Årsrapport 30700228 Ernst & Young Godkendt Revisionspartnerselskab Værkmestergade 25 Postboks 330, 8100 Aarhus C 2017-01-01 2017-12-31 2016-01-01 2016-12-31 2018-05-29 21311774 LOGSTOR Holding A/S Danmarksvej 11 9670 Løgstør 1998-11-01 Vesthimmerlands Kommune Ernst & Young Godkendt Revisionspartnerselskab 30700228 Værkmestergade 25 8100 Aarhus C, Denmark 2018-05-29 Line Dissing Mønster Regnskabsklasse B Revisionspåtegning true true 2018-05-29 2018-05-29 Løgstør, Kim Christensen CEO Henning Bejer Beck CFO Miguel Kohlmann Chairman Johan Daniel Pernvi Gustaf Backemar Per Johan Agebäck Aarhus, Steen Skorstengaard Søren Jensen State Authorised Public Accountant mne19709 State Authorised Public Accountant mne34132 -65000 -1278000 3806000 5388000 36830000 18773000 12952000 23348000 27619000 -465000 5239000 -1662000 22380000 1197000 22380000 1197000 372771000 372771000 372771000 372771000 372771000 372771000 268935000 249463000 0 2822000 282000 282000 269217000 252567000 269217000 252567000 641988000 625338000 219000000 219000000 2533000 -19847000 221533000 199153000 208000 0 208000 0 0 211423000 0 211423000 288073000 48597000 129596000 165105000 2209000 540000 369000 520000 420247000 214762000 420247000 426185000 641988000 625338000 219000000 -19847000 22380000 219000000 2533000 21630000 18758000 15200000 15000 36830000 18773000 3543000 3401000 9409000 19947000 12952000 23348000 2209000 547000 3030000 -2209000 5239000 -1662000 1224602000 1178000 1225780000 -851831000 1178000 372771000 Today, the Board of Directors and the Executive Board have discussed and approved the annual report of LOGSTOR Holding A/S for the financial year 1 January - 31 December 2017. The annual report is prepared in accordance with the Danish Financial Statements Act. In our opinion, the financial statements give a true and fair view of the financial position of the Company at 31 December 2017 and of the results of the Company's operations for the financial year 1 January - 31 December 2017. Further, in our opinion, the Management's review gives a fair review of the matters discussed in the Management's review. We recommend that the annual report be approved at the annual general meeting. To the shareholders of LOGSTOR Holding A/S We have audited the financial statements of LOGSTOR Holding A/S for the financial year 1 January - 31 December 2017, which comprise income statement, balance sheet, statement of changes in equity and notes, including accounting policies. The financial statements are prepared in accordance with the Danish Financial Statements Act. In our opinion, the financial statements give a true and fair view of the financial position of the Company at 31 December 2017 and of the results of the Company's operations for the financial year 1 January - 31 December 2017 in accordance with the Danish Financial Statements Act. We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the "Auditor's responsibilities for the audit of the financial statements" section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Company in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) and the additional requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these rules and requirements. Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the Danish Financial Statements Act and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, Management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting in preparing the financial statements unless Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Our objectives are to obtain reasonable assurance as to whether the financial statements as a whole are free from material misstatement, whether due to fraud or error and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management. Conclude on the appropriateness of Management's use of the going concern basis of accounting in preparing the financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern. Evaluate the overall presentation, structure and contents of the financial statements, including the note disclosures, and whether the financial statements represent the underlying transactions and events in a manner that gives a true and fair view. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Management is responsible for the Management's review. Our opinion on the financial statements does not cover the Management's review, and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the Management's review and, in doing so, consider whether the Management's review is materially inconsistent with the financial statements or our knowledge obtained during the audit, or otherwise appears to be materially misstated. Moreover, it is our responsibility to consider whether the Management's review provides the information required under the Danish Financial Statements Act. Based on the work we have performed, we conclude that the Management's review is in accordance with the financial statements and has been prepared in accordance with the requirements of the Danish Financial Statement Act. We did not identify any material misstatement of the Management's review. The Group’s primary activity is to develop, manufacture and sell high-quality pre-insulated pipe systems for transportation of liquids and gases. LOGSTOR is the world’s leading supplier of pre-insulated pipe systems, not only for district heating, but also for district cooling, the chemical industry, the oil and gas sector, and the marine industry. LOGSTOR is an international enterprise with sales and production companies in Denmark, Sweden, Finland, Poland and Romania as well as sales to more than 50 markets through resellers and own sales companies in Germany, the Netherlands, Switzerland, Austria, France, Lithuania, Italy and United Kingdom. Group Financing Going into 2017 LOGSTOR’s loan agreement with the main bank Nordea was only running until 31 March 2018, so the company, the owners and the bank have negotiated a new long term solution in place for the coming 5-6 years – securing LOGSTOR sufficient cash to run the business and execute on the Back to Black plan. (In November 2017, a new plan was announced -“Back to Black” – the plan included that 17% of all white-collar employees was dismissed to adjust the cost base going forward and bringing LOGSTOR back in profit.) The new finance structure is signed as of May 9, 2018 and includes element of both sufficient liquidity and a rebalance of the solidity of the group: Write down of existing bank loans amounting to DKK 200 millions New shareholder loans of DKK 160 millions Replacing remaining bank loans with line of credits amounting to a total DKK 661 millions Continuation of mortgage of DKK 47 millions The loans are subject to financial covenants. The new agreement will thereby result in an increase in funding amounting to DKK 160 millions and based on the current budgets and forecasts will provide LOGSTOR with sufficient liquidity and a solid platform for the future growth. For LOGSTOR Holding A/S the adjusted equity as per 31.12.2017 would have been DKK 382 (after a Tax-exempt contribution from LOGSTOR Denmark Holding ApS) and in the Group debt are reduced with DKK 360 million had the agreement been valid of 31.12.2017 everything else equal. The 2017-result after tax for ended up with a profit of DKK 22 millions compared to a profit of DKK 1 million the year before. As described under “Group Finance” LOGSTOR has, as of 9 May 2018, signed a long term financing agreement with Nordea and the shareholders. Besides the events mentioned above, no events have occured after year-end, which would influence the evaluation of this annual report. The annual report of LOGSTOR Holding A/S for 2017 has been prepared in accordance with the provisions in the Danish Financial Statements Act applying to reporting class B entities and elective choice of certain provisions applying to reporting class C entities. The accounting policies used in the preparation of the financial statements are consistent with those of last year. Assets are recognised in the balance sheet when it is probable as a result of a prior event that future economic benefits will flow to the Company and the value of the asset can be measured reliably. Liabilities are recognised in the balance sheet when the Company has a legal or constructive obligation as a result of a prior event, and it is probable that future economic benefits will flow out of the Company, and the value of the liability can be measured reliably. On initial recognition, assets and liabilities are measured at cost. Measurement subsequent to initial recognition is effected as described below for each financial statement item. Anticipated risks and losses that arise before the time of presentation of the annual report and that confirm or invalidate affairs and conditions existing at the balance sheet date are considered at recognition and measurement. Income is recognised in the income statement when earned, whereas costs are recognised by the amounts attributable to this financial year. On initial recognition, transactions denominated in foreign currencies are translated at the exchange rates at the transaction date. Receivables and payables and other monetary items denominated in foreign currencies are translated at closing rates. The difference between the exchange rates at the balance sheet date and the date at which the receivable or payable arose or was recognised in the latest financial statements is recognised in the income statement as financial income or financial expenses. Foreign group entities When recognising foreign subsidiaries and associates that are independent entities, the income statements are translated at average exchange rates for the months that do not significantly deviate from the rates at the transaction date. Balance sheet items are translated using the exchange rates at the balance sheet date. Gross margin comprises revenue and external expenses. External expenses comprise expenses relating to the Company's ordinary activities, including expenses for premises, stationery and office supplies etc. Income from investments in group enterprises comprises dividend, etc., received from the group enterprises in the financial year. Financial income comprises interest income, including interest income on receivables from group entities, net capital gains on financial statement items in foreign currencies as well as refunds under the on-account tax scheme, etc. Financial expenses comprise interest expenses, including interest expenses on payables to group enterprises, net capital losses on financial statement items in foreign currencies as well as surcharges under the on-account tax scheme, etc. Tax for the year comprises current tax for the year and changes in deferred tax. The tax expense relating to the profit/loss for the year is recognised in the income statement, and the tax expense relating to amounts directly recognised in equity is recognised directly in equity. The Company is jointly taxed with LOGSTOR Denmark Holding A/S and all its Danish subsidiaries. The current Danish income tax is allocated among the jointly taxed entities proportionally to their taxable income (full allocation with a refund concerning tax losses). Investments in group enterprises are measured at cost and are written down to the lower of recoverable amount and carrying amount. Receivables are measured at amortised cost, usually equalling nominal value less write-downs for bad and doubtful debts. Cash comprises cash and bank deposits. Deferred tax is measured using the balance sheet liability method on all temporary differences between the carrying amount and the tax base of assets and liabilities. Where alternative tax rules can be applied to determine the tax base, deferred tax is measured based on the planned use of the asset or settlement of the liability, respectively. Deferred tax assets, including the tax base of tax loss carry-forwards, are measured at the value at which they are expected to be utilised, either through elimination against tax on future earnings or through a set-off against deferred tax liabilities within the same legal tax entity. Any deferred net assets are measured at net realisable values. Income tax payable or receivable Current tax payables and receivables are recognised in the balance sheet as tax computed on the taxable income for the year, adjusted for tax on prior-year taxable income and tax paid on account. Financial liabilities are measured at amortised cost, which usually corresponds to nominal value. Going into 2018, LOGSTOR group's loan agreement with the main bank Nordea was only running until 31 March 2018. In order to ensure a going concern for the LOGSTOR group, the Company, the owners and the bank have negotiated a new long term solution in place for the coming 5-6 years. The refinance will ensure LOGSTOR Holding sufficient cash to run the business and execute on the Back to Black plan. The new finance structure has been signed on 9 May 2018 and includes elements of both sufficient liquidity and a rebalance of the solidity of the Company. Due to the refinance agreement, the Financial Statements for 2017 has been presented as going concern. The share capital consits of shares of DKK 100 or multiplies thereof. The share are not divided into classes. The Company's share capital has remained DKK 219,000 thousand over the past 6 years. Of the long-term liabilities, DKK 216,241 thousand falls due 31 March 2018 and DKK 0 falls due for payment after more than 5 years after the balance sheet date. Other contingent liabilities The Company is jointly and severally liable with LOGSTOR A/S for the total VAT liability in the companies. The Company participates in a Danish joint taxation arrangement in which LOGSTOR Denmark Holding ApS serves as the administration company. According to the joint taxation provisions of the Danish Corporation Tax Act, the Company is therefore liable from the financial year 2012 for income taxes, etc. for the jointly taxed companies and from 1 July 2012 also for obligations, if any, relating to the withholding of tax on interest, royalties and dividend for the jointly taxed companies. As security for the Group’s bank debt the shares in the group enterprises have been pledged. As security for the Group’s bank debt the receivable from group enterprises have been pledged. Current value is DKK 264,033 thousand and DKK 247,234 thousand at 31 December 2016. Guarantee for fulfilment of any obligation incurred by the Group towards banks, a maximum of DKK 862.278 thousand. Of this amount debt in the other companies which have signeed the guarantee amounts to DKK 515,750 thousand per 31 December 2017 and DKK 407,716 thousand at 31 December 2016. Guarantee provided to third party for subsidiaries’s guarantees is DKK 475,486 thousand at 31 December 2017 and DKK 218,059 thousand at 31 December 2016. Guarantee for fulfilment of obligation incurred by LOGSTOR Polska Sp.Z.o.o. towards LOGSTOR Sverige Holding AB. The debt amounts to DKK 264,033 at 31 December 2017 and DKK 0 at 31 December 2016. Information about consolidated financial statements Parent Domicile Requisitioning of the parent company's consolidated financial statements Logstor International S.à r.l. Luxembourg The consolidated financial statements are available at www.cvr.dk 21311774 2017-01-01 2017-12-31 21311774 2016-01-01 2016-12-31 21311774 2016-12-31 21311774 2017-12-31 21311774 2017-01-01 2017-12-31 1 21311774 2017-01-01 2017-12-31 2 21311774 2017-01-01 2017-12-31 3 21311774 2017-01-01 2017-12-31 4 21311774 2017-01-01 2017-12-31 1 21311774 2017-01-01 2017-12-31 2 21311774 2017-01-01 2017-12-31 2 21311774 2017-01-01 2017-12-31 1 21311774 2017-12-31 e:CompletedDevelopmentProjectsMember 21311774 2017-01-01 2017-12-31 e:RetainedEarningsMember 21311774 2016-01-01 2016-12-31 e:RetainedEarningsMember 21311774 2017-01-01 e:InvestmentsInGroupEnterprisesMember 21311774 2017-01-01 2017-12-31 e:InvestmentsInGroupEnterprisesMember 21311774 2017-12-31 e:InvestmentsInGroupEnterprisesMember 21311774 2017-01-01 e:ContributedCapitalMember 21311774 2017-12-31 e:ContributedCapitalMember 21311774 2017-01-01 e:RetainedEarningsMember 21311774 2017-01-01 2017-12-31 e:RetainedEarningsMember 21311774 2017-12-31 e:RetainedEarningsMember iso4217:DKK