Annual results 2020 – Strong financial performance despite COVID-19: 5% revenue growth driven by high demand for Topsoe’s market-leading technologies

• In 2020, revenue increased to DKK 6,179 million, a 5% increase compared to 2019.
• EBIT before special items increased by 6% to DKK 853 million.
• During the year, Topsoe launched a new purpose and vision focused on carbon emission reduction technologies, and a new organization was implemented to deliver on the vision.

“Despite a 2020 dominated by the global COVID-19 pandemic, we have managed to deliver a strong financial performance for the full year 2020. Revenue and EBIT before special items were in line with our outlook, and this is very positive in a year characterized by uncertainty and rapid change on a global scale. It proves the resilience of our business model,” says CEO Roeland Baan.

A year of transformation
2020 marked the launch of a strategic transformation of Topsoe. Guided by a new purpose ‘Perfecting chemistry for a better world’, the company established a clear vision: ‘To be recognized as the global leader in carbon emission reduction technologies by 2024’. This has led to a more commercially focused organization built on three pillars.

The first pillar, Global Strategy & Innovation, combines the development of company strategy with our world-class R&D activities to secure a perfect alignment and benchmark innovation rate.

The second pillar, Global Commercial, combines all commercial activities in one global organization to ensure a strong commercial mindset, singular customer focus and service, and fast commercialization of new product offerings.

And finally, the third pillar, Global Supply, brings together the full supply chain activities to produce high-quality products more efficiently.

Financial performance
Total revenue increased by 5% to DKK 6,179 million in 2020 (2019: DKK 5,897 million). The revenue development is explained by an increase in catalyst revenue of 4%, mainly driven by refinery catalysts, including deliveries for renewable fuel solutions, as well as an increase in technology revenue of 8%, mainly driven by renewable refinery technology and methanol technology.

EBIT before special items for 2020 increased by 6% to DKK 853 million (2019: DKK 806 million), while the EBIT margin before special items for 2020 was 13.8% (2019: 13.7%). Total special items of DKK -275 million for 2020 consist of restructuring costs, legal costs related to special cases, and adjustments of scrap values on buildings.

Consequently, EBIT after special items decreased by 39% to DKK 578 million in 2020 (2019: DKK 942 million). R&D expenses were maintained at a high level with a R&D-to-revenue ratio of 8.3% (2019: 8.0%).

Net profit amounted to DKK 480 million in 2020 (2019: DKK 714 million). The decrease in net profit was mainly due to the already mentioned special items in 2020 and a gain from sale of land in 2019.

Health, safety and environment
Topsoe continued to improve in the field of health and safety, and this has led to a significant reduction in the metric total recordable incident frequency (TRIF). In 2020, Topsoe achieved a TRIF of 0.90 compared to 1.29 in 2019.

However, health and safety must be improved further. Topsoe is deeply committed to the concept of Zero Harm and has set a target to be in the top quartile of our industry, measured on TRIF. For this reason, the Health, Safety & Environment department has been reinforced with new leadership reporting to the CEO.

Topsoe’s commitment to Zero Harm includes a pronounced ambition to protect the environment and reduce carbon emissions from our plants. In 2020, we achieved energy savings of 7,211 MWh and reduced water consumption by 13%. With our recent commitment to the Science Based Targets initiative, we pledge to significantly reduce greenhouse gas emissions across our value chain in the coming decade, in support of the Paris Agreement. Our short-term target is a 15% reduction in 2021 (on a like-for-like basis, 2019 baseline).

Outlook
Topsoe is entering 2021 with a healthy order book and expects to deliver a solid financial performance in 2021, roughly in line with 2020 on revenue level. However, COVID-19 continues to create uncertainty in the company’s global markets, which will potentially affect projects in 2021.

Five-year summary

The ratios have been prepared in accordance with the Recommendations & Financial Ratios produced by the Danish Finance Society and CFA Society Denmark.
The accounting policy for land and buildings has been changed from measurement in accordance with the revaluation model to measurement at cost less accumulated depreciation and impairment losses. Comparative figures have been restated.
¹⁾ IFRS 16 was implemented in 2019 using the modified retrospective approach, and comparative figures for 2016-2018 have not been restated. Please see the Annual Report’s note 1.
²⁾ Significant income and costs which cannot be attributed directly to the Group’s ordinary operating activities have been reclassified to Special items. Comparative figures have been restated. Special items for 2019-2020 are specified in note 7 in the Annual report. Special items in 2018 are redundancy cost and special items in 2016 are restarted contracts that had been suspended.

In 2020, special items of DKK -275 million consist of restructuring costs, legal costs related to special cases, and adjustments of scrap values on buildings. In 2019, special items of DKK 136 million consist of gain from selling surplus land, revenue relating to suspended Topsoe license, offset by goodwill impairment loss regarding restructuring. Consequently, EBIT after special items decreased by 39% to DKK 578 million in 2020.

Forward-looking statements
Haldor Topsoe A/S’ financial reports, whether in the form of annual reports or interim reports, as well as any presentations based on such financial reports, and any other written information released, or oral statements made, to the public based on this Annual Report or in the future on behalf of Haldor Topsoe A/S, may contain forward-looking statements.
These forward-looking statements are based on current plans, estimates and projections. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, which may be outside Haldor Topsoe A/S’ influence, and which could materially affect such forward-looking statements.
Haldor Topsoe A/S cautions that a number of factors, including those described in the risk management part of the Annual Report, could cause actual results to differ materially from those contemplated in any forward-looking statements.

Read the annual report 2020

Read the sustainability report 2020

More information
Svend Ravn, Director, Global Communications, Haldor Topsoe
Phone: +45 22 75 43 58
Mail: svra@topsoe.com

About Haldor Topsoe
Haldor Topsoe is a global leader in supply of catalysts, technology, and services to the chemical and refining industries. Topsoe aims to be the global leader within carbon emission reduction technologies by 2024. By perfecting chemistry for a better world, we enable our customers to succeed in the transition towards renewable energy. Topsoe is headquartered in Denmark and serves customers around the globe. In 2020, our revenue was approximately 6.2 billion DKK, and we employ around 2,100 employees. www.topsoe.com