Together we build confidence in
consumer safety
Annual Report
2022/23
KELVIN HOLDCO A/S
•
Contents
1 May 2022 to 30 April 2023
ble of Contents
Management Review
OVERVIEW
FINANCIAL PERFORMANCE
Financial Statements
PARENT COMPANY
MANAGEMENT'S STATEMENT AND
AUDITOR'S REPORT
77
8
Overview
Page 3
Overview
Contents
Overview ................................................................................................................. 3
Letter from our CEO ................................... 4
Highlights 2022/23 ...................................... 5
Five Year Summary.......................................... 6
Financial Highlights ....................................... 7
Ellab Presentation ............................................. 8
Leading Supplier of Validation
and Monitoring Solutions ................... 9
Ellab at Work .......................................................... 10
Sustainability ............................................................ 11
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Page 4
Overview
Contents
Overview ................................................................................................................. 3
Letter from our CEO ................................... 4
Highlights 2022/23 ...................................... 5
Five Year Summary.......................................... 6
Financial Highlights ....................................... 7
Ellab Presentation ............................................. 8
Leading Supplier of Validation
and Monitoring Solutions ................... 9
Ellab at Work .......................................................... 10
Sustainability ............................................................ 11
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents Letter from our CEO
Despite a challenging year, Ellab stands
stronger than ever with a record topline.
A new commercial strategy, which builds
on 20 years of successful strategy, will
ensure Ellab’s continued growth.
Ellab continues to grow and build confidence in
consumer and patient safety around the globe.
Increasing legal requirements for production mean
that the demand for Ellab’s solutions is high. Despite war in Ukraine, rising energy prices
in Europe, hiking interest rates and risk of recession, it has been another good year for
Ellab, where we hit an all-time high topline.
This shows the strength and flexibility of Ellab’s portfolio. We can sell equipment, rent out
equipment, but also carry out a service for customers with our equipment. In the tough
market where customers switched from investing CAPEX to spending OPEX, we were
able to retain customers but also win new ones.
Ellab continues to be ambitious and innovative, and our compass is our mission,
Together we build con-fidence in consumer safety, and that we should add value to
our customers. When we invest in new products and teams in the future, it will be with
focus on our customers and based on the voice of customer research. Our equipment
and services secure that we will be a full solution provider in sell/rent services in all
biopharma hotspots. We have bought seven companies in the fiscal year, and we are
happy to welcome them all to Ellab. It is a geographical expansion of our Field Service
business line, and this adds to the ambition of becoming a full solution provider in all
hotspots. On the monitoring side, we are launching a completely new solution designed
for pharmaceutical companies. It is based on the voice of customer research, where we
have listened to customer needs, customer workflows and customer pains. We expect
much from this innovative solution.
Olof Ludvig Enlund
CEO
During November and December, we completed the annual Customer Satisfaction
Survey with more than 250 end customers participating. We are happy to conclude that
we once again got a very positive result. 94% of our core customers are overall satisfied
or very satisfied with Ellab, which is 4 points better than our target. Our Net Promoter
Score (NPS), measuring customer loyalty, is 39 for core customers, which is 9 points
better than our target. I want to thank everyone in Ellab for once again achieving such a
great result.
Since we are constantly growing both organically and through acquisitions, it is
increasingly important for us to look at the well-being of the employees. Therefore, we
benchmark the well-being figures, and our Engagement Survey from the fall shows that
the employees are highly engaged and appreciate the amount of influence on the job
and cooperation with other colleagues. We now have a particular focus on the areas of
mental health, communication, leadership, balance, and physical working environment.
We will continue to preserve and strengthen the strong culture that exists in Ellab,
where employees care about each other, laugh together, work together and enjoy
being together. We will continue to invest in our teams and ensure that Ellab is a great
place to work. We want to have an engaged workforce and invest in customer-faced
teams that give customers the best experience.
During the year we have taken huge steps towards our sustainability goals, and we
will continue to work hard on that agenda, because it is so important. We all need to
do our part and as a global company we have a huge responsibility to do more. We
are now neutral on scope 2, indirect emissions from purchase of electricity, heating/
cooling and consumption. We have started to design new products differently to
reduce CO2. We have applied to become part of Science Based Targets (SBTi), and our
targets on scope 1, 2 and 3 have been approved. We are now committed to addressing
global challenges related to climate change and waste, and we are in the beginning of
implementing the new EU standard on Environmental and Social Governance (CSRD)
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Page 5
Overview
Contents
Overview ................................................................................................................. 3
Letter from our CEO ................................... 4
Highlights 2022/23 ...................................... 5
Five Year Summary.......................................... 6
Financial Highlights ....................................... 7
Ellab Presentation ............................................. 8
Leading Supplier of Validation
and Monitoring Solutions ................... 9
Ellab at Work .......................................................... 10
Sustainability ............................................................ 11
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents Highlights 2022/23
Financial
Highlights
from 22/23
at a glance
+32%
7 new
companies
+18%
Revenue Adjusted EBITDA
975
mDKK
683
DKK
Proforma revenue includes
full-year impact of the
completed M&A’s in the year.
Reported revenue includes
completed M&A’s as of their
respective closing dates.
Proforma EBITDA includes
full-year impact of the
completed M&A’s in the year.
Reported EBITDA includes
completed M&A’s as of their
respective closing dates.
M&A activity
During 2022/23 the Ellab Group continued
its M&A agenda adding seven new
companies to the Group. The acquired
companies has positioned the Group to
further growth.
858
mDKK
651
DKK
320
mDKK
255
DKK
293
mDKK
248
DKK
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Page 6
Overview
Contents
Overview ................................................................................................................. 3
Letter from our CEO ................................... 4
Highlights 2022/23 ...................................... 5
Five Year Summary.......................................... 6
Financial Highlights ....................................... 7
Ellab Presentation ............................................. 8
Leading Supplier of Validation
and Monitoring Solutions ................... 9
Ellab at Work .......................................................... 10
Sustainability ............................................................ 11
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Five Year Summary
DKK million
2022/23
12 months
2021/22
12 months
2020/21
12 months
2019/20
16 months
2018
7 months
Key figures
Income statement
Revenue 858.2 650.8 497.2 257.0 0.0
Gross profit 510.0 415.9 326.4 170.4 0.0
Operating profit 138.2 136.6 109.3 1.0 0.0
Net financials (48.1) (59.5) (17.1) (37.8) 0.0
Net profit for the year 64.7 43.1 53.4 (42.5) (0.0)
Balance Sheet
Balance sheet total 3,174.7 2,755.1 2,658.0 2,638.7 0.1
Equity 1,656.6 1,590.5 1,567.2 1,507.5 0.0
Investment in property, plant and equipment (37.4) (21.5) (21.8) (17.9) 0.0
Cash flows
Cash flow from operating activities 85.9 127.4 119.0 (58.0) 0.0
Cash flow from investing activities (395.0) (92.2) (53.0) (1,776.8) 0.0
Cash flow from financing activities 311.0 (36.2) (31.5) 1,909.6 0.0
Cash flow for the year 1.9 (1.0) 34.5 74.8 0.0
Number of employees 637 456 373 270 0
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Page 7
Overview
Contents
Overview ................................................................................................................. 3
Letter from our CEO ................................... 4
Highlights 2022/23 ...................................... 5
Five Year Summary.......................................... 6
Financial Highlights ....................................... 7
Ellab Presentation ............................................. 8
Leading Supplier of Validation
and Monitoring Solutions ................... 9
Ellab at Work .......................................................... 10
Sustainability ............................................................ 11
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
DKK million
2022/23
12 months
2021/22
12 months
2020/21
12 months
2019/20
16 months
2018
7 months
Ratios
Adjusted EBITDA 293.0 248.5 202.9 103.0 (0.0)
Adj. EBITDA margin 34.1% 38.2% 40.8% 40.1% N/A
Solvency ratio 52.2% 57.7% 59.0% 57.1% N/A
Return on equity 4.0% 2.7% 3.5% -5.6% N/A
Financial Highlights
The Group was etablished on 11 June 2018, and the financial year 2018
only covers the period 11 June to 31 December 2018 (7 months).
The year 2019/20 covers the period 1 January 2019 - 30 April 2020 (16
months).
Through the subsidiary Kelvin BidCo A/S, the Company acquired Saballe
TopCo ApS in liquidation, the owner of Ellab A/S, on 26 September 2019.
Hence the figures in the income statement for 2019/20 do not cover a full 12
months owner period.
The ratios have been prepared in accordance with the recommendations and
guidelines issued by the Danish Society of Financial Analysts. For definitions,
see under Accounting Policies.
The above numbers are not proforma adjusted and do not include the full year
impact of acquired entities during the year.
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Page 8
Overview
Contents
Overview ................................................................................................................. 3
Letter from our CEO ................................... 4
Highlights 2022/23 ...................................... 5
Five Year Summary.......................................... 6
Financial Highlights ....................................... 7
Ellab Presentation ............................................. 8
Leading Supplier of Validation
and Monitoring Solutions ................... 9
Ellab at Work .......................................................... 10
Sustainability ............................................................ 11
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents Global Expertise with Local Reach
80+
Offices and
distributors worldwide
United Kingdom Denmark
• Hillerød, Global HQ
• Lyngby
USA
• Colorado
• Kansas City
• Massachusetts
• New Hampshire
• New York
• Texas
• Pennsylvania
• North Carolina
Spain
• Madrid
Italy
• Milano
Germany
• Bockel
• Ravensburg
Switzerland
• Muttenz
Austria
• Wien
France
• Compiègne
Benelux
• Hengelo, NL
• Arnhem, NL
• Hertfordshire
• Cheshire
Ireland
• Co. Cork
• Dunboyne
• Kells
- Ellab Offices
- Countries with Ellab
Distributors
Ellab Presentation
UAE Singapore Philippines
• DAFZ, Dubai • Singapore City • Laguna
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Our offering - with our equipment and services we help our customers to get confidence in consumer safety
Leading Supplier of Validation and Monitoring Solutions
Equipment
Field Services & Consulting
• Skilled field service engineers
conducting Commissioning,
Qualification and Validation
(CQV) at the customer’s facilities.
• Long-term staffing assignments.
• Field calibration of sensors and
various equipment.
• GMP Consulting.
• Process/ Equipment
Engineering.
• Various other consulting or
project management offerings
within the V-model.
• Industry-leading accuracy for measuring temperature,
pressure, humidity, conductivity, CO2, and vacuum.
• Wide range of applications within Life Science and Food
Manufacturing.
• Qualify or re-qualify storage, chambers, or manufacturing
equipment, as well as validation of product quality.
• Rental of validation equipment is also available.
Thermocouple system
• Continuously monitoring
of critical processes or
environments.
• Includes extensive measurement
options, such as temperature,
humidity, differential pressure,
CO2, and flood & leak.
Data Loggers Monitoring CQV & Calibration Consulting
Pr
Page 9
Overview
Contents
Overview ................................................................................................................. 3
Letter from our CEO ................................... 4
Highlights 2022/23 ...................................... 5
Five Year Summary.......................................... 6
Financial Highlights ....................................... 7
Ellab Presentation ............................................. 8
Leading Supplier of Validation
and Monitoring Solutions ................... 9
Ellab at Work .......................................................... 10
Sustainability ............................................................ 11
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Page 10
Overview
Contents
Overview ................................................................................................................. 3
Letter from our CEO ................................... 4
Highlights 2022/23 ...................................... 5
Five Year Summary.......................................... 6
Financial Highlights ....................................... 7
Ellab Presentation ............................................. 8
Leading Supplier of Validation
and Monitoring Solutions ................... 9
Ellab at Work .......................................................... 10
Sustainability ............................................................ 11
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
At Ellab our mission is to build confidence in customer safety. We do that by adding
value to our customers through our equipment and service offering, as our offering
can reduce down-time/time-to-market and increase the quality and reliability of the
validation and monitoring at our customers.
As a validation and monitoring tech and service partner, we help biopharmaceutical
companies meet compliance requirements and deadlines today, and tomorrow –
allowing us to build confidence in patient safety together.
One way we’ve successfully done this, was during the COVID-19 pandemic, where
our solutions enabled our customers to validate that their freezers were safe to store
Covid vaccines – ultimately ensuring that they were safe use.
Ellab at Work
Ellab’s supply chain
role during the global
Covid-19 response
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Page 11
Overview
Contents
Overview ................................................................................................................. 3
Letter from our CEO ................................... 4
Highlights 2022/23 ...................................... 5
Five Year Summary.......................................... 6
Financial Highlights ....................................... 7
Ellab Presentation ............................................. 8
Leading Supplier of Validation
and Monitoring Solutions ................... 9
Ellab at Work .......................................................... 10
Sustainability ............................................................ 11
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
CSR
Working Together to
Keep the World Safe
for Consumers
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Page 12
Overview
Contents
Overview ................................................................................................................. 3
Letter from our CEO ................................... 4
Highlights 2022/23 ...................................... 5
Five Year Summary.......................................... 6
Financial Highlights ....................................... 7
Ellab Presentation ............................................. 8
Leading Supplier of Validation
and Monitoring Solutions ................... 9
Ellab at Work .......................................................... 10
Sustainability ............................................................ 11
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Sustainability
80,000+
Social
Governance
Cyber Security
Training
Global Policies
New Sickness Leave
Policy
New Life Phase Policy
Science Based
Targets
Environmental
Electric Certificates Green Electricity
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Page 13
Overview
Contents
Overview ................................................................................................................. 3
Letter from our CEO ................................... 4
Highlights 2022/23 ...................................... 5
Five Year Summary.......................................... 6
Financial Highlights ....................................... 7
Ellab Presentation ............................................. 8
Leading Supplier of Validation
and Monitoring Solutions ................... 9
Ellab at Work .......................................................... 10
Sustainability ............................................................ 11
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Sustainability
Page 14
Overview
Contents
Overview ................................................................................................................. 3
Letter from our CEO ................................... 4
Highlights 2022/23 ...................................... 5
Five Year Summary.......................................... 6
Financial Highlights ....................................... 7
Ellab Presentation ............................................. 8
Leading Supplier of Validation
and Monitoring Solutions ................... 9
Ellab at Work .......................................................... 10
Sustainability ............................................................ 11
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Sustainability
Page 15
Overview
Contents
Overview ................................................................................................................. 3
Letter from our CEO ................................... 4
Highlights 2022/23 ...................................... 5
Five Year Summary.......................................... 6
Financial Highlights ....................................... 7
Ellab Presentation ............................................. 8
Leading Supplier of Validation
and Monitoring Solutions ................... 9
Ellab at Work .......................................................... 10
Sustainability ............................................................ 11
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Sustainability
Financial Performance
Page 16
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Management’s Review ............................. 17
Board of Directors ............................................ 20
Executive Board ................................................... 21
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial PerformanceFinancial Performance
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Page 17
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Management’s Review ............................. 17
Board of Directors ............................................ 20
Executive Board ................................................... 21
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents Management’s Review
Key activities
“Kelvin HoldCo A/S (“the Company”) is the ultimative parent
company of the Group (Ellab Group). Ellab Group is the market
leading player within high-end validation and monitoring solutions,
as well as field service & consulting to primarily life science
customers. Ellab serves the top 40 pharma and top 20 biotech
companies in the world.
Ellab was established in Denmark in 1949. Today, the Group is
headquartered in Hillerød, Denmark, and holds worldwide presence
with R&D and production in Denmark and UK and has 24 sales
and service centers and over 50 distributors around the globe. The
company employs almost 800 people.
“Together we build confidence in consumer safety” - is the overall
purpose of the Ellab Group.
Business lines
Validation Solutions
Validation Solutions are mission-critical validation systems, used
for measuring and documenting critical parameters, such as
temperature, pressure and humidity, through an industry leading
and highly automated software suite.
Monitoring Solutions
Monitoring Solutions are continuous monitoring of critical processes
covering temperature, humidity, pressure and CO2 in a hybrid on-
premises/cloud IoT solution.
Field Services & Consulting:
Field Services & Consulting are services within calibration, validation
and GMP consulting, which are essential to regulatory compliance.
Overview
Ellab handles sales and services by its own sales companies in the
Nordics, Germany, Austria, Switzerland, Italy, UK, Ireland, France,
Benelux, Spain, North America, Middle East, Singapore, and
Philippines. Other markets are handled through partnerships with
independent distributors.
Production, assembly, quality inspection and development of Ellab
Validation Equipment (Data Loggers and Thermocouple Systems)
take place in the facility in Hillerød, Denmark and production,
assembly, quality inspection of Monitoring Systems take place in the
facility in Letchworth, United Kingdom.
Development in the year
During 2022-23 the Group has grown significantly through organic
growth and through M&A. The market that Ellab is supporting is a
very resilient market – and Ellab has a strong position in the market,
which is why Ellab continues to achieve growth, despite the tough
economic environment, the war in Ukraine and the increasing
interest rates and inflation.
In 2022/23 significant investments were made to support the future
growth of the Group, such as expanding the sales organization
into new regions, further investments in product and software
development and investments in supporting functions.
M&A is an important part of the strategy for Ellab as it is a way
for Ellab to do fast geographical expansion. During 2022/23 the
following companies were added to the Ellab Group:
• June 2022, Causa. Dutch company specialized in qualification
of disinfection and sterilization equipment in the healthcare,
pharma and food industries.
• July 2022, Project Support. A Danish company specialized in
validation, calibration, consulting as well as equipment rental
solutions to the pharmaceutical and biotech industries.
• September 2022, CalX. An Irish provider of field calibration and
complete calibration management.
• November 2022, Integrated Commissioning & Qualification
Corporation. A US validation service and consulting company.
• December 2022, Evolution Scientific. A US company
specializing in preventative and corrective maintenance,
calibration and metrology, certification, validation and technical
staffing.
• March 2023, Complete Technical Solutions. An English
full turnkey solution for Commissioning, Qualification and
Validation (CQV).
• April 2023, PharmaSys. A US validation service and consulting
company within commissioning, qualification, and validation
(CQV) services.
Revenue amounts to DKK 858.2 million and has increased by DKK
207.4 million (+32%) compared to last year. The increase is driven by
growth in the business lines Validation Solutions and Field Service
& Consulting, especially in the US, as well as acquisitions during the
year and the full year impact of last year’s acquisitions.
Operating profit before special items amounts to DKK 174.7 million
and has increased by DKK 15.3 million (+10%) compared to last
year driven by the revenue growth partly offset by higher operating
expenses.
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Performance
Page 18
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Management’s Review ............................. 17
Board of Directors ............................................ 20
Executive Board ................................................... 21
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents Management’s Review
The adjusted EBITDA (note 7) for the period amounts to DKK 293.0
million and has increased by DKK 44.5 million (+18%). The adjusted
EBITDA margin for the period amounts to 34.1% compared to 38.2%
for the same period last year. The lower margin is explained by the
impact from acquisitions and organic growth within Field Service
& Consulting, where the margins are lower compared to Validation
and Monitoring Solutions, as well as the investments in commercial
and supporting functions.
The reported revenue and adjusted EBITDA do not include 12
months from the acquisitions during the financial year. The proforma
table is to disclose the full-year revenue and adj. EBITDA run rate
entering the next financial year.
Special items amounted to DKK 36.5 million and mainly consist
of acquisition and integration costs for M&A, severance costs and
implementation/roll-out of new global ERP solution. Net financial
items amount to a cost of DKK 48.1 million compared to a cost
of DKK 59.5 million last year despite higher interest costs from
increased borrowing and a higher interest rate level, as the net
impact from exchanges rates was a gain compared to a loss last
year. Income taxes for the year amount to a cost of DKK 25.4 million,
equivalent to a tax percentage of 28.2% versus 44.1% last year. The
decline in the tax percentage compared to last year was explained
by the specific acquisition structures of intellectual properties sold
to Denmark during the year as part of the Group’s transfer pricing
setup as well as a lower negative impact from interest deduction
limitation.
Net profit for the year amounts to DKK 64.7 million compared to
DKK 43.1 million for the same period last year. Total comprehensive
income amounts to DKK 61.9 million and consists of the net
profit for the year and a negative exchange rate adjustments
of net investments in foreign operations.
Total assets amount to DKK 3,174.7 million as per 30 April 2023
compared to DKK 2,755.1 million as per 30 April 2022. Total assets
are impacted by the seven acquisitions completed during the
year and an increasing activity level. Total equity amounts to DKK
1,656.6 million as per 30 April 2023 and has increased by DKK 66.1
million compared to the same period last year explained by the
positive comprehensive income for period.
Cash flow from operating activities for the financial year amounts to
DKK 85.9 million (2021/22 DKK 127.4 million), as higher earnings
could not compensate for a more negative impact from net working
capital, explained by the increasing activity level, as well as higher
financial expenses paid.
Cash flow from investing activities for the financial year was an
outflow of DKK 395.0 million (2021/22 DKK 92.2 million). The higher
outflow is mainly due to an increasing level of M&A.
Cash flow from financing activities amounts to an inflow of DKK
311.0 million (2021/22 outflow of DKK 36.2 million) as the Group has
increased its financing to facilitate the M&A activity.
Expectations from last year and development for the coming year
The actual organic growth in EBITDA was 8% compared to the
expectations for the year of 15%. Management considers the result
to be satisfactory, with acknowledgement of the challenging macro
situation during the year, as the Group in 2022-23 continued to
grow organically, onboarded seven new companies and invested
significantly in the organization.
Management expects the Group to continue the positive
development in revenue, EBITDA and net profit as the historical
organic growth is expected to continue, supported by the
underlying market growth and the strong position Ellab has in this
market. The group will also continue to do geographical expansion
through M&A in 2023/24.
The organic activity level of revenue is expected to increase
by approx. 15% - and adjusted EBITDA is expected to increase
organically by more than 20% compared to the 2022/23 end run-
rate.
Operating risk and financial risks
With activities around the world Ellab has the risks inherent in
international activities, including currency risks, particular in USD
and GBP. The Ellab Group is not particularly exposed to changes in
interest rates.
Research and development
The Ellab Group continuously invest significantly in Research and
Development. Research and Development costs for 2022/23
amount to DKK 18.5 million (DKK 21.7 million) and relates to the
development of software, products and processes within Validation
and Monitoring Solutions as well as Field Service & Consulting.
The decrease is explained by a higher level of capitalized projects
during the year, mainly our new monitoring solution Trackview Pro.
Gross R&D expenses are in line with last year.
DKK million Reported M&A impact Proforma
Revenue 858 117 975
Adj. EBITDA 293 27 320
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Performance
Page 19
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Management’s Review ............................. 17
Board of Directors ............................................ 20
Executive Board ................................................... 21
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Intellectual capital resources of importance for future earnings
The Group’s policy is a continuous development of products and
processes. It is therefore crucial that the Group in the future can
attract and retain competent and motivated employees, including
engineers.
Intellectual properties
Due to a growing organization and market presence, and in order
to strategically harvest the benefits of such growth, the operating
model of Ellab has naturally evolved to a more centralized operating
model over time, with a number of key functions being performed
centrally and key strategic and operational decisions taken centrally
by the Company for the global organization.
Ellab A/S is generally the legal and economic owner of the Group’s
intangible property rights. This ownership is aligned to and
supported by the fact that Ellab A/S also initiates, manages, finances,
oversees and controls all research and development activities within
the Group.
Uncertainty relating to recognition and measurement
Recognition and measurement in the Annual Report have not been
subject to any uncertainty.
Unusual events
The Group and the results of the activities and cash flows of the
Group for the financial year for 2022/23 have not been affected by
any unusual events.
Subsequent events
On 20 June 2023, the owners of the Kelvin Group, EQT Mid Market
Europe Fund (EQT), signed an agreement regarding the sale of
Kelvin Group to Novo Holdings A/S. Novo Holdings is a holding and
investment company that is responsible for managing the assets and
the wealth of the Novo Nordisk Foundation.
The Group’s borrowings from financial institutions include a change
of control clause, which stipulates that the borrowings will become
due immediately after the change of control. The closing date of the
sale of Kelvin Group is not yet determined.
No other events materially affecting the assessment of the Annual
Report have occurred after the balance sheet date.
Ownership
In September 2019, EQT Mid Market Europe GP B.V., acting in its
capacity as general partner of EQT Mid Market Europe Limited
Partnership (“EQT”) acquired Ellab Group. EQT are members of
the organization for venture capital and private equity (DVCA).
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Performance
Page 20
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Management’s Review ............................. 17
Board of Directors ............................................ 20
Executive Board ................................................... 21
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Bo Harald Peter Risberg
Chairperson
Independent: Yes
Former Chairperson Dellner Couplers, former
Chairperson Piab, former CEO Hilti Corporation
Rikke Kjær Nielsen
Boardmember
Independent: No
EQT
Anna Karolina Levander
Boardmember
Independent: Yes
Former CSO Envirotainer, former VP Sales Thermo
Fisher Scientific
Peter Krogh
Boardmember
Independent: No
Chairperson of the Audit Committee
Former CEO Ellab
Sarah Katherine Newbitt
Boardmember
Independent: Yes
Non executive director Azurite, former non executive
director Dorner, former VP Unilever
Board of Directors and Executive Board
Board of Directors
Board of Directors
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Performance
Page 21
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Management’s Review ............................. 17
Board of Directors ............................................ 20
Executive Board ................................................... 21
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents Board of Directors and Executive Board
Executive Board
Olof Ludvig Enlund
CEO
Joined Ellab in Oct 2020
Ex General Manager Of Digital Solutions & Head Of Equipment
Solutions at ESAB, previously worked at McKinsey and Accenture
Management Consulting
Lars Normand Hansen
CTO
Joined Ellab in May 2000
Ex Vice President Engineering at SFK Technology
Andreas Morthorst
CFO
Joined Ellab in Mar 2022
Ex CFO Tivoli, Sr. VP Scandinavian Tobacco Group, Sr. Manager for
Audit & Advisory at PWC, Authorized Public Accountant
Executive Board
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Performance
Financial Statements
Page 22
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 23
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Consolidated Income Statement
1 May - 30 April
DKK million Note 2022/23 2021/22
Revenue 3 858.2 650.8
Cost of production 4, 5 (348.2 ) (234.9 )
Gross profit 510.0 415.9
Distribution costs 4, 5 (217.2 ) (196.0 )
Development costs 4, 5 (18.5 ) (21.7 )
Administration costs 4, 5 (99.6 ) (38.8 )
Operating profit before special
items 174.7 159.4
Special items 6 (36.5 ) (22.8 )
Operating profit 138.2 136.6
Financial income 8 61.3 21.2
Financial expenses 8 (109.4 ) (80.7 )
Profit before tax 90.1 77.1
Income taxes 9 (25.4 ) (34.0 )
Net profit for the year 64.7 43.1
Adjusted EBITDA 7
Consolidated Statement of Comprehensive Income
1 May - 30 April
DKK million Note 2022/23 2021/22
Net profit for the year
Other comprehensive income
Items that will be recycled subsequently to
the Consolidated Income Statement, when
specific conditions are met:
Foreign exchange adjustments on net
investments in foreign operations (2.8 ) 8.5
Other comprehensive income for
the year, net of tax (2.8 ) 8.5
Total comprehensive income for
the year 61.9 51.6
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Income Statement
Page 24
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Consolidated Balance Sheet at 30 April
Assets
DKK million Note 2023 2022
Intangible assets 10 2,636.4 2,332.8
Property, plant and equipment 11 64.9 48.3
Right-of-use assets 13 60.9 53.6
Other receivables 2.8 2.3
Deferred tax assets 12 0.6 1.6
Total non-current assets
Inventories 14 57.8 45.5
Trade receivables 15 214.3 143.5
Contract assets 16 12.3 7.2
Income tax receivables 1.4 1.3
Other receivables 3.8 1.5
Prepayments 8.8 7.1
Cash and cash equivalents 110.7 110.4
Total current assets
Total assets
DKK million Note 2023 2022
Share capital 17 156.5 155.5
Foreign currency translation reserve
Retained earnings
Total equity
Borrowings 18 1,032.9 731.4
Lease liabilities 13 49.9 48.1
Deferred tax liabilities 12 235.6 220.2
Total non-current liabilities
Trade payables 28.9 28.3
Lease liabilities 13 18.0 11.4
Income tax payables 32.0 44.0
Other payables 106.4 70.9
Deferred revenue 16 14.4 10.3
Total current liabilities
Total liabilities 1,518.1 1,164.6
Total equity and liabilities 3,174.7 2,755.1
Consolidated Balance Sheet at 30 April
Equity and Liabilities
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Balance Sheet
Page 25
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Consolidated Cash Flow Statement
1 May - 30 April
DKK million Note 2022/23 2021/22
Net cash flow for the year 1.9 (1.0 )
Cash and cash equivalents,
beginning of the year
Effects of exchange rate changes on
cash and cash equivalents
(1.6 ) 3.6
Net cash flow for the year 1.9 (1.0 )
Cash and cash equivalents at end
of the year 110.7 110.4
Cash and cash equivalents
comprise the following:
Cash at bank and in hand 110.7 110.4
Cash and cash equivalents at end
of the year 110.7 110.4
DKK million Note 2022/23 2021/22
Net profit for the year 64.7 43.1
Adjustments 27 189.3 187.7
Changes in net working capital 28 (57.6 ) (20.6 )
Financial income received 1.7 3.8
Financial expenses paid (58.9 ) (34.6 )
Income taxes paid (53.3 ) (52.0 )
Cash flow from operating
activities 85.9 127.4
Purchase of intangible assets 10 (12.8 ) (11.6 )
Purchase of property, plant and
equipment 11 (37.4 ) (21.5 )
Payment for acquisition of
subsidiaries, net of cash acquired 21 (345.9 ) (59.1 )
Sale of property, plant and
equipment 1.1 0.0
Cash flow from investing activities (395.0 ) (92.2 )
New financing 318.5 0.0
Principal elements of lease payments 13 (11.7 ) (7.9 )
Acquisition of treasury shares (43.5 ) (44.3 )
Disposal of treasury shares 18.1 16.0
Cash capital increase 29.6 0.0
Cash flow from financing activities 311.0 (36.2 )
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Cash Flow Statement
Page 26
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Consolidated Statement of Changes in Equity
DKK million Note Share capital
Foreign
currency
translation
reserve
Retained
earnings Total
Equity at 1 May 2022 17 155.5 5.4 1,429.6 1,590.5
Profit for the year 0.0 0.0 64.7 64.7
Other comprehensive income 0.0 (2.8 ) 0.0 (2.8 )
Total comprehensive income for the year
Capital increase 1.0 0.0 28.6 29.6
Acquisition of treasury shares 0.0 0.0 (43.5 ) (43.5 )
Disposal of treasury shares 0.0 0.0 18.1 18.1
Transactions with owners
Equity at 30 April 2023
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Changes in Equity
Page 27
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Consolidated Statement of Changes in Equity
DKK million Note Share capital
Foreign
currency
translation
reserve
Retained
earnings Total
Equity at 1 May 2021 17 155.5 (3.1 ) 1,414.8 1,567.2
Profit for the year 0.0 0.0 43.1 43.1
Other comprehensive income 0.0 8.5 0.0 8.5
Total comprehensive income for the year
Capital increase 0.0 0.0 0.0 0.0
Acquisition of treasury shares 0.0 0.0 (44.3 ) (44.3 )
Disposal of treasury shares 0.0 0.0 16.0 16.0
Transactions with owners
Equity at 30 April 2022
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 28
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents Notes - Group
1. Accounting policies
2. Critical accounting estimates and judgements
3. Revenue from contracts with customers
4. Employee costs
5. Amortisation, depreciation and impairment losses
6. Special items
7. Adjusted EBITDA
8. Financial income and expenses
9. Income taxes
10. Intangible assets
11. Property, plant and equipment
12. Deferred tax
13. Leases
14. Inventories
15. Trade receivables
16. Contract balances
17. Share capital and treasury shares
18. Borrowings
19. Financial risk management
20. Capital management
21. Business Combinations
22. Commitments and contingent liabilities
23. Fee to auditors appointed at the general meeting
24. Changes in liabilities arising from financing activities
25. Related parties
26. Events after the balance sheet date
27. Cash flow statement - adjustments
28. Cash flow statement - changes in net working capital
29. List of group companies
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 29
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
1. Accounting policies
The consolidated financial statements of the group have
been prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted by the EU as well
as additional Danish disclosure requirements applying to
entities of large enterprises reporting in class C.
The annual report has been prepared under the historical
cost convention, except for derivative financial instruments
that are measured at fair value. The financial statements are
presented in million Danish Kroner (mDKK) with one digit,
which is also the parent company’s functional currency.
Basis of consolidation
The consolidated financial statements include the parent
company, Kelvin HoldCo A/S, and its subsidiaries (the
Group). Subsidiaries are all entities over which the Group
has control. The Group controls an entity when the group
is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those
returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which
control is transferred to the Group. They are deconsolidated
from the date that control ceases.
Intercompany transactions, balances and unrealised gains
on transactions between group companies are eliminated.
Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the transferred asset.
Foreign currency translation
Functional currency
Items included in the financial statements of each of the Group’s
entities are measured using the currency of the primary economic
environment in which the entity operates (‘the functional
currency’).
Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement
of such transactions and from the translation of monetary assets
and liabilities denominated in foreign currencies at year end
exchange rates are generally recognised in profit or loss.
The results and financial position of foreign operations that have
a functional currency different from the presentation currency
are translated into the presentation currency as follows:- assets
and liabilities for each balance sheet presented are translated
at the closing rate at the date of that balance sheet- income
and expenses for each statement of profit or loss and statement
of comprehensive income are translated at average exchange
rates (unless this is not a reasonable approximation of the
cumulative effect of the rates prevailing on the transaction dates,
in which case income and expenses are translated at the dates
of the transactions), and- all resulting exchange differences are
recognised in other comprehensive income.
Business Combinations
The acquisition method of accounting is used to account for all
business combinations, regardless of whether equity instruments
or other assets are acquired. The consideration transferred for the
acquisition of a subsidiary comprises the:- fair values of the assets
transferred- liabilities incurred to the former owners of the acquired
business- equity interests issued by the group- fair value of any asset
or liability resulting from a contingent consideration arrangement,
and- fair value of any pre-existing equity interest in the subsidiary.
currency’).
Identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are, with limited exceptions,
measured initially at their fair values at the acquisition date. The group
recognises any non-controlling interest in the acquired entity on
an acquisition-by-acquisition basis either at fair value or at the non-
controlling interest’s proportionate share of the acquired entity’s net
identifiable assets.
Acquisition-related costs are expensed as incurred.
The excess of the:- consideration transferred,- amount of any non-
controlling interest in the acquired entity, and- acquisition-date fair
value of any previous equity interest in the acquired entityover the fair
value of the net identifiable assets acquired is recorded as goodwill. If
those amounts are less than the fair value of the net identifiable assets
of the business acquired, the difference is recognised directly in profit
or loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred,
the amounts payable in the future are discounted to their present
value as at the date of exchange. The discount rate used is the
entity’s incremental borrowing rate, being the rate at which a similar
borrowing could be obtained from an independent financier under
comparable terms and conditions.
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 30
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Business Combinations (continued)
Contingent consideration is classified either as equity or a
financial liability. Amounts classified as a financial liability are
subsequently remeasured to fair value, with changes in fair
value recognised in profit or loss.
If the business combination is achieved in stages, the
acquisition date carrying value of the acquirer’s previously
held equity interest in the acquiree is remeasured to fair
value at the acquisition date. Any gains or losses arising
from such measurement are recognised in profit or loss.
Cost of production
Cost of production comprises costs incurred to achieve
revenue for the year. Cost comprises raw materials,
consumables, direct labour costs and indirect production
costs such as maintenance and depreciation, etc, as well as
operation, administration and management of factories.
Distribution costs
Distribution expenses from sales units comprise costs in the
form of salaries to sales and distribution staff, advertising
and marketing expenses, sales office expenses as well as
operation of motor vehicles, depreciation, etc. Amortisation
of intangible assets, except for development projects, are
included in distribution costs.
Development costs
Research and development costs comprise research costs,
costs relating to development projects that do not qualify
for recognition in the balance sheet as well as amortisation
and impairment of development projects.
Administrative costs
Administrative expenses comprise expenses for
Management, administrative staff, office expenses,
depreciation, etc.
Income tax
The income tax expense or credit for the period is the tax payable
on the current period’s taxable income based on the applicable
income tax rate for each jurisdiction adjusted by changes in
deferred tax assets and liabilities attributable to temporary
differences and to unused tax losses.
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 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.
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. Deferred income tax is 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 nor taxable profit or
loss. Deferred income tax is determined 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 assets are recognised only if it is probable that
future taxable amounts will be available to utilise those temporary
differences and losses.
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.
Current and deferred tax is recognised in profit or loss, except to the
extent that it relates to items recognised in other comprehensive income
or directly in equity. In this case, the tax is also recognised in other
comprehensive income or directly in equity, respectively.
Impairment of non-current assets
Goodwill and development projects in progress are not subject to
amortisation and 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 which are largely independent of the cash
inflows from other assets or groups of assets (cash-generating units).
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.
Prepayments
Prepayments recognised as an asset comprise prepaid expenses
regarding subsequent financial reporting years.
Cash and cash equivalents comprises cash and bank balances.
Cash and cash equivalents comprises cash and bank balances.
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 31
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Equity
Share capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares are shown in
equity as a deductions, net of tax, from the proceeds.
Foreign currency translation reserve
Exchange differences arising on translation of the foreign
controlled entity are recognised in other comprehensive
income and accumulated in a separate reserve within equity.
The cumulative amount is reclassified to profit or loss when
the net investment is disposed of.
Dividends
Provision is made for the amount of any dividend declared,
being appropriately authorised and no longer at the
discretion of the entity, on or before the end of the reporting
period but not distributed at the end of the reporting
period.
Treasury shares
Cost of acquisition and consideration received are
recognised directly in equity as retained earnings.
Gains and losses on sale are thus recognised directly in
equity.
Financial liabilities
Borrowings are initially recognised at fair value which
is generally proceeds received, and net of transaction
costs incurred. Subsequently, borrowings are measured
at amortised cost. Borrowings are classified as current
liabilities unless the group has an unconditional right to
defer settlement of the liability for at least 12 months after
the reporting period.
Other financial liabilities, including bank and loans, trade and other
payables, are on initial recognition measured at fair value. The liabilities
are subsequently measured at amortised cost.
Derivative financial instruments
Derivative financial instruments are recognised and measured in the
balance sheet at fair value. Positive and negative fair values of derivative
financial instruments are included in other receivables and other
payables, respectively.
Fair values of derivative financial instruments are calculated on the basis
of observable data applying generally accepted valuation methods.
Gains and losses on derivative financial instruments are recognised as
they arise in financial income and expense.
Fair value estimation
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants
at the measurement date. The fair value of financial assets traded
in active markets are based on quoted market prices at the close of
trading on the reporting date.
The fair value of financial instruments that are not traded in an active
market is determined using generally accepted valuation technics
based on observable inputs from active markets. For financial liabilities
where the fair value is disclosed, the fair value is estimated by
discounting future contractual cash flows at the current market interest
rate.
Cash flow statement
The cash flow statement shows the Group’s cash flows for the year
broken down by operating, investing and financing activities, changes
for the year in cash and cash equivalents as well as the Company’s cash
and cash equivalents at the beginning and end of the year.
Cash flows from operating activities are calculated as the net profit
for the year adjusted for changes in working capital and non-cash
operating items such as depreciation, amortisation and impairment
losses, and provisions. Working capital comprises current assets
less short-term debt excluding items included in cash and cash
equivalents.
Cash flows from investing activities comprise cash flows from
acquisitions and disposals of companies, intangible assets,
property, plant and equipment as well as fixed asset investments.
Cash flows from financing activities comprise cash flows from the
raising and repayment of long term debt and principal element on
lease payments as well as payments to and from shareholders.
Key Figures
The financial ratios have been calculated in accordance with the
recommendations of the Association of Danish Financial Analysts.
Financial highlights
Adoption of new and amended IFRSs
Management has assessed the impact of new or amended and
revised accounting standards and interpretations (IFRSs) issued by
the IASB and IFRSs endorsed by the European Union effective on
or after 1 May 2022. It is assessed that application of amendments
effective from 1 May 2022 has not had a material impact on the
consolidated financial statements for 2022/23. Furthermore,
Management does not anticipate any significant impact on future
periods from the adoption of these amendments.
Solvency Ratio
Equity at year end
Total assets at year end
Return on equity
Net profit for the year
Average equity
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 32
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
2. Critical accounting estimates and judgements
In the preparation of the consolidated financial statements
according to IFRS, Management is required to make certain
estimates as many financial statement items cannot be
reliably measured, but must be estimated as the value of
assets and liabilities often depends on future events that are
somewhat uncertain.
The judgments, estimates and assumptions made are
based on historical experience and other factors that
Management considers to be reliable, but which by
their very nature are associated with uncertainty and
unpredictability. These assumptions may prove incomplete
or incorrect, and unexpected events or circumstances may
arise. A description of significant accounting estimates and
judgments is included in the relevant notes:
- Goodwill (note 10)
- Business combinations (note 21)
Please refer to the specific notes for further information on
the key accounting estimates and assumptions applied.
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 33
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
3. Revenue from contracts with customers
Accounting Policies
Revenue relating to sale of validation and monitoring equipment is
recognised at a point in time when control of the products transfers to the
customers, usually upon delivery, and it is probable that the Group will
collect the consideration to which it is entitled for transferring the products.
The amount of sales to be recognised is based on the consideration
the Group expects to receive in exchange for its goods. Each product is
considered as one performance obligation.
The revenue from field service and other consultancy services relates to
consultancy services for validation and other services. Revenue is derived
over time and recognised in the income statement as the services are
rendered. Field service and other consultancy contracts include fixed
price contracts and contracts based on hourly rates. Distinct contracts are
considered as one performance obligation. Revenue is recognized by
measuring progress towards completion of the performance obligation.
Measurement of progress is based on an input method relating to direct
labour hours spent. For contracts with differences between cumulative
revenue recognized and cumulative amounts invoiced to the customer, the
Group recognizes a contract asset or a contract liability for the difference.
For field service and other consultancy contracts where the customers are
invoiced a fixed amount for each hour of services provided, Ellab applies
the practical expedient in IFRS 15, whereby revenue is recognised in the
amount to which Ellab has a right to invoice, as this corresponds directly
with the value of the completed services.
The Group derives revenue from the following business lines.
DKK million 2022/23 2021/22
Validation Solutions 456.1 425.5
Monitoring Solutions 51.1 57.3
Field Services & Consulting 351.0 168.0
Total revenue 858.2 650.8
Revenue is recognised as follows:
At a point in time 507.2 482.8
Over time 351.0 168.0
Total revenue 858.2 650.8
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 34
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
4. Employee costs
DKK million 2022/23 2021/22
Wages and salaries 340.4 224.1
Defined contribution plans 12.7 8.4
Other social security costs 19.3 14.1
Other staff costs 14.3 14.0
Total employee costs for the year 386.7 260.6
Employee costs included in intangible
assets
(10.1) (6.7)
Change in employee costs included in
inventories (1.1) (1.0)
Total employee costs expensed to the
income statement 375.5 252.9
Wages and Salaries, pensions and other social security expenses
are recognised in the following items:
Cost of production 206.5 133.1
Distribution costs 85.8 84.5
Development costs 12.6 15.9
Administrative costs
70.6 19.4
Total employee costs expensed to the
income statement 375.5 252.9
Average number of employees 637 456
Key Management Compensation
Key Management consists of Executive Board and the Board of Directors and
total compensation paid or payable for employee services is shown below:
DKK million 2022/23 2021/22
Wages and salaries
Board fee
9.1
0.8
8.9
0.8
Defined contribution plans 0.5 0.4
Other social security costs 0.0 0.0
Total 10.4 10.1
Executive Board DKK 8.5 million (2021/22: DKK 8.4 million) and Board of
Directors DKK 0.8 million (2021/22: DKK 0.8 million).
In 2022/23 salary to the CFO is included for 12 months. In 2021/22 salary for
the former CFO is included for 8 months and for 2 months for the new CFO.
Remuneration to the board member for consultancy work has been included
in 2022/23 and 2021/22.
Wages and salaries include fixed-base salary and accrued cash bonuses
designed to incentivize individual performance and the achievement of a
number of predefined short-term functional and individual business targets.
If an individual is dismissed, the ordinary salary is paid for up to a 9-month
notice period. In the event of change of control, individuals do not receive
any additional compensation.
Certain employees participate in a management equity program, which
allows them to acquire shares in Kelvin HoldCo A/S. The investment was
made at fair value why no economic benefit to the participants, hence, no
expenditure or effect on either the balance sheet or on the income statement
of the Group.
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 35
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
DKK million 2022/23 2021/22
Intangible assets 78.8 63.6
Property, plant and equipment 25.8 16.6
Right-of-use assets 13.7 8.9
Total 118.3 89.1
Depreciation, amortisation and impairment losses are recognised in the
following items:
Cost of production 17.6 10.9
Distribution costs 88.9 69.8
Development costs 3.2 3.9
Administrative costs 8.6 4.5
Total 118.3 89.1
DKK million 2022/23 2021/22
Costs for organisational changes 5.0 2.5
Legal cost regarding import tariffs 0.6 8.5
ERP roll-out and implementing 2.2 3.3
Consultants and other 28.7 8.5
Total 36.5 22.8
Specified by line item in the income statement are: ‘Administration costs’.
Accounting Policies
Special items include significant income and expenses of a special non-
recurring nature which cannot be attributed directly to the Group’s ordinary
operating activities of the continued activities. Special items include costs
related to acquisition of businesses and other consultancy assistance. These
items are classified separately in the income statement to provide a transparent
view of the Group’s ordinary operating profit.
7. Adjusted EBITDA
For the proforma adjusted EBITDA please see Management Review.
Notes - Group
5. Amortisation, depreciation and impairment losses
Notes - Group
6. Special items
DKK million 2022/23 2021/22
Operating profit before special items 174.7 159.4
Amortisation & depreciation (note 5) 118.3 89.1
Adjusted EBITDA 293.0 248.5
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 36
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
8. Financial income and expenses
DKK million 2022/23 2021/22
Financial income
Exchange rate gains 59.6 17.4
Other financial income 1.7 3.8
Total financial income 61.3 21.2
Financial expenses
Exchange rate losses
Interest expense on lease liabilities
48.4
3.4
43.1
2.8
Other financial expenses 57.6 34.8
Total financial expenses 109.4 80.7
Effective interest expenses on financial liabilities measured at amortised cost
amounted to DKK 49.2 million (2021/22 DKK 28.8 million).
Accounting Policies:
Financial income and expenses are recognised in the income statements at
the amounts that concern the financial year. Net financials include interest
income and expenses as well as allowances and surcharges under the
advance-payment-of-tax scheme, etc.
Notes - Group
9. Income taxes
DKK million 2022/23 2021/22
Current tax:
Current tax on profits for the year
Current tax on profits for previous years
Deferred tax on profit for the year
36.8
(1.7)
(9.8)
52.3
(3.3)
(13.7)
Deferred tax on profit for previous years 0.1 (1.3)
Total 25.4 34.0
Tax calculated at 22.0% of profit bf. tax 19.8 17.0
Tax according to income statement 25.4 34.0
Variance 5.6 17.0
Tax effects of:
Differences in the tax rates in foreign
subsidiaries relative to 22% 0.1 1.7
Internal cross border transfer of IP rights 0.0 8.2
Interest deduction limitation 3.7 9.0
Non-deductible expenses 3.5 1.4
Tax relating to previous years (1.6) (4.6)
Additional deductions (0.1) 0.0
Other 0.0 1.3
Total 5.6 17.0
Effectve tax rate 28.2% 44.1%
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 37
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Intangible
10. Intangible Assets
DKK million Goodwill
Other
intangible
assets Brand
Customers &
distributors Technology
Completed
development
projects
Development
projects in
progress Total
Cost:
At 1 May 2022 1,315.0 0.6 85.9 733.6 324.6 13.6 15.2 2,488.5
Acquisition of business* 240.8 0.0 0.0 128.8 0.0 0.0 0.0 369.6
Additions during the year 0.0 0.6 0.0 0.0 0.0 0.0 12.2 12.8
Transfers for the year 0.0 2.0 0.0 0.0 0.0 (0.8) (1.2) 0.0
At 30 April 2023 1,555.8 3.2 85.9 862.4 324.6 12.8 26.2 2,870.9
Accumulated amortisation:
At 1 May 2022 0.0 0.1 11.1 96.4 39.9 8.2 0.0 155.7
Amortisation for the year 0.0 0.7 4.3 54.3 16.3 3.2 0.0 78.8
At 30 April 2023 0.0 0.8 15.4 150.7 56.2 11.4 0.0 234.5
Carrying amount
30 April 2023 1,555.8 2.4 70.5 711.7 268.4 1.4 26.2 2,636.4
*After completion of the provisional business combinations from 21/22 an adjustments of ‘goodwill’ (DKK -7.1 million) and ‘customers and distributors’ (DKK 1.1 million)
have been included in ‘Acquisition of business’.
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 38
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Intangible
10. Intangible Assets (continued)
DKK million Goodwill
Other
intangible
assets Brand
Customers &
distributors Technology
Completed
development
projects
Development
projects in
progress Total
Cost:
At 1 May 2021 1,288.1 0.6 85.9 688.9 316.2 13.6 3.6 2,396.9
Acquisition of business 26.9 0.0 0.0 44.7 8.4 0.0 0.0 80.0
Additions during the year 0.0 0.0 0.0 0.0 0.0 0.0 11.6 11.6
Transfers for the year 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
At 30 April 2022 1,315.0 0.6 85.9 733.6 324.6 13.6 15.2 2,488.5
Accumulated amortisation:
At 1 May 2021 0.0 0.1 6.8 57.0 23.9 4.3 0.0 92.1
Amortisation for the year 0.0 0.0 4.3 39.4 16.0 3.9 0.0 63.6
At 30 April 2022 0.0 0.1 11.1 96.4 39.9 8.2 0.0 155.7
Carrying amount
30 April 2022 1,315.0 0.5 74.8 637.2 284.7 5.4 15.2 2,332.8
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 39
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Goodwill
Goodwill on acquisitions of subsidiaries is included in
intangible assets. Goodwill is not amortised but is tested
for impairment annually, or more frequently, if events or
changes in material circumstances indicate that it might
be impaired. Goodwill is carried at cost less accumulated
impairment losses.
Other intangible assets
The Group amortises intangible assets with a finite useful life
using the straight-line method over the following periods:
Brand 20 years
Technology 20 years
Completed development projects 3 years
Other intangible assets 3-20 years
Customers & distributors 5-10 years
Customers and distributors
On initial recognition, customers and distributors identified
from business combinations are recognised in the balance
sheet at fair value. Subsequently, customers and distributors
are measured at cost less accumulated amortisation and
impairment losses.
Brand
On initial recognition, brand identified from business
combinations are recognised in the balance sheet at
fair value. Subsequently, brand is measured at cost less
accumulated amortisation and impairment losses.
Technology
On initial recognition, technology identified from business
combinations are recognised in the balance sheet at fair value.
Subsequently, technology is measured at cost less accumulated
amortisation and impairment losses.
Development projects
Development costs cover costs and salaries directly or indirectly
attributable to the development activities of the enterprise.
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 project, are recognised as
intangible assets. This applies where the cost can be measured
reliably and if sufficient certainty exists that future earnings cover
production costs, selling costs and administrative expenses as
well as the development costs. Amortisation of development
projects recognised will start when the asset is ready for use.
Other development costs are recognised in the income statement
as incurred.
Development projects in progress
For development projects in progress, Management estimates
on an ongoing basis whether each project is likely to generate
future economic benefits for the Group in order to qualify for
recognition. The development projects are evaluated on technical
as well as commercial criteria. In Management’s opinion, the
development projects qualify for recognition.
Development projects completed and in progress
Development projects in progress and completed development
projects relates to development of the Group’s products.
Research and development costs expensed during the year amount to
DKK 15.3 million (2021/22 DKK 17.8 million) excluding amortisation.
Goodwill, customers and distributors and technology
Goodwill, brand, customers and distributors and technology relates to
the completed acquisitions in:
- 2022/23 (Causa B.V., the Netherlands, Project Support A/S, Denmark,
CalX Ltd., Ireland, Integrated Commissioning & Qualification
Corporation, US, Evolution Scientific Inc., US, Complete Technical
Solutions (CQV) Ltd., UK, PharmaSys Inc., US)
- 2021/22 (Valcom Compliance and Validation B.V., the Netherlands,
Arena Instrumentation Ltd., United Kingdom, Clover Life Science S.r.l.,
Italy, Manilite Limited, Ireland),
- 2020/21 (P.E.C. (Denmark) A/S, Denmark),
- 2019/20 (Hanwell Group, United Kingdom, Instrument Technology
Limited, Ireland, Adsano Group, Germany and Switzerland, Argideen
Science Limited, Ireland.
- 2018/19 (Ellab A/S, FasInternational Srl, Italy)
Acquired technology relates to established systems and procedures
while acquired customers and distributors relates to the existing
network of customers and distributors that will expand the group’s
current markets. Brand value relates to the purchase of the Ellab brand
in September 2019.
Intangible
10. Intangible Assets (continued)
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 40
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Intangible
10. Intangible Assets (continued)
Impairment tests
The Group continuously assesses whether there is any
indication that an asset may be impaired. If any indication
exists, or when annual impairment testing of goodwill is
required, the Group estimates the recoverable amount of
the asset.
Result of the annual impairment test - goodwil
The carrying amount of goodwill, DKK 1,555.8 million
(2021/22: DKK 1,315.0 million), relating to completed
acquisitions, is tested annually for impairment. The
recoverable amount is calculated as the present value
of future net cash flows. The entities are monitored by
management as a single cash generating unit due to the fact
that it is not practicably possible to separate the revenue
streams into smaller cash generating units and cash inflows
are largely dependent on cash inflows from other groups of
assets.
Key parameters in the test are revenue growth, EBITDA
margins, expected capital expenditure and growth
expectations for the terminal period.
The estimated future free net cash flows in the impairment
test at 30 April 2023 are based on budget for 2023/24
and the business plans and projections to 2027/28 for
the combined business activities considered as one CGU.
Revenue is expected to increase by an annually average of
16% from 2022/23 to 2027/28. The long-term growth rate
in the terminal period is estimated to 1% for the use of this
impairment test. All regions are expected to continue the growth
relating to sale of validation and monitoring solutions and further
develop field service and other consultancy activities. The EBITDA
margin is estimated to a level corresponding to historical EBITDA
margins and in line with long term expectations and forecasts. A
discount rate (WACC) was applied for the specific business areas
based on assumptions about interest rates and risks reflecting
the risks inherent in the assets. WACC was estimated to 10.4%
(pre-tax discount rate 13.3%) based on the cost of debt related
to external financing of bank loan for the acquisitions and cost of
equity based on the rate of return.
The assumptions used in the impairment test at 30 April 2023
were in all materiality in accordance with the impairment test
at 30 April 2022 for key assumptions relating to growth and
discount rate. For the period ending 30 April 2022, the business
plans were based on revenue expected to increase annually by
16% from 2021/22 to 2026/27. The long-term growth rate in the
terminal period was estimated to 1%. A discount rate (WACC)
was applied for the specific business areas based on assumptions
about interest rates and risks reflecting the risks inherent in the
assets. WACC has been estimated to 10.0% (pre-tax discount rate
12.8%).
Key assumptions have been determined by using a combination
of long-term trends, historical performance and the Group’s
strategy. The expected annual growth rate and the expected
margins in the budget period are based on historical experience
and assumptions about expected market developments.
The impairment tests did not show indications of impairment
losses to be recognised. In Management’s opinion, changes
in key assumptions mentioned above will not cause significant
impairment losses.
Key accounting estimates:
Goodwill impairment test
The group tests whether goodwill has suffered any
impairment on an annual basis. Qualitative factors considered
in this assessment include industry and market considerations,
financial performance and other relevant events and factors
affecting the Group. For the 2022/23 and 2021/22 reporting
periods, the recoverable amount of the cash-generating unit
was determined based on value-in-use calculations which
require the use of assumptions in the calculation of cash-flow
projections, discount rates and terminal growth rates. The
calculations use cash flow projections based on financial
forecasts covering a five-year period. Cash flows beyond the
five-year period are extrapolated using an estimated growth
rate. Key estimates in the calculation of discounted future cash
flows include expected growth in revenue, estimated costs
and discount rate. Estimates of growth and costs are based on
historical data combined with various internal estimates and
external sources including macro economy expectations.
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 41
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
11. Property, plant and equipment
Accounting Policies:
Property, plant and equipment is measured at
historical cost less accumulated depreciation
and impairment losses. The cost includes
expenditure that is directly attributable to the
acquisition of the items. Subsequent costs
are included in the asset’s carrying amount or
recognised as a separate asset, as appropriate,
only when it is probable that future economic
benefits associated with the item will flow to
the group and the cost of the item can be
measured reliably. The carrying amount of any
component accounted for as a separate asset is
derecognised when replaced. All other repairs
and maintenance are charged to profit or loss
during the reporting period in which they are
incurred.
DKK million
Land and
buildings
Plant and
machinery
Other
fixtures and
equipment
Leasehold
improvements Total
Cost:
At 1 May 2022 4.2 4.7 81.7 5.3 95.9
Acquisition of business 0.0 0.9 5.5 0.6 7.0
Additions 0.0 0.9 32.3 4.2 37.4
Disposals 0.0 0.0 (3.8) 0.0 (3.8)
Exchange rate
adjustments (0.1) (0.4) (4.9) 0.0 (5.4)
At 30 April 2023 4.1 6.1 110.8 10.1 131.1
Accumulated
depreciation:
At 1 May 2022
0.2 2.1 42.2 3.1 47.6
Depreciation
0.1 1.2 23.3 1.2 25.8
Disposals
0.0 0.0 (2.7) 0.0 (2.7)
Exchange rate
adjustments 0.0 (0.3) (4.2) 0.0 (4.5)
At 30 April 2023 0.3 3.0 58.6 4.3 66.2
Carrying amount 30
April 2023 3.8 3.1 52.2 5.8 64.9
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 42
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
11. Property, plant and equipment
DKK million
Land and
buildings
Plant and
machinery
Other
fixtures and
equipment
Leasehold
improvements Total
Cost:
At 1 May 2021 1.7 3.2 51.3 4.2 60.4
Acquisition of business 2.5 0.0 2.1 0.0 4.6
Additions 0.0 1.2 20.1 0.2 21.5
Disposals 0.0 0.0 (2.8) 0.0 (2.8)
Transfers 0.0 0.3 (0.3) 0.0 0.0
Exchange rate
adjustments 0.0 0.0 11.3 0.9 12.2
At 30 April 2022 4.2 4.7 81.7 5.3 95.9
Accumulated
depreciation:
At 1 May 2021
0.1 1.2 18.1 1.8 21.2
Depreciation
0.1 0.9 15.2 0.4 16.6
Disposals
0.0 0.0 (0.7) 0.0 (0.7)
Exchange rate
adjustments 0.0 0.0 9.6 0.9 10.5
At 30 April 2022 0.2 2.1 42.2 3.1 47.6
Carrying amount 30
April 2022 4.0 2.6 39.5 2.2 48.3
Depreciations are recognised in the income statement as “Cost of production”, “Distribution costs” and
“Administration costs”.
Accounting Policies:
Depreciations are calculated using the straight-
line method, net of their residual values over
their estimated useful lives, as follows:
Buildings 40 years
Plant and machinery 5 years
Other fixtures and equipment 3-5 years
Leasehold improvements 5-10 years
The assets’ residual values and useful lives are
reviewed, and adjusted if appropriate, at the end
of each reporting period.
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 43
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
12. Deferred tax
DKK million 2022/23 2021/22
Deferred tax at 1 May
(218.6) (216.4)
Deferred tax recognised in the income statement
9.7 15.0
Additions relating to acquisition of subsidiaries*
(26.1) (17.2)
Deferred tax at 30 April
(235.0) (218.6)
Deferred tax relates to:
Intangible assets
(231.2) (217.4)
Property, plant and equipment
(4.4) (2.0)
Right-of-use assets
(4.3) (4.4)
Inventories
(0.8) (0.3)
Trade receivables
0.5 0.5
Contract assets
0.3 (0.5)
Lease liabilities
4.9 5.0
Tax loss carry forwards
0.0 0.5
(235.0) (218.6)
Of which presented as deferred tax assets
0.6 1.6
Of which presented as deferred tax liabilities
(235.6) (220.2)
(235.0) (218.6)
The Group has an unrecognised tax loss of DKK 0.0 million (2021/22: DKK 0.4 million), which relates to foreign subsidiaries.
*After completion of the provisional business combinations from 21/22 an adjustment of ‘deferred tax liability’ (DKK 6.1 mil-
lion) have been included in ‘Additions relating to acquisition of subsidiaries’.
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 44
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
13. Leases
The Group has recognised the following amounts relating to leases:
DKK million 2023 2022
Right-of-use assets
Properties 56.7 50.1
Cars and other leases 4.2 3.5
Total
60.9 53.6
Lease liabilities
Non-current 49.9 48.1
Current 18.0 11.4
Total
67.9 59.5
Additions to the right-of-use assets during the financial year ending 30 April 2023 were
DKK 20.0 million (2021/22: DKK 7.3 million) of which DKK 13.5 million (DKK 4.3 million)
is from business acquisitions.
The income statement shows the following amounts relating to leases:
DKK million 2022/23 2021/22
Depreciation, properties 11.2 7.4
Depreciation, cars and other leases 2.5 1.5
Expense relating to short-term leases 0.1 0.1
Interest expense on lease liabilities 3.4 2.8
Total amount recognised in the
income statement
17.2 11.8
The total cash outflow for leases in 2022/23 was DKK 15.2 million (2021/22: DKK 10.8
million).
The Group leases various properties, equipment and cars. Rental contracts are typically made for fixed periods of 3 to 10 years but may have extension options.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants,
but leased assets may not be used as security for borrowing purposes.
Extension options or periods after termination options are included in the lease term if the lease is reasonably certain to be extended or not terminated based
on the Group’s strategy and other relevant factors such as significant leasehold improvements. The Group has entered into lease contracts at a value of DKK 21.5
million that have not yet commenced (2021/22: DKK 12.9 million).
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 45
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
13. Leases (continued)
Accounting policies:
Leases are recognised as a right-of-use asset and a
corresponding liability at the date at which the leased asset
is available for use by the group. Each lease payment is
allocated between the liability and finance cost. The finance
cost is charged to the income statement over the lease
period so as to produce a constant periodic rate of interest
on the remaining balance of the liability for each period.
The right-of-use asset is depreciated over the shorter of the
asset’s useful life and the lease term on a straight-line basis.
Leases include mainly properties and cars.
Assets and liabilities arising from a lease are initially
measured on a present value basis. Lease liabilities include
the net present value of the following lease payments:
- fixed payments (including in-substance fixed payments),
less any lease incentives receivable
- variable lease payment that are based on an index or a rate
- amounts expected to be payable by the lessee under
residual value guarantees
- the exercise price of a purchase option if the lessee is
reasonably certain to exercise that option, and
- payments of penalties for terminating the lease, if the lease
term reflects the lessee exercising that option.
The lease payments are discounted using the interest rate
implicit in the lease, if that rate can be determined, or the
group’s incremental borrowing rate.
Lease liabilities are subsequently measured by increasing the
carrying amount to reflect interest on the lease liability, and
reducing the carrying amount to reflect the lease payments made.
Right-of-use assets are measured at cost comprising the
following:
- the amount of the initial measurement of lease liability
- any lease payments made at or before the commencement date
less any lease incentives received
- any initial direct costs, and restoration costs.
Variable lease payments, payments associated with short-term
leases and leases of low-value assets are recognised on a straight-
line basis as an expense in the income statement. Short-term
leases are leases with a lease term of 12 months or less. Low-value
assets comprise IT-equipment and small items of office furniture.
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 46
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
14. Inventories
DKK million 2023 2022
Raw materials and consumables 35.5 27.6
Finished goods and goods for resale 22.3 17.9
57.8 45.5
The following are included in "Costs of production":
Inventories recognised as an expense
88.6 92.6
Write-downs of inventories to net
realisable value 4.1 4.0
Accounting Policies:
Inventories are measured at the lower of cost under the FIFO method and net
realisable value.
The net realisable value of inventories is calculated at the amount expected
to be generated by sale of the inventories in the process of normal
operations with deduction of selling expenses. The net realisable value is
determined allowing for marketability, obsolescence and development in
expected selling price.
The cost of finished goods and work in progress comprises the cost of raw
materials, consumables and direct labour with addition of indirect production
costs. Indirect production costs 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 as well as costs
of factory administration and management.
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 47
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
15. Trade receivables
DKK million 2023 2022
Trade receivables (gross) 217.7 146.1
Provision for bad debt (3.4) (2.6)
Trade receivables net
214.3 143.5
Movement on the Group's provision for bad debt are as follows:
Opening balances (2.6) (1.6)
Additions for the year (1.1) (1.4)
Reversals 0.2 0.3
Confirmed losses 0.1 0.1
Provision for bad debt
(3.4) (2.6)
Accounting Policies:
Trade receivables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method, less loss
allowance. The Group hold the trade receivables with the objective to collect
the contractual cash flows and therefore measures them subsequently at
amortised cost. Trade receivables are generally due for settlement within 30
to 90 days and therefore are all classified as current. Due to the short-term
nature of the current receivables, their carrying amount is considered to be
the same as their fair value. Trade receivables are recognised initially at the
amount of consideration that is unconditional.
The Group applies the IFRS 9 simplified approach to measuring expected
credit losses which uses a lifetime expected loss allowance for all trade
receivables. The allowance is based on a provision matrix on aging
of customers and includes both historical as well as forward-looking
information. The cost of allowances for expected credit losses are recognized
in the income statements as distribution costs. Subsequent recoveries of
amounts previously written off are credited against distribution costs.
The maximum credit exposure is equal to the carrying value of trade
receivables. For a further description of management of credit risks, please
see note 19. Financial risk management.
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
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Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
15. Trade receivables (continued)
DKK million Receivable Loss rate %
2023
Provision
Impairment of trade receivables can be specified as follows:
Current 141.9 0.1% 0.2
Overdue < 30 days 39.2 0.3% 0.1
Overdue 31 - 60 days 15.4 0.6% 0.1
Overdue 61 - 90 days 13.0 6.2% 0.8
Overdue 91 - 180 days 2.6 3.8% 0.1
Overdue > 180 days 5.6 37.5% 2.1
Total 217.7 3.4
DKK million Receivable Loss rate %
2022
Provision
Impairment of trade receivables can be specified as follows:
Current 77.4 0.5% 0.4
Overdue < 30 days 23.7 1.3% 0.3
Overdue 31 - 60 days 14.6 0.7% 0.1
Overdue 61 - 90 days 20.2 2.0% 0.4
Overdue 91 - 180 days 6.6 4.5% 0.3
Overdue > 180 days 3.6 30.6% 1.1
Total 146.1 2.6
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 49
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
16. Contract balances
The Group has recognised the following assets and liabilities related to
contracts with customers:
DKK million 2023 2022
Trade receivables 214.3 143.5
Contract assets 12.3 7.2
Deferred revenue 14.4 10.3
Revenue recognised in the reporting period that was included in deferred
revenue at the beginning of the period is DKK 10.3 million (2021/22: DKK 5.4
million).
Accounting Policies:
Contract assets relates to field service contracts and other consultancy
contracts with customers where revenue is recognised over time in the
income statement when the outcome of the contracts can be estimated
reliably. If the services rendered by the Group exceed the payment, a
contract asset is recognised.
Deferred revenue is prepayments by customers for goods and services that
have not been delivered and prepayments relating to rental of equipment.
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
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Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
17. Share capital and treasury shares
30 April 2023 30 April 2022
The share
capital
comprise:
Number
of shares
(‘000)
Nominal
value (DKK
million)
Number
of shares
(‘000)
Nominal
value (DKK
million)
A shares 139,652 139.7 138,740 138.8
B shares 16,827 16.8 16,726 16.7
Share
capital 156,479 156.5 155,466 155.5
All shares have a nominal value of DKK 1. Each A share and each B share shall
carry 1 vote.
The A shares carry a preferential right to the amount paid plus an annual return of
10%. The remaining earnings will be distributed among the holders of B shares.
30 April 2023 2022 30 April 2022
Changes
in share
capital
A shares
(‘000)
B shares
(‘000)
A shares
(‘000)
B shares
(‘000)
Opening
balance
138,740 16,726 138,740 16,726
Capital
increase
912 101 0 0
Share
capital 139,652 16,827 138,740 16,726
Treasury shares
Kelvin HoldCo A/S sold 579,466 treasury shares of nominal DKK 1, of which
508,329 A shares and 71,137 B shares, equal to 0.4% of the share capital,
have been sold at a value of DKK 18.1 million.
Kelvin HoldCo acquired 993,658 treasury shares of DKK 1, of which 813,932
A shares and 179,726 B shares, norminal at a value of DKK 1.0 million equal
to 0.6% of the share capital. The acquisition price for the shares was DKK 43.5
million.
The shares were sold and acquired in connection with a change in ownership.
The Company owns 1,373,557 treasury shares at the balance sheet date, of
which 951,552 A shares and 422,005 B shares, equal to 0.9% of the share
capital.
Notes - Group
17. Share capital and treasury shares
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
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Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
18. Borrowings
Borrowings are comprised of acquisition related loans as well as credit facilities to fund the ongoing operations.
Carrying Amount
Loan FX Interest rate Maturity 2023 2022
Term DKK Variable 26 September 2026 482.8 481.1
Term USD Variable 26 September 2026 240.8 250.3
Term USD Variable 26 September 2026 93.9 0.0
Term USD Variable 26 September 2026 93.9 0.0
Credit facility DKK Variable 26 March 2026 121.5 0.0
1,032.9 731.4
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 52
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
19. Financial risk management
Financial risk factors
The Group’s Management of financial risks is centralized
to Ellab A/S. The Group identifies, monitors, assesses
and mitigates financial risk at headquarter in cooperation
with the Group’s business units. The Group is exposed to
foreign exchange risk, liquidity risk and credit risk that can
have a significant impact on the financial performance of
the Group. Significant risks are continuously assessed by
Management and the Board of Directors.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future
cash flows of an exposure will fluctuate because of changes
in foreign exchange rates.
As a result of the Group’s international operating activities,
the Group is exposed to fluctuations in foreign exchange
rates. The Group has assessed the risks related to foreign
exchange rate as normal. The Group’s exchange rate
exposure is primarily related to USD, EUR and GBP as
a major part of the Group’s sales are invoiced in those
currencies. The Group handle exchange rate risk by
establishing sales entities in countries where the Group has
significant activities or where the Group expects growth,
thereby matching income and expenses in the same
currency. As a result of the Group’s structure, sales from local
sales entities are invoiced in the local functional currency
and expenses incurred are in the local functional currency.
The Group has entered into interest-bearing long-term loan
agreements in USD to partly offset the FX risk on the cash
flow coming from USD.
Sensitivity:
The Group is primarily exposed to changes in USD. The sensitivity
of profit or loss to changes in the exchange rates arises mainly
from USD denominated financial instruments, such as external
and intercompany loans. The sensitivity analysis is based on
financial balances recognized at 30 April 2023 in the balance
sheet and the assumption that all other variables and exposures
remain constant. The sensitivity analysis does not include financial
assets and liabilities in the functional currency of the Group’s
subsidiaries or translation risk from consolidation of income
statement. A 5% increase in the year-end rate in the following
currencies versus DKK would impact the Group’s profit as follows
(a 5% decrease would have the opposite impact):
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows
of a financial instrument will fluctuate because of changes in
market interest rates.
The Group’s main interest rate risk arises from long-term debt
with variable rates, which exposes the group to cash flow interest
rate risk. The risk is considered to be within the Group’s defined
risk profile.
Credit risk
Credit risk arises from cash and cash equivalents, as well as credit
exposures to customers, including outstanding receivables. The
Group’s primary credit exposure is related to trade receivables and
cash positions.
The credit risk of the Group is assessed to be low. Credit risk related
to trade receivables is managed by continuous risk assessment of
major customers. The Group has policies in relation to maximum
credit limits and prepayment requirements for customers with high
credit risk. Based on forecasts as well as historical data, the Group
expects only insignificant loss allowances for trade receivables. The
Group has no major exposure relating to one single customer or
business partner.
In relation to the credit risk related to financial institutions, the
Group monitors financial institutions and places funds in financial
institutions with satisfactory credit ratings.
Liquidity risk
Based on the Group’s financial reserves and credit facilities, the
liquidity risk of the Group is assessed to be low.
The financial position of the Group and short-term forecasts of
liquidity reserves is continuously monitored by Management and the
finance department to ensure that sufficient financial resources are
available.
Impact on profit for the year
2022/23 2021/22
USD (13.0) (10.8)
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 53
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
19. Financial risk management (continued)
DKK million
Carrying
amount
Less than
1 year
Between 1
and 5 year
More than
5 years Total
As at 30 April 2023
Borrowings 1,032.9 78.7 1,233.7 0.0 1,312.4
Lease liabilities 67.9 17.4 46.4 16.5 80.3
Trade payables 28.9 28.9 0.0 0.0 28.9
Other liabilities 106.4 106.4 0.0 0.0 106.4
1,236.1 231.4 1,280.1 16.5 1,528.0
As at 30 April 2022
Borrowings
731.4 27.4 845.8 0.0 873.2
Lease liabilities
59.5 11.7 37.6 20.1 69.4
Trade payables
28.3 28.3 0.0 0.0 28.3
Other payables
70.9 70.9 0.0 0.0 70.9
890.1 138.3 883.4 20.1 1,041.8
Maturity analysis
The tables analyse the Group’s financial liabilities into
relevant maturity groupings based on their contractual
maturities. The amounts disclosed in the table are the
contractual undiscounted cash flows. Balances due
within 12 months equal their carrying balances as the
impact of discounting is not significant.
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 54
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
19. Financial risk management (continued)
Financial assets and liabilities per measurement category
DKK million 2023 2022
Financial assets
Financial assets at amortised cost:
Trade receivables 214.3 143.5
Contract assets 12.3 7.2
Other receivables 6.6 1.5
Cash and cash equivalents 110.7 110.4
343.9 262.6
Financial assets at fair value:
Derivative financial instruments 0.0 0.4
0.0 0.4
Financial liabilities
Liabilities at amortised cost:
Borrowings 1,032.9 731.4
Lease liabilities 67.9 59.5
Trade payables 28.9 28.3
Other payables 80.2 66.4
1,209.9 885.6
Financial liabilities at fair value:
Other liabilities (earn-outs) 26.2 4.5
26.2 4.5
Financial assets measured at fair value relate to derivatives. Calculation of fair
value of these derivatives is based on valuation techniques and observable
inputs such as interest rates, currency rates etc. The Group’s derivatives
expired in October 2022.
Financial liabilities measured at fair value relate to earn-outs. Calculation
of fair value of the earn-outs is based on probability-weighted financial
performance outcomes relevant to the earn-out agreements.
20. Capital management
The Group’s objective when managing capital is to safeguard their ability to
continue as a going concern, so that the Company can continue to provide
returns for shareholders and benefits for other stakeholders and maintain an
optimal capital structure.
The Group centrally monitors capital on relevant key figures. The Group
manages its capital structure and makes adjustments in light of changes in
economic conditions. The Group monitors capital on the basis of the net debt
to EBITDA ratio. The Group’s strategy during 2022/23 was to maintain a net
debt to EBITDA ratio below 4.6 (2021/22: ratio below 5.7). The Group fulfilled
capital management targets during 2022/23.
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 55
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
21. Business combinations
Acquisitions 2022/23
Two of the seven acquisitions completed during 2022/23
are considered material and consequently disclosed
separately. The remaining five are not considered significant
for individual financial disclosure, and information relating
to the acquisitions have been combined as ‘other’ in
the following note. The disclosures for the business
combinations are considered provisional up until 12 month
after the acquisitions.
Causa B.V., the Netherlands
Ellab Group acquired 100% of the share capital in
Causa B.V. on 29 June 2022. Causa is one of the leading
Dutch providers of qualification and validation services,
specialized in qualification of disinfection and sterilization
equipment in the healthcare, pharma and food industries.
The acquisition of Causa fits with Ellab Group’s corporate
strategy of expanding its field services in key markets and
this acquisition will strengthen its service activities in the
Benelux region.
Project Support A/S, Denmark
Ellab Group acquired 100% of the share capital in Project
Support A/S on 1 July 2022. Project Support is a leading
provider of validation, calibration, consulting as well as
equipment rental solutions to the pharmaceutical and
biotech industries. The acquisition of Project Support fits
with Ellab Group’s corporate strategy of expanding its field
services in key markets.
CalX, Ireland
Ellab Group acquired 100% of the share capital in CalX
Instrumentation Services Limited (“CalX”) on 28 September
2022. CalX is a leading Irish provider of field calibration and
complete calibration management. CalX provides its services to
some of the biggest pharmaceutical, medical device, food and
dairy companies in the world. The acquisition of CalX is another
important step in the execution of Ellab Group’s corporate
strategy of expanding its field services in key markets.
ICQ, United States
Ellab Group acquired 100% of the share capital in Integrated
Commissioning & Qualification Corporation, (“ICQ”) on 30
November 2022. ICQ is a leading American validation service and
consulting and has partnered with the world’s largest biopharma
manufacturers and emerging life sciences companies to provide
comprehensive commissioning, qualification, and validation
(CQV) services that accelerate the delivery of medications and
therapies to patients in need. The acquisition of ICQ is a major
step in the execution of Ellab Group’s corporate strategy of
expanding its field services towards becoming a full solution
provider in key markets within the biotech and pharma industry.
Evolution Scientific Inc., United States
Ellab Group acquired 100% of the share capital in Evolution
Scientific, Inc., (“ESI”) on 1 December 2022. ESI is a leading and
highly respected field service provider to the pharmaceutical,
biotech and medical device industries specializing in preventative
and corrective maintenance, calibration and metrology,
certification, validation and technical staffing. The acquisition
of ESI represents the continued execution of Ellab Group’s
corporate strategy of expanding its field services towards
becoming a full solution provider in key markets within the
biotech and pharma industry.
Complete Technical Solutions, United Kingdom
Ellab Group acquired 100% of the share capital in Complete
Technical Solutions (CQV) Ltd., (“CTS”) on 29 March 2023. With
high-quality validation services, CTS is a full turnkey solution for
Commissioning, Qualification and Validation (CQV), primarily
within the biotech and pharma industry. The acquisition of CTS
represents the continued execution of Ellab Group’s corporate
strategy of expanding its field services towards becoming a full
solution provider in key markets within the biotech and pharma
industry
PharmaSys Inc., United States
Ellab Group acquired 100% of the share capital in
PharmaSys, Inc. on 27 April 2023. PharmaSys is a leading
American validation service and consulting company within
commissioning, qualification, and validation (CQV) services
and other compliance solutions for the biopharma and medical
device industries. The acquisition of PharmaSys is a major step
in the execution of Ellab’s corporate strategy of expanding its
field services in key markets within the biopharma industry.
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 56
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
21. Business combinations (continued)
Details of the purchase consideration, the net assets acquired and goodwill are as
follows:
DKK million ICQ ESI
Customer and distributors 35.7 31.8
Property, plant and equipment
0.4 3.0
Right-of-use assets
2.3 3.7
Inventories
0.0 0.0
Trade and other receivables
21.5 8.7
Cash
10.8 2.3
Total assets
70.7 49.5
Deferred tax liability, net 0.0 0.0
Lease liabilities 2.3 3.7
Trade payables 1.3 0.4
Income tax payables 3.7 0.0
Other payables 7.3 0.8
Total liabilities
14.6 4.9
Acquired net assets 56.1 44.6
Goodwill 72.9 62.6
Total purchase price
129.0 107.2
DKK million ICQ ESI
Purchase price:
Cash payment
120.9 88.6
Contingent consideration
6.9 18.6
Deferred consideration
1.2 0.0
Total purchase price
129.0 107.2
Cash flow for acquisition:
Cash payment
120.9 88.6
Cash payment of contingent/deferred
consideration 6.9 18.6
Less cash in acquired business (10.8) (2.3)
Cash flow in investing activities
117.0 104.9
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 57
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
21. Business combinations (continued)
ICQ, United States
Goodwill of DKK 72.9 million arising from the acquisition
is attributable to know-how, profitability and synergies
expected from combining the operations of the Ellab Group
and the acquired businesses relating to sale of validation
and monitoring solutions as well as optimising processes
within sales, workforce and Field Service & Consulting
expertise. The goodwill recognized is tax deductable for
income tax purposes.
Purchase Consideration
Of the total purchase consideration of DKK 129.0 million,
purchase consideration payable at 30 April 2023 amounts
to DKK 1.2 million and is related to deferred payments. The
purchase price included a short-term earn-out that has been
paid out subsequent to the acquisition date. The contingent
consideration is recognised at fair value.
Revenue and profit contribution
ICQ contributed with revenue of DKK 34.2 million and profit
for the year of DKK 3.7 million to the group for the period
from 1 December 2022 to 30 April 2023.
These amounts have been calculated using the subsidiary’s
results and adjusting them for differences in the accounting
policies between the group and the subsidiary.
Acquisition-related costs
Acquisition-related costs of DKK 3.9 million are included
in ‘Special Items’ in the income statement and in operating
cash flows in the statement of cash flows.
ESI, United States
Goodwill of DKK 62.6 million arising from the acquisition is
attributable to know-how, profitability and synergies expected
from combining the operations of the Ellab Group and the
acquired businesses relating to sale of validation and monitoring
solutions as well as optimising processes within sales, workforce
and Field Service & Consulting expertise. The goodwill
recognized is tax deductable for income tax purposes.
Purchase Consideration
The total purchase consideration of DKK 107.2 million and is
paid in cash. The purchase price included a short-term earn-out
that has been paid out subsequent to the acquisition date. The
contingent consideration is recognised at fair value.
Revenue and profit contribution
ESI contributed with revenue of DKK 14.4 million and profit for
the year of DKK 2.9 million to the group for the period from 2
December 2022 to 30 April 2023.
These amounts have been calculated using the subsidiary’s
results and adjusting them for differences in the accounting
policies between the group and the subsidiary.
Acquisition-related costs
Acquisition-related costs of DKK 3.4 million are included in
‘Special Items’ in the income statement and in operating cash
flows in the statement of cash flows.
Key accounting estimates:
Business combinations
As a result of acquisitions, management makes estimates
relating to identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination,
and with measuring the fair value at the time of acquisition.
Significant estimates are made in the measurement of the fair
value of the brand, customers & distributors and technology
at the time of acquisition in relation to cash-flow projections,
discount rates and terminal growth rates. Furthermore,
key assumptions have been made in relation to the useful
lives of the intangible assets identified in the acquisitions.
When estimating the useful lives of the assets, management
has considered among other expectations to technologic
development and expected churn rates based on historical
customer churn rates and the group’s primary customer groups.
The churn rate and expected useful lives of assets acquired in
a business combination are reassessed annually. Changes in
actual useful lives or expected useful lives of these assets are
recognized in the financial statements, when such changes are
ascertained.
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 58
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
21. Business combinations (continued)
Details of the purchase consideration, the net assets acquired and goodwill are as
follows:
DKK million Other Total
Customer and distributors
60.2 127.7
Property, plant and equipment
3.6 7.0
Right-of-use assets
7.5 13.5
Inventories
0.3 0.3
Trade and other receivables
15.4 45.6
Cash
22.1 35.2
Total assets
109.1 229.3
Deferred tax liability, net 32.2 32.2
Lease liabilities 8.0 14.0
Trade payables 1.1 2.8
Income tax payables 2.4 6.1
Other payables 10.6 18.7
Total liabilities
54.3 73.8
Acquired net assets 54.8 155.5
Goodwill 112.4 247.9
Total purchase price
167.2 403.4
DKK million Other Total
Purchase price:
Cash payment 137.7 347.2
Contingent consideration 24.1 49.6
Deferred consideration 5.4 6.6
Total purchase price
167.2 403.4
Cash flow for acquisition:
Cash payment
137.7 347.2
Cash payment of contingent/deferred
consideration 0.0 25.5
Less cash in acquired business (22.1) (35.2)
Cash payment of deferred/contingent
consideration from prior year’s acquisitions 8.4
Cash flow in investing activities
115.6 345.9
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 59
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
21. Business combinations (continued)
Revenue and profit contribution
If all seven acquisitions had occurred on 1 May 2022, pro-forma
revenue and profit for the year ended 30 April 2023 would have
been DKK 974.9 million and DKK 81.5 million respectively.
Acquisitions 2021/22
Valcom Compliance and Validation B.V., the Netherlands
Ellab Group acquired 100% of the share capital in Valcom
Compliance and Validation B.V. on 2 August 2021. Valcom is a
Dutch company specialized in thermal qualification and validation
services in the Benelux region and is servicing the pharmaceutical
industry. The acquisition of Valcom fits with Ellab Group’s
corporate strategy of expanding its field services in key markets
and this acquisition will strengthen its service activities in the
Benelux region.
Arena Instrumentation Ltd., United Kingdom
Ellab Group acquired 100% of the shares in Arena
Instrumentation Ltd., United Kingdom, on 4 October 2021. Arena
is an English UKAS accredited calibration company providing
field calibration, instrument commissioning, qualification, and
relocation services to the pharmaceutical, biotech, healthcare,
and process/manufacturing industries. The acquisition of Arena
fits with Ellab Group’s corporate strategy of expanding its field
services in key markets as well as entering the market for field
calibration services.
Other acquisitions
Goodwill of DKK 112.4 million arising from the acquisitions
is attributable to know-how, profitability and synergies
expected from combining the operations of Group and
the acquired businesses relating to sale of validation and
monitoring solutions as well as optimising processes within
sales, workforce and Field Service & Consulting expertise.
The goodwill recognized is not tax deductable for income tax
purposes.
Purchase Consideration
Of the total purchase consideration of DKK 167.2 million,
purchase consideration payable at 30 April 2023 amounts
to DKK 24.1 million and is related to earn-outs and other
deferred payments. The deferred consideration is on the basis
of probability weighted calculations and is recognized at fair
value.
Revenue and profit contribution
The five acquisitions contributed with revenue of DKK 33.3
million and profit for the year of DKK 4.7 million to the group
for the period from 1 July 2022 to 30 April 2023.
These amounts have been calculated using the subsidiary’s
results and adjusting them for differences in the accounting
policies between the group and the subsidiary.
Acquisition-related costs
Acquisition-related costs of DKK 7.1 million are included in
‘Special Items’ in the income statement and in operating cash
flows in the statement of cash flows.
Clover Life Science S.r.l., Italy
Ellab Group acquired, in an assets deal, the business of
Clover Life Science S.r.l. on 31 March 2022.Clover is an Italian
qualification, validation and consulting service company that
supports companies in the biotech, pharmaceutical, medical
devices, food manufacturing and cosmetics sectors in the
processes of validation and qualification of manufacturing
facilities, manufacturing equipment and work environments. The
acquisition of Clover fits with Ellab Group’s corporate strategy of
expanding its field services in key markets and this acquisition
will strengthen its service activities in Italy.
Autocal Ireland Limited, Ireland
Ellab Group acquired 100% of the shares in Autocal Ireland
Limited, Ireland, on 29 April 2022. Autocal is an Irish validation
service company based in Dublin. Autocal is a high-quality
validation service provider to the pharmaceutical and healthcare
industries and is considered a premier source for validation
professionals for projects of all sizes, specializing in all areas of
thermal validation and project management. The acquisition of
Autocal fits with Ellab Group’s corporate strategy of expanding
its field services in key markets and this acquisition will grow the
Group’s presence within validation services in Ireland
Revenue and profit contribution
Acquisitions contributed revenues of DKK 17.0 million and profit
for the year of DKK 2.9 million to the Group for the period from
2 August 2021 to 30 April 2022. If the acquisitions had occurred
on 1 May 2021, pro-forma revenue and profit for the year ended
30 April 2022 would have been DKK 682.5 million and DKK 49.9
million respectively.
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 60
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
22. Commitments and contingent liabilities
Notes - Group
23. Fee to auditors
DKK million 2022/23 2021/22
Audit fee to PwC 1.2 1.3
Other assurance engagements
0.3 0.3
Tax advisory services
0.6 1.2
Non-audit services
4.5 0.5
Total
6.6 3.6
Charges and security
Shares in the subsidiaries Kelvin BidCo A/S, Saballe TopCo
ApS in liquidation, Ellab A/S, Ellab Inc., Ellab GmbH, Ellab UK
Ltd., Ellab Monitoring Solutions Ltd. and Ellab Ireland Ltd. have
been pledged as security for credit institutions of the group
company Kelvin BidCo A/S. The Group has placed assets in its
subsidiaries as security with Kelvin BidCo’s credit institutions.
Contingent liabilities
The group companies are jointly and severally liable for tax on
the jointly taxed incomes etc. of the Group. The total amount
of corporation tax payable is disclosed in the Annual Report of
Kelvin HoldCo A/S, which is the management company of the
joint taxation. Moreover, the group companies are jointly and
severally liable for Danish withholding taxes by way of dividend
tax, tax on royalty payments and tax on unearned income. Any
subsequent adjustments of corporation taxes and withholding
taxes may increase the Company’s liability.
The group companies are jointly and severally liable for
tax on the jointly taxed incomes etc. of the Group. The
total amount of corporation tax payable is disclosed in
the Annual Report of Kelvin HoldCo A/S, which is the
management company of the joint taxation. Moreover, the
group companies are jointly and severally liable for Danish
withholding taxes by way of dividend tax, tax on royalty
payments and tax on unearned income. Any subsequent
adjustments of corporation taxes and withholding taxes may
increase the Company’s liability.
The Group is not involved in lawsuits expected to have a
material effect on the financial position of the Group.
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 61
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
24. Changes in liabilities arising from financing activities
This section sets out an analysis of liabilities arising from financing activities and the movements in each of the periods presented.
DKK million
1 May
2022
Financing
cash flows Additions
Changes
in foreign
exchange
rates
Other
changes*
30 April
2023
Borrowings 731.4 318.5 0.0 (20.6) 3.6 1,032.9
Lease liabilities 59.5 (11.7) 20.0 (3.3) 3.4 67.9
Total liabilities
from financing activities 790.9 306.8 20.0 (23.9) 7.0 1,100.8
DKK million
1 May
2021
Financing
cash flows Additions
Changes
in foreign
exchange
rates
Other
changes*
30 April
2022
Borrowings 694.9 0.0 0.0 33.5 3.0 731.4
Lease liabilities 57.5 (7.9) 7.3 2.6 0.0 59.5
Total liabilities
from financing activities 752.4 (7.9) 7.3 36.1 3.0 790.9
The ‘Other’ column includes the effect of reclassification of non-current portion of interest-bearing loans and borrowings to current due to the
passage of time, and the effect of accrued but not yet paid interest on interest-bearing loans and borrowings.
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 62
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
25. Related parties
Kelvin HoldCo Group’s parent is: EQT Mid Market Europe
Transactions with key management personnel and the ultimate
parent
Transactions with key management personnel include transactions with
companies controlled by the key management personnel. Reference is
made to Group note 4 ‘Employee costs’ as well as EQT Mid Market Europe
Fund (EQT).
Significant transactions between related parties
Transactions with related parties:
Rental agreement with Ellab Properties A/S, in which a board member
has significant influence, of DKK 3.7 million (2021/22 DKK 3.6 million).
The Group’s has purchased certain advisor costs via EQT during the year.
Outstanding payables with EQT are DKK 3.0 million at 30 April 2023.
Based on Management’s assessment, transactions between related parties
were carried out on arm’s length basis. Other than these transactions,
there has been no trading with key management personnel or their close
relatives.
26. Events after the balance sheet date
On 20 June 2023, the owners of the Kelvin Group, EQT Mid Market
Europe Fund (EQT), signed an agreement regarding the sale of Kelvin
Group to Novo Holdings A/S. Novo Holdings is a holding and investment
company that is responsible for managing the assets and the wealth of the
Novo Nordisk Foundation.
The Group’s borrowings from financial institutions include a change of
control clause, which stipulates that the borrowings will become due
immediately after the change of control. The closing date of the sale of
Kelvin Group is not yet determined.
No other events materially affecting the assessment of the Annual Report
have occurred after the balance sheet date..
DKK million 2022/23 2021/22
Financial income (61.3) (21.2)
Financial expenses
109.4 80.7
Depreciation, amortisation and impairment
losses, including losses and gains on sales 118.3 89.1
Income tax expense
25.4 34.0
Other adjustments
(2.5) 5.1
189.3 187.7
28. Cash flow statement - changes in net working capital
Change in inventories
(12.0) (12.2)
Change in trade receivables
(25.3) (30.5)
Change in contract assets
(5.1) (1.6)
Change in other receivables
(2.8) 2.7
Change in prepayments
(1.7) (1.7)
Change in trade payables
(2.2) 12.9
Change in contract liabilities
0.0 (0.5)
Change in other payables
(8.5) 10.3
(57.6) (20.6)
27. Cash flow statement - adjustments
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Page 63
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Income Statement ........................................ 23
Balance Sheet .......................................................... 24
Cash Flow Statement .................................. 25
Changes in Equity ............................................ 26
Notes - Group ......................................................... 28
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Group
29. List of group companies
Type
Place of
incorporation
Ownership
interest
Kelvin BidCo A/S Subsidiary Denmark 100%
Saballe TopCo ApS in liquidation Subsidiary Denmark 100%
Ellab A/S Subsidiary Denmark 100%
Project Support A/S Subsidiary Denmark 100%
Ellab Inc. Subsidiary USA 100%
Evolution Scientific Inc. Subsidiary USA 100%
Integrated Commissioning & Qualification Corporation Subsidiary USA 100%
PharmaSys, Inc. Subsidiary USA 100%
Ellab (UK) Limited Subsidiary UK 100%
Ellab Monitoring Solutions Ltd. Subsidiary UK 100%
Complete Technical Solutions (CQV) Ltd. Subsidiary UK 100%
Arena Instrumentation Ltd. Subsidiary UK 100%
Ellab GmbH Subsidiary Germany 100%
Ellab SARL Subsidiary France 100%
Ellab Philippines Corp. Subsidiary Philippines 99.97%
Ellab Benelux B.V. Subsidiary Netherlands 100%
Ellab FZCO Subsidiary Dubai 100%
Ellab Italy Srl Subsidiary Italy 100%
Ellab Ireland Ltd. Subsidiary Ireland 100%
Autocal Ireland Ltd. Subsidiary Ireland 100%
CalX Instrumentation Services Ltd. Subsidiary Ireland 100%
Argideen Science Ltd. Subsidiary Ireland 100%
Ellab AG Subsidiary Switzerland 100%
Ellab Austria Subsidiary Austria 100%
Ellab Solutions Spain Subsidiary Spain 100%
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Financial Statements
Parent Company
Page 64
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Income Statement ............................................ 65
Balance Sheet .......................................................... 66
Changes in Equity ............................................ 67
Cash Flow Statement .................................. 69
Notes - Parent company ........................ 70
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Parent Company
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Parent Company
Page 65
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Income Statement ............................................ 65
Balance Sheet .......................................................... 66
Changes in Equity ............................................ 67
Cash Flow Statement .................................. 69
Notes - Parent company ........................ 70
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Income Statement - Parent company
1 May - 30 April
DKK million Note 2022/23 2021/22
Administration costs 0.0 (0.1)
Operating profit 0.0 (0.1)
Special items
3.4 0.0
Profit/loss before net financials
3.4 (0.1)
Financial income
2 0.3 0.4
Profit before tax 3.7 0.3
Income taxes
3 0.6 3.0
Net profit for the year 4.3 3.3
Statement of Comprehensive Income - Parent company
1 May - 30 April
DKK million Note 2022/23 2021/22
Net profit for the year
4.3 3.3
Other comprehensive income
Items that will be subsequently reclassified to
the Income Statement 0.0 0.0
Other comprehensive income for
the year, net of tax 0.0 0.0
Total comprehensive income for
the year 4.3 3.3
Income Statement
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Parent Company
Page 66
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Income Statement ............................................ 65
Balance Sheet .......................................................... 66
Changes in Equity ............................................ 67
Cash Flow Statement .................................. 69
Notes - Parent company ........................ 70
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Balance Sheet at 30 April - Parent company
Assets
DKK million Note 2023 2022
Investments in subsidiaries 4 1,533.6 1,530.6
Total non-current assets
1,533.6 1,530.6
Receivables from group enterprises
5.6 6.4
Other receivables
3.5 0.0
Cash and cash equivalents
0.5 1.3
Total current assets
9.6 7.7
Total assets
1,543.2 1,538.3
DKK million Note 2023 2022
Share capital 17 156.5 155.5
Retained earnings
1,386.7 1,379.2
Total equity
1,543.2 1,534.7
Income tax payables 0.0 0.1
Other payables 0.0 3.5
Total current liabilities
0.0 3.6
Total liabilities 0.0 3.6
Total equity and liabilities 1,543.2 1,538.3
Equity and Liabilities
Balance Sheet
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Parent Company
Page 67
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Income Statement ............................................ 65
Balance Sheet .......................................................... 66
Changes in Equity ............................................ 67
Cash Flow Statement .................................. 69
Notes - Parent company ........................ 70
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Statement of Changes in Equity - Parent company
DKK million Share capital
Retained
earnings Total
Equity at 1 May 2022
155.5 1,379.2 1,534.7
Profit for the year
0.0 4.3 4.3
Total comprehensive income for the year
0.0 4.3 4.3
Capital increase 1.0
28.6 29.6
Acquisition of treasury shares 0.0
(43.5) (43.5)
Disposal of treasury shares 0.0
18.1 18.1
Total transactions with owners in their capacity as owners
1.0 3.2 4.2
Equity at 30 April 2023
156.5 1,386.7 1,543.2
Changes in Equity
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Parent Company
Page 68
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Income Statement ............................................ 65
Balance Sheet .......................................................... 66
Changes in Equity ............................................ 67
Cash Flow Statement .................................. 69
Notes - Parent company ........................ 70
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
DKK million Share capital
Retained
earnings Total
Equity at 1 May 2021
155.5 1,404.2 1,559.7
Profit for the year
0.0 3.3 3.3
Total comprehensive income for the period
0.0 3.3 3.3
Capital increase
0.0 0.0 0.0
Acquisition of treasury shares
0.0 (44.3) (44.3)
Disposal of treasury shares
0.0 16.0 16.0
Total transactions with owners in their capacity as owners
0.0 (28.3) (28.3)
Equity at 30 April 2022
155.5 1,379.2 1,534.7
Statement of Changes in Equity - Parent company
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Parent Company
Page 69
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Income Statement ............................................ 65
Balance Sheet .......................................................... 66
Changes in Equity ............................................ 67
Cash Flow Statement .................................. 69
Notes - Parent company ........................ 70
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Cash Flow Statement - Parent company
1 May - 30 April
DKK million Note 2022/23 2021/22
Net profit for the year 4.3 3.3
Adjustments 12 (0.9) (3.0)
Changes in net working capital 13 (7.0) 0.0
Financial income received 0.3 0.0
Income taxes paid 0.5 5.8
Net cash flow from operating activities (2.8) 6.1
Capital increase in subsidiaries (3.0) (1.9)
Repayment from related parties 0.8 17.2
Net cash flow from investing activities (2.2) 15.3
Acquisition of treasury shares (43.5) (44.3)
Disposal of treasury shares 18.1 16.0
Cash capital increase 29.6 0.0
Cash flow from financing activities 4.2 (28.3)
Net cash flow for the year (0.8) (6.9)
Cash and cash equivalents, beginning of the year 1.3 8.2
Net cash flow for the year (0.8) (6.9)
Cash and cash equivalents at end of the year 0.5 1.3
Cash Flow Statement
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Parent Company
Page 70
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Income Statement ............................................ 65
Balance Sheet .......................................................... 66
Changes in Equity ............................................ 67
Cash Flow Statement .................................. 69
Notes - Parent company ........................ 70
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents Notes - Parent company
1. Accounting policies
2. Financial income
3. Tax on profit for the year
4. Investments in subsidiaries
5. Share capital
6. Financial risk management
7. Capital management
8. Commitments and contingent liabilities
9. Fee to auditors
10. Related parties
11. Events after the balance sheet date
12. Cash flow statement - adjustments
13. Changes in net working capital
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Parent Company
Page 71
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Income Statement ............................................ 65
Balance Sheet .......................................................... 66
Changes in Equity ............................................ 67
Cash Flow Statement .................................. 69
Notes - Parent company ........................ 70
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Parent
1. Accounting policies
The financial statements of the parent have been prepared
in accordance with International Financial Reporting
Standards (IFRS) as adopted by the EU as well as additional
Danish disclosure requirements applying to entities of
large enterprises reporting in class C. The Parent Company
Financial Statements for 2022/23 are presented in million
Danish Kroner (mDKK) with one digit, which is considered
the functional currency of the company’s activities.
The accounting policies are the same as for the consolidated
financial statements with the following exceptions. For a
detailed specification of the parent’s accounting policies,
please see note 1 of the consolidated financial statements.
Investments in subsidiaries
Investments in subsidiaries are recognised and measured
at cost. Where cost exceeds the recoverable amount, write-
down is made to this lower value.
Critical accounting estimates and judgements
For a description of critical accounting estimates and
judgements, please see note 2 of the consolidated financial
statements.
Notes - Parent
2. Financial income
DKK million 2022/23 2021/22
Interest received from group companies 0.3 0.4
0.3 0.4
3. Tax on profit for the year
Current tax:
Current tax on profits for the year
0.1 0.0
Current tax on profits for previous years
(0.7) (3.0)
(0.6) (3.0)
Calculated 22.0% tax on profit for the
year before income tax 0.8 0.1
Tax effects of:
Adj. of tax relating to previous years
(0.7) (3.0)
Non-taxable income
(0.7) (0.1)
(1.4) (3.1)
Effective tax rate
(16)% (1,158)%
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Parent Company
Page 72
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Income Statement ............................................ 65
Balance Sheet .......................................................... 66
Changes in Equity ............................................ 67
Cash Flow Statement .................................. 69
Notes - Parent company ........................ 70
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Parent company
4. Investment in subsidiaries
DKK million 2023 2022
Cost:
At 1 May
1,530.6 1,528.7
Additions during the year
3.0 1.9
At 30 April
1,533.6 1,530.6
Carrying amount 30 April
1,533.6 1,530.6
Reference is made to note 29 in the consolidated financial statements for an
overview of subsidiaries.
5. Share Capital
For a specification of the share capital of the Parent, reference is made to note
17 of the consolidated financial statements.
6. Financial risk management
The activity of the Parent is limited, and the main financial risk that the
company is exposed to is credit risk.
Credit risk
The Parent’s primary credit exposure is related to group receivables. The
Company has intercompany receivables related to loan to group companies.
The credit loss is estimated to DKK 0.0 million (2021/22: DKK 0.0 million).
DKK million 2023 2022
Financial assets
Financial assets at amortised cost:
Receivables from Group
5.6 6.4
Other receivables
3.5 0.0
Cash and cash equivalents
0.5 1.3
9.6 7.7
Financial liabilities
Liabilities at amortised cost:
Other payables
0.0 3.5
0.0 3.5
The carrying value of financial assets and liabilities is, in all materiality, equal
to fair value.
Notes - Parent
Financial assets and liabilities per measurement category
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Parent Company
Page 73
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Income Statement ............................................ 65
Balance Sheet .......................................................... 66
Changes in Equity ............................................ 67
Cash Flow Statement .................................. 69
Notes - Parent company ........................ 70
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
Notes - Parent
7. Capital management
For disclosure on capital management, reference is made to note 20 of the
consolidated financial statements.
8. Commitments and contingent liabilities
Charges and security
Shares in the subsidiaries Kelvin BidCo A/S, Saballe TopCo ApS in liquidation,
Ellab A/S, Ellab Inc., Ellab GmbH, Ellab UK Ltd., Ellab Monitoring Solutions
Ltd. and Ellab Ireland Ltd. have been pledged as security for credit institutions
of the Group company Kelvin BidCo A/S. Kelvin HoldCo A/S has entered into
a surety contract and placed assets in its subsidiaries as security with Kelvin
BidCo’s credit institutions. The carrying amount of the shares are at 30 April
2023 DKK 1,533.6 million (2021/22: 1,530.6 million).
Contingent liabilities
The group companies are jointly and severally liable for tax on the jointly
taxed incomes etc. of the Group. The total amount of corporation tax
payable is disclosed in the Annual Report of Kelvin HoldCo A/S, which is the
management company of the joint taxation purposes. Moreover, the group
companies are jointly and severally liable for Danish withholding taxes by
way of dividend tax, tax on royalty payments and tax on unearned income.
Any subsequent adjustments of corporation taxes and withholding taxes may
increase the Company’s liability.
The Group is not involved in lawsuits expected to have a material effect on the
financial position of the Group.
Notes - Parent
9. Fee to auditors
DKK million 2022/23 2021/22
Audit fee to PwC
0.1 0.1
0.1 0.1
10. Related parties
For related parties disclosure, reference is made to note 29 in the
consolidated financial statements. Details about transactions between Kelvin
HoldCo A/S and subsidiaries are provided in the following.
Significant transactions between Kelvin HoldCo A/S and subsidiaries
Loans from Kelvin HoldCo A/S to subsidiaries of DKK 5.6 million (2021/22:
DKK 6.4 million) with an interest rate of 4.5%. The loans are repayable upon 5
business days written notice and is expected to be repaid in cash.
11. Events after the balance sheet date
On 20 June 2023, the owners of the Kelvin Group, EQT Mid Market Europe
Fund (EQT), signed an agreement regarding the sale of Kelvin Group to Novo
Holdings A/S. Novo Holdings is a holding and investment company that is
responsible for managing the assets and the wealth of the Novo Nordisk
Foundation.
The Group’s borrowings from financial institutions include a change of
control clause, which stipulates that the borrowings will become due
immediately after the change of control. The closing date of the sale of Kelvin
Group is not yet determined.
No other events materially affecting the assessment of the Annual Report
have occurred after the balance sheet date.
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Parent Company
Page 74
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Income Statement ............................................ 65
Balance Sheet .......................................................... 66
Changes in Equity ............................................ 67
Cash Flow Statement .................................. 69
Notes - Parent company ........................ 70
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Contents
DKK million 2022/23 2021/22
Change in other receivables
(3.5) 0.0
Change in other payables
(3.5) 0.0
(7.0) 0.0
Notes - Parent
12. Cash flow statement - adjustments
DKK million 2022/23 2021/22
Financial income
(0.3) (0.4)
Income tax expense
(0.6) (3.0)
Other adjustments
0.0 0.4
(0.9) (3.0)
13. Changes in net working capital
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Parent Company
Management’s Statement
and Auditor’s Report
Page 75
Contents
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Management’s Statement and Auditor’s Report
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Management’s Statement ................ 76
Independent Auditors Report ... 77
Company Information ............................. 79
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Management’s Statement and Auditor’s Report
Page 76
Contents Management’s Statement
Executive Board
Board of Directors
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Management’s Statement and Auditor’s Report
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Management’s Statement ................ 76
Independent Auditors Report ... 77
Company Information ............................. 79
Page 77
Contents Independent Auditors Report
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Management’s Statement and Auditor’s Report
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Management’s Statement ................ 76
Independent Auditors Report ... 77
Company Information ............................. 79
Page 78
Contents Independent Auditors Report
To the Shareholders of Kelvin HoldCo A/S
mne18651
CVR No 33 77 12 31
mne47826
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Management’s Statement and Auditor’s Report
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Management’s Statement ................ 76
Independent Auditors Report ... 77
Company Information ............................. 79
Page 79
Contents Company Information
The Company
The Company
Central Business Registration No: 39 63 10 08
Registered in: Hillerød
Financial period: 1 May 2022 to 30 April 2023
Municipality of reg. office: Hillerød, Denmark
Board of Directors
Bo Harald Peter Risberg | Chairperson
Anna Karolina Levander | Boardmember
Sarah Katherine Newbitt | Boardmember
Rikke Kjær Nielsen | Boardmember
Peter Krogh | Boardmember
Executive Board
Olof Ludvig Enlund | CEO
Lars Normand Hansen | CTO
Andreas Morthorst | CFO
Auditors
KELVIN HOLDCO A/S ANNUAL REPORT 2022-2023
Management’s Statement and Auditor’s Report
Contents
Overview ................................................................................................................. 3
Financial Performance .................................................................... 16
Financial Statements ......................................................................... 22
Parent Company ........................................................................................ 64
Management’s Statement and Auditor’s
Report ........................................................................................................................... 75
Management’s Statement ................ 76
Independent Auditors Report ... 77
Company Information ............................. 79