Let's change it for the better.
NILFISK ANNUAL REPORT 2020
Annual Report 2020
Financial statementsManagement review
Clean is changing
We all want to feel safe – in every aspect of our lives. The COVID-19
outbreak made life uncertain for all of us, and across the world
people became more focused on cleanliness as a parameter
in restoring our sense of safety. We expect a higher standard
of cleaning and we pay attention to the sanitization of our
environments to an entirely new extent. At Nilfisk we are experts in
cleaning, and we want to enable our customers to navigate through
the change of cleaning with in-depth knowledge and the right
technology to ensure high performance and viable businesses.
Management review Financial statements
2020 in brief
Letter from the Chairman
Letter from the CEO
Nilfisk at a glance
Financial highlights 2020
Key events
5-year consolidated financial highlights
Our strategy
Nilfisk Next
Strategic highlights
Strategic priorities
Outlook for 2021
Our business
Business model
Innovation
Portfolio
Operations
Sales and marketing
Our customers
Aftermarket
Our results
Business performance
EMEA
Americas
APAC
Consumer
Private label and other
Financial review
Our governance
Corporate governance
Board of Directors
Nilfisk Leadership Team
Corporate Social Responsibility (CSR)
Risk management
Shareholder information
Consolidated financial statements
Income statement and statement of comprehensive income
Statement of financial position
Cash flow statement
Statement of changes in equity
Notes to the consolidated financial statements
Parent company financial statements
Management’s statement
Independent auditor’s report
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NILFISK ANNUAL REPORT 2020 | 3
Financial statementsManagement review
“No one expected a worldwide pandemic on
the scale we witnessed during the year. We
are obviously not satisfied with the overall
performance for 2020, and we are convinced
that our results can and will be improved.”
Jens Due Olsen
Chairman
“In the first part of the year, we saw a steep
decline in customer demand across markets.
While navigating through this quite unusual
situation, Nilfisk stayed focused on strategy.
Key programs and initiatives were executed
and progressed according to plan.”
Hans Henrik Lund
CEO
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 4
Financial statementsManagement review
Letter from the Chairman Letter from the CEO Nilfisk at a glance Financial highlights 2020 Key events 5-year consolidated financial highlights
strategic direction remained intact, and we believe the transformation
we have carried out over the past three years is right.
The restructuring that we executed during the second quarter of 2020
was based on the global foundation that we have built during previous
years, which is an important element in our transformation of Nilfisk.
Many of the changes we initiated as part of the restructuring would
not have been possible one or two years ago.
Emerging as a stronger company
The COVID-19 pandemic has left its mark not only on the way we work
and do business, but also on cleaning in general. The value of clean has
become even more evident. Nilfisk is in a solid position to benefit from
this development and emerge as a stronger company on the other side
of the pandemic.
We will continue our efforts to develop and market innovative
products, maintaining a modern and streamlined portfolio that caters
to customer needs across markets and sectors. We will again improve
our commercial execution to offer our customers a great experience in
both sales and service to drive growth. And we will leverage our global
Mitigating the heavy impact from COVID-19
and laying the groundwork for a stronger Nilfisk
setup to implement efficiencies across Nilfisk and maintain our position
as a market leader in cleaning.
I would like to thank our shareholders for your continued support
and engagement in Nilfisk, especially during another challenging year
marked by extraordinary circumstances. I would also like to thank
our more than 4,000 employees for their continued engagement and
contribution to Nilfisk, and finally, I would like to thank the Nilfisk
Leadership Team for their dedication to the continued execution of
the strategy and for their determination to persist with the execution
despite tough market conditions.
On behalf of the Board of Directors,
Jens Due Olsen
Chairman
When 2020 began, no one expected a worldwide pandemic on the
scale we witnessed during the year. By the end of March, it was already
clear that the COVID-19 outbreak would have a significant impact on
Nilfisk. The rapid escalation of the pandemic created an unprecedented
level of uncertainty and volatility that forced us to operate our business
under challenging working conditions with a low level of visibility.
With vaccine programs being rolled out in many countries towards
year-end, there was a glimpse of light at the end of the tunnel. But the
COVID-19 pandemic has not disappeared, and it will likely continue
to affect our business in 2021. We are obviously not satisfied with the
overall performance for 2020, and we are convinced that our results
can and will be improved. That said, we are satisfied with how we have
navigated through the pandemic during 2020, and, with the actions
taken, laid the groundwork for an improved Nilfisk.
The strategic direction of Nilfisk remains intact
The pandemic forced us to act. In order to minimize costs and
investments and to free up management resources during the crisis, we
initiated a widescale restructuring along with strict cost control. These
were necessary measures, however, despite these adjustments, our
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 5
Financial statementsManagement review
Letter from the Chairman Letter from the CEO Nilfisk at a glance Financial highlights 2020 Key events 5-year consolidated financial highlights
In the first part of the year, we saw a steep decline in customer
demand across markets as restrictions and lockdowns in response to
COVID-19 forced customers to scale down or temporarily close their
operations. This impacted our revenue. There were large variations
between customer segments and markets; among the most impacted
markets were China and the southern part of Europe.
As the first wave of the pandemic started to ease, we saw a gradual
and steady recovery in demand patterns month by month, despite
the second severe wave of the pandemic towards year-end. Demand
did not reach the level from before the pandemic, however. For the
year as a whole, Nilfisk realized total revenue of 832.9 mEUR in 2020,
corresponding to organic growth of -11.5%.
The decline in revenue led to a lower gross margin due to underutilization
of our production capacity. However, through our efforts to tightly
manage costs in combination with a lower structural cost base, we
mitigated a large part of the negative impact from the lower revenue.
Consequently, EBITDA before special items amounted to 100.5 mEUR
corresponding to an EBITDA margin before special items of 12.1%. This
was in line with last year despite a significant drop in revenue.
Staying focused on strategy
One key observation from 2020 is that while navigating through this
quite unusual situation, Nilfisk stayed focused on strategy. Key programs
and initiatives were executed and progressed according to plan.
One of these was the project to increase efficiency in our European
supply chain setup, and during 2020 we went live with two new
European distribution centers, leading to faster and more efficient
deliveries to our customers. We also continued the execution of the
growth plan for the US business and have started to see positive
indications from this important market. Within our autonomous
solutions we reported solid progress in the sales of the Liberty SC50
scrubber, while launching an additional autonomous scrubber,
the Liberty SC60, as well as an advanced UV-C light solution that
inactivates viruses and other pathogens.
The Nilfisk Next strategy continues to guide the company towards its
vision of leading intelligent cleaning to make our customers’ business
smarter. In 2020, we have steered through turbulent waters in the
marketplace, aiming to emerge on the other side of the pandemic with
new learnings and as a more effective company.
We see 2021 as a year where we can turn our focus even more
towards commercial execution and on systematic improvements of the
experience we offer our customers.
Hans Henrik Lund
CEO
The year 2020 was a year nobody could have foreseen. The COVID-19
pandemic impacted countries, individuals, and businesses around the
world. At Nilfisk, we were also deeply affected by this extraordinary
situation. Even though market demand picked up after a steep drop
in the beginning of the year, 2020 did not materialize as we had
anticipated.
As the COVID-19 outbreak escalated throughout the first quarter, we
implemented extensive safety measures across our business to protect
our employees and continue servicing our customers.
Staying operational during the pandemic has been a key focus for us,
and I am pleased to see that over the course of 2020 we have been
able to continue our production, our distribution, and our sales and
service activities with little to no interruption.
We reacted swiftly to the new situation and disruptions in the
marketplace. While balancing production output with lower demand,
we focused on preserving cash by introducing strict cost management,
tightly steering our working capital, and prioritizing investment. In
parallel, we executed a restructuring plan with the aim of lowering our
structural cost base.
All in all, this allowed us to conclude 2020 in a better position than
when we entered the year. We found new ways of working, utilized our
resources more efficiently, and established a lower structural cost base.
Taking action on the pandemic
and navigating through an extraordinary year
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 6
Financial statementsManagement review
Letter from the Chairman Letter from the CEO Nilfisk at a glance Financial highlights 2020 Key events 5-year consolidated financial highlights
NILFISK AT A GLANCE
Nilfisk delivers a wide range of premium cleaning
products and a trusted aftermarket offering to the
professional market. A combination of direct sales
and partnerships with dealers gives us strong global
customer access.
Nilfisk is a global leader in the professional cleaning equipment industry
Approximately
4,300 employees
across the globe
Letter from the Chairman Letter from the CEO Nilfisk at a glance Financial highlights 2020 Key events 5-year consolidated financial highlights
The Nilfisk Next strategy guides our transformational journey, driving our
business to the peak of profitability while positioning Nilfisk as a leader in
intelligent cleaning.
OBJECTIVES
STRATEGIC DRIVERS
Global
Floorcare Vacuum cleaners High Pressure
Washers
Aftermarket
EMEA AMERICAS APAC
PRIVATE
LABEL
CONSUMER
REVENUE
REVENUE
by products and services
by operating segment
30% 22% 15% 33%
48% 30% 8% 5%9%
37%
in operations
45%
in sales & service
18%
in business support
Asset-light assembly-
focused production, key
sites located in Hungary,
China, Mexico, US,
and Italy
Simplify Grow Digitize Lead
Solutions Digital
NILFISK ANNUAL REPORT 2020 | 7
Financial statements
2020 in brief Our strategy Our business Our results Our governance
Management review
Financial highlights 2020
832.9 mEUR
Revenue
Compared to 2019, total revenue was reduced by 133.6 mEUR,
impacted by low demand due to the COVID-19 pandemic.
-11.5%
Organic revenue growth
Total organic growth was negatively impacted by low demand due to COVID-19
across all markets and customer segments in the branded professional business.
Strong growth in the Consumer business had a positive impact while revenue
declined in Private Label due to out phasing of certain customers.
12.1%
EBITDA margin before special items
EBITDA margin before special items was 12.1% in line with
2019. Cost reductions mitigated the negative impact of
lower gross profit resulting from low demand.
22.1 mEUR
Operating profit
Reported operating profit decreased by 3.8 mEUR
despite a significant drop in gross profit. Lower
overhead costs and special items almost fully off-set the
drop in gross profit.
73.5 mEUR
Free cash flow
Free cash flow increased by 38.2 mEUR compared
to 2019 as a result of lower working capital, lower
special item costs, and lower CAPEX.
2020 832.9
2019 966.5
NILFISK ANNUAL REPORT 2020 | 8
Financial statements
2020 in brief Our strategy Our business Our results Our governance
Management review
Letter from the Chairman Letter from the CEO Nilfisk at a glance Financial highlights 2020 Key events 5-year consolidated financial highlights
Introducing the Nilfisk Liberty SC60
A key element in the Nilfisk Next strategy is to bring innovative digital
solutions to market that enable our customers to clean smarter. Over
the course of 2020, our innovations within autonomous solutions
progressed, and we launched a new robotic floor scrubber, The Nilfisk
Liberty SC60, which is suited for cleaning large indoor spaces. The SC60
complements the abilities of the other robotic floor scrubber in Nilfisk’s
portfolio, the Nilfisk Liberty SC50.
While navigating through the pandemic, and responding
to new customer needs and ways of working, Nilfisk
continued to execute key strategic initiatives
Restructuring plan with steps to further
globalize the company
To mitigate the impact of the pandemic,
Nilfisk announced in May 2020 a restructuring
plan to adjust and structurally lower the
cost base. Measures included a reduction
in the workforce by approximately 250
positions globally as well the implementation
of structural changes that supported the
continued globalization of the company. A
global sales structure was established, along
with a new function to drive a coherent
solutions portfolio across machines, digital
services and business models.
Enhancing the digital customer experience
Over the course of the year, Nilfisk continued the
implementation of a global e-commerce platform
to simplify and globalize digital sales processes and
create a seamless and improved customer experience
online. By year-end, the solution was rolled out in 16
European markets. Other initiatives like virtual product
launch events and trainings, as well the migration to a
scalable and efficient web platform, further supported
an improved customer experience.
KEY EVENTS 2020
Staying focused on strategy
New solutions addressing COVID-19 cleaning challenges
Selected new solutions were brought to market during the year, all tailored to
specific cleaning challenges our customers were facing during the pandemic. A
range of steam cleaners was re-introduced in selected markets, and in the US, a
portable disinfectant sprayer solution was launched in a matter of weeks to meet
customer demand. Later in the year, Nilfisk introduced an innovative UV-light
solution to fight viruses and other pathogens.
During the COVID-19 outbreak,
cleaning has become even more
essential for businesses and
institutions, as they face new
cleaning demands and requirements
brought on by the pandemic.
During 2020, Nilfisk went live with two
new distribution centers in Ghent (Belgium)
and Trollhättan (Sweden) as part of a new
distribution center structure in EMEA
announced in 2019. Learn more on page 19.
NILFISK ANNUAL REPORT 2020 | 9
2020 in brief Our strategy Our business Our results Our governance
Financial statementsManagement review
Letter from the Chairman Letter from the CEO Nilfisk at a glance Financial highlights 2020 Key events 5-year consolidated financial highlights
5-year consolidated
financial highlights
Please find definitions in Note 7.7
EUR million 2020 2019 2018¹ 2017¹ 2016¹
Income statement
Revenue 832.9 966.5 1,054.3 1,081.9 1,058.5
EBITDA before special items³ 100.5 117.7 125.5 120.1 116.8
EBITDA³ 90.6 95.0 69.8 99.5 96.8
Operating profit before special items³ 32.9 49.8 87.4 81.5 75.8
Operating profit³ 22.1 25.9 18.9 60.9 54.0
Special items, net -10.8 -23.9 -68.5 -20.6 -21.8
Financial items, net -14.7 -14.0 -11.3 -8.9 -11.0
Profit for the year -2.6 8.7 10.0 40.3 29.5
Cash flow
Cash flow from operating activities 89.5 76.1 33.1 41.4 114.7
Cash flow from investing activities -16.0 -40.8 -38.6 -35.3 -72.6
– hereof investments in property, plant and equipment -5.4 -10.4 -18.6 -15.3 -20.6
Free cash flow excluding acquisitions and divestments 73.5 35.3 -8.6 6.1 74.2
Statement of financial position
Total assets 763.5 840.1 794.4 827.2 983.1
Group equity 134.8 158.0 147.5 137.5 224.8
Working capital 131.6 157.9 170.4 163.5 141.7
Net interest-bearing debt 383.2 414.1 369.6 359.7 265.8
Capital employed 518.0 572.1 516.8 497.2 490.6
Financial ratios and employees
Organic growth -11.5% -4.1% 2.0% 3.7% 3.1%
Organic growth Nilfisk branded professional business² -13.7% -2.6% 2.8% - -
Gross margin³ 41.6% 42.1% 42.0% 42.2% 41.9%
EBITDA margin before special items³ 12.1% 12.2% 11.9% 11.1% 11.0%
EBITDA margin³ 10.9% 9.8% 6.6% 9.2% 9,1%
Operating profit margin before special items³ 4.0% 5.2% 8.3% 7.5% 7.2%
Operating profit margin³ 2.7% 2.7% 1.8% 5.6% 5,1%
Financial gearing³ 3.8 3.5 2.9 3.0 2.3
Financial gearing excluding IFRS 16 impact³ 4.3 3.9 - - -
Overhead cost ratio³ 37.7% 37.0% 33.1% 34.1% 33.9%
Working capital ratio³ 18.8% 20.6% 18.5% 16.2% 17.6%
Return on Capital Employed (RoCE)³ 5.9% 8.5% 16.7% 16.0% 14.6%
Basic earnings per share (EUR) -0.10 0.32 0.37 1.49 1.09
Diluted earnings per share (EUR) -0.10 0.32 0.37 1.49 1.09
Number of full-time employees, end of period 4,339 4,886 5,482 5,769 5,607
¹ Comparative figures are not restated with the effect of IFRS 16.
² In 2019, the reportable segments were changed, and the Nilfisk branded professional business was established. The related key figures from 2016-2017 have not been calculated.
³ See note 1.1 for changes made in presentation in the income statement. 2019 key figures have been restated, however the related key figures from 2016-2018 have not been restated.
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 10
Financial statementsManagement review
Letter from the Chairman Letter from the CEO Nilfisk at a glance Financial highlights 2020 Key events 5-year consolidated financial highlights
Our strategy
Nilfisk Next is a transformational strategy initiated to simplify
structures and processes, drive profitability, and position
Nilfisk as the leader in intelligent cleaning. While 2020 was
characterized by efforts to navigate through the COVID-19
pandemic and decline in market demand, we saw continued
progress in key strategic initiatives including the expansion of
the portfolio of autonomous cleaning solutions.
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 11
Financial statementsManagement review
Nilfisk Next Strategic highlights Outlook for 2021
Nilfisk Next – a multi-year transformational strategy
Nilfisk Next is a multi-year transformational strategy introduced in
early 2018 to position Nilfisk as a leader in intelligent cleaning while
simplifying the business and driving profitability.
In 2019, our keyword was “Globalize”, as we made significant progress
towards having a global operating model across sales and business
support functions. With the foundation for commercial execution in
place, we entered 2020 determined to get value from the changes
introduced over the previous year to drive growth in key areas of
the business. The COVID-19 pandemic challenged this focus, as
market activity dropped significantly because of lockdowns and local
restrictions to fight the pandemic. While our efforts during 2020 to
a large extent focused on addressing and acting upon the changed
demand patterns in the marketplace, we remained focus on executing
key initiatives rooted in Nilfisk Next, such as simplifying structures in
the supply chain, developing our portfolio of autonomous solutions.
We will lead intelligent cleaning
to make your business smarter
VISION OBJECTIVES STRATEGIC DRIVERS
Global
Solutions
Digital
Simplify Grow
Digitize Lead
The year 2021 will be characterized by dedication to regaining sales
volume as the world is recovering from the impact of the pandemic.
Nilfisk Next will continue to set the overall direction of our priorities,
while we navigate the highly dynamic market conditions brought on by
COVID-19. With the progress made in terms of simplifying structures
and processes over the past years, including the actions taken over the
course of 2020, the foundation for commercial execution is solid.
The pandemic has fundamentally altered the perception of clean, and
individuals and businesses have become more focused on cleanliness
and hygiene. Both elements are now business-critical for all industries.
At Nilfisk, we see this as a paradigm shift that will require many
companies to completely reassess their approach to the concept of
cleaning. We intend to be at the forefront of this development, guided
by our vision and strategy.
Our vision
Technology is enabling smarter cleaning solutions, and at Nilfisk
we have a clear vision of making our customers’ businesses smarter
through intelligent cleaning solutions.
Our vision and strategy are our responses to the ongoing changes
affecting the cleaning industry, many of them reinforced by the
pandemic. The difficulty for many companies is that these higher
standards, including frequent disinfection, must be met without
increasing cleaning time or costs. With no additional time or money
to put toward cleaning, businesses need to get more productivity
out of their existing labor resources. This is where technology comes
in. Connected and autonomous solutions are a growing part of our
customers’ businesses, and together with our business partners, we will
continue to wield the power of technology and develop new solutions
to clean more effectively, safely, and sustainably.
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 12
Financial statementsManagement review
Nilfisk Next Strategic highlights Outlook for 2021
Strategic highlights
While navigating through a challenging year with the pandemic slowing
market activity and disrupting sales and marketing plans, we stayed
focused on executing key strategic projects defined in Nilfisk Next.
During 2020, the implementation of a global operating model was
further reinforced as all sales entities across regions were put under
one leadership in a global sales function. A new Solution Portfolio
function was created to ensure a coherent global focus across our
solutions offering, based on customer and market insights. Sales
efficiency has been further improved as global CRM tools are now in
place. Our IT competences have been moved to an IT hub in Hungary,
which has also enabled us to reduce the use of consultants. Building
on the progress made in earlier years in terms of simplifying and
globalizing the business, we further strengthened the foundation for
commercial execution based on a global operating model.
Other initiatives in 2020 supporting our strategic priorities in Nilfisk
Next included:
Executing on the growth plan in the US
Following a challenging 2019 for Nilfisk in the US, a key priority for
2020 was continued execution of the growth plan, leveraging the full
portfolio, serving our distribution partners better, and strengthening
our approach to strategic accounts. Despite the COVID-19 pandemic,
we have seen progress in all three areas during 2020. The plan was
introduced in 2019 and included a restructure of the sales organization
around key customer segments and around end-user orientation to fuel
demand and bring added value to our comprehensive dealer network,
ultimately benefitting our business.
Expanding sales of autonomous solutions
The Liberty SC50 launched in all key markets in Europe and North
America as well as selected markets in Asia towards the end of 2019,
and during 2020 we have continued the commercialization of this
autonomous solution. Sales have been expanded to multiple customer
segments and cleaning applications, including airports, retail, and
health care in all key markets, supported by a growing interest in
autonomous solutions brought on by the pandemic. New cleaning
demands and requirements brought on by the pandemic have made
cleaning even more essential for businesses and institutions, and
many have turned to autonomous cleaning technology to meet these
new demands, as it provides a number of benefits, such as freeing up
human cleaning staff’s time so they can get more done, guaranteeing
complete coverage, and minimizing the time cleaners need to spend
in populated spaces. During 2020, we introduced a UV-module for the
SC50 autonomous scrubber to target viruses and other pathogens.
Launching an additional autonomous scrubber
In 2020, Nilfisk introduced a new and large autonomous scrubber,
the Nilfisk Liberty SC60, equipped with the largest scrub deck in the
autonomy ride-on category. Learn more on page 18.
Consolidating of the European distribution structure
To continue simplifying the supply chain and to further optimize the
geographical locations of Nilfisk’s distribution centers, Nilfisk continued
in 2020 the implementation of a new distribution center structure in
EMEA. During 2020, we opened new distribution centers in Ghent
(Belgium) and Trollhättan (Sweden), operated by our third-party supply
chain partner. These two distribution centers follow the opening of
a distribution center in Tarragona, Spain, in late 2019. At all three
locations that were determined in accordance with center of gravity
analysis based on current and expected future sales, we will leverage
expertise from our partners and drive efficiencies.
Our strategic objectives
Our response to trends and changing market dynamics is reflected in
Nilfisk Next, which outlines three overall strategic objectives. We want
our customers, shareholders and employees to characterize Nilfisk as:
• A global company: With a standardized global set-up including
uniform processes, systems, and capabilities, we deliver consistent
high-quality cleaning solutions, and a consistent high-quality customer
experience resulting in increased customer loyalty and retention
• A solution partner: By adding value beyond the machine, we
enhance our ability to provide complete solutions for our customers.
We co-innovate with the largest, most advanced global customers
while lowering costs to serve small-to-medium customers through
an optimized mix of sales channels and value-adding service offerings
• A digital leader: We bring innovative digital solutions to market
that enable our customers to clean smarter. In addition, we strive to
establish a uniform data architecture and coherent IT backbone that
allow us to scale our digital investments and deliver an improved
customer experience
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 13
Financial statementsManagement review
Nilfisk Next Strategic highlights Outlook for 2021
2021 outlook
5% to 10%
organic growth for the total business
12.5% to 14.5%
EBITDA margin before special items
Outlook for 2021
Market conditions
We come from a situation where we have seen demand improving
quarter over quarter in the second half of 2020, however, moving into
2021, there has been an increase in lockdowns and restrictions across
markets as a result of the continued outbreak of COVID-19.
With the roll-out of vaccines across markets we expect a more
normalized environment during the second half of the year, but we see,
however, continued uncertainty for market conditions in the year.
Organic growth
We expect the total business in 2021 to generate organic growth of
5% to 10% compared to 2020, based on the market demands trends
that we are experiencing and on the overall expected economic
recovery.
EBITDA margin before special items
With our continued focus on cost discipline and revenue growth as
described above, we expect EBITDA margin before special items to stay
in the range of 12.5%-14.5%.
Forward-looking statements
Statements made about the future in this report reflect
the Executive Management Board’s current expectations
with regard to future events and financial results.
Statements about the future are by their nature subject to
uncertainty, and the results achieved may therefore differ
from the expectations, due to economic and financial
market developments, legislative and regulatory changes
in markets that the Nilfisk Group operates in, development
in product demand, competitive conditions, energy and
raw material prices, and other risk factors.
Nilfisk Holding A/S disclaims any liability to update or
adjust statements about the future or the possible reasons
for differences between actual and anticipated results
except where required by legislation or other regulations.
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 14
Financial statementsManagement review
Nilfisk Next Strategic highlights Outlook for 2021
Ask Chris McMunn how business has been under COVID-19 and
you may be surprised by his response:
“After working 17 years as a key account manager, I actually made
record sales in 2020.”
Chris also found this a bit surprising at first. “It comes down to
trust. I am very fortunate to have established myself
in this position over my years with Nilfisk, forging
many strong relationships and alliances with a
good cross section of customers.”
Presenting a product virtually is easier when
you have already built relations with the
customer. “They know me, so it was not
always necessary to be in front of them for a
product presentation.”
Instead, Chris adapted as best he could by using
mobile phone video chat sessions, as well as links to
YouTube training videos to reach out to his existing customer base.
At first, he wasn’t sure if some of the smaller machines could be
demonstrated or installed virtually but he quickly realized that it
can be done.
“My long-standing customers have responded positively to virtual
sales visits during COVID-19.” He is confident that the option to do
some sales ‘visits’ remotely at Nilfisk will remain even after COVID-
19. “In future, it will be hard to justify travelling two hours to do
a 20-minute sales appointment that we now know can be done
virtually. An additional bonus is that I can use the time saved not
travelling to respond much quicker to customer email requests.”
Chris adds that for new customer leads or demonstration of
larger machinery, “I enlisted the support of some of my
experienced colleagues to do these types of sales
demonstrations.”
Staying in touch with colleagues and management
has worked well under COVID-19. Chris and
colleagues attend bi-weekly virtual sessions with
management to stay informed about the latest
company updates on COVID-19 and other news.
“Not once has there been pressure to do a field
visit. On the contrary, the message is that if you can do
your job from home…stay home, stay safe, especially as the
pandemic continued to escalate in the UK.”
Like so many others, Chris is anxious to get vaccinated against COVID-
19. “It is likely this virus is not going away anytime soon so I am happy
to work for a company that trusts us to find new ways to get the job
done. With a little luck, I hope to be able to surpass my banner 2020
sales in this new year.”
Presenting our
products virtually
”Customers have
responded positively
to virtual sales visits
during COVID-19.”
Chris McMunn, Key Account Manager
17 years with Nilfisk
Sales
Manchester, United Kingdom
WORKING AT NILFISK DURING THE PANDEMIC
The COVID-19 pandemic continues to test the resilience and
agility of working cultures across the globe. While health
authorities do their utmost to safeguard the public, companies
are adopting new ways of working in order to meet their
business objectives, maintain customer service and contribute to
keeping the world’s economy up and running.
At Nilfisk, maintaining business operations, ensuring employee
safety, and continuing customer responsiveness under COVID-
19 is our top priority. Our efforts to bring advanced cleaning
technology and high-performance, industrial grade equipment
to our customers worldwide have become even more relevant
under COVID-19. We service customers worldwide, some of
whom are on the frontlines of the pandemic, managing hygiene
in critically-important indoor spaces such as hospitals, airports,
supermarkets and schools.
In this year’s Annual Report, we are sharing the personal stories
of several employees working in different business areas and
sites within the company. These stories illustrate some of the
key organizational changes we have made under the pandemic
and highlight our renewed sense of purpose and commitment to
meet our customers’ needs and deliver on our mission to 'enable
sustainable cleaning worldwide to improve quality of life'.
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 15
Financial statementsManagement review
Nilfisk Next Strategic highlights Outlook for 2021
Our business
Nilfisk is an established global leader in the cleaning
industry with a broad portfolio of cleaning solutions and
services. Based on customer insights and with a clear focus
on harvesting the benefits of new technologies, we have a
vision of being the leader in intelligent cleaning to make our
customers’ businesses smarter. The COVID-19 pandemic has
left its mark on cleaning in general and has increased focus on
the value of clean.
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 16
Financial statementsManagement review
Business model Innovation Portfolio Operations Sales and marketing Our customers Service and aftermarket
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There is a universal need for cleaning, and the effect of clean is valuable
everywhere. The COVID-19 pandemic has increased focus on cleanliness
and hygiene, which have become business-critical for industries across
the world and require companies to rethink how they approach cleaning.
Our business model is based on creating value for our customers: By
providing high-quality cleaning solutions and services, we enable our
customers to increase their productivity. Cleaning has a measurable
impact for our customers, but also for the general public, who benefit
from living and working in a clean environment.
Our business model
Through a global team of sales representatives
combined with dealers and e-commerce, we build
customer relationships and drive sales across our
strategic customer segments.
Value creation
For our shareholders:
– Total shareholder returns
For our customers:
– Productivity increase
– Improved cleaning, hence
enhanced quality of life for people
For our employees and society:
– Job creation and development
– Tax contribution
– Better cleaning solutions for
the benefit of people and
environment
– Lower consumption of energy,
water and detergent in our products
Resources
Capital provided by investors
and financial partners
Insights from customers and
market analysis
Facilities for development
Innovation
A competent and diverse staff
Starting with customer insights, Nilfisk
develops intelligent cleaning solutions and
services rooted in new technologies and
tailored to our customers’ needs.
Across our extensive Nilfisk
product portfolio, we
aim to deliver a top-tier
cleaning performance,
complemented by
services that increase
productivity and
reduce total cost of
ownership.
A global production
footprint combined
with a distribution set-up
that ensure operational
efficiency and quality.
With innovative
cleaning solutions
we increase cleaning
productivity and quality
for our customers – in
short, we make our
customers’ businesses smarter
through intelligent cleaning
solutions and services.
Through a broad range of
aftermarket solutions and a
global team of dedicated
service technicians,
we ensure that our
customers get the
support and service
needed throughout
the product life cycle.
By providing high-quality cleaning
solutions and services, we enable our
customers to increase their productivity
Nilfisk is an established global supplier of
cleaning equipment and services. Through a
combination of direct and indirect sales, we
service contract cleaners, industrial customers,
healthcare facilities and many more across
approximately 100 countries.
NILFISK ANNUAL REPORT 2020 | 17
Financial statements
Business model Innovation Portfolio Operations Sales and marketing Our customers Service and aftermarket
2020 in brief Our strategy Our business Our results Our governance
Management review
Innovation
Across the world, Nilfisk engineers and specialists work to bring
innovative solutions and services to market.
At Nilfisk, innovation and product development begin with customer
insights. These insights are the guiding principle for the development of
products and services via close cross-functional collaboration between
R&D, marketing, external technology partners and customers.
A global R&D organization
An integral part of the Nilfisk Next strategy is creating a global
organization and operating model with uniform processes, systems,
and capabilities across markets. As part of this, Nilfisk continued to
streamline its operating model for R&D in 2020, integrating R&D
activities related to the Consumer business and the Professional
business into one organization.
As part of the restructuring in 2020, R&D further simplified its
structure, both in terms of product categories and in the different
R&D competence centers globally. R&D
has maintained the mobility of its scalable
operating model, increased efficiency, and
adjusted capacity to reflect fewer product
platforms as a result of simplifying the
portfolio over the recent years.
Moreover, Nilfisk started to increase its R&D
footprint in China towards the end of 2020 in order to leverage the
capabilities of the competence centers in Suzhou and Dongguan and
fully integrate them into the Global R&D organization.
Nilfisk has a clear vision to be the leader in intelligent cleaning.
Our work to bring autonomous solutions and digital services
was a highlight during 2020, as we announced a significant
and high-performance addition to the portfolio of autonomous
solutions.
The Nilfisk Liberty SC60 is Nilfisk’s first autonomous solution
built on technology partner Brain Corp’s BrainOS® AI software
platform. It is equipped with the largest scrub deck in the
autonomy ride-on category, making it ideal for cleaning large
indoor spaces like hypermarkets, warehousing, logistic centers,
light-industry environments, and similar. To this end, the SC60
complements the abilities of the other robotic floor scrubber in
Nilfisk’s portfolio, the Nilfisk Liberty SC50, which is developed
in collaboration with our technology partner Carnegie
Robotics for environments with tighter layouts that need more
precision and agility. Intuitive programming, easy operation,
and trackable performance data define the Liberty portfolio,
allowing the system to integrate seamlessly with each cleaning
team and improve productivity with minimal oversight.
The Nilfisk Liberty SC60 was introduced at an all-virtual launch
event in September and will be commercially available for
selected customers in 2021.
2.8%
Share of revenue
spent on R&D
activities
Building an industry leading
portfolio of autonomous
cleaning solutions
The unique technology of Nilfisk’s Liberty SC50 and SC60
autonomous scrubbers lets the operator map out routes that deliver
98% to 99.5% coverage of the application.
99.5%
coverage
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 18
Financial statementsManagement review
Business model Innovation Portfolio Operations Sales and marketing Our customers Service and aftermarket
indoor spaces where hygiene is of the utmost importance, such as
hospitals, supermarkets, airports, and schools. The module, which
can be retrofitted on existing Liberty SC50 units already in operation
or included as part of new Liberty SC50 installations, was was made
commercially available in North America first and after that gradually
introduced in other markets where the Liberty SC50 is currently sold.
Simplifying and extending our range of scrubber dryers
within mid-market
Over time, Nilfisk has acquired companies all over the world, leading to
a multitude of brands across the business. This has created complexity
for our customers and partners across our value chain. In recent
years, measures have been taken to reduce brand complexity. Nilfisk’s
scrubber dryer portfolio for the mid-market was simplified in 2020.
The number of product platforms was reduced, but productivity and
versatility retained. Old products have been modernized and replaced
by new more contemporary machines, and the Viper branded portfolio
has been extended to increase competitiveness while keeping price and
complexity down.
Operations
In 2020, Nilfisk continued its efforts to simplify the company’s
operational footprint focusing on the continued consolidation of our
distribution structure.
To continue simplifying the supply chain and to further optimize the
geographical locations of Nilfisk’s distribution centers, Nilfisk initiated
the implementation of a new distribution center structure in EMEA in
2019. As laid out in the plan, three new regional distribution centers
have been centrally placed in EMEA,
reflecting the center of gravity of the
European customer base according to
current and expected future sales.
In addition to the facility in Tarragona
(Spain), which opened in late 2019, two
additional distribution centers opened in
2020. One was the main European distribution hub in Ghent (Belgium)
in July 2020, and the other a new facility in Trollhättan (Sweden)
in December. Activities were moved from Nilfisk’s inhouse facilities
in Denmark, where operations terminated at year-end, to the new
distribution facilities operated by a third-party supply chain partner.
Official opening of the new central distribution center in Ghent
An important step for Nilfisk in its journey towards simplifying and
standardizing its supply chain was taken with the official opening of
the second of the new regional distribution centers in 2020. As part of
the Nilfisk Next strategy, the new distribution center in Ghent, Belgium
became operational on July 13, 2020. It consists of 40,000 m
2
of
warehousing operated by 60 employees securing day-to-day delivery to
our customers in the European markets.
Additionally, a new workshop for customizing machines to meet special
requirements and secure “plug & play” solutions for Nilfisk’s customers
has been built at the heart of the new distribution center. It is managed
by a team of Nilfisk specialized technicians.
Portfolio
Nilfisk develops, manufactures, and sells a comprehensive portfolio
of cleaning solutions and services targeting the premium and value
market for professional cleaning, complemented by cleaning solutions
tailored to households.
During 2020, we have established a new function to drive a coherent
solution portfolio across machines, digital services and business models
bringing together various global functions and competences into one
unit. We have also taken an agile approach to our portfolio, adjusting
to the urgent demand for extra hygienic measures and virus control
generated by the pandemic and developing innovative solutions to
meet that demand.
Relaunch of steam cleaners to accommodate
disinfection requirements
Steam helps customers clean and disinfect beyond the typical cleaning
methods. As a response to COVID-19 outbreak and the heightened
need for cleaning and disinfection, Nilfisk decided to relaunch its
steam cleaner portfolio in EMEA during the second quarter. This range
of stream cleaners is targeted towards customers and applications in
various segments, including automotive, health care and hospitality.
Nilfisk pioneers new UV-C light module to disinfect virus
Nilfisk launched an innovation in the autonomous category: an integrated
UVGI (Ultraviolet Germicidal Irradiation) module, which uses UV-C
light to disinfect floors and which can be paired with our Nilfisk Liberty
SC50. The new solution makes Nilfisk the first in the industry to offer
customers a one-step floorcare solution for fully disinfected surfaces.
UV-C technology is a widely used, powerful solution that damages the
DNA of viruses, bacteria, and other pathogens, preventing them from
multiplying and causing diseases. A Nilfisk Liberty SC50 floor scrubber
equipped with the UVGI module can remove dirt and debris while
simultaneously disinfecting surfaces using UV-C light. This combination
of solutions aims to deliver effective cleaning and disinfection of
2
New distribution
centers in Europe
in 2020
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 19
Financial statementsManagement review
Business model Innovation Portfolio Operations Sales and marketing Our customers Service and aftermarket
with an expert panel that provided live feedback. The event was
promoted on global and local marketing channels, including customer
invitations, social media and digital advertising.
A new perception of clean
As the COVID-19 outbreak spread to Europe and the Americas in
March and became a global pandemic, the Nilfisk Insights team began
to collect intelligence on how the pandemic would alter people’s lives,
and what this new reality would mean for professional cleaning. With
that question in mind, Nilfisk developed a Trends eBook, “Cleaning in
the COVID-19 era” that provided expert predictions on the long-term
impact of COVID-19 within the industry, and the segments Nilfisk serves.
Topics of the eBook include:
• Understanding the world’s new standard of clean
• Winning new business in contract cleaning and facility management
• The future of cleaning technology
• Protecting your workforce
• Forming partnerships for success in the new era
Nilfisk used the Trends eBook to share important new intelligence and
put fresh perspectives on the agenda. The insights were distributed
among key customers and shared on
social media, in campaigns, and on
other relevant platforms. In addition,
the customer-facing staff at Nilfisk
benefited from these insights, getting a
better understanding how the needs and
perception of clean were changing for
customers and within segments.
Sales and marketing
Nilfisk ensures strong customer access and global sales coverage by
balancing direct and indirect sales channels.
More than 1,500 full-time employees are working in the Nilfisk sales
force and sales support functions across more than 40 countries in
EMEA, Americas and APAC. This is supplemented by e-commerce
as well as an extensive network of dealers and distributors reaching
customers across approximately 100 markets. They have obviously
all been affected by the COVID-19 outbreak and the drop in demand
experienced in 2020.
Interacting with customers in a COVID-19 reality
The pandemic led our sales and marketing force to explore new digital
ways to interact with customers and external partners, as they were
working under restrictions to meet in-person because of lockdowns
and other restrictions. Online training sessions were arranged across
segments for customers and dealers, with adaptations for the COVID-
19 situation. For example, Nilfisk’s ABCA (Agriculture, Building &
Construction, Automotive) team rolled out a range of high-pressure-
washer webinars designed to increase knowledge of Nilfisk’s sales
tools, product offerings, and the role that those who clean play in
ensuring high hygiene levels and sustainable, cost-efficient cleaning.
Additionally, our sales teams have increasingly met customers online,
conducting virtual customer meetings and even product demos.
Virtual event on autonomous solutions
The first-ever virtual launch event, “Accelerating Your Autonomous
Journey with Nilfisk” was held in September, bringing customers
on the autonomous journey and introducing the next steps in the
product road map. Over 1,600 external participants from 75 different
countries registered for the event, and close to 700 viewers followed
the event live. Since then, more participants have viewed the event
‘on-demand’. During the event, the success of the Nilfisk Liberty SC50
was covered along with Nilfisk’s multi-partner strategy for development
of autonomous solutions. Participants had the opportunity to interact
91%
The professional market
accounted for 91% of
Nilfisk’s total revenue in
2020 (87% in 2019)
7 trends
Based on insights
Nilfisk presented seven
new standards of clean
in the Trends eBook
Our customers
The need for cleaning is universal, and the effect of clean is valuable to
our customers everywhere. Nilfisk serves customers around the world,
targeting the customer segments where we see the best fit between
our portfolio and position in the market, and supported by insights and
analytics these segments are served by a dedicated sales and service
force that allows us to understand the needs of the customer, both
now and in the future.
With a product portfolio spanning from
advanced industrial vacuum solutions
to high pressure washers and floorcare
equipment, Nilfisk has a unique offering in
terms of breadth and depth. We see this as
a competitive edge that is especially relevant
for customers in the manufacturing industries
and contract cleaners, whose cleaning needs
are many and varied.
Large variations in COVID-19 impact
Across markets, we have seen large variations in the impact of the
COVID-19 pandemic with some customer segments being more heavily
impacted than others. The hospitality sector experienced the most
severe drop in activity due to local lockdowns, while, on the other end
of the scale, customer segments like pharma and food manufacturers,
food retailers, and the healthcare sector became busier. After they
adjusted operations to the new reality, we saw demand from these
customers return to a more normal level, and demand in some cases
increased, however, not enough to compensate for the decline in sales
to the hospitality sector.
During the latter part of 2020, several countries and regions
experienced spikes in confirmed COVID-19 cases, causing local
authorities to reintroduce restrictions and lockdown. Overall, Nilfisk
has been able to continue sales and service activities even in areas
with local spikes. This was partly a result of the work done by most
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 20
Financial statementsManagement review
Business model Innovation Portfolio Operations Sales and marketing Our customers Service and aftermarket
Daniel Del Barrio Sanchez awoke on a clear morning in late March
2020 with a sense of dread. Normally, this would be just another
typical day at work for the Nilfisk service technician, who was
scheduled to make a routine repair on a BR855 scrubber dryer at a
large community hospital in Guadalajara, Spain.
But these are not normal times. At this point, Spain was in the
throes of the first wave of the COVID-19 pandemic. The country
was gripped with uncertainty and there was a sense of chaos as
public health officials still had more questions than answers about
how to protect the nation’s citizens against this new, and rapidly
escalating threat.
“I had to enter the hospital to work with machinery that had
been exposed to COVID-19. I could sense the tension
and anxiety within the hospital corridors. Even
though I had no direct contact with patients or
personnel, I was still very nervous as so little
was known about the virus at that time.”
The hospital, which services a population of
90,000 residents, plays a key frontline role in
the response to the pandemic. “The machine
I was repairing helps to keep some of the most
exposed areas of the hospital clean – perhaps
even more relevant under COVID-19 – so I felt the
importance of my job for both the hospital and the people they care
for.”
Daniel is thankful for his years of experience and the ongoing support
from colleagues and managers at Nilfisk during the crisis:
“Every effort has been made to provide us with the necessary safety
equipment and to adapt protocols so we can continue to respond to
customer needs while staying safe. We now completely isolate the
machines to thoroughly clean them before doing repairs. This has
helped me to overcome my fear, stay focused and return home safely
to my family.”
As a technician, Daniel is used to working on his own but under
COVID-19, he appreciates the regular online and virtual
meetings with colleagues and management. These
meetings have helped him to stay informed about
what’s going on at the company, and to share
encouragement and support with his colleagues
during these difficult times.
“The humanity of the company and colleagues
has shined brightly during this crisis. I believe
that this experience is helping us to be better
people, more sensitive towards to the needs and
concerns of others.”
Servicing hospitals
during COVID-19
”We have become
better, more
sensitive, people
during this crisis.”
Daniel Del Barrio Sanchez, Field Service Engineer
4 years with Nilfisk
Service
Madrid, Spain
WORKING AT NILFISK DURING THE PANDEMIC
companies and institutions to adjust their operations to the new reality
brought on by the pandemic. These adjustments made it possible for
Nilfisk to continue conducting customer visits, product demonstrations
and service calls, either physically or digitally, even in areas with
restrictions. As a result, we did not experience the same correlation
between lockdowns and declining demand in the latter part of 2020 as
we did during the earlier stages of the pandemic.
Service and aftermarket
With a comprehensive service and aftermarket offering, Nilfisk aims
to ensure maximum uptime for our cleaning equipment used by
customers around the world. In addition to a portfolio of cleaning
equipment and solutions, Nilfisk provides value-added aftermarket
offerings such as service solutions, parts, and accessories. The total
aftermarket segment accounted for 33% of revenue in 2020.
A total of 500 Nilfisk Field Service
Engineers and additionally 300 authorized
third-party technicians work within Nilfisk
Service Solutions to help ensure that the
customers’ cleaning equipment perform
and has minimal downtime. Third-party
technicians are certified by Nilfisk to
ensure consistent service quality across our
entire global network.
800
Technicians
125,000
Machines maintained
annually
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 21
Financial statementsManagement review
Business model Innovation Portfolio Operations Sales and marketing Our customers Service and aftermarket
Our results
The COVID-19 pandemic had a significant negative impact on market
demand in 2020, in turn negatively impacting revenue. In 2020,
Nilfisk realized total revenue of 832.9 mEUR and organic growth
of -11.5%, positively impacted by sequential quarter-over-quarter
improvement during the second half of the year in both EMEA and
the Americas. EBITDA before special items amounted to 100.5 mEUR
corresponding to an EBITDA margin before special items of 12.1%.
NILFISK ANNUAL REPORT 2020 | 22
2019 in brief Our strategy Our business Our results Our governance
Financial statementsManagement review
Business performance EMEA Americas APAC Consumer Private label and other Financial review
Revenue and organic growth by operating segments, 2020
EUR million Revenue 2020 Revenue 2019
Organic growth
2020
Impact of acquisitions/
divestments
Impact of foreign
exchange rates Total growth
EMEA 396.6 453.0 -11.6% - -0.9% -12.5%
Americas 247.6 291.3 -12.4% - -2.6% -15.0%
APAC 65.8 93.5 -28.0% - -1.6% -29.6%
Nilfisk branded
professional business 710.0 837.8 -13.7% - -1.6% -15.3%
Consumer 76.0 75.8 15.7% -14.2% -1.2% 0.3%
Private label and other 46.9 52.9 -11.3% - - -11.3%
Total 832.9 966.5 -11.5% -0.8% -1.5% -13.8%
2020 in brief
• Total revenue of 832.9 mEUR corresponding to
reported growth of -13.8%
• Organic growth for the total business was -11.5%
heavily affected by low demand due to the COVID-19
pandemic
• Organic growth in the branded professional business
was -13.7% with improved quarter-over-quarter
performance in EMEA and the Americas in the second
half of the year
• EBITDA before special items amounted to 100.5 mEUR,
corresponding to an EBITDA margin before special
items of 12.1%. Excluding the positive impact from
government support of 4.3 mEUR, the EBITDA margin
was 11.6%
• Special items was 10.8 mEUR and mainly related to
redundancy costs
• Operating profit amounted to 22.1 mEUR
corresponding to an operating profit margin of 2.7%
• Working capital amounted to 131.6 mEUR, and
working capital measured in percentage of revenue
was reduced by 1.8 percentage points to 18.8%
• Free cash flow increased by 38.2 mEUR compared to
2019 and came to 73.5 mEUR
Business performance
2020
2019
48% EMEA
47% in 2019
10% in 2019
30% in 2019
8% in 2019
5% in 2019
APAC 8%
Consumer 9%
Private label and other 5%
Americas 30%
REVENUE
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 23
Financial statementsManagement review
Business performance EMEA Americas APAC Consumer Private label and other Financial review
The COVID-19 pandemic affected all markets and customer segments
in the EMEA region. The impact was most severe in EMEA South in
the beginning of the pandemic. However, the region subsequently
experienced a faster recovery compared to the two other regions.
During the second part of the year, all key markets in EMEA
experienced quarter-over-quarter pick-up in demand.
EMEA realized revenue of 396.6 mEUR compared to 453.0 mEUR in
2019 corresponding to reported growth of -12.5%. The effect from
foreign exchange rates was -0.9% and the underlying organic growth
for the full year was -11.6%. The EMEA South region in particular
was impacted by the heavy restrictions that were imposed early in the
year in larger markets such as France and Italy. However, EMEA South
recovered faster than the other regions during Q3 and Q4. In both the
EMEA North and EMEA Central regions, the demand decline was less
severe in Q2, but recovery was slower during the second half of the
year. EMEA North had the best performance and ended the year with
flat organic growth compared to 2019.
Gross profit amounted to 183.1 mEUR in 2020, which is 32.2 mEUR
lower than in 2019. This corresponds to a gross margin of 46.2%
compared to 47.5% in 2019. The gross margin was negatively impacted
by lower capacity utilization and higher freight costs compared to
2019.
EMEA
The negative impact on gross profit from lower demand was partly
mitigated through lower personnel costs and activity-related costs
such as marketing and travel costs. As a result, EBITDA before special
items came to 102.4 mEUR, which is 25.7 mEUR lower than 2019.
This corresponds to an EBITDA margin before special items of 25.8%
compared to 28.3% in 2019.
-11.6%
Organic growth
25.8%
EBITDA margin before
special items
46.2%
Gross margin
396.6 mEUR
Revenue
102.4 mEUR
EBITDA before special items
Key markets:
Germany, France, UK, Denmark, Sweden
47.7%
Share of total revenue
30%
19%
2020
40%
11%
SALES BY PRODUCT – EMEA
High pressur
e washers
Aftermarket
Floorcare
Vacuum cleaners
2019
32%
19%
11%
38%
Map showing countries with Nilfisk sales entities in the region
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 24
Financial statementsManagement review
Business performance EMEA Americas APAC Consumer Private label and other Financial review
Despite significant negative impact from the COVID-19 pandemic, the
full-year performance in Americas was positively affected by a quarter-
over-quarter improvement in the US in the second half of the year.
In Canada and the Latin American markets, demand remained low
following the escalation of the pandemic.
Total revenue in Americas amounted to 247.6 mEUR in 2020 compared
to 291.3 mEUR in 2019 corresponding to reported growth of -15.0%.
Foreign exchange rates accounted for -2.6% of the decline, mainly due
to a lower US dollar, leaving underlying organic growth of -12.4%.
As mentioned above, despite a negative start to the year, the positive
development in performance in the US during the second half of the
Americas
year positively affected organic growth for 2020 for Americas as a
whole. In contrast, Canada started the year with solid performance
in Q1, but was heavily impacted by the COVID-19 pandemic and a
subsequent slow recovery in demand through Q2, Q3 and Q4. In the
Latin American markets that constitute approximately 5% of revenue
in Americas, performance during the year was mixed, but on average,
organic growth was lower than in Canada and the US.
Gross profit for Americas amounted to 100.5 mEUR in 2020 compared
to 122.8 mEUR in 2019. The gross margin was 40.6% which was a
decrease of 1.6 percentage points compared to 2019. The decrease is
mainly explained by lower capacity utilization, while pricing effects had
a slightly positive impact mainly driven by the US.
Lower overhead costs partly mitigated the drop in gross profit. The cost
reduction was driven by both lower activity costs and lower personnel
costs. EBITDA before special items was 8.6 mEUR lower than 2019 and
came to 46.4 mEUR, but the EBITDA margin before special items was
with 18.7% in the same level as in 2019.
-12.4%
Organic growth
18.7%
EBITDA margin before
special items
40.6%
Gross margin
247.6 mEUR
Revenue
46.4 mEUR
EBITDA before special items
Key markets:
US, Canada, Mexico
29.7%
Share of total revenue
49%
10%
13%
28%
47%28%
14%
11%
SALES BY PRODUCT – AMERICAS
High pressur
e washers
Aftermarket
Floorcare
Vacuum cleaners
2020
2019
Map showing countries with Nilfisk sales entities in the region
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 25
Financial statementsManagement review
Business performance EMEA Americas APAC Consumer Private label and other Financial review
Map showing countries with Nilfisk sales entities in the region
The COVID-19 pandemic had a severe impact on the APAC region in
2020, since the widespread outbreak began early in Q1 and demand
in China dropped significantly as a result of extensive lockdowns. As
the pandemic spread to other APAC markets, the hospitality segment
was significantly impacted, which had a negative effect on revenue
throughout the year. The Pacific region was also negatively impacted
but showed good performance in the second half of the year.
Total revenue in APAC amounted to 65.8 mEUR for the full year, which
was 27.7 mEUR lower than 2019 corresponding to reported growth
of -29.6%. Foreign exchange rates had a negative impact of -1.6%,
mainly due to lower AUD and CNY, and underlying organic growth
was -28.0%. The negative organic growth in APAC in 2020 was to a
large extent driven by the Southeast Asian markets such as Thailand,
Malaysia, and Singapore, where our business is highly exposed to the
hospitality segment. In this segment, covering hotels, restaurants, etc.,
APAC
the impact from the pandemic has been deep throughout the year.
China also contributed to the negative organic growth in APAC due to
a slow pickup in demand across channel partners.
Gross profit amounted to 25.5 mEUR in 2020 compared to 35.9 mEUR
in 2019. The gross margin was 38.8% compared to 38.4% in 2019.
Compared to 2019, the gross margin was negatively impacted by lower
capacity utilization, whereas last year’s margin was negatively impacted
by mix effects from relatively lower sales in the Pacific region and
inventory revaluations in the second half of 2019.
Lower activity related costs mitigated a small part of the drop in gross
profit, and EBITDA before special items came to 3.5 mEUR compared
to 12.4 mEUR the year before. This corresponds to an EBITDA margin
before special items of 5.3% compared to 13.3% in 2019.
-28.0%
Organic growth
5.3%
EBITDA margin before
special items
38.8%
Gross margin
65.8 mEUR
Revenue
3.5 mEUR
EBITDA before special items
Key markets:
Australia, China, Singapore, Thailand
7.9%
Share of total revenue
32%
22%
35%
11%
SALES BY PRODUCT – APAC
High pressur
e washers
Aftermarket
Floorcare
Vacuum cleaners
35%
22%11%
32%
2020
2019
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 26
Financial statementsManagement review
Business performance EMEA Americas APAC Consumer Private label and other Financial review
The Consumer business showed strong performance in 2020, partly driven by high demand
as a result of the stay-at-home restrictions imposed in many markets, along with a focused
commercial effort following a period with organizational changes in 2019. In addition to a
strong sales momentum throughout the year, these efforts also led to several new customer
wins in 2020.
The consumer business posted revenue of 76.0 mEUR in line with the year before resulting in
reported growth 0.3%. The exit from the Pacific region early in Q4 2019 had a negative impact
of -14.2%, and foreign exchange had a negative effect of -1.2%. Underlying organic growth
amounted to 15.7% and was driven by strong growth in larger markets such as Denmark, UK,
Germany, and France. On the product side, growth was strong within high pressure washers.
Gross profit increased by 3.0 mEUR to 25.6 mEUR in 2020 and so did the gross margin by
3.9 percentage points to 33.7%. The gross margin was negatively affected by higher freight
costs due to a relatively larger share of railroad freight compared to 2019. In Q4 2019, the
gross margin was significantly negatively affected by large one-time sales with low margins in
connection with the exit from the Pacific region.
Revenue in the Private label business amounted to 46.9 mEUR compared to 52.9 mEUR in 2019.
Foreign exchange effect was zero and, consequently, organic growth equaled total growth of
-11.3%. The reduction in revenue is primarily due to phase out of certain customers during
the year.
Gross profit increased by 1.3 mEUR and came to 12.0 mEUR. The gross margin increased by
5.4 percentage points to 25.6% driven by product mix effects, in particular higher sales of parts
and accessories in Q4 2020.
Consumer Private label and other
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 27
Financial statementsManagement review
Business performance EMEA Americas APAC Consumer Private label and other Financial review
Financial review for the total business
Revenue
In 2020, total revenue for Nilfisk amounted to 832.9 mEUR compared
to 966.5 mEUR in 2019, which corresponds to reported growth of
-13.8%. The exit from the Consumer business in the Pacific region in
Q4 2019 had a negative impact of -0.8%, whereas foreign exchange
rates had a negative impact of -1.5% of which USD accounts for
approximately one third. Underlying organic growth was negative by
11.5%.
Revenue growth FY 2020
Organic -11.5%
Consumer exit from Pacific -0.8%
Foreign exchange -1.5 %
Total growth -13.8%
Organic growth in Nilfisk’s branded professional business was -13.7%,
positively impacted by performance in EMEA and the US in the second
half of the year.
The Consumer and Private label businesses posted organic growth of
15.7% and -11.3%, respectively, leading to negative organic growth for
the total business of -11.5 %.
Gross profit
Gross profit for the total business amounted to 346.7 mEUR in 2020
compared to 407.3 mEUR in 2019. The gross margin was 41.6%, which
was 0.5 percentage point lower than in 2019 mainly due to lower
capacity utilization. Higher freight costs in the second part of the year
also had a negative impact.
Business performance EMEA Americas APAC Consumer Private label and other Financial review
Pricing and improved margin in the consumer business, as earlier
described, had a positive impact on the margin compared to 2019.
Overhead costs and ratio
Overhead costs were reduced by 43.7 mEUR compared to 2019 and
came to 313.8 mEUR, partly compensating for the lower gross profit.
During Q2 and Q3, Nilfisk received government support of 4.3 mEUR
in total. The underlying reduction of 39.4 mEUR was driven partly by
restructurings leading to lower personnel costs and partly by lower
activity-related costs such as marketing, freight and travel costs. In
addition, the use of consultants was significantly lower than in 2019.
Finally, foreign exchange had a positive impact of approx. 5 mEUR
driven by USD and MXN. The overhead cost ratio was 37.7% compared
to 37.0% in 2019. Excluding the positive impact from government
support programs, the overhead cost ratio was 38.2%.
Total R&D spend decreased by 13.0 mEUR compared to 2019 and
amounted to 23.1 mEUR equivalent to 2.8% of the total revenue in
2020. The reduced spend is partly a result of low activity during the
most severe phase of the pandemic in Q2 and Q3 but also a result of
a more effective R&D setup as well as a smaller and more streamlined
product portfolio compared to 2019. Out of the total spend of 23.1
mEUR, 15.0 mEUR was recognized as an expense in the income
statement (2019: 13.4 mEUR) while 8.1 mEUR or 35.1% was capitalized
(2019: 22.7 mEUR or 61.2%). In addition to expensed costs, total
reported R&D costs for 2020 of 31.7 mEUR (2019: 30.9 mEUR) also
includes amortization, depreciation and impairment of 16.7 mEUR in
line with the level in 2019.
In line with our strategy we continued to invest in the future growth
of Nilfisk. Consequently, out of the total of 8.1 mEUR in capitalized
R&D costs, roughly half was directed towards development of digital
solutions, connectivity devices and autonomy.
Research and development costs 2020 2019
Total R&D spend 23.1 36.1
Capitalized 8.1 22.7
Expensed in the P&L 15.0 13.4
R&D ratio (%of revenue) 2.8% 3.7%
Expensed R&D spend 15.0 13.4
Amortization, depreciation and impairment 16.7 17.5
Total R&D expenses 31.7 30.9
Sales and distribution costs were reduced by 24.0 mEUR and amounted
to 220.8 mEUR. The reduction was partly driven by lower personnel
costs and partly by lower activity-related costs such as marketing,
freight and travel costs.
Administration costs were also reduced and amounted to 64.6 mEUR
compared to 82.1 mEUR in 2019. The reduction was mainly driven
by lower personnel costs, but lower consultancy and travel costs also
contributed.
Other operating income/expenses was net 3.3 mEUR compared to
net 0.3 mEUR in 2019. The income was positively impacted by directly
received government support of 4.3 mEUR.
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 28
Financial statementsManagement review
Working capital
At the end of 2020, working capital was 131.6 mEUR, down by 26.3
mEUR compared to 2019. The reduction was driven by lower operating
working capital - inventory and trade receivables in particular – as a
result of lower revenue impacted by the COVID-19 pandemic, and pro-
active adjustment of inventories and receivables collection in response.
At the end of 2020, inventories were 23.4 mEUR lower than end of
2019 as a result of a lower activity level in Q4 compared to 2019.
Despite a high level of uncertainty, we have proactively adjusted
production activity and inventory levels to expected demand
throughout the year. As a result, we have reduced the level of inventory
days compared to 2019.
Trade receivables were 20.8 mEUR lower than same time last year and
amounted to 154.2 mEUR at the end of 2020. The decrease was mainly
driven by lower sales, with an additional contribution from an increased
focus on credit collection throughout the year. As a result, days sales
outstanding was notably reduced compared to 2019, especially in
APAC.
Trade payables were reduced by 12.0 mEUR and came to 99.9 mEUR
as a result of lower activity compared to 2019 in correlation to the
inventory development as described above.
The 12-month average working capital ratio was reduced by 1.8
percentage points compared to 2019 and came to 18.8%.
Capital employed and RoCE
As of December 31, 2020, capital employed amounted to 518.0 mEUR,
which was a reduction of 54.1 mEUR compared to 2019. The reduction
in capital employed was to a large extent driven by lower working
capital but also by a lower level of capitalized assets such as R&D
projects.
The return on capital employed was 5.9%, which is 2.6 percentage
points lower than 2019 mainly due to lower operating profit.
EBITDA before special items and EBITDA
EBITDA before special items decreased by 17.2 mEUR compared to
2019 and came to 100.5 mEUR for the full year, which corresponds to
an EBITDA margin before special items of 12.1% in line with 2019. The
margin was negatively impacted by a lower gross margin as a result
of low capacity utilization, whereas the operating cost ratio improved
compared to 2019. Adjusting for government support of 4.3 mEUR,
EBITDA before special items was 96.2 mEUR and the corresponding
margin was 11.6%.
EBITDA amounted to 90.6 mEUR compared to 95.0 mEUR in 2019. The
EBITDA margin improved by 1.1 percentage points to 10.9% due to
lower special items.
Operating profit before special items and operating profit
Operating profit before special items amounted 32.9 mEUR compared
to 49.8 mEUR in 2019. This corresponds to an operating profit margin
before special items of 4.0% compared to 5.2% in 2019.
Operating profit came to 22.1 mEUR compared to 25.9 mEUR 2019.
Despite the lower result, the operating profit margin was unchanged at
2.7% due to lower special items compared to 2019.
Special items
Special items for the full year amounted to 10.8 mEUR compared to
23.9 mEUR in 2019. The special items primarily related to redundancy
costs related in connection with the restructuring carried out in Q2
(and to a minor extent Q3) as response to the COVID-19 situation, and
to costs incurred for the consolidation of our European distribution
centers.
Details on special items are described in Note 2.4.
Share of profit from associates
From 2020, in addition to the part ownership of M2H in France and
CFM Lombardia in Italy, associates in Nilfisk Group also include Thoro
LLC, a newly established joint venture in Q3 2020 with Carnegie
Robotics.
In Q3 2020, Nilfisk carved out the IP rights for the autonomous robotics
software developed in corporation with Carnegie Robotics to Thoro
LLC. The technology has potential and is proven within cleaning. It is
now at a maturity stage where it can be leveraged further through
development in a separate technology company focused on commercial
applications that can be offered to third-party customers. In
connection with the carve-out, a fair value assesment has been carried
out resulting in IP being transferred at book value.
Share of profit from associates amounted to 0.1 mEUR compared to 3.7
mEUR in 2019. The decrease was driven by a loss in Thoro as well as
lower earnings in M2H.
Financial items
Financial items, net increased by 0.7 mEUR to -14.7 mEUR in 2020
compared to 2019.
Financial income decreased by 0.6 mEUR, while financial expenses
were at the same level as 2019. Interest expenses increased due to
refinancing and increased funding cost, partly offset by lower exchange
rate losses and costs related to phantom hedge compared to 2019.
Tax on profit for the year
TTax on profit for the year was -10.1 mEUR compared to -6.9 mEUR
in 2019. Tax on profit for the year 2020 was related to current tax
on profit of 6.4 mEUR and deferred tax of 3.6 mEUR. In 2019 tax on
profit for the year of 6.9 mEUR was mainly 11.5 mEUR in current tax on
profit, partly offset by -5.5 mEUR in deferred tax.
The tax on profit for 2020 is mainly related to tax asset valuation
allowances of 7.2 mEUR compared to 1.3 mEUR in 2019.
Profit (loss) for the year
Loss for the year amounted to -2.6 mEUR compared to a profit of 8.7
mEUR in 2019.
Business performance EMEA Americas APAC Consumer Private label and other Financial review
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 29
Financial statementsManagement review
Cash flow
Cash flow from operating activities before financial items and income
taxes amounted to 113.5 mEUR, which is 9.5 mEUR higher than in
2019. The improved cash flow was mainly driven by higher operating
profit after special items and non-cash adjustments, but cash flow from
working capital also contributed. Net financial expenses and income
tax paid amounted to a net outflow of 24.0 mEUR, which is 3.9 mEUR
lower than 2019 due to lower financial income as described earlier. All
in all, total cash flow from operating activities in 2020 was 13.4 mEUR
higher than in 2019 and came to 89.5 mEUR.
Cash flow from investing activities for 2020 amounted to a net cash
outflow of 16.0 mEUR, which is 24.8 mEUR lower than in 2019 due
to postponement of projects during the most severe phase of the
pandemic.
All-in-all, the free cash flow increased by 38.2 mEUR compared to 2019
and amounted to 73.5 mEUR.
Equity
Equity was 134.8 mEUR at the end of 2020 against 158.0 mEUR at the
end of 2019. The reduction was mainly a result of negative impact from
foreign exchange effects.
Net interest-bearing debt
At the end of 2020, total net interest-bearing debt was 383.2 mEUR,
down by 30.9 mEUR compared to year-end 2019. The reduction is
a result of a positive operating profit combined with a low level of
investments and a reduction of the working capital.
The financial gearing at the end of the year was 3.8 compared to 3.5 at
the end of 2019. Excluding the effect from IFRS 16 the financial gearing
was 4.3 compared to 3.9 end of December 2019.
Business performance EMEA Americas APAC Consumer Private label and other Financial review
“We work in a fast-paced, high-tech industry, so Nilfisk’s top
management had already recognized the value of adopting digital
working solutions before the pandemic hit. However, there is no
doubt that under COVID-19, both the pace and the acceptance to
working more digitally has been accelerated across the company.”
Abiola Adedeji, a native Nigerian and mother of three boys, started
working at Nilfisk in 2019 after completing a Masters’ degree in IT.
She recalls vividly how one of her Danish professors
at that time had encouraged her to switch from
Marketing to an IT major:
“She was quite adamant that digital was
the wave of the future and being fluent in
IT would be a highly valuable skill to have.”
Abiola has never regretted taking this
prescient advice. Interacting digitally helps
Abiola work with colleagues around the world
and support local operations even better.
She notes that while digital work has been a steep learning
curve for some colleagues, most are discovering that working
digitally brings greater degrees of freedom and flexibility.
“Colleagues are working on platforms that they never would have
tried before and discovering their own capacity for adaptation.
They have stepped out of their comfort zones and are reaping
the benefits. Likewise, Nilfisk management has been reassured that
employees work more efficiently and continue to deliver quality
results when they successfully incorporate digital solutions into their
everyday work.”
“By supporting the adoption of more digital ways of working, I have
been able to help colleagues speed up delivery timelines despite
the need to address new challenges every day under COVID-19. For
instance, if operating hours are reduced due to a tightening of
COVID-19 restrictions at one site, I am able to pick up the
ball remotely to ensure smooth business continuity
locally.”
Abiola is confident that many of the new, more
digital ways of working will persist even after the
COVID-19 crisis is over.
”We are all working smarter and with greater
efficiency and flexibility, which is imperative under
COVID-19 but also makes sense under normal conditions.
The pandemic has served as a painful reminder that life is often
unpredictable and, in order to remain competitive, companies will
need to stay agile. Digital solutions help us to do just that.”
“Nilfisk is turning the COVID-19 challenge into a positive force for
change within the company that improves the ways in which we work
together to succeed.”
Working digitally brings
greater freedom and flexibility
”We are all
working smarter and
with greater efficiency
and flexibility”
Abiola Adedeji, Global Digital Marketing Specialist
WORKING AT NILFISK DURING THE PANDEMIC
2 years with Nilfisk
Marketing
Nilfisk HQ, Broendby, Denmark
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 30
Financial statementsManagement review
Business performance EMEA Americas APAC Consumer Private label and other Financial review
In Q4 2020, revenue amounted to 220.2 mEUR corresponding to
reported growth of -5.8% compared to revenue in Q4 2019 of 233.8
mEUR. The consumer business’ exit from the Pacific region had a
negative effect on the growth of 0.3% and foreign exchange effects
had a negative effect of 3.4% of which almost half was due to a lower
USD. Consequently, organic growth was -2.1%.
In EMEA, organic growth was -5.1% driven by continued demand
recovery in EMEA North. In Americas, organic growth was positive by
2.1% driven by positive growth in the US. It should be mentioned that
comparison numbers for the US were low as a result of a slowdown
in the industrial segment in Q4 2019. In APAC, organic growth for the
quarter was -20.6% positively impacted by continued performance
improvement in the Pacific region, although China only showed a
modest improvement in performance compared to past quarters. In
other APAC markets, the hospitality segment was still heavily impacted
by the COVID-19 pandemic negatively impacting organic growth in Q4.
All-in-all, the branded professional business posted organic growth of
-4.6% compared to Q4 2019.
The consumer business continued its solid performance from previous
quarters and recorded organic growth of 17.5% driven by continued
strong sales execution in combination with continued high demand in
the market. The private label business posted organic growth of 22.6%
impacted by demand from the building and construction sector.
Despite lower revenue, gross profit was in line with last year at 93.3
mEUR (Q4 2019: 93.8 mEUR). The gross margin was 42.4%, which is
2.3 percentage points higher than in Q4 2019 mainly due to sale of
goods at low margins in the consumer business in connection with the
exit from the Pacific region in Q4 2019.
Overhead costs were reduced by 5.4 mEUR compared to Q4 2019 and
amounted to 81.2 mEUR corresponding to an overhead cost ratio of
36.9% in line with Q4 2019. The cost reduction was primarily driven
by lower personnel costs, but lower activity related costs such as travel
and marketing also contributed. R&D spend was lower than in Q4
2019 due to a lower level of activity, but the rate of capitalization was
lower, consequently resulting in higher R&D expenses in the income
statement.
EBITDA before special items came to 30.9 mEUR, which was 5.7 mEUR
higher than Q4 2019 due to lower overhead costs. As a result, the
EBITDA margin before special items improved by 3.2 percentage points
to 14.0%.
EUR million Q4 2020 Q4 2019*
Revenue 220.2 233.8
Gross Profit 93.3 93.8
Overhead costs 81.2 86.6
EBITDA before special items 30.9 25.2
Operating profit before special items 12.1 7.2
EBITDA 30.4 22.4
Operating profit 11.3 4.2
Financial ratios:
Organic growth -2.1% -6.3%
Gross margin 42.4% 40.1%
EBITDA margin before special items 14.0% 10.8%
Operating profit margin before special items 5.5% 3.1%
Overhead cost ratio 36.9% 37.0%
*Changes in presentation to the income statement has been made. Comparative figures have
been restated.
Performance in Q4 2020
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 31
Financial statementsManagement review
Our governance
The duties and responsibilities of Nilfisk’s various governing
bodies are determined by Danish law and Nilfisk’s corporate
governance principles, which aim to ensure active and
accountable business management across the Group.
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 32
Financial statementsManagement review
Corporate governance Board of Directors Nilfisk Leadership Team CSR Risk management Shareholder information
Nilfisk Board of Directors
US Committee
– Jens Due Olsen (Chair)
– René Svendsen-Tune
– Richard Bisson
Project
Management
Office
Committee
– Anders Runevad (Chair)
– Are Dragesund
– Franck Falezan
Remuneration
Committee
– Jutta af Rosenborg (Chair)
– Thomas Lau Schleicher
Nomination
Committee
– René Svendsen-Tune (Chair)
– Franck Falezan
Audit
Committee
– Jutta af Rosenborg (Chair)
– Are Dragesund
Chairmanship
– Jens Due Olsen (Chairman)
– Anders Runevad
(Deputy Chairman)
Corporate governance
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 33
Financial statementsManagement review
Corporate governance Board of Directors Nilfisk Leadership Team CSR Risk management Shareholder information
Norbert Czinkoczi leads his team of 20 production workers like
family. “We have been working together for decades, husbands
working alongside wives and even next generation family members.”
When reports of COVID-19 were first broadcast, the employees
at Nilfisk’s Nagykanizsa production site did not believe the
pandemic would reach their little corner of the world.
Nagykanizsa is a community of about 47,000
residents located in southwest Hungary near the
border with Croatia and Austria.
“However, we became increasingly alarmed by the
infection’s rapid spread and the ensuing chaos in
heavily-impacted countries.”
Building on best practice and experience at Nilfisk sites
around the world, the local crisis management team (CMT)
implemented new safety protocols aimed at keeping employees
safe and production lines up and running. And it was not until
early 2021 the first cases of COVID-19 hit Norbert’s team and other
employees at the site:
“The son of a couple on my team became ill and the parents later
tested positive but did not get sick.”
Norbert has been impressed by the CMT’s preparedness
and dedication throughout. “Thanks to their open and clear
communications, we have avoided outbreaks and extended
production shutdowns.”
As a team leader, Norbert emphasizes mutual trust and caring
to maintain a productive, clean, and safe work environment. “By
reaffirming our bond as a community, we are staying safe.”
Keeping a sense of humor is also essential. “Wearing a mask 10-12
hours a day is tough. When a team member accidentally used
his white mask as a napkin during lunch, we all laughed as
he put the napkin on like a mask for fun.”
Norbert and his team are determined to keep
customers happy by delivering orders on time despite
COVID-19. Undoubtedly, the biggest challenge has
been living and working with the unpredictability
caused by the pandemic. Issues with getting supplies
on time due to transportation delays and quarantine
restrictions across supply countries are likely to persist.
“We have responded by ensuring constant communication between
managers and robust production processes. For instance, we are now
able to swap a full line to a different product family if needed.”
As an employer of 500 residents, Nilfisk plays a significant role in
the community, and the importance of clean and safe hospitals,
schools and other public areas has become even more relevant under
COVID-19.
“Even if we play just a small role in fighting against this pandemic, I
am proud.”
Facing uncertain times
on the production line
”By reaffirming
our bond as a
community, we are
staying safe.”
Norbert Czinkoczi, Production Team Leader
WORKING AT NILFISK DURING THE PANDEMIC
16 years with Nilfisk
Production
Nagykanizsa, Hungary
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 34
Financial statementsManagement review
Corporate governance Board of Directors Nilfisk Leadership Team CSR Risk management Shareholder information
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 35
Financial statementsManagement review
Corporate governance Board of Directors Nilfisk Leadership Team CSR Risk management Shareholder information
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 36
Financial statementsManagement review
Corporate governance Board of Directors Nilfisk Leadership Team CSR Risk management Shareholder information
In March 2020, when the first COVID-19 cases were being reported
in the US, crisis management teams (CMT’s) at Nilfisk sites across
the country were already implementing new working guidelines
aimed at safeguarding employee health and maintaining business
operations. In the office, large gatherings were banned, the distance
between workstations was increased and routine health
and safety drills became the new norm. Those staying
at home gained expertise taking meetings on a
virtual work platform introduced just months
earlier in the company.
“In the beginning, we were communicating
new guidelines and rules every week as the
pandemic continued to upend life as we knew it.”
Tammy and the CMT team knew that these
guidelines could, at best, only lower infection risk at
work.
“The biggest risk of exposure occurs outside the workplace, such
as family events and while out shopping. Educating about COVID-
19 precautions at work served to heighten individual responsibility
and awareness, while also building employee loyalty.”
It is this commitment to take care of one another and themselves
that Tammy hopes will ultimately keep employees safe.
“Nilfisk has been recognized as an essential business throughout the
pandemic because we deliver products and services that keep the
nation’s public establishments and industrial workplaces clean and
safe. Our hygiene mandate gained even greater significance under
COVID-19, so we need to keep our employees healthy and delivering
on this promise.”
Tammy believes that some of the most profound
changes to the way people work at Nilfisk will
persist even after COVID-19. “In 2020, we had to
survive. Our goal for 2021 is to thrive. Changes
like the One Team, One Agenda philosophy are
unifying our teams more than ever before.”
For now, Tammy is happy fulfilling her CMT
role to ensure the safety and screening of all
employees, provide access to necessary counseling as
well as protective equipment, and also facilitate open and
transparent communications between the company’s leaders and
employees and vendors.
“Ensuring that each employee who comes through the door in the
morning is well, stays well, and is ready to provide the necessary
partnership with leaders to ensure our business is fully operational is
something I am proud to be doing.”
Safeguarding
employee health
”Educating about
COVID-19 precautions
at work served to heighten
individual responsibility
and awareness.”
Tammy Ketcher, HR Business Partner and COVID-19 Crisis Team Lead
WORKING AT NILFISK DURING THE PANDEMIC
20 years with Nilfisk
HR
Springdale, Arkansas, USA
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 37
Financial statementsManagement review
Corporate governance Board of Directors Nilfisk Leadership Team CSR Risk management Shareholder information
Board of Directors
Jens Due Olsen
Chairman, born 1963
Independent
Anders Runevad
Member, born 1960
Independent
Richard Bisson
Member, born 1959
Independent
Are Dragesund
Member, born 1975
Non-independent
Frank Falezan
Member, born 1971
Non-independent
Jutta af Rosenborg
Member, born 1958
Independent
First elected in October 2017 October 2017 March 2019 June 2020 June 2020 October 2017
Expiry of current term March 2021 March 2021 March 2021 March 2021 March 2021 March 2021
Core competencies • Industrial management
• Management of listed companies
• Economic and financial matters
• International management
• Management of listed companies
• Large infrastructure projects
• Strategy Development and
Implementation
• Branded Product Management
and Innovation
• Global Manufacturing
• Supply Chain
• M&A and capital markets,
restructuring and profit
improvement, strategy and
organization
• Strategy, restructuring and
finance
• International management
• Management of listed companies
• Finance and business
optimization
Committees • Chairmanship
• US
• Chairmanship
• Project Management Office
• US • Audit
• Project Management Office
• Nomination
• Project Management Office
• Audit
• Remuneration
Selected positions
and directorships
• Chairman of the board
of directors of NKT A/S,
Børnebasketfonden, Advantage
Investment Partners A/S, NIL
Technology A/S
• Deputy Chairman of KMD A/S
• Adviser to Chairman and CEO of
Vestas Wind Systems A/S
• Director of the board in
Schneider Electric, Vestas Wind
System and PEAB
• Chairman of the board
PGA National Sweden
• CEO of K&N Filtration
• CEO of Alpha Guardian
• CEO of Water Pik, Inc.
• Member of the board of directors
at K&N Filtration and Super
Stroke Inc.
• Co-Head Ferd Capital, Ferd AS,
Member of the board of directors
of Mestergruppen A/S
• Founder and Managing Partner
at PrimeStone
• Member of the board of
directors of NKT A/S, Standard
Life Aberdeen PLC, JPMorgan
European Investment Trust plc,
PGA European Tour (retired on
December 31, 2020), and BBGI
SICAV S.A.
Education • MSc in Economics • MSc in Electrical Engineering • BSc in Industrial Technology • MsC Economics and Business
Administration
• Master in Business Administration • MSc in Business Economics and
Auditing
Nilfisk shares end of 2020
(end of 2019 shown in brackets)
21,732 (21,732) 2,000 (1,000) 0 (6,500) 0 (0) 0(0) 0 (0)
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 38
Financial statementsManagement review
Corporate governance Board of Directors Nilfisk Leadership Team CSR Risk management Shareholder information
Board of Directors
Gerner Raj Andersen
Employee Representative,
born 1966
Søren Giessing Kristensen
Employee Representative,
born 1986
Yvonne Markussen
Employee Representative,
born 1959
First elected in March 2018 March 2018 February 2019
Expiry of current term March 2022 March 2022 March 2022
Position at Nilfisk • Sales assistant
• Joined Nilfisk in 1990
• R&D Engineer
• Joined Nilfisk in 2015
• Assistant Payroll department
• Joined Nilfisk in 2006
Committees • N/A • N/A • N/A
Selected positions
and directorships
• Owner of Mågaard I/S
• Member of the board of
Sem Vandværk
• N/A • N/A
Education • Secondary program • M.Sc. Electro Mechanical
Engineering
• Vocational training as clerk with
emphasis on accounting
Nilfisk shares end
of 2020 (end of 2019
shown in brackets)
210 (210) 0 (0) 6 (6)
Thomas Lau Schleicher
Member, born 1973
Non-independent
Rene Svendsen-Tune
Member, born 1955
Independent
First elected in March 2019 October 2017
Expiry of current term March 2021 March 2021
Core competencies • Executive management, financial
reporting, risk
• Management, capital markets
expertise, strategy and M&A
• International management
• Leading Stock Listed Companies
• Service businesses
• Large account sales
Committees • Remuneration • Nomination
• US
Selected positions
and directorships
• Chief Investment Officer,
KIRKBI A/S
• Chairman, Välinge Group AB,
Chairman Adapture Renewables
Inc, member of the board of
directors of Falck A/S, Boston
Holding A/S and KIRKBI Burbo
Extension Holding (UK) Limited
(a fully-owned subsidiary of
KIRKBI A/S)”
• CEO of GN Store Nord A/S and
GN Audio A/S
• Deputy chairman of the board of
directors of NKT A/S
• Chairman of the board of
directors of Stokke A/S
Education • MSc in Finance and Accounting • BSc Eng. (hon.)
Nilfisk shares end of 2020
(end of 2019 shown in brackets)
2,600 (2,600) 4,000 (4,000)
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 39
Financial statementsManagement review
Corporate governance Board of Directors Nilfisk Leadership Team CSR Risk management Shareholder information
Nilfisk Leadership Team
Hans Henrik Lund
CEO
Member of the Executive Management Board
Prisca Havranek-Kosicek
CFO
Member of the Executive Management Board
Jacob Blom
Executive Vice President
HR
Hans Flemming Jensen
Senior Vice President
Corporate Affairs
Joined Nilfisk in 2017 2019 2016 2017
Core competencies • International business management
• Business transformation
• Technology
• Product development
• Corporate Finance
• Financial Planning and Analysis
• Group Controlling
• Treasury
• Investor Relations
• IT
• HR management
• Implementation of group processes and
HR systems
• Global HR transformation
• M&A, partnerships & ventures
• Global corporate & commercial legal matters
• Capital markets
• Negotiation and international commercial
relationships
Positions and Directorships: • N/A • Allianz Elementar Versicherungs-AG,
Allianz Elementar Lebensversicherungs-AG
• Officer (reservist), Danish Army • N/A
Previous Positions: • Helvar Oy
• Microsoft
• Nokia
• GN Netcom A/S
• Novozymes
• Kuoni
• DSM
• NCC AB
• TDC A/S
• Merk, Sharp & Dohme
• Kromann Reumert
• NKT Holding A/S
Education • MSc in Mechanical Engineering
• Ph.D in Material Science
• MBA in Organization and Business
Management
• Ph.D. in Business Administration and
Management
• Graduate Diploma in Organization
& Leadership
• Officer, Danish Army
• Master of Laws, University of Copenhagen
Nilfisk shares end of 2020
(end of 2019 shown in brackets)
19,600 (19,600) 0 (0) 200 (200) 735 (735)
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 40
Financial statementsManagement review
Corporate governance Board of Directors Nilfisk Leadership Team CSR Risk management Shareholder information
Nilfisk Leadership Team
Steen Lindbo
Executive Vice President
Sales
Jesper Terndrup Madsen
Executive Vice President
Operations & Service
Pierre Mikaelsson
Executive Vice President
R&D
Camilla Ramby
Executive Vice President
Marketing
Joined Nilfisk in 2018 2015 2019 2018
Core competencies • International B2B sales
• Commercial development
• Channel strategy
• Product/pricing strategies
• End-to-end operations management
• Business transformation &
turn around
• R&D
• Product Development
• Technology Management
• Product Management
• Marketing & Communication
• Commercial Excellence & Product
Management
• eCommerce
• Data and advanced analytics
Positions and Directorships: • N/A • N/A • N/A • N/A
Previous Positions: • Stanley Black & Decker, Inc. • Royal Copenhagen A/S
• GN Netcom A/S
• Accenture
• ABB Robotics
• KUKA Robotics
• Danske Bank A/S
• TDC A/S
• Codan A/S
Education • Diploma Business Finance • MSc in Economics &
Business Administration
• M.Sc. Chalmers University
of Technology
• MSc in International marketing
& Management
Nilfisk shares end of 2020
(end of 2019 shown in brackets)
0 (0) 0 (0) 15 (15) 0 (0)
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 41
Financial statementsManagement review
Corporate governance Board of Directors Nilfisk Leadership Team CSR Risk management Shareholder information
CLIMATE AND ENVIRONMENTWORKPLACESOCIETY
Financial statements
Corporate governance Board of Directors Nilfisk Leadership Team CSR Risk management Shareholder information
2020 in brief Our strategy Our business Our results Our governance
Management review
NILFISK ANNUAL REPORT 2020 | 43
Financial statements
Corporate governance Board of Directors Nilfisk Leadership Team CSR Risk management Shareholder information
2020 in brief Our strategy Our business Our results Our governance
Management review
Risk management
Risk is a natural part of doing business. At Nilfisk we have a structured,
consistent and continuous approach to ensure that our risk exposure is
assessed and managed.
The overall objective of risk management is to support the realization
of Nilfisk’s strategy and support our operational and financial
objectives, ensuring that risks are properly identified and mitigated.
We use an integrated risk management framework to identify, assess,
manage, monitor and communicate risks across the company.
The Board of Directors has oversight responsibility for risk
management. One of the Board’s responsibilities is overseeing and
interacting with the Nilfisk Leadership Team with respect to key aspects
of Nilfisk’s business, including risk assessment and mitigation of key
risks. Evaluation of key risks is carried out by the Board at least twice a
year, and risks are monitored on an ongoing basis.
The Nilfisk Leadership Team is responsible for the identification,
assessment, prioritization and mitigation of strategic, financial,
operating, CSR, compliance, safety and reputational risks as well as
risks related to other areas.
Risks are assessed according to a two-dimensional heat map rating
system estimating the likelihood and business impact.
Risk areas
The following five risk areas are identified as high-impact risks that
could have a material, adverse effect on our business, financial
condition and/or operating results.
1. Transformation initiatives
2. Commoditization
3. Political and economic instability including trade conflicts
4. Operational interruptions (production and distribution)
5. Interruptions to IT services or systems
Please refer to the overview on the following page.
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 44
Financial statementsManagement review
Corporate governance Board of Directors Nilfisk Leadership Team CSR Risk management Shareholder information
Risk Risk mitigation
Transformation
initiatives
Nilfisk’s ongoing focus on simplification, growth and digitalization requires execution of
significant transformative initiatives including organizational changes, optimization of cost
structures, reallocation of resources, reducing our global CO
2
footprint, implementation of
market strategies, and standardized processes. If the expected benefits and savings arising from
the transformation initiatives and processes are not realized and continued, this may negatively
impact our ability to meet our strategic objectives, improve profitability and serve our customers.
We closely monitor and track initiatives across the Group to ensure the execution and
realization of benefits. Tracking and coordination of transformation projects across Nilfisk
is carried out centrally and seeks to enhance speed and quality of execution, plus ensure
organizational implementation and value realization. A monthly follow-up is carried out by
the Nilfisk Leadership Team, enabling immediate reaction if needed.
Commoditization Customer demand is changing towards low-price “good-enough” products. At the same time,
competition is intense, and low-cost competition could come to a level where customers will
be hesitant to paying a premium for higher quality products. Nilfisk’s competitors include
various large global and regional enterprises as well as smaller regional or local companies. Our
operational results and financial position may be negatively impacted if Nilfisk products do not
satisfy customer demand.
We monitor indicators on customer behavior in terms of both segment trends and purchase
loyalty. And we review our product portfolio on a range of KPI’s on an on-going basis. Nilfisk
responds to changes in customer behavior with a strategy focused on product innovation
and uniquely positioned customer offerings in which we add value beyond the machine to
deliver cleaning solutions that blend into operations and integrate digital services, collectively
increasing the value of clean and helping our customers to reduce their global CO
2
footprint.
We leverage our strengths within brands, product portfolio range, product quality, and
customer access, and we scale benefits due to our size and geographical coverage.
Political and
economic instability
including trade
conflicts
Adverse economic conditions including a risk of economic conflicts may negatively impact our
financial position and decrease demand for Nilfisk products and affect sales in a downward
direction. At the same time, major social or political changes may disrupt sales and operations.
We closely monitor developments in our markets and the global economic situation to be
able to respond in a timely manner to any adverse developments. We also mitigate possible
negative macroeconomic changes through financial hedging and by maintaining variability in
our cost base.
Operational
interruptions
(production and
distribution)
Failures or delays may occur through the entire supply chain including sourcing of components,
manufacturing, and distribution of products. In daily operations we are dependent on
information technology systems, production companies and distribution centers. If functionality
is interrupted in any of these, for a substantial period, our business continuity planning might be
insufficient to continue daily operations. In addition, our global operations are subject to various
local legislation, creating a legal risk of not being compliant with such laws and regulations.
We focus on optimal production and distribution footprint including several production
facilities and distribution centers, dual sourcing initiatives, optimization of supply chain
processes and modularization strategy with the aim of increasing scale advantages and
reduction of production complexity. To mitigate climate related obstructions, we have
conducted a materiality assessment of the climate impact on our entire value chain, which
provides a roadmap on where we have to act in order to mitigate these risks. Finally, we
continuously monitor functionality of utilities and compliance with applicable regulations.
Interruptions to IT
services or systems
Nilfisk’s IT systems are subject to damage or interruption from power outages, computer and
telecommunications failures, malware, catastrophic events and user errors. Errors made due
to lack of user awareness or deliberate misuse, such as individual attempts to gain access to
systems, are among the risks Nilfisk faces. Inadequate management of changes to systems or
service together with ineffective measures to deter, prevent, detect and react to such attempts
might expose Nilfisk to risks. Further, Nilfisk is faced with the threat of security breaches (viruses,
ransomware, etc.) such as attempts of hacking our information technology systems.
We have implemented procedures and management processes to ensure necessary
availability for critical IT systems and services. Furthermore, we have developed and actioned
an IT security policy to prevent intentional damage to our systems and limit access to critical
data and systems. Finally, initiatives have been planned and implemented to secure the
digital business, strengthen the infrastructure platform and enhance IT service and recovery
business continuity plans.
For further information of risks related to currency, interest rate, credit and liquidity, please refer to Note 6.3.
Nilfisk’s high-impact risk areas
Description of the five risk areas identified as high-impact risks and related risk mitigation.
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 45
Financial statementsManagement review
Corporate governance Board of Directors Nilfisk Leadership Team CSR Risk management Shareholder information
Shareholder information
Nilfisk is listed on Nasdaq and is included in the Copenhagen Mid
Cap index.
Share capital 27,126,369 shares
Nominal value per share 20 DKK
Closing price at December 30, 2019 145.8 DKK
Closing price at December 30, 2020 131.6 DKK
Change during the financial year -9.7%
At the end of 2020, the market capitalization of Nilfisk amounted to
3,570 mDKK.
Ownership structure
The company has approximately 13,300 registered shareholders who
together hold 96.7% of the total share capital. The company has one
share class and the number of shares and voting rights are equal.
The break down of shareholders is set out in the table below:
Shareholders at December 31, 2020 Number of shares Share capital
KIRKBI Invest A/S, Billund, Denmark 5,493,200 20.3%
Ferd AS, Lysaker, Norway 5,406,277 19.9%
PrimeStone Capital LLP, London, United Kingdom 4,478,497 16.5%
Institutional investors, Denmark 3,407,332 12,6%
Institutional investors, International 4,773,625 17.6%
Private investors 2,663,634 9.8%
Non-registered 900,804 3.3%
Dividend policy and dividend for 2020
The Board of Directors have adopted a dividend policy with a target
pay-out ratio of approximately one third of the financial year’s reported
consolidated profit for the year.
The payment of dividends, if any, will in general be determined with
a view to balance the pay-out ratio mentioned above and the target
for the Group’s leverage ratio. It will further depend on a number of
factors, including future revenue, profits, financial conditions, general
economic and business conditions, future prospects, strategic initiatives
such as acquisition activities or large scale investments decided upon
by the Board of Directors, or other factors the Board of Directors may
deem relevant, as well as applicable legal and regulatory requirements.
At the Annual General Meeting to be held on March 26, 2021, the
Board of Directors will propose not to distribute dividends for the
financial year of 2020 as the leverage target in the capital distribution
policy is not met.
Investor relations website
Our online resource investor.nilfisk.com provides information about
the Group and its shares, share price, and financial data, in addition
to company announcements, annual and quarterly reports, investor
presentations, and transcripts.
Investor relations
Nilfisk works to maintain a high and consistent level of information
for investors. We are proactive and open when communicating with
shareholder-related stakeholders within the boundaries of current
regulation.
We place great emphasis on providing consistent and high-quality
information to the financial markets as well as to new investors,
analysts, and other stakeholders through road shows, conferences,
company announcements, and via our investor relations website. For
further details on our investor relations policy, please visit
investor.nilfisk.com.
At year-end 2020, Nilfisk Holding A/S is covered by four equity analysts
who regularly publish their recommendations on the share. For a full
list of analysts, please visit investor.nilfisk.com.
Financial calendar 2021
March 3 Annual Report 2020
March 26 Annual General Meeting
May 28 Q1 interim report 2021
September 1 Q2 interim report 2021
November 24 Q3 interim report 2021
Jan Feb Mar Apr May Jun Jul Aug Sep Oct NovDec
-
40%
-
20%
0%
20%
40%
OMXC25
NLFSK
2020 in brief Our strategy Our business Our results Our governance
NILFISK ANNUAL REPORT 2020 | 46
Financial statementsManagement review
Corporate governance Board of Directors Nilfisk Leadership Team CSR Risk management Shareholder information
Consolidated financial statements 2020
Income statement 49
Statement of comprehensive income 49
Statement of financial position 50
Cash flow statement 51
Statement of changes in equity 52
1 Basis for reporting 53
1.1 Basis for preparation 53
1.2 Key accounting estimates and judgments 55
1.3 Implementation of new or changed accounting standards
and interpretations 56
2 Profit for the year 57
2.1 Segment information 59
2.2 Revenue 60
2.3 Research and development costs 62
2.4 Special items 63
2.5 Amortization, depreciation and impairment 64
2.6 Other operating income 64
2.7 Financial items 64
2.8 Tax 65
3 Remuneration 67
3.1 Staff costs 67
3.2 Remuneration to the Board of Directors and the Nilfisk
Leadership Team 67
3.3 Long-term incentive programs 68
4 Capital employed and other balance
sheet accounts 70
4.1 Capital employed 70
4.2 Impairment test 71
4.3 Intangible assets 73
4.4 Property, plant and equipment 75
4.5 Right-of-use assets 77
4.6 Pension liabilities 79
4.7 Provisions 81
5 Working capital 82
5.1 Inventories 83
5.2 Trade payables and liabilities 83
5.3 Trade receivables 84
6 Capital structure 85
6.1 Net interest-bearing debt 85
6.2 Investments in associates 86
6.3 Financial risks and financial instruments 87
6.4 Share capital 94
7 Other notes 95
7.1 Fees to auditors elected at the annual general meeting 95
7.2 Events after the balance sheet date 95
7.3 Related parties 95
7.4 Other non-cash adjustments 95
7.5 Contingent liabilities, securities and contractual obligations 95
7.6 Group companies 96
7.7 Definitions 97
Notes
Significant judgments made by the Executive Management
Board are included in the notes to which they relate in order to
increase clarity.
!
Key accounting judgments
Significant estimates made by the Executive Management
Board are included in the notes to which they relate in order to
increase clarity.
Key accounting estimates
Sensitivity analysis often accompanies key accounting estimates,
and is included in the notes to which it relates in order to
increase clarity.
±
Sensitivity
Accounting policies are included in the notes to which they
relate in order to facilitate understanding of the contents and
the accounting treatment applied. Accounting policies not
relating directly to individual notes are stated in Note 1.1.
§
Accounting policy
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 48
Financial statementsManagement review
Income statement
for the years ended December 31
Statement of comprehensive income
for the years ended December 31
EUR million Note 2020 2019
Revenue 2.1, 2.2 832.9 966.5
Cost of sales 2.5, 3 -486.2 -559.2
Gross profit 346.7 407.3
Research and development costs 2.3, 2.5, 3 -31.7 -30.9
Sales and distribution costs 2.5, 3 -220.8 -244.8
Administrative costs 2.5, 3 -64.6 -82.1
Other operating income 2.6 5.5 4.1
Other operating expenses -2.2 -3.8
Operating profit before special items 32.9 49.8
Special items, net 2.4, 2.5 -10.8 -23.9
Operating profit 22.1 25.9
Share of profit from associates 0.1 3.7
Financial income 2.7 0.6 1.2
Financial expenses 2.7 -15.3 -15.2
Profit before income taxes 7.5 15.6
Tax on profit for the year 2.8 -10.1 -6.9
Profit (loss) for the year -2.6 8.7
To be distributed as follows:
Profit (loss) attributable to shareholders of Nilfisk Holding A/S -2.6 8.7
Total -2.6 8.7
Earnings per share (based on 27,126,369 shares issued)
Basic earnings per share (EUR) 6.4 -0.10 0.32
Diluted earnings per share (EUR) -0.10 0.32
EUR million Note 2020 2019
Profit (loss) for the year -2.6 8.7
Other comprehensive income (loss)
Items that may be reclassified to the income statement:
Exchange rate adjustments of subsidiaries -19.2 5.4
Value adjustment of hedging instruments:
Value adjustment for the year 0.2 -0.5
Transferred to cost of sales - -1.7
Transferred to staff costs - 0.9
Transferred to financial income and expenses -0.6 -
Tax on value adjustment of hedging instruments 2.8 -0.1 0.6
Items that may not be reclassified to the income statement:
Value adjustment of hedging instruments transferred to inventory - -0.4
Actuarial gains (losses) on defined benefit plans -1.5 -1.1
Tax on actuarial gains (losses) on defined benefit plans 2.8 0.4 0.1
Total comprehensive income (loss) for the year -23.4 12.0
To be distributed as follows:
Comprehensive income (loss) attributable to shareholders of Nilfisk Holding A/S -23.4 12.0
Total -23.4 12.0
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
NILFISK ANNUAL REPORT 2020 | 49
Financial statementsManagement review
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
Statement of financial position
at December 31
EUR million Note 2020 2019
Assets
Goodwill 166.0 168.5
Trademarks 7.8 9.6
Customer related assets 6.1 8.5
Development projects completed 24.8 39.1
Software, Know-how, Patents and Competition Clauses 30.6 27.4
Development projects and software in progress 21.4 34.0
Total intangible assets 4.2, 4.3 256.7 287.1
Land and buildings 7.9 8.5
Plant and machinery 3.4 4.0
Tools and equipment 29.4 35.0
Assets under construction incl. prepayments 3.1 3.7
Right-of-use assets 4.5 65.2 54.5
Total property, plant and equipment 4.2, 4.4 109.0 105.7
Investments in associates 6.2 29.3 21.5
Other investments and receivables 4.3 2.8
Deferred tax 2.8 20.5 25.1
Total other non-current assets 54.1 49.4
Total non-current assets 4.1 419.8 442.2
Inventories 5, 5.1 149.3 172.7
Trade receivables 5, 5.3, 6.3 154.2 175.0
Interest-bearing receivables 6.1, 6.3 3.0 4.7
Income tax receivable 5 5.0 5.1
Other receivables 5, 6.3 19.1 21.1
Cash at bank and in hand 13.1 19.3
Total current assets 343.7 397.9
Total assets 763.5 840.1
EUR million Note 2020 2019
Equity and liabilities
Share capital 6.4 72.9 72.9
Reserves -15.8 3.9
Retained earnings 77.7 81.2
Total equity 134.8 158.0
Deferred tax 2.8, 4.1 6.9 7.0
Pension liabilities 4.1, 4.6 7.1 5.9
Provisions 4.1, 4.7 2.0 1.3
Interest-bearing loans and borrowings 6.1, 6.3 227.3 376.9
Lease liabilities 6.1, 6.3 44.3 32.2
Other liabilities 5.2, 6.3 1.3 2.6
Total non-current liabilities 288.9 425.9
Interest-bearing loans and borrowings 6.1, 6.3 105.2 5.0
Lease liabilities 6.1, 6.3 22.5 24.0
Trade payables 5, 5.2, 6.3 99.9 111.9
Income tax payable 5 1.2 5.0
Other liabilities 5, 6.3 93.6 96.5
Provisions 4.1, 4.7 17.4 13.8
Total current liabilities 339.8 256.2
Total liabilities 628.7 682.1
Total equity and liabilities 763.5 840.1
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
NILFISK ANNUAL REPORT 2020 | 50
Financial statementsManagement review
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
Cash flow statement
for the years ended December 31
EUR million Note 2020 2019
Operating profit 22.1 25.9
Depreciation, amortization and impairment 2.5 68.5 69.1
Other non-cash adjustments 7.4 7.5 -5.2
Share option program - -1.9
Changes in working capital 15.4 16.1
Cash flow from operations before financial items and income taxes 113.5 104.0
Financial income received 0.9 0.7
Financial expenses paid -15.7 -14.0
Income tax paid -9.2 -14.6
Cash flow from operating activities 89.5 76.1
Purchase of property, plant and equipment 4.4 -5.4 -10.4
Sale/disposal of property, plant and equipment 0.8 1.2
Investments in intangible assets 4.3 -11.6 -33.0
Purchase of financial assets -1.3 -
Disposal of financial assets 0.2 0.1
Dividends received from associates 6.2 1.3 1.3
Cash flow from investing activities -16.0 -40.8
Changes in current interest-bearing receivables 1.5 -0.3
Changes in current interest-bearing loans and borrowings 100.3 -2.9
Changes in non-current interest-bearing loans and borrowings -153.5 -5.3
Payment of lease liabilities -26.4 -24.5
Cash flow from financing activities 6.1 -78.1 -33.0
Net cash flow for the year -4.6 2.3
Cash at bank and in hand, January 1 19.3 16.4
Exchange rate adjustments -1.6 0.6
Net cash flow for the year -4.6 2.3
Cash at bank and in hand, December 31 13.1 19.3
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
NILFISK ANNUAL REPORT 2020 | 51
Financial statementsManagement review
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
Statement of changes in equity
for the years ended December 31
2020 2019
EUR million Share capital
Foreign
exchange reserve Hedging reserve Retained earnings Total equity Share capital
Foreign
exchange reserve Hedging reserve Retained earnings Total equity
Equity, January 1 72.9 4.3 -0.4 81.2 158.0 72.9 -1.1 0.7 75.0 147.5
Other comprehensive income:
Exchange rate adjustments - -19.2 - - -19.2 - 5.4 - - 5.4
Value adjustment of hedging instruments:
Value adjustment for the year - - 0.2 - 0.2 - - -0.5 - -0.5
Transferred to cost of sales - - - - - - - -1.7 - -1.7
Transferred to staff costs - - - - - - - 0.9 - 0.9
Transferred to financial income and expenses - - -0.6 - -0.6 - - - - -
Transferred to inventory - - - - - - - -0.4 - -0.4
Actuarial gains (losses) on defined benefit plans - - - -1.5 -1.5 - - - -1.1 -1.1
Tax on actuarial gains (losses) on defined benefit plans - - - 0.4 0.4 - - - 0.1 0.1
Tax on value adjustment of hedging instruments - - -0.1 - -0.1 - - 0.6 - 0.6
Total other comprehensive income (loss) - -19.2 -0.5 -1.1 -20.8 - 5.4 -1.1 -1.0 3.3
Profit (loss) for the year - - - -2.6 -2.6 - - - 8.7 8.7
Comprehensive income (loss) for the year - -19.2 -0.5 -3.7 -23.4 - 5.4 -1.1 7.7 12.0
Share option program - - - 0.2 0.2 - - - -1.5 -1.5
Total changes in equity - -19.2 -0.5 -3.5 -23.2 - 5.4 -1.1 6.2 10.5
Equity, December 31 72.9 -14.9 -0.9 77.7 134.8 72.9 4.3 -0.4 81.2 158.0
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
NILFISK ANNUAL REPORT 2020 | 52
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Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
1.1 Basis for preparation
Nilfisk Holding A/S is a public limited company domiciled
in Denmark.
The consolidated financial statements included in this Annual
Report for the year 2020 are prepared in accordance with
International Financial Reporting Standards, IFRS, as adopted by
the EU and additional requirements under the Danish Financial
Statements Act. The parent financial statements are prepared
in accordance with the Danish Financial Statements Act.
Basis for preparation
The consolidated financial statements included in this Annual
Report are presented in EUR million rounded with one decimal.
The consolidated financial statements included in this Annual
Report are prepared according to the historical cost principle.
The only exceptions are derivatives and financial instruments in
a trading portfolio, which are measured at fair value.
Except for that stated under ‘Changes to accounting policies’,
the accounting policies described in the individual notes are
applied consistently during the financial year and for the
comparative figures.
Note 1
1. Basis for reporting
This section describes the applied reporting framework, including a definition of
materiality for disclosures as well as any changes in the accounting policies for
the consolidated financial statements.
EUR million
Previous
presentation
2020
Effect of
change in
presentation
New
presentation
2020
Previous
presentation
2019
Effect of
change in
presentation
New
presentation
2019
Gross profit* 347.9 -1.2 346.7 408.9 -1.6 407.3
Operating profit** 22.2 -0.1 22.1 29.6 -3.7 25.9
Profit before income taxes 7.5 - 7.5 15.6 - 15.6
Ratios
Gross margin 41.8% -0.2% 41.6% 42.3% -0.2% 42.1%
EBITDA margin 10.9% - 10.9% 10.2% -0.4% 9.8%
Operating profit margin 2.7% - 2.7% 3.1% -0.4% 2.7%
* Adjustment related to change in presentation of amortization/impairment of acquisition-related intangibles
** Adjustment related to change in presentation of share of profit from associates
Changes in presentation
Amortization/impairment of acquisition-related intangibles is
no longer presented in a separate line in the income statement,
but now included in cost of sales and sales and distribution
costs. Details are included in Note 2.5.
Gains/losses from foreign exchange rates is presented net
instead of gross in financial items in the income statement.
Share of profit from associates is presented in a separate line
under operating profit in the income statement. In 2019, share
of profit from associates were included in other operating
income. The shares in associates are not considered core
business, and Nilfisk is not in control of these investments. It
has therefore been decided to change the presentation.
Adjustments derived from the above changes to the income
statement are illustrated in the table below. Comparison
figures are restated.
As a consequence of a change in the internal reporting, the
reportable segments have been changed in 2020. See Note 2.1.
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 53
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Applying materiality
The provisions in IFRS contain extensive disclosure
requirements. The specific disclosures required according
to IFRS are stated in the consolidated financial statements
included in this Annual Report unless the disclosures concerned
are considered irrelevant or immaterial for financial decisions
made by the financial statement users.
The Group has operations in Argentina and is therefore subject
to Hyperinflation accounting (IAS 29). Based on an assessment
of materiality, IAS 29 has not been applied to our Argentinian
business as it is immaterial to the Nilfisk Group.
Going concern
The Executive Management Board is required to decide
whether the consolidated financial statements can be
presented on a ‘going concern’ basis. Based on estimated
future prospects, expectations of future cash flows, existence
of credit facilities, etc., the Executive Management Board is of
the opinion that there are no factors giving reason to doubt
whether Nilfisk Holding A/S can continue operating for at least
12 months from the balance sheet date.
Principles of consolidation
The consolidated financial statements incorporate the financial
statements of Nilfisk Holding A/S and entities controlled by
Nilfisk Holding A/S. Control exists when Nilfisk Group has
effective power over the entity and has the right to variable
returns from the entity.
Where necessary, adjustments have been made to the financial
statements of subsidiaries to bring their accounting policies
in line with Nilfisk Group policies. All intragroup transactions,
balances, income and expenses are eliminated in full when
consolidated.
Note 1
1.1 Basis for preparation – continued
Translation of foreign currencies
Functional and presentation currency
Items included in the financial statements of each of Nilfisk
Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (functional
currency). The consolidated financial statements are presented
in Euro (EUR). The functional currency of Nilfisk Holding A/S is
DKK. The presentation currency is EUR as the Nilfisk Group’s
main business activities are EUR denominated and the internal
reporting is presented in EUR.
Translation of transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the transaction
dates. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at
year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognized in the
income statement.
Translation of Nilfisk Group companies
Financial statements of foreign subsidiaries are translated
into EUR at the exchange rates prevailing at the end of
the reporting period for items in the statement of financial
position, and at average exchange rates for income statement
items.
All effects of exchange rate translations are recognized in
the income statement, with the exception of exchange rate
adjustments of investments in subsidiaries arising from:
• the translation of foreign subsidiaries’ net assets at the
beginning of the year to the exchange rates at the end
of the reporting period
• the translation of foreign subsidiaries’ statements of
comprehensive income from average exchange rates to
the exchange rates at the end of the reporting period
• the translation of non-current intragroup receivables
that are considered to be an addition to net investments
in subsidiaries
These specific exchange rate adjustments are recognized in
other comprehensive income.
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 54
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 1
1.2 Key accounting estimates and judgments
When preparing the consolidated financial statements, the use
of reasonable estimates and judgments is an essential part.
Given the uncertainties inherent in our business activities, the
Executive Management Board makes a number of accounting
estimates and judgments. The estimates and judgments are
based on assumptions which form the basis for recognition and
measurement of our assets, liabilities, cash flows and related
disclosures. Estimates and judgments are regularly reassessed.
Key accounting estimates are expectations of the future based
on assumptions, that to the extent possible are supported by
historical experience, customer demands, competitor actions
and other reasonable expectations. Estimates, by their nature,
are associated with uncertainty and unpredictability. The
actual amounts may differ from the amounts estimated as
more detailed information becomes available. The Executive
Management Board believe that the estimates are reasonable,
appropriate and the most likely outcome of future events
under the given circumstances.
Key accounting judgments are made when applying accounting
policies. Key accounting judgments are judgments made, that
can have a significant impact on recognition, classification and
disclosures of amounts in the financial statements.
Please refer to the specific notes for further information
on the key accounting estimates and judgments as well as
assumptions applied.
Particular risks referred to in the ‘Risk management’ section
of Management review and in Note 6.3 may have substantial
influence on the financial statements.
Note Key accounting estimates and judgments
Estimate/
judgment
Impact of accounting
estimates and
judgments
2.4 Special items Determine the classification of special items Judgment Medium
2.8 Tax Estimate the value of the deferred tax assets and recognition of income taxes Estimate High
4.2 Impairment test Estimate of the value-in-use for intangible, tangible and investment assets
based on assumptions used when impairment testing
Estimate High
4.5 Right-of-use assets Estimate of the lease period and discount rate when the underlying contract
can be prolonged or terminated early
Estimate Low
4.6 Pension liabilities Estimate the value of defined benefit plans based on actuarial assumptions Estimate Low
4.7 Provisions Estimate the value of provisions Estimate Low
5.1 Inventories Determine the allocation of production overhead costs Judgment Low
Inventories Estimate the value of expected write-down Estimate Low
5.3 Trade receivables Estimate the value of expected credit losses Estimate Low
6.2 Investment in associates Estimate the fair value of the contributed IP to Thoro LLC Estimate Medium
!
Key accounting estimates and judgments
COVID-19
Compared to what was disclosed in the Annual Report 2019,
the COVID-19 outbreak encountered during 2020 is considered
to impose significant uncertainty on the financial statements.
The financial impacts of COVID-19 requires significant
judgment and are included in the estimates of the activity of
the Group, the valuation of our asset base and the liquidity
situation.
As for any other significant uncertainties we will, given
the evolving nature of the pandemic and the uncertainties
involved, monitor the situation and implication on Nilfisk
Group’s financial position, activities and cash flows and seek
the appropriate mitigating measures. As of December 31,
2020, we have included updated estimates to assess
the recoverability of our asset base, including goodwill,
development projects, deferred tax assets and trade
receivables. We have realized no specific impairments of assets
and no additional obligations or liabilities have been recognized
as a direct result of COVID-19.
Depending on the escalation of COVID-19 in the future and
thereby the long-term impact for Nilfisk, there is an inherent
risk that the estimates and judgments made in 2020 could
change. Future changes in estimates and judgments may have
an impact on the Group’s result and financial position.
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 55
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 1
1.3 Implementation of new or changed accounting standards and interpretations
Changes to accounting policies
The Nilfisk Group has implemented the following new and
revised standards and interpretations issued by IASB effective
for 2020:
• Amendments to References to the Conceptual Framework
• Amendments to IFRS 3 – definition of business combinations
• Amendments to IAS 1 and IAS 8 – definition of materiality
• Amendments to IFRS 9, IAS 39 and IFRS 7 – IBOR reform
• Amendments to IFRS 16 – rent reduction (COVID-19)
The new and revised standards have not had a material impact
on accounting policies or disclosures for the period and are not
expected to have an impact on the Nilfisk Group.
New and amended IFRS standards and interpretations
not yet adopted by the EU
IASB have issued a number of new standards, amendments
and new interpretations which could be relevant to Nilfisk
Group, but which have not yet been adopted by the EU.
The new standards are not mandatory for the financial
reporting for 2020. Nilfisk Group expects to implement these
new standards, amendments and interpretations when they
take effect. It is expected that none of the new standards,
amendments and interpretations that are not yet in effect will
have a material impact on recognition and measurement.
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 56
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 2
2. Profit for the year
Key developments 2020
Revenue by operating segments is split between five segments;
EMEA, Americas, APAC, Consumer and Private Label and other.
Revenue decreased from 966.5 mEUR to 832.9 mEUR in 2020,
corresponding to a 13.8% decrease compated to 2019. This
was mainly due to negative organic growth from impact of
COVID-19 across all markets and customer segments in the
branded professional business during the year. The Consumer
business had a strong growth while Privale label declined.
Gross profit was 346.7 mEUR, down by 60.6 mEUR compared
to last year. Gross margin was 41.6%, down by 0.5 percentage
point compared to last year. The decrease was to a large extent
driven by lower productivity utilization due to lower activity.
Revenue by operating segment Gross profit by operating segment
This note relates to profit for the year, including revenue, segment information,
research and development costs, special items, amortization, depreciation and
impairment, financial items and income tax.
EMEA
Americas
APAC
Consumer
Private Label and other
48%
2020
30%
2019
47%
30%
8%
10%
9%
8%
5%
5%
EMEA
Americas
APAC
Consumer
Private Label and other
53%
2020
29%
2019
52%
30%
7%
9%
7%
6%
4%
3%
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 57
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 2
2. Profit for the year – continued
Accounting policy
§
Segment information
The segment information is based on internal management
reporting and is presented in accordance with the Nilfisk
Group’s accounting policies.
Segment income and expenses include those items that are
directly attributable to the individual segment and those
items that can be reliably allocated to it.
Operating segments
The reportable segments are generally referred to as
operating segments. The operating segments consist of
EMEA, Americas, APAC, Consumer and Private Label.
EMEA, Americas, and APAC cover sales of professional
products to markets globally, excluding sales in the carved
out segments Consumer and Private Label. Consumer covers
domestic vacuum cleaners and high pressure washers for
the consumer markets. Private Label covers high pressure
washers and vacuum cleaners in both the consumer and
professional business, sold in their own brands.
A further description of the operating segments is included
in the Management review.
The Executive Management Board assesses the revenue,
gross profit and EBITDA before special items of the operating
segments separately to enable decisions concerning
allocation of resources and measurement of performance.
Revenue in the operating segments
No single customer accounts for more than 10% of revenue.
The reportable segments are identified without aggregation
of operating segments.
Cost of sales in the operating segments
Cost of sales consists of costs incurred in generating the
revenue for the year. Costs of raw materials, consumables,
inbound freight, production staff and a proportion of
production overheads, including maintenance, amortization,
depreciation and impairment of intangible and tangible
assets used in production as well as operation, administration
and management of the production facilities are recognized
as cost of sales.
Cost of sales also include shrinkage, waste production and
any write-downs on inventory for obsolescence.
Sales and distribution costs
Sales and distribution costs include costs incurred for
distribution of goods and services sold and costs for
sales and distribution personnel, advertising costs, and
amortization, depreciation and impairment of intangible and
tangible assets used in the sales and distribution process.
Administrative costs
Administrative costs include costs of staff functions,
administrative personnel, office costs, rent, lease payments,
amortization, depreciation and impairment of intangible
and tangible assets not relating specifically to cost of sales,
research and development, and sales and distribution
activities.
Assets in the operating segments
As the production units deliver products to several
operational segments and as the operating segments in
some cases use the same assets, it is not possible to attribute
assets reliably to the individual segments.
Geographical information
The revenue is allocated to geographical regions according to
the country to which the products and services are sold.
The non-current assets are allocated to the country in which
the individual entity is based, and are comprised of the non-
current assets used in the operations of the geographical
segment, including intangible assets, property, plant and
equipment, investments in associates and other investments
and receivables.
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 58
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 2
2.1 Segment information
EUR million EMEA Americas APAC
Non-
allocated
Total
branded
professional Consumer
Private label
and other Group
2020
Revenue 396.6 247.6 65.8 - 710.0 76.0 46.9 832.9
Gross profit 183.1 100.5 25.5 - 309.1 25.6 12.0 346.7
EBITDA before special items 102.4 46.4 3.5 -52.5 99.8 7.3 -6.6 100.5
Reconciliation to profit before income taxes:
Special items -10.8
Amortization, depreciation and impairment -67.6
Share of profit from associates 0.1
Financial income 0.6
Financial expenses -15.3
Profit before income taxes 7.5
Gross margin 46.2% 40.6% 38.8% - 43.5% 33.7% 25.6% 41.6%
EBITDA margin before special items 25.8% 18.7% 5.3% - 14.1% 9.6% -14.1% 12.1%
2019
Revenue 453.0 291.3 93.5 - 837.8 75.8 52.9 966.5
Gross profit 215.3 122.8 35.9 - 374.0 22.6 10.7 407.3
EBITDA before special items 128.1 55.0 12.4 -58.2 137.3 -3.9 -15.7 117.7
Reconciliation to profit before income taxes:
Special items -23.9
Amortization, depreciation and impairment -67.9
Share of profit from associates 3.7
Financial income 1.2
Financial expenses -15.2
Profit before income taxes 15.6
Gross margin 47.5% 42.2% 38.4% - 44.6% 29.8% 20.2% 42.1%
EBITDA margin before special items 28.3% 18.9% 13.3% - 16.4% -5.1% -29.7% 12.2%
Nilfisk reportable segments are based on a geographical split of
our branded professional business.
Non-allocated within the branded business contains costs
allocated to the branded business which cannot be directly
attributed to the individual geographical segments. The costs
cover shared distribution centers, shared marketing, IT and
research and development.
The Consumer business is reported separately. The Private
label business area is reported under “Private Label and other”
including the remaining other business areas and corporate
costs that are not directly associated with any of the operating
segments.
As a consequence of a change in the internal reporting, the
reportable segments have been changed during 2020. MENA
(UAE) region is now included in APAC where prior reported
as part of EMEA. Comparative figures for 2019 have been
restated accordingly.
“Private label and other” includes non-allocated costs. The year
2020 includes income of 4.3 mEUR from government grants
related to COVID-19 support.
Please see Management review for further information on
revenue development in the reportable segments.
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 59
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Geographical information
Nilfisk is present in more than 40 countries with own sales
companies reaching approximately 100 countries through
direct sales and dealers.
The table below show a split of revenue based on the
geographical regions in which the customers are located.
Non-current assets are allocated based on the location of the
assets. The corporate headquarters located in Denmark is
included in the EMEA region.
2020 2019
EUR million Revenue
Non-current
assets
1
Revenue
Non-current
assets
1
EMEA region 511.9 290.9 567.0 311.1
Americas region 253.7 72.2 298.7 68.4
APAC region 67.3 36.2 100.8 37.6
Total 832.9 399.3 966.5 417.1
1
Non-current assets less deferred tax asset.
Revenue breakdown based on product line and
service offering
EUR million 2020 2019
Organic
growth
Floorcare 254.4 317.8 -18.1%
Vacuum cleaners 182.5 202.0 -7.9%
High pressure washers 124.5 145.2 -9.2%
Aftermarket 271.5 301.5 -8.2%
Total 832.9 966.5 -11.5%
, Revenue by country
The table below show a split of revenue based on the countries
in which the customers are located.
EUR million 2020 2019
USA 214.7 26% 246.4 25%
Germany 100.3 12% 113.3 12%
France 84.6 10% 100.1 10%
UK 42.5 5% 47.2 5%
Denmark 42.4 5% 39.9 4%
Sweden 28.4 3% 32.3 3%
Netherlands 23.6 3% 25.3 3%
Canada 22.9 3% 27.5 3%
Italy * 21.0 3% 22.6 2%
Spain 20.9 3% 24.1 2%
Other ** 231.6 27% 287.8 31%
Total 832.9 100% 966.5 100%
*Italy was not presented separately in the 2019 annual report.
**Australia is now included in “other”.
Comparison figures have been adjusted.
Note 2
2.2 Revenue
Revenue by geography
EMEA region Americas region
APAC region
62%
2020
30%
2019
59%
31%
8%
10%
Revenue by product line and service offering
Floorcare
Vacuum cleaners
High pressure washers
Aftermarket
2020
2019
30%
33%
22%
21%
15%
15%
33%
31%
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 60
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 2
2.2 Revenue – continued
Contract assets and liabilities
Generally, trade receivables are recognized at the same point
in time as revenue recognition and invoicing. Payment terms
vary within the different customer segments due to local and
specific agreements. In some cases the Group receives upfront
payments which results in contract liabilities. Nilfisk does not
have contract assets.
The Group splits upfront payments into either deferred revenue
or prepayments from customers depending on the nature of
the payment and activity.
EUR million 2020 2019
Prepayments from customers 2.8 2.1
Deferred revenue (non-current) 1.1 0.4
Deferred revenue (current) 5.9 4.7
Total contract liabilities 9.8 7.2
Prepayments from customers are primarily upfront payments
for machines and services that have not yet been delivered.
Deferred revenue covers unsatisfied performance obligations
that have not yet been recognized as revenue. These are
mostly services, but can also be goods which have not yet been
delivered or orders not yet fulfilled.
The Group has applied the practical expedient in paragraph
C5(d) of IFRS 15, and the amount of the transaction price
allocated to the remaining performance obligations and the
timing is not disclosed.
Revenue from sale of goods for resale, finished goods and
service is recognized in the income statement when transfer
of control of products or services to a customer has taken
place. Sales are recognized when control of the goods has
transferred, meaning when the goods are delivered to the
customer, and there is no unfulfilled obligation that could
affect the customer’s acceptance of the products.
Revenue from Aftermarket sales which include service
packages relating to products and contracts as well as
sale of parts, consumables and accessories is recognized
concurrently with the supply of those services. Depending
on the type of contract, service revenue is recognized over
time or at a point in time.
Some contracts include multiple deliverables, such as the
sale of machines and related installation services. However,
the installation is simple and does not include an integration
service and could be performed by another party. It is
therefore not accounted for as a separate performance
obligation.
Where the contracts include multiple performance
obligations, the transaction price is allocated to each
performance obligation based on the stand-alone selling
prices. Where these are not directly observable, they are
estimated based on expected cost plus margin.
Revenue is measured at the agreed consideration excluding
VAT and taxes charged on behalf of third parties. All
discounts granted are recognized in the revenue.
Please refer to note 4.7, “Provisions” regarding the
accounting policies for warranties.
§
Accounting policy
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 61
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 2
2.3 Research and development costs
The research and development cost decreased by 13.0 mEUR
compared to same period last year and total research and
development spend as a percentage of revenue decreased by
0.9 percentage point.
For further information see the research and development
comments in the Management review.
Research and development costs specification
EUR million 2020 2019
Staff costs 17.2 19.4
Other costs 5.9 16.7
Total research and development spend 23.1 36.1
Recognized as follows:
Expensed in the income statement 15.0 13.4
Capitalized 8.1 22.7
Total 23.1 36.1
R&D ratio (% of revenue) 2.8% 3.7%
Presented in the income statement:
Expensed in the income statement, cf. above 15.0 13.4
Amortization, depreciation and impairment 16.7 17.5
Research and development costs excluding
special items 31.7 30.9
Special items 1.3 3.2
Total 33.0 34.1
Development projects are recognized as intangible assets,
when the projects are clearly defined and identifiable for
which the technical feasibility, adequacy of resources and
a potential future market or internal utilization can be
demonstrated, and where it is intended to manufacture or
utilize the asset. This provides that the costs can be reliably
determined, and that there is also adequate certainty that
the future earnings or net selling prices can cover the
carrying amount as well as the development costs necessary
for finalizing the project.
Capitalized development projects are measured at costs less
accumulated amortization and impairment losses. The costs
include wages, amortization and other costs relating to the
Nilfisk Group’s development activities.
On completion of the development work, the cost of
development projects are amortized on a straight-line basis
over their estimated useful life from the date the asset is
available for use. The amortization period is 3-10 years. The
amortization base is reduced by any impairment losses.
§
Accounting policy
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 62
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 2
2.4 Special items
Identification and classification of income and expenses
as special items is based on management’s judgment
of the individual income and expenses as being non-
recurring by nature.
!
Key accounting judgments
Special items consist of non-recurring income and
expenses that the Nilfisk Group does not consider to be
a part of its ordinary operations such as restructuring
projects and gains and losses on divestments, including
impairment writedowns which are not presented as
discontinued operations.
§
Accounting policy
EUR million 2020 2019
Cost saving program 1.8 12.4
Business restructuring 8.6 11.1
Divestment 0.4 0.4
Total 10.8 23.9
Special items relating to the cost saving program includes
additional costs for the alignment of production sites and
warehouses, consultancy fees and transitioning costs relating to
offshoring of functions, pruning of products and redundancy costs.
Special items for the cost saving program recognized in 2020
mainly includes costs related to the move and start-up of the
new distribution center in Ghent (Belgium), and a one-off
transition cost related to the ongoing move of our back-office
functions to the shared service center. The year 2019 was
impacted by the exit from our production site in Suzhou
(China), as well as transition costs in line with 2020.
Special items related to business restructuring mainly consist
of redundancy and minor cost for write-downs and marked
EUR million 2020 Special items 2020 adjusted 2019 Special items 2019 adjusted
Revenue 832.9 - 832.9 966.5 - 966.5
Cost of sales -486.2 -3.2 -489.4 -559.2 -2.9 -562.1
Gross profit 346.7 -3.2 343.5 407.3 -2.9 404.4
Research and development costs -31.7 -1.3 -33.0 -30.9 -3.2 -34.1
Sales and distribution costs -220.8 -4.0 -224.8 -244.8 -11.3 -256.1
Administrative costs -64.6 -2.3 -66.9 -82.1 -6.3 -88.4
Other operating income 5.5 - 5.5 4.1 - 4.1
Other operating expenses -2.2 - -2.2 -3.8 -0.2 -4.0
Special items, net -10.8 10.8 - -23.9 23.9 -
Operating profit 22.1 - 22.1 25.9 - 25.9
exit costs. For 2020, this relates to the restructuring plan
announced on May 15, 2020 and consumer exit cost. For
2019, the cost was linked to the blueprint restructuring
initiated in 2018 focusing on a fundamental change within the
organizational setup, as well as consumer exit cost.
The divestments in 2020 and 2019 relate to divestments
initiated in 2018 - Nilfisk Outdoor business, Nilfisk South Africa,
the US carpet restoration business HydraMaster and the Nordic
Chemical & Utensils business.
Special items are disclosed separately in the income statement,
due to the extraordinary nature of the items. Special items have
been reconciled to the income statement line items as specified
in the table below.
No COVID-19 government support programs are included in
special items, as they relate to government support to cover
salary costs for employees still on payroll that are temporarily
sent home during the pandemic. See note 2.6.
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 63
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 2
2.5 Amortization, depreciation
and impairment
2.6 Other operating Income
This note shows the split of amortization, depreciation and
impairment for the Nilfisk Group in the income statement.
EUR million 2020 2019 2020 2019 2020 2019
Intangible
assets
Property, plant
and equipment Total
Amortization and
depreciation:
Cost of sales 1.2 1.5 18.6 18.6 19.8 20.1
Research and
development costs 13.2 14.7 0.7 0.4 13.9 15.1
Sales and
distribution costs 3.4 4.6 9.4 9.3 12.8 13.9
Administrative costs 7.2 4.9 11.1 10.5 18.3 15.4
Special items - - - 1.2 - 1.2
Total amortization
and depreciation 25.0 25.7 39.8 40.0 64.8 65.7
Impairment:
Cost of sales - - - 0.5 - 0.5
Research and
development costs 2.8 2.4 - - 2.8 2.4
Administrative costs - - - 0.5 - 0.5
Special items 0.7 - 0.2 - 0.9 0
Total impairment 3.5 2.4 0.2 1.0 3.7 3.4
Total amortization,
depreciation and
impairment 28.5 28.1 40.0 41.0 68.5 69.1
Amortization of acquisition-related intangibles was 4.3 mEUR
in 2020 (2019: 5.1 mEUR), hereof 1.2 mEUR included in cost
of sales (2019: 1.5 mEUR) and 3.1 mEUR included in sales and
distribution costs (2019: 3.6 mEUR).
Other operating income and expenses
Other operating income includes items of a secondary
nature relative to the operations of the enterprise,
including grant schemes, reimbursements and gains or
losses on sale of non-current assets.
Gains or losses on disposal of tangible or intangible
assets are determined as the selling price less the
carrying amount at the time of sale. Allowance for
expected credit losses is also included.
Government grants
Government grants are comprised of grants for
compensation for costs or losses already incurred and
recognized. Government grants are recognized when
there is reasonable assurance that the grants will be
received.
Government grants for compensation for costs or losses
incurred and recognized without resulting in further
future costs or losses are recognized in the income
statement as other operating income in the period
where the compensation is granted.
§
Accounting policy
Specification of financial items
Financial income Financial expenses
EUR million 2020 2019 2020 2019
Interest on financial assets
measured at amortized costs 0.5 1.2 12.8 9.1
Foreign exchange gains (losses) - - 0.5 2.4
Interest, lease liabilities - - 1.5 1.6
Other financial items 0.1 - 0.5 2.1
Total 0.6 1.2 15.3 15.2
Financial items, net represented -14.7 mEUR in 2020 compared
to -14.0 mEUR in 2019.
Financial income decreased by 0.6 mEUR, while financial
expenses were at the same level as 2019. Interest expenses
increased due to refinancing and increased funding cost,
partly offset by lower exchange rate losses and costs related to
phantom hedge compared to 2019.
Financial income includes interest, dividends, gains
on receivables and transactions denominated in
foreign currencies, amortization of financial assets etc.
Positive changes in the fair value of derivative financial
instruments not designated as hedging arrangements
are also included.
Financial expenses includes interest, losses on and
impairment of securities, payables and transactions
denominated in foreign currencies, amortization of
financial liabilities, including lease commitments etc.
Negative changes in the fair value of derivative financial
instruments not designated as hedging arrangements
are also included.
§
Accounting policy
2.7 Financial items
EUR million 2020 2019
Government grants 4.3 -
Other 1.2 4.1
Total 5.5 4.1
Government grants amounted to 4.3 mEUR in 2020. The
grants relate to COVID-19 government support programs
to cover salary costs for employees still on payroll that are
temporarily sent home during the pandemic. Other decreased
mainly due to reversal of an earn-out agreement in 2019.
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 64
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 2
2.8 Tax
The effective tax rate in 2020 of 134.7% was mainly impacted
by the valuation of the tax assets of 7.2 mEUR.
In 2019 the effective tax rate for the Group of 44.3% was
generally impacted by the corporate tax rate mix in countries
where Nilfisk is operating and doing business. The rate was
however also negatively impacted by non-deductible expenses
as well as revaluation of tax assets and prior year adjustments
made.
Tax recognized in the income statement
EUR million 2020 2019
Tax for the year is specified as follows:
Tax on profit for the year 10.1 6.9
Tax on other comprehensive income -0.3 -0.7
Total tax for the year 9.8 6.2
Tax on profit for the year is specified as
follows:
Current tax on profit for the year 6.4 11.5
Deferred tax 3.6 -5.5
Prior year adjustment, current and deferred tax 0.1 0.9
Total tax on profit for the year 10.1 6.9
Tax on other comprehensive income is
specified as follows:
Value adjustment of hedging instruments 0.1 -0.6
Actuarial gains (losses) on defined benefit plans -0.4 -0.1
Total tax on other comprehensive income -0.3 -0.7
Tax rate
EUR million 2020 2019
Reconciliation of the effective tax rate for the year:
Calculated tax on profit before income taxes 1.7 22.0% 3.4 22.0%
Adjustment of calculated tax in foreign subsidiaries relative to 22% 1.1 15.6% 1.0 6.7%
Tax effect of:
Non-deductible expenses/non taxable income 0.6 8.0% 0.5 3.2%
Tax assets valuation allowances 7.2 95.8% 1.3 8.4%
Change in tax rate 0.3 4.0% - -
Non recoverable withholding taxes 0.3 4.0% -0.2 -1.3%
Other taxes and adjustments -1.2 -16.0% - -
Prior year adjustment 0.1 1.3% 0.9 5.3%
Effective tax rate 10.1 134.7% 6.9 44.3%
The Group recognizes deferred tax assets, including the
expected value of tax losses carryforwards, based on an
assessment of the recoverability of the deferred tax assets.
The assessment of the recoverability of the deferred tax
assets involve estimate by the Executive Management
Board as to the likelihood of the realization of the deferred
tax assets within a foreseeable future. This depends on a
number of factors including whether there will be sufficient
taxable profits available in future periods, against which the
tax losses carryforwards can be utilized.
The Executive Management Board’s assessment of the
recoverability of the deferred tax assets is based on taxable
income projections which contain estimates of and tax
strategies for the future taxable income for the next 5 years
taking into account the general market conditions and the
Nilfisk Group’s future development outlook. The projections
are based on the Group’s budget and mid-term targets,
and are inherently subject to uncertainty, as the realization
of the projections are dependent on the outcome of future
events. In the event that actual future taxable profits
generated are less than expected, and depending on the tax
strategies that the Nilfisk Group may be able to implement,
impairment of the deferred tax assets may be required.
It is the Executive Management Board’s assessment that the
budgets and mid-term targets are achievable and supports
the recognized deferred tax assets.
Nilfisk operates in a large number of tax jurisdictions where
tax legislation is complex and subject to interpretation.
Management makes judgments on uncertain tax positions
to ensure recognition and measurement of tax assets and
liabilities.
Key accounting estimates
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 65
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 2
2.8 Tax – continued
Current tax payable and receivable is recognized in the
statement of financial position as tax computed on the
taxable income for the year, adjusted for tax on taxable
income for prior years and for prepaid tax.
Tax for the year is comprised of current and deferred tax on
profit for the year, including adjustments to previous years
and changes due to change in tax rates. Tax for the year is
recognized in the income statement, unless the tax expense
relates directly to items included in other comprehensive
income or equity.
Deferred tax is measured according to the balance sheet
liability method on all temporary differences between the
carrying amount and the tax base of assets and liabilities.
Deferred tax is, however, not recognized with respect to
temporary differences on initial recognition of goodwill
and other items, apart from business combinations, where
temporary differences have arisen at the time of acquisition
without affecting the profit for the year or the taxable
income.
In cases where the computation of the tax base may be
made according to different tax rules, deferred tax is
measured on the basis of management’s intended use
of the asset and settlement of the liability, respectively.
Deferred tax assets, including the tax base of tax losses
allowed for carry-forward, are recognized under Other
non-current assets at their expected utilization value, either
as set-off against tax on future income, or as a set-off
against deferred tax liabilities in the same legal tax entity
and jurisdiction.
Deferred tax assets and tax liabilities are offset if the
company has a legal right to offset current tax assets and
tax liabilities and intends to settle current tax assets and tax
liabilities on a net basis or to realize the assets and settle
the liabilities simultaneously.
Deferred tax is adjusted for elimination of unrealized
intragroup profits and losses.
Deferred tax is measured according to the tax rules and the
tax rates of the relevant countries at the reporting date and
when the deferred tax is expected to materialize as current
tax. The change in deferred tax as a result of changes in tax
rates is recognized in the income statement. Changes to
deferred tax on items recognized in other comprehensive
income are however recognized on other comprehensive
income.
§
Accounting policy
Deferred tax assets and liabilities
EUR million 2020 2019
Specification of deferred tax assets
and liabilities
Intangible assets -21.2 -18.1
Tangible assets 5.8 1.0
Current assets 5.8 5.0
Other non-current liabilities 7.3 3.5
Current liabilities 7.3 7.9
Tax base of tax loss carryforwards and credits 16.4 19.1
Valuation allowances -7.8 -0.3
Deferred tax assets/liabilities 13.6 18.1
Presentation of deferred tax:
Deferred tax assets 20.5 25.1
Deferred tax liabilities -6.9 -7.0
Deferred tax assets/liabilities 13.6 18.1
EUR million 2020 2019
Deferred tax assets, January 1 25.1 20.5
Deferred tax liabilities, January 1 -7.0 -9.4
Foreign exchange adjustment 0.2 -0.2
Tax recognized in other comprehensive
income 0.3 0.7
Deferred tax recognized in the income
statement -5.0 6.5
Deferred tax, December 31 13.6 18.1
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 66
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
This note relates to remuneration to the Board of Directors, Nilfisk Leadership
Team and employees, including long-term incentive programs.
Note 3
3. Remuneration
3.1 Staff costs
Staff costs specification
EUR million 2020 2019
Wages and salaries 217.6 249.7
Long-term incentive programs -0.2 0.6
Social security costs 25.8 26.7
Defined contribution plans 10.3 12.3
Defined benefit plans 0.5 1.1
Total 254.0 290.4
Number of full-time employees, average 4,460 5,158
Staff costs per full-time employee (EUR thousand) 57.0 56.3
Staff costs decreased by 13% and the average number of
employees decreased by 14%. The decrease in staff costs
and average number of employees in 2020 was materially
influenced by restructurings taking place during the year and
a general adaption of the business to the lower activity level
during 2020.
Staff costs is comprised of wages and salaries,
remuneration, expenses under long-term incentive
programs, pensions, etc.
§
Accounting policy
Remuneration to the Nilfisk Leadership Team
2020 2019
EUR thousand
Executive
Management Board
Nilfisk
Leadership Team Total
Executive
Management Board
Nilfisk
Leadership Team Total
Salary and pension 1,925.7 3,212.0 5,137.7 1,746.1 4,203.2 5,949.3
Annual bonus 461.5 284.5 746.0 105.1 75.0 180.1
Long-term incentive -62.3 14.4 -47.9 243.9 106.8 350.7
Other benefits 42.6 163.4 206.0 22.2 288.4 310.6
Total 2,367.5 3,674.3 6,041.8 2,117.3 4,673.4 6,790.7
3.2 Remuneration to the Board of Directors
and the Nilfisk Leadership Team
In 2020 the Board of Directors received a total remuneration
of 0.6 mEUR (2019: 0.6 mEUR). The remuneration to the
Executive Management Board and the Nilfisk Leadership Team
has decreased from 6.8 mEUR in 2019 to 6.0 mEUR in 2020.
Remuneration policy
Nilfisk’s remuneration policy contains guidelines for setting and
approving the remuneration for the Board of Directors and the
salaries for the Nilfisk Leadership Team. The Board of Directors
receive a fixed remuneration, while members of the Nilfisk
Leadership Team receive a fixed salary, a short-term cash-based
incentive and a long-term share-based incentive. This structure
ensures commonality of interest between Management and
shareholders of Nilfisk and maintains Management’s motivation
to achieve both short- and long-term strategic goals.
Composition of remuneration
The Executive Management Board’s remuneration consists of a
fixed salary base, including pension and other customary non-
monetary benefits such as a company car. The remuneration
further includes a short-term cash-based bonus program and a
long-term incentive program (see Note 3.3).
Remuneration to the Board of Directors
EUR thousand 2020 2019
Board of Directors 526.9 514.6
Audit Committee 33.0 40.6
Remuneration Committee 20.1 20.4
Nomination Committee 13.9 13.4
Total remuneration to the Board of Directors 593.9 589.0
The remuneration covers 11 Board of directors in 2020 where
of one of the members is not collecting any fees.
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 67
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 3
3.3 Long-term incentive programs
Phantom share program
In the period 2014 to 2016 a phantom share program granted
a number of employees the right to a potential cash payment
but no rights to acquire shares. The phantom share program
was an alternative approach to be part of the short-term bonus
program. For the purpose of calculating the bonus under the
phantom share program, the participants are treated as if they
earn phantom shares on a monthly basis in Nilfisk Holding A/S
up to the relevant maximum number of phantom shares during
the period beginning at April 1 in the year the phantom shares
are granted and the subsequent four years (the vesting period).
The participants are only entitled to the maximum number of
phantom shares if they remain employed during the vesting
period. Upon termination of the employment prior to the
expiry of the vesting period, the number of phantom shares
earned shall be calculated pro rata corresponding to the
relevant part of the vesting period in which the participant
was employed. The phantom shares can be exercised by the
participants in May following the four year vesting period or
the subsequent two years in May, meaning for example that
the phantom shares granted in 2016 can be exercised in May
2020, 2021 or 2022.
Phantom shares
Number of phantom shares
Avg. exercise price per
phantom share (DKK)
Avg. exercise price per
phantom share (EUR)
2020 2019 2020 2019 2020 2019
Outstanding, January 1 108,958 227,300 97 104 13 14
Forfeited during the period - -566 - 97 - 13
Exercised during the period -56,062 -117,776 127 134 17 18
Outstanding, December 31 52,896 108,958 89 97 12 13
Weighted average share price at the exercise date during the period 89 283 12 38
Number of phantom shares fully vested at the balance sheet date 52,896 103,097
Weighted average remaining contractual life (months) 0 3
The value of the phantom shares are based on the market
value of the Nilfisk Holding A/S shares traded on Nasdaq.
When participants exercise phantom shares the value of the
phantom shares are based on the average share price for the
month prior to the exercise. In 2020, 56,062 phantom shares
were exercised, which leaves the total number of outstanding
phantom shares at December 31, 2020 at 52,896.
Nilfisk has entered into hedge contracts to match the exposure
on the long-term incentive programs. Accordingly, the ongoing
value adjustments related to the outstanding phantom share
program will be offset by a similar hedge (see Note 6.3). The
development in outstanding phantom shares in 2020 and 2019
is reflected below.
The Black & Scholes model has been applied for calculation of
the fair value of the phantom shares. The expected volatility
is based on the historical share price volatility for the Nilfisk
Holding share from the date of listing. It is expected that the
phantom shares on average will be exercised between the
vesting date and the expiry date.
The expense for all long-term incentive programs is calculated
under the provision for share-based payments in accordance
with IFRS 2.
The performance share program is recognized under equity
whereas the phantom share program is recognized under other
liabilities with the amount of 0.3 mEUR compared to 0.7 mEUR
at the end of 2019.
Recognition of share-based payments in the income statement
is a net income in 2020. The cost for the 2020 program was
0.4 mEUR being offset by a net income of 0.6 mEUR for
the 2018 and 2019 program due to a reversal of the 2018
program.
Recognition of share-based payments
EUR million 2020 2019
Performance share program -0.2 0.6
Total -0.2 0.6
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 68
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 3
3.3 Long-term incentive programs – continued
The Nilfisk Group’s long-term incentive programs
include a performance share program and a phantom
share program for Nilfisk Leadership Team and selected
key employees.
The performance share program is accounted for as
an equity-settled share-based payment to employees
and measured at the fair value of the option. The Total
Shareholder Return (TSR vesting condition) is measured
at grant date, whereas estimated EBITDA and RoCE
(vesting conditions) will be updated based on the plans
approved by the board.
The fair value is expensed on a straight-line basis over
a period of three years. At the end of the period the
participants will be awarded shares corresponding to
the achieved targets.
The phantom share program is accounted for as
cash-settled share-based payments. An expense and
a liability is recognized for the service acquired on
a straight-line basis over the vesting period for the
individual portion of the program that vests in the
specific month, measured initially at the fair value of the
liability. At the end of each reporting period until the
liability is settled, and at the date of settlement, the fair
value of the liability is re-measured with any changes in
fair value recognized in the income statement for the year.
Please see Note 6.3 for hedge accounting policy.
§
Accounting policy
Performance share program
In line with the remuneration policy approved by the Annual
General Meeting in June 2020, the Nilfisk Leadership Team
and selected key employees have been awarded performance
shares with a three year cliff vesting depending on
performance measures on EBITDA, RoCE and Total Shareholder
Return (TSR).
In 2020, 29 employees were offered participation in the 2020
program with a total of 144,103 performance shares equal to
0.5% of the total number of shares in Nilfisk Holding A/S. The
selected key employees outside the Nilfisk Leadership Team
have been offered the opportunity to participate in return for a
reduction in their annual bonus. Nilfisk has expensed 0.4 mEUR
relating to the 2020 long-term incentive program. The number
of outsanding shares were 142,030 at December 31, 2020.
Based on the performance in the vesting period, the awarded
performance shares in 2018 have been fully reversed in
2020 as the performance conditions were not met. For the
performance share program awarded in 2019 the number of
outstanding shares were 49,684 at December 31, 2020. Nilfisk
has recorded an income of 0.6 mEUR in 2020 related to the
awarded performance shares in 2018 and 2019.
Upon exercise of the performance shares awarded, Nilfisk
Holding A/S is entitled to settle in cash. As Nilfisk Holding A/S
does not currently have an intention to settle the shares in cash
upon exercise the program is accounted for as an equity-settled
program. To determine the total value of the performance
share program the performance measures have been divided
into two separate categories:
1. EBITDA is defined as a non-market condition and is based
on the companies expectations for future financial results.
2. TSR is defined as a market condition which is based on a
Monte Carlo simulation in order to determine the expected
increase in share price over the period. Since the TSR is defined
as a market condition the valuation is fixed at grant date.
For the 2019 program, RoCE is an additional performance
measure to the above. RoCE is also considered a non-market
condition based on the companies expectations for future
financial results.
Performance shares
Number of performance shares
Avg. exercise price per
performance share (DKK)
Avg. exercise price per
performance share (EUR)
2020 2019 2020 2019 2020 2019
Outstanding, January 1 100,043 53,245 291 305 39 41
Granted during the period 144,103 64,977 134 276 18 37
Forfeited during the period -52,432 -18,179 - - - -
Outstanding, December 31 191,714 100,043 171 291 23 39
Weighted average remaining contractual life (months) 21 19
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 69
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 4
4. Capital employed and other balance sheet accounts
Key developments in 2020
Property, plant and equipment and intangible assets by
country excluding goodwill
EUR million 2020 2019
Denmark 95.6 47% 109.2 49%
USA 25.2 13% 31.5 14%
China 17.1 9% 18.2 8%
Hungary 16.9 8% 15.4 7%
Germany 9.4 5% 11.0 5%
UK 5.6 3% 7.9 4%
Italy 3.7 2% 4.5 2%
Mexico* 3.5 2% 1.8 1%
Spain 2.6 1% 3.1 1%
Other 20.1 10% 21.7 9%
Total 199.7 100% 224.3 100%
*Mexico was part of “other” in 2019. Comparison figures are adjusted.
This note covers Nilfisk Group’s investments in non-current assets that form the basis
for the Group’s operations, and non-current liabilities arising as a result thereof.
The non-current liabilities in this section are regarded as
non-interest-bearing and are comprised of employee pension
benefits and provisions. Interest-bearing receivables and
liabilities are covered in Note 6.
The Nilfisk Group mainly invests in production equipment to
ensure satisfactory delivery flow to customers. Investments in
intangible assets are driven by development projects focusing
on renewing and optimizing the product portfolio and on
software in relation to front-end applications and ERP systems.
Production sites in Nilfisk are mostly assembly lines and they
are therefore not capital-intensive in terms of fixed assets.
4.1 Capital employed
EUR million 2020 2019
Non-current assets 419.8 442.2
Provisions, pension and deferred tax liabilities -33.4 -28.0
Working capital 131.6 157.9
Capital employed 518.0 572.1
Capital employed decreased by 54.1 mEUR compared to 2019.
The development in capital employed was largely driven by a
decrease in non-current assets and working capital.
In 2020, Nilfisk’s return on capital employed (RoCE)
deteriorated by 2.6 percentage points to 5.9% from 8.5%
in 2019. The decrease was mainly driven by a decrease in
operating profit before special items.
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 70
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 4
4.2 Impairment test
Impairment test on goodwill allocated to cash-
generating units as of December 31, 2020
Impairment tests are performed for each cash-generating
unit based on budget for 2021 and forecasts for 2022-2026.
The impairment tests performed for the cash-generating
units show a comfortable headroom as of December 31,
2020 and no indication of impairment exists in any of the
cash-generating units.
Assumptions applied in the impairment test
The future cash flows are based on budgets and Management’s
estimates of the Nilfisk Group’s development in the next five
years. The assumptions for the impairment tests are:
Revenue growth:
Projections in the forecasting period for the individual CGUs
are estimated on the basis of expected market development
including strategic initiatives, autonomous machines and
the macroeconomic environment in general. Past experience
is taken into consideration as well as the expected impact
from the growth initiatives in Nilfisk Next and the COVID-19
pandemic situation worldwide.
Gross margin development:
When estimating the CGUs margin development in
the forecasting period, past experience and the impact
from expected efficiency improvements are taken into
consideration. The expected impact of initiatives such as
the cost saving program and other initiatives from Nilfisk
Next are taken into consideration for the relevant CGUs.
Furthermore, the COVID-19 pandemic situation worldwide is
taken into consideration.
Net working capital:
The development is linked to the current level, budgets and
revenue growth.
Terminal growth:
The terminal growth rate does not exceed the expected
long-term average growth rate including inflation for the
segments and countries in which we operate. The applied
terminal growth rate for all cash generating units was 2.0%
unchanged compared to 2019.
Capital expenditure:
The development is linked to the budgets and expected
future activity level, including only reinvestments.
Discount rate:
A pre-tax discount rate of 11.1% and a post-tax discount
rate of 8.4%, compared to 8.8% and 6.9% respectively in
2019 has been applied in the performed impairment tests.
The discount rate has been applied to all cash generating
units, assuming our targeted ratio between the market value
of our debt and equity value.
Development projects
Development projects/products completed and development
projects/products in progress includes capitalized
development costs for projects that support the Nilfisk Next
strategy to become a global leading cleaning provider with
focus on digitalization and development of new products
within autonomous cleaning.
The value of the development projects is dependent on
a number of factors, including the timely and successful
completion of in-progress development projects as well as
the Group’s ability to successfully commercialize completed
development projects/products.
Since the products are under development or in the early
stages of the product life cycle, any assessment of market
potential, product performance and viability, customer
demand, potential impact from technological innovations
and competitor actions, marketing and services cost, the
ability to scale production and reduce productions costs
etc. is inherently subject to uncertainty. These uncertainties
are assessed though out the maturity of the projects and as
such, the risk is reduced the closer the projects gets to the
completion stage. Where possible, the estimates are based
on past experience, but also dependent on the outcome of
future events, which will be highly project-dependent.
It is Management’s assessment that a significant market
potential exists, and that the value-in-use of development
projects completed and development projects in progress
exceed the carrying amounts, under the assumptions
mentioned above.
Key accounting estimates
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 71
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 4
4.2 Impairment test – continued
Goodwill and intangible assets with indefinite useful lives
are tested annually for impairment. Development and
software projects in progress are also tested annually for
impairment.
The carrying amount of goodwill is tested for impairment
together with the other non-current assets in the
cash-generating unit to which goodwill is allocated and
written down to the recoverable amount over the income
statement if the carrying amount is higher. The recoverable
amount is generally computed as the present value of the
expected future net cash flows (value in use) from the
business or activity (cash-generating unit) to which goodwill
is allocated.
Other non-current assets
The carrying amount of other non-current assets is
reviewed annually for indication of impairment. If such an
indication exists, the recoverable amount of the asset is
determined. The recoverable amount is the fair value of the
asset less anticipated costs of disposal, or its value in use,
whichever is the higher. The value in use is calculated as the
present value of expected future cash flows from the asset
or the cash-generating unit of which the asset is part.
Impairment loss
Impairment is recognized if the carrying amount of an
asset or a cash-generating unit exceeds the respective
recoverable amount thereof. The impairment is recognized
in the income statement under the functions it relates to.
Gain or loss of divestment of businesses is recognized as
special items.
Impairment of goodwill is not reversed. Impairment of
other assets is reversed in the event of changes having
taken place in the conditions and estimates on which the
impairment calculation was based. Impairment is only
reversed if the new carrying amount of the asset does not
exceed the carrying amount that would have applied after
amortization if the asset had not been impaired.
§
Accounting policy
Sensitivity analysis
The Group has conducted an analysis of the sensitivity of
the impairment test to changes in the key assumptions
used to determine the recoverable amount for each of
the segments (CGUs) to which goodwill is allocated.
Management believes that any reasonably possible change
in the key assumptions on which the recoverable amount is
based would not cause the carrying amount to exceed the
recoverable amount of the related segments (CGUs).
±
Sensitivity
Allocation of goodwill on cash-generating units
Goodwill is allocated to the reportable segments.
The calculation of EBITDA for each cash-generating unit
is based on certain judgment relating to allocation of
future EBITDA which is allocated to the cash-generating
units.
The carrying amount of goodwill per cash-generating
unit as of December 31, 2020, is as follows:
EUR million 2020 2019
EMEA 119.5 121.4
Americas 31.7 32.1
APAC 13.7 13.9
Consumer 1.1 1.1
Total 166.0 168.5
The change in the goodwill balances from January 1,
2020 to December 31, 2020 relates to exchange rate
adjustments during the year.
!
Key accounting judgments
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 72
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 4
4.3 Intangible assets
2020 2019
EUR million Goodwill
Trade-
marks
1
Customer
related
assets
Development
projects
completed
Software,
Know-how,
Patents and
Competition
Clauses
Development
projects and
software in
progress Total Goodwill
Trade-
marks
1
Customer
related
assets
Development
projects
completed
Software,
Know-how,
Patents and
Competition
Clauses
Development
projects and
software in
progress Total
Costs, January 1 168.5 24.3 31.2 152.0 86.7 35.9 498.6 167.8 23.8 30.5 125.2 76.2 40.5 464.0
Exchange rate adjustments -2.5 -1.1 -1.8 0.5 -1.5 0.1 -6.3 0.7 0.5 0.7 0.9 0.6 - 3.4
Additions - - - 0.8 3.2 7.6 11.6 - - - 5.0 5.3 22.7 33.0
Disposals - -0.2 -0.2 -14.3 -4.2 -2.9 -21.8 - - - -0.5 -0.8 -0.5 -1.8
Transferred between classes of assets - - - 7.5 10.0 -17.5 - - - - 21.4 5.4 -26.8 -
Costs, December 31 166.0 23.0 29.2 146.5 94.2 23.2 482.1 168.5 24.3 31.2 152.0 86.7 35.9 498.6
Amortization and impairment,
January 1 - -14.7 -22.7 -112.9 -59.3 -1.9 -211.5 - -13.2 -20.4 -97.9 -51.6 0.1 -183.0
Exchange rate adjustments - 0.4 1.1 -0.2 1.4 0.1 2.8 - -0.2 -0.3 -0.8 -0.6 -0.1 -2.0
Amortization for the year - -1.1 -1.6 -13.3 -9.0 - -25.0 - -1.3 -2.0 -14.6 -7.8 - -25.7
Impairment - - - -0.7 - -2.8 -3.5 - - - - - -2.4 -2.4
Disposals - 0.2 0.1 5.4 3.3 2.8 11.8 - - - 0.4 0.7 0.5 1.6
Amortization and impairment,
December 31 - -15.2 -23.1 -121.7 -63.6 -1.8 -225.4 - -14.7 -22.7 -112.9 -59.3 -1.9 -211.5
Carrying amount, December 31 166.0 7.8 6.1 24.8 30.6 21.4 256.7 168.5 9.6 8.5 39.1 27.4 34.0 287.1
Investment ratio (% of amortizations) - - - 62% 147% - 116% - - - 181% 137% - 233%
1
Out of the total costs for trademarks, 2.7 mEUR (2019: 2.7 mEUR) are not amortized, as they are regarded as having an indefinite useful life.
Impairment losses
In 2020 impairment losses of 2.8 mEUR were included in
research and development costs and 0.7 mEUR included
in special items. The impairment losses were a result of
simplification and harmonization of the business setup.
Impairment losses of 2.4 mEUR included in research and
development costs in 2019 were a result of a continued
simplification of the product portfolio.
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 73
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 4
4.3 Intangible assets – continued
Accounting policy
§
Goodwill
Goodwill is initially recognized in the statement of financial
position at cost. Subsequently, goodwill is measured at
cost less accumulated impairment losses. Goodwill is not
amortized.
The carrying amount of goodwill is allocated to the Nilfisk
Group’s cash-generating units at the acquisition date. The
identification of cash-generating units is based on the
managerial structure and internal financial control. As
a result of the integration of acquisitions in the existing
Nilfisk Group, and identification of operating segments
based on the presence of segment managers, the Executive
Management Board has assessed that the smallest
cash-generating units to which the carrying amount of
goodwill can be allocated during testing for impairment
are the reportable segments. The reportable segments are
comprised of the Nilfisk Group’s operating segments without
aggregation (Note 2.1 Segment information).
Other intangible assets
Other intangible assets are clearly identifiable development
projects for which the technical feasibility, adequacy of
resources and a potential market or internal utilization can be
demonstrated, provided the costs can be reliably determined
and it is probable it will generate future earnings.
Capitalized development projects are measured at costs less
accumulated amortization and impairment losses. The costs
include wages, amortization and other direct costs relating
to the individual development projects.
Intangible assets are amortized on a straight-line basis over
the expected useful life which is:
Trademarks, etc. Indefinite or 3-20 years
Customer related assets 3-15 years
Development projects 3-10 years
Software, know-how, patents
and competition clauses 2-15 years
On completion of the development work, development
projects are amortized on a straight-line basis over their
estimated useful life from the date the asset is available
for use. The amortization period is 3-10 years. The basis of
amortization is reduced by impairment losses.
Patents and licenses are measured at costs less accumulated
amortization and impairment losses. Patents and licenses are
amortized on a straight-line basis over the remaining patent
or contract period or the useful life, whichever is the shorter.
Intangible assets with an indefinite useful life are not
amortized but are tested annually for impairment.
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 74
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 4
4.4 Property, plant and equipment
2020 2019
EUR million
Land and
buildings
Plant and
machinery
Tools and
equipment
Assets under
construction
incl. prepayment Total
Land and
buildings
Plant and
machinery
Tools and
equipment
Assets under
construction
incl. prepayment Total
Costs, January 1 19.7 16.1 135.4 3.7 174.9 20.7 16.7 145.2 2.8 185.4
Exchange rate adjustments -0.4 -0.7 -4.3 -0.1 -5.5 0.1 0.5 2.1 - 2.7
Additions 0.1 0.1 5.7 3.5 9.4 - 0.2 9.3 5.7 15.2
Disposals - -1.8 -6.6 -0.5 -8.9 -1.1 -1.7 -24.8 -0.8 -28.4
Transferred between classes of assets - 0.5 3.0 -3.5 - - 0.4 3.6 -4.0 -
Costs, December 31 19.4 14.2 133.2 3.1 169.9 19.7 16.1 135.4 3.7 174.9
Depreciation and impairment, January 1 -11.2 -12.1 -100.4 - -123.7 -10.6 -11.6 -108.5 - -130.7
Exchange rate adjustments 0.2 0.6 3.0 - 3.8 - -0.5 -1.7 - -2.2
Depreciation for the year -0.5 -0.9 -11.8 - -13.2 -0.6 -1.1 -12.3 - -14.0
Impairment - -0.2 - - -0.2 - -0.3 -0.2 -0.5 -1.0
Disposals - 1.8 5.4 - 7.2 - 1.4 22.3 0.5 24.2
Depreciation and impairment,
December 31 -11.5 -10.8 -103.8 - -126.1 -11.2 -12.1 -100.4 - -123.7
Carrying amount, December 31 7.9 3.4 29.4 3.1 43.8 8.5 4.0 35.0 3.7 51.2
Investment ratio (% of depreciation) 20% 67% 74% - 97% - 55% 105% - 137%
Impairment losses
In 2020, impairment losses of 0.2 mEUR were included
in special items. The impairment loss was related to the
closedown of the warehouse in Denmark.
In 2019, impairment losses of 0.5 mEUR were included in
administrative costs and 0.5 mEUR were included in cost of
sales. The impairment losses were mainly related to the close-
down of production in APAC (initiated in 2018).
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 75
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 4
4.4 Property, plant and equipment – continued
Accounting policy
§
Land and buildings, lant and machinery, tools and
equipment, and other property, plant and equipment,
are measured at costs less accumulated depreciation and
impairment losses.
The costs are comprised of the purchase price and any costs
directly attributable to the acquisition until the asset is ready
for use. The costs of self-constructed assets are comprised
of costs of materials, components, subcontractors and
wages. The costs are supplemented by the present value of
estimated liabilities related to dismantling and removing the
asset and restoring the site on which the asset was utilized.
Subsequent costs, e.g. relating to replacement of parts of
an item of property, plant and equipment, are recognized in
the carrying amount of the asset if it is likely that the costs
will result in future economic benefits for the Nilfisk Group.
The carrying amount of the replaced parts is derecognized
in the statement of financial position and recognized in the
income statement. All other costs relating to ordinary repair
and maintenance are recognized in the income statement
as incurred.
If individual parts of an item of property, plant and
equipment have different useful lives, they are depreciated
separately.
Property, plant and equipment are depreciated on a
straight-line basis over the expected useful lives of the
assets/components, as follows:
Buildings 8-50 years
Plant and machinery 3-20 years
Tools and equipment 3-15 years
Land is not depreciated
The basis of depreciation is calculated according to the
residual value less impairment losses. The residual value
is determined at the acquisition date and reviewed
annually. If the residual value exceeds the carrying amount,
depreciation is discontinued.
When changing the depreciation period or the residual
value, the effect on the depreciation is recognized
prospectively as a change in accounting estimates.
Property, plant and equipment under construction and
prepayments are measured at cost. When ready for use,
the asset is transferred to the relevant category and
depreciated.
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 76
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 4
4.5 Right-of-use assets
2020 2019
EUR million
Land and
buildings
Plant and
machinery
Tools and
equipment Total
Land and
buildings
Plant and
machinery
Tools and
equipment Total
Costs, January 1 49.7 2.9 27.0 79.6 - - - -
Exchange rate adjustments -1.8 - -0.9 -2.7 - - - -
Lease contracts entered into prior to 2019 - - - - 49.1 2.8 19.9 71.8
Additions 30.1 1.1 7.6 38.8 0.8 0.1 8.3 9.2
Disposals -1.3 -0.5 -3.5 -5.3 -0.2 - -1.2 -1.4
Costs, December 31 76.7 3.5 30.2 110.4 49.7 2.9 27.0 79.6
Depreciation and impairment, January 1 -14.7 -1.0 -9.4 -25.1 - - - -
Exchange rate adjustments 0.5 - 1.3 1.8 - - - -
Depreciation for the year -15.4 -1.2 -10.0 -26.6 -14.7 -1.0 -10.3 -26.0
Disposals 0.9 0.3 3.5 4.7 - - 0.9 0.9
Depreciation and impairment, December 31 -28.7 -1.9 -14.6 -45.2 -14.7 -1.0 -9.4 -25.1
Carrying amount, December 31 48.0 1.6 15.6 65.2 35.0 1.9 17.6 54.5
See note 6.1 for development of the lease liabilities.
See note 6.3 for maturity analysis of the lease liabilities.
Not recognized right-of-use assets and liabilities
at December 31, 2020
The Group has signed lease contracts in which the assets were
not available for use by the Group at year-end. The value of
these right-of-use assets and corresponding liabilities are not
included in the statement of financial position, but will be
included when the assets are available for use by the Group.
Total minimum payments for signed but not recognized
contracts are 2.2 mEUR (2019: 2.8 mEUR).
Operational costs of lease contracts
Short-term and low value lease contracts are expensed directly
as operational costs. For 2020, the operational costs were
1.5 mEUR (2019: 1.1 mEUR).
The expected operational costs relating to short-term and low
value lease contracts is 1.5 mEUR for 2021.
Payments relating to lease arrangements
Total cash-out for right-of-use assets recognized in the
statement of financial position in the year was 27.9 mEUR
(2019: 26.1 mEUR). The amount is made up from repayment of
lease liabilities of 26.4 mEUR (2019: 24.5 mEUR) and interest of
1.5 mEUR (2019: 1.6 mEUR).
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 77
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Leases are recognized as right-of-use assets with the
corresponding liability at the time the asset is available for
use by the Group. Assets and liabilities arising from a lease
are measured on a present value basis.
Lease liabilities are comprised of expected fixed payments
throughout the expected lease period (including options to
extend the lease when exercise is reasonably certain), less
any lease incentives. The lease payments are discounted
using the contract’s internal discount rate or the Group’s
incremental borrowing rate.
The costs of right-of-use assets is comprised of the
calculated lease liabilities, payments made prior to entering
the lease, initial direct costs, and expected restoration costs.
Right-of-use assets and lease liabilities are re-measured
when a factual or contractual change is executed or if a
significant event or change affects the expected use of the
assets. The impact is discounted to a present value basis.
Right-of-use assets are measured at cost, less accumulated
depreciation and impairment losses. When changing the
value of right-of-use assets through remeasurement or
when changing the depreciation period, the effect on the
depreciation is recognized prospectively as a change in
accounting estimates.
Right-of-use assets are depreciated on a straight-line basis
of the expected length of the contract or the expected
useful lives of the assets, whichever is the shorter.
Lease costs for low value assets and short-term leases are
included as operational costs throughout the period based
on a straight-line basis.
§
Accounting policy
Note 4
4.5 Right-of-use assets – Continued
The individual right-of-use assets and the corresponding
liabilities are highly impacted by the estimated lease
period and the discount rate, where the underlying
contracts can be prolonged or terminated early. As of
December 31, 2020 the estimated useful life can be
summarized as follows:
Leased buildings: 1-9 years, with a remaining
average of 2.4 years
(2019: 1-10 years with average
of 3.1 years)
Other leases: 1-6 years with a remaining
average of 1.7 years.
(2019: 1-6 years with average of
2.5 years)
Average discount rate for active contracts as of
December 31, 2020 was 2.2% (2019: 2.5%).
Key accounting estimates
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 78
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 4
4.6 Pension liabilities
Net liabilities recognized in the statement of financial position
2020 2019
EUR million
Present value
of obligations
Fair value of
plan assets
Net
obligation
Present value
of obligations
Fair value of
plan assets
Net
obligation
Obligations and assets, January 1 30.8 24.9 5.9 26.3 21.8 4.5
Recognized under staff costs in the income statement:
Current service cost 0.5 - 0.5 0.3 0.3
Calculated interest expenses/income 0.4 0.4 - 0.6 0.5 0.1
Curtailment and settlements, etc. - - - 0.7 - 0.7
Total 0.9 0.4 0.5 1.6 0.5 1.1
Recognized in other comprehensive income:
Actuarial gains (losses) from changes in
demographic assumptions 0.1 - 0.1 -0.6 - -0.6
Actuarial gains (losses) from changes in financial
assumptions and other 2.1 0.7 1.4 3.5 1.8 1.7
Total 2.2 0.7 1.5 2.9 1.8 1.1
Other changes:
Contributions to plans 0.2 0.8 -0.6 0.1 0.9 -0.8
Benefits paid -1.3 -1.2 -0.1 -1.4 -1.2 -0.2
Exchange rate adjustments -1.3 -1.0 -0.3 1.1 1.1 -
Total -2.4 -1.4 -1.0 -0.2 0.8 -1.0
Net recognized plan obligations and assets,
December 31 31.5 24.6 6.9 30.6 24.9 5.7
Other long-term employee benefits 0.2 - 0.2 0.2 - 0.2
Recognized, December 31 31.7 24.6 7.1 30.8 24.9 5.9
EUR million 2020 2019
Plan assets recognized as follows:
Securities with quoted market price 19.3 19.5
Cash 0.2 0.2
Other 5.1 5.2
Total 24.6 24.9
Most employees in the Nilfisk Group are covered by pension
schemes, primarily in the form of defined contribution-based
plans or alternatively by defined benefit plans.
The Nilfisk Group companies contribute to these plans either
directly or by contributing to pension funds administered
independently. The nature of such schemes varies according to
legislative and regulatory regimes, rules regarding tax and the
economic conditions in the countries in which the employees
work. The contributions are usually based on employee salary
and seniority. The liability relates to pensions for already retired
staff as well as for employees retiring in the future.
The Nilfisk Group’s defined benefit plans primarily relate to the
UK, Germany and Switzerland.
The present value of defined benefit plans are based
on actuarial assumptions, and an increase/decrease in
these assumptions may lead to an increase/decrease in
the present value of the defined benefit plans.
Principal actuarial assumptions at the
balance sheet date (as weighted average) 2020 2019
Discount rate 0.6% 0.7%
Future salary increases 0.4% 0.6%
Future pension increases 1.3% 0.8%
The anticipated duration of the plan liability, expressed
as a weighted average, was 16 years at December 31,
2020 (2019: 16 years). The Nilfisk Group’s expected
contribution to defined benefit plans in 2021 amounts
to 0.5 mEUR.
Key accounting estimates
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 79
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 4
4.6 Pension liabilities – Continued
Sensitivity
The table below shows the sensitivity of the pension liability to
changes in the key assumptions
EUR million 2020 2019
0.5% point increase in the discount rate -2.4 -2.3
0.5% point decrease in the discount rate 2.7 2.6
0.5% point increase in the future salary increases 0.3 0.3
0.5% point decrease in the future salary increases -0.3 -0.2
±
The Nilfisk Group has contracted pension plans and
similar arrangements with the majority of its employees.
Liabilities with respect to defined contribution-based
pension plans, where the Nilfisk Group makes fixed
regular payments to independent pension companies,
are recognized in the income statement in the period
to which they relate. Any contributions outstanding are
recognized in the statement of financial position under
other payables.
In the case of defined benefit plans, an annual actuarial
calculation (the Projected Unit Credit Method) is
made of the present value of future benefits payable
under the plan. The present value is determined based
on assumptions about the future development in
variables such as salary levels, interest rates, inflation
and mortality. The present value is determined only for
benefits earned by employees from their employment
with the Nilfisk Group. The actuarial present value
less the fair value of any plan assets is recognized in
the statement of financial position under employee
benefits.
Pension expenses for the year are recognized in the
income statement based on actuarial estimates and
financial expectations at the start of the year. The
differences between calculated return and realized
return on plan assets and liabilities are designated
actuarial gains or losses and recognized in other
comprehensive income.
If a pension plan constitutes a net asset, the asset is
only recognized if it offsets cumulative actuarial losses
or future refunds from the plan, or if it will lead to
reduced future payments to the plan.
§
Accounting policy
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 80
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 4
4.7 Provisions
Development in provisions
EUR million Warranties Other Total
2020
Provisions, January 1 11.4 3.7 15.1
Exchange rate adjustments 0.2 -0.2 -
Provisions made during the year 12.0 4.7 16.7
Used during the year -10.3 -1.5 -11.8
Reversed during the year -0.6 - -0.6
Provisions, December 31 12.7 6.7 19.4
Provisions are presented as:
Non-current liabilities - 2.0 2.0
Current liabilities 12.7 4.7 17.4
Total 12.7 6.7 19.4
2019
Provisions, January 1 11.2 6.5 17.7
Exchange rate adjustments 0.1 0.3 0.4
Provisions made during the year 11.2 2.3 13.5
Used during the year -10.8 -0.6 -11.4
Reversed during the year -0.3 -4.8 -5.1
Provisions, December 31 11.4 3.7 15.1
Provisions are presented as:
Non-current liabilities - 1.3 1.3
Current liabilities 11.4 2.4 13.8
Total 11.4 3.7 15.1
Provisions are recognized when, as a result of events arising
before or at the balance sheet date, the Nilfisk Group has a
legal or a constructive obligation, and it is more likely than
not, that the settlement is expected to result in an outflow
of resources.
When measuring provisions, the costs required to settle
the obligation are discounted if this significantly affects
the measurement of the liability. A pre-tax discount rate
is applied that reflects the current market interest rate
and the specific risks relating to the obligation. Changes
in present values during the year are recognized under
financial expenses.
Warranty commitments are recognized in step with sale of
goods and services based on the level of warranty expenses
incurred in previous years. Serial fault is included as a
warranty provision. Serial faults only becomes a warranty at
the time the items have left the factory and are up for sale.
Until then, handling faults are part of the quality review
and are recognized as such cost under cost of sales.
Provisions for restoring rented facilities when vacated are
measured at the present value of the expected clearance
and closure obligation at the balance sheet date. The
provision is based on existing encumbrances and estimated
costs discounted to present value. Specific risks considered
to attach to the obligation are included in the estimated
costs. A discount rate is applied which reflects the current
market interest rate. The obligations are included as they
occur and are continuously adjusted to reflect changed
requirements and price levels, etc. The present value of the
costs is included in the costs of the relevant tangible assets
and depreciated accordingly. The increase in the present
value over time is recognized in the income statement
under financial expenses.
Other provisions include the restoration of rented facilities,
provisions related to restructuring, legal cases, etc.
§
Accounting policy
The amount recognized as a provision is the Executive
Management Board’s best estimate of the amount required
to settle the obligation.
The warranty provision represents management’s best
estimate of the Group’s liability under 12-month warranties
granted on products, based on past experience.
Key accounting estimates
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 81
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 5
5. Working capital
Breakdown of working capital
EUR million 2020 2019
Inventories 149.3 172.7
Trade receivables 154.2 175.0
Other receivables 19.1 21.1
Income tax receivable 5.0 5.1
Other non-current liabilities -1.3 -2.6
Trade payables -99.9 -111.9
Other liabilities -93.6 -96.5
Income tax payable -1.2 -5.0
Working capital 131.6 157.9
Working capital ratio (LTM) 18.8% 20.6%
The working capital represents the assets and liabilities
necessary to support the day-to-day operations. Working
capital is defined as current assets less current and other
non-current liabilities, excluding interest-bearing items and
provisions, but including derivatives.
Composition and drivers
The Nilfisk Group manufactures products and operates in
different markets. The Group’s operating model, with several
assembly locations and a number of distribution hubs for
finished products, leads to a relatively high level of inventory.
Key developments in 2020
The Nilfisk Group working capital decreased by 26.3 mEUR
from 157.9 mEUR at December 31, 2019 to 131.6 mEUR
at December 31, 2020. The decrease in working capital
was primarily related to a decrease in inventories and trade
receivables.
Inventories decreased from 172.7 mEUR at December 31,
2019 to 149.3 mEUR at December 31, 2020. The efforts to
bring down inventories resulted in a decrease in inventory days
compared to 2019.
Trade receivables amounted to 154.2 mEUR at December 31,
and have decreased by 20.8 mEUR since December 31, 2019.
The decline in trade receivables and corresponding decline
in revenue resulted in a decrease in days sales outstanding
compared to 2019.
The working capital ratio measured in percentage of revenue
on a 12-month average was 18.8% at the end of 2020. This
was a decrease of 1.8 percentage points compared to 2019.
This note covers the Nilfisk Group’s working capital.
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 82
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 5
5.1 Inventories
The Nilfisk Group’s entities carry inventory to support their
operations. Continuous efforts aim to reduce inventory levels
while maintaining customer service through short lead times.
Inventory days decreased from 132 to 127 by the end of
December 2020. See the Management review for more details
of the inventory development.
Specification of inventories
EUR million 2020 2019
Raw materials, consumables and goods for resale 39.5 54.2
Work in progress 1.2 1.0
Finished goods 108.6 117.5
Total 149.3 172.7
Write-down on inventories, January 1 9.2 12.3
Exchange rate adjustments -0.3 -
Write-down on inventories for the year expensed
in the income statement 2.5 1.2
Utilization of write-downs -0.2 -3.6
Reversal of write-downs -0.2 -0.7
Write-down on inventories, December 31 11.0 9.2
§
Accounting policy
Inventories are measured at costs in accordance with
the FIFO method or at a weighted average. If the net
realizable value is lower than cost, inventories are
written down to this lower value.
Raw materials, consumables and goods for resale are
measured at cost, comprised of purchase price plus
delivery costs.
Finished goods and work in progress are measured
at cost, which includes the costs of raw materials,
consumables, direct wages/ salaries and production
overheads. Production overheads include indirect
materials and wages/salaries, as well as maintenance
and depreciation of production machinery, buildings
and equipment, along with costs for production
administration and management.
The net realizable value of inventories is calculated
as the sales amount less costs of completion and
costs incurred in effecting the sale, and is determined
taking into account marketability, obsolescence and
development in expected sales price.
!
Key accounting judgments
Allocation of production overheads, such as indirect
materials, wages/salaries and maintenance and
depreciation of production machinery, buildings
and equipment, along with costs for production
administration and management are based on relevant
assumptions related to capacity utilization, production
time and other relevant factors.
Changes in assumptions may affect gross profit margins
as well as the valuation of the inventories.
The write-down in inventories is based on the expected
sales forecast and slow moving items.
Key accounting estimates
§
Accounting policy
Liabilities are measured at amortized cost, except for
derivative financial instruments which are measured
at fair value.
5.2 Trade payables and liabilities
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 83
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 5
5.3 Trade receivables
Trade receivables decreased in absolute terms from December
31, 2019 to December 31, 2020. The outstanding balances
are being monitored closely with a high focus on collecting
receivables. The days sales outstanding was 56.0 and
decreased compared to the same period last year (2019: 60.1)
Movements in allowance for expected credit losses
EUR million 2020 2019
Allowance, January 1 5.9 3.9
Exchange rate adjustments -0.3 -
Allowance losses recognized 2.1 3.1
Reversal of allowance losses -0.9 -0.7
Realized allowance losses -0.7 -0.4
Allowance, December 31 6.1 5.9
Allowance for expected credit losses amounted to 6.1 mEUR
compared to 5.9 mEUR as of December 31, 2019.
A total of 3.2 mEUR was attributable to individual impairment
compared to 3.0 mEUR as of December 31, 2019
The following table details the risk profile of trade receivables
based on the Group’s provision matrix. The Group’s historical
credit losses do not show different patterns for different
customer segments. Increase in allowance for expected credit
losses was related to individual impairment in the US.
Specification of trade receivables
EUR million 2020 2019
Trade receivables, gross incl. VAT 160.3 180.9
Allowance for expected credit losses -6.1 -5.9
Total 154.2 175.0
Specification of expected credit losses
2020 2019
EUR million
Trade
receivables
Lifetime expected
credit losses
Expected
weighted average
credit loss rate
Trade
receivables
Lifetime expected
credit losses
Expected
weighted average
credit loss rate
Not past due 129.8 0.4 0.3% 144.0 0.3 0.2%
Overdue < 1 months 14.0 0.1 0.9% 18.4 0.1 0.6%
Overdue 1-2 months 4.0 0.2 4.3% 5.9 0.1 2.4%
Overdue 2-4 months 3.8 0.4 10.2% 4.2 0.4 10.5%
Overdue > 4 months 8.7 5.0 64.3% 8.4 5.0 62.7%
Total 160.3 6.1 180.9 5.9
The allowance for expected credit losses for trade
receivables is based on historical credit loss experience
combined with forward-looking information on
macroeconomic factors affecting the credit risk. The
expected loss rates are updated at every reporting date.
Key accounting estimates
§
Accounting policy
Receivables are recognized initially at their transaction
price and subsequently measured at amortized cost, which
usually corresponds to the nominal value less lifetime
expected credit losses. The expected credit losses on trade
receivables are estimated using a provision matrix with
reference to past default experience of the debtor and an
analysis of the debtor’s current financial position, adjusted
for general economic conditions of the market in which the
debtor operates. The Group recognizes a loss allowance
for expected credit losses and writes off trade receivables
when there is information indicating that the debtor is in
severe financial difficulty and there is no realistic prospect
of recovery.
The amount of write-downs is recognized in the income
statement under other operating expenses. Subsequent
recoveries of amounts previously written down are credited
against other operating costs.
Derivative financial instruments are measured at fair value.
Prepaid expenses are measured at cost.
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 84
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 6
6. Capital structure
This note covers the Nilfisk Group’s
capital structure and financial risks.
The Group’s objective is to have capital resources to meet
operating needs as well as capital for potential acquisitions. To
achieve and maintain an efficient capital structure, the Treasury
Policy states that the Group’s net interest-bearing debt should
be below 2.5 x EBITDA before special items.
In 2020, Nilfisk increased its financial headroom by obtaining
an additional loan of 100 mEUR. Total committed credit
facilities available to Nilfisk are therefore 550 mEUR (2019: 450
mEUR), provided by Nordea Danmark, a branch of Nordea Bank
Abp, Finland and Danske Bank A/S. The long-term committed
loans includes a financial covenant with reference to the ratio
between net interest-bearing debt and EBITDA. The facilities
are available for general funding purposes.
Payables to credit institutions, etc. are recognized at the
amount of proceeds received at the date of borrowing,
net of transaction costs paid. In subsequent periods
the financial liabilities are measured at amortized costs
using ‘the effective interest method’, the difference
between the proceeds and the nominal value therefore
being recognized in the income statement under
financial expenses over the term of the loan.
The carrying amount of payables to credit institutions
and other payables corresponds in all material respects
to fair value and nominal value.
§
Accounting policy
6.1 Net interest-bearing debt
Net interest-bearing debt at December 31, 2020 was
383.2 mEUR and hence decreased by 30.9 mEUR compared
to December 31, 2019.
In 2020, Nilfisk obtained a short-term loan of 100 mEUR,
maturing May 22, 2021, with an extension option of one year.
As of December 31, 2020 the net interest-bearing debt
primarily consisted of short- and long-term credit facilities
and cash and cash equivalents. The interest-bearing debt was
denominated primarily in EUR.
Specification of net interest-bearing debt
2020 2019
Non-cash changes Non-cash changes
EUR million January 1 Cash flows
Foreign exchange
movement Leases December 31 January 1 Cash flows
Foreign exchange
movement Leases December 31
Non-current interest-bearing loans and borrowings 376.9 -153.5 3.9 - 227.3 382.2 -5.3 - - 376.9
Non-current lease liabilities 32.2 - -0.7 12.8 44.3 0.1 - - 32.1 32.2
Current interest-bearing loans and borrowings 5.0 100.3 -0.1 - 105.2 7.6 -2.9 0.3 - 5.0
Current lease liabilities 24.0 -26.4 -0.5 25.4 22.5 0.2 -24.5 -0.1 48.4 24.0
Interest-bearing liabilities 438.1 -79.6 2.6 38.2 399.3 390.1 -32.7 0.2 80.5 438.1
Other interest-bearing receivables -4.7 1.5 0.2 - -3.0 -4.4 -0.3 - - -4.7
Interest-bearing receivables -4.7 1.5 0.2 - -3.0 -4.4 -0.3 - - -4.7
Net liabilities from financing activites 433.4 -78.1 2.8 38.2 396.3 385.7 -33.0 0.2 80.5 433.4
Cash and cash equivalents 19.3 -4.6 -1.6 - 13.1 16.4 2.3 0.6 - 19.3
Net interest-bearing debt 414.1 -73.5 4.4 38.2 383.2 369.3 -35.3 -0.4 80.5 414.1
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 85
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Details of associated companies
2020 2019
M2H
CFM
Lombardia Thoro M2H
CFM
Lombardia
EUR million France Italy US France Italy
Revenue 71.7 1.9 - 68.3 2.0
Profit (loss) after tax 4.2 - -3.6 8.3 0.1
Non-current assets 13.0 0.1 16.8 13.3 0.1
Current assets 60.2 1.0 - 57.6 1.2
Total assets 73.2 1.1 16.8 70.9 1.3
Equity 47.8 0.3 14.3 46.5 0.3
Non-current liabilities 15.3 0.1 - 13.6 0.1
Current liabilities 10.1 0.7 2.5 10.8 0.9
Equity and liabilites 73.2 1.1 16.8 70.9 1.3
Ownership in % 44% 33% 50% 44% 33%
Share of profit after tax 1.9 - -1.8 3.7 -
Share of equity 21.1 0.1 7.2 20.5 0.1
Goodwill recognized 0.9 - - 0.9 -
Carrying amount 22.0 0.1 7.2 21.4 0.1
Goods sold to 14.0 0.7 - 20.2 1.1
Receivables from
associates 6.7 0.3 - 8.6 0.3
Note 6
6.2 Investments in associates
Management has assessed that the carrying value
of Thoro is the best estimate for the fair value
assessment of the assets transferred. Though significant
uncertainties related to the fair value assessment, this is
based on Management’s best estimate.
Key accounting estimates
Associated companies include M2H, CFM Lombardia and Thoro.
The primary activity of M2H is the sale of industrial equipment
and associated services to cleaning companies. Since 2000,
M2H has been the “Cleaning Division” of Nilfisk in France.
The primary activity for CFM Lombardia is the design and sale
of industrial vacuum cleaners for dusts, solids and liquids in
Italy. CFM Lombardia is a historical distributor for Nilfisk Italy,
and was created to promote Nilfisk IVS products (and Outdoor
at the time) in the north of Italy.
Thoro is a joint venture established in 2020 with Carnegie
Robotics LLC, to spin out the autonomous technology
embedded in the Nilfisk Liberty SC50 into a separate technology
company. During 2020 Nilfisk carved out the IP rights for the
autonomous robotics software developed in corporation with
Carnegie Robotics to Thoro LLC. In connection with the carve-
out, a fair value assesment has been carried out and no gain or
loss has been recognized as a result of this.
Carrying amount of associated companies
EUR million 2020 2019
Carrying amount, January 1 21.5 19.1
Exchange rate adjustments -0.6 -
Share of profit recognized in the income statement 0.1 3.7
Contribution 9.6 -
Dividends -1.3 -1.3
Carrying amount, December 31 29.3 21.5
An associated company is an entity in which the Nilfisk
Group has significant influence, but not control, which
in general will be when holding 20% to 50% of the
voting rights. Such investments are accounted for using
the equity method of accounting. The investment is
adjusted by the Nilfisk Group’s share of the results after
tax of the associated company.
The Nilfisk Group’s share of the results is recognized
in separate line in the income statement. The share
of results will be recognized based on the associated
company’ full-year outlook, with adjustment for the
actual full-year result in the following year.
§
Accounting policy
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 86
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Risk management policy
The Nilfisk Group is exposed to and manages different financial
risks through its operations, investments and financing
activities. As a matter of policy, the Nilfisk Group does not
actively speculate in financial risks.
The overall objectives and policies for the Nilfisk Group’s
financial risk management are outlined in an internal Treasury
Policy, which is approved by the Board of Directors. The general
principle is that only financial risk exceeding a defined risk
threshold is hedged. The risk thresholds are defined to provide
the Nilfisk Group with sufficient risk protection while taking
hedging costs into consideration.
The Nilfisk Group uses financial instruments to hedge exposures
relating to currency, interest rate and remuneration risks.
The financial risks are divided into:
• Interest rate risks
• Remuneration risks
• Credit risks
• Liquidity risks
• Currency risks
Note 6
6.3 Financial risks and financial instruments
Interest rate risks
Interest rate risks refer to the influence of changes in market
interest rates on future cash flows concerning the Nilfisk
Group’s net interest-bearing debt.
Nilfisk Group has entered into interest rate cap agreements and
is hedging 35% of gross debt at December 31, 2020 compared
to 34% in 2019.
Interest caps
Effective date Maturity date
Notional
value
(mEUR) Cap strike
Carrying
amount
(mEUR)
2020
September 29, 2017 June 30, 2021 140 0.00% p.a. -0.1
June 30, 2021 June 30, 2023 150 0.50% p.a. -0.1
Total -0.2
2019
September 29, 2017 June 30, 2021 150 0.00% p.a. -0.4
Total -0.4
Remuneration risks
Nilfisk has an exposure on its share-based incentive schemes
(LTI programs) – cash-settled phantom share programs and
equity-settled performance share programs. The exposure is the
development in the price of the Nilfisk share that impacts the
costs of the cash-settled scheme and liquidity required to settle
the equity-settled schemes by own shares.
To mitigate the risk, Nilfisk has entered into a Total Return
Swap (TRS). For 2020, the interest expense amounted to 0.0
mEUR (2019: 0.1 mEUR). Nilfisk is obligated to exercise all
shares within the TRS at the date of expiration. Dividends from
the shares are fully compensated to Nilfisk.
Total Return Swap
Shares Maturity date
Strike
price
(EUR)
Notional
value
(mEUR)
Interest
rate
Carrying
amount
(mEUR)
2020
124,896 March 4, 2021 125.80 15.7 2.35% 0.1
2019
138,347 June 4, 2020 162.00 22.4 1.43% -0.3
It is estimated that a 1% rise in the market interest
rate for the Nilfisk Group’s interest-bearing liabilities
at December 31, 2020 would impact pre-tax earnings
negatively on an annual basis by approximately 1.1
mEUR p.a. compared to 1.6 mEUR in 2019.
±
Sensitivity
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 87
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 6
6.3 Financial risks and financial instruments – continued
Credit risks
The Nilfisk Group’s credit risks relate partly to receivables and
cash at bank and in hand, and partly to derivative financial
instruments with positive fair values. The maximum credit
risk attached to financial assets corresponds to the values
recognized in the statement of financial position.
The Nilfisk Group has no material risks relating to a single
customer or partner. The Nilfisk Group’s policy for acceptance
of credit risks entails ongoing credit rating of important
customers and other partners.
Insurance cover and similar measures to hedge receivables are
rarely applied as this is not deemed necessary.
Liquidity risks
It is the Nilfisk Group’s policy to maintain adequate cash
resources for implementing planned operating activities and
to be able to operate effectively in the event of unforeseen
fluctuations in liquidity. The Nilfisk Group’s cash resources
consist of cash, cash equivalents and undrawn credit facilities.
Maturity of the Nilfisk Group’s liabilities
EUR million Within 1 year 1-2 years 2-3 years 3-4 years 4-5 years > 5 years Total
2020
Forward contracts 2.3 - - - - - 2.3
Other hedging instruments 0.1 - 0.1 - - - 0.2
Interest-bearing loans and borrowings 105.2 222.1 - 0.1 0.5 4.6 332.5
Lease liabilities 22.5 17.7 11.6 6.7 5.3 3.0 66.8
Trade payables 99.9 - - - - - 99.9
Other financial liabilties 91.2 0.8 0.4 - - - 92.4
Total 321.2 240.6 12.1 6.8 5.8 7.6 594.1
2019
Forward contracts 3.2 - - - - - 3.2
Other hedging instruments - 0.4 - - - - 0.4
Interest-bearing loans and borrowings 5.0 23.8 353.1 - - - 381.9
Lease liabilities 24.0 13.2 8.9 4.2 2.0 3.9 56.2
Trade payables 111.9 - - - - - 111.9
Other financial liabilities 93.3 1.9 0.2 0.1 - - 95.5
Total 237.4 39.3 362.2 4.3 2.0 3.9 649.1
The below items do not include interest. The forward contracts
are recognized at fair value and the discount element is
considered insignificant due to short maturity.
Payables to credit institutions are consequently recognized in
the statement of financial position at the amounts stated in
the table below.
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 88
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Outstanding FX hedging contracts
2020 2019
EUR million
Notional
value
1
Recognized
in OCI
Notional
value
1
Recognized
in OCI
CNH/DKK
2
50.6 -0.6 53.1 0.4
GBP/DKK -18.1 - -19.1 -1.0
SEK/DKK -8.8 -0.2 -10.3 -0.1
USD/DKK -8.4 0.4 -9.1 -0.1
CAD/USD -12.1 -0.5 -11.8 -0.2
Other -3.6 - -13.9 -0.2
Total -0.4 -0.9 -11.1 -1.2
1
Forward exchange contracts with positive notional values are purchases of the
relevant currency; negative notional values are sales.
2
The Chinese yuan traded offshore (CNH) is used as a proxy when hedging the CNY
currency exposure for the Group.
Currency risks
With sales to approximately 100 countries, the Nilfisk Group is
exposed to currency risks that could have considerable impact
on the income statement and statement of financial position.
Currency risks refer to the risks of losses (or opportunities
for gains) resulting from changes in currency rates. Currency
risks arise through transactions, financial assets, and liabilities
denominated in currencies other than the functional currency
of the individual Group businesses.
Translation risks relating to net investments in subsidiaries
As a basic principle, the hedging of currency risks is not
performed for net assets (equity) in foreign subsidiaries.
Gains and losses relating to unhedged net assets in foreign
subsidiaries are accounted for directly in other comprehensive
income. Currency risks relating to other investments in foreign
entities are not deemed significant.
Note 6
6.3 Financial risks and financial instruments – continued
Net financing
Significant currency risks relating to receivables and payables
that influence the Nilfisk Group’s net income are hedged.
Balances with credit institutions are denominated in the
functional currency of the businesses concerned.
Future cash flows
The Nilfisk Group’s principal currency exposure relates to sales
and purchases in currencies other than the functional currency
of the individual Nilfisk Group businesses. Hedging of these
currency risks is based on assessments of the likelihood of the
future transaction being performed and whether the associated
currency risk is significant.
Expected cash flows with significant currency risk are hedged
on a 14 month rolling basis. The fair value of the effective part
of the hedge is recognized in other comprehensive income on
a continuous basis.
The table to the right shows net outstanding forward exchange
hedging contracts at December 31, 2020 for the Nilfisk
Group which are used for and fulfil the conditions for hedge
accounting of future transactions. Forward exchange contracts
relate to hedging of product sales/purchase.
The table below shows the sensitivity of the Nilfisk
Group’s equity, if the exchange rate decreased by
10% for the the most significant investments,
excluding EUR/DKK.
EUR million 2020 2019
CNY -9.8 -10.6
GBP -3.4 -3.3
USD -2.0 -2.2
Total -15.2 -16.1
±
Sensitivity
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 89
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
The following table details the foreign currency forward contracts outstanding at the end of the reporting period, as well as
information regarding their related hedged items.
Foreign currency forward contract assets and liabilities are presented in the line “Receivables/other liabilities” in the statement of
financial position. During the year, no ineffectiveness on hedge contracts has been recognized, and the change in value used for
the calculated ineffectiveness is therefore equal to carrying amount.
Note 6
6.3 Financial risks and financial instruments – continued
2020 2019
Cash flow hedges
Average
exchange rate
Notional value:
Foreign currency
Notional value:
Local currency
Carrying amount
of hedges, net
Average
exchange rate
Notional value:
Foreign currency
Notional value:
Local currency
Carrying amount
of hedges, net
(tFCY) (tLCY) EUR thousand (tFCY) (tLCY) EUR thousand
Buy CNH CNH/DKK CNH DKK CNH/DKK CNH DKK
- 0-6 months 0.9568 218,500 209,061 -534.1 0.9707 276,000 267,903 193.2
- 7-14 months 0.9320 187,300 174,558 -59.7 0.9557 139,000 132,847 214.7
Sell GBP GBP/DKK GBP DKK GBP/DKK GBP DKK
- 0-6 months 8.4317 -9,750 -82,209 106.2 8.4621 -10,600 -89,698 -597.9
- 7-14 months 8.1653 -6,600 -53,891 -153.6 8.3653 -5,700 -47,682 -387.5
Sell SEK SEK/DKK SEK DKK SEK/DKK SEK DKK
- 0-6 months 0.7250 -51,300 -37,192 -127.9 0.7149 -72,700 -51,974 -34.3
- 7-14 months 0.7258 -36,900 -26,780 -100.0 0.7038 -35,000 -24,632 -70.7
Sell USD USD/DKK USD DKK USD/DKK USD DKK
- 0-6 months 6.5128 -5,650 -36,797 292.0 6.6498 -6,300 -41,894 -128.8
- 7-14 months 6.3361 -4,700 -29,780 143.9 6.7282 -3,900 -26,240 -11.9
Sell CAD CAD/USD CAD USD CAD/USD CAD USD
- 0-6 months 0.7482 -10,750 -8,044 -315.2 0.7479 -9,450 -7,068 -134.1
- 7-14 months 0.7692 -8,200 -6,307 -101.0 0.7584 -7,800 -5,916 -68.2
Other - - - -63.3 - - - -181.9
Total -912.7 -1,207.4
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 90
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 6
6.3 Financial risks and financial instruments – continued
The following table details the effectiveness of the hedging relationships and value adjustments reclassified from hedging reserve to the income statement:
Hedging reserve
2020 2019
EUR million Currency risk Interest rate risk Remuneration risk Total Currency risk Interest rate risk Remuneration risk Total
Hedging reserve, January 1 -0.8 -0.4 0.8 -0.4 1.0 -0.4 0.1 0.7
Value adjustment for the year - 0.2 - 0.2 -0.2 - -0.3 -0.5
Value adjustment reclassified to cost of sales - - - - -1.7 - - -1.7
Value adjustment reclassified to staff costs - - - - - - 0.9 0.9
Value adjustment reclassified to financial income and expenses - - -0.6 -0.6 - - - -
Value adjustment reclassified to inventory - - - - -0.4 - - -0.4
Tax on value adjustment of hedging instruments - - -0.1 -0.1 0.5 - 0.1 0.6
Hedging reserve, December 31 -0.8 -0.2 0.1 -0.9 -0.8 -0.4 0.8 -0.4
The sensitivity analysis demonstrates currency rate changes
equal to the individual currency’s historic volatility, with all
other variables held constant. The impact on the profit and
loss is due to changes in the fair value of monetary assets
and liabilities including fair value hedges. The impact on
other comprehensive income is due to changes in the fair
value of forward exchange contracts designated as cash flow
hedges. The Group’s exposure to foreign currency changes
for all other currencies is not material. The analysis shows
that for instance a 6% increase in the CNH/DKK rate will
impact other comprehensive income by 3.3 mEUR.
2020 2019
EUR million Historic volatility
Change
recognized in OCI
Change
recognized in P&L Historic volatility
Change
recognized in OCI
Change
recognized in P&L
CNH/DKK 6% 3.3 -0.1 5% 2.8 -0.2
GBP/DKK 6% -1.1 -0.2 6% -1.2 -
SEK/DKK 8% -0.7 -0.1 5% -0.5 -
USD/DKK 7% -0.6 -0.3 6% -0.5 -
CAD/USD 8% -1.0 -0.1 5% -0.6 0.1
MXN/USD 13% - - 9% - -0.3
±
Sensitivity
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 91
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Fair values
Financial instruments measured at fair value in the statement
of financial position are designated as belonging to one of the
following three categories (the ‘fair value hierarchy’):
Level 1: Listed prices (unadjusted) in active markets for
identical assets and liabilities
Level 2: Input, other than listed prices on Level 1, which is
observable for the asset or liability either directly (as
prices) or indirectly (derived from prices)
Level 3: Input for the asset or liability which is not based on
observable market data (non-observable input)
Financial instruments measured at fair value consist of
derivative financial instruments. The fair value of the Nilfisk
Group’s forward transactions is measured in accordance with
Level 2 as the fair value is based on official exchange rates and
forward rates at the balance sheet date. The fair value of the
TRS is measured in accordance with Level 2 as the fair value
is based on inputs of which most are observable including
the share price of Nilfisk. There are no financial instruments
measured at Level 1 and 3.
Note 6
6.3 Financial risks and financial instruments – continued
Financial assets and liabilities by category
EUR million 2020 2019
Financial assets:
Trade receivables 154.2 175.0
Interest-bearing receivables 3.0 4.7
Other financial receivables 17.6 19.6
Financial assets at amortized cost 174.8 199.3
Derivative financial instruments 0.9 1.4
Fair value through other comprehensive income 0.9 1.4
Derivative financial instruments 0.6 0.1
Fair value through profit and loss 0.6 0.1
Total 176.3 200.8
Financial liabilities:
Interest-bearing loans and borrowings 332.5 381.9
Trade payables 99.9 111.9
Lease liabilities 66.8 56.2
Other financial liabilities 92.4 95.5
Financial liabilities at amortized cost 591.6 645.5
Derivative financial instruments 1.9 2.7
Fair value through other comprehensive income 1.9 2.7
Derivative financial instruments 0.6 0.9
Fair value through profit and loss 0.6 0.9
Total 594.1 649.1
Financial instruments, net -1.0 -2.1
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 92
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Derivative financial instruments
Derivative financial instruments are recognized from the
trade date and measured in the statement of financial
position at fair value. Positive and negative fair values
of derivative financial instruments are included in other
receivables and payables, respectively. Fair values of
derivative financial instruments are computed on the basis
of current market data and generally accepted valuation
methods.
Fair value hedges
Changes in the effective portion of the fair value of
derivative financial instruments designated and qualifying
as a fair value hedge of a recognized asset or a recognized
liability are recognized in the income statement together
with changes in the value of the hedged asset or hedged
liability.
Apart from foreign currency hedging, hedge of future cash
flows according to a firm commitment is treated as a fair
value hedge.
The ineffective portion of the change in the fair value of
a derivative financial instrument is presented under
financial items.
Cash flow hedges
Changes in the effective portion of the fair value of
derivative financial instruments designated and qualifying
as hedges of future cash flows are recognized in other
comprehensive income and accumulated in a separate
hedging reserve under equity until the hedged item
influences the income statement. Gains or losses relating
to such hedging transactions are then transferred through
other comprehensive income and recognized in the
income statement in the same item as the hedged item.
However, when the hedged forecast transaction results in
the recognition of a non-financial asset or a non-financial
liability, the gains and losses previously recognized in other
comprehensive income and accumulated in equity are
removed from equity and included in the initial measurement
of the cost of the non-financial asset or non-financial liability.
This transfer does not affect other comprehensive income.
If the hedging instrument no longer meets the criteria for
hedge accounting, the hedging relationship is discontinued
prospectively. The accumulated reserve in equity remains
in equity if it is still probable that the hedged cash flows
will occur and is transferred through other comprehensive
income to the income statement when the hedged cash
flows influence the income statement.
If the hedged cash flows are no longer expected to be
realized, the accumulated reserve in equity is immediately
transferred to the income statement.
The ineffective portion of the change in the fair value of a
derivative financial instrument is recognized immediately in
the income statement and presented under financial items.
LTI program hedges
Cash-settled program
Changes in the effective portion of the fair value of
derivative financial instruments designated and qualifying
as hedges of the impact from development in the price of
the Nilfisk share on cash-settled programs are recognized in
other comprehensive income and accumulated in a separate
hedging reserve under equity. The accumulated reserve in
equity is transferred through other comprehensive income
and recognized in the income statement under staff costs,
when the expenses are recognized in the income statement.
The hedge of subsequent changes to recognized expenses
are accounted for as a fair value hedge.
If the hedging instrument no longer meets the criteria for
hedge accounting, the hedging relationship is discontinued
prospectively. The accumulated reserve in equity is
immediately transferred through other comprehensive
income to the income statement.
Equity-based programs
Hedge accounting cannot be applied on equity-based
programs as fluctuations in the price of the Nilfisk share do
not affect the income statement. Thus, changes in the fair
value of derivative financial instruments hedging the liquidity
risk related to the settlement of equity-settled programs are
recognized in the income statement under financial items.
Other derivative financial instruments
Changes in the fair value of derivative financial instruments
that do not qualify for hedge accounting are recognized
under financial items as they arise.
§
Accounting policy
Note 6
6.3 Financial risks and financial instruments – continued
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 93
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 6
6.4 Share capital
The total number of shares is 27,126,369 with a nominal value
of 20 DKK each. The share capital is unchanged from 2019.
All shares have been fully paid up and no shares carry special
rights. Nilfisk Holding A/S’ Articles of Association specifies
no limits in respect of ownership or voting rights, and the
Executive Management Board is unaware of any agreements
in this regard.
Earnings per share
Earnings per share of -0.10 is based on profit attributable
to shareholders of Nilfisk Holding A/S of -2.6 mEUR and an
average number of shares of 27,126,369.
EUR 2020 2019
Basic earnings per share -0.10 0.32
Diluted earnings per share -0.10 0.32
Dividends
At the Annual General Meeting to be held on March 26, 2021,
the Board of Directors will propose not to distribute dividends
for the financial year of 2020 (2019: 0 mEUR).
Dividends are recognized as a liability at the date of
adoption at the Annual General Meeting (declaration
date). Proposed dividend payments for the year are
disclosed as a separate item under equity.
Interim dividends are recognized as a liability at the date
when the decision to pay such dividends are made.
Foreign exchange reserve
The foreign exchange reserve includes exchange rate
adjustments arising on translation of the financial
statements of foreign entities with a currency that is
not the Group’s functional currency
Hedging reserve
Hedging reserve covers:
• cash flow hedging of interest payments
• hedging of currency risk of cash flows
• hedging of LTI program
§
Accounting policy
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 94
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 7
7. Other notes
7.1 Fees to auditors elected at the
annual general meeting
EUR million 2020 2019
Deloitte
Statutory audit 0.9 0.8
Other assurance services 0.2 0.3
Total 1.1 1.1
The fee for other assurance services provided to the Group
by Deloitte Statsautoriseret Revisionspartnerselskab Denmark,
amounted to 0.2 mEUR in 2020 (2019: 0.3 mEUR).
7.2 Events after the balance sheet date
No events have occurred in the period from the balance sheet
date until the presentation of the financial statements that
materially affect the assessment of the consolidated financial
statements.
7.3 Related parties
The Nilfisk Group has had the following transactions and
balances with related parties:
EUR million 2020 2019
Goods sold to associated companies 14.7 21.3
Dividends received from associated companies 1.3 1.3
Trade receivables from associated companies 7.0 8.9
Please refer to Note 3.2 and Note 3.3 for remuneration to the
Executive Management Board and note 6.2 for details on the
contribution to Thoro LLC.
This note contains other statutory notes and notes considered less essential
to the understanding of the Nilfisk Group’s financial development.
7.4 Other non-cash adjustments
EUR million 2020 2019
Gains and losses from disposal of assets 0.2 0.2
Change in provisions 7.3 -5.9
Other non-cash items - 0.5
Total 7.5 -5.2
7.5 Contingent liabilities, securities
and contractual obligations
The Nilfisk Group has issued guarantees in total of 22.5 mEUR
(2019: 37.1 mEUR). This includes rental guarantees of 7.4
mEUR (2019: 12.5 mEUR). In addition, guarantees of 11.8
mEUR (2019: 24.7 mEUR) to support local bank facilities for
subsidiaries were established by Nilfisk A/S.
Nilfisk Holding A/S is liable for obligations attributable to
the activities, assets and liabilities of NKT A/S that existed
at the demerger September 11, 2017. The joint and several
liabilities of Nilfisk Holding A/S and NKT A/S respectively cannot
exceed an amount corresponding to the net value of the
assets and liabilities. Nilfisk Holding A/S has entered into an
indemnification agreement with NKT A/S, under which each
party has a defined right of recourse with respect to any
liabilities a party may incur in respect of the other party under
the joint and several liability.
The Nilfisk Group is engaged in certain disputes, legal
proceedings and inquiries from authorities, including tax
authorities, the outcome of which is not expected to materially
impact the Group’s financial position.
Contingent liabilities
Disclosure concerning contingent assets and liabilities
and when they must be recognized takes place against
the background of evaluations of the expected outcome
of the individual issues. These evaluations are based on
legal opinions of the agreements contracted, which in
significant issues also include opinions obtained from
external advisors, including lawyers.
Assets are recognized when it is virtually certain that
the issue will have a positive outcome for the company.
A liability is recognized when it is likely that, at the
balance sheet date, there will be an outflow from the
Nilfisk Group’s financial resources and when the liability
can be reliably stated. If this is not the case, the matter
is disclosed in the notes to the financial statements.
Decisions relating to such situations may in future
accounting periods lead to realized gains or losses that
may differ significantly from the recognized amounts or
disclosures.
§
Accounting policy
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 95
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Denmark
Nilfisk Holding A/S Denmark
Nilfisk A/S Denmark
Nippon Investment Corporation ApS Denmark
Europe
Nilfisk GmbH Austria
Nilfisk N.V./S.A. Belgium
Nilfisk s.r.o. Czech Rep.
Nilfisk Oy Finland
Nilfisk S.A.S. France
Nilfisk-Advance Eppingen GmbH Germany
Nilfisk GmbH Germany
Nilfisk Hellas S.A. Greece
Nilfisk Production Kft. Hungary
Nilfisk Commercial Kft. Hungary
Nilfisk Ltd Ireland
Nilfisk S.p.A. Italy
Nilfisk B.V. Netherlands
Nilfisk AS Norway
Nilfisk Polska Sp.z.o.o. Poland
Nilfisk Lda Portugal
Nilfisk-Advance S.R.L. Romania
Nilfisk LLC Russia
Nilfisk s.r.o. Slovakia
Nilfisk S.A. Spain
Nilfisk AB Sweden
Nilfisk AG Switzerland
Nilfisk Profesyonel Temizlik Ekipmanlari Ticaret. A.S. Turkey
Nilfisk Trading LLC (49%)* UAE
Nilfisk Ltd. United Kingdom
Floor Cleaning Machines United Kingdom
North and Central America
Nilfisk Canada Company Canada
Nilfisk de Mexico S. de R.L. de C.V. Mexico
Nilfisk de Mexico Manufacturing S. de R.L. de C.V. Mexico
Nilfisk U.S Holding Inc. US
Nilfisk Inc. US
Nilfisk Robotics, Inc. US
Hathaway North America Inc. US
Hydro Tek Systems, Inc. US
Nilfisk Pressure-Pro, LLC. US
South America
Nilfisk S.R.L. Argentina
Nilfisk Equipamentos de Limpeza Ltda. Brazil
Nilfisk S.A. Chile
Nilfisk S.A.C. Peru
Asia/Pacific
Nilfisk Pty. Ltd. Australia
Dongguan Viper Cleaning Equipment Co. Ltd. China
Nilfisk Cleaning Equipment (Shanghai) Co. Ltd China
Nilfisk Professional Cleaning Equipment (Suzhou) Co. Ltd. China
Suzhou Nilfisk Research and Development Co. Ltd. China
Nilfisk Ltd. Hong Kong
Nilfisk India Private Ltd. India
Nilfisk Inc. Japan
Nilfisk Korea Co. Ltd. Korea
Nilfisk Sdn Bhd Malaysia
Nilfisk Ltd. New Zealand
Nilfisk Pte. Ltd. Singapore
Nilfisk Ltd. (Branch) Taiwan
Nilfisk Co. Ltd. Thailand
Nilfisk Company Ltd. Vietnam
Nilfisk Ltd. (Branch) Macau
Associates
M2H S.A. (44%) France
CFM Lombardia S.r.l. (33%) Italy
Thoro LLC (50%) US
Ownership below 100% is disclosed in brackets.
*Majority of voting rights
Note 7
7.6 Group companies
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 96
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Note 7
7.7 Definitions
Item Key figures and ratios Definition
1 Cash conversion Cash flow from operations before financial items and income taxes as a percentage of EBITDA
2 Capital employed Net total of non-current assets (including goodwill), pensions and deferred tax liabilities and working capital
3 Days sales outstanding Accounts receivables (excluding. VAT) minus bad debt provision divided with latest three months net sales accumulated up to twelve months and multiplied by 365
4 Diluted earnings per share Profit attributable to shareholders of Nilfisk Holding A/S as a percentage of diluted average number of outstanding shares
5 EBITDA before special items Earnings (profit) before interest, tax, depreciation, amortization, impairment and special items
6 EBITDA Earnings (profit) before interest, tax, depreciation, amortization and impairment
7 EBITDA margin before special items EBITDA before special items as a percentage of revenue
8 EBITDA margin EBITDA as a percentage of revenue
9 EBIT before special items Earnings before interest, tax and special items (operating profit before special items)
10 EBIT Earnings before interest and tax (operating profit)
11 EBIT margin before special items EBIT before special items as a percentage of revenue
12 EBIT margin EBIT as a percentage of revenue
13 Earnings per outstanding share (EPS) Profit attributable to shareholders of Nilfisk Holding A/S relative to average number of outstanding shares
14 Equity value per outstanding share Equity attributable to shareholders of Nilfisk Holding A/S per outstanding share at December 31
15 Financial gearing Net interest-bearing debt divided by EBITDA before special items
16 Free cash flow Cash flow from operating activities less cash flow from investing activities
17 Free cash flow excluding acquisitions and divestments Free cash flow plus cash flow from acquisition of businesses and less cash flow from divestment of businesses
18 Gross margin Gross profit as a percentage of revenue
19 Inventory days Gross inventory divided by latest three months cost of sales excluding amortizations and service department costs accumulated up to twelve months and multiplied by 365
20 Investment ratio Additions as a percentage of depreciations/amortizations
21 Net interest-bearing debt Current and non-current interest-bearing loans and borrowings less interest-bearing receivables and cash specified in Note 6.1
22 OCI Other comprehensive income
23 Organic growth Organic growth in local currency excluding acquisitions and divestments and foreign exchange rates
24 Overhead cost ratio Overhead costs as a percentage of revenue
25 R&D ratio R&D spend as a percentage of revenue
26 Return on capital employed (RoCE)
EBIT before special items as a percentage of the average of the capital employed, calculated by taking the capital employed at December 31 and
at the end of the preceding four quarters
27 Solvency ratio Equity attributable to shareholders of Nilfisk Holding A/S as a percentage of total assets
28 Working capital Current assets minus current and non-current liabilities (excluding interest-bearing items and provisions)
29 Working capital ratio Average working capital LTM (latest twelve month) as a percentage of revenue
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 97
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Alternative performance measures
The Group assesses its performance using a variety of
alternative performance measures which are not defined under
IFRS. A reconciliation from these alternative performance
measures to the nearest IFRS measure is presented below.
Organic growth
Organic growth is a measure that reflects the underlying
performance of the Group. As such, this excludes the impact of
acquisitions or divestments and foreign exchange movements.
Below is a reconciliation from the movement in reported
revenue according to IFRS to organic growth.
2020 2019
Revenue growth (according to income statement) -13.8% -8.3%
Foreign exchange 0.8% -1.2%
Acquisitions/divestments 1.5% 5.4%
Organic growth -11.5% -4.1%
EBITDA and EBITDA before special items
In addition to measuring financial performance of the Group
based on operating profit, EBITDA and adjusted EBITDA figures
are also used. We consider EBITDA to be a useful measure
because it approximates the underlying performance by
eliminating depreciations and amortizations.
EUR million 2020 2019
Operating profit 22.1 25.9
Amortization, depreciation and impairment 68.5 69.1
EBITDA 90.6 95.0
Special items (excluding impairment) 9.9 22.7
EBITDA before special items 100.5 117.7
Note 7
7.7 Definitions – continued
Overhead costs
Below is a breakdown of overhead costs, as presented in
the income statement. Overhead costs consists of operating
expenses, depreciations, amortizations and impairment as well
as other operating income and expenses.
EUR million 2020 2019
Research and development costs -31.7 -30.9
Sales and distribution costs -220.8 -244.8
Administrative costs -64.6 -82.1
Other operating income 5.5 4.1
Other operating expenses -2.2 -3.8
Total overhead costs -313.8 -357.5
Income statement and statement of comprehensive income Statement of financial position Cash flow statement Statement of changes in equity Notes to the consolidated financial statements
NILFISK ANNUAL REPORT 2020 | 98
Financial statementsManagement review
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
1. Basis for reporting
2. Profit for the year
3. Remuneration
4. Capital employed
and other balance
sheet accounts
5. Working capital
6. Capital structure
7. Other notes
Parent company financial statements 2020
Income statement 100
Balance sheet 100
Statement of changes in equity 101
1 Administrative costs 102
2 Fees to auditors elected at the annual general meeting 102
3 Financial expenses 102
4 Tax 102
5 Proposed distribution of loss for the year 102
6 Investments in subsidiaries 102
7 Prepayments 102
8 Related parties 102
9 Contingent liabilities, securities and contractual obligations 103
10 Events after the balance sheet date 103
Accounting policies 103
Notes
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
NILFISK ANNUAL REPORT 2020 | 99
Financial statementsManagement review
Income statement
for the period January 1 to December 31
Balance sheet
at December 31
EUR million Note 2020 2019
Other income 1 2.6 2.1
Administrative costs 1, 2 -3.9 -3.5
Operating loss -1.3 -1.4
Financial expenses 3 -0.7 -0.9
Loss before income taxes -2.0 -2.3
Income taxes 4 -1.2 0.6
Loss for the year -3.2 -1.7
To be distributed as follows:
Loss attributable to shareholders of Nilfisk Holding A/S 5 -3.2 -1.7
Total -3.2 -1.7
EUR million Note 2020 2019
Assets
Investments in subsidiaries 6 216.4 215.5
Deferred tax 4 0.1 1.4
Total non-current assets 216.5 216.9
Prepayments 7 - 0.1
Income tax receivable 0.4 -
Receivables from Group companies 8 6.2 2.8
Total current assets 6.6 2.9
Total assets 223.1 219.8
Equity and liabilities
Share capital 72.9 72.9
Retained earnings 19.0 21.7
Total equity 91.9 94.6
Interest-bearing loans and borrowings 11.7 7.5
Loans from Group companies 8 117.3 117.3
Total non-current liabilities 129.0 124.8
Trade payables and other liabilities 1.8 0.4
Total current liabilities 2.2 0.4
Total liabilities 131.2 125.2
Total equity and liabilities 223.1 219.8
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
NILFISK ANNUAL REPORT 2020 | 100
Financial statementsManagement review
Statement of changes in equity
for the years ended at December 31
EUR million Share capital Retained earnings Total equity
2020
Equity, January 1 72.9 21.7 94.6
Exchange rate adjustments - 0.4 0.4
Loss for the year - -3.2 -3.2
Share option program - 0.1 0.1
Total changes in equity - -2.7 -2.7
Equity, December 31 72.9 19.0 91.9
2019
Equity, January 1 72.9 23.8 96.7
Exchange rate adjustments - 0.1 0.1
Loss for the year - -1.7 -1.7
Share option program - -0.5 -0.5
Total changes in equity - -2.1 -2.1
Equity, December 31 72.9 21.7 94.6
The total number of shares is 27,126,369 with a nominal value of 20 DKK each. The share capital is
unchanged from 2019. All shares have been fully paid up and no shares carry special rights. Nilfisk Holding
A/S’ Articles of Association specifies no limits in respect of ownership or voting rights, and the Executive
Management Board is unaware of any agreements in this regard.
See Note 3.2 to the consolidated financial statements for a description of the share option program to the
Executive Management Board. Changes in equity in 2020 are comprised of loss for the year. No dividends
are proposed for 2020.
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
NILFISK ANNUAL REPORT 2020 | 101
Financial statementsManagement review
Note 1-8
Nilfisk Holding A/S is the parent company of the Nilfisk Group.
The parent company holds transactions related to holding of the
subsidiaries, please refer to the Management review.
1. Administrative costs
EUR million 2020 2019
Wages and salaries 2.4 2.7
Bonus 0.5 -
Long-term incentive programs 0.1 -
Total staff costs 3.0 2.7
Number of full-time employees, average 2 2
Number of full time employees, year-end 2 2
Remuneration to Board of Directors 0.6 0.6
Remuneration to the Executive Management Board 2.4 2.1
Other administrative costs 0.9 0.8
Total administrative costs 3.9 3.5
The Executive Management Board are granted short-term bonus
agreements contingent upon the fulfilment of the prerequisites,
goals and conditions defined in a bonus agreement and long-term
incentive programs. See Note 3.2 and 3.3 of the consolidated financial
statements. Management fee of 2.6 mEUR (2019: 2.1 mEUR) was
received by Nilfisk Holding A/S, and recognized in the income statement
as other income.
2. Fees to auditors elected at the
annual general meeting
EUR million 2020 2019
Deloitte
Statutory audit 0.1 0.1
Total 0.1 0.1
3. Financial items
EUR million 2020 2019
Foreign exchange gains 0.4 -
Interest to Group companies -1.1 -0.9
Total -0.7 -0.9
4. Tax
Tax recognized in the income statement
EUR million 2020 2019
Deferred tax 1.2 -0.6
Total 1.2 -0.6
Reported tax rate -64.1% 28.7%
Reconciliation of tax:
Calculated tax of 22.0% (2019: 22.0%) on loss before
income taxes -0.4 -0.7
Tax effect of:
Non-taxable income/non-deductible expenses 0.1 0.1
Tax assets valuation allowances 1.5 -
Total 1.2 -0.6
Deferred tax assets
EUR million 2020 2019
Deferred tax assets, January 1 1.4 0.7
Exchange rate adjustments -0.1 0.1
Deferred tax recognized in the income statement -1.2 0.6
Deferred tax assets, December 31 0.1 1.4
5. Proposed distribution of loss for the year
EUR million 2020 2019
Suggested distribution of loss for the year:
Loss attributable to shareholders of Nilfisk Holding A/S -3.2 -1.7
Proposed dividend - -
Total -3.2 -1.7
6. Investments in subsidiaries
EUR million 2020 2019
Carrying amount, January 1 215.5 215.6
Exchange rate adjustments 0.9 -0.1
Carrying amount, December 31 216.4 215.5
7. Prepayments
EUR million 2020 2019
Insurance - 0.1
Total - 0.1
8. Related parties
Transactions with affiliated undertakings comprise the following:
EUR million 2020 2019
Non-current interest-bearing loan from Nilfisk A/S 117.3 117.3
Receivables from Group companies 6.2 2.8
Management fee of 2.6 mEUR is included in the 6.2 mEUR as a net
receivable (2019: 2.8 mEUR).
Other matters of interest in relation to related parties are disclosed in
the notes to the consolidated financial statements.
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9. Contingent liabilities, securities
and contractual obligations
Nilfisk Holding A/S has issued guarantees in total of 7.4 mEUR
(2019: 10.5 mEUR), relating to rental contracts in subsidiaries.
Nilfisk Holding A/S and all its Danish subsidiaries are subject to
mandatory joint taxation. As the ultimate parent company in the Nilfisk
Group, Nilfisk Holding A/S acts as the administration company of the
joint taxation scheme and consequently settles all payments of tax with
the tax authorities. Joint taxation contributions to/from subsidiaries are
recognized under income tax related to net profit. Tax payable and tax
receivable are stated under current assets/liabilities.
Nilfisk Holding A/S is liable for obligations attributable to the activities,
assets and liabilities of NKT A/S that existed at the demerger September
11, 2017. The joint and several liabilities of Nilfisk Holding A/S and NKT
A/S respectively cannot exceed an amount corresponding to the net
value of the assets and liabilities. Nilfisk Holding A/S has entered into an
indemnification agreement with NKT A/S, under which each party has a
defined right of recourse with respect to any liabilities a party may incur
in respect of the other party under the joint and several liability.
10. Events after the balance sheet date
No events have occurred in the period from the balance sheet date until
the presentation of the financial statements that materially affect the
assessment of the financial statements of Nilfisk Holding A/S.
Note 9-10 Accounting policies
The financial statements for the parent company are included in
this Annual Report in pursuance of the requirements of the Danish
Financial Statements Act.
The financial statements for the parent company are prepared in
accordance with the Danish Financial Statements Act for accounting
class D companies.
The financial statement for the parent company 2020 covers the
period from January 1, 2020 to December 31, 2020 (January 1,
2019 to December 31, 2019).
The Annual Report is presented in EUR rounded to nearest EUR
1,000,000 with one decimal. The presentation currency is EUR as
the Nilfisk Group’s main business activities are EUR denominated
Description of accounting policies
In relation to the accounting policies described for the financial
statements of the Nilfisk Group (see Note 1.1 to the consolidated
financial statements), the accounting policies of the parent company
differ in the following:
Income from investments in subsidiaries
Dividends from investments in subsidiaries companies are
recognized in the income statement of the parent company in the
year the dividends are declared.
Investments in subsidiaries
Investments in subsidiaries are measured at costs. If there is
indication of impairment, impairment testing is carried out. Where
the carrying amount exceeds the recoverable amount it is written
down to the recoverable amount.
Tax
Nilfisk Holding A/S and all its Danish subsidiaries are subject to
mandatory joint taxation. As the ultimate parent company in
the Nilfisk Group, Nilfisk Holding A/S acts as the administration
company of the joint taxation scheme and consequently settles
all payments of tax with the tax authorities. Joint taxation
contributions to/from subsidiaries are recognized under income tax
related to net profit. Tax payable and tax receivable are stated under
current assets/ liabilities. Companies that use tax losses in other
companies pay joint taxation contributions to the parent company
equivalent to the tax base of the tax losses utilized. Companies
whose tax losses are used by other companies receive joint taxation
contributions from the parent company equivalent to the tax base
of the tax losses utilized (full absorption).
Cash flow statement
The parent company has in accordance with the Danish Financial
Statements Act, Section 86 (4) not prepared separate cash flow
statements. Please refer to the consolidated cash flow statements.
For the following notes, see information in the consolidated
financial statements:
• Remuneration – see Note 3 Remuneration
• Share capital – see Note 6.4 Share Capital
§
Accounting policy
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Management’s statement
Brøndby, March 3, 2021
Executive Management Board
Hans Henrik Lund Prisca Havranek-Kosicek
President and CEO CFO
Board of Directors
Jens Peter Due Olsen Anders Erik Runevad
Chairman Deputy Chairman
Jutta af Rosenborg René Svendsen-Tune
Thomas Schleicher Richard Parker Bisson
Are Dragesund Franck Falezan
Søren Giessing Kristensen Yvonne Markussen
Gerner Raj Andersen
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
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Opinion
Basis for opinion
Independent auditor’s report
Key audit matters
Consolidated financial statements Parent financial statements Management’s statement Independent auditor’s report
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Statement on the Management review
Management’s responsibilities for the consolidated financial
statements and the parent financial statements
Auditor’s responsibilities for the audit of the consolidated
financial statements and the parent financial statements
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Report on compliance with the ESEF Regulation
Copenhagen, March 3, 2021
Deloitte
Statsautoriseret Revisionspartnerselskab
Business Registration No 33 96 35 56
Kirsten Aaskov Mikkelsen Sumit Sudan
State-Authorized State-Authorized
Public Accountant Public Accountant
MNE no mne21358 MNE no mne33716
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Nilfisk’s Annual Report 2020 was published on March 3, 2021.
The report is also available at www.nilfisk.com.
Nilfisk Holding A/S, Kornmarksvej 1, DK-2605 Brøndby, Denmark.
Company reg. No. 38 99 88 70.
Investor Relations contact IR@nilfisk.com
