT Control environment The control environment at Elanders is characterized by the proximity between Group Management and the operating units. The majority of the members in Group Management, except the Chief Executive Officer and the Chief Financial Officer, are also MDs in one or more of the larger operative units in the Group. The framework for internal control over financial reporting in Elanders consists of routines and distribu- tion of responsibility that are clearly communicated in internal policies and different kinds of manuals. The Board has adopted a work plan that regulates the Board’s responsibility and the manner in which work is done in committees. The Board also has an audit committee that is responsible for ensuring that established principles in financial reporting and internal control are complied with and developed. It also maintains regular contact with the external auditors. In order to maintain an effective control environment and good internal control the Board has delegated the practical responsibility to the Chief Executive Officer and established a CEO instruction which defines the division of responsibi- lity between the Board and the Chief Executive Officer. Elanders has an internal control function which reports to the CEO and the CFO. The in- ternal control function performs audits of the entities within the Group. The procedures and processes in the entities are evaluated and testing performed regarding the entities’ internal controls. Risk assessment It is the responsibility of the Board to identify and handle any major financial risks and the risk of mistakes in financial reporting. This includes identifying areas in financial reporting where the risk of making a crucial mistake is higher as well as developing control systems to prevent and discover these faults. This is primarily done by identifying situations in operations and events in the outside world that could have an impact on financial reporting. Control procedures The aim of the control procedures is to ensure that financial reporting is correct and complete and that it is based on the Group’s requirements for internal control over financial reporting. Control procedures consist of general and detailed controls and can be both preventive and detec- tive. For instance, the Board continuously follows developments in the operations through monthly reports containing detailed financial infor- mation as well as the Chief Executive Officer’s comments on operations and result and financial position. Representatives from Group Finance or Group Internal Control regularly visit the entities within the Group and evaluate internal control and financial reporting. The MD in each subsidiary is responsible for making sure group governance regulations are implemented and followed and that any deviations are reported. Companies in the Elanders Group also make an annual self-assessment of how internal control functions in relation to the Group’s goals. Information and communication In order to make Elanders employees aware of the Group’s policies and manuals, the information is communicated yearly, and when changes are made, to all affected employees within the Group. To ensure that infor- mation communicated externally is correct and complete, the Board has adopted an Information Policy that dictates what should be communi- cated, by whom and how the information should be released. Follow-up The Board follow-up of the internal control over financial reporting is first and foremost handled by the audit committee. The observations and potential areas of improvement in internal control that have been identified in the external audit are processed by the audit committee together with the external auditors and the Chief Financial Officer. The results from the audits performed by Group Internal Control and the an- nual self-assessment of internal control in the entities within the Group is reported to the audit committee and the external auditors. EXTERNAL AUDIT The Annual General Meeting 2020 chose the authorized public accounting company PricewaterhouseCoopers AB until the next Annual General Meeting. The Head auditor is the authorized public accountant Tomas Hilmarsson. Once a year, the auditors meet the Board in its entirety without the Chief Executive Officer or any other member of Group Management present, normally at the meeting that deals with the year- end report. The auditors also participate in the Board meeting dealing with the report for the first nine months of the year. AUDITED ANNUAL REPORT – BOARD OF DIRECTORS’ REPORT 55 ANNUAL AND SUSTAINABILITY REPORT 2021 AUDITED ANNUAL REPORT – BOARD OF DIRECTORS’ REPORT SUSTAINABILITY REPORT Elanders’ sustainability work is based on the UN global goals and the focus areas Environment and climate, Employees, Social conditions and human rights and Ethics and anticorruption. Elanders believes the success of a company should be measured in more than just numbers and we are truly engaged in creating a good balance between building up a successful company and taking responsibi lity for social, ethical and environmental issues. S ustainability is an integrated part of Elanders’ business and strategy and Elanders considers it to be both a responsibility and a business opportunity that can provide great opportunities to create value and improve profitability. In 2021, work continued to be focused on the health and safety of employees due to the ongoing pandemic. At the same time the company has continued to invest in sustainability, for instance by recruiting Nathalie Bödtker-Lund as Sustainability Director and by acquiring ReuseIT within Life Cycle Management. SUSTAINABLE DEVELOPMENT Since Elanders’ listing on the stock market in 1989, the Group has been slowly transforming from being a purely graphic company with operations primarily in Sweden into a global service supplier with operations on four continents. Elanders has always strived to follow current trends like digitalization and globalization, current issues like climate change and shrinking natural resources as well as structural changes in the graphic industry. Along the way, acquisitions have contributed to the company’s ability to expand into new markets, customer segments and services. Elanders believes the success of a company should be measured in more than just numbers and are truly engaged in creating a good balance between building up a successful company and taking responsibility for social, ethical and environmental issues. Elanders is convinced that the best way to reach targeted goals is by having clearly formulated social, ethical and environmental principles, and then making sure they are being complied with. Elanders sees opportunities in working actively with sustainability to create value for the company and stakeholders and at the same time improve profitability through, for instance, greater resource efficiency and reducing costs like those for raw materials, energy and transportation. The demands regarding CSR made on major, multi- national companies are just as high for their partners. Elanders’ sustainability work is largely governed by the very high demands made by customers who in their own environmental and quality documentation stipulate requirements that suppliers must meet as well. Every employee at Elanders is responsible for contri- buting to positive effects on the environment, improving the work environment, increasing equality, and counter- acting corruption. Elanders works according to guidelines concerning CSR and is intent on contributing to develop- ing society in the countries where the Group operates. INTEGRATED SUSTAINABILITY Elanders’ sustainability work covers the Group’s entire business model and permeates the company at every level. Sustainability matters are an integrated part of operations and decision-making. The goal is to have a positive im- pact on the environment. Elanders should also contribute to a sustainable social development and be a responsible and attractive employer. As a way of focusing on developing sustainable and circular solutions Elanders has employed Nathalie Bödtker-Lund as Sustainability Director. The aim is to develop a sustainability strategy that comprises the entire Group and that will generate concrete and comprehensive goals for Elanders. ABOUT THE SUSTAINABILITY REPORT This Sustainability Report refers to the financial year 2021 and regards Elanders as the Group appeared at the end of 2021. The acquisitions during the year did not affect the scope of the Sustainability Report. The Sustainability Report includes subsidiaries held by the Group during most of the year. The report covers the sustainability areas considered material to Elanders and its stakeholders within financial, environmental, and social aspects. The objective of the Sustainability Report is to present a fair image of the sustainability work performed within the Group. The Sustainability Report is published once a year and is integrated in the Annual Report. Elanders’ aim is to further increase the transparency regarding the sustainability work by increasing the collec- tion and analysis of sustainability data as well as increas- ing the scope of its presentation. The ambition is to be able to present the Sustainability Report in accordance with the GRI Standards onwards. ÅRS- OCH HÅLLBARHETSREDOVISNING 2021 56 ANNUAL AND SUSTAINABILITY REPORT 2021 STAKEHOLDER DIALOGUE Elanders maintains a continuous dialogue with stakeholders to ensure that the prioritizations in the business are relevant over time. The five overriding stake- holder groups shown below have been identified as valuable for continuous devel- opment and improving Elanders’ sustainability work. The continuous dialogues also forms a basis for the Sustainability Report. MATERIALITY ANALYSIS Elanders has performed a materiality analysis based on financial, environmental, social, and ethical aspects. The analysis is based on continuous dialogues with different stakeholder groups as well as information from the Board, Group Management, and other leading officers. The materiality analysis resulted in four material areas that Elanders’ sustainability work is mainly focused on. Underlying aspects and key ratios linked to these four areas were also identified for Elanders’ sustainability work. The main material areas will be reviewed continuously to en- sure that Elanders is working with issues relevant to its business and stake holders, and contributes to development over time. MATERIALITY ANALYSIS Stakeholder dialogue and AUDITED ANNUAL REPORT – BOARD OF DIRECTORS’ REPORT STAKEHOLDER GROUP COMMUNICATION WITH STAKEHOLDER GROUPS FinancialreportsAnnualGeneral MeetingInvestormeetings WebsitePressreleases Shareholders and investors Employees Suppliers Customers Society DevelopmentdiscussionsIntranet otherinternalcommunication channelsDialoguewithunions Continuousdialogue Procurementsandpurchasing negotiations Continuousdialogue Customersurveys LocalcooperationParticipation innetworksTraineesandstudent essays Environment and climate Historically, Elanders’ operations have primarily had a direct impact on the environment through noise and solvent emissions. Since the acquisition of LGI in 2016 Elanders has a fleet of around 280 trucks with trailers. This fleet of trucks has a direct impact on the environment through transportation performed on behalf of customers. The extent of use for these trucks is largely beyond Elanders control, as it depends on the customers’ volumes. Transportation adds to noise levels, air pollution, acidi- fication, over fertilization and increased greenhouse eects. Another aspect of Elanders’ climate impact is energy consumption. Energy in Group facilities is mainly used in manufacturing, heating, lighting and cooling. WHAT ELANDERS DOES Elanders work to reduce its negative impact on the environment and climate, and the Group places great importance on strictly following legal requirements concerning the environment. Elanders also strives for driving as en- vironmentally friendly as possible, using transportation solutions that are as cost and energy-ecient as possible, and also optimizing the customers’ trans- portation. Elanders is also evaluating electric trucks as a potential transport solution. Elanders also works continuously to reduce energy consumption and to increase the proportion of renewable electricity in the operations. The following areas are considered ma- terial for Elanders’ environmental work: • Materials • Energy consumption • Emissions The following key ratios have been identified in the area: • Percent of renewable electricity • Emissions from transportation 57 ANNUAL AND SUSTAINABILITY REPORT 2021 AUDITED ANNUAL REPORT – BOARD OF DIRECTORS’ REPORT Employees The Elanders Group has 7,019 employees in some 20 countries. To actively work with human resources is essential since employees that are healthy and motivated contributes to Group development and success on every level. WHAT ELANDERS DOES Work concerning employees is governed by the Group’s Code of Conduct. Employees receive training continuously to ensure awareness of the Group’s common values. Central monitoring takes place every other year and continually by each company to ensure that the Code of Conduct and Anti-Corruption Policy have been communicated to all employees. Each company is responsible for creating their own procedures and guidelines to ensure conformance with the code. The following areas are considered material for Elanders’ work concern- ing employees: • Common values • Health and safety • Equality, equal opportunity and diversity The following key ratios have been identified in the area: • Personnel turnover • Absence due to illness • Gender distribution Ethics and anti-corruption An ethical and transparent approach is fundamental to Elanders reducing the risk for conflicts of interest as well as having a profitable and sustainable business with a strong brand. WHAT ELANDERS DOES Elanders follows all applicable laws and regulations, locally and internationally. Elanders has an Anti-Corruption Policy that comprises all employees, the Board and other persons that act in Elanders’ name. The following areas are considered material for Elanders’ work concerning ethics and anti-corruption: • Policies and education Elanders has zero-tolerance for any type of corruption or bribe, which means the number of incidents concerning corruption is an important key ratio to monitor and the target number is zero. Social conditions and human rights Because Elanders is a global business with operations on several continents, it is imperative to work with social conditions and human rights. Although ensuring fair working conditions on every level is a given, constant focus and follow-up is a necessity. As a globally active and influential group, Elanders intends to be one of the best regarding CSR and corporate engage- ment in every area the company is engaged in. WHAT ELANDERS DOES Elanders’ work regarding social condi- tions and human rights is based on the Group’s Code of Conduct. Elanders intends to be one of the best regarding CSR and corporate engagement and all companies in the Group are encour- aged to support and get involved in both global as well as regional/local projects where they believe their contributions can make a dierence. The following areas are considered material for Elanders’ work concerning social conditions and human rights: • CSR • Equal rights 58 ANNUAL AND SUSTAINABILITY REPORT 2021 AUDITED ANNUAL REPORT – BOARD OF DIRECTORS’ REPORT ELANDERS’ CODE OF CONDUCT Elanders’ Code of Conduct stipulates that both Elanders and its employ- ees’ actions and behavior must be characterized by honesty, integrity, personal responsibility, sincerity, loyalty and respect for others and the environment. The Code of Conduct comprises all employees, the Board and other people that act on Elanders’ behalf. Elanders’ Code of Con- duct also comprises suppliers and business partners to ensure that the code has an impact throughout the entire value chain. At the end of 2019, the Code of Conduct and Anti-Corruption Policy was communicated to every company in the Group. Employees have received training during the year and this will continue in 2022 when classroom training, which was postponed due to COVID-19, will hope fully become available in the later part of the fall. Central monitor- ing takes place every other year and continuously by each company to ensure that the Code of Conduct and Anti-Corruption Policy have been communicated to all employees. In 2021 81 percent of all white-collar workers in Elanders completed the training. ENVIRONMENT AND CLIMATE Elanders works systematically to reduce its environmental impact and develop products, services, and processes to achieve optimal quality. The overriding environmental goal is to reduce the Group’s environmental impact in every company without lowering quality. Almost all companies are certified according to established quality and environmental stan- dards like ISO 9001 and ISO 14001. The Group places great importance on strictly following legal requirements and compliance with other requirements in the regular environmental reviews performed according to ISO 14001 and in the investigations involved in acquisitions. During the year, Elanders continued to work on reducing the environ- mental impact, everything from measures to reduce energy consumption and greenhouse gas emissions to generating less hazardous waste. Each company in the Group is responsible for its own environmental and quality work to meet local regulations and the quality and environmen- tal reviews initiated by Elanders’ customers. A previous example that demon strates good results from this work, and which is still being evalu- ated, comes from LGI. Together with the customer Porsche, Elanders invested in a completely new electrical truck that daily transports com- ponents from Elanders’ warehouse in Freiberg, Germany to Porsche’s production plant. Changing to an electrical truck reduces emissions by more than 30 tons annually and is a milestone on the road to more environmentally friendly logistics at Elanders. Material The connection between quality-assured production and manufacturing with a lower environmental impact is becoming evident to more and more companies. Environmental demands from customers and authori- ties can vary greatly from one geographic market Elanders operates to another, but the general trend is clear. Offering sustainable production on every level is becoming a prerequisite to be able to compete, particu- larly in global business. Paper is a comprehensive part of the material used in production in the business area Print & Packaging Solutions and the Group works on monitoring, analyzing, reducing, and actively dealing with paper waste. When possible, Elanders produces print-on-demand, which reduces the risk of unused editions that will be scrapped at a later date. Elanders has several ecolabels in different operations such as the Swan, FSC ® Forest Stewardship Council, Carbon Footprint and Climate Neutral Company. Energy consumption Reducing energy consumption and improved energy efficiency is an important focus area at Elanders and part of the continuous improve- ment work to save energy in operations. Elanders’ goal is to reduce energy consumption and use as much renewable electricity as possible on the markets where it is available. Energy consumption and energy costs are regularly monitored to ensure the goal is met and that measures are always being taken to save energy. Elanders primarily uses electricity and natural gas. When making new investments, Elanders selects the best possible technique from an energy efficiency perspective. For instance, many forklifts in the Group’s facili- ties are electric. Elanders’ Code of Conduct and anti-corruption policy comprises all employees and contains guidelines and regulations for the way Elanders’ employees should relate to customers, suppliers and society in general. All busi- ness in Elanders is conducted with social responsibility and ethics. Taking social responsibility includes promo- ting human rights and fair working conditions as well as counteracting corruption. It is the responsibility of each company’s management that these rules are followed by formulating and communicating guidelines and policies adapted to their specific company. Elanders’ Code of Conduct also comprises suppliers and business partners to ensure the Code of Conduct permeates in every part of the value chain. The Code of Conduct is based on international principles such as the UN Universal Declaration of Human Rights, the UN Global Compact, ILO Declaration on Fundamental Principles and Rights in Working Life and the OECD guidelines for multinational companies. Elanders’ Code of Conduct and Anti-Corruption Policy AUDITED ANNUAL REPORT – BOARD OF DIRECTORS’ REPORT Percentage of renewable electricity All operations ThepercentageofelectricityconsumedbytheGroupthatcomesfrom renewablesourceshasincreasedcomparedtolastyearThisislargelydue tooperationsinSupplyChainSolutionsreplacingmostoftheirenergy supplywithrenewableelectricityasofJanuaryAtthesametime theworktosaveenergyhascontinuedamongotherthingsthroughthe installationofLEDlightinginproductionspaceandoceslessenergy usedinrelationtomachinehoursaswellastheimplementationofenergy ecientelectronicequipmentandsystemsformonitoringandcontrolling energyconsumption Emissions Transportation is currently an indisputable necessity to Elanders’ cur- rent financial and social development. At the same time transportation has a negative effect on people’s health and the environment. Elanders’ emissions into the air primarily consist of carbon dioxide and are largely generated by transportation. Progress is continually being made in different areas to reduce the negative effects of transportation in Elanders, particularly in business area Supply Chain Solutions with its fleet of around 280 trucks. Utiliza- tion of this fleet is to a large extent steered by customer volumes and the kind of transportation a customer needs. However, Elanders tries to make driving as environmentally friendly as possible, find transportation solutions that are as cost and energy efficient as possible, and to optimize customers’ transportation. As a result of continuously upgrading the fleet, Elanders has drastically lowered carbon dioxide emissions. In 2021, all trucks complied with the Euro 6 norm of a maximum of 80 mg/km NOx emissions. A consequence of this high standard has been a dramatic reduction in fuel consumption in the past few years. Elanders also works continuously to streamline transportation, thereby reducing environmental impact. Efficient motors, well-developed GPS systems, driver training, and awarding the most fuel-efficient drivers are all activities that contribute to reducing fuel consumption. Elanders uses different types of solvent in producing printed matter – mostly vegetable solvents, aliphatic solvents as well as isopropanol. Elanders’ goal is to eliminate the use of aromatic solvents since they have a severe negative effect on both health and the environment. The kind of solvents in use are routinely monitored. According to the Environmental Code in Sweden and corresponding legislation in other countries, several printing plants are required to have permits or submit reports depending on their total consumption of sol- vents. Local companies are responsible for making sure they comply with the laws, regulations, and standards valid for their operations and that the necessary measures are taken to meet all requirements. Using solvents also causes emissions of VOC (Volatile Organic Compounds). Elanders continually looks for ways to reduce the environ- mental impact of these emissions without affecting product quality negatively, for example through more efficient methods that reduce consumption or by switching to less volatile alternatives. During the year more investments were made in digital presses with new technology which means lower emissions of VOC and ozone as well as significantly lower energy consumption. Elanders’ long-term goal is to reduce direct and indirect emissions of greenhouse gases. The Group’s greatest impact comes from carbon dioxide emissions from the transportation fleet. Emissions Averagecarbondioxideemissions perkmtons Averagefuelconsumption perkmliters Averagecarbondioxideemissionsperkmtonsisonparwiththe previousyearandisconsideredtoprovideafairviewofaveragecarbon dioxideemissionsfromoperationsovertimesinceitisnotlinkedtothe numberoftrucksinuse Averagefuelconsumptionforandhasbeenadjustedbased onmoreexactcalculationmethodsInfuelconsumptionper kmdecreasedslightlycomparedtoMeasurestoreducefuel consumptionarebeingtakencontinuouslyforinstancebythegradual replacementofbatteriesindividualfollow-upanddrivertrainingaswell asimplementingbonusprogramsconnectedtofuelconsumptionThis workiscontinuous THE EU TAXONOMY CLIMATE DELEGATED ACT In accordance with the Taxonomy regulation ((EU 2020/852) and its delegated acts (the “taxonomy”), companies should identify the eco- nomic activities that are environmentally sustainable based on technical audit criteria. For a certain economic activity to be classified as environ- During the year more investments were made in digital presses with new technology which means lower emissions of VOC and ozone as well as significantly lower energy consumption. 60 ANNUAL AND SUSTAINABILITY REPORT 2021 AUDITED ANNUAL REPORT – BOARD OF DIRECTORS’ REPORT mentally sustainable, it should materially contribute to one, or several, of six defined environmental objectives, not cause significant damage to any of the objectives and abide by fundamental labor law conventions and human rights. In 2021, three key financial ratios will be reported that show how much of the business comes under taxonomy’s technical audit criteria regarding climate change. Based on this Elanders has concluded that the Group financial operations that this reporting encompasses are services regarding road transportation (EU Taxonomy 6.6 Freight transport services by road) under Elanders’ auspices. These services are supplied by business area Supply Chain Solutions. Road transportation is carried out either with owned or leased trucks. The type of vehicle used is decided through dialogue with customers. Based on the customers’ requirements, Elanders works continually to ensure that transportation is as environ- mentally friendly as possible, using as the most cost- and energy-efficient solutions as possible while optimizing customers’ transportation. The following items linked to the above-mentioned road transport have been included in taxonomic activities; revenues from road trans- port; capital expenditures relating to acquired trucks and new right-of- use assets relating to trucks; operating costs related to the above trucks, such as maintenance and repair costs. Since this activity only takes place within one business area, no double counting should be possible. Total (MSEK) Shareof taxonomy- eligible activities(%) Shareof non-taxonomy- eligible activities(%) Turnover ) Capitalexpenditure ) Operatingexpenses ) ) TheGroup’stotalnetsalesreportedaccordingtoprinciplein note ) Currentyear’sinvestmentsintangibleintangibleandright-of- useassetsThisalsoincludescorrespondingassetsfrom businesscombinationsbutnotgoodwillcustomerrelationships andtrademarkswithindefiniteusefullifeSeedetailsinnote and ) Directcostformaintainingthefixedassetscoveredbythe taxonomyregulations LIFE CYCLE MANAGEMENT In Life Cycle Management, Elanders has taken the initiative to create more climate friendly services. There is a huge sustainability factor in extending the life of, and reusing, equipment before it is finally recycled, since most of a product’s environmental impact comes from producing it. In the service area Renewed Tech for IT equipment, Elanders handles obsolete units like computers, monitors, cell phones, servers and other computer accessories. IT equipment is picked up from the customer and each unit is inspected, refurbished and all data, for example company information and personal data, are wiped. Then the products are sold on the second-hand market. Equipment and parts that cannot be reused are properly recycled. Refurbishing equipment can double the product’s lifetime, generating considerable carbon dioxide savings. By using Elanders’ services customers can take a global responsibility for their IT units and reduce their climate impact and thereby contribute to a more circular economy. At the same time, they receive a correct valuation of their equipment which can often be very valuable on the second-hand market today. Customers are also offered full transparency throughout the entire process, which is greatly appreciated. During the year Elanders strengthened its offer in sustainable services by acquiring ReuseIT that is specialized in purchasing, securely erasing, renovating, reselling and renting out used IT equipment. The acquisition of ReuseIT is another step in Elanders’ investments within sustainable services that contribute to a circular economy. As a further step in Elanders’ sustainability work and to actively contri bute to a more circular economy, a partnership with Universeum was initiated at the end of 2020. Universeum is Sweden’s national science center and a powerful arena for academic and popular education in science, technology, and sustainable development. The partnership is focused on reusing electronics, thereby increasing the lifetime of these products, which leads to considerable environmental gains. EMPLOYEES Through a number of acquisitions around the world, the number of employees has more than quadrupled in recent years. The majority of the increase in employees came through the acquisitions of Mentor Media in 2014 and LGI in 2016. Elanders’ companies are to a large degree autonomous and follow the valid laws and regulations in their respective countries and regions. Nonetheless, it is important to have a set of com- mon values within the Group in order to achieve a stable value founda- tion. These values are communicated to the employees through the Code of Conduct, which was updated in 2019. At the end of the year, 7,019 people were employed in some 20 countries on four continents. North- and South America Europe Asia NUMBER OF EMPLOYEES PER REGION Americas EU Asien Lorem ipsum CO 2 -SAVINGS CO 2 -savings 1) in thousands of ton from Elanders’ Renewed Tech operations ) TheCO savingsietheCO equivalenthavebeencalculatedinaccordance withtheprinciplesstatedinRapportBProduktdatabasermiljöfördelar medåterbrukdevelopedbyIVLSvenskaMiljöinstitutetincollaboration withInregoAB ~17 61 ANNUAL AND SUSTAINABILITY REPORT 2021 AUDITED ANNUAL REPORT – BOARD OF DIRECTORS’ REPORT Personnelturnover% Allemployees Therateofpersonnelturnoverhasdecreasedcomparedtotheprevious yearduetofewertemporaryandseasonalstaHowevertemporaryand seasonalstacontinuetocontributetoarelativelyhighrateofturnover Health and safety Employees are Elanders’ greatest asset and their health and safety have the highest priority. A healthy and secure work environment leads to healthy employees that work safely, are more productive, and contribute to society at large. Elanders has a zero vision concerning injuries at the workplace and works continuously on reducing risks that can lead to serious injuries. Elanders’ policy concerning the work environment is found in the Group’s Code of Conduct, where guidelines concerning the identification, management, and prevention of potential safety risks and emergencies are described in order to promote a good working environ- ment and reduce the risk of injuries and illness. It is the responsibility of each company’s management that these rules are followed by formulat- ing and communicating guidelines and policies adapted to their specific work environment. An important indication of how the work environment functions is absence due to illness and Elanders continuously strives to create conditions for as little absence due to illness as possible. In addition to following the guidelines in the Code of Conduct, Elanders continuously identifies improvement measures for personnel in the work environment, such as automation in production and ergonomic workplaces. Most injuries occur in production and the most common workplace injuries at Elanders are minor cuts or wounds from falling. In 2021, Elanders continued to be focused on the health and safety of its employees due to the ongoing pandemic. Preventative measures include working from home when possible, measuring temperatures before allowing entrance to offices and plants for both employees and guests, minimizing trips and holding digitalized meetings. Elanders’ subsidiaries LGI and ITG also launched a joint occupational health vehicle where the employees could get vaccinated against COVID-19 if they so wished. When the vaccination campaign is over, the truck will become an integrated part of occupational health and will be used for other care purposes when visiting the different locations. Together with all the other measures that Elanders has taken, this is another milestone that contributes to battling the coronavirus pandemic as well as keeping Group employees healthy. Last year, Elanders, via the subsidiary Mentor Media, donated one million surgical masks, and 100,000 face shields and isolation gowns to different hospitals in Singapore. It was part of a joint initiative, SG United Initiative, where Mentor Medias’ role was to provide personal protection equipment to the hospitals and other companies provided the logistics around it. Absenceduetoillness% Allemployees Short-termabsence Long-termabsence Absenceduetoillnesshasdroppedcomparedtolastyearprimarilydue toCOVID-Asinthepreviousyeartheincreaseinlong-termabsenceis primarilyrelatedtoCOVID- Equality, equal opportunity, and diversity Because of the development Elanders has gone through in the past few years, partly through major acquisitions, the Group’s composition of employees has changed and it is now significantly more spread out geo- graphically. This has not, however, changed Elanders’ basic premise that long-lasting profitability can only be reached if there is equality, equal opportunity and diversity in the workplace. Among other things, this means that all employees should have the same opportunities to advance their careers. During the year, the work in this area continued as well as the development of a formal Equal Opportunity Plan for the Group that will be regularly evaluated by Elanders’ Board and Group Management. In addition, each company works continuously with matters concerning equality, equal opportunity, and diversity in their respective organiza- tions. Genderdivision% Men women Men women Men women Allemployees Middlemanagement GroupManagement BoardofDirectors SOCIAL CONDITIONS AND HUMAN RIGHTS CSR As an active global group, Elanders wants to be among the best regarding CSR and corporate commitment everywhere the company is involved. There are several different projects concerning social responsi- bility and aid going on in the Group. Each company decides themselves which projects they want to be involved in and support through, for instance, donations and support to regional and local organizations such as schools and orphanages. One example is how Elanders in the USA has supported The United Way of the Quad Cities for many years. The organization helps city residents through activities that improve their health and increase their financial stability, and by providing education. In 2021, as in previous years, Elanders sponsored a campaign where for a week, employees focused on contributing as much as possible to the organization through diverse activities, events, and collections. Another example is support for the program Rede Cultural Beija-Flor for vulnerable children in Brazil through financial aid, printed material, and internships to give children a better start and reduce the number of street kids in the area. LGI and ITG launched a joint occupational health vehicle during 2021. 62 ANNUAL AND SUSTAINABILITY REPORT 2021 AUDITED ANNUAL REPORT – BOARD OF DIRECTORS’ REPORT Together with around ten other Swedish companies, Elanders initiated a collaboration with the organization Pratham Education Foundation in 2017. The innovative education organization was started in 1995 to improve the quality of education in India. Pratham has become one of the largest charitable organizations in the world today. Its founding prin- ciple is to help as many children as possible to achieve higher levels of knowledge through education programs that take into consideration the gaps in the Indian educational system. Pratham’s educational methods, which are based on the student’s actual level of knowledge, have been formed and developed together with researchers Esther Duflo, Abhijit Banerjee, and Michael Kremer who have carried out several field studies on Pratham’s work. They were awarded the Swedish Central Banks Prize in Economic Sciences in Memory of Alfred Nobel 2019 for their work in this area. The project was severely affected in 2021 by the coronavirus pandemic, which has affected India hard. Pratham has worked intensively to keep in touch with the children and villages to ensure that the students continued to receive an education. The work has largely been online, where children have had homework sent to their parents’ or siblings’ cell phones and later submitted it or presented it in a video conversation. The aim of the activities implemented during the year was to create the best prerequisites possible for the children when the school opens again and society goes back to normal. In 2021, around 5,000 volunteers were recruited in Assam and West Bengal who enabled more than 400 villages to continue participating in Pratham’s activities. Fair conditions Elanders’ values regarding fair conditions are established in the Code of Conduct which stipulates that Elanders works to protect international human rights. The Code of Conduct strictly prohibits any kind of forced labor, human trafficking, and child labor. It is self-evident for Elanders to work for children’s right to education and to protect children from economic exploitation and dangerous or harmful jobs. Elanders’ work is based on the UN Universal Declaration of Human Rights and the UN Convention on the Rights of the Child. Elanders’ Code of Conduct also contains prohibition of any kind of harassment or discrimination. Everyone is offered the same opportunities and is treated with respect. Elanders actively supports freedom of speech, freedom of movement, and religious freedom within the framework of applicable legislation, and the Group does not tolerate human rights violations. In addition to this, Elanders provides fair working conditions at the same time as national and local laws are respected in the countries where operations are run. All Elanders employees have the right to a written employment contract. Elanders’ Code of Conduct also comprises suppliers and business part- ners to ensure the Code of Conduct permeates every part of the value chain. Elanders has therefore produced a “Suppliers Code of Conduct”, which is communicated to suppliers and business partners. Each com- pany is currently responsible for making sure that suppliers also comply with the Code of Conduct where considered relevant. In the same way, Elanders controls its suppliers, Elanders is often reviewed by customers to make sure fair conditions are used in production. Elanders has not found a relevant, quantitative key ratio for its work on fair conditions. For the time being, Elanders will continue to focus on making sure the Code of Conduct is communicated to all employees as well as suppliers and business partners. Sustainability initiative Since 2000 Elanders is one of thirteen organizations that contribute to the prize sum of SEK 1 million for WIN WIN Gothenburg Sustainability Award (previously The Gothenburg Award for Sustainable Development). Today the WIN WIN organization is a recognized catalyst for regional, national and global sustainable development, with a particular focus on younger generations. The WIN WIN Youth Award was instituted in 2018 and the organization works with alternate annual themes in ecology, economy and social sustainability. Some of the more well-known laureates are Gro Harlem Brundtland (2002), Al Gore (2008), and Kofi Annan (2011). In 2021 the Icelandic whistleblower Jòhannes Stefànsson was awarded the WIN WIN Gothen- burg Sustainability Award on the theme anti-corruption for his disclo- sure of the so-called Fishrot Files, a corruption scandal with its roots on Iceland and in Namibia. The theme for 2022 is Sustainable Aquaculture. ETHICS AND ANTI-CORRUPTION Elanders’ reputation, ethical behavior, and trustworthiness are highly valued by the Group and its customers and any kind of corruption could impact the Group’s image very negatively. Elanders follows applicable laws and regulations locally and internationally regarding both ethical rules and corruption. The Group’s Anti-Corruption Policy “Anti-Cor- ruption, Anti-Fraud and Anti-Money Laundering Policy” contains guide- lines for handling corruption, fraud and money laundering, describes the way Group employees should relate to customers, suppliers, other stakeholders, and society in general. It clearly states that Elanders has absolutely zero tolerance for any kind of fraud, bribes, or other actions that create unfair advantages, and which transgress against Elanders’ policy, local laws and regulations, industry standards, and ethics codes in the countries the Group is active in. Employees may not accept, be prom- ised, demand, or swindle any kind of advantages in connection with their position in the company. The policy also states that all employees are obliged to comport themselves with integrity and ensure that they under- stand and follow Group guidelines. The policy also contains instructions on how to report any irregularities or deviations from the policy. The updated Anti-Corruption Policy was communicated at the end of 2019 together with an e-learning training for Group employees. In 2021, a total of 81 (77) percent of all white-collar workers at Elanders completed the course. Education of Group employees is an ongoing process. In 2022 the intention is to produce material for use in classroom training, which was postponed due to COVID-19. There will be annual follow-ups to ensure that all employees in the Group have completed the anti-corruption course. The anti-corruption policy also contains instructions for reporting deviations from the policy, i.e., a whistleblower function. In 2021 one case was reported in the whistleblower function. Actions were taken and the case has now been closed. No significant incidents of fraud, corruption, bribes, or money laun- dering have been reported in 2021. THE EU GENERAL DATA PROTECTION REGULATION (GDPR) GDPR became law in 2018 and is intended to protect individuals’ basic rights, which is a human right. At the end of 2019, Elanders therefore produced a course to ensure that employees are knowledgeable about, and act in accordance with, the stipulations of GDPR. In 2021, a total of 81 (75) percent of all white-collar workers at Elanders completed the course. As with the anti-corruption training classroom training will hopefully commence during the latter part of 2022 after a postponement due to COVID-19. There will be annual follow-ups to ensure that all Elanders employees have been trained in GDPR. In the beginning of 2021, Elanders’ Binding Corporate Rules were approved by the Swedish Authority for Privacy Protection (IMY), making it only the third company in Sweden. These rules regulate how Elanders handles personal data to ensure that data protection regula- tions are followed when transferring personal data to Group companies outside the EU/EES. Approval was received after an exhaustive review by IMY and other co-reviewer European data protection authorities as well as an opinion from the European Data Protection Board, EDPB. 63 ANNUAL AND SUSTAINABILITY REPORT 2021 AUDITED ANNUAL REPORT – BOARD OF DIRECTORS’ REPORT Take urgent action to combat climate change and its impacts. Reducing energy consumption is fundamental when Elanders makes new investments. As far as possible, the company uses renew- able energy in the markets where it is available. Continuously upgrading the transportation fleet, ecient motors, well-developed GPS systems, continuously training drivers and awarding the most fuel-ecient drivers contribute to reducing fuel consumption. Build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation. Ensure sustainable consumption and production patterns. Solutions for streamlining and consolidating material flows and deliveries contribute sig- nificantly to reducing Elanders customers’ environmental impact. Life Cycle Management is an important part of the oer where Elanders helps customers in every phase of a product’s life cycle. For instance, the handling of returns of worn-out IT equipment when delivering new products to the customer, recycling computers, monitors and printers and restoring products for reuse on behalf of customers in a sustainable way. Constant appraisals to reduce Elanders’ environmental impact from emissions of volatile organic compounds (VOC) in print operations without negatively aecting quality, e.g., more ecient methods that reduce consumption or switching to less volatile solvents. Promote sustained, inclusive, and sustainable economic growth, full and productive employ- ment and decent work for all. Fair working conditions for all employees through a clear Code of Conduct and continu- ously monitoring the work environment and workers’ rights. Achieve gender equality and empower all women and girls. Reduce income inequality within and among countries. Elanders believes all people are equal indepen- dent of age, gender, ethnicity, sexual orienta- tion, religious beliefs, etc. The Code of Conduct contains the strict prohibition of any kind of harassment or discrimination. Ensure an inclusive and equitable education and promote lifelong learning opportunities for all. Elanders supports several projects that promote raising knowledge levels through education. For example, Elanders works together with around ten other Swedish companies with the organiza- tion Pratham Education Foundation that strives to improve the quality of education in India. Agenda 2030, the UN’s 17 Sustainable Development Goals were adopted by most of the world leaders in 2015 to promote socially, economically and environmentally sustainable development. Elanders contributes to the goals in varying degrees. The ambition is that Elanders sustainability work will create value for all stakeholders and thereby also contribute to these goals. The following seven goals have been identified as the most material for Elanders’ sustainability work: DEVELOPMENT GOALS UN’s sustainable 64 ANNUAL AND SUSTAINABILITY REPORT 2021 AUDITED ANNUAL REPORT – BOARD OF DIRECTORS’ REPORT LIFE CYCLE MANAGEMENT Sustainability aspects: • Waste, recycling and reuse • Carbon dioxide emissions How Elanders creates value: • Extending the life of products and less waste from IT equipment means greater resource eciency and lower carbon dioxide emissions. • Substantial environmental gains can be achieved by investing in and developing unique solutions in companies within Renewed Tech. With Elanders’ global infrastructure these companies can scale up their operations more quickly. Elanders’ power to have an impact: HIGH Electronics’ greatest environmental impact comes from producing them, which is why extending the life of a product as long as possible is so important. Creating solutions for reusing electronics generates environ- mental gains since the electronic compo- nents come to good use instead of being recycled or discarded. PROCUREMENT & INBOUND SERVICES Sustainability aspects: • Sustainable resource solutions • Warehousing eciency How Elanders creates value: • Resource eciency – products and services delivered eciently at the right time. • Elanders helps customers optimize their product flows, warehouse levels and storage space. Elanders’ power to have an impact: MEDIUM Elanders works together with our partners on a strategic, tactical, and operational level in order to provide a combined pur- chasing and procurement process which means that redundant or unnecessary costs are minimized by delivering products and services eciently at the right time. ORGANIZATION Sustainability aspects: • Health and safety • Equality, equal opportunity, and diversity • Social conditions, human rights, ethics, and anti-corruption How Elanders creates value: • Elanders’ Code of Conduct and Anti-corruption Policy comprises all employees, suppliers and business partners. All business in Elanders is conducted with social responsibility and ethically. Elanders’ power to have an impact: HIGH Employees are Elanders’ greatest asset and their health and safety have the highest priority. A healthy and safe work environment leads to healthier employees that work safely, are more productive and contribute to society at large. SUSTAINABLE VALUE CHAIN Elanders creates value through the Sustainability is an integrated part of Elanders’ offer and Elanders aims to create value by being a resource-efficient and sustainable company. 65 ANNUAL AND SUSTAINABILITY REPORT 2021 AUDITED ANNUAL REPORT – BOARD OF DIRECTORS’ REPORT PRODUCTION & ASSEMBLY Sustainability aspects: • Materials and chemicals in products • Energy consumption and energy use • Social conditions, human rights, ethics, and anti-corruption How Elanders creates value: • Our goal is to eliminate the use of aromatic solvents and reduce paper waste through print-on-demand. • Lower energy consumption and using as much renewable electricity as possible. • Elanders’ Code of Conduct and Anti-corruption Policy comprise all employees, suppliers, and business partners. All business in Elanders is conducted with social responsibility and ethics. Elanders’ power to have an impact: MEDIUM Elanders works systematically to reduce our environmental impact and develop products, services, and processes in order to achieve optimal quality without com- promising on sustainability aspects. DISTRIBUTION & OUTBOUND SERVICES Sustainability aspects: • Carbon dioxide emissions • Transportation eciency How Elanders creates value: • Lower fuel consumption through ecient motors, well-developed GPS systems and continuous driver training. Using trucks that comply with the Euro 6 norm of a maximum of 80 mg/km NOx emissions. • Cost-eective transport solutions that optimize customers’ transportation. Elanders’ power to have an impact: MEDIUM Transportation on behalf of custom- ers is out of Elanders’ hands since the utilization of our fleet of trucks is steered by customer volumes and the kind of transportation customers need. However, we strive to ensure driving as environ- mentally friendly as possible, realize the most cost and energy eective transpor- tation solutions possible and optimize our customers’ transportation. For example, we already help customers with transport by rail instead of by boat from Asia. Read more about our Business Model on pages 16–17. AUDITED ANNUAL REPORT – GROUP 66 ANNUAL AND SUSTAINABILITY REPORT 2021 MSEK Note 2021 2020 Net sales 2, 3 11,733.1 11,050.1 Cost of products and services sold –10,088.3 –9,478.5 Gross profit 1,644.8 1,571.6 Selling expenses –336.9 –317.4 Administrative expenses –782.0 –733.0 Other operating income 4 82.6 68.6 Other operating expenses 4 –28.2 –43.9 Operating result 5, 6, 7, 28 580.3 545.9 Financial income 8 25.2 27.2 Financial expenses 8 –123.5 –159.1 Result after financial items 482.0 414.0 Taxes 9 –151.0 –122.2 Result for the year 331.1 291.9 Result for the year attributable to – parent company shareholders 322.3 287.1 – non-controlling interests 8.7 4.8 Earning per share, SEK ) 10 9.12 8.12 ) Therehavebeennodilutioneffects MSEK 2021 2020 Result for the year 331.1 291.9 Items that will not be reclassified to the income statement Actuarial gains/losses on defined benefit pensions plans 8.8 –8.9 Tax eect on actuarial gains/losses on defined benefit pensions plans –2.6 2.6 Items that will be reclassified to the income statement Translation dierences 178.5 –224.9 Change in fair value of the hedge of the net investment abroad –9.6 15.7 Tax eect on the change in fair value of the hedge of net investments abroad 2.0 –3.2 Other comprehensive income 177.1 –218.7 Total comprehensive income for the year 508.2 73.2 Total comprehensive income attributable to – parent company shareholders 499.2 69.5 – non-controlling interests 9.0 3.7 INCOME STATEMENTS STATEMENTS OF COMPREHENSIVE INCOME AUDITED ANNUAL REPORT – GROUP 67 ANNUAL AND SUSTAINABILITY REPORT 2021 MSEK Note 2021 2020 Operating activities Result after financial items 482.0 414.0 Adjustments for items not included in cash flow 12 847.7 892.3 Paid taxes 9, 11 –128.0 –41.8 Cash flow from operating activities before changes in working capital 1,201.7 1,264.5 Cash flow from changes in working capital Increase (–)/decrease (+) in inventory –128.3 76.8 Increase (–)/decrease (+) in operating receivables –253.6 326.3 Increase (+)/decrease (–) in operating payables 243.4 57.7 Cash flow from operating activities 1,063.2 1,725.3 Investing activities Investments in intangible and tangible assets 13, 14 –139.5 –92.7 Divestment of tangible assets 14 11.6 5.7 Acquired and divested operations 29 –1,266.8 –29.5 Change in long-term receivables 0.3 0.8 Cash flow from investing activities –1,394.4 –115.7 Financing activities Amortization of borrowing debts 22 –2,075.4 –166.8 Amortization of lease liabilities 22 –647.6 –657.9 New loans 22 3,089.0 – Other changes in interest-bearing liabilities 12, 22 –199.7 –292.7 Dividend to shareholders –112.1 – Transactions with shareholders with non-controlling interest – 57.6 Cash flow from financing activities 54.2 –1,059.8 Cash flow for the year 11 –277.0 549.9 Cash and cash equivalents at the beginning of the year 1,101.4 655.2 Translation dierence in cash and cash equivalents 73.7 –103.7 Cash and cash equivalents at year-end 19 898.1 1,101.4 STATEMENTS OF CASH FLOW AUDITED ANNUAL REPORT – GROUP 68 ANNUAL AND SUSTAINABILITY REPORT 2021 MSEK Note 2021 2020 ASSETS Fixed assets Intangible assets 13 4,516.5 3,084.9 Tangible assets 14, 27 698.2 518.7 Right-of-use assets 15 2,673.6 1,736.8 Investments in associated companies 16 – – Deferred tax assets 9 341.1 286.5 Other financial assets 11.3 10.5 Total fixed assets 8,240.7 5,637.3 Current assets Inventory 17 400.4 232.9 Accounts receivable 20 1,822.1 1,343.5 Current tax receivables 9 28.3 22.0 Other receivables 133.3 101.2 Prepaid expenses and accrued income 18 276.7 200.8 Cash and cash equivalents 19, 23 898.1 1,101.4 Total current assets 3,558.9 3,001.8 Total assets 11,799.6 8,639.1 EQUITY AND LIABILITIES EQUITY Share capital 353.6 353.6 Other contributed capital 1,275.6 1,275.6 Retained earnings 1,647.3 1,257.7 Equity attributable to parent company shareholders 21 3,276.5 2,887.0 Equity attributable to non-controlling interests 27.4 20.9 Total equity 3,303.9 2,907.8 LIABILITIES Long-term liabilities Lease liabilities 20, 22 2,065.8 1,180.0 Other interest-bearing liabilities 20, 22, 23, 27 3,161.5 1,980.7 Provisions for post-employment benefits 23, 24 98.6 107.7 Other provisions 25 19.3 19.4 Deferred tax liabilities 9 233.6 168.4 Total long-term liabilities 5,578.8 3,456.2 Short-term liabilities Lease liabilities 20, 22 689.0 608.7 Other interest-bearing liabilities 20, 22, 23, 27 131.9 78.3 Accounts payable 20 875.4 641.7 Current tax liabilities 9 109.0 71.4 Other liabilities 160.8 118.8 Accrued expenses and deferred income 26 812.0 595.4 Other provisions 25 138.8 160.8 Total short-term liabilities 2,916.9 2,275.1 Total equity and liabilities 11,799.6 8,639.1 STATEMENTS OF FINANCIAL POSITION AUDITED ANNUAL REPORT – GROUP 69 ANNUAL AND SUSTAINABILITY REPORT 2021 Equityattributabletoparentcompanyshareholders Equity ofnon- controlling interest Total equityMSEK Share capital Other contributed capital Retained earnings Total OpeningbalanceasofJan 353.6 1,275.6 1,147.7 2,777.0 – 2,777.0 Transactionswithshareholderswith non-controllinginterest – – 40.5 40.5 17.2 57.5 Resultfortheyear – – 287.1 287.1 4.8 291.9 Othercomprehensiveincome – – –217.6 –217.6 –1.1 –218.7 ClosingbalanceasofDec 353.6 1,275.6 1,257.7 2,887.0 20.9 2,907.8 Dividendtoshareholders – – –109.6 –109.6 –2.5 –112.1 Resultfortheyear – – 322.3 322.3 8.7 331.1 Othercomprehensiveincome – – 176.8 176.8 0.3 177.1 ClosingbalanceasofDec 353.6 1,275.6 1,647.3 3,276.5 27.4 3,303.9 Retained earnings include other reserves amounting to MSEK 227.0 (56.6). STATEMENTS OF CHANGES IN EQUITY AUDITED ANNUAL REPORT – GROUP, NOTES 70 ANNUAL AND SUSTAINABILITY REPORT 2021 Revenue recognition NetsalesconsistsofsalesofbothproductsandservicesSince allproductsareessentiallyintegratedpartsofservicedeliveries tocustomersasplitofrevenuesintoproductsandservicesisnot meaningful Revenueisrecognizedwhenthecontrolhasbeentransferred tothecustomerinconnectionwithfinaldeliveryRevenuefrom contractswithcustomersareeitherrecognizedatonepointin timeorovertimeastheserviceisperformedinaccordancewith thecontract Lease agreements Leaseagreementsarerecognizedasright-of-useassetswitha correspondingleaseliabilityinthebalancesheetwhenthelease assetisavailabletousebyElanders Leaseliabilitiesarerecognizedasthepresentvalueoffuture leasepaymentsEachpaymentisdividedbetweenamortization oftheleaseliabilityandafinancialcostThefinancialcostisallo- catedovertheleasetermsothateachreportingperiodischarged withanamountcorrespondingtoafixedinterestratefortheliabil- ityrecognizedduringeachperiodLeasepaymentsarediscounted withtheinterestrateimplicitintheleaseifthisratecaneasilybe determinedOtherwisetheGroup’sincrementalborrowingrateis appliedbasedoncurrencyandmaturityofleasecontracts Theright-of-useassetsarerecognizedatcostandincludeinitial presentvalueoftheleaseliabilityRestorationcostsareincluded intheassetifacorrespondingprovisionforrestorationcosts existsTheright-of-useassetisdepreciatedonastraight-line basisovertheassetsusefullifeandtheleasetermwhicheveris theshortest Theleasetermisdeterminedasthenon-cancellableperiodof theleasetogetherwithperiodscoveredbyanoptiontoextend orterminatetheleaseifitisreasonablycertainthattheoption willbeexercisedEvaluationofthecertaintythattheoptionwill beexercisedismadebymanagementwhoconsiderallavailable informationsuchascostsforterminationandtheimportanceof theassetforthebusiness Elandersleasesmainlycompriseofright-of-useassetsforprem- isesmachineryandequipmentandvehiclesShort-termleases andleasesforwhichtheunderlyingassesisoflowvalueare exemptedandisexpensedonastraight-linebasisintheincome statementLeasesoflowvaluemainlyincludeIT-equipmentand oceequipment Foreign currency Itemsthatareincludedinthefinancialreportsfromthevarious unitsintheGroupareoriginallyrecognizedinthecurrencyused intheprimaryeconomicenvironmentwheretherespectiveunit chieflyoperates(functionalcurrency)Intheconsolidatedfinan- cialstatementsallamountsaretranslatedtoSwedishkronawhich istheparentcompany’sfunctionalandreportingcurrency Transactions and balance sheet items Transactionsinforeigncurrencyarereportedineachunitbased ontheunit’sfunctionalcurrencyaccordingtothetransactionday exchangerateMonetaryassetsandliabilitiesinforeigncurrency aretranslatedtobalancesheetdateratesandtranslationdier- encesarereportedundertheresultfortheperiodTranslationdif- ferencesinoperatingreceivablesandpayablesarerecordedunder operatingresultswhiledierencesinfinancialassetsandliabilities arereportedunderfinancialitems Translation of foreign subsidiaries Whenpreparingtheconsolidatedfinancialstatementsthebalance sheetsofforeignoperationsaretranslatedtoSwedishkronawith balancesheetdaterateswhileincomestatementsaretranslated totheaverageexchangeratesfortheperiodTranslationdier- General information Elanders AB (publ.), corporate identity number 556008-1621, is a limited company registered in Sweden. The parent company is registered in Mölndal. Elanders is listed on NASDAQ OMX Stockholm, Mid Cap. The company’s primary business and its subsidi aries are described in the Board of Directors’ Report in this Annual Report. The annual accounts for the financial year ending on 31 December 2021 were approved by the Board and will be presented to the Annual General Meeting on 21 April 2022 for adoption. Accounting principles Financial reporting TheGrouphaspreparedtheannualaccountsaccordingtothe AnnualAccountsActtheEUapprovedInternationalFinancial ReportingStandards(IFRSs)andtheinterpretationsofthe InternationalFinancialReportingInterpretationsCommittee (IFRIC)endorsedbytheEuropeanUnionasofDecember InadditiontheGroupfollowstheSwedishFinancialReporting BoardRecommendationRFRSupplementalAccountingRegula- tionsforGroupswhichspecifiestheadditionstoIFRSsinforma- tionthatarerequiredaccordingtotheprovisionsintheAnnual AccountsActIngroupaccountingallitemsarevaluedatacquisition valueunlessotherwisespecifiedTheGroupreportsinSwedish kronaAllamountsaregiveninmillionsofSwedishkronaunless otherwisespecifiedThefollowingisadescriptionoftheaccounting principlesconsideredelemental Consolidation GroupaccountingcomprisestheparentcompanyElandersAB andcompaniesinwhichElandersABdirectlyorindirectlyholds acontrollinginterestSubsidiariesareallentities(including structuredentities)overwhichthegrouphascontrolThegroup controlsanentitywhenthegroupisexposedtoorhasrightsto variablereturnsfromitsinvolvementwiththeentityandhasthe abilitytoaectthosereturnsthroughitspowerovertheentity Subsidiariesarefullyconsolidatedfromthedateonwhichcontrol istransferredtothegroupTheyaredeconsolidatedfromthedate thatcontrolceasesEquityintheGroupiscomprisedofequity intheparentcompanyandthepartoftheequityinsubsidiaries generatedafteracquisitionAlltransactionsandbalancesbetween groupcompaniesareeliminatedintheconsolidatedaccounts Associated companies Associatedcompaniesarecompaniesinwhichthegrouphasa significantinfluencenormallywhentheholdingequalatleast percentbutlessthan percentofthevotesHoldingsinasso- ciatedcompaniesarerecognizedinaccordancewiththeequity method Business combinations Subsidiariesarereportedinaccordancewiththeacquisitionmethod Acquiredidentifiableassetsliabilitiesandcontingentliabilities arerecordedatfairvaluebasedonthedateofacquisitionThe surplusarisingfromthedierencebetweenthecostoftheshares insubsidiariesandthefairvalueoftheacquiredidentifiableassets andliabilitiesisrecordedasgoodwillAcquisitionvalueisthefair valueoftheassetsleftasreimbursementtotheselleraswellas theliabilitiestakenoverontheacquisitiondateIftheacquisition priceislowerthanthefairvalueoftheacquiredsubsidiary’snet assetsthedierenceisrecordeddirectlyintheincomestatement Additionalpurchasesumsarerecordedasfinancialliabilitiesuntil theyaresettledAllacquisitioncostsareexpensedCompanies acquiredinthecurrentyearareincludedingroupaccountingfrom theacquisitiondateDivestedcompaniesareincludedingroup accountingupuntilthedivestituredate NOTE 1 – ACCOUNTING PRINCIPLES AUDITED ANNUAL REPORT – GROUP, NOTES 71 ANNUAL AND SUSTAINABILITY REPORT 2021 encesarerecognizedastranslationreservesunderequityThe accumulatedtranslationdier encesareredistributedandreported aspartofcapitalgainslossesintheeventofadivestitureof aforeignoperationGoodwillandadjustmentstofairvalueat- tributabletoacquisitionswithanotherfunctionalcurrencythan Swedishkronaarereportedasassetsandliabilitiesintheacquired unit’scurrencyandtranslatedtobalancesheetdaterates Remuneration to employees Remunerationtoemployeesintheformofwagespaidvacation andsickleavebonuspensionsandsoforthisreportedasitis earnedPensionsandotherpost-employmentcontributionsare classifiedasdefinedcontributionplansordefinedbenefitplans Defined contribution plans Inthecaseofdefinedcontributionplansthecompanypaysafixed feetoaseparateindependentlegalentityandisnotobligatedto payfurtherfeesGrouppaymentsfordefinedcontributionplans arerecordedasanexpenseastheyareearnedwhichisnormally thesameperiodthepremiumispaid Defined benefit plans Theliabilityreportedinthebalancesheetreferringtodefined benefitplansisequivalenttothedefinedbenefitplanobligation onthebalancesheetdatelessthefairvalueofplanassetsActu- arialchangesarerecordedwithinothercomprehensiveincome IntheElandersGroupthereareanumberofemployeesthathave definedbenefitITPplansinAlectawhichareclassifiedasdefined benefitmulti-employerpensionplanThismeansthatacompany mustreporttheirproportionalshareofthedefinedbenefitpen- sionobligationandtheplanassetsandexpensesthatareconnect- edtothispensionplanSinceAlectacannotprovidethenecessary informationthesepensionobligationsarerecognizedasdefined contributionpensionplansaccordingtopointinIAS Government grants Governmentgrantsarerecognizedinthebalancesheetasprepaid incomewhenthereisreasonableassurancethatgrantswillbe receivedandthatElanderswillmeettheconditionsassociated withthegrantsGrantsarereportedasacostreductionandac- cruedoverthesameperiodsastherelatedcoststhatthegrantis intendedtocompensate Taxes Theperiod’staxexpenseorincomeconsistsofcurrenttaxand deferredtaxCurrenttaxisbasedonthefiscalresultfortheyear Theannualfiscalresultdiersfromtheresultreportedfortheyear duetoadjustmentsfornon-taxableandnon-deductibleitems Deferredtaxistaxrelatingtotaxableortax-deductibletempo- rarydierencesthatcauseorreducetaxinthefutureDeferred taxiscalculatedaccordingtothebalancesheetmethodbasedon temporarydierencesbetweenrecordedandfiscalvaluesofas- setsandliabilitiesCalculationoftheamountsisbasedonhowthe temporarydierencesareexpectedtoreverseusingenactedtax ratesortaxratesannouncedonthebalancesheetdateDeferred taxliabilitiesthatrefertotaxdeficitsanddeductibletemporary dierencesareonlyreportedincaseswhereitisprobablethat taxdeficitscanberecognizedagainsttaxsurplusesinthefuture Deferredtaxisreportedasanincomeoranexpenseintheincome statementexceptincaseswhereitreferstoatransactionthatis recordedinothercomprehensiveincomeThenthetaxeectis recordeddirectlyinothercomprehensiveincomeDeferredtax assetsandliabilitiesareosetagainsteachotheriftheyreferto incometaxthatischargedbythesametaxauthorityandwhere theGroupintendstopaythenetamountintax Earnings per share Earningspershareiscalculatedbydividingtheresultfortheyear attributabletoparentcompanyshareholderswiththeaverage numberofoutstandingsharesduringtheperiodTheaverage numberofoutstandingsharesduringtheperiodisadjustedforall potentialdilutionofordinaryshareswhencalculatingearningsper shareafterdilution Tangible assets Tangibleassetsarereportedattheiracquisitionvalueless accumulateddepreciationandwrite-downsTangibleassets arestraight-linedepreciatedovertheestimatedusefullifeof theassetNodepreciationonlandismadeCostsforrepairs andmaintenancearerecordedasexpensesThefollowinguseful livesareusedtocalculatedepreciation •Buildings –years •Servicefacilitiesinbuildings –years •Landimprovements years •Printingpressesoset –years •Printingpressesdigital –years •Othermechanicalequipment –years •Computerequipment andsystems –years •Vehicles years •Otherequipment –years Theresidualvalueandusefullifeofassetsaretestedonevery closingdayCapitalgainslossesfromthesaleoftangibleassets arerecordedasOtheroperatingincomerespectivelyOtheroper- atingexpenses Intangible assets Goodwill Goodwillisthedierencebetweentheacquisitionvalueandthe Group’sshareofthefairvalueoftheacquiredsubsidiary’sassoci- atedcompany’sorjointlycontrolledentity’sidentifiableassets liabilitiesorobligationsonthedateofacquisitionIfatacquisi- tionthefairvalueoftheacquiredassetsliabilitiesorobligations exceedtheacquisitionpricethedierenceisrecordeddirectly asincomeintheincomestatementGoodwillhasanindefinite usefullifeandisrecordedatacquisitionvaluelessaccumulated write-downsWhenacompanyissoldtheportionofgoodwill attributabletothatcompanywhichhasnotbeenwritten-downis calculatedincapitalgainslosses Other intangible assets Otherintangibleassetsarecustomerrelationsbrandsfavorable contractsidentifiedatthetimeofanacquisitionaswellasthe costofpurchasinganddevelopingsoftwareInternallycreated intangibleassetsarereportedasanassetonlyincaseswherean identifiableassethasbeencreateditisfairlycertainthatthe assetwillleadtofinancialgainsandinvestedexpensesfor develop mentscanbecalculatedreliablyIfitisnotpossible toreportaninternallycreatedintangibleassetthecostsfor developmentarerecordedasexpensesintheperiodinwhich theyoccurOtherintangibleassetsfromacquisitionsarereported atfairvalueonacquisitiondateandinsubsequentperiodsother intangibleassetsarereportedwithadeterminedusefullifeat acquisitionvaluelessaccumulatedamortizationandwrite-downs Trademarkswithindefiniteusefullifearerecordedatacquisition valuelessaccumulatedwrite-downsUsefullifeforotherintangible assetsbesidestrademarkswithindefiniteusefullifeisnormally –years NOTE 1 – ACCOUNTING PRINCIPLES (CONT.) AUDITED ANNUAL REPORT – GROUP, NOTES 72 ANNUAL AND SUSTAINABILITY REPORT 2021 Impairment losses Groupassetsareassessedateveryreportingdatetodetermine whetherornotthereareapotentialneedforawrite-downPoten- tialimpairmentlossesrelatingtogoodwillandintangibleassets withindefiniteusefullifeishowevertestedatleastonceayear Whenthisismadetherecoverableamountoftheassetiscalcu- latedGoodwillandIntangibleassetswithindefiniteusefullifeare allocatedtothesmallestcashgeneratingunitwhichcorresponds togroupoperatingsegmentsTherecoverableamountisthe highestofthevalueinuseorthenetrealizablevalueoftheasset Thevalueinuseisthecurrentvalueofallinandoutpayments attributabletotheassetduringitsestimatedusefullifetogether withthecurrentnetrealizablevalueattheendoftheassetsuseful lifeIfthecalculatedrecoverableamountislowerthanthebook valueawrite-downismadeequivalenttotheasset’srecoverable amountPriorwrite-downsarerecoveredwhenachangeoccursin thepremisesthatwerethebasisfordecidingtheassets’recover- ableamountwhenitwaswritten-downandwhichentailsthat thewrite-downisnolongerconsiderednecessaryRecoveriesof priorwrite-downsaretestedindividuallyandarerecordedinthe incomestatementImpairmentlossesrelatingtogoodwilland intangibleassetswithindefiniteusefullifearenotrecoveredina followingperiod Inventory Inventoryisvaluedatthelowerofcostandnetrealizablevalue CostiscalculatedinaccordancewiththeFirst-inFirst-out method(FIFO)orweightedaveragepricesAcquisitionvalue includesthecostofmaterialsdirectlaborcostsandoverhead chargesinvolvedinproductionofthegoodsNetrealizablevalue isthecalculatedsalesvaluelesssalesexpenses Financial instruments Afinancialassetorliabilityisrecordedinthebalancesheetwhen Elandersbecomesapartyintheinstrument’scontractualcondi- tionsAfinancialassetisderecognizedfromthebalancesheet whentherightsinthecontractarerealizedhavematuredorthe companylosescontroloverthemAfinancialliabilityisderecog- nizedfromthebalancesheetwhentheobligationinthecontract ismetorresolvedinsomeotherwayFinancialinstrumentsare valuedthefirsttimeatfairvalueplustransactioncostswhich appliestoallfinancialassetsandliabilitiesnotrecognizedatfair valuethroughtheresultFinancialassetsandliabilitiesrecog- nizedatfairvaluethroughtheresultarevaluedthefirsttimeat fairvaluewhileattributabletransactioncostsarevaluedthrough theresultAcquisitionsanddivestituresoffinancialassetsare recordedonthedateofbusinesswhichisthedatethecompany pledgestoacquireorselltheassetexceptincaseswherethe companyacquiresorsellslistedsecuritiesinwhichcasesettle- mentdateaccountingisappliedFinancialassetsarecontrolled ateveryexternalreportinginstancetodeterminewhetherornot thereareobjectiveindicationsthatoneoragroupoffinancialas- setsshouldbewritten-downFinancialinstrumentsarerecorded attheiramortizedcostorfairvaluedependingontheinitialclas- sification Calculation of fair value for financial instruments Ocialquotationsatyear-endareusedtodeterminethefairvalue oflong-termderivativeinstrumentsThemarketvalueofother financialassetsandliabilitiesisdeterminedbygenerallyaccepted methodssuchasdiscountingoffuturecashflowswiththequoted interestratecorrespondingtotheperiodofthecontract Amortized cost Amortizedcostiscalculatedwiththehelpofthecompoundinter- estmethodwhichmeansthatpremiumsordiscountstogether withdirectlyrelatedexpensesorincomeisrecordedoverthe periodthecontractisvalidwiththehelpofthecalculatedcom- poundinterestTheamortizedcostisthevaluegeneratedfroma presentvaluecalculationwiththecompoundinterestrateasthe discountfactor Osetting financial assets and liabilities Financialassetsandliabilitiesaresetoagainsteachotherand presentedasnetamountinthebalancesheetwherethereexistsa legalrighttosetoandwheretheintentionistosettletheitems withanetamountorrealizetheassetandliabilityatthesame time Cash and cash equivalents Cashandcashequivalentsarecashinfinancialinstitutionsand short-termliquidplacementswithatermoflessthanthree months Accounts receivable AccountsreceivablearecategorizedasLoansandreceivablesare initiallyrecognizedattheamountofconsiderationthatisuncon- ditionalAccountsreceivableareamountsduefromcustomersfor servicesperformedintheordinarycourseofbusinessorgoods soldTheyaregenerallydueforsettlementwithin–days andthereforeareallclassifiedascurrentThegroupholdsthe tradereceivableswiththeobjectivetocollectthecontractualcash flowsandthereforemeasuresthemsubsequentlyatamortized costThegroupappliesthesimplifiedapproachtomeasuring expectedcreditlosseswhichusesalifetimeexpectedlossallow- anceTomeasuretheexpectedcreditlossestradereceivables andcontractassetshavebeengroupedbasedonsharedcredit riskcharacteristicsandthedayspastdueTheexpectedlossrates arebasedonthepaymentprofilesandhistoricalcreditlosses experiencedwithinthisperiodTradereceivablesarewritteno whenthereisnoreasonableexpectationofrecoveryImpairment lossesarepresentedasnetimpairmentlosseswithinoperating profitSubsequentrecoveriesofamountspreviouslywritteno arecreditedagainstthesamelineitemTheGroupusesfactoring whichmeansthatcertainaccountsreceivablearetransferredtoa factoringcompanyinexchangeforcashWiththetransfertothe factoringcompanythecreditriskalsotransitionsandtheGroup isthereforenotreportingthetransferredassetsinthebalance sheet Long-term receivables, current receivables and other receivables ThereceivablesabovearecategorizedasLoansandreceivables whichmeanstheyarerecordedatamortizedcostInthecasethe termofareceivableisshortitisrecordedatitsnominalvalue withoutadiscountaccordingtothemethodforamortizedcost Derivative instruments Derivativeinstrumentsarerecordedattheirfairvalueinthebal- ancesheetChangesinthevalueofcashflowhedgesarereported inparticularcategoriesunderothercomprehensiveresultsuntil thehedgeditemisrecordedintheincomestatementAnyresult onhedgeinstrumentsattributabletotheeectivepartofthe hedgearerecordedasequityunderhedgeprovisionsAnyresult onhedgeinstrumentsattributabletotheineectivepartofthe hedgearerecordedintheincomestatementHedgesofnet investmentsinforeignsubsidiariesarerecordedinthesameway ascashflowhedgeswiththeexceptionthatanyeectsfromthe hedgeisrecordedinthetranslationreserve NOTE 1 – ACCOUNTING PRINCIPLES (CONT.) AUDITED ANNUAL REPORT – GROUP, NOTES 73 ANNUAL AND SUSTAINABILITY REPORT 2021 Accounts payable AccountspayablearecategorizedasOtherfinancialliabilities whichmeanstheyarereportedatamortizedcostAccountspay- ablearerecordedattheirnominalvaluewithoutadiscountdueto theirexpectedshort-term Other financial liabilities LiabilitiestocreditinstitutionsarecategorizedasOtherfinancial liabilitieswhichmeanstheyarereportedatamortizedcostand directlyrelatedexpensessuchasarrangementfeesaredistributed throughouttheperiodoftheloanwiththehelpofthecompound interestmethodFinancialliabilitiesareclassifiedasshort-term unlesstheGrouphasanunconditionalrighttopostponethe paymentofthedebtforatleastmonthsaftertheendofthe reportingperiod Other liabilities at fair value Otherliabilitiesatfairvaluecompriseliabilitiesattributable toputcalloptionsrelatedtoacquisitionsofnon-controlling interestsTheamountthatmaybepaidiftheoptionisexercised isinitiallyrecognizedasafinancialliabilityatthepresentvalue ofthestrikepriceapplicableattheperiodintimewherethe optioncanfirstbeexercisedChangesinvaluearerecognized overequity Provisions Provisionsarerecordedinthebalancesheetwhenacompanyhas aformalorinformalobligationasaresultofapasteventanditis likelythatanoutflowofresourceswillbenecessarytoresolvethe obligationandareliableestimationoftheamountcanbemade ProvisionsforrestructuringcostsarereportedwhentheGroup hasanestablisheddetailedrestructuringplanthathasbeenan- nouncedtothepartiesconcernedandthereisaclearexpectation thattheplanwillbeimplementedProvisionsarereconsidered everytimeanexternalreportismade Reporting on segments Thetwobusinessareasarereportedasoperatingsegments sincethisishowtheGroupisgovernedThePresidenthasbeen identifiedasthehighestexecutivedecision-makerandfollows thedevelopmentoftheoperatingsegmentsbasedonsalesand operatingprofitbutnotassetsorliabilitiesperreportable segmentTheoperationswithineachreportablesegmenthave similareconomiccharacteristicsandresembleeachotherregard- ingthenatureoftheirproductsandservicesproductionpro- cessesandcustomertypesSalesbetweensegmentsaremadeon marketsterms Whenpresentinggeographicalsalesthecustomer’slocationhas determinedwhichgeographicareasalesareallocatedto Alternative performance measures TheAnnualreportincludesalternativeperformancemeasures formonitoringtheGroup’soperationsAlternativeperformance measuresareperformancemeasuresthathavenotbeendefined byIFRSForreconciliationoftheprimaryalternativeperformance measuresandfinancialdefinitionsseepages– Important estimations and assessments Whenpreparingthefinancialreportsestimationsandassumptions aremadeaboutthefuturethateectbalancesheetandincome statementitemsintheannualaccountsTheseassessmentsare basedonhistoricexperienceandthevariousassumptionsthat GroupManagementandtheBoardofDirectorsconsiderplausible underexistingcircumstancesIncaseswhereitisnotpossibleto ascertainthebookvalueofassetsandliabilitiesthroughinforma- tionfromothersourcestheseestimationsandassumptionsform thebasisofthevaluationIfotherassumptionsaremadeorother circumstancesinfluencethemattertheactualoutcomecandier fromtheseassessmentsIndividualassessmentscanhaveapar- ticularlysignificanteectonElanders’resultandpositioninthe areasofgoodwillimpairmenttestingvaluationoftaxlosscarry forwardsandprovisions Goodwill and trademarks Goodwillandtrademarksthathasanindefiniteusefullifeissub- jecttoimpairmenttestsannuallyorwhenthereisanindication thatawrite-downmaybeneededTestingisperformedonthe lowestidentifiedcashgeneratinglevelwhichforElandersisthe operatingsegmentlevelTheimpairmenttestcontainsanumber ofassumptionsthatcanaccordingtodierentassessmentshave asignificantimpactonthecalculationofrecoverablevaluessuch as •operatingmarginsresults •discountinterest •growthinflation Essentialassumptionswhentestingtheneedforwrite-downsand adescriptionoftheeectofplausiblepossiblechangesinthese assumptionsthatarebasisofthecalculationsarefoundinnote Valuation of tax loss carry forwards Deferredtaxassetsconcerningtaxlosscarryforwardsreported bytheGrouphavebeentestedatyear-endanditisdeemed probablethatthesecanbesetoagainsttaxablegainsThetax assetsprimarilyrefertoSwedishtaxlosscarryforwardsthatcan beutilizedforanunlimitedamountoftimeTheGroup’sSwedish operationshavehistoricallybeenprofitableandareexpectedto generateasubstantialsurplusinthefutureElanderstherefore believesitissafetosaythatitwillbepossibletosetothedeficit deductionwhichthetaxassetsstemfromagainstfuturetaxable surpluses New standards, amendments and interpretations of existing standards Standards, amendments and interpretations of existing standards that came into eect during 2021 Duringtheyearnointerpretationsoramendmentsofexisting standardshavecomeintoeectandhadasignificanteecton Elanders’financialreports Standards, amendments and interpretations of existing standards that have not yet come into eect Noneworamendedstandardsthathavenotyetcomeintoeect areexpectedtohaveamaterialimpactonElanders’financial reports NOTE 1 – ACCOUNTING PRINCIPLES (CONT.) AUDITED ANNUAL REPORT – GROUP, NOTES 74 ANNUAL AND SUSTAINABILITY REPORT 2021 REPORTING BY SEGMENT SupplyChain Solutions Print&Packaging Solutions MSEK Net sales Operating expenses – – – – Operating result Net financial items – – – – Result before tax Investments Depreciation and amortization – – – – Goodwill Trademarks with indefinite useful life – – Groupfunctions Eliminations TheGroup MSEK Net sales – – Operating expenses – – – – Operating result – – – – Net financial items – – – – – – Result before tax – – – – Investments – – Depreciation and amortization – – – – – – Goodwill – – – – Trademarks with indefinite useful life – – – – FinancialincomeandexpensesarenotallocatedtotherespectivebusinessareassincethefinancingoftheGroupismanagedbyGroupFinance Thetwobusinessareasarereportedasoperatingsegmentssince thisishowtheGroupisgovernedandthePresidenthasbeen identifiedasthehighestexecutivedecision-makerTheoperations withineachoperatingsegmenthavesimilareconomiccharac- teristicsandresembleeachotherregardingthenatureoftheir productsandservicesproductionprocessesandcustomertypes Theseoperationshavethusbeenmergedintooneoperatingseg- mentwhichforElandersisthesameasareportablesegment Salesbetweensegmentsaremadeonmarketterms NOTE 2 – SEGMENT REPORTING AUDITED ANNUAL REPORT – GROUP, NOTES 75 ANNUAL AND SUSTAINABILITY REPORT 2021 SALES BY GEOGRAPHIC AREA MSEK Germany USA Singapore China Sweden United Kingdom Hungary Switzerland Poland Netherlands Other countries Total FIXED ASSETS BY GEOGRAPHIC AREA MSEK Germany USA Netherlands Czech Republic Singapore United Kingdom Sweden Poland Hungary China Other countries Total Information concerning the Group’s largest customers Elandershastwocustomerswhosesalesexceedpercentofthe Groups’netsalesInsalestotheGroup’slargestcustomer represent()percentwhilesalestothenextlargestcustomer represent()percentofthetotalnetsalesSalestothese customersismadetoseveraloftheirdivisionsonseveral continentsandisbasedonmultiplestand-aloneagreements Thethreelargestcustomersaremainlyattributabletothe segmentSupplyChainSolutionsTheGroup’stenlargest customerstogetherrepresents()percentoftotalnetsales Fixedassetsaboveincludeotherintangibleassetstangiblefixedassetsaswellasright-of-useassetsGoodwillandtrademarkswith indefiniteusefullifeandabookvalueofMSEK()havenotbeenallocatedbygeographyTheyareonlyallocatedbysegment NOTE 2 – SEGMENT REPORTING (CONT.) AUDITED ANNUAL REPORT – GROUP, NOTES 76 ANNUAL AND SUSTAINABILITY REPORT 2021 Revenuehasbeendividedintogeographicmarketsmainrevenue streamsandcustomersegmentssincethesearethecategories theGroupusestopresentandanalyzerevenueinothercontexts Incomeforeachcategoryispresentedperoperatingsegment TheGroup’scustomercontractsareeasytoidentifyandproducts andservicesinacontractarelargelyconnectedanddependenton eachotherandthereforepartofanintegratedoer Mainrevenuestreamsarepresentedbasedontheinternal namesusedintheGroupSourcing&Procurementservicesrefer tothepurchaseandprocurementofproductsforcustomersas wellashandlingtheflowsconnectedtotheseproductsFreight andtransportationservicesrefertorevenuefromfreightand transportationwithourowntrucksaswellaspurefreightfor- wardingOthersupplychainservicessuchasfulfillmentkitting warehousingassemblyandaftersalesservicesarepresented underOthercontractlogisticsservicesOtherworkservicesrefer topureprintservicesandotherservicesthatdonotfitintoanyof thefirstthreecategoriesIntra-groupinvoicingregardinggroup functionsisreportednetinnetsalestogroupcompanies Supply Chain Solutions Print & Packaging Solutions Total MSEK Total net sales Less: net sales to group companies – – – – – – Net sales Supply Chain Solutions Print & Packaging Solutions Group MSEK Customer segments Automotive Electronics Fashion & Lifestyle Health Care & Life Science Industrial Other Net sales Main revenue streams Sourcing and procurement services – – Freight and transportation services Other contract logistics services Other work/services Net sales NOTE 3 – DISAGGREGATION OF REVENUE AUDITED ANNUAL REPORT – GROUP, NOTES 77 ANNUAL AND SUSTAINABILITY REPORT 2021 Supply Chain Solutions Print & Packaging Solutions Group MSEK Geographic markets Europe Germany Sweden United Kingdom Hungary Switzerland Poland Netherlands Other countries Europe total Asia Singapore China India Other countries Asia total North and South America USA Other countries North and South America total Other Net sales OTHER OPERATING INCOME MSEK Exchange rate gains Gains from the sales of fixed assets Insurance compensations Other Total OTHER OPERATING EXPENSES MSEK Result from investments in associated companies – – Exchange rate losses – – Losses from the sales of fixed assets – – Other – – Total – – NOTE 3 – DISAGGREGATION OF REVENUE (CONT.) NOTE 4 – OTHER OPERATING INCOME AND OTHER OPERATING EXPENSES AUDITED ANNUAL REPORT – GROUP, NOTES 78 ANNUAL AND SUSTAINABILITY REPORT 2021 SALARIES AND OTHER REMUNERATION BoardandCEO Basicwageincl otherbenefits Variableremuneration Otheremployees MSEK Parent company Subsidiaries Total Salariesandremuneration Socialsecurity contributions Pensioncontributions MSEK Parent company Subsidiaries Total AVERAGE NUMBER OF EMPLOYEES Women Men Total Parent company Sweden Subsidiaries Germany China Singapore Hungary Czech Republic Poland USA India United Kingdom Sweden Netherlands Brazil Austria Italy Mexico Taiwan Romania Russia – – Canada – – – – France – – Total NOTE 5 – PERSONNEL AUDITED ANNUAL REPORT – GROUP, NOTES 79 ANNUAL AND SUSTAINABILITY REPORT 2021 GENDER DISTRIBUTION IN MANAGEMENT Women Men Total Board members Group Management – – Supervisors TheBoardalsoincludestwoemployeerepresentatives REMUNERATIONTOTHEBOARDCHIEFEXECUTIVEOFFICERANDOTHERSENIOROFFICERS SEK ’000s Basic wage/ Board remuneration Variable remuneration Other benefits Pension contributions Total Chairman of the Board – – – Board members (8 persons) – – – Chief Executive Ocer Other senior ocers (6 persons) Total remuneration to the Board, CEO and senior ocers ForallocationoftheremunerationtoeachBoardmemberpleaseseepage REMUNERATIONTOTHEBOARDCHIEFEXECUTIVEOFFICERANDOTHERSENIOROFFICERS SEK ’000s Basic wage/ Board remuneration Variable remuneration Other benefits Pension contributions Total Chairman of the Board – – – Board members (8 persons) – – – Chief Executive Ocer Other senior ocers (6 persons) Total remuneration to the Board, CEO and senior ocers NOTE 5 – PERSONNEL (CONT.) AUDITED ANNUAL REPORT – GROUP, NOTES 80 ANNUAL AND SUSTAINABILITY REPORT 2021 Basic wage/Board remuneration TheChairmanoftheBoardandBoardmembersreceivecompen- sationfortheirparticipationontheBoardandcommitteework fromthetotalremunerationsumfortheBoarddeterminedbythe AnnualGeneralMeetingBoardmembersanddeputiesemployed intheGroupdidnotreceiveanyfeesorbenefitsinadditionto thosepertainingtotheiremploymentTheChairmanoftheBoard hasnotreceivedanycompensationotherthanBoardandcommit- teeremunerationRemunerationtotheChiefExecutiveOcerthe formerChiefExecutiveOcerandotherseniorocersconsists ofabasicsalaryvariableremunerationotherbenefitsandpen- sionSeniorocersarethepersonswhotogetherwiththeChief ExecutiveOcercomprisedGroupManagementin Variable remuneration Theproportionbetweenbasicsalaryandvariableremuneration correspondstotheocer’sresponsibilityandauthorityForthe ChiefExecutiveOcerandtheChiefFinancialOcervariablere- munerationshouldnotexceed()and()percentrespec- tivelyoftheirannualsalaryFortheotherseniorocersvariable remunerationmaynotexceedpercentoftheirannualsalary Variableremunerationisbasedonresultsinrelationtoindividually targetedgoals PensionbenefitsaswellasotherbenefitstotheChiefExecutive OcerandseniorocersarepartofthetotalremunerationThe variableremunerationrepresentstheexpenseforthefinancial yearwhichisnormallypaidoutin ThevariableremunerationfortheChiefExecutiveOcer isbasedongoalsestablishedbytheBoardForothersenior ocersvariableremunerationisbasedongoalsestablishedby thePresidenttogetherwiththeremunerationcommitteeNo variableremunerationoranyotherkindofremunerationhada dilutioneect Other benefits “Otherbenefits”referstohousingcompanycarsetc Pensions TheGrouphasbothdefinedbenefitanddefinedcontribution pensionplansPensioncostisthecostthataectstheresultfor theyearOneformeremployeeandmemberofGroupManage- menthaddefinedbenefitanddefinedcontributionpensionplans Thepresentvalueofthedefinedbenefitobligationunderthose plansDecemberwasMSEK()onthebalancesheet dateAllpensionsarefullyvestediethereisnodependencyon futureemployment ThecurrentChiefExecutiveOceronlyhasadefinedcontribu- tionpensioncorrespondingtopercentofthesalarypension ThesalarypensionisbasedonthebasicsalaryTheretirement ageisyears Fortheotherseniorocerstheretirementageisyears Pensionprovisionsarenomorethanpercentofthebasicwage orifapplicablenomorethantheITPcostandthelegalgeneral pensionortheequivalent Financial instruments Thereisnocompensationorbenefitsintheformoffinancial instruments Other remuneration Nootherremunerationshavebeendistributed Severance payments TheperiodofnoticeforterminationoftheChiefExecutiveOcer bythecompanyismonthsTheperiodofnoticefromtheChief ExecutiveOcerismonthsTheperiodofnoticefortermina- tionofotherseniorocersisnormallymonthsUsuallyno severancepayispaidnomatterwhichpartygivesnoticeNormal wagesarepaidduringtheperiodofnotice Deviations from the guidelines TheBoardisentitledtodeviatefromtheaboveguidelinesifthe Boarddeterminesthattherearespecialreasonsthatinspecific casescanjustifythisTheBoardhasduringtheyeardeviatedfrom theguidelinesforoneoftheseniorocersregardingthevariable remunerationandthelimitationatpercentofthebasicwage Preparation and decision process Theremunerationcommitteehasduringtheyearpresentedthe Boardwithrecommendationsconcerningprinciplesfortheremu- nerationofseniorocersTherecommendationshaveincluded proportionsbetweenfixedandvariableremunerationaswellas thesizeofpossibleraisesInadditiontheremunerationcommit- teehasproposedcriteriafordecidingonvariableremunerationas wellaspensiontermsandseverancepayTheBoardhasdiscussed theremunerationcommittee’sproposalsandmadeitsdecisions guidedbytheirrecommendations TheBoardhasdeterminedtheremunerationfortheChief ExecutiveOcerforthefinancialyearofbasedontheremu- nerationcommittee’sproposalsTheChiefExecutiveOcerhas determinedtheremunerationforotherseniorocersafterconsul- tationwiththechairmanoftheremunerationcommittee Membersoftheremunerationcommitteeduringtheyearwere CarlBennetChairmanPamFredmanErikGabrielsonLinus KarlssonandJohanSternTheremunerationcommitteemeets whennecessarybutatleastonceayeartoprepareproposalsfor theremunerationoftheChiefExecutiveOcerandagreeordis- agreetohisproposalforremunerationandconditionsforsenior ocerswhoreportdirectlytohimInadditiontheremuneration committeedrawsupprinciplesforsalarylevelsandemployment termsforGroupManagementTheremunerationcommitteepro- posesremunerationtermsandprinciplestotheBoardthatthen decidesonthesemattersTheremunerationcommitteehasmet onceinWhennecessarythecommitteehasbeensupported byexternalexpertiseinmattersconcerningcompensationlevels andstructures NOTE 5 – PERSONNEL (CONT.) AUDITED ANNUAL REPORT – GROUP, NOTES 81 ANNUAL AND SUSTAINABILITY REPORT 2021 MSEK PwC Audit assignment Audit-related services – – Tax advisory services – Other services – Other Audit assignment Audit-related services Tax advisory services Other services Total Theauditassignmentreferstofeesforthestatutoryauditieworkthatwasnecessarytodelivertheauditor’sreportaswellas so-calledauditadviceprovidedinconnectionwiththeauditengagementThetotalfeetoPwCanditsnetworkamountedto MSEK()duringtheyearofwhichMSEK()wasthefeefortheauditassignment TheparentcompanyhaspaidMSEK()inremunerationtotheauditfirmPricewaterhouseCoopersABfortheauditengagement ofwhichMSEK()relatedtootherservices NOTE 6 – FEES TO THE AUDITORS NOTE 7 – COSTS CLASSIFIED BY NATURE MSEK Costs for goods for resale and other production material Personnel costs Freight costs Other production costs Costs for depreciation and write-downs Cost for advertising and other selling expenses Other costs Total Thetableshowsthetotalcostforsoldproductsandservicessalescostsandadministrativecostsallocatedpertypeofcost AUDITED ANNUAL REPORT – GROUP, NOTES 82 ANNUAL AND SUSTAINABILITY REPORT 2021 FINANCIAL INCOME MSEK Interest income Exchange rate gains Other Total FINANCIAL EXPENSES MSEK Interest expenses leasing liabilities – – Interest expenses other liabilities – – Exchange rate losses – – Other – – Total – – NOTE 8 – FINANCIAL INCOME AND EXPENSES RECORDED TAX MSEK Current tax on the result for the year – – Withholding tax on dividends and other taxes – – Correction of previous years’ current tax expense – – Deferred tax – Recorded tax – – RECONCILIATION OF RECORDED TAX MSEK Result before taxes Tax according to Swedish tax rate of 20,6 (21.4)% – – Tax eect of: Dierences in tax rates for foreign subsidiaries – – Non-deductible costs – – Revaluation of deferred taxes – – Correction of previous years’ tax expense – – Withholding tax on dividends – – Other – – Recorded tax – – NOTE 9 – TAXES AUDITED ANNUAL REPORT – GROUP, NOTES 83 ANNUAL AND SUSTAINABILITY REPORT 2021 DEFERRED TAX ASSETS AND LIABILITIES BY NATURE, NET MSEK Tax loss carryforwards Fixed assets – – Other items Less: Tax losses carried forward not valued – – Closing value, net Unrecordeddeferredtaxassetsrefertonotvaluedtaxlosscarry- forwardsForinformationconcerningthevaluationofthetaxloss carryforwardspleaseseenotesection“Importantestimations andassessments”onpage ALLOCATION OF DEFERRED TAX ASSETS AND LIABILITIES IN THE STATEMENT OF FINANCIAL POSITION MSEK Deferred tax assets Deferred tax liabilities – – Closing value, net CHANGE IN DEFERRED TAX MSEK Opening value, net Acquisition of operations – – Recorded deferred tax on the result for the year – Tax items charged directly against other comprehensive income – – Translation dierences – Closing value, net Taxitemschargeddirectlyagainstothercomprehensiveincome refertotheGroup’shedgereserveandhedgingofnetinvestments abroad DUE DATE STRUCTURE – DEFERRED TAX ASSETS RELATING TO TAX LOSS CARRYFORWARDS MSEK Due within one year Due within 2–10 years – Due after 10 years No due date Closing value NOTE 9 – TAXES (CONT.) MSEK Cash flow from operating activities Financial items Paid taxes Acquired and divested operations – – Other items included in cash flow from investing activities – – Operating cash flow – Operatingcashflowisdefinedascashflowfromoperatingactivi- tiesexcludingfinancialitemsandpaidtaxesandcashflowfrom investingactivities Result for the year attributable to parent company share holders, MSEK Average number of outstanding shares, in thousands Earnings per share, SEK Earningspershareiscalculatedbydividingtheresultattributable totheparentcompany’sshareholderswiththeaveragenumberof outstandingsharesduringtheyearThereisnodilution NOTE 10 – EARNINGS PER SHARE NOTE 11 – OPERATING CASH FLOW AUDITED ANNUAL REPORT – GROUP, NOTES 84 ANNUAL AND SUSTAINABILITY REPORT 2021 Cash and cash equivalents Cashandcashequivalentsconsistprimarilyofcashandbank balancesShort-termplacementsareclassifiedascashandcash equivalentswhen –theriskofchangesintheirfairvalueisinsignificant –theyareeasilyconverted –theymatureinlessthanthreemonthsfromthedatethey wereacquired ADJUSTMENT FOR ITEMS NOT INCLUDED IN CASH FLOW MSEK Depreciation, amortization and write-downs of intangible and tangible assets Changes in provisions that aect cash flow – Result from disposal of tangible assets – Unrealized exchange rate gains and losses – – Other changes – Total PAID AND RECEIVED INTEREST MSEK Paid interest – – Received interest Total – – Other changes in interest-bearing liabilities TheitemOtherchangesininterest-bearingliabilitiesmainlyrefers tochangesstemmingfromutilizationofrevolvingcredits NOTE 12 – SUPPLEMENTARY INFORMATION TO CASH FLOW STATEMENTS AUDITED ANNUAL REPORT – GROUP, NOTES 85 ANNUAL AND SUSTAINABILITY REPORT 2021 Goodwill Trademarks 1) MSEK Opening acquisition value Investments – – – – Acquired and divested operations – Disposals – – – – Reclassification – – – – Translation dierence – – Closing acquisition value Opening accumulated amortization and write-downs – – – – Acquired and divested operations – – – – Amortization for the year – – – – Disposals – – – – Translation dierence – – – – Closing accumulated amortization and write-downs – – – – Net residual value Other intangible assets 2) Total MSEK Opening acquisition value Investments Acquired and divested operations Disposals – – – – Reclassification Translation dierence – – Closing acquisition value Opening accumulated amortization and write-downs – – – – Acquired and divested operations – – – – Amortization for the year – – – – Disposals Translation dierence – – Closing accumulated amortization and write-downs – – – – Net residual value ) Trademarkswithindefiniteusefullife ) Customerrelationstrademarkswithdefinedusefullifesoftwareandleasehold NOTE 13 – INTANGIBLE ASSETS AUDITED ANNUAL REPORT – GROUP, NOTES 86 ANNUAL AND SUSTAINABILITY REPORT 2021 AMORTIZATION SPECIFIED BY FUNCTION IN THE INCOME STATEMENT MSEK Cost of products and services sold – – Selling expenses – – Administrative expenses – – Total – – INTANGIBLE ASSETS WITH INDEFINITE USEFUL LIFE DIVIDED BY CASH GENERATING UNIT MSEK Supply Chain Solutions Print & Packaging Solutions Total Forfurtherdetailsregardingintangibleassetswithindefiniteusefullifeseenotepage Impairment test Goodwillandtrademarkswithindefiniteusefullifearesubjected toimpairmenttestsannuallyandwhenthereareindicationsthat awrite-downmaybenecessaryNormallytestsaremadeonthe cashgeneratingunitconnectedtotheasset Therecoverableamountforeachcashgeneratingunitisbased onacalculationofthevalueinuseImpairmenttestsareper- formedonthelowestidentifiedcashgeneratinglevelwhichfor Elanderscorrespondstoitsoperatingsegments Thevalueinuseforthedierentcashgeneratingunitsiscalcu- latedasthepresentvalueofendlesscashflowsCashflowsfor thefirstfouryearsarebasedonbudgetsandstrategicplans Significantvariablesinthetestsareforexamplegrowthrate operatingmarginandinvestmentlevelIntheyearsfollowingthe initialfouryearperiodaninflationof()percentandgrowth rateof()percentisassumedforbusinessareaSupply ChainSolutionsForthebusinessareaPrint&PackagingSolutions aninflationrateof()percentandagrowthof()per- centhasbeenassumedFortheimpairmenttestadiscountrate aftertaxhasbeencalculatedbasedontheweightedaveragecost ofcapital(WACC)Forthecurrentyearitwas()percent Basedontheassumptionsgivenabovetheusefulvalueexceeds therecordedvalueforallcashgeneratingunits Sensitivity analysis Anumberofsensitivityanalyseshavebeenmadetoevaluate whetherornotfeasibleunfavorablechangescouldleadtoneed forwrite-downsTheanalyseshavefocusedoniftheaver age growthrateoroperatingmarginwasreducedwithonepercentage unitorthediscountratewasincreasedwithonepercentageunit Theanalyseshavenotshownanyneedforimpairmentandthe recoverablevalueexceedsthebookvalueforbothbusinessarea Print&PackagingSolutionsandSupplyChainSolutionsAneed forimpairmentisidentifiedfirstatadiscountrateofpercent and percentforSupplyChainSolutionsandPrint&Packaging Solutionsrespectively NOTE 13 – INTANGIBLE ASSETS (CONT.) AUDITED ANNUAL REPORT – GROUP, NOTES 87 ANNUAL AND SUSTAINABILITY REPORT 2021 Buildings and land ) Plant and machinery Equipment, tools, fixtures and fittings MSEK Opening acquisition value Investments Acquired and divested operations – – Disposals – – – – – – Reclassification Translation dierence – – – Closing acquisition value Opening accumulated depreciation and write-downs – – – – – – Acquired and divested operations – – – – – – Depreciation for the year – – – – – – Disposals Reclassification – – – Translation dierence – – – Closing accumulated depreciation and write-downs – – – – – – Net residual value Fixed assets under construction ) Total MSEK Opening acquisition value Investments Acquired and divested operations – Disposals – – – Reclassification – – – Translation dierence – – Closing acquisition value Opening accumulated depreciation and write-downs – – – – Acquired and divested operations – – – – Depreciation for the year – – – – Disposals – – Reclassification – – – – Translation dierence – – – Closing accumulated depreciation and write-downs – – – – Net residual value ) BuildingsandlandincludelandwithabookvalueofMSEK() ) FixedassetsunderconstructionincludeadvancesrelatedtotangibleassetsofMSEK() TherewerenosignificantinvestmentobligationsperDecemberor NOTE 14 – TANGIBLE ASSETS AUDITED ANNUAL REPORT – GROUP, NOTES 88 ANNUAL AND SUSTAINABILITY REPORT 2021 DEPRECIATION SPECIFIED BY FUNCTION IN THE INCOME STATEMENT MSEK Cost of products and services sold – – Selling expenses – – Administrative expenses – – Total – – NOTE 14 – TANGIBLE ASSETS (CONT.) NOTE 15 – RIGHT-OF-USE ASSETS Buildings and land Plant and machinery MSEK Opening acquisition value Investments Acquired and divested operations – – Disposals – – – – Translation dierence – – Closing acquisition value Opening accumulated depreciation and write-downs –881.4 –526.3 – – Depreciation for the year – – – – Disposals Translation dierence – – Closing accumulated depreciations and write-downs – – – – Net residual value AUDITED ANNUAL REPORT – GROUP, NOTES 89 ANNUAL AND SUSTAINABILITY REPORT 2021 NOTE 15 – RIGHT-OF-USE ASSETS (CONT.) Equipment, tools, fixtures and fittings Total MSEK Opening acquisition value Investments Acquired and divested operations – – Disposals – – – – Translation dierence – – Closing acquisition value Opening accumulated depreciation and write-downs – – – – Depreciation for the year – – – – Disposals Translation dierence – – Closing accumulated depreciations and write-downs – – – – Net residual value DEPRECIATION SPECIFIED BY FUNCTION IN THE INCOME STATEMENT MSEK Cost of products and services sold – – Selling expenses – – Administrative expenses – – Total – – EXPENSES RECOGNIZED IN THE INCOME STATEMENT MSEK Depreciation right-of-use assets – – Interest expenses lease liability – – Expenses related to short-term leases and leases with low value – – Expenses related to variable leasing fees that is not included in the valuation of the lease liability – – Total – – ThetotalcashflowforleasingcontractsamountedtoMSEK() AUDITED ANNUAL REPORT – GROUP, NOTES 90 ANNUAL AND SUSTAINABILITY REPORT 2021 MSEK Raw materials and consumables Work in process Finished goods Total CostsrelatingtoobsolescenceexpensedduringtheyearamountedtoMSEK()andatyear-endtheobsolescencereservewas MSEK() NOTE 17 – INVENTORY MSEK Services performed, not invoiced Other prepaid expenses Other accrued income Total NOTE 18 – PREPAID EXPENSES AND ACCRUED INCOME NOTE 16 – SHARES IN ASSOCIATED COMPANIES MSEK Fixed assets Current assets Total assets Equity Short-term liabilities Total equity and liabilities Shares in associated companies Percentage holding Carrying value, MSEK LOGworks GmbH – The table below shows summarized income statement and balance sheet for the Group’s associated companies. MSEK Net sales Operating result Result for the year AUDITED ANNUAL REPORT – GROUP, NOTES 91 ANNUAL AND SUSTAINABILITY REPORT 2021 Financial goals regarding capital structure ThemajorfinancialgoalofElandersistocreatevalueforthe ownersofthecompanyThepurposeofthegoalsregardinggroup capitalstructurearetoensurethecompany’sabilitytocontinue operationsandgeneratereturnstoitsshare holdersaswellasbe usefultootherinterestedpartiesAchievingagoodbalancebe- tweenequityandloanfinancingensurestheflexibilitytheGroup needsinordertobeabletoinvestinoperationswhilemaintain- ingcontroloverthecostofcapitalDividendstoshare holders redemptionofsharesissuingnewsharesordivestingassetsare examplesofmeasurestheGroupcanusetoadjustitscapital structure ElandershasthegoalofnetdebtinrelationtoEBITDAasa maximumoftimesInthisquotawas()times Financial risk management Themajorpurposeofgroupfinancialriskmanagementistoiden- tifycontrolandminimizetheGroup’sfinancialrisksRiskmanage- mentiscentralizedtoGroupFinanceFinancialrisksintheGroup’s subsidiariesaremanagedbyGroupFinancethatalsoactsasan internalbankTheexceptioniscommercialcreditriskswhich arehandledbyeachsub sidiaryThefinancialpolicyadoptedby theBoardsteerswhichcurrencyrisksarehedgedaswellashow interestfinancingandliquidityrisksarehandledThegreatest financialriskstheGroupisexposedtoarecurrencyriskinterest riskfinancingriskandcreditrisk Currency risk Elandersrunsintoacurrencyriskprimarilythroughtrans actionsin anothercurrencythanthatofthecompany’slocalcurrency(trans- actionexposure)andwhenconvertingnetprofitandnetassets fromforeignsubsidiaries(translationexposure) Transaction exposure Actualreceivablesandpayablesalongwithcontractedpurchase andsalesorderswithpaymentflowswithinatwelve-monthperiod arehedgedtosomeextentAnticipatedorbudgetedflowsarenot hedged TheGroupusesforwardexchangecontractstohandle exchangeriskexposureandhedgeaccountingforcon tracted futurepaymentflowsaswellastranslationoffinancialassets andliabilitiesThehedgereserveforforwardexchangecontracts perDecemberamountedtoMSEK()andwillbe returnedtotheincomestatementsin Translationdierencesonoperatingreceivablesandpayablesas wellasforwardexchangecontractsthatareheldforhedgingpur- posesarereportedasotheroperatingincomeorexpensesTrans- lationdierencesonfinancialliabilitiesandassetsandtheassoci- atedhedginginstrumentsarereportedunderfinancialitems Translation exposure Elanders’resultsfromforeignsubsidiariesinforeigncurrencycon- sistprimarilyofUSDandEURandtheGroupresultissensitiveto fluctuationinthesecurrenciesBelowisananalysisofhowaposi- tiveornegativechangeofpercentoftheaverageexchanges ratesonthesecurrenciesshouldhaveaectedtheGroupnetsales andoperatingresultin Estimated eect from changes in exchange rates by % MSEK Net sales Operating result Result before tax EUR – – – USD – – – EUR & USD – – – Inregardstonetassetsinforeignsubsidiariestheexposureis primarilyinEURandUSDHedgingofthenetinvestmentsmadein foreignsubsidiarieshaspartlybeenmaderegardingtheopera- tionsinGermanyUSAandSingaporethroughloansinEURand USDIftheexchangeratesinEURandUSDchangedbypercent itwouldaectequitybyMSEK()includingtheabove describedhedging Currency hedges ThetablebelowshowsacompilationovertheGroup’soutstanding forwardexchangecontractsperDecemberAllthecon- tractsareduewithinayearThenominalamountreferstohedged currencytranslatedtoSEK Currencies Nominal amount MSEK Average hedging rate SEK/EUR EUR/PLN USD/PLN USD/SEK PLN/SEK NOTE 20 – FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT MSEK Cash and bank Cash and cash equivalents TranslationdierencesincashandcashequivalentsfortheyearwereMSEK(–) NOTE 19 – CASH AND CASH EQUIVALENTS AUDITED ANNUAL REPORT – GROUP, NOTES 92 ANNUAL AND SUSTAINABILITY REPORT 2021 Interest risk Interestriskisdefinedastheriskoflowerprofitscausedbya changeininterestratesTheGroupstrivestoachieveabalance betweencostecientborrowingandtheriskexposureifasudden substantialinterestratechangeshouldoccurandnegativelyinflu- enceprofitsandcashflowIfthereisachangeinmarketinterest ratesbyonepercentageunit(ontheutilizedcreditfacilitiesat yearendwhicharecoveredbytheagreementwiththeGroup’s mainbanks)theGroup’sprofitaftertaxwouldhavebeenaected byapproximatelyMSEK()Thefollowingtablepresentsthe allocationofinterest-bearingandnon-interest-bearingfinancial assetsandliabilitiesReservesforpensionshavebeenincludedin interest-bearingliabilitiesInthetableregardingdividingfinan- cialinstrumentsintocategoriesfurtherdowninthisnotetheyare includedinnon-financialliabilities MSEK Floating interest Non- interest- bearing Current receivables – Cash and bank – Long-term liabilities – – Current liabilities – – Total – Financing/liquidity risk Financingliquidityriskisdefinedastheriskofnotbeingableto meetpaymentobligationsasaresultofinsucientliquidfunds ordicultiesinfindingfinancingDuringtheyearanewcredit facilityagreementhasbeensignedwiththeGroup’smainbanks TheGroupnowhasthree(two)mainbanksTheagreementruns forthreeyearswithanoptiontoextenditoneplusoneyear RelatedtotheGroup’sinterest-bearingliabilitiesthereare covenantsfromthecreditinstitutionsregardingdebtequityratio andnetdebtinrelationtoEBITDAAsofDecemberall covenantswerefulfilledwithagoodmarginSeepage concerningduedatestructureregardingfinancialliabilities Credit risk Creditriskisdefinedastheriskofacounterpartynotmeeting theirobligationsCreditriskcanbedividedintofinancialcredit riskandcommercialcreditrisk Financial credit risk ThemostcrucialfinancialcreditriskfortheGroupariseswhen tradingexchangederivativeinstrumentsandinvestingsurplus liquidityHenceinordertoreducetheriskthefinancialpolicy stipulatesthatonlycounterpartsthathavebeenapprovedby GroupFinanceshouldbeusedOnDecembertotal exposureregardingfinancialcreditriskswasMSEK() Theexposureisbasedontherecordedvalueofallfinancialassets exceptshareholdingsandaccountsreceivable Commercial credit risk Thecommercialcreditriskconsistsofthepaymentabilityof customersandishandledbythesubsidiariesthroughcarefulmoni- toringofpaymentabilityfollowupofcustomers’financialreports andgoodcommunicationTheGroup’stotalcreditriskisspread outovermanydierentcompaniesHoweverinactualityafew customersrepresentalargepartoftheGroup’saccountsreceiv- ableThesecustomersareforthemostpartlargelistedcompanies thathavebeenthoroughlyinvestigatedThetotalcommercialcredit exposureisequivalenttothebookvalueofaccountsreceivableand amountedtoMSEK()perDecember IncreditlossesamountedtoMSEK() Operational risks InadditiontothefinancialrisksaboveElandersisexposedtorisks tiedtodailyoperationsHandlingoperationalrisksispartofthe day-to-dayworkinoursubsidiariesandinGroupManagement Intermsofresponsibilityallgroupoperationsarerepresentedin GroupManagementwhichmeetsandcommunicatesonaregular basis Sensitivity analysis Thetablebelowpresentshowgroupresultsaftertaxwouldhave beenaectedbyachangeofonepercentageinthevariables connectedtoElandersvariousoperationalrisksEachvariable hasbeentreatedindividuallyundertheconditionthattheothers remainconstantItisassumedthatachangeinnetsaleswill aectthevalueaddedonthemarginwhichthere afterwill presumablyfallstraightthroughtheincomestatementAchange inpersonnelcostsismultipliedwithtotalpersonnelcosts Achangeinmaterialcostsismultipliedwiththetotalcostsof materialandisnotassumedtobeabletobechargedfromthe customerTheanalysisdoesnotpretendtobeexactItismerely indicativeandaimstoshowthemostrelevantmeasurablefactors inthisconnectionThefiguresarepresentedinMSEK •Netsales – •Personnelcost – •Costofmaterial – NOTE 20 – FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONT.) AUDITED ANNUAL REPORT – GROUP, NOTES 93 ANNUAL AND SUSTAINABILITY REPORT 2021 DUEDATESTRUCTUREREGARDINGFINANCIALLIABILITIES DuedatestructureregardingfinancialliabilitiesincludinginterestexpensesispresentedinthetablebelowTheamountsarefuture undiscountedcashflowsDuringtheyearanewcreditfacilityagreementhasbeensignedwiththeGroup´smainbanksTheGroupnow hasthree(two)mainbanksTheagreementrunsforthreeyearswithanoptiontoextenditoneplusoneyearIntheduedatestructure regardingthefinancialliabilitiestheinterestandcurrencyexchangeratesasofyearendhavebeenused MSEK Jan–Mar Apr–Dec – – Borrowing debts – Finance lease liabilities Accounts payable – – – Other financial liabilities – – Interest Total Otherfinancialliabilitiesmaturing–referstomandatorycallputoptionsrelatingtoacquisitionsofnon-controllinginterests Financial instruments – initial assessment Financialinstrumentsarevaluedthefirsttimeatfairvalue plustransactioncostswhichappliestoallfinancialassets andliabilitiesnotrecognizedatfairvaluethroughprofitorloss Financialassetsandliabilitiesrecognizedatfairvaluethrough profitorlossarevaluedthefirsttimeatfairvaluewhile attributabletransactioncostsarevaluedthroughprofitorloss Mandatorycallputoptionsareinitiallyrecognizedasfinancial liabilityatthepresentvalueoftheredemptionpricethatapplies atthetimewhentheoptioncanfirstbeexercised RECEIVABLES OVERDUE BUT NOT WRITTEN-DOWN MSEK –daysoverdue –daysoverdue –daysoverdue –daysoverdue Morethandaysoverdue Total OnlyaccountsreceivablesareincludedinthetableaboveNo otheroverduereceivablesexistedasofDecemberor AccountsreceivableamountingtoMSEK()areoverduewith morethandayswithoutanyidentifiedneedforwrite-down Thereceivablesreferstocustomerswithoutanyhistoryofpayment diculties CHANGE IN PROVISION FOR DOUBTFUL RECEIVABLES MSEK Opening provision for doubtful receivables – – Bad debt provision in acquired operations – – Reversal of provision from previous year Utilized provisions for confirmed losses – Provisions during the year – – Translation dierence – Closing provision for doubtful receivables – – INTEREST INCOME AND EXPENSES STEMMING FROM FINANCIAL ASSETS AND FINANCIAL LIABILITIES MSEK Interest income from financial assets Interest expenses due to financial liabilities – – Total – – Thereasontheresultisnotthesameastheinterestresultre- cordedunderfinancialitemsismainlyduetothefactthatfinancial itemsstemmingfrompensionshavebeenexcluded NOTE 20 – FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONT.) AUDITED ANNUAL REPORT – GROUP, NOTES 94 ANNUAL AND SUSTAINABILITY REPORT 2021 NOTE 20 – FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONT.) Categorization of financial instruments Thecategorizationoffinancialassetsandliabilitiesandtheirbook valueinthebalancesheetsforandarepresentedinthe tablesbelowForinformationregardingfinancialassetsandliabi- litiesvaluedatfairvalueseepreviouspageForotherassetsand liabilitiesshownbelowthefairvalueisestimatedtobeequivalent totheirbookvalue FINANCIALASSETSATAMORTIZEDCOST MSEK Accounts receivable Other financial assets Cash and cash equivalents Total LIABILITIESATAMORTIZEDCOST MSEK Trade payables and other financial liabilities Borrowings Total Net profit/loss for financial instruments recorded in the income statement Thetablebelowcontainsthefollowingitemsthathavebeen recordedintheincomestatement –Profitsandlossesstemmingfromexchangeratedierences includingprofitsandlossesattributabletohedgeaccounting –Profitsandlossesstemmingfromfinancialinstrumentswhere hedgeaccountingisapplied –Profitsandlossesstemmingfromderivativeswherehedge accountingisnotapplied MSEK Loans and receivables – Other financial liabilities – Total – – Financial assets and liabilities measured at fair value ThefinancialinstrumentsrecognizedatfairvalueintheGroup’s reportonfinancialpositionarederivativesidentifiedashedging instrumentsThederivativesconsistofforwardexchangecontracts andareusedforhedgingpurposesValuationatfairvalueoffor- wardexchangecontractsisbasedonpublishedforwardratesonan activemarketAllderivativesareincludedinlevelinthefairvalue hierarchySinceallthefinancialinstrumentsrecognizedatfair valueareincludedinleveltherehavebeennotransfersbetween valuationlevelsThetablebelowpresentsfairvaluerespective bookedvalueperclassoffinancialassetsandliabilitieswhichare recordedgross MSEK Other current assets – Derivative instruments in hedge accounting relationships – Short-term non-interest-bearing liabilities – Derivative instruments in hedge accounting relationships – Mandatorycallputoptionsareinitiallyrecognizedasfinancial liabilityatthepresentvalueoftheredemptionpricethatapplies atthetimewhentheoptioncanfirstbeexercisedChangesinthe fairvalueoftheseliabilitiesarerecognizedoverequity Thefairvalueofotherfinancialassetsandliabilitiesvaluedat theiramortizedpurchasepriceisestimatedtobeequivalentto theirbookvalue Hedge accounting Financialinstrumentsusedtohedgecurrencyrisksincontracted cashflowsaswellasnetinvestmentsabroadhavebeenrecorded atmarketvalueinthebalancesheetHedgeeectivenessisdeter- minedattheinceptionofthehedgerelationshipandthroughpe- riodicassessmentstoensurethataneconomicrelationshipexists betweenthehedgeditemandhedginginstrumentForhedgesof foreigncurrencythegroupentersintohedgerelationshipswhere thecriticaltermsofthehedginginstrumentmatchwiththeterms ofthehedgeditemThegroupthereforeperformsaqualitative assessmentofeectiveness AUDITED ANNUAL REPORT – GROUP, NOTES 95 ANNUAL AND SUSTAINABILITY REPORT 2021 Pledged assets Seenoteforinformationonpledgedassets CHANGES IN INTEREST-BEARING LIABILITIES MSEK Opening liabilities Reported liabilities relating to lease agreements entered during the year Amortization of lease liabilities – – Other changes in lease liabilities Reported liabilities relating to new loans entered into during the year – Amortization of borrowing debts – – Other changes in borrowing debts – Translation dierence – Closing liabilities TheGrouphadatotalofMSEK()perDecember increditfacilitiesincludingfactoringofwhichMSEK()were unutilized Thefinancingcostispricedaccordingtoafixedinterestterm andanagreedmarginTheGroup’saverageeectiveinterestrate duringtheyearwas()percentAfeeischargedforgranted creditfacilitiesthisisrecognizedwithinotherfinancialexpenses NOTE 22 – INTEREST-BEARING LIABILITIES Numberofregisteredsharesintheparentcompany IssuedperJanuary IssuedperDecember Number ofshares Number ofvotes Share capitalSEK Ashares Bshares Total AllsharesarecompletelypaidforNosharesarereservedfortransferaccordingtooptionagreementsorothercontracts Theshares’quotavalueisSEK NOTE 21 – SHARE CAPITAL AUDITED ANNUAL REPORT – GROUP, NOTES 96 ANNUAL AND SUSTAINABILITY REPORT 2021 PROVISION FOR POST-EMPLOYMENT OBLIGATIONS MSEK Funded plans Unfunded plans Total Presentvalueofpost-employmentobligations Thefairvalueofplanassets – – – Total Percent Discount rate 1) Expected return on plan assets ) Thediscountrateisbasedontheanticipatedreturnsfromatypicalhigh-qualitycompanyeurobondwithAArating Defined benefit pension plans Definedbenefitpensionplansmainlycoverretirementpensions andwidowpensionswheretheemployerhasanobligationtopay alifelongpensioncorrespondingtoacertainguaranteedpercent- ageofwagesoracertainannualsumRetirementpensionsare basedonthenumberofyearsapersonisemployedTheem- ployeemustberegisteredintheplanforacertainnumberof yearsinordertoreceivefullretirementpensionForeachyear atworktheemployeeearnsanincreasingrighttopensionwhich isrecordedaspensionearnedduringtheperiodaswellasan increaseinpensionobligationsTheseplansarefinancedthrough paymentsmaderegularlybytheemployer ThefairvalueoftheplanassetsintheElanders’definedbenefit pensionplansamountedtoMSEK()asofDecember andthepresentvalueofthepensionobligationsamounted toMSEK()Thedefinedcontributionplansaremainly attributabletotheoperationsinGermany Theactuarialmeasurementofpensionobligationsandcostsfor definedbenefitplansarebasedonthefollowingactuarialsignificant assumptions NOTE 24 – PROVISIONS FOR POST-EMPLOYMENT BENEFITS MSEK Cash and cash equivalents Interest- bearing long- term liabilities Interest- bearing short- term liabilities Total NetdebtasofJan – Acquiredanddivestedoperations – Changeswithcasheect – Changeswithnocasheect – Translationdierence – NetdebtasofDec – NOTE 23 – NET INTEREST-BEARING DEBT AUDITED ANNUAL REPORT – GROUP, NOTES 97 ANNUAL AND SUSTAINABILITY REPORT 2021 CHANGE IN CURRENT VALUE OF THE POST-EMPLOYMENT OBLIGATIONS MSEK Openingbalance Interestexpense Actuarialgains(-)losses()net – Currentyearservicecost Pensionspaidout – – Translationdierence – Closingbalance CHANGE IN PLAN ASSETS FAIR VALUE MSEK Openingbalance Returnonplanassets Disbursement – – Actuarialgains(-)losses()net – Translationdierence – Closingbalance Defined contribution pension plans Theseplansmainlycoverretirementsickandfamilypensions Thepremiumsarepaidregularlyduringtheyearbyindividual groupcompaniestodierentinsurancecompaniesThepremium paymentsarebasedontheindiviuals’wagesandsalariesThe pensioncostsforthecurrentperiodareincludedintheincome statementandamounttoMSEK() Theobligationsforretirementandsickpensionsforwhite-collar workersforseveraloftheSwedishcompanieshavebeensafe- guardedthroughaninsuranceinAlectaAccordingtoanopinion fromtheSwedishFinancialReportingBoardUFRthisisa definedbenefitmulti-employerplanTheGrouphasnothad accesstotheinformationnecessarytoreporttheseplansas definedbenefitpensionplansforthefinancialyearThisis becauseAlectaisnotabletoprovidethespecificdefinedbenefit obligationforthosebeinginsuredConsequentlythepension plansthataresafeguardedthroughinsuranceinAlectaare reportedasadefinedcontributionplanThepaymentsforpension insurancesfromAlectatotaledMSEK()inFor nosignificantchangesareexpectedregardingthetotalcostsfor pensioninsurancefromAlecta NET EXPENSE RECOGNIZED IN THE INCOME STATEMENT REGARDING DEFINED BENEFIT PLANS MSEK Currentyearservicecost Interestexpense Returnonplanassets – – Pensioncostsfordefinedbenefitplans NOTE 24 – PROVISIONS FOR POST-EMPLOYMENT BENEFITS (CONT.) AUDITED ANNUAL REPORT – GROUP, NOTES 98 ANNUAL AND SUSTAINABILITY REPORT 2021 MSEK Holiday pay liability Social security contributions Accrued salaries and remuneration Accrued expenses for services and goods received Other accrued expenses and deferred income Total NOTE 26 – ACCRUED EXPENSES AND DEFERRED INCOME NOTE 25 – OTHER PROVISIONS MSEK Guarantee commitments Restructuring measures Restoration costs Other Total OpeningbalanceasofJan Providedforduringtheyear Utilizedduringtheyear – – – – – Reversalofunutilizedamounts – – – – – Acquiredoperations – Translationdierence ClosingbalanceasofDec Ofwhich Current Non-current MSEK Guarantee commitments Restructuring measures Restoration costs Other Total OpeningbalanceasofJan Providedforduringtheyear Utilizedduringtheyear – – – – – Reversalofunutilizedamounts – – – – – Acquiredoperations – – – – Translationdierence – – – – – ClosingbalanceasofDec Ofwhich Current Non-current AUDITED ANNUAL REPORT – GROUP, NOTES 99 ANNUAL AND SUSTAINABILITY REPORT 2021 Thetransactionsbetweensubsidiarieshavetakenplacewith normalbusinesstermsandatmarketpricesDuringtheyearintra- groupsalesofproductsandservicesamountedtoMSEK ()Intra-grouptransactionsandbalanceshavebeenelimi- natedandarethereforenotincludedinthefiguresbelowconcern- ingtheGroup Sales of products and services Duringandtherehavenotbeenanysalesof productsandservicestorelatedparties Purchase of products and services ErikGabrielsonwhoismemberoftheBoardispartnerinVinge LawFirmthatduringtheyearhasprovidedlegalcounseland invoicedfeesamountingtoMSEK() NoBoardmemberorseniorocerhasorhashaddirector indirectparticipationinanybusinesstransactionsbetweenthem- selvesortheGroupthatareorwereofanunusualnatureconcern- ingtheterms RemunerationtoBoardmembersandmanagementis reportedinnote NOTE 28 – TRANSACTIONS WITH RELATED PARTIES NOTE 27 – PLEDGED ASSETS AND CONTINGENT LIABILITIES PLEDGED ASSETS MSEK Floating charges Other pledged assets Total Pledged to: Credit institutions Otherpledgedassetsreferprimarilytocollateralintheformof sharesinsubsidiariesTheitemalsoincludesleasedassetsheld underaretentionoftitleclause CONTINGENT LIABILITIES MSEK Contingent liabilities Total NOTE 29 – ACQUIRED AND DIVESTED OPERATIONS Acquisitionofoperationsin ReuseITSwedenABandReuseITFinanceAB InMarchElandersacquiredpercentofthesharesin ReuseITSwedenABandReuseITFinanceAB(“ReuseIT”)ReuseIT isarapidlygrowingcompanywithnetsalesinofalmost MSEKandgoodprofitabilityTheyarespecializedinpurchasing securelyerasingrenovatingresellingandrentingoutusedIT equipmentTheacquisitionmakesElandersoneoftheleading actorsontheSwedishmarketAtthesametimethisispartofa largerstrategicinvestmentinglobalsustainableservices Thecontractcontainsamandatoryputandcalloptionthat givesElanderstherighttoacquiretheremainingsharesinthe companyduringForthisreasonthecompanyisconsolidated to percentfromtheacquisitiondateandnonon-controlling interestsisreportedThepurchasepricefortheremainingshares isbasedonthecompany’searningsinthecomingyearsandthe assumedpurchasepricehasbeenrecognizedasaliabilityReuseIT ispartofbusinessareaSupplyChainSolutionsandwasconsoli- datedintotheGroupperMarchTheacquisitiondidnothave anymaterialeectonnetsalesortheresultduringtheperiod Thepurchasepriceandacquisitioncostschargedcashflowin thefirstquarterbyaroundMSEKofwhichMSEKconsisted ofconsultancyfeesTheacquisitionwasfinancedwithinElanders’ existingcreditframework Thepurchasepriceallocationispreliminary SchätzlDruck&MedienGmbH&CoKG InJulyElandersacquiredallthesharesintheGermandigital printcompanySchätzlDruck&MedienGmbH&CoKG(“Schätzl”) Schätzlisspecializedasasubcontractorfordierentactorsin onlineprintwhichisoneofthefewareasinthegraphicindustry showingorganicgrowthElandersisalreadyawell-established subcontractorinthisareaandtogetherwithSchätzlElanderswill beoneoftheleadingactorsinEurope SchätzlhadnetsalesofaroundMEURinthelasttwelve- monthperiodwithgoodprofitabilityThepurchasepriceforthe shareswasMEURonadebt-freebasisThesellermayalso receiveanadditionalsumbasedontheearningsinthecoming yearswhichwillbepaidin SchätzlispartofbusinessareaPrint&PackagingSolutionsand wasconsolidatedintotheGroupasofJulySincetheacqui- sitionthecompanyhascontributedtoGroupnetsalesbyjustover MSEKandtothenetresultbyMSEK One-ocostsinconnectionwiththeacquisitionwerearound MSEKandconsistedofconsultancyfeesTheacquisitionwas financedwithinElanders’existingcreditframework Thepurchasepriceallocationispreliminary AUDITED ANNUAL REPORT – GROUP, NOTES 100 ANNUAL AND SUSTAINABILITY REPORT 2021 NOTE 29 – ACQUIRED AND DIVESTED OPERATIONS (CONT.) PRELIMINARYPURCHASEPRICEALLOCATION(PPA)BERGENLOGISTICS MSEK Recorded valuesin acquired operations Adjustments tofairvalue Recorded valueinthe Group Intangibleassets Otherassets ) Currentassetsexcludingcashandcashequivalents Cash and cash equivalents Other non-interest-bearing liabilities – – – Interest-bearingliabilities ) – – Identifiablenetassets Goodwill Total Less: Unpaid purchase price – Cashandcashequivalentsinacquisitions – NegativeeectoncashandcashequivalentsfortheGroup ) Whereofright-of-useassetsMSEK ) WhereofleaseliabilitiesMSEK BergenShippersCorp InNovemberElandersacquiredpercentoftheshares intheAmericansupplychainmanagementcompanyBergen ShippersCorpThecompanyoperatesunderthenameBergen Logisticsandisspecializedincontractlogisticsservicesforthe customersegmentFashion&LifestyleThisacquisitionmakesthis customersegmentthelargestintheGroup Thecompany’snetsalesinwereMUSDandoverMUSD inThecompanywasvaluedatMUSDonadebt freebasisandElandersinitiallyacquiredpercentoftheshares forMUSDTheinitialpurchasepricechargedcashflowinthe fourthquarterThecontractcontainsamandatoryputand calloptionfortheremainingsharesinthecompanythatcanbe usedduringForthisreasonthecompanyisconsolidated to percentfromtheacquisitiondateandnonon-controlling interestsisreportedThepurchasepricefortheremainingshares isbasedonthecompany’searningsinandtheassumed purchasepricehasbeenrecognizedasaliabilityBergenLogistics ispartofbusinessareaSupplyChainSolutionsandwasconsoli- datedintotheGroupperNovemberSincetheacquisition thecompanyhascontributedtoGroupnetsalesbyjustover MSEKandtothenetresultbyMSEKexcludingacquisition costsbutincludingfinancingcosts One-ocostsinconnectionwiththeacquisitionwerearound MSEKandconsistedprimarilyofconsultancyfeesBergen Logisticsisexpectedtocontributepositivelytoearningspershare duringTheacquisitionwasfinancedwithanacquisitionloan viatheGroup’sthreeprincipalbanks Thepurchasepriceallocationispreliminary EijgenhuijsenExploitatieBV AttheendofNovemberElandersacquiredalltheshares inEijgenhuijsenExploitatieBVanditssubsidiaryEijgenhuijsen PrecisievervoerBV(togetherEijgenhuijsen)Throughthisacquisi- tionElanderswillbeabletooerspecialtransportationinstalla- tionandretrievingofadvancedtechnicalequipmentEijgenhuijsen isaleadingactorintheNetherlandsinthisfieldTheacquisitionis astepinaugmentingvalue-addingservicestocustomerssuchas thoseinElectronicsandHealthcare&LifeScienceEijgenhuijsenis privatelyownedandhadnetsalesofMEURin EijgenhuijsenispartofbusinessareaSupplyChainSolutions andwasconsolidatedintotheGroupperDecemberTheac- quisitiondidnothaveanymaterialeectonnetsalesortheresult duringtheperiod ThepurchasepricewasaroundMEURonadebt-freebasis TheacquisitionwasfinancedwithinElanders’existingcredit frameworkandacquisitioncostswerearoundMSEK Thepurchasepriceallocationispreliminary AUDITED ANNUAL REPORT – GROUP, NOTES 101 ANNUAL AND SUSTAINABILITY REPORT 2021 NOTE 30 – EVENTS AFTER THE BALANCE SHEET DATE NOTE 29 – ACQUIRED AND DIVESTED OPERATIONS (CONT.) Acquisitionofoperationsin InOctoberElanderssignedacontracttoacquirepercent ofthesharesinAzaleaGlobalITABAzaleahasnetsalesof aroundMSEKannuallygoodprofitabilityandisspecialized inValueRecoveryServicesTheymanagetheentirechainfrom purchasingusedITequipmentandrestoringandresettingitto thensellingittoanetworkofcustomersTheacquisitionof AzaleaisapartofElanders’investmentswithinsustainable servicesthatcontributetoacirculareconomyTheacquisition didnothaveanymaterialeectonnetsalesorprofitduring theperiodInconnectionwiththeacquisitionintangibleassets intheformofcustomerrelationshipsamountingtoMSEKand goodwillamountingtoMSEKwereidentifiedTheagreement containsamandatorycall&putoptionthatgivesElandersthe righttoacquiretheremainingsharesinthecompanyin Theoptionalsogivesthesellerstherighttoselltheremaining sharesatadefinedpurchasepriceTheacquisitioncostsie thecostsforadvisorsinconnectionwiththeacquisition amountedtoMSEK PRELIMINARYPURCHASEPRICEALLOCATION(PPA)OTHERACQUISITIONS MSEK Recorded valuesin acquired operations Adjustments tofairvalue Recorded valueinthe Group Intangibleassets Otherassets ) Currentassetsexcludingcashandcashequivalents Cash and cash equivalents Other non-interest-bearing liabilities – – – Interest-bearingliabilities ) – – Identifiablenetassets Goodwill Total Less: Unpaid purchase price – Amortization of external loans in connection with acquisition Cashandcashequivalentsinacquisitions – NegativeeectoncashandcashequivalentsfortheGroup ) Whereofright-of-useassetsMSEK ) WhereofleaseliabilitiesMSEK ThewarinUkraine RussiainvadedUkraineinFebruaryThewarhassofar nothadanysignificantnegativeimpactonElanders’operations HoweversomeoftheGroup’scustomershavesubcontractorsin UkraineandRussiaThesecustomershavethereforestartedto havesomeproblemswiththeirsupplychain Thereisstillagreatdealofuncertaintyabouthowlongthe conflictwilllastandtheextentofitItisthereforedicultto predicttheexactimpactinthecomingyearIncreasedsanctions andanincreasedscopeoftheconflictcouldhaveasignificant impactontheGroup’soperations Apartfromthisnomajoreventshavetakenplacebetweenthe balancesheetdateandthedatethisreportwassigned AUDITED ANNUAL REPORT – PARENT COMPANY 102 ANNUAL AND SUSTAINABILITY REPORT 2021 MSEK Note Net sales Selling expenses – – Administrative expenses – – Other operating income Operating result – – Result from shares in subsidiaries Interest income Other financial income Interest expenses – – Other financial expenses – – Result after financial items Taxes – – Result for the year MSEK Result for the year Other comprehensive income – – Total comprehensive income for the year INCOME STATEMENTS STATEMENTS OF COMPREHENSIVE INCOME AUDITED ANNUAL REPORT – PARENT COMPANY 103 ANNUAL AND SUSTAINABILITY REPORT 2021 MSEK Note Operating activities Result after financial items Adjustments for items not included in cash flow from operating activities – Paid taxes – – Cash flow from operating activities before changes in working capital – Cash flow from changes in working capital Increase (–)/decrease (+) in operating receivables – Increase (+)/decrease (–) in operating liabilities Cash flow from operating activities – Investing activities Acquisition of tangible assets and intangible assets – Acquisition of subsidiaries – – Received dividends from subsidiaries Lending to and from subsidiaries – Cash flow from investing activities – Financing activities Amortization of loans – – New loans – Other changes in interest-bearing liabilities – – Dividend to parent company shareholders – – Cash flow from financing activities – Cash flow for the year Cash and cash equivalents at the beginning of the year Cash and cash equivalents at year-end CASH FLOW STATEMENTS AUDITED ANNUAL REPORT – PARENT COMPANY 104 ANNUAL AND SUSTAINABILITY REPORT 2021 MSEK Note ASSETS Fixed assets Intangible assets Tangible fixed assets Shares in subsidiaries Receivables from group companies Deferred tax assets Other financial assets – Total fixed assets Current assets Receivables from group companies Other receivables Prepaid expenses and accrued income Cash and bank balances Total current assets Total assets EQUITY, PROVISIONS AND LIABILITIES EQUITY Share capital Statutory reserve Restricted equity Unrestricted equity Total equity PROVISIONS Provisions for pensions and similar obligations – – Other provisions Total provisions LIABILITIES Long-term liabilities Liabilities to credit institutions Liabilities to group companies Other liabilities Total long-term liabilities Current liabilities Liabilities to credit institutions Accounts payable Liabilities to group companies Other liabilities Accrued expenses and deferred income Total current liabilities Equity, provisions and liabilities BALANCE SHEETS AUDITED ANNUAL REPORT – PARENT COMPANY 105 ANNUAL AND SUSTAINABILITY REPORT 2021 MSEK Share capital Statutory reserve Unrestricted equity Total OpeningbalanceasofJan Resultfortheyear – – Othercomprehensiveincome – – – – ClosingbalanceasofDec Dividend – – – – Resultfortheyear – – Othercomprehensiveincome – – – – ClosingbalanceasofDec STATEMENTS OF CHANGES IN EQUITY AUDITED ANNUAL REPORT – PARENT COMPANY, NOTES 106 ANNUAL AND SUSTAINABILITY REPORT 2021 ApresentationofElanders’accountingprinciplescanbefound innotetoElanders’consolidatedfinancialstatementsThepar- entcompanyhasprepareditsannualaccountsaccordingtothe AnnualAccountsActandtheSwedishFinancialReportingBoard RecommendationRFRAccountingforlegalentitiesandwhere applicablestatementsmadebytheSwedishFinancialReporting BoardRFRrequirestheparentcompanytointheannual accountsforthelegalentityusealltheEUapprovedIFRSsand interpretationsasfaraspossiblewithintheframeworkofthe AnnualAccountsActandtheSecurityLawtakingintoconsid- erationtheconnectionbetweenaccountingandtaxationThe parentcompanygenerallyfollowsthesamepreviouslydescribed principlesastheGroupDierencesbetweengroupandparent companyaccountingprinciplesarepresentedbelow Taxes Taxlawsallowprovisionsforspecialreservesandfundsthatare reportedseparatelyintheparentcompanyThisallowscompanies withinlimitstoallocateandretainrecordedresultsinoperations withoutthembeingimmediatelytaxedTheuntaxedreservesare notsubjecttotaxationuntiltheyaredissolvedIfcompanieslose moneytheuntaxedreservescanbeusedtocoverthelosseswith- outbeingtaxed Intangible assets Theparentcompanyamortizesgoodwillaccordingtoplan whichisnotpermittedfortheGroupGoodwillisamortizedon astraight-linebasisoveratwenty-yearperiodsinceitrelatesto acquisitionsofastrategicnature Shares in associated companies and jointly controlled entities Sharesinassociatedcompaniesjointlycontrolledentitiesand subsidiariesarereportedintheparentcompanyaccordingtothe acquisitionmethodAcquisition-relatedcostsforsubsidiaries whichareexpensedingroupaccountingareincludedaspartof theacquisitionvalueforparticipationinsubsidiariesReported valuesaretestedoneverybalancesheetdateinordertodeter- mineiftheneedforwrite-downsisindicated Pensions Theparentcompany’spensionobligationshavebeencalculated andreportedbasedontheSwedishSecurityLawApplicationof theSwedishSecurityLawisaprerequisiteforfiscaldeductions Financial guarantee contracts Theparentcompany’sfinancialguaranteecontractsconsistpri- marilyofguaranteesonbehalfofsubsidiariesAfinancialguaran- teecontractisacontractinwhichthecompanyhasacommitment toreimbursetheholderofadebtinstrumentforlossitincurs becauseaspecifieddebtorfailstomakepaymentwhendue accordingtothecontracttermsTheparentcompanyapplies RFRptoaccountforfinancialguaranteeswhichisarelief comparedtotherulesinIASconnectedtoreportingandtaxa- tionTheparentcompanyrecognizesfinancialguaranteecontracts asaprovisiononthebalancesheetwhenthecompanyhasacom- mitment Group and shareholder contributions Groupandshareholdercontributionsarerecognizedaccording tothealternativeruleintheSwedishFinancialReportingBoard RecommendationRFRThismeansthatreceivedandpaid groupcontributionsarereportedasappropriationsShareholder contributionsareactivatedinsharesandparticipationsaslongas write-downsarenotrequired Financial instruments and hedge accounting Inviewoftheconnectionbetweenaccountingandtaxation therulesonfinancialinstrumentsandhedgeaccountingarenot appliedbytheparentcompanyasalegalentity Intheparentcompanyfinancialassetsarevaluedatcostless anyimpairmentandfinancialcurrentassetsatthelowervalueof costornetrealizablevalue Lease agreements IFRSLeasesarenotappliedintheparentcompanyasexemp- tionisallowedforapplicationinlegalentitiesThismeansthatthe leasingfeesareexpensedonastraight-linebasisintheincome statement Standards, amendments and interpretations of existing standards that have taken eect in 2021 Nonewstandardsamendmentsorinterpretationsthathavehad significanteectonthecompany’sfinancialreportshavecome intoeectduring NOTE 1 – ACCOUNTING PRINCIPLES AUDITED ANNUAL REPORT – PARENT COMPANY, NOTES 107 ANNUAL AND SUSTAINABILITY REPORT 2021 RESULT FROM SHARES IN SUBSIDIARIES MSEK Write-downs of shares in subsidiaries – – Dividends from subsidiaries Total INTEREST INCOME MSEK Interest income, external Interest income, subsidiaries Total OTHER FINANCIAL INCOME MSEK Exchange rate gains Total INTEREST EXPENSES MSEK Interest expenses, external – – Interest expenses, subsidiaries – – Total – – OTHER FINANCIAL EXPENSES MSEK Exchange rate losses – – Other financial expenses – – Total – – MSEK PwC Audit assignment Audit-related services – – Tax advisory services – – Other services – – Total Nofeeswerepaidtootherauditingfirms Auditassignmentisdefinedasthestatutoryauditiethework necessarytoproducetheauditors’reportaswellassocalled auditconsultationgiveninconnectionwiththeaudit MSEK Exchange rate gains Other Total NOTE 2 – FEES TO THE AUDITORS NOTE 3 – OTHER OPERATING INCOME NOTE 4 – PERSONNEL NOTE 5 – RESULT FROM FINANCIAL ITEMS Pleaseseenotetotheconsolidatedfinancialstatementsfor personnelrelatedinformation AUDITED ANNUAL REPORT – PARENT COMPANY, NOTES 108 ANNUAL AND SUSTAINABILITY REPORT 2021 TAX ON THE RESULT FOR THE YEAR MSEK Withholding tax on income from foreign subsidiaries – – Correction of previous years’ current tax expense – – Deferred tax – – Total – – DEFERRED TAX RECEIVABLES MSEK Tax loss carry forwards Other Total RECONCILIATION OF RECORDED TAX MSEK Result before taxes Tax according to Swedish tax rate of ()% – – Tax eect of: Non-taxable dividends from subsidiaries Write-downs of shares in subsidiaries – – Eect from change in tax rate – Withholding tax on income from foreign subsidiaries – – Contribution, representation and association costs – – Other – Total – – Sales of products and services Theparentcompanyreimburseitssubsidiariesforservicesmainly relatingtomarketingITauditinginsuranceetcBesidesthis therehavebeennosalesofproductsorservicestorelatedparties Purchase of products and services DuringtheyeartheParentCompanypurchasedservicesfrom subsidiariesforMSEK() ErikGabrielsonwhoismemberoftheBoardispartnerinVinge LawFirmthatduringtheyearhasprovidedlegalcounseland invoicedfeesamountingtoMSEK() NoBoardmemberorseniorocerhasorhashaddirectorin- directparticipationinanybusinesstransactionsbetweenthem- selvesorthecompanythatareorwereofanunusualnature concerningtheterms RemunerationtoBoardmembersandGroupManagementis reportedinnotetotheconsolidatedfinancialstatements Profitandothernon-restrictedequityatthedispositionofthe AnnualGeneralMeeting MSEK Retained earnings Net result for the year Total TheBoardofDirectorsandtheChiefExecutiveOcerpropose thattheprofitandothernon-restrictedequitywillbedealtwith accordingly MSEK SEK 3.60 (3.10) per share is distributed to the shareholders Remaining balance to be carried forward Total NOTE 6 – TAXES NOTE 7 – TRANSACTIONS WITH RELATED PARTIES NOTE 8 – PROPOSED APPROPRIATION OF PROFITS AUDITED ANNUAL REPORT – PARENT COMPANY, NOTES 109 ANNUAL AND SUSTAINABILITY REPORT 2021 MSEK Opening book value Investments Write-downs – – Closing book value SPECIFICATION OF SHARES IN SUBSIDIARIES Identity no. Registered oce Number of shares Percen- tage holding Book value of hol- ding, MSEK d|o|m Deutsche Online Medien GmbH HRB Waiblingen Germany – myphotobook GmbH HRB BerlinGermany – – Elanders do Brasil Representações Ltda - SãoPauloBrazil – Mentor Gerenciamento de Supply Chain (Brasil) Ltda - SãoPauloBrazil – Elanders France SARL ParisFrance – Elanders GmbH HRB Waiblingen Germany – Elanders International AB - MölndalSweden – – Mentor Media Ltd H Singapore – – Asiapack Limited HongKongChina – – Asiapack (Shenzhen) Co., Ltd E ShenzhenChina – – Chengdu Mentor Media Co., Ltd A ChengduChina – – Mentor Internet Solution Pte Ltd M Singapore – – Mentor Media (Chongqing) Co., Ltd ChongqingChina – – Mentor Media (Chongqing) Co., Ltd – Wuhan Branch MAKYTDKK WuhanChina – – – Mentor Media (Kunshan) Co., Ltd KunshanChina – – Mentor Media Ltd, Taiwan Branch TaoyuanTaiwan – – Mentor Media (Shenzhen) Co., Ltd D ShenzhenChina – – Mentor Media (USA) Supply Chain Management Inc C EastvaleUSA – – Mentor Media (Xiamen) Co., Ltd M XiamenChina – – Mentor Media CBZ (Chongqing) Co., Ltd ChongqingChina – – Mentor Media Juárez S.A. de C.V. MMJN JuárezMexico – – Mentor Media (Shenzhen) Logistics Ltd C ShenzhenChina – – Mentor Printing and Logistics Private Limited UTNPTC ChennaiIndia – – Mentor Shanghai Trading Co., Ltd A ShanghaiChina – – Mentor Supply Chain (Chongqing-CBZ) Co., Ltd MAYRXH ChongqingChina – – Mentor Supply Chain (Netherlands) BV Rotterdam Netherlands – – Mentor Media Czech s.r.o. CZ BrnoCzech Republic – – Mentor Supply Chain Mexico S.A. de C.V. MSCQH JuárezMexico – – Shanghai Mentor Media Co., Ltd D ShanghaiChina – – Tristellar Graphic Sdn. Bhd. T JohorMalaysia – – NOTE 9 – SHARES IN SUBSIDIARIES AUDITED ANNUAL REPORT – PARENT COMPANY, NOTES 110 ANNUAL AND SUSTAINABILITY REPORT 2021 SPECIFICATION OF SHARES IN SUBSIDIARIES (CONT.) Identity no. Registered oce Number of shares Percen- tage holding Book value of hol- ding, MSEK Elanders Holding GmbH HRB HerrenbergGermany – LGI Logistics Group International GmbH HRB243806 Herrenberg, Germany – – Helix Software + Support GmbH HRB Herrenberg, Germany – – ITG GmbH Internationale Spedition und Logistik HRB66157 Schwaig, Germany – – ITG Fulfillment GmbH HRB33746 Oberhausen, Germany – – ITG Air & Sea GmbH HRB250422 Munich, Germany – – ITG International Transports Inc. 43240627 Boston, USA – – LGI Netherlands BV Amsterdam, Netherlands – – Eijgenhuijsen Exploitatie BV Ruurlo, Netherlands – – Eijgenhuijsen Precisievervoer BV Ruurlo, Netherlands – – OOO ITG International Transports + Logistics OGRN Moscow, Russia – – LGI Austria GmbH FN 349601 w Laxenburg, Austria – – LGI Espana s.l. B Cabanillas del Campo, Spain – – LGI Hungaria Logisztikal Kft 13-09-140503 Páty, Hungary – – LGI Logistics Group International AB - Arlöv, Sweden – – LGI Logistics Group International Ltd GB 07251732 MiltonKeynesUK – – LGI Polska Sp. z o.o. KRS Wroclaw, Poland – – Logistics Worksolution Sp. z o.o. KRS 0000735255 Starachowice, Poland – – LGI Romania s.r.l. J Arad, Romania – – LGI Czechia s.r.o. CZ25204581 Zákupy, Czech Republic – – LGI Deutschland GmbH HRB354685 Herrenberg, Germany – – LGI FreightLog GmbH HRB761526 Freiberg am Neckar, Germany – – LGI Logistics Solution GmbH HRB32410 Duisburg, Germany – – LGI TechLog GmbH HRB513968 Herrenberg, Germany – – Logistik Lernzentrum GmbH HRB Böblingen, Germany – – Mölndal 1 GmbH HRB Herrenberg, Germany – – Mölndal 2 GmbH HRB Herrenberg, Germany – – Elanders Holding USA Inc. - Delaware, USA – Bergen Shippers Corp New Jersey, USA – – Bergen Logistics Canada, Inc. Brampton, Canada – – Bergen Ventures BV Veghel, Netherlands – – Bergen Logistics BV Veghel, Netherlands – – Rey 11 LLC New Jersey, USA – – Rex 11 SRL Chișinău, Moldova – – Elanders Hungary Kft -- ZalalövőHungary – Elanders Infologistics AB - MölndalSweden Elanders Sverige AB - BoråsSweden – – Elanders Italy S.r.l. PonzanoVenetoItaly – NOTE 9 – SHARES IN SUBSIDIARIES (CONT.) AUDITED ANNUAL REPORT – PARENT COMPANY, NOTES 111 ANNUAL AND SUSTAINABILITY REPORT 2021 SPECIFICATION OF SHARES IN SUBSIDIARIES (CONT.) Identity no. Registered oce Number of shares Percen- tage holding Book value of hol- ding, MSEK Elanders Ltd GB NewcastleUK – Elanders McNaughtan’s Ltd SC GlasgowUK – – Spreckley Ltd NewcastleUK – – Elanders Polska Sp. z o.o. KRS PłońskPoland – Elanders UK Ltd GB HarrogateUK – fotokasten GmbH HRB WaiblingenGermany – Midland Information Resources Company - DavenportUSA ElandersUSA, LLC - AtlantaUSA – – Goldcup 20533 AB - MölndalSweden Azalea Global IT AB - GöteborgSweden – – ReuseIT Sweden AB - VäxjöSweden – – ReuseIT Finance AB - VäxjöSweden – – Schmid Druck + Medien GmbH HRB KaisheimGermany – Schätzl Druck & Medien GmbH HRB DonauwörthGermany – – Total Nobookvalueisstatedforthecompaniesnotdirectlyownedbytheparentcompany NOTE 9 – SHARES IN SUBSIDIARIES (CONT.) AUDITED ANNUAL REPORT – PARENT COMPANY, NOTES 112 ANNUAL AND SUSTAINABILITY REPORT 2021 MSEK Salaries and holiday pay Social security contributions Interest Other accrued expenses and deferred income Total NOTE 12 – ACCRUED EXPENSES AND DEFERRED INCOME Equipment, tools, fixtures and fittings MSEK Opening acquisition value Acquisitions – Closing acquisition value Opening accumulated depreciation – – Depreciation for the year – – Closing accumulated depreciation – – Net residual value Depreciationhasbeenchargedentirelytoadministrativeexpenses Therehasbeennofinancialleasing NOTE 11 – TANGIBLE FIXED ASSETS NOTE 10 – INTANGIBLE ASSETS Goodwill Other intangible assets Total MSEK Opening acquisition value Acquisitions – – – – Closing acquisition value Opening accumulated amortization and write-downs – – – – – – Amortization of the year – – – – – – Closing accumulated amortization and write-downs – – – – – – Net residual value Otherintangibleassetsrefertosoftware AMORTIZATION SPECIFIED PER FUNCTION IN THE INCOME STATEMENT MSEK Selling expenses – – Administrative expenses – – Total – – AUDITED ANNUAL REPORT – PARENT COMPANY, NOTES 113 ANNUAL AND SUSTAINABILITY REPORT 2021 BANKOVERDRAFTFACILITIES Utilizedamountsandavailablecreditingroupbankoverdraft facilitiesaregivenbelow MSEK Bank overdraft facilities, utilized amount – – Bank overdraft facilities, granted amount Not utilized overdraft CHANGES IN INTEREST-BEARING LIABILITIES MSEK Opening liabilities New loans – Amortization of loans – – Other changes in interest-bearing liabilities – – Translation dierence – Closing liabilities AllliabilitiestocreditinstitutionsareborrowingdebtsLoansfromElanders’mainbanksfollowsthetermsinthecreditagreementand maturityisinJulyElandersABhasloansinUSDandEURTheinterestrateontheloansperDecemberwasintheinterval –(–)percent Pleaseseenotetotheconsolidatedfinancialstatementsforinformationregardingfinancialriskmanagement NOTE 13 – LIABILITIES TO CREDIT INSTITUTIONS PLEDGED ASSETS MSEK Floating charges Other pledged assets Total Given to: Credit institutions Total Otherpledgedassetsprimarilyrefertocollateralintheformof sharesinsubsidiaries CONTINGENT LIABILITIES MSEK Surety and contingent liabilities given for subsidiaries Total Exemption rules for subsidiaries TheparentcompanyhasissuedaguaranteeunderSection(C) oftheUKCompaniesActfortheyearendedDecember inrespectofthesubsidiariesElandersLtdElandersUKLtd ElandersMcNaugthan’sLtdandSpreckleyLtdregisteredinthe UnitedKingdomlistedinnoteTheparentcompanyguarantees alloutstandingliabilitiestowhichthesubsidiarycompaniesare subjecttoonDecemberuntiltheyaresatisfiedinfulland theguaranteeisenforceableagainstthecompanybyanyperson towhomthesubsidiarycompaniesareliableinrespectofthose liabilitiesThesubsidiarieshavetakenadvantageoftheexemption fromauditbyvirtueofSection(A)oftheCompaniesAct Theparentcompanyhasissuedaguaranteetothesubsidiaries SchmidDruckMedienGmbHElandersGmbHandElanders HoldingGmbHallregisteredinGermanyTheparentcompany guaranteesforallobligationsofSchmidDruckMedienGmbH ElandersGmbHandElandersHoldingGmbHexistingasof Decemberuntiltheendofthefollowingfinancialyear AsaconsequenceofthisSchmidDruckMedienGmbHElanders GmbHandElandersHoldingGmbHincludingitsGermansubsidi- ariesLGILogisticsGroupInternationalGmbHLGIDeutschland GmbHLGIFreightLOGGmbHLGITechLogGmbHHelixSoftware SupportGmbHLogistikLernzentrumGmbHLGILogistics SolutionGmbHITGGmbHInternationaleSpeditionundLogistik ITGFulfillmentGmbHandITGAir&SeaGmbHlistedinnote applytheexemptionrulessetoutinsec()GermanCommer- cialCode(HGB)Thoserulesexemptfromlegalauditandpub- lishingandallowspreparationreliefsofthefinancialstatements Furthermoreaccordingtosec()and()GermanCom- mercialCode(HGB)ElandersHoldingGmbHLGILogisticsGroup InternationalGmbHITGGmbHInternationaleSpeditionund LogistikITGAir&SeaGmbHandElandersGmbHareexempted fromthepreparationofconsolidatedfinancialstatementsandthe managementcommentaryastheyareincludedintheconsolidated financialstatementsofElandersAB NOTE 14 – PLEDGED ASSETS AND CONTINGENT LIABILITIES AUDITED ANNUAL REPORT – PARENT COMPANY, NOTES 114 ANNUAL AND SUSTAINABILITY REPORT 2021 PAID AND RECEIVED INTEREST MSEK Paid interest – – Received interest Total DIVIDENDS RECEIVED FROM SUBSIDIARIES MSEK Azalea Global IT AB – d|o|m Deutsche Online Medien GmbH – fotokasten GmbH – Elanders GmbH Elanders Hungary Kft Elanders Italy S.r.l. – Elanders Polska Sp. z o.o. Midland Information Resources Company – Total ADJUSTMENT FOR ITEMS NOT INCLUDED IN CASH FLOW FROM OPERATING ACTIVITIES MSEK Depreciation, amortization and write-downs of intangible and tangible assets Dividends from subsidiaries – – Unrealized exchange rates gains and losses – Other items – Total – Cash and cash equivalents Cashandcashequivalentsconsistprimarilyofcashandbank balancesShort-terminvestmentsareclassifiedascashandcash equivalentswhen –theriskforchangesintheirfairvalueisinsignificant –theyareeasilyconverted –theymatureinlessthanthreemonthsfromthedatetheywere acquired NOTE 15 – SUPPLEMENTARY INFORMATION TO THE STATEMENTS OF CASH FLOW 115 ANNUAL AND SUSTAINABILITY REPORT 2021 The Board of Directors and Chief Executive Officer hereby certify that the Annual Report has been prepared in accordance with good account- ing practice in Sweden and that the consolidated financial statements have been prepared in accordance with International Financial Report- ing Standards (IFRSs), referred to in the European Parliament’s and Council’s directive 1606/2002 of 19 July 2002 regarding the application of International Financial Reporting Standards, and that they give a true and fair view of the parent company’s and Group’s financial position and result, and that the Board of Directors’ Report provides a true and fair view of the development of the parent company’s and Group’s opera- tions, financial position and result and describes significant risks and uncertainties that the parent company and the companies within the Group face. The Board of Directors and Chief Executive Officer propose that the profit and other unreserved funds of SEK 1,330,680,637 in the parent company at the disposition of the Annual General Meeting should be dealt with accordingly: • SEK 3.60 per share, a total of SEK 127,287,904, is distributed to the shareholders • the remaining balance of SEK 1,203,392,733 is to be carried forward. The Board of Directors believes that the proposed dividends are justifi- able in relation to the demands that the business’ nature, scope and risks make on Group equity and on the Group’s consolidation needs, liquidity and its position in general. This Annual Report will be presented at the Annual General Meeting 21 April 2022 for adoption. MÖLNDAL 16 MARCH 2022 OUR AUDITOR’S REPORT WAS ISSUED ON 16 MARCH 2022 PRICEWATERHOUSECOOPERS AB Carl Bennet Chairman of the Board Johan Stern Vice Chairman of the Board Eva Elmstedt Dan Frohm Erik Gabrielson Cecilia Lager Anne Lenerius Caroline Sundewall Tomas Hilmarsson Authorized Public Accountant Auditor in Charge Martin Afzelius Magnus Nilsson Chief Executive Ocer Martin Schubach AUDITED ANNUAL REPORT – PROPOSED APPROPRIATION OF PROFITS APPROPRIATION OF PROFITS Proposed 116 ANNUAL AND SUSTAINABILITY REPORT 2021 Our audit approach Audit scope We designed our audit by determining materiality and assessing the risks of material misstatement in the consolidated financial statements. In par- ticular, we considered where management made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of manage- ment override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud. We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial state- ments as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the group operates. Materiality The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the finan- cial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the eco- nomic decisions of users taken on the basis of the consolidated financial statements. Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall group materiality for the consolidated financial statements as a whole. These, together with quali- tative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate on the financial statements as a whole. Key audit matters Key audit matters of the audit are those matters that, in our professional judgment, were of most significance in our audit of the annual accounts and consolidated accounts of the current period. These matters were addressed in the context of our audit of, and in forming our opinion thereon, the annual accounts and consolidated accounts as a whole, but we do not provide a separate opinion on these matters. REPORT ON THE ANNUAL ACCOUNTS AND CONSOLIDATED ACCOUNTS Opinions We have audited the annual accounts and consolidated accounts of Elanders AB (publ) for the year 2021 except for the corporate gover- nance statement and the statutory sustainability report on pages 50–54 and 55–65 respectively. The annual accounts and consolidated accounts of the company are included on pages 43–115 in this document. In our opinion, the annual accounts have been prepared in accor - dance with the Annual Accounts Act and present fairly, in all material respects, the financial position of parent company and the group as of 31 December 2021 and its financial performance and cash flow for the year then ended in accordance with the Annual Accounts Act. The con- solidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the group as of 31 December 2021 and their financial per- formance and cash flow for the year then ended in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU, and the Annual Accounts Act. Our opinions do not cover the corporate governance statement and the statutory sustainability report on pages 50–54 and 55–65 respectively. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts. We therefore recommend that the general meeting of shareholders adopts the income statement and balance sheet for the parent company and the group. Our opinions in this report on the annual accounts and consolidated accounts are consistent with the content of the additional report that has been submitted to the parent company’s audit committee in accordance with the Audit Regulation (537/2014) Article 11. Basis for opinions We conducted our audit in accordance with International Standards on Auditing (ISA) and generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor’s Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsi- bilities in accordance with these requirements. This includes that, based on the best of our knowledge and belief, no prohibited services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided to the audited company or, where applicable, its parent company or its controlled companies within the EU. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions AUDITED ANNUAL REPORT – AUDITOR’S REPORT AUDITOR’S REPORT To the general meeting of the shareholders of Elanders AB (publ), corporate identity number 556008-1621 117 ANNUAL AND SUSTAINABILITY REPORT 2021 VALUATION OF INTANGIBLE ASSETS With reference to Note 1 and Note 13. Goodwill and other intangible assets with an indefinite useful life represents a significant part of the Balance Sheet of Elanders. The Company performs an impairment assessment of the assets based on a calculation of the discounted cash flow for the cash generating units in which goodwill and other intangible assets are reported. This impairment test is based on a high level of judgments and assumptions regarding future cash flows. Information is provided in Notes 1 and 13 as to how the Company’s management has undertaken its assessments, and also provides information on important assumptions and sensitivity analyses. Key variables in the test are growth rate, profit margins and discount factor (cost of capital). It is presented that no impairment requirement has been identified based on the assumptions undertaken. In our audit, we have evaluated the calculation model applied by management. We have reconciled and critically tested essential variables against budget and strategic plan for the Company. We have analyzed the accuracy on how previous years assumptions have been met and assessed any adjustments to assumptions compared to previous year, as a result from changes in the busi- ness and external factors. We have tested the sensitivity analysis for key variables in order to assess the risk of need for impairment. We have also assessed the correctness of the disclosures included in the financial statements. RECOGNITION OF ACQUISITIONS With reference to Note 1 and Note 29. In the financial year 2021, Elanders made a number of acquisitions. Information on these acquisitions is presented in Note 29. The recognition of acquisitions involves a high degree of judge- ment by management. Significant estimates and judgements refer to the allocation of fair value in acquisition analyses for assets and liabilities, as well as referring to adjustments for adaptation to the group’s accounting principles. Our audit of the acquisitions were partially based on assessing the acquisition agreements as well as supporting documents for opening balances in the acquired companies. We have also evaluated the implemented adjustments for adaptation to the group’s accounting principles. Our audit has also included an assessment of significant estimates and judgements made in connection with the allocation of fair value in the acquisition analyses and earn out liabilities. We have also assessed the basis for the judgements and comparing those judgements with similar acquisitions in the group in previous years. We have also assessed the correctness of the disclosures of acquisitions included in the financial statements and assessed supporting documentation for the accounting of the acquisitions. KEY AUDIT MATTERS HOW OUR AUDIT ADDRESSED THE KEY AUDIT MATTER AUDITED ANNUAL REPORT – AUDITOR’S REPORT Other information than the annual accounts and consolidated accounts This document also contains other information than the annual accounts and consolidated accounts and is found on pages 1–42 and 120–130. The Board of Directors and the Managing Director are responsible for this other information. Our opinion on the annual accounts and consolidated accounts does not cover this other information and we do not express any form of assurance conclusion regarding this other information. In connection with our audit of the annual accounts and consolidated accounts, our responsibility is to read the information identified above and consider whether the information is materially inconsistent with the annual accounts and consolidated accounts. In this procedure we also take into account our knowledge otherwise obtained in the audit and assess whether the information otherwise appears to be materially misstated. If we, based on the work performed concerning this information, conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Board of Director’s and the Managing Director The Board of Directors and the Managing Director are responsible for the preparation of the annual accounts and consolidated accounts and that they give a fair presentation in accordance with the Annual Accounts Act and, concerning the consolidated accounts, in accor- dance with IFRS as adopted by the EU. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error. In preparing the annual accounts and consolidated accounts, The Board of Directors and the Managing Director are responsible for the assessment of the company’s and the group’s ability to continue as a going concern. They disclose, as applicable, matters related to going concern and using the going concern basis of accounting. The going concern basis of accounting is however not applied if the Board of Directors and the Managing Director intend to liquidate the company, to cease operations, or has no realistic alternative but to do so. The Audit Committee shall, without prejudice to the Board of Director’s responsibilities and tasks in general, among other things over- see the company’s financial reporting process. 118 ANNUAL AND SUSTAINABILITY REPORT 2021 Auditor’s responsibility Our objectives are to obtain reasonable assurance about whether the annual accounts and consolidated accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and generally accepted auditing standards in Sweden 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 annual accounts and consolidated accounts. A further description of our responsibility for the audit of the annual accounts and consolidated accounts is available on Revisors- inspektionen’s website: www.revisorsinspektionen.se/revisornsansvar. This description is part of the auditor’s report. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS Opinions In addition to our audit of the annual accounts and consolidated accounts, we have also audited the administration of the Board of Director’s and the Managing Director of Elanders AB (publ) for the year 2021 and the proposed appropriations of the company’s profit or loss. We recommend to the general meeting of shareholders that the profit be appropriated in accordance with the proposal in the statutory admin- istration report and that the members of the Board of Director’s and the Managing Director be discharged from liability for the financial year. Basis for opinions We conducted the audit in accordance with generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor’s Responsibilities section. We are inde- pendent of the parent company and the group in accordance with profes- sional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions. Responsibilities of the Board of Director’s and the Managing Director The Board of Directors is responsible for the proposal for appropria- tions of the company’s profit or loss. At the proposal of a dividend, this includes an assessment of whether the dividend is justifiable considering the requirements which the company’s and the group’s type of opera- tions, size and risks place on the size of the parent company’s and the group’ equity, consolidation requirements, liquidity and position in general. The Board of Directors is responsible for the company’s organization and the administration of the company’s affairs. This includes among other things continuous assessment of the company’s and the group’s financial situation and ensuring that the company’s organization is designed so that the accounting, management of assets and the com- pany’s financial affairs otherwise are controlled in a reassuring manner. The Managing Director shall manage the ongoing administration accord- ing to the Board of Directors’ guidelines and instructions and among other matters take measures that are necessary to fulfill the company’s accounting in accordance with law and handle the management of assets in a reassuring manner. Auditor’s responsibility Our objective concerning the audit of the administration, and thereby our opinion about discharge from liability, is to obtain audit evidence to assess with a reasonable degree of assurance whether any member of the Board of Directors or the Managing Director in any material respect: • has undertaken any action or been guilty of any omission which can give rise to liability to the company, or • in any other way has acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association. Our objective concerning the audit of the proposed appropriations of the company’s profit or loss, and thereby our opinion about this, is to assess with reasonable degree of assurance whether the proposal is in accor- dance with the Companies Act. Reasonable assurance is a high level of assurance, but is not a guaran- tee that an audit conducted in accordance with generally accepted audit- ing standards in Sweden will always detect actions or omissions that can give rise to liability to the company, or that the proposed appropriations of the company’s profit or loss are not in accordance with the Companies Act. A further description of our responsibility for the audit of the administration is available on Revisorsinspektionen’s website: www.revisorsinspektionen.se/revisornsansvar. This description is part of the auditor’s report. The auditor’s examination of the corporate governance statement The Board of Directors is responsible for that the corporate governance statement on pages 50–54 has been prepared in accordance with the Annual Accounts Act. Our examination of the corporate governance statement is conducted in accordance with FAR’s auditing standard RevU 16 The auditor’s examination of the corporate governance state- ment. This means that our examination of the corporate governance statement is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinions. A corporate governance statement has been prepared. Disclosures in accordance with chapter 6 section 6 the second paragraph points 2–6 of the Annual Accounts Act and chapter 7 section 31 the second paragraph the same law are consistent with the other parts of the annual accounts and consolidated accounts and are in accordance with the Annual Accounts Act/ the Annual Accounts Act for Credit Institutions and Securities Companies/ the Annual Accounts Act for Insurance Companies. The auditor’s opinion regarding the statutory sustainability report The Board of Directors is responsible for the statutory sustainability report on pages 55–65, and that it is prepared in accordance with the Annual Accounts Act. Our examination has been conducted in accordance with FAR:s auditing standard RevR 12 The auditor’s opinion regarding the statutory sustainability report. This means that our exami- nation of the statutory sustainability report is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinion. A statutory sustainability report has been prepared. AUDITED ANNUAL REPORT – AUDITOR’S REPORT 119 ANNUAL AND SUSTAINABILITY REPORT 2021 AUDITED ANNUAL REPORT – AUDITOR’S REPORT THE AUDITOR’S EXAMINATION OF THE ESEF REPORT Opinions In addition to our audit of the annual accounts and consolidated accounts, we have also examined that the Board of Directors and the Managing Director have prepared the annual accounts and consolidated accounts in a format that enables uniform electronic reporting (the Esef report) pursuant to Chapter 16, Section 4(a) of the Swedish Securities Market Act (2007:528) for Elanders AB (publ) for the financial year 2021. Our examination and our opinion relate only to the statutory requirements. In our opinion, the Esef report #[checksum] has been prepared in a format that, in all material respects, enables uniform electronic reporting. Basis for opinions We have performed the examination in accordance with FAR’s recom- mendation RevR 18 Examination of the Esef report. Our responsibility under this recommendation is described in more detail in the Auditors’ responsibility section. We are independent of Elanders AB (publ) in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements. We believe that the evidence we have obtained is sufficient and appro- priate to provide a basis for our opinion. Responsibilities of the Board of Director’s and the Managing Director The Board of Directors and the Managing Director are responsible for ensuring that the Esef report has been prepared in accordance with the Chapter 16, Section 4(a) of the Swedish Securities Market Act (2007:528), and for such internal control that the Board of Directors and the Managing Director determine is necessary to prepare the Esef report without material misstatements, whether due to fraud or error. Auditor’s responsibility Our responsibility is to form an opinion with reasonable assurance whether the Esef report is in all material respects prepared in a format that meets the requirements of Chapter 16, Section 4(a) of the Swedish Securities Market Act (2007:528), based on the procedures performed. RevR 18 requires us to plan and execute procedures to achieve reason- able assurance that the Esef report is prepared in a format that meets these requirements. Reasonable assurance is a high level of assurance, but it is not a guarantee that an engagement carried out according to RevR 18 and generally accepted auditing standards in Sweden will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the ESEF report. The audit firm applies ISQC 1 Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and other Assurance and Related Services Engagements and accordingly maintains a compre- hensive system of quality control, including documented policies and procedures regarding compliance with professional ethical requirements, professional standards and legal and regulatory requirements. The reasonable assurance engagement involves obtaining evidence, through various procedures, that the Esef report has been prepared in a format that enables uniform electronic reporting of the annual accounts. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement in the report, whether due to fraud or error. In carrying out this risk assessment, and in order to design procedures that are appropriate in the circumstances, the auditor considers those elements of internal control that are relevant to the preparation of the Esef report by the Board of Directors and the Managing Director, but not for the purpose of expressing an opinion on the effectiveness of those internal controls. The reasonable assur- ance engagement also includes an evaluation of the appropriateness and reasonableness of assumptions made by the Board of Directors and the Managing Director. The procedures mainly include a technical validation of the Esef report, i.e. if the file containing the Esef report meets the technical specification set out in the Commission’s Delegated Regulation (EU) 2019/815 and a reconciliation of the Esef report with the audited annual accounts and consolidated accounts. Furthermore, the procedures also include an assessment of whether the Esef report has been marked with iXBRL which enables a fair and com- plete machine-readable version of the consolidated statement of financial performance, statement of financial position, statement of changes in equity and the statement of cash flow. PricewaterhouseCoopers AB was appointed auditor of Elanders AB (publ) by the general meeting of the shareholders on the 28 April 2021 and has been the company’s auditor since the 21 April 2008. Mölndal, 16 March 2022 PricewaterhouseCoopers AB Tomas Hilmarsson Authorized Public Accountant Auditor in charge 120 ANNUAL AND SUSTAINABILITY REPORT 2021 Reconciliation ALTERNATIVE PERFORMANCE MEASURES MSEK Average total assets Average cash and cash equivalents – – – – – Average non-interest-bearing liabilities – – – – – Average capital employed Operating result Return on capital employed % Interest-bearing long-term liabilities Interest-bearing short-term liabilities Cash and cash equivalents – – – – – Net debt Interest-bearing long-term liabilities excl. IFRS 16 Interest-bearing short-term liabilities excl. IFRS 16 Cash and cash equivalents – – – – – Net debt excl. IFRS 16 Operating result Depreciation and write-downs EBITDA Operating result excl. IFRS 16 Depreciation and write-downs excl. IFRS 16 EBITDA excl. IFRS 16 Net debt/EBITDA ratio, times Net debt/EBITDA ratio excl. IFRS 16, times Operating result Amortization of assets identified in conjunction with acquisitions EBITA Adjustments for one-o items – – – EBITA adjusted Net sales EBITA-margin, % EBITA-margin adjusted, % OTHER INFORMATION – RECONCILIATION ALTERNATIVE PERFORMANCE MEASURES 121 ANNUAL AND SUSTAINABILITY REPORT 2021 OTHER INFORMATION – RECONCILIATION ALTERNATIVE PERFORMANCE MEASURES MSEK Share price at year-end, SEK Number of shares as per balance sheet date, in thousands Net debt Equity attributable to non-controlling interests – Enterprise value, MSEK Total assets Cash and cash equivalents – – – – – Non-interest-bearing liabilities – – – Capital employed, MSEK Averageshareprice Dividends per share, SEK ) – Dividend yield % – Share capital SharecapitalpershareSEK Cash flow from operating activities – Net financial items Paid tax Net investments – – – – – Operating cash flow – – Averagenumberofsharesinthousands OperatingcashflowpershareSEK – – Volumeonthestockmarketinthousands Turnover rate ) Proposedbytheboardfortheyear 122 ANNUAL AND SUSTAINABILITY REPORT 2021 OTHER INFORMATION – FINANCIAL DEFINITIONS Added value Net turnover minus material costs and forward invoiced disburse- ments for outwork. Added value ratio Added value in relation to net turnover. Average number of employees The number of employees at the end of each month divided number of months. Average number of shares Weighted average number of shares outstanding during the period. Capital employed Total assets less liquid funds and non-interest-bearing liabilities. Capital turnover rate Net sales in relation to average total assets. Cash-flow per share Cash-flow from operating activi- ties divided by the average num- ber of shares. Debt/equity ratio Net debt in relation to reported equity, including non-controlling interests. Dividend yield Dividends in relation to average share price. Earnings per share Result for the year divided by the average number of shares. EBIT Earnings before interest and taxes; operating result. EBITA Earnings before interest, taxes and amortization; operating result plus amortization of assets identi- fied in conjunction with acquisi- tions. EBITA adjusted Earnings before interest, taxes and amortization; operating result plus amortization of assets identified in conjunction with acquisitions adjusted for one-o items. EBITDA Earnings before interest, taxes, depreciation and amortization; operating result plus depreciation, amortization and write-downs of intangible assets and tangible fixed assets. Enterprise value Market value plus net debt and non-controlling interests. Equity per share Equity divided by the number of outstanding shares at balance sheet date. Equity ratio Equity, including non-controlling interests, in relation to total assets. Interest coverage ratio Operating result plus interest income divided by interest costs. Net debt Interest-bearing liabilities less liquid funds. Operating cash flow Cash flow from operating activi- ties and investing activities, ad- justed for paid taxes and financial items. Operating cash flow per share Operating cash flow divided by the average number of shares. Operating margin Operating result in relation to net sales. Operating result Earnings before financial items; EBIT. P/E ratio Share price at year-end in relation to earnings per share. Profit margin Result after financial items in rela- tion to net turnover. Proportion of risk capital Risk capital in relation to total assets. P/S ratio Share price at year-end in relation to net turnover per share. Return on capital employed (ROCE) Operating result in relation to average capital employed. Return on equity Result for the year in relation to average equity. Return on total assets Operating result plus financial income in relation to average total assets. Risk capital Equity plus deferred tax liabilities. Turnover rate Volume on the stock market divided by the average number of shares. Financial DEFINITIONS 123 ANNUAL AND SUSTAINABILITY REPORT 2021 OTHER INFORMATION – SPECIFIC TERMS After sales Provision of services, support and spare parts after making an initial sale. This occurs for example in the provision of products which requires regular upgrades. Block-chain technology A block-chain is a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block, a time- stamp and transaction data. By design, a blockchain is resistant to modification of the data. It is “an open, distributed ledger that can record transactions between two parties eciently and in a verifi- able and permanent way”. By using block-chain technology the user can ascertain that the product is genuine, as the whole supply chain for the product can be verified. Business-to-business (B2B) Sale of goods and services between businesses, such as between a manufacturer and a wholesaler, or between a whole- saler and a retailer. Business-to-consumer (B2C) Sale of goods and services between a company and consumers. Contract Logistics Contract logistics is a business model within the framework of supply chain management, which is based on a long-term coopera- tion between a manufacturer or a dealer of goods and a logistics service provider. The model is normally regulated by a service contract, comprises a considerable business volume and is individually formed. Cross-docking Unloading materials from incom- ing transports and loading these directly into outbound transports, with little or no storage in be- tween. This may be done to change the type of package, to sort material intended for dier- ent destinations, or to combine material from dierent origins into transports with the same or similar destinations. Digital print The transfer of information to paper via a digital file that is then printed out with the help of a high-speed printer. This technique is a prerequisite for print-on- demand and makes quick deliver- ies in small editions possible. O- set technique is still more ecient for larger editions. E-commerce Online sales, also known as electronic commerce or internet commerce, refers to the buying and selling of goods or services using the internet, and the transfer of money and data to execute these transactions. End-to-end solution An end-to-end solution refers to a comprehensive solution, where all the middle layers or steps are elim- inated to optimize performance and eciency in a process. Fulfillment This term used to describe a number of steps in the process be- tween production and distribution. They can include assembly, con- figu ration, bar-coding, packaging for end customers. Just-in-time (JIT) Delivery precision – delivery exactly when the need arises. The concept also entails that custom- ers do not need to store their products. Life Cycle Management Services that are carried out during the whole or parts of a product’s life cycle, from when the product is manu factured to it is recycled. Examples of services are delivery, installation, training, maintenance, wiping of data, upgrade of software, refurbish- ment and reselling or recycling. The service aims to maximize the product’s life and optimize logis- tics flow in order to reduce the environmental impact. Oset print A printing method in which ink and water are spread out on a printing plate that is then pressed against a rubber blanket. This absorbs the ink and transfers it to the paper. The expression oset comes from the fact that the print- ing plate never touches the paper. Omni-channels An integrated way of thinking about people’s relationships with organizations. Rather than working in parallel, communication chan- nels are designed to cooperate and build a coherent, evolving, cross-channel experience. The approach includes channels such as physical locations, FAQ web pages, social media, mobile applications and telephone com- munication. Companies that use omni-channels give their custom- ers the ability to be in contact with them through multiple avenues at the same time. Online print A service where printed matter can easily be ordered via a web- based interface and the user can create their own unique design. Typical products are business cards, catalogues, books, photo products, newsletters, calendars and brochures. Outsourcing Companies or organizations choose to let an external party handle an activity or a process. This activity or process is then said to be outsourced. Packaging A product manufactured to pro- tect, handle, deliver and present an item. Reverse logistics Normally, logistics deal with events that bring the product towards the customer. In the case of reverse logistics, the product goes back in the supply chain. For instance, goods move from the customer back to the distributor or to the manufacturer. The reverse logistics process includes the management of surplus equipment, returns as well as defective products includ- ing testing, dismantling, repairing, recycling or disposing the product. Supply chain The movement and storage of goods and or information from point of origin to end-users. Supply chain manage ment can be defined as the design, planning, execution, control and monitoring of activities with the objective of creating net value, building a com- petitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measur- ing performance globally. Value Recovery The process of maximizing the value of unused or end-of-life assets through eective reuse, recycling or divestment. Specific TERMS 124 ANNUAL AND SUSTAINABILITY REPORT 2021 CARL BENNET Chairman of the Board. Born: 1951. B.Sc. (Econ.), Ph.D. h.c. (Med.), Ph.D. h.c. (Tech.) Elected in: 1997. Appointments on the Elanders Board: Chairman of the nomination committee and remuneration committee. Other appointments: Chairman and CEO of Carl Bennet AB. Chairman of the board of Lifco AB. Deputy Chair- man of the board of Arjo AB and Getinge AB. Member of the board of Holmen AB and L E Lundberg- företagen AB. Previous appointments: President and CEO of Getinge AB. Shareholding through companies: 1,814,813 Class A shares and 15,903,596 Class B shares. JOHAN STERN Deputy Chairman of the Board. Born: 1951. Bachelor of Science (Econ.). Elected in: 1998. Appointments on the Elanders Board: Chairman of the audit committee and member of the remuneration committee. Other appointments: Chairman of the board of Fädriften Invest AB, HealthInvest Partners AB, Rolling Optics AB, Skanör Falsterbo Kallbadhus AB and Harry Cullbergs Fund Foundation. Member of the board of Carl Bennet AB, Estea AB, and Lifco AB. Previous appointments: Active within SEB’s operations in Sweden and the USA. Shareholding: 110,000 Class B shares. ANNE LENERIUS Member of the Board. Born: 1956. Business Administration. Elected in: 2014. Appointments on the Elanders Board: Member of the audit committee. Other appointments: Member of the branch board Handelsbanken Älvsborg. Member of the board and CEO of Arado AB. Previous appointments: Chief Financial Ocer of Carl Bennet AB. Group Controller at Ernström Holding AB. Finance Manager at JMS/Q Systemhydraulik AB. Chair- man of the Board of Entercircle Konfektion AB. Shareholding: 6,892 Class B shares. MAGNUS NILSSON Member of the Board. President and Chief Executive Ocer of Elanders AB. Born: 1966. Education in Graphic Technology, Design, Business Administration and Marketing. Elected in: 2010. Employed in Elanders since 1999. Shareholding: 88,577 Class B shares. OTHER INFORMATION – BOARD OF DIRECTORS ERIK GABRIELSON Member of the Board. Born: 1962. Master of Laws. Elected in: 2012. Appointments on the Elanders Board: Member of the remuneration committee. Other appointments: Lawyer and partner of the law firm Vinge. Chairman of the board of Eldan Recycling A/S. Member of the board of BuildData Group AB, Carl Bennet AB and Lifco AB. Shareholding: None. Board of DIRECTORS 125 ANNUAL AND SUSTAINABILITY REPORT 2021 CECILIA LAGER Member of the Board. Born: 1963. Business Administration. Elected in: 2009. Appointments on the Elanders Board: Member of the audit committee. Other appointments: Chairman of the board of Navigera AB. Member of the board of Altor Fund Manager AB, Clemondo Group AB, Headsent AB, Mobilaris AB, SignUp Software AB and Sveab Holding AB. Previous appointments: CEO SEB Funds. Marketing Director Alecta. Member of the board of Cinnober Financial Technology AB, Collector AB, Collector Bank AB, Evolution Gaming AB, Greengold Group AB and Knowit AB. Shareholding: 37,521 Class B shares. MARTIN SCHUBACH Employee representative. Born: 1974. Upper secondary education. Elected in: 2015. Work: Data and automation at Elanders Sverige AB. Shareholding: 267 Class B shares. MARTIN AFZELIUS Employee representative. Born: 1969. Education in Graphic Technology, Community College and University education. Elected in: 2019. Work: Machine operator at Elanders Sverige AB. Shareholding: None. JOHAN LIDBRINK Deputy employee representative. Born: 1979. Upper secondary education. Elected in: 2020. Work: Warehouse worker at Elanders Sverige AB. Shareholding: None. DAN FROHM Member of the Board. Born: 1981. M.Sc. in Industrial Engineering and Management. Elected in: 2017. Appointments on the Elanders Board: Member of the audit committee. Other appointments: Member of the board of Arjo AB, Carl Bennet AB, Getinge AB, Lifco AB and Swedish-American Chamber of Commerce, Inc. Previous appointments: Management consultant at Applied Value LLC (New York oce). Shareholding (own and related parties): 27,206 Class B shares. CAROLINE SUNDEWALL Member of the Board. Born: 1958. Master of Science in Business Administration, Stockholm School of Economics. Elected in: 2015. Appointments on the Elanders Board: Member of the audit committee. Other appointments: Member of the board and CEO of Caroline Sundewall AB. Member of the board of BSÖ Holding AB and Mertzig Asset Management. Chairman of the board of the Streber Cup Foundation. Previous appointments in selection: Chairman of the board of Cloetta and Svolder. Member of the Board of Cramo (Finland), Hemfosa, TeliaSonera, Electrolux, Lifco, Haldex, Pågen, Ahlsell, SinterCast and Södra Skogs ägarna. Shareholding: 8,000 Class B shares. EVA ELMSTEDT Member of the Board. Born: 1960. Bachelor’s degree in Economics and Computer Science, Stockholm School of Economics and Indiana University of Pennsylvania, USA. Elected in: 2021. Appointments on the Elanders Board: Member of the audit committee. Other appointments: Chairman of the board of Omegapoint AB, Proact IT Group AB, Semcon AB and Telia Carrier AB. Member of the board of AddLife AB, Arjo AB and Smart Eye AB. Previous appointments: Business Area Manager for Global Services and member of the management team for Nokia Networks and Nokia Siemens Networks. Business Area Manager Ericsson, CIO/IT Manager at the telecom operator 3, CEO of subsidiaries at Semcon. Member of the board of Addtech, Knowit and Thule. Shareholding (own and related parties): 1,500 Class B shares. 126 ANNUAL AND SUSTAINABILITY REPORT 2021 OTHER INFORMATION – GROUP MANAGEMENT MAGNUS NILSSON President & CEO. Born: 1966. Employed since 1999. Education in Graphic Technology, Design, Business Administration and Marketing. Active within the graphic industry since 1987. Head of production Elanders in Hungary 2002. MD Elanders Berlings Skogs 2003–2005 and Elanders in China 2005–2009. Shareholding: 88,577 Class B shares. ANDRÉAS WIKNER CFO. Born: 1971. Employed since 2007. Master of Science in Business Administration. Auditor during 1997–2007. Approved Public Accountant 2004. Autho- rized Public Accountant 2005. Shareholding: 4,664 Class B shares. BERND SCHWENGER Supply Chain Solutions (LGI), President. Born: 1972. Employed since 2018. Diploma in Transport Economics and Logistics. Almost 20 years of experience within Supply Chain Management and Transportation Logistics, inclu- ding 11 years as Manager at HP and 7 years as Director Transportation and Managing Director at Amazon Logistics in Germany. Shareholding: None. KOK KHOON LIM Supply Chain Solutions (Mentor Media), President. Born: 1955. Employed since 2014. Bachelor’s degree in Electrical & Electronics Engineering and Master of Science (Industrial Engineering). More than 30 years of experience in world- class multinational corporations and positions such as General Manager for Hewlett Packard’s Handheld Mobile Products Division, Vice President and Chief Technology Ocer for Philips Consumer Electronics Home Entertainment Business Group and Managing Directors for Technology Solutions Business and Innovation Centre’s at Wearnes Group. Joined Elanders in connection with the acquisition of Mentor Media in 2014, where he was CEO. Shareholding: None. Group MANAGEMENT 127 ANNUAL AND SUSTAINABILITY REPORT 2021 AUDITORS AND NOMINATION COMMITTEE OTHER INFORMATION – AUDITORS AND NOMINATION COMMITTEE AUDITORS PricewaterhouseCoopers AB with the authorized public accountant: Tomas Hilmarsson Born: 1981. Company Auditor in Charge since 2021. Company Auditor since 2018. Other appointments: Lifco AB and Doro AB. THE NOMINATION COMMITTEE Carl Bennet Chairman and contact, represents Carl Bennet AB. Hans Hedström Carnegie Funds. Adam Gerge Didner & Gerge Funds. Fredrik Carlsson Svolder AB. Nomination committee questions can be submitted by e-mail or post mail to: [email protected] Elanders AB Att: Nomination Committee Flöjelbergsgatan 1 C 431 35 Mölndal, Sweden SVEN BURKHARD Print & Packaging Solutions, President. Born: 1985. Employed since 2017 and prior to that was employed at, among other places, the German company Flyeralarm. Education in Graphic Technology, Design and Business Administration. More than 15 years’ experience in printing technologies, E-commerce, Product Management and Business Development. Shareholding: None. KEVIN ROGERS President Global Sales. Born: 1969. Employed since 1999. Further education qualifications in; Mathe- matics, English, IT, Production planning and a member of the Chartered Institute of Marketing. More than 25 years’ experience in digital print technologies, sales and marketing strategy, optimizing workflow and eective leadership. Joined Elanders in connection with the acquisition of Hindson Print in 1999, where he was digital print manager. Shareholding: None. HEAD OFFICE Elanders AB Flöjelbergsgatan 1 C 431 35 Mölndal, Sweden Web: www.elanders.com E-mail: [email protected] Tel: +46 31 750 00 00 President & CEO: Magnus Nilsson SUPPLY CHAIN SOLUTIONS BERGEN LOGISTICS Web: bergenlogistics.com E-mail: [email protected] CEO: Ron Roman Bergen Logistics Corporate HQ 5903 West Side Ave North Bergen, NJ 07047, USA Tel: +1 201 854 1512 USA Bergen Logistics 5903 West Side Ave North Bergen, NJ 07047, USA Tel: +1 201 854 1512 Bergen Logistics 299 Thomas E. Dunn Memorial Hwy Rutherford, NJ 07070, USA Tel: +1 201 854 1512 Bergen Logistics 1055 Hanover St Wilkes-Barre, PA 18706, USA Tel: +1 201 854 1512 Bergen Logistics 16012 Arthur St Cerritos, CA 90703, USA Tel: +1 201 854 1512 CANADA Canada INC 38 St Dennis Rd Brampton, ON L6R 0B3, Canada Tel: +1 905 792 8585 NETHERLANDS Bergen Logistics EU De Amert 445 5462 GH Veghel, Netherlands Tel: +31 857 602 726 MOLDOVA REX 11 S.R.L. mun. Chișinău, sec. Centru, str. Negreșteni, 9, ap.(of.) 11, Moldova Tel: +1 201 854 1512 LGI Web: www.lgi.de E-mail: [email protected] President: Bernd Schwenger LGI Logistics Group International GmbH Corporate HQ Hewlett-Packard-Straße 1/1 71083 Herrenberg, Germany Tel: +49 7032 2291 0 Fax: +49 7032 2291 625 GERMANY AREA STUTTGART-KARLSRUHE Böblingen c/o LGI Deutschland GmbH Hewlett-Packard-Straße 2 71034 Böblingen Tel: +49 7031 3060 402 Fax: +49 7031 3060 420 c/o LGI Deutschland GmbH Schickardstraße 27 71034 Böblingen Tel: +49 7031 3060 208 c/o LGI Deutschland GmbH Hans-Klemm-Straße 27 71034 Böblingen Tel: +49 7031 3060 400 Fax: +49 7031 3060 465 Bondorf c/o LGI Deutschland GmbH Am Römerfeld 4 71149 Bondorf Tel: +49 7457 955 6051 Fax: +49 7457 955 6309 Ehningen c/o LGI Deutschland GmbH Mercedesstraße 10 71139 Ehningen Tel: +49 7031 3060 400 Fax: +49 7031 3060 465 Esslingen c/o LGI Deutschland GmbH Fritz-Müller-Straße 116 73730 Esslingen Tel: +49 7032 2291 470 Fax: +49 711 45984 140 Freiberg am Neckar c/o LGI FreightLog GmbH Murrerstraße 1 71691 Freiberg am Neckar Tel: +49 7032 2291 403 Gomaringen c/o LGI Deutschland GmbH Siemensstraße 4 72810 Gomaringen Tel: +49 7121 9456 413 Großbottwar c/o LGI Deutschland GmbH Schleifwiesenstraße 25-27 71723 Großbottwar Tel: +49 711 4598 4130 Herrenberg c/o LGI Deutschland GmbH Heisenbergstraße 2 71083 Herrenberg Tel: +49 7032 2291 0 Fax: +49 7032 2291 111 Heilbronn c/o LGI Deutschland GmbH c/o AUDI AG Alexander Baumann Straße 45 Building K40 74078 Heilbronn Tel: +49 172 734 93 81 Horb am Neckar c/o LGI Deutschland GmbH Manfred-Volz-Straße 10 P3 Park Horb a. N. 72160 Horb am Neckar Reutlingen Max-Planck-Straße 77-83 72766 Reutlingen Tel: +49 7032 8939 343 Fax: +49 7032 8939 310 c/o LGI Deutschland GmbH Heubergstraße 6 72766 Reutlingen Tel: +49 7121 9456 485 Sindelfingen c/o Daimler AG Building 46/48 71063 Sindelfingen Tel: +49 172 8307245 Stuttgart c/o LGI Deutschland GmbH c/o Daimler AG Am Nordkai 3 70327 Stuttgart Tel: +49 162 2594881 Stuttgart Airport c/o ITG Air & Sea GmbH Gottlieb-Manz-Straße 12 70794 Filderstadt-Bernhausen Tel: +49 711 797 309 0 Fax: +49 711 797 309 15 Waghäusel c/o LGI Deutschland GmbH Karlsruher Straße 61 68753 Waghäusel Tel: +49 7254 9580 113 Fax: +49 7254 9580 199 Winnenden c/o LGI Deutschland GmbH Max-Eyth-Straße 14 71364 Winnenden Tel: +49 711 4598 4130 AREA HAMBURG-BREMEN Bremen c/o ITG Air & Sea GmbH Pieperstraße 1-3 28195 Bremen Tel: +49 421 175 69 0 Fax: +49 421 175 69 19 Hamburg c/o ITG Air & Sea GmbH Weg beim Jäger 218-222 22335 Hamburg Tel: +49 40 500 62 0 Fax: +49 40 598 033 Hamburg-Altenwerder c/o LGI Deutschland GmbH Altenwerder Hauptstraße 17-23 21129 Hamburg Tel: +49 4033 3966 160 Fax: +49 4033 3966 190 Hamburg-Billbrook c/o LGI Deutschland GmbH Werner-Siemens-Straße 39 22113 Hamburg Tel: +49 40 81973 523 Fax: +49 40 81973 520 c/o LGI Deutschland GmbH Troplowitzstr. 10 22529 Hamburg Tel: +49 162 3099593 AREA FRANKFURT-HEIDELBERG Ketsch c/o LGI Deutschland GmbH Vorpommernstraße 2 68775 Ketsch Tel: +49 6105 968 52 0 Fax: +49 6105 968 52 80 Mörfelden-Walldorf (Frankfurt Airport) c/o ITG Air & Sea GmbH Hessenring 13 64546 Mörfelden-Walldorf Tel: +49 6105 968 52 0 Fax: +49 6105 968 52 80 Wiesloch c/o LGI Deutschland GmbH c/o Heidelberger Druckmaschinen AG Gutenbergring 19 Building 2 69168 Wiesloch Tel: +49 6222 8221 36 Fax: +49 6222 8265 812 AREA MUNICH-NUREMBERG Kösching c/o LGI Deutschland GmbH Einsteinstraße 6 85092 Kösching Tel: +49 8456 916 7147 Manching c/o LGI Deutschland GmbH Königsaue 2 85077 Manching Tel: +49 8459 3334 150 Fax: +49 8459 3334 190 Nuremberg c/o ITG Air & Sea GmbH Andernacher Straße 53 90411 Nürnberg Tel: +49 911 350 187 0 Fax: +49 911 350 187 19 Schwaig (Munich Airport) c/o ITG GmbH Internationale Spedition + Logistik Eichenstraße 2 85445 Schwaig (Oberding) Tel: +49 8122 567 1300 Fax: +49 08122 567 1301 c/o ITG Air & Sea GmbH Eichenstraße 2 85445 Schwaig (Oberding) Tel: +49 8122 567 1300 Fax: +49 8122 567 1301 AREA BERLIN-DRESDEN Neustadt in Sachsen c/o LGI Deutschland GmbH Kirschallee 6 01844 Neustadt in Sachsen Tel: +49 3596 586 60 Fax: +49 3596 586 699 Werder c/o LGI Deutschland GmbH Am Magna Park 4 OT Plötzin 14542 Werder (Havel) Tel: +49 33 275749 120 Fax: +49 33 275749 190 AREA DÜSSELDORF Düsseldorf Airport c/o ITG Air & Sea GmbH Ungelsheimer Weg 6 40474 Düsseldorf Tel: +49 211 566 236 0 Fax: +49 211 566 236 30 Herten c/o LGI Deutschland GmbH Friedrich-Bergius-Straße 1-3 45699 Herten Tel: +49 2366 5011 110 Fax: +49 2366 5011 190 Hünxe c/o LGI Logistics Solution GmbH Werner-Heisenberg-Straße 1 46569 Hünxe Tel: +49 281 16400 102 Fax: +49 281 16400 109 Oberhausen c/o ITG Fulfillment GmbH Im Lekkerland 4 46147 Oberhausen Tel: +49 208 94146 0 AREA ERFURT Erfurt c/o LGI TechLog GmbH Joseph-Meyer-Straße 3 99095 Erfurt Tel: +49 36204 722 201 AUSTRIA LGI Austria GmbH Vienna Frankstahlstraße 1 2361 Laxenburg Tel: +43 2236 860 936 110 Fax: +43 2236 860 936 111 CZECH REPUBLIC LGI Czechia s. r. o. Prague Poděbradská 601 25090 Jirny Tel: +420 281 049 080 Fax: +420 281 049 099 F.V.Veselého 2635/15 19300 Horní Počernice Tel: +420 702 204 318 Zákupy Nadrazni 295 47123 Zákupy Tel: +420 487 828 018 Fax: +420 487 828 016 Mladá Boleslav Plazy 129 29301 Mladá Boleslav HUNGARY LGI Hungária Logisztikai Kft. Budapest M1 Üzleti Park B/6 épület H 2071 Páty Tel: +36 23 312 978 Tormásrét utca 10. H 2051 Biatorbágy Tel: +36 23 311 504 NETHERLANDS LGI Netherlands B.V. Amsterdam Kaapstadweg 34A 1047 HG Amsterdam Tel: +31 20 8515 740 Fax: +31 20 8515 701 Nieuw-Vennep Lireweg 5 F 2153 PH Nieuw-Vennep Tel: +31 20 8515 700 Fax: +31 20 8515 701 Rotterdam Van Weerden Poelmanweg 10 3088 EB Rotterdam Tel: +31 10 8511 600 Fax: +31 10 8511 601 128 ANNUAL AND SUSTAINABILITY REPORT 2021 OTHER INFORMATION – CONTACT ELANDERS Contact ELANDERS Ruurlo Spoorstraat 15 7261 AE Ruurlo Tel: +31 573 45 31 80 Fax: +31 573 45 32 72 Den Bosch Aziëlaan 22A 5232 BA Den Bosch Tel: +31 573 45 31 80 Fax: +31 573 45 32 72 Drachten Galvanilaan 7 9207 HG Drachten Tel: +31 573 45 31 80 Fax: +31 573 45 32 72 POLAND LGI Polska Sp. z. o. o. Wrocław ul. Magazynowa 2 Bielany Wroclawskie 55-075 Kobierzyce Tel: +48 71 38 22 525 Fax +48 71 72 24 142 ROMANIA LGI Romania s.r.l. Arad I nr. 5A, Zona Industriala Vest RO – 310502 Arad Tel: +43 2236 860 465 RUSSIA OOO ITG International Transport + Logistics Moscow Ul. Narodnogo Opoltscheniya 34/1 Oce 512 RU – 123423 Moscow Tel: +7 495 604 19 84 Fax: +7 495 604 19 84 SWEDEN LGI Logistics Group International AB Borås Viaredsvägen 14 504 64 Borås Tel: +46 706 790 614 UNITED KINGDOM LGI Logistics Group International UK Milton Keynes 6 Deans Road Old Wolverton England MK12 5NA Milton Keynes Tel: +44 19 08318 748 USA ITG International Transports, Inc. Atlanta 100 World Drive Suite 210 GA 30269 Peachtree City Tel: +1 470 531 4500 Fax: +1 470 285 141 Boston 6 Kimball Lane Suite 230 MA 01940 Lynnfield Tel: +1 617 455 60 20 Fax: +1 617 455 60 15 MENTOR MEDIA Web: www.mentormedia.com E-mail: [email protected] President: Kok Khoon Lim Mentor Media Ltd Corporate HQ 47 Jalan Buroh, #08-02 Singapore 619491, Singapore Tel: +65-6631 3333 Fax: +65-6896 3826 BRAZIL Mentor Gerenciamento de Supply Chain (Brasil) Ltda Rod SP 073, 1.800 – KM 37 1 Galpao Modulos 01, 02 E 03 – Bloco 300 – Distrito Industrial Do Lageado – Salto – SP Tel: +55 11 3195 3400 CHINA Chengdu Mentor Media Co., Ltd Floor3, BLDG 1, No.11 Zongbao Dadao Yiduan, Gongxing Street, Shuangliu Area, Chengdu City, 610213 Tel: +86-28 6708 2288 Fax: +86-28 6708 2285 Mentor Media (Chongqing) Co., Ltd Unit 4, 5, 6, Level 3, HP PC Factory, No.22, Xi Yuan Yi Lu, Shapingba District, Chongqing City, 401332 Tel: +86-23 8625 9808 Fax: +86-23 8625 9828 Mentor Media CBZ (Chongqing) Co., Ltd No. 6-2 Zongbao Road, Shapingba District, Chongqing City, 401331 Tel: +86-23 6562 0388 Fax: +86-23 6566 0985 Mentor Supply Chain (Chong Qing-CBZ) Co., Ltd The ground floor, No. 6-2 Zongbao Road, Shapingba District, Chongqing City, 401331 Tel: +86-23 6562 0388 Fax: +86-23 6566 0985 Mentor Media (Kunshan) Co., Ltd No.48, Factory Building, Central Avenue, Kunshan Export Processing Zone, Kunshan City, Jiangsu Province 215301 Tel: +86-512 5772 0005 Mentor Media (Shenzhen) Co., Ltd Unit 302-303, No.6 Hongmian Dao, Fu Bao Street, Futian District, Shenzhen 518038 Tel: +86-755 8348 0418 Fax: +86-755 8359 5154 Mentor Media (Shenzhen) Logistics Ltd Unit 302, No.6 Hongmian Dao, Fu Bao Street, Futian District, Shenzhen 518038 Tel: +86-755 8348 0418 Fax: +86-755 8359 5154 Mentor Media (Xiamen) Co., Ltd No. 56 HuLi Dadao, 3rd Floor, Unit S1 & S2, HuLi District, Xiamen, Fujian, 361006 Tel: +86-592 570 3399 Fax: +86-592 570 3377 Shanghai Mentor Media Co., Ltd Floor 2, Unit 4 East Side, Land 71#, No. 211 Qinqiao Road, Pudong, Shanghai, 201206 Tel: +86-21 5834 1893/5834 2368/5834 1699 Mentor Shanghai Trading Co., Ltd Unit A-808C, No.188 Yesheng Road, China (Shanghai) Pilot Free Trade Zone (Yangshan), Shanghai, 201308 Tel: +86-21 6106 0899 Asiapack Ltd 2/F, Dorset House, Taikoo Place 979 King’s Road, Quarry Bay Hong Kong Web: asiapack.com E-mail: [email protected] Tel: +852 2735 1163 Asiapack (Shenzhen) Co., Ltd. 3rd floor, Nb.2 Jinsheng 4th Rd, Lanzhu Rd North side. Shenzhen Export Processing Zone, Pingshan, Shenzhen, 518118 Web: asiapack.com E-mail: [email protected] Tel: +86 755 8966 6950 CZECH REPUBLIC Mentor Media Czech s.r.o. Vlastimila Pecha 1302/2 Brno, 627 00 Tel: +420 515 577 401 INDIA Mentor Printing and Logistics Pvt. Ltd Registered Oce and Print & Packaging Operations – DTA Unit (Domestic Tari Area) B-50, SIPCOT Industrial Park, Irukkattukottai – 602 117, Sriperumbudur Taluk, Tamilnadu. Tel: +91 44 7110 3600 Fax: +91 44 7110 3902 SCM Operations – DTA Unit. (Domestic Tari Area) B-51, SIPCOT Industrial Park, Irukkattukottai – 602 117, Sriperumbudur Taluk, Tamilnadu. Tel: +91 44 7110 3600 Fax: +91 44 7110 3902 SCM Operations – SEZ Unit – (Special Economic Zone) Plot No. DV-2, SIPCOT HI-TECH SEZ, Sriperumbudur, Kancheepuram (Dist.) – 602 106, Tamilnadu. Tel: +91 44 6714 4218 Fax: +91 44 6714 4246 MEXICO Mentor Media Juárez S.A. de C.V. Libre Comercio No. 2164 Parque Industrial Américas Cd. Juárez, Chih. C.P. 32575 México Tel: +52 656 257 1603 SINGAPORE Mentor Media Ltd Fulfillment Plant 24 Penjuru Road, #09-02 Singapore 609128 KWE Jurong Hub 3A, 3B, 4A, 4B, 7 Bulim Street Singapore 648175 TAIWAN Mentor Media Taiwan Branch Rm. 2, 7F., No.146,Wenxing Rd., Guishan Township, Taoyuan County 33377 Tel: +886-3-3279389#401 Fax: +886-3279382 USA Mentor Media (USA) Supply Chain Management, Inc 865 South Washington Ave San Bernardino, CA, 92408 Tel: +1 909 930 0800 Fax: +1 909 930 0807 Elanders Sverige AB Web: www.elanders.se E-mail: [email protected] Tel: +46 31 750 00 00 MD: Mattias Olofsson Viared Box 22035 501 14 Borås, Sweden Vällingby Box 518 162 15 Vällingby, Sweden RENEWED TECH Azalea Global IT AB Web: www.azaleait.se E-mail: [email protected] Tel: +46 31 313 32 59 MD: Henrik Cohn Amalia Jönssons gata 27 421 31 Västra Frölunda, Sweden (New address from 2022-05-01: Första Långgatan 30, 413 27 Gothenburg, Sweden) ReuseIT Sweden AB Web: www.reuseit.se E-mail: [email protected] Tel: +46 470 70 35 00 Site Manager: Micael Åhman Renvägen 1 352 45 Växjö, Sweden PRINT & PACKAGING SOLUTIONS President: Sven Burkhard GERMANY d|o|m Deutsche Online Medien GmbH Anton-Schmidt-Straße 5, 71332 Waiblingen Web: www.deutsche-online-medien.de E-mail: [email protected] Tel: +49 71 51 165 17 0 Fax: +49 71 51 165 17 99 Elanders GmbH Anton-Schmidt-Straße 15, 71332 Waiblingen Web: www.elanders.com/ger E-mail: [email protected] Tel: +49 71 51 95 63 0 Fax: +49 71 51 95 63 109 fotokasten GmbH Anton-Schmidt-Straße 5, 71332 Waiblingen Web: www.fotokasten.de Tel: +49 71 51 165 17 0 Fax: +49 71 51 165 17 99 myphotobook GmbH Oranienstraße 183 10999 Berlin Web: www.myphotobook.de Tel: +49 180 5 846 846 Fax: +49 3052 0 047 441 Schmid Druck + Medien GmbH Gewerbepark 5 86687 Kaisheim Web: www.druckerei-schmid.de E-mail: [email protected] Tel: +49 90 99 96 95 0 Fax: +49 90 99 96 95 30 Schätzl Druck & Medien GmbH Am Stillflecken 4 86609 Donauwörth Web: www.schaetzl.com E-mail: [email protected] Tel: +49 90 67 06 34 0 Fax: +49 90 67 06 34 20 HUNGARY Elanders Hungary Kft Zalalövő Újmajor u. 2, 8999 Zalalövő Web: www.elanders.com/hun E-mail: [email protected] Tel: +36 92 57 25 00 Fax: +36 92 57 10 78 Jászberény 5100 Jászberény, Fémnyomó u. 1. Web: www.elanders.com/hun E-mail: [email protected] Tel: +36 92 57 25 00 Fax: +36 92 57 10 78 ITALY Elanders Italy S.r.l. Via Delle Industrie 8, 31050 Ponzano Veneto (TV) Web: www.elanders.com/ita Tel: +39 (0) 422 44 22 53 Fax: +39 (0) 422 44 22 53 POLAND Elanders Polska Sp. z o.o. Płońsk Ul. Mazowiecka 2, 09-100 Płońsk Web: www.elanders.com/pol, www.elanders.pl E-mail: [email protected] Tel: +48 23 662 23 16 Fax: +48 23 662 31 46 Wrocław Wrocławska str. 33D, 55-095 Długołęka Web: www.elanders.com/pol, www.elanders.pl E-mail: [email protected] Tel: +48 71 346 06 78 UNITED KINGDOM Elanders Ltd Merlin Way, New York Business Park, North Tyneside, NE27 0QG, England Web: www.elanders.co.uk E-mail: [email protected] Tel: +44 1912 80 04 00 Fax: +44 1912 80 04 01 Elanders McNaughtan’s Ltd (Elanders Packaging) Unit 4, 21 James Street Righead Industrial Estate Bellshill ML4 3LU, Scotland Web: www.elanders.co.uk E-mail: [email protected] Tel: +44 1236 733 833 Spreckley Limited 79 Arnold Road Nottingham NG6 0ED, United Kingdom Web: www.spreckleys.com E-mail: [email protected] Tel: +44 115 978 3786 Fax: +44 115 978 3784 USA ElandersUSA, LLC Acworth 4525 Acworth Industrial Drive Acworth, Georgia 30101 Web: www.elandersamericas.com Tel: +1 770 917 70 00 Fax: +1 770 917 70 20 Kennesaw Kennesaw 1925 Shiloh road 30144 Kennesaw, Georgia Web: www.elandersamericas.com Tel: +1 770 917 70 00 Fax: +1 770 917 70 20 Midland Information Resources Company 5440 Corporate Park Drive Davenport, IA 52807 Web: www.elandersamericas.com Tel: +1 563 359 3696 Fax: +1 563 823 7651 129 ANNUAL AND SUSTAINABILITY REPORT 2021 OTHER INFORMATION – CONTACT ELANDERS 130 ANNUAL AND SUSTAINABILITY REPORT 2021 Annual General Meeting 21 April 2022 Quarterly Report Q1, 2022 21 April 2022 Quarterly Report Q2, 2022 12 July 2022 Quarterly Report Q3, 2022 17 October 2022 Year-end Report 2022 23 January 2023 Calendar and ANNUAL GENERAL MEETING Shareholders in Elanders AB (publ) are welcomed to the company’s Annual General Meeting Thursday 21 April 2022. Elanders AB’s Annual General Meeting will be held on April 21, 2022, Södra Porten Konferenscenter, Flöjelbergsgatan 1C, Mölndal, Sweden. More information about the meeting and how the shareholders who wish to participate can register will be published in connection with the notice convening the meeting and will also be published on www.elanders.com. Calendar FSC © -labeled ANNUAL AND SUSTAINABILITY REPORT There have been tremendous developments concerning the environment in the past few years and ecolabeled printed matter has become standard. Elanders makes every effort to further this development. We do it for the environment, for our customers, for ourselves and for the future. This Annual Report is FSC ® labeled. For the Annual and Sustainability Report 2021, we have used the 100 percent recycled paper Circleoffset Premium White with a basis weight of 120 g/m 2 for the inlay, and 300 g/m 2 for the cover. The paper’s very high whiteness makes it suitable even for the most demanding printed matter. It has high environmental performance and is certified according to FSC Recycled, EU Ecolabel and Der Blau Engel. PRODUCTION FACTS Design: Narva. Production: Elanders AB in collaboration with Narva. Paper:CoverCircleoset PremiumWhiteg InlayCircleosetPremiumWhite g Print: Schmid Druck + Medien GmbH, Germany, a member of Elanders Group. PHOTO AzaleaITpage BergenLogisticspage Elanderspage LGIpages– MikaelGöthagepages– – ReuseITpage DISTRIBUTION POLICY Elanders’ Annual Report is distributed to those share holders who have actively ordered a printed version, certain customers and other interested parties. It is possible to download the Annual Report both in Swedish and English from Elanders’ web- site. Those interested can via the website read Elanders’ Annual Reports from the last ten years. TRANSLATION Elanders, Narva and Camille Forslund. This document is essentially a translation of the Swedish language version. In the event of any discrepancies between this translation and the original Swedish document, the latter shall be deemed correct.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.