Study on State asset management in the EU€¦ · 1 For Denmark, the promotional bank Vækstfonden was considered for this Study but since our Source (Orbis) did not report any data,

Written by KPMG and Bocconi University February 2018

Study on State asset management in the EU

Final study report for Pillar 1 – Denmark

Contract: ECFIN/187/2016/740792

EUROPEAN COMMISSION

Directorate-General for Economic and Financial Affairs Directorate Fiscal policy and policy mix and Directorate Investment, growth and structural reforms European Commission B-1049 Brussels

Denmark

1. PSHS IN THE DANISH ECONOMY

This Country fiche presents a quantitative overview of the mix of equity owned by the

Danish General Government.

The Danish Government has stakes in 399 firms1, and the large majority of these are

under full ownership and Government control. The Government also owns 14 listed

companies.

The contribution PSHs make to the Danish economy ranges from 0.8% of Employment

to 4% of domestic stock Market capitalization. The 59 PSHs operating in the Financial

services sector also have a marginal role in their industry, with impact, across the main

impact measures, on average, equivalent to less than 1%.

Figure 1 Breakdown of PSHs by level of ownership, 2015

Source: KPMG and Bocconi University calculations on Orbis (BvD) database

Figure 2 Breakdown of PSHs with no ownership data by sector, 2015

1 For Denmark, the promotional bank Vækstfonden was considered for this Study but since our Source (Orbis) did not report any data, it was not included in the sample.

385

173

36

57

105

0

50

100

150

200

250

300

350

400

n°

of PSH

s

147

Influential

62(15.5%)

5

Level of ownershipNO DATA on shareholders

stakes

105(26.3%)

0

Minority

21(5.3%)

Control

38(9.5%)

2

Fully public

173(43.4%)

Total

399(100%)

14

UnlistedListed

0

5

10

15

20

25

30

35Nr

Country fiches

Denmark

4

Source: KPMG and Bocconi University calculations on Orbis (BvD) database

Figure 3 Breakdown of PSHs’ total assets by level of ownership, 2015, weighted

Source: KPMG and Bocconi University calculations on Orbis (BvD) database. (1) Values have been weighted by stake(s) owned by the Public sector into PSHs.

Figure 4 Non-financial PSHs contribution to the Danish economy, 2015, weighted

422

121

8

991

207

15,000

5,000

0

25,000

20,000

10,000

30,000

55,000

40,000

50,000

35,000

45,000

Weig

hte

dassets

(Mn E

ur)

Minority

1,621(3.0%)

Control

15,388(28.0%)

841

2,396

9,995

Fully public

37,408(68.1%)

Level of ownership

12,512

Total

54,927(100.0%)

26,280

14,916

24,896

2,513

232

Influential

150

510(0.9%)

11,218

Non-financial unlistedFinancial unlistedNon-financial listedFinancial listed

Country fiches

Denmark

5

Source: KPMG and Bocconi University calculations on Orbis (BvD) database; Eurostat. (1) Values have been weighted by stake(s) owned by the Public sector into PSHs. Value added has been scaled

by GDP (GDP data retrivied from Eurostat). (2) Market capitalization is considered only for listed companies while shareholders’ funds are considered only

for unlisted companies. (3) Market capitalization is reported as of 6th March 2017.

Figure 5 PSHs contribution to the national financial sector, 2015, weighted

Source: KPMG and Bocconi University calculations on Orbis (BvD) database; Eurostat (1) Values have been weighted by stake(s) owned by the Public sector into PSHs. (2) Market capitalization is considered only for listed companies while shareholders’ funds are considered only

for unlisted companies. (3) Market capitalization is reported as of 6th March 2017.

1.1. Distribution of Non-financial PSHs by sector

The most relevant sectors across most measures of economic impact are Electricity (D),

Water supply (E) and Professional, scientific and technical activities (M). The relevance

Rest of the Economy PSHs Fully public Control Influential Minority

Rest of the Economy PSHs Fully public Control Influential Minority

Country fiches

Denmark

6

of the Electricity sector (D) is significant for all impact measures, accounting on average

for 20% of the sector as a whole in terms of Assets.

Figure 5 Distribution of Non-financial PSHs by sector, 2015, unweighted

Source: KPMG and Bocconi University calculations on Orbis (BvD) database.

0

10

20

30

40

50

0

3,000

6,000

9,000

12,000

15,000

% of industryMn Eur Total assets

PSHs Share of PSHs in the industry

0

10

20

30

40

50

0

1,000

2,000

3,000

4,000

5,000

% of industryNr Number of employees


0

10

20

30

40

50

0

2,000

4,000

6,000

8,000

% of industryMn Eur Operating revenues


0

10

20

30

40

50

0

500

1,000

1,500

2,000

2,500

D-Elect. H-Trans. C-Manu. J-Info F-Constr.

% of industryMn Eur Value added


Country fiches

Denmark

7

(1) A - Agriculture, forestry and fishing; B - Mining and quarrying; C – Manufacturing; D - Electricity, gas, steam and air conditioning supply; E - Water supply, sewerage, waste management and remediation activities; F – Construction; G - Wholesale and retail trade, repair of motor vehicles and motorcycles; H - Transportation and storage; I - Accommodation and food service activities; J - Information and communication; L - Real estate activities; M - Professional, scientific and technical activities; N - Administrative and support service activities; O - Public administration and defence, compulsory social security; P – Education; Q - Human health and social work activities; R - Arts, entertainment and recreation; S - Other service activities; T - Activities of households as employers, undifferentiated goods- and services-producing activities of households for own use; U - Activities of extraterritorial organisations and bodies

(2) Some sectors are not represented in the graphs above, because of two different, mutually excluding reasons; either because no data on those particular sectors are available in our database; or because there are no PSHs operating in those particular sectors in this country.

(3) Values have been weighted by stake of public ownership of the PSHs.

2. FINANCIAL PERFORMANCE OF PSHS AND MARKET ATTRACTIVENESS

2.1. Non-financial PSHs

At a broader level, the aggregate operating performance of the Danish PSHs features a

higher level of profitability, measured in terms of EBITDA, with respect to firms under

Government control, but a lower ROA.

Labor costs, relatively to Revenues, show a mixed scenario: majority-owned companies

seem to be in line with the Industry, whereas the minority-owned companies exhibit

significantly higher values.

All main sectors where PSHs operate show high profitability and strong sales growth.

Across key sectors of PSHs activity, high profitability is reported in the fully public cluster

limited to PSHs operating in the Transportation sector (H). For the other sectors, the

only discernible pattern is a general higher incidence of Cost of labour relative to

Revenues than Industry counterparts.

Figure 6 Performance indicators of Non-financial PSHs in comparison to the national

economy, 2011–2015, yearly averages

Source: KPMG and Bocconi University calculations on Orbis (BvD) database.

0

5

10

15

20

25

30

35

40

2011 2012 2013 2014 2015

% EBITDA Margin (%)

-3

-2

-1

0

1

2

3

4

5

6

2011 2012 2013 2014 2015

% ROA (%)

0

10

20

30

40

50

2011 2012 2013 2014 2015

%Labour costs as % of

operating revenues

0

40

80

120

160

200

2011 2012 2013 2014 2015

% Debt to Equity ratio (%)

Whole economyPSHs with stake ≤ 50% PSHs with stake > 50%

Country fiches

Denmark

8

Figure 7 National market attractiveness of Non-financial PSHs, 2015

Source: KPMG and Bocconi University calculations on Orbis (BvD) database, 2015 [downloaded in December 2016]. (1) The Figure shows only the top 5 markets with the largest contribution to the Gross Domestic Product in

terms of Value Added generated by PSHs. Values of Value Added have been weighted by stake(s) owned by the Public sector into PSHs.

(2) The right upper quadrant identifies sectors with high profitability and positive growth, whereas the sectors with low profitability and negative growth tend to be located further down in the left lower quadrant.

(3) Revenue growth rates have been calculated using the Compound Annual Growth Rate of 2011-2015 values; for Value Added and EBITDA margin the value of 2015. For Revenue growth rates estimation, only companies with turnover higher than 50 Mn € are considered.

Figure 8 Profitability profile of Non-financial PSHs by sector and level of ownership,

2015, unweighted

Source: KPMG and Bocconi University calculations on Orbis (BvD) database, 2015 [downloaded in December 2016]. (1) Some PSHs clusters may not be represented in the graphs above, because of two different, mutually

excluding reasons; either because no data on those particular clusters are available in our database; or because there are no PSHs belonging to those particular PSHs clusters.

-10

-5

0

5

10

15

20

25

30

35

40

45

-20,0 -15,0 -10,0 -5,0 0,0 5,0 10,0 15,0 20,0

J - Information and communication

F - Construction

H - Transportation and storage

C - Manufacturing

D - Electricity, gas, steam and air conditioning supply

EBITDA margin Industry (%)

CAGR Revenues 2011-2015 (%)

Positive GrowthHigh profitability

Positive GrowthLow profitability

Negative GrowthLow profitability

Negative GrowthHigh profitability

The size of the bubbles shows weighted value added generated by PSHs scaled by GDP

0

5

10

15

20

25

30

35

40

45

50

D - Electricity,gas, steam andair conditioning

supply

C -Manufacturing

H -Transportationand storage

F - Construction J - Informationand

communication

% EBITDA Margin (%)

Fully public Control Influential Minority Industry

-10

-5

0

5

10

15


supply

C -Manufacturing



communication

%ROA (%)


Country fiches

Denmark

9

Figure 9 Operating efficiency of Non-financial PSHs, 2015, unweighted



Figure 10 The leverage of Non-financial PSHs, 2015, unweighted



2.1. Financial PSHs

PSHs operating in the Banking sector show, on average, higher performance values than

the Industry in terms of ROE. Danish PSHs controlled by the Government tend to be

burdened by Non-performing Loans and more financially fragile than the Industry as a

whole. The rest of the PSHs operating in the Financial sector performs in line with

benchmarks. The other state-owned financial institutions operating in Denmark tend to

generate lower net profitability than Industry peers.

0

10

20

30

40

50

60


supply

C -Manufacturing



communication

% Labour costs as % of revenues


0

50

100

150

200

250


supply

C -Manufacturing



communication

% Debt to Equity ratio (%)


Country fiches

Denmark

10

Figure 11 Relevant KPIs for PSHs in the Banking sector in Denmark, 2015,

unweighted

Source: KPMG and Bocconi University calculations on Orbis (BvD) database, 2015 [downloaded in December 2016].

(1) Some PSHs clusters may not be represented in the graphs above, because of two different, mutually excluding reasons; either because no data on those particular clusters are available in our database; or

because there are no PSHs belonging to those particular PSHs clusters.

Figure 12 Relevant KPIs for Other financial PSHs, 2015, weighted



3. PUBLIC FINANCE EFFECTS OF PSHS

At an aggregate level, PSHs generate profits which are almost equal to losses. In 2015,

PSHs generated a slightly negative net income worth about 150 Mn Euro. Total assets

IndustryFully public Control Influential Minority

IndustryFully public Control Influential Minority

Country fiches

Denmark

11

account for 29.5% of the size of the national GDP, and the net financial position of PSHs

is positive, with more than 54 Bn Euro of net worth (about 38 Bn Euro considering the

weighted net worth). The distributed dividends and outstanding liabilities represent

0.2% and 31% of the Danish GDP respectively.

Table 1 Public Finance Effects of PSHs, 2015, unweighted

Source: (a) Orbis data (values not weighted for stake of public ownership) and (c) Eurostat. Data retrieved on 19th September 2017. (b) Net Worth value has been weighted by stake(s) owned by the Public sector into PSHs. (d) Total outstanding liabilities of government controlled entities classified outside general government are

considered. (e) Figures in red represent negative numbers.

Country fiches

Denmark

Appendix I Denmark

Table A Breakdown of PSHs’ total assets by level of ownership, 2015, weighted

Source: KPMG and Bocconi University calculations on Orbis (BvD) database. (1) Values have been weighted by stake(s) owned by the Public sector into PSHs.

Table B Non-financial PSHs contribution to the Danish economy, 2015

Source: KPMG and Bocconi University calculations on Orbis (BvD) database. (*) Absolute value. (1) Values have been weighted by stake(s) owned by the Public sector into PSHs. Value added has been scaled

by GDP (GDP data retrivied from Eurostat). (2) Market capitalization is considered only for listed companies while shareholders’ funds are considered only

for unlisted companies. (3) Market capitalization is reported as of 6th March 2017. (4) It must be noted that the total number of PSHs (sum of Number of PSHs Table B and Table C) is lower

than the overall number of PSHs reported earlier in Figure 1, due to missing data on PSHs’ shareholders’ stakes.

Table C PSHs contribution to the national financial sector, 2015, weighted

Source: KPMG and Bocconi University calculations on Orbis (BvD) database. (*) Absolute value. (1) Values have been weighted by stake(s) owned by the Public sector into PSHs. (2) Market capitalization is considered only for listed companies while shareholders’ funds are considered only

for unlisted companies. (3) Market capitalization is reported as of 6th March 2017. (4) It must be noted that the total number of PSHs (sum of Number of PSHs Table B and Table C) is lower

than the overall number of PSHs reported earlier in Figure 1, due to missing data on PSHs’ shareholders’ stakes.

Data in Mn Eur

Ownership cluster Unlisted Listed Total Unlisted Listed Total

Fully Public 24,896 - 24,896 12,512 - 12,512

Control 841 9,995 10,836 2,396 2,156 4,552

Influential 422 991 1,414 0 207 207

Minority 121 232 352 8 150 158

Total 26,280 11,218 37,498 14,916 2,513 17,429

Non-financial Financial

Non-financial PSHsNumber

of PSHs

of which

listed

Employees

(%)

Total assets

(%)

Revenues

(%)

Value added

(%)

Market cap

(%)

Shareholders'

funds (%)

Fully Public 131 0 0.3 2.2 0.8 0.0 0.0 3.4

Control 31 1 0.2 1.0 1.1 0.7 2.8 0.1

Influential 56 4 0.2 0.1 0.2 0.1 1.0 0.1

Minority 17 6 0.1 0.0 0.1 0.0 0.2 0.0

PSHs' share to the total economy 235(*) 11(*) 0.8 3.3 2.1 0.9 4.0 3.6

Financial PSHsNumber

of PSHs

of which

listed

Employees

(%)

Total assets

(%)

Revenues

(%)

Market cap

(%)

Shareholders'

funds (%)

Fully Public 42 0 0.2 0.5 0.5 0.0 2.1

Control 7 1 0.1 0.2 0.1 0.4 0.4

Influential 6 1 0.0 0.0 0.0 0.1 0.0

Minority 4 1 0.0 0.0 0.0 0.1 0.0

PSHs' share to the total economy 59(*) 3(*) 0.3 0.7 0.7 0.6 2.4

Table D PSHs distribution by sector, 2015, weighted

Source: KPMG and Bocconi University calculations on Orbis (BvD) database, 2015 [downloaded in December 2016]. (a) Other financial institutions category includes all PSHs which are classified within the NACE K sector other

than banks and insurance. (1) NACE sectors “T - Activities of households as employers; undifferentiated goods-and services-producing

activities of households for own use” and “U - Activities of extraterritorial organisations and bodies” are not reported here, since they lack comprehensive financial data, and therefore the aggregate value reported in Figure 4 might slight differ.

(2) For Banks, the value of “total assets” corresponds to the “total earning assets”, and “Operating revenues” corresponds to “Interest and other operating revenues”.

(3) For Insurance, the value of “operating revenues” corresponds to the “net premium written”. (4) For Insurance, the latest available data refers to the year 2014. (5) The total number of PSHs reported here does not match the total number reported in Figure 1, because

companies for which no data on ownership level and/or financial information were available have been excluded.

(6) Values have been weighted by stake(s) owned by the Public sector into PSHs. n.a.=not available

Sector

Average

public

ownership

Total

Sector

Value

Added

Year 2015

of

which

listed

Average % Mn Eur% of

sectorNr

% of

sectorMn Eur

% of

sectorMn Eur

% of

sectorMn Eur

A - Agriculture, forestry and fishing 6 0 25.3 3 0.0 14 0.2 4 0.2 n.a. n.a. -33

C - Manufacturing 9 7 10.3 681 0.5 3,408 0.8 732 0.6 284 1.2 24,523

D - Electricity, gas, steam and air conditioning supply 21 1 95.3 12,263 18.1 3,803 10.8 6,767 15.6 2,185 31.6 6,920

E - Water supply; sewerage, waste management and remediation

activities44 0 99.5 7,593 29.3 1,157 16.8 625 19.4 n.a. n.a. n.a.

F - Construction 5 1 58.1 168 0.8 406 0.6 104 0.8 34 4.1 827

G - Wholesale and retail trade; repair of motor vehicles and

motorcycles2 0 100.0 840 0.7 2,010 0.6 954 0.7 n.a. n.a. 428

H - Transportation and storage 15 1 67.0 3,957 5.9 2,813 2.4 605 1.2 160 7.2 2,232

I - Accommodation and food service activities 3 0 33.0 2 0.0 25 0.1 n.a. n.a. n.a. n.a. 65

J - Information and communication 12 1 36.0 561 1.6 1,753 2.1 495 2.6 12 0.5 2,454

L - Real estate activities 19 0 41.1 369 0.1 171 0.6 125 0.9 n.a. n.a. 234

M - Professional, scientific and technical activities 33 0 82.6 9,692 12.9 1,344 0.7 908 2.2 n.a. n.a. 112

N - Administrative and support service activities 9 0 54.3 426 0.5 142 0.0 28 0.0 n.a. n.a. 21,666

O - Public administration and defence; compulsory social security 6 0 59.2 108 3.1 10 0.1 11 n.a. n.a. n.a. -511

R - Arts, entertainment and recreation 5 0 64.6 262 9.1 299 4.6 468 33.3 n.a. n.a. 111

NON-FINANCIAL 189 11 70.5 36,925 3.4 17,356 0.8 11,827 2.2 2,675 4.5 58,984

BANKS 3 3 39.6 2,513 0.1 456 0.0 125 0.0 n.a. n.a. n.a.

INSURANCE n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

OTHER FINANCIAL INSTITUTIONS(a) 56 0 86.2 14,916 0.6 3,503 0.3 1,837 0.7 n.a. n.a. n.a.

Number of

PSHsTotal assets Number of employees Operating revenue Value added

14

Table E Top 20 PSHs by Total assets, 2015, weighted

Source: KPMG and Bocconi University calculations on Orbis (BvD) database (1) Values have been weighted by

Company name Listed/Unlisted IndustryOwnership

stake

Total assets

(Mn EUR)

DONG ENERGY A/S Listed D - Electricity, gas, steam and air conditioning supply 50.4 9,995

SUND OG BALT HOLDING A/S Unlisted M - Professional, scientific and technical activities 100.0 5,845

HOFOR FORSYNING HOLDING P/S Unlisted K - Financial and insurance activities 100.0 3,826

METROSELSKABET I/S Unlisted H - Transportation and storage 100.0 2,328

VESTJYSK BANK A/S Listed K - Financial and insurance activities 80.6 2,156

AARHUS VAND A/S UnlistedE - Water supply; sewerage, waste management and

remediation activities100.0 1,387

AALBORG VAND HOLDING A/S Unlisted M - Professional, scientific and technical activities 100.0 893

VANDCENTER SYD HOLDING A/S Unlisted K - Financial and insurance activities 77.0 882

HMN NATURGAS I/S Unlisted D - Electricity, gas, steam and air conditioning supply 100.0 705

FORS HOLDING A/S Unlisted K - Financial and insurance activities 81.0 653

ROYAL GREENLAND A/S UnlistedG - Wholesale and retail trade; repair of motor vehicles

and motorcycles100.0 538

SILKEBORG FORSYNING A/S Unlisted K - Financial and insurance activities 100.0 533

HJORRING VANDSELSKAB A/S UnlistedE - Water supply; sewerage, waste management and

remediation activities100.0 510

HOVEDSTADENS LETBANE I/S Unlisted H - Transportation and storage 100.0 501

FREDERIKSHAVN FORSYNING A/S Unlisted D - Electricity, gas, steam and air conditioning supply 100.0 497

RANDERS SPILDEVAND A/S UnlistedE - Water supply; sewerage, waste management and

remediation activities100.0 485

COPENHAGEN AIRPORTS A/S Listed H - Transportation and storage 33.0 474

LOLLAND ENERGI HOLDING A/S Unlisted K - Financial and insurance activities 100.0 460

FJERNVARME FYN A/S Unlisted K - Financial and insurance activities 90.0 457

FORSYNING HELSINGOR A/S Unlisted K - Financial and insurance activities 100.0 444

Documents

Study on State asset management in the EU€¦ · 1 For Denmark, the promotional bank Vækstfonden was considered for this Study but since our Source (Orbis) did not report any data,