Statement of profit and loss
Revenue increased 6% to DKK 5,685 million (2013: DKK 5,348 million). Catalyst revenue increased by 13% due to growth in most business areas. Topsoe still enjoys a balanced portfolio of proﬁtable business areas with growth potential. A change of estimate of warranty provisions related to technology projects had a positive impact on revenue, EBITDA and EBIT (DKK 105 million) and net proﬁt (DKK 79 million) in 2013. No special items have impacted 2014 revenue. Adjusting for the 2013-special item, the total revenue growth was 8% from 2013 to 2014.
Earnings before interest, tax, depreciation, and amortization (EBITDA)
EBITDA increased by 6% to DKK 929 million, corresponding to an EBITDA margin of 16.3% (2013: 16.4%). The increase in staff, abroad and in Denmark, has resulted in an increase in staff expenses by 5% to DKK 1,613 million. Raw materials (incl. changes in inventories) increased by 16% to DKK 1,741 million, driven by the larger catalyst sales volume. Purchased equipment for contract work decreased by 33% to DKK 348 million due to the reduction in technology activities. Other external expenses increased by 10% to DKK 1,117 million.
Earnings before interest and tax (EBIT)
EBIT decreased 20% to DKK 563 million corresponding to an EBIT margin of 9.9% (2013: DKK 701 million and an EBIT margin of 13.1%). Adjusting for the warranty provision change in 2013 and the loss of DKK 151 million incurred in 2014 in relation to the closure of Topsoe Fuel Cell A/S (TOFC), the EBIT increased by DKK 118 million or 20% compared to 2013. Depreciation increased by 109% to DKK 366 million as a result of the completion of two new production lines in Houston and Frederikssund and the asset impairment related to the closure of TOFC.
Net proﬁt decreased 20% to DKK 440 million (2013: DKK 553 million). The reduction in net proﬁt is mainly explained by the loss after tax of DKK 114 million related to the closure of TOFC. Dividend from KAFCO decreased by 10% to DKK 54 million. Net interest decreased by DKK 7 million as a result of continuing lower market interest rates and favorable reﬁnancing. There were positive net exchange adjustments of DKK 11 million (2013: DKK -24 million). Tax increased by DKK 10 million to DKK 137 million.
Cash ﬂow and balance sheet
Cash ﬂows from operating activities
Cash ﬂows from operating activities increased by 67% and amounted to DKK 808 million (2013: DKK 483 million). Working capital increased by DKK 6 million and amounted to 9.5% of revenue (2013: 8.6%).
CAPEX decreased by 11% and amounted to DKK 639 million (2013: DKK 721 million). Two new production lines in Frederikssund, Denmark and Houston, Texas – Topsoe’s two primary production sites – were completed within the ﬁrst half of 2014. In 2014 additional CAPEX has been spent on establishment of two new production sites in China and Brazil, both of which will be completed in 2015.
Net indebtedness increased by 2% and amounted to DKK 1,016 million (2013: DKK 994 million). The interest bearing debt at the end of 2014 was DKK 1.936 million (2013: DKK 1,928 million). Surplus funds for an amount of DKK 467 million were placed with the holding company, Haldor Topsøe Holding A/S, as part of a cash pool arrangement (2013: DKK 550 million). Return on invested capital (ROIC) ROIC amounted to 20% (2013: 31%).
The order backlog was at the end of 2014 at a satisfactory level covering a major part of our engineering and catalyst production capacity for 2015.