Management's review
Beskrivelse af virksomhedens væsentligste aktiviteter:Key activities & business model:
The Company's activity is production and sale of glass packaging primarily for the Scandinavian market. The
Company primarily manufactures products for the foods and beverages industry.
Ardagh Glass Holmegård is a European supplier of sustainable, infinitely recyclable glass packaging for the food and beverage industry. Ardagh strives for innovation, quality, and customer service, supported by investments in our employees. We are constantly focused on continuous improvement in all aspects of our business to deliver long-term, sustainable success for our stakeholders. More information at https://www. ardaghgroup. com/.
Insecurity regarding recognition or measurement:
Recognition and measurement in the Annual Report have not been subject to any uncertainty.
Exceptional circumstances:
The financial position on 31 December 2022 of the Company and the results of the activities and cash flows of the Company for the financial year for 2022 have not been affected by any unusual events.
Development in activities and financial matters:
The income statement of the Company for 2022 shows a profit of TDKK 4,481, and on 31 December 2022 the balance sheet of the Company shows a total balance of TDKK 761,501 and equity of TDKK 152,032. The development in Energy prices and general inflation has impacted the costs' structure negatively for the company. Since May 2022 the company have invoiced the customers an extraordinary Energy surcharge, but the higher costs are not fully compensated. Sales in November/December have been very high as customers wanted to avoid price increases Jan 1, 2023, this has resulted in very low Finished goods stock end of 2022.
Post financial year events:
Natural gas prices are down by 50% from peak in December 2022 - but very volatile. If European gas consumption continues with present low level, we don't expect Gas interruption during 2023/24.
Expectations for the future:
Management expects an increased revenue growth due to higher sales prices arising from higher Energy prices and inflation we expect a lower sales volume than 2022. Profit is very much depending on the market situation and inflation development during 2023. The company expects to keep production capacity fully utilized as the finished goods stock is low at the beginning of 2023.
Knowledge resources:
Production of glass containers, primary for the food and beverage industry, are challenging the intellectual capital resources for the employees and the business processes.
Special risks - operating and financial risks:
Operating risks:
In Management's opinion, the Company døs not operate with unusual risks.
Environmental & Climate risks:
Ardagh Glass Holmegård is an energy intensive business and are in top 10 of CO2 emission companies in
Denmark. The present technical possibilities to reduce CO2 footprint is limited as we are dependent on Natural Gas supply. We see a risk that coming CO2 taxes in Denmark will reduce the competitiveness vs other European suppliers. The Company is investigating possibilities for investing in Power to X (Hydrogen
plant), depending on Investment grants from “Erhvervspuljen” and the outcome from a pilot project at our sister company in Sweden in 2023, we expect to be able to install a 5 MW Hydrogen Electrolyzer in 2024. Parallel to this the Company is investigating possibilities for Solar panels & Windmill power on site or via PPA for nearby green energy projects.
We refer to Ardagh Group policy & sustainability report:
https://www. ardaghgroup. com/pdf/sustainability-update-report-2022
Environmental issues:
The Company directs targeted efforts at environmental issues and has obtained environmental certification under ISO 14001. The Company has successfully implemented HACCP and OHSAS certification.
Corporate Social responsibility statement:
We refer to the business model in the first part of Management Review.
Ardagh Group introduced a” Code of Conduct” comprising the following:
Our policy
Our core values
Social responsibility
Personal ethics
Business integrity
Employment
Environment, health, and safety
Our policy:
Ardagh is committed to performing our activities according to the highest standards of integrity and business practice in relation to all contact with employees, customers, suppliers, public authorities, shareholders, bondholders, banks, and the general public.
Our core values:
Trust:
Trust is something we deserve through personal characteristics which show that we are respectful, reliable,
consistent and honest in our approach to others. Trust is based on mutual respect, personal integrity and
transparency.
Cooperation:
To build up a strong business, it is important that employees cooperate in a mutually beneficial way. The individual teams must be aware of the effect of their decisions on various other teams and eventually on the enterprise. Teamwork is based on cooperation, joint responsibility, and open and honest communication.
Excellence:
Excellence is when we endeavor to improve ourselves and the enterprise by constantly focusing on
improvements, innovative thinking, and sustainability.
Social responsibility:
Ardagh has implemented this policy based on ISO 26000:201. The policy comprises the entire enterprise and includes to the extent the Group can enforce or affect the use joint ventures, partnerships, suppliers, enterprises, and other companies in which the Group has a contributing interest.
Management:
Our organizational structure, decision processes, visions, policies, targets, and plans reflect our commitment to social responsibility. We exercise Management commitment in respect of efficient use of economic, natural, and human resources. Our Management and employees create a culture which ensures compliance with principles
concerning social responsibility, such as transparency, ethical behavior, respect for international standards of conduct and respect for human rights.
Ardagh respects the Universal Declaration of Human Rights and commits itself to complying with and supporting the basic principles.
Ardagh expects all employees to actively support these principles.
To be able to identify and address potential human rights issues, Ardagh performs internal evaluations as well as evaluations across the supply chain.
Ardagh respects all individual civil and political rights (e. g., the right to life, freedom of expression, freedom of assembly, freedom to seek, receive and pass on information, the proprietary right, and the right to a fair trial).
Ardagh respects the International Covenant on Economic, Social and Cultural Rights and døs not enter into
activities which violate, prevent or impede the possession of economic, social or cultural rights, such as the right to education, the right to work under just and favorable conditions, freedom of association, the right to adequate health standards, the right to adequate living standards in order to protect physical and mental health and wellbeing, the right to food, clothing, housing and medical treatment, the right to the necessary social protection in case of unemployment, illness, disability, death of spouse, old age or other circumstances outside a person's control, the right to practice one's religion, participate in a certain culture and the right to actually being able to participate in decision processes without any discrimination.
A successful business community is vital to the creation of a wealthy society. It is our policy to:
- contribute positively to wealth and income generation through our business.
- consider local suppliers of products and services.
- support relevant initiatives which stimulate differentiation of existing economic activities in society.
Ardagh supports social investments such as education, training, culture, healthcare, and income generation for the purpose of improving social aspects of groups of people in society.
Ardagh supports public political processes and encourages public policies which benefit society at large.
Ardagh encourages other enterprises to implement suitable standards for social responsibility through their
purchase decisions. It is our policy to support good procedures in respect of ethical, social, and environmental aspects and aspects relating to health and safety as well as equal opportunities in other enterprises.
It is our policy to promote respect for proprietary right and not to participate in any activities which infringe this right, such as forgery and product copying.
Ardagh is aware of its responsibility towards the consumers in connection with our products. We therefore
constantly try to improve the safety of our products. We keep up to date as regards health and safety legislation, provisions and other standards addressing health and safety aspects.
It is our policy not to participate in any kind of procedures which are fraudulent, misleading, or illegal, including omission of critical information. We provide precise and clear information.
Ardagh commits itself to supporting sustainable consumption, and we wish to contribute with providing precise information to the consumers to make sure that there is focus on ethical, social, economic, and environmental factors. We offer consumers socially and environmentally sustainable products and services with due consideration to the complete life cycle of the product to reduce adverse impact on society and the environment.
It is our objective to support initiatives which ensure that consumers are well informed, aware of their rights and responsibility and able to make well considered purchase decisions.
We endeavor to be actively involved in the development of local communities. We involve ourselves in a respectful way in the community and its institutions to reflect and strengthen democratic and popular values.
Education, competence development and culture:
It is our objective to:
- promote education at all levels and participate in activities which improve the quality and possibility of
education, and to promote local insight.
- encourage children's education.
- promote cultural activities, where suitable.
- train and promote human rights awareness.
- consider participation in local and national competence development programs, including apprenticeships.
Information and communication technology is key to human resource development and the use of technology in society. It is our objective to:
- consider contributing to the development of innovative technology which may contribute to solving social and
environmental problems in local communities.
- consider participating in partnerships with organizations such as universities or research laboratories; and
- promote scientific and technological development with partners from the community.
Personal ethics:
Ardagh expects all employees to act in compliance with the highest standards for honesty and ethical behavior at the place of work, outside the place of work where Ardagh conducts its business, at Ardagh's business events and social events and in any other situation in which Ardagh's employees represent Ardagh.
Business integrity:
Compliance with current legislation and statutory regulations
All employees are required to comply with all current rules and regulations. The employees are expected to be aware of the legal provisions and regulations applying to their area of responsibility and are required to perform their work in accordance with such rules and regulations.
Ardagh complies with competition law in all jurisdictions in which we carry on business. The purpose of such legislation is to encourage competition, which benefits consumers in that it prohibits unreasonable restrictions on transactions.
All employees must avoid contributing to any kind of trade restrictions. Ardagh's employees are not allowed, in any circumstances, to communicate business information to competitors that may affect the price, including expenses, credit terms, distribution of markets, geographical condition, customers or product range.
Ardagh is committed to being professional and fair and acting with integrity in all business areas. As part of this commitment to comply with ethical business practice, Ardagh døs not tolerate any kind of bribery or corruption.
Employment:
Ardagh respects, values, and welcomes diversity in our workforce as well as among our customers, suppliers and on our global markets. It is our policy to give equal employment opportunities to all applicants and employees without consideration to race, skin color, religion, gender, nationality, origin, age, disability, civil status, or sexual orientation.
Ardagh has zero tolerance as regards violence. Ardagh commits itself to creating a workplace without any kind of harassment.
Ardagh promotes performance, cooperation, and results through open and honest communication.
Environment, health, and safety, Human rights & Anti-corruption/Bribery:
Ardagh will continue to reduce the Co2 footprint by investments and innovative cooperation with Furnace
suppliers to develop Hybrid Furnaces to decrease use of Natural Gas and increase use of green electricity. Ardagh will continue to increase use of cullets, which will have a positive effect on energy consumption and reduce use of virgin materials.
Ardagh is committed to creating a safe, healthy, and environmentally sound workplace. Ardagh will continue to show environmental responsibility through environmental administration systems, compliance with all relevant environmental regulations and involvement of our stakeholders.
Ardagh will endeavor to prevent accidents, work related injuries and illness at the place of work by offering
suitable training and support to employees, suppliers, contractors, and guests.
Ardagh are committed to focus on Human Rights and plans in 2023 to conduct an employee survey that also addresses this topic.
Ardagh will continue to work together with suppliers and employees to continue the existing good situation on Anti-corruption and Bribery.
Social & Employee relations:
Ardagh Glass Holmegård døs not see risks in Social & Employee relations as this area is on a high level of attention and well monitored.
We refer to Ardagh Group policy: https://www. ardaghgroup. com/pdf/code-of-conduct-en
Human rights:
Ardagh Glass Holmegård operates only one facility in Denmark and follows all Human rights which are normal in the Nordic countries we do not see risks in this area.
We refer to Ardagh Group policy:
https://www. ardaghgroup. com/userfiles/files/media-centre/210629_modern_slavery_act_statement. pdf
Anticorruption & Bribery:
Ardagh Glass Holmegård are not exposed to Anticorruption & bribery as our suppliers are mainly from Nordic & EU and Ardagh Group has a policy on this topic:
https://www. ardaghgroup. com/userfiles/files/media-centre/60881c0d23267. pdf
Implementation of our policies:
We implement our policies by means of acknowledged standards such as ISO 26000:201, ISO 14001 2000, 9001 2000, 50011:2011, HACCP and OHSAS 18001 certification in all relevant areas.
What has been achieved because of our efforts:
Ardagh Group has updated the company's Code of Conduct which has been translated into Danish and handed out to all employees - furthermore, an anonymous Hotline has been established which employees can use if they have concerns about violations of the Code of Conduct.
Carbon dioxide emissions were 50. 083 tons CO2 for 2022, which is 2,5% lower than 2021. The Company have been focused on reduction in CO2 footprint and invested in updated Furnaces & increased cullet usage during many years. Since year 2000 the CO2 emissions have dropped 33%, equivalent with a reduction of 27. 055-ton CO2. Ardagh Glass Holmegård has made an agreement with Energistyrelsen for energy efficiencies for electricity intensive operations.
The Company is very focused on safety in all areas (Production, Traffic Management, etc. ). Ardagh Group has safety high on the agenda, see more at this link https://www. ardaghgroup. com/news-centre/health-and-safety-at-ardagh
During 2022 has the company have registered 8 accidents with no absence (2021: 9) and 2 accidents resulting in absence (2021: 2) - no severe accidents. The Company has invested in improving Traffic Management by separating areas for pedestrians and vehicle traffic. At the end of 2022 the company has a record in worked hours without accidents which proves a continued focus and attention.
Our focus on human rights means that our suppliers are also aware of human rights.
Enforcement of the anti-corruption principle remains an integral part of our supplier management process, and we therefore maintain our focus on ensuring that suppliers recognize and respect their responsibilities when dealing with the company. The employees are instructed not to give or receive unjustified benefits from both Danish and foreign officials or employees in private companies. We do not use bribery and avoid corruption of any kind, and we do not tolerate any form of corruption, extortion, or bribery. All employees, including employees in the purchasing and sales functions, are fully aware of spotting and avoiding corruption, bribery, and money laundering. This work has led to corruption and bribery being non-existent in the company and we have in no way been involved in corruption or bribery cases.
Research and development activities:
The Company has developed new containers in cooperation with its customers. Development expenses are paid as a current operating expense.
Data ethics:
Since 2021, the Data Ethics policy and guidelines have been introduced, cf. ÅRL 99d.
Data Ethics for Ardagh is described in the company's Code of Conduct, which includes processing of data, software use, 3rd party processing of data, internet access and use, storage of data, protection of data etc.
The Company are working with Regional Data ethics groups that are steered by Group Integrity Council there are 4 yearly meetings covering this area with a Data Ethics Checklist and guidelines, and an update from IT on initiatives & tools for handling Data Ethics.
Net profit/loss for the year compared with expected developments in the most recently published annual report:
The company net revenue was 18% higher than sales in 2021, mainly related to Energy surcharge. The operating profit of TDKK 24,841 was better than 2021. The company has shown a positive cash flow from operating activities before interests of TDKK 44,114. The positive result of TDKK 4,481 is at a unsatisfactory level, but the circumstances during 2022 have been very difficult.
Target figures and policies for the underrepresented gender:
In Ardagh we focus on ensuring equal opportunities, especially in relation to the gender composition of
management.
The Management have instructed HR department to ensure that the underrepresented gender will be prioritized highly in the selection process when hiring new employees same instruction is given to hiring consultants and headhunters. During 2022 the company have hired 4 employees in the Administrative area 3 out of 4 new hires was woman.
It is Ardagh's policy to achieve an equitable gender composition in our management (Team leaders and up).
Glass manufacturing industry is male dominated and partly due to shift work, we see a lower number of women who is attracted to this job type. The composition today is divided between 13% women and 87% men. We have therefore set a target of 20-25% of women in management by 2026. Ardagh Glass Holmegård believes in diversity among employees, including an equal distribution between the sexes, contributes positively to the work environment and strengthens the company's performance and competitiveness.
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