Annual report 2016 Short version excluding 2014 figures 1 · Annual report 2016
Contents Management report Business 3 We design to shape light 4 2016 at a glance 5 A year of great progress 6 Key fjgures and ratios 8 Developments in 2016 Corporate 10 Corporate information 13 Danish design and world-class craftsmanship 15 Risk management Governance 17 Statutory report on corporate governance 17 Statutory report on corporate social responsibility 18 Statutory report on the underrepresented gender Financial statements Consolidated 20 Income statement for 2016 20 Balance sheet at 31.12.2016 21 Statement of changes in equity for 2016 22 Cash fmow statement for 2016 22 Notes to consolidated fjnancial statements Parent 26 Income statement for 2016 26 Balance sheet at 31.12.2016 27 Statement of changes in equity for 2016 28 Notes to parent fjnancial statements Accounting policies and statements 30 Accounting policies 36 Statement by Management on the annual report 37 Independent auditor’s report
We design to shape light Louis Poulsen is a Danish lighting manufacturer found- ed in 1874 and born out of the Scandinavian design tradition where form follows function. The function and design of our products are tailored to refmect and support the rhythm of natural light. Since our fjrst collaboration with Poul Henningsen in 1924, his views on the dualities of design and light have infmuenced our light philosophy. Every detail in the design has a purpose. Every design starts and ends with light. We believe in passionate craftsmanship that produces quality lighting and appealing design products. In close partnership with world-class designers, archi- tects and other talents, we have established Louis Pouls- en as one of the key global suppliers of architectural and decorative lighting across the professional and private lighting markets for both indoor and outdoor applica- tions. Louis Poulsen has a global distribution network, 12 subsidiaries and dedicated showrooms in Copenha- gen, Stockholm, Miami, Oslo, Los Angeles, Tokyo and Dusseldorf. Our means are simple and beautiful design. Our purpose is to create an attractive ambience with a positive infmu- ence on people and spaces. We design to shape light. 3 · Annual report 2016
2016 at a glance Exciting news and updated icons Steady growth and strong profitability We launched our new light philosophy – design to shape We continued Louis Poulsen’s steady revenue growth light – and completed a series of successful product and increased profjtability signifjcantly despite sizeable launches across customer segments and geographies investments in sales and marketing as well as new shop- in-shops in 2016. during the year. Our investments in research and development were We saw good results of the efforts in 2016 with prestig- boosted, and we made targeted efforts to improve our ious design awards for Øivind Slaatto’s Patera pendant design and manufacturing process to reduce time-to- and Clara von Zweigbergk – the designer behind the market and enhance effjciency. Cirque pendant. Efforts made in 2016 and previous years paid off, and we At the same time, perspectives for the coming years are initiated further effjciency measures in the areas of inter- promising with a strong product pipeline in place and nal logistics, quality, assembly and painting to continue the acquisition of manufacturing rights for Finn Juhl’s the positive trend. designs. In 2016, our product launches included: Our fjnancial and operational progress included: • Clara von Zweigbergk’s Cirque series inspired by • Revenue growth of 5% to DKK 750 million based Tivoli mainly on record sales in Sweden and Denmark. • The Three Pendant series by Julie Richoz, Christian • A 17% increase in earnings (EBITDA) to DKK 104 Flindt and Øivind Slaatto presented at light+building million corresponding to an EBITDA margin of 14%. in Frankfurt • Establishing 50 new shop-in-shops with a view to • Vilhelm Lauritzen’s VL45 Radiohus pendant and VL38 add another 100 in 2017. table, wall and fmoor lamp • Reducing average time-to-market by 65% in product • The colourful Panthella Mini table lamp development and launch process. • Limited copper versions of the classic PH 3½-2½ fmoor lamp Revenue split 2016 Revenue and profjtability 750 716 13.9 Revenue (DKK’m) Scandinavia (51%) EBITDA margin (%) Rest of Europe (16%) 12.4 Rest of World (33%) 2015 2016 4 · Annual report 2016
A year of great progress 2016 was a year of great progress for Louis Poulsen. Denmark or at trusted partners abroad with hand-picked Building on our company’s legacy, we launched our new components from all around the world. This approach is light philosophy – design to shape light – and a host applied whether we produce a classic Albertslund post, of new exciting products and limited editions of com- upgrade a PH Artichoke with LED components in Den- mended design icons. These efforts were supported by mark or get the complex hand painting work just right on signifjcant organisational and operational improvements a new Cirque pendant in China. as well as strong fjnancial performance. We have been fortunate enough to secure the rights for We continued to grow revenue steadily, while investing acclaimed Danish architect Finn Juhl’s designs, and we signifjcantly in accelerating growth in the coming years. will pass on his legacy with great diligence and care, too. Our organisational setup was streamlined in several mar- Going forward, Louis Poulsen will thus produce the de- kets, and we expanded our sales force and established sign of the fjve iconic Danish designers Poul Henningsen, a new residential shop-in-shop concept with 50 new Arne Jacobsen, Verner Panton, Vilhelm Lauritzen and distribution points added during 2016 – and 100 more to Finn Juhl. come in 2017. We saw good effects of our efforts with record sales across Sweden and Denmark as well as Indeed, the future seems bright for Louis Poulsen with growth in the German market, which has been chal- a solid point of departure for further development of our lenged for years. exciting product range and a positive business outlook for the coming years with favourable market projections While we did spend substantial resources on building a in the high-end segment in mature and growth regions stronger business, we managed to simultaneously boost alike. We will build on our success and win market shares profjtability based on successful strategic initiatives with- by continuing the work to upgrade our distribution point in design, manufacturing and sourcing. We reduced our network for residential sales and strengthen our profes- time to market for new products, allowing us to offer cus- sional sales to retail chains and in the outdoor market in tomers new light fjxtures at a faster pace and optimising particular. the allocation of resources for design and manufacturing with a shorter running-in period. I would like to take the opportunity to thank all of our talented colleagues, designers and business partners for Our work is guided by four values – quality, passion, making our progress possible. To quote Poul Henningsen humanise and ambience – which are all refmected in the – “The future is inevitable, progress is not.” unique products designed in Denmark and manufac- tured by skilled craftspersons either at our own facility in Christian Engsted, CEO of Louis Poulsen 5 · Annual report 2016
Key figures and ratios 2016 2015 DKK’m’ DKK’m’ Financial highlights Key figures Revenue 750 716 Gross profjt/loss 319 281 EBITDA (Earnings before depreciations and amortisation) 104 89 EBITA (Earnings before amortisation) 74 45 Operating profjt/loss 62 33 Net fjnancials (20) (11) Profjt/loss for the year 27 13 Total assets 671 699 Investments in property, plant and equipment 22 12 Equity 278 247 Net working capital 0 26 Cash fmows from (used in) operating activities 99 85 Cash fmows from (used in) investing activities (38) (17) Cash fmows from (used in) fjnancing activities (227) (52) Ratios Gross margin (%) 42.5 39.2 Net margin (%) 3.6 1.8 EBITDA ratio (%) 13.9 12.4 EBITA ratio (%) 9.9 6.3 Return on equity (%) 10.3 5.6 Solvency ratio (%) 41.4 35.3 Financial highlights are defjned and calculated in accordance with “Recommendations & Ratios 2015” issued by the Danish Society of Financial Analysts. Ratios Calculation formula Ratios Gross profjt/loss x 100 Gross margin (%) Revenue The entity’s operating gearing. Profjt/loss for the year x 100 Revenue Net margin (%) The entity’s operating profjtability. EBITDA x 100 Revenue EBITDA ratio (%) The entity’s profjtability before depriciation and amortisation EBITDA x 100 Revenue EBITA ratio (%) The entity’s profjtability before amortisation Profjt/loss for the year x 100 Average equity incl minority Return on equity (%) The entity’s return on capital invested in the entity by the owners. interests Equity x 100 Solvency ratio (%) The fjnancial strength of the entity Total assets 6 · Annual report 2016
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