“We are very satisfied with the results we have achieved in the first half of 2020. Both revenue and adjusted EBIT have grown significantly, driven primarily by our solutions in clean and renewable fuels. I am proud that our company is rewarded by customers for taking an active role in the green transformation. Our solutions help chemical companies and refineries comply with environmental regulations in a sustainable and financially viable way. This is vital for our customers’ businesses and helps the climate and the environment here and now.”
“While we have reached very satisfactory results in the first half year, we face a more challenging second half year. We see a negative effect of the COVID-19 pandemic in our order intake, which reflects that many refineries and technology projects are impacted by low demand and decreased economic growth globally. Accordingly, our technology order backlog has decreased during the COVID-19 pandemic, which will negatively impact revenue related to technology and catalyst first-fills, mainly from 2021 onwards. We maintain our outlook for the full year 2020, as we expect that the great results achieved in the first six months of 2020 will offset the negative impact of COVID-19 in the second half of 2020. Our business model remains solid, and we have a very strong balance sheet with no net debt,” says Roeland Baan, CEO, Topsoe.
In the first half of 2020, three lost time incidents were recorded, one more than in the first half of 2019. However, the total recordable incident frequency improved in the first half of 2020. Topsoe is determined to deliver significant further improvements in its safety performance going forward, guided by the company’s ‘Zero Harm’ policy.
Both the Chemical and Refinery Business Units experienced revenue growth in the first half of 2020. Technology revenue increased by 17% compared to the first half of 2019, mainly due to increased demand for renewable fuel technology. Catalyst revenue increased by 15% compared to the first half of 2019 due to high demand for refinery catalysts used for clean fuels.
EBIT was DKK 419 million in the first half of 2020, which is a decrease of 5% over the same period last year. However, EBIT was positively impacted by special items of DKK 65 million in the first half of 2019, of which DKK 41 million relate to a gain from selling surplus land, while DKK 24 million relate to license revenue originating from a contract based on in-kind contribution of Topsoe license which was suspended. When adjusting for these special items, EBIT was up by 12% in the first half of 2020 compared to the same period in 2019.
Adjusted EBIT margin was 13.1% compared to 13.6% for the same period in 2019.
Net working capital decreased by DKK 506 million in the first six months of 2020. This was mainly due to large customer payments, partly offset by an increase in inventory.
New member of the Board
On August 18, 2020, the Annual General Meeting elected a new member to the Board of Directors of Haldor Topsoe A/S, Mr. Jan Kreibaum.
Jan Kreibaum is senior advisor focusing on China-specific strategies along the chemicals value chain and serving in roles with industry association boards in China, including the European Chemical Industry Council (Cefic) and the China Petroleum and Chemical Industry Federation (CPCIF). Mr. Kreibaum has 30 years of professional experience in Asia and has previously been regional president with Clariant Chemicals (China) and held executive positions with Knauf Asia-Pacific, BASF East Asia, and Ciba. He holds a M.Eng. (Chem.) from McGill University.
Major events in 2020
In May, Topsoe and Air Products announced a global alliance agreement. The two companies will collaborate, using their extensive market network outreach for developing potential projects and the combination of their expertise for developing and building large-scale ammonia, methanol and/or dimethyl ether plants globally. In July, it was announced that Haldor Topsoe ammonia technology will be used in the world’s largest green hydrogen project, the NEOM project, equally owned by the partners Air Products, ACWA Power, and NEOM.
In May, Topsoe joined the United Nations Global Compact, the world’s largest sustainability initiative. By becoming part of this initiative, Topsoe commits to aligning policies and action with the Ten Principles of the UN Global Compact.
June 1 was Roeland Baan’s first workday at Topsoe as newly appointed President and CEO. Roeland Baan joined Topsoe from a position as CEO of the global stainless steel company Outokumpu, which is listed on the Finnish stock exchange. Throughout his career, Mr. Baan has held a wide range of global CEO and Executive Vice President (EVP) positions at Aleris International, Arcelor Mittal, SHV NV and Shell.
Financial highlights (DKK million)
H1 2020 |
H1 2019 |
Change |
|
|
|||
Revenue |
3,202 |
2,757 |
16 % |
Gross profit |
1,473 |
1,404 |
5 % |
EBITDA |
580 |
598 |
-3 % |
EBIT |
419 |
440 |
-5 % |
Adjusted EBIT |
419 |
375 |
12% |
Net profit |
334 |
328 |
2 % |
|
|
|
|
Return on equity1 |
31.7% |
45.6% |
|
Equity ratio1 |
31.8% |
25.6% |
|
Net interest cover ratio1 |
26.3 |
23.2 |
|
Leverage ratio1 |
0.0 |
0.9 |
|
R&D spend (of revenue) 1 |
7.7% |
8.4% |
|
|
June 30, 2020 |
Dec 31, 2019 |
Non-current assets |
2,880 |
2,898 |
Current assets |
4,347 |
4,028 |
Assets |
7,228 |
6,926 |
|
|
|
Equity attributed to the owners of the parent company |
2,301 |
1,912 |
Non-controlling interest |
9 |
9 |
Liabilities |
4,918 |
5,005 |
Equity and liabilities |
7,228 |
6,926 |
|
H1 2020 |
H1 2019 |
Cash and cash equivalents, beginning of period |
787 |
761 |
|
|
|
Cash flows from operations before change in working capital |
589 |
426 |
Change in working capital |
506 |
-284 |
Cash flows from operating activities |
1,095 |
142 |
Cash flows from investing activities |
-135 |
71 |
Cash flows from financing activities |
-207 |
-311 |
|
||
Cash and cash equivalents, end of period |
1,534 |
666 |
|
H1 2020 |
H1 2019 |
Equity, beginning of period |
1,921 |
1,296 |
Comprehensive income |
318 |
306 |
Transactions with owners |
70 |
- |
Equity, end of period |
2,310 |
1,602 |
|
H1 2020 |
H1 2019 |
Lost time incidents |
3 |
2 |
The half-year figures have not been reviewed by the company’s auditors. The audited Annual Report 2020 will be published by Haldor Topsoe A/S on March 3, 2021.
Notes