TOPSØE HOLDING A/S
ANNUAL
REPORT
2022
CVR no. 30 82 67 52
The Annual Report has been presented and
adopted at the Annual General Meeting on
April 27, 2023
Chair of the meeting,
MANAGEMENT REVIEW
Letter from the chairman 3
Group financial review 4
Key financial figures 5
Outlook 6
Committed to be a sustainable business 7
Risk management & key risks
Risk management 13
Topsøe Holding A/S’ risk management process 13
FINANCIAL STATEMENTS
Consolidated financial statements
Income statement 18
Statement of comprehensive income 18
Balance sheet 19
Cash flow statement 20
Statement of changes in equity 21
Notes 23
Financial statements of Topsøe Holding A/S
Income statement 55
Balance sheet 56
Statement of changes in equity 57
Notes 58
Statements
Statement by the Executive Management and
Board of Directors on the annual report 63
Independent auditor’s report 64
CONTENTS
TOPSØE HOLDING A/S ANNUAL REPORT 2022
2
CONTENTS
MANAGEMENT REVIEW
Frydenlund Ejendomsselskab ApS
2022 was characterized by the ongoing renovation
projects which will continue in the coming years.
The harvest was satisfactory and we are progressing
towards becoming an organic operation, however, the
general conditions for fruit growing in Denmark are
challenging. We remain focused on making the orchard
profitable while preserving the historic fruit varieties.
I thank the board and the employees for their great
efforts in handling the many diverse tasks at Frydenlund.
Topsøe Holding A/S
There was turmoil in the financial markets in 2022
and this caused losses on investments in shares and
bonds. During the first months of 2023, the situa-
tion has improved with a positive development in the
financial markets.
I want to express my warm thanks to the Topsøe family
and my fellow board members for their continued
support of our strategy. I also thank the team at
Topsøe Holding for their great efforts. The progress
made in 2022 has further increased our determi-
nation to have the companies we are involved in,
contributing towards solving some of the world’s most
important challenges.
JAKOB HALDOR TOPSØE
Chairman
Topsoe A/S
2022 proved to be a very challenging year glo-
bally with the horrible war in Ukraine, rising inflation,
increased cost of living and recession fears. Despite
this, Topsoe had a very exciting year with considerable
progress towards the mission; “being recognized as
the global leader in carbon emission reduction tech-
nologies” and delivering on our purpose of “perfecting
chemistry for a better world”.
Due to the war in Ukraine, we had to close our busi-
ness in Russia, one of our top three markets, and we
had to look for new sources of gas to power our ope-
rations, which caused many challenges and affected
our bottom line negatively.
Despite these headwinds, there are plenty of reasons
to believe in a bright future for Topsoe. We are leading
the energy transition with our broad portfolio of
cutting-edge technologies enabling partners and
customers to decarbonize. A notable milestone was
the decision to build the world’s largest SOEC produc-
tion facility for making state-of-the-art electrolyzers.
This, together with our market leading downstream
I would also like to extend my sincere gratitude to
the Topsoe board for the excellent co-operation,
Temasek for the great partnership now for four years
running and to Topsoe’s CEO, Roeland Baan, and the
senior leadership team for their tireless work towards
fulfilling our ambitions.
IGM Biosciences, Inc.
While IGM Biosciences continued the rapid growth
of the organization and expanding the already very
impressive pipeline, it also managed to conclude what
was the world’s largest biotech transaction of its kind
in 2022 with Sanofi. Apart from the clear validation
of IGM Biosciences by a major pharma player, it will be
exciting to follow the clinical progress resulting from
this partnership agreement.
To secure funding for the next leg of IGM Biosciences’
development, a follow-on financing with the parti-
cipation of Topsøe Holding was concluded in the
beginning of the year raising USD 230 million. This
will provide substantial firepower to accelerate the
development of IGM Biosciences’ platform, clinical
programs and pre-clinical pipeline.
I would like to express my warm thanks to my
colleagues on the board, the management and the
employees for their targeted efforts and dedication
to IGM Biosciences.
LETTER FROM THE CHAIRMAN
In a year where many unwelcome external headwinds
arose, Topsøe Holding’s dedication to our activities
that help solve global challenges was reinforced.
technologies, positions Topsoe as the “go-to”
Power-to-X company.
While Topsoe develops and commercializes
Power-to-X technologies, we stay committed to
our traditional business helping clients cut emis-
sions and energy consumption in their existing
processes.
Even though Topsoe’s by far biggest impact on
fighting climate change comes from helping
clients decarbonize, we are also committed to de-
carbonizing within Topsoe and made significant
progress towards the goal of achieving net-zero
across our value chain by 2040.
Topsoe again proved it is a powerhouse of prob-
lem-solving capacities - both when it comes to
progressing cutting-edge technologies, assisting
clients the best possible way and in taking on the
headwinds provided by external factors. This is only
possible with the amazing employees, we are so
fortunate to have. Thank you for your exceptional
efforts in a challenged yet exciting 2022.
TOPSØE HOLDING A/S ANNUAL REPORT 2022 MANAGEMENT REVIEW
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CONTENTS
GROUP FINANCIAL
REVIEW
Financial highlights 2022
Profit before tax amounted to DKK 266 million in
2022 (2021: DKK 766 million).
For the core business, total revenue increased by 10% in
2022 to DKK 6,845 million (2021: DKK 6,225 million).
The increase in revenue was mainly driven by Topsoe
A/S’ Catalyst revenue, especially our products within
the Hydrotreating catalysts and Chemicals catalysts
which increased by 17% and 27% respectively. The
revenue increase was mainly a result of higher demand
and price increases driven by higher production and
raw material costs. Revenue from our technology
business was flat year-over-year, and lower than
expected going into 2022. The delay in terms of
growth was significantly adversely impacted by closure
of our business in Russia. On a positive note, we saw
promising underlying trends and technology revenue
from solutions related to the global energy transition
increased to 48% in 2022 (2021: 30%).
Topsøe Holding has in 2022 invested a further
DKK 167 million (USD 25 million) in the associated
company IGM Biosciences Inc., as part of a total
capital increase of DKK 1,629 million (USD 230
million). Due to the capital increase Topsøe Holding’s
ownership was diluted from 39.0% to 31.9%. The gain
from the dilution amounted to DKK 201 million.
In 2022, IGM Biosciences Inc. impacted the income
statement with a total loss of DKK 207 million (2021:
DKK -222 million). This was expected for the year and
it was within the forecast.
EBIT before special items
EBIT before special items amounted to DKK 574
million (2021: DKK 884 million), down 35% compared
to 2021. EBIT margin before special items decreased
by 6%-point to 8% (2021: 14%). This was driven by
increased cost of production as a consequence of
Russias invasion of Ukraine and the following inflation
and energy price increases.
Total special items of DKK -43 million for 2022
reflected costs regarding our operations in Russia. In
2021, special items amounted to DKK -26 million and
were mainly driven by restructuring costs.
Net profit
Our net profit declined by 68% to DKK 190 million
(2021: DKK 595 million).
The decrease in net profit was mainly explained by:
- The net profit in Topsoe A/S decreased by 36%
to DKK 567 million (2021: DKK 890 million). The
decrease was mainly driven by closing down business
in Russia and the decline in EBIT before special items.
- 2022 included DKK 129 million in dividends from
investments, compared to DKK 33 million in 2021.
This was, however, offset by an income from the sale
of Faradion in 2021 of DKK 137 million.
- Financial expenses increased to DKK 428 million
(2021: DKK 130 million) due to a negative return
related to investments in Securities and Bonds.
Cash flow
Cash flow from operating activities amounted to DKK
988 million (2021: DKK 464 million). The improve-
ment since a year ago is mainly explained by working
capital, as 2021 cash flows were negatively impacted
by working capital as opposed to 2022, where we
have seen a small positive impact. The proceeds from
Topsoe A/S’ sale of Faradion in the beginning of 2022,
which was included in working capital in December
2021, had a positive impact on working capital.
Further, working capital was supported in 2022 due
to a higher Work in progress and Contract liabilities
compared to 2021. , which was offset by increased
inventories and higher trade receivables resulting from
sales growth.
Cash flow from investment activities amounts to DKK
-975 million (2021: DKK -330 million) and was mainly
driven by significant property, plant and equipment
investments in 2022.
Return on invested capital (ROIC)
ROIC before special items amounted to 7.8% (2021:
13.1%) and was driven by the decline in net operating
profit after tax, related to closing down business in
Russia and Belarus, and an increase in invested capital,
primarily related to fixed asset investments.
Financial covenants
Financial covenants as of December 31, 2022, were
all met.
Order backlog
The order backlog at Topsoe A/S amounted to DKK
6,015 million at the end of 2022, an increase of DKK
2,381 million, or 66%, compared to 2021. Combined
TOPSØE HOLDING A/S ANNUAL REPORT 2022 MANAGEMENT REVIEW
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CONTENTS
KEY FINANCIAL FIGURES
2022 2021 2020 2019 2018
1
Income statement
DKK million
Revenue 6,845 6,225 6,179 5,897 5,619
Gross profit 2,754 2,881 2,784 2,638 2,503
EBITDA 928 1,220 1,166 921 808
Depreciation and amortization -354 -336 -325 -343 -258
EBIT before special items 574 884 841 578 550
Special items -43 -26 -275 54 -72
EBIT after special items 531 858 566 632 478
Net financial expenses, etc. -265 -92 201 859 -29
Profit from continuing operations 190 585 646 1,287 339
Profit/loss from discontinuing operations 0 10 45 0 -16
Net profit 190 595 691 1,287 323
Balance sheet
DKK million
Balance sheet total 14,787 13,669 13,416 13,239 9,178
Shareholder’s Equity 8,517 8,463 8,049 7,663 4,932
Net working capital 1,049 1,131 428 600 243
Net interest-bearing debt 608 112 172 543 576
2022 2021 2020 2019 2018
Cash flow
DKK million
Cash flows from operating activities 988 464 1,104 524 830
- of which continuing operations 988 464 1,104 540 846
Cash flows from investing activities -975 -330 -754 -1,768 -242
- of which investment in Property, plant
and equipment -787 -334 -329 -216 -268
Cash flows from financing activities -430 -459 -253 1,370 -519
Employees
Numbers
Average number of employees 2,251 2,142 2,278 2,263 2,283
Ratios
%
Gross margin 40.2 46.3 45.1 45.8 44.5
EBITDA margin 13.6 19.6 18.9 16.9 14.4
EBIT before special items margin 8.4 14.2 13.6 9.8 9.8
EBIT after special items margin 7.8 13.8 9.2 10,7 8.5
Return on invested capital (ROIC) before
special items 7.8 13.1 8.8 10.2 7.9
Equity ratio 57.6. 61.9 60.0 57.9 53.7
Return on equity 2.2 7.2 8.8 20.4 -6.7
Leverage ratio 0.7 0.1 0.2 0.6 0.7
The ratios have been prepared in accordance with the Recommendations & Financial Ratios produced by the Danish Finance Society and CFA Society
Denmark.
1. IFRS 16 was implemented in 2019 using the modified retrospective approach, and comparative figures for 2018 have not been restated.
TOPSØE HOLDING A/S ANNUAL REPORT 2022 MANAGEMENT REVIEW
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CONTENTS
OUTLOOK
OUTLOOK 2023
Topsøe Holding Group expects 2023 revenue to be
in the range of DKK 7,500-8,500 million based on
entering 2023 with a healthy order book. The EBIT
margin for 2023 is expected to be in the range of
8.0-10.0%.
We expect Topsoe’s core business, which excludes our
Power-to-X growth venture, to return to EBIT levels in
line with EBIT achieved in 2021 before Russia’s inva-
sion of Ukraine. This despite of Topsoe having closed
down all Russia and Belarus related activities, including
our Russian subsidiary and operations – equivalent to
10% of Topsoe’s revenue in 2021.
The global energy transition will continue to drive
our growth, and 2023 is expected to be a milestone
year for Topsoe in many regards. Our Power-to-X
business will, for the first time, deliver a meaningful
and visible contribution to the topline. We also plan to
significantly increase our investments in Power-to-X,
including the world´s largest SOEC (Solid Oxide Elec-
trolyzer Cell) factory in Herning, Denmark which will
bring capital investments to an all-time high in 2023,
surpassing DKK 2 billion.
FORWARD-LOOKING STATEMENTS
Topsøe Holding Group’s financial reports, whether in
the form of annual reports or interim reports, as well
as any presentations based on such financial reports,
and any other written information released, or oral
statements made, to the public based on this annual
report or in the future on behalf of Topsøe Holding
Group, may contain forwardlooking statements. These
forward-looking statements are based on current
plans, estimates and projections. By their very nature,
forwardlooking statements involve inherent risks and
uncertainties, both general and specific, which may be
outside Topsøe Holding Group’s influence, and which
could materially affect such forward-looking state-
ments. Topsøe Holding Group cautions that a number
of factors, including those described in the risk
management part of this report, could cause actual
results to differ materially from those contemplated in
any forward-looking statements.
TOPSØE HOLDING A/S ANNUAL REPORT 2022 MANAGEMENT REVIEW
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CONTENTS
COMMITTED TO BE
A SUSTAINABLE BUSINESS
Global efforts to limit climate change need to accel-
erate for the world to achieve the goals of the Paris
Agreement. We want to be a leader in technologies
that help to limit climate change. This means helping
our customers reduce their greenhouse gas emissions
with our leading technologies, as well as leading the
way through our company behavior. We’ve built a solid
foundation throughout our organization to incor-
porate sustainability across material environmental,
social, and governance (ESG) topics. We capture this
in our Sustainability Framework. This defines what
we see as the fundamentals of responsible business
conduct as well as our strategic imperatives and the
commitments we make, from reducing emissions to
promoting circular product design.
ENVIRONMENT
We’re committed to being responsible in how we
manage our impacts on the environment throughout
our value chain. We use our strong scientific foun-
dation to develop the best products in the most
responsible way. We continuously strive to minimize
the potential negative impact on the environment
from our production. We conduct our daily operations
in an environmentally sound manner, ensuring safe
handling of chemicals and a continuous reduction of
waste, emissions, and resource consumption. Require-
ments of our environmental management systems
(ISO14001 and RC14001) and quality (ISO9001)
within production drive continuous efficiency
improvements.
Ambitious new climate commitments
In 2022, we took a leap forward in our climate
commitments and action. We set ambitions for
enabling reduce our customers’ greenhouse gas emis-
sions by 16 million tonnes. We also announced our
net-zero 2040 target for our entire value chain, which
is now validated by the Science Based Target initiative
(SBTi). And we received our first Carbon Disclosure
Project (CDP) rating, a B-, as well as engaging with
more than 200 suppliers on decarbonizing our value
chain.
Managing emissions
Reducing emissions in our value chain is a strategic
priority for us. We manage emissions to continuously
reduce our negative impact on the environment and
human health. We’re developing management systems
for capturing the data to support these improvement
activities and help us report our progress in a trans-
parent and verifiable way. In 2022, like many other
companies, we had to develop contingency plans
in case natural gas supplies in Europe and Denmark
were restricted or halted altogether. Finding ways to
maintain energy supply and business continuity has
taken priority over activities to reduce carbon emis-
sions in our operations. The solutions we’ve found
have meant redesigning and building out operational
processes, and applying for extra permits to use LNG,
LPG and fuel oil. Unfortunately, these solutions are
more carbon-intensive than the natural gas they might
replace. But we’ve calculated the potential increase as
not material. This step is necessary to protect business
continuity, but it doesn’t change our commitment to
net zero in our own operations by 2030.
Topsøe Holding A/S has three subsidiaries, out of which two are Danish. One of these, Topsoe A/S, is required to
report on sustainability according to section 99 a of the Danish Financial Statements Act. Most of Topsøe Holding
Group's activities take place in Topsoe A/S, which is where the risks but also opportunities within sustainability
resides. Consequently, the following description of Topsøe Holding Group's contribution to sustainability is based
on activities and results occurred in Topsoe A/S.
TOPSØE HOLDING A/S ANNUAL REPORT 2022 MANAGEMENT REVIEW
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CONTENTS
Reducing greenhouse gas emissions
We set out to reduce our operational greenhouse gas
(GHG) emissions (scope 1 and 2) by 25% in 2022. We
had to delay this to be able to focus on making sure of
a stable energy supply to the site. To meet our 2022
target, we decided to accelerate investment in renew-
able energy. This meant we achieved our transition to
more than 54 % renewable electricity two years ahead
of the initial plan. Lower production volume has also
meant we reduced our scope 1 and 2 GHG emissions
in 2022. In 2022, we focused on developing a detailed
plan to decarbonize our value chain. To address our
upstream scope 3 emissions, which cover 70% of our
total emissions (baseline 2020), we engaged with key
suppliers, accounting for about 80% of our suppliers’
GHG footprint, to partner with us in becoming net
zero.
RESOURCE EFFICIENCY
Reducing energy use from our operations and contrib-
uting to climate change solutions are critical business
priorities. Danish operations and R&D consume energy
from the Danish grid at a constant rate from year to
year. We use surplus heat from our production sites
where we can in other processes at our sites. The
scarcity of fresh water resources is an important issue
of our business. For this reason, we need to ensure
that we use water wisely and sustainably in the years
to come. Our two production sites in US and Denmark
are both operating in low-medium water risk areas
according to World Resource Institute Aqueduct water
risk atlas.
Managing waste
We work continuously to manage resources better
by optimizing production processes. We evaluate all
material fractions for possible internal or external use,
or, where we can’t recycle, for authorized disposal.
In all cases, authorized contractors transport and
process the material to make sure it’s handled in
an efficient, safe, and compliant way. We see large
economic and environmental opportunities for reuse
and recycling options to avoid landfilling. This is
something we continuously strive to optimize in our
production and most of the waste we generate is
sent to recovery rather than landfill. In 2023, we will
develop global targets for reduction of waste across
our operations.
Resilience in mineral sourcing
Minerals and metals are essential to many of today’s
rapidly growing clean energy technologies, including
ours. So demand for these materials will grow quickly
as the transition to clean energy gathers pace, and
we’ll be part of that. We continuously assess the
resilience of our supply chain, particularly when it
comes to single-source suppliers, critical raw mate-
rials constraints, and geopolitical uncertainties. In
2022, like most global chemical companies, we
were affected by market uncertainties in the wake
of Russia’s invasion of Ukraine. But our proactive
sourcing practices mitigated any severe negative
consequences, and we were able to navigate uncer-
tainties without any major impact on our production.
We believe that we, our customers and society benefit
from exploring and developing circular business
models that treat spent catalysts, as well as other
end-of-life products, as secondary resources and not
waste. Currently, we reactivate selected spent hydro-
treating catalysts through our ReFRESHTM process
to restore up to 95% of fresh catalyst activity. This
process is significantly more sustainable than recy-
cling end-of-life catalysts.
Managing chemical footprint
Hazardous materials are inherent in our products. If
we don’t manage them properly, they can pose a risk
to the environment and people’s health. This is why
we’re committed to handling hazardous materials in
a safe and compliant way. We evaluate all chemical
substances we use to create a hazard classification
according to the criteria of the Globally Harmonized
System of Classification and Labelling of Chemicals
(GHS). Our catalysts are mixtures and classified in line
with GHS criteria. All chemicals and products classified
as carcinogen, mutagen, or reprotoxic (CMRs) have
high priority for handling and precautionary measures.
We register all substances in line with regulations. We
also continuously monitor and implement all relevant
regulatory requirements and comply with all applicable
regulations and requirements. Employees, customers,
contractors, and others handling our products
always have the latest correct information they need
to mitigate any chemical risks associated with our
products. This includes Safety Data Sheets (SDS),
detailed procedures, workplace instructions, check-
lists, communication about hazards and safe handling,
training, and monitoring programs. We strive to mini-
mize the use of hazardous chemicals where feasible.
Throughout the R&D process, from raw material and
intermediates in production to the final product, we
identify and mitigate potential hazards and risks where
possible before making products commercially avail-
able. Often, though, the hazardous materials play a
key role in the products’ performance and aren’t easy
to replace with less hazardous alternatives.
TOPSØE HOLDING A/S ANNUAL REPORT 2022 MANAGEMENT REVIEW
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CONTENTS
Health, safety and security
We aspire to ‘Zero Harm’ for colleagues as well as
our contractors, customers, and the communities
we work with. This encompasses excellence in the
Health, Safety, Security and Environmental (HSSE)
aspects of our products and services. Complying
with regulations is our license to operate. In 2022, we
started training all employees to act as ‘Zero Harm
Leaders’, which enables us to create a shared under-
standing of key risks in all areas of our operations,
as well as a shared approach to managing them. A
key part of progressing towards HSSE excellence is
managing important risks in all aspects of operations.
We identify top risks in manufacturing plants and
R&D, develop action plans to reduce them, and review
these plans regularly. In 2022, we put extra focus on
recording observations and near-misses to boost risk
awareness and learning. We also launched our SAP
EHS module as the system that captures all reported
incidents and observations. Managing risks related to
chemical exposures is one of our highest priorities. We
train employees to work safely with chemicals using
detailed procedures, workplace instructions, check-
lists, communication about hazards and safe handling,
training, and monitoring programs. A key focus area
for HSSE is safety for our travelling employees working
at customer sites. We have specific programs that
define the safe work environment we expect our
customers to provide for our people. In 2022, we
also optimized and simplified our travel and security
process to give us more oversight of travel to high-risk
destinations. And we strengthened our contractor
safety program, which includes risk assessment and
mandatory training for all on-site contractors. We
continued to monitor COVID-19 cases throughout
2022. We took a precautionary approach, always
assessing risks and operational situations individually,
prioritizing according to business-critical needs and
geographical contexts, and complying with recom-
mendations from local authorities.
Employee engagement and well-being
A fair, equal, and respectful workplace creates a solid
foundation for engagement and well-being for our
employees. We do our utmost to provide excellent
working conditions in our global business. Employees
have the right to join labor unions, and we offer fair
working hours and remuneration, flexibility and social
benefits. As a company undergoing a major transi-
tion, employees’ engagement and well-being remain
high priorities for us. In 2022, we introduced a mental
well-being program that gives our employees tools
to handle changes and challenges, and deal with
thoughts and emotions in a constructive and healthy
way. We made this mandatory for all leaders, and then
offered it to all employees. By the end of 2022, 202
leaders and 1020 employees had signed up to the
course. Our global employee engagement surveys,
TopsoeVoices, are established feedback tools, which
we use to involve employees in shaping our workplace
by giving input on their engagement and well-being.
We’ve seen a high participation rate of more than 87%
across our two annual surveys. We were thrilled to see
that engagement among our employees was 76% in
November 2022 - in line with our target to achieve a
top 25% score in the annual employee engagement
survey for our benchmark by 2024. In Denmark, we
also maintain management-employee dialog through
Works Councils. In 2023, we’ll introduce a new
onboarding program for all new Topsoe employees
with the objective of creating a sense of belonging
from the start.
Developing our employees
Giving employees ample opportunity to continuously
develop and build new skills is key to maintaining an
engaging working environment. It also helps us to
attract and hold on to the sharpest minds. This is
especially important in the current job market and
as we set out to deliver on our vision to become
a key player in the green transition. In 2022, we
introduced My Development for all employees. This
program includes mandatory employee-leader talks,
personal development plans, a development toolbox,
and access to extensive online learning opportuni-
ties through LinkedIn Learning. In 2022, we rolled
out Topsoe’s Leadership Foundation to establish a
common language for leadership in Topsoe and to
set clear expectations to our leaders. For mid-level
managers, we launched our “Go Lead” program - a
program that builds on Topsoe’s Leadership Founda-
tion and develops the personal leadership capabilities
needed to drive change.
Safeguarding human rights
We respect all human and labor rights, as defined
in the Universal Declaration of Human Rights, the
International Covenant on Civil and Political Rights,
the International Covenant on Economic, Social and
Cultural Rights, and the International Labor Organ-
ization’s Declaration on Fundamental Principles and
Rights at Work. Our policies and procedures make
sure we mitigate any negative impact on human rights.
As a member of the UN Global Compact, respect for
human rights is embedded in our commitment to
act as a responsible business. Our responsibilities go
beyond our own employees, and we’re dedicated to
safeguarding the rights of people in our business rela-
tionships, including customers, contractors, workers
in our supply chain, our neighboring communities,
and others. We conduct human rights due diligence
in line with the United Nations Guiding Principles on
Business and Human Rights. We make sure to identify
and assess any actual and potential negative impact,
address and mitigate these risks, and provide remedy
TOPSØE HOLDING A/S ANNUAL REPORT 2022 MANAGEMENT REVIEW
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CONTENTS
to anyone affected. Rights holders have access to
our established grievance mechanism, the → Topsoe
Compliance Hotline.
In 2022, we conducted a human rights assessment
across the business, engaging broadly with internal
stakeholders. The assessment, reviewed by an
external human rights expert, was a first step toward
developing a human rights framework. It gives us an
in-depth understanding of our salient human rights
impacts and helps us take appropriate action where
the risk to people is highest. Our ambition is to main-
tain and improve a solid foundation for our human
rights due diligence, also considering coming EU
legislation.
Topsoe’s Code of
Conduct → Read more
Topsoe's Compliance
Hotline → Read more
TOPSØE HOLDING A/S ANNUAL REPORT 2022 MANAGEMENT REVIEW
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CONTENTS
Topsoe compliance hotline
The Topsoe Compliance Hotline is an online platform
where people can report concerns in line with the
EU Whistleblower Directive 2021. These concerns
include discrimination, health and safety violations,
threats to the environment, theft, bribery, fraud, leaks
of confidential information, and other grave breaches
of laws or our Code of Conduct and Supplier Code
of Conduct. The hotline gives people inside and
outside our business a secure and confidential way
to report without fear of retaliation, which they can
use anonymously if they choose. The hotline, admin-
istered by a third party, offers end-to-end encrypted,
two-way data transmission between us and the
person reporting a concern. We strictly prohibit retal-
iation (intentional unfair treatment) against anyone
for reporting a concern to us in good faith. Hotline
reports go to trained internal or external investiga-
tors, depending on their complexity and severity as
described in our compliance investigation procedure.
In 2022, we carried out a global internal campaign
to raise awareness of the hotline. To make it easier to
access, we’ve updated the platform so people can use
it from devices like smartphones.
Anti-corruption and fair competition
We never tolerate any type of corruption, bribery,
fraud or anti-competitive behavior. Our anti-cor-
ruption compliance program and third-party due
diligence processes govern how we interact with our
customers, agents, suppliers and other third parties
to mitigate the risk of inadvertently contributing to
potential or actual corrupt or anti-competitive prac-
tices. In 2022, we reviewed the program’s effective-
ness and identified areas for further development as
we prepare to enter a new market (Power to X/SOEC)
as a leading player.
Third-party assurance and compliance due diligence
To mitigate our exposure to legal and reputational risk
through our interactions with third parties, we perform
compliance due diligence on certain business partners
using a risk-based approach. This lets us implement
mitigating measures to reduce our compliance expo-
sure and identify any interactions that can’t happen
because we can’t mitigate the risk they entail. In 2022,
we continued to integrate select sustainability/ESG
parameters into our due diligence processes and risk
matrices. This gives us a holistic view of thirdparty
risks and enables us to comply with upcoming EU
legislation, such as the EU Taxonomy and the Directive
on Corporate Sustainability Due Diligence. In 2023,
we’ll launch an updated third-party risk matrix aligned
to our evolving process for professionalizing enter-
prise risk management.
Responsible sourcing
We take extra care to make sure we’re choosing the
right suppliers, respecting human rights, protecting
data, and guarding business continuity. We have
more than 500 global raw materials and hardware
suppliers and 2,500 suppliers of indirect materials and
services like IT services, facility management, profes-
sional services and freight. We take a responsible and
balanced approach to our supplier base and look to
integrate commercial risk and quality aspects, as well
as social, environmental and ethical responsibility
when choosing our suppliers. We follow global stand-
ards and comply with legislation, including the EU
Conflict Mineral Regulation. We’ve established a due
diligence system based on the OECD Due Diligence
Guidance for Responsible Supply Chains of Minerals
from Conflict-Affected and High-Risk Areas, which is
guided by our Responsible Minerals Sourcing Policy.
We expect all suppliers to follow our Supplier Code of
Conduct. As of 2022, we risk assess all new suppliers
and, based on the outcome, screen them through a
sustainability self-assessment. If serious issues remain,
we audit the supplier. We also updated our Supplier
Code of Conduct to reflect increased requirements
and expectations toward our suppliers, especially on
decarbonization in light of our net zero target. We
want close and long-term engagement with our key
suppliers, as this is the best foundation for a strong
and ethical supply chain.
TOPSØE HOLDING A/S ANNUAL REPORT 2022 MANAGEMENT REVIEW
11
CONTENTS
!
RISK
MANAGEMENT
TOPSOE A/S' RISK
MANAGEMENT PROCESS
IDENTIFY KEY RISKS
RISK ASSESMENT AND PRIORIZATION
MONITOR, VALIDATE AND REPORT
RISK MITIGATION PLANS
RISK OWNERS ASSIGNED
Managing risks thoroughly and systematically is vital to how we
create and protect value over the short, medium, and long term.
Scenario and risk assessments are part of our stra-
tegic planning process. They include analyzing market
dynamics as well as economic and political develop-
ments that present opportunities or threats for our
business. We’re exposed to a variety of risks linked to
our business operations. As well as strategic and oper-
ational risks, there are financial risks, such as interest
rates, exchange rates, commodity prices, credit risk,
and insurance risk.
The Group use an enterprise risk management
approach to identify, quantify and mitigate risks that
could have an adverse impact on our operations. Each
year, we identify and assess risks and agree actions
to mitigate them with management teams across
the organization. In Topsoe A/S the risks identified as
most critical are assigned to a member of the Lead-
ership Team who becomes owner of the risk. This role
includes identifying and initiating mitigating actions.
The Senior Leadership Team, Audit Committee, and
the Board of Directors oversee progress in mitigating
the identified risks.
!
TOPSØE HOLDING A/S ANNUAL REPORT 2022 MANAGEMENT REVIEW
13
CONTENTS
CHALLENGES IN DELIVERING ON THE ENERGY TRANSITION
GEOPOLITICAL AND ECONOMIC INSTABILITY CYBER-RISK / CYBER-ATTACK
RISK DESCRIPTION We expect global energy consumption to grow considerably
over the coming decades. Our traditional core business plays
a key role in ensuring energy-efficient production of the
world’s chemicals and fuels. Already, we provide chemical and
fuel producers with solutions for energy-efficient production.
At the same time, we see a push to accelerate the transition
to renewable energy carriers and new technologies. While
a significant part of our technical and catalytic solutions is
based on fossil fuel feedstock (notably natural gas), we also
work intensively with an increasingly wide range of non-fos-
sil-based technologies in green hydrogen, green ammonia,
eMethanol, and eFuels. Our decision to build an SOEC factory
is the most notable step taken in 2022 to address this risk.
As focus on the energy transition is still relatively new, there’s
a risk that we don’t fully unlock its potential due to internal or
external factors.
We operate globally, including in regions exposed to geopolit-
ical and macroeconomic instability and risks that could affect
demand for our technologies and our ability to deliver our
solutions to market. Geopolitical instability may also impact
our ability to source raw materials, energy and other compo-
nents used in our supply chain. Russia’s invasion of Ukraine is
an example of this risk materializing.
In recent years, several major cyber-attacks have been
launched against companies around the world, and we see
growth in serious cyber operations closer to our business.
As a knowledge-based and increasingly digitized company,
we are exposed to information security risks. The threat of
cyber-attacks is increasing and we are continuously moni-
toring the area to keep digital environments stable and
secure.
IMPACT If the risk materializes, the consequence for us would be that
competitors take over the core and new markets and that we
don’t fulfill our ambitions.
A geopolitical conflict or major macroeconomic disruption
could reduce our ability to produce and/or sell our solutions
in one or more markets . It could also result in unfavorable
market conditions for new projects. This, in turn, could signifi-
cantly affect our short and long-term financial results.
Should the risk materialize through a major cyber-attack, it
could lead to severe business disruption and/or loss of confi-
dential information.
MITIGATING ACTIONS → Maintain internal process and system to execute, monitor,
and follow up on strategic initiatives.
→ Develop the right skills and capabilities.
→ Regularly evaluate the strategy and related roadmaps.
→ Monitor political developments in global regions as well as
key markets, and liaise with external stakeholders to iden-
tify and implement supplementary mitigating actions.
→ Secure proper contractual frameworks to mitigate expo-
sure to potential and emerging risks.
→ Consider alternative production scenarios and closely
monitor raw material prices.
→ Secure proper payment securities.
→ Deliver on our Security Improvement program, which will
significantly improve our position on cyber-attacks.
→ Engage in Cyber Communities via the Danish Cyber
Defense group and Istari-Global (part of Temasek).
→ Address information security as an integral part of all
future IT projects.
TOPSØE HOLDING A/S ANNUAL REPORT 2022 MANAGEMENT REVIEW
14
CONTENTS
INCREASING COMPLEXITY IN REGULATORY CHEMICALS
LEGISLATION
OPERATION DISRUPTION
TRADE CONTROLS AND BUSINESS ETHICS RISKS
RISK DESCRIPTION Updates to legislation related to chemicals may result in
restrictions on the use of some substances we rely on.
Several factors, including the COVID-19 pandemic and the
gas price increase, continue to affect the global economy and
the world’s supply chains. While COVID-19 has challenged
our supply chain at times, we haven’t experienced major
disruptions such as supply failures, and we’ve been able to
continue production more or less as usual.
Our supply chain and customer base are global. This leads to
a risk that we conduct business with sanctioned or otherwise
restricted counterparties, or in countries subject to trade
prohibitions. The global nature of our business also entails the
risk that we, directly or via intermediaries, win or retain busi-
ness or other advantages through corrupt practices.
IMPACT If the risk materialized, there could be an impact on the
manufacturing or the use of some of our products. Updates
to the legislation can also give a competitive advantage to
some of our products.
Disruption in raw material supply or in access to energy could
mean production would not happening as planned, with
delays to projects or deliveries.
Actual or suspected non-compliance with sanctions, export
control and anti-corruption laws and regulations could lead
to significant reputational damage, and actual breaches
could also result in monetary penalties, contract termination
and liability for breach of contract, loss of trade privileges
and access to major markets, and imprisonment of individual
company directors.
MITIGATING ACTIONS → Closely monitor the legislative process. → Consolidate emergency preparedness plans.
→ Secure delivery agreements.
→ Increase inventory levels.
→ Continue compliance due diligence on agents, other
intermediaries, business partners located in high-risk
jurisdictions, and other high-risk counterparts, in line with
our global third party assurance policy.
→ Maintain awareness and training among internal stake-
holders of their roles in ensuring our compliance.
→ Maintain updated trade controls and anti-corruption risk
assessments, based on our operational activities, changes
in applicable laws and enforcement activity.
→ Continue promoting the use of the Topsoe Compliance
Hotline to proactively address any practices that could
lead to breach of laws and regulations.
TOPSØE HOLDING A/S ANNUAL REPORT 2022 MANAGEMENT REVIEW
15
CONTENTS
INABILITY TO ATTRACT, DEVELOP, AND RETAIN TALENT
TO DRIVE TRANSFORMATION
INFRINGEMENT OF INTELLECTUAL PROPERTY
RISK DESCRIPTION Our employees and their problem-solving skills are essential
to our success. This is all the more apparent now that we’re
engaged in strategic transformation.
We invest a significant portion of our revenue in research and
development. Patents and, more broadly, intellectual property
are an important part of our business. The IP risk has two
sides – the risk of someone infringing our Topsoe IP (patents,
trademarks, trade secrets) or someone accusing Topsoe of
infringing their IP.
IMPACT Should key talents leave Topsoe, projects and development
activities could be delayed and the growth we expect could
be set back.
f our IP was lost or infringed, we could lose business and
revenue opportunities, and we would have to spend signifi-
cant resources defending our IP.
If Topsoe was accused of infringing third party IP, we could
be forced to stop producing and selling products and tech-
nologies, and it could even lead to contractual indemnities,
economic penalties or reputational damage.
MITIGATING ACTIONS → Define our unique employee value proposition.
→ Provide development opportunities for leaders and
employees.
→ Map technology leaders in the organization.
→ Run an annual talent review.
→ Maintain a dedicated and highly qualified IP department.
→ Regular updates of the IP strategy.
→ Ensure that FTO (Freedom to Operate) analysis is inte-
grated in the product development process and evaluated
before launch of new products and technologies.
→ Ensure proper contractual regulation of IP in relevant
agreements.
TOPSØE HOLDING A/S ANNUAL REPORT 2022 MANAGEMENT REVIEW
16
CONTENTS
FINANCIAL STATEMENTS
CONSOLIDATED FINANCIAL
STATEMENTS OF
TOPSØE HOLDING GROUP
Consolidated financial statements
Income statement 18
Statement of comprehensive income 18
Balance sheet 19
Cash flow statement 20
Statement of changes in equity 21
Notes 23
Financial statements of Topsøe Holding A/S
Income statement 55
Balance sheet 56
Statement of changes in equity 57
Notes 58
Statements
Statement by the Executive Management and
Board of Directors on the annual report 63
Independent auditor’s report 64
TOPSØE HOLDING A/S ANNUAL REPORT 2022
17
CONTENTS
CONSOLIDATED FINANCIAL STATEMENTS
INCOME STATEMENT STATEMENT OF COMPREHENSIVE INCOME
CONSOLIDATED
INCOME STATEMENT
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
DKK million Note 2022 2021
Revenue 2.1 6,845 6,225
Other operating income 2.2 65 72
Purchased equipment for contract work -417 -539
Raw materials and consumables used -2,399 -1,782
Other external expenses -1,340 -1,095
Gross profit 2,754 2,881
Staff costs 2.3 -1,826 -1,661
EBITDA 928 1,220
Depreciation, amortization and impairment losses -354 -336
EBIT before special items 574 884
Special items 2.4 -43 -26
EBIT after special items 531 858
Result of investments in joint ventures and associated companies 3.4 -207 -222
Financial income 4.4 370 260
Financial expenses 4.4 -428 -130
Profit before tax 266 766
Ta x 2.5 -76 -181
Profit from continuing operations 190 585
Profit from discontinuing operations 5.8 0 10
Net profit 190 595
Attributable to:
Owners of the parent company 15 320
Non-controlling interests 175 275
Net profit 190 595
DKK million Note 2022 2021
Net profit 190 595
Foreign currency translation adjustment 164 210
Fair value adjustment on cashflow hedges 4 0
Other 0 1
Items that will be reclassified to the income statement 168 211
Fair value adjustment of investments in other enterprises 0 -8
Actuarial adjustments on pension obligations 10 47
Tax on this 2.5 -2 -11
Items that will not be reclassified to the income statement 8 28
Other comprehensive income 176 239
Total comprehensive income 366 834
Continuing operations 366 824
Discontinuing operations 0 10
Total comprehensive income 366 834
Attributable to:
Owners of the parent company 190 668
Non-controlling interests 176 146
Total comprehensive income 366 834
TOPSØE HOLDING A/S ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS
18
CONTENTS
BALANCE SHEET
CONSOLIDATED BALANCE SHEET
DKK million Note 2022 2021
Assets
Intangible assets 3.1 3,497 3,469
Property, plant and equipment 3.2 2,619 2,047
Right-of-use assets 3.3 439 477
Deferred tax asset 2.5 7 11
Other non-current assets 3.4 1,612 1,542
Non-current assets 8,174 7,546
Inventories 3.5 2,440 1,649
Trade receivables 3.6 1,490 1,232
Contract assets 3.7 293 270
Tax receivable 98 68
Other receivables and prepayments 3.8 287 307
Securities 3.9 1,512 1,711
Cash 493 886
Current assets 6,613 6,123
Assets 14,787 13,669
DKK million Note 2022 2021
Equity and liabilities
Share capital 4.1 2,200 2,200
Share premium 4.1 0 0
Reserves 304 137
Retained earnings 6,013 6,126
Equity attributed to the owners of the parent company 8,517 8,463
Non-controlling interests 1,013 955
Total equity 9,530 9,418
Pension obligations 3.10 32 37
Deferred tax 2.5 555 522
Provisions 3.11 211 175
Borrowings 4.2 329 452
Lease liabilities 4.2 423 445
Other payables 3.12 103 105
Non-current liabilities 1,653 1,736
Borrowings 4.2 191 134
Lease liabilities 4.2 60 68
Contract liabilities 3.7 1,923 1,179
Trade payables 955 568
Other payables 3.12 444 530
Deferred income 31 36
Current liabilities 3,604 2,515
Liabilities 5,257 4,251
Equity and liabilities 14,787 13,669
TOPSØE HOLDING A/S ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS
19
CONTENTS
CASH FLOW STATEMENT
CONSOLIDATED CASH FLOW STATEMENT
DKK million Note 2022 2021
EBITDA 928 1,220
Special items 2.4 -26 -26
Adjustments for non-cash items 5.4 69 85
Change in working capital 5.4 20 -707
Interest received, etc. 72 117
Interest paid, etc. -18 -99
Corporate income tax paid -57 -126
Cash flows from operating activities 988 464
- of which continuing operations 988 464
Purchase of intangible assets -80 -65
Purchase of property, plant and equipment -787 -334
Sale of property, plant and equipment 3 1
Purchase of non-current financial assets -187 -65
Sale of non-current financial assets 2 0
Purchase of current financial assets -55 -50
Sales of current financial assets 0 150
Dividend received 129 33
Cash flows from investing activities -975 -330
DKK million Note 2022 2021
Raising of borrowings 58 0
Repayment of borrowings -122 -213
Purchase of treasury shares -151 0
Installments on lease liabilities -81 -75
Received share capital 180 3
Dividend paid -314 -174
Cash flows from financing activities -430 -459
Cash flows for the year -417 -325
Cash and cash equivalents at January 1 886 1,188
Cash flows for the year -417 -325
Foreign currency translation adjustments 24 23
Cash and cash equivalents at December 31 493 886
Cash 493 886
Cash and cash equivalents at December 31 493 886
TOPSØE HOLDING A/S ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS
20
CONTENTS
STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
DKK million
Share
capital
Share
premium
Foreign
currency
translation
reserve
Reserve for
financial
assets
measured
at fair value
Hedge
reserve
Total
reserves
Retained
earnings Total
Non-
controlling
interests
Total
equity
Equity at January 1, 2022 2,200 0 143 -6 0 137 6,126 8,463 955 9,418
Net profit 0 0 0 0 0 0 15 15 175 190
Foreign currency translation adjustment 0 0 164 0 0 164 0 164 0 164
Fair value adjustment of cash flow hedges 0 0 0 0 3 3 0 3 1 4
Other 0 0 0 0 0 0 8 8 0 8
Other comprehensive income 0 0 164 0 3 167 8 175 1 176
Comprehensive income 0 0 164 0 3 167 23 190 176 366
Capital increase 0 0 0 0 0 0 144 144 62 206
Purchase of own shares 0 0 0 0 0 0 -110 -110 -47 -157
Sale of own shares 0 0 0 0 0 0 6 6 0 6
Dividend paid to ownwers 0 0 0 0 0 0 -180 -180 0 -180
Dividend paid to non-controlling interest 0 0 0 0 0 0 0 0 -134 -134
Employee Share Program - value of employee services 0 0 0 0 0 0 2 2 1 3
Share-based payments 0 0 0 0 0 0 2 2 0 2
Transactions with owners 0 0 0 0 0 0 -136 -136 -118 -254
Equity at December 31, 2022 2,200 0 307 -6 3 304 6,013 8,517 1,013 9,530
TOPSØE HOLDING A/S ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS
21
CONTENTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
DKK million
Share
capital
Share
premium
Foreign
currency
translation
reserve
Reserve for
financial
assets
measured
at fair value
Hedge
reserve
Total
reserves
Retained
earnings Total
Non-
controlling
interests
Total
equity
Equity at January 1, 2021 2,200 0 -37 0 0 -37 5,886 8,049 710 8,759
Net profit 0 0 0 0 0 0 320 320 275 595
Transfer during the year 0 0 179 0 0 179 0 179 31 210
Fair value adjustment of investments in other enterprises 0 0 0 -6 0 -6 0 -6 -2 -8
Adjustment to prior year 0 0 0 0 0 0 -4 -4 -2 -6
Other 0 0 1 0 0 1 25 26 11 37
Other comprehensive income 0 0 180 -6 0 174 21 195 38 233
Comprehensive income 0 0 180 -6 0 174 341 515 313 828
Increase in non-controlling interest 0 0 0 0 0 0 -3 -3 3 0
Dividend paid to ownwers 0 0 0 0 0 0 -102 -102 0 -102
Dividend paid to non-controlling interest 0 0 0 0 0 0 0 0 -72 -72
Share-based payments 0 0 0 0 0 0 4 4 1 5
Transactions with owners 0 0 0 0 0 0 -101 -101 -68 -169
Equity at December 31, 2021 2,200 0 143 -6 0 137 6,126 8,463 955 9,418
TOPSØE HOLDING A/S ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS
22
CONTENTS
NOTES
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
1 Basis of reporting 24
1.1 Basis of preparation 24
1.2 Changes in accounting policies and
new standards 25
1.3 Key accounting estimates and judgements 25
2 Income statement 26
2.1 Revenue 26
2.2 Other operating income 27
2.3 Staff costs 27
2.4 Special items 28
2.5 Income tax and deferred tax 28
3 Operating assets and liabilities 30
3.1 Intangible assets 30
3.2 Property, plant and equipment 32
3.3 Right-of-use assets 34
3.4 Other non-current assets 35
3.5 Inventories 38
3.6 Trade receivables 38
3.7 Contract assets and liabilities 39
3.8 Other receivables and prepayments 40
3.9 Securities 40
3.10 Pension obligations 41
3.11 Provisions and contingent liabilities 43
3.12 Other payables 44
4 Capital structure and financial items 45
4.1 Equity and dividend 45
4.2 Borrowings and lease liabilities 45
4.3 Financial assets and liabilities 46
4.4 Financial income and expenses 48
5 Other notes 49
5.1 Share-based payment 49
5.2 Fee to auditors appointed at
the general meeting 50
5.3 Related parties 50
5.4 Cash flow specifications 51
5.5 Commitments 51
5.6 Events after the balance sheet date 52
5.7 Group enterprises 52
5.8 Discontinuing operations 53
TOPSØE HOLDING A/S ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS
23
CONTENTS
INTRODUCTION
The financial statements for 2022 comprise the consolidated
financial statements of Topsøe Holding A/S and its subsidi-
aries.
The consolidated financial statements have been prepared
in accordance with the International Financial Reporting
Standards (IFRS), as adopted by the EU, and further require-
ments in the Danish Financial Statements Act for class C large
companies.
The financial statements are presented in Danish kroner (DKK)
and rounded to the nearest million, unless otherwise stated.
The Board of Directors considered and approved the 2022
Annual Report of Topsøe Holding A/S on March 7, 2023. The
Annual Report will be submitted to the shareholders of Topsøe
Holding A/S for approval at the Annual General Meeting on
April 20, 2023.
BASIS OF MEASUREMENT
The consolidated financial statements have been prepared on
the historical cost basis, except for derivatives and invest-
ments in other enterprises, which are measured at fair value.
The accounting policies have been applied consistently for the
financial year and for the comparative figures.
BASIS OF CONSOLIDATION
The consolidated financial statements comprise the parent
company, Topsøe Holding A/S, and all subsidiaries controlled
by Topsøe Holding A/S.
The consolidated financial statements have been prepared by
summarizing the financial statements of the parent company
and the subsidiaries, which have been prepared in accordance
with the Group’s accounting policies. Intra-group balances,
income, expenses, shareholdings, and dividends as well as
realized and unrealized gains and losses have been eliminated.
The non-controlling interests’ share of profit for the year and
of equity in subsidiaries, which not are fully owned, is included
as part of the Group’s profit and equity, but shown as separate
items.
FOREIGN CURRENCY
Functional currency
A functional currency is determined for each Group enterprise.
The functional currency is the currency used in the primary
economic environment in which the enterprise operates.
Foreign currency translation
On initial recognition, foreign currency transactions are
translated into the functional currency at the exchange rate
at the transaction dates. Exchange differences between
the exchange rates at the transaction date and the date of
payment are recognized in the income statement under finan-
cial income or expenses.
Monetary items in foreign currency are translated at the
exchange rates at the balance sheet date. The difference
between the exchange rates at the balance sheet date and
the transaction date is recognized in the income statement
under financial income or expenses.
Foreign currency translation differences arising on the trans-
lation of non-monetary items, such as investments in associ-
ated companies, are recognized directly in other comprehen-
sive income.
Recognition in the consolidated financial statements
On preparation of the consolidated financial statements, the
income statements of Group enterprises with a functional
currency other than Danish kroner are translated at the
exchange rate at the transaction dates and balance sheet
items are translated at the exchange rate at the balance sheet
date.
Foreign exchange differences arising on translation of the
opening equity at the exchange rate at the balance sheet date
and on translation of non-current intercompany balances
considered part of the net investment are recognized in other
comprehensive income under foreign currency translation
reserve.
Foreign exchange differences arising from the translation of
the income statement from the exchange rate at the transac-
tion dates to the exchange rate at the balance sheet date are
also recognized in other comprehensive income.
OTHER ACCOUNTING POLICIES
Purchased equipment for contract work
Purchased equipment for contract work comprises hardware
etc. related to engineering projects.
Raw materials and consumables used
Raw material and consumables used comprise raw materials
and consumables consumed to achieve revenue for the year.
Other external expenses
Other external expenses comprise expenses to external assis-
tance, premises and office expenses, sales and distribution
expenses, etc.
Deferred income
Deferred income comprises payments received in respect of
income in subsequent years related to government grants.
PRESENTATION
Cash flow statement
The cash flow statement is presented in accordance with the
indirect method.
Cash flows from operating activities are stated as EBITDA
adjusted for non-cash items change in working capital,
interest received and paid and paid corporate income tax.
Cash flows from investing activities comprise cash flows
from purchase and sale of non-current assets and received
dividend. Cash flows from financing activities comprise cash
flows from borrowings, purchase and sale of treasury shares,
installments on lease liabilities as well as payments to and
from shareholders.
Cash and cash equivalents comprise cash at hand and
deposits with financial institutions.
Materiality in financial reporting
In preparing the Annual Report, Management has sought to
improve the information value of the consolidated financial
statements, the notes to the statements and other meas-
ures disclosed by presenting the information in a way that
supports the understanding of the Group’s performance in
the reporting period which has resulted in immaterial classifi-
cations and changes.
This objective is achieved by presenting fair transactional
aggregation levels on line items and other financial infor-
mation, emphasizing information that is considered of
material importance to the user and making relevant rather
than generic descriptions throughout the Annual Report.
1 BASIS OF REPORTING
1.1 Basis of preparation
TOPSØE HOLDING A/S ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS
24
CONTENTS
All disclosures are made in compliance with the International
Financial Reporting Standards, the Danish Financial Statements
Act and other relevant regulations, ensuring a true and fair view
throughout the Annual Report.
Presentation of items and subtotals
The presentation of items and subtotals is based on separate
classification of material groups of similar items. In the income
statement, income and expense items are classified based on the
‘nature of expense’ method in accordance with IAS 1. Furthermore,
the use of special items is applied to improve the transparency and
understanding of the Group’s financial statements by separating
the ordinary activities of the Group from exceptional items.
Please refer to note 2.4 Special items for further information.
Five-year summary
The key figures and financial ratios have been calculated as follows:
Gross margin =
Gross profit × 100
Revenue
EBITDA margin =
EBITDA × 100
Revenue
EBIT before special
items margin
=
EBIT before special items × 100
Revenue
EBIT after special
items margin
=
EBIT after special items × 100
Revenue
Return on invested
capital
=
EBIT before special items × 100
Average invested capital
Equity ratio =
Equity at year-end × 100
Balance sheet total
Return on equity =
Net profit × 100
Average equity
Leverage =
Net interest-bearing debt
EBITDA
Earnings per share =
Profit from continuing operations
Average number of shares
The accounting policies are unchanged from last year.
Implementation of new standards, amendments, and
interpretations
Topsøe Holding adopts new IFRS standards, amendments
and interpretations (IFRICs) from the mandatory effective
date at the latest.
Amendments have been made to IFRS standards effective
for financial years beginning on or after 1 January 2022
including “IFRS 3 Business Combinations”, “IAS 16 Property,
plant and equipment” and “IAS 37 Provisions, contingent
liabilities and contingent assets” as well as the Annual
improvements 2018-2020 regarding IFRS 1, IFRS 9, IAS 41
and IFRS 16.
Topsøe Holding has assessed the effect of the amendments
and concluded that all amendments effective for financial
years beginning on or after 1 January 2022 are either not
relevant to Group or have no significant effect on the Finan-
cial Statements.
New standards, amendments, and interpretations adopted
but not yet effective
The IASB has issued new or amended standards and
interpretations that have not yet become effective and have
consequently not been implemented in the consolidated
financial statements for 2022. Topsøe Holding expects to
adopt the new accounting standards, amendments and
interpretations as they become mandatory. The following
new amendments could be of relevance to Group:
• IAS 1, Presentation of Financial Statements and Practice
Statement 2: The Amendment clarifies that the disclo-
sures of accounting policies are only required for material
line items. However, it is still permitted to disclose the
When preparing the consolidated financial statements,
Management is required to make several estimates and judge-
ments. These estimates and judgements are based on profes-
sional experience, historical data and other factors available
to Management. Actual results may differ from the amounts
estimated and judgements made, as more detailed informa-
tion becomes available. Accounting estimates and judgements
are continuously evaluated, and the effect recognized in the
financial statements.
The primary financial statement items for which more signifi-
cant accounting estimates and judgements are applied are:
Note
Significant
accounting estimates
and judgements
Nature of
accounting
impact
Impact of
estimate and
judgement
Determine
performance
obligation
Judgement
2.1 Revenue
Determine
recognition
method
Judgement
Estimate
total cost
to complete
Estimate
3.1 Goodwill
Estimate valuation of
Group enterprises
Estimate
3.4 Other
Investments
Estimate valuation of
Other Investments
Estimate
3.5 Inventories
Estimate
valuation
of inventory
Estimate
3.10 Provisions
and contingent
liabilities
Estimate
warranty
provisions
Estimate
Additional information of accounting estimates and judge-
ments are included in the relevant notes.
1.1 Basis of preparation
(continued)
1.2 Changes in accounting
policies and new standards
1.3 Key accounting
estimates and judgements
accounting policies for non-significant line items, if the
disclosures does not obscure the information provided by
the financial statement.
• IAS 8 Accounting Policies, Changes in Accounting Esti-
mates and Errors: The amendment introduces a new defi-
nition of accounting estimates: “Accounting estimates are
monetary amounts in financial statements that are subject
to measurement uncertainty”. The new definition empha-
sises that accounting estimates involves the utilisation of
measurement techniques and assumptions. This is made
to assist users of the financial statement to distinguish
between changes in accounting estimate and changes in
accounting policies.
The amendments will be effective for financial years beginning
on or after January 1 2023 and will be implemented when
they take effect. None of the above are currently expected
to have any significant impact on the consolidated financial
statements.
TOPSØE HOLDING A/S ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS
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CONTENTS
ACCOUNTING POLICIES
Revenue from contracts with customers is recognized in the
income statement when control of the goods or services has
been transferred to the customer, i.e. when goods or services
are delivered. Revenue is recognized exclusive of VAT and net
of discounts relating to sales.
Revenue from catalyst sales is recognized at a point in time
when control has been transferred.
Revenue from technology sales is recognized over time using
the percentage-of-completion method based on incurred
versus forecasted contract costs, which means that revenue
equals the selling price of the work completed for the year.
This method is applied when total revenue and cost in respect
of the contract and the percentage-of-completion at the
balance sheet date can be measured reliably, and it is prob-
able that economic benefits, including payments, will flow to
the Group.
The transaction price of a contract is allocated to perfor-
mance obligations, e.g. delivered catalyst and delivered
technology. Technology is considered to be one performance
obligation, since the deliveries are interlinked and work
together as a whole and not as distinct elements.
ACCOUNTING ESTIMATES AND JUDGEMENTS
Judgement is applied when determining if a contract for the
sale of technology or catalysts or a combination thereof,
involves one or more performance obligations.
Judgements are made by Management when determining if
a performance obligation is recognized as revenue over time
or at a point in time. The judgements relate to if there is an
alternative use of the assets sold and if there is an enforceable
right to payment throughout the contractual term.
The percentage-of-completion is determined on the basis of
the share of contract costs incurred compared to forecasted
contract costs. Forecasted costs are partly based on an esti-
mate which to a high degree is based on historical experience.
Expected income and costs of technology projects may be
adjusted gradually as projects are progressing and any uncer-
tainties are clarified.
DKK million 2022 2021
Revenue split on categories and recognition method
Revenue recognized at a point in time 5,090 4,362
Catalyst revenue 5,090 4,362
Revenue recognized at a point in time 84 192
Revenue recognized over time 1,671 1,671
Technology revenue 1,755 1,863
Total revenue 6,845 6,225
Backlog and previously recognized contract liabilities
Backlog, of which the majority is expected to be recognized in 2022 6,015 3,634
Revenue recognized that was included in the contract liability balance
at the beginning of the year 616 905
Revenue per region
EMEA 2,356 2,215
America 2,918 2,532
Asia Pacific 1,571 1,478
Total revenue 6,845 6,225
The Group’s revenue can be divided into two main categories:
catalyst sales and technology sales. Catalyst sales primary
comprise the sale of catalysts. Technology sales primary
comprise basic engineering design, license fee and hardware.
The majority of catalyst sales are paid after delivery with
typically 30-60 days of credit, but in certain situations the
Group receives prepayments. Technology sales are paid in
installments during the contract’s lifetime. The Group strives
to be cash flow positive on all technology contracts at any
time during project execution.
In 2022, the Group had revenue exceeding 10% of the total
revenue in the following countries:
US 1,986 DKK million (2021: 1,856 DKK million).
2.1 Revenue
2 INCOME STATEMENT
TOPSØE HOLDING A/S ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS
26
CONTENTS
ACCOUNTING POLICIES
Other operating income comprises income of a secondary
nature to the Group’s main activities, including government
grants provided for research projects and other services of
secondary nature.
Grants
Government grants are recognized when there is reason-
able assurance that the grants will be received. Government
grants received for research and development projects are
recognized as deferred income and systematically recog-
nized in other operating income in line with the cost. Grants
for the purchase of property, plant and equipment are offset
against the related property, plant and equipment.
ACCOUNTING POLICIES
Staff costs are recognized in the financial year in which the
employees render the related service. Costs related to long-
term employee benefits, e.g. share-based payments, are
recognized in the periods in which they are earned.
DKK million 2022 2021
Other operating income
Government grants 38 35
Other services 13 28
Other operating income 14 9
Total other operating income 65 72
DKK million 2022 2021
Staff costs
Wages, salary and other remuneration 1,576 1,414
Share-based payment 2 5
Pension costs - defined contribution plans 149 138
Pension costs - defined benefit plans 5 6
Social security cost and other staff costs 144 127
Total 1,876 1,690
Transferred to assets -50 -29
Total staff costs 1,826 1,661
Average number of employees 2,251 2,142
Remuneration to Senior Leadership Team and Board of Directors
Salary 70 51
Share-based payment 2 3
Pension 5 5
Severance pay 4 13
Total remuneration to Senior Leadership Team 81 72
Fee to Board of Directors 19 10
Total remuneration to Senior Leadership Team and Board of Directors 100 82
2.2 Other operating income 2.3 Staff costs
TOPSØE HOLDING A/S ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS
27
CONTENTS
ACCOUNTING POLICIES
Special items comprise exceptional income and costs
which by their nature are not related to the Group’s ordinary
operating activities . These are irregular and non-recurring
in nature. This includes costs related to significant organiza-
tional restructuring, etc.
ACCOUNTING ESTIMATES AND JUDGEMENTS
In the classification of special items, judgement is applied to
ensure that only exceptional items not associated with the
ordinary operations of the Group are included.
ACCOUNTING POLICIES
Tax for the year
Income tax comprises current tax for the year, changes in
deferred tax for the year as well as any adjustments to prior
years. Tax attributable to the profit for the year is recognized
in the income statement, whereas tax attributable to other
comprehensive income transactions is recognized through
other comprehensive income.
Current tax
Tax receivable and tax payable is recognized in the balance
sheet as tax calculated on the taxable income for the year
adjusted for tax on taxable income for previous years and for
prepaid tax.
Deferred tax
Deferred tax is measured using the balance sheet liability
method in respect of temporary differences between the
carrying amount and the tax value of assets and liabilities.
Deferred tax is not recognized in respect of goodwill, unless
it is deductible for tax purposes.
Deferred tax is measured on the basis of the tax rules and
tax rates of the relevant countries that will be effective under
current legislation at the balance sheet date on which the
deferred tax is expected to materialize as current tax.
Deferred tax assets, including the tax base of tax loss
carryforwards, are recognized as non-current assets at the
expected value of their utilization.
Deferred tax assets and tax liabilities are offset if the enter-
prise has a legally enforceable right to offset current tax
liabilities and tax assets or intends either to settle current tax
liabilities and tax assets on a net basis or to realize the assets
and liabilities simultaneously.
ACCOUNTING ESTIMATES AND JUDGEMENTS
Management applies judgements when recognizing and
measuring deferred tax assets. Deferred tax assets, including
the tax base of tax loss carryforwards, are recognized if it is
assessed that they can be utilized. This assessment is based
on business plans and knowledge of the business.
The Group is from time to time part of tax disputes. Manage-
ment assesses the likely outcome based on knowledge
available of the substance of the disputes, including opinions
from external tax experts.
DKK million 2022 2021
Special items
Restructuring cost -10 -26
Loss on debtors -12 0
Write-down of fixed assets and right-of-use assets -3 0
Other financial expenses -18 0
Total special items -43 -26
Line items impacted, if special items had been recognized in EBIT before special items
Other external expenses -17 0
Staff costs -5 -26
Depreciation, amortization and impairment losses -3 0
Financial expenses -18 0
Total special items -43 -26
Special items in 2022 comprise cost in connection with the closure of our business in Russia such as loss on receivables, write
down of assets including write down of trapped cash etc. Non-cash pa amounts to DKK 17 million. In 2021, the cost was
related to restructuring.
2.4 Special items 2.5 Income tax and deferred tax
TOPSØE HOLDING A/S ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS
28
CONTENTS
2.5 Income tax and deferred tax (continued)
DKK million 2022 2021
Income tax
Current tax for the year 46 121
Change in deferred tax for the year 37 57
Adjustments to prior years -7 3
Total income tax recognized in the income statement 76 181
Income tax recognized in other comprehensive income -2 -11
Total income tax recognized in comprehensive income 74 170
Tax on continuing operations 74 181
Tax on discontinuing operations 0 -11
Total income tax 74 170
Effective tax rate, %
Danish corporate tax rate 22.0 22.0
Non-deductible expenses 0.9 -2.6
Income not subject to tax -2.2 -2.3
Differences in foreign tax rates 4.3 -0.7
Adjustments relating to prior years -0.7 0.3
Other adjustments- -7.5 -2.6
Effective tax rate 16.8 14.1
The major impact of the change in effective tax rate from
2021 to 2022 is related to increased deduction on R&D
activities implemented by the Danish Government and
foreign tax rates.
DKK million Jan. 1
Foreign
currency
translation
adjustments
Tax for
the year
Tax for
previous
years
Tax on
equity Dec. 31
Deferred tax, 2022
Intangible assets and property, plant and equipment 129 2 27 0 0 158
Inventories 13 -1 -2 -4 0 6
Contract assets 380 0 34 2 0 416
Provisions -20 1 -2 0 2 -19
Other 9 -1 -20 0 -1 -13
Deferred tax at December 31, 2022 511 1 37 -2 1 548
Recognized as deferred tax asset -7
Recognized as deferred tax liability 555
Deferred tax at December 31, 2022 548
Of this, due after more than 1 year 319
Not recognized deferred tax assets regarding unused tax losses 21
Deferred tax, 2021
Intangible assets and property, plant and equipment 126 3 0 0 0 129
Inventories 19 0 -6 0 0 13
Contract assets 331 1 49 -1 0 380
Provisions -33 -1 11 -8 11 -20
Other 11 -2 1 -1 0 9
Deferred tax at December 31, 2021 454 1 55 -10 11 511
Recognized as deferred tax asset -11
Recognized as deferred tax liability 522
Deferred tax at December 31, 2021 511
Of this, due after more than 1 year 328
Not recognized deferred tax assets regarding unused tax losses 21
TOPSØE HOLDING A/S ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS
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CONTENTS
ACCOUNTING POLICIES
Goodwill
Goodwill is the positive difference between the cost of an
acquisition and fair value of identifiable net assets in the
acquired enterprise. Goodwill is measured at cost less accu-
mulated impairment losses.
Goodwill is tested for impairment annually and when there
is an indication of impairment. Goodwill is written down to
the recoverable amount through the income statement. The
recoverable amount is determined as the present value of
expected cash flows of the cash-generating unit to which
goodwill has been allocated. Impairment indicators comprise
e.g. reduced earnings compared to expected future results
or material negative development trends in the sector or the
economy in the markets of the enterprise.
Impairment loss relating to goodwill is not reversed.
Other intangible assets
Rights and patents are measured at cost less accumulated
amortization and impairment losses. Rights as well as patents
are amortized on a straight-line basis over the remaining
patent term, but not exceeding 10 years, due to the notori-
ously fast development in applied technologies.
Acquired or internally developed software is measured at
cost less accumulated amortization and impairment losses.
Software is amortized on a straight-line basis over 4 years or
over the contract period.
Other intangible assets are tested for impairment when there
is an indication of impairment. Impairment indicators are
similar to those stated in the section on goodwill. Intangible
assets are written down to recoverable amount through the
income statement if lower than the carrying amount. The
recoverable amount is the higher of the fair value of the asset
less the expected cost to sell and its value in use. Impairment
losses relating to other intangible assets are reversed if the
recoverable amount subsequently increases.
3 OPERATING ASSETS AND LIABILITIES
3.1 Intangible assets
TOPSØE HOLDING A/S ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS
30
CONTENTS
3.1 Intangible assets (continued)
DKK million Goodwill Rights Patents Software
Intangible
assets under
construction Tota l
Intangible assets, 2022
Cost at January 1, 2022 3,310 39 127 262 8 3,746
Foreign currency translation adjustment 1 0 0 0 0 1
Additions during the year 0 0 31 6 43 80
Disposals during the year 0 0 -2 -35 0 -37
Transfers during the year 0 0 0 7 -7 0
Cost at December 31, 2022 3,311 39 156 240 44 3,790
Amortization and impairment losses
at January 1, 2022 25 22 57 173 0 277
Foreign currency translation adjustment 1 0 0 0 0 1
Amortization for the year 0 5 14 32 0 51
Disposals during the year 0 0 -1 -35 0 -36
Amortization and impairment
losses at December 31, 2022 26 27 70 170 0 293
Carrying amount
at December 31, 2022 3,285 12 86 70 44 3,497
Research and development costs
expensed in 2022 587
DKK million Goodwill Rights Patents Software
Intangible
assets under
construction Tota l
Intangible assets, 2021
Cost at January 1, 2021 3,308 39 125 205 44 3,721
Foreign currency translation adjustment 2 0 0 0 0 2
Additions during the year 0 0 24 33 8 65
Disposals during the year 0 0 -22 -20 0 -42
Transfers during the year 0 0 0 44 -44 0
Cost at December 31, 2021 3,310 39 127 262 8 3,746
Amortization and impairment losses
at January 1, 2021 23 17 61 173 0 274
Foreign currency translation adjustment 2 0 0 0 0 2
Amortization for the year 0 5 12 20 0 37
Disposals during the year 0 0 -16 -20 0 -36
Amortization and impairment
losses at December 31, 2021 25 22 57 173 0 277
Carrying amount
at December 31, 2021 3,285 17 70 89 8 3,469
Research and development costs
expensed in 2021 571
TOPSØE HOLDING A/S ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS
31
CONTENTS
3.2 Property, plant and equipment
DKK million Land and buildings Plant and machinery Other fixtures and equipment
Property, plant and equipment
under construction Total
Property, plant and equipment, 2022
Cost at January 1, 2022 921 1,867 934 634 4,356
Foreign currency translation adjustment 9 27 0 30 66
Additions during the year 2 32 16 737 787
Disposals during the year -2 -23 -39 -6 -70
Transfers during the year 16 321 35 -372 0
Cost at December 31, 2022 946 2,224 946 1,023 5,139
Depreciation and impairment losses at January 1, 2022 279 1,304 726 0 2,309
Foreign currency translation adjustment 6 21 0 0 27
Depreciation for the year 22 142 67 0 231
Disposals during the year -1 -17 -29 0 -47
Depreciation and impairment losses at December 31, 2022 306 1,450 764 0 2,520
Carrying amount at December 31, 2022 640 774 182 1,023 2,619
Carrying amount of assets used for operational lease 0 0 0 78 78
ACCOUNTING POLICIES
Property, plant and equipment are measured at cost less
accumulated depreciation and impairment losses. Property,
plant and equipment under construction are measured at
cost less impairment loss.
The cost comprises the acquisition price and other directly
attributable expenses of preparing the asset for its intended
use. The present value of estimated expenses for dismantling
and disposing of the asset as well as restoration expenses are
added to the cost if such expenses are recognized as a provi-
sion. Material borrowing costs directly attributable to the
construction of the individual asset are also added to cost.
Cost of self-constructed assets are recognized as prop-
erty, plant and equipment in progress on an ongoing basis
until the assets are ready for use and comprises direct and
indirect expenses for labor, materials, components and
sub-suppliers.
Property, plant and equipment are accounted for as separate
items if the useful life of the individual assets is different.
TOPSØE HOLDING A/S ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS
32
CONTENTS
3.2 Property, plant and equipment (continued)
DKK million Land and buildings Plant and machinery Other fixtures and equipment
Property, plant and equipment
under construction Total
Property, plant and equipment, 2021
Cost at January 1, 2021 878 1,751 901 466 3,996
Foreign currency translation adjustment 10 34 6 27 77
Additions during the year 11 27 37 259 334
Disposals during the year -18 0 -33 0 -51
Transfers during the year 40 55 23 -118 0
Cost at December 31, 2021 921 1,867 934 634 4,356
Depreciation and impairment losses at January 1, 2021 263 1,139 678 0 2,080
Adjustment to prior year 6 0 0 0 6
Foreign currency translation adjustment 6 26 4 0 36
Depreciation for the year 22 139 72 0 233
Disposals during the year -18 0 -28 0 -46
Depreciation and impairment losses at December 31, 2021 279 1,304 726 0 2,309
Carrying amount at December 31, 2021 642 563 208 634 2,047
Carrying amount of assets used for operational lease 0 0 0 64 64
ACCOUNTING POLICIES (CONTINUED)
Depreciation based on cost reduced by impairment loss and
residual value is calculated on a straight-line basis over the
expected useful lives of the assets, which are:
Buildings 13–40 years
Plant and machinery 5–10 years
Other fixtures and equipment 4–20 years
Land is not depreciated.
The residual value and useful lives of the assets are reas-
sessed annually and adjusted if necessary.
Property, plant and equipment are tested for impairment
when there is an indication of impairment. Impairment indi-
cators are similar to those stated in the section on intangible
assets. Additionally, indicators comprise damage to the asset
or changed use of the asset. Property, plant and equipment
are written down to recoverable amount through the income
statement if lower than the carrying amount. The recover-
able amount is the higher of the fair value of the asset less
the expected cost to sell and its value in use. Impairment
losses are reversed if the recoverable amount subsequently
increases.
Lessor
When the Group is the lessor in a lease agreement classified
as operational lease, the lease asset is recognized as prop-
erty, plant and equipment and depreciated over the useful
life. Lease income is recognized in other operating income.
ACCOUNTING ESTIMATES AND JUDGEMENTS
Judgement is applied in determining the depreciation period
and future residual value and is generally based on historical
experience. Reassessment is done annually.
Furthermore, judgement is applied in determining whether
impairment indicators are present.
TOPSØE HOLDING A/S ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS
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CONTENTS
ACCOUNTING POLICIES
Whether a contract contains a lease or a service arrangement
is assessed at contract inception. For contracts which contain
a lease, the Group recognizes a right-of-use asset and a lease
liability. The right-of-use asset is initially measured at cost,
being the initial amount of the lease liability. The right-of-use
asset is subsequently depreciated using the straight-line
method over the lease term. The right-of-use asset is periodi-
cally adjusted for certain remeasurements of the lease liability
and reduced by any impairment losses.
The lease term determined by the Group is the non-cancel-
lable period of a lease, together with extension/termination
option if these are reasonably certain to be exercised.
The lease liability is initially measured at the present value of
the lease payments outstanding at the commencement date,
discounted using the incremental borrowing rate. The lease
liability is measured using the effective interest method.
The lease liability is remeasured when there is a change in
future lease payments, typically due to a change in index on
property leases, or if there is a reassessment of whether an
extension or termination option will be exercised. A corre-
sponding adjustment is made to the right-of-use asset, or in
the income statement when the right-of-use asset has been
fully depreciated.
Short-term leases (less than 12 months) and leases relating to
low-value assets are not recognized in the balance sheet.
ACCOUNTING ESTIMATES AND JUDGEMENTS
Management has evaluated extension options primarily
related to office rentals. In most cases, extension options are
not included, as the Group could replace the assets without
significant costs or business disruption.
DKK million
Land and
buildings
Other fixtures
and equipment Total
Right-of-use assets, 2022
Carrying amount at January 1, 2022 471 6 477
Foreign currency translation adjustment -1 0 -1
Additions during the year 39 1 40
Disposals during the year 0 0 0
Depreciation for the year -74 -3 -77
Carrying amount at December 31, 2022 435 4 439
Right-of-use assets, 2021
Carrying amount at January 1, 2021 522 9 531
Foreign currency translation adjustment 5 1 6
Additions during the year 10 0 10
Disposals during the year -5 0 -5
Depreciation for the year -61 -4 -65
Carrying amount at December 31, 2021 471 6 477
DKK million 2022 2021
Lease information
Interest expense (included in financial expenses) 22 22
Expense relating to short-term leases (included in other external expenses) 0 0
Expense relating to leases of low-value assets that are not shown
above as short-term leases (included in other external expenses) 0 0
Revenue from sub-lease 3 4
Total cash outflow for leases 82 82
The majority of lease contracts relate to lease of office build-
ings. Please see note 4.2 Borrowings and lease liabilities for
information about the lease liabilities.
The Group has entered into a lease contract under which the
Group is obligated to purchase the property at a price of DKK
74 million after termination of the lease contract in 2036.
The purchase obligation is included in the lease liability.
3.3 Right-of-use assets
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34
CONTENTS
ACCOUNTING POLICIES
Investments in joint ventures and associated companies
Entities in which the Group directly or indirectly controls at
least 20%, but not more than 50%, of the voting rights are
accounted for as associated companies.
Investments in joint ventures and associated companies are
recognized and measured under the equity method. The
proportional share of the result after tax of investments in
joint ventures and associated companies are included under
financial income or financial expense.
Investments with negative net asset values are recognized at
DKK 0 million.
Other securities and investments
Investments in other enterprises are measured at fair value
at the balance sheet date. Fair value adjustments are recog-
nized through other comprehensive income under the
reserve for financial assets measured at fair value.
Securities, e.g. issued loans, are measured at amortized cost
less expected credit loss.
Receivables
Receivables are measured at amortized cost less expected
credit loss.
ACCOUNTING ESTIMATES AND JUDGEMENTS
Investments in other enterprises are measured at fair value
at the balance sheet date. In case that fair value cannot be
derived from an active market, it is required that Manage-
ment assesses and selects an appropriate method for
determination of the fair value. In this case, the fair value is
measured at the discounted value of expected future cash
flows or other generally accepted valuation techniques.
Material assumptions comprise expected future cash flows,
discount rates and growth rates for the period.
3.4 Other non-current assets
TOPSØE HOLDING A/S ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS
35
CONTENTS
3.4 Other non-current assets (continued)
DKK million
Invest-
ments in
associated
companies
Invest-
ments
in joint
ventures
Pension
asset
Other
securities
and invest-
ments
Other
receivables Total
Other non-current assets, 2022
Cost at January 1, 2022 771 17 40 563 41 1,432
Foreign currency translation adjustment 0 0 2 0 1 3
Additions during the year 167 8 10 10 0 195
Disposals during the year 0 0 0 0 -2 -2
Cost at December 31, 2022 938 25 52 573 40 1,628
Value adjustment at January 1, 2022 423 0 0 -298 -15 110
Profit/loss for the year -548 0 0 0 0 -548
Dilution gain 201 0 0 0 0 201
Additions during the year 76 0 0 0 0 76
Value adjustments 64 0 0 0 0 64
Foreign currency translation adjustment 82 0 0 -1 0 81
Value adjustment at December 31, 2022 298 0 0 -299 -15 -16
Carrying amount at December 31, 2022 1,236 25 52 274 25 1,612
DKK million 2022 2021
Result of investments in joint ventures and associated companies
Profit from divestment of shares in associated company 0 137
Share of result of associated companies, net of tax -408 -348
Gain/loss in connection to dilution 201 -11
Total result of investments in joint ventures and associated companies -207 -222
DKK million
Invest-
ments in
associated
companies
Invest-
ments
in joint
ventures
Pension
asset
Other
securities
and invest-
ments
Other
receivables Total
Other non-current assets, 2021
Cost at January 1, 2021 788 0 0 552 40 1,380
Transferred to current assets 0 0 0 0 1 1
Additions during the year 5 17 40 41 8 111
Disposals during the year -22 0 0 0 -8 -30
Transfers during the year 0 0 0 -30 0 -30
Cost at December 31, 2021 771 17 40 563 41 1,432
Value adjustment at January 1, 2021 656 0 0 -290 -9 357
Profit/loss for the year -451 0 0 0 0 -451
Dilution gain -11 0 0 0 0 -11
Disposals during the year 20 0 0 0 0 20
Value adjustments for the year 209 0 0 -8 -6 195
Value adjustment at December 31, 2021 423 0 0 -298 -15 110
Carrying amount at December 31, 2021 1,194 17 40 265 26 1,542
TOPSØE HOLDING A/S ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS
36
CONTENTS
INVESTMENTS IN JOINT VENTURES:
Shaanxi Yanchang Topsoe Catalytic Technologies Co, Ltd.,
Weinan, China
During 2022, the Group has invested DKK 8 million in Shaanxi
Yanchang Topsoe Catalytic Technologies Co, Ltd., corre-
sponding to 49% of the share capital. The joint venture is a
limited liability company. The company will establish a minor
production line.
OTHER SECURITIES AND INVESTMENTS:
Karnaphuli Fertilizer Limited, Dhaka, Bangladesh (KAFCO)
The Group holds shares in KAFCO of nominally BDT 692
million, which equals 15% of the shares in KAFCO. The shares
are measured at fair value based on a discounted cash flow
calculation using the present budgets and forecasts of
KAFCO.
Based on this, the KAFCO shares have been written down
by DKK 0 million (2021: DKK 8 million). The fair value of the
investment is DKK 156 million.
Ramagundam Fertilizers and Chemicals Limited,
New Delhi, India
The Group has increased the investment in Ramagundam
Fertilizers and Chemicals Limited, still corresponding to 4%
of the share capital. The company is constructing a fertilizer
plant in India. The fair value of the investment is DKK 67
million (2021: DKK 67 million).
GTLA Holdings LP, Delaware, US
The Group has invested in GTLA Holdings LP, corresponding
to 3% of the share capital. The purpose of the company is to
develop a project regarding construction of a gas-to-liquid
plant. The fair value of the investment is DKK 0 million due to
a license having been suspended.
Liquid Wind, SE
The Group has in 2022 DKK 9 million in Liquid Wind, corre-
sponding to 5% of the share capital. The purpose of the
company is to develop, finance, bild and manage commercial
scale eMethanol facilities. The fair value of the investment is
DKK 11 million.
IGM Biosciences Inc., Mountain Veiw, US
In April 2022 IGM Biosciences Inc. completed a capital
increase, listed on Nasdaq. The total capital increase was
DKK 1,619 million (USD 230) excluding fee’s, and Topsøe
Holding A/S signed up with DKK 167 million (UDS 25 million).
Topsøe Holding A/S has in 2022 reduced the ownership in
IGM Biosciences Inc. from 39.0% to 31.9% as at 1 April 2022
due to dilution. The gain from the dilution amounts to DKK
201 million.
Centaflow A/S
The Group has in 2021 invested DKK 35 millon in the Danish
MedTech (medical technology) company Centaflow A/S,
corresponding to 10% of the share capital.
3.4 Other non-current assets (continued)
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CONTENTS
ACCOUNTING POLICIES
Inventories are measured at the lower of cost or net real-
izable value. Cost is determined using the first-in, first-out
method. Cost comprises direct production costs such as raw
materials, consumables and labor as well as indirect produc-
tion costs. Production costs for work in progress and finished
goods include indirect production costs such as staff costs,
depreciation, maintenance, etc.
ACCOUNTING ESTIMATES AND JUDGEMENTS
The calculation of indirect production costs is reviewed
on a regular basis to ensure that all relevant assumptions
such as prices, production yield and capacity utilization are
incorporated correctly. Changes in the assumptions could
have a significant impact on the gross margin and the overall
measurement of inventories.
Inventories are written down to net realizable value if this
is lower than cost. A potential impairment requirement is
primarily assessed based on production quality and the devel-
opment in sales market. The net realizable value is calculated
as the revenue expected to be generated less selling expenses.
DKK million 2022 2021
Inventories
Raw materials and consumables 911 557
Work in progress 382 225
Finished goods 1,147 867
Inventories at December 31 2,440 1,649
Cost of sales for the year 3,216 2,086
Write-down of inventories
Impairment at January, 1 127 80
Foreign currency translation adjustment 2 2
Additions during the year 29 101
Reversals during the year -64 -28
Realized during the year 4 -28
Write-down at December 31 98 127
Reversal of impairment losses is attributable to disposal or
reuse of impaired goods in the production.
ACCOUNTING POLICIES
Trade receivables are measured in the balance sheet at
amortized cost less expected credit loss.
ACCOUNTING ESTIMATES AND JUDGEMENTS
The expected credit loss is based on historical credit loss
experience combined with forward-looking information.
DKK million
Gross trade
receivables
Expected loss
rate (%)
Loss
allowance
Trade
receivables
Aging of trade receivables and expected credit loss, 2022
Not due 1,142 0 0 1,142
1-90 days 250 0 0 250
91-180 days 62 0 0 62
181-360 days 22 74 -16 6
360+ days 57 48 -27 30
At December 31, 2022 1,533 -43 1,490
Aging of trade receivables and expected credit loss, 2021
Not due 980 0 0 980
1-90 days 197 0 0 197
91-180 days 16 0 0 16
181-360 days 32 17 -5 27
360+ days 26 56 -14 12
At December 31, 2021 1,251 -19 1,232
3.5 Inventories 3.6 Trade receivables
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CONTENTS
ACCOUNTING POLICIES
Contract work in progress
Contract work in progress is measured at the selling price of
the work completed calculated on the basis of the percent-
age-of-completion. The percentage of-completion is deter-
mined on the basis of the share of contract costs incurred
compared to the forecasted contract costs. This method is
found to be the best and most prudent method to reflect the
progress.
Prepayments are offset against contract work in progress.
Received payments on account exceeding the selling price
of the work completed are recognized in contract work in
progress under current liabilities.
Where it is probable that total contract cost will exceed the
total revenue from a contract, the expected loss is recog-
nized as a cost in the income statement.
Where the selling price cannot be measured reliably, the
selling price is measured at the lower of costs incurred and
net realizable value.
Please refer to accounting estimates and judgements in note
2.1 Revenue.
3.7 Contract assets and liabilities
DKK million 2022 2021
Loss allowance
Loss allowance at January 1 19 22
Foreign currency translation adjustment 0 1
Additions during the year 26 5
Reversals during the year 0 -4
Realized during the year -2 -5
Loss allowance at December 31 43 19
Trade receivables due after more than 1 year 11 16
3.6 Trade receivables (continued)
DKK million 2022 2021
Contract assets and liabilities
Contract work in progress 293 270
Contract assets at December 31 293 270
Contract work in progress 1,318 677
Prepayments from customers related to catalysts, etc. 605 502
Contract liabilities at December 31 1,923 1,179
Net contract work in progress has increased due to revenue recognition exceeding
actual invoicing during the year, mainly impacting contract liabilities.
Contract work in progress
Selling price of work completed at the balance sheet date 6,510 6,542
Payments received on account -7,535 -6,949
Contract work in progress at December 31 -1,025 -407
Contract work in progress recognized in contract assets 293 270
Contract work in progress recognized in contract liabilities -1,318 -677
Contract work in progress at December 31 -1,025 -407
3.7 Contract assets and liabilities (continued)
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CONTENTS
ACCOUNTING POLICES
Other receivables are measured at amortized cost.
Expenses relating to sales work and the winning of contracts
are recognized in the income statement as incurred, except
agent commissions which are recognized when the relevant
performance obligations have been delivered - either at a
point in time or over time.
DKK million 2022 2021
Other receivables and prepayments
Indirect taxes receivables 75 77
Derivatives 3 8
Proceeds from diversement of associated company 0 137
Other receivables 92 42
Prepayments 117 43
Other receivables and prepayments at December 31 287 307
Agent commission for obtaining contracts
Agent commission recognized as prepayments 10 8
Agent commission recognized in the income statement during the year. 17 43
ACCOUNTING POLICES
Securities are measured at fair value at the balance sheet date.
Gains and losses from securities are recognized in the Income statements under “Financial
income” and Financial expenses” respectively.
DKK million 2022 2021
Securities
Equities funds 709 818
Bonds funds 803 893
Securities at December 31 1,512 1,711
3.8 Other receivables and prepayments 3.9 Securities
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CONTENTS
ACCOUNTING POLICIES
For defined benefit plans, the costs and obligations for the
year are determined using the projected unit credit method.
This reflects services rendered by employees up to the valu-
ation dates and is based on actuarial assumptions primarily
regarding discount rates used in determining the present
value of benefits and projected increase in wages.
Differences between the calculated development in pension
obligations and plan assets and the realized values are recog-
nized in other comprehensive income as actuarial gains or
losses.
Changes in pension obligations for employees’ past services
result in an adjustment of the actuarial calculation of the
present value, which is classified as past service costs. Past
service costs are charged to the income statement imme-
diately if the employees have already earned the right to the
adjusted benefits. Otherwise, they will be recognized in the
income statement over the period in which the employees
earn the right to the adjusted benefits.
Pension plan assets are only recognized to the extent that
the Group is able to derive future economic benefits such as
refunds from the plan or reductions of future contributions.
Actuarial valuations of the present value of pension obliga-
tions are performed annually.
DKK million 2022 2021
Net pension obligations
Present value of pension obligations at January 1 282 306
Foreign currency translation adjustment 14 22
Pension costs 4 4
Calculated interest on obligation 7 7
Actuarial gains and losses, demographic assumption 7 -2
Actuarial gains and losses, financial assumption -66 -15
Pension paid -12 -11
Pension paid for settlements -22 -29
Present value of pension obligations at December 31 214 282
Fair value of pension plan assets at January 1 285 264
Foreign currency translation adjustment 18 22
Calculated interest on pension assets 6 5
Return on plan assets excl. interest on pension assets -42 30
Paid by the company 1 4
Pension paid -12 -11
Pension paid for settlements -22 -29
Fair value of pension plan assets at December 31 234 285
Net pension obligations/assets at December 31 -20 -3
Pension costs
Pension costs 4 4
Interest expenses 7 7
Interest income on plan assets -6 -5
Total pension related to defined benefit recognized in staff costs 5 6
Weighted average duration of the defined benefit obligations (in years) 6.9-10.5 8.3-10.5
Expected defined benefit pension payments by the Group in
2023 amount to DKK 20 million.
3.10 Pension obligations
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41
CONTENTS
Percentage 2022 2021
Composition of plan assets, %
Shares 66 70
Bonds 28 25
Real estate 4 4
Other 2 1
Composition of plan assets at December 31 100 100
Applied actuarial assumptions, %
Discount rate 3.2-7.5 1.0-6.5
Future wage increases 2.5-10.0 2.5-10.0
DKK million 2022 2021
Sensitivity analysis of impact on pension obligation
0.5%-point increase on discount rate -3 -5
0.5%-point decrease on discount rate 3 5
0.5%-point increase on future wage increase 0 0
0.5%-point decrease on future wage increase 0 0
3.10 Pension obligations (continued)
The Group has entered into pension plans with a consider-
able number of its employees. Most of the plans are defined
contribution plans and only a small part is defined benefit
plans.
Defined contribution plans
The Group finances the plans by currently paying a premium
to independent insurance companies that are responsible
for the pension obligations. Once the pension contributions
to the defined contribution plans have been paid, the Group
has no further pension obligations to current or terminated
employees.
Defined benefit plans
The Group has made agreements with specific groups of
employees regarding payment of certain benefits, including
pension. These pensions mainly relate to certain employees in
the Group’s US subsidiary where the plan partly consists of a
basic pension and partly of an additional pension for selected
members of US management. The pension obligations are
partly hedged through an independent fund. Actuarial valua-
tion is performed annually. In addition, employees in India and
Germany are covered by defined benefit plans.
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CONTENTS
ACCOUNTING POLICIES
Provisions are recognized when, due to an earlier event,
the Group has a legal or constructive obligation and it is
expected that the settlement of the obligation will require an
outflow of resources.
Provisions are measured on the basis of Management’s best
estimate of the amount at which the obligation is expected
to be met and are discounted if deemed material.
Contingent liabilities comprise possible obligations which
have not yet been confirmed or cannot be measured reliably,
but which result in outflow of resources if realized.
ACCOUNTING ESTIMATES AND JUDGEMENTS
The warranty provisions are based on historical levels as well
as estimated amounts required for settling specific warranty
cases. Furthermore, the warranty provision for engineering
projects reflects the expected risk associated with the
various technologies. Warranty provisions can be impacted
by unexpected quality issues on our catalyst or technology
solutions.
Management continuously assesses provisions, including
contingencies and the likely outcome of pending and poten-
tial legal proceedings. The outcome of these depends on
future events which are uncertain by nature.
The assessments may involve advice from external experts
and legal advisors.
DKK million
Warranty
provision for
engineering
projects
Warranty
provision for
catalysts Other Total
Provisions, 2022
Provisions at January 1, 2022 114 51 10 175
Foreign currency translation adjustment 0 0 0 0
Provisions during the year 73 8 0 81
Reversals during the year -10 -1 0 -11
Realized provision during the year -34 0 0 -34
Provisions at December 31, 2022 143 58 10 211
The majority of the warranty provisions are expected to be recognized after 1 year.
Provisions, 2021
Provisions at January 1, 2021 163 126 1 290
Foreign currency translation adjustment 0 0 0 0
Provisions during the year 32 94 9 135
Reversals during the year -77 -6 0 -83
Realized provision during the year -4 -163 0 -167
Provisions at December 31, 2021 114 51 10 175
The majority of the warranty provisions are expected to be recognized after 1 year.
3.11 Provisions and contingent liabilities
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CONTENTS
DKK million 2022 2021
Aging of guarantees issued on the Group's behalf for project-related risk
Less than 1 year 379 406
Between 1 and 5 years 270 179
After 5 years 38 35
Guarantees issued at December 31 687 620
Guarantees have been issued by banks and credit insurance
institutions to customers on the Group’s behalf to cover
project- related risk, such as received prepayments and
performance. In the event that a guarantee materializes,
banks and credit insurance institutions have recourse against
the Group. In the event that a guarantee is expected to mate-
rialize, a provision is recognized.
DKK million 2022 2021
Guarantees issued by the Group
Guarantee issued by the Group in relation to the Employee Share Program, expires 2024 5 7
Guarantees issued by the Group at December 31 5 7
Contingent liabilities
The Group’s property in Frederikssund, Denmark, has been
found to be contaminated. Management assesses that the
remediation costs will not be significant.
The Group is a party to a number of court cases and legal
disputes. Management assesses that none of these will
significantly impact the Group’s financial position.
Through participation in joint taxation scheme, the Group is
jointly and severally liable for taxes, etc. payable in Denmark.
ACCOUNTING POLICIES
Other payables are measured at amortized cost, mainly
corresponding to nominal value.
DKK million 2022 2021
Other payables
Staff-related items 359 435
Other payables 188 200
Other payables at December 31 547 635
Classification of other payables
Non-current liabilities 103 105
Current liabilities 444 530
Other payables at December 31 547 635
Staff-related items primarily comprise employee holiday
provision, provision for Group bonus and payroll taxes due.
3.11 Provisions and contingent liabilities (continued) 3.12 Other payables
TOPSØE HOLDING A/S ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS
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CONTENTS
ACCOUNTING POLICIES
Reserves
The foreign currency translation reserve comprises all trans-
lation adjustments arising from the translation of financial
statements of Group enterprises with a functional currency
other than Danish kroner as well as translation adjustments
concerning non-current intercompany balances that are
considered a part of the net investment in such enterprises.
Reserve for financial assets measured at fair value comprises
the accumulated net change in the fair value of investments
in other enterprises classified as financial assets measured at
fair value through other comprehensive income.
Dividend
Proposed dividend for the financial year is recognized in
retained earnings.
According to Danish corporate law, reserves available for
distribution as dividends are based on the financial state-
ments of the parent company, Topsøe Holding A/S. Dividends
are paid from distributable reserves. Share premium is a
distributable reserve.
Number 2022 2021
Shares
Shares at January 1 2,200,000 2,200,000
Capital increase 0 0
Shares as per December 31 2,200,000 2,200,000
The share capital is nominally DKK 2,200 million divided
into shares of DKK 1,000 or multiples thereof. All issued
shares have been paiid. The shares are divided into 2 classes.
A shares are entitled to 10 votes per share amount of DKK
1,000. B shares are entitled to one vote for each share of
DKK 1,000.
4 CAPITAL STRUCTURE AND FINANCIAL ITEMS
4.1 Equity and dividend 4.2 Borrowings and lease liabilities
ACCOUNTING POLICIES
Borrowings are initially recognized at the proceeds received
net of transaction costs incurred. Subsequently, the loans are
measured at amortized cost, corresponding to capitalized
value, using the effective interest rate, so that the difference
between the proceeds and the nominal value is recognized in
the income statement over the term of the loan.
DKK million
Other
payables Borrowings
Lease
liabilities Total
Interest-bearing debt, 2022
Interest-bearing debt at January 1, 2022 104 482 513 1,099
Value adjustment 0 0 -10 -10
Loans raised 0 58 40 98
Installments -2 -122 -60 -184
Interest-bearing debt at December 31, 2022 102 418 483 1,003
Hereof long term 102 330 445 877
Interest-bearing debt, 2021
Interest-bearing debt at January 1, 2021 101 697 562 1,360
Foreign currency translation adjustment 0 3 11 14
Loans raised 8 0 0 8
Installments -5 -218 -60 -283
Interest-bearing debt at December 31, 2021 104 482 513 1,099
Borrowings comprise loans from credit institutions.
Please refer to note 3.3 Right-of-use assets for further information.
TOPSØE HOLDING A/S ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS
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CONTENTS
ACCOUNTING POLICIES
Fair value measurements are categorized into Level 1, 2 or
3 based on the degree to which the inputs to the fair value
measurements are observable and on the significance of the
inputs to the fair value measurement as a whole. The inputs
are described as follows:
• Level 1 inputs are quoted prices (unadjusted) in active
markets for identical assets or liabilities that the entity can
access at the measurement date.
• Level 2 inputs are inputs, other than quoted prices
included within Level 1, that are observable for the asset
or liability, either directly or indirectly.
• Level 3 inputs are fair value measures derived from valua-
tion techniques that include inputs for the asset or liability
that are not based on observable market data (unobserv-
able inputs).
DKK million 2022 2021
Classification of financial assets
Other securities and investments 274 265
Financial assets designated as assets measured at fair value through
other comprehensive income 274 265
Trade receivables 1,490 1,232
Other receivables 192 282
Cash 493 886
Financial assets measured at amortized cost 2,175 2,400
Derivatives 3 8
Financial assets measured at fair value through other comprehensive income 3 8
Financial assets at December 31 2,452 2,673
DKK million < 1 year 1-5 years > 5 years
Total
payments
Future
interests
Carrying
amount
Maturity and classification
of financial liabilities, 2022
Borrowings 200 289 59 548 -28 520
Lease liabilities 69 226 318 613 -130 483
Trade payables 955 0 0 955 0 955
Other financial liabilities 444 103 0 547 0 547
Financial liabilities measured
at amortized cost 1,668 618 377 2,663 -158 2,505
Financial liabilities
at December 31, 2022 1,668 618 377 2,663 -158 2,505
Maturity and classification
of financial liabilities, 2021
Borrowings 139 345 120 604 -18 586
Lease liabilities 69 222 368 659 -146 513
Trade payables 568 0 0 568 0 568
Other financial liabilities 530 11 94 635 0 635
Financial liabilities measured
at amortized cost 1,306 578 582 2,466 -164 2,302
Financial liabilities
at December 31, 2021 1,306 578 582 2,466 -164 2,302
4.3 Financial assets and liabilities
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46
CONTENTS
DKK million Level 1 Level 2 Level 3
Fair value assets, 2022
Other securities and investments 1 0 273
Derivative 0 3 0
Assets stated at fair value at December 31, 2022 1 3 273
Please refer to note 3.4 Other non-current assets for informa-
tion on input to the fair value measurement of investments in
other enterprises stated in level 3.
There have been no transfers between levels 1, 2 and 3 during
the year.
DKK million 2022 2021
Fair value of level 3 assets
Fair value of level 3 assets at January 1 264 261
Addition 10 41
Write-down recognized in other comprehensive income -1 -8
Fair value of level 3 assets at December 31 273 264
Available credit facility
Undrawn credit facility 116 335
Undrawn revolving credit facility 1,200 1,200
Available credit facility at December 31 1,316 1,535
4.3 Financial assets and liabilities (continued)
FINANCIAL RISK
Currencies
As the group operates globally, the income statement,
balance sheet, and cash flows are subject to the risk of
currency fluctuations, mainly in relation to the group’s cash-
flows in USD.
Part of this risk is mitigated through natural hedges arising
from activities where the group has both income and
expenses in the same currency. However, the risk is not fully
covered by natural hedges, and consequently the group
hedges certain future cash flows. A 5% change in the DKK/
USD exchange rate is assessed to have an EBIT effect of DKK
50-60 million.
Interest rates
The group’s general interest rate policy is to maintain a loan
portfolio where the fixed interest rate portion is kept within
a range of 50-75%, while the floating interest rate portion
is kept within a range of 25-50%. By the end of 2022, the
fixed rate portion stood at 65%, while the floating rate
portion stood at 35%. For the floating rate portion of our
interest-bearing debt at end of 2022, an increase in the
interest rate level of 1 percentage point will increase interest
expenses by DKK 1.6 million p.a.
Credit
The credit risk of the group is primarily related to trade
receivables from state, public and privately-owned corpo-
rations. Where feasible, we seek to mitigate credit risk by
applying instruments such as letters of credit and bank guar-
antees as well as selective structuring of payment terms, etc.
On a quarterly basis, we assess whether the Group should
make accruals for bad debt which is considered unlikely to
be collected.
Furthermore, credit risk arises from cash and derivarives. In
order to reduce the risk, the group only deals with financial
counterparties who, in the opinion og Management, have
satisfactory financial strenth (based on credit rating from a
recognized international credit rating agency where feasible).
At December 31, 2022, the group considers its maximum
credit risk to be 2,412 million (2021: DKK 2,685 million)
equal to the total of the Group’s financial assets.
Liquidity
The group must maintain sufficient liquidity to fund daily
operations, debt service, and expansion. Topsøe Holding’s
access to liquidity consists of cash and cash equivalents,
including access to committed revolving credit facilities. The
target is to maintain a minimum of DKK 500 million in unused
committed revolving credit facilities at any time.
TOPSØE HOLDING A/S ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS
47
CONTENTS
DKK million 2022 2021
Financial income
Dividend from other investments 129 33
Interest income 10 7
Foreign currency translation adjustment 173 94
Other financial income 58 126
Total financial income 370 260
Financial expenses
Interest expenses 35 36
Foreign currency translation adjustment 150 63
Value adjustment of other receivables 0 2
Other financial expenses 243 29
Total financial expenses 428 130
Interest expenses include interest on financial liabilities
measured at amortized cost of DKK 31 million (2021: DKK 31
million).
4.4 Financial income and expenses
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CONTENTS
ACCOUNTING POLICIES
Performance shares
The Group’s performance shares scheme is equity-settled,
measured at the grant date and recognized in the income
statement as staff costs over the vesting period. The offset-
ting item is recognized directly in equity.
The fair value of the performance shares granted is deter-
mined based on the external valuations of the Group and
comparable peers.
On initial recognition, an estimate is made of the number of
share units that the employees are expected to earn. The
estimated number of share units is adjusted subsequently to
reflect the actual number of share units earned.
The estimated volatility is based on historical data over the
preceding years adjusted for any unusual circumstances
during the period.
Employee Share Program (ESP)
The Employee Share Program is considered an equity-set-
tled program. The discount element, which is the deviation
between the employees’ share purchase price and the
market value, is expensed as a cost in Staff costs during
the duration of the program. The counter entry is included
directly in Retained earnings as a transaction with owners.
The Phantom Program is considered a cash-settled program.
The invested amount is considered as a non-current liability.
The annual fair value adjustment is expensed as cost in Staff
costs.
No. of shares 2022 2021
Performance shares 374,771 0
Granted during the year 0 435,395
Cancelled during the year -135,896 60,624
No. of shares at
December 31 238,875 374,771
Share-based incentive schemes
In 2021, the Group launched incentive share-based payment
schemes for the purpose of motivating and retaining
selected employees, senior leaders and members of the
Executive Management.
Retention is motivated by requiring continued service
for a period covering the vesting period as a minimum.
The schemes are also intended to align the interests of
employees and shareholders.
A total of 23 employees held performance shares at
December 31, 2022 (2021: 31 employees).
Total costs recognized in 2022 amounted to DKK 3.3 million.
(2021 DKK 5 million)
The fair value of the performance share scheme at
December 31, 2022, is estimated to DKK 10 million. (2021:
DKK 14 million)
Employee Share Program
The Group launched an Employee Share Program (ESP) with
enrollment in February 2020. Employees at all levels have
been offered the opportunity to acquire shares in Topsoe
A/S at market value by investing an amount equal to ½,
1 or 2 months’ salary. For every four shares purchased at
market value, employees purchased a fifth share at a price
of DKK 1. An annual investment window will be open to new
employees. The program will expire either in case of an IPO or
by December 31, 2024, at the latest. If the program expires
without an IPO, the shares will be purchased by a purchaser
designated by the Group at market price. The shares cannot
be sold or pledged.
In 2022 further 265 employees (2021: 33 employees)
enrolled in the program and 687,022 new shares (2021:
117,442 shares) were issued. The shares issued in 2022
were issued at an average price of DKK 33.1 (2021: DKK
30.5) per share resulting in a discount element of DKK 8.4
(2021: DKK 7.4). Staff costs have been impacted by DKK 2
million (2021: DKK 4 million) due to the accrued part of the
discount element and the fair value adjustment.
Good leavers (mainly employees who retire or are dismissed)
can choose to keep the shares until the program expires or
sell the shares to a purchaser designated by the Group in the
next annual window at the fair market price. Resigning partic-
ipants must sell the shares to a purchaser designated by the
Group in the next annual window at the lower of the invested
amount plus an amount for the fifth share that increases to
the price paid for the four shares during the period or the fair
market price.
In some countries, participation in the ESP is not possible
due to local legislation. Instead, employees in these countries
have been offered to participate in a Phantom program. The
participating employees have invested an amount equal to
½, 1 or 2 months’ salary and are granted phantom shares
in Topsoe A/S at principles equal to the ESP. At the time of
expiry of the program, employees will be refunded based on
the fair value of the phantom shares.
54 employees (2021: 60 employees) are enrolled in the
Phantom program. Staff costs have not been impacted in
2022 nor in 2021.
5 OTHER NOTES
5.1 Share-based payment
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CONTENTS
DKK million 2022 2021
Fee to auditors appointed at the general meeting
Statutory audit fee 3 2
Other assurance statements 0 0
Tax assistance 2 2
Other assistance 4 1
Total fee to auditors appointed at the general meeting 9 5
For remuneration to Senior Leadership Team and Board of
Directors, please refer to note 2.3 Staff costs.
Intercompany transactions have been eliminated in the
consolidated financial statements.
5.2 Fee to auditors appointed at the general meeting 5.3 Related parties
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CONTENTS
DKK million 2022 2021
Adjustments for non-cash items
Gain and losses from disposal of assets 10 11
Cash flow from discontinuing operations -17 0
Result of investment in joint venture and associated companies 0 137
Change in provision 22 -129
Employee Share Program 4 8
Other adjustments 50 58
Total adjustments for non-cash items 69 85
Change in working capital
Increase (-) / decrease in inventories -772 -155
Increase (-) / decrease in trade receivables -239 -153
Increase / decrease (-) in contract assets and liabilities 711 -281
Increase / decrease (-) in trade payables, etc. 320 -118
Total change in working capital 20 -707
DKK million 2022 2021
Contractual obligations
Purchase obligations relating to property, plant and equipment
and intangible assets 293 15
Lease obligations related to software, IT service and maintainance agreements,
running up to 9 years 8 12
Investment obligations related to investing in companies included under
non-current assets 3 13
Contractual obligations at December 31 304 40
Aging of contractual obligations
Less than 1 year 293 23
Between 1 and 5 years 7 13
After 5 years 4 4
Contractual obligations at December 31 304 40
5.4 Cash flow specifications 5.5 Commitments
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CONTENTS
No events materially affecting the Group’s financial position
at December 31, 2022 have occured after the balance sheet
date.
Company Country Ownership share Activity
Topsoe A/S* Denmark 69.18% P, S,R,O
Topsoe América Latina S.A. Argentina 100% S
Haldor Topsoe Australia Pty. Ltd. Australia 100% S
Haldor Topsoe do Brasil Tecnologia e Servicos em Catalisadores Eireli Brazil 100% S
Haldor Topsoe Canada Limited Canada 100% S
Topsoe (Beijing) Co. Ltd China 100% P, S
Jiangsu JITRI-Topsoe Joint R&D Center Co. Ltd. China 60% R
Topsoe International A/S Denmark 100% S
Subcontinent Ammonia Investment Company ApS Denmark 100% O
Topsoe Project Investment A/S Denmark 100% O
HT Ramagundam A/S Denmark 100% O
Topsoe Sustainables A/S Denmark 100% O
Topsoe SOEC Production A/S Denmark 100% P
Haldor Topsoe Germany GmbH Germany 100% S
Haldor Topsoe India Pvt. Ltd. India 100% S, O
Topsoe Sdn. Bhd. Malaysia 100% S
Haldor Topsoe De Mexico, S. A. de C. V. Mexico 100% S
OOO Haldor Topsøe, under liquidation Russia 100% S
Topsoe, Inc. US 100% P, S
Haldor Topsoe Project Development U.S. Inc. US 100% O
Haldor Topsoe LFG Solutions Inc. US 100% O
Pacific Coast Fertilizer LLC US 80% O
Saturn Ferrostaal Gas Chemicals LLC US 100% O
Haldor Topsoe eCOs Inc. US 100% O
Frydenlund Ejendomsselskab ApS* Denmark 100% P, S
HT ESP ApS* Denmark 70% O
P: Production S: Sales R: R&D O: Other * Directly held entities by Topsøe Holding A/S
5.6 Events after the balance sheet date 5.7 Group enterprises
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ACCOUNTING POLICIES
A discontinuing operation is a component of an entity
that has been disposed of or is classified as held for sale
and which represents a separate major line of business or
geographical area of operations or is part of a single coor-
dinated plan to dispose of such a line of business or area
of operations. The results of discontinuing operations are
presented separately in the income statement.
DKK million 2022 2021
Profit from discontinuing operations
Transaction-related costs 0 -2
Value adjustment of net assets sold 0 0
Profit/loss on sale before income tax 0 -2
Income tax 0 12
Profit from discontinuing operations 0 10
On June 20, 2017, Topsoe announced that it had sold its
emissions control business areas. The divestment was final-
ized on November 30, 2017. The divestment comprised the
subsidiaries Haldor Topsøe Catalyst (Tianjin) Co., Ltd., Haldor
Topsøe Automotive Catalyst Trading (Tianjin) Co., Ltd. and
Haldor Topsoe Catalisadores e Technologias do Brasil Ltda.
as well as business assets and liabilities in Denmark, the US,
and China.
2021 has mainly been impacted by reopened tax assess-
ments.
5.8 Discontinuing operations
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INCOME STATEMENT
INCOME STATEMENT OF
TOPSØE HOLDING A/S
DKK million Note 2022 2021
Other external expenses -11 -6
Staff expenses 2 -14 -5
EBIT -25 -11
Dividend from group enterprises 309 167
Financial income 3 55 123
Financial expenses 4 -244 -29
Profit before tax 95 250
Ta x 45 -19
Net profit 5 140 231
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BALANCE SHEET
BALANCE SHEET OF
TOPSØE HOLDING A/S
DKK million Note 2022 2021
Assets
Investments in group companies 3,907 3,889
Investments in associated companines 939 771
Other investments 35 35
Investments 6 4,881 4,695
Non-current assets 4,881 4,695
Receivables from group enterprises 0 6
Corporate income tax 56 13
Other receivables and prepayments 4 2
Receivables 60 21
Securities 7 1,512 1,711
Cash 7 10
Current assets 1,579 1,742
Assets 6,460 6,437
DKK million Note 2022 2021
Equity and liabilities
Share capital 8 2,200 2,200
Retained earnings 4,074 4,043
Proposed dividend 109 180
Equity 6,383 6,423
Credit institutions 69 11
Payables to group enterprises 6 1
Other payables 2 2
Current liabilities 77 14
Liabilities 77 14
Credit institutions 6,460 6,437
Fee to auditors appointed at the general meeting 9
Contractual liabilities 10
Related parties 11
Subsequent events 12
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STATEMENT OF CHANGES IN EQUITY
STATEMENT OF CHANGES IN EQUITY
OF TOPSØE HOLDING A/S
DKK million
Share
capital
Retained
earnings
Proposed
dividend Total
Equity at January 1, 2022 2,200 4,043 180 6,423
Transfer during the year 0 0 0 0
Net profit 0 31 109 140
Net profit and income
and expenses recognized under equity 0 31 109 140
Dividend paid 0 -180 -180
Transactions with owners 0 0 -180 -180
Equity at December 31, 2022 2,200 4,074 109 6,383
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NOTES
NOTES TO THE FINANCIAL STATEMENTS OF
TOPSØE HOLDING A/S
1 Accounting policies 59
2 Staff expenses 60
3 Financial income 60
4 Financial expenses 60
5 Proposed distribution of profit 60
6 Investments 61
7 Securities 62
8 Share capital 62
9 Fee to auditors appointed at
the general meeting 62
10 Contractual liabilities 62
11 Related parties 62
12 Subsequent events 62
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BASIS OF PREPARATION
The financial statements for 2022 of Topsøe Holding A/S
have been prepared in accordance with the requirements
of the Danish Financial Statements Act for class C large
companies.
The accounting policies are unchanged from last year.
The applied accounting policies are similar to those of the
Group except for the following matters:
Dividend from Group enterprises
The dividend proposed and declared in the financial year is
recognized in the parent company’s income statement.
Investments in Group enterprises
Investments in Group enterprises and associated companies
are recognized and measured at cost in the parent compa-
ny’s financial statements.
Cash flow statement
No separate cash flow statement has been prepared for the
parent company, as the parent company’s cash flow state-
ment is included in the consolidated cash flow statement.
1 ACCOUNTING POLICIES
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DKK million 2022 2021
Wages and salaries 14 5
Total staff expenses 14 5
Total remuneration to Executive Management and fee to Board of Directors 13 4
Average number of employees 3 3
3 FINANCIAL INCOME
DKK million 2022 2021
Other financial income, dividend etc. 55 123
55 123
DKK million 2022 2021
Other finacial expenses 243 29
Other interest 1 0
Total financial expenses 244 29
5 PROPOSED DISTRIBUTION OF PROFIT
DKK million 2022 2021
Proposed dividend 109 180
Retained earnings 31 51
Total proposed distribution of profit 140 231
2 STAFF EXPENSES 4 FINANCIAL EXPENSES
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DKK million
Investments
in group
enterprises
Investments
in associated
companies
Other
investments
Cost at January, 1 2022 3,889 771 35
Additions during the year 18 168 0
Cost at December 31, 2022 3,907 939 35
Carrying amount at December 31, 2022 3,907 939 35
6 INVESTMENTS
Investments in group enterprises are specified as follows:
Company Country Ownership share Activity
Topsoe A/S* Denmark 69.18% P, S,R,O
Topsoe América Latina S.A. Argentina 100% S
Haldor Topsoe Australia Pty. Ltd. Australia 100% S
Haldor Topsoe do Brasil Tecnologia e Servicos em Catalisadores Eireli Brazil 100% S
Haldor Topsoe Canada Limited Canada 100% S
Topsoe (Beijing) Co. Ltd China 100% P, S
Jiangsu JITRI-Topsoe Joint R&D Center Co. Ltd. China 60% R
Topsoe International A/S Denmark 100% S
Subcontinent Ammonia Investment Company ApS Denmark 100% O
Topsoe Project Investment A/S Denmark 100% O
HT Ramagundam A/S Denmark 100% O
Topsoe Sustainables A/S Denmark 100% O
Topsoe SOEC Production A/S Denmark 100% P
Haldor Topsoe Germany GmbH Germany 100% S
Haldor Topsoe India Pvt. Ltd. India 100% S, O
Topsoe Sdn. Bhd. Malaysia 100% S
Haldor Topsoe De Mexico, S. A. de C. V. Mexico 100% S
OOO Haldor Topsøe, under liquidation Russia 100% S
Topsoe, Inc. US 100% P, S
Haldor Topsoe Project Development U.S. Inc. US 100% O
Haldor Topsoe LFG Solutions Inc. US 100% O
Pacific Coast Fertilizer LLC US 80% O
Saturn Ferrostaal Gas Chemicals LLC US 100% O
Haldor Topsoe eCOs Inc. US 100% O
Frydenlund Ejendomsselskab ApS* Denmark 100% P, S
HT ESP ApS* Denmark 70% O
P: Production S: Sales R: R&D O: Other * Directly held entities by Topsøe Holding A/S
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DKK million 2022 2021
Equities funds 709 818
Bonds funds 803 893
Total securities 1,512 1,711
8 SHARE CAPITAL
Number of shares of DKK 1,000 A shares B shares Total
Total share capital 200,000 2,000,000 2,200,000
The share capital constitutes nominally DKK 2,200,000 distributed on shares of DKK 1,000 or multiple of this.
9 FEE TO AUDITORS APPOINTED AT THE GENERAL MEETING
Please refer to the note in the consolidated financial statements.
10 CONTRACTUAL LIABILITIES
Through joint taxation scheme with Danish group enterprises, the company is jointly and severally liable for taxes etc. payable in
Denmark.
11 RELATED PARTIES
No transactions have been carried out with the Board of Directors, Executive Management, key management staff, shareholders,
group enterprises or other related parties which have not been under normal market conditions.
12 SUBSEQUENT EVENTS
No events materially affecting the Company’s financial position at December 31, 2022 have occured after the balance sheet date.
7 SECURITIES
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STATEMENTS
STATEMENT BY THE EXECUTIVE MANAGEMENT AND
BOARD OF DIRECTORS ON THE ANNUAL REPORT
Registered Executive Management
Board of Directors
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INDEPENDENT AUDITOR’S REPORT
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CVR No 33 77 12 31
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