Årsrapport 30700228 EY Godkendt Revisionspartnerselskab Værkmestergade 25 Postboks 330, 8100 Aarhus C 2020-01-01 2020-12-31 2019-01-01 2019-12-31 21311774 LOGSTOR Holding A/S Danmarksvej 11 9670 Løgstør 1998-11-01 Vesthimmerlands Kommune EY Godkendt Revisionspartnerselskab 30700228 Værkmestergade 25 8100 Aarhus C 2021-03-02 Line Dissing Mønster Regnskabsklasse B Revisionspåtegning true true 2021-03-02 2021-03-02 CaseWare Working Papers Løgstør Kim Christensen CEO Henning Bejer Beck CFO Miguel Kohlmann Chair Joakim Olof Olsson Gustaf Backemar Aarhus Steen Skorstengaard State Authorised Public Accountant mne19709 -626000 -1386000 -124876000 297865000 1588000 14758000 14809000 16771000 -138723000 294466000 -3046000 -748000 -135677000 295214000 0 190000000 -135677000 105214000 642657000 773490000 642657000 773490000 642657000 773490000 4939000 1878000 3040000 687000 7979000 2565000 7979000 2565000 650636000 776055000 219000000 219000000 115619000 251296000 334619000 470296000 0 6000 0 6000 4401000 4401000 4401000 4401000 311325000 301062000 291000 290000 311616000 301352000 316017000 305753000 650636000 776055000 219000000 251296000 -135677000 219000000 115619000 1588000 12000000 0 2758000 14748000 16755000 61000 16000 -3040000 -687000 -6000 -61000 -3046000 -748000 1431350000 1431350000 -657860000 2317000 133150000 -788693000 642657000 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 2020. 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 2020 and of the results of the Company's operations for the financial year 1 January - 31 December 2020. 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 2020, 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 2020 and of the results of the Company's operations for the financial year 1 January - 31 December 2020 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 Oil/Gas sector, and various industrial verticals. LOGSTOR is an international enterprise with sales and production companies in Denmark, Sweden, Finland and Poland as well as sales to more than 50 markets through resellers and own sales companies in Germany, the Netherlands, Switzerland, Austria, France, Lithuania, Italy, Romania and United Kingdom. Group Financing The current loan agreement with Nordea – which is subject to financial covenants – is in place until 2024. It provides the company with enough liquidity to execute on the internal business plan. The group is showing improved performance for 2020, but in one company is a worsened expectation to future performance compared to 2019 expectations. As a result of this, some in 2019 done reversals of prior year impairment losses have been recognized, have in 2020 ended back in impairment losses. Result for the year is affected negatively by the reversals by DKK 133,150 thousand. The income statement for 2020 ended up with a loss of DKK -135,677 thousand compared to a profit of DKK 295,214 thousands the year before, and the balance sheet at 31 December 2020 show an equity of DKK 334,619 thousand. The COVID-19 outbreak is impacting the global economy and the market environment. The final impact of the coronavirus outbreak on the investments of the Company is hard to predict. The Management has considered any subsequent impact from COVID-19 and has not identified any event to be considered in the accounts or disclosed in the notes. 2021 has started well with continued focus on executing on profitable growth and increased customer focus. The results for 2021 are developing as expected. Due to the macro-economic situation including the ongoing Covid-19 Pandemic in our main markets in Europe. it is not possible to give an accurate forecast of the financial performance for 2021. However, as a result of performance enhancements in 2020, profitability is expected to improve in 2021 compared to 2020, even raw material prices are expected to be 10-20% higher than in 2020. The Company have implemented ways to pass this on to customers. The general Market outlook for district energy is also positive for 2021 and we expect a growing Market. The annual report of LOGSTOR Holding A/S for 2020 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. In accordance with section 112(1) of the Danish Financial Statements Act, the Company has not prepared consolidated financial statements. 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. Reporting currency The financial statements are presented in Danish kroner (DKK'000). 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. The Company has chosen IAS 11/IAS 18 as interpretation for revenue recognition. Revenue consists of management fees to LOGSTOR Group's subsidiaries and is recognised in the income statement when delivery is made and risk has passed to the buyer. Revenue is measured at fair value of the agreed consideration exclusive of VAT. 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. The item includes dividend received from subsidiaries in so far as the dividend does not exceed the accumulated earnings in the subsidiary in the period of ownership. 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. The Company has chosen IAS 39 as interpretation for impairment of financial receivables. Cash comprises cash and bank deposits. Financial liabilities are measured at amortised cost, which usually corresponds to nominal value. The share capital consits of shares of DKK 100 or multiplies thereof. The shares are not divided into classes. The Company's share capital has remained DKK 219,000 thousand over the past 5 years. Of the long-term liabilities, DKK 0 thousand falls due in 2020 and DKK 0 thousand 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. Current value is DKK 642,657 thousand (DKK 773,490 thousand at 31 December 2019). As security for the Group’s bank debt the receivables from group enterprises have been pledged. Current value is DKK 0 thousand (DKK 0 thousand at 31 December 2019). Guarantee for fulfilment of any obligation incurred by the Group towards banks, amounts to a maximum of DKK 358,500 thousand at 31 December 2020 (2019 DKK 358,500 thousand). Debt in other companies, which have signed this guarantee, amounts to DKK 0 thousand at 31 December 2020 (2019: DKK 0), and guarantees in the other companies, which have signed this guarantee, amounts to DKK 18,749 thousand at 31 December 2020 (2019: DKK 20,736 thousand). Guarantee provided to third party for subsidiaries' guarantees amounts to DKK 124,013 thousand at 31 December 2020 (DKK 151,150 thousand at 31 December 2019). 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 Ownership The following shareholders are registered in the Company's register of shareholders as holding minimum 5% of the votes or minimum 5% of the share capital: Name Domicile Logstor Denmark Holding ApS Løgstør 21311774 2020-01-01 2020-12-31 21311774 2019-01-01 2019-12-31 21311774 2019-12-31 21311774 2020-12-31 21311774 2020-01-01 2020-12-31 1 21311774 2020-01-01 2020-12-31 2 21311774 2020-01-01 2020-12-31 3 21311774 2020-01-01 2020-12-31 1 21311774 2020-01-01 2020-12-31 2 21311774 2020-01-01 2020-12-31 1 21311774 2020-01-01 2020-12-31 e:ProposedExtraordinaryDividendRecognisedInEquityMember 21311774 2019-01-01 2019-12-31 e:ProposedExtraordinaryDividendRecognisedInEquityMember 21311774 2020-01-01 2020-12-31 e:RetainedEarningsMember 21311774 2019-01-01 2019-12-31 e:RetainedEarningsMember 21311774 2020-01-01 e:InvestmentsInGroupEnterprisesMember 21311774 2020-01-01 2020-12-31 e:InvestmentsInGroupEnterprisesMember 21311774 2020-12-31 e:InvestmentsInGroupEnterprisesMember 21311774 2020-01-01 e:ContributedCapitalMember 21311774 2020-12-31 e:ContributedCapitalMember 21311774 2020-01-01 e:RetainedEarningsMember 21311774 2020-01-01 2020-12-31 e:RetainedEarningsMember 21311774 2020-12-31 e:RetainedEarningsMember iso4217:DKK