2
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Columbus
About Columbus 4
Highlights 5
Resilience in a year impacted by a global
pandemic 6
Management’s review
2020 outlined 10
Key figures and ratios 11
EBITDA margin remains stable and cash flow
increases in a challenging year 12
Positioned to seize market growth 18
Outlook for 2021 21
Corporate governance
Corporate governance 24
Corporate Social Responsibility 28
Helping our customers run a growing, profitable
and sustainable business 29
Empower our People 30
Risk management 33
Notifications to Nasdaq Copenhagen 36
Group overview 37
The Board of Directors 38
Executive Board 40
Shareholder information 41
Statement by management on the Annual Report 43
Independent Auditor’s Reports 44
Financial statements
Statement of comprehensive income 49
Balance sheet 50
Statement of changes in equity - Group 51
Statement of changes in equity – Parent company 52
Cash flow 53
Notes 54
Contents
Resilience in a year
impacted by a global
pandemic
Read the letter from the
Chairman of the Board and
the Interim CEO
Stable EBITDA margins
in a challenging year
Read the
Management Review
A new strategy to bring
us into the
future
See the whole
strategy unfolded
3
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Columbus
3
Annual Report 2020
About Columbus
4
Highlights
5
Resilience in a year imp
acted by a global pandemic 6
Financial Statements Corporate Governance Management’s Review Columbus
Columbus is well
-
positioned to become our
customers’ digital trusted
advisor
4
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
4
Annual Report 2020
About
Columbus
Columbus helps ambitious companies transform,
maximize,
and futureproof their business digitally.
Financial Statements Corporate Governance Management’s Review Columbus
1989
Columbus was founded in 1989
It is headquartered in Denmark with
offices and partners all over the
world, delivering solutions and
services locally
—on a global scale.
1,800
+
More than
1,800 employees
Columbus is a global IT services and
consulting company with
1,800+
employees
.
5,000
+
S
erving 5,000+ customers
Columbus is serving
5,000+
customers worldwide. Columbus
helps ambitious companies to
maximize, transform and futureproof
their business digitally.
9
doors
9 Doors to Digital Leadership
®
Columbus’ innovative solutions and
services portfolio 9 Doors to Digital
Leadership® delivers end
-to-end
digital solutions like cloud ERP,
Digital
Commerce, Data & Analytics,
and Application Management.
3
industries
Columbus creates digital solutions
that address the lifecycle and
sustainability demands of the retail
&
distribution
; food & beverage
products;
and manufacturing
industries.
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Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Highlights
Columbus
delivered stable results in a year impacted by Covid-19 with slightly
improved EBITDA margin
***.
Revenue (DKK)* **
1,655m
corresponding to a decline of 6%.
Cloud revenue
(DKK)*
59m
corresponding to an increase of 41%
Recurring revenue
(DKK)* **
409m
corresponding to a
n increase of 6%
Development in Cloud
revenue (DKKm)
EBITDA (DKK)* **
***
117m
corresponding to a decline of 6.5%.
Columbus Care revenue (DKK)*
152m
corresponding to an increase of 12%.
Profit after tax (DKK)
*
55
m
corresponding to an increase of 392%
5
Annual Report 2020
* All numbers and comments are on continued business
*
* For definition of Alternative Performance Measures, see page 102
***
Normalized EBITDA
Financial Statements Corporate Governance Management’s Review Columbus
42,063
59,264
41%
2019 2020
Growth
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Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Letter from the Chairman of the Board
and the Interim CEO
Resilience in a year
impacted by a global
pandemic
20
20 was in all aspects a very unusual year for Columbus, but despite a
global pandemic, we succeeded in keeping our company strong, thus
deliver
ed above guidance and improved EBITDA margin
. With determined
focus on creating customer value we improved customer
loyalty in difficult
times, and we set the direction for our next journey with the launch of our
new strategy
, Focus23.
Stable
results in a challenging year
Columbus came off to a strong start of the year
with solid top and bottom line growth. When
C
ovid-
19 hit in March, many customers started
holding
back investments which consequently
impact
ed our business slowing down sales,
delaying tenders and postponing project deliv-
eries.
Columbus is operating in markets and indus-
tries being impacted differentl
y by the global
pandemic. Our subsidiaries in the UK and
US have been mostly impacted by the lock-
down whereas Scandinavia seems to get
through the crisis slightly easier.
Our customers within retail have also been
seriously impacted as the lock-down closed
physical stores, whereas the food industry
and manufacturing were less troubled.
Letter from the Chairman of the Board
and the Interim CEO
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Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Despite a global pandemic, 2020 was a
year with progress in many areas of the
business, especially our Business Units
Dynamics Sweden and Norway delivered
strong top-line growth.
Organic revenue declined by 8.5% and
normalized EBITDA declined by 6.5%,
however EBITDA margin improved slightly
at 7.3%.
Our cloud business continued to grow and
will continue to be a key market oppor-
tunity going forward. In addition, we saw
good progress within Data & Analytics,
Modern Workplace and Columbus Care.
Despite Covid-19, we have seen progress
across our Business Units during 2020
and especially during Q4 where we started
seeing our sales picking up with a good
outlook for 2021.
Seen in the light of a global pandemic, we
consider the results satisfactory and in line
with expectations.
Acceleration of digitalization due to
Covid-19
There is no doubt that Covid-19 has been
the biggest digital transformation accelera-
tor in recent times.
Columbus is already working with our cus-
tomers digitally, however as Covid-19 hit,
we were forced to turn our entire interac-
tions with customers into 100% digital
sales, delivery, and support - overnight.
Despite a sudden change in our ways of
working, Columbus’ employees managed
to adapt to the new reality promptly and
continued a determined focus on support-
ing our customers and deliver superior
customer value in a difficult period.
During 2020, we have finetuned, optimized
and adapted our sales and delivery model
further to serve our customers in an en-
tirely digital business environment. We
have gained many new customers en-
gagements by only meeting the customer
digitally, and we have delivered a range of
project implementations 100% remote with
high quality, within time and on budget.
Improved customer loyalty
Creating value for our customers is by far
the most important focus for us. We work
continuously on improving customer rela-
tions, project delivery quality and customer
service to ensure that we are our custom-
ers’ preferred partner in their digital trans-
formation journey.
During 2020, we have increased customer
loyalty reaching an NPS (Net Promoter
Score) of 24 at the end of the year. Since
we initiated our customer loyalty program,
Columbus Pulse, we have continuously
improved and we have now reached a
solid result which we aim to improve fur-
ther with our new strategy Focus23.
Customer centricity is the cornerstone of
our new strategy, and we will build our en-
tire organization around creating value for
our customers. We will build digital advi-
sory skills which combined with our ser-
vices and offerings portfolio 9 Doors to
Digital Leadership® will ensure our
customers a strategic partner in their digi-
tal transformation journey.
Full focus on our next strategy
2020 was a year of major transitions for
Columbus. We announced our next strate-
gic journey, initiated a global re-organiza-
tion, and are in process of finding a new
strong leader for Columbus.
The sale of To-Increase was a major first
step in the transition to becoming a global
consultancy.
The divestment of To-Increase to Gilde
Buy Out Partners was completed 26 Janu-
ary 2021.The sale of To-Increase will im-
pact the corporate equity by approximately
EUR 90m/DKK 671m and the Parent
equity by approximately EUR 107m/DKK
794m. The Board of Directors proposes an
extraordinary dividend of DKK 6 per share
which will be adopted at the Annual Gen-
eral Meeting 27 April 2021.
In December, we divested our private
cloud busines to Atea which was also part
of simplifying our business. We can now
focus on public cloud solutions that target
our larger customers within the key indus-
tries Food, Retail and Manufacturing.
Focus23 will unleash the full growth poten-
tial and make it possible to gradually in-
crease profitable growth to minimum 10%
annually in 2023. We will intensify the fo-
cus on customer value, digital advisory
and a simplified operating model. Our
“I consider the results satisfactory and in line with
expectations. I want to express my deepest thanks
and gratitude to Columbus’ employees for a
fantastic effort during 2020”
Ib Kunøe, Chairman of the Board
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Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
goal is clear - to become our customers’
digital trusted advisor by driving increased
customer value. With a strong global team,
market leading solutions and a robust
financial position, we are ready to seize
the opportunities in a promising market.
Thank you
On behalf of the Board of Directors, we
would like to extend our sincere thanks to
everyone in Columbus for contributing to
keeping Columbus resilient during difficult
times and keeping up the spirit while work-
ing from home. You are all making a huge
effort every day and we are grateful for
your dedication and loyalty to Columbus.
Likewise, we would like to thank our cus-
tomers for their business and trust in
Columbus for the past years, and we are
pleased to welcome many new customers
to Columbus. We look forward to advising
and supporting you in your digital transfor-
mation journey.
Thank you to our shareholders for your
continued support.
Ib Kunøe
Chairman of the Board
Hans Henrik Thrane
Interim CEO & Corporate CFO
“With a strong global team, market leading
solutions and a robust financial position, we are
ready to seize the opportunities in a promising
market”
Hans Henrik Thrane, Interim CEO & Corporate
CFO
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Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
2020 outlined
10
Key fi
gures and ratios 11
EBITDA margin remains stable and cash flow
increases in a challenging year
12
Positioned to seize market growth
18
Outlook for 2021
21
9
Annual Report 2020
Management’s
review
Financial Statements Corporate Governance Management’s Review Columbus
Columbus is tying a bow
on the 2020
-strategy,
ready to take Columbus
to the next level with
Focus23
10
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
A year of major transitions
2020 was the start of a major transition for
Columbus with a sales process completed
for the software company To-Increase.
Furthermore, the Spanish entity was
closed, and the earn-out for the iStone
business adjusted accordingly. Finally, we
ended the year with divesting our private
cloud business to Atea.
Consequently, all numbers and comments
are on the continued business, thus ex-
cluding assets classified as held for sale
and discontinued operations.
In 2020, the Group delivered a decline in
revenue of 6.0% resulting in revenue of
DKK 1,655m. Reported EBITDA declined
by 12.0% to DKK 138m. Result for the
year after tax grew to DKK 55m.
Improved normalized EBITDA margin
Adjusting for the acquisition of Advania in
2020 the organic revenue declined by
8.5%. The revenue decline resulted in nor-
malized EBITDA of DKK 117m corre-
sponding to a decrease of 6.5% providing
normalized margin increase of 0.2 per-
centage points to 7.3%.
Full Year EBITDA above expectations
In connection with the Q3 financial state-
ment, Columbus readjusted the expecta-
tions for both top line growth and margin
upward based on the financial perfor-
mance in Q3 2020, current order book and
pipeline forecast. The full year guidance
for 2020 for the continued business was
expected in the range of DKK 1,600m and
DKK 1,700m. Accordingly, reported
EBITDA was expected to be in the range
of DKK 125m and DKK 135m.
The realized revenue is in the middle of
the adjusted guidance, while reported
EBITDA was slightly above expectations
due to a strong Q4 (DKK 4m - DKK 14m).
2020 outlined
Revenue was in line with expectations and EBITDA
was slightly above
expectations.
DKKm
2020 2019 Development
Revenue
(reported) 1,655 1,761 -6.0%
Revenue from acquisitions during 2020
-44 0 0.0%
Organic revenue
* 1,611 1,761 -8.5%
EBITDA
(reported) 138 157 -12.0%
A
djustment of provision for loss making contract 35 39 -11.6%
Adjustment of provision for earn out
-46 -71 36.0%
EBITDA from acquisitions during 2020
-11 0 0.0%
Normalized EBITDA
117 125 -6.5%
Normalized EBITDA margin
7.3% 7.1% 2.2%
* For definition of Alternative Performance Measures, see page
102
DKKm
Revenue Range EBITDA Range
Q3
outlook total business incl. discontin-
ued
operations 1,750 - 1,850 190 - 200
2020 Full year result total business
1,787 204
DKKm
Revenue Range EBITDA Range
Q3 Outlook
continued operations 1,600 - 1,700 125 - 135
2020
full year result
c
ontinued operations 1,655 138
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Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Key figures and ratios
DKK ´000
2020 2019 2018* 2017* 2016*
Income related figures
Columbus
Software licenses 4,186 10,328 29,373 26,673 42,212
Columbus
Software subscriptions 21,457 22,422 57,949 50,258 46,876
Columbus
Cloud 16,295 8,365 15,547 6,248 1,975
External licenses
78,204 73,774 74,029 94,629 86,495
External subscriptions
175,856 194,797 206,658 190,119 190,327
External cloud
42,969 33,698 24,095 9,215 4,837
Service
1,301,955 1,386,122 1,432,109 822,551 796,401
Other
13,811 31,529 35,492 19,069 23,584
Net revenue
1,654,733 1,761,035 1,875,252 1,218,762 1,192,707
Recurring revenue % of total revenue
24.7% 22.4% 22.7% 27.8% 25.3%
EBITDA before share
-based
payment
142,938 162,733 181,183 148,510 144,070
EBITDA
138,459 157,263 171,409 146,208 138,546
EBIT
83,044 12,632 107,516 106,729 105,271
Net financial items
-17,211 -10,734 7,925 -5,099 2,032
Profit before
tax 65,833 1,898 115,441 101,630 107,303
Result for the year,
continuing operations
55,211 -18,876 96,674 96,129 81,479
Result for the year,
discontinued operations
-6,649 39,866 0 0 0
Profit after tax
48,562 20,990 96,674 96,129 81,479
Balance sheet**
Non
-current assets 987,440 1,127,381 1,140,954 584,274 551,726
Current assets
438,944 527,136 492,604 267,489 285,780
Assets classified as held for sale
214,481 0 0 0 0
Total assets
1,640,865 1,654,517 1,633,558 851,763 837,506
Group shareholder equity
712,421 665,354 636,339 549,112 469,813
Minority interests
3,184 3,126 3,381 3,031 1,774
Total liabilities
831,369 986,037 993,838 299,620 365,919
Total liabilities relating to assets
classified as held for sale
93,891 0 0 0 0
Total equity and liabilities
1,640,865 1,654,517 1,633,558 851,763 837,506
DKK ´000
2020 2019 2018* 2017* 2016*
Investments in tangible assets
4,248 5,957 5,907 5,106 8,799
Cash flow
Cash flow from operating
activities 190,862 189,146 124,294 103,708 124,708
Cash flow from investing activities
-127,830 -106,370 -255,557 -95,609 -130,546
Cash flow from financing activities
-43,972 -45,853 154,663 -15,365 19,981
Cash flow from continuing operations
-10,542 -13,141 0 0 0
Cash flow from discontinued
operations
29,602 50,064 0 0 0
Total net change in cash and cash
equivalents
19,060 36,923 23,400 -7,266 14,143
Key ratios
EBITDA
-margin 8.4% 8.9% 9.1% 12.0% 11.6%
Operating profit margin (EBIT
-mar-
gin)
5.0% 0.7% 5.7% 8.8% 8.8%
Equity ratio***
43.4% 40.2% 39.0% 64.5% 56.1%
Return on equity***
7.0% 3.3% 16.0% 17.3% 17.2%
Return on invested capital (ROIC)***
12.2% 12.4% 22.5% 29.2% 31.0%
Number of shares
124,622 124,622 121,787 119,866 116,198
Average number of shares
124,622 123,012 121,370 119,101 115,628
Book value of equity per share
(BVPS)
5.72 5.34 5.23 4.58 4.04
Earnings per share (EPS) from
continuing operations
0.44 -0.16 0.78 0.80 0.70
Cash flow per share
1.53 1.54 1.01 0.85 1.04
Share price, end of period
11.24 9.65 12.68 14.80 10.70
Average full time employee for the
period
1,847 1,834 1,845 1,194 1,105
* 2016-2018 is not restated and include discontinued operations
**
All 2016-2019 balance sheet items include continuing and discontinued operations
*** Key ratios are calculated with balance sheet items including assets classified as held for sale
The key figures and financial ratios above have been calculated in accord
ance with Danish Finance Socie-
ty' "Recommendation & Financial Ratios”
12
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Columbus had revenue of DKK 1,655m in
2020 corresponding to a decline of 6.0%.
Organically, the revenue declined by
8.5%. Normalized EBITDA declined by
6.5% to DKK 117m. Reported EBITDA de-
clined by 12%.
The transition activities initiated in 2020 as
the start of our next strategy - Focus23
jumpstarted the development to a global
consultancy and impacted the financial
numbers accordingly.
Revenue development
Cloud increased by 41%
Cloud revenue continued to grow steadily
by 41% due to the continued cloud conver-
sion. Consequently, subscriptions de-
creased by 9% to DKK 197m and software
licenses decreased by 2% to DKK 82m.
The total software revenue declined by 1%
to 339m.
Continued progress in Columbus Care
Columbus Care continued to develop posi-
tively with a revenue increase of 13% to
DKK 152m.
Services revenue declined by 6% to DKK
1,302m. The decline was impacted by the
continued global Covid-19 uncertainty and
the reduced number of consultants
throughout the year.
Growth in recurring revenue
Recurring revenue grew by 4% to DKK
409m. The recurring revenue continues to
constitute a larger part of the total revenue
with recurring revenue constituting 25% of
total revenue (2019: 22%).
Development in recurring revenue
EBITDA margin remains stable and cash
flow increases in a challenging year
DKKm
2020 2019 Development
Columbus
Software licenses 4 10 -59%
Columbus
Software subscriptions 21 22 -4%
Columbus
cloud 16 8 95%
External licenses
78 74 6%
External subscriptions
176 195 -10%
External
cloud 43 34 28%
Services
1,302 1,386 -6%
Other
14 32 -56%
Total net
revenue
1,655 1,761 -6%
EBITDA
138 157 -12%
Development in services
revenue
Development in software revenue
195 176
22
21
135
152
42
59
395
409
2019 2020
Cloud
Columbus Care contracts
Columbus Software subscriptions
External subscriptions
1,386
1,302
2019 2020
217
197
84
82
42
59
343
339
2019 2020
Cloud
Software Licenses
Software Subscriptions
DKKm
DKKm
DKKm
13
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Cost development
Capacity adjustments reducing cost
Staff cost decreased marginally to DKK
1,061m as an effect of the capacity adjust-
ments early in the year to mitigate the ex-
pected Covid-19 impacts.
Less traveling reducing cost
Other external cost decreased by 17% to
DKK 147m. The reduction is primarily re-
lated to less internal travel.
The reported EBITDA showed a decline –
mainly due to a customer provision. The
major fixed price project in Columbus Nor-
way has been settled. The customer has
engaged with Columbus in a new contract
to complete the project on a time and ma-
terial basis. In addition, Columbus had
cost related to close down of the Spanish
Business Unit, and as the Spanish Busi-
ness Unit was part of the acquisition of
iStone, the related earn-out was adjusted
accordingly. The normalized EBITDA still
decreased by 6.5% from DKK 125m to
DKK 117m. This leaves a corresponding
EBITDA margin increase of 0.2 percent-
age points to 7.3% due to the reduced
staff costs and other external costs.
The reported result before tax increased to
DKK 66m.
Cash
Cash flow from continued operations was
negative DKK 11m. Operational cash flow
increased DKK 24m to DKK 119m but was
offset by higher investments. In total,
Columbus’ cash position improved by DKK
17m compared to 31 December 2019.
Accounts receivable
We have continued our close monitoring of
accounts receivables and continue to have
no significant loss on accounts receivable.
Equity
Columbus’ equity has increased by DKK
47m since 31 December 2019, primarily
due to the positive net result. With a total
equity of DKK 716m, Columbus has a sol-
vency of 43% (2019: 40%). The high sol-
vency ratio together with the cash position
leaves Columbus in a strong financial po-
sition that will be further strengthened
when the proceeds from To-Increase is
recognized in the result and equity in
January 2021.
Development in business segments
Western Europe normalized EBITDA im-
proving 32%
Revenue declined by 1% to DKK 1,439m.
Adjusting for the acquisition of Advania in
2020 the revenue declined by 4% to DKK
1,395m. The revenue decline is mainly
due to a revenue decline in Denmark and
UK (customer tenders and projects de-
layed due to Covid-19) which is only partly
offset by an increase in Norway and Swe-
den.
Reported EBITDA increased by 18% to
DKK 173m, but normalized for customer
provisions, acquisition and earn-out the
EBITDA increased by 32% to DKK 152m.
Eastern Europe
Revenue was stable at DKK 148m due to
a revenue increase in Estonia and Lithua-
nia offset by a decline in Russia of 7%.
Service revenue grew by 1% to DKK 109m
and Cloud revenue more than doubled
with license revenue declining 15%.
North America continues revenue de-
cline but increases EBITDA
Revenue declined by 17% to DKK 254m,
but EBITDA increased by 143% to DKK
12m. The revenue decline was mainly
driven by a continued decline in service
revenue due to slower turnaround than
expected and Covid-19 decreasing US in-
vestments. Due to the continued and mas-
sive presence of Covid-19 in the US, the
turnaround for US is being slowed down.
This is also changing the way customers
are engaging and in order to meet the
market demand we have started to oper-
ate the business in two different units to
support improved customer engagement –
one focusing on larger customers and one
focusing on small and mid-market custom-
ers.
Revenue by
business segments
83%
8%
17%
-8%
2019
Western Europe
Eastern Europe
North America
HQ and Eliminations
87%
9%
15%
-11%
2020
Western Europe
Eastern Europe
North America
HQ and Eliminations
14
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
14
Annual Report 2020
Solid foundation
for our new
strategy
Financial Statements Corporate Governance Management’s Review Columbus
Leading in cloud
770%
*
growth from 2016 to 2020
Strong Columbus Care market position *
162%
growth from 2016 to 2020
Recurring Revenue constitutes *
27%
of total revenue in
2020
*All numbers and comments are on the total business including discontinued operations
and acquired businesses
15
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
All numbers in this section about Colum-
bus2020 strategy is including the discon-
tinued operations and acquired busi-
nesses.
2020 was the fifth and final year of the
Columbus2020 strategy with the ambition
of being the preferred service provider of
digital business solutions globally in key
industries.
Having completed the Colubus2020 strat-
egy in 2020, we reached most of our ambi-
tions and we now have a solid starting
point for taking Columbus to the next level.
Columbus2020 was built around three
value drivers which measures the progress
of the strategy execution:
• Growth in the services business
• Scaling of own software sale
• Recurring service revenue and cloud
revenue
Growth in the services business
The services business is our largest reve-
nue contributor and the main driver for top
line growth. We aim to deliver higher
productivity and quality in our services
business to optimize delivery, minimize
risk and control cost.
With the acquisition of iStone in 2018, our
services business grew significantly with
the Infor M3 and Dynamics services busi-
ness from iStone.
In the period from 2016 to 2020, our ser-
vices business grew by 89%.
Columbus2020 – a solid foundation for our
new strategy
* EBITDA before share-based warrants
Development in Services Business
796
1,369
89%
2016 2020
Revenue and EBITDA development
DKKm
1,193
1,219
1,875
1,932
1,787
144
149
181
244
208
59%
2016 2017 2018 2019 2020
Total revenue EBITDA* Revenue growth
DKKm
16
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Scaling of own software
Columbus Software generated high earn-
ings and has historically been among the
main drivers for bottom line growth. During
the strategic period, we have converted
our software business from mainly on-
premise software solutions to nearly 100%
cloud.
With the conversion to cloud, our software
revenue mix has converted from on-prem-
ise software license to cloud subscriptions.
Since 2016, Columbus Cloud has grown
by 770%.
Our software subsidiary, To-Increase, con-
stituted 58% of our software business in
2020. With the divestment of To-Increase,
Columbus’ software business will only con-
stitute a minor part of our business going
forward.
Recurring service revenue and cloud
revenue
The recurring revenue consists of Colum-
bus Software and third-party software sub-
scriptions, cloud revenue and Columbus
Care revenue. Recurring revenue is an im-
portant component to improve predictabil-
ity in our business.
Becoming ‘cloud-based’ is the license to
operate and compete in the future, as it is
the foundation for delivering software as-a-
service, cost-effectively scale of our opera-
tions, and drive ecosystem enabled inno-
vation.
Recurring revenue reached a high level of
28% in 2017. With the acquisition of
iStone in 2018, we restated the long-term
goal of reaching 30% in 2019 to a long-
term target of 25% in 2021 as iStone had
less recurring revenue than Columbus.
In 2020, the recurring revenue constituted
27% of total revenue, thus exceeding long-
term target.
Leaders in cloud services
The transition from on-premise infrastruc-
ture to cloud or hybrid cloud started accel-
erating in 2017 which implied a significant
change in Columbus’ ERP business. The
cloud conversion had a short-term nega-
tive impact on revenue as sale of cloud
subscriptions is recognized on an ongoing
basis instead of upfront at the time of sale
and delivery.
However, the cloud adaption has been
one of the biggest growth opportunities for
Columbus during the past five years as
most companies will upgrade their on-
premise business applications to cloud.
During the past five years, our cloud busi-
ness has grown by 1,113% and is continu-
ing to grow.
In 2020, we launched a “cloud factory pro-
gram” to accelerate the cloud migration
and ensure our ERP customers a smooth
migration to the cloud. The cloud factory
initiative was launched across multiple
business units in Columbus. We collabo-
rated with Microsoft to conduct assess-
ments of more than 100 enterprise cus-
tomers globally. Internally, we created a
robust framework, methodology, and pro-
cess to migrate on-prem customers to the
cloud. We also migrated the first set of
customers to the cloud successfully.
Today, Columbus is positioned among the
leaders within cloud ERP in our key indus-
tries.
Acquisition of iStone a game-changer
In 2018, Columbus acquired the Swedish
IT services company iStone with 600 em-
ployees, global representation and a lead-
ing provider of business applications and
Commerce solutions. iStone brought
global leadership within Infor M3, Nordic
leadership within digital commerce and a
strong Microsoft Dynamics 365 position in
the Nordics. Combined with Columbus’
leading position within Microsoft Dynamics
globally, our common market position was
a game changer for Columbus.
Development in sale of
Columbus Software
Development in recurring service
revenue
47 52
42
9
35
91
97
6%
2016 2020
Columbus Cloud
Columbus Software Licenses
Columbus Software Subscriptions
1,193
1,787
302
482
25%
27%
71%
2016 2020
Total Revenue
Recurring revenue
% Recurring revenue from total
Growth
A
ccording to Gartner
80% of all ERP
customers will upgrade
to the cloud by 2025.
DKKm
DKKm
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Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Columbus Care - a key competitive
edge
Our Application & Infrastructure Manage-
ment services, Columbus Care, has in-
creasingly become a key market differenti-
ator when customers are investing in new
business critical applications running in the
cloud.
Many companies are working with a hybrid
portfolio, where some of their applications
are in the cloud and some are on-prem-
ises. At the same time, the demand for
business change continues to accelerate.
The combination of these two things
means that organizations are seeking
ways to simplify application integration and
ensuring high availability in a hybrid IT en-
vironment that has become even more
complex.
Columbus Care has been a key focus area
in the Columbus2020 strategy, and today,
we have a well-established global Colum-
bus Care organization and a strong market
position within Application & Infrastructure
Management Services. During the 2020
strategic period, Columbus Care contracts
have grown by 162% from 2016 to 2020
(2016 DKK 58m – 2020 DKK 152m).
Columbus Care will continue to be a major
driver for bottom-line growth.
End-to-end digital solutions
The 9 Doors to Digital Leadership® was
introduced in 2018 and is our global ser-
vices and solutions framework which ad-
dresses the lifecycle demands of the retail,
distribution, and manufacturing industries.
With the 9 Doors to Digital Leadership®
portfolio we expanded our traditional core
ERP services and solutions to address the
customers’ entire business challenge thus
enabling us to expand
our customer base
and reach out to new markets.
Over the past five years, Columbus has
developed the business from being mainly
an ERP service provider to a business ap-
plication service consultancy and among
the leaders within digital transformation in
our core industries.
Increasing customer loyalty
In 2016, we introduced Columbus Pulse,
which is a global loyalty and satisfaction
program that measures our customers’
loyalty monthly – using the Net Promoter
Score framework (NPS).
Columbus Pulse is used to review cus-
tomer engagements making sure that
Columbus and the customers are aligned
and that expectations are met. By using
Columbus Pulse proactively in customer
relationship management, we have man-
aged not only to increase the score, but
also to foster a more open dialogue and
closer relationship with our customers.
During the strategic period, Columbus
Pulse has improved gradually and in 2020,
Columbus Pulse reached a score of NPS
of 24 (2019: 14).
Global access to talent
Global sourcing is a key component of the
Columbus strategy to meet the unique
business requirements of our customers.
Columbus’ global delivery model enabled
by global sourcing provides customers
with end-to-end services distributed glob-
ally across geographies and time zones
and yet based on consistent systems,
tools and processes.
During 2020 Columbus continued to fur-
ther grow and mature global access to tal-
ent through Global delivery centres in In-
dia, Poland and Czech Republic. These
three centres put together are the back-
bone of Columbus Global Sourcing ap-
proach.
From a global people perspective, Colum-
bus continued to grow its global sourcing
in 2020. We added 85+ new team mem-
bers to the global talent pool. The total
size of the global talent pool is now 400+.
We also increased the breath of compe-
tencies during 2020.
Business growth was achieved in areas of
Data & Analytics, Modern Workplace, Au-
tomated Testing & QA, and Cloud Migra-
tion leveraging global delivery set-up.
High quality and risk management
Process Excellence is a key strategic ele-
ment of the Columbus2020 strategy to en-
sure high quality in our delivery organiza-
tion.
We have implemented a range of initia-
tives within Quality in Delivery, Cloud
Transitions, Release Management, Auto-
mated Testing, and a global process li-
brary with industry templates. In addition,
we have implemented “scaled agile” as an
addition in our delivery methodology called
Columbus Navigator and the end-to-end
guiding template for delivering enterprise
cloud projects for Business Applications.
Our focus on high quality in deliveries has
not only resulted in more profitable pro-
jects but has given us a competitive edge
and increased customer loyalty during the
past years.
Strong financial position
During the strategic period, EBITDA grew
by 98% (including the discontinued opera-
tion).
Columbus’ has a strong financial funda-
ment with a solvency rate of 43% and a
strong cash position of DKK 164m in 2020.
With a successful execution of the strategy
Coulmbus2020, Columbus has a strong
foundation for taking the business to the
next level focusing on digital advisory.
18
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Financial Statements Corporate Governance Management’s Review Columbus
Strong growth opportunities
Digital transformation remains a top prior-
ity and business leaders have now experi-
enced the importance of business continu-
ity in a world they cannot always foresee.
Every industry has in some way been af-
fected by the Covid-19 pandemic. For
many companies Covid-19 demonstrated
the fragility of supply chains and many en-
terprises suffered severe disruptions dur-
ing the initial lockdown.
With Covid-19, strategic and business
model change has rapidly translated, and
continues to translate, into new challenges
and priorities for leaders around the world.
1
Gartner Survey: Top Priorities for IT: Leadership Vi-
sion for 2021
According to a recent Gartner survey
2
,
69% of boards report accelerating digital
business initiatives in response to Covid-
19. In fact, 76% of survey respondents to
the 2021 Gartner CIO Survey
1
say that de-
mand for new digital products and services
increased in 2020 and 83% say that it will
increase in 2021
1
.
When asked to rank technologies they are
using or plan to use in the next year: Digi-
tal workplace technologies to support work
from home come out on top. Following be-
hind are artificial intelligence/machine
learning, robotic process automation, dis-
tributed cloud and multi-experience plat-
forms. These emerging technologies auto-
mate processes and decisions, enabling a
faster pace of business execution.
There is no doubt that Covid-19 has been
the biggest digital transformation accelera-
tor in recent times. And the CIO’ relation-
ship with the business is stronger than
ever before
2
.
As IT and business is further interlinked
and crucial for the continued growth, com-
panies are increasingly seeking a partner
that can act as a strategic business part-
ner in their digital transformation. A partner
that understands the business strategy,
2
Seize This Opportunity For Digital Business Accelera-
tion.
the industry processes and digital transfor-
mation - a digital trusted advisor.
Positioned to seize growth
opportunities
During the past five years, Columbus has
extended our business beyond ERP and
today we offer a wide services portfolio
within digital transformation - such as Data
& Analytics, Digital Commerce, Cloud and
Modern Workplace with strong annual
growth rates.
In addition, Columbus has intensified the
focus on services within digital transfor-
mation strategy, change management and
management consultancy for our larger
customers, and we have experienced an
increasing demand for these competen-
cies over the past couple of years.
Today, we act as digital advisor for a
range of our key customers seeking our
specific competencies and services linking
business and digital transformation.
Focus23 will further position Columbus
within this market space – digital trusted
advisor for larger companies.
Positioned to seize market growth
In 2021, the demand for
digital products and
servic
es will increase
19
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
On 12 November 2020, Columbus
launched our new three-year strategy
Focus23, which will be executed in the pe-
riod 2021 until the end of 2023.
With Focus23, Columbus will unleash the
full growth potential and make it possible
to gradually increase profitable growth to
minimum 10% annually in 2023.
The strategy contains an increased focus
on digital advisory, customer value, and a
simplified operating model.
Our ambition is to be our larger customers’
preferred digital trusted advisor. This ambi-
tion will intensify our focus on creating
value for our key customers with digital ad-
visory and a broad range of digital offer-
ings.
With the strategic decision of divesting
To-Increase, Columbus has taken the first
step to focus the business on digital advi-
sory and services for larger customers
within our key industries Food, Retail and
Manufacturing.
Columbus is already well-positioned within
Cloud ERP (Microsoft Dynamics and Infor
M3) and a wide range of digital business
application services with the 9 Doors to
Digital Leadership®. With Focus23, we ac-
celerate the growth of key business areas
such as Data & Analytics, Modern Work-
place, Digital Commerce and Columbus
Care.
Four drivers to unleash potential
Focus23 contains three strategic ele-
ments: Empower, Sustain and Delight,
which combined with Focus & Simplify will
take Columbus to the next level of becom-
ing digital trusted advisor for our key cus-
tomers.
Focused and simplified operation
The strategic element Focus & Simplify is
the foundation for our new strategy.
In order to ensure a profitable growth, we
will implement a focused and simplified op-
erating model to leverage global delivery
capacity and synergies in the organization,
including:
• A global operating model with local
presence and global delivery
• A new customer centricity organization
with focus on larger customers
• Uniform business processes to acceler-
ate collaboration globally
Empower – powered to drive customer
value
By building global capabilities within digital
advisory and intensify focus on customer
centricity, we strengthen the customer re-
lation and improve customer value.
Columbus is a people business and in or-
der to deliver on our strategic goals, we
rely on constant development of our highly
skilled, engaged and loyal employees.
We will run two key programs under the
Empower element:
• Accelerate you
• Lead for trust
The programs will ensure that we build ap-
propriate digital advisory skills across
roles, further strengthen career tracks and
improve leadership skills and training.
Sustain – sustainability in everything
By advising on industry sustainability
within our key industries and offering digi-
tal solutions to run a sustainable business,
we build trust and sustainable relation-
ships with our customers.
We will intensify the focus on applying and
implementing solutions within sustainability
that address our customers’ need for digi-
talization in a sustainable way.
We will run one key program under the
Sustain element:
• Build to Sustain
The program will focus on developing sus-
tainable offerings to our customers and es-
tablish a clear position for Columbus as a
responsible company supporting and driv-
ing our selected SDGs.
Focus23 – our new journey
“Our ambition is to be our larger customers’ preferred digital trusted
advisor. To realize that ambition we have defined a strategy based on
three main strategic elements.”
20
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Delight – dedicated to delight our cus-
tomers
By creating higher value to our customers,
we achieve a better customer experience
resulting in higher customer satisfaction
and long-lasting relationships and advo-
cacy.
Columbus will implement a customer serv-
ing concept that puts the customers in the
center of our organization. Customer loy-
alty is essential for growth.
We will run two key programs under the
Delight element:
• Understand Customer
• Deliver Delight
The programs will focus on developing
Strategy & Change capabilities and offer-
ings, develop our customer segmentation
and extend customer feedback with Co-
lumbus Pulse. In addition, improvement of
quality and value in delivery are key initia-
tives in the Deliver Delight program.
Phased strategy execution
The execution of the three strategic ele-
ments; Empower, Sustain and Delight will
run in a phased manner.
In 2021, we will focus on building and initi-
ating the different programs under each of
the strategic elements. We will engage our
leaders and employees globally to ensure
engagement, involvement and ownership
in the organization.
21
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
We are laying behind us the most unprec-
edented year in modern history, thus en-
tering 2021 with a second wave of Covid-
19. However, we can now see the light at
the end of the tunnel.
2021 is expected to be the year of stabili-
zation, and a reset for a number of disrup-
tions experienced this year with an eco-
nomic recovery to follow. Global GDP
growth is forecasted to reaching 5.8%
3
building on expected widespread distribu-
tion of vaccines during the second half of
2021, leading to ease of mobility and
slowly openings of societies.
The digital transformation is expected to
accelerate post covid-19 with emphasis on
making supply chain more resilient, opti-
mize remote workplaces, improve cloud in-
frastructure, scaling up digital commerce
and infusing data and analytics into the
core of the business’ to predict and reach
to market challenges promptly.
4
Columbus is well positioned to capture the
global market trends, which are
3
J.P. Morgen 2021 Market Outlook
4
Deloitte: 2021 Technology Industry Outlook
representing our key growth areas in the
newly announced Focus23 strategy.
However, as we are not yet post Covid-19,
our focus is to continue to stay resilient
during uncertain times. As a global com-
pany with customers around the world,
Columbus is subject to day-to-day varying
market conditions due to Covid-19, and
lockdowns and mobility restrictions con-
tinue to impact our customers and our em-
ployees.
We expect the extraordinary uncertainty in
our marketplace will remain throughout
2021, but with positive trends and growth
within digital transformation.
Focus23: Build-plan-execute
2021 will be an exciting year for Columbus
with the start of Focus23. In 2021, we will
focus on further defining our strategic pro-
grams, target setting and initiate execut-
ing, as described in the Focus23 para-
graph on page 18.
The strategic element Focus & Simplify is
already in execution phase with a global
roll-out of business processes, customer
centricity organization and a global operat-
ing model.
Top priorities for 2021
In 2021, the top priorities will be:
• On-boarding of new CEO to Columbus
• Build-plan-execute the three strategic
programs under Focus23; Empower,
Sustain and Delight
• Roll-out global business application
platform
• Implement new global operating model
• Mitigating risk related to Covid-19
• Cost savings and cost-efficient opera-
tions
• Grow 9 Doors to Digital Leadership with
special focus on Data & Analytics, Mod-
ern Workplace and Digital Commerce
Financial Guidance
Despite the continued Covid-19 uncer-
tainty and the negative market impact, the
management believes that there continues
to be good business opportunities going
forward and Columbus continues to react
promptly to changes in our markets, thus
mitigating risks and keep business in good
health.
Columbus’ ambition is to gradually in-
crease profitable growth to minimum 10%
annually in 2023.
Outlook for 2021
DKKm
Revenue EBITDA
2021 Outlook
1,650 - 1,800 125 - 150
Implied growth to 2020 result
0% - 9% -2% - 18%
22
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Based on the financial performance in
2020, current order book and pipeline fore-
cast, our guidance for full-year 2021 is as
follows:
Revenue is expected to be in the range of
DKK 1,650m – 1,800m corresponding to a
growth of 0%-9%.
EBITDA is expected to be in the range of
DKK 125m – 150m corresponding to a de-
crease of 2% to an increase of 18% com-
pared to the 2020 EBITDA adjusted for
customer provision and earn-out adjust-
ments.
Events after the balance sheet date
Divestment of To-Increase
On 26 January 2021, Columbus com-
pleted the divestment of its software com-
pany To-Increase in Holland to Gilde Buy
Out Partners and the management of To-
Increase for a price (Enterprise Value) of
EUR 113m. The transaction was effective
as of 26 January 2021.
The total net proceeds of EUR 115m/DKK
858m were paid in cash at completion.
The sale of To-Increase has impacted the
corporate equity by approximately EUR
90m/DKK 671m and the Parent equity by
approximately EUR 107m/DKK 794m.
The Board of Directors proposes an ex-
traordinary dividend of DKK 6 per share
which will be adopted at the Annual Gen-
eral Meeting 27 April 2021.
23
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Corporate
governance
23
Annual Report 2020
Corporate governance
24
Corporate Social Responsibility
28
He
lping our customers run a growing, profitable and
sustainable business
29
Empower our People
30
Risk management
33
Notifications to Nasdaq Copenhagen
36
Group overview
37
The Board of Directors
38
Executive Board
40
Shareholder information
41
Statement by management on the Annual Report
43
Independent Auditor’s Reports
44
Financial Statements Corporate Governance Management’s Review Columbus
24
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Corporate governance
25
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
26
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Diversity and inclusion
27
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Further information
The statutory report on Corporate Governance
for 20
20, cf. section 107b of the Danish Finan-
cial Statement Act is available at:
www.colum-
busglobal.com/Investors/Corporate Governance
Statements
Remuneration Policy, including g
uidelines for in-
centive programs
, cf. section 139 and 139a of
the Danish Companies Act
is available at:
www.columbusglobal.com/Investors/Remunera-
tion
The Remuneration Report
for 2020, cf. section
139b of th
e Danish Companies Act is available
at:
www.columbusglobal.com/Investors/Remu-
neration
The
statutory report on gender distribution for
2
020, cf. section 99b of the Danish Financial
Statements Act
is available as part of the CSR
Report
at: www.columbusglobal.com/Inves-
tors/CSR
28
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Corporate Social Responsibility
More Information
The full CSR Report
for 2020
is available at:
www.colum-
busglobal.com/Investors/CSR
29
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
With ever-increasing emphasis on sustain-
ability, organizations seek new, innovative
business models to future-proof, trans-
form, and modernize their infrastructure.
Columbus helps our customers future-
proof their business by enabling them to
run a sustainable, growing, and profitable
business through digitalization.
Columbus has strong domain knowledge
within key industries based on more than
30 years of experience and profound in-
sights with more than 5,000 customers. As
sustainability is becoming increasingly im-
portant, we are stepping forward and lead-
ing our customers in creating a better to-
morrow.
We offer end-to-end sustainable digital so-
lutions such as Cloud ERP, Digital Com-
merce, Data & Analytics, and Application
Management and advisory services to ad-
dress the lifecycle and sustainability de-
mands of the manufacturing, food, and re-
tail and distribution industries.
Manufacturing
An acute shortage of skilled workforce,
expensive machinery, and increasing pro-
duction costs have a high impact on the
manufacturing sector. Columbus supports
manufacturers to stay ahead of the
competition curve by bringing Industry 4.0
best practices into the picture. We enable
the players to upgrade their technological
capabilities and build a sustainable, relia-
ble, and resilient infrastructure.
Our services include, but are not limited to,
efficient global supply chain integration,
IoT for improved connectivity, personaliza-
tion and configuration, as well as artificial
intelligence and machine learning-related
expertise for demand prediction and plan-
ning.
This results in streamlined production at a
lesser cost, and an efficient global supply
chain.
Food, Beverage & Process
The last few decades have seen an infuse
of IT in the food and beverage industry. In-
creased competition from medium and
small companies and evolving consumer
needs necessitate food manufacturers and
retailers to build capabilities around tech-
nology for pricing, to forecast customer de-
mand, ensure high levels of quality in a
highly regulated industry.
Columbus solutions help our clients in-
crease transparency and traceablity
across the supply chain to ensure a
granular MRP. Columbus solutions help
our customers respond to changing cus-
tomer dietary preferences and compliance
mandates by minimizing wastes, improving
the efficiency of supply chains and inven-
tories, optimizing delivery routes, automat-
ing manual processes, and ensuring that
the food products adhere to the highest
quality and safety standards.
Retail & Distribution
A modern-day consumer goes through
several touchpoints before making a pur-
chase. Columbus enables retailers, distrib-
utors, and brands to ensure a seamless
customer experience throughout this jour-
ney. Our solutions enable our clients to
provide a unified customer experience
across all channels and touchpoints, opti-
mize costs with centralized inventory man-
agement, increase order values through
improved engagement, maximize revenue
from existing customers, and gain new
customers.
New Sustainable Solutions in 2020
During 2020, Columbus has continued to
develop new offerings within sustainability
and closely work with our customers to
support their sustainability journey.
Below is a selection of our sustainability
solutions:
• Route optimization: Helping our cus-
tomers reduce carbon emissions, as
well as ensure faster transportation, by
determining the most cost-efficient
route.
• Resource productivity: Working with our
customers to maximize resource
productivity by providing solutions for
uninterrupted communication, file stor-
age and sharing, as well as ensuring
security.
Sustainable operations: Helping our cus-
tomers in developing a cost-effective sup-
ply chain to meet the ever-changing cus-
tomer needs and future-proofing their or-
ganizations
Helping our customers run a growing,
profitable and
sustainable business
30
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Columbus is a people business and our
employees are our greatest asset. There-
fore, it is crucial that we attract, develop,
and retain the best people in the industry.
We want Columbus to be a company
smart people join and where they stay for
many years. Key success factors to attract
talents are to ensure that Columbus has a
strong employer brand and is known as a
workplace with attractive working condi-
tions and great professional and personal
development opportunities.
To ensure an attractive career path and
support high performance across Colum-
bus, we are setting individual targets in our
Performance Excellence Program that
support business strategy, operational and
financial goals and we support individual
learning and career development in our
Career and Competence Framework.
A key element to continue to develop com-
petences is our Columbus Academy – our
global virtual training framework – which is
constantly extended to develop our highly
skilled, engaged, and loyal employees.
A resilient team - physically apart but
mentally close
As the global pandemic hit the world in
March, Columbus’ focus was on taking
care of our employees and overnight we
initiated 100% remote working for all.
In most of our locations, our employees
have had to work from home since March.
Even though we have been used to work-
ing together digitally internally across Co-
lumbus for many years, having to work
from home full-time was a significant
change in many employees’ everyday
lives.
Empower our People
Columbus is built on our talented people serving our customers all over the world
around the clock. Attracting, developing, and retaining our talents is crucial for
Columbus and will continue to be a key part of our new strategy Focus23. With
C
ovid-19 we have proven the resilience of our global community, the fighting spirit
in our teams and the dedication from all our people to go that extra mile for our
customers even in difficult times.
31
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
However, the readiness for change, the
fighting spirit, and the dedication to take
care of colleagues and customers in a dif-
ficult time, has proven the resilience of our
global community. We might be socially
apart but mentally; we are still closely con-
nec
ted.
T
o ensure the wellbeing of employees,
Columbus implemented several initiatives,
such as videos from the CEO with updates
to all employees and daily “Inspiration for
y
ou” e-mails with ideas on how to stay in
touch with colleagues, guides to working
remote, guides to ensure efficient Teams
meetings, Columbus Academy courses,
exercise inspiration and sharing of home
office photos and fun things to do at home.
W
e are confident that we have a strong
community and together we will continue
to stay strong.
Empow
er our People
Motivated, dedicated and skilled people
are crucial for reaching our ambitious
goals. Therefore, we continue the strategic
focus on our people with our new strategy
Focus23. The strategic element Empower
will focus on development of our highly
skilled people, build digital advisory skills,
further ensure exciting career tracks and
improve leadership skills across Colum-
bus.
We are excited about the new strategic
journey ahead of us.
32
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32
Annual Report 2020
Preparing for
the future is
good business
Financial Statements Corporate Governance Management’s Review Columbus
Business Development
transform
your strategy and business model
Digital Advisory
maximize
your operations and supply chain
Sustainable growth
futureproof
your customer value add
33
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
As Columbus has grown and developed
over time, focus on risk management has
increased and become an integrated part
of the Group’s business activities. By con-
stantly monitoring and mitigating risks, Co-
lumbus aims to reduce risks to an ac-
ceptable level in order to reduce potential
negative impact on growth, activities and
results.
Columbus risk management is organized
according to the “Three lines of defence”
model which organizes roles and responsi-
bilities for risk decisions and controls to
ensure efficient risk management and gov-
ernance.
The Executive Board is responsible for the
ongoing risk management and continu-
ously considers and reviews key risks.
Risk management is reported to and dis-
cussed with the Audit Committee at com-
mittee meetings during the year.
Once a year, a formalized updated risk as-
sessment, including measures to mitigate
risks, is reported to the Board of Directors
for approval.
The Board of Directors has the final re-
sponsibility for the Group’s risk manage-
ment, whereas the Audit Committee su-
pervises compliance with the framework
determined by the Board of Directors and
the Executive Board.
Risk definition
Columbus’ is exposed to a number of
commercial and financial risks that poten-
tially could reduce the ability to realize the
Company’s strategic and operational ob-
jectives. Risks are evaluated in terms of:
Probability that the risk will materialize
X
Impact without any mitigation
=
Gross Risk
-
Mitigation activities
=
Net Risk
Risk management
As a global company operating in a continuously changing environment,
Columbus is exposed to a number of commercial and financial risks.
Consequently, it is essential for the Company to ensure that risks are
constantly
identified, monitored and controlled in order to reduce potential negative impact
on growth, activities and results.
34
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Financial Statements Corporate Governance Management’s Review Columbus
Risk handling
Columbus constantly strives to bring risks
to a level that is acceptable. Columbus’
seeks to transfer the risk to a third party
and/or to mitigate the risk seeking to mini-
mize the exposure. Ultimately some risks
will remain that Columbus accepts. By
constantly monitoring and mitigating these
risks, Columbus aims to reduce them to an
acceptable level.
Risk grouping
Columbus groups the risks in Commercial
and Financial risks.
Columbus’ potential to realize the Com-
pany’s strategic and operational objectives
is exposed to several commercial risks,
such as the ability to adapt to market
changes, project and contract risks, em-
ployee dependency and partnership with
software providers.
Due to Columbus’ international activities,
investments and financing, the Group’s
earnings and equity are impacted by
changes in currency rates, interest rates,
liquidity and credit risk. The overall objec-
tive of the financial risk management is to
reduce the sensitivity of earnings to fluctu-
ations in economic trends.
The Parent Company controls the financial
risks in the Group centrally and coordi-
nates the Group’s liquidity management,
including provision of capital and place-
ment of excess liquidity pursuant to the
“Finance policy and financial risk manage-
ment guidelines” determined by the Board
of Directors and the Executive Board.
These guidelines are updated and ap-
proved by the Board of Directors annually,
based on a low risk profile so that currency
and interest risks only emerge in commer-
cial conditions.
Internal controls and risk management re-
lated to financial reporting are described
on page 27 under “Corporate Governance”
and are included in the Company’s Statu-
tory Corporate Governance statement, cf.
section 107b of the Danish Financial
Statements Act which is available on
Columbus’ website.
The top risk issues are further described
on the next page.
35
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
IT, GDPR and cybercrime
Project and contract
risks
Employee dependency
Competitive pressure and
market changes
Partnership with software
providers
Key IT risks are unauthorized
attacks and operational de-
pendency and potential non
-
compliance to personal data
regulation including General
Data Protection Regulations
(GDPR).
It is crucial to Columbus’ ser-
vices projects to be able to exe-
cute high quali
ty at the agreed
time and price. Risks are at-
tached to the Sale, Analysis
and Design, Development, Im-
plementation and
Deployment
phases.
Columbus is a knowledge
-in-
tensive company and in order
to continuously offer optimal so-
lutions, develop innovative
p
roducts, and ensure satisfac-
tory financial results, it is neces-
sary to attract, retain and de-
velop the right employees.
Rapid changes and competitive
pressures from both existing
and new competitors in the IT
market provide a risk of losing
relevance.
Columbus’ business is to a
wide extent based on imple-
mentation and servicing of cus-
tomer solutions based on third
party software and cloud prod-
ucts. Partnerships with our soft-
ware and cloud providers is of
crucial importance to the imple-
mentation of Colum
bus’ busi-
ness strategy.
Risk
Business interruptions, property
theft and regulatory conse-
quences leading to financial
losses and reputational dam-
age.
Potential impact is consid-
ered high, but mitigation re-
duces risk and probability.
Incorrect pricing and unclear
scoping pose a risk of cost
overruns and delivery risks.
Probability is considered
low/medium and impact me-
dium.
Lack of talent will limit the future
growth and loss of key employ-
ees could have negative impact
on the existi
ng business. Both
probability and potential impact
is considered medium.
Failing to spot and follow mar-
ket trends and development
could have a negative impact
on the growth opportunities and
existing business.
Both proba-
bility and potential impact is
cons
idered medium.
Loss of partnership agreements
or deteriorating relationships
could have a significant nega-
tive impact on the overall busi-
ness.
Probability is considered
low and impact medium/high.
Impact
Mitigation
Columbus is in the process of
adopting the ISO 27001 and
27002 framework and uses ITIL
v3 standards for IT operations
to follow a best practice ap-
proach to IT service manage-
ment. Cyber security prevention
tools
and awareness
have been
further
upgraded during 2020.
P
art of the risk is transferred to
a third party through cybercrime
insurance
.
By focusing on the sales phase,
we are striving towards repeti-
tion in solving the customer
problems and the procedures
by which these problems are
managed. Through pro
ject re-
views and ongoing analyses
before, during, and after initia-
tion, Columbus aims that con-
tracts are entered into
with the
correct pricing
and estimations.
Columbus has the goal of being
an attractive workplace and
achieves this through incentive
prog
rams, attractive working
conditions, employee and man-
ager development, and placing
great importance on the com-
pany culture.
All employee’s
heartbeat (based on NPS ap-
proach) are measured on a
monthly basis to ensure good
culture, personal progress and
emplo
yee development
Columbus is continuous
ly im-
proving and developing new
market and industry relevant
services and solutions with the
9 Doors to Digital Leadership
®
We measure and react to cus-
tomer loyalty, we monitor mar-
ket development and competi-
tion. We c
onstant development
our skilled employees to ensure
high quality in delivery of pro-
jects and services.
Columbus
has strong strategic
partnership
s with Microsoft and
Infor
, among others.
Columbus is
in close dialog with our major
partners on an ongoing basis,
which is mitigating the risk of sud-
den incidents to deteriorating the
partnership.
Risk issues and actions
36
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Notifications to Nasdaq Copenhagen
2020
1
6 January
Columbus
acquires Advania Business Solutions in Norway
2
17 February
Incentive scheme
3
18 February
Transactions
by members of senior management in shares issued by Columbus
A/S
and related securities
4
19 February
Amendment
of Articles of Association
5
24
March
Columbus
Annual Report 2019
6
24 March
Columbus Financial Result for 2019
7
25 March
Transactions by members of senior management and Board of Directors in
shares issued by Columbus A/S and related securities
8
27 March
Transactions by members of senior management and Board of Directors in
shares issued by Columbus A/S and related
securities
9
3
April
Notice
to convene annual general meeting
10
28
April
Interim
management statement for Q1 2020
1
1
28 April
Passing
of Columbus Annual General Meeting and subsequent constitution of
the
Board of Directors
1
2
30 April
Amendment
of Articles of Association
1
3
19 August
Columbus A/S Interim Report 20
20
1
4
27 August
CEO & President Thomas Honoré is leaving Columbus
1
5
25 September
Updated
Columbus Financial Calendar 2020
1
6
28
October
Columbus
initiates a structured sales process in relation to To-Increase
1
7
12 November
Q3 Report 2020
18
12
November
Columbus
launches new strategy Focus23
19
2
1 December
Columbus
enters into agreement regarding divestment of To-Increase
2021
1
15 January
Works
Council consultation procedures finalized in relation to Columbus divest-
ment
of To-Increase
2
26 January
Columbus
completes the divestment of To-Increase
3
10 March
Major shareholder information
pursuant to Section 30 of the Danish Capital Mar-
kets Act
4
15 March
Extraordinary dividend payment
Financial calendar 2021
Annual Report 2020
16
March 2021
Q1 Report 2021
18
May 2021
Annual General Meeting
27
April 2021
Interim Report H1 2021
1
8 August 2021
Q3 Report 2021
3
November 2021
Immediately following the publication, the notifications will be available on Columbus’ website: www.columbusglobal.com
37
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Group overview
Company
Country
Ownership by
Columbus A/S,
%
Columbus A/S’
share of voting
right, %
Average no. of
employees
Columbus A/S
Denmark
380
Subsidiaries
Western Europe
Columbus M3 Danmark ApS
Denmark
100
100
22
R H ApS
Denmark
100 100 0
Columbus Norway AS
Norway
100 100 113
Columbus Dynamics Norge AS
Norway
100 100 42
iStone Norge AS
Norway
100 100 0
Columbus Sweden AB
Sweden
100 100 476
iStone
AB
Sweden
100 100 0
iStone Saplication AB
Sweden
100 100 0
Columbus Global (UK) Ltd.
England
100
100
213
iStone UK Ltd
England
100 100 0
iStone Switzerland SA
Switzerland
100 100 2
Columbus Deutschland GmbH
Germany
100 100 13
Company
Country
Ownership by
Columbus A/S,
%
Columbus A/S’
share of voting
right, %
Average no. of
employees
Eastern Europe
AO
Columbus
Russia
100 100 176
000
Columbus Global
Russia
100 100 7
Columbus Global
Ukraine
Ukraine
100 100 2
Columbus Global
Kazakhstan
Kazakhstan
100 100 3
UAB
Columbus Lietuva
Lithuania
100 100 61
Columbus
Eesti AS
Estonia
51 51 80
Columbus Global s.r.o
Czech
100 100 28
Columbus
Poland Sp.z.o.o.
Pol
and 100 100 29
North America
Columbus US
Inc.
USA
100 100 167
Columbus M3
Inc.
USA
100 100 8
Asia
Columbus Global Services
India Pvt. Ltd.
India
100 100 13
Rest of world
Columbus
Chile SpA
Chile
100 100 12
Note: The overview only contains the Group
’s operative companies.
** 285 employees in Columbus Global Services India Pvt. Ltd. are allocated to the other individual subsidiaries
38
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
The Board of Directors
I
b Kunøe
Sven Madsen
Born
1943
1964
Title and position
Chairman of the Board
Member of the Board since 2004, re
-elected in 2020, term expires 2021
Member of the Board since 2007, re
-elected in 2020, term expires 2021
CFO in Consolidated Holdings A/S
Member of the Audit Committee
Education
Holds an HD Graduate Diploma in Organization and Management as well as a back-
ground as a
professional officer (major).
Holds a Graduate Diploma in Financial and Management Accounting and an MSc in
Business Economics and Auditing
Independency
Does not
fulfil the Committee of Corporate Governance definition of independency
Does not
fulfil the Committee of Corporate Governance definition of independency
Chairman of the Board
Atea ASA, Consolidated Holdings A/S, X
-Yacht A/S, Calum, Åbyhøj K/S, Calum,
Værløse K/S, Calum, Bagsværdlund K/S, Komplementarselskabet Åbyhøj ApS,
Komplementarselskabet Værløse ApS
and Komplementarselskabet Bagsværlund
ApS
CHV III ApS
Member of the Boa
rd
Atrium Partner A/S and
Kosmetolog Instituttet A/S
Atea ASA, Consolidated Holdings A/S, core:workers AB, core:workers Holding A/S,
X
-Yachts A/S, Ejendomsaktieselskabet af 1920 A/S, CHV V A/S, DAN-Palletiser Fi-
nans A/S and MonTa Biosciences ApS.
Specia
l competencies
Company management, including management of IT companies, development of
and dealing with companies.
General management, M&A, business development, economic and financial issues.
No. of shares 31
Dec 2020
360,000
768,529
Changes in fiscal years, shares
0
0
Total no. of warrants 1
Jan 2020
90
,000
180
,000
No. of warrants exercised in 2020
0
0
No. of warrants granted in 20
20
0
0
Total no. of warrants 31 Dec 2020
90,000
180,000
39
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Peter Skov Hansen
Karina Kirk Ringsted
Born
1951
1971
Title and position
Member of the Board since 2012, re
-elected in 2020, term expires 2021
Chairman of the Audit Committee
Member of the Board since 2018, re
-elected in 2020 term expires 2021
Owner of KIRK & CO.
Executive and board advisory
Education
Completed State Authorized Public Accountant education in 1980, registered as
nonpracticing.
Holds a Master of Science in International Business Administration (1996), NYU
Stern School of Business, MBA selected classes (1994), Executive, Board Leader-
ship and Governance (2017)
Independency
Fulfils
the Committee of Corporate Governance definition of independency
Fulfils
the Committee of Corporate Governance definition of independency
Chairman of the Board
Topstykket A/S
–
Member of the Board
X
-Yachts A/S
–
Special competencies
Business development and financial, accounting and tax related issues.
General management, management of consulting companies, market and customer
leadership, business development and business transformation.
No. of shares 31
Dec 2020
280,000
20,000
Changes in fiscal years, shares
0
0
Total no. of warrants 1
Jan 2020
90,0
00
90,000
No. of warrants exercised in 2020
0
0
No. of
warrants granted in 2020
0
0
Total no. of warrants 31 Dec 2020
90,000
90,000
40
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Hans Henrik Thrane
Born
1968
Title and position
Interim CEO & Corporate CFO
Joined in July 2010
Education
Holds a Graduate Diploma in Financial and Management Accounting and an MSc in
Business Economics and Auditing
Special competencies
General management, M&A, business development, economic and financial issues.
No. of shares 31
Dec 2020
1,128,800
Changes in fiscal years, shares
0
Total no.
of warrants 1 Jan 2020
1,
320,000
No. of warrants exercised in 2020
0
No. of warrants granted in 20
20
180,00
0
Total no. of warrants 31 Dec 2020
1,
500,000
Executive Board
41
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
At the end of 2020, the price of the
Columbus A/S share was DKK 11.24,
while at the end of 2019 it was DKK 9.65 –
an increase of 16.48% (2019: -23.9%)
6
.
I
n 2020, a total of 43m shares were traded
corresponding to 34.5% of the total num-
ber of shares at the end of 2020 (2019:
21.8%). The average trade per business
day in 2020 was DKK 1.4m (2019: DKK
1.2m)
6
.
T
he Company’s market value amounted to
DKK 1,401m at the end of 2020 against
DKK 1,203m at the end of 2019.
6
Source: Nasdaq Copenhagen A/S
Share capital
At the end of 2020 the share capital in
Columbus A/S comprised of 124,622,132
shares at DKK 1.25 corresponding to nom-
inal share capital of DKK 155,777,665
(2019: 124,622,132 shares at DKK 1.25
corresponding to nominal share capital of
DKK 155,777,665).
E
ach share provides one vote. The shares
are marketable securities and no re-
strictions have been set for the shares’ ne-
gotiability. The shares must be named and
noted in the Company’s share register.
Shareholders
At the end of 2020 Columbus A/S had
6,716 registered shareholders, who to-
gether owned 97.75% of the total share
capital.
T
he following shareholders have informed
Columbus A/S of possession of 5% or
above of the share capital:
No. of shares %
Protector Forsikring
ASA
6,267,742 5.03
Consolidated
Holdings A/S
57,634,032 46.25
Ib Kunøe
360,000 0.29
57,984,032 46.54*
* Due to shareholder voting agreements, Consolidated
Holdings A/S holds 47.49% of the voting rights.
Shareholder information
Share price development in 2020
6
:
Shareholders
Share data
Share capital
DKK 155,777,665
No. of shares
124,622,132
Stock exchange
Nasdaq Copenhagen A/S
ISIN code
DK0010268366
Abbreviated name
COLUM
Index
Mid Cap
Share price at year-end
DKK 11.24
46.25%
2.06%
5.03%
46.66%
Consolidated Holdings
Board of Directors and Executive Board
Protector Forsikring ASA
Other
42
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Members of Columbus A/S’ Board of
Directors and Executive Board owned in
total 48.31% of the share capital at the
end of 2020.
Dividend
The Company’s dividend policy is to dis-
tribute dividend of minimum 10% of the
nominal share capital each year, corre-
sponding to DKK 0.125 per share. Be-
sides, the Board of Directors may decide
to propose to the General Meeting that this
dividend be supplemented with an extraor-
dinary dividend for a specific fiscal year.
However, it is decisive for Columbus to
reduce debts and improve financial re-
sources in order to be able to seize any
positive development opportunities for
continued strengthening of the long-term
value creation for the Company. The
Board of Directors may therefore decide to
deviate from the dividend policy and pro-
pose at the General Meeting that divi-
dends are not distributed for a specific
fiscal year.
T
he Board of Directors proposes an ex-
traordinary dividend of DKK 6 per share
which will be adopted at the Annual Gen-
eral Meeting 27 April 2021. The distribu-
tion takes place with earned profits arising
from the proceeds in connection with the
Columbus’ divestment of To-Increase.
As a result of this extraordinary dividend
payment, the Board of Directors has de-
cided not to propose distribution of ordi-
nary dividend for the fiscal year 2020.
T
he proposed extraordinary dividend pay-
ment must be adopted at the Annual Gen-
eral Meeting which is scheduled to be held
on 27 April 2021.
I
nvestor Relations
Columbus seeks to provide a high and
consistent level of information to our
shareholders and other interested parties.
A company goal is to have an open and
active dialogue with shareholders, share
analysts, the press and the public in order
to ensure the necessary insight and
thereby the best possibility to evaluate the
Company. This will be obtained in accord-
ance with rules and legislation for compa-
nies listed on Nasdaq Copenhagen and in
accordance with Columbus’ Investor Rela-
tions policy. Communication with inter-
ested parties takes place via the ongoing
publication of notifications, investor
presentations and individual meetings.
T
he website www.columbusglobal.com is
the primary source of information for inter-
ested parties. It is updated constantly with
new information about Columbus’ results,
activities and strategy.
A
t the Company’s website, it is possible to
subscribe to Columbus’ e-mail service and
thereby receive company announcements,
financial statements and investor news via
e-mail.
C
olumbus hosts a conference call after
publication of financial statements. The
call and presentations can be followed
directly via the Company’s website.
A
nalyst coverage
The Danish share analysts, Aktieinfo
covers Columbus, and four times a year
they publish a share analysis with recom-
mendations about the Columbus share
based on the Company’s results and fac-
tors that may influence the Company’s
business and future share price develop-
ment.
Contact
The
Interim CEO & Corporate CFO handles the
daily contact with investors and analysts:
Interim CEO &
Corporate CFO,
Hans Henrik Thrane
Email:
hht@columbusglobal.com
Columbus
Lautrupvang 6
2750 Ballerup
Tel: +
45 7020 5000
General Meeting
The Company’s Annual General Meeting
will be held on:
2
7 April 2021 at 10.00 a.m.
on the Company’s address at:
Lautrupvang 6, 2750 Ballerup.
Due to the coronavirus, it will also be possible
to participate
electronically via webcast/confer-
ence call.
43
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Statement by management
on the Annual Report
Ballerup,
16 March 2021
Executive Board
Hans Henrik
Thrane
Interim CEO &
Corporate
CFO
Board of Directors
Ib Kunøe
Chairman
Sven Madsen
Deputy Chairman
Peter Skov Hansen
Karina Kirk Ringsted
44
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Opinion
Basis for opinion
Key audit matters
Independent Auditor’s Reports
45
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
46
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Statement on the management
commentary
Management's responsibilities for the
consolidated financial statements and
the parent financial statements
Auditor's responsibilities for the audit
of the consolidated financial
statements and the parent financial
statements
47
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Copenhagen, 16 March 2021
Deloitte
Statsautoriseret Revisionspartnerselskab
Business Registration No 33 96 35 56
Bill Haudal Pedersen
Eskild Nørregaard Jakobsen
State
-Authorised Public Accountant State-Authorised Public Accountant
MNE no mne30131
MNE no mne11681
48
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Statement of comprehensive income
49
Balance sheet
50
Statement of changes in equity
- Group 51
Statement of changes in equity
– Parent
company
52
Cash flow
53
Notes
54
48
Annual Report 2020
Financial
statements
Financial Statements Corporate Governance Management’s Review Columbus
49
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Group Parent Company
DKK ´000
Note 2020 2019 2020 2019
Net revenue
4 1,654,733 1,761,035 311,922 338,482
External project costs
-350,142 -434,245 -59,652 -74,586
Gross profit
Staff expenses and remuneration
5 -1,061,320 -1,065,749 -230,456 -225,163
Other
external costs -146,883 -176,020 -40,788 -41,220
Other operating income
7 46,567 77,726 93,892 111,812
Other operating costs
-17 -13 0 0
EBITDA before share
-based payment 142,938 162,733 74,918 109,325
Share
-based payment 5 -4,479 -5,470 -4,479 -110
EBITDA
Depreciation, amortization and
impairment
6 -55,415 -144,631 -10,109 -9,682
Operating profit (EBIT)
Results in
subsidiaries 0 0 105,508 -59,002
Financial income
8 955 426 1,444 2,495
Financial expenses
8 -18,166 -11,160 -15,612 -6,993
Profit before tax from continuing operations
Corporate tax
9 -10,622 -20,774 -2,326 -4,964
Profit after tax from continuing operations
Profit after tax from discontinued
operations
28
-6,649 39,866 -38,626 1,155
Profit after tax for the period
Group Parent Company
DKK ´000
Note 2020 2019 2020 2019
Items that may be reclassified subsequently to profit
and loss:
Foreign exchange adjustments of subsidiaries
-5,916 4,139 0 3,853
Other
comprehensive income -5,916 4,139 0 3,853
Total
comprehensive income for the
period
Profit after tax a
llocated to:
Shareholders in Columbus A/S
Minority
interests 70 371
Total comprehensive income allocated to:
Shareholders Columbus A/S
Minority interests
Earnings per share of DKK
1.25 (EPS) 0.44 -0.16
Earnings per share of DKK 1.25, diluted
(EPS
-D) 0.44 -0.16
Statement of comprehensive income
50
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Group Parent Company
DKK ´000
Note 2020 2019 2020 2019
ASSETS
Goodwill
11 776,961 845,774 110,240 110,240
Customer base
11 41,394 50,933 952 6,126
Other intangible assets
11 17,805 10,565 17,783 10,555
Development projects finalized
11 3,397 78,852 1,871 4,161
Development projects in progress
11 940 6,066 0 0
Property, plant and
equipment 12 8,674 12,248 2,019 1,348
Right
-of-use assets 13 87,616 85,927 13,268 12,970
Investments in subsidiaries
14 0 0 862,847 912,668
Deferred tax assets
9 43,390 29,550 2,615 3,361
Other receivables
Total
non-current assets
Trade receivables
15 222,571 307,231 36,350 49,440
Contract assets
16 14,733 28,605 1,638 593
Receivables from subsidiaries
Corporate tax
receivables 9 871 1,360 0 0
Other receivables
Prepayments
Receivables
Cash
Total current assets
Assets classified as held for sale
29 214,481 0 48,114 0
TOTAL ASSETS
Group Parent Company
DKK ´000
Note 2020 2019 2020 2019
EQUITY AND LIABILITIES
Share capital
Reserves on foreign currency translation
-46,269 -40,365 -7,366 -7,366
Reserve to development costs
Retained profit
Group shareholders' equity
Minority interests
Equity
Deferred tax
9 24,493 26,296 0 0
Other provisions
18 21,337 28,635 21,337 7,393
Contingent consideration
18 0 157,850 0 153,368
Debt to credit institutions
Lease liability right
-of-use assets 19 59,929 58,911 9,142 9,337
Non
-current liabilities 281,759 447,692 206,479 346,098
Debt to subsidiaries
Contingent consideration
18 81,594 15,774 81,594 10,838
Contract liabilities
16 19,607 17,727 9,164 2,189
Trade payables
Corporate tax payables
9 10,202 5,127 11 2,946
Other payables
20 300,470 272,367 85,511 48,345
Other provisions
18
Accruals and deferred income
Lease liability right
-of-use assets 19 32,006 32,860 5,169 4,879
Current liabilities
Total liabilities
Total liabilities relating to assets
classified as held for sale
29 93,891 0 6,115 0
TOTAL EQUITY AND LIABILITIES
Balance sheet
51
Annual Report 2020
Financial Statements Corporate Governance Management’s Review Columbus
Shareholders in Columbus A/S
DKK ´000
Share
capital
Reserves
on foreign
currency
translation
Retained
profits
Minority
interests Equity
2020
Balance at 1 January 2020
Profit after tax
Currency adjustments of investments
in subsidiaries
Total comprehensive income
Share
-based payment cf. note 5 0 0 4,479 0 4,479
Balance at 31 December 2020
On 26 January 2021, Columbus completed the divestment of To-Increase. The total net proceeds of EUR
115m/DKK 856m were paid in cash at completion. The sale will impact the corporate equity by approxi-
mately EUR 90m/DKK 671m. The Board of Directors proposes an extraordinary dividend of DKK 6 per
share which will be adopted at the Annual General Meeting 27 April 2021.
Shareholders in Columbus A/S
DKK ´000
Share
capital
Reserves
on foreign
currency
translation
Retained
profits
Minority
interests Equity
2019
Balance at 1 January 2019
IFRS 16 opening adjustment
Balance at 1 January 2019
Profit
after tax 0 0 20,619 371 20,990
Currency adjustments of investments
in subsidiaries
Total comprehensive income
Capital increase
Share
-based payment, cf. note 5 0 0 5,470 0 5,470
Payment of dividend
Balance at 31 December 2019
Accounting policies
Dividend
Proposed dividends are recognized as a liability at the time of approval by the general meeting (time of dec-
laration).
Translation reserve
The translation reserve comprises foreign exchange differences arising from translation of the financial re-
port for entities with a different functional currency than Danish kroner.
Statement of changes in equity - Group
52
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Financial Statements Corporate Governance Management’s Review Columbus
DKK ´000
Share
capital
Reserves
on foreign
currency
translation
Reserve to
develop-
ment costs
Retained
profits Equity
2020
Balance at 1 January 2020
Profit after tax
Total comprehensive income
Share
-based payment cf. note 5 0 0 0 4,479 4,479
Development costs
Balance at 31 December 2020
On 26 January 2021, Columbus completed the divestment of To-Increase. The total net proceeds of EUR
115m/DKK 856m were paid in cash at completion. The sale will impact the Parent equity by approximately
EUR 107m/DKK 794m. The Board of Directors proposes an extraordinary dividend of DKK 6 per share
which will be adopted at the Annual General Meeting 27 April 2021.
DKK ´000
Share
capital
Reserves
on foreign
currency
translation
Reserve to
develop-
ment costs
Retained
profits Equity
2019
Balance at 1 January 2019
IFRS 16 opening adjustment
Balance at 1 January 2019
Profit after tax
Currency
adjustments of investments
in subsidiaries
Total comprehensive income
Capital increase, cf. note 17
Share
-based payment cf. note 5 0 0 0 5,470 5,470
Payment of
dividend 0 0 0 -15,578 -15,578
Development costs
Balance at 31 December 2019
Statement of changes in equity – Parent company
53
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Financial Statements Corporate Governance Management’s Review Columbus
Group Parent Company
DKK ´000
Note 2020 2019 2020 2019
Operating profit (EBIT)
Non
-recurring income and expenses
from acquisitions
-45,766 -76,777 -45,766 -73,287
Depreciation, amortization and
impairment
6 55,415 144,631 10,109 9,682
Cost of incentive scheme
5 4,479 5,470 4,479 5,470
Changes in
net working capital 26 30,485 35,122 -41,988 163,643
Cash flow from primary activities
Interest received, etc.
Interest paid, etc.
-3,776 -7,149 -4,496 -6,483
Corporate tax paid
-6,239 -20,024 -4,516 -2,121
Cash flow from operating activities
discontinued operations
28 72,264 94,815 1,410 5,420
Cash flow from operating activities
Net investment in development projects
Acquisition of tangible assets
-4,248 -5,728 -1,771 -818
Acquisition of intangible assets
-9,430 -5,608 -9,408 -5,608
Disposal of tangible assets
Acquisition of subsidiaries and activities
22 -75,147 -56,090 -38,667 -170,580
Disposals of subsidiaries and activities
-2,696
-6,714
Dividends received from subsidiaries
Cash flow from investing activities
discontinued operations
28 -36,818 -38,917 0 0
Cash flow from
investing activities
-127,830 -106,370 50,411 -162,711
Accounting policies
The cash flow statement is presented using the indirect method based on operating profit.
The cash flow statement shows cash flows for the year, the change in cash, as well as the balance of cash
at the beginning and end of the year.
Cash flow from operating activities
Cash flow from operating activities is calculated as profit before tax adjusted for noncash operating items,
changes in working capital, interests received and paid, and corporation tax paid.
Group Parent Company
DKK ´000
Note 2020 2019 2020 2019
Proceeds from capital increase/warrants
exercised
Overdraft facilities
27 0 -15,764 0 -15,346
Repayment of lease liabilities
27 -38,128 -27,526 -6,005 -5,632
Dividends paid
Cash flow from financing activities
discontinued operations
28 -5,844 -5,834 0 0
Cash flow from financing activities
-43,972 -45,853 -6,005 -17,340
Total net change in cash and cash
equivalents
Cash funds at the beginning of the pe-
riod
Exchange rate adjustments
-2,111 1,432 0 0
Cash funds at the end of the period
Cash flow from investment activities
Cash flows from investment activities comprise payments relating to purchase and divestment of busi-
nesses and activities, purchase and divestment of intangible and other long-term assets as well as pur-
chase and divestment of securities not recognized as cash and dividends received.
Cash flow from acquired companies is included from the date of acquisition, while cash flow from divest-
ments is recognized until the time of sale.
Cash flow from financing activities
Cash flows from financing activities comprise changes in size or composition of share capital and related
costs, proceeds from capital increase/warrants exercised as well as raising and repayment of loans, repay-
ment of interest-bearing debt, repayment of lease liabilities, purchase and divestment of treasury shares
and payment of dividend to shareholders. Inception of leases are treated as non-cash transactions. Cash
flows realigned to financial leases are recognized as payments of interest and repayment of debt.
Cash
Cash comprise cash less any overdraft facilities that are an integral part of cash management. Cash pool
arrangements exist and are recognized as either net asset or liability. Cash flows in currencies other than
the functional currency are translated using average exchange rates unless these deviates significantly
from the transaction date.
Cash flow
54
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Financial Statements Corporate Governance Management’s Review Columbus
Note 1 – Significant accounting principles 55
Note 2 – Significant accounting estimates and assessments 57
Note 3 – Segment data 58
Note 4 – Net revenue 60
Note 5 – Staff expenses and remuneration 62
Note 6 – Depreciation, amortization and impairment 64
Note 7 – Other operating income 64
Note 8 – Financial income and expenses 65
Note 9 – Corporate tax 66
Note 10 – Earnings per share 69
Note 11 – Intangible assets 69
Note 12 – Tangible assets 74
Note 13 – Right-of-use-assets 76
Note 14 – Investments in subsidiaries 79
Note 15 – Trade receivables 80
Note 16 – Contract assets and contract liabilities 81
Note 17 – Share capital 82
Note 18 – Provisions and contingent consideration 83
Note 19 – Lease liability, Right-of-use-assets 85
Note 20 – Other payables 86
Note 21 – Contingent liabilities and commitments for expenditures 86
Note 22 – Business combinations 87
Note 23 – Related parties 89
Note 24 – Fee to the Group's auditor elected by the annual general meeting 90
Note 25 – Financial risks and financial instruments 91
Note 26 – Changes in working capital 96
Note 27 – Cash flow from financing activities 97
Note 28 – Discontinued operations 99
Note 29 – Assets classified as held for sale 100
Note 30 – Board of Directors and Executive Board 101
Note 31 – Shareholder information 101
Note 32 – Events after the reporting period 101
Note 33 – Approval of publication of the Annual Report 101
Key figures, ratios and Alternative Performance Measures 102
Notes
Note
Page
Note
Page
55
Annual Report 2020
Notes
Financial Statements Corporate Governance Management’s Review Columbus
The financial statements for 2020 for Columbus, which include financial statements for the Parent Company
Columbus A/S and consolidated financial statements for the Columbus Group have been prepared in ac-
cordance with the International Financial Reporting Standards (IFRS) as adopted by the EU and Danish
disclosure requirements for annual reports prepared after reporting class D (listed), cf. IFRS Executive
Order issued pursuant to the Financial Statements Act. Columbus is a public limited company seated in
Denmark.
The consolidated and Parent Company’s financial statements are presented in Danish Kroner (DKK), which
is the presentation currency for the Group's activities and the functional currency of the parent.
The consolidated and Parent Company’s financial statements have been prepared based on historical cost.
The main elements of the accounting policies and changes compared to last year due to new and amended
standards are described below. The accounting principles are also disclosed in each of the individual notes
to the financial statements.
In preparing the consolidated and Parent Company’s financial statements, the management makes various
accounting assessments that form the basis of presentation, recognition and measurement of the Parent
Company and the Group’s assets and liabilities. The most significant estimates and assessments are pre-
sented in note 2.
Consolidated financial statements
The consolidated financial statements include Columbus A/S and the companies in which the Group holds
more than 50% of the voting rights, or otherwise has the power to govern the financial and operating poli-
cies for achieving returns or other benefits from its activities.
Principles of consolidation
The consolidated financial statements are prepared based on financial reporting for Columbus A/S and its
subsidiaries. The consolidated financial statements are prepared by combining financial statements uniform
items. The financial reporting that is used for the consolidation is prepared in accordance with the Group's
accounting policies.
On consolidation, intercompany income and expenses, intercompany accounts and dividends, and gains
and losses on transactions between the consolidated companies are eliminated.
In the consolidated financial statements items of subsidiaries are included 100%.
Minority interests
On initial recognition, minority interests are measured at fair value or at their proportionate share of the fair
value of the acquiree’s identifiable assets, liabilities and contingent liabilities. The adopted method is se-
lected for each transaction. Minority interests are subsequently adjusted for their proportionate share of
changes in equity of the subsidiaries. Comprehensive income is allocated to minority interests regardless of
whether the minority interest thus may be negative. Purchase and sale of minority shares in a subsidiary
that does not result in a loss of control are treated in the consolidated financial statements as an equity
transaction, and the difference between the consideration and the carrying amount is allocated to the Par-
ent Company's share of equity.
Gains and losses on divestments or dissolvement of subsidiaries or associates
Gains or losses on divestments or dissolvements of subsidiaries and associates are stated as the differ-
ence between the sales price or settlement price and the fair value of any remaining equity and the book
value of net assets on the time of sale or winding up, including goodwill, less any minority interests. Gains
or losses are recognized in the statement of comprehensive income as well as accumulated foreign cur-
rency translation adjustments previously recognized in other comprehensive income.
Business Units that have been divested of in the financial year or are expected to be divested within the fol-
lowing 12 months, are in the profit and loss classified as discontinued operations, and in the balance sheet
classified as assets and liabilities held for sale. For further description of the accounting principles, please
refer to note 28.
Impairment of tangible and intangible assets as well as investments in subsidiaries
The carrying values of tangible and intangible assets of indefinite useful lives as well as investments in sub-
sidiaries are reviewed at each balance sheet date to determine any indications of impairment. If this is the
case, the asset's recoverable value is determined to identify any need for impairment and the extent
thereof.
If the asset does not generate cash flow independent of other assets, the recoverable amount of the small-
est cash-generating unit to which the asset belongs is determined.
The recoverable amount of an asset is the higher of net selling price and capital value.
For cash-generating units, the impairment is firstly distributed on goodwill, and then any remaining impair-
ment is distributed to other assets in the unit.
Impairment losses are recognized in the statement of comprehensive income. On any subsequent reversal
of impairment losses resulting from changes in the assumptions used to determine the recoverable amount,
the asset and the cash-generating unit’s carrying amount is increased to the adjusted recoverable amount,
however not exceeding the carrying value of the asset or cash-generating excluding impairment. Impair-
ment of goodwill is not reversed.
Deferred tax assets are reviewed annually and recognized only to the extent that it is probable for utilization
within a five-year period.
Note 1
– Significant accounting principles
56
Annual Report 2020
Notes
Financial Statements Corporate Governance Management’s Review Columbus
The effect of new accounting standards
All new and revised standards, which entered into force with effect from fiscal periods beginning at 1 Janu-
ary 2020, and interpretations that are relevant to the Columbus Group are used in preparing the financial
statements. Columbus Group has assessed that the new or amended standards and interpretations have
not had any material impact on Columbus Annual Report 2020.
New standards effective from 2020
IASB has not issued new or amended standards and interpretations which have effect on the consolidated
financial statements for 2020 or onwards.
External project costs
External projects costs include the expenses excluding wages and salaries that are directly incurred to
achieve revenue for the year and include the cost of licenses, subcontractors, etc. External project costs
are recognized as the project progresses and product cost are recognized when incurred.
Other external costs
Other external costs include expenses of premises, sale and distribution, office expenses, etc.
Prepayments
Prepayments recognized under assets include expenses paid concerning subsequent financial years and
are measured at cost.
Deferred income
Deferred income recognized under liabilities comprises payments received concerning income in subse-
quent years measured at cost.
57
Annual Report 2020
Notes
Financial Statements Corporate Governance Management’s Review Columbus
By applying the Group’s accounting principles as described in each of the individual notes to the consoli-
dated financial statements, it is necessary that the management performs judgements, estimates and as-
sumptions about the carrying amounts of assets and liabilities that are not readily apparent from other
sources.
The performed estimates and assumptions are based on historical experience and other factors that man-
agement considers reasonable under the circumstances, but which are inherently uncertain and unpredicta-
ble. The assumptions may be incomplete or inaccurate, and unexpected events or circumstances may oc-
cur. The Company is also subject to risks and uncertainties that may cause actual results to differ from
these estimates. Specific risks for the Columbus Group are described in "Risk Management", cf. page 33
The estimates and underlying assumptions are reviewed regularly. Changes to accounting estimates are
recognized in the accounting period in which the change occurs and in future periods if the change affects
both the period, in which the change occurs and subsequent accounting periods.
Areas
Note
Estimates
Revenue recognition and contract assets and liabilities
4, 16
Deferred tax asset
9
Impairment of goodwill
11
For further description of the applied judgements and estimates, please refer to the specific notes listed
above.
The following judgements and estimates are considered the most significant for the Group.
Estimate of revenue recognition of contracts
The stage of completion, forming the basis for the current recognition of revenue at the Group, uses the
production method of contracts. The stage of completion is determined on the basis of the relationship be-
tween the entity's resources in relation to recent total estimate of resource consumption. The degree of
completion is assessed regularly by the responsible employees and the projects are closely monitored by
management, and further adjustments are made to the stage of completion, etc., if deemed necessary.
When performing this evaluation, all factors concerning the relevant contract are taking into consideration
and assessed appropriately.
Estimate of recoverable amount of goodwill
The determination of impairment of recognized goodwill requires determination of the value of the cash-
generating units to which the goodwill is allocated. Determination of the value requires an estimate of ex-
pected future cash flows of each cash-generating unit and a reasonable discount rate. At 31 December
2020, the carrying value of goodwill is DKK 776,961k. For a detailed description of methods and assump-
tions for impairment of goodwill, see note 11.
Estimate of utilization of deferred tax assets
Deferred tax assets are recognized for all unused tax losses and difference values to the extent it is
deemed likely that within the foreseeable future taxable profits will be realized in which the losses and the
difference values can be utilized. Determining the size of the amount that can be recognized for deferred
tax assets is based on management’s estimate of the likely time and amount of future taxable profits. At 31
December 2020, the carrying value of recognized tax was DKK 43,390k, which is estimated to be realized
in a foreseeable future (5 years or less).
Note 2
– Significant accounting estimates and judgements
58
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Notes
Financial Statements Corporate Governance Management’s Review Columbus
In order to support decisions about allocation of resources and assessment of performance of the seg-
ments, the Group’s internal reporting to the Board of Directors of the Parent Company is based on the fol-
lowing grouping of operating segments:
Strategic business areas
Description
Geographical segment
Consultancy
Sale, implementation and ser-
vices of standard business sys-
tems
Western Europe
North America
Eastern Europe
Management monitors the business primarily based of the geographical segments and the type of service
or products sold.
Information about the Group’s segments is stated below.
Consultancy
DKK ´000
Western
Europe
Eastern
Europe
North
America
HQ and
Elimina-
tions Total
2020
Columbus Software licenses
1,483 2,098 730 -125 4,186
Columbus Software subscriptions
14,724 1,286 5,530 -83 21,457
Columbus Cloud
15,254
1,469
106
-534
16,295
External licenses
50,965 11,454 18,109 -2,324 78,204
External
subscriptions 82,681 18,885 74,447 -157 175,856
External cloud
22,515 2,473 17,855 126 42,969
Services
1,237,238 109,447 136,415 -181,145 1,301,955
Other
13,756 611 970 -1,526 13,811
Total net revenue
1,438,616 147,723 254,162 -185,768 1,654,733
Gross profit
1,030,061 115,573 157,119 1,838 1,304,591
EBITDA
173,356 13,177 11,694 -59,768 138,459
Operating profit (EBIT)
91,561 4,990 185 -13,692 83,044
Profit before tax
84,512 4,825 -443 -23,061 65,833
Profit after tax
77,545 3,913 -735 -25,512 55,211
Segment assets
1,141,580 104,010 176,273 4,521 1,426,384
Segment liabilities
433,527 45,151 36,731 315,960 831,369
Non
-current assets 673,353 57,365 142,368 114,354 987,440
Asset investments
3,944 428 292 10,366 15,030
Depreciation, amortization
and impairment
-37,365 -4,813 -7,550 -5,687 -55,415
Average number of employees
1,296 330 167 54 1,847
In order to be able to estimate the results of the segments and allocate resources between these, the Board
of Directors also monitors the tangible, intangible and financial assets related to each segment.
Note 3
– Segment data
59
Annual Report 2020
Notes
Financial Statements Corporate Governance Management’s Review Columbus
Consultancy
DKK ´000
Western
Europe
Eastern
Europe
North
America
HQ and
Elimina-
tions Total
2019
Columbus Software licenses
4,862 4,183 1,350 -67 10,328
Columbus Software subscriptions
15,218 1,700 5,562 -58 22,422
Columbus cloud
7,470 719 222 -46 8,365
External licenses
44,679 11,712 18,768 -1,385 73,774
External subscriptions
88,763 18,320 88,029 -315 194,797
External cloud
17,337 984 15,377 0 33,698
Services
* 1,241,319 108,887 171,870 -135,954 1,386,122
Other
33,801
1,315
3,496
-7,083
31,529
Total net revenue
1,453,449 147,820 304,674 -144,908 1,761,035
Gross profit
994,200 116,742 194,072 21,776 1,326,790
EBITDA
147,353 14,401 4,819 -9,310 157,263
Operating profit (EBIT)
74,585 5,101 -97,907 30,853 12,632
Profit before tax
74,009 3,692 -101,138 25,335 1,898
Profit after tax
75,227 1,024 -107,900 12,773 -18,876
Segment assets
1,162,723 113,443 195,820 182,531 1,654,517
Segment liabilities
414,326 53,904 50,960 466,847 986,037
Non
-current assets 632,831 58,963 149,626 285,961 1,127,381
Asset investments
12,055
2,069
576
7,440
22,140
Depreciation, amortization and
impairment
-36,176 -5,210 -98,138 -5,107 -144,631
Average number of employees
1,275 327 186 46 1,834
* DKK 69m has been restated from HQ, GDC and Eliminations to Western Europe compared to the annual report 2019.
The net revenue is not affected by the restatement.
In order to be able to estimate the results of the segments and allocate resources between these, the Board
of Directors also monitors the tangible, intangible and financial assets related to each segment.
Revenue and non-current assets distributed in geographic areas
The Group’s revenue from external customers and non-current assets distribution in geographical areas are
specified below. Revenue is distributed according to the country of the entity from where invoicing has
taken place, and the non-current assets are distributed according to location and legal relation.
Net revenue from
external customers Non-current assets
DKK ´000
2020 2019 2020 2019
Denmark
312,324 369,591 168,192 243,519
Norway
175,789 155,512 72,159 57,706
United Kingdom
172,629 190,096 49,108 52,181
USA
253,100 312,962 142,368 149,626
Sweden
595,297 587,535 498,248 395,939
Russia
69,193
74,268
34,894
37,086
The rest of the world
76,401 71,071 22,471 21,876
Non
-current assets classified as held for sale 0 0 0 169,448
Total
1,654,733 1,761,035 987,440 1,127,381
Accounting policies
Segment data
Segment data are prepared in accordance with the Group’s accounting policies and the Group’s internal
management reporting. Segment income, expenses, segment assets, and liabilities include items directly
attributable to a segment and items that can be allocated to the individual segments on a reliable basis.
Assets in the segments comprise assets used directly in segment operations, including intangible and tan-
gible fixed assets, investments in associates, inventories, receivables from sales of goods and services,
other receivables, prepayments and cash.
Liabilities related to the segments comprise of liabilities derived from segment operations, including debts to
suppliers of goods and services, provisions and other payables.
Note 3
– Segment data continued
60
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Notes
Financial Statements Corporate Governance Management’s Review Columbus
Group Parent Company
DKK ´000
2020 2019 2020 2019
Sale of products
Columbus Software licenses
4,186 10,328 654 3,575
Columbus Software subscriptions
21,457 22,422 8,631 8,730
Columbus Cloud
16,295 8,365 6,190 3,471
External licenses
78,204 73,774 13,490 15,364
External subscriptions
175,856 194,797 42,568 47,601
External
cloud 42,969 33,698 10,639 7,033
Total sale of products
338,967 343,384 82,172 85,774
Sale of services
Sales value of finished projects
1,388,026 1,320,247 236,372 243,083
Change in contract assets
-86,071 65,875 -9,444 4,698
Other services
13,811 31,529 2,822 4,927
Total sale of services
1,315,766 1,417,652 229,750 252,708
Total net
revenue 1,654,733 1,761,035 311,922 338,482
Contract assets, beginning of period
132,000 66,125 21,401 16,703
Contract assets, end of period
45,929 132,000 11,957 21,401
Total change in contract assets
-86,071 65,875 -9,444 4,698
Accounting policies
Revenue is recognized upon transfer of control of promised products or services to customers in an amount
that reflects the consideration Columbus expects to receive in exchange for the products or services. Reve-
nue is recognized net of VAT, taxes etc. collected on behalf of third parties and discounts.
Columbus has chosen to apply the practical expedient to not adjust the total consideration over the contract
term for the effect of incremental costs of obtaining a contract. The incremental costs to obtain a contract
are recognized as an expense when incurred if the amortization period of the asset that Columbus other-
wise would have recognized is one year or less.
Columbus has chosen to apply the practical expedient to not adjust the total consideration over the contract
term for the effect of a financing component if the period between the transfer of services to the customer
and the customer’s payment for these services is expected to be one year or less.
Columbus typically enters into contracts that include a combination of software licenses and consulting ser-
vices. These contracts are classified either as multiple element contracts or compound contracts. Multiple
element contracts and compound contracts which include multiple products and services, are generally ca-
pable of being distinct and accounted for as separate performance obligations. Multiple element contracts
are contracts where price and other significant issues in the contract are negotiated independently. In this
group of contracts, each element is recognized individually, so that the sale of software and consulting ser-
vices is recognized separately at their standalone selling prices.
Compound contracts are contracts where price and other essential items are negotiated together and can-
not be disassembled. For these types of contracts products and services are recognized as their relative
estimated standalone prices. The majority of Columbus’ customer base has payment terms between 14
and 30 days from the invoice date. Columbus’ accounting policies for each revenue line are disclosed be-
low.
Each revenue line is subject to the 5-step model which includes:
1. Identification of contract
2. Separation of performance obligations
3. Determining the transaction price
4. Allocation of price to performance obligations
5. Recognition of revenue
Note
4 – Net revenue
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Notes
Financial Statements Corporate Governance Management’s Review Columbus
Columbus Software licenses
Columbus Software licenses are licenses to Columbus’ own developed software where Columbus owns the
software. Columbus software licenses are classified as on-premises software where the customer is
provided with a right to use the software as it exists when made available to the customer. Revenue from
distinct on-premise licenses is recognized at the point in time when the software is made available to the
customer and the right to use the software has commenced.
Columbus Software subscriptions
Columbus Software subscriptions are subscriptions to Columbus’ own developed software. The subscrip-
tions to Columbus Software entitle the customer to receive new versions of the software that Columbus re-
leases. Columbus Software subscriptions are recognized over time on a straight-line basis over the sub-
scription period.
Columbus Cloud
Columbus Cloud is Columbus’ own developed software where Columbus owns the software. Columbus
Cloud is classified as software-as-a-service (SaaS), which allows customers to use hosted software without
taking possession of the software. Columbus Cloud revenue includes two elements related to Columbus
own Software; 1) A right to use, and 2) A right to updates and bugfixes. The right to use is 83% of the con-
tract value and the right to updates and support is 17%. The value of the right to use the software for the
contract period is recognized at the point in time when the software is made available to the customer. The
value of the right to support and bugfixes are recognized over the contract period.
External licenses
External licenses are licenses to third party software where Columbus does not own the software and Co-
lumbus is a reseller of the software. External licenses are classified as on-premises software where the
customer is provided with a right to use the software as it exists when made available to the customer. Rev-
enue from distinct on-premise licenses is recognized upfront at the point in time when the software is made
available to the customer and the right to use the software has commenced.
External subscriptions
External subscriptions are subscriptions to third party software where Columbus does not own the software
and Columbus is a reseller of the software subscriptions. The subscriptions to external software entitle the
customer to receive new versions of the software that the third-party software provider releases. External
subscriptions are recognized at the point in time when the subscription is accepted by the customer as the
performance obligation to Columbus is completed.
External cloud
External cloud is third party software where Columbus does not own the software and Columbus is a re-
seller of the usage to the software. External cloud is classified as software-as-a-service (SaaS), which
allows customers to use hosted software without taking possession of the software. External cloud is recog-
nized upfront at the point in time when the software is made available to the customer and the right to use
the software has commenced as Columbus has fulfilled all its obligations.
Services/other
Professional services and other fees on time and material contracts are recognized over time as production
of each project is carried out. Revenue from fixed price projects is recognized based on the value corre-
sponding to the stage of completion method. Revenue is recognized when total income and expenses of
the projects and completion at the balance sheet date can be measured reliably as Columbus satisfies its
performance obligations and it is probable that the economic benefits including payments will flow to the
Group. Columbus considers this input method to be an appropriate measure of the progress towards com-
plete satisfaction of these performance obligations under IFRS 15.
The timing of revenue recognition often differs from contract payment schedules, resulting in revenue that
has been earned but not billed. These amounts are included in “Contract assets”. Amounts billed in accord-
ance with customer contracts, but not yet earned, are recorded and presented as part of “Contract liabili-
ties”.
Note 4
– Net revenue (continued)
62
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Notes
Financial Statements Corporate Governance Management’s Review Columbus
Group Parent Company
DKK ´000
2020 2019 2020 2019
Staff expenses
Salary and wages
867,501 871,822 220,860 214,792
Other social security costs
152,327 155,112 1,715 1,860
Other staff expenses
41,492 38,815 7,881 8,511
Staff costs before share
-based payment 1,061,320 1,065,749 230,456 225,163
Share
-based payment 4,479 5,470 4,479 110
Staff expenses
1,065,799 1,071,219 234,935 225,273
Average number of employees
1,847 1,834 352 345
The parent company's Executive Board and Board of Directors are remunerated as follows:
DKK ´000
Executive
Board
Board of
Directors
Other
senior
employees
2020
Salary and wages
5,435 473 30,809
Share
-based payment 861 76 612
Severance pay
7,517 0 0
One
-off bonus 4,985 1,000 0
18,798 1,549 31,420
2019
Salary and wages
8,362 675 25,980
Share
-based payment 1,503 174 1,102
9,865 849 27,082
In connection with the CEO's resignation, the Board of Directors determined an allowance of DKK 7,517
thousand for the period September 2020 to end February 2022.
Other senior employees are defined as those employees involved in management of the parent company,
as well as the Managing Directors of the parent company's subsidiaries.
The Executive Board and a number of senior employees in the Parent Company as well as the Group are
subject to special bonuses depending on individually defined performance targets. The arrangements are
unchanged compared to last year.
Defined contribution plans
The Group finances defined contribution plans through continuous premium payments to independent pen-
sion and insurance companies, which are responsible for the pension liabilities. After payment of pension
contribution to defined contribution plans, the Group has no further pension liabilities towards employees or
resigned employees in relation to the future development in interest rates, inflation, mortality, disability etc.
with regards to the amount to be paid to employees at a later time.
Incentive schemes
In December 2017 Columbus established a warrant program for the Board of Directors, senior executives
and other senior employees. The program, which can only be exercised by purchasing the shares in ques-
tion, grants the right to subscribe a number of shares in the parent company at a price agreed in advance.
The vesting period corresponds to the fiscal year with the final grant at 31 December 2020. At the grant
date the market value of the shares was DKK 3,966,643. The exercise periods are scheduled to the first 14
days after publication of the Company’s Annual Report. Warrants not exercised within the last exercise pe-
riod will be lost. The warrant program is contingent on employment in the Company.
In April 2018 Columbus established a warrant program for the senior executives and other senior employ-
ees. The program, which can only be exercised by purchasing the shares in question, grants the right to
subscribe a number of shares in the parent company at a price agreed in advance. The vesting period cor-
responds to the fiscal year with the final grant at 31 December 2020. At the grant date the market value of
the shares was DKK 10,928,988. The exercise periods are scheduled to the first 14 days after publication
of the Company’s Annual Report. Warrants not exercised within the last exercise period will be lost. The
warrant program is contingent on employment in the Company.
Note 5
– Staff expenses and remuneration
63
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Notes
Financial Statements Corporate Governance Management’s Review Columbus
In May 2019 Columbus established a warrant program. The program, which can only be exercised by pur-
chasing the shares in question, grants the right to subscribe a number of shares in the parent company at a
price agreed in advance. The vesting period corresponds to the fiscal year with the final grant at 31 Decem-
ber 2022. At the grant date the market value of the shares was DKK 452.169. The exercise periods are
scheduled to the first 14 days after publication of the Company’s Annual Report. Warrants not exercised
within the last exercise period will be lost. The warrant program is contingent on employment in the Com-
pany.
In February 2020 Columbus established a warrant program for senior executives and other senior employ-
ees. The program, which can only be exercised by purchasing the shares in question, grants the right to
subscribe a number of shares in the parent company at a price agreed in advance. The vesting period cor-
responds to the fiscal year with the final grant at 31 December 2023. At the grant date the market value of
the shares was DKK 4,546,962. The exercise periods are scheduled to the first 14 days after publication of
the Company’s Annual Report. Warrants not exercised within the last exercise period will be lost. The war-
rant program is contingent on employment in the Company.
Changes in the capital in Columbus, distribution of dividend or change of control does not result in any ad-
justment of the number of warrants or the exercise price.
The development in outstanding warrants can be specified as follows:
Number of warrants
Avg. exercise rate
per warrant
2020 2019 2020 2019
Outstanding 1 January
8,340,000 11,535,000 13.22 12.66
Granted during the period
3,105,000 270,000 8.99 12.30
Lost due to termination of employment
-802,500 -630,000 12.13 12.81
Exercised during the period
0 -2,835,000 0.00 6.78
Outstanding end of period
10,642,500 8,340,000 12.07 13.22
Number of warrants which can be exercised
at balance sheet date
5,276,250 2,845,000
Weighted
average contractual life (years) 1.86 2.08
Weighted average exercise rate
13.59 14.56
The incentive scheme is based on Black & Scholes' calculations for the estimated market value at the time
of allocation. The assessment is based on the following assumptions:
Warrants
December 2020
Share price
at grant
date (DKK
per share)
Exercise
price (DKK
per share)
Number of
warrants
end of
period
Esti-
mated
volatility
(%)*
Risk
free
interest
(%)
Esti-
mated
return
rate (%)
Expiry
(num-
ber of
years)
Granted
December 2017
13.15 13.15 2,055,000 22.1% 0.0% 0.0% 0.30
Granted
April 2018 **
12.30 12.30 3,606,250 22.4% 0.0% 0.0% 0.30
Granted
April 2018 **
15.08 15.08 2,011,250 19.2% 0.0% 0.0% 0.30
Granted
February 2020
8.99 8.99 2,970,000 25.4% 0.0% 0.0% 3.30
* The expected volatility is calculated based on the historic volatility during the past year until the grant of the warrant pro-
grams.
** In May 2019 Columbus changed the share price at grant date for the program granted April 2018. The share price at
grant date is changed from 15.08 DKK per share to 12.30 DKK per share. According to regulation the grant share price
for granted shares related to 2018 is not changed as the change is executed in 2019.
Group Parent Company
DKK ´000
2020 2019 2020 2019
Expensed share
-based payment related to
equity instruments
4,479 5,470 4,479 5,470
Note 5
– Staff expenses and remuneration (continued)
64
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Notes
Financial Statements Corporate Governance Management’s Review Columbus
Note 5 – Staff expenses and remuneration (continued)
Accounting policies
Wages and salaries, social security contributions, leave and sick leave, bonuses and non-monetary bene-
fits are recognised in the financial year in which services are rendered by employees of Columbus.
Termination benefits are recognised at the time an agreement between Columbus and the
employee is made and no future service is rendered by the employee in exchange for the benefits.
Share option schemes
Equity-settled share options are measured at fair value at grant date and recognized in the income state-
ment under share-based payment over the period in which the final right of the options vest. The balancing
item is recognized directly in equity.
On initial recognition of share options, the number of options expected to vest at expiry is estimated. Sub-
sequently revised for changes in the estimated number of vested options, so that the total recognition is
based on the actual number of vested options.
The fair value of the options granted is estimated using the Black-Scholes model with the parameters
stated in the Note.
Note 6 – Depreciation, amortization and impairment
Group Parent Company
DKK ´000
2020 2019 2020 2019
Depreciation
39,488 39,087 6,385 6,194
Amortization
15,927 15,543 3,724 3,488
Impairment
0
90,000
0
0
Total depreciation, amortization
and impairment
55,415 144,631 10,109 9,682
In 2019 the impairment is related to an extraordinary write down of goodwill in the US business of DKK
90m.
Note 7 – Other operating income
Group
Parent Company
DKK
´000 2020 2019 2020 2019
Non
-recurring income from acquisitions 45,766 76,029 45,766 73,287
Central cost allocation Columbus Group
0 0 48,126 38,525
Other services
801 1,697 0 0
Total other operating income
46,567 77,726 93,892 111,812
Non-recurring income is related to adjustment of provision of unachieved earn out remuneration to seller
from the acquisition of iStone in earlier years.
Accounting policies
Other operating income and expenses include income and expenses of a secondary nature to the Group’s
primary activities, including adjustments of contingent liabilities related to acquisitions, gains and losses on
disposal of intangible and tangible assets. Gains and losses on disposal of intangible and tangible assets
are calculated as the selling price less selling costs and the carrying amount at the time of sale.
65
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Financial Statements Corporate Governance Management’s Review Columbus
Group Parent Company
DKK ´000
2020 2019 2020 2019
Financial income
Interest income from subsidiaries
0 0 217 2,495
Interest income on bank deposits, etc.
173 337 1,200 0
Other interest income
783 89 27 0
Interest income on financial assets
measured a
t amortised cost in the result 956 426 1,444 2,495
Foreign exchange gains
0 0 0 0
Total financial income
956 426 1,444 2,495
Financial expenses
Interests expense to subsidiaries
0 0 200 119
Interest expense on bank loans
2,478 1,687 2,522 1,691
Interest expense
leases, Right-of-use-assets 3,661 4,072 515 569
Other interest expense
2,754 1,973 2,087 1,970
Interest expense from financial liabilities that
are measured at
amortised cost in the result 8,893 7,732 5,324 4,349
Foreign exchange loss
9,272 3,428 10,288 2,644
Total financial expenses
18,165 11,160 15,612 6,993
Discounted interest expenses of DKK 1,294k which relate to contingent consideration (note 18) are in-
cluded in other interest expenses.
Foreign exchange loss include fair value adjustment of currency forward derivative in 2020 of DKK -2,252k
and in 2019 of DKK 6,548k.
Accounting policies
Transactions in currencies other than the Group's functional currency are translated initially at the transac-
tion date. Receivables and payables and other monetary items denominated in foreign currencies that have
not been settled at the balance sheet date are translated at the closing rate. Gains and losses arising from
the difference between the exchange and the transaction date are recognized in the statement of compre-
hensive income as financial items. Tangible and intangible assets, inventories and other non-monetary as-
sets acquired in foreign currency and measured at historical cost are translated at the transaction date.
Non-monetary items revalued at fair value are translated using the exchange rate at the date of revaluation.
Simple forward contracts are measured at fair value and recognized in other receivables or other payables.
Gain and losses arising from the forward contracts are recognized in the statement of comprehensive in-
come as financial items.
Translation of foreign subsidiaries
On recognition in the consolidated financial statements of foreign subsidiaries with a functional currency
other than Danish kroner (DKK), income statements are translated at average exchange rates for the
months unless these deviates significantly from the actual exchange rates at the transaction dates. In the
latter case, the actual exchange rates are used. Balance sheet items are translated at the closing exchange
rates. Goodwill is considered to belong to the acquired entity and is translated at the closing rate.
Foreign exchange differences arising from the translation of foreign company balance sheet items at the
beginning of the closing exchange rates, and on translation of foreign entities' income statements from av-
erage rates to closing rates are recognized in other comprehensive income. Similarly, exchange differences
arising as a result of changes made directly in the foreign enterprise's equity, are also recognized in other
comprehensive income. Adjustment of receivables or debt to subsidiaries which are considered part of the
Parent Company's overall investment in the subsidiary in question are recognized in other comprehensive
income in the consolidated financial statements, whereas they are recognized in the statement of compre-
hensive income of the Parent Company.
Financial items
Financial items include interest income and expenses, the interest portion of lease payments, gains and
losses on foreign currency transactions and surcharges and allowances under the account tax scheme.
Note 8
– Financial income and expenses
66
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Notes
Financial Statements Corporate Governance Management’s Review Columbus
Group Parent Company
DKK ´000
2020 2019 2020 2019
Tax on
result for the year
Current tax
14,584 19,666 11 2,946
Change in deferred tax
-6,092 408 746 2,098
Withholding tax
1,553 330 1,553 0
Adjustment to previous years
577
370
16
-80
Total tax on result for the year
10,622 20,774 2,326 4,964
Tax on result for the year explained as follows
Calculated 22% on pre
-tax earnings on continuing
operations
14,483 418 32,856 8,181
Tax effect of:
Adjustment to tax concerning previous years
577 -145 16 -80
Adjustment to tax rates in foreign subsidiaries
relative to 22%
-446 1,338 0 0
Non
-capitalized tax value of losses 2,976 18,900 0 0
Withholding tax
1,553 330 1,553 0
Effect of reduced corporate tax rate
0 33 0 0
Not taxable income
-372 -889 -23,066 -3,520
Not taxable expenses
985 5,063 23 17,347
Other temporary differences
-1,372 12,710 0 -55
Other permanent differences
-7,762 -16,984 -9,056 -16,909
Total tax on result for the year
10,622 20,774 2,326 4,964
Effective tax
rate (%) 16.13 56.53 1.53 13.35
Group Parent Company
DKK ´000
2020 2019 2020 2019
Corporate tax payable (net)
Balance at 1 January
3,767 3,236 2,946 1,506
Currency adjustment
65 173 0 0
Adjustment to previous years
-1,901 17 0 0
Current tax for the year
14,584 24,787 11 2,946
Tax paid on account for the year
-3,688 -16,648 -2,946 -1,506
Corporate tax paid during the year
-4,154 -7,797 0 0
Reclassified to assets classified as held for sale
658 0 0 0
Balance at 31 December
9,331 3,767 11 2,946
Corporate tax receivable
-871 -1,360 0 0
Corporate tax payable
10,202 5,127 11 2,946
Balance at 31 December
9,331 3,767 11 2,946
The effective tax rate in 2019 is extraordinarily high as tax assets that relate to the impairment has not been
recognised.
Note 9
– Corporate tax
67
Annual Report 2020
Notes
Financial Statements Corporate Governance Management’s Review Columbus
Group Parent Company
DKK ´000
2020 2019 2020 2019
Deferred tax assets
Balance at 1 January
29,550 28,910 3,361 4,764
Deferred tax assets 1 January
29,550 28,910 3,361 4,764
Currency adjustments
-1,735 352 0 0
Adjustment to previous years
2,227 1,110 0 694
This year's change in
deferred tax 13,348 -822 -746 -2,097
Balance at 31 December
43,390 29,550 2,615 3,361
Deferred tax assets relate to
Intangible assets
1,100 4,357 1,337 1,827
Tangible assets
2,241 2,619 1,130 1,398
Current assets
4,139 5,220 148 136
Loss carry forward
35,910 17,354 0 0
Balance at 31 December
43,390 29,550 2,615 3,361
Based on the management's assessment of future income, short-term tax assets are expected to be DKK
11m and the total tax assets are expected to be utilized within a 5-year period.
Group Parent Company
DKK ´000
2020 2019 2020 2019
Deferred tax liabilities
Balance at 1 January
26,296 25,016 0 0
Deferred tax liabilities 1 January
26,296 25,016 0 0
Currency
adjustment 88 -99 0 0
Adjustment to previous years
8,618 0 0 0
This year's change in deferred tax
5,614 1,379 0 0
Reclassified to assets classified as held for sale
-16,123 0 0 0
Balance 31 December
24,493 26,296 0 0
Deferred tax
liabilities relate to
Intangible assets
21,943 18,801 0 0
Current assets
2,550 7,495 0 0
Balance 31 December
24,493 26,296 0 0
The Group's non-capitalized tax assets amount to DKK 29m (2019: DKK 13m).
Accounting policies
Income tax for the year, comprising current tax and movements in deferred tax, is recognized in the state-
ment of comprehensive income by the portion attributable to the profit and directly in equity or in other com-
prehensive income to the extent that it relates to items recognized directly in equity and in other compre-
hensive income. Exchange adjustments of deferred tax is recognized as part of the adjustment of deferred
tax.
Current tax liabilities and receivables are recognized in the balance sheet as estimated tax on the taxable
income, adjusted for prepaid tax.
When calculating the current tax, the applicable tax rates and rules on the balance sheet date is used.
Note 9
– Corporate tax (continued)
68
Annual Report 2020
Notes
Financial Statements Corporate Governance Management’s Review Columbus
Deferred tax is recognized using the balance sheet liability method on all temporary differences between
accounting and tax values of assets and liabilities, except for deferred taxes on temporary differences aris-
ing on the initial recognition of goodwill or from the initial recognition of a transaction that is not a business
combination, and where the temporary difference identified by the initial recognition affects neither the ac-
counting profit nor the taxable income. Deferred income tax is provided on temporary differences arising on
investments in subsidiaries and associates, unless the parent is able to control when the deferred tax is re-
alized, and it is probable that the deferred tax will not crystalize as current tax in the foreseeable future. De-
ferred tax is calculated based on the planned use of each asset and settlement of each liability.
Deferred tax is measured based on the tax rules and rates in the respective countries, based on enacted or
in reality enacted laws at the balance sheet dates that are expected to apply when the deferred tax is ex-
pected to crystallize as current tax. Changes in deferred tax due to changes in tax rates or rules are recog-
nized in the statement of comprehensive income unless the deferred tax is attributable to transactions pre-
viously recognized directly in equity or in other comprehensive income. In the latter case, the change is also
recognized in equity, respectively, in other comprehensive income.
Deferred tax assets, including the tax value of tax loss carry forwards, are recognized at the value at which
they are expected to be realized, either as net assets to offset against future taxable income or against de-
ferred tax liabilities in the same legal tax entity and jurisdiction. It is assessed at each reporting date
whether it is likely that in the future there will be sufficient taxable profits against which the deferred tax as-
set can be utilized.
The Parent Company and its Danish subsidiaries are part of a mandatory Danish joint taxation with all Dan-
ish companies controlled by Consolidated Holdings A/S. The calculated Danish tax on the joint taxable in-
come is distributed among the jointly taxed companies in proportion to their taxable income (full allocation
with credit for tax losses).
Note 9
– Corporate tax (continued)
69
Annual Report 2020
Notes
Financial Statements Corporate Governance Management’s Review Columbus
Note 10 – Earnings per share
The calculation of earnings per share is based on the following:
Group
DKK ´000
2020 2019
Result for the year from continuing operations
55,211 -18,876
Minority interests' share of the result for the year
-70 -371
Result used for calculating earnings per share,
diluted 55,141 -19,247
Average number of shares listed on NASDAQ Copenhagen (pcs.)
124,622,132
124,013,192
Number of shares used to calculate earnings per share (pcs.)
124,622,132 124,013,192
Average dilutive effect on outstanding subscription rights (pcs.)
0
0
Number of shares used to calculate earnings per share, diluted
(pcs.)
124,622,132 124,013,192
Earnings per share of DKK 1.25 (EPS)
0.44 -0.16
Earnings per share of DKK 1.25, diluted (EPS
-D) 0.44 -0.16
Note 11 – Intangible assets
DKK ´000
Goodwill
Customer
base
Other
intangible
assets
Develop-
ment
projects
finalized
Develop-
ment
projects
in progress
Total
Group 2020
Balance at
1 January 2020
1,011,163
96,552
16,916
241,555
6,066
1,372,252
Currency translation
-12,608 -1,210 -117 -1,092 -14 -15,041
Additions
0 0 9,430 397 955 10,782
Additions relating to
acquisitions
17,048 9,409 0 854 0 27,311
Disposal for the year
0 0 0 -2,389 0 -2,389
Transfer
0 0 0 277 -277 0
Reclassified to assets
held for sale
-81,907 -13,615 0 -202,704 -5,790 -304,016
Balance at
31 December 2020
933,696 91,136 26,229 36,898 940 1,088,899
Amortization at
1 January 2020
165,389 45,620 6,351 162,703 0 380,063
Currency translation
-8,654 -1,156 -117 -951 0 -10,878
Amortization
0 12,265 2,190 1,472 0 15,927
Reversal of
amortization
0 0 0 -529 0 -529
Reclassified to assets
held for sale
0 -6,987 0 -129,194 0 -136,181
Amortization at
31 December 2020
156,735 49,742 8,424 33,501 0 248,402
Carrying amount at
31 December 2020
776,961 41,394 17,805 3,397 940 840,497
Except for goodwill, economic life of all intangible assets is expected to be definitive.
70
Annual Report 2020
Notes
Financial Statements Corporate Governance Management’s Review Columbus
DKK ´000
Goodwill
Customer
base
Other
intangible
assets
Develop-
ment
projects
finalized
Develop-
ment
projects
in progress
Total
Group 2019
Balance at
1 January 2019
1,009,734 96,413 11,279 219,346 11,723 1,348,495
Foreign currency
translation
1,429 139 109 267 200 2,144
Additions
0 0 5,608 1,897 35,530 43,035
Disposal for
the year 0 0 -80 -21,343 0 -21,423
Development projects,
finalized
0 0 0 41,388 -41,388 0
Balance at
31 December 2019
1,011,163 96,552 16,916 241,555 6,066 1,372,252
Amortization at
1 January 2019
75,862 32,063 4,618 151,866 0 264,409
Foreign currency
translation
-473 421 109 245 0 302
Amortization
0 13,136 1,704 28,435 0 43,275
Impairment
90,000 0 0 0 0 90,000
Reversal of
amortization
0 0 -80 -17,844 0 -17,924
Amortization at
31 December 2019
165,389 45,620 6,351 162,703 0 380,063
Carrying amount at 31
December 2019
845,774 50,933 10,565 78,852 6,066 992,190
Except for goodwill, economic life of all intangible assets is expected to be definitive.
Goodwill
The carrying amount of goodwill is distributed on cash-generating units as shown below:
DKK ´000
Country Segment*
31 Decem-
ber 2020
31 Decem-
ber 2019
Columbus A/S
DK VAR 110,240 110,240
ZAO Columbus
RU VAR 30,944 30,944
Columbus US Inc.
US VAR 115,498 126,518
Columbus Norway AS
NO VAR 51,270 37,960
UAB Columbus Lietuva
LT VAR 4,694 4,713
Columbus Global (UK) Ltd.
UK VAR 39,547 42,087
Columbus Eesti AS
EE VAR 10,900 10,944
Columbus CoMakeIt India Pvt Ltd.
IN VAR 4,130 4,130
iStone AB
SE
VAR
409,738
396,332
Total consultancy
776,961 763,868
To
-Increase B.V. NL ISV 0 81,906
Total ISV segment
0 81,906
Total goodwill
776,961 845,774
*VAR = Value Added Reseller, ISV = Independent Software Vendor
The management performs an impairment test of the carrying amount of goodwill, development projects
and other non-current assets at least annually and more frequently if there are indicators of impairment.
The annual impairment test is performed on 31 October 2020.
The recoverable amount of goodwill related to the individual cash generating units are calculated based on
the Discounted Cash Flows method (DCF).
The main changes in the goodwill from 2019 to 2020 relate to addition on goodwill in Columbus Norway AS,
following purchase of Advania Business Solutions in Norway. The total amount of goodwill is further im-
pacted by the classification of CGU’s that is classified as held for sale, including To-Increase B.V. and Co-
lumbus A/S private cloud business.
Note 11
– Intangible assets (continued)
71
Annual Report 2020
Notes
Financial Statements Corporate Governance Management’s Review Columbus
Future cash flows
The recoverable amount of the individual cash-generating units to which the goodwill belongs to, is calcu-
lated based on the calculations of capital value. The most significant uncertainties are connected to the de-
termination of discount rates, growth rates and expected changes in costs in the budget and terminal peri-
ods.
Budget for the individual cash generating units is based on a bottom up process. The key assumptions for
the budget are expected development in efficiency (number of chargeable hours compared to total hours) in
the consultancy business and expected revenue and gross profits from sale of software and general devel-
opment in cost. The budget process takes place in October through November and takes into consideration
the historical performance and current condition and performance of the cash generating unit in terms of
pipeline, order book and current capacity in terms of consultants.
The 3-year projection period is based on individual and balanced assumptions for the three main revenue
streams in Columbus i.e. Consultancy, external software and Columbus Software.
In generating a terminal value, a conservative real growth in revenue and cost of 1% is applied. With re-
gards to staff cost a real growth of 2% is expected in the 3-year interim period and 1% in generating the ter-
minal value.
Columbus is operating in a market where the development has low sensitivity to market development in
general and to the development in general IT spending by companies. The management believes that likely
changes in the key assumptions will not cause the carrying amount of goodwill to exceed the recoverable
amounts. Group management has performed a sensitivity analysis of goodwill impairment tests to show the
headroom between carrying amount and the recoverable amounts. The sensitivity analysis is focusing on
changes in free cash flow in terminal period with 5% and changes in discount rate with 1 percentage point.
The analysis did not identify any indication of impairment.
The US Cash Generating unit was impaired in 2019, as a result of a challenging turnaround process, that
was expected to be delayed due to the spread of the Covid-19 pandemic. Due to global crisis, it was ex-
pected that the turnaround would become a longer journey than initially assumed. As a result, management
decided to write down the goodwill for Columbus US with DKK 90m. During the financial year 2020, the as-
sumption of the longer turnaround has turned out to be correct, and thus the US business has delivered re-
sults lower than the initial budget, but at the expected level, considering the global crisis. The impairment
test shows that the US cash generating unit continues to be a close call, and in case of a drop in cash flow
of 5%, would result in a need for impairment. Due to the challenging situation, the US cash-generating unit
continues to be a focus point for the Group, in order to ensure a successful turnaround.
Discount rate
The determined discount factors reflect the market assessment of the time value of money in the countries
where the cash generating units operate expressed as a risk-free rate and the specific risks associated with
each cash-generating unit. The discount rate is determined on an "after tax" basis on the assessed
Weighted Average Costs of Capital (WACC).
The discount rate used to calculate the present value of expected future cash flow is between 7.1% and
10.1% after tax (2019: 7.1% - 9.1%), representing 7.2% and 10.2% pretax (2019: 7.1% - 9.1%). The reason
for the insignificant difference between after tax and pre-tax discount rates is due to a relatively low debt to
equity ratio and due to the fact that Columbus has significant tax losses carry forwards to offset tax pay-
ments. The discount rate has been determined based on the Capital Asset Pricing Model and comprise a
risk-free interest rate, the market risk premium and a beta factor, covering systematic market risk and a
company premium. The values for the risk-free interest rate, the market risk premium and the beta factor
are determined using external sources. The Group applies the same discount rates for all cash generating
units, as the risk of the individual cash generating units are reflected in their estimated cash flows. How-
ever, to accommodate for higher assessed risk in the future cash flows in US, RU, EE and LT, a 3% higher
discount factor has been applied for these markets.
Most important assumptions for the impairment test
With the applied method for the annual impairment test, the growth rate applied in the terminal value and
the WACC becomes the most important assumptions for the net present value of the future cash flows.
Overall, the impairment based on the above assumptions demonstrates that the present value of the future
cash flows from the cash generating units exceeds the carrying amount of goodwill. The management has
applied conservative growth rates for the projection period and for the period following the projection period
developed for the purpose of the impairment test.
Not
e 11 – Intangible assets (continued)
72
Annual Report 2020
Notes
Financial Statements Corporate Governance Management’s Review Columbus
DKK ´000
Goodwill
Customer
base
Other
intangible
assets
Develop-
ment
projects
finalized
Total
Parent 2020
Balance at 1 January 2020
111,224 18,979 13,755 28,647 172,605
Reclassification of previous years
0 0 1,018 707 1,725
Additions
0 0 9,408 397 9,805
Disposal for the year
0 0 0 -2,389 -2,389
Reclassification to assets held for
sale
0 -10,000 0 0 -10,000
Balance at 31 December 2020
111,224 8,979 24,181 27,362 171,746
Amortization at 1 January 2020
984 12,853 3,200 24,486 41,523
Reclassification of previous years
0 0 1,019 706 1,725
Amortization
0 715 2,179 828 3,722
Reversal of depreciation
0 0 0 -529 -529
Reclassification to assets held for
sale
0 -5,541 0 0 -5,541
Amortization at 31 December 2020
984 8,027 6,398 25,491 40,900
Carrying amount at
31 December 2020
110,240 952 17,783 1,871 130,846
Other intangible assets include development projects for internal use with a net carrying amount of
DKK 17.783k.
DKK ´000
Goodwill
Customer
base
Other
intangible
assets
Develop-
ment
projects
finalized
Total
Parent 2019
Balance at 1 January
2019 111,224 18,979 8,146 26,944 165,293
Additions
0 0 5,609 1,703 7,312
Balance at 31 December 2019
111,224 18,979 13,755 28,647 172,605
Amortization at 1 January 2019
984 10,730 1,505 23,407 36,626
Amortization
0 2,124 1,694 1,079 4,898
Amortization at 31 December 2019
984 12,853 3,200 24,486 41,523
Carrying amount at
31 December 2019
110,240 6,126 10,555 4,161 131,082
Other intangible assets include development projects for internal use with a net carrying amount of
DKK 10.555k.
Note 11
– Intangible assets (continued)
73
Annual Report 2020
Notes
Financial Statements Corporate Governance Management’s Review Columbus
Note 11 – Intangible assets (continued)
Accounting policies
Goodwill
Goodwill is recognized and measured at initial recognition as the difference between the cost and the net
assets of the acquired company. The net assets of the acquired company are based on the fair value of as-
sets and liabilities at the acquisition date. On recognition of goodwill, the goodwill is allocated to each of the
Group’s activities that generate separate cash flows (cash generating units). The determination of cash-
generating units follows the management structure and internal financial management and reporting of the
Group.
Goodwill is not amortized but is tested annually for impairment.
Customer base
Customer base are primarily capitalized to the fair value of the customer base in acquired companies, rec-
ognized during the purchase price allocation. Customer base is amortized over 7 years.
Other intangible assets
Other intangible assets comprise internally developed projects, that is carried out to optimize internal work
flows. These are measured at cost less accumulated amortization and impairment losses.
Other intangible assets are amortized over the expected life. The amortization period is usually 5 years.
Acquired license rights are impaired to the recoverable amount if this is lower than the carrying value.
Development projects
Development projects are projects that are clearly defined and identifiable, where the technical feasibility,
adequate resources and a potential future market or application in the Group can be demonstrated and
where the intention is to produce, promote or use the project. Development projects are recognized as in-
tangible assets if the cost can be measured reliably and there is sufficient assurance that future earnings or
the net selling price will cover production, sales, administration and development costs. Other development
costs are recognized in the statement of comprehensive income as incurred.
Development costs are measured at cost less accumulated depreciation and impairment losses. The cost
includes wages, salaries, services and other costs directly attributable to the Group’s development and
which are necessary to complete the project, from the time when the development project first qualifies for
recognition as an asset.
After completion of the development project, development costs are depreciated on straight-line basis over
the estimated useful life. The depreciation period is usually 3-5 years.
Development projects are reviewed annually to determine whether there are indications of impairment. If
such an indication exists, the asset’s recoverable amount is calculated. If the recoverable amount is lower
than the carrying value, the development projects are impaired to this value. Development projects in pro-
gress are tested at least annually for impairment.
74
Annual Report 2020
Notes
Financial Statements Corporate Governance Management’s Review Columbus
DKK ´
000
Land and
buildings
Leasehold
improve-
ments
Fixtures
and
equipment
Total
Group 2020
Balance at 1 January 2020
95 818 61,636 62,549
Foreign currency translation
-6 -8 -2,138 -2,152
Additions
0
0
4,248
4,248
Additions related to acquisitions
0 0 13 13
Disposals
0 0 -6,441 -6,441
Reclassification of previous years
0 0 -6,852 -6,852
Reclassified to asset held for sale
0 -89 -7,463 -7,552
Balance at 31 December 2020
89 721 43,003 43,813
Depreciation at 1 January 2020
66 749 49,486 50,301
Foreign currency translation
-3 -5 -1,739 -1,747
Depreciation
13 53 5,193 5,259
Reversed depreciation on disposals
0 0 -6,441 -6,441
Reclassification of previous years
0 0 -6,852 -6,852
Reclassified to asset held for sale
0 -85 -5,296 -5,381
Depreciation at 31 December 2020
76 712 34,351 35,139
Carrying amount at 31 December 2020
13 9 8,652 8,674
DKK ´000
Land and
buildings
Leasehold
improve-
ments
Fixtures
and
equipment Total
Group 2019
Balance at 1 January 2019
2,165 861 75,897 78,923
Foreign currency translation
145 1 561 707
Additions
0 9 5,948 5,957
Disposals
-2,238 -53 -13,050 -15,341
Reclassification of previous
years 23 0 -7,720 -7,697
Balance at 31 December 2019
95 818 61,636 62,549
Depreciation at 1 January 2019
144 687 53,902 54,733
Foreign currency translation
12 0 620 632
Depreciation
52 114 6,257 6,423
Reversed depreciation on
disposals -164 -52 -12,946 -13,162
Reclassification of previous years
22 0 1,653 1,675
Depreciation at 31 December 2019
66 749 49,486 50,301
Carrying amount at 31 December 2019
29 69 12,150 12,248
At the beginning of the year leases formerly classified as Financial Leasing, with a net carrying amount of
DKK 9,373k was transferred to Right-of-use-assets due to the implementation of IFRS 16. Please refer to
note 13 Right-of-use-assets.
Note 12
– Tangible assets
75
Annual Report 2020
Notes
Financial Statements Corporate Governance Management’s Review Columbus
DKK ´000
Leasehold
improve-
ments
Fixtures
and
equipment Total
Parent 2020
Balance at 1 January 2020
486 25,471 25,957
Additions
0 1,771 1,771
Balance at 31 December 2020
486 27,242 27,728
Depreciation at 1 January 2020
455 24,153 24,608
Depreciation
27 1,074 1,101
Depreciation at 31 December 2020
482 25,227 25,709
Carrying amount at 31 December 2020
4 2,015 2,019
DKK ´000
Leasehold
improve-
ments
Fixtures
and
equipment Total
Parent 2019
Balance at 1 January 2019
486 24,653 25,139
Additions
0 818 818
Balance at 31 December 2019
486 25,471 25,957
Depreciation at 1 January 2019
377 22,949 23,326
Depreciation
78 1,204 1,282
Depreciation at 31 December 2019
455 24,153 24,608
Carrying amount at 31 December 2019
31 1,318 1,348
Accounting policies
Property plant and equipment
These are measured at cost less accumulated depreciation and impairment losses. Cost comprises the
purchase price and any costs directly attributable to the acquisition until the date the asset is ready for use.
Fixtures and equipment are depreciated over 3 to 5 years, equal to the asset’s estimated useful life. Lease-
hold improvements are amortized over the lease period not exceeding 5 years.
The basis for depreciation is determined taking into account the residual value less impairment losses. The
value is impaired to the recoverable amount if this is lower than the carrying value. The residual value is
determined at the acquisition date and reassessed annually. Depreciation is discontinued if the residual
value exceeds the carrying amount.
In amendment of the depreciation period or the residual value, the effect is recognized prospectively as a
change in accounting estimates.
Note 12
– Tangible assets (continued)
76
Annual Report 2020
Notes
Financial Statements Corporate Governance Management’s Review Columbus
DKK ´000
Other
equipment Cars Offices Total
Group 2020
Balance at 1 January 2020
1,756 25,151 161,328 188,235
Foreign currency translation
112 708 -5,239 -4,419
Re
-assessment of existing assets 366 0 28,614 28,980
Additions
1,684 7,328 10,557 19,569
Additions related to acquisitions
0 0 1,051 1,051
Disposals
-1,604 -5,434 -20,221 -27,259
Reclassified to assets held for sale
-153 -8,790 -4,142 -13,085
Balance at 31 December 2020
2,161 18,963 171,948 193,072
Depreciation at 1 January 2020
1,053 10,493 90,762 102,308
Foreign currency translation
32 123 -2,174 -2,019
Depreciation
656 3,976 29,597 34,229
Reversed depreciation on
disposals -869 -2,739 -16,271 -19,879
Reclassified to assets held for sale
-135 -5,251 -3,797 -9,183
Depreciation at 31 December 2020
737 6,602 98,117 105,456
Carrying amount at 31 December 2020
1,424 12,361 73,831 87,616
Total cash flow for the Group relating to right-of-use-assets is equal to the actual payments on the leases
amounting to DKK 38m.
DKK ´000
Other
equipment Cars Offices Total
Group 2019
Balance at 1 January 2019
(initial recognition) 1,854 29,796 180,006 211,656
Foreign currency translation
-24 37 1,135 1,148
Additions
517 7,631 13,314 21,462
Disposals
-591 -12,313 -33,127 -46,031
Balance at 31 December 2019
1,756 25,151 161,328 188,235
Depreciations at 1 January 2019 (initial
recognition)
1,249 12,899 85,269 99,417
Foreign currency translation
-18 -4 484 462
Depreciation
413 7,378 31,393 39,184
Reversed depreciation on disposals
-591 -9,780 -26,384 -36,755
Depreciation at 31
December 2019 1,053 10,493 90,762 102,308
Carrying amount at 31 December 2019
703 14,658 70,566 85,927
Total cash flow for the Group relating to right-of-use-assets is equal to the actual payments on the leases
amounting to DKK 28m.
Note 13
– Right-of-use-assets
77
Annual Report 2020
Notes
Financial Statements Corporate Governance Management’s Review Columbus
DKK ´000
Other
equipment Cars Offices Total
Parent 2020
Balance at 1
January 2020 139 3,280 34,866 38,285
Re
-assessment of existing assets 70 237 5,110 5,417
Additions
219 157 0 376
Disposals
-273 -539 -2,718 -3,530
Balance at 31 December 2020
155 3,135 37,258 40,548
Depreciation at 1 January 2020
123 1,515 23,677 25,315
Depreciation
55 1,174 4,058 5,287
Reversed depreciation on disposals
-115 -491 -2,716 -3,322
Depreciation at 31 December 2020
63 2,198 25,019 27,280
Carrying amount at 31 December 2020
92 937 12,239 13,268
Total cash flow for the parent company relating to right-of-use-assets is equal to the actual payments on the
leases amounting to DKK 6m.
DKK ´000
Other
equipment Cars Offices Total
Parent 2019
Balance at 1 January 2019
(initial recognition) 139 2,909 34,866 37,914
Additions
0 970 0 970
Disposals
0 -599 0 -599
Balance at 31 December 2019
139 3,280 34,866 38,285
Depreciations at 1 January 2019
(initial recognition)
79 1,142 19,781 21,002
Depreciation
44 972 3,896 4,912
Reversed depreciation on disposals
0 -599 0 -599
Depreciation at 31 December 2019
123 1,515 23,677 25,315
Carrying amount at 31 December 2019
16 1,765 11,189 12,970
Total cash flow for the parent company relating to right-of-use-assets is equal to the actual payments on the
leases amounting to DKK 5.6m.
Accounting policies
Lease assets are classified separately from other assets in the financial statement. The lease assets are
depreciated on a straight-line basis over the lease term. The lease asset can be adjusted due to modifica-
tions to the lease contract or reassessment of lease term.
Columbus’ portfolio of leases include three main groups: Offices, cars and other fixtures.
Lease liabilities are initially measured at the net present value of the fixed lease payments for the use of a
lease asset. If, at inception of the lease, we are reasonably certain about exercising an option to extend a
lease, we will include the lease payments in the option period when calculating the lease liability. We meas-
ure the lease asset to the value of the lease liability at initial recognition with the addition of lease payments
at or before the commencement date of the lease, less any lease incentives received, any initial direct
costs, and an estimate of costs to be incurred upon returning the underlying asset to the lessor.
Note 13
– Right-of-use-assets (continued)
78
Annual Report 2020
Notes
Financial Statements Corporate Governance Management’s Review Columbus
Note 13 – Right-of-use-assets (continued)
Lease liabilities are measured using the incremental borrowing rate, rather than the interest rate implicit in
the leases since these cannot easily be determined in the contracts.
The incremental borrowing rate comprises of three parts:
Reference rate
Financing spread adjustment
Lease specific adjustment
The interest rate used for measuring lease liabilities ranges between 2.81% and 5.81% (2019: 3.71% and
6.71%).
Contracts may contain both lease and non-lease components. We allocate the consideration in a contract
to the lease and non-lease components based on their relative stand-alone prices. We account for non-
lease components in accordance with the accounting policy applicable for such items. Non-lease compo-
nents comprise of services and operating costs etc. Variable lease expenses are recognized in other exter-
nal expenses in the period when the condition triggering those payments occurs.
Interests of lease liabilities are recognized in financial expenses. Each lease payment is separated into re-
payment of the lease liability and payment of interests of the lease liability.
Debt repayments are classified as cash flows from financing activities, and payment of interests are classi-
fied as cash flows from operating activities.
Short-term leases and leases of low-value assets are also recognized as right-of-use-assets.
79
Annual Report 2020
Notes
Financial Statements Corporate Governance Management’s Review Columbus
Parent Company
DKK ´000
2020 2019
Balance at 1 January
1,073,121 962,006
Additions
22 111,115
Disposals
-4,777
0
Reclassified to assets held for sale
-45,066 0
Balance at
31 December 1,023,300 1,073,121
W
rite down at 1 January -160,454 -85,454
Write down
0 -75,000
Amortization and write down at 31 December
-160,454 -160,454
Carrying amount 31 December
862,847 912,668
Additions of investments in subsidiaries in 2020 relates to acquisition of a shelf company related to the pur-
chase of Advania Business Solutions (Norway). Disposals of investment in subsidiaries relates to disposal
of iStone Group entities Columbus China Ltd and Columbus Global Iberia SAL.
Reclassification in 2020 relates to To-Increase, which is as per 31.12.2020 considered as Assets held for
sale.
Additions of investments in subsidiaries in 2019 relate to internal acquisition of iStone Norge AS (Norway),
11 iStone subsidiaries and restatement of intercompany loan and receivables with Columbus US. Write
down in 2019 relates to impairment of Columbus US.
Accounting policies
Investments in subsidiaries in the Parent Company’s financial statement
Investments in subsidiaries are measured in the Parent Company’s financial statements at historical cost. If
the historical cost exceeds the recoverable amount, the costs are impaired to the lower value.
When dividend distributed exceeds the accumulated earnings after the acquisition date this is considered
as an indication of impairment.
If the Parent Company has a legal or constructive obligation to cover a subsidiary’s deficit, a provision is
recognized to the extent that it exceeds amounts owed by the subsidiary.
Gains and losses on disposal of subsidiaries are calculated as the difference between the sale or liquida-
tion amount and the carrying amount at the time of sale less costs to sell. Gains or losses are recognized in
the statement of comprehensive income under "Other operating income" and "Other operating expenses".
Dividends from subsidiaries
Dividends from investments are recognized in the Parent Company’s profit in the accounting period, where
the right for the dividend is earned.
Note 14
– Investments in subsidiaries
80
Annual Report 2020
Notes
Financial Statements Corporate Governance Management’s Review Columbus
Group Parent Company
DKK ´000
2020 2019 2020 2019
Receivables (gross) at 1 January
322,535 327,367 50,060 61,602
Change in receivables during the period
-80,786 -4,832 -13,037 -11,542
Receivables (gross) 31
December 241,749 322,535 37,023 50,060
Provisions for bad debt at 1 January
15,304 11,256 620 578
Change in provisions for bad debt
during the period
3,799 8,341 -169 34
Loss realized during the period
75 -4,293 222 8
Provisions for bad
debt 31 December 19,178 15,304 673 620
Carrying amount 31 December
222,571 307,231 36,350 49,440
Provisions for bad debt are made based on the lifetime expected credit losses in line with the Group’s ac-
counting policies.
Group Parent Company
DKK ´000
2020 2019 2020 2019
Age of receivables (gross):
Not due
167,236 191,826 27,832 34,391
0
-30 days 48,834 85,958 6,369 9,296
30
-60 days 9,827 17,671 1,606 5,271
61
-90 days 2,771 8,927 156 421
91
-180 days 4,508 9,651 807 156
181
-270 days 954 1,414 77 6
270
-360 days 1,874 3,163 23 35
Above 360 days
5,745 3,925 153 484
Total
241,749 322,535 37,023 50,060
Group Parent Company
DKK ´000
2020 2019 2020 2019
Age of impairment:
Not due
2,599 655 28 30
0
-30 days
1,044 430 32 16
30
-60 days 446 442 40 25
61
-90 days 2,008 672 12 15
91
-180 days 4,508 4,603 308 31
181
-270 days 954 1,414 77 2
271
-360 days 1,874 3,163 23 17
Over 360 days
5,745 3,925 153 484
Total
19,178 15,304 673 620
Group Parent Company
DKK ´000
2020 2019 2020 2019
Provision matrix:
Not due
1.6% 0.3% 0.1% 0.1%
0
-30 days 2.1% 0.5% 0.5% 0.2%
30
-60 days 4.5% 2.5% 2.5% 0.5%
61
-90 days 72.5% 7.5% 7.7% 3.6%
91
-180 days 100.0% 47.7% 38.2% 19.9%
181
-270 days 100.0% 100.0% 100.0% 35.3%
271
-360 days 100.0% 100.0% 100.0% 48.0%
Over 360 days
100.0% 100.0% 100.0% 100.0%
N
ote 15 – Trade receivables
81
Annual Report 2020
Notes
Financial Statements Corporate Governance Management’s Review Columbus
Note 15 – Trade receivables (continued)
Accounting policies
Receivables consist of receivables from sales of products and services and other receivables.
Receivables are measured at initial recognition at fair value and subsequently at amortized cost, which usu-
ally corresponds to nominal value less provisions for bad debts.
When assessing impairment for the Group’s receivables the expected credit losses model (ECL) is applied
in accordance with IFRS 9. The ECL model involves a three-stage approach under which financial assets
move through the stages as their credit quality changes. The stages determine how impairment losses are
measured. For trade receivables the Group uses the simplified approach in calculating ECL’s. Therefore,
the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime
ECLs at each reporting date. The Group has established a provision matrix that is based on its historical
credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic envi-
ronment. Provision rates are determined based on grouping of trade receivables sharing the same credit
risk characteristics and days past due.
Loans to subsidiaries in the Parent Company’s financial statement
Impairment losses on loans to subsidiaries will be recognized based on a 12-month ECL model.
Note 16 – Contract assets and contract liabilities
Group Parent Company
DKK ´000
2020 2019 2020 2019
Balance at 1 January
10,877 -5,427 -1,596 -2,302
Changes contract assets during the period
-65,331 65,874 -9,443 4,698
Changes on account billing and prepayments
during the period
47,526 -49,570 3,514 -3,992
Reclassified to assets held for sale
2,054 0 0 0
Balance at 31 December
-4,874 10,877 -7,525 -1,596
Work in progress
45,929 132,000 11,957 21,401
On
account billing and prepayments -50,803 -121,122 -19,483 -22,997
Balance at 31 December
-4,874 10,877 -7,526 -1,596
The net value is included in the balance as follows:
Contract assets
14,733 28,605 1,638 593
Contract
liabilities -19,607 -17,727 -9,164 -2,189
Balance at 31 December
-4,874 10,877 -7,526 -1,596
The Group’s contract assets are subject to significant judgements in relation to the classification of the con-
tract and in terms of how the contract is handled and recognized in the financial statements. When deter-
mining the appropriate recognition of the contract, the Group accounting policies are applied.
The decrease in work in progress and on account billing and prepayments are related to one significant
fixed price projects which has been terminated, as well as the reclassification to assets held for sale.
Of the prepayments as of 31 December 2019 (DKK 17,727, hereof DKK 6,976k from the continued busi-
ness) DKK 6,802k has been recognized as revenue in the reporting period corresponding to 98%.
82
Annual Report 2020
Notes
Financial Statements Corporate Governance Management’s Review Columbus
Note 16 – Contract assets and contract liabilities (continued)
The Group’s total value of contracts relating to "Contract assets" represents DKK 51,946k as of 31 Decem-
ber 2020 (DKK 199,603k as of December 2019). DKK 38,037k of the total contract value is recognized as
revenue as of 31 December 2020 (DKK 115,345k as of 31 December 2019). The remaining DKK 13,909k is
expected to be recognized as revenue within 12-18 months from the balance date (DKK 84,258k as of 31
December 2019). The lower contract values in 2020 compared to 2019 is affected by assets held for sale
and one major contract that was terminated in 2020.
Accounting policies
Contract assets and contract liabilities are measured at the sales value of the work performed less progress
billings and expected losses. Market value is measured based on completion at the balance sheet date and
the total expected income from the contract. The stage of completion is determined as the ratio between
the resources spent and the total estimated resource for the project. For some projects where the con-
sumption of resources cannot be used as a base, the measurement is instead based on the ratio between
completed sub activities and the total project.
When it is probable that total costs will exceed total revenue on a contract work in progress, the expected
loss on the contract is taken immediately as an expense and a provision.
When the outcome of a contract cannot be estimated reliably, the selling price is only recognized at cost, to
the extent that it is probable, they will be recovered.
Contract assets and contract liabilities are recognized in the balance sheet under current assets or liabili-
ties, depending on whether net value of a contract is a receivable or liability.
Costs of sales work and securing contracts are recognized in statement of comprehensive income as in-
curred.
When assessing impairment for the Group’s contract work in progress the simplified approach under the
ECL model is used in line with impairment for the Group’s trade receivables.
Note 17 – Share capital
The share capital consists of 124,622,132 shares of DKK 1.25, corresponding to DKK 155,778k (nom.).
The shares are not divided into classes, and no shares have any special rights. The share capital is fully
paid up.
There has been no capital increase in 2020. In 2019 the Company increased the capital by 2,835,000
shares of DKK 1.25, corresponding to DKK 3,544k (nom.) as a result of exercised warrant programs.
Parent Company
2020 2019
Number of shares at the beginning of the year
124,622,132 121,787,132
Capital
increase 0 2,835,000
Number of shares at 31 December
124,622,132 124,622,132
83
Annual Report 2020
Notes
Financial Statements Corporate Governance Management’s Review Columbus
Group
Parent Company
DKK ´000
2020 2019 2020 2019
Contingent consideration
0 157,850 0 153,368
Other
provisions 21,337 28,635 21,337 7,393
21,337 186,485 21,337 160,761
DKK ´000
Contingent
considera-
tion
Other
provisions
Total
Group 2020
Balance (non
-current) at 1 January 2020 157,850 28,635 186,485
Balance
(current) at 1 January 2020 15,774 26,000 41,774
Foreign currency translation, year
-end exchange rate 505 0 505
Additions during the period
1,294 27,204 28,498
Completion of fixed price project
0 -47,231 -47,231
Changes in forward contract
0 -6,549 -6,549
Paid
earn out during the period -39,847 0 -39,847
Unachieved earn out reversed during the period
-45,766
0
-45,766
Reclassified to assets held for sale
-8,216 0 -8,216
Carrying amount at 31 December 2020
81,594 28,059 109,653
Carrying amount non
-current at 31 December 2020 0 21,337 21,337
Carrying amount current at 31 December 2020
81,594 6,722 88,316
Contingent consideration
Contingent consideration concerns earn outs related to acquisition of enterprises. The development in the
contingent consideration is related to the iStone earn out. The carrying amount 31. December 2020 will be
paid in spring 2021.
Other provisions
Other provisions are primarily related to the completion of a fixed price project. Further, the provision in-
cludes changes in the fair value of a SEK forward contract and retained holiday allowance due to changes
in the danish legislation.
DKK ´000
Contingent
considera-
tion
Other
provisions Total
Group 2019
Balance (non
-current) at 1 January 2019 227,259 12,015 239,274
Balance (current) at 1 January 2019
90,264 12,500 102,764
Foreign currency translation, year
-end exchange rate -4,476 0 -4,476
Additions during the period
0 30,120 30,120
Paid
earn out during the period -62,646 0 -62,646
Unachieved earn out reversed during the period
-76,777 0 -76,777
Carrying amount at 31 December 2019
173,624 54,635 228,259
Carrying amount non
-current at 31 December 2019 157,850 28,635 186,485
Carrying amount current at 31 December 2019
15,774 26,000 41,774
Note 18
– Provisions and contingent consideration
84
Annual Report 2020
Notes
Financial Statements Corporate Governance Management’s Review Columbus
DKK ´000
Contingent
considera-
tion
Other
provisions
Total
Parent 2020
Balance (non
-current) at 1 January 2020 153,368 7,393 160,761
Balance (current) at 1 January 2020
10,838 0 10,838
Foreign currency translation, year
-end exchange rate 505 0 505
Additions during the period
1,294 20,492 21,786
Changes in forward contract
0 -6,548 -6,548
Paid
earn out during the period -38,645 0 -38,645
Unachieved earn out reversed during the period
-45,766 0 -45,766
Carrying
amount at 31 December 2020 81,594 21,337 102,931
Carrying amount non
-current at 31 December 2020 0 21,337 21,337
Carrying amount current at 31 December 2020
81,594 0 81,594
Contingent consideration
Contingent consideration concerns earn outs related to acquisition of enterprises. The development in the
contingent consideration is related to the iStone earn out. The carrying amount 31. December 2020 will be
paid in spring 2021.
Other provisions
Other provisions are primarily related to the completion of a fixed price project. Further, the provision in-
cludes changes in the fair value of a SEK forward contract and retained holiday allowance due to changes
in the danish legislation.
DKK ´000
Contingent
considera-
tion
Other
provisions Total
Parent 2019
Balance (non
-current) at 1 January 2019 214,552 2,472 217,024
Balance (current) at 1 January 2019
81,888 0 81,888
Foreign currency translation, year
-end exchange rate -4,529 0 -4,529
Additions during the period
0 4,921 4,921
Paid
earn out during the period -54,418 0 -54,418
Unachieved earn out reversed during the period
-73,287 0 -73,287
Carrying amount at 31 December 2019
164,205 7,393 171,598
Carrying amount non
-current at 31 December 2019 153,368 7,393 160,761
Carrying amount current at 31 December 2019
10,838 0 10,838
Accounting policies
Provisions
Provisions for liabilities are recognized as a result of events occurring before or at the balance sheet date,
that has a legal or constructive obligation and it is probable that settlement of the obligation will result in an
outflow of economic resources.
Provisions are measured at management's best estimate of the amount required to settle the obligation.
Provisions with an expected maturity more than one year from the balance sheet date are measured at pre-
sent value.
Note 18
– Provisions and contingent consideration (continued)
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DKK ´000
Other
equipment Cars Offices Total
Group 2020
Less than 1 year
572 3,380 28,053 32,005
Between 1 and 5 years
874 9,024 48,358 58,256
More than 5 years
0 0 1,674 1,674
1,446 12,404 78,085 91,935
The Group does not face a significant liquidity risk with regard to its lease liabilities. Lease liabilities are
monitored closely by the management.
DKK ´000
Other
equipment
Cars Offices Total
Group 2019
Less than 1 year
332 5,727 26,801 32,860
Between 1
and 5 years 381 10,075 45,746 56,202
More than 5 years
2 0 2,707 2,709
715 15,802 75,254 91,771
DKK ´000
Other
equipment Cars Offices Total
Parent 2020
Less than 1 year
30 712 4,426 5,169
Between 1 and 5 years
63 242 8,837 9,142
More than 5 years
0 0 0 0
93 954 13,263 14,311
DKK ´000
Other
equipment
Cars Offices Total
Parent 2019
Less than 1 year
16 1,067 3,795 4,879
Between 1 and 5 years
0 727 8,610 9,337
More than 5
years 0 0 0 0
16 1,794 12,405 14,216
Note 19
– Lease liability, Right-of-use-assets
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Note 20 – Other payables
Group Parent Company
DKK ´000
2020 2019 2020 2019
Payroll cost, payroll tax, retirement benefit
obligations etc.
118,402 101,868 45,189 9,555
Holiday pay etc.
61,719 72,515 11,354 30,380
VAT payable
38,391 31,462 2,221 3,750
Other liabilities
81,958 66,522 26,747 4,660
300,470 272,367 85,511 48,345
The carrying amount of other payables matches the fair value of the liabilities.
The holiday pay obligation represents the Group’s obligation to pay salary during employees' holiday in the
following financial year.
The increase in Payroll cost, payroll tax, retirement benefit obligations etc. is primarily due to provisions
made for transaction bonus.
Increase in other liabilities relates to transaction costs in Parent.
Accounting policies
Current liabilities
Current liabilities include bank loans, trade payables and other liabilities to public authorities, etc. Current
liabilities are initially measured at fair value, less any transaction costs. In subsequent periods, current lia-
bilities are measured at amortized cost using the "effective interest method" so that the difference between
the proceeds and the nominal value is recognized in the income statement under financial expenses over
the loan period.
Other liabilities are measured at amortized cost.
Pensions
Contributions to defined contribution plans are recognized in the statement of comprehensive income in the
period to which they relate and any contributions payable are recognized in the balance sheet under other
payables.
Note 21 – Contingent liabilities and commitments for expenditures
Parent Company
Contingent liabilities
The Danish jointly taxed companies are jointly and severally liable for tax on joint taxation income.
The Company and Danish subsidiaries are included in Danish jointly taxation with Consolidated Holdings
A/S as controlling company. Thus, the Company is, in accordance with the Danish Corporation Tax Act, lia-
ble for income tax etc. for the jointly taxed companies and also for potential liabilities, including withholding
tax on interest, royalties and profits for these companies. The total tax liability for the Danish jointly taxation
is presented in the annual report for Consolidated Holdings A/S.
Commitments for expenditures
The Company has guaranteed payment of banking arrangements in Nordea for subsidiaries. As of 31 De-
cember 2020, the maximum liability is DKK 12,646k (2019: DKK 17,986k).
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Acquisition of companies in 2020
The Group has per 6 January 2020 acquired Advania Business Solutions. The acquisition was an asset
purchase.
Name
Primary
activity
Date of
control
gained
Acquired
ownership
Acquired
voting
rights
Total con-
sideration
DKK ’000
Advania Business Solutions
Distribution
and implemen-
tation of
stand-
ardised busi-
ness solutions.
6 January Activity Activity 36,357
Total
36,357
With the acquisition of Advania Business Solutions, Columbus creates a Microsoft Dynamics cloud Power-
house in Norway. After recognition of identifiable assets, liabilities and contingent liabilities at fair value,
goodwill in relation to the acquisition was assessed to DKK 16.8m. Customer base is recognised separate
from goodwill and goodwill therefore relates to knowhow.
Estimated tax deductibility of goodwill for Advania Business Solutions is DKK 16.8m.
Advania Business Solutions has since the acquisition 6 January 2020 had a revenue of DKK 44m and a
result after tax of DKK 11m.
Acquisition of companies in 2019
There have been no acquisitions during 2019.
Opening balances
DKK ´000
Advania
Business
Solutions
Total 2020 Total 2019
Tangible fixed assets
13 13 0
Other intangible assets
10,800 10,800 0
Other receivables
85 85 0
Total non
-current assets 10,898 10,898 0
Trade receivables
14,826 14,826 0
Work in progress
191 191 0
Prepayments
5,315 5,315 0
Total
current assets 20,332 20,332 0
Corporation tax and deferred tax
-2,187 -2,187 0
Deferred income
-3,736 -3,736 0
Accruals
-398 -398 0
Other debt
-5,404
-5,404
0
Total current debt
-11,725 -11,725 0
Net assets acquired
19,505 19,505 0
Goodwill
16,852 16,852 0
Total consideration
36,357 36,357 0
Net working capital not paid
-987 -987 0
Cash consideration on acquisition date
35,370 35,370 0
Contingent consideration payments*
0 39,777 56,090
Net
cash flows on acquisitions 35,370 75,147 56,090
Note 22
– Business combinations
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Financial Statements Corporate Governance Management’s Review Columbus
* Contingent consideration payments in 2020 relate to the acquisitions of iStone AB. (DKK 38,645k) and
BMI (DKK 1,132k). Contingent consideration payments in 2019 relate to the acquisitions of iStone AB (DKK
55,343k) and HÄT Systems (DKK 747k).
Since the acquisition date of Advania Business Solution the other intangible assets have been revalued
with DKK 3m and this has affected the goodwill accordingly.
DKK ´000
Total 2020 Total 2019
Fair value assessment of trade receivables
Trade receivables, gross amount
15,103 0
Trade receivables, not expected to be collected
-277 0
Trade receivables, fair value
14,826 0
Accounting policies
Newly acquired or newly established subsidiaries are consolidated from the date of acquisition or formation.
The acquisition date is the date on which the Columbus Group obtains control of the acquiree. Divested
companies are included in the consolidated financial statements until the date of disposal or winding up.
Disposal is the date when control is actually transferred to third parties.
Acquisition of new companies or activities in which the Group obtains control of the acquisition decision,
acquired business will be accounted for under the purchase method, so that the identified assets, liabilities
and contingent liabilities are measured at fair value at the acquisition date. Identified intangible assets are
recognized separately from goodwill if they are separable or arise from a contractual right and the fair value
can be measured reliably. Non-current assets which are held for sale are measured at fair value less esti-
mated selling costs. Restructuring liabilities are only recognized in the acquisition balance sheet if they rep-
resent a liability to the acquired company. Account is taken for the tax effect of the restatements.
The purchase consideration for a company is the fair value of the consideration paid for the acquired com-
pany. If the final determination is subject to one or more future events, these fair values are recognized at
the acquisition date. Costs directly attributable to the acquisition are recognized directly in the statement of
comprehensive income as incurred.
Positive differences (goodwill) between, on one hand, the purchase price of an acquired company, the
value of non-controlling interests in the acquiree and the fair value of previously held equity interests, and
on the other hand, the fair value of the identifiable assets, liabilities and contingent liabilities is recognized
as goodwill under intangible fixed assets. Goodwill is not amortized but is tested annually for impairment.
The first impairment test is performed before the end of the year of acquisition. Upon acquisition, goodwill is
allocated to the cash-generating units, which subsequently form the basis of the impairment test. The deter-
mination of cash-generating units follows the management structure and internal financial control and re-
porting of the Group. If the carrying amount of an asset exceeds its recoverable amount it is written down to
its recoverable amount.
In case of negative differences (negative goodwill), the calculated fair values, the calculated purchase con-
sideration for the company, the value of non-controlling interests in the acquiree and the fair value of previ-
ously held equity interests is reassessed. If the difference is still negative, the difference is recognized as
income in the statement of comprehensive income.
If at the time of acquisition there is an uncertainty about the identification or measurement of acquired as-
sets, liabilities or contingent liabilities or the determination of the consideration, initial recognition is based
on preliminary fair values. The preliminary calculated amounts can be adjusted, or additional assets or lia-
bilities can be recognized until one year after the purchase date, if new information on conditions that ex-
isted at the acquisition date is obtained, which would have affected the calculation of values at the acquisi-
tion date, had the information been known.
Changes in estimates of contingent consideration are recognized in the statement of comprehensive in-
come.
Note 22
– Business combinations (continued)
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Consolidated Holdings A/S has a controlling interest in the Columbus Group, including Columbus A/S.
Other related parties with significant influence in the Columbus Group are the Company’s Board of Direc-
tors, Executive Board and certain executives and their related parties. Furthermore, related parties are
companies in which the above persons have significant influence.
Related parties with controlling interest
Consolidated Holdings A/S (Fredheimvej 9, 2950 Vedbæk)
Consolidated Holdings A/S owns 46.25% of the shares in Columbus A/S. Consolidated Holdings A/S has a
controlling interest in Columbus A/S, as Consolidated Holdings A/S, through its shareholding and its share-
holder voting agreements, controls the majority (47.49%) of the votes at the annual general meeting. Trans-
actions with the company are made on an arm's length basis. Ib Kunøe is the majority shareholder in Con-
solidated Holdings A/S.
Dividend to Consolidated Holdings A/S is paid on equal principals as with other shareholders. Furthermore,
Consolidated Holdings A/S is in a joint taxation with the Danish entities in the Columbus Group, with Con-
solidated Holdings A/S as management company. In 2020 Columbus paid tax to Consolidated Holdings A/S
for DKK 3.544k (2019: DKK 2.719K)
Related parties with significant influence
ATEA (Lautrupvang 6, 2750 Ballerup)
Consolidated Holdings A/S has significant influence in ATEA, and certain dual roles in the management are
filled by the same persons in ATEA and the Columbus Group. Transactions with the company are made on
an arm's length basis.
Parent
DKK ´000
2020 2019
Net sales
Atea
3,118 4,476
Total
3,118 4,476
Net purchase
Atea
-10,152 -9,267
Total
-10,152 -9,267
Sold to Atea is primarily consultancy and sale of licenses from 3
rd
parties.
Purchase from Atea is primarily office rent as well as purchase of IT equipment.
Parent
DKK ´000
2020 2019
Trade receivables
Atea
744 170
Total
744 170
Trade
payables
Atea
-2,004 -1,885
Total
-2,004 -1,885
Executive Board and Board of Directors
Remuneration of the Executive Board, the Board of Directors and executives appears from note 5.
Note 23
– Related parties
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Note 23 – Related parties (continued)
Subsidiaries
Related parties in Columbus also comprise the subsidiaries in which the Company has controlling interest,
cf. the Group overview.
Trading with subsidiaries was as follows:
Parent Company
DKK ´000
2020 2019
Purchase from
subsidiaries -27,299 -36,467
Sold to subsidiaries
107,443 95,673
Purchases from subsidiaries are primarily consultancy and development hours from Columbus' Global
Delivery Center, and internally developed software for customer sales.
Sold to subsidiaries is primarily service and tools fees, consultancy and development hours, as well as cost
split for the shared service center in Columbus’ Danish and Norwegian companies.
Transactions with subsidiaries are eliminated in the consolidated financial statements in accordance with
applied accounting policies.
Outstanding accounts with subsidiaries
Columbus' outstanding accounts with subsidiaries are shown directly in the balance sheet. Outstanding
accounts are interest-bearing. The interest payment of outstanding accounts is shown in note 8. Payment
terms for regular outstanding accounts are invoiced month + 30 days.
Note 24 – Fee to the Group's auditor elected by the annual general meeting
Group Parent Company
DKK ´000
2020 2019 2020 2019
Auditor elected by the annual general meeting
Statutory audit
1,847 1,344 483 483
Other assurance services
40 0 40 0
Tax and VAT advisory services
27 0 27 0
Other non
-audit services 0 826 0 677
1,914 2,170 550 1,160
Other auditors
Statutory audit
1,351 439 0 0
Other
assurance services 641 0 0 0
Tax and VAT advisory services
287 17 0 0
Other non
-audit services 86 524 0 0
2,365 980 0 0
Total audit fee
4,279 3,150 550 1,160
Other services provided by the auditors elected by the annual general meeting comprise of fee for review of
the Group’s transfer pricing documentation and review of the remuneration report.
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The below maturity analysis is based on undiscounted cash flow, and the method of accounting is equiva-
lent to Columbus' cash flow exposure going forward. The maturity analysis shows a balanced current ratio.
DKK ´000
Less than 1
year
Between
1 and 5
years
More than
5 years
Total
Group 2020
Financial assets
Trade receivables
222,571 0 0 222,571
Contract assets
14,733 0 0 14,733
Corporate tax receivables
871 0 0 871
Other receivables
8,058 0 7,263 15,321
Prepayments
28,498 0 0 28,498
Cash and bank balances
164,213 0 0 164,213
Total financial assets
438,944 0 7,263 446,207
Financial liabilities
Debt to credit institutions
1,415 176,000 0 177,415
Contingent consideration
81,594 0 0 81,594
Contract liabilities
19,607 0 0 19,607
Trade payables
69,210 0 0 69,210
Corporate tax payables
10,202 0 0 10,202
Other payables
300,959 0 0 300,959
Accruals and deferred income
29,799 0 0 29,799
Lease liability right
-of-use assets 34,943 61,287 1,746 97,976
Other provisions
6,722 9,053 12,284 28,059
Total financial liabilities
554,451 246,340 14,030 814,821
Ratio
0.79
0.55
The total financial liabilities are expected to be financed by the positive cash flows from primary activities,
as well as unused lines of credit. Further, part of the short term financial liabilities are not expected to fall
due for payment.
The below table disclose the expected interest payments for credit institutions and for lease liability and
provisions the discounted interest on the debt to represent net present value.
DKK ´000
Less than 1
year
Between
1 and 5
years
More than
5 years
Total
Debt to credit institutions
-1,415 0 0 -1,415
Other payables
-489 0 0 -489
Lease liability right
-of-use assets -2,938 -3,031 -72 -6,041
Liquidity risk management
The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrow-
ing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity pro-
files of financial assets and liabilities. For all the primary financial instruments, the carrying amounts are
equivalent to the fair value.
Note 25
– Financial risks and financial instruments
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DKK ´000
Less than 1
year
Between
1 and 5
years
More than
5 years Total
Group 2019
Financial assets
Trade receivables
307,231 0 0 307,231
Contract assets
28,605 0 0 28,605
Corporate tax
receivables 1,360 0 0 1,360
Other receivables
16,564 0 7,465 24,029
Prepayments
26,113 0 0 26,113
Cash and bank balances
147,264 0 0 147,264
Total financial assets
527,137 0 7,465 534,602
Financial liabilities
Debt to credit
institutions 1,428 177,428 0 178,856
Contingent consideration
15,774 157,850 0 173,624
Contract liabilities
17,727 0 0 17,727
Trade payables
85,618 0 0 85,618
Corporate tax payables
5,127 0 0 5,127
Other payables
272,367 0 0 272,367
Accruals and
deferred income 82,872 0 0 82,872
Lease liability right
-of-use assets 35,348 59,084 2,869 97,301
Other provisions
27,645 29,108 0 56,753
Total financial liabilities
543,906 423,470 2,869 970,245
Ratio
0.97
0.55
The below table disclose the expected interest payments for credit institutions and for provisions the dis-
counted interest on the debt to represent net present value.
DKK ´000
Less than 1
year
Between
1 and 5
years
More than
5 years
Total
Debt to credit institutions
-1,428
-1,428
0
-2,856
Lease liability right
-of-use assets -2,488 -2,882 -160 -5,530
Other provisions
-1,645 -473 0 -2,118
Note 25
– Financial risks and financial instruments (continued)
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DKK ´000
Less than 1
year
Between
1 and 5
years
More than
5 years Total
Parent 2020
Financial assets
Trade receivables
36,350 0 0 36,350
Receivables from subsidiaries
62,460 0 0 62,460
Contract assets
1,638 0 0 1,638
Other receivables
3,568 0 2,997 6,565
Prepayments
8,468 0 0 8,468
Cash and bank balances
60,048 0 0 60,048
Total financial assets
172,532 0 2,997 175,529
Financial liabilities
Debt to credit institutions
1,415 176,000 0 177,415
Contingent
consideration 81,594 0 0 81,594
Debt to subsidiaries
123,721 0 0 123,721
Contract liabilities
9,164 0 0 9,164
Trade payables
20,022 0 0 20,022
Corporate tax payables
11 0 0 11
Other payables
86,000 0 0 86,000
Accruals and deferred income
5,313 0 0 5,313
Lease liability right
-of-use assets 5,553 9,435 0 14,988
Other provisions
0 9,053 12,284 21,337
Total financial liabilities
332,793 194,488 12,284 539,565
Ratio
0.52
0.33
The total financial liabilities are expected to be financed by the positive cash flows from primary activities,
as well as unused lines of credit. Further, part of the short term financial liabilities are not expected to fall
due for payment.
The below table disclose the expected interest payments for credit institutions and for lease liability and
provisions the discounted interest on the debt to represent net present value.
DKK ´000
Less than 1
year
Between
1 and 5
years
More than
5 years
Total
Debt to credit institutions
-1,415
0
0
-1,415
Other
payables -489 0 0 -489
Lease liability right
-of-use assets -384 -293 0 -677
Note 25
– Financial risks and financial instruments (continued)
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DKK ´000
Less than 1
year
Between
1 and 5
years
More than
5 years Total
Parent 2019
Financial assets
Trade receivables
49,440 0 0 49,440
Receivables from subsidiaries
58,018 0 0 58,018
Contract assets
593 0 0 593
Other receivables
534 0 2,368 2,902
Prepayments
4,705 0 0 4,705
Cash and bank balances
34,636 0 0 34,636
Total financial assets
147,926 0 2,368 150,294
Financial liabilities
Debt to credit institutions
1,428 177,428 0 178,856
Contingent consideration
10,838 153,368 0 164,206
Debt to subsidiaries
186,334 0 0 186,334
Contract liabilities
2,189 0 0 2,189
Trade payables
23,221 0 0 23,221
Corporate tax payables
2,946 0 0 2,946
Other payables
48,345 0 0 48,345
Accruals and deferred income
9,929 0 0 9,929
Lease liability right
-of-use assets 5,321 9,751 0 15,072
Other provisions
1,645 7,866 0 9,511
Total financial liabilities
292,196 348,413 0 640,609
Ratio
0.51
0.23
The below table disclose the expected interest payments for credit institutions and for provisions the dis-
counted interest on the debt to represent net present value.
DKK ´000
Less than 1
year
Between
1 and 5
years
More than
5 years
Total
Debt to credit institutions
-1,428
-1,428
0
-2,856
Lease liability right
-of-use assets -442 -414 0 -856
Other provisions
-1,645 -473 0 -2,118
Note 25
– Financial risks and financial instruments (continued)
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Financing facilities
Group
DKK ´000
2020 2019
Cash and bank balances
164,213 147,264
Unused credits
116,757 124,607
280,970 271,871
The Group's cash reserves consist of cash and unused credits.
Foreign exchange rate risk, interest rate risk and use of financial instruments
As a consequence of the operation, investments and financing, the Group is exposed to changes in foreign
exchange rates and interest rates. The Parent Company controls the financial risks in the Group centrally
and coordinates the cash management, including cash generation and excess liquidity. The Group follows
a finance policy approved by the Board of Directors, and operates with a low risk profile, in order to ensure
that foreign exchange rate risks and interest risks only occur in commercial situations. In 2018 Columbus
entered into a forward contract related to future payment to shareholders of iStone AB. This mitigates cur-
rency risks on payment to be made in 2021.
Fluctuations in foreign exchange rates have an effect on the Group's equity, results and revenue. As
approx. 75% of the revenue comes from NOK, SEK, GBP, USD, RUB and INR the Group has performed a
sensitive analysis on the relevant foreign exchange rates. The foreign exchange rate risk for EUR is consid-
ered to be minimal.
Equity exchange rates sensitivity
Group
DKK ´000
2020 2019
Effect
of 10% decrease in USD -9,435 -10,455
Effect
of 10% decrease in GBP -6,279 -5,452
Effect
of 10% decrease in SEK -40,509 -45,254
Effect
of 10% decrease in NOK -3,445 -4,837
Effect
of 10% decrease in RUB -745 -942
Effect
of 10% decrease in INR -1,376 -1,670
Profit after tax exchange rates sensitivity
Group
DKK ´000
2020 2019
Effect of 10% decrease in USD*
130
9,840
Effect
of 10% decrease in GBP -1,427 -1,080
Effect
of 10% decrease in SEK 1,203 3,073
Effect
of 10% decrease in NOK -890 1,771
Effect
of 10% decrease in RUB -254 83
Effect
of 10% decrease in INR -960 -673
*The profit after tax exchange rates sensitivity in USD is extraordinarily high in 2019 due to a write down of goodwill which
has caused a loss for the year in the US business. In 2020 the sensitivity is at a normal level again.
Revenue exchange rates sensitivity
Group
DKK ´000
2020 2019
Effect
of 10% decrease in USD -26,879 -30,402
Effect
of 10% decrease in GBP -17,263 -18,985
Effect
of 10% decrease in SEK -66,650 -64,063
Effect
of 10% decrease in NOK -17,579 -15,551
Effect
of 10% decrease in RUB -6,919 -7,427
Effect
of 10% decrease in INR -40 -170
Note 25
– Financial risks and financial instruments (continued)
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Note 25 – Financial risks and financial instruments (continued)
Interest rates
Fluctuations in interest rates have an effect on the Group's financial instruments. By the end of 2020 an in-
crease in interest rates of half a percentage point would increase the Group's financial liabilities by DKK
880k (2019: DKK 880k). The financial liabilities included in the sensitivity analysis include long-term and
short-term debt to credit institutions.
Credit risks
The Group's credit risks primarily derive from trade receivables. Trade receivables are distributed between
many customers and geographical areas. The Group has established a provision matrix that is based on its
historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the eco-
nomic environment.
The maximum credit risk on the balance sheet date equals the carrying amount.
Optimization of capital structure
The Group management continuously estimates whether the capital structure is in accordance with the in-
terests of the Company and shareholders. The overall goal is to ensure a capital structure which supports
long-term financial growth, and at the same time maximizes the return to the Group's stakeholders through
optimization of the debt and equity balance. The Group's capital structure consists of debt, comprising fi-
nancial liabilities such as bank loans, lease liabilities, corporation tax payable, cash and equity, including
share capital, reserves for foreign exchange adjustments and profit/loss carried forward.
Breach of loan agreements
The Group has neither in the financial year 2020 nor in 2019 failed to perform or defaulted on any loan
agreements.
Parent Company
The Parent Company is not exposed in the same level as the Group to changes in foreign exchange rates
due to very limited operations in other currencies than DKK.
Interest rate risk is considered to be equal to the Group’s level of risk since the Parent Company controls
the financial risks in the Group centrally and coordinates the cash management.
The Parent's credit risks are primarily deriving from trade receivables. Trade receivables are assessed for
impairment based on the ECL model, cf. note 15. The maximum credit risk on the balance date equals the
carrying amount.
Note 26 – Changes in working capital
Group
Parent Company
DKK ´000
2020 2019 2020 2019
Change in receivables and contract assets
84,753 -7,405 -2,075 -2,670
Change in trade payable and liabilities
-17,241 -19,275 -1,775 -1,133
Change in other liabilities
-37,027 61,802 -38,138 167,446
Cash flow from changes in working capital
30,485 35,122 -41,988 163,643
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The table below specify changes in liabilities arising from financing activities, including both cash and non-
cash changes.
Liabilities arising from financing activities are those for which cash flows were, or future cash flow will be,
classified in the cash flow statement as cash flow from financing activities.
DKK ´000
Right-of-
use-assets
liabilities
Long term
borrowings
Total
Group 2020
Balance at 1 January
91,771 176,000 267,771
Cash flow
from continuing operations -38,128 0 -38,128
Cash changes
-38,128 0 -38,128
New leases
19,569 0 19,569
Changes to existing leases
25,261 0 25,261
Foreign exchange movements
-3,552 0 -3,552
Acquisition
1,051 0 1,051
Reclassified to
assets held for sale* -4,037 0 -4,037
Non
-cash changes 38,292 0 38,292
Balance at 31 December
91,935 176,000 267,935
* Includes beginning balances for the entities reclassified to assets held for sale.
DKK ´000
Right-of-
use-assets
liabilities
Short term
lease
liabilities
Short term
borrowings
Long term
lease
liabilities
Long term
borrowings
Total
Group 2019
Balance at 1 January
106,650 2,452 5,042 8,270 176,000 298,414
Cash flow from
continuing operations
-27,526 -2,452 -5,042 -8,270 0 -43,290
Cash flows from
discontinued operations
-5,834 0 0 0 0 -5,834
Cash changes
-33,360 -2,452 -5,042 -8,270 0 -49,124
New leases
18,403 0 0 0 0 18,403
Foreign exchange
movements
78 0 0 0 0 78
Non
-cash changes 18,481 0 0 0 0 18,481
Balance at
31 December
91,771 0 0 0 176,000 267,771
*Includes opening balance effect of DKK 106.7m related to implementation of IFRS 16. Cash flow includes continuing and
discontinued operations.
Note 27
– Cash flow from financing activities
98
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Notes
Financial Statements Corporate Governance Management’s Review Columbus
DKK ´000
Right-of-
use-assets
liabilities
Long term
borrowings
Total
Parent 2020
Balance at 1 January
14,216 176,000 190,216
Cash flows
-6,005 0 -6,005
Cash changes
-6,005 0 -6,005
New leases
6,100 0 6,100
Non
-cash changes 6,100 0 6,100
Balance at 31 December
14,311 176,000 190,311
DKK ´000
Right-of-
use-assets
liabilities
Short term
borrowings
Long term
borrowings Total
Parent 2019
Balance at 1 January
16,786 15,346 176,000 208,132
Cash flows
-5,632 -15,346 0 -20,978
Cash changes
-5,632 -15,346 0 -20,978
New leases
3,062 0 0 3,062
Non
-cash changes 3,062 0 0 3,062
Balance at 31 December
14,216 0 176,000 190,216
*Includes opening balance effect of DKK 17m related to implementation of IFRS 16.
Note 27
– Cash flow from financing activities (continued)
99
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Notes
Financial Statements Corporate Governance Management’s Review Columbus
Group Parent Company
DKK ´000
2020 2019 2020 2019
Net revenue
132,086 170,649 10,477 14,419
External project costs
8,206 -2,862 -6,414 -8,246
Gross profit
140,292 167,787 4,063 6,173
Staff
expenses and remuneration -63,644 -71,162 -3,675 -3,609
Other external costs
-11,311 -16,547 0 0
Other operating income
12 748 0 0
Other operating costs
0 -20 0 0
EBITDA
65,349 80,806 388 2,564
Depreciation, amortization and
impairment -27,728 -34,251 -1,409 -1,409
Operating profit (EBIT)
37,621 46,555 -1,021 1,155
Financial income
43 586 0 0
Financial expenses
-1,256 -303 0 0
Profit before tax from discontinuing operations
36,408 46,838 -1,021 1,155
Corporate tax
-13,555 -6,972 0 0
Profit after tax from discontinuing operations
22,853 39,866 -1,021 1,155
Transaction costs and other costs from
divestment of discontinued operations
-29,502 0 -37,605 0
Profit from
discontinued operations -6,649 39,866 -38,626 1,155
Earnings per share from discontinued operations of
DKK 1.25 (EPS)
-0.05 0.32
Earnings per share from discontinued operations of
DKK 1.25, diluted (EPS
-D)
-0.05 0.32
Discontinued operations in 2020
During 2020 Columbus initiated the process of a sale of our software company To-Increase, which repre-
sent our entire ISV segment. The sale was finalised in January 2021, and the business is therefore reported
as discontinued operations in the profit and loss. Assets and liabilities are reported as assets classified as
held for sale, cf. note 29.
In addition, during 2020 we have closed our Spanish subsidiary and sold our Chinese and consequently
reported this as discontinued operations. Both subsidiaries were part of our consultancy segment.
Finally, our Danish private cloud business was sold in January 2021 and this business is consequently also
classified as discontinued operations and assets and liabilities classified as held for sale, cf. note 29. The
private cloud business was represented in our consultancy segment.
Loss on divestment of discontinued includes transaction cost related to divestment of our ISV To-Increase,
which was sold during January 2021, and thus affects both Parent and Group figures.
Cash flow
Group
Parent Company
DKK ´000
2020 2019 2020 2019
Cash flow from operating activities
72,264 94,815 1,410 5,420
Cash flow from investing activities
-36,818
-38,917
0
0
Cash flow from
financing activities -5,844 -5,834 0 0
Cash flow from discontinued operations
29,602 50,064 1,410 5,420
Accounting policies
Discontinued operations comprise all revenue and expenses and gain and losses for operations either be-
ing held for sale or which have already been disposed of. Discontinued operations are reported separately
from the continued operations in the financial statements. Comparative figures are restated to segregate
the continuing and discontinuing assets, liabilities, income, expenses, and cash flows.
Note 2
8 – Discontinued operations
100
Annual Report 2020
Notes
Financial Statements Corporate Governance Management’s Review Columbus
At 31 December 2020, assets and related liabilities held for sale comprised To-Increase and our Danish
private cloud business.
Group Parent Company
DKK ´000
2020 2019 2020 2019
Goodwill
81,683 0 0 0
Customer base
4,670 0 3,050 0
Development projects finalized
52,350 0 0 0
Development projects in progress
38,899 0 0 0
Property, plant and equipment
1,567 0 0 0
Right-of-use assets
16,086
0
0
0
Investments in subsidiaries
0 0 45,064 0
Trade receivables
15,739 0 0 0
Contract assets
950 0 0 0
Corporate tax receivables
1,050 0 0 0
Other receivables
676 0 0 0
Prepayments
811 0 0 0
Total assets classified as held for sale
214,481 0 48,114 0
Group Parent Company
DKK ´000
2020 2019 2020 2019
Deferred tax
17,181 0 0 0
Other provisions
4,464 0 0 0
Lease liability right
-of-use assets 15,409 0 0 0
Contract liabilities
3,004 0 0 0
Trade payables
3,278 0 2,831 0
Other
payables 13,380 0 637 0
Accruals and deferred income
37,175 0 2,647 0
Total liabilities relating to assets classified as
held for sale
93,891 0 6,115 0
Net assets
120,590 0 41,999 0
Accounting policies
Assets classified as held for sale comprise assets and liabilities, the value of which are highly probable to
be recovered through a sale within 12 months rather than through continued use. Assets and liabilities clas-
sified as held for sale are measured at the carrying amount at the time of classification as 'held for sale' or
at market value less selling costs, whichever is lower. The carrying amount is measured in accordance with
the Group's accounting policies. No depreciation or amortisation is recognized on intangible assets and
property, plant and equipment from the time of classification as 'held for sale'.
Note 2
9 – Assets classified as held for sale
101
Annual Report 2020
Notes
Financial Statements Corporate Governance Management’s Review Columbus
Note 30 – Board of Directors and Executive Board
See section "The Board of Directors and Executive Board” in the Management's Review, page 38.
Note 31 – Shareholder information
See section "Shareholder information" in the Management's Review, page 41.
Note 32 – Events after the reporting period
On 26 January 2021, Columbus completed the divestment of To-Increase. The total net proceeds of EUR
115m/DKK 856m were paid in cash at completion. The sale of To-Increase has impacted the Group equity
by approximately EUR 90m/DKK 671m and the Parent equity by approximately EUR 107m/DKK 794m. The
Board of Directors proposes an extraordinary dividend of DKK 6 per share which will be adopted at the An-
nual General Meeting 27 April 2021. The divestment is mentioned in the Management’s Review, page 22.
There have been no other events since 31 December 2020 which could significantly affect the evaluation of
the Group’s financial position and revenues at 31 December 2020. Earnings in January and February 2021
are in line with the Company’s expectations.
Note 33 – Approval of publication of the Annual Report
On the Board meeting on 16 March 2021 the Board of Directors approved publication of the Annual Report
2020. The Annual Report 2020 will be submitted for approval by the shareholders of Columbus A/S on the
Annual General Meeting on 27 April 2021.
102
Annual Report 2020
Notes
Financial Statements Corporate Governance Management’s Review Columbus
Key figures and ratios
Earnings per share (EPS) and diluted earnings per share (EPS-D) are calculated in accordance with
IAS 33.
Other ratios are calculated in accordance with the Danish Finance Society “Recommendations & Financial
Ratios”. The financial ratios stated are calculated as follows:
EBITDA
-margin
Earnings before interest, tax, depreciations and
amortizations (EBITDA)
Net revenue
Operating margin
Operating profit (EBIT)
Net revenue
Return o
n equity
Result after tax and excl. minority interests
Average equity excl. minority interests
Return on invested capital (ROIC)
EBITA
Average invested capital including goodwill
Equity ratio
Equity excl. minority interests
Total equity and liabilities
Earnings per share (EPS)
Result after tax and excl. minority interests
x f
Average number of shares
Book value per share
(BVPS)
Equity excl. minority interests end of year x 100
x f
Number of shares end of year
Cash flow per share
Cash flow from operations
x f
Average number of diluted shares
Adjustment factor (f)
Theoretical rate
Listed price of stock the day before the subscription
and/or stock right cease
Re
curring Revenue % of total revenue
Recurring revenue
Net revenue
Alternative Performance Measures
Organic Growth and Revenue
Organic Growth and Revenue represents the business excluding the impact of acquisitions and divest-
ments.
The purpose of defining Organic Growth is to show a “like-for-like” comparison with the previous year.
Recurring Revenue
Recurring Revenue includes Columbus Software maintenance, Columbus Cloud revenue, 3rd party mainte-
nance revenue, 3rd party cloud revenue, Columbus Care agreements.
Recurring revenue does not necessarily mean a binding contractual agreement. However recurring revenue
is defined as revenue with a high degree of certainty for renewal >95%.
The purpose of defining Recurring Revenue is to express a level of predictability in the revenue. The higher
degree of Recurring Revenue in pct. of total revenue – the more predictable is the Columbus revenue going
forward.
EBITDA before Share Based Payment
EBITDA before Share Based Payment is Earnings Before Interest Taxes Depreciation, Amortization and
the expense (black Scholes value) from Share Based Payment.
The purpose of excluding Share Based Payment is that this is a non-cash consideration and therefore dif-
ferent characteristics than cash-based considerations. Another purpose is that the IFRS rules for expending
Share Based payments is uneven through the 3-year maturing period Columbus normally exercise.
EBITDA before Share Based Payment will therefore express a more comparable year over year develop-
ment.
Normalized EBITDA
Normalized EBITDA represents the business excluding the impact of one-off items, such as acquisitions,
divestments etc. Details on the normalization is provided in the management review cf. page 10.
Key figures, ratios and Alternative Performance Measures
