Exhibit 99.4
Unaudited financial statements of Jacob Holm as of June 30, 2021 and for the six-month periods ended June 30, 2021 and 2020 and the related notes thereto.
PMM Holding (Luxembourg) AG
Condensed consolidated income statement
For the 6-months period ended Jun 30, | ||||||||
2021 | 2020 | |||||||
EUR ’000 | unaudited | unaudited | ||||||
Revenue | 157.058 | 174.577 | ||||||
Cost of goods sold | 132.815 | 148.281 | ||||||
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Gross profit | 24.243 | 26.295 | ||||||
Sales and marketing expenses | 4.208 | 3.762 | ||||||
Administrative expenses | 10.292 | 9.560 | ||||||
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Operating profit | 9.743 | 12.974 | ||||||
Other operating income and expenses | (373 | ) | (68 | ) | ||||
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Profit before financial income and expenses and special items | 9.370 | 12.906 | ||||||
Special items, net | (1.232 | ) | (25 | ) | ||||
Financial income | 2.281 | 421 | ||||||
Financial expenses | (3.157 | ) | (4.208 | ) | ||||
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Profit before tax | 7.261 | 9.093 | ||||||
Tax on result for the year | 966 | 2.151 | ||||||
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Net profit for the year | 6.295 | 6.942 | ||||||
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PMM Holding (Luxembourg) AG
Condensed consolidated statement of comprehensive income
For the 6-months period ended Jun 30, | ||||||||
2021 | 2020 | |||||||
EUR ’000 | unaudited | unaudited | ||||||
Net profit for the period | 6.295 | 6.942 | ||||||
Other comprehensive income | ||||||||
Items that may be subsequently reclassified to income statement | ||||||||
Exchange adjustment, foreign companies | 651 | 198 | ||||||
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Total comprehensive income for the period | 6.947 | 7.140 | ||||||
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PMM Holding (Luxembourg) AG
Condensed consolidated balance sheet
Note | Jun 30, 2021 | Dec 31, 2020 | ||||||||||
EUR ’000 | unaudited | audited | ||||||||||
Assets | ||||||||||||
Intangible fixed assets | 5 | 4.654 | 4.434 | |||||||||
Land & Buildings | 6 | 27.614 | 27.450 | |||||||||
Plant and machinery | 6 | 69.193 | 67.807 | |||||||||
Other fixtures and fittings, tools and equipment | 6 | 1.972 | 1.674 | |||||||||
Property, plant and equipment under construction | 6 | 22.102 | 12.142 | |||||||||
Right of use assets | 4.977 | 5.680 | ||||||||||
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Property, plant and equipment | 125.858 | 114.754 | ||||||||||
Other receivables | 505 | 488 | ||||||||||
Deferred tax asset | 543 | 464 | ||||||||||
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Non-current assets | 131.560 | 120.140 | ||||||||||
Inventories | 35.333 | 24.235 | ||||||||||
Corporate tax | 454 | 499 | ||||||||||
Trade receivables | 27.033 | 32.387 | ||||||||||
Other receivables and prepayments | 4.232 | 7.707 | ||||||||||
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Receivables and others | 31.719 | 40.593 | ||||||||||
Cash at bank and in hand | 7.327 | 20.606 | ||||||||||
Current assets | 74.378 | 85.434 | ||||||||||
Total assets | 205.939 | 205.573 | ||||||||||
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PMM Holding (Luxembourg) AG
Condensed consolidated balance sheet
Note | Jun 30, 2021 | Dec 31, 2020 | ||||||||||
EUR ’000 | unaudited | audited | ||||||||||
Equity and liabilities | ||||||||||||
Equity | 24.125 | 23.908 | ||||||||||
Interest bearing liabilities | 7 | 5.327 | 131.394 | |||||||||
Provisions for other staff obligations | 1.748 | 1.521 | ||||||||||
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Non-current liabilities | 7.075 | 132.914 | ||||||||||
Current portion of interest bearing liabilities | 7 | 127.246 | 1.690 | |||||||||
Credit institutions | 11.528 | 9.930 | ||||||||||
Trade payables | 20.950 | 19.594 | ||||||||||
Payables, plant and machinery | 900 | 105 | ||||||||||
Payables due to group companies | 0 | 251 | ||||||||||
Corporate tax | 3.124 | 3.796 | ||||||||||
Other payables | 10.991 | 13.386 | ||||||||||
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Current liabilities | 174.738 | 48.751 | ||||||||||
Total liabilities | 181.814 | 181.665 | ||||||||||
Total equity and liabilities | 205.939 | 205.573 | ||||||||||
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PMM Holding (Luxembourg) AG
Condensed consolidated statement of changes in equity
Share capital | Share premium and similar premiums | Legal reserve | Exchange adj. | Retained earnings | Total | |||||||||||||||||||
EUR ’000 | unaudited | unaudited | unaudited | unaudited | unaudited | unaudited | ||||||||||||||||||
Equity at Jan 1, 2021 | 323 | 64.792 | 32 | 1.510 | (42.749 | ) | 23.908 | |||||||||||||||||
Comprehensive income for the period | 0 | 0 | 0 | 651 | 6.295 | 6.947 | ||||||||||||||||||
Dividends | 0 | 0 | 0 | 0 | (6.730 | ) | (6.730 | ) | ||||||||||||||||
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Equity at Jun 30, 2021 | 323 | 64.792 | 32 | 2.162 | (43.184 | ) | 24.125 | |||||||||||||||||
Equity at Jan 1, 2020 | 323 | 64.792 | 32 | 5.861 | (53.293 | ) | 17.715 | |||||||||||||||||
Comprehensive income for the period | 0 | 0 | 0 | 198 | 6.942 | 7.140 | ||||||||||||||||||
Dividends | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
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Equity at Jun 30, 2020 | 323 | 64.792 | 32 | 6.059 | (46.351 | ) | 24.855 | |||||||||||||||||
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Paid dividends per share in 2021 amounts to EUR 2,084 (EUR 0 in 2020).
PMM Holding (Luxembourg) AG
Condensed consolidated statement of cash flows
For the 6-months period ended Jun 30, | ||||||||
2021 | 2020 | |||||||
EUR ’000 | unaudited | unaudited | ||||||
Ordinary result before tax | 7.261 | 9.093 | ||||||
Non-cash adjustments | 3.724 | 6.265 | ||||||
Corporation tax paid | (1.616 | ) | (394 | ) | ||||
Change in inventories | (11.168 | ) | (1.012 | ) | ||||
Change in receivables | 7.113 | (10.320 | ) | |||||
Change in suppliers etc. | (956 | ) | 3.462 | |||||
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Cash flows from operating activities | 4.357 | 7.095 | ||||||
Property, plant and equipment and intangible fixed assets, net | (12.066 | ) | (7.058 | ) | ||||
Purchase of financial fixed assets | (7 | ) | 1 | |||||
Change in payables, plant and machinery | 782 | (116 | ) | |||||
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Cash flows from investing activities | (11.291 | ) | (7.173 | ) | ||||
Change in non-current liabilities | (844 | ) | (859 | ) | ||||
Change in credit institutions | 1.599 | 4.025 | ||||||
Change in accounts with related and group companies | (251 | ) | (999 | ) | ||||
Paid out dividend | (6.730 | ) | 0 | |||||
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Cash flows from financing activities | (6.226 | ) | 2.167 | |||||
Change in cash and cash equivalents | (13.160 | ) | 2.089 | |||||
Cash and cash equivalents, net at beginning of the period | 20.606 | 13.935 | ||||||
Exchange adjustment of cash at bank and in hand, net at beginning of the period | (119 | ) | 67 | |||||
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Cash and cash equivalents, net at the end of the period | 7.327 | 16.090 | ||||||
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Cash-flow related to non-recourse factoring is presented in change in working capital as part of cash-flow from operations. Cash-flow related to recourse factoring is presented as change in credit institutions in cash-flow from financing activities.
PMM Holding (Luxembourg) AG
Notes to the Interim Report
1 Reporting entity
PMM Holding (Luxembourg) AG is domiciled in Luxembourg. These condensed unaudited consolidated interim financial statements as at and for the six months ended June 30, 2021 comprise the Company and its subsidiaries (together the “Group”). The Group is primarily involved in manufacturing nonwoven fabrics for a wide range of applications in the consumer wipes, industrial wipes, hygiene, beauty care and health care segments. The Company’s functional currency is Euro (EUR).
2 Basis of preparation
(a) Statement of compliance
These interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as issued by the IASB. They do not include all the information required for a complete set of IFRS financial statements. Any events and transactions that are significant to an understanding of the changes in the Group’s financial position and performance since the last annual consolidated financial statements as at and for the financial year ended December 31, 2020 are disclosed in these financial statements.
(b) Judgments and estimates
In preparing these interim financial statements, Management makes judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.
The significant judgements made by Management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements as at and for the financial year ended December 31, 2020.
3 Significant accounting policies
The accounting policies applied in these interim financial statements are the same as those applied in the Group’s consolidated financial statements as at and for the financial year ended December 31, 2020.
4 Subsequent events
After the balance sheet date, the Company announced that the shareholders of PMM Holding (Luxembourg) AG entered into a definitive agreement to transfer control of the Group to US based Glatfelter Corp. (NYSE: GLT). The agreement is subject to customary conditions, including regulatory approvals. Closing is expected to take place in the second half of 2021.
There has been no material adverse change to the financial condition of the Group after the balance sheet date.
PMM Holding (Luxembourg) AG
Notes to the Interim Report—(Continued)
5 Intangible fixed assets
Goodwill | Customer lists, know-how, patents, licences | Software | Intangible fixed assets under construction | |||||||||||||
EUR ’000 | unaudited | unaudited | unaudited | unaudited | ||||||||||||
Cost at Jan 1, 2021 | 43 | 4.823 | 10.879 | 552 | ||||||||||||
Exchange adjustment | 0 | (53 | ) | (38 | ) | (6 | ) | |||||||||
Additions for the period | 0 | 0 | 19 | 596 | ||||||||||||
Transfer between items | 0 | 53 | 337 | (390 | ) | |||||||||||
Disposals for the period | 0 | 0 | 0 | 0 | ||||||||||||
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Cost at Jun 30, 2021 | 43 | 4.823 | 11.197 | 752 | ||||||||||||
Amortisation at Jan 1, 2021 | 43 | 2.544 | 9.276 | 0 | ||||||||||||
Exchange adjustment | 0 | (27 | ) | (37 | ) | 0 | ||||||||||
Amortisation for the period | 0 | 176 | 186 | 0 | ||||||||||||
Disposals for the period | 0 | 0 | 0 | 0 | ||||||||||||
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Amortisation at Jun 30, 2021 | 43 | 2.693 | 9.425 | 0 | ||||||||||||
Carrying amount at Jun 30, 2021 | 0 | 2.130 | 1.772 | 752 | ||||||||||||
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Amortised over | 10 years | 3-10 years | ||||||||||||||
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6 Property, plant and equipment
Land and buildings | Plant and machinery | Other fixtures and fittings, tools and equipment | PPE under construction | |||||||||||||
EUR ’000 | unaudited | unaudited | unaudited | unaudited | ||||||||||||
Cost at Jan 1, 2021 | 50.722 | 187.059 | 9.713 | 12.143 | ||||||||||||
Exchange adjustment | 1.081 | 4.064 | 120 | 280 | ||||||||||||
Additions for the period | 0 | 649 | 241 | 12.712 | ||||||||||||
Transfer between items | 171 | 2.516 | 346 | (3.033 | ) | |||||||||||
Disposals for the period | 0 | (951 | ) | (228 | ) | 0 | ||||||||||
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Cost at Jun 30, 2021 | 51.974 | 193.337 | 10.192 | 22.102 | ||||||||||||
Depreciation at Jan 1, 2021 | 23.272 | 119.252 | 8.039 | 0 | ||||||||||||
Exchange adjustment | 405 | 2.317 | 106 | 0 | ||||||||||||
Depreciation for the period | 683 | 3.029 | 303 | 0 | ||||||||||||
Disposals for the period | 0 | (454 | ) | (228 | ) | 0 | ||||||||||
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Depreciation at Jun 30, 2021 | 24.360 | 124.144 | 8.220 | 0 | ||||||||||||
Carrying amount at Jun 30, 2021 | 27.614 | 69.193 | 1.972 | 22.102 | ||||||||||||
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Amortised over | 30-50 years | 5-20 years | 3-10 years | |||||||||||||
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The Group continued the implementation of its long-term investment program (Project Boost) for accelerated growth of the capacity and capabilities of its production platform. The program was started in 2019 and will stretch into 2022. The total Project Boost related additions in the first half of 2021 amounts to approx. EUR 10 million.
PMM Holding (Luxembourg) AG
Notes to the Interim Report—(Continued)
7 Interest bearing liabilities
Non-current and current interest-bearing liabilities is made up of the issued Bond and lease liabilities.
As of June 30, 2021 the split and maturity is as follows:
2021 | 2022 | 2023 | After | Total | ||||||||||||||||
EUR ’000 | unaudited | unaudited | unaudited | unaudited | unaudited | |||||||||||||||
Bond | 0 | 127.500 | 0 | 0 | 127.500 | |||||||||||||||
Lease liabilities | 882 | 1.633 | 709 | 2.103 | 5.327 | |||||||||||||||
Financing costs | (169 | ) | (85 | ) | 0 | 0 | (254 | ) | ||||||||||||
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713 | 129.048 | 709 | 2.103 | 132.573 | ||||||||||||||||
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The Bond matures in full on March 31, 2022. The Company may redeem the bond issue in whole or in part at any time. The redemption price is:
March 2021 to September 2021 | 100.75% of par value | |
From September 2021 | 100.00% of par value |
A change of control triggers a Put Option Event, which gives the Bondholders the right to require that the Issuer purchases all or some of the Bonds held by the Bondholder at a price equal to 101 per cent of the Nominal Amount plus accrued and unpaid interest.
The bonds are subject to minimum liquidity and a net debt / EBITDA ratio covenant testing in case of an Incurrence Event. An Incurrence Event can be either a dividend distribution above the permitted minimum distribution of EUR 7 million and/or the incurrence of financial indebtedness.
8 Segment information
The internal reporting framework used for reporting on revenue and expenses to the Executive Management and the Board of Directors has been set up to reflect and report on the global functional responsibility setup at the Company.
These are voluntary disclosures to show revenue and EBITDA per business area.
The Group’s global functional responsibility is divided into two segments:
(1) | The Jacob Holm Industries segment produces and sells non-woven roll-goods. |
(2) | The Sontara segment produces and sells non-woven in converted and roll-goods form. |
(3) | Other consists of the holding and management companies PMM Holding (Luxembourg) AG, Jacob Holm & Sons AG, Jacob Holm & Sønner Holding A/S and Jacob Holm & Sønner A/S. |
PMM Holding (Luxembourg) AG
Notes to the Interim Report—(Continued)
For the 6-months period ended Jun 30, | ||||||||
2021 | 2020 | |||||||
EUR ’000 | unaudited | unaudited | ||||||
Revenue | ||||||||
Jacob Holm Industries | 78.962 | 76.514 | ||||||
Sontara | 78.142 | 98.055 | ||||||
Other | 4.706 | 5.320 | ||||||
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161.811 | 179.889 | |||||||
Elimination of internal sales | (4.752 | ) | (5.313 | ) | ||||
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Group | 157.058 | 174.577 | ||||||
EBITDA | ||||||||
Jacob Holm Industries | 6.479 | 1.550 | ||||||
Sontara | 7.735 | 15.657 | ||||||
Other | 809 | 1.746 | ||||||
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Group | 15.022 | 18.953 | ||||||
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Eliminated internal sales mostly comprise royalty and management fee charges made from the holding and management companies to the two segments as well as a minor revenue between the two segments.
Due to the nature of the business of the Group, there is typically no seasonality during a financial year.
9 Transactions with related parties
Besides intercompany transactions that have been eliminated in the Consolidated Income Statement, related party transactions comprise interest expense charged by the related party Ammon Ammon AG and management fee charges to and rental charges from the related party Dønnerup A/S.
The Group has been charged interest expenses of EUR 7k from Ammon Ammon AG (EUR 52k for year-to-date 2020) for the year-to-date.
The Group has charged management services in the amount of EUR 44k (EUR 44k for year-to-date 2020) to Dønnerup A/S for the year-to-date. Dønnerup A/S has charged rental expenses in the amount of EUR 48k (EUR 47k for year-to-date 2020) for the year-to-date.
Basis | ||
Controlling interest | ||
Poul M. Mikkelsen, Büelweg 9, CH-6442 Gersau | Controlling shareholder | |
Martin Mikkelsen, Rosenvængets Allé 33, DK-2100 København Ø. | Shareholder | |
Ammon Ammon AG, Meierhofstrasse 5, FL-9490 Vaduz | Parent company |