My First Year As CEO

In 2023, Eltwin Group experienced unprecedented success, yet it was also a year marked by environmental challenges worldwide. This stark reality emphasizes the need for immediate action. Despite our achievements in Eltwin Group, we faced a setback as the deployment of heat pumps dropped by 5%. This setback was primarily attributed to political uncertainties surrounding EU regulations on phasing out gas and oil boilers, alongside factors like government incentives and electricity-gas price ratios.

Nevertheless, Eltwin Group remains steadfast in our commitment to reducing our CO2 footprint and advancing sustainable solutions. With over a million electronic devices delivered, 82% of which are LCE classified products, we're proud of our contribution towards energy savings and decarbonizing heating.

Our journey towards CO2 neutrality by 2050 necessitates an acceleration in the green transition, particularly in eliminating fossil fuel usage for heating and cooling, which accounts for a significant amount of global CO2 emissions.

The technology is already there. Eltwin Group's contribution lies in accelerating the deployment of smart power electronics. We have nearly doubled our overall capacity to deal with the increased demand both in production and development. I am pleased that we have been able to support new and old customers with energy efficient solutions that help in the journey towards decarbonizing domestic heating.

Furthermore, in 2023 we have refined our products and will initiate a new range of even more energy efficient products, helping our customers enhance their products and be in compliance with the EU's new F-gas Regulation.

As part of the NIBE Group, Eltwin Group contributes to the sustainability goal of reducing CO2 emissions by 65% in 2030 (scope 1 & scope 2). Our focus lies on eliminating the use of fossil fuels for heating our sites, using only renewable energy, and electrifying our transportation. Moreover, we have initiated the mapping of scope 3 emissions in 2023, focusing on reducing the carbon footprint of transportation and our supply chain. For example, at our Polish site we have changed the location of the external warehouse, thereby shortening the transportation distance from approx. 40 km to 20 km. Similarly, we have changed our waste company in Poland, shortening the route between the waste company and our Polish site by ten times.

Eltwin Group is committed to preferential use of sea freight instead of air freight for both international inbound and outbound goods. After resumption of stable freight services post-COVID pandemic, in 2023 Eltwin Hyper (our site in Australia) undertook astute production planning of maximizing use of sea freight for movement of all goods internationally. Compared to 2022, this led to a reduction in CO2 emissions of 73% for outbound goods and 68% for inbound goods in 2023. This allowed savings of nearly 15,000 tons of C02 emissions in 2023.

In addition to our environmental endeavors, I am pleased to see that our customer satisfaction in 2023 are on a high and especially that our delivery time is back on an acceptable level. This marks a significant improvement after facing 2-3 years of supply constraints due to the COVID pandemic and the Ukraine-Russia conflict. We appreciate the patience and the collaboration with our customers and suppliers.

For Eltwin Group, 2023 was a turbulent year with many new employees supporting the growth, primarily at our sites in Denmark and Poland. Our processes were tested to a limit which proved that the Eltwin culture and mentality is scalable. With a focus on employee satisfaction, and by prioritizing leadership, teamwork and empowerment, we have achieved positive results, evidenced by record-high employee satisfaction ratings and feedback.

Looking ahead, Eltwin Group recognizes the imperative of collective action to reignite the green transition. Eltwin stands ready to leverage our expertise and resources to support this endeavor, notwithstanding the prevailing political uncertainties.

Eltwin Group remains resolute in our mission to drive positive change. While challenges persist, our unwavering commitment to sustainability, customer satisfaction, and employee well-being propels us forward on our journey towards a greener, more sustainable future.