Statement by Management on the annual report
Identifikation af den godkendte årsrapport:The Board of Directors and the Executive Board have today discussed and approved the annual report of M2 Animation Group A/S for the financial year 1. januar – 31. december 2023.
Management's review
Beskrivelse af virksomhedens væsentligste aktiviteter:Main ActivitiesM2 Animation Group A/S, a subsidiary under M2 Group A/S, specializes primarily in the development and production of animation within film, series, and animation content. As a global provider of animation to various media such as TV series, films, and Cinemagic trailers, we have established a strong market position. In addition, we have a portfolio of our own formats where we own the intellectual property rights. M2 Animation is an award-winning studio that provides complete service, from concept development to the final product. Economic and Activity Development2023 was a challenging year for M2 Animation Group, both financially and operationally, resulting in a negative outcome. We experienced a slight decline in revenue compared to 2022 and were unable to adjust our capacity accordingly throughout the year. Additionally, we were still dealing with loss-making projects from 2022, which continued to contribute negatively each month. The entire animation industry faced pressure in 2023 due to market saturation from streaming services and strategic shifts, where companies approved fewer but larger animation projects. The implementation of our Mumbai studio has been more demanding than estimated, consuming significant financial and personnel resources, which contributed largely to the negative results. Many animation studios that have based their business on high Western salaries have either gone bankrupt or laid off numerous employees during 2023. We anticipate that 2024 will be a challenging year, during which we will focus on operational efficiency and continuously adjust our expenses to match our order backlog. We expect larger projects to be approved in the third and fourth quarters. Initiatives for Future SucessWe have further strengthened control over our operational activities by appointing an operationally focused profile as CEO of M2 Animation and COO of M2 Group. The initiatives he has launched includeFull transparency in cost managementResource allocation optimizationFinancial governance and ownership across the entire M2 Animation leadership teamDetailed financial processesEnhancement of project marginsAlready at the beginning of 2024, we have observed significant improvements in these areas, and decisions are now being made in a timely manner and based on data, which is a substantial positive shift in the company's management development. Furthermore, we have established an even more structured approach to sales and have hired dedicated sales personnel, which has resulted in an increase in both the quantity and quality of inquiries and dialogues. Innovation and TechnologyWe are an innovative and technologically robust company, and in several areas, we are recognized as first-movers within the industry, which ensures our future success. Therefore, we continue to invest in modern technologies such as real-time pipeline production processes and AI systems. Both current and potential clients acknowledge our expertise in these domains, which opens doors for new projects and serves as the entry point for them when they reach out to us. Specific RisksM2 Animation Group prioritizes effective risk management in a world of constant change. We have implemented tools and processes to identify and mitigate financial risks, including currency fluctuations and cybersecurity threats.
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