Annual Report • Mar 31, 2023
Annual Report
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StrongPoint is a retail technology company that provides solutions and services to make shops smarter, shopping experiences better and online grocery shopping more efficient. For over 35 years we have been listening to grocery retailers, understanding their problems, and devising innovative technology solutions to help them become more productive, cut costs and create efficiency gains.
37 YEARS IN BUSINESS
80% REVENUE FROM GROCERY RETAILERS
8 COUNTRIES WITH FULL SALES, SERVICE AND SUPPORT
500+ NUMBER OF EMPLOYEES
12 CONSEQUTIVE YEARS OF DIVIDEND
GROWTH IN RETAIL TECHNOLOGY LAST 3 YEARS
COUNTRIES COVERED WITH PARTNERS
GRI REPORTING & MEMBER OF UN GLOBAL COMPACT
| 2022 | 2021 | 2020 | ||
|---|---|---|---|---|
| Operating revenue from continued operations | 1 372 | 981 | 942 | MNOK |
| Annual growth continued operations | 40 | 4 | 14 | % |
| EBITDA continued operations | 76 | 54 | 69 | MNOK |
| EBT continued operations | 38 | 26 | 37 | MNOK |
| Total assets | 986 | 847 | 786 | MNOK |
| Equity | 507 | 498 | 366 | MNOK |
| Equity ratio 1) | 51.5 | 58.9 | 46.6 | % |
| Current ratio 2) | 1.53 | 1.96 | 1.25 | |
| Earnings per share incl. discontinued operations 3) 4) | 0.66 | 4.32 | 2.21 | NOK |
| Number of shares (average for year) | 44 260 | 44 191 | 44 287 | T |
| Number of shares 31.12 | 44 888 | 44 376 | 44 376 | T |
| Share price (Oslo Børs) 31.12 | 22.00 | 25.80 | 19.40 | NOK |
| Number of employees 31.12 continued operations | 511 | 400 | 390 |
1) Equity ratio Equity 31 December x 100 Total assets 31 December
2) Current ratio Current assets 31 December Current liabilities 31 December 3) Earnings per share Annual profit after tax Average no. of shares 1 372 OPERATING REVENUE (MNOK)
76 EBITDA (MNOK)
4) Discontinued operations This includes divestment of Cash Security in 2020 and Labels in 2021.
that technology is the key to making shops smarter, shopping experiences better and online grocery shopping more efficient.
WE ARE a retail technology company and we believe that retail technology should be integrated into every shopping experience.
In-store and online.
give more time, lower prices, better service, fresher products, and ultimately, we all get a better and smarter life.
Values are what WE choose to value. It is the behaviours and skills that WE cherish. It forms the foundation of how WE want it to be when working for StrongPoint. At StrongPoint we have chosen 5 values that all demonstrates behaviours and skills that WE want all our colleagues to possess.
As experts, we always look to improve and innovate. We come up with new technological solutions that are tailor-made for our retail customers.
It is not about just winning the contract. It is the constant development of the relationship and never taking a good customer for granted.
Share your learnings, knowledge, wins and losses. Be the best you can be, and help others to achieve the same.
We don't waste time or resources, so every second counts in our pursuit of perfection.
We take care of each other, and in challenging times and crises we stand together.
6
Just as the grip of the COVID pandemic started easing up in early 2022, the terrifying Russian invasion of Ukraine tested global supply chains in new ways and brought general uncertainties to new heights. Interest rates worldwide have risen to levels not experienced in years and combined with soaring energy prices, disposable household income has come under significant pressure. In this context, it is reassuring to know that StrongPoint serves the resilient and stable grocery retail market. The ongoing need for grocery retailers to improve operations – whether in-store or within e-commerce – continues to drive business opportunities for StrongPoint.
At the start of 2020, we unveiled StrongPoint's 2025 Strategy. We set our financial ambitions at NOK 2.5 billion and an EBITDA margin of 13–15%. Achievement such ambitions is rarely a linear journey, and that has certainly not been the case for StrongPoint either. First hit by the pandemic, which resulted (in 2020 and 2021) in a larger-than-expected income from our e-commerce solutions. Next we faced the consequences of the Russian invasion of Ukraine. However, StrongPoint's business has continuously grown through these times. As for our 2025 financial ambitions, I would like to reiterate our confidence in achieving the stated overall financial ambitions of our strategic plan. Serving the grocery retail sector has never felt more meaningful, and I am certain that our products, solutions and services will be relevant for years to come.
In 2022 we expanded our geographical footprint, through the acquisition of Air Link Group, to the UK and Ireland. With Air Link Group, we have essentially established a platform for penetrating one of the largest and most sophisticated grocery retail markets in Europe. Further, in 2022 we announced our first two AutoStore contracts, both to be delivered in 2023. Also among our breaking news was the announcement that one of those contracts would feature the world's first AutoStore solution with three temperature zones: ambient, chilled and frozen.
With the expansion into the UK and Ireland, StrongPoint was also awarded distribution rights for AutoStore in that
market. Additionally, at the end of 2022 StrongPoint and Pricer announced further strengthening of our existing partnership, and we were awarded distribution rights for Pricer's solutions, including Electronic Shelf Labels, for the UK and Ireland, in addition to expanding the existing distribution rights in Spain.
StrongPoint's traditional core markets of Norway, Sweden and the Baltics have all delivered well. The case for classic StrongPoint solutions, as well as new and innovative ones, is stronger than ever. As such, it is important for me to recognize the importance and contributions from these markets as we grow our geographic footprint and solutions portfolio.
Last year, we announced a number of changes in our Spanish business unit. This was necessary and paved the way for restructuring our business on the Iberian Peninsula. I am pleased to say that Spanish operations steadily and slowly improved throughout 2022 and achieved a positive EBITDA contribution in the fourth quarter, after years of negative financial contributions.
We continue to invest and focus on developing our existing workforce as well as attracting ever more top executives and talent. We depend on a knowledgeable, skilled and motivated workforce, and hence human resource development is high on the agenda. I am immensely proud of the people at StrongPoint and the ever-growing talent across our entire organization.
In 2022, StrongPoint achieved a strong 40% topline growth, and with a full pro-forma year of Air Link Group included, our revenue for 2022 is in excess of NOK 1.5 billion. Organically, we grew a healthy 15%, despite continued supply chain disturbances and component shortages. As for profitability, our EBITDA was NOK 76 million, or 5.5%. This profitability level is a combination of a strong in-store solution bottom line at 10–11% EBITDA, as well as deliberate investments in e-commerce. As the year progressed, with increased pressure on disposable household income and a cool-down of grocery retailers' e-commerce business, we reduced out investments to reflect our customers' demand patterns. Long-term, however, we are confident about the growth of e-groceries and are certain that our investments will pay off.
In this context, it is worth mentioning that we expense all our investments in product development, marketing and sales, leaving behind a safe and strong balance sheet with essentially no debt. In a year characterized by high levels of general uncertainty I am pleased to see that our grocery-focused strategy is paying off. People will always need food and beverages, and grocery retailers need solutions that provide their customers with ever-more efficient and seamless experiences. We have all the reasons to be optimistic about achieving our strategic objectives.
Stay safe and strong!
Jacob Tveraabak CEO
We depend on a knowledgeable, skilled and motivated workforce, and hence human resource development is high on the agenda. I am immensely proud of the people at StrongPoint and the ever-growing talent across our entire organization.
When I first learned to know the company back in the 1990s, it was a reputable supplier of retail equipment, mainly to grocery stores in Norway and Sweden. Today, we serve top-tier accounts in select international markets, with a key focus on high-tech in-store and online solutions for retailers.
A few years back, when we carved out the new strategy and related financial ambitions for StrongPoint – a NOK 2.5 billion retail technology company – we saw the need to focus, and then to refocus, the company. In practical terms, this meant to decide on both our product portfolio and priority markets. As a result, we spun off two rather significant business units, Cash Security and Labels, in two well-managed and successful transactions. These divestments were crucial in making StrongPoint a razor-sharpfocused retail tech company going forward. Indeed, doing more of something, and better, also requires that you do less.
When a company goes through such a transition, it's critical to assess both the capacity and competencies required to execute a revised strategy. Too many companies fail at this. They launch a new path without considering the workforce's capability for success. Other companies go too far in the other direction by initiating a complete shakeup of the organization, which often leads to a negative impact on business performance.
At StrongPoint, we have balanced this well, due to good leadership, impressive openness, and high motivation across the organization. Veteran staff members have played key roles in executing the new strategy, and new team members have been onboarded well. This demonstrates the true strength of an organization – willingness to adapt, genuine interest in the company vision, and the ambition to play an active role in building an even bigger and better company. In an increasingly unpredictable world, we must continue to foster a culture with strong values, especially ones that can adapt to changes and challenges. That's exactly what we do at StrongPoint. This is one of the key reasons why the Board, myself included, remain optimistic about our ability to continue building StrongPoint into a leading international retail technology company!
Morthen Johannessen Chairman
We now look back on twenty years as a listed company. A lot has happened in those two decades, both within our walls and in the markets where we operate. We have a lot to be proud of, especially the people who have helped us grow. That includes those who came aboard early on, those who joined more recently, and our former colleagues who moved on to new challenges. We have evolved from a local firm specializing in a few home markets into a formidable international company.
StrongPoint's financial ambitions
NOK 2.5 bn in 2025 EBITDA 13-15%
Go wide with world-class solutions to selected markets
Go deep in core markets with solutions that cover in-store, e-commerce solutions and AutoStore grocery micro-fulfilment
LABOUR COSTS GOING UP
DISCOUNTERS BECOMING MAINSTREAM
INCREASING CUSTOMER DEMANDS
Need solutions to be less labour dependent, often involving automation
All players in the market keep costs down in general
Constant need for easier and faster customer experience, in-store and online
1) instore and 2) online challenges
The pressure on brick-and-mortar retailers' margins means that grocery retailers need to find ways to increase in-store productivity to boost profitability.
Market share and reduce costs means they need highly efficient order fulfilment solutions and provide multiple last-mile delivery and pick-up options. These two key industry trends are increasingly relevant for grocery retailers in today's turmoiled macro environment.
StrongPoint mainly serves the grocery retail market. Grocery retail, unlike retail market in general, is non-cyclical and highly resilient. In times of market turmoil and economic uncertainty, consumers will always shop for groceries. Beyond grocery retail StrongPoint has opportunities to sell its solutions to other market segments, especially pharmacies, DIY stores and fashion retailers.
Self-Checkout*
Cash Management (CashGuard)*
Humanoid Grocery Robot
ShopFlow Logistics*
In-store
Manual Picking*
Dark Store Manual Picking*
Automated Robotic Picking
In-store Product Collection (Vensafe)*
Scales
Home Delivery
Grocery Lockers*
Instore Pickup*
Drive-thru
A
The acquisition of ALS, now ALS StrongPoint was part of the 2025 strategy in terms of expanding our core markets.The combined UK & Ireland grocery retail market is more than 10x bigger than the entire Norwegian grocery retail market. The UK is also the most mature grocery e-commerce market in Europe, with over 10% total market share.
StrongPoint in the Baltics announced a new order of self-checkout to IKI, a leading retail chain.
StrongPoint received an order for 10 temperature-controlled grocery lockers from the Italian grocery retailer Coop Alleanza. This is the first purchase of grocery lockers from Coop Alleanza and was sold via our Italian partner.
StrongPoint entered into an agreement with ColliCare Logistics to deliver an AutoStore solution to automate their warehouse in Vestby outside Oslo. The project will be managed by StrongPoint with support from its strategic partner Hörmann Logistik.
Austria and SPAR International for grocery e-commerce technologies and in-store cash management solutions. In Q2 InterSpar Austria scaled their Click & Collect operation by 10 new grocery lockers included one mobile locker.
We are extremely proud to announce the agreement with ColliCare after an extensive tender process. That StrongPoint has been chosen to develop and install this AustoStore solution is a testament to our reputation for high quality and outstanding customer service.
Jacob Tveraabak, CEO StrongPoint
As part of our 2025 strategy, acquisition was outlined as a core step in achieving our financial ambitions. With the purchase of ALS we are achieving instant and significant presence in the countries at the top of our list for geographical expansion. ALS has built an impressive reputation in the market and will enable us to build on their relations with grocery retailers in the UK and Ireland with our word-class grocery technology solutions.
Jacob Tveraabak, CEO StrongPoint
ALS StrongPoint announced two major contracts in the quarter. One contract was with a leading grocery retailer in the UK, for a checkout conversion solution. The 'swivel' allows a staffed checkout to also be used as a self-service checkout.
The second contract was with another leading UK-based grocery retailer for a self-service checkout upgrade project. The contract was an extension of an ongoing project.
StrongPoint Baltics received an order for installation of software and hardware for point-of-sale and ERP solutions for a Do-It-Yourself chain.
StrongPoint finalized its acquisition of Air Link Group Limited (ALS) on 1 June. ALS has close relationships with many retailers and individual store managers through their work in service and installation. The company had planned to start to up-sell technologies and solutions and can now turbo-charge its sales efforts by providing a complete one-stop-shop for technologies, solutions, installation, service and support in the UK and Ireland.
StrongPoint signed the first ever contract for an AutoStore installation containing all three temperature zones: chilled, frozen and ambient. The installation will be set up in Norway in Q1 2023, strongly supported by the AutoStore organization.
We are proud to have the honour of installing a world first for AutoStore and look forward to leveraging our 35+ years' experience in food management and grocery retail to create the world's first and best fully automated solution purpose built for groceries.
Jacob Tveraabak, CEO StrongPoint
AutoStore provides the world's leading automation solution for grocery retailers looking to scale their e-commerce offer. The innovative cubic design allows customers to either store four times the inventory in the same space, or all of their existing inventory in one quarter of the space. Combined with software and StrongPoint's grocery management expertise, it can boost efficiency to world-leading levels for maximum speed and return-on-investment.
Grocery retailers face unique profitability challenges while fulfilling e-commerce orders due to the complexity and variety of orders, labourintensive nature of the industry and fast changing consumer habits. Automation is high on the agenda for grocery retailers
looking to maximise the efficiency of their online offer and to add additional capacity to existing in-store or dark store manual order picking.
AutoStore, the robot technology company that invented Cube Storage Automation, has recently developed a unique solution to automate the storage and retrieval of frozen items.
StrongPoint provides an end-to-end e-ecommerce solution purpose built for grocery retailers wherever they are on their online journey. Automation with AutoStore is integrated into StrongPoint's world-class order picking and multiple last mile options, allowing grocery retailers a one-stop-shop for their entire grocery e-commerce automation needs.
Following the acquisition of Air Link Group in UK and Ireland, StrongPoint became an AutoStore partner also for these countries. The UK has the most mature e-commerce market for grocery, and AutoStore Micro Fulfilment Centers can be a natural add-on to retailers existing infrastructure.
While grocery e-commerce has not dramatically changed in the last two decades, automated microfulfilment centres built into existing stores or standalone offers a game changing opportunity to increase productivity and reduce costs and the UK is at the forefront of embracing the concept. AutoStore's market leading automated storage and retrieval system for ambient, chilled and frozen requires an incredibly small footprint due to its ability to quadruple a retailer's storage space. When combined with StrongPoint's grocery solutions and expertise this new offering provides an incredible opportunity for grocery retailers in the UK and Ireland.
Chris Mackie, SVP for E-Commerce StrongPoint
StrongPoint has more than 20 years of experience of selling and servicing Pricer ESL in the Scandinavian and Baltic markets. During the fourth quarter, the partnership with Pricer was further strengthened, and the distribution rights was expanded to Spain, UK and Ireland.
StrongPoint's outstanding reputation in the existing markets where they already work with leading grocery retailers in Sweden, Norway and the Baltics made them the obvious choice to expand our sales opportunity in Europe. We look forward to continuing and deepening our relationship with StrongPoint.
Magnus Larsson, CEO Pricer
Maxbo, a leading Norwegian DIY chain, signed a frame agreement of Pricer ESL installations.
Bullion IT ordered another 250 CashGuard systems.
Our partner Peak Technologies Inc sold 20 temperature controlled Click & Collect lockers as a pilot to a large grocery chain in the US.
Magnus Larson, CEO Pricer and Jacob Tveraabak, CEO StrongPoint.
The biggest thing was that StrongPoint expanded to the UK and Ireland through the acquisition of Air Link Group. The UK market alone is around ten times bigger than the entire Norwegian grocery market, so it goes without saying that the presence we've established there offers us vast potential. The UK, unlike Scandinavia, has historically had access to plentiful and highly flexible labour. This is now changing rapidly, however, with multiple wage hikes in the sector seen in 2022. The UK has the highest e-grocery penetration, but profitability has always been a challenge. Their efficiency rates are far lower than in Norway and Sweden.
Thus, we are confident the UK market is ripe for efficiencysaving solutions, such as the Pricer Electronic Shelf Label (ESL) technology and the Vensafe lockers, which are in high demand from retailers due to increased loss from thefts (likely a sign of the tightening budgets and the knock-on effect of inflation).
Post-pandemic inflation spikes triggered a shift in consumer habits. If households face increasingly less disposable income, consumers will eat out less often and look for savings in groceries. White-labelled product sales will rise, and shoppers will shift towards discount stores. But even in periods of market turmoil, the grocery market continues to be resilient. Grocery retailers will have to continue improving, and technology solutions will be a vital part of this improvement.
The UK is a highly sophisticated grocery market and home to some of the largest and most admired grocery chains. On the one hand, we consider the UK market to be ripe for a number of the solutions we have rolled out in Scandinavia, e.g., Pricer ESL and Vensafe. On the other hand, we believe that our highly efficient solutions represent a great opportunity for grocery retailers to increase efficiency with StrongPoint e-commerce solutions, such as Order Picking technology, temperature-controlled Click & Collect lockers, and automated microfulfilment solutions with AutoStore.
We aim to create the same concept in the UK and Ireland as we have in other core markets: a mix of proprietary and third-party solutions that acts as trusted partners to grocery retailers, covering not just the sale but the implementation, installation, and service. This way we create a
platform for long-term value creation (i.e., the StrongPoint USP). We'll be disappointed if we fail to get at least one big customer win in the UK for our solutions in 2023.
Spain, on the other hand, has a long way to go to catch up to the levels of efficiency seen in the UK, let alone in Norway and Sweden. This means excellent long-term opportunities for StrongPoint. In the Spanish market, we expect to build momentum for our self-checkout solution, ESLs, temperature-controlled Click & Collect lockers, Order Picking solution, and especially Cash Management. Today in Spain, approximately 66% of transactions are cash-based. Norway was at that level over 20 years ago. Cash management solutions offer retailers greater efficiency, safety, and customer satisfaction.
More concretely, in 2022 we invested significantly in a new cash management solution with a major grocery chain in Iberia. The revolutionary enclosed cash management solution will create significant value for grocery retailers and will yet again be a source of great value to StrongPoint.
Pressures on our core customer base continue. Inflation, wages, and labour shortages are impacting our more mature markets, as well as the less mature ones. Technology will always be part of the solution to drive down costs whilst creating better customer experiences – a win-win for retailers.
The next generation of stores – ones that leverage self-checkout and a more affordable and more autonomous customer experience – is increasingly of interest to our customers. This is not just about creating a digital experience but allowing retailers to substantially cut down on their biggest cost – labour. However, fully autonomous stores, have yet to prove themselves, as the consumer's expectations of convenience are continuously being tested. Rather, in e-commerce, the trend for partial automation will continue, even if we see a short-term dip or reduced growth rates. In the long-term, people will increasingly buy their groceries online. Fortunately, StrongPoint provides the world's best efficiency savings through our e-commerce suite, from automation to manual order picking to multiple last-mile solutions.
Jacob Tveraabak CEO
StrongPoint is a grocery-focused company that serves retailers with products and solutions for in-store and online shopping. The group is divided into six product segements.
Electronic Shelf Labels, Scales and wrapping systems, ShopFlow Logistics and Humanoid Grocery Robot.
In-store and Dark Store Order Picking, Home Delivery, Grocery Lockers, In-Store Pickup, Drive-Thru and AutoStore microfulfilment solutions.
Order and in-store picking, Home Delivery, Grocery Lockers and Drive-Thru and AutoStore microfulfilment solutions.
StrongPoint implement, personalise and maintain an enterprise resource management solution that includes trading processes from customer service units to the central office.
The services are related to changes in the physical store, especially inside but also the external environment around the stores.
CashGuard is the fastest and most reliable cash management system on the market.
Pricer's Electronic Shelf Labels (ESL) ensure the same price is always displayed on the shelf and at checkout. ESLs enable the retailer to save time and improves customer experience through accurate and reliable pricing. Pricer ESL shelf-edge communication platform offers much more than price automation, and includes powerful tools for geolocation positioning, in-store navigation and flash for promotions and tasks.
StrongPoint and 1X Technologies (Halodi Robotics) are working together to commercialize a humanoid grocery retail robot with the primary function of reshelving in-store, an operation which currently requires approximate 30% of all labor hours in a grocery store. By allowing the reshelving robot to perform repetitive tasks, more time can be spent by staff to help customers and improve the value proposition of the store.
Our scales and wrapping systems help the cutomers with safe labelling, correct weighing and quick and easy packaging of goods in your store, regardless of whether it is cheese, fruit, vegetables, delicacies, fish or sweets that are to be weighed. StrongPoint is a proud partner and reseller of DIGI Teraoka in Norway, Sweden and the Baltics.
ShopFlow Logistics is a cloud based mobile logistics system for handling routines such as receiving goods, inventory, balance adjustment, ordering labels printing and waste management – on both Android and iOS operating systems.
StrongPoint ASA | Annual Report 2022 22
In-store productivity solutions and shopfloor solutions are primarily provided as a cloud service, which entails mulitple advantages such as faster rollout, no need of local hardware and central operations that provide full control of upgrades and security.
Electronic Shelf Labels (ESLs) from our partner Pricer are used by most grocery retailers in Norway and Sweden, and we see a growing market also in the Baltics, Spain, UK and Ireland. Grocery retailers have achieved cost-savings and improved customer experience by benefiting from more accurate and reliable pricing, and we see spillover effect to other retailers. Do-it-yourself (DIY), Pharmacy and Convenience stores are now starting to use Pricer ESL for price automation.
Scales & Wrapping systems from DIGI are increasing due to higher demand for self-service, grab-and-go, prepared meals in-store and zero waste solutions supporting "Bring Your Own Container".
Grocery retailers who have extensive experience with ESLs are now looking to gain further operational efficiency by using more of Pricer for dynamic product positioning and the flash functionality for product promotions, shelf replenishment and online order fulfillment.
The Pricer platform can also be used for interactive in-store communication to enhance the customer experience displaying dynamic and creative content on larger screens, to reduce food waste, as markdown products can easily be found by combining expiration date with dynamic pricing, product positioning and instant flash. Digitalisation, automation and self-service are not new, but the solutions have matured in recent years. Several retail chains have gotten over the pilot phase and rolled out the solution, supported by technology from companies such as Google and Microsoft. These solutions could also leverage AI-technology and machine learning to optimize inventory, reduce waste, increase customer satisfaction and create 'autonomous' stores. StrongPoint strongly believes in the latter, where cameras are used combined with self-learning software for AI-based image recognition. There will be more solutions within automation and cost-saving technology including shelf gap detection, customer traffic analysis, indoor positioning, wayfinding, loss prevention and not least 'autonomous' self-service stores open 24/7.
Gisle Elvebakken SVP Norway
StrongPoint's CashGuard is the fastest and most reliable cash management system on the market. It both secures cash and automates cash handling at
checkout, so retailers can stay in control and eliminate shrink age. Lower-priced solutions including Compact and Unico are also available. The user-friendly back office software helps keep track of all cash movements within the store.
StrongPoint has completed the first development phase of a new, large-scale cash management solution for a major Iberian grocery retailer. A Joint Venture has been established regulating the partnership with a technology company in Spain. The expectation is that a first pilot will be installed in a grocery store in the second half of 2023.
Cash still accounts for a significant proportion of consumer payments. Automating the cash process has therefore continued to be important for grocery retailers. In addition a growing number of customers in the retail, HoReCa, and petrol sectors continues introduction of our market leading CashGuard cash management solutions. Our CashGuard solution helps retailers to improve operational efficiency, reduce costs, enhance security and accountability, making them an essential tool for modern retail businesses.
We are excited that after the successful introduction of our latest generation CashGuard Core system in Sweden and Spain, installations can be seen in supermarkets, restaurants and tobacco shops across both countries. We plan to roll these out to other countries in Europe. We have also been working intensively with one of the major grocery chains in Iberia to develop a ground-breaking cash management solution, which will also be available for other customers at large and reflects a vast value creation potential. Our cloud-based software allows retailers to access real-time information on their cash levels and manage cash operations across their entire network of stores. We are continuously enhancing our latest generation platform with more features and the support of additional CashGuard system types.
Lorena Gómez SVP Spain
StrongPoint's Self-Checkout solutions improves the customer experience and helps to reduce costs. StrongPoint offers hardware and software solutions, which can be used independently or together. StrongPoint also uses advanced AI solutions for fraud prevention, item recognition and age verification for restricted items.
StrongPoint's Vensafe automates in-store sales of restricted and theft-prone products, such as tobacco, pharmaceuticals, and other high-value items. It allows stores to sell these products safely and responsibility in both traditional checkouts and in unmanned environments, like self-checkout lanes or checkout-free stores. Vensafe increases store productivity, enhances the customer experience, and eliminates shrinkage.
As the COVID-19 pandemic winds down, an increasing number of customers are returning to physical stores. After relying on online shopping for nearly two years, their expectations of physical shopping have evolved. Today's customers expect even faster and smoother solutions throughout their shopping journey, and the checkout process remains one of the most significat elements of the customer journey. The trend of unmanned checkout is gaining traction, as customers are becoming increasingly at ease with self-service options like self-checkouts, mobile and hand-held scanning, and the latest addition, completely autonomous stores. To maintain a competitive edge and meet increasing demand, StrongPoint has made ongoing investments in leveraging the latest technological advancements. We have also been experimenting with various proof of concepts, such as the installation of additional stores featuring AI-powered age estimation solutions on our self-checkouts, as well as the introduction of Vensafe for selling restricted-access items in autonomous store environments. We also have recognized a surge in demand for our checkout efficiency solution in new retail verticals outside the grocery sector and have adoptded both Vensafe and Self-checkout solution to meet the specific needs of this sector.
Inflation is a growing concern as it leads to an increase in prices and subsequently, the cost of living. This has left consumers feeling uncertain about the future and compelled to brace themselves for unforeseen expenses. Meanwhile, retailers are facing increased
costs for raw materials, rent, utilities, and other operational expenses. Given that the checkout process is one of the most labor-intensive and costly aspects of a store, our checkout efficiency solutions are well-suited to help retailers in solving these challenges. Our ongoing efforts to improve our solutions ensure that retailers can increase operational efficiency, reduce overhead costs, and improve their bottom line. The current economic situation also leads to an increase in theft and in-store shrinkage, which can have a significant impact on a retailer's profitability. To address this challenge, we have been working on the new AI-powered fraud prevention solutions specifically designed for self-checkouts. Additionally, we are promoting the wider adoption of our Vensafe in-store dispensers to enhance loss prevention efforts.
Julius Stulpinas SVP Technology and Supply Chain
As a partner of AutoStore, StrongPoint offers micro-fulfilment solutions for grocery retailers. Combining micro-fulfillment with StrongPoint's best in-class Order Picking solution, all online grocery orders can be processed at world-class levels of efficiency.
StrongPoint Order Picking allows retailers to pick more items in less time, cutting costs, boosting profitability for grocery e-commerce. The solution can be used in stores and dark stores and allows for hands-free picking of multiple orders.
StrongPoint's In-Store Pickup solution allows any store anywhere to automate its instore pickup operations for fast, seamless, and efficient service and maximum customer experience. The system includes two-way customer communication allowing the customer to alert the grocery retailer when they are about to come to pick up their order.
StrongPoint's Drive-Thru solution allows grocery retailers to provide a completely contactless and automated solution for customers to pickup their groceries at their store. The system uses AI image recognition, so the store is automatically alerted the moment the customer enters the pickup zone.
StrongPoint's Click & Collect Lockers offer a more convenient way for customers to pick up online orders. They cut the cost of last mile deliveries by automating the delivery process and turning stores into distribution points. Click & Collect Lockers can be mobile or stationary and can be set to three temperature zones: ambient, chilled and frozen.
StrongPoint's Home Delivery solution optimizes the home delivery of groceries to the customer. The solution offers support to the grocery retailer in handling multiple delivery slots, vehicles and pickup points and optimizes the driver routes. The system includes two-way communication allowing the customer to communicate to the driver any change of details regarding how or where to deliver the order and support with retaining the cold chain
The persistence of ecommerce growth during 2021 was evidence of a real behavioral shift to shopping online. In 2022 as most markets emerged from the pandemic there was a decline in order volumes however volumes were still higher than pre-pandemic levels and there has been a definite sustained behavioral shift. Coupled with the war in Ukraine and rising inflation many retailers initially focused on keeping prices low and more traditional store retailing. However in the 2nd half of 2022 retailers took stock of their e-commerce operations. A minority with less mature operations exited the market however most took the opportunity to investigate ways to future proof operations and to improve productivity and profitability. Additionally, retailers who stood back and missed the e-commerce growth of the pandemic and the sustained business that remains are now making the first bold steps to go online especially in the DACH region where we ran a number of successful pilots.
We focused on both a direct sales and a partner strategy during 2022, investing in resource for new markets like the UK where we have engaged with several tier-1 grocers and in support and enablement of existing and new partners to expand the solutions they are capable of selling from lockers to the majority of our e-commerce solution set.
Our solution footprint is unrivalled and uniquely positions us to help retailers at every stage of their evolution. We have a solution suite that can add significant value to even mature markets like the UK and can set a customer on the path to profitability in less mature regions such as DACH. We also see a growth opportunity in the US and Italian markets for lockers following successful sales via partners. In 2023 we look to grow our partner base across more European countries for lockers and will continue to focus on the UK as a priority market especially for Instore picking and AutoStore.
We plan to build upon our micro-fulfillment offering following successful sales in Norway, through the addition of experienced resources and partnerships with automation and software vendors to enable us to offer a more complete solution.
Chris Mackie SVP E-commerce
The acquisition of Air Link Group Ltd in UK and Ireland gave StrongPoint access to competence in shop fitting. ALS StrongPoint focuses on securing quality service to especially the grocery retail market. The services are related to changes in the physical store, especially inside but also the external environment around the stores. The services are often connected to the check-out area or installation of technological solutions, contributing to finding sustainable alternatives for the customer.
ALS StrongPoint are helping customers to design store concepts for operational efficiency, increased sales & conversions and consumer experiences.
The way ALS StrongPoint deploys has proven to be a great success and is also an environmentally friendly and safe way to deliver any project.
The success for the company is delivering a solution that improves the work and lives of clients and their customers.
The core ethos is not just to meet client expectations but to exceed them making ALS StrongPoint the partner clients want to work with.
Being present in a competitive sector, the skill of Retail Shopfitting is something that needs to have a clear plan and strategy to remain successful and ahead of the competition. The market can seem saturated by low cost shopfitting entities, but with the current focus from retailers on quality (and with a clear objective to minimise disruption to their stores) a brands reputation is something that drives further opportunities. We believe that not only the standards around delivery, but the aftercare support and the client relationship is something that creates reoccurring opportunities in this field. Having a 'can do' approach to supporting the client store changes is key to success. Showing
how processes can be streamlined, rather than a predictable delivery model, is something that sets us ahead of our competition. This is the added value piece that our retail clients benefit from with their store development projects.
With the current uncertainty in the world, retailers are faced with different challenges than ever before. These challenges are not only operationally with their customers shopping experience, but also from a commercial aspect by remaining competitive with innovation against other brands. There now is more of a focus of the retailers in their own management of their internal costs, but
also those from their supply chains. By having product innovation, coupled with a track record of consistent shopfitting delivery, gives us a competitive advantage. No longer does the retailer need to engage with multiple suppliers to carry out their deployment projects, they can use one turnkey provider offering a complete package. Not only does this reduce the overall costs to the retailer, but it consolidates the stakeholder involvement to ensure a smooth communication from project initiation through to completion.
Steve Smith SVP UK & Ireland
StrongPoint implements, personalises and maintains an enterprise resource management solution that includes the company's trading processes from customer service units to the central office. StrongPoint also helps retailers to automate checkout processes and deliver speedy customer service with POS terminal, fiscal printer and other related technologies.
Our solution is based on Microsoft Dynamics 365 Business Central with Retail Module LS Central. Installing this solution will increase employee productivity, internal process efficiency, decision-making speed and reduce operational costs.
StrongPoint was the first in the Baltic States to introduce Microsoft Dynamics NAV solution to retailers. StrongPoint implements, modifies and advises on all issues related to enterprise resource management systems since 2000.
Long-term experience and accumulated expertise enable us to select and model enterprise resource management systems that best meet the needs of the retailer for maximum operational efficiency and performance.
In 2005 StrongPoint became a golden Microsoft partner and in 2015 StrongPoint was named a Diamond LS Retail partner. StrongPoint has implemented enterprise resources management systems in more than 100 companies in the Baltic.
MNOK
Whatever the point of sale (POS) solution may look as a very clear and simple solution, it plays a critical role in each and every store.
Today, POS solutions have been in place for more than 10 years for the physical POS. However, during the past few years, retail technologies expanded with a huge variety of different channels to sell the goods to the buyers. For example self-checkout, self-scanning, e-commerce, mobile scanning, mobile POS, electronical shelf labels, and many others. Also, almost every retailer has a loyalty program, various of payment types (gift cards, vouchers, coupons etc) and of course – ERP. And what is interesting is that all of these must be connected in some way or another to the POS. That is why it is so critical and difficult to replace, with heavy integrations and requiring powerful hardware to run. Retailers start to face big challenges going forward with new technologies and new integration because of technical limitations, costly environment and expensive resources. This means that the POS ecosystem is going to be transformed.
The next POS solution trends are making retailers think about new POS solutions on offer. It will move from single to multiple POS. This is a future retail sales/ transactions platform, which must connect each and every different sales channel into one common business logic. Of course, the platform must be cloud-ready and at the same time solve the offline challenges. Why is this transformation so important? Firstly, the platform can be fully modular – meaning, retailers have an easy way to connect/ disconnect different types of components, like payments, loyalty, different applications using microservices. Secondly, no dependence on specific hardware, means any device, any platform, anywhere no matter where the sales transaction is done, it will always end in one place for the retailer. Thirdly, the latest technological architecture allows the retailer to play with different parts of the retail transaction platform. This transformation will bring retailers to the next level by improving the shopping journey within different channels, better knowledge of their customers and offering substantial flexibility in their own environment.
Rimantas Mažulis SVP Baltics
StrongPoint headquarters Office: Rælingen +47 934 03 254 [email protected]
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The emerging trends we are seeing in Norway are: further development of selfservice, grocery e-commerce gradually gaining more market share and more technology to improve operational efficiencies.
Self-service checkouts (SCO) have until now primarily been present in larger grocery stores, but will increasingly be used in smaller stores, convenience, discount and specialized trade stores. Small autonomous self-service open 24/7 stores will be emerging, and often placed at high-frequency locations or in rural areas. The increase in self-service also drives the demand for other solutions including electronic shelf labels, in-store scales and Vensafe.
The disruption caused by the pandemic created a surge in online grocery shopping. Even though shoppers have returned to normal life and increase in-store purchases, we believe grocery e-commerce will gradually gain more market share. Established brickand-mortar grocery retailers have been hesitant to fully embrace e-groceries and will have to step up not to lose further market share to grocery e-commerce pure-players and meal kit companies. Achieving profitability has been a challenge due to the costs of handling online fulfillment and last mile delivery or pickup, however StrongPoint offers market leading solutions for order picking and last mile solutions that can ensure maximum levels of efficiency.
Challenges with supply chains, labor costs and rising prices has resulted in inflation. Food retailers are, in order to protect their bottom line, forced to pass the growing prices over to the consumers. StrongPoint sees a growing interest in technology that can mitigate the effects of inflation by increasing productivity, automation and improving
operational efficiency. Examples are solutions to optimize supply chain inventory, reduce food waste and loss prevention.
We expect the in-store shopping and checkout process to change substantially in the years to come. Shop & Go is a selfservice concept that allows customers to scan and pay using their smartphone, or even having cameras detecting automatically what you put in your bag. We see that there is a growing market for more self-service, unmanned and 24/7 grocery stores also in Norway.
There will be more solutions within automation and cost-saving technologies. Solutions where cameras are used together with self-learning software for AI-based image recognition to increase customer satisfaction, loss prevention, waste reduction and not least to make the checkout process frictionless, faster and more secure. And of course the growing interest in 'autonomous' self-service 24/7 open stores.
28% RELATIVE SHARE
Gisle Elvebakken SVP Norway
2022 have been a challenging year for the retail sector. Record high inflation and a general decline in sales volumes have affected both physical retail as well as online sales. However, we must bear in mind that e-commerce has grown explosively during the pandemic, a decline was thus expected, but the situation is still tough.
Operational efficiency and cost cutting As margins shrink and volume decrease, retailers are streamlining their operations and focus on their core businesses. Technologies that reduce labor cost and still deliver customer value are in high demand. Electronic Shelf Edge labels is an excellent example where demand has soared during 2022. Retailers see the opportunity to reduce labor costs, reduce wastage, preserve margins at the same as they can offer their customers in-store navigation and accurate price information.
2022 was the first year since 2006 where online growth flatlined. Still, most Swedish retailers are convinced that their online business will be key contributor to growth coming years. We see a continued demand for our Order Picking and Last Mile solutions that allow retailer to pick and deliver online orders at world class efficiency levels. We also see an increased interest in our automation technologies from AutoStore. Especially when it comes to implementing Micro Fulfilment Centers (MFC's) where retailers can use existing stores as highly efficient fulfilment centers for their online operation.
In the wake of the pandemic and very turbulent 2022 we see an increase in demand for our cash management solutions in the market. There are also initiatives from Riksbanken to secure a satisfactory access to cash throughout Sweden. We believe that these initiatives will further increase demand for our cash management solutions.
Magnus Rosén SVP Sweden
In the beginning of 2022, the global pandemic was quickly forgotten after the changes in the geopolitical environment due to the Russian invasion of Ukraine. The Baltics, being extremely near to Russia, faced high levels of uncertainty of how the situation would evolve. Most of the businesses including retailers re-positioned their businesses and terminated relations with Russia and Belarus, which has a big impact to their sales and revenues. However, most of the retailers remained stable and continued to invest in technologies. This was due to inflation and labor cost increases which were almost the highest in all of Europe. Unfortunately – the trend with technologies were not as we expected. Grocery e-commerce has stablised with flat demand for our grocery lockers as a last mile solutions. Home delivery has remained the main option for our customers. However, interest for tobacco solutions using Vensafe increased susbtantially after installation of pilots. Electronical Shelf Labels was also one of the main topics on the efficiency agenda. In addition the number of POS/ERP and Self-checkout implementations increased as usual. Overall, 2022 brought new opportunities, retailers still willing to invest, and buyers came back to physical grocery stores.
Firstly, unmanned stores. This is a highly interesting topic for many retailers. At StrongPoint, we are taking the role of integrator and main concept consulting.
This means, we are at the beginning of this journey with retailers. Today we have 2 running unmanned stores in Lithuania and have at least 3 other different opportunities which we are working on. The concepts are different in terms of technological environment, business models or type of the store. But one thing relates to all of them: they are in demand of some kind of
autonomous store.
Secondly, and more futuristic in term of time period, current standard POS solution have transformed into depended retail sales/ transaction platform. The trend has been driven by many challenges retailers are facing including when there are so many different sales channels, like self-checkout, self-scanning, mobile POS, e-commerce with its own logic which needs to be integrated and managed separately. In the Baltics, where we have strong presence as a POS solution provider, we are following those trends to be ready for this transformation for our retailers.
RELATIVE SHARE
Rimantas Mažulis SVP Baltics
We live in a time in which the current economic instability adds to the traditional challenges of the grocery retail sector. More than ever, it is essential to optimise operating costs through process improvements, since the impact of wage increases, constant price changes due to inflation, and energy costs have clearly destabilised profitability as never before.
In general, we see a change in how the departments in charge of process improvement are becoming more important in organisations, as well as solutions that, until now, were seen as futuristic are starting to become a reality, with the return on investment much more compelling than in the past.
Solutions that improve in-store payment processes, such as automated cash management or self-checkout systems, are becoming more and more mature in Spain and will clearly continue to be a trend in the coming years.
On the other hand, recent legislation regarding the requirement for less and less packaged goods and more bulk to improve sustainability imply changes in the way variable weight items are processed and represent a great opportunity to introduce the latest technology in weighing systems.
Finally, the e-commerce sector for food continues to grow. Retailers are aware of the urgent need to be efficient in this new business, and our Click & Collect and In-store Picking solutions are well understood as the solutions to fulfil this need. Not only in the food sector but also in the pharmaceutical sector is there a great potential to improve last mile.
I believe that artificial intelligence will play a key role in the near future. Solutions that, for example, identify fresh products through computing vision not only help reduce errors and consequent losses but also increase scanning speed either for employees or the customer, in the case of self-checkout.
In addition, warehouse automation with AutoStore-type solutions will become more and more relevant as the penetration of online business increases. In terms of customer experience, unstaffed stores will probably start to emerge soon in Spain.
Lorena Gómez SVP Spain
It's no surprise that the retail industry is facing change as a result of the pandemic, encouraging a quick response from retailers as they balance shifting customer needs with the drive for personal connection. But many business owners have been prepared for a shift in the UK shopping experience for some time. We have seen a huge shift to consumers shopping online or preparing their shopping order from homes or throughout their working week. It goes without saying that an online presence is vital for most businesses.
For both consumers and retailers, the cost of living crisis is dominating conversations and strategies. It is significantly influencing shopper behaviour and business decisions across an abundance of issues. The inflationary environment, impact of rising interest rates and a weakening labour market are placing a squeeze on discretionary spending for many households. These factors too are also critical to understand, particularly at an increased level of granularity to assess how different demographics will behave in the face of challenging circumstances.
Since our onboarding with the product portfolio StrongPoint has to offer, we have seen a huge interest from our client base in how such solutions could be implemented in the UK and Irish markets. Having such strong case studies and experience across Scandinavia of how these products have helped retailers deal with current operational and commercial challenges will be invaluable for us to grow our offering in our core markets. Currently, the UK and Ireland are relatively 'untapped' when it comes to ESL, something other parts of Europe have as a tried & trusted method to manage inflation and price wars with fellow grocery chains.
With an increase in online shopping for every type of purchase, grocery retailers have enormous opportunities in front of them, but this also creates some challenges for them
to manage internally. As part of our focused strategy in our core markets, automated picking solutions is something that our client base are really intrigued in how this can save them time and money with their 'back office' infrastructure. Not only with the speed of an automated picking solution, but the accuracy is something we can entice our clients into understanding the benefits of such a solution. Having 'real-time' information on stock enables retailers to fulfill online order with far fewer errors and ensure all their customers are well taken care of.
Shopping habits are changing, and different demographics shopping habits vary. Grocery retails are having to offer their customers a flexible way to shop, not to isolate shoppers from their customer base. Whether that is having a scan and shop solution, unmanned checkouts or even the traditional belted
checkout, complete with store colleague operating, our hybrid Swivel checkout is something in which offers retailers a flexible and nimble way to adapt their store to the
time of day in which their stores are trading. Having the option to have the checkout supervised as a traditional
checkout, or change to a 'self-serve' is something not only really relevant to our core markets, but something we are confident can be reversed back into the StrongPoint group in other territories.
These solutions, we would consider really relevant in the current climate helping the grocery retailers to navigate the short term challenges, and be well placed in the market for the next stage of their own shopping experience evolution.
Steve Smith SVP UK & Ireland
Retailers are facing multiple trends that are having a significant impact on their businesses, particularly in the face of global economic uncertainty and inflation, which are creating pressure to maintain profitability.
Fortunately, our solutions can help sustain business profitability and provide a great opportunity for our international partners. Therefore, we are increasing our efforts to work more closely with them, ensuring that they have the support they need to succeed.
The pandemic-induced shift towards more digital ways of working has resulted in another trend - an increase in information exchange and growth of competitive solutions in the self-service field. As the innovators in this area, StrongPoint takes pride in leveraging its first-mover advantage to offer our partners solutions with unique selling points. Our solutions have already been enhanced with AI-powered item recognition features that enable the fastest transaction speeds. In addition, our solutions seamlessly integrate multiple self-service technologies in a single store, provide advanced cash management capabilities, and automate sales for restricted-access items. We continue to innovate and bring new features and solutions to the market to help our partners and retailers maintain a competitive edge.
To maintain a competitive edge, there will be continued demands for increased process efficiency and improved shopping experiences throughout the omnichannel shopping journey. These demands will drive future innovations, with the store frontend being a key area of focus for creating and optimizing new technologies such as checkout-free shopping, shrink reduction, and automation of restricted-access item sales.
Innovative new concepts and technologies are already being tested, and they are set to transform the in-store landscape. With further technological advancements, they will continue to evolve, making the shopping experience even more seamless and efficient.
Julius Stulpinas SVP Technology and Supply Chain
Sustainability at StrongPoint is about making responsible business decisions that create value while protecting the environment and contributing to the good of society. Sustainability is an integrated part of StrongPoint's strategy and the basis for our long-term positioning and profitability. By reducing our footprint, improving relations with neighbors and other stakeholders, managing impacts, increasing resource efficiency, and developing new markets, StrongPoint will minimize risk and create new opportunities. StrongPoint has quantified a set of ambitions that will improve our performance on climate, environment, and social responsibility.
In 2021 we conducted a comprehensive process to gather feedback from our stakeholders and identify a list of potentially material important sustainability topics for StrongPoint. StrongPoint has in-depth and ongoing dialogue with our key stakeholders on sustainability impacts and topics throughout the year. Our key stakeholders include customers, investors, financers, employees, NGOs, unions, national authorities, partners, and suppliers.
A key development in GRI's Materiality Standard is the requirement for reporting companies to assess the significance of their actual and potential impacts, using the criteria in the standard. In 2022, StrongPoint updated our materiality assessment according to the guidance provided in the GRI 3 Universal Standard. The process to update the materiality assessment followed last year's process and the same stakeholder groups and involved expert functions in StrongPoint that have insight into our sustainability commitments and external stakeholders' expectations.
| Expected of StrongPoint - Key Topics and Concerns Discussed (Not Listed in Order of Priority) |
Arena for dialogue | Frequency of Engagement | ||
|---|---|---|---|---|
| Investors/owners • Ensure an engaging, healthy and safe working environment for employees to prevent sick leave and high turnover. • Follow laws and regulations in terms of ethical business operations, human rights and anti-corruption. • Continuously work to reduce the environmental footprint of the products and in own operation. |
• Sustainability report • Quarterly reports/presentations • Annual reports • Teams/phone meeting • Roadshows |
Monthly, Quarterly, Annually (and ongoing basis when relevant) |
||
| Customers • Ensure high quality product that are safe for end-user (e.g., food safety, chemical use). • Follow laws and regulations in terms of ethical business operations, human rights and anti-corruption. • Correct waste management (reduce, reuse, recycle). |
• RFIs, documentation/ requisitions • Visits (during installation) • Through partnership projects • Ratings, risk assessment • Marketing / communications • Meetings • Website • Newsletters • Customer and project meetings • Tender responses and presentations |
Daily, Weekly, Monthly, Quarterly, Annually |
||
| Suppliers | • Contribute to a sustainable industry. • Work to ensure long lifetime of products. • Correct waste management (reduce, reuse, recycle). |
• Supplier audits • Quarterly meetings / audits • Newsletters • Customer meetings / projects |
Daily, Weekly, Monthly, Quarterly, Annually |
|
| Employees | • Ensure an engaging, safe and inclusive working environment. • Focus on employee training and development. • Follow laws and regulations in terms of ethical business operations, human rights and anti-corruption. |
• Townhall meetings • Information from management • AGM • Website • Intranet • Newsletters • Online trainings • Information posters / leaflets • Values implementation process. • Employee survey |
Daily, Weekly, Monthly, Quarterly, Annually |
|
| Government/ civil society |
• Follow laws and regulations in terms of ethical business operations, human rights and anti-corruption. • Comply with regulations for data privacy (e.g., GDPR). • Ensure safe products. |
• Phone and email communication • Visits and tours at our facilities • Conferences and community events • Participation on advisory boards • Social media |
Monthly, Quarterly, Annually Frequency depends on type of government / public authority body |
|
| Media | • Business development and innovations. • Status of operations, and effects on local / regional / national employment • Transparent reporting. |
• Phone and email communication • Interviews • Press releases • Website and social media |
Daily, Weekly, Monthly Frequency depends on type of media, and business activities. |
| Monthly, Quarterly, Annually (and ongoing basis when relevant) |
|---|
| Daily, Weekly, Monthly, Quarterly, Annually |
| Daily, Weekly, Monthly, Quarterly, Annually |
| Daily, Weekly, Monthly, Quarterly, Annually |
| Monthly, Quarterly, Annually Frequency depends on type of government / public authority body |
| Daily, Weekly, Monthly Frequency depends on type of media, and editorial focus vs StrongPoint's key business activities. |
Table: A summary of our stakeholder engagement and the topics and impacts raised by them.
StrongPoint's environmental footprint (direct emissions) are relatively low due to the nature of our business. After assessing the significance and possible negative impact, we have found it to be more relevant and aligned with our stakeholders' feedback to become more focused on innovation and technical solutions that reduce energy consumption on our customer and customercustomers side of the value chain.
We have therefore introduced three Operational Sustainability Initiatives (OSI). Our ambition is to drive sustainability in the grocery industry through product innovation and solution design. The selected focus areas has the potential to significantly improve either emissions or working conditions. Our three OSIs are:
Our people and work environment are introduced as a separate material topic. The topic covers what our 2021 annual report included: "Ethics and anticorruption" and "working environment, including employee health and safety." As per the Norwegian Transparency Act this change reflects our obligations to map and manage risks related to human rights and working conditions and the due diligence StrongPoint performs on suppliers to manage risks related to our commitments to responsible business conduct.
StrongPoint works proactively to ensure sustainability, integrity, and responsibility in its operations. StrongPoint's Board of Directors, the highest governance body, is responsible for overseeing and safeguarding management of our sustainability work. Sustainability is a standard topic on the agenda for the Audit Committee meetings where risk, material impacts, policies, reporting, and other key issues are discussed and agreed upon.
Under the CEO, the Executive Vice President of People and Organization has the responsibility to develop, drive and communicate the sustainability agenda. At the same time our business units are responsible for implementation. Each of our locations is responsible for ensuring compliance with local legal requirements and corporate requirements.
StrongPoint employees are expected to adhere to our Code of Conduct Policy. Our business processes are owned by our global functions and business segments with the responsibility and authority to standardize and optimize our work processes to secure efficient operation.
The Code of Conduct is the fundamental governing document and the foundation of our drive to uphold the highest levels of integrity and avoid becoming complicit in unethical or illegal behaviour. We strive to minimize harm to the environment by providing environmentally sound technology for our activities and our customers. We recognize our responsibility to impact societies positively and strive to ensure that they benefit from our operations.
Sustainability is embedded into StrongPoint's enterprise strategy and is not a separately developed strategy. Decisions are made every day that impact our value chain: they affect people, customers and suppliers, the environment and the communities in which we operate. We know that how we conduct ourselves as an employer and as a business has a profound impact on the company's ability to create long-term value for society and our shareholders.
StrongPoint act and report on sustainability according to national and international standards and legal requirements. The most important are:
II. EU taxonomy for sustainable economic activities
III. Sustainability reporting Global Reporting Initiative standards (GRI)
Since 2021, StrongPoint has been a signatory to the UN Global Compact, the world's largest corporate sustainability initiative, and is committed to its 10 principles. We respect and adhere to the precautionary principle (Principle 7). This report is our annual Communication on Progress.
StrongPoint supports the UN Sustainable Development Goals (SDGs), a collection of 17 global goals set by the United Nations General Assembly in 2015. Based on our materiality assessment, we have prioritized eight (8) SDGs where we believe we can have the most impact and where we seek to contribute positively.
The UN Sustainable Development Goals (SDGs) embrace a universal approach and define the global agenda for sustainable development. The goals explicitly call on businesses to use creativity and innovation to address development challenges and recognize the need for governments to encourage sustainability reporting. StrongPoint uses the SDGs to understand the context of our impact on sustainable development. Please refer to the Appendices for an overview of StrongPoint's impact on the 17 development goals. SDG 2, 9, 11 and 12:
Product innovation, quality and safety in the food chain Ensuring safe and fresh groceries. With innovative labelling and minimal wastage of food. Develop and offer new technical solutions to the market which are more environmentally sound, simplifying and improving the way retailers and communities do business.
SDG 5 and 8: Working environment Ensuring a healthy, fair workplace that creates good opportunities for all. Protecting labor rights for all workers.
Promoting a more circular economy and working with suppliers on joint strategies to reduce our CO2 footprint.
Setting and enforcing appropriate rules of behavior for employees and suppliers, along with reporting mechanism.
The taxonomy is a classification system that specifies criteria for which activities can be considered sustainable. It is an integral part of the EU's action plan to turn capital toward a more sustainable economy. It represents an important step in becoming carbon neutral by 2050.
The taxonomy has been adopted in Norwegian legislation through the Act on the publication of sustainability information in the financial sector, which entered into force on 1 January 2023. StrongPoint needs to report according to the law as a non-financial reporting subject (based on the 2022 number of employees and revenue).
The reporting requirements are not binding until 2023. However, StrongPoint has chosen to partially include taxonomy-related information in the annual report for the financial year of 2022.
In the following section, we, as a non-financial parent undertaking, present the share of our group turnover, capital expenditure (Capex), and operating expenditure (Opex) for the reporting period 2022, which are associated with Taxonomy-eligible economic activities related to the first two environmental objectives (climate change mitigation and climate change adaptation) by Art. 8 Taxonomy Regulation and Art. 10 (2) of the Art. 8 Delegated Act.
Illustration of Taxonomy requirements and qualifiers.
Our economic activities as a technology group are Taxonomy-non-eligible: We have examined all Taxonomy-eligible economic activities listed in the Climate Delegated Act based on our activities as a retail technology company. The Climate Delegated Act focuses on those economic activities and sectors with the most significant potential to achieve the objective of climate change mitigation – that is, the need to avoid producing greenhouse gas (GHG) emissions, to reduce such emissions, or to increase GHG removals and long-term carbon storage. The sectors covered include energy, selected manufacturing activities, professional- scientific- and technical activities, transport and buildings. After a thorough review (using the NECE codes, technical screening, and Taxonomy compass) involving all relevant Business units and functions, we concluded that our economic activities are not covered by the Climate Delegated Act and consequently are Taxonomy-noneligible. And that StrongPoint has no areas that Do No Significant Harm ('DNSH').
Activities within the value chain of our products that are not revenuegenerating, but that result in assets or processes that are essential for our revenue-generating activities, are not reported as Taxonomy-eligible economic activities on their own. This includes, in particular, research and development, the rent/acquisition/construction of new buildings (for our production sites), and other investment-oriented activities such as expenditure for our fleet and data center capacities.
Additionally, the transport of our products to our customers and partners is not reported as a Taxonomy-eligible activity, and it is not included in our turnover KPI, because we are not generating external turnover on a standalone basis with this activity. However, we do disclose Capex and Opex relating to the purchase of output from Taxonomy-eligible economic activities and individual measures to improve energy efficiency listed in the Climate Delegated Act.
StrongPoint has assessed our future impact in the following risk areas: • Temperature-related (Changing temperature (air, freshwater, marine water), Heat stress, Temperature variability, Permafrost thawing, Heatwave, Cold
We foresee that we, in the future, and to be further assessed in 2023, might report on heat stress and how the grocery retail industry impact positively on food waste, and changes in traffic patterns in heavily populated city areas. We also see that we may contribute to energy-efficient building automation and control systems for non-residential buildings (warehouses).
* Concerning our vehicle fleet, we considered all leased vehicles as Taxonomy-eligible. * This voluntary disclosure is based on a preliminary assessment of the technical screening criteria. Our assessment might change in the future. We provide this information for transparency purposes only.
Based on the non-significant impact and size of the expenditures there has not been set any specific KPIs on top of what StrongPoint has as general Sustainability KPIs (as described in annex on page 64-67).
Compliance with the Minimum Safeguards is determined by assessing performance criteria against four core topics:
Since our economic activities as a retail technology company are not covered by the Climate Delegated Act, the share of Taxonomy-eligible economic activities in our total turnover is 0%, and consequently the related capital and operating expenditure are also 0%.
Only "category c" Capex and Opex can therefore qualify as Taxonomyeligible, i.e., Capex/Opex related to the purchase of output from Taxonomyeligible economic activities and individual measures enabling the target activities (our non-eligible activities) to become low-carbon or to lead to greenhouse gas reductions.
These individual measures correspond to economic activities listed in the delegated acts supplementing the Taxonomy Regulation (as of today, the Climate Delegated Act).
We have identified the following purchased outputs and individual measures that correspond to eligible economic activities and, thus, result in Taxonomyeligible Capex/Opex:
| Total (MNOK) | Proportion of Taxonomy eligible economic activities (in %) |
Proportion of Taxonomy noneligible economic activities (in %) |
|
|---|---|---|---|
| Turnover | 1,372 | 0% | 100% |
| Capital expenditure (Capex) | 11 | 1% | 99% |
| Operating expenditure (Opex) | 135 | 1% | 99% |
HRDD is described in CoC and implemented as part of the Transparency act process. StrongPoint has not been accused or found in breach of labour law or No indicators signal has ever been
| Considered non-compliant if one of the two criteria apply: | StrongPoint reporting | |
|---|---|---|
| Human Rights | 1. The company has not established an adequate human rights due diligence (HRDD) process as outlined in the UN Guiding Principles (UNGPs) and OECD Guidelines for Multinational Enterprises 2. There are signals that the company did not dequately implement human rights due diligence and/or did abuse. These are: a. The company has been finally found in breach of labour law or human rights b. OECD or Business and Human Rights Resource Centre (BHRRC) indicators signal that the company does not engage with stakeholders. |
issued. |
| Corruption | 1. The company has no anti-corruption processes in place 2. The company or its senior management, including the senior management of its subsidiaries, has been finally convicted in court of corruption. |
corruption. |
| Taxation | 1. The company does not treat tax governance and compliance as important elements of oversight, and there are no adequate tax risk management strategies and processes in place. 2. The company or its subsidiaries have been finally found to have violated tax laws. |
of having violating tax laws. |
| Fair Competition | 1. The company does not promote employee awareness of the importance of compliance with all applicable competition laws and regulations. 2. The company or its senior management, including the senior management of its subsidiaries, has been finally convicted of violating competition laws. |
Anti corruption process is described in our policies. The company or any of its senior management has never been convicted of
StrongPoint follows national and international standards on taxation. The company and subsidiaries has never been found guilty
StrongPoint accepts and promotes the principles of fair competition. The company or any of its senior management has never been convicted of violating competition laws.
This chapter summarizes StrongPoint's sustainability reporting, and is in accordance with the GRI standards. It presents StrongPoint's management of and performance on material environmental and social issues.
The reporting period is 1st January to 31st December 2022. The report also adheres to the Oslo Stock Exchange's Euronext Guidelines. StrongPoint's sustainability report has been reviewed and approved by the Board of Directors together with the annual report. The claims and data in this report has not been audited by a third party.
For information about this sustainability report and its content please contact StrongPoint and CEO Jakob Tveraabak or SVP People and Organisation, Knut Olav Nyhus Olsen. Both their contact details can be found on the StrongPoint website.
Our materiality assessment is presented above on page 41, and the background facts and figures about the company can be found on page 2-12 of this report. Our corporate governance model is presented on page 76-80. For an updated GRI index please visit our webpage strongpoint.com.
This report covers all locations and subsidiaries of StrongPoint ASA. StrongPoint is headquartered in Rælingen, Norway, with offices in nine countries (Norway, Sweden, the Baltics, Spain, UK, Ireland and Bulgaria).
StrongPoint's economic impact is covered in the company's annual report. Payroll and social security expenses is covered in Note 9 of StrongPoint's annual report 2022. Tax information can be found in Note 26 in the annual report.
Figure: StrongPoint's supply chain illustrated
StrongPoint serves the retail and e-commerce sector. The company produces a wide range of services to different lines of business including food and beverage, beauty and health, sports and the manufacturing industry. StrongPoint's supply chain starts with the sourcing of materials and extends to the distribution of StrongPoint's products mainly to customers throughout Europe. StrongPoint's key markets are Norway, Sweden, the Baltics, Spain, UK, South-Africa, Italy and US.
Good corporate governance is vital to the success of StrongPoint and as a stock listed company, StrongPoint has the responsibility to follow all relevant legislation, regulations and standards. In 2022, the Board of Directors (the Board) has reviewed and updated the company's corporate governance practice, which is in line with the Accounting Act, section 3-3b and the Norwegian Code of Practice for Corporate Governance (NUES recommendations), except where deviations are noted. StrongPoint's corporate governance principles are determined by the Board and are set forth in the company's management documents. The Board annually adopts a plan for its work, emphasising goals, strategies, and implementation, including the company's ESG approach. Sustainability is an integrated part of StrongPoint's core business and Executive Management are responsible for the follow-up of the company's sustainability efforts on a day-to-day basis.
StrongPoint's sustainability approach is also covered in the company's Code of Conduct.
More information about the company's corporate governance strategy, can be found at StrongPoint's website. (https://www.strongpoint.com/investor/ corporate-governance/).
StrongPoint's materiality assessment guides the company's ESG priorities. Setting priorities is at the heart of building a better future. StrongPoint's materiality assessment helps identify, prioritise, and validate our most significant sustainability impacts, risks, and opportunities.
ESG factors are at StrongPoint treated with equal importance, given the fundamental belief that smaller actions also contribute to the greater good and drive society towards a more sustainable future.
Environment and climate
People and working environment
Operational sustainability initiatives
These topics is the focus of StrongPoint's sustainability report. The reporting covers GRI 205 Anti-corruption, GRI 401 Employment, GRI 403 Occupational Health and Safety, GRI 405 Diversity and Equal Opportunity, GRI 406 Non-Discrimination and GRI 416 Customer Health and Safety.
StrongPoint's business activities are directly and indirectly affected by and can also affect the natural environment and climate. The need for technological solutions that lower the company's own as well as it's stakeholders' environmental footprint represent a business opportunity for StrongPoint but also a challenge. The company's ambition is to reduce direct and indirect negative influences of its business activities on the external environment and continuously seek new ways to minimise negative environmental impact.
StrongPoint's direct and indirect environmental impacts relate to the production, shipment and transportation of products, employee business travel, waste management and the end-of-life treatment of products. StrongPoint's most important indirect environmental impacts in the value chain come from transportation and the end-of-life treatment for some of StrongPoint's products. Combustion of fossil fuels from company vehicles and on-site combustion are the second largest source of emissions.
StrongPoint should at all times act responsibly and adhere to relevant laws and standards relating to the environment. The company will work systematically to ensure that the products StrongPoint manufacture or resell are made by leading suppliers with a clear policy for sustainability in their own organisation and supply chain. Environmental criteria are always considered when selecting partners. StrongPoint has included environmental accountability in the company's SLA/supplier Code of Conduct to reduce the indirect carbon emissions caused by suppliers.
StrongPoint has the ambition to make all of StrongPoint's production facilities compliant with ISO certification. StrongPoint does not itself own any production facilities but is dependent on this service from suppliers that source and assemble raw material and components into StrongPoint products. Although StrongPoint does not itself own these production facilities, the company accepts an indirect responsibility in the manufacturing process.
StrongPoint has a net-zero ambition by 2050 or earlier and believes selected solutions from StrongPoint play a role in reducing global greenhouse gas (GHG) emissions. StrongPoint's ambition is to reduce the climate impact from our value chain and become a net-zero company in 2050 or earlier, deliver net-zero products and use our industrial competence to enable the transition to a netzero society especially in the retail industry sector. Our net-zero ambitions are based on a successful transition to a 1.5 degree economy, in line with climate science and the Paris agreement.
StrongPoint's climate strategy is an integral part of our overall business strategy, aiming at driving improvements and development within the company. Impact on the climate strategy is also a criterion for all significant investment decisions. The strategy includes reducing the climate impact of our operations as well as taking advantage of business opportunities by enabling our customers and society to do the same.
GHG emissions are calculated according to the GHG protocol published by the World Business Council for Sustainable Development (WBCSD) and World Resources Institute. Scope 1 emissions are calculated using emission factors for fuel combustion from DEFRA. Scope 2 emissions are calculated using market-based emission factors from the RE-DISS Project, assuming a European residual mix.
Our emissions have significantly increased from 2021 to 2022 (+4218 t CO2 eq.) The prominent increase relates to the ASL StrongPoint operations. Their emissions have been accounted for with a full-year effect, even though the company was acquired in June 2022. The ALS StrongPoint operations are more emission-intensive than other StrongPoint operations when it comes to waste (wood, metals, and mixed industrial waste), 3rd party road transportation, and warehouse facility heating.
StrongPoint's activities in this area have in the recent years been focusing on reducing the carbon footprint in the company's own operations (scope 1 and 2). Going forward we will focus more on supporting our customers on their climate footprint (scope 3). To reduce emissions across the whole value chain requires close collaboration with partners, suppliers and customers to minimise the impact of the company's products on the environment. More about this topic can be found in the chapter Operational Sustainability Initiatives (OSI) on page 54-56.
| Tonnes CO2 eq. |
|---|
| Scope 1 – Direct emissions (on-site) | 1 261 |
|---|---|
| Scope 2 – Indirect emissions (energy) | 150 |
| Scope 3 – Indirect emissions (other organizations) | 3 981 |
| Total GHG footprint 2022 | 5 392 |
Table: Total GHG footprint
In order to understand and mitigate the risks for our operations and potential consequences related to climate change, we have performed a climate risk assessments, evaluating physical and transition risks. We have looked at weather patterns and their impact on our facilities based on climate models and scenarios from the Intergovernmental Panel on Climate Change (IPCC).
Our office locations and operational way-of-work does not imply acute physical risks (e.g., physical assets, insurance liabilities) or chronic physical risk (e.g., resource availability, including labour).
Business-related transition risks that a societal and economic shift to a decarbonized world would bring (such as changes in demand, the impact on energy prices, building renovation requirements, or potential competitive impacts on logistics chains) is likely to happen, but in an extent and comparable to what competitors and the society in general will have to face. We foresee some general transition risk to occur. Such as policy and legal risk (e.g., compliance costs, CO2 emission tax).
We do not expect market and economic risk impacts (e.g., company valuation, asset impairment, credit rating) or any negative reputation risk (e.g., brand value).
No technology risk (e.g., write-offs for old systems displaced by new technologies) has been accounted.
We anticipate a growing market opportunity related to our energy efficient temperature-controlled warehouse and locker solutions with higher energy prices and higher temperatures.
StrongPoint has no significant climate exposure in any part of its business operations. At the time of the report, there were no climate-related conditions of a size that are relevant for estimation uncertainty or write-downs. There are no asset retirement obligations.
| HAZARDS | Short-Term 1-3 years |
Middle 15 years |
Long-Term 15-50 years |
DETAILS | |
|---|---|---|---|---|---|
| Climate Extremes & Heat | Load-sharing of electricity. Changing seasonality of demand. | ||||
| MPACTS | Wildfire & Complications | Critical infrastructure failure. | |||
| AL I RADU |
Air Quality & Pollution | Policy regulations of cost and impact. Travel restrictions. | |||
| G | Water Availability | Groundwater availability in large cities. | |||
| Climate Extremes & Heat | Examples of heat waves in Spain that already impacts on the productivity. Rolling outages and interruption of services. |
||||
| VENTS ME E |
Wildfire & Complications | Transmission lines failure. Ash problems. | |||
| RE | Air Quality & Pollution | Public safety and human health - Madrid and Barcelona office. | |||
| XT E |
Water Availability | Extreme events unlikely, could amplify other events (fire risk and air quality). |
Working with employees, customers and suppliers in more than 20 different countries, StrongPoint is directly and indirectly exposed to ethical risks throughout the company's value chain. The company has a direct and indirect responsibility to make sure that it maintains a proactive approach to ethics, including screening suppliers or assessing operations for risks related to corruption, provide awareness training for employees, implement good governance mechanisms and a system for employees to raise concerns and report irregularities.
Responsible business conduct is crucial to earn the trust of stakeholders and the company is dedicated to ensuring ethical business practices throughout its operations and value chain. For StrongPoint this means respecting recognised international human and labour rights, such as the Human Rights Act and OECD Guidelines for multinational enterprises and respecting all national laws and regulations in the countries where the company is present, including the Norwegian Companies Act, the Norwegian Penal Code and the Norwegian Code of Practice for listed companies (NUES). In 2020, StrongPoint became a UN Global Compact Signatory.
The company's ethical guidelines are outlined in the Code of Conduct, which can be found in full on StrongPoint's website. The StrongPoint Code of Conduct is the overarching document describing the standards and expectations regarding business ethics for all who work for StrongPoint, its subsidiaries and entities under the company's control. The Code of Conduct clearly states StrongPoint's expectations for personal conduct and business practice, and covers matters such as information security, policies in relation to anti-corruption and how to deal with conflicts of interest.
The Code of Conduct applies to all StrongPoint employees as well as the Board of Directors. Executive Management are responsible for the implementation and follow-up of the principles in the Code of Conduct and signing the Code of Conduct is a part of the onboarding process for new employees. Supervisors are responsible for both promoting and monitoring compliance with the Code of Conduct within their respective area of responsibility.
In 2022 StrongPoint finalized the process to define the Why (purpose), What (strategy) and How (behaviours) of StrongPoint. A simplified roadmap from having mission, vision, values, attitudes, narrative, etc. to talk about "the triangle". This process included input collection from country teams from all the business units, including an all-employee workshop, and a board and executive management team discussions.
A strong company culture and a continued focus on business ethics is a prerequisite for risk management and a strong business performance. Risk is initially assessed at the business unit side then discussed at the board level to mitigate any risks flagged.
StrongPoint makes a quarterly risk assessment for all StrongPoint's operations with the aim to identify, evaluate and manage risks. The Code of Conduct has been updated to include supplier guidelines for anti-corruption and business ethics, and this is now included in contracts with new suppliers.
StrongPoint recognizes that businesses have a responsibility to respect, support and promote human rights. We must consider our impact on society and on people's rights, in all parts of our value chain, in our own operations, the local communities we are part of, and in our supply chain.
We respect the human rights of all individuals and groups that may be affected by our operations. As an employer, owner and purchaser, an important way to respect human rights is to secure decent working conditions in our organization, in minority-owned companies and with our suppliers.
We do not tolerate any form of harassment or discrimination, including but not limited to gender, race, colour, religion, political views, union affiliation, ethnic background, disability, sexual orientation or marital status. Furthermore, we do not tolerate any form of forced or compulsory labour, human trafficking or child labour abuse. We support the principles of freedom of association and collective bargaining. StrongPoint supports the principles underlying the Universal Declaration of Human Rights, the International Covenant on Economic, Social and Cultural Rights, and the International Covenant on Civil and Political Rights, the UN Global Compact and ILO's eight core conventions, and we expect our suppliers to do the same.
StrongPoint has identified the key risk of human rights breaches to be related to having third-party suppliers in China. StrongPoint carries out regular site visits and audits at the outsourced production facility in China, however this was not possible in 2022 due to Covid-19 restrictions.
In 2022 there has been no indication of serious violations to the StrongPoint Code of Conduct.
StrongPoint's approach to human rights is based on key frameworks that define human rights principles for businesses, including the UN Guiding Principles on Business and Human Rights. For a full overview, see GRI
Standards general disclosure 2-28. StrongPoint's human rights management is based on the OECD Due Diligence Guidance for Responsible Business Conduct.
StrongPoint has a zero tolerance for corruption. This includes all directors and employees of the Group and companies and persons acting on behalf of the Group. Donations, sponsorships and irregular gifts need approval according to the 'grandfather principle'. Also, as a stock listed company, StrongPoint has to abide by strict regulations on conflict of interest, which is regulated in employee contracts. Employees receive awareness training as and when appropriate according to the business unit in which they work. Each business unit has gifts and hospitality guidelines.
If an employee or external party comes across a possible breach of laws, regulations or StrongPoint's Code of Conduct, or any other possible unethical business practice, this should be reported either in person or through the company's whistleblowing programme. Concerns can also be raised by reporting to an immediate superior, directly to anyone in the management team or directly to the Audit Committee at StrongPoint. A message of concern cannot and will not be used against the reporting employee in any way.
Examples of issues that should be reported includes:
StrongPoint has not taken part in any legal proceedings related to business ethics in 2022, nor has there been any confirmed cases of corruption.
In 2022 there has been reported two cases of misconduct. One related to harassment and discrimination and a second about the use of illegal substances. Both cases are closed after investigations. One employee voluntarily left the company in the inquiry. No other sanctions were taken in either of the cases.
In our monthly employee survey, we ask all employees the following question: "If I experienced serious misconduct at work, I'm confident StrongPoint would take action to rectify the situation". The feedback score on this question is 5 points above the external benchmark (eNPS of 47/8.3 average)
As stated in the company Code of Conduct, StrongPoint will conduct its business in a manner designed to protect the interests of its employees including their health and safety. The company expects employees to exercise the highest standards of professional integrity. StrongPoint abides by all local laws and regulations in the countries where the company operates. The overall responsibility of employment, including anti-discrimination and equality process lies with the line manager, and is overlooked by HR, with input from employee representatives, and reviewed by the Board of Directors.
StrongPoint aims to provide a workplace with a good working environment. The Group is implementing measures to promote the employees' professional development, prevent illness and accidents, and improve the overall work environment. Average employee turnover in 2022 was 12,7%, back to a more normalized level after being 26,4% in 2021 due to M&A.
All employees in the Group shall have standardised employment contracts and are free to organise themselves in labour unions and organisations promoting employee welfare.
In 2022, StrongPoint has continued the use of Employee Engagement Tool Peakon. The tool allows us to measure the employee experience for all employees and managers in StrongPoint. They survey is run every two months where all employees record their feedback on 56 questions that cover 15 dimensions of their employment. The employee Net Promoter Score in Peakon show very good results when benchmarked against other companies (the list of indicators are based on loyalty and satisfaction). At the end of 2022 StrongPoint score was 36. This is 8 base points better than the benchmark companies. The score is well above the mid-range of technology companies (30). Approximately 53% of all employees score the company at 9 or 10 on a scale from 1 to 10. The overall score in 2021 was 52. The drop in score is mainly due to the acquisition of ALS in UK, and some are related to lower scores in Sweden and Norway.
Ensuring a safe and secure working environment is StrongPoint's number one priority. The company has implemented an occupational health and safety management system that builds upon the Norwegian Working Environment Act and ISO 45001 – Occupational Health and Safety, especially in regard to Leadership and Worker Participation, Corporate Risk Assessment, General Performance Evaluation and Supply Chain Engagement. All employees are required to follow the company's health and safety guidelines as well as applicable laws to prevent harm to people and the surrounding environment.
StrongPoint encourages its employees to participate in activities related to health and wellbeing. Working conditions within the organisation shall meet or exceed legal requirements in every country in which StrongPoint operates and the company shall comply with the conventions of the UN Global Compact and the International Labour Organization.
All employees receive training in fire safety, and fire drills are conducted on a regular basis. Parts of the organisation undergo annual training in first aid, which includes training on how to use heart defibrillators. Other departments undergo training related to safe driving. Warehouse employees are required to undergo necessary certifications to use forklifts.
Hazards are identified and monitored to prevent accidents and occupational illness and workplace guidelines are monitored to ensure a healthy, safe environment. Local management conduct regular safety rounds at the production facility in Sweden and although all other physical production is outsourced, StrongPoint believes it is the company's moral obligation to ensure the health and safety of its employees. HSSE visits are usually conducted at the company's production facility in China every year. However, this was not possible in 2022 due to the Covid-19 pandemic, and the follow-up was done remotely.
The company's ambition is to have zero injuries or incidents. However, it is crucial that the company monitor potential breaches and health and safety incidents that occur at StrongPoint sites in order to implement preventive measures. Employees are encouraged to report health and safety breaches and any work-related incidents that happen on StrongPoint's sites to the nearest line manager and he/she is responsible for the investigation. No employees were injured at work and there were no major occupational accidents and no work-related fatalities in 2022. Total sick leave in the company was at 1.6% in 2022, compared to 1.9% the previous year.
The company provides a range of healthy lunch choices for its employees in its largest offices. All employees, except employees in ALS StrongPoint, have access to health insurance, and in most business units, StrongPoint subsidises the cost of physical exercise. The company encourages participation in athletics through StrongPoint sponsored fitness membership program.
StrongPoint has set an ambition to drive sustainability in the grocery industry through our product innovation and solution design. We have chosen to focus on three areas where we know the positive impact can become significant on either emissions or humans.
5-10% of all sold groceries are handled in a chilled or frozen environment. How a retail grocery business transports and stores the products dramatically impacts food quality and related food waste. Keeping an efficient cold chain is essential both in terms of energy consumption and costs. Historically companies have implemented energy management programs targeting energy efficiency savings of 5% to 20% on energy bills. With such measures, the industry has lowered warehoses' general energy consumption benchmark by 15% - 30%* over the past two decades. (*dependent on the size of the warehouse).
StrongPoint believes we can improve this significantly and achieve much higher savings by introducing our AutoStore micro fulfillment warehouse solutions.
By reducing the needed space required for storage and retrieval operations, organizations can construct smaller, more energy-efficient buildings, shrinking the construction footprint by up to ¼. A reduced volume requires less energy to cool down, and the cube storage model also has much less circulation and temperature loss than standard cold storage rooms. The StrongPoint solution needs no doors, trucks, lights, and workers inside to be operated. Saving money and the environment.
According to research (source: coldchainfederation.org.uk), a modern and well-maintained cold store of 500,000 m3 would have a specific energy consumption (SEC) of approximately 5kWh/m3/yr. This would be equivalent to more than 500,000 kg CO2e per year. A possible reduction of 50% in emissions with our solutions would be substantial for this operation.
With a more condensed cube storage model and introducing the first robots that can handle frozen groceries in a warehouse cube grid, we can reduce the energy consumption in refrigerated warehouses by more than 50%.
2023 - introduce the concept to selected grocery chains in Norway and Sweden. 2024 - build up internal competence in new markets and roll out projects at a
number of facilities (non-disclosed).
In Europe, there are an estimated 78,000 grocery hyper and super-markets. They are all set up with multiple checkout counters serving millions of customers daily. The wear and tear on the equipment (i.e., conveyor belts, structures, painting, electronics, and dividers) are lasting and lead to a need for replacement.
Historically the checkout counters have been replaced by new ones, leaving the old as waste. Our estimates show that a medium-sized check-out counter has an LCA (Life Cycle Assessment) carbon footprint that could be reduced by more than 70% with a more sustainable practice.
ALS StrongPoint has specialized in the recycling of counters. We believe this could also be done in markets other than UK/ROI.
Having comprehensive management of existing assets allows grocers to identify opportunities to extend the lifespan of the check-out counters through deep cleaning, sanitisation, repairing, re-painting, and upgrading hardware. Returned assets can be refurbished or upgraded and re-allocated to another site to supplement the existing assets, or as a like-for-like replacement. This will lessen the environmental impact by reducing waste sent to landfills and removing the need to purchase from new.
However, all things have a finite lifespan. Anything that reaches the end of life will be harvested for parts for maintenance purposes, and the remainder will be disposed of in a controlled manner, in line with our environmental policies and accreditations.
We all should reuse, rework, refurbish, and recycle more!
Shopworkers are being attacked, threatened, and even killed while on duty in convenience stores. Armed robberies cause untold damage. Yet they're occurring with worrying regularity.
Sainsbury's, one of the leading grocery chains in the UK, alone experienced 4,500 violent incidents involving a weapon in a year, it recently told the UK Home Affairs Committee.
Historically, armed robbers used to target high-end banks. But since they have securitised to such an extent that, for your average robber, it's just too much hard work, armed robbers have now chosen "softer targets" with less security, such as convenience stores. Amateur criminals can now commit violent incidents as often as professional gangs. The average armed robber now is a lone male in his 30s using a knife, often committing crimes to fund substance abuse.
StrongPoint has, since the introduction of CashGuard in 2003, been fighting crimes by safeguarding the money and the workers.
We are now introducing new solutions that not only safeguard the money at the counter till, but also increase the security from the front-end counter to the back-end storage of the store, and when handing it over to the Cash-in-Transit (CIT) collector. Read more on page 23 and 24.
You never, ever get over something like that. The store was put back together, the stock was replaced. But these people will never have the same feeling of coming to work in the morning, not knowing whether that knock on the door is the bread man or someone wanting to come and hurt them.
UK store owner
The Norwegian Transparency Act came into force on 1 July 2022. It amends the Non-Financial Reporting Directive 2014/95/EU on Responsible Business Conduct and is based on the recommendations in the UN Guiding Principles on Business and Human Rights (UNGP) and the OECD Guidelines for Multinational Enterprises.
The Transparency Act aims to promote enterprises' respect for fundamental human rights and decent working conditions in connection with the production of goods and services and to ensure the general public access to information regarding how enterprises address adverse impacts on fundamental human rights and decent working conditions.
It applies to the company's own business, suppliers, and the suppliers' value chain.
StrongPoint shall, according to section 5 in the Transparency Act, publish an account of the due diligence assessments, as done in this report. This report also combines the reporting obligations under the Accounting Act §3-3c.
StrongPoint follows the duties to carry out due diligence assessments to understand the risk of possible breaches - and to introduce measures where necessary. Furthermore, we have a duty to inform about what is used as a basis for the due diligence assessments and the results.
Each StrongPoint business unit shall monitor its operations, and due diligence assessments are carried out locally under guidance and collaboration with StrongPoint ASA.
StrongPoint Technology and Sourcing are primary responsible for the follow up of all suppliers.
We carry out due diligence assessments in connection with various business decisions. This will in StrongPoint be done when establishing new business areas, launching new products, or acquiring other businesses.
StrongPoint works according to a risk-based methodology, where risk assessments and analyses are part of the management processes in the company and are overlooked by the Board of Directors. StrongPoint also includes the environment and anti-corruption in our transparency due diligence assessment.
The process for due diligence assessments in StrongPoint is based on the "OECD guide for due diligence assessments for responsible business".
A0. We establish a list of all suppliers and partners (up-stream and down-stream). Based on the severity and probability of adverse impacts on fundamental human rights and decent working conditions, we include the extended supply chain.
A1. An overall risk assessment is carried out. Assessing the country of origin, company size, raw materials and risk industries, and company legal structure. Based on this assessment, a list of suppliers is produced where risks may be related to human rights, decent working conditions, the environment, and anticorruption. If no significant risk is uncovered, the process stops and no further actions are performed. In this assessment, we use pre-determined threshold values and benchmarks against recognized and reliable international subject matter sources (list found in the section below).
A2. We make a detailed assessment of the risk list from A1. It starts with us looking at the findings from A1 against the documentation and the knowledge StrongPoint has about the suppliers in question. Normally, the supplier's risk will be handled, and the supplier will receive a new low-risk status. For suppliers where the risk has not been handled, we will obtain the necessary information and documentation to map the risk better. We will then conduct a new risk assessment where the supplier is normally involved. The supplier will receive either a "low risk" or a "high risk" status. If the risk is high, the next step is to make an action plan.
A3. Here, measures are drawn up and planned to reduce the risk uncovered in A2. This can be local audits, contract changes, and measures that stop or reduce the negative impact. Necessary internal and external resources are involved, and an action plan is drawn up with those responsible.
A4. We have reached the time when the measures we have decided on in A3 are implemented. This is documented continuously to see that the measures are having an effect.
A5. Evaluation and learning cycle. We confirm that the measures resolved identified risks and reduced the negative impact. Conducts evaluation meetings and suggests improvements to avoid similar situations in the future.
A6. All process steps and actions should be documented.
StrongPoint uses the following sources as a basis for its due diligence assessments of suppliers:
Sources:
Freedom House: https://freedomhouse.org/reports/nations-transit/nationstransit-methodology The International Trade Union Confederation (ITUC): https://www.ituc-csi.org/ EPI: https://epi.yale.edu/epi-results/2022/component/epi Transparency International: https://www.transparency.org/
An essential part of establishing a tool for our risk assessment has been to determine threshold values for the different risk areas. I.e., when is a country good enough at safeguarding fundamental human rights or decent working conditions? The above-mentioned assessment sources have recommendations that StrongPoint has chosen to use. Based on a point scale from 0 to 100, StrongPoint has the following threshold values as guidelines in our assessments:
| Theme | Source | Measures |
|---|---|---|
| Fundamental Human Rights |
Freedom House | Measures political freedom and individual rights. Political diversity, freedom of expression, legal due process, and financial dependencies and supression. |
| Decent working conditions |
International Trade Union Confederation |
Summerizes data from unions on employment conditions in different countries. Measures the right to establish and join labour unions, collective bargnings, and the right to og on strike. |
| Environment | Environmental Performance Index (EPI) |
Measures different countries contribution and impact on the environment. Environmental health (40%): Polution to air, water and from heavy metals. Eco-systems (60%): Bio diversity, de-foresting, fisheries, suage, greenhouse emissions, and nitrogen emissions from agriculture |
| Anti-corruption | Transparency International | Measures the extent of corruption in the government sector in different countries based on 12 expert opinions from institutions and 16 surveys. |
| Source | Threshold | Explanation | |
|---|---|---|---|
| Summerizes data from unions on employment conditions in different countries. Measures the right to establish and join labour unions, collective bargnings, and the |
Freedom House | Minimum 35 | Countries with score below 35 are considred "Not Free". Countries with score above 35 are considred "Partly Free" or "Free". |
| right to og on strike. | International Trade | Minimum 60 | Scores below 60 are not concidered |
| Measures different countries contribution and impact on the environment. Environmental health (40%): Polution to air, water and from heavy metals. Eco-systems (60%): Bio |
acceptable. | ||
| diversity, de-foresting, fisheries, suage, greenhouse emissions, and nitrogen emissions from agriculture |
Environmental Performance Index (EPI) |
Minimum 50 | Scores are rated from red to green per country. Red (not acceptable) is in the range of 0-50. |
| government sector in different countries based on 12 expert opinions from institutions and 16 surveys. |
|||
| Transparency International |
Minimum 50 | Countries with scoe below 50 are concidered to be among the more corupt societies. |
|
| Global Slavery Index Global Rights Index |
When needed, we also use references from the following sources: | ||
| Country Reports on Human Rights Practices Human Rights Watch |
|||
| UN: Working Group on Business and Human Rights Universal Human Rights Index (UHRI) Business Human Rights |
|||
| Corporate Human Rights Benchmark |
Our list of controlled subjects contains approximately 2078 instances. Out of these a selection of 38 companies were selected as having a possible significant impact (A1 screening based on total spending with StrongPoint).
Companies with a spend above 10 MEURO have been evaluated with special attention, and all with a spend above 100 MEURO have been thoroughly assessed.
Seven companies residing outside EU have been evaluated (from China, USA, Singapore, and Japan). In addition, we have added companies from Bulgaria, Spain, and Lithuania based on the given source thresholds mentioned above.
For suppliers in industry sectors with expected high risk or where StrongPoint does not perform its own work, such as staffing, transportation, professional services, and electrical installations, we have selected ten (10) companies to be assessed.
Six suppliers with short tenure (0-2 years working with StrongPoint) have been evaluated.
Four companies have been evaluated based on short or no information about their corporate governance on company websites or other company information.
The first company labeled as "high risk" is primarily based on country of origin and size. And the second company is on legal entity type and historical connection to StrongPoint. Our initial findings have not revealed additional concerns. However, the assessments will continue into 2023 according to established action plans (interviews, internal awareness to key stakeholders, and site visit).
The right to information is an integral part of the Transparency Act. Any individual or organization has the right to request information from StrongPoint on how we as a company address actual and potential adverse impacts, both in general or to specific products or services.
We have published information and standard information request forms on our web pages. Requests are routed to the SVP People and Organization. They will be responded to in writing no later than three weeks after receiving the request.
Reference is made to the following statements, with description of the company's guidelines for handling such conditions including carried out due diligence assessments:
StrongPoint will report according to the Corporate Sustainability Reporting Directive (CSRD) from 2025, replacing the NFRD directive.
The following sections provide information on the status of diversity and inclusion in StrongPoint and the activities being undertaken to identify and analyze the risk of discrimination and actions to improve our D&I performance under the Norwegian Equality and Anti-Discrimination Act. This diversity and inclusion report and its references are approved by the Board of Directors and included in their responsibility statement.
StrongPoint find diverse perspectives to be essential to delivering on our long-term strategic agenda. Diversity allows us to think, approach challenges and solve problems differently. StrongPoint is committed to providing equitable employment opportunities and treating all employees fairly and respectfully. StrongPoint employees and business units shall only use merit, qualifications, and other professional criteria as a basis for employee-related decisions, such as recruitment, training, performance, compensation, and promotion. We strive to develop programs and actions to encourage a diverse organization based on the principle of equitable opportunities. StrongPoint is committed to the principles of non-discrimination and does not tolerate any form of harassment or bullying in the workplace.
We are working to ensure equal opportunities for all employees and prevent discrimination based on gender, pregnancy, leave in connection with childbirth or adoption, care responsibilities, ethnicity, religion, belief, disability, sexual orientation, gender identity, gender expression, or combinations of these grounds globally, and shall seek to prevent harassment, sexual harassment, and gender-based violence.
All figures presented are for the Norwegian company StrongPoint ASA, including all subsidiaries.
We use our employee engagement surveys, StrongPoint Peakon eNPS pulse surveys, to identify and monitor risks relating to diversity and inclusion. We also use the internal grievance mechanism AlertLine to assess the risk of discrimination and harassment in the organization and track relevant employee data from our core employee system.
Our Peakon survey also allows us to assess employee engagement and psychosocial risk indicators across different demographics, including gender, age, and roles.
The index consists of seven diversity, inclusion, and equality related questions. The Peakon index score is part of the Executive Management KPIs. The business areas are expected to develop targets based on their scores, act on the findings from the risk assessments, develop roadmaps, ensure responsibility is taken, and report progress to eliminate discrimination. Every quarter the executive team oversees trends and analyze root causes. D&I is embedded in all people processes, including recruitment, onboarding,
and succession planning, and is included in all employee and leadership development programs.
We have identified critical risk areas/obstacles for equality, diversity and discrimination to be:
Recruiting employees from various countries, backgrounds, and cultures may challenge how we communicate and follow up with employees. Regarding leadership, poor gender balance can create a perception of unequal career development opportunities and represent a talent retention risk. We also see that StrongPoint's growth strategy, combined with a performance-driven culture, might create high expectations and workloads for employees, making work-life balance challenging for some.
On recruitment, we have worked actively to improve gender balance on all levels/departments/ countries and promote the recruitment of qualified individuals with disabilities or special needs requirements.
On Culture and Leadership, we have introduced new corporate values in 2022 (see page 5), and followed up on management culture awareness training locally. We have ensured gender balance at all leadership events and improved diverse leadership teams through systematic succession planning.
On Work-life balance, we have promoted and evolved a culture of flexibility in the workplace, including giving guidelines on Working from Home (WfH). We are continuously tracking our population regarding work-life balance, and our 2022 engagement survey showed increased scores in most BUs in this area.
Locally we have initiatives related to the celebration of diversity days to raise awareness and improve the inclusion of underrepresented groups (Pride, International Women's Day, World Mental Health Day). We have benchmarked executive payments in relation to gender diversity.
During the past year, we have continued to focus on aligning our policies across the different business units and within the countries of operation. We now track recruitment of all senior positions and have aligned our pay-forperformance practices.
We assess the compensation and benefit equality as part of the yearly salary review and conduct a benchmark survey. We found only minor disparities in 2022 and have adjusted them individually. We have as planned established pension and insurance coverage in Spain, and in 2023 we will continue the implementation in ALS StrongPoint (UK).
In 2022 we moved to new offices in Täby, Madrid, and Barcelona that is much more adapted for disabled employees. We will in 2023 move our offices in Norway and will focus on making them equally accessible.
StrongPoint has steadily progressed in the D&I area the past years and is satisfied with the trend. In 2023 the company will especially focus on D&I measures of the newly acquired ALS StrongPoint. Average age of employees in StrongPoint is 42.7 years in 2022 (41,9 years in 2021). With female average age of 42.8 years old and males 42.6. Average employee turnover in 2022 was 12,7%, back to a more normalized level after being 26,4% in 2021 due to M&A.
| SP AB | SP S.L.U. SP E-com AB | SP AS | SP Retail Ltd | ALS UK ALS Irland ALS Bulgaria SP ASA | SP UAB Group |
SUM StrongPoint |
|||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Average FTE: | 93 | 32 | 41 | 57 | 2 | 52 | 7 | 29 | 4 | 192 | 508 |
| Number of employees per 31.12.2022 | 89 | 30 | 39 | 58 | 3 | 56 | 8 | 28 | 4 | 196 | 511 |
| Number of FTE per 31.12.2022 | 89 | 30 | 38,8 | 57,8 | 3 | 52 | 7 | 28 | 4 | 193 | 502,6 |
| Sick leave | 4.0% | - | 2.3% | 2.9% | - | 0.9% | 0.5% | 3% | - | 0.2% | 1.6% |
| Number of women | 17 | 7 | 11 | 9 | 0 | 9 | 1 | 13 | 2 | 42 | 111 |
| Average salary men | 481 | 367 | 631 | 720 | 1 811 | 462 | 539 | 252 | 2 308 | 431 | |
| Average salary women | 467 | 400 | 544 | 533 | - | 388 | 277 | 104 | 1 605 | 376 | |
| Part time men | 0 | 0 | - | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
| Part time women | 0 | 1 | 1 | 1 | 0 | 3 | 1 | 0 | 0 | 3 | 10 |
| - Of which number of involuntary part-time female employees 31.12 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| - Of which number of involuntary part-time male employees 31.12 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Temporary employees | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||
| Parental leave | 9/6,43 weeks |
1/18 weeks |
11/6,43 weeks |
0 | 0 | 2/24 weeks |
0 | 0 | 0 | 12/22 weeks |
35/13,1 weeks |
Table: Measures in 2022, targets and performance.
StrongPoint policy is that all employees shall receive a total compensation that is competitive and aligned with local industry standards. The compensation should also be performance-oriented, transparent, fair and objective. Salaries in the organisation are reviewed regularly (minimum every second year). Positions and pay grades are established and compared both on a group and individual level.
No significant gender-pay differentials were found, and this corresponded with the general assessment of the previous years. Still, we adjusted salaries to approximately 15 employees to align them with relevant pay groups. Employees earning collective negotiated wages in Sweden also had no significant gender-pay differentials. When setting up and comparing pay groups we looked at and compared the need for knowledge, problem-solving, accountability, and the overall working conditions for every position. Each employee's base salary, benefits, pension cost, short and long-term incentives were assessed (total remuneration).
The average salary of men was NOK 504,000 (NOK 517,000 in 2021), and women NOK 411,000 (NOK 417,000 in 2021). The drop in average salaries is caused by the acquisition of ALS StrongPoint.
The Board of Directors are required to, in accordance to the Public Limited Liability Companies Act § 6-16 a and b and regulation 11.12.2020 no. 2730, prepare principles and report on remuneration to the Chief Executive Officer (CEO) and other senior executives. StrongPoint presents this report as a separate document to the Annual General Meeting, and it is published on our webpages.
| Level/ Employee groups |
Female | Male | Total | Female average total remu neration in percent of the median |
Male average total remu neration in percent of the median |
|---|---|---|---|---|---|
| 10-12 | 13 | 25 | 38 | 100% | 99% |
| 13 | 12 | 64 | 76 | 93% | 102% |
| 14 | 32 | 79 | 111 | 96% | 102% |
| 15 | 26 | 80 | 106 | 97% | 100% |
| 16 | 12 | 68 | 80 | 105% | 102% |
| 17 | 11 | 29 | 40 | 99% | 106% |
| 18-25 | 5 | 51 | 56 | 94% | 102% |
Table: The average salary of men was NOK 504,000 (NOK 517,000 in 2021), and women NOK 411,000 (NOK 417,000 in 2021). The drop in average salaries is caused by the acquisition of ALS StrongPoint.
| Reference/Target | 2021 goals | Status | 2022 goals | Status | 2023 goals | Key actions |
|---|---|---|---|---|---|---|
| ENVIRONMENT AND CLIMATE 1.1 |
Start quarterly reporting on Scope 1 and 2. |
Started: The company has continued a limited reporting in 2021, using Fjordkraft's calculation tool (www.klimahub.no) |
StrongPoint will start reporting on scope 3 in 2022. |
Reported on scope 3 in 2022. |
Increase accuracy on scope 3 upstream reporting |
Invove 3rd part experts, and introduce a new GHB reporting tool |
| ENVIRONMENT AND CLIMATE 1.2 |
Start reporting on waste generation and waste man agement for all production sites and warehouses. |
Not started: No relevant production sites are left in StrongPoint (due to divestments of the Cash Security and Labels businesses). Warehouses in Sweden follow ISO incl waste management protocol. |
StrongPoint intends to implmenet similar in other office locations. |
All BU reported except BU Norway |
Include Norway when moving to new offices in Q2 2023 |
Involve facility owner |
| ENVIRONMENT AND CLIMATE 1.3 |
Start mapping eligible activities as described in the EU taxonomy. |
Basic mapping performed. | Full taxonomy reporting | Include taxonomy in annual report 2023 |
||
| ENVIRONMENT AND CLIMATE 1.4 |
StrongPoint will review its environmental policies with a view to make updates where we can improve and strengthen including: • Selling or giving away used equipment and furniture for reuse • Providing the option to charge private electric cars at the workplace • Preferance to purchase electric cars • Avoid using promotional materials and giveaways that are made of plastic, non-recyclable, or are single usage items. |
Agreed on guidelines. Usage of hybrid and electric cars have started. Increased charging capacity at Strong Point facilities. |
Introduce incentives to use public transport for employees in Norway. |
Involve employees in the process of moving to a new HQ office in Norway |
||
| ENVIRONMENT AND CLIMATE 1.5 |
Evaluate off-setting or buying climate quotas. |
Protocols and related cost evaluated. StrongPoint will monitor and gather more insight from comparable Norwegian companies. |
Evaluate off-setting or buy ing climate quotas related to Scop1 and Scope 2. |
Proposal to be presented before the Management and the Board of Directors |
||
| ENVIRONMENT AND CLIMATE 1.6 |
Make local plans and product reports on sustainability impact. |
Not adressed due to lack of local resources |
Plan and test Environmental Product Declaration (EPD) on two of StrongPoint products |
Introduce a EPD program holder |
Our main indicators related to our three key prioritized sustainability focus areas:
Our main indicators related to our three key prioritized sustainability focus areas:
Establish e-learning
| and learning material, and introduce e-learning. |
platform |
|---|---|
| Implement a high risk supplier survey (part of the Transparancy act folow-up process) |
Introduce a supplyer due dilligence survey tool |
| Update our CoC for suppliers |
Update and distribute |
| Reference/Target | 2021 goals | Status | 2022 goals | Status | 2023 goals | Key actions |
|---|---|---|---|---|---|---|
| PEOPLE AND WORKING ENVIRONMENT 2.1 |
Review and update the Code of Conduct according to the UN Global Compact principles as well as the new company core values. |
Completed: In compliance with the relevant guidelines. |
||||
| PEOPLE AND WORKING ENVIRONMENT 2.2 |
Number of (new) employees who has signed Code of Conduct as part of employment contract. |
Completed: Now part of our standard employment agreements. |
Provide training to employees in the Code of Conduct. KPI: 95% of employees should have undergone such training at the end of 2022. |
Part of onboarding of new employees. |
Update the CoC document and learning material, and introduce e-learning. |
platform |
| PEOPLE AND WORKING ENVIRONMENT 2.3 |
Undertake risk assessment screening of suppliers and partners for corruption risk (KPI: share of suppliers and partners per risk category). |
In progress: Risk assessment is part of the procurment process which is still an ongoing project. |
KPI still to be monitored and agreed upon. |
Implemented screening crterias as part of implementing new Transparancy Act. |
Implement a high risk supplier survey (part of the Transparancy act folow-up process) |
|
| PEOPLE AND WORKING ENVIRONMENT 2.4 |
Develop supplier guide lines for anti-corruption and business ethics (KPI: Share of suppliers who has signed anti-corruption guidelines). |
Completed: Now part of StrongPoint Code of Conduct that all suppliers accept as part of the contract signing. |
KPI: Share of suppliers who has signed anti-corruption guidelines 90% at the end of 2022. |
All new signed contracts are compliant. |
Update our CoC for suppliers |
|
| PEOPLE AND WORKING ENVIRONMENT 2.5 |
Implement an external whistle blowing channel. |
Not started | Planned for 2022. | Cancelled because of very limited number of reported cases (only two in 2022). Focus on the internal program. |
||
| PEOPLE AND WORKING ENVIRONMENT 2.6 |
Implement new systems for stock controls and relevant audit and monitoring. |
Improved process implemented in Spain |
||||
| PEOPLE AND WORKING ENVIRONMENT 2.7 |
Measuring and improving employee engagement (KPI: average employee engagement/employee satisfaction score). |
Completed: Employee engagement has increased steadly in the past two years and is now among top 25% of technology companies. |
Continue the positive trend with a long term abition to be among the top 15% of technology companies. |
With the acquisition of ALS StrongPoint the score is down to the "top 25% of technology companies" benchmark. |
Increased focus on Peakon actions in ALS StrongPoint and in Sweden |
and Sweden. |
| Increased focus on Peakon |
|---|
| actions in ALS StrongPoint |
| and in Sweden |
Recruit HR resources in UK and Sweden.
Our main indicators related to our three key prioritized sustainability focus areas:
| Reference/Target | 2021 goals | Status | 2022 goals | Status | 2023 goals | Key actions |
|---|---|---|---|---|---|---|
| PEOPLE AND WORKING ENVIRONMENT 2.8 |
Reduce employee turnover rate (KPI: employee turnover rate). |
In progress: The employee turnover rate in 2021 was 9.0%, down from 10.5% in 2020. |
Continue focusing on software developers and tech employees in the Baltics due to relatively high turnover. |
Achieved a decline in turnover in 2022 due to economic macro situation. |
||
| PEOPLE AND WORKING ENVIRONMENT 2.9 |
Maintain a low employee absence rate (KPI: employee absence rate below 3%). |
In progress: Total sick leave in the company was at 1.9% in 2021, compared to 2.0% the previous year |
||||
| PEOPLE AND WORKING ENVIRONMENT 2.10 |
Develop a Health and Safety documentation. |
Completed: Established documentation in all business units. |
||||
| PEOPLE AND WORKING ENVIRONMENT 2.11 |
Establish common training and reporting standards across all business units. |
In progress: searching for a platform. |
Establish a employee e-learning/training portal in 2022. |
Vendor selected. Basic learning programs in development. |
Launce of new e-learning portal |
Content development |
| PEOPLE AND WORKING ENVIRONMENT 2.12 |
Implement health insurance for employees in Spain. |
In progress: Assessed but postponed because of busi ness challenges in Spain. |
Implement health insurance for employees in Spain. |
Established for all employ ees |
Implement for Joint Venture company in Spain |
Extend rights to the planed JV |
| PEOPLE AND WORKING ENVIRONMENT 2.13 |
Upgrade or move several office spaces to more appropriate locations. |
In progress: Completed in Sweden (Taby), Spain (Barcelona) and ongoing in Riga. |
Upgrade office in Norway, Move office in Madrid. Find new office locations in Mölendal. |
Planned move in Norway. Moved in Mölendal and in Madrid to new offices. |
Move the Norwegian HQ office |
Involve employees in the HQ move |
| PEOPLE AND WORKING ENVIRONMENT 2.14 |
Systematic tracking of salary to ensure equal pay for men and women. |
Completed: Done on an annual basis in the business units. |
Undertaking a new compensation and benefits survey in 2022. |
Completed | Complete a full C&B benchmark of all employees |
Gather data |
| PEOPLE AND WORKING ENVIRONMENT 2.15 |
Maintain zero incidents of non-compliance with regulations or voluntary codes concerning the health and safety impacts of its products |
Completed: No incidents on non-compliance were registered in 2021. |
Maintain zero incidents of non-compliance |
Completed: No incidents on non-compliance were registered in 2022. |
||
| PEOPLE AND WORKING ENVIRONMENT 2.16 |
Obtain ISO certification for StrongPoint Sweden's Grums facility. |
Completed: ISO cerification achieved. |
Maintain ISO certification achieved. |
Completed: ISO cerification maintained |
Our main indicators related to our three key prioritized sustainability focus areas:
| Reference/Target | 2021 goals | Status | 2022 goals | Status | 2023 goals | Key actions |
|---|---|---|---|---|---|---|
| PEOPLE AND WORKING ENVIRONMENT 2.17 |
Make a risk matrix and HSE guide on our AutoStore automation solution. |
Completed | Establish customer training program for AutoStore HSSE |
Content development | ||
| OPERATIONAL SUSTAINABILITY INITIATIVES 3.1 |
Start test pilot at Haugaland and collect data |
Monitor and document energy consumption |
||||
| OPERATIONAL SUSTAINABILITY INITIATIVES 3.2 |
Establish a CO2 eq account for refurbishment of check-outs |
Investigate the upstream- and down-stream delivery of refurbishment projects |
||||
| OPERATIONAL SUSTAINABILITY INITIATIVES 3.3 |
Document the security features of new CashGuard offering in Spain |
Energy prices have been increasing significantly in all markets. We expect the situation to continue into 2023 as the war in Ukraine continues. We target a decrease of 20% in Scope 2 energy consumption, as our consumption related to facilities will decrease as we move to more energy-efficient office buildings.
In the past three years, we have gained a much better understanding of how our value chain impacts our emissions. In 2023 we will focus more on quantifying and setting concrete and actionable reduction targets, including a path to net zero. The overall emission in Scope 1 will continue to increase, but our growth will reduce the impact under Scope 3, so the total emissions will decrease.
Disruptions in the global supply chain have been reduced in the second half of 2022, but we believe it will still have an impact in 2023. StrongPoint will continue to adjust our sourcing models and look for local European suppliers and backup solutions. We don't foresee significant cost impacts of such structural shifts. In 2022 we experienced some delays and adjustments of contract obligations, especially in the Cash Management segment, due to supply chain issues. We expect this to continue in 2023, but with less impact and limited intrusion on our total performance.
Jacob Tveraabak was previously the CEO of Miklagruppen (Bavaria Nordic), director of business development at Rema 1000 and with McKinsey & Company for 12 years. He is also the co-founder of Nabobil.no. Tveraabak has MSc degrees from the Norwegian School of Economics and Bocconi University. He holds 212,246 shares and 600,000 options in StrongPoint privately and through a privately owned company.
Hilde Gilen CFO
Hilde Gilen was previously CFO in both Ahlsell Norway and the oil and gas division of Kongsberg Group, where she in addition to financial responsibilities was heavily involved in M&As. Before that she worked 10 years in PricewaterhouseCoopers. Gilen holds a MSc degree (Siviløkonom) from Nord University. She holds 53,827 shares and 93,750 options in StrongPoint.
Knut Olav Nyhus Olsen SVP People & Organization, Marketing and Communication
Knut Olav N. Olsen was previously the position as Chief People Officer in Canal Digital, Telenor Satellite and Telenor Pakistan. Previously also working as CHRO in Skanska and EVP in ISS Facility Services. Olsen holds a master's degree in law and a finance degree from the University of Bergen, with additional management training from IMD and INSEAD. He is the co-founder and board member of Terrosa Consulting. He holds 13,814 shares and 225,000 options in StrongPoint.
Julius Stulpinas has 15 years of experience within StrongPoint related companies, leading and transforming sales, service, product development organizations and teams. He has MSc degree of Engineering from Kaunas University of Technology and MBA from a consortium of Baltic Management Institute, HEC Paris, NHH Norwegian School of Economics and Copenhagen Business School. He holds 31,094 shares and 225,000 options in StrongPoint.
Chris Mackie's experience is broad and spans Supply Chain, Retail, Workforce, eCommerce and Delivery Management. He has over 20 years of IT software experience and over 10 years proven experience of building and leading organisations for companies such as Metapack, Oracle and Blue Yonder. Additionally he has worked operationally for ASDA (Leading UK Grocery Retailer) where he worked in stores, regionally and for Asda Grocery Home Shopping. He holds 15,936 shares and 75,000 options in StrongPoint.
Gisle Elvebakken SVP Norway
Gisle Elvebakken has worked in sales and management for large Nordic IT-companies such as Visma, Atea and Visolit for over 20 years. Elvebakken holds BSc International Marketing from BI Norwegian Business School. He holds 39,329 shares and 250,000 options in StrongPoint.
Magnus Rosén SVP Sweden
Magnus Rosén has more than 20 years' experience from retail in various management roles, including the role as business director e-commerce at ICA. Magnus have throughout his career predominantly worked with retail management, business development and technology development in the grocery retail space. He holds 9,000 shares and 75,000 options in StrongPoint.
Rimantas Mažulis SVP Baltics
Rimantas Mažulis has 15 years of experience in retail technologies within StrongPoint. During that time, he held various positions in retail solution design & development area. Rimantas Mažulis holds a degree of Engineering Informatics from Kaunas University of Technology (2004) and currently in progress with Executive MBA (2022) master's degree by a consortium of Baltic Management Institute, HEC Paris. He holds 22,806 shares and 225,000 options in StrongPoint.
Lorena Gómez SVP Spain
Lorena Gomez has extensive experience in managing and scaling sales in the retail sector across Europe and has been sales director for the retail technology division at HMY Group, a company she has been with since 2006. Since 2014 she was responsible for the newly formed Retail Technology division at the Group level. Lorena Gomez holds a degree in Industrial Design Engineering from the University of Zaragoza and a Master's degree in Innovation Management. She holds 5,350 shares and 125,000 options in StrongPoint.
Since graduating from a Business and IT Management degree Steve has spent his career in the Retail and Banking sectors specialising in project deployment across various territories. Starting in the UK and Ireland his experience extended Eastern Europe and Australia, completing project delivery in multiple countries simultaneously. Steve has been with ALS for sixteen years, the last eight of those years on the Board of Directors. He holds 0 shares and 75,000 options in StrongPoint.
StrongPoint is a focused retail technology company that provides solutions to make shops smarter, shopping experiences better and online grocery shopping more efficient. With more than 500 employees in Norway, Sweden, the Baltics, UK, Ireland and Spain, and together with a wide partner network, StrongPoint supports businesses in more than 20 countries. StrongPoint provides technology and solutions, service and support, license and professional services to especially grocery retailers. The technical solutions are proprietary or third-party solutions, like Pricer ESL and AutoStore MFC's. StrongPoint is headquartered in Norway and is listed on the Oslo Stock Exchange [ticker: STRO].
No major events have occurred after the balance sheet date.
The Group implemented two new reporting segments in 2022: Nordics and Rest of Europe incl. R&D. In addition, the financial statement includes detailed revenue information for geographic and product segments. Following the acquisition of Air Link Group Ltd, the geographic segment Rest of Europe incl. R&D increased with "UK&Ireland", and the product information segments added the sub-segment "Shop Fitting" reflecting the majority of the operations for Air Link Group.
The Group delivers proprietary solutions within In-store Productivity, E-commerce, Payment Solutions and Checkout Efficiency, as well as tailor-made retail solutions from leading third-party suppliers, including Pricer Electronic Shelf Labels (ESL), POS, ERP and Digi scales and wrapping systems. The group management has in the fiscal year 2022 governed the business based on reported sales revenues, EBITDA and EBIT for the two business areas Nordics and Rest of Europe incl. R&D.
The business segment Nordics currently consist of the operating business units in Norway and Sweden. The revenue also includes some deliveries to other parts of the Nordics like Denmark and Iceland.
The business segment Rest of Europe incl. R&D consists of the operating business units in the Baltics, Spain and UK/Ireland, in addition to partner sales in the rest of Europe and rest of world. The ongoing R&D activities for own products have been allocated to this area.
The 2022 financial statement include two new reporting segments: Nordics and Rest of Europe incl. R&D.
| MNOK | Year | MNOK | Year | |||
|---|---|---|---|---|---|---|
| Nordics | 2022 | 2021 | Rest of Europe incl. R&D | 2022 | 2021 | |
| Norway | 386.1 | 361.6 | Baltics | 204.6 | 173.5 | |
| Sweden | 358.0 | 333.9 | Spain | 76.8 | 67.5 | |
| Total Revenue | 744.1 | 695.5 | UK & Ireland | 241.3 | - | |
| EBITDA | 67.2 | 77.0 | Rest of Europe | 105.7 | 52.0 | |
| - In % | 9.0% | 11.1% | Total Revenue | 628.3 | 293.1 | |
| EBT | 59.5 | 66.0 | EBITDA | 53.9 | 14.6 | |
| - In % | 8.0% | 9.5% | - In % | 8.6% | 5.0% | |
| EBT | 21.1 | -1.9 | ||||
| - In % | 3.4% | -0.7% |
On June 1, 2022, StrongPoint acquired 100% of the shares in Air Link Group Ltd. The business provides construction services, installation of technical solutions, refurbishments and physical indoor and outdoor shop fitting for grocery retailers in UK and Ireland. ALS is widely seen as the partner of choice for installation and service for some of UK's leading grocery retailers. The full year 2022 revenue ended at 360 MNOK, of which 241 was consolidated in StrongPoint, and the company had 92 employees. The purchase price for the shares was 116.5 MNOK, of which 93.6 MNOK was paid as cash and 22.8 MNOK was paid with shares in StrongPoint ASA. A total of 66 MNOK was identified as intangible assets, which will be amortized over the next 5-7 years.
StrongPoint aims to be a workplace with a safe and positive working environment. All employees receive a competitive total compensation aligned with local industry standards. The Group has taken active measures aimed at promoting employees' professional development, preventing sick leave and improving the overall working environment. All employees in the Group have employment contracts that comply with local market standards and legislation.
The Group had 511 employees as of 31 December 2022. Total sick leave in the company were estimated at 1.6% in 2022 compared to 1.8% the previous year. No employees were reported injured and there were no reported accidents during the year.
The company has share incentive programs for the executive management and all the employees. 123,975 shares were distributed in 2022.
The Group aims to be an inclusive workplace with equality between women and men, based on qualifications, without regard to age, religion or origin. The Group's Board of Directors comprises 40% women.
There were 111 women among the Group's 511 employees at the end of the year. StrongPoint is an equal opportunity employer, and diversity and inclusion are imperative to the way StrongPoint does business. More information on the status of gender equality and how we comply with section 26 of the Equality and Anti-Discrimination Act can be found under the ESG section on page 40 of the annual report.
The Group owns intellectual property within cash management, checkout efficiency and e-commerce. StrongPoint continues to invest in and maintain the current solutions, as well as developing and funding new solutions. No development costs were capitalized in 2022.
Historically, the Group's key markets have been robust and stable, as investments in the retail grocery sector has not been significantly affected by financial and macroeconomic changes. So also in 2022, although the company was affected by global shortage of some production components, leading to delayed deliveries and decreased gross margins. The Group managed the risk by close dialogue with key suppliers and also used the strong liquidity situation to increase inventory in order to reduce the risk of delay in future deliveries. Following the condemned Russian invasion of Ukraine, energy prices and general inflation increased beyond expectation, and for StrongPoint this also
affected the gross margin negatively.
The Group's operations are exposed to currency risk, and in 2022 this affected the company negatively especially in the Nordics. Currency risk is managed operationally in customer contracts, but there is a time lag between the currency change and the increased (or decreased) price to customers. Receivables and liabilities are exposed to financial risk, which is reduced by a thorough, action-based follow-up on an ongoing basis. These matters also have implications for liquidity risk. The Group has managed liquidity risk by closely monitoring anticipated future operational cash flow, as well as available cash and credit facilities.
StrongPoint has a worldwide Directors' and Officer's liability insurance with a limit of approx. 4% of revenue.
From an overall assessment of customer satisfaction, market position, market demand and financial position, the Board of Directors considers that there is a solid basis for continued operations, and the annual financial statements were prepared with the assumption of a going concern.
In the opinion of the Board, the income statement, balance sheet and notes presented are a true and fair view of the company's position and profit from activities in 2022. The Board of Directors are not aware of any other matters relevant for assessing the company beside what is stated in the annual report.
StrongPoint's policy on corporate governance is presented in the Group's Annual Report and on the corporate website.
The policy contains information pursuant to Section 3-3b of the Accounting Act and the Norwegian Code of Practice for Corporate Governance except some noted deviations.
The Group's long term strategy, ongoing business performance, organizational competence and capacity and capital structure were the main focus of Board meetings in 2022. The Board held 8 scheduled board meetings and 8 extraordinary meetings in 2022. All board members are evaluated as independent, and they participated in all meetings except some very few sick leave absences. The Board performs every year a board evaluation survey, which is discussed and acted upon to constantly improve the work of the Board of Directors. Parts of StrongPoints Group management team are also invited to participate in the survey, and the results are also shared with the nomination committee. There were no transactions between the Board or Management and the Business (related parties) in 2022.
The Board has three subcommittees: an audit committee, a nomination committee and a remuneration committee. The audit committee comprises two Board members. The committee reviewed quarterly and annual financial statements, as well as the Group's main risk categories. The committee also assessed its internal controls, including internal controls related to financial reporting, as well as the quality of risk management systems and audit work. The nomination committee consists of three external members, all members are shareholders in the Group. The remueration committee consists of two Board members. The remuneration committee continues to evaluate and benchmark the total remuneration program every year.
Corporate social responsibility and sustainability are integral to StrongPoint's operations. This means economic, social and environmental aspects are considered before making decisions. Broad confidence and credibility are essential for StrongPoint to meet its business objectives. The Group has achieved this by creating and maintaining a culture built on high ethical standards and integrity. The policy includes information pursuant to Section 3-3c of the Accounting Act.
StrongPoint's operations follow established public procedures to prevent pollution of the external environment and comply with relevant international and local legislation and standards. Some subsidiaries sell and store products classified as environmentally hazardous if the waste is not managed in accordance with applicable regulations. Subsidiaries have contracts with authorised return and recycling companies. There were no emissions of environmentally harmful substances in 2022. StrongPoint's customers have the option to return products at the end of their life to ensure they are handled in an environmentally responsible manner. StrongPoint´s focus on environment, social, and governance (ESG), are reported separately in the annual report. In 2022, the main topics were Employee working environment, health and safety, product innovation, quality and safety, Corporate governance including ethics and anti corruption and Environment and climate, including emissions and waste management. During the year, the Group experienced delays in deliveries to customers due to the global shortage of components, and decreased profit margins following high inflation and energy prices.
StrongPoint works actively with suppliers to understand how climate changes can influence the business and try to reduce the risk by identifying and implementing alternative components, reduced production redundancy and reduce emission by searching for more optimal transportation routes.
StrongPoint has zero tolerance for corruption. This applies to all employees, companies and persons acting on behalf of the Group. StrongPoint's zero tolerance means, among other things, that no gratuities may be offered or received, beyond a symbolic value, and no benefits may be received on behalf of either the Group or any employee personally.
The Group has whistleblowing procedures in place. It is important to report policy violations or inappropriate conduct in a responsible manner.
The audit committee is responsible to handle whistleblowing incidents reported directly to the Board.
As of 31 December 2022, StrongPoint had a share capital of NOK 27,830,778 allocated to 44,888,352 shares with a face value of NOK 0.62. At the end of 2022, the Group held 584,518 treasury shares at an average price of NOK 20.78. shareholders represented 54.2 per cent of total share capital. At the end of 2022, 283 shareholders owned 10,000 shares or more.
There were 2,545 shareholders in the company at the end of 2022. The 20 largest
StrongPoint is not aware of any agreement between shareholders limiting the ability to trade shares or exercising voting rights represented by shares in the Group.
StrongPoint's E-Commerce and In-Store solutions and services are well positioned at the crossroads of multi-channel retailing: online growth and costcutting in retail stores.
From a North European and grocery focused starting point, StrongPoint will pursue a three-step approach to geographical expansion and growth:
As a foundation for creating shareholder value, StrongPoint growth strategy is based on profitable and organic growth, M&A initiatives, cost control and a solid balance sheet, targeting revenues of NOK 2.5 billion and EBITDA margins of 13-15% in 2025.
The 2025 revenue ambition of NOK 2.5 billion demonstrates the significant opportunities in the key markets. However, the Board of Directors underlines that this growth is not expected to be linear, and investments in products and sales resources will influence the EBITDA. The overall growth ambitions can further be influenced by global component shortages, supply chain delays, pandemic restrictions and other international macro instabilities. No development costs were capitalized in 2022. A financial loan of MNOK 14 was granted to a joint venture company in Spain, financing a development project within cash management. The Board also acknowledge that the time from pilots to roll-outs and scale-up for new solutions is difficult to predict, and this might sometimes be reflected in rather significant variations in the reported numbers between the quarters.
StrongPoint ASA is the holding company for the Group's legal entities. The company is listed on the Oslo Stock Exchange under the ticker "STRO". The parent company, StrongPoint ASA, has four employees. StrongPoint ASA's profit for the year was negative 2.1 MNOK compared to a profit of 186.3 MNOK in 2021.
The Board of Directors will propose to the general meeting the following allocation of profit for the year in the parent company StrongPoint ASA for 2022:
Profit for the year:
NOK -2,057,206.81
Proposed ordinary dividend: NOK 39,873,450.60, equivalent to NOK 0.90 per share.
Transferred from other equity: NOK 41,930,657.41
Rælingen, 20 March 2023
Morthen Johannessen Chairman
Ingeborg Molden Hegstad Director
Cathrine Laksfoss Director
Klaus de Vibe Director
Peter Wirén Director
Morthen Johannessen has more than 20 years' experience as CEO/Managing director of international businesses. In Tomra he first served as CEO for the European business, and later as Group COO & head of the Global Business Development division. Prior to Tomra Morthen was CEO of Pepsico`s beverage business in Western-Europe. He currently works as an industrial advisor and professional board member of a number of companies in various industries. Johannessen holds a Master of Business Administration (HD) from CBS, Copenhagen. He has been on the Board of StrongPoint since April 2016, and Chairman from April 2018. He holds 105,662 shares in StrongPoint.
Ingeborg Hegstad has 20 years of experience from management consulting, including McKinsey & Company and Egon Zehnder. Since 2015 Hegstad has been a partner in Imsight AS, offering strategy and leadership advisory to executives, teams and organizations. She has experience from the Board of Directors of Cxense ASA (2017- 2019), Q-Free ASA (2018-2021) and Cyviz ASA (2021-onwards). Hegstad holds a Master of Business and Administration from Norwegian Business School BI (2000). She has been a Board member in StrongPoint since April 29, 2020. She holds 22,365 shares in StrongPoint.
Klaus De Vibe has more than 20 years' experience from finance and investment operations, including with IK Investment Partners and Morgan Stanley. Since 2009, he has been managing director of the investment company Strømtangen AS. De Vibe has a MSc specialising in finance and financial economics from the Norwegian School of Economics. He has been a member of the Board of StrongPoint since 28 October 2011. He holds 92,491 shares in StrongPoint.
Cathrine Laksfoss is CEO of Schibsted Ecommerce & Distribution as, and head of Ecommerce development across Schibsteds companies and Schibsteds distribution activities. She has led the transformation of the traditional newspaper distribution to an ecommerce growth group by founding and scaling growth companies. She is Chair of Boards in Helthjem Netthandel AS, morgenlevering. no, Distribution Innovation AS and serves on the boards of Bookis.no and Dooris ab. She has previous experience from Posten Bring and management consulting and holds an MBA from HEC Paris and a Masters degree in marketing from the Norwegian Business School. She has been a Board member in StrongPoint since April 28, 2022. She holds1,974 shares in StrongPoint.
Peter Wirén has 20 years' experience from the payments and retail technology industry as CEO and executive vice president of Teller, Nets and Bambora. He has extensive experience of managing change processes, preparing and implementing growth strategies and handling acquisitions and mergers in international markets. Wirén currently works as a consultant and PE advisor, and he has been a member of the board of StrongPoint since 24 April 2018. He holds 33,345 shares in StrongPoint.
Good corporate governance is vital to the success of StrongPoint ASA. Thus, corporate governance is a key concern for StrongPoint's Board and employees, and in StrongPoint ASA's relations with its subsidiaries. The Board has reviewed and updated the company's corporate governance practice. It is in line with the Accounting Act, section 3-3b and the Norwegian Code of Practice for Corporate Governance, except where deviations from the Code are noted. The presentation adheres to the same order of topics as the fifteen items in the Code.
StrongPoint is compliant to all item in the code except item 3: The board has an authorization to make an overall capital increase of up to 9,000,000 shares that is not limited to a defined purpose. The shareholders' preferential rights according to cf. section 10-14 of the Public Limited Liability Companies Act can be disregarded. The board has authorization to acquire up to 4,400,000 own shares that is not limited to a defined purpose.
StrongPoint ASA's corporate governance principles are determined by the Board of Directors and are set forth in the company's management documents. The Board's role is based on the principle of independence from the executive management and the principle of equality and responsibility towards the company's shareholders. The company's shares are freely tradable, and the Board/executive management considers it a priority to focus on activities that strengthen the liquidity of its shares. The company's shareholder policy is based on the principle of one share – one vote. Related to potential acquisitions and restructuring situations, the Board will exercise particular concern so that all shareholders' investments and interests are considered closely. One of the Board's main tasks is to ensure that the company is based on an optimized capital structure. Equity transactions, including authorizations for share capital increases, are to be justified in terms of extent, form and timing. The Board and executive management must ensure that the company's information policies ensure that information regarding the company is published correctly, comprehensively and timely, contributing to a correct valuation of the company's shares. Further, the information policy should give shareholders the best possible foundation for decisions related to investments and voting at general meetings.
The group's operations shall be conducted in accordance with the company's values, ethical guidelines and guidelines for social responsibility determined by the Board and Executive Management. In addition we shall through our activities contribute to a responsible business conduct. StrongPoint ASA's guidelines are presented on the company's website.
The company's business objective is described in the company's articles of association. StrongPoint is a retail technology company that provides solutions to make shops smarter, shopping experiences better and online grocery shopping more efficient. The business objective ensures that shareholders have control of the business and its risk profile, without limiting the Board or management's ability to carry out strategic and commercially appropriate decisions within the defined purpose. The articles of association of StrongPoint ASA are presented on the group's website: strongpoint.com. The company's objectives and main strategies are presented in the annual report.
The group's equity as of 31 December 2022 amounted to 507.2 MNOK corresponding to an equity ratio of 51.5 per cent.
The company's share capital is NOK 27,830,778.24, divided into 44,888,352 shares with a nominal value of NOK 0.62.
StrongPoint's shareholders should over time get a competitive return on their investment through a combination of cash dividends and increased value of their shares.
When deciding the annual dividend level, the Board of directors will take into consideration expected cash flow, investments in organic growth, plans for growth through mergers and acquisitions, and needs for appropriate financial flexibility.
In addition to cash dividends, StrongPoint ASA may buy back shares as part of its total distribution of capital to the shareholders.
The Board's proposals for future Board authorizations accord with the recommendations with two exceptions. The first concerns the Board's authorization to increase share capital by up to 9,000,000 shares, which is not limited to a defined purpose.
Secondly, the Board has an authorization to acquire treasury shares at par value of up to NOK 2,728,000 and an overall capital increase of up to 4,400,000 shares. The authorization is not limited to a defined purpose.
The Board has asked the General Meeting for these authorizations to increase the group's maneuverability.
Both authorizations are valid until the next general meeting or 30 June 2023, whichever comes first.
The company has a single class of shares, and all shares carry the same rights related to the company. Equal treatment of all shareholders is essential. Transactions involving the company's own shares are executed on the Oslo Stock Exchange, except for the repurchase of minor shareholdings from
shareholders with 500 or fewer shares. In the event of material transactions between the company and a shareholder, Board member, member of executive management, or a party closely related to any of the beforementioned, the Board will ensure that independent valuations are made available.
Board members and members of executive management shall report to the Chairman of the Board and the group CEO if they directly or indirectly have significant interests in agreements entered into by StrongPoint ASA or companies in which StrongPoint ASA has significant interests. Additional information on transactions with related parties appears in note 18 in the consolidated accounts. Existing shareholders shall have pre-emptive rights to subscribe for shares in the event of share capital increases, unless otherwise indicated by special circumstances. If the pre-emptive rights of existing shareholders are waived in a share capital increase, the reasons for this waiver shall be explained by the Board of directors and be published through the Oslo Stock Exchange distribution system and on the company website.
StrongPoint ASA's shares are freely negotiable. There are no restrictions on transferability in the company's articles of association.
The company encourages all shareholders to participate at general meetings. Notices of general meetings and comprehensive accompanying information are made available to shareholders on the company's website and sent to shareholders within the deadlines stated in the Norwegian Public Limited Liability Companies Act. The deadline for shareholders to register to attend a general meeting is set as close to the date of the meeting as possible, normally two or three days prior to the meeting. The company is of the opinion that no adequate systems for handling electronic participation at general meetings are currently available. Thus, the Board has decided not to allow such participation at StrongPoint ASA's general meetings. From 2020, the articles of association allow for digital execution of general meetings, and regulates that votes in advance can be registered. This allows for improved shareholder engagement cross borders.
When the general meeting is held digitally, the shareholders can send in votes in advance. Shareholders who are unable to attend a meeting may vote by proxy.
The company has prepared forms that enable shareholders to vote on individual issues. Procedures for using such forms are available on the company's website. The company does not appoint an independent proxy to vote on behalf of shareholders. The company considers that shareholders' interests are adequately safeguarded by the option to participate through an appointed proxy or voiting in advance. Procedures for attendance registration and granting proxy are presented in the notice, on the attendance and proxy form and on the company website.
Board members, the chairman of the nomination committee, and the company's auditor are encouraged to attend general meetings. The general meeting is led by the Chairman of the Board or someone elected by the general meeting.
The nomination committee focuses on composing a board that works as a team, that meets legally established regulations as to equal gender representation on boards of directors, and whose members' experience and qualifications complement each other. Minutes of general meetings are published as soon as practical via the Oslo Stock Exchange distribution system and on the company website.
The company has a nomination committee, as stated in the articles of associations, which consists of: Svein Jacobsen (Chairman), Audun Nordtveit and Inger Johanne Solhaug. The nomination committee consists of no fewer than three members. Each member is normally elected for a two-year period. The composition of the nomination committee should ensure the interests of shareholders and independence from the Board and executive management.
Nomination committee members and its chairman are elected by the company's general meeting, which also determines remuneration payable to committee members.
In accordance with StrongPoint ASA's articles of association, the nomination committee recommends candidates for election to the Board of Directors. In addition, the nomination committee recommends a candidate for Chairman. The nomination committee also makes recommendations on remuneration of Board members. The nomination committee is to justify its recommendations, how it
takes care of the shareholders' and the company's need for expertise, capacity and diversity. Care should be taken that the Board functions effectively as a cooperative body. Proposals for Board candidates are to be submitted in reasonable time before the general meeting. The annual general meeting will, in accordance with the Code of Practice, be presented with the guidelines governing the duties of the nomination committee for approval. The duties of the nomination committee are found on the company website.
In accordance with the company's articles of association, the Board comprises between 5 and 11 members. Board members are elected for a period of one year. The Board members are independent of the company's executive management and its significant business associates. No member of the company's executive management is a Board member. CEO Jacob Tveraabak has ownership interests in StrongPoint ASA privately and trough his company Celo Industries AS. The current composition of the Board is presented on the company website. The Board members' expertise is also presented. In 2022, the Board of Directors had 16 meetings.
Board members' shareholdings are presented in note 9 to the consolidated accounts. Board members are encouraged to invest in the company's shares, and also receive shares as part of the remuneration. The Board members represent a combination of expertise and experience from finance, industry and organizations. The nomination committee's reasoned proposal for candidates will be presented on the company website.
The Board of StrongPoint ASA annually adopts a plan for its work, emphasizing goals, strategies, and implementation. Also, the Board has adopted board instructions that regulate areas of responsibility, tasks and division of roles of the Board, the Chairman of the Board and the Chief Executive Officer. The Board instructions also feature rules governing Board schedules, notice and chairing of Board meetings, decision-making, the Chief Executive Officer's duty and right to disclose information to the Board, professional secrecy, impartiality and other issues. The Board evaluates its own performance and expertise once a year through a survey. The Board has an audit committee, which consists of Chairman of the Board Morthen Johannessen and the Board member Klaus de Vibe. The
Board evaluates the competence of the audit committee members to be sufficient. The audit committee sets the agenda according to the tasks set in Allmennaksjelovens §6-43.
The Board of Directors of StrongPoint ASA is ultimately responsible for the group's business operations and is to ensure that the company maintains solid in-house control practices and appropriate risk management systems tailored to the company's business activities.
StrongPoint ASA is exposed to currency and interest risk, market risk, credit risk and operational risk at its underlying companies. Management of operational risk primarily takes place at each underlying operating company, reported to Group management, and evaluated and handled to the best for the company.
StrongPoint takes an active role on Boards of Directors in subsidiaries. As a rule, all companies have established effective risk management procedures. Management of financial market exposure, including currency, interest and counterparty risk, is presented in greater detail in note 17 to the parent company accounts. StrongPoint has adopted a series of policies to support this, including:
The Audit committee and the Board reviews the company's most important risk areas and internal control systems and procedures, and the main elements of these assessments are presented in the Board of Directors' report. The audit committee also serves as a preparatory group in connection with the quarterly report and reviews the major events, the directors' report, balance sheet, income statement items and notes to the interim financial statements together with the administration before the report is presented to the Board.
Board remuneration reflects the Board's responsibility, expertise, time spent and the complexity of the business. Remuneration does not depend on StrongPoint's financial performance. There are no option programs for any Board members.
20% of gross remuneration to the Board shall be used for share purchases until the value of the shares corresponds to a minimum of one year's gross remuneration. The annual general meeting determines Board remuneration following recommendations by the company's nomination committee. Board members are elected because of their expertise and knowledge. Directors or their related companies should not undertake special assignments for the company in addition to their Board appointments. However, if they do, the whole Board should be informed. Fees for such assignments must be approved by the Board. All remunerations are specified in the financial statement. Additional information on remuneration paid to Board members for 2022 is presented in note 9 to the consolidated accounts.
The Board has adopted guidelines for remuneration of executive management in accordance with section 6-16a of the Norwegian Public Limited Liability Companies Act. The Board of Directors determines the remuneration of the CEO. StrongPoint ASA implemented a Long Term Incentive Program in 2020 represented as a Stock Option program. The program has ambition to both motivate and retain executive management and key personnel to achieve the overall strategic ambitions, and has been granted in the years 2020, 2021 and 2022. The company's guidelines and further information on remuneration for 2022 for members of StrongPoint's executive management is presented in note 9 to the consolidated accounts. Additional information will be shared in a remuneration report to be presented to the General meeting in 2023. Some members of StrongPoint's executive management maintain the company's interests as board members of other StrongPoint companies. They do not personally receive board remuneration for this. StrongPoint has a worldwide Directors' and Officer's liability insurance with a limit of approx. 4% of revenue.
The company has prepared a policy for investor relations (IR), which determines guidelines for contact with shareholders apart from the general meeting. The company's reporting of financial and other information is based on transparency and equal treatment of interested parties.
The long-term purpose of StrongPoint's IR activities is to ensure access to capital at competitive terms for the company and correct pricing of shares for shareholders. These goals are to be accomplished through accurate and timely distribution of information that can affect the company's share price; the company is also to comply with current rules, regulations, and market practices, including the requirement of equal treatment.
All stock exchange notices and press releases are published on the company's website. Stock exchange notices are also available at: newsweb.oslobors.no. All information that is distributed to shareholders is published through the Oslo Stock Exchange distribution system and on the company website.
The company intends to host public presentations of its financial reporting and these meetings are webcasted simultaneously. The company's financial calendar is found on the company website.
In a bid situation, StrongPoint's Board of Directors and management have an independent responsibility to help ensure that shareholders are treated equally, and that the company's business activities are not disrupted unnecessarily. The Board has a particular responsibility to ensure that shareholders are given sufficient information and time to form a view of the offer. The Board of Directors will not seek to hinder or obstruct take-over bids for the company's activities or shares unless there are particular reasons for this. An agreement with the bidder to limit the company's ability to obtain other offerings on the company's shares will only be entered into when it clearly can be attributed to the company and shareholders' common interest. The same applies to an agreement to compensate the bidder if the offer is not completed. Any compensation shall be limited to the cost the bidder has incurred in making the bid. Agreements between the company and provider of importance for the market's assessment of the offer should be made public no later than the alert that the offer is made. In the event of a take-over bid for the company's shares, the company's Board of Directors will not exercise mandates or pass any resolutions with the intention of obstructing the take-over bid unless this is approved by the general meeting following announcement of the bid. If an offer is made for the company's shares, the company's Board of Directors will issue a statement making a recommendation as to whether shareholders should or should not accept the offer. The Board's statement on the offer will make it clear whether the views expressed are unanimous, and if this is not the case it should explain the basis on which specific members of the board have excluded themselves from the Board's statement. The Board will arrange a valuation from an independent expert. The valuation will include an explanation, and will be made public no later than at the time of the public disclosure of the Board's statement.
The auditor participates in the Board meeting that decides the annual accounts. The auditor audit material changes in the company's accounting principles and assessments of material accounting estimates with the Board. Further, the auditor has provided the Board with written confirmation that the requirement of independence is met. The Board and the audit committee meet with the auditor without the presence of representatives of executive management. The audit committee determines guidelines for executive management's access to use the auditor for services other than auditing and receives an overview of services rendered by the auditor to the company. Remuneration for auditing and other services are presented in note 5 to the StrongPoint ASA accounts. Such details are presented to the annual general meeting.
Rælingen, 20 March 2023
Morthen Johannessen Chairman
Ingeborg Molden Hegstad Director
Cathrine Laksfoss Director
Klaus de Vibe Director
Peter Wirén Director
Jacob Tveraabak CEO
Q1 – 27.04 Q2 – 14.07 Q3 – 23.10 Annual General Meeting – 27.04
Webcast will be available at our website www.strongpoint.com from CET 08.30, the same time as the presentation starts.
StrongPoint ASA strives to have an open IR policy towards its shareholders and the market in general. The most important event for shareholder information is the Annual Strategy Update Session during Q1. In addition the group uses its website, meetings and direct communiction to provide investors and analysts with relevant information. Information for shareholders is available at strongpoint.com and ose.no (ticker STRO).
StrongPoint ASA has frequent contact with investors and analysts to provide the best possible information regarding the group's financial situation and development. The market is informed of orders/contracts worth 10 MNOK or more, as well as orders that are considered strategically important.
StrongPoint ASA is a public limited company and is established under Norwegian law. The company is listed on the Oslo Stock Exchange. The Group's issued share capital is NOK 27,830,778 allocated as 44,888,352 shares, each with a nominal value of NOK 0.62, all fully paid and issued in accordance with Norwegian law. The company has one class of shares.
Hilde Horn Gilen CFO Tel: +47 920 60 158 E-mail: [email protected]
Hilde Horn Gilen CFO
| KNOK | Note | 2022 | 2021 |
|---|---|---|---|
| Operating revenue | 3 | 1 372 392 | 981 339 |
| Cost of goods sold | 12 | 850 956 | 560 104 |
| Payroll | 9 | 305 842 | 255 147 |
| Share based compensation | 9 | 5 079 | 6 178 |
| Other operating expenses | 5, 16, 27 | 134 976 | 106 285 |
| Total operating expenses | 1 296 853 | 927 714 | |
| EBITDA | 75 540 | 53 625 | |
| Depreciation tangible assets | 10 | 25 353 | 18 718 |
| Depreciation intangible assets | 11 | 12 840 | 7 403 |
| Total depreciations | 38 193 | 26 120 | |
| Operating profit | 37 347 | 27 504 | |
| Financial expences | 8 | 6 073 | 9 176 |
| Financial income | 6, 8 | 6 891 | 7 571 |
| Total financial items | 818 | -1 605 | |
| Profit before tax | 38 165 | 25 899 | |
| Income tax expense | 26 | 9 060 | 3 542 |
| Net income from continued operations | 29 105 | 22 357 | |
| Profit after tax from discontinued operations | 4 | - | 168 418 |
| Profit/loss after tax | 29 105 | 190 775 |
| KNOK | Note | 2022 | 2021 |
|---|---|---|---|
| Other comprehensive income net of tax | |||
| Items that may be reclassified through profit or loss in later periods | |||
| Currency translation differences | -3 069 | -19 400 | |
| Total comprehensive income | 26 036 | 171 375 | |
| Earnings per share | 23 | 0,66 | 4,32 |
| Diluted earnings per share | 23 | 0,62 | 4,12 |
| Earnings per share from continued operations | 23 | 0,66 | 0,51 |
| Diluted earnings per share from continued operations | 23 | 0,62 | 0,48 |
| KNOK | Note | 31.12.2022 | 31.12.2021 | KNOK | Note | 31.12.2022 | 31.12.2021 |
|---|---|---|---|---|---|---|---|
| ASSETS | EQUITY AND LIABILITIES | ||||||
| Share capital | 24 | 27 831 | 27 513 | ||||
| Intangible assets | 11 | 82 503 | 30 371 | Treasury shares | 24 | -362 | -364 |
| Goodwill | 11 | 159 918 | 124 641 | Other equity | 479 738 | 471 041 | |
| Tangible assets | 10 | 23 755 | 19 031 | Total equity | 507 207 | 498 190 | |
| Right-of-use assets | 10 | 82 698 | 43 241 | ||||
| Associated companies | 6 | 977 | 774 | Long term interest bearing liabilities | 15 | 8 087 | 11 236 |
| Other long-term investments | 7 | 4 001 | 4 001 | Long term lease liabilities | 15 | 59 426 | 25 972 |
| Other long-term receivables | 13 | 15 147 | 15 622 | Deferred tax liabilities | 26 | 20 997 | 8 720 |
| Deferred tax assets | 26 | 20 925 | 17 240 | Total long term liabilities | 88 511 | 45 928 | |
| Total fixed assets | 389 924 | 254 921 | |||||
| Current interest bearing liabilities | 15 | 29 670 | 4 768 | ||||
| Inventories | 12 | 232 124 | 211 256 | Short term lease liabilities | 15 | 21 777 | 16 086 |
| Accounts receivables | 13, 17 | 274 348 | 175 627 | Accounts payable | 147 839 | 101 969 | |
| Prepaid expenses | 13 | 25 731 | 16 646 | Tax payable | 26 | 11 126 | 11 717 |
| Other current receivables | 13 | 16 265 | 13 885 | Public duties payable | 46 072 | 40 954 | |
| Cash and cash ecquivalents | 14 | 47 248 | 174 198 | Other short term liabilities | 22,27 | 133 439 | 126 920 |
| Total current assets | 595 716 | 591 612 | Total short term liabilities | 389 923 | 302 415 | ||
| TOTAL ASSETS | 985 640 | 846 533 | Total liabilities | 478 433 | 348 343 |
| Note | 31.12.2022 | 31.12.2021 |
|---|---|---|
| 24 | 27 831 | 27 513 |
| 24 | -362 | -364 |
| 479 738 | 471 041 | |
| 507 207 | 498 190 | |
| 15 | 8 087 | 11 236 |
| 15 | 59 426 | 25 972 |
| 26 | 20 997 | 8 720 |
| 88 511 | 45 928 | |
| 15 | 29 670 | 4 768 |
| 15 | 21 777 | 16 086 |
| 147 839 | 101 969 | |
| 26 | 11 126 | 11 717 |
| 46 072 | 40 954 | |
| 22,27 | 133 439 | 126 920 |
| 389 923 | 302 415 | |
| 478 433 | 348 343 | |
| 985 640 | 846 533 | |
Rælingen, 20 March 2023
Morthen Johannessen Chairman
Ingeborg Molden Hegstad Director
Cathrine Laksfoss Director
Klaus de Vibe Director
Peter Wirén Director
Jacob Tveraabak CEO
| KNOK | Note | 2022 | 2021 |
|---|---|---|---|
| Ordinary profit before tax continued operations | 38 165 | 25 899 | |
| Ordinary profit before tax discontinued operations | - | 169 755 | |
| Net interest | 3 427 | 1 935 | |
| Tax paid | -17 989 | -17 856 | |
| Share of profit, associated companies | 6 | -388 | -175 |
| Ordinary depreciation | 10, 11 | 38 193 | 33 431 |
| Gain/-loss on sale of tangible assets | 10 | -84 | -793 |
| Change in inventories | -1 146 | -74 046 | |
| Change in accounts receivables | -48 506 | 34 601 | |
| Change in accounts payable | 10 351 | 22 673 | |
| Change in other accrued items | -5 390 | 30 057 | |
| Net cash flow from operational activities | 16 633 | 225 482 | |
| Payments for fixed assets | 10 | -11 144 | -8 794 |
| Payments for long term shares | 6 | -15 | -3 001 |
| Sale of tangible assets (sales proceeds) | 10 | 60 | 738 |
| Net effect acquisitions | 4 | -88 695 | -4 200 |
| Net effect divestment | 4 | 19 641 | 199 888 |
| Interest received | 8 | 772 | 300 |
| Dividends received from associated companies | 6 | 200 | 100 |
| Net cash flow from investment activities | -79 181 | 185 033 |
| KNOK | Note | 2022 | 2021 |
|---|---|---|---|
| Purchase of own shares | 24 | -12 290 | -16 431 |
| Sale of own shares | 24 | 2 011 | 2 796 |
| Payment long and short term debt | 15 | -4 037 | -38 331 |
| Payment of leasing commitments | 15 | -19 503 | -17 267 |
| Loan to joint venture company | 13 | -13 668 | - |
| Change in overdraft | 15 | 20 934 | -208 080 |
| Interest paid | 8 | -4 199 | -2 235 |
| Dividends paid | -34 991 | -31 050 | |
| Net cash flow from financing activities | -65 741 | -310 598 | |
| Net cash flow in the period | -128 290 | 99 917 | |
| Cash and cash equivalents at the start of the period | 174 198 | 75 007 | |
| Effect of foreign exchange rate fluctuations on foreign currency deposits | 1 339 | -727 | |
| Cash and cash equivalents at the end of the period | 14 | 47 248 | 174 198 |
| Other equity | |||||||
|---|---|---|---|---|---|---|---|
| Treasury | Other paid-in | Translation | Share Option | ||||
| KNOK | Share capital | shares | equity | variances | Program | Other equity | Total equity |
| Equity at 31.12.2020 | 27 513 | -52 | 351 262 | 66 252 | 440 | -79 356 | 366 059 |
| Profit for the year after tax | 190 775 | 190 775 | |||||
| Other comprehensive income and expenses 1) | -19 400 | -19 400 | |||||
| Purchase/sale of own shares | -313 | -13 322 | -13 635 | ||||
| Dividend 2020 paid in 2021 | -31 050 | -31 050 | |||||
| Share Option Program | 5 441 | 5 441 | |||||
| Reclassification discontinued operations | -11 028 | 11 028 | - | ||||
| Equity at 31.12.2021 | 27 513 | -364 | 351 262 | 35 824 | 5 881 | 78 076 | 498 190 |
| Profit for the year after tax | 29 105 | 29 105 | |||||
| Other comprehensive income and expenses 1) | -3 069 | -3 069 | |||||
| Purchase/sale of own shares | -308 | -9 970 | -10 278 | ||||
| Dividend 2021 paid in 2022 | -34 991 | -34 991 | |||||
| Acquisition of ALS paid in shares | 318 | 310 | 22 202 | 22 830 | |||
| Share Option Program | 5 420 | 5 420 | |||||
| Equity at 31.12.2022 | 27 831 | -362 | 351 262 | 32 755 | 11 301 | 84 422 | 507 207 |
Other paid in equity are funds which can be allocated by the General Assembly.
1) The balance sheet is converted with the closing rate at the balance sheet date, while the income statement is converted with the average monthly exchange rate. The net effect of the translation is recognized as translation differences in other comprehensive income and expenses. See exchange rates in note 21.
StrongPoint ASA is based in Norway with registered office at Slynga 10 in the municipality of Rælingen. The company is listed at the Oslo Stock Exchange with the ticker STRO. The group's main business is development, sale and implementation of innovative, integrated technology solutions to retailers especially within the grocery segment but also other segments like Do-It-Yourself or pharmacies. During 2022, two new reporting segments was implemented. The "Nordics" consists of sale to Norway and Sweden, while all other geographies including partners were included as "Rest of Europe". The R&D activities are costed as part of the "Rest of Europe"-segment.
StrongPoint ASA acquired the company Air Link Group Ltd in 2022, and the figures for the company with subsidiaries was consolidated from June 1, 2022. Air Link Group Ltd operates in UK and Ireland, and has a subsidiary for internal purposes in Bulgaria. See more information in note 4.
The proposed annual financial statements are prepared with the assumption of a going concern and were adopted by the board and CEO on the date shown on the signed balance sheet. The annual financial statements will be approved by the ordinary general meeting 27 April 2023.
The consolidated financial statements have been prepared in accordance with the EU approved International Financial Reporting Standards (IFRS) and associated interpretations and with additional Norwegian disclosure requirements pursuant to the Accounting Act, Stock Exchange Regulations and stock exchange rules applicable to financial statements completed by 31.12.2022. The consolidated financial statements have been produced based on historical costs with the exception of certain financial instruments, which have been disclosed at fair value.
The group has incorporated all standards and interpretation applying to the financial statements prepared at 31.12.2022.
The consolidated financial statements are presented in thousand Norwegian kroner unless otherwise stated.
In preparing the consolidated financial statements, management makes various accounting estimates and assumptions that form the basis of the presentation, recognition and measurement of StrongPoint's assets and liabilities.
Determining the carrying amounts of some assets and liabilities requires estimates and assumptions concerning future events. Estimates and assumptions are based on historical experience and other factors, which management assesses to be reasonable, but which by their nature involve uncertainty and unpredictability. These assumptions may have to be revised as unexpected events or circumstances may occur. The areas that involve a high degree of estimation uncertainty and usage of management's judgement are described in more detail in note 25.
The consolidated financial statements have been prepared to show StrongPoint Group as a unit. This involves consolidating all companies where StrongPoint has direct or indirect control and elimination of internal transactions and balances. An entity is consolidated from the date when the Group achieve control.
Associated companies are accounted for using the equity method in the consolidated financial statements. Associated companies are entities where the group has significant influence but no control (normally in the case of stakes between 20% and 50%) over financial and operational management. Shares held for sale in associated companies, are valued at fair value, and unrealised increase or decrease in value which earlier have been recognized directly as income and costs in the statement of other comprehensive income, will be reversed. Share of profit after tax in associated companies are recognized included in financial items in the P&L. Investments in associated companies are tested for impairment indicators based on the principles in IFRS 9. If there are objective indications of impairment, impairment tests are conducted in accordance with IAS 28.40. Any other investments are considered to be investments held for sale and are recognized at their fair value and with any change in value through other comprehensive income.
The accounts of individual entities within the group are measured in the local currency in each country (functional currencies). The functional currencies mainly consist of NOK, SEK, EUR and GBP. The consolidated financial statements have been prepared in NOK, which is both the functional currency and the reporting currency of the parent company and the Norwegian subsidiary.
The balance sheet is converted with the closing rate at the balance sheet date, while the income statement is converted with the average monthly exchange rate. The net effect of the translation is recognized as translation differences in other comprehensive income.
Loans from an entity within the group to subsidiaries where repayment has not been planned or is not likely in the foreseeable future, are considered as part of the net investment in subsidiaries, while foreign exchange gains or losses linked to such loans are recognized as translation differences in the statement of other comprehensive income.
Tangible assets are recognized at acquisition cost less any accumulated impairments and depreciation. Upgrades on fixed assets is capitalised. Maintenance is expensed. The acquisition cost of fixed assets are depreciated linearly according to the expected useful life of
the assets, which is:
The useful life of the assets, depreciation method and their residual value are revalued on each balance sheet date and adjusted if necessary. When the balance sheet value of a fixed asset is higher than the estimated recoverable amount, the value is reduced to the recoverable amount. Any profit and loss on disposal of the asset is recorded as the difference between sale price and balance sheet value.
Contracts with a lifetime of more than one year and a value of KNOK 100 are booked as IFRS 16 Leases as both right-of-use assets and liabilities. Operational leases with lower value or shorter lifetime are not booked as leases.
Any fixed assets hired on terms that predominantly sees the transfer risk and rewards to StrongPoint (operational leasing agreements with a lifetime of more than one year and a value of more than KNOK 100 and financial leasing) are activated as fixed assets at the current value of the minimum leasing amount, alternatively at their fair value if this is lower. The commitment is recognized as a short-term and long-term liability.
In the case of any other leasing agreements the hire amount is carried as an operating cost and distributed systematically throughout the leasing period (operational leasing)
Intangible assets are recognized at their cost price, less any accumulated write-downs and amortisation, and are considered periodically for impairment in the case of a fall in value. Any losses in relation to fall in value are recognized as operating costs.
Economic life is either specific or indefinite. Intangible assets with specific lives are amortized over economic life and tested for impairment when there are indications on this. The depreciation method and -period are considered at least yearly. Changes in depreciation method and -period are treated as changes in estimates.
Intangible assets with indefinite lives are impairment tested at least yearly, either individually or as part of a cash-generating unit. Intangible assets with indefinite lives are not amortized. The lifetime is considered yearly with regard to whether the assumption of an indefinite useful life can be defended.
Any differences between the acquisition compensation and the fair value of net identifiable acquired assets are classified as goodwill. In the case of gradual acquisitions made in stages, former assets are valued at fair value at the time of acquisition. Any alterations related to booked value on former assets are recognized in the statement of other comprehensive income.
On the balance sheet date, or when there are indications of impairment, the group evaluates the book value of the goodwill. Expensing of loss due to fall in value is recognized if the recoverable amount related to the entity in question falls below book value of the entity included goodwill.
Negative goodwill related to acquisitions is realized immediately as income on the date of acquisition
Goodwill is not depreciated but evaluated through impairment tests. Identifiable intangible assets from acquisitions are booked at fair value at the time of acquisition. This includes items such as technology, brand and customer relationships. Brand value/trademarks are not depreciated, but they are tested annually for impairment along with goodwill. The other items are depreciated throughout their estimated life cycle.
Product development costs and research into new products and maintenance of existing products are expensed as costs. The expenses include in-house payroll costs and outsourced services. The expenses are reduced with any government grants received related to this development. Government grants (Skattefunn) are recognised where there is reasonable assurance that the grant will be received.
Inventories are measured at its acquisition cost or net realizable value, whichever is lower. The acquisition cost of inventories is based on the "first in, first out method" (FIFO) and includes costs in relation to the acquisition, the cost of production or reworking, as well as any other cost of bringing the inventories to its present location and condition.
The net realizable value is the estimated sale price under ordinary condition less the estimated cost of preparation and completion at the transfer date.
Provisions for obsolescence are, where possible, made on an individual basis. If it is not possible to carry out an individual assessment, provisions for obsolescence are made based on the current inventory turnover rate.
For account receivables, the Group applies a simplified approach in calculating Expected credit losses (ECL). Therefore, the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The carrying amount of the asset is reduced using an allowance account and the amount of the loss is recognized in the income statement.
Provisions are made when there is objective evidence that the Group will not be able to collect the debts. Bad debts are written off when identified. It should, in minimum, be made provisions for: 50% of the amounts ex VAT that has been due for 3 months or more, 80% of the amounts ex VAT that has been due for 6 months or more, 100% of the amounts ex VAT that has been due for 12 months or more. Changes in provision are booked as other operating expenses.
Cash includes cash in hand and cash deposits in banks.
Cash equivalents are held for the purpose of meeting short-term commitments rather than for investment or other purposes. For an investment to qualify as a cash equivalent it must be readily convertible to a known amount of cash and be subject to an insignificant risk of change in value. Therefore, an investment normally qualifies as a cash equivalent only when it has a short maturity of three months or less from the date of acquistion.
The employees in StrongPoint have pension schemes in line with local statutory and obligatory company pension schemes, and are in general recognized as a defined contribution plan.
The group recognizes a provision and a cost for bonus schemes. The group recognizes a provision where there are contractual obligations or a precedent that generates a self-imposed obligation.
The Group has a share program for the executive management where the CEO has the opportunity to buy shares for up to NOK 1,000,000 per year with 20% discount with a 3 years lock-in period and the other members have the opportunity to buy shares for up to NOK 500,000 per year with 20% discount with a 3 years lock-in period. In addition, all permanent employees in a StrongPoint legal entity, are offered to buy shares for up to NOK 35,000 per year with a 20% discount. The eployees can chose to participate in the share program where shares will be allocated 4 times per year and the discount is deducted in the monthly salary deduction, or the employee can buy the shares themselves and get 20% of the amount refunded on their next salary. The discount is recognized as a personnel cost.
Income from the sale of products and services is stated at its fair value, net after deductions for value added tax, returns, reductions and discounts. Intercompany sales are eliminated. Revenue from the sale of products is recorded when an entity within the group has delivered the products to the customer, the customer has accepted the product and the customer's ability to settle the account has been satisfactory confirmed. Services are recorded as income based on the number of hours supplied.
Long-term service and license agreements are recognized linearly over the contracted period. The Group's sales of products and services are considered to be separate performance obligations according to IFRS 15. The assessment is supported by independence between product sales and sales of services and that both types of sales are based on market prices without cross-subsidisation. The performance obligation related to the sale of products is fulfilled upon installation by the customer (at a point in time) and the performance obligation related to service agreements is fulfilled on a linear basis over the contract period (over time).
Tax expenses are linked to the recorded profit and comprise of tax payable and changes in deferred tax.
Deferred tax is calculated on temporary differences between the taxable value and consolidated accounting value of assets and debts, with the exception of goodwill, which is not tax deductible. Deferred tax is calculated by applying tax according to local tax legislation, on the balance sheet date and that are expected to be applied when the deferred tax asset is realized or when the deferred tax is settled. Positive and negative differences are offset against each other. Deferred tax assets are recognized on the balance sheet to the extent that it is likely that future taxable earnings will be present and the temporary differences can be deducted from these earnings.
Financial instruments are classified as debt or equity in accordance with the signed agreement. Interest, dividends, profits and losses related to a financial instrument classified as debts are reported as costs or income. Dividend to StrongPoint shareholders classified as equity will be recognized directly against the equity.
Transaction costs directly linked to an equity transaction are recognized directly through equity after the deduction of tax.
IFRS cost related to share options is booked against equity and social security expenses related to the options are booked as provisions.
The equity-settled share-based option program is as part of the total remuneration plan for the Group management team. The option program is designed to align and incentivize management performance with shareholder value creation and to attract and retain high calibre executive management and key personnel.
The share options will be allocated to the Participants based on company- and individual goal achievement, and at the Board's discretion. The Board will take into consideration the company's goals and strategies as well as targeted performance for executive management, when granting options. The option plan is a performance-based remuneration scheme reflecting the underlying long-term value creation of the company. The limits for the allocation of share options to the Participants is determined by the board, within the board mandates approved by the general meeting. The option scheme will be granted with a strike price equal to the market price at grant. The options will vest over three years, with ¼ vesting after one year, ¼ after two years, and the remaining 2/4 after three years. Any non-exercised options expire five years after grant. If an employee leave the
company before the end of the vesting period, the employee will not vest more options.
A provision is recognized when the group has an obligation (legal or constructive) resulting from a previous event if it is likely that there will be a financial settlement as a result of this obligation, and if the size of the amount can be reliably measured. If the effect is significant the provision is calculated by expected future cash flow and, if relevant, any risks specifically linked to the obligation. Provisions for warranties are recognized when the underlying products and services are sold. The provisions are based on historic warranty cost weighted with probability.
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset's contractual cash flow characteristics and the Group's business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.
For purposes of subsequent measurement, financial assets are classified in two categories:
Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.
Financial assets at fair value are carried in the balance sheet at fair value with net changes in fair value recognised in the statement of profit or loss.
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings and payables. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Group's financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, and derivative financial instruments.
For purposes of subsequent measurement, financial liabilities are classified in two categories:
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.
This is the category most relevant to the Group. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the effective interest rate amortisation process.
Borrowing costs are recorded when the borrowing costs occurs. Borrowing costs are capitalized when directly related to the purchase or manufacture of a qualifying asset.
Government grants are recognized if there are resonable assurance that the company will meet the criteria of the grant and the grant will be awarded. The recognition of operating grants shall be recognized systematically during the grant period.
Fixed assets and groups of fixed assets and debts are classified as held for sale if the carrying amount primarily can be recovered through a sales transaction rather than continued use. Fixed assets classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Costs to sell are the incremental costs directly attributable to the disposal of an asset (disposal group), excluding finance costs and income tax expense.
The cash flow statement is presented using the indirect method. The Group's activities are divided into operational, financing and investment activities.
The company has not implemented new principles for 2022 that have had a significant effect on the accounts.There are no new standards not yet taken into use that is expected to materially impact the financial statements for StrongPoint.
The segment information is based on reported revenues, EBITDA, EBT and assets for the legal entities included in the segment, with eliminations of internal items within the segment. Intra-group items are included in the column Eliminations. Eliminations consists of internal sales with associated costs, intercompany balances, goodwill, intangible assets and other group postings. Internal sales are based on market prices.
Management fee invoiced from StrongPoint ASA to subsidiaries are not included in the segment statements.
Due to sale of the Cash Security business area in December 2020 and the Label business area in 2021, the Group has identified new segments effective from the 1st quarter 2022: Nordics and Rest of Europe incl. R&D. The financial statement also include revenue information for core markets and product information in the current reporting. Following the acquisition of Air Link Group Ltd, the geographic segment Rest of Europe incl. R&D increased with "UK&Ireland", and the product information segments added the sub-segment "Shop Fitting" reflecting the majority of the operations for Air Link Group.
The Group delivers proprietary solutions within In-store Productivity, E-commerce, Payment Solutions and Checkout Efficiency, as well as tailor-made retail solutions from leading third-party suppliers, including Pricer Electronic Shelf Labels (ESL), POS, ERP and Digi scales and wrapping systems. The group management has in the fiscal year 2022 governed the business based on reported sales revenues, EBITDA and EBIT for the two business areas Nordics and Rest of Europe incl. R&D.
| KNOK | 2022 | 2021 |
|---|---|---|
| - Product sale | 338 955 | 283 930 |
| - Service | 87 218 | 81 963 |
| In-store Productivity | 426 173 | 365 893 |
| - Product sale | 164 642 | 102 317 |
| - Service | 119 953 | 122 172 |
| Payment Solutions | 284 595 | 224 489 |
| - Product sale | 115 900 | 116 109 |
| - Service | 39 405 | 34 190 |
| Check Out Efficiency | 155 306 | 150 298 |
| - Product sale | 53 417 | 64 867 |
| - Service | 41 045 | 43 204 |
| E-commerce logistics | 94 461 | 108 070 |
| - Product sale | - | - |
| - Service | 241 311 | - |
| Shop Fitting | 241 311 | - |
| - Product sale | 85 902 | 63 600 |
| - Service | 84 644 | 68 988 |
| Other retail technology | 170 545 | 132 632 |
| - Product sale | 758 815 | 630 822 |
| - Service | 613 577 | 350 516 |
| Total sales revenue | 1 372 392 | 981 339 |
| Nordics | Rest of Europe incl. R&D | ASA/Elim | Consolidated | |||||
|---|---|---|---|---|---|---|---|---|
| KNOK | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 |
| - Product sale | 269 709 | 248 283 | 269 709 | 248 283 | ||||
| - Service | 116 385 | 113 138 | 116 385 | 113 138 | ||||
| Norway | 386 093 | 361 420 | 386 093 | 361 420 | ||||
| - Product sale | 225 058 | 191 709 | - 7 170 | 225 058 | 184 539 | |||
| - Service | 132 916 | 142 238 | 132 916 | 142 238 | ||||
| Sweden | 357 974 | 333 947 | -7 170 | 357 974 | 326 777 | |||
| - Product sale | 100 241 | 94 109 | 100 241 | 94 109 | ||||
| - Service | 100 368 | 79 423 | 100 368 | 79 423 | ||||
| Baltic | 204 610 | 173 532 | 204 610 | 173 532 | ||||
| - Product sale | 60 196 | 53 728 | 60 196 | 53 728 | ||||
| - Service | 16 556 | 13 796 | 16 556 | 13 796 | ||||
| Spain | 76 752 | 67 524 | 76 752 | 67 524 | ||||
| - Product sale | - | - | ||||||
| - Service | 241 311 | 241 311 | - | |||||
| UK & Ireland | 241 311 | 241 311 | - | |||||
| - Product sale | 103 611 | 50 163 | 103 611 | 50 163 | ||||
| - Service | 2 040 | 1 923 | 2 040 | 1 923 | ||||
| Rest of Europe | 105 652 | 52 085 | 105 652 | 52 085 | ||||
| - Product sale | 494 767 | 439 992 | 264 048 | 198 000 | - 7 170 | 758 815 | 630 872 | |
| - Service | 249 301 | 255 376 | 364 276 | 95 141 | 613 577 | 350 516 | ||
| Total sales revenue | 744 068 | 695 368 | 628 325 | 293 141 | -7 170 | 1 372 392 | 981 339 | |
| EBITDA | 67 224 | 77 030 | 53 868 | 14 596 | -45 553 | -38 001 | 75 540 | 53 625 |
| EBT | 59 524 | 66 021 | 21 141 | -1 942 | -42 499 | -38 180 | 38 165 | 25 899 |
| Assets | 387 016 | 384 416 | 398 513 | 293 928 | 200 111 | 168 189 | 985 640 | 846 533 |
| Liabilities | 178 741 | 198 442 | 315 804 | 181 813 | -16 111 | -31 913 | 478 433 | 348 343 |
| Working capital | 231 260 | 215 582 | 154 117 | 85 934 | -26 744 | -16 603 | 358 632 | 284 913 |
| Investment fixed assets | 840 | 169 | 10 278 | 2 458 | 27 | 6 167 | 11 144 | 8 794 |
EBITDA is operating profit before depreciation, amortization interest and tax.
EBT is profit before tax.
Working capital is inventory plus accounts receivables minus accounts payables.
There are no customers that represent 10% or more of revenues in the individual business areas in 2022 and 2021.
Revenue per customer is based on sales per legal entities.
The comparison figures are restated, but does not include UK/Ireland which was acquired in June 2022.
June 1, 2022, StrongPoint ASA acquired 100% of the shares in Air Link Group Ltd with subsidiaries. UK has been identified as a very interesting market for StrongPoint solutions. The online grocery penetration is higher than in the rest of Europe, putting constantly pressure on the profit margins in the brick-and-mortar stores.
ALS has 25 years of experience handling installation, service, construction and refurbishment for large grocery retailers in UK and Ireland. In the 2025 strategy, sale of StrongPoint solutions to this region was included, but it was estimated that the installation and service were to be handled by a sub-supplier. The ALS acquisition enables StrongPoint to include this revenue as part of the 2025 ordinary business. It also enables StrongPoint to have access to the largest grocery retail customers, making it easier to access and sell StrongPoints own solutions with comfort that the business critical systems will be supported by on-the-ground resources.
The purchase price allocation was based on balance sheet per December 31, 2021. Final purchase price was calculated based on balance sheet per May 31, 2022.
The purchase price was paid by 80% cash and 20% shares in StrongPoint ASA. 50% of the shares was issued as new shares, and 50% was allocated from treasury.
There are identified additional value related to customers of KNOK 56,000 and branding of KNOK 10,000. The additional value for customers will be written off over 7 years and the additional value for branding will be written off over 5 years.
Included in the value of goodwill is employees with special skills and expected synergies with StrongPoint's existing business. These intangible assets do not meet the recognition criteria in IAS 38 and are therefore not recorded separately. Recorded goodwill is allocated to the cash-generating unit ALS. Goodwill is not amortized. However, it is subject to impairment tests annually.
The table to the right shows the statement of financial position for the business combination in line with IFRS 3.
| KNOK | |
|---|---|
| Assets | |
| Deferred tax assets | 27 |
| Fixed assets | 2 018 |
| Leased assets | 38 854 |
| Other investments | 389 |
| Cash and cash equivalents | 4 973 |
| Receivables | 54 644 |
| Inventories | 18 649 |
| 119 554 | |
| Liabilities | |
| Leasing liabilities | -38 854 |
| Accounts payable | -35 330 |
| Other short term debt | -16 068 |
| -90 252 | |
| Net identifiable assets at fair value | 29 302 |
| Branding | 10 000 |
| Customers relations | 56 000 |
| Goodwill | 37 673 |
| Deferred tax assets | -16 500 |
| Purchase amount | 116 475 |
| Cash | 93 646 |
| Shares in StrongPoint | 22 830 |
| Purchase amount | 116 476 |
| Paid in cash | 93 646 |
| Cash received | -4 951 |
| Net cash out | 88 695 |
| KNOK | |
|---|---|
| Revenue | 241 268 |
| Profit before tax | 25 371 |
| KNOK | |
|---|---|
| Revenue | 1 490 690 |
| Profit before tax | 41 659 |
The acquisition costs regarding ALS amounted to KNOK 6,696 and are booked as Opex.
StrongPoint Labels business area was divested in June 2021 through an acquisition done by the Swedish company Volati Tryck Holding AB. The business area constituted of StrongPoint Labels AB in Malmö, Sweden, and parts of the Norwegian legal entity StrongPoint AS which was demerged into StrongPoint Labels AS in Q3 2021.The Swedish part of the transaction was closed July 1 and the Norwegian part was closed September 1. The transaction led to a net gain of 163.4 MNOK included in the line Profit after tax from discontinued operations in the P&L.
Following IFRS, the financial figures for the business areas are reported as "Profit from discontinued operations below tax in the financial statement and removed from the comparison figures in other P&L tables.
| Calculation of profit Labels Business area | 2021 |
|---|---|
| Payment | 226 576 |
| Sales costs / advisors | -4 485 |
| Book value equity | -58 703 |
| Profit | 163 389 |
| KNOK | 2021 |
|---|---|
| Operating revenue | 110 144 |
| Cost of goods sold | 53 177 |
| Payroll | 31 766 |
| Other operating expenses | 9 690 |
| Total operating expenses | 94 633 |
| EBITDA | 15 512 |
| Depreciation tangible assets | 7 090 |
| Depreciation intangible assets | 221 |
| EBIT | 8 201 |
| Interest expenses | 339 |
| Other financial expenses/currency differences | 1 495 |
| Profit on sale of discontinued operations | 163 389 |
| EBT | 169 755 |
| Taxes | 1 337 |
| Operating revenue | 110 144 |
|---|---|
| Cost of goods sold | 53 177 |
| Payroll | 31 766 |
| Other operating expenses | 9 690 |
| Total operating expenses | 94 633 |
| EBITDA | 15 512 |
| Depreciation tangible assets | 7 090 |
| Depreciation intangible assets | 221 |
| EBIT | 8 201 |
| Interest expenses | 339 |
| Other financial expenses/currency differences | 1 495 |
| Profit on sale of discontinued operations | 163 389 |
| EBT | 169 755 |
| Taxes | 1 337 |
Profit from discontinued operations 168 418
| × | ||
|---|---|---|
| KNOK | 2021 |
|---|---|
| Cash flow from operational activities | 5 487 |
| Cash flow from investment activities | -1 895 |
| Cash flow from financing activities | -6 156 |
| Net Change in liquid assets | -2 563 |
| Cash and cash equivalents at the start of the peri | 29 251 |
| Cash and cash equivalents at the end of the period | 26 687 |
| KNOK | 2022 | 2021 | |
|---|---|---|---|
| Short term rent, electricity, cleaning | 13 242 | 7 251 | |
| Vehicles | 11 473 | 8 677 | |
| Other consultancy fees | 51 414 | 35 131 | |
| IT | 21 018 | 22 311 | |
| Travel | 8 632 | 4 138 | |
| Marketing | 10 044 | 8 763 | |
| Other costs | 19 152 | 20 014 | |
| Total 1) | 134 976 | 106 285 |
| Specification of recognized auditors fee: | 2022 | 2021 |
|---|---|---|
| Fee for auditing services | 2 365 | 2 211 |
| Fee for tax advise | 14 | 12 |
| Fee for other services | 292 | 40 |
| Total 2) | 2 671 | 2 263 |
1) 60% of the increased operating costs are from Air Link Group Ltd. The other 40% is to a large extent caused by inflation. 2) Of which TNOK 302 applies to auditors other than EY. Auditors fee are exclusive of VAT, with the exception of transaction expenses.
StrongPoint ASA owns 49,9997% of the shares in Spok AS. The company performs services on behalf of StrongPoint AS. StrongPoint owns 49% of the shares in StrongPoint Cash Tech S.L. The Joint Venture has been established regulating the partnership with a technology company in Spain.
| KNOK Entity |
Country | Industry | Stake 31.12.2022 |
Cost price 31.12.2022 |
Book value 31.12.2021 |
Dividend paid in 2022 |
Share of net profit 2022 |
Book value 31.12.2022 |
|---|---|---|---|---|---|---|---|---|
| StrongPoint Cash Tech S.L. (under establishment) | Spain | R&D company | 49,0% | 15 | - | - | - | 15 |
| Spok AS | Norway | Service company | 50,0% | 1 700 | 774 | -200 | 388 | 962 |
| Total | 1 715 | 774 | -200 | 388 | 977 |
| 2022 | ||||||
|---|---|---|---|---|---|---|
| KNOK Entity |
Current assets |
Fixed assets |
Debt | Equity | Turnover | Profit for year |
| Spok AS | 3 990 | 683 | 2 755 | 1 918 | 15 098 | 775 |
| Total | 3 990 | 683 | 2 755 | 1 918 | 15 098 | 775 |
| 2022 | 2021 | ||||
|---|---|---|---|---|---|
| KNOK Company |
Cost price |
Market value |
Cost price |
Market value |
|
| Other long-term investments: | |||||
| Settle Group AS | 476 | - | 476 | - | |
| 1X Technologies AS | 4 001 | 4 001 | 4 001 | 4 001 | |
| Total | 4 477 | 4 001 | 4 477 | 4 001 |
The shares are booked at fair value with level 3 in the fair value hierarchy. Any changes in the value will be booked through the profit and loss.
The shares in 1X Technologies AS (Halodi Robotics AS) is of strategic importance for the Group. In March 2021, StrongPoint announced a partnership with humanoid robotics company 1X Technologies to develop an in-store grocery retail robotics solution, which in a few years' time will be seen in grocery stores conducting repetitive, labour-intensive tasks which will drive in-store efficiencies. The shares in Settle Group AS were written down to 0 in 2018 and the fair value is evaluated to
be unchanged.
| KNOK | 2022 | 2021 |
|---|---|---|
| Interest income | 772 | 300 |
| Currency adjustment bank and unpaid receivables and liabilities | 5 448 | 4 765 |
| Profit from associated companies | 388 | 175 |
| Other financial income | 284 | 2 331 |
| Total financial income | 6 891 | 7 571 |
| Interest expense | 2 031 | 1 112 |
| Interest expenses leasing IFRS 16 | 2 168 | 784 |
| Currency adjustment bank and unpaid receivables and liabilities | 984 | 6 897 |
| Other financial expenses 1) | 890 | 382 |
| Total financial expenses | 6 073 | 9 176 |
| Net financial items | 818 | 1 605 |
Currency differences relating to the payment of purchases are recorded as cost of goods and constitutes a cost of KNOK 6,096 in 2022 (cost of KNOK 3,336 in 2021).
Currency differences relating to the payment of sales revenues are recorded as sales revenues and constitutes a revenue of KNOK 2,085 in 2022 (revenue of KNOK 707 in 2021).
1) Other financial expenses are primarily related to financial liabilities.
| KNOK | 2022 | 2021 |
|---|---|---|
| Salaries | 224 046 | 187 089 |
| Severance packages | 537 | 1 401 |
| Director's fee and Nomination Committee | 1 958 | 1 825 |
| Social fee | 39 092 | 37 357 |
| Pension costs | 13 429 | 12 917 |
| Other payroll costs | 26 781 | 14 558 |
| Total payroll costs | 305 842 | 255 147 |
| Number of full-time employees employed during the year: | 472 | 395 |
| Number of full-time employees at the end of the year: | 511 | 400 |
The employees in StrongPoint have pension schemes in line with local statutory and obligatory company pension schemes, and are recognized as a defined contribution plan.
| KNOK | 2022 | 2021 |
|---|---|---|
| Board of Directors | ||
| Directors fee | 1 834 | 1 777 |
| Executive Management Team | ||
| Salaries | 17 424 | 13 241 |
| Bonus | 4 902 | 2 249 |
| Company car | 919 | 709 |
| Other remuneration | 1 102 | 56 |
| KNOK | 2022 | 2021 |
|---|---|---|
| Board of Directors | ||
| Directors fee | 1 834 | 1 777 |
| Executive Management Team | ||
| Salaries | 17 424 | 13 241 |
| Bonus | 4 902 | 2 249 |
| Company car | 919 | 709 |
| Other remuneration | 1 102 | 56 |
| Pension | 1 298 | 1 044 |
| Total salaries and remuneration | 27 479 | 19 075 |
| Name, position | Shares per 31.12.22 |
Shares per 31.12.21 |
Options per 31.12.22 |
Options per 31.12.21 |
|---|---|---|---|---|
| Board of Directors | ||||
| Morthen Johannessen, Chairman 1) | 105 662 | 100 047 | ||
| Klaus de Vibe, Director 2) | 92 491 | 89 683 | ||
| Camilla Tepfers, former Director | 11 023 | |||
| Peter Wirén, Director | 33 345 | 26 666 | ||
| Ingeborg Molden Hegstad, Director 3) | 22 365 | 19 557 | ||
| Cathrine Laksfoss, Director | 1 974 | - | ||
| Total | 255 837 | 246 976 | - | - |
1) Morthen Johannessen ownes the shares privatly and through the company Motri AS.
2) Klaus de Vibe ownes the shares privatly and through the company De Vibe AS.
3) Ingeborg Molden Hegstad ownes the shares privatly and through the company Imsight AS.
4) Jacob Tveraabak ownes the shares privately and through the company Celo Industries AS.
| Name, position | Shares per 31.12.22 |
Shares per 31.12.21 |
Options per 31.12.22 |
Options per 31.12.21 |
|---|---|---|---|---|
| Executive Management Team | ||||
| Jacob Tveraabak, CEO 4) | 212 246 | 206 000 | 600 000 | 450 000 |
| Hilde Gilen, CFO | 53 827 | 49 573 | 93 750 | 225 000 |
| Knut Olav Nyhus Olsen, SVP People & Organisation, and head of Marketing and Internal Communication |
13 814 | 10 839 | 225 000 | 150 000 |
| Gisle Elvebakken, SVP Norway | 39 329 | 26 032 | 250 000 | 150 000 |
| Julius Stulpinas, SVP Technology & supply chain |
31 094 | 25 296 | 225 000 | 150 000 |
| Rimantas Mažulis, SVP Baltics | 22 806 | 19 034 | 225 000 | 150 000 |
| Lorena Gómez, SVP Spain | 5 350 | 2 139 | 125 000 | 50 000 |
| Chris Mackie, SVP E-commerce | 15 936 | 75 000 | ||
| Magnus Rosén, SVP Sweden | 9 000 | 75 000 | ||
| Steve Smith, SVP UK & Ireland | - | 75 000 | ||
| Total | 403 402 | 338 913 | 1 968 750 | 1 325 000 |
| Total costs and Social Security Provisions (KNOK) | 2022 | 2021 |
|---|---|---|
| Total IFRS cost | 5 420 | 5 441 |
| Total Social security provisions | - 341 | 737 |
| 5 079 | 6 178 | |
| Granted instruments | 2022 | 2021 |
| Instrument | Option | Option |
| Quantity 31.12.2022 (instruments) | 1 100 000 | 1 075 000 |
| Quantity 31.12.2022 (shares) | 1 100 000 | 1 075 000 |
| Contractual life* | 5,00 | 5,00 |
| Strike price* | 22,55 | 31,13 |
| Share price* | 22,25 | 31,40 |
| Expected lifetime* | 3,25 | 3,25 |
| Volatility* | 43,26% | 40,55% |
| Interest rate* | 2,599% | 0,713% |
| Dividend* | 0,00 | 0,00 |
| FV per instrument* | 7,21 | 9,21 |
| Instrument |
|---|
| Quantity 31.12.2022 (instruments) |
| Quantity 31.12.2022 (shares) |
| Contractual life* |
| Strike price* |
| Share price* |
| Expected lifetime* |
| Volatility* |
| Interest rate* |
| Dividend* |
| FV per instrument* |
*Weighted average parameters at grant of instrument.
| Quantity and weighted average prices Activity |
Number of instruments 01.01.2022 - 31.12.2022 |
Weighted Average Strike Price |
|---|---|---|
| Outstanding OB (01.01.2022) | 2 075 000 | 24,14 |
| Granted | 1 100 000 | 22,55 |
| Exercised 1 | - 50 000 | 17,31 |
| Released | 0 | 0,00 |
| Adjusted | 0 | 0,00 |
| Performance Adjusted | 0 | 0,00 |
| Cancelled | 0 | 0,00 |
| Terminated | - 456 250 | 24,53 |
| Expired | 0 | 0,00 |
| Outstanding CB (31.12.2022) | 2 668 750 | 23,54 |
| Vested CB | 681 250 | 22,00 |
1) Exercised share price NOK 23.53
| Outstanding Instruments Overview | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Strike price | Number of instruments |
Weighted Average remaining contractual life |
Weighted Average Strike Price |
Vested instruments 31.12.2022 |
Weighted Average Strike Price |
||||
| Outstanding Instruments | Vested Instruments | ||||||||
| 17,31 | 850 000 | 2,84 | 17,31 | 450 000 | 17,31 | ||||
| 20,53 | 125 000 | 4,44 | 20,53 | 0 | 0,00 | ||||
| 22,81 | 862 500 | 4,36 | 22,81 | 0 | 0,00 | ||||
| 31,13 | 831 250 | 3,35 | 31,13 | 231 250 | 31,13 | ||||
| 2 668 750 | 681 250 |
The fair value of share options granted is estimated at the date of grant using the Black-Scholes-Merton Option Pricing Model. The model uses the following parameters; the exercise price, the life of the option, the current price of the underlying shares, the expected volatility of the share price, the dividends expected on the shares, and the risk-free interest rate for the life of the option.
The measure of volatility used in the option pricing models is the annulised standard deviation of the continuously compounded rates of return on the share over a period of time.
The vesting of the options is dependent on the participant still being employed at Strongpoint at the time of the vesting.
All StrongPoint ASA options are intended to be settled in equity, but in the event that the Company is not capable of delivering Shares following an exercise of Options, the Company shall fulfil its obligations under this agreement through a cash-out.
The options will vest over three years, with 1/4 vesting after one year, 1/4 after two years, and the remaining 1/2 after three years. The split in vesting underpins the retention ambition of the program. Any non-exercised options expire five years after grant.
| Equipment owned |
2021 Total |
|---|---|
| KNOK | Land | Buildings | Equipment owned |
2022 Total |
Land | Buildings | Equipment owned |
2021 Total |
|---|---|---|---|---|---|---|---|---|
| Acquisition costs 01.01 | 825 | 8 731 | 56 931 | 66 487 | 825 | 8 731 | 82 503 | 92 059 |
| Discontinued operations | - | - | -26 711 | -26 711 | ||||
| Acquisition | 20 346 | 20 346 | ||||||
| Addition | 11 041 | 11 041 | 7 202 | 7 202 | ||||
| Divestment | -9 664 | -9 664 | -3 798 | -3 798 | ||||
| Currency exchange differences | 1 225 | 1 225 | -2 264 | -2 264 | ||||
| Acquisition costs 31.12 | 825 | 8 731 | 79 880 | 89 436 | 825 | 8 731 | 56 931 | 66 487 |
| Accumulated depreciations 01.01 | -825 | -8 731 | -37 901 | -47 457 | -825 | -8 731 | -58 473 | -68 029 |
| Discontinued operations | - | - | 23 691 | 23 691 | ||||
| Acquisition | -18 294 | -18 294 | - | - | ||||
| Depreciations | -5 035 | -5 035 | -2 517 | -2 517 | ||||
| Depreciations of the year regarding rental machines is booked as cost of gods sold |
-3 812 | -3 812 | -4 246 | -4 246 | ||||
| Divestment | 9 650 | 9 650 | 4 232 | 4 232 | ||||
| Currency exchange differences | -733 | -733 | -588 | -588 | ||||
| Accumulated depreciations 31.12 | -825 | -8 731 | -56 125 | -65 681 | -825 | -8 731 | -37 901 | -47 457 |
| Book value 31.12 | - | - | 23 755 | 23 755 | - | - | 19 031 | 19 031 |
| Depreciation ratio | 10-33% | 10-33% | ||||||
| Depreciation method | Linear | Linear |
Some equipment has been fully depreciated per 31 December 2022 but is still in use. StrongPoint has no contractual purchasing obligations.
| 2021 Total |
||||
|---|---|---|---|---|
| KNOK | Right of use rent |
Right of use equipment |
2022 Total |
Right of use rent |
Right of use equipment |
2021 Total |
|---|---|---|---|---|---|---|
| Acquisition costs 01.01 | 61 694 | 27 496 | 89 190 | 90 874 | 64 251 | 155 125 |
| Discontinued operations | - | - | - | -41 994 | -41 965 | -83 959 |
| Acquisition | 38 437 | - | 38 437 | |||
| Addition | 13 346 | 6 911 | 20 257 | 15 220 | 6 226 | 21 446 |
| Divestment | - | 16 | 16 | - | -1 502 | -1 502 |
| Currency exchange differences | 363 | 717 | 1 080 | -2 407 | 486 | -1 921 |
| Acquisition costs 31.12 | 113 840 | 35 140 | 148 980 | 61 694 | 27 496 | 89 190 |
| Accumulated depreciations 01.01 | -30 266 | -15 682 | -45 948 | -48 760 | -38 623 | -87 383 |
| Discontinued operations | - | - | - | 27 717 | 29 232 | 56 950 |
| Depreciations | -14 189 | -6 128 | -20 317 | -9 968 | -6 233 | -16 201 |
| Currency exchange differences | -340 | 324 | -16 | 744 | -58 | 686 |
| Accumulated depreciations 31.12 | -44 795 | -21 486 | -66 281 | -30 266 | -15 682 | -45 948 |
| Book value 31.12 | 69 044 | 13 654 | 82 698 | 31 428 | 11 814 | 43 241 |
| Depreciation ratio | 10-33% | 10-33% | 10-33% | 10-33% |
See note 16 for information about the comittments related to the leasing.
| 2022 | 2021 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Other intangible assets (KNOK) | Technology | Brand | Customer | Software | Other | Total | Technology | Brand | Customer | Software | Other | Total |
| Acquisition costs 01.01 | 107 510 | 21 502 | 36 425 | 9 272 | - | 174 709 | 107 510 | 21 502 | 57 643 | 14 387 | 764 | 201 807 |
| Acquired by aquisition | - | 10 000 | 56 000 | - | - | 66 000 | - | - | - | - | - | - |
| Investment | - | - | - | 104 | - | 104 | - | - | - | - | - | - |
| Divestment | - | - | - | - | - | - | - | - | - | - | -764 | -764 |
| Discontinued operations | - | - | - | - | - | - | - | - | -21 218 | -5 115 | - | -26 333 |
| Acquisition costs 31.12 | 107 510 | 31 502 | 92 425 | 9 376 | - | 240 813 | 107 510 | 21 502 | 36 425 | 9 272 | - | 174 709 |
| Accumulated impairments and depreciations 01.01 |
-101 268 | - | -35 344 | -8 382 | - | -144 994 | -96 644 | - | -54 539 | -10 893 | -115 | -162 191 |
| Access depreciation acquisitions | - | - | - | - | - | - | - | - | - | - | 115 | 115 |
| Discontinued operations | - | - | - | - | - | - | - | - | 21 970 | 2 512 | - | 24 482 |
| Accumulated impairments and depreciations 31.12 |
-105 655 | -1 164 | -42 632 | -8 383 | - | -157 834 | -101 268 | - | -35 344 | -8 382 | - | -144 994 |
| Translation differences | -1 855 | 937 | 1 332 | -890 | - | -476 | -1 744 | 1 672 | 1 617 | -890 | - | 654 |
| Book value 31.12 | - | 31 275 | 51 125 | 103 | - | 82 503 | 4 498 | 23 174 | 2 699 | - | - | 30 371 |
| Depreciations of the year | -4 387 | -1 164 | -7 288 | -1 | - | -12 840 | -4 624 | - | -2 774 | -2 | -2 | -7 403 |
| This year change in translation differences | -110 | -735 | -285 | - | - | -1 130 | -510 | -1 641 | -1 058 | 1 503 | -34 | -1 740 |
| Depreciation schedule | 10 og 15 år | Impairment test |
1-7 år | 4-7 år | - | - | 10 og 15 år | Impairment test |
1-7 år | 4-7 år | 3 år | - |
| Depreciation ratio | 7-10% | 14-100% | 14-25% | - | - | 7-10% | 14-100% | 14-25% | 33% | - |
In 2022 there have been expensed KNOK 42,993 (KNOK 32,763 in 2021) in research and development costs. Intangible assets regarding brand are related to CashGuard and ALS.
| StrongPoint | StrongPoint | StrongPoint | StrongPoint | 2022 | 2021 | ||||
|---|---|---|---|---|---|---|---|---|---|
| Goodwill (KNOK) | StrongPoint AS | StrongPoint AB | Technology AB | Baltic | S.L.U | E-com AB | ALS | Total | Total |
| Acquisition costs 01.01 | 15 976 | 2 612 | 81 127 | 23 318 | 4 431 | 25 889 | - | 153 352 | 169 643 |
| Acquisition | 38 268 | 38 268 | - | ||||||
| Discontinued operations | - | - | -16 290 | ||||||
| Acquisition costs 31.12 | 15 976 | 2 612 | 81 127 | 23 318 | 4 431 | 25 889 | 38 268 | 191 620 | 153 352 |
| Accumulated impairment and depreciations 01.01 | -14 689 | -229 | - | -23 345 | - | - | - | -38 263 | -38 263 |
| Accumulated impairment and depreciations 31.12 | -14 689 | -229 | - | -23 345 | - | - | - | -38 263 | -38 263 |
| Translation differences | - | - | 3 921 | 2 903 | 774 | -1 037 | - | 6 561 | 9 552 |
| Book value 31.12 | 1 286 | 2 383 | 85 048 | 2 877 | 5 205 | 24 852 | 38 268 | 159 918 | 124 641 |
| - | |||||||||
| Impairment of the year | - | - | |||||||
| This year change in translation differences | - | - | -2 627 | 144 | 260 | -768 | - | -2 991 | -10 635 |
| Depreciation schedule | Impairment test | Impairment test | Impairment test | Impairment test | Impairment test | Impairment test | Impairment test |
Goodwill is not depreciated. Impairment tests are carried out every year.The impairment test per 31 December 2022 has been carried out with the segments Nordics and Rest of Europe incl. R&D as the cash generating units.
| Goodwill (KNOK) | |||
|---|---|---|---|
| Acquired company | Cash generating unit | 31.12.2022 | 31.12.2021 |
| StrongPoint AS | Nordics | 1 286 | 1 286 |
| StrongPoint AB | Nordics | 2 383 | 2 383 |
| StrongPoint Technology AB | Nordics / Rest of Europe incl. R&D | 85 048 | 87 675 |
| StrongPoint UAB | Rest of Europe incl. R&D | 2 877 | 2 733 |
| StrongPoint S.L.U | Rest of Europe incl. R&D | 5 205 | 4 945 |
| StrongPoint E-com AB | Nordics / Rest of Europe incl. R&D | 24 852 | 25 620 |
| StrongPoint ALS | Rest of Europe incl. R&D | 38 268 | - |
| Total goodwill | 159 918 | 124 641 |
Impairment tests are carried out in order to assess the prospects of each cash flow-generating unit based on value in use. Value in use is measured against net book value for the cash flowgenerating entity.
The brands are considered to be indefinite due to the Group's strategy for 2025 which contains a growth path for the brands, and confirms the value of the IP in the balance sheet, as long term future cashflow is expected.
The Group has used value in use to determine recoverable amounts for the cash flow-generating entities. Value in use is determined by using the discounted cash flow method. The expected cash flow is based on the business areas' budgets and long term plans, which are approved by StrongPoint's executive management and the Board. Budgets and long-term plans cover a five-year period (explicit prognosis period). Approved budgets and long-term plans are adjusted for cash flow related to investments, future product improvements and new development, if the elements are considered significant for the impairment test. After the five years of explicit plans a terminal value is calculated based on 2.5% growth in net cash flow. To calculate value in use, the Group has used anticipated cash flow after tax and, correspondingly, discount rates after tax. The recoverable amount would not have been significantly different if cash flow before tax and the discount rate before tax had been used. The WACC after tax has been stipulated using an iterative method and is 8.29%. The assumptions are based on historical results and observable market data.
The discount rates are based on a weighted average cost of capital (WACC) method, whereby the cost of equity and the cost of liabilities are weighted according to an estimated capital structure. The discount rates reflect the market's required return on investment at the time of the test and in the industry to which the cash-generating unit belongs. The estimated capital structure is based on the average capital structure in the industry in which the cash generating unit operates and an assessment of what is a reasonable and prudent long-term capital structure. The CAPM model is used to estimate the cost of equity. In accordance with the CAPM model, the cost of equity consists of risk-free interest as well as an individual risk premium. The risk premium is the entity's systematic risk (beta), multiplied by the market's risk premium. The risk-free interest is estimated on a 10-year Norwegian government bond interest rate and is based on all cash flow being translated to NOK. The cost of liabilities represents an expected long-term after-tax interest rate for comparable liabilities and consists of risk-free interest and an interest spread.
The profit margin is reviewed based on expectations of future development and historical performance. This gives the Group good prospects for order intake and is a solid basis for long-term growth.
Growth rates in the explicit prognosis period are based on management's expectations of market trends. The Group uses stable growth rates to extrapolate cash flow in excess of five years. The longterm growth rate beyond five years is not higher than the expected long-term growth rate in the industry in which the undertaking operates within.
Group entities monitors competition environment and market shares on a detailed level, both in the local geography and from a product point of view. StrongPoint is a retail technology company and exposed to global changes within technology development, international competition, supply change and raw material distribution following political, climate or international trading challenges etc, Expected changes in market shares or new competitive solutions that can influence future cash flow from the business units are taken into account in the impairment test.
Group management and Board of directors monitors and acts upon risk within the following areas: Strategic, operational, financial and sustainability/climate. Main assumptions in the impariment test are adjusted to reflect the risk environment that the Group operates within.
In connection with impairment tests of goodwill and intangible assets, sensitivity analyses are carried out. There will not be an impairment situation before relatively large changes in the key assumptions, and these changes are considered to be outside the reasonable outcome.
There will always be uncertainty related to the estimate of value in use. The assessments are based on key assumptions as described above, and are to a large degree influenced by market data for comparable companies, interest rates and other risk conditions. These calculations are based on discounted future cash flow, in which judgement was used as regards future profit and operation. Significant changes in the cash flow may affect the value of goodwill.
| Inventories (KNOK) | 2022 | 2021 |
|---|---|---|
| Inventories | 242 540 | 222 582 |
| Provision for obsolete stock | -10 416 | -11 326 |
| Total | 232 124 | 211 256 |
| Provision for obsolete stock (KNOK) | 2022 | 2021 |
|---|---|---|
| Provision for obsolete stock, opening balance | -11 326 | -12 912 |
| Taken to income/charged to expense (-) change in provision | 910 | 1 586 |
| Provision for obsolete stock, closing balance | -10 416 | -11 326 |
Inventories are measured at the lower of cost and net realisable value.
The stock is pledged as security for loans, see note 15.
The cost of goods sold of KNOK 850,956 includes direct costs of goods with KNOK 578,407.
| Short term receivables (KNOK) | 2022 | 2021 |
|---|---|---|
| Accounts receivables | 274 348 | 175 627 |
| Prepaid expenses | 25 731 | 16 646 |
| Other receivables | 16 265 | 13 885 |
| Total short term receivables 31.12 | 316 344 | 206 158 |
Other receivables included MNOK 4.4 in expected government grants (SkatteFUNN) refunds for development costs in 2022. This was booked as reduction of other operating expenses.
| Changes in provision for bad debts (KNOK) | 2022 | 2021 |
|---|---|---|
| 01.01 | 6 981 | 5 251 |
| Discontinued operations | - | -16 |
| Acquisition | 138 | - |
| Applied provisions | -1 145 | 27 |
| Reversed provisions | -2 119 | -1 325 |
| New provision for bad debt | 2 173 | 3 044 |
| Total 31.12 | 6 027 | 6 981 |
The provisions per 31.12.2022 are not directly related to individual customers. Losses on bad debts are classified as other operating expenses in the income statement.
| Aging of accounts receivables (KNOK) | 2022 | 2021 |
|---|---|---|
| Not due | 206 384 | 158 854 |
| 0-3 months | 67 414 | 16 197 |
| 3-6 months | 550 | 556 |
| 6-12 months | - | 21 |
| Older than 12 months | - | - |
| Total 31.12 | 274 348 | 175 627 |
| Long term receivables (KNOK) | 2022 | 2021 |
| Not due | 206 384 | 158 854 |
|---|---|---|
| 0-3 months | 67 414 | 16 197 |
| 3-6 months | 550 | 556 |
| 6-12 months | - | 21 |
| Older than 12 months | - | - |
| Total 31.12 | 274 348 | 175 627 |
| Earn-out Cash Security 1) | - | 14 650 |
|---|---|---|
| Loan to Joint venture company in Spain | 13 668 | - |
| Deposit rented offices | 1 479 | 972 |
| Total long term receivables 31.12 | 15 147 | 15 622 |
1) Expected Earn-out from sale of Cash Security in 2020 of MNOK 1.4 is included short term receivables.
| Type of loan | 2022 | 2021 Borrowing terms | Average nominal interest for 2022 | |
|---|---|---|---|---|
| Multi-currency, group credit account 1) | 22 137 | - Overdraft limit MNOK 100, not time limited | 2,98% | |
| Repayment loan | 11 455 | 12 985 Quarterly repayments | 1,72% | |
| Short term debt | 4 165 | 3 068 Repayment in 2023 | 2,6%-5,77% | |
| Leasing liabilities | 81 203 | 42 009 Monthly and quarterly payments | ||
| Total interest bearing debt | 118 960 | 58 062 |
1) The Groups' main bank connection has loan covenants in relation to the ratio between NIBD/EBITDA. The loan agreements are measured on a quarterly basis. See note 17 for more information. All loans are secured.
| KNOK | 2022 | 2021 |
|---|---|---|
| Bank overdraft | 22 137 | - |
| Current interest-bearing liabilities | 29 310 | 20 854 |
| Due after one year | 67 513 | 37 208 |
| Total interest-bearing debt | 118 960 | 58 062 |
| Asset | 31.12.2022 | 31.12.2021 |
|---|---|---|
| Operating equipment and inventories for StrongPoint AS | 115 442 | 147 375 |
| Lien over Företagsinnteckning StrongPoint AB 1) | 109 844 | 113 237 |
| Co-surety Norway, Sweden, the Baltics and UK* | 135 000 | 135 000 |
| KNOK | 31.12.2021 | CashFlow | New contracts |
Currency differences |
31.12.2022 |
|---|---|---|---|---|---|
| Interest bearing liabilities | 16 004 | 16 897 | - | 4 855 | 37 757 |
| Lease liabilities | 42 058 | -19 503 | 58 694 | -46 | 81 203 |
| Total | 58 062 | -2 605 | 58 694 | 4 809 | 118 960 |
| New | ||||
|---|---|---|---|---|
| KNOK | 31.12.2020 | CashFlow | contracts | 31.12.2021 |
| Interest bearing liabilities | 54 335 | -38 331 | - | 16 004 |
| Lease liabilities | 54 816 | -17 267 | 4 510 | 42 058 |
| Total | 109 151 | -55 598 | 4 510 | 58 062 |
| KNOK | 2022 | 2021 |
|---|---|---|
| Cash and bank deposits | 47 248 | 174 198 |
| Overdraft | 22 137 | - |
| Unused overdraft facilities | 77 863 | 100 000 |
The Group had liquid assets (bank deposits and unused overdraft facilities) of MNOK 125.1 per 31.12.2022 (2021: MNOK 274.2). KNOK 2,611 are restricted funds pr. 31.12.2022 (2021: KNOK 0).
The Group has a cash pool arrangement allowing efficient distribution of cash between the different business units, and can withdraw up to MNOK 100 from the Group's overdraft facility if necessary to cover short term liquidity needs.
Tenancy agreements on premises has a lease-term of 1.5 - 10 years. Annual payment for these premises is approx. KNOK 17,078.
Leasing contracts on vehicles has a lease-term of 1 - 6 years. Annual payment is approx. KNOK 6,498.
Leasing contracts on inventory (copy machines, coffe machines etc.) has a lease-term of
1 - 3 years. Annual payment is approx. KNOK 587.
The numbers above includes approxemately MNOK 1 as leasing expenses in the P&L regarding contracts with a lifetime of less than one year and a value of less than KNOK 100. These contracts are not booked as leasing commitments in the balance sheet.
At the commencement date the present value of the lease payments has been calculated based on the lessee's incremental borrowing rate. The discount rate is 9.5%, included an interest rate of 7.5% business risk and 2.0% risk free.
The carrying value of financial leasing and IFRS16 leasing are included in note 10.
| Future minimum rent for the leasing contracts per 31.12 is as follows: |
The present value of future payments |
||
|---|---|---|---|
| KNOK | 2022 | 2021 | 2022 |
| Within one year | 24 164 | 18 180 | 22 067 |
| After one year, but within five years | 53 504 | 35 191 | 40 224 |
| After more than five years | 20 854 | 1 076 | 12 098 |
| Total | 98 522 | 54 448 | 74 389 |
StrongPoint's activities expose the group to exchange rate-, interest-, credit- and liquidity risks.
The Group's credit risk is related to the sale of goods and services on credit.
The Group has established guidelines to ensure that sales are only made to customers who have not had significant payment problems earlier and that the outstanding amount do not exceed credit limits. Guidelines are implemented to prevent the company's risk associated with loans and guarantees related to employees and customers.
Per 31.12.2022 the Group had KNOK 274,348 in outstanding accounts receivables. Of this KNOK 67,964 were overdue, traditionally most of the overdue amount are paid a few days after period end. The Group has historically had a low rate of loss on receivables. This year's expenses in relation to bad debts amounting to a cost of KNOK 1,203, including realized losses and changes in the provision for bad debts.
The company's interest-bearing debt increased in 2022.
The interest risk is measured by the group treasury department by simulating the effect of a change in interest rates. The simulation illustrates the cash effect of a change in interest rates given the loan size and the level of any existing interest rate hedging. The results from the simulation are used to support decisions concerning the possible conclusion of fixed-rate contracts.
As a result of this the group's interest-bearing debt has a floating interest rate at year-end. It has not been used fixed rate contracts or other hedging instruments in 2022 or 2021.
Based on the financial instruments in existence as of 31 December 2022, a general increase in interest rates of two per cent will reduce pre-tax profits by KNOK 800.
| KNOK | 2022 | 2021 |
|---|---|---|
| Total interest-bearing debt | 118 960 | 58 062 |
| Cash | 47 248 | 174 198 |
| Net interest-bearing debt | 71 712 | -116 136 |
| Total capital adjusted for Goodwill | 825 722 | 721 891 |
| Debt ratio | 9% | -16% |
The interest rate on overdraft are based on 1 month NIBOR for the draft in NOK, 1 month STIBOR SEK, 1 month EURIBOR EUR and 1 month SONIA for GBP. The interest rate on the largest long-term loan are fixed until 2026. The interest rate on the smaler loans is determined quarterly. See note 15 for information about long-term loans and note 16 for information about liabilities in
relation to financial leasing agreements.
The Group manages liquidity risk by monitoring the expected future cash from operations and available cash and credit facilities are adequate to serve the operational and financial obligations. This is done by preparing cash flow forecasts 12 months ahead, and detailed monthly cash monitoring, based on different outcomes in turnover and productmix. Capital tied up in the individual business units are supervised, focusing on inventory, accounts receivable, financing and accounts payable.
The group's strategy is to have sufficient cash, cash equivalents or credit facilities available at any time to be able to finance operations and investments for the next 6 months. Excess liquidity is mainly located in the Groups Cash Pool which is netted against overdraft. Unused credit facilities are described in note 14.
The loan agreement with the main financial institution has a claim (covenant) in which the ratio of net interest bearing debt and moving 12-month earnings before depreciation (EBITDA) shall not exceed 3.5. This is measured quarterly. The company met this requirement in 2022 and 2021. Interest bearing debt was totally increased by MNOK 60.9 during 2022, of which MNOK 40.0 was related to IFRS 16 liabilities. This combined with the EBITDA of MNOK 75.5 (MNOK 53.6 in 2021) resulted in net debt divided by 12 month rolling income before depreciation (EBITDA) per 31.12.2022 was 0.95. Per 31.12.2021 it was measured -2.17.
| 2022 | 2021 | |
|---|---|---|
| Bank overdraft | 2,98% | 1,74% |
| Short term loans | 4,19% | 1,88% |
| Long term loans | 1,72% | 1,72% |
| -168 |
|---|
| -47 |
| 234 |
| 87 |
| 12 |
| 237 |
The payment of financial obligations is intended to be covered by the payment of accounts receivable, sale of goods and services, and available cash and available credit facilities.
The Company has no material debt or bank deposits in foreign currency, except Euro, Norwegian and Swedish kroner. The main exposure to foreign currency derived from accounts payable and accounts receivable in connection with the purchase and sale of goods in foreign currency, and contracts where the sales price is determined in a currency other than the cost of goods sold. The Group is mainly exposed to fluctuations in the price of goods bought in foreign currencies, primarily in SEK, USD, EUR and GBP, and sale of goods in EUR.
The company do not normally use forward contracts to hedge this exposure. Large currency fluctuations are compensated by contracted agreement allowing adjusted sales prices accordingly.
Excess liquidity is placed in the Group's cashpool to reduce its short-term interest-bearing debt. The company uses a small degree of financial investments.
| Balance | |||||||
|---|---|---|---|---|---|---|---|
| KNOK | sheet amount | 0-6 months | 6-12 months | 1-2 year | 2-3 year | more than 3 years | Undefined |
| Secured loans (long and short term interest bearing debt) | 15 620 | 3 751 | 3 782 | 3 426 | 3 485 | 1 175 | - |
| Secured loans, interest | IA | 153 | 104 | 110 | 50 | IA | - |
| Overdraft (short-term interest bearing debt) 1) | 22 137 | - | - | - | - | - | 22 137 |
| Overdraft, interest | IA | - | - | - | - | IA | - |
| Financial leasing (long-term and short-term interest bearing debt) | 2 240 | 416 | 416 | 726 | 463 | 219 | - |
| Financial leasing, interest | IA | 21 | 17 | 21 | 9 | IA | - |
| IFRS16 leasing (long-term and short-term interest bearing debt) | 78 963 | 10 472 | 10 472 | 13 999 | 11 643 | 32 377 | - |
| IFRS16 leasing, interest | IA | 1 416 | 1 416 | 2 323 | 1 910 | IA | - |
| Accounts payable | 147 839 | 147 839 | - | - | - | - | - |
| Net liabilities financial instruments | 266 799 | 164 069 | 16 208 | 20 605 | 17 561 | 33 771 | 22 137 |
1) The overdraft contract with Danske Bank runs until renegotiated by either party.
SEK weakened by 5% against EUR -168 SEK weakened by 5% against GBP - SEK weakened by 5% against USD -47 NOK weakened by 5% against SEK 234 NOK weakened by 5% against EUR 87 NOK weakened by 5% against GBP 12 NOK weakened by 5% against USD 237
The Board aims to maintain a strong capital base in order to retain the trust of shareholders, creditors and the market in order to continually develop the company. The Board want to create a balance between higher return, which is made possible by higher borrowing levels, and the benefits and security provided by a solid equity. The Board aims to ensure that StrongPoint shareholders will over time gain a competitive return on their investment through a combination of cash dividends and increased value of their shares. In determining the annual dividend, the Board will take into account the expected cash flow, investments in organic growth, plans for growth through mergers and acquisitions, and the need for adequate financial flexibility.
The level of net debt is measured in terms of cash flow. The company is comfortable with the level of debt per 31.12.22
The following table provides the fair value measurement hierarchy of the Group's assets and liabilities.
Due to their short term nature, the carrying value of current financial assets and liabilities is deemed as reasonable approximation to the fair value of the financial assets and liabilities. As such, the carrying amount is considered not to be significantly different from the fair value.
Based on characteristics of the financial instruments recognized in the consolidated financial statements, these have been grouped in classes and categories as described below. The estimated fair value corresponds substantially carrying value.
Other long term investments are classifed as equity instruments designated at fair value, according to IFRS 9.
The balance sheet value of cash and cash equivalents and overdrafts is approximate to the fair value as these instruments have a short expiry period. Similarly, the balance sheet value of accounts receivables and accounts payable is approximate to the fair value as they are agreed on "ordinary" terms.
Book value of debt is deemed to be equivalent to market value, since the company should be able to refinance the loan at the same rate in the market.
| Fair value measurement using | |||
|---|---|---|---|
| Date of valuation | Total | Significant unobservable inputs (Level 3) |
|
| Assets measured at fair value: | |||
| Financial assets | |||
| Cash | 31 December 2022 | 47 248 | 47 248 |
| Accounts receivable | 31 December 2022 | 274 348 | 274 348 |
| Other long-term investments | 31 December 2022 | 4 001 | 4 001 |
| Financial debts | |||
| Accounts payable | 31 December 2022 | -147 839 | -147 839 |
| Bank loans | 31 December 2022 | -15 620 | -15 620 |
| Financial leasing liabilities | 31 December 2022 | -2 240 | -2 240 |
There have been no transactions with Board members and employees in 2022.
The group carried out a number of transactions with Spok AS in 2022 and 2021. All transactions were carried out as part of its ordinary activities and at ordinary business conditions.
The balance includes the following amounts resulting from transactions with the associated company:
The Group will continue to financially support the Joint Venture in Spain as long as the outcome of the R&D project give an expected positive return of investment. The Group has no other binding future transactions with related parties.
| 2022 | 2021 | |||
|---|---|---|---|---|
| KNOK | Sale | Purchase | Sale | Purchase |
| Spok AS | 290 | 3 628 | 609 | 3 657 |
| 2022 | 2021 | |||
|---|---|---|---|---|
| KNOK | Receivables | Debt | Receivables | Debt |
| Spok AS | - | 7 | - | 26 |
| StrongPoint Cash Tech S.L. (under establishment) |
13 668 | - | - | - |
No significant events have occurred after the balance sheet date.
| Company | Adress | Main area of business | Share of votes | Stake |
|---|---|---|---|---|
| StrongPoint AS 1) | Rælingen | Service and product provider | 100% | 100% |
| StrongPoint AB | Göteborg (Sweden) | Service and product provider | 100% | 100% |
| StrongPoint Retail Solutions Sdn Bhd | Malaysia | Under liquidation | 100% | 100% |
| StrongPoint UAB 2) | Vilnius (Lithuania) | Service and product provider | 100% | 100% |
| StrongPoint S.L.U | Spain | Service and product provider | 100% | 100% |
| StrongPoint E-com AB | Täby (Sweden) | Production and sales | 100% | 100% |
| Air Link Group Ltd 3) | Birmingham (UK) | Service and product provider | 100% | 100% |
| StrongPoint Retail Ltd | Manchester (UK) | Sales Office | 100% | 100% |
1) StrongPoint AS owns 100% of its company in Germany.
2) StrongPoint UAB owns 100% of its sales companies in Latvia and Estonia.
3) Air Link Group Ltd owns 100% of its sales companies in UK, Ireland and Belgium.
Profit or loss items in the subsidiaries are converted to NOK monthly, based on the average exchange rate of that month. Balance sheet items for the subsidiaries are converted to NOK, based on the exchange rate as at 31.12.2022.
| 2022 | 2021 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Average exchange rate | Exchange rate | Exchange rate | |||||||||||||
| January | February | March | April | May | June | July | August September | October | November | December | 31.12. | Average | 31.12. | ||
| SEK | 0,966 | 0,955 | 0,923 | 0,933 | 0,966 | 0,972 | 0,963 | 0,936 | 0,943 | 0,949 | 0,950 | 0,951 | 0,945 | 1,002 | 0,975 |
| Euro | 10,007 | 10,054 | 9,737 | 9,624 | 10,137 | 10,307 | 10,182 | 9,831 | 10,170 | 10,392 | 10,336 | 10,448 | 10,514 | 10,163 | 9,989 |
| GBP | 11,984 | 12,000 | 11,642 | 11,498 | 11,927 | 12,016 | 11,985 | 11,635 | 11,627 | 11,937 | 11,895 | 12,017 | 11,854 | 11,818 | 11,888 |
| KNOK | 2022 | 2021 |
|---|---|---|
| Balance 01.01 | - | 5 254 |
| Currency differences | -115 | |
| Payment earn-out 2020 Cub Business Systems AB | -4 200 | |
| Payment / reversed earn-out PYD Seguridad S.L. | -939 | |
| Balance 31.12 | - | - |
| KNOK | 2022 | 2021 |
|---|---|---|
| Profit for the year | 29 105 | 190 775 |
| Profit for the year continued operations | 29 105 | 22 357 |
| Weighed average number of shares during the year | ||
| Basic | 44 260 195 | 44 190 919 |
| Effect of dilutive share based incentive plans | 2 668 750 | 2 075 000 |
| Diluted | 46 928 945 | 46 265 919 |
| Earnings per share (NOK) | ||
| Basic | 0,66 | 4,32 |
| Diluted | 0,62 | 4,12 |
| Earnings per share continued operations (NOK) | ||
| Basic | 0,66 | 0,51 |
| Diluted | 0,62 | 0,48 |
| Number of outstanding shares (numbers in thousand) | 2022 | 2021 |
| 01.01: Number of shares (after deductions for own shares) | 43 788 | 44 293 |
| New shares | 500 | 0 |
| Sale of own shares during the year | 594 | 96 |
| Purchase of own shares during the year | -591 | -600 |
| 31.12: Number of shares (after deductions for 584.5 thousand own shares) | 44 292 | 43 788 |
StrongPoint ASA had per 31.12.2022 a share capital of NOK 27,830,778.24 spread over 44,888,352 shares with a nominal value of NOK 0.62. All shares have equal voting rights.
| No. | Name | No. of shares | % |
|---|---|---|---|
| 1 | STRØMSTANGEN AS | 3 933 092 | 8.76 |
| 2 | SOLE ACTIVE AS | 2 221 717 | 4.95 |
| 3 | HSBC BANK PLC | 1 896 000 | 4.22 |
| 4 | V. EIENDOM HOLDING AS | 1 865 000 | 4.15 |
| 5 | PICTET & CIE (EUROPE) S.A. | 1 641 821 | 3.66 |
| 6 | NORDNET BANK AB | 1 506 472 | 3.36 |
| 7 | ZETTERBERG, GEORG (incl. fully owned companies) | 1 395 000 | 3.11 |
| 8 | AVANZA BANK AB | 1 252 847 | 2.79 |
| 9 | RING, JAN | 1 176 648 | 2.62 |
| 10 | VERDADERO AS | 1 031 926 | 2.30 |
| 11 | VERDIPAPIRFONDET DNB SMB | 886 783 | 1.98 |
| 12 | EVENSEN, TOR COLKA | 840 000 | 1.87 |
| 13 | WAALER AS | 771 966 | 1.72 |
| 14 | HAUSTA INVESTOR AS | 699 600 | 1.56 |
| 15 | JOHANSEN, STEIN | 580 000 | 1.29 |
| 16 | STRONGPOINT ASA | 584 518 | 1.30 |
| 17 | MP PENSJON PK | 561 402 | 1.25 |
| 18 | ALS KINGFISHER LIMITED 1) | 506 156 | 1.13 |
| 19 | EUROPEAN RETAIL ENGINEERING LIMITED 1) | 506 156 | 1.13 |
| 20 | BNP PARIBAS | 452 487 | 1.01 |
| Sum 20 largest shareholders | 24 309 591 | 54.16 | |
| Sum 2 525 other shareholders | 20 578 761 | 45.84 | |
| Sum all 2 545 shareholders 2) | 44 888 352 | 100.00 | |
| 1) The shares to ALS Kingfisher Limited and European Retail Engineering Limited have not yet been issued to their VPS accounts. 2) The issuance of 512,312 new shares were registered with the Norwegian Register of Business Enterprises 04 June 2022. These shares have not been registered in VPS yet, but are included here. |
| Number of shares | Share capital | ||||
|---|---|---|---|---|---|
| KNOK | 2022 | 2021 | 2022 | 2021 | |
| Ordinary shares 01.01 | 44 376 | 44 376 | 27 513 | 27 513 | |
| Ordinary shares 31.12 | 44 888 | 44 376 | 27 831 | 27 513 |
Own shares:
| Numbers in 1000 | 2022 | 2021 |
|---|---|---|
| 01.01 | 588 | 83 |
| Purchase of own shares | 591 | 600 |
| Sales of own shares | -594 | -96 |
| 31.12 | 585 | 588 |
| Nominal value | 0,62 | 0,62 |
| Own shares specified in equity (KNOK): | 362 | 364 |
As at 31.12.2022 the Group owned 584,518 own shares. Cost price of these was KNOK 12,145, giving an average share price of NOK 20.78.
In 2022 it was paid KNOK 34,991 in dividend, which was NOK 0.80 per share.
The Board has proposed a dividend of NOK 0,90 per share in 2023. Total dividends to external shareholders will be KNOK 39,873.
Members of the Group management team have stock options. See note 9 for more information.
When preparing the annual accounts in accordance with IFRS the company management has used estimates based on best judgement and assumptions that are considered to be realistic. Situations or changes in market conditions may occur that may lead to estimates being adjusted, thus affecting the company's assets, debts, equity and profit.
StrongPoint must allocate the cost price of acquired entities to acquired assets and transferred debts based on estimated fair value. Significant intangible assets that StrongPoint has recognized includes customer contracts, customer base, brands, own technology and commitments in relation to any royalty agreements entered into. Assumptions taken into account when valuing assets include, but are not limited to, the replacement cost of fixed assets and fair value. The management's estimates of fair value are based on assumptions that are considered to be reasonable, but that are by nature uncertain. As a result the actual results may differ from the estimates. Depreciation periods and amounts are given in note 11.
Management prepare a Key Audit Matter report to the Audit Committee at least every 6 months, where major estimates are discussed and agreed.
Goodwill and brands as stated on the balance sheet are evaluated for impairment whenever there are indications of impairment, at least annually. The valuation is based on value in use when discounting expected future cash flow. The valuation is carried out with starting points in next year's budget and in a forecast for the next four years. Next, a terminal value is calculated based on 2.5% growth in net cash flow. The most sensitive assumption used in the estimates is that of future turnover growth, but EBITDA and discount rate are also important. The assumptions and sensitivity analysis are detailed in note 11.
The management has used estimates and assessments when making provisions for obsolete stock and future warranty costs. The provisions have been made with basis in a historical assessment of provision requirements, past figures for returns and under-warranty repairs and the age distribution of stock. Further details are provided in note 12 for stock and note 27 for warranty provisions.
The sale of Labels business and the acquisition of Air Link Group does not have any variable price mechanisms. An accrual for potential guarrantee claims of 1.5 MNOK are released in December 2022 as management does not expect any claims.
| KNOK | 2022 | 2021 |
|---|---|---|
| Tax payable | 16 108 | 12 983 |
| Tax items relating to previous years 1) | 726 | - |
| Change in deferred tax | -7 774 | -9 441 |
| Tax expense | 9 060 | 3 542 |
| Included as tax expense in the financial statements | 9 060 | 3 542 |
| Reconciliation of the nominal tax rate | 22% | 22% |
| KNOK | 2022 | 2021 |
|---|---|---|
| Profit before tax | 38 165 | 25 899 |
| Tax calculated at a rate of 22% | 8 396 | 5 698 |
| Taxing related to companies in other countries with other tax rate | -2 926 | -2 771 |
| Change in tax rate in Sweden | - | -88 |
| Non-taxable items (22% of permanent differences) | 2 345 | -651 |
| Unrecognised deferred tax asset | 1 245 | 1 355 |
| Tax expense | 9 060 | 3 542 |
1) Reversal of provision of tax previous years
| Deferred tax assets | Deferred tax liabilities | statement 1) | Consolidated income | |||
|---|---|---|---|---|---|---|
| KNOK | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 |
| Current assets | 631 | 665 | 4 271 | 2 657 | -1 542 | 455 |
| Liabilities | 3 092 | 1 992 | -3 185 | -2 727 | -642 | 1 368 |
| Fixed assets | 347 | 367 | -18 301 | -4 963 | -3 048 | -2 180 |
| Losses carried forward | 16 855 | 14 216 | -3 783 | -3 686 | -2 542 | -9 084 |
| Deferred tax 1) | 20 925 | 17 240 | -20 997 | -8 720 | -7 774 | -9 441 |
1) Exchange rates differences and opening balance in discontinued operations are not booked over the consolidated income statement for continued operations.
The Company has no liabilities / deferred tax assets that effect Total comprehensive income. Per 31.12.2022 the group has losses carried forward of MNOK 62.0 in the Spanish entity. Deferred tax assets of MNOK 15.5 (MNOK 14.2) associated with this is included in the balance sheet.
The COVID 19 pandemic had limited effect on the business in 2022.
The Group was influenced by the global shortage of some components especially for the production of CashGuards. The shortage can be explained by the COVID 19 pandemic and various severe weather incidents affecting production facilities. StrongPoint works closely with suppliers to ensure as little effect on customer deliveries as possible, but experienced delay in installation during 2022.
Global climate changes influence both StrongPoints, customers and suppliers in different ways, contributing to both risks and opportunities.
Climate risks are related especially to shortage of energy for the production and distribution of goods, both proprietory solutions and third party products. If climate changes requires dramatic changes in the energy consumption, this will influence StrongPoints ability to produce the products. Hardware represents 55% of the business. Risk is also related to shortages on food, which will affect the customers of StrongPoint, and shortages of raw materials for specific components. Management does not see these as a risks in the short term.
Climate opportunities are linked to StrongPoint solutions that can reduce energy consumption, like AutoStore storage of frozen goods. StrongPoint Air Link (UK/Ireland) are providing refurbishment of interior or point of sales physical installation, and this can contribute positive to climate if utilised in other markets.
| KNOK | 2022 | 2021 |
|---|---|---|
| Holiday pay owed | 17 716 | 16 853 |
| Accrued expenses | 28 467 | 22 603 |
| Contracts liabilities | 73 550 | 69 495 |
| Warranty provisions | 2 149 | 1 883 |
| Other short term debt | 11 557 | 16 087 |
| Total other short term debt | 133 439 | 126 920 |
| Warranty provisions (KNOK) | 2022 | 2021 |
| Balance 01.01 | 1 883 | 1 681 |
| Provision | 4 060 | 2 198 |
| Currency differences | -56 | -111 |
| Used | -3 737 | -1 886 |
| Balance 31.12 | 2 149 | 1 883 |
| KNOK | Note | 2022 | 2021 |
|---|---|---|---|
| Other operating income | 3 | 14 983 | 16 374 |
| Payroll | 2 | 23 756 | 24 273 |
| Depreciation | 5 | 28 | 144 |
| Other operating expenses | 2 | 21 275 | 13 916 |
| Total operating expenses | 45 058 | 38 332 | |
| Operating profit | -30 075 | -21 958 | |
| Financial items | 6 | 26 909 | 206 874 |
| Profit before tax | -3 166 | 184 916 | |
| Income tax expense | 12 | -1 109 | -1 372 |
| Net income | -2 057 | 186 287 | |
| Transfer to / from other equity | 8 | -41 931 | 151 257 |
| Proposed dividend | 8 | 39 873 | 35 031 |
| Total distributions | -2 057 | 186 287 |
| StrongPoint ASA Annual Report 2022 | 115 |
|---|---|
| NOTE | 31.12.2022 | 31.12.2021 |
|---|---|---|
| 7,8 | 27 831 | 27 513 |
| 8 | -362 | $-364$ |
| 8 | 364 052 | 388 291 |
| 391 520 | 415440 | |
| 9 | 156 980 | |
| 533 | 721 | |
| 7924 | 3656 | |
| 209 | 1075 | |
| 39 873 | 35 031 | |
| 4 | 4 604 | 8695 |
| 210 123 | 49 178 | |
| 601 643 | 464 617 |
| KNOK | Note | 31.12.2022 | 31.12.2021 | KNOK | Note | 31.12.2022 | 31.12.2021 |
|---|---|---|---|---|---|---|---|
| ASSETS | EQUITY AND LIABILITIES | ||||||
| Tangible assets | 5 | 38 | 39 | Share capital | 7,8 | 27 831 | 27 513 |
| Investments in subsidiaries | 10 | 441 898 | 290 450 | Treasury shares | 8 | -362 | -364 |
| Loans to group companies | 78 223 | 74 916 | Other equity | 8 | 364 052 | 388 291 | |
| Other long term investments | 11 | 5 701 | 5 701 | Total equity | 391 520 | 415 440 | |
| Other long term receivables | - | 14 650 | |||||
| Deferred tax | 12 | 2 606 | 1 497 | Current liabilities to credit institutions | 9 | 156 980 | - |
| Total fixed assets | 528 465 | 387 253 | Short term liabilities to group companies | 533 | 721 | ||
| Accounts payable | 7 924 | 3 656 | |||||
| Accounts receivables | - | 34 | Public duties payable | 209 | 1 075 | ||
| Group receivables | 62 787 | 42 176 | Proposed dividend | 39 873 | 35 031 | ||
| Prepaid expenses | 8 972 | 6 493 | Other short term liabilities | 4 | 4 604 | 8 695 | |
| Other short term receivables | 1 420 | 7 325 | Total short term liabilities | 210 123 | 49 178 | ||
| Bank deposits | 13 | - | 21 337 | TOTAL EQUITY AND LIABILITIES | 601 643 | 464 617 | |
| Total current assets | 73 178 | 77 365 | |||||
| TOTAL ASSETS | 601 643 | 464 617 |
Rælingen, 20 March 2023
Morthen Johannessen Chairman
Ingeborg Molden Hegstad Director
Cathrine Laksfoss Director
Klaus de Vibe Director
Peter Wirén Director
Jacob Tveraabak CEO
| KNOK | Note | 2022 | 2021 |
|---|---|---|---|
| Cash flow from operational activities | |||
| Ordinary profit before tax | -3 166 | 184 916 | |
| Ordinary depreciation | 5 | 28 | 144 |
| Tax paid | - | -105 | |
| Share Option Program | 5 079 | 6 178 | |
| Profit/loss from divestment | -87 | -177 758 | |
| Change in accounts receivables | 34 | 401 | |
| Change in accounts payable | 4 268 | -4 491 | |
| Change in short term group accounts | -59 078 | 89 051 | |
| Change in other accrued items | -6 094 | -46 205 | |
| Net cash flow from operational activities | -59 016 | 52 130 | |
| Cash flow from investment activities | |||
| Payments for fixed assets | 5 | -27 | -31 |
| Payment shares in Haldodi Robotics AS | - | -4 001 | |
| Net effect divestment | 19 641 | 226 576 | |
| Net effect acquisitions | -93 646 | -4 200 | |
| Net cash flow from investment activities | -74 032 | 218 345 | |
| Cash flow from financing activities | |||
| Purchase / Sale of treasury shares | 8 | -10 278 | -13 635 |
| Change in interestbearing debt | - | -22 667 | |
| Dividend paid | -34 991 | -31 050 | |
| Change in overdraft | 156 980 | -181 786 | |
| Net cash flow from financing activities | 111 711 | -249 138 | |
| Net cash flow in the period | -21 337 | 21 337 | |
| Cash and cash equivalents at 01.01 | 21 337 | - | |
| Cash and cash equivalents at 31.12 | - | 21 337 |
The financial statements, prepared by the company's Board and management, should be interpreted in light of the Directors' report. The financial statements comprise income statement, balance sheet, cash flow statement and notes and have been prepared in accordance with laws and generally accepted accounting principles in Norway.
Assets intended for permanent ownership or use are classified as fixed assets. Other assets are classified as current assets. Receivables due within one year are classified as current assets. Similar criteria are applied when classififying short-term and long term liabilities.
Fixed assets are valued at the acquisition cost less accumulated depreciation. If the fair value of fixed assets is lower than the carrying amount and the reduction is not expected to be temporary, it is written down to fair value. Fixed assets with limited useful lives are depreciated using the straight line method over their economic life.
Shares in other companies are recorded using the cost method. Dividends and group contributions from subsidiaries are recognized in the year the amount is set aside as a liability in the paying companies. Dividends from other companies are recognized in the year it is paid.
Tangible assets are capitalized and depreciated over the useful life if they have a useful life of more than 3 years. Maintenance costs are expensed as incurred, while improvements are added to the tangible assets and depreciated over the remaining useful life.
Current assets are valued at lower of cost or fair value.
Other long-term liabilities and short-term liabilities are valued at nominal value.
Subsidiaries and associated companies are valued at cost in the financial statements. The investments are valued at acquisition cost for the shares unless impairment has been required. It is written down to fair value if impairment is not considered to be temporary and it is deemed necessary by generally accepted accounting principles. Impairment losses are reversed when the reasons for the impairment no longer exists.
Dividends, group contributions and other distributions from subsidiaries are recognized in the same year as it is booked in the subsidiary's accounts.
Transactions in foreign currencies are translated at the exchange rate on the transaction date. Monetary items in foreign currencies are translated into Norwegian kroner by using the exchange rate at the balance sheet date. Non-monetary items measured at historical cost in a foreign currency are
translated into Norwegian kroner at the exchange rate on the transaction date. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rate at the time of measurement. Changes in foreign currency exchange rates are recorded in the accounting period under other financial items.
Intangible assets purchased individually are capitalized at cost. Intangible assets obtained through acquisitions are capitalized at cost when the criteria for capitalization are met.
Intangible assets with a limited useful life are depreciated according to a schedule. Intangible assets are written down to fair value if the expected economic benefits do not cover the carrying value and any remaining production expenses.
The company has a statutory obligatory company pension sheme for its employees. The company pension scheme meets the requirements of the law.
Accounts receivables and other receivables are stated at nominal value less provisions for expected losses. Provisions for losses are based on an individual assessment of each receivable. For other receivables, a general provision is made to cover any expected losses.
Cash and cash equivalents include cash, bank deposits and other forms of payment that become due within three months of acquisition.
Tax related to equity transactions are recorded in equity. Tax expensed comprises tax payable (tax on the taxable income for the year) and changes in net deferred tax. Deferred tax is calculated at 22% on the basis of temporary differences between accounting and tax values and tax losses carried forward at year end. Taxable and deductible temporary differences that reverse or may reverse in the same period are netted. Other deductible temporary differences is not assessed, but recognized on the balance sheet if it is likely that the company can utilize them and net recorded if appropriate. Deferred tax and deferred tax assets are presented at net value in the balance sheet.
The cash flow statement is prepared using the indirect method. Cash and cash equivalents include cash, bank deposits and other short term liquid investments.
With regard to salary and remuneration to the Executive Management Team and Board members, reference is made to Note 9 Salaries and remuneration for Executive Management Team and Directors in the consolidated financial statements and the seperate Remuneration report.
Remuneration to Ernst & Young for audit and audit-related services in 2022 was KNOK 520 (against KNOK 381 in 2021). Remuneration for other services was KNOK 192 (against KNOK 0 in 2021).
| Payroll (KNOK) | 2022 | 2021 |
|---|---|---|
| Salaries | 16 209 | 14 328 |
| Social fee | 1 333 | 2 472 |
| Pension costs | 640 | 620 |
| Options | 5 420 | 5 441 |
| Other benefits | 154 | 1 412 |
| Total | 23 756 | 24 273 |
| Number of full-time equivalents employed during the year: | 4 | 4 |
| Number of employees at the end of the year: | 4 | 4 |
| KNOK | 2022 | 2021 |
|---|---|---|
| Received management fee from Norwegian subsidiaries | 5 000 | 5 000 |
| Received management fee from Swedish subsidiaries | 4 727 | 6 380 |
| Received management fee from other subsidiaries | 5 257 | 4 994 |
| Total operating income | 14 983 | 16 374 |
| KNOK | 2022 | 2021 |
|---|---|---|
| Holiday pay owed | 953 | 1 022 |
| Accrued expenses | 3 651 | 7 673 |
| Total other short term debt | 4 604 | 8 695 |
| Acquisition costs 01.01 | 1 957 | 1 926 |
|---|---|---|
| Acquired | 27 | 31 |
| Acquisition costs 31.12 | 1 983 | 1 957 |
| Accumulated depreciations 01.01 | 1 917 | 1 774 |
| Depreciations of the year | 28 | 144 |
| Accumulated depreciations 31.12 | 1 945 | 1 917 |
| Book value as at 31.12 | 38 | 39 |
| KNOK | 2022 | 2021 |
|---|---|---|
| Acquisition costs 01.01 | 1 957 | 1 926 |
| Acquired | 27 | 31 |
| Acquisition costs 31.12 | 1 983 | 1 957 |
| Accumulated depreciations 01.01 | 1 917 | 1 774 |
| Depreciations of the year | 28 | 144 |
| Accumulated depreciations 31.12 | 1 945 | 1 917 |
| Book value as at 31.12 | 38 | 39 |
| Useful economic life | 3 years | |
| Depreciation method | Linear |
| Interest income from group companies |
|---|
| Other interest income |
| Group contributions received from subsidiaries |
| Dividend received from associated companies |
| Currency gains |
| Dividend from subsidiaries |
| Profit on sale of subsidiaries |
| Other |
| Total financial income |
| Other interest expenses |
| Currency loss |
| Loss on investment in subsidiaries |
| Other financial expenses |
| Total financial expenses |
| KNOK | 2022 | 2021 |
|---|---|---|
| Interest income from group companies | 1 294 | 427 |
| Other interest income | 629 | 292 |
| Group contributions received from subsidiaries | 13 480 | 17 403 |
| Dividend received from associated companies | 200 | 100 |
| Currency gains | 4 479 | 4 495 |
| Dividend from subsidiaries | 9 822 | 12 377 |
| Profit on sale of subsidiaries | 1 587 177 758 | |
| Other | 31 | 939 |
| Total financial income | 31 522 213 791 | |
| Other interest expenses | 2 395 | 684 |
| Currency loss | 541 | 6 189 |
| Loss on investment in subsidiaries | 1 500 | - |
| Other financial expenses | 176 | 45 |
| Total financial expenses | 4 613 | 6 918 |
| Net financial items | 26 909 206 874 |
The company's share capital per 31.12.2022 comprises the following share classes:
| Number | Nominal value Book value | ||
|---|---|---|---|
| Shares | 44 888 352 | 0,62 27 830 778 | |
| Total | 44 888 352 | 27 830 778 |
| No. | Name | No. of shares | % |
|---|---|---|---|
| 1 | STRØMSTANGEN AS | 3 933 092 | 8.8 |
| 2 | SOLE ACTIVE AS | 2 221 717 | 4.9 |
| 3 | HSBC BANK PLC | 1 896 000 | 4.2 |
| 4 | V. EIENDOM HOLDING AS | 1 865 000 | 4.2 |
| 5 | PICTET & CIE (EUROPE) S.A. | 1 641 821 | 3.7 |
| 6 | NORDNET BANK AB | 1 506 472 | 3.4 |
| 7 | ZETTERBERG, GEORG (incl. fully owned companies) | 1 395 000 | 3.1 |
| 8 | AVANZA BANK AB | 1 252 847 | 2.8 |
| 9 | RING, JAN | 1 176 648 | 2.6 |
| 10 | VERDADERO AS | 1 031 926 | 2.3 |
| 11 | VERDIPAPIRFONDET DNB SMB | 886 783 | 2.0 |
| 12 | EVENSEN, TOR COLKA | 840 000 | 1.9 |
| 13 | WAALER AS | 771 966 | 1.7 |
| 14 | HAUSTA INVESTOR AS | 699 600 | 1.6 |
| 15 | JOHANSEN, STEIN | 580 000 | 1.3 |
| 16 | STRONGPOINT ASA | 584 518 | 1.3 |
| 17 | MP PENSJON PK | 561 402 | 1.3 |
| 18 | ALS KINGFISHER LIMITED 1) | 506 156 | 1.1 |
| 19 | EUROPEAN RETAIL ENGINEERING LIMITED 1) | 506 156 | 1.1 |
| 20 | BNP PARIBAS | 452 487 | 1.0 |
| Sum 20 largest shareholders | 24 309 591 | 54.2 | |
| Sum 2 525 other shareholders | 20 578 761 | 45.8 | |
| Sum all 2 545 shareholders 2) | 44 888 352 | 100.0 |
1) The shares to ALS Kingfisher Limited and European Retail Engineering Limited have not yet been issued to their VPS accounts.
2) The issuance of 512,312 new shares were registered with the Norwegian Register of Business Enterprises 04 June 2022. These shares have not been registered in VPS yet, but are included here.
| Share | |||||
|---|---|---|---|---|---|
| KNOK | Share capital |
Treasury shares |
Option Program |
Other equity |
Total 2022 |
| Equity per 01.01 | 27 513 | -364 | 5 881 | 382 408 | 415 440 |
| Change of equity for the year: | |||||
| Acquisition of ALS paid in shares | 318 | 310 | 22 202 | 22 830 | |
| Proposed dividend | -39 873 | -39 873 | |||
| Change in dividend 2021 paid in 2022 | 40 | 40 | |||
| Sale of own shares | 58 | 1 953 | 2 011 | ||
| Purchase of own shares | -366 | -11 924 | -12 290 | ||
| Share Option Program | 5 420 | 5 420 | |||
| Profit for the year | -2 057 | -2 057 | |||
| Equity per 31.12 | 27 831 | -362 | 11 301 | 352 748 | 391 520 |
| Numbers in thousand | 2022 | 2021 |
|---|---|---|
| 01.01 | 588 | 83 |
| Sale of own shares | -594 | -96 |
| Purchase of own shares | 591 | 600 |
| 31.12 | 585 | 588 |
| Nominal value | 0,62 | 0,62 |
| Treasury shares specified in equity (KNOK) | 362 | 364 |
Per 31.12.2022 the company owned 584,518 own shares. Cost price of these was KNOK 12,145.3, giving an average share price of NOK 20.78.
It was paid KNOK 34,991 in dividend in 2022, which was NOK 0.80 per share.
The Board has proposed a dividend of NOK 0,90 per share in 2022. Total dividends to external shareholders will be KNOK 39,873. The tax effect of dividends does not affect the company's current or deferred tax.
| Distribution repayment loans (KNOK) | 2022 | 2021 |
|---|---|---|
| Due within one year | - | - |
| Debt, not time-restricted (group credit account) | 156 980 | - |
| Total short term liabilities to credit institutions | 156 980 | - |
| Lender (KNOK) | 2022 | 2021 Borrowing terms | Interest terms | |
|---|---|---|---|---|
| Multi-currency, group credit account | 156 980 | - Overdraft limit MNOK 100, not time limited |
2,98% | |
| Repayment business loan | - | |||
| Total interest bearing debt | 156 980 | - |
The group's main bank has covenants on the relationship between EBITDA and net interest bearing debt. The group is not in breach of the terms pr. 31.12.22. The loans are secured.
Loan security per 31.12.2022
| Asset | Book value / nominal |
|---|---|
| (KNOK) | security |
| Co-surety Norway, Sweden, The Baltics and UK* | 135 000 |
* The foreign companies liabilities are limited to the amount the guarantor at any time has drawn.
| Company | Address | Main area of business | Stake Book Value | |
|---|---|---|---|---|
| StrongPoint AS | Rælingen | Service and product provider | 100% | 37 942 |
| StrongPoint AB | Malmö (Sweden) | Printing | 100% | 139 224 |
| StrongPoint UAB | Vilnius (Lithuania) | Service and product provider | 100% | 20 348 |
| StrongPoint Retail Solutions Sdn Bhd |
Kualalumpur (Malaysia) | Under liquidation | 100% | - |
| StrongPoint S.L.U. | Madrid (Spain) | Service and product provider | 100% | 69 033 |
| StrongPoint E-com AB |
Täby (Sweden) | Service and product provider | 100% | 58 864 |
| StrongPoint Retail Ltd. |
UK | Start up | 100% | 12 |
| Air Link Group Ltd | UK | Service and product provider | 100% | 116 476 |
| Total | 441 898 |
| Company | Main area of business | Stake | Book Value |
|---|---|---|---|
| Spok AS | Service company | 50% | 1 700 |
| 1X Technologies AS | 1% | 4 001 | |
| Total | 5 701 |
| Tax expenses for the year are as follows (KNOK): | 2022 | 2021 |
|---|---|---|
| Change in deferred tax | -1 109 | -1 372 |
| Tax expense | -1 109 | -1 372 |
Reconciliation from nominal to actual tax rate:
| KNOK | 2022 | 2021 |
|---|---|---|
| Ordinary profit before tax | -3 166 184 916 | |
| Expected income tax based on nominal rate of tax 22% | -696 | 40 681 |
| Tax effect of the following items: | ||
| Permanent differences | -412 -42 053 | |
| Tax expense | -1 109 | -1 372 |
| Effective tax rate | 35,0% | -0,7% |
| Overview of deferred tax assets (KNOK): | 2022 | 2021 |
| Fixed assets | -194 | -255 |
| Liabilities | -11 733 | -6 654 |
| Profit and loss account | 83 | 103 |
| Net negative differences | -11 844 | -6 805 |
| Deferred tax assets | 2 606 | 1 497 |
Deferred tax assets are recognized on the balance sheet, as they are expected to be utilised through future group contribution from subsidiaries in Norway.
| KNOK | 2022 | 2021 |
|---|---|---|
| Cash and bank deposit | - | 21 337 |
| Unused overdraft facility | 77 863 100 000 | |
| Cash and cash flow in the cash flow statement | - | 21 337 |
The parent company shares an overdraft facility with the rest of the group. The group as whole may withdraw up to KNOK 100,000 from the group's overdraft facility.
The COVID 19 pandemic had limited effect on the business in 2022.
The Group was influenced by the global shortage of some components especially for the production of CashGuards. The shortage can be explained by the COVID 19 pandemic and various severe weather incidents affecting production facilities. StrongPoint works closely with suppliers to ensure as little effect on customer deliveries as possible, but experienced delay in installation during 2022.
Global climate changes influence both StrongPoint, customers and suppliers in different ways, contributing to both risks and opportunities.
Climate risks are related especially to shortage of energy for the production and distribution of goods, both proprietory solutions and third party products. If climate changes requires dramatic changes in the energy consumption, this will influence StrongPoints ability to produce the products. Hardware represents 55% of the business. Risk is also related to shortages on food, which will affect the customers of StrongPoint, and shortages of raw materials for specific components. Management does not see these as a risks in the short term.
Climate opportunities are linked to StrongPoint solutions that can reduce energy consumption, like AutoStore storage of frozen goods. StrongPoint Air Link (UK/Ireland) are providing refurbishment of interior or point of sales physical installation, and this can contribute positive to climate if utilised in other markets.
We confirm that, to the best of our knowledge, the consolidated financial statements for the year ended 31 December 2022 have been prepared in accordance with IFRS as adopted by the EU, that the financial statements for the parent company for the year ended 31 December 2022 have been prepared in accordance with the Norwegian Accounting Act, that they give a true and fair view of the Company's and Group's assets, liabilities, financial position and results of operations, and that the
Report of the Board of Directors gives a true and fair review of the development, performance and financial position of the Company and the Group and includes a description of the principle risks and uncertainties that they face.
Rælingen, 20 March 2023
Morthen Johannessen Chairman
Ingeborg Molden Hegstad Director
Cathrine Laksfoss Director
Klaus de Vibe Director
Peter Wirén Director
Jacob Tveraabak CEO
Statsautoriserte revisorer Ernst & Young AS Dronning Eufemias gate 6a, 0191 Oslo Postboks 1156 Sentrum, 0107 Oslo
Foretaksregisteret: NO 976 389 387 MVA Tlf: +47 24 00 24 00
www.ey.no Medlemmer av Den norske Revisorforening
A member firm of Ernst & Young Global Limited
To the Annual Shareholders' Meeting of StrongPoint ASA
We have audited the financial statements of StrongPoint ASA (the Company) which comprise the financial statements of the Company and the consolidated financial statements of the Company and its subsidiaries (the Group). The financial statements of the Company comprise the balance sheet as at 31 December 2022 and the income statement, statement of comprehensive income, statement of cash flows and statement of changes in equity for the year then ended and notes to the financial statements, including a summary of significant accounting policies. The consolidated financial statements of the Group comprise the balance sheet as at 31 December 2022, the income statement, statement of comprehensive income, statement of cash flows and statement of changes in equity for the year then ended and notes to the financial statements, including a summary of significant accounting policies.
Our opinion is consistent with our additional report to the audit committee.
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company and the Group in accordance with the requirements of the relevant laws and regulations in Norway and the International Ethics Standards Board for Accountants' International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled our other 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 opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided.
We have been the auditor of the Company for 22 years from the election by the general meeting of the shareholders in 2000.
Penneo Dokumentnøkkel: QP2X8-8MTVX-6FW5K-2BLKE-NE6LV-IWE7L
Independent auditor's report - StrongPoint ASA 2022
A member firm of Ernst & Young Global Limited
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for 2022. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the financial statements.
Total goodwill and intangible assets in the consolidated financial statement amounts to MNOK 242 in 2022, which is 25% of total assets. Shares in subsidiaries in the financial statement of the parent company amounts to MNOK 441,9 which is 73,4% of total assets. Management performs an annual impairment test of goodwill and brands with indefinite useful life. Impairment loss is recognized if the carrying value exceeds the recoverable amount. Recoverable amount is measured as value in use calculated based on discounted future cash flows. The estimates require considerable insight and judgement from management and uncertainty will exist with respect to technological development and market conditions. The impairment of goodwill, brands and shares in subsidiaries was a key audit matter due to the size of the items and the judgment involved in the estimated future cash flows.
| 2 | |
|---|---|
| Penneo Dokumentnøkkel: QP2X8-8MTVX-6FW5K-2BLKE-NE6LV-IWE7L | |
Our audit response We evaluated the impairment model used and checked the calculation for mathematically accuracy. We assessed management's assumptions used in the calculations, including discount rate and predicted cash flows used in the model. Management's assumptions regarding future cash flows were compared to historical actual numbers. The weighted average cost of capital used as discount rate in the impairment assessment was compared to external data on risk-free rate of interest, market risk premiums, beta and capital structure in comparable entities. Sensitivity in changes in main assumptions are analyzed and reviewed.
We refer to note 11 and note 25 in the consolidated financial statement and note 10 in the separate financial statement.
During 2022 Strongpoint finalized the acquisition of all the shares in Air Link Group Ltd (ALS). The final purchase price was agreed during third quarter of 2022 to NOK 116 million. The company carried out an assessment of fair value of identifiable assets acquired and liabilities assumed in the acquired company. The purchase price allocation, the valuation and identification of net identifiable assets and liabilities and the assumptions used in the allocation of the purchase price require significant judgement and
As part of our audit procedures, we obtained an understanding of the acquisition, the valuation process and the valuation methods used to determine the purchase price allocations. We further reviewed the share purchase agreement, tested assumptions and amounts in the valuations to underlying supporting documentation. We evaluated the identification of net identifiable assets and liabilities and the principles used for recognition and allocation of the purchase price. As part of evaluation of used principles, we
3
Independent auditor's report - StrongPoint ASA 2022
A member firm of Ernst & Young Global Limited
assumptions by management. Due to the matter described, we considered the acquisition and in particular the purchase price allocation and the initial consolidation as a key audit matter in our audit.
obtained an understanding that the principles used are in accordance with the description in note 4.
Other information consists of the information included in the annual report other than the financial statements and our auditor's report thereon. Management (the board of directors and general manager) is responsible for the other information. Our opinion on the financial statements does not cover the other information, and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information, and, in doing so, consider whether the board of directors' report, the statement on corporate governance and the statement on corporate social responsibility contain the information required by applicable legal requirements and whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that the other information is materially inconsistent with the financial statements, there is a material misstatement in this other information or that the information required by applicable legal requirements is not included in the board of directors' report, the statement on corporate governance or the statement on corporate social responsibility, we are required to report that fact.
We have nothing to report in this regard, and in our opinion, the board of directors' report, the statement on corporate governance and the statement on corporate social responsibility are consistent with the financial statements and contain the information required by applicable legal requirements.
Management is responsible for the preparation and fair presentation of the financial statements of the Company in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway and of the consolidated financial statements of the Group in accordance with International Financial Reporting Standards as adopted by the EU, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company's and the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or the Group, or to cease operations, or has no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
Penneo Dokumentnøkkel: QP2X8-8MTVX-6FW5K-2BLKE-NE6LV-IWE7L
Independent auditor's report - StrongPoint ASA 2022
| 4 | |
|---|---|
| Penneo Dokumentnøkkel: QP2X8-8MTVX-6FW5K-2BLKE-NE6LV-IWE7L | |
We communicate with the board of directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the audit committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the board of directors, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Opinion
As part of the audit of the financial statements of StrongPoint ASA we have performed an assurance engagement to obtain reasonable assurance about whether the financial statements included in the annual report, with the file name «strongpoint-2022-12 -31 -en», have been prepared, in all material respects, in compliance with the requirements of the Commission Delegated Regulation (EU) 2019/815
5
Independent auditor's report - StrongPoint ASA 2022
A member firm of Ernst & Young Global Limited
on the European Single Electronic Format (ESEF Regulation) and regulation pursuant to Section 5-5 of the Norwegian Securities Trading Act, which includes requirements related to the preparation of the annual report in XHTML format and iXBRL tagging of the consolidated financial statements.
In our opinion, the financial statements, included in the annual report, have been prepared, in all material respects, in compliance with the ESEF Regulation.
Management is responsible for the preparation of the annual report in compliance with the ESEF Regulation. This responsibility comprises an adequate process and such internal control as management determines is necessary.
Our responsibility, based on audit evidence obtained, is to express an opinion on whether, in all material respects, the financial statements included in the annual report have been prepared in accordance with the ESEF Regulation. We conduct our work in accordance with the International Standard for Assurance Engagements (ISAE) 3000 – "Assurance engagements other than audits or reviews of historical financial information". The standard requires us to plan and perform procedures to obtain reasonable assurance about whether the financial statements included in the annual report have been prepared in accordance with the ESEF Regulation.
As part of our work, we perform procedures to obtain an understanding of the company's processes for preparing the financial statements in accordance with the ESEF Regulation. We test whether the financial statements are presented in XHTML-format. We evaluate the completeness and accuracy of the iXBRL tagging of the consolidated financial statements and assess management's use of judgement. Our procedures include reconciliation of the iXBRL tagged data with the audited financial statements in human-readable format. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Oslo, 20 March 2023 ERNST & YOUNG AS
The auditor's report is signed electronically
Finn Espen Sellæg State Authorised Public Accountant (Norway) Penneo Dokumentnøkkel: QP2X8-8MTVX-6FW5K-2BLKE-NE6LV-IWE7L
StrongPoint ASA | Slynga 10, 2005 Rælingen | Tel: +47 934 03 254 | strongpoint.com
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