Management's review
Beskrivelse af virksomhedens hovedaktivitet:Principal activities of the Company
Silvatec Skovmaskiner A/S' principal activities consist of production and sale of forestry machinery, such as harvesters, forwarders, wood chippers, harvesting heads, as well as after sales services and spareparts.
Mid of 2013 the company increased its research and development efforts with the target to launch a new generation of harvesters and forwarders in 2014, that complies in all features with most modern European standards – foremost the compliance with mandatory European engine standards concerning DIRECTIVE 2006/42/EC (“Stage- IV). The development program has been endorsed on 19. 6.2013 by the pan-European research network “EUREKA” as innovative approach to develop “ECO Forestry Machines”. During 2014, the major development efforts have been completed, so that Silvatec could successfully launch the “Next Generation Harvester – Stage IV” during its 30th anniversary celebration on 6th November 2014. During 2015, the company was optimizing and testing this new machine, as well as developing also a new generation of harvesting head for the new machines.
Daily operations, however, remained tight, so the restrictive governance against cash-inattractive deals and trade-ins of second-hand machines has been kept like in the previous years. Substantial further cost reductions in personnel and other operative costs have been achieved. Moreover, the centralization of operations, including the ramp-down of subsidiaries in UK, Ireland and France has been driven forward.
Losses for the year 2015 changed by 186 % to reach DKK 19,240 thousand in 2015 versus a loss of DKK 6,709 thousand in 2014. While still generating losses, the measures taken were successfully generating cash-flow for ongoing operations in 2015 and putting headcount and stock level to an all-time low.
European markets for Silvatec’s equipment have further declined in 2015 by approx. 15-18%. Russian markets remain closed due to tightened geopolitical restrictions, but the component sale in course of the increasing local production of similar machinery in Russian factories may increase by that.
The company fund cash-wise its entire business operations during 2015 without any bank credit lines, but with support received from the sister company Vogel & Noot. Loans have been reduced from DKK 31,128 thousand (2013) to DKK 24. 338 thousand (2015).
Equity totalled DKK - 17,274 thousand at 31 december 2015 (2014: DKK 4,861 thousand).
Since 29. 4.2016, Machinery & Industrial Group N. V. is directly the 100 % shareholder of Silvatec.
Uncertainty relating to recognition and measurement
The subsidiaries are either dormant or in the process of suspending their payments, and it has not been possible to obtain a sufficient accounting basis for recognition of the investments or receivables. The French subsidiary was in process of liquidation (“liquidation judicaire”). Management believes that Silvatec Skovmaskiner A/S has no obligations or the like vis-a-vis the subsidiaries and that recognition of investments and receivables at DKK 0 thousand is reasonable and adequate.
Unusual circumstances
No unusual circumstances are to be reported.
Particular risks
Silvatec Skovmaskiner A/S is included in a manufacturing group in which Machinery & Industrial Group N. V, the Netherlands is the ultimate parent company. During 2015, Machinery & Industrial Group N. V. was wholly-owned by Vnesheconombank, Russia. However, during Q1/2016, full ownership of Machinery & Industrial Group N. V. has been returned to original shareholders and Vnesheconombank has no shares anymore in the group.
Machinery & Industrial Group N. V. has in recent years incurred considerable negative results. Silvatec Skovmaskiner A/S is in major material respects financed by means of loans from other group companies and thereby materially dependent on continued financing from group companies. It shall be, however, noted that a significant amount of these loans have been reduced during 2014 in course of a know-how trade from the Company to these borrowers.
Business risks
The business risks primarily relate to current assets and are considered limited. As with the current operational cost level and stock of second hand machinery, Management is of the opinion to fund its day-to-day operations even when the market for new machines declines to an unexpectedly low level. As such, the market risk is deemed to be low. As main operations are effected within the European Union, legal and political risks are deemed insignificant.
Financial risks
The financial risks primarily relates to transactions made in Euro for which the risk is deemed low.
Outlook
The emphasis for the year 2015 was continuation of the development of a brand new generation of harvesting head, which has been successfully completed. The Company is, as such, in possession of a cutting-edge product design, competitive under all contemporary European demands. During 2015 the first samples for outsourcing of production of these harvesting heads have been produced in sister company Vogel&Noot Hungary, with the perspective to start mass production in this factory due to lower cost and serial production facilities. Inclusion of Silvatec’s product into the sales portfolio of the company Vogel&Noot increases marketing coverage to a wide area of Europe, which would not be reachable by Silvatec alone.
During 2015, Silvatec Skovmaskiner A/S has formed together with the Austrian company Vogel & Noot Landmaschinen GmbH & Co KG the “European Agri-Forest Group”, joining forces in sales, marketing, sparepart management and, at a second stage, also in production. Vogel & Noot, ultimately a sister company of Silvatec,has with almost 600 employees and a consolidated revenue of approx. 65 million EUR (2014) the scale to bring the new Silvatec products to a market scale, which would be inaccessible for Silvatec alone.
Vogel & Noot, therefore, became the General Reseller for Silvatec products throughout all major companies in Europe. Both companies are jointly managed by one Group CEO, overlooking the interworking and integration of the companies with regards to common market expansion.
At the date of compilation of this report, Vogel & Noot has already commenced reselling Silvatec products. As a particular success, it sold the new Harverster prototype “Sleipner Stage IV” by utilization of Vogel&Noot’s bank finance facilities – which would not have been possible for Silvatec alone. It launched common marketing (such as e. g. joint appearance at Europe’s largest agricultural fair AGRITECHNICA in November), and started a comprehensive competence exchange program.
Moreover, a joint purchase company (MIG Parts & Components GmbH) in Austria will gradually centralize the purchasing for both Vogel&Noot and Silvatec, attempting to reach economies of scale in terms of material pricing and delivery conditions. Silvatec Skovmaskiner A/S is planned during 2016 to become fully integrated into the consolidation holdingcompany of Vogel&Noot, benefitting by that from stronger finance support and the large resource pool of the new “Agri-Forest Group Europe”.
While the Company's going concern status remains tight, Management is of the opinion that, based on forecasted operating budget and cash flow budget, the Company has again sufficient liquidity until the end of 2016 - yet in a worst-case scenario of no new machinery sales, but pure resale of the stock of second-hand machines and services.
The principal assumptions for the operating budget and the cash flow budget are:
Continued conclusion of installment schemes with the Company's creditors
Continued financial support from the parent company; as well as minimal purchase assurances from Vogel & Noot, the new General Reseller for Europe and sister company
Continued stringent spending governance, strong focus on debitor aging reduction, headcount and ongoing optimization in supply chain and indirect spending.
The Company’s ability to remain a going concern is dependent on sufficiently new orders for sale of machinery and components being realized with a positive cash flow on an ongoing basis and establishment of an instalment plan with the public authorities regarding the debt mentioned in note 10. If the Company is not going to be profitable in the foreseeable future the Company’s property and inventories will need to be written down by considerable amounts.
As a consequence of the loss in 2015 the company has lost the share capital. The company expects to be profitable in the future and thereby the share capital will be reestablished.
LoginOpret gratis brugere-conomic integration