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Picanol Group – 2021 annual report | 0
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Picanol Group – 2021 annual report | 1
TABLE OF CONTENTS
Company profile 2
ACTIVITY REPORT 2021 4
2021 highlights 5
Letter to the shareholders 8
Machines & Technologies segment 10
Picanol 11
Proferro 13
PsiControl 14
Agro segment 15
Crop Vitality 16
Tessenderlo Kerley International 17
NovaSource 19
Bio-valorization segment 20
PB Leiner 21
Akiolis 22
Industrial Solutions segment 24
DYKA Group 25
Kuhlmann Europe 26
Moleko 27
T-Power segment 28
T-Power 29
CORPORATE GOVERNANCE STATEMENT 2021 30
FINANCIAL REPORT 2021 46
Consolidated financial statements 47
Statement on the true and fair view of the consolidated financial 114
statement and the fair overview of the management report
Auditor's report 115
Statutory financial report 120
Financial glossary 123
Alternative performance measures 124
The statement of non-financial information is included in a separate sustainability report and this is published on the company’s website. This separate report constitutes
the declaration of non-financial information of the group and meets the requirements of art. 3:6, § 4, and art. 3:32, § 2, of the Companies Code.
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. Picanol 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 it in light of new information, future
events or otherwise. Picanol Group disclaims any liability for statements made or published by third parties (including any employees who are not explicitly mandated by
Picanol 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.
Picanol Group – 2021 annual report | 2
COMPANY PROFILE
agriculture, food, energy, water management, the efficient (re)use of natural resources and other industrial markets with
a focus on water. The group's products are used in a variety of applications, industrial and consumer markets.
Picanol Group has approximately 7,000 employees worldwide and is listed on Euronext Brussels (PIC) via Picanol nv.
Picanol Group was founded in 1936. Since 2013, Picanol Group has also had a reference interest in Tessenderlo Group
(Euronext: TESB), and since 2019, Tessenderlo Group has been fully consolidated in the results.
Picanol Group in 2021:
Consolidated turnover: 2,741.7 million EUR
Number of employees: 7,000
Euronext Brussels: PIC
Web: www.picanolgroup.com
Picanol Group – 2021 annual report | 3
Picanol Group's activities are divided into five business segments:
The segment Machines & Technologies
includes the activities Weaving Machines (Picanol), the foundry
and mechanical finishing (Proferro) and the development and
production of electronics (PsiControl).
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.
Picanol Group – 2021 annual report | 4
Activity report
2021
Picanol Group – 2021 annual report | 5
2021 HIGHLIGHTS
In September 2021, Proferro officially opened its new high-bay
warehouse, with Flemish Minister Hilde Crevits in attendance.
Standing at no less than 32 meters in height, the high-bay
warehouse is Proferro's new logistical heart
(Machines & Technologies segment).
Construction works at the new production facility in Rasnov
(Romania) were completed at the end of 2021 and some of the
production already started in January 2022. Transferring all
production to the new plant is planned to take place in the
third quarter of 2022 (Machines & Technologies segment).
In the fourth quarter of 2021, Picanol launched its customer
platform PicConnect. This is a new, fully digital platform
offering a wide range of features from industrial IoT to service-
related applications. In addition, Picanol introduced its latest
generation of airjet and rapier weaving machines, which have
been called the Connect generation. These new generation
weaving machines focus on connectivity and an increased level
of data availability (Machines & Technologies segment).
At the end of 2021, Picanol Group announced the construction
of a new head office for the Machines & Technologies segment
in its hometown of Ieper (Belgium). Construction work in Ieper
is planned to start in the second quarter of 2022, with the new
head office scheduled to open in 2024.
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 start
production in the third quarter of 2023.
Picanol Group – 2021 annual report | 6
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.
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 Solutions segments).
Picanol Group – 2021 annual report | 7
In December 2021, Tessenderlo Group agreed to acquire the
assets of B.V. Fleuren Tankopslag, a tank storage and
transshipment company for liquid products located in the Port
of Cuijk (the Netherlands). After completion of the acquisition,
the Fleuren Tankopslag operations will be integrated within the
Tessenderlo Kerley International business unit.
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).
After the balance sheet date:
▪ Following the launch of the new Connect generation weaving machines in 2021, Picanol introduced the
OmniPlus-i TC Connect in January 2022. This dedicated execution for the weaving of tire cord fabrics has now
been upgraded to the latest airjet technology and combined with the Connect generation features (Machines
& Technologies segment).
▪ 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 the 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, the 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), within the Agro segment. 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.
Picanol Group – 2021 annual report | 8
LETTER 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.
Picanol Group achieved a consolidated revenue of 2,741.7 million EUR in 2021 compared to 2,188.5 million EUR
in 2020, which represents an increase in revenue of +25%. The increase in revenue was achieved in each of our
five segments: Machines & Technologies +46%, Agro +29%, Industrial Solutions +21%, Bio-valorization +12%, and
T-Power +2%. The 2021 Adjusted EBITDA amounts to 430.3 million EUR, compared to 361.7 million EUR in 2020
(+19%). Picanol Group closed the 2021 financial year with a net profit of 160.7 million EUR compared to 55.4
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.
In 2021, Picanol launched PicConnect, which is a new digital platform in the Machines & Technologies segment.
In a world that is constantly evolving, and in which Industry 4.0 is one of the most influential evolutions, data is
becoming increasingly important for monitoring, optimizing, and managing machine performance and work
processes. PicConnect is the online, cloud-based platform for all of Picanol's digital applications, and it will be a
key link between Picanol and its customers. Picanol also announced a new generation of weaving machines in
2021, in which connectivity and increased data availability play a central role. The Connect generation of airjet
and rapier weaving machines not only provides the required data to Picanol customers but also includes many
new functionalities.
Proferro put its new, high-bay warehouse into operation last year. And PsiControl continued to build a new
production facility in Rasnov (Romania) during 2021, which is due to be commissioned in the spring of 2022.
In the Agro segment, 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. We will also continue 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 (the 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.
Picanol Group – 2021 annual report | 9
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.
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, Picanol Group continued to focus on the automation and robotization of our production sites, as well as
on product development, ensuring sustainability in all our activities, digitalization of our processes, increased
logistical efficiency, the debottlenecking of plants, the implementation of coordinated purchasing and sourcing
activities, profitable growth, and customer focus – in order to better serve the markets in which we operate.
These initiatives, combined with a constant focus on operational excellence, will allow us to lay a solid foundation
for the future development of the group.
At the end of 2021, we announced plans to build new headquarters for the Machines & Technologies segment
in our hometown of Ieper, thus anchoring the group in Ieper for the long term. The new head office is scheduled
to open in 2024.
Dividend
At the Annual General Meeting of Shareholders on May 16, 2022, the Board of Directors will propose that a
dividend of 0.2 EUR is paid for the 2021 financial year.
Outlook
The following are forward-looking statements. Actual results may vary considerably.
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 group is
faced with higher logistics, energy and raw materials costs, and this implies that our sales margin could come
under pressure during the coming months. Based on currently available information, the group expects that the
2022 Adjusted EBITDA will be lower than that of 2021. This guidance 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
Picanol 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.
Kind regards,
Luc Tack Stefaan Haspeslagh
CEO Chairman of the Board of Directors
Note: For some explanations on the financial statements of Picanol nv, please refer to page 120 of this annual report.
Picanol Group – 2021 annual report | 10
MACHINES & TECHNOLOGIES SEGMENT
Picanol Group's Machines & Technologies segment comprises the development, production and sale of high-tech
weaving machines (Picanol), foundry and mechanical finishing (Proferro), and electronics development and
production (PsiControl).
PRODUCTION
LOCATIONS
Belgium (1), Romania (1) and China (1). Sales offices for weaving machines, spare
parts and after-sales services in Brazil, China, India, Indonesia, Mexico, Turkey and
the USA.
CORE MARKETS
Machines and technology
AREA OF ACTIVITIES
▪ Development, production, sales and service of high-tech weaving machines (Picanol),
foundry and mechanical finishing (Proferro) and electronics development and
production (PsiControl).
▪
BUSINESS DRIVERS
▪ Rising demand for textiles due to a globally expanding middle class.
▪ Rising demand for complex cast iron parts.
▪ Rising demand for electronics due to digitalization of machines and processes.
▪ The development of technology and big data.
STRATEGIC FOCUS
Picanol:
▪ To further expand the product range of weaving machines and offer
applications for new market segments.
▪ To further strengthen (weaving) performance, the quality of our products and
services and to support our customers’ cost competitiveness.
Proferro:
▪ The 3-pillar strategy, casting-finishing-assembly.
PsiControl:
▪ Custom-made controllers for medium-sized series, and expertise in Electronic
Manufacturing Services (EMS).
KEY NUMBERS
Share of Adjusted EBITDA
Headcount (FTE)
2,220
17.7%
Picanol Group – 2021 annual report | 11
PICANOL
▪ Who are we?
Picanol (www.picanol.be) develops, manufactures and sells high-tech weaving machines featuring insertion
by means of airjet or rapier technology. Picanol supplies weaving machines to weaving mills in more than
100 countries worldwide, and also provides customers with products and services such as weaving frames,
training courses, upgrade kits, and spare parts. Picanol has been an international pioneer in the fields we
operate in for more than 85 years, and we are among the world's top weaving machine manufacturers.
Picanol supplies weaving machines for general textile applications, such as denim (jeans), shirt fabric,
toweling, and household & interior textiles. Picanol also supplies weaving machines for niche applications,
such as technical textiles for airbags, medical applications, parachutes, and tire cord.
In addition to our headquarters in Belgium (Ieper), Picanol has a production facility in China, Picanol (SIP)
Textile Machinery, coupled to our own worldwide service and sales network. The Picanol slogan, “Let's grow
together”, refers to our strong customer orientation, our focus on maximum performance, and our
continuous innovation of machines and components.
▪ Business in 2021
Following a strong fourth quarter in 2020, Picanol also had a strong start in 2021. Together with a general
market revival, the order book grew particularly quickly. Despite several increases in production capacity,
delivery lead times continued to increase, on the one hand, due to growing, worldwide, logistical, supply
chain problems (shortage of raw materials and components combined with congestion in international
freight transport), and on the other hand due to a tight, regional labor market.
As a result of the impact of the COVID-19 pandemic, Picanol was confronted with the global disruption of
supply chains, leading to major shortages of raw materials and components and a sharp increase in costs
(including transportation costs).
Most of the textile machinery trade fairs that Picanol would have physically attended during 2021 were
either cancelled or postponed. Of the larger fairs, only ITMA Asia + CITME took place, where Picanol
presented two new rapier machines for the first time: the GTMax-i 3.0S and GTMax-S. Furthermore, Picanol
was also present in 2021 at Techtextil North America in the United States, at Stitch & Tex Expo in Egypt, and
at GTex Textile Machinery Expo in Pakistan. The presence of our own local teams in the important textile
countries also made it possible, despite travel restrictions, to stay close to the customer on both sales and
service levels.
In a world that is constantly evolving, and with Industry 4.0 among the most influential developments, data
is becoming increasingly important for monitoring, optimizing, and managing machine performance and
work processes. Picanol will continue to set the standard, also in this area, and therefore it launched a new
digital platform, PicConnect, in 2021. PicConnect is the online, cloud-based platform for all of Picanol's digital
applications, and it will become a key link between Picanol and the customer.
Picanol also announced a new generation of weaving machines at the end of October, with connectivity and
increased data availability as core features. The airjet and rapier weaving machines of the Connect
generation not only provide the required data to Picanol customers but the new Picanol generation is also
Picanol Group – 2021 annual report | 12
the launch platform for numerous new functionalities. Both PicConnect and the new generation Connect
machines were presented during virtual launch shows.
Energy awareness is an integral part of our product design and development. “Smart performance”
combines energy efficiency and sustainability with maximum output performance. We start with sustainable
design and strive to deliver a sustainable product. Our continuous focus on reduced electricity and air
consumption and the introduction of PicConnect and other machine systems on the machines help us to
reduce the production of second choice textiles. All this ensures the production of quality products with a
smaller carbon footprint. “Sustainability inside” – applied in practice.
2021 also saw the continuation of Picanol’s investment in innovation and modernization of its production
sites, with work continuing at the Ieper plant, on our way to becoming the (manufacturing) company of and
for the future. In combination with further productivity and quality improvements, the Ieper site aims to
enhance its competitive position and offer customers a better competitive edge.
▪ Outlook for 2022
For the first half of 2022, Picanol expects an order book comparable to that of 2021, with the exception of
weaving machines produced in China. The clear slowdown in orders in China at the end of 2021 seems likely
to continue in the first few months of 2022.
In 2022, Picanol will continue to build on its technological leadership by further expanding its weaving
machine product range and providing applications for new market segments. The main challenge remains
the further improvement of (weaving) performance, product and service quality, and the cost
competitiveness of the customer – all to be engaged in the most sustainable way possible. At the same time,
previously launched initiatives around connectivity and digitization will continue, unabated. These
developments are all in line with our four development principles: Smart Performance, Sustainability Inside,
Driven by Data, and Intuitive Control.
We also plan three major trade fair participations, namely ITM (Istanbul, June 14 - 18, 2022), ITMA Asia +
CITME (Shanghai, November 20 - 24, 2022) and ITME (New Delhi, December 8 - 13, 2022), as well as a number
of smaller local and segment-specific exhibitions.
In terms of product development, sourcing, and assembly, Picanol will step up its efforts to further improve
both productivity and process efficiency, with the short-term focus mainly being on safeguarding the
logistical supply chain, in terms of both logistics and cost control, and further boosting production capacity
to meet market demand.
Picanol Group – 2021 annual report | 13
PROFERRO
▪ Who are we?
Proferro (www.proferro.be) performs all casting and mechanical finishing activities for Picanol Group.
Proferro offers engineered casting solutions for medium-sized series of 500 to 20,000 pieces, in a long-term
partnership context. The company produces parts in lamellar and nodular cast iron from 20 to 500 kg, with
box dimensions of 1600x1200x(2x400). The group offers a range of in-house mechanical finishing for the
production of both prototypes and series, utilizing very diverse technologies such as CNC milling, gear
cutting, grinding, and heat treatment.
Proferro supplies original equipment manufacturers worldwide, in various market segments such as
agricultural machinery, earthmoving machinery, compressors, textile machinery, and general mechanical
engineering. By combining casting, mechanical finishing, assembly, and co-design, Proferro can successfully
respond to the increasing demand for larger, more technically challenging, core-intensive parts.
▪ Business in 2021
The economic climate in most market segments, such as compressors, agro, etc., ensured a strong year for
Proferro, with high demand from both Picanol and external customers. However, Proferro also had to
withstand sharply rising raw material and energy prices in 2021. The focus was thus on high production
output, coupled with an emphasis on the safety and health of our employees.
In 2021, Proferro officially opened its new high-bay warehouse, with Flemish Minister Hilde Crevits in
attendance. Standing at no less than 32 meters in height, the high-bay warehouse is Proferro's new logistical
heart. Proferro also invested in a new induction hardening machine in 2021, and in various finishing
machines.
Proferro achieved a new milestone in the first half of 2021, with the production of its one-millionth molding
box on the HWS line. In the second half of the year, Proferro launched a new logo and visual identity, further
highlighting the company’s high-tech and innovative character.
▪ Outlook for 2022
Proferro is counting on very strong demand from the various market segments in 2022, both for weaving
machines and from external customers. High material prices combined with availability issues present a
challenge. Proferro will continue to invest in, among other things, additional cooling capacity, a deburring
robot, and a new lathe. In addition, the first AGVs will start operating with the introduction of the fully
automated, high-bay warehouse.
Picanol Group – 2021 annual report | 14
PSICONTROL
▪ Who are we?
With offices in Ieper (Belgium) and Rasnov (Romania), PsiControl (www.psicontrol.com) focuses on the
design, development, production, and support of custom-made controllers. PsiControl offers tailor-made
solutions based on real-time controllers. Our proprietary platforms reduce development time and enable
high-performance, price-friendly solutions.
PsiControl has research, development, and prototyping departments in Ieper and purchasing, production,
and service activities in both Ieper and Rasnov. PsiControl focuses mainly on industrial customers, for whom
reliability is crucial. Today it supplies various sectors, such as textile machinery, compressors, HVAC, and
fleet management.
▪ Business in 2021
With a well-filled order book, PsiControl had a good year, in which it was able to further leverage its business
in custom-made controllers for medium to large series and its expertise in Electronic Manufacturing Services
(EMS). At the same time, the company was confronted with the worldwide electronic component supply
shortage, which posed major challenges. Technologically, PsiControl focused mainly on HMI, touch systems,
and connectivity in 2021.
In late August 2021, PsiControl participated in the Caravan Salon in Düsseldorf. This is the largest
international caravan and camping trade fair. The significant development of the caravan sector brings with
it greater demand for connectivity and user-friendly touch controls, and this opens up many opportunities
for PsiControl.
PsiControl continued to build its new production facility in Rasnov, Romania, during 2021. The new plant will
be 10,000 m
2
in area and it will be commissioned in spring 2022.
▪ Outlook for 2022
The outlook for PsiControl is positive. Continuing scarcity in the supply of electronics products will continue
to pose challenges. The new production facility in Romania will be commissioned, in phases, in the first half
of 2022. This will lay the foundation for further growth opportunities.
Picanol Group – 2021 annual report | 15
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: 13 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
34.3%
Picanol Group – 2021 annual report | 16
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.
Picanol Group – 2021 annual report | 17
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.
▪ 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
Picanol Group – 2021 annual report | 18
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.
Picanol Group – 2021 annual report | 19
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, growing the business through acquisitions, and growing biorational 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.
Picanol Group – 2021 annual report | 20
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 & beauty, 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 & beauty, 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 & beauty (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
18.2%
Picanol Group – 2021 annual report | 21
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 our 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.
Picanol Group – 2021 annual report | 22
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) sector, 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.
Picanol Group – 2021 annual report | 23
▪ 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.
Picanol Group – 2021 annual report | 24
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
17.7%
Picanol Group – 2021 annual report | 25
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.
Picanol Group – 2021 annual report | 26
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.
Picanol Group – 2021 annual report | 27
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.
Picanol Group – 2021 annual report | 28
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 MARKET
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
12.1%
Picanol Group – 2021 annual report | 29
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.
Picanol Group – 2021 annual report | 30
CORPORATE GOVERNANCE STATEMENT 2021
TRANSPARENT MANAGEMENT
Picanol 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 www.picanolgroup.com.
CAPITAL & SHARES
CAPITAL
The capital of Picanol nv at December 31, 2021, amounts to 21,720,000 EUR.
SHARES
The share capital is represented by 17,700,000 shares without par value.
By decision of the extraordinary general meeting of shareholders of March 16, 2020, 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 Picanol nv’s shares are admitted for listing and trading on Euronext Brussels.
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:
# voting rights
%
Artela nv
22,960,492
68.5%
Symphony Mills nv
8,664,268
25.8%
Other registered shares
201,582
0.6%
Free float
1,704,892
5.1%
Total
33,531,234
100.0%
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 Picanol nv’s capital surpasses the threshold of 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
Picanol nv (corporatecommunication@picanol.be).
Picanol Group – 2021 annual report | 31
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 Picanol nv was as follows:
Start of initial term
End of term
Independent Non-Executive Directors
nv Kantoor Torrimmo,
represented by its permanent representative Mr.
Jean Pierre Dejaeghere
April 2010
May 2023
The Marble bv, represented by its permanent
representative Mr. Luc Van Nevel
April 2016
May 2023
7 Capital sprl, represented by its permanent
representative Mrs. Chantal De Vrieze
April 2017
May 2025
Ann Vereecke bv, represented by its permanent
representative Mrs. Ann Vereecke
April 2019
May 2024
Non-Executive Directors
Pasma nv, represented by its permanent
representative Mr. Patrick Steverlynck
December 2009
May 2024
Executive Directors
Mr. Luc Tack
July 2009
May 2024
Mr. Stefaan Haspeslagh – Chairman
April 2010
May 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 the opposite gender.
All meetings of the Board of Directors were attended by the Secretary of the Board of Directors.
The mandates held in listed companies (other than Picanol) by the non-executive directors are:
▪
Patrick Steverlynck: none
▪
Jean Pierre Dejaeghere: TINC Comm V.A.
▪
Luc Van Nevel: none
▪
Chantal De Vrieze: EVS, Colruyt
▪
Ann Vereecke: Ter Beke
ACTIVITIES
The Board of Directors convened according to a previously determined schedule. The Board of Directors met six (6) times
during 2021.
Picanol Group – 2021 annual report | 32
During 2021, the Board’s main areas of discussion, review and decision were:
▪
the group’s long-term strategy and budget;
▪
the financial statements and reports;
▪
proposals to the general and extraordinary shareholders’ meetings;
▪
the reports of the Audit Committee and the Nomination and Remuneration Committee;
▪
the approval of the proposal for the (re)appointment of directors;
▪
the remuneration policy and the remuneration of the members of the ExCom and the directors (the decision
not to grant any remuneration in shares of the company to the non-executive directors and the Excom for 2021
and the decision not to grant any minimum threshold of remuneration in the form of shares to the ExCom in
2021);
▪
the approval of various investment files;
▪
the discussion of the different measures taken related to cyber security;
▪
the follow-up of CSR topics such as environment and safety;
▪
the discussion on the impact of the supply chain disruption in 2021;
▪
the decision relating to the purchase of additional shares in Tessenderlo Group with application of art. 7:96 of
the ‘Belgian Code of Companies and Associations (BCCA);
▪
the decision on the acquisition of a minority share in Rieter Holding AG with application of art. 7:96 of the
‘Belgian Code of Companies and Associations (BCCA);
▪
the decision to provide a 20 million EUR credit loan to Saurer Technologies GmbH with application of art. 7:96
of the ‘Belgian Code of Companies and Associations (BCCA);
▪
transactions with related parties.
▪
…
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 1-3) 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. 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. In 2021 the Directors were invited to complete
a self-assessment questionnaire for the evaluation of the Board of Directors.
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
On December 31, 2021, the following Committees were active within the Board of Directors of Picanol 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.picanolgroup.com.
NOMINATION AND REMUNERATION COMMITTEE
On December 31, 2021, the Nomination and Remuneration Committee was constituted as follows:
▪
The Marble bv, represented by its permanent representative Mr. Luc Van Nevel (Chairman);
Picanol Group – 2021 annual report | 33
▪
nv Kantoor Torrimmo, represented by its permanent representative Mr. Jean Pierre Dejaeghere;
▪
7 Capital sprl, represented by its permanent representative Mrs. Chantal De Vrieze;
▪
Ann Vereecke bv, represented by its permanent representative Mrs. Ann Vereecke.
All members of the Nomination and Remuneration Committee meet 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 two (2) times in 2021.
▪
Activities of the Nomination and Remuneration Committee
In 2021, the Committee discussed the ExCom’s remuneration package and made recommendations in this regard. The
Committee also made recommendations with regard to the granting of remuneration in the form of shares to the Non-
Executive Directors and ExCom, the determination of a minimum threshold of shares to be held by the ExCom and the
determination of claw-back provisions in the agreements with the CEO and the CFO. The Nomination and Remuneration
Committee also prepared the remuneration report, as included in the annual report and discussed CSR topics relating to
our employees.
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”.
AUDIT COMMITTEE
At December 31, 2021, the Audit Committee was constituted as follows:
▪
nv Kantoor Torrimmo, represented by its permanent representative Mr. Jean Pierre Dejaeghere (Chairman);
▪
The Marble bv, represented by its permanent representative Mr. Luc Van Nevel;
▪
7 Capital sprl, represented by its permanent representative Mrs. Chantal De Vrieze;
▪
Ann Vereecke bv, represented by its permanent representative Mrs. Ann Vereecke.
The Audit Committee met according to a previously determined schedule; i.e. four (4) times during 2021.
The CEO, the CFO, the Internal Auditor, the statutory auditor and the corporate secretary 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 own training and by the experience
gathered during their previous functions. In compliance with the Charter, the majority of the members are independent
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 and
Compliance Management systems and the follow-up of cyber security within the Company and made recommendations
regarding the further follow-up of improvement actions. Further, the Audit Committee reviewed the status of the major
pending litigations.
Picanol Group – 2021 annual report | 34
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 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 Internal Control on its
various findings.
▪
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”.
Attendance rate for members of the Board of Directors meetings and members of the special committees meetings in
2021:
Board of Directors
Audit Committee
Nomination &
Remuneration
Committee
Number of meetings in 2021
6
4
2
nv Kantoor Torrimmo,
represented by its permanent representative Mr.
Jean Pierre Dejaeghere
6/6
4/4
2/2
The Marble bv, represented by its permanent
representative Mr. Luc Van Nevel
6/6
4/4
2/2
7 Capital sprl, represented by its permanent
representative Mrs. Chantal De Vrieze
6/6
4/4
2/2
Ann Vereecke bv, represented by its permanent
representative Mrs. Ann Vereecke
6/6
4/4
2/2
Pasma nv, represented by its permanent
representative Mr. Patrick Steverlynck
6/6
Mr. Luc Tack
6/6
Mr. Stefaan Haspeslagh
6/6
EXECUTIVE COMMITTEE (EXCOM)
ROLES AND RESPONSIBILITIES
As per December 31, 2021, the ExCom of Picanol Group was constituted as follows:
▪
Mr. Luc Tack (CEO);
▪
Mr. Stefaan Haspeslagh, representative of Findar BV (CFO).
The composition was unchanged from December 2020.
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.
Picanol Group – 2021 annual report | 35
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 bi-weekly 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.
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
compensation policies
1
;
▪
the main decisions and investments involving amounts under the thresholds as defined in the Corporate
Governance Charter;
▪
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 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.
REMUNERATION REPORT
The remuneration report provides an overview of how Picanol Group's remuneration philosophy and policies for
executive and non-executive directors are translated and how directors' remuneration is set taking into account
individual and company-related performance. The Nomination and Remuneration Committee oversees the
remuneration policies and related fees for executive and non-executive directors.
REMUNERATION DIRECTORS
Each Director receives a fixed annual fee of 17,500 EUR (unchanged from 2020). 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 are granted:
a)
an attendance fee of 2,000 EUR per half day attendance;
b)
an additional annual fee of 60,000 EUR for the Chairman of the Board of Directors.
Remuneration is paid during the year in which the meetings were held.
In its meeting on March 24, 2021, the Board of Directors decided not to grant any remuneration in shares of the company
to the non-executive directors for 2021.
For the year 2021, the company does not grant remuneration in the form of
shares to the non-executive directors given that it considers that a payment in shares does not have a positive impact
on decisions taken by these directors that support the long-term vision of the company, given the presence of a reference
shareholder aimed at the sustainable creation of value within the company.
1
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.
Picanol Group – 2021 annual report | 36
REMUNERATION RECEIVED
Member
2021
Earned fees (in EUR)
Mr. Stefaan Haspeslagh*
Fixed annual fee
Attendance fee
Additional fee as chairman
Total remuneration
45,000
21,000
132,500
198,500
Mr. Luc Tack*
Fixed annual fee
Attendance fee
Total remuneration
45,000
21,000
66,000
Pasma nv, represented by its permanent
representative Mr. Patrick Steverlynck
Fixed annual fee
Attendance fee
Total remuneration
17,500
12,000
29,500
nv Kantoor Torrimmo,
represented by its permanent representative
Mr. Jean Pierre Dejaeghere
Fixed annual fee
Attendance fee
Total remuneration
17,500
12,000
29,500
The Marble bv, represented by its
permanent representative Mr. Luc Van Nevel
Fixed annual fee
Attendance fee
Total remuneration
17,500
12,000
29,500
7 Capital sprl, represented by its permanent
representative Mrs. Chantal De Vrieze
Fixed annual fee
Attendance fee
Total remuneration
17,500
12,000
29,500
Ann Vereecke bv, represented by its
permanent representative Mrs. Ann
Vereecke
Fixed annual fee
Attendance fee
Total remuneration
17,500
12,000
29,500
GENERAL TOTAL
412,000
*include amounts paid in the Board of Picanol nv and Tessenderlo Group
REMUNERATION EXECUTIVE COMMITTEE (EXCOM)
The ExCom remuneration package, including the remuneration paid within Tessenderlo Group, 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.
Compensation of the 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.
Picanol Group – 2021 annual report | 37
Annual gross compensation earned by the ExCom
1
in 2021 is detailed below (including the compensation earned within
subsidiary Tessenderlo Group):
Component (amounts in EUR)
Amount CEO
Amount CFO/COO
Fixed Remuneration
Base salary
748,027
630,527
Pension
2
56,710
123,717
Variable Remuneration
Variable compensation Short Term
3
587,781
666,152
Variable compensation Long Term
4
1,530,964
1,360,857
Other benefits
5
43,614
26,103
TOTAL Remuneration
2,967,096
2,807,356
Proportion of fixed & variable remuneration
29% / 71%
28% / 72%
1
The ExCom is composed of the CEO (Luc Tack) and one executive Director (the COO-CFO), Stefaan Haspeslagh/Findar bv, represented by Stefaan Haspeslagh.
All amounts are excluding social security contributions and VAT.
2
Pension plan: annual service cost for 2021, as calculated by an actuary.
3
Short-term incentive realization as determined by the Nomination and Remuneration Committee of Tessenderlo Group.
4
Long-term incentive: no pay-out in 2021.
5
Other benefits: same conditions applicable to other members of senior management and the ruling approved by the Belgian tax authorities for representation allowance.
Agreements on severance pay
Within Tessenderlo Group, the management agreement with the COO-CFO provides for a notice period of maximum 12
months. The management agreement with the CEO does not provide for a notice period. The CEO will therefore not be
entitled to termination protection.
Claw-back provision
The agreements with the ExCom members within Tessenderlo Group contain an explicit "claw back provision" entitling
the company to reclaim variable remuneration paid on the basis of incorrect financial data in circumstances of financial
misconduct, fraud, deceit, non-competition and/or gross negligence. These claw-back provisions were not to be applied
in 2021.
Remuneration in the form of shares - Principle 7.9 of the Corporate Governance Code 2020
For the year 2021, the Company does not grant a minimum threshold of remuneration in shares to the ExCom. Only the
payment of the Long Term Incentive within Tessenderlo Group with respect to the years 2019, 2020 & 2021 will be paid
out in shares during the year 2022. The Company considers 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 at the sustainable creation of value within the company.
Evolution remuneration ExCom versus company results
Annual change %
2021
2020
2019 *
2018
2017
Excom:
Total remuneration ExCom**
2,882,631
2,697,218
2,340,888
1,549,166
1,539,662
Change YoY**
+6.9%
+15.2%
n/a
0.6%
7.6%
Company performance:
Revenue (change YoY)
+25%
-1%
n/a
-3%
+8%
Adjusted EBITDA (change YoY)
19%
29%
n/a
-14%
-1%
Remuneration employees:
Average FTE salary increase***
1.7%
1.7%
3.5%
2.0%
3.8%
* From 2019 onwards, Tessenderlo Group was consolidated within Picanol Group. In doing so, the composition of the ExCom and Adjusted EBITDA changed so the % change
between 2018 and 2019 is not relevant.
** Excludes variable long term compensation as this is only paid out every 3 years.
*** Average within the mother company Picanol nv.
Picanol Group – 2021 annual report | 38
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 of CEO versus Lowest Picanol NV Remunerated Employee
1/23
Shareholders’ approval
This Remuneration Report 2021 was approved by the Nomination and Remuneration Committee on March 23, 2022 and
approved by the Board of Directors on March 23, 2022. The 2021 Remuneration Report will be submitted for approval
to the Annual General Meeting of Shareholders on May 16, 2022. This Remuneration Report is also in line with the
proposed 2020 Remuneration Policy approved by the Annual General Meeting on May 17, 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.
The daily management of each Business Unit is accountable for the implementation and maintenance of a reliable
Internal Control System.
The Internal Audit department assists the Business Units and the 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.
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 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 Internal Auditor 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.
Picanol Group – 2021 annual report | 39
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.
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.
Every year a risk assessment exercise is performed by all business units. The identified risks are evaluated within the
various Business Units or general supporting services and are followed-up in order to implement risk optimization. The
status of these efforts is reported to the ExCom and to the Audit Committee on an annual basis.
RISK ANALYSIS
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 activities;
• Cyber security;
• Climate related risks;
• Compliance.
Ethics and Compliance
Risks can arise from potential failure to comply with the Code of Conduct of Picanol Group and the supporting internal
procedures, as well as from changes to and application of the laws and regulations in the various jurisdictions in which
Picanol Group operates. Picanol Group has a Code of Conduct that was revised in 2020 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, we will put increased focus on training worldwide on
the application of the Code of Conduct, on handling of confidential information and on compliance with competition
rules. In 2020, new procedures were launched regarding human- and labour rights and diversity and inclusion within
Picanol Group. We also developed a supplier a Supplier Code of Conduct and submitted it to all our suppliers.
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, Picanol Group has a strict safety policy in order
to protect the employees. It is the culture of the company to put safety in the workplace first and make each individual
responsible for it. Picanol Group is assisting with the necessary coaching, training and support.
Cyber security
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 cyber security within
the group. A major cyberattack could have a negative impact on the Company's operations and results. Therefore,
within Picanol Group, cyber defenses continue to improve to cope with the developments in cyberattacks.
Within the group, security risk management is carried out as follows:
▪ External experts carry out independent assessments of the risks. Based on this analysis, a plan is developed to
better protect the company against cyberattacks.
▪ End-user safety training remains mandatory for all employees. To increase employee awareness, cyber security
tips are published regularly.
Picanol Group – 2021 annual report | 40
▪ The company has acquired several ICT tools that allow us to increase the cyber security of the group's
systems.
▪ Picanol Group continues to improve its cyber security 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.
▪ Various procedures and guidelines have been developed regarding the use of the computer systems and
protecting cyber security, which were further rolled out in the group in 2021.
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 Picanol 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 Picanol Group product as well as the resulting litigation or the inappropriate use of some
Picanol Group products for applications and/or markets for which the product is not designed or not in accordance with
Picanol Group’s instructions for use. 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.
Volatility of certain raw materials
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, pig and beef
bones and hides for the gelatin production and different metals such as scrap metal, steel plate, cupper, ... in the
Machines & Technologies segment. 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. We consider that, in normal
circumstances and given the high inventory rotation, volatile raw material prices should have no material impact on the
carrying amounts of the applicable assets and liabilities. In 2021 however, the exceptionally strong increase in raw
material prices had a material impact on the group's results, mainly within the Machines & Technologies segment. The
increase in raw material prices in 2021 was unprecedented compared to previous years, which meant that the group was
unable to fully translate these price increases into its sales prices.
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, Picanol Group plays in a closed loop model by reusing and valorizing
different sources of raw materials. Picanol 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.
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 related to climate
change are increasing in frequency and severity, posing challenges with rising costs (energy, water and materials...) and
Picanol Group – 2021 annual report | 41
ultimately risks to our assets. This trend requires a more comprehensive approach to managing the risks relevant to the
changing environment in which the Company operates and that gives our stakeholders confidence in the Company's
sustainable growth and future.
To address this growing challenge and map the risks, in 2021 the Group selected a data and technology company with
strong modeling and scientific expertise in climate. This analysis will lead to key recommendations for a viable and
climate-adapted prevention plan in 2022.
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 COVID-19 outbreak, the Company has taken some specific health, travel and safety measures in
order to protect the employers 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 sites also developed continuity plans to avoid any disruption of the supply
chain due to the pandemic or any other crisis situation.
Risk related to the development of the economic and business cycle
The future results of segment Machines & Technologies are highly dependent on the evolution of the textile industry.
Unexpected changes in the economic climate, customers' investment cycles, important developments in production and
market acceptance of technologies may affect these industries and, consequently, the company's results.
The group is exposed to risks associated with growth economies
A substantial part of the activities of segment Machines & Technologies can be attributed to emerging markets in Asia
and South America. Picanol’s activities in these markets are subject to the usual risks associated with doing business in
developing economies, such as political and economic uncertainties, currency controls, exchange rate fluctuations and
shifts in government policy.
Analysis of the financial risks
For a more detailed overview of the financial risks related to the situation in 2021 and the Picanol Group policy regarding
the management of such risks, please see the Financial Instruments section in the Financial Report (note 26 – Financial
instruments).
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 Corporate
Governance 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. Mrs. Karen D’Hondt holds the title of Compliance Officer.
EXTERNAL AUDIT
KPMG Bedrijfsrevisoren BV, with Mr. Patrick De Schutter as authorized representative, has been appointed as statutory
auditor for Picanol Group since fiscal year 2018 (and re-appointed in 2021 for a term of 3 years) and for Tessenderlo
Group since fiscal year 2019.
Picanol Group – 2021 annual report | 42
(Million EUR)
2021
Audit
Audit related
Other
Total
KPMG (Belgium)
0.4
0.0
0.1
0.4
KPMG (Outside Belgium)
0.7
0.0
0.0
0.7
Total
1.1
0.0
0.1
1.1
(Million EUR)
2020
Audit
Audit related
Other
Total
KPMG (Belgium)
0.4
0.0
0.1
0.4
KPMG (Outside Belgium)
0.7
0.0
0.0
0.7
Total
1.1
0.0
0.1
1.1
SUBSEQUENT EVENTS
▪ Following the launch of the new Connect generation weaving machines in 2021, Picanol introduced the OmniPlus-i
TC Connect in January 2022. This dedicated execution for the weaving of tire cord fabrics has now been upgraded to
the latest airjet technology and combined with the Connect generation features.
▪ 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 the 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), within the Tessenderlo Group Agro segment. 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.
Picanol Group – 2021 annual report | 43
APPLICATION OF ART. 7:96 OF THE BELGIAN CODE OF COMPANIES AND ASSOCIATIONS (BCCA)
(PREVIOUSLY ART. 523 OF THE BELGIAN CODE OF COMPANIES)
At the board of directors meeting of March 13, 2021, Mr Luc Tack declared a conflict of interest regarding the joint
investment by Verbrugge NV and Symphony Mills nv in Rieter Holding AG. The procedure provided in Art 7:96 of the
Companies code was applied. An extract of the minutes of this meeting is included in the statutory annual report.
At the board of directors meeting of May 12, 2021, Mr Luc Tack declared a conflict of interest regarding the decision to
acquire further Rieter Holding or Tessenderlo Group shares. The procedure provided in Art 7:96 of the Companies code
was applied. An extract of the minutes of this meeting is included in the statutory annual report.
At the board of directors meeting of July 2, 2021, Mr Luc Tack and Mr Stefaan Haspeslagh declared a conflict of interest
regarding the decision to grant a bulk credit of 20 million EUR to Saurer Technologies. The procedure provided in Art
7:96 of the Companies code was applied. An extract of the minutes of this meeting is included in the statutory annual
report.
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 March 16, 2020, 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 4,440,000 (for million four hundred and forty thousand EUR), 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.
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 BCCA, the Board of Directors is authorized, for
a period of 3 years form the authorization by the extraordinary general meeting of March 16, 2020, 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 favor 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 BCCA 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.
By decision of the extraordinary general meeting of shareholders of March 16, 2020, 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.
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.
Picanol Group – 2021 annual report | 44
Pursuant to the decision of the extraordinary general meeting of March 16, 2020, 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 25%
(twenty five 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 50 EUR (fifty EUR) or exceed 90 EUR (ninety EUR).
The Board of Directors is explicitly authorized according to the resolution of the extraordinary general meeting of March
16, 2020 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.
DIVIDEND POLICY
Picanol nv wil propose to the general assembly to pay out a dividend of 0.2 EUR per share for the financial year ending
on December 31, 2021. 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.
Picanol Group – 2021 annual report | 45
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 was previously appointed as 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.
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, 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. It was also decided not to modify the remuneration policy as already approved, during the course
of the year.
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 Luc Tack due to his representation in the
Board of Directors of Picanol nv.
Ieper, March 23, 2022
On behalf of the Board of Directors
Luc Tack Stefaan Haspeslagh
Director and CEO Chairman of the Board of Directors
Picanol Group – 2021 annual report | 46
Financial report
2021
Picanol Group – 2021 annual report | 47
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT
For the year ended December 31
(Million EUR)
Note
2021
2020
Revenue
3
Cost of sales
-2,111.1
-1,664.3
Gross profit
Distribution expenses
-131.2
-111.8
Sales and marketing expenses
-150.2
-136.3
Administrative expenses
-78.4
-72.4
Other operating income and expenses
5
-30.9
-33.5
Adjusted EBIT
2
3
EBIT adjusting items
6
-12.0
EBIT (Profit (+) / loss (-) from operations)
Finance income
9
Finance cost
9
-19.5
-45.0
Finance (costs) / income - net
9
-37.3
Share of result of equity accounted investees, net of income tax
-1.9
Profit (+) / loss (-) before tax
Income tax expense
10
-49.8
-32.2
Profit (+) / loss (-) for the period
Non-controlling interest
Profit (+) / loss (-) for the period attributable to the equity holders of
the company
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 interests 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.
Picanol Group – 2021 annual report | 48
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended December 31
(Million EUR)
Note
2021
2020
Profit (+) / loss (-) for the period
Translation differences
3
-14.7
Net change in fair value of derivative financial instruments, before tax
26
-0.2
Other movements
-0.2
Income tax on other comprehensive income
15
-0.5
Share in other comprehensive income of joint ventures accounted for
using the equity method
Other comprehensive income to be reclassified to profit or loss in
subsequent periods
-15.1
Remeasurements of the net defined benefit liability, before tax
23
-1.0
Income tax on other comprehensive income
15
-1.2
Other comprehensive income not being classified to profit or loss in
subsequent periods
Other comprehensive income, net of income tax
-14.9
Total comprehensive income
Non-controlling interest
Total comprehensive income attributable to the equity holders of the
company
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%).
Picanol Group – 2021 annual report | 49
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
14
Deferred tax assets
15
Trade and other receivables
16
Total current assets
Inventories
17
Trade and other receivables
16
Current tax assets
Derivative financial instruments
26
Short term investments
18/22
Cash and cash equivalents
18/22
Assets held for sale
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
21
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
Employee benefits
23
Provisions
24
Total liabilities
Total equity and liabilities
The accompanying notes are an integral part of these consolidated financial statements.
Picanol Group – 2021 annual report | 50
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(Million EUR)
Note
Issued capital
Share premium
Other reserves
and retained
earnings
Translation
differences
Repurchase
treasury shares by
subsidiaries
Equity
attributable to
equity holders of
the company
Non-controlling
interest
Total equity
Balance on January 1, 2021
-43.2
-4.2
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
Repurchase treasury shares by
subsidiaries
- Dividends paid to shareholders
-0.6
-0.6
- Change in non-controlling interest
-2.5
-4.6
-7.1
-48.6
-55.7
Total contributions by and distributions
to owners
-2.5
-4.6
-7.1
-49.2
-56.3
Balance on December 31, 2021
-33.7
-4.2
(Million EUR)
Note
Issued capital
Share premium
Other reserves
and retained
earnings
Translation
differences
Repurchase
treasury
shares
by subsidiaries
Equity
attributable to
equity holders of
the company
Non-controlling
interest
Total equity
Balance on January 1, 2020
-33.3
Profit (+) / loss (-) for the period
Other comprehensive income:
- Translation differences
-7.2
-7.2
-7.5
-14.7
- Remeasurements of the net defined
benefit liability, net of tax
-0.1
-0.1
- Net change in fair value of derivative
financial instruments, net of tax
-0.1
-0.1
-0.1
-0.2
- Other movements
-0.1
-0.1
-0.1
-0.2
Comprehensive income, net of income
taxes
-7.2
Transactions with owners, recorded directly
in equity
Repurchase treasury shares by subsidiaries
-4.2
-2.4
-1.8
-4.2
- Dividends
-3.5
-3.5
-3.5
- Change in non-controlling interest
-2.7
-34.3
-33.3
Total contributions by and distributions to
owners
-2.7
-4.2
-
-36.1
-41.0
Balance on December 31, 2020
-43.2
-4.2
Picanol Group – 2021 annual report | 51
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,
goodwill and other intangible assets
8
Changes in provisions
-3.6
Finance costs
9
Finance income
9
-63.9
-7.7
Loss / (profit) on sale of non-current assets
-3.6
-1.7
Share of result of equity accounted investees, net of income tax
-1.1
Income tax expense
10
Changes in inventories
-81.2
-34.0
Changes in trade and other receivables
-111.7
Changes in trade and other payables
Change in write off on inventory
3/17
Other cash from operating activities
-6.5
Cash generated from operations
Income tax (paid)/received
-62.1
-45.6
Dividends received
Cash flow from operating activities
Investing activities
Acquisition of property, plant and equipment
11
-112.1
-111.9
Acquisition of other intangible assets
13
-0.4
-1.1
Acquisition of subsidiaries net of cash acquired
4
-5.7
Acquisition of investments accounted for using the equity method
14
-2.0
Acquisition of shares
4
-53.1
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
-148.6
-135.1
Financing activities
Acquisition of non-controlling interest
21
-55.7
-33.2
Repurchase of treasury shares by subsidiaries
19
-4.2
Payment of lease liabilities
11/22
-22.2
-24.2
Proceeds from new borrowings
Reimbursement of borrowings
-50.6
-56.0
Interest paid
-18.2
-18.1
Interest received
Dividends paid
-0.6
-3.5
Other cash flows from financing activities
-1.3
Cash flow from financing activities
-138.0
-130.1
Net increase / (decrease) in cash and cash equivalents
Effect of exchange rate differences
-2.2
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.
Picanol Group – 2021 annual report | 52
The cash flow from operating activities decreased from 323.1 million EUR in 2020 to 304.0 million EUR as per
December 31, 2021. The increase of the 2021 operational result (increase of Adjusted EBITDA by +68.6 million EUR),
mainly within Machines & Technologies, 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 -65.2 million EUR
in 2021 mainly impacted by higher inventories, due to higher production volumes, increased raw material prices and
energy costs (-81.2 million EUR). The net impact of the variance in trade and other receivables and trade and other
payables was limited to +16.1 million EUR. The increase in taxable result, resulted in higher income taxes paid (-62.1
million EUR in 2021 compared to only -45.6 million EUR in 2020).
The cash flow from investing activities amounted to -148.6 million EUR in 2021. Total capital expenditure amounts
to -112.5 million EUR (2020: -113.1 million EUR) (note 3 - Segment reporting). The “Acquisition of shares” relates to
the purchase of shares of Rieter Holding AG for 53.1 million EUR (see Note 4 - Acquisitions and disposals). 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 -138.0 million EUR as per year-end 2021 (2020: -130.1 million
EUR). The acquisition of non-controlling interest for -55.7 million EUR is the purchase of additional shares of
subsidiary Tessenderlo Group which resulted in an increase of the shareholders percentage from 46.65% at
December 31, 2020 to 50.42% at the end of 2021. The reimbursement of borrowings (-50.6 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 Tessenderlo 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.
As a result cash and cash equivalents less bank overdrafts increased from 345.9 million EUR to 366.7 million EUR
(note 18 - Cash and cash equivalents).
CONSEQUENCES AND IMPACT OF THE COVID-19 PANDEMIC
In light of the latest developments concerning the corona pandemic, Picanol 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.
Picanol Group – 2021 annual report | 53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Page
1
Summary of significant accounting policies
54
2
Determination of fair values
68
3
Segment reporting
69
4
Acquisitions and disposals
73
5
Other operating income and expenses
74
6
EBIT adjusting items
74
7
Payroll and related benefits
75
8
Additional information on operating expenses by nature
75
9
Finance costs and income
76
10
Income tax expense
77
11
Property, plant and equipment
78
12
Goodwill
81
13
Intangible assets
82
14
Investments accounted for using the equity method and other investments
84
15
Deferred tax assets and liabilities
85
16
Trade and other receivables
86
17
Inventories
87
18
Cash and cash equivalents
88
19
Equity
88
20
Earnings per share
89
21
Non-controlling interest
90
22
Loans and borrowings
91
23
Employee benefits
93
24
Provisions
97
25
Trade and other payables
99
26
Financial instruments
99
27
Guarantees and commitments
106
28
Contingencies
107
29
Related parties
108
30
Auditor's fees
110
31
Subsequent events
110
32
Group companies
111
33
Critical accounting estimates and judgments
113
Picanol Group – 2021 annual report | 54
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Picanol 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 associates and in jointly controlled entities.
The IFRS financial statements were authorized for issue by the Board of Directors of Picanol nv on Wednesday March
23, 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, net defined benefit (liabilities)/assets and investments available-for-sale, which are stated at
fair value. Assets and disposal groups held for sale are stated at the lower of carrying amount and fair value less
costs to sell.
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.
(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.
Picanol Group – 2021 annual report | 55
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.
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.
Picanol Group – 2021 annual report | 56
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
6.31
6.37
6.38
5.89
Chinese yuan
7.19
8.02
7.63
7.87
Costa Rican colón
725.59
743.89
732.03
665.45
Czech crown
24.86
26.24
25.64
26.46
Hungarian forint
369.19
363.89
358.52
351.25
Indian rupee
84.23
89.66
87.44
84.64
Polish zloty
4.60
4.56
4.57
4.44
Pound sterling
0.84
0.90
0.86
0.89
Romanian leu
4.95
4.87
4.92
4.84
Swiss franc
1.03
1.08
1.08
1.07
Turkish lira
1523
9.11
10.51
8.05
US dollar
1.13
1.23
1.18
1.14
Indonesian rupee
16,100
17,240
16,860
16,650
Mexican Peso
23.14
24.42
24.07
24.45
(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 other 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
Picanol Group – 2021 annual report | 57
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 initial valuation
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.
▪
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.
5
The group did not have any such contracts during 2020 and 2021.
Picanol Group – 2021 annual report | 58
▪
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.).
(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.
▪ 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.
6
Land infrastructure mainly includes access roads, fencing and lighting.
Picanol Group – 2021 annual report | 59
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) Other intangible assets.
(H) Leased assets
The group has applied IFRS 16 Leases since January 1, 2019 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.
(I) Other and short term investments
Each category of other investments 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 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. On initial
recognition, the entity can determine, on an instrument-by-instrument basis, whether subsequent changes in fair
value should be recorded in other comprehensive income or directly in profit or loss. The choice is irrevocable.
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, and on initial recognition it was chosen to
Picanol Group – 2021 annual report | 60
record subsequent changes in fair value in other comprehensive income, the cumulative gain or loss previously
recognized in other comprehensive income remains in other comprehensive income and is never reclassified to
profit or loss.
The entity has the following investments in equity securities:
- Rieter Holding AG: fair value changes through income statement
▪
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 other 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 other 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.
▪
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.
Picanol Group – 2021 annual report | 61
▪
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 for the divisions of Tessenderlo Group and according to FIFO method for the division Machines &
Technologies.
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.
(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.
Picanol Group – 2021 annual report | 62
(O) Non-derivate financial liabilities
Non-derivate 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.
Export financing is used within the Machines & Technologies division. The company allows long-term payment of
trade receivables provided that these are financed via export financing by banks and are guaranteed by Credendo.
Accounting processing of the export financing:
When a machine contract is invoiced, the client receivable (which is spread over several years) is booked under
“trade and other receivables”. There are several options to finance these long-term receivables. If Picanol Group
takes out a parallel supplier credit with a bank, this debt will be booked under "loans and borrowings". Picanol Group
may also decide to proceed with discounting client receivables through a bank or a credit insurer. In this case, the
client receivables will be settled the moment the risk of the asset is transferred. The discount costs are included in
the profit and loss account under "finance costs”. The income related to re-invoicing the interest costs to the
customer is included in the income statement under “finance income".
(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.
▪
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.
▪
Warranties
A provision for warranty costs will be made for products under warranty on the basis of historical data with regard
to repairs and returned goods. A provision is being made for performance warranties based on individual analysis.
(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.
Picanol Group – 2021 annual report | 63
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.
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.
Picanol Group – 2021 annual report | 64
(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.
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. In the segment
Machines & Technologies, the installation of the machine at the customer is seen as a separate performance
obligation since it can also be performed by the customer or by an external party. However, the turnover with regard
Picanol Group – 2021 annual report | 65
to this installation is not material in the total turnover of the group.
(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.
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, gains on
derivative financial instruments and financing costs related to weaving machines contracts which are re-invoiced to
the customers.
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, losses on derivative financial instruments and finance costs related to weaving machines contracts.
Interest expense is recognized as it occurs, 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.
Picanol Group – 2021 annual report | 66
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.
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 treasury 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.
Picanol Group – 2021 annual report | 67
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.
(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.
Picanol Group – 2021 annual report | 68
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 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 other 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 and externally.
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.
Picanol Group – 2021 annual report | 69
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 5 operating segments based on the principal business activities, economic environments and value
chains in which they operate, as defined under IFRS 8 Operating Segments. The customers and main markets of
these segments are different. The 5 operating segments fulfill the quantitative thresholds and are reported
separately. The information provided below is consistent with the information that is available and evaluated
regularly by the Chief Operating Decision Maker (the ExCom).
The following five operating segments meet the quantitative criteria and are reported separately:
• “Machines & Technologies”- covers the production, development and sale of high-tech weaving machines
and other “original equipment manufacturers” industrial products. This segment includes the Weaving
Machines (Picanol), Foundry and Mechanical Finishing (Proferro), and Electronics Development and
Production (PsiControl) activities. These components are not considered to be separate operating
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. 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 (formerly Mining and Industrial) and Kuhlmann Europe (formerly
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.
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 in a manner 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.
Picanol Group – 2021 annual report | 70
The group is a diversified specialty group that is worldwide active in many areas of machinery, 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) and R&D services sold by PsiControl in segment
Machines & Technologies. In this case, the revenue is recognized when the customers obtain control of the services,
predominantly at a point in time. The group has executed engineering and construction activities through its
subsidiary S8 Engineering Inc. 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 below.
Picanol Group – 2021 annual report | 71
(Million EUR)
note
Machines &
Technologies
Agro
Bio-valorization
Industrial
Solutions
T-Power
Non- allocated
Picanol Group
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
Revenue (internal and external)
660.2
451.3
750.3
583.5
643.2
575.7
618.4
509.4
71.2
69.5
0.0
0.0
2,743.3
2,189.3
Less : Revenue (internal)
1.0
0.6
0.0
0.0
0.6
0.3
0.0
0.0
0.0
0.0
1.6
0.9
Revenue
660.2
451.3
749.3
582.9
643.2
575.7
617.8
509.1
71.2
69.5
2,741.7
2,188.5
Of which:
- At a point in time
660.2
451.3
749.3
582.9
643.2
575.7
617.8
508.1
71.2
69.5
0.0
0.0
2,741.7
2,187.5
- Over time
0.0
0.0
0.0
0.0
0.0
1.0
0.0
0.0
0.0
0.0
0.0
1.0
Adjusted EBIT
63.3
35.0
79.3
58.7
41.9
44.7
41.0
15.2
14.5
16.6
239.9
170.2
Adjusted EBITDA
76.1
47.1
147.4
125.6
78.5
81.9
76.1
53.0
52.2
54.1
430.3
361.7
Return on revenue (Adjusted
EBITDA/revenue)
11.5%
10.4%
19.7%
21.5%
12.2%
14.2%
12.3%
10.4%
73.3%
77.8%
15.7%
16.5%
Non-current segment assets (PPE, goodwill
and intangible assets)
80.8
75.6
555.2
583.8
282.2
264.6
250.7
252.8
328.5
362.8
32.4
34.3
1,529.8
1,573.8
Other segment assets
186.3
136.8
341.7
248.1
237.4
206.2
177.6
144.5
4.5
2.6
22.4
21.4
970.0
759.6
Derivative financial instruments
26
0.6
0.0
0.6
0.0
Investments accounted for using the equity
method
14
0.0
17.1
14.2
2.1
5.7
0.0
0.0
0.0
0.0
0.0
0.0
19.2
20.0
Other investments
14
101.2
10.3
101.2
10.3
Deferred tax assets
15
34.5
33.2
34.5
33.2
Short term investments
18/22
10.0
20.0
10.0
20.0
Cash and cash equivalents
18/22
366.7
345.9
366.7
345.9
Total assets
267.1
212.4
914.1
846.1
512.8
476.5
428.3
397.3
333.1
365.4
567.8
465.1
3,032.0
2,762.7
Segment liabilities
158.1
114.6
136.0
78.2
165.5
156.3
95.6
87.2
11.6
8.9
167.2
177.0
734.0
622.2
Derivative financial instruments
26
29.3
37.1
29.3
37.1
Loans and borrowings
22
411.6
463.0
411.6
463.0
Deferred tax liabilities
15
168.8
176.5
168.8
176.5
Total equity
1,688.4
1,463.8
1,688.4
1,463.8
Total Equity and Liabilities
158.1
114.6
136.0
78.2
165.5
156.3
95.6
87.2
11.6
8.9
2,465.1
2,317.5
3,032.0
2,762.7
Capital expenditures: property, plant and
equipment and intangible assets
11/13
16.5
12.9
25.9
29.9
43.0
46.4
23.1
15.7
3.3
6.7
0.7
1.4
112.5
113.1
Depreciation, amortization and impairment
losses on tangible assets, goodwill and
intangible assets
8
-12.8
-12.1
-68.2
-66.9
-36.6
-37.2
-37.0
-40.9
-37.6
-37.4
0.0
0.0
-192.2
-194.6
Reversal/(additional) inventory write-offs
17
0.7
-2.0
0.9
-1.8
-1.2
-8.2
-2.3
-0.7
0.0
0.0
0.0
0.0
-1.8
-12.7
Picanol Group – 2021 annual report | 72
The increase of the other segment assets and segment liabilities in most Group segments is mainly linked to the increase
of inventories, trade receivables and payables, which are impacted by a higher activity, timing and price inflation.
The impact of the revaluation of Tessenderlo Group (as a result of the acquisition of control) on the segment assets is:
Agro +306.2 million EUR (+343.3 million EUR in 2020), Bio-valorization +18.6 million EUR (+20.6 million EUR in 2020),
Industrial Solutions +67.1 million EUR (+75.2 million EUR in 2020), T-Power +9.1 million EUR in 2021 and 2020 and non-
allocated +17.6 million EUR in 2021 and 2020.
Non-allocated segment liabilities mainly include environmental provisions recognized for the plants in Belgium (Ham,
Tessenderlo, Vilvoorde) and France (Loos).
The reconciliation of the profit before tax is as follows:
(Million EUR)
2021
2020
Adjusted EBIT
239.9
170.2
EBIT adjusting items
2.0
-12.0
Finance costs - net
44.4
-37.3
Share of result of equity accounted investees, net of income tax
1.1
-1.9
Profit (+) / loss (-) before tax
287.5
119.0
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 other intangible assets) are
based on the geographical location of the assets.
Revenue by market
Non-current segment assets
(Million EUR)
2021
2020
2021
2020
Europe
1,351.7
1,105.5
985.0
1,008.0
North-Amerika
673.1
576.2
470.2
495.0
South-Amerika
101.7
80.5
52.4
50.6
Asia
536.2
367.3
12.4
12.5
Other
79.0
59.2
9.9
7.6
Total
2,741.7
2,188.5
1,529.8
1,573.8
Revenue increased in all geographical segments, but most pronounced in Asia due to the strong recovery of the textile
industry (segment Machines & Technologies) in 2021.
The decrease of the non-current segment assets in Europe 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 decrease of the non-current segment assets in North America is mainly due to the depreciation of the fair value
adjustment booked upon the initial consolidation of Tessenderlo Group (impact -37.1 million EUR).
Picanol Group – 2021 annual report | 73
4. ACQUISITIONS AND DISPOSALS
ACQUISITIONS
In March 2021, Picanol Group acquired a 10% minority stake in Rieter Holding AG (CH) for a price of 45.4 million EUR
(or a price per share of CHF 107.5). Rieter is the world's leading supplier of systems for spinning short staple fibers. The
company develops and manufactures machines, systems and components used to convert natural and synthetic fibers
into yarns. With this financial participation, Picanol Group aims to further diversify its activities in the textile industry.
During 2021, Picanol Group increased its stake to 11.2% bringing the total invested amount to 53.1 million EUR.
Together with Symphony Mills, which is also controlled by Picanol's reference shareholder, Mr. Luc Tack, the share
percentage amounts to 14.99% at December 31, 2021. Based on the share price of CHF 177 as of December 31, 2021,
the fair value of the stake by Picanol Group is 89.4 million EUR.
Picanol Group has analyzed the accounting treatment to be applied to the investment in Rieter and in particular the
classification into "investments in associates" (IAS28) versus "other equity investments" (IFRS9). In accordance with
IAS28, a group is considered not to exercise significant influence if the percentage of the holding is less than 20%,
unless significant influence can be clearly demonstrated. The existence of significant influence by an entity is usually
evidenced in one or more of the following ways (a) representation on the board of directors or equivalent governing
body of the investee; (b) participation in policy-making processes, including participation in decisions about dividends
or other distributions; (c) material transactions between the entity and its investee; (d) exchange of managerial
personnel; or (e) provision of essential technical information.
Picanol Group was represented on Rieter's board of directors by 1 director, Mr. Tack, from March 16, 2021 until the
general meeting of April 15, 2021 and by 2 directors from April 15, 2021, following the Directors appointment of Mr.
Haspeslagh. On August 30, 2021, Mr. Tack and Mr, Haspeslagh resigned from the Rieter board of directors following a
conflict related to Saurer.
Based on these facts, it was concluded that:
▪ Picanol Group had a significant influence over Rieter from March 16 to August 30, 2021;
▪ Picanol Group lost this significant influence on August 30, 2021.
The stake in Rieter was then accounted for as follows:
▪ For the period from March 16, 2021 to August 30, 2021, the stake was accounted for as an "investment in
associates" (IAS28). The share in Rieter's result of the first half of the year was accounted for using the equity
method: this resulted in a "share in the result of associates accounted for using the equity method, net of
income tax" of 0.4 million euro and a non-comprehensive income of 1.2 million euro (which was later
recycled to financial result as the significant interest ceased).
▪ As of August 30, the shareholding was accounted for according to IFRS 9 "other equity investments" and
valued at fair value. Based on the December 31, 2021 stock market price of 177 CHF, this resulted in a
financial income of 35.9 million euro 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.
DISPOSALS
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). 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).
Picanol Group – 2021 annual report | 74
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
-24.7
-24.4
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 other intangible assets
0.7
0.2
Reversal/(recognition) of impairment losses on trade receivables
-0.2
-0.6
Other
0.7
-1.2
Total
-30.9
-33.5
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 -15.5 million EUR (2020: -16.3 million EUR) and include
depreciation charges for an amount of -0.6 million EUR (2020: -0.6 million EUR). In 2021 and 2020, no significant
development costs were capitalized. IWT subsidies received for R&D projects are deducted from the research and
development costs.
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.
6. EBIT ADJUSTING ITEMS
The EBIT adjusting items for 2021 show a net gain of +2.0 million EUR (2020: -12.0 million EUR).
(Million EUR)
2021
2020
Gains and losses on disposals
2.6
1.0
Restructuring
-1.7
-0.5
Impairment losses
-1.9
-3.0
Provisions and claims
4.0
-5.0
Other income and expenses
-1.0
-4.4
Total
2.0
-12.0
The gains and losses on disposals (+2.6 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%).
Picanol Group – 2021 annual report | 75
Other income and expenses (-1.0 million EUR) mainly 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.
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
-343.2
-313.6
Employer’s social security contributions
-72.3
-67.6
Other personnel costs
-30.9
-25.5
Contributions to defined contribution plans
-11.4
-10.9
Expenses related to defined benefit plans
23
-8.1
-6.9
Total
-466.0
-424.5
The number of FTE’s at year-end 2021 amounts to 7,058 (2020: 6,878).
8. ADDITIONAL INFORMATION ON OPERATING EXPENSES BY NATURE
Depreciation and amortization on property, plant and equipment (PPE) and other 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
-113.7
-113.3
-63.5
-63.7
-177.2
-177.0
Administrative expenses
-7.8
-7.7
-0.9
-1.5
-8.7
-9.3
Sales and marketing expenses
-0.8
-0.9
-3.3
-3.8
-4.1
-4.7
Other operating income and
expenses
-0.5
-0.5
0.0
0.0
-0.5
-0.5
Total
11/13
-122.8
-122.5
-67.7
-69.1
-190.4
-191.6
Impairment losses on property, plant and equipment, other intangible assets and goodwill are included in the following
line items in the income statement:
(Million EUR)
Note
Property, plant and
equipment
Intangible assets
Goodwill
Total
2021
2020
2021
2020
2021
2020
2021
2020
Impairment losses
-1.9
-3.0
0.0
0.0
0.0
0.0
-1.9
-3.0
Total
11/13
-1.9
-3.0
0.0
0.0
0.0
0.0
-1.9
-3.0
Total depreciation, amortization and impairment losses in 2021 amount to -192.2 million EUR compared to -194.6 million
EUR in 2020 (note 11 - Property, plant and equipment, note 12 - Goodwill and note 13 - Intangible assets). These include
depreciation charges on the revaluated assets of Tessenderlo Group for -47.2 million EUR of which -5.6 million EUR on
tangible fixed assets and -41.6 million EUR on intangible assets.
Picanol Group – 2021 annual report | 76
9. FINANCE COSTS AND INCOME
Net finance costs and income amount to +44.4 million EUR as per December 31, 2021, compared to -37.3 million EUR as
per December 31, 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
-9.6
0.0
-9.6
-9.5
0.0
-9.5
Dividend income from other investments
0.0
0.0
0.0
0.0
0.1
0.1
Interest income from cash and cash equivalents
0.0
0.5
0.5
0.0
0.4
0.4
Expense for the unwinding of discounted provisions
-0.2
0.0
-0.2
-0.4
0.0
-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)
-5.5
20.3
14.8
-32.2
2.7
-29.5
Interest (costs)/income on trade finance
-2.9
4.3
1.3
-1.7
2.0
0.3
Unrealized gains on investments in shares
0.0
35.9
35.9
0.0
0.0
0.0
Net other finance (costs)/income
-1.1
2.8
1.8
-1.0
2.6
1.6
Total
-19.5
63.9
44.4
-45.0
7.7
-37.3
The interest expenses on loans and borrowings amount to -9.6 million EUR (2020: -9.5 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 -18.2 million EUR (mainly interest expenses for -9.6
million EUR and payments for forward rate agreements reaching their maturity date for -5.7 million EUR).
The net foreign exchange gain (+14.8 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.
The unrealized gain on investments in shares relate to the unrealized profit on the Rieter shares. In 2021 Picanol Group
purchased 521,829 Rieter shares (11.2%) for a total amount of 53.1 million EUR, at an average purchase price of 102 EUR
per share. On December 31, 2021, the shares price was 177 CHF (171 EUR) implying a fair value of 89.4 million EUR and
resulting in a financial gain of 35.9 million EUR (and a profit on equity accounted investees of 0.4 million EUR).
Picanol Group – 2021 annual report | 77
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
-61.4
-51.1
Adjustment current tax expense previous periods
-0.8
-0.1
Deferred tax - due to changes in temporary differences
9.2
22.0
Deferred tax - due to changes in tax rate
0.8
-3.6
Deferred taxes - recognition (derecognition) of tax losses
2.4
0.5
Total income tax expense in the income statement
-49.8
-32.2
Profit (+) / loss (-) before tax
287.5
119.0
Less share of result of equity accounted investees, net of income tax
1.1
-1.9
Profit (+) / loss (-) before tax and before result from equity accounted investees
286.4
120.9
Effective tax rate
17.4%
26.6%
Reconciliation of effective tax rate
Profit (+) / loss (-) before tax and before result from equity accounted investees
286.4
120.9
Theoretical tax rate
25.0%
27.6%
Expected income tax at the theoretical tax rate
-71.5
-33.3
Difference between theoretical and effective tax expenses
21.7
1.0
Adjustment on deferred taxes
3.3
-3.1
Change in tax rates
0.9
-3.6
Recognition (+) / derecognition (-) of previously recognized tax losses
2.4
0.5
Adjustment on tax expenses
18.5
4.0
Expenses not deductible for tax purposes
-2.5
-2.5
Non taxable income
11.8
3.6
Tax incentives
2.1
2.0
Use or recognition of tax losses / tax credits not previously recognized
10.9
6.6
Tax losses / temporary differences for which no deferred tax asset has been recorded
-6.1
-13.7
Adjustment current tax expense previous periods
-0.8
-0.2
Other
3.1
8.2
The theoretical aggregated weighted tax rate amounted to 25.0% in 2021 compared to 27.6% in 2020. Variances of the
tax rate can be explained by changes 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 Belgium. The total current tax expense amounts
to -61.4 million EUR. As per December 2021, the group has a current tax receivable outstanding of 8.5 million EUR (2020:
9.3 million EUR), mainly due to advance payments made by Belgian subsidiaries and a current tax payable of -2.7 million
EUR (2020: -3.7 million EUR). The income tax paid in 2021 amounts to -62.1 million EUR (2020: -45.6 million EUR).
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.
Picanol Group – 2021 annual report | 78
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 includes the non-realized gain on the Rieter shares (+9 million EUR tax impact) which
becomes tax exempt 12 months after the purchase of the shares. It also 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
363.8
838.3
143.0
68.3
1,413.2
- dismantlement provision
0.3
0.2
0.0
0.0
0.5
- capital expenditure
5.8
19.2
2.3
84.7
112.1
- IFRS 16 new leases
8.4
2.2
10.3
0.0
20.9
- sales and disposals
-9.9
-76.4
-32.4
0.0
-118.7
- transfers
16.5
37.4
20.9
-74.0
0.8
- translation differences
14.4
20.7
3.8
1.4
40.3
At December 31, 2021
399.4
841.5
147.9
80.4
1,469.0
Depreciation and impairment losses
At January 1, 2021
-72.0
-203.5
-76.0
0.0
-351.4
- depreciation (note 8)
-24.4
-74.5
-23.8
0.0
-122.7
- impairment losses (note 6/8)
-0.5
-1.4
0.0
0.0
-1.9
- sales and disposals
9.5
75.1
32.3
0.0
116.9
- transfers
-0.3
0.5
-0.3
0.0
-0.2
- translation differences
-7.2
-13.8
-2.7
0.0
-23.6
At December 31, 2021
-94.9
-217.6
-70.6
0.0
-383.0
Carrying amounts
At January 1, 2021
291.7
634.7
66.9
68.3
1,061.8
At December 31, 2021
304.5
623.9
77.3
80.4
1,086.0
(Million EUR)
Land and
buildings
Plant,
machinery and
equipment
Furniture and
vehicles
Assets under
construction
Total
Cost
At January 1, 2020
369.7
814.8
140.5
59.7
1,384.8
- change in consolidation
scope (disposal)
0.0
0.0
-0.1
0.0
-0.1
- change in consolidation
scope (acquisitions)
3.7
0.7
0.2
0.0
4.6
- dismantlement provision
0.4
0.5
0.0
0.0
0.9
- capital expenditure
1.6
25.0
3.0
82.3
111.9
- IFRS 16 new leases
2.9
0.6
10.8
0.0
14.3
- sales and disposals
-9.4
-16.2
-24.9
0.0
-50.5
- transfers
12.0
41.5
18.2
-72.3
-0.6
- translation differences
-17.1
-28.8
-4.7
-1.4
-52.0
At December 31, 2020
363.7
838.2
143.0
68.3
1,413.2
Picanol Group – 2021 annual report | 79
Depreciation and impairment losses
At January 1, 2020
-61.8
-163.5
-81.1
0.0
-306.4
- change in consolidation
scope (disposal)
0.0
0.0
0.1
0.0
0.1
- depreciation (note 8)
-26.1
-73.5
-22.8
0.0
-122.5
- impairment losses (note 6/8)
0.0
-3.0
0.0
0.0
-3.0
- sales and disposals
9.0
15.9
24.7
0.0
49.6
- transfers
-0.6
0.6
0.0
0.0
0.0
- translation differences
7.4
20.1
3.0
0.0
30.5
At December 31, 2020
-72.0
-203.5
-76.0
0.0
-351.4
Carrying amounts
At January 1, 2020
308.0
651.3
59.4
59.7
1,078.4
At December 31, 2020
291.7
634.7
66.9
68.3
1,061.8
The capital expenditure on property, plant and equipment amounts to 112.1 million EUR and is presented per operating
segment in note 3 - Segment reporting (including 0.4 million EUR of capex on intangible assets).
The majority of the capital expenditure relates to:
▪ the new electronics factory and SMD line for PsiControl Romania, the high-bay warehouse for Proferro, and
various investments in new production equipment (segment Machines & Technologies);
▪ 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);
▪ investments in the construction of a new Thio-Sul manufacturing plant in Geleen (the Netherlands). The factory
is scheduled to be operational from the third quarter of 2023;
▪ the replacement of equipment and vehicles, which were previously leased, through purchase.
The 2021 sales and disposals are impacted by the migration to a new ERP system within segment Machines &
Technologies which led to a disposal of fully depreciated assets, however with no net value impact. They also 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).
Depreciation charges include depreciation on the revalued assets of Tessenderlo Group for 5.1 million EUR within plant,
machinery and equipment and 0.5 million EUR in Land and buildings.
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, US), 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.
Picanol Group – 2021 annual report | 80
The carrying amount of the Right-of-use assets per category is shown in the table below:
(Million EUR)
Carrying amount right-of-use assets
Depreciation charges right-of-use
assets
2021
2020
2021
2020
Land and buildings
22.1
18.9
5.4
5.5
Plant, machinery and equipment
3.3
2.7
1.7
1.9
Furniture and vehicles
28.0
31.5
14.5
16.1
Total
53.3
53.0
21.7
23.5
The carrying amount of the Right-of-use assets per operating segment is shown in the table below:
(Million EUR)
2021
2020
Machines & Technologies
2.5
2.9
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
Total
53.3
53.0
The main leases consist of land and buildings (mainly the electronics factory of Machines & Technologies in Romania,
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.
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 -23.3 million EUR (2020: -25.3 million EUR), which include interest charges for -1.1 million EUR (2020: -
1.1 million EUR).
The depreciation charges recognized, on a straight-line basis over the shorter of the asset’s useful life and its lease term,
amount to 21.7 million EUR, compared to 23.5 million EUR in 2020 (note 8 - additional information operating expenses
by nature).
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.
Picanol Group – 2021 annual report | 81
12. GOODWILL
Goodwill accounts for approximately 1.4% of the group’s total assets as per December 31, 2021, or 42.1 million EUR
(2020: 1.5%).
The carrying amount of goodwill per operating segment and per cash-generating unit, is shown in the table below:
2021
2020
(Million EUR)
Note
Cost
Impairment/
Amortization
Carrying
amounts
Cost
Impairment/
Amortization
Carrying
amounts
Agro
19.1
0.0
19.1
19.1
0.0
19.1
Bio-valorization
6.8
0.0
6.8
6.8
0.0
6.8
Industrial Solutions
6.6
0.0
6.6
6.6
0.0
6.6
T-Power
9.7
0.0
9.7
9.7
0.0
9.7
Total
42.1
0.0
42.1
42.1
0.0
42.1
The goodwill was booked following the initial consolidation of the Tessenderlo Group on January 1, 2019 and was
allocated to the various divisions on the basis of the respective net asset values.
All movements related to goodwill are shown in the table below:
(Million EUR)
2021
2020
Cost
At January 1
42.1
42.1
- acquisitions through business combinations
0.0
0.0
- other movements
0.0
0.0
- translation differences
0.0
0.0
At December 31
42.1
42.1
Impairment losses
At January 1
0.0
0.0
- other movements
0.0
0.0
- translation differences
0.0
0.0
At December 31
0.0
0.0
Carrying amounts
At January 1
42.1
42.1
At December 31
42.1
42.1
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
has been tested for impairment on the level of its cash-generating unit and is based on value-in-use calculations.
The key judgments, estimates and assumptions used in these calculations are as follows:
▪ the cash flow projection of the first year is based on the 2022 financial budget approved by the Board of
Directors of Tessenderlo Group;
▪ a future growth rate of 1 or 2% (depending on the CGU) was applied to calculate the terminal value;
▪ the terminal value is discounted at an after-tax Weighted Average Cost of Capital (WACC) between 5.9% and
8.6%);
▪ capital expenditures only include the cash outflows required to keep the assets in their current condition
and do not include future capital expenditures significantly improving or enhancing the assets in excess of
their originally assessed standard performance.
Although the group believes that its judgments, assumptions and estimates are appropriate, actual results may differ
from these estimates under different assumptions or conditions.
Picanol Group – 2021 annual report | 82
13. INTANGIBLE ASSETS
Useful life
Finite
(Million EUR)
Concessions,
patents,
licenses
Software
Customer lists
Other
intangible
assets
Total
Cost
At January 1, 2021
13.3
14.8
550.5
42.9
621.6
- capital expenditure
0.0
0.4
0.0
0.0
0.4
- net change in emission allowances
0.0
0.0
0.0
-1.1
-1.1
- sales and disposals
-0.6
-7.6
0.0
0.0
-8.2
- transfers
0.1
-0.9
0.0
0.0
-0.9
- translation differences
4.0
0.2
1.3
1.7
7.2
At December 31, 2021
16.9
6.8
551.8
43.5
619.0
Amortization and impairment losses
At January 1, 2021
-4.3
-11.6
-120.7
-15.2
-151.8
- amortization (note 8)
-3.2
-1.1
-60.5
-3.0
-67.7
- sales and disposals
0.6
7.6
0.0
0.0
8.2
- transfers
0.0
0.2
0.0
0.0
0.2
- translation differences
-3.4
-0.1
-1.2
-1.6
-6.4
At December 31, 2021
-10.3
-4.9
-182.4
-19.6
-217.3
Carrying amounts
At January 1, 2021
9.0
3.2
429.8
27.8
469.8
At December 31, 2021
6.5
1.9
369.4
23.8
401.6
Useful life
Finite
(Million EUR)
Concessions,
patents,
licenses
Software
Customer lists
Other
intangible
assets
Total
Cost
At January 1, 2020
17.6
14.1
551.9
44.4
628.0
- capital expenditure
0.0
1.1
0.0
0.0
1.1
- net change in emission allowances
0.0
0.0
0.0
0.3
0.3
- sales and disposals
-0.2
-0.4
0.0
0.0
-0.6
- transfers
0.3
0.3
0.0
0.0
0.7
- translation differences
-4.4
-0.3
-1.4
-1.8
-7.9
At December 31, 2020
13.3
14.8
550.5
42.9
621.6
Amortization and impairment losses
At January 1, 2020
-4.6
-10.6
-61.5
-13.4
-90.1
- amortization (note 8)
-3.5
-1.6
-60.5
-3.4
-69.1
- sales and disposals
0.2
0.4
0.0
0.0
0.6
- transfers
0.0
0.0
0.0
0.0
0.0
- translation differences
3.6
0.2
1.3
1.7
6.8
At December 31, 2020
-4.3
-11.6
-120.7
-15.2
-151.8
Carrying amounts
At January 1, 2020
13.0
3.5
490.4
31.0
537.9
At December 31, 2020
9.0
3.2
429.8
27.8
469.8
The capital expenditure on other intangible assets amounts to 0.4 million EUR (2020: 1.1 million EUR) and is presented
per operating segment in note 3 - Segment reporting.
The decrease of the customer lists is explained on the one hand 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
Picanol Group – 2021 annual report | 83
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. On the other hand, the
decrease of the customer list is explained by the depreciation on the revalued customer list of Tessenderlo Group (-39.1
million EUR) which was recognized in 2019 upon the initial consolidation of Tessenderlo Group and is depreciated over
a period of 10 years.
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).
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.
Picanol Group – 2021 annual report | 84
14. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD AND OTHER INVESTMENTS
On December 31, 2021, investments accounted for using the equity method consist solely of joint ventures of
Tessenderlo Group.
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” (101.2 million EUR) mainly relate to the investment in Rieter shares that were valued at the
December 31, 2021, share price at 89.4 million EUR (see Note 4. Acquisitions and disposals). They also include 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. 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:
Picanol Group – 2021 annual report | 85
(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. DEFERRED TAX ASSETS AND LIABILITIES
Assets
Liabilities
Net
(Million EUR)
2021
2020
2021
2020
2021
2020
Property, plant and equipment
2.9
2.6
-80.0
-79.8
-77.1
-77.2
Intangible assets
4.9
5.0
-100.6
-117.6
-95.7
-112.5
Inventories
10.5
10.4
-2.1
-0.4
8.4
9.9
Employee benefits
10.2
12.1
-0.1
-0.3
10.1
11.7
Derivative financial instruments
3.4
5.3
0.0
0.0
3.4
5.4
Provisions
8.2
8.3
-13.7
-13.4
-5.5
-5.1
Other items
9.0
5.1
-11.4
-14.2
-2.5
-9.1
Losses carried forward
24.6
33.5
0.0
0.0
24.6
33.5
Gross deferred tax assets / (liabilities)
73.7
82.3
-208.0
-225.7
-134.3
-143.4
Set-off of tax
-39.2
-49.1
39.2
49.1
0.0
0.0
Net deferred tax assets / (liabilities)
34.5
33.2
-168.8
-176.5
-134.3
-143.4
The net deferred tax position on December 31, 2021 includes deferred taxes recognized upon the initial consolidation of
Tessenderlo Group on property, plant and equipment for -25.9 million EUR (2020: -21.1 million EUR) and intangible assets
for -74.1 million EUR (2020: -86.0 million EUR).
Other than this, 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.
Deferred tax assets on fiscal losses carried forward recognized on the Belgian parent company, Tessenderlo Group nv,
amount to 12.7 million EUR (total tax losses and tax credits carried forward in Tessenderlo Group nv amount to 193
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.
Picanol Group – 2021 annual report | 86
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 (Picanol nv) is tax exempt.
Tax losses and tax credits carried forward on which no deferred tax asset is recognized amount to 247.7 million EUR
(2020: 227.8 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
December 31,
2020
Recognized in
the income
statement
Recognized in
other
comprehensive
income
Translation
differences
Balance at
December 31,
2021
Property, plant and equipment
-77.2
1.9
0.0
-1.8
-77.1
Intangible assets
-112.5
16.8
0.0
0.1
-95.7
Inventories
9.9
-1.9
0.0
0.2
8.3
Employee benefits
11.7
-0.4
-1.2
0.0
10.2
Derivative financial instruments
5.4
-1.4
-0.5
0.0
3.4
Provisions
-5.1
-0.3
0.0
0.0
-5.5
Other items
-9.1
1.4
0.0
0.0
-7.7
Losses carried forward
33.4
-3.7
0.0
0.0
29.8
Total
-143.4
12.4
-1.7
-1.6
-134.3
The deferred taxes recognized in the income statement include +6.5 million EUR due the reversal of deferred tax liabilities
related to the depreciation of the revalued assets of Tessenderlo Group (mainly in property plant and equipment and
intangible assets).
16. TRADE AND OTHER RECEIVABLES
(Million EUR)
Note
2021
2020
Non-current trade and other receivables
Trade receivables
3.1
2.0
Gross trade receivables
3.1
2.0
Amounts written off
0.0
0.0
Other receivables
3.9
6.4
Receivables from related parties
0.0
0.9
Assets related to employee benefit schemes
23
9.1
5.1
Total
16.1
14.4
(Million EUR)
Note
2021
2020
Current trade and other receivables
Trade receivables
26
385.1
279.7
Gross trade receivables
26
389.6
285.7
Amounts written off
26
-4.5
-6.0
Other receivables
71.1
59.1
Prepayments
1.8
2.6
Receivables from related parties
1.0
0.8
Total
459.0
342.2
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.
Picanol Group – 2021 annual report | 87
The 2020 non-current other receivables included a French tax receivable of 2.7 million EUR, related to tax 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 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 28.4 million EUR (2020: 16.8 million
EUR) which increased due to higher business activity. They also include Chinese bank notes (these are receivables with
banks with a term of more than 3 months) for 23.0 million EUR in 2021 (2020: 20.0 million EUR). 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
The increase of inventories can be mainly explained by higher production volumes and by the impact of increased raw
material prices and energy costs, mainly within the operating segments Machines & Technologies, Agro and Industrial
Solutions.
There are no inventories pledged as security. In 2021 inventories for 1,895.4 million EUR (2020: 1,468.2 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 -1.8
million EUR (2020: -12.7 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.
(Million EUR)
2021
2020
Raw materials
131.6
77.9
Work in progress
21.5
19.3
Finished goods
286.8
245.5
Goods purchased for resale
31.3
36.2
Spare parts
15.0
14.7
Total
486.2
393.4
Picanol Group – 2021 annual report | 88
18. CASH AND CASH EQUIVALENTS
The term accounts have a maximum maturity of 1 month.
As per December 31, 2021, the cash and cash equivalents include 44.6 million USD or 39.4 million EUR (2020: 34.1 million
USD or 27.8 million EUR). The cash held within Tessenderlo Group amounts to 320.3 million EUR (2020: 230.1 million
EUR)
As per year end 2021, an investment in a short term bank note for 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’s 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
17,700,000
17,700,000
Issued for cash
-
-
On issue at December 31 - fully paid
17,700,000
17,700,000
The number of shares comprised 15,996,140 registered shares (2020: 15,995,108) and 1,703,860 ordinary shares (2020:
1,704,892). The shares are without nominal value. The holders of Picanol 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 March 16, 2020, 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 on December 31, 2021 amounted to 33,531,234.
On the annual shareholders’ meeting of Picanol nv on May 17, 2021, the shareholders approved the proposal of the
Board of Directors not to pay out a dividend for the 2020 financial year.
No offering of shares to be subscribed by staff took place in 2021.
AUTHORIZED CAPITAL
According to the decision of the extraordinary general meeting of March 16, 2020, 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 4,440,000 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 March 16, 2020, 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 favor 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
(Million EUR)
Note
2021
2020
Term accounts
26
160.1
204.7
Current accounts
26
206.7
141.2
Cash and cash equivalents
366.7
345.9
Bank overdrafts
22/26
-0.1
0.0
Cash and cash equivalents in the statement of cash flows
366.7
345.9
Picanol Group – 2021 annual report | 89
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.
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 2.2 million EUR. Generally, this reserve cannot be distributed to the shareholders other than upon
liquidation.
The amount of dividends payable to Picanol 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.
DIVIDENDS
The Board of Directors will propose to the shareholders, at the annual shareholders’ meeting of May 16, 2022, to pay
out a dividend of 0.2 EUR per share 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 3% (2020: 11%). 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.
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
Adjusted weighted average number of ordinary shares at December 31*
17,700,000
17,700,000
Profit (+) / loss (-) attributable to equity holders of the company (million EUR)
160.7
55.4
Basic earnings per share (in EUR)
9.1
3.1
*
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.
8
Refer to Alternative Performance Measures for the calculation of the gearing ratio.
Picanol Group – 2021 annual report | 90
21. NON-CONTROLLING INTEREST
Tessenderlo Group became a subsidiary with a non-controlling interest on January 1,
2019. During 2021 Picanol, through
its subsidiary Verbrugge nv, acquired 1,627,194 shares of Tessenderlo Group for a total value of 55.7 million EUR (at an
average share price of 34.2 EUR). These purchases resulted in a decrease of the non-controlling interest with 3.8% from
53.2% to 49.4% per December 31, 2021.
In accordance with article 7:53 of the Belgian Code of Companies and Associations, Tessenderlo Group has introduced 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. On December 31, 2021, Picanol nv (through its subsidiary Verbrugge nv)
held 62,9% of the voting rights of Tessenderlo Group.
There are no restrictions on dividend distribution for example from specific debt covenants imposed on Tessenderlo
Group.
Non-controlling interest percentage
Country
2021
2020
Tessenderlo Group nv
BE
49.4%
53.2%
Summary financial information of subsidiaries with a non-controlling interest at 100% as per December 31, 2021:
(Million EUR)
As reported
Fair value
adjustments
After fair value
adjustment
FIXED ASSETS
1,105.4
378.8
1,484.3
Goodwill
32.3
-32.3
0.0
Intangible fixed assets
109.2
291.4
400.6
Tangible fixed assets
886.6
119.7
1 006.3
Other fixed assets
77.4
0.0
77.4
CURRENT ASSETS
1,101.6
0.0
1,101.6
Inventories
393.4
0.0
393.4
Other current assets
708.2
0.0
708.2
NON-CURRENT LIABILITIES
477.9
102.8
580.7
Deferred tax liabilities
65.4
99.1
164.5
Loans and borrowings
193.6
3.7
197.3
Other liabilities > 1 year
218.9
0.0
218.9
CURRENT LIABILITIES
597.7
0.0
597.7
Net assets
1,131.4
276.0
1,407.4
Non-controlling interest %
49.4%
Non-controlling interest
695.6
(Million EUR)
As reported
Fair value
adjustments
After fair value
adjustment
Revenue
2,081.5
2,081.5
Profit (+) / loss (-) for the period
188.3
-38.1
150.2
Cash flow from operating activities
248.1
248.1
Cash flow from investing activities
-79.0
-79.0
Cash flow from financing activities
-80.1
-80.1
Net increase / (decrease) in cash and cash equivalents
89.1
89.1
For more information on the financial statements of the Tessenderlo Group, we refer to the annual report which is
published on the website: www.tessenderlo.com.
Picanol Group – 2021 annual report | 91
22. LOANS AND BORROWINGS
(Million EUR)
Note
2021
2020
Non-current loans and borrowings
196.2
393.2
Current loans and borrowings
215.3
69.8
Total loans and borrowings
411.6
463.0
Cash and cash equivalents
18
-366.7
-345.9
Bank overdrafts
18
0.1
0.0
Short term investments
18
-10.0
-20.0
Net loans and borrowings
34.9
97.1
As per year-end 2021, the group net financial debt amounted to 34.9 million EUR, implying a leverage
9
of 0.1 and
including a lease liability, in accordance with IFRS 16 Leases, for an amount of 56.5 million EUR (2020: 56.3 million EUR).
Excluding the impact of IFRS 16 Leases, the net cash position would have amounted to 21.6 million EUR as per year-end
2021, compared to a net financial debt of 40.8 million EUR as per year-end 2020.
Reconciliation of changes in net loans and borrowings arising from cash flows and non-cash changes:
Note
Bank overdrafts
Cash and cash
equivalents
Short term
investments
Lease payable
within 1 year
Lease payable
more than 1
year
Current loans
and borrowings
Non-current
loans and
borrowings
Total
Net financial debt as per
December 31, 2020
0.0
345.9
20.0
-19.6
-37.1
-50.3
-356.1
-97.1
Cash flows, net
0.0
17.6
-10.0
22.2
0.0
49.4
0.0
79.1
IFRS 16 new leases and
lease modifications
0.0
0.0
0.0
-2.2
-18.7
0.0
0.0
-20.9
Depreciate revaluation
on bond
0.0
0.0
0.0
0.0
0.0
-2.2
4.8
2.6
Transfers
0.0
0.0
0.0
-18.5
18.5
-193.7
193.7
0.0
Effect of exchange rate
differences
0.0
3.3
0.0
-0.5
-0.8
-0.1
-0.4
1.5
Net financial debt as per
December 31, 2021
-0.1
366.7
10.0
-18.5
-38.1
-196.9
-158.1
-34.9
Note
Bank overdrafts
Cash and cash
equivalents
Short term
investments
Lease payable
within 1 year
Lease payable
more than 1
year
Current loans
and borrowings
Non-current
loans and
borrowings
Total
Net financial debt as per
December 31, 2019
-0.1
290.3
0.0
-22.7
-44.9
-76.2
-381.4
-235.1
Cash flows, net
0.1
62.6
20.0
24.2
0.0
53.7
-5.6
155.0
Acquisitions through
business combinations
0.0
-5.7
0.0
-0.1
-0.1
0.0
0.0
-5.9
IFRS 16 new leases and
lease modifications
0.0
0.0
0.0
-2.2
-12.6
0.0
0.0
-14.8
Depreciate revaluation
on bond
0.0
0.0
0.0
0.0
0.0
0.0
2.6
2.6
Transfers
0.0
0.0
0.0
-19.5
19.5
-27.8
27.8
0.0
Effect of exchange rate
differences
0.0
-1.4
0.0
0.6
0.9
0.1
0.5
0.7
Net financial debt as per
December 31, 2020
0.0
345.9
20.0
-19.6
-37.1
-50.3
-356.1
-97.1
9
Refer to Alternative Performance Measures for the calculation of the leverage ratio.
Picanol Group – 2021 annual report | 92
NON-CURRENT AND CURRENT LOANS AND BORROWINGS
(Million EUR)
Note
2021
2020
Non-current loans and borrowings
Non-current lease liabilities
38.1
37.0
Bonds
59.5
229.8
Credit facility T-Power nv
90.1
115.8
Credit institutions
8.5
10.6
Total
196.2
393.2
Current loans and borrowings
Current lease liabilities
18.5
19.6
Bonds
167.7
0.0
Current portion credit facility T-Power nv
25.7
25.7
Credit institutions
3.5
5.5
Commercial paper
0.0
19.0
Total
26
215.3
69.8
The non-current loans and borrowings include a bond, issued in July 2015, with a maturity of 10 years (the “2025 bond”),
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 liquidity risk as well as the interest cost (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 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, US) 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.
Within segment Machines & Technologies, the current loans with credit institutions include export financing for 0.2
million EUR (1.9 million EUR in 2020) which have been discounted with the credit insurance company but for which the
risk has not yet been transferred as the first installment date has not yet past.
The lease liability, in accordance with IFRS 16 Leases, amounts to 56.5 million EUR (2020: 56.3 million EUR), of which 38.1
million EUR is included in non-current and 18.4 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 was unused at the end of
December 2021 (December 31, 2020: 19.0 million EUR). These were previously issued by Tessenderlo Group nv 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).
Picanol Group – 2021 annual report | 93
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
11.2
4.7
2.6
18.5
Other current loans and borrowings
195.3
0.9
0.7
196.9
Non-current lease liabilities
25.6
6.1
6.4
38.1
Other non-current loans and borrowings
153.4
4.7
0.0
158.1
Total loans and borrowings
385.4
16.4
9.7
411.6
In percentage of total loans and borrowings
93.7%
4.0%
2.4%
100.00%
Analysis of non-current and current loans and borrowings by currency, expressed in EUR (2020):
(Million EUR)
EUR
USD
Other
Total
Current lease liabilities
12.3
4.7
2.5
19.5
Other current loans and borrowings
49.1
1.1
0.0
50.2
Non-current lease liabilities
26.3
4.0
6.8
37.1
Other non-current loans and borrowings
351.0
5.2
0.0
356.2
Total loans and borrowings
438.7
15.0
9.3
463.0
In percentage of total loans and borrowings
94.8%
3.2%
2.0%
100.00%
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
2.2
49.8
7.9
59.9
2.5
61.0
7.7
71.2
Current
0.8
0.0
0.6
1.5
1.1
0.0
0.7
1.8
Total
3.0
49.8
8.5
61.4
3.6
61.0
8.4
72.9
2021
(Million EUR)
Early retirement
provision
Defined benefit
liability
Other employee
benefits
Total
Balance at December 31, 2020
3.6
61.0
8.4
72.9
Additions
1.0
7.8
1.0
9.8
Use of provision
-1.0
-4.6
-0.3
-5.8
Reversal of provisions
-0.6
-14.5
-0.4
-15.6
Translation differences
0.0
0.1
-0.1
0.0
Balance at December 31, 2021
3.0
49.8
8.5
61.4
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
Picanol Group – 2021 annual report | 94
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.
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.
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.
▪ 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.
Picanol Group – 2021 annual report | 95
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
-123.6
-124.9
Present value of wholly unfunded obligations
-28.6
-32.3
Total present value of obligations
-203.4
-207.0
Fair value of plan assets
162.6
151.1
Net defined benefit (liability)/asset
-40.7
-55.9
Amounts in the statement of financial position:
Liabilities
-49.8
-61.0
Assets
16
9.1
5.1
Net defined benefit (liability)/asset
-40.7
-55.9
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
-207.0
150.9
-55.9
-197.3
145.3
-52.0
Included in profit or loss
Current service cost
-7.3
0.0
-7.3
-6.8
0.0
-6.8
Past service (cost)/benefit
-0.9
0.0
-0.9
0.0
0.0
0.0
Current service cost -
Employee contribution
0.0
0.4
0.4
0.0
0.4
0.4
Interest (cost) / income
-1.4
1.4
0.0
-2.0
1.9
-0.2
Administrative expenses
0.0
-0.4
-0.4
0.0
-0.4
-0.4
Total included in profit or
loss
-9.6
1.4
-8.1
-8.8
1.9
-6.9
Included in other
comprehensive income
Remeasurements:
- Gain/(loss) from change
in demographic
assumptions
0.5
0.0
0.5
1.6
0.0
1.6
- Gain/(loss) from change
in financial assumptions
7.8
-1.3
6.6
-12.1
0.0
-12.1
- Experience gains/(losses)
3.3
7.5
10.8
0.3
9.2
9.5
Total included in other
comprehensive income
11.7
6.2
17.9
-10.2
9.2
-1.0
Other
Exchange differences on
foreign plans
-4.1
4.4
0.3
3.4
-3.4
0.0
Contributions by employer
0.0
5.1
5.1
0.0
4.8
4.8
Benefits paid
5.6
-5.6
0.0
6.7
-6.7
0.0
Change in consolidation
scope (acquisitions)
0.0
0.0
0.0
-0.8
0.0
-0.8
Total other
1.6
3.8
5.4
9.3
-5.4
4.0
Balance at December 31
-203.4
162.6
-40.7
-207.0
150.9
-55.9
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
Picanol Group – 2021 annual report | 96
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 higher than expected return on plan assets.
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
-4.7
-3.9
Other operating income and expenses
-2.0
-1.5
EBIT adjusting items
0.0
0.0
Finance (costs) / income - net
9
-0.1
-0.3
Total
-8.1
-6.9
The actual return on plan assets in 2021 was +10.0 million EUR (2020: +10.2 million EUR).
The group expects to contribute 5.1 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
0.0
4.0
4.0
2.5%
0.0
4.0
4.0
2.7%
Qualifying insurance policies
0.0
43.4
43.4
26.7%
0.0
42.2
42.0
27.8%
Cash and cash equivalents
0.0
26.6
26.6
16.3%
0.0
4.4
4.4
2.9%
Investment funds
86.6
0.0
86.6
53.2%
98.4
0.0
98.4
65.2%
Tessenderlo Group bond with
maturity date July 15, 2022
2.1
0.0
2.1
1.3%
2.1
0.0
2.1
1.4%
Total
88.8
74.0
162.6
100.0%
100.6
50.6
150.9
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 December 31
1.1%
0.7%
Future salary increases
1.9%
1.4%
Inflation
2.3%
2.0%
Assumptions regarding future mortality are based on published statistics and mortality tables, and are the following:
Mortality table
Belgium
MR/FR – 3
United Kingdom
110% S3PMA, 105% S3PFA, CMI_2019 [1.50% M, 1.25% F] [S-kappa=7, A=0.25%] 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)
Picanol Group – 2021 annual report | 97
strategy and is closely followed by the investment managers. For the UK plan the next triennial funding valuation will be
completed in 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%
-6.3%
-0.5%
6.9%
Salary growth rate
+0.5%
0.9%
-0.5%
-0.8%
Pension growth/inflation rate
+0.5%
3.7%
-0.5%
-3.4%
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 are 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.
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
0.0
22.1
22.1
0.0
23.2
23.2
Restructuring
1.6
0.0
1.6
1.0
0.0
1.0
Other
7.1
7.7
14.8
6.3
6.7
13.0
Total
13.6
138.3
151.9
15.1
141.8
157.0
Environment
Dismantlement
Restructuring
Other
Total
Balance at December 31, 2020
119.7
23.2
1.0
13.1
157.0
Additions
0.0
0.5
1.7
3.7
6.0
Use of provisions
-5.7
0.0
-1.2
-0.5
-7.3
Reversal of provisions
0.0
-1.9
0.0
-1.5
-3.4
Effect of discounting
-0.8
0.0
0.0
0.0
-0.8
Translation differences
0.2
0.3
0.0
0.0
0.5
Balance at December 31, 2021
113.4
22.1
1.6
14.9
152.0
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
Picanol Group – 2021 annual report | 98
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. 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).
Picanol Group – 2021 annual report | 99
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
0.0
8.9
Other amounts payable
0.6
1.8
Total
4.1
14.5
Current trade and other payables
Trade payables
365.2
255.4
Remuneration and social security
113.5
82.6
VAT and other taxes
12.1
13.3
Accrued charges and deferred income
9.3
10.0
Trade and other payables from related parties
4.0
4.0
Other amounts payable
9.7
8.8
Total
513.9
374.0
The non-current remuneration and social security per December 31,2020 (8.9 million EUR) related to the accrued charges
for a long-term incentive plan for members of senior management within Tessenderlo Group. 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.
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 and the increase of raw material, energy
and transport costs, mainly within the operating segments Machines & Technologies, 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
USD (US dollar). Movements in foreign currency therefore may adversely affect the group’s business, results of operation
or financial condition.
The main management tools to hedge foreign currency risks 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.
Picanol Group – 2021 annual report | 100
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
37.0
452.1
21.3
391.3
2.4
Liabilities
-29.7
-275.8
-25.2
-150.9
-4.6
Gross exposure
7.2
176.3
-3.9
240.4
-2.2
Foreign currency swaps
-11.2
0.0
-5.5
0.0
-1.0
Net exposure
-4.0
176.3
-9.4
240.4
-3.2
Net exposure (in EUR)
-4.0
155.7
-9.3
195.9
-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. 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%
-24.5
-48.8
-10%
29.9
59.6
At December 31, 2020
USD
+10%
-30.0
-44.2
-10%
36.7
54.0
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 or credit manager 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 elaborated a credit insurance program to protect accounts
receivable from third party customers against non-payment. The large majority of legal entities 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 5 to 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 very short term at highly rated international banks.
The maximum exposure to credit risk amounts to 862.9 million EUR as per December 31, 2021 (2020: 772.5 million EUR).
This amount consists of current and non-current trade and other receivables (475.1 million EUR, note 16 - Trade and
other receivables), the loan granted (10.5 million EUR, note 14 - Investments accounted for using the equity method),
Picanol Group – 2021 annual report | 101
short term investments (10.0 million EUR), current derivative financial instruments (0.6 million EUR) and cash & cash
equivalents (366.7 million EUR, note 18 - Cash and cash equivalents).
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
Machines & Technologies
55.8
44.3
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
388.2
281.7
The ageing of trade receivables at the reporting date was:
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
-6.0
-7.5
Use of impairment loss
0.9
0.4
Reversal / (recognition) of impairment losses
0.6
1.1
Other movements
0.0
0.0
Balance at December 31
16
-4.5
-6.0
(Million EUR)
Note
2021
2020
Gross
Amounts
written off
Gross
Amounts
written off
Not past due
347.1
0.0
247.5
0.0
Past due 0-120 days
39.5
-0.4
34.0
-0.6
Past due 121-365 days
2.8
-0.9
1.5
-0.6
More than one year
3.3
-3.2
4.9
-4.8
Total
16
392.7
-4.5
287.8
-6.0
Picanol Group – 2021 annual report | 102
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)
Note
2021
2020
Fixed rate instruments
Cash and cash equivalents
18
160.1
204.7
Short term investments
18
10.0
20.0
Loans and borrowings
22
295.0
301.6
Variable rate instruments
Cash and cash equivalents
18
206.7
141.2
Bank overdrafts
22
0.1
0.0
Loans and borrowings
22
116.5
161.4
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). The remaining loans and borrowings with a variable rate in 2020 can be mainly
explained by the commercial paper program of 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.
In order to limit this risk, Tessenderlo 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.
In addition, Picanol nv has non-committed credit lines for 52.1 million EUR excluding bank guarantees or 69.1 million
EUR including bank guarantees.
The group regularly projects short and long-term forecasts in order to adapt financial means to forecasted needs.
Picanol Group – 2021 annual report | 103
The following are the contractual maturities of loans and borrowings, including interest payments:
(Million EUR)
2021
Note
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
167.7
170.1
170.1
0.0
0.0
Bond with maturity date July 15, 2025
59.5
66.4
2.0
64.4
0.0
Credit facility T-Power nv
115.8
117.6
26.1
91.5
0.0
Credit institutions
12.0
12.8
3.7
7.7
1.3
Bank overdrafts
10
0.1
0.1
0.1
0.0
0.0
Finance lease liabilities
56.6
61.6
19.0
31.9
10.6
Total
22
411.6
428.6
221.0
195.6
12.0
Derivatives
Foreign currency swaps
0.1
0.0
0.0
0.0
0.0
Inflow
0.0
11.3
11.3
0.0
0.0
Outflow
0.0
-11.2
-11.2
0.0
0.0
Interest rate swaps
-13.5
0.0
0.0
0.0
0.0
Inflow
0.0
0.2
0.0
0.2
0.0
Outflow
0.0
-13.6
-5.3
-8.3
0.0
Total
-13.4
-13.4
-5.2
-8.1
0.0
(Million EUR)
2020
Note
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
169.9
177.1
4.9
172.2
0.0
Bond with maturity date July 15, 2025
59.9
68.8
2.1
66.8
0.0
Syndicated credit facility T-Power nv
141.5
142.7
26.0
103.7
12.9
Credit institutions (commercial paper)
20.9
20.9
20.9
0.0
0.0
Credit institutions
14.2
15.2
3.8
9.2
2.1
Bank overdrafts
0.0
0.0
0.0
0.0
0.0
Finance lease liabilities
56.5
61.3
19.7
31.1
10.5
Total
22
463.0
486.0
77.5
383.0
25.5
Derivatives
Foreign currency swaps
0.0
0.0
0.0
0.0
0.0
Inflow
0.0
0.0
0.0
0.0
0.0
Outflow
0.0
6.5
6.5
0.0
0.0
Interest rate swaps
0.0
-6.6
-6.6
0.0
0.0
Inflow
-21.0
0.0
0.0
0.0
0.0
Outflow
0.0
-20.8
-6.6
-13.8
-0.3
Total
-21.0
-20.8
-6.7
-13.8
-0.3
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.
10
A bank overdraft is a flexible borrowing facility on a bank current account, which is repayable on demand.
Picanol Group – 2021 annual report | 104
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
Leasing liabilities
22
-38.1
-39.3
-37.0
-38.1
Credit institutions
22
-8.5
-8.8
-10.6
-11.8
Bonds (maturity date in 2022*and 2025)
22
-59.5
-60.5
-229.8
-230.7
* only applicable for the 2020 figures
The bonds issued in 2015 with a maturity of 10 years (the “2025 bonds”) were 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
-
-11.8
-25.3
-
-21.0
-16.1
-37.1
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.
Picanol Group – 2021 annual report | 105
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.
The table below indicates the underlying contractual amount of the outstanding foreign currency contracts per currency
at year-end (selling of foreign currencies):
(Million)
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).
Picanol Group – 2021 annual report | 106
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%
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
+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
40.2
29.6
Guarantees given on behalf of third parties
1.5
1.7
Guarantees received from third parties
7.2
3.7
Commitments related to capital expenditures
57.9
33.0
Guarantees given by third parties on behalf of the group mainly relate to the fulfillment of environmental obligations for
21.0 million EUR of Tessenderlo Group nv (2020: 20.8 million EUR). The remaining balance consists of bank guarantees
for commercial purpose and numerous other guarantees to secure financing, 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.
Capital expenditure contracted for at the end of the reporting period, but not yet incurred, amounts to 57.9 million EUR
(2020: 33.0 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
Picanol Group – 2021 annual report | 107
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. 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).
Picanol Group – 2021 annual report | 108
29. RELATED PARTIES
Picanol Group has a related party relationship with its subsidiaries, joint ventures, its main shareholder, 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.
The controlling shareholder of the Picanol Group is Mr. Luc Tack through Symphony Mills nv and Artela nv (see
shareholders’ structure on page 30 in the Corporate Governance Statement).
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 and other investments). 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.
TRANSACTIONS WITH THE MAIN SHAREHOLDER
(Million EUR)
2021
2020
Trade and other receivables
0.0
0.0
Trade and other payables
0.0
-0.2
Revenue
0.8
1.1
Cost of goods sold
0.0
0.0
For the shareholders’ structure we refer to the Corporate Governance Statement on page 30.
The transactions are commercial transactions related to the sales of weaving machines and spare parts to companies
linked to the main shareholder.
TRANSACTIONS WITH JOINT-VENTURES
11
(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.
11
We refer to note 14 - Investments accounted for using the equity method for more information on the group’s joint ventures.
Picanol Group – 2021 annual report | 109
TRANSACTIONS WITH THE MEMBERS OF THE EXECUTIVE COMMITTEE
(Million EUR)
2021
2020
Short-term employee benefits
5.6
2.7
Post-employment benefits
0.2
0.1
Total
5.8
2.8
The Executive Committee on December 31, 2021, consists of Luc Tack (CEO) en Stefaan Haspeslagh (CFO) and was
unchanged from previous year.
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 1.5 million EUR fix and 4.1 million EUR variable employee benefits (2020: 1.6
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) and 2.9 million EUR long term variable compensation (2020: nil), both
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.
There was no new emission of warrants in 2021 and no warrants were exercised by members of the ExCom 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 ExCom.
TRANSACTIONS WITH THE MEMBERS OF THE BOARD OF DIRECTORS
Members
Remuneration in EUR
2021
2020
Stefaan Haspeslagh (executive director)*
Fixed annual fee
45,000
42,500
Additional fixed fee for chairman of the Board
132,500
90,000
Variable fee per half day attended
21,000
24,000
Total remuneration
198,500
156,500
Luc Tack (executive director)*
Fixed annual fee
45,000
42,500
Variable fee per half day attended
21,000
24,000
Total remuneration
66,000
66,500
Patrick Steverlynck, as permanent
representative of Pasma nv
(non-executive director)
Fixed annual fee
17,500
17,500
Variable fee per half day attended
12,000
12,000
Total remuneration
29,500
29,500
Jean Pierre Dejaeghere, as permanent
representative of nv Kantoor Torrimmo
(independent non-executive director)
Fixed annual fee
17,500
17,500
Variable fee per half day attended
12,000
12,000
Total remuneration
29,500
29,500
Luc Van Nevel, as permanent
representative of The Marble BV
(independent non-executive director)
Fixed annual fee
17,500
17,500
Variable fee per half day attended
12,000
12,000
Total remuneration
29,500
29,500
Chantal De Vrieze, as permanent
representative of 7 Capital sprl
(independent non-executive director)
Fixed annual fee
17,500
17,500
Variable fee per half day attended
12,000
12,000
Total remuneration
29,500
29,500
Ann Vereecke, as permanent
representative of Ann Vereecke bva
(independent non-executive director)
Fixed annual fee
17,500
17,500
Variable fee per half day attended
12,000
12,000
Total remuneration
29,500
29,500
Total
412,000
370,500
*include amounts paid in the Board of Picanol nv and Tessenderlo Group
30. AUDITOR’S FEES
Picanol Group – 2021 annual report | 110
KPMG Bedrijfsrevisoren BV, with Mr. Patrick De Schutter as authorized representative, has been appointed as statutory
auditor for Picanol Group since fiscal year 2018 and for Tessenderlo Group since fiscal year 2019.
(Million EUR)
2021
Audit
Audit related
Other
Total
KPMG (Belgium)
0.4
0.0
0.1
0.4
KPMG (Outside Belgium)
0.7
0.0
0.0
0.7
Total
1.1
0.0
0.1
1.1
(Million EUR)
2020
Audit
Audit related
Other
Total
KPMG (Belgium)
0.4
0.0
0.1
0.4
KPMG (Outside Belgium)
0.7
0.0
0.0
0.7
Total
1.1
0.0
0.1
1.1
31. SUBSEQUENT EVENTS
▪ Following the launch of the new Connect generation weaving machines in 2021, Picanol introduced the OmniPlus-i
TC Connect in January 2022. This dedicated execution for the weaving of tire cord fabrics has now been upgraded to
the latest airjet technology and combined with the Connect generation features.
▪ In February 2022, Tessenderlo Group announced that it intends to acquire the production plant and the associated
business of Pipelife France in Gaillon (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 the group.
▪ The group also announced that its growth unit Violleau plans to construct a new production line for organic fertilizers
in Vénérolles (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), within the Tessenderlo Group Agro segment. 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.
Picanol Group – 2021 annual report | 111
32. GROUP COMPANIES
Listed below are all the group companies. The total number of consolidated companies is 76
12
. List of the consolidated
companies on December 31, 2021, accounted for by the full consolidation method:
Country
Entity
Address
Belgian company
number
Ownership
Belgium
Picanol nv
8900 Ieper
0405502362
Parent Company
Belgium
Proferro nv
8900 Ieper
0438243426
100%
Belgium
PsiControl nv
8900 Ieper
0437446145
100%
Belgium
Verbrugge nv
8900 Ieper
0441554490
100%
Belgium
Melotte nv
3520 Zonhoven
0407155421
100%
Belgium
Picanol Group nv
8900 Ieper
0643795829
100%
Belgium
Tessenderlo Group *
1050 Brussels
0412101728
50.4%
France
Burcklé SAS (in liquidation)
68290 Bourbach-le-Bas
100%
Romania
PsiControl Srl
505400 Rasnov, Brasov County
100%
US
Picanol of America
Greenville SC 29605
100%
Brasil
Picanol Do Brazil
Americana/ SP CEP 13471-030
100%
China
Picanol (Suzhou Industrial Park)
Textile Machinery Co. Ltd.
Suzhou 215122
100%
China
Picanol (Suzhou) Trading Co., Ltd.
Suzhou 215122
100%
India
Picanol India
New Delhi, India, 110 015
100%
Indonesia
PT. Picanol Indonesia
Bandung 40261, West Java
100%
Mexico
Picanol de Mexico
08400, Mexico D.F.
100%
Turkey
Picanol Tekstil Makinalari
34149 Yesilkoy, Istanbul
100%
Tessenderlo Group*: since January 1, 2019, Tessenderlo Group is consolidated according to the full consolidation
method. List of the consolidated companies of Tessenderlo Group by the full consolidation method where the ownership
is the % held by Tessenderlo Group:
Country
Entity
Address
Belgian company
number
Ownership
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%
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.
Picanol Group – 2021 annual report | 112
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%
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%
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%
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 of Tessenderlo Group on December 31, 2021 accounted for by the equity method:
Country
France
Etablissements Michel SAS
31800 Villeneuve de Rivière
50%
China
PB Shengda (Zhejiang) Biotechnology Co., Ltd
Zhoushan City, Zhejiang Province
50%
US
Jupiter Sulphur LLC
Wilmington, DE 19801
50%
List of the non-consolidated companies on December 31, 2021 due to their insignificant impact on the consolidated
figures:
Country
Belgium
Syndicaat van Belgische
textielmachinebouwers
1030 Brussel
34%
Picanol Group – 2021 annual report | 113
33. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
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 of 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).
▪ 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.
Picanol Group – 2021 annual report | 114
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 (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.
Picanol Group – 2021 annual report | 115
AUDITOR’S REPORT
STATUTORY AUDITOR’S REPORT TO THE GENERAL MEETING OF PICANOL NV ON THE CONSOLIDATED FINANCIAL
STATEMENTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2021
In the context of the statutory audit of the consolidated financial statements of Picanol 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 17 May 2021, 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 2023. We have performed the statutory audit of the consolidated financial statements of the Group for 4
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
3.032.000.(000) and the consolidated statement of profit or loss shows a profit for the year of EUR 237.700.(000).
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.
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 goodwill, intangible assets and property, plant and equipment
We refer to Notes 11, 12 and 13 being respectively ‘Property, plant and equipment’, ‘Goodwill’ and ’Intangible assets’ of
the consolidated financial statements.
Picanol Group – 2021 annual report | 116
▪ Description
Goodwill, intangible assets and property plant and equipment amount to EUR 1.529,7 million as at 31 December
2021 and represent 50,5% of the Group’s total assets as at 31 December 2021.
The Group performs a yearly impairment assessment over goodwill and in case of triggering events the Group
performs an impairment assessment over goodwill, intangible assets and property, plant and equipment (‘PPE’). This
assessment is performed for each smallest group of assets that generate largely independent cash flows (the cash
generating unit or ‘CGU’). Management prepares a recoverable amount assessment by discounting future cash flow
projections to determine whether these assets are impaired at the reporting date as well as the level of impairment
charge to be recognized.
Impairment of goodwill, intangible assets and property, plant and equipment is identified as a key audit matter due
its significance to the balance sheet total and the level of judgement required by management and potential
management bias in the assessment of impairment, which principally related to the inputs used in both forecasting
and discounting future cash flows to determine the recoverable amount.
▪ Our audit procedures
Our audit procedures included among others:
▪ 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 by
involving our own valuation specialists;
▪ Testing the mathematical accuracy of the discounted cash flow models;
▪ Performing sensitivity analyses around the key assumptions used for the determination and discounting of cash
flow forecasts, in particular EBIT, CAPEX, weighted average cost of capital and growth rates used by the Group;
and
Assessing the appropriateness of the Group’s disclosures in respect of impairment of goodwill, intangible assets and
property plant and equipment as included in Notes 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, small changes in key assumptions used to determine
the obligations and fair value of the Group’s pension plans.
▪ Our audit procedures
Our audit procedures included among others:
▪ We obtained an understanding of the Group’s valuation process;
▪ We assessed the competence, objectivity and capabilities of the external actuarial experts engaged by
management;
Picanol Group – 2021 annual report | 117
▪ We challenged 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;
▪ With the assistance of our own financial instrument specialist, we reconciled the fair value of the plan assets
with direct external confirmations and verified the adequacy of the fair value of the plan assets;
▪ We assessed overall reasonableness of the valuation outcome; and
▪ We assessed the appropriateness of the Group’s disclosures in respect of employee benefits, which are included
in Note 23 to the consolidated financial statements.
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;
▪ 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;
Picanol Group – 2021 annual report | 118
▪ 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.
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
▪ Corporate Governance statement 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 attached to the board of directors’ annual report on the consolidated financial statements, which is
the 2021 Sustainability 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 the Global Reporting Initiative
framework (GRI). In accordance with art 3:80 §1, 1
st
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 mentioned in the
separate 2021 Sustainability Report.
Picanol Group – 2021 annual report | 119
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.
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 English version
of the digital consolidated financial statements as per 31 December 2021, included in the annual financial report of
Picanol 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, March 28, 2022
KPMG Bedrijfsrevisoren - Réviseurs d’Entreprises
Statutory Auditor
represented by
Patrick De Schutter
Bedrijfsrevisor / Réviseur d’Entreprises
Picanol Group – 2021 annual report | 120
STATUTORY FINANCIAL REPORT
BALANCE SHEET OF PICANOL NV
(Million EUR)
2021
2020
Total assets
Non-current assets
121.8
122.3
Other intangible assets
0.6
0.8
Property, plant and equipment
13.6
14.1
Financial assets
107.7
107.4
Current assets
635.4
537.5
Non-current trade and other receivables
522.1
415.3
Inventories
44.3
24.2
Current trade and other receivables
38.2
30.6
Other investments
0.0
20.0
Cash and cash equivalents
29.8
46.1
Prepaid expenses and accrued income
1.0
1.3
Total assets
757.2
659.9
Total liabilities
Shareholders' equity
602.3
576.3
Issued capital
22.2
22.2
Share premium
1.5
1.5
Reserves
45.2
45.2
Retained earnings
533.4
507.4
Capital grants
0.0
0.0
Provisions and deferred taxes
5.8
5.9
Provisions
5.8
5.9
Deferred taxes
0.0
0.0
Liabilities
149.2
77.7
Liabilities due in more than one year
0.0
0.0
Liabilities due within one year
146.1
75.2
Accrued expenses and deferred income
3.0
2.5
Total liabilities
757.2
659.9
Picanol Group – 2021 annual report | 121
PROFIT AND LOSS STATEMENT OF PICANOL NV
(Million EUR)
2021
2020
Total operating income
510.1
317.1
Sales
472.3
300.3
Change in work in progress, finished goods and orders in progress (increase+/decrease-)
23.2
3.6
Production capitalized
0.0
0.0
Other operating income
14.6
13.1
Non-recurring operating income
0.0
0.0
Total operating charges
-485.7
-304.7
Raw materials and goods purchased for resale
-373.0
-212.8
Services and other goods
-61.6
-51.4
Wages, salaries, social charges and pensions
-48.9
-38.9
Depreciations and amortizations on formation expenses, tangible and intangible assets
-3.1
-3.4
Amounts written-off stocks and trade receivable ( charges (-) / write-back (+) )
1.4
1.2
Provision for liabilities and charges (utilizations and write-backs less charges)
0.1
1.1
Other operating charges
-0.5
-0.4
Non-recurring operating charges
-0.1
0.0
Operating result
24.4
12.5
Finance income
13.7
8.9
Finance costs
-3.0
-2.9
Profit before taxes
35.0
18.4
Income taxes
-5.5
-1.7
Deferred taxes
Profit (+) / losses (-)
29.5
16.8
Untaxed reserves
0.0
0.0
Profit (+) / losses (-) for the year to be allocated
29.5
16.8
ALLOCATIONS AND DISTRIBUTIONS
(Million EUR)
2021
2020
The Picanol nv Board of Directors proposes to allocate the
- Profits, being
29.5
16.8
- Increased by prior years' retained earnings
507.4
490.6
Totaling:
536.9
507.4
In the following manner:
- Reserves
- Dividends
3.5
0.0
- Retained earnings
533.4
507.4
Totaling:
536.9
507.4
Picanol Group – 2021 annual report | 122
EXTRACT FROM THE PICANOL 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 Picanol 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 Picanol nv, Steverlyncklaan 15,
8900 Ieper.
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.
An integral version of the statutory financial statements, including the related reports is published on the
company website: www.picanolgroup.com.
The statutory auditor's report is unqualified and certifies that the non-consolidated financial statements of
Picanol nv prepared in accordance with Belgian GAAP for the year ended December 31, 2021, give a true and fair
view of the financial position and results of Picanol nv in accordance with all legal and regulatory dispositions.
Picanol Group – 2021 annual report | 123
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 expenditure
Amount of money spent to upgrade, acquire or maintain property, plant and equipment (PP&E) and other
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.
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 minus cash and cash equivalents and bank overdrafts.
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.
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.
Picanol Group – 2021 annual report | 124
ALTERNATIVE PERFORMANCE MEASURES
The following alternative performance measures are considered to be relevant in order to compare the results
over the period 2021 - 2020 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
239.9
170.2
Gains and losses on disposals
6
2.6
1.0
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
-1.0
-4.4
EBIT (Profit (+) / loss (-) from operations)
242.0
158.2
Reconciliation from Adjusted EBITDA to EBIT
(Million EUR)
Note
2021
2020
Adjusted EBITDA
3
430.3
361.7
Gains and losses on disposals
6
2.6
1.0
Restructuring
6
-1.7
-0.5
Provisions and claims
6
4.0
-5.0
Other income and expenses
6
-1.0
-4.4
EBITDA
434.2
352.8
Depreciation
8
-190.4
-191.5
Impairment losses
8
-1.9
-3.0
EBIT (Profit (+) / loss (-) from operations)
242.0
158.2
Reconciliation gearing
(Million EUR)
Note
2021
2020
Non-current loans and borrowings
22
196.2
393.2
Current loans and borrowings
22
215.3
69.8
Short term investments
22
-10.0
-20.0
Cash and cash equivalents
18/22
-366.7
-345.9
Bank overdrafts
18/22
0.1
0.0
Net financial debt
22
34.9
97.1
Equity attributable to equity holders of the company
992.8
816.3
Gearing (net financial debt / (equity + net financial debt))
19
3.4%
10.6%
Reconciliation leverage
(Million EUR)
Note
2021
2020
Non-current loans and borrowings
22
196.2
393.2
Current loans and borrowings
22
215.3
69.8
Short term investments
22
-10.0
-20.0
Cash and cash equivalents
18/22
-366.7
-345.9
Bank overdrafts
18/22
0.1
0.0
Net financial debt
22
34.9
97.1
Adjusted EBITDA
3
430.3
361.7
Leverage (net financial debt / Adjusted EBITDA last 12 months)
22
0.1
0.3
Picanol Group – 2021 annual report | 125
Picanol nv
Steverlyncklaan 15
8900 Ieper
Tel.: 057 222 111
E-mail: corporatecommunication@picanol.be
www.picanolgroup.com