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March 26, 2015

Annual report 2014: Another year with solid progress for Topsoe

2014 was another good year for Haldor Topsoe A/S, both in terms of financial performance, overall R&D development and the progress made on a number of projects and initiatives aimed at creating the foundation for additional growth in the years to come.

In 2014 revenue increased by 6% to DKK 5,685 million compared to DKK 5,348 million in 2013, while the company realized an operating profit (EBIT) of DKK 563 million. This corresponds to an EBIT margin of 9.9% and was achieved in spite of an incurred loss of DKK 151 million related to the closure of the subsidiary Haldor Topsoe Fuel Cell A/S. Adjusting for this item and a warranty provision change in 2013, EBIT increased by DKK 118 million or 20% compared to 2013. Moreover, the closure of Topsoe Fuel Cell is set to increase the free cash flow from 2015 onwards, freeing capital for use in other investments and projects.

Topsoe maintains a strong position in a number of different business areas characterized by high entry barriers, strong profitability and growth potential. During 2014, Topsoe's catalyst revenue increased by 13% compared to 2013, driven by strong demand for the company’s refining catalysts as well as other areas. The increase in catalyst revenue, however, was offset by a decrease in technology revenue by 10% compared to 2013, which is largely made up of engineering services, equipment and licensing. Consequently, total year-on-year revenue growth was somewhat lower than targeted reflecting the cyclical nature of the industries that Topsoe operate in.

Commenting on the result, Chief Executive Officer Bjerne S. Clausen says: “Topsoe is going through a period of significant change implementing our ambitious growth strategy. In 2014, major milestones were reached that reinforce my strong belief in our ability to succeed. Moreover, I am pleased that for the third year in a row, we have delivered healthy financial results. Especially since they were accomplished at a time where we are investing heavily in expanding our production capacity while maintaining a high activity level - both within R&D and the many business development efforts we have ongoing to expand our business and enter new business areas.”

In 2014 Topsoe completed two large expansions of its production sites in Frederikssund, Denmark and Houston, Texas. Meanwhile in Tianjin, China, construction of a new automotive catalyst plant moved ahead according to project plans. Topsoe expects first phase of this project to be complete by mid-2015. Furthermore, construction of a new automotive catalyst plant in Brazil was launched in 2014, and is also expected to be operational by mid-2015.

The total spend on R&D in 2014 amounted to 11% of total revenue, which is significantly higher than industry peers. Notable progress was made in Topsoe’s R&D unit as well as in the company’s New Business Unit, which is devoted to developing new products, technologies and business models. One example of the progress Topsoe has made is TIGASTM - a technology for creating synthetic gasoline. This project took a big step forward in 2014 as negotiations were concluded for the construction in Turkmenistan of the world’s first large-scale plant based on TIGAS™ technology. Another example is the progress in our effort to develop new advanced battery materials together with Faradion, a UK-based battery company that Topsoe took co-ownership of in 2014. A third example is the launch in 2014 of ECO-Jet, a groundbreaking new catalytic process technology to reduce emissions from marine vessels.

A key part of Topsoe’s growth strategy is to ‘fast-track’ its way into new business areas by partnering with relevant companies. During 2014, Topsoe established a new partnership with FLSmidth aimed at commercializing a promising and unique catalytic filter bag technology.

Moreover, Topsoe’s Board of Directors has today approved the establishment of a new joint venture company with Ferrostaal GmbH, a leading global project developer for industrial plants based in Essen, Germany. Each party will own a 50% stake in the new joint venture, and the company will position itself as a global lead project developer for the realization of large-scale industrial plants in the petrochemical, refining and environmental areas, primarily targeting projects in emerging markets.

Haldor Topsoe A/S and Ferrostaal intend to communicate further information about the new joint venture company in a separate, more detailed joint announcement to be released later today.   

Full year financial highlights

  • In 2014 revenue increased 6% to DKK 5,685 million (2013: DKK 5,348 million). Adjusting for a special item relating to a change of estimate of warranty provisions in 2013, revenue increased by 8% in 2014. Catalyst revenue increased by 13% compared to the previous year, but was offset by a decrease in technology revenue by 10% related to certain delays in order in-flow.
  • 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 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.
  • 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 in the first half of 2014. In 2014 additional CAPEX has been spent on the establishment of two new production sites in China and Brazil.
  • At the end of 2014 (31 December) Topsoe employed 2,737 employees globally, which represents an increase of 8% compared to end-2013. The staff increase took place in both Denmark and around the world.


DKK million 2014 2013 Change
Revenue 5,685 5,348 6%
EBITDA 929 876 6%
EBIT 563 701 -20%
Net profit 440 553 -20%
Net indebtedness 1,016 994 2%
Cash flows from operations 808 483 67%
Equity ratio 28.4% 26.8% -

Read the full Annual Report 2014 here

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