D E N K A H O L D I N G A / S

Transkript

1 Å R S R A P P O R T / ANNUAL REPORT / D E N K A H O L D I N G A / S

2 Å R S R A P P O R T / Mapic prisvinder Verdens mest dynamiske detailkoncept indenfor 'Møbler og husholdningsudstyr'. Mapic Award winner The world s most dynamic retail concept in Household goods and electronics. ANNUAL REPORT / Indholdsfortegnelse / Contents Side / Page Hovedtal / Financial Highlights 4 Bestyrelse og direktion / Supervisory and Executive Boards 5 Koncernstruktur / Group Structure 6 Forretningsgrundlag / Business Base 7-11 Ledelsens årsberetning / Management's Review Segmentoversigt / Segment Information 22 Ledelsens regnskabspåtegning / Statement by the Supervisory and Executive Boards on the Annual Report 23 Ejerforhold / Ownership 23 Anvendt regnskabspraksis / Accounting Policies Applied Revisionspåtegning / Auditors' Report 32 Resultatopgørelse / Income Statement 33 Denka Holding A/S Post Box 189 Mørupvej 16 DK-7400 Herning Tel Fax CVR no Balance / Balance Sheet Egenkapitalopgørelse / Statement of Equity Movements 36 Pengestrømsopgørelse / Cash Flow Statement 37 Noter til årsrapporten / Notes to the Annual Financial Statements /1 Club 8 Company In-House Translation: Eunike Hansen Layout: Midt Marketing A/S Print: Delta Grafisk A/S Generalforsamling Mandag, den 29. august 2005 kl i selskabets lokaler, Mørupvej 16, 7400 Herning. General Meeting On Monday 29 August 2005 at 4 pm at the address of the company, Mørupvej 16, 7400 Herning, Denmark. D E N K A H O L D I N G A / S

3 Hovedtal for Denka koncernen Financial Highlights for the Denka Group Bestyrelse og direktion Supervisory and Executive Boards Koncern / Group Resultatopgørelse i mio. kr. Nettoomsætning Bruttooverskud Resultat af primær drift Finans, netto Resultat før skat og minioritetsinteresser Resultat efter skat Income statement in DKK mill. Revenue Gross profit Profit/loss from operating activities Financing, net Profit/loss before tax and minority interests Profit/loss after tax 2000/ / / / /05 707,1 732,5 682,4 741,7 795,6 268,7 244,0 233,6 290,7 315,3 41,2 3,8-34,3-16,7 13,6-13,5-10,8-14,2-13,9-12,4 27,1-8,0-53,8-29,1 1,2 19,1-10,9-43,8-29,4 0,5 Bestyrelse / Bestyrelses- og direktionshverv i andre danske selskaber / Supervisory Board Directorships and executive positions with other Danish Companies Formand / Chairman of the Board Svend Sigaard Dong A/S Kaaesvej 2, Thorsted, Ulfborg Næstformand / Vice-Chairman Ebbe Pelle Jacobsen KVIK Holding A/S, Jørgen Møllers Fond, Audionord International A/S Henri de Winterlei 17, Brasschat BoConcept Brand Stores Balance i mio. kr. Anlægsaktiver Omsætningsaktiver Balancesum Egenkapital Rentebærende gæld Nøgletal Overskudsgrad Overskud pr. 100 kr. aktie Egenkapitalens forrentning Egenkapitalandel, % Indre værdi Gennemsnitligt antal medarbejdere, heltids Aktionærrelationer Aktieudbytte, mio. kr. Børskurs, ultimo Aktiekapital, mio. kr. Kurs/indre værdi Price/earning ratio, ultimo Balance sheet details in DKK mill. Fixed assets Current assets Balance sheet total Equity Interest bearing debt Financial ratios Operating margin Earnings per share of DKK 100 Return on equity Equity ratio % Book value Average number of employees, full-time Stock market ratios Dividend, DKK million Market price at year-end Share capital, DKK million Price/book value Price/earnings ratio, year end 221,1 264,4 266,9 258,8 251,2 340,4 295,6 294,4 270,7 277,3 561,5 560,0 561,3 529,5 528,5 188,0 174,4 132,8 97,2 98,2 268,7 282,9 345,2 328,1 317,2 5,7 0,4-5,8-2,3 1, ,6 0,0 0,0 0,0 0, ,0 26,0 26,0 26,0 26,0 1,2 0,8 0,7 0,8 0,9 12, Christian Majgaard Brandtex A/S, Kwintet A/S, H. Daugaard Holding A/S, Kronprinsensgade 21, Odense Kolding Havneterminal A/S, Blue Willi's A/S George Theodoridis Ingen / None 54, Vas. Pavlou Str, Athen Christian Feddersen* Ingen / None Ålvej 21a, Ål, Vinderup Emil Poulsen* Ingen / None Brombærvej 27, Ølgod Birgit Lørup* Ingen / None Baunsbjergvej 5, Barde, Videbæk Direktion / Executive Board Viggo Mølholm International Claire Group A/S Hans Barslund Ingen / None * Medarbejdervalgt bestyrelsesmedlem / Employee Representative Nøgletallene er beregnet efter Finansanalytiker Foreningens 'Anbefalinger og Nøgletal Nettoomsætning / Revenue The financial ratios have been calculated in accordance with the guidelines for the Calculation of Financial Ratios and Key Figures 1997 issued by the Danish Society of Investment Professionals. Resultat efter skat / Profit/loss after tax Egenkapital / Equity Nærtstående parter Følgende personer er som følge af betydelig indflydelse på virksomhedens drift at betragte som nærtstående parter: Viggo Mølholm Gennem ejerskab og som direktør i selskabet Mogens Ærthøj Gennem ejerskab og som direktør i tilknyttede virksomheder Hans Barslund Som direktør i selskabet Bestyrelsesmedlemmerne Gennem deres plads i bestyrelsen Der har ikke været transaktioner med disse personer udover almindeligt ansættelsesforhold. Mio. kr. DKK mill. 800 Mio. kr. DKK mill. 30 Mio. kr. DKK mill. 250 Related parties The following persons are considered related parties due to their having a significant influence on the company's operations: D E N K A H O L D I N G A / S / / / / / Viggo Mølholm By virtue of ownership and in his capacity of executive officer of the company Mogens Ærthøj By virtue of ownership and in his capacity of executive officer of the group enterprises Hans Barslund In his capacity of executive officer of the company Members of the Supervisory Board By virtue of their positions on the board No transactions have been conducted with the said persons other than within the framework of their employment / / / / / / / / / /05 5

4 Koncernstruktur Group Structure Denka Holding A/S Forretningsgrundlag Business Base 100% 100% 100% Club 8 Company A/S Dencon A/S Club 8 Retail A/S Koncernstruktur Denka Holding A/S' formål er i dag en 100% ejerbesiddelse af aktiviteterne i selskaberne Club 8 Company A/S, Club 8 Retail A/S og Dencon A/S. Group structure Today the current object of Denka Holding A/S is full ownership of the activities of the companies Club 8 Company A/S, Club 8 Retail A/S and Dencon A/S. Production 100% 100% 100% 100% 100% 100% 100% UAB Club 8 Company, Lithuania Club 8 Company Deutschland GmbH, Germany Club 8 Company AB, Sweden Club 8 Company UK Ltd., UK Club 8 Company Inc., USA BoConcept Poland Sp.z o. o., Poland 4 Brand Stores BoConcept Deutschland GmbH, Germany 2 Brand Stores 100% 100% 100% 100% Club 8 Company K.K., Japan 3 Brand Stores BoConcept S.a.r.l., France 1 Brand Store Club 8 Retail Inc., USA 3 Brand Stores BoConcept (UK) Limited, UK 3 Brand Stores Alle operationelle aktiviteter finder sted i Club 8 Company A/S, som er konceptholder for franchisekæden BoConcept. Club 8 Company A/S omfatter desuden udvikling, produktion og salg af møbler til private hjem. Dencon A/S omfatter udvikling, produktion og salg af kontormøbler til det professionelle marked, mens Club 8 Retail A/S driver retailaktiviteter indenfor koncernens detailhandelskæde BoConcept. Vision At gøre BoConcept til nr. 1 brand inden for boligindretning globalt via passion, concept og cost efficiency. All operational activities are handled by Club 8 Company A/S, which is the concept holder of the franchise chain BoConcept. In addition, Club 8 Company A/S is in charge of the development, manufacture and sale of furniture for private homes. The activities of Dencon A/S include the development, manufacture and sale of office furniture for the business sector, while Club 8 Retail A/S operates the retail business of the Group's BoConcept chain of stores. Vision To make BoConcept the no. 1 brand globally within home furnishing via passion, concept and cost efficiency. LEDELSE Direktion, Denka Holding A/S Viggo Mølholm, koncernchef. Hans Barslund, koncerndirektør. MANAGEMENT Executive Board, Denka Holding A/S Viggo Mølholm, President & CEO. Hans Barslund, Vice President & CFO. Mission Gennem konceptløsninger og dedikeret, fokuseret indsats at gøre modulære designmøbler tilgængelige for de mange bevidste forbrugere i udvalgte metropoler i verden. Mission Through our dedicated, focussed effort and by means of concept solutions, we aim to make modular design furniture available to the many style-conscious consumers in selected metropolises in the world. Ledergruppe, Club 8 Company A/S Group Management, Club 8 Company A/S Viggo Mølholm, adm. direktør. Viggo Mølholm, Managing Director. Hans Barslund, vice adm. direktør. Hans Barslund, Vice Managing Director. Mogens Ærthøj, IT-direktør. Mogens Ærthøj, IT Director. Torben Paulin, retail- og salgsdirektør. Torben Paulin, Retail & Sales Director. Troels Dyrup Petersen, Supply Chain direktør. Troels Dyrup Petersen, Supply Chain Director. Claus Svenningsen, divisionsdirektør, polster. Claus Svenningsen, Division Manager, upholstery. Palle Larsen, Brand & Concept chef. Palle Larsen, Brand & Concept Manager. Kenneth Barsballe, Retail chef. Kenneth Barsballe, Retail Manager. Hanne Krøjgaard, økonomichef. Hanne Krøjgaard, Financial Manager. Morten Lykke-Bøndergaard, Human Resource chef. Morten Lykke-Bøndergaard, Human Resources Manager. Stig Iversen, IT-chef. Stig Iversen, IT Manager. Carsten Jensen, distributionschef. Carsten Jensen, Distribution Manager. Ledergruppe, Dencon A/S Executive Board, Dencon A/S Henrik Feld, adm. direktør. Henrik Feld, Managing Director. Koncernens to største produktionsanlæg beliggende i Ølgod og Herning på henholdsvis m 2 og m 2. / The Group's two largest production facilities of 30,000 square metres and 24,000 square metres respectively are located at Ølgod and Herning. Brands Club 8 Company fokuserer på et brand BoConcept. Fra efteråret 2005 vil brugen af Club 8 logoet ophøre helt, således at strategien om at samle alt omkring BoConcept brandet vil være fuldt gennemført. Derved opnås de store marketingmæssige synergier mellem produkt- og retailbrandet. Koncernens primære produktprogram omhandler møbelkoncepter, som markedsføres gennem franchisekæden BoConcept, hvor målgruppen er den moderne og trendsættende forbruger, der ønsker value for money. Produktprogrammet udvikles og ajourføres med udgangspunkt i at give et optimalt sortiment til en m 2 BoConcept Brand Store. Det er strategien løbende at komme med produktnyheder, samt at de eksisterende produktkoncepter løbende plejes, så de til enhver tid er aktuelle på markedet. Livscyklusen bliver derved så lang som muligt. Samtidig skabes der forudsætning for en rationel logistik, og delkomponenter genanvendes fra program til program. Salg og servicering af BoConcept Brand Stores og BoConcept Studios sker parallelt ud fra et ønske om at optimere indsatsen og styrke brandet. Brands The strategy is to focus on one brand that of BoConcept. As of autumn 2005, we will cease to market under the Club 8 logo, meaning that our strategy to concentrate our focus exclusively on the BoConcept brand will be fully implemented by then. This guarantees great marketing synergies between the product and the retail brand. The Group's primary product range consists of furniture concepts that are distributed through the BoConcept chain of stores, targeting the modern, trendsetting consumer who wants value for money. Our product range is constantly being expanded and updated to provide a 1,000 m 2 BoConcept Brand Store with the widest possible range. Our vision is to regularly launch new products while maintaining the existing product concepts in order for them to continue to reflect current market trends at all times. This ensures the longest possible life cycle of a product, in that components can be reused from programme to programme, thus creating the basis for efficient logistics. The sale and servicing of the BoConcept Brand Stores and the BoConcept Studios take place in parallel, thereby optimising and strengthening the brand. 6 7

5 Ved udgangen af regnskabsåret 2004/05 var der i alt 141 BoConcept Brand Stores. I de kommende år forventes der åbning af mellem nye Brand Stores pr. år, der vil give en nettotilgang på Brand Stores. Sideløbende hermed vil der marked for marked ske en konvertering af de sidste Club 8 studier til BoConcept Studios samt åbning af nye BoConcept Studios. At the end of the financial year 2004/2005 there were a total of 141 BoConcept Brand Stores. In the years ahead we expect to open another 25 or 35 new Brand Stores a year, resulting in a net addition of Brand Stores. Concurrently, we will convert the last Club 8 studios to BoConcept Studios market by market as well as open new BoConcept Studios. Roskilde, Denmark Gijón, Spain Den typiske BoConcept Brand Store er i dag mellem m 2 og har et moderne, stilrent udtryk. Hovedparten af de produkter, som afsættes gennem butikkerne, er koncernens egne designede produkter. Den resterende del er særligt udvalgte accessories og komplementærmøbler primært importeret fra lavtlønslande. BoConcept Brand Stores typically cover an area of m 2 and are distinguished by a modern, minimalist style. The majority of the products sold through the stores are products of the Group's own design. These are complemented by specially selected accessories and complementary furniture, primarily imported from low pay countries. New York, USA Shanghai, China Tokyo, Japan London, United Kingdom Fra koncernens centrale afdeling for branding styres konceptet stramt, hvorved alle butiksenheder worldwide fremstår med en ens og klar profil. Herfra sker også butiksprojektering, sortimentsstyring, udarbejdelse af marketing, uddannelsesplaner og konceptudvikling i det hele taget. Med BoConcept Brand Stores sikrer koncernen sig direkte indflydelse på afsætning, priselasticitet og levetid på produkter. Ved regnskabsårets afslutning er der i 77 Brand Stores installeret butiksstyringssystemet, Axapta. Det forøger ikke kun den enkelte forretningsenheds effektivitet, men binder effektivt forretningsenhederne og distributionscentret i Danmark kommunikationsmæssigt sammen. Salg/Marketing Det er koncernens strategi at sælge møbelkoncepter til et veldefineret segment. Afsætningen fokuserer på den rigtige eksponering i såvel BoConcept Brand Stores som i BoConcept Studios, således at der sker en effektiv branding af produkterne. Salget optimeres løbende gennem systematisk merchandising i butikkerne, besøg af driftskonsulenter samt via BoConcept University uddannelse. Butikspersonalet skal altid have en stor kompetence og præference i salget af koncernens produkter understøttet af et professionelt marketingmateriale. Afsætningen af koncernens produkter sker globalt, men med fokus på en række udvalgte hovedmarkeder. Produktion/Logistik Club 8 Company A/S har udviklet sig fra at være møbelproducent til at være konceptholder og international distributør af et komplet produktprogram af brandede livsstilsprodukter til BoConcept Brand Stores og BoConcept Studios. Disse ændrede betingelser har medført, at Club 8 Company har etableret en struktur med større fokus på Supply Chain Management, hvor egenproduktionen består af fokuserede produktionsvirksomheder (4 fabrikker), der fungerer som leverandører på linje med eksterne leverandører. The Group's central department for branding keeps a tight rein on the concept thus ensuring that all store units world-wide present a uniform and clear corporate profile. The Brand & Concept Department also handles store planning, controls the range, drafts marketing and training plans and handles general concept development. Through the BoConcept Brand Stores, the Group can directly influence sales, price fixing and the life cycles of products. By the end of the financial year the Group had installed the enterprise resource planning system Axapta in 77 Brand Stores, which not only enhances the efficiency of the individual store, but also effectively ties together the store and distribution centre in Denmark in terms of communication. Sales/Marketing The Group strategy is to sell furniture to a clearly defined market segment. In the marketing of the products, great emphasis is placed on appropriate in-store presentation in BoConcept Brand Stores as well as in BoConcept Studios, thus ensuring that the products achieve brand name status. Sales are continually being optimised by means of systematic merchandising in the stores, visits by business operations consultants and education at the BoConcept University. The store staff must always be highly skilled and promote the sale of the Group's own products, backed by professional marketing material. The Group's products are sold world-wide, although a number of selected markets are receiving special attention. Production/Logistics Club 8 Company A/S progressed from furniture manufacturer to concept holder and international distributor of a complete range of branded lifestyle products for BoConcept Brand Stores and BoConcept Studios. These changed circumstances have led to the establishment of a structure with increased focus on the Supply Chain Management where the Group's own production consists of focussed production facilities (4 plants) acting as suppliers in line with external suppliers. 8 9 Limassol, Cyprus Auckland, New Zealand

6 Det er koncernens strategi, at produktionsenhederne har hvert deres kerneproduktionsområde, og at produktionsprocesser, der ikke dækkes af disse, vil blive indkøbt hos underleverandører. Konsekvensen af et stigende salg gennem BoConcept kæden medfører, at en stadigt stigende andel af produktprogrammet sources hos leverandører i Fjernøsten og Østeuropa. It is Group strategy for the production units to have each their own core production area and for production processes falling outside these to be provided by sub-contractors. The rise in the sales through the BoConcept chain of stores has led to an increasing share of the product range being sourced from suppliers in the Far East and Eastern Europe. For at effektivisere produktionen og sikre endnu kortere og mere præcise leveringstider til kunderne samt i højere grad være i stand til at håndtere leverancer fra underleverandører er et fuldautomatiseret højlager taget i brug i efteråret 2002 ved koncernens største produktionsanlæg i Ølgod. With a view to controlling the logistics even more effectively, improving efficiency in the production process and creating possibilities for the outsourcing of production which falls outside the core competence area, a fully automatic high-bay warehouse has been put into service at Ølgod in the autumn Dencon Dencon Mærket Dencon, der varetages af datterselskabet Dencon A/S, afsættes udelukkende gennem andre distributionskanaler end Club 8 Company produkterne nemlig til den del af kontor-kontraktmarkedet, hvor brugerne værdsætter et attraktivt design kombineret med et attraktivt prisniveau. Informationsteknologi/ Ledelsesinformationssystemer Koncernen opfatter informationsteknologi som en væsentlig konkurrenceparameter, som er en nødvendig forudsætning for at være en troværdig og konkurrencedygtig leverandør. Det velfungerende informationsteknologisystem udbygges og forbedres løbende. Human Resources Koncernen vil på alle fagområder tiltrække og uddanne de bedst egnede medarbejdere, som alle er medansvarlige for, at der udvikles, fremskaffes eller produceres kvalitetsprodukter og ydes god service overfor samarbejdspartnere helt ud til slutbrugeren og endelig, at der skabes et godt arbejdsmiljø med en høj moral. Koncernen stiller store krav til sine medarbejdere, da succesen afhænger netop af medarbejdernes passion, fleksibilitet, netværkssamarbejde samt vilje og evne til at gribe mulighederne, når de byder sig. Koncernen har en proaktiv HR strategi til at understøtte forretningsgrundlaget. HR er synlig på alle niveauer i virksomheden, da ledernes og medarbejdernes præstationer, engagement og tilfredshed er afgørende for succesen. Der arbejdes intensivt med mål og rammer både på individuelt og afdelingsniveau. Fremadrettet vil der blive arbejdet mere med performancestyring, så der hurtigere og mere effektivt kan udvikles ledere og medarbejdere, som passer til de forretningsmæssige mål. The Dencon brand, which is handled by the subsidiary Dencon A/S, is distributed exclusively through channels completely different to those used for the Club 8 Company products. It is in fact sold to those customers in the market for office contract furniture who value attractive design combined with affordable prices. Information technology/ Management information systems The Group views information technology as a vital competitive parameter and a prerequisite to being considered a reliable and competitive supplier. For this reason the Group is continually developing and improving its comprehensive and effective information technology system. Human Resources Our employees all have a share in the responsibility for the development, procurement or manufacture of high quality products and for ensuring our trading partners good service, right down to the level of end user, and last, but not least, for creating a good working environment as a basis for high morale among our staff. The Group demands much from its staff, seeing that their passion, flexibility, networking skills and their will and ability to take hold of the possibilities that arise are vital to our success. The Group has implemented a proactive human resources strategy with a view to strengthening its business base. Human resources are at play in all areas in the organisation since the performance, commitment and satisfaction of both executives and other members of staff are vital to our success. Great effort is put into impressing our objectives and framework on the individual mind and at department level. In future we will endeavour to have more performance control in order to quickly and effectively train managers and staff to suit our business objectives. 11

7 Ledelsens årsberetning ÅRETS FORLØB THE YEAR IN REVIEW Management's Review Indtjeningsudvikling Regnskabsresultatet dækker på flere områder over en positiv udvikling. Development in earnings The financial result covers a favourable development in several areas. D E N K A H O L D I N G A / S Freedom to design Årets resultat Nettoomsætningen i Denka Holding A/S, hvis aktiviteter omhandler Club 8 Company A/S, Club 8 Retail A/S og Dencon A/S, har i regnskabsåret 2004/05 udgjort 795,6 mio. kr., hvilket er en forøgelse på 53,9 mio. kr. i forhold til sidste år eller en stigning på 7,3%. Resultat af primær drift er et overskud på 13,6 mio. kr. i forhold til et underskud på 16,7 mio. kr. i sidste regnskabsår. Af resultatforbedringen i forhold til sidste år på 30,3 mio. kr. vedrører 18,1 mio. kr. en reduktion af andre driftsomkostninger vedr. engangsog restruktureringsomkostninger. Ordinært resultat før skat er et overskud på 1,2 mio. kr. i forhold til et underskud på 30,6 mio. kr. i sidste regnskabsår. Årets resultat efter skat udgør et overskud på 0,5 mio. kr. sammenholdt med sidste års underskud på 29,4 mio. kr. Resultatet betragtes på trods af den væsentlige forbedring som værende utilfredsstillende. Årets resultat ligger under det udmeldte ved regnskabsårets begyndelse på et driftsresultat før skat på mellem mio. kr. Kursudviklingen på specielt US dollars har bevirket en negativ indvirkning på afsætningen og indtjeningen. Hertil kommer, at restruktureringsomkostninger i distributionsselskabet i USA samt rekonstruktionen i de nytilkøbte retailselskaber i Sverige, Polen og UK har været mere ressourcekrævende end forventet. Årets resultat er på niveau med den seneste regnskabsmeddelelse til Københavns Fondsbørs den 25. februar Den samlede balancesum er med 528,5 mio. kr. på niveau med sidste år, men dækker over væsentlige forskydninger, idet varelagrene er reduceret med 29,1 mio. kr., hvorimod tilgodehavender er øget med 31,7 mio. kr. Der er et positivt cash-flow på 14,9 mio. kr. før afdrag på langfristet gæld. Koncernens egenkapital er på statusdagen opgjort til 98,2 mio. kr., og egenkapitalandelen udgør 18,6%. Resultatets disponering Bestyrelsen for Denka Holding A/S indstiller til generalforsamlingen, at årets overskud på 507 tkr. disponeres således: Årets udbytte 0 Nettoopskrivning i tilknyttede virksomheder Overført resultat I alt 507 Profit for the year Denka Holding A/S, which includes the activities of Club 8 Company A/S, Club 8 Retail A/S and Dencon A/S, produced revenue of DKK million in the financial year 2004/2005, up DKK 53.9 million or 7.3 per cent on the previous year. Ordinary operating activities generated profits of DKK 13.6 million compared to losses of DKK 16.7 million in the previous financial year. Of the DKK 30.3 million improvement in the result relative to last year, DKK 18.1 million relate to a reduction in non-recurring and restructuring costs under the heading of other operating costs. The result on ordinary activities before tax was a profit of DKK 1.2 million compared to a loss of DKK 30.6 million in the previous financial year. Profit for the year after tax was DKK 0.5 million compared to last year's loss of DKK 29.4 million. Despite the considerable improvement, the result is considered unsatisfactory. Profit for the year is below the DKK 10 to 15 million operating profit announced at the beginning of the financial year. The development in the US dollar rate especially has had a negative impact on sales and profit. Moreover, the costs of restructuring the American distribution company and the reconstruction of the newly acquired retail companies in Sweden, Poland and the UK have tied up more resources than expected. The result for the year coincides with the figure submitted to the Copenhagen Stock Exchange in the Group's most recent announcement dated 25 February The balance sheet total of DKK million is on a par with last year's figure, but conceals considerable changes. For instance, inventories have been reduced by DKK 29.1 million whereas receivables have increased by DKK 31.7 million. There is a cash inflow of DKK 14.9 million before instalments on long-term liabilities other than provisions. As at the balance sheet date the equity of the Group amounted to DKK 98.2 million and the equity to debt ratio is 18.6 per cent. Distribution of profit The Supervisory Board of Denka Holding A/S recommends to the company in general meeting that the profit for the year of DKK 507 ('000) is distributed as follows: Dividend for the year 0 Net revaluation in group enterprises Retained earnings Total 507 Som angivet i sidste års regnskab har Club 8 Company ultimo juni 2004 købt masterrettighederne samt 3 BoConcept Brand Stores samt kontraktafdelingen i UK af JD Group, Sydafrika indehaver af Bo- Concept UK, der drev 8 BoConcept Brand Stores. Ved at tilbagekøbe masterrettighederne fastholder BoConcept sit fodfæste på det engelske marked, hvor den fortsatte ekspansion vil foregå gennem franchiseejede Brand Stores samt ved oprettelse af BoConcept Studios hos veletablerede møbelkæder og department stores. Der er i året gennemført en betydelig sanering af bestanden af BoConcept Brand Stores. Overtagelsen og restruktureringen af BoConcept selskaberne i UK, Sverige og Polen har bevirket, at der er lukket 8 BoConcept Brand Stores på disse markeder. En mere fokuseret indsats på udvalgte markeder på kun at have større Brand Stores samt franchisetagere, der vil følge konceptet, har betydet, at der er lukket yderligere 9 Brand Stores. Samlet er der lukket 18 Brand Stores i løbet af året. Club 8 Retail A/S har over det seneste år gennemført en betydelig restrukturering af driften af BoConcept Brand Stores i Sverige herunder lukning af 2 Brand Stores. Det er selskabets strategi, at ressourcerne skal koncentreres om at være konceptholder og leverandør, hvorfor efter endt restrukturering er de 2 egne BoConcept Brand Stores i Stockholm samt BoConcept masterrettighederne i Sverige solgt pr. 1. maj Køberen er ejerne af BoConcept Danmark A/S, der siden efteråret 2003 har haft BoConcept masterrettighederne i Danmark samt åbnet egne BoConcept Brand Stores i Århus og Odense. Målsætningen for 2004/05 var et driftsresultat før skat på mellem mio. kr. baseret på en salgsfremgang på 5-10% samt effekten af gennemførte omkostningsreduktioner. Korrigeret for tilgangen af BoConcept UK samt sidste års salg af BoConcept München, er der på sammenlignelig basis følgende udvikling: Omsætningsvækst på 44,4 mio. eller 6,0% Dækningsgraden er faldet fra 49,7% til 48,4% primært som følge af ændret produktmix Kapacitetsomkostninger er reduceret med 9,7 mio. kr. eller 3% Målsætningerne er således delvist realiseret. Udviklingen i dollarkursen har bevirket en reduceret omsætning og indtjening fra specielt almindelige kunder i USA. Indtjeningen i såvel distributionsselskabet samt egne Brand Stores i USA levede ikke op til forventningerne, primært som følge af dårlig performance og restruktureringsomkostninger i de lokale distributionscentre. Det lokale resultat i As stated in last year's annual report, in June 2004 Club 8 Company acquired the master rights and 3 BoConcept Brand Stores as well as the UK contract division of the JD Group, South Africa, the owner of BoConcept UK, who used to run 8 BoConcept Brand Stores. By repurchasing the master rights BoConcept retains its foothold in the English market where the continued expansion will take place through the franchise owned Brand Stores and by establishing BoConcept Studios at well consolidated furniture chains and department stores. In the course of the past year the number of BoConcept Brand Stores has been considerably reduced. The acquisition and restructuring of the BoConcept companies in the UK, Sweden and Poland has led to the closing down of 8 BoConcept Brand Stores in the markets mentioned. Greater focus on having only large Brand Stores in selected markets as well as franchisees who are prepared to follow the concept have resulted in the closure of another 9 Brand Stores. A total of 18 Brand Stores were closed down during the year. During the past year Club 8 Retail A/S effected a major restructuring of the management of the BoConcept Brand Stores in Sweden, which included the closure of 2 Brand Stores. The company's strategy is to concentrate its resources on being a concept holder and supplier for which reason the 2 BoConcept Brand Stores on the company's own hands in Stockholm and the master rights to BoConcept in Sweden have been sold off as at 1 May The rights were purchased by the owners of BoConcept Danmark A/S, who have held the BoConcept master rights in Denmark since the autumn of The purchasers have also opened their own BoConcept Brand Stores in Århus and Odense. The objective for the financial year 2004/2005 was a pre-tax operating profit of between DKK 10 to 15 million, brought about by an increase in the volume of sales of DKK 5 to 10 per cent and cost cuttings. Leaving the addition of BoConcept UK out of the equation as well as the sale of BoConcept Munich last year, the following trend appears, on a comparable basis: Growth in revenue of DKK 44.4 million or 6 per cent The contribution ratio has decreased from 49.7 per cent to 48.4 per cent primarily due to a change in the product mix Capacity costs have been cut by DKK 9.7 million or 3 per cent. We have thus achieved several of our objectives. The development in the dollar rate has resulted in reduced revenue and earnings from ordinary customers in the US especially. Earnings in the distribution company as well as in own Brand Stores in the US failed to live up to expectations, primarily due to poor performance and restructuring costs in the local distribution centres. The combined result of these companies locally was thus a loss of DKK 12 million, which is considerably below expectations

8 Accessories D E N K A H O L D I N G A / S selskaberne var således et samlet underskud på 12 mio. kr., hvilket er væsentligt under forventningerne. Der har været resultatmæssig fremgang i de fleste øvrige datterselskaber. Resultatet af Club 8 Company aktiviteterne i Danmark har således realiseret en resultatfremgang på 11,6 mio. kr. i forhold til sidste år med et overskud før skat på 27,0 mio. kr. til følge. Der er et positivt cash flow på 14,9 mio. kr. før afdrag på langfristet gæld. Hvis der reguleres for indregningen af BoConcept UK i balancen, er der reelt et positivt cash flow på 30,8 mio. kr. før afdrag på langfristet gæld. Målet for året på 30,0 mio. kr. blev således realiseret. Den samlede balancesum er reduceret fra 529,5 mio. kr. sidste år til 528,5 mio. kr. som et resultat af, at lagerne er reduceret med 29,1 mio. kr. Tilgodehavender er samtidig øget med 31,7 mio. kr. Dette kan forklares med en stigning i tilgodehavender fra salg på i alt 17.7 mio. kr., hvoraf 10 mio. kr. skyldes omgruppering af forudbetalinger fra kunder. Reguleret for denne omgruppering er den samlede balance således faldet med 11 mio. kr. Den rentebærende gæld er reduceret med 10,9 mio. kr. Salgs-/markedsudvikling Der er væsentlig forskel på omsætningsudviklingen i de enkelte salgskanaler. Salget til BoConcept Brand Stores er steget med 16% i forhold til sidste år. Salget til produktkunder og Studios er derimod faldet med 5%. Salget til Business-to-Business kunder (Dencon kontormøbler) er steget 7,1 mio. kr. i forhold til sidste år, således at andelene af den totale omsætning målt på året er som følger: BoConcept Brand Stores 60%, produktkunder og BoConcept Studios 34% og Business-to-Business (Dencon) 6%. I efterfølgende graf er udviklingen i omsætningsfordelingen på salgskanaler. Den strategiske satsning på BoConcept giver således udslag i, at dette segment fortsat er det voksende og største enkeltsegment. I det forløbne år har salgsindsatsen været yderligere fokuseret på at øge omsætningen gennem BoConcept Brand Stores og BoConcept Studios. Fra og med den 1. september 2005 er alle Club 8 studier enten konverteret til BoConcept Studios eller lukket. Hermed er 'One company One brand' strategien, der blev valgt i 2002, nu fuldt implementeret på alle markeder. Produktsalg, der er grossistsalg til møbelhandlere af enkelte produkter, er fortsat faldende som konsekvens af den valgte strategi. I de kommende år forventes væksten pga. nyåbnede Brand Stores og Studios at overstige faldet i omsætningen til produktkunder, således at den totale omsætning stiger. 70% 60% 50% 40% 30% 20% 10% 0% Profits have improved in most of the other subsidiaries. This means that the result of the Club 8 Company activities in Denmark has improved by DKK 11.6 million on last year, resulting in a pre-tax profit of DKK 27.0 million. There is a cash inflow of DKK 14.9 million before instalments on long-term liabilities other than provisions. When making an adjustment for the recognition of BoConcept UK in the balance sheet, this leaves cash inflow of DKK 30.8 million before instalments on long-term liabilities other than provisions. The target of DKK 30.0 million for the year was thus realised. The balance sheet total has been reduced from DKK million last year to DKK million as a result of inventories having been reduced by DKK 29.1 million. At the same time, receivables increased by DKK 31.7 million. This may be attributable to a rise in trade receivables totalling DKK million, DKK 10 million of which are due to a regrouping of prepayments from customers. When taking the said regrouping into account, the balance sheet total has declined by DKK 11 million. Interest-bearing debt has been reduced by DKK 10.9 million. Omsætningsfordeling på salgskanaler / Share of Total Sales broken down by BoConcept Brand Stores Channels of Distribution Sales/market development Trends in revenue vary greatly from one distribution channel to another. Sales to the BoConcept Brand Stores rose by 16 per cent compared to last year. Conversely, sales to product customers and Studios declined by 5 per cent. Sales to Business-to-Business customers (Dencon office furniture) rose by DKK 7.1 million compared to last year, resulting in the following breakdown of total revenue by distribution channel on a full-year basis: BoConcept Brand Stores 60 per cent, product customers and BoConcept Studios 34 per cent and Business-to-Business (Dencon) 6 per cent. The graph below shows the trend in revenue by channel of Produktkunder / Business-to-Business Product customers Dencon BoConcept Studios 2002/ / /05 distribution: As a result of the strategic focus on BoConcept this segment is still the fastest growing and largest single segment. In the past year the sales effort has been even more focused on increased revenue through the BoConcept Brand Stores and the BoConcept Studios. As of 1 September 2005 all Club 8 studios have either been converted to BoConcept Studios or closed down. In this way, the 'One company One brand' strategy, which was adopted in 2002, has now been fully implemented in all markets. As a result of the strategy chosen, the sale of products to wholesale furniture dealers in individual products continues to decline. In the years ahead growth is expected to exceed the decline in sales to product customers due to the newly opened Brand Stores and Studios, bringing total revenue up. Markedsmæssigt er der væsentlig forskel i udviklingen på de enkelte markeder. Udviklingen i USA er kendetegnet af fremgang i salget til BoConcept Brand Stores som følge af et øget antal Brand Stores, hvorimod der har været tilbagegang i salget til produktkunder. Den faldende dollarkurs har specielt ramt afsætningen til produktkunder/kæder, hvorfor omsætningen totalt for markedet er på niveau med sidste år. Udviklingen i UK er præget af, at der er lukket 5 Brand Stores. På trods af en nyåbning er omsætningen totalt set faldet med 36%. De 3 overtagne Brand Stores er i løbet af året blevet trimmet både hvad angår udseende, drift og personale. I Japan har udviklingen af salget til BoConcept Brand Stores været stigende med hele 25%, hvorimod salget til produktkunder er faldet med 29%. Netto er der vækst på markedet. I Skandinavien er udviklingen vendt, idet den kraftige fokusering på de kunder, der er en del af den fremtidige studiestrategi, samt åbningen af nye BoConcept Brand Stores i Danmark begynder at give effekt med en omsætningsvækst til følge i såvel Danmark, Norge, Sverige og Finland. Markedssituationen i Tyskland er fortsat præget af de økonomiske konjunkturer. Der er dog tegn på, at den negative salgsudvikling til produktkunder opvejes af stigende afsætning til BoConcept Brand Stores og Studios. Der er ved årets udgang indgået aftaler om åbning af flere Studios i det nye regnskabsår. Udover de ovennævnte regioner har der især været stor vækst i omsætningen til Frankrig på +92% og Spanien på +45%. På begge markeder som følge af nyåbnede BoConcept Brand Stores. Salgsorganisationen er løbende blevet tilpasset den valgte strategi med fokus på BoConcept Brand Stores og Studios. I slutningen af regnskabsåret er salgsafdelingen og Retail Operation fusioneret til én samlet retail afdeling. Dels for at sikre fokus på den valgte strategi samt for at synliggøre denne fokus såvel internt som eksternt. Organisationen vil fortsat blive uddannet og udviklet i henhold til strategi og mål. Retail/BoConcept Koncernens eget retailkoncept BoConcept havde ved årets afslutning 141 Brand Stores, hvilket vil sige, at nettotilgangen af Brand Stores har været 2 Brand Stores. Bag disse tal ligger 20 nyåbninger og 18 lukninger. Der er således i året gennemført en betydelig sanering af bestanden af BoConcept Brand Stores. Det totale butiksareal er i perioden forøget med m 2, og det totale salgsareal er nu på m 2. Det medfører, at salgsarealet i den gennemsnitlige Brand Store er steget fra 490 m 2 til 504 m 2. Markets have developed in vastly different ways. The trends in the US are characterised by increased sales to the BoConcept Brand Stores due to a rising number of Brand Stores, whereas sales to product customers have suffered a decline. The declining dollar rate has reduced the improvement and has hit sales to product customers and chains particularly hard, for which reason the aggregate revenue generated on that market is on a par with last year. Developments in the UK have been marked by the closure of 5 Brand Stores. Despite one store opening, total revenue has declined by 36 per cent. The 3 Brand Stores acquired have been trimmed during the year in terms of look, management and staff. In Japan sales to the BoConcept Brand Stores have increased by as much as 25 per cent, whereas sales to product customers were down by 29 per cent. Net earnings are growing in this market. In Scandinavia the trend has been reversed thus that the strong focus on customers making up part of our future studio strategy and the opening of new BoConcept Brand Stores in Denmark is beginning to take effect, resulting in growth in revenues in Denmark, Norway, Sweden and Finland. The German market is still struggling under economic recession. However, there are indications that the negative trend in sales to ordinary customers is being counteracted by rising sales to the BoConcept Brand Stores and Studios. By year-end agreements had been concluded to open more Studios, but these will only be effected in the next financial year. In addition to the said regions, revenues grew by a dramatic 92 per cent in France and by 45 per cent in Spain. In both markets this was attributable to newly opened BoConcept Brand Stores. The sales organisation is continually being adapted to fit the strategy chosen, viz. to focus on the BoConcept Brand Stores and Studios. Towards the end of the financial year the sales and retail operation departments merged into one retail department. The aim of this was partly to ensure focus on the strategy chosen and partly to make that strategy more visible, within the organisation as well as to the outside world. The organisation will continue to undergo training and development in accordance with its strategy and objectives. Retail/BoConcept The retail concept, BoConcept, had 141 Brand Stores at year-end, corresponding to a net addition of 2 Brand Stores. The underlying figures are 20 new store openings and 18 closures. With this in mind, the number of BoConcept Brand Stores was considerably reduced during the year. During the period, total store space grew by 3,027 m 2, bringing the total selling space up to 71,172 m 2 at present. This has brought the floorage of the average Brand Store up from 490 m 2 to 504 m 2. In 2005 BoConcept was certified as franchise concept pursuant to European legislation and ethics

9 My home my way D E N K A H O L D I N G A / S BoConcept blev i 2005 certificeret som franchise koncept efter europæisk lovgivning og etik. Projektet vedrørende optimering af systemerne i og omkring BoConcept kæden er overgået til anden del af forankringsfasen og forløber som planlagt med udrulning af et globalt management kursus og et butiksdriftskursus byggende på terminologien fra BoConcept Power Book. Power Booken er en elektronisk driftsmanual, der bygger på best practice. Alle kursusaktiviteter i BoConcept University vil støtte op om denne manual. Projektet har styrket den organisatoriske fokus både internt og eksternt på det at styre fremdriften af en møbelkæde og vil i næste fase flytte fokus fra det mere fundamentopbyggende og over på at være en mere styrende proces. BoConcept 's IT-system, Axapta, er i året blevet implementeret i 14 Brand Stores, således at over 50% af BoConcept 's samlede retailomsætning nu håndteres på samme platform fordelt på i alt 77 butikker i 8 lande. Releaseskiftet fra Axapta 2.1 til 3.0 er overstået uden problemer, og fokus er i den kommende periode at få optimeret selve vareflowet. Et globalt datawarehousing er under implementering. Marketing Markedsføringsindsatsen er stigende for i højere grad at skabe et brand. Det vurderes, at kendskabsgraden er øget. Nye tiltag i form af en international kommunikationsplatform er udarbejdet og implementeres internationalt fra august 2005 med et endnu stærkere og mere markant signal. Kommunikationsplatformen bygger på en opdeling af nationale og lokale kampagner, hvor der ligeledes er skelnet mellem aggressiviteten i markedsføringen og formålet med kampagnerne. Den nationale del bygger hovedsageligt på at skabe image og opbygge brandet, hvor 5 lokale kampagner har til formål at skabe trafik i butikken. Kommunikationsplatformen har medvirket til en betydelig ensretning af konceptets signaler i landene og samtidig minimeres tidsforbruget af kampagnetilpasninger, da de kører internationalt ens. Næste skridt i en større automatiseringsproces er startet, herunder automatisk kataloggenerering, hvor et masterkatalog udarbejdes på engelsk og de efterfølgende ca. 20 landeversioner automatisk kan genereres med pris og tekst. Club 8 Company A/S udvidede i efteråret 2004 det strategiske samarbejde med et eksternt reklamebureau til ikke alene at omhandle idéoplæg, men også outsourcing af produktionsdelen af marketingopgaverne. Skiftet er implementeret med succes. Business-to-Business Som en konsekvens af at Business-to-Business aktiviteten salgsmæssigt har meget få synergier med Club 8 Company A/S, blev aktiviteten pr. 1. maj 2002 udskilt i et selvstændigt selskab Dencon A/S. En række administrative opgaver bliver dog stadigvæk varetaget af Club 8 Company A/S. The project of optimising the systems in and around the BoConcept chain is into the second stage of the embedding phase and runs according to plan with the implementation of a global management course and store operations course based on the terminology applied in the BoConcept Power Book. The Power Book is an electronic operational manual based on best practice. In future the Power Book will support all the courses at the BoConcept University. The project has strengthened the organisation's internal and external focus on the task of managing the expansion of a furniture chain. In its next phase, the focus will be shifted from building a base to controlling developments. The IT-system of BoConcept, Axapta, has been implemented in 14 Brand Stores throughout the year so that more than 50 per cent of the total retail revenues generated by BoConcept are now on the same platform, broken down into 77 different locations in 8 countries in total. The release change from Axapta 2.1 to 3.0 was problem-free, and in the time ahead we will concentrate on optimising the flow of goods and the implementation of global data warehousing. Marketing The marketing effort is being stepped up with a view to building greater awareness of the brand. It is estimated that brand awareness of BoConcept has been increased. New measures in the form of an international communication platform have been prepared and will be implemented globally from August The communication platform is based on a break-up of national and regional campaigns differentiating aggressiveness of marketing and the aim of the campaigns as well. The national part will mainly be concentrated on creating an image and building a brand, whereas the 5 regional campaigns have the aim of attracting people to the stores. The communication platform has contributed to considerable alignment of the messages sent out by the concept in various countries and a minimisation in the time needed to adapt campaigns as they follow the same concept the world over. The next step has been taken in a major automation process, which includes the automatic generation of catalogues, with one master catalogue being prepared in English and the subsequent 20 or so national versions automatically being generated with prices and text. In the autumn of 2004 Club 8 Company A/S expanded its strategic co-operation with an external advertising agency, commissioning them to produce an idea for a concept and handle the production side of marketing. The change has been successfully implemented. Business-to-Business Since there would be very few potential synergy gains in merging the sales of business-to-business and Club 8 Company A/S, the former activity has been spun off and turned into an independent company as of 1 May However, a number of administrative tasks are still handled by Club 8 Company A/S. After an extended period of time with declining revenues Dencon A/S has succeeded in turning the trend in an Dencon A/S har efter en længere periode med faldende omsætning vendt udviklingen i et ellers hårdt marked for kontormøbler og har således oplevet en stigning i omsætningen på kr. 7,1 mio. eller 17% i forhold til samme periode sidste år. En reduktion af omkostningsniveauet medfører et resultat før skat for Dencon A/S på kr. 0,2 mio., hvilket er en forbedring på kr. 3,9 mio. i forhold til sidste år. Der forventes, at markedet i det kommende år vil være præget af en vis bedring efter tre års krise. Et fortsat stort udbud gør, at der forventes et fortsat prispres. Ressourcerne vil derfor blive brugt på yderligere rationalisering af produktionen, sourcing i Fjernøsten samt styrkelse af salget på primærmarkederne. Produktudvikling/produktprogram En vigtig del af koncernens strategi er design- og konceptudvikling, ligesom det er en af de vigtigste forudsætninger for BoConcept Brand Stores' fortsatte succes og udvikling. Hele design- og konceptudviklingen tager sit udgangspunkt i en m 2 BoConcept Brand Store. I udviklingsfasen lægges der ikke kun vægt på, at produkterne skal have et højt designindhold og være trendsættende, men også at de både skal være kommercielle samtidig med, at kollektionen skal være 'affordable'. Hele BoConcept sortimentet af reoler, sofaer, borde, stole, senge, brugskunst etc. er totalkoordineret, hvad angår farver, træsorter og design. I det forløbne år er der introduceret en lang række nyheder inden for både opbevaringsmøbler, borde, stole og sofaer. Sortimentet er ligeledes på en del områder blevet suppleret med komplementære produktintroduktioner. Nyhederne er blevet godt modtaget af BoConcept Brand Stores og Studios og vil blive implementeret i disse i begyndelsen af første kvartal af det nye regnskabsår. Det vurderes, at nyintroduktionerne både vil styrke kæden imagemæssigt og være med til at forøge salget pr. m 2. For at den store leveringssikkerhed til BoConcept kædens slutbrugere kan opretholdes, er der udmeldt et tilsvarende antal varenumre. Supply Chain Management/produktion I indeværende år er leveringssikkerheden til BoConcept Brand Stores og Studios forøget til 97% på det lagerførte produktprogram. Ligeledes er leveringstiden på ordreproducerede polsterprodukter reduceret til 4 uger. Denne leveringsservice er et væsentligt aktiv for såvel eksisterende som nye Brand Stores og Studios, der kan servicere slutkunder med en af branchens hurtigste leveringstider, uden at butikkerne selv har lagre. Lagerne er det seneste år reduceret med 29,1 mio. kr. gennem involvering og målstyring i alle dele af organisationen. Ligeledes er der implementeret forretningsgange i forbindelse med forecasting og planlægning, der understøtter en løbende optimering af lagerne samt sikrer leveringsservicen. otherwise tough market for office contract furniture to increase revenues by DKK 7.1 million or 17 per cent on the corresponding period of last year. As a result of cost cuttings Dencon A/S produced a pre-tax profit of DKK 0.2 million, up DKK 3.9 million on last year. The market is expected to pick up in the year ahead, following three years' crisis. As the supply will continue to exceed demand, prices will continue to be under pressure. With this in mind, resources will be spent on additional efficiency enhancements in the production process, sourcing in the Far East and strengthening sales in the principal markets. Product development/product range Design and concept development are important tools in the Group strategy and one of the principal prerequisites for the continued success and expansion of the BoConcept Brand Stores. The development of design and concept is based on a 1,000 m 2 BoConcept Brand Store. In the development phase, focus is not only on ensuring that the products have a high design content and are trendsetters; they also have to be commercially viable and affordable. The entire BoConcept range, featuring shelf units, sofas, tables, chairs, beds, accessories, etc. is completely coordinated as regards colours, wood species and design. During the past year a number of new products have been launched, including storage furniture, tables, chairs and upholstery furniture. In addition, complementary new products have been added to the product range. The new products have been well received by the BoConcept Brand Stores and Studios, and these new items will be implemented in the stores and studios in the first 3 months of the new financial year. It is estimated that the new introductions will strengthen the chain in terms of image and increase sales per m 2. In order to maintain the current great reliability in delivery for the benefit of the end user of the products of the BoConcept chain, a corresponding number of product codes have been discontinued. Supply Chain Management/Production This year the reliability of delivery to BoConcept Brand Stores and Studios has been increased to 97 per cent as regards the goods stocked. Also, the time of delivery in respect of upholstery furniture made to order has been reduced to 4 weeks. This quality of delivery is a valuable asset for existing as well as new Brand Stores and Studios which are in a position to serve end users with some of the most competitive times of delivery in the industry without being stockists themselves. Inventories were reduced by DKK 29.1 million last year by involving all parts of the organisation and making it more goal-oriented. In addition, business procedures have been implemented in connection with forecasting and planning, which support the ongoing optimisation of inventories and security of delivery. At the board furniture factories production lead times have been further reduced by 3 to 4 weeks, which also reduces the funds tied up in inventories due to shorter response times