Annual Report
2025
A sky-high success
This year’s cover image shows the world’s highest
bridge, the iconic Huajiang Canyon Bridge in China,
coated by Hempel in 2025.
Management report Financial statements
INTRODUCTION 3
Letter to stakeholders 4
At a glance 6
Performance highlights 2025 7
Five-year summary 8
OUR BUSINESS 9
Business model 10
Strategy 11
Sustainability framework 12
Segments 13
Marine 14
Energy & Infrastructure 15
Decorative 16
Performance review 17
CORPORATE GOVERNANCE 19
Corporate governance 20
Board of Directors 24
Executive Group Management 26
Risk management 27
SUSTAINABILITY STATEMENTS 31
Sustainable value creation 32
Futureproof: a five-year journey of positive impact 33
Environment 34
Social 36
Governance 38
ESG data and accounting policies 40
TCFD and TNFD 47
CONSOLIDATED FINANCIAL STATEMENTS 50
Profit or loss 51
Financial position 52
Changes in equity 53
Cashflow 54
Notes 55
PARENT COMPANY FINANCIAL STATEMENTS 93
Profit or loss 94
Financial position 95
Changes in equity 96
Notes 97
STATEMENTS 103
Management’s statement 104
Independent auditor’s report 105
Independent limited assurance report on ESG data 107
EUR 259 million
Free cash flow
Hempel delivered EUR 2,165 million in revenue
and a free cash flow of EUR 259 million in 2025.
Contents
Hempel Annual Report 2025
Letter to stakeholders
from our Chair and CEO
Shaping the next chapter
2025 marks nearly five years since the launch of our Double Impact
strategy and one year into our partnership with CVC.
Many milestones have shaped our journey, reinforcing our commitment
to becoming an industry-winning enterprise and delivering lasting
value to our customers, partners, owners and employees.
Over the past few years, our focus has been on execution and we have
achieved significant progress – financially, operationally, and culturally.
In January 2026, we launched a new global strategy focused on
strengthening customer value and accelerating commercial execution
across key markets. Our new Accelerate to win strategy shapes the
next chapter of Hempel’s story. Our direction is clear: we are building on
a position of strength and Accelerate to win focuses on moving faster,
strengthening what makes Hempel unique in the eyes of customers and
ensuring the company is positioned to capture the opportunities ahead.
Navigating a complex world
The external environment has shifted decisively in 2025. Geopolitical
dynamics have become more complex and volatile, with negative
impact from foreign exchange rates, low oil prices, and subdued
consumer confidence. Our customers are cautious, and competition
is fierce. In this climate, our responsibility is to navigate with clarity
and agility, ensuring we continue to deliver for those who rely on us.
Putting customers first with new solutions
Hempel’s value lies in how we protect and beautify our customers’
assets, help them decarbonise, or create the unique feeling of home.
Our mission is to make Hempel the first and best choice for our
customers, every single time. In 2025, we launched Hempaguard
NB, the first silicone hull coating for Marine newbuildings, Hempafire
Extreme, setting new benchmarks for fire safety, and Flat Eggshell
by Farrow & Ball, a low sheen, super-tough finish for interior wood,
metal and concrete.
In its first full year on the market, Hempaguard Ultima, a hull coating
developed for large commercial ships, delivered value to our customers
by saving fuel and reducing costs combining the proven energy-saving
technology of Hempaguard X7 with a new biocide-free silicone topcoat,
Hempaguard XL. This means less biocide, improved speed, and real
progress towards decarbonisation. These are just a few examples of
how we innovate for our customers.
In 2026, we will be even more relentless in listening to our customers,
solving their most important pain points, and wowing them with the
best innovations, technologies, and service. At the end of the day,
our customers are why we exist, and through them, we can have a
profound impact on the world.
Michael Hansen
Group President &
Chief Executive Officer
Richard Sand
Chair of the Board of
Directors
Hempel Annual Report 2025
Financial statements
Sustainability statementsCorporate governance
Statements
Our business
Introduction 4
2025 performance and highlights
In 2025, we delivered organic sales growth of 3.4% and a free cash
flow of EUR 259 million.
This year, we marked several important milestones. At the beginning
of the year, we announced the sale of Hempel Industrial B.V. in the
Netherlands in our Energy & Infrastructure segment. Later in the
year, we expanded our global footprint with a new office in Pune,
India, an important step in our global growth journey. We also
welcomed customers and partners from around the world, including
China and Korea, to our headquarters in Denmark. Inaugurated
in 2023, our state-of-the-art production facility in Zhangjiagang,
China reached full capacity in 2025 allowing us to further enhance
how we serve Marine, Energy and Infrastructure customers in the
region. Hempel was recognised as Denmark’s leading non-listed
company for climate action by Økonomisk Ugebrev
1
. Our commitment
to sustainability was further emphasised during Climate Week NYC
in the US as we hosted a maritime panel at the Partnerships for the
Future Summit and took part in the Royal Danish state visit to France
focusing on the green energy transition.
2026 outlook
As we move to 2026, we expect the complex external market
conditions to continue. While Hempel is performing at historically
high levels, we recognise there is more to achieve.
We hold industry-leading positions across many of the markets we
serve, and we are working towards further unlocking our potential.
In 2025, Hempel
delivered the
best free cash
flow to date.
In 2026, we will continue our journey to grow Hempel, expecting
low-single-digit organic revenue growth and an adjusted EBITDA
margin around 18%.
A team built for the future
Over the past three years, we have deliberately strengthened our
Executive Group Management, bringing together a high-calibre and
diverse team with the capabilities needed to drive Hempel forward.
In 2025, this continued with Anne-Christine Ahrenkiel joining as
Chief People & Culture Officer on 1 July, followed by Anne Ernst as
Executive Vice President, Strategy & Execution from 1 September.
In September, we also announced the appointment of Malgorzata
Kolton as Executive Vice President & Head of Marine, effective
1 January 2026.
Today, the Executive Group Management team represents five
nationalities, has an even gender split, and brings together a broad
range of professional and personal backgrounds.
Thank you
On behalf of the Board of Directors and Executive Group Management,
we thank our customers and partners for your trust this past year.
We also thank all our Hempel colleagues for your commitment and
perseverance to drive success. Together, we are shaping the next
chapter of Hempel’s journey.
Hempel to initiate CEO succession
In January 2026, Hempel A/S announced that
Michael Hansen will step down as Group President
and Chief Executive Officer of the company to take
on the position as President and CEO of DFDS.
The Board of Directors has activated a search process
and will provide an update when the next CEO is
in place. Until a successor has been appointed,
Michael Hansen will, together with the Executive Group
Management team, continue to lead the company
and execute on Hempel’s strategic priorities. Michael
Hansen will leave Hempel no later than 30 June 2026.
1
Økonomisk Ugebrev is a Danish business-oriented newsletter focusing on
economics, finance, investment and corporate governance.
Hempel Annual Report 2025
Financial statements
Sustainability statementsCorporate governance
Statements
Our business
Introduction 5
We serve customers around the world
1
No. of colleagues
7,000+
No. of factories
24
No. of countries
we serve
110+
110 years of partnership and protection
At a glance
At Hempel, we collaborate and innovate
with our customers to deliver paints and
coatings that protect, inspire and improve the
performance of their most valuable assets.
Through our global expertise and strong
partnerships, we help customers achieve their
ambitions and strengthen their performance
over time. We are majority-owned by the
Hempel Foundation.
Sustainability commitments and recognitions
No. of master
brands
6
No. of paint stores
334
1915
1917 1966
1980
2011
2013
2014 2024
2023
2025
2021
No. of R&D centres
13
No. of customers
2
40,000+
1
Numbers as of 31 December 2025.
2
No. of professional customers with revenue above EUR 1,000.
Hempel is founded
by J.C. Hempel in
Copenhagen, starting
with marine paints
Hempel opens a factory in
Kuwait – becoming one of the
first paint manufacturers in the
Middle East
Hempel enters the
renewables market,
supplying coatings to
the first commercial
wind farm
UK-based Crown Paints
is acquired, boosting our
presence in the decorative
segment
Hempaguard
®
is introduced,
an innovative hull coating
combining silicone and
hydrogel
Avantguard
®
is
launched, our patented
zinc-rich primer
technology
Hempel welcomes
CVC Funds as a
minority investor to
enable future growth
Zhangjiagang facility in
China is inaugurated, serving
Energy & Infrastructure and
Marine, with a 200,000
tonne capacity
New R&D centre opens in
China. Hempaguard NB is
launched, the first silicone
coating for marine newbuildings
Hempel acquires luxury
British brand Farrow &
Ball and Wattyl in
Australia
1948
1950
The Hempel Foundation is
established as the owner
of the Hempel Group
Hempel opens its first
overseas factory in
the US and offices
in Asia
First fuel-saving antifouling
coating for ships’ hulls is
launched
Hempel Annual Report 2025
Financial statements
Sustainability statementsCorporate governance
Statements
Our business
Introduction 6
2,170
-54%
2023 2023
2,185
-65%
2024 2024
2,165
-70%
2025 2025
44%
2023
61%
2024
83%
4
2025
29%
2023
31%
2024
34%
2025
14.1
2023
- 1.3
2024
3.4
2025
259
139
29
2023 2024 2025
394
18.2
392
17.9
2025
360
16.6
2023 2024
Performance highlights 2025
1
Organic growth
2
(%)
Revenue
(EUR m)
Free cash flow
2
(EUR m)
EBITDA margin, adjusted
2
EBITDA (EUR m)
EBITDA margin (% of revenue)
Social
Women in leadership
(%)
Environment
3
Scope 1 & 2 reduction from 2019 baseline
(%)
1
The 2023 profit or loss and ESG statements have
been restated to reflect the classification as a
discontinued operation of Hempel’s J.W. Ostendorf
and Renaulac businesses. For further information,
please see note 4.6 Discontinued operations.
2
For definitions of financial ratios, see note 5.7.
3
Excluding company vehicles, we reached a reduction
of 73% in scope 1 & 2. Amounts in absolute tonnes
are shown on page 41.
4
In 2025, the scope of the screening was changed to
focus on high and medium CO
2
e impact categories.
Governance
Total supplier spend screened
Sustainability screening of our suppliers (%)
Financial statements
Sustainability statementsCorporate governance
Statements
Our business
Introduction 7
Hempel Annual Report 2025
Five-year
summary
(EUR m, unless otherwise stated) 2025 2024 2023
1
2022 2021
Profit or loss
Revenue 2,165 2,185 2,170 2,159 1,744
EBITDA, adjusted 394 392 360 257 205
EBITDA 387 391 348 219 196
Amortisation, depreciation and impairment 108 114 113 105 90
Operating profit 279 277 235 114 106
Financial items, net - 66 - 57 - 93 - 58 - 17
Profit before tax 213 220 142 56 89
Net profit from continuing operations 166 170 122 37 58
Net profit for the year 168 80 50 35 63
Financial position
Total assets 2,414 2,631 2,669 2,655 2,466
Investment in tangible assets 28 52 59 91 113
Shareholders’ equity 1,150 1,058 502 519 526
Net interest-bearing debt 344 542 1,075 1,052 907
Cash flow
Total cash flow from operating activities 294 225 127 72 69
Cash flow from acquisitions / divestments of enterprises 8 4 6 - 28 - 511
Cash flow from net investments in property, plant and
equipment and intangible assets
- 43 - 90 - 104 - 107 - 87
Free cash flow 259 139 29 - 63 - 529
Dividend distributed to shareholders - - 157 - 26 - 33 - 25
Working capital
Net working capital (NWC) days 76
2
82
2
66 72 70
(EUR m, unless otherwise stated) 2025 2024 2023
1
2022 2021
Ratios (%)
Organic growth 3.4 - 1.3 14.1 12.7 5.9
Gross margin 44.1 43.4 41.6 36.3 37.8
EBITDA margin 17.9 17.9 16.0 10.1 11.2
EBITDA margin, adjusted 18.2 17.9 16.6 11.9 11.8
Operating profit margin 12.9 12.7 10.8 5.3 6.1
Return on invested capital 13.0 12.9 11.1 5.6 7.5
Equity ratio 47.6 40.2 18.8 19.5 21.3
Cash conversion 100 92 76 64 59
Leverage ratio 0.9x 1.4x 3.1x 4.2x 3.7x
Environment, social and governance (ESG)
Scope 1 & 2 emissions (tonnes CO
2
e) 16,112 18,767 24,972 19,090 29,710
Waste to landfill (tonnes) 1,360 1,586 934 1,353 1,630
Average number of employees (FTEs) 6,919 6,932 6,788 7,34 3 6,746
Gender diversity in leadership positions
3
, female/male
34/66 31/69 29/71 29/71 23/77
4
Satisfaction and motivation N/A 74 75 72 73
Engagement score (scale from 0-10)
5
7.5 N/A N/A N/A N/A
Suppliers screened through Hempel Procurement
Sustainability Screening (% of spend) N/A 61 44 40 22
% of direct and indirect spend suppliers in high and
medium CO
2
e impact categories screened through the
Hempel Procurement Sustainability Screening 83% N/A N/A N/A N/A
For definitions of financial ratios, see note 5.7.
1
The 2023 profit or loss and ESG statements have been
restated to reflect the classification as a discontinued
operation of Hempel’s J.W. Ostendorf and Renaulac
businesses. For further information, please see note 4.6
Discontinued operations. 2021-2022 have not been restated.
2
The calculation of Net Working Capital (NWC) Days has been
restated to reflect a simplified approach.
3
Leadership positions with minimum 3 direct reports.
4
Data from Farrow & Ball was not included in 2021.
5
In 2025 a new Employee Engagement Survey has been rolled
out, replacing the previous survey format. This resulted in a
change to the metrics being reported.
Hempel Annual Report 2025
Financial statements
Sustainability statementsCorporate governance
Statements
Our business
Introduction 8
OUR BUSINESS
Across the world, our products and solutions help our customers protect, inspire
and improve performance of their most valuable assets. Sustainability is at the
heart of our business and incorporated into every step of our business model.
Business model
INPUT
VALUE
Customers
We continuously engage with our
customers to understand and meet
their evolving business needs.
Stakeholders
We build trusted relationships
with consumers, suppliers, peers
and other stakeholders across
our value chain. We gain insights
to continue to cater to consumer
lifestyles and needs.
Employees
Our team of 7,000+ colleagues
are driven by our purpose and
ambitions to make a difference for
our customers and society. We rely
on their input and expertise to win
in the market.
Procurement of resources
We depend on raw materials, such
as epoxy, titanium dioxide and
metallic pigments, to produce
our solutions.
Customers & consumers
We deliver solutions and services that
build new value propositions for our
customers, while helping them reduce
their environmental impact. We deliver
inspiring products to consumers that
beautify their living spaces.
Employees
We nurture a diverse and inclusive
workplace with a shared culture,
where our employees can succeed
and develop.
The world around us
Our solutions extend the lifetime
of our customers’ assets and
enable them to operate with higher
efficiency. We also continuously
work to reduce the impact of our
own operations.
Company & owners
We are owned by the Hempel
Foundation and CVC Funds.
Our majority owner, the Hempel
Foundation, supports philanthropic
projects around the world.
Research & develop
We continuously develop expertise
across our segments to deliver best-
in-class solutions from chemistry to
application engineering. We actively
partner with our customers and
partners in the field.
Innovate
We are committed to innovating
with our customers to enable them
to meet their goals, using state-
of-the-art processes across our
13 R&D centres.
Produce & scale
We strive for greater excellence,
efficiency and scalability in our
production while reducing the
environmental footprint of our
operations.
Collaborate
We collaborate with suppliers to
shorten lead times and drive joint
decarbonisation efforts.
Research & Development Production
Brand & sell
We work with our customers to
communicate the value and benefits
of our brands and solutions, so they
get the best possible experience, no
matter how or where they meet us.
Distribute
Our globally integrated supply chain
and store network allow us to deliver
our solutions to customers across the
world every day.
Advise & support
Our global coating advisors ensure
efficient, high-quality application and
process optimisation to maintain
customers’ assets in the agreed
condition. We help reduce costs and
waste, and improve performance.
In our paint stores, we provide advice
and inspiration to our private and
professional consumers.
Delivery, sale and support
10
Hempel Annual Report 2025
Financial statements
Sustainability statementsCorporate governance
Statements
Our business
Introduction
In 2025, we concluded our Double Impact strategy period, a five-year
journey that strengthened Hempel’s foundation and delivered tangible
financial progress across our four strategic growth levers: Segment
leadership, Sustainability leader, Scalable operations and Trusted
partner. The achievements of Double Impact have ensured Hempel
is ready for the next phase of its growth journey, which will be guided
by our new Accelerate to win strategy, launched in January 2026.
Driving digitalisation and smarter operations
Digital transformation was a key enabler for Double Impact. In 2025,
we launched our new, unified eBusiness platform, integrating
www.hempel.com and MyHempel into one seamless, intuitive digital
experience for our Marine and Energy and Infrastructure customers.
As a result, customers can now explore products, place orders
and access documentation in one environment. We also improved
and automated internal data flows, making our processes faster
and more scalable. We reimagined innovation through IdeaLab, an
AI-powered tool that helps identify promising ideas and customer
needs earlier in the product development process.
We got closer to our customers in the Decorative segment with the
launch of Crown Paints’ eCommerce site, while our Farrow & Ball
eCommerce site saw high double-digit year-on-year revenue growth.
Our Operations Intelligence initiative brought Industry 4.0 to life.
Digital tools like smart sensors, connected devices and automation,
are key to enabling agile, real-time responses in manufacturing
operations. This provides teams access to real-time data that drives
faster decision-making and continuous improvement. In addition,
the rollout of the Insight Explorer app at Crown Paints allows operators
to monitor and optimise production in real time, improving efficiency,
reducing downtime and supporting sustainable operations.
Strengthening segment leadership
In 2025, we maintained momentum across our segments as we
advance our technology portfolio into clear market leadership. In Marine,
we celebrated the 5,000
th
application of Hempaguard, our advanced
silicone hull coating, marking a decade of proven hull performance
and reinforcing our leadership in fuel-saving and emission-reducing
coatings. We also launched Hempaguard NB, the first silicone hull
coating designed specifically for newbuildings.
In Energy & Infrastructure, Avantguard 750 Pro set a new standard for
corrosion protection, helping to extend the lifetime of steel structures
and reduce lifecycle CO
2
e emissions. In addition, Hempafire Extreme
550 redefined fire protection with faster application, lower carbon
content and enhanced design flexibility.
For Decorative customers, we opened Farrow & Ball Studios in the
UK. Our five Studios offer immersive retail spaces that elevate the
customer experience.
Streamlining and focusing for growth
To sharpen our portfolio and focus on our strongest business areas,
we divested Hempel Industrial B.V. in the Netherlands in 2025.
This allows us to concentrate on our core Energy and Infrastructure
subsegments, in line with Double Impact’s aim for greater scalability
and focus.
Expanding our global footprint
We continued to expand our global presence and capabilities.
We opened a new office in Pune, India, enabling us to expand our
talent base and strengthen key functions, particularly within Digital
and Finance. We also inaugurated a state-of-the-art R&D Centre in
Strategy
Zhangjiagang, China. Located close to major shipyards along the
Yangtze River, the centre allows us to collaborate more closely with
Marine customers and accelerate innovation where it matters most.
Advancing sustainability leadership
Sustainability is central to how we create value for our customers,
owners and society. In 2025, EcoVadis awarded Hempel a Bronze
Medal, placing us among the top 35% of rated companies globally
within ESG performance. We also updated our scope 3 emissions
target, which is validated by the Science Based Targets initiative (SBTi)
to align with the 1.5°C pathway while ensuring that profitability and
climate responsibility go hand in hand.
Hempel is stronger than ever and our Double Impact
strategy has built a foundation to accelerate profitable
growth, innovation and sustainability impact under our
new Accelerate to win strategy launched in January 2026.
Accelerate to win is our commitment to faster, focused
growth. It directs our energy to where we can create
the greatest impact and pushes us to raise our game in
delivering value for our customers. The new strategy will
see Hempel maximise customer value through stronger
innovation, faster local responsiveness, enhanced
digital interaction and solutions designed to improve our
customers’ sustainability performance.
Starting our next chapter
11
Hempel Annual Report 2025
Financial statements
Sustainability statementsCorporate governance
Statements
Our business
Introduction
Our products and services enable customers to achieve their
sustainability objectives, optimise operational efficiency, and
maximise the longevity of their assets. Customers also expect
us to demonstrate sustainability throughout our value chain.
Our employees demand this, too. Current and future colleagues
want to be part of a company that is actively working towards a
more sustainable world – both today and in the future.
As a world-leading supplier of trusted paint and coating solutions,
we have a responsibility to advance our own performance and
standards in the field of sustainability. This makes sustainability
a core part of both our identity and operations.
The Futureproof framework
2025 marked the transition to a new chapter for sustainability at
Hempel. Our Futureproof framework has guided our sustainability
efforts and priorities, helped us measure performance and drive
continuous improvement since 2021. Through this framework
and as a signatory of the UN Global Compact, we align our
commitments with the United Nations Sustainable Development
Goals (SDGs) and prepare for evolving regulatory requirements,
such as the Corporate Sustainability Reporting Directive (CSRD).
ESG frameworks and external recognitions
We prioritise compliance with ESG reporting frameworks and ratings
that are widely recognised by our stakeholders. Since 2022, we have
reported in alignment with the recommendations of the Task Force on
Climate-related Financial Disclosures (TCFD), the Carbon Disclosure
Project (CDP) and EcoVadis. In 2025, we aligned for the first time with
the Taskforce on Nature-related Financial Disclosures (TNFD) and
officially registered as TNFD adopters.
We have developed our 2025 integrated annual report inspired
by and guided by the principles of the CSRD framework. While
the EU has approved a two-year deferral, we remain committed
to strengthening our ESG disclosures in preparation for future
CSRD reporting and in response to stakeholder expectations. In
2025, we received an EcoVadis Bronze Medal in recognition of our
sustainability achievements. This ranked us among the top 35%
of companies globally for ESG performance, a strong result that
reflects our progress, while also highlighting areas where we can
continue to improve.
We became a member of Together for Sustainability (TfS) in 2025,
a global initiative that promotes sustainable practices across
chemical industry supply chains. We are committed to driving positive
environmental and social impact through responsible sourcing,
transparency and collaboration with peers.
Introducing Hempel’s new
sustainability mission
We kicked off 2026 with the next step in our
sustainability journey, anchoring sustainability
at the core of our customer value creation while
keeping ourselves to the highest standards for
operating and engaging responsibly.
The paints and coatings industry has a unique
role to play in the transition to a more sustainable
future. Across sectors, companies face the same
challenge: growing responsibly by using fewer
resources and cutting emissions. That’s where
Hempel can make a difference.
Our ambition is to enable our customers to operate
with lower emissions and higher efficiency, extend
the lifetime of their assets and contribute to
healthier living spaces and ecosystems.
Sustainability
framework
12
Hempel Annual Report 2025
Financial statements
Sustainability statementsCorporate governance
Statements
Our business
Introduction
Segments
9.8% 0.6%
Sales in Energy & Infrastructure grew 0.1% organically, landing at EUR
775 million, with Infrastructure growth offset by declining Energy sales.
Growth in our Infrastructure business was driven by successfully winning
more volume across the globe, with a focus on our leading technologies.
Growth in these strategic areas – such as passive fire protection (PFP),
high-performance waterproofing (Neogard) and corrosion protection
(Avantguard) technologies, which enhance safety, improve sustainability,
and reduce costs for our customers – contributed to a good overall
performance for the global Infrastructure business.
Sales were softer in our Energy business, driven by weakness in the
oil and gas sector, particularly in the Americas and the Middle East.
However, this was partly offset by significant volume gains in Asia-Pacific,
where our modern factories achieved record production and delivery
levels. This growth was supported by our leading coating solutions for
corrosion under insulation (CUI), enabling us to secure new projects and
strengthen our global market presence. At the same time, we gained
additional renewables business in Asia-Pacific and expanded in offshore
wind globally, maintaining our strong market-leading position in wind
tower coatings despite continued fierce competition.
0.1%
Organic growthOrganic growth Organic growth
750
Revenue in EUR m
775
Revenue in EUR m
Sales in Marine grew 9.8% organically, landing at EUR 750 million.
2025 marked the strongest year ever for Marine sales, achieving double-
digit volume growth in both the drydock and newbuild markets, surpassing
previous records set in 2023. Growth was fuelled by sustained customer
confidence and continued demand for our premium solutions. At the same
time, however, macroeconomic uncertainty, declining US dollar, and price
pressure from increased competition in the silicone market negatively
impacted growth.
While competition intensified in the silicone hull coatings market, we
maintained strong momentum, attracting many new customers and
achieving record volumes with our Hempaguard range.
We also leveraged the global newbuilding boom, driving significant
revenue growth through a holistic commercial approach that combines
advanced coating technologies, technical advisory services and close
collaboration with shipyards and customers.
Revenue in EUR m
Sales in the Decorative segment grew by 0.6% organically, landing at
EUR 640 million.
Growth was supported by increases in the luxury segment through
Farrow & Ball and in the UK mainstream segment through Crown Paints.
In the luxury segment, we continued to strengthen our position with
Farrow & Ball, driven by US expansion, the introduction of a new studio
retail format and an award-winning e-commerce proposition.
In the mid-market segment outside of the United Kingdom, full-year
sales fell short of expectations, mainly due to weaker market conditions
in the Middle East, as well as softer market conditions in Australia
impacting Wattyl.
Organic growth
640
Revenue in EUR m
ENERGY & INFRASTRUCTURE DECORATIVEMARINE
13
Hempel Annual Report 2025
Financial statements
Sustainability statementsCorporate governance
Statements
Our business
Introduction
Marine
Driving decarbonisation in the
maritime industry
Across the maritime industry, demand for sustainable coating
solutions continues to rise as customers face stricter environmental
regulations and growing pressure to improve performance. This trend
is driving greater interest in technologies that enhance operational
efficiency while keeping costs down.
Our superior coating solutions optimise fuel efficiency and provide
significant savings for shipowners and operators. They also help
reduce downtime and cut CO
2
and in-water emissions, supporting
more efficient and sustainable ship operations.
2025 was a record year for Marine driven by strong demand for
Hempel’s solutions across the newbuilding and maintenance sectors.
Offering customers a full suite of superior hull management solutions
suited for every step of a vessel’s lifetime, we cemented our leading
position in marine silicone coatings.
Hempel continues to lead the maritime industry in sustainable
hull-coating solutions. In 2025, we launched Hempaguard NB, an
innovative silicone hull coating that can be applied to newbuildings
during the construction phase, providing customers with a fully
efficient ship from the moment it hits the water. This new technology
supports long-term performance and regulatory compliance for
customers while offering shipyards a competitive edge.
Value creation
• Hempaguard NB, our first silicone hull coating designed
for newbuildings, delivers advanced fouling protection
with up to 20% fuel savings and reduces average speed
loss to 1.2% from day one, hereby significantly lowering
vessel emissions compared to conventional antifouling
coatings. Our high-performance silicone coatings enable
shipowners to lower their overall costs while supporting
their environmental goals through reduced CO
2
emissions and less biocide release to the water.
• We work with customers to find smarter, safer, and
more sustainable ways to coat ships. To help them
reduce their total costs and support their sustainability
ambitions, we tested air-assisted airless
1
coating
application. This is a spraying technology that enhances
the application quality and extends the performance of
our coatings.
• We continued to support customers with vessel
data and digital models through our SHAPE system,
helping them improve operational efficiency and
meet biofouling requirements set by the International
Maritime Organization. We introduced a new AI module
that automatically analyses hull inspection images
and connects hull condition to drag, fuel consumption,
and emissions. By providing these insights, the system
enables faster, data-driven maintenance decisions and
greater fleet efficiency for our customers.
First Maersk ship coated with
Hempaguard NB
We successfully completed the first Hempaguard NB application in
collaboration with Maersk on their newbuilding, the Tangier Mærsk,
coated at Yangzijiang Shipyard in China in October 2025.
In its first year since launch, our market-leading high-performance
silicone coating, Hempaguard Ultima, has earned customer recognition
for delivering superior fouling protection, operational efficiency and
sustainability benefits. With a strong proven track record of over 5,000
applications since 2013, Hempaguard has reduced customers’ CO
2
emissions by approximately 35.9 million tonnes, and was third-party
validated in 2024 for its impressive impact on fuel savings and
speed loss.
1
Air-assisted airless spraying is a new method for applying
coating on a ship.
14
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Statements
Our business
Introduction
Our solutions extend the lifetime of energy and infrastructure assets,
with a focus on sustainability and value chain efficiency. Our strong
position in the energy and infrastructure industries is built on our
innovative, high-performance coating technologies, which meet our
customers’ demands for longer-lasting assets and lower lifetime
maintenance costs. To drive growth, we focus our expertise on
sustainability-led infrastructure development projects, renewable
energy and high-growth regions.
2025 was a good year for infrastructure projects in Asia Pacific.
We maintained a strong overall position in the region and secured
a number of new projects in China and South East Asia. We also
maintained our strong position in the Americas, with growth
driven by our Neogard high-performance concrete waterproofing
solutions and protective coatings. In the Middle East, we secured
many infrastructure projects and continued to grow our passive fire
protection (PFP) portfolio.
We already offer high-performance cellulosic PFP coating solutions for
customers in the infrastructure industry. In 2025, we strengthened
our PFP range with the introduction of high-performance hydrocarbon
PFP coating solutions for use in the energy sector.
As well as PFP coatings, our customers in the energy industry rely on
our value adding solutions to extend the lifetime of their assets, while
reducing their operational costs and emissions. The most critical
challenge in the downstream energy industry remains corrosion
under insulation (CUI). We offer high-performing CUI solutions for
severely corrosive environments and, despite market pressure in the
oil & gas industry in 2025, we succeeded in growing our CUI High
Heat business.
We have a strong position across the energy industry, particularly in
renewables where we offer a full range of high-performance, high-
productivity solutions with a focus on sustainability. In 2025, we grew
our Renewables sub-segment, mainly driven by increased focus on
the offshore wind industry.
Value creation
• We launched Hempaprime Ultimate 850, a primer that
offers customers greater corrosion resistance, increases
durability and faster curability, together with one of the
lowest Volatile Organic Compounds (VOC) on the market.
We also commercialised Hempaprime Core 505, a new
epoxy with enhanced colour stability for the Chinese
infrastructure market.
• We extended our solutions with Hempafire Extreme 550
in the PFP market providing up to four hours fire protection
in combination with 40% lower paint consumption
compared to current products on the market.
• For the oil & gas industry, with Hempaline Defend 430,
we are offering a wider range of chemicals resistance
for interior lining of storage tanks and pipes for newbuild
and maintenance.
• To support growing green building markets in Europe
and the Middle East, we increased the number of
Environmental Product Declarations (EPD) for our
protective and PFP coatings, raising the number of
points our customers can earn in LEED
1
and BREEAM
2
projects.
• We delivered Hempaprime Strength 530 for offshore
wind farms in Asia and Europe. Coating systems based
on the product can protect foundations for 35 years,
reducing carbon footprint by more than 30% compared
to conventional systems, which only protect for 25 years.
Energy & Infrastructure
Extending asset lifetime, reducing
costs and lowering emissions
Highest and biggest
In 2025, we coated the world’s highest bridge, the iconic Huajiang
Canyon Bridge, and delivered coatings to the world’s largest capacity
floating offshore wind turbine foundation – both in China.
1
LEED (Leadership in Energy and Environmental Design)
is the most widely recognised green building rating system
in the world.
2
BREEAM (Building Research Establishment’s Environmental
Assessment Method) is a certification scheme designed to
evaluate the sustainability of building projects.
15
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Our business
Introduction
Elevating the customer experience
across the decorative ecosystem
Decorative
As a full-service decorative coatings company, we offer paints,
wallpapers and colour consultancy to Do-It-Yourself (DIY) consumers,
designers, contractors, retailers and professional painters seeking
quality, long-lasting and easy-to-apply solutions. Our brands inspire
through on-trend colours and high-quality, sustainable solutions
– from premium paints for the home to anti-bacterial coatings for
hospitals and white-label products
1
for major DIY chains.
Inspiration, quality and sustainability remain at the heart of what we
do. Our strategy is to drive growth through a strong market position
and brand awareness, while expanding our partnerships, physical
store network and eCommerce solutions.
In 2025, our Crown Paints brand entered into a partnership with
B&M, the largest multi-channel retailer in the UK, which now stocks
Crown Paints products in 246 stores. At the same time, our own
Crown Decorating Centres delivered record performance. In Australia
last year, we successfully reestablished our Wattyl Solagard brand
in Bunnings and secured a range extension in 2025. In the US, our
Farrow & Ball brand saw all-time high performance.
In eCommerce, we got closer to our customers with the launch of
Crown Paints’ eCommerce site, while our Farrow & Ball eCommerce
site saw high double-digit year-on-year revenue growth. Both sites were
shortlisted for the prestigious UK-based eCommerce Awards, with
Farrow & Ball winning the DIY and Home category Website of the Year
Value creation
• Farrow & Ball launched 12 new colours, as well as its
new Flat Eggshell finish, a super-tough, low-sheen paint
for wood, metal and concrete.
• Hempel Decorative Middle East launched Topaz
Signature Endless Matt, complementing its premium
interior range with a unique matt finish that is highly
washable, even in the deepest and darkest colour tones.
• Farrow & Ball advanced its use of biobased materials,
sourcing a new C14-certified material that is derived
from sugarcane waste and saves around 1,000 tonnes
of CO
2
e annually. Its new Flat Eggshell range uses
biobased materials, saving a further 150 tonnes of CO
2
e
while improving drying times, durability and resistance
to yellowing.
• Hempel Decorative Middle East collaborated with
Saudi Arabia’s National Housing Company to promote
zero-VOC anti-microbial paints and switched from plastic
to metal packaging in selected ranges.
• Crown Paints’ manufacturing sites are now 99.5%
fossil-fuel-free and all electricity used across UK
operations, factories, offices and Decorating Centres,
comes from renewable energy sources. As a result,
operational carbon emissions (scopes 1 & 2) have
dropped 67% compared to 2019.
award. In total, our brands were finalists in or won over 15 industry
awards, including Crown Paints and Farrow & Ball being named in
The Telegraph newspaper’s list of the Best Wall Paints of 2025.
In addition, we opened new stores, evolved our service offerings
and increased operational efficiencies while remaining focused on
delivering sustainable solutions to our customers.
Award winning brand
In 2025, Crown Paints won three awards for customer service, CSR and
sustainability in the BCF (British Coatings Federation) Awards.
1
Products that are sold under a retailer’s brand.
16
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Our business
Introduction
394
18.2
2025
Decorative
640
0.6
Energy &
Infrastructure
775
0.1
Marine
750
9.8
2,170
14.1
2023
2,185
- 1.3
2024
2,165
3.4
2025
360
16.6
2023
392
17.9
2024
Revenue and earnings
Revenue and organic growth
Total revenue in 2025 amounted to EUR 2,165
million, a decrease of EUR 20 million compared
to 2024. Revenue was negatively impacted by
the depreciation of US dollar, British pound and
Chinese yuan exchange rates against the euro.
Organic growth for the year, adjusted for currency
fluctuations, was 3.4%. Organic growth was
supported by underlying volume growth. Organic
growth fell slightly short of expectations for the
year, due to softer market conditions.
The Marine segment achieved organic growth
of 9.8%, reporting revenue for the year of EUR
750 million.
The Energy & Infrastructure segment recorded
organic growth of 0.1%, ending the year with
revenue of EUR 775 million.
The Decorative segment achieved 0.6% organic
growth, with revenue amounting to EUR 640 million.
Gross profit and margin
Gross profit amounted to EUR 955 million in 2025,
an increase of 0.7% compared to the prior year.
The gross profit margin increased by 0.7 percentage
points to 44.1%. Gross profit was negatively
impacted by foreign exchange movements
impacting revenue, offset by declining raw material
costs and operational efficiencies in China.
Revenue and organic growth
Revenue (EUR m) Organic growth (%)
Sales, distribution and administrative costs
Sales, distribution and administrative costs,
amounted to EUR 686 million in 2025, an increase
of 2.2% compared to the prior year.
The increase reflects general price inflation and
investments in digital solutions aimed at driving
scalable operations.
EBITDA and EBITDA margin, adjusted
Adjusted EBITDA amounted to EUR 394 million in
2025, and the adjusted EBITDA margin increased
by 0.3 percentage points to 18.2%. The EBITDA
margin exceeded full-year expectations.
The adjustments to EBITDA relate to M&A gains of
EUR 4 million, hyperinflation costs of EUR 4 million,
and one-off restructuring costs of EUR 7 million.
These restructuring initiatives are aligned
with Hempel’s strategic ambition to improve
competitiveness.
Financial items and foreign exchange
Net financial items amounted to EUR 66 million,
an increase of EUR 9 million compared to 2024.
The increase was primarily driven by higher foreign
exchange losses which amounted to EUR 30 million
in 2025, an increase of EUR 24 million from the
prior year, mainly due to the depreciation of the US
dollar. This effect was partly offset by lower interest
expenses as a result of reduced debt levels.
Revenue and organic growth by segment
Revenue (EUR m) Organic growth (%)
Performance review
Figures on this page exclude the result of J.W. Ostendorf and Renaulac for both 2023 and 2024.
EBITDA and EBITDA margin, adjusted
EBITDA (EUR m) EBITDA margin (% of revenue)
Tax and Profit for the year from continuing
operations
Tax for 2025 amounted to EUR 47 million
compared to EUR 50 million in 2024, resulting in
an effective tax rate of 22.1% in 2025 down from
22.7% in 2024. Profit for the year from continuing
operations amounted to EUR 166 million
compared to EUR 170 million in the prior year.
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Our business
Introduction
Trade
receivables
Trade
payables
Inventory
2023
458
1
2024 2025
450
442
2024
336
2023
300
1
2025
277
2024
317
2023
309
1
2025
304
2024
139
2025
259
2023
29
1,075
3.1
1.4
2023
542
2024
0.9
344
2025
11.1
2023
12.9
2024
13.0
2025
Financial position and cash flow
Total assets
At 31 December 2025, total assets amounted to
EUR 2,414 million, down from EUR 2,631 million
at 31 December 2024. The decrease primarily
reflects the impact of foreign exchange movements,
improvements in net working capital, and
amortisation and depreciation exceeding additions
to tangible and intangible assets. Additions to
tangible and intangible assets amounted to
EUR 47 million, and were mainly related to digital
investments, factory optimisations, and ongoing
asset replacements in factories.
Net working capital
In 2025, Hempel launched cash excellence
programmes aimed at improving working capital
efficiency across the business. Net working capital
improved primarily due to a reduction in inventory,
which decreased by EUR 59 million, driven by
initiatives to reduce ageing stock and the run-down
of contingency inventory built up in 2024. Trade
receivables and trade payables remained broadly
stable at EUR 442 million and EUR 304 million,
respectively, in line with 2024 levels.
Return on invested capital
Return on invested capital from continuing
operations amounted to 13.0% in 2025, a slight
increase of 0.1 percentage points compared
with the prior year, reflecting broadly unchanged
operating profit and average invested capital.
Return on invested
capital
(%)
Net working capital
(EUR m)
NIBD and leverage
NIBD (EUR m)
Leverage (NIBD / EBITDA)
Performance review
1
2023 balances exclude amounts related to J.W. Ostendorf and Renaulac.
Net interest-bearing debt and leverage ratio
At 31 December 2025, net interest-bearing
debt (NIBD) was EUR 344 million, down from
EUR 542 million at 31 December 2024.
This decrease was primarily driven by strong
EBITDA and cashflows from net working capital
improvements. The leverage ratio improved
significantly to 0.9x at 31 December 2025,
compared to 1.4x at 31 December 2024.
Free cash flow
Free cash flow amounted to EUR 259 million in
2025, compared to EUR 139 million in 2024.
The improvement was primarily driven by
better net working capital management, lower
investments in property, plant and equipment
(PPE) and intangible assets, and reduced
interest expenses.
Cash outflows from investing activities were
EUR 35 million in 2025, down from EUR 86 million
in 2024, as major investments in production
capacity and ERP systems were completed
in 2024.
Cash flows from financing activities
Cash outflows from financing activities totalled
EUR 288 million in 2025. The outflows include
EUR 230 million related to net repayment of
borrowings, and EUR 38 million related to
repayment of lease liabilities.
Free cash flow
(EUR m)
18
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Statements
Our business
Introduction
Corporate governance
Hempel A/S has a two-tier management structure consisting of
the Board of Directors and the Executive Group Management.
The Board of Directors is responsible for the company’s overall
strategic direction and must ensure the proper organisation of the
company’s business. It also supervises strategy execution and
company performance. Executive Group Management is responsible
for the day-to-day management of the company. The two bodies are
independent, and no-one serves as a member of both.
Management structure
Executive Group Management is led by the Chief Executive Officer
(CEO), who reports to the Board of Directors. The CEO oversees
Hempel’s organisational management structure, which is centred
around our Marine, Energy & Infrastructure and Decorative segments.
In 2025, Hempel established Strategy & Execution, a new Executive
Vice President (EVP) area led by Anne Ernst, EVP, Head of Strategy
and Execution, whom we welcomed on 1 September 2025. The area
helps us identify opportunities to accelerate growth and long-term
Our strong corporate governance framework is based on
Hempel A/S’ Articles of Association, applicable laws and
regulations, and our internal policies and procedures. It supports
long-term value creation for our company, customers, suppliers,
employees and the communities in which we operate, and
promotes responsible and sustainable business behaviour.
value creation and ensures our strategy aligns with our segment
priorities and market opportunities.
On 1 July 2025, we welcomed Anne-Christine Ahrenkiel as our
new Chief People & Culture Officer and EVP, People & Culture.
Malgorzata Kolton was appointed EVP, Marine and joined Hempel
on 1 January 2026.
Board of Directors
The Board of Directors consists of seven members elected for a
one-year term by the shareholders at the Annual General Meeting
and three employee members elected for a four-year term by the
employees based in Denmark (the latest election took place in
2023). The Board of Directors’ duties and responsibilities are set
out in its Rules of Procedure.
Composition and responsibilities of the Board of Directors
The Board of Directors includes both professional board members
and members with executive positions. As well as in-depth knowledge
of Hempel’s business, board members possess expertise within a
wide range of areas, from innovation, product development, marketing,
commercialisation, ESG and sustainability through to business
expansion, value growth, mergers and acquisitions, finance and digital.
These diverse profiles ensure that the Board of Directors can operate
efficiently and effectively support the Hempel Group’s strategy.
Each year, the Board of Directors carries out a self-evaluation of its
competencies and skills. The evaluation is carried out systematically,
using clearly defined criteria to ensure the Board constantly
improves its own performance and its cooperation with Executive
Group Management. The current composition of the Board is deemed
appropriate as it provides a good balance between knowledge,
competencies and experience. The Board of Directors is responsible
for safeguarding the interests of the shareholders, while also
considering all other stakeholders. On an annual basis, the Board
aligns its priorities and tasks with the overall strategic direction and
20
Hempel Annual Report 2025
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Statements
Our business
Introduction
Meeting activity 2025
Attended meeting Absent from meeting
financial performance of the Hempel Group. It evaluates Executive
Group Management on a continual basis.
Tasks managed by the Board of Directors in 2025
In 2025, the Board of Directors led a strategic review of Hempel’s
Double Impact strategy, with the aim of unlocking further growth
potential across the company’s three core segments in line with its
ambition to become an industry-winning enterprise. The strategy
review included a reassessment of Hempel’s business and
operations to ensure continued scalability and competitiveness.
In parallel, the Board maintained oversight of the company’s
value creation plans and collaborated closely with Executive
Group Management to address implications arising from ongoing
macroeconomic uncertainty.
In line with the Double Impact strategy, the Board of Directors
explored potential inorganic opportunities and partnerships, with a
focus on strengthening market position, expanding capabilities and
unlocking synergies across segments. The Board further supervised
the successful divestment of Hempel Industrial B.V., completed in
January 2025.
The Board of Directors is committed to ESG and sustainability.
In 2025, the Board continued to actively shape Hempel’s
sustainability framework, which outlines Hempel’s sustainability
ambitions and the roadmap to achieving them.
Diversity, Equity & Inclusion
The Board of Directors believes that diversity strengthens any
governing body and acknowledges the importance of diversity in
general, including diversity of gender, nationality and competencies.
The Board of Directors has set a target for the Board to have at
least 33% female shareholder-elected board members by no later
than the Annual General Meeting 2030. Initiatives to reach the
target include establishing clear diversity goals and reviewing Board
selection criteria to broaden the candidate pool with qualified
female candidates. When it is considered necessary to bring new
1
Not considered independent in accordance with recommendation
3.2.1 of the Danish Corporate Governance recommendations.
2
Remuneration and Nomination Committee.
Name Title Board of Directors Audit Committee RemCo and NomCo
2
e
Richard Sand
1
Chair
Søren P. Olesen Board member/Deputy Chair
Karsten Munk Knudsen Chair of the Audit Committee
Britt Meelby Jensen
Board member
Leif Jensen
1
Board member
Christoffer Sjøqvist Board member
Michael Lavrysen
Board member
Helle Fiedler Elected by the employees
Vibeke Stendal Larsen Elected by the employees
Stephan Rolsted Elected by the employees
Board of Directors Audit Committee RemCo and NomCO
2
e
4 March 29 September 28 February 18 September 28 February
12 May 13 November 4 June 26 November 20 August
20 June 5 December 24 November
21
Hempel Annual Report 2025
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Statements
Our business
Introduction
competencies to the Board, or if a member does not wish to continue
serving, diversity is deliberately taken into account when considering
the profiles and qualifications of potential candidates. In line with
Hempel policies, qualified representatives of both genders are
always considered.
The Board of Directors remains committed to fostering an inclusive
corporate culture that values diverse perspectives and promotes
gender equality throughout the Hempel organisation. The Executive
Group Management consists of five female and four male managers,
with five different nationalities represented. More information on
our initiatives to increase diversity, equity and inclusion, as well as
relevant statistics for other management levels in Hempel, can be
found on pages 36 and 45.
Remuneration
Hempel offers its Board of Directors and Executive Group
Management remuneration that is competitive with industry peers
and other global companies with their headquarters in Denmark,
as this enables us to attract and retain competent and professional
business leaders and board members. Members of the Board
receive fixed remuneration and do not participate in any incentive
programmes. The remuneration of Executive Group Management
consists of both a fixed salary and an annual cash bonus, contingent
upon financial targets and ESG targets, including climate targets.
The annual cash bonus cannot exceed 70-100% of the individual’s
fixed salary. In addition, Executive Group Management participates
in Hempel’s management incentive plan, which was implemented
in 2024 and offers Executive Group Management and other senior
managers the opportunity to purchase company shares and warrants
at fair value.
The Board of Directors determines annually whether to instigate
new remuneration programmes and, if so, the scope and objectives
of these programmes.
Executive Group Management has service and employment
agreements in line with market terms. Conditions for notice of
termination are determined individually for each Executive Group
Management member. The company has a general fixed termination
notice of 12 months if given by the company and six months if
given by a member of Executive Group Management.
Board committees
The Board of Directors has established dedicated committees to
supervise and solve specific tasks. Currently, there are two permanent
committees: a Remuneration and Nomination Committee, and an
Audit Committee.
The Remuneration and Nomination Committee
The Remuneration and Nomination Committee assists the Board
of Directors by selecting and proposing candidates for executive
positions, often with the assistance of a professional global search
firm. In addition, it assists with the establishment of executive
remuneration and helps ensure that the Hempel Group’s general
remuneration policies are balanced, taking culture, strategy and the
external market into account.
Furthermore, the committee evaluates the Board of Directors and
Executive Group Management each year and makes recommendations
to the Board in relation to the skills that the Board and Executive Group
Management must have to best perform their tasks. The committee
convenes as necessary. However, it has at least three fixed meetings
during the year.
The Audit Committee
The Audit Committee’s work includes assisting the Board of Directors
with its oversight responsibilities for the financial and ESG reporting
process, the system of internal control including information security
controls, the risk management process, the internal and external
audit process, and the process for monitoring compliance with laws,
regulations and Hempel’s Code of Conduct. The Audit Committee
reviews the annual report, ESG reporting, main accounting policies,
22
Hempel Annual Report 2025
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Sustainability statementsCorporate governance
Statements
Our business
Introduction
including significant accounting estimates and judgements, Treasury
Policy and Tax Policy. In addition, the Audit Committee has an
oversight role in relation to the whistleblower reporting system and
cases. The committee convenes as necessary. However, it has at
least four fixed meetings during the year.
Internal Audit function
The Internal Audit function provides independent and objective
assurance to the Board of Directors, Audit Committee and Executive
Group Management, primarily within areas related to governance,
business ethics and internal control. It reports to the General
Counsel with dotted lines to the Hempel Group’s Chief Financial
Officer and the Audit Committee. The Head of Internal Audit acts as
Secretary to the Audit Committee, participates in all Audit Committee
meetings and meets separately with the Audit Committee at least
once a year.
Internal Audit’s assessments and recommendations are reported
to Executive Group Management, the Audit Committee and relevant
stakeholders. In accordance with its charter, the Audit Committee
annually assesses the need for an Internal Audit function. Based
on the recommendations of the Audit Committee, the Board of
Directors determines whether an Internal Audit function is required.
The Board’s assessment is that the Internal Audit function is required
and that its mandate and scope, processes in place, and planned
and performed activities are adequate to provide independent and
objective assurance.
Tax
Hempel is committed to upholding the highest standards of responsible
tax practice and transparency.
Guided by the Board-approved Tax Policy and governance framework,
Hempel ensures full compliance with tax laws in every country where
the company operates and integrates ethical tax considerations into
business decisions.
To further enhance transparency and meet stakeholder expectations,
Hempel will publish a separate Tax Report during 2026. The report
will include comprehensive country-by-country reporting as well as all
relevant tax transparency disclosures, providing clear insight into our
tax contributions and tax practices across all jurisdictions.
23
Hempel Annual Report 2025
Financial statements
Sustainability statementsCorporate governance
Statements
Our business
Introduction
Richard Sand
Chair
Søren P. Olesen
Deputy Chair
Leif Jensen
Board member
Britt Meelby Jensen
Board member
Karsten Munk Knudsen
Board member
Born 1959 1967 1954 1973 1971
First elected in 2009 (Chair since 2010) 2018 (Deputy Chair since 2024) 2011 2024 2021
Core capabilities • Foundation and company law, M&A
• Strategy development and execution
• ESG and Sustainability
• Industry knowledge
• Industry knowledge
• Product development
• M&A
• Industry knowledge
• Commercialisation through finance
• Business and leadership experience
from listed and private companies
• Industry knowledge from global
healthcare
• Commercial and strategy
development
• Finance
• ESG and Sustainability
Committees • Chair of Remuneration and
Nomination Committee
• Audit Committee member • Audit Committee member
• Remuneration and Nomination
Committee member
• N/A • Chair of Audit Committee
Selected positions
and directorships
• Partner at Poul Schmith/Kammer-
advokaten with Right of Audience,
The Danish Supreme Court
• Chair: Aller A/S and E. Callsen &
Co. A/S
• Board member: Climate Planet
Foundation, Woodmancott Fonden,
Aller Foundation and Esplanadens
Ejendomsselskab P/S
• CEO: STARK Group A/S
• Board member: Industriens
Arbejdsgivere i Danmark, IAD
• Chair: Strømberg Holding A/S
• Chair: Strømberg Ejemdomme A/S
• Board member: WindowMaster
International A/S
• CEO: Ambu A/S
• Board member: Novo Nordisk A/S
• Vice Chair: Novo Holdings A/S
• CFO and EVP Finance,
Legal & Global Solutions:
Novo Nordisk A/S
• Chair: NNE A/S
• Board member: 3shape Holding A/S
Education • Master of Law, University of
Copenhagen
• MSc Economics, Aalborg University
• MA (Econ), Rijksuniversiteit
Limburg, Maastricht
• MSc Economics and Management,
Aarhus University
• Cand. merc. International Marketing
and Management, Copenhagen
Business School
• MSc Finance, Aarhus University
Board of Directors
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Hempel Annual Report 2025
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Statements
Our business
Introduction
Michael Lavrysen
Board member
Christoffer Sjøqvist
Board member
Helle Fiedler
Elected by the employees
Stephan Rolsted
Elected by the employees
Vibeke Stendal Larsen
Elected by the employees
Born 1977 1976 1963 1971 1965
First elected in 2024 2024 2015 2023 2023
Core capabilities • Business expansion
• Investing in high-quality businesses
with longer growth horizons
• Business growth
• Value creation
• Product development
• Innovation
• Working environment
• Facility service management
• Working environment
• Product development and
performance
• Safety compliance
• Working environment
Committees • Audit Committee member • Remuneration and Nomination
Committee member
• N/A • N/A • N/A
Selected positions
and directorships
• Partner CVC
• Member of the CVC Strategic
Opportunities investment platform
• Partner CVC
• Head of CVC Denmark
• Lead Scientist R&D, Hempel A/S • Campus Service Manager,
Hempel A/S
• HSE & Compliance Manager,
Hempel A/S
Education • MSc Commercial Engineering,
KU Leuven
• MSc Accounting and Finance,
London School of Economics and
Political Science
• BSc Management, London School of
Economics and Political Science
• MSc Chemical Engineering, DTU
(Technical University of Denmark)
• Employee Board Member
certification
• Business school • Chemical technician
• Employee Board Member
certification
Board of Directors
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Hempel Annual Report 2025
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Sustainability statementsCorporate governance
Statements
Our business
Introduction
Michael Hansen
Group President
& Chief Executive Officer
Peter la Cour Gormsen
Executive Vice President
& Chief Financial Officer
Ana Henriques
Executive Vice President,
Decorative
Steen Niemann Madsen
Executive Vice President,
Energy & Infrastructure
Born 1975 1974 1983 1971
Core capabilities • Commercial
• Strategy development and execution
• Finance
• M&A
• Commercial and marketing
• Portfolio management and strategy
• Commercial and marketing
• Industry knowledge
Education • Global Executive MBA,
IE Business School
• MSc in Finance,
Aarhus University
• MSc Marketing,
Northwestern University, Illinois
• Diploma in Business Administration,
Copenhagen Business School
Executive Group
Management
Alexander Enström
1
Executive Vice President,
Marine
Emilie Barriau
Executive Vice President
& Chief Technology Officer
René Overgaard Jensen
Executive Vice President & Chief
Transformation & Information Officer
Anne-Christine Ahrenkiel
Executive Vice President
& Chief People and Culture Officer
Anne Ernst
Executive Vice President,
Strategy & Execution
Born 1983 1978 1972 1970 1985
Core capabilities • Commercial
• Industry knowledge
• Technology and sustainable
innovation
• Science and chemistry
• IT
• Strategy development
and execution
• Innovation
• Enterprise leadership and
organisational development
• People strategy and change
management
• Technology enablement
• Strategy development and execution
• Transformation
Education • MSc Material Chemistry,
Uppsala University
• Ph.D. Polymer Chemistry, Mainz
University
• MBA Business Administration
and Management, Heriot-Watt
University, Edinburgh
• MSc in Political Science, University
of Copenhagen
• MSc International Business,
Copenhagen Business School
1
Malgorzata Kolton succeeded Alexander Enström as EVP, Head of Marine on 1 January 2026 .
26Financial statements
Sustainability statementsCorporate governance
Statements
Our business
Introduction
Hempel Annual Report 2025
Risk management
Managing risks is key to creating the resilience
we need to successfully deliver on our strategy
and keep our organisation safe.
Effective risk management enables us to identify, evaluate and
manage uncertainties that could affect our ability to meet our
strategic objectives and value creation plans. As a global company,
we face a wide range of business opportunities and risks. It is
imperative that we ensure a robust and structured approach to
managing those risks. Our proactive approach to risk management
protects our stakeholders’ interests, supports informed decision-
making and strengthens the long-term resilience of our business.
Risk management in 2025
We enhanced our internal governance process in 2025 by establishing
a dedicated Risk Committee with participation extending beyond
Executive Group Management. Chaired by our Chief Financial Officer,
the Risk Committee includes representatives from Innovation &
Technology, Finance, Operations, Legal and Digital. It ensures stronger
oversight and cross-functional involvement in risk management,
sharpening alignment between our strategic objectives and risk
management practices.
Contract Risk Dashboard
In 2025, we introduced a Contract Risk Dashboard
to improve transparency and oversight of our larger
contractual engagements.
The dashboard provides a structured overview of key
contractual risk exposures and selected contractual
risk KPIs, enabling more proactive risk mitigation and
informed decision-making across the organisation.
We are currently working to implement an AI-powered
solution to further drive efficiency and scalability in
this area.
Strategic assessment on business interruption,
business continuity and risk financing
preparedness
As part of our ongoing focus on resilience, we
conducted a comprehensive business interruption
and operational resilience assessment of our
factories in 2025. While Hempel has a robust
business continuity management framework in
place, we must ensure that our continuity plans
are effective in practice and operationally sound.
The assessment examined each factory’s output,
its role in producing critical products, and how
production could be redistributed in the event of a
disruption. Insights from the assessment are now
being used to strengthen our business continuity
framework and enhance production resilience.
Key risk management focus
areas throughout 2025
27
Hempel Annual Report 2025
Financial statements
Sustainability statementsCorporate governance
Statements
Our business
Introduction
Enterprise Risk Management function
Assists and supports the EGM in fulfilling its
Enterprise Risk Management responsibilities.
Reviews and maintains the Enterprise Risk
Management framework and tools to ensure
their ongoing effectiveness.
Reports to the EGM/Risk Committee and Audit
Committee on key risks including emerging risks.
Compliance function
Provides guidance and expertise to segments
and functions.
Board of Directors / Audit Committee
Oversees the effectiveness of the Enterprise Risk Management programme.
Executive Group Management (EGM) / Risk Committee
Reviews and approves risk management governance, evaluates and approves
Hempel’s key risks and ensures the allocation of accountability of risks to risk sponsors.
Reports to the Audit Committee & Board of Directors on a bi-annual basis.
Risk Sponsors
Ensures that risk management processes are implemented in the segment/functional area.
Assesses, manages, and owns the risks and controls impacting the objectives
in the segment/functional area.
Risk Owners
Responsible for the assigned risks in the segments/functions,
and the design, implementation and monitoring of risk treatment plans.
Segments and functions
Marine, Energy & Infrastructure, Decorative, Digital
& Transformation, Strategy & Execution, Technology,
Finance, People & Culture (see page 26).
Q3
Risk governance (Insurance)
Q1
Risk governance (Insurance)
Q2
Mid-year risk review
• Risk Committee meeting
• Audit Committee meeting
• Board of Directors meeting
Q4
Annual risk review
• Risk Committee meeting
• Audit Committee meeting
• Board of Directors meeting
Annual Enterprise Risk Management Cycle
Enterprise Risk Management framework
The Board of Directors is responsible for overseeing risk
management and for setting Hempel’s risk appetite. The Board
regularly reviews and approves the key risks and assesses
the adequacy of our governance framework for Enterprise Risk
Management.
The Audit Committee assists the Board of Directors in overseeing
the effectiveness of our risk management system and monitoring
its performance. The Risk Committee approves key risks before
reporting to the Audit Committee and the Board.
The Risk Committee is responsible for reviewing and discussing
Hempel’s material and emerging risks. Each key risk is owned by a
designated executive risk sponsor, who is responsible for ensuring
that mitigation plans are implemented and risks remain within
the agreed appetite. Annual risk management activities are fully
aligned with Hempel’s Annual Management Cycle (see Enterprise
Risk Management Cycle).
28
Hempel Annual Report 2025
Financial statements
Sustainability statementsCorporate governance
Statements
Our business
Introduction
Macroeconomic volatility
Our financial performance may be negatively impacted by factors,
such as shifts in foreign policies, economic sanctions, elevated
energy costs, currency fluctuations, inflation, credit availability,
liquidity constraints and increasing interest rates, which could drive
major economies into recession.
— RISK DRIVERS
• Market dynamics could impact raw material prices.
• An economic slowdown caused by higher unemployment rates and
sustained inflation could lead to a decline in consumer confidence,
impacting sales and profits.
• We may experience uneven performance as potential inflationary
recession leads to reduced growth and demand.
• Hempel’s customers could delay their spend decisions if necessary
price adjustments impact their behaviour and willingness to pay.
+ MITIGATING ACTIONS
• We seek to minimise uneven performance risks through strategy
execution and financial planning.
• We have a balanced geographical presence, with revenue generated
from various regions, which helps to ensure a steady revenue.
• We hedge interest rates, assess currency developments and follow
strict financial planning on costs and cash.
• We ensure value-based price setting through our revenue
management programme.
Cyber security breach & resilience
Global digital connectivity continues to transform Hempel. We are
heavily dependent on a robust digital infrastructure for e-commerce
and technology to conduct our day-to-day business activities and
serve our customers. We remain exposed to the growing threat of
cyberattacks, including phishing, ransomware, and other forms of
malicious intrusion. A successful cyberattack or prolonged IT system
outage could compromise sensitive data, disrupt business operations,
and erode stakeholder trust. The increasing sophistication and
frequency of such attacks require continuous investment in
cybersecurity capabilities, monitoring, and employee awareness
to maintain resilience and operational continuity.
— RISK DRIVERS
• Breaches of our infrastructure can lead to internal breaches or
system failure, which could in turn lead to the theft of personal data
and disruption to critical assets and our business in general.
• Malicious attempts to cause long-term damage to Hempel, our
customers, our suppliers and partners through unauthorised access,
destruction, corruption or manipulation of data could cause our
systems to be inaccessible for a period.
• Loss of proprietary information caused by phishing attacks could
lead to negative financial impact and limit business opportunities.
• Breaches or weak security at third-party suppliers can expose
Hempel’s systems or data.
+ MITIGATING ACTIONS
• We ensure an appropriate governance structure, including future-
proofing and enhancements to protect our critical and sensitive
data, assets and reputation.
• We ensure regulatory compliance through various protection
mechanisms within our IT systems and business processes, as
well as company-wide internal audits of selected information
security controls.
• We foster a culture of awareness around cybersecurity via employee
information security education and training (e.g. mandatory and
frequent e-learning).
• We ensure our Digital Disaster Recovery organisation carries out
structured annual exercises. We strengthen and continuously update
technical defences to mitigate cyber risks by implementing various
multi-layered security protocols.
Geopolitical instability
& trade barriers
Operating across multiple regions exposes Hempel to political and
regulatory uncertainty, trade restrictions, sanctions, and shifting
government policies. Rising geopolitical tensions and protectionist
measures could disrupt supply chains, restrict market access, and
create volatility in demand, costs, and currency exposure. Such
developments may adversely affect our global operations, investment
plans, and long-term competitiveness.
— RISK DRIVERS
• Geopolitical tensions could potentially drive up production costs through
tariffs on raw materials used in manufacturing facilities outside of China,
causing disruption to planned new build schedules or dry-docking in China.
• Trade tariffs, along with export restrictions tied to national security,
climate change or human rights concerns, may add complexity to cross-
border sales.
• Heightened geopolitical unrest may result in economic sanctions or
military conflict.
• Unintentional violations of sanctions could harm our brand and reputation.
+ MITIGATING ACTIONS
• We are minimising risks through diversification and maintaining a
balanced product portfolio across the Americas, EMEA, and APAC.
• We are using our global manufacturing presence to mitigate disruptions
and monitor risks closely in key markets, enabling us to swiftly adjust
our contingency plans.
• We proactively assess cross-border relations and adapt to evolving
public and private sector environments.
• We mitigate risks through robust sanction screening, export controls,
and a strong legal compliance framework.
• We are building and testing relevant resilience strategies to navigate
the geopolitical landscape.
29
Hempel Annual Report 2025
Financial statements
Sustainability statementsCorporate governance
Statements
Our business
Introduction
Failure to innovate
If Hempel fails to maintain a strong innovation pipeline through
constant research and development, we risk losing our competitive
advantage, market share, and relevance in key segments. Continuous
innovation is essential to meet evolving customer needs, regulatory
demands, and sustainability expectations.
— RISK DRIVERS
• Our market position may be challenged if competitors develop new
products that better meet the future needs of our customers.
• Insufficient research, development and product management resources
may cause delays in new product development.
• Allocating insufficient resources or misaligning R&D priorities could delay
innovation and limit our ability to meet evolving customer needs.
• Challenges in attracting talent, fostering collaboration, and monitoring
external trends may reduce the effectiveness of our R&D efforts and
expose us to regulatory or intellectual property risks.
• We could miss our commitment to the Science Based Targets initiative
(SBTi) as we would be unable to provide an industry leading sustainable
product assortment.
+ MITIGATING ACTIONS
• We assess our innovation goals and product pipeline on an ongoing
basis to respond to new trends and translate them into key risks and
opportunities.
• We foster an innovative culture that prioritises our capacity to innovate
in order to deliver customer value from innovation and meet our
business goals.
• We closely monitor our strategic initiatives to ensure we remain focused
on delivering futureproof solutions that will help our customers across
our segments achieve their business goals, sustainability agendas and
ESG ambitions.
Critical supply chain disruption
Supply chain disruptions from physical incidents, trade restrictions,
or climate impacts could significantly affect manufacturing conti-
nuity. Loss or failure of key vendors, including raw material suppliers,
contract manufacturers, service providers, or logistics partners,
may hinder access to essential input, production stability, and
customer demand. Reliance on single-source suppliers heightens
risks of delays, cost increases, and quality issues. Such disruptions
could impair our ability to meet contractual obligations and maintain
operational and financial performance.
— RISK DRIVERS
• Risk factors such as power supply disruption, raw material short-
ages and trade restrictions can cause delay or non-delivery of critical
raw materials.
• Cyberattacks or trade restrictions on suppliers could limit raw
material delivery.
• Suppliers are exposed to significant risks, including extreme weather
events or fire, which could cause physical damage to critical suppliers’
locations affecting deliveries.
• Potential regulatory changes can impact our ability to manufacture
products in their current form or environment.
• Global supply chain disruptions or changes in sourcing markets may
impact our ability to secure raw materials and maintain business
continuity.
+ MITIGATING ACTIONS
• We seek to prevent disruptive risks through our operational risk
management approach, which includes a loss prevention risk
engineering programme.
• We review and assess interdependencies and back-up possibilities
across manufacturing sites to secure a steady production pipeline.
• We have a robust business continuity management framework in place.
• We have a dual-sourcing strategy, in which we constantly investigate
and qualify alternative sourcing opportunities.
• We implement specific supply chain risk assessments, including
climate-related risks.
Climate adaptation
The accelerating impacts of climate change present both physical
and transitional risks to Hempel’s operations, supply chains, and
markets. Rising temperatures, extreme weather events, and shifting
regulatory expectations may affect asset integrity, raw material
availability and customer demand patterns. This is exposing Hempel
to a broader range of climate-related challenges that could influence
our operational performance, costs, and long-term strategy.
— RISK DRIVERS
• Potential regulatory risks associated with the shift to a low-carbon
emissions economy may impact government regulation and Hempel’s
ability to deliver on its strategic objectives.
• Climate action failure may change markets in which Hempel conducts
business activities or have a direct influence on our manufacturing
footprint.
• Failure to deliver coatings that withstand harsher climate conditions.
• Extreme weather conditions such as cyclones, tornados, hurricanes
and floods can cause disruption to our supply chain, challenging the
continuity of our business, which can lead to business interruption.
• Change in climate may impact our insurable risk costs.
• Climate change may lead to price volatility or raw material shortages.
• New legislation can have a significant impact on our ability to
manufacture products in their current form.
+ MITIGATING ACTIONS
• We assess the impact that climate-related risk can have on our
business, and we periodically carry out materiality assessments.
Hempel’s science-based targets are approved by the SBTi.
• We actively track global climate regulations and establish climate-
related objectives to ensure compliance and drive progress toward
our sustainability commitments.
• We continue to review climate risk assessments across key
manufacturing sites, with the aim of building resilient continuity
strategies for these sites.
• We assess and react to our fire and natural hazard reports, and work
to reduce the risk of losses by ensuring proper protection plans are
in place. We continuously assess potential investments to further
mitigate risk as an integrated part of CAPEX planning and prioritisation.
30
Hempel Annual Report 2025
Financial statements
Sustainability statementsCorporate governance
Statements
Our business
Introduction
Sustainability
statements
→ Sustainable value creation
→ Futureproof: A journey of positive impact
→ Environment
→ Social
→ Governance
→ ESG data & accounting policies
→ TCFD & TNFD
31
Hempel Annual Report 2025
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Introduction
Hempel Annual Report 2025
32Financial statements
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Introduction
33Financial statements
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Introduction
Environment
Hempel Annual Report 2025
34Financial statements
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Environment
Hempel Annual Report 2025
35Financial statements
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Introduction
Social
Hempel Annual Report 2025
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Social
Hempel Annual Report 2025
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Hempel Annual Report 2025
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48Financial statements
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Consolidated financial statements
Notes
1. Basis of preparation
1.1 Material accounting policy information
. . . . . . . . . . . . . . . 55
1.2 Significant accounting estimates and judgements
. . . . . . . 58
2. Results for the year
2.1 Revenue
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
2.2 Employee costs
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
2.3 Special items
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
2.4 Income tax, tax assets and liabilities
. . . . . . . . . . . . . . . . . 63
3. Operating assets and liabilities
3.1 Intangible assets
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
3.2 Property, plant and equipment
. . . . . . . . . . . . . . . . . . . . . 70
3.3 Leases
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
3.4 Inventories
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
3.5 Trade receivables
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
3.6 Pension and other post-employment benefit obligations
. . . 76
3.7 Provisions
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
3.8 Other liabilities
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
4. Capital structure and financing items
4.1 Share capital, distribution to shareholder
. . . . . . . . . . . . . 80
4.2 Borrowings
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
4.3 Financial risks
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
4.4 Financial instruments
. . . . . . . . . . . . . . . . . . . . . . . . . . . 86
4.5 Financial income and expenses
. . . . . . . . . . . . . . . . . . . . 87
4.6 Discontinued operations
. . . . . . . . . . . . . . . . . . . . . . . . . 88
5. Other disclosures
5.1 Fee to the auditor appointed at the General Meeting
. . . . . . 89
5.2 Adjustment for non-cash items
. . . . . . . . . . . . . . . . . . . . . 89
5.3 Contingent liabilities and other commitments
. . . . . . . . . . . 89
5.4 Events after the reporting period
. . . . . . . . . . . . . . . . . . . 89
5.5 Related parties and ownership
. . . . . . . . . . . . . . . . . . . . 90
5.6 The Hempel Group
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
5.7 Financial definitions
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Primary statements
Consolidated statement of profit or loss . . . . . . . . . . . . . . . . . 51
Consolidated statement of comprehensive income
. . . . . . . . . 51
Consolidated statement of financial position
. . . . . . . . . . . . . . 52
Consolidated statement of changes in equity
. . . . . . . . . . . . . 53
Consolidated cash flow statement
. . . . . . . . . . . . . . . . . . . . . 54
Hempel Annual Report 2025
Consolidated financial statements 50Financial statements
Sustainability statementsCorporate governance
Statements
Our business
Introduction
Consolidated statement of profit or loss Consolidated statement of comprehensive income
Note (EUR m) 2025 2024
2.1 Revenue 2,165 2,185
2.3 Production costs - 1,210 - 1,237
Gross profit 955 948
2.3 Sales and distribution costs - 521 - 511
2.3 Administrative costs - 165 - 160
Other operating income and expense, net 10 -
Operating profit 279 277
4.5 Financial income 6 28
4.5 Financial expenses - 72 - 85
Profit before tax 213 220
2.4 Income tax - 47 - 50
Profit for the year from continuing operations 166 170
4.6 Net profit or loss for the year from discontinued operations 2 - 90
Profit for the year 168 80
Attributable to:
Equity holders of the parent company 151 60
Non-controlling interests 17 20
Profit for the year 168 80
Note (EUR m) 2025 2024
Profit for the year 168 80
Other comprehensive income:
Items that may be reclassified to profit or loss:
Exchange rate differences on translation of foreign operations - 78 57
4.4 Value adjustments of hedges 2 3
2.4 Tax on items that may be reclassified 6 - 6
Items that will not be reclassified to profit or loss:
3.6 Remeasurements of defined benefit pension obligations 1 2
2.4 Tax on items that will not be reclassified - -
Other comprehensive income/loss for the year, net of tax - 69 56
Total comprehensive income for the year 99 136
Attributable to:
Equity holders of the parent company 90 113
Non-controlling interests 9 23
Total comprehensive income for the year 99 136
Hempel Annual Report 2025
Consolidated financial statements 51Financial statements
Sustainability statementsCorporate governance
Statements
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Introduction
Consolidated statement of financial position
31 December
Note (EUR m) 2025 2024
3.1 Intangible assets 743 793
3.2 Property, plant and equipment 430 480
3.3 Right-of-use assets 107 122
Other financial assets 9 9
3.6 Defined benefit pension plan surpluses 5 4
2.4 Deferred tax assets 127 122
Total non-current assets 1,421 1,530
3.4 Inventories 277 336
3.5 Trade receivables 442 450
Income tax receivables 26 22
Prepayments 23 20
Other receivables 62 63
Cash 163 210
Total current assets 993 1,101
Total assets 2,414 2,631
Note (EUR m) 2025 2024
4.1 Share capital 20 19
4.1 Share premium 591 590
4.1 Warrants 6 6
Translation reserve - 36 28
Cash flow hedging - - 2
Retained earnings 569 417
Shareholders in Hempel A/S’s share of equity 1,150 1,058
Non-controlling interests 56 67
Total equity 1,206 1,125
4.2 Borrowings 351 548
3.3 Lease liabilities 84 95
3.7 Provisions 47 55
3.6 Defined benefit pension plan deficits 20 22
2.4 Deferred tax liabilities 62 70
Total non-current liabilities 564 790
4.2 Borrowings 42 75
3.3 Lease liabilities 30 34
Trade payables 304 317
Deferred income 6 7
3.7 Provisions 23 21
Income tax payables 33 44
3.8 Other liabilities 206 218
Total current liabilities 644 716
Total liabilities 1,208 1,506
Total equity and liabilities 2,414 2,631
Hempel Annual Report 2025
Consolidated financial statements 52Financial statements
Sustainability statementsCorporate governance
Statements
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Introduction
Consolidated statement of changes in equity
Note (EUR m) Share
capital
Share
premium
Warrants Translation
reserve
Cash flow
hedging
Retained
earnings
Proposed
dividend
Shareholders
in Hempel A/S’
share of equity
Non-
controlling
interests
Total
equity
Equity at 1 January 2024 15 - - - 24 - 4 490 25 502 57 559
Profit for the year - - - - - 60 - 60 20 80
Other comprehensive income - - - 52 2 - 1 - 53 3 56
Total comprehensive income for the year - - - 52 2 59
Transactions with owners in their capacity as owners:
Additional share issue and contribution 4 590 6 - - - - 600 - 600
Paid extraordinary dividend - - - - - - 132 - - 132 - - 132
Paid dividends - - - - - - - 25 - 25 - 13 - 38
Total transactions with owners 4 590 6 - - - 132 - 25 443 - 13 430
4.1 Equity at 31 December 2024
1
Equity at 1 January 2025 19 590 6 28 - 2 417 - 1,058 67 1,125
Profit for the year - - - - - 151 - 151 17 168
Other comprehensive income - - - - 64 2 1 - - 61 - 8 - 69
Total comprehensive income for the year - - - - 64 2 152 - 90 9 99
Transactions with owners in their capacity as owners:
Additional share issue and contribution 1 1 - - - - - 2 2
Paid dividends - - - - - - - - - 20 - 20
Total transactions with owners 1 1 - - - - - 2 - 20 - 18
4.1 Equity at 31 December 2025
1
Transaction costs totalling EUR 12 million were accounted for as a deduction from equity in the year ended 31 December 2024.
Hempel Annual Report 2025
Consolidated financial statements 53Financial statements
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Introduction
Consolidated cash flow statement
Note (EUR m) 2025 2024
Cash flows from financing activities
4.4 Repayment of lease liabilities - 38 - 37
Proceeds from borrowings 575 317
Repayment of borrowings -805 - 840
Proceeds of issue of equity - 600
Transactions with shareholders:
4.1 Dividend distributed to shareholders - - 157
4.1 Dividend distributed to and other transactions with non-controlling interests - 20 - 18
Total cash flows from financing activities - 288 - 135
Net cash flow - 29 4
Cash at beginning of year 210 209
Exchange adjustment - 18 - 3
Cash at end of year 163 210
Note (EUR m) 2025 2024
Cash flows from operating activities
Operating profit 279 277
Operating profit from discontinued operations 2 - 81
5.2 Adjustment for non-cash items 101 209
Total cash flows from operating activities before financial items, tax and
changes in working capital 382 405
Changes in working capital:
Change in receivables - 34 16
Change in inventories 31 - 26
Change in trade payables, other liabilities etc. 6 - 36
Total change in working capital 3 - 46
Total cash flows from operating activities before financial items and tax 385 359
Income tax paid - 75 - 75
Interest received 8 9
Interest paid - 24 - 68
Total cash flows from operating activities 294 225
Cash flows from investing activities
Purchase of property, plant and equipment - 28 - 61
Purchase of intangible assets - 16 - 32
Sale of property, plant and equipment 1 3
Divestment of enterprises 8 4
Total cash flows from investing activities - 35 - 86
Free cash flow 259 139
Hempel Annual Report 2025
Consolidated financial statements 54Financial statements
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Statements
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Introduction
1 Basis of preparation
Introduction
The consolidated financial statements of
Hempel A/S for the period 1 January –
31 December 2025 comprise Hempel A/S
and its subsidiaries (the Group).
The Board of Directors considered and approved
the 2025 Annual Report of Hempel A/S on
3 March 2026. The Annual Report will be
submitted to the shareholders of Hempel A/S
for adoption at the Annual General Meeting
on 20 March 2026.
Basis of preparation
The consolidated financial statements have
been prepared on a going concern basis and in
accordance with IFRS as endorsed by the EU and
additional Danish disclosure requirements applying
to entities of reporting class C for large companies.
The accounting policies have been applied
consistently in the preparation of the consolidated
financial statements and for the comparative figures.
The notes are grouped in sections and include
the relevant accounting policies. The Group’s
significant accounting estimates and judgements
are described in note 1.2 Significant accounting
estimates and judgements.
New standards, interpretations
and amendments adopted
The Group applied Amendments to IAS 21
‘The Effects of Changes in Foreign Exchange
Rates – Lack of Exchangeability’ from 1 January
2025. This amendment did not have any impact
on the amounts recognised in current or prior
periods and is not expected to significantly affect
future periods.
New standards and interpretations
not yet adopted
New accounting standards and interpretations
that have been issued, but are not mandatory for
the 31 December 2025 reporting period, have not
been early adopted by the Group. These standards
are not expected to have a material impact on
recognition or measurement for the Group in
future reporting periods, or on foreseeable future
transactions.
IFRS 18 ‘Presentation and Disclosure in Financial
Statements’ replaces IAS 1 ‘Presentation of
Financial Statements’ and is effective for reporting
periods beginning on or after 1 January 2027.
The Group is working to identify the impact of
IFRS 18 on the primary financial statements and
the note disclosures.
Basis of consolidation
The consolidated financial statements comprise
the parent company, Hempel A/S, and entities
controlled by Hempel A/S (subsidiaries). Control
is achieved when the Group is exposed to, or has
a right to, variable returns from its involvement
with the investee and has the power to affect
those returns through its power over the investee.
Subsidiaries are consolidated from the date on
which control commences until the date on which
control ceases.
Control is usually achieved by directly or indirectly
owning, or in other ways controlling, more than 50%
of the votes or other rights through agreements of
management control. De facto control and other
potential voting rights at the balance sheet date
are also considered when determining whether
control is achieved. Consolidation is performed by
summarising the financial statements of the parent
company and its subsidiaries. On consolidation,
items of a uniform nature are combined.
Elimination is made of intercompany income
and expenses, shareholdings, dividends and
intra-Group balance accounts as well as of realised
and unrealised gains and losses on transactions
between the consolidated enterprises.
When the Group loses control of a subsidiary,
it derecognises the assets (including goodwill),
liabilities, the carrying amount of any non-
controlling interests and components of equity
attributable to the non-controlling interests.
Any gain or loss is recognised within other
operating income and expenses.
The acquisition method of accounting is used to
account for business combinations by the Group.
Discontinued operations
Discontinued operations are excluded from the
results of continuing operations and presented
as a single amount in profit or loss after tax from
discontinued operations in the statement of profit
or loss. For discontinued operations, comparatives
are restated in the statement of profit or loss.
Refer also to note 4.6 Discontinued operations.
Non-controlling interests
Non-controlling interests’ share in the results and
equity of subsidiaries is shown separately in the
consolidated statement of profit or loss, statement
of comprehensive income, statement of financial
position and statement of changes in equity,
respectively.
The Group treats transactions with non-controlling
interests that do not result in a loss of control
as transactions with equity owners of the Group.
A change in ownership interest results in an
1.1 Material accounting policy information
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adjustment between the carrying amounts of
the controlling and non-controlling interests to
reflect their relative interests in the subsidiary.
Any difference between the amount of the
adjustment to non- controlling interests and any
consideration paid or received is recognised in
retained earnings within equity.
Presentation currency
The functional currency of the parent company
is DKK, however the consolidated financial
statements are presented in million EUR as the
Group operates in a global environment with
international stakeholders.
Translation of transactions and balances
in foreign currencies
Items included in the financial statements of
each of Hempel’s entities are measured using the
currency of the primary economic environment in
which the entity operates (functional currency).
Transactions denominated in currencies other than
the functional currency are considered transactions
denominated in foreign currencies. Transactions in
foreign currencies are translated into the functional
currency of the entity using exchange rates
prevailing at the date of transaction.
Receivables, payables and other monetary items
denominated in foreign currencies are translated at
the exchange rates on the reporting date. Foreign
exchange differences arising between the exchange
rates at the transaction date and at the date of
payment are recognised as foreign exchange gains
and losses in the statement of profit or loss as
financial income or financial expenses.
Non-monetary items recognised in foreign
currencies are measured at the transaction
date exchange rates and are not subsequently
retranslated.
Translation of Group companies
The results and financial position of foreign
operations with a functional currency other than
EUR (and which is not the currency of a hyper-
inflationary economy) are translated into the
presentation currency EUR as follows:
• assets and liabilities are translated at the
exchange rate on the reporting date
• income and expenses in profit or loss and in
the statement of comprehensive income are
translated at monthly average exchange rates
(unless this is not a reasonable approximation
of the rates prevailing on the transaction
dates, in which case income and expenses are
translated at the dates of the transactions)
• share capital denominated in a currency that
differs from the presentation currency of the
consolidated financial statements is translated
at historical cost
• all resulting exchange differences are
recognised in other comprehensive income
and attributed to a separate component of
equity (translation reserve). However, where
the entity is not wholly-owned, a proportion
of the translation difference is allocated to
the non- controlling interests.
Foreign currency translation adjustments arising
on loans to, or borrowings from, subsidiaries
which are neither planned nor likely to be settled
in the foreseeable future, and which are therefore
considered to form part of the net investment in
the subsidiary, are recognised directly in other
comprehensive income under the separate
translation reserve within equity. When a foreign
operation is derecognised, the associated
cumulative exchange rate differences are
reclassified to profit or loss, as part of the gain
or loss on sale. Repayment of loans considered
a part of the net investment in a subsidiary is
not considered a disposal when Hempel retains
its proportionate ownership interests, thus the
cumulative exchange difference is not reclassified
to profit or loss.
Goodwill and fair value adjustments arising on
the acquisition of a foreign operation are treated
as assets and liabilities of the foreign operation.
Hyperinflation
In foreign subsidiaries that operate in hyper-
inflationary economies, income and expenses
are translated into the presentational currency
EUR at the exchange rate at the reporting date.
Prior to translating the financial statements of
foreign operations in hyperinflationary economies,
the income statement and non-monetary balance
sheet items are restated taking into account
changes in the general purchasing power of the
functional currency based on the inflation up
to the reporting date (‘inflation adjustment’).
The effect of the inflation adjustment is
recognised in Other comprehensive income
within the translation reserve. In the statement
of profit or loss, any gain or loss arising on the
net monetary position in the foreign entities is
recognised as financial income or expense.
The assessment as to when an economy is
hyperinflationary is based on qualitative as well
as quantitative factors, including whether the
accumulated inflation over a three-year period
exceeds 100%. Currently, Turkey and Argentina
are considered hyperinflationary economies and
thus the Group’s operations in Argentina and
Turkey have been remeasured in accordance with
the principles described, applying the national
Consumer Price Index (CPI) of Argentina and
Turkey, respectively, for the inflation adjustment.
1.1 Material accounting policy information — continued
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Classification of operating expenses in the
statement of profit or loss
Production costs
Production costs comprise costs incurred to
generate revenue for the year. Costs comprise
raw materials, consumables, direct labour
costs and indirect production costs, such as
maintenance, amortisation and depreciation, as
well as costs for operation, administration and
management of factories. Production costs also
include research and development costs that do
not qualify for capitalisation as well as amortisation
of capitalised development costs (except for
amortisation of business application software).
Write-downs of inventory are also included.
Sales and distribution costs
Sales and distribution costs comprise costs
incurred to distribute products and for sales
campaigns, including costs for sales and
distribution staff, advertising costs, depreciation
of sales equipment and amortisation of customer
relationships.
Administrative costs
Administrative costs comprise costs incurred for
management and administration of the Group,
including costs for administrative staff and
management as well as office costs, depreciation
and write-downs for bad debt. Amortisation of
brands and software business applications are
also recognised in administrative costs.
Cash flow statement
The statement of cash flows is presented using
the indirect method. The statement of cash
flows for the Group shows the cash flows for the
year, broken down into operating, investing and
financing activities and changes in the Group’s
cash and cash equivalents from the beginning of
the year to the end of the year. The statement of
cash flows cannot be immediately derived from
the published financial records.
Cash flow from operating activities
Cash flow from operating activities is calculated
as the operating profit or loss for the year
adjusted for changes in working capital, non-cash
items such as depreciation, amortisation and
impairment losses and provisions, as well as
interest and tax paid.
Cash flow from investing activities
Cash flow from investing activities comprises
cash flows from purchases and disposals of
intangible assets, property, plant and equipment
and acquisitions/divestments of enterprises.
Cash flow from financing activities
Cash flow from financing activities comprises
cash flows from the raising and repayment of
principal long-term and short-term debt, including
repayment of lease liabilities as well as payments
to and from shareholders.
Cash flow in currencies other than the
functional currency
Cash flow in currencies other than the functional
currency are translated at the average exchange
rates for the month, unless these differ significantly
from the rates at the transaction date, in which
case the exchange rate at the transaction date
is applied.
Cash
Cash comprises cash at hand and bank deposits.
1.1 Material accounting policy information — continued
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1.2 Significant accounting estimates and judgements
In preparation of the consolidated financial
statements, management is required to make
various accounting judgements and estimates that
affect the reported amounts of assets, liabilities,
income and expenses, including the related
disclosures. A degree of uncertainty is involved
in carrying out these judgements and estimates
which could result in adjustments to the carrying
amount of assets and liabilities in future periods.
The judgements, estimates and the related
assumptions made are based on historical
experience and other factors that management
considers to be reasonable under the given
circumstances. Estimates and judgements are
reviewed on an ongoing basis.
The Group’s significant accounting estimates and
judgements are described below.
Significant accounting estimates
The significant accounting estimates are those
that have a significant risk of resulting in a
material adjustment to the carrying amounts of
assets and liabilities in a subsequent reporting
period.
Warranties
The Group generally offers warranties for its
products and receives claims under these
warranties. Management makes estimates
regarding the related provisions, both for claims
that have already been received and for claims
that may be received in the future related
to products already sold that are still under
warranty at the reporting date. For claims already
received estimates take into account technical
assessments of the validity of the claim, the
costs of remediation and input from internal
and external counsel regarding the probability
of pending legal disputes and future litigation
outcomes. For claims not yet received related to
products sold before the reporting date, historical
warranty claim information is used as the basis
of the estimate of the provision, as well as
recent trends that might suggest that historical
claim levels do not accurately represent an
approximation of the costs of future claims.
Factors that could impact the estimated amounts
include whether the claims are received and
deemed valid, to what extent the claims are
covered by the product warranty and estimates
of the costs of coating products and other
associated costs for remediating any product
failure. Reference is made to note 3.7 Provisions
for information about the Group’s warranty
provision.
The Group has taken out insurance against
product failures. The product failure insurance is,
to a certain extent, linked to the size and nature
of claims. This reduces the overall exposure to
warranty claims and the potential net impact on
profit and loss from claims.
Uncertain income tax positions
Hempel has activities and subsidiaries in many
different countries, and therefore is subject to
income taxes in tax jurisdictions around the world.
Uncertain tax positions relate to uncertainty in the
interpretation of tax legislation in the countries
Hempel operates in.
Significant estimates and judgements are required
when determining the worldwide accrual for
income taxes, deferred income tax assets and
liabilities, and provision for uncertain tax positions.
In the course of conducting business globally,
transfer pricing disputes with tax authorities may
occur, and management’s judgement is applied
to assess the possible outcome of such disputes.
Hempel believes that the provision made for
uncertain tax positions is adequate. However,
due to the uncertainty, there is a possibility that,
on conclusion of open tax matters at a future
date, the final outcome may differ significantly.
Reference is made to note 2.4 Income tax, tax
assets and liabilities.
Valuation of deferred tax assets
The deferred tax assets are recognised for carry-
forward tax losses expected to be utilised and
temporary deductible differences.
The Group recognises deferred tax assets,
including the expected value of carry-forward
tax losses, based on an assessment of the
recoverability of the deferred tax assets,
both at initial recognition and subseqently on
a regular basis.
The assessment of the recoverability of the
deferred tax assets involves estimates by
management as to the likelihood of the utilisation
of the deferred tax assets within a foreseeable
future. This depends on a number of factors,
including whether there will be sufficient taxable
profits available in future periods, against which
the carry- forward tax losses can be utilised. In the
event that actual future taxable profits generated
are less than expected, impairment of the deferred
tax assets may be required. Reference is made to
note 2.4 Income tax, tax assets and liabilities.
Impairment test of goodwill
In performing the annual impairment test,
management assesses whether the groups of
Cash Generating Units (CGUs) to which the goodwill
relates will be able to generate sufficient positive
net cash flows to support their carrying amount
together with other net assets of the respective
groups of CGUs. This assessment is based on
estimates of expected future cash flows. The cash
flows are derived from the forecast for the next five
years and do not include restructuring activities that
Hempel is not yet committed to or significant future
investments that will enhance the performance
of the assets of the groups of CGUs being tested.
The recoverable amount is sensitive to the
discount rate used, as well as the expected future
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cash inflows and the terminal growth rate used
for extrapolation purposes. The key assumptions
used to determine the recoverable amount for the
different groups of CGUs are disclosed and further
explained in note 3.1 Intangible assets.
Impairment test of brand
In performing the annual impairment test of the
Farrow & Ball brand, management assesses
whether the brand will be able to generate
sufficient positive net cash flows to support the
carrying amount of the brand. The assessment
is performed using a relief-from-royalty method
based on expected future cash flows generated
from the royalty savings attributable to owning
the brand. The expected cash flows are based
on assumptions about the royalty rate, expected
future revenue and the discount rate. The key
assumptions used to determine the recoverable
amount of the brand are disclosed and further
explained in note 3.1 Intangible assets.
Significant accounting judgements
The significant judgements, apart from those
that involve estimations, are the judgements that
management made in the process of applying the
Group’s accounting policies and that have the
most significant effect on the amounts recognised
in the consolidated financial statements.
Useful life of brands
Management has assessed that certain brands,
in particular the Farrow & Ball brand, have an
indefinite useful life as there is no foreseeable
limit to the period over which the brand is
expected to generate net cash inflows, based on
the brand being well-established in its markets,
having existed for decades and having no legal,
regulatory, contractual, competitive, economic or
other factors limiting the useful life of the brand.
1.2 Significant accounting estimates and judgements — continued
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2 Results for the year
Accounting policies
The Group mainly generates revenue from the
sale of paints and coatings (goods for resale and
finished goods) based on prices and conditions
stated in the contracts with customers. The primary
revenue-generating activity comprises sale of
finished goods. In addition, the Group generates
a minor part of its revenue from the provision of
technical services.
Revenue from sale of paints and coatings is
recognised when the related performance
obligation is satisfied by transferring control of
the promised goods to a customer. The Group’s
customer contracts usually include only a single
performance obligation. Control of the paints
and coatings is obtained when the goods are
transferred to the customer. Where the Group
provides technical services, including advice,
training, project oversight and surface management
services, etc., revenue is recognised over time
as the services are rendered.
Revenue from contracts with customers is
measured at an amount that reflects the
consideration to which Hempel expects to
be entitled in exchange for those goods and
services (trans action price), which normally
comprises the price specified in the contract,
net of discounts and customer bonuses.
The Group offers various discounts, including
rebates, bonuses, volume discounts and
payments to customers depending on the nature
of the customer and business. These discounts
are considered variable consideration. Bonuses
and discounts payable to a customer are accrued
for as the related performance obligations are
satisfied and revenue is recognised. Historical
experience is used to estimate and provide for
the discounts, using the expected value method.
Variable consideration related to discounts is only
recognised as revenue to the extent that it is highly
probable that a significant reversal will not occur
in a later period. In the case of expected returns,
a refund liability and a right to the returned goods
(included in other current assets) are recognised
for the products expected to be returned.
Revenue
The vast majority of the Group’s performance
obligations are satisfied within one year or less.
Amounts for remaining performance obligations
(order backlog) are therefore not disclosed
in accordance with the practical expedient in
IFRS 15.121.
Payments from customers are due depending on
the type of customer and local business practices,
though typically within 30-90 days. Longer credit
terms are provided in certain countries, though
normally not exceeding 180 days. Retail payments
are normally due immediately after control of
the goods has transferred to the customer.
Accordingly, no significant element of financing
is present.
Disaggregation of revenue
The following table displays revenue disaggregated
into sale of goods per geographical region:
(EUR m) 2025 2024
EMEA 1,209 1,225
Asia-Pacific 721 700
Americas 235 260
Total revenue 2,165 2,185
Revenue disaggregated into sale of goods
per customer category:
(EUR m) 2025 2024
Marine 750 709
Energy & Infrastructure 775 823
Decorative 640 653
Total revenue 2,165 2,185
2.1 Revenue
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2.2 Employee costs
Accounting policies
Employee costs include wages and salaries,
pensions, social security contributions, annual
leave and sick leave, bonuses and non-monetary
benefits. Employee costs are recognised in the
financial year in which the associated services
are rendered.
Costs for long-term employee benefits provided
by the Group are recognised in the period in which
they are earned.
For further information about the Group’s pension
plans, reference is made to note 3.6 Pensions and
other post-employment benefit obligations.
Equity-settled share-based payment transactions
are measured at fair value determined at the
date of grant and recognised as an expense over
the vesting period with a corresponding increase
in equity.
Key management compensation
Together with the Board of Directors, key
management personnel comprise individuals
in the Registered Executive Management and
the Executive Group Management (EGM).
Registered Executive Management is a part of
the EGM and the EGM consists of 9 individuals
(2024: 8 individuals).
(EUR m) 2025 2024
Employee costs
Wages and salaries 379 377
Pensions – defined contribution plans 23 22
Pensions – defined benefit plans 1 2
Other social security contributions 25 24
Other employee costs 23 23
Total employee costs for the year 451 448
Average number of full-time employees 6,919 6,932
Employee costs have been recognised in the statement of profit or loss as follows:
Production costs 137 140
Sales and distribution costs 236 229
Administrative costs 78 79
Total employee costs in profit and loss 451 448
(EUR m) 2025 2024
Registered Executive Management
Wages and salaries 2.6 3.2
Pensions – defined contribution plans 0.2 0.2
Other long-term benefits - 1.5
Total 2.8 4.9
Other key management personnel
Wages and salaries 3.3 3.6
Pensions – defined contribution plans 0.2 0.4
Severance pay 0.8 2.0
Other long-term benefits - 2.4
Total 4.3 8.4
Board of Directors
Board fee 1.3 1.2
Total 1.3 1.2
Total compensation to key management personnel 8.4 14.5
Remuneration of the Executive Group Management
includes a fixed salary, company car and other
standard fringe benefits, and an annual bonus
payment which cannot exceed 70-100% of the
individual’s fixed salary.
The annual cash bonus payment is contingent
upon the fulfilment of ESG targets, including
climate targets, and the realisation of specific
financial targets.
During 2024, a management incentive plan was
implemented whereby members of the EGM and
certain other senior managers were offered the
opportunity to purchase, at fair value, shares and
warrants of the company. New members of the
EGM in 2025 were offered the same opportunity.
The arrangement is classified as an equity-
settled arrangement. As the participants in the
plan pay fair value for the shares and warrants
purchased, no share-based payment expense
is incurred by the company as a result of these
equity-settled transactions. If a participant ceases
to be an employee of the company, the provisions
of the plan may permit or require the company
to repurchase the leaver’s shareholdings for
either the original cost or fair value at the time of
repurchase, depending upon the circumstances.
See note 4.1 for further information.
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2.3 Special items
Special items include significant income and
expenses of a special nature relative to the
Group’s earnings-generating activities, such
as costs related to M&A activities (including
gains and losses on disposals of businesses),
integration of acquired businesses and
significant restructuring costs. Other significant
amounts of a non-recurring nature are also
included in special items.
Due to the significant impact on the statement of
profit or loss, these non-recurring items of special
nature are disclosed separately in this note.
The special items are presented in the statement
of profit or loss within the functions shown in the
table below.
In 2025, restructuring costs mainly comprised
severance pay; the restructuring initiatives are
aligned with Hempel’s strategic ambition to
improve competitiveness.
Special items (EUR m) 2025 2024
Restructuring costs 7 -
M&A and integration related items - 4 -
Total special items 3 -
(EUR m) 2025 2024
Production costs 2 -
Sales and distribution costs 3 -
Administrative costs 2 -
Other operating income - 4 -
Total special items 3 -
A long-term cash-based incentive scheme,
comprised of rolling three-year cash-based bonus
programmes, was discontinued for the Executive
Group Management and certain other senior
managers in 2024.
All programmes were subject to vesting criteria
based on a number of factors, including the
realisation of minimum financial targets for the
nominal EBITDA accumulated over the three-year
period. The outcome was calculated at the end
of the three-year programme period. The long-
term cash incentive programme payment cannot
exceed 110-120% of the individual’s fixed annual
salary. Final payments for the relevant participants
under this scheme were made in 2024 and are
included in the table on the previous page.
The Board of Directors determines annually
whether to instigate new programmes and, if so,
the scope and objectives of these programmes.
The compensation paid or payable to key
management personnel for employee services
is shown in the table on the previous page.
Total remuneration for Registered Executive
Management and Board of Directors amounted
to EUR 4 million in 2025 (2024: EUR 6 million).
2.2 Employee costs — continued
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2.4 Income tax, tax assets and liabilities
Income tax
Accounting policies
The income tax expense for the year is the tax
payable on the current year’s taxable income
based on the applicable income tax rate for each
jurisdiction, adjusted for changes in deferred tax
assets and liabilities attributable to temporary
differences and to unused tax losses, changes
due to changes in tax rates, adjustments to tax
from prior years and changes in provision for
uncertain tax positions.
Current tax payable and receivable are
recognised in the consolidated statement of
financial position as tax computed on the taxable
income for the year, adjusted for tax on taxable
income for prior years and for prepaid tax.
Current tax and changes in deferred tax are
recognised in profit and loss, except to the
extent that it relates to items recognised in other
comprehensive income or directly in equity.
In these cases, the tax is recognised in other
comprehensive income or directly in equity,
respectively.
The current income tax charge is calculated on
the basis of the tax laws enacted or substantively
enacted at the balance sheet date in the countries
where the parent company and its subsidiaries
operate and generate taxable income. Management
periodically evaluates positions taken in tax returns
with respect to situations in which applicable tax
regulation is subject to interpretation.
In the case of uncertain tax positions, if it is
considered probable that the Group’s proposed
tax treatment will be accepted by the taxation
authority, such position is recognised in the
financial statements. If acceptance by the
taxation authority is not considered probable,
the uncertainty is reflected in the amounts of
tax assets and liabilities recognised. Uncertain
tax positions are assessed individually, and the
possible outcome is measured based on either
the most likely amount or a probability-weighted
expected value, depending on which method
is considered to better predict the resolution
of the uncertainty. Uncertain tax positions
relate to various tax disputes, including transfer
pricing cases.
Tax for the year (EUR m) 2025 2024
Tax for the year is specified as follows:
Tax on profit for the year - 47 - 50
Tax on other comprehensive income 6 - 6
Total tax for the year - 41 - 56
Tax on profit for the year is calculated as follows:
Current tax for the year - 44 - 72
Deferred tax for the year 6 23
Adjustments in respect of prior years, current tax - 2 4
Adjustments in respect of prior years, deferred tax - 7 - 5
Total tax on profit for the year - 47 - 50
Effective tax rate of the Group
Danish tax rate 22.0% 22.0%
Higher/(lower) tax rates of foreign subsidiaries - 4.2% - 1.8%
Permanent differences 0.2% 0.6%
Unrecognised deferred tax assets 5.9% 5.9%
Recognised deferred tax assets related to prior years - 1.1% - 7.4%
Adjustments in respect of prior years - 3.9% - 0.3%
Other adjustments 0.1% 0.1%
Withholding taxes and other income taxes 2.8% 2.2%
Effective tax rate of the Group excluding hyperinflation 21.8% 21.3%
Hyperinflation 0.3% 1.4%
Effective tax rate of the Group 22.1% 22.7%
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2.4 Income tax, tax assets and liabilities — continued
Deferred tax
Accounting policies
Deferred income tax is provided in full, using the
liability method, on temporary differences arising
between the tax bases of assets and liabilities
and their carrying amounts in the consolidated
financial statements. However, deferred tax
liabilities are not recognised if they arise from the
initial recognition of goodwill. Deferred income tax
is also not accounted for if it arises from initial
recognition of an asset or liability in a transaction
other than a business combination that, at the
time of the transaction, affects neither accounting
profit nor taxable profit or loss. Deferred income
tax is calculated using tax rates and laws that
have been enacted or substantially enacted by the
end of the reporting period and are expected to
apply when the related deferred income tax asset
is realised or the deferred income tax liability is
settled. Deferred tax is adjusted for elimination of
unrealised intra-group gains and losses.
Deferred tax assets are recognised if it is probable
that future taxable amounts will be available to
utilise those temporary differences and losses.
Deferred tax liabilities and assets are not
recognised for temporary differences between
the carrying amount and tax bases of investments
in foreign operations where Hempel A/S is able to
control the timing of the reversal of the temporary
differences and it is probable that the differences
will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset
when there is a legally enforceable right to offset
current tax assets and liabilities and when the
deferred tax balances relate to the same taxation
authority. Current tax assets and tax liabilities are
offset where the entity has a legally enforceable
right to offset and intends either to settle on a net
basis, or to realise the asset and settle the liability
simultaneously.
Deferred tax recognised in the statement of financial position (EUR m) 2025 2024
Deferred tax, beginning of year 52 35
Recognised in profit or loss 6 22
Recognised in other comprehensive income 4 -
Adjustments in respect of prior years 3 - 5
Deferred tax assets and liabilities at 31 December, net 65 52
Specification of deferred tax assets (EUR m) 2025 2024
Intangible assets 10 16
Property, plant and equipment 2 7
Inventories 7 2
Trade receivables 6 2
Provisions and defined benefit pension plan deficits 23 30
Lease liabilities 2 1
Tax loss carryforwards 73 64
Tax on other comprehensive income 4 -
Deferred tax assets at 31 December 127 122
Specification of deferred tax liabilities (EUR m) 2025 2024
Intangible assets 38 40
Property, plant and equipment 6 2
Provisions and defined benefit pension obligations 18 28
Deferred tax liabilities at 31 December 62 70
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Introduction
The Group recognises deferred tax assets,
including the expected value of tax loss carry-
forwards, to the extent that it is probable that
taxable profit will be available against which the
deductible temporary differences and unused
tax losses can be utilised. At 31 December
2025, Hempel recognised a deferred tax asset
related to tax loss carry forwards of EUR 60 million
(2024: EUR 64 million).
Management has considered future taxable
income and applied judgement in assessing
whether deferred income tax assets should be
recognised. The assessment of the recoverability
of the deferred tax assets depends on a number
of factors, including whether there will be sufficient
taxable profits available in future periods in tax
jurisdictions for which the tax loss carry forwards
can be utilised.
Assessment of the recoverability of the deferred
tax assets is based on taxable income projections
that contain estimates of, and tax strategies for,
the future taxable income, taking into account
the general market conditions, recent financial
performance of the individual entities and the
Group’s approved business plan. The projections
are based on the Group’s five-year forecast,
though in certain cases a longer forecast period
is used. Such projections are inherently subject to
uncertainty, as the realisation of the projections
are dependent on the outcome of future events.
It is management’s assessment that the forecast is
achievable and supports the recognised deferred
tax assets. In making this assessment, business
initiatives to improve organic growth and taxable
income are considered together with expected
allocation of future taxable income based on the
transfer pricing policy in place.
The international tax reform – Pillar Two
model rules
The Pillar Two model rules apply for the Hempel
Group as of 1 January 2024. The current tax
expense related to Pillar Two income taxes
amounts to EUR 2.8 million for 2025 (2024: EUR
1.7 million).
Hempel has applied the exception of not
recognising deferred tax assets and liabilities
arising from the implementation of the Pillar Two
model rules.
2.4 Income tax, tax assets and liabilities — continued
Deferred tax assets not recognised in the statement of financial position (EUR m) 2025 2024
Temporary differences 4 1
Tax loss carryforwards 58 44
Total tax asset not recognised 62 45
Temporary differences, gross 14 3
Tax loss carryforwards, gross
1
222 149
Total gross values 236 152
1
Out of tax loss carryforwards, 0% (2024: 0%) expire within 1 year, 1% (2024: 0%) within 5 years and 3% (2024: 15-20%)
after 5 years from the balance sheet date.
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Introduction
3 Operating assets and liabilities
Accounting policies
Goodwill
Goodwill is initially recognised in the statement of
financial position at cost and allocated to groups
of cash-generating units (CGUs) at which goodwill
is monitored. Subsequently, goodwill is measured
at cost less accumulated impairment losses.
Goodwill is not amortised.
Brands with an indefinite useful life
Brands acquired in a business combination are
initially recognised in the statement of financial
position at fair value and subsequently measured
at cost less accumulated impairment losses.
Brands which are considered to have an indefinite
useful life are not amortised, since there is no
foreseeable limit to the period over which the
brands are expected to generate net cash inflows.
Software and software under development
Acquired software and developed software are
initially measured at cost and subsequently at cost
less amortisation and impairment losses. Acquired
software and developed software are amortised
on a straight-line basis over the estimated useful
life, which is 3-10 years, though typically 5 years
for ERP systems.
For software as a service (SaaS) arrangements,
implementation costs are capitalised only where
customisation and configuration of the SaaS
arrangement results in an intangible asset
controlled by the Group. Where customisation
and configuration costs do not result in an
intangible asset, costs are either expensed as
incurred or alternatively over the contract term
when the received services are not distinct from
the SaaS solution.
Software under development is recognised at
cost less impairment losses. Software under
development is not amortised.
Customer relationships
Customer relationships acquired in a business
combination are initially recognised at fair
value and subsequently measured at cost less
accumulated amortisation and impairment losses.
Amortisation is calculated on a straight-line basis
over the estimated useful life, which is 5-12 years.
Other intangible assets
Other intangible assets comprise development
projects such as development of products or
processes, formulas and smaller brands.
Development projects are recognised as
intangible assets where they relate to products
or processes (other than software development
projects) that are clearly defined and identifiable,
and in respect of which technical feasibility,
sufficient resources and a potential future market
or development opportunity in the enterprise can
be demonstrated, and where it is the intention
to manufacture, market or use the product or
process in question. Development projects are
initially measured at cost, which comprises
expenses, including salaries, amortisation and
external costs, directly attributable to these
development projects. Development projects are
subsequently measured at cost less amortisation
and impairment losses.
Development projects are amortised on a straight-
line basis over the estimated useful life, which is
3-10 years.
Formulas and smaller brands are measured
at cost less accumulated amortisation and
impairment losses. The assets are amortised on
a straight-line basis over their estimated useful
lives. The amortisation period is 2-10 years.
Amortisation and impairment losses are included
in the statement of profit or loss as follows.
3.1 Intangible assets
Amortisation and impairment losses included in profit or loss (EUR m) 2025 2024
Production costs 4 6
Sales and distribution costs 4 6
Administrative costs 16 17
Total amortisation and impairment losses 24 29
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Introduction
Research and development costs expensed
Research and development costs not eligible for
capitalisation are expensed in the period incurred
and included in the statement of profit or loss
within production costs. In 2025, this amounted
to EUR 34 million (2024: EUR 36 million).
Impairment of non-current assets
Goodwill, intangible assets with an indefinite
useful life and software under development
that is not subject to amortisation are tested
annually for impairment, or more frequently if
events or changes in circumstances indicate that
they might be impaired. Other assets are tested
for impairment whenever events or changes in
circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is
recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an
asset’s fair value less costs of disposal and value
in use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which
there are separately identifiable cash inflows
that are largely independent of the cash inflows
from other assets or groups of assets (CGUs).
Non- financial assets other than goodwill that
suffered an impairment are reviewed for possible
reversal of the impairment at the end of each
reporting period.
Impairment test
Hempel has tested the carrying amount of software
under development, brands with indefinite useful
life and goodwill for impairment.
Goodwill is monitored based on three commercial
business units (Marine, Energy & Infrastructure
and Decorative). Goodwill is allocated to the groups
of CGUs as follows:
(EUR m) 2025 2024
Marine 171 180
Energy & Infrastructure 116 123
Decorative 241 254
Total goodwill 528 557
The three key commercial business units manage
sales and are responsible for daily contact with
the customers.
Marine customers comprise both newbuilding
shipyards, ship owners requiring maintenance in
dry dock or at sea, and maintenance contractors.
Maintenance work relates to every area of a vessel,
most notably hull coating systems to protect the
metal structure of the vessels.
Energy customers are owners of energy assets,
which are often subject to harsh weather
conditions, such as windmills and other energy
solution assets. Infrastructure mainly relates
to bridges, transportation assets and other
infrastructure buildings. Customers are e.g.
governments responsible for maintenance of critical
infrastructure, companies that own infrastructure
assets and maintenance contractors.
Decorative sells indoor and outdoor coating
products. Decorative customers are both private
and commercial customers, e.g. retailers.
Impairment test of goodwill
In determining the carrying amount of net assets
of each group of CGUs, certain allocation keys
were applied.
The recoverable amounts of each group of
CGUs are based on value-in-use calculations
and based on cash flow projections for the
years 2026-2030. The forecast represents
management’s best estimate of the future cash
flows and is assumed to be both reasonable
and achievable. The assumptions applied by
management in forecasting the future cash flows
reflect management’s expectations considering
all relevant factors, including Hempel’s strategic
initiatives, local initiatives, past experience and
external sources of information, where possible
and relevant. The key assumptions used in
the cash flow projections are revenue growth,
EBITDA margin, long-term growth rate and pre-
tax discount rate (refer to the table on page 68).
Cash flows beyond the five-year forecast period
are extrapolated using the estimated growth
rates stated in the table on page 68.
Sensitivity analysis
Management considered and assessed reasonably
possible changes for the key assumptions and did
not identify any instances that could cause
the carrying amount of goodwill to exceed its
recoverable amount.
Impairment test of the Farrow & Ball brand
The carrying amount of the Farrow & Ball brand
with indefinite useful life of EUR 134 million
(2024: 141 million) was tested separately
for impairment as the brand relates to the
Farrow & Ball CGU. The recoverable amount is
calculated based on a relief-from-royalty method,
assuming a steady revenue growth of average
8.2% (2024: 5.6%) in the forecasting period
based on expected market development within
the luxury paint business.
The royalty rate applied in the relief-from-royalty
calculation is based on a benchmark study
for high-end brands with similar market
position to Farrow & Ball. A royalty rate of
6.15% (2024: 6.15%) and a weighted average
cost of capital (WACC) of 8.8% (2024: 8.16%)
were applied.
3.1 Intangible assets — continued
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Introduction
3.1 Intangible assets — continued
Key assumption Description
Revenue growth and EBITDA margin Revenue for all commercial business units is assumed to increase over the forecasting period on average by mid to high single-
digit growth rates, assuming a slight increase in market share. This is based on past performance and assumptions about stable
raw material prices in the forecast period, the general market development in the different commercial business areas, taking into
consideration the maturity of the markets in which Hempel operates. Further, Group and local strategic initiatives are considered
when estimating the revenue growth rates for the individual commercial businesses, including initiatives focusing on increasing
sales prices and volumes. EBITDA margin developments for each business unit reflect the assessment of the expected operating
performance throughout the forecast period. For Marine and Energy & Insfrastructure this represent a stable margin while in
Decorative an improved margin is expected.
The estimated revenue growth in Decorative is, in particular, to be achieved through our strong market position, increasing brand
awareness and companies and stores acquired that increase Decorative’s accessibility in selected markets. In addition,
we have expanded our e-commerce presence in key markets and opened new stores in strategic geographical locations
which is expected to help drive an increase in volumes.
For Marine, the estimated revenue growth is to be achieved through our highly competitive products, e.g. hull coatings, and
higher sales prices through a more value-based price setting model, as well as increased sales volumes based on the assumed
continuation of the trend of increasing demand for products in the marine industry that reduce both fuel consumption and CO
2
e
emissions.
For Energy & Infrastructure, the future revenue growth is based on the continued global demand for high-performance sustainable
coating solutions across the energy and infrastructure sectors. This includes continued launch of improved solutions for both
new constructions and maintenance work on global E&I assets, thereby continuing to offer high value to our customers through
our value-based commercial model.
Long-term growth The terminal growth rates do not exceed expected long-term inflation.
Pre-tax discount rate The pre-tax discount rate reflects the specific risks to the CGUs.
Long-term growth
rate 2025
Long-term growth
rate 2024
Pre-tax discount
rate 2025
Pre-tax discount
rate 2024
Marine 2.00% 2.00% 8.96% 9.18%
Energy & Infrastructure 2.00% 2.00% 9.60% 9.67%
Decorative 2.00% 2.00% 9.45% 9.18%
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3.1 Intangible assets — continued
Intangible assets (EUR m) Goodwill Brands
(indefinite life)
Software Intangible
assets
under
construction
Customer
relationships
Other
intangible
assets
Total
Cost at 1 January 2025 557 145 119 17 131 108 1,077
Effect of exchange rate adjustment - 29 - 6 - 5 - 1 - 12 - 5 - 58
Additions for the year - - 6 13 - - 19
Transfer and reclassifications - - 10 - 14 - 4 -
Disposals for the year - - - 13 - - 1 - 1 - 15
Cost at 31 December 2025 528 139 117 15 118 106 1,023
Accumulated amortisation at 1 January 2025 - - 86 - 119 79 284
Effect of exchange rate adjustment - - - 3 - - 11 - 3 - 17
Amortisation for the year - - 14 - 4 6 24
Impairment losses for the year - - - - - - -
Disposals for the year - - - 10 - - 1 - - 11
Accumulated amortisation at 31 December 2025 - - 87 - 111 82 280
Carrying amount at 31 December 2025 528 139 30 15 7 24 743
Cost at 1 January 2024
1
535 139 82 35 141 99 1,031
Effect of exchange rate adjustment 22 6 2 - 7 2 39
Additions for the year - - 1 31 - - 32
Transfer and reclassifications - - 39 - 49 - 10 -
Disposals for the year - - - 5 - - 17 - 3 - 25
Cost at 31 December 2024 557 145 119 17 131 108 1,077
Accumulated amortisation at 1 January 2024
1
- - 74 - 124 72 270
Effect of exchange rate adjustment - - 1 - 7 2 10
Amortisation for the year - - 15 - 6 8 29
Impairment losses for the year - - - - - - -
Disposals for the year - - - 5 - - 17 - 3 - 25
Accumulated amortisation at 31 December 2024 - - 85 - 120 79 284
Carrying amount at 31 December 2024 557 145 34 17 11 29 793
1
Brought forward balances at 1 January 2024 include minor reclassifications between asset categories, and between cost and accumulated depreciation, arising on a group consolidation system
implementation during the year, with no impact on the total carrying amount.
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Property, plant and equipment are measured
at cost less accumulated depreciation and
impairment losses.
Cost comprise the purchase price, including import
duties and non-refundable taxes, and expenses
directly related to the acquisition up until the
time when the asset is ready for intended use.
In the case of assets of own construction, costs
comprise direct expenses for labour, materials,
components and suppliers.
Material general and specific borrowing costs
that are directly attributable to the construction
or production of a qualifying asset are capitalised
during the period of time that is required to
complete and prepare the asset for its intended
use. Qualifying assets are assets that necessarily
take a substantial period of time to get ready for
their intended use or sale.
Subsequent costs, such as partial replacement
of property, plant and equipment, are included
in the carrying amount of the asset in question
when it is probable that such costs will result in
future economic benefits. The carrying amount
of the replaced parts is derecognised from the
balance sheet and recognised in the statement
of profit or loss. All other repairs and maintenance
are charged to profit or loss during the reporting
period in which they are incurred.
Depreciation is based on the cost of an asset
less its residual value. Depreciation is calculated
on a straight-line basis over the expected useful
lives of the assets, which are:
Buildings (max.) 50 years
Laboratory equipment 10 years
Plant and machinery 10 years
Other fixtures and fittings,
tools and equipment 3-10 years
If the individual material components of an asset
have different useful lives, each component is
depreciated separately. Gains and losses on
disposals are determined by comparing proceeds
with the carrying amount. These gains and losses
are included in other operating income and
expenses. The assets’ residual values and useful
lives are reviewed, and adjusted if necessary, at
the end of each reporting period.
Information about commitments for acquisition of
property, plant and equipment is provided in note
5.3 Contingent liabilities and other commitments.
Property, plant and equipment are reviewed on
an annual basis to determine whether there is
any indication of impairment and, if so, a review
of the carrying amount is performed. If an asset’s
carrying amount exceeds its recoverable amount,
an impairment loss is recognised in the statement
of profit or loss.
Depreciation and impairment losses are included
in the statement of profit or loss as follows:
3.2 Property, plant and equipment
Depreciation and impairment losses included in profit or loss (EUR m) 2025 2024
Production costs 32 34
Sales and distribution costs 6 6
Administrative costs 7 7
Discontinued operations - 1
Total depreciation and impairment losses 45 48
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Introduction
3.2 Property, plant and equipment — continued
Property, plant and equipment (EUR m) Land and
buildings
Plant and
machinery
Other fixtures
and fittings, tools
and equipment
Assets under
construction
Total
Cost at 1 January 2025 358 355 163 45 921
Effect of exchange rate adjustment - 24 - 23 - 9 - 2 - 58
Additions for the year
1
- 4 5 19 28
Transfer and reclassifications 4 21 6 - 31 -
Disposals for the year - 12 - 6 - 7 - - 25
Cost at 31 December 2025 326 351 158 31 866
Accumulated depreciation at 1 January 2025 108 229 104 - 441
Effect of exchange rate adjustment - 10 - 15 - 7 - - 32
Depreciation for the year
Transfer and reclassifications
9 22 14 - 45
Disposals for the year - 7 - 5 - 6 - - 18
Accumulated depreciation at 31 December 2025 100 231 105 - 436
Carrying amount at 31 December 2025 226 120 53 31 430
Cost at 1 January 2024
2
377 349 147 46 919
Effect of exchange rate adjustment 12 12 5 1 30
Additions for the year
1
6 5 7 34 52
Transfer and reclassifications - 15 16 - 31 -
Disposals for the year - 37 - 26 - 12 - 5 - 80
Cost at 31 December 2024 358 355 163 45 921
Accumulated depreciation at 1 January 2024
2
118 212 97 - 427
Effect of exchange rate adjustment 5 8 4 - 17
Depreciation for the year 11 23 14 - 48
Disposals for the year - 26 - 14 - 11 - - 51
Accumulated depreciation at 31 December 2024 108 229 104 - 441
Carrying amount at 31 December 2024 250 126 59 45 480
1
There are no capitalised borrowing costs for the year 2025 and 2024.
2
Brought forward balances at 1 January 2024 include minor reclassifications between asset categories, and between cost and accumulated depreciation, arising on a group consolidation system
implementation during the year, with no impact on the total carrying amount.
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Accounting policies
Lease liabilities
At the commencement date of leases, the
Group recognises lease liabilities, measured at
the present value of the lease payments to be
made over the lease term. The lease payments
include fixed payments less any lease incentive
receivables, variable lease payments that depend
on an index or rate, e.g. when a minimum indexation
is applied, and amounts expected to be paid under
residual value guarantees. The lease payments
also include the exercise price of a purchase
option reasonably certain to be exercised by the
Group and payment of penalties for terminating
a lease, if the lease term reflects the Group
exercising the option to terminate. The present
value is calculated using the interest rate implicit
in the lease or Group’s incremental borrowing
rate if the interest rate implicit in the lease is not
readily determinable.
Contracts may contain both lease and non-lease
components. The Group has elected to separate
lease and non-lease components. For these
contracts, the consideration promised in the
contract is allocated based on the relative stand-
alone prices between the lease and non-lease
component. Non-lease components are accounted
for in accordance with the accounting policy
applicable to such items.
Some lease contracts include extension and
termination options. Management exercises
judgement in determining whether these
options are reasonably certain to be exercised.
Management considers all relevant facts and
circumstances that create an economic incentive
to exercise the extension option.
After initial recognition, the lease liability is
measured at amortised cost using the effective
interest method. The lease liability is increased
to reflect the accretion of interest and reduced
for lease payments made. The lease liability is
remeasured when there is a change in the lease
term or a change in the assessment to purchase
the underlying asset. In addition, the lease liability
is remeasured if there is a change in future lease
payments arising from a change in an index
or rate, including revised lease payments that
reflect a change in market rental rates, or if
there is a change in the Group’s estimate of the
amount expected to be payable under a residual
value guarantee.
When lease liabilities are remeasured, a corre-
sponding adjustment is made to the carrying
amount of the right-of-use asset. If the carrying
amount of the right-of-use asset is reduced to
zero, any further reduction is recognised in the
statement of profit or loss.
Right-of-use assets
The Group recognises right-of-use assets at the
commencement date of the lease. Right-of-use
assets are initially measured at cost comprising
the amount of the initial measurement of the lease
liability, adjusted for any lease payments made at
or before the commencement date and any initial
direct costs incurred. Dismantling and restoration
costs are not included in the calculation of the right-
of-use assets value, but are booked separately.
After initial recognition, right-of-use assets are
measured at cost less accumulated depreciation
and impairment losses and adjusted for any
remeasurement of the lease liability. Depreciation is
calculated on a straight-line basis over the shorter
of the useful life of the asset and the lease term.
Right-of-use assets mainly comprise office and
warehouse buildings, stores and vehicles, such as
cars, trucks and vans. Lease terms of buildings
are usually 5-10 years whereas vehicles typically
have a lease term of 3-5 years.
Short-term and low-value leases
Short-term and low-value leases are expensed
directly as operating costs in the statement of
profit or loss, usually on a straight-line basis over
the lease term.
The Group has recognised the following amounts
relating to leases, as shown on the next page.
3.3 Leases
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Introduction
3.3 Leases — continued
Total cash outflow from leases amounts to
EUR 43 million, including cash outflow from
short-term and low-value leases (2024: EUR 43
million). The maturity analysis of undiscounted
cash flows in lease liabilities is disclosed in note
4.3 Financial risks.
The following lease expenses are recognised in
the statement of profit or loss:
(EUR m) 2025 2024
Right-of-use assets – additions 21 21
Right-of-use assets, carrying amount
Land and buildings 90 105
Vehicles 17 16
Other fixed assets - 1
Total 107 122
Lease liabilities
Current 30 34
Non-current 84 95
Total 114 129
Depreciation charge of right-of-use assets (EUR m) 2025 2024
Land and buildings 30 31
Vehicles 9 8
Other fixed assets - -
Total 39 39
Expenses relating to leases (EUR m) 2025 2024
Depreciation included in profit or loss
Production costs 11 12
Sales and distribution costs 26 24
Administrative costs 2 2
Discontinued operations - 1
Total depreciation 39 39
Interest expense on lease liabilities 4 4
Expenses related to short-term leases 1 1
Total amount recognised in profit or loss 44 44
The following amounts are recognised in the
statement of financial position relating to leases:
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3.4 Inventories
Accounting policies
Inventories are measured at cost, determined
using the FIFO-method, or net realisable value if the
net realisable value is lower. Costs of inventories
comprise purchase costs of raw materials, including
import duties and transportation costs directly
attributable to the acquisition of raw materials,
costs of conversion and other costs incurred in
bringing the inventories to the present location
and condition.
The costs of finished goods and work in progress
also include indirect production costs, which
comprise the cost of indirect materials and labour
as well as maintenance and depreciation of the
machinery, factory buildings and equipment used
in the manufacturing process and costs of factory
administration and management.
The net realisable value is calculated as the
selling price less costs of completion and costs
necessary to make the sale and is determined
based on the most reliable evidence available
at the time the estimates are made, taking into
account obsolescence and development in
expected selling prices.
(EUR m) 2025 2024
Raw materials and consumables 88 108
Work in progress 8 9
Finished goods 181 219
Total inventories 277 336
Cost of inventories, included under production costs
1
1,132 1,132
Hereof write-downs to net realisable value during the year 15 11
1
2024 restated to exclude cost of inventories included within discontinued operations – see Note 4.6 for further information.
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3.5 Trade receivables
Accounting policies
Trade receivables are recognised initially at
their transaction price. The Group holds trade
receivables with the objective of collecting the
contractual cash flows and therefore measures
them subsequently at amortised cost using the
effective interest method, less loss allowance.
Due to the short-term nature of trade receivables,
amortised cost is equal to the invoiced amount
less loss allowance for expected credit losses.
Credit risk
The Group is exposed to financial and commercial
counterparties but has no particular concentration
of customers. To minimise the credit risk related to
trade receivables, financial vetting is undertaken for
all major customers and credit limits are assigned
for major customers based on the Group’s credit
risk assessment.
The Group applies the simplified approach to
providing for expected credit losses, which permits
the use of the lifetime expected loss provision for
all trade receivables. To measure the expected
credit losses, trade receivables are grouped
based on shared credit risk characteristics and
the days past due. Trade receivables not due
are also included when assessing the expected
lifetime loss provision.
Trade receivables are written off when there is no
reasonable expectation of recovery, i.e. typically
when customers are undergoing restructuring or
bankruptcy proceedings have commenced.
The Group’s maximum exposure to credit risk at
the end of the reporting period related to trade
receivables is the carrying amount of trade
receivables mentioned above. The Group does
not hold collateral as security.
Expected credit loss 2025 (EUR m) Carrying
amount, gross
Expected
loss rate (%)
Loss
allowance
Carrying
amount, net
Current 334 0.4% 1.4 333
Overdue 1-30 days 53 0.4% 0.2 52
Overdue 31-60 days 22 0.4% 0.1 22
Overdue 61-120 days 19 0.8% 0.1 18
Overdue 121-240 days 14 9.6% 1.3 12
Overdue 241-360 days 4 33.9% 1.3 3
Overdue > 360 days 25 92.0% 23.4 2
Total 471 27.8 442
Loss allowance (EUR m) 2025 2024
Allowance at 1 January 48 38
Sale of enterprises - - 1
Additions/reversals for the year - 5 14
Losses recognised - 11 - 5
Currency translation - 4 2
Total 28 48
Expected credit loss 2024 (EUR m) Carrying
amount, gross
Expected
loss rate (%)
Loss
allowance
Carrying
amount, net
Current 338 0.8% 2.7 335
Overdue 1-30 days 54 1.0% 0.5 54
Overdue 31-60 days 24 3.0% 0.7 23
Overdue 61-120 days 18 3.6% 0.6 17
Overdue 121-240 days 17 12.6% 2.1 15
Overdue 241-360 days 6 21.7% 1.3 5
Overdue > 360 days 40 99.0% 39.6 1
Total 497 47. 5 450
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Introduction
3.6 Pension and other post-employment benefit obligations
Accounting policies
The Group operates various post-employment
benefit plans, including defined benefit and defined
contribution pension plans.
Defined contribution plans
Hempel operates a number of defined contribution
plans which provide post-employment benefits
determined by the value of funds contributed
in respect of each employee. The Group’s
contributions to defined contribution plans are
recognised in profit or loss in the year in which
they become payable. The Group’s obligation is
limited to the amount that it agrees to contribute
to the plans; it has no further obligation once
the contributions have been paid. Contributions
payable are recognised in the statement of
financial position within other current liabilities.
Defined benefit plans
For defined benefit post-employment benefit
plans, the surplus or deficit recognised in the
statement of financial position for each plan
is determined as the fair value of the plan
assets less the present value of the defined
benefit obligation at the end of the reporting
period. The defined benefit obligation and cost
of providing benefits is calculated annually by
independent actuaries using the projected unit
credit method. This is done separately for each
major plan by estimating the amount of future
benefits that employees have earned in return
for their service in the current and prior periods.
The present value of the defined benefit obligation
is determined by discounting the estimated
future cash outflows using interest rates of high-
quality corporate bonds denominated in the
currency in which the benefits will be paid, and
that have terms approximating the terms of the
related obligations. In countries where there is no
deep market in such bonds, the market rates for
government bonds are used.
Defined benefit plan surpluses are recognised
only to the extent that they are recoverable by way
of either reduced future contributions to the plan
or a refund from the plan.
Service costs comprise current service costs and
past service costs. Current service cost is the
increase in the present value of the defined benefit
obligation resulting from employee services in
the current period. Changes in the present value
of the defined benefit obligation resulting from
plan amendments or curtailments are recognised
immediately in profit or loss as past service costs.
The net interest expense is calculated by applying
the discount rate to the defined benefit obligation
and the fair value of plan assets. This cost is
included in financial expenses in the consolidated
statement of profit or loss. Remeasurement gains
and losses arising from experience adjustments and
changes in actuarial assumptions are recognised
in the period in which they occur, directly in other
comprehensive income.
Pension and other post-employment
benefit plan costs
In 2025, net costs of EUR 25 million relating to
Hempel’s pension and other post-employment
benefit plans were recognised in the statement of
profit or loss (2024: EUR 25 million) as analysed
in the table below.
Post-employment benefit plan costs (EUR m) 2025 2024
Costs for defined contribution plans:
Employee costs 23 22
Costs for defined benefit plans:
Employee costs 1 2
Interest expense 1 1
Total costs recognised in profit or loss 25 25
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Introduction
3.6 Pension and other post-employment benefit obligations — continued
Hempel’s defined benefit plans
The Group operates defined benefit plans in several
countries with the major plans being pensions
in Ireland and the UK. None of the plans are
individually significant to the Group.
The pension plans are generally final salary plans,
which provide benefits in the form of a guaranteed
level of pension payable for life. The level of benefits
provided typically depends on the employees’
length of service and their salary in the final years
leading up to retirement. The majority of the defined
benefit obligation relates to plans that are funded.
However, there are also a number of unfunded
plans in which the Group meets the benefit
payment obligation as it falls due. Recognition of
plan assets for the UK defined benefit pension
plan is restricted as the surplus in the plan may
not ultimately be recoverable by the Group.
Plan assets held in trusts are governed by local
regulations and practice in the relevant country, as
is the nature of the relationship between the Group
and the trustee boards and their composition.
The Group also operates a number of other post-
employment benefit plans which are primarily
unfunded and typically provide a lump sum payment
on leaving employment.
Movements in the present value of the defined
benefit obligations and the fair value of the plan
assets during the year are shown in the table to
the right.
(EUR m) 2025 2024
Present value of obligation at 1 January 52 50
Current service cost 1 2
Interest expense 2 2
Actuarial (gains)/losses arising from changes in financial assumptions - 1 - 1
Actuarial (gains)/losses arising from experience adjustments - 2
Exchange differences - 3 -
Benefit payments from employer - 2 - 2
Payments from the plans - 3 - 1
Present value of obligation at 31 December 46 52
Fair value of plan assets at 1 January 35 32
Calculated interest on plan assets 1 1
Return on plan assets excluding calculated interest - 2
Exchange differences - 1 -
Employer contributions - 1
Payments from the plans - 3 - 1
Fair value of plan assets at 31 December 32 35
Surplus (deficit) at 31 December - 14 - 17
Effect of asset ceiling -1 - 1
Net benefit asset (liability) at 31 December - 15 -18
Represented by amounts recognised in the statement of financial position:
Asset recognised 5 4
Liability recognised - 20 - 22
Net benefit asset (liability) - 15 - 18
The defined benefit obligation may be analysed as follows:
Funded plans - 26 - 30
Unfunded plans - 20 -22
Defined benefit obligation - 46 -52
The defined benefit obligation may be analysed as follows:
Pension plans - 28 - 32
Other post-employment benefit plans - 18 - 20
Defined benefit obligation - 46 - 52
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Introduction
3.6 Pension and other post-employment benefit obligations — continued
Of the total defined benefit obligation, 51%
(2024: 50%) relates collectively to pension plans
in Ireland and the UK.
The expected average duration of the defined
benefit obligations is 10 years (2024: 10 years)
and the expected employer contributions for the
year ending 31 December 2026 are EUR 2 million.
The composition of plan assets is shown in the
table below.
Mortality rates are also a key assumption; in
each country the most common demographic
assumptions, including mortality rates, are applied.
Sensitivity analysis
The following table illustrates the change in the
defined benefit obligation relating to defined
benefit plans due to a change in key actuarial
assumptions. The analysis is based on reasonably
possible changes, provided that other parameters
remain unchanged.
The following table summarises the key
assumptions of the defined benefit plans.
Recognised defined benefit obligation (EUR m) 2025 2024
Discount rate
Increase of 0.5 %-points - 2 - 2
Decrease of 0.5 %-points 2 3
Future wage / salary increase
Increase of 0.5 %-points 1 1
Decrease of 0.5 %-points - 1 - 1
Mortality
Increase 1 year - -
Decrease 1 year - -
Defined benefit plan assets by category: 2025 unquoted 2025 quoted 2025 2024
Cash and cash equivalents - 9% 9% 1%
Equity instruments 6% 10% 16% 21%
Debt instruments 3% 54% 57% 57%
Real estate 1% - 1% 1%
Investment funds - 6% 6% 9%
Assets held by insurance company 10% - 10% 9%
Other 1% - 1% 2%
Total 21% 79% 100% 100%
2025 2024
Weighted average discount rate 4.73% 4.55%
Future wage / salary increase 3.53% 3.60%
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3.7 Provisions
Accounting policies
Provisions are recognised when the Group has a
present legal or constructive obligation as a result
of past events, it is probable that an outflow of
resources will be required to settle the obligation,
and the amount can be reliably estimated.
Provisions for environmental, warranty and restruc-
turing obligations, as well as other obligations, are
measured at the present value of management’s
best estimate of the expenditure required to settle
the present obligation at the end of the reporting
period. The costs required to settle the liability are
discounted if the effect is material to the measure-
ment of the provision. The discount rate used
to determine the present value is a pre-tax rate
that reflects current market assessments of the
time value of money and the risks specific to the
liability. The increase in the provision due to the
passage of time is recognised as interest expense.
Decommissioning and restoration obligations are
measured at the present value of the future liability
in respect of decommissioning as expected at
the balance sheet date. The present value of the
provision and changes in estimates are recognised
as part of the cost of property, plant and equipment
and depreciated together with the associated asset.
Interest on provisions is recognised in the statement
of profit or loss under financial expenses.
Environmental provisions
Environmental obligations relate to restoration
of various sites and to remedying established
environmental damages that occurred in connection
with the production of coatings and disposal or
release of certain wastes. Management anticipates
that the resolution of the Group’s environmental
obligations will occur over an extended period, in
some cases over a period of more than 5 years.
Warranties
Provision is made for estimated warranty claims
in respect of products sold that are still under
warranty at the end of the reporting period.
Warranty cases are normally resolved within 0-5
years, though some complex cases are resolved
over an extended period of more than 5 years.
In line with accounting policies, potential product
warranties are recognised as warranty provisions
when revenue from the related sale is recognised.
Other provisions
Restructuring provisions are recognised when a
detailed formal plan exists which identifies the
affected part of the business, the number of
affected employees and approximate timeline,
and the employees affected have been notified
of the main features of the plan.
The Group is involved in a number of legal cases,
tax cases and other disputes. Some of these
involve significant amounts and are subject to
some uncertainty. Management continuously
assesses the risks associated with the cases and
disputes, and their likely outcome. It is the opinion
of management that, apart from items recognised
in the financial statements, the outcomes of these
cases and disputes are not probable or cannot be
reliably estimated in terms of amount or timing.
The Group does not expect these to have a material
impact on the consolidated financial statements.
(EUR m) Environmental
obligations
Warranties Other
provisions
Total
Total provisions, beginning of year 20 36 20 76
Exchange adjustment at year-end rate - 1 - 2 - - 3
Additions for the year - 12 14 26
Reversed for the year - 1 - 8 - 9 - 18
Consumed for the year - 1 - 7 - 4 - 12
Unwind of discount 1 - - 1
Total provisions, end of year 18 31 21 70
Current liabilities 1 12 10 23
Non-current liabilities 17 19 11 47
Total provisions, end of year 18 31 21 70
3.8 Other liabilities
Accounting policies
Other liabilities mainly comprise accrued employee
costs, including bonuses, withholding tax and VAT,
customer bonuses, commission payables and
accrued interest.
Other financial liabilities are measured at initial
recognition at fair value. Subsequently, other
financial liabilities are measured at amortised cost
using the effective interest method, which usually
corresponds to the nominal value.
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Introduction
4 Capital structure and financing items
Accounting policies
Dividends proposed by management for the year
are presented separately within equity.
The translation reserve comprises foreign exchange
differences arising from the translation to EUR of
financial statements of the parent company and
its subsidiaries. Also, the effect of the inflation
adjustment from hyperinflationary economies is
recognised within the translation reserve.
The cash flow hedge reserve covers cash flow
hedging of interest rates associated with loans
and borrowings.
Share capital
In August 2024, CVC Funds acquired 22.2% of
Hempel A/S through the issuance of new B shares
in addition to the already existing B shares, which
are owned by Hempel Invest A/S. At the time of
the investment, the existing share capital was
restructured into A, B and C classes with shares
of DKK 1 each.
The share capital has been fully paid and no
shares have special dividend rights. A shares carry
10 votes per share whereas B shares carry 1 vote
per share. There are no voting rights attached to
C shares.
The C shares have been issued in connection
with a management incentive programme.
The total number of C shares outstanding as
of 31 December 2025 amounted to 217,111
(2024: 200,422) of which key management
personnel subscribed for 132,686 shares
(2024: 118,592 shares). If a participant ceases
to be an employee of the Company, the provisions
of the plan generally permit the Company to
repurchase the leaver’s shareholdings for either the
original cost or fair value at the time of repurchase,
depending upon the circumstances. In limited
instances outside the control of the participant,
Hempel has an obligation to reacquire the shares at
either the original cost or fair value at the time of
repurchase, depending upon the circumstances.
In addition, 5,768,448 warrants were outstanding
as of 31 December 2025 (2024: 5,522,548
warrants) in connection with this programme, of
which 3,761,336 warrants have been issued to
key management personnel (2024: 3,267,537
warrants). These warrants give the holder the
right, in certain circumstances, to subscribe for
D shares in Hempel A/S at an exercise price of
DKK 0.01 per share. In such circumstances the
holders of these D shares may have the right to
enhanced returns upon disposal. The warrants
are subject to the same repurchase provisions as
the C shares and also have no voting rights.
Dividends
The Group proposed no ordinary dividend related
to the year 2025 (2024: no dividend).
During 2024, before the issuance of new shares,
ordinary dividends related to the year 2023 of
EUR 217 thousand per share amounting to a total
dividend payment of EUR 25 million was paid out.
Extraordinary dividends of EUR 1.1 million per
share were paid out in 2024, in total amounting
to EUR 132 million.
Capital structure
The capital structure of the Group is intended to
ensure sufficient financial flexibility and stability for
the Group to reach its strategic goals. The Group
aims to maintain an optimal capital structure, and
to use the free operating cash flow after financial
items and tax for debt servicing and business
development.
The Group will not declare dividends for the financial
years 2024 to 2027, after the extraordinary
dividend payment in 2024.
The Group strives to ensure adequate credit
resources at all times, which includes securing
access to committed bank financing and
refinancing maturing debt in a timely manner.
The Group aims to have minimum EUR 250 million
of free committed credit resources available for
the next 12 months.
4.1 Share capital, distribution to shareholder
Share capital 31 December 2025 31 December 2024
Number of
shares
Nominal
value (DKK)
Number of
shares
Nominal
value (DKK)
The share capital comprises:
A shares 32,857,14 3 32, 857,14 3 32,8 57,143 32,857,143
B shares 115,000,000 115,000,000 115,000,000 115,000,000
C shares
1
217,111 217,111 200,422 200,422
Share capital (fully paid) 14 8 ,074, 25 4 14 8 ,074, 25 4 148,057,565 14 8 ,057,565
1
Including 11,591 treasury shares (2024: 0 shares), acquired in connection with the management incentive programme.
Hempel Annual Report 2025
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Introduction
In order to achieve this overall objective, the
Group’s capital management aims to ensure that
it meets its financial covenants attached to the
interest-bearing loans and borrowings that define
capital structure requirements. The covenants,
which the Group is required to comply with
quarterly, state that the Group’s leverage must
not exceed 4.0x. The Group’s leverage is defined
in note 5.7 Financial definitions.
At the end of 2025, the leverage ratio was 0.9x
(2024: 1.4x). The Group aims to maintain a
leverage ratio of approximately 2.5x in the long
term while a higher leverage ratio is accepted
when acquiring strategic businesses.
Breaches in meeting the financial covenants would
permit the bank to immediately call loans and
borrowings. There have been no breaches, nor
close to default, of the financial covenants of any
interest-bearing loans or borrowings in the current
period or in the previous period.
No changes were made in the objectives or
processes for managing capital during 2025
or 2024, except for the change to the contribution
policy mentioned above.
4.1 Share capital, distribution to shareholder — continued
Hempel Annual Report 2025
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Introduction
4.2 Borrowings
Accounting policies
Long-term loans, such as loans from credit
institutions, are recognised initially at fair
value net of directly attributable transaction
costs. Subsequently, the loans are measured
at amortised cost using the effective interest
method. The difference between the proceeds
initially received and the nominal value is
recognised as financial expenses in the
statement of profit or loss over the loan term.
The bank loans are floating interest loans based
mainly on EURIBOR. Further, the interest rate is
linked to the Group’s leverage ratio.
A negative pledge clause is attached to the
Group’s long-term loan arrangements that
prevents Hempel A/S from pledging certain
assets as security.
The Group’s borrowings consist of the following,
see table to the right:
2025 (EUR m) Average
interest rate
Maturity Carrying
amount
Bank loans 2.92% 2027 - 2030 351
Overdraft facilities 2.80% 2026 42
Lease liabilities 0.4% - 16.1% 2026 - 2047 114
Total borrowings 507
Current 72
Non-current 435
Total borrowings 507
2024 (EUR m) Average
interest rate
Maturity Carrying
amount
Bank loans 3.52% 2026 - 2027 548
Overdraft facilities 3.46% 2025 75
Lease liabilities 0.2% - 13.1% 2025 - 2047 129
Total borrowings 752
Current 109
Non-current 643
Total borrowings 752
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Introduction
4.3 Financial risks
This note describes the exposure to financial
risks and how these risks could affect the Group’s
future financial performance.
The Group’s activities expose Hempel to a
variety of risks related to the Group’s financial
assets and liabilities. The Group’s financial
liabilities comprise primarily borrowings, trade
and other payables and lease liabilities, whereas
the financial assets primarily comprise trade
receivables and cash deposits.
Management has assessed the following key
financial risks and their significance to the Group:
The above financial risks are inherent to the
way Hempel operates as a global company with
a large number of operating units across the
world. The Group’s overall risk management
programme seeks to identify, assess, and
mitigate these financial risks in order to reduce
the effects on the Group’s financial performance.
The risks are managed in accordance with the
policies and guidelines laid out by the Board of
Directors. Hempel has centralised handling of
these risks, except for commercial credit risk,
which is managed locally. There are no changes
in the Group’s financial risk management policies
compared to the previous year.
It is the Group’s policy not to speculate actively
on financial risks.
To some extent, the Group’s income and expenses
in foreign currencies net out and create a
natural hedge of the Group’s profitability margin.
Foreign exchange hedges are executed to reduce
risks associated with currency fluctuations in
internal balances between Group entities. See
further description under market risk.
Market risk
The Group’s exposure to market risks is related
to foreign exchange risks and interest rate risk.
All market risks are managed in accordance with
the Group’s Treasury Policy.
Foreign exchange risk
Foreign exchange risk is the risk that the fair
value or future cash flows of a balance sheet
exposure will fluctuate because of changes in
foreign exchange rates.
Hempel’s exposure to the risk of changes
in foreign exchange rates relates primarily
to the Group’s trade receivables and trade
payables, arising respectively from revenue and
purchase transactions denominated in a foreign
currency and intercompany loans and deposits.
The currency exposure in these balances may
affect Hempel’s result.
The overall objective of foreign exchange risk
management is to reduce the short-term negative
impact of exchange rate fluctuations on net
financials and cash flows, thereby contributing to
the predictability of the financial results.
To manage exposure to foreign exchange risk,
it is Hempel’s policy to pool funding activities
centrally through intercompany loans and
deposits. In each subsidiary, foreign exchange
risk derived from trade receivables or payables
is mitigated by Hempel A/S establishing an
intercompany loan/receivable towards the local
entity in the same foreign currency, thereby
creating a natural hedge.
Currency risk is, as a main policy, hedged against
DKK or EUR when exposure exceeds EUR 0.5
million (a higher threshold is applied for USD).
Some currencies cannot be hedged within a
reasonable price range, in which case correlation
to a proxy currency is considered and, if deemed
appropriate, proxy hedging is applied.
Foreign exchange forward contracts, typically
of one month duration, are used to hedge the
exposure to currency risk. As the vast majority
of intercompany loans are hedged, and because
changes in the fair value of both the hedged item
and the foreign exchange forward is recognised
in profit or loss under financial items, the net
exposure to foreign currency risk is deemed low,
though a higher foreign exchange risk persists in
countries with high inflation.
Foreign currency sensitivity
The sensitivity analysis is based on financial assets
and liabilities recognised as of 31 December.
The table on the next page demonstrates the
sensitivity to a reasonably possible change in USD
and GBP exchange rates against EUR, with all other
variables held constant. The Group’s exposure to
foreign currency changes for all other currencies is
not material.
The impact on the Group’s profit before tax is due
to changes in the fair value of monetary assets
and liabilities denominated in foreign currencies
and non-designated foreign exchange derivatives.
Although the derivatives have not been designated
in a hedge relationship, they act as an economic
hedge and will offset the underlying transactions
when they occur.
The movement in pre-tax equity equals the
effect on profit before tax adjusted for fair value
movements of interest rate swaps designated
as hedging instruments.
Financial risk type 2025 2024
Foreign exchange risk Low Low
Interest rate risk Low Low
Credit risk Low Low
Liquidity risk Low Low
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Introduction
Interest rate risk
The Group’s exposure to changes in interest rates
primarily relates to long-term loans and borrowings
with floating interest rates. The Group’s policy is
to hedge its interest rate risk depending on the
Group’s interest coverage level (EBITDA/interest).
When the Group’s interest coverage level falls below
10, the Group assesses whether it is necessary
to mitigate the interest rate risk by entering into
hedging instruments.
Hempel has fixed the interest rate on EUR 200
million of debt by entering variable-to-fixed interest
rate swaps maturing in December 2026, which
reduces the exposure to changes in interest rates
in 2026. The interest related to the EUR 200 million
debt is fixed at an interest rate of 2.31% until
December 2026.
There is an economic relationship between the
loans and the hedging instruments as both the
nominal amount and terms of the interest rate
swaps mirror the hedged exposure, creating an
equal and opposite interest receipt and a fixed
interest payment. The Group has established a
hedge ratio of 1:1 for the hedging relationships as
the underlying risk of the interest rate swaps are
identical to the hedged risk.
The table to the right demonstrates sensitivity
to reasonably possible changes in interest rates,
with all other variables held constant.
The sensitivity analysis is based on financial assets
and liabilities recognised as of 31 December
and assumes that the interest rate hedges are
100% effective. The sensitivity analysis is based
on a change of 100 bps which is considered a
reasonably possible change at 31 December 2025.
4.3 Financial risks — continued
(EUR m) Increase/
decrease in bps
Effect on profit
before tax
Effect on equity
2025
Euro + 100 bp s - 0.2 - 0.1
Euro - 100 bps 0.2 0.1
2024
Euro + 100 bp s 0.8 0.6
Euro - 100 bps - 0.8 - 0.6
(EUR m) Change in rate Nominal value Effect on profit
before tax
Effect on equity
2025
USD/EUR 5% 15.3 0.8 0.6
USD/EUR - 5% 15.3 - 0.8 - 0.6
2025
GBP/EUR 5% 10.2 0.5 0.4
GBP/EUR - 5% 10.2 - 0.5 - 0.4
2024
USD/EUR 5% - 47.7 - 2.4 - 1.9
USD/EUR - 5% - 47.7 2.4 1.9
2024
GBP/EUR 5% 14.1 0.7 0.6
GBP/EUR - 5% 14.1 - 0.7 - 0.6
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Introduction
4.3 Financial risks — continued
Credit risk
Credit risk arises from the possibility that trading
partners and customers may default on their
obligations, causing financial losses for the Group.
The Group is exposed to credit risk on cash, trade
and other receivables. Please refer to note 3.5 for
a description of the Group’s credit risk in relation
to trade receivables.
The carrying amount of EUR 224 million (2024:
EUR 273 million) represents the maximum credit
exposure related to cash and other receivables.
Hempel’s main banks are all financial institutions
with a high credit rating and, therefore, financial
assets such as cash are considered to be of
low risk.
Other financial assets measured at amortised
cost comprise other receivables. These financial
assets are considered to have a low credit risk, and
thus the impairment provision calculated based
on 12 months of expected losses is considered
immaterial. The financial assets are considered
to be low risk when they have a low risk of default,
and the issuer has a strong capacity to meet its
contractual cash flow obligations in the near term.
The Group has no material risks relating to a
single customer or business partner. It is the
Group’s credit policy to rate major customers
and other business partners on a regular basis.
Bank Acceptance Bills are used as a financial
instrument to further limit the risk of credit losses.
The Group considers a financial asset in default
when the Group is unlikely to recover the out-
standing contractual amount in full. A financial
asset is written off when there is no reasonable
expectation of recovering the contractual
cash flows.
Liquidity risk
The liquidity risk is assessed to be low.
Hempel ensures the availability of the required
liquidity through a combination of cash
management and both uncommitted and
committed credit facilities. Hempel applies
cash pool arrangements for optimisation and
centralisation of cash management.
Hempel has an undrawn credit facility of
EUR 528 million (2024: EUR 454 million).
Maturities of financial liabilities
The table to the right provides an analysis of
Hempel’s financial liabilities divided into relevant
maturity groupings based on their contractual
maturities for non-derivative financial liabilities.
The amounts disclosed in the table are the
contractual undiscounted cash flows.
Contractual undiscounted cashflows (EUR m) Less than
1 year
Between
1 and 5 years
More than
5 years
2025
Non-derivatives:
Borrowings, current and non-current
1
54 380 -
Trade payables 304 - -
Lease liabilities 33 76 14
Derivatives:
Derivative financial instruments
2
1 - -
Total contractual undiscounted cash flows at the end of the year 392 456 14
Non-current liabilities 470
Current liabilities 392
2024
Non-derivatives:
Borrowings, current and non-current
1
94 559 -
Trade payables 317 - -
Lease liabilities 37 81 21
Derivatives:
Derivative financial instruments
3
1 1 -
Total contractual undiscounted cash flows at the end of the year 449 641 21
Non-current liabilities 662
Current liabilities 449
1
The contractual payments for borrowings are based on the variable interest rates as of 31 December 2025.
2
The derivatives reflect the mark-to-market value and expected cash flows of the EUR 200 million interest rate swaps
maturing December 2026.
3
The derivatives reflect the mark-to-market value and expected cash flows of interest rate swaps totalling EUR 500 million
maturing in December 2025, and an additional interest rate swap of EUR 200 million maturing in December 2026.
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Introduction
4.4 Financial instruments
Accounting policies
Derivative financial instruments, foreign exchange
forwards, currency swaps and interest rate swaps
are initially recognised in the balance sheet at
fair value and subsequently remeasured at their
fair value.
Derivatives are used for economic hedging
purposes and not as speculative investments.
Where the derivatives do not meet the hedge
accounting criteria, they are measured at fair
value through profit or loss.
Hedging instruments not qualifying for
hedge accounting
For foreign exchange forwards and currency swaps,
positive and negative fair values of these derivative
financial instruments are recognised as Other
receivables and Other liabilities, respectively.
Changes in the fair values of foreign exchange
forwards and currency swaps are recognised in
the statement of profit or loss under financial
income and expenses.
Cash flow hedge accounting
For interest rate swaps, cash flow hedge
accounting is applied. Positive and negative fair
values are recognised as Other receivables and
Other liabilities, respectively. Changes in the
fair values are recognised directly within Other
comprehensive income. The amount accumulated
in equity is reclassified to profit or loss as a
reclassification adjustment in the same periods
during which the hedged cash flows affect profit
or loss. Fair value of the interest rate swaps was
negative EUR 0.5 million as of 31 December 2025
(2024: negative EUR 2.0 million).
Financial instruments, fair value disclosures
The carrying amount of financial instruments
is a reasonable approximation of the fair value,
except for loans measured at amortised cost.
The carrying amount of loans measured at
amortised cost amounts to EUR 393 million
(2024: EUR 623 million) compared to a fair value of
EUR 395 million (2024: EUR 624 million). The fair
value is determined based on the present value
of expected future cash flows.
Financial instruments measured at fair value
Fair value measurement of financial intruments is
categorised into a hierarchy based on the inputs
used in the valuation process. The hierarchy
consists of three levels:
Level 1: Quoted prices (unadjusted) in active
markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included
in Level 1 that are observable for the asset or
liability, either directly (e.g., as prices) or indirectly
(e.g., derived from prices).
Level 3: Inputs for the asset or liability that are not
based on observable market data.
Foreign exchange contracts, currency swaps, and
interest rate swaps and loans are categorised as
Level 2 in the fair value hierarchy. Their valuation is
based on observable market data, such as foreign
exchange rates. Loans are classified as Level 3 in
the fair value hierarchy, as their valuation relies on
inputs not based on observable market data.
Reconciliation of liabilities arising from
financing activities (EUR m)
Non-cash movements
Beginning of
the year
Cash flows Additions Disposals Acquisitions Exchange rates End of the year
2025
Lease liabilities 129 - 38 30 - 2 - - 5 114
Borrowings, current and non-current 623 - 229 - - - - 1 393
Liabilities arising from financing activities 752 - 267 30 - 2 - - 6 507
2024
Lease liabilities 140 - 37 31 - 7 - 2 129
Borrowings, current and non-current 1,144 - 523 - - - 2 623
Liabilities arising from financing activities 1,284 - 560 31 - 7 - 4 752
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4.5 Financial income and expenses
Accounting policies
Financial income and expenses comprise interest
income and expenses, gains and losses on
receivables, payables, realised and unrealised
exchange gains and losses on transactions
denominated in foreign currencies.
Financial income (EUR m) 2025 2024
2
Interest income 6 18
Gain on derivative financial instruments at fair value through profit or loss
1
- 5
Fair value adjustment transferred from equity hedge reserve - 3
Net monetary gain - 2
Total financial income 6 28
Financial expenses (EUR m) 2025 2024
Interest expense on borrowings - 20 - 49
Interest expense on lease liabilities - 4 - 4
Interest expenses to parent companies - - 3
Interest expenses on financial liabilities measured at amortised cost - 24 - 56
Foreign exchange loss (net) - 30 - 13
Net monetary loss - -
Loss on derivative financial instruments at fair value through profit or loss
1
-1 -
Fair value adjustment transferred from equity hedge reserve - 2 -
Other financial expenses - 15 - 16
Total financial expenses - 72 - 85
1
Gains and losses on foreign exchange derivative financial instruments measured at fair value through profit or loss have been
presented separately.
2
A minor reclassification has been made between financial income and financial expenses in the 2024 comparative financial
information.
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4.6 Discontinued operations
Divestment of the Decorative business in
France and Germany
The divestment of Hempel’s Decorative business
in France and Germany to Fidelium Partners was
completed on 1 August 2024. The business was
reported as a discontinued operation up to the
date of disposal. Certain adjustments relating to
this divestment are included in the 2025 data in
these tables.
Divestment of Hempel Russia
The divestment of Hempel Russia was completed
on 13 July 2023. The associated operations were
presented as discontinued operations up to the
date of disposal.
The carrying amounts of assets and liabilities as of the date of sale were:
Net gain/loss from discontinued operations (EUR m) 2025 2024
Revenue - 94
Production costs - - 76
Sales and distribution costs - - 21
Administrative costs - - 7
Financial income and expenses - - 9
Net loss before tax from operating activities - - 19
Income tax - -
Net loss after tax from operating activities - - 19
Profit/loss on sale of Decorative business in France and Germany 2 - 75
Profit/loss on sale of Hempel Russia - 4
Net profit/loss from discontinued operations (attributable to the
shareholders of Hempel A/S) 2 - 90
Cash flow from discontinued operations (EUR m) 2025 2024
Cash flow from operating activities - 1 - 12
Cash flow from investing activities - 2 4
Total - 3 - 8
Profit/loss on sale of Decorative business in France and Germany and Hempel Russia (EUR m) 2025 2024
Net cash received (paid) - 2 4
Net proceeds receivables/payables 5 - 5
Total consideration received or receivable 3 - 1
Carrying amount of net assets sold - - 58
Reclassification of foreign currency translation reserve - -
Carrying amount of building sold - - 8
Transaction costs - 1 - 3
Profit/loss on sale of Decorative business in France and Germany and Hempel Russia 2 - 70
(EUR m) 2024
Non-current assets 33
Inventory 30
Trade receivables 49
Cash 1
Other current assets 6
Total assets 119
Non-current liabilities - 8
Trade payables - 29
Other current liabilities - 24
Total liabilities - 61
Net assets 58
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5 Other disclosures
Fees for services other than statutory audit
of the financial statements provided by
PricewaterhouseCoopers Statsautoriseret
Revisionspartner selskab to the Hempel Group
mainly consist of accounting advisory services,
and other advisory and tax services.
Other contingent liabilities
The Group is, through its ongoing business,
involved in product liability claims and disputes in
connection with the Group’s operational activities.
The Group does not expect the pending litigations,
claims and investigations, individually and in
the aggregate, to have a material impact on the
Group’s financial position, operating profit or cash
flow in addition to the amounts recognised as
provision for legal disputes.
Hempel A/S and its Danish subsidiaries are
jointly taxed with several Danish companies in the
Hempel Foundation Group. The Group’s Danish
enterprises are jointly and severally liable for
Danish taxes at source and income taxes. Refer to
the tax administration company Hempel Invest A/S
for the total amount of corporate tax payable for
the Group of jointly taxed companies.
No events occurred after the balance sheet date
that could have a material impact on the company’s
financial results, assets, liabilities or equity.
For the purpose of presenting the statement
of cash flows, non-cash items with effect on the
statement of profit or loss must be reversed to
identify the actual cash flow effect from the
statement of profit or loss. The adjustments
are specified as follows:
5.1 Fee to the auditors appointed at the General Meeting 5.3 Contingent liabilities and other commitments
5.4 Events after the reporting period5.2 Adjustment for non-cash items
(EUR m) 2025 2024
Audit fee 2 2
Tax advice 1 1
Total 3 3
(EUR m) 2025 2024
Amortisation,
depreciation and
impairment
108 116
Other non-cash
adjustments
- 1
Provisions - 21
Gains and losses on the
sale of fixed assets
- 11 71
Hyperinflation
adjustment
4 -
Total 101 209
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Parent companies
Hempel Invest A/S
As of 31 December 2025, there is no outstanding
loan payable to Hempel Invest A/S as it had been
fully repaid in 2024. Interest expense in 2024
amounted to EUR 3 million.
Dividend
Due to the extraordinary dividend payment in
2024, a change has been made to the dividend
distribution policy, so the Group is not going to
declare dividends for the financial years 2024 to
2027. (Ordinary dividend 2024: EUR 25 million,
Extraordinary dividend 2024: EUR 132 million).
Other related parties
Hempel Ejendomme A/S
Hempel A/S paid rent of EUR 5 million (2024:
EUR 5 million) to Hempel Ejendomme A/S under
office leases with terms expiring in 5-6 years and
lease liabilities of EUR 29 million (2024: EUR 34
million). As of 31 December 2025, Hempel A/S
has EUR 1 million deposit receivable from Hempel
Ejendomme A/S in relation to office leases
(2024: EUR 1 million).
Key management personnel of the entity
or its parent
For information on remuneration of key
management personnel of Hempel, please
refer to note 2.2 Employee costs. There were
no material unsettled balances with key
management personnel at the end of the year.
5.5 Related parties and ownership
Related parties and ownership Basis
Controlling influence:
Hempel Foundation, Amaliegade 8, 1256 Copenhagen K, Denmark Ultimate parent company
Hempel Invest A/S, Amaliegade 8, 1256 Copenhagen K, Denmark Majority shareholder (77.7%)
Minority shareholder:
SeaCoat Investments S.a r-l Company no. B286172, 29,
Avenue de la Porte-Neuve L-2227 Luxembourg
Shareholder (22.2%)
Other related parties:
Members of Registered Executive Management and Board of Directors of Hempel A/S,
Hempel Invest A/S and Hempel Foundation
Related party
Key management personnel of Hempel A/S Related party
Hempel’s Employee Foundation, Amaliegade 8, 1256 Copenhagen K, Denmark Related party
Hempel’s Cultural Foundation, Amaliegade 8, 1256 Copenhagen K, Denmark Related party
Brænderupvænge ApS, Amaliegade 8, 1256 Copenhagen K, Denmark Related party
Keldskov ApS, Amaliegade 8, 1256 Copenhagen K, Denmark Related party
Hempel Employee Foundation from 2017, 2800 Kongens Lyngby, Denmark Related party
Hempel Administration ApS, Amaliegade 8, 1256 Copenhagen K, Denmark Related party
Hempel Invest II ApS, Amaliegade 8, 1256 Copenhagen K, Denmark Related party
Hempel Ejendomme A/S, Amaliegade 8, 1256 Copenhagen K, Denmark Related party
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5.6 The Hempel Group
Location Name Currency Ownership
Denmark Hempel A/S DKK
Argentina Hempel Argentina S.R.L. ARS 100%
Australia Hempel (Australia) Pty. Ltd. AUD 100%
Australia Hempel NewCo (Australia) Pty. Ltd. AUD 100%
Australia Hempel (Wattyl) Australia Pty. Ltd. AUD 100%
Bahrain Dahna Paint Middle East Holding B.S.C. BHD 51%
Bahrain Hempel Paints (Bahrain) S.P.C. BHD 51%
Brazil Hempel Tintas do Brasil Ltda BRL 100%
Canada Farrow & Ball Canada Limited CAD 100%
Canada Hempel (Canada) Inc. CAD 100%
Chile Pinturas Hempel Chile SpA CLP 100%
China Hempel North Asia Holding Co., Ltd CNY 100%
China Hempel (Hong Kong) Limited HKD 100%
China Hempel (China) Limited HKD 100%
China Hempel (Kunshan) Coatings Ltd. CNY 100%
China Hempel (Yantai) Coatings Ltd. CNY 100%
China Hempel (Guangzhou) Coatings Ltd. CNY 100%
China Hempel (Zhangjiagang) Coatings Ltd. CNY 100%
Croatia Hempel Coatings (Croatia) Ltd. EUR 100%
Cyprus Hempel Coatings (Cyprus) Limited EUR 100%
Czech Republic Hempel (Czech Republic) s.r.o. CZK 100%
Denmark HSA (Danmark) A/S DKK 100%
Denmark Hempel Decorative Paints A/S DKK 100%
Denmark HF (Denmark) A/S DKK 100%
Ecuador Hempel Ecuador S.A. USD 100%
Egypt Hempel Coatings (Egypt) LLC EGP 100%
Egypt Hempel Egypt L.L.C. EGP 100%
Egypt Hempel Paints Egypt LLC EGP 99%
Finland OY Hempel (Finland) AB EUR 100%
France Hempel (France) SAS EUR 100%
Germany Farrow & Ball DE GmbH EUR 100%
Germany Hempel (Germany) GmbH EUR 100%
Germany Hempel Beteiligungsgesellschaft GmbH EUR 100%
Germany Rottkamp Immobilien Verwaltung GmbH EUR 100%
Greece Hempel Coatings (Hellas) Single Member S.A. EUR 100%
India Hempel Paints (India) Private Limited INR 100%
Indonesia P.T. Hempel Indonesia IDR 100%
Ireland Crown Paints Ireland Limited EUR 100%
Italy Hempel (Italy) S.r.l. EUR 100%
Korea Hempel Korea Co. Ltd. KRW 100%
Kuwait Hempel Paints (Kuwait) K.S.C.C. KWD 51%
Malaysia Hempel (Malaysia) Sdn. Bhd MYR 100%
Location Name Currency Ownership
Malaysia Hempel Manufacturing (Malaysia) Sdn. Bhd. MYR 100%
Mexico Pinturas Hempel de Mexico S.A. de C.V. MXN 100%
Morocco
The Netherlands
Hempel Maroc SARL
Hempel (The Netherlands) B.V.
MAD
EUR
100%
100%
New Zealand Hempel (Wattyl) New Zealand Ltd. NZD 100%
Norway Hempel Norway AS NOK 100%
Oman Hempel (Oman) L.L.C OMR 25%
Oman Hempel Manufacturing LLC OMR 25%
Peru Hempel Pinturas Del Perú S.A.C. PEN 100%
Poland Hempel Paints (Poland) S.p. z o.o. PLN 100%
Portugal Hempel (Portugal) Lda EUR 100%
Qatar Hempel Paints (Qatar) W.L.L. QAR 28%
Saudi Arabia Hempel Paints (Saudi Arabia) W.L.L. SAR 51%
Singapore Hempel (Singapore) Pte. Ltd. SGD 100%
South Africa Hempel Paints South Africa (Pty) Ltd. ZAR 100%
Spain Pinturas Hempel SAU EUR 100%
Sweden Hempel (Sweden) AB SEK 100%
Switzerland Hempel Schweiz AG CHF 100%
Syria Hempel Paints (Syria) W.L.L. SYP 43%
Taiwan Hempel (Taiwan) Co., Ltd. TWD 100%
Thailand Hempel (Thailand) Ltd. THB 100%
Turkey Hempel Coatings San. ve Tic. Ltd. Sti. TRY 100%
The United Kingdom Crown Brands Limited GBP 100%
The United Kingdom Crown Paints Limited GBP 100%
The United Kingdom Crown Paints Group Limited GBP 100%
The United Kingdom Crown Paints Holdings Limited GBP 100%
The United Kingdom FB Ammonite Limited GBP 100%
The United Kingdom FB Brassica Limited GBP 100%
The United Kingdom FB Brinjal Limited GBP 100%
The United Kingdom FB Calluna Limited GBP 100%
The United Kingdom Farrow & Ball Holdings Limited GBP 100%
The United Kingdom Farrow & Ball Limited GBP 100%
The United Kingdom Hempel Decorative Paints Limited GBP 100%
The United Kingdom Hempel UK Ltd. GBP 100%
The United Kingdom Reebor Limited GBP 1%
United Arab Emirates Hempel Paints Company Abu Dhabi L.L.C. AED 24%
United Arab Emirates Hempel Paints Emirates L.L.C. AED 49%
USA Farrow & Ball Inc. USD 100%
USA Hempel (USA), Inc. USD 100%
USA Jones-Blair Company, LLC USD 100%
Vietnam Hempel Vietnam Company Limited VND 100%
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Introduction
5.7 Financial definitions
Financial ratios have been calculated as follows:
Organic growth =
Organic revenue
Revenue in comparative period
Organic growth is defined as revenue growth from one year to the next, based on values in
fixed currencies for both years excluding mergers, acquisitions and divestments, etc.
Gross margin =
Gross profit
Revenue
EBITDA margin =
EBITDA
Revenue
EBITDA margin, adjusted =
EBITDA, adjusted
Revenue
EBITDA = Operating profit (or loss) before impairment, amortisation and depreciation
EBITDA, adjusted = EBITDA before special items and before adjustment for hyperinflation according to IAS 29
Operating profit margin =
Operating profit (loss)
Revenue
Return on invested capital (ROIC) =
12 month operating profit less effective tax rate
(∑
i=T
Invested capital) / 12
i=T–12
Invested capital =
Intangibles + property, plant and equipment + inventories + receivables
− provisions − trade payables − other payables
Equity ratio =
Shareholders’ equity
Total assets
Leverage ratio =
Net interest-bearing debt
EBITDA – Special Items
Net interest-bearing debt =
Overdraft facilities +bank loans, etc. + interest-bearing payables to parent companies
+ lease liabilities − cash at bank and in hand
Free cash flow = Total net cash generated from operating activities less net cash used in investing activities
Cash conversion =
Total net cash flows from operating activities before financial items and tax
Total EBITDA
Financial ratios have been calculated as follows:
Accounts receivable days =
Accounts receivable x 90
Revenue (last 3 months)
Accounts payable days =
Accounts payable x 90
Cost of goods sold (last 3 months)
Inventory days =
Inventory x 90
Cost of goods sold (last 3 months)
Average net working capital days = Accounts receivable days + inventory days – accounts payable days (12 months average)
The following key figures are calculated as follows (EUR m) 2025 2024
Operating profit 279 277
Amortisation, depreciation and impairment 108 114
EBITDA = 387 391
Special items, see note 2.3 3 -
Adjustment for hyperinflation according to IAS 29 4 1
EBITDA, adjusted = 394 392
The following key figures are calculated as follows:
Borrowings 393 623
Lease liabilities 114 129
Cash - 163 - 210
Net interest-bearing debt = 344 542
EBITDA, adjusted 394 392
Adjustment for hyperinflation according to IAS 29 - 4 - 1
EBITDA before special items = 390 391
Leverage ratio = 0.9x 1.4x
Hempel Annual Report 2025
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Introduction
Parent company financial statements
Primary statements
Statement of profit or loss . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Statement of financial position
. . . . . . . . . . . . . . . . . . . . . . . 95
Statement of changes in equity
. . . . . . . . . . . . . . . . . . . . . . . 96
Notes
1. Basis of preparation
1.1 General accounting policies
. . . . . . . . . . . . . . . . . . . . . . 97
2. Results for the year
2.1 Revenue
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
2.2 Employee costs
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
2.3 Income tax, tax assets and liabilities
. . . . . . . . . . . . . . . . 98
3. Operating assets and liabilities
3.1 Intangible assets
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
3.2 Property, plant and equipment
. . . . . . . . . . . . . . . . . . . . 99
3.3 Inventories
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
4. Capital structure and financing items
4.1 Share capital, distribution to shareholder
. . . . . . . . . . . . 100
4.2 Borrowings
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
4.3 Financial income and expenses
. . . . . . . . . . . . . . . . . . . 100
5. Other disclosures
5.1 Fee to the auditors appointed at the General Meeting
. . . 101
5.2 Contingent liabilities and other commitments
. . . . . . . . . 101
5.3 Events after the reporting period
. . . . . . . . . . . . . . . . . . 101
5.4 Related parties
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
5.5 Investments in subsidiaries
. . . . . . . . . . . . . . . . . . . . . . 102
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Statement of profit or loss
Note (EUR m) 2025 2024
2.1 Revenue 475 246
Production costs - 274 - 128
Gross profit 201 118
Sales and distribution costs - 45 - 30
Administrative costs - 105 - 79
Other operating income/expenses - 7 1
2.2 Operating profit (loss) 44 10
5.5 Income from investments in subsidiaries 73 5
Profit (loss) before financial income and expenses 117 15
4.3 Financial income and expenses - 15 - 22
Profit (loss) before tax 102 - 7
2.3 Income tax - 15 6
Profit (loss) for the year 87 - 1
Hempel Annual Report 2025
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Statement of financial position
31 December
Note (EUR m) 2025 2024
Share capital 20 19
Share premium 591 590
Warrants 6 6
Reserve for development costs 24 24
Retained earnings 201 164
4.1 Total equity 842 803
4.2 Borrowings 296 498
Provisions 53 12
Total non-current liabilities 349 510
4.2 Overdraft facilities 22 44
Trade payables 42 22
4.2 Payables to parent company - -
Payables to Group enterprises 459 532
Tax payables 3 2
Other liabilities 31 32
Total current liabilities 557 632
Total liabilities 906 1,142
Total equity and liabilities 1,74 8 1,945
Note (EUR m) 2025 2024
Software 9 7
Intangible assets under construction 15 17
Other intangible assets 10 11
3.1 Intangible assets 34 35
Plant and machinery 4 5
Leasehold improvements 19 21
Other fixed assets 2 1
Assets under construction 1 1
3.2 Property, plant and equipment 26 28
5.5 Investments in subsidiaries 1,143 1,004
Loans to Group enterprises 102 230
2.3 Deferred tax assets 30 33
Deposits 2 1
Other non-current assets 1,277 1,268
Total non-current assets 1,337 1,331
3.3 Inventories 69 22
Trade receivables 11 13
Receivables from Group enterprises 302 498
Tax receivables 6 12
Other receivables 14 35
Prepayments 9 14
Cash - 20
Total current assets 411 614
Total assets 1,748 1,945
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Statement of changes in equity
Note (EUR m) Share
capital
Share
premium
Warrants Reserve for
development
costs
Retained
earnings
Proposed
dividend
Total
equity
Equity at 1 January 2024 15 - - 32 252 25 324
Profit / (loss) for the year - - - - - 1 - - 1
Exchange adjustment - - - - 38 - 38
Remeasurements of defined benefit pension plans - - - - 2 - 2
Cash flow hedging - - - - 3 - 3
Other adjustments - - - - - 2 - - 2
Tax on equity transactions - - - - - 4 - - 4
Extraordinary dividend distributed - - - - - 132 - - 132
Ordinary dividend paid - - - - - - 25 - 25
Additional share issue and contribution 4 590 6 - - - 600
Development projects reserve, amortisation - - - - 8 8 - -
4.1 Equity at 31 December 2024 19 590 6 24 164 - 803
Equity at 1 January 2025 19 590 6 24 164 - 803
Profit / (loss) for the year - - - - 87 - 87
Exchange adjustment - - - - - 57 - - 57
Remeasurements of defined benefit pension plans - - - - 1 - 1
Cash flow hedging - - - - 1 - 1
Other adjustments - - - - - 1 - - 1
Tax on equity transactions - - - - 6 - 6
Development projects reserve, additions - - - 8 - - 8
Development projects reserve, amortisation - - - - 8 - - - 8
Additional share issue and contribution 1 1 - - - - 2
4.1 Equity at 31 December 2025 20 591 6 24 201 - 842
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The financial statements of Hempel A/S have been
prepared in accordance with the Danish Financial
Statements Act (Årsregnskabsloven) applying to
large enterprises of reporting class C.
The financial statements are presented in
EUR million.
Because a statement of cash flows is prepared for
the Group in the consolidated financial statements,
no separate statement of cash flows has been
prepared for the parent company (as permitted
under the Danish Financial Statements Act).
Please refer to the consolidated cash flow
statement for the Group.
The accounting policies and presentation for
the parent company are the same as for the
consolidated financial statements with the
exceptions described in the following sections.
For a description of the accounting policies
of the Group, please refer to the consolidated
financial statements.
Revenue
Revenue is generated mainly from the sale of
goods for resale and finished goods. Revenue
is recognised in the income statement when all
significant risks and rewards have been transferred
to the customer and when the income can be
reliably measured and is expected to be received.
Revenue is measured at the fair value of the
consideration expected to be received. Revenue
is recognised exclusive of VAT and net of discounts
relating to sales.
Receivables
Receivables are measured in the balance sheet
at the lower of amortised cost and the net
realisable value, which normally corresponds to
the nominal value.
Leases
A finance lease is a lease that transfers sub-
stantially all the risks and rewards incidental
to ownership of an asset. The parent company
does not have any finance lease agreements.
An operating lease is a lease other than a finance
lease. Operating lease commitments mainly relate
to office buildings, leased cars and, to some
extent, office equipment. Payments made under
operating leases are recognised in the statement
of profit or loss over the lease term.
Hyperinflationary economies
The results and financial position of subsidiaries
in Argentina and Turkey are translated into
the presentation currency EUR following the
principles described in note 1.1 Translation of
Group companies in the consolidated financial
statements. The results and financial position
in Parent Financial Statements are not restated
taking into account inflation adjustments in
hyperinflationary economies.
Discontinued operations
Activities in Decorative business in France and
Germany, divested in 2024, are not presented as
discontinued operations.
1 Basis of preparation
1.1 General accounting policies
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2 Results for the year
All revenue is derived from activities within the
EMEA region. The following table displays revenue
disaggregated into the sale of goods per customer
category.
Disaggregation of revenue is based on internal
management reporting. The other category primarily
consists of intercompany sales.
For remuneration of the Board of Directors and
Registered Executive Management, please refer to
note 2.2 in the consolidated financial statements.
2.1 Revenue 2.3 Income tax, tax assets and liabilities
2.2 Employee costs
Deferred tax
Deferred tax recognised in the statement of financial position (EUR m)
2025 2024
Deferred tax (net):
Deferred tax, beginning of year 33 23
Recognised in profit or loss - 6 11
Recognised in equity - 3
Adjustments in respect of prior years 3 - 4
Deferred tax (net), end of year 30 33
(EUR m) 2025 2024
Marine 45 46
Energy & Infrastructure 11 11
Other 419 189
Total revenue 475 246
Staff costs (EUR m) 2025 2024
Wages and salaries 55 61
Pension costs 4 4
Other social security
contributions 1 1
Other employee costs 2 2
Total 62 68
Average number of
employees 439 425
Income tax
Tax for the year (EUR m)
2025 2024
Tax for the year is specified as follows:
Tax on profit for the year - 32 - 21
Tax in respect of subsidiaries 17 27
Total tax for the year - 15 6
Tax on profit for the year is calculated as follows:
Current tax for the year - 14 - 4
Deferred tax for the year - 6 11
Tax on other comprehensive income 2 -
Adjustments in respect of prior years, current tax - -
Adjustments in respect of prior years, deferred tax 3 - 1
Total tax on profit for the year - 15 6
The Danish corporate tax rate was 22% in 2025
(22% in 2024). At 31 December 2025, the
company had recognised a deferred tax asset
of EUR 30 million (2024: EUR 33 million) which
relates to temporary differences and tax losses
carried forward.
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3 Operating assets and liabilities
3.1 Intangible assets 3.2 Property, plant and equipment
3.3 Inventories
Intangible assets (EUR m) Software Intangible
assets under
construction
Other
intangible
assets
1
Total
Cost at 1 January 2025 22 18 49 89
Additions for the year - 10 - 10
Transfer between categories 9 - 13 4 -
Disposals for the year - - - -
Cost at 31 December 2025 31 15 53 99
Accumulated amortisation at 1 January 2025 15 - 39 54
Amortisation for the year 7 - 4 11
Accumulated amortisation at 31 December 2025 22 - 43 65
Carrying amount at 31 December 2025 9 15 10 34
1
Other intangible assets comprise mainly brands and formulas.
Property, plant and equipment (EUR m) Plant and
machinery
Leasehold
improvements
Other fixed
assets
Assets under
construction
Total
Cost at 1 January 2025 11 29 5 1 46
Transfer between categories - - 1 - 1 -
Additions for the year - - - 1 1
Disposals for the year - - - - -
Cost at 31 December 2025 11 29 6 1 47
Accumulated depreciation at
1 January 2025 6 8 4 - 18
Depreciation for the year 1 2 - - 3
Accumulated depreciation at
31 December 2025 7 10 4 - 21
Carrying amount at 31 December 2025 4 19 2 1 26
Inventories (EUR m) 2025 2024
Raw materials and
consumables
28 13
Work in progress 3 1
Finished goods 38 8
Inventories 69 22
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4 Capital structure and financing items
4.1 Share capital, distribution to shareholder 4.3 Financial income and expenses
Refer to note 4.1 in the consolidated financial
statements for an overview of the changes in
share capital.
An amount equal to capitalised development
costs, net of tax, is reserved in the Reserve for
development costs within equity. The reserve is
reduced with amortisation and write-downs of
development projects. The reserve cannot be
used for payments of dividends.
4.2 Borrowings
As of 31 December 2025, there is no outstanding
loan from Hempel Invest A/S. Overdraft facilities
amounted to EUR 22 million (2024: EUR 44 million).
Distribution of profit
(EUR m)
2025 2024
Proposed dividends - -
Extraordinary dividends - - 132
Retained earnings 87 131
Total 87 - 1
(EUR m) 2025 2024
Interest income from subsidiaries 36 47
External interest expenses - 16 - 42
Interest income, other - 1
Other financial expenses - 3 - 7
Interest paid to Group enterprises - 19 - 17
Realised and unrealised exchange gains/losses, net - 13 - 4
Net financial income/expenses - 15 - 22
Long-term borrowings
etc. including short-
term part (EUR m)
2025 2024
Due within 1 year 22 44
Due within 1 to 5 years 296 498
Total borrowings 318 542
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5 Other disclosures
5.1 Fee to the auditors appointed at the General Meeting
5.2 Contingent liabilities and other commitments
The audit fee is disclosed in the consolidated
financial statements, note 5.1.
The operating lease commitments are related to
non-cancellable operating leases primarily related
to buildings, company cars and office equipment.
Payments made under operating leases are
recog nised in the statement of profit or loss on a
straight-line basis over the lease term. The parent
company guarantees unutilised local loans and
bank credits to subsidiaries.
Hempel A/S is jointly taxed with a number of
Danish companies in the Hempel Foundation
Group. The Group’s Danish enterprises are jointly
and severally liable for Danish taxes at source
and income taxes.
Refer to note 5.3 in the consolidated financial
statements for more information.
5.3 Events after the reporting period
5.4 Related parties
Refer to note 5.4 in the consolidated financial
statements for more information.
The parent company has chosen only to disclose
transactions that have not been made on an arm’s
length basis in accordance with section 98c (6) of
the Danish Financial Statements Act.
(EUR m) 2025 2024
Rental and lease obligations:
Due within 1 year from the balance sheet date 6 6
Due within 1 to 5 years from the balance sheet date 24 24
Due more than 5 years from the balance sheet date 0 6
Total rental and lease obligations 30 36
Guarantees:
For local loans and bank credits to subsidiaries 67 85
Total guarantees 67 85
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5.5 Investments in subsidiaries
Accounting policies
Investments in subsidiaries are recognised and
measured under the equity method whereby
the proportionate share of the profit for the
year, less amortisation of goodwill and other fair
value adjustments from business acquisitions,
is recognised in income from investments in
subsidiaries in the statement of profit or loss.
Goodwill is amortised over the period the company
is expected to derive benefits from the goodwill,
which is based on the acquisition business case.
Brands are amortised over 10 years.
The investments are measured in the balance
sheet at the proportionate ownership share of the
net asset value of the enterprises with deduction
or addition of shares of unrealised intercompany
profits and losses.
The total net revaluation of investments in
subsidiaries is transferred upon distribution
of profit to ‘Reserve for net revaluation under
the equity method’ under equity. The reserve
is reduced by dividends distributed to the
parent company and adjusted for other equity
movements in subsidiaries.
Subsidiaries with a negative net asset value are
recognised at EUR 0. Any legal or constructive
obligation of the parent company to cover the
negative balance of the subsidiary is recognised
in receivables from subsidiaries or as a provision.
Please refer to note 5.6 in the consolidated
financial statements for an overview of the
Hempel Group.
Investments in subsidiaries (EUR m) 2025 2024
Cost at 1 January 1,045 1,045
Additions for the year 185 99
Disposals for the year - - 99
Cost at 31 December 1,230 1,045
Net revaluations at 1 January - 107 - 276
Exchange rate adjustments - 43 26
Remeasurements of defined benefit pension plans 1 2
Profit for the year 137 71
Amortisation and impairment of goodwill and brands - 64 - 66
Dividend received - 80 - 56
Disposal - 6 95
Other adjustments
1
- 97
Net revaluations at 31 December - 162 - 107
Carrying amount at 31 December 1,068 938
Recognised in the statement of financial position as follows:
Subsidiaries with negative equity - 75 - 66
Investments in subsidiaries 1,143 1,004
Total 1,068 938
Subsidiaries with negative equity are recognised in the statement of financial
position as follows:
Recognised as provisions - 28 - 12
Recognised in receivables from subsidiaries - 47 - 54
Net value at 31 December - 75 - 66
1
2024: As part of the sale of the Decorative business in France and Germany the remaining Intercompany loans were written-
down, which is presented under other adjustments. Please refer to note 4.6 in the consolidated financial statements for further
information related to the divestment of the Decorative business in France and Germany.
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