TCM Group A/S - 2022 Annual Report

TCM-GROUP
Skautrupvej 16
7500 Holstebro
37291269
529900P5DOKT3XLWL480
2022-01-01
2022-12-31
2021-01-01
2021-12-31

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504
Regnskabsklasse D
Årsrapport
37291269
TCM Group A/S
Skautrupvej 16
7500 Holstebro

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Annual report 2022 TCM Group A/S

Skautrupvej 16, DK-Holstebro, Denmark, CVR Nr. 37291269

Chairman and CEO’s report
Financial Highlights
Our business
Corporate governance
ESG
Financial statements

TCM Group Annual report 2022 - 2

Our purpose

Our overall purpose is to create a better home life for everyone. Regardless of family constellation’s, housing type and financial situation. We create better kitchen environments for the heart of your home. We want to be a contributor to our customer’s everyday happiness, and we do so by working together across teams and organizations, always with the customer in focus.

Svane Køkkenet INFINITY Leaf

Front page photo

Chairman and CEO’s report
Financial Highlights
Our business
Corporate governance
ESG
Financial statements

TCM Group Annual report 2022 - 3

About TCM Group

TCM Group is Scandinavia’s third largest kitchen manufacturer, with headquarter in Denmark and selling through approximately 140 stores across Scandinavia. The majority of our business is concentrated in Denmark with Norway being the primary export market. The product offering includes kitchen, bathroom and storage solutions. TCM Group pursues a multi-brand strategy, under which the main brand is Svane Køkkenet and the other brands are Tvis køkken, Nettoline and private label. Combined, the brands cover the entire price spectrum. Products are mainly marketed through a network of franchise stores and independent kitchen retailers. Furthermore, TCM Group is supplier to the 45% owned e-commerce kitchen business Celebert, which operates under the brands kitchn.dk, billigskabe.dk, Celebert and Just Wood. Manufacturing is to a large extent carried out in-house at three manufacturing sites located in Tvis and Aulum (in the western part of Denmark). TCM Group is listed on Nasdaq Copenhagen.

Svane køkkenet 2 INFINITY Leaf 1 Nettoline Satin mat sort

Chairman and CEO’s report
Financial Highlights
Our business
Corporate governance
ESG
Financial statements

TCM Group Annual report 2022 - 4

02 management report

05 Chairman and CEO’s report
06 Letter to our Shareholders
07 Financial Highlights
08 Financial Highlights
09 Business review
10 Key figures and ratios
11 Financial review

13 Our business
14 Strategy and financial targets
16 Danish design and Danish production
17 Risk management

19 CoRporate governance
20 Corporate governance
22 Board of Directors and Executive Management
24 Shareholder information

26 ESG
27 ESG strategy and approach
28 A sustainable work life
29 We take responsibility
31 New ways ahead
33 Highlights 2022
34 ESG key figures
36 Together we improve
37 Governance

40 Financial statements
41 Consolidated financial statements
42 Income statement
42 Statement of comprehensive income
43 Balance sheet as of 31 December
44 Statement of changes in equity
44 Cash flow statement
45 Notes to the financial statements
65 Definitions

66 Financial statements of the Parent company
67 Income statement
67 Statement of comprehensive income
67 Balance sheet as of 31 December
68 Changes in shareholders´s equity
69 Cash flow statement
69 Notes to the parent financial statements

74 Independent auditor’s reporT

Chairman and CEO’s report
Financial Highlights
Our business
Corporate governance
ESG
Financial statements

TCM Group Annual report 2022 - 5

Chairman and CEO’s report

At Svane Køkkenet, we are driven by innovation. We are constantly challenging the established by curiously going new ways.

S19 Brændt Grå

Chairman and CEO’s report
Financial Highlights
Our business
Corporate governance
ESG
Financial statements

TCM Group Annual report 2022 - 6

Letter to our Shareholders

At this time last year, with the Covid-19 pandemic receding, we, along with many others, had a clear expectation the exceptional year 2021 would be followed by a return to “normality” in 2022. Soon after, Russia invaded Ukraine, shattering any such hope and ensuring that 2022 would also be a year far from normal.

Macro economic headwind during 2022 with high inflation a.o. following the war in Ukraine, higher energy costs, higher interest rates etc. has led to a slowdown of the Danish housing market with a significant drop in number of houses sold and order intake from house builders. This has impacted the kitchen market with lower demand especially within B2C. As a consequence of the above, we expect lower activity in 2023 in general and we believe B2C sales will continue to be low going into 2023.

With Covid-19 behind 2022 started out optimistically and characterized by a high demand and activity level. Following the Russian invasion of Ukraine in late February uncertainty about supply chains in general and the risk of energy shortages in particular led to higher energy costs and higher raw material prices. Furthermore, the sharp increase in inflation prompted a significant rise in interest rates and the booming housing market halted sharply during the year leading to a drop in the demand for kitchens.

With the currently uncertain situation both economically and politically the outlook for the kitchen market in 2023 is very cloudy. We remain cautious and vigilant and ready to react to any changes in the demand situation.

raw materials and components we experienced throughout 2022. The higher input costs were passed on to our customers through multiple sales price increases, but naturally the mitigating impact from the sales price increases comes with some delay. As a consequence the significant cost price inflation we saw in 2022 had a significant adverse net influence on the earnings in TCM Group in 2022 as a whole. As the supply situation normalised towards the end of 2022, we expect a more stable input cost level for the coming year. The development in 2023 is characterised by a high degree of uncertainty with regards to the macro economic development and the derived effect on the demand for kitchens.# Chairman and CEO’s report

TCM Group beneﬁts from a high degree of variability in the cost base and thus is well suited to retain proﬁtability even under adverse conditions and we remain committed to develop our brands and the store network further in 2023. Based on the above, we have widened our range for the ﬁnancial outlook for 2023 compared to previous years. Our ﬁnancial outlook for full year revenue for 2023 is in the range of DKK 950- 1,050 million and adjusted EBIT in the range of DKK 70-100 million.

Given the backdrop of a general slowdown in the Danish kitchen market during 2022, we consider the organic like-for-like growth in our core business* in Denmark of 4.5% as satisfactory. Furthermore, our strategic focus on the Norwegian market resulted in a revenue growth outside Denmark of 17.2% in 2022, albeit from a low starting point.

During 2022, we added three new Svane Køkkenet stores in Norway as well as a new and unique ﬂagship store in the Copenhagen area. Furthermore, additional new stores were added to the Tvis køkken and Nettoline brands. We will continue to add more stores in Norway and to consolidate our strong position in the Danish market. Finally, we would like to thank our employees and business partners for their dedicated eﬀorts during a year with many challenges.

With the slowdown in the danish kitchen market during 2022 in mind, the organic like-for-line growth in our core business in Denmark of 4.5% is deemed satisfatory. During 2022 the beneﬁt of our strong position in B2B were clearly demonstrated. As the slowdown in demand began to impact B2C sales in the second half of 2022, our sales were supported by a strong long tailed pipeline with B2B, which helped to keep production close to capacity throughout the year. However, the slowdown in B2C sales had a negative impact on the gross margin as it meant that high margin B2C sales were replaced by lower margin B2B project sales during the year. Thus the gross margin was negatively impacted by the change in sales mix in 2022.

During 2022 we completed the share buy back program of DKK 150 million and cancelled c. 9% of the number of shares. In addition, we distributed an ordinary dividend of DKK 54 million. As a consequence of a higher degree of uncertainty, the Board of Directors has decided not to propose a distribution of an ordinary dividend, and instead propose to the upcoming Annual General Meeting, that a mandate is provided to the Board of Directors with the option to distribute a dividend during the second half of 2023 of up to DKK 30 million.

Sanna Mari Torben Paulin Suvanto-Harsaae
* Organic like-for-like growth in core business is revenue excluding 3rd party revenue and the merge the e-commerce activities Celebert/kitchn.dk.
Chairman CEO

In addition, gross margin was negatively impacted by the signiﬁcantly higher prices on raw materials and components.

TCM Group has been a member of the United National Global Compact since 2011 and commits to the 10 UNGC principles.

Financial Highlights

We rethink expressions and materials. We add functional technology. This is how we create modern living spaces that add tranquility, energy and luxury to everyday life.

TCM Group Annual report 2022


		Chairman and CEO’s report	Financial Highlights	Our business

Corporate governance	ESG	Financial statements	TCM Group Annual report 2022	7

Financial highlights


Total of Revenue, DKK	94	Revenue	Revenue growth	AVERAGE NO. of EMPLOYEES
	1,146		3.4%	496
	Mio.		(91)
	(1,108)
			Stores	Other countries
			3	10%
			(504)	(9)

			Denmark
			90%
			(1,108)

Adjusted EBIT, DKK	Mio.	Adjusted EBIT Margin	NWC ratio (31 December)	LEVERAGE RATIO (31 december)
103	(138)	-5.0 %	2.35	-1.33
(12.4)		9.0 %
		(7.4)
Svane Køkkenet	28	Tvis køkken	25	Nettoline
103

TCM Group Annual report 2022


			Chairman and CEO’s report	Financial Highlights
Our business	Corporate governance	ESG	Financial statements	TCM Group Annual report 2022
9

stated in the Annual report 2021, was DKK 1,150- 1,225 million.

Business review

Within Svane Køkkenet a new unique ﬂagship store opened in the Greater Copenhagen area, and three new stores opened in Norway. This was oﬀset by a closure of the store in Taastrup as part of the restructuring of the store network, and the closure of a store in Mandal, Norway. Within Tvis køkken a new store opened in Slagelse, whereas a few Norwegian dealers converted to private label customers and transferred to Nettoline and thereby are no longer considered branded stores. In the Nettoline brand new stores opened in Næstved, Odense and Ringsted.

Reported revenue grew by 3.4% in 2022 to DKK 1,146 million (DKK 1,108 million). The organic like-for-like growth in the core business was 6.0% (revenue excluding 3rd party revenue and the merge of the e-commerce activities Celebert/ kitchn.dk). Revenue in Denmark grew from DKK 1,011 million in 2021 to DKK 1,032 million corresponding to an increase of 2.1%. The organic like-for-like growth in the core business in Denmark was 4.5% (excluding 3rd party revenue and the merge of the e-commerce activities Celebert/kitchn.dk). Revenue outside Denmark grew from DKK 97 million in 2021 to DKK 114 million corresponding to an increase of 17.2%. The growth was driven by both same store growth and revenue from new stores in Norway primarily within Svane Køkkenet. The number of branded stores increased to 94 during 2022.

The slowdown in the kitchen market during 2022 initially impacted the B2C sales, which declined in the second half of the year. The long term strategic focus on B2B pursued by TCM for a number of years proved its worth, as strong B2B pipeline ensured that overall sales remained strong in spite of the slowdown in B2C sales during H2 2022. However, the change in sales mix with lower B2C sales oﬀset by higher B2B project sales had a negative impact on gross margin. Furthermore, gross margin was negatively impacted by signiﬁcant higher cost prices on raw materials and components. The higher input costs were passed on to our customers through multiple sales price increases during the year. However, the mitigating impact from the implemented sales price increases came with some delay resulting in a lower gross margin 20.4% compared to 23.0% in 2021.

Tvis Køkken strategy of TCM Group. In 2022 TCM launched new products in all of the three brands a.o. the new H22 in Svane Køkkenet, Tirano Nordic oak in Nettoline, and the MG50 line in Tvis køkken. With the launch of INFINITY in Svane Køkkenet 2023, TCM Group takes another big step towards working with circular product design.

At the end of December 2022 the number of employees was 482.

M-line Mørk Eg Momento Antracit

Reported revenue of DKK 1,146 million was in line with the latest ﬁnancial outlook of DKK 1,120- 1,160 million. Initial ﬁnancial outlook for 2022, stated in the Annual report 2021, was DKK 1,150- 1,225 million.

The focus on sustainability and our ESG strategy continued in 2022. Among other achievements TCM delivered a signiﬁcant reduction in the Co2 emissions of the group (scope 1+2) of 18% compared to 2021. This was a good step forwards towards the ambition of TCM, which is to achieve a Co2 neutral production by 2028. To promote diversity and inclusion, TCM during 2022 formed a diversity and inclusion policy, formalizing the work towards ensuring minimum 40% representation of the underrepresented gender throughout the organisation. Please refer to the ESG section for further information.

Innovation and development of new attractively designed products following the latest trends and customer demands plays an important role of the production capacity in the remaining two shifts. At

Within Svane Køkkenet a new unigue flagship store opened in The Greather Copenhagen area. Adjusted EBIT ended at DKK 103.4 million compared to DKK 137.8 million in 2021 and the latest ﬁnancial outlook in the range of DKK 100- 130 million. Initial ﬁnancial outlook for 2022, stated in the Annual report 2021, was DKK 140- 170 million.

The average number of employees in 2022 was 496 compared to 504 in 2021. Towards the end of the year the third shift (night shift) was shut down and the organisation was restructured. The restructuring was implemented to mitigate the slowdown in demand and the third shift was discontinued as increased eﬃcienty in the production sites has increased the overall production capacity in the remaining two shifts.

94 Branded stores at the end of 2022

TCM Group Annual report 2022


			10
Key figures and ratios	DKK’000	2022	2021	2020
2019*	2018	DKK’000	2022	2021
2020	2019*	2018

Income statement
Revenue	1,146,052	1,108,274	1,024,588	1,006,942
899,911
Growth ratios
Revenue growth, %	3.4%	-8.1%	8.2%	-6.7%
-1.4%
Gross proﬁt growth, %	-24.9%	-30.0%	-36.3%	1.8%
2.8%
Adjusted EBIT growth, %	-8.1%	11.9%	6.4%	9.6%
7.3%
EBIT growth, %	13.7%	21.6%	70.7%	116.1%
10.1%
Gross proﬁt	234,020	254,601	272,819	156,058
161,058

Earnings before interest.
tax. depreciation and
amortisation (EBITDA)	142,277	279,622	167,387	174,399
154,118
Adjusted EBITDA	262,835	-24.9%	-30.0%	-36.3%
-25.9%
Net proﬁt growth, %	8.3%

Earnings before interest.# Chairman and CEO’s report

Financial Highlights

Our business Corporate governance ESG Financial statements TCM Group Annual report 2022 11

Operating expenses - cost ratio 11.4%

Operating expenses in 2022 were DKK 130.6 million (DKK 116.8 million). The increase in operating expenses of DKK 13.8 million was primarily due to higher marketing spend a.o. related to product launches in all three brands, higher costs related to new stores opened during the year, and an increase in the provisions made to cover potential losses on debtors, given the higher macro economic uncertainty. Operating expenses amounted to 11.4% of revenue in 2022 against 10.5% in 2021.

Revenue (DKKM)	Adjusted Ebit (DKKM)
1400	220
1200	200
1000	180
800	160
600	140
400	120
200	100
0	80
	60
	40
	20
	0

Financial review

Revenue - 6.0% core organic like-for-like growth

Revenue in 2022 grew by 3.4% to DKK 1,146.1 million (DKK 1,108.3 million).

Revenue in Denmark was DKK 1,032.5 million (DKK 1,011.4 million). The organic like-for-like growth in the core business was 4.5% excluding third party revenue and the effect from the merge of the e-commerce activities in kitchn.dk and Celebert.

Revenue in Other countries was DKK 113.6 million (DKK 96.9 million), up 17.2%.

Adjusted EBITDA – 10.6% margin

Adjusted EBITDA in 2022 was DKK 121.3 million (DKK 154.7 million), corresponding to an EBITDA margin of 10.6% (14.0%). The decrease in Adjusted EBITDA margin was primarily driven by a lower gross margin.

Adjusted EBIT – 9.0% margin

Adjusted EBIT in 2022 was DKK 103.4 million (DKK 137.8 million), corresponding to an adjusted EBIT margin of 9.0% (12.4%). The decrease in adjusted EBIT was driven by a lower gross margin. Depreciations and amortizations were DKK 18.0 million (DKK 16.9 million).

Gross profit - gross margin of 20.4%

Gross profit in 2022 was 234.0 DKK million (DKK 254.6 million), corresponding to a gross margin of 20.4% (23.0%). The merge of the e-commerce activities in kitchn.dk and Celebert had a technical negative impact on gross margin of 0.5%-point compared to 2021. The Russian invasion of Ukraine led to further input cost inflation, which has been mitigated through sales price increase. The impact from the sales price increases though implemented immediately came with some delay, and therefore the gross margin for the financial year as a whole, has been negatively impacted by the rise of cost of raw materials and energy etc. During the second half of the year B2C sales declined resulting in a sales mix with a higher share of lower margin B2B project sales.The change in sales mix had a significant negative impact on gross margin in the second half of the year.

Non-recurring items

TCM Group presents non-recurring items separately to ensure comparability. Non-recurring items consist of income and expenses that are special and of a non-recurring nature. For 2022 non-recurring items consist of costs related to Covid-19 and supply chain disruptions, restructuring costs related to the restructuring of the store network in the Greater Copenhagen area as well as organisational restructuring carried out during 2022. The non-recurring costs are partly offset by a non-recurring gain from the final earn-out from the Celebert/kitchn.dk transaction. The non-recurring items are specified next page:

Reported revenue growth	Adjusted EBIT margin
3.4%	9.0%

Figures in brackets refer to the corresponding period in 2021.

Our business Corporate governance ESG Financial statements TCM Group Annual report 2022 12

Net working capital (dkkm)

Non-recurring items, DKK m	2022	2021
Costs related to Covid-19 and supply chain disruptions	5.4	14.0
Restructuring	4.7	1.3
Net gain from the Celebert/ kitchn.dk transaction	-3.5	-13.5
Gain from the divestment of an own operated store	0.0	-2.5
Total	6.5	-0.7

Equity - solvency ratio 43.4%

Trade receivables and other receivables increased by DKK 9.9 million. The increase was driven by higher trade receivables due to accruals as a result of the normal production shutdown during Christmas holidays starting later than previous years leading to a higher number of outstanding debtor days as of 31 December compared to 2021. Other receivables as of 31 December 2022 is excluding the value of DKK 8.3 million, which relates to subleases due to the implementation of IFRS 16. This is not included in the net working capital.

Equity at the end of 2022 amounted to DKK 420.6 million (DKK 419.7 million). The equity increased by DKK 0.9 million since 1 January 2022. The net profit for the year was offset by the dividend distribution of DKK 54.4 million and the completion of the share buy back program initiated in 2021, of which DKK 14.4 million of the total of DKK 150 million has been carried out during 2022.

The solvency ratio was 43.4% at the end of 2022 (46.3%).

EBIT

EBIT for the financial year 2022 was DKK 96.9 million (DKK 138.4 million). The decrease in EBIT compared to 2021 was driven by a lower gross margin and non-recurring costs. The operating liabilities decreased by DKK 11.8 million driven by lower trade payables due to a reduction in supply of raw material towards the end of the year as the buffer levels for inventory were reduced.

Events after the balance sheet date

Apart from the events recognized or disclosed in the annual report, no other events have occurred after the balance sheet date to this date which would influence the evaluation of this annual report.

Net profit

Net profit for the financial year 2022 was DKK 70.5 million (DKK 110.7 million).

Equity at the end of | Net interest-bearing debt – leverage ratio | 2.35
2022 amounted to DKK 420.6 million. The sol- vency ratio was 43.4% at the end of 2022.

Free cash flow excl. acquisitions of operation

Free cash flow excl. acquisitions of operations for 2022 was DKK 39.5 million against DKK 44.5 million in 2021. Free cash flow was negatively impacted by a lower operating profit and a change in NWC of DKK -35.9 million compared to DKK -38.3 million in 2021.

Net interest-bearing debt

Net interest-bearing debt amounted to DKK 288.1 million at the end of 2022 (DKK 199.5 million). The increase in net interest-bearing debt was a.o.

due to the completion of the share buyback program initiated in 2021 and the distribution of dividend of DKK 54.4 million.

Cash conversion in 2022 was 61.0% (58.3%).

Net working capital - NWC ratio -5.0%

Net working capital at the end of 2022 was DKK -57.1 million (DKK -81.6 million). NWC ratio at the end of 2022 was -5.0 (-7.4%).

NWC ratio (%)	Leverage ratio
-5.0	2.35

The increase in inventory of DKK 2.9 million was due to impact from increased raw material prices. During the unstable supply situation during the Covid-19 pandemic,it was decided to increase inventory levels to create a buffer against supply chain disruptions. As the supply chain situation normalised during 2022, the buffer levels for inventory were reduced towards the end of the year.

Tvis Køkken	M-line	Eg	Momento	Kridt	Hvid

Our business Corporate governance ESG Financial statements TCM Group Annual report 2022 13

Nettoline kitchens are made for everyday life. Our kitchens are created for the user – not the other way around. Our kitchens are born out of the idea that functionality, design, and price are not opposites.

Income statement	2022	2021	2020	2019	2018	2017	2016	2015	2014	2013
Revenue (DKKM)	1,146.1	1,108.3	1,054.9	1,011.4	969.1	913.7	859.2	825.9	750.0	700.0
Gross profit (DKKM)	234.0	254.6	227.9	230.3	175.9	153.6	146.5	132.3	101.0	75.0
Operating profit (EBIT) (DKKM)	96.9	138.4	111.3	132.3	103.7	135.7	130.7	138.1	90.7	51.7
Profit before tax (DKKM)	103.4	137.8	96.9	138.4	111.3	132.3	103.7	135.7	130.7	102.2
Net profit for the year (DKKM)	70.5	110.7	82.6	111.3	96.9	103.4	103.3	96.9	70.5	43.0
Other ratios
Gross margin, %	20.4%	23.0%	21.6%	22.8%	18.1%	16.8%	17.0%	15.7%	13.5%	10.7%
EBIT margin, %	8.5%	12.5%	10.5%	13.1%	10.6%	12.4%	12.5%	11.5%	9.5%	7.3%
Adjusted EBITDA margin, %	10.6%	14.0%	12.5%	13.6%	10.6%	12.5%	13.1%	13.6%	11.5%	10.2%
Adjusted EBIT margin, %	9.0%	12.4%	10.3%	11.5%	9.0%	10.6%	10.5%	10.3%	8.5%	7.7%
Balance sheet
Total assets (DKKM)	970.2	907.3	929.5	911.1	844.0	574.4	420.6	419.7	288.1	199.5
Equity (DKKM)	420.6	419.7	425.4	418.8	373.5	330.7	288.1	199.5	116.9	51.7
Net interest-bearing debt (NIBD) (DKKM)	288.1	199.5	116.9	51.7	90.7	108.9	108.8	94.1	57.1	14.1
Net working capital (NWC) (DKKM)	-57.1	-81.6	-94.1	-108.9	-116.9	-42.9	-57.1	-81.6	-94.1	-108.9
Solvency ratio, %	43.4%	46.3%	45.8%	45.1%	44.3%	57.6%	61.8%	48.4%	51.9%	25.6%
Leverage ratio	0.69	0.48	0.27	0.12	0.24	0.33	0.38	0.47	0.49	0.27
NWC ratio, %	-5.0%	-7.4%	-8.2%	-9.6%	-10.5%	-7.4%	-10.5%	-11.4%	-10.8%	-5.0%
Cash Flow
Operating cash ﬂow before acquisitions of operations (DKKM)	39.5	44.5	30.9	15.0	14.9	14.1	9.2	7.7	4.0	2.3
Capex excl. acquisitions (DKKM)	22.7	29.2	31.0	10.0	10.0	10.0	10.0	10.0	10.0	10.0
Capex ratio excl. acquisitions, %	2.0%	2.6%	2.9%	1.0%	1.0%	1.1%	1.2%	1.0%	1.3%	1.4%
Cash conversion, %	61.0%	58.3%	85.8%	99.9%	100.0%	99.9%	100.0%	100.0%	100.0%	100.0%
Share information
Number of outstanding shares	9,067,294	9,074,847	9,174,073	10,000,000	10,000,000	10,000,000	10,000,000	10,000,000	10,000,000	10,000,000
Weighted average number of outstanding shares	9,074,847	9,174,073	10,000,000	10,000,000	10,000,000	10,000,000	10,000,000	10,000,000	10,000,000	10,000,000
Number of treasury shares	0	0	0	0	0	0	0	0	0	0
Earnings per share before dilution, DKK	7.77	11.55	8.26	11.13	9.69	10.33	10.33	9.69	7.05	4.30
Earnings per share after dilution, DKK	7.75	11.54	8.25	11.11	9.68	10.31	10.31	9.68	7.04	4.29

As of 1 January 2019 IFRS 16 Leases is implemented without restating comparative figures, why 2019 is not directly comparable to previous periods. Reference is made to description in note 1 Accounting policies. Reference to definitions of Key figures and ratios - see page 65# TCM Group Annual report 2022

Chairman and CEO’s report

Financial Highlights

Our business

We will be the customers’ first choice of kitchens. We create better kitchen environments for the heart of your home. Strengthen the value chain through continuous improvement. Friendly and professional customer service throughout the value chain. Aim for double-digit annual Agile and flexible supply chain. Responsibility for people, planet and products. Strategic revenue growth. Choices. Realize the potential. Create capacity through simplification. Develop competencies and resources. Quality in everything we do. New customer service concept. Strategic in Norway. Initiatives. Invest in efficient production facilities. A proactive and result-oriented mindset. Brand and product development. Increase digitalization. Enablers. Ambition - Team Spirit - Pride. Values.

Strategy

The Tvis køkken brand has opened and relocated several stores in the past years, but there are still a few white spots in Denmark to be addressed. Market share and brand awareness is to be increased in line with the development of the store network. During 2022 we have put even more effort into product development for the Tvis køkken brand through the new MG50 line designed by Morten Georgsen and a repositioning of the brand a.o. via a new logo. In all that we do, we are determined to do this as responsible as possible with regards to people, planet and products. A cross functional task force is identifying and driving initiatives within these three important areas. We refer to the separate ESG section for further elaboration of our strategic targets and initiatives. TCM Group’s overall strategy is to aim for double-digit annual growth rates short- to mid- term. This means that we aim for growth in all brands, markets and channels. Even though we invest in growth, our target is to remain in the top tier of the kitchen industry with regards to profitability and cash flow. This will be achieved through investments and optimization in our production and supply chain setup. In addition to organic growth, the Group is monitoring the market for attractive acquisition opportunities primarily in Scandinavia.

Strategy and financial targets

Even though we invest in growth, our target is to remain in the top tier of the kitchen industry with regards to profitability and cash flow. The Nettoline brand is selling through single brand stores in Denmark and multibrand stores in Norway. In both markets there is room for additional stores, which will grow the brand awareness and turnover. The cooperation with private labels clients will continue as seen in the recent years.

Strategic choices and initiatives in the growth strategy:

The Svane Køkkenet branded store network is fully established in Denmark, however there is still room for growing market share, both within the B2C and the B2B segment. In recent years we have increased our focus on the B2B segment with the ambition to gain further market share as a contributor to growth in revenue and earnings. Furthermore, the B2B segment has a different cycle compared to the B2C segment a.o. including a pipeline with a longer time horizon, which is a positive factor in case of a recession scenario. Towards the end of 2022 the strategy has proven to be right as we have seen a slowdown in the B2C segment, whereas the order intake in B2B remained solid. To further strengthen the distribution network in the B2B segment, we have built cluster store networks in the three biggest cities in Denmark in cooperation with our franchisees.

Financial outlook 2023

TCM Group estimates revenue for the financial year 2023 to be in the range DKK 950-1,050 million. The online activity with brands kitchn.dk, billigskabe.dk, Celebert and Just Wood is expected to continue to gain a greater share of the kitchen market in Denmark, and during 2022 we started selling to the Norwegian and Swedish markets through the online channel. EBIT* is estimated to be in the range DKK 70-100 million.

*EBIT excluding non-recurring items

To extend the different positionings of our brands and being our customers’ first choice for the heart of their homes, we will continue to develop new, exciting and sustainable kitchen, bath and storage solutions, designs and functionalities.

To support the growth ambitions in all brands and markets, we continue to invest in increased capacity and flexibility in our three factories, step by step as demand emerge short-term while also having a focus on supporting our long-term growth ambitions. Furthermore, we focus on increasing productivity and efficiency as well as improving quality. We will invest in further digitalizing all important processes in the supply chain, in the administration and in the retail network, and thereby continuously improve and strengthen the entire value chain of our business. For Svane Køkkenet in Norway, the mid-term target is to open another 6-8 stores, and thereby to bring the store network up to 18-20 stores. 3 new stores opened during 2022, and the search for further new stores is ongoing. As market share and brand awareness for the Svane brand in Norway is relatively low, same store growth and marketing activities will grow hand in hand over the coming years.

Forward looking statements

This report contains statements relating to the future, including statements regarding TCM Group’s future operating results, financial position, cash flows, business strategy and plans for the future. The statements are based on management’s reasonable expectations and forecasts at the time of the disclosure of the report. Any such statements are subject to risks and uncertainties, and a number of different factors, many of which are beyond TCM Group’s control, could mean that actual performance and actual results will differ significantly from the expectations expressed in this annual report. Without being exhaustive, such factors include general economic and commercial factors, including market and competitive matters, supplier issues and financial issues.

Our business

Danish design production sites 2022

TCM Group’s production sites are located in Tvis and Aulum, with two factories in Tvis and one factory in Aulum.

	Tvis and danish production	Total store openings branded stores
2022	8
(branded stores include Svane Køkkenet, Tvis køkken and Danish Nettoline stores)		4
Svane Køkkenet		1
Tvis køkken		3
Nettoline		3
31 december 2022	94

Storage solutions e.g. sliding doors

Products production in Denmark. This ensures that we can offer customized kitchens with a wide selection of designs, colors and functions.

Table tops	Cabinets	Fronts
Denmark	Denmark	Denmark
Norway	Norway	Norway
Faroe Islands	Sweden	Sweden
	Iceland	Iceland
	Faroe Islands	Faroe Islands

E-COMMERCE IN CELEBERT

Private Label
Denmark
Norway
Sweden
Iceland
Faroe Islands

risk management

Risk management is an integral part of the management process at TCM Group. The objective is to limit uncertainties and risks with respect to the defined financial targets and strategic objectives for the Group. Management performs a yearly assessment of business risks. A follow-up process has been established with the purpose of describing and evaluating a variety of business risks within the Group and implementing procedures to ensure risk mitigation. This assessment is discussed and evaluated by the Board of Directors once a year. Business risks require financing and the Group may need to incur further debts or raise further equity capital to fund its acquisitions.

Production risks

The Group is exposed to risks of not being able to fulfill customer orders e.g., due to fire, machine failure or lack of personnel. Fire prevention is a management priority and is carried out in cooperation with our insurance company. We have our own maintenance department who in cooperation with external experts conduct the necessary machine maintenance and repairs. Besides this yearly assessment, the Board of Directors and the Executive Management have a continuous dialogue regarding significant risks with potential material impact on the Group.

Market risks

The Group is exposed to a decline in new housing construction and home sales as well as developments in the overall economy. The Group is order producing with a high degree of flexibility in the workforce, which means that the Group can respond quickly to market demand changes.

Customer risks

The Group’s risks relate primarily to the sales development of the stores, with sales being distributed through 94 Branded stores. Having typically a fragmented ownership of the stores, the operational risk is reduced. The debtor risk related to the stores represents the main financial risk and is closely monitored to minimize losses by primarily requiring appropriate collateral for current trading.

Reputational risks

Finally, we have a constructive cooperation with our production employees typically based on multi-year collective wage negotiation agreements. The Group considers the Svane Køkkenet, Tvis køkken and Nettoline brands to be some of the most important assets of the business. Thus, it is the Group’s policy to register its trademarks and design rights in the main markets in which its products are sold. The reputation of the Group’s brands is important for the attractiveness and customer appeal. Accordingly, the Group’s brand reputation is important for sustaining and growing the Group’s revenue and profitability.# Chairman and CEO’s report

Financial Highlights

Our business

Corporate governance

The Nomination Committee DATA PROTECTION POLICY In connection with TCM Group’s delivery of products and services within kitchen, bathroom and storage, TCM Group collects relevant data. Our policy regarding data protection and conﬁdentiality is accessible on our website at requirements for the Executive Management’s timely, accurate and adequate reporting to the Board of Directors and for the communication between these two corporate bodies are laid down in the rules of procedure of the Executive Management, which are reviewed annually and approved by the Board of Directors. The Board of Directors has set up a Nomination Committee comprising at least two members of the Board of Directors, where at least one is also a member of the Remuneration Committee. The Chairman of the Board of Directors is also the Chaiman of the Nomination Committee. The overall purpose of the Nomination Committee is to help the Board of Directors ensure that investor-en.tcmgroup.dk/CorporateGovernance TCM Group is committed to ex-ercising good corporate gover- nance, and the Board of Di- rectors therefore evaluates the Group’s management systems at least once a year to ensure that the structure is appropriate relative to the Group’s share- holders and other stakeholders. Composition of the Board of Directors appropriate plans and processes are in place for the nomination of candidates to the Board of Directors and the Executive Management. The Nomination Committee currently consists of 3 members, Sanna Suvanto- Harsaae, Anders Skole- Sørensen and Carsten Bjerg, and is led by Sanna Suvanto- Harsaae. The Nomination Committee held 4 meetings in the ﬁnancial year 2022. The Board of Directors currently consists of six members elected at general meetings and has elected a Chairman and a Deputy Chairman. The members of the Board of Directors are a group of professionally experienced businesspeople who also represent diversity, international experience and skills that are considered to be relevant to TCM Group. All members of the Board of Directors elected by the shareholders are regarded as independent. Corporate governance recommendations Remuneration Committee The Board of Directors has set up a Remuneration Committee comprising at least two members of the Board of Directors. The purpose of the Remuneration Committee is to ensure that the Group maintains a remuneration policy for the members of the Board of Directors and the Executive Management as well as general guidelines for incentive pay to the Executive Management. The Remuneration Committee consists currently of 3 members, Sanna Suvanto- Harsaae, Anders Skole-Sørensen and Carsten Bjerg, and is led by Sanna Suvanto- Harsaae. The Remuneration Committee held 3 meetings in the ﬁnancial year 2022. Nasdaq Copenhagen has incorporated the recommendations of the Danish Committee on Corporate Governance in its Rules for Issuers of Shares. These The Board of Directors determines once a year the qualiﬁcations, experience and skills the Board of Directors must possess in order for the Board of Directors to best perform its tasks, taking into account the Group’s current needs. The Board of Directors evaluates its work on an annual basis. All Board Members are up for election at each Annual General Meeting. recommendations are available at the website of the Committee on Corporate Governance, www.corporategovernance.dk. TCM Group complies with all these recommendations. The Group’s corporate governance statements are available on our website at Duties and responsibilities of the Board of Directors At TCM Group, management duties and responsibilities are divided between the company’s Board of Directors and Executive Management. No one person is a member of both these bodies, and no member of the Board of Directors has previously been a member of the Executive Management. TCM Group has laid down rules of procedure for the Board of Directors, which are reviewed annually. The Board of Directors holds 6 ordinary meetings each year and will further convene as needed. In the ﬁnancial year 2022, 12 board meetings were held. investor-en.tcmgroup.dk/CorporateGovernance Audit Committee The Board of Directors has set up an Audit Committee. The Chairman of the Audit Committee is independent and is skilled in accounting. The purpose of the Audit Committee includes monitoring the ﬁnancial reporting process, the company’s internal control and risk management systems and the collaboration with the independent auditors. The Audit Committee consists currently of 2 members, Sanna Suvanto- Harsaae and Anders Skole-Sørensen, and is led by Anders Skole-Sørensen. The Audit Committee held 7 meetings in the ﬁnancial year 2022. Remuneration of members of the Board of Directors and the Executive Management The Board of Directors has adopted a remuneration policy and general guidelines for incentive pay, which have been approved by the general meeting. Both policies are available at governance-en.tcmgroup.dk. The remuneration policy supports the goal of attracting, motivating and retaining qualiﬁed members of the Board of Directors and the Executive Management.

ESG

Risks related to IT

It is Management’s assessment that the current capital structure provides the necessary ﬂexibility to accelerate and support the Group’s future strategy. The Group has its own IT system, which is regularly maintained and updated. IT security is a top Group priority. We work with external experts to achieve a level of security appropriate for the Group.

Credit risk

The Group’s customer base comprises both professional customers and consumers. Credit management and payment terms are monitored for each customer group. The Group primarily provides credit to franchisees and dealers, which are the Group’s primary customers. Credit assessments are continuously performed on customers who make regular purchases. Bank guarantees, credit insurance, bank guarantees and other collaterals are utilized for the diﬀerent markets and customer categories.

Risks related to pollution and occupational health

Optimizing occupational health conditions and preventing both internal and external contamination are important focus areas at TCM Group’s production sites. The Group has a registration system for occupational accidents and near miss accidents focusing on the prevention of future incidents. An occupational health organization with participation from management and employee representatives is established and well functioning.

Currency risks

The Group is insured against signiﬁcant damage to property, plant and equipment and is in close dialogue with authorities and insurance The Group operates with a relatively low risk proﬁle with regards to currency ﬂuctuations. The Group does not purchase signiﬁcant amounts of raw materials outside the EUR area. Invoicing of sales is charged in DKK and NOK. In terms of invoicing of sales in NOK, the Group apply a hedging strategy to limit the impact of currency ﬂuctuations. Close to all revenue relates to Denmark, the rest of the Nordic region or the EUR zone and, therefore, foreign exchange risks are limited. companies with a view to further improving the mitigation of risks related to, inter alia, ﬁre and pollution. Production facilities are fully sprinkled and emphasis is placed on maintaining a high level of ﬁre hygiene in the Group.

Financial risks

Liquidity risks

The Board of Directors continuously assesses whether the Group’s capital structure is in line with the interests of the Group and its stakeholders. The overall goal is to secure a capital structure that supports long-term proﬁtable growth.

Interest rate risk

The group manages interest rate risk by applying a mix of bank loans and mortgage loans. It is Group policy to fully or partially hedge interest rate risks on loans if the interest rate risk is material. An interest rate increase of 1% will have a negative impact on TCM Group’s proﬁt of c. DKK 2 million. The Group’s ﬁnancial risks are managed centrally as well as the Group’s liquidity management, including cash requirement and placement of excess liquidity.

The risk management, including internal controls in the ﬁnancial reporting process, is designed to eﬀectively minimize the risk of errors and omissions in the ﬁnancial reporting. Raw material purchasing risks TCM Group aims to have multiple suppliers in each raw material category in order to improve commercial terms as well as to ensure adequate supply. The Executive Management is responsible for ensuring that risks are continuously identiﬁed, evaluated and mitigated in order to reduce the economic impact and/or likelihood of risks being realized. Following the Covid-19 outbreak, 2022 has been charaterized by global supply challenges and high inﬂation. TCM Group has mitigated the higher level of input costs through sales price increases. However, the eﬀect from the sales price increases have come with some delay. Strategy risks The success of the Group’s strategy is subject to several factors, some of which depend in full or in part on the Group’s ability to successfully execute certain initiatives, e.g. expansion via acquisitions of other players in the industry. Such acquisitions Below are the main identiﬁed business and ﬁnancial risks as well as comments on the actions undertaken within the individual areas:

Financial statements

TCM Group Annual report 2022 18

Svane Køkkenet Snedker Chairman and CEO’s report Financial Highlights Our business Corporate governance ESG Financial statements TCM Group Annual report 2022 19

A Tvis kitchen is a long-term choice of Danish quality for your home. We know because in 2022 we have been making kitchens for 70 years.

TCM Group Annual report 2022 20# Description of procedures and internal control in relation to the financial reporting process

The Board of Directors and the Executive Management are ultimately responsible for the Group’s risk management and internal controls in relation to its financial reporting and approve the Group’s general policies in this regard. The Audit Committee assists the Board of Directors in overseeing the reporting process and the most important risks. The Executive Management is responsible for the effectiveness of the internal controls and risk management and for the implementation of such controls aimed at mitigating the risk associated with the financial reporting.

The remuneration is designed to align the interests of The Group’s Executive Management is in charge of the day-to-day management, while the Board of Directors supervises the work of the Executive Management and is responsible for the overall management and strategic direction. In relation hereto, every year the Board of Directors 12 board meetings in 2022 considers the group’s overall strategy in order to support the achievement of TCM Group’s short-term and long-term strategic targets and stimulate value creation. Reference is made to note 4 in the consolidated financial statements for a specification of the remuneration paid to the Executive Management and the Board of Directors.

In addition to the above, the Group has developed internal control and procedures in relation to the financial reporting process with the aim to enable the Group to monitor the Group’s performance, operations, funding, risk and internal control. The Group continues to improve the internal control and procedures in relation to the financial reporting process and believes, that the current control and procedure in place enables the Group to be compliant with the disclosure obligations applying to issuers of shares on Nasdaq Copenhagen.

The internal controls and procedures in relation to the financial reporting process include, among others:

Weekly reports of incoming orders and gross and net revenue by month;
Monthly revenue reports, on a per store basis, of the Group’s sales to stores;
Consolidated monthly reports summarising results for legal entities including balance sheet and cash flow results in comparison to budgeted performance and previous year performance and explanations of deviations, together with key performance indicators;
Four-eye principle within the finance department to ensure the quality of the accounting records;
The predominant majority of all invoices received go through a standardised authorisation process. In addition, a detailed review of cost on account level is made in connection with the monthly reports.

The Company believes that the Group’s reporting and internal control systems enable it to be compliant with disclosure obligations applying to issuers whose shares are admitted to trading and official listing on Nasdaq Copenhagen.

As part of the overall risk management, the Group has set up internal control systems, that are deemed appropriate and sufficient in relation to the Group’s activities and operations. The internal control systems are evaluated on an ongoing basis. The procedures and controls are furthermore planned with a view to support the quality and efficiency of the Group’s business processes and the safeguarding of the Group’s assets. The evaluation of the risks includes an assessment of the likelihood that an error will occur and whether the financial impact of such error would be material.

Tax-policy

Our tax policy is designed to achieve a competitive taxation level in a socially responsible manner.

Board of Directors and Executive Management

Board of Directors

| | CARSTEN BJERG | Sanna Mari Suvanto-Harsaae | Anders Skole-Sørensen | SØREN MYGIND ESKILDSEN Members of the Board of Directors held at 31 December 2022 40,625 shares (31 December 2021 38,125 shares), and members of the Executive Management held 91,602 shares (31 December 2021 49,902 shares), in total 132,227 shares (31 December 2021 88,027 shares), equivalent to 1.4% of the share capital (31 December 2021 0.9%).

Key Dates:
* 13 April 2023: Annual General Meeting 2023
* 17 May 2023: Interim Report Q1 2023
* 18 August 2023: Interim Report Q2 2023
* 17 November 2023: Interim Report Q3 2023
* 28 February 2024: Interim Report Q4 2023 and Annual Report 2023
* 11 April 2024: Annual General Meeting 2024

Business Information:

Name	Registration No.	Domicile	Share
BI Asset Management	Fondsmæglerselskab A/S	Copenhagen, Denmark	12.3%
Paradigm Capital Value Fund		Luxembourg, Luxembourg	10.8%
Arbejdsmarkedets Tillægspension		Hillerød, Denmark	10.1%
Handelsbanken Fonder AB	20896477	Stockholm, Sweden	6.9%
Luxempart S.A.	B129149	Leudelange, Luxembourg	6.1%
Taiga Investment Funds PLC	43405810	Dublin, Ireland	5.3%
Paradigm Capital Value LP	556418-8851	Delaware, USA	5.2%
	B232467
	C49550

Chairman and CEO’s Report

Financial Highlights

Our Business

Corporate Governance

ESG

Financial Statements

TCM Group Annual report 2022 | 25

The Board of Directors has adopted a dividend policy with a target payout ratio of 40-60 percent of consolidated net profit for the year. The company’s investor relations website, investor.tcmgroup.dk, contains all official financial reports, investor presentations, the financial calendar, corporate governance documents and other material.

Dividend

During 2022, TCM Group distributed an ordinary dividend of DKK 6 per share. Excluding treasury shares this corresponds to a total distribution of DKK 54 million. For the financial year 2022, the Board of Directors has decided not to propose a distribution of an ordinary dividend, and instead propose to the upcoming Annual General Meeting, that a mandate is provided to the Board of Directors with the option to distribute a dividend during the second half of 2023 of up to DKK 30 million.

Analyst Coverage

TCM Group is currently covered by five analysts:

ABG Sundal Collier: Benjamin Silverstone
Aktieinfo: John Stihøj
Carnegie: Frederikke Due Olsen
Danske Bank: Poul Ernst Jessen
SEB: Ulrik Bak

Contact

For further information, please contact:

CEO: Torben Paulin +45 21210464
CFO: Mogens Elbrønd Pedersen +45 97435200
IR Contact mail: [email protected]

The Board of Directors has adopted a dividend policy with a target payout ratio of 40-60 percent of consolidated net profit for the year. Payment of dividends, and the amounts and timing thereof, will depend on a number of factors, including future revenue, profits, general financial and business conditions, strategic initiatives such as M&A activities or large scale investments decided upon by the Board of Directors, and such other factors as the Board of Directors may deem relevant as well as applicable legal and regulatory requirements. There can be no assurance that in any given year a dividend or share buyback will be proposed or declared or that the Company’s financial performance will allow it to adhere to the dividend policy or any increase in the pay-out ratio. The Company’s ability to pay dividends or buy back shares may be impaired as a result of various factors. Furthermore, the dividend policy is subject to change as decided by the Board of Directors from time to time.

Annual General Meeting

The annual general meeting will be held on Thursday, 13 April 2023 at 5 p.m. at Skautrupvej 22b, Tvis, 7500 Holstebro.

Share Information

Exchange: Nasdaq Copenhagen
Trading Symbol: TCM018
Identification Number/ISIN: DK0060915478
Number of Shares: 9.1 million shares of DKK 0.1 each with one vote
Share Classes: 1
Sector: Kitchens, bathrooms and storage
Segment: MID CAP

TCM Group Annual report 2022 | 26

Responsibility and Sustainability

Responsibility and sustainability have always been a part of the way we do business. Responsibility towards the environment, responsibility towards the customers and responsibility towards our employees and stakeholders. The chipboards that TCM Group uses for production consists of min. 90% recycled timber.

TCM Group Annual report 2022 | 27

UN Sustainable Development Goals (SDG)

1. Gender equality (target 5.5)
1. Decent work and economic growth (target 8.5 and 8.8)
1. Responsible consumption and production
1. Climate action
1. Life on Land

Highlights 2022

This section covers Communication on Progress according to United Nations Global Compact and the statutory statement by the Danish Financial Statements’ Act 99a, 99b, 99d and 107d.

Metric	2022	2021
CO2 emission reduction (scope 1 and 2)
Accidents
Sickdays caused by work accidents	18%	0.1%
Absence ratio related to work accidents

125 indoor climate certified Kitchen models certified: 100%
Waste recycle 2022: 83% By weight
RE:USE: 90%

Gender Equality

TCM Group has a target of having equal gender representation on the Board of Directors before 2026. As of 31 December 2022, the distribution is 17%/83% underrepresented gender, which means that the target is not met.

Representation:
* Board of Directors: 17%
* Management: 28%
* Employees: 36%

TCM Group Annual report 2022 | 28

ESG Strategy & Approach

Our value chain impact: The largest share of our impact in terms of sustainability originates from our value chain. As a result, we work actively to promote sustainability throughout the entire value chain with innovative product design, close cooperation with business partners, and a constant focus to improve across our value chain. Building on our longstanding commitment to responsibility we are very conscious of our responsibility towards society. Responsibility towards the environment, responsibility towards our customers, and responsibility towards our employees and stakeholders. In 2021 we launched our ESG strategy setting the direction to embed sustainability ever deeper in the way we do business. A strategy that is guided by the UN Sustainable Development Goals and builds on our core values and brands - and integrating sustainability throughout our value chain from raw materials to after-sales and service.

Our ESG strategy sets out transformative targets to drive decisions and actions within four areas of priority:

A sustainable work life
We take responsibility
New ways ahead
Together we improve

These are the areas where we believe we have the greatest impact on sustainable development through our business activities. Our systematic approach to sustainability makes us capable of strengthening our relationships with all key stakeholders and supporting business growth while continuously mitigating negative impacts by continuous learning and improvement.

Value Chain Breakdown:

Product Development: We develop high-quality products with long durability and sustainability is an integrated part of our design process.
Production: We work continuously with optimizing and minimizing the use of materials in manufacturing with an ongoing focus on health and safety.
Transport of Raw Materials: We work actively together with our suppliers to secure and promote the optimal form of transport.
Transport: We collaborate very closely with our external distributors to maximize truck loads and minimize distance.
Sales: We inspire, inform and challenge to provide the most sustainable solution for our customers.
Use: We ensure our kitchens are durable, of high quality, and labeled with the indoor climate certificate to reduce the impact on the indoor environment. The kitchens are customized to the customer’s specific needs to prolong the lifetime.

Waste and Recycling:
We work with materials and processes based on the foundation of RE:DUCE – RE:USE – RE:THINK and promote circular design and materials.

TCM Group has been a signatory to the UN Global Compact for more than a decade, and this ESG section serves as our annual Communication on Progress. We commit to the Ten Principles of the UN Global Compact on human rights, labor, environment, and anti-corruption.

TCM Group Annual report 2022 | 29

Human and Labor Rights

Our signatory to the UN Global Compact more than a decade ago testify to our long track record of working with human and labor rights. The primary risk we face in connection to non-compliance of human and labor rights are discrimination of employees and cases where specific conditions at our suppliers do not comply with these principles.

Sustainable Work Life

In TCM Group, we continually strive to provide the very best working environment. At our production sites, safety is our number one priority, and a lot of focus is on building and maintaining a safety culture to ensure that all our employees are safe while working. This means minimizing risks and enabling the best circumstances to provide a healthy and safe workplace for all our employees.

Work safety has a great impact on employees and their families, as well as communities and the business. In 2022, we have increased the number of working environment representatives and all representatives have obtained training in both physical and mental working environments. The latter includes specific upskilling on for example “the difficult conversation” with employees and colleagues. Furthermore, all, we celebrate the joint victories that the individual teams achieve.We already see early results in terms of an increase in knowledge sharing across locations and a reinforced focus on behavior and safety culture based on zero accidents. Our Employee Handbook and Code of Conduct guide our employees and suppliers in terms of human and labor rights. Our focus is to have the right mechanisms, systems, and programs in place to ensure no violations and promote responsibility toward others. We meet Danish and international standards regarding human rights as well as laws regarding equality and oﬀer fair and equal conditions in employment and working conditions, regardless of gender, ethnic origin, religion, and other personal circumstance. UN Global Compact principle 1, 2, 3, 4, 5, 6, 10 TCM Group’s continued success is relying on employing the most qualiﬁed people, and we are committed to ensuring a safe and healthy working environment, characterized by mutual trust and respect. We work actively to create "a sustainable work life" characterized by the following principles:

Sickdays and absence

#sickdays caused by work accidents	2022	2021	2020
	125

A safe and secure work environment that also enhances personal development. We monitor the occupational health and safety of our employees by measuring data on accidents, near-miss work accidents, as well as sickness absences. In 2022, we had a total of 19 accidents. Elleven accidents have resulted in a total of 125 days of absence after the accident. The other eight accidents did not result in absence, but in some cases required the employee to perform a less strenuous job for a period after the accident. The accidents were primarily related to behavior, where employees in their eager to do a good job disregarded safety instructions. The increase in number of accidents has been less signiﬁcant, and the large increase in the number of absences caused by accidents was driven by a few more severe accidents. We have further increased the focus on behavior and emphasized that no matter what, personal safety always come ﬁrst. Safety will continue to be on top of the agenda in the year to come.

Whistleblower hotline and internal controls

Our whistleblower hotline and internal controls make up key instruments for controlling and reporting potential violations by employees and third parties. Furthermore, we conduct arbitrary supplier audits to monitor compliance with human and labor rights standards. Read more on our whistleblower hotline and supplier management in speciﬁc sections (page 35 and page 36).

Flexibility to support a clear balance between work/private life, between individuals, teams, and organization.

Absence ratio related to work accidents in 2022	0.1%
Absence ratio related to sickness in 2022	4.38%

Reported near miss work accidents

#of reported near miss work accidents in TCM Group	2022	2021	2020
	937	896	1,159

Case: Code of Care

Our participation in the Code of Care is already showing a good impact. In 2022 engaged with a person with social autism that since starting a ﬂexible job has been able to increase working hours and next up is getting a truck certiﬁcate – a wish that seemed unrealistic to deliver on just a year ago.

Focus on ongoing learning

One of the guiding principles for sustainable working life is the training of our employees. We strive to continuously upskill our employees, so the value of the individual employee increases and the employee skills remain relevant both inside as well as outside of TCM Group. We work continuously with apprentices in TCM Group and in 2022 we had 6 apprentices in the Group. We have become more focused on hiring people with diﬀerent backgrounds to our oﬃces to reap the beneﬁts of diversity. We are also committed to creating positions with reduced working hours, wherever it is practically possible, and we continuously oﬀer citizens job clariﬁcation processes in close collaboration with the municipality.

Gender diversity (# of underrepresented gender)

	2022	2021	2020
Board of directors	1 of 6	1 of 5	1 of 5
	(17%)	(20%)	(20%)
Mgmt. (executive mgmt. and mgmt. group)	4 of 14	3 of 14	4 of 15
	(28%)	(21%)	(27%)
Total workforce of underrepresented gender	36%	32%	29%

Besides working with learning and training internally, our TCM Learning platform also covers the training of sales staﬀ for our brands and kitchen installers. In 2022, we have strengthened the competencies in TCM learning and we have taken active steps towards making training available when it is most relevant for the individual employee. In contrast, to oﬀer a ﬁxed course in a speciﬁc time slot. The objective is that the learning should be available when the employee needs it and can apply the learning in practice.

A talented and diverse workforce

At TCM Group we are convinced that a diverse and inclusive work environment will beneﬁt our business and our society in general. At TCM Group, we recognize the diﬀerences between our employees. We believe that diverse teams, including management groups, have a better as well as more innovative collaboration leading to better decision-making that are encouraging inclusiveness and tolerance among employees.

In 2022 we developed a new e-learning platform as part of TCM-learning. All our employees have been oﬀered a module focusing on ESG basics and the ESG strategy in TCM Group. 39% of our employees have completed the ESG training in 2022. In 2023 we continue training and expand our training catalogue to include training on sustainability in a commercial context including a focus on sustainable building schemes such as DGNB.
In TCM Group, we work actively to be a responsible workplace that recruits, promotes, and develops employees based on the individual's competencies and support diversity. We thus aim for our recruitment, promotions, terms of employment, and any dismissals to be carried out without regard to gender, age, nationality, sexual orientation, physical ability, disability, political opinion, ethnicity, family status, religiosity, or other beliefs. We also aim to achieve an appropriate equal distribution of men and women in managerial positions.
To promote diversity and inclusion, we have during 2022 formed a diversity and inclusion policy. The policy is available on TCM Group homepage. We constantly strive to ensure that every employee has the same Compensation.
At TCM Group it is our policy that equal jobs are rewarded with equal pay. Any diﬀerence in pay is solely based on qualiﬁcations and experience.
We seek to promote diversity and achieve sensible gender diversity in both the Board of directors and permanent connection to the labor market.

CEO total compensation relative to FTE average total compensation	Male/Female white collar only*
1.18	8.4

* We exclusively report on white collar as the hourly wage is calculated hourly and there is no diﬀerentiation.

We also aim to achieve an the Executive Management and other management levels. TCM Group aims for a gender composition in the rest of management as well as in the total workforce, where the underrepresented gender makes up at least 40% in line with the objective for the composition of the board of directors (see governance section page 36).
The current composition reﬂects the traditional gender distribution within manufacturing companies, where there is a predominance of male foremen, and at the administrative level, a slight predominance of female employees occurs.
A barrier for TCM Group to attract the right candidate and ensure a diverse workforce is the fact that many of our staﬀ do not speak other languages than Danish and the company language is Danish. This a challenge that we are very much aware of. As with everything else in our business we are constantly challenging ourselves and trying to move the needle in the right direction. For instance, we employed 28 refugees from Ukraine despite language diﬃculties. Even though the language is a barrier, by using on-job training and assigning mentors we succeeded in creating well functioning and balanced teams.
Tolerant workplace
We must take responsibility for training the next generation of qualiﬁed employees and give them the chance to learn relevant competencies and gain useful work experience. Throughout the year, TCM Group helps many people to gain practical work experience, all of whom for some reason need a helping hand to gain a foothold on the job market.
In 2022, the Group joined the work of Code of Care, a non-proﬁt organization that works to help citizens on the edge of the labor market back into regular employment. The work takes place within the framework of a task force consisting of local companies, which together identify "small jobs" that help citizens on the road to a sustainable work life.

Employee engagement in energy savings

Finally phasing out the surface treatment system based on natural gas, as well as the transition from natural gas to district heating and heat pumps are all important contributors to the positive development. This has led to a reduction in gas consumption at our production sites corresponding to respectively 15-20% and a reduction in consumption of oil for heating by more than 80%.
Due to the increased societal focus on energy savings and responsibility optimization TCM employees have initiated electric walks in production.# Chairman and CEO’s report

Financial Highlights

Our business

Corporate governance

ESG

Financial statements

TCM Group Annual report 2022 32

Environmental sustainability and emissions

Electric walks are comparable to safety walks focusing on healthy work environments but only this time with healthy energy usage as the focal point. In practice, a cross-functional team of employees, management, and maintenance used their breaks to walk through our buildings looking for new ways to reduce our energy consumption and use the energy smarter. Several, both small and large, energy-saving projects were identified resulting in an increased focus on habits and behavior and a showdown with “what we usually do”. Examples of identified savings potentials are idle consumption during lunch breaks and the timespan needed for pre-heating a selection of production equipment. Nonetheless, we have continued our search for energy savings and identified new potential CO2 reductions that will contribute to lowering our total emissions. Examples are additional energy reductions on electricity and heating, transition to renewable energy sources, and signing a contractual power agreement ensuring that from January 1st, 2023, our electricity consumption will be fully covered by renewable energy UN Global Compact principles: 7, 8, 9 We take pride in the fact that all our products are both designed and produced in Denmark. Good craftsmanship is a focal point in our production in combination with quality and a high degree of innovation. We focus continuously on reducing our climate impact, and our production waste and increasing the recycling rate of our waste. certificates from wind and solar power. Furthermore, TCM Group is following the Danish government's guidance on how to save energy and has reduced the temperature to 19 degrees Celsius to mitigate the increased energy costs for all of us.

It is TCM Group’s ambition to achieve net zero direct and indirect emissions from sources owned or controlled by TCM Group (scope 1 and scope 2). During 2022, TCM Group reduced its total emission for scope 1 and 2 by 18% compared to 2021. These reductions have been enabled through investments in new lacquering systems, switching from ICE forklifts to electric, and implementation of heating and energy-saving projects, but also as a direct result of an increased focus on habits and behavior during our daily operations.

Distribution of Co2 emission

During 2022 TCM Group has started to analyze our scope 3 emissions. Our aim is that we no later than 2025 have a full understanding of our scope 3 emissions and will be able to report on our scope 3 ambition and progress.

	2022	2021
Transport	10%	8%
Electricity	46%	44%
Heating	44%	48%

Emission per 1 mDKK net revenue in ton CO2 e/mDKK

	2022	2021
	1,7	2.1

As part of this increased focus on habits, we have engaged our colleagues in idea generation on new ways to reduce energy consumption and CO2 emissions. This has led to several tangible proposals for the optimization of our daily operations, which will support our continued focus on both investments in energy optimization and good behavior in terms of energy usage.

The shift in the distribution of TCM Group C02 emission in 2022 compared to 2021, is a direct result from decrease of our consumption for both electricity and district heating. At the same time the fleet has increased.

Electricity consumption

The consumption of electricity in relation to revenue has decreased by 17% during 2022 compared to the year before. The direct savings was because TCM Group has made several investments to increase energy efficiency and actively promoted how daily awareness and behavior can affect energy efficiency at our production facilities. For now, we have seen a reduction in electricity consumption at our production sites corresponding to 14% compared to 2021 and we will keep searching for new ways to reduce it even further.

Waste

Even though we continuously find new purposes for our waste, we still have smaller material categories in our production currently used as energy recovery, or hazardous waste. However, we have in 2022 taken yet another important step towards our 2025 ambition of recycling 99.7% (based on weight) of all material categories.

On our journey to use waste as a resource, we have in 2022 introduced new waste sorting bins in our office environment securing more comprehensive sorting and recycling going forward as well as maintaining our focus on finding new purposes for our production waste. At TCM Group manufacturing sites all waste is sorted in material fractions, which allows us to ensure that waste is used with the highest possible resource value. Our timber fraction is returned to our chipboard supplier and together with timber from Danish Recycling Center used for chipboard production. Timber from our worktop production of useable size finds new use as serving trays or is delivered to wood workshops at local schools. In 2022 the distribution of waste was as illustrated below

	2022	2021
Recycle	90.3%
Energy recovery	9.7%
Hazardous waste	0.1%

*Based on tons waste.

Case: From food waste to biofuel

This summer we signed an agreement with DAKA ReFood on handling our food waste. The agreement with DAKA may only cover a small percentage of our total waste but it enables us to ensure that, yet another waste fraction finds new purposes. The collected food waste will be converted to either biofuel or used as part of plate materials. The collaboration was initiated in august 2022 and from august till year-end 1,958 tons of food waste from TCM factories was transformed into 77 days of energy for heating in a standard family home.

Water management

TCM Group uses very limited amounts of water for production. Water is primarily used for sanitation and heating purposes. Water used for production, is used to support our painting processes, any waste water in that respect is carefully sorted and disposed in right manner.

Electric company cars

TCM Group operates a company car fleet consisting of 20 mixed passenger cars and commercial vans. To reduce our impact, we have in 2022 introduced electric cars to our company car policy. Transition to electric cars will happen gradually and at the pace that follows the development of charging networks and the lead times for manufacturing and delivery of electric cars. We continuously monitor the technology, range, and infrastructure to support and promote the use of electric cars.

limited to only supporting Svane kitchens. We will continue this journey to help our other brands and customers in the future.

NEW WAYS AHEAD

Circular design

Circular design is important because it helps to create products and systems that are designed for sustainability. This can involve designing products that are made from renewable or recycled materials, that are durable and easy to repair or refurbish, and that can be reused, recycled, or repurposed at the end of their useful life. Circular design is really gaining momentum in TCM Group and in 2022 we have spent significant resources on mapping input UN Global Compact principles: 12

Innovation and new ideas are essential for sustainability as it helps find solutions to the environmental and resource challenges that we face. Innovation and product development have always been a part of our DNA. To accelerate our product development, we have included three focus areas in our current design and materials, and energy sources used for material processing and considering proper disassembly and possibilities in terms of recycling at a component level. This is yet another important step towards our ambition, that in 2025 all our new designs will be 100% circular. development process under the principle of New Ways Ahead.

A healthy indoor climate

When creating better kitchen environments for the heart of our customers’ homes daily thrive and a healthy indoor climate are both important factors. We constantly strive to positively impact the indoor environment via e.g., research and development within surface treatment and new materials. As a result of this, we have now phased out all acid-catalyzed varnish leading to reduced degassing, and included laminated tabletops in our range of certified products. We ensure valid and documented progress via third parties and external certifications. In 2022 we updated all external certifications and included all kitchen models in our range of certified products.

Extended lifecycle

In TCM Group, the design, development, and production of high-quality products with high durability are always in focus. An important part of decreasing our climate impact and maximizing product value is extending the life of our products, their design, and their use. Aesthetics however also plays a crucial role in terms of retrofitting existing kitchens to continuously match current living and design standards. In 2021 we defined a goal to ensure that all kitchen models produced from 2010 can be upgraded to extend their lifetime by 2023. We are happy to share that we have now met that goal. This enables all our kitchens produced in the last decade to stay relevant in the coming years. An example from 2022 is the launch of RE/DO under our brand Svane Køkkenet. The RE/DO concept enables us to actively help Svane customers upgrade their existing kitchens and it is not Svane Køkkenet INFINITY Leaf EVO edgeband

Case: Infinity and EVO edge band

When entering 2022, we set out to create a genuinely circular product, embracing as many details and materials as possible. Our research and development resources have worked all year to make this happen, and the result is our new product “INFINITY”. In “INFINITY” a minimum of 90% of the chipboard is made up of crushed industrial waste and waste from recycling stations and the remaining 10% from fast-growing trees.# ESG

Indoor climate certificate

# of certificate: 8
% of Kitchen Lines covered by external validation: 100%

Chairman and CEO’s report

Financial Highlights

Our business

Corporate governance

ESG

Financial statements

TCM Group Annual report 2022 | 34

work with certified wood goes a long way back and the Group has been FSC® certified since 2010 but not for the entire product assortment. However, as timber is the primary material category of input to our production, it is very important to us to exclusively use timber from certified responsible sources. In addition to using a high level of recycled material. Together we

Case: Engaging customers in sustainable forestry

To engage the customers in our journey on sustainability the Nettoline brand initiated the RE:USE planting of trees for each kitchen sold in support of Danske Folkeskove (woods for citizens). The customers were invited to join a “day in the forest” when the trees were planted. Sometimes many little things add up to a lot and 2,350 trees have been planted in the woods of Rugballegaard, Lundager, and Greve.

Our ESG mindset

RE:DUCE

In close collaboration with our suppliers, we have extended our certification to cover our entire product portfolio and reached the target to make all the timber we buy FSC® or PEFC®-certified. Due to increased market volatility and low stock conversion rate for some components, we still have some non-certified material in our inventories. We are determined to phase out these components to meet our target of 100% certified timber in our production.

UN Global Compact principles: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10

Like with the impact of our activities, our responsibility and commitment do not stop at our gates. Thus, we work with ESG and sustainability across our value chain both upstream and downstream. Our largest environmental impact originates from the materials we source from suppliers and sub-suppliers. Therefore, close collaboration and partnership with suppliers and business partners are crucial to continuously move the needle in the right direction.

RE:THINK

Transport

Inbound and outbound transportation across our value chain is another focus area in terms of reducing CO2 -emissions. All our transport providers have as a minimum requirement signed our code of conduct. In 2022 we initiated a measurement of our other indirect (Scope 3) GHG emissions (GRI standard 305-3) with a focus on our impact from downstream transportation and distribution. We have now successfully established a baseline and engaged in a dialogue on

Transparency, valid data, and certifications are all crucial instruments to improve the performance of ESG parameters across our value chain. Besides supplier management in general we focus, in line with most material issues, on sustainable forestry, transport, and packaging.

electrification and alternative fuels with one of our larger carriers. As a result of this, we have decided to carry out a more comprehensive scope 3 analysis covering relevant needs and possibilities before both launching specific initiatives and maturing our future scope 3 path and ambition. No later than 2025 we will report on our scope 3 ambition and progress.

Responsible forestry

The world continues to face an increasing number of complex and interconnected challenges, with the climate crisis and loss of biodiversity being the most critical. It is through climate change mitigation efforts and the use of

Packaging material

Our target on the packaging is that all material is recyclable by 2024. In 2022 we carried out a mapping of our packaging material to get a more valid and holistic overview of the current situation of the recyclability of packaging. The initial analysis is promising and indicates an already high pro-

responsible wood that we can have the greatest impact on biodiversity in TCM Group.

TCM Group Annual report 2022 | 35

portion of recycled content across our packaging. Another focus of our analysis is the “right” packaging volume. Here the focus is to hit the right balance between reducing the amount of packaging without jeopardizing that the product becomes damaged under transport. We expect to identify areas for optimizing the balance and thereby applying less packaging in the future than today.

United Nations Universal Declaration of Human Rights and the UN Global Compact. The backbone of our work with suppliers on ESG matters is our Code of Conduct. The total share of TCM Group’s purchasing, covered by our Code-of-Conduct was 100% in 2022 which also covers all suppliers from non-EU countries. However, we are currently revising the Code of Conduct to ensure, among other things, an even higher strategic fit with our ESG strategy and an increased focus on human rights.

91% of all production of direct materials and components to our production is made in Europe.

Supplier management

Our responsible sourcing practices are focused on environmental, social, and governance issues across our value chain. TCM Group is committed to respecting human rights as outlined in the

We have an ongoing dialogue with our suppliers about sustainability, ESG matters and human right, something that we intended to continue in 2023. In 2022, we have extended the focus on screening sub-suppliers e.g. suppliers of tabletops, mirrors, etc. based on the demands and provisions in the buildings certifications DGNB and the Nordic Ecolabel.

Production country

Sweden of raw materials and components

TCM Group suppliers are primarily located in Europe and a majority of these are located relatively close to our production sites in Tvis and Aulum. In 2022, 91% of materials directly used in our production are made in Europe, of which 54% originate from Denmark or our neighboring countries (DK, DE, SE).

Country	Percentage
Denmark	3%
Netherlands	23%
Austria	3%
Germany	16%
Europa others	28%
Asia	6%
Italy	9%
Svane Køkkenet	12%
NORDIC
Eg
CRAFT
handle

* based on total Denmark purchasing spend

Anti-corruption

TCM Group is exposed to the risk of non-compliance with anti-corruption rules and regulations for example by obtaining an advantage with illegal means, via our employees, suppliers, franchisees and dealers. In TCM Group we have a zero-tolerance approach to corruption and bribery. Thus, our policy is to comply with all applicable regulations and to promote anti-corruption behavior in all our business relations. Our Code of Conduct lay out our zero-tolerance approach to corruption for employees, suppliers, franchisees, and dealers. Besides having firm values and a strong culture we conduct internal controls and make our whistleblower hotline available to detect breaches. There have been no incidents violating the anti-corruption policy in 2022. In 2o23 we will continue our work with promoting anti-corruption in all our business relations.

TCM Group Annual report 2022 | 36

Diversity Policy

During 2022 we have formed a diversity and inclusion policy. The policy is available on TCM Group homepage.

Incentive pay

In 2021 and 2022 ESG performance-related criteria with a target of a significant carbon emission reduction have been included in the long-term incentive program for TCM Group’s executive management.

TCM Group before 2025 falls within the reporting requirements according to the Corporate Sustainability Reporting Directive (CSRD).

Governance

Organizing ESG

TCM Group will continue to develop and optimize internal processes to ensure alignment to EU Taxonomy. Effective organization and management of ESG are essential to ensure steady progress on our ambitions and targets and to maintain and develop ESG as an integrated part of our way of doing business. TCM Group has defined an ESG Steering Committee that is organized about our strategic focus areas and with the involvement of the relevant stakeholders. It consists of the CFO, Head of Assortment, Head of Supply, and Head of HR. The ESG steering committee cover issues such as sustainability risks, and opportunities, as well as recommendations for further improvements, and convenes monthly.

Gender Diversity on the Board of directors and among other executives

When composing the members elected by the general meeting, TCM Group focuses on diversity as well as on the members' skills and experience. We aim for an equal gender composition, which also reflects essential competencies within TCM Group's focus areas.

Tax Residence

TCM Group A/S operates in Denmark and Norway, is listed on the Copenhagen Stock Exchange (Nasdaq MIDCAP Copenhagen), and pays taxes locally in Denmark and Norway. In 2022 TCM Group paid 39.1 mio. kr. in tax. 99.6% in Denmark and 0.4% in Norway. Our tax policy is available at the TCM Group homepage.

Whistleblower system

TCM Group whistleblower system is available for internal and external reporting of any witnessed activities or reasonable suspicion of serious and reprehensible conditions or illegalities to the group. To ensure that the group's board is composed of the right profiles and skills, TCM Group has defined a target for the board's gender and status as an independent. The Group wants a board where both sexes are represented and where all members are independent. We believe this can create the basis for the best debates and add different perspectives and input to how we run and develop the business and approach challenges.# Data Ethics Policy

TCM Group collects data to ensure the delivery of products and services within kitchen, bathroom, and storage, and to service customers best in case of quality complaints or inquiries regarding information on specific orders. TCM Group primarily uses the collected data in connection with order processing, i.e., order confirmation and delivery, and in any follow-up complaints or inquiries. Data in the daily work and storage of data is operationalized and systematized via internal procedures and policies across the entire TCM Group. The overall responsibility for decisions, application, and implementation of new technologies as well as the use of non-personally identifiable and personally identifiable data is anchored in TCM Group's executive management.

All TCM Group employees, customers, suppliers, advisors, and other individuals with a connection to the company can access the whistleblower system through an externally hosted website. The system is anonymous, and all communication is encrypted, which means that TCM Group is not able to trace any specific whistleblower report back to the reporting individual.

The sustainability manager is responsible for strategy deployment as well as identifying and pursuing further strategic opportunities. Cross-functional teams from the line of business support the daily operation and ensure progress in each of the strategic focus areas.

For the board elected by the general meeting, TCM Group wants a representation of the underrepresented gender of at least 40%. With a distribution of 1 woman and 5 men of the 6 members elected by the general meeting in 2022, we did not meet our target and, cf. the Danish Business Authority's definition, we do not have an equal gender distribution on the board. Within the coming 4 years and no later than 2026, TCM Group seeks to gradually change towards the target set for the gender balance of the board of directors. TCM Group Whistleblower system can be accessed here.

Organizationally, the Sustainability manager is placed with the assortment team, a department that is involved with the decision-making around TCM product assortment throughout the value chain. To remove potential barriers to reporting, TCM Group has in 2022 upgraded the reporting platform to make sure that the process is as intuitive as possible, and expanded the number of local languages to make sure that it is possible for everyone who may have concerns to report in their local languages. To increase our efforts and integration of ESG even more, we aim to integrate ESG oversight as part of the responsibilities of the audit committee in 2023. Internally, the reporting platform has been promoted to make sure that employees at TCM Group know that there is an anonymous platform available.

EU Taxonomy

In 2021, TCM Group reported on EU Taxonomy eligible turnover, OpEx, and CapEx as required by the EU Regulation (EU 2020/852, article 8, the "EU Taxonomy"). The EU regulation applies to listed companies with more than 500 employees. In 2022, TCM Group had less than 500 employees and therefore did not fulfill the requirement of entities in scope of the Regulation. TCM Group will reassume Taxonomy reporting by 2025 or if. In 2022 there has been no reported cases.

Board of Directors
Audit Committee
ESG Steering Committee

We Take Responsibility

New Ways Ahead
Together We Improve
Sustainable Work Life

Governance

Chairman and CEO’s Report

Financial Highlights

Our Business

Corporate Governance

ESG

Financial Statements

TCM Group Annual Report 2022 | 37

ESG Performance

We continuously seek to improve our data registration, collection, and reporting of relevant ESG indicators, and provide data that can be measured year after year. The ESG data collection and reporting support our business to direct action plans and it provides transparency for all stakeholders in our sustainability work.

ESG Key Figures

Reference standard	Reference Accounting practices	Unit	2022	2021	2020	Alignment report page
UNGC Principles	Environment principles 7, 8, 9
GRI 305 Emissions						page 31
CO2-emissions, Scope 1		tCO2e	1,032	1,299	1,435
Vehicles		tCO2e	1,191	1,077.5	1,077.5	47
Natural gas		tCO2e	34	174.5	210
Others		tCO2e	1,165	1,124.5	1,225
CO2-emissions, Scope 2		tCO2e	892	1,041	1,703
Electric power		tCO2e	888	1,035	1,698	5
District heating		tCO2e	4	6	5
CO2, total Scope 1+2		tCO2e	1,924	2,340	3,138
CO2-e intensity (revenue)	Emission per 1m DKK net revenue	/ton CO2e	1.7	2.1	3.1

Energy	page 31, 32
Energy consumption		MWh	7,294.3	8,490.8	8,749.9
Standard energy market mix in Denmark, Environmental product declaration	Renewable energy %	%	82	82	82
ENERGINET per 1st of June 2021
Electricity consumption/revenue ratio	Electricity consumption (kWh) / net revenue (kDKK)		6.4	7.7	12.8

Resources
Water	Water consumption	m³	5,899.86	4,409.98	4,414.62
Waste	GRI 306-5 Waste	ton	92.1	96.9	90.3	page 32
Recycling		%	7.3	2.3	9.6
Energy recovery		%	0	0	0
Landfill		%	0	0	0
Hazardous waste		%	0.1	0.6	0.8

In 2021 there has been made a registration error of the amount of waste generated. This has lead to an update of the values and distribution of the waste generated in 2021 in 2022.

TCM Group Annual Report 2022 | 38

ESG Key Figures Continued

Reference standard	Reference Accounting practices	Unit	2022	2021	2020	Alignment report page

Social data	Labour 3, 4, 5, 6					page 29, 30
Number of full-time employees. Calculated excluding temporary and short-term employments
Full-time employees, end of the period		# FTE	482	504	483
Blue collar workers	% of total FTEs	%	23%	23%
White collar workers	% of total FTEs	%	77%	77%
Number of employees on flex job contracts or similar by the end of the financial year	Flex jobs etc.	#	5	6	13
Number of employees on trainee contracts by the end of the financial year	Trainee, interns, apprentices	#	6	13	16
GRI 404	Diversity
Gender diversity overall		%	36	32	29
Equal Opportunity	All TCM Group employees
Gender diversity, other management levels			4 of 14 (28%)	3 of 14 (21%)	4 of 15 (27%)
Management (executive mgmt. and mgmt group), m/f
Pay gap between genders, white collar	Average pay, white collar m/f (minus executive management)		1.18

Occupational health and safety	Labour 3, 4, 5, 6					page 29, 30
Sickness related absence (excl. absence due to sick children and maternity leave)	Absence ratio related to sickness in 2021	%	4.38	3.3	2.9
Sickdays caused by work accidents	Absence ratio related to work accidents	#	47	21	34
Absence related to work accidents (number of days)		%	0.1	0.006	0.03
Total number of working hours/absence related to work accidents
Number of Near-miss work accidents registered during the financial year	Near-miss work accident registrations	#	937	896	1,159
Employee engagement score	(5-point scale)		4.2
% of employees that have participated in the engagement survey	Engagement survey participation	%	92
Engagement score based on a 5-point scale. Performed every second year (next time year 2023)	Performed every second year (next time year 2023)
Engagement survey participation - Performed every second year (next time year 2023)

TCM Group Annual Report 2022 | 39

ESG Key Figures Continued

Reference standard	Reference Accounting practices	Unit	2022	2021	2020	Alignment report page

Governance
Composition of the board of directors	Members of the board of directors	#	6	5	5	page 20 -22
	TCMs board members at publication date					page 20
Number of TCM board meetings held. Does not cover other board seminars or committees	Board meetings	#	12	11
Board meeting attendance	Number of board meetings attended relative to number of board meetings held.	%	100%	100%	97.5%	page 22
Gender diversity, board of directors		#	1 of 6	1 of 5	1 of 5	page 29, 36
		%	17%	20%	20%
Percentage of independent board members	Distribution of independent and non-independent board members	%	100%	100%	100%	page 22

Risk and regulation	Anti-Corruption					page 34-36
Suppliers covered by CODE of CONDUCT, signed		%	100	100	100
		#	0	0	0
Whistleblower reports to TCM falling within the correct use of the whistleblower scheme	Whistleblower reports	%	100	100	100	page 36
% of Whistleblower reports to TCM falling iwthin the correct use of the whistleblower scheme resolved	Whistleblower cases resolved	%	100	100	100	page 36

Remuneration
Shares held by members of the board of directors	Number of shares held by members of the Board of Directors as a percentage of the total number of shares		40,625	38,125	38,125	page 22
		%	7.9	8.8		page 23
Shares held by the executive management	Number of shares held by members of the Executive Management as a percentage of the total number of shares.	%	91,602	49,902	49,902	page 30
CEO total compensation relative to FTE average total compensation	Based on average salary of an employee of TCM (excluding members of the Executive Management)

TCM Group Annual Report 2022 | 40

Paris Financial Statements

TCM Group Annual Report 2022 | 41

Consolidated Financial Statements


Income Statement
Statement of Comprehensive Income
Balance Sheet as of 31 December
Statement of Changes in Shareholders' Equity
Cash Flow Statement
Notes to the Financial Statement
Definitions

TCM Group Annual Report 2022 | 42

Income Statement

Statement of Comprehensive Income

DKK’000	Note	2022	2021	DKK’000	2022	2021
Revenue	3	1,146,052	1,108,274	Net profit for the year	70,493	110,709
Cost of goods sold	4, 5, 7	(853,673)	(796,320)
Gross profit		254,601	257,340
Other comprehensive income		(70,097)	(46,749)
Items that may be	22	(50,975)	(22)

Chairman and CEO’s report

Financial Highlights

Our business

Corporate Governance

ESG

Financial statements

Consolidated statement of comprehensive income

	Note	2022	2021
reclassified subsequently to profit or loss
Selling expenses	4, 5, 7	(6,478)	585
Administrative expenses		96,913	111,294
Other operating income		1,263	554
Operating profit before non-recurring items		137,756	138,447
Non-recurring items	6	691
Operating profit	4, 5, 6, 7	137,756	138,447
Value adjustments of currency hedges before tax
Tax on value adjustments of currency hedges
Other comprehensive income for the year		(887)	585
Total comprehensive income for the year		69,606	111,294

Share of profit/loss in associated companies	9	250	8
Financial income	9	750	441
Financial expenses		(165)	338
Profit before tax		103,391	110,709
Tax for the year	10	(25,029)	(18,909)
Net profit for the year		78,362	91,800

Earnings per share before dilution, DKK	19	7.77	11.55
Earnings per share after dilution, DKK	19	7.75	11.54

Consolidated balance sheet as of 31 December

DKK’000	Note	2022	2021	DKK’000	Note	2022	2021
ASSETS				SHAREHOLDERS’ EQUITY AND LIABILITIES
Intangible assets		369,796	171,961	Total shareholders’ equity		420,629	419,691
Goodwill	11	171,961	14,081	Share capital	17, 19	1,000	1,000
Brand		914	4,561	Reserve for cash flow hedges	18	555,838	546,318
Other intangible assets		432,718	500,292	Retained earnings		(135,976)	(291,627)
Tangible assets	12	85,101	48,813	Proposed dividend for the year	20	127,127	130,000
Land and buildings		11,774	8,875
Tangible assets under construction and prepayments		42,542	25,060	Total long-term liabilities		748,302	772,271
Machinery and other technical equipment		53,393	48,813	Deferred tax	21	179,664	146,021
Equipment, tools, fixtures and fittings		483	483	Mortgage loans	2, 22	160,701	11,222
				Lease liabilities	2, 22	2,985	10,980
Financial assets				Other liabilities		404,952	574,048
Investments in associated companies	13	47,439	8,524
Other financial assets	15	2,766	0	Total short-term liabilities		181,906	135,050
				Bank loans	2, 22	41,075	28,647
Total non-current assets		410,086	180,485	Lease liabilities	2, 22	151,892	115,903
				Trade payables	2	158,924	928
Inventories	14	77,764	74,116	Liabilities to associated companies		3,564	0
Raw materials and consumables		46,104	21,929	Current tax liabilities		51,211	421,849
Products in progress		21,929	9,731	Other liabilities		421,849	970,227
Finished products		9,731	42,456
				Total shareholders’ equity and liabilities		930,235	907,321
Current receivables		389,792	30,200
Trade receivables	15	30,200	23,235
Other receivables	15	6,395	28,235
Tax receivables		2,932	31,505
Prepaid expenses and accrued income	16	3,235	4,392

Cash and cash equivalents	15	159,209	11,884
Total current assets		626,765	116,199
Total assets		1,036,851	907,321

Statement of Changes in Shareholders’ Equity

DKK’000	Share Capital	Treasury Shares	Reserve for cash flow hedges	Retained Earnings	Proposed Dividend	Total
Opening balance 01.01.2022	1,000	(135,976)	(29)	500,292	54,404	419,691
Net profit for the year	0	0	0	70,493	0	70,493
Other comprehensive income for the year	0	0	(887)	0	0	(887)
Total comprehensive income for the year	0	0	(887)	70,493	0	69,606
Purchase of treasury shares	0	(130,000)	0	0	0	(130,000)
Dividend paid	0	0	0	0	(130,000)	(130,000)
Closing balance 31.12.2022	1,000	(265,976)	(916)	570,785	(75,596)	229,397

Opening balance 01.01.2021	1,000	0	443,987	130,000	574,373	1,149,360
Net profit for the year	0	0	0	56,305	0	56,305
Other comprehensive income for the year	0	0	585	0	0	585
Total comprehensive income for the year	0	0	585	56,305	0	56,890
Purchase of treasury shares	0	(135,976)	0	0	0	(135,976)
Dividend paid	0	0	0	0	(130,000)	(130,000)
Closing balance 31.12.2021	1,000	(135,976)	444,572	656,597	444,373	1,110,670

Consolidated cash flow statement

DKK’000	2022	2021
Operating activities
Operating profit	96,913	138,447
Depreciation/amortization	17,951	16,918
Other non-cash operating items	(25,899)	(8,933)
Income tax paid	(29,508)	(21,479)
Change in inventories	(13,944)	(2,938)
Change in operating receivables	5,132	(11,451)
Change in operating liabilities	(8,933)	72,177
Cash flow from operating activities	39,478	174,733

Investing activities
Investments in tangible assets	(22,593)	(10,116)
Investments in intangible assets	(14,368)	(4,466)
Share based incentive program	104	(308)
Investments in financial assets	(2,180)	0
Acquisition of operations (associated company)	(23,200)	0
Purchase of treasury shares	(13,944)	(135,976)
Cash flow from investing activities	(76,181)	(150,866)

Financing activities
Proceeds from loans	130,000	574,373
Repayments of loans	(614)	(14,368)
Repayments of lease liabilities	(4,237)	(7,492)
Dividend paid	(54,404)	(130,000)
Cash flow from financing activities	70,745	422,513

Cash flow for the year	34,042	446,380
Cash and cash equivalents at the beginning of the year	11,884	4,392
Cash and cash equivalents at year-end	159,209	11,884

Notes to the consolidated financial statements

1. Accounting policies

2. Financial risks

3. Revenue and segment information

4. Staff costs

5. Average number of employees during the period

6. Audit fee

7. Depreciation/amortization and impairment by function

8. Non-recurring items

9. Financial income and expenses

10. Corporation tax

11. Intangible assets

12. Tangible assets

13. Investments in associated companies

14. Inventories

15. Other financial assets and other receivables

16. Prepaid expenses and accrued income

17. Share capital

18. Value adjustments of cash-flow hedges

19. Earnings per share

20. Dividend

21. Deferred tax# Notes to the consolidated financial statements

1. Accounting policies

Principles applied in the preparation of the consolidated financial statements

The consolidated financial statements are presented in accordance with the International Financial Reporting Standards as adopted by the EU (“IFRS”) and additional requirements of the Danish Financial Statements Act. Accounting policies are unchanged compared to last year.

General principles

Assets and liabilities are recognised at historic acquisition value (cost), except for certain financial assets and liabilities and fixed assets held for sale. Financial assets and liabilities measured at fair value comprise derivative instruments. Fixed assets held for sale are recognised at the lower of the carrying amount and fair value, less selling expenses. The Parent Company’s functional currency is Danish kroner (DKK), which is also the presentation currency for the Parent Company and Group. Accordingly, the consolidated financial statements are presented in DKK. All amounts are stated in DKK thousand, unless otherwise stated.

Significant accounting estimates and judgements

Preparing the consolidated financial statements in accordance with IFRS requires that Management makes assessments, estimates and assumptions that affect the application of accounting policies and the recognised amounts of assets, liabilities, income and expenses. The actual outcome may differ from these estimates and assessments. Estimates and assumptions are regularly reviewed. Changes to estimates are recognized in the period in which the change is made if the change affects only that period, or in the period in which the change is made and future periods if the change affects both current periods and future periods.

Assessments made by Management in the application of IFRS that have a material impact on the consolidated financial statements and estimates made that may lead to significant adjustments in the consolidated financial statements of future financial years are primarily the following:

Classification, etc.

Non-current assets essentially comprise amounts that are expected to be recovered more than 12 months after the balance sheet date. Current assets essentially comprise amounts that are expected to be recovered within the 12 months after the balance sheet date.

Long-term liabilities comprise amounts that TCM Group A/S has an unconditional right, to pay later than 12 months after the closing date. Other liabilities comprise short-term liabilities.

Impairment testing of goodwill and brand

Goodwill and brand with indefinite useful life are recognized at cost less any accumulated impairment. The Group performs annual impairment tests of goodwill and brand in accordance with the accounting policies. The assumptions and assessments made pertaining to expected cash flows and the discount rate in the form of weighted average cost of capital are described in note 11, Intangible assets.

IFRS 16 Lease period

The company recognizes the lease obligations on the basis of the future payments during the lease period. The lease period consists of the non-cancellable period and periods covered by extension and termination options. The company rents properties for production and for retail leases. Often leases do not have a fixed expiry date, but continue after the non-cancellable period until the lessee terminates the contract. The company therefore assesses whether it is reasonably certain of exercising extension options or failing to exercise termination options when determining the lease term. For both production buildings and retail leases, the lease term is estimated to be 5 years. Retail leases are in most cases subleased to franchisees on the same terms, why the lease term is estimated to be the same period.

The right-of-use assets is therefore recognized as a ‘Other receivables’ in the balance sheet.

Incremental borrowing rate

The company has chosen to subdivide their leases into the following categories:
* Rental contracts for premises
* Vehicles

The borrowing rate is set at the transition date for IFRS 16. If the company considers that a change in the residual value guarantee, termination and renewal options, the incremental borrowing rate is revised. For the company’s vehicles, the incremental borrowing rate is calculated based on the company’s borrowing rate. This interest rate takes into account credit assessments, collateral, leasing periods, etc. For rental contracts for premises, the possibility of using mortgage financing of real estate has been taken into account.

Reporting under the ESEF Regulation

The Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) requires the use of a particular electronic reporting format for annual reports of listed companies in the EU. More specifically, the ESEF Regulation requires the annual report to be prepared in XHTML format with iXBRL tagging of the consolidated financial statements including notes.

TCM Group A/S’ iXBRL tagging has been made using the ESEF taxonomy disclosed in the annexes to the ESEF Regulation and developed based on the IFRS taxonomy published by the IFRS Foundation. The line items in the consolidated financial statements are XBRL-tagged to the elements of the ESEF taxonomy that are considered to match the content of those line items. For line items not considered to be covered by line items defined in the taxonomy, entity-specific extensions to the taxonomy have been incorporated. Except for subtotals, these extensions are anchored to standard elements of the ESEF taxonomy.

Consistently with the requirements of the ESEF Regulation, the annual report approved by Management is comprised of a ZIP file TCM-Group-2022-12-31-en.zip which includes an XHTML file that may be opened using standard web browsers, and a number of technical XBRL files enabling mechanical retrieval of the XBRL data incorporated.

New IFRS standards that have not yet been applied

A number of new or amended IFRS standards will come into effect in future financial years, and have not been applied in advance when preparing these consolidated financial statements. There are no amendments to accounting policies with future application that are deemed to have any material effect on the consolidated financial statements.

Consolidation principles and business combinations

Subsidiaries

Subsidiaries are companies subject to the controlling influence of TCM Group A/S. A controlling influence entails the direct or indirect right to shape a company’s financial or operational strategies in a bid to receive financial benefits. When assessing whether a controlling influence exists, potential voting shares that can be immediately utilized or converted must be taken into account.

The financial statements of subsidiaries are included in the consolidated financial statements from the date that the controlling interest arises and are included in the consolidated financial statements until the date on which the controlling interest ceases. If ownership is reduced to such an extent that controlling interests are lost, any remaining holdings are recognized at fair value and the change in value is recognized in profit or loss.

Goodwill in business combinations is calculated as the total of the consideration transferred, any non-controlling interests and fair value of previously owned participations (for step acquisitions) less the fair value of the subsidiary’s identifiable assets and assumed liabilities. When the difference is negative, it is recognized directly in net profit for the year. Contingent consideration in acquisitions is measured at fair value on both the acquisition date and continuously thereafter, with changes in value recognized in profit or loss.# Notes to the consolidated financial statements (continued)

1. Accounting policies (continued)

For acquisitions of subsidiaries involving non-controlling interests, the Group recognizes net assets attributable to non-controlling interests either at fair value of all of the net assets except goodwill, or at fair value of all net assets including goodwill. The principle is decided individually for each acquisition. When a business combination is achieved in stages, the Group’s previously held interests in the acquired entity are remeasured to its acquisition-date fair value and the resulting gain or loss, if any, is recognised in profit or loss. When controlling interests are achieved, changes in ownership are recognized as a reallocation of shareholders’ equity between the parent company’s owners and the non-controlling interest, without any remeasurement of the subsidiary’s net assets.

A/S has only one operating segment that is producing and selling kitchens, bathrooms and storage.

Revenue recognition
The Group sells kitchen products through a number of independent stores, DIY chains and other retailers. Revenue is recognised when control of goods sold has transferred to the customer, being when the goods have been delivered according to the delivery terms DAP. General credit terms vary between 8-30 days. Sales are recognized net after VAT and discounts.

Share of profit/loss in associated companies
In the income statement, the Group’s share of associates’ results after tax and after elimination of the proportionate share of internal profit/loss is recognized.

Financial income and expenses
Financial income and expenses comprise interest income on bank balances and receivables, interest expense on loans, gain/loss on interest rate swaps as well as exchange rate differences on financial items. Interest income on receivables and interest expense on liabilities are calculated in accordance with the effective interest rate method. The effective interest rate is the interest rate that results in the present value of all future receipts and disbursements during the fixed-interest term becoming equal to the carrying amount of the receivable or liability. The calculation includes all fees paid or received by contractual parties that are part of the effective interest rate, meaning transaction costs and surplus and deficit values.

Cost of goods sold
Cost of goods sold include the manufacturing costs incurred to achieve revenue for the year. Costs consist of raw material, direct labour costs, transportation costs and indirect costs related to manufacturing such as salaries, rental and maintenance costs as well as depreciation of production facilities.

Non-recurring items
Non-recurring items are used in connection with the presentation of the profit or loss for the year to distinguish income and expenses that are special and of a non-recurring nature from the consolidated operating profit for the year. Non-recurring items are assessed item by item and comprise restructuring costs, impairment charges in connection with e.g. material restructuring and other items relating to fundamental reorganisations as well as gains or losses on major disposals. Furthermore, non-recurring items include costs related to transactions costs related to business combinations, costs related to integration of a new business as well as costs related to Covid-19 precautions and related supply chain disruptions. Such costs are non-recurring in nature.

Transactions that are eliminated through consolidation
Intra-group receivables and liabilities, income or expenses and unrealized gains or losses that arise from intra-group transactions between group companies, are eliminated in their entirety in the preparation of the consolidated financial statements.

Tax
Tax costs for the year comprise current tax and deferred tax. Income taxes are recognized in profit or loss except when the underlying transaction is recognized in other comprehensive income or in shareholders’ equity, whereby the associated tax effects are recognized in other comprehensive income or in shareholders’ equity. Current tax is tax that is to be paid or received regarding the current year, by applying the tax rates determined or that have been determined in principle on the balance sheet date. This item also includes adjustments to current tax attributable to previous periods.

Business combinations
Business combinations are recognized in accordance with the acquisition method. According to this method the acquired identifiable assets and assumed liabilities and contingent liabilities are recognised at their fair value on the acquisition date. The consideration is measured at fair value of the consideration transferred to the former owner of the acquiree. Acquisition related costs are recognized in profit or loss as incurred.

Segment reporting
An operating segment is a part of the Group that conducts business activities from which it earns revenue and incurs expenses and for which independent financial information is available. Furthermore, the results of an operating segment are monitored by the company’s chief operating decision-maker to evaluate them and to allocate resources to the operating segment.

TCM Group Operating expenses (Selling and administrative expenses)
Operating expenses primarily comprise selling and administrative expenses. Selling expenses include staff costs and other costs related to sales and marketing. Administrative expenses include staff costs and other costs related to administration.

Deferred tax
Deferred tax is calculated according to the balance-sheet method on all temporary differences arising between recognized and fiscal values of assets and liabilities. The tax effect attributable to tax loss carryforwards that could be utilized against future profits is capitalized as a deferred tax asset. This applies to both accumulated loss carryforwards at the acquisition date and losses arising thereafter. Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled. Deferred tax is recognized in the balance sheet as a non-current asset or long-term liability. The income tax liability is recognized as a current receivable or current liability. If the actual outcome differs from the amounts first recognized, the differences will affect current tax and deferred tax in the period in which these calculations are made.

Buildings
36–40 years

Machinery and other technical equipment
3-10 years

Equipment, tools, fixtures and fittings
2-7 years

Land is not depreciated. Expected useful lives and residual values are reviewed annually.

Product development within the Group is mainly in the form of design development and is conducted continuously to adapt to current style trends. To a great extent, product development is based on a further development of existing materials and designs, which is the reason that no portion of the costs for product development is recognized as an intangible asset. The Group does not carry out research and development in the true sense of such work, or to any significant extent.

The company leases vehicles which include a service element in the payments to the lessor. This service is deducted from the lease payment when measuring the lease obligation. Where the company cannot reliably separate leasing and non-leasing items, it is considered a single leasing payment. Short leases with a maximum lease term of 12 months and leases where the underlying asset has a low value are not recognized in the balance sheet. The lease obligation, which is recognized under “Lease liabilities”, is measured at the present value of the remaining lease payments, discounted by the company’s incremental loan interest rate, if the implicit interest rate is not stated in the lease agreement or can reasonably be determined. The leasing payment consist of fixed and variable leasing payments that are regulated by index or interest rate, guaranteed residual values, the exercise of purchase options and the cost of cancelling the lease. The lease obligation is subsequently adjusted if:
• The value of the index or interest rate on which the lease payments are based changes.
• There is a change in the exercise of options to extend or shorten the lease period due to a material event or material change in circumstances which are within the control of the lessee.
• The lease term is changed as a result of exercising an option to extend or shorten the lease term.
• The estimate of a residual value guarantee is changed.
• The contract is renegotiated or modified.

Subsequent adjustment of the lease obligation is recognized as a correction to the right-of-use asset. However, if the right-of-use asset has a value of DKK 0, a negative reassessment of the right-of-use asset is recognized in the income statement.

Intangible assets
Goodwill comprises the amount by which the cost of the acquired operation exceeds the established fair value of identifiable net assets, as recognized in the acquisition analysis. In connection with the acquisition of operations, goodwill is allocated to cash generating units. In connection with acquisitions the fair value of the different brands have been measured respectively. Since goodwill and brand have an indefinite useful life, it is not amortized. The indefinite useful life is justified by the long life of the brand, where there are no intention of changing the brand set-up. Thus, it is not possible to determine a useful life. Instead, goodwill and brand are subject to impairment testing annually or if an indication of an impairment requirement arises. The carrying amount comprises the cost less any accumulated impairment losses.# 1. Accounting policies (continued)

Investments in associated companies

Investments in associates are measured using the equity method, whereby the investments in the balance sheet are measured at the proportionate share of the companies’ net asset value calculated in accordance with the Group’s accounting policy after elimination of the proportionate share of unrealized internal profit/loss and with addition of value added on acquisition, including goodwill. Investments in associates are testet for impairment if an indication of an impairment requirement arises.

Intangible Assets

A description of the method and assumptions applied when conducting impairment tests is found in note 11 Intangible Assets. Other intangible assets with deﬁnite useful life are rec- ognized at cost less accumulated amortization and any impairment. It also includes capitalized costs for pur- chases and internal and external costs for the develop- ment of software for the Group’s IT operations, patents and licenses. Amortization takes place according to the straight-line method based on the estimated useful life of the asset (three to ﬁve years).

Leases

When entering into an agreement, the company assesses whether an agreement is a lease agreement or contains a lease element. A lease is an agreement that transfers the right to control the use of an identiﬁable asset for a period against payment. In assessing whether an agree- ment contains a lease item that has been transferred to the lessee, it is necessary to consider whether the lessee has the right, during the useful life, to obtain virtually all the economic beneﬁts from the use of the identiﬁable asset and the right to decide on the use of the the identi- ﬁable asset. The company recognizes a right-of-use (the asset) and a lease obligation at the start of the lease period. The right-of-use asset is recognized in the category of assets, which it belongs to. The right-of-use asset is measured at cost, which is cal- culated as the present value of the lease obligation plus any direct costs associated with entering the lease, any costs for demolition and disposal of the asset at the end of the lease period which the lessee is obliged to pay, and prepaid leasing payments. The right-of-use asset is depreciated on a straight-line basis over the shortest period of the lease term and the useful life of the asset. If the lease agreement contains a purchase option that the company expects to exercise, the right-of-use asset is depreciated on a straight-line basis over the total expected useful life of the asset.

Tangible assets

Tangible assets are recognized at cost with deductions for depreciation and any impairment. Cost includes expenses that can be directly attributed to the acquisi- tion. Costs for repairs, maintenance and any interest expenses are recognized as costs in proﬁt or loss in the period in which they arise. In the event that an asset’s carrying amount exceeds its estimated recoverable amount, the asset is written down to its recoverable amount, which is charged to operating proﬁt. In the income statement, operating proﬁt is charged with straight-line depreciation, which is calculated on the original cost less estimated residual value after use- ful life and is based on the estimated useful lives of the assets as follows:

Research and product development

Costs for product development are expensed immedi- ately as and when they arise.

Financial instruments

Financial instruments recognized in the balance sheet include cash and cash equivalents, loans receivable, trade receivable and derivative instruments on the asset side. On the liability side, there are accounts and cost payable, loan liabilities and derivative instruments.

Measurement

Financial instruments that are not derivative instru- ments are initially recognized at cost corresponding to the instrument’s fair value plus transaction costs. Transaction costs for derivative instruments are imme- diately expensed. On initial recognition, a ﬁnancial instrument is classiﬁed on the basis of the purpose underlying the acquisition of the instrument. This clas- siﬁcation determines how the ﬁnancial instrument is measured after initial recognition, in the manner described below. For the recognition of derivative instruments, refer to cash-ﬂow hedges below.

Cash-ﬂow hedges, interest-rate risk

Interest swaps can be used to hedge the uncertainty of highly probable forecasted interest-rate ﬂows for bor- rowing at variable interest, whereby the company receives variable interest and pay ﬁxed interest. Interest rate swaps are measured at fair value in the balance sheet. The interest coupon portion is continuously rec- ognized in proﬁt or loss as a portion of interest expense. Unrealized changes in fair value of interest rate swaps are recognized in other comprehensive income and are included as a portion of the hedging reserve until the hedged item impacted net proﬁt for the year and as long as the criteria for hedge accounting and eﬀectiveness are fulﬁlled. The gain or loss attributable to the ineﬀec- tive portion of unrealized changes in value of interest rate swaps is recognized in proﬁt or loss.

Receivables and liabilities in foreign currencies

Receivables and liabilities in foreign currencies are val- ued at the balance sheet date rate. Exchange rate ﬂuctu- ations pertaining to operating receivables and liabilities are recognized in operating proﬁt, while exchange rate ﬂuctuations pertaining to ﬁnancial receivables and lia- bilities are recognized in net ﬁnancial items.

Inventories

Inventories comprise ﬁnished and semi-manufactured products and raw materials. Inventories are valued according to the ﬁrst-in, ﬁrst-out (FIFO) principle, at the lower of the cost and net sales value on the balance sheet date. The net sales value comprises the estimated sales price in the ongoing operations less selling expenses. Cost of ﬁnished and semi-manufactured products are measured at manufacturing cost including raw materials, direct labour, other direct expenses and production related overheads based on normal production. Inter-group proﬁts on inventory is eliminated in the consolidated ﬁnancial statements.

Loans and trade receivables

The category of loans and trade receivables comprises ﬁnancial assets that are not derivative instruments, that have ﬁxed or ﬁxable payments and that are not listed on an active market. For TCM Group A/S, this category includes long-term ﬁnancial assets and trade receiva- bles and other receivables recognized as current assets. These assets are valued at amortized cost. Amortized cost is determined based on the eﬀective rate calculated on the acquisition date. Loans and trade receivables are recognized at the amounts that are expected to be received, meaning less any provisions for decreases in value. Receivables with short maturities are not discounted.

Derivative ﬁnancial instruments

On initial recognition in the balance sheet, derivate ﬁnancial instruments are measured at cost and subse- quently at fair value. Derivative ﬁnancial instruments are recognized under other receivables or other payables. Changes that are complying with requirements for hedging of future cashﬂow of a recognized asset or a recognized liability are recorded in the other compre- hensive income statement.

Cash and cash equivalents

Cash and cash equivalents are deﬁned as cash and bank balances and short-term investments with maturities not exceeding three months from the acquisition date.

Financial liabilities

All transactions pertaining to ﬁnancial liabilities are recognized on the settlement date. Liabilities (except for derivative instruments with negative values) are meas- ured at amortized cost.

Receivables and liabilities

A receivable is recognized when the company has per- formed a service and a contractual payment obligation arises for the counterparty, even if an invoice has not been sent. Trade receivable are recognized in the balance sheet when revenue is recognized and an invoice has been sent. A liability is recognized when the counterparty has performed a service and a contractual payment obligation arises, even if an invoice has not been received. Accounts payable are recognized when a service or product has been received.

Derecognition of financial instruments

A ﬁnancial asset is derecognized from the balance sheet when the rights resulting from the agreement have been realized, expire or the company loses control over them. The same applies to a part of a ﬁnancial asset. A ﬁnan- cial liability is derecognized from the balance sheet when the obligation resulting from the agreement has been realized or is extinguished in some other manner. The same applies to a part of a ﬁnancial liability. A ﬁnancial asset and a ﬁnancial liability may only be oﬀset against each other and recognized net in the bal-ance sheet if there is a legal right to oﬀset the amounts and the intention is to settle the items in a net amount or to simultaneously sell the asset and settle the debt. The acquisition or divestment of ﬁnancial assets is rec- ognized on the date of transaction for on demand trans- actions, which is the date when the company undertakes to acquire or sell the asset.

Impairment

The carrying amounts of the Group’s assets are tested annually for indications of any impairment requirement. IAS 36 is applied to the impairment testing of assets other than ﬁnancial assets, which are tested according to IFRS 9 inventories and deferred tax assets, if any.

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Corporate Governance
ESG
Financial statements
TCM Group Annual report 2022 49
Notes to the consolidated financial statements (continued)# Notes to the consolidated financial statements (continued)

1. Accounting policies (continued)

Recognition in and derecognition from the balance sheet A financial asset or a financial liability is entered in the balance sheet when the company becomes a party in Impairment testing of tangible and intangible assets If there is an indication of an impairment requirement, the recoverable amount of the asset is tested in accordance with IAS 36 (see below). For goodwill and assets with indefinite life e.g. brand, the recoverable amount is calculated annually. When testing for impairment requirements, if it is not possible to establish essentially independent cash flows for an individual asset, the assets must be grouped at the lowest level at which it is possible to identify essentially independent cash flows, known as cash generating units. Impairment losses are recognized when the carrying amount of an asset or a cash generating unit (group of units) exceeds the recoverable amount. Impairment losses are charged against profit or loss. Impairment losses related to assets attributable to a cash generating unit are primarily allocated to goodwill. Subsequently, a proportional impairment of other assets included in the unit (group of units) is effected. The recoverable amount is the higher of fair value less selling expenses and value in use. When calculating the value in use, future cash flows are discounted using a discounting factor that takes into account the risk-free interest rate and the risk associated with the specific asset or cash generating unit (group of units).

Impairment reversal
An impairment loss on assets that come under the scope of IAS 36 is reversed if there is an indication that the impairment is no longer pertinent and that there has been a change in the assumptions upon which the calculation of the recoverable amount was based. However, an impairment loss on goodwill and brand with indefinite useful life is never reversed. A reversal is only performed to the extent that the carrying amount of the asset after the reversal does not exceed the carrying amount that would have been recognized, less depreciation wherever applicable, if no impairment had been posted. An impairment loss on loans and trade receivable recognized at amortized cost is reversed if the previous reasons for the impairment loss no longer exist and full payment can be expected to be received from the customer.

Statement of cash flows
The cash flow statement shows the cash flows from operating, investing and financing activities for the year, the year’s changes in cash and cash equivalents as well as cash and cash equivalents at the beginning and end of the year. The cash flow effect of acquisitions and disposals of businesses is shown separately in cash flows from investing activities. Cash flows from acquired businesses are recognized in the cash flow statement from the date of acquisition, and cash flows from disposed businesses are recognized up until the date of disposal. Cash flows from operating activities are calculated according to the indirect method as operating profit adjusted for non-cash operating items, changes in working capital, and corporation tax paid. Cash flows from investing activities comprise payments in connection with acquisitions and disposals of entities and operations and of intangible and tangible assets and other non-current assets as well as dividend received. Cash flows from financing activities comprise changes in the size or composition of the share capital and related costs as well as the raising of loans, repayment of interest-bearing debt, interest and payment of dividends to shareholders.

Employee benefits
Long-term remuneration
The Group operates schemes for remuneration to employees for long service. The amount is deemed insignificant and the Group, therefore, recognizes the expense at the time of the anniversary. The Group has an equity-settled, share-based Long-term Incentive program (LTI) for the Executive Management, which is governed by the Remuneration policy. The LTI is a share-based program and consists of annual commencing individual Performance Share Unit Plans (PSU) with rolling 3 year performance periods. The fair value of employee services received for the grant of shares is recognised as an expense and allocated over the vesting period. And the end of each reporting period, TCM revises its estimates of the numbers of shares expected to vest. TCM recognises the impact of the revision of original estimates, if any, in the income statement and in a corresponding adjustment to equity over the remaining vesting period. Adjustments relating to prior years are included in the income statement in the year of adjustment.

Short-term remuneration
Short-term remuneration to employees is calculated without discounting and is recognized as a cost when the related services are obtained. A provision is recognized for the anticipated cost of bonus payments when the Group has a current legal or contractive obligation to make such payments, based on the services being obtained from the employees and it being possible to reliably estimate the obligation.

Contingent liabilities
A contingent liability is disclosed when the Company has a possible obligation deriving from an occurred event whose existence will be confirmed only by one or more uncertain future events, or when there is an obligation that has not been recognized as a liability or provision because it is not probable that an outflow of resources will be required, or alternatively because it is not possible to sufficiently reliably estimate the amount concerned.

Impairment of financial assets
Trade receivables are recognised initially at their transaction price less allowance for expected credit losses over the lifetime of the receivable and are subsequently measured at amortised cost adjusted for changes in expected credit losses. The expected credit losses on trade receivables are estimated based on the level of unsecured balances past due. The Group has historically experienced insignificant credit losses. Receivables, for which the Group has no reasonable expectation of recovery, are written off in part or entirely. The allowances for expected credit losses and write-offs for trade receivables are recognised in profit or loss and included in administrative expenses.

Shareholders’ equity
Dividends
Dividends are recognized as a liability after the Annual General Meeting has approved the dividend.

Earnings per share
The calculation of earnings per share is based on consolidated net profit attributable to the Parent Company shareholders and on the weighted average number of shares outstanding during the year. When calculating earnings per share after dilution, the average number of shares outstanding is adjusted to take into account the dilutive effects of potential ordinary shares including employee share options. The options are dilutive if the exercise price is lower than the share price. Dilution is greater, the greater the difference between the exercise price and the share price. For the options, the exercise price is added the value of future services.

Treasury shares
The treasury share reserve comprises cost of acquisition for the Group’s portfolio of treasury shares. Dividends received from treasury shares are recognised directly in retained earnings in equity. Gains and losses from the sale of treasury shares are recognised in share premium.

2. Financial risks

Foreign exchange risk
TCM Group A/S has limited currency exposure and risk, entirely related to sales in NOK, where hedging in the range 70-100% of the net payments is applied. Other revenue was in DKK and purchases were primarily in DKK and EUR. Due to the current DKK-EUR fixing, purchases were not hedged. Purchase in other currencies were DKK 4 million in 2022 (DKK 4 million).

Credit risk
TCM Group A/S’ customer base comprises both professional customers and consumers. Credit management and payment terms are monitored for each customer group. The Group provides credit to professional customers whereas consumers usually do not get credit. Credit assessments are continuously performed on customers who make regular purchases. Credit insurance, bank guarantees and other collateral are utilized for the different markets and customer categories. Changes in impairment of trade receivables in 2022 amounted to DKK 2.6 million and is recognized as an expense in the income statement 2022. Actual losses on debtors in 2022 and 2021 have been immaterial in relation to the size of the Group and its activities. Due to the market situation and a higher overdue amount, provisions for possible losses have been increased. The provision of DKK 3.6 million constitutes 0.3% of net revenue for the year, which is considered sufficient to cover future expected losses. at 31 December 2022 of DKK 2.2 million (DKK 1.8 million).

Assumptions for analysis of interest-rate sensitivity
The stated sensitivities are calculated on the basis of the recognized financial assets and liabilities at 31 December 2022. No adjustments have been made for instalments, raising of loans, etc. during the course of the year. The computed expected fluctuations are based on the current market situation and expectations for the market developments in the interest rate level.

Financial exposure
The Group has signed a finance agreement with Nykredit Bank comprising a committed facility of DKK 300 million.## 2. Financial risks (continued)

The agreement initially includes a 3-year commitment plus an option to extend the facility with two 1-year extension options on similar terms, of which the Group has exercised the first 1-year extension. The bank loans contain a leverage covenant of 4.0. There has been no breach of any covenant during the period. The interest rates on the bank loans are variable. Mortgage loans with a nominal amount of DKK 28 million (DKK 31 million) are amortised over 20 years and expire in 2032. The interest rates of mortgage loans are variable.

Capital management

The Board of Directors has adopted a dividend policy with a target payout ratio of 40-60 percent of consolidated net profit for the year.

Age analysis, trade receivable

	2022	2021
DKK’000	DKK’000	DKK’000
Trade receivables before impairment	44,602	29,296
Non-due trade receivable	32,209	22,411
Past due trade receivable 0-30 days	4,036	1,902
Past due trade receivable 30-90 days	2,335	1,015
Past due trade receivable >90 days	6,022	3,968
Total overdue	12,392	6,886
Of which secured	4,036	3,046
– Impaired	0	0
Of which unsecured	8,357	3,840
– Impaired	(3,618)	(1,061)
Total overdue unsecured after impairment	4,739	2,779

Impairment loss recognized in the income statement during the period: 861 (25)

Fair value hierarchy of financial instruments measured at fair value in the balance sheet

Interest rate swaps are valued using an income approach (discounted cash flow). Expected future cash flows are based on relevant observable swap rates and discounted using a discount rate that reflects the credit risk of the relevant counterparties (level 2).

The classification of financial instruments measured at fair value is disaggregated in accordance with the fair value hierarchy:

Quoted prices in an active market for identical instruments (level 1)
Quoted prices in an active market for similar assets or liabilities or other valuation methods where all significant inputs are based on observable market data (level 2)
Valuation methods in which any significant input is not based on observable marked data (level 3)

Interest-rate risk

It is group policy to hedge interest rate risks on loans when it is assessed that the debt is material. The group manages interest rate risk by maintaining an appropriate mix between fixed and floating rate borrowings, and by use of interest rate swap contracts. For the Group’s floating rate cash and cash equivalents and debt to banks, an increase in interest rate level of 1% p.a. relative to the actual interest rates would have a negative impact on the profit for the year and on equity.

Trade receivables as of 1 January 2021 amounted to DKK 24.4 million.

Carrying amount of derivative financial instruments:

	2022	2021
DKK’000	DKK’000	DKK’000
Hedging – currency fluctuation	(1,173)	(37)
	(1,173)	(37)

Liquidity risk

The company has an available facility up to DKK 300 million and until 31 March 2025, with an option to extend it to 31 March 2026. The facility has an unused amount of DKK 100 million at 31 December 2022 and further DKK 4 million in liquidity. With budgeted numbers for 2023 and further sensitivity of 10% in lower revenue and a slight decrease in margin to budget, this will still be within the covenant in the agreement and with sufficient headroom in available liquidity during 2023.

Maturity structure, financial and operational liabilities – undiscounted cash flows

2022

Nominal amount, DKK million	0-6 months	6-12 months	1-5 years	5 years or later	Total
Bank loans	200.3	1.3	1.3	203.6	0.0
Mortgage loans	27.8	1.5	1.5	11.8	14.6
Lease liabilities	60.8	6.2	6.2	28.8	22.1
Trade payables	151.9	151.9	0.0	0.0	0.0
Other liabilities	51.7	47.5	3.6	0.6	0.0
Financial and operational liabilities at 31 December 2022	208.4	12.6	244.8	36.7	502.5

2021

Nominal amount, DKK million	0-6 months	6-12 months	1-5 years	5 years or later	Total
Bank loans	160.7	1.0	1.0	163.3	0.0
Mortgage loans	30.6	1.5	1.5	11.9	17.5
Lease liabilities	26.4	5.8	5.7	15.3	0.0
Trade payables	158.9	158.9	0.0	0.0	0.0
Other liabilities	53.4	50.1	2.2	1.1	0.0
Financial and operational liabilities at 31 December 2021	217.3	10.4	191.7	17.5	436.9

During the financial period, the Group had no financial instruments in level 1 or 3. The fair value of financial assets and financial liabilities measured at amortised cost is approximately equal to carrying amount, due to the short maturity of financial assets and the floating rate of the financial liabilities.

3. Revenue and segment information

The Group’s business activities are managed within a single operating segment that is producing and selling kitchens, bathrooms and storage. Kitchens and related products cover products for kitchen. The result of the operating segment is monitored by the Group’s management to evaluate it and to allocate resources.

Revenue

	Intangible assets
DKK’000	2022
Geographic areas
Denmark	1,032,496
Other countries	113,556
	1,146,052

	Tangible assets
DKK’000	2022
Geographic areas
Denmark	735,502
Other countries	0
	735,502

Revenue consists of sale of goods and services.

4. Staff Costs

Total costs for employee benefits

	DKK’000	DKK’000
	2022	2021
Salaries and other remuneration	216,535	206,347
Social security costs	5,736	5,806
Pension costs – defined contribution plans	17,356	25,328
Other staff costs	445	210
Total costs for employees	240,072	237,691

The average number of employees and number of men and women among Board members and Executive Management are described in note 5.

Remuneration and other benefits

Directors	Number of individuals	Base DKK’000	Variable salary, cash based (STI)	Variable remuneration, share based (LTI)	Other DKK’000	Pension costs	Total DKK’000
2022
Board of Directors	6	2,375	0	0	34	0	2,409
Executive Management	2	4,642	317	48	648	398	6,053
Total	8	7,017	317	48	682	398	8,462
2021
Board of Directors	5	2,188	0	0	10	0	2,198
Executive Management	2	4,567	0	377	602	383	5,929
Total	7	6,755	0	377	612	383	8,127

Number of options	2022	2021
As at 1 January	15,989	0
Granted during the year	17,427	15,989
Exercised during the year	0	0
Forfeited during the year	(6,246)	0
As at 31 December	27,170	15,989

No options expired during the periods covered by the above tables.

The LTI program is entirely granted to Executive Management and consists of annually commencing individual Performance Share Unit Plans with rolling three-year performance periods for the periods 2021-2023 and 2022-2024. When the LTI program is granted to the participants, a maximum of 50% of the annual basic salary is converted to a maximum number of performance share units based on the current share price e.g. an average over a 3-month period. At the end of each performance period, the performance share units may be converted into shares in TCM Group A/S, which will be granted free of charge. The performance measures for the LTI are all three-year accumulative and consist of absolute total shareholder return of the Company’s share, EBITDA, and carbon emission reduction. The fair value of the LTI program is estimated on an annual basis.

Share options outstanding at the end of the year have the following expiry dates:

	2022	2021
31 March 2024	9,743	15,989
31 March 2025	17,427	0
Total	27,170	15,989

Weighted average remaining contractual life of options outstanding at end of the period: 1.89 (2.25)

DKK’000	Estimated exercise ratio 2022	Estimated exercise ratio 2021	Fair value at 31 December:
	35%	50%	Granted in 2021
	28%	n.a.	Granted in 2022
Total	32%	50%	795

Fair value is estimated based on an estimate of the expected exercise ratio out of the maximum number of Performance Share Units and the share price when the LTI program was granted (share price in 2022: 65).

Employees including the Board of Directors and Executive Management have the opportunity to buy kitchens, bathrooms and storage at a discounted price. The purchases are done indirectly through an independent store. The total value of the purchases made by the Board of Directors and Executive Management was DKK 34 thousand (DKK 2 thousand) during the year. The remuneration report for the Board of Directors and the Executive Management is available on TCM Group´s website.

5. Average number of employees during the period

	2022	2021
Average number of employees	496	504
Board members	6	5
Of which women	1	1
Executive Management	2	2
Of which women	0	0

The Board of Directors consists of 6 members in total at the date of approval of these consolidated financial statements.

6. Audit fee

In addition to statutory audit, PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab, the auditors appointed at the Annual General Meeting, provides other assurance engagements and other services to the Group.

Specification by type of costs	DKK’000	DKK’000
	2022	2021
Statutory audit	675	0
Other assurance engagements	0	0
Tax and indirect taxes advisory	0	0
Other services	0	0
	675	0

The fee for non-audit services delivered by PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab to the Company amounted to DKK 0.0 million in 2022. In addition to statutory audit, the former auditors appointed at the Annual General Meeting, Deloitte Statsautoriseret Revisionspartnerselskab, provided other assurance engagements and other services to the Group.# Executive Management

Executive Management, which in 2022 in average totals 2 individuals, received salaries and benefits during the fiscal year amounting to DKK 4.6 million plus variable remuneration and other benefits amounting to a total salary for 2022 of DKK 5.5 million. In addition to basic salary, Executive Management has a Short-term Incentive program (STI) and a Long-term Incentive program (LTI) which is governed by the Remuneration policy. The STI for 2022 is capped at 50% of the annual basic salary and is based on annual KPIs. The bonus criterias for the STI are revenue, EBITDA and NWC ratio. The STI includes a threshold for the EBITDA target which, if not achieved, will result in no STI bonus to be paid, regardless of performance on other KPIs.

Board of Directors

Remuneration to members of the Board of Directors is determined by resolutions taken at the Annual General Meeting.

Chairman and CEO’s report
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Corporate Governance
ESG
Financial statements
TCM Group Annual report 2022
55

Notes to the consolidated financial statements (continued)

6. Audit fee (continued)

Below is how the income statement (extract) would have been presented if there were not adjusted for non-recurring items:

DKK’000	2022	2021
Revenue	1,146,052	1,108,274
Cost of goods sold	(918,272)	(869,583)
Gross profit	227,780	238,691
Selling expenses	(79,832)	(71,675)
Administrative expenses	(52,075)	(48,536)
Other operating income	1,040	19,966
Operating profit	96,913	138,447

DKK’000	2022	2021
Specification by type of costs
Statutory audit	0	595
Other assurance engagements	0	65
Tax and indirect taxes advisory	0	30
Other services	0	73
Total	0	763

7. Depreciation/amortization and impairment by function

DKK’000	2022	2022	2021	2021
	Depreciation/ amortization	Impairment	Depreciation/ amortization	Impairment
Cost of goods sold	14,567	0	12,562	0
Selling expenses	964	0	1,060	0
Administrative expenses	2,421	0	3,296	0
Total depreciation/amortization and impairment	17,952	0	16,918	0

TCM Group presents non-recurring items separately to ensure comparability. Nonrecurring items consist of income and expenses that are special and of a non-recurring nature. For 2022 non-recurring items consist of costs related to Covid-19 and supply chain disruptions, restructuring costs related to the restructuring of the store network in the Greater Copenhagen area as well as organisational restructuring carried out during 2022. The non-recurring costs are partly offset by a non-recurring gain from the final earn-out from the Celebert/ kitchn.dk transaction.

8. Non-recurring items

DKK’000	2022	2021
Costs related to Covid-19 and supply chain disruptions	5,440	14,010
Restructuring	4,658	1,300
Net gain from the Celebert/kitchn.dk transaction	(3,620)	(13,503)
Gain from the divestment of an own operated store	0	(2,498)
Total	6,478	(691)

Chairman and CEO’s report
Financial Highlights
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Corporate Governance
ESG
Financial statements
TCM Group Annual report 2022
56

Notes to the consolidated financial statements (continued)

9. Financial income and expenses

DKK’000	2022	2021
Financial income
Interest income on financial assets measured at amortized costs	86	149
Interest income on discounted subleases	355	189
Financial expenses
Interest expense on liabilities measured at amortized costs	(8,493)	(3,220)
Interest expenses on discounted lease liabilities	(722)	(380)
Total	(8,774)	(3,262)

10. Corporation tax

DKK’000	Income statement	Other comprehensive income	Total comprehensive income
Tax for the year can be specified as follows:
Current tax	19,140	250	19,390
Change in deferred tax during the year	(231)	0	(231)
Total	18,909	250	19,159

Tax for the previous year can be specified as follows:
Current tax	24,557	165	24,722
Change in deferred tax during the year	472	0	472
Total	25,029	165	25,194

Reconciliation of the effective tax rate for the period can be specified as follows:

DKK’000	% 2022	% 2021
Tax rate	22.0	19,668
Non-taxable income	(0.3)	(278)
Non-deductible expenses	0.1	49
Other	(0.6)	(530)
Effective tax rate for the year	21.2	18,909

Non-taxable income primarily relates to result of associated companies. In 2021 non-taxable income includes technical gains from divested activities.

11. Intangible assets

DKK’000	2022	2021
Goodwill
Opening carrying amount	369,796	369,796
Closing carrying amount	369,796	369,796
Brand
Opening carrying amount	171,961	171,961
Closing carrying amount	171,961	171,961

Impairment testing of goodwill and brand
At the end of 2022, recognized goodwill amounted to DKK 369.8 million (DKK 369.8 million) and recognized brand amounted to DKK 172.0 million (DKK 172.0 million). Goodwill has been allocated to cash generating unit (CGU) when the unit were acquired. TCM Group A/S has one CGU corresponding to the operating segment “Producing and selling kitchens, bathrooms and storage”, hence the acquired goodwill has been allocated here to. Goodwill is subject to an annual impairment test by calculating the expected recoverable amount of the CGU. The recoverable amount is calculated as the expected cash flow discounted by a weighted average cost of capital (WACC) after tax for the CGU. The recoverable amount, calculated in conjunction with this, is compared with the carrying amount, for the CGU. The starting point of the calculation is the estimated future cash flows based on the financial budget for the forthcoming fiscal year. A forecast for the next four years is prepared based on this budget and expectations regarding market trends in the years ahead, which reflects previous experience. When calculating the expected cash flow, significant assumptions applied include expected demand, growth in net sales, operating margin and working capital requirements. Various economic indicators are used to analyse the business climate, as well as external and internal analyses of these. The assumptions are also based on the impact of the Group’s long-term strategic initiatives, comprising differentiated brands, a Group-wide range, central sourcing and product development. In order to extrapolate the cash flows beyond the first five years, a growth rate of 2% (2%) is applied. The weighted average cost of capital is calculated on the average debt/equity ratio for large companies in similar industries and costs of debt and equity. The cost of shareholders’ equity is determined on the basis of the assumption that all investors require at least the same level of return as for risk-free government bonds, with an additional risk premium for the estimated risks assumed when they invest in cash generating units. The required return on debt financed capital is also calculated on the return on risk-free government bonds and by applying a borrowing margin based on an estimated company-specific risk. The current tax rate of 22% is applied.

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Corporate Governance
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Financial statements
TCM Group Annual report 2022
57

Notes to the consolidated financial statements (continued)

11. Intangible assets (continued)

Brand is subject to an annual impairment test by a relief from royalty test. The recoverable amount is calculated based on the expected cash flow based on the budget for the forthcoming fiscal year and a forecast for the next four years, a royalty of the expected brand revenue, discounted by a weighted average cost of capital (WACC) after tax. WACC is based on similar assumptions as with regards to the above. The recoverable amount is compared with the carrying amount. Testing of goodwill and brand did not lead to any impairment in 2022 or 2021. In management’s assessment, likely changes in the basic assumptions will not lead to the carrying amount exceeding the recoverable amount.

Other intangible assets

DKK’000	2022	2021
Opening cost	53,753	49,624
Investments for the period	10,116	4,465
Disposals for the period	0	(336)
Closing accumulated cost	63,869	53,753
Opening amortization	49,192	47,927
Amortization for the period	596	1,400
Disposals for the period	0	(134)
Closing accumulated amortization	49,788	49,193
Closing carrying amount
Of which: Software and ERP platform	14,081	4,561
Closing carrying amount	14,081	4,561

12. Tangible assets

DKK’000	Buildings	Land and improvements	Machinery and equipment	Other tools, fixtures and fittings	Assets under construction
Opening cost at 1 January 2022	94,971	6,988	56,020	15,247	11,773
Investments for the period	32,306	5,417	6,792	5,533	1,119
Transfer	8,988	0	2,786	0	(11,773)
Disposals for the period	(350)	0	(10)	(576)	0
Closing cost amount at 31 December 2022	135,915	12,405	65,588	20,204	1,119
Opening depreciation and impairment at 1 January 2022	16,858	0	13,496	8,625	0
Disposals for the period	(210)	0	(10)	(547)	0
Depreciation for the period	4,545	0	9,560	3,251	0
Closing depreciation and impairment at 31 December 2022	21,193	0	23,046	11,329	0
Closing carrying amount at 31 December 2022	114,722	12,405	42,542	8,875	1,119
Of which right-of-use assets
Opening carrying amount at 1 January 2022	7,788			1,879
Investment for the period	26,847			1,623
Disposals for the period	(350)			(566)
Depreciation for the period	(2,284)			(788)
Closing carrying amount at 31 December 2022	32,001			2,148

In 2022, the Group’s weighted cost of capital before tax amounted to 12.3% (11.0%) and after tax 9.6% (8.6%).

DKK’000	Buildings	Land and improvements
Of which right-of-use assets
Opening carrying amount at 1 January 2021	13,315	2,129
Investment for the period	0	1,832
Disposals for the period	(3,118)	(631)
Depreciation for the period	(2,410)

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Corporate Governance
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Financial statements
TCM Group Annual report 2022
58

Notes to the consolidated financial statements (continued)# Notes to the consolidated financial statements (continued)

12. Tangible assets (continued)

DKK’000	2022	2021
Amounts recognized in the income statement
Cost of short term leases	1,256	891
Variable leasing costs that are not included in leasing liabilities	138	152
	1,394	1,043

No impairment was charged to tangible assets in 2022 or 2021.

DKK’000	Buildings	Land and improvements	Machinery and technical equipment	Other tools, fixtures and fittings	Assets under construction	Total
Opening cost at 1 January 2021	95,002	6,833	11,855	33,286	13,700	160,676
Investments for the period	5,023	155	11,575	11,326	4,273	32,352
Transfer	160	0	(11,657)	11,497	0	1,000
Disposals for the period	(5,215)	0	0	(89)	(2,726)	(8,030)
Closing cost amount at 31 December 2021	94,971	6,988	11,773	56,020	15,247	185,999
Opening depreciation and impairment at 1 January 2021	14,722	0	0	5,590	7,112	27,424
Disposals for the period	(2,097)	0	0	(89)	(1,780)	(3,966)
Depreciation for the period	4,232	0	0	7,994	3,292	15,518
Closing depreciation and impairment at 31 December 2021	16,858	0	0	13,496	8,625	38,979
Closing carrying amount at 31 December 2021	78,113	6,988	11,773	42,524	6,622	147,020

13. Investments in associated companies

DKK’000	2022	2021
Cost at start of year	61,178	0
Additions	0	61,178
Carrying amount at end of year	61,178	61,178
Value adjustments at start of year	(13,740)	0
Elimination of internal proﬁt	0	(14,292)
Share of proﬁt/(loss)	1,263	554
Value adjustments at end of year	(12,477)	(13,740)
Carrying amount as at end of year	48,702	47,439

The associated company Celebert ApS sells kitchens online and has balance sheet date as at 30th of June. As of 30 June 2022 Celebert Aps had a gross proﬁt on DKK 14 million and a net proﬁt on DKK 3 million. As of 30 june 2022 assets in Celebert ApS. amounted to DKK 42 million of which DKK 11 million was current assets. As of 30 June 2022 short-term liabilities amounted to DKK 7 million. At the end of 2022, recognized goodwill related to associated companies amounted to DKK 45.6 million (DKK 45.6 million). No impairment was charged to goodwill related to associated companies in 2022 and 2021.

14. Inventories

DKK’000	2022	2021
Raw materials and consumables	41,075	46,104
Products in progress	29,647	22,929
Finished products	11,180	9,931
Total write-down of inventories	(1,200)	(1,200)
	80,702	77,764

Costs of goods sold recognized as an expense during the period are DKK 912.0 million (DKK 853.7 million) and write downs of inventory recognized as an income oﬀ-setting scrapped inventory during the period are DKK 0.0 million (income of DKK 0.2 million).

15. Other financial assets and other receivables

DKK’000	2022	2021
Other financial assets
Subleases	16,394	7,559
Receivables falling due in 12 month or later	9,450	0
Deposits	970	965
Total	26,814	8,524
Other receivables
Subleases	8,312	7,120
Other receivables	21,888	24,384
Total	30,200	31,505

Subleases are speciﬁed as follows:

	Undiscounted value	Undiscounted value
DKK’000	2022	2021
Falling due for payment within one year	8,312	8,521	7,120
Falling due for payment within one and two years	5,173	5,314	7,337
Falling due for payment within two and three years	5,332	5,420	222
Falling due for payment within three and four years	5,495	5,528	0
Falling due for payment within four and ﬁve years	396	397	0
Falling due for payment later	0	0	0
Total	24,708	25,180	14,679

Subleases falling due for payment later than one year is presented as ﬁnansial assets. Subleases falling due for payment within one year are presented as other receivables, but are not included in the calculation of net working capital.

16. Prepaid expenses and accrued income

DKK’000	2022	2021
Other prepaid expenses	2,932	3,235
Total	2,932	3,235

17. Share capital

	No. of registered shares	No. of shares outstanding	Nominal value
As of 1 January 2022	10,000,000	10,000,000	1,000,000
Reduction of share capital	(857,706)	(857,706)	(85,771)
As of 31 December 2022	9,142,294	9,142,294	914,229
As of 1 January 2021	10,000,000	10,000,000	1,000,000
As of 31 December 2021	10,000,000	10,000,000	1,000,000

Share capital amounted to nominal DKK 914,229. The share’s nominal value is DKK 0.1. All of the registered shares are fully paid. All shares are ordinary shares of the same type.

Treasury shares

	No. of shares	Nominal value	price	% of shares
As of 1 January 2022	832,227	83,223	135,976	8.3
Purchase of treasury shares	100,479	10,048	14,368	1.0
Reduction of share capital	(857,706)	(85,771)	(138,257)	(8.6)
As of 31 December 2022	75,000	7,500	12,087	0.8
As of 1 January 2021	0	0	0	0
Purchase of treasury shares	832,227	83,223	135,976	8.3
As of 31 December 2021	832,227	83,223	135,976	8.3

18. Value adjustments of currency hedges

	Value adjustment of cash flow hedges	Total	Value adjustment of cash flow hedges	Total
DKK’000	2022	2022	2021	2021
Opening balance	(29)	(29)	(614)	(614)
Value adjustments of currency hedges before tax	(1,137)	(1,137)	750	750
Tax on value adjustments of currency hedges	250	250	(165)	(165)
Closing balance	(916)	(916)	(29)	(29)

Hedging reserve

The fair value adjustment of unrealized gains/losses of the forward exchange contracts is adjusted in equity. The forward exchange contracts, which have been entered into with the company’s usual bank connection, cover a period 0-12 months from the balance sheet date.

19. Earnings per share

Earnings per share before dilution

Earnings per share before dilution are calculated by dividing proﬁt attributable to the shareholders by the weighted average number of outstanding ordinary shares during the period.

	2022	2021
Proﬁt attributable to shareholders (DKK’000)	70,493	110,709
Weighted average number of outstanding ordinary shares before dilution	9,074,847	9,584,933
Earnings per share before dilution (DKK)	7.77	11.55

Earnings per share after dilution

To calculate earnings per share after dilution, the weighted average number of outstanding ordinary shares were adjusted for the dilution eﬀect of all potential ordinary shares. These potential ordinary shares were attributable to the Long-term Incentive program (LTI) that were allotted to the Executive Management in 2021 and 2022. Refer to note 4. If all the performance targets set for the ﬁrst plan, PSU 2021 – 2023 and 2022-2024, are fully achieved, the aggregate allocated maximum number of share units and, accordingly, shares to be awarded 27,170 shares (gross earning).

	2022	2021
Weighted average number of outstanding ordinary shares	9,074,847	9,584,933
Employee share option scheme	17,427	7,995
Weighted average number of outstanding ordinary shares after dilution	9,092,274	9,592,928
Earnings per share after dilution (DKK)	7.75	11.54

20. Dividend

The Board of Directors proposes to the Annual General Meeting that a mandate is provided to the Board of Directors with the option to distribute a dividend during the second half of 2023 of up to DKK 30 million.

21. Deferred tax

Deferred tax

DKK’000	liabilities	Net
Opening balance, 1 January 2022	53,692	53,692
Recognized in net proﬁt for the year	(299)	(299)
Closing balance, 31 December 2022	53,393	53,393
Opening balance, 1 January 2021	53,220	53,220
Recognized in net proﬁt for the year	472	472
Closing balance, 31 December 2021	53,692	53,692

The change in deferred tax liabilities for the period:

DKK’000	Temporary differences in intangible assets	Temporary differences in tangible assets	Temporary differences in morgage debt	Temporary differences in inventory	Temporary differences in receivables	Total
As of 1 January 2022	39,391	14,315	543	(179)	(378)	53,692
Recognized in net proﬁt for the year	15	(487)	152	(31)	52	(299)
As of 31 December 2022	39,406	14,467	595	(666)	(409)	53,393
As of 1 January 2021	39,336	13,544	972	(143)	(489)	53,220
Recognized in net proﬁt for the year	55	771	-429	(36)	111	472
As of 31 December 2021	39,391	14,315	543	(179)	(378)	53,692

Corporation tax-rate in Denmark for the year is 22.0%. There are no loss carryforwards.

22. bank loans and mortgage loans

DKK’000	2022	2021
Maturity structure
Within 1 year	203,095	163,506
Between 1 and 5 years	11,028	11,049
Longer than 5 years	14,032	16,776
Total	228,155	191,332

Refer to note 2 for additional information regarding bank loans and mortgage loans.

23. Financial assets and liabilities

DKK’000	Financial assets measured at amortized cost	Financial liabilities measured at amortized cost	Derivative Financial instruments measured at fair value	Total carrying amount
Other long-term receivables	0	965	0	965
Trade receivable	0	28,235	0	28,235
Cash and cash equivalents	0	11,884	0	11,884
Total	0	41,084	0	41,084
Long-term interest-bearing liabilities	0	0	43,014	43,014
Current interest-bearing liabilities	0	0	174,727	174,727
Accounts payable	0	0	158,924	158,924
Long-term other liabilities	0	0	1,132	1,132
Short-term current other liabilities	37	0	52,187	52,224
Total	37	0	429,984	430,021
# Financial assets and liabilities

	Derivative Financial instruments measured at fair value	Financial assets measured at amortized cost	Financial liabilities measured at amortized cost	Total carrying amount
DKK’000
Other long-term receivables	0	10,420	0	10,420
Trade receivable	0	40,984	0	40,984
Cash and cash equivalents	0	4,392	0	4,392
Total	0	55,796	0	55,796
Long-term interest-bearing liabilities	0	0	73,873	73,873
Current interest-bearing liabilities	0	0	215,068	215,068
Accounts payable	0	0	151,892	151,892
Long-term other liabilities	0	0	587	587
Short-term current other liabilities	1,116	0	50,095	51,211
Total	1,116	0	491,515	492,631

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Notes to the consolidated financial statements (continued)

24. Acquisition of operations (associated companies)

2021: Acquisition 45% af Celebert ApS

On 6 July 2021, TCM Group entered into a strategic partnership with, and acquired stake in the fast growing Danish e-commerce kitchn business Celebert. TCM Group merged its e-commerce activities in kitchn.dk with the activities of Celebert and has initially acquired a 45% stake in Celebert. Cost related to the transaction amounted to DKK 4.0 million and are presented under non-recurring items for 2021.

2022: Final settlement of earn out

Amounted to DKK 2.2 million in 2022.

DKK’000	Assets held for sale	Purchase price	Merged activities
	29,000
		32,178	61,178
Equity value of acquired net assets – 45%			(15,528)
Goodwill before elimination			45,650
Elimination of internal proﬁt			(14,292)
Goodwill after elimination			31,358

Goodwill is attributable to future expected growth potential and expected synergies with the merger of our e-commerce activities in kitchn.dk with Celebert ApS.

25. Changes in liabilities attributable to the financing activities

DKK’000	Mortgage loans	Bank loans	Lease liabilities	Total
Opening balance, 1 January 2022	30,629	160,701	26,411	217,741
Non-cash change	0	0	28,573	28,573
New lease liabilities	0	0	(158)	(158)
Terminated leases	0	0	10,028	10,028
Subleases settled directly from the franchisee	0	0	0	0
Amortization of borrowing costs	0	0	38,443	38,443
Financing cash ﬂows	(2,805)	0	(4,068)	(6,873)
Repayment of loans	0	39,628	0	39,628
Changes in cash pool	(2,805)	39,628	(4,068)	32,755
Closing balance, 31 December 2022	27,825	200,329	60,786	288,939

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Notes to the consolidated financial statements (continued)

26. Pledged assets, contingent liabilities and commitments

25. Changes in liabilities attributable to the financing activities (Continued)

The Group has, in respect of it’s commitment to Nykredit, issued a pledge ban on the Group’ assets. For collateral for debt to mortgage lender, DKK 27.8 million (DKK 30.6 million), pledges have been given in land and buildings with a carrying amount as of 31 December 2022 amounting to DKK 95.1million (DKK 77.3 million). Guarantees related to AB92 - provisions of work and supplies within building and engineering – amount to a total of DKK 1.4 million (DKK 1.9 million). The Group has contingent liabilities pertaining to sub-contractor guarantees that arise in normal com- mercial operations. No signiﬁcant liabilities are expected to arise through these contingent liabilities. Other bank guarantees amount in total to DKK 0.3 mil- lion (DKK 0.3 million).

DKK’000	Mortgage loans	Bank loans	Lease liabilities	Total
Opening balance, 1 January 2021	33,443	19,641	34,936	88,020
Non-cash change	0	0	3,184	3,184
New lease liabilities	0	0	(411)	(411)
Terminated leases	0	0	(7,061)	(7,061)
Subleases settled directly from the franchisee	9	359	0	368
Amortization of borrowing costs	9	359	(4,288)	(3,920)
Financing cash ﬂows	(2,823)	(20,000)	(4,237)	(27,060)
Repayment of loans	0	160,701	0	160,701
Changes in cash pool	(2,823)	140,701	(4,237)	133,641
Closing balance, 31 December 2021	30,630	160,701	26,411	217,741

27. Related party transactions

Related parties with a controlling interest

As at 31 December 2022, there are no related parties with a controlling interest in the Company.

Transactions between related parties

During the ﬁnancial period, the Group has had the following transactions with related parties:

Referring to note 4: Remuneration to Executive Management and Board of Directors. The Group has had transactions with the associated company Celebert ApS. Transactions related to sales amounted to DKK 20.2 million and transactions related to administration fees amounted to DKK 0.2 million. There are no other transactions with related parties.

28. Events after the balance sheet date

Apart from the events recognized or disclosed in the annual report, no other events have occurred after the balance sheet date to this date which would inﬂuence the evaluation of this annual report.

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Notes to the consolidated financial statements (continued)

29. Companies in the TCM group

Business	Share of equity	Registration no	Domicile	Parent company
TCM Group A/S		37291269	Holstebro
Subsidiaries
TMK A/S	100%	75924712	Holstebro	TCM Group A/S
Nettoline A/S	100%	31599555	Aulum	TCM Group A/S
Associated companies
Celebert ApS	45%	27428959	Aalborg	TCM Group A/S

Ratios: Calculation formula

Gross margin: Gross proﬁt * 100 / Revenue
EBITDA margin: EBITDA * 100 / Revenue
Adjusted EBITDA margin: Adjusted EBITDA * 100 / Revenue
Adjusted EBIT margin: Adjusted EBIT * 100 / Revenue
EBIT margin: EBIT * 100 / Revenue
Solvency ratio: Equity * 100 / Balance sheet total
Leverage ratio: Net interest-bearing debt excluding tax liabilities / 12 months adjusted EBITDA
NWC ratio: Net working capital (1) * 100 / 12 months revenue
Capex ratio excl. acquisitions: Capex ratio excluding acquisitions is calculated as investments in tangible assets (capex) divided with revenue. Capex is exclusive investments in connection with acquisitions.
Cash conversion ratio: Cash conversion ratio is calculated as adjusted EBITDA less the change in net working capital (1) and capex excluding acquisitions divided by adjusted EBITDA. The ratio is for the last twelve months.

The deﬁnition and calculation formula for earnings per share before and after dilution can be found in note 19 in the consolidated ﬁnancial statements.

(1) Net working capital

Is adjusted with assets and liabilities held for sale.

Definitions

Key figures

Key ﬁgures and ﬁnancial ratios have been deﬁned and calculated as stated below:

Following key ﬁgures are not directly derived from the face of the income statement or balance sheet and as such are deﬁned as follows:

Adjusted EBITDA: Operating proﬁt before non-recurring items (Adjusted EBIT) plus depreciation and amortization.
Adjusted EBIT: Operating proﬁt before non-recurring items (Adjusted EBIT).
Net interest-bearing debt: Current and non-current interest-bearing loans and borrowings less interest-bearing receivables and cash and cash equivalents.
Net working capital: The sum of inventories, trade receivables, other receivables (excluding subleases) and prepayments less the sum of prepayments from costumers, trade payables and other liabilities.

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Financial statements of the parent company

67
67
68
69
69

Income statement and statement of comprehensive income

Balance sheet as of 31 December

DKK’000	Note	2022	2021
Assets
Non-current assets
Investments in subsidiaries	6	496,756	496,756
Financial non-current assets	4	496,756	496,756
Total non-current assets		496,756	496,756
Current assets
Receivables from subsidiaries	111,641	80
Other receivables	24,832	0
Deferred tax assets	66	0
Tax receivables		6,395	2,273
Prepaid expenses and accrued income	1,556	113,343
Total current assets		139,590	115,696
Cash and cash equivalents	12	33,511	0
Total current assets		33,511	0
Total assets		610,099	610,099

Equity and liabilities
Share capital		1,000	1,000
Treasury shares		(135,976)	(135,976)
Retained earnings		444,421	444,421
Proposed dividend	54,404	54,404
Total equity		363,849	363,849

Non-current liabilities
Bank loans	7	0	587
Total non-current liabilities		0	587

Current liabilities
Other payables	1,132	1,132
Total current liabilities		1,132	1,132
Total liabilities		1,132	1,719
Total equity and liabilities		610,099	610,099

DKK’000	Note	2022	2021
Revenue		7,296	8,000
Gross proﬁt		7,296	8,000
Administrative expenses	3	(11,179)	(12,130)
Operating loss		(3,883)	(4,130)
Dividend from subsidiaries	4	115,000	150,000
Financial income		2,283	422
Financial expenses		(6,332)	(2,126)
Proﬁt before tax		107,068	144,166
Tax for the year	5	1,742	1,231
Net proﬁt for the year		108,810	145,398

Other comprehensive income
Items that may be reclassiﬁed subsequently to proﬁt or loss
Value adjustments of cash-ﬂow hedges before tax		0	0
Tax on value adjustments of cash-ﬂow hedges		0	0
Other comprehensive income for the year		0	0
Total comprehensive income		108,810	145,398

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Balance sheet as of 31 December (continued)

DKK’000	Share capital	Treasury shares	Retained earnings	Proposed dividend	Total
Opening balance 01.01.2022	1,000	(135,976)	444,421	54,404	363,849
Net proﬁt for the year	0	0	108,810	0	108,810
Total comprehensive income for the year	0	0	108,810	0	108,810
Dividend paid	0	0	(54,404)	(54,404)	(108,808)
Share based incentive program	0	0	104	0	104
Purchase of treasury shares	0	(14,370)	0	0	(14,370)
Reduction of share capital	(86)	0	0	0	(86)
Closing balance 31.12.2022	914	(138,171)	403,989	0	403,989

Changes in shareholders’ equity

DKK’000	2022	2021
Share capital	1,000	1,000
Treasury shares	(135,976)	(135,976)
Retained earnings	444,421	444,421
Proposed dividend	54,404	54,404
Total	363,849	363,849

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Cash flow statement

DKK’000	Note	2022	2021
Operating activities
Net proﬁt for the year		108,810	145,398
Depreciation and amortization	3	11,179	12,130
Dividend from subsidiaries	4	(115,000)	(150,000)
Other adjustments		66	(2,743)
Changes in working capital		(5,487)	(12,843)
Cash flows from operating activities		9,568	(7,058)

Investing activities
Purchase of tangible assets		(1,676)	(2,882)
Cash flows from investing activities		(1,676)	(2,882)

Financing activities
New long-term debt	7	0	160,701
Repayment of long-term debt	7	(587)	0
Interest paid		(6,332)	(2,126)
Dividend paid		(54,404)	0
Purchase of treasury shares		(14,370)	0
Cash flows from financing activities		(75,693)	158,575

Net change in cash and cash equivalents		32,219	148,635
Cash and cash equivalents at beginning of year		1,292	150,927
Cash and cash equivalents at end of year		33,511	1,292

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Notes to the parent financial statements

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```# Notes to the parent financial statements

1. Significant accounting estimates and judgements

DKK’000
| | NOTE | 2022 | 2021 |
| :------------------------ | :--- | :---- | :---- |
| Determining the carrying amount of certain assets and liabilities requires an estimate of how future events will affect the value of those assets and liabilities at the balance sheet date. | | | |
| Estimates that are significant to the Parent’s financial reporting are made, for instance, related to valuation of investments in subsidiaries, which constitute a major share of the Parent’s total assets. | | | |
| Subsidiaries are tested for impairment if events or other circumstances indicate that the carrying amount is not recoverable. Measuring subsidiaries requires significant estimates to be made when making different assumptions, including expected future cash flows, discount rate and terminal value growth rates. | | | |
| The sensitivity to changes in the assumptions applied collectively and individually – may be significant. | | | |

Cash flow statement

DKK’000
| | | 2022 | 2021 |
| :------------------------------------ | :---- | :------ | :------ |
| Operating activities | | | |
| Operating loss | | (59,144) | (25,874) |
| Income tax paid | | (4,130) | (4,629) |
| Change in operating receivables | | (81,817) | (851) |
| Change in operating liabilities | | (26,226) | (2,845) |
| Cash flow from operating activities | | (171,317) | (34,199) |
| Investing activities | | | |
| Dividend received | | 150,000 | 115,000 |
| Cash flow from investing activities | | 150,000 | 115,000 |
| Financing activities | | | |
| Interest paid | | (1,344) | (4,049) |
| Proceeds and repayment of loans | | 140,701 | (20,000) |
| Purchase of treasury shares | | (135,976) | (130,000) |
| Dividend paid | | (54,404) | (33,195) |
| Cash flow from financing activities | | (50,023) | (187,244) |
| Cash flow for the year | | (71,340) | (106,443) |
| Cash at start of year | | 160,701 | 267,144 |
| Cash at end of year | | 89,361 | 160,701 |

2. Staff Costs

DKK’000
| | | 2022 | 2021 |
| :---------------------------------------------- | :---- | :---- | :---- |
| Specification by type of costs | | | |
| Salaries and other remuneration | | 6,505 | 7,341 |
| Social security costs | | 255 | 0 |
| Pension costs – defined contribution plans | | 399 | 574 |
| Total costs for employees | | 7,159 | 7,915 |
| Further employee benefits for executive management a.o. company car, phone etc. are presented as administration costs. | | | |

DKK’000
| | | | | | | | | |
| :------------------------------------------------------------------ | :----------- | :--- | :---- | :---- | :---- | :---- | :---- | :---- |
| Remuneration and other benefits | | | | | | | | |
| | | Base salary, DKK’000 | Variable remuneration, cash based (STI) DKK’000 | Variable remuneration, share based (LTI) DKK’000 | Other benefits DKK’000 | Pension costs DKK’000 | Total DKK’000 | Number of individuals |
| Board of Directors | | 2,375 | 0 | 0 | 34 | 0 | 2,409 | 6 |
| Executive Management | | 4,642 | 317 | 48 | 648 | 398 | 6,053 | 2 |
| Total | | 7,017 | 317 | 48 | 682 | 398 | 8,462 | 8 |
| Refering to note 4 of the consolidated financial statement for description of the Short-term Incentive program (STI) and Long-term Incentive program (LTI). | | | | | | | | |

3. Audit fee

DKK’000
| | 2022 | 2021 |
| :------------------------------------------------------------------------------------------- | :--- | :--- |
| In addition to statutory audit, PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab, the auditors appointed at the Annual General Meeting, provides other assurance engagements and other services to the Group. | | |
| Specification by type of costs | | |
| Statutory audit | 255 | 0 |
| Other assurance engagements | 0 | 0 |
| Total costs for employees | 255 | 0 |
| The fee for non-audit services delivered by PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab to the Company amounted to DKK 0.0 million in 2022. | | |
| In addition to statutory audit, the former auditors appointed at the Annual General Meeting, Deloitte Statsautoriseret Revisionspartnerselskab, provided other assurance engagements and other services to the Group. | | |
| Specification by type of costs | | |
| Statutory audit | 185 | 65 |
| Other assurance engagements | 0 | 0 |
| Total costs for employees | 185 | 65 |

4. Financial income and expenses

DKK’000
| | | 2022 | 2021 |
| :----------------------------------------------- | :---- | :------ | :------ |
| Financial income | | | |
| Interest income from subsidiaries | | 2,283 | 422 |
| Financial expenses | | | |
| Interest expense on liabilities measured at amortized costs | | (6,332) | (2,125) |
| Total | | (4,049) | (1,704) |

5. Corporation tax

DKK’000
| | | 2022 | 2021 |
| :------------------------------------------------------------------------------------- | :---- | :---- | :---- |
| Tax for the year can be specified as follows: | | | |
| Current tax | | 1,742 | 0 |
| Total | | 1,742 | 0 |
| Tax for the previous year can be specified as follows: | | | |
| Current tax | | 1,231 | 0 |
| Total | | 1,231 | 0 |
| Reconciliation of the effective tax rate for the year can be specified as follows: | | | |
| | | 2022 | 2021 |
| Tax rate | | 22.0% | 22.0% |
| Profit before tax | | 23,555 | 31,717 |
| Tax calculated on profit before tax | | (5,182) | (6,978) |
| Non-taxable income | | 3,436 | 5,247 |
| Non-deductible expenses | | (1,677) | (1,033) |
| Effect of different tax rates in foreign countries | | 0 | 0 |
| Changes in deferred tax assets/liabilities not recognized | | 0 | 0 |
| Effective tax rate for the year | | -1.6% | -0.9% |
| Non-taxable income relates to dividend from subsidiaries. | | | |

6. Investments in subsidiaries

DKK’000
| | | 2022 | 2021 |
| :------------------------------------ | :---- | :------ | :------ |
| Investments in subsidiaries | | | |
| Cost at start of year | | 496,756 | 496,756 |
| Cost at end of year | | 496,756 | 496,756 |
| Carrying amount at end of year | | 496,756 | 496,756 |
| Investments in subsidiaries comprise: | | | |
| TMK A/S, 100% | | | |
| Refer to note 29 of the consolidated financial statements for a list of all companies in the TCM Group. | | | |
| The carrying amount of the Parent’s investments in subsidiaries is tested for impairment if an indication of impairment exists. There has not been identified any indication of impairment. | | | |

7. Changes in liabilities attributable to the financing activities

DKK’000
| | Bank loans | Total |
| :----------------------------- | :--------- | :------ |
| Opening balance, 1 January 2022 | 160,701 | 160,701 |
| Non-cash change | 0 | 0 |
| Amortization of borrowing costs| 0 | 0 |
| Financing cash flows | 39,628 | 39,628 |
| Repayment of loans | (20,000) | (20,000)|
| Closing balance, 31 December 2022 | 180,329 | 180,329 |

DKK’000
| | Bank loans | Total |
| :----------------------------- | :--------- | :------ |
| Opening balance, 1 January 2021 | 19,641 | 19,641 |
| Non-cash change | 0 | 0 |
| Amortization of borrowing costs| 359 | 359 |
| Financing cash flows | 140,701 | 140,701 |
| Repayment of loans | 0 | 0 |
| Closing balance, 31 December 2021 | 160,701 | 160,701 |

8. Guarantees, contingent liabilities and collateral

The Company has, in respect of the Group’s commitment to Nykredit, issued a pledge ban on all assets. TCM Group A/S is the management company in the Danish joint taxation. Consequently, referring to the Danish Corporation Tax Act regulations, TCM Group A/S is, with effect from the financial year 2016, liable for any income taxes, etc. for the jointly taxed companies, and TCM Group A/S is likewise liable for any obligations to withhold tax at source on interests, royalties and returns for the jointly taxed companies.

9. Related parties

For specification of related parties refer to note 27 and 29 of the consolidated financial statements.
Referring to note 4 of the consolidated financial statements: Remuneration to Executive Management and Board of Directors.
Management fee from subsidiaries in the financial year amounts to DKK 7.3 million (DKK 8.0 million).
Intragroup transactions are carried out on arm’s length principles. Aside from this, no transactions with the Executive Management or major shareholders or other related parties have been made during the year.

10. Events after the balance sheet date

Apart from the events recognized or disclosed in the annual report, no other events have occurred after the balance sheet date to this date which would influence the evaluation of this annual report.

11. Accounting policies

These parent financial statements are prepared under the historical cost convention and presented in accordance with International Financial Reporting Standards as adopted by the EU and additional requirements of the Danish Financial Statements Act.

Description of accounting policies applied

Compared with the accounting policies described for the consolidated financial statements (see note 1 to the consolidated financial statements), the accounting policies applied by the Parent are different in the following:

Dividend income

Distribution of profits accumulated by subsidiaries is taken to income in the Parent’s income statement in the financial year in which the dividend is received.

Investments in subsidiaries

Investments in subsidiaries are measured at cost in the parent financial statements. If an indication of impairment exists, then an impairment test is performed as described in the accounting policies for the consolidated financial statements. If the carrying amount exceeds the recoverable amount, investments are written down to such lower amount.

12. Financial risks

Interest-rate risk

It is group policy to fully or partially hedge interest rate risks on loans when it is assessed that the debt is material. The group manages interest rate risk by maintaining an appropriate mix between fixed and floating rate borrowings, and by use of interest rate swap contracts.

Capital management

The Board of Directors has adopted a dividend policy with a target payout ratio of 40-60 percent of consolidated net profit for the year.# Chairman and CEO’s report

Financial Highlights

Our business

Corporate Governance

ESG

Financial statements

TCM Group Annual report 2022
74

Statement by Management on the annual report

The Board of Directors and the Executive Management have today considered and adopted the annual report for the financial year 1 January 2022 – 31 December 2022. The Consolidated Financial Statements and the Parent Company Financial Statements are prepared in accordance with International Financial Reporting Standards as adopted by the EU and additional requirements of the Danish Financial Statements Act.

Torben Paulin
Chief Executive Oﬃcer

Mogens Elbrønd Pedersen
Chief Financial Oﬃcer

Holstebro, 24 February 2023

Executive Management

Sanna Mari Suvanto-Harsaae
Chairman

Anders Tormod Skole-Sørensen
Deputy Chairman

Carsten Bjerg
Søren Mygind Eskildsen
Jan Amtoft
Danny Feltmann Espersen

Board of Directors

Independent auditor's report

To the shareholders of TCM Group A/S

Report on the audit of the Financial Statements

In our opinion, the Consolidated Financial Statements and the Parent Company Financial statements give a true and fair view of the Group’s and the Parent Company Financial position at 31 December 2022 as well as of the results of their operations and the cash ﬂows for the period 1 January 2022 – 31 December 2022.

Our opinion

In our opinion, the Consolidated Financial Statements and the Parent Company Financial Statements give a true and fair view of the Group’s and the Parent Company’s ﬁnancial position at 31 December 2022 and of the results of the Group’s and the Parent Company’s operations and cash ﬂows for the ﬁnancial year 1 January to 31 December 2022 in accordance with International Financial Reporting Standards as adopted by the EU and further requirements in the Danish Financial Statements Act.

In our opinion, Management’s Review includes a true and fair account of the development in the operations and ﬁnancial circumstances of the Group and the Parent Company, of the results for the year and of the ﬁnancial position of the Group and the Parent Company as well as a description of the most signiﬁcant risks and elements of uncertainty facing the Group and the Parent Company.

Our opinion is consistent with our Auditor’s Long-form Report to the Audit Committee and the Board of Directors.

In our opinion, the annual report of TCM Group A/S for the ﬁnancial year 1 January to 31 December 2022 with the ﬁle name TCM Group-2022-12-31-en.zip is prepared, in all material respects, in compliance with the ESEF Regulation. We recommend that the Annual Report be adopted at the Annual General Meeting.

What we have audited

The Consolidated Financial Statements and Parent Company Financial Statements of TCM Group A/S for the ﬁnancial year 1 January to 31 December 2022 comprise income statement and statement of comprehensive income, balance sheet, statement of changes in shareholders’ equity, cash ﬂow statement and notes, including summary of signiﬁcant accounting policies for the Group as well as for the Parent Company. Collectively referred to as the “Financial Statements”.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional require- ments applicable in Denmark. Our responsibilities under those standards and requirements are further described in the Auditor’s responsibilities for the audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is suﬃcient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Group in accordance with the International Ethics Standards Board for Accountants’ Inter- national Code of Ethics for Professional Accountants (IESBA Code) and the additional ethical requirements applicable in Denmark. We have also fulﬁlled our other ethical responsibilities in accordance with these requirements and the IESBA Code.

To the best of our knowledge and belief, prohibited non-audit services referred to in Article 5(1) of Regulation (EU) No 537/2014 were not provided.

Appointment

We were ﬁrst appointed auditors of TCM Group A/S on 5 April 2022 for the ﬁnancial year 2022.

TCM Group Annual report 2022
75

Independent auditor’s report (continued)

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most signiﬁcance in our audit of the Financial Statements for 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.

Based on the work we have performed, in our view, Management’s Review is in accordance with the Consolidated Financial Statements and the Parent Company Financial Statements and has been prepared in accordance with the requirements of the Danish Financial Statements Act. We did not identify any material misstatement in Management’s Review.

Key audit matter

How our audit addressed the key audit matter

Impairment test of goodwill and brand

We considered the appropriateness of the accounting policies for assessing the recoverability of the carrying amount of goodwill and brand. Our audit procedures included assessment of the applied impairment model with focus on signiﬁcant assumptions in determination of future cash ﬂow, including growth rates for revenue, proﬁt margins and investment in the budget and forecast periods, as well as discount rate and royalty rate used. We assessed sensitivity analysis performed by management to evaluate the impact of reasonable changes in key assumptions.

At 31 December 2022 the Group’s intangible assets amounts to DKK 555,838 thousand primarily related to goodwill of DKK 369,796 thousand and brand of DKK 171,961 thousand. Impairment tests related to goodwill and brand includes signiﬁcant judgement and estimation by management, including determination of future growth rates for revenue, proﬁt margins and investments in the budget and forecast periods, as well as discount rate and royalty rate. We focused on impairment tests related to goodwill and brand as accounting estimates are complex and associated with subjectivity in the determination of signiﬁcant assumptions and data used. Further, we evaluated the accuracy in managements’ estimates by comparing the budget for 2022 with actual ﬁgures.

Management’s responsibilities for the Financial Statements

Management is responsible for the preparation of consolidated ﬁnancial statements and parent company ﬁnancial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the EU and further requirements in the Danish Financial Statements Act, and for such internal control as Management determines is necessary to enable the preparation of ﬁnancial statements that are free from material misstatement, whether due to fraud or error.

In preparing the Financial Statements, Management is responsible for assessing the Group’s and the Parent Compa- ny’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Management either intends to liquidate the Group or the Parent Company or to cease operations, or has no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Rea- sonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to inﬂuence the economic decisions of users taken on the basis of these Financial Statements.

Translation exposure
The Company does not have any subsidiaries in foreign countries, why there is no translation exposure.

Liquidity risks
Liquidity is controlled centrally with the aim of using available liquidity eﬃciently, at the same time keeping necessary reserves are available. Available liquidity comprised DKK 100 million (DKK 39 million) as of 31 December 2022.

Credit risk
For the Company’s ﬂoating rate cash and cash equiva- lents and debt to banks, an increase in interest rate level of 1% p.a. relative to the actual interest rates would have a negative impact on the proﬁt for the year and on equity at 31 December 2022 of DKK 2.0 million (DKK 1.6 million). The Company does not have any external activities. No material credit risk have been identiﬁed.

Financial exposure
The Group has signed a ﬁnance agreement with Nykredit Bank comprising a committed facility of DKK 300 million. The agreement initially includes a 3 year commitment plus an option to extend the facility with two 1-year extension options on similar terms, of whitch the Group has exercised the ﬁrst 1-year extension.

Assumptions for analysis of interest-rate sensitivity
The stated sensitivities are calculated on the basis of the recognized ﬁnancial assets and liabilities at 31 December 2022. No adjustments have been made for instalments, raising of loans, etc. during the course of the year. The bank loans contain a leverage covenant of 4.0. There has been no breach of any covenant during the period. The interest rates on the bank loans are variable. The computed expected ﬂuctuations are based on the current market situation and expectations for the mar- ket developments in the interest rate level.# Independent auditor’s report

We also assessed the appropriateness of the disclosures related to impairment tests. We refer to note 11 in the consolidated financial statements.

As part of an audit in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

Statement on Management’s Review

Management is responsible for Management’s Review.

Identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the Parent Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management.
Conclude on the appropriateness of Management’s use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s and the Parent Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group or the Parent Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the Financial Statements, including the disclosures, and whether the Financial Statements represent the underlying transactions and events in a manner that gives a true and fair view.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the Consolidated Financial Statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

Our opinion on the Financial Statements does not cover Management’s Review, and we do not express any form of assurance conclusion thereon. In connection with our audit of the Financial Statements, our responsibility is to read Management’s Review and, in doing so, consider whether Management’s Review is materially inconsistent with the Financial Statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. Moreover, we considered whether Management’s Review includes the disclosures required by the Danish Financial Statements Act.

Chairman and CEO’s report

Financial Highlights

Our business

Corporate Governance

ESG

Financial statements

TCM Group Annual report 2022 76

Independent auditor’s report (continued)

For such internal control as Management determines necessary to enable the preparation of an annual report that is compliant with the ESEF Regulation.

Our responsibility is to obtain reasonable assurance on whether the annual report is prepared, in all material respects, in compliance with the ESEF Regulation based on the evidence we have obtained, and to issue a report that includes our opinion. The nature, timing and extent of procedures selected depend on the auditor’s judgement, including the assessment of the risks of material departures from the requirements set out in the ESEF Regulation, whether due to fraud or error. The procedures include:

Testing whether the annual report is prepared in XHTML format;
Obtaining an understanding of the company’s iXBRL tagging process and of internal control over the tagging process;
Evaluating the completeness of the iXBRL tagging of the Consolidated Financial Statements including notes;
Evaluating the appropriateness of the company’s use of iXBRL elements selected from the ESEF taxonomy and the creation of extension elements where no suitable element in the ESEF taxonomy has been identified;
Evaluating the use of anchoring of extension elements to elements in the ESEF taxonomy; and
Reconciling the iXBRL tagged data with the audited Consolidated Financial Statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and, where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter.

Aarhus, 24 February 2023

PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab
CVR no 3377 1231

Claus Lindholm Jacobsen
State Authorised Public Accountant
mne23328

Claus Lyngsø Sørensen
State Authorised Public Accountant
mne34539

Report on compliance with the ESEF Regulation

As part of our audit of the Financial Statements we performed procedures to express an opinion on whether the annual report of TCM Group A/S for the financial year 1 January to 31 December 2022 with the filename TCM Group-2022-12-31-en.zip is prepared, in all material respects, in compliance with the Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) which includes requirements related to the preparation of the annual report in XHTML format and iXBRL tagging of the Consolidated Financial Statements including notes.

Management is responsible for preparing an annual report that complies with the ESEF Regulation. This responsibility includes:

The preparing of the annual report in XHTML format;
The selection and application of appropriate iXBRL tags, including extensions to the ESEF taxonomy and the anchoring thereof to elements in the taxonomy, for all financial information required to be tagged using judgement where necessary;
Ensuring consistency between iXBRL tagged data and the Consolidated Financial Statements presented in human-readable format; and

In our opinion, the annual report of TCM Group A/S for the financial year 1 January to 31 December 2022 with the file name TCM-Group-2022-12-31-en.zip is prepared, in all material respects, in compliance with the ESEF Regulation.

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TCM Group — Annual Report (ESEF) 2022

TCM Group A/S - 2022 Annual Report

Annual report 2022 TCM Group A/S

Our purpose

Front page photo

About TCM Group

02 management report

Chairman and CEO’s report

Letter to our Shareholders

Financial Highlights

TCM Group Annual report 2022

Financial highlights

TCM Group Annual report 2022

Business review

TCM Group Annual report 2022

Financial Highlights

Chairman and CEO’s report

Financial Highlights

Our business

Strategy

Strategy and financial targets

Strategic choices and initiatives in the growth strategy:

Financial outlook 2023

Forward looking statements

Our business

Danish design production sites 2022

Storage solutions e.g. sliding doors

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risk management

Production risks

Market risks

Customer risks

Reputational risks

Financial Highlights

Our business

Corporate governance

ESG

Risks related to IT

Credit risk

Risks related to pollution and occupational health

Currency risks

Financial risks

Liquidity risks

Interest rate risk

Financial statements

Tax-policy

Board of Directors and Executive Management

Board of Directors

Chairman and CEO’s Report

Financial Highlights

Our Business

Corporate Governance

ESG

Financial Statements

Dividend

Analyst Coverage

Contact

Annual General Meeting

Share Information

Responsibility and Sustainability

UN Sustainable Development Goals (SDG)

Highlights 2022

Gender Equality

ESG Strategy & Approach

Human and Labor Rights

Sustainable Work Life

Sickdays and absence

Whistleblower hotline and internal controls

Reported near miss work accidents

Case: Code of Care

Focus on ongoing learning

Gender diversity (# of underrepresented gender)

A talented and diverse workforce

Employee engagement in energy savings

Financial Highlights

Our business

Corporate governance

ESG

Financial statements

TCM Group Annual Report (ESEF) 2022