STAY
INFORMED
MANAGEMENT REVIEW
Overview
Chairman’s review
CEO’s review
Business milestones
Topsoe at a glance
Performance highlights
Our business
Our purpose
Our vision
Our strategy
Our business model
Our people
Financial results & outlook
Group financial review
Five-year summary
Financial outlook
Sustainability
Sustainability performance
Governance
Corporate Governance
Board of Directors
Senior Leadership Team
Risk Management
FINANCIAL STATEMENTS
Consolidated financial statements
Income statement
Statement of comprehensive income
Balance sheet
Statement of cash flows
Statement of changes in equity
Notes
Financial statements of Haldor Topsoe A/S
Income statement
Balance sheet
Statement of changes in equity
Notes
Management’s statement
and auditor’s report
Statement by the Executive Board
and the Board of Directors
Independent auditor’s report
CONTENTS
2
HALDOR TOPSOE A/S ANNUAL REPORT 2021
THE CLIMATE
CHALLENGE
IS AS REAL
AS EVER
CHAIRMAN’S REVIEW
The climate challenge is an overarching threat
to our planet. With the global energy
consumption expected to grow considerably
over the coming decades alongside a growing
population and increased standard of living, the
world is at a crossroads with the climate crisis
being our biggest challenge to overcome.
Topsoe can help fight this challenge.
JEPPE CHRISTIANSEN
Chairman
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OVERVIEWHALDOR TOPSOE A/S ANNUAL REPORT 2021
CARBON EMISSIONS MUST BE
REDUCED IN A JOINT EFFORT
51 billion tonnes of greenhouse gas
emissions. Every year. That is the challenge
we are facing. Carbon emissions must be
reduced in a joint effort between countries,
companies, and citizens, and at Topsoe, we
believe it is imperative to accelerate these
efforts.
The good news is that on a global level, the
technological solutions and the economy to
tackle this crisis are available. I am excited
to be Chairman of Topsoe, as the company
is in a strong position to lead the transition
to a greener future.
CHEMISTRY IS KEY
One of the main challenges is to transform
renewable power to energy that can be
stored, transported, and utilized when direct
electrification is not possible. This is the
case for mining, steel and cement
industries, and for heavy transportation.
Expertise in chemistry and related
engineering is thus key to succeed with the
radical change of the energy sector.
Chemical knowledge makes it possible to
transform power to hydrogen, ammonia,
methanol, etc.
TOPSOE IS COMMITTED TO REDUCING
CARBON EMISSIONS
In 2020, a strategic transformation of
Topsoe was launched, and we formulated
the vision of being recognized as the global
leader in carbon emission reduction
technologies by 2024. The vision was
backed by a restructuring of our
organization the same year, and in 2021 this
was reinforced by setting up a dedicated
Power-to-X organization. Similarly, in 2021,
Topsoe introduced a new strategy outlining
how we will achieve our vision.
Topsoe has always been committed to
developing technology that solves pressing
global challenges. And now, our traditional
business provides a very strong platform for
our transformation, thereby helping our
customers to reduce their CO
2
emissions to
achieve our vision of being the global leader
in carbon emission reduction technologies
by 2024. We look forward to seeing this new
strategy add value to Topsoe and all its
stakeholders.
GREAT WORK ON ALL FRONTS
The Board is pleased that Topsoe – despite
still being challenged by the COVID-19
pandemic – managed to deliver a strong
performance across the company in 2021
with an increase in earnings of 6% (EBIT
before special items) and revenue being in
line with our guidance for 2021. I am
especially excited to see the growth in
renewable fuels, where our solutions
contribute significantly to decarbonizing
the transportation sector.
Throughout 2021, our Senior Leadership
Team has been assessing what is needed to
build up Topsoe’s green energy capabilities
and introduced a new strategy, while
running the business effectively. On behalf
of the Board, I would like to thank the team
for their foresight and constant drive.
I would also like to extend the Board’s
warmest thanks to all Topsoe employees for
safeguarding yet another strong result
despite the continued challenges brought
about by the COVID-19 pandemic. You have
all been working passionately to develop
new groundbreaking solutions and at the
same time delivered excellent products and
service to our customers.
JEPPE CHRISTIANSEN
Chairman
51 billion tonnes of
greenhouse gas
emissions. Every year.
That is the challenge
we are facing. At
Topsoe, we have the
solutions ready.
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OVERVIEWHALDOR TOPSOE A/S ANNUAL REPORT 2021
TRANSFORMING
TOPSOE
CEO’S REVIEW
EXECUTING ON OUR STRATEGIC
TRANSFORMATION
2021 has been a good year for Topsoe, and
we have delivered a solid financial results for
the year in line with our guidance. Revenue is
on par with 2020, and despite being
challenged by the COVID-19 pandemic, we
have managed to increase our earnings by
6% (EBIT before special items), not least due
to our success in growing our renewables
business, where we support customers in
shifting to renewable fuels.
During the year, we took some decisive
steps to help combat climate change. Not
only have we developed new green solutions
and successfully put some into play. We
have also entered into a series of industrial
partnerships to jointly facilitate the future
production of green hydrogen, green
ammonia, green methanol, and eFuels.
Further, we have introduced a new strategy
and restructured our internal setup to be
even better positioned to lead the
development of Power-to-X solutions and
drive the energy transition. As part of
developing new solutions, we continue to
invest in R&D. In 2021, we invested 9% of our
revenue in R&D, up from 8% in 2020.
We are uniquely positioned to help our
customers and society in the battle against
climate change. Over decades, we have
gained superior skills and expertise from
developing technology, supplying catalyst,
and improving energy efficiency for the
chemical and refining industries. This strong
legacy provides us with an unrivalled
platform on which we are building our new
green solutions and ensures a strong link
Back in 2020, we set a vision of being recognized as the global leader in
carbon emission reduction technologies by 2024. This vision is driven by the
urgent need for and our strong commitment to developing solutions that
help solve the world's most challenging issue - climate change.
ROELAND BAAN
President &
Chief Executive Officer
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OVERVIEWHALDOR TOPSOE A/S ANNUAL REPORT 2021
between our traditional and new business
going forward.
We are also committed to reducing our own
carbon footprint and setting ambitious
reduction targets in line with climate
science. In 2021, our own carbon footprint
was 23% lower than in 2019. Our ambition is
to achieve net zero operations within this
decade, and we are working on finalizing
our net zero ambition for our entire value
chain.
EXCELLENT PERFORMANCE IN
RENEWABLE FUELS
We have been growing our renewables
business for years and are leading the field
in supplying technology for the production
of renewable diesel. Already today, six plants
using our technology produce 2.4 million
tons of renewable diesel per year. With at
least nine more plants expected to start
operating in 2022, this number will increase
to a total of 7.7 million tonnes. We are also
turning to the aviation and shipping industry
with our renewable fuel solutions.
Within the aviation sector, we see a strong
call for fuels that can dramatically reduce
the carbon footprint – so-called Sustainable
Aviation Fuels (SAF). We are already active in
projects developing SAF, and we started
2022 on a very positive note, as in January
we were chosen as supplier for two new SAF
facilities in the US.
BLUE TECHNOLOGIES PART OF
TRANSITION
We see significant interest from our
customers in new low-carbon solutions.
Introducing blue technologies – where
carbon capture is potentially able to remove
up to 99% of CO
2
– has been particularly
North America, and we are currently working
on both a major blue hydrogen and a blue
ammonia project.
UNIQUE POSITION IN POWER-TO-X
The share of renewables in the global power
supply will increase significantly. In itself,
this represents great potential for the
energy transition. But electrification will not
do it alone. Heavy industry and transport
– whether by land, air, or sea – account for
29% of energy-related CO
2
emissions. They
need energy-dense fuels made from
renewable sources to take part in the
transition.
We are in a strong position to successfully
grow our business in this field. As one of
very few companies, we possess both the
expertise and the technologies needed to
transform renewable power as well as
biomass and waste into low-carbon fuels
and chemicals. We will use our expertise to
help our customers and societies make the
energy transition.
One concrete example of how we support
Power-to-X solutions is by investing in a
new, industrial-scale facility to deliver the
electrolyzers that are urgently needed to
convert renewable power and water into
valuable zero-carbon fuels and chemicals.
ZERO HARM – SAFETY IMPROVED
In Topsoe, we have a strong focus on safety,
and we wholeheartedly embrace the
concept of ‘Zero Harm’. Our employees
must return home as safe and sound, as
when they left for work. Excellence in health
and safety is our license to operate, and we
track our performance using the metric
total recordable incident frequency (TRIF).
During 2021, we have continued to reduce
our TRIF ratio from 0.9 to 0.7 and since
2018, we have managed to reduce incidents
by 50%.
EMPLOYEES AND CUSTOMERS MAKE
IT HAPPEN
None of the achievements of the past year
would have been possible without our highly
dedicated employees. They have done a
tremendous piece of work to deliver this
year’s solid results in yet another
challenging year. I would also like to thank
our customers and partners for their trust in
us in a year that was once again burdened
by the widespread impacts of the COVID-19
pandemic as well as logistical challenges we
see worldwide. We are proud that you have
once again chosen Topsoe’s solutions to
support your business.
ROELAND BAAN
President & Chief Executive Officer
We are uniquely
positioned to help
our customers and
society in the battle
against climate
change. Our share
of revenue linked
to the energy
transition increased
from 2% in 2019 to
16% in 2021
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OVERVIEWHALDOR TOPSOE A/S ANNUAL REPORT 2021
JULY 22
Air Products chose Topsoe’s
low-carbon SynCOR
TM
technology for a blue hydrogen
energy complex in Canada.
→ Read more
JUNE 25
Topsoe and partners received
support from the Danish Energy
Technology Development and
Demonstration Program (EUDP)
for the world’s first industrial-
scale dynamic green ammonia
demonstration plant.
→ Read more
MARCH 18
Topsoe and Aquamarine announced
Memorandum of Understanding with
the purpose of building a 100
megawatt green ammonia facility
based on SOEC electrolysis.
→ Read more
FEBRUARY 22
Topsoe committed to the
Science Based Targets
initiative and set short-term
targets to reduce carbon
emissions.
→ Read more
JULY 13
Topsoe took final investment
decision on building a catalyst
plant in Texas, USA, to meet
customer demand.
→ Read more
MAY 17
CEO Roeland Baan met with a
delegation from the US Department
of State to discuss innovation to
combat climate change.
→ Read more
MARCH 4
Topsoe announced its intention to
build a 500 megawatt production
facility to produce SOEC
electrolyzers supporting the
company's Power-to-X business.
→ Read more
BUSINESS
MILESTONES 2021
8
OVERVIEWHALDOR TOPSOE A/S ANNUAL REPORT 2021
DECEMBER 31
Topsoe announced the
divestment of its ownership
share in Faradion. Topsoe will
continue focusing on LNMO
battery technology and will
build a pilot plant. Partnership
with Morrow established.
→ Read more
OCTOBER 31 -
NOVEMBER 12
Topsoe participated at COP26 and delivered
insights on how to decarbonize the hard-to-
abate sectors including aviation.
→ Read more
OCTOBER 14
Topsoe put demonstration
plant into operation for
production of sustainable
methanol from biogas.
→ Read more
DECEMBER 2
Topsoe’s ClearView™ solution
chosen by DCM Shriram Ltd for
digitalizing its ammonia facility
at Kota, India.
→ Read more
OCTOBER 18
Topsoe chosen as supplier for
blue ammonia technology at Air
Products’ $ 4.5 billion clean
energy complex in Louisiana, USA.
→ Read more
AUGUST 10
Phillips 66 started producing
renewable diesel based on
Topsoe’s HydroFlex
TM
solution.
→ Read more
OCTOBER 12
Partnership announced between
Dow and Topsoe to turn waste
plastics into circular plastics.
→ Read more
AUGUST 5
Marathon Petroleum Corp.
started producing renewable
diesel in North Dakota, USA,
based on Topsoe’s
HydroFlex
TM
solution.
→ Read more
BUSINESS
MILESTONES 2021
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OVERVIEWHALDOR TOPSOE A/S ANNUAL REPORT 2021
TOPSOE AT
A GLANCE
903 #1
EBIT before special items
(DKK million)
in renewable diesel
9%
#1
of revenue
invested in R&D
in ammonia
Los Angeles
Edmonton
Houston
Buenos Aires
Rio de Janeiro
Copenhagen
Moscow
Manama
New Delhi
Kuala Lumpur
Beijing
Frederikssund
Khobar
Mexico City
Suzhou
Shanghai
Jakarta
Perth
Essen
Topsoe is
headquartered
in Denmark .
2 ,133
employees
6,225
in revenue
(DKK million)
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OVERVIEWHALDOR TOPSOE A/S ANNUAL REPORT 2021
PERFORMANCE HIGHLIGHTS 2021
REVENUE
Revenue increased by 1% to DKK 6,225 million in line with
the guidance we provided at the beginning of the year.
Strong demand for Topsoe’s renewable fuels technology
offset the negative impact from COVID-19.
EBIT BEFORE SPECIAL ITEMS
EBIT before special items grew by 6% to DKK 903 million,
mainly driven by optimization within operations and the
restructuring implemented in 2020.
NET PROFIT
Net profit grew by 85% to DKK 890 million. The high
increase was driven by organic growth combined with the
divestment of Topsoe’s shares in Faradion, but should also
be seen in the light of significant one-off costs in 2020.
DKK million DKK million DKK million
2019 2019 20192020 2020 20202021 2021 2021
5,897
806
714
6,179
853
480
6,225
903 890
INNOVATION
In 2021, Topsoe invested 9.2% of its revenue in R&D, up
from 8.3% in 2020. We always strive to develop the best
possible solutions, and we continue to invest in R&D to
support our vision.
SAFETY
We continue to have a strong focus on safetyand in 2021, we
reduced our total recordable incident frequency (TRIF) ratio
by 0.2. Since 2018, our total recordable incident frequency
(TRIF) per 200,000 working hours has been reduced by 50%.
CARBON FOOTPRINT
In 2021, greenhouse gas emissions from our operations
were 19% lower compared to 2020 and 23% lower
compared to 2019 (scope 1 and 2, market-based).
% of revenue TRIF ratio Thousand tonnes CO
2
e
2019 2019 20192020 2020 20202021 2021 2021
8.0
1.3 164
8.3
0.9
156
9.2
0.7
127
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OVERVIEWHALDOR TOPSOE A/S ANNUAL REPORT 2021
OUR PURPOSE
For decades, Topsoe has helped solve some
of the world’s toughest challenges. Our
ammonia solutions are used to produce
fertilizers, which has helped feed growing
populations. Other of our technologies help
limit air pollution by reducing sulfur and
other pollutants from fossil fuel emissions to
environmentally safe levels - for the benefit
of environmental stability and public health.
Today, we focus on the climate challenge.
Leaving the world in a better shape for
future generations is what drives us
– and our purpose ‘Perfecting chemistry
for a better world’ is what guides us.
PERFECTING CHEMISTRY
FOR A BETTER WORLD
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OUR BUSINESSHALDOR TOPSOE A/S ANNUAL REPORT 2021
TO BE RECOGNIZED AS THE
EMISSION REDUCTION
TECHNOLOGIES BY 2024
We provide our customers with world-
leading technologies that enable them to
produce essential chemicals and fuels in an
energy-efficient way. While these offerings
remain relevant, we strengthen our focus on
technologies that can help accelerate a
responsible transition to renewable energy
sources.
We are one of very few companies that
possesses both the expertise and the
technologies needed to transform
renewable power, biomass, and waste into
low-carbon fuels and chemicals as well as to
deliver carbon capture solutions and
thereby remove CO
2
at chemical plants
using natural gas.
Today, the biggest global challenge is climate change.
Carbon emissions must be reduced in a joint effort
between countries, companies and citizens. We believe
we need to accelerate these efforts.
OUR VISION
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OUR BUSINESSHALDOR TOPSOE A/S ANNUAL REPORT 2021
THE 'GO-TO' COMPANY
WITHIN DECARBONIZATION
OUR STRATEGY
We continuously strive to develop the best
possible solutions, and our strategy is
designed to support our customers'
decarbonization journey, address the
climate challenge, and at the same time
grow our business.
Meeting market needs
Our strategy to meet existing and future
market needs is based on three pillars:
1. Driving our customers’ transition toward
carbon emission reduction technologies
2. Building a leadership position in
Power-to-X
3. Optimizing our traditional business
Heavy industry and transport – whether by land, air, or
sea – account for a large share of global greenhouse
gas emissions, and the critical energy transition hinges
on the availability of solutions that address the
impact of these industries.
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OUR BUSINESSHALDOR TOPSOE A/S ANNUAL REPORT 2021
OUR STRATEGY
Our existing technologies and insights can
be used in several areas to help drive our
customers’ transition toward carbon
emission reductions. This includes
expanding our strong hydrogen technology
position into blue ammonia, blue methanol,
and blue hydrogen. In 2021, we saw keen
interest from customers to introduce blue
technologies.
We expect growing demand for new and
efficient solutions from, among others, the
heavy-duty transport sector, with an
ambition to introduce renewable fuels, and
from industries like steel, cement, mining,
and shipping who all want to lower their
carbon footprint. This demand is partly
driven by companies’ own policies, partly by
regulation, but also due to pressure from
consumers who push for a greener future.
Today, Topsoe is the global market leader in
renewable diesel made from feedstock such
as vegetable oils and waste using its
HydroFlex™ solution. Our position within
renewable diesel can be expanded into all
renewable fuels, and we can make biofuels
for both the shipping industry as well as
Sustainable Aviation Fuel (SAF).
In addition, utilizing Topsoe’s PureStep™
solution within plastic recycling and reuse
will help customers reduce carbon
emissions and at the same time contribute
to addressing the significant problem of
plastic waste.
Renewable diesel for the US
Topsoe is a leader in supplying hydrotreating solutions, named HydroFlex™,
that can transform waste products and bio-materials into renewable diesel,
significantly lowering the transportation sectors' carbon footprint.
Already today, six plants using our technology produce 2.4 million tons of
renewable diesel per year. With at least nine more plants expected to start
operating in 2022, this number will increase to a total 7.7 million tonnes
Marathon Petroleum Corp. is one of many companies having deployed
HydroFlex™ and in 2021 their new unit in North Dakota, USA, started
producing. Capacity: 12,000 barrels per day of 100% renewable diesel.
Taking low-carbon fuels to the sky
We work together with SkyNRG on producing low-carbon fuel for aviation,
so-called Sustainable Aviation Fuel (SAF). SkyNRG has chosen our technology
to produce renewable diesel and jet fuel at their facility in Delfzijl, the
Netherlands. The produced fuel will be supplied directly to the nearby airport.
KLM Royal Dutch Airlines has committed to buy 75,000 tonnes of SAF per year
for a ten-year period. Every ton of SAF produced at the Delfzijl facility will
reduce carbon emissions from aviation by 2.5 tonnes.
Blue technologies at industrial scale
US company Air Products is building an energy complex in Louisiana, US, that
will produce over 750 million standard cubic feet per day of green hydrogen.
Some of the hydrogen will be converted into blue ammonia using Topsoe's
blue ammonia synthesis technology.
Air Products has also chosen Topsoe as technology provider for a net-zero
hydrogen complex, ub Alberta, Canada. They will integrate our SynCOR™
technology for blue hydrogen production that will avoid around 1 million
tonnes of CO
2
per year and reduces energy consumption drastically.
HOW WE DRIVE OUR CUSTOMERS’ TRANSITION TOWARD
CARBON EMISSION REDUCTION TECHNOLOGIES
. DRIVING OUR CUSTOMERS’
TRANSITION TOWARD
CARBON EMISSION
REDUCTION TECHNOLOGIES
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OUR BUSINESSHALDOR TOPSOE A/S ANNUAL REPORT 2021
The green hydrogen market is growing fast
with a significant number of projects and
investments already announced globally.
Green hydrogen can be used directly as an
energy carrier, as energy storage, or it can
be used to produce green fuels and
chemicals – and Topsoe has solutions for all
applications.
Topsoe aims to become a global leader in
Power-to-X with its highly efficient solid
oxide electrolysis technology (SOEC). We are
well-positioned as one of very few
companies to offer end-to-end solutions
within green hydrogen, green ammonia,
green methanol, and eFuels. These solutions
can be used in the so-called hard-to-abate
sectors: aviation, shipping, heavy transport,
and heavy industry. These are all industries
where direct electrification is not a viable
option.
In the power and utilities sector, green
hydrogen, green ammonia, and green
methanol can also be used to balance the
power grid, which becomes increasingly
important with the growing – but
intermittent – electricity production from
especially wind turbines and solar panels.
To back our ambitions within Power-to-X,
we restructured our internal setup in 2021 to
be better positioned to pioneer the
development of Power-to-X solutions and
establish meaningful partnerships to not
only develop technology, but also to attract
investments and secure offtake.
Our strong commitment and capabilities
within Power-to-X solidify our unique
position and our potential to become the
'go-to' company for carbon emission
reduction technologies.
OUR STRATEGY
Green hydrogen - going big on electrolyzers
Green hydrogen made from renewable power is a key element in the energy
transition. It holds excellent properties as an energy carrier and can be
transformed into much needed low-carbon fuels for e.g. heavy transportation.
To accelerate the adoption of green hydrogen, Topsoe is investing in a
production facility for electrolyzers expected to be operational by 2024. It will
produce highly efficient solid oxide electrolyzer cells (SOEC) with a
manufacturing capacity of 500 megawatt per year and a potential to expand
to 5 gigawatt. Up to 90% of the renewable electricity that enters a Topsoe
SOEC electrolyzer is preserved in the green hydrogen it produces.
Green ammonia in the making
Green ammonia, produced from renewable energy, is an excellent fuel and
fertilizer that can replace huge volumes of fossil fuels and help accelerate the
energy transition.
Topsoe, together with Skovgaard Invest and Vestas, will build the world’s first
industrial dynamic green ammonia demo plant. Directly coupled to local wind
and solar power generation, the plant will produce more than 5,000 tons of
green ammonia, avoiding 8,200 tons of CO
2
per year. The Danish Energy
Technology Development and Demonstration Program has granted EUR 11
million to the green ammonia project.
eMethanol for carbon neutral chemicals and fuels
Topsoe takes part in a Power-to-X project, led by Liquid Wind. The consortium
will establish commercial-scale facilities producing liquid, carbon neutral
methanol from captured carbon dioxide and green hydrogen. This is a
significant milestone in meeting the growing demand for methanol to be used
for carbon neutral chemicals and fuels.
. BUILDING A LEADERSHIP
POSITION IN POWER-TO-X
HOW WE BUILD A LEADERSHIP
POSITION IN POWER-TO-X
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OUR BUSINESSHALDOR TOPSOE A/S ANNUAL REPORT 2021
OUR STRATEGY
Our well-known technologies and catalysts
play a key role in ensuring energy-efficient
production of the world’s fuels and
chemicals. They have helped us solve some
of the world’s toughest challenges. Our
ammonia solutions supported fertilizer
production that fed growing populations.
When air pollution began to threaten the
environmental stability and public health,
our technologies helped reduce sulfur and
other pollutants from fossil fuel emissions
to environmentally safe levels.
We build our transformation on decades of
experience from developing and delivering
these solutions. And this business is
important for funding our growth within the
energy transition. We will continue to
strengthen our position within low sulfur
fuels, hydrogen, ammonia, and methanol
using our technologies and catalysts.
Furthermore, we strive to maintain our
leading position within sulfur technology
and catalysts used to reduce and eliminate
sulfur emissions and air pollution from
industry.
To ensure that we have the best possible
foundation for our business, we
continuously strive to improve business
operations. On one hand, our way of
operating must always enable optimal
performance at our customers’ sites, and on
the other hand remove unnecessary
production costs.
Throughout 2021, Topsoe-employees have
found ways to generate significant bottom
line savings. Savings, that come in the form
of reduced waste generation, tweaks to
hardware design, removal of non-value
adding tasks, and several digitalization
projects to enable efficient, remote
assistance offered to customer sites. This
has resulted in recurring savings of DKK 285
million.
SUPPORTING THE
UN SUSTAINABLE
DEVELOPMENT GOALS
Our strategy supports the UN’s
Sustainable Development Goals
(SDGs); climate action, affordable
and clean energy, good health
and well-being, decent work and
economic growth, as well as
responsible consumption and
production.
Read more about our impacts on these goals
→ Topsoe’s Sustainability Report
. OPTIMIZING OUR
TRADITIONAL BUSINESS
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OUR BUSINESSHALDOR TOPSOE A/S ANNUAL REPORT 2021
ENERGY SOURCES SOLUTIONS CHEMICALS AND FUELS UTILIZATION
Transportation
Chemicals and fertilizers
Heavy industry
Ammonia
Methanol
Hydrogen
Fuels
Biomass, waste
and carbon
Renewable
electricity
Fossil energy
Fuels and chemicals can be produced
from various ways of both renewable
and fossil feedstocks.
Topsoe helps customers on their
decarbonization journey through advanced
energy solutions, such as Power-to-X, renewable
fuels and blue solutions for the chemicals.
For our customers, the output is more efficient
processes or renewable feedstocks, that
significantly can lower the carbon footprint, and
thereby supporting them in their energy transition.
The societal benefits of these end-products
come, among other things, in the shape of a
cleaner transportation sector and hard-to abate
sectors such as steel, cement, and mining, who
can reduce their carbon footprint.
Topsoe fuel solutions
Topsoe chemical
solutions
Topsoe
electrolysis
solutions
Sulfur removal
Topsoe has a solution-focused business model covering the full
value chain, progressing toward solutions to support our
customers' decarbonization journey.
OUR BUSINESS MODEL
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OUR BUSINESSHALDOR TOPSOE A/S ANNUAL REPORT 2021
Our people are integral to the
success of Topsoe. Wherever
you meet Topsoe’s employees,
you will find that they are
problem solvers. People who
believe that impossible is just a
state of mind and that
challenges are there to be
overcome.
TOPSOE IS
ABOUT MAKING
A POSITIVE
DIFFERENCE
We are working together, sharing our
knowledge, experience and expertise, to
deliver solutions that can help fight climate
change. Just as we delivered solutions when
air pollution began to threaten the
environment and public health, and when
we found new ways to counter the threat of
global food shortage through our fertilizer
technology. In every corner of our business,
in every role and office, you will find people
who are committed to finding answers.
OUR WAY OF WORKING
Topsoe has always been a company with
strong values. We are dedicated to science
and creating a great place to work for our
people while going the extra mile for our
customers and creating sustainable
solutions that make a difference to the
world of today and tomorrow. Our ambitious
vision to become the leader in carbon
emission reduction technologies also
requires us to think and act in new ways and
we have defined five ‘mission critical
behaviors’ to help us do just that.
OUR MISSION CRITICAL BEHAVIORS
→ I set ambitious goals for my work
aligned with business priorities
→ I will trust others and seek to gain
their trust
→ I relentlessly drive to make things better
→ I communicate expectations and give
open and honest feedback
→ I collaborate in the pursuit of
company goals
OUR PEOPLE
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OUR BUSINESSHALDOR TOPSOE A/S ANNUAL REPORT 2021
It is a great responsibility for me to
guide our customers to solve the most
pressing challenge of our generation
– decarbonization toward net zero.
At Topsoe, I get to work with people who
are smart, dedicated and care about each
other. On top of that, I get to use my
energy and experience toward my true
purpose; to create a better world.
BAKUL PANT
Licensing Manager,
India
CATHERINE SMITT MEYER
Senior Manager,
Denmark
21
OUR BUSINESSHALDOR TOPSOE A/S ANNUAL REPORT 2021
Collaboration and teamwork are highly
valued at Topsoe, and it is rewarding to see
the impact of the team's efforts manifested
in the company’s performance, our clients’
successes, and the greater global good.
At Topsoe, I can dive into the science
that makes a difference for the
industry, but also means a positive
change to our planet. That is what
drives me.
PETER MØLGAARD MORTENSEN
Principal Scientist,
Denmark
TRAVIS KIRK
Senior Sales Manager,
North America
22
OUR BUSINESSHALDOR TOPSOE A/S ANNUAL REPORT 2021
FINANCIAL HIGHLIGHTS 2021
Topsoe delivered solid financial results in
2021 in line with its guidance.
→ Revenue increased by 1% to DKK 6,225
million in line with the guidance provided
at the beginning of the year.
→ Strong demand for Topsoe’s renewable
fuels solutions offset negative impact
from COVID-19.
→ Our share of revenue linked to the energy
transition has increased from 2% in 2019,
6% in 2020 and now to 16% in 2021.
→ EBIT before special items grew by 6% to
DKK 903 million.
→ Net profit increased by 85% to DKK 890
million, driven by operational
improvement, the successful divestment
of Topsoe’s shares in Faradion in 2021 and
one-offs in 2020.
Revenue
Total revenue increased by 1% in 2021 to DKK
6,225 million (2020: DKK 6,179 million).
COVID-19 had a negative impact on Topsoe’s
business during 2021, as many refinery and
technology projects were delayed due to
low demand and market uncertainty. This
was especially the case in the first half of
2021, where our revenue declined by 9%.
However, due to general improvements in
the market environment combined with
strong demand for our renewable fuel
offerings, we have been able to deliver 11%
revenue growth in the second half of 2021.
Topsoe’s technology business delivered
double-digit revenue growth, up 13%
compared to 2020. The first part of 2021 was
impacted by COVID-19 related demand and
supply chain challenges within our partner
network, resulting in project delays. During
the year, growth has picked up, driven by
our traditional business as well as the
demand for our new energy transition
solutions. We saw significant strategic wins
within blue hydrogen, blue ammonia, and
renewable fuels that will drive growth in the
years to come.
Topsoe’s catalyst business has been more
severely affected by COVID-19, especially in
Europe where the demand for replacement
catalysts was lower than in 2020. As a result,
our catalyst business saw a 4% decline
compared to 2020. However, the market has
been showing some recovery during the
year, and we have seen strong demand for
GROUP FINANCIAL
REVIEW
our renewable diesel hydroprocessing
catalyst, based on the HydroFlex™
technology, in the important US market.
EBIT before special items
EBIT before special items amounted to DKK
903 million (2020: DKK 853 million), up 6%
compared to 2020. EBIT margin before
special items increased by 0.7%-point to
14.5% (2020: 13.8%). This was driven by lower
operational costs as a result of the
organizational restructuring implemented in
the fourth quarter of 2020. In addition,
Topsoe’s gross margin increased by
1%-point, primarily driven by optimization
within operations. Topsoe continues to
invest in R&D to support its future vision. In
2021, Topsoe increased R&D costs to 9.2%
of revenue, up from 8.3% in 2020.
Total special items of DKK -26 million for
2021 reflects restructuring costs. In 2020
special items amounted to DKK -275 million,
mainly driven by restructuring and legal fees.
Consequently, EBIT after special items
increased by 52% to DKK 877 million (2020:
DKK 578 million).
Net profit
Topsoe’s net profit grew by 85% to DKK 890
million (2020: DKK 480 million). The high
increase was driven by organic growth of
the business combined with the successful
divestment of our shares in the UK-based
battery technology company Faradion. It
should also be seen in the light of significant
one-off costs in 2020, which resulted in a
decrease in net profit compared to the year
before. The divestment of our shares in
Faradion allows us to focus on our own
LNMO (lithium-nickel-manganese oxide)
cathode active material for lithium-ion
batteries.
Cash flow
Cash flows from operating activities
amounted to DKK 500 million (2020: DKK
1,114 million). This decrease was mainly due
to higher net working capital. Net working
capital increased by DKK 705 million in 2021
(compared to a decrease of DKK 176 million
in 2020) and made up 19.1% of revenue
(2020: 6.9%). The higher net working capital
was mainly due to higher raw material
pricing, increased net contract assets, high
sales in December and a receivable from the
sale of Faradion.
24
FINANCIAL RESULTS & OUTLOOKHALDOR TOPSOE A/S ANNUAL REPORT 2021
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
1,400
1,200
1,000
800
600
400
200
0
20
19
18
17
16
1,400
1,200
1,000
800
600
400
200
0
2017
2017
20172018
2018
20182019
2019
20192020
2020
20202021
2021
2021
1000
800
600
400
200
0
15
14
13
12
11
2017 2018 2019 2020 2021
EBITDA
DKK million
REVENUE
DKK million
EBIT BEFORE SPECIAL ITEMS
DKK million
CASH FLOWS FROM OPERATING ACTIVITIES
DKK million
FINANCIAL PERFORMANCECAPEX decreased by 10% to DKK 370 million
(2020: DKK 411 million). CAPEX includes
investments in intangible assets (patents,
software), property, and plants and
equipment.
Return on invested capital (ROIC)
ROIC amounted to 28.5% (2020: 29.8%)
driven by the 6% increase in EBIT before
special items offset by the development in
net working capital.
Financial covenants
Financial covenants as of December 31,
2021, were all met.
Order backlog
The order backlog amounted to DKK 3,634
million at the end of 2021, a decrease of DKK
628 million, or 15%, compared to 2020. The
reduction in backlog is primarily a result of
delays in new catalyst orders caused by
COVID-19 and shorter lead times in the
market. The order backlog by the end of
2021 is still healthy despite the reductions
seen during the COVID-19 pandemic. In
2022, we expect to see the order backlog
returning to a growth trajectory.
1,149
6,179
1,178
853
307
5,897
1,125 806
1,189
5,617
1,036
780
137
5,011
852
595
500
6,225
1,233
903
25
FINANCIAL RESULTS & OUTLOOKHALDOR TOPSOE A/S ANNUAL REPORT 2021
FIVE-YEAR SUMMARY
Income statement
DKK million 2021 2020 2019 2018
1)
2017
1)
Revenue 6,225 6,179 5,897 5,617 5,011
Gross profit 2,884 2,789 2,782 2,620 2,391
EBITDA 1,233 1,178 1,125 1,036 852
Depreciation and amortization -330 -325 -319 -256 -257
EBIT before special items 903 853 806 780 595
Special items -26 -275 136 -72 0
EBIT after special items 877 578 942 708 595
Net financial expenses, etc. 167 -29 -4 -16 -66
Profit from continuing operations 880 435 714 507 403
Profit/loss from discontinuing operations 10 45 0 -16 -422
Net profit 890 480 714 491 -19
Balance sheet
Balance sheet total 7,162 6,688 6,694 5,356 5,917
Equity 2,929 2,139 1,730 1,046 1,452
Net working capital 1,132 427 602 447 668
Net interest-bearing debt 136 203 871 756 855
Cash flow
Cash flows from operating activities 500 1,114 307 1,189 137
- of which continuing operations 500 1,149 307 1,205 421
Cash flows from investing activities -391 -368 -88 -220 690
- of which investment in Property, plant
and equipment
-330 -325 -213 -251 -211
Cash flows from financing activities -435 -339 -197 -1,194 -586
Employees
Numbers
2021 2020 2019 2018 2017
Average number of employees 2,133 2,268 2,238 2,246 2,527
Ratios
%
Gross margin 46.3 45.1 47. 2 46.6 47.7
EBITDA margin 19.8 19.1 19.1 18.4 17.0
EBIT before special items margin 14.5 13.8 13.7 13.9 11.9
EBIT after special items margin 14.1 9.4 16,0 12.6 11.9
Return on invested capital (ROIC) 28.5 29.8 30.6 32.4 25.0
Equity ratio 40.9 32.0 25.8 19.5 24.5
Return on equity 35.1 24.8 51.4 39.3 -1.1
Leverage ratio 0.2 0.2 0.8 0.7 1.0
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 2017-2018 have not been
restated.
26
FINANCIAL RESULTS & OUTLOOKHALDOR TOPSOE A/S ANNUAL REPORT 2021
OUTLOOK 2022
Outlook 2022
Topsoe enters 2022 with a healthy order
book allowing for solid financial performance
in 2022 with positive single digit revenue
growth. The global energy transition will
remain the key driver of growth.
Russia’s invasion of Ukraine has taken place
after the end of the reporting period. This
war is expected to have a negative impact
on the financial performance of Topsoe.
Currently, a reliable estimate of the financial
effect on the consolidated financial
statements cannot be made and is not
reflected in the outlook above.
Funding
Topsoe’s current funding position is strong,
based on access to green funding, the
corporate bond market, institutional banks
as well as commercial banks. Committed
revolving credit facilities are also available.
Topsoe intends to maintain a credit profile
that will ensure compliance with all bank
covenants at any time.
FORWARD-LOOKING STATEMENTS
Haldor Topsoe A/S ’ financial reports,
whether in the form of annual reports or
interim reports, as well as any presentations
based on such financial reports, and any
other written information released, or oral
statements made, to the public based on
this annual report or in the future on behalf
of Haldor T opsoe A/S , may contain forward-
looking statements.
These forward-looking statements are
based on current plans, estimates and
projections. By their very nature, forward-
looking statements involve inherent risks
and uncertainties, both general and specific,
which may be outside Haldor Topsoe A/S’
influence, and which could materially affect
such forward-looking statements.
Haldor Topsoe A/S cautions that a number
of factors, including those described in the
risk management part of this report, could
FINANCIAL OUTLOOK 2022
cause actual results to differ materially from
those contemplated in any forward-looking
statements.
27
FINANCIAL RESULTS & OUTLOOKHALDOR TOPSOE A/S ANNUAL REPORT 2021
2019 2020 2021
164
156
127
CARBON FOOTPRINT
Thousand tonnes CO
2
e
In 2021, greenhouse gas emissions from
our operations were 19% lower compared
to 2020 and 23% lower compared to 2019
(scope 1 and 2, market-based).
29
HALDOR TOPSOE A/S ANNUAL REPORT 2021 SUSTAINABILITY
25
398
Scope 1
Scope 2 – Market-based
Scope 3 - Upstream
Scope 3 - Downstream
25
94
33
398
Scope 1
Scope 2 – Market-based
Scope 3 - Upstream
Scope 3 - Downstream
TOTAL VALUE CHAIN GHG
EMISSIONS 2021
(thousand tonnes CO
2
e)
TOTAL
550
30
HALDOR TOPSOE A/S ANNUAL REPORT 2021 SUSTAINABILITY
2021
0.7
20202019
1.3
0.9
0.7
Total recordable incident frequency (TRIF)
per 200,000 working hours.
SAFETY
Ratio
31
HALDOR TOPSOE A/S ANNUAL REPORT 2021 SUSTAINABILITY
SUSTAINABILITY
REPORT 2021
→ Topsoe’s Sustainability Report
Read our Sustainability Report for a deep dive on
material environmental, social and governance
topics to Topsoe. This report also constitutes our
UN Communication on Progress.
WANT TO KNOW MORE?
Diversity
GOVERNANCE
Topsoe
Compliance Hotline
→ Read more
32
HALDOR TOPSOE A/S ANNUAL REPORT 2021 SUSTAINABILITY
34
HALDOR TOPSOE A/S ANNUAL REPORT 2021 CORPORATE GOVERNANCE
COMPLIANCE
BEHAVIOR
Applicable laws &
regulations
Code of Conduct
Mission Critical
Behaviors
GOVERNANCE
SHAREHOLDERS
BOARD OF DIRECTORS
SENIOR LEADERSHIP TEAM
GLOBAL LEADERSHIP TEAM
ORGANIZATION
REMUNERATION
COMMITTEE
INNOVATION
COMMITTEE
AUDIT
COMMITTEE
ASSURANCE &
DEVELOPMENT
External audits of
compliance, finacials
and evironmental
obligations
Internal audits of
compliance, financials
and quality procedures
Employee engagement
and talent development
GOVERNANCE MODEL
SHAREHOLDERS
Haldor Topsoe A/S is owned by Topsøe
Holding A/S (~69%), Dahlia Investment Pte.
Ltd. (~29%) and company employees
through the Employee Share Program (~1%).
Topsøe family. The family’s strong
commitment to Topsoe’s long-term growth
strategy and continued development is
fundamental to maintaining an innovative
and sustainable company culture in line with
the spirit of the company’s founder.
Dahlia Investment Pte. Ltd. of Singapore is
wholly owned by Temasek, an active investor
committed to long-term investments and
sustainable growth.
BOARD OF DIRECTORS
Topsoe has a two-tier management
structure consisting of the Board of
Directors and the Senior Leadership Team.
The Board supervises the Senior Leadership
Team and has particular focus on
formulating, revising, and reviewing the
company strategy. The two-tier
management structure ensures complete
separation of roles and responsibilities,
where no person serves as a member of both.
Composition and diversity
As of December 31, 2021, the Board of
Directors consisted of 12 members, eight of
whom were elected by shareholders and
four of whom were elected by employees.
Shareholder-elected board members serve
for a one-year term and may be re-elected,
which was the case for all eight members at
the Annual General Meeting in 2021.
Employee-elected board members serve for
a statutory four-year term. The employee-
elected board members are up for election
in 2022.
To ensure that discussions include multiple
perspectives, the Board aspires to be
diverse in both gender, nationality and
backgrounds. The Board comprises four
different nationalities, and board members
bring a variety of backgrounds in business,
engineering, physics, economy and law
coupled with extensive experiences and
expertise across a wide range of sectors,
businesses and institutions.
35
HALDOR TOPSOE A/S ANNUAL REPORT 2021 CORPORATE GOVERNANCE
As of December 31, 2021, the shareholder-
elected board members comprised one
female and seven male members. Given that
there were no changes to the Board
composition in 2021, our target of two
female board members by 2024 was not
met. The Board continues to focus on this
target when evaluating the Board's
composition, competencies and potential
future candidates. When including the
employee-elected board members, four
members were female, and eight members
were male.
Evaluation
The Board conducts evaluations on a regular
basis. In 2021, the board evaluation was
facilitated by an external consultant working
exclusively with board effectiveness reviews.
The evaluation covered all board members
as well as the CEO and the CFO and
included topics such as board performance
and competencies, main focus areas and
prioritization, quality and effectiveness of
board meetings and material, performance
of board committees as well as the
collaboration in the Board and between the
Board, its committees and the Senior
Leadership Team.
Overall, the evaluation revealed a very solid
performance by the Board and good
collaboration in the Board and between the
Board, its committees and the Senior
Leadership Team. The Board reviewed and
discussed the results of the evaluation
together with the external consultant, and
individual feedback meetings were
subsequently held between the Chairman
and the individual board members. Specific
actions were agreed upon for each of the
focus points identified, and these will be
addressed in subsequent board meetings.
BOARD COMMITTEES
Audit Committee
The Audit Committee assists the Board with
oversight of the company’s financial
performance, auditing, accounting,
investments, and other relevant financial
matters. The Audit Committee is appointed
by the Board and consists of: Jakob Topsøe
(Chairman), Jeppe Christiansen, and Rohit
Sobti.
Remuneration Committee
Topsoe’s Remuneration Committee is tasked
with ensuring appropriate policies for fair
employee, senior management, and Board
pay. The Remuneration Committee is
appointed by the Board and consists of:
Jørgen Huno Rasmussen (Chairman), Jeppe
Christiansen, Jakob Topsøe, and Benoit
Valentin.
Innovation Committee
The Innovation Committee assists the Board
with the innovation strategy, the pipeline
and the organization and competences
needed. The Innovation Committee is
appointed by the Board and consists of:
Jens K. Nørskov (Chairman), Christina
Topsøe, Rohit Sobti, and Anders Broe
Bendtsen.
SENIOR LEADERSHIP TEAM
The responsibility for the overall day-to-day
management of Topsoe lies with the Senior
Leadership Team. The team consists of the
CEO and CFO, and the heads of Strategy &
Innovation, R&D, Green Hydrogen, Supply,
Legal Affairs, Human Resources, and
Communications & Brand. Responsibilities
include overall business conduct,
determination and implementation of
strategies and policies, direction setting and
ensuring timely reporting and provision of
information to the Board of Directors.
COMPLIANCE & BEHAVIOR
Understanding external expectations and
obligations and working diligently to meet
these is fundamental to Topsoe. Our Code
of Conduct and underlying policies and
procedures ensure that we comply with
applicable laws and regulations. The Topsoe
Mission Critical Behaviors guide our
interactions, decisions, and actions.
ASSURANCE & DEVELOPMENT
Operating in a financially responsible
manner, improving and certifying processes
to meet high business standards, and
developing our people are important
elements to ensure a sustainable business
model. Both external and internal measures
are taken to audit, review, and continuously
develop our processes, as well as our most
valuable asset, our employees.
36
HALDOR TOPSOE A/S ANNUAL REPORT 2021 CORPORATE GOVERNANCE
BOARD OF DIRECTORS
Member of the Board since 2020.
Senior advisor focusing on China-specific
strategies along the chemicals value chain
and serving in roles with industry association
boards in China, including the European
Chemical Industry Council (Cefic) and the
China Petroleum and Chemical Industry
Federation (CPCIF).
M.Eng. (Chem.) from McGill University (1986).
Vice Chairman of the Board and member of
the Remuneration Committee since 2019.
Deputy Head EMEA, Head of Private Equity
Fund Investments, Head of Impact Investing
at Temasek. Non-Executive Director at
Tikehau Capital Associés, Tana Africa Capital,
Axereal Malt Holding and LeapFrog
Investments.
MA in Business from HEC Paris (École des
Hautes Études Commerciales de Paris),
France (1990).
Vice Chairman of the Board since 2016
(member since 2010), Chairman of the Audit
Committee since 2016 (member since 2010),
and member of the Remuneration
Committee since 2015.
Chairman of the Board of Topsøe Holding
A/S and member of the Board of IGM
Biosciences, Inc.
Graduate Diploma in Business Administration
from Copenhagen Business School, Denmark
(1994).
Chairman of the Board since 2016 (member
since 2010), member of the Audit Committee
since 2010, and member of the Remuneration
Committee since 2014.
Chief Executive Officer and founder of Maj
Invest Holding A/S as well as board member
and/or executive director of two wholly owned
subsidiaries of this company, both in Denmark.
Vice Chairman of Novo Nordisk A/S. Chairman
of Emlika Holding ApS, and two wholly owned
subsidiaries of the latter company, and
Chairman of JEKC Holding ApS. Board member
of Novo Holdings A/S and KIRKBI A/S, Pluto
Naturfonden and Randers Regnskov, all in
Denmark. Member of the Board of BellaBeat
Inc., U.S. Member of the Board of Governors of
Det Kgl. Vajsenhus, Denmark. Adjunct
Professor, Department of Finance, Copenhagen
Business School, Denmark.
MSc in Economics from University of
Copenhagen, Denmark (1985).
POSITIONS AND
MANAGEMENT
DUTIES
EDUCATION
JAN KREIBAUM
MEMBER
BENOIT VALENTIN
VICE CHAIRMAN
JAKOB HALDOR TOPSØE
VICE CHAIRMAN
JEPPE CHRISTIANSEN
CHAIRMAN
37
HALDOR TOPSOE A/S ANNUAL REPORT 2021 CORPORATE GOVERNANCE
Member of the Board since 2013, and
member of the Innovation Committee
since 2016.
Member of the Boards of Topsøe Holding A/S
and IGM Biosciences, Inc.
BSc in Chinese studies from the University of
Copenhagen, Denmark and the Peking
University, China (2003). Bachelor of Laws
(LL.B.) at SOAS, University of London, UK
(2006) and LPC at the University of Law,
London, UK (2007). MBA from Columbia
Business School, USA (2018).
Member of the Board, the Innovation
Committee and the Audit Committee
since 2019.
Managing Director, Investments, in Temasek’s
Industrials, Business Services and Energy
cluster. Non-executive Director on the Board
of Schneider Electric India Pvt. Ltd.
MBA from the Institute of Management
Technology, India (1992) and B.Eng.
Electronics from the B.M.S. College of
Engineering, India (1989).
Member of the Board since 2013, and
Chairman of the Remuneration Committee
since 2014.
Vice Chairman of the Boards of Terma A/S,
Rambøll Group A/S, STIBOFONDEN and Stibo
Holding A/S. Member of the Boards of Bladt
Industries A/S, Otto Mønsted A/S, Thomas B.
Thriges Foundation, and Aase and Jørgen
Münters Foundation.
MSc (1976) and PhD (1980) from the Technical
University of Denmark. Graduate Diploma in
Business Administration from Copenhagen
Business School, Denmark (1977), where Mr.
Rasmussen is also Adjunct Professor.
Member of the Board since 2010, and
Chairman of the Innovation Committee
since 2015.
Villum Kann Rasmussen Professor, Catalysis
Theory Center, Technical University of
Denmark. Chairman of the Board of The Danish
National Research Foundation.
PhD from Aarhus University, Denmark (1979),
and honorary doctorates from Technical
University of Eindhoven (2006), Norwegian
University of Science and Technology (2012),
and Technical University of Munich (2018).
POSITIONS AND
MANAGEMENT
DUTIES
EDUCATION
CHRISTINA TENG TOPSØE
MEMBER
ROHIT SOBTI
MEMBER
JØRGEN HUNO RASMUSSEN
MEMBER
JENS KEHLET NØRSKOV
MEMBER
BOARD OF DIRECTORS
38
HALDOR TOPSOE A/S ANNUAL REPORT 2021 CORPORATE GOVERNANCE
Member of the Board since 2019 (employee
representative).
Research Specialist in the Clean Air
Applications department in Research &
Development, Haldor Topsoe A/S.
1998
Professional Bachelor’s Degree as a
Laboratory Technician specializing in
chemistry (1996).
Member of the Board since 2005 (employee
representative).
HSE System Manager in the QC & HSE
department in Global Supply, Haldor Topsoe
A/S.
1986
Academy Profession Degree in technology
(1985).
Member of the Board since 2018 (employee
representative).
Group Manager in the Support and
Maintenance Projects department in Global
Supply, Haldor Topsoe A/S.
1992
Academy Profession Degree in technology
(1991).
Member of the Board since 2018 (employee
representative), and member of the Innovation
Committee since 2020.
Senior Patent Counsel in the Intellectual
Property department in Global Legal Affairs,
Haldor Topsoe A/S.
2010
PhD in Chemical Engineering from the
Technical University of Denmark (1999),
registered European Patent Attorney (2012).
POSITIONS AND
MANAGEMENT
DUTIES
JOINED TOPSOE
EDUCATION
LIS IBSEN
MEMBER
JETTE SØVANG CHRISTIANSEN
MEMBER
CHRISTINA BORCH
MEMBER
ANDERS BROE BENDTSEN
MEMBER
BOARD OF DIRECTORS
39
HALDOR TOPSOE A/S ANNUAL REPORT 2021 CORPORATE GOVERNANCE
KIM S. HEDEGAARD
CHIEF OPERATING OFFICER
Kim Hedegaard is in charge of Global
Supply. He joined Topsoe in 1999 and
has held various leadership positions in
the company within engineering,
technology, and sales. He has been
globally responsible for Catalyst
Production and Technology since 2017.
Mr. Hedegaard serves as Vice Chairman
of the Board of Process Industry, a
member organization under the
Confederation of Danish Industries. He
is also a member of the Board at the
secondary education institution U/
NORD and of the Board at FlexHospital.
Mr. Hedegaard holds an MSc in
Chemical Engineering from the
Technical University of Denmark (1999).
SENIOR LEADERSHIP TEAM
ROELAND BAAN
PRESIDENT & CHIEF EXECUTIVE
OFFICER
Roeland Baan joined Topsoe CEO in
2020. From 2016, Mr. Baan was
President and CEO of Outokumpu, a
global stainless steel company listed on
the Finnish stock exchange. Previously,
Mr. Baan held a wide range of global
CEO and Executive Vice President
(EVP) positions at Aleris International,
Arcelor Mittal, SHV NV, and Shell.
Mr. Baan is Chairman of the Board of
SBM Offshore NV.
Mr. Baan holds an MSc in Economics
from Vrije Universiteit Amsterdam, the
Netherlands (1980).
PHILIP EICKHOFF
CHIEF FINANCIAL OFFICER
Philip Eickhoff joined Topsoe as CFO in
2020. From 2014, Mr. Eickhoff served as
CFO of Atos Medical, a private
equity-owned medical technology
company. Previously, he held several
leadership positions at Coloplast,
including Regional CFO of North
America and VP Strategy & M&A.
Mr. Eickhoff has a consulting
background from Bain & Company
where he served both corporate and
private equity clients on strategic and
M&A engagements.
Mr. Eickhoff holds an MSc in Finance
and Accounting from Copenhagen
Business School, Denmark (2004), and
University of Michigan, US (2003).
KRISTINE AHRENSBACH
CHIEF COMMUNICATIONS &
BRAND OFFICER
Kristine Ahrensbach joined Topsoe in
2014. Previously, she held positions as
Director of Corporate Communications
at Chr. Hansen, Brand Manager at the
Danish Agriculture & Food Council,
Danish Crown and Arla Foods and as
consultant for International Internship
Programs based in Tokyo.
Ms. Ahrensbach holds an MA in
Japanese, French, and Business
Administration from the University of
Copenhagen, Denmark (1993), and a
supplementary degree in Corporate
Communications from Copenhagen
Business School (CBS), Denmark
(2004). External examiner since 1997 at
Copenhagen Business School (CBS).
PETER KIRKEGAARD
CHIEF HUMAN RESOURCES
OFFICER
Peter Kirkegaard joined Topsoe in 2021.
Since 2016, he served as Executive Vice
President, Chief People & Culture
Officer, at Hempel A/S, which he joined
in 2007 as Vice President. Before that,
Mr. Kirkegaard had a 15-year career
with Accenture as Partner leading the
Human Performance and Finance &
Performance Management service
lines.
Mr. Kirkegaard holds an MSc in Political
Science from University of Aarhus,
Denmark (1991), and an MA in
International Relations from University
of Reading, UK (1989).
40
HALDOR TOPSOE A/S ANNUAL REPORT 2021 CORPORATE GOVERNANCE
LENE RAMM
GROUP GENERAL COUNSEL
Lene Ramm has been with Topsoe since
2003. Before joining Topsoe, Ms. Ramm
served as Attorney-at-Law at Kromann
Reumert and Head of Section in the
Danish Ministry of Foreign Affairs.
Ms. Ramm holds an MA in Law from the
University of Copenhagen, Denmark,
and a supplementary degree in
Business Administration and
Management from Columbia Business
School, US. (2017).
SENIOR LEADERSHIP TEAM
JESPER NERLOV
CHIEF TECHNOLOGY OFFICER
Jesper Nerlov joined Topsoe in 1998 and
has overseen Topsoe’s Research &
Development since 2008.
Mr. Nerlov is a member of the Board of
the Danish Eco-Innovation Program
(MUDP) under the Ministry of
Environment of Denmark. He also serves
as Vice Chairman of the Danish
Environmental Technology Association,
member of the Board of
Representatives of the Technical
University of Denmark, member of the
Confederation of Danish Industries’
Committee for Research and Education,
and member of the Advisory Board for
Science at the University of
Copenhagen.
Mr. Nerlov holds a PhD in Physical
Chemistry from the University of
Copenhagen, Denmark (1992).
CHOKRI MOUSAOUI
EXECUTIVE VICE PRESIDENT
POWER-TO-X
Chokri Mousaoui joined Topsoe in 2021
as EVP, when the Green Hydrogen
organization was established.
In 2011, Mr. Mousaoui co-founded
Eternal Sun, a spin-off from Delft
University of Technology specialized in
equipment for testing solar modules.
The company evolved from a startup to
the market leader within solar testing.
In 2019, he exited the company to a
private equity fund.
Mr. Mousaoui is a member of the
Supervisory Board of the Energy
Transition Fund in Rotterdam, the
Netherlands, and the Advisory Council
of the Dutch Government on Science,
Technology and Innovation.
Mr. Mousaoui studied Systems
Engineering and Policy Analysis &
Management at Delft University of
Technology, the Netherlands (2010).
KIM GRØN KNUDSEN
CHIEF STRATEGY & INNOVATION
OFFICER
Kim Grøn Knudsen has been a member
of Topsoe’s Senior Leadership Team
since 2012 and has headed the New
Business, Environmental Business, and
Refinery Business units. Before that, he
held a number of positions within
Topsoe’s Research & Development,
including Vice President. Mr. Knudsen
joined Topsoe in 1996, leaving a
position as Research Associate
Professor at the Technical University of
Denmark.
Mr. Knudsen holds a MSc (1990) and a
PhD (1992) in Chemical Engineering
from the Technical University of
Denmark.
41
HALDOR TOPSOE A/S ANNUAL REPORT 2021 CORPORATE GOVERNANCE
RISK MANAGEMENT
Scenario and risk thinking exercises are part
of our strategic planning process. They
include analysis of market dynamics as well
as of economic and political developments
that present opportunities or risks for our
business.
Topsoe is exposed to a variety of risks in
connection with its business operations. In
addition to strategic and operational risks,
Topsoe is exposed to financial risks such as
interest rates, exchange rates, commodity
prices, credit risk and insurance risk.
Topsoe operates an Enterprise Risk
Management set-up for the purpose of
identifying, quantifying and mitigating risks
that could have an adverse impact on
Topsoe’s operations.
Each year, risks are identified and assessed
and mitigating actions are agreed upon
after thorough dialog with management
teams across the organization. The Senior
Leadership Team, Audit Committee and the
Board of Directors oversees the progress in
the mitigation of the identified risks.
MAIN FOCUS AREAS IN 2021
Main focus in 2021 has been on the transition
risks of moving towards a low-carbon (or
zero-carbon) economy and the inherent
impact on Topsoe's traditional core business.
GEOPOLITICAL RISK
Topsoe operates globally including regions
where we are exposed to geopolitical
instability and risks that may impact demand
for our solutions and our ability to deliver. As
part of our risk management processes, we
are assessing and screening our customers
and business partners to secure compliance
with all regulation and sanctions.
In addition, the geopolitical risks may also
impact Topsoe’s ability to source raw
material, energy and other components
used in our supply chain.
As reported under subsequent events,
Russia’s invasion of Ukraine has taken place
after the end of the reporting period. This
war is expected to have a negative impact
on the financial performance of Topsoe.
Topsoe monitors the situation closely to
TOPSOE'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 key for us to
create and protect value over the short, medium, and long term.
42
HALDOR TOPSOE A/S ANNUAL REPORT 2021 CORPORATE GOVERNANCE
assess the implications and impact, both
near-term and long-term.
TRANSITIONAL CLIMATE RISK
The global energy consumption is expected
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 today, we provide chemical
and fuel producers with solutions for
energy-efficient production. At the same
time, we see a push for accelerating the
transition to renewable energy sources 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-fossil-based technologies
within green hydrogen, green ammonia,
eMethanol, and eFuels.
OVERVIEW OF TOPSOE’S KEY RISKS
STRATEGIC RISKS OPERATIONAL RISK FINANCIAL RISKS
→ Industry and climate related exposure
transition change
→ Geopolitical and economic instability
→ Exposure to new business models
→ Cyber risk / Cyber attack
→ Increasing complexity in regulatory
legislation
→ Operation disruption (incl. geopolitical
risk and COVID-19)
→ Inability to attract, develop and retain
talent
→ Non-compliance, law and regulations
→ IP infringement risk
→ Financial risks to Loss of revenue and
credit exposure to customers’ solvency
CYBER RISK
In recent years, several major cyber-attacks
have been launched against companies
around the world, and we see growth in
serious cyber operations in closer proximity
to our business.
Being a knowledge-based and increasingly
digitalized company, Topsoe is exposed
to information security risks. The threat of
cyber-attacks is increasing, and a major
malware attack could lead to severe
business disruption. Topsoe is continuously
monitoring the efforts within this area to
ensure stable and secure digital
environments.
COVID-19
The COVID-19 pandemic continues to
impact the global economy and the world’s
supply chains.
While COVID-19 has naturally challenged
our supply chain at times, we have not
experienced major disruptions such as
supply failures, and we have been able to
continue our production more or less
as usual.
During 2021, we have focused on
safeguarding the health, safety and
well-being of our employees.
43
HALDOR TOPSOE A/S ANNUAL REPORT 2021 CORPORATE GOVERNANCE
Consolidated financial statements
Income statement
Statement of comprehensive income
Balance sheet
Statement of cash flows
Statement of changes in equity
Notes
Financial statements of Haldor Topsoe A/S
Income statement
Balance sheet
Statement of changes in equity
Notes
Management’s statement
and auditor’s report
Statement by the Executive Management
and the Board of Directors
Independent auditor’s report
FINANCIAL
STATEMENTS
HALDOR TOPSOE A/S ANNUAL REPORT 2021 CONSOLIDATED FINANCIAL STATEMENTS
44
Income statement
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
CONSOLIDATED
FINANCIAL
STATEMENTS
HALDOR TOPSOE A/S ANNUAL REPORT 2021
45
CONSOLIDATED
FINANCIAL
STATEMENTS
CONSOLIDATED
FINANCIAL
STATEMENTS
CONSOLIDATED FINANCIAL STATEMENTS
DKK million Note
Revenue . 6,225 6,179
Other operating income . 67 76
Purchased equipment for contract work -539 -570
Raw materials and consumables used -1,782 -1,842
Other external expenses -1,087 -1,054
Gross profit 2,884 2,789
Staff costs . -1,651 -1,611
EBITDA 1,233 1,178
Depreciation, amortization and impairment losses -330 -325
EBIT before special items 903 853
Special items . -26 -275
EBIT after special items 877 578
Result of investments in joint ventures and associated companies . 132 -8
Financial income . 136 108
Financial expenses . -101 -129
Profit before tax 1,044 549
Ta x . -164 -114
Profit from continuing operations 880 435
Profit from discontinuing operations . 10 45
Net profit 890 480
Attributable to:
Owners of the parent company 887 481
Non-controlling interests 3 -1
Net profit 890 480
Earnings per share, continuing operations . 2.31 1.15
Earnings per share . 2.34 1.27
CONSOLIDATED INCOME
STATEMENT
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
DKK million Note
Net profit 890 480
Foreign currency translation adjustment 103 -108
Other 1 1
Items that will be reclassified to the income statement 104 -107
Fair value adjustment of investments in other enterprises -8 -38
Actuarial adjustments on pension obligations 47 -2
Tax on this . -11 1
Items that will not be reclassified to the income statement 28 -39
Other comprehensive income 132 -146
Total comprehensive income 1,022 334
Continuing operations 1,012 289
Discontinuing operations 10 45
Total comprehensive income 1,022 334
Attributable to:
Owners of the parent company 1,018 336
Non-controlling interests 4 -2
Total comprehensive income 1,022 334
46
HALDOR TOPSOE A/S ANNUAL REPORT 2021 CONSOLIDATED FINANCIAL STATEMENTS
Assets
DKK million Note
Intangible assets . 184 162
Property, plant and equipment . 1,760 1,618
Right-of-use assets . 498 555
Deferred tax asset . 11 8
Other non-current assets . 320 266
Non-current assets 2,773 2,609
Inventories . 1,647 1,492
Trade receivables . 1,232 1,079
Contract assets . 270 188
Tax receivable 62 62
Other receivables and prepayments . 306 83
Cash 872 1,175
Current assets 4,389 4,079
Assets 7,162 6,688
CONSOLIDATED BALANCE SHEET
Equity and liabilities
DKK million Note
Share capital . 379 379
Share premium . 71 68
Reserves 86 -9
Retained earnings 2,393 1,701
Equity attributed to the owners of the parent company 2,929 2,139
Non-controlling interests 12 8
Total equity 2,941 2,147
Pension obligations . 37 42
Deferred tax . 479 419
Provisions . 175 290
Borrowings . 452 574
Lease liabilities . 467 509
Other payables . 105 100
Non-current liabilities 1,715 1,934
Borrowings . 122 123
Lease liabilities . 68 76
Contract liabilities . 1,179 1,378
Trade payables 568 419
Tax payable 7 1
Other payables . 526 564
Deferred income 36 46
Current liabilities 2,506 2,607
Liabilities 4,221 4,541
Equity and liabilities 7,162 6,688
47
HALDOR TOPSOE A/S ANNUAL REPORT 2021 CONSOLIDATED FINANCIAL STATEMENTS
DKK million Note
EBITDA 1,233 1,178
Special items . -26 -275
Adjustments for non-cash items . 73 209
Change in working capital . -707 176
Interest received, etc. 103 68
Interest paid, etc. -77 -113
Corporate income tax paid -99 -129
Cash flows from operating activities 500 1,114
- of which continuing operations 500 1,149
Purchase of intangible assets -65 -66
Purchase of property, plant and equipment -330 -325
Sale of property, plant and equipment 1 1
Purchase of non-current financial assets -30 -20
Sale of non-current financial assets 0 2
Dividend received 33 40
Cash flows from investing activities -391 -368
CONSOLIDATED CASH FLOW
STATEMENT
DKK million Note
Proceeds from borrowings 0 261
Repayment of borrowings -123 -596
Installments on lease liabilities -75 -75
Received share capital 3 71
Dividend paid -240 0
Cash flows from financing activities -435 -339
Cash flows for the year -326 407
Cash and cash equivalents at January 1,175 787
Foreign currency translation adjustments 23 -19
Cash and cash equivalents at December 872 1,175
Cash 872 1,175
Cash and cash equivalents at December 872 1,175
48
HALDOR TOPSOE A/S ANNUAL REPORT 2021 CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
DKK million
Share
capital
Share
premium
Foreign
currency
translation
reserve
Reserve for
financial
assets
measured
at fair value
Total
reserves
Retained
earnings Total
Non-
controlling
interests
Total
equity
Equity at January , 379 68 -44 35 -9 1,701 2,139 8 2,147
Net profit 0 0 0 0 0 887 887 3 890
Foreign currency translation adjustment 0 0 102 0 102 0 102 1 103
Fair value adjustment of investments in other enterprises 0 0 0 -8 -8 0 -8 0 -8
Other 0 0 1 0 1 36 37 0 37
Other comprehensive income 0 0 103 -8 95 36 131 1 132
Comprehensive income 0 0 103 -8 95 923 1,018 4 1,022
Capital increase 0 3 0 0 0 0 3 0 3
Dividend paid 0 0 0 0 0 -240 -240 0 -240
Employee Share Program - value of employee services 0 0 0 0 0 4 4 0 4
Share-based payments 0 0 0 0 0 5 5 0 5
Transactions with owners 0 3 0 0 0 -231 -228 0 -228
Equity at December , 379 71 59 27 86 2,393 2,929 12 2,941
49
HALDOR TOPSOE A/S ANNUAL REPORT 2021 CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
DKK million
Share
capital
Share
premium
Foreign
currency
translation
reserve
Reserve for
financial
assets
measured
at fair value
Total
reserves
Retained
earnings Total
Non-
controlling
interests
Total
equity
Equity at January , 376 0 63 73 136 1,218 1,730 9 1,739
Net profit 0 0 0 0 0 481 481 -1 480
Foreign currency translation adjustment 0 0 -108 0 -108 0 -108 0 -108
Fair value adjustment of investments in other enterprises 0 0 0 -38 -38 0 -38 0 -38
Other 0 0 1 0 1 -1 0 0 0
Other comprehensive income 0 0 -107 -38 -145 -1 -146 0 -146
Comprehensive income 0 0 -107 -38 -145 480 335 -1 334
Capital increase 3 68 0 0 0 0 71 0 71
Employee Share Program - value of employee services 0 0 0 0 0 3 3 0 3
Transactions with owners 3 68 0 0 0 3 74 0 74
Equity at December , 379 68 -44 35 -9 1,701 2,139 8 2,147
50
HALDOR TOPSOE A/S ANNUAL REPORT 2021 CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE
CONSOLIDATED
FINANCIAL
STATEMENTS
Basis of reporting
. Basis of preparation
. Changes in accounting policies
. Key accounting estimates and judgements
Income statement
. Revenue
. Other operating income
. Staff costs
. Special items
. Income tax and deferred tax
Operating assets and liabilities
. Intangible assets
. Property, plant and equipment
. Right-of-use assets
. Other non-current assets
. Inventories
. Trade receivables
. Contract assets and liabilities
. Other receivables and prepayments
. Pension obligations
. Provisions and contingent liabilities
. Other payables
4 Capital structure and financial items
. Equity, dividend and earning per share
. Borrowings and lease liabilities
. Financial assets and liabilities
. Financial income and expenses
Other notes
. Share-based payment
. Fee to auditors appointed at the
general meeting
. Related parties
. Cash flow specifications
. Commitments
. Events after the balance sheet date
. Group enterprises
. Discontinuing operations
51
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 BASIS OF REPORTING
1.1 Basis of preparation
INTRODUCTION
The financial statements for comprise the con-
solidated financial statements of Haldor Topsoe A/S
and its subsidiaries.
The consolidated financial statements have been
prepared in accordance with the International Financial
Reporting Standards (IFRS), as adopted by the EU, and
further requirements in the Danish Financial State-
ments Act for class C large companies.
The financial statements are presented in Danish kro-
ner (DKK) and rounded to the nearest million, unless
otherwise stated.
The Board of Directors considered and approved the
Annual Report of Haldor Topsoe A/S on March
, . The Annual Report will be submitted to the
shareholders of Haldor Topsoe A/S for approval at the
Annual General Meeting on April , .
BASIS OF MEASUREMENT
The consolidated financial statements have been
prepared on the historical cost basis, except for deriv-
atives and investments 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, Haldor Topsoe A/S, and all subsidiar-
ies controlled by Haldor Topsoe A/S.
The consolidated financial statements have been pre-
pared 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 financial 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 translation of non-monetary items, such as
investments in associated companies, are recognized
directly in other comprehensive income.
Recognition in the consolidated financial statements
On preparation of the consolidated financial state-
ments, 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 trans-
lation of the income statement from the exchange
rate at the transaction 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 exter-
nal assistance, 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, such as gain and
loss from disposal of assets, 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, install-
ments 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 con-
solidated financial statements, the notes to the state-
ments and other measures 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 classifications and
changes.
This objective is achieved by presenting fair trans-
actional aggregation levels on line items and other
financial information, emphasizing information that
is considered of material importance to the user and
making relevant rather than generic descriptions
throughout the Annual Report. 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.
52
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Gross margin =
Gross profit ×
Revenue
EBITDA margin =
EBITDA ×
Revenue
EBIT before special
items margin
=
EBIT before special items ×
Revenue
EBIT after special items
margin
=
EBIT after special items ×
Revenue
Return on invested
capital
=
EBIT before special items ×
Average invested capital
Equity ratio =
Equity at year-end ×
Balance sheet total
Return on equity =
Net profit ×
Average equity
Leverage =
Net interest-bearing debt
EBITDA
Earnings per share =
Profit from continuing operations
Average number of shares
When preparing the consolidated financial statements,
Management is required to make several estimates
and judgements. These estimates and judgements are
based on professional experience, historical data and
other factors available to Management. Actual results
may differ from the amounts estimated and judge-
ments made, as more detailed information 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
significant accounting estimates and judgements are
applied are:
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 . Furthermore, the
use of special items is applied to improve the trans-
parency and understanding of the Group’s financial
statements by separating the ordinary activities of the
Group from exceptional items. Please refer to note .
Special items for further information.
Five-year summary
The key figures and financial ratios have been calculat-
ed as follows:
The accounting policies are unchanged from last year.
Leased assets have been reclassified from property,
plant and equipment to a separate balance sheet item
called Right-of-use assets to make it easier for users
to assess the impact of these assets. The impact is a
decrease in property, plant and equipment amounting
to DKK million as per December , and an
increase in right-of-use asset by the same amount.
New standards and amenments not yet implemented
IASB has issued a number of amended standards and
interpretations which are not yet in effect or endorsed
by the EU, and which have consequently not been
incorporated in the consolidated financial state-
ments for . The following amendments could be
relevant to the Group, but have not yet been adopted
by the EU:
- IAS Accounting policies, changes in accounting
estimates and errors: This amendment introduces a
new definition of accounting estimates: “Accounting
estimates are monetary amounts in financial state-
ments that are subject to measurement uncertainty”.
The new definition emphasizes that accounting esti-
mates involve utilization of measurement techniques
and assumptions. This is made to assist companies
when determining whether a change is due to change
in an accounting estimate or a change of accounting
policies.
- IAS Income taxes: The amendment requires rec-
ognition of deferred tax on transactions, that on initial
recognition, give rise to equal amounts of taxable and
deductible temporary differences. Deferred tax assets
and tax liabilities are to be presented net within the
same tax jurisdiction.
The amendments will be effective for financial years
beginning on or after January , and will be im-
plemented when they take effect. None of the amend-
ments are currently expected to have any significant
impact on the Group's financial statements.
Note
Significant
accounting
estimates and
judgements
Nature of
accounting
impact
Impact of
estimate
and
judgement
Determine
performance
obligation
Judgement
. Revenue
Determine
recognition
method
Judgement
Estimate
total cost
to complete
Estimate
. Inven-
tories
Estimate
valuation
of inventory
Estimate
. Provisions
and contingent
liabilities
Estimate
warranty
provisions
Estimate
Additional information of accounting estimates and
judgements 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
53
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2 INCOME STATEMENT
DKK million
Revenue split on categories and recognition method
Revenue recognized at a point in time , ,
Catalyst revenue , ,
Revenue recognized at a point in time
Revenue recognized over time , ,
Technology revenue , ,
Total revenue , ,
Backlog and previously recognized contract liabilities
Backlog, of which the majority is expected to be recognized in , ,
Revenue recognized that was included in the contract liability balance at the
beginning of the year
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 - 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.
2.1 Revenue
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, which typical-
ly takes place based on Incoterms.
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
probable that economic benefits, including payments,
will flow to the Group.
The transaction price of a contract is allocated to
performance 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 combi-
nation thereof, involves one or more performance
obligations.
Judgements are made by Management when determin-
ing 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 estimate 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
uncertainties are clarified.
54
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DKK million
Other operating income
Government grants
Other services
Other operating income
Total other operating income
2.3 Staff costs
DKK million
Staff costs
Wages, salary and other remuneration , ,
Share-based payment
Pension costs - defined contribution plans
Pension costs - defined benefit plans
Social security cost and other staff costs
Total , ,
Transferred to assets - -
Total staff costs , ,
Average number of employees 2,133 2,268
Remuneration to Senior Leadership Team and fee to Board of Directors
Salary
Share-based payment
Pension
Severance pay
Total remuneration to Senior Leadership Team
Fee to Board of Directors
Total remuneration to Senior Leadership Team and Board of Directors
2.2 Other operating income
ACCOUNTING POLICIES
Staff costs are recognized in the financial year in which
the employees render the related service. Costs relat-
ed to long-term employee benefits, e.g. share-based
payments, are recognized in the periods in which they
are earned.
ACCOUNTING POLICIES
Other operating income comprises income of a sec-
ondary nature to the Group’s main activities, including
government grants provided for research projects
and other services comprising assistance provided for
discontinuing operations.
Grants
Government grants are recognized when there is
reasonable assurance that the grants will be received.
Government grants received for research and develop-
ment projects are recognized as deferred income and
systematically recognized 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.
55
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DKK million
Special items
Restructuring costs - -
Legal costs regarding two special cases -
Adjustment of scrap values on buildings -
Total special items - -
Line items impacted, if special items had been recognized in EBIT before special items
Other external expenses -
Staff costs - -
Total special items - -
2.5 Income tax and deferred tax2.4 Special items
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 organizational 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 attrib-
utable 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 materi-
alize 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 en-
terprise 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 carryfor-
wards, 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.
Management assesses the likely outcome based on
knowledge available of the substance of the disputes,
including opinions from external tax experts.
56
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DKK million
Income tax
Current tax for the year
Change in deferred tax for the year
Adjustments to prior years
Total income tax recognized in the income statement
Income tax recognized in other comprehensive income -
Total income tax recognized in comprehensive income
Tax on continuing operations
Tax on discontinuing operations - -
Total income tax
Effective tax rate, %
Danish corporate tax rate . .
Non-deductible expenses . .
Income not subject to tax -. -.
Differences in foreign tax rates -. .
Adjustments relating to prior years . .
Other adjustments -. -.
Effective tax rate . .
The major impact of the change in effective tax rate from to is related to increased deduction on R&D
activities implented by the Danish Government and non-taxable divestment of investment in associated companies.
2.5 Income tax and deferred tax (continued)
DKK million Jan.
Foreign
currency
translation
adjustments
Tax for
the year
Tax for
previous
years
Tax on
equity
Dec.
Deferred tax,
Intangible assets and property, plant and
equipment
Inventories -
Contract assets -
Provisions - - - -
Other - -
Deferred tax at December , -
Recognized as deferred tax asset -
Recognized as deferred tax liability
Deferred tax at December ,
Of this, due after more than year
Not recognized deferred tax assets regarding unused tax losses
Deferred tax,
Intangible assets and property, plant and
equipment - -
Inventories
Contract assets -
Provisions - - -
Other -
Deferred tax at December , - -
Recognized as deferred tax asset -
Recognized as deferred tax liability
Deferred tax at December ,
Of this, due after more than year
Not recognized deferred tax assets regarding unused tax losses
57
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3 OPERATING ASSETS AND LIABILITIES
3.1 Intangible assets
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 accumulated 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 ma-
terial 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 accu-
mulated amortization and impairment losses. Rights as
well as patents are amortized on a straight-line basis
over the remaining patent term, but not exceeding
years, due to the notoriously 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 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 recov-
erable 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.
58
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3.1 Intangible assets (continued)
DKK million Goodwill Rights Patents Software
Intangible
assets under
construction Total
Intangible assets,
Cost at January ,
Foreign currency translation
adjustment - -
Additions during the year
Disposals during the year - - -
Transfers during the year -
Cost at December ,
Amortization and impairment
losses at January ,
Foreign currency translation
adjustment - -
Amortization for the year
Disposals during the year - -
Amortization and impairment
losses at December ,
Carrying amount
at December ,
Research and development costs expensed in
DKK million Goodwill Rights Patents Software
Intangible
assets under
construction Total
Intangible assets,
Cost at January ,
Foreign currency translation
adjustment
Additions during the year
Disposals during the year - - -
Transfers during the year -
Cost at December ,
Amortization and impairment losses
at January ,
Foreign currency translation
adjustment
Amortization for the year
Disposals during the year - - -
Amortization and impairment
losses at December ,
Carrying amount
at December ,
Research and development costs expensed in
59
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DKK million Land and buildings Plant and machinery Other fixtures and equipment
Property, plant and equipment
under construction Total
Property, plant and equipment,
Cost at January , , , ,
Foreign currency translation adjustment
Additions during the year
Disposals during the year - - -
Transfers during the year -
Cost at December , , , ,
Depreciation and impairment losses at January , , ,
Foreign currency translation adjustment
Depreciation for the year
Disposals during the year - - -
Depreciation and impairment losses at December , , ,
Carrying amount at December , ,
Carrying amount of assets used for operational lease
3.2 Property, plant and equipment
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 provision. Material
borrowing costs directly attributable to the construc-
tion of the individual asset are also added to cost.
Cost of self-constructed assets are recognized as
property, 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.
60
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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,
Cost at January , , , , ,
Transfer to right-of-use assets at January , - - - -
Restated cost at January , , , ,
Foreign currency translation adjustment - - - - -
Additions during the year
Disposals during the year - - - -
Transfers during the year -
Cost at December , , , ,
Depreciation and impairment losses at January , , ,
Transfer to right-of-use assets at January , - - - -
Restated depreciation and impairment
losses at January , , ,
Foreign currency translation adjustment - - - -
Depreciation for the year
Disposals during the year - - - -
Depreciation and impairment losses at December , , ,
Carrying amount at December , ,
Carrying amount of assets used for operational lease
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 – years
Plant and machinery – years
Other fixtures and equipment – years
Land is not depreciated.
The residual value and useful lives of the assets are
reassessed annually and adjusted if necessary.
Property, plant and equipment are tested for impair-
ment when there is an indication of impairment.
Impairment indicators 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 recoverable
amount is the higher of the fair value of the asset less
the expected cost to sell and its value in use. Impair-
ment losses are reversed if the recoverable amount
subsequently increases.
Lessor
When the Group is the lessor in a lease agreement clas-
sified as operational lease, the lease asset is recognized
as property, plant and equipment and depreciated over
the useful life. Lease income is recognized in revenue.
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.
61
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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 periodically adjusted for certain remeasurements
of the lease liability and reduced by any impairment
losses.
The lease term determined by the Group is the
non-cancellable 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 com-
mencement 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 corresponding 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 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 op-
tions are not included, as the Group could replace the
assets without significant costs or business disruption.
DKK million
Lease information
Interest expense (included in financial expenses)
Expense relating to short-term leases (included in other external expenses)
Expense relating to leases of low-value assets that are not shown
above as short-term leases (included in other external expenses)
Revenue from sub-lease
Total cash outflow for leases
DKK million
Land and
buildings
Other fixtures
and equipment Total
Right-of-use assets,
Carrying amount at January ,
Foreign currency translation adjustment
Additions during the year
Disposals during the year - -
Depreciation for the year - - -
Carrying amount at December ,
Right-of-use assets,
Carrying amount at January ,
Transfer to right-of-use assets at January ,
Foreign currency translation adjustment - -
Additions during the year
Depreciation for the year - - -
Carrying amount at December ,
3.3 Right-of-use assets
The majority of lease contracts relate to lease of office
buildings. Please see note . Borrowing 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 million after termination of the
lease contract in . The purchase obligation is
included in the lease liability.
62
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
ACCOUNTING POLICIES
Investments in joint ventures
and associated companies
Entities in which the Group directly or indirectly con-
trols at least %, but not more than %, of the vot-
ing rights are accounted for as associated companies.
Investments in joint ventures and associated compa-
nies are recognized and measured under the equity
method. The proportional share of the result after tax
of investments in joint ventures and associated com-
panies are included under financial income or financial
expense.
Investments with negative net asset values are recog-
nized at DKK million.
Other securities and investments
Investments in other enterprises are measured at fair
value at the balance sheet date. Fair value adjustments
are recognized 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 Management 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. Material assumptions
comprise expected future cash flows, discount rates
and growth rates for the period.
3.4 Other non-current assets
63
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3.4 Other non-current assets (continued)
DKK million
Invest-
ments in
associated
compa-
nies
Invest-
ments in
joint
ventures
Pension
asset
Other
securi-
ties and
invest-
ments
Other
receiva-
bles Total
Non-current assets,
Cost at January ,
Foreign currency translation adjustment
Additions during the year
Disposals during the year - - -
Cost at December ,
Value adjustment at January , - - -
Profit/loss for the year - -
Disposals during the year
Value adjustments for the year - -
Value adjustment at December , -
Carrying amount at December ,
DKK million
Result of investments in joint ventures and associated companies
Gain from divestment of shares in associated companies
Share of result of associated companies, net of tax - -
Share of result of joint ventures, net of tax
Total result of investments in joint ventures and associated companies -
DKK million
Invest-
ments in
associated
compa-
nies
Other
securi-
ties and
invest-
ments
Other
receiva-
bles Total
Non-current assets,
Cost at January ,
Transferred to current assets - -
Additions during the year
Disposals during the year - -
Cost at December ,
Value adjustment at January , - -
Profit/loss for the year - -
Disposals during the year
Value adjustments for the year - - -
Value adjustment at December , - - -
Carrying amount at December ,
64
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Ramagundam Fertilizers and Chemicals Limited,
New Delhi, India
The Group has increased the investment in Ramagun-
dam Fertilizers and Chemicals Limited, still corre-
sponding to % of the share capital. The company is
constructing a fertilizer plant in India. The fair value
of the investment is DKK million (: DKK
million).
GTLA Holdings LP, Delaware, US
The Group has invested in GTLA Holdings LP, corre-
sponding to % of the share capital. The purpose of
the company is to develop a project for the con-
struction of a gas-to-liquid plant. The fair value of the
investment is DKK million due to a license having
been suspended.
INVESTMENTS IN ASSOCIATED COMPANIES:
Faradion Ltd., Sheffield, United Kingdom
The Group has converted its loans and divested its
shares in Faradion Ltd. at a price of DKK million
resulting in a gain of DKK million.
INVESTMENTS IN JOINT VENTURES:
Shaanxi Yanchang Topsoe Catalytic Technologies Co,
Ltd., Weinan, China
During , the Group has invested DKK million in
Shaanxi Yanchang Topsoe Catalytic Technologies Co,
Ltd., corresponding to % of the share capital. The
joint venture is a limited liability company. The com-
pany will establish a minor production line. The Group
is obligated to invest an additional amount of CNY
million (equal to DKK million).
OTHER SECURITIES AND INVESTMENTS:
Karnaphuli Fertilizer Limited, Dhaka, Bangladesh
(KAFCO)
The Group holds shares in KAFCO of nominally BDT
million, which equals % of the shares in KAFCO.
The shares are measured at fair value based on a
discounted cash flow calculation using the present
forecast and expectations to business development
of KAFCO.
Based on this, the KAFCO shares have been written
down by DKK million (: DKK million). The fair
value of the investment is DKK million.
3.4 Other non-current assets (continued)
65
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
ACCOUNTING POLICIES
Inventories are measured at the lower of cost or net
realizable 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 production 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 development in sales market. The net
realizable value is calculated as the revenue expected
to be generated less selling expenses.
DKK million
Inventories
Raw materials and consumables
Work in progress
Finished goods
Inventories at December , ,
Cost of sales for the year , ,
Write-down of inventories
Impairment at January,
Foreign currency translation adjustment
Additions during the year
Reversals during the year - -
Realized during the year - -
Write-down at December
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.
DKK million
Gross trade
receivables
Expected
loss rate (%)
Loss
allowance
Trade
receivables
Aging of trade receivables and expected credit loss,
Not due
- days
- days
- days -
+ days -
At December , , - ,
Aging of trade receivables and expected credit loss,
Not due
- days -
- days -
- days -
+ days -
At December , , - ,
DKK million
Loss allowance
Loss allowance at January
Foreign currency translation adjustment
Additions during the year
Reversals during the year - -
Realized during the year - -
Loss allowance at December
Trade receivables due after more than year
ACCOUNTING ESTIMATES AND JUDGEMENTS
The expected credit loss is based on historical credit
loss experience combined with forward-looking
information.
3.5 Inventories 3.6 Trade receivables
66
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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 percentage-of-completion. The percentage-
of-completion is determined 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 pro-
gress. Received payments on account exceeding the
selling price of the work completed are recognized in
contract work in progress under current liabilities.
DKK million
Contract assets and liabilities
Contract work in progress
Contract assets at December
Contract work in progress
Prepayments from customers related to catalysts, etc.
Contract liabilities at December , ,
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 , ,
Payments received on account -, -,
Contract work in progress at December - -
Contract work in progress recognized in contract assets
Contract work in progress recognized in contract liabilities - -
Contract work in progress at December - -
Where it is probable that total contract cost will ex-
ceed the total revenue from a contract, the expected
loss is recognized 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 . Revenue.
3.7 Contract assets and liabilities
67
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3.8 Other receivables and prepayments
DKK million
Other receivables and prepayments
Indirect tax receivables
Derivatives
Gain from divestment of associated companies
Other receivables
Prepayments
Other receivables and prepayments at December
Agent commission for obtaining contracts
Agent commission recognized as prepayments
Agent commission recognized in the income statement during the year.
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 recog-
nized when the relevant performance obligations have
been delivered - either at a point in time or over time.
68
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DKK million
Net pension obligations
Present value of pension obligations at January
Foreign currency translation adjustment -
Pension costs
Calculated interest on obligation
Actuarial gains and losses, demographic assumption - -
Actuarial gains and losses, financial assumption -
Pension paid - -
Pension paid for settlements - -
Present value of pension obligations at December
Fair value of pension plan assets at January
Foreign currency translation adjustment -
Calculated interest on pension assets
Return on plan assets excl. interest on pension assets
Paid by the company
Pension paid - -
Pension paid for settlements - -
Fair value of pension plan assets at December
Net pension obligations/assets at December -
Pension costs
Pension costs
Interest expenses
Interest income on plan assets - -
Total pension related to defined benefit recognized in staff costs
Weighted average duration of the defined benefit obligations (in years) .-. .-.
Expected defined benefit pension payments by the Group in amount to DKK million.
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 valuation dates and is based on actuarial
assumptions primarily regarding discount rates used in
determining the present value of benefits and project-
ed increase in wages.
Differences between the calculated development in
pension obligations and plan assets and the realized
values are recognized 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 immediately 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
obligations are performed annually.
3.9 Pension obligations
69
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3.9 Pension obligations (continued)
Percentage
Composition of plan assets, %
Shares
Bonds
Real estate
Commodities
Other
Composition of plan assets at December
Applied actuarial assumptions, %
Discount rate .-. .-.
Future wage increases .-. .-.
DKK million
Sensitivity analysis of impact on pension obligation
.%-point increase on discount rate - -
.%-point decrease on discount rate
.%-point increase on future wage increase
.%-point decrease on future wage increase -
The Group has entered into pension plans with a considerable 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 responsi-
ble 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 con-
sists 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 valuation is performed annually. In addition,
employees in India and Germany are covered by defined benefit plans.
70
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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 spe-
cific warranty cases. Furthermore, the warranty pro-
vision 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 potential 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,
Provisions at January ,
Provisions during the year
Reversals during the year - - -
Realized provisions during the year - - -
Provisions at December ,
The majority of the warranty provisions are expected to be recognized after year.
Provisions,
Provisions at January ,
Foreign currency translation adjustment - -
Provisions during the year
Reversals during the year - -
Realized provisions during the year - - -
Provisions at December ,
Approx. / of the provisions are potentially to be recognized within year.
3.10 Provisions and contingent liabilities
71
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3.10 Provisions and contingent liabilities (continued)
DKK million
Aging of guarantees issued on the Group's behalf for project-related risk
Less than year
Between and years
After years
Guarantees issued at December
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
materialize, a provision is recognized.
DKK million
Guarantees issued by the Group
Guarantee issued by the Group in relation to the Employee Share Program,
expires
Guarantees issued by the Group at December
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 with Topsøe Holding A/S, the Group is jointly and severally liable for
taxes, etc. payable in Denmark.
3.11 Other payables
DKK million
Other payables
Staff-related items
Other payables
Other payables at December
Classification of other payables
Non-current liabilities
Currency liabilities
Other payables at December
Staff-related items primarily comprise employee holiday provision, provision for Group bonus and payroll taxes due.
ACCOUNTING POLICIES
Other payables are measured at amortized cost, mainly corresponding to nominal value.
72
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
ACCOUNTING POLICIES
Share premium
The share premium consists of the difference between
the par value of the shares issued and the issue price.
Reserves
The foreign currency translation reserve comprises all
translation 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.
4 CAPITAL STRUCTURE AND FINANCIAL ITEMS
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
statements of the parent company, Haldor Topsoe A/S.
Dividends are paid from distributable reserves. Share
premium is a distributable reserve.
Earnings per share
Earnings per share are presented as both basic and
diluted earnings per share. Basic earnings per share
are calculated as profit divided by the monthly average
number of shares outstanding. Diluted earnings per
share are calculated as profit divided by the sum
of monthly average number of shares outstanding,
including the dilutive effect of the outstanding share
pool.
Number
Shares
Shares at January ,, ,,
Capital increase , ,,
Shares at December ,, ,,
The nominal value of each share is DKK each. All issued shares have been paid. No shares carry any special right.
The capital increase is due to the launch of the Employee Share Program (see note . Share-based payment for further
information).
DKK million
Dividend
Proposed dividend, DKK per share . ,
Proposed dividend, DKK million
Paid dividend relating to prior year, DKK per share . ,
Paid dividend relating to prior year, DKK million
Proposed dividend for will be considered at the Annual General Meeting on April , .
No dividend was paid in due to the uncertainty caused by COVID-.
Capital allocation
There is no formal capital allocation or dividend policy. A dividend of -% of net profit is targeted. However, on a
yearly basis, the owners will consider the appropriate level of dividend payment based on profitability equity ratio and
future capital requirements.
4.1 Equity, dividend and earnings per share
73
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4.1 Equity, dividend and earnings per share (continued)
DKK million
Earnings per share
Profit from continuing operations, owners of the parent company's share
Profit from discontinuing operations, owners of the parent company's share
Net profit, owners of the parent company's share
Average number of shares ,, ,,
Earnings per share, continuing operations . .
Earnings per share, discontinuing operations . .
Earnings per share . .
ACCOUNTING POLICIES
Borrowings are initially recognized at the proceeds
received net of transaction costs incurred. Subse-
quently, the loans are measured at amortized cost,
corresponding to capitalized value, using the effective
DKK million
Other
payables Borrowings
Lease
liabilities Total
Interest-bearing debt,
Interest-bearing debt at January , ,
Foreign currency translation adjustment
Loans raised
Installments - - - -
Interest-bearing debt at December , ,
Interest-bearing debt,
Interest-bearing debt at January , , .
Foreign currency translation adjustment
Loans raised
Installments - - -
Interest-bearing debt at December , ,
Borrowings comprise loans from credit institutions.
Please refer to note . Right-of-use assets for further information.
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.
4.2 Borrowings and lease liabilities
74
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4.3 Financial assets and liabilities
ACCOUNTING POLICIES
Fair value measurements are categorized into Level ,
or 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 measure-
ment as a whole. The inputs are described as follows:
• Level inputs are quoted prices (unadjusted) in
active markets for identical assets or liabilities that
the entity can access at the measurement date.
• Level inputs are inputs, other than quoted prices
included within Level , that are observable for the
asset or liability, either directly or indirectly.
• Level inputs are fair value measures derived from
valuation techniques that include inputs for the
asset or liability that are not based on observable
market data (unobservable inputs).
DKK million
Classification of financial assets
Other securities and investments
Financial assets designated as assets measured at fair value through
other comprehensive income
Trade receivables , ,
Other receivables
Cash ,
Financial assets measured at amortized cost , ,
Derivatives
Financial assets measured at fair value through other comprehensive income
Financial assets at December , ,
DKK million < year - years > years
Total
payments
Future
interests
Carrying
amount
Maturity and classification
of financial liabilities,
Borrowings -
Lease liabilities -
Trade payables
Other financial liabilities
Financial liabilities measured
at amortized cost , , - ,
Financial liabilities
at December , , , - ,
Maturity and classification
of financial liabilities,
Borrowings -
Lease liabilities -
Trade payables
Other financial liabilities
Financial liabilities measured
at amortized cost , , - ,
Financial liabilities at
December , , , - ,
75
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4.3 Financial assets and liabilities (continued)
DKK million Level Level Level
Fair value assets,
Other securities and investments
Derivative
Assets stated at fair value at December ,
Please refer to note . Other non-current assets for information on input to the fair value measurement of invest-
ments in other enterprises stated in level .
There have been no transfers between levels , and during the year.
DKK million
Fair value of level assets
Fair value of level assets at January
Addition
Write-down recognized in other comprehensive income - -
Fair value of level assets at December
Available credit facility
Undrawn credit facility
Undrawn revolving credit facility , ,
Available credit facility at December , ,
FINANCIAL RISK
Currencies
As Topsoe operates globally, the income statement, balance sheet, and cash flows are subject to the risk of currency
fluctuations, mainly in relation to Topsoe’s flows of USD.
Part of this risk is mitigated through natural hedges arising from activities where Topsoe has both income and
expenses in the same currency. However, the risk is not fully covered by natural hedges, and consequently Topsoe
hedges certain future cash flows. A % change in the DKK/USD exchange rate is assessed to have an EBIT effect of
DKK - million.
Interest rates
Topsoe’s general interest rate policy is to maintain a loan portfolio where the fixed interest rate portion is kept within
a range of -%, while the floating interest rate portion is kept within a range of -%. By the end of ,
the fixed rate portion stood at %, while the floating rate portion stood at %. For the floating rate portion of our
interest-bearing debt at end of , an increase in the interest rate level of percentage point will increase interest
expenses by DKK . million p.a.
Credit
The credit risk of Topsoe is primarily related to trade receivables from state, public and privately-owned corporations.
Where feasible, we seek to mitigate credit risk by applying instruments such as letters of credit and bank guarantees
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 derivatives. In order to reduce this risk, the Group only deals with
financial counterparties who, in the opinion of Management, have satisfactory financial strength (based on credit
rating from a recognized international credit rating agency where feasible).
At December , , the Group considers its maximum credit risk to be DKK , million (: DKK ,
million) equal to the total of the Group's financial assets.
Liquidity
Topsoe must maintain sufficient liquidity to fund daily operations, debt service, and expansion. Topsoe’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 million in unused committed revolving credit facilities at any time.
76
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4.4 Financial income and expenses
DKK million
Financial income
Dividend from other investments
Interest income
Foreign currency translation adjustment
Other financial income
Total financial income
Financial expenses
Interest expenses
Value adjustment of other receivables
Foreign currency translation adjustment
Total financial expenses
Interest expenses include interest on financial liabilities measured at amortized cost of DKK million
(: DKK million).
77
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5.1 Share-based payment
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 offsetting item is recognized directly in
equity.
The fair value of the performance shares granted is
determined based on the external valuations of the
Group and comparable peers.
On initial recognition, an estimate is made of the num-
ber 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 circum-
stances during the period.
Employee Share Program (ESP)
The Employee Share Program is considered an equity-
settled 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.
5 OTHER NOTES
Share-based incentive schemes
In , 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 employees held performance shares at
December , .
Total costs recognized in amounted to DKK
million.
The fair value of the performance share scheme at
December , , is estimated to DKK million.
Employee Share Program
The Employee Share Program (ESP) was launched with
enrollment in February . Employees at all levels
have been offered the opportunity to acquire shares
in Haldor Topsoe A/S at market value by investing an
amount equal to ½, or months' salary. For every
four shares purchased at market value, employees
purchased a fifth share at a price of DKK . An annual
investment window will be open to new employees.
The program will expire either in case of an IPO or
by December , , 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 , an additional employees (:
employees) enrolled in the program and , new
shares (: ,, shares) were issued. The
shares issued in were issued at an average price
of DKK . (: DKK .) per share resulting in
a discount element of DKK . (: DKK .). Staff
costs have been impacted by DKK million (:
DKK 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 participants 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 in-
creases 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, or months' salary
and are granted phantom shares in Haldor 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.
employees (: employees) are enrolled
in the Phantom Program. Staff costs have not been
impacted in nor in .
No. of shares
Performance shares
Granted during the year .
Cancelled during the year ,
No. of shares at December ,
78
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5.2 Fee to auditors appointed at the general meeting
DKK million
Fee to auditors appointed at the general meeting
Statutory audit fee
Other assurance statements
Tax assistance
Other assistance
Total fee to auditors appointed at the general meeting
5.3 Related parties
DKK million
Transactions with parent company
Management fee received from the parent company
Receivables from the parent company at December
Related parties Transactions
Companies under common control Rent
Deposit
Joint venture Project revenue
For remuneration to Senior Leadership Team and Board of Directors, please refer to note . Staff costs.
Intercompany transactions have been eliminated in the consolidated financial statements.
MAIN SHAREHOLDERS
Topsøe Holding A/S, Lyngby, Denmark - control
Dahlia Investments Pte. Ltd., Singapore - minority
79
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5.4 Cash flow specifications
DKK million
Adjustments for non-cash items
Gain and losses from disposal of assets
Cash flow from discontinuing operations -
Gain from divestment of associated companies
Change in provisions -
Employee Share Program
Other adjustments
Total adjustments for non-cash items
Change in working capital
Increase (-) / decrease in inventories - -
Increase (-) / decrease in trade receivables -
Increase / decrease (-) in contract assets and liabilities -
Increase / decrease (-) in trade payables, etc. -
Total change in working capital -
5.5 Commitments
DKK million
Contractual obligations
Purchase obligations relating to property, plant and equipment
and intangible assets
Lease obligations related to software, IT service and maintainance agreements, running
up to years
Investment obligations related to investing in companies included under
non-current assets
Contractual obligations at December
Aging of contractual obligations
Less than year
Between and years
After years
Contractual obligations at December
Payments for the year recognized as operating lease expenses
80
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Russia’s invasion of Ukraine has taken place after the end of the reporting period. This war is expected to have a
negative impact on the financial performance of Topsoe. Currently, a reliable estimate of the financial effect on the
consolidated financial statements cannot be made and is not reflected in the outlook.
No events materially affecting the Group's financial position at December , have occured after the balance
sheet date.
Company Country Ownership share Activity
Haldor Topsoe A/S (Parent) Denmark P, S,R,O
Haldor Topsoe America Latina S.A. Argentina % S
Haldor Topsoe Australia Pty. Ltd. Australia % S
Haldor Topsoe do Brasil Tecnologia e Servicos
em Catalisadores Eireli Brazil % S
Haldor Topsoe Canada Limited Canada % S
Haldor Topsøe (Beijing) Co., Ltd China % P, S
Jiangsu JITRI-Topsoe Joint R&D Center Co, Ltd. China % R
Haldor Topsøe International A/S Denmark % S
Subcontinent Ammonia Investment Company ApS Denmark % O
Haldor Topsøe Project Investment A/S Denmark % O
HT Ramagundam A/S Denmark % O
Haldor Topsøe Sustainables A/S Denmark % O
Haldor Topsoe Germany GmbH Germany % S
Haldor Topsoe India Pvt. Ltd. India % S, O
Haldor Topsoe Sdn. Bhd. Malaysia % S
Haldor Topsoe De Mexico, S. A. de C. V. Mexico % S
OOO Haldor Topsøe Russia % S
Haldor Topsoe, Inc. US % P, S
Haldor Topsoe Project Development U.S., Inc. US % O
Haldor Topsoe LFG Solutions Inc. US % O
Pacific Coast Fertilizer LLC US % O
Saturn Ferrostaal Gas Chemicals LLC, US % O
Haldor Topsoe eCOs Inc. US % O
P: Production S: Sales R: R&D O: Other
5.7 Group enterprises5.6 Events after the balance sheet date
81
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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 coordinated 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.
On June , , Topsoe announced that it had sold
its emissions control business areas. The divestment
was finalized on November , . The divestment
comprised the subsidiaries Haldor Topsøe Catalyst
(Tianjin) Co., Ltd., Haldor Topsøe Automotive Catalyst
Trading (Tianjin) Co., Ltd. and Haldor Topsoe Catalisa-
dores e Technologias do Brasil Ltda. as well as business
assets and liabilities in Denmark, the US, and China.
Finalization of the divestment of the emissions control
business areas impacted with a net profit of DKK
million after reversal of provisions made in previous
years. has mainly been impacted by reopened
tax assessments.
DKK million
Profit from discontinuing operations
Transaction-related costs -
Value adjustment of net assets sold
Profit/loss on sale before income tax -
Income tax
Profit from discontinuing operations
5.8 Discontinuing operations
82
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DKK million Note
Revenue , ,
Change in inventories of finished goods and intermediate products -
Other operating income
Purchased equipment for contract work - -
Raw materials and consumables used -, -,
Other external expenses -, -,
Gross profit , ,
Staff costs -, -,
Depreciation, amortization and impairment losses - -
EBIT
Result of investments in Group enterprises, joint ventures,
and associated companies
Financial income
Financial expenses - -
Profit before tax
Ta x - -
Profit from continuing operations
Profit from discontinuing operations
Net profit
INCOME STATEMENT OF
HALDOR TOPSOE A/S
84
FINANCIAL STATEMENTS OF TOPSOE A/SHALDOR TOPSOE A/S ANNUAL REPORT 2021
Assets
DKK million Note
Inventories ,
Trade receivables
Contract work in progress
Receivables from Group enterprises
Other receivables
Tax receivable
Prepayments
Receivables , ,
Cash
Current assets , ,
Assets , ,
BALANCE SHEET OF
HALDOR TOPSOE A/S
Assets
DKK million Note
Rights
Patents
Software
Intangible assets under construction
Intangible assets
Land and buildings
Plant and machinery
Other fixtures and equipment
Property, plant and equipment under construction
Property, plant and equipment , ,
Right-of-use assets
Investments in Group enterprises , ,
Investments in associated companies
Investments in joint ventures
Receivables from Group enterprises
Other securities and investments
Other receivables
Investments , ,
Non-current assets , ,
85
FINANCIAL STATEMENTS OF TOPSOE A/SHALDOR TOPSOE A/S ANNUAL REPORT 2021
Equity and liabilities
DKK million Note
Share capital
Share premium
Net revaluation reserve according to the equity method -
Reserve for development costs
Reserve for Employee Share Program
Retained earnings , ,
Proposed dividend
Equity , ,
Deferred tax
Provisions
Borrowings
Lease liabilities
Other payables
Non-current liabilities , ,
BALANCE SHEET OF
HALDOR TOPSOE A/S (continued)
Equity and liabilities
DKK million Note
Borrowings
Lease liabilities
Deferred income
Prepayments from customers
Contract work in progress
Trade payables
Payables to Group enterprises
Other payables
Current liabilities , ,
Liabilities , ,
Equity and liabilities , ,
86
FINANCIAL STATEMENTS OF TOPSOE A/SHALDOR TOPSOE A/S ANNUAL REPORT 2021
STATEMENT OF CHANGES IN EQUITY
OF HALDOR TOPSOE A/S
DKK million
Share
capital
Share
premium
Net revaluation
reserve
according to the
equity method
Reserve for
development
costs
Reserve for Employee
Share Program
Retained
earnings
Proposed
dividend Total
Equity at January , - , ,
Net profit
Adjustments relating to separate
foreign legal entities
Currency translation differences
Capitalized development projects -
Net profit and income
and expenses recognized under equity ,
Capital increase
Employee Share Program
- value of employee services
Share-based payment
Dividend paid - -
Transactions with owners - -
Equity at December , , ,
87
FINANCIAL STATEMENTS OF TOPSOE A/SHALDOR TOPSOE A/S ANNUAL REPORT 2021
Accounting policies
Revenue
Staff costs
Result of investments in Group enterprises,
joint ventures, and associated companies
Financial income
Financial expenses
Proposed distribution of profit
Intangible assets
Property, plant and equipment
Right-of-use assets
Investments
Inventories
Contract work in progress
Deferred tax
Provisions
Non-current liabilities
Share-based payment
Guarantees
Contractual obligations
Contingent liabilities
Fee to auditors appointed at the
general meeting
Related parties
Fair value financial assets and liabilities
Subsequent events
Consolidated financial statements
Discontinuing operations
NOTES TO THE
FINANCIAL
STATEMENTS
OF HALDOR
TOPSOE A/S
88
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS OF HALDOR TOPSOE A/S
1 ACCOUNTING POLICIES
BASIS OF PREPARATION
The financial statements for of Haldor Topsoe
A/S have been prepared in accordance with the re-
quirements of the Danish Financial Statements Act for
class C large companies.
The accounting policies are unchanged from last year.
However, leased assets has been reclassified from
property, plant and equipment to a separate balance
sheet item called Right-of-use assets to make it easier
for users to assess the impact of these assets. The
impact is a decrease in property, plant and equipment
amounting to DKK million as per December ,
and an increase in right-of-use asset by the
same amount.
The applied accounting policies are similar to those of
the Group except for the following matters:
Other securities and investments
Investments in other enterprises are measured at fair
value. Fair value adjustments are recognized in the
income statement under financial income or financial
expenses.
Investments in Group enterprises
Investments in Group enterprises are recognized and
measured under the equity method.
Group enterprises with negative equity are measured
at DKK million, and receivables from these Group
enterprises are written down by the parent company’s
share of the negative equity if they are estimated to be
irrecoverable.
If the negative equity exceeds receivables, the re-
maining amount is recognized under provisions to the
extent the parent company has a legal or constructive
obligation to cover the Group enterprise’s deficit.
The proportionate share of the result after tax is
included in the income statement under result of
investments in Group enterprises, joint ventures and
associated companies.
The Company's revenue can be divided into two main
categories: catalyst sales and technology sales. Cat-
alyst sales comprise the sale of catalysts. Technology
sales comprise basic engineering design, license fee
and hardware.
2 REVENUE
The Company has not disclosed the revenue split by
segments for competitive reasons, as disclosure of
this information is assessed to be potentially harmful
to the Company.
Reserves
Reserve for development costs comprises develop-
ment costs after depreciation and tax for self-con-
structed development projects.
Cash flow statement
No separate cash flow statement has been prepared
for the parent company, as the parent company’s cash
flow statement is included in the consolidated cash
flow statement.
89
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS OF TOPSOE A/S
3 STAFF COSTS
DKK million
Wages, salary and other remuneration , ,
Pension cost
Social security cost and other staff costs
Total , ,
Transferred to assets - -
Total staff costs , ,
Executive Management salary and pension
Fee to Board of Directors
Total remuneration to Executive Management and fee to Board of Directors
Average number of employees , ,
The remuneration to Executive Management for has been impacted by changes in Executive Management
team. was impacted by replacement of the CEO and CFO.
4 RESULT OF INVESTMENTS IN GROUP ENTERPRISES,
JOINT VENTURES, AND ASSOCIATED COMPANIES
DKK million
Share of result of Group enterprises, net
Change in intercompany profit -
Share of result of joint ventures and associated companies, net - -
Gain on divestment of associated companies
Total income from investments in Group enterprises,
joint ventures, and associated companies
90
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS OF TOPSOE A/S
7 PROPOSED DISTRIBUTION OF PROFIT
DKK million
Proposed dividend
Net revaluation reserve according to the equity method
Retained earnings
Total proposed distribution of profit
6 FINANCIAL EXPENSES
DKK million
Interest expenses
Foreign currency translation adjustment ´
Value adjustments of other investments
Total financial expenses
5 FINANCIAL INCOME
DKK million
Interest received from Group enterprises
Interest income
Foreign currency translation adjustment
Other financial income
Total financial income
91
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS OF TOPSOE A/S
DKK million Rights Patents Software
Intangible
assets under
construction
Cost at January ,
Additions during the year
Disposals during the year - -
Transfers during the year -
Cost at December ,
Amortization and impairment losses
at January ,
Amortization for the year
Reversal of amortization and impairment losses
on assets sold - -
Amortization and impairment losses
at December ,
Carrying amount at December ,
8 INTANGIBLE ASSETS
DKK million
Land and
buildings
Plant and
machinery
Other
fixtures and
equipment
Property, plant
and equip-
ment under
construction
Cost at January , , , ,
Transfer to right-of-use assets
at January , - -
Restated cost at January , , ,
Additions during the year
Disposals during the year - -
Transfers during the year -
Cost at December , , ,
Depreciation and impairment losses
at January , ,
Transfer to right-of-use assets
at January , - -
Restated depreciation and impairment
losses at January , ,
Depreciation for the year
Reversal of depreciation on assets sold
and scrapped - -
Depreciation and impairment losses
at December , ,
Carrying amount at December ,
9 PROPERTY, PLANT AND EQUIPMENT
92
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS OF TOPSOE A/S
10 RIGHT-OF-USE ASSETS
DKK million
Land and
buildings
Other
fixtures and
equipment
Right-of-
use assets
total
Cost at January ,
Transfer to right-of-use assets at January ,
Restated cost at January ,
Additions during the year
Disposals during the year - -
Cost at December ,
Depreciation and impairment losses at January ,
Transfer to right-of-use assets at January ,
Restated depreciation and impairment losses at January ,
Depreciation for the year
Reversal of depreciation on assets sold and scrapped - -
Depreciation and impairment losses at December ,
Carrying amount at December ,
93
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS OF TOPSOE A/S
DKK million
Investments
in Group enterprises
Investments in
associated companies
Investments
in joint ventures
Receivables from Group
enterprises
Other securities
and investments Other receivables
Cost at January ,
Additions during the year
Disposals during the year - -
Transfers during the year -
Cost at December ,
Value adjustment at January , - - - -
Value adjustment during the year
Foreign currency adjustments
Dividend -
Net profit/loss for the year -
Disposals during the year
Other adjustments
Value adjustment at December , , - - -
Carrying amount at December , ,
Of this less than year
11 INVESTMENTS
94
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS OF TOPSOE A/S
11 INVESTMENTS (continued)
Company Registered office
Voting and
ownership share
Haldor Topsoe America Latina S.A. Buenos Aires, Argentina %
Haldor Topsoe Australia Pty Ltd. Perth, Australia %
Haldor Topsoe do Brasil Tecnologia e Servicos
em Catalisadores Eireli Rio de Janeiro, Brazil %
Haldor Topsoe Canada Limited Vancouver, Canada %
Haldor Topsøe (Beijing) Co., Ltd Beijing, China %
Jiangsu JITRI-Topsoe Joint R&D Center Co. Ltd. Suzhou, China %
Haldor Topsøe International A/S Lyngby, Denmark %
Subcontinent Ammonia Investment Company ApS Lyngby, Denmark %
Haldor Topsøe Project Investment A/S Lyngby, Denmark %
HT Ramagundam A/S Lyngby, Denmark %
Haldor Topsøe Sustainables A/S Lyngby, Denmark %
Haldor Topsoe Germany GmbH Essen, Germany %
Haldor Topsoe India Pvt. Ltd. New Delhi, India %
Haldor Topsoe Sdn. Bhd. Kuala Lumpur, Malaysia %
Haldor Topsoe De Mexico, S. A. de C. V. Mexico City, Mexico %
OOO Haldor Topsøe Moscow, Russia %
Haldor Topsoe, Inc. Houston, US %
Haldor Topsoe Project Development U.S. Inc. Houston, US %
Haldor Topsoe LFG Solutions Inc. Houston, US %
Pacific Coast Fertilizer LLC Seattle, US %
Saturn Ferrostaal Gas Chemicals LLC Wilmington, US %
Haldor Topsoe eCOs Inc. Wilmington, US %
Investments in Group enterprises:Investments in associated companies:
Faradion Ltd., Sheffield, United Kingdom
Haldor Topsoe A/S has converted its loans and divested its shares in Faradion Ltd. at a price of DKK million,
resulting in a gain of DKK million.
Investments in joint ventures:
Shaanxi Yanchang Topsoe Catalytic Technologies Co, Ltd., Weinan, China
Haldor Topsoe A/S has during invested DKK million in Shaanxi Yanchang Topsoe Catalytic Technologies Co,
Ltd., corresponding to % of the share capital. The company will establish a minor production line. Haldor Topsoe
A/S is obligated to invest an additional amount of CNY million (equal to DKK million).
Other securities and investments:
GTLA Holdings LP, Delaware, USA
Haldor Topsoe A/S has invested in GTLA Holdings LP, corresponding to % of the share capital. The purpose of the
company is to develop a project for the construction of a gas-to-liquid plant. The fair value of the investment is DKK
million due to a license having currently been suspended.
95
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS OF TOPSOE A/S
DKK million
Selling price of work performed at the balance sheet date , ,
Payments received on account -, -,
Contract work in progress at December - -
Contract work in progress recognized in assets
Contract work in progress recognized in liabilities - -
Contract work in progress at December - -
DKK million
Deferred tax at January
Tax for the year -
Deferred tax at December
Intangible assets and property, plant and equipment
Inventories
Work in progress
Provisions - -
Other
Deferred tax at December
14 DEFERRED TAX
13 CONTRACT WORK IN PROGRESS
12 INVENTORIES
DKK million
Raw materials and consumables
Work in progress
Finished goods
Inventories at December ,
96
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS OF TOPSOE A/S
15 PROVISIONS
DKK million
Warranty provision for technology projects and catalysts
Other provisions
Provisions at December
The majority of the warranty provisions are expected to be recognized after year.
16 NON-CURRENT LIABILITIES
DKK million
Borrowings
After years
Between and years
More than year
Less than year
Borrowings at December
Lease liabilities
More than year
Less than year
Lease liabilities at December
Other payables
More than year
Less than year
Other payables at December
Other payables consist of employee holiday fund and deposits regarding office lease.
97
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS OF TOPSOE A/S
18 GUARANTEES
DKK million
Guarantees issued by banks and credit insurance institutions on
the Company's behalf for contract work, etc.
Parent company guarantees issued by the Company for certain
obligations in subsidiaries
Guarantees issued by the Company in relation
to the Employee Share Program
DKK million
Less than year
Between and years
Contractual obligations at December
Contractual obligations relate to software and maintenance agreements running - months.
The Company has an obligation of DKK million (: DKK million) related to delivery of services toward Jiangsu
JITRI-Topsoe Joint R&D Center Co. Ltd.
The Company is obligated to invest an additional DKK million (: DKK million) in companies included under
'Other investments'.
17 SHARE-BASED PAYMENT
Employee Share Program
The Group launched an Employee Share Program (ESP) with enrollment in February . Employees at all levels have
been offered the opportunity to acquire shares in Haldor Topsoe A/S at market value by investing an amount equal
to ½, or months' salary. For every four shares purchased at market value, employees purchased a fifth share at a
price of DKK . An annual investment window will be open to new employees. The program will expire either in case of
an IPO or by December , , 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 , an additional employees (: employees) enrolled and , new shares (: ,,
new shares) were issued. The new shares in were issued at an average price of DKK . (: DKK .) per
share resulting in a discount element of DKK . (: DKK .). Staff costs have been impacted by DKK million in
(: DKK 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. Resign-
ing participants 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 coun-
tries have been offered to participate in a Phantom Program. The participating employees have invested an amount
equal to ½, or months' salary and are granted Phantom shares in Haldor 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.
employees (: employees) have enrolled in the Phantom Program. Staff expenses have not been impacted
in nor in .
Performance Share Units
19 CONTRACTUAL OBLIGATIONS
No. of shares
Performance shares
Granted during the year ,
Cancelled during the year ,
No. of shares at December ,
98
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS OF TOPSOE A/S
20 CONTINGENT LIABILITIES
21 FEE TO AUDITORS APPOINTED
AT THE GENERAL MEETING
The Company's property in Frederikssund, Denmark,
has been found to be contaminated. Management
assesses that the remediation costs will not be signif-
icant.
Through participation in joint taxation scheme with
Haldor Topsøe Holding A/S, the Company is jointly and
severally liable for taxes, etc. payable in Denmark.
Please refer to the note in the consolidated financial
statements.
22 RELATED PARTIES
The main shareholders are:
Haldor Topsøe Holding A/S, Lyngby, Denmark
- shareholder - control
Dahlia Investments Pte. Ltd., Singapore
- shareholder - minority
Haldor Topsoe A/S is a party to ongoing litigation.
Management assesses that the outcome of these law-
suits will not affect the Company's financial position.
No transactions have been carried out with the
Board of Directors, Senior Leadership Team,
key management staff, shareholders, Group
enterprises or other related parties which
have not been under normal market condi-
tions.
99
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS OF TOPSOE A/S
DKK million Level Level Level
Other securities and investments
Fair value at December ,
Value adjustment recognized in the income statement
Derivatives
Fair value at December ,
Value adjustment recognized in hedging fund under equity
23 FAIR VALUE FINANCIAL ASSETS AND LIABILITIES
Please refer to note for information on input to valuation of other securities and investments stated at fair value in
level .
24 SUBSEQUENT EVENTS
Russia’s invasion of Ukraine has taken place after the
end of the reporting period. This war is expected to
have a negative impact on the financial performance
of Topsoe. Currently, a reliable estimate of the financial
effect on the consolidated financial statements cannot
be made and is not reflected in the outlook.
No events materially affecting the Company's financial
position at December , , have occured after
the balance sheet date.
25 CONSOLIDATED FINANCIAL STATEMENTS
Haldor Topsøe Holding A/S prepares consolidated
financial statements, which include the Company and
its Group enterprises.
100
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS OF TOPSOE A/S
26 DISCONTINUING OPERATIONS
On June , , Topsoe announced that it had sold its emissions control business areas. The divestment was
finalized on November , . 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.
Finalization of the divestment of the emissions control business areas impacted with a net profit of DKK
million after reversal of provisions made in previous years. has mainly been impacted by reopened tax assess-
ments.
DKK million
Value adjustment of net assets sold
Transaction-related costs -
Profit/loss on sale before income tax -
Income tax
Profit from discontinuing operations
101
HALDOR TOPSOE A/S ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS OF TOPSOE A/S
102
STATEMENTSHALDOR TOPSOE A/S ANNUAL REPORT 2021
STATEMENT BY THE EXECUTIVE MANAGEMENT AND
BOARD OF DIRECTORS ON THE ANNUAL REPORT
Registered Executive Management
Board of Directors
103
STATEMENTSHALDOR TOPSOE A/S ANNUAL REPORT 2021
INDEPENDENT AUDITOR’S REPORT
Opinion
Basis for opinion
Statement on Management’s review
Management’s responsibilities for the
Financial Statements
Auditor’s responsibilities for the audit of
the Financial Statements
104
STATEMENTSHALDOR TOPSOE A/S ANNUAL REPORT 2021
PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab
CVR No 33 77 12 31
mne 33507
