ANNUAL REPORT
2022
CONTENTS
Highlights and key figures
.......................................
4
Letter from the CEO
.................................................
6
This is NORBIT
........................................................
8
Business segments
................................................
12
Oceans
................................................................................
12
Connectivity
........................................................................
16
Product Innovation and Realization (PIR)
...........................
20
Executive management
.........................................
24
Board of directors
.................................................
26
Board of directors’ report
......................................
29
Sustainability report
..............................................
41
Corporate governance report
................................
55
Financial statements
.............................................
64
Consolidated financial statements
.....................................
66
Notes to the consolidated financial statements
.................
70
Financial statements – NORBIT ASA
..................................
99
Notes to the financial statements – NORBIT ASA
..............
102
Statement by the board of directors and CEO
...................
109
Auditor’s report
.................................................................
110
Definitions of alternative performance measures
.............
116
COVERING THE WORLD.
UNCOVERING POSSIBILITIES.
NORBIT is a global provider of tailored
technology to selected applications by solving
challenges through innovative solutions.
NORBIT ANNUAL REPORT 2022
4
HIGHLIGHTS
■
In 2022, NORBIT made solid progress towards its ambition level for 2024, delivering
all-time high revenues of NOK 1.2 billion, representing 48 per cent growth from 2021.
All three business segments contributed to the growth.
■
Profitability continued to improve driven by the strong organic growth and operational
leverage. EBITDA and EBIT margin were 20 per cent and 13 per cent in 2022.
■
The board of directors has decided to propose to the annual general meeting an
ordinary dividend for 2022 of NOK 0.70 per share.
■
During the year, NORBIT raised approximately NOK 350 million in debt capital and
established a non-recourse factoring facility, securing a strong liquidity buffer and a
solid financial platform for continued growth.
■
For 2023, the target is to deliver revenues in excess of NOK 1.4 billion, representing
more than 20 per cent growth from 2022. The target is to improve margins from 2022.
HIGHLIGHTS
NORBIT ANNUAL REPORT 2022
5
HIGHLIGHTS
KEY FIGURES – NORBIT
1)
Amounts in NOK million (except percentages,
EPS and DPS)
2022
2021
2020
2019
2018
Revenues
1 167.5
787.8
618.8
668.2
438.4
EBITDA
235.3
142.6
93.5
149.7
74.8
EBITDA margin
20%
18%
15%
22%
17%
EBIT
148.8
73.5
44.3
102.9
38.0
EBIT margin
13%
9%
7%
15%
9%
Profit for the period
106.7
47.9
27.3
77.3
48.0
Diluted earnings per share (EPS)
1.82
0.83
0.48
1.45
1.11
Dividend declared per share (DPS)
0.70
0.30
0.30
0.60
-
Cash & cash equivalents
41.7
21.7
15.0
21.7
9.1
Equity ratio
49%
51%
65%
74%
34%
Net interest-bearing borrowings
295.6
266.5
79.7
(2.4)
160.9
Cash flow from operations
85.7
47.7
92.1
41.2
15.9
Cash flow from investments
(91.9)
(217.6)
(136.7)
(81.9)
(46.2)
Cash flow from financing
26.2
176.6
37.8
53.3
24.6
R&D investments
60.5
51.2
63.2
59.0
38.2
R&D investments (% revenues)
5%
7%
10%
9%
9%
Net Working Capital
405.3
291.6
196.8
207.3
122.6
Net Working Capital (% LTM revenues)
35%
37%
32%
31%
28%
Average pre-tax return on capital employed
17%
11%
9%
26%
11%
Average number of employees - full-time equivalents
418
311
246
245
176
1) For definitions of alternative performance measures, please see page 116.
0
150
300
450
600
750
900
1 050
1 200
2022
2021
2020
2019
2018
REVENUES
NOK million
668
619
438
788
1 167
0
40
80
120
160
200
240
2022
2021
2020
2019
2018
EBITDA
NOK million
75
150
94
143
235
KEY FIGURES
NORBIT ANNUAL REPORT 2022
6
LETTER FROM THE CEO
SOLVING CHALLENGES AT SCALE
LETTER FROM THE CEO
The scale of global challenges facing us requires technology that can be applied across
industries to make a lasting impact. In 2022, NORBIT’s growth path continued, proving that
we have solutions that contribute where it matters.
Our ability to develop and grow continued to be demonstrated
in 2022. We delivered close to 50 per cent growth in revenues
and improved profitability, driven by strong performance across
all our business segments.
Through almost three decades of developing tailored
technology, we have built a strong company culture. It is
inspired by the great Norwegian polar explorers’ ability to set
audacious goals, prepare for and cope with the unexpected,
and return home with increased knowledge and enhanced
skills. NORBIT´s employees represent a fully equipped team
with profound skills and capabilities, discovering solutions
and introducing new, market driven innovations. At NORBIT,
we believe technology is part of the solution for many major
challenges that lie ahead of us.
FROM NICHE TO NOTABLE
We have a proud legacy of transferring domain knowledge to
tailored solutions that simplify the daily life of our customers,
in line with our vision to be recognized as world class –
enabling people to explore more. We combine applied physics,
electronics design, software development and mechanical
construction to develop solutions with the relevant features
and functionality.
Historically, we have prioritised our innovation strength and
commercial efforts based on a set of criteria. These criteria
include scalability in profitable niches, technology barriers
and competitive landscape. Over the last years, we have
experienced that our growth, in it self, has increased our ability
to take on larger tasks and contribute to society, our employees
and all other stakeholders. We see opportunities within several
of the current megatrends, and we believe we can make a
difference. The ocean space and digital transformation are two
highly relevant examples.
SUPPORTING THE RENEWABLE ENERGY INDUSTRY
AND PROTECTING CRITICAL INFRASTRUCTURE
Through our Oceans segment, we enable customers across
different maritime industries to explore the seabed and monitor
critical infrastructure, supported by a broad product offering
and a global sales and distribution platform.
Ocean intelligence is a major trend within the blue economy, as
only a small fraction of the world’s oceans has been explored.
Autonomous vessels carrying sophisticated sensor suites
allow for a significant step-up in surveying efficiency of the
seabed. During 2022, we have continued to broaden our
product offering by developing new features that open up for
new applications. The i80s variant of our WINGHEAD sonar has
tailored functionality for unmanned vessel operations.
Continued growth in electricity consumption, energy security
and diversification of energy sources leads to increased demand
for offshore wind. On both sides of the Atlantic Ocean there are
ambitious plans towards 2030: The EU, UK and US combined
target 140 GW by 2030, enough to power more than 100 million
homes. Our sonars are widely used for seabed mapping surveys
in the development phase of these projects, and we also see
increased demand for sonars to monitor infrastructure during
operations.
The Nord Stream pipeline explosion last autumn has led
to increased focus on surveillance of critical underwater
infrastructure. In late 2021, we launched GuardPoint, a
surveillance sonar system able to detect and track divers and
submersibles approaching an asset. Our security solutions offer
protection of critical infrastructure, both above and below the
sea surface. Considering the growing geopolitical unrest the
world is facing, we see a significant market potential for our
solutions.
NORBIT ANNUAL REPORT 2022
7
LETTER FROM THE CEO
– As our market verticals grow, we will
stay true to our philosophy of providing
tailored technology.
DIGITALISATION AND DATA PROVISION
Digitalisation of processes in various industries and verticals
is at the core of Connectivity.
For decades, our low-power dedicated short-range communi-
cation (DSRC) technology has enabled efficient identification of
vehicles in toll collection applications and secure enforcement
in satellite-based tolling systems.
Since 2019, a new generation of NORBIT technology, connected
to digital tachographs, has enabled road authorities to do
secure wireless enforcement of driving time and rest period
for heavy-duty vehicles. The European Union has announced its
Mobility Package, a set of regulations applicable for road freight
transport. The aim of these regulations is to improve the social
protection of drivers, reduce CO
2
emissions, and further increase
road safety. With the introduction of the mobility package, all
countries in the EU and UK will have harmonised guidelines for
cabotage activities and haulers working internationally. The
mobility package will gradually lead to increased demand for
tachographs with wireless interface based on DSRC technology;
first by retrofitting old tachographs, and secondly by expanding
the regulation to include vehicles between 2.5 and 3.5 tons.
Going forward, NORBIT’s proud history and experience
within the transportation field are used to enable effective
digitalisation for customers and partners across a wide range
of new sectors. While we still deliver the relevant tailored
technology, sensors, and connectivity, we have expanded our
strategy to also focus on offering subscription-based services
and data, keeping our commitment to deliver innovative
solutions that meet the evolving needs of our customers.
MADE IN EUROPE
The trend of re- and nearshoring increased during the pandemic,
and further accelerated in 2022 as companies increased their
focus on security of delivery. Over the last twelve months, we
have experienced continued growth in contract manufacturing
due to increasing demand from both existing key customers
and new customers. This is a testimonial of the competitiveness
of our in-house manufacturing capabilities and our successful
strategy to invest in a safety stock of components. Access to
components has been critical for our ability to meet demand
and utilise capacity.
STAYING AGILE WHILE EXPANDING
We entered 2022 with a revenue target of NOK 1.0 billion. As
we summarise the year, we report NOK 1.2 billion in revenues
with an EBITDA margin of 20 per cent. We are on-track to reach
our ambition of delivering NOK 1.5 billion in revenues and an
EBITDA margin of 25 per cent in 2024. Since 2010, revenues
have on average grown by 31 per cent annually and we have
improved our profitability, laying the foundation for long-term
value creation.
As our market verticals grow, we will stay true to our philosophy
of providing tailored technology. Our solutions shall be easy to
use for our clients, but challenging for our engineers to develop.
We are committed to remaining agile and dynamic, allowing us
to seize opportunities when they arise.
I would like to express my gratitude to our employees for their
dedication and commitment, as well as our customers, partners,
suppliers, shareholders and all other stakeholders who support
and believe in us. Our constant desire to gain new knowledge
and discover opportunities is a vital part to why we have come
this far. Looking into the future, we are excited about the
opportunities that lie ahead of us. Explore More!
Per Jørgen Weisethaunet
CEO of NORBIT ASA
NORBIT ANNUAL REPORT 2022
8
THIS IS NORBIT
NORBIT is a global provider of tailored technology to selected applications.
We support our customers and partners in solving demanding challenges through
sustainable innovation.
Today we are structured in three business segments to
address our key markets: Oceans, Connectivity and Product
Innovation & Realization (PIR). The Oceans segment delivers
tailored technology solutions to global maritime markets. The
Connectivity segment provides tailored wireless solutions for
identification, monitoring and tracking. The PIR segment offers
R&D services and products, and contract manufacturing to key
customers.
We are
~
450 explorers from 22 different nationalities. We are
headquartered in Trondheim, with R&D and manufacturing in
Norway and Hungary, and a worldwide sales and distribution
platform.
A RICH HISTORY OF INNOVATION AND GROWTH
Since our founding in 1995, we have been at the forefront of
technology development, creating innovative, tailored solutions
that have enabled our customers to solve challenges in a wide
range of industries – from subsea to space.
At the beginning of our journey, activity was primarily
related to development and sales of tailored client and dual
branded products. This was further expanded into contract
manufacturing in 2009 and 2012, respectively, with the
acquisitions of our factories at Røros and Selbu in Norway.
By capitalising on our knowledge base, attracting domain
expertise and expanding internationally, we have over the
last ten years gradually positioned NORBIT as a leading global
technology company with a diversified portfolio of proprietary
products. Today, more than 80 per cent of our revenues come
from exports to more than 60 countries, while the share of
revenues from sale of technology based on our own intellectual
property is close to 70 per cent.
BUILDING ON OUR LEGACY OF INNOVATION TO
DRIVE FUTURE GROWTH
Since 2010, our revenues have increased by 31 per cent per
year on average, mostly organic. At the same time, we have
remained firm to our financial objective of growing profitably.
Looking ahead, we believe that the enablers behind our
continued success will be the same as those that have been
vital to our growth path thus far:
From the very beginning, we have pursued a strategy of
relentless focus on
market driven innovation
in carefully
selected applications. We invest in the development of new
products and solutions when we understand the needs and
expectations of our customers and their domain. In partnership
with our customers, we listen, explore and develop solutions
that allow us to grow together with our partners.
Throughout our history, a key factor for success has been to
diversify our business
model
, thereby reducing dependency
on any one market or product, while also taking advantage of
opportunities for growth and expansion.
Tailoring the growth
strategy
for each business segment has been an intentional
choice.
At NORBIT, we manufacture what we sell.
In-house manu-
facturing capabilities
enable scalability and control of the
value chain and operations, elements that are fundamental to
sustain further growth and remain competitive.
NORBIT’s main asset is our employees.
Attracting and retaining
top talent
enable us to create value for our clients and deliver
when it matters. We give each employee considerable scope in
making decisions regarding their work. This implies a significant
degree of freedom, but also places a substantial responsibility
on our employees.
NORBIT ANNUAL REPORT 2022
9
Offices
Local representation
Associated companies
~
450
EMPLOYEES
22
NATIONALITIES
~
80%
EXPORT SHARE
~
60
EXPORT COUNTRIES
Going forward, we aim to strengthen our position as a leading
global provider of tailored technology for specific applications,
delivering value to our customers by solving challenges through
innovation. At the same time, we shall remain ambitious on
what we can achieve, with the aim of growing our business
significantly in the years to come.
To achieve our ambitions, we will continue to invest in people
and innovation. This includes delivering both organic and
inorganic growth in the business segments, each with its
own strategic priorities and growth pillars. An overarching
goal across our three existing verticals is to introduce new
market driven technology solutions, while maintaining a
diversified product offering that targets multiple industries
and geographies. This, together with our agility and ability to
adapt, make NORBIT robust.
VISION AND VALUES
NORBIT has a strong corporate culture inspired by great
explorers. Reflected in our history, we have stayed committed
to our core purpose, vision and values. Our core purpose to
“Explore More” and vision “To be recognised as world class,
NORBIT ANNUAL REPORT 2022
10
NORBIT ANNUAL REPORT 2022
11
enabling people to explore more” have made us focus on
exploring customer needs and commercial opportunities where
we can bring new tailored technology.
Our core values:
■
We deliver!
■
Safe under pressure
■
Refinement of talents
These values act as important guidelines in our daily
work:
■
We train our colleagues to be able to observe, reflect and
act independently, ensuring that we are on top of the
circumstances rather than ending up as victims of them.
■
We are fully committed to deliver value to our partners.
■
We walk the extra mile to exceed expectations.
■
We are ambitious, and we see opportunities rather than
challenges.
■
We equip our colleagues with the skills and confidence
needed to face the unpredictability that lies ahead of us.
■
Our employees shall be allowed to refine their strengths,
as well as develop and explore other aspects of
themselves.
TECHNOLOGY IS PART OF THE SOLUTION IN A MORE
SUSTAINABLE FUTURE
During 2022, NORBIT has developed a sustainability strategy
based on the double materiality principle; both evaluating our
actual or potential impact on people and the environment, and
the financial impact on our own business. This has resulted in
four overall sustainability topics for us to focus on in the years
to come. The areas are connected to NORBIT’s overall values
and vision.
In addition to investing in existing verticals, we recognise the
importance of exploring new markets where we can leverage
our technology platform to deliver innovative solutions. Our
objective is to explore how we can play a part in solving
sustainability challenges for our customers, partners, and the
society at large.
When developing and delivering our innovative solutions, we
will strive to have sustainability in mind throughout the process
– from the early design to the late production phase.
Our people are our greatest asset and enabler of this. We will
continuously work towards creating an attractive and safe
workplace to bring out the best in our people.
Conducting business ethically has always been and will always
be a priority for NORBIT. We aim for transparency, traceability,
and integrity across our full value chain.
You find more details about our existing efforts and objectives
in our sustainability report on page 41.
Our sustainability focus areas:
Explore more sustainable opportunities
We want to thrust the green transition. We will continuously
explore how we can play a part in solving sustainability
challenges for customers, partners, and the society at large
through our products and solutions.
We will deliver solutions adapted to the
new reality of sustainability
We will deliver products and solutions with sustainability in
mind – in the design, development, and production processes.
Refinement of talents in an attractive
place to work
Our people are our greatest asset. We will continuously work
towards creating an attractive and safe workplace and refining
our talents.
Safe under pressure with ethical
business conduct
We will ensure good governance and legal compliance in all
countries and markets. We aim for transparency, traceability,
and integrity across our value chain.
1
3
2
4
NORBIT ANNUAL REPORT 2022
12
BUSINESS AREAS
The Oceans segment
delivers tailored technology solutions to the global maritime markets. NOR-
BIT’s sonar solutions have been the primary growth driver for the segment over the last few years. The
sonar solutions are based on highly integrated and compact sonars with light detection and ranging
(LIDAR), and a global positioning system (GPS) for surface and subsea imaging and mapping. In addi-
tion, Oceans offers advanced solutions for environmental monitoring, tailored products for the aqua-
culture and security markets, as well as customised cables.
Oceans has a global indirect sales and distribution network
for its sonar business, supported by regional offices covering
a wide range of customers in various industries. The segment
generally has a low revenue visibility of two to four weeks, due
to the short time from receipt of an order to customer delivery.
The segment experiences quarterly fluctuations in revenues
due to seasonal variations, with the second and fourth quarter
generally being the seasonally strongest periods.
SUBSEA
In the subsea domain, Oceans specialises in ultra-compact
wideband multibeam sonars for subsurface navigation and
seabed mapping for inspection. Clients include dredging com-
panies, survey companies, research organisations, rental
companies and governmental institutions, among others. The
technology solutions are based on the latest analogue and
digital signal processing, and the products provide compre-
hensive coverage monitoring combined with high sensitivity
and accuracy.
SECURITY
In a global market with increased geopolitical tension,
Oceans delivers a broad portfolio of security solutions for
detecting threats below the sea surface. This is made possible
by the use of surveillance sonars that are integrated with
proprietary software. The technology can be used for a wide
range of applications, including obstacle avoidance, mine
countermeasures and threat detection from divers or other
moving objects to critical infrastructure at or close to sea.
CONNECT
Oceans delivers customised high-quality cables and electro-
mechanical box builds with a proven track record over the last
25 years.
ENVIROMENTAL MONITORING
As a provider of integrated environmental monitoring
solutions, Oceans delivers sensors, control systems and
surveillance solutions to the maritime sector. The technology
collects and processes data from a wide range of sensors,
providing the customers with a common operational picture
for decision support and operational risk management. This
may include oil spill detection, vessel collision avoidance
and environmental observation of birds and mammals.
Customers use the monitoring solutions within offshore
production and exploration, SAR, ports and harbours. The
technology is also used by civilian and military vessels for
remote sensing, detection and classification.
AQUA
Oceans is a provider of technical solutions, as well as
services to the aquaculture industry. The segment offers
tailored products, including high power underwater lights,
camera systems and acoustic sensors.
MAIN EVENTS 2022
■
In January, Oceans was awarded a NOK 20 million order
from an undisclosed international customer for delivery of
several Guardpoint surveillance sonar systems for security
applications. The systems will be used to protect critical
infrastructure on land, offering 360 degree detection
below the sea surface.
■
In March, Oceans was awarded a NOK 15 million order for
the newly developed WINGHEAD i80s sonar system. The
sonars are used for seabed mapping by integrating the
systems on autonomous low carbon emission vessels.
OCEANS
NORBIT ANNUAL REPORT 2022
13
BUSINESS AREAS
2022
2021
2020
2019
2018
147.6
54.0
64.1
59.6
133.6
EBITDA – OCEANS
NOK million
2022
2021
2020
2019
2018
REVENUES – OCEANS
NOK million
443.0
189.9
249.0
267.2
378.5
2022
2021
2020
REVENUE MIX – OCEANS
NOK million
■
Sonars
■
Security
■
Environmental monitoring
■
Other
205.0
305.8
360.9
48.0
52.7
20.0
14.2
23.2
21.5
37.4
2022
2021
2020
2019
2018
114.4
38.9
50.6
45.6
108.9
EBIT – OCEANS
NOK million
2022
2021
2020
2019
2018
33%
28%
26%
22%
35%
EBITDA MARGIN – OCEANS
Per cent
2022
2021
2020
2019
2018
26%
20%
20%
17%
29%
EBIT MARGIN – OCEANS
Per cent
NORBIT ANNUAL REPORT 2022
14
BUSINESS AREAS
SONAR SURVEY OPERATIONS ON ROV
SECURE DETECTION OF OBJECTS BELOW THE SURFACE
In 2020, NORBIT launched its WINGHEAD sonar platform, a
multibeam echo sounder for high resolution bathymetry. The
WINGHEAD sonar is particularly suited for the professional
market which requires the best possible performance. In
2022, Oceans supported its client in performing a technical
assessment of the MV Schiedyk, a 50-year old shipwreck
off the west coast of Vancouver Island. The shipwreck is
located 106 to 122 meters below the surface. The sonar was
installed on a remotely operated vehicle together with other
survey equipment, including sensors and positioning systems.
Together with acquisition and post-processing software, the
client was able to extract ultra-high-resolution images of the
shipwreck.
Oceans’ portfolio of products includes security and surveillance
solutions to detect and monitor activity both above and below
the sea surface. The GuardPoint Underwater Sonar System is a
surveillance tool used below surface, designed to detect, track,
classify, and alert to the presence of underwater objects in
the toughest environments. In 2022, Oceans was awarded a
milestone contract for delivery of multiple GuardPoint sonars
to a client in the Middle East, where the task at hand was to
provide 360 degree surveillance of an asset considered as
critical infrastructure in the region.
NORBIT ANNUAL REPORT 2022
16
BUSINESS AREAS
The Connectivity segment
empowers customers and partners to solve demanding problems through
tailored monitoring of physical parameters. This is done through data collection and tailored sensor
analysis with connectivity devices, cloud computing and data fusions being directly integrated into the
customer’s business software or as stand-alone services. Connectivity consists of the Intelligent Traffic
Systems (ITS) and Smart Data sub-segments.
INTELLIGENT TRAFFIC SYSTEMS
ITS offers tailored connectivity solutions based on dedicated
short-range communication (DSRC) technology for intelligent
traffic systems and truck applications. Based on this
technology, Connectivity delivers devices and solutions for
several applications, including smart tachographs, On-Board
Units, satellite-based truck tolling and tailored solutions
integrated with GNSS and GSM antennas.
ITS has a leading position as an independent supplier for
dedicated solutions to industrial blue-chip customers within
automotive and satellite-based tolling, as well as to leading
insurance companies. The contracts are generally frame
agreements with medium to long-term visibility.
SMART DATA
The Connectivity segment has several decades of experience
and competence in design and manufacturing of low power
wireless devices in the vehicle identification, monitoring and
reporting domain. Today, this experience is used to enable
effective digitalisation and operations for customers and
partners across a wide range of sectors under the segment
“Smart Data”.
Through the software service provider iData, Connectivity
offers solutions for vehicle monitoring, tailored reporting, fleet
management and fuel control. With its iTrack GPS tracking
system, iData’s solutions are used by more than 4 800
companies in around 40 000 vehicles. iData also offers e-toll
payment solutions that are used in more than 10 000 vehicles.
iData predominately operates in Hungary, where it has a
strong market position. More than 85 per cent of the revenues
generated are recurring, either through subscriptions, rental
or e-toll payment.
MAIN EVENTS 2022
■
In February, Connectivity received an order for NOK 25
million from a European customer to deliver On-Board
Units, and received a NOK 30 million order from Toll
Collect for delivery of satellite-based toll collection.
■
In the same month, Connectivity also received a NOK
15 million order from a French customer for delivery of
On-Board Units.
CONNECTIVITY
NORBIT ANNUAL REPORT 2022
17
BUSINESS AREAS
2022
2021
2020
2019
2018
77.4
9.6
83.1
42.5
23.8
EBITDA – CONNECTIVITY
NOK million
2022
2021
2020
2019
2018
308.0
39.5
186.3
145.1
146.3
EBIT – CONNECTIVITY
NOK million
2022
2021
2020
REVENUE MIX – CONNECTIVITY
NOK million
■
On-Board Units
■
Enforcement modules
■
Satelitte-based tolling
■
Subscription and e-toll
■
Other
60.3
135.6
51.5
24.4
53.2
33.8
22.5
33.2
7.3
5.3
36.5
11.2
77.0
47.7
2022
2021
2020
2019
2018
40.5
3.6
69.9
27.7
0.9
EBIT – CONNECTIVITY
NOK million
2022
2021
2020
2019
2018
25%
24%
45%
29%
16%
EBITDA MARGIN – CONNECTIVITY
Per cent
2022
2021
2020
2019
2018
13%
9%
38%
19%
1%
EBIT MARGIN – CONNECTIVITY
Per cent
NORBIT ANNUAL REPORT 2022
18
BUSINESS AREAS
PARTNERSHIPS WITH THE INSURANCE INDUSTRY
MONITORING AND FLEET MANAGEMENT SERVICES
Connectivity has been a leading provider of DSRC On-Board
Units for close to 20 years. The units are installed on the
vehicle windshield, allowing electronic payment of road
tolls and related services. In the past, the customers for this
product were primarily large state-owned toll service providers
tendering for such units. In recent years, private insurance
companies have positioned themselves as tolling providers
in certain European countries. Connectivity has successfully
entered into several partnerships with selected insurance
companies in the European market to provide On-Board Units,
as well as being a technology partner for continuous innovation
on related products and services.
NORBIT has decades of experience in developing telematics
devices and services, specialising in vehicle monitoring and
fleet management. The proprietary iTrack GPS tracking system
offers smart solutions for real-time monitoring of assets. A
unique feature is the customisation process and technology
that allows even a pre-sales team to customise reports and
implement features – in hours instead of months. Other strong
solutions include the NaviTrack service, which solves complex
challenges for transport organisers. Additionally, NORBIT offers
a fuel tank probe which, after installation calibration, reaches
more than 99 per cent volume accuracy.
NORBIT ANNUAL REPORT 2022
20
BUSINESS AREAS
The Product Innovation & Realization (PIR)
segment offers Research and Development (R&D)
products and services, alongside contract manufacturing services, to long-term and key industrial
customers. With both manufacturing and R&D as in-house capabilities, NORBIT has a setup that allows
for the creation of new technologies and solutions in parallel with production process innovation,
enabling efficient and optimised realisations of new products. The PIR segment mainly has long-term
relations to selected key customers, both for contract manufacturing and for sale of products based on
proprietary technology.
R&D SERVICES
NORBIT has more than 25 years of experience with R&D and
technology innovations. NORBIT engineers have created a
broad range of tailored solutions for many market domains.
In the PIR segment, vast industrial R&D experience is available
and offered to external clients, as well as the Oceans and
Connectivity segments. In addition, special R&D projects for
professional clients in different market domains bring together
challenges needed to refine and grow new generations of
NORBIT engineers. This provides NORBIT with access to new
valuable domain knowledge for the future.
The segment has also developed a range of customised
products based on NORBIT Intellectual Property throughout
the years. These are sold to long-term key customers under
either the customer’s brand or dual branding.
CONTRACT MANUFACTURING
For decades, NORBIT has provided contract manufacturing
of electronics for external customers. With focus on highly
robotised, world-class manufacturing processes, PIR supplies
electronic products to demanding markets such as the
automotive, medical, security, energy, marine and ocean-
related industries.
Contract manufacturing for external customers gives NORBIT
a continued benchmark of the company’s manufacturing
capabilities, securing leading-edge processes and routines for
the entire group.
MAIN EVENTS 2022
■
In February, PIR entered into a frame agreement with
a European industrial client for delivery of electronic
modules for electromobility charging products. The
agreement has a value of NOK 120 million over a four-year
period.
PIR
NORBIT ANNUAL REPORT 2022
21
BUSINESS AREAS
2022
2021
2020
2019
2018
47.8
20.0
22.6
2.3
16.4
EBITDA – PIR
NOK million
2022
2021
2020
2019
2018
456.5
221.1
259.9
224.6
291.0
REVENUES – PIR
NOK million
2022
2021
2020
REVENUE MIX – PIR
NOK million
■
Contract manufacturing
■
R&D
■
Customer reimbursements
■
Other
154.9
180.6
256.2
46.5
39.0
71.4
23.2
93.6
106.7
2022
2021
2020
2019
2018
34.0
6.3
4.4
(14.9)
(3.8)
EBIT – PIR
NOK million
2022
2021
2020
2019
2018
10%
9%
9%
1%
6%
EBITDA MARGIN – PIR
Per cent
2022
2021
2020
2019
2018
7%
3%
2%
(7%)
(1%)
EBIT MARGIN – PIR
Per cent
NORBIT ANNUAL REPORT 2022
22
BUSINESS AREAS
SUPPORTING THE ELECTRIFICATION TREND
CONTRIBUTING TO AVIATION SAFETY
From the factory at Røros in Norway, NORBIT has for decades
been a manufacturer of electronics to top-tier suppliers in the
automotive industry. The high-volume manufacturing site is
one of very few automotive certified electronic manufacturing
plants in the Nordic region. NORBIT is benefiting from a global
electrification trend, particularly witnessed in the automotive
industry by the growth rate and adoption of electric cars,
and the development of the heavy-duty electric market and
related infrastructure and services. In 2022, NORBIT entered
into a NOK 120 million frame agreement with a European Tier 1
supplier for delivery of electronic modules for electromobility
charging products, illustrating that NORBIT´s segment Product
Innovation & Realization is well positioned for the electrification
megatrend.
For close to 30 years, NORBIT has contributed to bringing
passengers safely to the ground when flying. In 1995, NORBIT
developed the first high performance navigation receivers for
use in navigation system measuring instruments. A decade
later, NORBIT developed its first complete NAV Analyzer. The
NAV Analyzer is used to measure critical parameters of the
Instrument Landing System and VOR ground system, providing
high accuracy and measurement speed for ground and flight
inspection. The NAV Analyzer is a portable, battery-operated
weatherproof unit to be used both indoors and outdoors. Today,
NORBIT provides the complete product to its client Indra Navia
together with integrity monitoring solutions, in accordance with
the latest aviation requirements.
Per Jørgen Weisethaunet
Chief executive officer (CEO)
Per Jørgen Weisethaunet has been
the group’s CEO since 2001 and
co-owner of NORBIT since 2008. He
has several years of experience as an
R&D project engineer, and has worked
with various electronics designs across
several positions. Per Jørgen also
previously worked as an operations
manager in Cargoscan Metler Toledo.
Weisethaunet has been chair and
director of several executive boards.
He holds a Master of Science degree
in RF & Microwave electronics from the
Norwegian University of Technology
(NTNU), a Bachelor of Science in
electronics from Trondheim University
of Engineering (TIH), business
economics from Trondheim Economic
University center of competence
(TØHK) and supply chain management
from BI Norwegian Business School.
Number of NORBIT shares* at
29 March 2023: 7 007 893
Per Kristian Reppe
Chief financial officer (CFO)
Per Kristian Reppe has been the
group’s CFO since July 2020.
Before joining NORBIT, Reppe held
various senior positions in the Aker
group, including CFO of Abelee and
investment manager and head of
investor relations at Aker ASA. Prior
to that, he worked as a management
consultant at Arkwright and as an
equity analyst at Pareto Securities.
Reppe holds a Master of Science
degree from the Norwegian School
of Economics (NHH) with a major in
financial economics.
Number of NORBIT shares* at
29 March 2023: 53 955
Arild Søraunet
Chief technical officer (CTO)
Arild Søraunet has been the group’s
CTO since 2018. Søraunet was
previously the business manager of
the R&D Services part of the business
segment PIR, formerly known as
ODM. Before that, he was the CEO of
NORBIT Subsea AS from 2011 to 2016,
and project manager of NORBIT ODM
from 2002 to 2011. Arild has additional
development engineer experience
from Cavotec Micro-Control AS
between 2000 to 2002 and Kongsberg
Defence & Aerospace AS from 1997
to 2000. Søraunet holds a Master of
Science in applied physics from the
University of Tromsø and a Bachelor of
Science in electronics from Levanger
College of Engineering.
Number of NORBIT shares* at
29 March 2023: 725 823
NORBIT ANNUAL REPORT 2022
24
EXECUTIVE MANAGEMENT
EXECUTIVE MANAGEMENT
Stein Martin Beyer
Chief operating officer (COO) and
business unit director PIR
Stein Martin Beyer has been the
group’s COO and business unit director
of PIR since 2012. Beyer has 36
years of experience within industrial
management and leadership, including
ten years in NORBIT and ten years as
CEO of Servi Cylinderservice AS. Beyer
holds a Master of Science in material
technology from the Norwegian
University of Technology (NTNU) and
a business economics degree from BI
Norwegian Business School.
Number of NORBIT shares* at
29 March 2023: 308 716
Peter Koldgaard Eriksen
Business unit director Oceans
Peter Koldgaard Eriksen has been
the group’s business unit director
of Oceans since 2016. Koldgaard
Eriksen has ten years of experience
in NORBIT Subsea AS, seven years in
RESON Inc and Goleta California as
CEO, EVP, group CTO, and business
development. He also has 11 years of
experience in RESON AS Slangerup
Denmark as an R&D engineer and R&D
manager. During his time at RESON
AS, he worked as CTO and production
manager and was part of the global
management team.
Koldgaard Eriksen holds a Master of
Science in active vibration control from
Aalborg University Center, as well as
various educations from MBA Kellogg
Chicago US, HKUST Hong Kong and
Vallendar Germany.
Number of NORBIT shares* at
29 March 2023: 786 539
Julie Dahl Benum
Director of Strategy and ESG
Julie Dahl Benum joined NORBIT
in December 2022 as director of
strategy and ESG. Prior to joining
NORBIT, Benum held the position of
senior manager and head of strategy
in Karabin Impello AS. She also has
experience as project manager at
NTNU Technology Transfer AS and
as management consultant at BCG.
Benum holds an MSc degree in
industrial economics and technology
management from the Norwegian
University of Science and Technology
(NTNU).
Number of NORBIT shares* at
29 March 2023: 0
*
Number of shares includes shares held
by related parties.
NORBIT ANNUAL REPORT 2022
25
EXECUTIVE MANAGEMENT
Finn Haugan (1953)
Chair
Finn Haugan was the CEO of the listed
company Sparebank 1 SMN from 1991
to 2019. Haugan has experience from
several board positions, including chair
of Sparebank 1 Gruppen, the industry
organisation Finance Norway, and Nor-
wegian Bank’s Guarantee Fund. He cur-
rently serves as chair of Sparebank 1 Sør
Øst Norge (listed company), Sinkaberg
Hansen AS,
Borg Forvaltning AS, Elekt
AS, Solon Eiendom AS, deputy chair of
LL Holding AS, and is a director of OKEA
ASA. Chair of Norbit ASA since May 2019
and re-elected on 4 May 2022 for a
period of two years. Chair of the remu-
neration committee.
Haugan attended 13 board meetings in
2023 (100 per cent attendance rate).
Number of NORBIT shares* at
29 March 2023: 93 998
Bente Avnung Landsnes (1957)
Deputy chair
Bente Avnung Landsnes served as the
CEO and president of Oslo Børs ASA and
Oslo Børs VPS Holding ASA from 2006
to 2019.
Landsnes started her career at
Bankenes Betalingssentral and was the CEO
of Bankenes Utredningsselskap and senior
vice president at Bankenes Betalingssentral
before joining Sparebanken NOR in 1996.
From 2000 to 2003, Landsnes held the
position of group executive vice president
in Gjensidige NOR Sparebank. She was
the group executive vice president at DNB
NOR (IT and operations) from 2003 to 2006.
Landsnes has experience with change and
reputation management, financial reporting,
investor relations, corporate governance,
ESG and digital transformation, amongst
others. Since 2019, she has worked as a
non-executive director, mentor and advisor.
Deputy chair since May 2019 and re-elected
on 4 May 2021 for a period of two years.
Member of the audit committee and the
remuneration committee.
Landsnes attended 13 board meetings in
2022 (100 per cent attendance rate).
Number of NORBIT shares* at
29 March 2023: 69 473
NORBIT ANNUAL REPORT 2022
26
BOARD OF DIRECTORS
BOARD OF DIRECTORS
According to NORBIT’s articles
of association, the board
of directors shall consist of
a minimum of three and a
maximum of seven directors
elected by the general meeting.
The general meeting elects the
chair and deputy chair of the
board. At 31 December 2022,
NORBIT’s board of directors
comprised five members. Three
of the directors were first elected
in May 2019, while two were
elected at the general meeting
4 May 2022.
NORBIT’s board is composed
to be able to act independently
of any special interests. All
directors are deemed to be
independent of senior executives,
material business associates
and the company’s largest
shareholders.
Christina Hallin (1960)
Director
Christina Hallin is currently the CEO of
SEM AB. Hallin previously held various
executive positions within Volvo Group,
both internationally and in Sweden.
Hallin is a director in Alimak AB,
Bulten AB, SensysGatso AB and SEM
AB. Hallin holds a Master of Science
degree in engineering from Chalmers
University of Technology. Director
since 4 May 2022 and elected for a
period of two years.
Hallin attended eight board meetings
in 2022 (100 per cent attendance rate).
Number of NORBIT shares* at
29 March 2023: 0
Trond Tuvstein (1972)
Director
Trond Tuvstein is currently the CEO of
Trym, a real estate and construction
company. In addition, Tuvstein holds
the position as director in Norges
Sjømatråd AS and Måsøval Eiendom
AS. Before Trym, Tuvstein was the
CFO of SalMar ASA in the period
2013 to 2019. Prior to that, he spent
two years as the company’s Head
of Investor Relations. In addition, he
has extensive accounting experience,
having worked in partner positions in
audit firms, PricewaterhouseCoopers
(PWC) and Systemrevisjon. Tuvstein’s
core competencies include financial
reporting, strategy and financing, as
well as mergers and acquisitions.
Director since May 2019 and
re-elected on 4 May 2021 for a period
of two years. Chair of the audit
committee.
Tuvstein attended 13 board meetings in
2022 (100 per cent attendance rate).
Number of NORBIT shares* at
29 March 2023: 32 894
Magnus Reitan (1975)
Director
Magnus Reitan is currently the
CEO of Reitan Kapital AS, the asset
management arm of Reitangruppen,
responsible for managing excess
liquidity for Reitan AS. Reitan has
held various executive positions
within Reitangruppen, both in Norway
and internationally. Reitan is also
a director of Reitan AS and Reitan
Convenience AS. Reitan is educated at
the Norwegian School of Economics
and the Norwegian Business School.
Director since 4 May 2022 and elected
for a period of two years. Member of
the remuneration committee.
Reitan attended eight board meetings
in 2022 (100 per cent attendance rate).
Number of NORBIT shares* at
29 March 2023: 5 829 083
*
Number of shares includes shares held
by related parties.
NORBIT ANNUAL REPORT 2022
27
BOARD OF DIRECTORS
NORBIT ANNUAL REPORT 2022
29
BOARD OF DIRECTORS’ REPORT
NORBIT ASA continued on its positive trajectory in 2022, delivering all-time high revenues of NOK 1.2
billion and growing 48 per cent from 2021, supported by all three business segments. While inflation
remained elevated throughout the year and component prices increased in a challenging supply
market, NORBIT was able to improve profitability and increasing the EBITDA margin to 20 per cent. In
2023, NORBIT is expected to further close the gap to its ambition level for 2024, targeting revenues in
excess of NOK 1.4 billion and margin improvement. In addition, NORBIT is continuing to pursue value-
accretive acquisitions to accelerate further growth. Based on the group's strong financial position and
positive long-term market outlook, the board proposes a dividend of NOK 0.70 per share for the fiscal
year 2022.
OVERVIEW OF THE BUSINESS
The board of directors’ report for the NORBIT group (“NORBIT”
or “the group”) comprises NORBIT ASA (“the parent company”)
and all subsidiaries. The parent company, NORBIT ASA, is a
Norwegian public limited liability company.
Business and location
Norway, with R&D and manufacturing in Norway and Hungary.
NORBIT has a global sales and distribution platform with
subsidiaries in Sweden, Denmark, Poland, Austria, Hungary,
Czech Republic, Slovakia, Croatia, Italy, Singapore, Brazil, China,
the UK and the US. NORBIT also has ownership interests in
two companies located in Germany and Iceland, reported as
associated companies.
NORBIT is organised in three business units: Oceans, Connectivity
and Product Innovation and Realization (PIR). Oceans delivers
tailored technology solutions to the global maritime markets and
the Connectivity segment provides tailored wireless solutions
for identification, monitoring and tracking. PIR offers R&D
services and products and contract manufacturing.
Through its three business segments, NORBIT has a diversified
business model where the segments are exposed to different
market drivers, customer bases and risks. The group’s diversified
offering across its segments makes NORBIT well positioned to
meet various market scenarios.
A further description of each business unit is presented under
the section “Business segments”.
Financial ambitions and strategic platform
NORBIT has set out an ambition to deliver organic revenues of
NOK 1.5 billion and an EBITDA margin above 25 per cent in 2024.
In 2023, NORBIT targets revenues to exceed NOK 1.4 billion and
profitability to improve versus 2022.
In addition to the set organic ambition level, NORBIT will continue
to explore value- accretive acquisitions through defined criteria
to accelerate further growth, although remaining disciplined.
NORBIT has a strategy for continued profitable growth through
investing in innovation. The strategic platform and priorities for
each segment are described in more detail below.
BOARD OF DIRECTORS’ REPORT FOR 2022
ADVANCING AT HIGH SPEED
Target
2024
Revenue
2022
Target
2024
EBITDA
2022
OCEANS
Revenues
NOK million
EBITDA
Per cent
443
700
33%
>35%
Target
2024
Revenue
2022
Target
2024
EBITDA
2022
CONNECTIVITY
Revenues
NOK million
EBITDA
Per cent
308
350
25%
>35%
Target
2024
Revenue
2022
Target
2024
EBITDA
2022
PIR
Revenues
NOK million
EBITDA
Per cent
349.8
106.7
450
10%
8–10%
■
Customer reimbursements
NORBIT ANNUAL REPORT 2022
30
BOARD OF DIRECTORS’ REPORT
Oceans
For segment Oceans, strategic priorities remain on broadening
the product portfolio and expanding into new geographies and
adjacent markets, capitalising on a global sales and distribution
platform. Market-driven innovation is a cornerstone of the growth
strategy. The successful launches of the WINGHEAD sonar family
and the Guardpoint surveillance sonar for subsurface detection
of objects and threats are two examples of such innovation,
where both are expected to contribute to continued growth.
Oceans has set out an ambition to deliver organic revenues
of NOK 700 million and an EBITDA margin in excess of 35 per
cent in 2024. In 2022, Oceans delivered NOK 443.0 million in
revenues and an EBITDA margin of 33 per cent.
Connectivity
The main objective for the Connectivity segment is to deliver
customer value in applications where there is a need for
tailored monitoring of physical parameters. This is done through
delivering relevant technology, sensors and connectivity, in
addition to value added components, such as services and data.
One strategic priority for Connectivity is to grow the connected
solutions portfolio, complementing NORBIT’s strong position in
the dedicated short-range communication domain. The ambition
is to increase the share of recurring revenue, income generated
from subscription-based business models. Connectivity will also
invest in innovation by developing new products and solutions,
capitalising on its capabilities within software and low power
wireless devices for asset tracking, identification and monitoring.
Connectivity has the ambition to deliver revenues of NOK 350
million in 2024, with an EBITDA margin in excess of 35 per cent.
In 2022, Connectivity delivered NOK 308.0 million in revenues
and an EBITDA margin of 25 per cent.
PIR
Benefiting from the investments made in increasing the
manufacturing capacity, the strategic objective in PIR remains
to organically grow the segment. PIR is experiencing increasing
demand, both supported by a general electrification trend and
an increasing preference among new clients for manufacturing
products in geographical proximity to their operations. By having
in-house R&D and manufacturing capabilities, PIR can offer a
strong value proposition, supporting clients from prototype
development to full scale production.
PIR has the ambition to deliver revenues of NOK 450 million in
2024, with in EBITDA margin between 8 and 10 per cent. In 2022,
PIR reported NOK 456.5 million in revenues, of which NOK 106.7
NORBIT ANNUAL REPORT 2022
31
BOARD OF DIRECTORS’ REPORT
million was customer reimbursements for extraordinary material
costs. The EBITDA margin was 10 per cent.
FINANCIAL REVIEW
All amounts in brackets are comparative figures for 2021 unless
otherwise specifically stated.
The following financial review is based on the consolidated
financial statements of NORBIT ASA and its subsidiaries.
The statements have been prepared in accordance with the
International Financial Reporting Standards (IFRS).
In the view of the board, the income statement, the statements
of comprehensive income, changes in equity and cash flow, the
balance sheet and the accompanying notes provide satisfactory
information about the operations, financial results and position
of the group and the parent company at 31 December 2022.
Pursuant to section 3-3a of the Norwegian Accounting Act, it
is confirmed that the accounts have been prepared based on
the assumption that NORBIT is a going concern, and the board
confirms that this assumption continues to apply.
Consolidated statement of income
Total operating revenues for 2022 amounted to NOK 1 167.5
million (NOK 787.8 million), corresponding to an increase of 48
per cent from the year before. Segment Oceans achieved an
increase in revenues of 17 per cent, driven by higher sonar sales
across multiple geographies. Revenue growth was strongest
in segment Connectivity, reporting an increase of 111 per cent,
primarily supported by strong demand for DSRC technology, in
particular for On-Board Units. Segment PIR reported revenue
growth of 57 per cent. The increase from 2021 was attributable
to higher sales of contract manufacturing and R&D products and
services , as well as customer reimbursements for extraordinary
material costs.
Raw material expenses and change in inventory were NOK 549.5
million (NOK 363.3 million). The increase from the prior year
reflects the higher activity level. Gross margin was 53 per cent
in 2022 (54 per cent).
Employee benefit expenses amounted to NOK 250.2 million
(NOK 187.7 million). The increase is primarily explained by a
general strengthening of the organisation to support further
growth, strategic initiatives, as well as wage inflation.
Other operating expenses were NOK 132.4 million (NOK 95.5
million). The full-year effect of the iData acquisition represented
NOK 15.9 million of the increase from 2021.
Operating profit before depreciation and amortisation
(EBITDA) amounted to NOK 235.3 million (NOK 142.6 million),
corresponding to an EBITDA margin of 20 per cent (18 per cent).
Depreciation and amortisation were NOK 86.5 million (NOK
69.0 million), with the increase explained by amortisation on
completed R&D investments, depreciation of investments made
during 2022, as well as full-year effect of the iData acquisition,
including amortisation of excess values in relation to the
transaction.
Operating profit for 2022 was NOK 148.8 million (NOK 73.5
million) corresponding to a margin of 13 per cent (9 per cent).
Net financial items amounted to negative NOK 28.0 million for
the full year (negative NOK 9.8 million), mainly explained by
an increase in interest expenses and foreign exchange losses.
NORBIT recorded a profit before taxes of NOK 120.8 million (NOK
63.7 million). Tax expenses amounted to NOK 14.1 million for
2022 (NOK 15.9 million).
Consequently, profit for 2022 ended at NOK 106.7 million (NOK
47.9 million) and diluted earnings per share was NOK 1.82 (NOK
0.83).
Consolidated statement of financial position
NORBIT had total assets of NOK 1 220.8 million at 31 December
2022, an increase from NOK 976.9 million at the end of 2021.
Total non-current assets amounted to NOK 547.8 million at 31
December 2022, up from NOK 503.8 million the year before, of
which the largest items include intangible assets and property,
plant and equipment.
Intangible assets rose to NOK 258.8 million (NOK 242.3
million) primarily due to investments in R&D, partly offset by
amortisation. Total investments in R&D during 2022 amounted
to NOK 60.5 million (NOK 51.2 million), corresponding to 5.2 per
cent of revenues for 2022 (6.5 per cent).
Property, plant and equipment increased to NOK 187.7 million
(NOK 164.9 million), mainly explained by NOK 31.5 million
NORBIT ANNUAL REPORT 2022
32
BOARD OF DIRECTORS’ REPORT
investments and additions of NOK 30.4 million in right-of-use
assets, partly offset by depreciations of NOK 41.7 million.
Total current assets amounted to NOK 673.0 million, up from
NOK 473.2 million at 31 December 2021.
At 31 December 2022, inventories amounted to NOK 426.3
million, compared to NOK 263.2 million at the end of 2021.
The increase in the inventory level is primarily related to the
activity increase and NORBIT securing components to safeguard
deliveries due to a challenging market for supply of electronic
components.
Trade receivables were NOK 168.0 million at 31 December 2022,
up from NOK 154.9 million at the end of 2021, mainly explained
by an increase in revenues when comparing fourth quarter 2022
with the corresponding period of 2021. During 2022, NORBIT
entered into a non-recourse factoring facility in order to sell
invoices with long credit period. At the end of the fourth quarter,
this had a positive liquidity impact of approximately NOK 80
million.
Cash and cash equivalents amounted to NOK 41.7 million at 31
December 2022, up from NOK 21.7 million at the end of 2021.
Total liabilities were NOK 621.5 million at year-end 2022, up from
NOK 479.1 million at 31 December 2021, of which the largest
items include interest-bearing borrowings and trade payables.
Total equity ended at NOK 599.3 million, up from NOK 497.9
million at 31 December 2021. This represents an equity ratio
of 49 per cent (51 per cent). The increase is mainly explained
by NOK 106.7 million in profit for the period, and share issues
of NOK 11.2 million in connection with incentive programs to
employees, partly offset by NOK 17.5 million in dividends paid.
Consolidated statement of cash flows
Operating activities generated a cash flow of NOK 85.7 million
for 2022 (NOK 47.7 million), including a net increase in working
capital of NOK 110.9 million (increase of NOK 83.7 million). The
increase is mainly driven by an increase in inventories.
Cash flow used for investment activities was NOK 91.9 million
for the year (NOK 217.6 million). The investments mainly
consist of NOK 3.1 million related to the acquisitions of Aursund
Maskinering and Nicarnica Aviation, NOK 60.5 million in R&D
investments and NOK 31.5 million investments in property, plant
and equipment.
Financing activities generated a cash inflow of NOK 26.2 million
(NOK 176.6 million), primarily explained by an increase in net
interest-bearing borrowings of NOK 44.7 million and proceeds
from equity issues of NOK 9.6 million, partly offset by dividends
paid of NOK 17.5 million, or NOK 0.30 per share.
Financing and capital structure
At the end of 2022, NORBIT had NOK 337.4 million in interest-
bearing borrowings (NOK 288.2 million) and NOK 295.6 million
(266.5 million) when adjusting for cash and cash equivalents.
NORBIT had NOK 439.4 million in undrawn committed credit
facilities at 31 December 2022.
During the year, NORBIT refinanced its multicurrency overdraft
facility, increasing the credit limit to NOK 350 million from
previously NOK 130 million. NORBIT also established a new
NOK 120 million term loan. In total, this strengthened liquidity
with NOK 340 million during 2022. In addition, NORBIT entered
into a NOK 110 million non-recourse factoring facility to improve
capital efficiency.
The margin on the overdraft facility is 1.40 per cent p.a, while
the margin on the new term loan is 2.15 per cent p.a. Maintaining
a low funding cost and optimising the cost of capital are key
priorities in the capital management policy.
NORBIT has a policy of maintaining a leverage ratio, defined as
net-interest-bearing borrowings (including leasing liabilities)
divided by EBITDA, in the range of 1.0 – 2.5x. At the end of
2022, the ratio was 1.4x (1.8x). The equity ratio was 49 per cent
(51 per cent).
Further information regarding NORBIT’s capital management
policy can be found in note 20 to the financial statements.
PARENT COMPANY RESULTS AND ALLOCATION OF
NET PROFIT
The financial statements for the parent company are prepared
in accordance with the Norwegian Accounting Act and generally
accepted accounting principles in Norway.
The parent company had a profit before taxes of NOK 121.2
million (a profit of NOK 49.8 million). After a tax expense of NOK
28.4 million, the company recorded a net profit of NOK 92.8
million (net profit of NOK 32.8 million).
NORBIT ANNUAL REPORT 2022
33
BOARD OF DIRECTORS’ REPORT
Dividends
The board proposes the following allocation of the net profit
for the parent company:
Amounts in NOK million
Dividend (NOK 0.70 per share)
41.2
Transferred to other equity
51.6
The proposed dividend is in line with the dividend policy, which
is to distribute annual dividends in the range of 30 to 50 per
cent of the group’s ordinary net profit after tax.
When evaluating the dividend proposal, the board of directors
considers NORBIT’s financial position, investment plans as well
as the financial flexibility needed to provide sustainable growth.
The board considers NORBIT’s financial capacity for further
growth to be strong. Furthermore, the board of directors has
concluded that relative to the risks and scope of its activities,
the group will retain acceptable equity and liquidity levels after
paying the proposed dividend.
The proposed dividend will be considered at NORBIT’s annual
general meeting on 4 May 2023.
For the fiscal year 2021, NORBIT paid dividends in the aggregate
amount of NOK 17.5 million (NOK 0.30 per share).
SEGMENT INFORMATION
NORBIT is organised in three operating segments: Oceans,
Connectivity and Product Innovation and Realization (PIR).
Oceans
Financial review
Revenues for the segment amounted to NOK 443.0 million in
2022, representing an increase of 17 per cent from 2021 (NOK
378.5 million). Revenue growth was primarily driven by the entry
into the security market, with NORBIT recognising NOK 23.2
million in revenues in 2022, in addition to increasing demand
for sonars. Revenues from sale of sonars and related services
increased by 18 per cent to NOK 360.9 million in 2022. The
WINGHEAD sonar platform was a strong contributor to the
revenue growth in 2022, representing 37 per cent of the sonar
systems sold and growing at a rate of 72 per cent year over year.
During the year, Oceans’ continued to invest in the platform,
expanding product offering into new applications.
The segment has a highly diversified customer base worldwide,
with the five largest customers in 2022 accounting for
approximately 17 per cent of revenues. Approximately 50 per
cent of the revenues were generated from customers in Europe,
Africa and Middle East, with the remainder shared equally
between Americas and Asia-Pacific.
Operating expenses for segment Oceans, including employee
expenses and other operating expenses, amounted to NOK
145.6 million for 2022 (NOK 105.6 million). The increase is
explained by a general strengthening of the organisation to
support long-term growth and strategic initiatives.
EBITDA for the Oceans segment was NOK 147.6 million for 2022
(NOK 133.6 million), representing a margin of 33 per cent (35
per cent). The improved results are due to operational leverage
following growth in revenues and improved gross margin.
EBIT was NOK 114.4 million in 2022 (NOK 108.9 million), corre-
sponding to a margin of 26 per cent (29 per cent).
In 2022, NORBIT acquired Nicarnica Aviation AS and Aursund
Maskinering AS for a total consideration of NOK 10.2 million.
Nicarnica Aviation's technology broadens and complements the
existing environmental monitoring solutions developed by seg-
ment Oceans, while Aursund Maskinering secures capacity and
resources in the manufacturing of sonars. Further information
may be found in note 21 to the financial statements.
Connectivity
Financial review
Revenues for Connectivity amounted to NOK 308.0 million for
2022 (NOK 146.3 million). The increase was largely explained
by higher sales of DSRC products, where revenues increased
to NOK 231.0 million in 2022 (NOK 113.1 million), supported by
increased deliveries of On-Board Units. Full-year effect of the
iData acquisition contributed to further revenue growth in 2022.
Adjusting for this effect, subscription and e-toll revenues in iData
grew by 15 per cent in 2022 from 2021. iData reported NOK 77.0
million in revenues in 2022, compared with NOK 33.2 million in
revenues in the period of August to December 2021.
Operating expenses for segment Connectivity amounted to NOK
121.0 million for the full year of 2022 (NOK 72.0 million). Full-
year contribution from iData explains NOK 31.6 million of the
increase from 2021.
For the full year of 2022, EBITDA for Connectivity totalled NOK
77.4 million (NOK 23.8 million), representing an EBITDA margin
of 25 per cent (16 per cent). The increase in EBITDA is a result
of the increase in revenues.
NORBIT ANNUAL REPORT 2022
34
BOARD OF DIRECTORS’ REPORT
NORBIT ANNUAL REPORT 2022
35
BOARD OF DIRECTORS’ REPORT
EBIT was NOK 40.5 million in 2022 (NOK 0.9 million), corre-
sponding to a margin of 13 per cent (1 per cent).
Product Innovation and Realization (PIR)
Financial review
Revenues for PIR amounted to NOK 456.5 million for 2022 (NOK
291.0 million), representing an increase of 57 per cent. During
the year, PIR invoiced customers NOK 106.7 million (NOK 39.0
million) to receive reimbursement for extraordinary material
costs due to a challenging supply market for certain components.
Adjusted for this effect, revenues grew by 39 per cent. Revenue
growth was driven by higher sales of contract manufacturing
and R&D products and services. In 2022, contract manufacturing
represented approximately 80 per cent of the revenues in the
segment, while R&D services and products represented the
remainder. Within contract manufacturing, approximately 70
per cent of the revenues related to the automotive industry.
Operating expenses for the PIR segment amounted to NOK 101.3
million for 2022 (NOK 93.6 million). The increase is primarily
explained by a strengthening of the organisation and higher
electricity cost.
The PIR segment recorded an EBITDA for the year of NOK 47.8
million (NOK 16.4 million), representing a margin of 10 per cent
(6 per cent). The improved results are mainly attributed to the
higher revenue base and scalability.
EBIT was NOK 34.0 million in 2022 (negative NOK 3.8 million),
corresponding to a margin of 10 per cent (negative 1 per cent).
EVENTS AFTER THE BALANCE SHEET DATE
■
Segment Connectivity received a NOK 150 million order
for On-Board Units with delivery in the first half of 2023.
Discussions are ongoing with respect to additional volume
deliveries in the second half of 2023.
■
NORBIT announced the closing of the acquisition of
the IoT start-up CPS AS. The acquisition includes a
highly skilled IoT team, further bolstering Connectivity's
capabilities to deliver value by supporting clients in their
digitalisation efforts. The transaction valued CPS at an
enterprise value of NOK 13.0 million, implying an equity
value of NOK 12.6 million. The acquisition was financed
by the issuance of consideration shares at a price equal
to NOK 30.25107 per share with a total value of NOK 9.0
million, and NOK 3.6 million was paid in cash.
NORBIT ANNUAL REPORT 2022
36
BOARD OF DIRECTORS’ REPORT
RESEARCH AND DEVELOPMENT
Investments in research and development (R&D) is an important
part of NORBIT’s strategy to develop new and innovative
technological solutions to support long-term growth. In 2022,
the group invested a total of NOK 60.5 million in R&D (NOK
51.2 million), representing 5.2 per cent of the revenues for the
year. A significant part of NORBIT’s investments in R&D in 2022
was allocated to segment Oceans and Connectivity to further
broaden the product offering.
In 2023, NORBIT expects its R&D investments to be between
NOK 60 and 70 million.
RISKS AND RISK MANAGEMENT
NORBIT is subject to several risks which may affect the group’s
operations, performance, finances and share price. These risk
factors are further described below. These risks are monitored
by the corporate management and reported to the board on a
regular basis.
Operational risk
NORBIT considers shortage of supply of consumables/electronic
components to be the main operational risk. While production is
an in-house capability, NORBIT relies on a significant supply of
components to produce and deliver its products and solutions. A
large portion of the components are bought in a global market.
The supply market for components was challenging for most of
2022, but some signs of improvement were seen in the fourth
quarter. However, for certain semiconductor components the
supply market is still challenging. Lead times remain elevated
and are unreliable, resulting in low visibility. This impacts the
scheduling of planned deliveries leading to delays and, in worst
case, cancellation of planned orders. There is also a risk that
customers may re-schedule orders due to challenges in their
own supply chain beyond the scope of NORBIT.
NORBIT has maintained a strategy of keeping extra inventory of
electronic components to maintain flexibility, which has been a
successful strategy in the current component market.
NORBIT is working actively to manage unreliable lead times
and to mitigate the risk of supply shortages by purchasing
larger series of components to inventory, evaluating the use
of component equivalents in close dialogue with customers,
as well as working with suppliers to secure the raw material
components needed to deliver according to plans. The increase
in inventory requires careful management as changes in market
dynamics or reduced demand may negatively impact NORBIT
as supplier, leading to obsolete inventory that has not been
provided for in the financial statements.
Price increases on raw materials components continue to
persist. Over the last year, inflation has become broader and
remain elevated. Combined, this leads to upwards pressure on
the cost base. NORBIT continues to manage inflation by taking
appropriate measures to maintain acceptable margins.
Market risk
The activities of the group are international, with the delivery of
high-technology products, systems and solutions with related
services to a variety of markets and customers. Market risk
can therefore vary somewhat within these different segments.
Further, the group has exposure to a wide range of industries
through its engineering and manufacturing services and covers
amongst other various industrial customers.
Each operating segment is exposed to a separate competitive
landscape. Increased competition in the markets where the
group operates may have a material adverse effect on the
group’s business, results and cash flow.
Geopolitical risk
NORBIT is a global group of companies with approximately 80 per
cent of its revenues generated outside of Norway. Furthermore,
a large part of the raw material components is bought in a global
market. Business operation is thus significantly dependent on
foreign trade. As a result, NORBIT’s operations are subject to a
variety of country, regulatory and political risks, including, but
not limited to, regulatory changes, trade barriers, restrictive
government actions and changes in law and policies. Sourcing
of components might also be subject to tariffs or increased costs,
which may not be recoverable.
Following the war in Ukraine, geopolitical risk has increased.
While NORBIT has no direct exposure to Ukraine, Belarus or
Russia, the war could have indirect effects on NORBIT through
the supply chain, which may lead to disruptions and shortage
of components.
Financial risk
NORBIT is exposed to several financial risks. Note 5 to the
financial statements explain the group’s exposure to financial
risks and how these could affect the group’s future financial
performance. Financial risks are managed centrally by the
finance department.
NORBIT ANNUAL REPORT 2022
37
BOARD OF DIRECTORS’ REPORT
Interest rate risk
The group’s main interest rate risk arises from borrowings with
variable rates in EUR, USD and NOK, which expose the group to
cash flow interest rate risk. NORBIT has no financial instruments
designated to hedge interest rate risk.
Trade and other receivables and trade and other payables are
interest free and with a term of less than one year, hence there
is no interest rate risk associated with these financial assets
and liabilities.
Currency risk
NORBIT has international operations and clients and is exposed
to currency risk through customer contracts and purchase of
products and services in currencies other than the functional
currency (NOK). NORBIT is primarily exposed to EUR and USD
currencies.
Fluctuations in exchange rates can lead to increased or
decreased profit margin in contracts with customers compared
to the initial project calculus. The group was a net seller of EUR
and a net buyer of USD during 2022.
The group rebalances the short-term (within 90 days) main
currency exposures on a monthly basis in order to have a neutral
currency position on trade receivables, trade payables and cash.
There is currently an ongoing process to optimise the medium-
term hedging practice.
Credit risk
The group is exposed to credit risk related to cash and cash
equivalents, trade receivables and other current receivables.
Cash is held with reputable banks with strong credit ratings
and low credit risk. Receivables carry a higher credit risk due
to the fact that NORBIT conducts its business with a fragmented
customer base. Historically, NORBIT has had limited losses on
its receivables.
The exposure to credit risk is monitored on an ongoing basis
within the finance department as a risk mitigating action. The
group’s receivables are not credit insured.
Liquidity risk
Liquidity risk is the risk that the group is unable to meet the
obligations associated with its financial liabilities. For NORBIT,
liquidity risk is managed by maintaining sufficient cash deposits
and available committed credit lines that the group can draw
on to meet its obligations as they occur. NORBIT has a centrally
managed multi-currency cash pool arrangement where most
subsidiaries are connected. The liquidity trend is monitored
frequently, supported by budgets and forecasts.
At 31 December 2022, NORBIT had NOK 439.4 million in undrawn
credit facilities.
CORPORATE GOVERNANCE
NORBIT ASA is subject to annual corporate governance reporting
requirements under §3-3b of the Norwegian Accounting Act
and the Norwegian Code of Practice for Corporate Governance,
cf. section 4.4 of the Oslo Stock Exchange Rule Book II. The
Accounting Act may be found (in Norwegian) at
www.lovdata.no
.
The Norwegian Code of Practice for Corporate Governance may
be found at
www.nues.no
. NORBIT ASA follows the Norwegian
Code of Practice for Corporate Governance, and the company’s
practice is in accordance with these recommendations. The
annual statement on corporate governance for 2022 has been
approved by the board and can be found in the corporate
governance section on page 55 of this annual report.
CORPORATE SOCIAL RESPONSIBILITY
NORBIT is required to report on its corporate social responsibility
and selected related issues under §3-3a and §3-3c of the
Norwegian Accounting Act, as well as provide an annual
statement on its efforts to secure equal opportunities under
§26-a in the Equality and Anti-discrimination Act of Norway.
NORBIT has chosen to report on its efforts to integrate
environment and climate issues, social conditions and working
environment (hereunder injuries, sickness leave, equality and
non-discrimination, respect for human rights and measures
against corruption and bribery) in the sustainability section
of the annual report, approved by the board of directors. The
detailed reporting on all relevant topics can be found from
page 41.
EMPLOYEES AND ORGANISATION
In 2022, NORBIT had an average workforce of 418 full time
equivalents (FTEs), compared to an average of 311 in 2021.
NORBIT is a global group of companies with employees in 14
countries.
NORBIT ANNUAL REPORT 2022
38
BOARD OF DIRECTORS’ REPORT
Number of full-time equivalents:
Country
Average 2022
Per year-end
Norway
267
277
USA
5
5
Hungary
117
120
Austria
3
3
Brazil
1
1
Poland
1
1
Italy
2
3
Singapore
2
3
China
1
1
Denmark
2
2
United Kingdom
4
4
Czech Republic
1
0
Croatia
8
9
Slovakia
6
5
Total
418
434
Employee share purchase programs
In July 2022, incentive share purchase programs for all NORBIT
employees were approved by the board of directors. In total, 133
employees participated in the programs, representing 34 per
cent of the total employees eligible for participation. The first
program is a share investment program with the opportunity to
acquire shares at a discount to the market value, subject to a
lock-up of 24 months. The second program is a share matching
program, where the participants were offered the opportunity
to acquire shares at market value, and in turn, obtain a right to
receive compensation in new shares equivalent to their invested
amount after 24 months if certain conditions are met.
Changes to the executive management and board of
directors
The articles of association provide that the board of directors
shall consist of a minimum of three and a maximum of seven
directors elected by NORBIT ASA’s shareholders. The board
consists of Finn Haugan (chair), Bente Avnung Landsnes (deputy
chair), Trond Tuvstein, Christina Hallin and Magnus Reitan. Tom
Solberg is elected deputy director.
The board of directors was elected on the company's general
meeting on 4 May 2022. Chistina Hallin and Magnus Reitan are
new members of the board of directors from 2022.
Directors and officers liability insurance
NORBIT ASA has a directors and officers liability insurance
with AIG for the group, including the parent company and its
subsidiaries. The insurance covers the board members, CEO and
members of the management team. The insurance comprises
personal legal liabilities, including defence and legal costs.
SHARE AND SHAREHOLDER MATTERS
NORBIT ASAs shares are listed at Euronext Oslo Børs (Oslo Stock
Exchange) under the ticker “NORBT”.
During 2022, the share traded between NOK 23.30 and NOK
32.40 per share, with a closing price of NOK 28.80 at year-end
2022.
At 31 December 2022, NORBIT ASA had approximately 1 800
shareholders, of which the 20 largest shareholders held 80.4
per cent of the total outstanding shares. NORBIT ASA had a total
of 58 901 139 issued shares and 58 884 307 outstanding shares
at year-end 2022. The number of treasury share held were 16
832 at 31 December 2022.
NORBIT ASA’s annual general meeting for 2023 is planned to
be held 4 May 2023 16:00 CET.
Equity issues
In connection with the incentive share purchase programs to
employees, the board of directors of NORBIT ASA resolved to
increase the parent company’s share capital by NOK 38 070,80,
through the issuance of 380 708 new shares, each with a par
value of NOK 0.10.
The board also resolved to increase the company's share capital
by NOK 6 112.90 in connection with the exercise of restricted
stock units by executive management through the issuance of
61 129 new shares, each with a par value of NOK 0.10.
The resolutions were based on the authorisation to increase the
share capital granted by the general meeting on 4 May 2022.
OUTLOOK
Activity has been high in all three business segments in the first
weeks of 2023, and the board is optimistic about the outlook
for the year. The target for 2023 is to deliver revenues in excess
of NOK 1.4 billion, supported by growth in all three business
segments. As in previous years, quarterly seasonal fluctuations
are expected, along with the impact of currency movements
as a substantial share of NORBIT’s revenues is denominated in
foreign currencies.
Margins are expected to continue improving.
Subsurface navigation and seabed mapping for inspection
continues to be a growing market for Oceans’ sonar platform,
NORBIT ANNUAL REPORT 2022
39
BOARD OF DIRECTORS’ REPORT
Trondheim, Norway, 29 March 2023
The board of directors and CEO
NORBIT ASA
Finn Haugan
Bente Avnung Landsnes
Christina Hallin
Chair of the board
Deputy chair of the board
Director
Trond Tuvstein
Magnus Reitan
Per Jørgen Weisethaunet
Director
Director
Chief executive officer
in particular towards the renewable energy market and for
autonomous navigation. Launch of new product innovations
will expand the addressable market further, where Oceans is
benefiting from its global sales and distribution platform. In
addition, given the current geopolitical unrest, Oceans is well
positioned for continued growth with its security and monitoring
solutions, providing a range of products to detect and monitor
activity both over and below the sea surface. First quarter
has started out well and Oceans is targeting to deliver growth
compared to the corresponding period of 2022.
Connectivity continues to benefit from strong demand for DSRC
products and its strategy of partnering with the insurance
industry on existing products and innovations, evidenced by the
recently awarded NOK 150 million contract to deliver On-Board
Units in the first half of 2023. Discussions are ongoing with
respect to additional deliveries in the second half of the year.
Supported by this award, Connectivity is expected to report
revenues between NOK 270 – 300 million in the first six months
of 2023. Capitalising on its capabilities within low power wireless
devices for asset monitoring and safety solutions, Connectivity
is investing in new innovations to broaden the product offering
further to secure long-term growth.
Growth in segment PIR is supported by a general electrification
trend and an increasing preference among new clients
to manufacture products in geographical proximity to its
operations. In the first quarter, PIR is expected to report growth
from the corresponding quarter of 2022.
Over the last years, NORBIT has made significant investments
in broadening the product offering, expanding the production
capacity and increasing inventories to maintain a safety stock
of components to safeguard deliveries and seize opportunities.
These strategic decisions have been an enabler for organic
growth and enhanced the flexibility, positioning NORBIT to
deliver on larger contracts. Continued long-term growth will
require further investments in R&D to broaden the product
portfolio and in manufacturing equipment. In 2023, NORBIT
expects its R&D investments to be NOK 60 – 70 million, while
investments in fixed assets are anticipated to be NOK 35 – 45
million.
In addition to realising the organic growth potential, NORBIT
will continue to explore value-accretive acquisitions through
its defined criteria to accelerate further growth. The board of
directors remains optimistic about NORBIT’s long-term outlook.
The group’s diversified product offering, targeting multiple
industries and geographies, combined with the organisation’s
ability to adapt and to successfully introduce new market-driven
innovation makes the company robust.
For the fiscal year 2022, the board of directors proposes a
dividend of NOK 0.70 per share, in line with the company’s
dividend policy. When proposing the annual dividend, the board
of directors has considered the company’s financial position,
investment plans and the needed financial flexibility to provide
for sustainable growth. Considering NORBIT’s solid liquidity
position, the board of directors considers the financial capacity
for further profitable growth to be strong.
The board wishes to thank shareholders and external stake-
holders for their continued support, as well as thank all
employees for their efforts and for the results achieved in 2022.
COMMITTED TO MAKING
UN GLOBAL COMPACT’S
PRINCIPLES A PART OF
DAILY OPERATIONS
NORBIT is committed to making the UN Global
Compact and its principles part of the group
strategy, culture and day-to- day operations.
As part of this commitment, NORBIT reports on
practical actions taken or planned by the group
to implement the UN Global Compact principles.
NORBIT will submit a Communication on Progress
Report by June 2023, describing undertaken
activities and outcomes in 2022. This report can be
found on the UN Global Compact's website:
www.unglobalcompact.org
NORBIT ANNUAL REPORT 2022
41
ESG REPORT
This report is prepared in accordance with the Norwegian Accounting Act §3-3c, the Transparency
Act and the Equality and Anti-Discrimination Act. As a preparation for the upcoming Corporate
Sustainability Reporting Directive (CSRD) from the EU commission, we include elements from the draft
principles of the new Environmental Sustainability Reporting Standard (ESRS). In 2022, we conducted
a materiality assessment on sustainability related impacts, risks and opportunities. For 2025 we will
include the full ESRS approach.
PLANNED REPORTING TIMELINE FOR NORBIT:
FY 2020
NORBIT publishes
first integrated ESG
report and UN Global
Compact report
FY 2024
NORBIT reports
according to
ESRS
FY 2021
NORBIT publishes
second integrated
ESG report with more
details on social
parameters
FY 2023
NORBIT prepares
for ESRS with
materiality assessment,
taxonomy alignment
and GHG accounts
FY 2022
NORBIT prepares for
European Sustainability
Reporting Standard
(ESRS) with materiality
asssesment and
taxonomy eligibility
FINDING THE MOST MATERIAL SUSTAINABILITY TOPICS FOR NORBIT
NORBIT conducted a materiality assessment in 2022. The
process followed the methodology described in the draft ESRS
and was carried out in two steps. Firstly, relevant sustainability
matters for NORBIT were identified using three lenses:
1.
Value chain perspective:
Identification of sustainability
matters throughout each step of the company’s value chain.
2.
Sustainability context perspective:
Identification
of sustainability matters based on the EU Taxonomy
Regulation and research on relevant material topics for
the industries NORBIT operates in.
3.
Stakeholder perspective:
Identification of sustainability
matters based on interviews with key internal and
external stakeholders. External stakeholders include
customers, investors, and lenders.
Secondly, the identified sustainability matters were prioritised
based on the double materiality principle; both evaluating actual
or potential impact by NORBIT on people or the environment,
and the financial impact on NORBIT. The result of the materiality
assessment is shown below.
SUSTAINABILITY REPORT
NORBIT ANNUAL REPORT 2022
42
ESG REPORT
RESULT FROM THE 2022 MATERIALITY ASSESSMENT
Topics considered high material in upper right part
Environmental matters
Social matters
Governance matters
All (ESG) matters
Talent attraction
Water and
wastewater management
Company GHG
emissions
Physical
climate risk
Data privacy
and information
security
Business
ethics
Diversity and
equal opportunities
Labour practices
and human rights
Health, safety
and security
Local
production
Product
GHG emissions
Management systems
Waste and
hazardous materials
management
Product design
and life cycle
management
Supply chain
transparency
and control
ESG product
innovation
Circular
business
model
Sustainability (ESG) impact
Business (finacial) impact
Our focus areas
The material topics identified are summaried into four overall
sustainability topics for NORBIT to focus on. The areas are
connected to NORBIT’s overall values and vision:
1.
Explore more sustainability opportunities
2.
We will deliver products and solutions adapted to the
new reality of sustainability
3.
Refinement of talents in an attractive place to work
4.
Safe under pressure with ethical business conduct
Focus area 1 is related to both environmental, social and
governance factors, area 2 to environmental factors, area 3
to social factors, and area 4 to governance factors. NORBIT’s
ambition is to contribute to sustainable development both in
terms of acting responsibly in the group’s own value chain
(internal focus), as well as developing products and solutions
that contribute to solving sustainability challenges for customers
and the society at large (external focus). Area 1 represents the
external view, whereas area 2-4 mainly represent the internal
view.
NORBIT ANNUAL REPORT 2022
43
ESG REPORT
EXPLORE MORE SUSTAINABILITY OPPORTUNITIES
Objective:
To reach our long-term objective, we will in 2023 strive to:
We want to thrust the green
transition. We will continuously
explore how we can play a
part in solving sustainability
challenges for customers,
partners, and the society at
large through our products and
solutions.
■
Identify new sectors and areas where we can make a positive impact
on the environment and society through innovation and product
development.
■
Build domain knowledge and capabilities in such sectors through
selected innovation projects.
NORBIT provides tailored technology that thrusts the green
transition in several sectors, such as in the blue economy,
the digitalisation, and electrification space. Through our R&D
capabilities and in-house manufacturing, we develop innovative
systems and solutions for a better tomorrow.
Our vision is to be recognised as world-class, enabling people
to explore more. Our core values “We deliver!”, “Safe under
pressure” and “Refinement of talents” ensure customer focus
and enable employees to perform at their best. This is vital in
solving the major challenges ahead of us.
Since 2010, we have grown our revenues by 31 per cent per year
on average, while at the same time making a difference to our
customers and society at large through sustainable innovation.
NORBIT has identified four sustainable development goals
(SDGs) that we contribute to through our products and solutions
today, and will continue to work towards in the future.
NORBIT ANNUAL REPORT 2022
44
ESG REPORT
CREATING
SAFE AND
DECENT WORK
CONDITIONS
NORBIT develops and offers technology to detect and prevent
threats, both to humans, assets, and infrastructure. This
technology enables safe and decent work conditions for
different occupational groups, ranging from truck drivers to
platform workers.
SAFE WORK CONDITIONS FOR TRUCK DRIVERS BY
USE OF INTELLIGENT DIGITAL TACHOGRAPHS
According to the European Commission, over 3 500 people died in
crashes involving heavy goods vehicles in Europe in 2019. Estimates
suggest that for up to 80 per cent of all crashes, the truck drivers
are the party at fault, explained by both driver fatigue and behavior,
as well as technical malfunction. NORBIT’s intelligent digital
tachograph transmits data wireless from the moving truck to control
officers. The data set contains vehicle and calibration data and
information about security breaches and malfunctions. Using this
data, the control officer can selectively stop conspicuous vehicles
and thus ensure greater safety, both for the driver and other traffic
participants. The tachograph is mandatory for all newly registered
trucks in EU above 3.5 tons.
STIMULATING
INNOVATION
IN A RANGE
OF DIFFERENT
INDUSTRIES
NORBIT is offering R&D services and contract manufacturing
services realising ground-breaking innovations, systems, and
solutions for industrial customers in markets such as medical, low
carbon automotive, defense, energy, marine and subsea.
MONITORING CRITICALLY ILL NEWBORNS WITH
ULTRASOUND PROBE
15 per cent of all infants require intensive care in their first month
of life, and fluctuations in brain blood-flow is increasing the risk
of brain damage for these babies. Currently, no direct continuous
measurement of brain blood-flow is available despite a clear
clinical unmet need. The Trondheim based medical technology
company CIMON Medical has developed NeoDoppler, technology
for direct, non-invasive, continuous monitoring of blood-flow in the
brain of premature or critically ill babies. NORBIT has quoted the
design and manufactures the ultrasound probe for CIMON.
NORBIT ANNUAL REPORT 2022
45
ESG REPORT
REDUCING CO
2
EMISSIONS
FROM THE
TRANSPORT
SECTOR
NORBIT’s devices used for fleet management and electronic
tolling contribute to reduced CO
2
emissions from the transport
sector, for instance by reducing vehicle miles travelled, stop-
and-go traffic and suboptimal truck loads.
OPTIMAL FLEET MANAGEMENT BY USE OF ITRACK
The transport sector accounted for 37 per cent of CO
2
emissions
from end use sectors in 2021, according to the International Energy
Agency. NORBIT offers the fleet management system iTrack, making it
possible to track and monitor a fleet of vehicles or assets live with the
help of sensors and software. By using real-time tracking data, fleet
managers can optimise the use of the fleet, reducing vehicle miles
travelled, stop-and-go traffic and suboptimal truck loads, which in turn
contributes to reducing the CO
2
emissions from the transport sector.
SUSTAINABLY
USING THE
OCEANS
NORBIT delivers tailored technology and solutions to the global
maritime markets. Combining remote sensing technologies with
state-of-the-art data fusion and artificial intelligence, the user gets
information and tools to increase efficiency and reduce cost, while at
the same time ensuring the safety of the environment and marine assets.
USING SONARS TO LOCATE MARINE LIFE
Beavers shelter in burrows, which they create by digging tunnels
and building lodges from wood debris, twigs and soil. These tunnel
networks lead to more fragile riverbanks, which cause problems
for people working and living alongside the river. To locate these
burrows, a customer of NORBIT, Storm Geomatics Ltd, is using
one of NORBIT’s sonars to scan the riverbed. This collaboration is
allowing humans and beavers to coexist in a safer way.
NORBIT ANNUAL REPORT 2022
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WE WILL DELIVER PRODUCTS AND SOLUTIONS ADAPTED TO THE
NEW REALITY OF SUSTAINABILITY
Objective:
To reach our long-term objective, we will in 2023 strive to:
We will deliver products and
solutions with sustainability in
mind – both during the design,
development, production,
transportation, and recycling
process.
■
Map today’s activities according to the EU Taxonomy’s requirements
and identify actions to increase alignment.
■
Revise and update environmental KPIs for the production facilities in
accordance with EU Taxonomy requirements.
■
Establish greenhouse gas accounts according to the GHG Protocol.
■
Design and operationalise circular business model for selected
products.
Climate change and environmental degradation are two of the
biggest challenges of our time. To overcome these challenges,
the European Union has established the European Green Deal
with the aim of transforming the EU into a modern, resource-
efficient, and competitive economy, ensuring no net emissions
of greenhouse gases by 2050. A core building brick in this effort
is the EU Taxonomy, which is a classification system providing
appropriate definitions for which economic activities can be
considered environmentally sustainable. This forms the basis
of what NORBIT needs to focus on in the design, development,
and production of our products in the years to come. Important
elements are designing products for circularity and with low
greenhouse gas impact, as well as ensuring that the production
processes are as environmentally friendly as possible.
PREPARING FOR THE EU TAXONOMY BY
REPORTING ELIGIBILITY
NORBIT has not yet reached the threshold for mandatory
disclosure under the EU Taxonomy, but as the company is
growing, we prepare for disclosure. We will therefore voluntarily
disclose estimates on eligibility for 2022, that is the share of
revenues, CAPEX and OPEX that is covered by the taxonomy
activity definitions. Throughout 2023 and 2024 we will verify
these estimates.
In 2022, NORBIT conducted an analysis of its products, sites
and activities and reviewed them according to the activities
defined in the Climate Delegated Act. Since the taxonomy
is under development, described assumptions and applied
principles in this years’ eligibility disclosure can change in
future disclosures.
We have identified activity “3.6 Manufacture of other low
carbon technologies” as a potentially relevant activity for all
our segments. It is defined as manufacturing of technologies
aimed at substantial greenhouse gas (GHG) emission reduction.
Within Connectivity, both electronic tolling products and fleet
management solutions are either reducing traffic or making
it more efficient, thereby reducing GHG emissions. The EU
commission points to traffic management and tolling as possibly
eligible in a Draft Commission Notice of December 2022, and
we have therefore included this activity in the eligibility score.
Activity 3.6 could also be relevant for activities and products in
Oceans and PIR. As the EU commission has not yet commented
on the relevance of
marine technology under activity 3.6, we
have decided to exclude Oceans’ products from this years’
eligibility score. As EU develops the activity descriptions further
and adds more sectors and activities through new Delegated
Acts, activity under Oceans is expected to be eligible. For PIR
we have included the projects where the customers’ products
and solutions have a main goal of reducing GHG emissions.
Below we disclose KPIs for turnover and CAPEX under the
taxonomy. The OPEX KPI is left out as we have no relevant OPEX
components, neither for the denominator nor the numerator
NORBIT ANNUAL REPORT 2022
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ESTIMATION OF ELIGIBILITY KPIS FOR TURNOVER, CAPEX AND OPEX UNDER THE TAXONOMY
■
Eligible
■
Non-eligible
Turnover
CAPEX
32%
68%
15%
0%
85%
100%
OPEX
NORBIT ANNUAL REPORT 2022
49
ESG REPORT
of the KPI. This is because EU has a narrow definition of what
should be included in the OPEX KPI, and because we capitalise
relevant cost components such as R&D wages and lease/rent.
These components are included in the CAPEX KPI.
The next step of NORBIT’s taxonomy journey is to map the
eligible activities according to the criteria for alignment, and
to identify actions to improve alignment.
CERTIFICATIONS AND ENVIRONMENTAL KPIS AT
PRODUCTION SITES
NORBIT has three production facilities located in Røros, Selbu
and Trondheim. The facilities in Røros and Trondheim are
certified according to the environmental management system
ISO 140001, whereas the facility in Selbu is certified according to
Eco-Lighthouse (Miljøfyrtårn). The sites have defined different
environmental KPIs, such as electricity and water consumption.
The taxonomy defines criteria related to environmental factors
such as water, pollution prevention and biodiversity for each
eligible activity. In 2023, we will map these criteria and revise
the KPIs of the sites so that we increase alignment.
REFINEMENT OF TALENTS IN AN ATTRACTIVE PLACE TO WORK
Objective:
To reach our long-term objective, we will in 2023 strive to:
Our people are our greatest
asset. We will continuously
work towards creating an
attractive and safe workplace
and refining our talents.
■
Establish a «Diversity and equality» committee with a mandate of
setting appropriate goals for the diversity and equality work of the
company, refining and updating policy documents, conducting risk
assessments and implementing needed actions.
■
Establish a more refined reporting regime for HSS issues.
■
Define and implement an updated employee life-cycle process,
improving processes such as onboarding and off-boarding.
■
Define and implement a leadership program to build great leaders to
support, engage and develop the people of NORBIT.
■
Continue to engage the people of NORBIT through new chapters of
our “Life in NORBIT” video story.
NORBIT creates value by combining domain knowledge,
production capabilities and world-class technology. The
knowledge and capabilities of the people of NORBIT are the
company’s greatest asset. At year-end 2022, NORBIT had
418 full-time equivalents across 14 jurisdictions. At NORBIT,
we are committed to fostering a diverse and inclusive work
environment where the rights, health, and safety of our
employees are paramount. We strive to create an attractive
workplace where individuals are valued, respected, and
empowered to reach their full potential.
LABOUR RIGHTS
NORBIT complies with established standards and employment
legislation. NORBIT’s Code of Conduct is founded on key
UN and International Labour Organisation (ILO) conventions
and documents. NORBIT employees have the right to join
or form trade unions of their own choosing and to bargain
collectively. Workers’ representative roles are established, and
such employees have access to carry out their representative
functions in the workplace. NORBIT describes employees'
rights, compensation, benefits, and responsibilities through
several policy documents.
NORBIT ANNUAL REPORT 2022
50
ESG REPORT
DIVERSITY AND EQUALITY
NORBIT is committed to promoting a working environment
characterised by diversity, equality, and mutual respect. NORBIT
does not accept any form of harassment or discrimination based
on gender, religion, race, national or ethnic origin, cultural
background, social group, disability, sexual orientation, marital
status, age, or political opinion. This is governed by NORBIT’s
Code of Conduct, which all employees are obliged to follow
according to the employment agreement.
NORBIT also strives to ensure that work of equal value shall
receive equal pay, regardless of social differences. Salaries
are determined based on a variety of factors, including, but
not limited to, seniority, performance, responsibility, and
qualifications. Salary adjustments are carried out once a
year. Salary levels vary across jurisdictions depending on
competition for such resources and the general wage level
of the countries NORBIT operates in. As a general guideline,
NORBIT shall provide competitive salaries, but not be market
leading. In addition to salaries, employees have pension and
insurance schemes, which are governed by the employment
agreements. All employees with 50 per cent working interest
or more are entitled to participate in employee share incentive
programs.
In 2022, NORBIT had offices in 14 countries worldwide, and
employees of 22 different nationalities, meaning that NORBIT’s
employees have a broad and diversified background, both
culturally as well as by education and work experience. NORBIT
is also committed to promoting gender diversity. Within the
group, the gender balance varies across companies and
functions. Of the total 418 FTE’s in the group, 153 are women,
giving a female percentage of the workforce of 37 per cent. This
is an increase of 9 percentage points from last year, meaning
that of the increase of 107 FTEs during 2022, 62 per cent were
women.
The board of directors consists of five members, of which two
are women. The management team consist of five men and
one woman. In 2022, the group had 41 part-time employees,
of which 71 per cent were women and 29 per cent were men,
and 55 temporary employees of which 31 per cent were women
and 69 per cent were men. There were no involuntary part-time
engagements in the group in 2022. During 2022, 15 Norwegian
employees, divided into 11 men and 4 women, had parental
leave. The average parental leave in the Norwegian companies
was 15 weeks for men and 19 weeks for women. NORBIT follows
applicable laws and regulations governing parental leave.
In 2022, several management teams in the group were
complemented with female directors and managers. We believe
that bringing more women into leadership roles will lead to
increased diversity of thought, improved decision-making,
and a more inclusive corporate culture. This is a positive
development we wish to sustain in the coming years.
NORBIT conducted a salary gap survey for its Norwegian
companies as part of the Activity Duty for employers under
the Equality and Anti-Discrimination Act for the annual report
2021. The duty is biannually reporting. As such, a new salary
survey will be completed in 2023.
Strengthening the gender diversity and equality of NORBIT
requires continuous effort. In 2023, NORBIT will establish a
«Diversity and equality» committee with representatives from
different parts of the company. The role of the committee is
setting appropriate goals for the diversity and equality work,
refining and updating policy documents, conducting risk
assessments and implementing needed actions. This is an
effort to ensure that NORBIT has working conditions that is truly
diverse, inclusive, and free from discrimination and harassment.
HEALTH, SAFETY AND SECURITY (HSS)
"Safe under pressure" is one of NORBIT's core values. A safe,
secure, and healthy working environment is a key priority in
the group, and this applies wherever the group operates. The
specific business units have defined safety routines and work
instructions for the use of potentially harmful tools.
NORBIT has defined specific KPIs for HSS related injuries and
sick leave. NORBIT strives for zero injuries, and in 2022 no
significant injuries or accidents were recorded. The goal for
sick leave varies from <2.5 per cent to <4.0 per cent for the
different business units. The group had 3.6 per cent sick leave
in 2022, compared to 3.3 per cent in 2021 and 3.5 per cent in
2020. Sick leave within the Norwegian workforce is lower than
the country average of approximately 6.5 per cent (at Q3 2022),
according to Statistics Norway.
In 2023, NORBIT will establish a more refined reporting regime
(including KPIs) for HSS issues, making it easier to measure
progress and implement relevant improvement measures.
EMPLOYEE RELATIONSHIP AND DEVELOPMENT
NORBIT gives employees considerable scope in making
decisions regarding their work. This implies a significant
degree of freedom and places a substantial responsibility on
our employees.
REVOLVE NTNU
An independent student organisation at the
Norwegian University of Science and Technology,
with a multidisciplinary team of 60 students from 20
different majors. In one year, the students work to
create a world-class racecar from scratch. The car
will compete in Formula Student, the world's largest
competition for engineering students.
PROPULSE NTNU
A rocketry team that aims to give students hands-on
experience with engineering projects, with the
goal of learning as much as possible about rockets,
engineering and teamwork. The final product is a
purpose-built sounding rocket, designed to execute
a specific scientific mission defined by the members.
ORBIT NTNU
A
volunteer
student
organisation
educating
tomorrow's space engineers, Orbit NTNU is a leading
environment in Scandinavia for designing and building
small satellites for launch into space. Its first mission,
SelfieSat, was launched in May 2022. FRAMSat-1,
Norway’s first operational student satellite, is
expected to launch in 2023 from Andøya Space Center.
ASCEND NTNU
An aerial robotics team building the competitive drones
of the future, Ascend NTNU develops innovative
solutions to some of today’s most challenging
problems within cybernetics and autonomy. It
competes in prestigious international competitions
and has won several prizes.
SELECTED STUDENT SPONSORSHIPS:
NORBIT ANNUAL REPORT 2022
52
ESG REPORT
A great employee relationship starts with a positive onboarding
experience. NORBIT is a growing company and welcomes a
significant number of new employees during a year. To ensure
a good start for all employees, we have during 2022 refined our
onboarding program. The program will be developed further
and implemented in all three business units during 2023.
Leadership is another important component of employee
satisfaction and development. In 2022, NORBIT defined and
implemented a new leadership program rolled out as a pilot
in one of the business units. The purpose of the program is
to build great leaders to support, engage and develop the
people of NORBIT. The program will be developed further and
implemented in additional business units during 2023.
Lastly, sharing information is an important means for engaging
the people of NORBIT. We ended 2022 with finding new
channels for information and news for all our employees in 14
countries. In November, we made the first chapter of the video
series “Life in NORBIT” that was shared with all employees
worldwide. More chapters are planned throughout 2023.
SUPPORTING THE ENGINEERS OF THE FUTURE
One of NORBIT’s core values is “Refinement of talents”.
NORBIT’s recruiting strategy includes offering internships to
students. As part of the internship programs, the students learn
and experience how technology can innovate and be applied
in various contexts. During 2022, the company had over 20
internships in the three business units.
NORBIT also contributes with both monetary support and non-
financial initiatives to various student organisations to stimulate
the engineers of the future to become interested in innovation
and development. In close collaboration with educational
institutions, NORBIT inspires a new generation of engineers
to explore the technology area in search of new knowledge.
SAFE UNDER PRESSURE WITH ETHICAL BUSINESS CONDUCT
Objective:
To reach our long-term objective, we will in 2023 strive to:
We will ensure good
governance and legal
compliance in all countries
and markets. We aim for
transparency, traceability and
integrity across our value chain.
■
Harmonise and implement supplier assessment methodology and
self assessment questionnaires across NORBIT.
■
Conduct risk assessments in operations and supply chain on a
yearly basis.
■
Continue with regular Culture Workshops both on group and business
unit level to ensure that the company’s values and ethical principles
is understood by our employees.
■
Develop and conduct trainings in Code of Conduct, providing
guidelines and concrete examples of behavior and social norms.
NORBIT’s activity is part of a global value chain consisting
of five main steps: Raw materials production; transportation;
production, assembly and re-packaging; transportation to
customers; and product-end-of-life handling. Ethical business
conduct in NORBIT means maintaining a high ethical standard
throughout the entire value chain, and relates to both suppliers,
employees and customers.
HUMAN RIGHTS AND THE TRANSPARENCY ACT
The Norwegian Transparency Act entered into force 1
st
of
July 2022. The Act shall promote companies’ respect for
fundamental human rights and decent working conditions in
connection with the production of goods and ensure the public
access to information regarding how companies address this
topic. NORBIT’s duties under the Act is to carry out a yearly due
NORBIT ANNUAL REPORT 2022
53
ESG REPORT
diligence assessment of the supply chain in accordance with
the OECD Guidelines for Multinational Enterprises, as well as
disclose this information.
NORBIT conducted a due diligence assessment during autumn
2022. Information about company names, geographical
location and spend for the company’s suppliers were collected
and compiled. The results show that 5 per cent of the suppliers
(
~
115) constituted 80 per cent of the total supplier spend in
2022. 50 per cent (
~
60) of these are based in Norway. Of the
remaining 50 per cent, 50 per cent (
~
30) are based in high-
risk countries in terms of potential human rights and labour
conditions breaches. The risk associated with and needed
actions towards these suppliers were evaluated and discussed
on an individual basis, to be further matured during 2023.
During 2022, NORBIT refined its supplier assessment
methodology and governing documents according to the
Transparency Act. In 2023, we will continue the work on
harmonising and implementing this across NORBIT. We will
also audit suppliers with heightened risk of human rights and
labour condition breaches. A more detailed disclosure of the
methodology, the results, and how we work with human rights
and labour conditions in our supply chain can be found on our
website
www.norbit.com
.
EMPLOYEE ETHICAL GUIDELINES
NORBIT’s license to operate rests on the confidence from its key
stakeholders. All employees are therefore committed to comply
with the company’s Code of Conduct to ensure maintenance
of high ethical standards in NORBIT’s business concept. The
ethical guidelines apply to all employees and include, among
others, guidelines on personal conduct, conflicts of interests,
anti-corruption and fair competition. The most important
principles are summaried below:
1.
Personal conduct:
All employees and representatives
of the company shall behave with respect and integrity
towards business relations and partners, customers and
colleagues. The executive management team has a particu-
lar responsibility to promote openness, loyalty and respect.
2.
Conflict of Interests:
Employees or representatives shall
avoid situations in which a conflict between their own
personal and/or financial interests and the company’s
interests may occur.
3.
Confidential information:
Employees or representatives
of the company possessing confidential information
related to the company shall conduct themselves and
safeguard such information with great care and loyalty
and comply with any and all signed confidentiality
statements.
4.
Anti-corruption:
NORBIT has zero-tolerance for any
form of corruption, bribery, fraud, or dishonesty. This
means that NORBIT has no tolerance for paying,
facilitating, or receiving any bribes or facilitation,
payments, extortion, kickbacks or any other improper
private or professional benefits to customers, agents,
contractors, suppliers or employees of any such party
or government officials. All NORBIT employees are
encouraged to report any incident of such behavior.
5.
Competition:
The company supports fair and open
competition. Employees and representatives shall never
take part in any activities that may constitute a breach
of competition legislation.
6.
Influence:
Employees and representatives shall neither
directly nor indirectly offer, promise, request, demand,
or accept illegal or unjust gifts of money or any other
remuneration in order to achieve a commercial benefit.
Whistleblowing is an important channel for receiving information
about negative issues so that they can be properly corrected
and followed up. NORBIT encourages its employees to report
suspected or actual occurrences of inappropriate, unethical,
or illegal events or breaches of the Code of Conduct. NORBIT
has therefore drawn specific guidelines for whistleblowing,
including whom to report to, how to report and how the
company is required to act on the report. There were no such
incidents reported in 2022.
In 2023, NORBIT will make several efforts to ensure that the
Code of Conduct is read, understood, and followed by all
employees. Examples include making a more easy-to-read and
practical guide to all employees, conduct trainings, as well
as ensuring that reading and accepting the Code of Conduct
is a part of all locations’ onboarding process. To ensure that
NORBIT’s values and ethical principles are understood by the
employees, we have also conducted several culture workshops
in 2022 – both on company and business unit level. We will
continue with regular culture workshops throughout 2023.
NORBIT ANNUAL REPORT 2022
55
CORPORATE GOVERNANCE
NORBIT aims to maintain a high standard of corporate governance. Good corporate governance
strengthens the confidence in the group and contributes to long-term value creation by regulating
the division of roles and responsibilities between shareholders, the board of directors and
executive management.
Corporate governance at NORBIT ASA (the “company”) shall
be based on the following main principles:
■
All shareholders shall be treated equally
■
NORBIT shall maintain open, relevant and reliable
communication with its stakeholders, including its
shareholders, governmental bodies and the public about
its activities
■
NORBIT’s board of directors shall be autonomous and
independent of the executive management
■
The majority of the directors shall be independent of
major shareholders
■
There shall be a clear division of roles and responsibilities
between shareholders, the board and management
NORBIT’s corporate governance principles are in accordance
with the Norwegian Accounting Act §3-3b and based on the
current Norwegian Code of Practice (the Code) for Corporate
Governance, most recently issued on 14 October 2021. The
Code is available at
www.nues.no
.
A review and presentation of NORBIT’s compliance with the
Code’s recommendations follow herein. NORBIT’s principles
are consistent with the recommendations.
1.
IMPLEMENTATION AND REPORTING ON
CORPORATE GOVERNANCE
NORBIT’s corporate governance principles are determined by the
board of directors (the “board”), which has the overall responsibility
for ensuring that the group has a high standard of corporate
governance. The board has prepared a corporate governance
policy document addressing the framework of guidelines and
principles regulating the interaction between the shareholders,
the board and the Chief Executive Officer (the CEO).
The purpose of the corporate governance policy is to ensure
appropriate separation of roles and responsibilities between
shareholders, the board and executive management, as well
as to ensure satisfactory controls of the group’s business
activities. The board and executive management perform an
annual assessment of its principles for corporate governance.
Deviations from the Code: None
2.
BUSINESS
NORBIT is a global company providing tailored technology to
selected applications. The business purpose is set out in the
company’s Articles of Association as:
"The company is the parent company of an internationally
focused technology group which provides custom-made
high-technology products in selected niche markets. This is
done through acquisition, management and trading in shares,
partnership interests and other securities."
The board has defined clear objectives, strategies and risk
profiles for the group, to ensure sustainable value creation
for the shareholders. The board evaluates the company’s
objectives, strategy and risk profiles at least yearly, and when
carrying out this work, the board takes into account financial,
REPORT ON THE NORWEGIAN CODE OF
PRACTICE FOR CORPORATE GOVERNANCE
NORBIT ANNUAL REPORT 2022
56
CORPORATE GOVERNANCE
social and environmental considerations. NORBIT’s ambition
is to contribute to sustainable development both by acting
responsibly in the group’s own operations (internal focus) and
by developing and selling products that contribute to solving
sustainability challenges for customers and the society at large
(external focus). Further details about this work can be found
in the sustainability section of this report.
NORBIT has set out an ambition to deliver organic revenues of
NOK 1.5 billion and an EBITDA margin above 25 per cent in 2024.
To realise the ambitions set, NORBIT will reinforce the elements
that have served the company well in the past, pursue selected
strategic initiatives and further capitalise on its global sales
and distribution platform. In addition, NORBIT will continue to
explore value-accretive acquisitions through defined criteria
to accelerate growth further, although remaining disciplined.
Deviations from the Code: None
3.
EQUITY AND DIVIDENDS
The board is committed to maintaining a satisfactory capital
structure for the group according to the group’s goals, strategy
and risk profile, thereby ensuring that there is an appropriate
balance between equity and other sources of financing. The
board regularly assesses the capital requirements related to
the group’s strategy and risk profile.
Equity
At 31 December 2022, the group’s equity was NOK 599.3
million, which corresponds to an equity ratio of 49 per cent.
The board considers NORBIT’s financial position to be solid
with the necessary capacity to support its objectives, strategy
and risk profile.
Dividends
The board has established a clear and predictable dividend
policy. Long term, the policy is to pay out between 30 and 50
per cent of the group’s ordinary net profit after tax as dividends.
When deciding on a dividend proposal, the board considers
the group’s financial position, investment plans as well as the
needed financial flexibility for strategic growth.
Based on the financial results for 2022, the board proposes
a dividend of NOK 0.70 per share, in line with the group’s
dividend policy.
Board authorisations
In the event that a board authorisation is proposed for a capital
increase, acquisition of treasury shares or similar, or for multiple
purposes, each authorisation should be treated as a separate
issue and subject to vote by the general meeting. Board
authorisations are valid for such periods as the shareholders’
meeting decides. Authorisations to the board to increase the
share capital or to buy own shares will normally not be given
for periods longer than until the next annual general meeting.
It follows from the purpose of the authorisations that the
board may need to waive existing shareholders’ preference
rights, which is permitted under the terms of the authorisations
concerned.
At the annual general meeting in 2022, the board was granted
the following authorisations:
■
To increase the company’s share capital by up to an
aggregate nominal value of 20 per cent of the total
share capital in connection with investments, mergers,
demergers and transactions
■
Increase in the company’s share capital by up to 2 per
cent of the share capital in connection with incentive
programs to the group’s employees
■
Acquisition of treasury shares by up 10 per cent of the
share capital on behalf of the company
All board authorisation are valid up until the next annual
general meeting which will be held on 4 May 2023.
In 2022, and based on the above authorisations, board resolved
to increase the company's share capital by NOK 6 112.90 in
connection with exercise of restricted stock units through the
issuance of 61 129 new shares, each with a par value of NOK
0.10. This represented 0.1 per cent of the total share capital
prior to the transaction.
The board also resolved to increase the company's share capital
by NOK 38 070.80, in connection with incentive share purchase
programs for employees, through the issuance of 380 708 new
shares, each with a par value of NOK 0.10. This represented
0.7 per cent of the total share capital prior to the transaction.
Following these share capital increases, the company's share
capital at 31 December 2022 is NOK 5 890 113.90, divided into
58 901 139 shares, each with a par value of NOK 0.10.
NORBIT ANNUAL REPORT 2022
57
CORPORATE GOVERNANCE
In connection with the exercise of restricted stock units and
simultaneous share issue to the executive management team,
the company repurchased 16 832 shares, less than 0.1 per cent
of the total share capital prior to the transaction
Deviations from the Code: None
4.
EQUAL TREATMENT OF SHAREHOLDERS
NORBIT has a single class of shares, and all shares carry the
same rights in the company. Equal treatment of shareholders is
essential in NORBIT’s corporate governance principles. In the
event of capital increases based on authorisations issued by the
general meeting, where the existing shareholders’ pre-emptive
rights are waived upon, the board will justify the reason for
such waiver through a public announcement in connection with
the capital increase.
Any transactions in the company’s own shares are carried out
through the stock exchange or at prevailing market price.
Deviations from the Code: None
5.
SHARES AND NEGOTIABILITY
NORBIT’s shares are freely tradeable and there are no
restrictions on owning or voting for shares. The shares are
registered in the Norwegian Central Securities Depository
(VPS). The company's registrar is DNB Markets. The shares
carry the securities number ISIN NO 0010856511.
Deviations from the Code: None
6.
GENERAL MEETINGS
Meeting notification, registration and participation
The general meeting is NORBIT’s highest decision-making body.
All shareholders have the right to participate in the general
meetings of the company and NORBIT encourages all of its
shareholders to participate. The annual general meeting for
2023 will take place on 4 May 2023.
Pursuant to article 8 of the company’s articles of associations,
shareholders who wish to participate in a general meeting,
shall notify the company of this within a deadline which is
set out in the notice of the general meeting. The cut-off for
confirmation of attendance shall be set as short as practically
possible.
Shareholders who are unable to physically attend a general
meeting have a right to request to attend electronically to vote
directly on individual agenda items. Shareholders unable to
attend may also submit their vote in advance of the meeting
or vote by proxy. The procedures for advance voting and for
providing proxy voting instructions will be described in the
meeting notification and published on the company website.
Shareholders may also send notification of their attendance,
using the form provided, by post or email to the company’s
account manager DNB, or via the company’s website,
www.
norbit.com
.
The full notice for general meetings shall be sent to the
shareholders no later than 21 days prior to the meeting. The
board will ensure that the notice includes information about
the proposed resolutions and that supporting information is
sufficiently detailed to allow shareholders to form a view on all
matters to be considered at the meeting. Notices shall provide
information on procedures that shareholders shall observe in
order to participate in and vote at the general meeting. The
notice should also set out: (i) the procedure for representation
at the meeting through a proxy, including a form to appoint a
proxy, and (ii) the right for shareholders to propose resolutions
in respect of matters to be dealt with by the general meeting.
The form for the appointment of a proxy should also be
designed to make voting on each individual matter possible.
In accordance with article 8 of the company’s articles of
association, documents relating to matters to be addressed
at a general meeting of shareholders shall be made available
on NORBIT’s website. The same applies to documents which
by law must be included in or attached to the invitation to
attend the general meeting. If the documents are made
available in this way, the statutory requirement with respect
to distribution to shareholders is not applicable. A shareholder
may nevertheless ask to be sent documents relating to matters
to be discussed at a general meeting by post.
Meeting chair and voting
The general meeting elects the person to chair the meeting. The
board and the chair of the nomination committee should attend
the general meetings. The company’s auditor is expected to
attend the general meetings when the matters to be dealt with
are of such nature that this is considered necessary.
The general meeting elects the members of the nomination
committee and shareholder elected directors.
NORBIT ANNUAL REPORT 2022
59
CORPORATE GOVERNANCE
Minutes of the general meeting will be published as soon as
practical via the Oslo Stock Exchange’s messaging service
www.newsweb.no
(ticker: NORBT) and on the company’s
website
www.norbit.com
.
Deviations from the Code: None
7.
NOMINATION COMMITTEE
NORBIT has a nomination committee as required by Article 7
of the company’s articles of association. On 4 May 2022, the
general meeting elected the following chair and members to
the nomination committee:
■
Reidar Stokke, chair
■
Berit Rian
■
Janniche Fusdahl
The general meeting determines the committee’s remuneration.
The guidelines for the nomination committee have been
approved by the general meeting. According to these
guidelines, the nomination committee should comprise at least
three members. The members of the nomination committee
should be selected to consider the interests of shareholders
in general, where the majority of the committee members are
independent of the board and the executive management team.
Members of the board or the executive management team shall
not be members of the nomination committee.
The primary responsibilities of the nomination committee are
to recommend and propose to the general meeting candidates
and remuneration for the company’s directors and nomination
committee, and remuneration to the members of any sub-
committees. The nomination committee should justify its
proposal, and the recommendation will include a proposal
for the appointment of the chair. The nomination committee
must make a written recommendation, which is published and
presented to the general meeting.
Proposal for board candidates should be communicated to the
chair of the nomination committee by sending an email to
reidar.
prior to 31 December.
Deviations from the Code: None
8.
BOARD OF DIRECTORS: COMPOSITION AND
INDEPENDENCE
Composition
NORBIT does not have a corporate assembly. According to
article 5 of the NORBIT’s articles of associations, the board
shall consist of a minimum of three and a maximum of seven
directors elected by the general meeting. The general meeting
elects the chair of the board and the deputy chair of the board.
Proposals for the election period by the nomination committee
to the general meeting should not exceed two years at a time,
with the possibility of re-election.
At 31 December 2022, NORBIT’s board comprised five members
in addition to a deputy director, all elected by the general
meeting based on the nomination committee’s proposal.
Two directors and the deputy director are up for election at
the general meeting in May 2023. The current composition
of the board is presented in this annual report and is also
available from the company’s website
www.norbit.com
. The
presentation includes an overview of the directors’ competence
and background, meeting attendance and whether they are
considered to be independent.
In its proposal to the general meeting, the nomination
committee shall consider that the board have the required
competency to independently evaluate the cases presented
by the executive management team as well as the company’s
operation. It is also considered important that the board can
function well as a body of colleagues.
Directors are encouraged to own shares in the company. At
31 December 2022, four of the five directors held shares in
NORBIT, further disclosed in note 26 to the financial statements.
Independence of the board
NORBIT’s board is composed such that it is able to act
independently of any special interests. The board does not
include members of the executive management. All the
directors of NORBIT are deemed to be independent of senior
executives, material business associates and the company’s
largest shareholders, although, Prétor Advokat, a Norwegian
law firm, in which the deputy director Tom Solberg is a partner,
renders legal services to the group in the ordinary course of
business. See section 11 for further information.
Deviations from the Code: None
NORBIT ANNUAL REPORT 2022
60
CORPORATE GOVERNANCE
9.
THE WORK OF THE BOARD OF DIRECTORS
The board has adopted guidelines for their work and for the
executive management. According to these guidelines, the
board shall ensure that the group has proper management
with a clear internal distribution of responsibilities and duties. A
clear division of work has been established between the board
and the executive management team. The CEO is responsible
for the executive management of the group.
The board has the overall responsibility for the management of
the group and the supervision of its day-to-day management
and business activities. The board prepares an annual plan
for its work with special emphasis on goals, strategy and
implementation. The board’s primary responsibility shall be (i)
participating in the development and approval of the group’s
strategy, (ii) performing necessary monitoring functions and (iii)
acting as an advisory body for the executive management team.
The board is also responsible for ensuring that the operation
of the group is compliant with the group’s values and ethical
guidelines. The chair of the board is responsible for ensuring that
the board’s work is performed in an effective and correct manner.
All members of the board regularly receive information about
the group’s operational and financial development. The group’s
strategies shall regularly be subject to review and evaluation
by the board.
According to the board’s instructions, any transactions,
agreements or arrangements between the company or group
entities and its shareholders, members of the board, members
of the executive management team or close associates of any
such parties may only be entered into as part of the ordinary
course of business and on arm’s length market terms. All such
transactions shall comply with the procedures set out in the
Norwegian Public Limited Liability Companies Act and be in
accordance with the recommendations of the Norwegian Code
of Practice for Corporate Governance.
The regulations governing the board’s working practices include
guidelines for how individual directors and the CEO should
conduct themselves with respect to matters in which they may
have a personal interest. Among them is the stipulation that
each director must make a conscious assessment of his/her
own impartiality and inform the board of any possible conflict
of interest on matters concerned at each board meeting.
The board shall consider whether a valuation should be
obtained from an independent third party unless the transaction,
agreement or arrangement in question is considered to be
immaterial or otherwise not cause any issues with respect
to whether the agreement is on arm's length market terms.
Directors and members of the executive management team
shall immediately notify the board if they have any material
direct or indirect interest in any transaction entered into by
the company.
Additional information on transactions with related parties can
be found in note 24 to the 2022 financial statement.
The board evaluates its own performance and expertise once
a year. The board held a total of 13 meetings in 2022 and the
attendance rate was 100 per cent.
Sub-committees of the board
Audit committee
Pursuant to the Norwegian Public Limited Liability Companies
Act and the listing rules of the Oslo Stock Exchange, the
company shall have an audit committee. The audit committee
is appointed by the board. At 31 December 2022, the audit
committee comprised the following:
■
Trond Tuvstein, chair
■
Bente Avnung Landsnes
The composition of the committee meets the requirements of
the Norwegian Public Limited Liability Companies Act and the
Code as regards to independence and competence.
The committee’s main responsibilities are governed by the
Norwegian Public Limited Liability Companies Act and the
instructions of the audit committee include the following tasks:
■
Prepare matters to be considered by the board and to
support the board in the exercise of its management and
supervisory responsibilities
■
Monitor and assess the quality of the statutory audit
■
Prepare the follow-up of the financial reporting process
for the board of directors, including assessing the quality
and make recommendations to secure process integrity
■
Monitor the performance and effectiveness of the group’s
internal control and risk management systems in relation
to the financial reporting process
■
Maintain an ongoing dialogue with the auditor
■
Review the independence and objectivity of the auditor
and ensure compliance with applicable rules and
guidelines regarding the provisions of additional services
rendered by the auditor
NORBIT ANNUAL REPORT 2022
61
CORPORATE GOVERNANCE
■
Prepare the company’s appointment of an external
auditor and submit its recommendation to the board
The audit committee held eight meetings in 2022. The
attendance rate was 100 per cent.
Remuneration committee
NORBIT has a remuneration committee appointed by the board.
At 31 December 2022, the remuneration committee comprised
the following:
■
Finn Haugan, chair
■
Bente Avnung Landsnes
■
Magnus Reitan
The committee’s main responsibilities are set out in the
instructions to the committee and includes in brief as follows:
■
Evaluate and review the executive management team’s
agreements, compensation, benefits, including goals and
objectives relevant to the compensation
■
Prepare for consideration matters relating to salary and
terms of the CEO to the board of directors
■
Assisting the CEO in determining the remuneration of the
other members of the executive management team
■
Prepare for consideration matter of principles and
guidelines for remuneration to the CEO and executive
management team, including propose recommendations
to the board, with respect to incentive compensation
plans and equity-based plans
■
Provide general compensation related advise to the board
The remuneration committee held four meetings in 2022. The
attendance rate was 100 per cent.
Deviations from the Code: None
10.
RISK MANAGEMENT AND INTERNAL CONTROL
The board shall ensure that NORBIT has sound internal control
and systems for risk management that are appropriate in
relation to the extent and nature of the group’s activities.
The objective of risk management and internal control is to
ensure the successful conduct of the group’s business and to
support the quality of its financial reporting.
The board shall carry out an annual review of the group’s most
important areas of exposure to risk and its internal control
arrangements.
The board shall provide an account in the annual report of
the main features of the group’s internal control and risk
management systems as they relate to the group’s financial
reporting.
Internal control of financial reporting is achieved through day-
to-day follow-up by management, and supervision by the audit
committee.
Deviations from the Code: None
11.
REMUNERATION OF THE BOARD OF DIRECTORS
Remuneration of directors shall be reasonable and reflect
the board's responsibilities, expertise, time invested and the
complexity of the business. Work in sub-committees may be
compensated in addition to the remuneration received for
board membership.
The general meeting shall determine the board’s remuneration
after considering recommendations by the nomination
committee. Information on remuneration determined by the
general meeting to the directors for the work performed in each
term is presented to the general meeting in the Remuneration
Report for 2022. The remuneration to the directors is not
performance-related nor include share option elements. The
board does not participate in incentive programs available to
employees in the group or any other share-based incentive
schemes.
The board shall be informed if individual directors perform tasks
for the company or any group entities other than exercising
their role as directors. The fee for any such services shall be
approved by the board. In 2022, deputy director Tom Solberg
performed legal services in the ordinary course of business for
the group through his employer Prétor Advokat. The service
fee to Prétor Advokat, in aggregate, is disclosed in note 24 to
the financial statements. The agreement and fee have been
reviewed and approved by the board of directors.
Deviations from the Code: None
NORBIT ANNUAL REPORT 2022
62
CORPORATE GOVERNANCE
12.
SALARY AND OTHER REMUNERATION FOR
EXECUTIVE PERSONNEL
Pursuant to Section 6-16a of the Public Limited Companies Act,
the board has adopted clear and understandable guidelines
for the remuneration of the executive management team. A
description of the guidelines has been presented to the general
meeting in the form of a separate document, and approved by
the shareholders.
The company’s remuneration principles shall be designed to
ensure responsible and sustainable remuneration decisions
that support the company’s business strategy, long-term
interests, and sustainable business practices. To this end,
salaries and other employment terms shall enable the company
to retain, develop and recruit skilled senior executives with
relevant experience and competence. The remuneration shall
be on market terms, competitive, and reflect the performance
and responsibilities of individual senior executives. A ceiling
has been set for performance-related remuneration.
Pursuant to Section 6-16b of the Public Limited Companies Act,
the board will prepare to the general meeting a Remuneration
Report which includes information on remuneration paid and
awarded to the executive management team in accordance
with the guidelines.
Deviations from the Code: None
13. INFORMATION AND COMMUNICATIONS
Investor relations
The company’s reporting of financial and other information is
based on transparency and equal treatment of shareholders,
the financial community and other interested parties. The
objective of the company’s investor relations activities is to
ensure that the financial markets and shareholders receive
accurate and timely information that can affect the company’s
share price. All market participants shall have access to the
same information, and all information is published in English.
All notices sent to the stock exchange are made available on
the company’s website and at
www.newsweb.no
.
NORBIT’s ambition is to comply with the Oslo Stock Exchange’s
Code of Practice for IR (“the IR Code”). The company has, in
line with the IR Code, also adopted an IR Policy. The CEO and
CFO are responsible for the communication with shareholders
in the period between general meetings.
Financial information
The company holds investor presentations in association with
the publication of its quarterly results. These presentations are
open to all and provide an overview of the group’s operational
and financial performance in the previous quarter, as well as
an overview of the general market outlook and group’s future
prospects. These presentations are also made available on
the company’s website.
Quiet period
NORBIT will minimise its contacts with analysts, investors and
media in the 30 days period prior to publication of its results.
This is to ensure that all interested parties in the market are
treated equally.
Deviations from the Code: None
14. TAKEOVERS
In a takeover process, should it occur, the board and the
executive management team each have an individual
responsibility to ensure that the company’s shareholders are
treated equally and that there are no unnecessary interruptions
to the group’s business activities. The board has a particular
responsibility in ensuring that the shareholders have sufficient
information and time to assess the offer.
In the event of a take-over process, the board shall ensure that
the following principles are complied with:
■
the board will not seek to hinder or obstruct any takeover
bid for the company’s operations or shares unless there
are particular reasons for doing so;
■
the board shall not undertake any actions intended to
give shareholders or others an unreasonable advantage
at the expense of other shareholders or the company;
■
the board shall not institute measures with the intention
of protecting the personal interests of its members at the
expense of the interests of the shareholders;
■
the board shall be aware of the particular duty it has for
ensuring that the values and interests of the shareholders
are protected; and
■
the main terms of the agreements entered into between
the company and the bidder that is material to the
market's evaluation of the bid are publicly disclosed no
later than at the same time as the announcement that the
bid will be made is published.
NORBIT ANNUAL REPORT 2022
63
CORPORATE GOVERNANCE
In the event of a takeover bid, the board will, in addition to
complying with relevant legislation and regulations, seek to
comply with the recommendations in the Code. This could
include obtaining a valuation and fairness opinion from an
independent expert. On this basis, the board shall draw up a
statement containing a well-grounded evaluation of the bid and
make a recommendation as to whether or not the shareholders
should accept the bid. The evaluation shall specify how, for
example, a takeover would affect long-term value creation
of NORBIT. Any transaction that is in effect a disposal of the
company’s activities should be decided by a general meeting.
Deviations from the Code: None
15. AUDITOR
The auditor is appointed by the general meeting. The auditor
makes an annual presentation of the auditing plan to the audit
committee. Further, the auditor provides the board with written
confirmation that the requirement of independence has been
met.
The auditor participates in all meetings of the audit committee
that concerns the quarterly accounts and annual audit, as well
as in the board meeting that deals with the annual accounts.
The auditor reports to the audit committee and board on the
assessment of the internal control on the financial reporting
process.
The auditor reviews, with the board and audit committee, any
material changes in the company’s accounting principles and
assessments of material accounting estimates. The outcome
of this review is presented to the board. There have been no
disagreements between the auditor and management on any
material issues in 2022.
The board and the audit committee have met with the auditor
without representatives of executive management being
present regarding the preparation of the annual accounts for
2022.
The board has adopted guidelines and authorisations for
ensuring compliance with applicable laws and regulations
concerning the rendering of non-audit services from the
appointed auditor. The audit committee is responsible for
monitoring compliance under the relevant policy. Non-
audit service assignments are either approved by the audit
committee or the CFO prior to engagement, depending on the
materiality of the assignment. The CFO and audit committee
receives at least once a year from the auditor a summary of
the services other than auditing that have been provided to
the group companies.
At the annual general meeting the board present a review of
the auditor’s compensation as paid for auditory work required
by law and remuneration associated with other specific
assignments. Compensation paid is presented in note 8 to
the financial statements.
The board shall arrange for the auditor to attend all general
meetings.
Deviations from the Code: None
FINANCIAL STATEMENTS 2022
NORBIT ANNUAL REPORT 2022
65
FINANCIAL STATEMENTS
NORBIT GROUP
NORBIT ASA
Consolidated statement of income
.........................................
66
Consolidated statement of other comprehensive income
.....
66
Consolidated statement of financial position
..........................
67
Consolidated statement of changes in equity
........................
68
Consolidated statement of cash flows
....................................
69
Notes to the consolidated financial statements
.....................
70
Note 01
Company information
.............................................................
70
Note 02
Basis for preparation and estimates and assumptions
.........
70
Note 03
Significant changes and future changes to
accounting policies
..................................................................
71
Note 04
Accounting principles
..............................................................
71
Note 05
Financial risk and exposure
....................................................
75
Note 06
Segment information
..............................................................
77
Note 07
Salaries, pension and social security costs
...........................
79
Note 08
Other operating expenses
......................................................
79
Note 09
Financial income and financial expenses
..............................
80
Note 10
Income tax expense
................................................................
80
Note 11
Earnings per share
..................................................................
82
Note 12
Property, plant and equipment and leases
...........................
83
Note 13
Goodwill and intangible assets
..............................................
84
Note 14
Inventories
..............................................................................
85
Note 15
Financial assets and financial liabilities
.................................
86
Note 16
Trade receivables
....................................................................
86
Note 17
Cash and cash equivalents
.....................................................
87
Note 18
Interest-bearing borrowings
..................................................
87
Note 19
Other current liabilities
...........................................................
88
Note 20
Capital management
..............................................................
88
Note 21
Business combinations
...........................................................
89
Note 22
Equity-accounted investees
....................................................
91
Note 23
Share capital and shareholder information
...........................
92
Note 24
Related parties
........................................................................
93
Note 25
Share-based arrangements
...................................................
94
Note 26
Remuneration to the board of directors and executive
management
...........................................................................
95
Note 27
Contingencies and claims
......................................................
97
Note 28
Government grants
.................................................................
97
Note 29
Events after the balance sheet date
......................................
97
Statement of income – NORBIT ASA
.......................................
99
Statement of financial position – NORBIT ASA
......................
100
Statement of cash flows – NORBIT ASA
................................
101
Notes to the financial statements – NORBIT ASA
..................
102
Note 01
Company information
...........................................................
102
Note 02
Accounting policies
...............................................................
102
Note 03
Revenues
...............................................................................
103
Note 04
Payroll expenses, number of employees and benefits
.......
103
Note 05
Tangible and intangible assets
............................................
104
Note 06
Other operating expenses
....................................................
104
Note 07
Financial income and financial expenses
............................
105
Note 08
Taxes
......................................................................................
105
Note 09
Equity
.....................................................................................
106
Note 10
Investments in subsidiaries and associated companies
......
107
Note 11
Restricted bank deposits
......................................................
108
Note 12
Receivables and liabilities
....................................................
108
Note 13
Forward contracts
.................................................................
108
Note 14
Transactions with related parties
.........................................
109
Auditor’s report
.......................................................................
110
Definitions of alternative performance measures
.................
116
NORBIT ANNUAL REPORT 2022
66
FINANCIAL STATEMENTS
|
NORBIT GROUP
CONSOLIDATED STATEMENT OF INCOME
Amounts in NOK million
Note
2022
2021
Revenue
4, 6
Other gains and losses
21
Raw materials and change in inventories
14
Employee benefit expenses
7, 26
Depreciation and amortisation expenses
12, 13
Other operating expenses
8
Operating profit
Share of profit of associates
22
(0.2 )
(0.3 )
Financial income
9
Financial expenses
9
Net financial items
(28.0 )
(9.8 )
Profit before tax
Income tax expense
10
(14.1 )
(15.9 )
Profit for the period
Attributable to:
Owners of the Company
Non-controlling interests
Total
Average no. of shares outstanding - basic
11
Average no. of shares outstanding - diluted
11
Earnings per share
Basic (NOK per share)
11
Diluted (NOK per share)
11
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
Amounts in NOK million
Note
2022
2021
Profit for the period
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
(3.2 )
Items that will not be reclassified to profit or loss
Changes in the fair value of equity investments at fair value through other comprehensive income
Other comprehensive income for the period, net of tax
(3.2 )
Total comprehensive income for the period
Total comprehensive income for the period is attributable to:
Owners of the Company
Non-controlling interests
(0.0 )
(0.0 )
Total
NORBIT ANNUAL REPORT 2022
67
FINANCIAL STATEMENTS
|
NORBIT GROUP
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Amounts in NOK million
Note
31.12.2022
31.12.2021
ASSETS
Property, plant and equipment
12
Intangible assets
13
Goodwill
13
Deferred tax asset
10
Equity-accounted investees
22
Shares in other companies
15
Other non-current assets
Total non-current assets
Inventories
14
Trade receivables
16
Other receivables and prepayments
Cash and cash equivalents
17
Total current assets
Total assets
LIABILITIES
Interest-bearing borrowings
18, 20
Lease liabilities
12
Deferred tax liabilities
10
Other non-current liabilities
Total non-current liabilities
Trade payables
5
Current tax liabilities
10
Interest-bearing borrowings
18, 20
Lease liabilities
12
Other current liabilities
19
Total current liabilities
Total liabilities
EQUITY
Share capital
23
Share premium
23
Retained earnings
23
Equity attributable to equity holders of the parent company
Non-controlling interests
Total equity
Total equity and liabilities
Trondheim, Norway, 29 March 2023
The board of directors and CEO, NORBIT ASA
Finn Haugan
Bente Avnung Landsnes
Christina Hallin
Chair of the board
Deputy chair of the board
Director
Trond Tuvstein
Magnus Reitan
Per Jørgen Weisethaunet
Director
Director
Chief executive officer
NORBIT ANNUAL REPORT 2022
68
FINANCIAL STATEMENTS
|
NORBIT GROUP
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to owners
Amounts in NOK million
Note
Share
capital
Share
premium
Retained
earnings
Total
Non-
controlling
interests
Total
equity
Balance at 31 December 2021
Profit for the period
Other comprehensive income
Total comprehensive income for the period
Transaction with owners in their capacity as owners:
Treasury shares
(0.5 )
(0.5 )
(0.5 )
Share issue
Dividends paid
20
(17.5 )
(17.5 )
(17.5 )
Total transactions with owners
(18.0 )
(6.8 )
(6.8 )
Balance at 31 December 2022
Attributable to owners
Amounts in NOK million
Note
Share
capital
Share
premium
Retained
earnings
Total
Non-
controlling
interests
Total
equity
Balance at 31 December 2020
Profit for the period
Other comprehensive income
(3.2 )
(3.2 )
(3.2 )
Other changes in equity
(0.4 )
Total comprehensive income for the period
(0.4 )
Transaction with owners in their capacity as owners:
Share issue
Dividends paid
20
(17.0 )
(17.0 )
(17.0 )
Total transactions with owners
(17.0 )
Balance at 31 December 2021
NORBIT ANNUAL REPORT 2022
69
FINANCIAL STATEMENTS
|
NORBIT GROUP
CONSOLIDATED STATEMENT OF CASH FLOWS
Amounts in NOK million
Note
2022
2021
Profit for the period
Adjustments for:
Income tax expense recognised in profit or loss
10
Income taxes paid
10
(10.9 )
(0.4 )
Share of profit of associates
22
Gain on disposal of interest in former associate
(1.2 )
Depreciation and amortisation
12, 13
Movements in working capital:
(Increase)/decrease in trade receivables
(11.0 )
(24.9 )
(Increase)/decrease in inventories
(161.3 )
(91.2 )
Increase/(decrease) in trade payables
Increase/(decrease) in accruals
Net cash generated by operating activities
Cash flows from investing activities
Payments for property, plant and equipment
12
(31.5 )
(29.0 )
Reclassified from inventory to property, plant and equip.
12
(10.5 )
Payments for intangible assets
13
(60.5 )
(51.2 )
Net cash inflow on acquisition of subsidiaries
21
(3.1 )
(126.9 )
Net cash (used in)/generated by investing activities
(91.9 )
(217.6 )
Cash flows from financing activities
Payment for share buy-back costs
(0.5 )
Proceeds from issue of equity instruments of the company
Proceeds from borrowings
18
Repayment of borrowings
18
(39.4 )
(7.4 )
Repayment of lease liabilities
12
(10.0 )
(8.2 )
Net change in overdraft facility
18
Dividends paid
20
(17.5 )
(17.0 )
Net cash (used in)/generated by financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
NORBIT ANNUAL REPORT 2022
70
FINANCIAL STATEMENTS
|
NORBIT GROUP
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Company information
on the Oslo Stock Exchange with the ticker “NORBT”.
The consolidated financial statements of NORBIT ASA for the year ended
December 31, 2022 incorporate the financial statements of the parent com-
pany NORBIT ASA and its subsidiaries (collectively referred to as the “group”
Basis for preparation and estimates and assumptions
The consolidated financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS) and interpretations
by the IFRS Interpretation Committee (IFRIC), as adopted by the EU, as well
as additional Norwegian reporting requirements pursuant to the Norwe-
gian Accounting Act.
The consolidated financial statements for 2022 were approved and author-
ised for issue by the board of directors on 29 March 2023. The consolidated
financial statements will be submitted to NORBIT’s annual general meeting,
The consolidated financial statements have been prepared on the assump-
BASIS FOR MEASUREMENT
The consolidated financial statements have been prepared on the basis of
the historical cost principle, with the following modifications:
■
Derivative financial instruments are measured at fair value
■
Fair value of share-based payments (IFRS 2), see note 25.
The consolidated financial statements are presented in Norwegian kroner
(NOK), which is the functional currency of NORBIT ASA and the Norwegian
subsidiaries in the group. Foreign subsidiaries operate with local currency
as the functional currency.
Financial information presented in NOK has been rounded to the nearest
million with one decimal, except when otherwise stated. As a result of
rounding differences, amounts and percentages may not add up to the total.
The results and financial position of group companies whose functional
currency is different from the presentation currency (NOK) are translated
to NOK in the following way:
■
Balance sheet items are translated using the exchange rates at the
balance sheet date
■
Profit and loss items are translated at average exchange rates for the
reporting period
■
All resulting exchange differences are recognised in other
USE OF ESTIMATES AND JUDGMENTS
The preparation of annual financial statements in conformity with IFRS
requires management to make judgements, estimates and assumptions
that affect the reported amounts of assets and liabilities, income and
expenses. Although management believes these assumptions to be rea-
sonable, given historical experience, actual amounts and results could differ
from these estimates. Estimates and underlying assumptions are reviewed
and assessed on an on-going basis. Changes to accounting estimates are
recognised in the period in which the estimates are revised and in future
periods if affected.
Estimates and assumptions that could have a significant impact on the
carrying amount of assets and liabilities within the next financial year are
discussed below.
Impairment testing of intangible assets
In accordance with applicable accounting principles, the group consid-
ers whether there are indications of impairment on the carrying amounts
for the intangible assets. If such indications exist, an impairment test is
performed to determine whether any intangible assets recorded in the
balance sheet should be impaired. The value in use can be significantly
impacted by market conditions. Evaluating whether an asset is impaired
or if an impairment should be reversed, requires a high degree of judg-
ment and may to a large extent depend upon the selection of key future
assumptions, including determining appropriate cash-generating units,
discount rate, projecting future cash flows and assumptions on future
market conditions. Reference is made to note 13 for further information.
Impairment testing of goodwill
In accordance with applicable accounting principles, the group performs
impairment testing of goodwill annually, or more frequently if any indica-
tions of impairment on the goodwill exist. The estimated recoverable value
for the cash-generating units is determined based on the higher of its fair
value less cost of disposal or value in use. Value in use is estimated based
on a present value of the future cash flows expected to be derived from the
cash-generating units. These calculations require management to estimate
future cash flows and discount rate, including assumptions on future mar-
ket conditions, all of which involves a high degree of judgment. Reference
is made to note 13 for further information.
FINANCIAL STATEMENTS
|
NORBIT GROUP
NORBIT has exposure to a diversified and fragmented customer base, of
which a majority is international. Thus, the group is exposed to credit risk
on its trade receivables. The group applies the IFRS 9 simplified approach to
measuring expected credit losses. This assessment involves a high degree
of judgment, particularly relating to assessing scenario probabilities. Ref-
Warranty provisions
A provision is made for expected warranty expenditures for the group com-
panies. The warranty period is generally 12 to 24 months, while some clients
have purchased extended warranties. The level and duration of warranty
provisions are based on historical data. Assessing and determining the
potential warranty expenditures requires a high degree of judgment.
Provision for obsolete inventory
The group makes provision for obsolescence of inventory. These provisions
are based on an assessment of the age distribution of inventory items and
whether the goods are part of an active or expired product range. A provi-
sion for obsolescence is made when the net realisable value of the good is
lower than the cost of the good. These provisions are estimate-based and
require in-depth knowledge about goods and markets.
Climate risk
NORBIT evaluates the overall climate risk to be low. Hence, climate-re-
lated matters are not expected to substantially affect assets, provisions
or future cash-flows.
The Task Force on Climate Related Financial Disclosure's (TCFD) defines
three main types of climate related risks; physical risk, risk associated with
transition to a low carbon community, and lastly liability risk. NORBIT’s main
physical risk factors are identified to be rising sea levels, changes in hydro
power availability, and power outages and transport challenges due to
extreme weather events. As NORBIT's main physical assets are located in
Norway, and the Norwegian government has risk mitigation measures and
emergency response plans in the event of such acute or chronic incidents,
the consequences, and hence, physical risk is currently considered low.
The transition risk is evaluated more as an opportunity rather than a risk,
as NORBIT delivers solutions relevant for the green transition, for instance
related to electrification and digitalisation. Lastly, the liability risk is con-
sidered low as the industries NORBIT operates in are not heavily exposed
Significant changes and future changes to accounting policies
The group did not apply any amendments to the standards that were effec-
tive for the current year as such standards did not have any material impact
on the amounts reported in the financial statements. The group has chosen
not to adopt early any standards, interpretations or amendments that have
been issued but are not yet effective as these changes are not expected to
Accounting principles
The accounting principles presented below have been applied consistently
for the reporting period and for the group companies presented in the con-
solidated financial statements.
GROUP ACCOUNTING AND CONSOLIDATION PRINCIPLES
Subsidiaries are all entities over which the group has control. The group
controls an entity when the group is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect
those returns through its power over the entity. Subsidiaries are consoli-
dated from the date on which control is transferred to the group until the
Associates are all entities over which the group has significant influence,
but which is not a subsidiary nor a joint arrangement. Significant influence
is the power to participate in the financial and operating policy decisions
of the investee, without having control or joint control of these policies.
This is generally the case where the group holds between 20 and 50 per
cent of the voting rights.
Investments in associates are accounted for using the equity method of
accounting, after initially being recognised at cost. Subsequent to initial
recognition, the consolidated financial statements include the group’s share
of the profit and loss and OCI of the associate, until the date on which
significant influence ceases to exist. Share of profit or loss of the equi
-
ty-accounted associate is reported as part of net financial items in the
consolidated accounts.
Dividends received from associates are presented as part of net cash flow
from operating activities in the statement of cash flows. Received dividends
Business combinations are accounted for using the acquisition method
at the acquisition date, which is the date when control is transferred to
the group. The consideration given is measured at the fair values of the
assets transferred, the equity instruments that have been issued, liabilities
assumed on the transfer of control and direct costs relating to the actual
purchase. The cost of acquisition also includes the fair value of all assets or
liabilities that are the result of an agreement on contingent consideration.
Identifiable assets acquired and liabilities and contingent liabilities assumed
in a business combination are measured initially at their fair values at the
acquisition date. The costs associated with the business combination are
expensed when they are incurred.
If the aggregate of the consideration transferred, the carrying amount of
non-controlling interests and the fair value on the acquisition date of any
previously held ownership interests exceeds the fair value of the acquired
entity’s identifiable net assets, the difference is capitalised as goodwill. If
72
FINANCIAL STATEMENTS
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NORBIT GROUP
the aggregate is less than the company’s net assets, the difference is imme-
diately recognised in profit or loss as a bargain purchase.
Contingent consideration is classified either as equity or a financial liability.
Amounts classified as a financial liability are subsequently remeasured to
Intra-group balances and transactions, and any significant unrealised gains
and losses or income and expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial statements. Unreal-
ised gains arising from transactions with associated and joint ventures are
Foreign currency transactions are translated into each group company’s
functional currency using the exchange rates at the dates of the transac-
tions. Monetary assets and liabilities in foreign currencies are translated
into the group company’s functional currency using the exchange rate on
the balance sheet date. Foreign exchange gains and losses resulting from
the settlement of such transactions and from the translation of monetary
assets and liabilities denominated in foreign currencies other than NOK are
recognised in the income statement under net financial items.
Non-monetary assets and liabilities that are measured at fair value in a
foreign currency are translated to the functional currency at the exchange
rates on the date the fair value is determined. Translation differences on
assets and liabilities carried at fair value are reported as part of the fair
The core principle of IFRS 15 is that an entity should recognise revenue to
depict the transfer of promised goods or services to customers in an amount
that reflects the consideration to which the entity expects to be entitled
in exchange for those goods or services. The group recognises revenue
when (or as) a performance obligation is satisfied, that is when 'control' of
the goods or services underlying the particular performance obligation is
transferred to the customer.
The majority of revenue for the group relates to sale of goods where the
control is transferred to the customer at a point in time, depending on the
contracted delivery terms. There is only one performance obligation in each
contract and no variable consideration.
For the revenue that is recognised over time, the group is using cost incurred
compared to total expected cost (cost to cost) as a measure of progress. The
contracts usually consist of only one performance obligation and there are
no significant variable components in the transaction price.
Sale of goods
The group manufactures and sells a range of electronic equipment in the
industrial market. Sales are recognised when control of the products has
transferred, being when the products are delivered to customer, the cus-
tomer has full discretion over the channel and price to sell the products, and
there is no unfulfilled obligation that could affect the customer’s acceptance
of the products. Delivery occurs when the products have been shipped to
the specific location, the risks of obsolescence and loss have been trans-
ferred to the customer, and either the customer has accepted the prod-
ucts in accordance with the sales contract, the acceptance provisions have
lapsed, or the group has objective evidence that all criteria for acceptance
have been satisfied.
A receivable is recognised when the goods are delivered as this is the point
in time that the consideration is unconditional because only the passage of
time is required before the payment is due.
Sale of services
Revenue from providing services is recognised in the accounting period
in which the services are rendered. For fixed-price contracts, revenue is
recognised based on the actual service provided to the end of the report-
ing period as a proportion of the total services to be provided, because
the customer receives and uses the benefits simultaneously. This is deter-
mined based on the actual cost spent relative to the total expected costs.
Some contracts include multiple deliverables, such as the sale of hardware
and related installation services. Where the contracts include multiple per-
formance obligations, the transaction price will be allocated to each perfor-
mance obligation based on the stand-alone selling prices. Where these are
not directly observable, they are estimated based on expected cost plus
margin. If contracts include the installation of hardware, revenue for the
hardware is recognised at a point in time when the hardware is delivered,
the legal title has passed and the customer has accepted the hardware.
Estimates of revenues, costs or extent of progress toward completion are
revised if circumstances change. Any resulting increases or decreases in
estimated revenues or costs are reflected in profit or loss in the period in
which the circumstances that give rise to the revision become known by
management.
In the case of fixed-price contracts, the customer pays the fixed amount
based on a payment schedule. If the services rendered by the group exceed
the payment, a contract asset is recognised. If the payments exceed the
services rendered, a contract liability is recognised.
Financing components
In contracts where the period between the transfer of the promised goods
or services to the customer and payment by the customer exceeds one year,
For defined contribution plans, contributions are paid into pension insur-
ance plans. Contributions to defined contributions plans are charged to the
Government grants are recognised where there is reasonable assurance
that the grant will be received and all attached conditions will be complied
with. Government grants are recognised at the value of the contribution at
the transaction date. Government grants are either accounted for as reduc-
tion of expenses, or intangible assets if a grant is related to research and
Financial income and financial expenses comprise interest income and
expense on borrowings, foreign exchange gains and losses, dividend
income, gains and losses on derivatives and change in the fair value of
financial assets at fair value through the income statement. Foreign cur-
Income tax recognised in the income statement comprises current and
deferred tax. Income tax is recognised in the income statement except
to the extent that it relates to items recognised directly in equity or other
comprehensive income.
FINANCIAL STATEMENTS
|
NORBIT GROUP
Current income tax is the expected tax payable on the taxable income for the
year, using tax rates enacted or substantially enacted at the balance sheet
date, and any adjustment to the tax payable in respect of previous years.
Deferred tax is recognised, using the liability method, in respect of tempo-
rary differences between the carrying amounts of assets and liabilities for
financial reporting and the amounts used for taxation purposes. Deferred
tax is not recognised for:
■
Goodwill not deductible for tax purposes
■
The initial recognition of assets and liabilities in a transaction that
is not a business combination and that affect neither accounting nor
taxable profit
■
Temporary differences relating to investments in subsidiaries, if it is
probably that they will not reverse in the foreseeable future
Deferred income tax is determined using tax rates (and laws) that have
been enacted or substantially enacted at the balance sheet date and are
expected to apply when the related deferred income tax asset is realised
or the deferred income tax liability is settled.
Deferred tax assets and liabilities are offset if:
■
There is a legally enforceable right to offset current tax assets and
liabilities
■
They related to income taxes levied by the same taxation authority on
the same taxable entity, or on different taxable entities which intend
either to settle current tax liabilities or assets on a net basis, or to
realise the tax assets and settle the liabilities simultaneously.
Deferred tax assets are recognised if it is probable that future taxable profits
An asset is classified as current when it is expected to be realised or is
intended for sale or consumption in the group’s normal operating cycle, it
is held primarily for the purpose of being traded, or it is expected/due to
be realised or settled within twelve months after balance sheet date. Other
A liability is classified as current when it is expected to be settled in the
group’s normal operating cycle, is held primarily for the purpose of being
traded, the liability is due to be settled within twelve months after the bal-
ance sheet date, or if the group does not have an unconditional right to
defer settlement of the liability for at least twelve months after the report-
ing period. All other liabilities are classified as non-current.
An item of property, plant and equipment is recognised as an asset if it is
probably that the future economic benefit associated with the assets will
flow to the group, and its cost can be reliably measured. Property, plant
and equipment is stated at historical cost less accumulated depreciation
and impairment losses. Historical cost includes expenditure directly attrib-
utable to the asset’s acquisition.
When significant parts of an item of property, plant and equipment have dif-
ferent useful lives, major components are accounted for as separate items.
Gains and losses on disposals are determined by comparing proceeds with
carrying amount. These are included in the income statement. An asset’s
carrying amount is written down immediately to its recoverable amount
if the asset’s carrying amount is greater than its estimated recoverable
amount.
Subsequent costs
Subsequent costs are included in the asset’s carrying amount or recognised
as a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the group and the
cost of the item can be measured reliably. The carrying amount of any com-
ponent accounted for as a separate asset is derecognised when replaced.
All other repairs and maintenance are charged to the income statement
during the reporting period as incurred.
Depreciation is recognised in the income statement on a straight-line basis
over the estimated useful life of each major component of an item of prop-
erty, plant and equipment, taking residual value into consideration. Depreci-
ation methods, useful lives and residual values are reviewed at each balance
sheet date. The depreciation methods and periods used by the group are
Development activities involve a plan or design for the production of new
or substantially improved products and processes. Development expendi-
ture is capitalised only if development costs can be measured reliably, the
product and process is technically and commercially feasible, future eco-
nomic benefits are probable, and the group intends to and has sufficient
resources to complete development and to use or sell the asset.
The capitalised expenditure includes cost of materials, direct labour costs
and operating expenses that are directly attributable to developing and
preparing the asset for its intended use. Other development expenditures
are recognised in the income statement as an expense in the period in
which it occurs.
Capitalised development expenditures are recognised at historic cost less
accumulated amortisation and impairment losses. Acquired intangible
assets is measured following the same principle.
Amortisation is recognised in the income statement on a straight-line basis
over the estimated useful lives of the intangible assets unless such useful
lives are indefinite. Intangible assets are amortised from the day they are
available for use. The amortisation methods and periods used by the group
Goodwill acquired in a business combination represents cost price of the
acquisition in excess of the net fair value of identifiable net assets in the
acquired entity at the time of acquisition. Goodwill is recognised initially
at cost and subsequently measured at cost less accumulated impairment
losses.
Inventory is stated at the lower of cost and net realisable value. Cost is
determined by the first-in first-out (FIFO) method or the weighted average
cost formula. The cost of purchased inventory is determined after deducting
rebates and discounts. Net realisable value is the estimated selling price
in the ordinary course of business less the estimated costs of completion
The group classifies its financial assets in the following measurement cat-
egories:
74
FINANCIAL STATEMENTS
|
NORBIT GROUP
■
Those to be measured subsequently at fair value (either through OCI
or through the income statement), and
■
Those to be measured at amortised cost
The classification depends on the entity’s business model for managing the
financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded
in the income statement or OCI. For investments in equity instruments that
are not held for trading, this will depend on whether the group has made an
irrevocable election at the time of initial recognition to account for the equity
investment at fair value through other comprehensive income (FVOCI).
Regular way purchases and sales of financial assets are recognised on
trade-date, the date on which the group commits to purchase or sell the
asset. Financial assets are derecognised when the rights to receive cash
flows from the financial assets have expired or have been transferred and
the group has transferred substantially all the risks and rewards of own-
Trade receivables are amounts due from customers for goods sold or ser-
vices performed in the ordinary course of business. They are generally due
for settlement within 30-60 days and are therefore classified as current.
Trade receivables measured at fair value upon initial recognition, and there-
after at amortised cost, less allowance made for credit losses. The interest
rate element is disregarded if insignificant, which is the case for the vast
Cash and cash equivalents consist of bank deposits on call with financial
institutions and other short-term, highly liquid investments with original
Trade payables are recognised at the original invoiced amount. Other pay-
able are recognised initially at fair value. Trade and other payables are val-
ued at amortised cost using the effective interest rate method. The interest
rate element is disregarded if it is insignificant, which is the case for the
Interest-bearing borrowings are recognised initially at fair value, net of
transaction costs incurred. Subsequent to initial recognition, interest-bear-
ing borrowings are measured at amortised cost with any difference between
cost and redemption value being recognised in the income statement over
The carrying amount of the groups non-financial assets (other than deferred
tax assets and inventory) are reviewed at the end of each reporting period
to determine whether there is any indication of impairment. If an indication
of impairment exists, the asset’s recoverable amount is estimated. Intan-
gible assets with an indefinite useful life and intangible assets that are not
yet available for use are tested for impairment annually, or more frequently
if events or changes in circumstances indicate that they might be impaired.
For the purposes of impairment testing, assets are grouped together into
the smallest group of assets that generates cash inflows from continuing
use that are largely independent of the cash inflows from other assets or
groups of assets (cash-generating units).
An impairment loss is recognised for the amount by which the asset's carry-
ing amount exceeds its recoverable amount and recognised in the income
statement. The recoverable amount is the higher of an asset's fair value
less costs of disposal and value in use. In assessing value in use, the esti-
mated future cash flows are discounted to their present value using a pre-
tax discount rate that reflects the current market assessments of the time
value of money and the risks specific to the asset.
An impairment loss on goodwill is not reversed. For assets other than good-
will, an impairment loss is reversed if there has been a change in the esti-
mates used to determine the recoverable amount. An impairment loss is
reversed only to the extent that the asset’s carrying amount does not exceed
the carrying amount, net of depreciation or amortisation, calculated as if
The group assesses on a forward-looking basis the expected credit losses
associated with its debt instruments carried at amortised cost and FVOCI.
The impairment methodology applied depends on whether there has been
a significant increase in credit risk.
There are mainly trade receivables that are subject to the expected credit
loss model in IFRS 9. For trade receivables, the group applies the simplified
approach permitted by IFRS 9, which requires expected lifetime losses to
be recognised from initial recognition of the receivables. Trade receivables
are grouped based on shared credit risk characteristics and days past due.
Expected losses are primarily calculated through an individual and specific
assessment of each customer / receivable. The assessment is carried out by
senior staff in the group's finance department in dialogue with the manage-
ment of the operating segments. For trade receivables that are more than
90 days past due date, a scenario analysis is performed. The scenario anal-
ysis includes scenarios for (i) the client's bankruptcy, (ii) the client executes
A provision is recognised when the group has a present obligation as a
result of a past event that can be estimated reliably and it is probable that
the group will be required to settle the obligation. If the effect is material,
provisions are determined as the present value of expected future cash
flows, discounted by a market based pre-tax discount rate.
Warranty provisions are made for expected future expenses related to deliv-
ered products and services. The provisions are based on historic data of
The group applies IFRS 16 and its leasing agreements primarily consist of
rent of office premises and manufacturing equipment with various lease
terms and conditions.
Upon entering into a contract, an assessment is made of whether an agree-
ment contains a lease arrangement entitling the group to control the use of
an identified asset. If the lease is identified as such, assets and associated
liabilities are recognised at the start of the lease. The group determines
the lease term as the non-cancellable term of the lease, together with any
periods covered by an option to extend the lease if it is reasonably certain
to be exercised, or any period covered by an option to terminate the lease if
it is reasonably certain to be exercised. Lease payments for the first twelve
month following the balance sheet date is classified as current liabilities.
FINANCIAL STATEMENTS
|
NORBIT GROUP
Right-of-use assets
The group recognises right-of-use asset at the lease commencement date.
The right-of-use asset is initially measured at cost, and subsequently at cost
less any accumulated depreciation and impairment losses and adjusted
for certain remeasurements of the lease liability. The cost of right-of-use
asset includes the amount of lease liability recognised, initial direct costs
incurred and lease payments made at or before the commencement date,
less any lease incentives received. The right-of-use asset is depreciation
on a straight-line basis over the shorter of the asset’s estimated useful
life and the lease term and is subject to impairment assessment of non-fi-
nancial assets.
Lease liabilities
The lease liability is initially measured at the present value of the lease
payment that are not paid at the commencement date, discounted using
the interest rate implicit in the lease or, if that rate cannot be readily deter-
mined, the group’s incremental borrowing rate as the discount rate. The
lease payments include fixed payments and variable lease payments that
depend on an index or rate.
The lease liability is subsequently increased by the interest cost on the
lease liability and decreased by the lease payment made. It is remeasured
when there is a change in future lease payments arising from a change in
an index or rate, or as appropriate, changes in the assessment of whether
an extension option is reasonably certain to be exercised or a termination
option is reasonably certain not to be exercised.
Short-term leases and lease of low value assets
The group applies the recognition exemption to its leases that have a lease
term of 12 months or less from the commencement date and do not con-
tain a purchase option. The group also applies recognition exemption to
leases that are considered low-value assets, mainly IT and office equipment.
Lease payments associated with short-term leases and low-value assets are
Dividends are recorded in the group’s consolidated financial statement in
Financial risk and exposure
NORBIT is exposed to different types of financial risk, including interest-,
currency-, credit-, and liquidity risks. The group’s finance department is
responsible for carrying out the policies and guidelines for financial risk
management approved by the board.
INTEREST RATE RISK
The group’s main interest rate risk arises from long-term borrowings with
variable rates, which expose the group to cash flow interest rate risk. NOR-
BIT has no financial instruments related to hedging of interest rates.
Trade and other receivables and trade and other payables are interest free
and with a term of less than one year, hence there is no interest rate risk
associated with these financial assets and liabilities.
The following table shows the group's sensitivity to potential changes in
interest rates. The calculation takes into account all interest-bearing finan-
cial instruments. The calculation in the table shows the effect based on
interest-bearing financial instruments at the balance sheet date.
Interest rate exposure
Amounts in NOK million
Impact on pre-tax profit
2022
Impact on pre-tax profit
2021
Interest rates - increase by 100 basis points *
(3.4)
(2.9)
Interest rates - decrease by 100 basis points *
3.4
2.9
*) Ceteris paribus
NORBIT has international operations and clients and is exposed to currency
risk through customer contracts and purchase of products and services in
currencies other than the functional currency (NOK). NORBIT is primarily
exposed to EUR and USD currencies.
The group’s exposure to foreign currency risk, expressed in NOK million, at
the end of the reporting period is set out in the table below.
Foreign exchange exposure:
Amounts in NOK million
31.12.2022
31.12.2021
Receivables
170.5
146.4
Payables
(101.2)
(67.5)
Bank deposits
34.5
11.7
Overdraft facility*
35.9
54.2
Sellers credit
(32.6)
(60.2)
Net position
107.1
84.6
*
NORBIT has a multi-currency overdraft facility (EUR, USD, GBP and NOK). The over-
draft facility is shown net in the consolidated financial statements. At 31 December
2022, the USD, EUR and GBP balance on the overdraft facility was NOK 35.9 mil-
lion (i.e. net cash).
76
FINANCIAL STATEMENTS
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NORBIT GROUP
Financial assets and liabilities – net foreign exchange exposure by major currencies:
31.12.2022
31.12.2021
Currency
NOK
Currency
NOK
USD
(0.1)
(1.2)
(1.5)
(13.6)
EUR
8.0
84.6
8.0
79.4
GBP
0.8
10.0
0.6
7.2
HUF
522.8
13.7
602.1
16.3
PLN
0.8
1.8
0.6
1.4
SEK
(2.0)
(1.9)
(2.7)
(2.7)
DKK
0.5
0.7
0.3
0.4
JPY
(21.5)
(1.6)
(52.3)
(4.2)
Other
1.0
0.5
Net position
107.1
84.6
Fluctuations in exchange rates can lead to increased or decreased profit
margin in contracts with customers compared to the initial project calcu-
lus. The group was a net seller of EUR and a net buyer of USD during 2022.
The group rebalances the short-term (within 90 days) main currency expo-
sures on a monthly basis in order to have a neutral currency position on
trade receivables, trade payables and cash deposits.
There were no derivatives outstanding at 31 December 2022 or at 31
December 2021. There is currently an ongoing process to optimise foreign
exchange hedging through the use of derivatives.
Derivatives, if any, are only used for economic hedging purposes and not
as speculative investments. However, the group’s hedging policy does
not meet the hedge accounting criteria. Hence, they are classified as ‘held
for trading’ for accounting purposes and are accounted for at fair value
through profit or loss. They are presented as current assets or liabilities to
the extent they are expected to be settled within 12 months after the end
Fair value measurements of foreign currency contracts, if any, are based
on Marked to Market reports from leading Norwegian currency traders,
Credit risk is the risk that one party to a financial instrument will cause a
financial loss for the other party by failing to discharge an obligation. The
group is exposed to credit risk related to cash and cash equivalents, trade
receivables and other current receivables. The exposure to credit risk is
monitored on an ongoing basis within the group.
Cash and cash equivalents
Cash deposits are held with reputable banks with strong credit-ratings.
Based on their credit ratings, management does not expect any of these
financial institutions to fail to meet their obligations.
Trade receivables
The group has inherent credit risk through the fact that a client may not be
able to meet its obligations under a contract. The group applies the IFRS 9
simplified approach to measuring expected credit losses which uses a life-
time expected loss allowance for all trade receivables. Reference is made
Liquidity risk is the risk that the group is unable to meet the obligations
associated with its financial liabilities. For NORBIT, liquidity risk is managed
by maintaining sufficient cash deposits and available committed credit lines
that the group can draw on to meet its obligations as they occur. NORBIT
has a centrally managed multi-currency cash pool arrangement where most
subsidiaries are connected. The liquidity trend is monitored frequently, sup-
ported by budgets and forecasts.
At 31 December 2022, NORBIT had NOK 439.4 million in undrawn credit
facilities, providing a solid liquidity buffer.
Maturities of financial liabilities
The table below provides an overview of the maturity profile of all finan-
cial liabilities. For interest-bearing borrowings the stated amount of con-
tractual cash flows is including estimated interest payments. Other items
are stated at booked amounts. In cases where the counterparty may claim
earlier redemption, the amount is placed in the earliest period the payment
may be required from the counterparty.
FINANCIAL STATEMENTS
|
NORBIT GROUP
Contractual maturities of financial liabilities at 31 December 2022
Amounts in NOK million
Less than 1 year
Between 1 year
and 5 years
Over 5 years
Total contractual
cash flows
Carrying amount
(assets) / liabilities
At 31 December 2022
Trade payables
132.6
0.0
0.0
132.6
132.6
Interest-bearing borrowings
197.0
162.6
1.3
360.8
337.4
Lease liabilities
11.8
24.0
0.0
35.8
35.8
Other payables
63.0
0.0
0.0
63.0
63.0
Total
404.4
186.6
1.3
592.3
568.9
Contractual maturities of financial liabilities at 31 December 2021
Amounts in NOK million
Less than 1 year
Between 1 year
and 5 years
Over 5 years
Total contractual
cash flows
Carrying amount
(assets) / liabilities
At 31 December 2021
Trade payables
100.2
0.0
0.0
100.2
100.2
Interest-bearing borrowings
132.1
164.1
6.0
302.3
288.2
Lease liabilities
8.5
6.5
0.0
15.0
15.0
Other payables
40.0
0.0
0.0
40.0
40.0
Total
280.7
170.7
6.0
457.4
Segment information
Description of segments and principal activities
NORBIT ASA is organised in three operating segments; Oceans, Connectiv-
ity and Product, Innovation & Realization (PIR). The operating segments are
aligned with the internal reporting and the operating segments are compo-
nents of the group that are evaluated regularly by the management team.
The Oceans segment delivers tailored technology solutions to global mar-
itime markets, and the Connectivity segment is a leading supplier of solu-
tions for asset identification, monitoring and tracking. The third segment,
PIR, provides R&D products and services and contract manufacturing to
key customers.
Oceans encompasses all NORBIT’s knowledge and competence targeting
the global maritime markets, including proprietary technology and solu-
tions. The business unit offers ultra-compact sonars for a range of special
applications including seabed mapping and hydrography. The segment
has further developed proprietary solutions and software for maritime and
environmental monitoring. NORBIT is continuously working on expanding
its offering in selected niches.
The Connectivity segment enables clients to digitise their operations
through data collection and tailored sensor analysis with connectivity
devices, cloud computing and data fusions being directly integrated into
the client’s business software or as stand-alone services.
The Product Innovation and Realization segment (PIR) offers R&D services
and contract manufacturing to long-term key industrial customers through
in-house capabilities and a high degree of robotised production. In addi-
tion, the segment sells products based on proprietary technology, including
special instrumentation based on radar, radio frequency and embedded
signal processing technology.
78
FINANCIAL STATEMENTS
|
NORBIT GROUP
Financial results reportable segments
2022
Amounts in NOK million
Oceans
Connectivity
PIR
Group/
eliminations
Total
Revenues
443.0
308.0
456.5
(40.1)
1 167.5
Other gains and losses
0.0
0.0
0.0
0.0
0.0
Raw materials and change in inventories
149.8
109.7
307.4
(17.4)
549.5
Operating expenses
145.6
121.0
101.3
14.7
382.6
EBITDA
147.6
77.4
47.8
(37.5)
235.3
EBITDA margin
33%
25%
10%
20%
Depreciation
17.6
7.8
13.6
2.7
41.7
Amortisation and impairment
15.5
29.1
0.1
0.0
44.8
EBIT
114.4
40.5
34.0
(40.1)
148.8
Total financial items (not allocated)
(28.0)
Profit before tax
120.8
Taxes (not allocated)
(14.1)
Profit after tax
106.7
Timing of revenues
- At point in time
389.9
268.2
418.6
(40.1)
1 036.6
- Over time
53.1
39.9
37.9
0.0
130.9
Total
443.0
308.0
456.5
(40.1)
1 167.5
2021
Amounts in NOK million
Oceans
Connectivity
PIR
Group/
eliminations
Total
Revenues
378.5
146.3
291.0
(27.9)
787.8
Other gains and losses
0.0
0.0
0.0
1.2
1.2
Raw materials and change in inventories
139.2
50.5
181.0
(7.5)
363.3
Operating expenses
105.6
72.0
93.6
12.1
283.2
EBITDA
133.6
23.8
16.4
(31.3)
142.6
EBITDA margin
35%
16%
6%
18%
Depreciation
11.9
4.7
15.0
1.6
33.2
Amortisation and impairment
12.8
18.1
5.3
(0.4)
35.8
EBIT
108.9
0.9
(3.8)
(32.5)
73.5
Total financial items (not allocated)
(9.8)
Profit before tax
63.7
Taxes (not allocated)
(15.9)
Profit after tax
47.9
Timing of revenues
- At point in time
325.7
130.9
261.6
(27.9)
690.3
- Over time
52.7
15.3
29.4
0.0
97.5
Total
378.5
146.3
291.0
(27.9)
FINANCIAL STATEMENTS
|
NORBIT GROUP
Salaries, pension and social security costs
Payroll expenses
Amounts in NOK million
2022
2021
Salaries
222.7
171.8
Pension costs
11.9
8.4
Payroll tax
31.7
24.1
Capitalised payroll expenses as development asset
(22.4)
(22.1)
Other payroll expenses
6.3
5.5
Total employee benefit expenses
250.2
187.7
Average number of FTEs
418
311
Pension arrangements
The Norwegian group companies have pension plans secured through
collective agreements in life insurance companies and are subject to the
Norwegian Act on Occupational Pension. The group meets the require-
ment of this legislation. The group has pension plans with defined contribu-
tion plans. The defined contribution plan means that the company has not
incurred any future obligation. After the annual grant is paid the company
has fulfilled its obligation in accordance with the arrangement.
In addition, some of the Norwegian companies in the group are members
of an agreement-based early retirement plan (AFP). The scheme provides
the employees the opportunity to retire before the normal retirement age
in Norway of 67 years. Employees who choose retirement will retain a life-
long benefit from the age of 62 years. The Norwegian Accounting Standards
Board has issued a statement concluding that the AFP plan is a multi-em-
ployer defined benefit plan. The AFP plan exposes the participating enti-
ties to actuarial risk associated with employees of other entities with the
result that there is no consistent and reliable basis for allocating the obli-
gation, plan assets and costs to individual participating entities. Sufficient
information is not available to use defined benefit accounting and the AFP
plan is accounted for as a defined contribution plan.
The group’s subsidiaries outside of Norway have pension plans based on
Other operating expenses
Amounts in NOK million
2022
2021
External services
73.9
57.5
Travel expenses
10.6
3.1
Freight
8.0
5.3
Office supplies
4.8
2.7
Marketing
5.0
1.7
Guarantee, service and support
1.8
3.9
Other operating expenses
28.4
21.2
Total operating expenses
132.4
95.5
The table below summarises audit fees, as well as fees for audit services,
tax services and other non-audit services incurred by the group during
2022 and 2021.
Amounts in NOK million
2022
2021
Audit fee
1.4
0.9
Tax advisory fee
-
-
Other audit related services
0.1
0.7
Auditor's remuneration in other operating expenses
1.5
80
FINANCIAL STATEMENTS
|
NORBIT GROUP
Financial income and financial expenses
Amounts in NOK million
2022
2021
Financial income
Financial exchange gain (net)
-
-
Interest income
0.2
0.1
Other financial income
0.5
0.2
Financial income
0.7
0.3
Financial expenses
Interest expenses
16.2
8.2
Financial exchange loss (net)
10.5
0.3
Other financial expense
1.8
1.2
Financial expenses
28.5
9.8
Share of profit of associates
(0.2)
(0.3)
Net financial items
(28.0)
(9.8)
Income tax expense
Income tax specification
Amounts in NOK million
2022
2021
Current tax
Current tax on profits Norwegian companies
12.0
8.4
Current tax on profits foreign companies
3.5
1.2
Adjustments for current tax of prior periods
-
0.2
Total current tax expense
15.5
9.8
Deferred income tax
Change in deferred tax
(1.4)
6.0
Total deferred tax expense/(benefit)
(1.4)
6.0
Total income tax expense
14.1
15.9
Reconciliation between nominal and effective tax rates
Amounts in NOK million
2022
2021
Income tax expense at corporate income tax rate in Norway 22%
26.6
14.0
Effect of tax rates outside Norway different from 22%
2.0
0.0
Change in previously not recognised deferred tax assets
(13.2)
0.2
Other items
(1.2)
1.7
Subtotal
14.1
15.9
Effective tax rate
12%
25%
FINANCIAL STATEMENTS
|
NORBIT GROUP
Amounts recognised directly in equity
Amounts in NOK million
2022
2021
Deferred tax
-
-
Total
0
0
Deferred tax assets
Amounts in NOK million
2022
2021
The balance comprises temporary differencs attributable to:
Intangible and fixed assets
(14.2)
(12.3)
Inventories
(1.9)
(1.2)
Other assets and liabilities
(2.9)
(1.9)
Total
(19.0)
(15.4)
Total deferred tax assets
(19.0)
(15.4)
Unrecognised deferred tax assets
3.4
2.2
Net deferred tax assets
(15.6)
(13.3)
Deferred tax
Amounts in NOK million
2022
2021
The balance comprises temporary differencs attributable to:
Intangible and fixed assets
3.6
4.0
Total
3.6
4.0
Change in deferred tax assets
Amounts in NOK million
Tax losses
Intangible and
fixed assets
Inventories
Other
Total
Movements
At 1 January 2021
(6.9)
(12.4)
(1.2)
0.7
(19.7)
(Charged)/credited
-to profit or loss
6.9
0.1
0.1
(0.4)
6.6
At 31 December 2021
(0.0)
(12.3)
(1.2)
0.3
(13.3)
At 1 January 2022
(0.0)
(12.3)
(1.2)
0.3
(13.3)
- to profit or loss
0.0
(1.7)
(0.7)
0.3
(2.1)
Acquisition of subsidiary
(0.2)
(0.2)
At 31 December 2022
0.0
(14.2)
(1.9)
0.6
(15.6)
Change in deferred tax
Amounts in NOK million
Tax losses
Intangible and
fixed assets
Inventories
Other
Total
Movements
At 1 January 2021
0.0
4.0
0.0
0.0
4.0
(Charged)/credited
-to profit or loss
(0.4)
(0.4)
At 31 December 2022
0.0
3.6
0.0
0.0
3.6
82
FINANCIAL STATEMENTS
|
NORBIT GROUP
Deferred tax assets are recognised only if it is probable that future taxa-
ble amounts will be available to utilise
temporary differences and losses.
The group has assessed the probability of obtaining the necessary taxable
Earnings per share
Amounts in NOK
2022
2021
Basic earnings per share
Total basic earnings per share attributable to the ordinary equity holders of the company
1.82
0.83
Diluted earnings per share
Total diluted earnings per share attributable to the ordinary equity holders of the company
1.82
0.83
Reconciliations of earnings used in calculating earnings per share
Amounts in NOK million
2022
2021
Basic earnings per share
Profit from continuing operations attributable to the ordinary equity holders of the company:
Used in calculation basic earnings per share
106.7
47.9
Used in calculating diluted earnings per share
106.7
47.9
Weighted average number of shares used as the denominator
Number
2022
2021
Weighted average number outstanding
58 662 698
57 467 325
Weighted average number diluted
58 725 000
57 467 325
Basic earnings per share
Basic earnings per share amounts are calculated by dividing net profit for the
period attributable to ordinary equity holders of the parent company by the
weighted average number of ordinary shares outstanding during the period.
Diluted earnings per share
When calculating the diluted earnings per share, the number of shares that
could be issued for no consideration due to share options or other arrange-
ment that has been in effect during the period is added to the average
FINANCIAL STATEMENTS
|
NORBIT GROUP
Property, plant and equipment and leases
Amounts in NOK million
Land and
properties
Machinery,
fixtures
and fittings
Right-of-use
assets
Total
Cost at 1 January 2021
89.9
205.1
52.8
347.8
Accumulated depreciation
20.9
147.3
29.7
197.9
Net book amount at 1 January 2021
69.0
57.8
23.2
150.0
Additions from acquisition of companies
0.3
9.0
0.0
9.3
Additions
4.4
35.1
0.0
39.5
Depreciation charge
5.1
19.7
8.4
33.2
Translation differences
0.0
(0.6)
0.0
(0.6)
Net book amount at 31 December 2021
68.6
81.5
14.8
164.9
Cost at 1 January 2022
94.6
249.2
52.8
396.6
Accumulated depreciation
26.0
167.0
38.1
231.1
Translation differences
0.0
(0.6)
0.0
(0.6)
Net book amount at 1 January 2022
68.6
81.5
14.8
164.9
Additions from acquisition of companies
0.0
5.7
0.0
5.7
Additions
2.8
25.5
30.4
58.7
Disposals
0.0
0.0
0.0
0.0
Depreciation charge
5.9
26.2
9.7
41.7
Translation differences
0.0
0.0
0.0
0.0
Net book amount at 31 December 2022
65.5
86.6
35.5
187.7
Useful life
25 years
3-7 years
2-7 years
Depreciation method
Linear
Linear
Linear
Right-of-use assets and lease liabilities
NORBIT has chosen to present the right-of-use assets as part of property,
plant and equipment, and the lease liabilities as separate line items the
balance sheet. The group does not have any right-of-use assets that would
meet the definition of investment property.
At year-end 2022, the group had a portfolio of 6 leases (2020: 4) which
mainly consist of lease of office premises and manufacturing equipment.
At 31 December 2022, the leases had a weighted average remaining lease
term of 63 months. Extension options in the lease agreements have been
assessed and reflected in the IFRS 16 calculations if use of the option is
reasonably certain.
Leases are discounted using the interest rate implicit in the lease agree
-
ments or, if that rate cannot be readily determined, the estimated marginal
borrowing cost has been used, equivalent to 1M NIBOR at the time of the
agreements and the credit margin according to the revolving credit facility
(1.8 per cent) agreement.
The movement in the lease liabilities during 2022 and 2021 is summa-
rised below:
Amounts in NOK million
Lease liabilities at 1 January 2021
23.2
New lease agreements
0.0
Interest expense
0.4
Lease payments
(8.6)
Balance at 31 December 2021
15.0
Lease liabilities at 1 January 2022
15.0
New lease agreements
30.4
Interest expense
0.5
Lease payments
(10.0)
Balance at 31 December 2022
35.8
Current lease liabilities
11.8
Non-current lease liabilities
24.0
Total
35.8
Impairment loss and compensation
There were no impairment losses in 2022 and 2021.
Change in depreciation period
84
FINANCIAL STATEMENTS
|
NORBIT GROUP
Goodwill and intangible assets
Intangible assets
Amounts in NOK million
Development costs
Trademark
and customer
relationships
Total
Goodwill
Cost at 1 January 2021
332.4
0.0
332.4
0.0
Accumulated amortisation
148.6
0.0
148.6
0.0
Accumulated impairment
12.3
0.0
12.3
0.0
Net book amount at 1 January 2021
171.5
0.0
171.5
0.0
Additions from acquisition of companies
10.1
46.1
56.2
82.1
Additions
51.2
0.0
51.2
0.0
Amortisation charge
33.9
1.9
35.8
0.0
Translation differences
(0.7)
0.0
(0.7)
0.0
Net book amount at 31 December 2021
198.2
44.2
242.3
82.1
Cost at 1 January 2022
393.7
46.1
439.7
82.1
Accumulated amortisation
182.5
1.9
184.4
0.0
Accumulated impairment
12.3
0.0
12.3
0.0
Translation differences
(0.7)
0.0
(0.7)
0.0
Net book amount at 1 January 2022
198.2
44.2
242.3
82.1
Additions from acquisition of companies
1.0
0.0
1.0
2.3
Additions
60.5
0.0
60.5
0.0
Amortisation charge
40.1
4.6
44.8
0.0
Translation differences
(0.3)
0.0
(0.3)
0.0
Net book amount at 31 December 2022
219.2
39.6
258.8
84.4
Useful life
3-7 years
10 years
n.a
Intangible assets
Intangible assets primarily comprise capitalised development costs related
to plan or design for the production of new or substantially improved tech-
nology products. In addition, NORBIT recognised NOK 56.2 million in intan-
gible assets following the acquisition of iData Kft in July 2021, of which
NOK 46.1 million related to fair value adjustments of trademark and cus-
tomer relationships.
In 2022, further development was made on own technology and own
products, mainly within the market segments Oceans and Connectivity.
In Oceans, the majority of the capital spent relates to the development of
new applications on the ultra-high resolution sonar WINGHEAD, which was
released in 2020, in addition to hardware and software development on
the other sonar products.
In the Connectivity segment, the development projects are primarily
related to next generation connectivity devices for GNSS tolling for trucks,
DSRC-modules and software solutions for the services delivered by iData
Kft.
Amortisation methods and useful lives
Capitalised development is normally amortised over three to seven years
on a straight-line basis. Economic benefit is, however, considered for each
product and the amortisation period is equal to the estimated useful life
of the developed product.
Impairment considerations
At the end of each reporting period, the group assess whether there are
indications that any intangible asset has been impaired. If such indications
are present, an estimate of the recoverable amount of the asset is calcu-
lated. Regardless of whether there is an indication of impairment, intangi-
ble assets with indefinite useful lives or intangible assets that are not yet
available for use at the balance sheet date, are tested every year.
To assess whether indications of impairment exist, a simplified analysis of
future cash flows from intangible assets similar to the requirements under
IAS 36.39 is prepared. In this analysis estimated contribution per product
is applied, that is sales value less direct material cost and direct person-
nel costs. Both external documentation, budgets and forecasts are used in
preparing the analysis. It is also considered to what extent previous esti-
mates of future cash flows have been met. Prevailing market conditions are
also taken into account, including its impact on estimates and forecasts.
Future cash flows are calculated at the present value using a discount rate
specific to the relevant asset, ranging from 9.5 per cent 10.7 per cent (2021:
8.6 per cent to 9.9 per cent). These rates are calculated based on the rates
implicit in the current market transactions for similar assets or based on
the weighted average cost of capital of several listed companies that are
relevant for a single asset (or portfolio of assets), that in terms of potential
performance and risk corresponds to the relevant asset being tested for
impairment. The increase in the discount rates from last year is primarily
explained by higher interest rates.
FINANCIAL STATEMENTS
|
NORBIT GROUP
No indication of impairment was identified in 2022 or in 2021. It is referred
to note 4 for accounting policies relevant to intangible assets.
Change in amortisation period
There were no changes in amortisation profiles during 2022.
Goodwill
In 2021, NORBIT made a recognition of NOK 82.1 million in goodwill in con-
nection with the acquisitions of Kilmore Marine Ltd and iData Kft. A further
NOK 2.3 million in goodwill was recognised as part of the acquisition of Aur-
sund Maskinering AS in 2022. Acquired companies are integrated into each
reporting segment, where Kilmore Marine Ltd and Aursund Maskinering AS
are included in segment Oceans and iData Kft in segment Connectivity.
Impairment testing was carried out for iData Kft and Kilmore Marine Ltd as
the companies represent the only cash-generating units containing mate-
rial goodwill.
The recoverable amounts are determined based on the higher of the
cash-generating units fair value less costs of disposal and value in use.
In accordance with IFRS 13, quoted prices in active markets for similar assets
have been applied to measure fair value less cost of disposal. Adjustments
to the valuation multiples for a group of comparable assets are made to
reflect a difference in the cost of capital between comparable assets and
the cash-generating units, as well as control premiums to reflect transac-
tion prices in the quoted market.
For value in use, discounted cash flow models are applied, in which man-
agement has projected cash flows in the period from 2023 to 2027 based
on budget and forecasts. The key assumptions used in the calculations
are discussed below.
E
BITDA and investments
EBITDA corresponds to operating profit before depreciation and amortisa-
tion expenses, as reported in the consolidated statement of profit and loss.
Assumptions with regards to EBITDA projections are made in terms of rev-
enue growth for the products and services sold, as well as the operating
costs. Investments are determined based on the expected revenue growth
rate applied in the forecast period as part of the business plan. In judging
these assumptions, historical data is considered, as well as the expecta-
tions about the market development and future conditions.
Terminal value
Terminal value beyond the forecast period is determined applying the aver-
age of a terminal value in perpetuity at a growth rate of 2.5 per cent and
the lower of an exit multiple in line with the acquisition multiple and trad-
ing multiples for similar assets.
Discount rate
The discount rate applied is the weighted average cost of capital for the
specific cash-generating units and the industry and country the assets pri-
marily operate in. When estimating the discount rate, a risk-free rate equal
to the 10-year local government bond yield is applied, as well as risk pre-
mium. The discount rate is further adjusted for country risk, liquidity risk as
well as capital structure target. The pre-tax discount rate applied in 2022
for the impairment testing was 14.9 per cent.
Conclusion and sensitivity
For the assets containing goodwill, the recoverable amount estimated far
exceeded the carrying value and thus there were no indication of impair-
ment at the balance sheet date. A sensitivity analysis was not performed
due to the significant difference between the recoverable amount and the
Inventories
Amounts in NOK million
2022
2021
Current assets
Raw materials and stores
338.0
199.0
Work in progress
12.7
11.3
Finished goods - at cost
75.6
53.0
Book value
426.3
263.2
Inventory held at cost
432.0
267.4
Obsolescence
raw materials
(5.1)
(3.7)
Obsolescence
finished goods
(0.6)
(0.5)
Book value
426.3
263.2
Amounts in NOK million
2022
2021
Spesification of raw materials and consumables used
Purchase of goods
704.5
455.8
Freight, customs etc.
8.1
6.1
Change of inventories
(163.1)
(98.6)
Total
549.5
86
FINANCIAL STATEMENTS
|
NORBIT GROUP
Financial assets and financial liabilities
Financial assets
Amounts in NOK million
2022
2021
Financial assets at fair value
Aptomar do Brazil
-
0.1
Tangen Næringsbygg AS
0.1
0.1
ProVenture Seed III AS
0.5
-
Total shares in other companies (through OCI)
0.6
0.2
Financial assets at amortised cost
Trade receivables
168.0
154.9
Cash and cash equivalents
41.7
21.7
Total
209.7
176.6
Financial liabilities
Amounts in NOK million
2022
2021
Liabilities at amortised cost
Trade payables
132.6
100.2
Interest-bearing borrowings
337.4
288.2
Lease liabilities
35.8
15.0
Other payables
63.0
40.0
Total
568.9
Trade receivables
Amounts in NOK million
2022
2021
Current assets
Trade receivables
178.9
163.1
Loss allowance
(10.9)
(8.1)
Total
168.0
154.9
Amounts in NOK million
2022
2021
Not due
109.9
118.1
1-30 days past due date
37.4
16.4
31-60 days past due date
7.7
8.7
60+ days past due date
23.8
19.9
Total
178.9
163.1
During 2022, NORBIT made NOK 2.9 million in provisions relating to expected loss on accounts receivables.
FINANCIAL STATEMENTS
|
NORBIT GROUP
Cash and cash equivalents
Amounts in NOK million
2022
2021
Bank deposits payable on demand
33.5
13.2
Bank deposits restricted to tax payments
8.2
8.4
Total
41.7
Interest-bearing borrowings
2022
Amounts in NOK million
Current
Non-current
Total
Revolving credit facility
-
90.0
90.0
Overdraft facility
140.6
-
140.6
Term loan
3.7
46.7
50.4
Seller's credit
32.6
-
32.6
Other borrowings
5.9
17.9
23.8
Total interest-bearing borrowings
182.8
154.6
337.4
2021
Amounts in NOK million
Current
Non-current
Total
Revolving credit facility
-
60.0
60.0
Overdraft facility
86.5
-
86.5
Term loan
3.7
50.4
54.1
Seller's credit
30.1
30.1
60.2
Other borrowings
5.3
22.1
27.4
Total interest-bearing borrowings
125.6
162.6
288.2
The group had four main loan facilities per the balance sheet date, compris-
ing of a long-term revolving credit facility (RCF), a multi-currency short-term
overdraft facility and two term loans. The credit limits are NOK 200 million
and NOK 350 million on the RCF and overdraft facility, respectively. In addi-
tion, a NOK 120 million term loan was not drawn on at the end of the year.
NORBIT had drawn NOK 140.6 million on the overdraft facility at 31 Decem-
ber 2022, while NOK 90.0 million was drawn on the RCF. NOK 50.4 million
was outstanding on one of the term loans.
The RCF and one term loan are priced at 3M NIBOR + 1.8 per cent margin
p.a., the overdraft facility is priced at a 1M reference rate (NOK, USD and
EUR) + 1.4 per cent margin p.a, while the NOK 120 million term loan is priced
at 3M NIBOR + 2.15 per cent margin p.a.
The maturity date for the RCF is February 2025, July 2024 for the first term
loan and June 2026 for the NOK 120 million term loan. The two term loans
amortise over 15 and 7 years, respectively. The overdraft facility is refi-
nanced each year on a rolling basis.
Refer to note 20 for details on covenants related to the credit facilities.
88
FINANCIAL STATEMENTS
|
NORBIT GROUP
Assets pledged as security
Amounts in NOK million
2022
2021
Secured interest-bearing borrowings
Long term debt
154.6
132.5
Short term debt
150.1
95.5
Total secured borrowings
304.7
228.0
The carrying amounts of assets pledged as security for current and non-current borrowings are:
Amounts in NOK million
2022
2021
Current
Receivables
120.1
117.0
Inventories
413.2
254.2
Total current assets pledged as security
533.3
371.2
Non-current
Property, plant and equipment
128.4
130.7
Total non-current assets pledged as security
128.4
130.7
Total assets pledged as security
661.7
Other current liabilities
Amounts in NOK million
2022
2021
Payroll tax and other statutory liabilities
18.2
8.8
Holiday pay accrual
19.5
17.4
Prepayments from customers
7.7
5.4
Warranty provisions
4.5
4.5
Other payables and accruals
43.6
23.7
Total
93.3
Capital management
Capital allocation
NORBIT’s capital allocation framework and strategy are determined by the
board of directors. Based on the framework, NORBIT has made the follow-
ing capital priorities to ensure continued profitable growth, while at the
same time maintaining a robust financial position to mitigate financial risks:
1.
Maintain a solid balance sheet
2.
Working capital and sustaining capital expenditures
3.
Investments in research and development to support organic growth
4.
Strategic acquisitions to accelerate growth
5.
Shareholder distributions
The group’s objectives when managing the solidity of its balance sheet and
liquidity position are the following:
■
Safeguard its ability to continue as a going concern, so that it can
provide a competitive risk-adjusted return for shareholders and
benefits for other stakeholders
■
Maintain financial robustness and an optimised capital structure in
order to reduce cost of capital
■
Provide for financial flexibility
■
Maintain a robust headroom to covenants in loan agreements
In order to optimise the capital structure, the group may adjust the amount
of dividends paid to shareholders, return capital to shareholders, issue new
shares, reduce investments or sell assets to reduce debt.
Covenants
The group monitors its covenants on the basis of the following leverage
ratios:
FINANCIAL STATEMENTS
|
NORBIT GROUP
■
Carrying value of total equity as per cent of carrying value of total
assets
■
Net interest bearing debt (NIBD) including lease liabilities over EBITDA
(“NIBD ratio”)
NORBIT has a policy of maintaining a NIBD ratio in the range of 1.0 – 2.5x
in order to ensure a solid balance sheet.
Loan covenants
Amounts in NOK million
2022
2021
Equity ratios at 31 December
Total equity
599.3
497.9
Total assets
1 220.8
976.9
Equity ratio
49%
51%
Amounts in NOK million
2022
2021
NIBD ratios at 31 December
Interest bearing borrowings
337.4
288.2
Lease liabilities
35.8
15.0
Cash and cash equivalents
41.7
21.7
NIBD
331.5
281.5
EBITDA*
235.3
152.8
NIBD to EBITDA ratio
1.41
1.84
*
EBITDA in 2021 is adjusted to include 12-month financials from the acquisition of iData Kft, completed 30 July 2021.
Under the terms of the major borrowing facilities, the group is required to
comply with the following financial covenants:
■
Equity ratio:
Carrying value of total equity as per cent of carrying
value of total assets shall exceed 30 per cent. To be reported by 30
June and 31 December
■
NIBD ratio:
Total interest-bearing borrowings and lease liabilities less
cash and cash equivalents over EBITDA (IFRS, as reported) shall not
exceed 4.0 times. To be reported each quarter. EBITDA is calculated
on a 12-month rolling basis.
The group has complied with these covenants throughout the reporting
period and at year-end 2022 and 2021.
Dividend policy
NORBIT’s dividend policy is to pay out annual dividends between 30 and
50 per cent of the group’s ordinary net profit after tax. When deciding
on the annual dividend, the board of directors will consider the group’s
financial position, investment plans as well as the needed financial flexi-
bility to provide for sustainable growth.
The board of directors has proposed that NOK 0.70 per share is paid as
dividend for the financial year 2022, or NOK 41.2 million, representing
38.4 per cent of net profit after tax.
In 2022, NORBIT paid NOK 0.30 per share in dividends to the sharehold-
ers (NOK 17.5 million) for the financial year 2021, representing 36.1 per
Business combinations
Kilmore Marine Ltd
In February 2021, NORBIT ASA acquired a 65 per cent ownership interest
in Kilmore Marine Ltd for a total consideration of GBP 450 000. Kilmore
Marine Ltd. Acts as segment Oceans’s distributor in the UK and Middle
East. Prior to the acquisition, NORBIT ASA held a 35 per cent ownership
interest, which was reported as an equity-accounted investee in the con-
solidated accounts. As part of the transaction, NORBIT recognised a pre-
liminary goodwill of NOK 6.0 million and a gain on existing ownership of
NOK 1.2 million, reported as other gains and losses in the profit and loss
accounts. Capitalised goodwill related to acquisitions comprises synergies,
assets related to employees, other intangible assets that do not qualify for
separate capitalisation, future excess earnings and the fact that deferred
tax in accordance with IFRS is not discounted.
90
FINANCIAL STATEMENTS
|
NORBIT GROUP
Purchase price allocation:
Amounts in NOK million
Kilmore Marine
Cash consideration
5.3
Fair value of previous equity interests
2.9
Total considerations
8.2
Total identifiable net assets
2.1
Goodwill
6.0
Cash and cash equivalents in acquired business
2.1
Total cash outflow from acquisition of business
3.2
iData
On 30 July 2021, NORBIT completed the acquisition of iData, a Hungarian
technology company specialised in vehicle tracking and fleet mangement
related services. iData has three subsidiaries in Hungary (Beta Blue Kft.),
Croatia (iData Fleet Management d.o.o.) and Slovakia (iData Slovakia s.r.o.),
collectively with iData Kft. referred to as "iData". iData is reported under
segment Connectivity in the segment reporting. Through the acquisition,
the Connectivity segment is creating a broader platform for growth into the
asset and vehicle tracking market, where iData has a strong position in its
home markets. The total consideration for the shares was EUR 14.5 million
and was paid through a combination of cash, seller's credit and issuance
of consideration shares. The purchase price and fair value of assets and
liabilities acquired are presented in the table below. The main fair value
adjustments were related to customer relationships and trademark. The
company was consolidated from the date of acquisition and the preliminary
acquisition analysis gave rise to goodwill of NOK 76.1 million. Goodwill is
not tax deductible. From 30 July to 31 December 2021, iData contributed
with revenues of NOK 33.2 million to the Group, NOK 6.5 million in EBITDA
and NOK 1.3 million to EBIT. Transaction costs amounted to NOK 7.6 million.
Purchase price allocation:
Amounts in NOK million
Idata
Considerations shares
26.1
Cash consideration
62.7
Seller's credit
62.2
Total
151.0
Amounts in NOK million
Recognised amount of identifiable assets and
acquired liabilities assumed
Trademark
2.2
Customer relationships
43.9
Other intangible assets
10.1
Property, plant and equipment
9.3
Inventories
7.4
Trade receivables
8.7
Other current assets
3.8
Cash and cash equivalents
1.2
Deferred tax
(4.1)
Non-current liabilities
(1.3)
Trade payables
(1.8)
Other current liabilities
(4.5)
Total identifiable net assets
74.8
Goodwill
76.1
Cash and cash equivalents in acquired business
1.2
Total cash outflow from acquisition of business
123.7
Nicarnica Aviation AS
In March 2022, NORBIT ASA acquired 100 per cent ownership in Nicar-
nica Aviation AS, a Norwegian technology company that has developed
remote sensing solutions for detecting hazardous emissions. The tech-
nology broadens and complements the existing environmental monitor-
ing solutions developed by segment Oceans. The total consideration for
the shares was NOK 0.9 million, paid in cash to the sellers. The purchase
price and fair value of assets and liabilities acquired are presented in the
table below. The company was consolidated from the date of acquisition.
Purchase price allocation:
Amounts in NOK million
Nicarnica Aviation AS
Cash consideration
0.9
Total
0.9
Amounts in NOK million
Recognised amount of identifiable assets and acquired
liabilities assumed*
Intangible assets
1.0
Deferred tax asset
2.0
Cash and cash equivalents
0.0
Interest-bearing borrowings
(1.6)
Trade payables
(0.4)
Other current liabilities
(0.1)
Total identifiable net assets
0.9
Cash and cash equivalents in acquired business
0.0
Total cash outflow from acquisition of business
0.9
* The purchase price allocation is preliminary and may be subject to adjustments
FINANCIAL STATEMENTS
|
NORBIT GROUP
Aursund Maskinering AS
In November 2022, NORBIT ASA acquired 100 per cent ownership in Aur-
sund Maskinering AS. The company has been a key supplier for segment
Oceans for several years. The total consideration for the shares was NOK
9.3 million and was paid through a combination of cash and an interest-free
sellers credit. Half of the sellers' credit is due November 2023, while the
remainder is due November 2024. The purchase price and fair value of
assets and liabilities acquired are presented in the table below. The com-
pany was consolidated from the date of acquisition and the preliminary
acquisition analysis gave rise to goodwill of NOK 2.3 million. In 2021, Aur-
sund Maskinering reported revenues of NOK 8.1 million and an EBITDA of
NOK 1.6 million (Norwegian GAAP). Aursund Maskinering is reported under
segment Oceans.
Purchase price allocation:
Amounts in NOK million
Aursund Maskinering AS
Cash consideration
3.7
Sellers credit
5.6
Total
9.3
Amounts in NOK million
Reconised amount of identifiable assets and acquired
liabilities assumed*
Property, plant and equipment
5.7
Inventory
1.7
Trade receivables
2.1
Other receivables
0.1
Cash and cash equivalents
1.5
Deferred tax liability
(0.3)
Interest-bearing borrowings
(1.1)
Trade payables
(0.1)
Other short-term debt
(2.6)
Total identifiable net assets
7.0
Goodwill
2.3
Cash and cash equivalents in acquired business
1.5
Total cash outflow from acquisition of business
7.8
Equity-accounted investees
Equity-accounted investees include associated companies of NORBIT and
are defined as related parties. See note 24 for overview of transactions and
balances with associated companies.
Interests in associates
Set out below are the associates of the group at 31 December 2022. The
entities listed below have share capital consisting solely of ordinary shares,
which are held directly by the parent company. The proportion of ownership
interest is the same as the proportion of voting rights held.
Ownership
Carrying amount
Amounts in NOK million
2022
2021
2022
2021
Associated company
Head office
Kvikna Consulting Ehf.
Reykavik
33%
33%
0.7
0.9
Norbit Germany GmbH
Hamburg
50%
50%
-
-
Total
0.7
0.9
Kvikna Consulting Ehf
Based in Reykjavik, Iceland, Kvikna Consulting Ehf. is a software com-
pany providing services to all of NORBIT’s operating segments. NORBIT
ASA owns 33.33 per cent of the shares in the company.
Norbit Germany GmbH
Norbit Germany GmbH is located Hamburg. NORBIT ASA owns 50 per
cent of the shares in the company.
Norbit Germany GmbH did not deliver
services to the NORBIT group of companies during 2022 or 2021.
Share of profits from associates
Amounts in NOK million
2022
2021
Kvikna Consulting Ehf.
(0.2)
0.1
Norbit Germany GmbH
-
(0.4)
Share of profit from associates
(0.2)
92
FINANCIAL STATEMENTS
|
NORBIT GROUP
Share capital and shareholder information
Share capital and share premium
The share capital in NORBIT ASA at 31 December 2022 consists of one
share class with a total of 58 901 139 shares with a face value of NOK
0.10 with a total share capital of NOK 5 890 113.90.
Number of shares
2022
2021
Ordinary shares
Fully paid
58 901 139
58 459 302
Total number of shares
58 901 139
58 459 302
Movements in ordinary shares
Amounts in NOK million
Number of shares
Par value
Share premium
Total
Details
Opening balance at 1 January 2021
56 786 918
5.7
275.4
281.1
Ordinary issue
1 672 384
0.2
33.3
33.5
Balance at 31 December 2021
58 459 302
5.8
308.8
314.6
Ordinary issue
441 837
0.0
11.2
11.2
Balance at 31 December 2022
58 901 139
5.9
319.9
325.8
In 2022 and based on the authorisations granted at the Annual General
Meeting in May 2022, board of directors resolved to increase the compa-
ny's share capital by NOK 6 112.90 in connection with exercise of restricted
stock units through the issuance of 61 129 new shares, each with a par
value of NOK 0.10. This represented 0.1 per cent of the total share capital
prior to the transaction.
The board also resolved to increase the company's share capital by NOK 38
070.80, in connection with incentive share purchase programs for employ-
ees, through the issuance of 380 708 new shares, each with a par value
of NOK 0.10. This represented 0.7 per cent of the total share capital prior
to the transaction.
Following these share capital increases, the company's share capital at 31
December 2022 is NOK 5 890 113.90, divided into 58 901 139 shares, each
with a par value of NOK 0.10.
At the Annual General Meeting in 2022, the board of directors was granted
the authorisation to acquired treasury shares by up to 10 per cent of the
share capital on behalf of the company. In connection with the exercise of
restricted stock units and simultaneous share issue to the executive man-
agement team, NORBIT ASA repurchased 16 832 shares at a price of NOK
27.00 per share. At 31 December 2022, the company held 16 832 treas-
ury shares.
Number of shares
2022
2021
Treasury shares
Opening balance at 1 January
-
-
Own shares purchased
16 832
-
Balance at 31 December 2022
16 832
FINANCIAL STATEMENTS
|
NORBIT GROUP
RETAINED EARNINGS
Movements in retained earnings were as follows:
Amounts in NOK million
2022
2021
Balance at 1 January
183.3
155.2
Net profit for the period
106.7
47.9
Other comprehensive income
1.5
(3.2)
Treasury shares
(0.5)
-
Other changes in equity
-
0.4
Dividends
(17.5)
(17.0)
Balance at 31 December
273.5
183.3
The shareholders in NORBIT ASA were as follows at 31 December 2022:
Shareholder
Shares
Pecentage
VHF Invest AS
7 686 495
13.0%
Petors AS
(100% owned by CEO Per Jørgen Weisethaunet)
7 000 000
11.9%
Reitan Kapital AS
5 829 083
9.9%
Draupnir Invest AS
5 102 949
8.7%
J.P. Morgan SE
3 280 771
5.6%
Esmar AS
3 162 286
5.4%
Eidco AS
3 062 286
5.2%
The Bank of New York Mellon SA/NV
2 825 817
4.8%
J.P. Morgan SE
1 480 247
2.5%
Citibank
1 056 409
1.8%
Danske Invest Norge Vekst
971 400
1.6%
Danske Bank A/S (of which 786 539 shares controlled by BUD Peter K. Eriksen)
795 208
1.4%
Clearstream Banking S.A.
725 365
1.2%
Usegi AS
(100% owned by CTO Arild Søraunet)
721 989
1.2%
J.P. Morgan SE
720 392
1.2%
Sonstad AS
679 000
1.2%
Carnegie Investment Bank AB
627 216
1.1%
The Bank of New York Mellon SA/NV
607 930
1.0%
Danske Bank A/S
525 000
0.9%
Saxo Bank A/S
508 309
0.9%
Total 20 largest
47 368 152
80.4%
Other
11 532 987
19.6%
Total outstanding shares
58 901 139
Related parties
Related party relationships are those involving control (either direct or indi-
rect), joint control or significant influence. Related parties are in a position
to enter into transactions with the company that would not be undertaken
between unrelated parties. All transactions with related parties in NORBIT
have been based on arm’s length basis.
Transactions with management and board directors
During 2022, the group purchased legal services of NOK 2.7 million from
Prétor Advokat AS, in which Director Tom Solberg is one of the partners.
There were no other related party transactions between the company and
the parties in the management or the board in 2022 or 2021.
Transactions with associates
Below summarises the transactions and balance sheet items with asso-
ciates.
Amounts in NOK million
2022
2021
Trade receivables
0.9
-
Trade payables
0.6
0.8
Revenues
4.5
-
Operating expenses
4.6
94
FINANCIAL STATEMENTS
|
NORBIT GROUP
Share-based arrangements
Share incentive programs to employees
At the general meeting held 4 May 2022, the board of directors was granted
an authorisation to increase NORBIT ASA’s share capital by up to 2.0 per
cent of the share capital to be used to issue share to the group’s employ-
ees in connection with incentive programs. The authorisation is valid until
the annual general meeting 2022 to be held 4 May 2023.
In July 2022, the board of directors approved and implemented an incen-
tive share purchase programs for all eligible employees in NORBIT for the
fiscal year 2022, which also included the executive management team, but
not the board of directors.
The first program was a share purchase program where eligible employees
were offered the opportunity to acquire shares for up to NOK 25 000 less a
20 per cent discount and subject to a lock-up period of 24 months. The offer
price (before discount) for the new shares was NOK 24.89, corresponding to
the five-day average volume weighted price of the NORBIT ASA share prior
to 20 June. Employees were offered financing from NORBIT for the invested
amount, to be repaid through deduction of salary over a 12-month period.
The second program was a share matching program, where eligible par-
ticipants were offered the opportunity to acquire shares at market value,
and in turn, obtain a right to receive compensation in new shares equiv-
alent to their invested amount after 24 months if certain conditions are
met. There is no lock-up on the shares acquired. The offer price was set to
NOK 25.15, corresponding to the five-day average volume weighted price
of NORBIT ASA’s share prior to 27 June. NORBIT did not provide financing
for the second program.
In connection with the programs, the board of directors resolved to issue
new 380 708 new shares, of which 83 829 under program 1 and 296 879
under program 2. This represented 0.7 per cent of the total share capital
prior to the transaction.
Share-based remuneration to corporate management
In accordance with the authorisation granted at the company’s Annual
General Meeting, the board of directors has implemented a share-based
incentive program for corporate management consisting of the award and
issuance of restricted stock units (‘RSU’). One RSU granted gives a contin-
gent entitlement to one NORBIT ASA share free of charge. The number of
RSUs awarded are based on a set of predetermined and measurable per-
formance criteria in the accruing year and the group’s achievements of
certain quantitative and qualitative goals. Each RSU granted is restricted
and follows a vesting schedule. The RSUs granted will vest over a period
of three years following the accrual year, where 1/3 of the RSUs will vest
immediately after the first general meeting following the accruing year, 1/3
is released the year after, and the final 1/3 released 12 months after that.
The fair value of the RSU entitlements is established when they are awarded
and charged to profit and loss over the vesting period.
At December 31, 2022, there were 106 840 restricted stock units ('RSUs')
outstanding. Half will vest in the second quarter of 2023, while the remain-
ing half will vest in second quarter 2024. In 2022, NOK 4.1 million was
charged to the profit and loss through a combination of paid and accrued
compensation.
Movements of of the number of RSUs outstanding
Number of RSUs
2022
2021
1 January
-
-
Granted during the yer
183 395
-
Released during the year
(61 129)
-
Cancelled
(15 426)
-
Adjustments
-
-
Total
106 840
-
Outstanding RSUs in the executive management team
Number of RSUs
Outstanding
per 01.01
Granted
Released
Cancelled
Adjustments
Outstanding
per 31.12
Per Jørgen Weisethaunet (Group CEO)
-
40 069
(13 356)
-
-
26 713
Per Kristian Reppe (Group CFO)
-
27 158
(9 052)
-
-
18 106
Peter K. Eriksen (BUD Oceans)
-
42 338
(14 112)
-
-
28 226
Stein M. Beyer (BUD PIR and Group COO)
-
27 682
(9 227)
-
-
18 455
Peter Tschulik (BUD Connectivity)*
-
23 139
(7 713)
(15 426)
-
0
Arild Søraunet (Group CTO)
-
23 009
(7 669)
-
-
15 340
Total
-
183 395
(61 129)
(15 426)
-
106 840
FINANCIAL STATEMENTS
|
NORBIT GROUP
Remuneration to the board of directors and executive management
Remuneration to the board of directors
Compensation to the members of the board of directors is set out below,
referring to the actual expenses paid in the year.
The board’s remuneration is determined by the general meeting after
receiving proposal from the nomination committee. The remuneration com-
prises of a fixed payment for board membership and work in sub-commit-
tees. In addition, the board members are compensated for travel expenses.
NORBIT is responsible for payment of social security taxes, as well as costs
for directors’ and officer’s liability insurance.
The remuneration to the board members is not performance-related nor
include share option elements. The board does not participate in incentive
programs available to employees in the group or any other share-based
incentive schemes.
Board of directors compensation 2022
Amounts in NOK thousand
2022
2021
Finn Haugan
540
515
Bente Avnung Landsnes
375
325
Tom Solberg
190
165
Trond Tuvstein
250
200
Marit Collin
190
165
Remuneration to the members of the executive management team
Compensation to the executive management team consists of a fixed
salary, variable pay, pension benefits and non-financial benefits. In
accordance with the guidelines, a ceiling has been set for variable pay
and performance bonus remuneration.
No member of the executive management team receive remunera-
tion for directorships in the group entities. The executive management
team has no special pension and insurance plans. There are no per-
formance-based pension plans. No loans, prepayments or other forms
of credit issued to any members of the executive personnel other than
financing available through one of the incentive programs open for all
eligible employees in the group.
Compensation to the executive management team for 2022 and 2021 is
set out below and is reported as expensed in the financial year.
For further information, refer to NORBIT’s Remuneration Report to be
published to the general meeting 4 May 2023, in accordance with the
Norwegian Public Limited Liability Companies Act Section 6-16b and
related regulations. The report will also include information related to
derogation and deviation to the guidelines as approved by the general
meeting 4 May 2022.
96
FINANCIAL STATEMENTS
|
NORBIT GROUP
Fixed salary paid
Variable pay
Amounts in NOK million
Salary
1)
Pension
benefits
Other
benefits
Performance-
based bonus
2)
Other bonus
3)
Total
Per Jørgen Weisethaunet (Group CEO and
business unit director Connectivity)
2022
3.1
0.1
0.0
1.3
-
4.5
2021
3.0
0.1
0.0
0.5
-
3.6
Per Kristian Reppe
2022
2.3
0.1
0.0
0.9
3.3
(Group CFO)
2021
2.0
0.1
0.0
0.3
0.2
2.6
Arild Søraunet
2022
1.8
0.1
0.0
0.8
-
2.7
(Group CTO)
2021
1.7
0.1
0.0
0.3
-
2.1
Peter Koldgaard Eriksen
2022
3.4
0.1
0.1
1.4
-
5.1
(Business unit director Oceans)
4)
2021
3.7
0.1
0.1
0.5
0.6
5.0
Peter Tschulik
2022
1.8
0.0
-
0.2
-
2.0
(Business unit director Connectivity)
5)
2021
1.8
0.0
-
0.3
-
2.1
Stein Martin Beyer
2022
2.0
0.1
0.1
0.9
-
3.1
(Business unit director PIR and group COO)
2021
2.0
0.1
0.0
0.4
-
2.5
1)
Salaries as expensed, excluding social security taxes.
2)
Variable performance-based cash and equity bonus during the year under the incentive program, excluding social security expenses and as expensed.
3)
Other cash bonus in the year outside the incentive program, excluding social security expenses.
4)
Remuneration in USD, translated to NOK.
5)
2022 renumeration from 1.1-30.11. Remuneration in EUR, translated to NOK – Peter Tschulik is entitled to one year severance payment.
Directors’ and executive management’s shareholding
The following number of shares is owned by the directors and the members
of the executive management (and their related parties) at 31 December
2022. In connection with incentive program for all employees in NORBIT,
certain members of the corporate management team participated in the
programs, whereas part of these shares acquired are subject to a lock-up
of 24-months.
Name
Shares subject
to lock-up
Shares not subject
to lock-up
Total shares at
year-end
Percentage
Board of directors
Finn Haugan
-
93 998
93 998
0.16%
Bente Avnung Landsnes
-
69 473
69 473
0.12%
Trond Tuvstein (through TTU Invest AS)
-
32 894
32 894
0.06%
Magnus Reitan (through Reitan Kapital AS)
-
5 829 083
5 829 083
9.90%
Christina Hallin
-
-
-
0.00%
Tom Solberg (through Mariteam AS)
-
65 789
65 789
0.11%
Total shares held by board of directors
-
6 091 237
6 091 237
10.34%
Executive management
Per Jørgen Weisethaunet (through Petors AS)
-
7 007 893
7 007 893
11.90%
Per Kristian Reppe
1 004
52 951
53 955
0.09%
Peter K. Eriksen (through Danske Bank A/S)
-
786 539
786 539
1.34%
Stein M. Beyer
1 004
307 712
308 716
0.52%
Arild Søraunet (ownership through Usegi AS)
-
725 823
725 823
1.23%
Julie Dahl Benum
-
-
-
0.00%
Total shares held by executive management
2 008
8 880 918
8 882 926
FINANCIAL STATEMENTS
|
NORBIT GROUP
Contingencies and claims
Government grants
The group received government grants of a total of NOK 14.1 million in
Events after the balance sheet date
■
Segment Connectivity received a NOK 150 million order for On-Board
Units with delivery in the first half of 2023. Discussions are ongoing
with respect to additional volume deliveries in the second half of
2023.
■
NORBIT announced the closing of the acquisition of the IoT start-up
CPS AS. The transaction valued CPS at an enterprise value of NOK
13.0 million, implying an equity value of NOK 12.6 million. The
acquisition was financed by the issuance of consideration shares at a
price equal to NOK 30.25107 per share with a total value of NOK 9.0
FINANCIAL STATEMENTS
NORBIT ASA
NORBIT ANNUAL REPORT 2022
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FINANCIAL STATEMENTS
|
NORBIT ASA
STATEMENT OF INCOME – NORBIT ASA
Amounts in NOK million
Note
2022
2021
Revenue
3
31.0
25.3
Employee benefit expenses
4
38.7
26.6
Depreciation and amortisation expenses
5
1.1
0.9
Other operating expenses
6
30.7
31.7
Operating profit
(39.5)
(33.8)
EBITDA
Financial income
7
168.4
108.5
Financial expenses
7
7.8
24.9
Net financial items
160.6
83.7
Profit before tax
121.2
49.8
Income tax expense
8
28.4
17.0
Profit for the period
92.8
32.8
Allocated to:
Dividends
9
41.2
17.5
Transferred to/from other equity
9
51.6
15.3
Total allocation
92.8
32.8
NORBIT ANNUAL REPORT 2022
100
FINANCIAL STATEMENTS
|
NORBIT ASA
STATEMENT OF FINANCIAL POSITION – NORBIT ASA
Amounts in NOK million
Note
31.12.2022
31.12.2021
ASSETS
Office equipment
5
2.3
2.5
Intangible assets
5
0.8
0.7
Deferred tax asset
8
0.1
0.1
Investments in associated companies
10
0.0
0.0
Investments in subsidiaries
10
272.8
264.0
Loan to group companies
10
158.8
91.2
Investment in shares
0.5
0.0
Total non-current assets
435.4
358.5
Trade receivables
2.3
1.0
Receivables on group companies
10
428.0
286.8
Other receivables
2.4
2.1
Cash and cash equivalents
11
1.1
1.0
Total current assets
433.8
290.8
Total assets
869.2
649.3
LIABILITIES
Trade payables
2.2
1.5
Interest-bearing borrowings
12
140.6
86.5
Tax payable
8
12.0
8.4
Other current liabilities
92.6
26.1
Total current liabilities
247.5
122.5
Other borrowings
2.6
0.0
Interest-bearing borrowings
12
90.0
60.0
Total non-current liabilities
92.6
60.0
Total liabilities
340.1
182.5
EQUITY
Share capital
9
5.9
5.8
Share premium
9
319.9
308.8
Other equity
9
203.3
152.2
Total equity
529.1
466.8
Total equity and liabilities
869.2
649.3
Trondheim, Norway, 29 March 2023
The board of directors and CEO
NORBIT ASA
Finn Haugan
Bente Avnung Landsnes
Christina Hallin
Chair of the board
Deputy chair of the board
Director
Trond Tuvstein
Magnus Reitan
Per Jørgen Weisethaunet
Director
Director
Chief executive officer
NORBIT ANNUAL REPORT 2022
101
FINANCIAL STATEMENTS
|
NORBIT ASA
STATEMENT OF CASH FLOWS – NORBIT ASA
Amounts in NOK million
Note
2022
2021
Cash flow from operations
Profit before income taxes
121.2
49.8
Taxes paid in the period
(8.4)
0.0
Depreciation and amortisation expenses
5
1.1
0.9
Impairment of financial assets
0.0
20.5
Changes in other operating assets and liabilities
46.2
6.0
Net cash generated by operating activities
160.2
77.2
Cash flow from investments
Payments for office equipment and intangible assets
5
(1.1)
(1.7)
Purchase of shares and investments in other group companies
(25.6)
(23.3)
Payment of group receivables (long/short term)
(67.7)
(112.9)
Net cash (used in)/generated by investing activities
(94.4)
(137.9)
Cash flow from financing
Proceeds from issue of equity instruments of the company
9
9.1
33.5
Net change in overdraft facility
12
54.0
35.7
Proceeds from borrowings
12
30.0
34.2
Payment to group companies
10
(141.2)
(22.0)
Dividends paid
9
(17.5)
(17.0)
Repayment of borrowings
12
0.0
(3.4)
Net cash (used in)/generated by financing activities
(65.6)
60.9
Net change in cash and cash equivalents
0.1
0.2
Net increase in cash and cash equivalents
0.1
0.2
Cash and cash equivalents at the beginning of the period
1.0
0.8
Cash and cash equivalents at the end of the period
11
1.1
1.0
NORBIT ANNUAL REPORT 2022
102
FINANCIAL STATEMENTS
|
NORBIT ASA
NOTES TO THE FINANCIAL STATEMENTS – NORBIT ASA
NOTE 01
Company information
NORBIT ASA is the parent company of the NORBIT group of companies.
NORBIT ASA is domiciled in Norway with headquarter at Stiklestadveien 1,
Trondheim. NORBIT ASA is listed on the Oslo Stock Exchange with ticker
“NORBT”.
NOTE 02
Accounting policies
The annual accounts have been prepared in compliance with the Accounting
Act and accounting principles generally accepted in Norway. The financial
statement is presented in NOK which is the functional currency of the par-
ent company.
Financial information presented in NOK has been rounded
to the nearest million with one decimal, except when otherwise stated.
USE OF ESTIMATES
The preparation of financial statements in compliance with the generally
accepted accounting practices requires management to make estimates
and assumptions that affect the reported amount in the profit and loss
statement, the measurement of assets and liabilities, and the disclosure
of contingent assets and liabilities at the balance sheet date. Actual results
may differ from estimates.
SHARES IN SUBSIDIARIES AND ASSOCIATED COMPANIES
Subsidiaries
Subsidiaries are all entities over which the parent company has control. The
parent company controls an entity when the parent company is exposed
to, or has rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power over the entity.
Investment in associates
Associates are all entities over which the parent company has significant
influence, but which is not a subsidiary nor a joint arrangement. Signifi-
cant influence is the power to participate in the financial and operating
policy decisions of the investee, without having control or joint control of
these policies. This is generally the case where the parent company holds
between 20 and 50 per cent of the voting rights.
Accounting principles
The cost method is used as a principle for investments in subsidiaries and
associated companies. Investments are valued at acquisition cost for the
shares unless a write-down has been necessary. Investments are written
down to market value if the decline is viewed as not transitory in nature
and when deemed necessary. Write-downs are reversed if the basis for the
write-down is no longer present. The cost price is increased when funds
are raised through capital increase or when group contributions are made
to subsidiaries. Dividends received are initially recognised as income. Div-
idends and group contributions from subsidiaries are recognised in the
same year as the subsidiary allocates the amount.
REVENUE RECOGNITION
Income arising from royalties and management services provided to sub-
sidiaries is recognised if all the following conditions are satisfied:
■
A service has been transferred to a subsidiary based on a contract or
a service level agreement
■
It is probable that the economic benefits associated with the
transaction will flow to the company; and
■
The amount of revenue can be measured reliably
Revenue is valued at the fair value of the consideration, net after deduction
of value added tax, returns, discounts and other discounts.
CLASSIFICATION OF BALANCE SHEET ITEMS
Current assets and short-term liabilities include items that are due within
one year after time of acquisition. The remaining items are classified as
non-current assets or long-term liabilities. Current assets are valued at the
lower of acquisition cost and fair value. Current liabilities are recorded in
the balance sheet at face value at the time of transaction.
Non-current assets are recorded at acquisition cost and depreciated on a
straight-line basis over the expected economic lifetime. Upon a change in
value not deemed to be temporary, the affected fixed asset is written down
to market value. Long-term liabilities are recorded in the balance sheet at
face value at the date they are assumed.
TANGIBLE ASSETS
Tangible assets are stated at acquisition cost less accumulated depreci-
ation and impairment losses. Acquisition cost of tangible assets include
fees, taxes and other direct purchase expenses necessary to prepare the
fixed asset for operation. Maintenance of fixed assets is expensed under
operating costs on an ongoing basis. Costs and improvements are added
to the cost of the asset and depreciated in line with the asset. The differ-
ence between maintenance and cost / improvement is calculated in rela-
tion to the condition of the asset at the time of acquisition.
Depreciations are charged to the income statement using the straight-line
method over estimated utilised lifetime.
When an indication that the carrying amount of a fixed asset is higher
than its fair value occurs, an impairment test is performed. If the carrying
NORBIT ANNUAL REPORT 2022
103
FINANCIAL STATEMENTS
|
NORBIT ASA
amount is higher than both the sales value and the recoverable amount,
a write-down is made to the higher of the sales value and the recoverable
amount. Previous write-downs, with the exception of the write-down of
goodwill, are reversed if the conditions for the write-down no longer exist.
RECEIVABLES
Receivables are recognised in the balance sheet at face value after deduc-
tion for provisions for expected losses. Provisions for losses are made on
the basis of an individual assessment of the receivables. Other receivables,
both current and non-current receivables, are recognised at the lower of
par value and fair value.
FOREIGN CURRENCY
Foreign-currency-denominated monetary items are valued at the year-
end exchange rate, and currency translation effects are presented as part
of net financial items. Foreign currency transactions are recorded at the
exchange rate on the transaction date.
PENSIONS
Commitments to contribute pension arrangements to employees are
charged to the income statement when they occur.
TAXES
The tax expense in the income statement includes both the tax payable for
the period and the change in deferred tax. Deferred tax is calculated on
the basis of the temporary differences that exist between accounting and
tax values, as well as any tax loss carryforwards at the end of the financial
year. Tax-increasing and tax-reducing temporary differences that reverse
or can reverse in the same period are offset. The recognition of deferred
tax assets on net tax-reducing differences that are not offset and loss car-
ryforwards is justified on the basis of expected future earnings. Deferred
tax and tax assets that can be recognised in the balance sheet are entered
net in the balance sheet. Tax reduction on group contribution provided,
and tax on received group contribution, which is recognised as a reduc-
tion of the capitalised amount on investment in subsidiaries, is recognised
directly against tax in the balance sheet (against tax payable if the group
contribution has an effect on tax payable and against deferred tax if the
group contribution has an impact on deferred tax). tax). Deferred tax is
recognised at nominal amount.
CASH FLOW STATEMENT
The cash flow statement is prepared according to the indirect method.
Cash and cash equivalents comprise cash, bank deposits, and other short-
term liquid placements.
NOTE 03
Revenues
All revenue relates to license fees, office rent and management services
to Norwegian group companies.
NOTE 04
Payroll expenses, number of employees and benefits
Amounts in NOK million
2022
2021
Salaries/wages
31.9
22.2
Payroll tax
4.6
3.2
Pension expenses
1.2
0.9
Other remuneration
1.0
0.3
Total employee benefit expenses
38.7
26.6
The number of FTEs in the financial year has been
22
18
Remuneration to executives
2022
2021
Amounts in NOK million
CEO
Board
CEO
Board
Salaries
3.1
-
3.0
-
Share-based payments and bonuses
1.3
-
0.5
-
Board fees
-
1.5
-
1.4
Pension expenses
0.1
-
0.1
-
Other remuneration
0.0
-
0.0
-
Total
4.5
1.5
3.6
1.4
NORBIT ANNUAL REPORT 2022
104
FINANCIAL STATEMENTS
|
NORBIT ASA
The parent company has pension plans secured through collective
agreements in life insurance companies. NORBIT ASA is subject to the
Norwegian Act on Occupational Pensions, and the parent company
meets the requirement of this legislations through its defined contribu-
tion plans. The defined contribution plan means that the parent company
has not incurred any future obligation. After the annual grant is paid
NORBIT ASA has fulfilled its obligation in accordance with the arrange-
ment.
NOTE 05
Tangible and intangible assets
Amounts in NOK million
Patents
Office equipment
Buildings
Total
Purchase cost per 1 January
0.7
4.9
0.4
6.0
Additions
0.2
0.9
0.0
1.1
Disposals
0.0
0.0
0.0
0.0
Purchase cost per 31 December
0.8
5.8
0.4
7.1
Accumulated depreciation per 31 December
0.0
3.7
0.2
3.9
Net book value per 31 December
0.8
2.1
0.2
3.1
Depreciation in the year
1.0
0.1
1.1
Estimated useful life
Indefinite
3-5 years
3-5 years
Depreciation plan
N/A
Linear
Linear
NOTE 06
Other operating expenses
Amounts in NOK million
2022
2021
Office premises
9.9
8.0
External services
16.7
19.4
Audit fees
0.5
1.1
Marketing
0.6
0.6
Other operating expenses
2.9
2.6
Total other operating expenses
30.7
31.7
Expensed audit fee
Amounts in NOK million
2022
2021
Audit fee
0.5
0.4
Tax advisory fee
0.0
0.0
Non-audit services
0.0
0.7
Total audit fees
0.5
1.1
NORBIT ANNUAL REPORT 2022
105
FINANCIAL STATEMENTS
|
NORBIT ASA
NOTE 07
Financial income and financial expenses
Amounts in NOK million
2022
2021
Financial income - investment in subsidiaries
158.6
100.9
Interest income from group companies
6.2
1.2
Other interest income
3.6
2.1
Other financial income
0.0
4.4
Total financial income
168.4
108.5
Impairment of shares in subsidaries
0.0
(20.0)
Other interest expenses
(4.4)
(1.4)
Other financial expenses
(3.4)
(3.5)
Total financial expenses
(7.8)
(24.9)
Total net financial items
160.6
83.7
NOTE 08
Taxes
Calculation of deferred tax/deferred tax benefit
Amounts in NOK million
2022
2021
Temporary differences
Tangible
(0.5)
(0.4)
Net temporary differences
(0.5)
(0.4)
Basis for deferred tax
(0.5)
(0.4)
Basis for income tax expense, changes in deferred tax and tax payable
Profit/(loss) before taxes
121.2
49.8
Permanent differences
7.9
27.6
Basis for the tax expense for the year
129.0
77.5
Change in temporary differences
0.1
0.1
Basis for payable taxes in the income statement
129.2
77.6
+/- Group contributions received/given
(74.4)
(39.5)
Taxable income (basis for payable taxes in the balance sheet)
54.8
38.1
Components of the income tax expense
Payable tax on this year's profit/(loss)
28.4
17.1
Change in deferred tax
(0.0)
(0.1)
Tax expense
28.4
17.0
Payable tax in the tax charge
28.4
17.1
Tax effect of group contribution
(16.4)
(8.7)
Payable tax in the balance sheet
12.0
8.4
Reconciliation of the tax expense
Tax expense based on current year tax rate
26.7
11.0
Tax effect of permanent differences
1.7
6.1
Tax expense
28.4
17.0
NORBIT ANNUAL REPORT 2022
106
FINANCIAL STATEMENTS
|
NORBIT ASA
NOTE 09
Equity
Change in equity for the year
Amounts in NOK million
Share capital
Share premium
Other equity
Total
Equity at 1 January
5.8
308.8
152.2
466.8
Ordinary share issue
0.0
11.2
0.0
11.2
Treasury shares
0.0
0.0
(0.5)
(0.5)
Profit for the year
0.0
0.0
92.8
92.8
Dividends
0.0
0.0
(41.2)
(41.2)
Equity at 31 December
5.9
319.9
203.3
529.1
The parent company’s share capital consists of 58 901 139 shares with
a par value of NOK 0.10. The board of directors has proposed that NOK
0.70 per share is paid as dividend for the financial year 2022 (NOK 41.2
million).
As per the same date, NORBIT ASA held 16,832 own shares. At Decem-
ber 31, 2022, there were 106 840 restricted stock units ('RSUs') out-
standing. Half will vest in the second quarter of 2023, while the
remaining half will vest in second quarter 2024. The RSUs are included in
the calculation of diluted earnings per share.
In 2022 and based on the authorisations granted at the Annual Gen-
eral Meeting in May 2022, board of directors resolved to increase the
company's share capital by NOK 6 112.90 in connection with exercise of
restricted stock units through the issuance of 61 129 new shares, each
with a par value of NOK 0.10. This represented 0.1 per cent of the total
share capital prior to the transaction.
The board also resolved to increase the company's share capital by NOK
38 070.80, in connection with incentive share purchase programs for
employees, through the issuance of 380 708 new shares, each with a
par value of NOK 0.10. This represented 0.7 per cent of the total share
capital prior to the transaction.
NORBIT ANNUAL REPORT 2022
107
FINANCIAL STATEMENTS
|
NORBIT ASA
NOTE 10
Investments in subsidiaries and associated companies
Value in NOK thousand
Business office
Ownership/
voting right
Equity
(100%)
Profit/(loss)
(100%)
Book value
Subsidiary
NORBIT Subsea AS
Trondheim
100.00%
58.6
84.2
84.9
NORBIT ITS AS
Trondheim
100.00%
61.2
5.3
81.3
NORBIT EMS AS
Selbu/Røros
100.00%
87.6
28.0
66.9
NORBIT ODM AS
Trondheim
100.00%
13.1
5.2
7.7
NORBIT Aptomar AS
Trondheim
100.00%
46.0
(4.6)
8.7
Fenrits AS
Trondheim
100.00%
0.9
0.0
1.4
NORBIT NV AS
Trondheim
100.00%
0.3
0.0
0.6
NORBIT Kabelpartner AS
Trondheim
100.00%
5.3
6.9
3.5
NORBIT Nicarnica AS
Trondheim
100.00%
15.3
16.4
0.9
Aursund Maskinering AS
Trondheim
100.00%
7.1
0.0
9.3
NORBIT GmbH
Vienna
100.00%
0.1
0.2
0.5
NORBIT s.r.l
Lanciano
100.00%
0.1
0.0
0.1
NORBIT Hungary Kft.
Budapest
100.00%
(2.8)
(3.1)
0.1
NORBIT Sweden AB
Gothenburg
100.00%
0.0
0.0
0.1
NORBIT Singapore Ltd.
Singapore
100.00%
0.6
0.2
0.1
NORBIT Poland Sp. z.o.o.
Gdansk/Sopot
100.00%
2.0
0.5
0.0
NORBIT US Ltd.
Santa Barbara
100.00%
8.4
5.4
0.0
NORBIT China Co., Ltd
Shanghai
100.00%
0.3
0.1
0.2
NORBIT Ltd (Kilmore Marine Ltd)
Aberdeen
100.00%
3.8
0.7
6.4
NORBIT Holding Kft
Budapest
100.00%
(18.8)
(9.3)
0.1
NORBIT Czezh Republic s.r.o
Brno
100.00%
0.0
0.0
0.0
NORBIT Denmark ApS
Copenhagen
100.00%
0.2
0.2
0.1
Book value at 31 December
272.8
Associated companies
Kvikna Consulting Ehf.
Reykjavik
33.33%
0.8
(0.1)
0.0
NORBIT Germany GmbH
Hamburg
50.00%
0.0
0.0
0.0
Book value at 31 December
0.0
Trade receivables
Other receivables
Amounts in NOK million
2022
2021
2022
2021
Group companies
2.3
1.0
428.0
286.8
Sum
2.3
1.0
428.0
286.8
Trade payables
Other short-term liabilities
Amounts in NOK million
2022
2021
2022
2021
Group companies
0.0
0.0
0.0
0.0
Sum
0.0
0.0
0.0
0.0
Non current receivables
Non current liabilities
Amounts in NOK million
2022
2021
2022
2021
Group companies
158.8
91.2
0.0
0.0
Sum
158.8
91.2
0.0
0.0
NORBIT ANNUAL REPORT 2022
108
FINANCIAL STATEMENTS
|
NORBIT ASA
NOTE 11
Restricted bank deposits
Restriced bank deposits
Amounts in NOK million
2022
2021
Bank deposits restricted to tax payments
1.1
1.0
NOTE 12
Receivables and liabilities
Receivables with maturity later than one year
Amounts in NOK million
2022
2021
Loans to companies in the same group
158.8
91.2
Sum
Interest-bearing borrowings
Overdraft facility
140.6
86.5
Revolving credit facility
90.0
60.0
Sum
230.6
146.5
Debt secured by mortgage
Long-term debt
90.0
60.0
Short-term debt
140.6
86.5
Total
230.6
146.5
Book value of pledged assets
Fixed assets
2.1
2.2
Receivables
430.3
287.8
Sum
432.4
290.0
The parent company has three loan facilities, comprising of a long-term
revolving credit facility (RCF), a short-term overdraft facility and a term loan.
The facilities have credit limits of NOK 200 million, NOK 350 million and
NOK 120 million, respectively. NOK 140.6 million was drawn on the over-
draft facility at 31 December 2022, while NOK 90.0 million was drawn on
the RCF. The term loan was not drawn on at 31 December 2022.
The RCF is priced at 3M NIBOR + 1.8 per cent margin p.a., the overdraft facil-
ity is priced at 1M reference rate (NOK, USD and EUR) + 1.4 per cent margin
p.a., while the term loan is priced at 3M NIBOR + 2.15 per cent margin p.a.
The maturity date for the RCF is February 2025 and June 2026 for the NOK
120 million term loan. The term loan amortise over 7 years. The overdraft
facility is refinanced each year on a rolling basis.
NOTE 13
Forward contracts
NORBIT ASA has no forward exchange contracts or other financial
instruments at the end of the financial year.
NORBIT ANNUAL REPORT 2022
109
FINANCIAL STATEMENTS
|
NORBIT ASA
NOTE 14
Transactions with related parties
Related-party transactions:
Amounts in NOK million
2022
2021
Sales of goods and services
Revenue from licenses, management fees and services to group companies
31.0
25.3
STATEMENT BY THE BOARD OF DIRECTORS AND CEO
WE CONFIRM, TO THE BEST OF OUR KNOWLEDGE, THAT
■
The group financial statements for the period from 1 January to 31 December 2022 have been prepared in accordance with
IFRS, as adopted by the EU
■
The financial statements of NORBIT ASA for the period from 1 January to 31 December 2022 have been prepared in
accordance with Norwegian Accounting Act and accounting standards and practices generally accepted in Norway
■
The financial statements give a true and fair view of the group and the company’s consolidated assets, liabilities, financial
position and results of operations
■
The report of the board of directors provides a true and fair view of the development and performance of the business and
the position of the group and the company, together with a description of the key risks and uncertainty factors that the
group and the company is facing
Trondheim, Norway, 29 March 2023
The board of directors and CEO
NORBIT ASA
Finn Haugan
Bente Avnung Landsnes
Christina Hallin
Chair of the board
Deputy chair of the board
Director
Trond Tuvstein
Magnus Reitan
Per Jørgen Weisethaunet
Director
Director
Chief executive officer
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AUDITOR’S REPORT
PricewaterhouseCoopers AS, Dronning Eufemias gate 71, Postboks 748 Sentrum, NO-0106 Oslo
T: 02316, org. no.: 987 009 713 MVA, www.pwc.no
Statsautoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap
To the General Meeting of NORBIT ASA
Independent Auditor’s Report
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of NORBIT ASA, which comprise:
•
the financial statements of the parent company NORBIT ASA (the Company), which comprise
the statement of financial position as at 31 December 2022, the statement of income and
statement of cash flows for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies, and
•
the consolidated financial statements of NORBIT ASA and its subsidiaries (the Group), which
comprise the statement of financial position as at 31 December 2022, the statement of
income, statement of other comprehensive income, statement of changes in equity and
statement of cash flows for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies.
In our opinion
•
the financial statements comply with applicable statutory requirements,
•
the financial statements give a true and fair view of the financial position of the Company as at
31 December 2022, and its financial performance and its cash flows for the year then ended in
accordance with Norwegian Accounting Act and accounting standards and practices generally
accepted in Norway, and
•
the consolidated financial statements give a true and fair view of the financial position of the
Group as at 31 December 2022, and its financial performance and its cash flows for the year
then ended in accordance with International Financial Reporting Standards as adopted by the
EU.
Our opinion is consistent with our additional report to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the
Auditor’s Responsibilities for the
Audit of the Financial Statements
section of our report. We are independent of the Company and the
Group as required by relevant laws and regulations in Norway and the International Ethics Standards
Board for Accountants’ International Code of Ethics for Professional Accountants (including
International Independence Standards) (IESBA Code), and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit
Regulation (537/2014) Article 5.1 have been provided.
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We have been the auditor of the Company for 14 years from the election by the general meeting of the
shareholders on 22 September 2009 for the accounting year 2009.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Valuation of intangible assets
has the same characteristics and risks as in the prior year, and therefore
continues to be an area of focus this year. Additionally,
Valuation of Inventory
is considered to be a
new key audit matter this year due to the significance of the inventory balance to the financial
statement, and the application of management judgment as it relates to determination of fair value.
Key Audit Matters
How our audit addressed the Key Audit Matter
Valuation of intangible assets
Intangible assets mainly consist of
self-
developed software and hardware used in
own products. The value represents
approximately 2
1% of the
Group’s
total
assets, with a book value of mNOK 2
58,8 at
31
December 2022. No impairments have
been recognized in 202
2 as management
’s
analysis conclud
ed that there were no
impairment indicators present.
The value of
intangible assets depends on
future income. We focused on
valuation of
intangible assets
due to the significance of
the amount and
because
management’s
valuation depends on
discretionary
assumptions
, such as projections for future
income and costs and discount rate used.
A more detailed description of the
methodology management used to identify
impairment indicators is described in note 4
and 13.
We obtained and understood management’s
documented evaluation of whether impairment
indicators related to the intangible assets were
present. Management
’s eva
luation was performed
per group of intangible assets. Furthermore, the
main assumptions made by management to
identify possible impairment indicators were
documented. Our assessment suggested that
management’s model
was based on a recognized
valuation methodology. We also assessed the
logical structure and tested mathematical accuracy
of the model without finding material deviations.
We challenged management’s use of assumptions
for projections of future income and costs by
comparing these against co
mpany’
s historic results
and approved budgets. To assess the accuracy of
the budgets, we compared historical year-end
results with previous years’ budgets. To evaluate
assumptions about future income and costs, we
analyzed whether the budgets were based on
historical income and considered whether the
growth assumptions were reasonable. We found
that the assumptions were aligned with historical
results and in line with budgets, and that there was
a reasonable alignment between the historical
year-end results and respective budgets.
The discount rate used was assessed against
empirical data and expectations about the future
return, relevant risk premium and gearing ratio. We
concluded that the used discount rate was
reasonable.
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Valuation of inven
tory
The
Group
’
s inventory represents
approximately
35
% of total asset value, with
a book value of
mNOK 426,3 at 31
December 2022
.
Inventory consists of raw materials, work in
progress and finished goods
, and is valued
at the lower of cost and
net realizable value
.
We focused on
valuation of inventory due
to
the significance of the amount and because
determination of
fair value requires
application of
management judgement.
For
a description of the inventory’s
composition and provision for
obsolescence, refer to note 14
.
We read the relevant notes and found the
information and explanations provided consistent
and sufficient.
We observed the Group
’s
routines for physical
inventory count including performing sample-
based
test counts and testing of the company’s internal
control related to rolling inventory counts. These
activities enabled us to determine quantity and
existence of the inventory.
To
test management’s
valuation of raw materials,
we checked a sample book values against
invoices. To test valuation of work in progress and
finished goods, we considered the method used to
compute the value. Furthermore, we tested the
input data in the calculations against incoming
invoices and hourly rates used. We noted no
material errors.
We also reviewed and evaluated management
’
s
method for identification and calculation of
obsolescence. The method is partially based on
experience and partially on models where
inventory turnover is a key component. We
challenged management by discussing the total
size of the booked obsolescence with them.
Through our presence at the inventory count, we
checked whether damaged goods were identified,
assessed and valued. Furthermore, we tested the
provision for obsolescence against a specification
of identified obsolete goods including overviews of
goods with a low turnover. We also performed an
analysis of the level of obsolescence provision
compared to previous years. Our work did not
detect significant deviations.
We read the relevant notes and found the
information and explanations provided consistent
and sufficient.
Other Information
The Board of Directors and the Managing Director (management) are responsible for the information
in the Board of Directors’ report an
d the other information accompanying the financial statements. The
other information comprises information in the annual report, but does not include the financial
statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover
the information in the Board of Directors’ report nor the other information accompanying the financial
statements.
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In connection with our audit of the financial statements, our responsibility is to read the Board of
Directors’ report and the
other information accompanying the financial statements. The purpose is to
consider if there is material inconsistency
between the Board of Directors’ report and the other
information accompanying the financial statements and the financial statements or our knowledge
obtained in the audit, or whether the Board of Directors’ report and the other information
accompanying the financial statements otherwise appear to be materially misstated. We are required
to report if there is a material misstatement in the B
oard of Directors’ report or the other information
accompanying the financial statements. We have nothing to report in this regard.
Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report
•
is consistent with the financial statements and
•
contains the information required by applicable statutory requirements.
Our opinion on the Boa
rd of Director’s report applies correspondingly to the statement
s on Corporate
Governance and Corporate Social Responsibility.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in
accordance with the Norwegian Accounting Act and accounting standards and practices generally
accepted in Norway, and for the preparation and true and fair view of the consolidated financial
statements of the Group in accordance with International Financial Reporting Standards as adopted
by the EU, and for such internal control as management determines is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, management is responsible for a
ssessing the Company’s and
the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern. The financial statements of the Company use the going concern basis of accounting insofar
as it is not likely that the enterprise will cease operations. The consolidated financial statements of the
Group use the going concern basis of accounting unless management either intends to liquidate the
Group or to cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an aud
itor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
•
identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error. We design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The
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risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
•
obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's and the Group's internal control.
•
evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
•
conclude on the appropriateness of management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Company's and the
Group's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to t
he related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Company and the Group to cease to
continue as a going concern.
•
evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves a true and fair view.
•
obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
We communicate with the Board of Directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the Board of Directors, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
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Report on Other Legal and Regulatory Requirements
Report on Compliance with Requirement on European Single Electronic Format (ESEF)
Opinion
As part of the audit of the financial statements of NORBIT ASA, we have performed an assurance
engagement to obtain reasonable assurance about whether the financial statements included in the
annual report, with the file name "254900C08RCMXVZYFY97-2022-12-31-en.zip", have been
prepared, in all material respects, in compliance with the requirements of the Commission Delegated
Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) and
regulation pursuant to Section 5-5 of the Norwegian Securities Trading Act, which includes
requirements related to the preparation of the annual report in XHTML format, and iXBRL tagging of
the consolidated financial statements.
In our opinion, the financial statements, included in the annual report, have been prepared, in all
material respects, in compliance with the ESEF regulation.
Management’s Responsibilit
ies
Management is responsible for the preparation of the annual report in compliance with the ESEF
regulation. This responsibility comprises an adequate process and such internal control as
management determines is necessary.
Auditor’s Responsibilities
F
or a description of the auditor’s responsibilities when performing an assurance engageme
nt of the
ESEF reporting, see:
https://revisorforeningen.no/revisjonsberetninger
Trondheim, 29 March 2023
PricewaterhouseCoopers AS
Kjetil Smørdal
State Authorised Public Accountant
(This document is signed electronically)
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EBITDA
Short for earnings before interest, tax, depreciation and
amortisation. EBITDA corresponds to operating profit before
depreciation and amortisation expenses, as reported in the
consolidated statement of profit and loss. EBITDA is a key
performance indicator that the company considers relevant
for understanding the generation of profits.
EBITDA margin
EBITDA as a percentage of revenues. The EBITDA margin
is a key performance indicator that the company considers
relevant for understanding the profitability of the business and
for making comparisons with other companies.
EBIT
Short for earnings before interest and tax and corresponds to
operating profit in the consolidated statement of profit and loss.
EBIT is a key performance indicator that the company considers
relevant, as it facilitates comparisons of profitability over time
independent of corporate tax rates and financing structures.
EBIT margin
EBIT as a percentage of revenues. The EBIT margin is a key
performance indicator that the company considers relevant for
understanding the profitability of the business and for making
comparisons with other companies.
EQUITY RATIO
Total equity divided by total assets. The equity ratio is a key
performance indicator that the company considers relevant for
assessing its financial leverage.
NET INTEREST-BEARING BORROWINGS
Net interest-bearing borrowings is defined as total interest-
bearing borrowings less cash and cash equivalents.
NET WORKING CAPITAL
Net working capital is defined as the sum of inventories, trade
receivables and other receivables and prepayments, less the
sum of trade payables and other current liabilities, as reported
in consolidated statement of financial position.
R&D INVESTMENTS
R&D investments is equal to payments for intangible assets, as
reported n the consolidated statement of cash flows.
AVERAGE PRE-TAX RETURN ON CAPITAL EMPLOYED
Average pre-tax return on capital employed is defined as EBIT
divided by average capital employed in the financial year.
Capital employed is defined as the sum of total equity, plus
interest-bearing borrowings and lease liabilities less cash and
cash equivalents, as reported in the consolidated financial
position.
DEFINITIONS OF ALTERNATIVE PERFORMANCE MEASURES
Your notes
Your notes
