Majorel Annual Report
March 2022
Annual Report 2021
2
Contents
1. Introduction 4
1.1 A NEXT GENERATION GLOBAL CX LEADER 4
1.2 HIGHLIGHTS 4
2. Directors’ Report 7
2.1 MAJOREL AT A GLANCE 7
2.2 INVESTMENT CASE 11
2.3 CHIEF EXECUTIVE’S REPORT 13
2.4 MARKET OVERVIEW 17
2.5 BUSINESS MODEL 20
2.6 STRATEGY 22
2.7 CHAIRMAN’S STATEMENT 25
2.8 KEY PERFORMANCE INDICATORS 28
2.9 CORPORATE RESPONSIBILITY 30
2.10 FINANCIAL REVIEW 31
2.11 INTERNAL CONTROLS OVER FINANCIAL REPORTING 39
2.12 RISK MANAGEMENT 41
2.13 RECOGNITION AND AWARDS 2021 50
3. Corporate Governance 52
3.1 CORPORATE GOVERNANCE POLICY AND PRACTICES 52
3.2 MANAGEMENT 54
3.3 SHARES AND SHAREHOLDERS 62
3.4 LUXEMBOURG LAW ON TAKEOVER BIDS DISCLOSURES 64
4. Remuneration Report 70
5. Glossary of Terms 81
6. Consolidated Financial Statements 84
Annual Report 2021
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Introduction
Annual Report 2021
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1. Introduction
1.1 A NEXT GENERATION GLOBAL CX LEADER
We design, build and deliver end-to-end customer experience (CX) for many of the world’s most respected digital-
native and vertical leading brands.
Our comprehensive East-to-West global footprint in 35 countries across five continents, with around 69,000 team
members and 60 languages, means we can deliver flexible solutions that leverage our unique expertise in cultural
nuance – essential for true excellence in CX
1
.
We have deep domain expertise in tech-augmented front to-back-office CX. Additionally, we offer Digital Consumer
Engagement, CX Consulting, and an innovative suite of Proprietary Digital Solutions for industry verticals. We are a
global leader in Content Services, Trust & Safety.
The ‘Majorel difference’ is our culture of entrepreneurship, this is captured in our company tagline: “Driven to go
further.”
1.2 HIGHLIGHTS
Financial highlights
We have achieved substantial growth in both net revenue and profitability in 2021.
Net revenue
2
up 31% compared to 2020
Operating
EBITDA
3
up 61% compared to 2020
€1,752m
€316m
Operating EBIT
DA margin
4
up by 340bps compared to 14.6% in 2020, to
Earnings per share (EPS)
5
a potential dividend payment will be proposed at the AGM
scheduled for June 20, 2022
18.0%
€0.8
1
Number of countries and languages at February 28, 2022. Team members as of December 31, 2021.
2
Net revenue for the Group corresponds to revenues as reported in our management reporting less certain direct, order-related external costs which are
part of external expenses and costs of materials and consist mainly of cost of services purchased (subcontracted or outsourced services). Net revenue for
each Segment correspond to the according Segment revenues less certain direct, order-related inter-Segment and external costs. Management reporting
data exclude revenues from minor activities (primarily the Sonopress Business) outside the Majorel Group's core business which are reported in the
consolidated income statement (the "Sonopress Business" is defined as certain non-core business activities historically carried out by Arvato de Mexico,
S.A. de C.V., which was wound down in 2021).
3
Operating EBITDA is defined as EBIT (earnings before interest and taxes) adjusted for depreciation/amortization, impairment and reversal on intangible
assets, property, plant and equipment and right-of-use assets, adjusted for (i) impairment on goodwill and other intangible assets with indefinite useful life
as well as gains from business combinations, (ii) impairment on carrying amounts on assets held for sale, (iii) impairment/reversals on other financial assets
at amortized cost, (iv) impairment/reversals on investments accounted for using the equity method, (v) results from disposals of investments, (vi) fair value
measurement of investments, and (vii) restructuring and other special items. We use operating EBITDA to assess the operating performance of our
business as operating EBITDA shows our EBIT as adjusted for depreciation and amortization, which are non-cash charges, and specific periodic outcomes to
enhance comparability of results over periods. When comparing operating EBITDA with peer group data, it should be taken into account that the total
adjustments in a given year do not represent the full amount of all special effects incurred in a given year, as rather only material effects subject to certain
thresholds will be considered for the purpose of calculating operating EBITDA
4
We define operating EBITDA margin as operating EBITDA divided by net revenue.
5
Basic earnings per share (EPS) is calculated by dividing the net profit attributable to shareholders by the weighted average number of ordinary shares in
issue during the year, excluding ordinary shares purchased by the Group and held as treasury shares and the shares held under the liquidity program, if
any. The diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all
dilutive potential ordinary shares. There is currently no category of dilutive potential ordinary shares.
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Business highlights
Our focus is on growing business with existing clients while, at the same time, winning new logos. Our existing
clients have extended their business with us, adding new service lines, new locations, and new solutions. This
development is demonstrated by the increasing net revenue retention which has grown to 116% in 2021 (2020:
113%).
Our business growth was a driver of significant recruitment that saw us welcome 13,000 additional team members
into the Majorel family. At December 31, 2021 we numbered around 69,000.
• Global Internet clients at 45% of total net revenue;
• Content Services, Trust & Safety at 21% of total net revenue;
• Tech & Expert Services at 9% of total net revenue; and
• net revenue from offshore delivery at 39%.
Further to deepening and extending our partnerships with existing clients, we also succeeded in adding more than
40 new logos to our client portfolio during 2021.
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Directors’
Report
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2. Directors’ Report
2.1 MAJOREL AT A GLANCE
We design, build and deliver end-to-end CX for many of the world’s most respected digital-native and vertical
leading brands.
We are:
• global: our comprehensive East-to-West footprint spans 35 countries across five continents serving our clients’
customers in 129 countries;
• multilingual: we speak 60 languages, equipping us to deliver the cultural nuance that is essential for excellent
CX;
• human experts augmented by deep technological sophistication: we deliver front-to-back-office CX; digital
consumer engagement; CX consulting; content services, trust and safety; and an innovative suite of proprietary
digital solutions for industry verticals.
2.1.1 Mission, vision, values, culture
Our mission: We create amazing customer experiences that people value and that we are proud of. By combining
human talent, process, data and technology we deliver real impact for all our stakeholders. We are “Driven to go
further.”
Our vision: Our vision is to be our clients’ trusted long-term partner for customer engagement in an ever-changing
world. Creativity, Excellence and Respect drive everything we do. This ensures success for our partners and allows
us to thrive as one team.
Our values: The qualities of Creativity, Excellence and Respect guide everything we do, underpinned by the
diversity of our team members, which is a natural part of our DNA.
Creativity: Today’s rapidly changing world is sometimes challenging. But with our spirit of true entrepreneurship
and adaptability, and our drive to go further, we view it as an opportunity to innovate by getting the best from
people and technology.
Excellence: We constantly strive for the best. We know that doing so is pursuing a moving target. It takes full
commitment to go the extra mile.
Respect: Mutual respect and trust are the hallmark of every successful business. And it’s the same at Majorel. We
know that challenges are met and ambitions achieved through teamwork: not only amongst our colleagues, but in
partnership with our all our stakeholders too.
Our culture: “Driven to go further”
Majorel team members are differentiated by a particular kind of drive. We are relentless, resourceful, resilient,
agile, energetic and focused. We are driven to go further to deliver the continuous improvement that our clients
need, the simplicity that customers expect and the humanity that defines the right brand experience.
We have very high standards about the way we do business across the world – it’s all about doing the right thing
and acting with integrity – which is captured in our Code of Conduct. Acting with integrity brings respect in our
everyday dealings with each other and our business partners, and creates solid relationships based on mutual trust.
2.1.2 A little history
The Company’s roots date back some 30 years, to 1992, giving us a deep reservoir of knowledge and experience to
draw upon for our clients today.
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In 1998, we signed our first Global Internet client – a relationship that continues to thrive to this day.
Fast forward to January 2019, and the new entity of Majorel was created when Bertelsmann and Saham joined
forces to create a leading customer experience organization. Majorel brought together Arvato CRM Solutions,
Phone Group, ECCO Outsourcing, and Pioneers Outsourcing. This combination of shared values and
complementary skills and resources has enabled us to deliver innovative CX across the world.
In January 2021, Majorel acquired a significant footprint in China from Bertelsmann. In November 2021, we
announced the acquisition of Mayen, a leading nearshore provider in Turkey, further expanding our global reach
and cultural diversity, which became part of Majorel on January 1, 2022.
The scale, expertise and growth potential of the business were further endorsed by our public listing on the
Euronext Amsterdam Stock Exchange, on September 24, 2021.
Majorel is headquartered in Luxembourg, listed in Amsterdam, but at home in the world.
2.1.3 Global scale, East to West
From China and South-East Asia to Europe, and from Africa to the Americas, Majorel operates from 135+ sites in 35
countries, serving our clients’ end-customers in 129 countries.
This equips us to bring consistent CX to global brands. In particular, we are one of the few international CX
providers with operations at scale in China, and have one of the largest footprints in Africa, where we employ
around 20,000 team members.
To provide seamless client support across the globe, our highly agile delivery model includes onshore and offshore
locations, 22 multilingual hubs
6
and Majorel Anywhere™, our hybrid digital workplace, that allows our teams to
deliver great CX from literally anywhere.
2.1.4 Our solutions
Our CX expertise serves a broad variety of digital-native brands and vertical leaders through three business-critical
service lines:
Customer Interaction Services. We provide industry-leading end-to-end CX solutions, based on human expertise
augmented with advanced proprietary technology tools, automation – like RPA and bots – and data insight. We
enhance this approach with deep vertical, cultural, and CX domain expertise, developed from partnering with top
brands for around 30 years. This makes us the go-to partner for full-service omnichannel CX, giving our clients a
competitive edge, with services spanning the entire customer lifecycle. These include solutions for Customer
Service, Sales & Marketing, Loyalty & Retention, and Tech Support. All of these services help our clients to
successfully retain and grow their customer base while ensuring brand engagement and advocacy.
Business Process Services. Since 2015 we have been pioneers in providing Content Services, Trust & Safety
services. Our work across social, gaming and online retail platforms safeguards users and maintains the integrity of
our partners’ brands, products and services. Our teams of highly skilled reviewers are trained to effectively and
efficiently apply policies to all types of task, from user-generated content review, to profile management, to
commercial compliance monitoring, ensuring applicable standards and laws are met. We also support the
development of our partners’ products and services through the provision of high-quality training data for machine
learning, including annotation, labeling, and linguistic training.
Combining our deep expertise and excellent operational capabilities, we also offer industry-specific Business
Process Outsourcing (BPO) services for our clients with a focus on our different growth verticals. Like claims
management for the insurance sector, e-mobility services for automotive, and specialized back-office services for
6
As of February 28, 2022.
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utilities and banking. These BPO services leverage our suite of digital tools and seamlessly connect front and back
office services to provide engaging CX for customers.
Tech & Expert Services. Our range of Digital Consumer Engagement services includes the design, build and delivery
of direct-to-consumer (D2C) and various digital marketing approaches to enable our clients to engage with their
customers across multiple touchpoints. Our dedicated digital CX Consulting practice helps our clients in their digital
transformation by providing CX strategy development, consumer journey optimization, process digitization, and
technology advisory services.
Our specialized service for startups, MajUp™ supports them by ensuring that CX processes are established and
scaled across markets in parity with leading peers. In order to cater to the needs of individual industries we
innovate vertical digital solutions – for example, Majorel Digital Banking™, which includes an account and security
account switching service (Majorel Switch™) and an insurance navigator (Majorel Navigator™).
To generate value for our clients, enhance their customers’ digital journeys and make CX processes more efficient,
we complement our service offering with technological solutions – we call these “Tech enablers.” These include
our proprietary Customer Service Analytics platform enabling a personalized customer experience, Process
Automation and Robotic Process Automation (Majorel Automate™) for which we have established our own
“Majorel RPA Center of Excellence” supporting our business units in evaluating, designing and implementing RPA
use cases, Automated Interactions and Bots (Majorel Bot™) that combine conversational AI with around 30 years of
experience in CX and human talent as well as our omni-language solution (Majorel Lingua™) that facilitates the
bundling of multilingual services as well as serving customers in rare and expensive languages.
2.1.5 Our business Segments
Our business Segments are organized by three geographical groupings mainly based on language. These are:
EASA – Europe, Africa, and South America
7
This Segment currently includes Armenia, Colombia, Croatia, Estonia, France, Germany, Georgia, Ghana, Italy, Ivory
Coast, Luxembourg, Morocco, the Netherlands, North Macedonia, Peru, Poland, Portugal, Romania, Senegal, Spain,
Togo and Turkey.
GEMS – Global English, Middle East, and South-East Asia
This Segment currently includes Canada, Egypt, India, Ireland, Kenya, Malaysia, Mexico, the Philippines, Qatar,
Saudi Arabia, the United Kingdom and the United States.
CEA – China and East Asia
This Segment currently includes China.
We measure the performance of our Segments on the basis of net revenue, operating EBITDA, and operating
EBITDA as a percentage of net revenue.
2.1.6 Industries
As a leader in the global CX market, Majorel's around 69,000
8
team members serve more than 400 clients from all
industries, and with a particular focus on Global Internet and BFSI (Banking, Financial Services and Insurance).
These two sectors together accounted for 59% of our net revenue in 2021.
In addition to Global Internet and BFSI, the industry verticals of automotive, consumer goods, telecommunications,
public sector, and utilities play a significant role in our business strategy and development.
7
As of February 28,2022. Ghana, North Macedonia and Turkey added in January, 2022.
8
As of December 31, 2022.
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Our Global Internet clients value our comprehensive customer interaction services to improve the CX for their
customers as well as our business process services; this includes our Content Services, Trust & Safety offering,
which has become a growing and significant part of our global business.
As a long-term partner for BFSI clients, we provide integrated front and back-office services, supported by our
proprietary digital solutions. These create seamless CX for our clients’ customers, optimize our clients’ operational
costs, and drive their revenue generation.
In addition, our digital consumer engagement offerings enable clients from a variety of industries to navigate digital
complexities through advanced direct-to-consumer (D2C) models, processes and campaigns.
Moreover, during the COVID-19 pandemic in 2021, we supported a number of public institutions in EMEA by
delivering citizen hotlines and end-to-end management of vaccination campaigns.
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2.2 INVESTMENT CASE
Majorel:
driven to make a difference
We’re differentiated by a particular kind of drive. We are relentless, resourceful,
resilient, agile, energetic and focused. We are driven to go further to deliver the
continuous improvement that our clients need, the simplicity that customers expect and
the humanity that defines the right brand experience.
9
.
-94 billion
10
– and
-
ell positioned to benefit from market
-19 pandemic creates additional momentum in the CX market,
s for digital transformation and customer
stantly changing consumer environment, position us to be a
-term partner.
-on and larger
11
12
. We are also one of few international CX providers with
60 languages. This is essential for excellent CX –
next
services. We support our
The Company’s roots date back some 30 years, to 1992,
today.
rket, our proven
-sell additional services and geographies, adapting to our clients’
9
Source: Everest Group 2021.
10
Source: Everest Group 2021.
11
Company research.
12
As of February 28,2022.
13
Net revenue retention is defined as net revenue generated by clients in FY2021 divided by net revenue generated by the same cohort of clients in FY2020
(excluding China Business).
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A financially attractive profile
Multiple growth vectors
Net revenue growth
31%
Target global footprint, countries
40
Majorel delivered strong net revenue growth of 31% in 2021. In September
2021, we listed our shares on Euronext Amsterdam. We have expanded our
margins
and have a
strong cash conversion rate, and a robust balance sheet
showing a net cash position of €79 million, as of December 31, 2021. Our
economic debt at the end of the year was €89
million, allowing us strategic
flexibility for inorganic growth. In addition, we h
ave an oversubscribed
credit facility of €200 million (including an accordion option), the first
syndicated credit facility for Majorel. At the end of 2021, €130 million
(including an accordion option) remain undrawn, allowing additional
flexibility for bo
lt-on and strategic M&A activity. In the event of larger M&A
opportunities, we are prepared to increase our leverage ratio to up to 2.5
times
operating EBITDA.
Our growth in the near and mid term will come in multiple shapes and
forms. We are targeting fu
rther growth from both existing and new clients.
We are also actively seeking to increase our global footprint to 40 countries
mid
-term, in particular, the Americas, Asia and Africa. We will leverage our
strong expertise to innovate and develop new solutio
ns, and we have a
robust M&A pipeline to fuel our inorganic growth.
A people-driven company
Digital expansion
Team members
~69,000
Net revenue share of Global Internet clients
45%
CX is all about people – and so are we. We know that happy team members
make happy customers. Which means our clients are happy too. This is why
we ensure that Majorel is the best home for talent, and the health and
safety of our people is a priority. Our team members are part of
a warm and
global family; a genuinely diverse team of talented individuals. We take care
of our people in many ways, offering the benefits and personal
development opportunities you’d expect from a global and fast growing
organization.
During 2021, we welcomed an additional 13,000 team
members to the Majorel family.
Majorel is well positioned to benefit from growth opportunities linked to
digital expansion, in three areas: first, by growing with our digital
-native
clients by leveraging their strong
growth; second, by gaining additional
share of wallet; and third, by winning new digital
-native clients. We expect
that all of this will increase the share of net revenue from our Global
Internet clients from the current 45% to over 50% in the mid
term. This
includes continued growth in the Content Services, Trust & Safety business.
In 2021, we achieved a net revenue share of 21%
, which is already within
the Company’s mid
-term guidance of 20-25%. In addition, we see new
business opportunities for our Tech
& Expert Services created by digital
transformation,
and we aim at a net revenue share for our Tech & Expert
Services of 10
-15% in the mid term.
Deep domain expertise
Entrepreneurial DNA
Clients worldwide
400+
First Global Internet client
1998
Our 400+ clients entrust us with their two most valuable assets: their
brands and their customers. They feel comfortable to do so because they
know that we deliver great CX based on our extensive experience in
customer interaction, subject matter and verti
cal-specific processes, honed
over around 30 years. We support this expertise with continually refined
tools, platforms and processes, as well our own innovations in, for example,
vertical
-specific BPO and digital vertical solutions.
We are a company of our times, contributing to the success of some of the
most exciting and fast
-growing companies in the world – we won our first
digital
-native client in 1998. We share their vision, sense of adventure and
entrepreneurial culture, and serve their brands with energized, resilient and
resourceful team members. Our entrepreneurial culture
– captured in our
tagline
“Driven to go further” – leaves space for innovation and positively
encourages team members to voice and pursue ideas, and to bring their
passion to get things done.
We are building a business for the long term.
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2.3 CHIEF EXECUTIVE’S REPORT
“By every key measure, we can look back on a year that
captures the spirit of our company: ‘Driven to go further.’
Pursuing our strategy, we significantly grew our business
with existing clients, won new logos, expanded into new
geographies and made strategic acquisitions.”
Thomas Mackenbrock
CEO
Following the year in which Majorel became a public company, we are proud to publish our inaugural Annual
Report for 2021. By every key measure, we can look back on a year that captures the spirit of our company: “Driven
to go further.”
During 2021, we excelled across each of our three business lines of Customer Interaction Services, Business Process
Services and Tech & Expert Services as well as across all of our three business Segments, EASA, GEMS and CEA.
We continued to be an unwavering partner to many of the world’s major internet brands and other key verticals
such as BFSI, automotive, consumer goods, telecommunications, public sector, and utilities.
Pursuing our strategy, we significantly grew our business with existing clients, won new logos, expanded into new
geographies and made strategic acquisitions.
Naturally, during the ongoing COVID-19 pandemic, the safety, wellbeing and development of our team members
remained our primary objective – no matter whether working at our sites or from home, enabled by our
proprietary Majorel Anywhere™ hybrid digital workplace. To support our growth, we welcomed around 13,000
additional team members into the Majorel family in 2021.
We also rolled up our sleeves, in every sense, to provide vaccinations for our own team members, to support
government vaccination programs, and to engage in other important community-focused initiatives worldwide.
A strong financial performance
I am pleased to report that we maintained and built on our momentum of 2020 to deliver again a strong all-round
financial performance in 2021, with continued revenue and profitability growth, together with strong free cash
flow.
We made significant progress across all of our operational KPIs with regard to the percentage of net revenue:
• Share of Global Internet was 45% (2020: 38%) vs. our mid-term target of >50%.
• Share of Content Services, Trust & Safety was 21% (2020: 17%) vs. our mid-term target of 20-25%.
• Share of Tech & Expert Services was 9% (2020: 5%) vs. our mid-term target of 10-15%.
• Share of offshore delivery was 39% (2020: 35%) vs. our mid-term target of 45-50%.
Segmental performance
Our EASA (Europe, Africa, South America) Segment performed strongly with growth in net revenue of 19% to
€1,290 million (2020: €1,086 million). This result was driven by the expansion of Global Internet and BFSI clients
and the contribution of COVID-19-related business. Like-for-like, excluding the COVID-19 effect, the EASA Segment
exhibited a healthy growth in organic net revenue of 9% in 2021.
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Our GEMS (Global English, Middle East, South-East Asia) Segment, showed very strong growth momentum with an
increase in net revenue of 44%. In 2021, net revenue amounted to €364 million (2020: €253 million). This
expansion was mainly driven by significant growth with Global Internet clients, both in our GEMS onshore locations
and, in our offshore locations in South-East Asia, Egypt, India and Kenya.
Net revenue for our CEA (China, East Asia) Segment, including for the first time the contribution of our China
business
14
acquired in January 2021, amounted to €98 million. This revenue contribution is in line with our
expectations of 5-7% of Group net revenue. In particular, CEA further strengthens our Tech & Expert Services
portfolio as well as our solution offering for Global Internet and consumer goods clients in China and East Asia.
Our response to COVID-19
In the face of the pandemic, I am very proud of how Majorel has performed over the last two very taxing years. Not
only did we maintain our levels of service; we continued to scale up, in order to meet clients’ needs. The resilience
and flexibility we exhibited reminded our clients that they can rely on us in even the most difficult of
circumstances, and this served to deepen our partnerships with them.
In times like these, safety becomes the overriding priority. At the beginning of the pandemic in 2020, we
introduced stringent measures to protect those working at our sites, and in a giant team effort we relocated large
parts of our workforce to work from home. Critically, we also maintained without compromise the operational
excellence, quality and security that our clients demand and expect.
In 2021, it became increasingly important for us to facilitate vaccinations for our team members. We organized
vaccination drives at our sites, worked with company doctors, educated our people about the COVID-19
vaccination process and used other local measures to drive the vaccination effort.
At the same time, we supported several public institutions and governments with their pandemic initiatives. This
included our Customer Interaction Services to answer citizens’ questions, and the management of the entire back
office communications between government and individual citizens through our Business Process Services. And our
Tech & Expert Services developed and ran platforms that booked vaccination appointments, and the processes in
the vaccination centers.
Majorel Anywhere™ hybrid digital workplace
Leveraging learnings from the pandemic, was the further development of Majorel Anywhere™. This hybrid digital
workplace allows our team members to work literally from anywhere, while maintaining a consistent level of
training, service quality and data security. It combines state of the art connectivity and security solutions,
workspace solutions and collaboration tools with performance management and recruitment and training solutions
baked-in – from both an IT and an operations perspective.
Becoming the best home for talent
We are a global business of around 69,000 team members across five different continents and many cultures.
Being the best home for talent therefore takes many shapes and forms across our different locations and service
lines – from providing the right environment for MarTech experts in Shanghai, working on our D2C platform;
enabling our team members in the Philippines to achieve operational excellence in Content Services, Trust &
Safety; and helping young people to take their first steps on the digital career ladder in Morocco; while ensuring
everyone’s wellbeing.
I remain impressed by the professionalism, team spirit and drive that I witness interacting with Majorel team
members every day.
14
China Business means the acquisition of Shanghai Majorel Commercial Services Co., Ltd. (previously, Shanghai Bertelsmann Commercial Services Co. Ltd.),
Shanghai Majorel Digital Marketing Co., Ltd. (previously, Shanghai Bertelsmann-arvato Information Services Co. Ltd.) and Shanghai Majorel CX Business
solutions Co., Ltd. (previously, Bertelsmann-Arvato Commercial Services (Shanghai) Co., Ltd.).
Annual Report 2021
15
Our diverse and entrepreneurial culture that unites our team members worldwide is something that we cherish
and will continue to nourish as it shapes the Majorel difference.
Organic growth leveraged by strategic acquisitions
In January 2021, we acquired Arvato CRM in China, expanding our geographic footprint in this dynamic market and
making us one of the few international providers operating at scale in the country. In June 2021, we followed this
by welcoming the German Junokai CX consultancy firm into the Group, strengthening our Tech & Expert Services
line of business. In November 2021, we announced that we had signed a contract to acquire Mayen, one of
Turkey’s leading nearshore CX providers, which became a member of the Majorel Group on January 1, 2022.
Growth levers
Our 2021 performance was achieved by focusing on three growth levers:
Growth with existing clients
Our current client portfolio, which comprises more than 400 clients worldwide from a wide range of industries, has
a focus on fast-growing Global Internet and BFSI clients. Retaining and growing their business is the bedrock of our
own success and our key focus area for growth. We call this “winning with the winners.” We can also point to many
clients we first met as startups and who are now major multinationals with many thousands of employees
worldwide.
Across all of our verticals, we work and grow with our clients in true partnership, and with deep roots built on trust.
In 2021, this resulted in a notable net revenue retention of 116% (2020:113%).
Further to deepening and extending our partnerships with existing clients, Majorel also succeeded in adding more
than 40 new logos to its client portfolio during 2021 – a strong foundation for building future long-term client
relationships.
Ongoing regional expansion
On January 1, 2021 we successfully integrated Arvato CRM’s CX operations in the growing and unique market of
China into our global offering. We also expanded into Croatia and made significant progress in developing our 2020
entry into Kenya – adding an extra dimension to our Global English offshore capabilities.
Mayen became a member of the Majorel Group on January 1, 2022.The company has more than 3,500 team
members in seven locations in Turkey, providing end-to-end CX services to leading brands in 12 languages. The
acquisition is fully aligned with Majorel’s stated growth strategy of further geographic expansion, with a particular
focus on countries that strengthen our offshore leverage.
In addition, we prepared the market entry into North Macedonia and Ghana in 2021. These organic expansion
plans have been realized in Q1 2022. Hence today, we are present in 35
15
countries across North and South
America, Europe, Africa, and Asia, and further regional expansion is in preparation. Our mid-term target is a
geographic footprint of more than 40 countries.
We have also derived an increasing share of our net revenue from offshore delivery. Uncompromised quality is key
here: we draw on long experience of establishing operations in more remote locations and supporting them to
achieve the same level of service that we achieve everywhere. This requires equal language proficiency, uniform
brand knowledge and high-quality standards, common processes and IT, and deep domain expertise. The share of
offshore in our global delivery mix rose from 35% in 2020 to 39% in 2021.
Digital expansion
In line with our operational targets, Majorel leveraged growth opportunities linked to digital expansion in 2021. We
realized substantial growth with our digital clients, and this drove an increased share of net revenue from Global
Internet clients from 38% in 2020 to 45% in 2021. A relevant driver and therein included, was the strong growth
15
As of February 28, 2022.
Annual Report 2021
16
momentum in the Content Services, Trust & Safety business, where we increased the net revenue share from 17%
in 2020 to 21% in 2021.
We have a continuous program of innovation to meet clients’ existing and future needs in the fields of digital
consumer engagement, CX consulting, startups and vertical digital solutions. 9% of our 2021 net revenue (2020:
5%) were generated from our Tech & Expert Services, and our mid-term target is to generate 10-15% of our net
revenue from this business line, either organically or through selective acquisitions.
Indeed, our 2021 acquisitions have already added value to our digital offering. The China business includes a
proprietary digital solution platform for managing and implementing complex D2C (direct to consumer) programs,
which we plan to develop further. Alongside this, our Junokai acquisition represents an additional step towards
expanding our CX consultancy/advisory services in EMEA – supporting wide-ranging clients in aspects of digital
transformation of customer service.
We also created a new business, MajUp™, to offer solutions exclusively for startups. Our around 30 years of CX
experience, combined with our own startup spirit, makes us a perfect partner to meet their immediate and long-
term needs.
Our proprietary vertical digital solutions continue to support our global digital offer. These include Majorel Digital
Banking™, supporting financial service providers in digitalizing and optimizing their processes and services to drive
cost efficiencies, revenues and value-added services. The platform also includes Majorel Switch™ for bank account
switching services and Majorel Navigator™ for next-generation insurance sales based on account information
analysis.
Leveraging our Tech & Expert Services, we supported several public institutions and governments in EMEA with
their pandemic initiatives by developing and running technology platforms for booking vaccination appointments
and managing complex processes in the vaccination centers.
Corporate Responsibility
We see Corporate Responsibility (CR) as a fundamental part of Majorel’s DNA and a natural extension of the
Company’s core values – Creativity, Excellence and Respect.
Our CR framework comprises five pillars: Diversity, Equity & Inclusion; Environment & Local Communities;
Employee Rights & Fair Working Conditions; Wellbeing & Resiliency; and Corporate Citizenship.
As a people-driven company, we are an employer that welcomes, pays and promotes team members equally,
regardless of gender, sexual orientation, ethnicity and disability.
We are also expanding our potential talent pool by offering opportunities through impact sourcing. This initiative is
making an important difference, reaching people in disadvantaged circumstances (whether socially, economically
or through disability) who are typically missed by traditional recruitment programs.
Active initiatives to care for all our team members include our Feel Good program to promote good mental and
physical health across the business through a team of wellbeing managers at the sites. We then take this a step
further for our team members working in Content Services, Trust and Safety. For this business line we offer
expanded elements of our global Feel Good wellbeing and resiliency program, that provides very comprehensive
support and training.
In the wider world, we are committed to making a positive impact, being an active contributor to our host
communities, and treading as lightly as we can. We have also defined a roadmap with the destination of being a
climate-neutral enterprise by 2030.
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Outlook
The pandemic has opened many more eyes to the critical importance of CX management – not simply as a task that
has to be completed, but as a fundamental tool with which brands can reach their customers to build and deepen
brand relationships.
In a constantly changing world, we will continue to be an agile and high-performing partner to our clients, who
entrust us with their two most valuable assets: their brands and their customers.
The last two years have also left a legacy of successful home working and we believe that in the future it will be a
crucial tool for recruiting and retaining talent. With the Majorel Anywhere™ hybrid digital workplace, we are
embracing this opportunity for our team members and clients alike.
Acting in an attractive and dynamic market that offers a multitude of growth opportunities, we remain committed
to the targets that we have set ourselves concerning growth and profitability. To reach our ambitions, we will
continue to follow the proven strategy that has brought us to the strong position that we are in today. We will
continue to build on the strengths that have consistently encouraged our clients to place their trust in us and grow
with us. In addition, we plan to leverage our strong capabilities and growth by strategic M&A activities.
We will also be alert to headwinds: labor scarcity and wage inflation are topics for our industry. We will continue to
focus on our employer brand, including our wellbeing programs, creating a great place to work.
And, more broadly, we will continue to keep a vigilant eye on the ongoing COVID-19 pandemic and the potential
economic impacts of the unfolding geopolitical situation. In particular, we are closely monitoring the impacts of the
recent events in Ukraine.
Thank you
I’d like to take this opportunity to thank all of our super-talented team members for their loyalty and commitment
to Majorel. It fills me with great pride to collaborate every day with our truly diverse and passionate colleagues
across the world, focused on one goal – delivering amazing customer experience.
Naturally, I’d also like to thank our clients for putting their trust in Majorel. We’re working hard to ensure that we
continue to deserve your business and very much looking forward to being at your side in all your future
endeavors.
Finally, I would like to extend my thanks to our anchor shareholders, Saham and Bertelsmann, for the invaluable
support they have given Majorel since our founding in 2019. And also to our new shareholders, who have joined us
since our listing in September, for their confidence and vision.
I am very proud of how we navigated through the challenges that the pandemic posed on us. We can rightly say
that we have grown stronger over the last years – further deepening the partnerships with our clients by standing
at their side; expanding our footprint and business; leveraging our expertise and entrepreneurial drive to develop
new solutions; and have continued to build the best home for talent.
Thomas Mackenbrock
Chief Executive Officer
2.4 MARKET OVERVIEW
Global CX: a market overview
Consumer markets have never been so dynamic, and the ability to delight customers with the right customer
experience (CX) is a vital differentiator and competitive advantage.
It is also the basis for forging long – and sometimes lifelong – relationships between a brand and its customer base.
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Technology and the internet have transformed the way consumers engage with businesses. Today’s interactions
are infinitely more diverse than simply calls to contact centers. Customers expect to be able to solve their queries
at any time and through the channel that is most convenient for them. Therefore, good CX has developed into
omnichannel, providing a seamless experience across multiple channels such as mobile apps, chat and instant
messaging, email and social media, in addition to voice interaction.
With this migration to digital channels, which was further accelerated by the COVID-19 pandemic, CX has also
become a key driver of brand equity. This market environment, combined with technological innovation, has
created new service opportunities that encompass the entire brand experience, including CX consulting, customer
journey design, direct marketing automation, data annotation and data labeling, as well as Content Services, Trust
& Safety.
By augmenting human talent with digital technologies and data, CX players have been able to support next-
generation business processes such as human supervised machine learning (ML) processes and full-stack
omnichannel customer engagement.
As clients look to maximize the capabilities of digital solutions to manage their brand experience, both digital-
native brands and vertical leaders turn to specialist CX service providers such as Majorel.
We create a customer experience that is consistent, personalized and integrated across any channel that their
customers may choose.
The market opportunity
Majorel is a next generation specialist in a market valued at US$92-94 billion in 2021
16
. This is the current size of
the global outsourced CX market, which is projected to grow at a CAGR of 4%-5% from 2020 to 2022
17
.
However, with outsourcing only accounting for less than 30% of all CX expenditure
18
, it is a market that remains
significantly under-penetrated. More than $240 billion
19
of the total addressable market currently remains serviced
by in-house teams, which is an opportunity for further growth.
Within the market, digital segments are showing high growth. The need to digitalize processes to reflect consumer
preferences has driven up demand for digital CX services, which combine digital concepts and tools with high-touch
human intervention to transform the customer experience. This digital segment is also expected to witness
continued double-digit growth going forward
20
.
In addition, our fast-growing Content Services, Trust & Safety offering, which exists to protect brand perception
and CX on digital platforms, reached a market size of $4 to $5 billion in 2020
21
. Among many drivers has been the
proliferation of user-generated content on digital platforms, driving expected double digit growth in the years
ahead
22
.
Industry trends
Several tailwinds are powering the CX industry forward as we enter 2022 and beyond.
• Elevated consumer expectations. With technology in their hands and an on-demand culture, consumers have
more information, choices and influence than ever before. They expect to engage with brands at any time, on
any device and on the channel of their choice. Brand perception is no longer determined by individual
touchpoints, but rather by the entire consumer experience. Brands therefore need to seize the advantages,
and minimize the risks, that come in an always-on digital world. Facing these new realities, companies across all
16
Source: Everest Group, 2021.
17
Source: Everest Group, 2021.
18
Source: Everest Group, 2021.
19
Source: Everest Group, 2021.
20
Source: Everest Group, 2021.
21
Source: Everest Group, 2021.
22
Source: Everest Group, 2021.
Annual Report 2021
19
industries are engaging specialist CX solution providers to design and manage best-in-class customer
experience.
• Customer experience as a key driver of brand equity. With products becoming increasingly interchangeable,
customer experience has become a vital point of difference. Companies are exploring new ways to provide
meaningful and intuitive interactions that reflect the intentions and characteristics of individual consumers.
Brands that maintain a merely transactional approach are losing value, while those managing experiences
holistically across the consumer lifecycle can become an indispensable part of their lives.
• A shift to CX leaders. In shifting their focus to managing customer experiences along the entire lifecycle,
brands are increasingly realizing the need for a fundamental change in their operating model: front- and back-
end processes need to be managed holistically and enabled by the latest technology to deliver the desired
results. However, they may not have the in-house expertise to build the technology and process architecture
they need. Instead, they are consolidating activities with integrated CX solution providers that combine deep
domain expertise, process know-how, innovative consulting and profound IT/technology capabilities, as well as
extensive skills in managing large scale operations.
• Growth of digital and global companies. Next-generation brands are expected to continue their trajectory of
growth and international expansion, which makes capturing market share critical. In addition, a focus on their
key competitive advantages is strategically important. Hence, we see a continuing demand for reliable CX
providers that are able to scale quickly across the world, with quality, innovation and efficiency, thereby
becoming long-term growth partners.
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2.5 BUSINESS MODEL
Our strengths drive us to go further…
Our strengths
Passionate team members
Our 69,000 team members across
135+ sites are passionate about
delivering great CX
23
. They are
resourceful, resilient, agile,
energetic and focused, with a can-
do-attitude and a drive to get
things done. They truly act as
#OneTeam and are fun to work
with. In order for our team
members to excel, we provide a
positive working environment and
continuously invest in developing,
retaining and promoting the right
talent.
Digital native
Digital is Majorel’s heartland and
nearly half our business comes
from digital-born clients. We
augment our human talent with
technology and digital tools, such
as analytics and automated
interactions, that optimize the
customer experience. Our
innovative Tech & Expert Services
deliver a slick and seamless
experience through specialized
CXaaS services, CX consulting,
vertical digital solutions and digital
consumer engagement services.
Operational excellence
We support our delivery model
through a relentless focus on
operational excellence. We have
dedicated our entire organization
and culture to maintaining our
high standards and the
continuous optimizing of our
performance. In order to deliver
the CX that our clients expect, we
focus on three aspects: customer
satisfaction and quality,
optimization and the
harmonization of processes, tools,
reporting and organization.
Long-term client partnerships
We ‘become’ our clients, in two
senses. We are trusted to act as
an extension of their brand,
interacting with, and looking
after, their customers every day
on their behalf. But more than
that, we evolve and grow with our
clients, creating long and fruitful
partnerships, in some cases,
decades-long. In the case of one
leading insurance company, our
tenure is now over 25 years.
Deep domain expertise
Every sector has its own highly
specific characteristics, and every
brand has a signature style of its
own. We are experts in both
industry-specific processes and
individual client needs. This
enables us to customize our
approach to meet those needs of
sector and client alike – and to
deliver great CX. We are entirely
at home in a diverse selection of
verticals, including Global
Internet, BFSI (with the stringent
security they clearly require),
automotive, consumer goods,
telecoms and utilities.
End-to-end capabilities
We combine human talent with
our deep process expertise,
advanced technology and data.
This enables us to offer a
comprehensive suite of next-
generation solutions, across
Customer Interaction Services
and Tech & Expert Services. In
Business Process Services we
offer leading Content Services,
Trust & Safety as well as
managing end-to-end vertical-
specific business processes. We
add value to our clients’
operations and enable them to
focus on their core
competencies.
A truly global footprint
With an East-to-West presence
spanning 35 countries and
135+ sites, Majorel ranks #5 in
terms of geographic
coverage
24
. This enables us to
deliver CX that is attuned to
local culture and needs, to
customers from 129 countries.
Our footprint includes a strong
presence in China, and one of
the largest CX footprints in
Africa.
23
Approximate number of team members as of December 31, 2021. Number of sites at February 28, 2022.
24
Source: Company research. Majorel coverage vs. leading CX providers.
Annual Report 2021
21
…supporting our diverse, customer
-centric proposition…
Our diverse, customer
-centric proposition
Clients
Customer Interaction
Services
Business Process
Services
Tech & Expert
Services
Global Internet
Global partner of choice
for digital-native companies
Leader for Content Services,
Trust & Safety
Digital consumer engagement
solutions
Digital CX consultancy
MajUp™ for startups
Portfolio of vertical digital
solutions
Other Verticals
25
Long-term partner in integrated end-to-end CX services
for industry leaders & digital disruptors
BFSI
26
Automotive
CPG
27
Utilities
Leverage
domain expertise / next generation technology / global platform
Delivery model
Majorel Anywhere
TM
/ multilingual hubs / global and regional
Talent
learning & development / diversity, equity & inclusion / wellness & resiliency
Underpinned by our
mission and values:
We create amazing customer experiences that people value, and that we are
proud of. By combining human talent, process, data and technology we
deliver real impact for our all our stakeholders. We are “Driven to go further.”
Our values Creativity,
Excellence, Respect
…to drive value creation for our stakeholders
Our value creation for stakeholders
People
We provide
high-quality employment, training and career
development for around 69,000 team members worldwide.
In Africa alone, we are an attractive employer for around
20,000 talented individuals. In 2021, we also welcomed
13,000 additional team members to the Majore
l family.
Shareholders
We are committed to creating shareholder value. During the
year, our operating EBITDA was €316 million (2020: €196
million) and we have increased our EBITDA margin by 340
basis points (bps) to18.0% (2020: 14.6%).
Career
opportunities for additional team members
13,000
Operating EBITDA
€31
6 million
Communities
Community outreach and volunteering programs at 135+
sites across five continents, with our team members making
a real difference to their local
communities.
Clients
We serve our clients’ customers in 129 countries. In our
2021 Client Satisfaction Survey, the highest rating we
received was for the way we manage customer
relationships.
Local communities
135+
Consumer reach, worldwide
129
25
Selected verticals.
26
Banking, financial services and insurance.
27
Consumer packaged goods.
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22
2.6 STRATEGY
Our strategy for expansion and growth
We are proud of our reputation, client base and status as one of the leading global players. Nevertheless, it is in our
culture that we never stop improving, ‘honing the machine,’ and looking to grow.
Below, we outline how our strategy comprises five key areas of focus.
1. Increase our differentiated global footprint
We offer our clients a comprehensive presence in every major market from East to West: from China and the
Middle East to Africa, and from Europe to the Americas. Our ambition now is to densify that presence still further
as we seek to grow our business with existing and new clients.
In the medium term, we expect to expand our geographic footprint to more than 40 countries that can satisfy our
key criteria: these include access to diverse, skilled talent, market share of clients, benefit to clients, competitive
density, convenience of location, and an ability to deliver our services over multiple time zones and in multiple
languages.
While we typically look to partner with a client when entering a new country, we are also prepared to pursue
strategic investments independently.
As part of this strategy we seek to:
• further increase our European footprint, growing our multilingual hubs in, for example, Eastern Europe, as well
as opening up new countries;
• increase our global English and Asian languages by expanding in Asia;
• continuously evaluate opportunities to increase our onshore presence in East Asia.
• leverage our significant footprint in Africa with new locations in Sub-Saharan Africa, expanding our offshore
offering to cover global English, French and African languages; and
• reinforce our presence in Latin America as a beachhead for US nearshoring, our Spanish language offering, and
global customer local markets.
2. Drive further growth with existing clients, and win new clients
We are proud to serve more than 400 clients across the globe, and of being a partner of choice for fast-growing
Global Internet brands, leaders in major industries, and upcoming startups.
Although we target growth from all verticals, our particular focus is to play to our proven strengths in Global
Internet and BFSI.
We have shown significant growth from existing clients and want to maintain this momentum. Many are digital-
native leaders showing double-digit growth, and to grow further with our clients we:
• seek to deepen and expand our existing relationships by systematically cross- and up-selling our services along
our value chain; in particular, our Content Services, Trust & Safety offering, our vertical BPO Services and our
Tech & Expert Services;
• aim to support our clients in their business transformation plans, including by expanding into new geographies
and via portfolio expansion;
• will leverage the deep insights and expertise that we gain in strategic partnerships to identify opportunities to
innovate and develop new business solutions that address their evolving needs. We pursue a digital-first
approach.
To win new clients, we will also focus on our proven strengths in the Global Internet, BFSI, automotive, consumer
goods, utilities and telecom industries, targeting vertical leaders as well as digital disruptors. To this end, our
dedicated regional and global sales teams will seek to generate new business with national companies and global
accounts. Majorel succeeded in adding more than 40 new logos to its client portfolio during 2021. We have also
created MajUp™, a tailored set of CX services designed for the evolving needs of startups.
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3. Innovate fresh solutions and drive digital improvements
By combining human talent, process expertise, technology and data, we will build on our position as a
transformative partner.
1. Customer Interaction Services: we leverage our CX heritage to optimize existing technology and implement
new tools for omnichannel solutions and omni-language support. By continuing to enhance sophisticated
sales and marketing services, we seek to generate additional revenue for our clients.
2. Business Process Services: we continue to grow our Content Services, Trust & Safety – which contributed 47%
of our net revenue from Global Internet clients in 2021 – by strengthening our broad solutions scope. We are
also driving our vertical BPO services, which increase clients’ process efficiency and revenue while reducing
operating costs. Alongside organic expansion, disciplined M&A will accelerate our goals in this business
process space.
3. Tech & Expert Services: we are driving further growth, particularly in our digital consumer engagement
solutions and CX Consulting. We constantly enhance and expand our portfolio of vertical digital solutions,
especially for our BFSI clients, and will broaden it both organically and through value-accretive M&A.
4. Accelerate growth across regions, clients and services through M&A
We will continue to complement organic growth, our primary driver of increasing revenue, with carefully selected
M&A activities. Following our successful acquisitions in 2021, we continue to evaluate an attractive set of potential
targets. Our strategy is disciplined, focusing on creating value for our shareholders and further supporting the
growth and transformative needs of our clients.
These are interesting times, as the CX landscape remains highly fragmented and offers many strategic
opportunities. We plan to take an active part in the ongoing consolidation as the industry enters a new phase.
At the close of 2021 we had an exciting pipeline of potential acquisition targets. Amongst these are interesting
opportunities that would further widen the scale and scope of our Tech & Expert services in areas such as CX
consulting, vertical digital solutions and digital consumer engagement.
The other targets would either serve our goal to expand geographically or allow us to gain additional expertise for
our business process services.
5. Leverage our diverse corporate culture to further strengthen our market position
We are passionate that our culture of responsibility to our people, society and the environment is not only the right
thing to do; it also enables us to grow better as a company, as #OneTeam and as the best home for talent. We
want to be the employer of choice for talent, making a positive impact on their lives and their communities.
The diversity of our team members is one of our key competitive advantages and is part of our DNA. Diverse teams
deliver better outcomes for our clients and their customers, and we see this first-hand in tens of thousands of
interactions every day. This is why we encourage everyone at Majorel to be themselves, and we invest significant
time and effort in our diversity, equity and inclusion program called “We Are One.”
Diversity also extends to people who are often overlooked when it comes to traditional recruitment. Through our
impact sourcing program, we reach out to people in disadvantaged circumstances – whether socially, economically
or through disability – to give them a path into a meaningful career.
As part of our talent management, we support our team members throughout their careers. We invest
continuously in our team members through comprehensive skills training and provide platforms for education to
help everyone to be the best they can be.
All the while, our team members’ wellbeing and resiliency is a priority of our people strategy. This is particularly
important for those working in Content Services, Trust & Safety, who are supported, if needed, through a global
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24
network of support specialists. And right across the business, our global Feel Good program promotes general
physical and mental wellbeing in an environment that helps everyone develop professionally and personally.
Our Feel Good program is specially designed to meet the support needs of our team members while promoting a
work environment driven by our values: Creativity, Excellence and Respect. This program is a global, bottom-up
initiative that empowers our people to create custom wellness and engagement activities for their local team
members at any Majorel location around the world.
Our team members also find inspiration in all kinds of activities, from volunteering to give time for our social
programs and environmental projects, to driving the Company’s ambition to be climate-neutral by 2030.
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2.7 CHAIRMAN’S STATEMENT
"Great customer experiences are delivered by passionate
people who are given a stage on which they can truly
perform. Our unique entrepreneurial culture means that
our team members are highly creative, unafraid to
challenge the status quo, and always strive for operational
excellence in everything they do.”
Moulay Mhamed Elalamy
Chairman
2021 has been a very special year for Majorel – a year in which we continued to shape our company, a year in
which we grew significantly, and a year in which we completed our private placement and listing.
2021 was also the second year of the global health crisis caused by COVID-19. I am extremely proud of how well we
managed under these circumstances.
Navigating the global health crisis
The last two years have tested the whole world, and particularly those who have lost loved ones or have struggled
with their health due to the coronavirus. As I write, the pandemic continues to impact personal and professional
lives, and the safety of our team members remains our constant and utmost priority.
The pandemic posed major challenges for our clients, especially in maintaining close connections with their
customers. During lockdown, all traditional face-to-face customer contact was lost. Demand for e-commerce
surged, leading to a greater need than ever before for robust, omnichannel CX.
The majority of our team members had transitioned to working from home in 2020, to ensure their health and
safety, and they have continued to work from home during 2021. As for work on sites, we have kept health
measures strong, and intensified our support for local vaccination programs for our team members.
At the same time, we have leveraged our experience from the pandemic to further enhance our hybrid digital
workplace, Majorel Anywhere™, and remained unshaken in delivering reliant and high-quality CX.
In this second year of the pandemic, we are also proud to have supported several public institutions and
governments in EMEA in their fight against COVID-19 with a wide range of services across our portfolio.
Continuing to deliver
However, 2021 was so much more than a year of defensive reaction. We proactively continued to create jobs and
career opportunities for thousands of people around the globe and persevered with the execution of our strategy.
Thanks to the dedication of our team members and the trust of our clients, we have been able to deliver on our
targets – both financial and operational.
We have continued on our strong growth trajectory – especially in the Global Internet space and in BFSI – both
with our existing clients and also by winning new logos. We also further deepened our Tech & Expert Services by
integrating the Chinese digital portfolio, as well as by leveraging our abilities to offer platform-based vaccination
services. As a result of these efforts, we are proud to report significant progress towards our mid-term targets of
digital expansion.
We also grew our global reach by becoming one of the few international providers of scale in the growing Chinese
market by way of acquiring Arvato CRM’s China business in January 2021. We also opened our first site in Croatia,
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26
and announced that we had signed a contract to acquire Turkish CX provider Mayen in November 2021, which
establishes our presence in Turkey, starting in 2022.
Passionate people, delivering great customer experiences
Great customer experiences are delivered by passionate people who are given a stage on which they can truly
perform. Our unique entrepreneurial culture, which stems from our predecessor companies, means that our team
members are highly creative, unafraid to challenge the status quo, and always strive for operational excellence in
everything they do.
The diversity of our workforce also plays a crucial part in our success, enabling us to personalize our interactions to
local and cultural nuances. We strive to attract and retain the best talent for our business and provide a good home
for them. The facts speak for themselves, based on our DE&I survey: 55% of our team members are women; 3%
have a disability; we speak more than 60 languages; and 24% are expats – for example, our team members in Berlin
represent more than 50 nationalities.
True to our mission, we augment the talent of our team members with process, data and technology to deliver
impact for our partners. We truly believe that the greater the use of technology, the more human we can be.
Corporate Responsibility, defined and focused
We are driven to do the right thing, and see Corporate Responsibility (CR) as an essential part of our company,
culture and purpose. CR also receives an increased focus from investors, analysts, clients and the wider public, and
profoundly shapes our employer brand for attracting and keeping talent. That is why I am especially pleased that
Majorel has continued to make progress in CR.
As part of our preparations for becoming a public company, we enhanced our approach towards ESG
(environment, social and governance). In 2021, we updated our CR strategy to all countries of operation, defining
the five pillars of our approach:
• Diversity, Equity & Inclusion;
• Environment & Local Communities;
• Employee Rights & Fair Working Conditions;
• Wellbeing & Resiliency;
• Corporate Citizenship.
The diversity of our team members is baked into our DNA. That is why I am especially proud of our global Diversity,
Equity and Inclusion (DE&I) charter “We Are One.” Under the leadership of our international DE&I team, its
objective is to embed best practice within the business and celebrate the benefits of our truly diverse workforce.
As part of this, we have established two lighthouse projects: our Global Impact Sourcing standard and the Majorel
Women’s Leadership program. For example, one of our long-term impact programs in Egypt supports education,
health and wellbeing for African refugees and for young people aged 16-22. And our Women’s Leadership program
provides coaching, networking and professional development opportunities for women at Majorel.
We have committed to increase workforce diversity still further, at all levels and in all respects.
Continuing to shape our company
Majorel became a publicly listed company on the Euronext Amsterdam stock exchange on September 24, 2021.
It is a day that I will remember with emotion, as it represents an important milestone in our history. Becoming a
public company has increased our visibility and transparency to our clients, has enhanced our visibility compared to
our peers, and is an asset in attracting top talent. It also offers strategic optionality for future M&A opportunities.
I would like to take the opportunity to thank the teams at Majorel, Bertelsmann, and Saham for their great work in
preparing Majorel’s listing – their dedication and individual contribution to this exciting phase of the Company’s
history were truly outstanding.
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27
The Supervisory Board has worked closely with the Management Board to shape the future strategy of Majorel. We
also solidified our governance by establishing an Audit Committee and a Nomination and Compensation
Committee.
I am delighted by the quality of directors that we have been able to attract to Majorel. Our Board brings together
seasoned professionals with a wealth of complementary skills – whether functional, operational or international –
as well as diverse backgrounds and cultures. Four different nationalities are represented on our Board, with an
average age of 47, and 44% are women.
They have already made a considerable impact and I am looking forward to working with them and the
Management Board in the coming years.
Thank you
On behalf of the Supervisory Board I’d like to sincerely thank everyone who contributed to our success in 2021.
First and foremost, my heartfelt thanks go out to every single one of our 69,000 team members around the globe.
They are the direct connection between our clients and their customers, driving customer satisfaction and brand
loyalty.
The strong performance we are reporting today would not have been possible without their individual talent,
loyalty, and commitment. Working as #OneTeam, their effort has been characterized by true collaboration and
constant drive. Their commitment to service delivery has been exceptional.
Naturally, I also extend my thanks to our clients – for entrusting us with the care for what is most important for
them, and for choosing to grow with us. You can be assured that we will continue to put our everything into
providing excellent experiences for your customers and catering to your current and future needs.
Finally, I’d like to thank our investors for their continued trust in Majorel as a newly listed company. We all are
committed to create substantial value for our shareholders, and I look forward to reporting on our progress.
Moulay Mhamed Elalamy
Chairman of the Supervisory Board
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28
2.8 KEY PERFORMANCE INDICATORS
28
We assess the ongoing performance of our global business with KPIs focusing on six areas: Growth Momentum;
Growth with Existing Clients; Regional Expansion; Client Mix; Delivery Mix; and Product Mix.
GROWTH MOMENTUM
Number of team members
million
2021 1,752
2021 69,000
2020 1,340
2020 56,000
2019 1,172
2019 48,000
29
Since
our launch in 2019, our team worldwide has
grown
by more than 20,000 passionate and talented
individuals.
Operating EBITDA margin
%
2021 316
2021 18.0
2020 196
2020 14.6
2019 128
2019 10.9
increased by €187 million over the
Since 2019, the
operating EBITDA margin has
increased
significantly from 10.9% to 18.0% or by 710 bps.
2021 80
*
2020 86
2019 16
Group profit has increased by
28
All data as of the end of each calendar year.
29
At launch, January 2019.
Annual Report 2021
29
3. REGIONAL EXPANSION
Countries present
2021 116
2021 32
2020 113
2020 30
2019 n/a
2019 25
Since inception Majorel has extended its reach by 7
countries and has announced entry into three more
during Q1 2022, taking the total to 35.
– share of net revenue
5. DELIVERY MIX
Offshore delivery
– share of net revenue
%
2021 45
2021 39
2020 38
2020 35
2019 32
2019 30
-born clients, resulting in an increase of net
term.
In the last two years, Majorel’s strategy has delivered
continued strong growth of our offshore locations in
line with our strategic target of generating 45
-50% of
Majorel’s net revenue from offshore locations in the
mid
term.
vices, Trust & Safety – share of net revenue
6. PRODUCT MIX
Tech & Expert Services
– share of net revenue
%
2021 21
2021 9
2020 17
2020 5
2019 12
2019 6
-25%
term.
Net revenue share of Majorel’s Tech & Expert Services
has grown from to 9%, in line with its intention to
generate 10
-
15% of net revenue from this business line
in the mid
term.
Annual Report 2021
30
2.9 CORPORATE RESPONSIBILITY
We see Corporate Responsibility (CR) as a fundamental part of Majorel’s DNA and a natural extension of the
Company’s core values – Creativity, Excellence and Respect.
As part of our preparations for becoming a public company, we further developed our CR strategy, expanding it
along the five pillars of our approach:
The diversity of our workforce also plays a crucial part in our success. Based on our DE&I survey, 55% of our team
members are women; 3% have a disability; we speak more than 60 languages; and 24% are expats.
We also expand our potential talent pool by offering opportunities through impact sourcing. This global initiative is
making an important difference, reaching people in disadvantaged circumstances who are typically missed by
traditional recruitment programs.
In the wider world, we are committed to making a positive impact, being an active contributor to our host
communities, and treading as lightly as we can. We have also defined a roadmap with the destination of being a
climate-neutral enterprise by 2030.
The information for the Combined Non-Financial Statement (compliant with the European Directive 2014/95/EU
and provisions by the law of July 23, 2016 regarding the publication of non-financial and diversity information in
Luxembourg) can be found in the annual report of Bertelsmann SE & Co KGaA, Majorel’s consolidating shareholder.
Further information on Majorel’s non-financial information can also be found in the GRI (Global Reporting
Initiative) reporting of Bertelsmann SE & Co KGaA on Bertelsmann.com.
2.9.1 Environmental and employee-related issues
There have been no significant environmental or employee-related issues during 2021, aside from the shift of large
parts of our workforce to working from home in response to the ongoing COVID-19 pandemic, which is covered
elsewhere in this report.
Annual Report 2021
31
2.10 FINANCIAL REVIEW
"I am very proud that Majorel has overachieved on its financial
targets for 2021. Total net revenues of €1,752 million for the year
represent a 31% increase over 2020, and operating EBITDA reached
€316 million. In addition, Majorel generated free cash flow of €118
million and the net cash position at the end of the year was €79
million, allowing us strategic flexibility for inorganic growth.”
Otmane Serraj
Chief Financial & Shared Services Officer
The accounting policies applied by the Group in the preparation of its consolidated financial statements are
disclosed in the Accounting and Measurement Policies to the Consolidated Financial Statements.
A description of the internal controls in place for financial reporting can be found in section 2.11 below.
In all sections of this Annual Report, except Section 6, calculations of financial ratios are based on non-rounded
absolute amounts, which can result in minor deviations.
2.10.1 Financial KPIs
Net revenue
Net revenue for the Group corresponds to revenues as reported in our management reporting less certain direct,
order-related external costs which are part of external expenses and costs of materials and consist mainly of cost of
services purchased (subcontracted or outsourced services). Net revenue for each Segment corresponds to the
according Segment revenues less certain direct, order-related inter-Segment and external costs. Management
reporting data exclude revenues from minor activities (primarily the Sonopress Business) outside the Majorel
Group's core business which are reported in the consolidated income statement (the "Sonopress Business" is
defined as certain non-core business activities historically carried out by Arvato de Mexico, S.A. de C.V., which was
wound down in 2021).
in € million 2021 2020 growth
Revenue 1,811 1,375 +32%
less minor activities 2 4
less direct costs 57 31
Net revenue 1,752 1,340 +31%
Change in like-for-like net revenue
Change in like-for-like net revenue corresponds to net revenue growth year over year, adjusted for certain specific,
probably non-recurring items. For 2021 to 2020 like-for-like net revenue comparison the contribution of the first-
time consolidation of the Chinese business and COVID-related business were adjusted.
in € million Total
Net revenue 2020 1,340
COVID-related business 102
China 98
Like-for-like
212
Net revenue 2021 1,752
Annual Report 2021
32
Operating EBITDA
Operating EBITDA is defined as EBIT (earnings before interest and taxes) adjusted for depreciation/amortization,
impairment and reversal on intangible assets, property, plant and equipment and right-of-use assets, adjusted for
(i) impairment on goodwill and other intangible assets with indefinite useful life as well as gains from business
combinations, (ii) impairment on carrying amounts on assets held for sale, (iii) impairment/reversals on other
financial assets at amortized cost, (iv) impairment/reversals on investments accounted for using the equity
method, (v) results from disposals of investments, (vi) fair value measurement of investments, and (vii)
restructuring and other special items. We use operating EBITDA to assess the operating performance of our
business as operating EBITDA shows our EBIT as adjusted for depreciation and amortization, which are non-cash
charges, and specific periodic outcomes to enhance comparability of results over periods. When comparing
operating EBITDA with peer group data, it should be taken into account that the total adjustments in a given year
do not represent the full amount of all special effects incurred in a given year, as rather only material effects
subject to certain thresholds will be considered for the purpose of calculating operating EBITDA.
in € million 2021 2020
EBIT (earnings before interest and taxes) 105 116
Special items 126 3
Amortization/depreciation, impairment and reversals on intangible
assets, property, plant and equipment and right-of-use assets
85 77
Operating EBITDA 316 196
Operating EBITDA margin
We define operating EBITDA margin as operating EBITDA divided by net revenue.
Free cash flow
Free cash flow is defined as operating EBITDA less adjustments minus increase/plus decrease in net working capital
after net cash out from pensions, payments from leases and net investments in property, plant and equipment and
intangible assets excluding net payments from acquisitions and disposals of financial assets.
Capital expenditure
Capital expenditure is defined as investments in intangible assets and investments in property, plant and
equipment.
Net working capital
Net working capital is defined as inventories plus trade and other current receivables, other current non-financial
assets and deferred items (assets), less trade and other current payables, other current provisions and deferred
items (liabilities). Current income tax receivables and payables and cash equivalents are not included in our
definition of net working capital. We use net working capital to assess the capital requirements of our operating
business.
Economic debt
Economic debt is defined as financial debt less cash and cash equivalents plus for pensions, similar obligations, and
lease liabilities.
Cash conversion rate
Cash conversion rate is defined as free cash flow divided by operating EBITDA.
2.10.2 Financial highlights
Majorel has successfully delivered another year of revenue and profitability growth. Net revenue has grown by 31%
to €1,752 million and operating EBITDA has increased by 61% to €316 million. EBIT for 2021 amounted to €105
million and Group profit of €80 million. Earnings per share (EPS) were €0.8. A potential dividend payment will be
proposed at the AGM scheduled for June 20, 2022.
Annual Report 2021
33
Majorel generated free cash flow of €118 million. Our net cash position at the end of the year was €79 million,
allowing us strategic flexibility for inorganic growth.
2.10.3 Revenue and net revenue
Majorel Group
Revenue for the year ended December 31, 2021 amounted to €1,811 million, representing an increase of 32%
(2020: €1,375 million).
Net revenue in 2021 was €1,752 million, which represents an increase of 31% year over year (2020: €1,340
million). This growth was supported by the integration of the China business, that was acquired as of January 1,
2021, and COVID-19-related business in the EASA Segment.
Like-for-like net revenue growth, excluding these effects, amounted to 16% and was driven by clients in the target
verticals of Global Internet and BFSI.
Net revenue from Global Internet clients represented 45% of net revenue (2020: 38%) at €788 million, an increase
of 53% compared to the previous year. This is in line with our mid-term target to increase the share of Global
Internet to more than 50% of Group net revenue. Net revenue with BFSI clients increased in 2021 by 12%
compared to 2020. The net revenue share of Telco clients reduced from 19% at the end of 2020 to 12% at the end
of 2021, in line with our mid-term targets (of around 10%).
In terms of our service lines, we have seen growth in Content Services, Trust & Safety, increasing the share of net
revenue from 17% at the end of 2020 to 21% at the end of 2021 (mid-term target 20-25%). The net revenue share
of Tech & Expert Services increased from 5% in 2020 to 9% in 2021 (mid-term target 10-15%), partially supported
by the integration of the China business and our technology solutions for the COVID-19-related business.
Contributing to the 2021 net revenue growth was a further increase in volumes observed in our offshore locations
around the world. In line with our strategic targets (mid-term target: 45-50%) we increased the offshore net
revenue share from 35% in 2020 to 39% in 2021. Excluding COVID-19-related business, the offshore net revenue
share in 2021 would have been 41%.
Segment reporting
% change
Net revenue in € million 2021 2020 reported like-for-like
EASA 1,290 1,086 +19% +9%
GEMS 364 253 +44% +44%
CEA 98 0
Total 1,752 1,340 +31% +16%
EASA Segment
Net revenue from our EASA Segment (Europe, Africa, South America) was €1,290 million in the year ended
December 31, 2021. The increase of 19% compared to 2020 was also attributed to the contribution of COVID-19-
related business (of €102 million of net revenue in 2021), where Majorel supported several public institutions and
governments with their pandemic initiatives.
Like-for-like, excluding the COVID-19-related business, net revenue in EASA increased by 9% in 2021. This growth
was mainly driven by existing and new clients in our target verticals Global Internet and BFSI, also compensating for
active client portfolio management in line with our strategy.
Annual Report 2021
34
The increase of net revenue in EASA was also driven by the strong development in our near- and offshore locations
in Africa, Eastern Europe, and Latin America.
GEMS Segment
Net revenue from our GEMS Segment (Global English, Middle East, South-East Asia) was €364 million in the year
ended December 31. 2021, corresponding to a year-on-year growth rate of 44%. The key driver for this growth was
the strong increase of net revenue with Global Internet clients, particularly in the Philippines, Canada, the US,
Egypt, Malaysia, India and Kenya.
CEA Segment
The CEA Segment reported net revenue of €98 million for the year 2021 – in line with the Company's guidance that
the CEA Segment would contribute 5-7% of Group net revenue. The positive contribution from this regional
Segment has been driven by further expansion of the footprint in China, the continuing growth of digital consumer
engagement services, and a focus on consumer products and digital clients.
2.10.4 Operating EBITDA
Majorel Group
Operating EBITDA amounted to €316 million in the year ended December 31, 2021, showing a strong increase of
61% compared to the previous year (2020: €196 million). The operating EBITDA margin increased from 14.6% at
the end of 2020 to 18.0% at the end of 2021, corresponding to a margin expansion of 340bps.
The key drivers for the increase in operating EBITDA and the margin expansion were:
• overall business growth;
• operational excellence;
• more complex, value-added services;
• client portfolio management;
• improved global delivery mix;
• COVID-19 related business;
• continued high work-from-home rate; and
• the first-time consolidation of the China business acquired at the beginning of 2021.
in € million 2021 2020
EASA 223 153
in % of net revenue 17.3% 14.1%
GEMS 75 44
in % of net revenue 20.6% 17.5%
CEA 15 0
in % of net revenue 15.3%
Other/minor activities 3 -1
Total
316
196
in % of net revenue 18.0% 14.6%
Segment reporting
EASA Segment
Operating EBITDA for the EASA Segment amounted to €223 million at the end of 2021, a significant increase
compared to 2020 operating EBITDA of €153 million. The operating EBITDA margin increased accordingly from
14.1% in 2020 to 17.3% in 2021.
Annual Report 2021
35
The margin improvement is driven by our main profitability drivers, especially: continued operational excellence;
more complex, value added services; client portfolio management; continued high work-from-home rates; further
expansion of Tech & Expert Services; and an increasing share of offshore delivery.
The COVID-19-related businesses also contributed to the operating EBITDA growth in EASA in 2021.
GEMS Segment
Operating EBITDA for the GEMS Segment amounted to €75 million for the year ended December 31, 2021,
increasing by 69% year over year from €44 million in 2020. The operating EBITDA margin increased from 17.5% in
2020 to 20.6% in 2021.
Margin improvement in GEMS has been driven by our operational excellence; more complex, value added services;
client portfolio management; continued high work-from-home rates; and an increasing share of offshore delivery.
CEA Segment
Operating EBITDA from the first-time consolidation of the China business amounted to €15 million for 2021 with an
operating EBITDA margin of 15.3%.
The CEA results benefited from the continuing growth of digital consumer engagement services, the growth of
consumer products and digital clients, and the expansion of the footprint in China.
2.10.5 EBIT and Group profit
EBIT amounted to €105 million for the year ended December 31, 2021, corresponding to a decline of 10%
compared to the 2020 results of €116 million.
EBIT for 2021 corresponds to operating EBITDA after deducting:
• depreciation/amortization, impairment and reversal on intangible assets, property, plant and equipment and
right-of-use assets, amounting to €85 million in 2021 (2020: €77 million);
• restructuring and other special items of €126 million (2020: €3 million), of which, €128 million related to the
IPO Bonus with Equity Deferral granted to the Management Board members and selected other managers
versus a (positive) €2 million relating to a partial release of a restructuring provision built in 2020.
Financial result corresponded to expenses of €5 million in 2021 compared to expenses of €9 million in 2020.
Income tax expenses amounted to €20 million in 2021, slightly lower than in 2020 (€21 million). The effective tax
rate of Majorel Group in 2021 was 20%, (2020: 20%).
Group profit amounted to €80 million for 2021, representing a year over year decrease versus €86 million
generated in 2020. Earnings per share (EPS) are at €0.8.
A potential dividend payment will be proposed at the AGM scheduled for June 20, 2022.
Annual Report 2021
36
2.10.6 Free cash flow and capital structure
Free cash flow
in € million 2021 2020
Cash flow from operating activities
185
223
add back: Taxes paid 40 17
add back: Other adjustments not included in free cash flow (1) 1
less: Capital expenditure (61) (46)
less: Payment from lease (50) (43)
less: Scope and other effects 5 (2)
Free cash flow
118
150
in % of operating EBITDA (CCR)
37%
77%
Our free cash flow is negatively affected by IPO-related bonus payments.
Net working capital
in € million 31.12.2021 31.12.2020
Inventories 0 0
+ Trade receivables 388 291
- Trade payables -129 -104
Trade working capital
259
187
+ Other receivables and other current assets
30
75 60
+ Deferred items (assets) 15 12
- Other payables -285 -174
- Deferred items (liabilities) -2 -5
- Other provisions -30 -22
Other working capital
-228
-129
Net working capital 31 58
Our other payables were affected by IPO-related bonus payments. Trade and other receivables acquired in
business combinations equaled €34 million. These effects aside, the trade working capital has improved.
Capital expenditure
CAPEX, investments in intangible assets, property, plant and equipment, amounted to €61 million in 2021
compared to €46 million in 2020, mainly relating to:
• footprint expansion to new countries (Croatia in 2021 and preparation for North Macedonia and Ghana, which
were launched in early 2022);
• opening of new sites;
• expansion and refurbishment of existing sites.
CAPEX in relation to net revenue was at 3.5%,compared to 3.4% in 2020. Excluding COVID-19-related business from
net revenue, CAPEX would amount to 3.7% of net revenue, in line with our target range of 3.5-4.0%.
30
Advance payments on business acquisition are excluded (€58 million).
Annual Report 2021
37
Cash conversion rate
The cash conversion rate (CCR) was at 37% in 2021 compared to 77% in 2020. The key reason for the decline in
2021 was the payment of the IPO Bonus with Equity Deferral. Excluding this effect, the CCR amounts to 64% and
would be above our target corridor of 51-56%.
Equity
The equity amounts to €399 million compared to €317 million in the previous year. The net result represented €80
million. €19 million were distributed to the shareholder Bertelsmann Luxembourg S.à r.l.
during the first semester.
Cumulative foreign exchange differences amounted to €8 million.
Net cash position and economic cash/debt
in € million 31.12.2021 31.12.2020
Cash and cash equivalents 238 195
Liabilities to banks (74) (33)
Other financial debt (85) (21)
Net cash position
79
141
Provisions for pensions and similar obligations (43) (50)
Lease liabilities (125) (95)
Economic cash/(debt) (89) (4)
Our net cash position of €79 million includes an addition of new financial debt of €70 million in December 2021,
funding partially the year’s investments, exceptional IPO-related working capital effects and the acquisition of the
new entity in Turkey.
Adding the lease liabilities and the provisions for pensions and similar obligations, which have progressed by 16% in
line with our growth, our economic debt lies at €89 million.
2.10.7 Subsequent events
We have continued to successfully execute our strategy since the end of 2021, and have maintained our
momentum with further geographic expansion and additional business growth.
• We executed the acquisition of Mayen Telekomünikasyon Hizmetleri A.Ş. (“Mayen”), one of Turkey’s leading
independent nearshore CX providers. Mayen became part of Majorel as of January 1, 2022, strengthening our
offshore leverage for Europe and allowing us to offer expanded services to our international clients – especially
in the Global Internet vertical.
• On January 24, we announced our entry into North Macedonia, in Skopje, further adding to our strong
footprint for European languages. On January 25, we communicated our entry into Ghana, further
strengthening our already leading position in Africa.
• On February 10, we announced an agreement to an expanded strategic partnership with our client
Booking.com to transfer 12 of Booking.com’s 14 internal CX service centers in Europe, Asia Pacific, and the
Americas to Majorel. It also fulfills our strategic goal of expanding our geographic footprint into new countries
– South Korea, Japan, Thailand and Lithuania – and further consolidates our existing presence in the other
markets too. The new partnership agreement is expected to commence in the second quarter of 2022 after the
transfer of the service centers from Booking.com to Majorel takes place, which is subject to customary closing
conditions, including regulatory approvals and completion of works council consultations.
• We will continue to monitor risks on an ongoing basis given the ever-changing regulatory and situational
landscape as well as the development of current events in Ukraine including economic consequences around
the world and their potential impact on our business.
Annual Report 2021
38
2.10.8 Outlook
This outlook is based on Majorel’s current assessment on the development of the business in 2022 and the general
CX market, combined with economic and labor market conditions in the Company’s geographic footprint. It
remains to be seen how recent events in Ukraine, and the ongoing COVID-19 pandemic, may impact the business
environment and world economy in this year.
Based on current visibility, Majorel continues to expect strong organic growth from existing clients, supplemented
by new logo wins and the positive impact from the effects of the acquisition of Mayen and the expanded strategic
partnership with Booking.com (subject to customary closing conditions). This would result in an increase of 12% to
18% compared to the net revenue without COVID-19 related services in 2021. The company anticipates some
COVID-19 business will remain in 2022, but at a much smaller scale than 2021 – this would approximately offset
the expected limited negative business impacts resulting from the Ukraine crisis.
Against this background, Majorel expects its net revenue in 2022 to again increase and to be in the range of
€1,850-1,950 million. Further, the Company expects its Operating EBITDA margin for 2022 to be between 16.0%-
17.0%, also factoring in the above mentioned effects.
We will continue to execute our proven strategy, driven by the expertise and commitment of our people, and built
on the trust and loyalty of our long-term clients.
Otmane Serraj
Chief Financial & Shared Services Officer (CFSO)
Annual Report 2021
39
2.10.9 Review of the Parent Company results
As a holding company, Majorel Group Luxembourg S.A., holds investments in numerous subsidiaries, finances
them, provides certain management services, and receives trademark fees invoiced to its subsidiaries.
Majorel Group Luxembourg S.A. became a publicly listed company on the Euronext Amsterdam stock exchange on
September 24, 2021. In 2021 the Company continued to centralize core corporate functions of the Group. As in
prior years, the Company did not have any branches during 2021.
The profit of the Company for the year 2021 amounted to €11 million (2020: loss of €1 million). This increase
relates to an improvement in the financial result of €50 million which offsets the decrease in the operating result
by €37 million.
The financial result mainly improved thanks to dividend income of €50 million received in 2021 (2020: €nil million).
The decrease of the operating result mainly resulted from an increase in operating costs due to expenses relating
to the IPO Bonus with Equity Deferral of €39 million in 2021 (2020: €nil million).
in € million 31.12.2021 31.12.2020
Sales - -
Operating income
(1)
35 17
Operating expenses
(2)
(72) (17)
Operating result (37) -
Financial income
(3)
61 3
Financial expenses
(4)
(12) (4)
Financial result 49 (1)
Taxes (1) -
Net result
11
(1)
(1) Operating income mainly relates to invoicing subsidiaries with management service and trademark fees.
(2) Operating expenses mainly include staff costs of €14 million (2020: €1 million), general expenses of €57 million (2020: €15 million) and value adjustments
of €1 million (2020: €nil million).
(3) Financial income includes dividends of €50 million (2020: €nil million), foreign exchange gains of €9 million (2020: below €1 million) and interest income of
€2 million (2020: €2 million).
(4) Financial expenses mainly include foreign exchange losses of €10 million (2020: €3 million) and interest charges of €2 million (2020: €1 million).
2.11 INTERNAL CONTROLS OVER FINANCIAL REPORTING
Majorel’s internal control system (ICS) over financial reporting aims to provide reasonable assurance on the
reliability of external and internal financial reporting, and its conformity with the applicable laws and regulations. It
helps to ensure that financial reporting presents a true and fair picture of the Group’s net assets, financial position
and operational results. The ICS for the accounting process consists of the following areas.
Standards and rules
The rules governing the Group’s financial reporting environment and critical accounting policies are set out in the
Group’s internal rules for accounting and the preparation of financial statements (such as IFRS manuals, guidelines
and circulars) which are immediately available to all employees involved in the accounting process. Standards of a
minimum control framework for key accounting processes at the level of Majorel’s fully consolidated subsidiaries
are formalized in a set of expected key controls.
Majorel’s centralized treasury and corporate finance activities are governed by dedicated policies and procedures.
Hedging of exposure in non-Euro currencies is governed by a strict policy. All internal and external financial
Annual Report 2021
40
reporting processes are organized through a centrally managed reporting calendar. The Code of Conduct requires
the Group’s companies to manage record-keeping and financial reporting with integrity and transparency.
Systems and related controls
Locally used (ERP, treasury applications) finance systems are monitored to ensure a consistent set-up of system-
embedded controls. Segregation of duties, access rights and approval limits are regularly reviewed by the local data
owners for all reporting units. Internal and external financial reporting is transmitted through a centrally managed
integrated finance system – from budgeting and trend year analysis, monthly internal management reporting, and
forecasting of financial KPIs, to consolidation and external financial reporting, and finally risk management
reporting (see risk management section on pages 41 to 49).
Extensive automatic system controls ensure the consistency of the data in the financial statements. The centrally
managed integrated finance system is subject to ongoing development through a documented change process.
Systemized processes for coordinating intercompany transactions serve to prepare the corresponding
consolidation steps. Circumstances that could lead to significant misinformation in the Consolidated Financial
Statements or internal management reporting are monitored centrally and verified by external experts as required.
Specific system-embedded controls support the consolidation process, including the reconciliation of intercompany
transactions.
Analytics and reporting
All internal and external local and consolidated financial reporting is systematically reviewed by local finance staff
and by the Corporate Finance team. Typical analyses include comparisons with previous years, budget and
forecast, financial KPIs, flows of key captions on the income statement, statement of the financial position, changes
in equity, and cash flow statement. The Corporate Finance team and Segments are integrated into the internal
management reporting. Internal and external reporting are reconciled during the Segment reconciliation process.
Regular communication between Majorel’s Segment and regional management and finance teams and the
Corporate Finance departments ensures that any issue that could affect the Group’s financial reporting is
immediately flagged and resolved. Both the Group as a whole and the Segments and regions are in continuous
contact with subsidiaries to ensure IFRS-compliant accounting as well as compliance with reporting deadlines and
obligations.
Full-year, half-year and quarterly reporting to the financial market is reviewed by the Audit Committee and
approved by the Supervisory Board.
Transparency
Majorel’s policy on the reporting of significant compliance incidents requires business units to immediately report
fraud or other significant compliance incidents to the Group. Identified control weaknesses that could affect the
reliability of financial reporting – reported by either external auditors or Internal Audit – are brought to the
attention of management and the Audit Committee, and are part of a follow-up process.
Each year, the business units self-assess the maturity level of their local internal controls over financial reporting.
Results of this self-assessment are reviewed by the Majorel Corporate Risk department and reported to the Audit
Committee. The Audit Committee is regularly updated on the key accounting, tax and compliance issues within the
Group.
The Majorel Corporate Risk department constantly promotes the importance of sound internal controls – not only
over financial reporting, but also for operational processes – through dedicated workshops across Majorel’s three
business Segments, and the work of the Internal Audit department.
Like the risk management system (RMS), each ICS cannot guarantee with absolute certainty that significant
misinformation in the accounting process can be prevented or identified.
Annual Report 2021
41
2.12 RISK MANAGEMENT
2.12.1 Risk management
2.12.1.1 Principles of our risk management system
As with all enterprises, risk accompanies the everyday business of Majorel. We define “risk” as a potential future
development or event that can negatively affect our ability to achieve Majorel’s strategic, operational, reporting-
related and compliance-related objectives.
Majorel’s risk management system (RMS) continuously helps to protect us through prevention and mitigation of
risks in the course of day-to-day operations, as well as the execution of Majorel’s mission and strategic objectives.
The RMS applies globally to all Majorel Segments, legal entities and reporting units. It is designed to identify risks at
an early stage, to monitor them within defined levels of risk exposure and to ensure, with reasonable assurance
through the implementation of an internal control system (ICS), that Majorel’s objectives are achieved. The ICS is
considered an integral part of the RMS.
Majorel follows the key principle that managing risk is everyone’s responsibility. Accordingly, the risk management
process is focused on the following three main objectives:
• promote and embed a culture of common risk management in the daily work of Majorel team members at all
levels;
• develop consistent risk policies on key matters at reporting unit level while also considering local challenges
and environments; and
• ensure a harmonized set of measures for prevention, detection and mitigation when assessing key risks, with
continuous monitoring and improvement.
2.12.1.2 Risk management framework
At all levels of Majorel, risk management follows the frameworks of the Committee of Sponsoring Organizations of
the Treadway Commission (COSO): the COSO Internal Control – Integrated Framework (COSO I) and the COSO
Enterprise Risk Management – Integrated Framework (COSO II). These form the basis of uniform and appropriate
management of risks.
2.12.1.3 Risk management process
Majorel’s risk management process is designed to systematically identify and assess risks, to find appropriate risk
response measures and to record and monitor the risks identified.
Risk identification and assessment
The early and ongoing identification of risks is one of the most important tasks within the RMS/ICS. For identifying
risks, Majorel’s legal entities and reporting units individually define key risk criteria, depending on the respective
type, scope, complexity and risk level of the specific business activity and business environment. The respective
management then assesses key risks by considering the potential negative impact of the risk on achieving the
Company’s objectives.
Once identified and evaluated, risks are recorded and then reported from the bottom up. Each location of Majorel
specifies the levels of the organization at which RMS/ICS Officers are to be appointed, along with the lines of
management responsibility, in order to ensure that an effective RMS/ICS is set up, operated and continually
improved.
Risk response measures
Effective risk response measures must be implemented when key risks are identified. Majorel regards these
measures as falling into four types:
• Risk avoidance (e.g. by not entering into contracts fraught with risk).
• Risk reduction (e.g. by diversifying products).
• Risk transfer (e.g. by using the protection of insurance contracts).
• Risk acceptance (e.g. by electing to bear a risk ourselves).
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42
The responsibility for implementing risk response measures lies with the relevant management.
Risk recording and monitoring
In order to monitor the effectiveness of risk response measures and to reassess risks, recording and appropriate
control activities are necessary. For this purpose, Majorel employs a risk management reporting tool, which also
provides a mechanism to document and track control activities. Risk reporting is classified into predefined
categories and includes information on risk probability, risk response measures and responsible people.
The entire risk management process is overseen by the Majorel Corporate Risk department, which also ensures the
appropriateness of reporting. Risk response measures are monitored by our internal Risk and Compliance
Committee
31
, which reports to the management and other committees (e.g. the Audit Committee). The monitoring
of the system is also the focus of regular internal audits to ensure the effectiveness and quality of the RMS/ICS. This
is achieved by a self-assessment of the controls integrated into the business processes, with audits conducted by
the Corporate Audit department and, as needed, external auditors.
2.12.2 Principal risks and uncertainties
Majorel is exposed to a variety of risks. The top ten risks to Majorel identified in its most recent risk review in 2021
are listed in order of priority in the table below. In line with the level of potential financial loss, the risks are
classified as low, moderate, significant, considerable or endangering, for the purposes of risk tolerability.
Risk classification
Priority Type of risk Low Moderate Significant Considerable Endangering
1
Client risks
2 Hazard risks
3 Changes in market environment
4 Financial market risks
5
Integrity and compliance risks
6 Employee-related risks
7 Pricing and discounting
8
Cyclical development of
economy
9 Legal and regulatory risks
10 Country risks
Risk classification (potential financial loss in a three-year period): low: <€3 million, moderate: <€5 million, significant: <€15
million, considerable: <€30 million, endangering: >€30 million
Note: There are no risks classified as considerable or endangering in this reporting cycle.
Majorel is committed to the vigilant management of material risks. The following table outlines the principal risks
and uncertainties identified by Majorel’s most recent risk review in 2021. They are not listed in any particular order
and Majorel recognizes that risks can and will evolve over time. While the following table has been prepared to the
best of Majorel’s knowledge and is based on its risk management framework, there may be other risks not
currently known to Majorel or not considered material on the date of this Annual Report, which may become major
factors and may adversely impact Majorel. In addition, Majorel cannot guarantee that all objectives will be
achieved and that risks will be completely mitigated.
31
The Risk and Compliance Committee is not an official body under the statutes of Majorel. It is an internal body comprising senior representatives from
corporate risk, IT, HR, finance and communications.
Annual Report 2021
43
Type of risk Description and areas of impact Mitigation activities
Client risks
Loss of clients Majorel’s business is dependent on key
clients, and the loss of one or more of
these key clients could adversely affect its
business.
Majorel goes to considerable lengths to
ensure client demands are met through
operational excellence, good account
management, contract adherence and
service-level agreement performance.
Industry
Majorel’s business depends significantly
on specific industry verticals. Any
decrease in demand from these industries
for its services and solutions could reduce
Majorel’s revenue and harm its business.
Majorel continuously reviews its services
and industry verticals. The market is
monitored to take advantage of emerging
opportunities across a wide range of
industries and services. This approach
ensures that we continue to diversify the
verticals in which we operate.
Contracts Majorel’s contracts do not contain volume
commitments and contain provisions,
including termination-at-convenience
clauses, that could cause fluctuations in
its revenue and adversely affect its
operations and financial results.
Through its account management team and
by consistently delivering upon Majorel’s
commitments through key performance
indicators and service level agreements,
Majorel maintains strong, positive
relationships with its clients. Majorel also
looks to develop a strategic partnership
with its key customers to help them achieve
their long- and short-term objectives.
Client acquisition Majorel’s continued growth depends on
its ability to cost-effectively acquire new
clients, particularly high-growth
companies, and failure to do so could
adversely affect its business.
Majorel has recently allocated additional
resources and dedicated sales teams for
winning new clients. The Company’s
vertical-focused sales model includes
differentiated growth strategies for existing
as well as new customers and a customized
approach for global and regional
customers.
Hazard risks
Business continuity
Majorel is vulnerable to natural disasters,
technical disruptions, pandemics,
accidents and other events impacting its
facilities that could severely disrupt the
normal operation of its business. Although
Majorel carries commercial liability
insurance, the coverage may be
insufficient, or provide no coverage at all,
for certain events.
Majorel develops and evaluates detailed
business continuity plans in order to be
able to continue operations with minimal
impact, in case of damage to its facilities.
Plans may include diversion of services to
other sites or countries, as well as physical
movement of staff from one location to
another, or remote working solutions.
Another key component in Majorel’s
contracts is business continuity testing,
where the plans are fully tested in a
controlled simulation to ensure all aspects
of the client’s service are maintained and
operate as expected.
Growth Majorel’s growth and profitability could
be materially affected if it fails to adapt its
Majorel’s focus on technology and tailored
customer solutions ensures that it monitors
the latest technical developments. This,
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44
services and solutions to changes in
technology and customer expectations.
combined with its dedicated account
management team, means that it can
assess customer needs and deliver the
most effective solution.
Market risks
Competition Majorel faces intense competition from
existing and emerging competitors. Any
inability to compete successfully as well as
pricing pressure or loss of market share
could result in reduced operating profit
margins and diminished financial
performance.
Majorel continuously assesses its
competitive environment and is always
abreast of competitor performance and
aspirations. In addition, the Company
continues to improve the collaboration and
performance of its sales and bid
management teams to increase its market
share.
Emerging markets Majorel operates in certain emerging
market economies, and its strategy may
involve expanding or developing its
business in these or similar regions. This
may expose it to certain risks such as
adverse trade policies or barriers,
inflation, hyperinflation, currency volatility
and negative economic effects, difficulties
in enforcing agreements or judgements
and collecting receivables in foreign
jurisdictions, as well as inadequate
infrastructure and logistics challenges.
Risks related to emerging markets are
assessed, managed and reported through
Majorel’s risk management system. In
addition, the Company has a suite of
measures and controls that apply to all
locations to ensure a consistent standard
globally. This includes policies, training and
awareness related to topics such as trade
compliance, anti-trust and
anti-corruption.
Consolidation Current trends of consolidation in
Majorel’s industries and among peers may
result in new competitors with a greater
scale, a broader footprint, better
technologies, and price efficiencies that
are attractive to Majorel’s customers.
Majorel constantly evaluates its
opportunities to expand its services and
geographical footprint through organic
growth or strategic acquisitions.
Financial market
risks
Currency risk Majorel’s financial performance could be
adversely affected over time by certain
movements in exchange rates, particularly
if currencies in which it incurs expenses
appreciate against the Euro, or if the
currencies in which it receives revenues
depreciate against the Euro.
Majorel closely monitors foreign exchange
rates and advises its subsidiaries to hedge
themselves against foreign currency risks in
the local reporting currency by signing
forward agreements with banks that have a
high credit rating. And the Majorel
subsidiaries manage their foreign exchange
exposure with natural hedges as much as
possible.
Annual Report 2021
45
Integrity & compliance risks
Compliance with
laws and regulations
Majorel and its customers are subject to a
variety of laws and regulations globally.
Compliance with diverse legal
requirements is costly and time-
consuming and requires significant
resources, and non-compliance may result
in civil or criminal penalties and other
punitive measures.
Majorel has invested significantly in legal
and compliance capabilities in each
Segment. In addition, Majorel periodically
monitors material compliance obligations
and reviews changes to international and
domestic legislation.
Fraud If Majorel’s team members were to
misuse their access to the Company’s and
its clients’ systems as a conduit for
criminal activity or serious misconduct,
negative press coverage could harm
Majorel’s ability to attract new customers.
Existing customers might also terminate
or reduce the scope of their dealings with
Majorel, which would have an adverse
effect on its business and the results of its
operations.
Majorel has implemented access controls,
fraud detection measures and risk
assessments for specific clients and sites
based on risk level, nature of business,
sensitivity of data and levels of employee
access to sensitive data.
Working from home Majorel’s global remote working
solutions, deployed during the COVID-19
pandemic, could result in heightened
confidentiality risks due to services being
delivered in a physically unsupervised
environment and via computer systems
and networks outside of Majorel’s control
and management.
To maintain an adequate level of security
standards, Majorel has implemented new
procedures, visual checks, when possible,
and new security and data protection
requirements to team members’ work
contracts for anyone working from home.
The Company also offers online training on
how to manage sensitive information and
keep it secure.
Data protection
Majorel’s business is subject to a variety
of laws and regulations relating to privacy
and data security. The unauthorized
disclosure of sensitive or confidential
client and customer data, or security
breaches and incidents, including as a
result of a cyber-attack, could subject
Majorel to significant liability and
protracted and costly litigation. This could
also lead to investigations and penalties
from regulators, reputational damage and
loss of clients.
As part of a holistic approach to protecting
the confidentiality, integrity, availability and
resilience of its data, its clients’ data, their
customers’ data and Majorel’s systems,
Majorel has established an integrated
approach in three key areas to ensure
adequate data protection:
• A comprehensive data protection
organization with data protection
officers at Group and regional level.
• A structured cybersecurity global
governance framework, where critical
assets are monitored across Segments
by a global Security Operations Center
(SOC) 24X7.
• A Central Information Security Officer,
responsible for implementing a global
information security organization
across Majorel and for enforcing the
Majorel Information Security
Management System (ISMS) guidelines
across all countries.
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46
Cybersecurity
Cybersecurity threats and attacks, ranging
from inadvertent disclosures or acts by
team members to purposeful attacks by
individuals and groups of hackers, could
result in (i) disclosure, unauthorized
access to or corruption of data, including
personal, confidential and proprietary
information, (ii) defective services,
including as a result of system and
production downtimes, and (iii)
interruptions in the ability to operate
Majorel’s business.
Majorel has built a structured cybersecurity
global governance framework with a
Central Information Security Officer
responsible for implementing a global
information security organization across
Majorel and for enforcing the Majorel
Information Security Management System
(ISMS) guidelines across all countries.
Majorel has also set up a global program of
Basic Infrastructure Measures (BIM) that
aims at continuously strengthening its
network, domains, identification and access
control, IT security technologies and IT
security processes. In addition, Majorel has
also established a global Security
Operations Center (SOC) that is tasked with
secure communication, incident response,
threat hunting, security quality and
vulnerability management, continuous
proactive monitoring and root cause
investigation.
Compliance of
associated parties
Team members, contractors, consultants
or other associated parties may behave in
contravention of Majorel’s internal
policies or laws and regulations applicable
to it, or otherwise act unethically or
illegally, which could harm Majorel’s
reputation or subject it to liability.
Majorel is implementing training to
increase awareness for compliance-related
issues. Additionally, Majorel is establishing
minimum compliance controls globally.
Employee-related risks
Key employees
Majorel’s business depends on large
numbers of trained and skilled team
members and key people. If Majorel fails
to attract, train and retain sufficient
numbers or loses one or more key
leaders, this could negatively affect its
business.
Majorel closely monitors the labor market
and, if required, proposes better and more
competitive benefit packages to its team
members.
Personnel costs Increases in personnel expenses, as well
as the inelasticity of Majorel’s labor costs
relative to short-term movements in
client demand, could have a significant
impact on its financial performance.
Personnel costs are closely monitored by
management. In addition, local labor laws
that may impact personnel costs are
assessed and reported regularly.
Alternative sites and locations with more
favorable competitive environments are
evaluated on a regular basis. In addition,
prices are renegotiated where possible on a
regular basis, particularly vis-à-vis wage
inflation (e.g. based on indexation clauses).
Litigation and
disputes
From time to time, Majorel has been, and
may in the future be, party to various
claims and litigation proceedings initiated
by its team members. In particular, these
Majorel constantly evaluates the working
conditions for its team members and aims
to maintain a safe and healthy workplace,
with careful attention paid to working
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47
include compensation for personal injury
(e.g. as a result of disputes related to
Content Services, Trust & Safety),
workers’ compensation, employment
discrimination and other employment-
related damages, which could result in
significant liabilities and impact Majorel’s
business.
hours and physical aspects; establishing a
code of conduct for its team members; and
ensuring compliance with legal rights,
especially with regard to employee data
protection.
Strikes and social
conditions
A strike, work stoppage or slowdown by
Majorel’s team members, or a significant
dispute with its team members, whether
or not related to these negotiations, could
result in a significant disruption of
Majorel’s operations or higher ongoing
labor costs.
Majorel is mindful of its responsibility
towards its people. Respecting and
ensuring the rights of its team members,
based on respective local legal
environments, is the natural basis of
Majorel’s approach to team member
management. To encourage team members
to raise compliance concerns, Majorel has
set up central “speak up” channels, which
allow for anonymity.
In addition, we are closely monitoring the impacts of the recent start of war between Russia and Ukraine. We do
not operate directly in these countries. Nevertheless, our business could be impacted by indirect effects and
tensions in the macroeconomic environment.
2.12.3 Financial risk management
Financing arrangements
As of December 31, 2020, the Company had various types of financing available to enable it to meet its obligations,
and which are set out below:
• Two shareholder loans with Bertelsmann Business Support S.à r.l. totaling €85 million at fixed interest rates,
repayable in December 2022.
• A syndicated loan of €200 million, out of which €50 million is an accordion option, was signed in December
2021 at a variable rate on Euribor. Its two facilities mature in December 2024, with an optional year, and
December 2025, respectively. As of December 31, 2021, €70 million was drawn. €130 million remain available
if we include the accordion option.
As of December 31, 2021, the Company was in compliance with its leverage ratio financial covenant for its
syndicated facility.
Majorel also uses reverse factoring in Spain to a limited extent.
Exposure to credit risk
The impairment matrices are created for business unit-specific groups of receivables, each with similar default
patterns. In addition, separate risk assessments are performed. Majorel also considers other quantitative and
qualitative information and analyses based on the experience of the Majorel Group as well as of the CRM
businesses formerly held by Bertelsmann and by Saham. Additionally, reasonable assessments including forward-
looking information such as customer-specific information and forecasts of future economic condition have been
taken into consideration. Contract assets have substantially the same risk characteristics as trade receivables for
the same types of contracts, so that the expected loss rates for trade receivables are a reasonable approximation
of the loss rates for contract assets.
For more information please refer to Note 24 (Additional Disclosure on Financial Instruments) in the Consolidated
Financial Statements.
Annual Report 2021
48
Financial instruments
Majorel’s financials are being consolidated in the Bertelsmann Group as one of the major shareholders of Majorel.
The principles of the financial risk policy are described below.
Financial risk management
The Majorel Group is exposed to various forms of financial risk through its international business operations. Above
all, this includes the effects of changes in foreign exchange rates and interest rates. Majorel’s risk management
activities are designed to effectively mitigate these risks.
The Management Board establishes the basic risk management policy, outlining general procedures for hedging
currency and interest rate risk and the utilization of derivative financial instruments. The Majorel Group Treasury
advises subsidiaries on operating risk and hedges risks using derivative financial instruments as necessary.
Currency risk
Majorel is exposed to an exchange rate risk in various foreign currencies. Its subsidiaries are advised, but not
obliged, to hedge themselves against foreign currency risks in the local reporting currency by signing forward
agreements with banks that have a high credit rating. Loans within the Majorel Group that are subject to currency
risk are hedged using derivatives.
Interest rate risk
Majorel’s interest rate risk arises primarily from financing agreements with banks and Bertelsmann Business
Support S.à r.l., a subsidiary of Bertelsmann SE & Co. KGaA., and from cash and cash equivalents. As in the previous
year, a change of 100 basis points in interest rates would have no significant impact on the Group’s interest result.
Liquidity risk
Liquidity risks may arise through a lack of rollover financing (liquidity risk in a narrow sense), delayed receipt of
payment and unforeseen expenditure (budgeting risk). Budgeting risk is determined by comparing deviations in
actual spending with budget and reserve amounts. In a narrow sense, liquidity risk depends on the volume of debt
due within a given period.
Majorel Group’s policy in respect of its financing is to maintain sufficient liquidity at all times to finance group
assets, short-term cash requirements, and its development, in terms of both amount and duration, and at the
lowest possible cost. Liquidity risk is monitored on an ongoing basis with reference to the budget for current and
future years. New and unplanned transactions (e.g. acquisitions) are continuously tracked.
The maturity profile of financial assets and liabilities is also reconciled on a regular basis. Budget risks are managed
through effective cash management and constant monitoring of projected versus actual cash flows. Debt
maturities are also diversified to ensure that rising financing costs do not have a short-term impact.
Credit facilities with banks are maintained for unplanned expenditures. Currently, the Group is implementing a
centralized cash management policy when in conformity with local legislation applying to its subsidiaries.
All medium- and long-term financing operations are authorized and overseen by the Group’s financial
management. The Group obtains its financing in the form of loans from shareholders and banks as well as bank-
syndicated credit facilities. Given the maturities of its borrowings and the Group’s capacity to generate free cash
flow, liquidity risk is considered to be low.
Financial derivatives
Majorel uses standard market financial derivatives, usually unlisted (OTC) instruments. These include, in particular,
forward agreements. Transactions are entered into solely with Bertelsmann Group Treasury or banks with a high
credit rating. In general, the transactions with banks are only performed with banks approved by Majorel
Corporate Treasury.
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49
Capital management
The financing guidelines adopted by the Majorel Group are designed to ensure a balance between financing
security, return on equity, and growth. Financial management at Majorel is conducted with a target to ensure the
Group’s independence and capacity to maintain a strong capital base so as to maintain investor, creditor and
market confidence and to sustain future development of the business. This objective is part of the overall planning
process and regular monitoring.
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50
2.13 RECOGNITION AND AWARDS 2021
It is always pleasing to gain the recognition and endorsement of our expert industry peers and clients, and Majorel
was proud to receive multiple citations and awards in 2021.
RECOGNITION AND AWARDS 2021
Global Leader in Content Services, Trust & Safety
In April, we were named by research firm Everest Group as a Leader in its report “Trust and
Safety
– Content Moderation Services, PEAK Matrix® Assessment 2021.” Everest rated
Majorel particularly highly for its vision and capabilities, highlighting our strong focus and
significant growth in the Content Services, Trust & Safety segment; our expansion to new
region
s of EMEA, South East Asia and LATAM, further increasing language and cultural
diversity; our investment in new technologies to empower our team members; and our
proactive global program to promote wellness and resiliency. Our clients mentioned
Majorel’s s
killed talent pool and domain expertise as major strengths.
Global CX Leader in the BFSI sector
In June, Majorel was identified as a Leader in NelsonHall’s
NEAT vendor evaluation of CX
Services in the global BFSI (Banking, Financial Services and Insurance) sector. It recognized
how Majorel augments traditional human
-focused sales skills in this area with specially
developed digital platforms incorporating so
phisticated analytics. Majorel Digital Banking
also offers multiple solutions for digitizing and optimizing BFSI processes, including Majorel
Navigator™, our proprietary tool for next generation insurance sales.
Star Performer in Global CXM
In July, Majorel was recognized as a “Star Performer” by Everest Group, in its Customer
Experience Management (CXM) Services PEAK Matrix® Assessment 2021, an annual global
review of CX vendors. It only confers the Star Performer title on provide
rs that demonstrate
the most significant positive improvement year
-on-year on the PEAK Matrix®, in Vision and
Capability and Market Impact. In the 2021 report, Majorel is one of only four providers to be
accorded this status, from a total of 40 companies.
In particular, clients acknowledged that
agility and flexibility, cost efficiency, process improvements, relationship management, low
agent turnover, team stability and robust technology support were the key benefits of
partnering with Majorel.
CXM Leader in EMEA – for the second year running
In September, Majorel was named by Everest Group as a Leader in its report “Customer
Experience Management (CXM) in EMEA
–
Services PEAK Matrix® Assessment 2021”, for the
second consecutive year. As part of its assessment, Everest highlighted Majorel’s sig
nificant
growth, strong delivery footprint and the expansion of our digital and consulting capabilities
as key strengths. In addition, clients praised our flexibility, agility, cost
-efficiency, low
attrition, partnership approach, team stability, reliabili
ty, and operational transparency.
Our many awards during the year included:
• Best Customer Experience Platinum Award;
• Technological Innovation Bronze Laureate at the CX Awards;
• Top Mittelstands Employer;
• Best European Contact Center at the European Technology Awards;
• Best Strategic Model for Work at Home;
• Analdex-ProColombia National Export Award; and
• Best Commercial Provider, Best Helpdesk, and Most Recommended Provider at the Excellence in Customer
Relationship Awards.
STAR
PERFORMER
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51
Corporate
Governance
Annual Report 2021
52
3. Corporate Governance
Majorel Group Luxembourg S.A. (referred to here as “Majorel” or the “Company”) and with its subsidiaries
“Majorel Group”) became a publicly listed company on the Euronext Amsterdam stock exchange on September 24,
2021. As a public company, Majorel recognizes the importance of appropriate corporate governance procedures in
the management and oversight of its business. Majorel implemented a new governance structure prior to the
listing.
The corporate governance framework of Majorel, including the formation and operation of the boards and
committees, is outlined below.
3.1 CORPORATE GOVERNANCE POLICY AND PRACTICES
Detailed information on Majorel’s corporate governance framework can be found in the Investor Relations section
of Majorel’s website (www.majorel.com
). It contains Majorel’s corporate governance charter, as well as regularly
updated information including the latest version of Majorel’s governance documents (such as its articles of
association (the “Articles of Association”)), and information on the composition of Majorel’s Management Board
and Supervisory Board. The Investor Relations section of the
www.majorel.com website also contains the financial
calendar and other information that may be of interest to shareholders.
The Ten Principles of Corporate Governance of the Luxembourg Stock Exchange
Majorel is a Luxembourg public limited company (société anonyme) whose shares are listed and admitted to
trading on the regulated market operated by Euronext Amsterdam N.V. As such, the Company is not required to
comply with the “Ten Principles of Corporate Governance” adopted by the Luxembourg Stock Exchange
(www.bourse.lu/corporate-governance), as last revised in 2017 (the “X Principles”). However, Majorel has chosen
to apply the X Principles on a voluntary basis, subject to a certain interpretation given the Company’s two-tier
governance structure of a Management Board and a Supervisory Board.
The X Principles include three series of rules, namely:
• the actual mandatory principles (the “Principles”);
• the “comply or explain” recommendations (i.e. recommendations that are mandatory, save in exceptional
justified circumstances) (the “Recommendations”); and
• the guidelines, which are indicative but not binding (the “Guidelines”).
Majorel confirms that the Company follows all the X Principles and follows the Recommendations, except in certain
cases as set out below.
The Recommendations describe the proper application of the Principles. Companies are asked to comply with the
Recommendations or to explain why they are departing from them. In such cases, companies must determine
which rules are most suited to their specific situation and explain their thinking in the statement on corporate
governance in their Annual Report. This flexible approach is based on the “comply or explain” principle. Majorel
acknowledges the importance of good corporate governance and agrees with both the general approach and the
majority of the Recommendations included in the X Principles. But it also believes, in considering the interests of
both the Majorel Group and its stakeholders, that some of the Recommendations are not adapted to the
Company’s specific situation and that there is a case to deviate from them. Therefore, Majorel does not fully
comply with the following:
Recommendation 5.4
Majorel does not fully comply with this Recommendation, which provides that in the event of a declared conflict of
interest, the operation or transaction concerned shall, once the Chairman of the Supervisory Board has been
informed, be submitted by the conflicted member of the Management Board or Supervisory Board to the Audit
Annual Report 2021
53
Committee or to the statutory auditor of Majorel, if possible prior to the execution of that operation or transaction.
The Audit Committee or the statutory auditor shall then communicate an opinion to the Supervisory Board.
Majorel deviates from this Recommendation as it has always been committed to maintaining a proper compliance
structure to strengthen the effectiveness and proper functioning of its compliance organization, and has
established proper procedures for potential conflicts of interests and intercompany transactions (“arm’s length”).
Majorel therefore considers the requirement to request a prior opinion to be communicated by the Audit
Committee or the statutory auditor to be dispensable, given the conflict of interest procedures that are already in
place.
Recommendation 5.6
Majorel does not fully comply with this Recommendation, which provides that members of the Management Board
and the Supervisory Board are required to keep the information received in their capacity as members of these
boards confidential, and may not use it for any other purpose than for fulfilling their remit. Majorel partly deviates
from this Recommendation as regards the members of the Supervisory Board, who may exceptionally disclose
confidential information to the shareholder who has proposed his/her appointment to the General Meeting of
shareholders, on a strict need-to-know basis. Such disclosure shall only be allowed:
• to the extent that such confidential information is required as per the internal regulations of the shareholder in
question;
• in order to allow the member of the Supervisory Board to exercise his/her mandate in Majorel to best effect;
and
• provided always that the shareholder who receives such confidential information assures, in turn, appropriate
confidentiality in accordance with applicable privacy laws.
Recommendation 8.3
Majorel does not fully comply with this Recommendation, which provides in its first paragraph that the Audit
Committee shall consist exclusively of non-executive directors (i.e. Supervisory Board members in Majorel’s case),
of whom at least half shall be independent. Majorel deviates from this Recommendation as it considers that the
appointment of one independent Supervisory Board member (out of a total of five members of the Audit
Committee), and who, moreover, holds the position of Chairman of the Audit Committee, takes adequate account
of best-practice governance standards and is sufficient to ensure open discussion and a decision-making process
free of influence.
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54
3.2 MANAGEMENT
3.2.1 Biographies
3.2.1.1 The Supervisory Board
Moulay Mhamed Elalamy (32)
Chairman of the Supervisory Board, graduated from the University of British
Columbia, Vancouver, with a
bachelor’s degree in commerce in 2012. Moulay started
his career as an intern consultant for the Boston Consulting Group in Paris. He then
worked as a private equity analyst with the Abraaj Group in Dubai and Istanbul, before
joining Saham Assistance as Ge
neral Manager in Casablanca, Morocco, in 2014. In
2015, he became Chairman of Saham Assistance (until 2017), transforming it from a
national player into a large multinational enterprise by expanding its presence to 17
African countries, where it delivered
medical and roadside assistance. At the same
time, Moulay joined Saham SA (until 2016) as General Secretary, and Saham Agri (an
agriculture venture) as Chief Executive Officer. Between 2017 and 2019, he served as
Chief Executive Officer of Saham Assurance,
a Moroccan publicly traded insurance
company. He conducted the digital transformation of the company by creating a
digital factory, which delivered end
-to-end customer journey transformation for the
800,000 auto policy holders, from lead generation to cla
ims management. In 2018,
Moulay led the sale of Saham Finances, the insurance division of Saham SA, for a
$2
billion valuation. He is currently the Chief Executive Officer of the Saham
Management Company (formerly Saham SA), where he was responsible for th
e
creation of the Saham partnership with Bertelsmann Group.
Moulay Mhamed Elalamy is a member of the Nomination
and Compensation
Committee.
Pim Berendsen (48)
Graduated from the University of Tilburg, the Netherlands, with a master’s degree in
economics in 1998. In 1997, he joined Arthur Andersen, where he worked as an
international tax advisor until 2000. Pim joined PostNL N.V. and its legal predecessors
in 200
0 where he held various positions in the Netherlands, the United Kingdom,
China, the Czech Republic and Italy, including Financial Director and, successively,
Managing Director of Data and Document Management and member of the executive
committee of PostNL
N.V. Between 2013 and 2015, he was Director for Corporate
Development at Van Gansewinkel Group before returning to PostNL N.V. to become a
member of the executive committee, responsible for international, growth, M&A and
strategic projects. In 2018, he
was appointed Chief Financial Officer and a member of
the board of management.
Pim Berendsen is Chair of the Audit Committee.
Jörn Caumanns (48)
J
oined Bertelsmann in 2001 and, since then, has helped to shape its group portfolio.
Over the last decade Jörn has held the position of group head of M&A, in which he has
helped create leading players such as Penguin Random House and Majorel. Currently,
Jörn’s main responsibility is CFO of Bertelsmann Investments, which comprises more
than 300 portfolio companie
s across China, India, Brazil, the US and Europe. He also
has direct responsibility for various businesses at Bertelsmann. Prior to Bertelsmann,
Jörn worked at J.P. Morgan in London and Frankfurt. Jörn holds a degree in business
administration (Diplom
-Kauf
mann) from the University of Cologne and is a graduate of
the HBS Advanced Management Program.
Jörn Caumanns is a member of the Nomination
and Compensation Committee and
the Audit Committee.
Annual Report 2021
55
Rolf Hellermann (45)
Studied business administration in Vallendar, Germany, Los Angeles, USA and Nancy,
France. He received his doctorate from WHU
– Otto Beisheim School of Management
in Vallendar. Following his studies, Rolf joined Bertelsmann SE & Co. KGaA at the
Bertelsmann
Corporate Center in 2004. In 2012, he became head of Bertelsmann’s
Corporate Controlling and Strategy department. From 2015 to 2018, he was Chief
Financial Officer (CFO) of Arvato, the services division of Bertelsmann, and served as
CEO of Arvato Financial Solutions from 2
018 to 2020. He has been a member of
Bertelsmann’s Group Management Committee since 2019 and also heads the
Bertelsmann Tech and Data Advisory Board. On January 1, 2021, Rolf became CFO and
a member of the executive board at Bertelsmann Management SE. On t
he same date
he joined the
board of RTL Group S.A.
Rolf Hellermann is a member of the Nomination
and Compensation Committee and
the Audit Committee.
Laureen Kouassi
-Olsson (39)
Holds a Master in Science of Management (MSc) with a specialization in Corpo
rate
Finance and Capital Markets from the EM Lyon Business School and is an alumna of
Harvard Business School. Laureen is the founder and Executive Chair of Birimian
Holding, an operational investment company dedicated to luxury and premium
African heritag
e brands. She is a seasoned executive in the African financial services
and private equity industries. She has over a decade of experience in investing in
private companies and financial institutions on the African continent with positions at
Lehman Brothe
rs in London, Proparco, subsidiary of the French Development Agency
and Amethis, leading French private equity fund dedicated to the African private
sector and supported by the Edmond de Rothschild Group. Her professional
achievements and commitments have gained significant recognition within the African
financial services and private equity industries. Laureen has been recognized as one of
the 100 most influential African women and has been cited in several Top 100 African
young leader rankings.
Laureen Ko
uassi-Olsson is Chair of the Nomination and Compensation Committee.
Ghita Lahlou El Yacoubi (55)
Graduated from l’École
Centrale de Paris, France, with a degree in engineering. Ghita
started her career in 1991 as a finance and organizational consultant at Arthur
Andersen, France. She joined Altair in Morocco as Financial Director in 1993 before
moving to Groupe ONA in 1994
, where she started as a project manager. In 1996, she
became Director of Human Resources and Communications at Groupe ONA and, in
1999, she became Director of Purchasing, Human Resources and Marketing for
Marjane, a group company of Group ONA. She joined
Saham in 2001 as Managing
Director of various subsidiaries, including Phone Group, Distribution Division, Saham
Assurance Maroc, Saham Santé, Saham Education, Saham SA and the Saham
Foundation for Equal Opportunity. Since 2014, Ghita has been Director of S
aham
Group, Africa, heading up the outsourced services and education divisions. She is also
the Chief Executive Officer of GLENY, a financial and real estate investment company,
and École Centrale Casablanca, Morocco. Additionally, she has been a member of
the
General Confederation of Enterprises of Morocco (CGEM) since 2012. She is also the
President and co
-founder of the “Les Citoyens” movement; administrator of the
Orient Occident Foundation; and administrator and member of the office of the Ali
Zaoua As
sociation for the Development of “Les Étoiles” Cultural Centers.
Ghita Lahlou El Yacoubi is a member of the Audit Committee.
Annual Report 2021
56
Matthias Moeller (51)
Studied computer science and business administration before joining
Bertelsmann/Arvato in 1995, where he h
as held various roles. He has been a part of
the senior management team for IT Services since 2003. From 2012 to the end of
2016, Matthias was CEO of Arvato Systems Perdata GmbH and, therefore, responsible
for IT solutions and services for the utilities industry. As CEO of Arvato Systems, he has
been responsible for the overall business of the Arvato Systems Group since April 1,
2016. On January 1, 2019, he additionally took on the role of CIO of Bertelsmann.
Nina Weiden (
47)
Holds a master’s degree in business administration from WHU
-Otto Beisheim School
of Management, Vallendar, Germany; an MBA from INSEAD, Fontainebleau, France;
and a doctoral degree from the University of St Gallen, Switzerland. Nina has 20 years
of experie
nce in M&A and spent 12 years in London as a telecom and media sector
banker working for Morgan Stanley, UBS and Credit Suisse/DLJ. She advised large
multinationals, family
-owned companies, sponsors and founders on M&A, IPOs and
debt financings across Euro
pe, the Middle East and Africa (EMEA). Nina joined
Bertelsmann in 2013 as Senior Vice President M&A, focusing on buy
- and sell-side
transactions for the Group across all geographies.
Bettina Wulf (59)
Graduated from the University of Bielefeld, Germany,
with a degree in law in 1988.
After being admitted to the bar, she worked as an associate/freelancer at a law firm
before joining the legal department of Siemens Nixdorf Informationssysteme AG from
1989 to 1993. Bettina has been a member of the corporate
legal department of
Bertelsmann SE & Co. KGaA since July 1993, with particular experience in global M&A
transactions. In 2014, she was honored by the International Law Office with the
“European Counsel Award” for her prominent role in highly complex M&A
tr
ansactions requiring level-headed negotiation skills.
Bettina Wulf is a member of the Nomination Compensation Committee and the Audit
Committee.
Annual Report 2021
57
3.2.1.2 The Management Board
Thomas Mackenbrock (46)
Chief Executive Officer (CEO). Thomas has served as Majorel’s CEO since the
C
ompany
was founded in January 2019.
Thomas studied business administration and economics in Ingolstadt, Chicago and
Leipzig, and obtained his doctorate (Ph.D.) at the Martin Luthe
r University of Halle-
Wittenberg. In 2000, he started his professional career with McKinsey & Company
where he supported clients across various industry sectors with a particular focus on
the high
-tech and telecom space. In 2006, he joined Bertelsmann as a Senior Director
for Business Development and in 2008 was promoted to Vice President. In this role,
he worked on numerous strategy and corporate development projects across
Bertelsmann’s business portfolio in Europe, China and the Americas. In 2012, he
bec
ame Managing Director of Bertelsmann Brazil, leading Bertelsmann’s business
development and investments there for the following four years. In 2016, Thomas
returned to Europe and worked as Executive Vice President for BMG. In 2017, he was
appointed Chief S
trategy Officer (CSO) at Arvato Group before becoming Chief
Executive Officer (CEO) of Arvato CRM Solutions. In 2019, he was appointed Chief
Executive Officer of Majorel Group Luxembourg S.A.
Otmane Serraj (48)
Chief Financial & Shared Services Officer (CFSO). Otmane has served as Majorel’s
CFSO since the company was founded in January 2019. He is also Chief Information
Officer (CIO).
Otmane studied mechanical engineering with a focus on mechanics, fluid mechanic
s
and oceanography at the
É
cole Polytechnique in Paris, France and MIT in Boston, USA.
He also studied telecommunications at the École Nationale
Supérieure des
Telecommunications in Paris, France. Otmane started his career in 1996 as Security
Product Manager at France Telecom before joining Siris as IP Networks Design
Manager in 1997. After several positions in the technical and IT departments at Oreka,
Firstream and Alphyra, he became the head of the Dell offshore business center in
Morocco in 2007, serving all French, Spanish and Italian
-speaking customers in EMEA
and Canada. From 2012 to 2014, Otmane served as the General Manager at Bull in
Magh
reb, supervising its subsidiaries in Morocco, Algeria, Tunisia and Libya. He then
joined Majorel’s predecessor businesses in 2015, where he served as Managing
Director of different Group companies until the end of 2019, and as a board member
until the end
of 2020. From January to August 2019, he was Managing Director of
Majorel Group Luxembourg S.à r.l. before being appointed Chief Financial and Shared
Services Officer of Majorel Group Luxembourg S.A.
Annual Report 2021
58
3.2.2 Boards and committees
Majorel’s governing bodies are the Management Board (the “Management Board”), the Supervisory Board (the
“Supervisory Board”) and its committees, as well as the General Meeting of shareholders of the Company (the
“General Meeting”). Majorel is managed by its Management Board under the supervision and control of the
Supervisory Board. The powers of these governing bodies are determined by the law of August 10, 1915 on
commercial companies (the “1915 Law”). Majorel’s Articles of Association and the internal rules of procedure of
both the Management Board and the Supervisory Board are summarized in Majorel’s Corporate Governance
Charter, publicly available on www.majorel.com
.
Management Board
The Management Board is responsible for managing Majorel, and the members of the Management Board
represent the Company in dealing with third parties. All decisions of the Management Board require the prior
approval of the Supervisory Board; however, the Supervisory Board has decided to authorize all management
actions by the Management Board without approval to the extent that such actions do not constitute a matter
listed as a “Supervisory Board Consent Matter” in the rules of procedure of the Supervisory Board
32
. Within this
limit, the Management Board is vested with the broadest powers to act in the name of Majorel and to take any
actions necessary or useful to fulfill Majorel’s corporate purpose. All powers not expressly attributed to the
Supervisory Board or to the General Meeting (by the 1915 Law, by the Articles of Association or the internal rules
of procedure of the Supervisory Board) shall be within the competence of the Management Board.
As of December 31, 2021, the Management Board of Majorel was composed of two members, with Thomas
Mackenbrock being the Chairman and Chief Executive Officer (the “CEO”) and Otmane Serraj being the Chief
Financial and Shared Services Officer (the “CFSO”).
The Management Board meets as often as the business and interests of the Company so require.
The biographies of the Management Board members are included on page 57 of this Annual Report.
The members of the Management Board are appointed by the Supervisory Board, following proposal by the
Nomination and Compensation Committee (the “NCC”). The Supervisory Board also determines the remuneration
of the Management Board members and the terms of their office. Pursuant to Majorel’s Articles of Association, the
members of the Management Board are elected for a term of up to six years. The members of the Management
Board are eligible for reappointment. A member of the Management Board may be removed, with or without
cause, by a resolution adopted by the Supervisory Board. A member of the Management Board cannot be a
member of the Supervisory Board at the same time.
The mandates of the current members of the Management Board will expire at the Annual General Meeting, to be
held in the year 2025, which will vote on the financial statements for the financial year ending December 31, 2024.
Activities of the Management Board in 2021
The Management Board met 17 times in 2021 by conference call and adopted some decisions by circular
resolution. The attendance rate was 100%.
Supervisory Board
The Supervisory Board is responsible for carrying out the permanent supervision and control of the Management
Board, without being authorized to interfere with such management. For this purpose, the Supervisory Board has
an unlimited right of information regarding all Majorel’s operations and may inspect any of its documents. It may
request the Management Board to provide any information necessary for exercising its functions and may directly
or indirectly proceed to all verifications it deems useful in order to carry out its duties. The Supervisory Board has
the right to examine all the activities of the Majorel Group. Its members have access to Majorel Group’s
employees, the Company’s books, accounts, correspondence, minutes and, in general, to any of the Company’s
documents. At the request of the Supervisory Board, the Management Board shall provide any information that is
32
The Supervisory Board Consent Matters are publicly available on Majorel’s website (www.majorel.com).
Annual Report 2021
59
necessary to enable the Supervisory Board to supervise the management of Majorel. In addition, the Supervisory
Board can proceed to, or require, any verifications in relation to the management function. The Supervisory Board
shall grant or deny the Management Board its consent to carry out the Supervisory Board Consent Matters.
In accordance with the Articles of Association, the General Meeting has appointed nine members of different
classes, namely Class A members (the “Class A Members”) and Class B members (the “Class B Members”):
• five Class A Members from a list of candidates proposed by Bertelsmann Luxembourg S.à r.l. (the
“Bertelsmann Shareholder”);
• two Class B Members from a list of candidates proposed jointly by Saham Customer Relationship Investments
S.à r.l. and Saham Outsourcing Luxembourg S.à r.l. (together, the “Saham Shareholders”); and
• two Class A Members from a list of candidates proposed by the NCC, who are independent members.
The Supervisory Board has elected Moulay Mhamed Elalamy as Chairman among the Class B Members, in
accordance with the Articles of Association. The CEO and the CFSO are non-voting permanent observers of the
Supervisory Board.
The Supervisory Board meets at least four times every financial year.
As of 31 December 2021, the Supervisory Board members were as follows:
Name Class
Member
since
Appointed until
Moulay Mhamed Elalamy B 2019 AGM 2025
Pim Berendsen A 2021* AGM 2025
Jörn Caumanns A 2019 AGM 2025
Rolf Hellermann A 2021* AGM 2025
Laureen Kouassi-Olsson A 2021* AGM 2025
Ghita Lahlou El Yacoubi B 2019 AGM 2025
Matthias Moeller A 2021* AGM 2025
Nina Weiden A 2021* AGM 2025
Bettina Wulf A 2020 AGM 2025
*
The Extraordinary General Meeting held on September 17, 2021 appointed the Supervisory Members indicated above as being members since 2021, and
acknowledged the resignations of Mr. Moulay Hafid Elalamy, Mr. Thomas Götz and Mr. Thomas Rabe as Supervisory Board members with effect from the
date of the Extraordinary General Meeting.
The biographies of the Supervisory Board members are included on pages 54 to 56 of this Annual Report.
The members of the Supervisory Board are appointed for a term of office which may not exceed six years and may
be reappointed for successive terms. The mandates of the current members of the Supervisory Board will expire at
the Annual General Meeting to be held in the year 2025, which will vote on the financial statements for the
financial year ending on December 31, 2024.
In the event that one or more vacancies arise on the Supervisory Board following a member’s death or resignation,
or for any other reason, the remaining members of the Supervisory Board may, subject to compliance with any
applicable nomination right, elect one or more members to the Supervisory Board to fill any such vacancy until the
next General Meeting, in accordance with the provisions of the Articles of Association relating to the composition
of the Supervisory Board.
The appointment or renewal of the appointment of a member of the Supervisory Board is based on the
recommendations of the NCC. The Supervisory Board shall not propose any new candidates to be appointed as
Annual Report 2021
60
members of the Supervisory Board who have not been proposed by the NCC, and shall with respect to the
appointment comply with the charter of the NCC, the rules of procedure of the Supervisory Board, and the Articles
of Association.
Elections to the Supervisory Board are made on an individual basis. Proposed candidates are announced in advance
to the General Meeting. In its election recommendations to this General Meeting, the Supervisory Board shall
disclose the personal and business relations of each individual candidate with the Majorel Group, with the
executive bodies of the Majorel Group, and with any shareholder holding a material interest in Majorel. Such
disclosure shall be limited to those circumstances which, in the appraisal of the Supervisory Board, a shareholder of
Majorel would judge objectively to be authoritative for his/her/its election decision. For the purposes of this
disclosure, shareholders holding a material interest are shareholders who directly or indirectly hold more than 10%
of the voting rights of Majorel.
In accordance with its internal rules of procedure, the Supervisory Board, acting upon the recommendations of the
NCC, will nominate from a list of candidates proposed by the NCC two members who, in the opinion of the
Supervisory Board, are independent from all material relationship with Majorel that could interfere with exercising
their independent judgement or their ability to represent the interests of Majorel. Their objective shall be to bring
an outside perspective on strategy and control, and offer an independent view and advice solely in the corporate
interest of Majorel, whenever there may be disagreements or conflicts of interest within the Supervisory Board or
disagreements with management, with a view to ensure that there are always sufficient independent members
serving on the Supervisory Board. The current independent members of this board are Laureen Kouassi-Olsson and
Pim Berendsen.
Activities of the Supervisory Board in 2021
The Supervisory Board met six times by conference call in 2021, with an attendance rate of 100%. The Supervisory
Board approved at its meeting of September 17, 2021 new governance documents implementing the Company’s
revised governance structure, including the internal rules and governance of Majorel and Majorel’s corporate
governance charter (as published on Majorel’s website (www.majorel.com)).
Committees of the Supervisory Board
The Audit Committee
The Supervisory Board established an Audit Committee (the “Audit Committee”) on September 17, 2021, which
oversees:
• the accounting and financial reporting processes of Majorel;
• the integrity of the financial statements and publicly reported results;
• the adequacy and effectiveness of the risk management and internal control frameworks; and
• the choice, effectiveness, performance and independence of the internal and external auditors.
In this respect, the Audit Committee performs its duties in compliance with applicable laws and regulations. In
particular, Regulation (EU) No. 537/2014 of the European Parliament and the Council of April 16, 2014 on specific
requirements regarding the statutory audit of public-interest entities, as amended; Article 52 paragraph 6 of the
Luxembourg law dated July 23, 2016 concerning the audit profession, as amended; and the Articles of Association.
The role, authority and functioning of the Audit Committee are defined in the Audit Committee’s charter, which is
included in the internal rules and governance of Majorel.
The Audit Committee is composed of five members of the Supervisory Board, at least one of them being an
independent member, one being a member who has been proposed for nomination by the Saham Shareholders
and three being members who have been proposed for nomination by the Bertelsmann Shareholder.
The current members of the Audit Committee are Pim Berendsen (Chair), Rolf Hellermann, Jörn Caumanns, Bettina
Wulf and Ghita Lahlou.
The Audit Committee meets at least four times every financial year.
Annual Report 2021
61
The Audit Committee’s meetings may be attended by the CEO, the CFSO, the Head of Governance, Compliance and
Control, the independent auditor(s) and other senior Majorel Group finance representatives. The Audit Committee
may also invite others whose collaboration is deemed helpful in fulfilling its tasks.
Activities of the Audit Committee in 2021
Following its creation on September 17, 2021, the Audit Committee met once by conference call with 100%
attendance. At this occasion, the Audit Committee notably reviewed Majorel’s governance, compliance and
internal control framework and considered the independent audit plan for the year ended December 31, 2021. Its
Chairman reported to the subsequent Supervisory Board meeting on the discussions held and conclusions taken by
the Audit Committee.
Nomination and Compensation Committee.
The Supervisory Board established the Nomination and Compensation Committee (the “NCC”) on September 17,
2021. The missions of the NCC are to:
• assist the Supervisory Board in supervising the Management Board with respect to the Majorel Group’s
compensation programs and compensation of the senior management and other personnel of the Majorel
Group (including any long-term incentive and management incentive plan);
• advise the Supervisory Board on the remuneration of the individual members of the Management Board and
the Supervisory Board within the scope of the remuneration policy to be submitted to the General Meeting to
be held in respect of the financial year ended December 31, 2021;
• monitor the application of the Majorel Group’s remuneration policy; and
• assist the Supervisory Board with the selection and appointment procedures for members of the Supervisory
Board, the Management Board and other senior management. The NCC shall also be responsible for the
preparation of the annual remuneration report of the Supervisory Board, included in section 4 of this Annual
Report.
The role, authority and functioning of the NCC are defined in its charter, which is included in the internal rules and
governance of Majorel.
The NCC is composed of five members of the Supervisory Board, at least one of them being an independent
member, one being a member who has been proposed for nomination by the Saham Shareholders and three being
members who have been proposed for nomination by the Bertelsmann Shareholder.
The current members of the NCC are Laureen Kouassi-Olsson (Chair), Rolf Hellermann, Jörn Caumanns, Bettina
Wulf and Moulay Mhamed Elalamy.
The NCC meets at least twice every financial year.
Activities of the NCC in 2021
Since its creation on September 17, 2021, the NCC has met once by conference call with 100% attendance. On this
occasion, the NCC notably considered matters related to the long-term incentivization and compensation system
for senior managers, the determination of special performance bonuses for 2021, and reviewed the senior
executive employees list. Its Chairwoman reported to the subsequent Supervisory Board meeting on the
discussions held and conclusions taken by the NCC.
Transactions in shares by management
EU Regulation No 596/2014 on Market Abuse (the “Market Abuse Regulation”) prevents anyone with material
non-public information about a company from dealing in its shares and from committing market manipulations. A
detailed Dealing Code contains restrictions on dealings by Board members and certain employees of the Majorel
Group, which are designed to ensure that insider information is treated appropriately within the Majorel Group
and to avoid insider dealing and market manipulation.
Annual Report 2021
62
Share transactions by members of the Management Board and Supervisory Board, as applicable, are reported in
the Investor Relations section of the www.majorel.com
website under the heading “Directors’ dealings.”
3.3 SHARES AND SHAREHOLDERS
Share capital
Issued share capital
The issued share capital of the Company is set at one million Euro (€1,000,000) represented by one hundred
million (100,000,000) registered shares (the “Shares”) with an accounting par value of one eurocent (€0.01) each.
All of the Shares are admitted to listing and trading on the regulated market operated by Euronext Amsterdam N.V.
All Shares entitle to the same rights:
• all carry full dividend rights from January 1, 2021;
• each Share carries one vote at General Meetings;
• the Shares are subordinated to all other securities and claims in case of an insolvency of Majorel; and
• none of the Shares is subject to any transferability restrictions.
Issue of Shares – Authorized share capital
The General Meeting (or the Management Board within the limits of the authorized share capital, subject to the
prior approval of the Supervisory Board) may from time to time issue Shares.
Pursuant to the Articles of Association, the Management Board is authorized, with the prior consent of the
Supervisory Board (being a Supervisory Board Consent Matter requiring the positive vote of one Class B Member),
for a period starting on the date of publication in the Luxembourg Recueil Électronique des Sociétés et Associations
of the minutes of the extraordinary General Meeting held on September 6, 2021 and ending on the fifth
anniversary of the date of such publication, without prejudice to any renewals, to issue shares within the limits of
the authorized capital of Majorel, it being understood, that any issuance of such instruments will reduce the
available authorized capital accordingly.
As of December 31, 2021, pursuant to the Articles of Association, Majorel’s authorized capital, excluding the issued
share capital, is set at €2,000,000, represented by 200,000,000 shares having an accounting par value of €0.01
each (the “Authorized Capital”).
Pursuant to the Articles of Association, the Authorized Capital may be increased or reduced by a resolution of an
extraordinary General Meeting adopted in the manner required for an amendment of the Articles of Association.
The authorization given by the extraordinary General Meeting to the Management Board may be renewed through
a resolution of the extraordinary General Meeting adopted in the manner required for an amendment of the
Articles of Association and subject to the provisions of the 1915 Law, each time for a period not exceeding five
years.
The Management Board is authorized, subject to receiving the prior written approval of the Supervisory Board, to
determine the conditions of any share capital increase including through contributions in cash or in kind, by the
incorporation of reserves, issue premiums or retained earnings, with or without the issue of new shares, or
following the issue and the exercise of subordinated or non-subordinated bonds, convertible into or repayable by
or exchangeable for shares (whether provided in the terms at issue or subsequently provided), or following the
issue of bonds with warrants or other rights to subscribe for shares attached, or through the issue of stand-alone
warrants or any other instrument carrying an entitlement to, or the right to subscribe for, shares in Majorel.
The Management Board is authorized, subject to receiving the prior written approval of the Supervisory Board, to
set the subscription price, with or without issue premium, the date from which the shares or other financial
instruments will carry beneficial rights and, if applicable, the duration, amortization, other rights (including early
repayment), interest rates, conversion rates and exchange rates of the aforesaid financial instruments as well as all
the other conditions and terms of such financial instruments including as to their subscription, issue and payment,
for which the Management Board may make use of Article 420-23 paragraph 3 of the 1915 Law.
Annual Report 2021
63
The Management Board is authorized, subject to receiving the prior written approval of the Supervisory Board, to
limit or exclude the preferential subscription rights of existing shareholders set out in the 1915 Law.
Treasury shares
The Company purchased no treasury shares during the year ended December 31, 2021 and held no treasury shares
on that date.
Significant shareholders
At December 31, 2021, the significant shareholders of Majorel, within the meaning of the Luxembourg law of
January 11, 2008 on transparency requirements (the “Transparency Law”), were as follows:
• Holding 39.49% of the Majorel issued share capital, Bertelsmann Luxembourg S.à r.l., a private limited liability
company (société à responsabilité limitée) incorporated under the laws of Luxembourg, having its registered
office at 43, Boulevard Pierre Frieden, L-1543 Luxembourg, Luxembourg and registered with the Luxembourg
Register of Commerce and Companies (Registre de Commerce et des Sociétés, Luxembourg) under number
B 187218. The voting rights held by Bertelsmann Luxembourg S.à r.l. are indirectly controlled by Christoph
Mohn through Bertelsmann SE & Co.
KGaA and Bertelsmann Verwaltungsgesellschaft mbH. The shares in
Bertelsmann SE & Co. KGaA are held by foundations (Bertelsmann Stiftung, Reinhard Mohn Stiftung, BVG-
Stiftung) and the Mohn Family. All voting rights at the general meeting of Bertelsmann SE & Co. KGaA are
controlled by Bertelsmann Verwaltungsgesellschaft mbH. Only Christoph Mohn has indirect voting control of
Bertelsmann Verwaltungsgesellschaft mbH through a veto right.
• Holding together 39.49% of the Majorel issued share capital, the Saham Shareholders, i.e. Saham Customer
Relationship Investments S.à r.l
., a private limited liability company (société à responsabilité limitée)
incorporated under the laws of Luxembourg, having its registered office at 6, Rue Eugène Ruppert, L-2453
Luxembourg, Luxembourg and registered with the Luxembourg Register of Commerce and Companies (Registre
de Commerce et des Sociétés, Luxembourg) under number B 239278; and Saham Outsourcing Luxembourg
S.à r.l., a private limited liability company (société à responsabilité limitée) incorporated under the laws of
Luxembourg, having its registered office at 12 C, Rue Guillaume Kroll, L-1882 Luxembourg, Luxembourg and
registered with the Luxembourg Register of Commerce and Companies (Registre de Commerce et des Sociétés,
Luxembourg) under number B 229519. The voting rights held by the Saham Shareholders are attributed
indirectly to Moulay Hafid Elalamy.
As at the date of this Annual Report, Majorel has not been notified of any other significant shareholdings in excess
of 5% of the shares in issue.
As at December 31, 2021, senior executives of Majorel held 0.91% of the Majorel issued share capital.
General Meetings of shareholders
The Annual General Meeting is held within six months following the end of the financial year at the address of the
registered office of Majorel or at such other place in the Grand Duchy of Luxembourg as may be specified in the
convening notice of the Annual General Meeting. Majorel may decide, depending on the developments regarding
the COVID-19 pandemic, to hold the Annual General Meeting without any physical attendance as permitted by
Luxembourg law.
General Meetings will be held at the registered office or any other place in Luxembourg indicated in the convening
notice. General Meetings may be convened by the Management Board, by the Supervisory Board or, as the case
may be, by the independent auditor(s), and must be convened on the request of one or more shareholders who
together represent at least one tenth of Majorel’s capital. In such case, the General Meeting shall be held within a
period of one month from the receipt of such request.
Convening notices for every General Meeting will be published at least 30 days before the date of the General
Meeting in (i) the Luxembourg Official Gazette (Recueil Électronique des Sociétés et Associations) and in a
Luxembourg newspaper; and (ii) such media which may reasonably be expected to be relied upon for the effective
dissemination of information to the public throughout the European Economic Area, and which are accessible
rapidly and on a non-discriminatory basis (the “EEA Publication”).
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64
In the event that the presence quorum required by the 1915 Law or the Articles of Association to hold a General
Meeting is not met on the date of the first convened General Meeting of Shareholders, another General Meeting
may be convened by publishing the convening notice in the Luxembourg Official Gazette (Recueil Électronique des
Sociétés et Associations), a Luxembourg newspaper and the EEA Publication, at least 17 days prior to the date of
the reconvened meeting provided that (i) the first General Meeting was properly convened in accordance with the
above provisions; and (ii) no new item has been added to the agenda.
The convening notice will be communicated on the date of its publication to the registered shareholders, unless
they (or any one of them) have expressly and in writing agreed to receive communication by other means.
As Majorel’s shares are admitted to trading on the regulated market operated by Euronext Amsterdam N.V.,
Majorel is subject to the provisions of the Luxembourg law of May 24, 2011 on the exercise of certain rights of
shareholders at General Meetings of listed companies, as amended.
All shareholders are invited to attend and speak at all General Meetings, with each share in Majorel entitling to one
vote. Any shareholder may appoint another person, who need not be a shareholder, as its proxy at any General
Meeting.
Other than as required by law, resolutions will be adopted by the simple majority of votes validly cast, excluding
abstentions and nil votes. There is no quorum requirement for a meeting convened to consider the business
ordinarily to be considered by a shareholders’ meeting, which includes the examination of the reports by
management and the auditor, and if thought fit, the approval of the annual accounts, as well as the determination
of the allocation of profit and the decision to grant discharge of liability to the Management Board, the Supervisory
Board and the independent auditor. Any matter which does not fall within the scope of an ordinary General
Meeting, such as any resolution amending the Articles, will be adopted at an extraordinary General Meeting, which
shall require that no less than 50% of the issued share capital is represented, failing which the meeting must be
reconvened. Resolutions proposed at such an extraordinary General Meeting shall be passed by a vote in favor of
at least two-thirds of the votes validly cast, excluding abstentions and nil votes.
Subject to the provisions of the 1915 Law, the Management Board may, during the course of any General Meeting,
adjourn such General Meeting for four weeks. The Management Board shall do so at the request of one or several
shareholder(s) representing at least 10% of the share capital of Majorel. In the event of an adjournment, any
resolution already adopted by the General Meeting shall be cancelled.
3.4 LUXEMBOURG LAW ON TAKEOVER BIDS DISCLOSURES
The following disclosures are made in accordance with article 11 of the Luxembourg Law on Takeover Bids of 19
May 2006.
Share capital structure
The Company has issued a single category of shares. At December 31, 2021, Majorel had one hundred million
(100,000,000) registered shares with an accounting par value of one eurocent (€0.01) each in issue, all of which are
admitted to listing and trading on the regulated market operated by Euronext Amsterdam N.V.
Transfer restrictions
There are no restrictions per se on the free transferability of Majorel’s shares.
Without prejudice to the foregoing, certain lock-up arrangements, which condition the transferability of their
shares to a certain extent, have been made between the significant shareholders mentioned in point 3.3 on page
63 of this report (the “Major Shareholders”) and their respective shareholders (please see “Shareholders’
agreement with transfer restrictions” below for further details); between Majorel and certain of its senior
executive officers; but also between the Major Shareholders and BNP Paribas, Citigroup Global Markets Limited
and J.P. Morgan AG, who acted as joint global coordinators in the context of the admission to listing and trading of
the Company's shares on the regulated market operated by Euronext Amsterdam N.V., as further described in the
listing prospectus available on Majorel’s website at www.majorel.com
.
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65
Major shareholders
The details of significant shareholders within the meaning of the Transparency Law are given in point 3.3 on page
63 of this Annual Report.
Special control rights
All shares in Majorel have the same rights (as further described in point 3.3 on page 62 of this report). No securities
benefit from special control rights.
Control system in an employee share scheme
Article 11 (e) of the Luxembourg Law on Takeover Bids of May 19, 2006 does not apply, as Majorel has not put in
place an employee share scheme where the control rights are not exercised directly by the employees.
Voting rights
Each share in Majorel entitles to one vote at General Meetings. The Management Board may suspend the voting
rights of any shareholder in breach of his/her/its obligations as described in the Articles of Association, its
subscription agreement, deed of covenant or any relevant contractual arrangement entered into by such a
shareholder.
To vote at General Meetings, shareholders entitled to vote must duly evidence their shareholdings as of the record
date, determined in accordance with the Luxembourg Law of May 24, May 2011 on the exercise of certain rights of
shareholders at General Meetings of listed companies, as amended, which is midnight on the day falling 14 days
prior to the date of the General Meeting.
The voting rights of shares held in treasury are suspended and they are not taken into account in the determination
of the quorum and majority for General Meetings. The Management Board is authorized to suspend the dividend
rights attached to shares held in treasury. No shares are currently held in treasury and no suspension has yet
occurred.
Shareholders’ agreement with transfer restrictions
Bertelsmann Luxembourg S.à r.l., Saham Customer Relationship Investments S.à r.l. and Saham Outsourcing
Luxembourg S.à r.l. (the “Major Shareholders”) and their respective parent companies (together the “Parties”)
have entered into a Luxembourg law-governed shareholders’ agreement (the “Shareholders’ Agreement”), which
contains certain arrangements regarding the relationship between the Parties. The Shareholders’ Agreement
notably provides for a right of first offer in case any Major Shareholder or their parent company(ies) desires to
transfer at least 1% of the shares in Majorel directly or indirectly held by it to any third party.
The Shareholders’ Agreement:
• may be terminated at any time by written agreement between all of the Parties; and
• shall terminate upon all of the shares in Majorel being held by (a) one person; or (b) members of the same
group to which one of the Major Shareholders’ parent company belongs.
If any of the Major Shareholders or permitted affiliate transferee (as defined in the Shareholders’ Agreement) holds
less than 5% in the share capital of Majorel as a consequence of the transfer thereof in accordance with the terms
of the Shareholders’ Agreement and the Articles, such Major Shareholder or permitted affiliate transferee, as
applicable, and its respective parent company (as defined in the Shareholders’ Agreement) or ultimate parent (as
the case may be), shall cease to be a party for the purposes of the Shareholders’ Agreement; provided that if such
parent company or ultimate parent is also the parent company or ultimate parent of another Major Shareholder or
permitted affiliate transferee, such parent company or ultimate parent will continue to be a party for the purposes
of the Shareholders’ Agreement for so long as that other Major Shareholder or permitted affiliate transferee
continues to hold 5% or more in the share capital of Majorel and the Shareholders’ Agreement is not terminated in
accordance with its terms.
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66
Appointment and replacement of Board members, amendments of the Articles of Association
Appointment and replacement of Board members
Please refer to point 3.2.2 on pages 58 to 60 of this report, which cover the appointment and replacement
procedure for the members of the Management Board and the Supervisory Board. These reflect the terms of the
arrangements between the Parties to the Shareholders’ Agreement on this matter, as have been incorporated in
Majorel’s Articles of Association and/or internal rules and governance.
In addition, the Parties to the Shareholders’ Agreement agreed that the Supervisory Board shall have a permanent
chairman who shall be a member of the Supervisory Board that is appointed by a meeting of the Supervisory Board
out of a list of candidates proposed jointly by the Saham Shareholders and who shall preside over meetings of the
Supervisory Board and oversee the administration of the Supervisory Board process, in each case consistent with
the rules of procedure of the Supervisory Board and the Articles of Association. The Chairman of the Supervisory
Board shall not have a second or casting vote.
The Parties have further agreed that, upon proposal of removal, with or without cause, at any time, by
Bertelsmann Luxembourg S.à r.l. of a representative nominated by Bertelsmann Luxembourg S.à r.l. as a Class A
Member, the Major Shareholders shall take such actions as shall be necessary to cause any such representative
nominated by Bertelsmann Luxembourg S.à r.l. to be removed by a resolution of the General Meeting. The Parties
have further agreed that, upon proposal of removal, with or without cause, at any time, by the Saham Shareholders
of a representative nominated by the Saham Shareholders as a Class B Member, the Major Shareholders shall take
such actions as shall be necessary to cause any such representative nominated by the Saham Shareholders to be
removed by a resolution of the General Meeting.
According to the Shareholders’ Agreement, provided no Transfer Trigger Event (as defined here below) has
occurred, a vacancy in the total number of the non-executive representatives proposed by Bertelsmann
Luxembourg S.à r.l. shall be filled by persons proposed by Bertelsmann Luxembourg S.à r.l. by a resolution of the
General Meeting, and a vacancy in the total number of representatives proposed by the Saham Shareholders shall
be filled by persons proposed by the Saham Shareholders by a resolution of the General Meeting, except that a
representative who has previously been removed for cause may not be proposed to be appointed to the
Supervisory Board, and provided that the remaining members of the Supervisory Board shall be entitled to fill in
any such vacancy by person(s) proposed in accordance with the previous paragraph here above, in each case on a
temporary basis until the next General Meeting. In connection with each appointment or removal of a
representative, the Major Shareholder proposing a representative or proposing a removal shall give prompt written
notice thereof to all the representatives and the other Major Shareholders.
If the aggregate amount of shares held directly or indirectly by a parent company of a Major Shareholder and its
affiliates (as defined in the Shareholders’ Agreement) (the “Transferring Group”) falls below 15% of the then total
outstanding shares (a “Transfer Trigger Event”), the Transferring Group shall cease to be entitled to exercise the
right to nominate two or five (as applicable) non-executive representatives (including the Chairman, if applicable)
to the Supervisory Board, provided that, the Transferring Group shall be entitled to nominate one representative
who shall be required for a quorum for the transaction of business at any meeting of the Supervisory Board in
accordance with the Articles of Association and the rules of the Supervisory Board and further provided that any
other representatives nominated by the Transferring Group shall be promptly removed in accordance with the
Articles of Association and the rules of the Supervisory Board.
Provided no Transfer Trigger Event has occurred, Bertelsmann Luxembourg S.à r.l. shall have the right to propose
the removal of the CEO at any time, with or without cause, and the Saham Shareholders shall have the right to
propose the removal of the CEO for cause (in which case, each Major Shareholder shall take action to effect such
removal by the Supervisory Board). Provided no Transfer Trigger Event has occurred, in the case of any vacancy in
the position of the CEO of Majorel, Bertelsmann Luxembourg S.à r.l. shall have the right to nominate any successor
CEO, except that Bertelsmann Luxembourg S.à r.l. may not nominate a CEO who has previously been removed from
Majorel for cause and provided that any such vacancy may be filled by the Supervisory Board on a temporary basis
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67
with any representative nominated by Bertelsmann Luxembourg, in which case Bertelsmann Luxembourg S.à r.l.
shall be entitled to nominate a person to fill in a vacancy on the Supervisory Board.
Provided no Transfer Trigger Event has occurred, the Saham Shareholders shall have the right to propose the
removal of the CFSO at any time, with or without cause, and Bertelsmann Luxembourg S.à r.l. shall have the right to
propose the removal of the CFSO for cause (in which case, each Major Shareholder shall take action to effect such
removal by the Supervisory Board). Provided no Transfer Trigger Event has occurred, in the case of any vacancy in
the position of the CFSO of Majorel, the Saham Shareholders shall have the right to nominate any successor CFSO,
except that the Saham Shareholders may not nominate a CFSO who has previously been removed from Majorel for
cause and provided that any such vacancy may be filled by the Supervisory Board on a temporary basis with any
representative nominated by the Saham Shareholders, in which case the Saham Shareholders shall be entitled to
nominate a person to fill in a vacancy on the Supervisory Board.
Amendments of the Articles of Association
Luxembourg law requires an extraordinary general meeting of shareholders to vote on any amendment of the
Articles of Association. The agenda of the extraordinary general meeting of shareholders must indicate the
proposed amendments to the Articles of Association.
Extraordinary general meetings of shareholders have a quorum requirement of at least 50% of Majorel’s issued
share capital to which voting rights are attached, unless otherwise provided by the Articles of Association or
mandatorily required by law. If such quorum is not present, a second extraordinary general meeting of
shareholders may be convened at a later date with no quorum according to the appropriate notification
procedures. Resolutions must be adopted at an extraordinary general meeting by a two-thirds majority of the votes
validly cast on such resolutions. Abstentions are not considered votes validly cast. Except in the case of a merger, a
demerger or proceedings assimilated thereto under the 1915 Law, an amendment of the corporate objectives of
the Company or its legal form requires in addition the approval by a General Meeting of holders of bonds issued by
the Company at the majority and quorum provided for by the 1915 Law. For the avoidance of doubt, the Company
has not, as at December 31, 2021, issued any bonds.
Powers of the Management Board and Supervisory Board, and power to issue or buy back shares
The Management Board is responsible for managing Majorel, and the members of the Management Board
represent the Company in dealing with third parties. All decisions of the Management Board shall require the prior
approval of the Supervisory Board; however, the Supervisory Board has decided to authorize all management
actions by the Management Board without approval to the extent such actions do not constitute a matter listed as
a “Supervisory Board Consent Matter” in the rules of procedure of the Supervisory Board.
33
Within this limit, the
Management Board is vested with the broadest powers to act in the name of Majorel and to take any actions
necessary or useful to fulfill Majorel’s corporate purpose. All powers not expressly attributed to the Supervisory
Board or to the General Meeting by the 1915 Law, by the Articles of Association or the internal rules of procedure
of the Supervisory Board shall be within the competence of the Management Board.
The power of the Management Board with regard to the issue of shares is detailed under point 3.3 on page 62 of
this Annual Report.
The Management Board and/or the Supervisory Board are not empowered to decide on a redemption of Majorel’s
shares. The only power of the Management Board in this context is the possibility to suspend the dividend rights
attached to shares held in treasury by Majorel.
Significant agreements or essential business contracts
Under Majorel’s contracts with its clients, Majorel’s clients are generally not contractually committed to providing
Majorel specific volumes; therefore, irrespective of any termination right that may arise out of a change of control
33
The Supervisory Board Consent Matters are publicly available on Majorel’s website (www.majorel.com).
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68
following a takeover bid, clients may in any case decide to reduce the volume provided to Majorel in the case of a
takeover bid.
Agreements with board members and employees
The members of the Management Board and several senior executives are entitled to contractual severance
payments in the case of dismissal, except in the event of termination for good cause by the contracting Majorel
Group company.
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69
Remuneration
Report
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70
4. Remuneration Report
In accordance with the implementation of the second Shareholder Rights Directive (SRD II) into Luxembourg law,
Majorel Group Luxembourg S.A. is required to prepare and disclose a clear and understandable Remuneration
Report as set out in Article 7ter of the Luxembourg law of May 24, 2011 on Shareholders’ Rights, as amended.
The Management Board and the Supervisory Board have jointly prepared the report on the remuneration of the
members of the Management Board and Supervisory Board, providing a comprehensive overview of the
remuneration awarded or due during the financial year 2021. In accordance with Article 7ter of the Luxembourg
law of May 24, 2011 on Shareholders’ Rights, as amended, the Remuneration Report presents the application of
the remuneration policy applicable in the financial year 2021. Furthermore, the Remuneration Report will disclose
the intended adjustments of the remuneration policy due to the Listing, which will become effective as of January
1, 2022.
As stated in the SRD II, the Remuneration Report is intended to provide a useful mechanism for shareholders to
better assess and monitor the performance of the Management Board. In this context, Majorel will disclose, for
example, the target achievement levels as well as the resulting remuneration awarded and due to allow for an
assessment of the pay-for-performance relationship.
The Remuneration Report will be presented to the Annual General Meeting on June 20, 2022 for an advisory vote.
4.1.1 Summary of the financial year 2021
The financial year 2021 represents a truly unique year for Majorel due to the Listing on September 24, 2021. For
Majorel, it offers new opportunities for growth (see section 2.10 for more details on the Company’s performance
in the financial year 2021).
In the context of the Listing, Majorel has reviewed and redesigned the remuneration policy for the members of the
Management Board and the Supervisory Board in accordance with Article 7bis of the Luxembourg law of May 24,
2011 on Shareholders’ Rights, as amended. The new remuneration policy will be presented to the Annual General
Meeting on June 20, 2022 for an advisory vote and will become effective as of January 1, 2022.
The new remuneration policy shall ensure an appropriate remuneration for the members of the Management
Board and Supervisory Board in line with the long-term interests and corporate strategy of Majorel. In particular,
the newly designed variable remuneration for the members of the Management Board sets appropriate incentives
to foster the profitable growth of the Company. In addition, the interests of our shareholders are taken into
account through a share-based long-term incentive plan for the Management Board. The interests of other
stakeholders, such as employees, are reflected by environmental, social and governance (ESG) targets in the
remuneration of the Management Board. The new remuneration system of Majorel is designed to contribute to
the future value creation of the Group.
4.1.2. Management Board remuneration in 2021
The remuneration of the members of the Management Board of Majorel consists of fixed and variable
remuneration elements. The fixed remuneration comprises their annual base salary, fringe benefits and pension
expenses. The variable remuneration consists of short-term and long-term remuneration elements. These are
linked to predefined financial and non-financial performance targets. They provide important incentives for the
successful implementation of the corporate strategy and the long-term development of the Company.
In order to address the new challenges of Majorel after the successful listing in 2021, the existing remuneration
policy will be adjusted from 2022 onwards. The proven and still strategically relevant elements of the remuneration
policy will be retained and, where necessary, remuneration elements will be aligned more closely with the
corporate strategy and investors’ expectations. In addition, the remuneration policy 2022 takes particular account
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71
of the new regulatory requirements as a listed company, the interests of the shareholders and international best
practice.
Remuneration policy 2021 and 2022
4.1.2.1. Fixed remuneration
Annual base salary
Each member of the Management Board receives a gross annual fixed amount in cash which is paid in twelve equal
instalments as a monthly salary.
Fringe benefits
The fringe benefits comprise market standard benefits such as contributions to certain insurances (e.g. accident
and disability insurance, group travel insurance), and a car allowance.
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72
Pension
The members of the Management Board are entitled to local pension benefits.
In case of Thomas Mackenbrock, an employer-financed pension contract (Bertelsmann Pension Contract III) with a
fixed pension commitment upon reaching retirement age is agreed in Germany. The employer holds a provision for
this plan. An entitlement to surviving dependents’ pensions (spouse’s and/or orphans’ pensions) and disability
pensions is also governed by Pension Contract III in its currently valid version.
In case of Otmane Serraj, it is an employer-financed and fund-based defined contribution plan (BeFrank scheme)
established in the Netherlands. The employer makes a contribution for the employee available for accruing
pension. The premium is a percentage of the pension base (statutory defined pensionable salary). The premium
percentage for the participant is determined on basis of the agreements made between employer and employee.
An entitlement to surviving dependents’ pensions (spouse’s and/or orphans’ pensions) and disability pensions is
also governed by pension plan in its currently valid version.
4.1.2.2 Variable remuneration
In addition to the annual fixed remuneration, the members of the Management Board are entitled to variable
remuneration, comprising a short-term incentive (STI) and a long-term incentive (LTI).
The STI incorporates relevant financial and non-financial key performance indicators of Majorel.
In connection with the Listing, the members of the Management Board have received an IPO Bonus with Equity
Deferral, a part of which has to be reinvested in shares and which was expected to result in a cash expense. While
the full amount of the IPO Bonus with Equity Deferral was expensed in 2021, the impact on cash flow from
operating activities and free cash flow occurred in November 2021 and January 2022. The IPO Bonus with Equity
Deferral has not impacted our operating EBITDA as it is adjusted as a special item. The Management Board
members invested 25% of the gross payout amount (equals approximately 50% of the net payout amount after
individual taxation) into company shares at offer share price of €33 per share with a lock-up period of three years
to ensure long-term alignment with the other shareholders.
The Supervisory Board of Majorel has established a new remuneration policy with effect from January 1, 2022. To
provide a holistic picture, both the variable remuneration applied in 2021 and the variable remuneration that will
be applied from 2022 onwards are described below. Since the target achievement and payouts are solely available
for 2021, the information on the variable remuneration in 2022 serves only as a guide.
Short-term incentive (STI)
The STI 2021 was designed as a target bonus and included both financial and individual targets that are measured
over a one-year period. For each Management Board member, the Supervisory Board determined a target amount
(at 100% target achievement and a maximum of 130% in case of overachievement of the financial numbers) for the
STI. The final payout of the STI will be made in cash at the end of the performance period and depends on the
annual performance with regard to the defined financial and individual targets.
Majorel operates in a large and structurally growing market and has set the Company’s profitable growth as a
central objective. This is addressed along multiple dimensions: driving growth with existing clients and winning new
clients, ensuring bottom-line with operational excellence and portfolio management, growing in existing
geographies and expanding into new countries, and offering existing services and solutions as well as developing
new offerings. Accordingly, the STI takes into account both revenue growth as the primary indicator of growth and
operating EBITDA margin as an indicator of operating profitability. This is in line with the Company’s key
performance indicators.
Besides financial targets, the STI comprises individual targets that also contribute to the execution of the
Company’s strategy.
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73
The financial targets have a weight of 60% (30% each), and the individual target(s) have a weight of 40% (100% in
total). The target achievement of the financial targets can range from 0% to 150%, whereas the target achievement
of the individual targets is capped at 100%. Consequently, the overall target achievement, and therefore the final
payout of the STI, is capped at 130% of the target amount.
STI 2021 – Overview
Financial performance in 2021
The Supervisory Board set the target and threshold values for the financial targets at the beginning of the financial
year.
In 2021, the target and threshold values as well as the actual values and the resulting achievement of the financial
targets were as follows:
Target achievement for financial targets in STI 2021
Target achievement
Financial target Weighting 0% 25% 50% 100% 125% 150% Actual
Target
achievement
Revenue growth w/o M&A
*
30% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 23.6% 150.0%
Operating EBITDA margin (STI
definition)
**
30% 12.0% 13.0% 14.0% 15.0% 16.0% 17.0%
17.4% 150.0%
Weighted target achievement financial targets 90.0%
* Excluding China acquisition.
** STI agreement was based on operating EBITDA margin of total revenue; Official operating EBITDA based on net revenue is 18.0%.
Individual performance 2021
To take into account the non-financial and operationally relevant performance of the members of the Board of
Management, individual targets were set at the beginning of the financial year at the reasonable discretion of the
Supervisory Board. These targets address objectives relevant to the implementation of the Company's long-term
strategy. For 2021, these individual targets covered the continued management of the COVID-19 pandemic, the
further enhancement of Majorel’s business development and organization, and the execution of certain strategic
projects.
The Supervisory Board has assessed the individual performance of the members of the Management Board against
the background of the predefined individual targets and set the target achievement at 100% for both members of
the Management Board, given the fulfillment of their respective targets and the outstanding development of
Majorel that is reflected in all financial and operational key performance indicators (see section 2.8 for KPIs).
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74
Summary for STI 2021
Based on the performance with regard to financial and individual targets, the total target achievement and
resulting payout for the STI 2021 was as follows:
Overview of STI 2021
Target achievement
Target
amount
in € thousand
Revenue growth
w/o M&A (30%)
Operating EBITDA
margin (STI
definition) (30%)
Individual
targets (40%)
Total target
achievement
Payout amount
in
€ thousand
Thomas
Mackenbrock
324 150% 150% 100% 130% 422
Otmane Serraj 216 150% 150% 100% 130% 281
Outlook: STI 2022 onwards
The STI from 2022 onwards will be slightly adjusted compared to the STI in 2021, in order to better reflect the
Company's business model. The mechanism of the STI remains the same.
The financial performance target of “Revenue Growth w/o M&A” will change to “Organic net revenue Growth”, in
order to focus on the net revenue growth of the Company adjusted for foreign exchange effects and M&A
activities.
The operating EBITDA margin target 2022 will be calculated in line with the Company definition as a percentage of
Majorel’s net revenue.
The individual targets will be adapted to business targets, which will be based on individual financial/operational
targets that are quantitatively measurable. The target achievement for the performance targets can range from 0%
to 150%. Hence, the maximum overall target achievement of the STI will be 150%.
Furthermore, the weighting of the targets is to be adjusted. The financial and business targets will be equally
weighted at one-third each from 2022.
STI 2021 to 2022
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75
Long-term incentive (LTI)
Majorel's long-term remuneration is aligned with the Company’s long-term and strategic goals.
The members of the Management Board were granted a long-term incentive plan, the main objectives of which
were business development since the inception of Majorel and the subsequent long-term value creation of
Majorel. The commitment was implemented by the Company in the form of an IPO Bonus with an Equity Deferral
in 2021.
Against the background of the successful listing in September 2021, the Supervisory Board established a new LTI to
reflect the new environment of Majorel as a listed company, taking effect from 2022. The new LTI incentivizes the
long-term development of Majorel by introducing relevant financial and non-financial (ESG) performance
measures. These measures are derived from Majorel's long-term planning and thus aligned with the Company’s
strategy and with investors’ expectations, and reflected in the remuneration policy of the Management Board.
Furthermore, the LTI aligns the interests of Management Board members and shareholders by requiring members
of the Management Board to invest the net payout of the LTI in the Company’s shares.
IPO Bonus with Equity Deferral
The IPO Bonus with Equity Deferral was designed as a one-off cash bonus to reward the successful value creation
since inception and the completion of the Company’s listing. It also aims to retain key managers and secure the
successful future development of Majorel.
Under the IPO Bonus with Equity Deferral, the members of the Management Board have been required to invest
25% of the gross amount of the IPO Bonus (equal to approximately 50% of net payout amount after individual
taxation) with Equity Deferral in Shares (“Deferral Shares”). This means that the Management Board members are
obliged to invest in Deferral Shares from their post-tax net payment. Following determination of the Offer Price,
the beneficiaries under the IPO Bonus with Equity Deferral have purchased Deferral Shares from the Selling
Shareholders against payment of the Offer Price of €33 per share.
The Deferral Shares have then been deposited in the share deposit account of each of the beneficiaries. For each
beneficiary under the IPO Bonus with Equity Deferral, a share deposit account was set up with a financial services
provider designated by the Company. The costs of such share deposit accounts are borne by the Company. For the
acquisition of the Deferral Shares, the Company had granted each beneficiary under the IPO Bonus with Equity
Deferral an interest-free loan in an amount equal to the respective share of the purchase price. Upon request of
the beneficiaries, the Company was entitled to pay out the loan on behalf of the members of the Management
Board to the Selling Shareholder to facilitate the settlement process. The interest-free loan amount has been offset
against the IPO Bonus with Equity Deferral paid to the relevant beneficiary.
In addition, the Deferral Shares are subject to a three year lock-up following the first day of trading (“Bonus Lock-
Up Period”). If one of the following three conditions occurs during the Bonus Lock-Up Period, the Deferral Shares
will be released and be at the free disposal of the members of the Management Board: (i) the completion of an
M&A transaction and subsequent delisting of the Company, (ii) the free float of the Shares falling below 20% for
more than six consecutive months, or (iii) a mandatory public offer being made for the Shares. The costs for the
IPO Bonus with Equity Deferral and the share deposit accounts are borne by the Company.
The listing was successfully completed in September 2021. The IPO Bonus amounted to €29 million (gross) for
Thomas Mackenbrock and €19 million (gross) for Otmane Serraj and was paid out in November 2021 for Thomas
Mackenbrock and in January 2022 for Otmane Serraj.
Outlook: LTI 2022 onwards
The LTI to be applied from 2022 onwards is designed as a Restricted Stock Plan (RSP) to incentivize the long-term
development of Majorel through the achievement of financial and non-financial targets, and share price growth.
The LTI is granted annually and has a total performance period of five years, starting on January 1 of every year. It
consists of an initial target achievement period of one year and a subsequent lock-up period of four years until the
end of the performance period.
Annual Report 2021
76
The financial target is based on net profit (weighted at 70%), while the non-financial targets are based on
environmental, social and governance (ESG) criteria (weighted 30%), which will be determined by the Supervisory
Board at the beginning of each financial year on the basis of predefined ESG criteria. For the first tranche of the RSP
in 2022, the Employee Net Promoter Score (20%) and renewable electricity share (10%) will be set as ESG targets.
The target achievement of the financial and non-financial targets can range from 0% to 200%. The payout after the
target achievement period is capped at 200% of the target amount.
For each tranche of the LTI, the members of the Management Board are required to invest the net payout amount
received under the LTI, after the initial target achievement period, in Company shares that are subsequently
subject to a lock-up period until the end of the performance period, i.e. for four years. After the lock-up period, the
shares are at the free disposal of the members of the Management Board. Thus, the total performance period of
the LTI is five years.
LTI 2022+ Overview
Share ownership guideline
In the context of the listing and the review of the remuneration policy, the Supervisory Board has decided to
implement a Share Ownership Guideline (SOG) for the Management Board from 2022 onwards. The purpose of the
SOG is to further align the interests of the Management Board with those of the shareholders of the Company.
According to the SOG, the members of the Management Board are obliged to invest 200% (for the CEO) and 150%
(for the ordinary members of the Management Board) of their respective gross annual base salary in Company
shares. The required share ownership will be built up regularly through this obligation within the framework of the
new LTI plan (see above). Shares held to fulfill the share ownership obligation need to be held until the end of the
Management Board membership. As long as the share ownership obligation is not met, shares acquired within the
framework of the new LTI plan may not be sold, even if the respective lock-up period for the shares has already
expired.
Annual Report 2021
77
Malus/clawback
In the course of the review of the remuneration system in the context of the IPO, malus/clawback regulations have
also been implemented with effect from 2022. The Supervisory Board has the right to reduce variable
remuneration that has not yet been paid out (malus) or to reclaim variable remuneration that has already been
paid out (clawback) for both the STI and the LTI, under certain circumstances. Accordingly, before determining the
payout amount of the STI and LTI, respectively, the Supervisory Board will determine whether a predefined malus
event justifies a reduction or even forfeiture of the variable remuneration amount as determined on the basis of
the target achievement level and the respective plan terms. The set of events in which such an option applies is
defined in the amendments to the service agreements, and comprises cases of deliberate breaches of duty
(compliance malus/clawback) and cases of incorrect consolidated financial statements (performance clawback).
In 2021, no variable remuneration was forfeited nor reclaimed.
4.1.2.3 Individual disclosure of Management Board remuneration in 2021
The following table summarizes the remuneration awarded or due during the financial year 2021 to the members
of the Management Board, and the proportion of fixed to variable remuneration.
The members of the Management Board entered into service agreements with Majorel based on essentially similar
terms. In addition to his service agreement with Majorel, Thomas Mackenbrock entered into a service agreement
with Majorel Holding Deutschland GmbH, which stipulates that he will perform 80% of his total working activities in
Germany and the remaining 20% in Luxembourg. At the same time, in addition to the service agreement with
Majorel, Otmane Serraj entered into a service agreement with Majorel Holding Nederland B.V., which stipulates
that he will perform 70% of his total working activities in the Netherlands and the remaining 30% in Luxembourg.
The remuneration is paid by the respective companies in accordance with the split between the countries.
Remuneration awarded or due to the members of the Management Board during the financial year 2021
Thomas Mackenbrock
(Chief Executive Officer)
Otmane Serraj
(Chief Financial and
Shared Services Officer)
€ thousand
%
€ thousand
%
Fixed remuneration 547 2% 348 2%
Annual base salary 487
324
Fringe benefits 12 15
Pension expenses 48 9
STI: Short-Term Incentive 2021 422 1% 281 1%
LTI: IPO Bonus with Equity Deferral 29,000 97% 19,000 97%
Total remuneration
29,969
19,629
4.1.3 Supervisory Board remuneration in 2021
The current members of the Supervisory Board have been appointed/reconfirmed by a resolution of the
Extraordinary General Meeting of Majorel, held on September 17, 2021, in accordance with the Articles of
Association and applicable law.
The Supervisory Board has established two committees: the Audit Committee and the Nomination and
Compensation Committee (NCC).
The remuneration of the members of the Supervisory Board consists of fixed remuneration elements only. The
chairperson of the Supervisory Board receives a fixed annual payment of €100,000. The members of the
Supervisory Board each receive a fixed annual payment of €50,000. The chairperson of a Supervisory Board
committee additionally receives a fixed annual payment of €25,000, provided that the relevant committee has met
at least once in the relevant financial year to perform its tasks. A member of the Supervisory Board who serves for
only a portion of a given financial year will be remunerated pro rata.
Annual Report 2021
78
The remuneration awarded or due during the financial year 2021 to the members of the Supervisory Board is
summarized in the following table. It consists entirely of fixed remuneration elements. Payments were only made
from September 17, 2022. No compensation for Supervisory Board members was agreed for the period prior to
this.
Remuneration awarded or due to the members of the Supervisory Board during the financial year 2021
€ in thousand
Period
Fixed annual
payment
Committee
fees
Total
remuneration
Members in office as of Dec. 31, 2021
Moulay Mhamed Elalamy (Chairman
since 17.09.2021)
01.01. - 31.12.2021
29
-
29
Pim Berendsen (Chair of Audit
Committee)
17.09. - 31.12.2021
14
7
22
Jörn Caumanns
01.01. - 31.12.2021
14
-
14
Rolf Hellermann
17.09. - 31.12.2021
14
-
14
Laureen Kouassi-Olsson (Chair of NCC)
17.09. - 31.12.2021
14
7
22
Ghita Lahlou El Yacoubi
01.01. - 31.12.2021
14
-
14
Matthias Moeller
17.09. - 31.12.2021
14
-
14
Nina Weiden
17.09. - 31.12.2021
14
-
14
Bettina Wulf
01.01. - 31.12.2021
14
-
14
Former members
Thomas Rabe
01.01. - 16.09.2021
-
-
0
Moulay Hafid Elalamy (Chairman)
01.01. - 16.09.2021
-
-
0
Thomas Götz
01.01. - 16.09.2021
-
-
0
Annual Report 2021
79
Development of remuneration and Company performance over time
Annual values
2021
2020
2019
Remuneration of the Management Board in thousand €
*
Thomas Mackenbrock
(Chief Executive Officer)
909
1,027
708
Otmane Serraj
(Chief Financial and Shared Services Officer)
605
651
472
Remuneration of the Supervisory Board in thousand € **
Moulay Mhamed Elalamy
(Chairman of the Supervisory Board)
29
0
0
Pim Berendsen
(Member of the Supervisory Board and Chair of Audit Committee)
22
n/a
n/a
Jörn Caumanns
(Member of the Supervisory Board)
14
0
0
Rolf Hellermann
(Member of the Supervisory Board)
14
n/a
n/a
Laureen Kouassi-Olsson
(Member of the Supervisory Board and Chair of NCC)
22
n/a
n/a
Ghita Lahlou El Yacoubi
(Member of the Supervisory Board)
14
0
0
Matthias Moeller
(Member of the Supervisory Board)
14
n/a
n/a
Nina Weiden
(Member of the Supervisory Board)
14
n/a
n/a
Bettina Wulf
(Member of the Supervisory Board)
14
0
0
Average remuneration on a full-time equivalent basis of employees in
thousand €
Ø remuneration of employees of Majorel Group Luxembourg S.A.
***
110
106
125
Company performance in million €
Net revenue
1,752
1,340
1,172
Operating EBITDA
316
196
128
*
Based on base salary, STI, discretionary bonuses, and without IPO Bonus with Equity Deferral in 2021
**
No remuneration before September 17, 2021
***
Employees with employment contract in Luxembourg not within Management Board
Annual Report 2021
80
Glossary
of Terms
Annual Report 2021
81
5. Glossary of Terms
Capital expenditure (CAPEX)
Capital expenditure is defined as investments in intangible assets and investments in property, plant and
equipment.
Cash conversion rate
Cash conversion rate is defined as free cash flow divided by operating EBITDA.
CEA
CEA refers to Majorel’s China, East Asia business Segment.
Change in like-for-like net revenue
Change in like-for-like net revenue corresponds to net revenue growth year over year, adjusted for certain specific,
probably non-recurring items. For 2021 to 2020 like-for-like net revenue comparison the contribution of the first-
time consolidation of the Chinese business and COVID-related business were adjusted.
China Business
China Business means the acquisition of Shanghai Majorel Commercial Services Co., Ltd. (previously, Shanghai
Bertelsmann Commercial Services Co. Ltd.), Shanghai Majorel Digital Marketing Co., Ltd. (previously, Shanghai
Bertelsmann-arvato Information Services Co. Ltd.) and Shanghai Majorel CX Business solutions Co., Ltd. (previously,
Bertelsmann-Arvato Commercial Services (Shanghai) Co., Ltd.).
COVID-19 Business
COVID-19 Business means contracts to provide services in the fight against the COVID-19 pandemic.
CR
CR refers to Corporate Responsibility and also includes ESG (Environmental, Social and Governance).
CX/CXM
CX refers to Customer Experience and CXM to Customer Experience Management.
DE&I
DE&I refers to Diversity, Equity & Inclusion and is one of Majorel’s five CR pillars.
EASA
EASA refers to Majorel’s Europe, Africa, South America business Segment.
EBIT
EBIT is defined as earnings before interest and taxes.
Economic debt
Economic debt is defined as financial debt less cash and cash equivalents plus for pensions, similar obligations and
lease liabilities.
EPS
Basic earnings per share (EPS) is calculated by dividing the net profit attributable to shareholders by the weighted
average number of ordinary shares in issue during the year, excluding ordinary shares purchased by the Group and
held as treasury shares and the shares held under the liquidity program, if any. Diluted earnings per share is
calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all
dilutive potential ordinary shares. There is currently no category of dilutive potential ordinary shares.
Free cash flow
Free cash flow is defined as operating EBITDA less adjustments minus increase/plus decrease in net working capital
after net cash out from pensions, payments from leases and net investments in property, plant and equipment and
intangible assets excluding net payments from acquisitions and disposals of financial assets.
Annual Report 2021
82
GEMS
GEMS refers to Majorel’s Global English, Middle East, South East Asia business Segment.
GRI
GRI refers to the Global Reporting Initiative, the independent, international organization that helps businesses and
other organizations take responsibility for their impacts, by providing them with the global common language to
communicate those impacts. They provide the world’s most widely used standards for sustainability reporting – the
GRI Standards.
Net revenue
Net revenue for the Group corresponds to revenues as reported in our management reporting less certain direct,
order-related external costs which are part of external expenses and costs of materials and consist mainly of cost of
services purchased (subcontracted or outsourced services). Net revenue for each Segment correspond to the
according Segment revenues less certain direct, order-related inter-Segment and external costs. Management
reporting data exclude revenues from minor activities (primarily the Sonopress Business) outside the Majorel
Group’s core business which are reported in the consolidated income statement (the “Sonopress Business” is
defined as certain non-core business activities historically carried out by Arvato de Mexico, S.A. de C.V., which was
wound down in 2021).
Net revenue retention
Net revenue retention is defined as net revenue generated by clients in FY2021 divided by net revenue generated
by the same cohort of clients in FY2020 (excluding China Business).
Net working capital
Net working capital is defined as inventories plus trade and other current receivables, other current non-financial
assets and deferred items (assets), less trade and other current payables, other current provisions and deferred
items (liabilities). Current income tax receivables and payables and cash equivalents are not included in our
definition of net working capital. We use net working capital to assess the capital requirements of our operating
business.
Offshore
We define offshore as net revenue from the following countries (even if some local business is included): Armenia,
Colombia, Croatia, Egypt, Estonia, Georgia, Ghana, India, Ivory Coast, Kenya, Malaysia, Mexico, Morocco, North
Macedonia, Peru, Philippines, Poland, Portugal, Romania, Senegal, Togo, and Turkey.
Operating EBITDA
Operating EBITDA is defined as EBIT (earnings before interest and taxes) adjusted for depreciation/amortization,
impairment and reversal on intangible assets, property, plant and equipment and right-of-use assets, adjusted for
(i) impairment on goodwill and other intangible assets with indefinite useful life as well as gains from business
combinations, (ii) impairment on carrying amounts on assets held for sale, (iii) impairment/reversals on other
financial assets at amortized cost, (iv) impairment/reversals on investments accounted for using the equity
method, (v) results from disposals of investments, (vi) fair value measurement of investments, and (vii)
restructuring and other special items. We use operating EBITDA to assess the operating performance of our
business as operating EBITDA shows our EBIT as adjusted for depreciation and amortization, which are non-cash
charges, and specific periodic outcomes to enhance comparability of results over periods. When comparing
operating EBITDA with peer group data, it should be taken into account that the total adjustments in a given year
do not represent the full amount of all special effects incurred in a given year, as rather only material effects
subject to certain thresholds will be considered for the purpose of calculating operating EBITDA.
Operating EBITDA margin
We define operating EBITDA margin as operating EBITDA divided by net revenue.
Annual Report 2021
83
Consolidated Financial
Statements
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 84
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of profit and loss
in € millions
Notes
2021
2020
Revenues
1
1,811
1,375
Other operating income
2
37
20
External expenses and costs of materials
3
(423)
(308)
Personnel costs
4
(1,236)
(894)
Amortization/depreciation, impairment and reversals on intangible assets, property,
plant and equipment and right-of-use assets
5
(85)
(77)
Results from investments accounted for using the equity method
12
1
1
Results from disposals of investments
-
(1)
EBIT (earnings before interest and taxes)
105
116
Interest income
6
1
-
Interest expenses
6
(3)
(2)
Other financial income
7
2
-
Other financial expenses
7
(5)
(7)
Financial result
(5)
(9)
Earnings before taxes
100
107
Income tax expense
8
(20)
(21)
Group profit or loss
80
86
attributable to:
Majorel shareholders
80
86
Non-controlling interests
-
-
Earnings per share (in €)
– Basic
9
0.80
0.86
– Diluted
9
0.80
0.86
The notes on pages 89 to 128 are an integral part of these consolidated financial statements.
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 85
Consolidated statement of comprehensive income
in € millions
Notes
2021
2020
Group profit or loss
80
86
Items that will not be reclassified subsequently to profit or loss
Remeasurement component of defined benefit plans
9
(4)
Items that will be reclassified subsequently to profit or loss when specific
conditions are met
Exchange differences
– changes recognized in other comprehensive income
12
(8)
Other comprehensive income net of tax
17
21
(12)
Group total comprehensive income
101
74
attributable to:
Majorel shareholders
101
74
Non-controlling interests
-
-
The notes on pages 89 to 128 are an integral part of these consolidated financial statements.
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 86
Consolidated statement of financial position
in € millions
Notes
12/31/2021
12/31/2020
Assets
Non-current assets
Goodwill
10
94
53
Other intangible assets
10
20
8
Property, plant and equipment and right-of-use assets
11
245
190
Investments accounted for using the equity method
12
3
2
Trade and other receivables
14
1
1
Other non-financial assets
15
-
2
Deferred tax assets
8
38
15
401
271
Current assets
Trade and other receivables
14
467
307
Other financial assets
13
11
1
Other non-financial assets
15
68
56
Current income tax receivables
18
9
Cash and cash equivalents
16
238
195
802
568
1,203
839
Equity and liabilities
Equity
17
Subscribed capital
a)
1
-
Capital reserve
255
275
Retained earnings
138
37
Majorel shareholders' equity
394
312
Non-controlling interests
5
5
399
317
Non-current liabilities
Provisions for pensions and similar obligations
18
43
50
Other provisions
19
8
5
Deferred tax liabilities
8
2
-
Financial debt
20
70
20
Lease liabilities
21
80
58
Other non-financial liabilities
22
-
1
203
134
Current liabilities
Other provisions
19
30
22
Financial debt
20
89
34
Lease liabilities
21
45
37
Trade and other payables
22
156
132
Other non-financial liabilities
22
261
153
Current income tax payables
20
10
601
388
1,203
839
a) As of December 31, 2021, the subscribed capital amounts to €1 million (December 31,2020: €404 thousand).
The notes on pages 89 to 128 are an integral part of these consolidated financial statements.
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 87
Consolidated statement of cash flow
in € millions
Notes
2021
2020
Earnings before interest and taxes
105
116
Amortisation, depreciation and write-ups of non-current assets
5
85
77
Gains/losses from disposals of non-current assets
-
1
Change in provisions for pensions and similar obligations
18
(1)
(5)
Change in other provisions
19
11
13
Change in net working capital
24
39
Taxes paid
8
(40)
(17)
Other effects
1
(1)
Cash flow from operating activities
185
223
Investments in:
– intangible assets
10
(4)
(3)
– property, plant and equipment
11
(57)
(43)
– purchase prices for consolidated investments (net of acquired cash)
25
(56)
(3)
– prepaid consideration for business acquisition
14
(58)
-
- other investments and financial assets
(5)
-
Disposals of other fixed assets
6
4
Cash flow from investing activities
(174)
(45)
Proceeds from/redemption of other financial debt
26
105
(16)
Redemption of lease liabilities
(46)
(40)
Interest paid
(6)
(5)
Change in equity
-
2
Dividends to Majorel shareholders
17
(19)
-
Other effects
(8)
1
Cash flow from financing activities
26
(58)
Change in cash and cash equivalents
37
120
Exchange rate effects and other changes in cash and cash equivalents
6
(4)
Cash and cash equivalents as of 1/1
195
79
Cash and cash equivalents as of 12/31
16
238
195
The notes on pages 89 to 128 are an integral part of these consolidated financial statements.
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 88
Consolidated Statement of Changes in Equity
in € millions
Notes
Subscribed capital
a)
Capital reserve
Retained earnings
Majorel shareholders' equity
Non-controlling
interests
Total
Balance as of 1/1/2020
-
275
(37)
238
4
242
Group profit or loss
-
-
86
86
-
86
Other comprehensive income
17
-
-
(12)
(12)
-
(12)
Group total comprehensive income
-
-
74
74
-
74
Dividend distributions
-
-
-
-
-
-
Equity transactions with shareholders
-
-
-
-
-
-
Other changes
-
-
-
-
1
1
Balance as of 12/31/2020
-
275
37
312
5
317
Balance as of 1/1/2021
-
275
37
312
5
317
Group profit or loss
-
-
80
80
-
80
Other comprehensive income
17
-
-
21
21
-
21
Group total comprehensive income
-
-
101
101
-
101
Dividend distributions
17
-
(19)
-
(19)
-
(19)
Transfer
17
1
(1)
-
-
-
-
Equity transactions with shareholders
1
(20)
-
(19)
-
(19)
Other changes
-
-
-
-
-
-
Balance as of 12/31/2021
1
255
138
394
5
399
a) As of December 31, 2021, the subscribed capital amounts to €1 million (December 31, 2020: €404 thousand).
The notes on pages 89 to 128 are an integral part of these consolidated financial statements.
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 89
GENERAL PRINCIPLES
Majorel is a customer experience (CX) service provider with more than 69,000 employees based in 35 countries (32 operating countries)
as of December 31, 2021 in Europe, the Middle East, Africa, Americas and Asia.
Majorel (hereafter also referred to as “Majorel Group” or “Group”) was established when the German-based Bertelsmann SE & Co. KGaA
(hereafter referred to as “Bertelsmann” or “Bertelsmann Group”) and the Moroccan-based Saham Group (hereafter also referred to as
“Saham”) merged their respective customer relationship management (CRM) businesses Arvato Customer Relationship Management and
Phone Group, ECCO Outsourcing and Pioneers Outsourcing. The transaction was agreed upon between Bertelsmann and Saham in
September 2018, following which Bertelsmann contributed its customer relationship management business subsidiaries. On January 4,
2019, Saham contributed its customer relationship management business subsidiaries. Since then, the Majorel Group has been operating
as a venture between Bertelsmann and Saham.
Majorel Group Luxembourg S.A. is the parent company of the Majorel Group and domiciled in Boulevard de Kockelscheuer 18, 1821,
Luxembourg. The company is a stock company (société anonyme) registered in Luxembourg and entered in the trade register Registre
de Commerce et des Sociétés under the number B227626. On September 24, 2021, Majorel Group completed the initial public offering of
own shares on Euronext Amsterdam N.V. (“Euronext Amsterdam”). As of December 31, 2021, the total number of public shares is
20,109,627, representing 20.1% of Majorel Group’s issued share capital. Following the completion of the public offering, Bertelsmann and
Saham Group each holds 39.5%, Management of Majorel Group holds 0.9% of the issued share capital of Majorel.
As ultimate parent, Bertelsmann SE & Co. KGaA is consolidating Majorel Group Luxembourg S.A. and its subsidiaries in its consolidated
financial statements. Bertelsmann SE & Co. KGaA is a company incorporated under German law whose registered office is established
at Carl-Bertelsmann-Strasse 270, D-33311 Gütersloh, Germany. Consolidated financial statements for Bertelsmann SE & Co. KGaA can
be obtained at its registered office; it is entered in the commercial register of the GüterslohLocal Court (Amtsgericht) under HRB 9194.
Majorel consists of Majorel Group Luxembourg S.A. and its direct and indirect subsidiaries and associates.
The Majorel Consolidated Financial Statements as of December 31, 2021, were prepared in accordance with International Financial
Reporting Standards (IFRS) of the International Accounting Standards Board (IASB) and the related interpretations (IFRIC) of the IFRS
Interpretations Committee (IFRS IC) that are applicable in the European Union (IFRS-EU).
Majorel uses one set of global accounting policies, which are IFRS compliant. The principal accounting policies adopted in the preparation
of the Consolidated Financial Statements are set out in the section “Accounting and Measurement Policies.” These policies have been
consistently applied to all the years and consolidated statement of financial position dates presented, unless otherwise stated. The
Consolidated Financial Statements as of December 31, 2021, were authorized for issue by the Management Board on March 15, 2022.
The Consolidated Financial Statements are prepared in euros. Unless otherwise stated, all amounts are given in millions of euros
(€ million). For the sake of clarity, certain items are aggregated in the consolidated statement of profit or loss , consolidated statement of
comprehensive income, consolidated statement of financial position, consolidated statement of cash flows and consolidated statement of
changes in equity. These items are disclosed and explained in greater detail in the notes.
The Consolidated Financial Statements have been prepared under the historical cost convention except for the following material items in
the consolidated statement of financial position:
• Equity instruments at fair value through other comprehensive income are measured at fair value.
• Derivative financial instruments are measured at fair value.
• Non-derivative financial instruments at fair value through profit or loss (FVTPL) are measured at fair value.
• The defined benefit assets and liabilities are measured in accordance with IAS 19.
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 90
Impact of New Financial Reporting Standards
The initial application of new financial reporting standards and interpretations had no material impact on Majorel.
Impact of Issued Financial Reporting Standards that Are Not Yet Effective
The Majorel Group has not opted for early adoption of any additional standards, interpretations or amendments that have been issued by
the IASB or the IFRS IC but are not yet mandatory. The expected impact from the issued financial reporting requirements that are not yet
effective is not material to the Majorel Group.
Effects of Coronavirus Pandemic on the Consolidated Financial Statements
The coronavirus outbreak has continued to develop during 2021, with a significant number of infections. Measures taken by various
governments to contain the virus have affected economic activity. Majorel Management has continuously been monitoring the business
and financial performance of the Majorel Group and has not identified any severe impacts on business and financial performance.
During the ongoing coronavirus pandemic, accounting impacts continue to be evaluated for the particularly relevant areas of impairment
testing for goodwill and individual assets, leasing, trade receivables, government grants, deferred tax assets, losses from onerous
contracts and revenues. No significant issues have been noted. Due to the overall economic situation in 2021, which appears to be
significantly more stable and is expected to remain more stable, no triggering event has been identified for a necessary impairment test
of goodwill during the period, despite the ongoing coronavirus pandemic. Overall, no negative effects on the Majorel Group’s financial
position, performance and cash flows are currently expected. Furthermore, the information presented in the notes to the Consolidated
Financial Statements of December 31, 2021 in section “Significant Accounting Judgments, Estimates and Assumptions” applies.
Management is of the opinion that the additional estimates and discretionary decisions required by the coronavirus pandemic take
appropriate account of the currently foreseeable microeconomic and macroeconomic situation.
CONSOLIDATION
Principles of Consolidation
The Majorel Consolidated Financial Statements include the financial statements of the parent company and its subsidiaries and associates.
The Group controls an entity when it 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. Subsidiaries are companies controlled by Majorel Group Luxembourg S.A. in
accordance with IFRS 10. Consolidation begins on the date on which the ability to exercise control exists and ends when Majorel loses
the ability to exercise control. Profit or loss and each component of total comprehensive income are attributed to the shareholders of the
parent company and the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. In accordance
with IFRS 3, business combinations are accounted for using the acquisition method. At the acquisition date, the identifiable assets and
liabilities are measured at their fair values, non-controlling interests are measured at the proportionate share in the recognized amounts
of the acquiree’s identifiable net assets. If the consideration transferred for the business combination or the fair values attributable to the
identifiable assets and liabilities of the company acquired can only be provisionally identified on the date of initial accounting, the business
combination is accounted for using these provisional values. Initial accounting is completed in accordance with IFRS 3.45, taking into
account the one-year measurement period. Comparative information for reporting periods prior to the completion of initial accounting is
presented as if it had already been completed on the acquisition date. Changes in the parent’s ownership interest in a subsidiary that do
not lead to a loss of control are accounted for as equity transactions. When the Group loses control over a subsidiary, it derecognises the
assets and liabilities of the subsidiary, any related non-controlling interest and other components of equity. Any resulting gain or loss is
recognised in the consolidated statement of profit and loss. Any investment retained in the former subsidiary as well as any amounts owed
by or to the former subsidiary are accounted for in accordance with the applicable IFRSs from the date when control is lost. That retained
interest is remeasured, at the date that control is lost at fair value on initial recognition of a financial asset in accordance with IFRS 9 or at
the cost on initial recognition of an investment in an associate or joint venture.
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 91
Associates are included in the Consolidated Financial Statements using the equity method in accordance with IAS 28. Associates are
companies over which Majorel exercises a significant influence. This is generally the case for voting rights between 20 percent and
50 percent. Smaller shareholdings are accounted for using the equity method if there is a significant influence in accordance with IAS 28.6.
When changing the accounting treatment of investments to the equity method, IFRS 3 is applied correspondingly so that the fair value of
the previously held interest is used in determining the cost of the investment accounted for using the equity method on the transition date.
The difference between the fair value and the carrying amount of the previously held interest is recognized in profit or loss.
Majorel recognizes immaterial investments in accordance with IFRS 9.
Scope of Consolidation
The scope of consolidation consists of 96 (December 31, 2020: 87) companies. This includes 95 (December 31, 2020: 86) fully
consolidated companies. In addition, 1 associate (December 31, 2020: 1) is accounted for using the equity method in the Consolidated
Financial Statements. There were 3 companies without significant business operations which were excluded from the scope of
consolidation due to their negligible importance for the financial position and financial performance of Majorel (previous year: nil).
As of December 31, 2021 and 2020, the detailed list of fully consolidated subsidiaries (FC) and the associate accounted for using the
equity method (EM) is as follows:
2021
2020
Name
Country
Consolidation
Method
Share
Share
3media SARL
France
FC
100
100
ACR France SARL
France
FC
100
100
Administration Personnel Services Sp. z o.o.
Poland
FC
100
100
Anteles SARL
France
FC
100
100
AQUITEL SAS
France
FC
100
100
Arvalife SAS
France
FC
100
100
Arvato de Mexico, S.A. de C.V.
Mexico
FC
100
100
Arvato Services S.A.C.
Peru
FC
100
100
Bertelsmann - Arvato Commercial Services (Shanghai) Co. Ltd**
China
FC
100
-
Call Insurance SARL
France
FC
100
100
Camaris SARL
France
FC
100
100
Cap2Call SARL
France
FC
100
100
Capdune SARL
France
FC
100
100
Ceacom SARL
France
FC
100
100
Cometz SARL
France
FC
100
100
CRM Holding GmbH
Germany
FC
100
100
Document Channel SAS
France
FC
100
100
Duacom SARL
France
FC
100
100
Ecco Gulf WLL
Qatar
EM
49
49
Eclipse Holdings Limited
Malta
FC
100
100
Eclipse Technologies for Business Services Majorel S.A.E.
Egypt
FC
100
100
Egyptian Call Center Operators Majorel S.A.E.
Egypt
FC
100
100
EMEA CRM hub Netherlands B.V.
Netherlands
FC
100
100
Euracom SARL
France
FC
100
100
Hainan Mairui Information Technology Co. Ltd**
China
FC
100
-
International Company for Human Resources and Management Services IMI
Majorel S.A.E.
Egypt
FC
100
100
Isilis SAS
France
FC
100
100
Junokai GmbH**
Germany
FC
100
-
KWS Kontowechsel Service GmbH
Germany
FC
100
100
Majorel Academy SARL
Morocco
FC
100
100
Majorel Africa S.A.
Morocco
FC
100
100
Majorel Africa Services SARL
Morocco
FC
100
100
Majorel Armenia LLC
Armenia
FC
100
100
Majorel Benelux B.V.
Netherlands
FC
100
100
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 92
Majorel Berlin GmbH
Germany
FC
100
100
Majorel Brandenburg GmbH
Germany
FC
100
100
Majorel Bucaramanga S.A.S.
Colombia
FC
100
100
Majorel C.Limited**
Crotia
FC
100
-
Majorel Canada, Inc.
Canada
FC
100
100
Majorel Colombia S.A.S.
Colombia
FC
100
100
Majorel Consulting GmbH*
Germany
FC
-
100
Majorel Corporate Portugal, SGPS, Lda.
Portugal
FC
100
100
Majorel Cote D'Ivoire S.A.R.L.
Cote d'Ivoire
FC
100
100
Majorel Cottbus GmbH
Germany
FC
100
100
Majorel Deutschland GmbH
Germany
FC
100
100
Majorel Dortmund GmbH
Germany
FC
100
100
Majorel Energy GmbH
Germany
FC
100
100
Majorel Erfurt GmbH
Germany
FC
100
100
Majorel Estonia OÜ
Estonia
FC
100
100
Majorel Georgia LLC
Georgia
FC
100
100
Majorel Group Luxembourg S.A.
Luxembourg
FC
100
100
Majorel Holding Deutschland GmbH
Germany
FC
100
100
Majorel Holding Nederland B.V.
Netherlands
FC
100
100
Majorel Hong Kong Limited
China
FC
100
100
Majorel Iberia, S.L.U.
Spain
FC
100
100
Majorel India Private Limited
India
FC
100
100
Majorel Ireland Limited
Ireland
FC
100
100
Majorel Italy S.r.l.
Italy
FC
100
100
Majorel Kenia Limited
Kenya
FC
100
100
Majorel Malaysia Sdn. Bhd.
Malaysia
FC
100
100
Majorel Morocco SARL
Morocco
FC
100
100
Majorel Münster GmbH
Germany
FC
100
100
Majorel Nordhorn GmbH
Germany
FC
100
100
Majorel Outsourcing SARL
Morocco
FC
100
100
Majorel Philippines Corp.
Philippines
FC
100
100
Majorel Polska Sp. z o.o.
Poland
FC
100
100
Majorel Portugal, Unipessoal, Lda.
Portugal
FC
100
100
Majorel QA Solutions, S.A.U.
Spain
FC
100
100
Majorel Real Estate GmbH
Germany
FC
100
100
Majorel Rostock I GmbH
Germany
FC
100
100
Majorel Rostock II GmbH
Germany
FC
100
100
Majorel Saarbrücken GmbH
Germany
FC
100
100
Majorel Saudi for Business Services Co. Limited
Saudi Arabia
FC
70
70
Majorel Severna Makedonija Dooel Skopje**
North Macedonia
FC
100
-
Majorel Senegal SUARL
Senegal
FC
100
100
Majorel SP Solutions, S.A.U.
Spain
FC
100
100
Majorel Systems Spain, S.A.U.
Spain
FC
100
100
Majorel Togo SARL
Togo
FC
100
100
Majorel Tria, S.L.U.
Spain
FC
100
100
Majorel UK Limited
Great Britain
FC
100
100
Majorel USA, Inc.
USA
FC
100
100
Majorel Wilhelmshaven GmbH
Germany
FC
100
100
MBD - Majorel Business Developpement SAS
France
FC
100
100
MSE - Majorel Strategie & Expertises SARL
France
FC
100
100
MSE - Majorel Strategy & Expertise SRL
Romania
FC
100
100
Nordcall SARL
France
FC
100
100
Ramyam Intelligence Lab Private Limited
India
FC
100
100
Saubren S.A.**
Uruguay
FC
100
-
Shanghai Bertelsmann Commercial Services Co. Ltd.**
China
FC
100
-
Shanghai Bertelsmann-arvato Information Services Co. Ltd.**
China
FC
100
-
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 93
Shanghai Kaichang information technology Co., Ltd**
China
FC
100
-
Soneo SARL
France
FC
100
100
Tellis Telephone Limousin Services SARL
France
FC
100
100
Twin Trust SARL
Morocco
FC
100
100
Wuxi Kaize Information Technology Services Co. Ltd**
China
FC
100
-
yzee - services SARL
France
FC
100
100
*Merged with Junokai GmbH in October 2021
** Acquired or incorporated in 2021
Foreign Currency Translation
Transactions denominated in a currency other than a subsidiary’s functional currency are recognized in the functional currency at the
exchange rate applicable on the day of their initial accounting. At the end of the reporting period, monetary assets and liabilities
denominated in foreign currency are revalued into the functional currency using the closing rate applicable at that time. As a rule, gains
and losses from these foreign currency translations are recognized in profit or loss. Non-monetary statement of financial position items in
foreign currency are carried at the historical exchange rate.
The financial statements of subsidiaries and associates that were prepared in foreign currencies are translated into euros using the
functional currency concept set out in IAS 21 before they are included in the Consolidated Financial Statements. Assets and liabilities are
translated into the reporting currency at the closing rate at the end of the reporting period, while statement of profit or loss items are
translated at the average rate for the financial year. Foreign currency translation differences are recognized in statement of other
comprehensive income. Such differences arise from translating items in the statement of financial position at a closing rate that differs
from the previous closing rate and from using the average rate for the period and the closing rate at the end of the reporting period to
translate the Group profit or loss. At the time of deconsolidation of Group companies, the respective accumulated exchange differences
recognized in other comprehensive income and accumulated in a separate component of equity are reclassified from equity to profit or
loss. The following euro exchange rates were used for currency translation purposes for the most significant foreign currencies for the
Group.
Euro Exchange Rates for Significant Foreign Currencies
Average rates
Closing rates
Foreign currency unit per €1
2021
2020
12/31/2021
12/31/2020
Moroccan Dirham
MAD
10.6163
10.8371
10.3836
10.9328
Philippine Peso
PHP
58.2972
56.6652
57.7630
59.1250
Polish Zloty
PLN
4.5688
4.4491
4.5969
4.5597
US dollar
USD
1.1827
1.1422
1.1326
1.2271
Yuan Renminbi
CNY
7.6272
7.8809
7.1947
8.0225
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 94
ACCOUNTING AND MEASUREMENT POLICIES
Revenues from contracts with customers
Revenues from contracts with customers are recognized in accordance with IFRS 15. Under this standard, a contract-based five-step
model is used to first identify and distinguish the relevant contracts with customers. In a next step, the separate performance obligations
explicitly or implicitly stipulated in the contract are identified. In Majorel, there are two main categories of revenue namely end-to-end CX
(customer experience) services and content services, trust & safety for Global Internet clients.
End-to end CX services includes customer interaction services, business process services (''BPS'') except Global internet clients and tech
& expert services. In the customer interaction services, typically, there is one integrated performance obligation in form of a stand-ready
obligation; i.e., Majorel stands ready to provide a series of customer experience services, mainly customer interaction and care services
via different mediums like voice, self-service, e-mail, callback or chat over a certain period of time. The volume of work performed are at
the customers discretion. Thus a performance obligation in form of a stand-ready obligation as a series is identified. Subsequently the
transaction price is determined. Usually contracts include a fixed consideration for the stand-ready obligation as well as a variable
consideration, which depends on the number of requests by end-consumers. Revenue recognition occurs upon satisfaction of the
performance obligation generally over time. As the service to stand ready is provided continuously over the contract term to the end
consumers, a fixed consideration is recognized entirely on a linear basis. Basis of revenue recognition for the variable component is the
amount of units of services provided to the end-consumers in a given period, e.g. on a monthly basis. This is because, under the terms of
the contract, the variable payment relates to the amount of customer services provided during a period of time and therefore the variable
consideration is allocated only to the satisfied portion of the performance obligation.
Further, contracts for content services, trust & safety services for Global Internet clients relate to services for social media platforms and
digital retailer in regulating user-generated content and maintaining brand integrity to be safe and compliant with applicable laws and client
policies and contain one performance obligation (a stand ready obligation) and are rendered over a period of time. The contracts could
contain a fixed and a variable consideration. In determining the transaction price, fixed and variable consideration are taken into
consideration by applying the constraint condition. Revenue recognition occurs upon satisfaction of the performance obligation over time
based on the volume of service provided in the period.
IFRS 15 stipulates some practical expedients of which the following are generally applied in the Group:
• The value of consideration is not adjusted for the effects of a material financing component if the financing component pertains to a
period of no more than 12 months.
• For contracts with an original duration of not more than 12 months and for contracts for which revenue can be recognized according
to the amount invoiced for simplification purposes, no disclosure of the aggregated transaction price is provided.
Payments received before satisfaction of the corresponding performance obligation are recognized as contract liability. If contractual
provisions make the invoicing of services completed to date causally dependent on the need to provide further goods or services, a contract
asset is recognized. Receivables from contracts with customers are generally due in less than 12 months.
Goodwill
In accordance with IFRS 3, goodwill resulting from a business combination is initially recognized at acquisition cost, with subsequent
recognition at cost less accumulated impairment losses. Goodwill is allocated to the lowest level at which it is monitored for internal
management purposes. It is subject to impairment testing at least annually in accordance with IAS 36 and is tested for impairment as
outlined in the section “Impairment.”
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 95
Other Intangible Assets
Non-current, internally generated intangible assets are capitalized at cost in accordance with IAS 38 if the corresponding requirements
have been met. Intangible assets acquired separately are carried at acquisition cost less accumulated amortization and accumulated
impairment losses, also in accordance with IAS 38. Intangible assets acquired as part of a business combination are initially recognized
at fair value on the acquisition date in accordance with IFRS 3. Intangible assets with finite useful life are amortized on a straight-line basis
over their estimated useful life. Impairment and reversals are determined by applying the requirements for impairment testing in
accordance with IAS 36. As a rule, capitalized software has a useful life of between three and five years. Acquired customer relationships
are amortized over a period of two to 15 years, while the amortization period for trademarks is three to 25 years. Licenses are amortized
on a straight-line basis over the term of the license agreement. Intangible assets with an indefinite useful life are not amortized. Instead,
they are subject to at least annual impairment testing in accordance with IAS 36 and, if applicable, written down to their recoverable
amount. No significant intangibles with indefinitely useful lives exist.
Property, Plant and Equipment
Items of property, plant and equipment are accounted for in accordance with IAS 16 and carried at cost less accumulated depreciation
and accumulated impairment losses. Depreciation is determined on a straight-line basis over the estimated useful life of the asset. In the
financial year 2021, depreciation was generally based on the following useful lives:
• buildings: ten to 50 years
• technical equipment and machinery: four to 15 years
• other equipment, fixtures, furniture and office equipment: three to 15 years
Land is not subject to depreciation.
Impairment
Goodwill and intangible assets with indefinite useful life are tested for impairment in accordance with IAS 36 annually as of December 31
and if a triggering event occurs. Intangible assets with a finite useful life, property, plant and equipment and right-of-use assets are tested
for impairment at the end of each reporting period in accordance with IAS 36 only if there are any indications of impairment. An impairment
loss in accordance with IAS 36 has occurred when the carrying amount of an asset or cash-generating unit exceeds its recoverable
amount. The recoverable amount is the higher of fair value less costs of disposal and value in use. Fair value less costs of disposal and
value in use are generally determined using the discounted cash flow method, which is based on future cash flow forecasts, which are
part of company forecasts. Corresponding to the consideration of the right-of-use assets recognized in the statement of financial position
for determining the carrying amount, the lease payments are not deducted when determining the recoverable amount. The model also
takes reinvestment requirements in the right-of-use assets into account. In addition, there are effects on the cost of capital as a result of
an IFRS 16-related change in the level of indebtedness of the peer companies used.
For determining the value in use, estimated future cash inflows or outflows from future restructurings or from improvement or enhancement
of the cash-generating units’ performance are excluded unless, as of the end of the reporting period, the cash-generating unit is committed
to the restructuring and related provisions have been made. If an active market exists, the market price or, if applicable, the price in the
most recent comparable transaction, is used for fair value measurement. If there is no active market, the fair value less costs of disposal
is generally calculated using the discounted cash flow method. If it is not possible to allocate cash flows to assets, the relevant impairment
losses are determined on the basis of cash flows attributable to the cash-generating unit to which the assets belong. Projected cash flows
are based on internal estimates for three detailed planning periods. Generally, two further detailed planning periods are applied in addition.
For periods beyond this detailed horizon, a perpetual annuity is recognized, taking into account individual business-specific growth rates.
Discounting is generally based on the weighted average cost of capital (WACC) after tax. Specific WACCs are derived for cash-generating
units with different risk profiles. Majorel performs sensitivity analyses on the cash-generating units, especially on those where the
headroom between the recoverable amount and the carrying amount is low.
If the reasons for an impairment loss recognized in prior periods no longer exist, the impairment loss is reversed up to a maximum of the
carrying amount of the respective asset if the impairment loss had not been recognized. The latter does not apply to goodwill. The
impairment loss and reversals of impairment losses are both recognized immediately in profit or loss.
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 96
Leases
Generally, for all leases with Majorel as a lessee, the related contractual rights and obligations are recognized on the statement of financial
position as a right-of-use asset and a lease liability. On the date of initial accounting, lease liabilities are recognized at the present value
of the outstanding lease payments. The lease payments include fixed payments less any lease incentives due from the lessor, variable
lease payments linked to an index or a rate, amounts expected to be payable under residual value guarantees, the exercise price of a
purchase option if the exercise is reasonably certain and penalty payments for terminating the lease, if the lease term reflects the exercise
of the termination option. Variable lease payments linked to sales are recognized in profit or loss in the period when the conditions for the
payments have been met. The present value is determined using maturity, currency and risk-specific incremental borrowing rates.
Subsequent measurement of a lease liability includes the increase of the carrying amount to reflect interest on the lease liability and
reducing the carrying amount to reflect the lease payments made. Right-of-use assets are measured at cost less any accumulated
depreciation and accumulated impairment losses. Cost comprises the amount of lease liabilities recognized, the initial direct costs and the
lease payments made at or before the commencement date of the lease, less any lease incentives received. The right-of-use asset is
depreciated on a straight-line basis over the shorter of the useful life or lease term. Short-term leases with a lease term of up to one year,
and leases for low-value assets for which Majorel does not recognize right-of-use assets or lease liabilities, constitute an exception. For
such leases, the payments are recognized on a straight-line basis as expenses in the consolidated statement of profit or loss under
“External expenses and costs of materials.”
Financial Assets
In accordance with the IFRS 9 classification and measurement approach for financial assets, there are three classification categories for
financial assets:
• at amortized cost,
• at fair value with changes in fair value through other comprehensive income (FVOCI) and
• at fair value with changes in fair value through profit or loss (FVTPL).
The allocation to the respective classification categories is based on the following criteria:
• the entity’s business model for managing the financial assets and
• contractual cash flow characteristics of the financial asset.
Financial assets (with the exception of trade receivables without a significant financing component) are recognized initially at fair value,
taking into account transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial
assets recognized at fair value through profit or loss are immediately expensed in profit or loss. Trade receivables without a significant
financing component are initially recognized at their transaction price. If not stated otherwise, financial assets and financial liabilities are
recognized as of the settlement date.
Subsequent measurement of financial instruments depends on the classification categories:
• At amortized cost: Financial assets that are held for collection of contractual cash flows where those cash flows represent solely
payments of principal and interest on the principal amount outstanding are measured at amortized cost. This category mainly
comprises trade receivables and other financial receivables. Any gain or loss arising on derecognition and impairment losses are
recognized directly in profit or loss.
• FVOCI: Financial assets that are held for collection of contractual cash flows and for selling, where the assets’ cash flows represent
solely payments of principal and interest on the principal amount outstanding, are measured at fair value with changes in fair value
through other comprehensive income. The Majorel Group held no debt and equity instruments measured at fair value through other
comprehensive income.
• FVTPL: Financial assets that do not meet the criteria for amortized cost or FVOCI are measured at fair value through profit or loss.
Financial assets measured at fair value through profit or loss are also of minor importance for the Group.
Impairment and measurement of expected credit losses:
Majorel applies the expected credit loss (ECL) model in accordance with IFRS 9. Accordingly, the amount of expected credit losses
recognized as a loss allowance depends on the extent to which the default risk has increased since initial recognition.
According to the so-called general approach, a distinction is made between the following two measurement bases:
• 12-month ECL: At initial recognition and if the default risk has not increased significantly from the initial recognition of the debt
instrument, a loss allowance is recognized for expected credit losses within the next 12 months.
• Lifetime ECL: If the default risk has increased significantly, a loss allowance for expected credit losses is recognized for the entire life
of the debt instrument.
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 97
Appropriate quantitative and qualitative information and analyses based on the experience of the Majorel Group and additionally,
reasonable assessments including forward-looking information such as customer-specific information and forecasts of future economic
conditions are taken into consideration when determining the credit risk. When a financial asset is more than 30 days past due, its credit
risk is assumed to have increased significantly. A default of a financial asset is assumed at the latest when the counterparty fails to make
contractual payments within 90 days of when they fall due, unless reasonable and supportable information is available that justifies a
different time of overdue payment. The Group assesses whether a financial asset is credit-impaired at the end of each reporting period.
This is the case when one or more events that have a detrimental impact on the expected future cash flows of that financial asset have
occurred. A financial asset is written off when it is no longer reasonably expected to be fully or partially recoverable.
For trade receivables and contract assets, Majorel uses a simplified approach to measure expected credit losses. According to this, the
loss allowance is measured using lifetime expected credit losses and is a probability-weighted estimate of credit losses. For this purpose,
impairment matrices based on historical bad debt losses, maturity bands and expected credit losses are prepared. The impairment
matrices are created for business unit-specific groups of receivables, each with similar default patterns. For each business unit-specific
groups, expected credit loss rates are calculated for each maturity bands based on historical credit loss experience and forward-looking
information. In addition, separate risk assessments are performed. Contract assets have substantially the same risk characteristics as
trade receivables for the same types of contracts, so the expected loss rates for trade receivables are a reasonable approximation of the
loss rates for contract assets.
Measurement at Fair Value
In the case of financial assets and financial liabilities measured at fair value, the valuation technique applied depends on the respective
inputs present in each case. If listed prices can be identified for identical assets on active markets, they are used for measurement (level 1).
If this is not possible, the fair values of comparable market transactions are applied, and financial methods that are based on observable
market data are used. The Group uses valuation techniques that maximise the use of relevant observable inputs and minimise the use of
unobservable inputs. The chosen valuation technique incorporates all of the factors that market participants would take into account in
pricing a transaction. (level 2). If the fair values are not based on observable market data, they are identified using established financial
methods or on the basis of observable prices obtained as part of the most recently implemented qualified financing rounds, taking into
account the life and developmental cycle of the respective entity (level 3).
Inventories
Inventories are of minor relevance for the Majorel Group and mainly contain raw material and supplies. Inventories are measured at the
lower of cost and net realisable value.
Income Taxes
In accordance with IAS 12, income taxes include both current taxes on income and deferred taxes. Current income taxes are calculated
on the taxable income of the financial year and on all adjustments to taxable income of previous financial years, taking into account the
tax rates applicable in each case. For the calculation of current and deferred taxes, the applicable tax laws and tax jurisdictions of the
respective country in which the consolidated Group companies are registered are considered.
In accordance with IAS 12, deferred tax assets and liabilities are recognized for temporary differences between the tax base and the
carrying amounts shown on the IFRS consolidated statement of financial position, and for as yet unused tax loss carryforwards and tax
credits. Deferred tax assets are reviewed at each statement of financial position date and recognized to the extent it is probable that
taxable income will be available against which the deductible temporary differences, tax loss carryforwards and tax credits can be utilized.
Deferred tax assets that are unlikely to be realized within a clearly predictable period are reduced by valuation allowances. Deferred tax
liabilities are generally recognized for all taxable temporary differences.
Deferred taxes are not recognized for:
• temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination and
that affects neither earnings before taxes nor taxable income
• temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements to the extent that
the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not be reversed in
the foreseeable future
• taxable temporary differences on initial recognition of goodwill.
The tax rates applied for computation are those expected as of the date of reversal of temporary differences and use of tax loss
carryforwards or tax credits, respectively. As a rule, current and deferred taxes are recognized in profit or loss unless they relate to items
recognized in other comprehensive income. In this case, current and deferred taxes are recognized in other comprehensive income.
Current and deferred income tax items are offset if there is a legally enforceable right to set off current tax assets against current tax
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 98
liabilities and the tax assets and tax liabilities relate to income taxes levied by the same taxation authority.
Accumulated Other Comprehensive Income
Accumulated other comprehensive income includes net exchange differences. In addition, in accordance with IAS 28.10, changes in other
comprehensive income for entities accounted for using the equity method are recognized. Remeasurement effects of defined benefit
pension plans (actuarial gains and losses on the defined benefit obligation, differences between actual investment returns and the returns
implied by the net interest cost on the plan assets, and effects of the asset ceiling) are recognized in the other retained earnings in the
year in which these gains and losses are incurred as part of the reconciliation of total comprehensive income for the period in the statement
of changes in equity. Deferred taxes on the aforementioned items are also recognized in consistent way with the accounting for the related
transaction or event.
Provisions
Provisions for pensions and similar obligations are calculated using the projected unit credit method in accordance with IAS 19. The net
interest expense included in pension expense is recognized in the financial result. Remeasurement effects of defined benefit pension
plans (actuarial gains and losses on the defined benefit obligation, differences between actual investment returns and the returns implied
by the net interest cost on the plan assets, and effects of the asset ceiling) are recognized immediately in equity under other comprehensive
income and are not reclassified to profit or loss in a subsequent period (recycled). With the exception of the other personnel-related
provisions calculated in accordance with IAS 19, all other provisions are recognized in accordance with IAS 37. Provisions are measured
in the amount of the most likely outcome. Non-current provisions are discounted. The discount rates take into account current market
expectations and, if necessary, specific risks for the liability. As a rule, income from the reversal of provisions is generally included in the
statement of profit or loss line item to which the provision was previously charged.
Financial Liabilities
Trade payables and other primary financial liabilities are initially measured at their fair value less transaction costs. Subsequent
measurement is based on amortized cost using the effective interest method. The Group derecognises a financial liability when its
contractual obligations are discharged or cancelled, or expire. The Group also derecognises a financial liability when its terms are modified
and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is
recognised at fair value. On derecognition of a financial liability, the difference between the carrying amount extinguished and the
consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.
Derivative Financial Instruments
As set out in IFRS 9, all derivative financial instruments are recognized at fair value on the consolidated statement of financial position.
Derivative financial instruments are recognized as of the transaction date. Some derivatives do not meet the requirements included in
IFRS 9 for recognition as hedges, despite this being their economic purpose (stand-alone hedge). Changes in the fair value of derivatives
that do not meet the criteria for recognition as hedges are recognized in profit or loss. In the financial years 2021 and 2020, no hedge
transactions were recognized with fair value hedges and cash flow hedges. Likewise, no hedge of net investment in foreign operations
was made.
Earnings per Share
Basic earnings per share (EPS) is calculated by dividing the net profit attributable to shareholders by the weighted average number of
ordinary shares in issue during the year, excluding ordinary shares purchased by the Group and held as treasury shares and the shares
held under the liquidity program, if any. The diluted earnings per share is calculated by adjusting the weighted average number of ordinary
shares outstanding to assume conversion of all dilutive potential ordinary shares. There is currently no category of dilutive potential ordinary
shares.
Significant Accounting Judgments, Estimates and Assumptions
The preparation of the Consolidated Financial Statements requires the use of accounting judgments, estimates and assumptions that may
impact the carrying amounts of assets, liabilities, income and expenses recognized. Amounts actually realized may differ from estimated
amounts. The following section presents accounting judgments, estimates and assumptions that are material in the Majorel Consolidated
Financial Statements for understanding the uncertainties associated with financial reporting.
• Recognition of income and expense: The transaction prices to be determined using the contract-based five-step model defined in
IFRS 15 often include both fixed and variable consideration. The variable components are determined on the basis of estimates, which
are made and updated in accordance with constraint conditions.
• Trade and other receivables: Calculation of loss allowance for accounts receivable is based on historical credit loss rates for groups of
financial assets with similar credit risk characteristics and on forward-looking information, including customer-specific information and
forecasts of future economic conditions.
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 99
• Impairment: The management’s estimates of cash flow, on which impairment tests are based, are based on factors including assumptions
of economic trends and the associated risks, the regulatory environment, the competitive environment, market share, investments,
EBITDA margins and growth rates. A combination of long-term trends, industry forecasts and in-house knowledge, with special emphasis
on recent experience, is used in forming the assumptions about the development of the various relevant markets in which Majorel
operates. The relevant markets are an area highly exposed to the general economic conditions. The development of the relevant markets
is just one of the key operational drivers Majorel uses when assessing individual business models. The most important assumptions
include estimated growth rates, the weighted average cost of capital and tax rates. All these different elements are variable, interrelated
and difficult to isolate as the main driver of the various business models and respective valuations. Changes to these estimates as a
result of more recent information could have a material impact on the amount of the possible impairment. The growth rates applied are
based on long-term real growth rates for the relevant economies, growth expectations for the relevant sectors and long-term inflation
forecasts for the countries in which the cash-generating units operate. The values allocated to the key assumptions are in line with
external sources of information. The figures obtained using the respective discount rates reflect the recoverable amount of the cash-
generating units. Material changes in the market or competitive environment may impair the value of cash-generating units. Details on
impairment testing for intangible assets (including goodwill) in the Group are presented in note 10 “Goodwill and Other Intangible Assets”.
• Pension obligations: Pension obligations are measured using the projected unit credit method. Using this approach, biometric
calculations, the prevailing long-term capital market interest rates and, in particular, assumptions about future salary and pension
increases are taken into account. Details on the assumptions made in pension accounting are presented in note 18 “Provisions for
Pensions and Similar Obligations.”
• Provisions for onerous contracts are also based to a significant extent on management estimates with regard to their amount.
Assessments of whether there is a present obligation, whether an outflow of resources is probable and whether it is possible to reliably
determine the amount of the obligation are generally based on the expertise of in-house or third-party specialists. More recent information
could change the estimates and thus impact the Group’s financial position and financial performance. With regard to risk provisioning, a
provision for potential losses from litigation is recognized when the risks of a loss are considered probable and when a reliable estimate
of the anticipated financial impact is possible. For significant contingent liabilities for which the possibility of a future loss is more than
remote but less than probable, Majorel estimates the possible loss where the Group believes that an estimate can be made. Contingent
liabilities from litigation that were of subordinate significance from a Group perspective existed at the end of the reporting period.
Management regularly reviews the recognition, measurement and use of provisions along with the disclosure requirements for contingent
liabilities.
• Leases: Some real estate lease contracts include extension or termination options. Payments from these optional periods are included
in the lease liability, provided it is reasonably certain that the lease will be extended beyond the non-cancellable lease period or that a
termination option will not be exercised. In assessing whether an option to extend or terminate will be exercised, management considers
all facts and circumstances for the respective lease object that are associated with an economic incentive to exercise the extension
option or not to exercise the termination option. These include, in particular, the amount of lease payments compared to market prices
in the optional period, completed or expected leasehold improvements, and the importance of the underlying asset to Majorel's
operations. The assessment is carried out individually on a lease-by-lease basis.
In the case of purchase price allocations, assumptions are also made regarding the measurement of assets and liabilities assumed as
part of business combinations. This applies in particular with regard to the acquired intangible assets, as measurements are based on fair
value. As a rule, this is the present value of the future cash flows after taking into account the present value of the tax amortization benefit.
In addition, the definition of uniform useful lives within the Group is based on management’s assumptions. General information on useful
lives is presented in the sections “Other Intangible Assets” and “Property, Plant and Equipment”.
The activities of the Group companies are subject to the respective applicable tax laws and pronouncements. Assumptions and estimates
also form the basis for judgments regarding the ability to realize uncertain tax positions and future tax benefits that may arise from the
interpretation of tax regulations. Recognition of an asset or liability from an uncertain tax position is performed in accordance with IAS 12
if payment or refund in respect of the legal uncertainty is probable. Measurement of the uncertain tax assets and tax liabilities is at its most
likely amount in accordance with IFRIC 23. Deferred tax assets are only carried to the extent that it is probable that they can be utilized
against future taxable profits. When assessing the probability of the ability to use deferred tax assets in the future, various factors are
taken into account, including past earnings, company forecasts, tax planning strategies and loss carryforward periods.
Estimates and the underlying assumptions are reviewed on an ongoing basis. As a rule, adjustments to estimates are taken into account
in the period in which the change is made and in future periods.
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 100
Notes to the consolidated statement of profit or loss and the consolidated statement of financial position
1 Revenues
In the financial year 2021, Group revenues of €1,811 million (previous year: €1,375 million) were generated from contracts with customers
in accordance with IFRS 15 and primarily relate to the end-to-end CX services and content services, trust &safety. The following table
shows the revenues from contracts with customers in accordance with IFRS 15 by segment and broken down by revenue source and
timing of revenue recognition. Following the acquisition of Chinese companies in January 2021, from the beginning of 2021, segment
reporting consists of three reportable operating segments. Minor activities presented as ”other“ in the tabular segment information are
excluded (further information is presented in note 27 “Segment Reporting”).
Revenue from Contracts with Customers
2021
in € millions
Europe, Africa, South
America
Global English, Middle
East, Southeast Asia
China, East Asia
Total segments
Revenue Sources
End-to-end CX services
1,112
215
111
1,438
Content services, trust & safety
316
54
-
370
Other
-
-
1
1
1,428
269
112
1,809
Timing
Point in time
-
1
1
2
Over time
1,428
268
111
1,807
1,428
269
112
1,809
2020
in € millions
Europe, Africa, South
America
Global English, Middle
East, Southeast Asia
China, East Asia
Total segments
Revenue Sources
End-to-end CX services
948
193
n/a
1,141
Content services, trust & safety
184
46
n/a
230
Other
-
-
n/a
-
1,132
239
n/a
1,371
Timing
Point in time
-
-
n/a
-
Over time
1,132
239
n/a
1,371
1,132
239
n/a
1,371
During the reporting period, the revenues from contracts with customers presented in the table above resulted from performance
obligations fulfilled at a certain point in time of €2 million (previous year: €nil million) and from performance obligations fulfilled over a
certain period of time in the amount of €1,807 million (previous year: €1,371 million). If revenue is recognized at a point in time, the
respective timing of revenue recognition is determined by the contractually agreed terms of sale. As in the previous year, no revenues
result from performance obligations already satisfied in previous periods. Majorel makes use of practical expedients set out in IFRS 15
and does not disclose any unsatisfied performance obligations for contracts with an original duration of no more than 12 months or for
contracts for which revenue can be recognized according to the amount invoiced for simplification purposes. As of December 31, 2021,
Majorel expects future revenues from existing long-term service level agreements of €32 million (previous year: €9 million), which will be
attributable to unsatisfied (or partially unsatisfied) performance obligations as of the statement of financial position date and is expected
to be recognized in the amount of €7 million (previous year: €7 million) in the next financial year and in the amount of €25 million (previous
year: €2 million) in the following years.
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 101
2 Other Operating Income
in € millions
2021
2020
Income from reimbursements
13
5
Income from sideline operations
1
1
Foreign exchange gains
1
-
Sundry operating income
22
14
37
20
In 2021, sundry operating income consists mainly of gains from disposal of tangible assets and reversal of provisions.
3 External Expenses and Costs of Materials
in € millions
2021
2020
Cost of services purchased
204
136
Other cost of material
5
11
Rental and lease expenses
16
14
Repairs and maintenance expenses
9
8
IT external expenses
65
36
Other administration expenses
74
65
Advertising costs
1
1
Audit, legal and consulting fees
18
13
Operating taxes
10
6
Foreign exchange losses
-
1
Losses on disposal of non-current assets
3
2
Other sundry operating expenses
18
15
423
308
In the financial years 2021 and 2020, no write-downs on and no reversals of write-downs on inventories were recognized. As of
December 31, 2021, and as of December 31, 2020, no inventories were subject to restrictions on disposal. During 2021, cost of services
purchased increased significantly due to newly acquired Chinese entities (€28 million) and organic growth of the Group. Expenses for raw
materials and supplies amounting to €-4 million (previous year: €-6 million) were recognized, and the cost for merchandise amounted to
€-2 million (previous year: €-6 million). Changes in inventories of work in progress and finished goods and own costs capitalized amounted
to below €1 million (previous year: €1 million).
The line item “Audit, legal and consulting fees” includes fees related to KPMG. The audit fees of the Group’s approved audit firm and the
audit firm’s network are described below:
in € millions
2021
2020
Audit services pursuant to legislation
2
1
Audit-related services
1)
-
-
Non-audit services
1
-
Total
3
1
1) Audit-related services amounted to €0.4 million for 2021 (previous year: €nil million).
During year 2021, out of the above fees related to audit services pursuant to legislation of €0.5 million (previous year: €0.2 million) and
non-audit services of €1 million (previous year: below €1 million) was related to KPMG Luxembourg S.A..
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 102
4 Personnel Costs
in € millions
2021
2020
Wages and salaries
1,019
731
Statutory social security contributions
179
134
Expenses for pensions and similar obligations
5
5
Profit sharing
2
1
Other employee benefits
31
23
1,236
894
The contributions paid by the employer to state pension plans amounted to €99 million in the financial year 2021 (previous year:
€62 million).
Upon completion of the initial public offering, the members of Management Board and other managers received IPO bonus with equity
deferral (''IPO bonus'') reflected in wages and salaries of €120 million with additional statutory social security of €8 million. Those members
were required to invest 25% of the gross amount of IPO bonus in Majorel Group’s shares.
5 Amortization/Depreciation, Impairment and Reversals on Intangible Assets and Property, Plant and
Equipment and Right-of-Use Assets
in € millions
2021
2020
Amortization/depreciation, impairment and reversals on
– intangible assets
5
3
– property, plant and equipment and right-of-use assets
80
74
85
77
Further details on amortization/depreciation, impairment and reversals shown are presented in note 10 “Goodwill and Other Intangible
Assets” and note 11 “Property, Plant and Equipment and Right-of-Use Assets.”
6 Interest Income and Expenses
Interest income
in € millions
2021
2020
Other interest income
1
-
1
-
Interest Expenses
in € millions
2021
2020
Interest expenses on financial debt
2
1
Other interest expenses
1
1
3
2
7 Other Financial Income and Expenses
Other financial Income
in € millions
2021
2020
Non-operating foreign exchange gains
2
-
Sundry financial income
-
-
2
-
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 103
Other financial Expenses
in € millions
2021
2020
Net interest on defined benefit plans
-
1
Interest expenses on lease liabilities
4
3
Non-operating foreign exchange losses
-
3
Sundry financial expenses
1
-
5
7
8 Income Taxes
Income taxes, broken down into current and deferred income taxes, are as follows:
Income Taxes
in € millions
2021
2020
Earnings before income taxes
100
107
Current income taxes
(39)
(26)
Deferred income taxes
19
5
Income taxes
(20)
(21)
Net income after income taxes
80
86
The amount of the tax benefit arising from a previously unrecognized tax loss that is used to reduce current tax expense amounts to €2
million (previous year: €4 million). The recognition of deductible temporary differences led to a reduction in deferred tax expense of €2
million (previous year: €7 million). There was no deferred tax expense arising from a write-down of a deferred tax asset (previous year: €3
million).
Deferred tax assets and liabilities resulted from the following items and factors:
Deferred taxes
12/31/2021
12/31/2020
in € millions
Assets
Liabilities
Recognized in
profit or loss
in the
financial year
Assets
Liabilities
Recognized in
profit or loss
in the
financial year
Other intangible assets
-
3
-
–
–
–
Property, plant and equipment and right-of-use assets
3
16
(3)
4
12
4
Other financial assets
-
-
-
1
–
–
Trade and other receivables
1
-
-
1
–
–
Provisions for pensions and similar obligations
20
12
(1)
11
6
1
Other provisions
13
3
6
7
4
1
Lease liabilities
15
-
3
11
2
(4)
Trade and other payables
1
1
-
1
1
–
Other non-financial liabilities
-
-
-
–
–
1
Loss carryforwards/tax credits
18
14
4
2
Total
71
35
19
40
25
5
Offset
(33)
(33)
(25)
(25)
Carrying amount
38
2
15
–
The item “Property, plant and equipment and right-of-use assets” includes deferred tax assets of €1 million (previous year: €2 million) and
deferred tax liabilities of €15 million (previous year: €11 million) in connection with right-of-use assets in accordance with IFRS 16. No
deferred tax liabilities were recognized for temporary differences in connection with investments in subsidiaries in the amount of €74 million
(previous year: €59 million) as Majorel can control their reversal, and it is probable that these temporary differences will not be reversed
in the foreseeable future. Current and deferred tax assets and liabilities are offset against each other if they relate to the same tax authority
and meet the criteria for offsetting. The term of the deferred taxes on temporary differences is mostly long-term.
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 104
Deferred tax assets in other comprehensive income amounting to €3 million relates to provisions for pensions and similar obligations
(previous year: €2 million).
Valuation allowances for deferred tax assets are recognized on temporary differences and tax loss carryforwards when it is unlikely that
they can be utilized in the foreseeable future. The need to recognize valuation allowances is assessed primarily based on existing deferred
tax liabilities from temporary differences and projected taxable income within a planning period.
Temporary differences and tax loss carryforwards for which no deferred taxes have been recognized can be carried forward as follows:
Expiration
in € millions
12/31/2021
12/31/2020
Temporary differences (unlimited carryforward period)
14
38
Tax loss carryforwards
Unlimited carryforward period
46
40
To be carried forward for more than 5 years
-
10
To be carried forward for up to 5 years
8
4
A reconciliation of expected tax result to actual tax result is shown in the following table:
Reconciliation to Actual Tax Expense
in € millions
2021
2020
Earnings before income taxes
100
107
Income tax rate applicable to Majorel Group
24.94%
24.94%
Expected tax expense
(25)
(27)
The tax effects of the following items led to differences between the expected and actual tax expense:
Adjustment to different national tax rates
11
3
Current income taxes for previous years
(2)
2
Deferred income taxes for previous years
(1)
(1)
Effects of measurements of deferred tax assets
1
5
Permanent differences
(2)
(1)
Other adjustments
(2)
(2)
Total of adjustments
5
6
Actual tax expense
(20)
(21)
The positive effects from tax rate differences mainly result from the Group companies in Morocco, in the Philippines and in Georgia.
The effective tax rate of 24.94 percent is based on the statutory tax rate of the Group parent entity Majorel Luxembourg Group S.A. In
addition, the Group operates mainly in Germany with a tax rate of 31.10 percent, in France with a tax rate of 28 percent, in Morocco with
a tax rate of 20 percent, in the Philippines with a tax rate of 5 percent and in Georgia with a tax rate of 15 percent.
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 105
9 Earnings per Share
By resolution of the Company’s shareholders’ meeting held on September 6, 2021, the Company’s share capital was increased from the
Company’s own resources by €596,000 from €404,000 to €1,000,000 and the value of the Company’s shares was changed from a nominal
value of € 1 (one Euro) to an accounting par value of €0.01 (one Eurocent) so that following the capital increase and the change in the
share value the Company’s share capital amounts to €1,000,000, represented by 100,000,000 Shares with an accounting par value of
€0.01 (one Eurocent) each (further information is presented in note 17 “Equity”).
The calculation of basic earnings per share is based on the profit attributable to Majorel Group shareholders of €80 million (previous year:
€86 million) and a weighted average number of ordinary shares outstanding during the year of 100,000,000 (previous year retrospectively
adjusted for share split: 100,000,000), calculated as follows:
2021
2020
Profit attributable to Majorel Group shareholders (in € million)
80
86
Weighted average number of ordinary shares
100,000,000
100,000,000
Basic earnings per share (in €)
0.80
0.86
Diluted earnings per share (in €)
0.80
0.86
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 106
10 Goodwill and Other Intangible Assets
Other intangible assets
in € millions
Goodwill
Other rights and licenses
Internally
generated
intangible
assets
Advance
payments
Total
Total
Cost
Balance as of 1/1/2020
53
48
1
-
49
102
Exchange differences
(1)
(1)
1
-
-
(1)
Acquisitions through business combinations
1
1
-
-
1
2
Other additions
-
3
-
1
4
4
Other disposals
-
(3)
-
-
(3)
(3)
Reclassifications and other changes
-
-
-
-
-
-
Balance as of 12/31/2020
53
48
2
1
51
104
Exchange differences
6
2
-
-
2
8
Acquisitions through business combinations
35
14
-
-
14
49
Other additions
-
4
-
-
4
4
Other disposals
-
(4)
-
-
(4)
(4)
Reclassifications and other changes
-
-
1
(1)
-
-
Balance as of 12/31/2021
94
64
3
-
67
161
Accumulated amortization
Balance as of 1/1/2020
-
42
1
-
43
43
Exchange differences
-
-
-
-
-
-
Amortization
-
3
-
-
3
3
Impairment losses
-
-
-
-
-
-
Reversals of impairment losses
-
-
-
-
-
-
Other disposals
-
(3)
-
-
(3)
(3)
Reclassifications and other changes
-
-
-
-
-
-
Balance as of 12/31/2020
-
42
1
-
43
43
Exchange differences
-
1
-
-
1
1
Amortization
-
5
-
-
5
5
Impairment losses
-
-
-
-
-
-
Reversals of impairment losses
-
-
-
-
-
-
Other disposals
-
(2)
-
-
(2)
(2)
Reclassifications and other changes
-
-
-
-
-
-
Balance as of 12/31/2021
-
46
1
-
47
47
Carrying amount as of 12/31/2021
94
18
2
-
20
114
Carrying amount as of 12/31/2020
53
6
1
1
8
61
Other rights and licenses include trademarks and acquired customer relationships along with acquired software and other licenses.
Internally generated intangible assets mostly include internally generated software. As in the previous year, no intangible assets were
subject to restrictions on disposal at the end of the reporting period.
Majorel defined its reporting structure and established the composition of its cash-generating units to which goodwill has been allocated,
on the basis of the main geographical areas. Goodwill is attributable to the following cash-generating units:
Goodwill by Cash-Generating Units
in € millions
12/31/2021
12/31/2020
France, Netherlands & Western Africa
47
45
Germany & Eastern Europe
4
2
Iberia, Italy & Latin America
-
-
North America, UK, India, Kenya, Ireland & Southeast Asia
1
-
Egypt, Middle East & East Africa
6
6
China and East Asia
36
-
94
53
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 107
For the purpose of impairment testing in accordance with IAS 36, goodwill from a business combination is allocated to the cash-generating
units that are expected to benefit from the synergies of the business combination.
The recoverable amount equals the fair value, which is derived from discounted cash flows less costs of disposal and which is based on
level 3 of the fair value hierarchy. Projected cash flows were based on internal estimates for three detailed planning periods and, as a rule,
two further detailed planning periods were applied. For periods after this detailed horizon, a perpetual annuity was applied, taking into
account individual business-specific growth rates. The most important assumptions include estimated growth rates and the weighted
average cost of capital. The growth rates applied are based on long-term inflation forecasts for the countries in which the cash-generating
units operate. The weighted average cost of capital of the cash-generating unit is defined as the weighted average of the cost of equity
and the cost of debt of the cash-generating unit. The values allocated to the key assumptions are in line with prior year information and
external sources of information.
The cash flow forecasts underlying the impairment testing of the individual cash-generating units bearing material goodwill are based on
the following assumptions relating to the market development for the beginning of the detailed planning period:
The revenue forecasts for 2022 underlying the impairment testing of the individual cash-generating units show two digit growth rates for
the CGU North America, UK, India, Kenya, Ireland & Southeast Asia, the CGU Iberia, Italy & Latin America, the CGU Egypt, Middle East
& East Africa and the CGU China and East Asia, while the assumptions with regards to revenue development of the remaining CGU are
less dynamic. In addition, fair values based on discounted cash flows were measured using the following individual business-specific
growth rates and discount rates for periods after the detailed planning period:
Overview of Growth and Discount Rates
Growth rate in % for the year
Discount rate in % for the year
in € millions
12/31/2021
12/31/2020
12/31/2021
12/31/2020
France, Netherlands & Western Africa
1.6
1.4
10.9
10.4
Germany & Eastern Europe
4.4
2.1
11.1
10.6
Iberia, Italy & Latin America
2.7
2.0
11.1
10.4
North America,UK, India, Kenya, Ireland & Southeast Asia
3.1
2.6
11.5
10.7
Egypt, Middle East & East Africa
5.3
5.2
16.5
16.0
China and East Asia
2.2
n/a
10.2
n/a
In the financial year 2021, no impairment losses on goodwill were recognized. For all cash-generating units goodwill was not subject to
impairment even given the change by one of the two most important factors: discount rate (increase of 1.0 percentage point) and long-
term growth rate (decrease of 1.0 percentage point). Any reasonable change on the discount rate and long-term growth rate will not result
in an impairment.
11 Property, Plant and Equipment and Right-of-Use Assets
The financial position item “Property, plant and equipment and right-of-use assets” comprises property, plant and equipment owned by
Majorel and right-of-use assets from leased property, plant and equipment.
Property, Plant and Equipment and Right-of-Use Assets
in € millions
2021
2020
Owned property, plant and equipment
129
102
Right-of-use assets from leased property, plant and equipment
116
88
245
190
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 108
Property, Plant and Equipment
in € millions
Land and buildings
Technical
equipment and
machinery
Other equipment,
fixtures, furniture
and office
equipment
Advance payments
and construction in
progress
Total
Cost
Balance as of 1/1/2020
37
31
236
2
306
Exchange differences
-
(2)
(6)
(1)
(9)
Other additions
1
-
31
11
43
Reductions through disposal of investments
-
-
(8)
-
(8)
Other disposals
-
(2)
(17)
-
(19)
Reclassifications and other changes
(1)
1
4
(5)
(1)
Balance as of 12/31/2020
37
28
240
7
312
Exchange differences
1
1
6
1
9
Other additions
3
1
43
14
61
Reductions through disposal of investments
-
-
-
-
-
Other disposals
(4)
(10)
(14)
(3)
(31)
Reclassifications and other changes
25
(2)
(17)
(10)
(4)
Balance as of 12/31/2021
62
18
258
9
347
Accumulated depreciation
Balance as of 1/1/2020
14
29
168
-
211
Exchange differences
-
(2)
(3)
-
(5)
Depreciation
2
1
26
-
29
Impairment losses
-
-
1
-
1
Reversals of impairment losses
-
-
-
-
-
Reductions through disposal of investments
-
-
(7)
-
(7)
Other disposals
-
(2)
(15)
-
(17)
Reclassifications and other changes
(1)
-
(1)
-
(2)
Balance as of 12/31/2020
15
26
169
-
210
Exchange differences
-
1
3
-
4
Depreciation
4
1
29
-
34
Impairment losses
-
-
1
-
1
Reversals of impairment losses
-
-
-
-
-
Reductions through disposal of investments
-
-
-
-
-
Other disposals
(4)
(10)
(15)
-
(29)
Reclassifications and other changes
13
(2)
(13)
-
(2)
Balance as of 12/31/2021
28
16
174
-
218
Carrying amount as of 12/31/2021
34
2
84
9
129
Carrying amount as of 12/31/2020
22
2
71
7
102
The position “Other equipment, fixtures, furniture and office equipment” mainly includes IT equipment used to provide customer experience
services. During 2021, €4 million costs of ‘Other equipment, fixtures, furniture and office equipment’ included in ‘Other additions’ raised
from business acquisitions (previous year: €nil million). As of December 31, 2021, no property, plant and equipment were subject to
restrictions on disposal (December 31, 2020: €1 million). Impairment losses totaling €1 million were recognized for property, plant and
equipment in the financial year 2021 (previous year: €1 million).
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 109
Right-of-Use Assets
The vast majority of leases within the Majorel Group concern rental properties. In addition, leases also exist for technical equipment and
machinery, vehicles and other fixtures, and furniture and office equipment. The existing lease contracts have different terms and a number
of property leases include extension or termination options, in order to maximize operational flexibility in terms of managing the assets
used in the Group’s operations. Details on the corresponding lease liabilities are presented in note 21 “Lease Liabilities”.
The following table shows depreciation and impairment, additions and other changes to the right-of-use assets in the financial year as well
as the carrying amounts of the right-of-use assets from leased property, plant and equipment at the end of the reporting period.
Change in Right-of-Use Assets
in € millions
Land and buildings
Technical equipment
and machinery
Other equipment,
fixtures, furniture and
office equipment
Total
Carrying amount of leased property, plant and equipment
as of 1/1/2020
80
1
1
82
Additions
48
-
3
51
Depreciation and impairment
(43)
-
(1)
(44)
Other changes
(1)
-
-
(1)
Carrying amount of leased property, plant and equipment
as of 12/31/2020
84
1
3
88
Carrying amount of leased property, plant and equipment
as of 1/1/2021
84
1
3
88
Additions
42
-
2
44
Depreciation and impairment
(43)
-
(2)
(45)
Other changes
29
-
-
29
Carrying amount of leased property, plant and equipment
as of 12/31/2021
112
1
3
116
During 2021, right-of-use assets for land and buildings amounting to €12 million which were included in ‘Additions’ raised from business
acquisitions (previous year: €nil million).
12 Interests in Other Entities
As of December 31, 2021, Majorel holds an investment in 1 (December 31, 2020: 1) associate (Ecco Gulf WLL, Qatar).
The following table shows summarized financial information on this associate. The information given represents Majorel´s interest.
Financial Information on the Associate
in € millions
2021
2020
Earnings after taxes from continuing operations
1
1
Other comprehensive income
-
-
Total comprehensive income
1
1
At the end of the reporting period, the total carrying amount of the investment in this associate amounts to €3 million (December 31, 2020:
€2 million).
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 110
13 Other Financial Assets
Current
Non-current
in € millions
12/31/2021
12/31/2020
12/31/2021
12/31/2020
Loans
6
1
-
-
Financial assets recognized at fair value
5
-
-
-
11
1
-
-
The “Financial assets recognized at fair value” amounting to €5 million relates to a highly liquid investment fund acquired in 2021. As of
December 31, 2021, the "Loans" of €6 million contains the outstanding loans provided to members of Management Board for the purchase
of Majorel Group’s shares.
As in the previous year, no other financial assets were subject to restrictions on disposal as of the end of the reporting period.
14 Trade and Other Receivables
in € millions
12/31/2021
12/31/2020
Non-current
1
1
Other receivables
1
1
Current
467
307
Trade receivables
388
291
Contract assets
-
1
Other receivables
79
15
Trade receivables are due for payment generally within 12 months. The item “Contract assets” covers the conditional right to consideration
for satisfied performance obligations in accordance with IFRS 15. As of December 31, 2021, trade and other receivables totaling €6 million
were subject to restrictions on disposals (December 31, 2020: €3 million). The "Other receivables" contains €58 million of prepaid
consideration for business acquisition of Mayen Telekomünikasyon Hizmetleri A.Ş. (further information is presented in note 29 “Events
after the Reporting Period”).
15 Other Non-Financial Assets
in € millions
12/31/2021
12/31/2020
Non-current
Other non-financial assets
-
2
Current
Other non-financial assets
68
56
– advance payments
3
3
– deferred items
15
12
– other tax receivables
35
23
– sundry non-financial assets
15
18
16 Cash and Cash Equivalents
in € millions
12/31/2021
12/31/2020
Bank balances and cash on hand
231
182
Cash equivalents
7
13
238
195
Cash equivalents include short-term, highly liquid securities with a term to maturity on acquisition of not more than three months. As at 31
December 2021, cash and cash equivalents totaling to €3 million were restricted (previous year: €nil million).
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 111
17 Equity
By resolution of the Company’s shareholders’ meeting held on September 6, 2021, the Company’s share capital was increased from the
Company’s share premium by €596,000 from €404,000 to €1,000,000 and the value of the Company’s shares was changed from a nominal
value of € 1 (one Euro) to an accounting par value of €0.01 (one Eurocent) so that following the capital increase and the change in the
share value the Company’s share capital amounts to €1,000,000, represented by 100,000,000 shares with an accounting par value of
€0.01 (one Eurocent) each.
In addition, the extraordinary shareholder meeting resolved to introduce an authorised share capital clause in the articles of the Company
and to authorise the management board, for a period of five years as from the date of the publication of the resolution and subject to the
prior consent of the Supervisory Board, to increase the issued share capital on one or more occasions up to an aggregate amount of
€3,000,000, with or without the issue of up to 200,000,000 new shares having an accounting par value of €0.01 each, as well as the same
rights as the existing issued shares.
Number of shares issued
12/31/2021
12/31/2020
Ordinary shares in issue at January 1st
404,000
404,000
Share split
39,996,000
-
Shares issued in year
59,600,000
-
100,000,000
404,000
On June 24, 2021 the general meeting of shareholders resolved to declare and pay a dividend of €19 million exclusively to the shareholder
Bertelsmann Luxembourg S.à r.l..
The change in other comprehensive income after taxes is derived as follows:
Changes to Components of Other Comprehensive Income after Taxes
in € millions
2021
Before-tax
amount
Taxes
Net-of-tax
amount
Attributable to
Majorel
shareholders
Attributable to
non-controlling
interests
Items that will not be reclassified subsequently to profit or loss
Remeasurement component of defined benefit plans
6
3
9
9
-
Changes in fair value of equity instruments
-
-
-
-
-
Share of other comprehensive income of investments accounted for using
the equity method
-
-
-
-
-
Items that will be reclassified subsequently to profit or loss when
specific conditions are met
Exchange differences
12
-
12
12
-
Cash flow hedges
-
-
-
-
-
Share of other comprehensive income of investments accounted for using
the equity method
-
-
-
-
-
Other comprehensive income net of tax
18
3
21
21
-
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 112
in € millions
2020
Before-tax
amount
Taxes
Net-of-tax
amount
Attributable to
Majorel
shareholders
Attributable to
non-controlling
interests
Items that will not be reclassified subsequently to profit or loss
Remeasurement component of defined benefit plans
(6)
2
(4)
(4)
-
Changes in fair value of equity instruments
-
-
-
-
-
Share of other comprehensive income of investments accounted for using
the equity method
-
-
-
-
-
Items that will be reclassified subsequently to profit or loss when
specific conditions are met
Exchange differences
(8)
-
(8)
(8)
-
Cash flow hedges
-
-
-
-
-
Share of other comprehensive income of investments accounted for using
the equity method
-
-
-
-
-
Other comprehensive income net of tax
(14)
2
(12)
(12)
-
Income taxes relating to other comprehensive income mainly reflect effects of measurement of deferred tax assets that have previously
been recognized with respect to the remeasurement of defined benefit plans.
18 Provisions for Pensions and Similar Obligations
in € millions
12/31/2021
12/31/2020
Defined benefit obligation
40
48
Obligations similar to pensions
3
2
43
50
Majorel operates various pension plans for current and former employees and their surviving dependents. The model of such plans varies
according to the legal, fiscal and economic environment of the country concerned. These company pension plans include both defined
contribution and defined benefit plans.
In the case of defined contribution plans, the company makes payments into an external pension fund or another welfare fund through a
statutory, contractual or voluntary model. The company has no obligation to provide further benefits once it has made these payments, so
no provisions are recognized. Expenses for defined contribution plans in the amount of €3 million were recognized as part of personnel
costs in the consolidated statement of profit and loss in the financial year 2021 (previous year: €1 million).
All other pension plans are defined benefit plans. For all the retirement benefit plans, a distinction must be made as to whether or not
these are financed through an external investment fund.
Net Defined Benefit Liability Recognized in the statement of financial position
in € millions
12/31/2021
12/31/2020
Present value of defined benefit obligation of unfunded plans
29
34
Present value of defined benefit obligation of funded plans
39
42
Total present value of defined benefit obligation
68
76
Fair value of plan assets
(28)
(28)
Impact from asset ceiling
-
-
Net defined benefit liability recognized in the balance sheet
40
48
– thereof provisions for pensions
40
48
Provisions are recognized for these defined benefit plans. These are mostly flat salary plans and final salary plans.
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 113
Defined Benefit Plans
in € millions
12/31/2021
12/31/2020
Flat salary plans/plans with fixed amounts
27
30
Final salary plans
17
21
Career average plans
24
25
Present value of defined benefit obligation
68
76
– thereof capital commitments
23
27
The obligations and plan assets available for the existing pension plans are, in some cases, exposed to demographic, economic and legal
risks. The demographic risk is primarily the longevity risk for pensioners. Economic risks include, in this respect, mostly unforeseeable
developments on the capital markets and the associated impacts on plan assets and pension obligations. Legal risks can result from
restrictions to investments and minimum funding requirements.
The provisions are determined using actuarial formulas in accordance with IAS 19. The amount of provisions depends on the employees’
length of service with the company and their pensionable salary. Provisions are computed using the projected unit credit method, in which
the benefit entitlement earned is allocated to each year of service, thus assuming an increasing cost of service in comparison to the entry
age normal method. When identifying the present value of the pension obligation, the underlying interest rate is of material importance.
For Majorel, this is based on the “Mercer Yield Curve Approach.” With this approach, separate spot-rate yield curves are created for the
eurozone on the basis of high-quality corporate bonds. In order to appropriately present the time value of money in accordance with
IAS 19.84, the basis does not consider either spikes for which the risk estimate may be substantially higher or lower, or bonds with
embedded options that distort interest rates. Biometric calculations of German plans are based on the 2018 G mortality tables of Heubeck-
Richttafeln-GmbH. Comparable country-specific calculation methods are used for foreign plans.
Further significant actuarial assumptions were made as follows:
Actuarial Assumptions
12/31/2021
12/31/2020
Discount rate
1.3%
1.2%
Rate of salary increase
2.2%
2.3%
Rate of pension increase
1.4%
1.4%
An increase or decrease in the assumptions set out above compared to the assumptions actually applied would have had the following
effects on the present value of the defined benefit obligation as of December 31, 2021:
Effect of Actuarial Assumptions
in € millions
Increase
Decrease
Effect of 0.5 percentage point change in discount rate
(5)
5
Effect of 0.5 percentage point change in rate of salary increase
1
(1)
Effect of 0.5 percentage point change in rate of pension increase
2
(2)
In order to determine the sensitivity of the longevity, the mortality rates for all beneficiaries were reduced or increased evenly so that the
life expectancy of a person of a country-specific retirement age increases or decreases by one year. An increase in average life expectancy
by 1 year will result of an increase of €2 million of the present value of the defined benefit obligation as of December 31, 2021 and a
decrease in average life expectancy by 1 year will result of a decrease of €2 million of the present value of the defined benefit obligation
as of December 31, 2021.
Changes in the present value of defined benefit obligations and plan assets in the reporting period were as follows:
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 114
Development of the Defined Benefit Plans
Defined benefit obligation (I)
Fair value of plan assets (II)
Net defined benefit balance
(I)-(II)
in € millions
2021
2020
2021
2020
2021
2020
Balance as of 1/1
76
94
28
29
48
65
Service cost
1
2
-
-
1
2
Interest expenses
1
1
-
-
1
1
Income and expenses for defined benefit plans
recognized in the consolidated statement of profit and
loss
2
3
-
-
2
3
Income/expense on plan assets excluding amounts
included in net interest income and net interest expenses
-
-
-
(1)
-
1
Actuarial gains (-) and losses (+)
– changes in financial assumptions
(2)
7
-
-
(2)
7
– experience adjustments
(4)
(2)
-
-
(4)
(2)
Remeasurements for defined benefit plans recognized
in the consolidated statement of comprehensive
income
(6)
5
-
(1)
(6)
6
Contributions to plan assets by employer
-
-
-
-
-
-
Pension payments
(3)
(4)
-
-
(3)
(4)
Change of consolidation scope
-
(28)
-
-
-
(28)
Other changes
(1)
6
-
-
(1)
6
Other reconciling items
(4)
(26)
-
-
(4)
(26)
Balance as of 12/31
68
76
28
28
40
48
thereof
Germany
62
67
28
28
34
39
Other countries
6
9
-
-
6
9
The contributions to plan assets fully pertain to Germany.
The expenses for defined benefit plans are broken down as follows:
Expenses for Defined Benefit Plans
in € millions
2021
2020
Service cost
1
2
Net interest expenses
1
1
Net pension expenses
2
3
The portfolio structure of plan assets is composed as follows:
Portfolio Structure of Plan Assets
in € millions
12/31/2021
12/31/2020
Debt instruments
1)
19
1
Cash and cash equivalents
1
26
Qualifying insurance policies
-
1
Other funds
8
-
Fair value of plan assets
28
28
1) For almost all debt instruments, market prices are listed on an active market.
The plan assets are used exclusively for the fulfillment of benefit obligations. To avoid a concentration of risk, plan assets are invested in
various classes of investments.
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 115
The trust agreement between Majorel Deutschland GmbH and Helaba Pension Trust e.V. meets the requirements for plan assets in
accordance with IAS 19.
The weighted average duration of the pension obligations on December 31, 2021, was 15 years (December 31, 2020: 16 years). The
maturity profile of the anticipated undiscounted pension payments is presented in the following table:
Maturity Profile of Pension Payments
in € millions
Expected pension
payments
2022
4
2023
3
2024
3
2025
3
2026
3
2027-2031
16
Obligations similar to pensions relate to provisions for bonuses for employee service anniversaries and severance payments at retirement.
Severance payments at retirement are made when employees leave the company and are based on statutory obligations. Provisions for
employee service anniversary bonuses and severance payments at retirement are recognized in the same way as defined benefit plans,
but with actuarial gains and losses recognized in profit or loss.
The following table shows the breakdown in obligations similar to pensions:
Breakdown of Obligations Similar to Pensions
in € millions
12/31/2021
12/31/2020
Provisions for severance payments
2
1
Provisions for employee service anniversaries
1
1
Obligations similar to pensions
3
2
19 Other Provisions
1/1/2021
12/31/2021
in € millions
of which
> 1 year
Additions
Reversal
Usage
Other
effects
Change of
consoli-dation
scope
Accrued
interest
of which
> 1 year
Onerous contracts
3
1
3
(1)
(2)
-
-
-
3
2
Litigation
3
2
1
(1)
-
-
-
-
3
2
Restructuring
4
-
5
(3)
(1)
-
-
-
5
-
Other employee benefits
4
-
2
(1)
-
-
-
-
5
1
Other
13
2
11
(2)
-
-
-
-
22
3
27
5
22
(8)
(3)
-
-
-
38
8
1/1/2020
12/31/2020
in € millions
of which
> 1 year
Additions
Reversal
Usage
Other
effects
Change of
consolidation
scope
Accrued
interest
of which
> 1 year
Onerous contracts
1
-
3
-
(1)
-
-
-
3
1
Litigation
2
2
2
(1)
-
-
-
-
3
2
Restructuring
5
-
4
(1)
(4)
-
-
-
4
-
Other employee benefits
1
-
3
-
-
-
-
-
4
-
Other
5
2
10
(1)
(1)
-
-
-
13
2
14
4
22
(3)
(6)
-
-
-
27
5
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 116
In accordance with IAS 37, restructuring provisions include termination benefits and other costs relating to the discontinuation of business
activities.
20 Financial Debt
Carrying amounts of financial debt are calculated as follows:
Current and Non-Current Financial Debt
Current
Non-current
in € millions
12/31/2021
12/31/2020
12/31/2021
12/31/2020
Liabilities to banks
4
33
70
-
Other financial debt
85
1
-
20
89
34
70
20
Majorel contracted a fixed-interest term loan agreement of €20 million with Bertelsmann Business Support S.à r.l., a subsidiary of
Bertelsmann SE & Co. KGaA, valid until December 2022. As of December 31, 2021, the term loan balance amounts to €20 million and
bears interest amount of 2.60% per annum. As of December 31, 2021 the term loan was included in the position “Other financial debt.”
In January 2021 Majorel entered into a second fixed-interest term loan agreement of €65 million with Bertelsmann Business Support
S.à.r.l., a subsidiary of Bertelsmann SE & Co. KGaA, valid until December 2022. As of December 31, 2021, the term loan balance amounts
to €65 million and bears interest in the amount of 1.50% per annum. As of December 31, 2021 the term loan was included in position
“Other financial debt”.
In December 2021 Majorel contracted a committed Facility Agreement of €150 million with group of banks. The Agreement includes a
term loan facility of €70 million (Facility A) which is valid until December 2025 and a multicurrency revolving loan facility of €80 million
(Facility B) which is valid until December 2024 with an option to extend the maturity for next 12 months. As of December 31, 2021, the
Facility A balance amounts to €70 million and bears floating interest calculated as EURIBOR 3M + margin. As of December 31, 2021, the
Facility A was included in position “Liabilities to banks.” As of December 31, 2021, the Facility B was not drawn.
Fixed-interest loan of €30 million from a bank, valid until July 2021, was repaid entirely in June 2021. Committed short term revolving
credit facility of €20 million from a bank, valid until November 2021, was ended on maturity. Committed short-term revolving credit facility
of €20 million from a bank, valid until November 2022, was cancelled in December 2021.
Financial debt is generally unsecured.
21 Lease Liabilities
The maturities of lease liabilities are presented in the table below.
Maturity Analysis for Lease Liabilities
Undiscounted cash flows
in € millions
Carrying amount
Up to 1 year
1 to 5 years
Over 5 years
Total
Balance as of 12/31/2021
125
52
84
10
146
Balance as of 12/31/2020
95
44
60
2
106
As of December 31, 2021, potential future cash outflows of €11 million were not included in the lease liabilities (December 31, 2020:
€20 million), as it could not be assumed with reasonable certainty that the leases would be extended (or would not be terminated). Future
payments arising from short-term leases and leases for low-value assets are not recognized as right-of-use assets and lease liabilities.
For such leases, the payments are recognized on straight-line basis as expenses (note 3 ”External Expenses and Costs of Materials”).
During the year 2021, short-term leases amounted to €7 million (previous year: €4 million) and low value leases amounted to €3 million
(previous year: €3 million). Expenses from variable lease payments not included in the lease liability were immaterial (previous year:
immaterial). The same applies for income from subleasing right-of-use assets and the resulting lease payments expected in the future.
Details on the corresponding right-of-use assets are presented in note 11 “Property, Plant and Equipment and Right-of-Use Assets.”
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 117
22 Liabilities
in € millions
12/31/2021
12/31/2020
Non-current
-
1
Sundry non-financial payables
-
1
Current
417
285
Trade payables
129
104
Derivative financial instruments
-
-
Sundry financial payables
27
28
Contract liabilities
5
4
Sundry non-financial payables
256
149
– personnel-related liabilities
143
74
– tax liabilities
38
28
– social security liabilities
44
26
– deferred items
2
5
– other
29
16
The item “Contract liabilities” includes payments received by Majorel in advance; that is, prior to satisfaction of the contractual obligations
in accordance with IFRS 15. They are recognized as revenue as soon as the contractual obligation has been rendered. Accordingly,
revenues amounting to €7 million were recognized in the financial year 2021, which were included in the balance of contract liabilities at
the beginning of the financial year. The item “Sundry financial payables” mainly contains debtors with a credit balance amounting to
€1 million (previous year: €9 million), refund liabilities amounting to €13 million (previous year: €4 million) and payables resulting from
acquisition of property, plant and equipment amounting to €2 million (previous year: €2 million).
23 Contingent Liabilities
Contingent liabilities as of December 31, 2021 and 2020 were immaterial.
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 118
24 Additional Disclosures on Financial Instruments
In the case of financial assets and financial liabilities measured at fair value, the valuation technique applied depends on the respective
inputs present in each case. If listed prices can be identified for identical assets on active markets, they are used for measurement (level
1). If this is not possible, the fair values of comparable market transactions are applied, and financial methods that are based on observable
market data are used (level 2). For measuring the fair value of unlisted derivatives (level 2), Majorel uses various financial methods
reflecting the prevailing market conditions and risks at the respective balance sheet dates. Irrespective of the type of financial instrument,
future cash flows are discounted at the end of the reporting period based on the respective market interest rates and yield curves at the
end of the reporting period. If the fair values are not based on observable market data, they are identified using established financial
methods or on the basis of observable prices obtained as part of the most recently implemented qualified financing rounds, taking into
account the life and developmental cycle of the respective entity (level 3).
Both the following tables show the carrying amounts and measurement categories of financial assets and financial liabilities in accordance
with IFRS 9:
Carrying Amounts and Measurement Categories of Financial Assets
in € millions
12/31/2021
12/31/2020
Financial assets measured at amortized cost
– trade receivables
388
291
– sundry financial receivables
80
16
– other financial assets
11
1
– bank balances and cash on hand
231
182
– cash equivalents
7
13
717
503
Carrying Amounts and Measurement Categories of Financial Liabilities
in € millions
12/31/2021
12/31/2020
Financial liabilities measured at amortized cost
– liabilities to banks
74
33
– other financial debt
85
21
– trade payables
129
104
– other
27
28
315
186
Except for the loans with Bertelsmann Business Support S.à r.l., a subsidiary of Bertelsmann SE & Co. KGaA, the fair value of each class
of financial assets and liabilities measured at amortized cost represent a reasonable approximation of fair value. The fair value of the loan
with Bertelsmann Business Support S.à r.l. with a carrying amount of €65 million amounts to €67 million (level 2) and the fair value of the
loan with Bertelsmann Business Support S.à r.l. with a carrying amount of €20 million amounts to €21 million (level 2). Both loans are
included in the current balance sheet position “Financial debt”. The fair value of the loan under Facility A with group of banks with a carrying
amount of €70 million amounts to €72 million (level 2). This loan is included in the non-current balance sheet position “Financial debt“.
As of December 31, 2021, other financial assets include financial assets recognized at fair value (level 1), which relates to a highly liquid
investment fund for an amount of €5 million (December 31, 2020: nil). The financial instruments including derivatives measured at fair
value are immaterial (level 2) as of December 31, 2021 and 2020.
As in the previous year, no on-balance-sheet offsetting of financial assets and financial liabilities were performed, nor were there any
significant non-recognized offsetting potential as of December 31, 2021.
Credit Risk
In accordance with IFRS 9, Majorel uses a simplified approach to measure expected credit losses on trade receivables and contract
assets. According to this, the loss allowance is measured using lifetime expected credit losses. For this purpose, impairment matrices
based on historic bad debt losses, maturity bands and expected credit losses are prepared. The impairment matrices are created for
business unit-specific groups of receivables, each with similar default patterns. In addition, separate risk assessments are performed.
Majorel also considers other quantitative and qualitative information and analyses based on the experience of the Majorel Group.
Additionally, reasonable assessments including forward-looking information such as customer-specific information and forecasts of future
economic condition have been taken into consideration. Contract assets have substantially the same risk characteristics as trade
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 119
receivables for the same types of contracts, so that the expected loss rates for trade receivables are a reasonable approximation of the
loss rates for contract assets.
Based on this, the loss allowance as of December 31, 2021 amounted to €-6 million for trade receivables (December 31, 2020: €-5 million).
In the financial year 2021 and 2020, an immaterial amount of impairment losses and reversals were recognized on trade receivables and
contract assets. The following table shows a reconciliation from the opening balance to the closing balance of loss allowances for trade
receivables and contract assets in the financial year 2021 and 2020.
Reconciliation of Loss Allowance for Trade Receivables and Contract Assets
in € millions
2021
2020
Balance as of 1/1
(5)
(5)
Additions
(2)
(2)
Usage
1
-
Reversal
2
2
Change of consolidation scope
(2)
-
Exchange rate effects
-
-
Balance as of 12/31
(6)
(5)
The following table details the risk profile of trade receivables based on the Group’s provision matrix.
in € millions
Trade receivables- days past due
2021
Not past due
< 30 days
31- 90 days
91-180 days
181-360 days
>360 days
Total
Trade receivables after individual
impairment
352
23
4
4
1
6
390
Expected Credit Loss
(1)
-
-
-
-
(1)
(2)
in € millions
Trade receivables- days past due
2020
Not past due
< 30 days
31- 90 days
91-180 days
181-360 days
>360 days
Total
Trade receivables after individual
impairment
255
19
7
2
1
8
292
Expected Credit Loss
-
-
-
-
-
(1)
(1)
Expected credit losses for cash and cash equivalents as of December 31, 2021 and as of December 31, 2020, were immaterial. Majorel
applies the general approach for all other financial assets that are subject to the expected credit loss model. Insignificant impairment
losses were identified for these financial assets as of December 31, 2021, and December 31, 2020. As of December 31, 2021, and as of
December 31, 2020, the carrying amount of all receivables, loans and securities constitutes Majorel’s maximum default risk. The Group
evaluates the concentration of risk with respect to trade receivables and contract assets as low, as its customers are located in several
jurisdictions and industries and operate in diverse markets. Revenues from the five biggest clients of the Group represented approximately
33% of the Group’s total revenues.
The following table presents the contractually fixed undiscounted cash flows of the financial liabilities for settlement. The figures are based
on undiscounted cash flows at the earliest date at which Majorel can be held liable for payment.
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 120
Maturity Analysis for Non-Derivative Financial Liabilities
Undiscounted cash flows
in € millions
Carrying amount
Up to 1 year
1 to 5 years
Over 5 years
Total
Liabilities to banks
74
4
-
70
74
Other financial debt
85
85
-
-
85
Trade payables
129
129
-
-
129
Other
27
27
-
-
27
Balance as of 12/31/2021
315
245
-
70
315
Liabilities to banks
33
33
-
-
33
Other financial debt
21
1
20
-
21
Trade payables
104
104
-
-
104
Other
28
28
-
-
28
Balance as of 12/31/2020
186
166
20
-
186
Current cash outflows from financial liabilities are offset by planned cash inflows from receivables and other financial assets. To cover
current cash flows, Majorel also has adequate financial reserves in the amount of the cash and cash equivalents in place at the end of the
reporting period.
The maturity analysis for lease liabilities is presented in note 21 “Lease Liabilities.”
Based on the remaining contractual terms of its financial liabilities at the end of the reporting period, Majorel will have to make the following
future interest payments:
Future Interest Payments
Undiscounted interest payments
in € millions
Up to 1 year
1 to 5 years
Over 5 years
Total
Liabilities to banks
1
2
-
3
Other financial debt
1
-
-
1
Balance as of 12/31/2021
2
2
-
4
Liabilities to banks
-
-
-
-
Other financial debt
1
1
-
2
Balance as of 12/31/2020
1
1
-
2
Risk Management of Financial Instruments
The principles of the financial risk policy are described below.
Financial Risk Management
The Majorel Group is exposed to various forms of financial risk through its international business operations. Above all, this includes the
effects of changes in foreign exchange rates and interest rates. Majorel’s risk management activities are designed to effectively mitigate
these risks. The Management Board establishes basic risk management policy, outlining general procedures for hedging currency and
interest rate risk and the utilization of derivative financial instruments. The Majorel Group Treasury advises subsidiaries on operating risk
and hedges risks using derivative financial instruments as necessary.
Currency Risk
Majorel is exposed to an exchange rate risk in various foreign currencies. Its subsidiaries are advised, but not obliged, to hedge themselves
against foreign currency risks in the local reporting currency by signing forward agreements with banks that have a high credit rating.
Loans within the Majorel Group that are subject to currency risk are hedged using derivatives.
The analysis of foreign currency sensitivity includes the Group’s financial debt and operating transactions at the end of the reporting period
and the derivative contracts entered into. The calculation is performed for the unsecured net exposure on the basis of an assumed 10
percent appreciation of the euro versus all foreign currencies, and is presented before tax. Based on a total risk position of €129 million
(previous year: €97 million), a uniform devaluation of foreign currencies would have resulted in a change in the carrying amount recognized
in profit or loss of €-12.9 million (previous year: €-9.7 million). If there had been a uniform increase in the value of foreign currencies, this
would have led to opposite changes in these amounts.
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 121
Interest Rate Risk
Majorel´s interest rate risk arises primarily from financing agreements with banks and from cash and cash equivalents. As in the previous
year, a change of 100 basis points in interest rates would have no significant impact on the Group’s interest result.
Liquidity Risk
Liquidity risks may arise through a lack of rollover financing (liquidity risk in a narrow sense), delayed receipt of payment and unforeseen
expenditure (budgeting risk). Budgeting risk is determined by comparing deviations in actual spending with budget and reserve amounts.
In a narrow sense, liquidity risk depends on the volume of debt due within a given period. Majorel Group’s policy in respect of its financing
is to maintain sufficient liquidity at all times to finance group assets, short-term cash requirements, and its development, both in terms of
amount and duration, and at the lowest possible cost. Liquidity risk is monitored on an ongoing basis with reference to the budget for
current and future years. New and unplanned transactions (e.g., acquisitions) are continuously tracked. The maturity profile of financial
assets and liabilities is also reconciled on a regular basis. Budget risks are managed through effective cash management and constant
monitoring of projected versus actual cash flows. Debt maturities are also diversified to ensure that rising financing costs do not have a
short-term impact. Credit facilities with banks are also maintained for unplanned expenditures. The Group has implemented a centralized
cash management policy when in conformity with local legislation applying to its subsidiaries and taking into consideration interest rates
and funding needs of these subsidiaries. All medium- and long-term financing operations are authorized and overseen by the Group’s
financial management. The Group obtains its financing in the form of loans from shareholders and banks as well as revolving credit
facilities with maturities ranging till December 2025 and until further notice as disclosed in note 20 “Financial Debt.” Given the maturities
of its borrowings and the Group’s capacity to generate free cash flow, liquidity risk is considered to be low.
Financial Derivatives
Majorel uses standard market financial derivatives, usually unlisted (OTC) instruments. These include, in particular, forward agreements.
Transactions are entered into solely with Bertelsmann Group Treasury or banks with a high credit rating. The transactions with banks are
only performed with banks approved by Majorel Corporate Treasury.
Capital Management
The financing guidelines adopted by the Majorel Group are designed to ensure a balance between financing security, return on equity and
growth. Financial management at Majorel is conducted with a target to ensure the Group’s independence and capacity to maintain a strong
capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. This objective
is part of the overall planning process and regular monitoring.
25 Acquisitions and Disposals
In the financial year 2021, the cash flow due to acquisition activities totaled €-56 million, which fully related to new acquisitions during the
reporting period less cash and cash equivalents acquired and consolidated in 2021. The consideration transferred amounted to €70 million.
In January 2021, Majorel acquired an interest of 100 percent in each of the Chinese companies Shanghai Bertelsmann Commercial
Services Co. Ltd, Shanghai Bertelsmann – arvato Information Services Co. Ltd. and Bertelsmann-Arvato Commercial Services (Shanghai)
Co., Ltd., all based in Shanghai, China, expanding its geographic footprint and making Majorel one of the few international providers
operating at scale in the country. The consideration transferred amounted to €65 million and was paid in cash. To finance the acquisition
of the Chinese business, Majorel entered into a term loan agreement with Bertelsmann Business Support S.à r.l., a subsidiary of
Bertelsmann SE & Co. KGaA , with respect to an aggregate term loan amount of €65 million. The acquisition is accounted for as a
transaction under common control. In selecting its accounting policy for the accounting of transactions under common control, Majorel
opted to apply the methodology of IFRS 3, in particular identifying and measuring the consideration transferred, identifying and measuring
the identifiable assets and liabilities, and recognising goodwill. Consistent with IFRS 3, Majorel as acquirer did not restate its comparatives
when applying acquisition accounting to the transaction. The acquisition resulted in goodwill totaling €32 million, which reflects synergy
from expanding group geographic footprint, global client and digital offering. The goodwill is not tax deductible.
In June 2021, Majorel acquired an interest of 100 percent in Junokai GmbH, one of Germany’s leading companies operating in customer
experience consultancy services in order to strengthen the Tech & Expert Services line of business. Junokai complements Majorel's
existing consultancy practice in the areas of process optimization, technology consulting and implementation, and organizational design.
The consideration transferred amounted to €5 million and was paid in cash. The acquisition resulted in goodwill totaling €2 million, which
reflects synergy and leverage in CX consultancy and advisory services. The goodwill is not tax deductible.
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 122
Transaction-related costs were insignificant in 2021 for both acquisition and have been recognized in profit or loss.
In accordance with IFRS 3, business combinations are accounted for using the acquisition method. The cost of an acquisition is measured
as the aggregate of the consideration transferred, which is measured at acquisition date fair value. Fair value of other intangible assets
amounting to €12 million are measured based on present value of the net cash flows expected to be generated by the customer
relationships. €12 million of lease liabilities and €12 million of right-of-use assets are accounted for leases identified in accordance with
IFRS 16. The purchase price allocation considers all the facts and circumstances prevailing as of the respective date of acquisition that
were known prior to preparation of the Consolidated Financial Statements. In accordance with IFRS 3, should further facts and
circumstances become known within the 12-month measurement period, the purchase price allocation will be adjusted accordingly.
The following table shows the fair values of the assets and liabilities of the acquisitions on their dates of initial consolidation based on the
purchase price allocations:
in € millions
Chinese
companies
Junokai
Total
Non-current assets
Other intangible assets
13
1
14
Property, plant and equipment and right-of-use assets
16
-
16
Other non-current assets
1
-
1
Current assets
Trade and other receivables
33
1
34
Cash and cash equivalents
12
2
14
Liabilities
Lease liabilities
(12)
-
(12)
Other financial and non-financial liabilities
(30)
(1)
(31)
Net assets acquired
33
3
36
Goodwill
32
2
34
Non-controlling interests
-
-
-
Consideration transferred according to IFRS 3
65
5
70
Consideration paid in cash
65
5
70
Cash and cash equivalents acquired
(12)
(2)
(14)
Cash outflow on acquisitions
53
3
56
Payments on prior year's acquisitions
-
-
-
Total cash flow from acquisition activities
53
3
56
It is expected that the full contractual amounts of trade receivables can be collected.
Since initial consolidation, all new acquisitions in 2021 have contributed €117 million to revenue and €6 million to Group profit or loss. If
consolidated as of January 1, 2021, these would have contributed €120 million to revenue and €6 million to Group profit or loss.
In November 2021, Majorel had signed an agreement for the acquisition of 80 percent of the shares in Mayen Telekomünikasyon Hizmetleri
A.Ş., a company based in Turkey (further information is presented in note 29 “Events after the Reporting Period”).
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 123
During the year 2021, Majorel disposed no subsidiary or other business unit.
26 Cash Flow Statement
The consolidated cash flow statement has been prepared in accordance with IAS 7 and is used to evaluate the Group’s ability to generate
cash and cash equivalents. Cash flows are divided into those relating to operating activities, investing activities and financing activities.
Cash flows from operating activities are presented using the indirect method, whereby EBIT is adjusted for the effects of a non-cash
nature, any deferrals or accruals of past or future operating receipts or payments, and items of income or expenses associated with
investing cash flows. In addition, cash flows arising from income taxes are classified as cash flows from operating activities as well as
other cash flows that are neither investing nor financing.
The management of Group operations of Majorel utilizes indicators that include operating EBITDA and is thus before interest, taxes,
amortization/depreciation, impairment and reversals and special items. Operating results and the resulting cash flow from operating
activities should therefore be consistent and comparable. Accordingly, the net balances of interest paid and interest received during the
financial year are shown in the cash flow statement as part of financing activities.
The change in provisions for pensions and similar obligations represents the balance of personnel costs for pensions and similar
obligations and company payments for these obligations. No contributions to pension plans were made in the financial year 2021 and
2020.
The consolidated cash flow statement includes the effects of changes in foreign currencies and changes in the scope of consolidation.
Items in the consolidated cash flow statement thus cannot be reconciled with changes in items reported on the consolidated statement of
financial position.
Investing activities include payments for investments in non-current assets and purchase price payments for acquisitions, financial assets
recognized at fair value as well as proceeds from the disposal of non-current assets. Further explanations concerning acquisitions made
during the financial year are presented in the section “Acquisitions and Disposals.”
Cash flow from financing activities includes changes in equity, financial debt, dividend payments, lease liabilities and interest paid and
interest received (including interest paid due to leases). The item “Proceeds from/redemption of other financial debt” includes receipts in
the amount of €136 million (previous year: €57 million) and payments in the amount of €-31 million (previous year: -€73 million). Total
cash outflows from leases amounted to €-50 million in the financial year 2021 (previous year: €-43 million).
The following table shows the cash changes and non-cash changes of liabilities arising from financing activities:
Changes in Liabilities Arising from Financing Activities
in € millions
1/1/2021
Cash changes
Non-cash changes
12/31/2021
Exchange rate effects
Other changes
Liabilities to banks
33
40
-
1
74
Lease liabilities
95
(50)
4
76
125
Other financial debt
21
64
-
-
85
Liabilities arising from financing activities
149
54
4
77
284
in € millions
1/1/2020
Cash changes
Non-cash changes
12/31/2020
Exchange rate effects
Other changes
Liabilities to banks
21
12
-
-
33
Lease liabilities
85
(43)
(3)
56
95
Other financial debt
23
(28)
-
26
21
Liabilities arising from financing activities
129
(59)
(3)
82
149
As of December 31, 2021, and as of December 31, 2020, the other non-cash changes in lease liabilities mainly relate to lease contracts
extended in the financial year 2021 and 2020, respectively.
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 124
Changes in Net Liabilities Arising from Financing Activities
in € millions
2021
2020
Net liabilities arising from financing activities as of 1/1
46
(50)
Cash flow from operating activities
185
223
Cash flow from investing activities
(174)
(45)
Interest, dividends and changes in equity
(25)
(3)
Exchange rate effects and other changes in net liabilities arising from financing activities
(78)
(79)
Net liabilities arising from financing activities as of 12/31
(46)
46
Net liabilities arising from financing activities are the balance of the statement of financial position items “Cash and cash equivalents,”
“Financial debt” and “Lease liabilities.”
27 Segment Reporting
IFRS 8 Operating Segments requires that external segment reporting must be based on the internal organizational and management
structure, and on management and reporting indicators used internally. Following the acquisition of three Chinese companies in
January 2021, from the beginning of 2021, segment reporting reflects three reportable operating segments (Europe, Africa, South America;
Global English, Middle East, Southeast Asia; China, East Asia), differentiated according to the geographical region in which services are
offered and which are reported by segment managers to the Board of Majorel Group Luxembourg S.A. in its role as the chief operating
decision maker in accordance with IFRS 8. Minor activities in Mexico are included in the column “Consolidation/other.” This column also
comprises intersegment eliminations.
Specific segment information is defined according to the definitions on which Group management is based. As a rule, accounting and
measurement in the segment reporting uses the same IFRS principles as in the Consolidated Financial Statements. Invested capital is
calculated on the basis of the Group’s operating assets less non-interest-bearing operating liabilities. Intercompany revenues are
recognized using the same arm’s-length conditions applied to transactions with third parties.
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 125
Europe, Africa, South
America
Global English,
Middle East,
Southeast Asia
China, East Asia
Total segments
Consolidation/
other
Total Group
in € millions
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
Revenues
from external
customers
1,428
1,132
269
239
112
n/a
1,809
1,371
2
4
1,811
1,375
Intersegment
revenues
42
42
138
60
-
n/a
180
102
(180)
(102)
-
-
Segment
revenues
1,470
1,174
407
299
112
n/a
1,989
1,473
(178)
(98)
1,811
1,375
Operating
EBITDA
223
153
75
44
15
n/a
313
197
3
(1)
316
196
Depreciation,
amortization
and
impairment
(55)
(58)
(22)
(19)
(8)
n/a
(85)
(77)
-
-
(85)
(77)
Results from
investments
accounted
for using the
equity
method
-
-
1
1
-
n/a
1
1
-
-
1
1
Invested
capital
233
218
88
94
78
n/a
399
312
(4)
(3)
395
309
Operating EBITDA serves as a key performance indicator for a sustainable determination of operating result. Assessment of the operating
segments’ performance is also based on this performance indicator. Operating EBITDA represents the operating earnings generated by
the respective segment management before interest and taxes, as well as amortization/depreciation, impairment and reversals, and it is
adjusted for special items. Elimination of these special items allows the determination of a normalized performance indicator, to reflect
normal operational business activities, and which are not influenced by periodic outcomes or structural distortions, thus simplifying
forecasting and comparability. In 2021 special items included IPO bonuses with equity deferral and related statutory social security
contributions in the amount of €128 million and reversal of substantial restructuring provisions of €2 million (previous year: recognized
provision on material restructuring of €2 million and losses on disposals of investments in €1 million).
Segment amortization/depreciation, impairment and reversals relate to property, plant and equipment and right-of-use assets, and to
intangible assets as set out in notes 10 “Goodwill and Other Intangible Assets” and 11 “Property, Plant and Equipment and Right-of-Use
Assets.”
Invested capital is calculated on the basis of the Group’s operating assets less non-interest bearing operating liabilities.
Each segment shows the investments accounted for using the equity method and their results, provided these companies can be clearly
allocated to the segment concerned. Results from investments accounted for using the equity method are shown before impairment. In
addition to the segment breakdown, revenues are broken down by customer location and revenue source.
The following table shows the reconciliation of segment information to the Consolidated Financial Statements:
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 126
Reconciliation of Segment Information to Group Profit or Loss
in € millions
2021
2020
Operating EBITDA
316
196
Amortization/depreciation, impairment and reversals on intangible assets, property, plant and equipment and right-of-use assets
(85)
(77)
Special items
(126)
(3)
EBIT
105
116
Financial result
(5)
(9)
Earnings before taxes
100
107
Income tax expense
(20)
(21)
Group profit or loss
80
86
28 Related Party Disclosures
For Majorel, related parties as defined in IAS 24 are those persons and entities that control or exercise a significant influence over Majorel,
as well as those persons and entities controlled or jointly controlled by Majorel, or over which it exercises a significant influence.
Accordingly, all legal entities controlled or jointly controlled by the ultimate parent company of Majorel preparing consolidated financial
statements for public use. Bertelsmann SE & Co. KGaA, or over which it exercises a significant influence, all legal entities controlled or
jointly controlled by Saham parent entities and key management personnel of Majorel and all its parents including close members of their
families and the companies that are controlled or jointly managed by them, are defined as related parties. Majorel Group Luxembourg S.A.
is the parent company of the Majorel Group. Bertelsmann Verwaltungsgesellschaft mbH (BVG), Gütersloh, a holding company with no
operating activities, has control of the Bertelsmann Group. Johannes Mohn GmbH has informed Bertelsmann SE & Co. KGaA that it
directly owns more than 50 percent of the shares in Bertelsmann Management SE and of Bertelsmann SE & Co. KGaA. Reinhard Mohn
Verwaltungsgesellschaft mbH continues to own more than one-quarter of the shares in Bertelsmann Management SE and in Bertelsmann
SE & Co. KGaA, respectively.
Remuneration for key management personnel includes the following:
Remuneration for Key Management Personnel
in € millions
2021
2020
Short-term employee and termination benefits
2
2
Post-employment benefits
-
-
Other long-term benefits
48
-
The remuneration shown includes IPO bonus with equity deferral of the members of the Management Board and remuneration for activities
by the members of the Management Board of Majorel Group Luxembourg S.A. The advisory services received from the members of the
Supervisory Board of Majorel Group Luxembourg S.A. are included in the item "Other related parties" in the table below.
Loans of €12 million was granted to Management Board members out of which €7 million was repaid during the year. Outstanding loans
as at year end to those members amounted to €5 million.
Transactions with subsidiaries included in the scope of consolidation are eliminated and are not further disclosed. In addition to
transactions with consolidated subsidiaries, the following transactions with related parties and entities were conducted in the reporting
period:
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 127
Transactions with Related Parties
in € millions
Parent
Entities with
significant
influence
Key members of
management
Associates
Other related
parties
Goods delivered and services provided in 2021
-
-
-
-
39
Goods and services received in 2021
-
-
-
-
(51)
Receivables against as of December 31, 2021
-
1
5
-
14
Amounts owed to as of December 31, 2021
-
6
-
-
93
Goods delivered and services provided in 2020
-
-
-
-
44
Goods and services received in 2020
-
-
-
-
(32)
Receivables against as of December 31, 2020
-
-
-
1
24
Amounts owed to as of December 31, 2020
-
-
-
-
32
Transactions with the parent company contain transactions with Bertelsmann Luxembourg S.à r.l. as this entity is the direct parent company
of Majorel. Customer Relationship Investments S.à r.l. and Saham Outsourcing Luxembourg S.à r.l. are entities that have significant
influence over Majorel. On June 24, 2021 the general meeting of shareholders resolved to declare and pay a dividend of €19 million
exclusively to the shareholder Bertelsmann Luxembourg S.à r.l. pursuant to a separate agreement between the shareholders of the
Company and the certain venture agreement entered into between the shareholders. No transactions occurred with Bertelsmann
Luxembourg S.à r.l. in 2020.
The transactions with related parties recognized in the position “Goods delivered and services provided” mainly include income from rental
services and revenues from providing diverse services. The transactions with related parties recognized in the position “Goods and
services received” primarily contain expenses for rental and lease expenses and expenses receiving sundry services from Bertelsmann.
The outstanding receivables against related parties mainly contain trade receivables. Trade payables and loans payable from a revolving
credit agreement and from a term loan agreement are the main content of the amounts owed payable to related.
In December 2018, Majorel contracted a fixed-interest term loan agreement of €20 million with Bertelsmann Business Support S.à r.l., a
subsidiary of Bertelsmann SE & Co. KGaA, valid until December 2022. The interest expense for the period amounts to €1 million.
In January 2021, Majorel entered with Bertelsmann Business Support S.à r.l., into another term loan agreement of €65 million, valid until
December 2022. The term loan was used to cover funding requirements in connection with the acquisitions of Chinese companies from
Bertelsmann China Holding GmbH. The interest expense for the period amounts to €1 million. As of December 31, 2021, the term loan
balance amounts to €65 million. The outstanding liability is part of the table concerning the transactions with related parties.
As of December 31, 2020, there was a revolving credit agreement with the minority shareholder of a Majorel subsidiary. The loan was
repaid during 2021. As of December 31, 2021, there are no loans receivables from associates (previous year: €1 million).
During the year 2021, the Group received reimbursement of costs for IPO from both Saham and Bertelsmann in the amount of €4 million
(previous year: €nil million).
As of December 31, 2021, Majorel has guarantees from Saham in the amount of €2 million (December 31, 2020: €2 million). No capital
contributions were made in the financial year 2021 (previous year: less than € 1 million). Expenses from lease contracts were recognized
with other Saham entities in the amount of €1 million (previous year: €1 million with other Bertelsmann entities and €1 million with Saham
entities).
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 128
29 Events after the Reporting Period
In November 2021, Majorel had signed an agreement for the acquisition of 80 percent of the shares in Mayen Telekomünikasyon Hizmetleri
A.Ş., a company based in Turkey. As of December 31, 2021, an advance payment of €58 million was already paid. In accordance with
IFRS 3, the acquisition date is January 1, 2022. The transaction will be accounted for as a business combination in accordance with IFRS
3. At the time the Consolidated Financial Statements were prepared, the purchase price allocation was at a very preliminary stage. In
particular, the valuations have not yet been finalized.
In February 2022, Booking.com and Majorel have entered into an agreement to transfer Booking.com’s internal CX service centers in
Europe, Asia Pacific, and the Americas to Majorel. The transaction will be accounted for as a business combination in accordance with
IFRS 3. The agreement is expected to be effective in the second quarter of 2022, which is subject to closing conditions, including regulatory
approvals and completion of works council consultations.
Majorel Group Luxembourg S.A. | Consolidated Financial Statements 2021 129
RESPONSIBILITY STATEMENT
We, Thomas Mackenbrock, Chief Executive Officer and Otmane Serraj, Chief Financial & Shared Services Officer, confirm, to the best of
our knowledge, that these 2021 Consolidated Financial Statements which have been prepared in accordance with the International
Financial Reporting Standards as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and
profit or loss of Majorel Group and the undertakings included in the consolidation taken as a whole, and that the Directors’ report includes
a fair view of the development and performance of the business and the position of Majorel Group and the undertakings included in the
consolidation taken as a whole, together with the description of the principal risks and uncertainties they face.
Luxembourg, March 16, 2022
Majorel Group Luxembourg S.A.
Thomas Mackenbrock (Chief Executive Officer)
Otmane Serraj (Chief Financial & Shared Services Officer)
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