Tessenderlo Group 2021 annual report | 1
PB
Tessenderlo Group 2021 annual report | 2
Table of contents
Company profile 3
ACTIVITY REPORT
2021 highlights 6
Message from the CEO and the Chairman to the shareholders 9
Key figures at a glance 12
Our Agro segment 16
Our Bio-valorization segment 21
Our Industrial So165lutions segment 25
Our T-Power segment 29
Information for shareholders 31
MANAGEMENT REPORT
Business progress 34
Risk analysis 36
Corporate governance statement 42
SUSTAINABILITY REPORT
Sustainability and CSR at Tessenderlo Group 63
Materiality analysis 67
Governance of CSR 69
Sustainable Development Goals of the United Nations 70
Our employees 73
Our planet 85
Our community 99
KPIs 102
GRI index 107
FINANCIAL REPORT
Consolidated financial statements 110
Statement on the true and fair view of the consolidated financial
statements and the fair overview of the management report 189
Statutory auditor's report 190
Statutory financial report 197
Financial glossary 200
Alternative performance measures 202
Tessenderlo Group 2021 annual report | 3
Company profile
With a history that dates back to 1919, Tessenderlo Group has evolved over recent years from a chemical
company into a diversified industrial group that focuses on agriculture, valorizing bio-residuals, energy,
and providing industrial solutions with a focus on water.
With more than 4,800 people working at over one hundred locations across the globe, Tessenderlo Group
is a leader in most of its markets. We primarily serve customers in agriculture, food, industry, construction
and health and consumer goods end markets.
Tessenderlo Group’s activities are subdivided into four operating segments:
The Agro segment combines our activities in the
production, trading and marketing of crop nutrition
(liquid crop fertilizers and potassium sulfate fertilizers
based on sulfur) as well as crop protection products. The
Agro segment includes the Crop Vitality™, Tessenderlo
Kerley International and NovaSource® business units.
Our activities in animal by-product processing are
combined in the Bio-valorization segment. This consists
of PB Leiner (the production, trading and sales of gelatins
and collagen peptides) and Akiolis (the rendering,
production and sales of proteins and fats).
The Industrial Solutions segment includes products,
systems and solutions for the processing and treatment
of water, including flocculation and precipitation. The
Industrial Solutions segment includes DYKA Group (with
DYKA, JDP and BT Nyloplast), Kuhlmann Europe and
moleko™.
The T-Power segment includes the activities of
Tessenderlo Group regarding the generation of
electricity, in particular, the 425 MW CCGT power
plant (Combined Cycle Gas Turbine) of T-Power.
Tessenderlo Group 2021 annual report | 4
Tessenderlo Group is marketing its products and services worldwide, with branches all over the world,
through its four segments.
Agro
Crop Vitality | NovaSource: 12 production plants and 1 scheduled for construction, and more than 100
terminals (US).
Tessenderlo Kerley International: production plants in Belgium (1), France (1), Turkey (1), and 1 scheduled
for construction (the Netherlands), and 10 terminals in Europe and Mexico.
Bio-valorization
PB Leiner: 3 production plants in Europe (Belgium, Germany, UK), 1 in China and 3 in the Americas (US,
Argentina, Brazil).
Akiolis (France): 3 production plants, 28 collection centers (C1/C2 categories) and 8 production plants, 20
collection centers (C3 category & food grade) and 1 production plant (Violleau).
Industrial Solutions
DYKA Group: 8 production plants (2 in the Netherlands, 1 in Belgium, 2 in France, 1 in Germany, 1 in
Poland and 1 in Hungary) and more than 70 branches in Europe.
Kuhlmann Europe: 4 production plants (2 in Belgium, 1 in France and 1 in Switzerland).
moleko: 3 production plants (US).
T-Power
T-Power: 1 production plant (Belgium).
Tessenderlo Group realized a consolidated turnover of 2.1 billion EUR in 2021. The company is listed on
Euronext Brussels and is part of the Next 150 and BEL Mid indices. Financial news sources: Bloomberg:
TESB BB – Reuters: TesB.BR – Datastream: B:Tes.
Disclaimer
This document may contain forward-looking statements. Such statements reflect the views of management regarding future events at the date
of this document. Furthermore, they involve known and unknown risks, uncertainties and other factors that may cause actual results to be different
from any results, performance or achievements expressed or implied by such forward-looking statements. Tessenderlo Group provides the
information in this document as at the date of publication and, subject to applicable legislation, does not undertake any obligation to update,
clarify or correct any forward-looking statements contained in this document in light of new information, future events or otherwise. Tessenderlo
Group disclaims any liability for statements made or published by third parties (including any employees who are not explicitly mandated by
Tessenderlo Group) and, subject to applicable legislation, does not undertake any obligation to correct inaccurate data, information, conclusions
or opinions published by third parties in relation to this or any other document it issues.
Tessenderlo Group 2021 annual report | 5
Tessenderlo Group 2021 annual report | 6
2021 highlights
In March 2021, Tessenderlo Kerley International (Agro
segment) announced the construction of a new Thio-Sul®
(ammonium thiosulfate) manufacturing plant in Geleen (the
Netherlands). The plant is currently scheduled to be
operational as from the third quarter of 2023.
In the first quarter of 2021, Tessenderlo Group created a new
growth unit, “Violleau”, to support the growth of organic
agricultural solutions in Europe. With effect from 2022,
Violleau will be included in the Agro segment.
In August 2021, the group reached an agreement to divest the
MPR and ECS activities (Industrial Solutions segment). The
divestment comprises the main assets of these activities.
In the third quarter of 2021, the Mining & Industrial business
unit changed its name to moleko (Industrial Solutions
segment).
In the fourth quarter of 2021, the Performance Chemicals
business unit changed its name to Kuhlmann Europe (Industrial
Solutions segment). Kuhlmann Europe terminated its operating
agreement in 2021 for the production of sulfur derivatives in
Tessenderlo, Belgium (Kuhlmann Belgium). The deteriorating
market conditions, the continuing limited availability of raw
materials, and increased electricity prices made the sulfur
derivatives activity economically unfeasible. In the 2021
results, Tessenderlo Group recognized restructuring expenses
in accordance with the termination clauses of the operating
agreement, while the yearly contribution of sulfur derivatives
to the group’s results was not significant.
Tessenderlo Group 2021 annual report | 7
At the end of 2021, Tessenderlo Kerley, Inc. (TKI) announced its
plans to construct a new plant in Defiance, Ohio (US), serving
the Eastern Great Lakes region. The new facility will focus on
TKI’s leading liquid sulfur-based crop nutrition brands Thio-
Sul®, KTS®, K-Row 23®, as well as sulfite chemistries for the
industrial markets. The plant is expected to become
operational in the first quarter of 2024 (Agro and Industrial
segments).
In December 2021, Tessenderlo Group agreed to acquire the
assets of Fleuren Tankopslag B.V., a tank storage and
transshipment company for liquid products in the Port of Cuijk
(the Netherlands). The acquisition is expected to be completed
in the second quarter of 2022. After completion of the
acquisition, the group will integrate the Fleuren Tankopslag
operations within the Tessenderlo Kerley International
business unit. The transaction will have no material impact on
the results of the group.
PB Shengda (Zhejiang) Biotechnology Co., Ltd, a 50% joint-
venture between Tessenderlo Group and Zhejiang Shengda
Ocean Co., Ltd., was established in June 2020 for the
construction of a marine collagen peptides plant. Both partners
agreed in 2021 to terminate the joint-venture agreement. This
will have no material impact on the results of the group. PB
Leiner however confirms its ambition to become active in the
marine collagen market (Bio-valorization segment).
Tessenderlo Group 2021 annual report | 8
After the balance sheet date
• In February 2022, Tessenderlo Group announced that it intends to acquire the production plant and
the associated business of Pipelife France in Gaillon (Eure, France). The Gaillon plant specializes in the
manufacturing of pipes for gas, water, and cable protection. The transaction is expected to reach
completion in the course of 2022. After completion of the acquisition, Tessenderlo Group intends to
integrate the business within the DYKA Group business unit (Industrial Solutions segment). This
transaction will not materially impact the results of Tessenderlo Group.
• The group also announced that its growth unit Violleau plans to construct a new production line for
organic fertilizers in Vénérolles (Aisne, France). The new line will focus on the production of organic
pellets, responding to the rising demand for organic fertilizers. It is scheduled to be operational from
the first quarter of 2023 and it will be constructed on the site of Akiolis’ manufacturing plant in
Vénérolles.
• In February 2022, Tessenderlo Group repurchased 35.0 million EUR of its outstanding 2022 bonds at
a price of 102.875%. This repurchase resulted in a cash-out of 36.0 million EUR and the remaining
amount of outstanding “2022 bonds” maturing in July 2022 stands at 130.5 million EUR. Also in
February 2022, the group agreed two term loan credit facilities for 30.0 million EUR each, with a
maturity of 7 years (starting April 2022) and a maturity of 5 years (starting August 2022) respectively.
These loans, with quarterly capital reimbursements, have a fixed interest rate of 1.16% and 0.94%
respectively, and contain no financial covenants. Both transactions will further reduce the liquidity
risk as well as the interest costs of the group.
• In early March 2022, Tessenderlo Group submitted a new permit application to the Flemish Region
for the construction of a new 900 MW combined cycle steam and gas turbine (CCGT) power plant in
Tessenderlo, Belgium. With a view to future auctions, Tessenderlo Group adjusted its previously
submitted project (an investment of approximately 500 million EUR) to respond to the objections that
led to the refusal of that application.
• The current conflict in Eastern Europe and the subsequent economic and financial sanctions imposed
are negatively affecting the supply and the cost prices of both raw materials and energy. In particular,
MOP (muriate of potash) is the key raw material used for the production of SOP (sulfate of potash)
fertilizers that are produced at Tessenderlo Kerley Ham (Belgium). Tessenderlo Group currently
sources MOP from Russia and Belarus, as well as some other countries. In this connection, the group
is in the process of reviewing its sourcing mix, and it is therefore currently not possible to determine
what the effect on the production would be, if any, although no significant impact is expected in the
first half of 2022. At present, it is also difficult to estimate the impact on the other activities of the
group.
Tessenderlo Group 2021 annual report | 9
Message from the CEO and the Chairman to the shareholders
Dear Shareholders,
2021 was another very challenging year for our employees, as we had to deal with the consequences of
the global Coronavirus pandemic for the second year in a row. While the pandemic caused a great deal of
disruption and uncertainty in our daily operations - which included an ongoing struggle to maintain our
supply chain - the company and our employees managed to deliver strong results in what was a volatile
year.
Tessenderlo Group generated consolidated revenue of 2,081.5 million EUR in 2021, compared to 1,737.3
million EUR in 2020, which represents a 19.8% increase in revenue (or +21.1%, excluding foreign exchange
effects). The increase in revenue was achieved in all four segments: Agro +31.4%, Industrial Solutions
+21.2%, Bio-valorization +12.8%, and T-Power +2.5%. The 2021 adjusted EBITDA amounts to 354.2 million
EUR, compared to 314.6 million EUR in 2020 (+12.6%). Tessenderlo Group closed the 2021 financial year
with a net profit of 188.3 million EUR, compared to 98.6 million EUR in 2020.
Despite the challenging conditions in our various markets, 2021 was another year in which progress was
made on many fronts and we continued to build on our robust investment program. We remain fully
committed to strengthening our areas of competence and expertise, based on our sincere belief in the
value of our products for the future.
For example, we announced in 2021 that Tessenderlo Kerley International will build a new Thio-Sul®
(ammonium thiosulfate) plant in Geleen (the Netherlands). And with a second European Thio-Sul® plant
planned to be operational by the third quarter of 2023, we are further expanding our local presence in
the precision agriculture liquid fertilizer market. In addition, we are continuing to explore significant Thio-
Sul® investments in the Eastern European/CIS region to support agricultural quality and productivity
improvements in that region.
We also reached an agreement in 2021 to acquire the assets of B.V. Fleuren Tankopslag, which is a tank
storage and transshipment company for liquid products that is located in the Port of Cuijk (Netherlands).
This acquisition will provide additional storage space for Tessenderlo Kerley International's liquid
fertilizers, which include Thio-Sul®, KTS®, and APP (ammonium polyphosphate). Its location on the Maas
river and its close proximity to the new plant in Geleen will result in more convenient and more
sustainable connections for waterborne transport of Thio-Sul® to the Netherlands, Germany, and France.
In the United States, Tessenderlo Kerley, Inc. (TKI) will build a new plant in Defiance (Ohio, US) to serve
the Eastern Great Lakes region. The new plant will produce our leading liquid fertilizers, Thio-Sul®, KTS®,
and K-Row 23®, as well as sulfite chemicals for industrial markets. The plant is expected to be operational
in the first quarter of 2024. This strategic project combines excellence in process technology with the
diversification of our local market position while reinforcing our sustainability goals by locating us closer
to our customers.
In 2021, we established a new growth unit, Violleau, to support the development of organic farming
solutions in Europe. This growth unit will be part of our Agro segment with effect from 2022.
Tessenderlo Group 2021 annual report | 10
Following the announcement of the results of the first capacity remuneration mechanism (CRM) auction
for the 2025-2026 delivery period by the grid manager Elia, in the fourth quarter of 2021, Tessenderlo
Group was not selected for the construction of its proposed 900 MW gas power plant. The group had
already been informed in October 2021 that it would not receive a permit for the construction of this
plant. In early March 2022, Tessenderlo Group submitted a new permit application to the Flemish Region
for the construction of a new 900 MW combined cycle steam and gas turbine (CCGT) power plant in
Tessenderlo, Belgium. With a view to future auctions, Tessenderlo Group adjusted its previously
submitted project to respond to the objections that led to the refusal of that application.
Our commitment to sustainability continued in 2021, focusing on our "Every Molecule Counts"
philosophy. We are more than ever convinced that we have a process for making every flow more
sustainable, and that new value can be discovered by applying these processes. Progress was made both
in developing a CSR policy and in its implementation. In 2021, attention was also given to improving our
processes, with the aim of further reducing our carbon footprint. More information can be found in our
2021 Sustainability Report, which forms part of this annual report.
With a view to assuring the future of our group, we continued to invest heavily in the further development
of our employees' talents in 2021. Quality training and professional development are a must if we want
to guarantee the group a sustainable future in an environment and a labor market that are becoming
increasingly challenging.
In 2021, Tessenderlo Group continued on its path of further strengthening its innovation capabilities. This
implied a sustained organizational focus on business development and innovative portfolio management
in all our activities. At the end of 2021, Tessenderlo Group signed a cooperation agreement with Haarslev,
the world's largest supplier of rendering solutions. This partnership will combine Haarslev's expertise in
producing highly digestible feather meals and blood meals using gentle drying technologies, with
Tessenderlo Group's patented know-how.
In conclusion, we remained focused in 2021 on increasing our logistical efficiency, debottlenecking
factories, implementing coordinated procurement and sourcing activities and achieving operational
excellence, profitable growth, and improved customer focus, in order to better serve the markets in which
we operate. All of these initiatives, combined with our constant focus on operational excellence, will
contribute to even better results in the future for Tessenderlo Group.
Dividend
At the Annual General Meeting of Shareholders on May 10, 2022, the Board of Directors will propose that
no dividend be paid out for the 2021 financial year. The group remains convinced that, instead of paying
a dividend, more shareholder value can be created by the further investment of available funds in the
growth of the business.
Tessenderlo Group 2021 annual report | 11
Outlook
The following statements are forward-looking and actual results may differ materially.
The group anticipates a continued high level of uncertainty in 2022 due to the current conflict in Eastern
Europe, the difficult supply chain circumstances, and other challenges following the coronavirus
pandemic. The development of customer demand and sales margin could come under pressure during
the coming months. However, based on currently available market information, the group expects that
the 2022 Adjusted EBITDA will be in line with the 2021 Adjusted EBITDA, taking into account the expected
positive foreign exchange effect in 2022 following the strengthening of the USD. This guidance, however,
does not include the risk of further deteriorating economic and financial market conditions.
On behalf of the Board of Directors, we would like to thank everyone who has contributed to the success
of Tessenderlo Group in the past year - our employees for their commitment and dedication, and our
shareholders, customers, and business partners for the confidence they have shown in our group.
Tessenderlo Group will continue to grow, thanks to our more than 4,800 employees, who always give
their best. “Every Molecule Counts” is and will remain our fundamental contribution to a sustainable and
better society. And we will continue to strive to achieve this goal, every day.
Kind regards,
Luc Tack Stefaan Haspeslagh
CEO Chairman of the Board of Directors
Tessenderlo Group 2021 annual report | 12
Key figures at a glance
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
15%
12%
8%
10%
13%
13%
12%
9%
7%
9%
12%
6%
-5%
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2,081.5
1,737.3
1,742.9
1,620.9
1,657.3
1,590.1
1,589.0
1,434.2
1,790.1
2,129.0
2,126.0
2,024.0
2,093.0
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
1,130.0
903.0
821.7
735.0
637.7
604.7
516.8
433.5
236.6
335.5
600.3
724.5
705.2
-10% -5% 0% 5% 10% 15% 20%
2021
2019
2017
2015
2013
2011
2009
ROCE (%)
0.0 500.0 1000.0 1500.0 2000.0 2500.0
2021
2019
2017
2015
2013
2011
2009
REVENUE (in million EUR)
0.0 200.0 400.0 600.0 800.0 1000.0 1200.0
2021
2019
2017
2015
2013
2011
2009
EQUITY ATTRIBUTABLE TO EQUITY SHAREHOLDERS
OF THE GROUP (in million EUR)
0.0
500.0
1,000.0
1,500.0
2,000.0
2,500.0
0.0
200.0
400.0
600.0
800.0
1,000.0
1,200.0
Tessenderlo Group 2021 annual report | 13
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
354.2
314.6
267.7
177.8
187.8
198.0
180.4
135.6
116.6
160.0
187.0
162.8
63.4
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
187.8
99.1
96.1
91.7
25.6
98.8
84.5
53.7
-64.0
-198.7
58.0
33.5
-167.0
0 50 100 150 200 250 300 350 400
2021
2019
2017
2015
2013
2011
2009
ADJUSTED EBITDA (in million EUR)
-250 -200 -150 -100 -50 0 50 100 150 200 250
2021
2019
2017
2015
2013
2011
2009
PROFIT (+) / LOSS (-) TO EQUITY SHAREHOLDERS OF THE GROUP
(in million EUR)
Tessenderlo Group 2021 annual report | 14
58%
31%
4%
3%
4%
2021 REVENUE PER GEOGRAPHY (%)
Europe
North America
South America
Asia
Rest of the world
1%
27%
0%
1%
22%
5%
7%
3%
31%
3%
2021 REVENUE PER COUNTRY OF PRODUCTION (%)
Argentina
Belgium
Brazil
China
France
United Kingdom
The Netherlands
Germany
USA
Other
Tessenderlo Group 2021 annual report | 15
70%
21%
9%
0%
2021 DISTRIBUTION OF THE CAPEX (%)
Europe
North America
South America
Asia
2021 ADJUSTED EBITDA PER SEGMENT (in million EUR)
Agro
Bio-valorization
Industrial Solutions
T-Power
52.2
147.4
78.5
76.1
Tessenderlo Group 2021 annual report | 16
Our Agro segment
Our Agro segment combines Tessenderlo Group’s activities in the production, trading and marketing of
crop nutrients (liquid crop fertilizers and potassium sulfate fertilizers, based on sulfur) and crop protection
products. We have three business units within this segment: Crop Vitality, NovaSource (both part of
Tessenderlo Kerley, Inc.) and Tessenderlo Kerley International.
Production locations
Crop Vitality | NovaSource: 12 production plants and 1 scheduled for construction
and more than 100 terminals (US).
Tessenderlo Kerley International: production plants in Belgium (1), France (1), Turkey
(1) and 1 scheduled for construction (the Netherlands), and 10 terminals in Europe
and Mexico.
Core markets
Agriculture
Area of activity
Value-added specialty liquid, solid and soluble fertilizers, and crop protection
products with a focus on precision agriculture applications.
Business drivers
• Growing population.
• Increased demand for quality fertilizers for modern and sustainable precision
agriculture and crop protection products.
• To support efficient water management.
Strategic focus
Crop Vitality | Tessenderlo Kerley International
• To maintain our global leadership position in selective specialty liquid and
soluble SOP fertilizers, while expanding further into key target markets in the
Americas, Europe, Middle East and Australia.
• To expand the product portfolio and applications offerings to strengthen our
position in specialty niche markets.
• To develop and provide sustainable organic agricultural solutions.
• To build a global network of connected technical experts and storage.
• To focus on expanding market share by providing continuous education
throughout the value chain with a view to increasing food production in a
sustainable manner.
• To continuously improve the cost efficiency of our production processes and
supporting departments while optimizing our customer-centered supply chain.
• To optimize our energy footprint.
NovaSource
• To expand the product portfolio through acquisitions.
• To maintain product registrations, register and market our current and acquired
products in additional countries.
• To identify, develop, register and market new uses of current and acquired
products.
Key figures
Share of Adjusted EBITDA Headcount (FTE)
864
41.6%
Tessenderlo Group 2021 annual report | 17
Crop Vitality
Who are we?
Crop Vitality (www.cropvitality.com) provides world-class crop nutrient products and is the world’s
leading producer of sulfur-based crop nutrition products used in the agriculture industry. Crop Vitality
offers a diverse portfolio of products that are vital to crop health, including Thio-Sul®, KTS®, K-Row 23®,
CaTs®, GranuPotasse®, and SoluPotasse®. Our experienced team of agronomic experts and our
comprehensive network of production and distribution facilities make us a preferred partner in the US
and Canadian markets. Crop Vitality is operated by Tessenderlo Kerley, Inc.
Crop Vitality’s product portfolio exemplifies how we help to nurture crop health by providing the essential
nutrients that plants require. “Nurturing Crop Life” is not just our tagline, it signifies our passion to deliver
vital elements for optimal plant and soil health. Our products represent our core competence – sulfur.
This vital nutrient emphasizes our commitment to upholding sustainable agricultural practices that use
science-based management plans, such as 4R Nutrient Stewardship, in order to minimize environmental
impact. Our priority is to improve continually with the aim of realizing the highest quality, environmentally
friendly, and sustainable products. Our Crop Vitality Learning Center, located in Dinuba, California (US),
performs key research on crop nutrition, and it both develops and tests products to assure optimal plant
health. These activities provide valuable insights and resources to crop growers.
Business in 2021
2021 was a year filled with opportunities and challenges. The demand for agricultural products and inputs
showed incredible resilience. Supply chain constraints were faced throughout the industry and we were
able to successfully navigate through these challenges. In addition, winter storms disrupted logistics
networks, while surges in COVID-19 cases, droughts, and uncertainty all impacted the industry. However,
thanks to the dedication and perseverance of our people, coupled with our robust end-to-end supply
chain, we were able to deliver strong results.
Outlook for 2022
The purpose of agriculture – to feed the world – and the importance of food security are more apparent
than ever. Looking at 2022, the outlook for our business is favorable, despite supply chain constraints and
rising crop prices. Global food prices continue to climb, as does the demand for fertilizers. Our quality crop
nutrition products have been integral in maintaining the ability of growers to optimize the health of their
crops and keep delivering quality crops. We will continue to invest in our people and strategic
infrastructure to support our customers’ crop growing needs.
Tessenderlo Group 2021 annual report | 18
Tessenderlo Kerley International
Who are we?
Tessenderlo Kerley International (www.tessenderlokerley.com) supplies value-added liquid, soluble, and
solid plant nutrition to support growers in realizing efficient and sustainable agriculture. Our global team
of agronomists and commercial advisers is characterized by a dense local network, strong customer focus
and has an outstanding heritage. This is because we are able to build on the 100 years of expertise at
Tessenderlo (in solid and soluble potassium-based fertilizers) and the 70 years of expertise at Kerley (in
liquid fertilizers). Our dedication to giving farmers the precise tools needed to optimize their crops is at
the very heart of everything we do. Our portfolio consists of well-recognized specialty fertilizers such as
SoluPotasse®, Thio-Sul®, KTS®, CaTs®, etc., and we continuously invest in these products in terms of
innovation, product development, and support. This is how we can guarantee that all of our interactions
- whether they involve our products, our experts, or our advisers – will create maximal output, i.e. a better
yield for crops, more control for farmers, and a healthier planet for everyone.
Business in 2021
During 2021, Tessenderlo Kerley International continued to execute its long-term strategy and we made
progress in driving top-line growth while strengthening our growth foundations. Recruiting commercial
and agronomical talent in new markets, running a portfolio of trials, developing new customers
/applications, expanding and upgrading our existing manufacturing facilities, and setting up new supply
chains are just a few examples of how we are strengthening these growth foundations.
In addition, we launched the permit and engineering process for the new Thio-Sul® production facility in
Geleen (the Netherlands) and agreed to acquire the storage and transshipment assets of B.V. Fleuren
Tankopslag, which is located in the Port of Cuijk (the Netherlands).
For the sulfate of potash (SOP) product family, the market was challenging in 2021 as a result of the
multiple frictions encountered on the supply and logistics side, including tightness and price increases of
key raw materials and constraints on container availability. That said, we reconfirmed our leading position
in the premium water-soluble SOP segment with our flagship product SoluPotasse®. We are continuing to
progress in regard to even further strengthening our market position in the long-term, i.e. we are focusing
on high-quality products and services that are well-recognized in terms of global market reach and our
strong local connection with different stakeholders in the supply chain. 2021 also marked the first year of
cooperation under our long-term partnership with Kemira, whereby Kemira produces premium SOP
fertilizers at its plant in Helsingborg (Sweden) and Tessenderlo Kerley International markets these
products.
Tessenderlo Group 2021 annual report | 19
Outlook for 2022
In 2022, Tessenderlo Kerley International will continue to execute its strategy of profitable growth,
including expanding the frontline team, strengthening the go-to-market channels, building agronomical
know-how, and driving excellence throughout the value chain. As the value proposition of the liquid
fertilizers is increasingly being recognized and valorized by customers in the regions where we currently
operate, additional prioritized markets will also be developed.
Upon receiving the necessary permits and approvals, we will begin the construction of the Thio-Sul®
manufacturing plant in Geleen (the Netherlands). The plant is currently scheduled to start production in
the third quarter of 2023. The B.V. Fleuren Tankopslag acquisition is expected to be completed in the
second quarter of 2022. Tessenderlo Kerley International is also continuing to study major Thio-Sul®
investments in the Eastern European/CIS region with the aim of supporting qualitative and productivity
increases in agricultural production in that region.
With regard to the SOP products, we continue to strengthen our globally leading position in water-soluble
fertilizers with our premium brand SoluPotasse®. Furthermore, we have added the new premium brand
SoluKem® to our portfolio, which is dedicated to the water-soluble fertilizer sales from Kemira’s
production facility in Helsingborg (Sweden).
While the long-term outlook clearly suggests positive growth, we have observed over the last few years
that swings can occur in the agro market over the short-term. However, we are conscious that our results
will ultimately depend on the evolution of the agro market. We have a clear strategy for remaining at the
forefront of the specialty SOP and liquid fertilizers market (based on sulfur). To this end, we will continue
to consistently deliver high-quality products while improving our focus on customer service and applying
the group’s considerable experience in these industries.
Tessenderlo Group 2021 annual report | 20
NovaSource
Who are we?
NovaSource (www.novasource.com) delivers a portfolio of niche crop protection products to agriculture
customers worldwide. Focusing on specialty crops, NovaSource brings value to the market using active
ingredients that are proven to boost crop yields and quality. The team shares over 100 years of knowledge
in heat stress, insecticides, herbicides, fungicides and soil amendment with the global agriculture
community. This highly educated and experienced group is positioned in specific regions in order to
provide growers with expert guidance and product knowledge that is specific to their location. Through a
diverse array of superior crop protection products, NovaSource protects growers’ crops from a variety of
damaging weeds, insects, diseases, and solar damage, hence increasing the growers’ yields, profitability,
and predictability. NovaSource is operated by Tessenderlo Kerley, Inc.
Business in 2021
2021 was a challenging year for the crop protection industry due to the ongoing COVID-19 pandemic,
transportation issues, raw material shortages, weather events, labor issues, etc., which resulted in an
increasingly competitive market. NovaSource was able to successfully overcome nearly all of these
challenges through forward planning with the supply chain, managing transportation, and superior
customer service. These challenges led us to build deeper relationships with our customers and gave us a
better understanding of their changing needs.
Outlook for 2022
NovaSource continues to focus on expanding label uses of the existing portfolio, extending products to
different geographical regions, and growing the business through acquisitions, and developing bio-
rational products. We are collaborating on several research trials, which involve testing variables of
products and applications that will meet and exceed customer needs in key growth markets. In addition,
NovaSource will continue its advocacy efforts towards further increasing the stewardship and proper use
of its products, growing industry knowledge regarding pesticide use for maximizing crop yields, and
supporting land conservation.
Tessenderlo Group 2021 annual report | 21
Our Bio-valorization segment
Our Bio-valorization segment, which covers Tessenderlo Group’s activities in animal by-product
processing, consists of PB Leiner (production, trading and sale of gelatin and collagen peptides) and Akiolis
(rendering, production, trading and sale of proteins and fats).
Production locations
PB Leiner: 3 production plants in Europe (Belgium, Germany, UK), 1 in China and 3 in
the Americas (US, Argentina, Brazil).
Akiolis (France): 3 production plants, 28 collection centers (C1/C2 categories) and 8
production plants, 20 collection centers (C3 category & food grade) and 1 production
plant (organic fertilizers, Violleau).
Core markets
Food, pharma, health & nutrition, pet food, agriculture, aqua feed, animal feed,
energy, biodiesel, oleo-chemistry, and sanitary services.
Area of activity
Bio-resources, agriculture
Business drivers
• Growing demand for bio-based environmentally friendly offerings in feed, food,
health & nutrition, fertilization, energy, and pharmaceutical and technical
applications.
• Improved standards of living result in increased protein demand.
• Increased need for sanitary procedures to protect the food chain and the health
of animals dedicated to human food.
Strategic focus
PB Leiner
• To optimize efficiencies on existing assets.
• To focus on customer relationships and new product development.
• To vigorously focus on realizing manufacturing excellence and the
improved valorization of access to raw materials.
• To increase the focus on health & nutrition(collagen peptides) and pharma.
• Valorization of fats.
Akiolis
• To improve the valorization of finished products in organic fertilization, pet
food and aquaculture markets.
• Valorization of fats.
• To strengthen our position in our core business on sourcing markets by
pushing long-term and quality-based contracts.
• To focus on customer relationships and new product development.
• To improve efficiency in existing plants and logistics.
• To focus on sanitary service for breeders, and on quality control for
slaughterhouses and butchers.
Key figures
Share of Adjusted EBITDA Headcount (FTE)
2,107
22.2%
Tessenderlo Group 2021 annual report | 22
PB Leiner
Who are we?
PB Leiner (www.pbleiner.com) supplies a complete range of high-quality gelatins and collagen peptides,
tailoring solutions to customer applications. We are one of the top three players in the world in our
industry. The gelatin process includes raw material (pre)treatment, collagen extraction, and gelatin
purification. The overall production processes can take up to six months for specific qualities, and some
fractions of the gelatin are further processed into collagen peptides for health and nutrition applications.
Gelatins are used in multiple markets, including food, pharmaceuticals and photography. In most
applications, gelatins are only added in small portions to the formulation, as a functional ingredient with
superior characteristics. PB Leiner produces collagen and gelatin derived from pigskin, and beef hide and
bone. Raw materials are mainly sourced regionally and competition for raw materials is not limited to
other gelatin manufacturers, but also comprises other end-uses such as direct use as human food, pet
food, and leather manufacturing. Fluctuations in the supply and demand of raw materials have an
important impact on gelatin prices and availability. Securing sufficient raw material volumes is key to the
business.
Business in 2021
After a drop in demand in the second half of 2020 due to the COVID-19 pandemic, the global market for
gelatin and collagen recovered much faster than expected in 2021. At the same time, sea and land
transport became scarcer, and a reduced demand for meat affected raw material availability.
Nevertheless, our operations team pulled out all the stops to meet customer demand as adequately as
possible. The cost increases for energy, transport, and raw materials had a significant impact on the
contribution margin of our operations. The turbulent times notwithstanding, we continued the
implementation of our strategy in 2021 by focusing on Sales Excellence (this involved further
strengthening the cooperation with our key customers on supply optimization and product development)
and Operational Excellence (by the debottlenecking of plants, improving quality systems, optimizing
processes, and stimulating a culture of employee engagement).
Outlook for 2022
In 2022, PB Leiner will continue to develop close relationships with its customers and will keep creating
specialties in order to meet the demands and challenges of the food, pharma, and health & nutrition
sectors. Furthermore, we will continue to ensure quality and delivery reliability for our customers, and we
will keep investing in upgrading all of our plants. Meanwhile, a number of debottlenecking projects that
experienced some delays due to the pandemic will be commissioned in 2022. Variable costs such as raw
materials, energy, and transport will be monitored closely.
The long-term outlook for the gelatin and collagen markets remains positive for several reasons: the
growing global middle-class population, the increased consumption of medication in the developing
world, and greater health and nutrition awareness and habits in all markets. The raw material supply
remains a factor of potential instability, which is, among other things, linked to the evolution of the African
swine flu.
Tessenderlo Group 2021 annual report | 23
Akiolis
Who are we?
Akiolis (www.akiolis.com) specializes in rendering activities and the production of high-value proteins and
fats derived from animal by-products. Our links with partners from the sourcing (livestock sector, meat
industry, butchers, and retailers) enable us to get access to a vast array of animal materials and our
industrial processes allow us to valorize our ingredients in markets such as pet food and animal nutrition,
aqua feed and oleo-chemistry, organic fertilization, gelatins, cement plants, and energy sectors. Our
targets for each market are agility and service-minded operations, and a focus on our customers’ needs
and their business key success factors. This is a goal that translates into branded ingredients. This market-
oriented approach will enable us to deliver products and services featuring a very high standard of quality
and innovative solutions that meet the rate of development in our customers’ own markets. It will also
allow us to be and remain in the future a solid partner for breeders contributing to the sanitary protection
of livestock and therefore the human food chain.
Business in 2021
In the context of the continuing global COVID-19 pandemic, Akiolis, as a key player in the human food
chain and guarantor of the continuity of the meat supply to many of the French households, managed to
both boost its results and launch a complete rebranding of its activities. Thanks to a strict collective
application of measures and the individual commitment of the teams, all collection centers and plants
went through the pandemic in 2021 without suffering a significant impact.
During this crisis period, Akiolis presented its new strategy of “Révelateur de valeur”. This resulted in the
launch of eight market and product brands as a promise of excellence and customer-oriented offers:
Accuraks (oleochemistry), Biomaks (biofuel), Caloraks (bioenergy), Hydrofaks (aqua feed), Leveraks
(animal feed), Regenaks (organic fertilization), Vivaks (pet food), and Atemax for the sanitary service of
the dead animal collection sector. With this new positioning, Akiolis managed to take advantage of the
favorable international context regarding the proteins and fats drivers and continued to focus on
customer satisfaction, product quality, and service excellence, which allowed Akiolis’ activities to reach
an unexpected level. This was also the case for Violleau, which experienced a significant increase in
demand.
In parallel, in-house performance in logistics and production contributed to further securing sustainable
relationships with key customers in strategic markets (e.g. pet food, aqua feed, biofertilization, and
biodiesel), while strategic investments aimed at specializing in the valorization of mono-species
ingredients from feathers, blood, duck, and pork were confirmed. 2021 was a special year for Akiolis
considering both the context and the results, not to mention the conclusion of a new three-year contract
with the breeders’ associations for the collection of dead animals that led to the extension of Akiolis’
collection area with a slight increase in the volumes.
Tessenderlo Group 2021 annual report | 24
Outlook for 2022
Sustainability and customer satisfaction will continue to be the keywords for Akiolis in 2022 with the
deployment of the new strategic plan promoting Akiolis as a “Révélateur de valeur” and focusing on action
plans in three strategic areas: strengthening of the basis, specialization in ingredients and service
solutions, and the development of activities (collection and transformation) in new, sustainable markets.
In particular, a higher level of valorization in the pet food and aqua feed markets will be realized with
investments and patented new processes for feather and blood meal. These will start in Javené and Rion
(France) before mid-2022. Meanwhile, the complete revamping of the Pontivy site will soon enable Akiolis
to develop a new offer with genuine pork ingredients and guarantee less environmental impact.
Tessenderlo Group 2021 annual report | 25
Our Industrial Solutions segment
Our Industrial Solutions segment includes products, systems and solutions for the handling, processing,
and treatment of water. This segment includes the production, trading and sale of plastic pipe systems,
water treatment chemicals and other industrial activities, such as the production and sale of mining and
industrial auxiliaries.
Production locations
DYKA Group: 8 production plants (2 in the Netherlands, 1 in Belgium, 2 in France, 1
in Germany, 1 in Poland and 1 in Hungary) and more than 70 branches in Europe.
Kuhlmann Europe: 4 production plants (2 in Belgium, 1 in France and 1 in Switzerland)
moleko: 3 production plants (USA).
Core markets
Water, sewage, air and gas piping systems and services, water treatment, and mining
services.
Area of activity
Building and installation, public infrastructure and utility works, industrial and
municipal markets, industry, and mining.
Business drivers
• Clean water demand and hygiene - industry need for the sustainable purification
of process water and valorization of water.
• Scarcity of natural resources and environmental footprint.
• Global warming, storm water (infiltration), energy neutral buildings, health and
comfort.
• Base chemicals supply is driven by economic activity.
Strategic focus
DYKA Group
• To optimize our energy footprint. To further grow customer intimacy, to
introduce innovative systems and services, and to strengthen our position in
various sectors, product ranges and key geographies.
Kuhlmann Europe
• To provide long-term and environmentally attractive solutions to industries and
municipalities, turning by-products into value-added solutions
moleko
• To be the sustainable partner of choice for essential chemistry and technical
solutions for mining and industrial applications.
Key figures
Share of Adjusted EBITDA Headcount (FTE)
1,829
21.5%
Tessenderlo Group 2021 annual report | 26
DYKA Group
Who are we?
DYKA Group (www.dyka.com) which is composed of the three entities DYKA, BT Nyloplast, and JDP,
provides high quality, value-added piping solutions for utilities, agricultural, building, and civil engineering
markets. We focus on achieving higher levels of customer satisfaction by offering pre-assembled piping
kits, project consultancy services, engineering support for ventilation solutions, sewage and rainwater
solutions, and siphonic roof drainage systems. We provide our solutions via our integrated sales and
support network, our manufacturing and logistics professionals, and over 70 customer-oriented branches,
as well as more than 2,000 points of sale in Europe.
Attenuating or infiltrating rainwater from more frequent and heavier showers, accommodating increasing
requirements to move towards more energy-neutral buildings, preventing the leakage of valuable
drinking water with better quality piping networks, and reducing costs in complex construction value
chains are just a few challenges that our customers face. These are best managed by applying the range
of systems and services from DYKA Group. In addition, increasingly more recycled material is being applied
in the manufacturing of our products and systems, and thus optimizing the environmental footprint of
our business. This gives new value to both post-industrial and post-consumer plastics and consequently
reduces demands on finite resources.
Business in 2021
DYKA Group achieved excellent results in the challenging year that was 2021. These results were fueled
by volume growth initiatives combined with positive demand in virtually all our markets, more specifically
the “Building & Installation” markets. In addition, supply shortages and substantial raw material cost-push
inflation were the main drivers behind the sales price evolution and proved to be a common theme
throughout the year. DYKA Group managed unprecedented constraints in many areas, including, among
other things, shortages in skilled personnel, raw materials, transport, and packaging. Nonetheless, we
realized above-average growth in areas including DYKA AIR (ventilation), prefab solutions, and in-house
products at JDP for the UK market. Finally, we strengthened our position in the French market with the
successful integration and investment program at our La Chapelle-Saint-Ursin plant, which was acquired
in 2020.
Outlook for 2022
In 2022, DYKA Group expects high volatility in the building and construction markets. On the one hand,
economic forecasts are supportive with regard to overall market developments, especially the demand
for new housing, combined with an increasing focus on sustainability and circularity, which falls in line
with DYKA Group’s strategy. On the other hand, markets remain uncertain from the potential impact of a
series of (ongoing) constraints in the value chain, in particular the availability of skilled personnel, various
raw materials, and energy. We will expand our customer offering in both systems and services and make
investments in order to improve the performance and capacity of production and logistics assets across
all plants. In addition, we are aiming to increase our number of branches to deliver best-in-class service
to our customers and make it easier to do business with us. In 2022, the production plant and the
associated business of Pipelife France in Gaillon (France) will be integrated.
Tessenderlo Group 2021 annual report | 27
Kuhlmann Europe
Who are we?
Kuhlmann Europe (www.kuhlmann-europe.com) provides industrial and municipal markets with
coagulants and other chemicals for either the treatment of wastewater or the purification of drinking
water. We also produce industrial chemicals which are used by a broad spectrum of industries such as the
pharmaceutical industry, petrochemical, steel, and fertilizer industries. Our other chemical products
include bleach, sodium hydroxide, various grades of hydrochloric acid, sulfuric acid to meet the demands
of many markets, and calcium chloride for food and industrial applications.
We are one of Europe's leading inorganic coagulant producers, operating four production sites that are
located in Loos (France), Tessenderlo and Ham (Belgium), and Rekingen (Switzerland). We are
continuously strengthening our leadership in the manufacture of ferric coagulants, building on our process
expertise and contributing to resource conservation as a key player in the circular economy. Furthermore,
we are ideally located to supply the largest municipal and industrial wastewater and drinking water
treatment plants in Western Europe.
Business in 2021
Kuhlmann Europe increased its sales thanks to ferric coagulants following continuous investments in the
Loos and Tessenderlo production plants, which allowed us to support stronger demand for inorganic
coagulants in water potabilization and in the treatment of wastewater. Market demand for our
hydrochloric acid was very dynamic in 2021 as supply disruption had affected many players across Europe.
Outlook for 2022
Following a robust 2021, we expect demand in 2022 to remain healthy across our entire product range.
We are monitoring incremental logistic costs, energy costs, and raw material costs, and we will adjust our
sales price accordingly.
Tessenderlo Group 2021 annual report | 28
moleko
Who are we?
Moleko (www.moleko.com) specializes in sulfur chemistry for mining and industrial markets. Our team
serves customers across highly diverse sectors and in different continents. In mining, we serve both the
base and precious metals segments. The industrial segments we serve include food processing, water
treatment, remediation, oil and gas, pulp, paper & tanning. Our principal products are Thio-Gold®
(thiosulfate-based lixiviants) and Cyntrol® (cyanide corrosion control). The moleko team is committed to
providing unique solutions and services to our customers so they can obtain maximum value from their
existing operations and explore new potential applications. Moleko is operated by Tessenderlo Kerley,
Inc.
Business in 2021
Shifting market dynamics drove strong demand across multiple segments while increasing strains on an
already tight supply landscape. Challenges ranged from the resurgence of COVID-19 cases, labor
shortages, supply chain bottlenecks, and weather disruptions. These created cascading effects across the
value chain, resulting in the significant cost increases and further imbalances for certain materials. By
remaining connected with our partners and leveraging our flexible manufacturing/supply chain footprint,
we were able to maintain market strength, despite the volatility. The precious metals market has proven
resilient, while the base metals market has climbed to robust levels with continuing strong fundamentals.
Other industrial markets are in various stages of recovery but are anticipated to strengthen as the
pandemic is further controlled.
Outlook for 2022
The longer-term outlook remains bullish for the markets we serve, which are coupled to the macro drivers
of sustainability for infrastructure, energy/electrification transformation, and food/water security. We
will leverage our expertise to ensure that we understand the dynamically evolving needs of our partners
and deliver innovative solutions centered on value creation. Our extensive manufacturing and supply
chain will receive further investments and optimizations to help expand access to products, meeting our
strategic intent to grow the market. Our technical specialists will continue to be the market stewards for
the safe, effective, and efficient use of our products and solutions while focusing on fueling innovations
in order to create the next generation of offerings.
Tessenderlo Group 2021 annual report | 29
Our T-Power segment
Our T-Power segment covers Tessenderlo Group’s activities in the production of electricity by means of a
combined cycle gas turbine (CCGT) with a 425 MW capacity.
Production locations
1 power plant: Tessenderlo (Belgium)
Core markets
Energy
Area of activity
Production of electricity in gas fired power plants
Business drivers
Proper execution of the gas tolling agreement
Strategic focus
Focus on the efficiency and availability of the existing assets
Key figures
Share of Adjusted EBITDA Headcount (FTE)
38
14.7%
Tessenderlo Group 2021 annual report | 30
T-Power
Who are we?
T-Power was founded in 2005, with Tessenderlo Group as one of its original three shareholders. After
completion of the development program, the T-Power 425 MW gas-fired combined cycle power plant
(CCGT) located in Tessenderlo was built and commissioned in 2011. Thanks to its high efficiency and
flexibility, the T-Power power plant is one of the most competitive gas-fired power plants in Belgium and
the broader interconnected electricity trading area. T-Power operates as a project-financed Independent
Power Producer and we get our revenues through a 15-year gas-to-electricity tolling agreement with the
RWE group. After several changes in shareholding over the years, Tessenderlo Group acquired 100% of T-
Power in October 2018 by purchasing the shares held by the remaining shareholders.
Business in 2021
The T-Power plant enjoyed a good running regime in 2021. Throughout the year, the plant maintained its
excellent availability and health and safety records.
Following the publication of the results of the first capacity remuneration mechanism (CRM) auction for
the 2025-2026 delivery year by the system operator Elia in the fourth quarter of 2021, Tessenderlo Group
was not selected to build its proposed 900 MW gas-fired power station. The group had been informed in
October 2021 that it would not be granted a permit for the construction of this power station.
Outlook for 2022
In 2022, T-Power will continue to focus further on the efficiency, flexibility, and availability of the existing
assets. In early March 2022, Tessenderlo Group submitted a new permit application to the Flemish Region
for the construction of a new 900 MW combined cycle steam and gas turbine (CCGT) power plant in
Tessenderlo, Belgium. With a view to future auctions, Tessenderlo Group adjusted its previously
submitted project (an investment of approximately 500 million EUR) to respond to the objections that led
to the refusal of that application.
Tessenderlo Group will continue to closely monitor the evolution of the electricity market in Belgium.
Based on the existing available production capacity and the expected evolution of electricity demand in
Belgium, the group still sees a need for high-tech, controllable capacity in the energy transition.
Tessenderlo Group 2021 annual report | 31
Information for shareholders
Investor relations
Tessenderlo Group strives to provide accurate, qualitative and timely information to the global financial
community. In order to discuss the group’s results and future developments, Tessenderlo Group organizes
conference calls to present and discuss the half-year and annual results.
Analyst coverage
At the end of 2021, Tessenderlo Group was covered by 5 sell-side analysts (for more information please
visit www.tessenderlo.com).
Shareholder structure
On December 31, 2021 the shareholder structure of Tessenderlo Group was as follows:
Shareholder
Number of shares
Number of voting rights
% voting rights
Verbrugge nv
(controlled by Picanol nv)
20,575,699
38,533,061
61.03%
Symphony Mills nv
2,532,200
4,346,200
6.88%
Norges Bank
1,287,899
1,287,899
2.04%
Carmignac Gestion SA
903,687
903,687
1.43%
Dimensional Fund Advisors
L.P.
891,022
891,022
1.41%
Own shares
132,000
-
0.00%
Other
16,832,472
17,172,312
27.20%
Total
43,154,979
63,134,181
100.00%
Verbrugge nv is controlled by Picanol nv, which in turn is controlled by Artela nv. Artela nv and Symphony
Mills nv are controlled by Mr. Luc Tack.
On December 31, 2021, there were no warrants outstanding. The total number of shares constituting the
issued capital of Tessenderlo Group nv is 43,154,979. In accordance with article 7:53 of the Belgian Code
of Companies and Associations, the extraordinary meeting of shareholders of July 10, 2019, has decided
to introduce a loyalty voting right for each fully paid-up share that has continuously been registered in the
share register on the name of the same shareholder for at least two years. The number of voting rights
attached to the outstanding shares on December 31, 2021, is 63,134,181.
Tessenderlo Group 2021 annual report | 32
Tessenderlo group share
Tessenderlo Group shares are listed on the Euronext Brussels Stock Exchange under the code TESB. They
are traded on the continuous market and are included in the following indexes: BEL Mid and Next 150.
Share price performance
The Tessenderlo Group nv share price increased by 2.1% in 2021, while the BEL 20 index increased by
19.0% and the European Chemicals index SX4P increased by 22.7%. The share reached its year-high closing
price of 39.95 EUR on March 17, 2021. The year-low closing price of 31.10 EUR was reached on November
1, 2021. The share closed at 33.35 EUR on the last trading day of the year.
Dividend policy
The Board of Directors will propose to the shareholders, at the annual shareholders’ meeting of May 10,
2022, not to pay out a dividend for the 2021 financial year. The group currently believes that more
shareholder value can be created through further investing available funds in the growth of the company.
Financial calendar
• Annual shareholder’s meeting May 10, 2022
• Half year 2022 results August 25, 2022
Management will continue to interact with investors and analysts in order to address strategic themes and
discuss the progress towards the group’s long-term ambitions.
Full financial and non-financial information regarding Tessenderlo Group is available on the website
www.tessenderlo.com. Anyone wishing to receive Tessenderlo Group press releases by e-mail may register
on the mailing list on the website.
The Tessenderlo Group share price is published on www.tessenderlo.com and on the Euronext Brussels
website www.euronext.com.
Contact for investor relations
Mr. Kurt Dejonckheere
Investor Relations
Tel: +32 2 639 1841
E-mail: kurt.dejonckheere@tessenderlo.com
Tessenderlo Group 2021 annual report | 33
Tessenderlo Group 2021 annual report | 34
Business progress
Group performance
2021 revenue increased by +19.8% (or by +21.1% when excluding the foreign exchange effect). The
revenue of all four segments increased (Agro: +31.4%, Industrial Solutions: +21.2%, Bio-valorization:
+12.8% and T-Power: +2.5%).
The 2021 Adjusted EBITDA amounts to 354.2 million EUR, compared to 314.6 million EUR in 2020
(+12.6%). When excluding the foreign exchange effect, the Adjusted EBITDA has increased by +46.4 million
EUR compared to 2020 (+14.7%). The negative foreign exchange effect of -6.7 million EUR is mainly caused
by the weakening of the USD compared to one year ago (average EUR/USD rate of 1.18 in 2021 versus
1.14 in 2020). The Adjusted EBITDA of Agro (+21.1%) and Industrial Solutions (+43.9%) increased, while
the contribution of Bio-valorization (-1.8%) and T-Power (-3.5%) to the Group Adjusted EBITDA was in line
with prior year.
The 2021 operational free cash flow amounts to 188.9 million EUR, compared to 213.7 million EUR in
2020. This decrease, despite the increase of the Adjusted EBITDA (+39.7 million EUR), can be explained by
the movement of trade working capital, which increased by +69.4 million EUR in 2021 while it remained
stable in 2020 (+0.7 million EUR). This increase is impacted by the higher activity and increasing purchase
and sales prices. Capital expenditure amounted to 95.9 million EUR in 2021, in line with prior year (100.2
million EUR). The operational free cash flow excluding the impact of IFRS 16 Leases amounts to 167.2
million EUR in 2021 compared to 190.0 million EUR in 2020.
As per year-end 2021, group net financial debt amounts to 74.8 million EUR, which implies a leverage of
0.2x (2020: 201.3 million EUR or a leverage of 0.6x). Short-term borrowings for 211.4 million EUR and
193.6 million EUR long-term borrowings are partially compensated by cash and cash equivalents (320.3
million EUR) and short-term investments (10.0 million EUR of short-term bank notes with maturity date
in January 2022). The short-term borrowings include the bond, issued in 2015 with a maturity of 7 years,
for an amount of 165.5 million EUR, which will mature in July 2022. Excluding the IFRS 16 lease liabilities,
group net financial debt would have amounted to 20.8 million EUR compared to 147.8 million EUR as per
year-end 2020.
The 2021 profit amounts to 188.3 million EUR compared to 98.6 million EUR in 2020. The profit (+) / loss
(-) was impacted by exchange gains and losses, mainly on non-hedged intercompany loans and cash and
cash equivalents in USD. Excluding these exchange gains and losses, the profit (+) / loss (-) for 2021 would
have amounted to approximately 173 million EUR, while the 2020 result would have amounted to
approximately 129 million EUR.
Tessenderlo Group 2021 annual report | 35
Reported operating segment performance
2021 Agro revenue increased by +31.4%, when excluding the foreign exchange effect. Revenue was
impacted by higher volumes and an increase of sales prices, implemented in 2021 to compensate the
higher raw material, energy and transportation costs. Also the start of the partnership agreement
between Tessenderlo Kerley International and Kemira Oyj (Kemira), announced in 2020, under which
Kemira produces premium SOP fertilizers (both standard and water-soluble grade) at its plant in
Helsingborg (Sweden) and Tessenderlo Kerley International partially markets these products, positively
impacted revenue.
When excluding the foreign exchange effect, the Adjusted EBITDA of Agro increased by +21.1% compared
to prior year. The Adjusted EBITDA of Crop Vitality and Tessenderlo Kerley International increased thanks
to favorable market circumstances, while the Adjusted EBITDA of NovaSource remained stable.
Bio-valorization revenue increased by +12.8% when excluding the foreign exchange effect, mainly thanks
to an improved product mix and market prices for fats and proteins that increased substantially.
The 2021 Adjusted EBITDA of Bio-valorization remained stable compared to prior year (-1.8% when
excluding the foreign exchange effect) as favorable market circumstances for fats and proteins were offset
by lower margins of some gelatin products.
Industrial Solutions revenue, when excluding the foreign exchange effect, increased by +21.2% in 2021,
mainly thanks to DYKA Group, where revenue was positively impacted by higher sales volumes and
increased sales prices, implemented to compensate the higher raw material, energy and transportation
costs. 2021 volumes were positively impacted by the full year contribution of the production plant in La
Chapelle-Saint-Ursin in France, which was acquired in HY20. Also, the growth of the product portfolio
positively impacted DYKA Group sales volumes, while HY20 DYKA Group volumes were negatively
impacted by the corona pandemic.
The Adjusted EBITDA of Industrial Solutions increased to 76.1 million EUR or increased by +43.9% when
excluding the foreign effect, being impacted by the increase of DYKA Group sales volumes, an improved
product mix and a further increase of production efficiency based on investments made. The significant
increase of raw material, energy and transportation costs was offset by timely pricing management.
The cessation of S8 Engineering had a positive impact on the 2021 evolution of the Adjusted EBITDA. The
contribution of Kuhlmann Europe increased, offset by a decrease of the Adjusted EBITDA of moleko.
In 2021 T-Power contributed 71.2 million EUR to the revenue and 52.2 million EUR to the Adjusted EBITDA
of the group. These results were in line with expectations, as T-Power nv fulfilled all tolling agreement
requirements.
The T-Power Adjusted EBITDA decrease in 2021 was due to the development expenses incurred for the
intended construction of a second gas-fired power station in the Belgian municipality of Tessenderlo.
Tessenderlo Group 2021 annual report | 36
Risk analysis
Analysis of the major risks for Tessenderlo Group nv – 2021
The Company analyzes on a regular basis the risks related to its activities worldwide. The Group Risk
Manager coordinates the analysis and reports the various risks on the Group's radar to the Audit
Committee annually. Each year, all business units are requested to identify and evaluate the significant
risks related to their business units.
In 2021, the Group's focus was on the following activities:
• Dealing with the risks associated with COVID-19 and the impact on our business
• Cybersecurity
• The risks associated with the climate
• Compliance
Ethics and Compliance
Risks can arise from potential failure to comply with the Code of Conduct of Tessenderlo Group nv and
the supporting internal procedures, as well as from changes to and application of the laws and regulations
in the various jurisdictions in which Tessenderlo Group nv operate.
Tessenderlo Group has a Code of Conduct that is regularly updated and supplemented with more specific
guidelines. The Code of Conduct includes a possibility to report rule violations to the hierarchical superior
and, if necessary, the Compliance Officer.
In order to manage the risk, training is organized worldwide on the application of the Code of Conduct,
handling of confidential information and compliance with competition rules.
Within the Company there is also a Compliance Committee, which devotes itself to coordinating
compliance activities within the group, defining procedures and various training programs organized for
the group.
In 2021, the Compliance Committee focused on reviewing and updating the existing compliance
procedures and codes and the development and implementation of 4 training programs related to the
following compliance areas: Anti-trust, Intellectual Property and handling confidential information, anti-
bribery and corruption and Incoterms® 2020.
Safety
Safety at the workplace
A safety event which impacts the employees, sites, assets, environment or critical information could have
negative consequences for the Company. In order to manage and prevent risks, Tessenderlo Group has a
strict safety policy in order to protect the employees.
In order to guarantee a limitation of the safety risks there are various initiatives on local and site level,
and on group level there is a Group Safety Working Group which primarily aims to evaluate and coordinate
the various actions within the Company. It is the culture of the company to put safety in the workplace
first and make each individual responsible for it.
Tessenderlo Group 2021 annual report | 37
Cybersecurity
In the Company there is a data protection policy in order to protect sensitive and confidential information
within the group and programs are set up in order to manage security risks with regard to ICT and enhance
cybersecurity within the group. A major cyber-attack could have a negative impact on the Company's
operations and results. Therefore, within Tessenderlo Group, cyber defenses continue to improve to cope
with the developments in cyber-attacks. Within the group, security risk management is carried out as
follows:
• The group has appointed a Chief Information Security Officer;
• External experts carry out independent assessments of the risks. Based on this analysis, a plan is
developed to better protect the company against cyber-attacks.
In 2021:
• End-user safety training will remain mandatory for all employees. To increase employee
awareness, cybersecurity tips are published regularly and simulations of various phishing
campaigns are carried out;
• The company has acquired several ICT tools that allow us to increase the cybersecurity of the
group's systems;
• The cybersecurity team was reinforced with additional security specialists;
• Tessenderlo Group continues to improve its cybersecurity strategy and management, to further
develop its corporate information security program, and to investigate other functions/
opportunities to improve the company's security status and response to cyber-attacks. Therefore
a clear road map has been elaborated with several projects that will be carried out in the coming
years.
Operational risks and risks with regard to supply chain
Industrial safety
A major accident such as fire, explosion or release of harmful substances may result in possible fatalities,
life-altering injuries, harm to the environment or local communities. As explained hereabove, safety on
the workplace is a top priority within the group. The group also has an insurance program to limit the
financial impact of the risks.
Transport accidents
An accident with chemical substances may result in risk of injuries to neighbors or the public. Within the
Company there are various transport safety programs in order to reinforce prevention and safety.
Furthermore, the group has an insurance program to limit the financial consequences of the risks on
transport accidents.
Usage of the Tessenderlo Group products
The usage risk stems from the possibility of third parties being injured, suffering an adverse health impact
or property damage caused by the use of a Tessenderlo Group product or the inappropriate use of some
Tessenderlo Group products for applications and/or markets for which the product is not designed or not
in accordance with Tessenderlo Group’s instructions for use.
Tessenderlo Group 2021 annual report | 38
Possible consequences are exposure to liability for injury or damage and product recalls. Product liability
risk is the highest for products used in crop protection, food and healthcare applications.
Apart from the various measures taken in order to inform third parties on the specifications and use of
the product and to regularly assess and adjust product risks in line with regulations, the group has an
insurance program in order to limit the financial impact of product liability risk.
Market risk and strategic risks
Volatility of certain raw materials and logistics costs
The Company is particularly sensitive to the fluctuations of the following raw materials: ammonia,
potassium chloride and sulfur for the production of fertilizers, polyvinyl chloride for the production of
plastic piping systems and pig and beef bones and hides for the gelatin production, and sensitive to the
evolution of logistic costs.
The group's most important purchase contracts are centralized at group or business unit level. This
method allows the Company to strengthen its negotiating position. To the extent possible, price
fluctuations are, where possible, translated into its sales prices of the products.
The Company is often active in markets and activities that are highly regulated by, among other things,
strict rules and environmental provisions. The Company cannot guarantee that in the future there will
be no sudden or significant changes to, on the one hand, existing laws or regulations or, on the other
hand, to trends where environmental awareness and sustainability requirements are central. Our
Stakeholders may find that the Company and its subsidiaries have not responded adequately to these
trends and that this may consequently have an impact on our business and financial results. These changes
and the costs of adapting to them could have a significant impact on the activities.
The Company ensures that, in the case of new investments or expansions, it always takes into account the
impact on the environment and the sustainability of the solution in the long term in its decision. Moreover,
with its activities in the Bio-valorization and Industrial Solutions segments, Tessenderlo Group plays in a
closed loop model by reusing and valorizing different sources of raw materials.
Tessenderlo Group plays an important role in the transition to a low-carbon future. We do this with
materials that respond to global trends of clean air and e-mobility, while our closed loop model conserves
resources.
Other risks
Climate change
Particularly in the Agro and the Industrial Solutions segments, exceptional weather conditions, such as
sustained heat waves, flooding or natural disasters can have an important impact on the operational
results.
Risks associated with climate change are increasing in frequency and severity, inducing challenges with
rising input costs (energy, water, and materials…) and ultimately risks for our assets. This trend requires a
more comprehensive approach to managing the risks relevant to the changing environment in which the
company operates and which ensures our stakeholders that our future growth is sustainable.
Tessenderlo Group 2021 annual report | 39
Risk of an outbreak of an epidemic with a large geographical reach or pandemic
Due to its global presence, the group may be subject to the consequences of the local or worldwide spread
of viruses that pose a risk to public health and may be serious and unexpected. Such outbreaks may have
an impact on social life and the economy. The Company believes that it is difficult to estimate the impact
that the regional spread of viruses or a pandemic could have on the economies in which we operate, and
therefore the impact that these factors could have on our financial results.
In the context of the coronavirus outbreak, the Company has taken some specific health, travel and safety
measures in order to protect the employees and other persons from the disease in accordance with the
guidelines imposed by the local authorities. These measures include rules on working from home, wearing
a mouth mask at work and also respecting distance rules.
In 2021 several continuity plans were updated to avoid any disruption of the supply chain due to the
pandemic or any other crisis situation.
Political risk
The current conflict in Ukraine and the subsequent economic and financial sanctions imposed could
negatively affect the supply of MOP (muriate of potash). MOP is the key raw material used for the
production of SOP (sulfate of potash) fertilizers that are produced at Tessenderlo Kerley Ham (Belgium),
within the Tessenderlo Group Agro segment. Tessenderlo Group currently sources MOP from Russia and
Belarus, as well as some other countries.
In 2021 the group has started to review its sourcing form alternative sources.
Analysis of the financial risks
1
Foreign currency risk
The group is exposed to fluctuations in exchange rates which may lead to profit or loss in currency
transactions. The group’s assets, earnings and cash flows are influenced by movements in foreign
exchange rates. More in particular, the group incurs foreign currency risks on, amongst others, sales,
purchases, investments and borrowings that are denominated in a currency other than the group’s
functional currency. The currency giving rise to this risk is primarily the USD (US dollar). Movements in
foreign currency therefore may adversely affect the group’s business, results of operation or financial
condition.
Subsidiaries are required to submit information on their net foreign exchange positions when invoiced
(customers, suppliers) to Tessenderlo Group nv, the parent company. All the positions are netted at the
level of Tessenderlo Group nv and the net positions (long/short) are then sold or bought on the market.
The main management tools are the spot purchases and sales of currencies followed by currency swaps.
Group borrowings are generally carried out by the group’s holding and finance companies, which make
the proceeds of these borrowings available to the operating entities. In principle, operating entities are
financed in their functional currency. The group does not use currency swaps to hedge intragroup loans.
1
For a more detailed overview of the financial risks related to the situation in 2021 and the Tessenderlo Group policy regarding the management
of such risks, please see the Financial Instruments section in the Financial Report (note 26 - Financial instruments).
Tessenderlo Group 2021 annual report | 40
In emerging countries, it is not always possible to borrow in local currency because local financial markets
are too narrow, funds are not available or because the financial conditions are too onerous. Those
amounts are relatively small for the group.
Credit risk
The group is subject to the risk that the counterparties with whom it conducts its business (in particular
its customers) and who have to make payments to the group, are unable to make such payments in a
timely manner or at all. In order to manage its credit exposure, a credit committee per business unit has
been created to determine a credit policy with credit limit requests, approval procedures, continuous
monitoring of the credit exposure and dunning procedure in case of delays. The group has moreover
globally elaborated a credit insurance program to protect accounts receivable from third party customers
against non-payment. Every legal entity of the group is participating to this program and the insurance is
provided by highly top rated international credit insurance companies. A large majority of the receivables
(around 95%) is covered under this group credit insurance program. The contract protects the insured
activities against non-payment with a deductible of 10% and foresees an indemnification cap at group
level. The program foresees a pay-out of the insured claims within 6 months after due date.
The group has no significant concentration of credit risk. However, there can be no assurance that the
group will be able to limit its potential loss of proceeds from counterparties who are unable to pay in a
timely manner or at all. The liquidities available at year-end are deposited for a short term at highly rated
international banks.
The maximum exposure to credit risk amounts to 726.1 million EUR as per December 31, 2021 (2020:
542.2 million EUR). This amount consists of current and non-current trade and other receivables (384.7
million EUR), the loans granted (10.5 million EUR), short term investments (10.0 million EUR) current
derivative financial instruments (0.6 million EUR) and cash and cash equivalents (320.3 million EUR).
Interest risk
Changes in interest rates may cause variations in interest income and expenses resulting from interest-
bearing assets and liabilities. In addition, they may affect the market value of certain financial assets,
liabilities and instruments.
At the reporting date, the group’s interest-bearing financial instruments were:
(Million EUR)
2021
2020
Fixed rate instruments
Cash and cash equivalents
159.8
171.5
Short term investments
10.0
20.0
Loans and borrowings
288.5
289.9
Variable rate instruments
Cash and cash equivalents
160.4
58.6
Loans and borrowings
116.5
161.4
Bank overdrafts
0.1
0.0
The loans and borrowings with a variable rate mainly relate to the long-term facility loan of T-Power nv.
The decrease compared to prior year can be explained by the two half-yearly reimbursements (25.7
million EUR). The remaining outstanding capital of the T-Power nv long term facility loan amounts to 115.8
million EUR as per December 31, 2021 (2020: 141.5 million EUR).
Tessenderlo Group 2021 annual report | 41
Approximately 80% of the loan is hedged through a series of forward rate agreements (the EURIBOR was
fixed at 5.6% per annum). Movements in interest rates would therefore not have a significant impact on
the group’s cash flow or result.
The remaining loans and borrowings with a variable rate in 2020 could be mainly explained by the
commercial paper program (19.0 million EUR), while no balance was outstanding as per December 31,
2021.
Liquidity risk
Liquidity risk is defined as the risk that a company may have insufficient resources to fulfill its financial
obligations at any time. Failure to meet financial obligations can result in significantly higher costs, and it
can negatively affect reputation.
Liquidity risk for the group is monitored through the group’s corporate treasury department which tracks
the development of the actual cash flow position of the group and uses input from subsidiaries to project
short and long-term forecasts in order to adapt financial means to forecasted needs. Surplus cash is
invested in short-term deposits with appropriate maturities to ensure sufficient liquidity is available to
meet liabilities when due.
In order to limit the liquidity risk, the group has access to:
- a factoring program, set up at the end of 2009, and which was put on hold since 2015.
- a Belgian commercial paper program of maximum 200.0 million EUR (no amount outstanding as
per December 31, 2021, compared to an outstanding amount of 19.0 million EUR one year earlier).
- committed bi-lateral agreements till 2024 for a total amount of 142.5 million EUR (of which part
can be drawn in USD) with four banks. These committed bi-lateral agreements have no financial
covenants and ensure maximum flexibility for the different activities. As per December 31, 2021
none of these credit lines were used.
According to the decision of the extraordinary general meeting of June 6, 2017, the Board of Directors
was also granted the authority to increase the share capital, in one or more times, up to an amount of
43.2 million EUR (authority till June 25, 2022).
Tessenderlo Group 2021 annual report | 42
Corporate Governance statement
Transparent management
Tessenderlo Group nv follows the Belgian legislation as reference code for Corporate Governance. In case
that the Company does not comply with one or more provisions of this code, it shall indicate with which
provision it is not complying and give justified reasons for this deviation. The Belgian Corporate
Governance Code is available at: www.corporategovernancecommittee.be/en/home.
The Company’s adherence to the principles of Corporate Governance is reflected in the Corporate
Governance Charter (hereinafter referred to as the “Charter”). The Charter is available at
https://www.tessenderlo.com/en/about-us/corporate-governance/corporate-governance-charter.
On October 27, 2020, the Board of Directors of the Company approved the new changes of the Corporate
Governance Charter following the conversion of the European Shareholders’ Directive II (SRDII) in the
Belgian Code of Companies and Associations (‘BCCA’).
Capital & shares
Capital
The share capital of Tessenderlo Group nv at December 31, 2021, amounts to 216,231,862.15 EUR.
Shares
The share capital at December 31, 2021, is represented by 43,154,979 shares without par value, entitling
the shareholder to one vote per share.
By decision of the extraordinary general meeting of shareholders of July 10, 2019, the loyalty voting right
has been introduced. As a consequence, each share which has been fully paid up and which is registered
in the name of the same shareholder in the register of registered shares since at least two uninterrupted
years, gives right to a double vote in accordance with the BCCA. All Tessenderlo Group nv’s shares are
admitted for listing and trading on Euronext Brussels.
Pursuant to the decision of the extraordinary general meeting of June 6, 2017, the Board of Directors is
authorized, for a period of 5 years from the publication of the authorization in the Annex of the Belgian
Official Gazette, to repurchase, in accordance with the conditions set by law, the company’s shares, profit-
sharing certificates or certificates relating thereto for the account of the company, taking into account the
conditions as determined during the extraordinary general meeting of June 6, 2017.
Pursuant to this decision the Board of Directors at its meeting on August 25, 2020, approved the proposal
to purchase own shares up to a maximum amount of EUR 5 million during a period starting on September
14, 2020 and ending on April 30, 2022. At the meeting of the Board of Directors on July 7, 2021, the
proposal to purchase own shares up to a maximum amount of EUR 25 million during a period ending on
October 27, 2021 was approved. This buy-back program that closed on October 27, 2021, has not resulted
in effective purchases.
At its meeting on October 27, 2021, the Board of Directors renewed the approval to purchase own shares
up to a maximum amount of EUR 5 million.
The share buy-back is intended to provide for the pay out in shares of the Long Term Incentive plan. This
authorization ends on the next general meeting of May 10, 2022.
Tessenderlo Group 2021 annual report | 43
The company owned on December 31, 2021, in total 132,000 company’s shares or 0.306% of the total
amount of issued shares (being 43,154,979).
Shareholders & shareholders structure
On the basis of the notifications provided to the Company, the status of the voting rights of the Company
at December 31, 2021, is as follows:
Shareholder
Number of shares
Number of voting
rights
% voting rights
Verbrugge nv (controlled by Picanol nv)
20,575,699
38,533,061
61.03%
Symphony Mills nv
2,532,200
4,346,200
6.88%
Norges Bank
1,287,899
1,287,899
2.04%
Carmignac Gestion SA
903,687
903,687
1.43%
Dimensional Fund Advisors L.P.
891,022
891,022
1.41%
Own shares
132,000
0
0.00%
Other
16,832,472
17,172,312
27.20%
Total
43,154,979
63,134,181
100.00%
Verbrugge nv is controlled by Picanol nv, which in turn is controlled by Artela nv. Artela nv and Symphony
Mills nv are controlled by Mr. Luc Tack. At the date of this report, the Company has no knowledge of any
agreements made between the shareholders.
Shareholders whose stake in Tessenderlo Group nv’s capital surpasses the threshold of 1%, 3%, 5%, 7.5%
and each multiple of 5%, in either direction, are required to notify the Belgian Financial Services and
Markets Authority (FSMA) (TRP.Fin@fsma.be) and Tessenderlo Group nv
(kurt.dejonckheere@tessenderlo.com).
Tessenderlo Group 2021 annual report | 44
Governance structure
The Company has opted for the monistic structure with a Board of Directors authorized to carry out all
acts necessary or useful for the realization of the Company’s objective, with the exception of those
reserved by law to the general shareholders’ meeting.
Board of directors
Composition
At December 31, 2021, the composition of the Board of Directors of Tessenderlo Group nv was as follows:
Start of initial term
End of term
Non-Executive Directors
Mr. Karel Vinck
March 17, 2005
May 9, 2023
Independent Non-Executive Directors
Management Deprez bv represented by its permanent
representative Mrs. Veerle Deprez
June 6, 2017
May 13, 2025
ANBA bv represented by its permanent representative
Mrs. Anne-Marie Baeyaert
June 6, 2017
May 13, 2025
Mr. Wouter De Geest
11 May 2021
May 9, 2023
Executive Directors
Mr. Luc Tack
November 13, 2013
May 9, 2023
Mr. Stefaan Haspeslagh – Chairman
November 13, 2013
May 10, 2022
The composition of the Board of Directors fulfils the objective of assembling complementary skills in terms
of age, competencies, experience, and business knowledge.
On December 31, 2021, the Board of Directors was in full compliance with the Law of July 28, 2011,
requiring that as of January 1, 2017, one-third of the members of the Board of Directors should be of a
different gender. All meetings of the Board of Directors were attended by the Secretary of the Board of
Directors and the Vice President Finance and Investor Relations.
.
Tessenderlo Group 2021 annual report | 45
Activities
The Board of Directors convened according to a previously determined schedule. The Board of Directors
met nine (9) times during 2021.
During 2021, the Board’s main areas of discussion, review and decision were:
- the group’s long-term strategy;
- the financial statements and reports;
- the 2021 budget;
- the financial communication and reporting by segment;
- proposals to the general shareholders’ meeting;
- the approval of the proposal to (re)appoint directors, to (re)appoint members of the audit
committee and of the nomination and remuneration committee and to appoint a new president
of the audit committee;
- the remuneration policy and the remuneration of the members of the Executive Committee and
directors (decision not to grant remuneration in the form of shares for the Non-Executive
directors and the ExCom for 2021, and the decision not to fix a minimum threshold of the amount
of shares to be held by the ExCom for 2021);
- the proposal to the general shareholders’ meeting to adjust the remuneration of the directors
and chairman of the board;
- the approval of the payout of the long-term incentive plan 2019-2021 for members of the ExCom
and senior management as well as the approval of a new long-term incentive plan 2022-2024 for
members of the ExCom and senior management;
- the effectiveness of the Enterprise Risk Management;
- the approval of various commercial agreements;
- the approval of important contracts, various new investments and acquisitions;
- related party transaction procedure;
- the approval of the 2022 budget;
- the approval of the proposals to repurchase own shares.
Evaluation of the Board of Directors
Evaluations of the functioning of the Board of Directors, the Nomination and Remuneration Committee
and the Audit Committee are performed periodically. In the context of such evaluations, the members
can give a scoring (from 1-5) on different subjects relating to the board and committee functioning and
can share their views on areas for improvement.
Such evaluations are performed through the use of a self-assessment questionnaire developed by the
Secretary of the Board of Directors. The exercise focuses primarily on the following domains: role,
responsibilities and the composition of the Board of Directors and the committees, the interactions
between Directors, the conduct of the meetings and evaluation of the training and resources used by the
Board of Directors and/or the committees.
Where appropriate, the individual Directors also share their view on how the Board of Directors and the
committees could improve their operation. The Chairman and the Secretary of the Board of Directors
share the results of the evaluation with the Directors and formulate initiatives for improvement. The
assessment of the Board of Directors was conducted in 2019 and of the committees in 2020 and will be
performed again in 2023 and 2024, respectively.
Tessenderlo Group 2021 annual report | 46
Appointment of the members of the Board of Directors
In its selection process for members of the Board, the Board integrates criteria such as variety of
competences, age and gender diversity.
Board Committees
General
On December 31, 2021, the following Committees were active within the Board of Directors of
Tessenderlo Group:
• The Nomination and Remuneration Committee
• The Audit Committee
Please see the Charter for a description of the operations of the various Committees on
www.tessenderlo.com.
Nomination and Remuneration Committee
On December 31, 2021, the Nomination and Remuneration Committee was constituted as follows:
- Mr. Karel Vinck (Chairman)
- Management Deprez bv represented by its permanent representative Mrs. Veerle Deprez
(Independent)
- Mr. Wouter De Geest (Independent)
A majority of the members of the Nomination and Remuneration Committee meets the independence
criteria set forth by Article 7:87 §1 of the BCCA and the Corporate Governance Charter and the committee
demonstrates the skills and the expertise requested in matters of remuneration policies as required by
Article 7:100 of the BCCA.
The Nomination and Remuneration Committee met three (3) times in 2021.
• Activities of the Nomination and Remuneration Committee
In 2021, the Nomination and Remuneration Committee discussed and made recommendations regarding
the Executive Committee remuneration package. The Committee made recommendations regarding the
pay-out of the long-term incentive plan 2019-2021 for the ExCom and senior management and for the
establishment of a new long-term incentive plan 2022-2024 for members of the ExCom and senior
management. The Committee also made recommendations with regard to the adjustment of the
remuneration to the Directors and the Chairman of the Board of Directors and with regard to the
allocation of remuneration to the Non-Executive Directors and the ExCom in the form of shares, and the
determination of a minimum threshold of shares to be held by the ExCom. The Nomination and
Remuneration Committee determined the remuneration policy and also prepared the remuneration
report, as included in the 2021 annual report.
In compliance with the Corporate Governance Charter, the majority of the members of the Nomination
and Remuneration Committee are independent.
• Evaluation of the Nomination and Remuneration Committee
For information on the evaluation process of the Nomination and Remuneration Committee, please refer
to the section “Evaluation of the Board of Directors”.
Tessenderlo Group 2021 annual report | 47
Audit Committee
At December 31, 2021, the Audit Committee was constituted as follows:
- ANBA bv represented by its permanent representative
Mrs. Anne-Marie Baeyaert (Independent) (Chairman)
- Mr. Karel Vinck
- Mr. Wouter De Geest (Independent)
The Audit Committee met according to a previously determined schedule; i.e. four (4) times during 2021.
The CEO, the COO-CFO, the Vice President Finance and Investor Relations, the Group Internal Auditor as
well as the statutory auditor attended the meetings of the Audit Committee. The other Directors were
invited to participate to the meetings of the Audit Committee without any voting rights.
As legally required, the Audit Committee has among its members at least one independent Director with
the necessary accounting and auditing expertise.
The members of the Audit Committee fulfil the criterion of competence with their training and by the
experience gathered during their previous functions. In compliance with the Charter, the majority of the
members are independent Directors.
• Evaluation of the Audit Committee
For information on the evaluation process of the Audit Committee, please refer to the section “Evaluation
of the Board of Directors”.
• Activities of the Audit Committee
In addition to monitoring the integrity of the quarterly financial statements and financial results press
releases per semester, including disclosures, consistent application of the valuation and accounting
principles, consolidation scope, closing process quality and accounting estimates, the Audit Committee
heard reports from the external auditors regarding the year-end audit scope, the internal control system,
the key audit matters and the valuation and accounting treatment of certain exceptional items.
The Audit Committee also addressed specific topics such as monitoring the effectiveness of the Enterprise
Risk Management and the cybersecurity. The Audit Committee made recommendations regarding the
further follow-up of improvement actions. Further, the Audit Committee reviewed the status of the major
pending litigations.
The Audit Committee also followed up on the findings and recommendations of the external auditors,
reviewed their independence and approved requests for non-audit services.
The Audit Committee also heard the Group Internal Auditor on the Internal Audit program for 2021, the
risk assessment analysis and the activity reports of the internal audits which had been carried out, as well
as on the review of the follow-up actions taken by the Company to remedy certain weaknesses identified
by the Internal Audit Department. The Audit Committee also approved the internal control plan for the
year 2021 and heard reports from the Internal Control Department on its various findings.
Tessenderlo Group 2021 annual report | 48
Attendance rate for members of the Board of Directors meetings and members of the committee
meetings in 2021:
Board of Directors
Audit Committee
Nomination &
Remuneration
Committee
Number of meetings in 2021
9
4
3
Philium bv represented by its
permanent representative
Mr. Philippe Coens (until 11.05.2021)
1/9
1/4
1/3
Mr. Stefaan Haspeslagh
9/9
Mr. Luc Tack
9/9
Mr. Karel Vinck
9/9
4/4
3/3
Mr. Wouter De Geest (as of 11.5.2021)
8/9
3/4
1/3
Management Deprez bv represented by its
permanent representative
Mrs. Veerle Deprez
9/9
3/3
ANBA bv represented by its permanent
representative Mrs. Anne-Marie Baeyaert
9/9
4/4
Executive committee (ExCom)
Roles and responsibilities
As per December 31, 2021, the ExCom of Tessenderlo Group was constituted as follows:
- Mr. Luc Tack (CEO)
- Mr. Stefaan Haspeslagh, representative of Findar bv (COO-CFO)
Evaluation of the ExCom
At least once a year, the ExCom reviews its own performance.
Activities of the ExCom
The Board of Directors has empowered the ExCom to enable it to perform its responsibilities and duties.
Taking into account the Company’s values, its risk appetite and key policies, the ExCom shall have
sufficient latitude to propose and implement the corporate strategy.
The CEO chairs the ExCom and ensures its organization and proper operation. In principle, the ExCom
meets every week, and additional meetings may be convened at any time by any of its members. On a
monthly basis the ExCom meets with the company’s Business Units in order to review and discuss the
strategic decisions and the operational performance of the Business Units. A comparable performance
dialogue is organized with representatives of the supporting group functions.
Tessenderlo Group 2021 annual report | 49
The ExCom is responsible for:
- running the Company;
- overseeing the proper organization and operation of the Company, ensuring oversight of its
activities, including the introduction of internal control processes for the identification,
assessment, management and monitoring of financial and other risks;
- the appointment of senior executives of the Company and determination of the senior executives
remuneration policies*;
- the main decisions and investments involving amounts under the thresholds as defined by the
Board of Directors;
- preparing the proposals for decisions on those matters under the competence of the Board of
Directors, including the complete, timely, reliable and accurate preparation of the Company’s
annual accounts, in accordance with the applicable accounting standards and policies of the
Company, as well as the Company’s required disclosure of the financial statements and other
material financial and non-financial information;
- presenting to the Board of Directors a balanced and understandable assessment of the Company’s
financial situation;
- providing the Board of Directors in due time with all information necessary for the Board of
Directors to carry out its duties;
- executing and implementing the decisions taken by the Board of Directors.
The ExCom tasks are further described in the ExCom terms of reference as set out in Exhibit G of the
Corporate Governance Charter.
*The Senior Executives of the Company are those executives who together with the ExCom manage and determine the strategy of the Businesses
as well as the Heads of the Functional departments.
Remuneration report
The remuneration report provides an overview of how the remuneration philosophy and the policy of
Tessenderlo Group for Executive and Non-Executive Directors are reflected and how the remuneration
for Directors is determined taking into account the individual and business related performance. The
Nomination and Remuneration Committee supervises the remuneration policy and the corresponding
remuneration for Executive and Non-Executive Directors.
Remuneration Board members
By decision of the General Shareholders’ Meeting of May 11, 2021, each Director receives a fixed annual
fee of 27,500 EUR. This remuneration covers the activities as member of the Board of Directors, the Audit
Committee and the Nomination and Remuneration Committee. Moreover, the following additional fees
will be granted:
- an attendance fee of 1,000 EUR per half meeting day;
- an additional annual fee of 72,500 EUR for the chairman of the Board of Directors; and
- an additional annual fee of 3,000 EUR for the chairman of the Audit Committee.
These rules apply to fees which are granted as from January 1, 2021.
Remuneration is paid during the year in which the meetings were held. The attendance fee of 1,000 EUR
is also attributed to the directors who attend the meeting as invitee.
Tessenderlo Group 2021 annual report | 50
In its meeting of March 23, 2021, the Board of Directors decided not to grant remuneration in shares for
fees paid to the Non-Executive Directors for the year 2021.
Remuneration received
Member
2021
Earned fees (in EUR)
Philium bv, represented by its permanent
representative Mr. Philippe Coens
(Independent Non-Executive director)
(director until the end of the general
meeting of 11.5.2021)
Fixed annual fee
Additional fixed fee for Chairman of AC
Attendance fee per half day attended
Total remuneration
9,869
1,076
2,000
12,946
Management Deprez bv, represented by
its permanent representative Mrs. Veerle
Deprez (Independent Non-Executive
director)
Fixed annual fee
Attendance fee per half day attended
Total remuneration
27,500
9,000
36,500
ANBA bv, represented by its permanent
representative Mrs. Anne-Marie Baeyaert
(Independent Non-Executive director)
Fixed annual fee
Additional fixed fee for Chair of AC
Attendance fee per half day attended
Total remuneration
27,500
1,923
9,000
38,423
Wouter De Geest (Independent Non-
Executive director (director as of 11.5.2021)
Fixed annual fee
Attendance fee per half day attended
Total remuneration
17,630
7,000
24,630
Stefaan Haspeslagh
(Executive Director)
Fixed annual fee
Additional fixed annual fee for
Chairman Board
Attendance fee per half day attended
Total remuneration
27,500
72,500
9,000
109,000
Luc Tack
(Executive Director)
Fixed annual fee
Attendance fee per half day attended
Total remuneration
27,500
9,000
36,500
Karel Vinck
(Non-Executive director)
Fixed annual fee
Attendance fee per half day attended
Total remuneration
27,500
9,000
36,500
General total
294,500.00
Tessenderlo Group 2021 annual report | 51
The Company does not grant any remuneration in the form of shares to the Non-Executive Directors for
2021, as it is of the opinion that a payment in shares does not have a positive impact on decisions of these
Directors that support the long term vision of the Company, given the presence of a reference shareholder
who aims to create sustainable value within the Company.
Remuneration Executive Committee (ExCom)
The ExCom remuneration package consists of the following items:
- Fixed compensation
- Variable compensation
- Other compensation items
Each year, the Nomination and Remuneration Committee evaluates the appropriate compensation of the
ExCom. These recommendations result from objective third party market studies, to ensure the
competitiveness of the compensation packages and to stay in line with market movements.
Compensation of the COO-CFO is reviewed on an annual basis by the Nomination and Remuneration
Committee on the recommendation of the CEO, while compensation of the CEO is reviewed by the
Nomination and Remuneration Committee on the recommendation of the Chairman of the Board of
Directors.
The ExCom was composed of the following individuals in 2021:
- CEO: Luc Tack
- COO & CFO (combined position): Stefaan Haspeslagh/Findar BVBA, represented by Stefaan
Haspeslagh
Application of the Remuneration Policy 2021 – remuneration outcome
All 2021 related remuneration decisions were taken in accordance with the approved remuneration
policy. A key recommendation made to the Board of Directors by the Nomination and Remuneration
Committee was the determination of the short and long term incentive payouts in reference to the
performance indicators and the assessment by the Nomination and Remuneration Committee of the
ExCom’s level of performance. This resulted in a payment above target for both the short and long term
incentives (see table). The Nomination and Remuneration Committee and the Board of Directors believe
that these short & long term incentives outcomes truly reflect the overall performance of the year 2021
and the overall results of the years 2019, 2020 and 2021.
Tessenderlo Group 2021 annual report | 52
The remuneration earned by the ExCom team in 2021 is detailed below:
Component
Amount CEO
Amount COO-CFO
Fixed compensation (excluding Director fees)
648,027 EUR
550,527 EUR
Variable compensation Short Term
1
587,781 EUR
666,152 EUR
Variable compensation Long Term
2
1,530,964 EUR
1,360,857 EUR
Pension
3
56,710 EUR
123,717 EUR
Other benefits
4
43,614 EUR
26,103 EUR
Total (cost to the company)
2,867,096 EUR
2,727,356 EUR
Proportion of fixed & variable remuneration
26% - 74%
26% - 74%
1. Short term incentive realization as proposed by the Nomination and Remuneration Committee of March 22,2022.
2. Long term incentive realization for the years 2019, 2020 & 2021 (3 year plan) as approved by the Nomination and Remuneration
Committee of March 22, 2022.
3. Combination of company pension plan and Individual Pension Contribution plan – annual service cost for 2021, as calculated by an
actuary.
4. Other benefits include coverage for death, disability, work accident insurance, meal vouchers, company car - all under the same
conditions applicable to other members of senior management and in accordance with the ruling approved by the Belgian tax
authorities for representation allowance.
Share base remuneration - Provision 7.9 of the Corporate Governance Code 2020
In line with previous years, Tessenderlo Group nv did not grant any remuneration in the form of shares or
stock options to the ExCom in 2021. Only the payment of the Long Term Incentive with respect to the
years 2019, 2020 & 2021 will be paid out in shares during the year 2022. It is of the opinion that a payment
in shares does not have a positive impact on decisions of the ExCom that support the long term vision of
the Company, given the presence of a reference shareholder who aims to create sustainable value within
the Company.
Severance pay
Given the fact that there was no change to the composition of the ExCom, no severance payment was
made in 2021 to any of the ExCom members .
Claw-back provision
Claw back provisions with respect to yearly variable compensation were included in the management
agreements of the executive directors. These claw back mechanisms did not have to be used for the year
2021.
Tessenderlo Group 2021 annual report | 53
Evolution of Executive Pay & Company Performance
The below table is a summary of the evolution of the total remuneration of the ExCom & the average
employee remuneration compared to the company’s performance over the last five years, represented
by a year on year growth of revenue and Adjusted EBITDA.
2017
2018
2019
2020
2021
ExCom
Total remuneration
ExCom*
2,002,944 EUR
2,160,888 EUR
2,057,190 EUR
2,517,218 EUR
2,702,631 EUR
Change year to year
+49.5 %
+7.9%
-4.8%
+22.4%
+7.4%
Company performance
Revenue
(change year to year)
+4.2%
-2.2%
+7.5%
-0.3%
+19.8%
Adjusted EBITDA
(change year to year)
-5.2%
-5.3%
+50.6%
+17.5%
+12.6%
Average FTE salary
increase**
+3.6%
+3.4%
+3.6%
+1.5%
+4.9%
* Excluding LTI as only one payment every 3 year
** Only Tessenderlo Group nv employees considered (listed company in Belgium)
Total Remuneration of CEO versus Lowest Remunerated Employee
The below table shows a comparison of the 2021 remuneration of the CEO to the 2021 remuneration of
the lowest paid fulltime Tessenderlo Group NV employee. The remuneration includes base salary only.
Variable remuneration, employee benefits & employer social security charges are not included.
2021
Ratio remuneration CEO vs remuneration lowest
Tessenderlo Group nv employee
1/17
Shareholders’ approval
This 2021 remuneration report was approved by the Nomination and Remuneration Committee and by
the Board of Directors on March 22, 2022. The remuneration report 2021 will be submitted for approval
to the General Meeting of May 10, 2022. This remuneration report is also in line with the proposed
remuneration policy 2021 which was approved by the General Meeting of May 11, 2021.
Main features of the group’s internal control and risk management framework
Internal control framework
Responsibilities
The Board of Directors delegated the task of monitoring the effectiveness of the Internal Control System
to the Audit Committee.
The ultimate responsibility for the implementation of the Internal Control System is delegated to the
ExCom.
Tessenderlo Group 2021 annual report | 54
The daily management of each Business Unit is accountable for the implementation and maintenance of
a reliable Internal Control System.
The Internal Audit & Control department assists the Business Units and the Tessenderlo Group
Headquarters functions in the implementation and assessment of the effectiveness of the Internal Control
System in their organization.
The levels of internal control are tailored to the residual risk that is acceptable to the management. The
ultimate objective is to reduce possible misstatements of the financial statements as published by the
group.
Scope of the Internal Control Framework
The Internal Control System is based on the COSO Internal Control – Integrated Framework with the main
focus on the internal control over the financial reporting by mitigating risks through group level controls,
entity level controls, process level controls, general IT controls and segregation of duties.
As far as cyber risks are concerned, a separate control program based on the NIST Cybersecurity
Framework has been set up.
Internal control monitoring
The Audit Committee is in charge of monitoring the effectiveness of the internal control systems. This
includes the supervision of the Internal Audit department about compliance monitoring.
The Internal Audit & Control department conducts a risk-based compliance audit program with the
objective to validate the internal control effectiveness in the various processes at entity and group level.
The ultimate goal of these reviews is to provide reasonable assurance on the reliability of the financial
reporting.
The implementation of the cybersecurity program is being followed up by a specific committee which
includes among others, the Group Audit Director and the Group Chief Information Security Officer.
The Group Audit Director is invited to the Audit Committee meetings. He informs the Audit Committee of
the planning and the results of the internal audits and the proper implementation of the
recommendations. A rating is used to indicate the severity of audit recommendations as well as to give
an overall appreciation of the audited entity or process.
Preparation and processing of financial and accounting information
A centralized controlling and reporting department coordinates and controls the financial and accounting
information.
Each Business Unit has a controlling department responsible for monitoring the performance of the
operational units.
The Financial and Accounting Information System is based on consolidation software that allows the group
to produce the required information.
Compliance
The Internal Audit & Control department is responsible for compliance testing of both the Internal Control
Framework and the key control procedures on the preparation and processing of financial and accounting
information and monitors compliance with internal policies and procedures as well as external laws and
regulations.
Tessenderlo Group 2021 annual report | 55
The group has a Compliance Coordination Committee. This committee, composed of representatives of
several headquarter functions, is responsible for the internal and external compliance program of
Tessenderlo Group. The committee periodically reports to the Audit Committee.
Enterprise Risk Management (ERM) System
Risks are an essential and inherent aspect of conducting business. The group has developed some policies
and procedures with the aim of managing and reducing risks to an acceptable level.
The Enterprise Risk Management policy applies to the Company and all of its affiliates worldwide. This
policy describes the organization and goals of the ERM system including the responsibilities at all levels of
management.
A risk management structure has been rolled out, both on group and on Business Unit levels in order for
risk management to become an inherent part of daily operations.
The Group conducts a risk scan to identify all significant risks (financial and non-financial) and for each risk
the potential impact, the probability, and the status of management or mitigation action are described in
detail. For each risk a responsible party is identified, as well as its responsibility.
The main consequences that are considered when assessing risks relate to: the market and strategy, the
impact on people, the disruption in the supply chain, the Company's operational activities, ethics and
compliance, financial results and security (ICT and cybersecurity).
The identified risks are assessed and monitored in the various business units and supporting functions.
The various risk management activities are reported on a regular basis to the ExCom and once a year to
the Audit Committee.
The aim of the implemented ‘Group Crisis Management policy’ is to standardize crisis management across
the group and all affiliates. The Risk Management department is the owner of this policy and responsible
for the coordination at group level and providing assistance and guidance to the various entities in the
development of a harmonized crisis plan, clarifying the responsibilities at all levels and establishing the
reporting channels.
Policy on inside information and market manipulation
The Company has issued a Dealing Code including a set of rules regulating the declaration and conduct
obligations regarding transactions in shares or other financial instruments of the Company carried out by
Directors, ExCom members and other designated persons for their own account. Such Dealing Code is
included in Exhibit I. of the Charter.
According to the Market Abuse Regulation, the Company has to take all reasonable steps to ensure that
any person on its insider list acknowledges in writing the obligations and its awareness of the sanctions
applicable to insider trading and the unlawful disclosure of inside information.
In accordance with the Dealing Code, the Board of Directors has appointed a Compliance Officer. The
Compliance Officer is responsible for supervising compliance with the Dealing Code. He/she is also the
point of contact for questions about the application of the Dealing Code. Mr. John Van Essche, Legal
Counsel, holds the title of Compliance Officer.
Tessenderlo Group 2021 annual report | 56
External audit
KPMG Réviseurs d'Entreprises/Bedrijfsrevisoren bv/srl, represented by Patrick De Schutter, was
appointed statutory auditor by the shareholders' meeting on 14 May 2019, following an audit tender bid
process.
The fees paid by the group to its auditor amounted to:
2021
(Million EUR)
Audit
Audit related
Other
Total
KPMG (Belgium)
0.2
-
0.0
0.2
KPMG
(Outside Belgium)
0.6
-
0.1
0.7
Total
0.9
0.0
0.1
0.9
2020
(Million EUR)
Audit
Audit related
Other
Total
KPMG (Belgium)
0.2
0.0
0.1
0.3
KPMG
(Outside Belgium)
0.7
-
0.0
0.7
Total
0.9
0.0
0.1
1.0
Tessenderlo Group 2021 annual report | 57
Subsequent events
• In February 2022, Tessenderlo Group announced that it intends to acquire the production plant and
the associated business of Pipelife France in Gaillon (Eure, France). The Gaillon plant specializes in the
manufacturing of pipes for gas, water, and cable protection. The transaction is expected to reach
completion in the course of 2022. After completion of the acquisition, Tessenderlo Group intends to
integrate the business within the DYKA Group business unit (Industrial Solutions segment). This
transaction will not materially impact the results of Tessenderlo Group.
• The group also announced that its growth unit Violleau plans to construct a new production line for
organic fertilizers in Vénérolles (Aisne, France). The new line will focus on the production of organic
pellets, responding to the rising demand for organic fertilizers. It is scheduled to be operational from
the first quarter of 2023 and it will be constructed on the site of Akiolis’ manufacturing plant in
Vénérolles. With effect from 2022, Violleau will be included in the Agro segment.
• In February 2022, Tessenderlo Group repurchased 35.0 million EUR of its outstanding 2022 bonds at
a price of 102.875%. This repurchase resulted in a cash-out of 36.0 million EUR and the remaining
amount of outstanding “2022 bonds” maturing in July 2022 stands at 130.5 million EUR. Also in
February 2022, the group agreed two term loan credit facilities for 30.0 million EUR each, with a
maturity of 7 years (starting April 2022) and a maturity of 5 years (starting August 2022) respectively.
These loans, with quarterly capital reimbursements, have a fixed interest rate of 1.16% and 0.94%
respectively, and contain no financial covenants. Both transactions will further reduce the liquidity
risk as well as the interest costs of the group.
• In early March 2022, Tessenderlo Group submitted a new permit application to the Flemish Region
for the construction of a new 900 MW combined cycle steam and gas turbine (CCGT) power plant in
Tessenderlo, Belgium. With a view to future auctions, Tessenderlo Group adjusted its previously
submitted project (an investment of approximately 500 million EUR) to respond to the objections that
led to the refusal of that application.
• The current conflict in Eastern Europe and the subsequent economic and financial sanctions imposed
are negatively affecting the supply and the cost prices of both raw materials and energy. In particular,
MOP (muriate of potash) is the key raw material used for the production of SOP (sulfate of potash)
fertilizers that are produced at Tessenderlo Kerley Ham (Belgium). Tessenderlo Group currently
sources MOP from Russia and Belarus, as well as some other countries. In this connection, the group
is in the process of reviewing its sourcing mix, and it is therefore currently not possible to determine
what the effect on the production would be, if any, although no significant impact is expected in the
first half of 2022. At present, it is also difficult to estimate the impact on the other activities of the
group.
Tessenderlo Group 2021 annual report | 58
Application of art. 7:96 and 7:97 of the Belgian code of companies and
associations (BCCA) (previously art. 523/524 of the Belgian code of companies)
In the meeting of the Board of Directors held on March 23, 2021, a conflict of interest was recorded in
respect of the ExCom members, who are part of the Board of Directors, in connection with the
determination of the short-term incentive for 2020 and the remuneration package for 2021 and the
targets of the long-term incentive. An extract of the minutes of this meeting is included in the statutory
annual report.
In the meeting of the Board of Directors held on October 27, 2021, a conflict of interest was recorded on
behalf of the ExCom members, who are part of the Board of Directors, in connection with the setting of
the incentive plan 2022-2024. An extract of the minutes of this meeting is included in the statutory annual
report. In 2021, no circumstances triggered the application of article 7:97 of the BCCA. However, in
compliance with the internal conflict of interest procedure, the Board of Directors was informed of a
standard market transaction relating to the rent out by Tessenderlo Kerley, Inc. of part of the HQ building
in Phoenix to Talalay Global, a company owned by the Tack family.
Information required by art. 34 of the royal decree of November 14, 2007
The share capital of the Company is represented by ordinary shares.
The extraordinary shareholders’ meeting of 6 June 2017 decided to authorize the Board of Directors, for
a period of 5 years from the publication of the authorization in the Annex to the Belgian State Gazette, to
increase the share capital, in one or more times, up to an amount of EUR 43.160.095 (forty three million
one hundred and sixty thousand ninety-five euros), in accordance with the provisions set out in the BCCA
and the articles of association of the company. The Board of Directors is allowed to use the authorized
capital to take protective measures for the Company through capital increases, with or without limitation
or withdrawal of preferential rights, even outside the context of a possible public takeover bid, to the
extent that the Company has not yet received a notification of the FSMA with respect to a public takeover
bid on its securities.
The Board of Directors is also authorized, with right of substitution, to amend the company’s articles of
association in accordance with the capital increase that was decided within the scope of the authorized
capital.
By decision of the extraordinary general meeting of shareholders of July 10, 2019 the loyalty voting right
has been introduced. As a consequence, each share which has been fully paid up and which is registered
in the name of the same shareholder in the register of registered shares since at least two uninterrupted
years, gives right to a double vote in accordance with the BCCA.
Each other share gives right to one vote at the general meeting.
The articles of association of the Company do not contain any restriction on the transfer of the shares.
The rules with respect to the appointment and resignation of Directors and amendments to the articles
of association of the Company as set forth in the articles of association of the Company do not deviate
from the applicable rules set forth in the BCCA.
Tessenderlo Group 2021 annual report | 59
The Company may, in accordance with the conditions set by law, acquire its own shares, profit-sharing
certificates, or certificates relating thereto, by way of a purchase or an exchange, directly or through the
intermediary of a person acting in its own name but for the account of the company, following a decision
of the shareholders’ meeting taken in accordance with the applicable requirements on quorum and
majority. Such decision in particular determines the maximum number of shares, profit-sharing
certificates or certificates relating thereto that can be acquired, the term for which the authorization is
granted and which may not exceed five years, as well as the minimum and maximum value of the
compensation.
Pursuant to the decision of the extraordinary general meeting of 6 June 2017, the Board of Directors is
authorized, for a period of 5 years from the publication of the authorization in the Annex of the Belgian
Official Gazette, to repurchase, in accordance with the conditions set by law, the company’s shares, profit-
sharing certificates or certificates relating thereto for the account of the company of which the accounting
par value, including the securities previously acquired by the company and held by it, is not higher than
10% (ten per cent) of the issued capital and at a price ranging between minimum 20% (twenty per cent)
below the average of the closing price of the company’s share during the last 30 trading days preceding
the Board’s resolution to acquire such securities, and maximum 20% (twenty per cent) above the average
of the closing price of the company’s share during the last 30 trading days preceding the Board’s resolution
to acquire such securities, it being understood that the price will never be lower than EUR 15 (fifteen euro)
or exceed EUR 50 (fifty euro).
In its meeting on August 25, 2020, the Board of Directors approved the proposal to purchase own shares
up to a maximum amount of 5 million EUR during a period starting on September 14, 2020, and ending
on April 30, 2022.
In its meeting on July 7, 2021, the Board of Directors approved the proposal to purchase own shares up
to a maximum amount of 25 million EUR during a period ending on October 27, 2021.
In its meeting on October 27, 2021, the Board of Directors approved the proposal to purchase own shares
up to a maximum amount of 5 million EUR during a period ending on the next General Meeting of May
10, 2022.
The Board of Directors is explicitly authorized according to the resolution of the extraordinary general
meeting of 6 June 2017 to dispose of the acquired securities that are listed, on or outside the stock
exchange, without the need for a prior consent or other intervention by the general meeting, without
prejudice to the fact that the disposal possibilities of the Board of Directors are further mandatory
organized under the new BCCA and these shall thus have to be respected in parallel by the Company for
the remaining period of the authorization granted by the general meeting within the framework of the
acquisition of own securities.
The aforementioned provisions equally apply to the acquisition or transfer of the Company’s securities by
the Company’s directly controlled subsidiaries or through the intermediary of a person acting in its own
name but for the account of these subsidiaries, in accordance with articles 7:221 and 7:222 of the BCCA.
Tessenderlo Group 2021 annual report | 60
Tessenderlo Group nv is a party to the following contracts which become effective, undergo changes or
terminate in case of a change of control over Tessenderlo Group nv after a public takeover bid:
• the bilateral revolving facilities agreements entered into on December 4, 2019, for a total amount
of 142.5 million EUR with the Company and Tessenderlo USA Inc. as borrowers and KBC Bank NV,
ING NV, Belfius Bank NV and BNP Paribas Fortis NV as lenders: according to the terms of these
agreements, a “change of control” over Tessenderlo Group nv will entitle each lender to ask for
termination of the bilateral facility agreement. For purposes of the change of control clause
described above, a “change of control” shall occur if a third party (i.e. any party other than
Verbrugge nv or any person acting in concert with Verbrugge nv) acquires 30% or more of the
voting rights of the Company (unless Verbrugge nv (alone or together with any person acting in
concert) holds more voting rights than such third party);
• the prospectus dated June 15, 2015, of Tessenderlo Group nv regarding the issue of and public
offer of two series of bonds with a maturity of 7 years (the “2022 Bonds”) and 10 years (the “2025
Bonds”, and together with the 2022 Bonds, the “Bonds”) for an expected minimum amount of
75.0 million EUR for the 2022 Bonds and an expected minimum amount of 25.0 million EUR for
the 2025 Bonds and for a combined maximum amount of 250 million EUR: according to the terms
and conditions of these Bonds, the Bonds will be redeemable at the option of the bondholders
prior to maturity in the case of a change of control. Only the Bonds held by the bondholders who
submit put option notices shall be immediately due and repayable in case of a change of control,
with exception of all other bonds. If bondholders submit put option notices in respect of at least
85 percent of the aggregate nominal amount of the outstanding 2022 bonds, all (but not some
only) of the 2022 bonds may be redeemed at the option of the Company prior to maturity. If
bondholders submit put option notices for at least 85 percent of the aggregate nominal amount
of the outstanding 2025 Bonds, all (but not some only) of the 2025 Bonds may be redeemed at
the option of the issuer prior to maturity.
A “change of control” shall occur if a third party (i.e. any party other than Verbrugge nv or any
person acting in concert with Verbrugge nv) acquires 30% or more of the voting rights of the
Company (unless Verbrugge nv (alone or together with any person acting in concert) holds more
voting rights than such third party).
Dividend policy
In 2021 Tessenderlo Group nv has not declared or paid dividends for the financial year ending on
December 31, 2020. The Company’s dividend policy may be amended from time to time, and each
dividend distribution remains subject to the Company’s earnings, financial condition, share capital
requirements and other important factors subject to proposal and approval by the competent corporate
body of the Company and subject to the availability of distributable reserves as required by the BCCA and
the articles of association. Any distributable reserves of the Company have to be computed in respect of
its statutory balance sheet prepared in accordance with Belgian GAAP, which may differ from the
consolidated financial statements in IFRS reported by the Company.
Tessenderlo Group 2021 annual report | 61
Information required by art. 3:6 Belgian code of companies and associations
Provision 3.12 of the Corporate Governance Code 2020
The current Chairman of the Company is an executive Director. The Company has carefully considered the
positive and negative aspects in favor of such a decision and has concluded that such appointment is in
the best interest of the Company given his extensive experience, expertise, in-depth knowledge and
proven track-record in relevant business environments. The Board of Directors furthermore clarifies that
Exhibit H of the Corporate Governance Charter provides additional conflict of interest procedures in case
any material transaction is being considered by the Company with a company in which Directors are also
a Director or Executive Director.
Provision 7.6 of the Corporate Governance Code 2020 with respect to remuneration of Non-Executive
Directors
The Company does not grant any remuneration in the form of shares to the Non-Executive Directors for
2021, as it is of the opinion that a payment in shares does not have a positive impact on decisions of these
Directors that support the long term vision of the Company, given the presence of a reference shareholder
who aims to create sustainable value within the Company.
Only the payment of the Long Term Incentive with respect to the years 2019, 2020 & 2021 will be paid
out in shares during the year 2022.
Provision 7.9 of the Corporate Governance Code 2020 with respect to remuneration of Executive
Directors
The Company does not grant any minimum threshold of remuneration in the form of shares to the ExCom
in 2021 nor a payment of the bonuses in shares, as it is of the opinion that a payment in shares does not
have a positive impact on decisions of the ExCom that support the long term vision of the Company, given
the presence of a reference shareholder who aims to create sustainable value within the Company.
Provision 8.7 of the Corporate Governance Code 2020 with respect to the conclusion of a relationship
agreement with its reference shareholder
The Company has not concluded an agreement with its reference shareholder Picanol nv due to its
representation in the Board of Directors of Tessenderlo Group.
Brussels, March 22, 2022
On behalf of the Board of Directors
Luc Tack Stefaan Haspeslagh
Director and CEO Chairman of the Board of Directors
Tessenderlo Group 2021 annual report | 62
Tessenderlo Group 2021 annual report | 63
Sustainability & corporate social responsibility at Tessenderlo Group
Sustainability and a long-term focus have been a recurring theme in our story for more than 100 years.
Whether it is in the products and solutions we supply or the way in which we produce them, the care we
show towards our planet and its resources is at the very heart of all of our businesses. We are aiming at
developing successful businesses in attractive global markets, with growth potential and where we can
help in developing solutions to mega-challenges. This is because we believe that Every Molecule Counts.
It is our ambition to continue our efforts in the future towards remaining a responsible and sustainable
company that further strengthens our relationship with our stakeholders. Our key stakeholders are our
employees, customers, shareholders, neighboring communities, governments and regulators, trade
unions, and suppliers. With the publication of this sustainability report we want to make our sustainability
efforts for 2021 more transparent for our environment.
We are therefore building our group with a clear focus on agriculture, food, water management, the
upcycling of by-products, and a carefully selected choice of specialty industrial applications where our
expertise enables us to make an improved use of resources. We are optimistic about our value creation
options in this new era for food, energy, and recycling.
Sustainability and corporate social responsibility (CSR) are inextricably part of the strategy and daily
activities of Tessenderlo Group. This includes continuously deciding, acting, and investing with the future
in mind. We are convinced that sustainability efforts help us to establish strong relationships with our
stakeholders. These efforts enable us to attract and retain new talent, while at the same time also
providing a strong impetus for innovation. Within Tessenderlo Group, we want to act according to the
expectations of our current and future stakeholders and create value for our company in the long term.
Tessenderlo Group resolutely chooses a sustainable production process that shows maximum respect for
people, the planet, and the community. This is why Tessenderlo Group is focusing on the following three
important pillars in this report:
Our employees
At Tessenderlo Group we
continuously invest in our
employees.
Our planet
Tessenderlo Group makes every
effort to limit the impact of our
activities on our planet by
thinking, deciding and acting in
a sustainable way.
Our community
From Tessenderlo Group,
we work actively together with the
environment in which we live and
strive to meet the expectations of
our stakeholders in the
communities and environments
where we work and live.
Tessenderlo Group 2021 annual report | 64
Reporting method and period
In this sustainability report, we are providing an overview of the most relevant objectives, efforts, and
results in terms of sustainability for 2021.
This sustainability part is based on the GRI (Global Reporting Initiative) Standards: “Core option”. This
report was not subject to an external audit. The GRI indicators used in this report are indicated for each
theme. Tessenderlo Group will continue to publish an annual update of this report.
This sustainability report constitutes the declaration of non-financial information of the group and meets
the requirements of art. 3:6 § 4 and 3:32 § 2 of the Belgian Code of Companies and Associations.
For any questions, please do not hesitate to contact us by writing to sustainability@tessenderlo.com.
Granularity
Reporting granularity is subdivided according to the social category and the environmental category. This
is because these two categories will be addressed in different ways, e.g. concerning the application of
boundaries. To this end, each category will be reported as follows:
• The social topics
These are reported on a Tessenderlo Group level unless mentioned otherwise in the definition of
the associated material part of the topic. Several KPIs have been added compared with last year,
and this is also the case for procurement (see tables on page 102).
• The environmental topics
These are reported separately for each of the following operating segments: Bio-valorization,
Agro, and Industrial Solutions. As this division is somewhat different from financial reporting
requirements, please note that all Tessenderlo Kerley, Inc. (TKI)-produced products are reported
under the Agro segment (the energy and water consumption of TKI is fully included in the Agro
segment). Tessenderlo Kerley, Inc. comprises the Crop Vitality, NovaSource, and moleko business
units of Tessenderlo Group.
Furthermore, with regard to T-Power, we have chosen to consider this segment separately due to
the nature of the energy production aspect of the T-Power operating segment. If we added this
figure to our total, it would potentially create a misleading picture.
The reference year for social and environmental topics is 2020 unless otherwise stated.
Tessenderlo Group 2021 annual report | 65
Reporting boundaries
Guided by the GHG Protocol, for the company boundary, we take the equity share approach. This means,
among other things, that we take our joint venture Jupiter Sulphur (part of TKI) into account for 50% and
T-Power at a full 100%, even though we are operating under a tolling agreement.
This year, we also included the vehicles either in our own possession or on a long-term lease (as well as
company cars - Scope 1). This results in higher energy and energy intensity overall. This is certainly
material for the Bio-valorization segment and also Industrial Solutions. The tables at the end of the CSR
report show energy figures with and without these aforementioned vehicles, so the comparison with the
previous year can be made on the same basis.
For the water calculations, we calculate according to each source of water: ground water, surface water,
and third-party water. The “produced water” in line with the GRI definition 303-3 a iv is not taken into
account.
For the volume calculations, we have changed the scope for Akiolis, which is part of Bio-valorization, over
all the years from upstream to downstream volumes according to the definition: “product to be sold” for
intensity calculations. This also increases the intensity calculations for this segment.
For the total employees at our company, we consider the total internal full-time equivalents. Therefore,
no temporary employees are included.
Almost all disclosures are based on measured parameters or calculations (the calculations of one liter or
kilogram of fuel into MWh are based on local conversion factors according to GRI 302-1); only in
exceptional cases are these based on well-defined estimations.
The energy calculations are made according to GRI 302-1, where we deduct the electricity sold.
Furthermore, we will not be taking into consideration small energy consumers that account for less than
5% of their relevant business units. Therefore, the following businesses and/or locations will not be
included in our reporting:
• DYKA s.r.o. (Czech Republic)
• Maramba S.R.L. (Paraguay)
• Kuhlmann Switzerland AG (Switzerland)
• Etablissements Violleau SAS (France)
• Tessenderlo Kerley Turkey Tarim Ve Kimya Sanayi Ve. Tic. Ltd. STI (Turkey)
• Tessenderlo Kerley Mexico SA de CV (Mexico)
• Tessenderlo Innovation Center (Belgium)
• Outside storage locations
Tessenderlo Group 2021 annual report | 66
Taxonomy
This year, we will also provide further disclosure on the Taxonomy regulation (EU) 2020/852 that applies
with effect from January 1, 2022, in relation to the climate objectives. This is because we are in the scope
of the Non-Financial Reporting Directive and we are preparing in the near future of the Corporate
Sustainability Reporting Directive (CSRD).
The Taxonomy Regulation creates a unified framework that determines to what extent economic activities
can be regarded as sustainable, within those criteria, definitions, and approaches. In relation to this,
additional reporting requirements for certain listed companies are established: they need to provide
information on the proportion of their revenue, capital expenditures (CapEx), and operating expenditure
(OpEx) related to sustainable economic activities. The fact that a company does not have activities aligned
with taxonomy does not lead to definitive conclusions with regard to the environmental performance of
these companies. Not all activities that can make a substantial contribution to the environmental
objectives are listed in the Climate Delegated Regulation.
The below table shows the % turnover, CapEx, OpEx (non-)eligible with the current Taxonomy. As some
definitions of economic activities in the related Taxonomy are subject to interpretation, specifically
regarding the production of chlorine, we reserve the right to review our reporting on this topic.
Total 2021
(in million EUR)
Proportion of Taxonomy eligible
economic activities (%)
Proportion of Taxonomy non-
eligible economic activities (%)
Group Turnover
2,081.5
0.00%
100.00%
Group CapEx
115.8 *
0.00%
100.00%
Group OpEx
127.7 **
0.00%
100.00%
*Intangible & PPE CapEx and incl. IFRS16 Leasing CapEx
**Maintenance & R&D OpEx (OpEx as defined under the Taxonomy regulation)
Tessenderlo Group 2021 annual report | 67
Materiality analysis
Materiality assessments
Materiality assessments were implemented to define which material topics are most important and
impactful to Tessenderlo Group. Furthermore, these assessments enabled us to consider how we would
prioritize the material topics. Materiality assessments are the backbone of any sustainability reporting.
Regarding GRI (Global Reporting Initiative) reporting by Tessenderlo Group, the material topics not only
reflect the environmental, economic, social, and governance impact we make but they also highlight how
the decision-making and assessments of our stakeholders might be influenced.
Our methodology
The methodology behind the materiality assessment involved inviting all colleagues at leadership levels
within Tessenderlo Group as well as the CSR Execution Teams. Following this, we carried out a
benchmarking process of the industry sectors that are relevant to each of our business units in relation to
various material topics. Finally, we put together an online questionnaire that enabled us to select and plot
the order of importance for each of the topics. This is done from the position of Tessenderlo Group and
also from the perspective of our stakeholders.
Our results
We received a 100% response rate from our stakeholder representatives regarding the questionnaire.
Furthermore, this initiative had the full backing of our ExCom and the Board of Directors. This is absolutely
crucial because materiality is not only a very useful tool in terms of reporting, but it also enables us to
create focus and align our strategy. After analyzing the completed questionnaires, we produced the below
CSR Materiality Matrix. The selected topics have been plotted on the X-axis of the matrix to reflect the
order of importance for Tessenderlo Group, and on the Y-axis to reflect the order of importance for the
stakeholder representatives.
During the scoring process, the possibility was given to the participants of scoring between 0 and 6 on the
X-axis and on the Y-axis, with 0 being “not important at all” and 6 being “very important.” The result shows
all topics were ranked above 4 (between “important” and “very important”), meaning that they are all
considered impactful and important, but some more than others. The size of the circles has no
importance. The warm orange colors refer to the topics selected under “social topics.” The colors of the
“environmental topics”: water and air are indicated in blue; energy in red; waste in purple; sustainable
products, responsible sourcing, and biodiversity in green. We started the process by placing the most
important topics situated at the top right, with other topics to follow.
Tessenderlo Group 2021 annual report | 68
Moving forward
We then linked the materiality topics that we had identified as being most important to the GRI reporting
standards. Once this was done, we were able to start measuring the materiality topics regarding the
selected GRI standards for each topic. In this connection, we refer to the tables at the end of the report
which link each topic to the GRI standards and links the social and environmental topics to the Sustainable
Development Goals (SDGs) that we selected as being most important to Tessenderlo Group.
In 2021, we further built on social topics (health and safety, labor and human rights, motivating
employees, ethics and compliance, and communities), responsible sourcing-related topics, as well as
environmental topics regarding energy and water.
From the materiality matrix, for each topic, a selection of KPIs and targets has been made in order to
execute the CSR strategy. All Tessenderlo Group employees have their role to play. Dynamic materiality is
applied: at certain intervals, the materiality matrix will be updated to reflect the evolution of CSR in
general and it will be related to the development of CSR at Tessenderlo Group specifically.
Tessenderlo Group is also aligned with the 10 principles of the UN Global Compact.
Tessenderlo Group 2021 annual report | 69
Governance of CSR
The Tessenderlo Group CSR governance structure allows us to implement, drive and steer the CSR strategy
and policies and integrate and coordinate between group functions and the different business units (BUs)
for social as well as environmental topics. CSR is promoted, supported, and validated at the highest level
of the company: the ExCom and the Board.
Separate monthly meetings are set with the ExCom, the Procurement Director, and the Execution Team
Environment, which are supplemented with many one-on-one meetings. Regular meetings are set with
the Execution Team Social, the various Group (S)VPs ((Senior) Vice Presidents), and the Data Team.
Tessenderlo Group also aims to steer and monitor the results on KPIs, compared to targets. In order to
drive CSR, the targets, are linked to the LTIs (long-term incentives) for the SVPs and the BU Management
Teams, and also STIs (short-term incentives) for our E-level (Expert level of Managers) and L-level
(Leadership level of Managers) population. Gathering data for the KPIs is done at BU level with the
Execution Teams of Environment and Social in cooperation with the Data Team. Our data are integrated
and secured on our group’s corporate reporting platform.
Reporting of CSR KPIs and targets is performed on a quarterly basis and it is regularly communicated via
Q-calls by the ExCom (calls for all L-levels ). Yearly results for the KPIs can also be found in the Tessenderlo
Group annual report.
Both internal and external communication is key in CSR as it ensures the right message is sent regarding
what we do and what we aim to do. Regular meetings are taking place with the Communication Team to
plan and execute CSR communication via the Tessenderlo Group website, InSider (our internal platform),
newsletters, as well as through presentations and reports.
The CSR progression is also scored yearly by an external assessor, Ecovadis, which is one of the world’s
most trusted business sustainability rating companies. Ecovadis scores more than 85,000 companies in
over 200 different industries. Ecovadis scores the group on Environment, Labor & Human Rights, Ethics,
and Procurement. Detailed feedback allows us to better monitor and manage our progression, and to
focus and improve our path going forward.
Besides the scoring of Ecovadis, which resulted in us being awarded a bronze medal in 2021, we will have
a statutory audit according to the new CSRD (Corporate Sustainability Reporting Directive), starting from
the 2023 reporting year onwards.
Tessenderlo Group 2021 annual report | 70
Sustainable Development Goals of the United Nations
Sustainable Development Goals
The United Nations General Assembly created the Sustainable Development Goals (SDGs) in 2015. These
goals define the world that the United Nations wants to create. They are intended to apply throughout
the world and the intention is to ensure that no country is left behind. The 17 SDGs represent the 2030
Agenda and specifically the more positive map of the world that the United Nations seeks. From the 17
global goals, a total of 169 targets were defined by the United Nations.
Adoption of SDGs
The SDGs have received considerable backing from the international business community. With regard to
sustainability reporting, 95% of reporting reviewed by the World Business Council for Sustainable
Development (WBCSD) in 2019 acknowledged SDGs while 86% of reporting gave priority to specific SDGs.
This is a clear recognition of the intent of businesses across the globe to realizing the SDGs.
We chose to publish the SDGs that we are focusing on in our CSR report and on our website; they act as a
compass for our strategy, our employees, and also for our stakeholders.
Our approach
We started by identifying what we aspire to achieve and following this, we worked on completing and
finalizing our materiality on Environmental, Social, and Governance (ESG) or CSR (Corporate Social
Responsibility) topics. This involved identifying and assessing the various potential topics that are most
important from the perspective of our business and our stakeholders.
Our aim here is to create a clear and effective tool to indicate the directions we must take in terms of the
deployment of our CSR strategy. We want to make our contribution to the bigger goals authentic through
our materiality assessment.
We focused on adopting the SDGs of the United Nations that are easily recognizable and to which all of
our employees and relevant stakeholders can relate.
Our methodology
We selected the goals in line with the materiality study that we carried out in 2020. From there, we
focused on linking the material topics with the Global Reporting Initiative (GRI). Following this, we work
at both the measurement and monitoring of targets by using Key Performance Indicators (KPIs). This
shows us areas where there is potential room to make a difference. The KPIs and targets are also linked
to the policies and management approaches.
Tessenderlo Group 2021 annual report | 71
Our SDGs (Sustainable Development Goals of the United Nations)
Ultimately, Tessenderlo Group selected the following ten SDGs out of the 17 Goals:
2. ZERO HUNGER – Achieve food security and improved nutrition and promote sustainable
agriculture. This is realized via our activities in Agro, Bio-valorization, and Industrial Solutions, with
a focus on water. Our contribution to target 2.1 is to reduce hunger and increase access to safe,
nutritious, and sufficient food all year round.
3. GOOD HEALTH AND WELL-BEING – Ensure healthy lives and promote well-being for all at all ages.
Tessenderlo Group takes health and safety very seriously and this is rated with the highest score
in our materiality matrix. We want to make sure that our people leave our factories and offices in
the same health condition as when they arrived. We have already tracked and monitored relevant
data related to this topic for a long time. We also steer on health and safety through our KPIs
linked to remuneration. Our Safety and Health policy clearly expresses the importance we as a
group place on this subject.
4. QUALITY EDUCATION – Ensure inclusive and equitable quality education and promote lifelong
learning opportunities for all. In order to boost employee motivation, this is also referenced in
our materiality matrix and training sessions are very important. We are now building in LMS (our
learning management system) several programs that are also related to training sessions and are
linked with curricula according to each function, as well as being aligned with our Learning &
Development policy.
6. CLEAN WATER AND SANITATION – Ensure availability and sustainable management of water and
sanitation for all. Through our DYKA Group activities, which are linked to water management
systems and the work of Kuhlmann Europe, we are active in water treatment, and this can be
linked to targets 6.1 and 6.2: achieving universal and equitable access to safe and affordable
drinking water and increase water-use efficiency and ensure sustainable withdrawals and the
supply of freshwater to address water scarcity.
8. DECENT WORK AND ECONOMIC GROWTH – Promote sustained, inclusive, and sustainable
economic growth, full and productive employment and decent work for all. Tessenderlo Group is
focusing on the following targets, which are also expressed via the policies we have in this context:
Labor & Human rights, Diversity & Inclusion, our Code of Conduct, and the Supplier Code of
Conduct.
9. INDUSTRY, INNOVATION AND INFRASTRUCTURE – Build resilient infrastructure, promote
inclusive and sustainable industrialization. DYKA Group’s activities in piping for buildings and
infrastructure, and also irrigation and sustainable water management, which are driven by
innovation, support target 9.1. This is realized by developing quality, reliable, sustainable, and
resilient infrastructure, including regional and transborder infrastructure, to support economic
development and human well-being, with a focus on affordable and equitable access. They also
support 9.4 by upgrading infrastructure and retrofit industries to make them more sustainable,
with increased resource-use efficiency and the greater adoption of clean and environmentally
sound technologies and industrial processes.
10. REDUCED INEQUALITIES – Reduced inequality within and among countries. Tessenderlo Group
contributes by empowering and promoting the social, economic, and political inclusion of all,
irrespective of age, gender, disability, race, ethnicity, origin, religion or economic or other status
(10.2). Our approach is also supported by our Code of Conduct and our Diversity & Inclusion
policy.
Tessenderlo Group 2021 annual report | 72
11. SUSTAINABLE CITIES AND COMMUNITIES – Make cities and human settlements inclusive, safe,
resilient, and sustainable. In particular, at Kuhlmann Europe, with its wastewater treatment
products, and DYKA Group with its water management systems, contributions can be made to
reduce the adverse per capita environmental impact of cities, which also includes paying special
attention to air quality and municipal and other waste management (11.6).
12. RESPONSIBLE CONSUMPTION AND PRODUCTION – Ensure sustainable consumption and
production patterns. Our Bio-valorization segment, which includes Akiolis as well as PB Leiner,
contributes to target 12.3 by reducing food waste at the retail and consumer levels and reducing
food losses along production and supply chains by valorizing by-products of the meat industry and
upcycling residues of restaurants into highly valuable products. In line with the “Every Molecule
Counts” philosophy, Tessenderlo Group focuses on target 12.3 by substantially reducing “waste”
generation through prevention, reduction, recycling, and reuse. We prefer to focus on upcycling
as we turn these side streams into valuable products. Our contribution to target 12.6 is translated
in our sustainability reporting and in our Supplier Code of Conduct: “Encourage companies,
especially large and transnational companies, to adopt sustainable practices and to integrate
sustainability information into their reporting cycle.”
13. CLIMATE ACTION – Target urgent action to combat climate change and its impacts. Strengthening
the resilience and adaptive capacity to climate-related hazards and natural disasters as mentioned
in target 13.1 is incorporated in our risk prevention systems in general, specifically our own ERM
(Enterprise Risk Management) system and the AXA Climate Risk assessment.
Tessenderlo Group 2021 annual report | 73
Our employees
Tessenderlo Group was founded more than 100 years ago. Our founders demonstrated a vision and
leadership that is still tangible in our DNA. Our success today relies on the continuation of their legacy:
daring to start small and never quitting, not allowing any of our resources to go to waste, and persistently
adding value to everything we do through imaginative process thinking and rethinking, and research and
development. Our founders also taught us to do business with integrity, and this is a commitment that we
unwaveringly maintain as we continue to expand into new businesses areas and regions.
Over the years, Tessenderlo Group has grown into a diversified industrial group with operations and a
commercial presence in more than 100 locations across 21 countries around the globe. Each company in
the group serves different markets (inter)nationally with products and services that enjoy an excellent
reputation. Our various business units and companies represent the beating heart of the group, each with
its own identity and culture, the sum of which is more than the parts.
The attitudes we share, as a group
The various different business units and companies of Tessenderlo Group are not all involved in the same
activities. Nevertheless, we speak one language and are united by the attitudes we share. These attitudes
have been key in creating a strong company culture that focuses on excellence and sustainable growth:
▪ BE POSITIVE - We believe in the potential within and around us: we seize our opportunities with
optimism.
▪ BE CURIOUS - We are open-minded and eager to learn: we want to get better at everything we
do and discover even more about the world we live in.
▪ BE CONNECTED - We are connected internally and externally: we work closely together to share
our knowledge and best practices.
▪ BE COURAGEOUS – We don’t shy away from obstacles. And we believe that having the courage
to challenge each other is a good thing.
▪ BE DECISIVE – We take and execute decisions and we make sure things happen quickly.
▪ BE FOCUSED – We set priorities and we pursue results together.
Our 6 attitudes indicate what we consider to be most important as a group. However, whilst these
attitudes act as a source of inspiration, they only really exist to the extent that we practice them. This is
why we are committed to actively applying our attitudes in our everyday work. Because it reflects
positively on our colleagues, customers, and other stakeholders. As a result, they clearly see our
entrepreneurial spirit and job satisfaction, and our value-driven, “can-do” mentality.
Tessenderlo Group 2021 annual report | 74
The guiding principles we share, as a group
Tessenderlo Group has a positive and pragmatic outlook regarding how we can keep growing our business
in a sustainable way: we believe that Every Molecule Counts. Creative, well-considered usage of our
resources and a long-term focus are a common thread in our story. It is our ambition to strengthen our
leading market position in each business unit and company of our group and to ensure enduring
profitability. From a strongly anchored family shareholder base, Tessenderlo Group is further committed
to creating shareholder value through the execution of a sustainable long-term industrial strategy.
The following principles guide our relationships with our employees, customers, shareholders, and local
communities:
Our guiding principles
• We believe that Every Molecule Counts: we continually strive to valorize our products and
processes to the maximum and to add value to everything we do.
• Our main focus is our business, and we do everything we can to get better at what we do.
• The safety and health of everyone in our business comes first. This is non-negotiable.
• Our people are the beating heart of Tessenderlo Group. We respect, enthuse, challenge, develop,
and recognize the achievements of our colleagues.
• The customer is our priority, and this means operational excellence is essential.
• We continuously improve our competitiveness. That is why we optimize our spending and keep
overheads to a minimum.
• We are driven by our entrepreneurial spirit: challenge and execution are key. We fight and win
the battle in the market by assuming our responsibilities and taking the right actions at all levels.
• We ensure the sum is more than the parts. We leverage our very diverse skills and share best
practices within our group through centers of excellence and services.
• We continuously practice our 6 attitudes, and we are fully committed to performing our jobs with
integrity.
Tessenderlo Group 2021 annual report | 75
Total number of employees
As at December 31, 2021, the total number of employees (FTE) working for the group amounted to 4,838.
Out of this total, 864 employees were active in the Agro segment, 2,107 employees were active in the Bio-
valorization business, 1,829 employees were active in the Industrial Solutions segment and 38 employees
were active in T-Power.
Meanwhile, 3,721 of the group’s total personnel are employed in Europe, 907 are employed in the
Americas and 210 are employed in Asia, Africa, and Australia.
Gender diversity
In 2020, we launched a new policy regarding Diversity & Inclusion, aimed at further improving diversity
and inclusion in our workplace. As shown in the figure above and the KPIs in the tables, we measure and
monitor a number of different gender-related metrics in the different levels (general, expert level (E),
leadership level (L), Board of Directors, and other governance bodies (see table on the next page)). Also,
the salary levels between genders are measured in the different groups. The diversity of our employees
can also be seen in the geographical spread.
On December 31, 2021, two out of six members of the Board of Directors were female. The Board of
Directors was therefore in full compliance with the Law of July 28, 2011, requiring that as of January 1,
2017, one-third of the members of the Board of Directors should be of a different gender than the other
members of the Board. In its selection procedure for the appointment of new directors, the Board of
Directors has integrated criteria with regard to diversity of competencies, age and gender diversity.
Employees and employment – Labor and Human Rights
Tessenderlo Group ensures respect for all basic human rights throughout the world. We do not tolerate
any discrimination or harassment on the grounds of race, color, gender, religion, origin, civil status, family
circumstances, feelings or sexual orientation, disability or age. Tessenderlo Group expressly does not
permit the use of child labor through the company and its suppliers.
We consider all qualified applicants for employment regardless of race, color, gender, religion, age,
national origin, sexual orientation, disability status or protected veteran status. In this connection, the
group implemented a diversity and inclusion policy in 2020.
Total number of global
employees
Global employees
per age group
Gender distribution
of global employees
Tessenderlo Group 2021 annual report | 76
In 2020, we also launched a new policy relating to Human and Labor Rights within Tessenderlo Group. The
purpose of the policy is to clarify Tessenderlo Group’s view that respect for human rights and the
observance of labor rights are integral to our business practices and that we, therefore, comply with the
UN Global Compact principles.
Any concern our employees might have regarding human rights and labor rights at Tessenderlo Group can
be raised either directly with their line managers or with their local senior leaders. This, together with
training sessions that are being implemented on this subject, is how we aim to cover our internal risk
related to labor and human rights. In case employees have the impression that their concerns have not
received sufficient attention, or that the response provided was inadequate, then the matter can be
confidentially brought to the attention of the Compliance Officer by writing to:
codeofconduct@tessenderlo.com. Our external risk is also referred to in our Supplier Code of Conduct
and sustainable procurement policy.
In 2021, the Compliance Officer was informed about three cases on labor rights, which have been
resolved. Furthermore, Tessenderlo Group did not receive any formal complaints regarding human rights
or diversity and inclusion in 2021.
Labor and Human Rights
ASSOCIATED MATERIAL ASPECT (GRI)
Score 2020
Score 2021
Diversity of gender in governance bodies (BU Leadership
Teams, Group Leadership Team and the Board of Directors)
New in 2021
18% female
82% male
Diversity of governance bodies
(gender % of L level, E level and board)
11% female at L level*
24% female at E level*
33% at Board level
12% female at L level*
24% female at E level*
33% at Board level
Diversity of gender (all permanent employees)
New in 2021
16.6% female
83.4% male
Diversity of employees (per region, per gender, and per age
category expressed in total numbers)
See Sustainability
report 2020
See page 75
% of employees compliant in training Labor and Human
Rights
-
New in 2022
Equal opportunity-ratio of basic salary and remuneration of
females to males at L level
Female 6% higher than
male
Female 5% higher than
male
Equal opportunity-ratio of basic salary and remuneration of
males to females at E level
Male 3% higher than
female
Male 2% higher than
female
Operations in which the right to freedom of association and
collective bargaining may be at risk
0
0
Total new hires
New in 2021
673 new hires
Employee turnover for 2021
6.5%
12.9%
*E level = Expert level of Managers at the company; L level = Leadership level of Managers at the company.
Tessenderlo Group 2021 annual report | 77
Developing Human Resources for sustainable growth
Tessenderlo Group relies on a team of experienced professionals and this contributes towards our
realization of the business and strategic objectives across all areas.
With our tagline “Every Molecule Counts” we strongly believe that our people are the most important
drivers behind our success of creating sustainable growth. As we are making important strategic shifts
across our business units, HR has a crucial role to play in driving people and culture development, business
growth, and company agility.
We are convinced that our employees are the most important factor in our success. In a global business
where knowledge and expertise are essential, we build on our experienced and motivated employees,
who have an in-depth knowledge and understanding of both the group and our products. Our HR
managers, who make up part of each of the different management teams in the group, are focused on
rolling out the updated business strategies, shaping the organization, defining clear roles and
responsibilities, as well as attracting, retaining, and developing the right people, and building motivated
teams that will realize the objectives of the group. They also guide each company through the cultural
changes that are necessary for the successful implementation of the strategic plans. Professional tools
and processes for Talent and Reward, sharing best practices, and automation of transactional work are
supporting these common goals.
Within our annual performance cycle, clear objectives that are in line with our strategy execution are
defined internally in each of the different business units. Each business unit has a communication plan to
cascade these objectives of management down to the shop floor and to communicate them into the
minds, hearts, and hands of our team members.
Talent management is a key process within our organization. As our business is constantly growing, we
offer challenging yet rewarding jobs for enthusiastic people with backgrounds in Engineering, Sales, and
Business Development, as well as Operations Management and General Management. We offer many
great opportunities in terms of personal development and we strive to have in place a personal
development plan for each individual employee. On-the-job training and a permanent feedback culture
are essential, but we also organize learning and training programs for all levels of employees. We build on
the strengths of one another, and we deploy our people in a complementary manner.
Within our Talent Review Process, we prepare career paths and carefully develop our talent for the future.
In addition, we have invested in platforms to facilitate these processes. HR is also responsible for solid
remuneration systems and benchmarked and competitive salary packages. The goal behind our
remuneration strategy is payment according to performance, in which we strive to stimulate the
entrepreneurial spirit of our employees.
We must ensure that our employees, as individuals, are fully prepared at all times in order to respond to
both the short-term and long-term challenges we face, as well as to work productively in result-driven
teams.
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It is for this reason that we have defined the following seven HR pillars for sustainable growth:
FIRST PILLAR
Shaping the right and lean organizations that will be able to provide the most effective support to the
different business models.
SECOND PILLAR
Attracting the right employees for the right jobs.
THIRD PILLAR
Engaging our people as regards the ways in which they can make even better contributions to the
execution of our strategy. This can be realized by developing annual performance cycles, continuous
feedback, the development of recognition plans, and clear communication.
FOURTH PILLAR
Seeking to further empower our employees and create motivated teams through a smart combination of
dedicated coaching and teambuilding. This will ensure that we have flexible and agile employees.
FIFTH PILLAR
Training and developing all of the talent in our group. The concept of talent management is considered to
be a key process within our organization, and it is therefore the responsibility of every leader and manager
in the organization to commit to this objective. In this respect, on-the-job training and a permanent
feedback culture are fundamental elements.
SIXTH PILLAR
Offering a solid reward system with benchmarked and competitive salary packages and benefits.
Benchmarking is undertaken via professional salary surveys and we also provide medical insurance for our
employees and pension schemes in every country in which we operate.
SEVENTH PILLAR
Following the Group Code of Conduct and compliance policies at all times.
Tessenderlo Group’s strategy could be undermined by the company’s inability to attract or retain employees in key positions, or
by the unexpected loss of experienced employees. Tessenderlo Group will continue its efforts to recruit, retain, and develop a
competent workforce and manage key talent throughout its global organization.
Tessenderlo Group 2021 annual report | 79
Training and Talent Management
We cherish talent and actively help our employees to grow and flourish. Through dedicated training
programs and coaching, we seek to empower our employees, ensuring that they are flexible and agile,
while simultaneously encouraging them to consider how they want to contribute to Tessenderlo Group -
both today and tomorrow.
We train and develop our employees because they are critical to our success and our ability to execute
our business strategy better than our competitors. Our culture includes having high expectations for the
personal growth of our employees, and we encourage continuous learning via job-specific, in-person, and
online training.
All employees receive on-the-job training, a permanent feedback culture, and training programs. We build
on the strengths of one another, and our Talent Review Process aims at preparing career paths and
developing our talent for the future.
In 2021, Tessenderlo Group launched a global new learning management system (LMS). This is a standard
system work tool for Learning & Development and it allows us to organize and manage learning within
the group. It is also to be a “one-stop-shop” ensuring all learning activities are organized more efficiently.
Our LMS is just a first step in a series of HR digitalization projects aimed at being future-proof.
Motivating employees
ASSOCIATED MATERIAL ASPECT (GRI)
Score 2020
Score 2021
Average number of hours of training per employee per year,
excluding training on the job/machine
16
14.8
Employees receiving regular signed performance and career
development reviews expressed in % of E and L grades
95%
96%
Average years of seniority/company service
11.06
13.21*
% of L and E grade employees in performance-related
incentive plans
New in 2021
100%
% of all employees in performance-related incentive plans
New in 2021
66%
E grade employees in formal coaching or mentoring
programs
New in 2021
3.24%
% of employees active in LMS (learning management
system)
New in 2021
39%
Hiring by source - internal/external
New in 2021
12% internal
88% external
* Given that we progressively induce more systemization for the gathering of data, some data from 2020 could be slightly less accurate, and
consequently, compared to 2021, might not show the complete accurate evolution.
Tessenderlo Group 2021 annual report | 80
Safety and health
Tessenderlo Group is committed to protecting and improving the safety, health and general well-being of
its employees, customers, suppliers, and neighbors by preventing or limiting its activities and products
from affecting people and the environment.
It is our responsibility to ensure that our employees can work in a safe work environment and we are
responsible for clearly communicating expectations regarding how to work safely via awareness
programs, audits and improvement measures. Tessenderlo Group works to achieve a “zero fatality rate”
globally.
Tessenderlo Group’s Safety and Health Policy is integrated into company processes, operations, and
systems. The protection of employees, customers, suppliers, visitors, and neighbors against unacceptable
risks overrides economic considerations and must not be compromised. In the event of any doubts, the
overriding principle of precaution must apply.
Safety and health policy of Tessenderlo Group
Tessenderlo Group and all of its subsidiaries embrace and comply with its legal, ethical, and moral
responsibilities, in terms of protecting the safety and health of employees, contractors, customers, and
the communities in which we operate. We will always conduct our business to the highest practicable
standards.
Tessenderlo Group’s leadership, management, and all employees will act at all times to safeguard the
safety and health of all. No business goal, target, or job is more important than ensuring the safety and
health of everyone.
To fulfill those responsibilities, Tessenderlo Group ensures that the appropriate level of resources is made
available, together with the commitment to continuously improve safety and health performance. It is
the role of Senior Leadership to determine, deploy, and manage the required resources to meet
Tessenderlo Group’s responsibilities.
All employees and others engaged by Tessenderlo Group are expected at all times to fully comply with
applicable regulations and local processes that are determined necessary to protect safety and health.
Every incident and life-threatening accident is thoroughly investigated to determine and implement the
improvement actions required to prevent any repeat event. All employees are expected to report all such
events to local management so that the appropriate procedures can be followed.
Safety and health will always be a fundamental value of Tessenderlo Group.
Tessenderlo Group 2021 annual report | 81
Our continuous focus on improving safety and health performance remains the top priority for
Tessenderlo Group. The year was dominated by the continuing impact of the global COVID-19 pandemic
and consequently employee safety and health risks and performance were heightened. Many business
activities continued to be classified as “essential” and, as a result, many of our employees continued
operating from our factories and offices in accordance with local legislation. This understandably posed
significant organizational and logistical challenges. We reinforced vigorous monitoring and hygiene
regimes to safeguard the health of those employees. Our measures were broadly successful and have
remained in place to meet national and local statutory obligations. However, our foremost objective
remains to ensure that our employees remain safe and healthy and understand, behave, and participate
with our commitment to the wellbeing of everyone. We strive to preserve, conserve, and protect the
resources we use to conduct our business.
Group health and safety performance
During 2021, we continued to focus on sustained improvements from safety and health performance
within each business unit. Management has made this the number one priority and utilizes skilled and
qualified internal and external resources. Regular management and employee auditing and workplace
inspections are conducted, and thorough investigation and follow-up is conducted on injuries and events
that have or could have resulted in accidents and harm. Safety and health performance is reviewed each
month with the ExCom and the Senior Management of each business unit and, consequently, revised
targets are set each year in terms of realizing a continued reduction in accidents and incidents.
Also in 2021, we made further progress in the implementation of a group-wide learning management
system, which will enhance our ability to deliver and record systemic safety and health training for all
employees and contractors. This major multi-year project will underpin our continuing commitment to
training as the key factor in terms of setting standards and expectations for safe behavior in all the
locations where we conduct business.
Several business units consistently achieve levels of SHE performance that are significantly below industry
benchmarks, whilst other business units continue to make progress towards meeting such levels.
However, compared with 2020, a number of business units experienced significant increases in their Lost
Time Incident Frequency Rates, and this consequently led to an increase in the group frequency rate. This
disappointing increase, which followed many years of improved results has led us to further emphasize to
our Guiding Principle that “The Safety and Health of everyone in our business is more important than any
other subject.”
Tessenderlo Group 2021 annual report | 82
Health and Safety
ASSOCIATED MATERIAL ASPECT (GRI)
Score 2020
Score 2021
Lost Time Incident (LTI) frequency ratio
1
(all employees and
contractors)
8.34
11.12
Near misses frequency ratio
2
(all employees and contractors,
expressed as number of hours worked)
New in 2021
829.76
Workers representation in formal joint
management/employee H&S committee
95%
96%
Accident severity rate
3
(all employees)
New in 2021
0.56
Total safety performance
4
(all employees and contractors)
New in 2021
10.84
Group insurance percentage coverage/Life Assurance
coverage
97%
98%
1. LTI (Lost Time Incident) frequency rate is a rolling annual calculation based on the formula “LTIs x 1 million/total hours worked”
2. Near misses frequency ratio (all near miss reports x 1 million/ total hours worked)
3. Accident severity rate (severity of lost time injuries to employees defined as total days absent/1,000 hours worked)
4. Total safety performance (all LTIs + medical treatments x severity rate/total hours worked)
Tessenderlo Group lost time incident frequency rate
(number of lost time incidents per million hours worked)
0.00
5.00
10.00
15.00
20.00
25.00
30.00
Jan/11
Mar/11
May/11
Jul/11
Sep/11
Nov/11
Jan/12
Mar/12
May/12
Jul/12
Sep/12
Nov/12
Jan/13
Mar/13
May/13
Jul/13
Sep/13
Nov/13
Jan/14
Mar/14
May/14
Jul/14
Sep/14
Nov/14
Jan/15
Mar/15
May/15
Jul/15
Sep/15
Nov/15
Jan/16
Mar/16
May/16
Jul/16
Sep/16
Nov/16
Jan/17
Mar/17
May/17
Jul/17
Sep/17
Nov/17
Jan/18
Mar/18
May/18
Jul/18
Sep/18
Nov/18
Jan/19
Mar/19
May/19
Jul/19
Sep/19
Nov/19
Jan/20
Mar/20
May/20
Jul/20
Sep/20
Nov/20
Jan/21
Mar/21
May/21
Jul/21
Sep/21
Nov/21
Frequency rate
Tessenderlo Group 2021 annual report | 83
Safety and health achievements
Agro segment
Tessenderlo Kerley, Inc. has a total of 9 facilities that have achieved more than 5 years without a lost time
incident. In addition, five of those locations have gone more than 20 years without a lost time incident!
To support the employee engagement and workplace culture that leads to this type of performance,
Tessenderlo Kerley, Inc. maintains a robust behavioral-based safety award program at all its operational
facilities. The program is designed to recognize employee activities that help ensure everyone goes home
unharmed every day. The focus areas of the program include safety meetings participation, completion
of safety inspections, hazard identification, and involvement in the task observation process. During the
past year, more than 97% of employees at our process plants actively participated in the Safety Award
Program.
Tessenderlo Kerley International continued its focus on H&S (health and safety) and this also applied to
its site in Ham, Belgium. The progressive reduction seen in previous years was not sustained. As a result,
the second-year implementation of a 5-year action plan for occupational and process safety did not
achieve its goals. A thorough review of the reasons behind the increases will result in a fresh impetus
towards more sustained reductions. Meanwhile, various other international sites within Tessenderlo
Kerley International continued to operate with an accident-free record.
Bio-valorization segment
PB Leiner continued to make long-term improvements at the majority of its sites, which are located on 4
continents. At the end of 2021, the Lost Time Incident frequency rate was at an historic low of 1.74 and
this achievement reflected the commitment from management to rigorously implement new initiatives,
new procedures, and behavioral safety practices. A 10% increase in the reporting of “near miss incidents”
also led to the ability to further eliminate unsafe conditions and reduce the number of first aid injuries by
9.7%. This core process has also been extended to cover environmental issues with a corresponding
increased focus.
At Akiolis, health and safety at work has remained a key area for management. Akiolis employees are
faced with many challenging work environments and the number of lost time incidents in 2021 sharply
increased from the previous year. However, despite this, 10 sites have gone more than 1,000 days without
a lost time incident and 17 sites have gone more than one year without such an incident. Akiolis continues
to devote additional resources to realizing further improvements and involving all members of the
workforce. In particular, BU and site management have started a program of behavioral safety training to
assist them in highlighting where employees can make personal improvements to their own safety and
that of colleagues and others they work with. An important initiative resulted in a substantial increase in
employee reports of hazard spotting and near misses. This increasing trend will significantly contribute to
future reductions in employee lost time incidents.
Tessenderlo Group 2021 annual report | 84
Industrial Solutions segment
Within DYKA Group, we experienced a deterioration in the lost time incident frequency rate but only a
marginal change in the severity rate of those injuries. The introduction of a safety improvement plan in
the second half of the year realized a 50% reduction in the safety issues experienced . The “SCOT” personal
safety program included 10 mandatory ”lifesaving” rules for each site to adopt. The focus on behavioral,
technical, and organizational aspects of health and safety are at the heart of the new program. Amongst
the DYKA Group sites, BT Nyloplast in Hungary extended its accident performance-free record to 2,417
days. DYKA Group is transferring its best practices and management standards to the sites where further
improvements are still required and this “levelling up” process should realize success in 2022. The 2020
acquisition of DYKA Tube SAS in France has now been integrated into the SHEQ policies and procedures
of DYKA Group and Tessenderlo Group.
The Kuhlmann Europe site in Loos (Kuhlmann France) had a marginally worse safety performance in 2021
but has continued to focus on a range of site infrastructure investments, which is contributing to the
improvement of overall working conditions. The site maintained its ISO 14001 registration.
T-Power segment
T-Power reported two lost time incidents in its operations during 2021.
Social activities
Tessenderlo Group firmly believes in the importance of the recognition of teams based on positive
reinforcement. This can be linked not only to achieving certain results to help growth, but also to life
events. Our employees spend a lot of their time at work and often “go the extra mile” for the company.
Therefore, we believe they should be celebrated and respected for these efforts. We use various occasions
like company anniversaries to organize get-togethers for our teams as well as family and friends. Our aim
is to ensure our employees can share the pride they have in their work and what we do as a company with
those from their personal lives. Social activities are important in contributing to the wellness of each of
our employees and building a positive company environment and culture.
Unfortunately, most social activities in the group were either cancelled or postponed due to COVID-19.
Tessenderlo Group Strava club
In light of the Coronavirus restrictions, organizing any group sporting events proved difficult in 2021. In
this connection, we launched a Tessenderlo Group club on Strava to allow us to continue with sport and
exercise, but in a Corona-proof way. In 2021, 292 colleagues joined our club, 63 of whom achieved our
Strava targets of 50 km swimming, 500 km walking or hiking, or 5,000 km cycling.
Tessenderlo Group 2021 annual report | 85
Our planet
The challenges that the world faces - from climate change and population growth to food shortages and
economic crises - are the basis for our search for products and processes that create value for all of our
stakeholders.
There is no need to debate the fact that our planet is warming up. Overwhelming scientific consensus
argues that humans are causing this warming through the emission of greenhouse gasses, mostly from
the burning of fossil fuels. A warmer planet creates the effect of changing weather patterns. These
changes have an impact on freshwater availability. Climate change also affects our ability to produce
sufficient food in a reliable manner. It influences our ecosystems and biodiversity, as well as the spread
of diseases. Overall, severely changing weather patterns are increasingly having a profound effect on our
lives, our economies and our societies. Climate change is the single most important factor that will define
our future market environment.
Growing population
We live on an increasingly crowded planet. According to a United Nations report published in 2019, the
current world population of 7.7 billion is expected to reach 9.7 billion by 2050. With approximately 83
million people being added to the world’s population every year, the upward trend in population size is
expected to continue. Such an increase will inevitably have an impact on climate change and our natural
resources, ecosystems, raw materials and land availability.
Improving standards of living
The global population is not only growing in terms of numbers. Global affluence is also increasing on
average. Whilst not every region or country of the world is benefiting from this development, China, Brazil,
and India are making big strides forward. Notwithstanding the fact that wider affluence has many positive
aspects, it will create a market environment with more people consuming more goods. And this means it
will be more difficult for supply to keep up with demand. Improved standards of living are also linked to
increasing urbanization; more people are now living in cities than ever before.
Every Molecule Counts
Every human being has the right to food, and we believe that it is our responsibility to help make this
possible through more efficient and sustainable agriculture. As demand outstrips nature’s capacity to
provide fresh water, and due to a lack of infrastructure, one billion people in the world lack access to
sufficient clean water. We offer solutions that promise a reduction of water use in agriculture and improve
water management and quality - these represent important steps towards conservation and wider access.
The earth’s natural resources are being squandered by some who think that supplies are endless. Indeed,
many such resources are either burned or dumped as waste after use. The reality is that these resources
can never be replenished. Therefore, in order to avoid depleting resources that should be available to
future generations as well as our own, we provide solutions to further reuse and recycle materials, hence
adding value to them.
Tessenderlo Group 2021 annual report | 86
Our challenge is to contribute to making a significant improvement in the efficient use of raw materials,
especially residuals or by-products from natural origin. This will mean we are making the most of the
resources. For this reason, we are 100% committed to finding new and more sustainable ways in order to
successfully address the following mega-challenges:
• Maximizing food production
• Optimizing the use of water
• Using our resources more responsibly
• Making better use of bio-residuals
• Reducing our energy footprint
Environment
Tessenderlo Group is aware of the impact our production operations have on the planet. We want to take
our share of responsibility and minimize the impact of our operations. We will continue to explore ways
of reducing our environmental footprint in every aspect of our activities.
“Every Molecule Counts” is at the heart of our strategy and this is expressed by the numerous business
activities and projects we deploy in terms of circularity. At the same time, our activities are subject to
environmental regulations that could create substantial costs and lead to disputes regarding
environmental matters. National and local authorities might even impose “no-fault liability”, leading to a
negative impact on our activities. Meanwhile, the environmental regulations in the markets where we
operate are becoming stricter, with a growing emphasis on compliance.
We offer various products and environmentally friendly solutions, in which we typically reclaim and
transform by-products from our own or other industries.
Based on the outcome of the materiality analyses and taking the assessments of our employees and
stakeholder representatives into account, we decided to focus on the topics of water and energy. Both
topics represent areas of major importance with regard to helping preserve the natural resources of our
planet, and are at the same time material to our business. As production volumes are subject to change,
we have also calculated the intensity ratios of water and energy, which represent a more tangible steering
metric.
There are two approaches regarding environmental sustainability:
1. Reduce the impact of our own operations on the environment, related to climate change
mitigation
2. Reduce the impact of the environment on our operations, related to climate change adaptation
Reducing the impact of our own operations on the environment:
Going back to the subject of materiality we see that there is a whole cluster relating to sustainable
products: energy, water, air, and by-products. “By-products” is our preferred terminology instead of
“waste” because we see by-products as being value products that fit into our “Every Molecule Counts”
philosophy. Energy and water are tackled as the first topics at group level to report on in our step-by-step
approach. Energy and CO2 relate to climate change mitigation and both energy and water are seen as
very important environmental topics, where our company also has an impact. We work continuously on
energy efficiency. Of course, next to these material topics, other parameters will follow such as monitoring
of the upcycling of by-products and the use of recyclates (non-virgin raw materials) in our strategy towards
the circular economy.
Tessenderlo Group 2021 annual report | 87
At present we have two main approaches for environmental topics:
• Circularity (Every Molecule Counts), see narratives of each BU
• Optimization (energy and water), see tables with metrics and evolution
The tables on the next page show how energy and water are monitored by our KPIs. In order to reach our
targets, many projects are planned or at the execution stage across the different BUs. These projects can
be product-related or process-related. Operational Excellence programs also help in this context. Apart
from the Tessenderlo Group CSR policy, several BU environmental policies are currently being
implemented, such as energy and energy efficiency policies, e.g. at some of our Belgian plants we have
Energie Beleidsovereenkomsten (energy policy agreements); some other BUs have their own
environmental policies and might be monitoring some additional CSR related KPIs and targets, but they
are always integrated into the Tessenderlo Group CSR approach.
Neither our emissions nor our carbon footprint are currently reported. As there are various different
approaches for calculating the carbon footprint, which result in rather different outcomes (e.g. mass
allocation, economic allocation, etc.), we would like to see further progress regarding a regulated
standardization in this context. Carbon footprints can only be compared on a comparable basis.
Reducing the impact of the environment on our operations:
Climate change adaptation, which is seen as the process to adjust to the effects of climate change, is now
also monitored by us with the support of our Axa Climate project, which gives us a clear view of our actual
and future exposure related to climate change. We screen all our own sites, rented terminals,
consignment stocks, tolling sites, and our key business supply chains for natural hazards and the possible
exposure to climate change. Extreme weather events and droughts pose additional risks through damage
to assets and/or adverse consequences on operations, supply chains, and insurance costs. In the broader
picture, we also refer to our Enterprise Risk Management Policy where CSR risk is taken up in the screening
and the planning.
As can be seen on the next page featuring tables on energy and water, we realized reductions in 2021
compared to 2020, in both cases for the entire group excluding T-Power (where we are operating under
a tolling agreement):
- Total energy: reduction of 1.7%
- Energy intensity: reduction of 5%
- Total water: reduction of 0.7%
- Water intensity: reduction of 3.6%
We also refer you to the financial part of the annual report, pages 36 to 41, which elaborates on CSR risks;
ethics and compliance, safety, industrial safety, transport accidents, climate risks, cybersecurity risks,
usage of Tessenderlo Group products, and market and strategic risks.
Tessenderlo Group 2021 annual report | 88
ASSOCIATED
MATERIAL ASPECT
(GRI)
Energy
(MWh/y)
Energy intensity (MWh/t)
Total energy
consumption
within the
organization,
in MWh, and
per operating
segment
Total energy
intensity ratio for
the organization,
and per operating
segment
Organization-
specific metric (the
denominator) to
calculate the ratio
Types of energy
included in the
intensity ratio
The ratio uses
energy
consumption
within the
organization,
outside of it, or
both
Energy in 2020
Group
(minus T-Power)
2,061,018
0.79
The denominator is in
metric tons of year
product produced to
be sold; by-products
included
Hydrogen,
electricity, liquid
light fuel, liquid
heavy fuel, natural
gas, coal, wood,
steam
The ratio is
based on energy
consumed within
the organization
Agro
364,890
0.23
Bio-valorization
1,480,030
3.02
Industrial Solutions
216,098
0.43
T-Power
2,350,652
NA
Energy in 2021
Group
(minus T-Power)
2,025,833
2,121,075*
0.76
0.79*
The denominator is in
metric tons of year
product produced to
be sold; by-products
included
Hydrogen,
electricity, liquid
light fuel, liquid
heavy fuel, natural
gas, coal, wood,
steam
The ratio is
based on energy
consumed within
the organization
Agro
338,041
347,281*
0.20
0.20*
Bio-valorization
1,457,025
1,534,323*
3.14
3.31*
Industrial Solutions
230,767
239,472*
0.45
0.46*
T-Power
1,531,225
NA
See also boundaries: *vehicles are included from 2021 onwards, impacting the overall energy and energy intensity. To enable comparisons with
2020, the data without vehicles are mentioned (this is the first number).
ASSOCIATED
MATERIAL ASPECT
(GRI)
Water withdrawal (m³/y)
Water intensity (m³/t)
Total water
withdrawal
from all
sources
Water withdrawal by source
Information
necessary to
understand how
the data have
been compiled
Water
intensity
Organization-
specific metric
(the
denominator)
to calculate the
ratio
Surface
water
Ground
water
Third-party
water
including
city water
Water in 2020
Group
(minus T-Power)
17,368,681
10,404,045
4,517,606
2,447,031
See separate
information on
granularity &
boundaries
6.67
The denominator
is in metric tons
of year product
produced to be
sold; by-products
included
Agro
3,531,125
2,204,027
670,042
657,056
2.18
Bio-valorization
10,747,657
6,445,389
2,555,499
1,746,770
21.93
Industrial Solutions
3,089,898
1,754,629
1,292,065
43,205
6.21
T-Power
2,224,721
2,168,545
0
56,177
NA
Water in 2021
Group
(minus T-Power)
17,254,251
10,304,877
4,058,152
2,891,221
See separate
information on
granularity &
boundaries
6.43
The denominator
is in metric tons
of year product
produced to be
sold; by-products
included
Agro
3,440,318
2,162,367
522,591
755,360
2.02
Bio-valorization
10,583,725
6,227,104
2,311,726
2,044,895
22.84
Industrial Solutions
3,230,207
1,915,406
1,223,835
90,965
6.26
T-Power
1,362,781
1,306,227
0
56,555
NA
Tessenderlo Group 2021 annual report | 89
Innovation
We were able to successfully continue our innovation and R&D activities in 2021. Our innovation choices
continue to be driven by the belief that “Every Molecule Counts” and they are prioritized in alignment
with our business strategies. In R&D and new business development, Tessenderlo Group continued to
improve and develop product, process, and application technologies through a customer-centric
approach, exploring new applications for existing products, as well as enhancing sustainability and
environmental protection. We also further developed our collaborations with academia, customers,
suppliers, and other relevant stakeholders.
Our Agro segment
In 2021, we further assessed and enhanced the positive agronomic impact of our fertilizers through
dedicated lab, pot, and field trials, focusing on the fertilizer aspect, crop growth, crop health, and the
effect on soil health and the environment, both in the short-term and the long-term. We will continue to
contribute to sustainable agriculture, translating the insights gained from these scientific trials into
fertilizer use recommendations and new fertilizer developments.
Our Bio-valorization segment
We are passionate about improving the lives and well-being of humans and animals and - in that context
- our product innovations focus on the valorizing and upcycling of by-products from other industries or
making the most out of our natural resources. In this regard, we continued to improve our portfolio of
healthy collagen ingredients for humans and we started a research program with the University of
Maastricht. Furthermore, we published a white paper regarding the positive effects of our collagen
peptides in the area of sports nutrition, based on a scientific collaboration with Florida State University.
We also continued our research program into collagen peptides with the aim of enabling us to expand our
market for collagen and gelatin.
Following the release of our first gelatin bio-ink in the Claro™ series of tissue-engineering products,
Tessenderlo Group continued on the path of making further investments, working on scientific
developments, and setting up partnerships. In 2021, the group joined forces with bioprinter companies
to expand the commercialization of its gelatin bio-ink product line. Besides extrusion-based technologies,
the group has recently developed ready-to-use gelatin-based crosslinkable gels for volumetric bioprinting.
In 2021, the group also started a collaboration with Utrecht University focusing on biofabrication in
regenerative medicine.
Our Industrial Solutions segment
Together with various academic partners, we continued our research to develop sustainable solutions for
the recovery of critical minerals, such as copper, which is essential for electromobility, as well as gold for
electronics.
In addition, DYKA Group continues to develop innovative solutions in response to megatrends such as
urbanization, climate change, water scarcity, and the energy transition. Improving on sustainability is an
integral element of the DYKA Group innovation strategy, which is realized by, among other things,
increasing the recycled content in products and improving the energy efficiency of the processes used.
For product and technology platforms that are applied across several business units, we rely on our
Innovation & Learning Center in Dinuba (California, USA), the Phoenix Innovation Center (USA), and the
Tessenderlo Innovation Center (Belgium). We also rely on our R&D expertise across a broad area of
organic and inorganic chemistries at lab and pilot scale, which support several innovation projects in Agro,
Tessenderlo Group 2021 annual report | 90
Bio-valorization, and Industrial Solutions. Furthermore, our R&D teams partner with our operations
groups to constantly improve and optimize our products and processes with the aim of ensuring
operational excellence.
We continue to invest in innovation at our R&D sites, including commissioning state-of-the-art pilot
equipment, which facilitates the development of new sustainability concepts for next-generation
products, and improves the “from concept to commercialization” timeframe. Innovation teams at
Tessenderlo Group collaborate directly with our customers to support the adoption and use of our
products at their sites and in their processes.
Finally, at the end of 2021, Tessenderlo Group signed a partnership agreement with Haarslev, which is the
largest supplier of rendering and processing solutions in the world. Haarslev is partnering with
Tessenderlo Group to combine their respective experience in the field of the production of highly
digestible feather meals and blood meals via gentle drying technologies, with Tessenderlo Group’s
patented know-how.
Innovation and CAPEX CSR screening tool
We worked together as part of the 14th Interdisciplinary Assessment Project (IAP) with Agoria, Alimento,
Flanders' FOOD, and KU Leuven (Faculty of Economics and Business, Brussels campus, and Faculty of
Industrial Engineering, Ghent campus), with 3 students from the Industrial Engineering, Environment and
Prevention Management and Commercial Engineering/Commercial Science/Business Administration/
Business Economics & Business Policy Master’s programs.
From October to December 2021, the interdisciplinary team of Master's students from these fields
developed together with us the basis for a simple, robust, and logical CSR screening tool for all our
innovation and CapEx projects. The tool allows "accounting" of the sustainability for our projects in light
of the CSR-related upcoming regulations. The scoring tool is now further refined to allow our company to
measure the CSR progress in innovation-related and CapEx CSR-related projects on a project and portfolio
level.
Tessenderlo Group 2021 annual report | 91
Crop Vitality and Tessenderlo Kerley International
Precision agriculture
In agriculture, our crop nutrition and crop protection companies support growers in meeting the global
demand for food production.
Producing sufficient food for a growing population is the driving force behind the progress of agricultural
production and sustainability initiatives. A potential global population of nearly 10 billion by 2050 means
advances in food production technologies will be needed.
Our agricultural activities support our vision of building a safe, smart, and sustainable world. By upcycling
by-products from refineries into safe, non-hazardous fertilizers that become a valuable resource for
growers, we contribute to creating sustainable agriculture. We help growers around the world meet the
challenges of global food production. This is achieved with our high-efficiency fertilizers that are used in
conjunction with precision agricultural practices, which reduce the amount of nutrients lost to air or runoff
to waterways. Precision agricultural practices can lower water use with drip irrigation and placing fertilizer
in the exact location where the plant requires it as opposed to simple broadcast methods. By providing
growers with training based on our research, we give them the tools and resources to improve their soil
and crop health. By working continuously with the authorities, crop advisors, and growers, we believe
that contributing to the goal of feeding 10 billion people is achievable.
For developing economies, population growth and land availability are some of the main problems
agriculture is facing today. Proper use of crop nutrition and crop protection products make the available
farmland more effective and limits the need to clear more land for additional crop production.
Every time a crop is grown and harvested, nutrients are taken from the soil and these nutrients must be
replaced in order to continue producing food, feed, fuel, and fiber crops. Sulfur, nitrogen, potassium,
calcium, and magnesium fertilizers make a vital contribution to healthy, productive soils by providing the
nutrients that plants need for their growth.
NovaSource
Crop protection
As long as agriculture has existed, pests, weeds, and diseases have diminished the yield of crops. The
responsible use of our NovaSource crop protection products, which include insecticides, herbicides, and
fungicides, enables growers to overcome these challenges and continue to provide the world with
nutritious, abundant, and affordable food. Our crop protection line includes organic and naturally sourced
products that combat fungus and mildews, and provide protection from sun damage.
Tessenderlo Group 2021 annual report | 92
PB Leiner
We valorize animal by-products better, creating mutual value, close to our stakeholders
We produce gelatin and collagen peptides that are used for valuable applications in the food,
pharmaceutical, and health & nutrition sectors. The raw material we use, which is the remains of animals
slaughtered for the meat and fish industry, might otherwise simply have been discarded: pig skins, beef
hide, and bones are products that, in most countries, are only used for human consumption in limited
quantities, or even not at all. By upcycling these materials, we make the most of our planet’s resources.
As part of Tessenderlo Group, we adhere to the group’s motto: “Every Molecule Counts.” This motto
represents the unique attitude we have towards sustainability and innovation. In everything we do, we
seek to further valorize the resources at our disposal. This counts just as much for the end products we
make, which we constantly optimize, as it does for the by-products from our processes, which we
consistently seek to repurpose as best we can.
The application potential of gelatin and collagen is astonishingly broad. In food, for example, gelatin can
make your croissants fluffier, your mousses airier, and it gives gummies that nice chewy bite. Moreover,
gelatin can extend the shelf life of certain foods, hence limiting food waste. Gelatin is also the most widely
used ingredient to make medical capsules, on account of its almost universal body tolerance, combined
with the fact that it melts at body temperature and displays useful elasticity and clarity features. Collagen
peptides in turn can enhance bone and joint health and are used as part of patients’ recovery nutrition.
And that is not all. We also produce dicalcium phosphate (DCP) from animal origin, which is suitable for
animal feed. This phosphor source replaces phosphorus from mining in the feed sector, thus counteracting
a depletion of our natural resources. Furthermore, DCP from animal origin is better absorbed by chickens,
which leads to less phosphorus pollution of open waters. And the sludge sediment that remains after the
treatment of our wastewater contains nutrients like phosphorus and nitrogen that help plants grow.
Those nutrients actually come from the plant feed given to the cows and pigs that are our source of raw
material. And so today we are working on closing the loop: at several locations across the globe, we are
working on ways to transform our sludge into a soil enhancer.
Whilst meat consumption in the Western world is slightly declining, the worldwide consumption of meat
is still increasing due to the growth of global GDP. By continuously looking at how we can optimize our
processes, we not only increase the yield but are also able to upgrade the characteristics of our finished
products. This results in higher value creation of the consumed raw materials.
When it comes to our processes, we also actively apply our “Every Molecule Counts” philosophy. We are
continuously working to improve every segment of our organization. For example, while our production
process uses large quantities of water, we take great care to minimize our water consumption and to
make sure it is properly treated before discharge so it has no negative impact on the receiving water body.
When it comes to energy, we continuously strive to optimize and reduce our consumption of electricity
and heat.
This being said, continuous improvement will only get us so far. A dedicated workgroup is setting out the
beacons and how we will get there, and we are committed to making the necessary investments.
Tessenderlo Group 2021 annual report | 93
Akiolis
At Akiolis, we help to create a more sustainable world through our operations. This means adding value
to animal materials generated in the production of, but not included in, food for human consumption. In
doing so, we are a link in an intelligent chain based on the recovery of co-products and by-products.
Processed animal protein (PAP) and animal fats generated from these materials allow us to conserve fossil
fuels and food sources. As a core element of the circular economy, the recovery of animal materials
enables us to directly address the question of sustainable development.
Our business model is naturally aligned with the circular economy. As part of our service, we collect animal
co-products and by-products in the meat industry (e.g. slaughterhouses, butchers, and cutting plants) and
in distribution (e.g. large retailers). Through appropriate treatment, we are able to harness the nutritional
or technological potential of these animal proteins and fats, which we then provide to manufacturers in
various sectors that require renewable materials for their own processes.
Some examples:
• Our PAP and animal fats are a substitute for fossil fuels in generating green electricity or steam
used in industrial furnaces, or indeed as a building heating source.
• Our proteins can be used to feed farmed fish. They are also a substitute for fishmeal, which helps
to protect and conserve maritime wildlife.
• Our animal proteins can also be used to fertilize soil or be applied as a fertilizer to vines, fruit
trees, vegetable crops, and green spaces, and they conform to organic agricultural standards.
• Our animal fats are an ingredient in soaps and detergents, as a substitute for palm oil.
• Our fats and proteins are also an ingredient in food for dogs and cats.
• By collecting bones from slaughterhouses, we are also able to extract bone minerals, resulting in
ossein, used in gelatin production.
Tessenderlo Group 2021 annual report | 94
DYKA Group
Sustainable water & air management, energy transport and building systems
DYKA Group’s long-life plastic pipe systems reduce water leakages in drinking water supply and
wastewater discharge networks. The electrical cable ducting systems and gas piping systems support the
energy transition towards renewable energy sources. Incorporating recycled materials into our piping
systems reduces the need for finite resources and landfill.
Catastrophes relating to climate change have increased significantly in recent years and will continue to
occur more frequently. Unpredictable levels of rainfall often exceed retention capacities, create flood
damage, and overrun water treatment facilities. Although we realize that no system is equipped to
completely manage all flooding, our solutions for drainage, attenuation, and infiltration, as well as our
stormwater management systems, work effectively against the negative impacts of increasingly frequent
rainstorms. These solutions reduce flooding and collect, store, and manage sudden rainfall, which
prevents it from immediately spilling into rivers and retaining its capacity for reuse.
Throughout the world, too much clean drinking water goes to waste. This is not only the case in the
developing world. Poor quality pipework and leakages in distribution infrastructure result in the loss of
one-third of all drinking water. Our solution to this major problem is to supply high-performance, long-
life plastic pipe systems that will reduce water loss in the pressure supply network. Our objective is to
significantly reduce this staggering level of waste.
The trend of urbanization represents a massive challenge regarding water supply and treatment. Key
environmental issues, such as sustainable urban drainage, green infrastructure, and the increasing use of
brownfield sites are causing the house building market to change. The growing population also means the
market for construction materials is experiencing high levels of demand.
The increasing demographic movement of people to cities has led to the increase in wastewater drainage
requirements with a wide network of connections. Pipes and fittings are the prerequisites for housing.
We are constantly diversifying our product range to ensure that we can respond to these changes.
Drinking water will become the world’s most valuable product over time. We currently face a mega-
challenge in providing drinking water to everyone. In the future, we need to become smarter in terms of
managing our water supplies. Our plastic pipes will ensure the safe transportation of all different kinds of
water; not only drinking water but also rain and wastewater.
Practical innovation also means the creative use of our systems to support other challenges. Just as water
pipe systems have clearly contributed to the health and well-being of people for decades, legislation is
now focusing on additional building standards with respect to air treatment. Fortunately for the
environment and energy consumption, the insulation of our houses has improved dramatically in recent
times. However, this brings with it the risk of a decrease in the inflow of oxygen in houses that can, in
turn, result in the retention of humidity and poor air quality that endangers the health of the nearby
residents. Based on our considerable expertise in water treatment systems we are now converting this
knowledge into air ventilation and treatment solutions that will contribute to a healthy climate inside
houses.
In the production of the intermediate layer of our PVC pipes, we increasingly incorporate recycled PVC
material, giving new value to post-consumer PVC material and reducing demands on finite resources
whilst maintaining high-quality levels. Also, the use of recycled PP materials in injection molded products
has increased in recent years (e.g. Rainbox infiltration boxes and inspection chamber bases).
Tessenderlo Group 2021 annual report | 95
Kuhlmann Europe
Water treatment, cleaner water, and much more
We bring solutions to treat and recycle dirty water with quick, cost-effective concepts and we develop
sustainable processes for resource conservation.
In the water treatment market, we are the number three supplier in Europe of inorganic chemicals that
act as coagulants for customers in municipal or industrial waste and drinking water plants. We serve some
of the major cities in Europe, including Paris and Brussels. Too frequently, contaminated wastewater from
industrial processes is simply thrown away and many decontamination methods employ finite raw
materials, which create additional waste and environmental problems. We help our customers take dirty
water and deliver clean water through the use of recycled chemicals that coagulate phosphates and other
contaminants both quickly and in a cost-effective way.
The Kuhlmann Europe business unit offers alternative reuse opportunities for the by-product HCl from
SOP (sulfate of potash) and waste pickle liquor from the steel industry by converting them into coagulants
used for the treatment of municipal and industrial wastewater, as well as for the production of drinking
water.
The circular business model for water treatment products allows for the use of a by-product from the
sulfate of potash fertilizer production present in our Group as a raw material for the steel industry. Once
used by the latter in their pickling operations, Kuhlmann Europe recuperates the pickling liquor from our
customers, which is in turn used to produce coagulants for water treatment. These coagulants then enable
phosphorus to be extracted from wastewater and in doing so prevent the eutrophication of surface
waters.
Tessenderlo Group 2021 annual report | 96
moleko
Sustainability in industrial businesses
Through the creation of environmentally aware chemistries for mining and industrial applications, the
moleko business unit is creating a safer workspace for customers and plant production processes.
Our innovative and alternative chemistries such as Thio-Gold®, which can replace cyanide (CN) lixiviants,
are allowing for extended mine life and gold recovery with less environmental impact and a safer working
environment.
Our cyanide detoxification chemistry and applications help to eliminate the discharge of noxious
chemicals to mine tailings, which protects both local communities and wildlife from exposure to this
hazard.
Our polysulfide line of products including Calmet® and Cyntrol ® provide a safe and effective method of
remediating heavy metals in contaminated soil and groundwater applications, as well as converting
corrosive cyanides in refining applications into nonhazardous chemistry, protecting equipment, and
reducing potential environmental emissions.
Our Captor® product provides safe, nonhazardous dechlorination and deozonation chemistry in municipal
water treatment facilities, which replaces the use of more hazardous chemicals.
Moleko integrates at either its customer’s sites or where it can upcycle by-product gases from refineries
and convert them into value-added chemistry, all while ensuring world-class environmental performance.
This optimizes logistics, thus reducing our carbon footprint.
Our value proposition is founded on making Every Molecule Count and it is backed by a product
stewardship program that focuses on the safe and effective use of our products.
Moleko is focused on macro drivers of sustainability where our products play an essential role in enabling
the production of copper, water purification, remediation of contaminated soils/water, food processing,
and biofuel production.
Tessenderlo Group 2021 annual report | 97
T-Power
Gas power plants in the energy mix of the future
Since June 2011, T-Power has been operating a CCGT plant (Combined Cycle Gas Turbine, steam, and gas
power plant) on the Tessenderlo Group sites in the Belgian municipality of Tessenderlo. This gas plant
combines a gas turbine with a steam turbine to produce electricity. The natural gas is first burned in the
gas turbine, thus driving it, and the combustion gases then enter the recovery boiler, which produces
steam. The steam is then fed into the steam turbine. As a result, approximately two-thirds of the
combustion heat is recovered. The plant provides 425 megawatts of electricity and it meets the latest
environmental standards.
The gas-fired power plant is very flexible, and this flexibility is becoming increasingly important due to the
rising share of fluctuating energy sources in the power grid, such as wind power and solar energy. A gas
power plant has lower emissions than lignite and coal-fired power plants and it also has a different risk
profile to that of nuclear power stations. This modern power plant enables Tessenderlo Group to respond
to developments in the Belgian energy market.
The CSR infographics for each business unit are available on the Tessenderlo Group website
(www.tessenderlo.com/en/csr-infographics).
Tessenderlo Group 2021 annual report | 98
Some initiatives within the group
Tessenderlo Group continually strives to find more sustainable solutions. We aim to minimize our
ecological footprint and to maximize the contribution of our products in the transition to a green
economy. We offer various products and environmentally friendly solutions, in which we typically reclaim
and transform by-products from our own or other industries.
In 2021, we took many initiatives with regard to sustainability on a group and BU level to help to create a
world that makes the most of its resources. We aim to fully understand what is happening in the world to
determine how we can build the business of tomorrow by successfully addressing those issues.
For example, Tessenderlo Kerley International continued the conversion of its furnaces, which are used
to produce sulfate of potash, a key fertilizer in the agriculture sector. They are converted to a more
sustainable energy source, which results in a significant reduction of energy, a lower carbon footprint, and
a strong reduction of emissions. 14% of the capacity was converted in 2021, which is an equivalent CO2
reduction of 6.5% and 43% of the capacity has been converted overall, which is an equivalent CO2
reduction of 20% for the total SOP production so far. In the coming years, the program will continue until
all our furnaces have been converted.
We are also improving our furnace efficiency at Kuhlmann Europe with the Mersen loop of the HCl furnace
that has been put into operation. This system is based on the concept of cooling the furnace indirectly
with a closed-loop and recovery of the furnace energy to preheat the brine. In addition to making the
furnace more reliable, it reduces the amount of steam used to heat the brine. This represents a significant
energy gain thanks to the reduction of the gas consumption of the steam boiler and the production of
CO2.
In our eco-responsible approach, we are also starting to recover our hydrogen at Kuhlmann France, which
is burned instead of using natural gas.
Tessenderlo Kerley, Inc. also ran the East Dubuque Air Cooler Expansion project, which installed a fin fan
air cooler to cool the product from the production unit during the recent Thio-Sul® expansion project. The
installation of the air-cooled system reduces the amount of water consumed and lost to evaporation and
blowdown in the cooling tower.
At DYKA Group, with the aim of contributing to our sustainability targets in regard to transportation,
energy-efficient PP and PVC injection molding machines were installed in 2021 in the DYKA Tube SAS plant
in France. DYKA BV in the Netherlands also received the CO2 performance ladder certificate. DYKA’s PE
gas transportation pipes are KIWA certified for the transportation of hydrogen gas to stimulate the
transition towards the use of renewable energy.
All of our injection molding and extrusion plants joined the OCS (Operation Clean Sweep) initiative to
reduce the spill of plastic pellets throughout the entire plastic value chain. We also participated in the DI-
Plast project to boost the uptake of plastics recyclates in the plastics value chain.
At T-Power, we succeeded in the implementation of the SP7 project in 2021. The SP7 upgrade is a full-
service package solution that is specifically designed to bring older version machines up to the latest
specifications and help to improve performance and flexibility in line with the Belgian energy market.
Thanks to this intervention, the flexibility of the plant has increased as it can now provide stable power to
the grid from 190 MW, where previously it was only from 240 MW.
Tessenderlo Group 2021 annual report | 99
Our community
Sustainability and corporate social responsibility also mean that we as a group must be aware of what is
going on outside of our company walls. Tessenderlo Group plays an important role in society. We want to
make a positive contribution to society and help to create a society that is characterized by more
prosperity and a higher level of well-being for all of our stakeholders. In our daily activities and objectives,
we continuously consider our stakeholders, who include our employees, customers, suppliers, partners,
shareholders, media, and local residents in the areas in which we operate.
We also care about the community around us and we therefore participate and actively promote the
participation of our teams in social and charity events. Some of our companies also have active
partnerships with learning institutions and are a recognized partner for development purposes. This is an
investment in the future of education, as well as in future generations.
We organize and participate in various initiatives. For instance, we organize on-site plant tours, invite
guest speakers at courses, and participate in job fairs; this often results in internships, which in turn can
lead to fixed employment over time. Failure to successfully manage relationships with local communities
could adversely affect the group’s reputation. Tessenderlo Group will continue its efforts to make a
positive contribution to the local communities it is part of.
Business ethics
All employees and subsidiaries of Tessenderlo Group worldwide aim to comply with the applicable laws
and regulations of the countries in which they operate, with the Tessenderlo Group Code of Conduct and
are expected and required to comply with the contents of the Code of Conduct.
Tessenderlo Group requires honesty and integrity from all employees in the application of the Code of
Conduct and in all aspects of its business and expects the same of all its partners. Tessenderlo Group
complies with generally accepted international standards for business practices, which form the basis for
its activities and relations worldwide. For those also in a position of leadership and management at
Tessenderlo Group, this means, among other things, that they show “zero tolerance” towards violations
of local/international laws and all infringements of The Code of Conduct, other company rules, and
regulations. The protection and care of people and the environment represents a significant part of
Tessenderlo Group company policy.
Code of Conduct
In 2017, a Code of Conduct was drafted and incorporated into our organizational DNA. Our Code of
Conduct builds upon the Guiding Principles of Tessenderlo Group, together with our 6 Attitudes.
Fundamentally, the Code of Conduct sets out how we intend to continue to fully comply with the laws
and regulations in all regions where our organization is operating.
Due diligence procedures have been built into various business processes to ensure compliance with
Tessenderlo Group’s Code of Conduct across all of our segments. Verification of the operation of these
procedures is included in the audit program of the company’s Internal Audit Department. The Code of
Conduct describes the procedure to be followed for reporting and investigating violations of the Code.
Tessenderlo Group 2021 annual report | 100
Procurement & Supplier Code of Conduct
Looking from a social, ethical, or environmental perspective, the area of Procurement is a very important
area in terms of sustainability. We look to our own impact for the material topics in Scope 1 and Scope 2,
but the impact from the supply chain is as important, or sometimes even more important in terms of
emissions or impact on the environment. At Tessenderlo Group, we have a Group Procurement
Sustainability Policy that was published in 2021. The purpose of this policy is to solidify sustainability and
CSR within Procurement and our suppliers’ communities.
In addition to our Group Procurement Sustainability Policy, we also have our Tessenderlo Group Supplier
Code of Conduct. This lists for our suppliers our requirements with respect to business ethics, social,
safety, health, and environmental performance, which are in line with Tessenderlo Group’s guiding
principles. We expect all our suppliers, subcontractors, joint venture partners, and agents to comply with
these requirements. The Supplier Code of Conduct is an integral part of the business contracts and it is a
prerequisite for business partners to be selected to do business with our group. We are in contact with
our supply base to have this document integrated and signed. The Code of Conduct and the Supplier Code
of Conduct are available on the Tessenderlo Group website (www.tessenderlo.com/en/sustainability-
development).
On a regular basis, training sessions on sustainability topics are provided to the Procurement Community
of the group. Every training session is registered on LMS and is available for new employees, in the
onboarding program. KPIs and targets for Procurement that we monitor are shown in the table below.
Procurement
ASSOCIATED MATERIAL ASPECT (GRI)
Score 2020
Score 2021
Procurement training in CSR
New in 2021
100%
% of the spend with Supplier Code of Conduct signature,
measured against the spent of the previous year
New in 2021
61.38% *
* Result of calendar year 2021 - as this KPI started in the course of 2021, the score is continuing to increase.
Anti-bribery and anti-corruption
Tessenderlo Group complies with all applicable anti-bribery laws, including the US Foreign Corrupt
Practices Act (“FCPA”), the UK Bribery Act, and the local laws in every country in which we do business
(for example, European, federal, regional, provincial, and state laws and directives). No employee of
Tessenderlo Group must ever offer, provide or receive any financial or other inducements in order to
obtain, retain, or alter business contracts, or for the purpose of influencing decisions.
In this context, we created a new anti-bribery and anti-corruption policy in 2020, and we launched the
policy throughout the group. In the course of 2021, we also started a series of recurrent online training
courses relating to this policy.
Any breach of laws and regulations, or of Tessenderlo Group’s policies – such as the Code of Conduct –
regarding fraud, anti-trust, corruption, conflict of interests, and other similar areas could have serious
repercussions for the group. Potential impacts include prosecution, fines, penalties, and contractual,
financial, and reputational damage.
Tessenderlo Group 2021 annual report | 101
Risks could arise from possible non-compliance with Tessenderlo Group’s Code of Conduct and the
associated internal procedures, as well as from the amendment or application of laws and regulations in
the various jurisdictions in which Tessenderlo Group nv operates. In order to manage the risk, training
courses on the application of the Code of Conduct and anti-trust code are organized worldwide, including
the possibility of reporting violations of rules to various individuals in the organization, such as the
hierarchical superior, the site leader, and HR and, if necessary, the Compliance Officer. There is also a
Compliance Committee active within the group that is dedicated to the coordination of the compliance
activities within the group, which includes the definition of the various training programs that are
organized.
In both 2020 and 2021, we had a zero score for the alerts to the Compliance Officer at the whistleblowing
level, as well as for anti-bribery and anti-corruption.
We also refer you to the financial part of the annual report, pages 36 to 41, which elaborates further on
CSR risks; ethics and compliance, safety, industrial safety, transport accidents, climate risks, cybersecurity,
usage of Tessenderlo Group products, and market and strategic risks.
Ethics and Compliance
ASSOCIATED MATERIAL ASPECT (GRI)
Score 2020
Score 2021
Anti-trust training – current rate of compliance in line with
the defined schedule
86.3%
85.1%
ABC (anti-bribery and anti-corruption) training – current rate
of compliance in line with the defined schedule
New in 2021
62.3%
Code of Conduct training – current rate of compliance in line
with defined schedule
100%
95.1%
IP and confidential information training – current rate of
compliance in line with defined schedule
91%
73.4%
New hires receiving Compliance training in line with the
agreed schedule (by job category) within 90 days of being
hired
New in 2021
95%
Training on harassment and discrimination in the workplace
(TKI)
100%
100%
Tessenderlo Group 2021 annual report | 102
KPIs
Our CSR strategy is inter-connected at the different levels of our group. The materiality topics (Labor and
Human rights, Motivating employees, etc.), with its current metrics (associated material aspect) and KPIs
(GRI), are linked to the higher level goals of the United Nations (SDGs) and also to our policies and
management approaches at Tessenderlo Group. Below are the CSR metrics, with several new KPIs for
2021, and also the associated targets for social topics.
Social metrics
Labor and Human Rights
ASSOCIATED MATERIAL
ASPECT (GRI)
GRI
SDG
Score 2020
Score 2021
Targets
Group
policies
Diversity of gender in
governance bodies (BU
Leadership Teams, Group
Leadership Team and the
Board of Directors)
405-1 a
8
10
New in 2021
18% female
82% male
Diversity
and
Inclusion
policy
Diversity of governance
bodies (gender % of L level, E
level and board)
11% female at L
level*
24% female at E
level*
33% at Board level
12% female at L
level*
24% female at E
level*
33% at Board level
Diversity of gender (all
permanent employees)
New in 2021
16.6% female
83.4% male
Diversity of employees (per
region, per gender, and per
age category expressed in
total numbers)
405-1 b
102-8
See Sustainability
report 2020
See page 75
% of employees compliant in
training Labor and Human
Rights
412-2 b
-
New in 2022
95%
Labor and
Human
rights policy
Equal opportunity-ratio of
basic salary and remuneration
of females to males at L level
405-2
Female 6% higher
than male
Female 5% higher
than male
Equal opportunity-ratio of
basic salary and remuneration
of males to females at E level
Male 3% higher
than female
Male 2% higher
than female
Operations in which the right
to freedom of association and
collective bargaining may be
at risk
407-1
8
0
0
100%
Total new hires
New in 2021
673 new hires
Employee turnover for 2021
401-1,
b
8
10
6.5%
12.9%
*E level = Expert level of Managers at the company; L level = Leadership level of Managers at the company.
Tessenderlo Group 2021 annual report | 103
Motivating employees
ASSOCIATED MATERIAL
ASPECT (GRI)
GRI
SDG
Score 2020
Score 2021
Targets
Group
policies
Average of hours of training
per employee per year,
excluding training on the
job/machine
404-1
8
10
16
14.8
Learning &
Development
policy
Employees receiving regular
signed performance and
career development reviews
expressed in % of E and L
grades
404-3
95%
96%
> 90%
Group talent
strategy
policy
Average years of
seniority/company service
(401-1, b)
10
11.06
13.21*
% of L and E grade
employees in performance-
related incentive plans
New in 2021
100%
> 75%
% of all employees in
performance-related
incentive plans
New in 2021
66%
> 90%
E grade employees in formal
coaching or mentoring
programs
404-2
New in 2021
3.24%
> 5%
% of employees active in LMS
New in 2021
39%
> 75%
Hiring by source -
internal/external
401-2, v
8
10
New in 2021
12% internal
88% external
> 20%
internal
* Given that we progressively induce more systemization for data mining, some data from 2020 could be slightly less accurate, and consequently,
compared to 2021, might not show the complete accurate evolution.
Health and Safety
ASSOCIATED MATERIAL
ASPECT (GRI)
GRI
SDG
Score 2020
Score 2021
Targets
Group
policies
Lost Time Incident (LTI)
frequency ratio
1
(all
employees and contractors)
403-2-
9-10
3
8
8.34
11.12
By BU and
Tessenderlo
Group
Health and
Safety policy
Near misses frequency ratio
2
(all employees and
contractors, expressed as
number of hours worked)
New in 2021
829.76
By BU
Workers representation in
formal joint
management/employee H&S
committee
403-1
102-41
95%
96%
By BU
Accident severity rate
3
(all
employees)
New in 2021
0.56
By BU
Total safety performance
4
(all
employees and contractors)
New in 2021
10.84
By BU and
Tessenderlo
Group
Group insurance percentage
coverage/Life Assurance
coverage
401-2,
i, iii
3
97%
98%
95%
1. LTI (Lost Time Incident) frequency rate is a rolling annual calculation based on the formula “LTIs x 1 million/total hours worked”
2. Near misses frequency ratio (all near miss reports x 1 million/ total hours worked)
3. Accident severity rate (severity of lost time injuries to employees defined as total days absent/1,000 hours worked)
4. Total safety performance (all LTIs + medical treatments x severity rate/total hours worked)
Tessenderlo Group 2021 annual report | 104
Ethics and Compliance
ASSOCIATED MATERIAL
ASPECT (GRI)
GRI
SDG
Score 2020
Score 2021
Targets
Group
policies
Anti-trust training – current
rate of compliance in line with
defined schedule
205-2
4
86.3%
85.1%
95%
Anti Bribery
and -
corruption
policy &
Anti-trust
Competition
policy
ABC (anti-bribery and anti-
corruption) training – current
rate of compliance in line with
defined schedule
New in 2021
62.3%
Code of Conduct training –
current rate of compliance in
line with defined schedule
205-2,
102-16-
17,
(410-1)
100%
95.1%
Code of
Conduct
policy
IP and confidential
information training – current
rate of compliance in line with
defined schedule
(418-1)
91%
73.4%
Group IP
policy
New hires receiving
Compliance training in line
with the agreed schedule (by
job category) within 90 days
of being hired
404-2
New in 2021
95%
Code of
Conduct
policy
Harassment and
discrimination in the
workplace (TKI)
(410-1)
4
100%
100%
Diversity
and
Inclusion
policy
Procurement
ASSOCIATED MATERIAL
ASPECT (GRI)
GRI
SDG
Score 2020
Score 2021
Targets
Group
policies
Procurement training in CSR
404-2
4
8
11
New in 2021
100%
95%
Procurement
Sustainability
policy
% of the spent with Supplier
Code of Conduct signature,
measured against the spent
of the year before
414-2 a
11
New in 2021
61.38% *
75% **
* Result of calendar year 2021 as this KPI started in the course of 2021, the result is further increasing.
** Moving target: the target is increasing over time
Tessenderlo Group 2021 annual report | 105
Environmental metrics
ASSOCIATED
MATERIAL ASPECT
(GRI)
Energy
(MWh/y)
Energy intensity (MWh/t)
Total energy
consumption
within the
organization,
in MWh, and
per operating
segment
Total energy
intensity ratio for
the organization,
and per operating
segment
Organization-
specific metric (the
denominator) to
calculate the ratio
Types of energy
included in the
intensity ratio
The ratio uses
energy
consumption
within the
organization,
outside of it, or
both
GRI
302-1 e
302-3 a
302-3 b
302-3 c
302-3 d
SDG
12, 13
Group policies
Corporate Social Responsibility policy
Energy in 2020
Group
(minus T-Power)
2,061,018
0.79
The denominator is in
metric tons of year
product produced to
be sold; by-products
included
Hydrogen,
electricity, liquid
light fuel, liquid
heavy fuel, natural
gas, coal, wood,
steam
The ratio is
based on energy
consumed within
the organization
Agro
364,890
0.23
Bio-valorization
1,480,030
3.02
Industrial Solutions
216,098
0.43
T-Power
2,350,652
NA
Energy in 2021
Group
(minus T-Power)
2,025,833
2,121,075*
0.76
0.79*
The denominator is in
metric tons of year
product produced to
be sold; by-products
included
Hydrogen,
electricity, liquid
light fuel, liquid
heavy fuel, natural
gas, coal, wood,
steam
The ratio is
based on energy
consumed within
the organization
Agro
338,041
347,281*
0.20
0.20*
Bio-valorization
1,457,025
1,534,323*
3.14
3.31*
Industrial Solutions
230,767
239,472*
0.45
0.46*
T-Power
1,531,225
NA
See also boundaries: *vehicles are included from 2021 onwards, impacting the overall energy and energy intensity. To enable comparisons with
2020, the data without vehicles are mentioned (this is the first number).
Tessenderlo Group 2021 annual report | 106
ASSOCIATED
MATERIAL ASPECT
(GRI)
Water withdrawal (m³/y)
Water intensity (m³/t)
Total water
withdrawal
from all
sources
Water withdrawal by source
Information
necessary to
understand how
the data have
been compiled
Water
intensity
Organization-
specific metric
(the
denominator)
to calculate the
ratio
Surface
water
Ground
water
Third-party
water
including
city water
GRI
303-3 a
303-3 a i
303-3 a ii
303-3 a v
303-3 d
NA
NA
SDG
6, 9, 11, 12, 13
Group policies
Corporate Social Responsibility policy
Water in 2020
Group
(minus T-Power)
17,368,681
10,404,045
4,517,606
2,447,031
See separate
information on
granularity &
boundaries
6.67
The denominator
is in metric tons
of year product
produced to be
sold; by-products
included
Agro
3,531,125
2,204,027
670,042
657,056
2.18
Bio-valorization
10,747,657
6,445,389
2,555,499
1,746,770
21.93
Industrial Solutions
3,089,898
1,754,629
1,292,065
43,205
6.21
T-Power
2,224,721
2,168,545
0
56,177
NA
Water in 2021
Group
(minus T-Power)
17,254,251
10,304,877
4,058,152
2,891,221
See separate
information on
granularity &
boundaries
6.43
The denominator
is in metric tons
of year product
produced to be
sold; by-products
included
Agro
3,440,318
2,162,367
522,591
755,360
2.02
Bio-valorization
10,583,725
6,227,104
2,311,726
2,044,895
22.84
Industrial Solutions
3,230,207
1,915,406
1,223,835
90,965
6.26
T-Power
1,362,781
1,306,227
0
56,555
NA
Tessenderlo Group 2021 annual report | 107
GRI index
Organizational profile
102-1 Name of the organization
102-2 Primary brands, products and/or services
102-3 Location of the head office of the organization
102-4 Number of countries in which the organization is active
102-7 Size
Strategy
102-14 Statement by the Board of Directors on the relevance of sustainable development for the
organization and its strategy
Ethics and integrity
102-16 Internally developed mission or statements of principles
102-17 Mechanisms for advice and concerns about ethics
102-22 Composition of the highest governance body and its committees
102-40 List of stakeholder groups
102-43 Approach to stakeholder engagement
102-45 Entities included in the consolidated financial statements
102-46 Defining report content and topic boundaries
102-47 List of material topics
Reporting method
102-50 Reporting period
102-51 Date of most recent report
102-52 Reporting cycle
102-53 Point of contact for questions about the report or its content
102-54 Reporting in accordance with GRI Standards
102-55 GRI table of contents
Management approach
103-1 Explanation of the material topic and its boundaries (materiality)
Economic performance
201-1 Direct economic value generated and distributed
201-3 Defined benefit plan obligations and other retirement plans
Disclosure 201-4 Financial assistance received from the government
Anti-corruption
205-2 Communication and training about anti-corruption policies and procedures
Energy
302-1e Total energy consumption within the organization, in joules or multiples, and per business
segment
302-3a Total energy intensity ratio for the organization, and per business segment
302-3b Organization-specific metric (the denominator) to calculate the ratio
302-3c Types of energy included in the intensity ratio
302-3d Information necessary to understand the energy intensity ratio
Tessenderlo Group 2021 annual report | 108
Water and effluents
303-3a Total water withdrawal from all sources
303-3a I Water withdrawal by source: surface water
303-3a ii Water withdrawal by source: groundwater
303-3a v Water withdrawal by source: third-party water
303-3d Information necessary to understand how the data have been compiled, such as any
standards, methodologies, and assumptions used
Employment
401-1b Total number and rate of employee turnover during the reporting period (by age group,
gender and region)
401-2 i iii Group insurance percentage coverage
401-2 v Retirement fund percentage coverage
Occupational health and safety
403-2-9-10 Hazard identification, risk assessment and work-related injuries and ill health
403-1 Occupational health and safety management system
403-4 Workers representation in formal joint management-worker H&S committee
Training and Education
404-1 Average hours of training per employee per year
404-2 Programs for upgrading employee skills and transition assistance programs
404-3 Employees receiving regular signed performance and career development reviews
Human rights assessments
412-2 Employee training on human rights policies or procedures
Diversity and Equal Opportunities
405-1a Diversity of governance bodies
405-1b Diversity of employees
405-2 Equal opportunity-ratio of basic salary and remuneration
Freedom of association and collective bargaining
407-1 Operations in which the right to freedom of association and collective bargaining may be
at risk
Child Labor
408-1 Operations and suppliers at significant risk for incidents of child labor
Forced or compulsory labor
409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labor
Local Communities
413-1 Collaborations in which local communities are involved
Tessenderlo Group 2021 annual report | 109
Tessenderlo Group 2021 annual report | 110
Consolidated financial statements
Consolidated income statement
For the year ended
December 31
(Million EUR)
note
2021
2020
Revenue
3
Cost of sales
-1,534.5
-1,255.8
Gross profit
Distribution expenses
-120.2
-105.6
Sales and marketing expenses
-62.2
-58.5
Administrative expenses
-124.2
-112.3
Other operating income and expenses
5
-16.5
-20.9
Adjusted EBIT
2
3
EBIT adjusting items
6
-8.1
EBIT (Profit (+) / loss (-) from operations)
Finance costs
9
-15.1
-42.2
Finance income
9
Finance (costs) / income - net
9
-40.5
Share of result of equity accounted investees, net of income tax
14
-1.9
Profit (+) / loss (-) before tax
Income tax expense
10
-42.6
-34.9
Profit (+) / loss (-) for the period
Attributable to:
- Equity holders of the company
- Non-controlling interest
-0.5
Basic earnings per share (EUR)
20
Diluted earnings per share (EUR)
20
The accompanying notes are an integral part of these consolidated financial statements.
2
Adjusted EBIT is considered by the group to be a relevant performance measure in order to compare results over the period 2020-2021, as it
excludes adjusting items from the EBIT (Earnings before interest and taxes). EBIT adjusting items principally relate to restructuring, impairment
losses, provisions, gains or losses on significant disposals of assets or subsidiaries and the effect of the electricity purchase agreement.
Tessenderlo Group 2021 annual report | 111
Consolidated statement of comprehensive income
For the year ended
December 31
(Million EUR)
note
2021
2020
Profit (+) / loss (-) for the period
Translation differences
3
-13.8
Net change in fair value of derivative financial instruments, before tax
26
-0.2
Share in other comprehensive income of joint-ventures accounted for using
the equity method
-
-0.0
Other movements
-0.2
Income tax on other comprehensive income
15
-0.5
Items of other comprehensive income that are or may be reclassified
subsequently to profit or loss
-14.2
Remeasurements of the net defined benefit liability, before tax
23
-0.7
Income tax on other comprehensive income
15
-1.2
Items of other comprehensive income that will not be reclassified
subsequently to profit or loss
Other comprehensive income, net of income tax
-13.9
Total comprehensive income
Attributable to:
- Equity holders of the company
- Non-controlling interest
-0.8
The accompanying notes are an integral part of these consolidated financial statements.
3
The 2021 translation differences are mainly impacted by the weakening of the EUR against the USD (-8%), while the 2020 translation differences
were impacted by the strengthening of the EUR against the USD (+9%).
Tessenderlo Group 2021 annual report | 112
Consolidated statement of financial position
As per December 31
(Million EUR)
note
2021
2020
Assets
Total non-current assets
Property, plant and equipment
11
Goodwill
12
Intangible assets
13
Investments accounted for using the equity method
14
Other investments and guarantees
14
Deferred tax assets
15
Trade and other receivables
16
Total current assets
Inventories
17
Trade and other receivables
16
Current tax assets
10
Derivative financial instruments
26
Short term investments
18/22
Cash and cash equivalents
18/22
Total assets
Equity and Liabilities
Equity
Equity attributable to equity holders of the company
Issued capital
Share premium
Reserves and retained earnings
Non-controlling interest
Total equity
Liabilities
Total non-current liabilities
Loans and borrowings
22
Employee benefits
23
Provisions
24
Trade and other payables
25
Derivative financial instruments
26
Deferred tax liabilities
15
Total current liabilities
Bank overdrafts
18/22
Loans and borrowings
22
Trade and other payables
25
Derivative financial instruments
26
Current tax liabilities
10
Employee benefits
23
Provisions
24
Total liabilities
Total equity and liabilities
The accompanying notes are an integral part of these consolidated financial statements.
Tessenderlo Group 2021 annual report | 113
Consolidated statement of changes in equity
(Million EUR)
Issued
capital
Share
premium
Legal
reserves
Translation
reserves
Hedging
reserves
Retained
earnings
Equity
attributable
to equity
holders of
the
company
Non-
controlling
interest
Total equity
Balance at January 1, 2021
-102.1
-3.0
Profit (+) / loss (-) for the
period
-
-
-
-
-
Other comprehensive
income
- Translation differences
-
-
-
-
-
- Remeasurements of the
net defined benefit liability,
net of tax
-
-
-
-
-
-
- Net change in fair value of
derivative financial
instruments, net of tax
-
-
-
-
-
-
- Other movements
-
-
-
-
-
-
Comprehensive income, net
of income taxes
Transactions with owners,
recorded directly in equity
- Dividends paid to
shareholders
-
-
-
-
-
-
-0.6
-0.6
Total contributions by and
distributions to owners
-0.6
-0.6
Balance at December 31,
2021
-81.2
-1.6
Tessenderlo Group 2021 annual report | 114
(Million EUR)
note
Issued
capital
Share
premium
Legal
reserves
Translation
reserves
Hedging
reserves
Retained
earnings
Equity
attributable
to equity
holders of
the
company
Non-
controlling
interest
Total equity
Balance at January 1, 2020
-88.4
-2.8
Profit (+) / loss (-) for the period
-
-
-
-
-
-0.5
Other comprehensive income
- Translation differences
-
-
-
-13.7
-13.7
-0.1
-13.8
- Remeasurements of the net
defined benefit liability, net of tax
-
-
-
-
-
-
- Net change in fair value of
derivative financial instruments,
net of tax
-
-
-
-
-0.2
-
-0.2
-
-0.2
- Share in other comprehensive
income of joint-ventures
accounted for using the equity
method
-
-
-
-
-0.0
-
-0.0
-
-0.0
- Other movements
-
-
-
-
-
-
-0.2
-0.2
Comprehensive income, net of
income taxes
-13.7
-0.2
-0.8
Transactions with owners,
recorded directly in equity
- Repurchase of own shares
19
-
-
-
-
-
-4.2
-4.2
-
-4.2
- Dividends paid to shareholders
-
-
-
-
-
-
-0.0
-0.0
Total contributions by and
distributions to owners
-4.2
-4.2
-0.0
-4.3
Balance at December 31, 2020
-102.1
-3.0
The accompanying notes are an integral part of these consolidated financial statements.
Tessenderlo Group 2021 annual report | 115
Consolidated statement of cash flows
For the year ended
December 31
(Million EUR)
note
2021
2020
Operating activities
Profit (+) / loss (-) for the period
Depreciation, amortization and impairment losses on tangible assets and intangible assets
8
Changes in provisions
-3.5
Finance costs
9
Finance income
9
-19.6
-1.8
Loss / (profit) on sale of non-current assets
-3.6
-5.0
Share of result of equity accounted investees, net of income tax
-0.7
Income tax expense
10
Other non-cash items
-3.1
Changes in inventories
-50.5
-27.7
Changes in trade and other receivables
-94.7
-2.0
Changes in trade and other payables
Change in accounting estimates - inventory write off
3/17
Net change in emission allowances recognized within intangible assets
-0.3
Revaluation electricity forward contracts
-0.8
-0.4
Bargain purchase recognized following the acquisition of the activities of DYKA Tube SAS
-
-2.4
Cash generated from operations
Income tax paid
10
-46.6
-40.3
Dividends received
Cash flow from operating activities
Investing activities
Acquisition of property, plant and equipment
11
-95.7
-99.5
Acquisition of intangible assets
13
-0.3
-0.7
Acquisition of investments accounted for using the equity method
14
-
-2.0
Acquisition of subsidiary, net of cash acquired
4
-
-5.7
Proceeds from the sale of property, plant and equipment
Proceeds from the sale of subsidiaries, net of cash disposed of
-
-0.1
Cash deposit paid for prequalification CRM auction (T-Power)
-16.3
-
Cash deposit reimbursed for prequalification CRM auction (T-Power)
-
Acquisition of short term investments
4
18/22
-40.0
-20.0
Proceeds from sale of short term investments
4
18/22
Cash flow from investing activities
-79.0
-122.2
Financing activities
Repurchase of own shares
19
-
-4.2
Payment of lease liabilities
11/22
-20.6
-22.6
Proceeds from new borrowings
Reimbursement of borrowings
-48.7
-47.2
Interest paid
9
-15.1
-16.3
Interest received
Other finance costs paid
-1.0
-1.5
Decrease/(increase) of long term receivables
Dividends paid to non-controlling interest
-0.6
-0.0
Cash flow from financing activities
-80.1
-83.6
Net increase / (decrease) in cash and cash equivalents
Effect of exchange rate differences
-0.8
Cash and cash eq. less bank overdrafts at the beginning of the period
18/22
Cash and cash eq. less bank overdrafts at the end of the period
18/22
The accompanying notes are an integral part of these consolidated financial statements.
4
As per cashflow statement of December 31, 2020, the short term investments were included in the “Cashflow from financing activities”. In 2021,
these short term investments were included in “Cashflow from investing activities”. The cashflow statement of December 31, 2020 has therefore
been restated to present short term notes consistently within investing activities.
Tessenderlo Group 2021 annual report | 116
The cash flow from operating activities decreased from 282.3 million EUR in 2020 to 248.1 million EUR as
per December 31, 2021. The increase of the 2021 operational result (increase of Adjusted EBITDA by +39.7
million EUR), mainly within Agro and Industrial Solutions (note 3 - Segment reporting), was more than
offset by an increase of the working capital. The changes in working capital led to a cash outflow of -61.3
million EUR in 2021 mainly impacted by higher inventories, due to increased raw material prices and
energy costs (-50.5 million EUR). The net impact of the variance in trade and other receivables and trade
and other payables was limited to -10.9 million EUR. The increase in taxable result, resulted in higher
income taxes paid (-46.6 million EUR in 2021 compared to only -40.3 million EUR in 2020).
The cash flow from investing activities increased from -122.2 million EUR to -79.0 million EUR. Total capital
expenditure amounts to -95.9 million EUR (2020: -100.2 million EUR) (note 3 - Segment reporting). The
proceeds from the sale of property, plant and equipment for an amount of 7.0 million EUR mainly relate
to the sale of the assets of the MPR and ECS activities (note 6 - EBIT adjusting items). In 2020 a cash
consideration was paid for the acquisition of a production plant in La Chapelle-Saint-Ursin (France) by
DYKA Tube SAS (operating segment Industrial Solutions), while there were no acquisitions in 2021 (note
4 - Acquisitions and disposals). A financial guarantee, through a cash deposit of 16.3 million EUR, was paid
to Elia (the Belgian transmission system operator) as part of the prequalification file leading to the
participation in the Belgian CRM auction in September 2021 for the construction of a second gas-fired
power station in Tessenderlo (Belgium). As the group was not successful in the CRM auction, the
guarantee was reimbursed before year-end 2021. As per year end 2021, an investment in a short term
bank note is outstanding (included within Short term investments in the consolidated statement of
financial position) for -10.0 million EUR compared to -20.0 million EUR per year-end 2020. The
counterparty is a highly rated international bank. The outstanding note has an original duration of 9
months (maturing in January 2022) (note 18 - Cash and cash equivalents).
The cash flow from financing activities amounts to -80.1 million EUR as per year-end 2021 (2020: -83.6
million EUR). The reimbursement of borrowings (-48.7 million EUR) mainly relates to the reimbursement
in 2021 of the outstanding amount of the commercial paper program (-19.0 million EUR as per December
31, 2020) and the half yearly reimbursements of the T-Power credit facility (-25.7 million EUR). In 2020, a
new loan (+7.5 million EUR) was drawn by Tessenderlo Group nv to finance the purchase of vehicles within
the operating segment Bio‐valorization, while no significant new borrowings were drawn in 2021 (note 22
- Loans and borrowings). Also in 2020, the group bought 132,000 of its own shares at 32 EUR per share
for a total amount of -4.2 million EUR (note 19 - Equity), while no further purchases were made in 2021.
The decrease of the long term receivables is mainly explained by the use of tax credits in France to offset
2021 current tax expenses (note 16 - Trade and other receivables).
As a result, cash and cash equivalents less bank overdrafts increased from 230.0 million EUR in 2020 to
320.2 million EUR as per December 31, 2021 (note 18 - Cash and cash equivalents).
Tessenderlo Group 2021 annual report | 117
Consequences and impact of the COVID-19 pandemic
In light of the latest developments concerning the corona pandemic, Tessenderlo Group continues to take
all the necessary steps to ensure that we keep our people safe and keep our various plants and businesses
running. All of the plants and activities are currently running in line with expectations and the impact of
the COVID-19 pandemic on the consolidated financial statements of the group in 2020 and 2021 was not
significant. Activities could be further impacted in 2022 if too many employees are affected by COVID-19
and/or if access to raw materials and auxiliary materials or means of transportation becomes more
complicated, or if our customers are no longer able to process our products.
Notes to the consolidated financial statements
Page
1
Summary of significant accounting policies
118
2
Determination of fair values
134
3
Segment reporting
135
4
Acquisitions and disposals
139
5
Other operating income and expenses
139
6
EBIT adjusting items
140
7
Payroll and related benefits
141
8
Additional information on operating expenses by nature
141
9
Finance costs and income
142
10
Income tax expense
144
11
Property, plant and equipment
145
12
Goodwill
148
13
Intangible assets
150
14
Investments accounted for using the equity method
152
15
Deferred tax assets and liabilities
153
16
Trade and other receivables
154
17
Inventories
155
18
Cash and cash equivalents
156
19
Equity
156
20
Earnings per share
159
21
Non-controlling interest
159
22
Loans and borrowings
160
23
Employee benefits
163
24
Provisions
169
25
Trade and other payables
170
26
Financial instruments
171
27
Guarantees and commitments
179
28
Contingencies
180
29
Related parties
181
30
Auditor's fees
185
31
Subsequent events
185
32
Group companies
186
33
Critical accounting estimates and judgments
188
Tessenderlo Group 2021 annual report | 118
1. Summary of significant accounting policies
Tessenderlo Group nv (hereafter referred to as the "company"), the parent company, is domiciled in
Belgium. The consolidated financial statements for the year ended December 31, 2021 comprise the
company and its subsidiaries (together referred to as the "group") and the group’s interests in jointly
controlled entities.
The IFRS financial statements were authorized for issue by the Board of Directors of Tessenderlo Group
nv on Tuesday March 22, 2022.
(A) Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) as adopted by
the European Union.
(B) Basis of preparation
The financial statements are presented in euro, which is the company’s functional currency, rounded to
the nearest million which may not add up due to rounding. They are prepared on the historical cost basis
except for derivative financial instruments and net defined benefit (liabilities)/assets, which are stated at
fair value.
The preparation of financial statements in conformity with IFRS requires management to make
judgments, estimates and assumptions that affect the application of policies and reported amounts of
assets and liabilities, income and expenses. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgments about carrying values of assets
and liabilities that are not readily apparent from other sources. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the estimate is revised (if the revision affects only that
period) or in the period of the revision and future periods (if the revision affects both current and future
periods).
Judgments made by management in the application of IFRS that have significant effect on the financial
statements and estimates with a significant risk of material adjustment in the next year are discussed in
note 33 - Critical accounting estimates and judgments.
The consolidated financial statements are presented before the effect of the profit appropriation of the
company proposed to the General Assembly of shareholders.
The accounting policies set out below have been applied consistently by the company and all consolidated
companies to all periods presented in these consolidated financial statements.
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(C) Principles of consolidation
Subsidiaries are entities controlled by the group. The group controls an entity when the group is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power over the entity. The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control commences until the date that control
ceases. If the group no longer has control over a subsidiary all assets and liabilities of the subsidiary, any
non-controlling interests and other equity components with regard to the subsidiary are derecognized.
The gains or losses arising on the loss of control are recognized in the income statement.
Non-controlling interests are presented separately from equity attributable to equity holders of the
company. Losses realized by subsidiaries with non-controlling interests are proportionally allocated to the
non-controlling interests in these subsidiaries, even if this means that the non-controlling interests display
a negative balance.
Adjustments to non-controlling interests arising from transactions that do not involve the loss of control
are based on a proportionate amount of the net assets of the subsidiary. No adjustments are made to
goodwill and no gain or loss is recognized in the income statement.
Investments in associates and joint-ventures are included in the consolidated financial statements using
the equity method. The investments in associates are those in which the group has significant influence
over the financial and operating policies, but which it does not control. In general, it is the case when the
group holds between 20% and 50% of the voting rights. The group applies IFRS 11 to all joint
arrangements. Under IFRS 11 investments in joint arrangements are classified as either joint operations
or joint-ventures depending on the contractual rights and obligations of each investor. All joint
arrangements are determined to be joint-ventures, whereby the group has rights to the net assets of the
arrangement, rather than rights to its assets and obligations for its liabilities. The equity method is used
as from the date that significant influence or joint control commences until the date that significant
influence or joint control ceases. When the group’s share of losses exceeds its interest in an associate or
joint-venture, the group’s carrying amount is reduced to nil and recognition of further losses is
discontinued except to the extent that the group has incurred legal or constructive obligations in respect
of the associate or joint-venture.
All intercompany transactions, balances and unrealized gains and losses on transactions between group
companies have been eliminated. Unrealized gains arising from transactions with associates and joint
arrangements are eliminated to the extent of the group’s interest in the entity. Unrealized losses are
eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of
impairment.
(D) Foreign currency
Foreign currency transactions
Foreign currency transactions are accounted for at exchange rates prevailing at the date of the
transaction.
Monetary assets and liabilities denominated in foreign currencies are translated at balance sheet date
rate.
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Non-monetary assets and liabilities denominated in foreign currencies that are stated at historical cost
are translated to the functional currency at foreign exchange rates of the date of the transaction. Non-
monetary assets and liabilities denominated in foreign currencies that are stated at fair value are
translated to the functional currency at foreign exchange rates ruling at the dates the fair value was
determined. For available-for-sale non-monetary assets, foreign exchange gains and losses are not
separated from the total fair value changes.
Foreign currency differences are recognized in profit or loss and presented within finance costs.
Foreign currency translation
Assets and liabilities of foreign entities included in the consolidation are translated to euro at the foreign
exchange rates applicable at the balance sheet date. The income statement of foreign entities is translated
to euro at the annual average foreign exchange rates (approximating the foreign exchange rates prevailing
at the dates of the transactions). The components of equity attributable to equity holders of the company
are translated at historical rates.
Exchange differences arising from the translation of the equity attributable to the equity holders of the
company to euro at year-end exchange rates are recognized in other comprehensive income and
presented within “Translation reserves” in Equity. In case of non-wholly owned subsidiaries, the relevant
proportion of the translation difference is allocated to non-controlling interest.
When a foreign operation is disposed of, such that control, significant influence or joint control is lost, the
cumulative amount in the translation reserves related to that foreign operation is reclassified to the
income statement as part of the gain or loss on disposal of the foreign operation.
When the group disposes of only part of its interest in a subsidiary that includes a foreign operation while
retaining control, the relevant proportion of the cumulative amount in the translation reserves is
reattributed to non-controlling interests. When the group disposes of only part of its investment in an
associate or joint-venture that includes a foreign operation while retaining significant influence or joint
control, the relevant proportion of the cumulative amount is reclassified to the income statement.
Exchange rates
The following exchange rates have been used in preparing the financial statements:
Closing rate
Average rate
1 EUR equals :
2021
2020
2021
2020
Brazilian real
6.3101
6.3735
6.3779
5.8943
Chinese yuan
7.1947
8.0225
7.6282
7.8747
Costa Rican colón
725.5900
743.8900
732.0314
665.4463
Czech crown
24.8580
26.2420
25.6405
26.4551
Hungarian forint
369.1900
363.8900
358.5161
351.2494
Indian Rupee
84.2292
89.6605
87.4392
84.6392
Polish zloty
4.5969
4.5597
4.5652
4.4430
Pound sterling
0.8403
0.8990
0.8596
0.8897
Romanian leu
4.9490
4.8683
4.9215
4.8383
Swiss franc
1.0331
1.0802
1.0811
1.0705
Turkisch lira
15.2335
9.1131
10.5124
8.0547
US dollar
1.1326
1.2271
1.1827
1.1422
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(E) Intangible assets
Research and development
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical
knowledge and understanding, is recognized in the income statement as an expense as incurred.
Expenditure resulting from development activities, whereby research findings are applied to a plan or
design for production of new or substantially improved products and processes, is capitalized if all of the
following conditions are met:
- It is technically feasible to complete the asset so that it will be available for sale or use;
- Management intends to complete the development of the asset;
- It is demonstrated how the asset will generate probable future economic benefits. The market
potential or the usefulness of the intangible asset have been clearly demonstrated;
- Adequate technical, financial and other resources to complete the development are available; and
- The expenditures related to the process or product can be clearly identified and reliably
measured.
Other development expenditure is recognized in the income statement as an expense as incurred.
The capitalized expenditure includes the cost of materials and direct labor. Capitalized development is
stated at cost less accumulated amortization (see below) and impairment losses (see accounting policy J).
Borrowing costs
Borrowing costs directly attributable to the acquisition, or production of an intangible asset, requiring a
long preparation, are included in the cost of the intangible asset.
Emission allowances
The cost of acquiring emission allowances is recognized as intangible asset, whether they have been
purchased or received free of charge (in the latter case the acquisition cost is zero). Emission allowances
are not amortized but subject to impairment testing. A provision is set up to cover obligations to refund
allowances depending on emissions if, during a given period, the number of allowances required exceeds
the total number of allowances acquired. This provision is measured at the estimated amount of the
expenditure required to settle the obligation.
The fair value of forward purchase and sale contracts of emission allowance certificates is based on quoted
market prices for futures of EU allowances (EUAs) and Certified Emission Reductions (CERs)
5
.
Intangible assets
Intangible assets, acquired by the group, are stated at cost less accumulated amortization (see below) and
impairment losses (see accounting policy J).
Subsequent expenditure
Subsequent expenditure on capitalized intangible assets is capitalized only when it increases the future
economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as
incurred.
5
The group did not have any such contracts during 2020 and 2021.
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Amortization
Intangible assets with a finite life are amortized using the straight-line method over their estimated useful
lives.
The estimated useful lives of the respective asset categories are as follows:
Development 5 years
Software 3 to 5 years
Customer list 3 to 10 years
Concessions, licenses, patents and other 10 to 20 years
Useful lives and residual values, if significant, are re-assessed annually and adjusted if appropriate.
(F) Goodwill
Business combination
All business combinations are accounted for using the acquisition method as at the acquisition date, which
is the date on which the group obtained control.
The group measures goodwill at the acquisition date as:
- the fair value of the consideration transferred; plus
- the recognized amount of any non-controlling interests in the acquiree; plus
- if the business combination is achieved in stages, the fair value of the pre-existing equity interest
in the acquiree; less
- the net recognized amount (generally fair value) of the identifiable assets acquired and liabilities
assumed.
When the excess is negative, a bargain purchase gain is recognized immediately in the income statement
after re-assessment of the fair values.
Goodwill is expressed in the currency of the subsidiary to which it relates.
Transaction costs, other than those associated with the issue of debt or equity securities, that the group
incurs, are expensed as incurred.
Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent
consideration is classified as equity, then it is not remeasured and settlement is accounted for within
equity. Otherwise, subsequent changes in the fair value of the contingent consideration are recognized in
the income statement.
Subsequent measurement of goodwill
Goodwill is measured at cost less accumulated impairment losses.
Goodwill is tested at least annually for impairment and whenever there is an indicator that the cash-
generating unit to which the goodwill has been allocated may be impaired (see accounting policy J).
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(G) Property, plant and equipment
Owned assets
Items of property, plant and equipment (further also “PPE”) are stated at cost less accumulated
depreciation and impairment losses. Cost includes the purchase price and any costs directly attributable
to bringing the asset to the location and condition necessary for it to be capable of operating in the
manner intended by management (e.g. non-refundable tax, transport and the costs of dismantling and
removing the items and restoring the site on which they are located, if applicable). The cost of a self-
constructed asset is determined using the same principles as for an acquired asset and includes the cost
of materials, direct labor and other directly attributable expenses. Borrowing costs directly attributable
to the acquisition, construction or production of an asset, requiring a long preparation, are included in the
cost of the asset.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted
for as separate items of property, plant and equipment.
Subsequent expenditure
Subsequent expenditure incurred in replacing or renewing components of some items of property, plant
and equipment is accounted for as the acquisition of a separate asset and the replaced asset is written
off. Capitalization of subsequent expenditure is only done when it increases the future economic benefits
embodied in the item of property, plant and equipment and significantly increases production capacity.
Repair and maintenance, which do not increase the future economic benefits of the asset to which they
relate, are expensed as incurred.
Depreciation
Depreciation is charged to the income statement as from the date the asset is available for use, on a
straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment.
The estimated useful lives of the respective asset categories are as follows:
Land infrastructure
6
10 to 20 years
Buildings 20 to 40 years
Building improvements 10 to 20 years
Plant installations 6 to 20 years
Machinery and equipment 5 to 15 years
Furniture and office equipment 4 to 10 years
Extrusion and tooling equipment 3 to 7 years
Laboratory and research – infrastructure 3 to 5 years
Vehicles 4 to 10 years
Computer equipment 3 to 5 years
Land is not depreciated as it is deemed to have an indefinite life.
Useful lives and residual values, if significant, are re-assessed annually and adjusted if appropriate.
6
Land infrastructure mainly includes access roads, fencing and lighting.
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Government grants
Government grants relating to the purchase of property, plant and equipment are deducted from the
carrying amount of the related asset when there is reasonable assurance that they will be received and
the group will comply with the conditions attached to it. They are deducted in the income statement from
the related depreciation charges on a straight-line basis over the estimated useful life of the related asset.
Grants that compensate the group for expenses incurred are recognized as deduction of the related
expense on a systematic basis in the same periods in which the expenses are incurred.
The accounting policy for emission allowances is discussed in section (E) Intangible assets.
(H) Leased assets
The Group has applied in 2019 IFRS 16 Leases using the modified retrospective approach, under which
comparative information is not restated.
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of
time in exchange for consideration.
Assets, representing the rights to use the underlying leased asset, are capitalized as property, plant and
equipment at cost, comprising the following:
- the amount of the initial measurement of lease liability
- any lease payments made at or before the commencement date less any lease incentives received
- any initial direct costs
- restoration costs.
The corresponding lease liabilities, representing the net present value of the lease payments, are
recognized as long-term or current liabilities depending on the period in which they are due.
The lease payments are initially measured at the present value of the lease payments that are not paid at
the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be
readily determined, the group’s incremental borrowing rate, being the rate that the lessee would have to
pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment
with similar terms and conditions. Generally, the group uses its incremental borrowing rate as the
discount rate.
Leased assets and liabilities are not recognized for low-value items and short term leases. Short-term
leases are leases with an initial lease term of 12 months or less. The lease payments associated with these
low-value items and short term leases are recognized on a straight-line basis as an expense over the lease
term.
Lease interest is charged to the income statement as an interest expense.
The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a
straight-line basis. The group determines the lease term as the non-cancellable term of the lease, together
with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or
any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.
The group has applied judgement in evaluating whether it is reasonably certain to exercise the option to
renew by considering all relevant factors that create an economic incentive for it to exercise the renewal.
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(I) Other and short term investments
Each category of investment is accounted for at trade date.
Investments in equity securities
Investments in equity securities are undertakings in which the group does not have significant influence
or control. This is generally evidenced by ownership of less than 20% of the voting rights. Such investments
are designated as equity investments at fair value through other comprehensive income and are recorded
at their fair value on the balance sheet, unless the fair value cannot be reliably determined in which case
they are carried at cost less impairment losses. The fair value is the quoted bid price at balance sheet date.
Changes in fair value are directly recognized in other comprehensive income. Dividends are recognized as
income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the
investment. If investments in equity securities are disposed, the cumulative gain or loss previously
recognized in other comprehensive income remains in other comprehensive income and is never
reclassified to profit or loss.
Other investments
Other investments mainly include cash guarantees. They are initially measured at fair value. Subsequently
other investments are measured at amortized cost.
Short term investments
Short term investments include cash deposits and short term bank notes with a maturity at inception in
excess of three months and are intended to be held to maturity less than one year (solely payment of
principle and interest). They are recognized at their fair value, with the associated revenue in interest
income.
(J) Impairment
The carrying amounts of property, plant and equipment, and intangible assets are reviewed at each
balance sheet date to determine whether there is any indication of impairment. If any such indication
exists, the asset’s recoverable amount is estimated for an individual asset or for a cash-generating unit.
For impairment testing, assets are grouped together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the cash inflows of other assets or cash-
generating units. An impairment loss is recognized whenever the carrying amount of an asset or the
related cash-generating unit exceeds its recoverable amount. Impairment losses are recognized in the
income statement.
Goodwill and intangible assets not yet available for use are tested for impairment at least annually, and
when an indication of impairment exists. An impairment is determined for goodwill by assessing the
recoverable amount of each cash-generating unit to which the goodwill relates.
Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying
amount of any goodwill allocated to cash-generating units and then, to reduce the carrying amount of
other assets in the cash-generating unit on a pro rata basis.
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Calculation of recoverable amount
The recoverable amount of an asset or cash-generating unit is the higher of its fair value less costs to sell
and its value in use. The value in use is the net present value of the estimated future cash flows from the
use of an asset or cash-generating unit. In assessing the value in use, the estimated future cash flows are
discounted to their present value using a discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset, to the business etc .... In determining the fair value
less costs to sell, recent market transactions are taken into account, if these are available.
If an impairment is a consequence of classifying the assets as non-current assets classified as held for sale,
then management’s best estimate is used as a basis for the determination of the fair value of the assets
(also based on knowledge of previous transactions with similar assets).
Reversal of impairment
An impairment loss, in respect of the group’s assets other than goodwill, recognized in prior periods, is
assessed at each balance sheet date for any indication that the impairment loss has decreased or no longer
exists. If there has been a change in the estimates used to determine the recoverable amount on assets
other than goodwill, the previously recognized impairment loss is reversed through the EBIT adjusting
items in the income statement, to the extent that the asset’s carrying amount does not exceed its
recoverable amount, nor the carrying amount that would have been determined, net of depreciation or
amortization, if no impairment loss had been recognized.
An impairment loss in respect of goodwill cannot be reversed.
Financial assets
In accordance with IFRS 9, the group recognizes expected credit losses on trade receivables following the
simplified approach. Lifetime expected losses are recognized for the trade receivables, excluding
recoverable VAT amounts. A provision matrix is used in order to calculate the lifetime expected credit
losses for trade receivables, which is based on the overdue amounts at the reporting date and uses
historical information on defaults. The group considers a financial asset in default when contractual
payments are 60 days past due. For all receivables in excess of 60 days past due, the provision matrix
calculates an allowance between 20% and 100%. However, in specific cases, the group may also consider
a financial asset in default when specific objective evidence of an impairment is obtained as a result of
one or more events, which occurred after the initial recognition of the asset, and that loss event(s) had
an impact on the estimated future cash flows of that asset that can be estimated reliably. Objective
evidence of impairment includes debtor experiencing significant financial difficulty, default or delinquency
by a debtor, indications that a debtor will enter bankruptcy, or economic conditions that correlate with
defaults. Impairment losses are recognized in the consolidated income statement.
(K) Inventories
Inventories are stated at the lower of cost and net realizable value. The cost is determined by the weighted
average cost method.
The cost of finished goods and work in progress comprises raw materials, other production materials,
direct labor, other direct costs and an allocation of fixed and variable production overhead based on
normal operating capacity. Cost of inventories includes the purchase, conversion and other costs incurred
to bring the inventories to their present location and condition. Net realizable value represents the
estimated selling price, less all estimated costs of making the product ready for sale.
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(L) Trade and other receivables
Trade and other receivables are initially measured at fair value and subsequently stated at amortized cost
less appropriate allowances for impairment losses (see accounting policy J).
(M) Cash and cash equivalents
Cash includes cash in hand and cash with banks. Cash equivalents are short-term, highly liquid investments
that are readily convertible into known amounts of cash, have a maturity date of three months or less
from the date of inception and are subject to an insignificant risk of change in value. Cash and cash
equivalents are recognized at their fair value.
(N) Issued capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary
shares and share options are recognized as a reduction from equity, net of any tax effects.
Repurchase of issued capital
When share capital recognized as equity is repurchased, the amount of the consideration paid, including
directly attributable costs, is recognized as a change in equity. Repurchased shares are classified as
treasury shares and presented as a deduction from total equity. When treasury shares are sold or reissued
subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or
deficit on the transaction is presented in share premium.
Dividends
Dividends are recognized as a liability in the period in which they are declared.
(O) Non-derivative financial liabilities
Non-derivative financial liabilities are recognized initially at fair value, less attributable transaction costs.
Subsequent to initial recognition, interest-bearing loans and borrowings are stated at amortized cost with
any difference between cost and redemption value being recognized in the income statement over the
period of borrowings on an effective interest basis.
(P) Provisions
Provisions are recognized in the balance sheet when the group has a present obligation (legal or
constructive) as a result of a past event, it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation.
If the effect is material, provisions are determined by discounting the expected future cash flows at a rate
that reflects current market assessments of the time value of money and, where appropriate, the risks
specific to the liability. The unwinding of the discount is presented as a component of finance costs.
Restructuring
A provision for restructuring is recognized when the group has approved a detailed and formal
restructuring plan, and the restructuring has either commenced or has been announced to those affected
by it. Future operating costs are not provided for.
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Environmental obligations and dismantlement obligations
These provisions are based on legal and constructive obligations from past events, in accordance with
applicable legal requirements.
Onerous contracts
A provision for onerous contracts is recognized when the expected benefits to be derived by the group
from a contract are lower than the unavoidable cost of meeting its obligations under the contract. Such
provision is measured at the present value of the lower of the expected cost of terminating the contract
and the expected net cost of continuing with the contract. Before a provision is established, the group
recognizes an impairment loss on the assets associated with that contract.
(Q) Employee benefits
Post-employment benefits
Post-employment benefits include pensions and medical benefits. The group operates a number of
defined benefits and defined contribution plans throughout the world, of which the assets are generally
held in separate pension funds. Separate trusts and insurers generally hold the pension plans.
- Defined contribution plans:
A defined contribution plan is a pension plan under which the group pays fixed contributions into a fund.
There is no legal or constructive obligation to pay further contributions if the fund does not hold sufficient
assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution pension plans are recognized as an expense in the income
statement as the related service is provided. Prepaid contributions are recognized as an asset to the extent
that a cash refund or a reduction in the future payments is available.
- Defined benefit plans:
A defined benefit plan is a pension plan that is not a defined contribution plan. Typically defined benefit
plans define an amount of pension benefit that an employee will receive on retirement.
For defined benefit plans, the pension accounting costs are assessed separately for each plan using the
projected unit credit method. Under this method, the cost of providing pensions is charged to the income
statement in order to spread the regular cost over the service lives of employees in accordance with the
advice of qualified independent actuaries who carry out annually a full valuation of the plans.
The pension obligation recognized in the balance sheet is determined as the present value of the defined
benefit obligation, using interest rates of high quality corporate bonds that are denominated in the
currency in which the benefits will be paid, and which have terms to maturity approximating the terms of
the related liability, less the fair value of the plan assets. In countries where there is no deep market in
such bonds, the market rates on government bonds are used for discounting.
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. Net
interest expense and other expenses related to defined benefit plans are recognized in profit or loss.
Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, and the
effect of the asset ceiling (if any), are charged or credited to equity in other comprehensive income in the
period in which they arise.
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Where the calculation results in a potential asset for the group, the recognized asset is limited to the
present value of economic benefits available in the form of any future refunds from the plan or reductions
in future contributions to the plan.
Past service costs and gain or loss on curtailment are recognized immediately in the income statement.
Termination benefits (pre-retirement plans, other termination obligations)
These benefits arise as a result of the group’s decision to terminate the employment of an employee or
group of employees before the normal retirement date or of an employee’s decision to accept voluntary
redundancy in exchange for those benefits.
These benefits are recognized as a liability and an expense at the earlier of the following dates: when the
group can no longer withdraw the offer of those benefits, or when the group recognizes costs for a
restructuring that is within the scope of IAS 37 Provisions and involves termination benefits. If benefits
are conditional on future service, they are not treated as termination benefits but as post-employment
benefits.
Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the
related service is provided.
A liability is recognized for the amount expected to be paid under short-term cash bonus or profit-sharing
plans if the group has a present legal or constructive obligation to pay this amount as a result of past
service provided by the employee and the obligation can be estimated reliably.
(R) Income tax
Income tax expense comprises current and deferred tax. Income tax is recognized in the income statement
except to the extent that it relates to items recognized directly to equity or other comprehensive income,
in which case it is recognized in equity or other comprehensive income or it relates to a business
combination, in which case it is recognized against goodwill.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous
years. The amount of current tax payable or receivable is the best estimate of the tax amount expected
to be paid or received that reflects uncertainty related to income taxes, if any.
Deferred tax is provided using the balance sheet liability method, for temporary differences arising
between the carrying values of assets and liabilities for financial reporting purposes and the basis used
for taxation purposes. The following temporary differences are not provided for: taxable temporary
differences arising on the initial recognition of goodwill, the initial recognition of assets or liabilities in a
transaction that is not a business combination and that affects neither accounting nor taxable profit and
differences relating to investments in subsidiaries to the extent that these will probably not reverse in the
foreseeable future. The amount of deferred tax provided is based on the expected manner of realization
or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively
enacted at the balance sheet date, and reflects uncertainty related to income taxes, if any.
A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be
available against which the deductible temporary differences, unused tax losses and credits can be
utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is
no longer probable that related tax benefit will be realized.
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Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax
liabilities and assets, and they relate to taxes levied by the same tax authority on the same taxable entity,
or on different entities, but they intend to settle current tax liabilities and assets on a net basis or their
tax assets and liabilities will be realized simultaneously.
Additional income taxes that arise from the distribution of dividends are recognized at the same time as
the liability to pay the related benefit.
(S) Trade and other payables
Trade and other payables are stated at fair value at initial recognition and subsequently at amortized cost.
(T) Income
Revenue
The five-step model to account for revenue arising from contracts with customers is used. Revenue is
recognized at an amount that reflects the consideration to which the group expects to be entitled in
exchange for transferring goods or services to a customer.
(1) Sale of goods
The majority of the group’s revenue consists of the sale of goods. Products are generally sold directly or
through distributors to the customers. Revenue is recognized based on the transfer of control of
ownership. The point of recognition is dependent on the contract sales terms, known as the International
Commercial terms (Incoterms). The timing of the revenue recognition is not significantly different from
the transfer from risk and rewards. The sale of goods, including transportation, qualifies as a separate
performance obligation. The related costs of transportation are incurred as part of the performance
obligation to transfer goods to the customer.
(2) Rendering of services
The amount of revenue from services is not presented separately in the income statement because it
represents currently an insignificant portion of total revenue for the group.
The sale of services qualifies as a separate performance obligation, of which revenue is recognized when
a customer obtains control of the services, which can be at a point in time or over time. For each
performance obligation satisfied over time, revenue is recognized by measuring the progress towards
complete satisfaction of that performance obligation at the end of each reporting period.
(3) Projects
For revenue out of projects, the amount of revenue is measured by reference to the progress made
towards complete satisfaction of the performance obligation. These projects generally have a lifetime of
less than one year.
Customer contracts might include trade discounts or volume rebates, which are granted to the customer
if the delivered quantities exceed a certain threshold. In these cases, the transaction price includes a
variable consideration. The effect of the variable consideration, recognized at fair value, on the
transaction price is taken into account in revenue recognition by estimating the probability of the
realization of the discount or rebate for each contract.
Tessenderlo Group 2021 annual report | 131
Customer contracts might contain consignment arrangements. The products are shipped and stored in
owned or rented tanks at the customer’s premises. The revenue is only recognized at the moment the
product is actually withdrawn by the customer. The sales price will be the applicable market price at that
moment.
Finance income
Finance income comprises interest receivable on funds invested, dividend income, foreign exchange gains
and gains on derivative financial instruments.
Interest income is recognized in the income statement as it accrues, taking into account the effective
yield on the asset.
Dividend income is recognized in the income statement on the date the entity’s right to receive payments
is established.
(U) Expenses
Finance costs
Finance costs comprise interest payable on loans and borrowings, unwinding of the discount on
provisions, foreign exchange losses and losses on derivative financial instruments.
Interest expense is recognized as it accrues, taking into account the effective interest rate.
All finance costs (borrowing costs) directly attributable to the acquisition, construction or production of a
qualifying asset that form part of the cost of that asset are capitalized. All other borrowing costs are
expensed as incurred and are recognized as finance costs.
(V) Derivative financial instruments
The group uses derivative financial instruments to hedge its exposure to foreign exchange and interest
rate risks arising from operational activities. In accordance with its treasury policy, the group does not
hold or issue derivative financial instruments for trading purposes.
Derivative financial instruments are recognized initially at fair value. The determination of fair values for
each type of financial and non-financial assets and liabilities are further discussed in note 2 -
Determination of fair values. Subsequent to initial recognition, derivative financial instruments are stated
at their fair value at balance sheet date. Depending on whether cash flow hedge accounting (see below)
is applied or not, any gain or loss on this remeasurement is either recognized directly in other
comprehensive income or in the income statement.
Cash flow hedges
The group documents at the inception of the transaction the relationship between hedging instruments
and hedged items, as well as its risk management objectives and strategy for undertaking various hedging
transactions. The group also documents its assessment, both at hedge inception and on an ongoing basis,
whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in
cash flows of hedged items.
Tessenderlo Group 2021 annual report | 132
When a derivative is designated as the hedging instrument in a hedge of the variability in cash flows
attributable to a particular risk associated with a recognized asset or liability or a highly probable forecast
transaction that could affect income statement, the effective portion of changes in the fair value of the
derivative is recognized in other comprehensive income (hedging reserves in equity). Any ineffective
portion of changes in the fair value of the derivative is recognized immediately in the income statement.
When the hedged item is a non-financial asset, the amount accumulated in equity is included in the
carrying amount of the asset when the asset is recognized. In any other case, the amount accumulated in
equity is reclassified to income statement in the same period that the hedged item affects the income
statement.
If the hedging instrument no longer meets the criteria for hedge accounting, or when the hedging
instrument is expired, sold or terminated, any cumulative gain or loss existing in equity at that time
remains in equity and is recognized when the forecast transaction is ultimately recognized in the income
statement. If the forecast transaction is no longer expected to occur, then the cumulative gain or loss
recognized in other comprehensive income is reclassified immediately to finance costs and income.
(W) Earnings per share
The group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to ordinary shareholders of the company by the
weighted average number of ordinary shares outstanding during the period, adjusted for own shares held.
The diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the
weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary
shares, which comprise share options granted to the management.
(X) Segment reporting
Operating segments are components of the group that engage in business activities from which it may
earn revenues and incur expenses, including revenues and expenses that relate to transactions with any
of the group’s other components. Discrete financial information is available and evaluated regularly by
the Executive Committee in deciding how to allocate resources and in assessing performance. The
Executive Committee has been identified as the chief operating decision maker.
Aggregation of segments has been done in accordance with IFRS 8 Operating segments and only when
the segments have similar economic characteristics based upon their nature of products and services,
nature of the production process, type or class of customer, methods used to distribute products or
provide services and the nature of the regulatory environment.
The segment information reported to the Executive Committee (including the measurement of segment
profit or loss, segment assets and liabilities) is prepared in conformity with the same accounting policies
as those described in the summary of significant accounting policies.
Revenues, expenses and assets are allocated to the operating segments to the extent that items of
revenue, expenses and assets can be directly attributed or reasonably allocated to the operating
segments. Transfer prices between operating segments are in a similar way to transactions with third
parties.
Tessenderlo Group 2021 annual report | 133
(Y) Changes in accounting policy and disclosures
The following amendments and annual improvements to standards are mandatory for the first time for
the financial year beginning January 1, 2021 and have been endorsed by the European Union. These did
not have a significant impact on the financial statements of the group:
- Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform – Phase
2
- Amendments to IFRS 4 Insurance Contracts – deferral of IFRS
- Amendments to IFRS 16 Leases: Covid-19-Related Rent Concessions
The following new standards, amendments and interpretation to standards have been issued, have been
endorsed by the European Union, and are effective for the first time for the financial year beginning on
or January 1, 2022 and:
- Amendments to IFRS 3 Business Combinations
- Amendments to IAS 16 Property, Plant and Equipment
- Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets
- Annual Improvements to IFRS Standards 2018–2020
The group has not applied these new standards or amended standards in preparing the 2021 consolidated
financial statements. The group is currently assessing the new rules, and at this stage, is not expecting
any of these new rules to have a significant impact on the financial statements of the group.
The following new standards, amendments and interpretation to standards have been issued, and are
effective for the first time for the financial year beginning January 1, 2023 and have not yet been endorsed
by the European Union:
- Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2:
Disclosure of Accounting policies
- Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition
of Accounting Estimates
- Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a
Single Transaction
Tessenderlo Group 2021 annual report | 134
2. Determination of fair values
A number of the group’s accounting policies and disclosures require the determination of fair value, for
both financial and non-financial assets and liabilities. Fair values have been determined for measurement
and disclosure purposes based on the methods described below. When applicable, further information
about the assumptions made in determining fair values is disclosed in the notes specific to that asset or
liability.
The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.
When measuring the fair value of an asset or a liability, the group uses market observable data as far as
possible, or valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value. Fair values are categorized into different levels in a fair value hierarchy
based on the inputs used in the valuation techniques as follows:
- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
- Level 2: inputs other than quoted prices that are observable for the asset or liability, either
directly or indirectly.
- Level 3: inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
The group recognizes transfers between levels of the fair value hierarchy at the end of the reporting period
during which the change has occurred.
For the purpose of fair value disclosures, the group has determined classes of assets and liabilities on the
basis of the nature, characteristics and risk of the asset or liability and the level of the fair value hierarchy
as explained above.
Further information about the assumptions made in measuring fair values is included in note 4 -
Acquisitions and disposals and note 26 - Financial instruments.
Property, plant and equipment
The fair value of property, recognized as a result of a business combination or used in impairment testing,
is based on the estimated amount for which a property could be exchanged on the date of valuation in an
arm’s length transaction. The result is benchmarked with market values, if available. If no significant and
active market exists, the replacement cost is used.
The fair value of items of plant and equipment is based on the market or cost approach using quoted
market prices for similar items when available and replacement costs when appropriate. The replacement
cost is the combined result of the cost of a new plant and equipment with the same capacity and the value
in use considering the business activity.
The measurement of the fair value of property, plant and equipment is based on valuation studies which
are performed internally as well as outsourced to external, independent valuation companies having
appropriate qualifications and experience.
Intangible assets
The fair value of intangible assets is based on the discounted cash flows expected to be derived from the
use and eventual sale of the assets and on valuation studies performed internally.
Tessenderlo Group 2021 annual report | 135
Inventories
The fair value of inventories is based on the current market price for raw materials and the estimated
selling price in the ordinary course of business less the estimated costs necessary to make the sale for
finished products including a margin.
Derivative financial instruments
The fair value of forward contracts is calculated as the discounted value of the difference between the
contract rate and the forward rate at closing date.
The fair value of these instruments generally reflects the estimated amounts that the group would receive
on settlement of favorable contracts or be required to pay to terminate unfavorable contracts at the
reporting date, and thereby takes into account the current unrealized gains or losses on open contracts.
Other financial instruments
The fair value of an electricity supply agreement has been estimated using a discounted cash flow method,
making certain assumptions about the model inputs, including risk-adjusted discount rate, and
commodities market price. The fair value is categorized as level 3 as it is partly based on unobservable
market data.
3. Segment reporting
The group has 4 operating segments based on the principal business activities, economic environments
and value chains in which they operate, as defined under IFRS 8 Operating Segments, and relate to
agriculture, animal by-product valorization, products, systems and solutions for handling, processing and
treatment of water including flocculation and depressants, as well as energy. The information provided
below is consistent with the information that is available and evaluated regularly by the Chief Operating
Decision Maker (the Executive Committee).
The following summary describes the operations in each of the group’s reportable segments:
- “Agro” - includes production, trading and distribution of crop nutrients and crop protection
products and includes the following businesses: Crop Vitality, Tessenderlo Kerley International
and NovaSource. These activities individually meet the definition of a business segment and were
aggregated under the operating segment “Agro” in line with the stipulations under IFRS 8.12. This
aggregation was possible because these activities sell the same or similar products, their
production process is similar and these activities have the same or the same type of customers,
while the distribution method of the products is also similar. In addition, there is close cooperation
between these activities and management makes decisions that simultaneously have an impact
on the various activities.
- “Bio-valorization” - includes collecting and processing of animal by-products; production and
distribution of gelatins and collagen peptides and rendering, production and sales of proteins and
fats and includes the following businesses: PB Leiner and Akiolis. These activities individually meet
the definition of a business segment and were aggregated under the segment “Bio-valorization”
in line with the stipulations under IFRS 8.12. This aggregation was possible because these activities
sell the same or similar products, their production process is similar and these activities have the
same or the same type of customers, while the distribution method of the products is also similar.
Tessenderlo Group 2021 annual report | 136
In addition, there is close cooperation between these activities and management makes decisions
that simultaneously have an impact on the various activities.
- “Industrial Solutions” - includes all possible water related applications (water transport, water
treatment and leaching). This segment includes the following distinguishable commercial names:
DYKA Group (with DYKA, JDP and BT Nyloplast), Moleko (former Mining and Industrial) and
Kuhlmann Europe (former Performance Chemicals). These components are not considered to be
separate operating segments.
- “T-Power” - includes a gas-fired 425 MW power plant in Tessenderlo (Belgium). A tolling
agreement was concluded with RWE group for a period of 15 years (until 2026) for the full capacity
of the plant, with an optional 5-year extension thereafter.
Industrial Solutions also included the MPR/ECS activities until their sale in 2021 (note 4 - Acquisitions and
disposals). Also within the operating segment Industrial Solutions, S8 Engineering ceased to exist in 2020
and the engineering and construction activities were integrated into Tessenderlo Kerley, Inc..
The costs included within Adjusted EBIT, related to the corporate activities, are allocated to the different
operating segments they support.
Transfer prices between operating segments are similar to transactions with third parties.
The measure of segment profit/loss is Adjusted EBIT, which is consistent with information that is
monitored by the chief operating decision maker.
The group is a diversified specialty group that is worldwide active in many areas of agriculture, food, water
management, efficient re(use) of natural resources and other industrial markets. The products of the
group are used in various applications, industrial and consumption markets. Although a leadership
position is occupied by the group in a number of diverse markets, the diversification of the group’s
revenue makes the group not reliant on major customers.
The majority of the group’s revenue consists of the sale of goods. Products are generally sold directly or
through distributors to the customers. Revenue is therefore recognized when the goods are delivered to
the customers, where the point of recognition is dependent on the contract sales terms, known as the
International Commercial terms (Incoterms). The group also recognizes revenue from the sale of services.
These mainly relate to the collection of organic materials within Akiolis (operating segment Bio-
valorization), and, until the disposal of these activities in 2021, water treatment services at industrial
mining, refinery and oil and gas exploration water treatment locations within MPR and ECS (operating
segment Industrial Solutions). In this case, the revenue is recognized when the customers obtain control
of the services, predominantly at a point in time. For revenue out of projects, the amount of revenue is
measured by reference to the progress made towards complete satisfaction of the performance
obligation. These projects generally have a lifetime of less than one year.
The major line items of the income statement and statement of financial position are shown per operating
segment in the table on the next page.
Tessenderlo Group 2021 annual report | 137
(Million EUR)
note
Agro
Bio-valorization
Industrial
Solutions
T-Power
Non-allocated
Tessenderlo
Group
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
Revenue (internal and external)
750.3
583.8
643.2
575.7
618.4
509.5
71.2
69.5
-
-
2,083.1
1,738.5
Less: Revenue (internal)
1.0
0.8
-
-
0.6
0.4
-
-
-
-
1.6
1.2
Revenue
749.3
582.9
643.2
575.7
617.8
509.1
71.2
69.5
-
-
2,081.5
1,737.3
Of which:
- At a point in time
749.3
582.9
643.2
575.7
617.8
508.1
71.2
69.5
-
-
2,081.5
1,736.2
- Over time
-
-
-
-
-
1.0
-
-
-
-
0.0
1.0
Adjusted EBIT
116.4
95.8
43.8
47.1
49.1
24.5
14.5
16.6
-
-
223.8
184.0
Adjusted EBITDA
147.4
125.6
78.5
81.9
76.1
53.0
52.2
54.1
-
-
354.2
314.6
Return on revenue (Adjusted
EBITDA/revenue)
19.7%
21.5%
12.2%
14.2%
12.3%
10.4%
73.3%
77.8%
-
-
17.0%
18.1%
Non-current segment assets (property,
plant and equipment, goodwill and
intangible assets)
249.0
240.4
261.1
242.7
183.6
177.6
319.5
353.7
14.9
16.7
1,028.0
1,031.2
Other segment assets
341.7
248.1
237.4
206.2
177.6
144.5
4.5
2.6
22.4
21.4
783.6
622.8
Derivative financial instruments
26
-
-
-
-
-
-
-
-
0.6
0.0
0.6
0.0
Investments accounted for using the
equity method
14
17.1
14.2
2.1
5.7
-
-
-
-
-
-
19.2
20.0
Other investments and guarantees
14
-
-
-
-
-
-
-
-
11.8
10.3
11.8
10.3
Deferred tax assets
15
-
-
-
-
-
-
-
-
33.5
32.2
33.5
32.2
Short term investments
18/22
-
-
-
-
-
-
-
-
10.0
20.0
10.0
20.0
Cash and cash equivalents
18/22
-
-
-
-
-
-
-
-
320.3
230.1
320.3
230.1
Total assets
607.9
502.7
500.6
454.7
361.2
322.1
324.0
356.3
413.4
330.7
2,207.0
1,966.4
Segment liabilities
136.0
78.2
165.5
156.3
95.6
87.2
11.6
8.9
167.2
177.0
575.8
507.6
Derivative financial instruments
26
-
-
-
-
-
-
-
-
29.3
37.1
29.3
37.1
Loans and borrowings
22
-
-
-
-
-
-
-
-
405.0
451.3
405.0
451.3
Bank overdrafts
18/22
-
-
-
-
-
-
-
-
0.1
0.0
0.1
0.0
Deferred tax liabilities
15
-
-
-
-
-
-
-
-
65.4
66.3
65.4
66.3
Total equity
-
-
-
-
-
-
-
-
1,131.4
904.1
1,131.4
904.1
Total Equity and Liabilities
136.0
78.2
165.5
156.3
95.6
87.2
11.6
8.9
1,798.3
1,635.8
2,207.0
1,966.4
Capital expenditures: property, plant and
equipment and intangible assets
11/13
25.9
29.9
43.0
46.4
23.1
15.7
3.3
6.7
0.7
1.4
95.9
100.2
Depreciation, amortization and
impairment losses on tangible assets and
intangible assets
8
-31.0
-29.8
-34.7
-34.8
-28.9
-31.6
-37.6
-37.4
-
-
-132.3
-133.6
Reversal/(additional) inventory write-offs
17
0.9
-1.8
-1.2
-8.2
-2.3
-0.7
-
-
-
-
-2.5
-10.7
Tessenderlo Group 2021 annual report | 138
The increase of the other segment assets and segment liabilities in Agro and Industrial Solutions is mainly
linked to the increase of trade receivables and payables, which are impacted by a higher activity, timing
and price inflation.
Non-allocated segment liabilities mainly include environmental provisions recognized for the plants in
Belgium (Ham, Tessenderlo, Vilvoorde) and France (Loos).
In presenting information on the basis of geographical segments, segment revenue is based on the
geographical location of customers. Non-current segment assets (property, plant and equipment,
goodwill and intangible assets) are based on the geographical location of the assets.
Revenue by market
Non-current segment assets
(Million EUR)
2021
2020
2021
2020
Belgium
188.4
169.4
467.0
499.8
The Netherlands
226.6
179.9
42.8
34.3
France
357.6
301.6
238.1
239.6
Germany
53.3
48.6
22.7
20.4
Spain
92.8
68.5
-
-
United Kingdom
108.1
76.3
19.4
18.0
Poland
31.6
24.5
7.1
5.3
Other European countries
140.6
121.2
5.8
5.3
United States
583.2
504.4
179.1
168.3
Mexico
44.5
33.4
2.8
2.0
China
17.5
13.8
6.5
7.2
Rest of the world
237.3
195.6
36.7
31.1
Tessenderlo Group
2,081.5
1,737.3
1,028.0
1,031.2
The decrease of the non-current segment assets in Belgium is mainly due to the amortization and
depreciation of the fair value adjustments within T-Power nv, fully acquired in 2018. The purchase price
allocation resulted in the recognition of a customer list for an amount of 163.7 million EUR and
represented the fair value of a tolling agreement which was concluded with RWE group for a period of 15
years (until June 2026) for the full capacity of the plant. This customer list is being amortized over the
remaining duration of the tolling agreement.
The increase of the non-current segment assets in the United States is impacted by the strengthening of
the USD (The USD/EUR 2020 closing rate was 1.2271 compared to 1.1326 as per year-end 2021).
Tessenderlo Group 2021 annual report | 139
4. Acquisition and disposals
There were no acquisitions in 2021.
In the first semester 2020, the group completed the acquisition of a production plant in La Chapelle-Saint-
Ursin (France). On May 1, 2020, the group obtained 100% control over these activities through a new
created company DYKA Tube SAS and integrated the plant within the DYKA Group activity (operating
segment Industrial Solutions). As of the acquisition date, the group recognized the fair value of the
identifiable assets acquired and the liabilities assumed. Fair value adjustments, on which deferred tax
assets and liabilities were recognized, mainly related to property, plant and equipment and inventories.
The group did not obtain, within one year to the acquisition, new information about facts and
circumstances that existed at the date of acquisition, which would have resulted in a revision of the
acquisition accounting.
In August 2021, the group reached an agreement to divest the MPR and ECS activities (operating segment
Industrial Solutions). The main assets of this disposal group included property, plant and equipment (0.6
million EUR) and goodwill (2.2 million EUR). The yearly contribution of MPR/ECS to the group’s results was
not significant. The sale was completed in the second half of 2021 and the result was included within EBIT
adjusting items (note 6 - EBIT adjusting items).
5. Other operating income and expenses
Other operating income and expenses are shown in the table below:
(Million EUR)
note
2021
2020
Additions to provisions
-1.4
-0.9
Research and development cost
-10.4
-11.9
Taxes other than income taxes
-4.0
-5.1
Expenses related to defined benefit plans
23
-2.0
-1.5
Gains on disposal of property, plant and equipment and intangible assets
0.7
0.2
Reversal/(recognition) of impairment losses on trade receivables
-0.2
-0.6
Other
0.7
-1.2
Total
-16.5
-20.9
Costs arising from the research phase of an internal project are expensed as incurred. The major part of
research and development costs relates to salaries paid for an amount of -4.7 million EUR (2020: -6.3
million EUR) and depreciation charges for an amount of -0.5 million EUR (2020: -0.5 million EUR). In 2021
and 2020, no significant development costs were capitalized.
The other operating income and expenses are mainly explained by the cost of consumed emission
allowances and various individually insignificant items within several subsidiaries of the group.
Tessenderlo Group 2021 annual report | 140
6. Ebit adjusting items
The EBIT adjusting items for 2021 show a net income of +1.9 million EUR (2020: -8.1 million EUR).
(Million EUR)
note
2021
2020
Gains and losses on disposals
2.8
4.8
Restructuring
-1.7
-0.5
Impairment losses
8/11
-1.9
-3.0
Provisions and claims
4.0
-5.0
Other income and expenses
-1.4
-4.3
Total
1.9
-8.1
The gains and losses on disposals (+2.8 million EUR) mainly relate to the divestments of the MPR and ECS
activities in August 2021 (operating segment Industrial Solutions) and the sale of several land and
buildings, mainly within Bio-valorization.
Restructuring expenses (-1.7 million EUR) include several, individual insignificant, restructuring expenses
within the operating segment Industrial Solutions (DYKA Group and Kuhlmann Europe). Kuhlmann Europe
terminated its operating agreement in November 2021 for the production of sulfur derivatives in
Tessenderlo, Belgium (Kuhlmann Belgium). The deteriorating market conditions, the continuing limited
availability of raw materials, and increased electricity prices made the sulfur derivatives activity
economically unfeasible. The group recognized, following this announcement, restructuring expenses in
accordance with the termination clauses of the operating agreement.
Impairment losses (-1.9 million EUR) relate to assets, which will not be used anymore following changes
in market conditions (within the operating segment Industrial Solutions).
Provisions and claims (+4.0 million EUR) mainly relate to the reversal of an asset retirement obligation
following the sale of the ECS activity, as well as to the impact of the increase of the discount rate applied
to the environmental provisions to cover the cost, over the period 2022-2054, for the remediation of
historical soil and ground contamination of the factory sites in Belgium (Ham, Tessenderlo and Vilvoorde)
and France (Loos). The discount rate as per December 31, 2021 varied between 0% and 1% (year end
2020: between 0% and 1%).
Other income and expenses (-1.4 million EUR) include the impact of an electricity purchase agreement,
for which the own-use exemption under IAS 39 is not applicable anymore and several other individually
insignificant items.
Tessenderlo Group 2021 annual report | 141
7. Payroll and related benefits
The payroll and related benefits costs, excluding restructuring costs, are shown in the table below:
(Million EUR)
note
2021
2020
Wages and salaries
-254.5
-241.0
Employer’s social security contributions
-53.9
-52.6
Other personnel costs
-21.7
-20.1
Contributions to defined contribution plans
-9.3
-8.9
Expenses related to defined benefit plans
23
-7.3
-6.2
Total
-346.6
-328.9
The number of FTE’s at year-end 2021 amounts to 4,838 (2020: 4,793).
8. Additional information on operating expenses by nature
Depreciation and amortization on property, plant and equipment (PPE) and intangible assets are included
in the following line items in the income statement:
(Million EUR)
note
Depreciation on PPE
Amortization on
intangible assets
Total
2021
2020
2021
2020
2021
2020
Cost of sales
-98.1
-97.0
-21.9
-22.1
-119.9
-119.1
Administrative expenses
-5.5
-5.2
-0.6
-1.2
-6.1
-6.4
Sales and marketing expenses
-0.7
-0.8
-3.3
-3.8
-4.0
-4.6
Other operating income and
expenses
-0.5
-0.5
-
-
-0.5
-0.5
Total
11/13
-104.7
-103.4
-25.7
-27.1
-130.4
-130.6
Impairment losses on property, plant and equipment, intangible assets and goodwill are included in the
following line items in the income statement:
Total depreciation, amortization and impairment losses in 2021 amount to -132.3 million EUR compared
to -133.6 million EUR in 2020 (note 11 - Property, plant and equipment and note 13 - Intangible assets).
(Million EUR)
note
Property, plant and
equipment
Intangible assets
Goodwill
Total
2021
2020
2021
2020
2021
2020
2021
2020
Impairment losses
6/11
-1.9
-3.0
-
-
-
-
-1.9
-3.0
Total
6/11
-1.9
-3.0
0.0
0.0
0.0
0.0
-1.9
-3.0
Tessenderlo Group 2021 annual report | 142
9. Finance costs and income
Net finance costs and income amount to +4.5 million EUR in 2021, compared to -40.5 million EUR in 2020
and are detailed below:
(Million EUR)
2021
2020
Finance
costs
Finance
income
Total
Finance
costs
Finance
income
Total
Interest expense on loans and borrowings measured at
amortized cost
-9.4
-
-9.4
-9.3
-
-9.3
Dividend income from other investments
-
-
-
-
0.1
0.1
Interest income from cash and cash equivalents
-
0.4
0.4
-
0.3
0.3
Expense for the unwinding of discounted provisions
-0.2
-
-0.2
-0.4
-
-0.4
Net interest (expense)/income on pension asset/(liability)
-0.2
0.1
-0.1
-0.4
0.0
-0.3
Net foreign exchange gains/(losses) (including revaluation to
fair value and realization of derivative financial instruments)
-4.2
18.9
14.7
-31.2
1.4
-29.8
Net other finance (costs)/income
-1.1
0.2
-0.8
-1.0
0.0
-1.0
Total
-15.1
19.6
4.5
-42.2
1.8
-40.5
The interest expenses on loans and borrowings amount to -9.4 million EUR (2020: -9.3 million EUR) and
mainly consist of:
The interest charges on the bonds (-6.7 million EUR), issued in 2015, with a maturity of 7 years (the “2022
bonds”) and 10 years (the “2025 bonds”) with a fixed rate of 2.875% and 3.375% respectively.
The interest charge on the term loan facility of T-Power nv, which equals the EURIBOR plus a spread. For
80% of the outstanding loan, the EURIBOR was fixed at 5.6% per annum through a series of forward
agreements. The fair value of these forward agreements amounted to -38.1 million EUR at acquisition
date (recognized as derivative financial instruments in the statement of financial position, see also note
26 - Financial instruments). The 2021 interest paid for this long term facility loan resulted in a cash out of
-7.0 million EUR (2020: -8.2 million EUR), of which -1.4 million EUR was recognized as interest expenses,
while the remaining amount of -5.7 million EUR relates to the half yearly payments for forward rate
agreements reaching their maturity date.
The interest expenses on lease liabilities (in accordance with IFRS 16 Leases) for -1.1 million EUR (2020: -
1.1 million EUR).
Total cash-out related to interest payments therefore amounts to -15.1 million EUR (interest expenses for
-9.4 million EUR and payments for forward rate agreements reaching their maturity date for -5.7 million
EUR).
The net foreign exchange gain (+14.7 million EUR) can mainly be explained by unrealized foreign exchange
gains on intercompany loans and cash and cash equivalents (mainly in USD), which are not hedged. The
strengthening of the USD against the EUR (+8%) impacted this result. We refer to note 26 - Financial
instruments for more information of the group’s exposure to foreign currency risk.
Tessenderlo Group 2021 annual report | 143
The table below provides the reconciliation between the interest expense recognized in the consolidated
income statement and the interest paid in the consolidated statement of cash flows:
(Million EUR)
2021
2020
Interest expenses on loans and borrowings measured at amortized cost
-9.4
-9.3
Reconciliation with consolidated statement of cash flows
Interest expense on other loans and borrowings
-9.4
-9.3
Changes in accrued interest charges
0.0
-0.0
Payment for forward rate agreements at maturity date (recognized at T-Power nv acquisition
date)
-5.7
-6.9
Interest paid
-15.1
-16.3
Tessenderlo Group 2021 annual report | 144
10.Income tax expense
The reconciliation between the theoretical tax rate and the effective tax rate for the total income tax
expense is as follows:
(Million EUR)
2021
2020
Recognized in the income statement
Current tax expense
-47.2
-44.6
Adjustment current tax expense previous periods
-0.8
-0.2
Deferred tax - due to changes in temporary differences
2.9
9.8
Deferred tax - due to changes in tax rate
0.1
-0.5
Deferred taxes - recognition (derecognition) of tax losses
2.4
0.5
Total income tax expense in the income statement
-42.6
-34.9
Profit (+) / loss (-) before tax
230.9
133.6
Less share of result of equity accounted investees, net of income tax
0.7
-1.9
Profit (+) / loss (-) before tax and before result from equity accounted investees
230.2
135.4
Effective tax rate
18.5%
25.8%
Reconciliation of effective tax rate
Profit (+) / loss (-) before tax and before result from equity accounted investees
230.2
135.4
Theoretical tax rate
26.0%
28.3%
Expected income tax at the theoretical tax rate
-59.8
-38.3
Difference between theoretical and effective tax expenses
17.2
3.3
Adjustment on deferred taxes
2.5
-0.0
Change in tax rates
0.1
-0.5
Recognition (derecognition) of tax losses
2.4
0.5
Adjustment on tax expenses
14.7
3.4
Expenses not deductible for tax purposes
-1.6
-1.7
Non-taxable income
1.3
1.5
Tax incentives
2.1
2.0
Use of tax losses / tax credits
10.9
6.6
Tax losses / temporary differences for which no deferred tax asset has been recorded
-0.4
-13.7
Adjustment current tax expense previous periods
-0.8
-0.2
Other
3.2
8.7
The theoretical aggregated weighted tax rate amounted to 26.0% in 2021 compared to 28.3% in 2020.
This variance can be explained by the change in the relative weight of the result of each subsidiary, with
different individual theoretical tax rates, in the total group result.
There have been no corporate income tax reforms impacting significantly the 2021 tax expense. The
majority of the current tax expense is related to the activities in the United States and the activities of T-
Power nv in Belgium. The total current tax expense amounts to -47.2 million EUR. As per December 2021,
the group has a current tax receivable outstanding of 5.5 million EUR (2020: 7.5 million EUR), mainly due
to advance payments made by Belgian subsidiaries and a current tax payable of -1.6 million EUR (2020: -
2.4 million EUR). The income tax paid in 2021 amounts to -46.6 million EUR (2020: -40.3 million EUR).
Tessenderlo Group 2021 annual report | 145
The recognition of deferred tax assets on tax losses in 2021 (2.4 million EUR) is the result of a year-end
2021 review of the future taxable profits.
The expenses not deductible for tax purposes include permanent differences such as expenses which are
non-deductible under local tax laws (e.g. car expenses and meal expenses). Non-taxable income mainly
includes credits for research.
Tax incentives in 2021 and 2020 include deductions claimed for capital expenditures in France, as well the
foreign-derived intangible income (FDII) deduction in the United States.
The 2021 use of tax losses/tax credits mainly relates to the use of Belgian and French fiscal losses.
The tax losses and temporary differences for which no deferred tax asset was recognized in 2020 mainly
related to tax losses within Belgium, the United Kingdom and China.
The 2020 items included in “Other” mainly related to statutory results on intragroup transactions, which
were eliminated for consolidation purposes. These were less significant in 2021.
11.Property, plant and equipment
(Million EUR)
Land and
buildings
Plant, machinery
and equipment
Furniture and
vehicles
Assets under
construction
Total
Cost
At January 1, 2021
511.3
1,463.5
185.6
60.2
2,220.6
- dismantlement provision
0.3
0.2
-
-
0.5
- capital expenditure
2.7
16.2
1.3
75.5
95.7
- IFRS 16 new leases and
lease modifications
8.4
2.2
9.4
-
20.0
- sales and disposals
-10.3
-24.9
-25.8
-
-60.9
- transfers
11.1
36.0
20.9
-67.1
0.8
- translation differences
13.3
20.2
3.6
1.4
38.6
At December 31, 2021
536.8
1,513.4
195.1
69.9
2,315.2
Depreciation and impairment losses
At January 1, 2021
-293.8
-940.7
-123.8
0.0
-1,358.4
- depreciation (note 8)
-21.7
-61.6
-21.4
-
-104.7
- impairment losses (note 6/8)
-0.5
-1.4
-
-
-1.9
- sales and disposals
9.8
23.6
25.7
-
59.0
- transfers
-0.3
0.5
-0.3
-
-0.2
- translation differences
-6.7
-13.4
-2.5
-
-22.6
At December 31, 2021
-313.2
-993.0
-122.5
0.0
-1,428.7
Carrying amounts
At January 1, 2021
217.5
522.8
61.8
60.2
862.2
At December 31, 2021
223.6
520.4
72.6
69.9
886.6
Tessenderlo Group 2021 annual report | 146
(Million EUR)
Land and
buildings
Plant, machinery
and equipment
Furniture and
vehicles
Assets under
construction
Total
Cost
At January 1, 2020
517.5
1,446.6
183.0
54.1
2,201.1
- change in consolidation
scope (disposal)
-
-
-0.1
-
-0.1
- change in consolidation
scope (acquisitions)
3.7
0.7
0.2
-
4.7
- dismantlement provision
0.4
0.5
-
-
0.8
- capital expenditure
1.5
19.3
1.9
76.7
99.5
- IFRS 16 new leases and
lease modifications
2.9
0.6
9.8
-
13.3
- sales and disposals
-9.4
-14.7
-22.9
-
-47.0
- transfers
11.4
39.1
18.2
-69.3
-0.6
- translation differences
-16.7
-28.5
-4.5
-1.4
-51.0
At December 31, 2020
511.3
1,463.5
185.6
60.2
2,220.6
Depreciation and impairment losses
At January 1, 2020
-286.9
-912.1
-129.2
0.0
-1,328.2
- change in consolidation
scope (disposal)
-
-
0.1
-
0.1
- depreciation (note 8)
-23.2
-59.8
-20.4
-
-103.4
- impairment losses (note 6/8)
-
-3.0
-
-
-3.0
- sales and disposals
9.0
14.3
22.8
-
46.1
- transfers
0.0
-0.0
0.0
-
0.0
- translation differences
7.2
19.9
2.9
-
30.1
At December 31, 2020
-293.8
-940.7
-123.8
0.0
-1,358.4
Carrying amounts
At January 1, 2020
230.6
534.4
53.8
54.1
872.9
At December 31, 2020
217.5
522.8
61.8
60.2
862.2
The capital expenditure on property, plant and equipment amounts to 95.7 million EUR (2020: 99.5 million
EUR) and is presented per operating segment in note 3 - Segment reporting.
The majority of the capital expenditure relates to:
- investments in the valuation of gelatin side streams and in the optimization of the valorization of
animal by-products (operating segment Bio-valorization);
- investments in additional storage capacity within the operating segment Agro. The increased
storage capacity guarantees a better service to farmers, as well as enables more flexibility and
improved delivery times;
- investments in production efficiency improvements within DYKA Group (operating segment
Industrial Solutions);
- investments in the expansion of the production capacity of water treatment coagulants at the site
in Loos (France) within Kuhlmann Europe (operating segment Industrial Solutions) to meet the
increasing demand for coagulants for wastewater treatment and drinking water production in
Western Europe;
- a major maintenance outage and upgrade of the T-Power 425 MW gas-fired combined cycle power
plant (CCGT);
Tessenderlo Group 2021 annual report | 147
- investments in the construction of a new Thio-Sul manufacturing plant in Geleen (the Netherlands).
The factory is scheduled to be operational from the second quarter of 2023;
- the replacement of equipment and vehicles, which were previously leased, through purchase.
The 2021 sales and disposals mainly relate to the expiration of lease contracts, for which a right-of-use
asset was recognized and fully depreciated in accordance with IFRS 16 Leases. In the second half of 2021,
the group also completed the sale of the main assets of the activities MPR and ECS (note 4 -Acquisitions
and disposals). The result on the sale of these assets was recognized in EBIT adjusting items (note 6 - EBIT
Adjusting items).
For the line items of the income statement in which depreciation, impairment losses and reversal of
impairment losses have been recorded, refer to note 8 - Additional information on operating expenses by
nature.
No amounts of borrowing costs were capitalized in 2021 and 2020.
The property, plant and equipment of T-Power nv (Tessenderlo, Belgium), as well as the headquarters of
Tessenderlo Kerley, Inc. in Phoenix (Arizona, United States), are pledged as securities for liabilities, with a
carrying amount as per year-end 2021 of 221.5 million EUR and 12.6 million EUR respectively.
The carrying amount and depreciation charges related to the right-of-use assets, per asset category, is
shown in table below:
(Million EUR)
Carrying amount right-of-use
assets
Depreciation charges on right-
of-use assets
2021
2020
2021
2020
Land and buildings
21.8
18.2
5.1
5.2
Plant, machinery and equipment
3.3
2.7
1.7
1.9
Furniture and vehicles
25.8
29.2
13.4
15.0
Total
50.9
50.1
20.3
22.2
The carrying amount of the right-of-use assets per operating segment is shown in table below:
(Million EUR)
2021
2020
Agro
9.4
8.3
Bio-valorization
11.1
12.3
Industrial Solutions
25.8
24.6
T-Power
0.0
0.0
Non-allocated
4.6
4.9
Tessenderlo Group
50.9
50.1
The leases consist mainly of land and buildings (mostly sales branches within Industrial Solutions, the
Akiolis headquarters in Le Mans (France) within Bio-valorization and the Brussels (Belgium) headquarters
office within Non-allocated), a large number of trucks and railcars (mainly within Agro and Bio-
valorization), as well as company cars.
Tessenderlo Group 2021 annual report | 148
The group determines the lease term as the non-cancellable term of the lease, together with any periods
covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered
by an option to terminate the lease, if it is reasonably certain not to be exercised. The group has applied
judgement in evaluating whether it is reasonably certain to exercise the option to renew. That is, the
group considered all relevant factors that create an economic incentive for it to exercise the renewal. The
main leases with an estimated remaining lease term of more than 5 years mainly relate to the sales
branches within Industrial Solutions (a weighted average lease term of 11 years), the Akiolis headquarters
office (remaining lease term of 9 years), the Brussels headquarters office (remaining lease term of 7 years)
and the lease of a barge within Industrial Solutions (remaining lease term of 8 years). See note 26 -
Financial instruments for the contractual maturities of the lease liabilities, including interest payments.
Gross lease payments in 2021 amount to -21.7 million EUR (2020: -23.7 million EUR), which include
interest charges for -1.1 million EUR (2020: -1.1 million EUR) (note 9 - Finance costs and income).
The depreciation charges recognized, on a straight-line basis over the shorter of the asset’s useful life and
its lease term, amount to -20.3 million EUR, in comparison to -22.2 million EUR in 2020.
The group chose not to recognize right-of-use assets and lease liabilities for low value items, mainly IT
equipment and small items of office furniture, and short-term liabilities. The expense of these low value
items and short-term leases is not significant.
12.Goodwill
Goodwill accounts for approximately 1.5% of the group’s total assets as per December 31, 2021, or 32.3
million EUR (2020: 1.7% or 33.4 million EUR).
The carrying amount of goodwill per operating segment and per cash-generating unit, is shown in the
table below:
(Million EUR)
2021
2020
Agro
0.7
0.6
Bio-valorization
25.7
24.9
Group Akiolis
15.0
15.0
PB Leiner America
10.7
9.9
Industrial Solutions
5.4
7.3
John Davidson Pipes
2.3
2.2
BT Nyloplast BV
3.0
3.0
MPR
-
2.1
T-Power
0.6
0.6
Total
32.3
33.4
Following the sale of the main assets of the MPR activity, the group derecognized the goodwill related to
MPR. The gain on the result of the sale of the MPR assets, including the derecognition of the goodwill,
was included within EBIT adjusting items (note 6 - EBIT adjusting items). The yearly contribution of MPR
to the group’s result was also not significant.
Tessenderlo Group 2021 annual report | 149
All movements related to the carrying amount of goodwill are shown in the table below:
(Million EUR)
note
2021
2020
At January 1
33.4
34.6
- sales and disposals
4
-2.2
-
- translation differences
1.1
-1.3
At December 31
32.3
33.4
The group cannot foresee whether an event that triggers impairment will occur, when it will occur or how
it will affect the asset values reported. The group believes that all of its estimates are reasonable. They
are consistent with the internal reporting and reflect management’s best estimates.
The impairment testing on goodwill relies on a number of critical judgments, estimates and assumptions.
Goodwill is tested for impairment on the level of its cash-generating unit and is based on value-in-use
calculations. There have been no significant changes in the assets and liabilities of these cash generating
units compared to prior year. In accordance with IAS 36 Impairment of assets, the group relied on the
recoverable amount calculation of the 2020 impairment testings, which resulted in an amount that
exceeded the carrying amount of all cash generating units by a substantial margin. The actual performance
of the cash generating units in 2021 was in line or above their financial budget. Based on an analysis of
events that have occurred and circumstances that have changed since the most recent recoverable
amount calculation, the likelihood that a current recoverable amount determination would be less than
the current carrying amount of the unit is considered to be remote.
The key judgments, estimates and assumptions used in the 2020 calculations were as follows:
• The cash flow projection of the first year was based on the 2021 financial budget approved by the
Board of Directors. The forecasted cash flows were based on the following expectations, taking
into account internal and external sources.
- Estimated revenue was derived from estimated sales volumes and estimated sales prices.
Sales volumes were based on past performance and management’s expectation of
market development. New product lines or product developments were only included
when it was technically feasible to produce with the current assets. Sales prices were
based on current market trends, also taking into account inflation and pricing power in
the market.
- Gross profit margins were based on current sales margin levels, future product mix and
estimated evolution of the main raw material prices.
- Indirect costs, which do not vary significantly with sales volumes or prices, were based on
the current cost structure, including long term inflation forecasts and excluding
unrealized future restructuring or cost saving measures.
- Capital expenditures only included the cash outflows required to keep the assets in their
current condition and did not include future capital expenditures significantly improving
or enhancing the assets in excess of their originally assessed standard performance.
• In order to calculate the terminal value, the data of the fifth year were extrapolated by using
simplified assumptions such as constant volumes, combined with constant costs. The growth rate
was assumed to be 1%.
• Projections were made in the functional currency of the cash-generating unit and were
discounted at the after-tax Weighted Average Cost of Capital (WACC) at the level of the cash-
generating unit. The latter ranged between 5.0% and 6.9%. Since after-tax cash flows were
incorporated into the calculation of the “value in use” of the cash-generating units, a post-tax
discount rate was used in order to remain consistent.
Tessenderlo Group 2021 annual report | 150
An increase of the WACC’s by 1% and a simultaneous reduction of total projected future cash flow by 10%
would not have resulted in the carrying amounts of these significant cash-generating units exceeding their
recoverable amount.
Although the group believes that its judgments, assumptions and estimates are appropriate, actual results
may differ from these estimates under different assumptions or conditions.
13.Intangible assets
2021
Useful life
Finite
(Million EUR)
Concessions,
patents,
licenses
Software
Customer
lists
Other
intangible
assets
Total
Cost
At January 1, 2021
68.1
17.9
200.4
27.0
313.3
- capital expenditure
0.0
0.3
-
-
0.3
- net change in emission allowances
-
-
-
-1.1
-1.1
- sales and disposals
-0.6
-
-
-
-0.6
- transfers
0.1
-0.9
-
-
-0.9
- translation differences
4.0
0.2
1.3
1.7
7.1
At December 31, 2021
71.6
17.4
201.6
27.6
318.2
Amortization and impairment losses
At January 1, 2021
-59.0
-15.7
-83.5
-19.5
-177.7
- amortization (note 8)
-3.2
-0.7
-21.4
-0.4
-25.7
- sales and disposals
0.6
-
-
-
0.6
- transfers
-
0.2
-
-
0.2
- translation differences
-3.4
-0.1
-1.2
-1.6
-6.4
At December 31, 2021
-65.0
-16.4
-106.1
-21.5
-209.0
Carrying amounts
At January 1, 2021
9.0
2.1
116.9
7.5
135.6
At December 31, 2021
6.6
1.0
95.6
6.1
109.2
Tessenderlo Group 2021 annual report | 151
2020
Useful life
Finite
(Million EUR)
Concessions,
patents,
licenses
Software
Customer
lists
Other
intangible
assets
Total
Cost
At January 1, 2020
72.3
17.1
201.8
28.5
319.7
- change in consolidation scope (disposal)
-
-0.0
-
-
-0.0
- capital expenditure
-
0.7
-
0.0
0.7
- net change in emission allowances
-
-
-
0.3
0.3
- sales and disposals
-0.2
-
-
-0.0
-0.2
- transfers
0.3
0.3
-
0.0
0.7
- translation differences
-4.4
-0.3
-1.4
-1.8
-7.9
At December 31, 2020
68.1
17.9
200.4
27.0
313.3
Amortization and impairment losses
At January 1, 2020
-59.3
-14.6
-63.4
-20.3
-157.7
- change in consolidation scope (disposal)
-
0.0
-
-
0.0
- amortization (note 8)
-3.5
-1.3
-21.4
-0.9
-27.1
- sales and disposals
0.2
-
-
0.0
0.2
- transfers
-
0.0
-
-0.0
0.0
- translation differences
3.6
0.2
1.3
1.7
6.9
At December 31, 2020
-59.0
-15.7
-83.5
-19.5
-177.7
Carrying amounts
At January 1, 2020
13.0
2.5
138.4
8.2
162.1
At December 31, 2020
9.0
2.1
116.9
7.5
135.6
The capital expenditure on intangible assets is presented per operating segment in note 3 - Segment
reporting.
The decrease of the customer lists is mainly explained by the yearly amortization charge (-21.1 million
EUR) of the customer list of T-Power nv. This customer list was recognized in 2018, after the acquisition
of T-Power nv, for an amount of 163.7 million EUR and represents the fair value of a tolling agreement
which was concluded with RWE group for a period of 15 years (until June 2026) for the full capacity of the
plant. This customer list is amortized over the remaining duration of the tolling agreement and has been
pledged as security for liabilities.
No borrowing costs were capitalized during 2021 and 2020.
The other intangible assets with finite useful lives mainly consist of emission allowances purchased for
own use, know-how, product labels, trademarks and land-use rights. The product labels and the know-
how are amortized on a straight-line basis over 10 to 20 years.
The net change in emission allowances for -1.1 million EUR (2020: +0.3 million EUR) mainly relates to
emission allowances acquired and used to cover operational emissions for products exposed to carbon
leakage. As per December 31, 2021, the carrying amount of emission allowances included in intangible
assets amounts to 2.1 million EUR (2020: 3.2 million EUR).
Tessenderlo Group 2021 annual report | 152
See note 8 - Additional information on operating expenses by nature for the line items of the income
statement in which amortization, impairment losses and reversal of impairment losses have been
recorded.
14.Investments accounted for using the equity method
Investments accounted for using the equity method consist of joint-ventures.
The joint-ventures of the group are:
Ownership
Country
2021
2020
Jupiter Sulphur LLC
US
50%
50%
PB Shengda (Zhejiang) Biotechnology Co., Ltd
China
50%
50%
Établissements Michel SAS
France
50%
50%
Jupiter Sulphur LLC is a joint-venture between Phillips 66 Inc. and Tessenderlo Kerley, Inc.. The joint-
venture performs sulfur recovery and manufactures sulfur-based products, which are sold to Tessenderlo
Kerley, Inc. Currently Jupiter Sulphur LLC owns and manages two facilities in the United States, located in
Ponca City (Oklahoma) and Billings (Montana).
PB Shengda (Zhejiang) Biotechnology Co., Ltd, a 50% joint-venture between Tessenderlo Group and
Zhejiang Shengda Ocean Co., Ltd, a Chinese state-owned company was established in June 2020 for the
construction of a marine collagen peptides plant. Both partners agreed in 2021 to terminate the joint-
venture agreement. The total issued capital of the joint-venture was expected to amount to 10.0 million
EUR. The group made a cash contribution of 2.0 million EUR in 2020, while the group’s share in unpaid
share capital (3.0 million EUR) was included in current trade and other payables in the consolidated
statement of financial position as per December 31, 2020. Following the agreement to terminate the joint-
venture, the current payable of 3.0 million EUR was reversed in 2021, while an insignificant write-off was
recognized in the line item “other income and expenses” within EBIT adjusting items. The group expects
to recover the remaining carrying amount of its investment (1.4 million EUR).
The carrying amount of the investments accounted for using the equity method is as follows:
(Million EUR)
2021
2020
Jupiter Sulphur LLC
17.1
14.2
PB Shengda (Zhejiang) Biotechnology Co., Ltd
1.4
5.0
Établissements Michel SAS
0.8
0.8
Total
19.2
20.0
The “Other investments and guarantees” (11.8 million EUR) mainly relate to a loan granted by Tessenderlo
Kerley, Inc.. The loan of 11.0 million USD loan was granted to the joint-venture Jupiter Sulphur LLC, which
was fully drawn in the period over 2017 and 2018, and which remains outstanding for 10.4 million USD
(9.2 million EUR). Jupiter Sulphur LLC obtained the same amount from the other joint-venture partner.
The loan is interest bearing (3.0%) and outstanding till December 2026 at the latest, whereby the cash
needs in Jupiter Sulphur LLC will be taken into account.
Tessenderlo Group 2021 annual report | 153
The granted loan is included in “Other investments” in the group’s consolidated statement of financial
position. The related interest income is considered to be insignificant and is not eliminated.
None of the group’s equity-accounted investees are publicly listed entities and consequentially they do
not have published price quotations.
Summary of financial information on investments accounted for using the equity method at 100% at
December 31:
(Million EUR)
2021
2020
Non-current assets
103.8
98.4
Current assets
15.9
23.2
Total assets
119.7
121.6
Equity
39.0
39.9
Non-current liabilities
18.6
18.5
Current liabilities
62.1
63.2
Total equity and liabilities
119.7
121.6
Revenue
55.3
40.6
Cost of sales
-50.3
-43.6
Gross profit
4.9
-3.0
EBIT (Profit (+) / loss (-) from operations)
2.9
-4.0
Finance (costs) / income - net
-0.6
-1.0
Profit (+) / loss (-) before tax
2.3
-5.0
Profit (+) / loss (-) for the period
1.4
-3.7
Total comprehensive income for the period
1.4
-3.8
15.Differed tax assets and liabilities
Assets
Liabilities
Net
(Million EUR)
2021
2020
2021
2020
2021
2020
Property, plant and equipment
2.9
2.6
-43.8
-42.0
-40.9
-39.4
Intangible assets
4.9
5.0
-26.5
-31.6
-21.6
-26.5
Inventories
9.0
8.8
-2.1
-0.4
6.9
8.4
Employee benefits
10.2
12.1
-0.1
-0.3
10.1
11.8
Derivative financial instruments
3.4
5.3
-
-
3.4
5.3
Provisions
7.4
7.6
-13.7
-13.4
-6.3
-5.9
Other items
8.0
8.7
-10.9
-13.4
-2.9
-4.7
Losses carried forward
19.4
17.0
-
-
19.4
17.0
Gross deferred tax assets / (liabilities)
65.3
67.0
-97.2
-101.1
-31.9
-34.1
Set-off of tax
-31.8
-34.8
31.8
34.8
Net deferred tax assets / (liabilities)
33.5
32.2
-65.4
-66.3
-31.9
-34.1
The net deferred tax liability on intangible assets is mainly related to the customer list (operating segment
T-Power), representing the fair value of the tolling agreement which was concluded with RWE group for
a period of 15 years (until June 2026). The yearly amortization of this customer list resulted in a decrease
of the recognized deferred tax liability by 5.3 million EUR.
Tessenderlo Group 2021 annual report | 154
Deferred tax assets on fiscal losses carried forward recognized on the Belgian parent company,
Tessenderlo Group nv, amount to 7.5 million EUR (total tax losses and tax credits carried forward in
Tessenderlo Group nv amount to 188 million EUR) as per year-end 2021. The other deferred tax assets on
fiscal losses carried forward recognized amount to 11.9 million EUR and mainly relate to French fiscal
losses carried forward (42 million EUR) which were fully recognized.
Deferred tax assets were recognized following a review of the future taxable profits as per year-end 2021.
The 2021 fiscal results of the subsidiaries, for which deferred tax assets on fiscal losses carried forward
were recognized, were positive.
A deferred tax liability relating to undistributed reserves within the subsidiaries of the group has not been
recognized because management believes that this liability will not incur in the foreseeable future. The
deferred tax liability is not significant as the majority of dividends received by the company (Tessenderlo
Group nv) is tax exempt.
Tax losses and tax credits carried forward on which no deferred tax asset is recognized amount to 242.5
million EUR (2020: 239.1 million EUR). Of these tax credits, 15.5 million EUR have a finite life (they expire
mainly in the period 2022-2026). Deferred tax assets are only recognized based on the probability
assessment whether future taxable profits (within the next 5 years) will be available, against which the
unused tax losses and credits can be utilized.
The movements in the deferred tax balances during the year can be summarized as follows
7
:
(Million EUR)
Balance at
January 1, 2021
Recognized in
the income
statement
Recognized in
other
comprehensive
income
Translation
differences
Balance at
December 31,
2021
Property, plant and equipment
-39.4
0.3
-
-1.8
-40.9
Intangible assets
-26.5
4.8
-
0.1
-21.6
Inventories
8.4
-1.7
-
0.2
6.9
Employee benefits
11.8
-0.4
-1.2
-0.0
10.1
Derivative financial instruments
5.3
-1.4
-0.5
-
3.4
Provisions
-5.9
-0.4
-
-0.0
-6.3
Other items
-4.7
1.8
-
-0.0
-2.9
Losses carried forward
17.0
2.4
-
0.0
19.4
Total
-34.1
5.4
-1.7
-1.6
-31.9
16.Trade and other receivables
(Million EUR)
note
2021
2020
Non-current trade and other receivables
Other receivables
3.8
6.4
Receivables from related parties
0.0
0.9
Assets related to employee benefit schemes
23
9.1
5.1
Total
12.9
12.3
7
Deferred tax liabilities and deferred tax expenses are presented as negative amounts; deferred tax assets and deferred tax income are presented
as positive amounts.
Tessenderlo Group 2021 annual report | 155
(Million EUR)
note
2021
2020
Current trade and other receivables
Trade receivables
26
332.4
237.5
-
Gross trade receivables
26
335.9
241.4
-
Amounts written off
26
-3.5
-4.0
Other receivables
38.0
31.7
Prepayments
0.4
0.9
Receivables from related parties
1.0
0.8
Total
371.8
270.8
The 2020 non-current other receivables mainly included a French tax receivable of 2.7 million EUR related
to credits for competitiveness, employment and research. In 2021, these receivables were used to offset
French corporate income taxes. The outstanding amounts per December 31, 2021, relate to several,
individually insignificant items.
Receivables from related parties mainly concern receivables from joint-ventures (note 29 - Related
parties).
The assets related to employee benefit schemes concern the net pension asset of the UK pension fund
where the pension assets are higher than the pension liabilities.
The ageing of the gross trade receivables and amounts written off is disclosed in the section “Credit risk”
of note 26 - Financial instruments.
The current other receivables mainly relate to other tax and VAT receivables for 25.4 million EUR (2020:
15.0 million EUR). The increase is mainly the result of the higher business activity. As per December 2020,
the current other receivables also included an expected insurance reimbursement (7.2 million EUR) which
was recognized following a fire incident at the plant of Environmentally Clean Systems LLC. The majority
of the insurance reimbursement was received in 2021.
The non-recourse factoring program is suspended since 2015. There was no cash received under non-
recourse factoring agreements, whereby trade receivables were sold at their nominal value minus a
discount in exchange for cash.
17.Inventories
(Million EUR)
2021
2020
Raw materials
83.7
52.3
Work in progress
11.3
10.8
Finished goods
255.9
222.5
Goods purchased for resale
31.3
36.2
Spare parts
11.2
10.5
Total
393.4
332.1
The increase of inventories can be mainly explained by the impact of increased raw material prices and
higher energy costs, mainly within the operating segments Agro and Industrial Solutions.
There are no inventories pledged as security.
Tessenderlo Group 2021 annual report | 156
In 2021 inventories for 1,477.2 million EUR (2020: 1,205.8 million EUR) were recognized as an expense
during the year and included in the line item cost of sales within the income statement.
Inventories are stated at the lower of cost and net realizable value. The calculation of a potential write-
off is based on experience and on the assessment of market circumstances. The write down, included in
cost of sales, amounts to -2.5 million EUR in 2021 (2020: -10.7 million EUR). The COVID-19 pandemic
impacted the ageing of inventories as well as the demand in 2020, explaining the higher write-off amount
compared to 2021.
The group expects to recover or settle the inventory, available as per December 31, 2021, within the next
twelve months, except for the inventory of non-strategic spare parts. These spare parts will be used
whenever deemed necessary.
18.Cash and cash equivalents
(Million EUR)
note
2021
2020
Term accounts
26
159.8
171.5
Current accounts
26
160.4
58.6
Cash and cash equivalents
320.3
230.1
Bank overdrafts
22/26
-0.1
-0.0
Cash and cash equivalents in the statement of cash flows
320.2
230.0
The term accounts have a maximum maturity of 1 month. As per December 31, 2021, the cash and cash
equivalents include 43.2 million USD or 38.1 million EUR (2020: 32.1 million USD or 26.2 million EUR).
As per year end 2021, an investment in a short term bank note for a total of 10.0 million EUR is
outstanding. The counterparty is a highly rated international bank. The note has an original duration of 9
months (maturing in January 2022). As this note has an initial maturity of more than three months, it is
not included within “Cash and cash equivalents”, but in “Short term investments”.
19.Equity
Issued capital and share premium
Shares
2021
2020
On issue at January 1
43,154,979
43,154,979
On issue at December 31 - fully paid
43,154,979
43,154,979
The number of shares comprised 24,927,811 registered shares (2020: 23,298,789) and 18,227,168
ordinary shares (2020: 19,856,190). The shares are without nominal value. The holders of Tessenderlo
Group nv shares are entitled to receive dividends as declared. In accordance with article 7:53 of the
Belgian Code of Companies and Associations, the extraordinary meeting of shareholders of July 10, 2019
has decided to introduce a loyalty voting right for each fully paid-up share that has continuously been
registered in the share register on the name of the same shareholder for at least two years. The number
of voting rights amounted to 63,134,181 as per December 31, 2021 (2020: 61,005,915).
Tessenderlo Group 2021 annual report | 157
On the annual shareholders’ meeting of Tessenderlo Group nv on May 11, 2021, the shareholders of
Tessenderlo Group nv approved the proposal of the Board of Directors not to pay out a dividend for the
2020 financial year.
No new offering of shares to be subscribed by staff took place in 2021.
Authorized capital
According to the decision of the extraordinary general meeting of June 6, 2017, the Board of Directors
was granted the authority, for a period of 5 years from the publication of the authorization in the Annex
to the Belgian State Gazette, to increase the share capital, in one or more times, up to an amount of
43,160,095 EUR, in accordance with the provisions set out in the Belgian Companies Code and the articles
of association of the company. The Board of Directors is allowed to use the authorized capital to take
protective measures for the company through capital increases, with or without limitation or withdrawal
of preferential rights, even outside the context of a possible public takeover bid, to the extent that the
company has not yet received a notification of the FSMA with respect to a public takeover bid on its
securities.
Without prejudice to the possibility to realize the commitments that were validly entered into before
receipt of the notification of the FSMA pursuant to article 7:202, paragraph 2, 1° of the Belgian Code on
Companies and Associations, the Board of Directors was authorized, for a period of 3 years from the
authorization by the extraordinary general meeting of June 6, 2017, to proceed to a capital increase within
the framework of authorized capital, with or without limitation or withdrawal of preferential rights as the
case may be in favour of one or more persons, following receipt of a notification of the FSMA with respect
to a public takeover bid on the company’s securities, in accordance with the conditions set out in article
7:202, paragraph 2, 2° of the Belgian Code on Companies and Associations and the articles of association
of the company.
The Board of Directors is also authorized, with right of substitution, to amend the company’s articles of
association in accordance with the capital increase that was decided within the scope of the authorized
capital.
The authority to increase the capital by the Board of Directors will expire on June 25, 2022.
Repurchase of own shares
With reference to Article 7:215 § 1 of the Companies and Associations Code and Article 8:4 of the Royal
Decree of April 29, 2019 in execution of the Companies and Associations Code, a program was started for
the purchase of its own shares for an amount of up to 5 million EUR. These shares will be used as part of
the senior management compensation plan (Long Term Incentive Plan), as the intention exists to grant
beneficiaries the option to receive their bonus partially through shares (representing the same value as a
cash bonus). On September 28, 2020, the group bought 132,000 of its own shares at 32 EUR per share for
a total amount of 4.2 million EUR. The purchase was made on the Euronext Brussels regulated market.
The board of directors of Tessenderlo Group made this purchase as authorized by the Extraordinary
General Meeting on June 6, 2017. As a result of the aforementioned transaction the company owns a total
of 132,000 of its own shares or 0.306% of the total number of 43,154,979 issued shares, as at December
31, 2021. In accordance with art 7:217 §1 of the Companies and Associations Code, the voting rights
attached to the treasury shares held by the company or its subsidiaries are suspended.
As per December 31, 2021, the share price of Tessenderlo Group nv amounted to 33.35 EUR.
Tessenderlo Group 2021 annual report | 158
Legal reserves
According to Belgian law, 5% of the statutory net income of a Belgian company must be transferred each
year to a legal reserve until the legal reserve reaches 10% of the issued capital. At balance sheet date, the
legal reserve of the company amounts to 21.6 million EUR. Generally, this reserve cannot be distributed
to the shareholders other than upon liquidation.
The amount of dividends payable to Tessenderlo Group nv by its operating subsidiaries is subject to
general limitations imposed by the corporate laws, capital transfer restrictions and exchange control
restrictions of the respective jurisdictions where those subsidiaries are organized and operate. There are
no other significant restrictions. Dividends paid to the company by certain of its subsidiaries are also
subject to withholding taxes.
Translation reserves
The translation reserves comprise all foreign exchange differences arising from the translation of the
financial statements of foreign operations.
Hedging reserves
The hedging reserves comprise the effective portion of the cumulative net change in the fair value of cash
flow hedges to the extent the hedged risk has not yet impacted the income statement.
Dividends
The Board of Directors will propose to the shareholders, at the annual shareholders’ meeting of May 10,
2022, not to pay out a dividend for the 2021 financial year.
Capital Management
The Board of Directors’ policy is to maintain a strong capital base so as to maintain investor, creditor and
market confidence and to sustain future development of the business. Capital consists of the issued
capital, share premium and reserves. The Board of Directors seeks to maintain a balance between the
higher returns that might be possible with borrowings and the advantages and security afforded by a
strong capital position. The gearing ratio
8
at the end of 2021 is 6.2% (2020: 18.2%). The gearing is
calculated as the net financial debt divided by the sum of the net financial debt and equity attributable to
equity holders of the company.
8
Refer to Alternative Performance Measures for the calculation of the gearing ratio.
Tessenderlo Group 2021 annual report | 159
20.Earnings per share
Basic earnings per share
The calculation of the basic earnings per share is based on the profit attributable to ordinary shareholders
and the weighted average number of ordinary shares outstanding during the year.
The weighted average number of ordinary shares and the earnings per share are calculated as follows:
2021
2020
Number of ordinary shares at January 1
43,154,979
43,154,979
Effect of own shares
1
-132,000
-33,902
Adjusted weighted average number of ordinary shares at December 31
2
43,022,979
43,121,077
Profit (+) / loss (-) attributable to equity holders of the company (million EUR)
187.8
99.1
Basic earnings per share (in EUR)
4.36
2.30
1
Weighted average of own shares following the repurchase of 132,000 own shares on September 28, 2020.
2
Takes into account the effect of shares issued, which is based on the weighted average number of issued shares during the accounting period.
Diluted earnings per share
The calculation of diluted earnings per share is based on the profit attributable to ordinary shareholders
and the diluted weighted average number of ordinary shares outstanding during the year.
Potential ordinary shares are treated as dilutive when, and only when, their conversion to ordinary shares
would decrease earnings per share or increase loss per share.
As there are no warrants outstanding, there is no dilution of the shares.
21.Non-controlling interest
The detail of the non-controlling interest in subsidiaries of the group is as follows:
Non-controlling interest percentage
Country
2021
2020
Environmentally Clean Systems LLC
US
30.99%
30.99%
ECS Myton, LLC
US
49.00%
49.00%
Tessenderlo Group 2021 annual report | 160
Summary financial information of subsidiaries with a non-controlling interest at 100% as per December
31:
(Million EUR)
2021
2020
Non-current assets
0.6
-
Current assets
8.2
13.7
Total assets
8.8
13.7
Equity
1.1
-0.0
Non-current liabilities
0.6
1.6
Current liabilities
7.1
12.1
Total equity and liabilities
8.8
13.7
Revenue
0.0
0.2
Cost of sales
-0.1
-0.7
Gross profit
-0.0
-0.5
Adjusted EBIT
-0.1
-0.6
EBIT (Profit (+) / loss (-) from operations)
2.3
-2.1
Finance (costs) / income - net
-0.0
-0.0
Profit (+) / loss (-) before tax
2.3
-2.1
Profit (+) / loss (-) for the period
1.7
-1.6
In 2021, the group sold the main assets of the subsidiary Environmentally Clean Systems LLC. The carrying
amount of the production assets was already fully impaired in 2020, following a fire incident caused by a
lightning. The proceeds and the result on the sale were insignificant and this result was, together with the
reversal of a dismantlement provision, recognized in EBIT adjusting items (note 6 - EBIT Adjusting items).
The remaining assets and liabilities per December 31, 2021 mainly relate to intragroup loans and
borrowings.
The group intends to liquidate the two legal entities after settlement of all outstanding obligations.
22.Loans and borrowing
(Million EUR)
note
2021
2020
Non-current loans and borrowings
193.6
385.1
Current loans and borrowings
211.4
66.2
Total loans and borrowings
405.0
451.3
Cash and cash equivalents
18
-320.3
-230.1
Bank overdrafts
1
18
0.1
0.0
Short term investments
2
18
-10.0
-20.0
Net loans and borrowings
74.8
201.3
1
A bank overdraft is a flexible borrowing facility on a bank current account, which is repayable on demand.
2
The 2021 amount relates to one short term bank note outstanding (10.0 million EUR, maturity date January 2022), while the 2020 amount related
to two short term bank notes outstanding, of 10.0 million EUR each, having a maturity date in February and April 2021 (note 18 - Cash and cash
equivalents).
As per year-end 2021, the group net financial debt amounted to 74.8 million EUR, implying a leverage
9
of
0.2x, and included a lease liability, in accordance with IFRS 16 Leases, for an amount of 54.1 million EUR.
Excluding the impact of IFRS 16 Leases, the net financial debt would have amounted to 20.8 million EUR
as per year-end 2021, compared to 147.8 million EUR as per year-end 2020.
9
Refer to Alternative Performance Measures for the calculation of the leverage ratio.
Tessenderlo Group 2021 annual report | 161
Reconciliation of changes in net loans and borrowings arising from cash flows and non-cash changes:
Bank overdrafts
Cash and cash
equivalents
Short term
investments
Current lease
liabilities
Non-current
lease liabilities
Other current
loans and
borrowings
Other non
-
current loans
and borrowings
Total
Net financial debt as per January 1, 2020
-0.1
154.5
0.0
-21.1
-42.6
-65.7
-372.5
-347.5
Cash flows, net
0.1
82.1
20.0
22.6
-
45.3
-5.6
164.5
Acquisitions through business combinations
-
-5.7
-
-0.1
-0.1
-
-
-5.8
IFRS 16 new leases and lease modifications
-
-
-
-2.1
-11.7
-
-
-13.7
Transfers
-
-
-
-18.2
18.2
-27.8
27.8
0.0
Effect of exchange rate differences
-0.0
-0.8
-
0.6
0.9
0.1
0.5
1.3
Net financial debt as per December 31, 2020
-0.0
230.1
20.0
-18.2
-35.2
-48.0
-349.8
-201.3
Net financial debt as per January 1, 2021
-0.0
230.1
20.0
-18.2
-35.2
-48.0
-349.8
-201.3
Cash flows, net
-0.0
89.2
-10.0
20.6
-
47.4
-
147.1
IFRS 16 new leases and lease modifications
-
-
-
-2.0
-18.0
-
-
-20.0
Transfers
-
-
-
-17.0
17.0
-193.7
193.7
0.0
Effect of exchange rate differences
-
1.1
-
-0.5
-0.8
-0.1
-0.4
-0.7
Net financial debt as per December 31, 2021
-0.1
320.3
10.0
-17.0
-37.1
-194.4
-156.6
-74.8
Non-current and current loans and borrowings:
(Million EUR)
note
2021
2020
Non-current loans and borrowings
Non-current lease liabilities
37.1
35.2
Bonds
58.0
223.5
Credit facility T-Power nv
90.1
115.8
Credit institutions
8.5
10.6
Total
193.6
385.1
Current loans and borrowings
Current lease liabilities
17.0
18.2
Bonds
165.5
-
Current portion credit facility T-Power nv
25.7
25.7
Credit institutions
3.2
3.3
Commercial paper
-
19.0
Total
211.4
66.2
Total non-current and current loans and borrowings
26
405.0
451.3
The non-current loans and borrowings include a bond, issued in July 2015, with a maturity of 10 years (the
“2025 bonds”), with a fixed rate of 3.375%. The other bond, also issued in July 2015, with a maturity of 7
years (the “2022 bonds”), with a fixed rate of 2.875%, is included in the current loans and borrowings. The
group repurchased “2022 bonds” for a nominal amount of 0.1 million EUR at a price of 101.5% in 2020. In
February 2022, the group repurchased 35.0 million EUR of the “2022 bonds” at a price of 102.875% in
order to reduce the liquidity risk as well as the interest costs (note 31 - Subsequent events).
The outstanding loan of T-Power nv as per December 31, 2021 amounts to 115.8 million EUR. The T-Power
nv assets and shares are serving as guarantee for the loan. The term loan credit facility contains a covenant
stating a minimum required debt service cover ratio (based on the last 12 months cash flow available for
debt service). This covenant has been complied with as per December 31, 2021.
Tessenderlo Group 2021 annual report | 162
Tessenderlo Kerley Inc. has a loan outstanding of 5.6 million EUR, of which 0.9 million EUR is current. The
loan has a maturity of 10 years (2018-2028) at a fixed rate of 3.95%. The financed Phoenix headquarters
building (Arizona, United States) is serving as guarantee for the loan.
Tessenderlo Group nv has a loan outstanding of 5.4 million EUR, of which 1.7 million EUR is current. The
loan has a maturity of 5 years (2020-2025) at a fixed rate of 0.33%. The loan was drawn to finance the
purchase of vehicles within the operating segment Bio-valorization, which were previously leased, and
has no financial covenants.
The lease liability, in accordance with IFRS 16 Leases, amounts to 54.1 million EUR (December 31, 2020:
53.4 million EUR), of which 37.1 million EUR is included in non-current and 17.0 million EUR in current
loans and borrowings (note 26 - Financial instruments).
The weighted average borrowing rate applied to lease liabilities was 2.2% in 2021 (2020: 2.0%). See note
26 - Financial instruments for the contractual maturities of the lease liabilities, including interest
payments.
The group has access to a Belgian commercial paper program of 200.0 million EUR which remained unused
at the end of December 2021 (December 31, 2020: 19.0 million EUR). These were previously issued by
Tessenderlo Group nv, the parent company, and included in current loans and borrowings.
There has been no drawdown as per December 31, 2021 on the 5 year committed bi-lateral credit lines,
which were renewed for 5 years in December 2019. The committed bi-lateral credit lines amount to 142.5
million EUR (of which part can be drawn in USD).
Non-current and current loans and borrowings by currency
Analysis of non-current and current loans and borrowings by currency, expressed in EUR (2021):
(Million EUR)
EUR
USD
Other
Total
Current lease liabilities
9.7
4.7
2.6
17.0
Other current loans and borrowings
192.9
0.9
0.7
194.4
Non-current lease liabilities
24.5
6.1
6.4
37.1
Other non-current loans and borrowings
151.8
4.7
-
156.6
Total loans and borrowings
378.9
16.4
9.7
405.0
In percentage of total loans and borrowings
93.5%
4.1%
2.4%
100.0%
Analysis of non-current and current loans and borrowings by currency, expressed in EUR (2020):
(Million EUR)
EUR
USD
Other
Total
Current lease liabilities
10.9
4.7
2.5
18.2
Other current loans and borrowings
47.2
0.8
-
48.0
Non-current lease liabilities
24.5
4.0
6.8
35.2
Other non-current loans and borrowings
344.7
5.2
-
349.8
Total loans and borrowings
427.4
14.7
9.2
451.3
In percentage of total loans and borrowings
94.7%
3.3%
2.0%
100.0%
Tessenderlo Group 2021 annual report | 163
23.Employee benefits
The provisions for employee benefits recognized in the balance sheet as of December 31 are as follows:
2021
2020
(Million EUR)
Early
retirement
provision
Defined
benefit
liability
Other
employee
benefits
Total
Early
retirement
provision
Defined
benefit
liability
Other
employee
benefits
Total
Non-current
0.8
49.4
5.6
55.8
1.1
60.6
5.9
67.6
Current
0.4
-
0.3
0.7
0.6
-
0.3
0.9
Total
1.2
49.4
5.8
56.4
1.7
60.6
6.2
68.5
2021
(Million EUR)
Early retirement
provision
Defined benefit
liability
Other employee
benefits
Total
Balance at January 1, 2021
1.7
60.6
6.2
68.5
Additions
0.5
7.7
0.4
8.5
Use of provision
-0.5
-4.6
-0.2
-5.3
Reversal of provisions
-0.4
-14.5
-0.4
-15.4
Translation differences
-
0.1
-0.1
0.0
Balance at December 31, 2021
1.2
49.4
5.8
56.4
The provisions for other employee benefits include long-service benefits (e.g. medal of honor of labor,
jubilee premiums,…).
General description of the type of plan
Post-employment benefits
These liabilities are recorded to cover the post-employment benefits and cover the pension plans and
other benefits in accordance with local practices and conditions, following an actuarial calculation taking
into account the financing of insurance companies and other pension funds. The most important pension
plans are located in Belgium, the Netherlands, the United Kingdom and Germany.
Defined contribution pension plans
Defined contribution pension plans are plans for which the group pays pre-determined contributions to a
legal entity or a separate fund, in accordance with the settings of the plan. The group’s legal or
constructive obligation is limited to the amount contributed. The contributions are recognized as an
expense in the income statement as incurred and are included in note 7 - Payroll and related benefits.
Defined benefit pension plans
The defined benefit pension plans provide benefits related to the level of salaries and the years of service.
These plans are financed externally by pension funds or insurance companies. Independent actuaries
perform an actuarial valuation on an annual basis for the most important pension plans.
Tessenderlo Group 2021 annual report | 164
The defined benefit pension plans in Belgium are all final salary pension plans which provide benefits to
members in the form of a guaranteed pension capital (payable either as capital or pension for life). These
plans are covered by a trustee administered pension fund and group insurance contracts. The level of
benefits provided depends on members’ length of service and the average salary in the final 3 years
leading up to retirement, or the average salary of the best 3 consecutive years, if higher.
The defined contribution plans in Belgium are legally subject to a minimum guaranteed return (the legal
minimum guaranteed return as from January 1, 2016 is 1.75%, while before it was 3.25% for employer
contributions). If the legal minimum guaranteed return is sufficiently covered, the group has no obligation
to pay further contributions than those that are recognized as an expense in the income statement as the
related service is provided. The Belgian defined contribution pension plans are to be treated as defined
benefit pension plans under IAS 19 as they do not meet the definition of a defined contribution pension
plan under IFRS. The group follows the prescribed methodology for measurement and accounting for
defined benefit pension plans in line with IAS 19 § 57.(a), meaning the projected unit credit method,
without adding expected future contributions. The group recognizes the difference between the defined
benefit obligation and the fair value of plan assets (IAS 19 § 57.(a) (iii)) on the balance sheet.
The plan assets of the Belgian defined contribution plans are included in the Belgian pension fund “OFP
Pensioenfonds” or are insured externally through insurance contracts. For the plans financed with
insurance contracts, several rates are guaranteed by insurance companies on the reserves and on
different levels of the premiums depending on the levels reached at certain dates:
- For the contributions paid until January 1, 2001, the guaranteed interest rate equals 4.75%;
- For the contributions paid during the period from January 1, 2001 until January 1, 2013, the
guaranteed interest rate equals 3.25%;
- For the contributions paid as from January 1, 2013 until April 1, 2015, the guaranteed interest
rate equals 1.75%;
- For the contributions paid during the period from April 1, 2015 until October 1, 2015, the
guaranteed interest rate equals 0.75%;
- For the contributions paid as from October 1, 2015 until October 1, 2016, the guaranteed interest
rate equals 0.50%;
- For the contributions paid as from October 1, 2016 until January 1, 2020, the guaranteed interest
rate equals 0.10%.
- For the contributions paid as from January 1, 2020, the guaranteed interest rate equals 0.00%.
The UK and German pension plans are final salary pension plans providing a guaranteed pension payable
for life. The UK plan is covered by a trustee administered pension fund and the German plan is covered
by recognized provisions in the consolidated statement of financial position.
For the UK and Belgian plans covered by trustee administered pension funds, the board of trustees must
consist of representatives of the company and plan participants in accordance with the plan regulations.
The governance responsibility for these plans rests with the board of trustees.
Through its defined benefit pension plans, the group is exposed to a number of risks, the most significant
of which are detailed below:
- Asset volatility: The group performs on a regular basis asset-liability studies for the trustee
administered pension funds to ensure an accurate match between plan assets and liabilities. The
plans hold significant investments in investment funds, which include quoted equity shares, and
are thus exposed to equity market risks.
Tessenderlo Group 2021 annual report | 165
- Inflation, interest rate and life expectancy: The pensions in most of the plans are linked to
inflation, therefore the pension plans are exposed to risks linked to inflation, interest rate and life
expectancy of pensioners.
The group considers all defined benefit pension plans as having similar characteristics and risks.
Defined benefit pension plans
The amounts recognized in the statement of financial position are as follows:
(Million EUR)
note
2021
2020
Present value of wholly funded obligations
-51.1
-49.8
Present value of partially funded obligations
-103.9
-104.5
Present value of wholly unfunded obligations
-28.6
-32.3
Total present value of obligations
-183.6
-186.7
Fair value of plan assets
143.4
131.1
Net defined benefit (liability)/asset
-40.3
-55.6
Amounts in the statement of financial position:
Liabilities
-49.4
-60.6
Assets
16
9.1
5.1
Net defined benefit (liability)/asset
-40.3
-55.6
Tessenderlo Group 2021 annual report | 166
The following table shows a reconciliation of the net defined benefit (liability)/asset and its components.
2021
2020
(Million EUR)
Present
value of
obligations
Fair
value
of plan
assets
Net defined
benefit
(liability)/asset
Present
value of
obligations
Fair
value
of plan
assets
Net defined
benefit
(liability)/asset
Balance at January 1
-186.7
131.1
-55.6
-178.7
127.0
-51.7
Included in profit or loss
Current service cost
-6.3
-
-6.3
-5.9
-
-5.9
Past service (cost)/benefit
-0.9
-
-0.9
-
-
0.0
Current service cost - Employee
contribution
-
0.4
0.4
-
0.4
0.4
Interest (cost)/income
-1.1
0.9
-0.1
-1.7
1.4
-0.3
Administrative expenses
-
-0.4
-0.4
-
-0.4
-0.4
Total included in profit or loss (note 7)
-8.2
1.0
-7.3
-7.7
1.4
-6.2
Included in other comprehensive income
Remeasurements:
- Gain/(loss) from change in demographic
assumptions
0.5
-
0.5
1.6
-
1.6
- Gain/(loss) from change in financial
assumptions
6.6
-
6.6
-12.1
-
-12.1
- Experience gains/(losses)
2.5
8.5
11.1
1.0
8.7
9.7
Total included in other comprehensive
income that will not be reclassified
subsequently to profit or loss in
subsequent periods
9.7
8.5
18.2
-9.5
8.7
-0.7
Other
Exchange differences on foreign plans
-4.1
4.4
0.3
3.4
-3.4
0.0
Contributions by employer
-
4.1
4.1
-
3.9
3.9
Benefits paid
5.6
-5.6
0.0
6.7
-6.7
0.0
Change in consolidation scope (acquisitions)
-
-
0.0
-0.8
-
-0.8
Total other
1.6
2.8
4.4
9.2
-6.1
3.1
Balance at December 31
-183.6
143.4
-40.3
-186.7
131.1
-55.6
The 2021 gain from change in financial assumptions, included in other comprehensive income that will
not be reclassified subsequently to profit or loss in subsequent periods, is mainly the result of the increase
of the discount rate used to calculate the present value of the defined benefit obligations (2021 weighted
average discount rate of 1.1%, compared to 0.7% in 2020).
The 2021 experience gains, included in other comprehensive income that will not be reclassified
subsequently to profit or loss in subsequent periods, are mainly the result of a higher than expected return
on plan assets.
Tessenderlo Group 2021 annual report | 167
The net periodic pension cost is included in the following line items of the income statement:
(Million EUR)
note
2021
2020
Cost of sales
-1.0
-1.0
Distribution expenses
-0.1
-0.1
Sales and marketing expenses
-0.1
-0.2
Administrative expenses
-3.9
-3.2
Other operating income and expenses
5
-2.0
-1.5
Finance (costs) / income - net
9
-0.1
-0.3
Total
-7.3
-6.2
The actual return on plan assets in 2021 was 9.5 million EUR (2020: 10.1 million EUR).
The group expects to contribute 4.1 million EUR to its defined benefit pension plans in 2022.
The fair value of the major categories of plan assets is as follows:
2021
2020
(Million EUR)
Quoted
Unquoted
Total
%
Quoted
Unquoted
Total
%
Property
-
4.0
4.0
2.8%
-
4.0
4.0
3.1%
Qualifying insurance policies
-
24.1
24.1
16.8%
-
22.2
22.2
16.9%
Cash and cash equivalents
-
26.6
26.6
18.5%
-
4.4
4.4
3.4%
Investment funds
86.6
-
86.6
60.4%
98.4
-
98.4
75.0%
Tessenderlo Group bond with maturity
date July 15, 2022
2.1
-
2.1
1.4%
2.1
-
2.1
1.6%
Total
88.7
54.7
143.4
100.0%
100.4
30.7
131.1
100.0%
The plan assets include no property occupied by the group and no shares of the parent company nor of
subsidiaries.
The investment funds include a portfolio of investments in equity, fixed interest investments and other
financial assets. This diversification reduces the portfolio risk to a minimum.
A part of the investment funds (equity invested) of the UK pension plan was divested in 2021 and
transferred into cash. The intention exists to move this cash in 2022 into assets that more closely match
the fund’s liabilities. This transfer further reduced the fund’s overall risk exposure and safeguarded the
previous achieved return on assets.
The principal actuarial assumptions used in determining pension benefit obligations for the group’s plans
at the balance sheet date (expressed as weighted averages) are:
2021
2020
Discount rate at 31 December
1.1%
0.7%
Future salary increases
1.9%
1.4%
Inflation
2.3%
2.0%
Tessenderlo Group 2021 annual report | 168
Assumptions regarding future mortality are based on published statistics and mortality tables, and are the
following:
Mortality table
Belgium
MR/FR - 5 (2020: MR/FR - 3)
United Kingdom
110% S3PMA, 105% S3PFA, CMI_2020 [1.50% M, 1.25% F] [S-kappa=7, A=0.25%, w2020=0%] from 2016
Germany
© RICHTTAFELN 2018 G von Klaus Heubeck - Lizenz Heubeck-Richttafeln-GmbH, Köln
For the UK and Belgian plans covered by trustee administered pension funds, an asset-liability matching
exercise is performed at least every 3 years, in line with the Statements of Investment Principles (SIP) of
the funds. The trustees ensure that the investment strategy as outlined in the SIP is in line with the assets
and liabilities management (ALM) strategy and is closely followed by the investment managers.
For the UK plan the next triennial funding valuation will be completed as at January 1, 2023. For the
Belgian plan a funding valuation is completed every year. The group does not expect the regular
contributions to increase significantly.
The weighted average duration of the defined benefit obligation is 12 years for the pension plans in the
euro zone. The duration of the UK pension plan is 18 years.
The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions, as per
December 31, 2021, is:
Change in
assumption
Impact on defined
benefit obligation*
Change in
assumption
Impact on defined
benefit obligation*
Discount rate
+0.5%
-6.1%
-0.5%
6.8%
Salary growth rate
+0.5%
0.9%
-0.5%
-0.8%
Pension growth/inflation rate
+0.5%
4.1%
-0.5%
-3.8%
Life expectancy
+ 1 year
2.0%
- 1 year
-2.0%
*A positive percentage indicates an increase of the defined benefit obligation, while a negative percentage indicates a decrease of the defined
benefit obligation.
The above sensitivity analyses are based on a change in one assumption while holding all other
assumptions stable. In practice, this is unlikely to occur, and changes in some of the assumptions may be
correlated.
Share-based payments
There were no warrants outstanding as per December 31, 2021 nor per December 31, 2020. No new
offering of warrants to the group’s senior management took place in 2020 and 2021.
Tessenderlo Group 2021 annual report | 169
24.Provisions
2021
2020
(Million EUR)
note
Current
Non-current
Total
Current
Non-current
Total
Environment
28
4.9
108.5
113.4
7.8
111.9
119.7
Dismantlement
-
22.1
22.1
-
23.2
23.2
Restructuring
1.6
-
1.6
0.6
-
0.6
Other
3.0
7.7
10.7
2.0
6.7
8.7
Total
9.5
138.3
147.8
10.4
141.8
152.3
Environment
Dismantlement
Restructuring
Other
Total
Balance at January 1, 2021
119.7
23.2
0.6
8.7
152.3
Additions
-
0.5
1.7
3.7
6.0
Use of provisions
-5.7
-0.0
-0.8
-0.5
-6.9
Reversal of provisions
-
-1.9
-
-1.2
-3.1
Effect of discounting
-0.8
-
-
-
-0.8
Translation differences
0.2
0.3
-
0.0
0.5
Balance at December 31, 2021
113.4
22.1
1.6
10.7
147.8
The environmental provisions amount to 113.4 million EUR and mainly relate to environmental provisions
to cover the cost for the remediation of historical soil and ground contamination of the factory sites in
Belgium (Ham, Tessenderlo and Vilvoorde) and France (Loos). A reliable estimate of the amount of outflow
of resources to settle this obligation was made, but a change in assumptions was made by increasing the
discount rate applied. The outstanding environmental provisions reflect the discounted value of the
expected future cash out, spread over the period 2022-2054. The discount rate, derived from the yield
curve of Belgian and French government bonds, varied between 0% and 1% in 2021 (between 0% and 1%
at year-end 2020). An increase of the discount rate by 1% would lower the environmental provisions by
approximately -9 million EUR.
The use of environmental provisions amounts to -5.7 million EUR in 2021 (2020: -6.5 million EUR), while
the effect of unwinding the discount amounts to -0.2 million EUR in 2021 (2020: -0.4 million EUR), which
is included in finance costs (note 9 - Finance costs and income). The impact on environmental provisions,
following an adjustment of the timing and discounting of future cash outs, amounts to +1.0 million EUR
(2020: -5.5 million EUR) and was recognized in EBIT adjusting items.
The amounts recognized reflect management’s best estimate of the expected expenditures required to
settle the present obligation at balance sheet date and are based on the current knowledge on the
potential exposure. These provisions are reviewed periodically and will be adjusted, if necessary, when
additional information would become available. These provisions could change in the future due to the
emergence of additional information on the nature or extent of the contamination, a change in legislation
or other factors of a similar nature.
In France, some facilities are subject to regulations pertaining to environmentally regulated facilities
(Classified Facilities for the Protection of the Environment “ICPE”). This legislation requires to dismantle
the classified facilities. The dismantlement provision is included in the cost basis of the related property,
plant and equipment, which cost is depreciated accordingly. The total provision recognized on those
French facilities amounts to 18.7 million EUR as per December 31, 2021 (2020: 18.5 million EUR). The
amounts recognized are based on an internal assessment and on the gross book value of the related
assets. They reflect management’s best estimate of the expected expenditures.
Tessenderlo Group 2021 annual report | 170
The expected timing of the cash outflow is not yet known. However, no significant cash outflow is
expected to take place within the foreseeable future.
The restructuring provisions (1.6 million EUR) include several, individual insignificant, restructuring
provisions within the operating segment Industrial Solutions (DYKA Group and Kuhlmann Europe). They
reflect management’s best estimate of the expected expenditures of the expected cash outflows required
to settle the present obligation at balance sheet date.
The other provisions include provisions for onerous contracts, claims and several, individually less
significant amounts. These provisions are reviewed regularly and, if necessary, adjusted based upon new
available information or changes in circumstances. They reflect management’s best estimate of the
expected expenditures of the expected cash outflows required to settle the present obligation at balance
sheet date.
Except for the remaining balance of an insurance receivable following a fire incident in 2020 at
Environmentally Clean Systems LLC, no other assets have been recognized as all expected
reimbursements, if any are deemed immaterial (e.g. resulting from the execution of environmental and
dismantlement plans).
25.Trade and other payables
(Million EUR)
2021
2020
Non-current trade and other payables
Accrued charges and deferred income
3.5
3.8
Remuneration and social security
-
8.9
Other amounts payable
0.6
1.8
Total
4.1
14.5
Current trade and other payables
Trade payables
243.9
172.7
Remuneration and social security
91.9
65.8
VAT and other taxes
10.9
11.6
Accrued charges and deferred income
6.3
7.5
Trade and other payables from related parties
4.0
4.0
Other amounts payable
9.0
8.5
Total
365.9
269.9
The amount of non-current remuneration and social security as per December 31, 2020 (8.9 million EUR)
related to the accrued charges for a long-term incentive plan for members of senior management. This
long-term incentive plan covered a 3 year period (calendar years 2019-2021) based on pre-set
performance metrics of the group, and will be paid out in 2022. The accrued amount as per December 31,
2021 (12.9 million EUR) is therefore included within current remuneration and social security.
The increase of the outstanding amount of current remuneration and social security compared to prior
year can furthermore be explained by higher accrued charges for the 2021 short-term incentive plan for
employees, based on pre-set group, business and individual performance metrics, with pay-out foreseen
in 2022. These accrued charges increased in line with the evolution of the operational performance of the
group.
Tessenderlo Group 2021 annual report | 171
The non-current other payables mainly relate to prepayments made in the execution of a long-term third
party maintenance contract (within the operating segment T-Power).
Trade payables increased, impacted by timing, the higher business activity as well as the increase of raw
material, energy and transport costs, mainly within the operating segments Agro and Industrial Solutions.
The trade and other payables from related parties relate to trade payables outstanding with the joint-
venture Jupiter Sulphur LLC as per December 31, 2021.
26.Financial instruments
Foreign currency risk
The group is exposed to fluctuations in exchange rates which may lead to profit or loss in currency
transactions. The group’s assets, earnings and cash flows are influenced by movements in foreign
exchange rates. More in particular, the group incurs foreign currency risks on, amongst others, sales,
purchases, investments and borrowings that are denominated in a currency other than the group’s
functional currency. The currency giving rise to this risk is primarily the USD (US dollar). Movements in
foreign currency therefore may adversely affect the group’s business, results of operation or financial
condition.
Subsidiaries are required to submit information on their net foreign exchange positions when invoiced
(customers, suppliers) to Tessenderlo Group nv, the parent company. All the positions are netted at the
level of Tessenderlo Group nv and the net positions (long/short), are then sold or bought on the market.
The main management tools are the spot purchases and sales of currencies followed by currency swaps.
Group borrowings are generally carried out by the group’s holding and finance companies, which make
the proceeds of these borrowings available to the operating entities. In principle, operating entities are
financed in their functional currency. The group does not use currency swaps to hedge intragroup loans.
In emerging countries, it is not always possible to borrow in local currency because local financial markets
are too narrow, funds are not available or because the financial conditions are too onerous. Those
amounts are relatively small for the group.
The group’s exposure to foreign currency risk was as follows based on nominal amounts (for the exchange
rates used, please refer to note 1 - Summary of significant accounting policies):
(Million EUR)
2021
2020
EUR*
USD
EUR*
USD
GBP
Assets
27.9
451.8
12.9
391.0
2.4
Liabilities
-24.1
-271.3
-17.6
-148.4
-4.6
Gross exposure
3.7
180.5
-4.6
242.6
-2.2
Foreign currency swaps
-11.2
-5.5
-1.0
Net exposure
-7.5
180.5
-10.1
242.6
-3.2
Net exposure (in EUR)
-7.5
159.4
-10.1
197.7
-3.6
*EUR includes the exposure to foreign currency risk in EUR and several, individual insignificant foreign currencies expressed in EUR.
The USD exposure is mainly due to intragroup loans which are no longer hedged since March 2015.
Tessenderlo Group 2021 annual report | 172
In 2021, the GBP exposure is no longer significant. This evolution can be explained by the conversion of
intragroup loans in GBP, granted by Tessenderlo Group nv to Tessenderlo Holding UK Ltd., into equity at
year-end 2020.
If the euro had strengthened or weakened by 10% against following currencies with all other variables
being held constant, the impact on equity and post-tax profit for the year would have been as follows:
(Million EUR)
Change in rate
Impact on the income
statement:
loss(-)/gain(+)
Impact on equity:
loss(-)/gain(+)
At December 31, 2021
USD
+10%
-24.1
-48.6
-10%
29.5
59.4
At December 31, 2020
USD
+10%
-30.0
-44.0
-10%
36.7
53.8
GBP
+10%
-5.0
-8.5
-10%
6.1
10.4
Credit risk
The group is subject to the risk that the counterparties with whom it conducts its business (in particular
its customers) and who have to make payments to the group, are unable to make such payments in a
timely manner or at all. In order to manage its credit exposure, a credit committee per business unit has
been created to determine a credit policy with credit limit requests, approval procedures, continuous
monitoring of the credit exposure and dunning procedure in case of delays. The group has moreover
globally elaborated a credit insurance program to protect accounts receivable from third party customers
against non-payment. Every legal entity of the group is participating to this program and the insurance is
provided by highly top rated international credit insurance companies. A large majority of the receivables
(around 95%) is covered under this group credit insurance program. The contract protects the insured
activities against non-payment with a deductible of 10% and foresees an indemnification cap at group
level. The program foresees a pay-out of the insured claims within 6 months after due date.
The group has no significant concentration of credit risk. However, there can be no assurance that the
group will be able to limit its potential loss of proceeds from counterparties who are unable to pay in a
timely manner or at all. The liquidities available at year-end are deposited for a short term at highly rated
international banks.
The maximum exposure to credit risk amounts to 726.1 million EUR as per December 31, 2021 (2020:
542.2 million EUR). This amount consists of current and non-current trade and other receivables (384.7
million EUR, note 16 - Trade and other receivables), the loans granted (10.5 million EUR), short term
investments (10.0 million EUR), current derivative financial instruments (0.6 million EUR) and cash and
cash equivalents (320.3 million EUR, note 18 - Cash and cash equivalents).
Tessenderlo Group 2021 annual report | 173
The maximum exposure to credit risk for trade receivables at the reporting date by operating segment
was (note 16 - Trade and other receivables):
(Million EUR)
note
2021
2020
Agro
153.0
94.3
Bio-valorization
99.7
79.7
Industrial Solutions
77.8
63.3
T-Power
1.8
0.2
Non-allocated
0.1
0.0
Total
16
332.4
237.5
The ageing of trade receivables at the reporting date was:
(Million EUR)
note
2021
2020
Gross
Amounts
written off
Gross
Amounts
written off
Not past due
298.3
-
210.6
-
Past due 0-30 days
27.4
-0.0
21.8
-0.0
Past due 31-120 days
4.8
-0.1
4.3
-0.1
Past due 121-365 days
2.7
-0.8
1.2
-0.3
More than one year
2.7
-2.6
3.7
-3.6
Total
16
335.9
-3.5
241.4
-4.0
The group estimates that the amounts that are past due are still collectible, following an expected credit
loss assessment based on historic payment behavior and extensive analysis of customer credit risk.
Based on the group’s monitoring of customer credit risk, the group estimates that, except for the amounts
mentioned in the table above, no impairment allowance is necessary in respect of trade receivables not
past due.
The movement in the allowance for impairment in respect to trade receivables during the year was as
follows:
(Million EUR)
note
2021
2020
Balance at January 1
-4.0
-3.7
Use of impairment loss
0.7
0.4
Reversal / (recognition) of impairment losses
5
-0.2
-0.6
Other movements
0.0
0.0
Balance at December 31
16
-3.5
-4.0
Interest risk
Changes in interest rates may cause variations in interest income and expenses resulting from interest-
bearing assets and liabilities. In addition, they may affect the market value of certain financial assets,
liabilities and instruments.
Tessenderlo Group 2021 annual report | 174
At the reporting date, the group’s interest-bearing financial instruments were:
(Million EUR)
note
2021
2020
Fixed rate instruments
Cash and cash equivalents
18
159.8
171.5
Short term investments
18
10.0
20.0
Loans and borrowings
22
288.5
289.9
Variable rate instruments
Cash and cash equivalents
18
160.4
58.6
Loans and borrowings
22
116.5
161.4
Bank overdrafts
22
0.1
0.0
The loans and borrowings with a variable rate mainly relate to the long term facility loan of T-Power nv.
The decrease compared to prior year can be explained by the two half-yearly reimbursements (25.7
million EUR). The remaining outstanding capital of the T-Power nv long term facility loan amounts to 115.8
million EUR as per December 31, 2021 (2020: 141.5 million EUR). Approximately 80% of the loan is hedged
through a series of forward rate agreements (the EURIBOR was fixed at 5.6% per annum). Movements in
interest rates would therefore not have a significant impact on the group’s cash flow or result.
The remaining loans and borrowings with a variable rate in 2020 could be mainly explained by the
commercial paper program (19.0 million EUR), while no balance was outstanding as per December 31,
2021.
Liquidity risk
Liquidity risk is defined as the risk that a company may have insufficient resources to fulfill its financial
obligations at any time. Failure to meet financial obligations can result in significantly higher costs, and it
can negatively affect reputation.
Liquidity risk for the group is monitored through the group’s corporate treasury department which tracks
the development of the actual cash flow position of the group and uses input from subsidiaries to project
short and long-term forecasts in order to adapt financial means to forecasted needs. Surplus cash is
invested in short-term deposits with appropriate maturities to ensure sufficient liquidity is available to
meet liabilities when due.
In order to limit the liquidity risk, the group has access to:
- a factoring program, set up at the end of 2009, and which was put on hold since 2015.
- a Belgian commercial paper program of maximum 200.0 million EUR (no amount outstanding as
per December 31, 2021, compared to an outstanding amount of 19.0 million EUR one year earlier).
- committed bi-lateral agreements till 2024 for a total amount of 142.5 million EUR (of which part
can be drawn in USD) with four banks. These committed bi-lateral agreements have no financial
covenants and ensure maximum flexibility for the different activities. As per December 31, 2021
none of these credit lines were used.
According to the decision of the extraordinary general meeting of June 6, 2017, the Board of Directors
was also granted the authority to increase the share capital, in one or more times, up to an amount of
43.2 million EUR (authority till June 25, 2022) (note 19 - Equity).
Tessenderlo Group 2021 annual report | 175
The following are the contractual maturities of loans and borrowings, including interest payments:
(Million EUR)
note
2021
Carrying
amount
Contractual
cash flows
Less than one
year
Between 1
and 5 years
More than 5
years
Non-derivative loans and borrowings
Bond with maturity date July 15, 2022
165.5
167.9
167.9
-
-
Bond with maturity date July 15, 2025
58.0
64.9
2.0
63.0
-
Credit facility T-Power nv
115.8
117.6
26.1
91.5
-
Credit institutions
11.7
12.5
3.5
7.7
1.3
Bank overdrafts*
0.1
0.1
0.1
-
-
Lease liabilities
54.1
59.1
17.6
30.9
10.6
Total
22
405.1
422.1
217.1
193.1
12.0
Derivatives
Foreign currency swaps
0.1
Inflow
11.3
11.3
-
-
Outflow
-11.2
-11.2
-
-
Interest rate swaps
-13.5
Inflow
0.2
-
0.2
-
Outflow
-13.6
-5.3
-8.3
-
Total
-13.4
-13.4
-5.2
-8.1
0.0
(Million EUR)
note
2020
Carrying
amount
Contractual
cash flows
Less than
one year
Between 1
and 5 years
More than 5
years
Non-derivative loans and borrowings
Bond with maturity date July 15, 2022
165.5
172.7
4.8
167.9
-
Bond with maturity date July 15, 2025
58.0
66.9
2.0
64.9
-
Credit facility T-Power nv
141.5
142.7
26.0
103.7
12.9
Commercial paper
19.0
19.0
19.0
-
-
Credit institutions
13.9
14.9
3.5
9.2
2.1
Bank overdrafts*
0.0
0.0
0.0
-
-
Lease liabilities
53.4
58.2
18.3
29.3
10.5
Total
22
451.3
474.3
73.7
375.1
25.5
Derivatives
Foreign currency swaps
-0.0
Inflow
6.5
6.5
-
-
Outflow
-6.6
-6.6
-
-
Interest rate swaps
-21.0
Inflow
0.0
-
-
-
Outflow
-20.8
-6.6
-13.8
-0.3
Total
-21.0
-20.8
-6.7
-13.8
-0.3
*A bank overdraft is a flexible borrowing facility on a bank current account, which is repayable on demand.
Estimation of fair value of financial assets and liabilities
The fair value of non-derivative loans and borrowings is calculated based on the net present value of
future principal and interest cash flows discounted at market rate. These are based on market inputs from
reliable financial information providers. Therefore, the fair value of the fixed interest-bearing loans and
borrowings is within level 2 of the fair value hierarchy.
Tessenderlo Group 2021 annual report | 176
The fair value of the non-current loans and borrowings at fixed interest rate, measured at amortized cost
in the statement of financial position as per December 31 is presented below:
(Million EUR)
note
2021
2020
Carrying
amount
Fair value
Carrying
amount
Fair value
Non-current loans and borrowings
Lease liabilities
22
-37.1
-38.2
-35.2
-36.3
Credit institutions
22
-8.5
-8.8
-10.6
-11.8
Bonds (maturity date in 2022* and 2025)
22
-58.0
-60.5
-223.5
-230.7
* Only applicable for the 2020 figures
The bond issued in 2015 with a maturity of 10 years (the “2025 bonds”) was quoted at 104.3% as per
December 31, 2021.
The fair value of the following financial assets and liabilities approximates their carrying amount:
•
Trade and other receivables
•
Other investments
•
Short term investments
•
Cash and cash equivalents
•
Current loans and borrowings
•
Trade and other payables
Fair value of derivative financial instruments
The following table shows the carrying amounts of derivative financial instruments measured at fair value
in the statement of financial position including their levels in the fair value hierarchy:
(Million EUR)
2021
Carrying amount balance sheet
Fair value hierarchy
Current
assets
Non-
current
assets
Current
liabilities
Non-
current
liabilities
Level 1
Level 2
Level 3
Total
Foreign currency swaps
0.1
-
-0.0
-
-
0.1
-
0.1
Interest rate swaps
-
-
-5.3
-8.2
-
-13.5
-
-13.5
Electricity forward
contracts
-
-
-3.3
-12.5
-
-
-15.8
-15.8
Electricity and gas
forward contracts
0.5
-
-
-
-
0.5
-
0.5
Total
0.6
0.0
-8.6
-20.7
0.0
-12.9
-15.8
-28.7
(Million EUR)
2020
Carrying amount balance sheet
Fair value hierarchy
Current
assets
Non-
current
assets
Current
liabilities
Non-
current
liabilities
Level 1
Level 2
Level 3
Total
Foreign currency swaps
0.0
-
-0.0
-
-
-0.0
-
-0.0
Interest rate swaps
-
-
-6.7
-14.3
-
-21.0
-
-21.0
Electricity forward
contracts
-
-
-5.1
-11.0
-
-
-16.1
-16.1
Total
0.0
0.0
-11.8
-25.3
0.0
-21.0
-16.1
-37.1
Tessenderlo Group 2021 annual report | 177
The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.
The fair value of forward contracts is calculated as the discounted value of the difference between the
contract rate and the current forward rate.
The fair value of these instruments generally reflects the estimated amounts that the group would receive
on settlement of favorable contracts or be required to pay to terminate unfavorable contracts at the
reporting date, and thereby taking into account the current unrealized gains or losses on open contracts.
The following table indicates the fair values of all outstanding derivative and other financial instruments
at year-end:
(Million EUR)
2021
2020
Contractual amount
Fair value
Contractual amount
Fair value
Foreign currency swaps
11.3
0.1
6.5
-0.0
Interest rate swaps
-13.4
-13.5
-20.8
-21.0
Electricity and gas forward contracts
N/A
-15.3
N/A
-16.1
Total
-2.2
-28.7
-14.2
-37.1
The contractual amount indicates the volume of outstanding derivatives at the balance sheet date and
therefore does not reflect the group’s exposure to risks from such transactions.
The total fair value of the derivative financial instruments at December 31, 2021 amounts to -28.7 million
EUR (2020: -37.1 million EUR) and consists of:
- forward interest rate agreements at T-Power nv, with maturity date in the period 2022-2026
- foreign currency swaps, with maturity date in January 2022
- an electricity forward contract, with maturity date in June 2026 (-15.8 million EUR)
- electricity and gas forward contracts, with maturity date in the first quarter of 2022 (+0.5 million
EUR)
The outstanding interest rate swaps of T-Power nv (which fixed the 6 months EURIBOR at 5.6% per annum
for approximately 80% of the outstanding loan with maturity dates till 2026) are, in accordance with the
requirements of IFRS 9, designated as hedging instruments in a cash flow relationship as per December
31, 2021. The effective portion of the change in fair value is therefore recognized in the hedging reserves
(Other comprehensive income). A level 2 fair value measurement is applied for the fair value
measurement of these agreements.
Tessenderlo Group 2021 annual report | 178
The table below indicates the underlying contractual amount of the outstanding foreign currency
contracts per currency at year-end (selling of foreign currencies):
(Million EUR)
2021
2020
Amount in foreign
currency
Amount in EUR
Amount in foreign
currency
Amount in EUR
GBP
2.6
3.1
1.0
1.1
JPY
579.6
4.5
443.2
3.5
Other
3.7
2.0
Total
11.3
6.5
The group sold the majority of its PVC/Chlor-Alkali activities in the third quarter of 2011. The electricity
purchase agreement relating to that activity was not part of the sale transaction and therefore the group
is still under an obligation to purchase certain quantities of electricity. As the group no longer needs the
electricity for its own use, it needs to sell the electricity on the market until the end of the contract.
Because of significant unobservable inputs, a level 3 fair value measurement is applied for the fair value
measurement of the electricity purchase agreement (‘PPA’ - Purchase Power Agreement), for which the
own-use exemption under IFRS 9 is not applicable anymore. The value of the contract is depending on the
current and future difference between market electricity prices and the generation cost based on market
gas prices (the “spark spread”), and on the effect of the hourly pricing optimization as foreseen in the
contract. Forward prices are only available for a 3-year period and for a base load product. The uncertainty
beyond that period is higher on different important parameters (including also the regulatory
environment), however based on more favourable market and regulatory condition assumptions, the fair
value of the PPA contract is set to zero beyond the initial 3 years. The used base load future prices are
calculated based on the 2021 average daily Zeebrugge Gas Yearly forward prices and on the 2021 average
daily Endex Yearly forward electricity prices for Belgium. The future hourly optimization effect is
calculated as an extrapolation of the trend since the start of the contract.
As per December 31, 2021 the inputs above lead to a net fair value of -15.8 million EUR compared to a
net fair value of -16.1 million EUR as per December 31, 2020. The change in net fair value for an amount
of +0.3 million EUR has been recognized as an EBIT adjusting item (note 6 - EBIT adjusting items).
The key assumptions used in the valuation as per December 31, 2021 are:
2022
2023
2024
Gas forward price
EUR/MWh
33.7
23.6
20.1
Electricity forward price
EUR/MWh
85.9
66.4
59.3
Discount rate
0.0%
The key assumptions used in the valuation as per December 31, 2020 are:
2021
2022
2023
Gas forward price
EUR/MWh
13.5
14.9
15.4
Electricity forward price
EUR/MWh
40.7
43.4
45.4
Discount rate
0.0%
Tessenderlo Group 2021 annual report | 179
The sensitivity of the valuation to changes in the principal assumptions is the following:
Change in assumption
Impact fair value (Million EUR)
2021
2020
Gas price
+1 EUR/MWh
-2.6
-2.5
Electricity price
+1 EUR/MWh
1.3
1.3
Spark spread optimization
+1 EUR/MWh
1.3
1.3
Discount rate
+1%
0.3
0.3
Running hours T-Power nv
+10%
-1.8
-0.9
The above sensitivity analyses are based on a change in one assumption while holding all other
assumptions stable. In practice, this is unlikely to occur, and changes in some of the assumptions may be
correlated. If the key assumptions of 2024 would also have been applied for the period 2025-June 2026,
a period for which no market data is available, the fair value of the contract (2022-June 2026) would have
amounted to -26.0 million EUR.
In the fourth quarter of 2021, the group also concluded some additional electricity and gas forward
agreements with maturity in the first quarter of 2022. These agreements have been concluded in order
to partially fix the “clean spark spread” revenue of the Purchase Power Agreement for the first quarter of
2022 by selling the electricity and locking in the generation costs via forward transactions. The fair value
of these instruments amounts to +0.5 million EUR as per December 31, 2021 and has been recognized as
an EBIT adjusting item (note 6 - EBIT adjusting items).
The net change in fair value of derivative financial instruments before tax, as included in the other
comprehensive income, amounts to +1.9 million EUR, and can be explained by the change in fair value of
the interest rate swaps of the subsidiary T-Power nv.
27.Guarantees and commitments
(Million EUR)
2021
2020
Guarantees given by third parties on behalf of the group
30.8
26.8
Guarantees given on behalf of third parties
1.5
1.7
Guarantees received from third parties
6.0
3.5
Commitments related to capital expenditures
53.4
24.5
Guarantees given by third parties on behalf of the group mainly relate to the fulfillment of environmental
obligations for 21.0 million EUR (2020: 20.8 million EUR) of Tessenderlo Group nv. The remaining balance
consists of numerous other guarantees to secure custom and other obligations.
Guarantees given on behalf of third parties mainly relate to guarantees given for the fulfillment of lease
obligations.
The guarantees received from third parties concern guarantees, which suppliers grant to the group as
guarantee for the proper execution of investment projects (mainly the construction of a new Thio-Sul
plant in Geleen, The Netherlands).
Tessenderlo Group 2021 annual report | 180
Capital expenditure contracted for at the end of the reporting period, but not yet incurred, amounts to
53.4 million EUR (2020: 24.5 million EUR). These commitments mainly include the capital expenditure
related to the construction of a new Thio-Sul manufacturing plant in Geleen, The Netherlands (operating
segment Agro), capital expenditure to facilitate an improved valorization of animal by-products (operating
segment Bio-valorization), as well as the purchase of trucks which were previously leased.
The shares of T-Power nv are pledged in first degree to guarantee the liabilities in respect of a “facility
agreement” of 440.0 million EUR signed on December 18, 2008 between T-Power nv and a syndicate of
banks as amended and restated for the last time pursuant to an amendment and restatement deed on
March 25, 2019 (with one remaining bank). The T-Power nv shares are pledged in second degree to
guarantee the “tolling agreement” for the entire 425 MW capacity signed on August 13, 2008 between T-
Power nv and RWE group. The tolling agreement has a 15 years duration with an optional 5-year extension
thereafter.
The group and its subsidiaries have certain other contingent liabilities relating to long-term purchase
obligations and commitments. The agreements typically concern strategic raw materials and goods and
services, such as electricity and gas.
28.Contingencies
The group is confronted with a number of claims or potential claims and disputes, which are a
consequence of the daily operational activities. To the extent such claims and disputes are such that it is
probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and when a reliable estimate can be made of the amount of the obligation, suitable provisions
have been made.
It is the group’s policy to recognize environmental provisions in the balance sheet, when the group has a
present obligation (legal or constructive) as a result of a past event, when it is probable that an outflow
of resources embodying economic benefits will be required to settle the obligation and when a reliable
estimate can be made of the amount of the obligation.
These provisions are reviewed periodically and adjusted, if necessary, as assessments and work proceeds
and additional information becomes available. Environmental liabilities can change substantially due to
the emergence of additional information on the nature or extent of the contamination, a change in
legislation or other factors of a similar nature.
As stated in note 24 - Provisions, the environmental provisions in accordance with the above policies
aggregated to 113.4 million EUR at December 31, 2021 (December 31, 2020: 119.7 million EUR).
While it is not feasible to predict the outcome of all pending environmental exposures, it cannot be
excluded that there will be a need for future provisions for environmental costs. In management’s opinion,
based on information currently available, such provisions would not have a material effect on the group’s
financial position, taking into account the current financial structure of the group. However it cannot be
excluded that such provisions could have a material impact on the income statement of a specific
accounting period.
Acquisition, investment and joint-venture agreements as well as divestments may contain habitual
provisions leading to price adjustments. In addition, for divestments, proper consideration has been given
to provisions for possible indemnifications payable to the acquirer, if any, including matters in the area of
health, environment, tax, product liability, restructuring, competition, pensions and share incentives.
Tessenderlo Group 2021 annual report | 181
Based on information currently available, the possibility of any significant cash outflow is considered to
be remote.
Some plants of the group need to comply with the European regulations to cover operational emissions
for products exposed to carbon leakage. In a case of a deficit, additional emission allowances will be
purchased. The cost of additional emission allowances purchased during 2021 was insignificant. The
surplus or deficit of emission allowances over the next year may vary, depending on several factors such
as future production volumes, process optimizations and energy efficiency improvements. The carrying
amount of emission allowances included in intangible assets amounts to 2.1 million EUR as per December
31, 2021 (2020: 3.2 million EUR).
29.Related parties
The company has a related party relationship with its subsidiaries, joint-ventures and with its controlling
shareholder (Verbrugge nv, controlled by Picanol nv, and its affiliated company Symphony Mills), directors
and its Executive Committee. The Belgian pension fund “OFP Pensioenfonds”, which covers the post-
employment benefit obligation of the employees of Tessenderlo Group nv and Tessenderlo Chemie
International nv, is also considered to be a related party.
As per last transparency notification, received on January 27, 2022, Verbrugge nv, controlled by Picanol
nv, is holding 21,860,003 shares (50.7% of the company) and its affiliated company Symphony Mills nv is
holding 2,607,200 shares (6.0%). Picanol Group is a listed Belgian industrial company and specialized in
the development, production and sale of weaving machines, engineered casting solutions and custom-
made controllers. Picanol Group fully consolidates Tessenderlo Group nv as from January 1, 2019. Picanol
Group is represented in the Board of Directors through two members: Mr. Stefaan Haspeslagh (Chairman
Picanol Group) and Mr. Luc Tack (Managing Director Picanol Group).
In accordance with article 7:53 of the Belgian Code of Companies and Associations, the extraordinary
meeting of shareholders of July 10, 2019 has decided to introduce a loyalty voting right for each fully paid-
up share that has continuously been registered in the share register on the name of the same shareholder
for at least two years. As per December 31, 2021 Verbrugge nv was holding 38,533,061 voting rights
(61.0% of the total voting rights), while Symphony Mills nv was holding 4,346,200 voting rights (6.9 % of
the total voting rights). As per last transparency notification, received on January 27, 2022, Verbrugge nv
was holding 39,817,365 voting rights (63.1% of the total voting rights), while Symphony Mills nv was
holding 4,421,200 voting rights (7.0 % of the total voting rights).
The group purchased and sold goods and services to various related parties in which the group holds a
50% or less equity interest (note 14 - Investments accounted for using the equity method). Such
transactions were conducted at terms comparable to transactions with third parties.
Premiums for an amount of 1.8 million EUR were paid to the Belgian pension fund, “OFP Pensioenfonds”
(2020: 1.7 million EUR). Liabilities related to employee benefit schemes as per December 31, 2021 include
8.1 million EUR related to the “OFP Pensioenfonds” (2020: 13.1 million EUR).
Transactions only have taken place with the main shareholder, joint-ventures, the members of the
Executive Committee and the Board of Directors.
Tessenderlo Group 2021 annual report | 182
Transactions with the main shareholder:
The 2021 transactions mainly relate to legal, internal audit, and ICT services which are provided by the
group through a service level agreement to the main shareholder. These are not considered to be
significant.
Transactions with joint-ventures
10
:
(Million EUR)
2021
2020
Transactions with joint-ventures - Sales
-
0.8
Transactions with joint-ventures - Purchases
-33.9
-19.0
Non-current assets
9.2
9.9
Current assets
1.0
0.7
Current liabilities
4.0
4.0
The higher amount of purchases with joint-ventures (33.9 million EUR in 2021 compared to 19.0 million
EUR in 2020) can be explained by an increase of volumes, combined with higher purchase prices.
Tessenderlo Kerley Inc. has granted a 11.0 million USD loan to the joint-venture Jupiter Sulphur LLC, which
was fully drawn in the period over 2017 and 2018, and which remains outstanding for 10.4 million USD
(9.2 million EUR). Jupiter Sulphur LLC obtained the same amount from the other joint-venture partner.
The loan is interest bearing (3.0%) and was originally reimbursable to Tessenderlo Kerley, Inc. in the period
2020-2023. In 2020, the duration of the loan was extended till December 2026 at the latest, whereby the
cash needs in Jupiter Sulphur LLC will be taken into account. The granted loan is included in “Other
investments” in the group’s consolidated statement of financial position. The related interest income is
considered to be insignificant and is not eliminated.
Transactions with the members of the Executive Committee
11
:
(Million EUR)
2021
2020
Short-term employee benefits
5.4
2.5
Post-employment benefits
0.2
0.1
Total
5.6
2.6
Short-term employee benefits include salaries and accrued bonuses over 2021 (including social security
contributions), car leases and other allowances where applicable.
The short-term employee benefits include 1.3 million EUR fix and 4.1 million EUR variable employee
benefits (2020: 1.4 million EUR and 1.1 million EUR respectively). The variable employee benefits consist
of 1.3 million EUR short term variable compensation (2020: 1.1 million EUR), while the long-term variable
compensation amounts to 2.9 million EUR (2020: nil), both are payable within 12 months after the end of
the period.
The post-employment benefits include the periodic pension costs of the pension plan, calculated by an
actuary.
10
We refer to note 14 - Investments accounted for using the equity method for more information on the group’s joint-ventures.
11
As per December 31, 2021, the Executive Committee consists of Luc Tack (CEO) and Stefaan Haspeslagh (COO/CFO) and did not change
compared to last year.
Tessenderlo Group 2021 annual report | 183
There was no new emission of warrants in 2021 and no warrants were exercised by members of the
Executive Committee during 2021.
Starting in 2021, Tessenderlo Kerley, Inc. rents office space of the Phoenix (United States) headquarters
building to Talalay Global (United States), a company owned by Luc Tack. The contract, which is
insignificant, was concluded at arm’s length conditions and was approved by the Board of Directors.
No transactions, except for those mentioned above, have occurred with the members of the Executive
Committee.
Transactions with the members of the Board of Directors:
Members
Remuneration in EUR
2021
2020
Philium bvba, represented by its
permanent representative Mr. Phillippe
Coens (independent non-executive director
until 11/05/2021)
Fixed annual fee
9,870
25,000
Additional fixed fee for chairman of Audit Committee
1,077
3,000
Variable fee per half day attended
2,000
12,000
Total remuneration
12,947
40,000
Management Deprez bvba, represented by
its permanent representative Ms. Veerle
Deprez (independent non-executive
director). Member of the Board of Directors
since June 6, 2017
Fixed annual fee
27,500
25,000
Variable fee per half day attended
9,000
12,000
Total remuneration
36,500
37,000
ANBA bvba, represented by its
permanent representative Ms.
Anne-Marie Baeyaert (independent non-
executive director). Member of the
Board of Directors since June 6, 2017
Fixed annual fee
27,500
25,000
Additional fixed fee for chairman of Audit Committee
1,923
-
Variable fee per half day attended
9,000
12,000
Total remuneration
38,423
37,000
Stefaan Haspeslagh (executive director)
Fixed annual fee
27,500
25,000
Additional fixed fee for chairman of Board of Directors
72,500
30,000
Variable fee per half day attended
9,000
12,000
Total remuneration
109,000
67,000
Luc Tack (executive director)
Fixed annual fee
27,500
25,000
Variable fee per half day attended
9,000
12,000
Total remuneration
36,500
37,000
Karel Vinck (non-executive director)
Fixed annual fee
27,500
25,000
Variable fee per half day attended
9,000
12,000
Total remuneration
36,500
37,000
Wouter De Geest (independent non-
executive director as from 11/05/2021
onwards)
Fixed annual fee
17,630
-
Variable fee per half day attended
7,000
-
Total remuneration
24,630
-
Total
294,500
255,000
Tessenderlo Group 2021 annual report | 184
30.Auditor’s fee
KPMG Réviseurs d'Entreprises/Bedrijfsrevisoren BV/SRL represented by Patrick De Schutter was
appointed as group statutory auditor by the shareholders meeting of the company on May 14, 2019,
following an audit tender.
The fees paid by the group to its auditor amounted to:
(Million EUR)
2021
Audit
Audit related
Other
Total
KPMG (Belgium)
0.2
-
0.0
0.2
KPMG (Outside Belgium)
0.6
-
0.1
0.7
Total
0.9
0.0
0.1
0.9
(Million EUR)
2020
Audit
Audit related
Other
Total
KPMG (Belgium)
0.2
0.0
0.0
0.3
KPMG (Outside Belgium)
0.7
-
0.0
0.7
Total
0.9
0.0
0.1
1.0
Tessenderlo Group 2021 annual report | 185
31.Subsequent events
• In February 2022, Tessenderlo Group announced that it intends to acquire the production plant and
the associated business of Pipelife France in Gaillon (Eure, France). The Gaillon plant specializes in the
manufacturing of pipes for gas, water, and cable protection. The transaction is expected to reach
completion in the course of 2022. After completion of the acquisition, Tessenderlo Group intends to
integrate the business within the DYKA Group business unit (Industrial Solutions segment). This
transaction will not materially impact the results of Tessenderlo Group.
• The group also announced that its growth unit Violleau plans to construct a new production line for
organic fertilizers in Vénérolles (Aisne, France). The new line will focus on the production of organic
pellets, responding to the rising demand for organic fertilizers. It is scheduled to be operational from
the first quarter of 2023 and it will be constructed on the site of Akiolis’ manufacturing plant in
Vénérolles. With effect from 2022, Violleau will be included in the Agro segment.
• In February 2022, Tessenderlo Group repurchased 35.0 million EUR of its outstanding 2022 bonds at
a price of 102.875%. This repurchase resulted in a cash-out of 36.0 million EUR and the remaining
amount of outstanding “2022 bonds” maturing in July 2022 stands at 130.5 million EUR. Also in
February 2022, the group agreed two term loan credit facilities for 30.0 million EUR each, with a
maturity of 7 years (starting April 2022) and a maturity of 5 years (starting August 2022) respectively.
These loans, with quarterly capital reimbursements, have a fixed interest rate of 1.16% and 0.94%
respectively, and contain no financial covenants. Both transactions will further reduce the liquidity
risk as well as the interest costs of the group.
• In early March 2022, Tessenderlo Group submitted a new permit application to the Flemish Region
for the construction of a new 900 MW combined cycle steam and gas turbine (CCGT) power plant in
Tessenderlo, Belgium. With a view to future auctions, Tessenderlo Group adjusted its previously
submitted project (an investment of approximately 500 million EUR) to respond to the objections that
led to the refusal of that application.
• The current conflict in Eastern Europe and the subsequent economic and financial sanctions imposed
are negatively affecting the supply and the cost prices of both raw materials and energy. In particular,
MOP (muriate of potash) is the key raw material used for the production of SOP (sulfate of potash)
fertilizers that are produced at Tessenderlo Kerley Ham (Belgium). Tessenderlo Group currently
sources MOP from Russia and Belarus, as well as some other countries. In this connection, the group
is in the process of reviewing its sourcing mix, and it is therefore currently not possible to determine
what the effect on the production would be, if any, although no significant impact is expected in the
first half of 2022. At present, it is also difficult to estimate the impact on the other activities of the
group.
Tessenderlo Group 2021 annual report | 186
32.Group companies
Listed below are all the group companies. The total number of consolidated companies is 60
12
.
List of the consolidated companies on December 31, 2021, accounted for by the full consolidation method:
Entity
Address
Belgian company
number
Ownership
Europe
Belgium
DYKA Plastics nv
3900 Pelt
0414467340
100%
Belgium
Limburgse Rubber Produkten nv
1050 Brussels
0415296392
100%
Belgium
Tessenderlo Chemie International nv
1050 Brussels
0407247372
100%
Belgium
Tessenderlo Group nv
1050 Brussels
0412101728
Parent company
Belgium
Tessenderlo Development Services nv
1050 Brussels
0724619989
100%
Belgium
T-Power Energy Services bv
1050 Brussels
0838489378
100%
Belgium
T-Power nv
1050 Brussels
0875650771
100%
Czech Republic
DYKA s.r.o.
27361 Velka Dobra
100%
France
Akiolis Group SAS
72100 Le Mans
100%
France
Atemax France SAS
72100 Le Mans
100%
France
DYKA SAS
62140 Sainte Austreberthe
100%
France
DYKA Tube SAS
18570 La Chapelle-Saint-Ursin
100%
France
DYKA Réseaux SAS
72100 Le Mans
100%
France
Etablissements Charvet Père et Fils
SAS
91490 Milly-La-Forêt
100%
France
Etablissements Violleau SAS
79380 La Forêt sur Sèvre
100%
France
Kuhlmann France SAS
59120 Loos
100%
France
Tefipar SAS
59120 Loos
100%
France
Tessenderlo Kerley France SAS
59120 Loos
100%
France
Tessenderlo Services SARL
59120 Loos
100%
France
SCI Les Violettes
79380 La Forêt sur Sèvre
100%
France
Soleval France SAS
72100 Le Mans
100%
Germany
BT Nyloplast GmbH
86551 Aichach
100%
Germany
PB Gelatins GmbH
31582 Nienburg
100%
Hungary
BT Nyloplast Kft
3636 Vadna
100%
Luxembourg
Terelux SA
2163 Luxembourg
100%
Poland
DYKA Sp.z.o.o.
55-221 Jelcz-Laskowice
100%
Romania
DYKA Plastic Pipe Systems S.R.L.
76100 Bucarest, sector 1
100%
Slovakia
DYKA SK s.r.o.
82109 Bratislava
100%
Switzerland
Kuhlmann Switzerland AG
5332 Rekingen
100%
The Netherlands
BT Nyloplast B.V.
3295 KG 's Gravendeel
100%
The Netherlands
DYKA B.V.
8331 LJ Steenwijk
100%
The Netherlands
Tessenderlo Kerley Netherlands B.V.
4825 AV Breda
100%
The Netherlands
Tessenderlo NL Holding B.V.
4825 AV Breda
100%
12
DYKA Réseaux SAS and Tessenderlo Kerley Netherlands B.V. are new created companies in 2021. Tessenderlo Kerley Australia PTY LTD was
liquidated in 2021. Names of Kuhlmann France SAS (before Produits Chimiques de Loos SAS) and Kuhlmann Switzerland AG (before Tessenderlo
Schweiz AG) have changed in 2021.
Tessenderlo Group 2021 annual report | 187
United Kingdom
DYKA UK Ltd.
Longtown-Carlisle Cumbria CA6 5LY
100%
United Kingdom
John Davidson Holdings Ltd.
Edinburgh EH3 8UL
100%
United Kingdom
John Davidson Pipes Ltd.
Edinburgh EH3 8UL
100%
United Kingdom
PB Gelatins UK Ltd.
Pontypridd CF 375 SQ
100%
United Kingdom
Tessenderlo Holding UK Ltd.
Pontypridd CF 375 SQ
100%
United States
US
Environmentally Clean Systems LLC
Dover, DE 19904
69.01%
US
ECS Myton, LLC
Dover, DE 19904
51.00%
US
Kerley Trading Inc.
Wilmington, DE 19801
100%
US
MPR Services Inc.
Wilmington, DE 19801
100%
US
PB Leiner USA Corporation
Davenport, Iowa 52806
100%
US
Tessenderlo Kerley Inc.
Dover, DE 19904
100%
US
Tessenderlo USA Inc.
Dover, DE 19904
100%
Rest of the world
Argentina
PB Leiner Argentina SA
Ciudad Autónoma de Buenos Aires
100%
Belarus
Tessenderlo Kerley Bela LLC
220036 Minsk
100%
Brazil
PB Brasil Industria e Comercio de
Gelatinas Ltda
Acorizal, Mato Grosso CEP 78480-000
100%
Chile
Kerley Latinoamericana
Comercializadora Limitada
9358 Santiago
100%
China
PB Gelatins (Heilongjiang) Co. Ltd.
Xinyi Village, Kongguo County, Nehe City, Qiqihaer City,
Heilongjiang Province
100%
Costa Rica
Tessenderlo Kerley Costa Rica SA
La Union Tres Rios - Cartago
100%
India
Tessenderlo Kerley India Private Ltd.
9the Floor, Regus I-Tech Business Centra,
Spaze Itech Park, A1-Tower, sector 49,
Gurgaon, Haryana, 122018, in the state of
Haryana
100%
Japan
TKI Japan KK
Tokyo - Chiyoda-ku
100%
Mexico
Tessenderlo Kerley Mexico SA de CV
Ciudad Obregon, Estado de Sonora
100%
Paraguay
Maramba S.R.L.
Chacoi Villa Hayes - Asuncion del Paraguay
100%
Peru
TKP Peru S.A.C.
Ciudad de Lima - Provincia de Lima
100%
Turkey
Tessenderlo Kerley Turkey Tarim Ve
Kimya Sanayi Ve. Tic. Ltd. STI
35730 Kemalpasa - Izmir
100%
List of the consolidated companies on December 31, 2021 accounted for by the equity method:
Europe
France
Etablissements Michel SAS
31800 Villeneuve de Rivière
50.00%
Rest of the world
China
PB Shengda (Zhejiang)
Biotechnology Co., Ltd
Zhoushan City, Zhejiang Province
50.00%
US
Jupiter Sulphur LLC
Wilmington, DE 19801
50.00%
Tessenderlo Group 2021 annual report | 188
33.Critical accounting estimates and judgements
The preparation of the financial statements in conformity with IFRS as adopted for use by the European
Union requires management to make judgments, estimates and assumptions that affect the application
of the accounting policies, the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Management bases its estimates on historical experience and
various other assumptions that are believed to be reasonable under the circumstances, the results of
which form the basis for making the reported amounts of revenue and expenses that may not be readily
apparent from other sources. Actual results could differ from those estimates.
Estimates and assumptions are reviewed periodically and the effects of revisions, if needed, are reflected
in the financial statements.
The areas of judgments, estimates and assumptions used in preparing the consolidated financial
statements as per December 31, 2021, are the same as those applied and disclosed in the consolidated
financial statements at December 31, 2020.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next year are addressed below:
• Impairments. The carrying amount of property, plant and equipment, goodwill and intangible
assets is reviewed at each balance sheet date to determine whether an indication of impairment
exits. If any such indication exists, the asset’s recoverable amount is estimated (note 11 - Property,
plant and equipment, note 12 - Goodwill and note 13 - Intangible assets).
• Leases. The company leases various items of Property, plant and equipment, mainly including real
estate and vehicles. Some leases contain extension options, allowing operational flexibility,
exercisable by the group. The group determines the lease term as the non-cancellable term of the
lease, together with any periods covered by an option to extend the lease if it is reasonably certain
to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably
certain not to be exercised. The group has applied judgement in evaluating whether it is
reasonably certain to exercise the option to renew. That is, the group considered all relevant
factors that create an economic incentive for it to exercise the renewal (note 11 - Property, plant
and equipment).
• Inventory obsolescence and lower of cost or net realizable value adjustments, which are
determined based on experience and the assessment of market circumstances (note 17 -
Inventories).
• Employee benefits. The calculation of defined benefit obligations is based on actuarial
assumptions such as future salary increases, inflation and through the use of a discount rate (note
23 - Employee benefits).
• Deferred taxes. Deferred tax assets are recognized only to the extent that it is probable that future
taxable profits will be available against which the deductible temporary differences, unused tax
losses and credits can be utilized. Deferred tax assets are reviewed at each reporting date and are
reduced to the extent that it is no longer probable that the related tax benefit will be realized. In
making its judgment, management takes into account the long term business strategy (note 15 -
Deferred tax assets and liabilities).
Tessenderlo Group 2021 annual report | 189
• Provisions and contingencies. The amounts recognized reflect management’s best estimate of the
expected expenditures required to settle the present obligation at balance sheet date. If the effect
is material, provisions are determined by discounting the expected future cash flows. Provisions
can change substantially due to the emergence of additional information on the nature or extent
of the contamination, a change in legislation, a change in best practices for sanitation, a change
in timing of cash outflows, a change in agreement with authorities on the treatment of the
polluted site or other factors of a similar nature (note 24 - Provisions).
• Financial instruments (note 26 - Financial instruments). These are measured at fair value in the
statement of financial position based on:
- inputs other than quoted prices that are observable for the asset or liability either directly
(i.e. as prices) or indirectly (i.e. derived from prices) or
- inputs for the asset or liability that are not based on observable market data.
Statement on the true and fair view of the consolidated financial
statements and the fair overview of the management report
Mr. Luc Tack (CEO) and Mr. Stefaan Haspeslagh, representative of Findar BV (COO/CFO), certify, on behalf
and for the account of the company, that, to his/their knowledge,
a) the consolidated financial statements which have been prepared in accordance with
International Financial Reporting Standards as adopted by the European Union, give a true
and fair view of the assets, liabilities, financial position, the income statement of the company,
the statement of comprehensive income, the statement of changes in equity and the
statement of cash flows, and the entities included in the consolidation as a whole,
b) the consolidated management report includes a fair overview of the development and
performance of the business and the position of the company, and the entities included in
the consolidation, together with a description of the principal risks and uncertainties which
they are exposed to.
Tessenderlo Group 2021 annual report | 190
Statutory auditor’s report
Statutory auditor’s report to the general meeting of Tessenderlo Group NV on the consolidated
financial statements as of and for the year ended December 31, 2021.
In the context of the statutory audit of the consolidated financial statements of Tessenderlo Group NV
(“the Company”) and its subsidiaries (jointly “the Group”), we provide you with our statutory auditor’s
report. This includes our report on the consolidated financial statements for the year ended 31 December
2021 as well as other legal and regulatory requirements. Our report is one and indivisible.
We were appointed as statutory auditor by the general meeting of 14 May 2019, in accordance with the
proposal of the board of directors issued on the recommendation of the audit committee and as
presented by the workers’ council. Our mandate will expire on the date of the general meeting
deliberating on the annual accounts for the year ended 31 December 2021. We have performed the
statutory audit of the consolidated financial statements of the Group for three consecutive financial years.
Report on the consolidated financial statements
Unqualified opinion
We have audited the consolidated financial statements of the Group as of and for the year ended 31
December 2021, prepared in accordance with International Financial Reporting Standards as adopted by
the European Union, and with the legal and regulatory requirements applicable in Belgium. These
consolidated financial statements comprise the consolidated statement of financial position as at 31
December 2021, the consolidated income statement, the consolidated statement of comprehensive
income, the consolidated statement of changes in equity and the consolidated statement of cash flows
for the year then ended and notes, comprising a summary of significant accounting policies and other
explanatory information. The total of the consolidated statement of financial position amounts to EUR
2.207,0 million and the consolidated income statement shows a profit for the year of EUR 188,3 million.
In our opinion, the consolidated financial statements give a true and fair view of the Group’s equity and
financial position as at 31 December 2021 and of its consolidated financial performance and its
consolidated cash flows for the year then ended in accordance with International Financial Reporting
Standards as adopted by the European Union, and with the legal and regulatory requirements applicable
in Belgium.
Basis for our unqualified opinion
We conducted our audit in accordance with International Standards on Auditing (“ISAs”) as adopted in
Belgium. In addition, we have applied the ISAs as issued by the IAASB and applicable for the current
accounting year while these have not been adopted in Belgium yet. Our responsibilities under those
standards are further described in the “Statutory auditors’ responsibility for the audit of the consolidated
financial statements” section of our report. We have complied with the ethical requirements that are
relevant to our audit of the consolidated financial statements in Belgium, including the independence
requirements.
We have obtained from the board of directors and the Company’s officials the explanations and
information necessary for performing our audit.
Tessenderlo Group 2021 annual report | 191
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in the
context of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
Impairment of property, plant and equipment, goodwill and intangible assets
We refer to Notes 11, 12 and 13 being respectively ‘Property, plant and equipment’, ‘Goodwill’ and
’Intangible assets’ of the consolidated financial statements.
— Description
Property plant and equipment, goodwill and intangible assets amount to EUR 1.028,1 million as at 31
December 2021 and represent 46,6 % of the Group’s total assets as at 31 December 2021.
The Group evaluates on an annual basis the need for impairment for property plant and equipment
(‘PPE’), goodwill and intangible assets. For goodwill, and in case of impairment triggers for PPE and
intangible assets, this assessment is performed for each smallest group of assets that generate largely
independent cash flows (the cash generating unit or ‘CGU’). Per CGU, Management determines the value-
in-use, which is calculated by discounting future cash flow projections, in order to assess whether an
impairment at the reporting date is to be recognized.
Impairment of PPE, goodwill and intangible assets is identified as a key audit matter due its significance
to the balance sheet total (46,6%) and the level of judgement required by Management, which principally
related to the inputs used in both forecasting and discounting future cash flows to determine the value-
in-use.
— Our audit procedures
Our audit procedures included:
- Challenging Management’s assessment of potential indicators of impairment based on our own
expectations developed from our knowledge of the Group and our understanding of internal and
external factors relevant to the Group;
- Challenging Management’s identification of CGUs with reference to our understanding of the
Group’s business and the requirements of the prevailing accounting standards;
- Evaluating the process by which Management’s cash flow forecasts were prepared, including
testing the underlying calculations and reconciling them to the latest board of directors approved
financial targets;
- Analyzing the Group’s previous ability to forecast cash flows accurately by comparing key
assumptions to historical results. We also challenged key inputs and data used to develop the
forecasted cash flows based on our knowledge of the business;
- Assessing the appropriateness of the Group’s valuation methodology and its determination of
discount rates and other key assumptions by involving our own valuation specialists;
- Testing the mathematical accuracy of the discounted cash flow models;
Tessenderlo Group 2021 annual report | 192
- Performing sensitivity analyses around the key assumptions used for the determination and
discounting of cash flow forecasts, in particular EBIT, weighted average cost of capital and growth
rates used by the Group
- Assessing whether the conditions required by International Financial Reporting Standards as
adopted by the European Union for the use of the most recent detailed calculation made in a
preceding period of the value-in-use of a cash-generating unit in the current period are met (i.e.
paragraph 99 of IAS 36 Impairment of Assets);
- Verifying the appropriateness of the Group’s disclosures in respect of impairment of PPE, goodwill
and intangible assets as included in respectively Note 11, 12 and 13 to the consolidated financial
statements.
Post-employment benefit provisions
We refer to Note 23 section ‘Employee benefits’ of the consolidated financial statements.
— Description
The Group provides retirement benefits predominantly in Belgium, Germany and the UK. Retirement
benefits are organized through defined contributions plans as well as defined benefit plans. As described
in Note 23, the Group sponsors defined benefit pension plans in Belgium, Germany and the UK and
defined contribution plans in Belgium.
Post – employment benefits are considered as a key audit matter due to the complexity and judgment
involved in determining the key assumptions used in the determination of the Group’s obligations as well
as the assumptions used in determining the fair value of the plan assets. In addition, changes in
assumptions and estimates used to value the Group’s net post-employment benefit liability would have a
significant effect on the Group’s financial position.
— Our audit procedures
- Obtaining an understanding of the Group’s valuation process;
- Evaluating the competence, objectivity and capabilities of the external actuarial experts engaged
by Management;
- Challenging Management’s key actuarial assumptions, being the discount rates, inflation rates,
mortality expectations, future salary increases and personnel turnover underlying the valuation
of the Group’s post-employment benefit obligations with the assistance of our actuarial
specialists. This includes a comparison of key assumptions used against externally derived data;
- Reconciling, with the assistance of our own financial instrument specialist, the fair value of the
plan assets with direct external confirmations and verifying the correctness of the fair value of the
plan assets, most of which are Level 1 fair values;
- Assessing the overall reasonableness of the valuation outcome;
- Verifying the appropriateness of the Group’s disclosures in respect of employee benefits, which
are included in Note 23 to the consolidated financial statements.
Tessenderlo Group 2021 annual report | 193
Board of directors’ responsibilities for the preparation of the consolidated financial statements
The board of directors is responsible for the preparation of these consolidated financial statements that
give a true and fair view in accordance with International Financial Reporting Standards as adopted by the
European Union, and with the legal and regulatory requirements applicable in Belgium, and for such
internal control as board of directors determines, is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the board of directors is responsible for assessing the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the board of directors either intends to liquidate
the Group or to cease operations, or has no realistic alternative but to do so.
Statutory auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance as to whether the consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of the users taken on
the basis of these consolidated financial statements.
When performing our audit we comply with the legal, regulatory and professional requirements
applicable to audits of the consolidated financial statements in Belgium. The scope of the statutory audit
of the consolidated financial statements does not extend to providing assurance on the future viability of
the Group nor on the efficiency or effectivity of how the board of directors has conducted or will conduct
the business of the Group. Our responsibilities regarding the going concern basis of accounting applied by
the board of directors are described below.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional
skepticism throughout the audit. We also perform the following procedures:
- Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or
the override of internal control;
- Obtain an understanding of internal controls relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control;
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by board of directors;
Tessenderlo Group 2021 annual report | 194
- Conclude on the appropriateness of board of directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Group’s ability to continue
as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditors’ report to the related disclosures in the consolidated financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditors’ report. However, future
events or conditions may cause the Group to cease to continue as a going concern;
- Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves fair presentation;
- Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group audit.
We remain solely responsible for our audit opinion.
We communicate with the audit committee regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the audit committee with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
For the matters communicated with the audit committee, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter.
Other legal and regulatory requirements
Responsibilities of the Board of directors
The board of directors is responsible for the preparation and the content of the board of directors’ annual
report on the consolidated financial statements, the statement of the non-financial information attached
to the board of directors’ annual report on the consolidated financial statements and the other
information included in the annual report.
Statutory auditor’s responsibilities
In the context of our engagement and in accordance with the Belgian standard which is complementary
to the International Standards on Auditing as applicable in Belgium, our responsibility is to verify, in all
material respects, the board of directors’ annual report on the consolidated financial statements, the
statement of the non-financial information attached to the board of directors’ annual report on the
consolidated financial statements and the other information included in the annual report, and to report
on these matters.
Tessenderlo Group 2021 annual report | 195
Aspects concerning the board of directors’ annual report on the consolidated financial statements and
other information included in the annual report
Based on specific work performed on the board of directors’ annual report on the consolidated financial
statements, we are of the opinion that this report is consistent with the consolidated financial statements
for the same period and has been prepared in accordance with article 3:32 of the Companies’ and
Associations’ Code.
In the context of our audit of the consolidated financial statements, we are also responsible for
considering, in particular based on the knowledge gained throughout the audit, whether the board of
directors’ annual report on the consolidated financial statements and other information included in the
annual report:
- Activity report 2021
- Management report 2021
contain material misstatements, or information that is incorrectly stated or misleading. In the context of
the procedures carried out, we did not identify any material misstatements that we have to report to you.
The non-financial information required by article 3:32 §2 of the Companies’ and Associations’ Code has
been included in a separate report referred to as the “Sustainability report” included in section three of
the annual report. This report on the non-financial information contains the information required by
article 3:32 §2 of the Companies’ and Associations’ Code and is consistent with the consolidated financial
statements for the same period. The Company has prepared this non-financial information based on
Global Reporting Initiative (GRI) framework. In accordance with art 3:80 §1, 1st paragraph, 5° of the
Companies’ and Associations’ Code, we do not comment on whether this non-financial information has
been prepared in accordance with the GRI framework mentioned in the “Sustainability Report” as
included in the annual report.
Information about the independence
- Our audit firm and our network have not performed any engagement which is incompatible with
the statutory audit of the consolidated accounts and our audit firm remained independent of the
Group during the term of our mandate.
- The fees for the additional engagements which are compatible with the statutory audit referred
to in article 3:65 of the Companies’ and Associations’ Code were correctly stated and disclosed in
the notes to the consolidated financial statements.
European Single Electronic Format (ESEF)
In accordance with the draft standard on the audit of compliance of the Financial Statements with the
European Single Electronic Format (hereafter “ESEF”), we have audited as well whether the ESEF-format
is in accordance with the regulatory technical standards as laid down in the EU Delegated Regulation nr.
2019/815 of 17 December 2018 (hereafter “Delegated Regulation”).
The Board of Directors is responsible for the preparation, in accordance with the ESEF requirements, of
the consolidated financial statements in the form of an electronic file in ESEF format (hereafter “digital
consolidated financial statements”) included in the annual financial report.
Tessenderlo Group 2021 annual report | 196
It is our responsibility to obtain sufficient and appropriate information to conclude whether the format
and the tagging of the digital consolidated financial statements comply, in all material respects, with the
ESEF requirements under the Delegated Regulation.
In our opinion, based on our work performed, the format of and the tagging of information in the official
Dutch version of the digital consolidated financial statements as per 31 December 2021, included in the
annual financial report of Tessenderlo Group NV are, in all material respects, prepared in compliance with
the ESEF requirements under the Delegated Regulation.
Other aspect
This report is consistent with our additional report to the audit committee on the basis of Article 11 of
Regulation (EU) No 537/2014.
Zaventem, 24 March 2022
KPMG Bedrijfsrevisoren - Réviseurs d’Entreprises
Statutory Auditor
represented by
Patrick De Schutter
Bedrijfsrevisor / Réviseur d’Entreprises
Tessenderlo Group 2021 annual report | 197
Statutory financial report
Balance sheet of Tessenderlo Group nv
(Million EUR)
2021
2020
Total assets
Non-current assets
791.3
1,061.4
Intangible assets
0.2
0.2
Property, plant and equipment
116.3
119.4
Financial assets
674.9
941.8
Current assets
1,004.9
533.4
Non-current trade and other receivables
0.7
0.7
Inventories
122.1
94.4
Current trade and other receivables
582.7
223.9
Other investments
158.1
169.7
Cash and cash equivalents
134.7
37.2
Prepaid expenses and accrued income
6.6
7.5
Total assets
1,796.2
1,594.8
Total liabilities
Shareholders' equity
979.3
926.8
Issued capital
216.2
216.2
Share premium
238.0
238.0
Reserves
29.7
28.9
Retained earnings
494.8
442.9
Capital grants
0.6
0.7
Provisions and deferred taxes
118.5
117.0
Provisions
118.5
117.0
Deferred taxes
-
-
Liabilities
698.4
551.0
Liabilities due in more than one year
74.4
266.3
Liabilities due within one year
610.7
270.9
Accrued expenses and deferred income
13.4
13.8
Total liabilities
1,796.2
1,594.8
Tessenderlo Group 2021 annual report | 198
Profit and loss statement of Tessenderlo Group nv
(Million EUR)
2021
2020
Total operating income
575.9
424.7
Sales
482.6
372.1
Change in work in progress, finished goods and orders in progress (increase+/decrease-)
3.0
0.9
Production capitalized
1.2
1.4
Other operating income
88.3
46.0
Non-recurring operating income
0.8
4.3
Total operating charges
-583.0
-429.6
Raw materials and goods purchased for resale
-284.9
-194.5
Services and other goods
-191.7
-144.7
Wages, salaries, social charges and pensions
-75.4
-72.5
Depreciations and amortizations on formation expenses, tangible and intangible assets
-14.8
-12.7
Amounts written-off stocks and trade receivable ( charges (-) / write-back (+) )
-1.0
-0.4
Provision for liabilities and charges (utilisations and write-backs less charges)
-1.5
1.6
Other operating charges
-13.6
-6.0
Non-recurring operating charges
-0.1
-0.3
Operating result
-7.1
-4.9
Finance income
90.8
52.8
Finance costs
-28.9
-80.7
Profit before taxes
54.9
-32.7
Income taxes
-2.2
-0.1
Deferred taxes
-
0.2
Profit (+) / losses (-)
52.7
-32.7
Untaxed reserves
-0.8
0.2
Profit (+) / losses (-) for the year to be allocated
51.9
-32.4
Allocations and distributions
(Million EUR)
2021
2020
The Tessenderlo Group nv Board of Directors proposes to allocate the
- Profits, being
51.9
-32.4
- Increased by prior years' retained earnings
442.9
479.6
Totaling
494.8
447.2
In the following manner:
- Reserves
-
-4.2
- Dividends
-
-
- Retained earnings
494.8
442.9
Totaling
494.8
442.9
Tessenderlo Group 2021 annual report | 199
Extract from the Tessenderlo Group nv separate (non-consolidated) financial
statements prepared in accordance with Belgian GAAP
The preceding information is extracted from the separate Belgian GAAP financial statements of
Tessenderlo Group nv. These separate financial statements, together with the management report of the
Board of Directors to the general assembly of shareholders as well as the auditors' report, will be filed
with the National Bank of Belgium within the legally foreseen time limits. These documents are also
available on request at Tessenderlo Group nv, Troonstraat 130, 1050 Brussel.
It should be noted that only the consolidated financial statements present a true and fair view of the
financial position and performance of the group.
Since Tessenderlo Group nv is also a holding company, which recognizes its investments at cost in its non-
consolidated financial statements, these separate financial statements present no more than a limited
view of the financial position of Tessenderlo Group nv. For this reason, the Board of Directors deemed it
appropriate to publish only an abbreviated version of the non-consolidated balance sheet and income
statement prepared in accordance with Belgian GAAP as at, and for the year ended December 31, 2021.
The statutory auditor's report is unqualified and certifies that the non-consolidated financial statements
of Tessenderlo Group nv prepared in accordance with Belgian GAAP give a true and fair view of the
financial position as per December 31, 2021 and results of Tessenderlo Group nv for the year-ended
December 31, 2021 in accordance with all legal and regulatory dispositions.
Tessenderlo Group 2021 annual report | 200
Financial glossary
Adjusted EBIT
Earnings before interests, taxes and EBIT adjusting items.
Adjusted EBITDA
Earnings before interests, taxes and EBIT adjusting items plus depreciation and amortization.
Basic earnings per share (Basic EPS)
Profit (+)/loss (-) for the period attributable to equity holders of the company divided by the weighted
average number of ordinary shares outstanding during the period.
Capital employed (CE)
The carrying amount of property, plant and equipment (PP&E), intangible assets and goodwill together
with trade working capital.
Capital expenditure
Amount of money spent to upgrade, acquire or maintain property, plant and equipment (PP&E) and
intangible assets.
Dividend per share (gross)
Total amount paid as dividend divided by the number of shares issued at closing date.
Diluted earnings per share (Diluted EPS)
Profit (+)/loss (-) for the period attributable to equity holders of the company divided by the fully diluted
weighted average number of ordinary shares outstanding during the period.
Diluted weighted average number of ordinary shares
Weighted average number of ordinary shares, adjusted by the effect of warrants on issue.
EBIT
Profit(+)/loss(-) from operations.
EBIT adjusting items
EBIT adjusting items are those items that in management’s judgment need to be disclosed by virtue of
their size or incidence. Such items are disclosed in the notes to the financial statements. Transactions
which may be recognized as EBIT adjusting items are principally related to restructuring, impairment
losses, provisions, gains or losses on significant disposals of assets or subsidiaries and the effect of the
electricity purchase agreement.
Gearing
Net financial debt divided by the sum of net financial debt and equity attributable to equity holders of the
company.
Leverage
Net financial debt divided by Adjusted EBITDA over the last 12 months.
Tessenderlo Group 2021 annual report | 201
Market capitalization
Number of shares issued (at the end of the period) multiplied by the market price per share (at the end
of the period).
Net financial debt
Non-current and current loans and borrowings and bank overdrafts, minus cash and cash equivalents and
short term investments.
Other operating income and expenses
Other operating income and expenses include items which cannot be directly allocated to a line item of
the consolidated income statement based on their function and that in management’s judgement do not
need to be disclosed separately by virtue of their size or incidence. Transactions which may be recognized
as other operating income and expenses are mainly costs arising from research and development projects,
tax charges other than income taxes, such as withholding taxes and regional taxes, the recognition or
reversal of impairment losses on trade receivables, and several individually insignificant items within
several subsidiaries of the group.
Return on capital employed (ROCE)
Adjusted EBIT (last 12 months) divided by the average capital employed (last 12 months).
Theoretical aggregated weighted tax rate
Calculated by applying the statutory tax rate of each country on the profit before tax of each entity and
by dividing the resulting tax charge by the total profit before tax of the group.
Trade working capital
The sum of inventories and trade receivables minus trade payables.
Weighted average number of ordinary shares
Number of shares outstanding at the beginning of the period, adjusted by the number of shares cancelled,
repurchased or issued during the period multiplied by a time-weighting factor.
Tessenderlo Group 2021 annual report | 202
Alternative performance measures
The following alternative performance measures are considered to be relevant in order to compare the
results over the period 2020 - 2021 and can be reconciled to the consolidated financial statements as
follows:
Reconciliation from Adjusted EBIT to EBIT
(Million EUR)
Note
2021
2020
Adjusted EBIT
3
223.8
184.0
Gains and losses on disposals
6
2.8
4.8
Restructuring
6
-1.7
-0.5
Impairment losses
6
-1.9
-3.0
Provisions and claims
6
4.0
-5.0
Other income and expenses
6
-1.4
-4.3
EBIT (Profit (+) / loss (-) from operations)
225.7
175.9
Reconciliation from Adjusted EBITDA to EBIT
(Million EUR)
Note
2021
2020
Adjusted EBITDA
3
354.2
314.6
Gains and losses on disposals
6
2.8
4.8
Restructuring
6
-1.7
-0.5
Provisions and claims
6
4.0
-5.0
Other income and expenses
6
-1.4
-4.3
EBITDA
358.0
309.5
Depreciation and amortization
8
-130.4
-130.6
Impairment losses
8
-1.9
-3.0
EBIT (Profit (+) / loss (-) from operations)
225.7
175.9
Reconciliation gearing
(Million EUR)
Note
2021
2020
Non-current loans and borrowings
22
193.6
385.1
Bank overdrafts
22
0.1
0.0
Current loans and borrowings
22
211.4
66.2
Cash and cash equivalents
18/22
-320.3
-230.1
Short term investments
18/22
-10.0
-20.0
Net financial debt
22
74.8
201.3
Equity attributable to equity holders of the company
1,130.0
903.0
Gearing (net financial debt / (equity + net financial debt))
19
6.2%
18.2%
Tessenderlo Group 2021 annual report | 203
Reconciliation leverage
For the year ended December 31
(Million EUR)
Note
2021
2020
Non-current loans and borrowings
22
193.6
385.1
Bank overdrafts
22
0.1
0.0
Current loans and borrowings
22
211.4
66.2
Cash and cash equivalents
18/22
-320.3
-230.1
Short term investments
18/22
-10.0
-20.0
Net financial debt
22
74.8
201.3
Adjusted EBITDA
3
354.2
314.6
Leverage (net financial debt / Adjusted EBITDA last 12 months)
22
0.2
0.6
Reconciliation capital employed
As per December 31
(Million EUR)
Note
2021
2020
Inventories
17
393.4
332.1
Trade receivables - 1 year
16
335.9
241.4
Trade receivables - 1 year: amounts written off
16
-3.5
-4.0
Trade receivables from related parties
16
1.0
0.8
Trade payables -1 year
25
-243.9
-172.7
Trade payables from related parties
25
-4.0
-1.0
Trade working capital
479.0
396.7
Property, plant and equipment
11
886.6
862.2
Goodwill
12
32.3
33.4
Intangible assets
13
109.2
135.6
Net assets
1,028.0
1,031.2
Capital employed
1,507.0
1,427.9
Reconciliation return on capital employed (ROCE)
(Million EUR)
2021
2020
EBIT last 12 months
225.7
175.9
Average capital employed last 12 months
1,462.0
1,462.8
ROCE (return on capital employed)
15.4%
12.0%
Tessenderlo Group 2021 annual report | 204