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Topsoe Annual Report 2018: Growth and strong results

26.03.2019
  • Revenue increased by 12% to DKK 5,617 million
  • Earnings Before Interest and Tax (EBIT) increased by 19% to DKK 708 million
  • Profit from continuing operations increased by 25% to DKK 507 million
  • Cash flow from operating activities was DKK 1.2 billion
HT_AR18_FINAL_WEB

Continuing operations
DKK million

2018

2017

Change
2017-2018

Revenue

5,617

5,011 

12%

EBITDA

964

852

13%

EBIT 

708

595

19%

Profit from continuing operations

507

403

25%

Loss from discontinuing operations

-16

-422

 

Net profit

491

-19

 

     

 

Lost time accident frequency
(per million working hours)


3.1


6.3

 

R&D spend (of revenue)

9.0%

9.4%

 

Topsoe’s operations of delivering technology, catalysts, and related services to the chemical and refining industries remain very profitable and generated revenue of DKK 5,617 million and EBIT of DKK 708 million in 2018. EBIT margin was 12.6%, and net profit was DKK 491 million. Revenue and EBIT were positively impacted by a one-time effect of DKK 91 million related to a technology project. Cash flow from operating activities amounted to DKK 1.2 billion based on a significant improvement in the working capital balance as well as a strong cash flow from daily business.

Catalyst revenue increased by 13%, reflecting improved revenue from the catalyst business in both the refining and chemical business areas. Technology revenue increased by 9% driven by a number of large technology projects that were successfully completed in 2018.

“2018 was a good year for Topsoe. The results are very satisfactory and reflect a healthy core business with growth potential. We have received a significant amount of new orders during the year, and we have been able to introduce several innovative products that address our customers’ needs,” says Bjerne S. Clausen, CEO, Topsoe.

In June 2018, Haldor Topsøe Holding A/S and Haldor Topsoe A/S announced the initiation of a search process to find a suitable financial partner to buy a significant minority stake in the company with the intention to list the company’s shares on the stock exchange at a later stage. March 12, 2019, the process was concluded as an agreement was signed with the investment company Temasek. Closing is expected to be carried out later in 2019, when all regulatory clearances have been obtained. Haldor Topsøe Holding A/S has decided that a major part of the proceeds from this transaction will be used to accelerate growth initiatives – both organically and through acquisitions.

The Topsoe portfolio consists of a range of global market-leading products developed through decades of focused research and development. During 2018, Topsoe introduced several innovative products. These include SynCOR Methanol™, which is a competitive solution for very large methanol plants, and the TK-6001 HySwell™ catalyst, which offers refiners top-class activity in hydrocracking and the production of ultra-low sulfur diesel.

A significant company-wide focus on safety has reduced the number of lost time accidents (LTAs) by more than 50% to a level considered best-in-class. In addition, the severity of accidents has generally been low as almost all accidents have only led to very few days of absence.

The coming year
Topsoe expects 2019 revenue to be in the range of DKK 5,400-5,700 million. The EBIT margin for 2019 is expected to be in the range of 11-13%.

Topsoe expects to maintain a high level of R&D activities at approximately 9% of revenue in 2019.

The 2019 half-year report will be published on August 8, 2019. 

Read the full annual report on www.topsoe.com/annual-report-2018  


 ***

Five-year summary

Below is a summary of the Group’s financial highlights for the five most recent years.

Income statement 1)

 

DKK million

2018

2017

2016

20153)

20143)

Revenue

5,617

5,011

5,150 

5,785    

5,685 

Gross profit 

2,620

2,391

2,608 

2,483 

2,542         

EBITDA

964

852

1,071

795      

929    

Depreciation and amortization 

-256

-257

-260   

-293    

-366

EBIT 

708

595

811   

502 

563     

Net financial expenses etc.

-16

-66

-24        

-40

14    

Profit from continuing operations

507

403

545

322

440

Loss from discontinuing operations

-16

-422

-53

-

-

Net profit

491

-19

492 

322      

440  

 

 

Balance sheet

 

DKK million

2018

2017

2016

20153)

20143)

Balance sheet total 

5,664

6,189

7,161 

7,194    

6,455  

Equity 

1,286

1,664

2,238 

2,003     

1,831   

Net working capital  

447

668

610

451

540     

Net interest bearing debt 

756

855

1,191     

1,152 

1,016    

 

 

Cash flow

 

DKK million

2018

2017

2016

20153)

20143)

Cash flows from operating activities

1,189

137

748

750  

  754       

- Of which continuing operations

1,205

421

785

-

-

Cash flows from investing activities

-220

690

-386

-638             

-585

- Of which investments in property, plant and equipment

-251

-211

-393    

-589

-600 

Cash flows from financing activities

-1,194

-586

-530 

-99    

-222 

Change in cash and cash equivalents for the year

-230

201

-162

32

-14      

 

 

Employees

 

Number

2018

2017

2016

20153)

20143)

Average number of employees

2,246

2,527

  2,543

  2,688

2,694

 

Ratios

 

%

2018

2017

2016

20153)

20143)

Gross margin 2)

46.6

47.7

50.6   

42.9 

44.7

EBITDA margin 2)

17.2

17.0

20.8 

13.7 

16.3

EBIT margin 2)

12.6

11.9

15.7  

8.7

9.9

Return on invested capital (ROIC) 2)

26.2

22.4

33.8

16.0 

20.1

Equity ratio

22.7

26.9

31.3

27.8

28.4

Return on equity

33.3

-1.0

23.2

16.8 

25.3   

             

 

The ratios have been prepared in accordance with the Recommendations & Financial Ratios produced by the Danish Finance Society and CFA Society Denmark.
1) Income statements for 2016, 2017, and 2018 consist of continuing operations with discontinuing operations in a separate line.
2) Ratios for 2016, 2017, and 2018 apply to the continuing operations.
3) Figures for 2014-2015 have not been restated with the sale of the emissions control business in 2017. Figures for 2014-2015 are therefore not comparable to figures for 2016-2018, where the divested business is presented as discontinuing operations.

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