“The results reflect that customers are looking to Topsoe for strong commercial solutions to the challenges that come with stricter environmental regulations. The world’s drive towards cleaner air and more efficient – and thus more climate-friendly – use of our resources demands new technology. Topsoe has a long history of developing world-leading, energy-efficient and cleaner solutions for the chemical and refining industries based on our significant investments in research and development and our highly committed employees. I am convinced that we will continue to see our R&D pipeline produce effective solutions to some of the world’s most pressing challenges in the coming years,” says Bjerne S. Clausen, CEO, Topsoe.
EBIT was DKK 440 million in the first half of 2019. EBIT was positively impacted by special items of DKK 65 million, of which DKK 41 million relate to a gain from selling surplus land and DKK 24 million originate from a currently suspended Topsoe license. When adjusted for these special items, EBIT was DKK 375 million, up 27% on the comparable period for 2018.
Profitability improved considerably in the first half of 2019. EBIT margin was 16% compared to 11% for the same period in 2018. After adjusting for special items, the EBIT margin in the first half of 2019 was 14%. The improved profitability can be attributed to consolidation of business activities, increased revenue from renewable fuel technology, organizational adjustments, and several other initiatives to increase business focus and cost optimization.
Net working capital increased by DKK 284 million in the first six months of 2019. This was mainly due to an increase in inventory resulting from higher prices of raw materials and increased production of catalysts in response to growing demand.
Dedicated and highly prioritized efforts have resulted in a significant improvement of Topsoe’s safety record. In the first half of 2019, two lost time accidents were recorded, whereas seven were recorded in the first half of 2018.
Major events in 2019
On July 3, the agreement between Haldor Topsøe Holding A/S and Temasek for Temasek to purchase 30% of the shares in Haldor Topsoe A/S was formally closed. In connection with the closing, Temasek appointed two members of the Board of Directors of Haldor Topsoe A/S. The partnership with Temasek is expected to further enhance Topsoe’s growth potential. Temasek is an experienced investor with significant insights and networks in Asian growth markets, including China, which will support Topsoe’s expansion in this region.
On May 29, it was announced that DeLille Oxygen Co. had chosen Topsoe’s unique eCOs™ technology for cost-competitive onsite production of ultra-high purity carbon monoxide (CO). This is a major step for increased electrification and sustainability of the chemical industry. The eCOs™ solution converts the greenhouse gas, CO2, to valuable CO by electrolysis. Powered by green electricity from wind turbines or solar panels, consuming CO2 and only emitting oxygen, the eCOs™ technology is a carbon negative technology that can help the chemical industry become sustainable. In addition, the eCOs™ technology ensures security of CO supply, eliminates the need for transporting hazardous CO gas, and drastically reduces costs related to transportation, storage, and connections.
On May 27, SkyNRG announced that they had chosen Topsoe’s world-leading technology for production of renewable fuel for their planned facility at Delfzijl, the Netherlands. The plant will supply sustainable aviation fuel (SAF) directly to aircraft at the nearby airport. SAF reduces CO2 emissions by at least 85% compared to conventional jet fuel. The 100,000 tons produced at the facility will reduce CO2 emissions from aviation by more than 250,000 tons every year.
On March 5, Topsoe launched ClearView™, a break-through connected service for optimal plant performance in the chemical and refining industries. This digital service leverages the power of continuous upload of data to offer plant owners improved asset utilization, energy savings, and less unplanned downtime.
Financial highlights
Financial highlights (DKK million)
H1 2019 |
H1 2018 |
Change |
|
---|---|---|---|
Revenue |
2,757 |
2,630 |
5% |
Gross profit |
1,404 |
1,186 |
18% |
EBITDA |
598 |
424 |
41% |
EBIT |
440 |
294 |
50% |
Net profit |
328 |
221 |
48% |
|
|
|
|
Return on equity2 |
45.6% |
26.5% |
|
Equity ratio2 |
25.6% |
28.7% |
|
Net interest cover ratio2 |
23.2 |
20.7 |
|
Net debt leverage ratio2 |
0.9 |
1.7 |
|
R&D spend (of revenue)2 |
8.4% |
9.5% |
|
June 30, 2019 |
Dec 31, 2018 |
|
---|---|---|
Non-current assets |
2,880 |
2,531 |
Current assets |
3,329 |
3,133 |
Assets |
6,209 |
5,664 |
|
|
|
Equity attributed to the owners of the parent company |
1,592 |
1,286 |
Non-controlling interest |
10 |
10 |
Liabilities |
4,607 |
4,368 |
Equity and liabilities |
6,209 |
5,664 |
|
H1 2019 |
H1 2018 |
---|---|---|
Cash and cash equivalents, beginning of period |
761 |
991 |
Cash flows from operations before change in working capital |
426 |
411 |
Change in working capital |
-284 |
-274 |
Cash flows from operating activities |
142 |
137 |
Cash flows from investing activities |
71 |
-116 |
Cash flows from financing activities |
-311 |
-472 |
Cash and cash equivalents, end of period |
666 |
542 |
|
H1 2019 |
H1 2018 |
---|---|---|
Equity, beginning of period |
1,296 |
1,664 |
Comprehensive income |
306 |
238 |
Transactions with owners |
- |
-217 |
Equity, end of period |
1,602 |
1,685 |
|
H1 2019 |
H1 2018 |
---|---|---|
Lost time accidents |
2 |
7 |
The half-year figures have not been reviewed by the company’s auditors. The audited Annual Report 2019 will be published by Haldor Topsoe A/S on March 10, 2020.
Notes
The above has impacted the financial ratios accordingly.