Accelerating Change Together
Annual Report
2024
Introduction
3 Who we are
4 Our 2024: Letter to stakeholders
6 Hempel Foundation 2024
highlights
7 Key figures
8 Engaged ownership
9 Ownership purpose and values
10 2024 in Hempel A/S
11 Financial performance
Hempel A/S Group
12 Financial investments
13 Hempel Foundation’s
investment strategy
15 Sustainable investment
policy
16 Philanthropy
17 Philanthropic strategy
19 Philanthropic activities in 2024
23 Achievements within our
focus areas
33 Feedback from partners
34 List of donations in 2024
38 Sustainability statement
39 Statutory statement on
sustainability
40 Our business model
42 Risk
43 Environmental
44 People
45 Human rights
46 Anti-corruption
47 Data ethics
48 Foundation governance
49 Governance structure and
composition
50 Board structure
51 Board committees
52 Operational aspects
of governance
54 Financial performance
55 Consolidated financial results
for the Hempel Foundation Group
57 Hempel Foundation’s financial
results
58 Statements
59 Management’s statement
60 Independent auditor’s report
62 Financial statements
63 Consolidated financial statements
108 Hempel Foundation financial
statements
Contents
Front page: Tendo Anna, a schoolgirl from Luuka
District in Eastern Uganda, reading and studying outdoors.
Photo: Building Tomorrow
←Nyungwe National Park Waterfall, Rwanda.
Photo: Gael Vande Weghe
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 2PhilanthropyIntroduction Engaged ownership
Who we are
The Hempel Foundation is the majority owner
of the Hempel A/S Group, a global coatings
company. The Foundation was established in 1948
by our founder Mr. Jørgen Christian Hempel.
According to the Foundation Charter our primary
purpose is to ensure a strong and stable financial
foundation for Hempel A/S, securing its long-
term development and value creation.
Our secondary purpose is philanthropic. Guided
by the principles outlined in the Foundation
Charter, we strive to make a lasting and sustain-
able impact on some of the world’s most press-
ing challenges.
Our philanthropic strategy focuses on ensuring
quality educa tion for all children, and on sustain-
ing critical ecosystems and restoring biodiversity.
We take a strategic approach to philanthropy,
aiming to drive meaningful change and accelerate
impact by helping organisations scale their im-
pact through both our financial and non-financial
resources.
The Hempel Foundation Group is the
entire group of companies owned by
the Hempel Foundation.
The Hempel A/S Group consists of
Hempel A/S and its subsidiaries.
Ownership structure
Hempel Foundation Group
Hempel Ejendomme A/S Hempel Invest A/S
Hempel A/S Group
Hempel Invest II ApS
Hempel Adm. ApS
Brænderupvænge ApS
Keldskov ApS
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 3PhilanthropyEngaged ownershipIntroduction
Our 2024
Letter to
stakeholders
A transformative and positive year for the
Hempel Foundation Group
2024 marked a pivotal and highly positive year
for the Hempel Foundation Group. The Hempel
Foundation took a significant step toward ensuring
the long-term value creation and accelerated
positive development of the Hempel A/S Group.
At the same time, we laid the foundation for
becoming a philanthropic organization even
more capable of accelerating positive change.
Engaged ownership
In 2024, the Hempel Foundation, in agreement
with the Hempel A/S Board of Directors, invited
CVC Funds to become a minority investor in
Hempel A/S. This decision represents one of the
most significant milestones in the Foundation’s
history, resulting from a thorough and compre-
hensive process. We firmly believe this is the
right path for Hempel A/S.
This partnership will help accelerate Hempel’s
ambitious long-term growth strategy, and we are
confident that the company’s value will grow
significantly over the next five to ten years. This,
in turn, will enhance the dividends received by
the Foundation, further strengthening our ability
to drive impactful philanthropic work.
We look forward to a productive collaboration
in the coming years, leveraging the financial and
professional strengths this partnership brings.
As the Hempel Foundation has transitioned
from being the sole owner to the majority owner,
we have also updated our ownership strategy.
This updated strategy sets clear objectives for
our engaged majority ownership, articulates the
values we aim to promote, and outlines how
we will best ensure our interests in growing the
company in a sustainable way.
↑Amaliegade 8, Copenhagen. The Hempel
Foundation office. Photo: Hempel Foundation
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 4PhilanthropyEngaged ownershipIntroduction
2024 Results in Hempel A/S
In 2024, Hempel A/S had EUR 2,185 million
revenue and delivered the best bottom-line
result to date with an adjusted EBITDA of EUR
392 million.
Financial investments in the Hempel
Foundation and Hempel Invest A/S
We have significantly increased the financial
reserves of the Hempel Foundation and Hempel
Invest A/S, excluding the value of shares in
Hempel A/S. In 2024, we revisited our investment
strategy, maintaining a long-term approach and
adjusting our asset allocation to include a greater
proportion of liquid stocks. This shift aims to
achieve more attractive returns to support higher
grant levels in the future but will naturally at the
same time also bring more volatility into our
returns. However, the strategy and allocation is
still well balanced between risk and reward.
Sustainability remains a core priority for the
whole Hempel Foundation Group, including in
our financial investment activities. We have
extended our sustainable investment policy
with a particular focus on biodiversity.
Our overall financial return from the financial
investments made in the Hempel Foundation and
Hempel Invest A/S for the year was EUR 22
million. We find our overall financial return for the
year to be satisfactory.
Philanthropy
This year, we refined our philanthropic strategy,
sharpening our focus on what we do best:
accelerating positive change together. To increase
our future impact, we expanded our international
partner portfolio, adding 11 new organisations
who demonstrated high potential for growth and
impact at scale, both for children and nature.
Across our existing philanthropic partnerships,
we have achieved strong results. These include
improving education opportunities for 433,000
children in the world's least-developed countries.
and supporting sustainable management and
preservation of critical biodiversity in 3.9 million
hectares of tropical forest.
In a Danish context we are particularly proud of the
significant progress made at Saksfjed Wilder-
ness, one of Denmark’s most ambitious rewilding
initiatives. We warmly invite everyone to visit and
experience this transformative initiative firsthand.
In 2024, we donated EUR 28 million – our highest
annual donation to date. This positive trend is ex-
pected to grow substantially in the coming years.
2025 and beyond
Our focus in the coming years is to ensure that
we meet the ambitious goals for growth and
value creation in Hempel A/S, both financially
and in terms of sustainability.
For our philanthropic work, our strengthened
platform and capacities aim to secure an even
stronger impact within our core focus areas.
There are still millions of children in the world’s
poorest countries who lack basic literacy skills,
a biodiversity crisis that continues to worsen,
and significant work needed in Denmark to both
restore biodiversity and enable more children
to thrive.
A key focus will be creating even more value for
our philanthropic partners and scaling our
rewilding initiatives within Denmark.
Thank you
We would like to extend our sincere gratitude
to all our partners worldwide, who work tirelessly
to create sustainable, positive change for the
children most in need and the important nature
most at risk. We also extend our deepest gratitude
to the management and employees of Hempel
A/S, whose daily work makes all our philanthropic
work possible.
Richard Sand Anders Holm
Chair CEO
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 5PhilanthropyEngaged ownershipIntroduction
Education
The Foundational Learning Action Tracker (FLAT) second
report launched at the UN General Assembly, highlighting
that urgent action is still needed.
FLEX 2024 convened African leaders to accelerate
progress on foundational learning.
Research
30
PhD and postdoc projects at
CoaST continued to advance the
sustainability of coatings.
22
peer-reviewed papers published
in top scientific journals.
Biodiversity
Two conservation landscapes in Rwanda and
Madagascar became financially self-sustainable
through ecotourism and carbon credit initiatives.
On Madagascar we achieved an 89% reduction
in forest fires and a 70% decrease in deforestation
in two of our local landscapes.
Social impact
44
organisations working to improve
children’s well-being supported.
First acceleration partner, Girl
Talk, introduced.
Rewilding
160
Exmoor horses & Galloway cattle
introduced to Saksfjed Wilderness to
restore natural ecosystems.
2,030
species identified through extensive
monitoring and research collaborations.
Education
Hempel Foundation
2024
highlights
Biodiversity
Biodiversity
Rewilding
Denmark and Greenland
Social Initiatives
Coating Technologies
Our focus areas
Key numbers
new international
high-impact partners
added to the portfolio
11
Children reached by end 2024
Number of children supported with
learning interventions since 2010.
Growing philanthropic reach
2020 2021 2022 2023 2024
28
1.2 million
EURm donated –
our highest annual
donation to date.
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 6PhilanthropyEngaged ownershipIntroduction
Key figures
(EUR m) 2024 2023 *
Profit and loss
Revenue 2,185 2,172
EBITDA 391 344
EBITDA, adjusted 392 356
Amortisation, depreciation and impairment, excluding discontinued operations 112 110
Operating profit 279 234
Financial items, net -33 -62
Profit before tax 247 172
Net profit from continuing operations 197 152
Net profit for the year 107 80
Financial position
Total assets 3,236 3,066
Investment in tangible assets 64 72
Foundation equity 1,362 887
Net interest-bearing debt 525 1,005
Cash flow
Total cash flow from operating activities 240 135
Cash flow from acquisitions / divestments of enterprises 4 6
Cash flow from net investments in property, plant and equipment and intangible assets - 93 - 105
Free cash flow -44 36
Donations 28 23
Working capital
Net working capital (NWC) days 76 66
* 2023 was the first year Hempel Foundation Group presented its consolidated financial statement in accordance with IFRS,
therefore one year of comparable figures are presented.
(%) 2024 2023
Ratios
Organic growth - 1.3 14.1
Gross margin 43.4 41.5
EBITDA margin 17.9 15.8
EBITDA margin, adjusted 18.0 16.4
Operating profit margin 12.8 10.8
Return on invested capital ROIC
1
10.4 10.3
Equity ratio 42.1 28.9
Cash conversion 92.3 76.6
Leverage ratio 1.3 2.9
For definitions of financial ratios, see page 107.
1
Including adjustment for hyperinflation
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 7PhilanthropyEngaged ownershipIntroduction
Engaged
ownership
→ Ownership purpose
and values
→ 2024 in Hempel A/S
→ Financial performance
Hempel A/S Group
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 8PhilanthropyIntroduction Engaged ownership
Ownership
purpose and values
The Hempel Foundation is the majority owner
of the Hempel A/S Group, a global coatings
company. According to the Foundation Charter,
the Foundation’s primary purpose is to:
“(...) secure and reinforce the financial
platform for the continued existence and
development of the businesses operated
by Hempel A/S and its affiliates on a
commercially and financially sound basis.”
The Hempel Foundation has been the sole owner
of Hempel A/S since the Foundation was estab-
lished in 1948. In 2024, the Hempel Foundation
invited CVC Funds to become a minority investor
in Hempel A/S to help accelerate Hempel’s am-
bitious long-term growth strategy.
The role of the Foundation, our values
and objectives
The Foundation aims to be an active and engaged
owner, supporting the fulfilment of the following
objective:
To support the development of Hempel A/S
into one of the world’s largest and most
sustainable coatings companies, which,
through its operations and results, contrib-
utes to a more sustainable world.
The Foundation’s role is to set the overall structure
and principles for the company’s long-term devel-
opment and to monitor that this development
aligns with these objectives.
The Foundation promotes the following values
in its ownership:
○ Ambition: The Hempel Foundation is ambi-
tious and supports Hempel A/S in striving to
achieve its full potential.
○ Responsibility: The Hempel Foundation is
committed to acting responsibly and supports
Hempel A/S in doing the same. The Founda-
tion expects Hempel A/S to be accountable
for its decisions and to address mistakes as
quickly as possible.
○ Long-term perspective: The Hempel Foun-
dation will be the controlling owner of Hempel
A/S indefinitely. Therefore, the Foundation
focuses on long-term value creation. For this
reason, the Foundation supports Hempel A/S
in maintaining a strong emphasis on research
and development.
The Foundation prioritizes long-term strategic
initiatives and has limited appetite for high-risk,
short-term measures.
○ Sustainability: The Hempel Foundation
strives to benefit society and contribute to a
more sustainable world. This is achieved
through the Foundation’s philanthropic work
and by supporting Hempel A/S in becoming
a global market leader in sustainability.
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 9PhilanthropyIntroduction Engaged ownership
2024 in Hempel A/S
Hempel A/S’ strategic progress in 2024
The Hempel A/S Group's purpose is to shape a
brighter future with sustainable coating solutions,
and its ‘Double Impact Strategy’ is the path to
achieving this. It guides priorities, investments and
efforts to create value for customers, employees,
owners and society while building an industry-
winning enterprise.
Partnering for greater impact
In 2024, the the Hempel Foundation advanced
the strategic ambitions of Hempel A/S, including
welcoming CVC as a minority investor and
strategic partner. CVC brings complementary
competencies and resources that will support
long-term growth and accelerate the execution
of the ‘Double Impact Strategy’.
Organising for growth
Efficiency and standardisation were key focus
areas in 2024 to ensure a scalable organisation
that supports profitable expansion. Scalability
will give Hempel A/S a more harmonised global
setup, with smarter use of resources. This will
allow the company to grow while increasing
profitability.
To reinforce innovation and meet evolving cus-
tomer needs, Hempel A/S established a new
Technology function, integrating R&D, Procure-
ment and Sustainability.
This strengthens the link between sustainability
and product development, accelerating the
development of differentiating solutions and
enhancing customer experiences.
Strengthening market position
Hempel A/S sharpened its Decorative business
in 2024 by divesting two private-label brands,
J.W. Ostendorf and Renaulac, focusing instead
on the full-service Decorative brands Hempel,
Crown Paints, Wattyl and Farrow & Ball.
Innovation remained a priority, with the launch
of Hempaguard Ultima, a high-performance
silicone coating supporting sustainability in the
maritime industry, and Avantguard 750 Pro,
designed for infrastructure projects in corrosive
environments. Additionally, Farrow & Ball intro-
duced Purnon Papers, a new wallpaper collec-
tion for the Decorative segment.
Double Impact Strategy
builds on four strategic
levers:
○ Segment leadership
○ Sustainability leader
○ Scalable operations
○ Trusted partner
And three enablers:
○ Innovation
○ Digitalisation
○ People
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 10PhilanthropyIntroduction Engaged ownership
Financial performance
Hempel A/S Group
Revenue and organic growth
Total revenue in 2024 reached EUR 2,185 million
which constitutes an increase of EUR 15 million.
When viewing performance by segment, the
highlights are as follows.
The Decorative segment achieved 2.4% organic
growth, with revenue amounting to EUR 653
million. This growth was driven by both the mid-
and premium-market businesses.
The Marine segment saw negative organic
growth of 5.8%, reporting revenue for the year
of EUR 709 million. The decline in Marine sales
was driven by a number of factors, including price
adjustments and the postponement of vessel
dockings, primarily related to the Red Sea crisis.
The Energy & Infrastructure segment delivered
organic growth of 0.1%, ending the year with
revenue of EUR 823 million. This consistent result
was achieved despite macroeconomic challenges,
thanks to volume expansion in key strategic
areas, including passive fire protection (PFP)
and oil and gas.
Gross profit and margin
Gross profit increased by 5% in 2024, ending the
year at EUR 948 million. The gross profit margin
increased by 1.8 percentage points, ending the
year at 43.4%.
The positive trend in both gross profit and margin
is attributed to increased demand for high-value
proposition products, an optimised global pro-
duction and warehousing footprint and a decline
in raw material costs as well as improved sourcing
benefits.
EBITDA result and margin
EBITDA and EBITDA margin saw significant
improvements in 2024, reaching EUR 392 million
and 17.9% respectively. This was achieved despite
an overall market headwind, leading to a decline
in organic growth, being offset by improvements
in gross margin and robust cost management
discipline.
Net profit and tax
Net profit for 2024 from continuing business
amounted to EUR 170 million, up from EUR 122
million in 2023.
Net profit for 2024, when including the discon-
tinuing business, constituted EUR 80 million, up
from EUR 50 million in 2023.
Tax for 2024 amounted to EUR 50 million com-
pared to EUR 20 million in 2023, resulting in an
effective tax rate of 22.7% in 2024.
Free cash flow, debt leverage and dividends
Free cash flow amounted to EUR 139 million in
2024, up from EUR 29 million in 2023. This im-
provement was driven by the positive develop-
ment in operating profit as well as lower impact
from increases in net working capital in 2024
compared to 2023.
The leverage ratio improved significantly to
1.3× in December 2024, compared to 2.9× in
December 2023. Finally, the Hempel A/S Group
distributed dividends to Hempel Invest A/S
amounting to EUR 157 million, of which EUR
132 million were distributed as an extraordinary
dividend.
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 11PhilanthropyIntroduction Engaged ownership
Hempel Foundation’s
investment strategy
The Hempel Foundation’s Board of Directors
has set down overall guidelines and policies for
capital allocation and investments in different
types of assets: financial investments, properties,
alternative investments and impact investments.
The Investment Committee prepares decisions
on the Foundation’s investment activities; how-
ever, the Board as a whole makes the final decision
regarding investments and investment activities.
Investment decisions are governed by a financial
investment strategy which is reviewed annually
by the Investment Committee and approved
by the Board. This investment strategy is aligned
with the purpose outlined in the Foundation
Charter.
The main objective of the investment strategy is
to secure long-term value creation in accordance
with the risk appetite defined by the Board of
Directors. Return on investments is monitored by
the Investment Committee on an ongoing basis
and reviewed by the Board of Directors.
The Hempel Foundation is invested for the long-
term and the overall return is assessed in the
perspective of a longer time horizon. The target
allocation of the investment portfolio (excluding
the Hempel A/S Group) is exemplified to the right.
The Hempel Foundation keeps the majority of
assets invested in liquid assets. This is a central
component in our investment strategy, which
is set to govern the free investment portfolio, ex-
cluding Hempel A/S shares. This investment
strategy has transitioned into recommending a
higher degree of shares, with the Foundation
accepting an increased level of annual fluctuations.
The underlying purpose of the investment strategy
is to increase the value of the assets in order to
increase the donations to philanthropic work.
Target allocation
Shares
50%
Bonds
15%
Alternative investments
8%
Real estate
25%
Cash equivalent
2%
Hempel Foundation Annual Report 2024
Sustainability statement Foundation governance Financial performance Statements Financial statements 13PhilanthropyIntroduction Engaged ownership Financial investments
Financial investments
Financial investments in shares, bonds etc., are
managed by external professional portfolio
managers. Portfolio management is split between
several managers to increase the risk-adjusted
net return of the total portfolio.
The majority of investments are in listed securi-
ties that can be redeemed within a few days.
According to the annual wheel, the Investment
Committee must conduct an annual review
of the performance of the portfolio managers.
This decision reflects our proactive approach to
portfolio management and our unwavering com-
mitment to achieving the best possible outcomes
for our investments. Following a part change in
the elected fund managers in 2023, no changes
to fund managers were implemented in 2024.
Property investments
The Hempel Foundation's real estate invest-
ments are placed in Hempel Ejendomme A/S.
Hempel Ejendomme A/S owns the property
located in central Copenhagen where the Hempel
Foundation has its office. Hempel Ejendomme
A/S also owns the properties housing the Hempel
A/S headquarters and main R&D departments
in Kgs. Lyngby, Denmark.
Through Hempel Ejendomme A/S we have made
major investments to expand the properties in
Lyngby and have an adjacent land plot for poten-
tial further expansions.
Hempel Invest A/S, another 100%-owned
subsidiary of the Hempel Foundation, holds
ownership of two forests located in Denmark and
shareholdings in a listed real estate property
company.
The headquarter building of the Hempel Foun-
dation, Amaliegade 8, was built in 1785-88.
Amaliegade 8 was acquired by J.C. Hempel in
1933 and was the headquarters for the Hempel
companies before they relocated to Kgs. Lyngby,
north of Copenhagen, in 1972. The Hempel
Foundation has remained in Amaliegade 8 and
today it has offices and meeting rooms in the
building.
Alternative and impact investments
Investments in shareholdings, private equity, and
alternative investments make up only a smaller
part of total investments. These investments of a
more illiquid nature, generally have a longer invest-
ment period. Alternatives include private equity
investments, typically through fund-of-funds
structures, or as impactful investments and impact
investments (mission related investments).
The Hempel Foundation has made these invest-
ments through its fully owned subsidiary Hempel
Invest II. See our policy concerning sustainable
investments on our website ↗
Our commitment to preserving our heritage
is exemplified in the recent renovation of
Amaliegade 8.
Undertaken with the utmost respect for
the property’s historical significance, this
project has transformed the space into con-
tem porary office premises with uncompro-
mised historical tradition. The renovation
of Amaliegade 8 was completed in 2024
and is a testament to our dedication to
blending tradition with modernity, ensuring
our prop erties meet the evolving needs
of today’s businesses.
Hempel Foundation Annual Report 2024
Sustainability statement Foundation governance Financial performance Statements Financial statements 14PhilanthropyIntroduction Engaged ownership Financial investments
Sustainable investment policy
The Hempel Foundation’s approach to sustainable
investments is based on the Foundation’s core
values. Hempel Foundation and Hempel Invest
A/S aim to act responsibly in everything we do,
and we are dedicated to making a difference.
This focus must be reflected in all our investments.
The purpose of the guidelines is to ensure that
our investments contribute to sustainable and
responsible development, as well as a high degree
of social responsibility. We believe that the best
possible long-term returns go hand in hand with
respect for the environment and society.
Further, all asset managers with whom the Hempel
Foundation collaborates must be PRI signatories.
Additionally, the funds in which the Foundation
invests must either apply ESG integration (the in-
corporation of ESG factors that significantly affect
investment risk and return) or focus on impact
investments.
As a foundation, it is our duty to exert our influ-
ence, and we also aim to contribute to ensuring
that companies in our investment portfolio move
in a more responsible direction overall.
We do this by exercising active ownership through
voting at general meetings and ongoing dialogue
with companies. The Foundation delegates active
ownership to the asset managers, as all invest-
ments are made externally.
We expect external managers to both cast votes
and engage in ongoing dialogue with companies
to ensure they develop in a sustainable direction
as much as possible.
Regarding tax
The Hempel Foundation Group and all of its sub-
sidiaries, including the Hempel A/S Group, do
not wish to contribute to aggressive tax planning
through our investments. For investments in
publicly traded companies through our managers,
investments are screened for fair tax practices,
including adherence to the OECD’s tax principles
for multinational companies (BEPS).
Regarding biodiversity
Biodiversity is one of the Hempel Foundation’s
philanthropic core focus areas. By this, we want
our investment portfolio to reflect biodiversity.
However, biodiversity is a relatively new area of
focus for investments and is therefore not as
mature as, for example, climate-related invest-
ments. Thus, we have developed a separate
policy for this area.
We work on three levels:
○ Step 1: Avoid negative effects on biodiversity.
This is done through the list of exclusions
mentioned in the Foundation’s exclusion list.
○ Step 2: Minimise the negative impact on
biodiversity by prioritising companies working
actively to achieve this. Some companies are
exposed to biodiversity-sensitive areas through
their activities and value chains.
It is expected that the asset managers can
document how companies with activities
in biodiversity-sensitive areas mitigate
the risks of negatively affecting biodiversity.
If it is not possible, it is expected that the
asset managers will engage these companies
on the matter.
○ Step 3: Restore the affected ecosystem.
This recovery can, among other things, happen
through investments in restoration, nature-
based solutions, regenerative agriculture, re-
planting or programmes that increase eco-
system resilience.
We currently have two impact investments that
have a target of restoring ecosystem.
“ The Hempel Foundation’s
approach to sustainable
investments is based
on the Foundation’s core
values.”
Hempel Foundation Annual Report 2024
Sustainability statement Foundation governance Financial performance Statements Financial statements 15PhilanthropyIntroduction Engaged ownership Financial investments
→ Philanthropic strategy
→ Philanthropic activities
in 2024
→ Achievements within
our focus areas
→ Feedback from partners
→ List of donations
Philanthropy
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 16Introduction Engaged ownership Philanthropy
Philanthropic
strategy
We are privileged to be able to spend most of
the dividends from our ownership of the Hempel
A/S Group, as well as earnings from our own
financial investments, on children’s education,
biodiversity, and rewilding – both internationally
and in Denmark. But with this privilege, comes
with great responsibility. A responsibility we are
committed to honouring through hard work
and dedication to achieve the greatest impact
possible.
Internationally, we focus on improving children’s
foundational learning in least-developed coun-
tries, sustaining biodiversity in key tropical eco-
systems, and development of sustainable
coating solutions. In Denmark, we work to accel-
erate rewilding efforts to restore biodiversity and
strengthen natural ecosystems. Additionally,
we support initiatives in Denmark and Greenland
that help children and young people in vulnerable
situations build resilience and actively engage in
their communities.
Our grant making is guided by an overarching
philanthropic strategy that defines the role we
aim for within our philanthropic work, the longer-
term changes we strive to achieve and the main
levers that we apply to accelerate change that
we believe will drive positive impact.
Role
We understand our role as being a potential
catalyst for change, but never in isolation from
broader collective efforts, always seeking col-
laborations and partnerships.
Our privileged position and responsibility come
with an obligation to constantly push ourselves
to do things better, smarter, and with greater
impact to address the main challenges within
our focus areas.
Main levers of change
We apply three main levers of change to drive
impact and accelerate progress in our thematic
focus areas.
Through grants, capacity strengthening support,
and bold initiatives, we aim to empower organi-
sations, inspire innovation, and amplify meaning-
ful actions for a better future.
By making greater use of all our capabilities
we aim to enable organisations to accelerate
their development and scaling of programmes
and approaches, creating positive changes for
people and the planet.
“ Our privileged position and
responsibility come with an
obligation to constantly push
ourselves to do things better.”
←The white-eared kob antelope migration,
seen from air in Boma and Badingilo National Parks,
South Sudan. Photo: David Simpson
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 17Introduction Engaged ownership Philanthropy
Activities
Grants
Flexible, multiyear and
risk-willing funding
Capacity strengthening
Access to network support in project
management, fundraising, communica-
tions and knowledge exchange
Bold initiatives
Demonstrate and inspire action through
initiatives of our own
How we create impact
Impact framework
To structure the tracking of
progress and reporting on our
philanthropic strategy, we have
established an impact frame-
work that illustrates the main
activities and outputs that we
deliver to strengthen the orga-
nisational and financial capacity
of our partners as well as im-
proving the enabling conditions
for change.
We believe this will ultimately
support the longer-term
changes we strive to achieve.
What we aim
to achieve
The medium and long
term change we aim to
achieve through our
financial and non-financial
grant making support
What we do
The support we provide
to enable organisations
to accelerate their impact
Impact
Education
Increasing children’s
foundational skills
in least-developed
countries
Biodiversity
Sustaining tropical
forests in key
biodiversity areas
Coating technologies
Sustainable coating
technologies
Rewilding
Accelerating rewilding
to increase biodiversity
Social
Increasing resilience
and well-being of
children and youth
Outcome
Capacity
Strengthening organisational
capacity of our partners
Finance
Increasing financial capacity
of our partners
Enabling conditions
Improving contextual conditions suppor-
tive of change within our thematic areas
International National
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 18Introduction Engaged ownership Philanthropy
Philanthropic activities in 2024
Grants
The majority of our grant making is within areas
of international education and biodiversity, as
well as intiatives to improve the well-being of
children and youth in Denmark and Greenland.
In 2024 our total grant making through the year
was EUR 28 million, which was the highest an-
nual amount donated by the Foundation since its
creation. Another major milestone achieved this
year was the total grants committed for education
since 2010, which exceeded EUR 67 million.
Across both education and biodiversity, we in-
creased our support for medium-sized organisa-
tions and the largest share of our grants were
committed to work on the African continent.
We continued our support for the Hempel Foun-
dation Coatings Science and Technology Centre
(CoaST), which advances research in sustainable
coatings.
In 2024, CoaST strengthened knowledge-
sharing through publications and partnerships,
including the first quantitative sustainability
assessment of coatings for wind turbine towers.
For our work in Denmark, we strengthened our
grant making strategy to ensure greater flexibility
and long-term sustainability for organisations
working to improve the well-being of children and
youth in Denmark and Greenland. Recognising
the need for more flexible funding, we introduced
acceleration grants in multi-year partnerships,
enabling organisations to scale and consolidate
their impact.
Alongside this, we continued to support early-
stage projects through small grants. Many of these
initiatives successfully scaled in 2024, attracting
additional funding from other donors – demon-
strating the catalytic effect of our approach.
↑Organic yerba mate farmer, Paraguay. Photo: Cindy Galeano/Guyra ParaguayHempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 19Introduction Engaged ownership Philanthropy
With the grants committed in 2024 for educa-
tion initiatives, we expect to reach a total of 1.4
million children by the end of 2027 – well beyond
our commitment to reaching 1 million children
by 2030.
The most significant increase in children reached
in 2024 compared to 2023, as reported by
UNICEF, was from our grants supporting educa-
tion in Madagascar, Zambia and South Africa.
With our new grants for biodiversity, we added
four new landscapes to our portfolio and we are
now working in 19 different landscapes around
the world, all of which are key biodiversity areas
within the four geographies that we focus on:
Atlantic Forest, Eastern Afromontane, Indonesia
and Madagascar. In 2021, we made a commit-
ment to support the sustaining of 5 million hect-
ares of key biodiversity areas by the end of 2030.
We currently support 3.9 million hectares, which
is ahead of target.
Capacity strengthening
Through the year we took significant steps to
deliver on our intent to strengthen the organisa-
tional capacity of our international grantees and
grantees working to improve the well-being of
children and youth in Denmark and Greenland.
○ To strengthen our offering to our education
partners around organisational capacity, we
launched a partnership with Global Schools
Forum.
○ To strengthen support for our biodiversity
partners, we established a new partner-
ship with the NGO Maliasili to provide four
years of training and support to improve
organisational capacity of four organisations
in Madagascar: Planet Madagascar, Asity,
Association Fosa, and Fanamby.
We have established a framework for accelerating
organisations in Denmark by focusing grants
and resources on strengthening selected partners,
using clear selection criteria and a shortlist of
high-impact candidates.
Bold initiatives
To demonstrate and inspire actions for change,
we initiate, co-develop and implement new
initiatives across our thematic focus areas. While
the shape and form of such initiatives can be
different, they are all characterised by a dedicated
investment of our time and resources to help
shape the initiative.
←Trees in San Rafael Reserve, Paraguay.
Photo: Cindy Galeano/Guyra Paraguay
5
million hectares of key biodiversity
areas to be supported by the end
of 2030.
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 20Introduction Engaged ownership Philanthropy
Paving the road for rewilding in Denmark
To demonstrate and inspire expansion of rewilding
in Denmark we continue to invest in Saksfjed
Wilderness – 800 ha of farmland undergoing
rewilding.
Through 2024, an intense baseline and moni-
toring programme was established with partners,
including universities in Aarhus and Copenhagen
and the consultants (WSP), with focus on botany,
insects, bats and birds. Several bachelor, MSc
and PhD field research projects were established
(e.g. airborne e-DNA, mammal surveys, automised
insect photo surveys).
Today, Saksfjed Wilderness is one of the most ex-
tensively monitored new nature sites in Denmark
with more than 160 adult and breeding Exmoor
horses and Galloway cattle rewilding the area
in all year low intensity grazing within two large
fenced areas covering a total of 800 hectares.
Increasing finance for biodiversity
To support global initiatives that increase the
financing available for biodiversity, we partner with
the Museum for the United Nations – UN Live.
By supporting their vision to launch the Sounds
Right music movement, we hope to help create
an entirely new source of funding for biodiversity
conservation that values and monetises the
sounds of nature to support conservation at a
global scale.
The aim is that by simply listening to tracks from
Nature – music that features nature in song-
writing or production – fans will directly protect
the environment, as a portion of royalties are
disbursed to high-impact conservation initiatives.
This would therefore create an entirely new
source of funding for conservation that has vast
potential for impact at scale.
By year-end, tracks from Nature had over 150
million streams and renowned artists such
as Ellie Goulding, David Bowie x Brian Eno, and
MØ contributed with tracks featuring nature’s
sounds, further amplifying the cause (read more
on page 26.).
During the year a fund was established to manage
the funding generated and six organisations
working to protect tropical forests received grants.
Strengthening education for lasting impact
Another key initiative – the Foundational Learning
Action Tracker (FLAT) – gained significant trac -
tion in 2024.
The initiative was developed in partnership
between UNICEF and the Hempel Foundation
in 2023 and draws on the expertise of a range
of experts in the sector.
In 2024, the FLAT gained recognition as a key
tool for assessing countries’ progress on foun-
dational learning.
New data from the 2024 FLAT report was pre-
sented at a UN General Assembly side event
in September and at the African Foundational
Learning Exchange in Kigali in November 2024.
The report presents data for 123 low- and middle-
income countries and concludes that while some
governments are making progress, approx. 74%
have shown little to no improvements in the last
year, underscoring the urgent need for strength-
ened system and policy measures linked to foun-
dational learning, especially in regions like South
Asia and Sub-Saharan Africa.
↓Long-tailed tit perched
on a branch in Saksfjed Wilderness.
Photo: Jens Thorving Andersen,
Hempel Foundation
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 21Introduction Engaged ownership Philanthropy
Our grant making in numbers
Active portfolio
International Education and Biodiversity 2024
Funding and grants Expanding our reach
Supporting
Managing
35 organisations
59grants
433,000
In 2024 our support improved education opportunities for
433,000 additional children in the world’s least-developed
countries.
3.9
In 2024 all active grants supported sustainable management
and preservation of critical biodiversity in 3.9 million hectares
of tropical forest.
*Incl. EUR 3m for Glasmuseet
Education
Rewilding
Biodiversity
Social Initiatives*
Coating Tech.
National
160 grants
Total donations
Funding 2024
EURm
Supporting 19 organisations
in total of which 10 are new
International
20 grants
28
EURm donated
– our highest annual
donation to date
910 2 61
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 22Introduction Engaged ownership Philanthropy
↑Rwandan students performing on stage at
FLEX 2025 in Kigali. Photo: Isonga Media Ltd
Achievements
within our focus
areas
In 2024, we worked with partners to advance
foundational learning, strengthen education
systems, and support governments in delivering
quality education.
We also took significant strides to protect high-
biodiversity landscapes, enhance financial
sustainability for conservation, and foster global
collaboration – as well as to restore wild nature
in Denmark – by combining conservation efforts
with research, engagement and knowledge-
sharing.
In our commitment to enhancing the well-being
of children and youth in Denmark and Greenland,
we supported 44 organisations during the year.
Additionally, we launched a new acceleration
programme, onboarding the first of three organi-
sations which we will be supporting over the
coming years to increase their impact.
Finally, CoaST continued its engagement in sci-
entific dissemination, with publications in leading
coatings journals and presentations at interna-
tional conferences. These efforts have helped
increase knowledge-sharing and collaboration
within the field.
Education Biodiversity Social Initiatives
Our focus areas
Coating Technologies
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 23Introduction Engaged ownership Philanthropy
Future generations in the least-developed
countries are at risk of growing up without
the opportunity to read or write. This under-
mines social and economic growth and threatens
to accelerate instability in countries challenged
by multiple threats, including climate change and
loss of biodiversity.
The Hempel Foundation therefore supports
delivery of learning approaches at country level
and initiatives at regional/global level that
strengthen the knowledge and capacity of
governments to advance policy and effectively
invest in foundational learning.
In 2024 we joined forces with multiple partners
to convene the African Foundational Learning
Exchange.
The exchange was hosted by the Rwandan
government and brought together Education
Ministers from across the continent, as well as
policymakers and organisations specialised
in education programming to accelerate action
on the learning crisis.
In addition to high level policy events, we hosted
a forum during the Skoll World convening in Oxford
to promote knowledge sharing to strengthen
education ecosystems. The convening brought
together thought leaders from Hempel Foundation
partners to share their knowledge and evidence
on Education Systems Change.
Also significant in 2024 was our new partnership
with the Global Schools Forum to support part-
ners in building their organisational capacity
towards programme scaling through an Impact
Accelerator Programme.
Education Spotlight
↑Teacher Monica Namaganda leads a Building Tomorrow energizer activity during a
Roots to Rise literacy activity at Bululu Primary School, Uganda. Photo: Building Tomorrow
Increasing children’s
foundational skills
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 24Introduction Engaged ownership Philanthropy
Scaling education
programmes in
government systems
In 2024, we strengthened our partnership with VVOB
– an international non-profit organisation working
towards quality education in Africa, Asia and South
America. VVOB serves as a crucial scaling partner for
governments in Zambia and Uganda, working to en-
hance foundational learning by embedding sustainable,
evidence-based solutions into national education
systems. Their approach prioritises collaboration with
Ministries of Education, ensuring alignment with
national priorities and policies to drive systemic im-
provements in early-grade literacy and numeracy.
Key milestones were reached in 2024 to promote
foundational learning. Based on close collaborations
with the Ministries of Education, catch-up learning
programmes were integrated into existing systems,
ensuring alignment with national education goals and
strategies. Evidence-based programme approaches
grounded in data and continuous monitoring, enabled
demonstration of programme impact.
For more information, visit our website
↗
is the average pupil-teacher
ratio in primary schools in Uganda
and in Zambia it is 42:1, highlighting
the challenge of overcrowded
classrooms.
+40 %
of schools in Uganda and Zambia lack
sufficient teaching and learning materials
to support foundational literacy and
numeracy (UNICEF, 2023).
55:1
↑Schoolgirl in Bangladesh.
Photo: BRAC
↑Roset (learner) at Kisinga Primary School, Uganda, reading
the oral multiplication chart like the teacher. Photo: VVOB
CaseEducation
Sustainability statement Foundation governance Financial performance Statements Financial statements 25Philanthropy
Hempel Foundation Annual Report 2024
Introduction Engaged ownership Financial investments
↑Sifaka lemur in Ankarafantsika National Park, Madagascar. Photo: Shutterstock
The biodiversity crisis is more acute today
than at any other time in mankind’s history
as the indices on the status of biodiversity
continue to show downward trends. This de-
cade must see transformational change for bio-
diversity conservation and ecosystem restoration
if we are to address the biodiversity crisis.
The Hempel Foundation therefore supports sus-
tainable development by accelerating initiatives
to reduce deforestation and increase the flow of
financing to sustain the tropical forests with the
highest biodiversity.
Our partnership with UN Live on the Sounds
Right initiative was a notable achievement (see
page 21 on increasing finance for biodiversity).
This global movement transforms music into a
force for biodiversity conservation by recognising
nature as an artist. It raised funds for six Colombian
NGOs working on tropical forest conservation,
further strengthening local efforts to protect
critical ecosystems.
To ensure long-term sustainability, our support
for ecotourism and carbon credit initiatives led
to two landscapes in Rwanda and Madagascar
becoming financially self-sustainable, setting
a precedent for others to follow. Improved forest
management also contributed to an 89% reduc-
tion in forest fires in Madagascar’s Ankarafantsika
National Park and a 70% decrease in deforesta-
tion in Madagascar’s baobab forests.
Collaboration remained key, as we supported
more than 180 local organisations through funding
or knowledge-sharing initiatives and brought
together over 300 African NGOs at the IUCN
Africa Conservation Forum to define regional
conservation priorities. Together, these efforts
drive scalable and lasting impact for nature and
communities.
Sustaining tropical forests
in key biodiversity areas
Biodiversity Spotlight
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 26Introduction Engaged ownership Philanthropy
Conserving
Tanzania’s Udzungwa
Mountains
In 2023 the Hempel Foundation committed support
for a coalition of local and national stakeholders work-
ing to restore ecosystems, empower communities,
and secure long-term conservation financing for sus-
taining biodiversity in the Udzungwa Mountains.
This initial support enabled stakeholders to develop
and align around a shared strategy to address the
main drivers of deforestation.
To deliver on this shared strategy and further accel-
erate efforts to sustain biodiversity in the Udzungwa
Mountains, the Hempel Foundation extended its
funding in 2024 to STEP (the Southern Tanzania
Elephant Program) and a broader donor coalition to
support their coordinated and effective responses
to the ever-changing challenges in the landscape.
For more information, visit our website
↗
3 %
80 %
of the world’s mammal species are found
in the Udzungwa Mountains, making this
African mountain forest one of the planet’s
most biodiverse places.
of the Udzungwa Mountains are legally
unprotected, making them highly
vulnerable to deforestation and hunting.
↑Students receiving environmental education in the Udzungwa
Mountain forest, Tanzania. More than a quarter million people
live in and around the Udzungwa Mountains, relying on the forests
for water, livelihoods, and climate regulation.
Photo: Silvia Ricci
↑Red colobus monkey in the Udzungwa Mountains, Tanzania.
3% of the world’s mammal species are found in the Udzungwa
Mountains, making this African mountain forest one of the
planet’s most biodiverse places.
Photo: Steffen Brøgger-Jensen
Biodiversity
Case
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 27Introduction Engaged ownership Philanthropy
Denmark has the lowest proportion of land
under conservation in Europe and there is an
urgent need for more wild nature in the form
of very large contiguous natural areas. At the
same time there is need for identifying and de-
monstrating the best solutions for nature restora-
tion as well as increasing awareness amongst
decision makers and landowners of the need and
opportunities for nature restoration by rewilding.
To address these challenges we are working
to establish some of Denmark’s most important
new nature and become a platform for new
knowledge, the development of best practices,
and communication about nature restoration.
During 2024 we took some significant steps to-
wards rewilding in Saksfjed Wilderness. We estab-
lished 23 km of fencing, allowing natural grazing
processes to develop undisturbed but monitored.
Scientific monitoring is a key pillar of our work,
and through the year over 100 survey plots and
transects were established in collaboration with
experts, students and scientists.
This led to the identification of a total of 2,030
species. This number is still growing, which dem-
onstrates the ecological richness and potential
for nature in Saksfjed Wilderness.
Beyond conservation, awareness and engage-
ment play a crucial role in driving impact. In 2024,
we launched a new communication strategy
for Saksfjed Wilderness including a biodiversity
school programme.
Our outreach efforts expanded significantly,
reaching new audiences through 1,901 TikTok
followers and engaging young people in the
importance of rewilding.
Accelerating rewilding
to increase biodiversity
↑Night sky with stars reflected in a puddle on a dirt path.
Photo: Henrik Egede-Lassen, Zoomedia
Additionally, we strengthened collaboration with
students, researchers, and changemakers to
generate new knowledge and develop rewilding
models that can be applied both in Denmark and
internationally.
Together, these efforts support our vision of
restoring lost ecosystems, increasing biodiversity,
and establishing rewilding as a key strategy for
both conservation and the development of best-
practice knowledge that others can build upon.
Biodiversity Spotlight
Rewilding
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 28Introduction Engaged ownership Philanthropy
←
Saksfjed Wilderness
became part of the
European Rewilding
Network
In 2024, Saksfjed Wilderness became part of the
European Rewilding Network (ERN), linking it
to a broader effort to restore natural ecosystems
across Europe.
Located on Lolland, Denmark, Saksfjed Wilderness
has been the focus of rewilding efforts aimed at
fostering biodiversity and supporting native wildlife.
By joining ERN, the site can benefit from shared
knowledge and collaboration with other rewilding
initiatives.
This step reflects the growing recognition of Saksfjed
Wilderness’ potential in nature restoration and re-
wilding, and supports continued efforts to strengthen
biodiversity and engage the public with nature.
For more information, visit our website
↗
Nearly 200 Galloway
oxen and Exmoor horses
roam freely, shaping the
800-hectare area.
↑A stonechat perched on a branch in Saksfjed Wilderness. The area, owned
by the Hempel Foundation, aims to serve as a stepping stone for birds and other
wildlife, offering space for nature’s own processes to thrive.
Photo: Henrik Egede-Lassen, Zoomedia
↑Galloway cattle grazing in a misty field. At Saksfjed Wilderness,
these hardy animals play a key role in rewilding by keeping the
landscape open and supporting biodiversity.
Photo: Jens Thorving Andersen, Hempel Foundation
↑Exmoor ponies at Saksfjed Wilderness.
Photo: Jens Thorving Andersen, Hempel Foundation
Case
Biodiversity
Rewilding
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 29Introduction Engaged ownership Philanthropy
Coatings are key for the protection and effec-
tiveness of large infrastructure critical for
economic growth. Given its wide usage, more
sustainable and carbon neutral coatings can help
mitigate climate change at a significant scale.
Through its commitment to sustainable prac-
tices and minimising environmental impact,
The Hempel Foundation Coatings Science and
Technology Centre (CoaST) actively contributes
to mitigating climate change, addressing re-
source scarcity, and combating environmental
degradation.
A key milestone in 2024 was the publication
of the first quantitative sustainability assessment
of coatings protection for wind turbine towers.
The centre also expanded partnerships with
leading universities, including the Technical
University of Eindhoven, Chalmers University of
Technology, and the University of Trento, to ad-
vance research in materials science and testing
methods.
The centre also expanded its collaboration with
industry partners, to advance research in intu-
mescent coatings for fire safety.
A key challenge remains the transition from
laboratory testing to real-world applications, and
work is ongoing to refine testing methods.
Additionally, CoaST hosted workshops with
industry partners, leading to new research pro-
jects and discussions on future challenges in
coatings development.
The knowledge generated by CoaST is intended
to be widely accessible, contributing to advance-
ments across research institutions, industry, and
society.
Sustainable coating
technologies
30 39 22
CoaST continues to advance
the sustainability of coatings
through approximately 30 PhD
and postdoc projects.
CoaST scientists participated
in 27 key conferences and
welcomed 39 new members,
reflecting its dynamic and
interdisciplinary environment.
CoaST scientists published
22 peer-reviewed papers in top
scientific journals.
For more information, visit
our website ↗
PhD and
postdoc projects
new
members
peer-reviewed
papers
Coating Technologies
Spotlight
CoaST highlights
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 30Introduction Engaged ownership Philanthropy
There is a growing well-being and mental
health crisis among children and youth in
Denmark and Greenland, with rising cases of
anxiety, depression, and emotional distress,
significantly impacting their overall development
and quality of life.
To address this crisis the Hempel Foundation
supports organisations dedicated to enhancing
the resilience and well-being of children and
youth in Denmark and Greenland.
To strengthen the capacity of key organisations,
we launched a new acceleration programme
in 2024, onboarding the first of three long-term
partners.
Selection criteria and capacity-building needs
have been identified, and the programme is set
to drive long-term impact in the coming years.
Increasing resilience
and well-being of children
and youth
We also played an active role in alliances and
networks, collaborating with other foundations
and stakeholders to address complex challenges
related to children’s well-being.
These partnerships ensure that our work is
embedded in a broader ecosystem of support,
amplifying impact beyond individual grants.
Together, these efforts reflect our commitment
to flexible and strategic funding, ensuring that
organisations working with children and youth
can thrive, grow, and deliver lasting change.
↑Photo: Amanda Stock/GirlTalk
Social Initiatives
Spotlight
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 31Introduction Engaged ownership Philanthropy
Strengthening
support for
Greenland’s youth
In 2024, Tusaannga, Greenland’s national helpline for
children and youth, expanded its reach and services.
With our latest donation, the initiative attracted new
donors, enabling further growth. A newly launched
website has already drawn over 7,200 unique visitors,
while also expanding indirect counselling services,
and two young Greenlandic students have been hired
to create relevant content.
Most importantly, there has been almost a 100%
increase in the number of counselling sessions for
children and youth under 18, ensuring more young
people receive the support they need. These
developments mark a significant step in strengthen-
ing mental health services for Greenland’s youth.
For more information, visit our website
↗
7,200
unique visitors at Tusaannga,
Greenland’s national helpline
for children and youth’s new
website
↑Northern lights glowing over a snowy landscape.
Photo: Tusaannga
↑A house with a sign reading “TUSAANNGA”
– Greenlandic for “Hear me”. Photo: Tusaannga
↑Speedboat circling
an iceberg in Greenland.
Photo: Tusaannga
CaseSocial Initiatives
Sustainability statement Foundation governance Financial performance Statements Financial statements 32Philanthropy
Hempel Foundation Annual Report 2024
Introduction Engaged ownership Financial investments
Feedback from partners
Gathering insights for continuous improvement
In 2023, we conducted our first partner survey
to better understand how we can strengthen our
support for our partners and so secure the highest
impact together.
To ensure greater validity and impartiality of the
survey, in 2024 we decided to collaborate with
the Center for Effective Philanthropy (CEP).
CEP specialises in helping foundations gather
insight into their grantees’ perception of a range
of topics, from the impact they achieve to assis-
tance beyond the grant and their relationship
with foundation staff.
Partners rate the Hempel Foundation on a scale
from 1 – 7 and we got the following ratings on some
of the questions most important to us:
How comfortable do you feel
approaching the Foundation
if a problem arises?
6.47
How well does the Foundation
understand the field in which
you work?
5.85
How well does the Foundation
understand your organisation’s
strategy and goals?
6.04
The support I received (beyond the
grant) strengthened my organisation
and/or programme.
5.92
Overall, how would you rate
the Foundation’s impact on
your field?
5.71
To what extent has the Foundation
advanced the state of knowledge
in your field?
4.93
Overall, our reading of the results are
○ The foundation is perceived as
approachable, responsive, trans-
parent and compassionate.
○ Our assistance beyond the grant
is creating value and supporting
grantees in accelerating impact.
○ Our approval process is considered
transparent, and reporting processes
straightforward, relevant and an
opportunity to learn.
We will use these insights to continu-
ously refine our philanthropic approach.
The survey takes place several times a year with
different foundations, which makes it possible
to benchmark results against more than 300
similar organisations.
The survey was shared with 113 of our inter -
na tio nal and national grantees and the response
rate was very high (80%), providing excellent
insights that will guide our grant making onwards.
Overall, we were pleased to see that the average
perception of the foundation was very positive.
←George Srour, Co-founder
of Building Tomorrow, speaking at
Marmalade Festival 2024 during
a side event to the Skoll World Forum
hosted by the Hempel Foundation.
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 33Introduction Engaged ownership Philanthropy
The list of donations continues on the next page→Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 34Introduction Engaged ownership Philanthropy
The list of donations continues on the next page→Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 35Introduction Engaged ownership Philanthropy
The list of donations continues on the next page→Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 36Introduction Engaged ownership Philanthropy
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements Financial statements 37Introduction Engaged ownership Philanthropy
→ Statutory statement
on sustainability*
→ Our business model
→ Risk
→ Environmental
→ People
→ Human rights
→ Anti-corruption
→ Data ethics**
Sustainability
statement
*In accordance with section 99a of the Danish Financial Statements Act
**In compliance with §99d of the Danish Financial Statements Act
Hempel Foundation Annual Report 2024
Financial investments Foundation governance Financial performance Statements Financial statements 38PhilanthropyIntroduction Engaged ownership Sustainability statement
As the majority owner of the Hempel A/S Group
and a philanthropic foundation committed to
achieving the highest possible social and environ-
mental impact – sustainability is a fundamental
strategic priority guiding all our decision making.
Through our grant making in education, social
well-being and biodiversity we are striving to
improve the social and economic situation for
children and adults through access to better
learning, sustainable income opportunities and
ecosystem services provided by key biodiversity
areas.
As the majority owner of Hempel A/S, our main
sustainability priority is to support the company’s
actions to reduce its environmental footprint.
Since 2020, Hempel A/S has made significant
strides in this direction whilst preparing the com-
pany for the upcoming Corporate Sustainability
Reporting Directive (CSRD) requirements.
Hempel A/S has already transparently docu-
mented its progress and reports on Environmental,
Social and Governance (ESG) targets in its
sustainability statements.
As a part of the paints and coatings industry
– an industry that uses chemicals – we believe the
continued success of Hempel A/S depends on
its ability to reduce environmental impact across
the full value chain by phasing out or replacing
hazardous and carbon-intensive raw materials
while maintaining the high performance of value-
adding solutions.
Hempel A/S’ commitment to sustainability is
structured with the aim of supporting the UN
Sustainable Development Goals (SDGs),
acknowledging their significance not only to our
business but also on a global scale.
Sustainability leadership is a key lever of the
‘Double Impact Strategy’ launched by Hempel
A/S in 2020 to create long-term value for its
customers by continuously improving its environ-
mental footprint and amplifying the benefits it
creates for customers and for society. This dedi-
cation to responsible business practices helps
Hempel A/S to deliver on its our sustainability
performance ambitions – now and in the future.
Statutory statement on sustainability*
* In accordance with section 99a of
the Danish Financial Statements Act
The Hempel Foundation’s office activities repre-
sent a minor part of the Foundation’s total foot-
print. However, a common policy for sustainable
behaviour in the Foundation’s daily practice was
developed in 2022. This policy defines five over-
arching areas, within which the Foundation and
its employees work towards more sustainable
behaviour.
These areas are:
○ Transport
○ Property (buildings)
○ Property (land)
○ Supplies
○ Investments
The Sustainability Policy is available on
our website ↗
In addition the boards of the Hempel Foundation
and Hempel Invest A/S have adopted a policy
for sustainable investments.
See chapter on Financial investments on page
12 for further information.
Hempel Foundation Annual Report 2024
Financial investments Foundation governance Financial performance Statements Financial statements 39PhilanthropyIntroduction Engaged ownership Sustainability statement
Our grant making is guided by a philanthropic
strategy outlining our priorities and approach
(see the Philanthropy chapter). For the Hempel
A/S Group the continued growth and develop-
ment is driven forward based on a business
model with sustainability at its core.
As the majority owner of Hempel A/S we want
to shape a brighter future with sustainable coating
solutions based on the Hempel A/S business
model guided by its ‘Double Impact Strategy’.
See more about the strategy in the Hempel A/S
Group’s Annual Report 2024 here.
Responsible business conduct
in Hempel A/S Group
Hempel A/S operates a complex global supply
chain. To ensure responsible business conduct
throughout the supply chain and achieve its
sustainability ambitions it is necessary to engage
and collaborate extensively with suppliers.
Hempel A/S does this through a Sustainable
Procurement Programme and have received
an A score in the Carbon Disclosure Project’s
Supplier Engagement Rating.
Our business model
For the Hempel Foundation and Hempel A/S
people and safety are at the heart of everything
we do. This goes for our own colleagues as well
as people across our value chain.
By fostering safety, fair labour practices, diversity
and inclusion, we aspire to drive positive change
and raise industry standards. We have a strong
focus on achieving diversity, including gender
balance in Hempel A/S’ operations, and reducing
hazardous materials that are harmful to people
and the environment.
We are committed to developing a diverse and
inclusive culture where employees are safe, feel
respected and are treated fairly. We believe that
ensuring equal rights and promoting diversity will
benefit all employees around the world, fostering
collaboration, innovation and better business
performance. Diversity, Equity and Inclusion
(DEI) are an integral part of the of the Hempel
A/S Group’s corporate strategy.
See Hempel A/S’ business model on the next
page.
Hempel Foundation Annual Report 2024
Financial investments Foundation governance Financial performance Statements Financial statements 40PhilanthropyIntroduction Engaged ownership Sustainability statement
Across the world, Hempel A/S’ products and solutions help customers protect, beautify and
improve performance of their most valuable assets. Sustainability is at the heart of the business
and incorporated into every step of the company's business model.
Hempel A/S business model
Input Value
Customers
Hempel A/S continuously engages
with customers to understand
and meet their evolving business
and sustainability needs.
Stakeholders
Hempel A/S builds trusted relation-
ships with consumers, suppliers,
peers, regulators, and other stake-
holders across the value chain.
Hempel A/S gains insights to con-
tinue to cater to consumer lifestyles
and needs.
Employees
Hempel A/S’ team of +7,200 col-
leagues are driven by a purpose and
ambitions to make a difference for
customers and society. Hempel A/S
relies on their input and expertise
to reach its goals.
Procurement of resources
Hempel A/S depends on raw mate-
rials, such as epoxy, titanium dioxide
and metallic pigments to produce
its solutions.
Customers & consumers
Hempel A/S delivers solutions and
services that build new value propo-
sitions for customers, while helping
them reduce their environmental
impact. It delivers inspiring products
to consumers that beautify their
living spaces.
Employees
Hempel A/S nurtures a diverse and
inclusive workplace with a shared
culture, where employees can suc-
ceed and develop.
The world around Hempel A/S
Hempel A/S’ products help protect
assets for longer, reducing their
lifetime environmental impact. The
company also continuously works
to reduce the environmental impact
of its own operations.
Company & owners
Parts of Hempel A/S’ profits are
reinvested into the company.
Hempel A/S also pays dividends
to the Hempel Foundation.
Through the Hempel Foundation,
Hempel A/S supports philanthropic
projects around the world.
Research & develop
Hempel A/S continuously develops
expertise across segments to deliver
best-in-class solutions from chemistry
to application engineering. Hempel
A/S actively partners with its cus-
tomers and partners in the field.
Innovate
Hempel A/S is committed to inno-
vating with its customers to enable
them to meet their goals, using state-
of-the art processes across its 14
innovation centres.
Hempel A/S drives innovation to
generate higher value for customers
and stakeholders.
Produce & scale
Hempel A/S strives for greater
excellence, efficiency and scalability
in production while reducing
the environmental footprint of its
operations.
Collaborate
Hempel A/S collaborates with
suppliers to shorten lead times and
drive joint decarbonisation efforts.
Development Production
Brand & sell
Hempel A/S works with its customers
to communicate the value and benefits
of brands and solutions, so they get
the best possible experience, no matter
how or where they meet the company.
Distribute
Hempel A/S’ globally integrated supply
chain and store network allow Hempel
A/S to deliver solutions to customers
across the world every day.
Advise & support
Hempel A/S’ global coating advisors
ensure efficient, high-quality application
and process optimisation to maintain
customers’ assets in the agreed condition.
Hempel A/S helps to reduce costs
and waste, and improve environmental
performance. In its paint stores, Hempel
A/S provides advice and inspiration to
private consumers.
Delivery, sale and support
Hempel A/S’ businessHempel Foundation Annual Report 2024
Financial investments Foundation governance Financial performance Statements Financial statements 41PhilanthropyIntroduction Engaged ownership Sustainability statement
Risk
Risk assessment is an integrated part of the
Hempel Foundation’s work with investments
and donations. As indicated in the Foundation’s
Investment Strategy, it adopts a financial invest-
ment profile with a long-term risk appetite al-
lowing moderate to high short-term fluctuations
in the financial portfolio based on a balanced
risk-versus-reward approach.
In our philanthropic work, we are willing to take
reasonable and well considered risks, based on
an overall assessment of the potential for impact
in each project or partnership.
In connection with larger donations and partner-
ships, potential risks are mapped in the drafting
of each project description, as high, medium
or low, with a brief outline of how to mitigate the
risk. Due diligence is often based on the existing
efforts of other major donors and organisations.
When this is not possible, we engage with exter-
nal parties.
The Foundation focuses particularly on the risk
of corruption, human rights violations and lack of
sustainability: the risk that the project’s positive
changes will not be maintained after the project’s
lifespan. There is also a focus on risks related
to environmental, climate, social and personnel
matters.
The Foundation is not aware of any human rights
violations or other fundamental rights violations
in connection with the work carried out at the
Foundation’s behest.
In 2024, the Foundation completed a routine
revision of its Due Diligence Framework for
partners. Due diligence screenings are essential
to mitigate risks, ensure compliance, and main-
tain the integrity of partner relations.
The revised Due Diligence Framework reflects
the Foundation’s commitment to ensure robust
and consistent screening of new partners, while
at the same time enabling lean and efficient
processes.
↑Canopy Walkway in Nyungwe National Park, Rwanda.
Photo: Marcus Westberg
Hempel Foundation Annual Report 2024
Financial investments Foundation governance Financial performance Statements Financial statements 42PhilanthropyIntroduction Engaged ownership Sustainability statement
Environmental
We recognise the importance of addressing
the impacts our operations have on biodiversity,
particularly in relation to the potential risks to
natural ecosystems in the areas where Hempel
A/S operates. We are committed to safeguarding
biodiversity as Hempel A/S continues to grow
globally as well as through our investments and
our grant making operations.
As for our grant making, biodiversity is one of
our philanthropic priorities and environmental
sustainability is embedded in much of the work
we are supporting, both in Denmark through
our focus on rewilding and the work we are sup-
porting in key biodiversity areas in the global
south, guided by a dedicated strategy aligned
with and supportive of the UN’s SDG 15.
For Hempel A/S, the ambition is to become
the sustainability leader in the coatings industry.
To this end, it is continuously working to reduce
the environmental footprint of its global opera-
tions and for its customers.
Hempel A/S prioritises efforts to reduce green-
house gas (GHG) emissions from its operations,
products and full value chain. It aims to reduce
waste and plastic content in its operations, and
engages with its suppliers to overcome environ-
mental issues together. It does this as it grows
in a sustainable way by decoupling growth from
its environmental impact.
In 2024, significant progress was achieved to-
wards Hempel A/S’ science-based targets and
ESG commitments, including reduced CO
emissions from its operations and mapping all
fossil-fuel driven equipment in use at its produc-
tion units around the globe.
In addition, Hempel A/S continued to install
solar panels and purchase grid-supplied renew-
able electricity at key sites. It also continued to
expand its Smart Scales initiative, an automated
waste monitoring and reporting system that is
key to its paint recycling efforts. The initiative
provides real-time data to track progress against
waste reduction targets.
In the coming years, we will continue to support
Hempel A/S as it works to deliver on our ambition
of making Hempel A/S the sustainability leader
in the coatings industry.
“ For Hempel A/S, the
ambition is to become
the sustainability leader
in the coatings industry.”
Hempel Foundation Annual Report 2024
Financial investments Foundation governance Financial performance Statements Financial statements 43PhilanthropyIntroduction Engaged ownership Sustainability statement
People
We acknowledge our responsibility to respect
human rights. We seek to prevent or mitigate
adverse effects on human rights directly linked
to our operations, products or services, and we
expect our employees to do the same.
We are committed to minimising any risks asso-
ciated with our philanthropic work, as well as
the development, production and application of
coatings through Hempel A/S..
All Hempel A/S and Foundation colleagues
are subject to the Hempel Foundation Code of
Conduct. Among other things, this relatesto how
employees behave in their daily work in relation
to co-workers, IT security, the receipt of gifts, etc.
In 2024, all employees underwent an online re-
fresher course on the Code of Conduct.
People and safety are fundamental for our con-
tinued success. This goes for Hempel A/S col-
leagues as well as people in the Foundation and
across the value chain.
By fostering safety, fair labour practices, diversity
and inclusion, we aspire to drive positive change
and raise industry standards.
We are committed to developing a diverse and
inclusive culture where colleagues are safe, feel
respected and are treated fairly. This, we believe,
fosters collaboration, innovation and better
performance.
In 2024 important progress was made, including
the introduction of a new global Parental Leave
Policy for our Hempel A/S employees and a new
global Flexible Working Policy. Many existing pro -
grammes were also continued in 2024 such as
Inclusive Leadership Training and Anti-Ha rassment
Training for all employees.
As a measure of our commitment to supporting
learning and development of all employees, we
registered more than 4,000 hours of self–learning
among Hempel A/S colleagues.
We continue to support the safety and well-being
of colleagues and ensure we always safeguard
the health of employees and the partners we
work with.
Hempel Foundation Annual Report 2024
Financial investments Foundation governance Financial performance Statements Financial statements 44PhilanthropyIntroduction Engaged ownership Sustainability statement
Human rights
Violations of human rights within our investment
portfolio or in projects supported through our
grant making undermine our commitment to
accelerating sustainable change. More broadly,
violations of human rights along with export
restrictions tied to national security, trade tariffs
and climate change add complexity to the cross-
border sales of Hempel A/S’ products and thus
also constitute a potential risk for continued
growth.
To mitigate risks of human rights violations in
our grant making we have established a set of re-
quirements and criteria that support a strong
focus on sustainability, capacity building of local
organisations, zero tolerance for corruption and
focus on transparency and human rights, including
the protection of children’s rights, etc.
As for Hempel A/S we seek to prevent or mitigate
adverse effects on human rights directly linked
to its operations, products or services, and we
expect all our collagues to do the same.
We are committed to respecting human rights
in accordance with the UN Global Compact and
the UN Guiding Principles on Business and
Human Rights. This entails efforts to avoid and
mitigate sustainability risk in our supply chain.
To this end, we use a sustainability assessment
performed by EcoVadis, an external provider of
sustainability evaluations.
The assessment covers four key topics including
human rights. During 2024, Hempel A/S signifi-
cantly increased the number of direct spend sup-
pliers assessed by EcoVadis and we expect this
work to continue along with other safeguarding
initiatives such as the Employee Code of Conduct
and Business Partner Code of Conduct.
These guide our work and engagements within
the company and with external stake holders and
set expectations to our employees and business
partners within the areas of human rights, labour
rights, the environment and anti-corruption.
In 2024 the local transpositions of the EU Whistle-
blower Directive came into force in all EU coun-
tries, and we have updated procedures for Hempel
A/S’ communications as applicable to further
facilitate safe, confidential and accessible reporting.
Hempel Foundation Annual Report 2024
Financial investments Foundation governance Financial performance Statements Financial statements 45PhilanthropyIntroduction Engaged ownership Sustainability statement
Anti-corruption
As the majority owner of Hempel A/S, the Hempel
Foundation seeks to promote strong governance
not only in its philanthropic work but also in the
Hempel Foundation Group as a whole. Govern-
ance and integrity are key pillars in both areas,
supporting long-term sustainability and respon-
sible business practices.
Being a trusted partner to our grantees, cus-
tomers and other stakeholders is a key lever for
our philanthropic work and in Hempel A/S’
Double Impact Strategy.. By upholding integrity,
transparency, and accountability in everything we
do, we not only build trust but also set a bench-
mark for ethical conduct.
Our Business Ethics Policy outlines procedures
to counter corruption, bribery and other unethical
behaviour. We also have a Sustainable Procure-
ment Policy in place that states our commitment
and approach to sustainability with our suppliers,
and how we turn our commitments into action.
In tandem, these policies underline our zero tol-
erance for bribery and corruption and set out
guidance and expectations for the conduct of all
Hempel employees.
In the area of data protection, we continued to
implement the General Data Protection Regula-
tion (GDPR) as a standard compliance frame-
work for the Foundation and Hempel A/S Group.
(See more in the section below on Data Ethics).
In order to ensure that all employees understand
and uphold our standards in their daily work,
compliance training is delivered to all new em-
ployees and is annually refreshed.
To ensure that employees, stakeholders to our
philanthropic projects and Hempel A/S cus-
tomers can report anonymously on irregularities,
the Hempel Foundation and Hempel A/S have
an externally hosted whistleblower system that
allows for anonymous reporting to an independ-
ent entity.
The system is an important tool to ensure that
allegations of irregular or unethical conduct are
reported and addressed quickly.
All reports are treated confidentially and followed
up with an objective and independent investiga-
tion led by the Compliance and Data Protection
department, which recommends appropriate
action to handle the reported issue to the Ethics
Committee.
By upholding integrity, transparency, and account-
ability in everything we do, we not only build trust
but also set a benchmark for ethical conduct in our
grant making practices and across the coatings
industry.
→ Nile River in Boma and
Badingilo National Parks, South Sudan.
Photo: Marcus Westberg
Hempel Foundation Annual Report 2024
Financial investments Foundation governance Financial performance Statements Financial statements 46PhilanthropyIntroduction Engaged ownership Sustainability statement
Hempel Foundation Annual Report 2024
Financial investments Foundation governance Financial performance Statements Financial statements 47PhilanthropyIntroduction Engaged ownership Sustainability statement
→ Governance structure
and composition
→ Board structure
→ Board committees
→ Operational aspects
of governance
Foundation
governance
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Financial performance Statements Financial statements 48PhilanthropyIntroduction Engaged ownership Foundation Governance
The Foundation Charter defines the overall
principles for the Hempel Foundation’s activities.
In addition, the Foundation is governed by a
set of Rules of Procedure for Board work and an
Annual Wheel to plan and prioritise our work
during the year.
Based on the Foundation Charter, Rules of
Procedure, and the Annual Wheel, the Board of
Directors considers the Hempel Foundation
to be in full compliance with the legislation and
to comply with all recommendations from the
Danish Committee for Good Governance in
commercial foundations.
Governance structure
and composition
The Board of Directors and the secretariat keep
a close watch on the continued effort to ensure
a high degree of transparency in results and pro-
cedures covering all aspects of the Foundation’s
scope that are not sensitive to the business
activities of Hempel A/S Group.
Regarding the recommendations from the
Danish Committee for Good Governance in
commercial foundations, the Board of Directors
has made a full report, which is available at
our website ↗
←Tiang antelope in Boma and Badingilo National Parks,
South Sudan. Photo: Marcus Westberg
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Financial performance Statements Financial statements 49PhilanthropyIntroduction Engaged ownership Foundation Governance
Board of Directors
The Hempel Foundation is governed by a Board
of Directors comprising nine members, of whom
six members are elected by the Foundation and
three members are elected from among
employees of Hempel A/S.
The Foundation Charter states that the Board
of Directors is a self-electing entity. Elections
take place annually. Board members appointed
by the Foundation are elected for a three-year
term and may be re-elected.
The three-year term is stipulated in the Foundation
Charter, with a view to maintaining satisfactory
continuity in the Board’s activities. The Chair and
Deputy Chair are elected from among the Board
members, each for a three-year term.
Board members must be no more than 65 years
of age when elected for the first time. The age
limit for Board members elected by the Founda-
tion is 75 years. The members appointed by
employees are elected under Danish legislative
provisions for employee representation on
boards of directors and, accordingly, are elected
for a term of four years.
Under the Foundation Charter, the following
requirements apply to members of the Board of
Directors appointed by the Foundation:
○ A majority cannot at the same time be mem -
bers of the Hempel A/S Board of Directors.
○ A majority should preferably be current or
former Hempel employees or somehow
be or have been involved with Hempel A/S
over many years.
○ At least two of the members must have
international business experience.
The Board of Directors has additionally set a
target for gender split among members elected
by the Foundation. The declared target is that
a minimum of two of the Board members ap-
pointed by the Foundation must be the under-
represented gender.
This target was achieved in 2018 and maintained
in 2024.
The Board of Directors has also decided that
competencies within charitable donations, com-
mercial business, active ownership, sustainability,
financial investments and other important areas
should be present among members of the Board.
Board structure
This is reviewed every year and was fully adhered
to in 2024.
The Chair and the Deputy Chair of the Board
monitor and assess the composition of the Board
and its performance on an ongoing basis, in
consultation with individual Board members and
the Board as a whole.
Once a year, the Board performs a formalised
internal Board evaluation and gap analysis in
accordance with the detailed recommendations
from the Danish Committee for Good Govern-
ance in commercial foundations. This evaluation
aims to ensure that the required commercial,
investment and personal skills, as well as compe-
tencies regarding charitable donations, are
available among the Board members appointed
by the Foundation.
Also, once a year the Board performs a formalised
Board Evaluation of the Chair’s performance.
This evaluation by each of the other eight Board
members is made in such a way that it is anony-
mous to the Chair.
Detailed information on the Board of Directors
can be found at our website ↗
All new Board members appointed by the Foun-
dation are selected through a structured process
based on the above evaluation, as well as any
specific needs for additional competencies on
the Board.
In 2024 one new member was recruited through
an external search and is supplementing the
commercial and financial competencies in the
Board.
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Financial performance Statements Financial statements 50PhilanthropyIntroduction Engaged ownership Foundation Governance
The Hempel Foundation Board of Directors has
established two permanent committees: an
Investment Committee and a Donations Com-
mittee. For preparation of specific purposes, the
Board of Directors can decide to establish ad
hoc committees, which are dissolved when the
specific tasks are completed.
Investment Committee
The Foundation has elected an Investment Com-
mittee made up of Board members to prepare
the Board’s higher-level decisions regarding the
Foundation’s financial investments and to evaluate
professional external portfolio managers used
by the Foundation.
The Investment Committee usually holds five to
six meetings a year with each of the Foundation’s
external portfolio managers, as well as meetings
on strategic investment issues.
The final decision on investments is made by all
Board members.
The Board continuously oversees and ensures
that the Foundation’s financial investments and
asset management are in alignment with the
Foundation’s purpose and its investment strategy.
Donations Committee
The Foundation has elected a Donations Com-
mittee, which examines and evaluates the many
applications the Foundation receives, many of
which are for significant and complex projects.
The final decisions on donations are, in accord-
ance with an agreement made within the Board,
made by all Board members and not only by
the members of the Donations Committee.
(ref. Commercial Foundations Act § 64). The final
decision on the total annual donations is also
taken by all Board members.
The Donations Committee generally holds five
to six meetings each year with application terms
announced on the Foundation’s website.
↑Baobab trees at sunset at the Avenue of the Baobabs
in Madagascar. Photo: Shutterstock
Board committees
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Financial performance Statements Financial statements 51PhilanthropyIntroduction Engaged ownership Foundation Governance
Spokespersons
The Chair of the Board speaks on behalf of Hempel
Foundation Group, unless the Chair, after a con-
crete assessment, appoints the Foundation’s exe-
cutive director to do so.
Meetings and remuneration
The Board of Directors generally convenes five
to six times a year. Two of these meetings take
place as soon as possible after the completion of
the Foundation’s half-yearly and annual financial
statements.
Members of the Board of Directors receive a fixed
annual base fee, which is on a market level and
considered reasonable in relation to the workload,
nature of the job and competencies required.
As is customary, the Chair receives 3 times the
base fee and Deputy Chair 1.5 times the base fee.
Besides the Chair, members of the Investment
Committee and the Donations Committee re-
ceive a separate annual fee for committee work.
Remuneration is decided by the Board of Direc-
tors on an annual basis, using a structured process
that takes into account the number of working
hours spent by the Board and the overall respon-
sibilities of the Board.
←Short-eared owl flying over grassland at Saksfjed Wilderness.
Photo: Adam Sahl Søderdahl, Hempel Foundation
The Remuneration is benchmarked in an external,
independent analysis that is conducted regularly
and was most recently prepared for the Founda-
tion in 2024.
To further support the correct handling of deci-
sions on remuneration issues, the Board addition -
ally, and from a critical standpoint, makes sure
that the suggested remuneration is reasonable in
relation to the overall interests of the Foundation,
as well as comparable to the level of remuneration
in other similar commercial foundations.
This work includes peer-group benchmarking,
which is carried out by an independent external
consultancy.
It is the firm commitment and aim of the Board
at all times that the Foundation is not to accept
costs or remuneration to Management, Board
members or other kinds of administrative costs
that do not support and strengthen the purpose
of the Foundation or its charitable donations.
The total remuneration paid to the Board in 2024,
including remuneration for work on Board com-
mittees, was EUR 1,219,000. The base fee paid
to each Board member in 2024 was EUR 33,517.
The Hempel Foundation is fully transparent about
remuneration across the Board and executive
management as reflected on our website ↗
Operational aspects
of governance
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Financial performance Statements Financial statements 52PhilanthropyIntroduction Engaged ownership Foundation Governance
Conflicts of interest
The Foundation is committed to ensuring that all
persons involved in its investment and donation
processes possess the requisite skills. The Foun-
dation is committed to avoiding any potential
conflict of interest in order to ensure the integrity
of decisions made regarding investment pro-
posals and donation applications.
All decisions are made in accordance with com-
mon conflict of interest principles. In practice this
means that no Board member or Foundation em-
ployee can take part in any decisions in which they
may be deemed to have a material personal
interest.
Organisation of the Hempel
Foundation secretariat
The Hempel Foundation ensures engaged owner-
ship while driving its philanthropic mission within
education, biodiversity, and other key areas.
The Foundation has a secretariat to manage these
efforts effectively, with dedicated teams over-
seeing Danish and international philanthropy, bio-
diversity initiatives, finance and administration,
communications, and strategic development.
The secretariat consists of managers and spe-
cialists with expertise in these areas, ensuring a
strong foundation for both philanthropic initiatives
and ownership responsibilities.
↑Aerial view of Lungholm Lake and surrounding autumn landscape at Saksfjed Wilderness.
Photo: Jens Thorving Andersen, Hempel Foundation
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Financial performance Statements Financial statements 53PhilanthropyIntroduction Engaged ownership Foundation Governance
→ Consolidated financial
results for the Hempel
Foundation Group
→ Hempel Foundation’s
financial results
Financial
performance
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Statements Financial statements 54PhilanthropyIntroduction Engaged ownership Financial Performance
Consolidated financial results
for the Hempel Foundation Group
Revenue, organic growth and earnings
Total revenue in 2024 reached EUR 2,185 million,
which constitutes an increase of EUR 13 million.
The organic growth in the year was a negative
1.3%, when adjusting for currency fluctuations
and for acquisitions and divestments.
Revenue was mainly driven by the Marine seg-
ment, which experienced negative growth,
whereas we saw a positive development in the
Decorative segment. More to this below.
○ The Decorative segment achieved 2.4%
organic growth, with revenue amounting
to EUR 653 million. This growth was driven
by both the mid- and premium-market
businesses.
○ The Marine segment saw negative organic
growth of 5.8%, reporting revenue for the
year of EUR 709 million. This decline reflects
a very strong 2023 baseline and was driven
by increased competition on pricing and the
timing of orders in the drydock business.
○ The Energy & Infrastructure segment
delivered organic growth of 0.1%, ending the
year with revenue of EUR 823 million. This con-
sistent result was achieved despite macro-
economic challenges, thanks to volume expan-
sion in key strategic areas, including passive
fire protection (PFP) and oil and gas.
Gross profit and margin
Gross profit increased in 2024 by EUR 46 million,
up from EUR 902 million in 2023 to EUR 948
million in 2024.
The positive trend in both gross profit and margin
was driven by increased demand for high-value
proposition products, an optimised global pro-
duction and warehousing footprint, including the
ramp-up of new production sites in China, and
a decline in raw material costs.
Sales, distribution and administrative costs
Sales, distribution and administrative costs
amounted to EUR672 million in 2024, EUR 4
million higher than 2023.
Prudent management and control of operating
expenses helped to keep costs broadly level with
the prior year, allowing us to increase investment
in digitalisation and further optimisation of the
organisation. These investments are critical to our
ability to deliver future growth and further bottom-
line improvements.
EBITDA and EBITDA margin
The improved EBITDA was the result of flow-
through from the improvement in gross profit and
disciplined cost control across S&D costs and
administrative costs.
Financial items and foreign exchange
Financial items (net) amounted to negative
EUR 32 million, an improvement of EUR 30
million from 2023 (EUR -62 million).
This decrease included a reduction in foreign
exchange losses. In addition, interest expenses
decreased, driven by the issuance of shares
to the new minority shareholder, CVC Funds,
the proceeds from which were used to reduce
debt financing.
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Statements Financial statements 55PhilanthropyIntroduction Engaged ownership Financial Performance
Tax and net profit
Tax for 2024 amounted to EUR 56 million,
compared to EUR 22 million in 2023, resulting
inan effective tax rate of 20.3%, up from 10.4%
in2023.
Net profit for the year from continuing business
amounted to EUR 197 million (EUR 152 million
in 2023).
Discontinued operations via divestments
During the year, the Hempel A/S Group decided
to sharpen focus in the Decorative segment
by concentrating on its full-service businesses,
and successfully completing the divestment
of J.W. Ostendorf and Renaulac.
This transition included the transfer of a produc-
tion site in Germany, stores in France, around
500 skilled colleagues and an established port-
folio of customers to the new owner.
Financial position and cash flow
Total assets
Total assets ended the year 2024 at EUR 3,236
million which is an increase from EUR 3,066
million on 31 December 2023.
Non-current assets amounted to EUR 2,114 million
in 2024, an increase of EUR 219 million from 2023.
Current assets amounted to EUR 1,122 million
in 2024, a decrease of EUR 49 million from 2023.
The decrease was driven by lower trade receiv-
able balances.
Cash flows from operating activities
Cash flows from operating activities amounted
to EUR 240 million in 2024, up from EUR
135 million in 2023. The higher cash flow from
operating activities was mainly driven by the
positive development in operating profit.
Cash flows from investing activities
Cash outflows from investing activities amounted
to negative EUR 282 million in 2024, compared
to negative EUR 99 million in 2023.
Investments in 2024 were driven specifically by
financial investments in the Hempel Foundation
and Hempel Invest A/S of EUR 136 million in
2024.
When evaluating traditional intangible and tan-
gible investments (property, plant and equipment)
there was no noticeable shift from 2023.
Subsequent events
No events occurred after the balance
sheet date that could have a material
impact on the company’s financial results,
assets, liabilities or equity.
Free cash flow
Free cash flow amounted to negative EUR 42
million in 2024 which was a decrease of EUR 78
million (EUR 36 million in 2023).
The decrease is attributable to the above
mentioned investing activities which more than
offset the improvements made in operating
activities.
Cash flows from financing activities
Cash flows from financing activities totaled
EUR 52 million, which was an increase of EUR
37 million (EUR 15 million in 2023). The slight
change in financing covers the proceeds from
CVC and the subsequent repayment of debt.
2025 outlook
In 2025, the Hempel Foundation Group will
continue our journey to grow the Hempel A/S
Group and consolidate the financial solidity
of the Hempel Foundation Group in general.
We expect to see single-digit organic revenue
growth and an EBITDA margin above 17%.
→Flowerpecker Sun Bird in
Nyungwe National Park, Rwanda.
Photo: Scott Ramsay
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Statements Financial statements 56PhilanthropyIntroduction Engaged ownership Financial Performance
Hempel Foundation’s
financial results
Financial result of Hempel Foundation
Net financial income amounted to EUR 21 million
in 2024 compared to EUR 27 million in 2023.
The development can be explained by a lower
return from financial investments.
The parent company’s net profit before tax was
EUR 15 million in 2024 compared to EUR 12
million in 2023.
Investments
Investments in subsidiaries amounted to EUR
999 million as of 31 December 2024 compared
to EUR 551 million as of 31 December 2023.
Total assets
Total assets for the parent company amounted
to EUR 1,222 million as of 31 December 2024
compared to EUR 778 million as of 31 December
2023. The increase is related to the dilution gain
from the sale of shares in the Hempel A/S Group
to CVC.
Outlook
Hempel Foundation (parent and associated
activities) expects a result, when excluding finan-
cial investments, at the same level as in 2024.
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Statements Financial statements 57PhilanthropyIntroduction Engaged ownership Financial Performance
Board of DirectorsManagement
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Financial statements 59PhilanthropyIntroduction Engaged ownership Statements
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Financial statements 60PhilanthropyIntroduction Engaged ownership Statements
CVR No 33 77 12 31
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Financial statements 61PhilanthropyIntroduction Engaged ownership Statements
Consolidated financial statements
Notes
1. Basis of preparation
1.1 General accounting policies
. . . . . . . . . . . . . . . . . . . . . . . . . . 68
1.2 Significant accounting estimates and judgements
. . . . . . 71
2. Results for the year
2.1 Revenue
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
2.2 Employee costs
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
2.3 Other operating income and expenses
. . . . . . . . . . . . . . . . 76
2.4 Special items
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
2.5 Income tax, tax assets and liabilities
. . . . . . . . . . . . . . . . . . . 77
3. Operating assets and liabilities
3.1 Intangible assets
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
3.2 Property, plant and equipment
. . . . . . . . . . . . . . . . . . . . . . . 85
3.3 Leases
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
3.4 Inventories
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
3.5 Trade receivables
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
3.6 Pensions and other post-employment
benefit obligations
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
3.7 Provisions
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
3.8 Other liabilities
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
4. Capital structure and financing items
4.1 Base capital and grants
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
4.2 Borrowings
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
4.3 Financial risks
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
4.4 Financial instruments
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
4.5 Financial income and expenses
. . . . . . . . . . . . . . . . . . . . . . 101
4.6 Discontinued operations
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
5. Other disclosures
5.1 Fee to the auditors appointed at the General Meeting
. . 103
5.2 Adjustment for non-cash items
. . . . . . . . . . . . . . . . . . . . . . 103
5.3 Contingent liabilities and other commitments
. . . . . . . . . 103
5.4 Events after the reporting period
. . . . . . . . . . . . . . . . . . . . . 104
5.5 Related parties
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
5.6 The Hempel Foundation Group
. . . . . . . . . . . . . . . . . . . . . . 105
5.7 Financial definitions
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Primary statements
Consolidated statement of profit and loss . . . . . . . . . . . . . . . 64
Consolidated statement of comprehensive income
. . . . . . . 64
Consolidated statement of financial position
. . . . . . . . . . . . . 65
Consolidated statement of changes in equity
. . . . . . . . . . . . 66
Consolidated cash flow statement
. . . . . . . . . . . . . . . . . . . . . . 67
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 63PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
Consolidated statement of profit and loss Consolidated statement of comprehensive income
Note (EUR m) 2024 2023
1
2.1 Revenue 2,185 2,172
Production costs - 1,237 - 1,270
Gross profit 948 902
Sales and distribution costs - 502 - 520
Administrative costs - 170 - 148
2.3 Other operating income 3 1
2.3 Other operating expenses - -
Operating profit 279 234
4.5 Financial income 74 70
4.5 Financial expenses - 106 - 132
Profit before tax 247 172
2.5 Income tax - 50 - 20
Net profit for the year from continuing operations 197 152
4.6 Net loss for the year from discontinued operations - 90 - 72
Net profit for the year - 107 80
Attributable to:
Equity holders of the Hempel Foundation 78 71
Non-controlling interests 29 9
Net profit for the year 107 80
Note (EUR m) 2024 2023
1
Net profit for the year 107 80
Other comprehensive income
Items that may be reclassified to profit or loss:
Exchange rate differences on translation of foreign operations and hyperinflation 57 1
4.4 Value adjustment of hedges 3 - 5
2.5 Tax on other comprehensive income - 6 - 1
Items that will not be reclassified to profit or loss:
3.6 Remeasurements of defined benefit pension obligations 2 - 1
2.5 Tax on other comprehensive income - -
Other comprehensive income of the year, net of tax 56 - 6
Total comprehensive income for the year 163 74
Attributable to:
The Hempel Foundation 131 67
Non-controlling interests 32 7
Total comprehensive income for the year 163 74
1
2023 has been restated to reflect the classification as a discontinued operation of the Hempel A/S Group's Decorative
business in Germany and France – see note 4.6 Discontinued operations for further information.
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 64PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
Consolidated statement of financial position
31 December 2024
Note (EUR m) 2024 2023
3.1 Intangible assets 793 761
3.2 Property, plant and equipment 595 606
3.3 Right-of-use assets 92 106
Other financial assets 507 307
3.6 Defined benetfit pension plan surpluses 4 2
2.5 Deferred tax assets 123 113
Total non-current assets 2,114 1,895
3.4 Inventories 336 332
3.5 Trade receivables 451 505
Income tax receivables 23 18
Prepayments 20 18
Other receivables 63 75
Cash 229 223
Total current assets 1,122 1,171
Total assets 3,236 3,066
Note (EUR m) 2024 2023
4.1 Share capital / Capital base 5 5
Translation reserve 27 - 25
Cash flow hedge - 2 - 4
Reserve for future grants 40 30
Retained earnings 1,293 881
Equity belonging to the Hempel Foundation 1,362 887
Non-controlling interests 303 57
Total equity 1,665 944
4.2 Borrowings 582 1,069
3.3 Lease liabilities 67 71
3.7 Provisions 55 36
3.6 Pension and similar obligations 22 21
2.5 Deferred tax liabilities 70 77
Total non-current liabilities 796 1,275
4.2 Borrowings 76 58
3.3 Lease liabilities 29 30
Trade payables 317 337
Deferred income 7 8
3.7 Provisions 16 10
Income tax payables 44 41
3.8 Other liabilities 286 365
Total current liabilities 775 848
Total liabilities 1,571 2,123
Total equity and liabilities 3,236 3,066
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 65PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
Consolidated statement of changes in equity
Note (EUR m) Capital
base
Retained
earnings
Reserve for
future grants
Translation
reserve
Cash flow
hedges
Total other
comprehensive
income
Non-controlling
interests
Total equity
2024
Balance at beginning of the year 5 882 30 - 25 - 4 - 29 57 944
Net profit - 41 37 - - - 29 107
Other comprehensive income - - 1 - 52 2 54 3 56
Total comprehensive income - 40 37 52 2 54 32 163
Capital contribution - - - - - - 600 600
Transaction with non-controlling interests
1
Dividends - - - - - - - 13 - 13
Grants, net - - - 27 - - - - - 27
Other adjustments - - 2 - - - - - - 2
4.1 Balance at the end of the year 5 1,293 40 27 - 2 25 303 1,665
2023
Balance at the beginning of the year 5 845 30 - 25 - - 25 28 882
Opening adjustments to IFRS - 5 - - - - - 5
Balance at beginning of the year 5 850 30 - 25 - - 25 28 887
Net profit - 48 23 - - - 9 80
Other comprehensive income - - - - - 4 - 4 - 2 - 6
Total comprehensive income - 48 23 - - 4 - 4 7 74
Dividends/grants - - - - - - - 5 - 5
Grants, net - - - 23 - - - - - 23
Other adjustments - - 16 - - - - 27 11
4.1 Balance at the end of the year 5 882 30 - 25 - 4 - 29 57 944
1
Difference between proceeds and carrying amount of the non-controlling interests’ proportion of the net asset for interests sold.
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 66PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
Consolidated cash flow statement
Note (EUR m) 2024 2023
Cash flows from financing and grant-making activities
4.4 Repayment of lease liabilities - 32 - 38
Proceeds from borrowings 317 188
Repayment of borrowings - 788 - 105
Transactions with shareholders:
Proceeds of issue of equity 600 -
Paid out grants - 27 - 23
4.1 Dividend distributed to and other transactions with non-controlling interests - 18 - 7
Total cash flows from financing and grant-making activities 53 15
Net cash flow 9 51
Cash beginning of year 223 186
Exchange adjustment - 3 - 14
Cash end of year 229 223
Note (EUR m) 2024 2023
Cash flows from operating activities
Operating profit 279 235
Operating profit from discontinued operations - 81 - 57
5.2 Adjustment for non-cash items 209 172
Total cash flows from operating activities before financial items, tax
and changes in working capital 407 350
Changes in working capital:
Change in receivables 16 - 62
Change in inventories - 26 1
Change in trade payables, other payables etc. - 36 - 26
Total change in working capital - 46 - 87
Total cash flows from operating activities before financial items and tax 361 263
Income tax paid - 75 - 62
Interest received 22 23
Interest paid - 69 - 90
Total cash flows from operating activities 240 135
Cash flows from investing activities
Purchase of property, plant and equipment - 64 - 72
Purchase of other financial investments - 194 -
Purchase of intangible assets - 32 - 34
Sale of property, plant and equipment 3 1
Divestment of enterprises 4 6
Total cash flows from investing activities - 284 - 99
Free cash flow - 44 36
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 67PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
1 Basis of preparation
Introduction
The consolidated financial statements of Hempel
Foundation Group for the period 1 January
– 31 December 2024 comprise Hempel
Foundation and its subsidiaries (the Hempel
Foundation Group).
The Board of Directors considered and approved
the 2024 Annual Report of Hempel Foundation
on 21 May 2025. The Annual Report will be
submitted for approval at the Annual General
Meeting on 21 May 2025.
Accounting policies
The consolidated financial statements of the
Hempel Foundation Group have been prepared
in accordance with the IFRS accounting
standards as endorsed by the EU and additional
Danish disclosure requirements applying to
entities of reporting class C for large companies.
The notes are grouped in sections and include
the relevant accounting policies. The Hempel
Foundation Group’s significant accounting
estimates and judgements are described in
note 1.2 Significant accounting estimates and
judgements.
Basis of measurement
The consolidated financial statements have been
prepared under the historical cost basis, except
for derivative financial instruments and assets
held for sale that are measured at fair value.
The accounting policies have been applied
consistently in the preparation of the
consolidated financial statements and for the
comparative figures.
Discontinued operations
Discontinued operations are excluded from the
results of continuing operations and presented
as a single amount in profit and loss after tax
from discontinued operations in the statement
of profit and loss. For discontinued operations,
comparatives are restated in the statement
of profit and loss. Refer also to note 4.6
Discontinued operations.
Applying materiality
The consolidated financial statements are
a result of processing large numbers of
transactions and aggregating those transactions
into classes according to their nature or function.
The transactions are presented in classes
of similar items in the consolidated financial
statements. If a line item is not individually
material, it is aggregated with other items of
a similar nature in the consolidated financial
statements or in the notes. Management
provides specific disclosures required by IFRS
unless the information is not applicable or is
considered immaterial to the decision making of
the primary users of these financial statements.
New standards, interpretations and
amendments adopted
The Hempel Foundation Group applied certain
standards, interpretations and amendments,
which are effective for annual periods beginning
on or after 1 January 2024: Amendments to
IAS 1 ‘Presentation of Financial Statements’,
IAS 7 ‘Statement of Cash Flows’, IFRS 7
‘Financial Instruments: Disclosures’ and IFRS 16
‘Leases’. The amendments listed above did not
have any impact on the amounts recognised in
current or prior periods and are not expected to
significantly affect future periods.
New standards and interpretations not
yet adopted
New accounting standards and interpretations
that have been issued, but are not mandatory
for the 31 December 2024 reporting period,
have not been early adopted by the Hempel
Foundation Group. These standards are
not expected to have a material impact on
recognition or measurement for the Hempel
Foundation Group in future reporting periods,
or on foreseeable future transactions.
IFRS 18 ‘Presentation and Disclosure in Financial
Statements’ replaces IAS 1 ‘Presentation of
Financial Statements’ and is effective for reporting
periods beginning on or after 1 January 2027.
The Hempel Foundation Group is working to
identify the impact of IFRS 18 on the primary
financial statements and the note disclosures.
Basis of consolidation
The consolidated financial statements comprise
the parent company, Hempel Foundation, and
entities controlled by Hempel Foundation
(subsidiaries). Control is achieved when the
Hempel Foundation Group is exposed to, or has
a right to variable returns from, its involvement
with the investee and has the power to affect
those returns through its power over the investee.
Subsidiaries are consolidated from the date
on which control commences until the date on
which control ceases.
Control is usually achieved by directly or
indirectly owning, or in other ways controlling,
more than 50% of the votes or other rights
through agreements of management control.
De facto control and other potential voting rights
at the balance sheet date are also considered
when determining whether control is achieved.
Consolidation is performed by summarising
the financial statements of the parent company
1.1 General accounting policies
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 68PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
and its subsidiaries. On consolidation, items of
a uniform nature are combined. Elimination is
made of intercompany income and expenses,
shareholdings, dividends and intra-group
balance accounts as well as of realised and
unrealised gains and losses on transactions
between the consolidated enterprises.
When the Hempel Foundation Group loses
control of a subsidiary, it derecognises assets
(including goodwill), liabilities, the carrying
amount of any non-controlling interests and
components of other comprehensive income
attributable to the non-controlling interests.
Any gain or loss is recognised within other
operating income and expenses.
The acquisition method of accounting is used
to account for business combinations by the
Hempel Foundation Group.
Rounding
In general, rounding may cause variances in sums
and percentages in the Annual Report.
Non-controlling interests
Non-controlling interests’ share in the results
and equity of subsidiaries is shown separately
in the consolidated statement of profit and loss,
statement of comprehensive income, statement
of financial position and statement of changes in
equity, respectively.
The Hempel Foundation Group treats
transactions with non-controlling interests that
do not result in a loss of control as transactions
with equity owners of the Hempel Foundation
Group. A change in ownership interest results in
an adjustment between the carrying amounts
of the controlling and non-controlling interests
to reflect their relative interests in the subsidiary.
Any difference between the amount of the
adjustment to non-controlling interests and any
consideration paid or received is recognised in
retained earnings within equity.
Where a non-controlling interest holds a put
option to sell the remaining minority shares
to the Hempel Foundation Group, a liability is
recognised in the statement of financial position
at fair value calculated as the present value of
the exercise price of the option. Any subsequent
adjustment to the fair value of the put option
is recognised directly within equity under
retained earnings.
Presentation currency
The functional currency of the parent company
is DKK, however the consolidated financial
statements are presented in million EUR as the
Hempel Foundation Group operates in a global
environment with international stakeholders.
Translation of transactions and balances in
foreign currencies
Items included in the financial statements of
each of the Hempel Foundation Group’s entities
are measured using the currency of the primary
economic environment in which the entity
operates (functional currency). Transactions
denominated in other currencies than the
functional currency are considered transactions
denominated in foreign currencies.
Transactions in foreign currencies are translated
into the functional currency defined for each
company using the exchange rates prevailing at
the date of transaction.
Receivables, payables and other monetary
items in foreign currencies are translated at
the exchange rates on the balance sheet date.
Foreign exchange differences arising between
the exchange rates at the transaction date
and at the date of payment are recognised
as foreign exchange gains and losses in the
statement of profit and loss as financial income
or financial expenses.
Non-monetary items recognised in foreign
currencies are measured at the transaction date
rates and are not retranslated subsequently.
Translation of Group companies
The results and financial position of foreign
operations with a functional currency other
than EUR (and which is not the currency of a
hyperinflationary economy) are translated into
the presentation currency (EUR) as follows:
– assets and liabilities are translated at the
exchange rate on the balance sheet date
– income and expenses in profit and loss and
in the statement of comprehensive income
are translated at monthly average exchange
rates (unless this is not a reasonable
approximation of the rates prevailing on the
transaction dates, in which case income
and expenses are translated at the dates of
the transactions)
– share capital denominated in a currency
that differs from the presentation currency
of the consolidated financial statements is
translated at historical cost
– all resulting exchange differences are
recognised in other comprehensive income
and attributed to a separate translation
reserve in equity. However, where the foreign
entity is not wholly-owned, a proportion of the
translation difference is allocated to the non-
controlling interests.
Foreign currency translation adjustments of a
loan to or borrowings from subsidiaries which
are neither planned nor likely to be settled in
the foreseeable future, and which are therefore
1.1 General accounting policies — continued
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 69PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
considered to form part of the net investment in
the subsidiary, are recognised directly in other
comprehensive income under the separate
translation reserve within equity. When a foreign
operation is derecognised, the associated
cumulative exchange rate differences are
reclassified to profit or loss, as part of the gain
or loss on sale. Repayment of loans considered
a part of the net investment in a subsidiary is
not considered a disposal when the Hempel
Foundation Group retains its proportionate
ownership interests, thus the cumulative
exchange difference is not reclassified to profit
and loss.
Goodwill and fair value adjustments arising on
the acquisition of a foreign operation are treated
as assets and liabilities of the foreign operation.
Hyperinflation
In foreign subsidiaries that operate in hyper-
inflationary economies, income and expenses
are translated into the presentational currency
(EUR) at the exchange rate at the balance sheet
date. Prior to translating the financial statements
of foreign operations in hyperinflationary
economies, the income statement and non-
monetary balance sheet items are restated
taking into account changes in the general
purchasing power of the functional currency
based on the inflation up to the balance sheet
date (‘inflation adjustment’). The effect of the
inflation adjustment is recognised in Other
comprehensive income within the translation
reserve. In the income statement, gain/loss on
the net monetary position in the foreign entities
is recognised as financial income or expense.
The assessment as to when an economy is
hyperinflationary is based on qualitative as well
as quantitative factors, including whether the
accumulated inflation over a three-year period
exceeds 100%. Currently, Turkey and Argentina
are considered hyperinflationary economies
and thus the Hempel A/S Group’s operations
in Argentina and Turkey have been remeasured
in accordance with the principles described,
applying the national Consumer Price Index
(CPI) of Argentina and Turkey, respectively, for
the inflation adjustment.
Classification of operating expenses in the
statement of profit and loss
Production costs
Production costs comprise costs incurred to
generate revenue for the year. Costs comprise
raw materials, consumables, direct labour
costs and indirect production costs, such as
maintenance, amortisation and depreciation, as
well as costs for operation, administration and
management of factories.
Production costs also include research
and development costs that do not qualify
for capitalisation as well as amortisation of
capitalised development costs (except for
amortisation of business application software).
Write-downs of inventory are also included.
Sales and distribution costs
Sales and distribution costs comprise costs
incurred to distribute products and for sales
campaigns, including costs for sales and
distribution staff, advertising costs, depreciation
of sales equipment and amortisation of customer
relationships.
Administrative costs
Administrative costs comprise costs incurred
for management and administration of the
Hempel Foundation Group, including costs for
administrative staff and management as well as
office costs, depreciation and write-downs for
bad debt. Amortisation of brands and software
business applications are also recognised in
administrative costs.
Cash flow statement
The statement of cash flows is presented using
the indirect method. The statement of cash
flows for the Hempel Foundation Group shows
the cash flows for the year, broken down into
operating, investing and financing activities and
changes in the Hempel Foundation Group’s cash
and cash equivalents from the beginning of the
year to the end of the year. The statement of cash
flows cannot be immediately derived from the
published financial records.
Cash flow from operating activities
Cash flow from operating activities is calculated
as the operating profit or loss for the year
adjusted for changes in working capital, non-
cash items such as depreciation, amortisation
and impairment losses and provisions, as well as
interest and tax paid.
Cash flow from investing activities
Cash flow from investing activities comprises
cash flows from purchases and disposals of
intangible assets, property, plant and equipment
and acquisitions/divestments of enterprises.
Cash flow from financing activities
Cash flow from financing activities comprises
cash flows from the raising and repayment
of principal long-term and short-term debt,
including repayment of lease liabilities as well as
payments to and from shareholders.
Cash flow in currencies other than the
functional currency
Cash flow in currencies other than the functional
currency are translated at the average exchange
rates for the month, unless these differ
significantly from the rates at the transaction
date, in which case the exchange rate at the
transaction date is applied.
Cash
Cash comprises cash at hand and bank deposits.
1.1 General accounting policies — continued
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 70PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
1.2 Significant accounting estimates and judgements
In preparation of the consolidated financial
statements, management is required to make
various accounting judgements and estimates
that affect the reported amounts of assets,
liabilities, income and expenses, including the
related disclosures. A degree of uncertainty is
involved in carrying out these judgements and
estimates which could result in adjustments to
the carrying amount of assets and liabilities in
future periods.
The judgements, estimates and related
assumptions made are based on historical
experience and other factors that management
considers to be reasonable under the given
circumstances. Estimates and judgements are
reviewed on an ongoing basis.
The Hempel Foundation Group’s significant
accounting estimates and judgements are
described below.
Significant accounting estimates
and judgements
The significant accounting estimates are those
that have a significant risk of resulting in a material
adjustment to the carrying amounts of assets
and liabilities in the following reporting period.
Warranties
The Hempel Foundation Group generally offers
warranties for its products and receives claims
under these warranties. Management makes
estimates regarding the related provisions,
including the probability of pending legal
disputes and future litigation outcomes.
When determining the most likely outcome,
management considers input from internal
and external counsel, historical warranty claim
information, as well as recent trends that might
suggest that historic cost levels do not accurately
represent an approximation of the costs of future
claims. The assumptions made in relation to the
current period are consistent with those in the
prior year.
Factors that could impact the estimated amounts
include whether the claims are deemed valid,
to which extent the claims are covered by the
product warranty and estimates of the costs of
coating and other associated costs for remediating
any product failure. Reference is made to note
3.7 Provisions for information about the Hempel
Foundation Group’s warranty provision.
The Hempel Foundation Group has taken out
insurance against product failures. The product
failure insurance is, to a certain extent, linked
to the size and nature of claims. This reduces
the overall exposure to warranty claims and
the potential net impact on profit and loss
from claims.
Uncertain tax positions
The Hempel Foundation Group has activities
and subsidiaries in many different countries,
and therefore is subject to income taxes in
tax jurisdictions around the world. Uncertain
tax positions relate to uncertainty in the
interpretation of tax legislation in the countries
the Hempel Foundation Group operates in.
Significant estimates and judgements are
required when determining the worldwide
accrual for income taxes, deferred income tax
assets and liabilities, and provision for uncertain
tax positions.
In the course of conducting business globally,
transfer pricing disputes with tax authorities may
occur, and management’s judgement is applied
to assess the possible outcome of such disputes.
The Hempel Foundation Group believes that
the provision made for uncertain tax positions is
adequate. However, due to the uncertainty, there
is a possibility that, on conclusion of open tax
matters at a future date, the final outcome may
differ significantly. Reference is made to note 2.5
Income tax, tax assets and liabilities.
Valuation of deferred tax assets
The deferred tax assets comprise carry-forward
tax losses expected to be utilised and temporary
differences.
The Hempel Foundation Group recognises
deferred tax assets, including the expected
value of carry-forward tax losses, based on an
assessment of the recoverability of the deferred
tax assets.
The assessment of the recoverability of the
deferred tax assets involves estimates by
management as to the likelihood of the utilisation
of the deferred tax assets within a foreseeable
future. This depends on a number of factors,
including whether there will be sufficient taxable
profits available in future periods, against which
the carry-forward tax losses can be utilised. In the
event that actual future taxable profits generated
are less than expected, and depending on the tax
strategies that the Hempel Foundation Group may
be able to implement, impairment of the deferred
tax assets may be required. Reference is made to
note 2.5 Income tax, tax assets and liabilities.
Impairment test of goodwill
In performing the annual impairment test,
management assesses whether the groups
of Cash Generating Units (CGUs) to which
the goodwill relates will be able to generate
sufficient positive net cash flows to support
their carrying amount together with other
net assets of the respective groups of CGUs.
This assessment is based on estimates of
expected future cash flows. The cash flows
are derived from the forecast for the next five
years and do not include restructuring activities
that the Hempel Foundation Group is not yet
committed to or significant future investments
that will enhance the performance of the assets
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 71PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
of the groups of CGUs being tested. The
recoverable amount is sensitive to the discount
rate used, as well as the expected future cash
inflows and the terminal growth rate used for
extrapolation purposes. The key assumptions
used to determine the recoverable amount for
the different groups of CGUs are disclosed and
further explained in note 3.1 Intangible assets.
Impairment test of brand
In performing the annual impairment test of the
Farrow & Ball brand, management assesses
whether the brand will be able to generate
sufficient positive net cash flows to support the
carrying amount of the brand. The assessment
is performed using a relief-from-royalty method
based on expected future cash flows generated
from the royalty savings attributable to owning
the brand. The expected cash flows are based
on assumptions about the royalty rate, expected
future revenue and the discount rate. The key
assumptions used to determine the recoverable
amount of the brand are disclosed and further
explained in note 3.1 Intangible assets.
Significant accounting judgements
The significant judgements, apart from those
that involve estimations, are the judgements that
management made in the process of applying
the Hempel Foundation Group’s accounting
policies and that have the most significant effect
on the amounts recognised in the consolidated
financial statements.
Useful life of brands
Management has assessed that certain brands,
mainly the Farrow & Ball brand, have indefinite
useful life as there is no foreseeable limit to
the period over which the brand is expected
to generate net cash inflows, based on the
brand being well-established in its markets,
having existed for decades and having no legal,
regulatory, contractual, competitive, economic or
other factors limiting the useful life of the brand.
1.2 Significant accounting estimates and judgements — continued
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 72PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
2 Results for the year
Accounting policies
The Hempel A/S Group mainly generates
revenue from the sale of paints and coatings
(goods for resale and finished goods) based on
prices and conditions stated in the contracts
with customers. The primary revenue-generating
activity comprises sale of finished goods. In
addition, the Hempel A/S Group generates
a minor part of its revenue from provision of
technical services.
Revenue from sale of paints and coatings is
recognised when the related performance
obligation is satisfied by transferring control
of the promised goods to a customer. The
Hempel A/S Group’s customer contracts usually
include only a single performance obligation.
Control of the paints and coatings is obtained
when the goods are transferred to the customer.
Where the Hempel A/S Group provides
technical services, including advice, training,
project oversight and surface management
services, etc., revenue is recognised over time
as the services are rendered.
Revenue from contracts with customers is
measured at an amount that reflects the con-
sideration to which the Hempel A/S Group
expects to be entitled in exchange for those
goods and services (transaction price), which
normally comprises the price specified in
the contract, net of discounts and customer
bonuses.
The Hempel A/S Group offers various discounts,
including rebates, bonuses, volume discounts
and pay ments to customers depending on the
nature of the customer and business. These
discounts are considered variable consideration.
Bonuses and discounts payable to a customer
are accrued for as the related performance
obligations are satisfied and revenue is
recognised. Historical experience is used to
estimate and provide for the discounts, using the
expected value method. Variable consideration
related to discounts is only recognised as
revenue to the extent that it is highly probable
that a significant reversal will not occur in a
later period. In the case of expected returns, a
refund liability and a right to the returned goods
(included in other current assets) are recognised
for the products expected to be returned.
Revenue
The vast majority of the Hempel A/S Group’s
performance obligations are satisfied within one
year or less. Amounts for remaining performance
obligations (order backlog) are therefore not
disclosed in accordance with the practical
expedient in IFRS 15.121.
Payments from customers are due depending
on the type of customer and local business
practices, though typically within 30-90 days.
Longer credit terms are provided in certain
countries, though normally not exceeding
180 days. Retail payments are normally due
immediately after control of the goods has
transferred to the customer. Accordingly, no
significant element of financing is present.
Disaggregation of revenue
The following table displays revenue disaggre-
gated into sale of goods per geographical region:
2.1 Revenue
Revenue disaggregated into sale of goods per
customer category:
Due to changes in the organisational
structure during 2024, revenue from Energy
& Infrastructure is now grouped together, in
contrast to 2023 where they were disclosed
seperately. Reference is made to note 3.1
Intangible assets for a description of the
organisational changes.
(EUR m) 2024 2023
EMEA 1,225 1,159
Asia-Pacific 700 750
Americas 260 263
Total revenue 2,185 2,172
(EUR m) 2024 2023
Decorative 653 610
Marine 709 725
Energy &
Infrastructure 823 835
Other - 2
Total revenue 2,185 2,172
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 73PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
2.2 Employee costs
Accounting policies
Employee costs include wages and salaries,
pen sions, social security contributions, annual
leave and sick leave, bonuses and non-monetary
benefits. Employee costs are recognised in the
financial year in which the associated services
are rendered by employees of the Hempel
Foundation Group.
Costs for long-term employee benefits provided
by the Hempel Foundation Group are recognised
in the period in which they are earned.
(EUR m) 2024 2023
Employee costs:
Wages and salaries 379 384
Pensions – defined contribution plans 22 21
Pensions – defined benefit plans 2 1
Other social security contributions 24 23
Other employee costs 23 24
Total employee costs for the year 450 453
Average number of full-time employees 6,951 6,801
Staff costs have been recognised in the profit and loss statement as follows:
Production costs 140 135
Sales and distribution costs 229 232
Administrative costs 81 86
Total employee costs in the profit and loss statement 450 453
For further information about the Hempel
Foundation Group’s pension plans, reference
is made to note 3.6 Pensions and other post-
employment benefit obligations. Equity-settled
share-based payment transactions are measured
at fair value determined at the date of grant
and recognised as an expense over the vesting
period with a corresponding increase in equity.
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 74PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
2.2 Employee costs — continued
Key management compensation
Together with the Board of Directors, key
management personnel comprise individuals in
the Executive Board and the Executive Group
Management (EGM). Registrered Executive
Management is a part of the EGM and the EGM
consists of 11 individuals (2023: 8 individuals).
Remuneration of the EGM includes a fixed salary,
company car and other standard fringe benefits,
as well as bonus payments in the form of an
annual cash bonus and a long-term cash-based
incentive scheme of specific financial targets for
organic growth, EBITDA and working capital.
The annual cash bonus cannot exceed 70-100%
of the individual’s fixed salary.
The annual cash bonus payment is contingent
upon the fulfilment of ESG targets, including
climate targets, and the realisation of specific
financial targets.
During the year, a management incentive plan
was implemented whereby members of the
EGM in Hempel A/S Group and certain other
senior managers were offered the opportunity to
purchase, at fair value, shares and warrants of the
Hempel A/S Group.
The arrangement is classified as an equity-
settled arrangement. As the participants in the
plan paid fair value for the shares and warrants
purchased, no share-based payment expense
was incurred by the Company as a result of
these equity-settled transactions. If a participant
ceases to be an employee of the Company,
the provisions of the plan may permit or require
the Company to repurchase the leaver’s
shareholdings for either the original cost or fair
value at the time of repurchase, depending
upon the circumstances. See note 4.1 for
further information.
A long-term cash-based incentive scheme
comprised of rolling three-year cash-based
bonus programmes, was discontinued for the
EGM and certain other senior managers during
the year. All programmes were subject to vesting
criteria based on a number of factors, including
the realisation of minimum financial targets
for the nominal EBITDA accumulated over the
three-year period. The outcome was calculated
at the end of the three-year programme period.
The long-term cash incentive programme
payment cannot exceed 110-220% of the
individual’s fixed annual salary. The Board of
Directors determines annually whether to
instigate new programmes and, if so, the scope
and objectives of said programmes.
All programmes were subject to vesting criteria
based on a number of factors, including the
realisation of minimum financial targets for the
nominal EBITDA accumulated over the three-
year period. The outcome was calculated at the
end of the three-year programme period. The
long-term cash incentive programme payment
cannot exceed 110-120% of the individual’s fixed
annual salary. Final payments for the relevant
participants under this scheme were made in
the year and are included in the table on the
previous page.
The Board of Directors determines annually
whether to instigate new programmes and, if so,
the scope and objectives of said programmes.
The compensation paid or payable to the key
management personnel for employee services
is shown in the table to the left. Total remunera-
tion for Registered Executive Management and
Board of Directors amounted to EUR 16 million
in 2024 (2023: EUR 18 million).
Salaries and remuneration for the Hempel Foundation Group
Executive Team and Board of Directors (EUR t)
Board & directors in
the Hempel Foundation*
Other key management** Total
2024 2023 2024 2023 2024 2023
Remunerations, salaries and other costs 1,304 1,347 8,000 9,600 9,304 10,947
Committees and other costs 206 - 600 - 206 -
Pensions – defined contribution plans - - - 400 600 400
Severance pay - - 2,000 1,800 2,000 1,800
Other long-term benefits - - 3,900 5,400 3,900 5,400
Total 1,510 1,347 14,500 17,200 16,010 18,547
* With reference to section 98 b subsection 2 of the Danish Financial Statement Act, the remuneration for the Executive Management and the Board of Directors are disclosed together,
as the Executive Management consists of one member.
** Other key management consists of key management and the Board of Directors of Hempel A/S Group.
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 75PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
2.3 Other operating income and expenses 2.4 Special items
Accounting policies
Other operating income and expenses comprise
items of a secondary nature to the core activities
in the Hempel Foundation Group, including
gains and losses on the sale of intangible assets
and property, plant and equipment and certain
government grants.
Government grants are recognised in other
operating income at fair value where there
is a reasonable assurance that the grant will
be received and Hempel Foundation Group
will comply with all attached conditions.
Government grants relating to costs are deferred
and recognised in the statement of profit and
loss and presented in the same line item as
the relating costs, over the period necessary
to match them with the costs that they are
intended to compensate.
Grants received for the acquisition of property,
plant and equipment are recognised as deferred
income, which is recognised in the statement of
profit and loss under other operating income on a
systematic basis over the useful life of the asset.
Special items include significant income
and expenses of a special nature relative to
the Hempel A/S Group’s earnings-generating
activities, such as costs related to M&A
activities, integration of acquired businesses
and restructuring costs. Other significant
amounts of non-recurring nature are also
included in special items.
In 2023, special items comprised employee
redundancy costs and related costs in
connection with organisational changes.
Special items also included M&A related costs,
mainly consultancy costs and an insurance
settlement payment related to a past business
acquisition.
Due to the significant impact on the statement
of profit and loss, these non-recurring items of
special nature are disclosed separately in this
note. The special items are presented in the
statement of profit and loss within the functions,
shown in the table below.
Special items (EUR m) 2024 2023
Restructuring costs - 5
M&A and integration related costs - 5
Insurance settlement - - 3
Total special items - 7
(EUR m) 2024 2023
Production costs - 1
Sales and distribution costs - 3
Administrative costs - 3
Total special items - 7
Other operating income (EUR m) 2024 2023
Gain on sale of property, plant and equipment - 1
Other operating income 3 -
Total other operating income 3 1
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 76PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
2.5 Income tax, tax assets and liabilities
Income tax
Accounting policies
The income tax expense for the year is the tax
payable on the current year’s taxable income
based on the applicable income tax rate for each
jurisdiction, adjusted for changes in deferred tax
assets and liabilities attributable to temporary
differences and to unused tax losses, changes
due to changes in tax rates, adjustments to tax
from previous years and changes in provision for
uncertain tax positions.
The current income tax charge is calculated on
the basis of the tax laws enacted or substantively
enacted at the balance sheet date in the
countries where the parent company and its
subsidiaries operate and generate taxable
income. Management periodically evaluates
positions taken in tax returns with respect to
situations in which applicable tax regulation is
subject to interpretation. It establishes provisions,
where appropriate, on the basis of amounts
expected to be paid to the tax authorities.
Current tax payable and receivable are
recognised in the consolidated statement of
financial position as tax computed on the taxable
income for the year, adjusted for tax on taxable
income for prior years and for prepaid tax.
Current tax and changes in deferred tax are
recognised in profit and loss, except to the
extent that it relates to items recognised in
other comprehensive income or directly in
equity. In these cases, the tax is also recognised
in other comprehensive income or directly in
equity, respectively.
Uncertain tax positions are recognised where
the probability of the tax position being upheld
in individual cases is considered less than 50%.
Uncertain tax positions are assessed individually,
and the possible outcome is measured based
on management’s best estimate of the amount
required to settle the obligation. Uncertain tax
positions relate to various tax disputes, including
transfer pricing cases.
The Hempel Foundation Group has the option
to use section 3(4) of the Danish Corporation
Tax Act. Under these rules, the taxable income
of Hempel Invest A/S is considered to have
been earned by the Hempel Foundation Group
if the taxable income is distributed as a dividend
to the Hempel Foundation Group. Since the
Hempel Foundation Group’s taxable income is
regularly offset against grants for the year and tax
provisions for future grants, no deferred tax asset
or liability is recognised owned by the Hempel
Foundation Group.
Tax for the year (EUR m) 2024 2023
1
Tax for the year is specified as follows:
Tax on profit for the year - 50 - 21
Tax on equity - 6 - 1
Total tax for the year - 56 - 22
Tax on profit for the year is calculated as follows:
Current tax for the year - 72 - 59
Deferred tax for the year 23 41
Adjustment in respect of previous years - 1 - 3
Total tax on total comprehensive income - 50 - 21
Effective tax rate of the Hempel Foundation Group
Danish tax rate 22.0% 22.0%
Higher/(lower) tax rates of foreign subsidiaries - 1.6% - 4.8%
Permanent differences 0.5% 0.9%
Unrecognised deferred tax assets 5.3% 7.1%
Recognised deferred tax assets related to prior years - 6.6% - 3.8%
Adjustments in respect of previous years - 0.3% - 1.8%
Other adjustments (mainly changes in uncertain tax position) 0.1% - 8.5%
Withholding taxes etc. 1.9% 3.6%
Deduction for grants - 2.3% - 5.0%
Effective tax rate of the Hempel Foundation Group excluding hyperinflation 19.0% 9.8%
Hyperinflation 1.3% 0.6%
Effective tax rate of the Hempel Foundation Group 20.3% 10.4%
1
2023 has been restated to reflect the classification as a discontinued operation of Hempel A/S Group’s Decorative business in
Germany and France – see note 4.6 Discontinued operations for further information. Net loss before tax in 2023 for discontinued
operations was EUR 61 million whereas the tax expense was EUR 1 million.
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 77PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
2.5 Income tax, tax assets and liabilities — continued
Deferred tax
Accounting policies
Deferred income tax is provided in full, using
the liability method, on temporary differences
arising between the tax bases of assets and
liabilities and their carrying amounts in the
consolidated financial statements. However,
deferred tax liabilities are not recognised if they
arise from the initial recognition of goodwill.
Deferred income tax is also not accounted for
if it arises from initial recognition of an asset or
liability in a transaction other than a business
combination that, at the time of the transaction,
affects neither accounting profit nor taxable
profit or loss. Deferred income tax is calculated
using tax rates (and laws) that have been
enacted or substantially enacted by the end of
the reporting period and are expected to apply
when the related deferred income tax asset is
realised or the deferred income tax liability is
settled. Deferred tax is adjusted for elimination of
unrealised intra-group gains and losses.
Deferred tax recognised in the balance sheet (EUR m) 2024 2023
Deferred tax, beginning of year 36 - 5
Recognised in profit or loss 23 41
Adjustments in respect of previous years - 6 - 1
Deferred tax assets and liabilities at 31 December, net 53 36
Specification of deferred tax assets (EUR m) 2024 2023
Intangible assets 16 14
Property, plant and equipment 7 5
Other financial investments 1 0
Inventories 2 2
Trade receivables 2 1
Provisions and defined benefit pension obligations 30 27
Lease liabilities 1 1
Tax loss carryforwards 64 62
Deferred tax assets at 31 December 123 112
Specification of deferred tax liabilities (EUR m) 2024 2023
Intangible assets 40 38
Property, plant and equipment 2 4
Provisions and defined benefit pension obligations 28 35
Deferred tax liabilities at 31 December 70 77
Deferred tax assets are recognised if it is probable
that future taxable amounts will be available to
utilise those temporary differences and losses.
Deferred tax liabilities and assets are not
recognised for temporary differences
between the carrying amount and tax bases of
investments in foreign operations where the
Hempel Foundation Group is able to control
the timing of the reversal of the temporary
differences and it is probable that the differences
will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset
when there is a legally enforceable right to offset
current tax assets and liabilities and when the
deferred tax balances relate to the same taxation
authority. Current tax assets and tax liabilities are
offset where the entity has a legally enforceable
right to offset and intends either to settle on a
net basis, or to realise the asset and settle the
liability simultaneously.
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 78PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
The Hempel Foundation Group recognises
deferred tax assets, including the expected
value of tax loss carryforwards, based on an
assessment of the expected recoverability.
At 31 December 2024, the Hempel Foundation
Group recognised a deferred tax asset related
to tax loss carryforwards of EUR 64 million
(2023: EUR 62 million).
Management has considered future taxable
income and applied judgement in assessing
whether deferred income tax assets should be
recognised. The assessment of the recoverability
of the deferred tax assets depends on a number
of factors, including whether there will be
sufficient taxable profits available in future
periods in tax jurisdictions for which the tax loss
carryforwards can be utilised.
Assessment of the recoverability of the
deferred tax assets is based on taxable income
projections that contain estimates of, and tax
strategies for, the future taxable income, taking
into account the general market conditions,
recent financial performance of the individual
entities and the Hempel Foundation Group’s
approved business plan.
The projections are based on the Hempel
Foundation Group’s five-year forecast, though in
certain cases a longer forecast period is applied,
and are inherently subject to uncertainty, as the
realisation of the projections are dependent on
the outcome of future events. It is management’s
assessment that the forecast is achievable and
supports the capitalised deferred tax assets. In
making this assessment, business initiatives to
improve organic growth and taxable income are
considered together with expected allocation
of future taxable income based on the transfer
pricing policy in place.
The international tax reform –
Pillar Two model rules
The Pillar Two model rules apply for the
Hempel Foundation Group as of 1 January
2024. The current tax expense related to Pillar
Two income taxes amounts to EUR 1.7 million
for 2024. The Hempel Foundation Group
has applied the exception of not recognising
deferred tax assets and liabilities arising from the
implementation of the Pillar Two model rules.
2.5 Income tax, tax assets and liabilities — continued
Deferred tax not recognised in the balance sheet (EUR m) 2024 2023
Temporary differences 1 9
Tax loss carryforwards 44 50
Total tax asset not recognised 45 59
Out of tax loss carryforwards 0% (2023: 1%) expire within 1 year, and 0% (2023: 0%) within 5 years from the balance sheet date
and 15-20% after five years. The remaining tax loss carryforwards do not have an expiration date.
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 79PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
3 Operating assets and liabilities
3.1 Intangible assets
Amortisations and impairment losses included in profit and loss (EUR m) 2024 2023
Production costs 6 5
Sales and distribution costs 6 6
Administrative costs 17 23
Discontinued operations - 12
Total amortisation and impairment losses 29 46
Accounting policies
Goodwill
Goodwill is initially recognised in the statement
of financial position at cost and allocated to
groups of cash-generating units (CGUs) at
which goodwill is monitored. Subsequently,
goodwill is measured at cost less accumulated
impairment losses. Goodwill is not amortised.
Brands with an indefinite useful life
Brands acquired in a business combination are
initially recognised in the statement of financial
position at fair value and subsequently measured
at cost less accumulated impairment losses.
Brands which are considered to have an
indefinite useful life are not amortised, since
there is no foreseeable limit to the period over
which the brands are expected to generate net
cash inflows.
Software and software under development
Acquired software and developed software are
initially measured at cost and subsequently at
cost less amortisation and impairment losses.
Acquired software and developed software
are amortised on a straight-line basis over the
estimated useful life, which is 3-10 years, though
typically 5 years for ERP systems.
For software as a service (SaaS) arrangements,
implementation costs are capitalised only
where customisation and configuration of the
SaaS arrangement results in an intangible asset
controlled by the Hempel A/S Group. Where
customisation and configuration costs do not
result in an intangible asset, costs are either
expensed as incurred or alternatively over the
contract term when the received services are not
distinct from the SaaS solution.
Software under development is recognised at
cost less impairment losses. Software under
development is not amortised.
Customer relationships
Customer relationships acquired in a business
combination are initially recognised at fair value
and subsequently measured at cost less accu-
mulated amortisation and impairment losses.
Amortisation is calculated on a straight-line basis
over the estimated useful life, which is 5-12 years.
Other intangible assets
Other intangible assets comprise development
projects such as development of products or
processes, formulas and smaller brands.
Development projects are recognised as
intangible assets where they relate to products
or processes (other than software development
projects) that are clearly defined and identifiable,
and in respect of which technical feasibility,
sufficient resources and a potential future market
or development opportunity in the enterprise can
be demonstrated, and where it is the intention
to manufacture, market or use the product or
process in question. Development projects are
initially measured at cost, which comprises
expenses, including salaries, amortisation and
external costs, directly attributable to these
development projects.
Development projects are subsequently
measured at cost less amortisation and
impairment losses.
Development projects are amortised on a
straight-line basis over the estimated useful life,
which is 3-10 years.
Formulas and smaller brands are measured
at cost less accumulated amortisation and
impairment losses. The assets are amortised on
a straight-line basis over their estimated useful
lives. The amortisation period is 2-10 years.
Amortisation and impairment losses are included
as follows in the statement of profit and loss.
Research and development costs expensed
Research and development costs not eligible for
capitalisation are expensed in the period incurred
and included in the statement of profit and loss
within production costs. In 2024, this amounted
to EUR 36 million (2023: EUR 34 million).
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 80PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
Impairment of non-current assets
Goodwill, intangible assets with an indefinite
useful life and software under development that
is not subject to amortisation are tested annually
for impairment, or more frequently if events or
changes in circumstances indicate that they
might be impaired. Other assets are tested for
impairment whenever events or changes in
circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is
recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an
asset’s fair value less costs of disposal and value
in use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which
there are separately identifiable cash inflows that
are largely independent of the cash inflows from
other assets or groups of assets (CGUs).
Non-financial assets other than goodwill that
suffered an impairment are reviewed for possible
reversal of the impairment at the end of each
reporting period.
The goodwill has been re-allocated to the new
groups of CGUs described above based on a
relative value approach. This has been calculated
by determining the value in use of each CGU as a
proportion of the total value in use of the Hempel
Foundation Group, and using those percentages to
re-allocate the goodwill to the new groups of CGUs.
The carrying amount of goodwill re-allocated
to the new groups of CGUs is shown in the
table below to the right: Goodwill at time of
re-allocation.
Re-allocation of goodwill
In 2024, the Hempel A/S Group re-allocated
goodwill to align with the new organisational
structure announced in May 2024. The
re-allocation was carried out to reflect the
new internal management reporting and
consequently how goodwill is monitored.
Before the re-allocation of goodwill was carried
out, an impairment test was performed which
did not result in an impairment.
Previously, the Hempel A/S Group had four
commercial business units (Marine, Energy,
Infrastructure and Decorative) and one internal
business unit (Technology & Operations) and
goodwill was allocated to those units. Following
the reorganisation in May 2024, goodwill is
now monitored on the basis of the Hempel A/S
Group’s three commercial business units
(Marine, Energy & Infrastructure and Decorative).
The three key commercial business units
manage sales and are responsible for daily
contact with the customers.
Marine customers comprise both newbuilding
shipyards, ship owners requiring maintenance in
dry dock or at sea, and maintenance contractors.
Maintenance work relates to every area of a
vessel, most notably hull coating systems to
protect the metal structure of the vessels.
Energy customers are owners of energy assets,
which are often subject to harsh weather
conditions, such as windmills and other energy
solution assets. Infrastructure mainly relates
to bridges, transportation assets and other
infrastructure buildings. Customers are e.g.
governments responsible for maintenance
of critical infrastructure, companies that
own infrastructure assets and maintenance
contractors.
Decorative sells indoor and outdoor coating
products. Decorative customers are both private
and commercial customers, e.g. retailers.
The goodwill has been re-allocated to the
new groups of CGUs described above based
on a relative value approach. This has been
calculated by determining the value in use of
each CGU as a proportion of the total value in
use of the Hempel A/S Group, and using those
percentages to re-allocate the goodwill to the
new groups of CGUs.
The carrying amount of goodwill re-allocated to
the new groups of CGUs is shown in the table
below: Goodwill at time of re-allocation.
Impairment of non-current assets
Goodwill, intangible assets with an indefinite
useful life and software under development that
is not subject to amortisation are tested annually
for impairment, or more frequently if events or
changes in circumstances indicate that they
might be impaired.
3.1 Intangible assets — continued
Goodwill at time of re-allocation – May 2024
(EUR m)
Marine Energy &
Infrastructure
Decorative Total
Marine 4 - - 4
Energy - 3 - 3
Infrastructure - 3 - 3
Decorative - - 180 180
T&O 176 115 54 345
Total goodwill 180 121 234 535
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 81PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
Other assets are tested for impairment
whenever events or changes in circumstances
indicate that the carrying amount may not be
recoverable. An impairment loss is recognised
for the amount by which the asset’s carrying
amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s
fair value less costs of disposal and value in
use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which
there are separately identifiable cash inflows
that are largely independent of the cash inflows
from other assets or groups of assets (CGUs).
Non-financial assets other than goodwill that
suffered an impairment are reviewed for possible
reversal of the impairment at the end of each
reporting period.
Impairment test
The Hempel A/S Group has tested the carrying
amount of software under development, brands
with indefinite useful life and goodwill for
impairment.
Following the re-allocation, goodwill is now
monitored based on three commercial units
(Marine, Energy & Infrastructure and Decorative)
As of 31 December 2024 goodwill was allocated
to the groups of CGUs as follows:
(EUR m) 2024
Marine 180
Energy & Infrastructure 123
Decorative 254
Total goodwill 557
The three key commercial business units
manage sales and are responsible for daily
contact with the customers.
Marine customers comprise both newbuilding
shipyards, ship owners requiring maintenance in
dry dock or at sea, and maintenance contractors.
Maintenance work relates to every area of a
vessel, most notably hull coating systems to
protect the metal structure of the vessels.
Energy customers are owners of energy assets,
which are often subject to harsh weather
conditions, such as windmills and other energy
solution assets.
Infrastructure mainly relates to bridges,
transportation assets and other infrastructure
buildings.
Customers are e.g. governments responsible
for maintenance critical infrastructure,
companies that own of infrastructure assets and
maintenance contractors.
Decorative sells indoor and outdoor coating
products. Decorative customers are both private
and commercial customers, e.g. retailers.
Technology & Operations is an internal business
unit where most of the Hempel A/S Group’s
production and supply chain is managed, and
where R&D activities take place. All products
developed and produced by Technology &
Operations are sold internally to the three key
commercial business units.
Impairment test of goodwill
As described above, goodwill was re-allocated
during the year to align with the new internal
management reporting structure. In determining
the carrying amount of net assets of each group
of CGUs, certain allocation keys were applied.
The recoverable amounts of each group of
CGUs are based on value-in-use calculations
and based on cash flow projections for the
years 2025-2029. The forecast represents
management’s best estimate of the future cash
flows and is assumed to be both reasonable
and achievable. The assumptions applied by
management in forecasting the future cash flows
reflect management’s expectations considering
all relevant factors, including the Hempel A/S
Group’s strategic initiatives, local initiatives, past
experience and external sources of information,
where possible and relevant. The key
assumptions used in the cash flow projections
are revenue growth, EBITDA margin, long-term
growth rate and pre-tax discount rate (refer to
the table on the next page). Cash flows beyond
the five-year forecast period are extrapolated
using the estimated growth rates stated in the
table on the next page.
Sensitivity analysis
Management reasonably considered and
assessed reasonably possible changes for
the key assumptions and did not identify any
instances that could cause the carrying amount
of goodwill to exceed its recoverable amount.
3.1 Intangible assets — continued
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 82PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
3.1 Intangible assets — continued
Impairment test of the Farrow & Ball brand
The carrying amount of the Farrow & Ball brand
with indefinite useful life of EUR 136 million (2023:
136 million) was tested separately for impairment
as the brand relates to the Farrow & Ball CGU.
The recoverable amount is calculated based
on a relief-from-royalty method, assuming a
steady revenue growth averaging 5.6% in the
forecasting period based on expected market
development within the luxury paint business.
The royalty rate applied in the relief-from-royalty
calculation is based on a benchmark study for
high-end brands with similar market position
to Farrow & Ball. A royalty rate of 6.15% (2023:
6.15%) and a weighted average cost of capital
(WACC) of 8.16% (2023: 9.35%) were applied.
Impairment test of software business
applications
One of Hempel A/S Group’s software business
applications systems (ERP) was discontinued
and replaced with a more flexible IT-solution to
ensure scalable operations and to streamline
processes across the Hempel A/S Group.
Consequently, the software business application
was written down, and an impairment of EUR 18
million was included in administrative expenses
in the statement of profit and loss. Refer also
to note 3.2 Property, plant and equipment for
impairment of customer relationships.
Key assumption Description
Revenue growth and EBITDA margin Revenue for all commercial business units is assumed to increase over the forecasting period on average by mid to high single-digit growth rates,
assuming a slight increase in market share. This is based on past performance and assumptions about stable raw material prices in the forecast period
and the general market development in the different commercial business areas, taking into consideration the maturity of the markets in which the
Hempel A/S Group operates. Further, group and local strategic initiatives are considered when estimating the revenue growth rates for the individual
commercial businesses, including initiatives focusing on increasing sales prices and volumes. A stable EBITDA margin is assumed in all the commercial
business units in the forecasting period, based on the business units’ ability to generally increase selling prices in line with long-term inflation.
The estimated revenue growth in Decorative is, in particular, to be achieved through its strong market position, brand awareness and companies and
stores acquired in 2021 and 2022 that increase Decorative’s accessibility in selected markets. In addition, Hempel A/S has expended its e-commerce
presence in key markets and opened new stores in 2024 in strategic geographical locations which is expected to help drive an increase in volumes.
For Marine, the estimated revenue growth is to be achieved through its highly competitive products, e.g. hull coatings, and higher sales prices through
a more value-based price setting model, as well as increased sales volumes based on the assumed continuation of the trend of increasing demand for
products in the marine industry that reduce both fuel consumption and CO
2
emissions. In addition, completion of the ongoing construction of new
cost-efficent factories in 2022 and 2023 has already improved the EBITDA margin over the forecast period and the ability to continuously optimise the
production and supply chain, including higher utilisation of existing production capacity and a reduction in production and employee costs.
For Energy & Infrastructure, the estimated revenue growth is based on an increased demand for sustainable solutions in the renewable energy and
infrastructure sectors, including increased focus on repair and maintenance work in corroded steel structures, and higher sales prices through a more
value-based price setting model. In addition, completion of the ongoing construction of new cost-efficent factories in 2022 and 2023 has already
improved the EBITDA margin over the forecast period and the ability to continuously optimise the production and supply chain, including higher
utilisation of existing production capacity and a reduction in production and employee costs.
For Technology & Operations, revenue and EBITDA margin is derived from sales to the three commercial business units. Sales volumes are therefore
based on the expected sales volumes in the three commercial business units. The internal sales prices are adjusted to reflect an arm’s length selling
price. EBITDA margin is assumed to increase over the forecasting period. This is based on assumptions of a stabilisation of raw material prices,
the ability to continuously optimise the production and supply chain, including higher utilisation of existing production capacity and a reduction in
production and employee costs, as well as the realisation of expected synergies from businesses acquired during the period and in previous years. In
addition, completion of the ongoing construction of new cost-efficient factories in 2022 and 2023 is assumed to improve the EBITDA margin over the
forecast period.
Long-term growth The terminal growth rates do not exceed expected long-term inflation.
Pre-tax discount rate The pre-tax discount rate reflects the specific risks to the CGUs.
(EUR m) Long-term growth rate 2024 Long-term growth rate 2023 Pre-tax discount rate 2024 Pre-tax discount rate 2023
Marine 2.00% 2.00% 9.18% 10.82%
Energy & Infrastructure 2.00% 2.00% 9.67% 10.88%
Decorative 2.00% 2.00% 9.18% 9.96%
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 83PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
3.1 Intangible assets — continued
Intangible assets (EUR m) Goodwill Brands Software Software
under
development
Customer
relationships
Other
intangible
assets
Total
Costs at 1 January 2024 535 140 76 32 140 99 1,022
Effect of exchange rate adjustment 22 6 2 - 7 2 39
Additions for the year - - 1 31 - - 32
Transfer and reclassifications - - 39 - 49 - 10 -
Disposals for the year - - - 5 - - 17 - 3 - 25
Costs at 31 December 2024 557 146 113 14 130 108 1,068
Accumulated amortisation at 1 January 2024 - - 68 - 123 70 261
Effect of exchange rate adjustment - - 1 - 7 2 10
Amortisation for the year - - 15 - 6 8 29
Reversal of amortisation of assets disposed - - - 5 - - 17 - 3 - 25
Accumulated amortisation at 31 December 2024 - - 79 - 119 77 275
Carrying amount at 31 December 2024 557 146 34 14 11 31 793
Costs at 1 January 2023 529 138 56 29 142 91 985
Effect of exchange rate adjustment 6 2 - 1 - - 2 1 6
Additions for the year - - - 32 - 1 33
Transfer and reclassifications - - 23 - 29 - 6 -
Disposals for the year - - - 2 - - - - 2
Costs at 31 December 2023 535 140 76 32 140 99 1,022
Accumulated amortisation at 1 January 2023 - - 45 - 112 63 220
Effect of exchange rate adjusted - - - 1 - - 2 - - 3
Amortisation for the year - - 8 - 8 6 22
Impairment losses for the year - - 18 - 5 1 24
Reversal of amortisation of assets disposed - - - 2 - - - - 2
Accumulated amortisation at 31 December 2023 - - 68 - 123 70 261
Carrying amount at 31 December 2023 535 140 8 32 17 29 761
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 84PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
Property, plant and equipment are measured
at cost less accumulated depreciation and
impairment losses.
Costs comprise the purchase price, including
import duties and non-refundable taxes, and
expenses directly related to the acquisition
up until the time when the asset is ready for
intended use. In the case of assets of own
construction, costs comprise direct expenses for
labour, materials, components and suppliers.
Material general and specific borrowing costs
that are directly attributable to the construction
or production of a qualifying asset are capitalised
during the period of time that is required to
complete and prepare the asset for its intended
use. Qualifying assets are assets that necessarily
take a substantial period of time to get ready for
their intended use or sale.
Subsequent costs, such as partial replacement
of property, plant and equipment, are included
in the carrying amount of the asset in question
when it is probable that such costs will result
in future economic benefits. The carrying
amount of the replaced parts is derecognised
from the balance sheet and recognised in the
statement of profit and loss. All other repairs and
maintenance are charged to profit or loss during
the reporting period in which they are incurred.
Depreciation is based on the costs of an asset
less its residual value. Depreciation is calculated
on a straight-line basis over the expected useful
lives of the assets, which are:
Buildings (max.) 50 years
Laboratory equipment 10 years
Plant and machinery 10 years
Other fixtures and fittings,
tools and equipment 3-10 years
If the individual material components of an asset
have different useful lives, each component is
depreciated separately. Gains and losses on
disposals are determined by comparing proceeds
with the carrying amount. These gains and
losses are included in other operating income
and expenses (refer to note 2.3 Other operating
income and expenses). The assets’ residual
values and useful lives are reviewed, and adjusted
if necessary, at the end of each reporting period.
Information about commitments for acquisition of
property, plant and equipment is provided in note
5.3 Contingent liabilities and other commitments.
The carrying amounts of property, plant and
equipment are reviewed on an annual basis
to determine whether there is any indication
of impairment. If an asset’s carrying amount
exceeds its recoverable amount, an impairment
loss is recognised in the statement of profit
and loss. Depreciation and impairment losses
3.2 Property, plant and equipment
Depreciation and impairment losses included in profit and loss (EUR m) 2024 2023
Production costs 34 32
Sales and distribution costs 6 5
Administrative costs 10 7
Discontinued operations 1 19
Total depreciation and impairment losses 51 63
are included in the statement of profit and loss
as follows:
Impairment test of Decorative Germany
and France
An impairment test was carried out for the
Decorative CGU Germany and France due to
challenging market conditions.
The CGU mainly comprises production
buildings, customer relationships and current
assets such as inventories and trade receivables.
The CGU is measured within level 3 of the fair
value hierarchy and the impairment amount was
determined based on a fair-value-less-costs-of-
disposal model, i.e. a market specific model using
discounted cash flow projections approved by
management, covering a five-year period.
The key assumptions used when determining the
cash flow projections are development in EBITDA
margin, development in net working capital, the
long-term growh rate and the discount rate.
Cash flows beyond the five-year forecast period
are extrapolated applying a 2.0% growth rate,
corresponding to the long-term inflation. A post
tax discount rate of 7.5% was applied, reflecting
the specific risk of the CGU. Development in
EBITDA margin assumes increasing revenue,
utilisation of idle production capacity and costs
adjustments that market participant would
consider when pricing the CGU.
The carrying amount of the CGU was reduced
to its recoverable amount, approx. EUR 67
million. An impairment loss of EUR 23 million
was recognised, hereof EUR 6 million within
intangible assets and the remaining EUR 17
million within property, plant and equipment.
The impairment loss is recognised within
production cost (EUR 18 million) and sales and
distribution costs (EUR 5 million), respectively.
The main classes of assets impaired were
production buildings and customer relationships.
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 85PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
3.2 Property, plant and equipment — continued
Property, plant and equipment (EUR m) Land and
buildings
Plant and
machinery
Other fixtures
and fittings, tools
and equipment
Assets under
construction
Total
Costs at 1 January 2024 513 341 134 48 1,036
Effect of exchange rate adjustment 12 12 5 1 30
Additions for the year 8 5 7 36 56
Transfer and reclassifications - 15 16 - 31 -
Disposals for the year - 37 - 26 - 12 - 5 - 80
Reclassification of assets held for sale 1 - - - 1 -
Costs at 31 December 2024 497 347 150 47 1,041
Accumulated depreciations at 1 January 2024 143 204 83 - 430
Effect of exchange rate adjustment 5 8 4 - 17
Depreciation for the year 14 23 14 - 51
Reversal of depreciations of assets disposed - 26 - 14 - 11 - - 51
Accumulated depreciation at 31 December 2024 136 221 90 - 447
Carrying amount at 31 December 2024 361 126 60 47 595
Costs at 1 January 2023 430 292 129 151 1,002
Effect of exchange rate adjustment - 7 - 4 - 1 - 6 - 18
Additions for the year - 4 5 53 62
Transfer and reclassifications 89 53 8 - 150 -
Disposals for the year - - 4 - 7 - - 11
Costs at 31 December 2023 513 341 134 48 1,036
Accumulated depreciations at 1 January 2023 114 189 79 - 382
Effect of exchange rate adjustment - 3 - 2 - 1 - - 6
Depreciation for the year 14 20 12 - 46
Impairment losses for the year 17 - - - 17
Transfer and reclassifications - - - 1 - - 1
Reversal of depreciations of assets disposed 1 - 3 - 6 - - 9
Accumulated depreciation at 31 December 2023 143 204 83 - 430
Carrying amount at 31 December 2023 370 137 51 48 606
There were no capitalised interest expenses for the year 2024 (2023: EUR 2 million).
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 86PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
Accounting policies
Lease liabilities
At the commencement date of leases, the
Hempel Foundation Group recognises lease
liabilities, measured at the present value of the
lease payments to be made over the lease term.
The lease payments include fixed payments less
any lease incentive receivables, variable lease
payments that depend on an index or rate, e.g.
when a minimum indexation is applied, and
amounts expected to be paid under residual
value guarantees. The lease payments also
include the exercise price of a purchase option
reasonably certain to be exercised by the
Hempel A/S Group and payment of penalties
for terminating a lease, if the lease term reflects
the Hempel A/S Group exercising the option
to terminate. The present value is calculated
using the interest rate implicit in the lease or
the Hempel Foundation Group’s incremental
borrowing rate if the interest rate implicit in the
lease is not readily determinable.
Contracts may contain both lease and non-
lease components. The Hempel Foundation
Group has elected to separate lease and
non-lease components. For these contracts,
the consideration promised in the contract
is allocated based on the relative stand-
alone prices between the lease and non-
lease component. Non-lease components
are accounted for in accordance with the
accounting policy applicable to such items.
Some lease contracts include extension and
termination options. Management exercises
judgement in determining whether these
options are reasonably certain to be exercised.
Management considers all relevant facts and
circumstances that create an economic incentive
to exercise the extension option.
After initial recognition, the lease liability is
measured at amortised cost using the effective
interest method. The lease liability is increased
to reflect the accretion of interest and reduced
for lease payments made. The lease liability
is remeasured when there is a change in the
lease term or a change in the assessment to
purchase the underlying asset. In addition,
the lease liability is remeasured if there is a
change in future lease payments arising from
a change in an index or rate, including revised
lease payments that reflect a change in market
rental rates, or if there is a change in the Hempel
Foundation Group’s estimate of the amount
expected to be payable under a residual value
guarantee.
When lease liabilities are remeasured, a corre-
sponding adjustment is made to the carrying
amount of the right-of-use asset. If the carrying
amount of the right-of-use asset is reduced to
zero, any further reduction is recognised in the
statement of profit and loss.
3.3 Leases
Depreciation and impairment included in profit and loss (EUR m) 2024 2023
Production costs 12 13
Sales and distribution costs 19 17
Administrative costs 2 2
Discontinued operations 1 2
Total depreciation and impairment 34 34
Right-of-use assets
The Hempel Foundation Group recognises
right-of-use assets at the commencement date
of the lease. Right-of-use assets are initially
measured at cost comprising the amount of the
initial measurement of the lease liability, adjusted
for any lease payments made at or before the
commencement date and any initial direct costs
incurred. Dismantling and restoration costs are
not included in the calculation of the right-of-use
asset’s value, but are booked separately.
After initial recognition, right-of-use assets are
measured at cost less accumulated depreciation
and impairment losses and adjusted for any
remeasurement of the lease liability. Depreciation
is calculated on a straight-line basis over the
shorter of the useful life of the asset and the
lease term.
Right-of-use assets mainly comprise office
buildings, stores, warehouses and vehicles, such
as cars, trucks and vans. Lease terms of buildings
are usually 5-10 years whereas vehicles typically
have a lease term of 3-5 years.
Short-term and low-value leases
Short-term and low-value leases are expensed
directly as operating costs in the statement of
profit and loss, usually on a straight-line basis
over the lease term.
The Hempel Foundation Group has recognised
the following amounts relating to leases, as
shown on the next page.
Depreciation is included in the statement of
profit and loss as follows:
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 87PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
3.3 Leases — continued
The statement of profit and loss shows the
following expenses relating to leases:
Amounts relating to leases (EUR m) Land and
buildings
Vehicles Other
fixed assets
Total
Right-of-use assets
Costs at 1 January 2024 159 27 1 187
Effect of exchange rate adjustment 3 1 - 4
Additions for the year 8 13 - 21
Remeasurement 6 - - 6
Disposals - 12 - 11 - - 23
Cost at 31 December 2024 164 30 1 195
Depreciation at 1 January 2024 67 16 - 83
Effect of exchange rate adjustment 2 - - 2
Depreciation for the year 26 8 - 34
Disposals - 5 - 10 - - 15
Accumulated depreciation at 31 December 2024 89 14 - 103
Carrying amount at 31 December 2024 75 16 1 92
Right-of-use assets
Costs at 1 January 2023 154 27 1 182
Effect of exchange rate adjustment - 2 - - - 2
Additions for the year 6 6 - 12
Remeasurement 11 - - 11
Disposals - 10 - 6 - - 16
Cost at 31 December 2023 159 27 1 187
Depreciation at 1 January 2023 51 14 - 65
Effect of exchange rate adjustment - 1 - - - 1
Depreciation for the year 26 8 - 34
Disposals - 10 - 6 - - 16
Accumulated depreciation at 31 December 2023 66 16 - 82
Carrying amount at 31 December 2023 94 11 1 106
Lease liabilities (EUR m) 2024 2023
Current 29 30
Non-current 67 71
Total 96 101
Expenses relating to leases (EUR m) 2024 2023
Depreciation expense of right-of-use assets 34 34
Interest expense on lease liabilities 4 4
Expense relating to short-term leases, excluding short-term leases of low-value assets 1 1
Total amount recognised in profit or loss 39 39
Total cash outflow from leases amounted to EUR 32 million, including cash outflow from short-term and low-value leases
(2023: EUR 38 million).
The maturity analysis of undiscounted cash flow in lease liabilities is disclosed in note 4.3.
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 88PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
3.4 Inventories
Accounting policies
Inventories are measured at cost, determined
using the FIFO-method, or net realisable
value if the net realisable value is lower. Costs
of inventories comprise purchase costs of
raw materials, including import duties and
transportation costs directly attributable to the
acquisition of raw materials, costs of conversion
and other costs incurred in bringing the
inventories to the present location and condition.
The costs of finished goods and work in
progress also include indirect production
costs, which comprise the cost of indirect
materials and labour as well as maintenance and
depreciation of the machinery, factory buildings
and equipment used in the manufacturing
process and costs of factory administration and
management.
The net realisable value is calculated as the
selling price less costs of completion and costs
necessary to make the sale and is determined
based on the most reliable evidence available
at the time the estimates are made, taking into
account obsolescence and development in
expected selling prices.
(EUR m) 2024 2023
Raw materials and consumables 108 92
Work in progress 9 9
Finished goods 219 231
Total inventories 336 332
Cost of inventories, included under production costs 1,193 1,307
Hereof write-downs to net realisable value during the year 11 12
Reversal of write-downs during the year - -
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 89PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
3.5 Trade receivables
Accounting policies
Trade receivables are recognised initially at
their transaction price. The Hempel Foundation
Group holds trade receivables with the objective
of collecting the contractual cash flows and
therefore measures them subsequently at
amortised cost using the effective interest
method, less loss allowance.
Due to the short-term nature of trade receivables,
amortised cost will equal the invoiced amount
less loss allowance for expected credit losses.
Credit risk
The Hempel A/S Group is exposed to
financial and commercial counterparties but
has no particular concentration of customers.
To minimise the credit risk related to trade
receivables, financial vetting is undertaken for all
major customers and credit limits are assigned
for major customers based on the Hempel A/S
Group’s credit risk assessment.
The Hempel A/S Group applies the simplified
approach to providing the expected credit
losses, which permits the use of the lifetime
expected loss provision for all trade receivables.
To measure the expected credit losses, trade
receivables are grouped based on shared credit
risk characteristics and the days past due. Trade
receivables not due are also included when
assessing the expected lifetime loss provision.
Trade receivables are written off when there is no
reasonable expectation of recovery, i.e. typically
when customers are undergoing restructuring or
bankruptcy proceedings have commenced.
The Hempel A/S Group’s maximum exposure
to credit risk at the end of the reporting period
related to trade receivables is the carrying
amount of trade receivables mentioned above.
The Hempel Foundation Group does not hold
collateral as security.
Expected credit loss 2024 (EUR m) Carrying
amount, gross
Expected
loss rate (%)
Loss
allowance
Carrying
amount, net
Current 338 0.8% 2.7 335.3
Overdue 1-30 days 54 1.0% 0.5 53.5
Overdue 31-60 days 24 3.0% 0.7 23.3
Overdue 61-120 days 18 3.6% 0.6 17.4
Overdue 121-240 days 17 12.6% 2.1 14.9
Overdue 241-360 days 6 21.7% 1.3 4.7
Overdue > 360 days 40 99.0% 39.6 0.4
Total 497 47.5 449.5
Expected credit loss 2023 (EUR m) Carrying
amount, gross
Expected
loss rate (%)
Loss
allowance
Carrying
amount, net
Current 367 0.7% 2.4 364.6
Overdue 1-30 days 63 0.6% 0.4 62.6
Overdue 31-60 days 31 1.5% 0.5 30.5
Overdue 61-120 days 23 1.6% 0.3 22.7
Overdue 121-240 days 16 7.2% 1.2 14.8
Overdue 241-360 days 4 16.8% 0.6 3.4
Overdue > 360 days 39 84.1% 32.7 6.3
Total 543 38.1 504.9
Loss allowance provision (EUR m) 2024 2023
Provision at 1 January 38 31
Sales of enterprises - 1 -
Additions for the year 14 9
Losses recognised - 5 - 2
Currency translation 2 -
Total 48 38
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 90PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
3.6 Pensions and other post-employment benefit obligations
Accounting policies
The Hempel A/S Group operates various post-
employment schemes, including defined benefit
and defined contribution pension plans.
Defined contribution plans
The Hempel A/S Group operates a number of
defined contribution plans which provide post-
employment benefits determined by the value of
funds contributed in respect of each employee.
The Hempel A/S Group’s contributions to the
defined contribution plans are recognised in
profit and loss in which they become payable.
The Hempel Foundation Group’s obligation
is limited to the amount that it agrees to
contribute to the pension plans; it has no further
obligation once the contributions have been
paid. Contributions payable are recognised in
the statement of financial position within other
current liabilities.
Defined benefit plans
For defined benefit post-employment benefit
plans, the surplus or deficit recognised in the
statement of financial position for each plan is
determined as the fair value of the plan assets
less the present value of the defined benefit
obligation at the end of the reporting period. The
defined benefit obligation and cost of providing
benefits is calculated annually by independent
actuaries using the projected unit credit method.
This is done separately for each major plan
by estimating the amount of future benefits
that employees have earned in return for their
service in the current and prior periods. The
present value of the defined benefit obligation
is determined by discounting the estimated
future cash outflows using interest rates of high-
quality corporate bonds denominated in the
currency in which the benefits will be paid, and
that have terms approximating the terms of the
related obligations. In countries where there is no
deep market in such bonds, the market rates for
government bonds are used.
Defined benefit plan surpluses are recognised
only to the extent that they are recoverable by
way of either reduced future contributions to the
plan or a refund from the plan.
Service costs comprise current service costs
and past service costs. Current service cost is
the increase in the present value of the defined
benefit obligation resulting from employee
services in the current period. Changes in the
present value of the defined benefit obligation
resulting from plan amendments or curtailments
are recognised immediately in profit and loss as
past service costs.
The net interest expense is calculated by
applying the discount rate to the defined benefit
obligation and the fair value of plan assets. This
cost is included in financial expenses in the
consolidated statement of profit and loss.
Remeasurement gains and losses arising
from experience adjustments and changes in
actuarial assumptions are recognised in the
period in which they occur, directly in other
comprehensive income.
Pension and other post-employment
benefit plan costs
In 2024, net costs of EUR 25 million relating
to the Hempel A/S Group’s pension and other
post-employment benefit plans were recognised
in the statement of profit and loss (2023: EUR
24 million) as shown in the table below.
Pension costs (EUR m) 2024 2023
Costs for defined contribution plans:
Employee costs 22 21
Costs for defined benefit plans:
Employee costs 2 1
Interest expense 1 1
Total costs recognised in the profit and loss 25 23
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 91PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
(EUR m) 2024 2023
Present value of obligation at 1 January 50 51
Current service cost 2 2
Interest expense 2 2
Actuarial (gains)/losses arising from changes in financial assumptions - 1 - 3
Actuarial (gains)/losses arising from experience adjustments 2 2
Benefit payments from employer - 2 - 1
Payments from the plans - 1 - 3
Present value of obligation at 31 December 52 50
Fair value of pension plan assets at 1 January 32 35
Calculated interest in plan assets 1 1
Return on plan assets excluding calculated interest 2 - 2
Employer contributions 1 1
Payments from the plans - 1 - 3
Fair value of pension plan assets at 31 December 35 32
Surplus (deficit) at 31 December - 17 - 18
Effect of asset ceiling - 1 - 1
Net benefit asset (liability) at 31 December - 18 - 19
Represented by amounts recognised in the statement of financial position:
Asset recognised 4 2
Liability recognised - 22 - 21
Net benefit asset (liability) - 18 - 19
The defined benefit obligation may be analysed as follows:
Funded plans - 30 - 28
Unfunded plans - 22 - 22
Defined benefit obligation - 52 - 50
The defined benefit obligation may be analysed as follows:
Pensions plans - 32 - 31
Other post-employment benefit plans - 20 - 19
Defined benefit obligation - 52 - 50
3.6 Pensions and other post-employment benefit obligations — continued
Hempel Foundation defined benefit plans
The Hempel A/S Group operates defined
benefit plans in several countries with the major
plans being pensions in Ireland and the UK. None
of the plans are individually significant to the
Hempel A/S Group.
The pension plans are generally final salary
plans, which provide benefits in the form of a
guaranteed level of pension payable for life.
The level of benefits provided typically depends
on the employees’ length of service and their
salary in the final years leading up to retirement.
The majority of the defined benefit obligation
relates to plans that are funded. However, there
are also a number of unfunded plans in which the
Hempel A/S Group meets the benefit payment
obligation as it falls due. Recognition of plan
assets for the UK defined benefit pension plan
is restricted as the surplus in the plan may not
ultimately be recoverable by the Hempel A/S
Group.
Plan assets held in trusts are governed by local
regulations and practice in the relevant country,
as is the nature of the relationship between the
Hempel A/S Group and the trustee boards and
their composition.
The Hempel A/S Group also operates a number
of other post-employment benefit plans which
are primarily unfunded and typically provide a
lump sum payment on leaving employment.
Movements in the present value of the defined
benefit obligations and the fair value of the plan
assets during the year are shown in the table to
the right.
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 92PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
3.6 Pensions and other post-employment benefit obligations — continued
Of the total defined benefit obligation, 50%
(2023: 48%) relates collectively to pension
plans in Ireland and the UK.
The expected average duration of the defined
benefit obligations is 10 years (2023: 11 years)
and the expected employer contributions
for the year ending 31 December 2025 are
EUR 3 million.
The composition of plan assets is shown in the
table below.
Mortality rates are also a key assumption; in
each country the most common demographic
assumptions, including mortality rates,
are applied.
Sensitivity analysis
The following table illustrates the change in the
defined benefit obligation related to defined
benefit plans due to a change in the key actuarial
assumptions.
The analysis is based on reasonably possible
changes, provided that the other parameters
remain unchanged.
The following table summarises the key
assumptions of the defined benefit plans.
Recognised defined benefit pension obligation (EUR m) 2024 2023
Discount rate:
Increase of 0.5 p.p. - 2 - 2
Decrease of 0.5 p.p. 3 2
Future wage / salary increase
Increase of 0.5 p.p 1 1
Decrease of 0.5 p.p. - 1 - 1
Mortality
Increase of +1 year - 1
Decrease of -1 year - - 1
Defined benefit plan assets by category (%) 2024 2023
Cash and cash equivalents 1% 2%
Equity instruments 21% 23%
Debt instruments 57% 47%
Real estate 1% 1%
Investment funds 9% 18%
Assets held by insurance company 9% 5%
Other 2% 4%
Total 100% 100%
% 2024 2023
Weighted discount rate 4.55% 4.57%
Future wage / salary increase 3.60% 3.45%
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 93PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
3.7 Provisions
Accounting policies
Provisions are recognised when the Hempel
Foundation Group has a present legal or
constructive obligation as a result of past events,
it is probable that an outflow of resources will be
required to settle the obligation, and the amount
can be reliably estimated.
Provisions for environmental, warranty and
restructuring obligations, as well as other
obligations, are measured at the present value of
management’s best estimate of the expenditure
required to settle the present obligation at
the end of the reporting period. The costs
required to settle the liability are discounted if
the effect is material to the measurement of the
provision. The discount rate used to determine
the present value is a pre-tax rate that reflects
current market assessments of the time value
of money and the risks specific to the liability.
The increase in the provision due to the passage
of time is recognised as interest expense.
Decommission and restoration obligations are
measured at the present value of the future
liability in respect of decommissioning as
expected at the balance sheet date. The present
value of the provision and changes in estimate
are recognised as part of the cost of property,
plant and equipment and depreciated together
with the associated asset.
Interest on provisions is recognised in the statement
of profit and loss under financial expenses.
Environmental provisions
Environmental obligations relate to restoration
of various sites and to remedying established
environmental damages that occurred in
connection with the production of coatings
and disposal or release of certain wastes.
Management anticipates that the resolution
of the Hempel A/S Group’s environmental
obligations will occur over an extended period, in
some cases over a period of more than 5 years.
Warranties
Provision is made for estimated warranty claims
in respect of products sold that are still under
warranty at the end of the reporting period.
Warranty cases are normally resolved within 0-5
years, though some complex cases are resolved
over an extended period of more than 5 years.
In line with accounting policies, potential product
warranties are recognised as warranty provisions
when revenue from the related sale is recognised.
Other provisions
The Hempel A/S Group is involved in a number
of legal cases, tax cases and other disputes.
Some of these involve significant amounts and
are subject to some uncertainty. Management
continuously assesses the risks associated with
the cases and disputes, and their likely outcome.
It is the opinion of management that, apart from
items recognised in the financial statements, the
outcomes of these cases and disputes are not
probable or cannot be reliably estimated in terms
of amount or timing. The Hempel A/S Group
does not expect these to have a material impact
on the consolidated financial statements.
(EUR m) Environmental
obligations
Warranties Other
provisions
Total
Total provisions, beginning of year 21 15 10 46
Additions for the year - 17 12 29
Reversed for the year - 1 - - 2 - 3
Consumed for the year - - 1 - - 1
Total provisions, end of year 20 31 20 71
Current liabilities 2 7 7 16
Non-current liabilities 18 24 13 55
Total provisions, end of year 20 31 20 71
3.8 Other liabilities
Accounting policies
Other liabilities mainly comprise accrued
employee costs, fund contributions, including
bonuses, withholding tax and VAT, customer
bonuses, commission payables, accrued
interests and prepaid rent.
Not yet settled donations refer to EUR 62 million.
(2023: EUR 64 million).
Other financial liabilities are measured at initial
recognition at fair value. Subsequently, other
financial liabilities are measured at amortised
cost using the effective interest method, which
usually corresponds to the nominal value.
Other non-financial liabilities arising from e.g.,
taxation or employer benefits, are measured in
accordance with the appropriate standards.
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 94PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
4 Capital structure and financing items
Accounting policies
Dividends proposed by management for the year
are presented separately within equity.
The translation reserve comprises foreign
exchange differences arising from the translation
to EUR of financial statements of the Hempel
Foundation Group and its subsidiaries. Also,
the effect of the inflation adjustment from
hyperinflationary economies is recognised within
the translation reserve.
The cash flow hedge reserve covers cash flow
hedging of interest rates associated with loans
and borrowings.
Base capital
The base capital of the Hempel Foundation
Group amounts to DKK 35 million.
Grants
Grants are recognised in equity when the
Hempel Foundation Group is obligated towards
the recipient of the grants. From that point in
time and until the grants have been paid out, the
donation is classified as other liabilities.
Capital structure
The capital structure of the Hempel Foundation
Group is intended to ensure sufficient financial
flexibility and stability for the Hempel A/S
Group to reach its strategic goals. The Hempel
Foundation Group aims to maintain an optimal
capital structure, and to use the free operating
cash flow after financial items and tax for debt
servicing, business development and grants.
The Hempel Foundation Group strives to ensure
adequate credit resources at all times, which
includes securing access to committed bank
financing and refinancing maturing debt in a
timely manner.
Capital ressources and covenants
in the Hempel Foundation Group
The Hempel A/S Group strives to ensure
adequate credit resources at all times, which
includes securing access to committed bank
financing and refinancing maturing debt in a
timely manner.
The Hempel Foundation Group aims to have
minimum EUR 250 million of free committed
credit resources available for the next 12 months.
In order to achieve this overall objective, the
Hempel A/S Group’s capital management aims
to ensure that it meets its financial covenants
attached to the interest-bearing loans and
borrowings that define capital structure
requirements. The covenants, which the
Hempel A/S Group is required to comply with
quarterly, state that the Hempel A/S Group’s
leverage must not exceed 4.0x. The Hempel
Foundation Group’s leverage is defined in note
5.7 Financial definitions.
At the end of 2024, the leverage ratio was 1.3x
(2023: 2.7x). The Hempel A/S Group aims to
maintain a leverage ratio below 2.5x in the long
term while a higher leverage ratio is accepted
when acquiring strategic businesses.
Breaches in meeting the financial covenants
would permit the bank to immediately call loans
and borrowings. There have been no breaches,
or near defaults, of the financial covenants of
any interest-bearing loans or borrowings in the
current period or in the previous period.
No changes were made in the objectives, policies
or processes for managing capital during 2024
or 2023.
4.1 Base capital and grants
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 95PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
4.2 Borrowings
Accounting policies
Long-term loans, such as loans from credit
institutions, are recognised initially at fair
value net of directly attributable transaction
costs. Subsequently, the loans are measured
at amortised cost using the effective interest
method. The difference between the proceeds
initially received and the nominal value is
recognised as financial expenses in the
statement of profit and loss over the loan term.
The bank loans are floating interest loans based
mainly on EURIBOR. Further, the interest rate is
linked to the Hempel A/S Group’s leverage ratio
and to achievement of the Hempel A/S Group’s
sustainability targets aimed at reducing CO
2
emissions, landfill waste and use of hazardous
materials in production.
A negative pledge clause is attached to the
Hempel Foundation Group’s long-term loan
arrangements that prevents the Hempel
Foundation Group from pledging certain assets
as security.
Secured loans
Lease liabilities are effectively secured as the
rights to the leased assets recognised in the
financial statements revert back to the lessor
in the event of default.
The Hempel Foundation Group’s borrowings
consists of the following, see table to the right:
2024 (EUR m) Average
interest rate
Maturity Carrying
amount
Bank loans 3.52% 2026-2027 582
Overdraft facilities 3.46% 2025 76
Lease liabilities 0.2%-13.1% 2025-2047 96
Total borrowings 754
Current 105
Non-current 649
Total borrowings 754
2023 (EUR m) Average
interest rate
Maturity Carrying
amount
Bank loans 5.46% 2025-2027 1,069
Overdraft facilities 5.21% 2024 58
Lease liabilities 0.2% - 13.1% 2024-2047 101
Total borrowings 1,228
Current 88
Non-current 1,140
Total borrowings 1,228
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 96PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
4.3 Financial risks
This note describes the exposure to financial
risks and how these risks could affect the Hempel
Foundation Group’s future financial performance.
The Hempel Foundation Group’s activities
expose the Hempel A/S Group to a variety of
risks related to the Hempel A/S Group’s financial
assets and liabilities. The Hempel A/S Group’s
financial liabilities comprise primarily borrowings,
trade and other payables and lease liabilities,
whereas the financial assets primarily comprise
trade receivables and cash deposits.
Management has assessed the following key
financial risks and their significance to the
Hempel A/S Group:
The above financial risks are inherent to the way
the Hempel A/S Group operates as a global
company with a large number of operating units
across the world. The Hempel A/S Group’s overall
risk management programme seeks to identify,
assess, and mitigate these financial risks in order
to reduce the effects on the Hempel A/S Group’s
financial performance. The risks are managed in
accordance with the policies and guidelines laid
out by the Board of Directors. The Hempel A/S
Group has centralised handling of these risks,
except for commercial credit risk, which is
managed locally. There are no changes in the
Hempel A/S Group’s financial risk management
policies compared to the previous year.
It is the Hempel Foundation Group’s policy not to
speculate actively on financial risks.
To some extent, the Hempel A/S Group’s income
and expenses in foreign currencies net out
and create a natural hedge of the Hempel A/S
Group’s profitability margin. The Hempel A/S
Group hedges intercompany loans in the major
currencies using financial instruments. Foreign
exchange hedges are entered into in order to
mitigate foreign exchange risks related to internal
balances between Group entities. See further
description under market risk.
Market risk
The Hempel A/S Group’s exposure to market
risks is related to foreign exchange risks and
interest rate risk. All market risks are managed
in accordance with the Hempel A/S Group’s
Treasury Policy.
Foreign exchange risk
Foreign exchange risk is the risk that the fair
value or future cash flows of a balance sheet
exposure will fluctuate because of changes in
foreign exchange rates.
The Hempel A/S Group’s exposure to the
risk of changes in foreign exchange rates
relates primarily to the Hempel A/S Group’s
trade receivables and trade payables, arising
respectively from revenue and purchase
transactions denominated in a foreign currency
and intercompany loans and deposits. The
currency exposure in these balances may affect
the Hempel A/S Group’s result.
The overall objective of foreign exchange risk
management is to reduce the short-term negative
impact of exchange rate fluctuations on net
financials and cash flows, thereby contributing to
the predictability of the financial results.
To manage exposure to foreign exchange risk,
it is the Hempel A/S Group’s policy to pool
funding activities centrally through intercompany
loans and deposits. In each subsidiary, foreign
exchange risk derived from trade receivables
or payables is mitigated by Hempel A/S
establishing an intercompany loan/receivable
towards the local entity in the same foreign
currency, thereby creating a natural hedge.
Currency risk is, as a main policy, hedged against
DKK or EUR when exposure exceeds EUR 0.5
million (higher thresholds are applied for US, SGD,
HKD and PLN). Some currencies cannot be hedged
within a reasonable price range, in which case
correlation to a proxy currency is considered and,
if deemed appropriate, proxy hedging is applied.
Foreign exchange forward contracts are used to
hedge the exposure to currency risk. As the vast
majority of intercompany loans are hedged, and
because changes in the fair value of both the
hedged item and the foreign exchange forward
is recognised in profit and loss under financial
items, the net exposure to foreign currency risk is
deemed low, though a higher foreign exchange
risk persists in countries with high inflation.
Foreign currency sensitivity
The sensitivity analysis is based on financial assets
and liabilities recognised as of 31 December.
The table on the next page demonstrates the
sensitivity to a reasonably possible change in
USD and GBP exchange rates against EUR,
with all other variables held constant. The
Hempel A/S Group’s exposure to foreign
currency changes for all other currencies is not
material.
The impact on the Hempel A/S Group’s profit
before tax is due to changes in the fair value of
monetary assets and liabilities denominated in
foreign currencies and non-designated foreign
exchange derivatives. Although the derivatives
have not been designated in a hedge relationship,
they act as an economic hedge and will offset the
underlying transactions when they occur.
The movement in pre-tax equity equals the
effect on profit before tax adjusted for fair value
movements of interest rate swaps designated as
hedging instruments.
Financial risk type 2024 2023
Foreign exchange risk Low Low
Interest rate risk Low Medium
Credit risk Low Low
Liquidity risk Low Low
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 97PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
Interest rate risk
The Hempel A/S Group’s exposure to changes
in interest rates primarily relates to long-term
loans and borrowings with floating interest rates.
The Hempel A/S Group’s policy is to hedge its
interest rate risk depending on the Hempel A/S
Group’s interest coverage level (EBITDA/
interest). When the Hempel A/S Group’s interest
coverage level falls below 10, the Hempel A/S
Group assesses whether it is necessary to
mitigate the interest rate risk by entering into
hedging instruments.
The Hempel A/S Group has fixed the interest
rate on EUR 500 million of debt by entering into
variable-to-fixed interest rate swaps maturing in
December 2025, which reduces the exposure
to changes in interest rates in 2025. The interest
related to the EUR 500 million debt is fixed
at an average interest rate of 2.62% until
December 2025.
There is an economic relationship between
the loans and the hedging instruments as both
the nominal amount and terms of the interest
rate swaps mirror the hedged exposure, creating
an equal opposite interest receipt and a fixed
interest payment. The Hempel A/S Group has
established a hedge ratio of 1:1 for the hedging
relationships as the underlying risk of the interest
rate swaps are identical to the hedged risk.
The table above demonstrates sensitivity to
reasonable possible changes in interest rates,
with all other variables held constant.
The sensitivity analysis is based on financial
assets and liabilities recognised as of
31 December and assumes that the interest
rate hedges are 100% effective. The sensitivity
analysis is based on a change of 100 bps, which
is considered a reasonable possible change at
31 December 2024.
Credit risk
Credit risk arises from the possibility that trading
partners and customers may default on their
obligations, causing financial losses for the
Hempel A/S Group. The Hempel A/S Group
is exposed to credit risk on cash, trade and
other receivables. Please refer to note 3.5 for a
description of the Hempel A/S Group’s credit
risk in relation to trade receivables.
4.3 Financial risks — continued
(EUR m) Increase/
decrease in bps
Effect on profit
before tax
Effect on equity
2024
Euro +100 bps 1 1
Euro - 100 bps - 1 - 1
2023
Euro +100 bps - 2 - 2
Euro - 100 bps 2 2
(EUR m) Change in rate Nominal value Effect on profit
before tax
Effect on equity
2024
USD/EUR 5% - 47.7 - 2.4 - 1.9
USD/EUR - 5% - 47.7 2.4 1.9
2024
GBP/EUR 5% 14.1 0.7 0.6
GBP/EUR - 5% 14.1 - 0.7 - 0.6
2023
USD/EUR 5% - 66.7 - 3.3 - 2.6
USD/EUR - 5% - 66.7 3.3 2.6
2023
GBP/EUR 5% - 6.8 - 0.3 - 0.3
GBP/EUR - 5% - 6.8 0.3 0.3
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 98PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
4.3 Financial risks — continued
The carrying amount of EUR 273 million (2023:
EUR 280 million) represents the maximum credit
exposure related to cash and other receivables.
The Hempel Foundation Group’s main banks are
all financial institutions with a high credit rating
and, therefore, financial assets such as cash are
considered to be of low risk.
Other financial assets measured at amortised
cost comprise other receivables. These financial
assets are considered to have a low credit risk, and
thus the impairment provision calculated based
on 12 months of expected losses is considered
immaterial. The financial assets are considered to
be low risk when they have a low risk of default,
and the issuer has a strong capacity to meet its
contractual cash flow obligations in the near term.
The Hempel A/S Group has no material risks
relating to a single customer or business partner.
It is the Hempel A/S Group’s credit policy to rate
major customers and other business partners on
a current basis. Bank Acceptance Bills are used
as a financial instrument to further limit the risk of
credit losses.
The Hempel A/S Group considers a financial
asset in default when the Hempel A/S Group is
unlikely to recover the outstanding contractual
amount in full. A financial asset is written off
when there is no reasonable expectation of
recovering the contractual cash flows.
Liquidity risk
The liquidity risk is assessed to be low. The
Hempel Foundation Group ensures the
availability of the required liquidity through a
combination of cash management and both
uncommitted and committed credit facilities.
The Hempel A/S Group applies cash pool
arrangements for optimisation and centralisation
of cash management.
The Hempel Foundation Group has an undrawn
credit facility of EUR 454 million (2023: EUR
472 million).
Maturities of financial liabilities
The table to the right provides an analysis of the
Hempel Foundation Group’s financial liabilities
divided into relevant maturity groupings based
on their contractual maturities for non-derivative
financial liabilities.
The amounts disclosed in the table are the
contractual undiscounted cash flows.
Maturity debt
Contractual undiscounted cashflows (EUR m)
Less than
1 year
Between
1 and 5 years
More than
5 years
2024
Non-derivatives:
Borrowings, current and non-current 94 559 -
Trade payables 317 - -
Lease liabilities 32 54 15
Derivatives:
Derivative financial instruments 1 1 -
Total contractual undiscounted cash flows at the end of the year 444 614 15
Non current liabilities 629
Current liabilities 444
2023
Non-derivatives:
Borrowings, current and non-current 88 1,080 -
Loan from parent company 60 - -
Trade payables 337 - -
Lease liabilities 30 71 19
Derivatives:
Derivative financial instruments 4 4 -
Total contractual undiscounted cash flows at the end of the year 519 1,155 19
Non current liabilities 1,174
Current liabilities 519
The contractual payments for borrowings are based on the variable interest rates as of December 2024. The derivatives reflect the
mark-to-market value and expected cash flows of interest rate swaps, totalling EUR 500 million maturing in December 2025, and
an additional interest rate swap of EUR 200 million maturing in December 2026.
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 99PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
4.4 Financial instruments
Accounting policies
Derivative financial instruments, foreign
exchange forwards, currency swaps and interest
rate swaps are initially recognised in the balance
sheet at fair value and subsequently remeasured
at their fair value.
Derivatives are used for economic hedging
purposes and not as speculative investments.
Where the derivatives do not meet the hedge
accounting criteria, they are measured at fair
value through profit and loss.
Hedging instruments not qualifying for
hedge accounting
For foreign exchange forwards and currency
swaps, positive and negative fair values of these
derivative financial instruments are recognised
as Other receivables and Other payables,
respectively. Changes in the fair values of foreign
exchange forwards and currency swaps are
recognised in the statement of profit and loss
under financial income and expenses.
Cash flow hedge accounting
For interest rate swaps, cash flow hedge
accounting is applied. Positive and negative
fair values are recognised as Other receivables
and Other payables, respectively. Changes in
the fair values are recognised directly within
Other comprehensive income. The amount
accumulated in equity is reclassified to profit and
loss as a reclassification adjustment in the same
periods during which the hedged cash flows
affect profit and loss. Fair value of the interest
rate swaps was negative EUR 2.0 million as of
31 December 2024 (2023: EUR 4.5 million).
Financial instruments, fair value disclosures
The carrying amount of financial instruments
is a reasonable approximation of the fair value,
except for loans measured at amortised cost. The
carrying amount of loans measured at amortised
cost amounts to EUR 658 million (2023: EUR
1,126 million) compared to a fair value of EUR
623 million (2023: EUR 1,144 million). The fair
value is determined based on the present value
of expected future cash flows.
The carrying amount of lease liabilities amount
to EUR 96 million (2023: 101 million) compared
to a fair value EUR 96 million (2023: EUR 101
million).
Financial instruments measured at fair value
Fair value measurement of financial intruments is
categorised into a hierarchy based on the inputs
used in the valuation process. The hierarchy
consists of three levels:
Level 1 — Quoted prices (unadjusted) in active
markets for identical assets or liabilities.
Level 2 — Inputs other than quoted prices
included within level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
Level 3 — Inputs for the asset or liability that are
not based on observable market data.
Foreign exchange contracts, currency swaps
and interest rate swaps are within level 2 of the
fair value hierarchy and are calculated based
on observable market data, such as foreign
exchange rates and yield curves at the end of
the reporting period, and generally accepted
valuation methods. Loans are with level 3 of the
fair value hierarchy.
Fair value of investments in private
equity funds
Unpaid investment commitments to private
equity funds amounted to EUR 35.0 million as of
December 31, 2024 (2023: EUR 70.8 million).
Reconciliation of liabilities arising from
non-cash movements
Financing activities (EUR m)
Beginning of
the year
Cash flows Additions Disposals Acquisitions Exchange rates
etc.
End of
the year
2024
Lease liabilities 101 - 32 31 - 7 - 3 96
Borrowings, current and non-current 1,126 - 470 - - - 2 658
Liabilities arising from financing activities 1,227 - 502 31 - 7 - 5 754
2023
Lease liabilities 121 - 38 12 - - 6 101
Borrowings, current and non-current 1,049 83 - - - - 6 1,126
Liabilities arising from financing activities 1,170 45 12 - - - 1,227
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 100PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
4.5 Financial income and expenses4.4 Financial instruments — continued
Accounting policies
Financial income and expenses comprise
interest income and expenses, gains and losses
on receivables, payables, realised and unrealised
exchange gains and losses on transactions
denominated in foreign currencies.
Other securities and equity interests consist of
investments in private equity funds (fair value
hierarchy level 3). For this type of investment,
fair value is not measured based on observations
in an active market but based on information
about fair value provided by the private equity
funds. When entering into new investments in
private equity funds, the Hempel Foundation
Group receives information about the funds’
general valuation principles, which are accepted
simultaneously with the Hempel Foundation
Group’s decision to invest in a private equity
fund. The fair value of the Hempel Foundation
Group’s investments in private equity funds
is based on the latest received quarterly and
annual statements, adjusted for cash calls and
distributions in the period between the date
of the latest received report and the balance
sheet date.
The valuation of all investments is based on
unobservable inputs. Recognition is based
on the formalised valuation reporting process
implemented at the private equity fund. Detailed
information about the valuation model’s data
and underlying assumptions is not received.
Financial income (EUR m) 2024 2023
Interest income 21 27
Gain on derivative financial instruments at fair value through profit and loss 16 2
Fair value adjustment transferred from equity hedge reserve 3 -
Net monetary gain 2 -
Income from investments in other financial assets 6 6
Realised and unrealised gain on securities 25 25
Other financial gains 1 10
Total financial income 74 70
Financial expenses (EUR m) 2024 2023
Interest expenses on borrowings - 51 - 55
Interest expenses on lease liabilities - 4 - 4
Interest expenses on financial liabilities measured at amortised cost - 55 - 59
Realised and unrealised losses on securities - 11 - 10
Foreign exchange losses (net) - 24 - 38
Net monetary loss - - 2
Other financial expenses - 16 - 23
Total financial expenses - 106 - 132
Gains and losses on foreign exchange derivative financial instruments measured at fair value through profit and loss have been
presented separately. Last year, these instruments were presented within the line item foreign exchange gain/loss. As a result of the
change in presentation, comparative figures have been restated.
Other financial assets
Investment category (EUR m)
Fair value
hierarchy level
Fair value as of
31 December
Net revaluation
recognised through
profit and loss
2024
Bonds (listed) 1 56 1
Shares (listed) 1 387 4
Other investments (listed) 1 3 -
Shares (non-listed) 2 4 1
Other investments (non-listed) 3 57 4
Total 507 10
2023
Bonds (listed) 1 116 11
Shares (listed) 1 132 6
Other investments (listed) 1 8 -
Shares (non-listed) 2 3 -
Other investments (non-listed) 3 48 1
Total 307 18
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 101PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
4.6 Discontinued operations
Divestment of the Decorative business in
France and Germany
In May 2024, the Hempel A/S Group announced
the planned divestment of its Decorative
business in France and Germany to Fidelium
Partners. The divestment completed on 1 August
2024, having received approval from the relevant
authorities. The sale included a production
site in Germany, stores in France, around 500
employees and a portfolio of customers. The
business is reported as a discontinued operation.
Divestment of Hempel Russia
On 13 July 2023, the divestment of the
Hempel A/S Group’s assets in Russia was
completed. The associated operations were
previously presented as discontinued operations,
and continue to be presented as such up to the
date of disposal.
The carrying amounts of assets and liabilities as of the date of sale were:
Net loss from discontinued operations (EUR m) 2024 2023
Revenue 94 202
Production costs - 76 - 171
Sales and distribution costs - 21 - 41
Administrative costs - 7 - 37
Financial income and expenses - 9 - 14
Net loss before tax from operating activities - 19 - 61
Income tax - - 1
Net loss after tax from operating activities - 19 - 62
Loss on sale of Decorative business in France and Germany - 75 -
Loss on sale of Hempel Russia 4 - 10
Net loss from discontinued operations (attributable to the shareholders of Hempel A/S) - 90 - 72
Cash flow from discontinued operations (EUR m) 2024 2023
Cash flow from operating activities - 12 - 47
Cash flow from investing activities 4 6
Total - 8 - 41
Loss on sale of Decorative business in France and Germany and
Hempel Russia (EUR m)
2024 2023
Net cash received 4 6
Net proceeds receivables/payables - 5 4
Total consideration received or receivable - 1 10
Carrying amount of net assets sold - 58 - 13
Reclassification of foreign currency translation reserve - - 7
Carrying amount of building sold - 8 -
Transaction costs - 3 -
Total loss on sales of Decorative business in France and Germany and Hempel Russia - 70 - 10
(EUR m) 2024
2
2023
1
Non-current assets 33 11
Inventory 30 -
Trade recievables 49 -
Cash 1 1
Other current assets 6 1
Total assets 119 13
Non-current liabilities - 8 -
Trade payables - 29 -
Other current liabilities - 24 -
Total liabilities - 61 -
Net assets 58 13
1
Sale of Hempel Russia on 13 July 2023.
2
Sale of Decorative business in France and Germany on 1 August 2024.
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 102PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
5 Other disclosures
Fees for services other than statutory audit
of the financial statements provided by
PricewaterhouseCoopers Statsautoriseret
Revisionspartnerselskab to the Hempel
Foundation Group mainly consist of financial
due diligence and transaction advice, accounting
advisory services, and other advisory and
tax services.
Other contingent liabilities
The Hempel Foundation Group has an
unrecognised latent tax liability amounting to
EUR 0 million (2023: EUR 0 million). The tax
liability relates to tax provisions for future grants.
The Hempel Foundation Group expects to
neutralise this tax liability through future grants,
which is why the latent liability is not recognised.
Commitments
The consolidated Hempel Foundation Group has
committed a total investment of EUR 75.4 million
in other securities. As of 31 December 2024, the
remaining commitment was EUR 35.0 million.
For the purpose of presenting the statement of
cash flows, non-cash items with effect on the
statement of profit and loss must be reversed
to identify the actual cash flow effect from the
statement of profit and loss. The adjustments are
specified as follows:
5.1 Fee to the auditors appointed at the General Meeting 5.3 Contingent liabilities and other commitments
5.2 Adjustment for non-cash items
(EUR m) 2024 2023
Audit fee 2 2
Tax advice 1 1
Other fees - -
Total 3 3
(EUR m) 2024 2023
Amortisation, depreciation and impairment 116 148
Other non cash adjustments 1 -
Provisions 21 9
Gains and losses on the sale of fixed assets 71 10
Hyperinflation adjustments - 5
Total 209 172
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 103PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
5.5 Related parties
Related parties and transactions Basis
Related parties:
Hempel’s Employee Foundation, Amaliegade 8, 1256 Copenhagen K, Denmark Related party
Hempel’s Cultural Foundation, Amaliegade 8, 1256 Copenhagen K, Denmark Related party
Hempel’s Employee Foundation of 2017, Lundtoftegårdsvej 91, 2800 Kgs. Lyngby, Denmark Related party
Transactions:
All related-party transactions were carried out at arm’s length
On 6 February 2025, the Hempel A/S Group
refinanced the EUR 1 billion Revolving Credit
Facility (RCF) maturing in April 2026 with a new
EUR 850 million RCF that matures in February
2030.
5.4 Events after the reporting period
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 104PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
5.6 The Hempel Foundation Group
Location Name Currency Ownership
Denmark Hempel A/S DKK 78%
Argentina Hempel Argentina S.R.L. ARS 100%
Australia Hempel (Australia) Pty. Ltd. AUD 100%
Australia Hempel NewCo (Australia) Pty. Ltd. AUD 100%
Australia Hempel (Wattyl) Australia Pty. Ltd. AUD 100%
Bahrain Dahna Paint Middle East Holding B.S.C. BHD 51%
Bahrain Hempel Paints (Bahrain) S.P.C. BHD 51%
Canada Farrow & Ball Canada Limited CAD 100%
Canada Hempel (Canada) Inc. CAD 100%
Chile Pinturas Hempel Chile SpA CLP 100%
China Hempel North Asia Holding Co., Ltd CNY 100%
China Hempel (Hong Kong) Limited HKD 100%
China Hempel (China) Limited HKD 100%
China Hempel (Kunshan) Coatings Ltd. CNY 100%
China Hempel (Yantai) Coatings Ltd. CNY 100%
China Hempel (Guangzhou) Coatings Ltd. CNY 100%
China Hempel (Zhangjiagang) Coatings Ltd. CNY 100%
Croatia Hempel Coatings (Croatia) Ltd. HRK 100%
Cyprus Hempel Coatings (Cyprus) Limited EUR 100%
Czech Republic Hempel (Czech Republic) s.r.o. CZK 100%
Denmark Brænderupvænge ApS DKK 100%
Denmark Hempel Administration ApS DKK 100%
Denmark HSA (Denmark) A/S DKK 100%
Denmark Hempel Decorative Paints A/S DKK 100%
Denmark HF (Denmark) A/S DKK 100%
Denmark Hempel Invest II ApS DKK 100%
Denmark Hempel Ejendomme DKK 100%
Denmark Hempel Invest A/S DKK 100%
Denmark Keldskov ApS DKK 100%
Ecuador Hempel Ecuador S.A. USD 100%
Egypt Hempel Coatings (Egypt) LLC EGP 100%
Egypt Hempel Egypt L.L.C. EGP 100%
Egypt Hempel Paints Egypt LLC EGP 99%
Finland OY Hempel (Finland) AB EUR 100%
Location Name Currency Ownership
France Hempel (France) SAS EUR 100%
Germany Farrow & Ball DE GmbH EUR 100%
Germany Hempel (Germany) GmbH EUR 100%
Germany Hempel Beteiligungsgesellschaft GmbH EUR 100%
Germany Rottkamp Immoblilien GmbH & Co. KG * EUR 100%
Germany Rottkamp Immobilien Verwaltung GmbH EUR 100%
Greece Hempel Coatings (Hellas) Single Member S.A. EUR 100%
India Hempel Paints (India) Private Limited INR 100%
Indonesia P.T. Hempel Indonesia IDR 100%
Ireland Crown Paints Ireland Limited EUR 100%
Italy Hempel (Italy) S.r.l. EUR 100%
Korea Hempel Korea Co. Ltd. KRW 100%
Kuwait Hempel Paints (Kuwait) K.S.C.C. KWD 51%
Malaysia Hempel (Malaysia) Sdn. Bhd MYR 100%
Malaysia Hempel Manufacturing (Malaysia) Sdn. Bhd. MYR 100%
Mexico Pinturas Hempel de Mexico S.A. de C.V. MXN 100%
Morocco Hempel Maroc SARL MAD 100%
New Zealand Hempel (Wattyl) New Zealand Ltd. NZD 100%
Norway Hempel Norway AS NOK 100%
Oman Hempel (Oman) L.L.C OMR 25%
Oman Hempel Manufacturing LLC OMR 25%
Peru Hempel Pinturas Del Perú S.A.C. PEN 100%
Poland Hempel Paints (Poland) S.p. z o.o. PLN 100%
Portugal Hempel (Portugal) Lda EUR 100%
Qatar Hempel Paints (Qatar) W.L.L. QAR 28%
Saudi Arabia Hempel Paints (Saudi Arabia) W.L.L. SAR 51%
Singapore Hempel (Singapore) Pte. Ltd. SGD 100%
South Africa Hempel Paints South Africa (Pty) Ltd. ZAR 100%
Spain Pinturas Hempel SAU EUR 100%
Sweden Hempel (Sweden) AB SEK 100%
Switzerland Hempel Schweiz AG CHF 100%
Syria Hempel Paints (Syria) W.L.L. SYP 43%
Taiwan Hempel (Taiwan) Co., Ltd. TWD 100%
Thailand Hempel (Thailand) Ltd. THB 100%
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 105PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
5.6 The Hempel Foundation Group — continued
Location Name Currency Ownership
The Netherlands Hempel (The Netherlands) B.V. EUR 100%
The Netherlands Hempel Industrial B.V. EUR 100%
Turkey Hempel Coatings San. ve Tic. Ltd. Sti. TRY 100%
UK Crown Brands Limited GBP 100%
UK Crown Paints Limited GBP 100%
UK Crown Paints Group Limited GBP 100%
UK Crown Paints Holdings Limited GBP 100%
UK FB Ammonite Limited GBP 100%
UK FB Brassica Limited GBP 100%
UK FB Brinjal Limited GBP 100%
UK FB Calluna Limited GBP 100%
UK Farrow & Ball Holding Limited GBP 100%
UK Farrow & Ball Limited GBP 100%
UK Hempel Decorative Paints Limited GBP 100%
UK Hempel UK Ltd. GBP 100%
UK Reebor Limited GBP 1%
Ukraine Hempel Ukraine LLC UAH 100%
United Arab Emirates Hempel Paints Company Abu Dhabi L.L.C. AED 24%
United Arab Emirates Hempel Paints Emirates L.L.C. AED 49%
USA Farrow & Ball Inc. USD 100%
USA Hempel (USA), Inc. USD 100%
USA Jones-Blair Company, LLC USD 100%
Vietnam Hempel Vietnam Company Limited VND 100%
* Rottkamp Immobilien GmbH & Co. KG is exempt from its obligation to prepare, have audited and disclose annual
financial statements and a management report in accordance with the regulations applicable to partnerships
pursuant to Section 264b of the German Commercial Code (HGB).
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 106PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
5.7 Financial definitions
Financial ratios have been calculated as follows:
Organic growth =
Organic revenue
Revenue in comparative period
Organic growth is defined as growth from one year to the next, based on values in fixed
currencies for both years excluding mergers, acquisitions and divestments, etc.
Gross margin =
Gross profit
Revenue
EBITDA margin =
EBITDA
Revenue
EBITDA margin, adjusted =
EBITDA, adjusted
Revenue
EBITDA = Operating profit (and loss) before impairment, amortisation and depreciation
EBITDA, adjusted = EBITDA before special items and before adjustment for hyperinflation according to IAS 29
Operating profit margin =
Operating profit (loss)
Revenue
Return on invested capital (ROIC) =
12 month operating profit less effective tax rate + special items
(∑
i=T
Invested capital) / 12
i=T–12
Invested capital =
Intangibles + property, plant and equipment + inventories + receivables
– provisions – trade payables – other payables
Equity ratio =
Shareholders’ equity
Total assets
Leverage ratio =
Net interest-bearing debt
EBITDA before special items (incl. full-year figures from acquisitions)
Net interest-bearing debt =
Overdraft facilities + bank loans, etc. + interest-bearing payables to Group enterprises
+ lease liabilities - cash at bank and in hand
Free cash flow = Total net cash generated from operating activities less net cash used in investing activities
Cash conversion =
Total net cash flows from operating activities before financial items and tax
Total EBITDA
Financial ratios have been calculated as follows:
Accounts receivable days =
Accounts receivable x 90
Revenue (last 3 months)
Accounts payable days =
Accounts payable x 90
Cost of goods sold + change in inventory (last 3 months)
Inventory days =
Inventory x 90
Cost of goods sold (last 3 months)
Average net working capital days = Accounts receivable days + inventory days – accounts payable days (12 months average)
The following key figures are calculated as follows (EUR m) 2024 2023
Operating profit 279 234
Amortisation, depreciation and impairment, excl. discontinued operations 112 110
EBITDA = 391 344
Special items, c.f. note 2.4 - 7
Adjustment for hyperinflation according to IAS 29 1 5
EBITDA, adjusted = 392 356
The following key figures are calculated as follows (EUR m)
Borrowings 658 1,126
Lease liabilities 96 101
Cash - 229 - 223
Net interest-bearing debt = 525 1,005
EBITDA, adjusted 392 356
Adjustment for hyperinflation according to IAS 29 - 1 - 5
EBITDA before special items 391 351
Leverage ratio = 1.3 2.9
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 107PhilanthropyIntroduction Engaged ownership Financial statements
Consolidated
financial statements
Hempel Foundation financial statements
Primary statements
Key figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Income statement
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Balance sheet
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Statement of changes in equity
. . . . . . . . . . . . . . . . . . . . . . . . . . 112
Notes
1. Basis of preparation
1.1 General accounting policies
. . . . . . . . . . . . . . . . . . . . . . . . . 113
2. Results for the year
2.1 Revenue
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
2.2 Employee costs
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
2.3 Income from investments in subsidiaries
. . . . . . . . . . . . . . 116
2.4 Income tax
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
3. Operating assets and liabilities
3.1 Property, plant and equipment
. . . . . . . . . . . . . . . . . . . . . . 117
3.2 Other securities and investments
. . . . . . . . . . . . . . . . . . . . 118
3.3 Prepayments
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
3.4 Receivables
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
4. Capital structure and financing items
4.1 Base capital
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
4.2 Financial risks
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
4.3 Net financials
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
4.4 Cash and cash equivalents, net
. . . . . . . . . . . . . . . . . . . . . . 120
4.5 Bank loans, etc.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
4.6 Other payables
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
5. Other disclosures
5.1 Related parties and ownership
. . . . . . . . . . . . . . . . . . . . . . 122
5.2 Investments in subsidiaries
. . . . . . . . . . . . . . . . . . . . . . . . . . 123
5.3 Contingent liabilities and other financial obligations
. . . . 123
5.4 Events after the reporting period
. . . . . . . . . . . . . . . . . . . . . 123
5.5 Financial definitions
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 108PhilanthropyIntroduction Engaged ownership
Hempel Foundation
financial statements
Financial statements
Key figures
(EUR m) 2024 2023 2022 2021 2020
Income statement
Revenue 3 5 3 3 2
EBITDA - 3 1 1 1 -
Depreciation and amortisation - 2 2 2 1
Operating profit - 3 - 1 - 1 - - 1
Income from investments in subsidiaries - 3 - 14 - 21 55 45
Net financials 21 27 - 24 23 5
Profit before tax 15 12 - 46 78 49
Net profit for the year 15 12 - 46 78 49
Financial positions
Balance sheet total 1,222 778 848 945 855
Equity 1,159 713 763 867 778
Investment in tangible assets - - 16 - 6
Cash flows
Operating activities * * * 3 - 1
Investing activities * * * 5 17
Financing activities * * * - 8 - 10
Change in cash and cash equivalents * * * - 7
Employees
Average number of employees 19 13 12 9 8
Donations
Donations for the year 28 23 21 20 15
Ratios
Solvency ratio 94.8 91,6 90 91,8 91,1
Return on equity 1.6 1,6 - 5,6 9,5 6,5
* With reference to section 86 of the Danish Financial Statements Act, the Hempel Foundation Group
does not prepare cash flow statements for the years 2022-2024, as the Foundation is included
in the consolidated cash flow statement on page 72.
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 109PhilanthropyIntroduction Engaged ownership
Hempel Foundation
financial statements
Financial statements
Income statement
Note (EUR m) 2024 2023
2.1 Revenue 3 5
Gross profit 3 5
Distribution expenses - -
Administrative expenses - 6 - 6
2.3 Income from investments in subsidiaries - 3 - 14
4.3 Financial income 24 33
4.3 Financial expenses - 3 - 6
Profit/loss before tax 15 12
2.4 Tax on profit/loss for the year - -
Net profit/loss for the year 15 12
(EUR m) 2024 2023
Proposed distribution of profit
Proposed distribution framework 39 23
Reserve for net revaluation under the equity method - 3 - 14
Retained earnings - 20 3
Proposed distribution of profit 15 12
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 110PhilanthropyIntroduction Engaged ownership
Hempel Foundation
financial statements
Financial statements
Balance sheet
31 December
Note (EUR m) 2024 2023
Assets
Land and buildings 18 16
Other fixtures and fittings, tools and equipment - -
Property, plant and equipment in progress - -
Prepayments for property, plant and equipment - -
3.1 Property, plant and equipment 18 16
5.2 Investments in subsidiaries 999 551
3.2 Other investments 199 202
Fixed asset investments 1,198 753
Fixed assets 1,216 769
3.4 Trade receivables - -
3.4 Receivables from group enterprises - 2
3.4 Other receivables 1 -
Foundation tax 1 1
3.3 Prepayments - -
Receivables 2 3
Cash at bank and in hand 4 6
Current assets 6 9
Assets 1,222 778
Note (EUR m) 2024 2023
Liabilities and equity
4.1 Capital base 5 5
Reserve for net revaluation under the equity method 940 492
Distribution framework 40 30
Retained earnings 174 186
Equity 1,159 713
Provisions for pensions and similar obligations - -
Provisions - -
Credit institutions - -
4.5 Long-term debt - -
Credit institutions - -
Trade payables - 1
Payables to group enterprises - -
4.6 Other payables 63 64
Short-term debt 63 65
Debt 63 65
Liabilities and equity 1,222 778
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 111PhilanthropyIntroduction Engaged ownership
Hempel Foundation
financial statements
Financial statements
Statement of changes in equity
31 December
Note (EUR m) Capital base Reserve for net revaluation
under the equity method
Distribution framework Retained earnings Total
Equity at 1 January 2024 5 492 30 186 713
Exchange adjustments - 29 - - 29
Grants for the year - - - 28 - - 28
Dilution gain - 429 - - 429
Dividend from group enterprises - - 7 - 7 -
Cancelled grants for the year - - - 1 1
Net profit/loss for the year - - 3 38 - 20 15
4.1 Equity at 31 December 2024 5 940 40 174 1,159
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 112PhilanthropyIntroduction Engaged ownership
Hempel Foundation
financial statements
Financial statements
General
This section gives a summary of the significant
accounting policies. Further accounting policies
are presented in the specific notes.
The Annual Report of the Hempel Foundation for
2024 has been prepared in accordance with the
provisions of the Danish Financial Statements
Act (Årsregnskabsloven) applying to large
enterprises of reporting class C. The Annual
Report for 2024 is presented in EUR millions.
The accounting policies applied remain
unchanged from previous years.
Recognition and measurement
Revenues are recognised in the income
statement as earned. Furthermore, value
adjustments of financial assets and liabilities
measured at fair value or amortised costs are
recognised.
Moreover, all expenses incurred to achieve
the earnings for the year are recognised in the
income statement, including depreciation,
amortisation, impairment losses and provisions
as well as reversals due to changed accounting
estimates of amounts that have previously been
recognised in the income statement.
Assets are recognised in the balance sheet when
it is probable that future economic benefits
attributable to the asset will flow to the Hempel
Foundation Group, and the value of the asset can
be measured reliably.
Liabilities are recognised in the balance sheet
when it is probable that future economic benefits
will flow out of the Hempel Foundation Group,
and the value of the liability can be measured
reliably. Assets and liabilities are initially
measured at cost. Subsequently, assets and
liabilities are measured as described for each
item below.
Recognition and measurement take into account
predictable losses and risks occurring before the
presentation of the Annual Report that confirm
or invalidate affairs and conditions existing at
the balance sheet date. EUR is used as the
presentation currency. All other currencies are
regarded as foreign currencies.
Foreign currency translation
Functional and presentation currency
Items included in the financial statements of
each of the Hempel Foundation Group entities
are measured using the currency of the primary
economic environment in which the entity
operates (functional currency).
Translation of transactions and balances
Transactions in foreign currencies are translated
at the exchange rates on the transaction dates.
Gains and losses arising from differences
between the transaction date rates and the
rates on the payment dates are recognised in
financial income and expenses in the income
statement. Where foreign exchange transactions
are considered hedging of future cash flows,
the value adjustments are recognised directly
in equity.
Receivables, payables and other monetary items
in foreign currencies that have not been settled
at the balance sheet date are translated at the
exchange rates at the balance sheet date. Any
differences between the exchange rates at the
balance sheet date and the transaction date
rates are recognised in financial income and
expenses in the income statement.
Fixed assets acquired in foreign currencies are
measured at the transaction date rates.
Translation of Group companies
For foreign subsidiaries with a functional
currency other than EUR, the income statements
are translated into EUR at the exchange rates
prevailing at the end of the reporting period for
balance sheet items and at average monthly
exchange rates for income statement items in so
far that these do not deviate materially from the
actual exchange rates at the transaction date.
All exchange differences are recognised in
the income statement for the year, except for
exchange rate adjustment of investments in
subsidiaries arising from:
– foreign exchange adjustments arising from
the translation of the opening balance of
equity of foreign subsidiaries at the exchange
rates on the balance sheet date
– the translation of foreign subsidiaries’ income
statements from monthly average exchange
rates to exchange rates at the end of the
reporting period
These specific exchange rate adjustments
are recognised directly in equity. If the foreign
entity is a non-wholly owned subsidiary, the
relevant proportion of the translation difference is
allocated to the minority interest.
Other operating income
Other operating income and operating expenses
comprise items of a secondary nature relative
to the Hempel Foundation Group’s core
activities, including gains or losses on the sale of
fixed assets.
1 Basis of preparation
1.1 General accounting policies
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 113PhilanthropyIntroduction Engaged ownership
Hempel Foundation
financial statements
Financial statements
Other external expenses
Other external expenses include the year’s
expenses relating to the Hempel Foundation
Group’s core activities, including expenses
relating to administration, premises, etc.
Cash flow statement
With reference to section 86 of the Danish
Financial Statements Act, the Hempel
Foundation Group does not prepare a cash flow
statement.
1.1 General accounting policies — continued
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 114PhilanthropyIntroduction Engaged ownership
Hempel Foundation
financial statements
Financial statements
2 Results for the year
Accounting policies
Revenue from rent income is recognised in
the income statement in the periods the rent
concerns.
Revenue is recognised exclusive of VAT and net
of discounts relating to sales.
Disaggregation of revenue
The following table displays revenue
disaggregated into sales per geographical region:
(EUR m) 2024 2023
EMEA 3 5
Total revenue 3 5
Revenue disaggregated into sales per
customer category:
(EUR m) 2024 2023
Rent - 3
Other 3 2
Total revenue 3 5
2.1 Revenue
Accounting policies
Wages, salaries, social security contributions,
annual leave and sick leave, bonuses and non-
monetary benefits are recognised in the year in
which the associated services are rendered by
employees of the Hempel Foundation Group.
Where the Hempel Foundation Group provides
long-term employee benefits, the costs are
accrued to match the rendering of the services
by the employees concerned.
2.2 Employee costs
Staff expenses
(EUR m)
2024 2023
Wages and salaries 2 2
Pensions - -
Other social security expenses - -
Total 2 2
Average number of employees 19 13
Remuneration for Board of Directors
and Management 2024 (EUR t)
Hempel Foundation Hempel Invest A/S Hempel A/S
Remuneration Committees Car Remuneration Committees Remuneration Committees Total
Richard Sand 101 - 49 40 5 201 94 490
Leif Jensen 50 9 - 34 11 67 68 239
Kim Dam-Johansen 34 3 - 27 5 - - 69
Birgitte Hagemann Snabe 34 3 - 27 - - - 64
Lars Aaen 34 3 - 27 5 - - 69
Britt Meelby Jensen 11 - - 9 - 45 - 65
Sisse Fjelsted Rasmussen 22 - - 18 - - - 40
Claus Juul Petersen 34 - - 27 - - - 61
Lone Borre 34 - - 27 - - - 61
Tine Gundersen 34 - - 27 - - - 61
Total 388 18 49 263 26 313 162 1,219
Anders Holm 295
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 115PhilanthropyIntroduction Engaged ownership
Hempel Foundation
financial statements
Financial statements
2.4 Income tax
Accounting policies
The items ‘Income from investments in
subsidiaries’ in the income statement include the
proportionate share of the profit for the year less
depreciation of intercompany profits.
(EUR m) 2024 2023
Profit before tax 45 3
Tax for the year - 48 - 17
Profit after tax - 3 - 14
2.3 Income from investments
in subsidiaries
(EUR m) 2024 2023
Tax - -
Total - -
Current tax for the year - -
Deferred tax for the year - -
Adjustment in respect of previous years - -
Total - -
Income tax
Accounting policies
Income tax for the year consists of current
tax for the year and deferred tax for the year.
The tax attributable to the profit for the year is
recognised in the income statement, whereas
the tax attributable to equity transactions is
recognised directly in equity.
Deferred tax assets and liabilities
Accounting policies
Deferred income tax is measured using the
balance sheet liability method in respect of
temporary differences arising between the tax
bases of assets and liabilities and their carrying
amounts for financial reporting purposes on
the basis of the intended use of the asset and
settlement of the liability, respectively.
Deferred tax assets, including the tax base of tax
loss carryforwards, are measured at the value at
which the asset is expected to be realised, either
by eliminating the tax on future earnings or by
setting off against deferred tax liabilities within
the same legal tax entity.
Deferred tax is measured on the basis of the tax
rules and tax rates that will be effective under
the legislation at the balance sheet date when
the deferred tax is expected to crystallise as
current tax. Any changes in deferred tax due
to changes to tax rates are recognised in the
income statement.
Current tax receivables and liabilities
Accounting policies
Current tax liabilities and receivables are
recognised in the balance sheet as the expected
taxable income for the year adjusted for tax on
taxable incomes for prior years and tax paid
on account.
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 116PhilanthropyIntroduction Engaged ownership
Hempel Foundation
financial statements
Financial statements
3 Operating assets and liabilities
3.1 Property, plant and equipment
Accounting policies
Property, plants, and equipment are measured at
a cost less than accumulated depreciation and
less than any accumulated impairment losses.
Costs comprise the cost of acquisition and
expenses directly related to the acquisition up
until the time when the asset is ready for use.
In the case of assets of own construction, costs
comprise direct and indirect expenses for labour,
materials, components and sub-suppliers.
Interest expenses on loans raised directly for
financing the construction of property, plant
and equipment are recognised in costs over the
period of construction. All indirectly attributable
borrowing expenses are recognised in the
income statement.
Depreciation based on costs reduced by any
residual value is calculated on a straight-line
basis over the expected useful lives of the assets,
which are:
– Buildings (max.): 30-50 years
– Other fixtures and fittings, tools and
equipment: 3-10 years
Land is not depreciated.
Leasehold improvements are included in other
operating equipment and are recognised at
cost and depreciated over the term of the lease;
however, not exceeding 10 years.
Impairment of fixed assets
The carrying amounts of property, plant and
equipment are reviewed on an annual basis
to determine whether there is any indication
of impairment other than that expressed by
amortisation and depreciation.
If so, the asset is written down to its lower
recoverable amount.
Property, plant and equipment (EUR m) Land and
buildings
Other fixtures
and fittings, tools
and equipment
Property, plant
and equipment
in progress
Cost at 1 January 20 4 -
Exchange adjustment - - -
Additions for the year 3 - -
Disposals for the year - - -
Transfers for the year - - -
Cost at 31 December 23 4 -
Impairment losses and depreciation at 1 January 5 4 -
Depreciation for the year - - -
Reversal of impairment and depreciation of sold assets - - -
Impairment losses and depreciation at 31 December 5 4 -
Carrying amount at 31 December 18 - -
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 117PhilanthropyIntroduction Engaged ownership
Hempel Foundation
financial statements
Financial statements
3.2 Other securities and investments
Accounting policies
Other securities and capital investments,
recognised under fixed assets, consist of listed
and non-listed bonds and shares measured at
fair value on the balance sheet date. The fair
value of listed shares and bonds is calculated on
the latest listed closing quote. The fair value of
investments in other securities and investments
that are not traded often is measured with
reference to the latest publicly announced equity.
Realised and unrealised capital gains and capital
losses are included in net financials in the income
statement.
The investments are classified in accordance
with the fair value hierarchy:
Level 1: Fair value can be measured using
quoted market prices in an active
market for identical assets and
liabilities.
Level 2: Fair Value can be measured using
observable inputs other than quoted
market prices.
Level 3: Fair value is measured using
unobservable inputs.
(EUR m) 2024 2023
Costs, beginning of year 208 207
Additions for the year 67 98
Disposals for the year - 80 - 97
Exchange rate at year-end rate - 1 -
Cost at 31 December 194 208
Net revaluations, beginning of year - 6 - 18
Net revaluations for the year 11 12
Exchange rate at year-end rate - -
Net revaluations end of year 5 - 6
Carrying amount at 31 December 199 202
Investment category (EUR m) Fair value
hierarchy level
Fair value as of
31 December
2024
Net revaluation
recognised
through profit
and loss
Bonds (listed) 1 56 1
Shares (listed) 1 139 10
Other investments (listed) 1 3 -
Other investments (non-listed) 3 1 -
Total 199 11
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 118PhilanthropyIntroduction Engaged ownership
Hempel Foundation
financial statements
Financial statements
3.3 Prepayments 3.4 Receivables
Accounting policies
Prepayments comprise prepaid expenses
relating to rent, insurance premiums and interest.
Accounting policies
Receivables are measured in the balance sheet
below amortised cost and net realisable value,
which corresponds to a nominal value less than
the provisions for bad debts. Provisions for
bad debts are determined on the basis of an
individual assessment of each receivable and, in
respect of trade receivables, a general provision
is also made based on the Hempel Foundation
Group’s experience from previous years.
Receivables are recognised in the balance
sheet at amortised cost, which substantially
corresponds to the nominal value. Provisions for
estimated bad debts are made.
(EUR m) 2024 2023
Recievables of which due more than one year from the balance sheet date 1 2
Total 1 2
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 119PhilanthropyIntroduction Engaged ownership
Hempel Foundation
financial statements
Financial statements
4 Capital structure and financing items
4.1 Base capital
4.2 Financial risks
The base capital of the Hempel Foundation
Group amounts to DKK 35 million.
The Hempel Foundation Group has adopted a
conservative investment strategy and hence
is not exposed to financial risks other than
what is considered normal market risk.
4.3 Net financials
Accounting policies
Financial income and expenses are recognised in
the income statement at the amounts relating to
the financial year.
Financial income (EUR m) 2024 2023
Interest from subsidiaries - 3
External interest income 1 1
Dividend 5 5
Income from other securities and investments 18 24
Total 24 33
Financial expenses (EUR m) 2024 2023
Other financial expenses - 1
Exchange adjustments, expenses 3 5
Total 3 6
4.4 Cash and cash equivalents, net
Accounting policies
Cash and cash equivalents consist of cash at
the bank and in hand.
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 120PhilanthropyIntroduction Engaged ownership
Hempel Foundation
financial statements
Financial statements
4.5 Bank loans, etc. 4.6 Other payables
Accounting policies
Fixed-interest loans, such as mortgage loans
and loans from credit institutions, are recognised
initially at fair value net of incurred transaction
costs and subsequently at amortised cost using
the effective interest method. The difference
between the proceeds initially received and
the nominal value is recognised as a financial
expense in the income statement over the
loan term.
Mortgage loans are measured at amortised
cost, which for cash loans corresponds to the
remaining loan. Amortised cost of debenture
loans corresponds to the remaining loan
calculated as the underlying cash value of the
loan at the date of raising the loan adjusted for
depreciation of the price adjustment of the loan
made over the terms of the loan at the date of
raising the loan.
Accounting policies
Grants
Grants, which in accordance with the Hempel
Foundation Group’s purpose are approved
and disbursed on the balance sheet day, are
deducted from equity via distribution of profit
for the year. Grants, which in accordance with
the purpose of the Hempel Foundation Group
are approved on the balance sheet date and
announced to the recipient, but have not
yet been paid on the balance sheet date, are
deducted via the distribution of profit for the year
and included as a liability.
At the Board of Directors meeting at which the
Annual Report is adopted, the Board decides on
the reserve for future donations expected to be
distributed. The agreed amount is transferred
from the free reserves to the reserve for future
donations. Concurrently with grants being
announced to the recipients, the amounts are
paid or transferred as liabilities or, in exceptional
cases, as provisions regarding distributions.
Other liabilities
Other liabilities are measured at amortised cost,
substantially corresponding to the nominal value.
Other liabilities comprise donations not yet paid,
employee costs payable, VAT and duties payable,
accruals, other payables and fair values of deriva-
tive financial instruments.
Long-term bank borrowings etc. including short-term part (EUR m) 2024 2023
Due within 1 year - -
Due within 1 to 5 years - -
Due after 5 years - -
Total - -
Other payables (EUR m) 2024 2023
Grants
Accrued grants 1 Janaury 64 64
Grants during the year 28 23
Paid grants during the year - 29 - 23
Cancelled grants for the year - 1 -
Accrued grants 31 December 62 64
Other payables 1 -
Total 63 64
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 121PhilanthropyIntroduction Engaged ownership
Hempel Foundation
financial statements
Financial statements
5 Other disclosures
The Hempel Foundation Group had the following transactions
with related parties, (income)/expense:
5.1 Related parties and ownership
Related parties and ownership Basis
Controlling influence:
Hempel Invest A/S, Amaliegade 8, 1256 Copenhagen K, Denmark Related party/
subsidiary
Subsidiaries owned by Hempel Invest A/S as specified in note 5.6 in the consolidated financial statements
Hempel Ejendomme A/S, Amaliegade 8, 1256 Copenhagen K, Denmark
Related party
/subsidiary
Members of the Executive Board and Board of Directors of Hempel A/S and Hempel Invest A/S
as well as the Board of Directors of the Hempel Foundation Group are also regarded as related parties.
For remuneration to the Board of Directors, please refer to note 2.2 Employee costs.
Other related parties:
Hempel’s Employee Foundation, Amaliegade 8, 1256 Copenhagen K, Denmark Related party
Hempel’s Cultural Foundation, Amaliegade 8, 1256 Copenhagen K, Denmark Related party
Hempel’s Employee Foundation of 2017, Lundtoftegårdsvej 91, 2800 Kgs. Lyngby, Denmark Related party
(EUR m) 2024 2023
Hempel A/S Group:
Rent payments - 3
Administrative services provided by the Hempel A/S Group - -
Hempel Invest A/S:
Administrative services provided by the Hempel Foundation Group - -
Interest - - 3
Keldskov ApS
Administrative services provided by the Hempel Foundation Group - -
Brænderupvænge ApS
Administrative services provided by the Hempel Foundation Group - -
Frontier Innovations ApS
Administrative services provided by the Hempel Foundation Group - -
Hempel Invest II
Administrative services provided by the Hempel Foundation Group - -
Hempel Administration ApS
Administrative services provided by the Hempel Foundation Group - -
The remuneration of the Board of Directors and Executive Management is disclosed in note 2.2.
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 122PhilanthropyIntroduction Engaged ownership
Hempel Foundation
financial statements
Financial statements
5.2 Investments in subsidiaries
Accounting policies
Investments in subsidiaries are recognised
and measured under the equity method. This
implies that the investments are measured in the
balance sheet at the proportionate ownership
share of the net asset value of the enterprises
with deduction or addition of shares of
unrealised intercompany profits and losses.
The total net revaluation of investments in
subsidiaries is transferred upon distribution of
profit to ‘Reserve for net revaluation under the
equity method’ under equity. The reserve is
reduced by dividends distributed to the Hempel
Foundation Group and adjusted for other equity
movements in subsidiaries.
The consolidation method is applied as a
method of measurement.
Investments in subsidiaries (EUR m) 2024 2023
Cost at 1 January 59 4
Additions for the year - 55
Cost at 31 December 59 59
Value adjustments at 1 January 492 544
Exchange adjustment 29 - 38
Net profit/loss for the year - 3 - 14
Dividend to the Parent Company - 7 -
Dilution gain 429 -
Other adjustments - -
Value adjustments at 31 December 940 492
Carrying amount at 31 December 999 551
Investments in subsidiaries are specified as follows: Place of registered office Share capital Ownership
Name
Hempel Invest A/S Copenhagen EUR 15,000,000 100%
Hempel Ejendomme A/S Copenhagen DKK 800,000 100%
5.3 Contingent liabilities and other financial obligations
5.4 Events after the reporting period
The Hempel Foundation Group has an
unrecognised latent tax liability amounting to
EUR 0 million (2023: EUR 0 million). The tax
liability relates to tax provisions for future grants.
The Hempel Foundation Group expects to
neutralise this tax liability through future grants,
which is why the latent liability is not recognised.
The Hempel Foundation Group has committed
a total investment of EUR 1.34 million in other
securities.
As of 31 December 2024 the remaining
commitment is EUR 0.7 million.
No events have occurred after the balance sheet
date that could significantly affect the financial
position of the Hempel Foundation Group.
5.5 Financial definitions
Financial ratios have been calculated as follows:
EBITDA = Operating profit (and loss) before impairment, amortisation and depreciation
Solvency ratio =
Equity at year-end x 100
Total assets
Return on equity =
Net profit for the year x 100
Average equity
Hempel Foundation Annual Report 2024
Financial investments Sustainability statement Foundation governance Financial performance Statements 123PhilanthropyIntroduction Engaged ownership
Hempel Foundation
financial statements
Financial statements
CVR no. 21518018
Tel: +45 4527 3074