conditions, with, for example, drought in Argentina prompting the group to explore new markets for its procurement of soy. Weather conditions affect harvest conditions locally and are expected to have some impact on the group’s activities going forward. However, previous annual events and the results for 2023 have shown that the group is well equipped to handle year-on-year fluctuations. MACROPOLITICAL AND ECONOMIC CONDITIONS In 2022, the group decided to cease all commercial activities in Russia and suspend trade with Russia and Belarus. Many of the group’s competitors continue to buy raw materials from Russia, giving them access to cheaper products in some areas, which in some cases affects competitiveness. Still, the group stands by its decision to suspend trade. Wars in the Middle East had no significant impact on the group in 2023, but we are monitoring developments closely, and at the end of 2023 large stocks of critical products shipped through the region were rebuilt to guarantee delivery despite potential logistical delays. While raw material and energy prices normalised in 2023, high inflation and high interest rates had a significant impact on the group’s profit and cash flow compared to previous years. Ongoing cost adjustments were made to accommodate high inflation, and the group also held back on new investments and working capital to contain the effects of interest rate hikes. The higher interest rate level has not led to impairment of the group’s investments. The group’s largest market is Germany, where all three of the group’s business areas are represented. The German economy was in technical recession in 2023 and recorded negative GDP growth for the year as a whole. Consumer purchasing power deteriorated on the back of high inflation and consumption, and the industry is also significantly affected by high interest rate levels globally. Furthermore, there has been uncertainty about the political direction. SLOWDOWN IN GERMAN CONSTRUCTION After a number of years characterised by considerable growth, the German construction sector was hit by a slowdown in 2022, which continued in 2023. Whereas in previous years there was a focus on security of supply, the significant slowdown has led to a significant decline in especially new construction, increased competition in the industry and lower margins. There is a major housing shortage in Germany, which sustained the level of activity in the industry for a relatively long time despite rising material prices and higher interest rates. The current level of new construction activity is significantly below the government target, and measures are expected to be implemented to support the construction sector. At the end of 2023, the sector saw an increase in the number of new orders. In addition to new housing, significant investments are needed in infrastructure and renovation and modernisation projects, including energy renovations, and subsidy schemes and new legislation are still being introduced in this area. This includes the new German Heating Act which aims to replace German gas boilers with green district heating, and the new Buildings Energy Act which sets out requirements for the use of renewable energy in German buildings. ENERGY USD/barrel 200 150 100 50 0 2022 Oil Euro/MWh RAW MATERIALS Euro/tonnes 400 800 300 600 200 400 100 200 0 0 2023 2022 Gas Wheat 2023 Rapeseed CONSTRUCTION Index Jan. 2022=100 120 110 100 90 80 70 2022 2023 New orders in the construction sector, Germany 17 Creating the Future – Strong results – Our customers’ preferred partner – Creating value through sustainable solutions – Success through commitment and leadership – Consolidated financial statements
Download PDF fil
Indholdsfortegnelse