\nCorbion is the global market leader in lactic acid and lactic acid derivatives, and a leading company in emulsifiers, functional enzyme blends, minerals, vitamins, and algae ingredients. \nThe company delivers high-performance sustainable ingredient solutions made from renewable resources and applied in global markets such as food, home & personal care, animal nutrition, pharmaceuticals, medical devices, and bioplastics. Its products add differentiating functionality to a wide variety of consumer products worldwide.
\n\n\nCorbion is based in Amsterdam, the Netherlands and listed on Euronext Amsterdam.
\n\n\nThese consolidated financial statements cover the year 2022, which ended at the balance sheet date of 31 December 2022. The consolidated financial statements drawn up by the Board of Management have been approved by the Supervisory Board on 2 March 2023. They will be presented to the annual General Meeting of Shareholders for adoption on 17 May 2023. The Supervisory Board will give a preliminary recommendation regarding the consolidated financial statements to the annual General Meeting of Shareholders.
\n\nUnless stated otherwise all amounts in the financial statements are reported in millions of euros.
\n| \u00a0 | Average exchange rate 2022 | Average exchange rate 2021 | Exchange rate 31-12-2022 | Exchange rate 31-12-2021 |
US dollar | 1.05 | 1.18 | 1.06 | 1.13 |
Japanese yen | 137.99 | 129.85 | 142.24 | 130.44 |
Brazilian real | 5.44 | 6.38 | 5.54 | 6.37 |
Thai baht | 36.86 | 37.82 | 36.88 | 37.87 |
\nThe consolidated financial statements of Corbion nv have been prepared in accordance with the International Financial Reporting Standards (IFRS) adopted by the European Union.
\n\nIn 2022, Corbion applied all the new and amended standards and interpretations published by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC), if and insofar as these applied to Corbion and were effective as at 1 January 2022. Corbion did not have to change its accounting policies or make retrospective adjustments as a result of adopting these standards.
\n\nA number of new standards are effective for annual periods beginning on or after 1 January 2023 and earlier application is permitted; however, Corbion has not yet adopted the new or amended standards in preparing these consolidated financial statements.
\n\n\nThe following amended standards and interpretations are not expected to have a significant impact on Corbion's consolidated financial statements.
\n\nIFRS 17 Insurance Contracts
\n\n\nAmendments to IAS 1 Presentation of Financial Statements
\n\n\nThe consolidation includes the financial data of Corbion nv and its group companies (together Corbion). All inter-company receivables, debts, and transactions have been eliminated. Group companies are companies in which Corbion nv exercises control. The results of acquisitions and divestments are recognized from the moment that control is obtained or transferred.
\n\n\nControl is achieved when Corbion:
\n\nhas power over the investee;
\n\n\nis exposed, or has rights to variable returns from its involvement with the investee; and
\n\n\nis able to use its power to affect the investee's returns.
\n\n\nCorbion reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.
\n\n\nWhen Corbion loses control over a group company, it derecognizes the assets and liabilities of the group company, and any related non-controlling interests and other components of equity. Any resulting gain or loss is recognized in profit or loss. Any interest retained in the former group company is measured at fair value when control is lost.
\n\nThe consolidated financial statements are in euros. The euro is Corbion nv\u2019s functional and presentation currency. The functional currency is the currency of the primary environment where the group company operates and may therefore differ from one company to another. Transactions in other than the functional currency are translated at the exchange rates that apply on the transaction date. Any monetary assets and liabilities resulting from such transactions are translated at the exchange rates as at the balance sheet date. Any exchange rate differences are recognized in the income statement, except when deferred in other comprehensive income (OCI) as qualifying cash flow hedges and net investment hedges.
\n\n\nThe assets and liabilities of consolidated foreign group companies and the long-term foreign-currency loans, which have been taken out to finance these subsidiaries, are converted to euros as at the balance sheet date, taking taxes into account. The subsequent currency translation differences are incorporated in the translation reserve in equity. The results of the foreign group companies are translated to euros on the basis of average exchange rates. The difference between net profit on the basis of average exchange rates and net profit on the basis of the exchange rates as at the balance sheet date is incorporated in the translation reserve in equity. The same applies to exchange rate differences arising from borrowings and other financial instruments if they hedge the currency risk related to net investments. If a foreign operation is divested or scaled down the associated cumulative currency translation differences are recognized as result in the income statement.\t
\n\nLand, buildings, machinery and equipment, and other operating assets are valued at the acquisition price or the cost of production, subject to straight-line depreciation calculated over the estimated economic life, the estimated residual value, and any accumulated impairment losses. The cost of production includes the cost of materials and direct labor and an attributable part of the indirect costs. Land is not depreciated. Grants are deducted from the acquisition price or the production costs of the assets to which the grant relates. Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to Corbion. Depreciation methods, useful lives, and residual values are reviewed at each reporting date and adjusted if appropriate.
\n\nAt inception of a contract, the group assesses whether a contract conveys the right to control the use of an identified asset for a period in exchange for consideration, in which case it is classified as a lease.
\n\n\nThe group recognizes a right-of-use asset (lease asset) and a lease liability at the lease commencement date. The asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to restore the underlying asset, less any lease incentives received.
\n\n\nThe lease asset is subsequently depreciated using the straight-line method from the commencement date to the end of the useful life of the right-of-use asset, considered to be indicated by the lease term. The lease asset is periodically adjusted for certain remeasurements of the lease liability and impairment losses (if any).
\n\n\nThe lease liability is initially measured at the present value of outstanding lease payments, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the group\u2019s incremental borrowing rate. Generally, Corbion uses its incremental borrowing rate as the discount rate.
\n\n\nThe lease liability is measured at amortized cost using the effective interest method and is remeasured when there is a change in future lease payments arising from a change in an index or rate or if the group changes its assessment of whether it will exercise a purchase, extension, or termination option. A corresponding adjustment is made to the carrying amount of the right-of-use asset with any excess over the carrying amount of the asset being recognized in profit or loss.
\n\n\nPayments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognized on a straight-line basis as an expense in profit or loss.
\n\nGoodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer\u2019s previously held equity interest in the acquiree (if any) over the net of the acquisition date amounts of the identifiable assets acquired and liabilities assumed. Goodwill is determined based on a comprehensive purchase price allocation analysis supported by subject matter expert calculations.
\n\n\nGoodwill is valued at cost less impairment. Goodwill is tested for impairment annually \u2013 or more often if there are indications for impairment. Impairment is the amount by which the book value of the goodwill of a cash-generating unit exceeds the recoverable amount, being the higher of (a) value in use and (b) fair value less costs of disposal. The value in use is the present value of the cash flows which the unit is expected to generate. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill\u00a0allocated to the unit and then to the other assets of the unit pro-rata based on the carrying amount of each asset in the unit. If impairment is incurred, the impairment is charged to the income statement. An impairment loss recognized for goodwill is not reversed in subsequent periods.
\n\n\nWhen an entity or activity is sold or closed down the goodwill allocated to the entity or activity is included in the calculations for the result of the sale.
\n\nThe customer base comprises the part of the paid acquisition sum which, upon acquisition, is allocated to the value of the acquired customer base. It is valued at fair value as at the acquisition date and amortized using a straight-line method over the estimated economic life. Amortization charges arising from the customer base are recognized in selling expenses.
\n\nBrands and licenses comprise the part of the paid acquisition sum which is allocated to the value of the acquired trademarks and product licenses. Brands and licenses are valued at fair value as at the acquisition date and subject to straight-line amortization calculated over the estimated economic life. Amortization charges arising from brands and licenses are recognized in selling expenses.
\n\nResearch and development costs comprise the part of the paid acquisition sum which is allocated to the value of the acquired research and development costs. These costs are valued at fair value as at the acquisition date. Own research costs are not capitalized, but charged to the income statement. Own development costs are capitalized if the appropriate criteria are met. Research and development costs are valued at cost and amortized using a straight-line method over the estimated economic life. Amortization charges arising from research and development costs are recognized in research and development costs.
\n\nOther intangible fixed assets consist primarily of capitalized or acquired third-party software and licenses and directly attributable personnel costs.
\n\n\nOther intangible fixed assets are valued at historical cost if capitalized or at fair value if acquired and amortized on a straight-line basis over the estimated economic life. Software and licenses amortization charges are recognized in general and administrative expenses. Emission rights are not recognized in the statement of financial position as cost is zero.
\n\nAt each reporting date an assessment is made whether there is any indication that non-current assets may be impaired. If indicators of impairment exist, the recoverable amount of the asset is estimated. If it is not possible
\n\n\nto estimate the recoverable amount of an individual asset, the recoverable amount of the cash-generating unit to which it belongs is estimated. Irrespective of whether there is any indication of impairment, Corbion also tests an intangible asset with an indefinite useful life or an intangible asset not yet available for use for impairment annually by comparing its carrying amount with its recoverable amount.
\n\n\nThe recoverable amount is the higher of an asset\u2019s fair value less costs of disposal and the asset\u2019s value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks inherent to the asset. An impairment loss is recognized in the income statement to the amount by which the asset\u2019s carrying amount exceeds its recoverable amount.
\n\n\nIn subsequent years, an assessment is made whether indications exist that impairment losses previously recognized for non-current assets other than goodwill may no longer exist or may have decreased. If any such indication exists, the recoverable amount of that asset is recalculated and, if required, its carrying amount is increased to the revised recoverable amount. The increase is recognized in operating income as an impairment reversal. An impairment reversal is recognized only if it arises from a change in the assumptions that were used to calculate the recoverable amount. The increase in an asset\u2019s carrying amount due to an impairment reversal is limited to the depreciated amount that would have been recognized had the original impairment not occurred.
\n\nInvestments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations each investor has rather than the legal structure of the joint arrangement. Joint operations arise where Corbion has rights to the assets and obligations relating to the arrangement and therefore accounts for its share of assets, liabilities, revenue, and expenses. Joint ventures arise where Corbion has rights to the net assets of the arrangement and therefore equity accounts for its interest.
\n\n\nAssociates are entities over which Corbion has significant influence but not control, generally involving a shareholding of between 20% and 50% of the voting rights. Significant influence is the power to participate in the financial and operating policy decisions of the entity but is not control or joint control over those policies. Associates are accounted for using the equity method.
\n\n\nUnder the equity method, investments in joint ventures and associates are measured initially at cost and subsequently adjusted for post-acquisition changes in Corbion\u2019s share of the net assets of the investment (net of any accumulated impairment in the value of individual investments). Where necessary, adjustments are made to the financial figures of joint ventures and associates for group reporting purposes to ensure consistency with the accounting policies of Corbion.
\n\n\nUnrealized gains on transactions between Corbion and its joint ventures and associates are eliminated to the extent of Corbion\u2019s stake in these investments. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the assets transferred.
\n\nDeferred taxes relate to tax loss carry forward and liabilities and assets arising from temporary differences between the tax bases and their carrying amounts in the consolidated financial statements. Deferred taxes are determined using tax rates that have been enacted at the balance sheet date and are expected to apply when the related deferred income tax is realized or the deferred tax liability is settled. Deferred tax assets are recognized if and insofar that it is likely that future taxable profit will be available against which the temporary difference and tax loss carry forward can be utilized.
\n\n\nTax assets and liabilities are netted when there is a legal right and the intention to offset. Deferred tax assets and liabilities with the same term and relating to the same fiscal unities and same tax authority are offset against each other.
\n\nInventories of raw materials, consumables, technical materials, and packaging are stated at the lower of cost (first in, first out) and net realizable value. Inventories of work in progress and finished products are stated at the lower of production cost and net realizable value. Total cost of production includes payroll costs and materials and an attributable part of the indirect production costs.
\n\nTrade receivables and debt securities issued are initially recognized upon origination. All other financial assets and financial liabilities are initially recognized when Corbion becomes a party to the contractual provisions of the instrument.
\n\n\nA financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.
\n\nOn initial recognition, a financial asset is classified as measured at amortized cost, at fair value through other comprehensive income (FVOCI) \u2013 debt investment, at FVOCI \u2013 equity investment, or at FVTPL.
\n\n\nFinancial assets are not reclassified subsequent to their initial recognition unless Corbion changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model. A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:
\n\nit is held within a business model whose objective is to hold assets to collect contractual cash flows; and
\n\n\nits contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
\n\n\nA debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
\n\nit is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
\n\n\nits contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
\n\n\nOn initial recognition of an equity investment that is not held for trading, Corbion may irrevocably elect to present subsequent changes in the investment\u2019s fair value in OCI. This election is made on an investment-by-investment basis.
\n\n\nAll financial assets not classified as measured at amortized cost or FVOCI (see above) are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
\n\n\nFinancial assets at FVTPL are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.
\n\n\nFinancial assets at amortized cost are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses, and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.
\n\n\nDebt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses, and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.
\n\n\nEquity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and never reclassified to profit or loss.
\n\nFinancial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, if it is a derivative, or designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.
\n\nCorbion derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or when it transfers the rights to receive the contractual cash flows in a transaction through which substantially all of the risks and rewards of ownership of the financial asset are transferred or through which Corbion neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.
\n\n\nIf, however, Corbion enters into transactions whereby it transfers assets recognized in its statement of financial position, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognized.
\n\nCorbion derecognizes a financial liability when its contractual obligations are discharged, cancelled, or expired. Corbion also derecognizes 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 recognized at fair value.
\n\n\nOn 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 recognized in profit or loss.
\n\nFinancial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when, the group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.
\n\nCorbion holds derivative financial instruments to hedge its foreign currency and commodity risk exposures. Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met.
\n\n\nDerivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognized in profit or loss.
\n\n\nCorbion designates certain derivatives as hedging instruments to hedge the variability in cash flows associated with highly probable forecast transactions arising from changes in foreign exchange rates, commodities, and certain non-derivative financial liabilities that hedge the foreign exchange risk associated with a net investment in a foreign operation.
\n\n\nAt inception of designated hedging relationships, Corbion documents the risk management objective and strategy for undertaking the hedge. Corbion also documents the economic relationship between the hedged item and the hedging instrument, including whether the changes in cash flows of the hedged item and hedging instrument are expected to offset each other.
\n\nWhen a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income and accumulated in the hedge reserve in equity. The effective portion of changes in the fair value of the derivative that is recognized in other comprehensive income is limited to the cumulative change in fair value of the hedged item, determined on a present value basis, from inception of the hedge. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in profit or loss.
\n\n\nWhen the hedged forecast transaction subsequently results in the recognition of a non-financial item such as inventory, the amount accumulated in the hedge reserve and the cost of the hedge reserve are included directly in the initial cost of the non-financial item when it is recognized.
\n\n\nFor all other hedged forecast transactions, the amount accumulated in the hedge reserve and the cost of the hedge reserve are reclassified to profit or loss for the period(s) in which the hedged expected future cash flows affect profit or loss.
\n\n\nIf the hedge no longer meets the criteria for hedge accounting or the hedging instrument expires, is sold, terminated, or exercised, then hedge accounting is discontinued prospectively. When hedge accounting for cash flow hedges is discontinued, the amount that has been accumulated in the hedge reserve remains in equity until, for a hedge of a transaction resulting in the recognition of a non-financial item, it is included in the non-financial item\u2019s cost on its initial recognition or, for other cash flow hedges, it is reclassified to profit or loss for the period(s) in which the hedged expected future cash flows affect profit or loss.
\n\n\nIf the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in the hedge reserve and the cost of the hedge reserve are immediately reclassified to profit or loss.
\n\nWhen a derivative instrument or a non-derivative financial liability is designated as the hedging instrument in a hedge for a net investment in a foreign operation, the effective portion, for a derivative, of changes in the fair value of the hedging instrument or, for a non-derivative, of foreign exchange gains and losses is recognized in other comprehensive income and presented in the translation reserve within equity. Any ineffective portion of the changes in the fair value of the derivative or foreign exchange gains and losses on the non-derivative is recognized immediately in profit or loss. The amount recognized in other comprehensive income is reclassified to profit or loss as a reclassification adjustment upon disposal of the foreign operation.
\n\nIncremental costs directly attributable to the issue of ordinary shares and share options are recognized as an equity deduction, net of tax. The price paid for repurchased shares (treasury shares) is deducted from equity until the shares are cancelled or reissued. Dividend to be distributed to the holders of ordinary shares is recognized as a liability upon approval of the profit appropriation by the annual General Meeting of Shareholders.
\n\n\nCorbion runs share plans for the Board of Management and senior management. The fair value of the right to shares on the date of allocation is recognized in the income statement as payroll costs over the vesting period of the awards with a corresponding increase in equity.
\n\nA defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate pension plan or insurance company and will have no legal or constructive obligation to pay further amounts. Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.
\n\n\nFor defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurements, comprising actuarial gains and losses, the effect of changes to the asset ceiling (if applicable), and the return on plan assets (excluding interest), are reflected immediately in the statement of financial position with a charge or credit recognized in other comprehensive income for the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. Past-service costs are recognized in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorized as follows:
\n\nService cost (including current-service cost, past-service cost, as well as gains and losses on curtailments and settlements)
\n\n\nNet interest expense or income
\n\n\nRemeasurements
\n\n\nThe first two components of defined benefit costs are presented in profit or loss. Curtailment gains and losses are accounted for as past-service costs.
\n\n\nThe retirement benefit obligation in the consolidated statement of financial position represents the actual deficit or surplus in the defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.
\n\n\nA liability for a termination benefit is recognized at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognizes any related restructuring costs.
\n\n\nCorbion accounts for its multi-employer defined benefit plan as if it were a defined contribution plan for the following reasons:
\n\nCorbion is affiliated to an industry-wide pension fund and uses the pension scheme in common with other participating companies.
\n\n\nUnder the regulations of the pension plan, the only obligation these participating companies have towards the pension fund is to pay the annual premium liability. Participating companies are under no obligation whatsoever to pay off any deficits the pension plan may incur. Nor have they any claim to any potential surpluses.
\n\n\nThe other long-term employee commitments relate mainly to anniversary commitments, past-service commitments, conditional incentive plans, and health insurance. These provisions are recognized on the basis of estimates that are consistent with the estimates used for the defined benefit obligations. However, all actuarial gains and losses are recognized in the income statement immediately.
\n\nProvisions relate to a legal or constructive obligation as a result of a past event, the amount of which is uncertain but can be estimated reliably and of which it is more likely than not that an outflow of resources is required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flow at a pre-tax rate that reflects the current market assessments of time value of money and the risks specific to the liability. A provision for reorganization is recognized after Corbion has approved a detailed and formal restructuring plan and the restructuring has either commenced or been announced publicly. A provision for a legal claim is recognized if a reliable estimate can be made of the expected outcome of the claim, measuring the claim as a weighting of all possible outcomes against their probabilities. A provision for an onerous contract is recognized when the expected benefits to be derived from the contract are lower than the unavoidable costs of fulfilling its terms and conditions. Unless the possibility of an outflow of resources embodying economic benefits is remote, a contingent liability is disclosed at the balance sheet.
\n\nInterest-bearing liabilities are recognized initially at fair value and subsequently at amortized cost using the effective interest method. Upon sale or settlement of interest-bearing liabilities any profits or losses are directly recognized in the income statement.
\n\nAn operating segment is an entity that engages in business activities from which it earns revenues and incurs expenses. All operating segments are reviewed regularly by the Board of Management to make decisions about resources to be allocated to the segments and assess their performance for which discrete financial information is available.
\n\nNet sales comprises the proceeds of goods delivered to third parties less discounts and value-added tax.
\n\n\nRevenue from the sale of goods in the normal course of business is recognized at a point in time when the performance obligation is met and based on the amount of the transaction price that is allocated to the performance obligation. The transaction price is the amount of the consideration to which the company expects to be entitled in exchange for transferring the promised goods to the customer. The consideration expected by the company may include fixed and/or variable amounts which can be impacted by sales returns, trade discounts, and volume rebates. Revenue from the sale of goods is recognized when control of the asset is transferred to the buyer and only when it is highly probable that a significant reversal of revenue will not occur as uncertainties related to a variable consideration have been resolved.
\n\nCost of sales contains the following components:
\n\nCosts of raw materials and consumables which relate to the cost of consumption of raw materials, consumables, and packaging materials. Costs of raw materials and consumables are recognized in the income statement when the risks and rewards of ownership of the goods sold have been transferred to a party outside the group. These costs include the purchase price of all raw materials, consumables, and all directly attributable costs.
\n\n\nProduction costs which are the costs relating to production operations.
\n\n\nWarehousing and distribution costs which relate to the costs of warehousing and transport, including transport insurance.
\n\n\nSelling expenses relate to the costs of marketing and sales.
\n\nGeneral and administrative expenses relate to the costs of administration, management, and IT.
\n\nFinancial income comprises interest income on cash and cash equivalents and interest income on loans to other parties. Interest income is recognized in the period to which it relates, using the effective interest method.
\n\n\nFinancial charges comprise interest expenses and exchange differences on borrowings, leases, impairments of available-for-sale assets, and other financial expenses. All borrowing costs are recognized in the income statement using the effective interest method.
\n\nTax on the result is calculated on the basis of the result before taxes, taking account of untaxed profit elements, non- and part-deductible costs, and fiscal facilities. The prevailing nominal tax rates are applied. Non-recoverable withholding taxes on foreign dividends are taken into account.
\n\n\nTaxes in the income statement for the year comprise current and deferred taxes. Taxes are recognized in the income statement unless they relate to items directly recognized in equity or other comprehensive income. Current tax is the expected tax rate payable on the taxable income for the year, using statutory tax rates at the balance sheet date, and any adjustment to tax payable in respect of previous years. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. Corbion measures its tax balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty.
\n\nThe consolidated cash flow statement is drawn up using the indirect method. The items in the consolidated income statement and consolidated statement of the financial position have been adjusted for changes that do not impact cash inflow and outflow in the reporting year. Cash flows in foreign currencies are translated to the functional currency at the average foreign exchange rates unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case cash flows are translated at the rate on the dates of the transactions.
\n\nCorbion makes use of accounting estimates and judgments. The inputs into our estimates and assumptions consider the climate-related matters on our critical accounting estimates. Corbion believes there is considerable uncertainty over these assumptions and how they will impact the buinsess operations and the cash flow projections. The estimates and assumptions have been based on the available information and regulations in place as of 31 December 2022.
\n\n\nDescribed below are the estimates and judgments as at the balance sheet date that carry a substantial risk of a material adjustment to the book value of assets and liabilities in the next financial year.
\n\nCorbion has a process in place to identify all assets and liabilities acquired, including intangible fixed assets. The judgments made in identifying all acquired assets, determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact the results of operations. Estimated fair values are based on information available around the acquisition date and on expectations and assumptions of anticipated discounted cash flows that have been assessed as reasonable by Corbion. For more information on acquisitions see Note 26.
\n\nEvery year, Corbion tests the goodwill for impairment based on the higher of fair value less cost to sell and the value-in-use method. The value in use is calculated on the basis of estimates and judgments of the expected cash flows which are discounted on a WACC basis. For a description of the main estimates, valuation assumptions, and a sensitivity analysis of the applied assumptions see Note 12.
\n\n(In)tangible fixed assets are tested for sustained impairment if there is an indication of possible impairment. This applies to intangible assets with indefinite useful lives or assets not yet available for use. A key factor is the recoverable amount which is calculated on the basis of estimates and assumptions of anticipated discounted cash flows, on the one hand, and an estimate of the fair value less cost to sell, on the other. For more information on impairments see Notes 10 and 12.
\n\nActuarial calculations are used to determine provisions for group personnel arrangements and net receivables or obligations from group pension plans. These calculations use assumptions in respect of future developments in salary, mortality, staff turnover, return on investments et cetera. Changes to these estimates and assumptions can lead to actuarial gains and losses which are recognized in the consolidated statement of comprehensive income. For more information on the applied assumptions see Note 21.
\n\nCorbion is subject to various tax systems across the world. Estimates and judgments are used to determine the tax items in the financial statements. Interpretation differences in tax liabilities are also taken into account. For more information on taxes see Note 22.\t
\n\nIn line with the management responsibilities and internal management reporting for its strategic decision-making process Corbion distinguishes between the segments Sustainable Food Solutions, Lactic Acid & Specialties, Algae Ingredients, and Incubator (together Core), and Non-core.
\n\n\nIn Sustainable Food Solutions, Corbion has evolved increasingly from an ingredients business into a solutions business. We plan to expand on this solutions model with natural food preservation and functional systems as our core capabilities, enabling us to accelerate growth in close adjacencies.
\n\n\nIn our Lactic Acid & Specialties business, we aim to capitalize on our market and technology leadership in lactic acid and lactic acid derivatives. Corbion leads the lactic acid market in technology, production capacity, geographic coverage, and breadth of portfolio.
\n\n\nAlgae Ingredients is a new segment (being carved out from the Incubator into its own reporting segment) recognizing the growth potential of this business and as a result of reaching EBITDA break-even in algae-based omega-3 DHA in June 2022 (before reallocation of G&A costs). By leveraging expertise in large-scale industrial fermentation, we anticipate significant further growth and profitability as a global supplier of algae ingredients providing nutritional benefits for human and animal diets.
\n\n\nIn our Incubator, where we develop early-stage initiatives, we work on five selected platforms: Algae portfolio extension, Biopolymers, Natural preservation, Circular raw materials, and Net zero. These long-term platforms are all linked to one of the three business units and embedded in their innovation programs.
\n\n\nNon-core activities comprise emulsifiers which have a declining strategic fit.\u00a0
\n\n\nTransfer prices between operating segments are on an arm\u2019s length basis in a manner similar to transactions with third parties.
\n| \u00a0 | Sustainable Food Solutions | Lactic Acid & Specialties | Algae Ingredients | Incubator | Core 1 | Non-core | Corbion total operations 2 | |||||||
| \u00a0 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 |
Income statement information | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Net sales | 780.0 | 584.2 | 400.1 | 312.3 | 74.3 | 30.7 | \u00a0 | \u00a0 | 1,254.4 | 927.2 | 203.5 | 143.6 | 1,457.9 | 1,070.8 |
Operating result | 62.8 | 55.7 | 47.6 | 30.1 | -13.4 | -17.0 | -10.0 | -3.8 | 87.0 | 65.0 | 23.8 | 17.0 | 110.8 | 82.0 |
Adjustments to operating result | -6.8 | -13.3 | 0.6 | 9.9 | 2.4 | 0.2 | 0.8 | 0.5 | -3.0 | -2.7 | 0.2 | -7.6 | -2.8 | -10.3 |
Adjusted operating result | 56.0 | 42.4 | 48.2 | 40.0 | -11.0 | -16.8 | -9.2 | -3.3 | 84.0 | 62.3 | 24.0 | 9.4 | 108.0 | 71.7 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Alternative non-IFRS performance measures | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
EBITDA | 102.7 | 88.4 | 66.1 | 68.4 | -5.7 | -10.8 | -10.0 | -3.8 | 153.1 | 142.2 | 34.1 | 29.2 | 187.2 | 171.4 |
Adjustments to EBITDA | -6.8 | -13.3 | 0.6 | -11.7 | 2.4 | 0.2 | 0.8 | 0.5 | -3.0 | -24.3 | 0.2 | -11.3 | -2.8 | -35.6 |
Adjusted EBITDA | 95.9 | 75.1 | 66.7 | 56.7 | -3.3 | -10.6 | -9.2 | -3.3 | 150.1 | 117.9 | 34.3 | 17.9 | 184.4 | 135.8 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Ratios alternative non-IFRS performance measures | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
EBITDA margin % | 13.2 | 15.1 | 16.5 | 21.9 | -7.7 | -35.2 | \u00a0 | \u00a0 | 12.2 | 15.3 | 16.8 | 20.3 | 12.8 | 16.0 |
Adjusted EBITDA margin % | 12.3 | 12.9 | 16.7 | 18.2 | -4.4 | -34.5 | \u00a0 | \u00a0 | 12.0 | 12.7 | 16.9 | 12.5 | 12.6 | 12.7 |
\nCorbion generates almost all of its revenues from the sale of goods.
\n\nIn the above table and elsewhere in the financial statements a number of non-IFRS performance measures are presented. Management is of the opinion that these so-called alternative performance measures might be useful for the readers of these financial statements. Corbion management uses these performance measures to make financial, operational, and strategic decisions and evaluate performance of the segments.\u00a0
\n\n\nThe alternative performance measures can be calculated as follows:
\n\nEBITDA is the operating result before depreciation, amortization, and impairment of (in)tangible fixed assets.
\n\n\nEBITDA margin is EBITDA divided by net sales x 100.
\n\n| \u00a0 | Net sales | |
| \u00a0 | 2022 | 2021 |
The Netherlands | 33.5 | 24.9 |
Rest of EMEA | 277.1 | 191.8 |
US | 674.2 | 499.2 |
Rest of North America | 44.5 | 77.4 |
Latin America | 193.8 | 83.7 |
Asia | 234.8 | 193.8 |
Corbion total operations | 1,457.9 | 1,070.8 |
\nThe above sales information is based on the location of the customer.\u00a0
\n| \u00a0 | Non-current assets | |
| \u00a0 | 2022 | 2021 |
The Netherlands | 214.4 | 197.0 |
Rest of EMEA | 30.7 | 27.2 |
US | 304.9 | 259.0 |
Rest of North America | 9.8 | 9.4 |
Brazil | 103.7 | 73.4 |
Thailand | 252.9 | 144.8 |
Rest of Asia | 4.6 | 3.2 |
Corbion total operations | 921.0 | 714.0 |
\nThe above information is based on the geographical location of the assets. Non-current assets exclude those relating to financial instruments, deferred tax assets, and post-employment benefit assets.
\n\n\nAt year end 2022, Corbion had a total number of employees (FTEs) of 2.601, of which 643 in the Netherlands, 200 in the rest of Europe, 897 in North America, 526 in Latin America and 335 in Asia.\u00a0At year end 2021, Corbion had a total number of employees (FTEs) of 2.493, of which 628 in the Netherlands, 182 in the rest of Europe, 878 in North America, 496 in Latin America and 309 in Asia.
\n\n| \u00a0 | Net sales | |
| \u00a0 | 2022 | 2021 |
Preservation | 357.1 | 248.2 |
Functional systems | 330.6 | 256.4 |
Single ingredients | 92.3 | 79.6 |
Sustainable Food Solutions | 780.0 | 584.2 |
Lactic acid | 169.1 | 147.4 |
Lactate esters | 83.6 | 55.8 |
Lactates | 59.7 | 44.0 |
Biopolymers | 49.2 | 37.3 |
Other | 38.5 | 27.8 |
Lactic Acid & Specialties | 400.1 | 312.3 |
Algae Ingredients | 74.3 | 30.7 |
Incubator | 0.0 | 0.0 |
Non-core activities | 203.5 | 143.6 |
Corbion total operations | 1,457.9 | 1,070.8 |
\nFulfillment of the performance obligations related to goods sold is measured using the commercial shipment terms as an\u00a0indicator for the transfer of control. Fulfillment of the performance obligations for services rendered is identified\u00a0according to the individual contract. The payment terms are determined per business segment on a customer basis. Corbion\u00a0has neither specific obligations for returns or refunds, nor specific warranties or other related obligations.
\n\n| \u00a0 | 2022 | 2021 |
|---|---|---|
Bookprofit sale Totowa warehouse | 9.7 | \u00a0 |
Bookprofit on sale of a plot of land in the Dutch municipality of Breda | -0.2 | 18.4 |
Bookprofit on sale of the Frozen Dough activities | \u00a0 | 11.8 |
Release of milestone as a result of impairment on the FiberLive development | \u00a0 | 5.0 |
Remeasurement contingent purchase price SB Renewable Oils | -2.3 | -0.2 |
Total | 7.2 | 35.0 |
| \u00a0 | 2022 | 2021 |
Payroll | 194.1 | 169.5 |
Pension expenses \u2013 defined benefit pension plans | 0.5 | 0.5 |
Pension expenses \u2013 defined contribution pension plans | 14.6 | 13.0 |
Other social insurance | 20.5 | 18.1 |
Share-based remuneration | 4.8 | 3.5 |
Total | 234.5 | 204.6 |
| \u00a0 | 2022 | 2021 |
Depreciation of tangible fixed assets | 60.7 | 51.0 |
Amortization of intangible fixed assets | 15.7 | 13.1 |
Impairment of (in)tangible fixed assets | \u00a0 | 25.3 |
Total | 76.4 | 89.4 |
| \u00a0 | 2022 | 2021 |
Interest income | -3.4 | -1.9 |
Interest charges | 14.8 | 9.3 |
Exchange rate differences | -9.1 | 2.9 |
Interest expense on defined benefit pension plans - net | \u00a0 | -0.1 |
Capitalized borrowing costs | -1.6 | \u00a0 |
Unwinding of contingent consideration | 1.2 | 2.2 |
Interest expense on lease liabilities | 2.6 | 2.2 |
Other | 0.8 | -0.4 |
Total | 5.3 | 14.2 |
| \u00a0 | 2022 | 2021 |
Current tax | 20.4 | 10.6 |
Current tax (prior-year adjustments) | -0.2 | -0.6 |
Deferred tax | 6.2 | -1.8 |
Tax charge (income) | 26.4 | 8.2 |
| \u00a0 | 2022 | 2021 |
Result before taxes | 116.4 | 86.5 |
Applicable tax charge at average statutory tax rate | 28.2 | 21.4 |
Income not subject to tax | -4.1 | -7.6 |
Expenses not deductible for tax purposes | 2.5 | 2.4 |
Effect of the reversal of tax assets | 1.1 | -8.1 |
Currency effects | -0.3 | 1.9 |
Additions to/releases from tax provision | \u00a0 | -0.9 |
Changes in tax rates | \u00a0 | -0.5 |
Other effects | -1.0 | -0.4 |
Tax charge (income) | 26.4 | 8.2 |
Average tax rate on operations | 22.7% | 9.5% |
\nThe average statutory tax rate is the average of the statutory tax rates in the countries where Corbion operates, weighted on the basis of the result before taxes in each of these countries.
\n\n\nThe main impact of income not subject to tax is caused by the positive result recognized with respect to the joint venture with TotalEnergies which is not subject to tax under the provisions of the participation exemption (impact \u20ac -2.8 million). The impact of investment deductions and other non-taxable income amount to \u20ac -1.3 million.
\n\n\nExpenses not deductible for tax purposes include the effect of non-deductible costs in multiple jurisdictions (impact \u20ac 2.5 million).
\n\n\nThe effect of the reversal of tax assets is caused by the recognition of a valuation allowance of tax assets related to tax loss carry forwards and temporary differences in certain jurisdictions (\u20ac 2.2 million) as well as the recognition of previously unrecognized deferred tax assets related to tax loss carry forwards in certain jurisdictions (\u20ac -1.1 million).
\n\n\nThe impact of currency effects (\u20ac -0.3 million) is caused by reporting entities which have a tax reporting currency which deviates from their functional currency.
\n\n\nOther effects include adjustments in respect of current-year events and the impact of changes to relevant regulations, facts, or other factors compared to those used in establishing the current tax position or deferred tax balance in previous years (impact \u20ac -1.0 million).
\n\n\nThe difference between the average tax rates 2022 (22.7%) and 2021 (9.5%) is mainly attributable to the effect in 2021 of the recognition of the previously unrecognized deferred tax asset which materialized as a result of the sale of the plot of land in Breda.
\n\n\nThe realization of deferred tax assets depends on the expected future profitability. Deferred tax assets are not recognized if it is not likely that a tax benefit can be realized.
\n| \u00a0 | 2022 | 2021 |
Tax liability due to loan-related exchange rate differences | -3.9 | -4.5 |
Tax liability due to hedge results of financial instruments | -1.8 | 0.9 |
Tax charge (income) recognized in equity | -5.7 | -3.6 |
\nEarnings per ordinary share are calculated by dividing the profit available for holders of ordinary shares by the weighted average number of outstanding ordinary shares in Corbion nv.
\n\n\nDiluted earnings per ordinary share are calculated by dividing the profit available for holders of ordinary shares by the weighted average number of outstanding ordinary shares in Corbion nv adjusted for the effects of potential exercise of share rights by the Board of Management and senior management.
\n| \u00a0 | 2022 | 2021 |
Result after taxes | 90.0 | 78.3 |
Profit available for holders of ordinary shares (A) | 90.0 | 78.3 |
| \u00a0 | \u00a0 | \u00a0 |
Weighted average number of outstanding ordinary shares (B) | 59.0 | 58.9 |
Plus: ordinary shares related to share rights | 0.5 | 0.5 |
Weighted average number of outstanding ordinary shares after dilution (C) | 59.5 | 59.4 |
| \u00a0 | \u00a0 | \u00a0 |
Per ordinary share in euros | \u00a0 | \u00a0 |
Basic earnings (A/B) | 1.53 | 1.33 |
Diluted earnings (A/C) | 1.51 | 1.32 |
| \u00a0 | Land | Buildings | Machinery and equipment | Other fixed assets | Under construction | Total |
1\u00a0January 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Acquisition prices | 14.3 | 178.6 | 653.3 | 65.9 | 64.2 | 976.3 |
Cumulative depreciation/impairments | \u00a0 | -87.2 | -486.3 | -47.4 | \u00a0 | -620.9 |
Book value | 14.3 | 91.4 | 167.0 | 18.5 | 64.2 | 355.4 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Movements | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Capital expenditure | \u00a0 | 0.1 | 0.7 | 0.4 | 149.7 | 150.9 |
Divestments | \u00a0 | \u00a0 | -0.9 | -0.1 | \u00a0 | -1.0 |
Exchange rate differences | \u00a0 | 1.6 | 4.0 | 0.2 | 1.9 | 7.7 |
Acquisition of group companies | \u00a0 | \u00a0 | 0.3 | 0.2 | \u00a0 | 0.5 |
Depreciation | \u00a0 | -6.0 | -30.1 | -4.1 | \u00a0 | -40.2 |
Impairment | \u00a0 | \u00a0 | -2.0 | \u00a0 | \u00a0 | -2.0 |
Assets classified as held for sale | -0.6 | -0.5 | \u00a0 | \u00a0 | \u00a0 | -1.1 |
Other | 0.6 | 11.2 | 45.9 | 0.7 | -61.8 | -3.4 |
Net movement in book value | 0.0 | 6.4 | 17.9 | -2.7 | 89.8 | 111.4 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
31\u00a0December 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Acquisition prices | 14.3 | 189.8 | 707.0 | 63.6 | 154.0 | 1,128.7 |
Cumulative depreciation/impairments | \u00a0 | -92.0 | -522.1 | -47.8 | \u00a0 | -661.9 |
Book value | 14.3 | 97.8 | 184.9 | 15.8 | 154.0 | 466.8 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Movements | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Capital expenditure | \u00a0 | \u00a0 | 1.3 | 2.3 | 212.7 | 216.3 |
Divestments | \u00a0 | \u00a0 | -0.4 | -0.1 | \u00a0 | -0.5 |
Exchange rate differences | 0.8 | 6.9 | 9.0 | 1.3 | 6.9 | 24.9 |
Depreciation | \u00a0 | -6.7 | -35.6 | -4.4 | \u00a0 | -46.7 |
Other | \u00a0 | 6.3 | 61.7 | 2.4 | -70.1 | 0.3 |
Net movement in book value | 0.8 | 6.5 | 36.0 | 1.5 | 149.5 | 194.3 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
31\u00a0December 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Acquisition prices | 15.1 | 207.8 | 794.5 | 71.4 | 303.5 | 1,392.3 |
Cumulative depreciation/impairments | \u00a0 | -103.5 | -573.6 | -54.1 | \u00a0 | -731.2 |
Book value | 15.1 | 104.3 | 220.9 | 17.3 | 303.5 | 661.1 |
Depreciation rates | \u00a0 | 2.5 - 4% | 6.7-12.5% | 20-50% | \u00a0 | \u00a0 |
\nIn 2022, no impairments were recorded.
\n\n\nFor the Algae Ingredients business, management has identified triggers to reassess the valuation of\u00a0tangible fixed assets because of improved business performance, offset by adverse developments in the WACC. The cash flow projections are derived from\u00a0the financial and business plans for 2023 which have been approved by the Board of Management. The\u00a0key assumptions in the cash flow projections are related to revenue projections, EBITDA developments,\u00a0the rates used for discounting cash flows and the terminal growth rate. In 2022 no additional impairment\u00a0loss or a reversal of an impairment was recognized.
\n\n\nIn 2021, an impairment was recorded for assets related to the FiberLive project.
\n\n\nThe Other line item relates to transfers from Under construction to other categories within Property, plant, and equipment and transfers to intangible fixed assets and inventories.
\n\n| \u00a0 | Land | Buildings | Machinery and equipment | Other fixed assets | Total |
Book value 31\u00a0December 2021 | 0.2 | 59.6 | 1.1 | 5.2 | 66.1 |
Additions | \u00a0 | 3.2 | 0.8 | 7.3 | 11.3 |
Modification to lease term | \u00a0 | 0.1 | 0.1 | 0.7 | 0.9 |
Exchange rate differences | \u00a0 | 3.8 | \u00a0 | 0.3 | 4.1 |
Depreciation | \u00a0 | -9.1 | -1.0 | -3.9 | -14.0 |
Book value 31\u00a0December 2022 | 0.2 | 57.6 | 1.0 | 9.6 | 68.4 |
\nThe maturity of the lease liabilities is as follows.
\n| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Current | 12.3 | 9.9 |
Non-current | 61.2 | 59.5 |
Total lease liabilities | 73.5 | 69.4 |
\nCorbion's main leases are contracts for office locations, warehouses, and leased vehicles (the main category in Other fixed assets). Some property leases contain extension options exercisable by Corbion. Corbion assesses at the lease commencement date whether it is reasonably certain that the extension options will be exercised. Corbion reassesses whether it is reasonably certain that the extension options will be exercised if there is a significant event or significant change in circumstances within its control. As at 31 December 2022, potential future undiscounted cash outflows of \u20ac 80.8 million (31 December 2021: \u20ac 67.8 million) have not been included in the lease liability because it is not reasonably certain that the leases will be extended. Lease payments are in substance fixed and the group had no leases with variable lease payments.
\n\n| \u00a0 | Goodwill | Customer base | Brands and licenses | Development costs | Other intangible fixed assets | Total |
1 January 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Acquisition prices | 73.2 | 22.6 | 33.2 | 41.6 | 64.9 | 235.5 |
Cumulative amortization/impairments | -3.1 | -17.8 | -8.7 | -10.2 | -30.0 | -69.8 |
Book value | 70.1 | 4.8 | 24.5 | 31.4 | 34.9 | 165.7 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Movements | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Capital expenditure | \u00a0 | \u00a0 | \u00a0 | 2.6 | 11.5 | 14.1 |
Exchange rate differences | 4.5 | 0.1 | 0.2 | 0.5 | 0.2 | 5.5 |
Acquisition of group companies | 3.1 | 2.0 | 0.1 | 2.9 | \u00a0 | 8.1 |
Amortization | \u00a0 | -0.8 | -0.5 | -3.3 | -8.5 | -13.1 |
Impairment | \u00a0 | \u00a0 | -19.9 | -3.4 | \u00a0 | -23.3 |
Other | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 0.9 | 0.9 |
Net movement in book value | 7.6 | 1.3 | -20.1 | -0.7 | 4.1 | -7.8 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
31\u00a0December 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Acquisition prices | 81.0 | 25.6 | 34.1 | 47.9 | 75.5 | 264.1 |
Cumulative amortization/impairments | -3.3 | -19.5 | -29.7 | -17.2 | -36.5 | -106.2 |
Book value | 77.7 | 6.1 | 4.4 | 30.7 | 39.0 | 157.9 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Movements | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Capital expenditure | \u00a0 | \u00a0 | \u00a0 | 0.7 | 13.9 | 14.6 |
Exchange rate differences | 5.8 | 0.7 | 0.2 | 0.2 | 0.2 | 7.1 |
Amortization | \u00a0 | -1.0 | -0.6 | -3.7 | -10.4 | -15.7 |
Other | \u00a0 | \u00a0 | \u00a0 | -0.3 | \u00a0 | -0.3 |
Net movement in book value | 5.8 | -0.3 | -0.4 | -3.1 | 3.7 | 5.7 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
31\u00a0December 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Acquisition prices | 87.0 | 27.2 | 34.8 | 49.2 | 90.1 | 288.3 |
Cumulative amortization/impairments | -3.5 | -21.4 | -30.8 | -21.6 | -47.4 | -124.7 |
Book value | 83.5 | 5.8 | 4.0 | 27.6 | 42.7 | 163.6 |
Amortization rates | \u00a0 | 7 - 20% | 5 - 10% | 5 - 33.3% | 33.3% | \u00a0 |
\nGoodwill is allocated to Corbion's cash-generating units identified as the operating segments. The operating segments Sustainable Food Solutions and Lactic Acid & Specialties represent the levels to which company goodwill is allocated for the purposes of impairment testing. The Algae Ingredients and Incubator segments do not contain any goodwill.
\n\n\nKey reasons for this approach are:
\n\nIt represents a non-arbitrary, reasonable, and consistent basis for the allocation of goodwill.
\n\n\nThe allocation is in line with the expected synergies at the time of an acquisition with benefits for more than one entity.
\n\n\nThe allocation represents the lowest level where goodwill is monitored by the Board of Management, while not being larger than the operating segments.
\n\n| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Sustainable Food Solutions | 81.3 | 75.5 |
Lactic Acid & Specialties | 2.2 | 2.2 |
Total operations | 83.5 | 77.7 |
\nThe recoverable amount of both segments is determined using a value-in-use method. The main assumptions used are derived from the financial and business plans for 2023 which have been approved by the Board of Management. From 2024 onwards a stable growth of 1% (consistent with the goodwill impairment test in prior year) is taken into account in combination with a relatively constant cost structure.
\n\n\nThe future cash flows are discounted on the basis of the WACC before tax.
\n| \u00a0 | As at 31-12-2022 | As at 31-12-2021 | ||
| \u00a0 | pre-tax | post-tax | pre-tax | post-tax |
Sustainable Food Solutions | 10.4% | 8.4% | 6.9% | 5.8% |
Lactic Acid & Specialties | 11.9% | 9.5% | 7.2% | 5.8% |
\nIn addition, sensitivity analyses have been carried out in respect of the assumptions using:
\n\nterminal value growth of 0%;
\n\n\na discount rate of +1%.
\n\n\nBoth assumptions applicable at the same time would not lead to any impairment.
\n\n\nGiven the above assumptions and the outcome of analyses, the Board of Management has concluded that the value in use of both segments is not lower than the book value of the segments including goodwill.
\n\n\nThe majority of the brands and licenses consist of assets not yet available for use.
\n\nIn 2022, no impairments were recorded.
\n\n\nIn 2021, the following impairments were recorded:
\n\n\n
\n\nA partial impairment of \u20ac 19.6 million (recorded partly in the 'Brands and licenses' and partly in the 'Development costs' category) related to our FiberLive activities (part of the Lactic Acid & Specialties segment). This was based on a reassessment of\u00a0volume development and timing due to slower than expected technological developments. The\u00a0impairment on the intangible fixed assets has been recorded on the income statement line item 'Research and development costs'. Further, an impairment of \u20ac 2.0 million on Property, plant, and equipment has been recorded on the income statement line item 'Cost of sales'.
The recoverable amount (based on the value-in-use method)\u00a0of the projected cash flows underlying the impairment calculation amounts to \u20ac 2.4 million and is\u00a0sensitive to various assumptions, especially the volume, technological, and price development.\u00a0
\nA full impairment of \u20ac 3.8 million (recorded in the 'Brands and licenses' category) related to our FDCA business (part of the Incubator segment) based on a reassessment of\u00a0volume development and timing due to slower than expected technological developments. The\u00a0impairment has been recorded on the income statement line item 'Research and development costs'.
\n\n\nSet out below are the associates and joint ventures of the group as at 31 December 2022 which, in the opinion of management, are material to the group. The entity listed below has share capital consisting solely of ordinary shares, which are held directly by the group. The proportion of ownership interest is the same as the proportion of voting rights held.
\nName of entity | Country of incorporation | % of ownership interest | Nature of relationship | Measurement method | Carrying amount | |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 2022 | 2021 |
TotalEnergies Corbion bv | The Netherlands | 50% | Joint venture | Equity method | 27.9 | 23.2 |
\nTotalEnergies Corbion bv is a global leader in marketing, sale, and production of PolyLactic Acid (PLA). The principal places of business are the Netherlands for marketing and sales activities and Thailand for the main production activities.
\n\n\nAs it is a private entity, no quoted fair value price is available.
\n\n\nThe tables below provide summarized financial information on the joint ventures and associates that are material to the group. The information disclosed reflects the amounts presented in the financial statements of the respective joint ventures and associates, rather than Corbion's share of those amounts. They have been amended to reflect adjustments made by the entity when using the equity method, including fair value adjustments and modifications for differences in accounting policy.
\nTotalEnergies Corbion bv | 2022 | 2021 |
| \u00a0 | \u00a0 | \u00a0 |
Current assets | \u00a0 | \u00a0 |
Cash and cash equivalents | 15.1 | 31.7 |
Other current assets | 61.2 | 63.3 |
Total current assets | 76.3 | 95.0 |
Non-current assets | 138.0 | 128.1 |
Current liabilities | \u00a0 | \u00a0 |
Other current liabilities | 17.7 | 44.5 |
Total current liabilities | 17.7 | 44.5 |
Non-current liabilities | 137.0 | 129.2 |
Net assets | 59.6 | 49.4 |
| \u00a0 | \u00a0 | \u00a0 |
Reconciliation to carrying amounts | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 |
Opening net assets | 49.4 | 30.3 |
Comprehensive income for the period | 21.4 | 32.8 |
Dividends declared | -14.2 | -16.9 |
Exchange rate differences | 3.0 | 3.2 |
Closing net assets | 59.6 | 49.4 |
| \u00a0 | \u00a0 | \u00a0 |
Group's share (50%) | 29.8 | 24.7 |
Elimination of unrealized profit on downstream sales | -1.9 | -1.5 |
Carrying amount | 27.9 | 23.2 |
| \u00a0 | \u00a0 | \u00a0 |
Summarized statement of comprehensive income | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 |
Revenue | 165.8 | 159.8 |
Operating result | 36.0 | 47.8 |
Depreciation and amortization | -6.8 | -6.8 |
Interest expense | -6.7 | -4.0 |
Income tax expense | -7.5 | -10.9 |
| \u00a0 | \u00a0 | \u00a0 |
Profit for the period | 21.8 | 32.9 |
Other comprehensive income | -0.4 | -0.1 |
Total comprehensive income | 21.4 | 32.8 |
| \u00a0 | \u00a0 | \u00a0 |
Dividends received by Corbion | 14.3 | 4.2 |
\nThe agreement between shareholders stipulates an equal distribution of dividends between shareholders. For 2020 and 2021, the shareholders agreed to an uneven distribution, in such a way that the shareholders received an equal cumulative amount of (interim) dividend over those two years, but that amounts per shareholder in an individual year can differ.
\n\n\nIn December 2021 a dividend of $\u00a015 million was declared (of which $\u00a07.5 million to be distributed to Corbion) which was received in 2022.\u00a0Further, in 2022, a dividend of $\u00a015 million was declared (of which $\u00a07.5 million to be distributed to Corbion) which was also received in 2022.
\n\n| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Loans granted to joint venture TotalEnergies Corbion bv | 64.6 | 60.7 |
Long-term tax receivables | 32.7 | 22.9 |
Other | 2.1 | 11.2 |
Total | 99.4 | 94.8 |
| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Raw materials, consumables, technical materials, and packaging | 93.7 | 56.7 |
Work in progress | 17.4 | 11.2 |
Finished product | 226.8 | 167.0 |
Impairment provision | -6.7 | -4.9 |
Total | 331.2 | 230.0 |
\nThis increase in inventories is a result of currency effects, higher raw material prices, higher safety stocks, and longer lead times in the supply chain.
\n\n| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Trade receivables | 211.8 | 164.4 |
Impairment provision | -1.3 | -1.2 |
Total trade receivables | 210.5 | 163.2 |
Other receivables | 30.2 | 39.4 |
Derivatives | 3.7 | 10.1 |
Prepayments and accrued income | 12.0 | 8.7 |
Total other receivables | 45.9 | 58.2 |
Total receivables | 256.4 | 221.4 |
\nTrade receivables are not interest-bearing and generally have an average term of credit of 30-90 days. The group applies the IFRS 9 simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance for all trade receivables.
\n| \u00a0 | Total | < 30 days | 30-60 days | 60-90 days | > 90 days |
Sustainable Food Solutions | 22.9 | 15.7 | 3.2 | 1.6 | 2.4 |
Lactic Acid & Specialties | 9.3 | 6.4 | 1.3 | 0.6 | 1.0 |
Algae Ingredients | 1.7 | 1.2 | 0.2 | 0.1 | 0.2 |
Incubator | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Total | 33.9 | 23.3 | 4.7 | 2.3 | 3.6 |
| \u00a0 | 2022 | 2021 |
As at 1 January | -1.2 | -1.4 |
Additions/releases | -0.9 | -0.5 |
Use | 0.8 | 0.8 |
Exchange rate differences | \u00a0 | -0.1 |
As at 31 December | -1.3 | -1.2 |
\nThe additions to / releases from the trade receivables impairment provision are recognized as selling expenses.
\n\n| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Cash and bank balances | 58.2 | 42.2 |
Short-term deposits | \u00a0 | \u00a0 |
Total | 58.2 | 42.2 |
\nThere are no significant cash and cash equivalent balances held by the entity that are not\u00a0available for use by the group.
\n\n| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Property, plant, and equipment | \u00a0 | 1.1 |
Total assets held for sale | \u00a0 | 1.1 |
\nNo impairment loss was recognized upon reclassification as held for sale as the fair value less costs to sell is higher than the carrying amount. The held for sale item in 2021 relates to a warehouse in Totowa (US) which has been sold in January 2022.\u00a0
\n\n\nAs at 31 December 2022, the authorized share capital totaled \u20ac\u00a045.5 million, consisting of 182 million ordinary shares with a nominal value of \u20ac\u00a00.25 each.
\n| \u00a0 | Ordinary shares |
As at 1\u00a0January 2022 | 59,242,792 |
As at 31\u00a0December 2022 | 59,242,792 |
| \u00a0 | Ordinary shares |
As at 1 January 2022 | 58,950,269 |
Share-based remuneration | 62,649 |
As at 31\u00a0December 2022 | 59,012,918 |
| \u00a0 | Number |
As at 1\u00a0January 2022 | 292,523 |
Share-based remuneration | -62,649 |
As at 31\u00a0December 2022 | 229,874 |
\nAs at 31\u00a0December 2022, Corbion had a treasury stock of 229,874 ordinary shares at its disposal with a nominal value of \u20ac 0.25 each (representing 0.39% of the total share capital issued). Treasury stock shares have no dividend rights.
\n| \u00a0 | Movements in legal reserves | \u00a0 | \u00a0 | ||
| \u00a0 | Translation reserve | Hedge reserve | Development costs | Share plan reserve | Total |
As at 1 January 2021 | -1.0 | 5.4 | 31.4 | 6.6 | 42.4 |
\u2022 Net investment hedge | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
- Exchange rate differences foreign currency loan | -20.1 | \u00a0 | \u00a0 | \u00a0 | -20.1 |
- Tax effect | 5.0 | \u00a0 | \u00a0 | \u00a0 | 5.0 |
\u2022 Translation difference | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
- Foreign group companies | 25.4 | \u00a0 | \u00a0 | \u00a0 | 25.4 |
- Tax effect | -0.5 | \u00a0 | \u00a0 | \u00a0 | -0.5 |
\u2022 Cash flow hedge | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
- Fluctuations in fair value derivatives | \u00a0 | 3.6 | \u00a0 | \u00a0 | 3.6 |
- Tax effect | \u00a0 | -0.9 | \u00a0 | \u00a0 | -0.9 |
\u2022 Share-based remuneration charged to result | \u00a0 | \u00a0 | \u00a0 | 3.5 | 3.5 |
\u2022 Share-based remuneration transfers | \u00a0 | \u00a0 | \u00a0 | -3.8 | -3.8 |
\u2022 Movement in capitalization of development costs | \u00a0 | \u00a0 | -0.7 | \u00a0 | -0.7 |
As at 31\u00a0December 2021 | 8.8 | 8.1 | 30.7 | 6.3 | 53.9 |
\u2022 Net investment hedge | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
- Exchange rate differences foreign currency loan | -16.8 | \u00a0 | \u00a0 | \u00a0 | -16.8 |
- Tax effect | 4.3 | \u00a0 | \u00a0 | \u00a0 | 4.3 |
\u2022 Translation difference | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
- Foreign group companies | 28.2 | \u00a0 | \u00a0 | \u00a0 | 28.2 |
- Tax effect | -0.3 | \u00a0 | \u00a0 | \u00a0 | -0.3 |
\u2022 Cash flow hedge | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
- Fluctuations in fair value derivatives | \u00a0 | -7.0 | \u00a0 | \u00a0 | -7.0 |
- Tax effect | \u00a0 | 1.7 | \u00a0 | \u00a0 | 1.7 |
\u2022 Share-based remuneration charged to result | \u00a0 | \u00a0 | \u00a0 | 4.8 | 4.8 |
\u2022 Share-based remuneration transfers | \u00a0 | \u00a0 | \u00a0 | -3.8 | -3.8 |
\u2022 Movement in capitalization of development costs | \u00a0 | \u00a0 | -3.1 | \u00a0 | -3.1 |
As at 31\u00a0December 2022 | 24.2 | 2.8 | 27.6 | 7.3 | 61.9 |
\nIn specific circumstances legal reserves must be created in accordance with Part 9, Book 2 of the Dutch Civil Code. The legal reserves comprise the translation reserve, hedge reserve, and development cost reserve. Whenever a legal reserve has a negative value no payments can be made from the retained earnings up to the level of the negative value(s). The positive legal reserves as at 31 December 2022 amount to \u20ac 54.6 million.
\n\n\nA reserve for non-transferable profits is not applicable as Corbion has no restrictions to transfer profits from its operations in the different countries.
\n\nThe translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations, as well as the effective portion of any foreign currency differences arising from hedges of a net investment in a foreign operation.
\n\nThe hedge reserve comprises the effective portion of the cumulative net change in the fair value of hedging instruments used in cash flow hedges pending subsequent recognition in profit or loss as the hedged cash flows or items affect profit or loss.
\n\nThe development cost reserve comprises a\u00a0statutory reserve\u00a0for capitalized development expenditure in accordance with the Dutch Civil Code.
\n\nThe share plan reserve comprises all movements in equity-settled share-based remuneration plans.
\n\nFor the year 2022, a regular dividend in cash of \u20ac 0.56 per ordinary share (2021: \u20ac 0.56), in total \u20ac 33.0 million (2021: \u20ac 33.0 million) will be submitted for approval to the annual General Meeting of Shareholders, to be held on 17 May 2023.\u00a0Proposed dividends on ordinary shares\u00a0are subject to approval at the annual General Meeting of Shareholders and are not recognized as a liability as at 31 December.
\n\n| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Reorganization and restructuring | 0.4 | 0.5 |
Other | 9.5 | 8.4 |
Total | 9.9 | 8.9 |
| \u00a0 | Reorganization and restructuring | Other | Total |
As at 1\u00a0January 2022 | 0.5 | 8.4 | 8.9 |
Addition charged to result | 0.4 | 1.4 | 1.8 |
Release credited to result | \u00a0 | -0.3 | -0.3 |
Withdrawal for intended purpose | -0.5 | -0.3 | -0.8 |
Exchange rate differences | \u00a0 | 0.3 | 0.3 |
As at 31\u00a0December 2022 | 0.4 | 9.5 | 9.9 |
\nThe other provisions relate mainly to loss-making contracts, legal disputes, and other litigation risks. An amount of \u20ac 9.0 million was recorded in other receivables related to expected reimbursement for insurance claims.
\n\n| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Net defined benefit asset | -0.1 | -0.5 |
Net defined benefit liability | 2.5 | 3.7 |
Other long-term employee benefit commitments | 1.5 | 1.4 |
Total | 3.9 | 4.6 |
\nNet defined benefit assets and liabilities relate to post-employment defined benefit arrangements.
\n\nOther long-term employee benefit commitments relate mainly to anniversary commitments, conditional incentive plans, and health insurance.
\n\nCorbion sponsors defined benefit pension plans in the US and the UK. Both plans are closed schemes and based on final pay. Further, Corbion sponsors a legal severance payment plan in Thailand. All plans have been established in accordance with the legal requirements of the countries involved. The defined benefit plans are administered by a separate fund that is legally separated from the entity. The board of the pension fund is composed of an equal number of representatives from both employers and (former) employees. \t
\n\n\nThe plans typically expose the group to actuarial risks such as investment risk, interest rate risk, and longevity risk.
\n\nInvestment risk -\u00a0The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to high-quality corporate bond yields; if the return on plan assets falls below this rate, it will create a plan deficit.
\n\n\nInterest rate risk -\u00a0A decrease in the bond interest rate will increase the plan liability; however, this will be partly offset by an increase in the return on the plan's debt investments.
\n\n\nLongevity risk -\u00a0The present value of the defined benefit liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan's liability.
\n\n\nThe defined benefit obligation as per year-end consisted almost entirely of the UK plan and is summarized below:
\n\nThe Normal Retirement Age (NRA) is 65; however, Section 1 members are able to take their benefits in respect of pre 1 October 2003 service unreduced from age 60.
\n\n\nPensions in deferment increase in line with statutory revaluation with the exception of pre 1 October 2003 benefits for Section 1 members, which have an underpin linked to the level of pension increases in payment (which are linked to the Consumer Price Index (CPI)).
\n\n\nPensions in payment increase in line with CPI capped at 5% for benefits in respect of pre 1 January 2006 service and CPI capped at 2.5% for benefits in respect of post 31 December 2005 service.\t
\n\n\nIn 2021, an insurance policy was acquired to fund all the employee benefits in the plan. Corbion retained the legal obligation to pay further amounts if the insurer does not pay the employee benefits specified in the insurance policy.
\n\n\nThe average duration of the defined benefit obligation as at 31 December 2022 is 18 years.
\n| \u00a0 | 2022 | 2021 |
Current-service costs | 0.5 | 0.5 |
Net interest income | \u00a0 | -0.1 |
Total pension costs recognized in income statement | 0.5 | 0.4 |
| \u00a0 | \u00a0 | \u00a0 |
Remeasurements net defined benefit liability | \u00a0 | \u00a0 |
- Return on plan assets (excluding amounts included in interest income) | 35.3 | 23.8 |
- Actuarial (gains)/losses arising from changes in demographic assumptions | -3.3 | -0.2 |
- Actuarial (gains)/losses arising from changes in financial assumptions | -36.6 | -4.5 |
- Actuarial (gains)/losses arising from experience adjustments | 3.4 | 1.0 |
Total pension costs recognized in other comprehensive income | -1.2 | 20.1 |
Total | -0.7 | 20.5 |
| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Present value of defined benefit obligations | 54.1 | 92.9 |
Fair value of plan assets | -51.7 | -89.7 |
Funded status | 2.4 | 3.2 |
Restrictions on assets recognized | \u00a0 | \u00a0 |
Net liability/(asset) | 2.4 | 3.2 |
| \u00a0 | 2022 | 2021 |
As at 1 January | 92.9 | 97.5 |
Current-service costs | 0.5 | 0.5 |
Interest charges | 1.7 | 1.5 |
Pension payments | -2.4 | -10.0 |
Remeasurement (gains)/losses | \u00a0 | \u00a0 |
- Actuarial (gains)/losses arising from changes in demographic assumptions | -3.3 | -0.2 |
- Actuarial (gains)/losses arising from changes in financial assumptions | -36.6 | -4.5 |
- Actuarial (gains)/losses arising from experience adjustments | 3.4 | 1.0 |
Exchange rate differences | -2.1 | 7.1 |
As at 31 December | 54.1 | 92.9 |
| \u00a0 | 2022 | 2021 |
As at 1 January | 89.7 | 107.4 |
Interest income | 1.7 | 1.6 |
Pension payments | -2.4 | -10.0 |
Contributions from the employer | 0.3 | 6.7 |
Remeasurement gains/(losses) | \u00a0 | \u00a0 |
- Return on plan assets (excluding amounts included in interest income) | -35.3 | -23.8 |
Exchange rate differences | -2.3 | 7.8 |
As at 31 December | 51.7 | 89.7 |
\nThe return on plan assets (excluding amounts included in interest income) is significantly influenced by the acquired insurance policy in 2021 to fund all the employee benefits in the UK plan. The insurance policy is an exact match of the covered liabilities and is held by the scheme as an asset.
\n\n\nThe investment strategy is based on the composition of the obligations of the pension schemes. Based on Asset Liability Management models analyses have been performed on a regular basis to define the investment portfolio. At year-end the asset allocation was as follows.
\n| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Bonds | 4.8 | 0.4 |
Equities | 2.7 | 8.6 |
Other | 44.2 | 80.7 |
Total assets | 51.7 | 89.7 |
| \u00a0 | 2022 | 2021 |
Discount rate | 4.7% | 2.0% |
Pension growth rate | \u00a0 | 2.8% |
| \u00a0 | Change in assumption | Increase in assumption | Decrease in assumption |
Discount rate | 0.50% | (3.4) | 3.9 |
Pension growth rate | 0.50% | - | - |
\nThe above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. To calculate the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method is applied (calculation of the present value of the defined benefit obligation using the projected unit credit method at the end of the reporting period) which is also used to calculate the pension liability recognized within the consolidated statement of financial position.
\n\n\nThe anticipated contributions to the defined benefit pension plans in the coming year will amount to \u20ac\u00a00.2 million.
\n\n| \u00a0 | 2022 | 2021 |
Deferred tax liabilities | 25.4 | 15.3 |
Deferred tax assets | -27.3 | -13.1 |
As at 1 January | -1.9 | 2.2 |
Tax charge in income statement | 6.2 | -1.8 |
Translation differences foreign group companies | 0.8 | 1.3 |
Tax charge movements in equity | -5.7 | -3.6 |
As at 31 December | -0.6 | -1.9 |
| \u00a0 | \u00a0 | \u00a0 |
Deferred tax liabilities | 30.0 | 25.4 |
Deferred tax assets | -30.6 | -27.3 |
As at 31 December | -0.6 | -1.9 |
| \u00a0 | As at 31-12-2022 | As at 31-12-2021 | ||
| \u00a0 | Deferred tax assets | Deferred tax liabilities | Deferred tax assets | Deferred tax liabilities |
Property, plant, and equipment | -2.0 | 30.7 | -1.3 | 26.6 |
Intangible fixed assets | -5.9 | 15.1 | -5.8 | 13.4 |
Current assets/liabilities | -23.6 | 2.0 | -19.2 | 2.2 |
Tax loss carry forward | -15.0 | \u00a0 | -17.7 | \u00a0 |
Provisions | -2.6 | 0.7 | -2.8 | \u00a0 |
Financial instruments | \u00a0 | \u00a0 | \u00a0 | 2.7 |
| \u00a0 | -49.1 | 48.5 | -46.8 | 44.9 |
Netting | 18.5 | -18.5 | 19.5 | -19.5 |
Total | -30.6 | 30.0 | -27.3 | 25.4 |
\nThe short-term part of deferred tax assets, after write-down and netting with the short-term part of deferred tax liabilities, amounts to \u20ac 5.9 million (2021: \u20ac 5.3 million).
\n| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Total tax loss carry forward | 167.5 | 168.2 |
Tax loss carry forward not qualified as deferred tax asset | -113.3 | -103.0 |
Tax loss carry forward qualified as deferred tax asset | 54.2 | 65.2 |
Average tax rate | 27.7% | 27.1% |
Deferred tax asset | 15.0 | 17.7 |
| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Less than 1 year | \u00a0 | \u00a0 |
Within 5 years | \u00a0 | \u00a0 |
Between 5 and 10 years | \u00a0 | \u00a0 |
10 years or longer | \u00a0 | \u00a0 |
No expiry date | 113.3 | 103.0 |
Tax loss carry forward not qualified as deferred tax asset | 113.3 | 103.0 |
| \u00a0 | 2022 | 2021 |
Property, plant, and equipment | 1.7 | 8.0 |
Intangible fixed assets | 1.0 | -3.2 |
Current assets/liabilities | -3.8 | 1.7 |
Tax loss carry forward | 3.3 | -13.0 |
Provisions | 1.0 | 0.1 |
Exchange rate differences loans | 3.9 | 4.5 |
Financial instruments | -0.9 | 0.6 |
Rate changes | \u00a0 | -0.5 |
Total | 6.2 | -1.8 |
| \u00a0 | Balance sheet value | Effective interest % | Average term in years | |||
| \u00a0 | As at 31-12-2022 | As at 31-12-2021 | As at 31-12-2022 | As at 31-12-2021 | As at 31-12-2022 | As at 31-12-2021 |
Private placement | 276.5 | 259.7 | 2.79 | 2.84 | 4.4 | 5.4 |
Subordinated loan | 99.5 | 99.4 | 1.98 | 1.89 | 5.6 | 6.6 |
Total | 376.0 | 359.1 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Weighted average | \u00a0 | \u00a0 | 2.54 | 2.57 | 4.7 | 5.7 |
\nThe weighted average term has been calculated on the basis of the remaining terms of the individual loans.
\n\n\nRepayments on the above amounts are due within five years (\u20ac 213.2 million) and after five years (\u20ac\u00a0162.8 million).
\n| \u00a0 | Balance sheet value as at 31-12-2022 | Fair value as at 31-12-2022 | Balance sheet value as at 31-12-2021 | Fair value as at 31-12-2021 |
Private placement | 276.5 | 245.2 | 259.7 | 259.1 |
Subordinated loan | 99.5 | 84.7 | 99.4 | 99.8 |
| \u00a0 | Balance sheet value | Effective interest % | ||
| \u00a0 | As at 31-12-2022 | As at 31-12-2021 | As at 31-12-2022 | As at 31-12-2021 |
Owed to credit institutions | 309.7 | 74.7 | 2.86 | 0.73 |
Total | 309.7 | 74.7 | \u00a0 | \u00a0 |
| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Contingent considerations | 14.2 | 15.0 |
Deferred considerations | 1.6 | 1.9 |
Total | 15.8 | 16.9 |
| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Accruals and deferred income | 53.8 | 43.8 |
Taxation and social security | 9.3 | 6.6 |
Contingent considerations | 3.5 | \u00a0 |
Pension liabilities | 2.8 | 1.0 |
Derivatives | \u00a0 | 0.6 |
Other financial accruals | 7.1 | 7.6 |
Other payables | 33.9 | 38.2 |
Total | 110.4 | 97.8 |
\nOn 30 June 2021, Corbion acquired certain assets of Granotec Mexico S.A. de C.V., a key player in functional blends for the Mexican bakery and fortification industries. The company is based in Quer\u00e9taro, Mexico, employs around 60 staff, and operates a production facility and an application and development center.
\n\n\nDetails of the purchase consideration, net assets acquired are as follows.
\n| \u00a0 | Granotec Mexico |
Property, plant, and equipment | 0.7 |
Intangible fixed assets | 5.0 |
Inventories | 2.3 |
Identifiable assets minus liabilities | 8.0 |
Cash | 9.3 |
Holdback amounts | 1.8 |
Total consideration | 11.1 |
Goodwill arising on acquisition | 3.1 |
\nGoodwill arose in the acquisition of Granotec Mexico as the consideration paid effectively included amounts in relation to the benefit of expected synergies, revenue growth and future market development. These benefits are not recognized separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets. The goodwill is not expected to be deductible for tax purposes. No adjustments were recognized during 2022 for the business combination.
\n\n\nThe table below shows the pro-forma result of Corbion if the acquisition had been made as at 1\u00a0January 2021.
\n| \u00a0 | Corbion | Pro-forma adjustment full-year effect | Pro forma Corbion |
Net sales | 1,070.8 | 3.7 | 1,074.5 |
Result after taxes | 78.3 | 0.1 | 78.4 |
\nFor the six-month period ended 31 December 2021, the acquisition contributed \u20ac 3.8 million in revenue and \u20ac 1.3 million in loss to Corbion's results.
\n\nOn 11 January 2021, Corbion reached an agreement to sell its Frozen Dough business, classified as held for sale in the 2020 consolidated financial statements.
\n| \u00a0 | Frozen Dough business |
Consideration transferred | \u00a0 |
Payment in cash | 20.4 |
Total consideration | 20.4 |
| \u00a0 | \u00a0 |
Property, plant, and equipment | 6.8 |
Inventories | 0.5 |
Receivables | 2.0 |
Total sold assets | 9.3 |
| \u00a0 | \u00a0 |
Trade payables | 0.7 |
Total sold liabilities | 0.7 |
| \u00a0 | \u00a0 |
Gross result from divestment | 11.8 |
| \u00a0 | \u00a0 |
Consideration received in cash and cash equivalents | 20.4 |
Total consideration received | 20.4 |
\nIn 2022 no acquisitions or disposals were made.
\n\n\nCorbion's activities are exposed to a variety of financial risks including currency, interest rate, commodity, liquidity, capital, and credit risk. The treasury department identifies and manages these risks, except the commodity risk which is managed by procurement. Treasury and procurement operate within a framework of policies and procedures which have been approved by the Board of Management, which has overall responsibility for the Group's Risk Management Framework. The Audit Committee oversees the Group's Risk Management Framework. The treasury and commodity risk policies are reviewed at least on an annual basis to ensure the policies are up to date with respect to relevant risks and changing business environment. Corbion uses derivatives solely for the purpose of hedging exposure mainly to the commodity, currency, and interest rate risks arising from the company's sources of finance and business. The Treasury Committee and Commodity Risk Management Committee meet periodically to review treasury and commodity activities and compliance with both policies. The Treasury Committee resides within the finance discipline and is chaired by the CFO. In the Commodity Risk Management Committee, the procurement and finance disciplines are represented, with executive level involvement of the CEO, CFO, and COO.
\n\nCorbion is active on the international market, which means that it is exposed to risks arising from currency fluctuations, particularly in the US dollar, Brazilian real, Japanese yen, and Thai baht. Foreign currency exchange risk arises from future commercial transactions, recognized assets and liabilities, and net investments in foreign operations.
\n\nCorbion is subject to foreign exchange rate movements in connection with the translation of its foreign subsidiaries' income, assets, and liabilities into euros in the consolidated financial statements.
\n\n\nThe USD-denominated US Private Placement is treated as a net investment hedge to partially mitigate the foreign exchange risk when translating the US net assets. Currency fluctuations particularly in the US dollar can have a material effect on Corbion\u2019s income statement. Corbion has policies in place that monitor these risks and if required, mitigation actions are discussed in the Treasury Committee. Currently, no other translation effects than part of the US net asset values are being hedged.
\n\n\nIntercompany financing is denominated in the functional currency of the entity receiving the funding, hence the currency risk is at Corbion group level. According to our treasury policy, currency risks above the threshold are hedged using foreign exchange forward contracts. No hedge accounting is applied and both gains and losses on the derivatives and the foreign currency gains and losses on the intercompany financing positions are recognized as a net position in the income statement as financial income or financial charge.
\n\nThe currency transaction risk arises in the course of ordinary business activities when a company trades, borrows, or lends in a currency other than its functional currency. During the time interval between anticipation/commitment and actual payment, exchange rates will fluctuate and the company is exposed to a currency risk. Corbion uses forward currency contracts and currency swaps in order to hedge risks arising from purchase and sales deals and/or commitments from current purchase and sales deals. Committed transaction exposures and anticipated transaction exposures with high probability are hedged and included in cash flow hedge accounting. Anticipated transaction exposures with reasonable probability are partially hedged. For practical reasons a threshold is applied per currency and operating company. Group treasury is responsible for monitoring transaction risks and defining the appropriate hedging strategy, which is approved by the Treasury Committee.
\n\nThe following sensitivity shows the impact of movements in exchange rates on the exchange rate hedging instruments in place as at 31 December 2022. A 10% weakening of the euro against the Japanese yen would decrease the hedge reserve (equity) by \u20ac 1.5 million, while the net result would not be impacted. A 10% weakening of the euro against the US dollar would decrease the hedge reserve (equity) by\u00a0\u20ac 1.6 million, while the net result would not be impacted.
\n\nInterest rate risk is the risk that interest paid or received on loans and cash investments will vary over a period of time as a direct consequence of changes in the level of interest rates. With regard to interest rate risk, group treasury has the objective to reduce the sensitivity of financial income and charge in the income statement and resulting cash flows to interest rate fluctuations, by actively managing this risk. To reduce the sensitivity, Corbion prefers variable/ floating interest rates for short-term (< one year) financing instruments (including short-term drawings), while opting for fixed interest rates for long-term (> one year) financing instruments. As to cap the maximum potential P&L volatility at all times, a threshold is defined for the maximum floating exposure. Interest rate swaps and forward interest rate contracts may be used to adjust the nature of the interest rate and currency of long-term financing to fit the desired risk profile. Interest rate hedging by group treasury requires approval from the Treasury Committee.
\n\n\nCorbion's interest rate risk arises primarily from its debt. Corbion has an interest rate policy aimed at reducing volatility in its interest expense. As at 31 December\u00a02022 long-term debt (\u20ac 376.0 million) is financed at fixed rates (2.54% on average) for a period of on average 4.7 years. Drawings under the revolving credit facility\u00a0have a floating interest rate for a period shorter than one year.\u00a0Corbion has two interest rate options in place with a cap of 3% and nominal amount of \u20ac 205 million to limit the interest rate risk on the floating debt. The fair value of these options is zero.
\n\nAssuming a constant mix of variable and fixed interest rate instruments, an interest rate increase by 50 basis points versus the rates on 31 December 2022 with all other variables held constant, would have a negative impact on the net result of \u20ac 1.6 million and no impact on the equity.
\n\nCommodity risk is the risk of unfavorable changes in commodity prices that may lead to losses in Corbion\u2019s profit and loss statement and that can lead to fluctuations in the statement of cash flows. The Commodity Risk Committee establishes the overall risk tolerance framework for Corbion and ensures that the commodity price risk associated with Corbion's business margins is identified, considered, and managed. The main responsibilities of the Commodity Risk Committee are to monitor the price risk exposure of selected commodities (e.g. sugar, corn, wheat, soybean oil, and energy) and key chemicals, to define methodologies, procedures, and systems to control the risks, to select appropriate risk management tools, and to monitor execution of the commodity risk policy by procurement.
\n\n\nCorbion uses commodity derivative contracts to reduce the risk of price fluctuations in the main commodities used, including natural gas and sugar.
\n\n\nCorbion entered into commodity derivative contracts to hedge the variable price risk of the main commodities used. The fair value of these contracts amounted to an asset of \u20ac 3.2 million as at 31 December 2022 (31 December 2021: asset of \u20ac 11.2 million). Hedge accounting is applied for the major part of these commodity derivative contracts. More information can be found in the section on hedge transactions.
\n\nIf the market price of the involved commodities would increase by 10%, the related derivative contracts for which no hedge accounting is applied would impact the profit & loss by \u20ac 0.3 million.
\n\nLiquidity risk is the risk of Corbion not being able to obtain sufficient financial means to meet its obligations in time. Liquidity risk management is the most important pillar for the group treasury function of Corbion and therefore the treasury policy defines the active management of the liquidity risk as the primary objective of group treasury, so that at all times the company is able to meet its financial obligations of the whole group in the short and long term. Liquidity risk is managed by ensuring sufficient liquidity capacity through (incoming) cash and cash equivalents and the availability of committed borrowing capacity as well as a solid financial risk profile. Corbion manages liquidity risk by means of cash-flow projections for the short term (daily), medium term (quarterly review for running year) and long term (up to 5 years, bi-annual review).
\n\n\nIn 2022, Corbion\u00a0signed a new 5-year syndicated Revolving Credit Facility (RCF). The new RCF\u00a0replaced the company\u2019s existing RCF, providing liquidity for general corporate purposes and giving Corbion flexibility to fund further business growth. The facility has a 5-year initial termination date extending the maturity to 2027, and provides two additional 1-year extension options. The interest margin grid remains unchanged compared to the previous RCF. The committed credit facilities at Corbion\u2019s long-term disposal amounted to \u20ac 450 million as at 31\u00a0December 2022.
\n\n\nCorbion also has a private placement of $ 295 million and a subordinated private placement of \u20ac 100 million with American institutional investors.
\n\n\nTo provide insight into the liquidity risk the table below shows the contractual terms of the financial obligations (converted at balance sheet date), including interest paid.
\n\n\nThe table below analyzes Corbion\u2019s financial obligations which will be settled on a net basis, according to relevant expiration dates, based on the remaining period from the balance sheet date to the contractual expiration date. The amounts shown are contractual non-discounted cash flows.
\n| \u00a0 | Less than 1 year | Between 1 and 5 years | More than 5 years | Total |
As at 31 December 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Private placement | 8.5 | 221.5 | 85.7 | 315.7 |
Subordinated loan | 2.0 | 23.6 | 84.8 | 110.4 |
Owed to credit institutions | 313.2 | \u00a0 | \u00a0 | 313.2 |
Lease liabilities | 17.4 | 41.1 | 29.9 | 88.4 |
Contingent considerations | 4.3 | 24.7 | \u00a0 | 29.0 |
Trade payables | 148.3 | \u00a0 | \u00a0 | 148.3 |
Other non-interest-bearing current liabilities | 106.9 | \u00a0 | \u00a0 | 106.9 |
Total | 600.6 | 310.9 | 200.4 | 1,111.9 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
As at 31 December 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Private placement | 8.0 | 137.7 | 158.9 | 304.6 |
Subordinated loan | 2.0 | 23.9 | 87.4 | 113.3 |
Owed to credit institutions | 75.1 | \u00a0 | \u00a0 | 75.1 |
Lease liabilities | 15.7 | 36.0 | 31.9 | 83.6 |
Contingent considerations | 3.0 | 19.8 | \u00a0 | 22.8 |
Trade payables | 128.0 | \u00a0 | \u00a0 | 128.0 |
Other non-interest-bearing current liabilities | 97.8 | \u00a0 | \u00a0 | 97.8 |
Total | 329.6 | 217.4 | 278.2 | 825.2 |
\nCredit risk refers to the losses that would be recognized if a customer or a counterparty to a financial instrument fails to meet its contractual obligations. In respect of disbursed loans, other receivables, and cash and cash equivalents the maximum credit risk equals the book value. In respect of derivatives it equals the fair value.
\n\n\nGiven the credit rating that it requires of its partners Corbion has no reason to assume that they will not honor their contractual obligations. Based on today's insights, the actual credit risk is limited.
\n\nCorporate finance, which is the process of optimizing the capital structure and capital allocation of the group, is an important pillar of the group treasury function within Corbion, as it is closely linked to the management of the liquidity risk. A prudent corporate finance policy and approach aims to maintain sufficient access to liquidity and supports a solid financial risk profile. Corbion\u2019s size, geographical presence in different financial markets, financial strength, consolidated cash flow generation, and public share listing gives access to multiple financing instruments. Group treasury is responsible for managing the optimized overall capital structure of the group, which is set by the Treasury Committee, using multiple financing sources (e.g. debt, mezzanine or equity instruments), both at a group level and at an operating company level. Group treasury is responsible for defining the funding requirements and funding strategy of the group, which is reviewed and approved annually by the Treasury Committee.
\n\n\nThe capital structure of Corbion consists of net debt (borrowings as detailed in Note 23) offset by cash and cash equivalents (as detailed in Note 17).
\n| \u00a0 | 2022 | 2021 |
Private placement | 276.5 | 259.7 |
Revolving credit facility | 309.7 | 74.7 |
Subordinated loan | 99.5 | 99.4 |
Lease commitments | 73.5 | 69.4 |
Total financial liabilities part of net debt | 759.2 | 503.2 |
Cash and cash equivalents | -58.2 | -42.2 |
Net debt | 701.0 | 461.0 |
-/- Subordinated loan | -99.5 | -99.4 |
Covenant net debt for covenant ratio calculation | 601.5 | 361.6 |
| \u00a0 | Private placement | Revolving credit facility | Subordinated loan | Leases | Total |
As at 1 January 2022 | 259.7 | 74.7 | 99.4 | 69.4 | 503.2 |
Financing cash flows | \u00a0 | 236.0 | \u00a0 | \u00a0 | 236.0 |
Repayments | \u00a0 | \u00a0 | \u00a0 | -14.1 | -14.1 |
New lease commitments | \u00a0 | \u00a0 | \u00a0 | 14.0 | 14.0 |
Exchange rate differences | 16.8 | \u00a0 | \u00a0 | 4.2 | 21.0 |
Other | \u00a0 | -1.0 | 0.1 | \u00a0 | -0.9 |
As at 31 December 2022 | 276.5 | 309.7 | 99.5 | 73.5 | 759.2 |
\nThe Corbion Treasury Committee reviews the capital structure of Corbion on a quarterly basis. As part of this review, the committee considers the cost of capital and the risks associated with each class of capital.
\n\n\nThe main covenants for the revolving credit facility and the US private placement are:
\n\nThe ratio of covenant net debt position divided by covenant EBITDA (Earnings Before Interest, Taxes, Depreciation, Amortization, and impairment of (in)tangible fixed assets, excluding adjustments, increased by cash dividend of joint ventures received and annualization effect of newly acquired and/or divested subsidiaries) may not exceed the factor 3.75.
\n\n\nA minimum interest cover (covenant EBITDA divided by net interest income and charges) of 3.5.
\n\n\nThese external conditions were met in 2022 as well as in 2021.\u00a0Corbion targets a Covenant net debt/ EBITDA ratio below 2.9x in 2023 and between 1.5x and 2.5x from 2024 onwards.
\n| \u00a0 | 2022 | 2021 |
Covenant net debt position/covenant EBITDA | 3.0 | 2.6 |
Interest cover | 14.2 | 14.6 |
\nCorbion is using financial derivatives to control the risks related to fluctuations in foreign currencies, commodities, and interest rates. Only when there is an underlying exposure Corbion will enter into financial derivatives.\u00a0Hedging instruments need to be approved by the Treasury Committee and hedge accounting is applied where appropriate.
\n\nCorbion measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:
\n\nLevel 1: Fair value measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities.
\n\n\nLevel 2: Fair value measurements based on inputs other than Level 1 quoted prices that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
\n\n\nLevel 3: Fair value measurements based on valuation techniques that include inputs for the asset or liability that are based on observable market data (unobservable inputs).
\n\n31 December 2022 | Level 1 | Level 2 | Level 3 | Total |
Derivatives | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u2022 Foreign exchange contracts | \u00a0 | 0.5 | \u00a0 | 0.5 |
\u2022 Commodity swaps/collars | \u00a0 | 3.2 | \u00a0 | 3.2 |
Financial fixed assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u2022 Loans, receivables, and other | \u00a0 | 96.3 | \u00a0 | 96.3 |
Interest bearing liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u2022 Private placement | \u00a0 | -245.2 | \u00a0 | -245.2 |
\u2022 Subordinated loan | \u00a0 | -84.7 | \u00a0 | -84.7 |
Other (non-)current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u2022 Contingent and deferred considerations | \u00a0 | \u00a0 | -19.3 | -19.3 |
Total | \u00a0 | -229.9 | -19.3 | -249.2 |
31 December 2022 | Balance sheet value | Fair value |
Financial fixed assets | \u00a0 | \u00a0 |
\u2022 Loans, receivables, and other | 99.4 | 96.3 |
| \u00a0 | \u00a0 | \u00a0 |
Receivables | \u00a0 | \u00a0 |
\u2022 Trade receivables | 210.5 | 210.5 |
\u2022 Other receivables | 30.2 | 30.2 |
\u2022 Prepayments and accrued income | 12.0 | 12.0 |
| \u00a0 | \u00a0 | \u00a0 |
Cash | \u00a0 | \u00a0 |
\u2022 Cash other | 58.2 | 58.2 |
| \u00a0 | \u00a0 | \u00a0 |
Borrowings | \u00a0 | \u00a0 |
\u2022 Private placement | -276.5 | -245.2 |
\u2022 Owed to credit institutions | -309.7 | -309.7 |
\u2022 Subordinated loan | -99.5 | -84.7 |
| \u00a0 | \u00a0 | \u00a0 |
Other non-current liabilities | \u00a0 | \u00a0 |
\u2022 Contingent and deferred considerations | -15.8 | -15.8 |
| \u00a0 | \u00a0 | \u00a0 |
Non-interest-bearing liabilities | \u00a0 | \u00a0 |
\u2022 Trade payables | -148.3 | -148.3 |
\u2022 Other payables | -106.9 | -106.9 |
| \u00a0 | \u00a0 | \u00a0 |
Other current liabilities | \u00a0 | \u00a0 |
\u2022 Contingent and deferred considerations | -3.5 | -3.5 |
| \u00a0 | \u00a0 | \u00a0 |
Derivatives | \u00a0 | \u00a0 |
\u2022 Foreign exchange contracts | 0.5 | 0.5 |
\u2022 Commodity swaps/collars | 3.2 | 3.2 |
| \u00a0 | \u00a0 | \u00a0 |
Total | -546.2 | -503.2 |
\nFair values are determined as follows:
\n\nAs there is no market quotations for the financial fixed assets, the fair value\u00a0 is determined by discounting the future cash flows at the yield curve applicable as at 31 December.
\n\n\nThe fair value of receivables equals the book value because of their short-term character.
\n\n\nCash and cash equivalents are measured at nominal value which, given the short-term and risk-free character, corresponds to the fair value.
\n\n\nMarket quotations are used to determine the fair value of debt owed to private parties, credit institutions, and other debts. As there are no market quotations for most of the loans the fair value of short- and long-term loans is determined by discounting the future cash flows at the yield curve applicable as at 31 December.
\n\n\nGiven the short-term character, the fair value of non-interest-bearing liabilities equals the book value.
\n\n\nContingent and deferred considerations are measured on the basis of the present value of the current expected future cash flows.
\n\n\nCurrency and interest rate derivatives are measured on the basis of the present value of future cash flows over the remaining term of the contracts, using the bank interest rate (such as Euribor) as at the reporting date for the remaining term of the contracts. The present value in foreign currencies is converted using the exchange rate applicable as at the reporting date.
\n\n\nCommodity derivatives are measured on the basis of the present value of future cash flows, using market quotations or own variable market price estimations of the involved commodity as at the reporting date.
\n\n\nThe amount of \u20ac 2.8 million in hedge reserve (see Note 19) relates to the hedging of risks arising from future purchase and sales deals and/or commitments from current purchase and sales contracts amounting to \u20ac 55.5 million. \u00a0
\n\n\nThe amount of \u20ac 24.2 million in translation reserve (see Note 19) relates to currency fluctuations in respect of the net investments in foreign operations less the currency fluctuations of the corresponding net investment hedges. In case of divestment of a net investment in a foreign operation, the corresponding net impact of the currency fluctuations is moved from the translation reserve to the income statement.
\n\n\nIn the past year no cash flow hedges were terminated early due to changes to the expected future transaction. No ineffective parts were recorded in respect of the net investment hedge and cash flow hedge.
\n| \u00a0 | Short < 1 year | Long > 1 year | ||
| \u00a0 | As at 31-12-2022 | As at 31-12-2021 | As at 31-12-2022 | As at 31-12-2021 |
Derivatives receivables/(liabilities) used as hedge instrument in cash flow hedge relations: | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Foreign exchange contracts | 0.5 | -0.8 | \u00a0 | \u00a0 |
Commodity swaps | 4.4 | 10.1 | \u00a0 | 0.8 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Derivatives receivables/(liabilities) used as hedge instrument in fair value hedge relations: | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Commodity swaps | -0.8 | -0.2 | \u00a0 | \u00a0 |
Total derivatives in hedge relations | 4.1 | 9.1 | \u00a0 | 0.8 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Derivatives receivables/(liabilities) not used in a hedge relation with value change through income statement: | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Commodity swaps | -0.4 | 0.4 | \u00a0 | 0.1 |
Total derivatives through income statement | -0.4 | 0.4 | \u00a0 | 0.1 |
Total derivatives | 3.7 | 9.5 | \u00a0 | 0.9 |
\nFor more information on the remuneration policy see the Remuneration report. For more information on share-based payments see Note 29.
\n| \u00a0 | Granted in | At target number outstanding as at 31-12-2022 | Maximum number outstanding as at 31-12-2022 | Year of vesting |
O. Rigaud | 2020 | 22,260 | 33,390 | 2023 |
| \u00a0 | 2021 | 14,722 | 22,083 | 2024 |
| \u00a0 | 2022 | 23,323 | 34,985 | 2025 |
| \u00a0 | 2022 | 1,487 | 1,487 | 2023 |
E. van Rhede van der Kloot | 2020 | 13,491 | 20,237 | 2023 |
| \u00a0 | 2021 | 8,854 | 13,281 | 2024 |
| \u00a0 | 2022 | 12,237 | 18,356 | 2025 |
| \u00a0 | 2022 | 780 | 780 | 2023 |
Total as at 31 December 2022 | \u00a0 | 97,154 | 144,599 | \u00a0 |
| \u00a0 | Maximum number outstanding as at 31-12-2021 | Maximum number granted in 2022 | Vested 2022 | Expired 2022 | Maximum number outstanding as at 31-12-2022 |
O. Rigaud | 89,730 | 36,472 | 19,755 | 14,502 | 91,945 |
E. van Rhede van der Kloot | 53,508 | 19,136 | 11,553 | 8,437 | 52,654 |
T. de Ruiter | 13,277 | \u00a0 | 7,126 | 6,151 | \u00a0 |
Total | 156,515 | 55,608 | 38,434 | 29,090 | 144,599 |
| \u00a0 | IAS 24.17 category | Short-term employee benefits | Share-based payments | Post-employment benefits | Other long-term benefits | Termination benefits | Total | |
Thousands of euros | 2022 | Base salary1 | STIP | LTIP | Pension benefits | Other benefits | Termination benefits | \u00a0 |
O. Rigaud | 860 | 516 | 832 | \u00a0 | \u00a0 | \u00a0 | 2,208 | |
E. van Rhede van der Kloot | 583 | 271 | 487 | \u00a0 | \u00a0 | \u00a0 | 1,341 | |
Total Board of Management | 1,443 | 787 | 1,319 | \u00a0 | \u00a0 | \u00a0 | 3,549 |
| \u00a0 | IAS 24.17 category | Short-term employee benefits | Share-based payments | Post-employment benefits | Other long-term benefits | Termination benefits | Total | |
Thousands of euros | 2021 | Base salary1 | STIP | LTIP | Pension benefits | Other benefits | Termination benefits | \u00a0 |
O. Rigaud | \u00a0 | 779 | 496 | 542 | \u00a0 | \u00a0 | \u00a0 | 1,817 |
E. van Rhede van der Kloot | \u00a0 | 572 | 299 | 391 | \u00a0 | \u00a0 | \u00a0 | 1,262 |
Total Board of Management | 1,351 | 795 | 933 | \u00a0 | \u00a0 | \u00a0 | 3,079 |
\nThe tables above show the costs based on the applicable IFRS standard and do not necessarily reflect the actual amounts paid.
\n\nThe table below specifies the remuneration of the Executive Committee (ExCo), comprising the Board of Management members as listed above and the additional ExCo members who are not part of the Board of Management.
\nThousands of euros | 2022 | 2021 |
Short-term employee benefits | 5,810 | 5,402 |
Share-based payments | 2,305 | 2,211 |
Post-employment benefits | 19 | 15 |
Other long-term benefits | \u00a0 | \u00a0 |
Termination benefits 1 | \u00a0 | \u00a0 |
| \u00a0 | IAS 24.17 category | Short-term employee benefits1 | Share-based payments | Post-employment benefits | Other long-term benefits | Termination benefits | Total | |
Thousands of euros | Year | Base fee | Committee fee | LTIP | Pension benefits | Other benefits | Termination benefits | \u00a0 |
Mathieu Vrijsen, Chair (Chair Appointment & Governance Committee / member Remuneration Committee / member Science and Technology Committee) | 2022 | 70 | 23 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 93 |
2021 | 70 | 23 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 93 | |
Ilona Haaijer, Vice-Chair since 18 May 2022 (Chair Remuneration Committee since 18 May 2022 / member Appointment and Governance Committee since 18 May 2022 / member Audit Committee until 18 May 2022 / member Science and Technology Committee) | 2022 | 56 | 21 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 77 |
| \u00a0 | 2021 | 50 | 17 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 67 |
Rudy Markham, Vice-Chair (Chair Remuneration Committee / member Appointment and Governance Committee) until 18 May 2022 | 2022 | 23 | 6 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 29 |
2021 | 60 | 16 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 76 | |
Liz Doherty (Chair Audit Committee / member Sustainability and Safety Committee) | 2022 | 50 | 22 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 72 |
2021 | 50 | 15 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 65 | |
William Lin (Chair Sustainability and Safety Committee / member Audit Committee) since 18 May 2022 | 2022 | 31 | 12 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 43 |
Dessi Temperley (member Audit Committee / member Sustainability and Safety Committee) | 2022 | 50 | 17 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 67 |
| \u00a0 | 2021 | 31 | 6 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 37 |
Steen Riisgaard (Chair Science and Technology Committee / member Remuneration Committee / member Appointment and Governance Committee) | 2022 | 50 | 23 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 73 |
2021 | 50 | 23 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 73 | |
Jack de Kreij (Chair Audit Committee) until 19 May 2021 | 2021 | 19 | 6 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 25 |
| \u00a0 | Total 2022 | 330 | 124 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 454 |
| \u00a0 | Total 2021 | 330 | 106 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 436 |
\nNo loans or advance payments or any guarantees to that effect have been made or issued to the members of the Supervisory Board. None of the members of the Supervisory Board have shares in the company or any option rights relating thereto.
\n| \u00a0 | Transaction values for the year ended | Balance outstanding at year-end | ||
| \u00a0 | 2022 | 2021 | 2022 | 2021 |
Sales | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Joint ventures | 77.7 | 85.3 | 8.4 | 13.7 |
Purchases | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Joint ventures | 7.8 | 8.7 | 0.9 | 2.3 |
Others | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Joint ventures | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
- Dividend | \u00a0 | \u00a0 | \u00a0 | 6.6 |
- Loans | \u00a0 | \u00a0 | 64.6 | 60.7 |
\nCorbion has an outstanding loan granted to the joint venture TotalEnergies Corbion bv of \u20ac 64.6 million with an interest rate of 7.17% and a remaining term of 7 years.
\n\n\nA share plan is in place for the Board of Management. The (former) members of the Board of Management have a total of 144,599 unvested share rights in the company as at 31\u00a0December 2022 (2021: 156,515). The nominal amount of the shares which are claimable under unvested share rights equals \u20ac\u00a036,150 per that date.
\n\n\nThe share grant program was introduced in 2020 as part of the new remuneration policy adopted by the annual General Meeting of Shareholders (AGM) on 29 June 2020, measuring performance over a period of three calendar years. Each year members of the Board of Management are entitled to a conditional grant of Corbion shares. There are two target levels for this incentive: one applies to the CEO and one to the CFO. The CEO is entitled to a conditional share grant value of 120% of base salary. The CFO is entitled to a conditional share grant value of 100% of base salary. The total number of conditionally granted shares is determined by dividing the at target amount applicable for the respective Board member (as a percentage of base salary) by the share price. The share price is defined as the average closing price of the Corbion share during the last full calendar quarter preceding the conditional grant of shares.
\n\n\nAt the beginning of the three-year performance period, targets for the LTIP are set by the Supervisory Board as follows.
\nThe TSR performance is benchmarked against the TSR performance of Corbion\u2019s TSR peer group and the relative ranking determines the actual payout for 30% of the LTIP.
\n\n\nA target based on organic sales growth, a threshold (minimum) and a range around the performance target to determine the actual payout for 25% of the LTIP.
\n\n\nA target based on adjusted EBITDA, a threshold (minimum) and a range around the performance target to determine the actual payout for 20% of the LTIP.
\n\n\nA target based on return on capital employed (ROCE), a threshold (minimum) and a range around the performance target to determine the actual payout for 12.5% of the LTIP.
\n\n\nA target based on return on sustainability goals, a threshold (minimum) and a range around the performance target to determine the actual payout for 12.5% of the LTIP.
\n\n\nPrior to each conditional grant the Supervisory Board sets a target level for the performance measures, i.e. organic net sales growth, adjusted EBITDA, ROCE, and sustainability. A threshold\u00a0performance level is determined below which no pay-out is granted and a maximum performance level where maximum pay-out is reached.
\n\nFor share grants before 2020 a different program is in place. This program was introduced in 2015, as part of the remuneration policy adopted by the AGM on 22 May 2015, measuring performance over a period of three calendar years. The LTIP targets are the following: 60% is determined by EBITDA, 20% by Earnings Per Share (EPS), and 20% of the LTIP depends on relative TSR as compared to a specific TSR peer group.
\n\n\nThere are two target levels for this incentive: one applies to the CEO and one to the CFO. The CEO is entitled to a conditional share grant value of 100% of base salary. The CFO is entitled to a conditional share grant value of 80% of base salary. The total number of conditionally granted shares is determined by dividing the at target amount applicable for the respective Board member (as a percentage of base salary) by the share price. The share price is defined as the average closing price of the Corbion share during the last full calendar quarter preceding the conditional grant of shares.
\n\n\nAt the beginning of the three-year performance period, targets for the LTIP were set by the Supervisory Board as follows.
\n\nA target based on EBITDA, a threshold (minimum) and a range around the performance target to determine the actual payout for 60% of the LTIP.
\n\n\nA target based on EPS, a threshold (minimum) and a range around the performance target to determine the actual payout for 20% of the LTIP.
\n\n\nThe TSR performance is benchmarked against the TSR performance of Corbion\u2019s TSR peer group and the relative ranking determines the actual payout for another 20% of the LTIP.
\n\n\nMeeting the performance target(s) results in an LTIP payout at target level. A range of 50% around the performance target(s) (or lower as determined by the Supervisory Board) is set for the EBITDA and EPS performance to determine the actual payout. There is no payout below the low end of the range and no additional upside above the top end of the range. For the TSR performance, threshold payout is set at meeting the eighth position in the peer group. Target payout is achieved at the fourth and fifth position in the peer group and maximum payout is achieved at reaching the first and second position in the peer group.
\nYear of allocation | Total as at 31-12-2021 | Allocated in 2022 | Vested and expired in 2022 | Total as at 31-12-2022 |
2019 | 62,786 | \u00a0 | 62,786 | \u00a0 |
2020 | 53,627 | \u00a0 | \u00a0 | 53,627 |
2021 | 40,102 | \u00a0 | 4,738 | 35,364 |
2022 | \u00a0 | 55,608 | \u00a0 | 55,608 |
Total | 156,515 | 55,608 | 67,524 | 144,599 |
\nThe fair value of the non-market-based components of the above-mentioned performance-related shares allocated in 2022 was \u20ac 31.84 per share (2021: \u20ac 47.54). The fair value of the market-based components of the above-mentioned performance-related shares allocated in 2022 was \u20ac 38.79 per share (2021: \u20ac 57.06). The fair value of the market-based components is estimated by using the Black & Scholes model and the assumptions set forth below.
\n| \u00a0 | 2022 | 2021 |
Risk-free interest rate | 0.42% | 0.00% |
Expected dividend gains | \u00a0 | \u00a0 |
Expected volatility in share price | 31% | 29% |
Term | 3 years | 3 years |
\nAn equity-settled plan similar to the program for the Board of Management is in place for senior management.
\nYear of allocation | Total as at 31-12-2021 | Allocated in 2022 | Vested and expired in 2022 | Total as at 31-12-2022 |
2019 | 108,247 | \u00a0 | 108,247 | \u00a0 |
2020 | 123,185 | \u00a0 | 4,399 | 118,786 |
2021 | 122,266 | \u00a0 | 24,198 | 98,068 |
2022 | \u00a0 | 171,082 | \u00a0 | 171,082 |
Total | 353,698 | 171,082 | 136,844 | 387,936 |
\nThe CFO has 6,019 outstanding shares related to commitment awards. These shares were granted before he was appointed as CFO and are held in a separate blocked account until the end of his employment at Corbion.
\n\n\nThe capital expenditure commitments not yet incurred amounted to \u20ac 35.4 million for (in)tangible fixed assets as at 31 December 2022 (2021: \u20ac 50.7 million).
\n\nThird-party guarantees amounted to \u20ac 5.4 million as at 31 December 2022 (2021: \u20ac\u00a03.5 million). No significant future losses are expected from these guarantees.
\n\n\nNo significant events occurred between the end of the reporting period and the date that the\u00a0financial statements were authorized for issue that would affect the ability of users to make\u00a0proper evaluations and decisions.
\n\n\nThe consolidated financial statements of Corbion nv have been prepared in accordance with the International Financial Reporting Standards (IFRS) adopted by the European Union.
\n\nIn 2022, Corbion applied all the new and amended standards and interpretations published by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC), if and insofar as these applied to Corbion and were effective as at 1 January 2022. Corbion did not have to change its accounting policies or make retrospective adjustments as a result of adopting these standards.
\n\nA number of new standards are effective for annual periods beginning on or after 1 January 2023 and earlier application is permitted; however, Corbion has not yet adopted the new or amended standards in preparing these consolidated financial statements.
\n\n\nThe following amended standards and interpretations are not expected to have a significant impact on Corbion's consolidated financial statements.
\n\nIFRS 17 Insurance Contracts
\n\n\nAmendments to IAS 1 Presentation of Financial Statements
\n\n\nThe consolidation includes the financial data of Corbion nv and its group companies (together Corbion). All inter-company receivables, debts, and transactions have been eliminated. Group companies are companies in which Corbion nv exercises control. The results of acquisitions and divestments are recognized from the moment that control is obtained or transferred.
\n\n\nControl is achieved when Corbion:
\n\nhas power over the investee;
\n\n\nis exposed, or has rights to variable returns from its involvement with the investee; and
\n\n\nis able to use its power to affect the investee's returns.
\n\n\nCorbion reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.
\n\n\nWhen Corbion loses control over a group company, it derecognizes the assets and liabilities of the group company, and any related non-controlling interests and other components of equity. Any resulting gain or loss is recognized in profit or loss. Any interest retained in the former group company is measured at fair value when control is lost.
\n\nThe consolidated financial statements are in euros. The euro is Corbion nv\u2019s functional and presentation currency. The functional currency is the currency of the primary environment where the group company operates and may therefore differ from one company to another. Transactions in other than the functional currency are translated at the exchange rates that apply on the transaction date. Any monetary assets and liabilities resulting from such transactions are translated at the exchange rates as at the balance sheet date. Any exchange rate differences are recognized in the income statement, except when deferred in other comprehensive income (OCI) as qualifying cash flow hedges and net investment hedges.
\n\n\nThe assets and liabilities of consolidated foreign group companies and the long-term foreign-currency loans, which have been taken out to finance these subsidiaries, are converted to euros as at the balance sheet date, taking taxes into account. The subsequent currency translation differences are incorporated in the translation reserve in equity. The results of the foreign group companies are translated to euros on the basis of average exchange rates. The difference between net profit on the basis of average exchange rates and net profit on the basis of the exchange rates as at the balance sheet date is incorporated in the translation reserve in equity. The same applies to exchange rate differences arising from borrowings and other financial instruments if they hedge the currency risk related to net investments. If a foreign operation is divested or scaled down the associated cumulative currency translation differences are recognized as result in the income statement.\t
\n\nLand, buildings, machinery and equipment, and other operating assets are valued at the acquisition price or the cost of production, subject to straight-line depreciation calculated over the estimated economic life, the estimated residual value, and any accumulated impairment losses. The cost of production includes the cost of materials and direct labor and an attributable part of the indirect costs. Land is not depreciated. Grants are deducted from the acquisition price or the production costs of the assets to which the grant relates. Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to Corbion. Depreciation methods, useful lives, and residual values are reviewed at each reporting date and adjusted if appropriate.
\n\nAt inception of a contract, the group assesses whether a contract conveys the right to control the use of an identified asset for a period in exchange for consideration, in which case it is classified as a lease.
\n\n\nThe group recognizes a right-of-use asset (lease asset) and a lease liability at the lease commencement date. The asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to restore the underlying asset, less any lease incentives received.
\n\n\nThe lease asset is subsequently depreciated using the straight-line method from the commencement date to the end of the useful life of the right-of-use asset, considered to be indicated by the lease term. The lease asset is periodically adjusted for certain remeasurements of the lease liability and impairment losses (if any).
\n\n\nThe lease liability is initially measured at the present value of outstanding lease payments, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the group\u2019s incremental borrowing rate. Generally, Corbion uses its incremental borrowing rate as the discount rate.
\n\n\nThe lease liability is measured at amortized cost using the effective interest method and is remeasured when there is a change in future lease payments arising from a change in an index or rate or if the group changes its assessment of whether it will exercise a purchase, extension, or termination option. A corresponding adjustment is made to the carrying amount of the right-of-use asset with any excess over the carrying amount of the asset being recognized in profit or loss.
\n\n\nPayments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognized on a straight-line basis as an expense in profit or loss.
\n\nGoodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer\u2019s previously held equity interest in the acquiree (if any) over the net of the acquisition date amounts of the identifiable assets acquired and liabilities assumed. Goodwill is determined based on a comprehensive purchase price allocation analysis supported by subject matter expert calculations.
\n\n\nGoodwill is valued at cost less impairment. Goodwill is tested for impairment annually \u2013 or more often if there are indications for impairment. Impairment is the amount by which the book value of the goodwill of a cash-generating unit exceeds the recoverable amount, being the higher of (a) value in use and (b) fair value less costs of disposal. The value in use is the present value of the cash flows which the unit is expected to generate. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill\u00a0allocated to the unit and then to the other assets of the unit pro-rata based on the carrying amount of each asset in the unit. If impairment is incurred, the impairment is charged to the income statement. An impairment loss recognized for goodwill is not reversed in subsequent periods.
\n\n\nWhen an entity or activity is sold or closed down the goodwill allocated to the entity or activity is included in the calculations for the result of the sale.
\n\nThe customer base comprises the part of the paid acquisition sum which, upon acquisition, is allocated to the value of the acquired customer base. It is valued at fair value as at the acquisition date and amortized using a straight-line method over the estimated economic life. Amortization charges arising from the customer base are recognized in selling expenses.
\n\nBrands and licenses comprise the part of the paid acquisition sum which is allocated to the value of the acquired trademarks and product licenses. Brands and licenses are valued at fair value as at the acquisition date and subject to straight-line amortization calculated over the estimated economic life. Amortization charges arising from brands and licenses are recognized in selling expenses.
\n\nResearch and development costs comprise the part of the paid acquisition sum which is allocated to the value of the acquired research and development costs. These costs are valued at fair value as at the acquisition date. Own research costs are not capitalized, but charged to the income statement. Own development costs are capitalized if the appropriate criteria are met. Research and development costs are valued at cost and amortized using a straight-line method over the estimated economic life. Amortization charges arising from research and development costs are recognized in research and development costs.
\n\nOther intangible fixed assets consist primarily of capitalized or acquired third-party software and licenses and directly attributable personnel costs.
\n\n\nOther intangible fixed assets are valued at historical cost if capitalized or at fair value if acquired and amortized on a straight-line basis over the estimated economic life. Software and licenses amortization charges are recognized in general and administrative expenses. Emission rights are not recognized in the statement of financial position as cost is zero.
\n\nAt each reporting date an assessment is made whether there is any indication that non-current assets may be impaired. If indicators of impairment exist, the recoverable amount of the asset is estimated. If it is not possible
\n\n\nto estimate the recoverable amount of an individual asset, the recoverable amount of the cash-generating unit to which it belongs is estimated. Irrespective of whether there is any indication of impairment, Corbion also tests an intangible asset with an indefinite useful life or an intangible asset not yet available for use for impairment annually by comparing its carrying amount with its recoverable amount.
\n\n\nThe recoverable amount is the higher of an asset\u2019s fair value less costs of disposal and the asset\u2019s value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks inherent to the asset. An impairment loss is recognized in the income statement to the amount by which the asset\u2019s carrying amount exceeds its recoverable amount.
\n\n\nIn subsequent years, an assessment is made whether indications exist that impairment losses previously recognized for non-current assets other than goodwill may no longer exist or may have decreased. If any such indication exists, the recoverable amount of that asset is recalculated and, if required, its carrying amount is increased to the revised recoverable amount. The increase is recognized in operating income as an impairment reversal. An impairment reversal is recognized only if it arises from a change in the assumptions that were used to calculate the recoverable amount. The increase in an asset\u2019s carrying amount due to an impairment reversal is limited to the depreciated amount that would have been recognized had the original impairment not occurred.
\n\nInvestments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations each investor has rather than the legal structure of the joint arrangement. Joint operations arise where Corbion has rights to the assets and obligations relating to the arrangement and therefore accounts for its share of assets, liabilities, revenue, and expenses. Joint ventures arise where Corbion has rights to the net assets of the arrangement and therefore equity accounts for its interest.
\n\n\nAssociates are entities over which Corbion has significant influence but not control, generally involving a shareholding of between 20% and 50% of the voting rights. Significant influence is the power to participate in the financial and operating policy decisions of the entity but is not control or joint control over those policies. Associates are accounted for using the equity method.
\n\n\nUnder the equity method, investments in joint ventures and associates are measured initially at cost and subsequently adjusted for post-acquisition changes in Corbion\u2019s share of the net assets of the investment (net of any accumulated impairment in the value of individual investments). Where necessary, adjustments are made to the financial figures of joint ventures and associates for group reporting purposes to ensure consistency with the accounting policies of Corbion.
\n\n\nUnrealized gains on transactions between Corbion and its joint ventures and associates are eliminated to the extent of Corbion\u2019s stake in these investments. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the assets transferred.
\n\nDeferred taxes relate to tax loss carry forward and liabilities and assets arising from temporary differences between the tax bases and their carrying amounts in the consolidated financial statements. Deferred taxes are determined using tax rates that have been enacted at the balance sheet date and are expected to apply when the related deferred income tax is realized or the deferred tax liability is settled. Deferred tax assets are recognized if and insofar that it is likely that future taxable profit will be available against which the temporary difference and tax loss carry forward can be utilized.
\n\n\nTax assets and liabilities are netted when there is a legal right and the intention to offset. Deferred tax assets and liabilities with the same term and relating to the same fiscal unities and same tax authority are offset against each other.
\n\nInventories of raw materials, consumables, technical materials, and packaging are stated at the lower of cost (first in, first out) and net realizable value. Inventories of work in progress and finished products are stated at the lower of production cost and net realizable value. Total cost of production includes payroll costs and materials and an attributable part of the indirect production costs.
\n\nTrade receivables and debt securities issued are initially recognized upon origination. All other financial assets and financial liabilities are initially recognized when Corbion becomes a party to the contractual provisions of the instrument.
\n\n\nA financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.
\n\nOn initial recognition, a financial asset is classified as measured at amortized cost, at fair value through other comprehensive income (FVOCI) \u2013 debt investment, at FVOCI \u2013 equity investment, or at FVTPL.
\n\n\nFinancial assets are not reclassified subsequent to their initial recognition unless Corbion changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model. A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:
\n\nit is held within a business model whose objective is to hold assets to collect contractual cash flows; and
\n\n\nits contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
\n\n\nA debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
\n\nit is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
\n\n\nits contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
\n\n\nOn initial recognition of an equity investment that is not held for trading, Corbion may irrevocably elect to present subsequent changes in the investment\u2019s fair value in OCI. This election is made on an investment-by-investment basis.
\n\n\nAll financial assets not classified as measured at amortized cost or FVOCI (see above) are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
\n\n\nFinancial assets at FVTPL are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.
\n\n\nFinancial assets at amortized cost are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses, and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.
\n\n\nDebt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses, and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.
\n\n\nEquity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and never reclassified to profit or loss.
\n\nFinancial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, if it is a derivative, or designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.
\n\nCorbion derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or when it transfers the rights to receive the contractual cash flows in a transaction through which substantially all of the risks and rewards of ownership of the financial asset are transferred or through which Corbion neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.
\n\n\nIf, however, Corbion enters into transactions whereby it transfers assets recognized in its statement of financial position, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognized.
\n\nCorbion derecognizes a financial liability when its contractual obligations are discharged, cancelled, or expired. Corbion also derecognizes 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 recognized at fair value.
\n\n\nOn 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 recognized in profit or loss.
\n\nFinancial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when, the group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.
\n\nCorbion holds derivative financial instruments to hedge its foreign currency and commodity risk exposures. Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met.
\n\n\nDerivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognized in profit or loss.
\n\n\nCorbion designates certain derivatives as hedging instruments to hedge the variability in cash flows associated with highly probable forecast transactions arising from changes in foreign exchange rates, commodities, and certain non-derivative financial liabilities that hedge the foreign exchange risk associated with a net investment in a foreign operation.
\n\n\nAt inception of designated hedging relationships, Corbion documents the risk management objective and strategy for undertaking the hedge. Corbion also documents the economic relationship between the hedged item and the hedging instrument, including whether the changes in cash flows of the hedged item and hedging instrument are expected to offset each other.
\n\nWhen a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income and accumulated in the hedge reserve in equity. The effective portion of changes in the fair value of the derivative that is recognized in other comprehensive income is limited to the cumulative change in fair value of the hedged item, determined on a present value basis, from inception of the hedge. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in profit or loss.
\n\n\nWhen the hedged forecast transaction subsequently results in the recognition of a non-financial item such as inventory, the amount accumulated in the hedge reserve and the cost of the hedge reserve are included directly in the initial cost of the non-financial item when it is recognized.
\n\n\nFor all other hedged forecast transactions, the amount accumulated in the hedge reserve and the cost of the hedge reserve are reclassified to profit or loss for the period(s) in which the hedged expected future cash flows affect profit or loss.
\n\n\nIf the hedge no longer meets the criteria for hedge accounting or the hedging instrument expires, is sold, terminated, or exercised, then hedge accounting is discontinued prospectively. When hedge accounting for cash flow hedges is discontinued, the amount that has been accumulated in the hedge reserve remains in equity until, for a hedge of a transaction resulting in the recognition of a non-financial item, it is included in the non-financial item\u2019s cost on its initial recognition or, for other cash flow hedges, it is reclassified to profit or loss for the period(s) in which the hedged expected future cash flows affect profit or loss.
\n\n\nIf the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in the hedge reserve and the cost of the hedge reserve are immediately reclassified to profit or loss.
\n\nWhen a derivative instrument or a non-derivative financial liability is designated as the hedging instrument in a hedge for a net investment in a foreign operation, the effective portion, for a derivative, of changes in the fair value of the hedging instrument or, for a non-derivative, of foreign exchange gains and losses is recognized in other comprehensive income and presented in the translation reserve within equity. Any ineffective portion of the changes in the fair value of the derivative or foreign exchange gains and losses on the non-derivative is recognized immediately in profit or loss. The amount recognized in other comprehensive income is reclassified to profit or loss as a reclassification adjustment upon disposal of the foreign operation.
\n\nIncremental costs directly attributable to the issue of ordinary shares and share options are recognized as an equity deduction, net of tax. The price paid for repurchased shares (treasury shares) is deducted from equity until the shares are cancelled or reissued. Dividend to be distributed to the holders of ordinary shares is recognized as a liability upon approval of the profit appropriation by the annual General Meeting of Shareholders.
\n\n\nCorbion runs share plans for the Board of Management and senior management. The fair value of the right to shares on the date of allocation is recognized in the income statement as payroll costs over the vesting period of the awards with a corresponding increase in equity.
\n\nA defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate pension plan or insurance company and will have no legal or constructive obligation to pay further amounts. Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.
\n\n\nFor defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurements, comprising actuarial gains and losses, the effect of changes to the asset ceiling (if applicable), and the return on plan assets (excluding interest), are reflected immediately in the statement of financial position with a charge or credit recognized in other comprehensive income for the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. Past-service costs are recognized in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorized as follows:
\n\nService cost (including current-service cost, past-service cost, as well as gains and losses on curtailments and settlements)
\n\n\nNet interest expense or income
\n\n\nRemeasurements
\n\n\nThe first two components of defined benefit costs are presented in profit or loss. Curtailment gains and losses are accounted for as past-service costs.
\n\n\nThe retirement benefit obligation in the consolidated statement of financial position represents the actual deficit or surplus in the defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.
\n\n\nA liability for a termination benefit is recognized at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognizes any related restructuring costs.
\n\n\nCorbion accounts for its multi-employer defined benefit plan as if it were a defined contribution plan for the following reasons:
\n\nCorbion is affiliated to an industry-wide pension fund and uses the pension scheme in common with other participating companies.
\n\n\nUnder the regulations of the pension plan, the only obligation these participating companies have towards the pension fund is to pay the annual premium liability. Participating companies are under no obligation whatsoever to pay off any deficits the pension plan may incur. Nor have they any claim to any potential surpluses.
\n\n\nThe other long-term employee commitments relate mainly to anniversary commitments, past-service commitments, conditional incentive plans, and health insurance. These provisions are recognized on the basis of estimates that are consistent with the estimates used for the defined benefit obligations. However, all actuarial gains and losses are recognized in the income statement immediately.
\n\nProvisions relate to a legal or constructive obligation as a result of a past event, the amount of which is uncertain but can be estimated reliably and of which it is more likely than not that an outflow of resources is required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flow at a pre-tax rate that reflects the current market assessments of time value of money and the risks specific to the liability. A provision for reorganization is recognized after Corbion has approved a detailed and formal restructuring plan and the restructuring has either commenced or been announced publicly. A provision for a legal claim is recognized if a reliable estimate can be made of the expected outcome of the claim, measuring the claim as a weighting of all possible outcomes against their probabilities. A provision for an onerous contract is recognized when the expected benefits to be derived from the contract are lower than the unavoidable costs of fulfilling its terms and conditions. Unless the possibility of an outflow of resources embodying economic benefits is remote, a contingent liability is disclosed at the balance sheet.
\n\nInterest-bearing liabilities are recognized initially at fair value and subsequently at amortized cost using the effective interest method. Upon sale or settlement of interest-bearing liabilities any profits or losses are directly recognized in the income statement.
\n\nAn operating segment is an entity that engages in business activities from which it earns revenues and incurs expenses. All operating segments are reviewed regularly by the Board of Management to make decisions about resources to be allocated to the segments and assess their performance for which discrete financial information is available.
\n\nNet sales comprises the proceeds of goods delivered to third parties less discounts and value-added tax.
\n\n\nRevenue from the sale of goods in the normal course of business is recognized at a point in time when the performance obligation is met and based on the amount of the transaction price that is allocated to the performance obligation. The transaction price is the amount of the consideration to which the company expects to be entitled in exchange for transferring the promised goods to the customer. The consideration expected by the company may include fixed and/or variable amounts which can be impacted by sales returns, trade discounts, and volume rebates. Revenue from the sale of goods is recognized when control of the asset is transferred to the buyer and only when it is highly probable that a significant reversal of revenue will not occur as uncertainties related to a variable consideration have been resolved.
\n\nCost of sales contains the following components:
\n\nCosts of raw materials and consumables which relate to the cost of consumption of raw materials, consumables, and packaging materials. Costs of raw materials and consumables are recognized in the income statement when the risks and rewards of ownership of the goods sold have been transferred to a party outside the group. These costs include the purchase price of all raw materials, consumables, and all directly attributable costs.
\n\n\nProduction costs which are the costs relating to production operations.
\n\n\nWarehousing and distribution costs which relate to the costs of warehousing and transport, including transport insurance.
\n\n\nSelling expenses relate to the costs of marketing and sales.
\n\nGeneral and administrative expenses relate to the costs of administration, management, and IT.
\n\nFinancial income comprises interest income on cash and cash equivalents and interest income on loans to other parties. Interest income is recognized in the period to which it relates, using the effective interest method.
\n\n\nFinancial charges comprise interest expenses and exchange differences on borrowings, leases, impairments of available-for-sale assets, and other financial expenses. All borrowing costs are recognized in the income statement using the effective interest method.
\n\nTax on the result is calculated on the basis of the result before taxes, taking account of untaxed profit elements, non- and part-deductible costs, and fiscal facilities. The prevailing nominal tax rates are applied. Non-recoverable withholding taxes on foreign dividends are taken into account.
\n\n\nTaxes in the income statement for the year comprise current and deferred taxes. Taxes are recognized in the income statement unless they relate to items directly recognized in equity or other comprehensive income. Current tax is the expected tax rate payable on the taxable income for the year, using statutory tax rates at the balance sheet date, and any adjustment to tax payable in respect of previous years. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. Corbion measures its tax balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty.
\n\nThe consolidated cash flow statement is drawn up using the indirect method. The items in the consolidated income statement and consolidated statement of the financial position have been adjusted for changes that do not impact cash inflow and outflow in the reporting year. Cash flows in foreign currencies are translated to the functional currency at the average foreign exchange rates unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case cash flows are translated at the rate on the dates of the transactions.
\n\nCorbion makes use of accounting estimates and judgments. The inputs into our estimates and assumptions consider the climate-related matters on our critical accounting estimates. Corbion believes there is considerable uncertainty over these assumptions and how they will impact the buinsess operations and the cash flow projections. The estimates and assumptions have been based on the available information and regulations in place as of 31 December 2022.
\n\n\nDescribed below are the estimates and judgments as at the balance sheet date that carry a substantial risk of a material adjustment to the book value of assets and liabilities in the next financial year.
\n\nCorbion has a process in place to identify all assets and liabilities acquired, including intangible fixed assets. The judgments made in identifying all acquired assets, determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact the results of operations. Estimated fair values are based on information available around the acquisition date and on expectations and assumptions of anticipated discounted cash flows that have been assessed as reasonable by Corbion. For more information on acquisitions see Note 26.
\n\nEvery year, Corbion tests the goodwill for impairment based on the higher of fair value less cost to sell and the value-in-use method. The value in use is calculated on the basis of estimates and judgments of the expected cash flows which are discounted on a WACC basis. For a description of the main estimates, valuation assumptions, and a sensitivity analysis of the applied assumptions see Note 12.
\n\n(In)tangible fixed assets are tested for sustained impairment if there is an indication of possible impairment. This applies to intangible assets with indefinite useful lives or assets not yet available for use. A key factor is the recoverable amount which is calculated on the basis of estimates and assumptions of anticipated discounted cash flows, on the one hand, and an estimate of the fair value less cost to sell, on the other. For more information on impairments see Notes 10 and 12.
\n\nActuarial calculations are used to determine provisions for group personnel arrangements and net receivables or obligations from group pension plans. These calculations use assumptions in respect of future developments in salary, mortality, staff turnover, return on investments et cetera. Changes to these estimates and assumptions can lead to actuarial gains and losses which are recognized in the consolidated statement of comprehensive income. For more information on the applied assumptions see Note 21.
\n\nCorbion is subject to various tax systems across the world. Estimates and judgments are used to determine the tax items in the financial statements. Interpretation differences in tax liabilities are also taken into account. For more information on taxes see Note 22.\t
\n\nThe consolidated financial statements of Corbion nv have been prepared in accordance with the International Financial Reporting Standards (IFRS) adopted by the European Union.
\n\nIn 2022, Corbion applied all the new and amended standards and interpretations published by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC), if and insofar as these applied to Corbion and were effective as at 1 January 2022. Corbion did not have to change its accounting policies or make retrospective adjustments as a result of adopting these standards.
\n\nA number of new standards are effective for annual periods beginning on or after 1 January 2023 and earlier application is permitted; however, Corbion has not yet adopted the new or amended standards in preparing these consolidated financial statements.
\n\n\nThe following amended standards and interpretations are not expected to have a significant impact on Corbion's consolidated financial statements.
\n\nIFRS 17 Insurance Contracts
\n\n\nAmendments to IAS 1 Presentation of Financial Statements
\n\n\nIn 2022, Corbion applied all the new and amended standards and interpretations published by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC), if and insofar as these applied to Corbion and were effective as at 1 January 2022. Corbion did not have to change its accounting policies or make retrospective adjustments as a result of adopting these standards.
\n\nA number of new standards are effective for annual periods beginning on or after 1 January 2023 and earlier application is permitted; however, Corbion has not yet adopted the new or amended standards in preparing these consolidated financial statements.
\n\n\nThe following amended standards and interpretations are not expected to have a significant impact on Corbion's consolidated financial statements.
\n\nIFRS 17 Insurance Contracts
\n\n\nAmendments to IAS 1 Presentation of Financial Statements
\n\n\nThe consolidation includes the financial data of Corbion nv and its group companies (together Corbion). All inter-company receivables, debts, and transactions have been eliminated. Group companies are companies in which Corbion nv exercises control. The results of acquisitions and divestments are recognized from the moment that control is obtained or transferred.
\n\n\nControl is achieved when Corbion:
\n\nhas power over the investee;
\n\n\nis exposed, or has rights to variable returns from its involvement with the investee; and
\n\n\nis able to use its power to affect the investee's returns.
\n\n\nCorbion reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.
\n\n\nWhen Corbion loses control over a group company, it derecognizes the assets and liabilities of the group company, and any related non-controlling interests and other components of equity. Any resulting gain or loss is recognized in profit or loss. Any interest retained in the former group company is measured at fair value when control is lost.
\n\nThe consolidated financial statements are in euros. The euro is Corbion nv\u2019s functional and presentation currency. The functional currency is the currency of the primary environment where the group company operates and may therefore differ from one company to another. Transactions in other than the functional currency are translated at the exchange rates that apply on the transaction date. Any monetary assets and liabilities resulting from such transactions are translated at the exchange rates as at the balance sheet date. Any exchange rate differences are recognized in the income statement, except when deferred in other comprehensive income (OCI) as qualifying cash flow hedges and net investment hedges.
\n\n\nThe assets and liabilities of consolidated foreign group companies and the long-term foreign-currency loans, which have been taken out to finance these subsidiaries, are converted to euros as at the balance sheet date, taking taxes into account. The subsequent currency translation differences are incorporated in the translation reserve in equity. The results of the foreign group companies are translated to euros on the basis of average exchange rates. The difference between net profit on the basis of average exchange rates and net profit on the basis of the exchange rates as at the balance sheet date is incorporated in the translation reserve in equity. The same applies to exchange rate differences arising from borrowings and other financial instruments if they hedge the currency risk related to net investments. If a foreign operation is divested or scaled down the associated cumulative currency translation differences are recognized as result in the income statement.\t
\n\nLand, buildings, machinery and equipment, and other operating assets are valued at the acquisition price or the cost of production, subject to straight-line depreciation calculated over the estimated economic life, the estimated residual value, and any accumulated impairment losses. The cost of production includes the cost of materials and direct labor and an attributable part of the indirect costs. Land is not depreciated. Grants are deducted from the acquisition price or the production costs of the assets to which the grant relates. Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to Corbion. Depreciation methods, useful lives, and residual values are reviewed at each reporting date and adjusted if appropriate.
\n\nAt inception of a contract, the group assesses whether a contract conveys the right to control the use of an identified asset for a period in exchange for consideration, in which case it is classified as a lease.
\n\n\nThe group recognizes a right-of-use asset (lease asset) and a lease liability at the lease commencement date. The asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to restore the underlying asset, less any lease incentives received.
\n\n\nThe lease asset is subsequently depreciated using the straight-line method from the commencement date to the end of the useful life of the right-of-use asset, considered to be indicated by the lease term. The lease asset is periodically adjusted for certain remeasurements of the lease liability and impairment losses (if any).
\n\n\nThe lease liability is initially measured at the present value of outstanding lease payments, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the group\u2019s incremental borrowing rate. Generally, Corbion uses its incremental borrowing rate as the discount rate.
\n\n\nThe lease liability is measured at amortized cost using the effective interest method and is remeasured when there is a change in future lease payments arising from a change in an index or rate or if the group changes its assessment of whether it will exercise a purchase, extension, or termination option. A corresponding adjustment is made to the carrying amount of the right-of-use asset with any excess over the carrying amount of the asset being recognized in profit or loss.
\n\n\nPayments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognized on a straight-line basis as an expense in profit or loss.
\n\nGoodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer\u2019s previously held equity interest in the acquiree (if any) over the net of the acquisition date amounts of the identifiable assets acquired and liabilities assumed. Goodwill is determined based on a comprehensive purchase price allocation analysis supported by subject matter expert calculations.
\n\n\nGoodwill is valued at cost less impairment. Goodwill is tested for impairment annually \u2013 or more often if there are indications for impairment. Impairment is the amount by which the book value of the goodwill of a cash-generating unit exceeds the recoverable amount, being the higher of (a) value in use and (b) fair value less costs of disposal. The value in use is the present value of the cash flows which the unit is expected to generate. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill\u00a0allocated to the unit and then to the other assets of the unit pro-rata based on the carrying amount of each asset in the unit. If impairment is incurred, the impairment is charged to the income statement. An impairment loss recognized for goodwill is not reversed in subsequent periods.
\n\n\nWhen an entity or activity is sold or closed down the goodwill allocated to the entity or activity is included in the calculations for the result of the sale.
\n\nThe customer base comprises the part of the paid acquisition sum which, upon acquisition, is allocated to the value of the acquired customer base. It is valued at fair value as at the acquisition date and amortized using a straight-line method over the estimated economic life. Amortization charges arising from the customer base are recognized in selling expenses.
\n\nBrands and licenses comprise the part of the paid acquisition sum which is allocated to the value of the acquired trademarks and product licenses. Brands and licenses are valued at fair value as at the acquisition date and subject to straight-line amortization calculated over the estimated economic life. Amortization charges arising from brands and licenses are recognized in selling expenses.
\n\nResearch and development costs comprise the part of the paid acquisition sum which is allocated to the value of the acquired research and development costs. These costs are valued at fair value as at the acquisition date. Own research costs are not capitalized, but charged to the income statement. Own development costs are capitalized if the appropriate criteria are met. Research and development costs are valued at cost and amortized using a straight-line method over the estimated economic life. Amortization charges arising from research and development costs are recognized in research and development costs.
\n\nOther intangible fixed assets consist primarily of capitalized or acquired third-party software and licenses and directly attributable personnel costs.
\n\n\nOther intangible fixed assets are valued at historical cost if capitalized or at fair value if acquired and amortized on a straight-line basis over the estimated economic life. Software and licenses amortization charges are recognized in general and administrative expenses. Emission rights are not recognized in the statement of financial position as cost is zero.
\n\nAt each reporting date an assessment is made whether there is any indication that non-current assets may be impaired. If indicators of impairment exist, the recoverable amount of the asset is estimated. If it is not possible
\n\n\nto estimate the recoverable amount of an individual asset, the recoverable amount of the cash-generating unit to which it belongs is estimated. Irrespective of whether there is any indication of impairment, Corbion also tests an intangible asset with an indefinite useful life or an intangible asset not yet available for use for impairment annually by comparing its carrying amount with its recoverable amount.
\n\n\nThe recoverable amount is the higher of an asset\u2019s fair value less costs of disposal and the asset\u2019s value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks inherent to the asset. An impairment loss is recognized in the income statement to the amount by which the asset\u2019s carrying amount exceeds its recoverable amount.
\n\n\nIn subsequent years, an assessment is made whether indications exist that impairment losses previously recognized for non-current assets other than goodwill may no longer exist or may have decreased. If any such indication exists, the recoverable amount of that asset is recalculated and, if required, its carrying amount is increased to the revised recoverable amount. The increase is recognized in operating income as an impairment reversal. An impairment reversal is recognized only if it arises from a change in the assumptions that were used to calculate the recoverable amount. The increase in an asset\u2019s carrying amount due to an impairment reversal is limited to the depreciated amount that would have been recognized had the original impairment not occurred.
\n\nInvestments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations each investor has rather than the legal structure of the joint arrangement. Joint operations arise where Corbion has rights to the assets and obligations relating to the arrangement and therefore accounts for its share of assets, liabilities, revenue, and expenses. Joint ventures arise where Corbion has rights to the net assets of the arrangement and therefore equity accounts for its interest.
\n\n\nAssociates are entities over which Corbion has significant influence but not control, generally involving a shareholding of between 20% and 50% of the voting rights. Significant influence is the power to participate in the financial and operating policy decisions of the entity but is not control or joint control over those policies. Associates are accounted for using the equity method.
\n\n\nUnder the equity method, investments in joint ventures and associates are measured initially at cost and subsequently adjusted for post-acquisition changes in Corbion\u2019s share of the net assets of the investment (net of any accumulated impairment in the value of individual investments). Where necessary, adjustments are made to the financial figures of joint ventures and associates for group reporting purposes to ensure consistency with the accounting policies of Corbion.
\n\n\nUnrealized gains on transactions between Corbion and its joint ventures and associates are eliminated to the extent of Corbion\u2019s stake in these investments. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the assets transferred.
\n\nDeferred taxes relate to tax loss carry forward and liabilities and assets arising from temporary differences between the tax bases and their carrying amounts in the consolidated financial statements. Deferred taxes are determined using tax rates that have been enacted at the balance sheet date and are expected to apply when the related deferred income tax is realized or the deferred tax liability is settled. Deferred tax assets are recognized if and insofar that it is likely that future taxable profit will be available against which the temporary difference and tax loss carry forward can be utilized.
\n\n\nTax assets and liabilities are netted when there is a legal right and the intention to offset. Deferred tax assets and liabilities with the same term and relating to the same fiscal unities and same tax authority are offset against each other.
\n\nInventories of raw materials, consumables, technical materials, and packaging are stated at the lower of cost (first in, first out) and net realizable value. Inventories of work in progress and finished products are stated at the lower of production cost and net realizable value. Total cost of production includes payroll costs and materials and an attributable part of the indirect production costs.
\n\nTrade receivables and debt securities issued are initially recognized upon origination. All other financial assets and financial liabilities are initially recognized when Corbion becomes a party to the contractual provisions of the instrument.
\n\n\nA financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.
\n\nOn initial recognition, a financial asset is classified as measured at amortized cost, at fair value through other comprehensive income (FVOCI) \u2013 debt investment, at FVOCI \u2013 equity investment, or at FVTPL.
\n\n\nFinancial assets are not reclassified subsequent to their initial recognition unless Corbion changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model. A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:
\n\nit is held within a business model whose objective is to hold assets to collect contractual cash flows; and
\n\n\nits contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
\n\n\nA debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
\n\nit is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
\n\n\nits contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
\n\n\nOn initial recognition of an equity investment that is not held for trading, Corbion may irrevocably elect to present subsequent changes in the investment\u2019s fair value in OCI. This election is made on an investment-by-investment basis.
\n\n\nAll financial assets not classified as measured at amortized cost or FVOCI (see above) are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
\n\n\nFinancial assets at FVTPL are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.
\n\n\nFinancial assets at amortized cost are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses, and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.
\n\n\nDebt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses, and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.
\n\n\nEquity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and never reclassified to profit or loss.
\n\nFinancial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, if it is a derivative, or designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.
\n\nCorbion derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or when it transfers the rights to receive the contractual cash flows in a transaction through which substantially all of the risks and rewards of ownership of the financial asset are transferred or through which Corbion neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.
\n\n\nIf, however, Corbion enters into transactions whereby it transfers assets recognized in its statement of financial position, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognized.
\n\nCorbion derecognizes a financial liability when its contractual obligations are discharged, cancelled, or expired. Corbion also derecognizes 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 recognized at fair value.
\n\n\nOn 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 recognized in profit or loss.
\n\nFinancial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when, the group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.
\n\nCorbion holds derivative financial instruments to hedge its foreign currency and commodity risk exposures. Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met.
\n\n\nDerivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognized in profit or loss.
\n\n\nCorbion designates certain derivatives as hedging instruments to hedge the variability in cash flows associated with highly probable forecast transactions arising from changes in foreign exchange rates, commodities, and certain non-derivative financial liabilities that hedge the foreign exchange risk associated with a net investment in a foreign operation.
\n\n\nAt inception of designated hedging relationships, Corbion documents the risk management objective and strategy for undertaking the hedge. Corbion also documents the economic relationship between the hedged item and the hedging instrument, including whether the changes in cash flows of the hedged item and hedging instrument are expected to offset each other.
\n\nWhen a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income and accumulated in the hedge reserve in equity. The effective portion of changes in the fair value of the derivative that is recognized in other comprehensive income is limited to the cumulative change in fair value of the hedged item, determined on a present value basis, from inception of the hedge. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in profit or loss.
\n\n\nWhen the hedged forecast transaction subsequently results in the recognition of a non-financial item such as inventory, the amount accumulated in the hedge reserve and the cost of the hedge reserve are included directly in the initial cost of the non-financial item when it is recognized.
\n\n\nFor all other hedged forecast transactions, the amount accumulated in the hedge reserve and the cost of the hedge reserve are reclassified to profit or loss for the period(s) in which the hedged expected future cash flows affect profit or loss.
\n\n\nIf the hedge no longer meets the criteria for hedge accounting or the hedging instrument expires, is sold, terminated, or exercised, then hedge accounting is discontinued prospectively. When hedge accounting for cash flow hedges is discontinued, the amount that has been accumulated in the hedge reserve remains in equity until, for a hedge of a transaction resulting in the recognition of a non-financial item, it is included in the non-financial item\u2019s cost on its initial recognition or, for other cash flow hedges, it is reclassified to profit or loss for the period(s) in which the hedged expected future cash flows affect profit or loss.
\n\n\nIf the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in the hedge reserve and the cost of the hedge reserve are immediately reclassified to profit or loss.
\n\nWhen a derivative instrument or a non-derivative financial liability is designated as the hedging instrument in a hedge for a net investment in a foreign operation, the effective portion, for a derivative, of changes in the fair value of the hedging instrument or, for a non-derivative, of foreign exchange gains and losses is recognized in other comprehensive income and presented in the translation reserve within equity. Any ineffective portion of the changes in the fair value of the derivative or foreign exchange gains and losses on the non-derivative is recognized immediately in profit or loss. The amount recognized in other comprehensive income is reclassified to profit or loss as a reclassification adjustment upon disposal of the foreign operation.
\n\nIncremental costs directly attributable to the issue of ordinary shares and share options are recognized as an equity deduction, net of tax. The price paid for repurchased shares (treasury shares) is deducted from equity until the shares are cancelled or reissued. Dividend to be distributed to the holders of ordinary shares is recognized as a liability upon approval of the profit appropriation by the annual General Meeting of Shareholders.
\n\n\nCorbion runs share plans for the Board of Management and senior management. The fair value of the right to shares on the date of allocation is recognized in the income statement as payroll costs over the vesting period of the awards with a corresponding increase in equity.
\n\nA defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate pension plan or insurance company and will have no legal or constructive obligation to pay further amounts. Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.
\n\n\nFor defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurements, comprising actuarial gains and losses, the effect of changes to the asset ceiling (if applicable), and the return on plan assets (excluding interest), are reflected immediately in the statement of financial position with a charge or credit recognized in other comprehensive income for the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. Past-service costs are recognized in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorized as follows:
\n\nService cost (including current-service cost, past-service cost, as well as gains and losses on curtailments and settlements)
\n\n\nNet interest expense or income
\n\n\nRemeasurements
\n\n\nThe first two components of defined benefit costs are presented in profit or loss. Curtailment gains and losses are accounted for as past-service costs.
\n\n\nThe retirement benefit obligation in the consolidated statement of financial position represents the actual deficit or surplus in the defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.
\n\n\nA liability for a termination benefit is recognized at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognizes any related restructuring costs.
\n\n\nCorbion accounts for its multi-employer defined benefit plan as if it were a defined contribution plan for the following reasons:
\n\nCorbion is affiliated to an industry-wide pension fund and uses the pension scheme in common with other participating companies.
\n\n\nUnder the regulations of the pension plan, the only obligation these participating companies have towards the pension fund is to pay the annual premium liability. Participating companies are under no obligation whatsoever to pay off any deficits the pension plan may incur. Nor have they any claim to any potential surpluses.
\n\n\nThe other long-term employee commitments relate mainly to anniversary commitments, past-service commitments, conditional incentive plans, and health insurance. These provisions are recognized on the basis of estimates that are consistent with the estimates used for the defined benefit obligations. However, all actuarial gains and losses are recognized in the income statement immediately.
\n\nProvisions relate to a legal or constructive obligation as a result of a past event, the amount of which is uncertain but can be estimated reliably and of which it is more likely than not that an outflow of resources is required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flow at a pre-tax rate that reflects the current market assessments of time value of money and the risks specific to the liability. A provision for reorganization is recognized after Corbion has approved a detailed and formal restructuring plan and the restructuring has either commenced or been announced publicly. A provision for a legal claim is recognized if a reliable estimate can be made of the expected outcome of the claim, measuring the claim as a weighting of all possible outcomes against their probabilities. A provision for an onerous contract is recognized when the expected benefits to be derived from the contract are lower than the unavoidable costs of fulfilling its terms and conditions. Unless the possibility of an outflow of resources embodying economic benefits is remote, a contingent liability is disclosed at the balance sheet.
\n\nInterest-bearing liabilities are recognized initially at fair value and subsequently at amortized cost using the effective interest method. Upon sale or settlement of interest-bearing liabilities any profits or losses are directly recognized in the income statement.
\n\nAn operating segment is an entity that engages in business activities from which it earns revenues and incurs expenses. All operating segments are reviewed regularly by the Board of Management to make decisions about resources to be allocated to the segments and assess their performance for which discrete financial information is available.
\n\nNet sales comprises the proceeds of goods delivered to third parties less discounts and value-added tax.
\n\n\nRevenue from the sale of goods in the normal course of business is recognized at a point in time when the performance obligation is met and based on the amount of the transaction price that is allocated to the performance obligation. The transaction price is the amount of the consideration to which the company expects to be entitled in exchange for transferring the promised goods to the customer. The consideration expected by the company may include fixed and/or variable amounts which can be impacted by sales returns, trade discounts, and volume rebates. Revenue from the sale of goods is recognized when control of the asset is transferred to the buyer and only when it is highly probable that a significant reversal of revenue will not occur as uncertainties related to a variable consideration have been resolved.
\n\nCost of sales contains the following components:
\n\nCosts of raw materials and consumables which relate to the cost of consumption of raw materials, consumables, and packaging materials. Costs of raw materials and consumables are recognized in the income statement when the risks and rewards of ownership of the goods sold have been transferred to a party outside the group. These costs include the purchase price of all raw materials, consumables, and all directly attributable costs.
\n\n\nProduction costs which are the costs relating to production operations.
\n\n\nWarehousing and distribution costs which relate to the costs of warehousing and transport, including transport insurance.
\n\n\nSelling expenses relate to the costs of marketing and sales.
\n\nGeneral and administrative expenses relate to the costs of administration, management, and IT.
\n\nFinancial income comprises interest income on cash and cash equivalents and interest income on loans to other parties. Interest income is recognized in the period to which it relates, using the effective interest method.
\n\n\nFinancial charges comprise interest expenses and exchange differences on borrowings, leases, impairments of available-for-sale assets, and other financial expenses. All borrowing costs are recognized in the income statement using the effective interest method.
\n\nTax on the result is calculated on the basis of the result before taxes, taking account of untaxed profit elements, non- and part-deductible costs, and fiscal facilities. The prevailing nominal tax rates are applied. Non-recoverable withholding taxes on foreign dividends are taken into account.
\n\n\nTaxes in the income statement for the year comprise current and deferred taxes. Taxes are recognized in the income statement unless they relate to items directly recognized in equity or other comprehensive income. Current tax is the expected tax rate payable on the taxable income for the year, using statutory tax rates at the balance sheet date, and any adjustment to tax payable in respect of previous years. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. Corbion measures its tax balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty.
\n\nThe consolidated cash flow statement is drawn up using the indirect method. The items in the consolidated income statement and consolidated statement of the financial position have been adjusted for changes that do not impact cash inflow and outflow in the reporting year. Cash flows in foreign currencies are translated to the functional currency at the average foreign exchange rates unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case cash flows are translated at the rate on the dates of the transactions.
\n\nCorbion makes use of accounting estimates and judgments. The inputs into our estimates and assumptions consider the climate-related matters on our critical accounting estimates. Corbion believes there is considerable uncertainty over these assumptions and how they will impact the buinsess operations and the cash flow projections. The estimates and assumptions have been based on the available information and regulations in place as of 31 December 2022.
\n\n\nDescribed below are the estimates and judgments as at the balance sheet date that carry a substantial risk of a material adjustment to the book value of assets and liabilities in the next financial year.
\n\nCorbion has a process in place to identify all assets and liabilities acquired, including intangible fixed assets. The judgments made in identifying all acquired assets, determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact the results of operations. Estimated fair values are based on information available around the acquisition date and on expectations and assumptions of anticipated discounted cash flows that have been assessed as reasonable by Corbion. For more information on acquisitions see Note 26.
\n\nEvery year, Corbion tests the goodwill for impairment based on the higher of fair value less cost to sell and the value-in-use method. The value in use is calculated on the basis of estimates and judgments of the expected cash flows which are discounted on a WACC basis. For a description of the main estimates, valuation assumptions, and a sensitivity analysis of the applied assumptions see Note 12.
\n\n(In)tangible fixed assets are tested for sustained impairment if there is an indication of possible impairment. This applies to intangible assets with indefinite useful lives or assets not yet available for use. A key factor is the recoverable amount which is calculated on the basis of estimates and assumptions of anticipated discounted cash flows, on the one hand, and an estimate of the fair value less cost to sell, on the other. For more information on impairments see Notes 10 and 12.
\n\nActuarial calculations are used to determine provisions for group personnel arrangements and net receivables or obligations from group pension plans. These calculations use assumptions in respect of future developments in salary, mortality, staff turnover, return on investments et cetera. Changes to these estimates and assumptions can lead to actuarial gains and losses which are recognized in the consolidated statement of comprehensive income. For more information on the applied assumptions see Note 21.
\n\nCorbion is subject to various tax systems across the world. Estimates and judgments are used to determine the tax items in the financial statements. Interpretation differences in tax liabilities are also taken into account. For more information on taxes see Note 22.\t
\n\nIn line with the management responsibilities and internal management reporting for its strategic decision-making process Corbion distinguishes between the segments Sustainable Food Solutions, Lactic Acid & Specialties, Algae Ingredients, and Incubator (together Core), and Non-core.
\n\n\nIn Sustainable Food Solutions, Corbion has evolved increasingly from an ingredients business into a solutions business. We plan to expand on this solutions model with natural food preservation and functional systems as our core capabilities, enabling us to accelerate growth in close adjacencies.
\n\n\nIn our Lactic Acid & Specialties business, we aim to capitalize on our market and technology leadership in lactic acid and lactic acid derivatives. Corbion leads the lactic acid market in technology, production capacity, geographic coverage, and breadth of portfolio.
\n\n\nAlgae Ingredients is a new segment (being carved out from the Incubator into its own reporting segment) recognizing the growth potential of this business and as a result of reaching EBITDA break-even in algae-based omega-3 DHA in June 2022 (before reallocation of G&A costs). By leveraging expertise in large-scale industrial fermentation, we anticipate significant further growth and profitability as a global supplier of algae ingredients providing nutritional benefits for human and animal diets.
\n\n\nIn our Incubator, where we develop early-stage initiatives, we work on five selected platforms: Algae portfolio extension, Biopolymers, Natural preservation, Circular raw materials, and Net zero. These long-term platforms are all linked to one of the three business units and embedded in their innovation programs.
\n\n\nNon-core activities comprise emulsifiers which have a declining strategic fit.\u00a0
\n\n\nTransfer prices between operating segments are on an arm\u2019s length basis in a manner similar to transactions with third parties.
\n| \u00a0 | Sustainable Food Solutions | Lactic Acid & Specialties | Algae Ingredients | Incubator | Core 1 | Non-core | Corbion total operations 2 | |||||||
| \u00a0 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 |
Income statement information | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Net sales | 780.0 | 584.2 | 400.1 | 312.3 | 74.3 | 30.7 | \u00a0 | \u00a0 | 1,254.4 | 927.2 | 203.5 | 143.6 | 1,457.9 | 1,070.8 |
Operating result | 62.8 | 55.7 | 47.6 | 30.1 | -13.4 | -17.0 | -10.0 | -3.8 | 87.0 | 65.0 | 23.8 | 17.0 | 110.8 | 82.0 |
Adjustments to operating result | -6.8 | -13.3 | 0.6 | 9.9 | 2.4 | 0.2 | 0.8 | 0.5 | -3.0 | -2.7 | 0.2 | -7.6 | -2.8 | -10.3 |
Adjusted operating result | 56.0 | 42.4 | 48.2 | 40.0 | -11.0 | -16.8 | -9.2 | -3.3 | 84.0 | 62.3 | 24.0 | 9.4 | 108.0 | 71.7 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Alternative non-IFRS performance measures | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
EBITDA | 102.7 | 88.4 | 66.1 | 68.4 | -5.7 | -10.8 | -10.0 | -3.8 | 153.1 | 142.2 | 34.1 | 29.2 | 187.2 | 171.4 |
Adjustments to EBITDA | -6.8 | -13.3 | 0.6 | -11.7 | 2.4 | 0.2 | 0.8 | 0.5 | -3.0 | -24.3 | 0.2 | -11.3 | -2.8 | -35.6 |
Adjusted EBITDA | 95.9 | 75.1 | 66.7 | 56.7 | -3.3 | -10.6 | -9.2 | -3.3 | 150.1 | 117.9 | 34.3 | 17.9 | 184.4 | 135.8 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Ratios alternative non-IFRS performance measures | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
EBITDA margin % | 13.2 | 15.1 | 16.5 | 21.9 | -7.7 | -35.2 | \u00a0 | \u00a0 | 12.2 | 15.3 | 16.8 | 20.3 | 12.8 | 16.0 |
Adjusted EBITDA margin % | 12.3 | 12.9 | 16.7 | 18.2 | -4.4 | -34.5 | \u00a0 | \u00a0 | 12.0 | 12.7 | 16.9 | 12.5 | 12.6 | 12.7 |
\nCorbion generates almost all of its revenues from the sale of goods.
\n\nIn the above table and elsewhere in the financial statements a number of non-IFRS performance measures are presented. Management is of the opinion that these so-called alternative performance measures might be useful for the readers of these financial statements. Corbion management uses these performance measures to make financial, operational, and strategic decisions and evaluate performance of the segments.\u00a0
\n\n\nThe alternative performance measures can be calculated as follows:
\n\nEBITDA is the operating result before depreciation, amortization, and impairment of (in)tangible fixed assets.
\n\n\nEBITDA margin is EBITDA divided by net sales x 100.
\n\n| \u00a0 | Net sales | |
| \u00a0 | 2022 | 2021 |
The Netherlands | 33.5 | 24.9 |
Rest of EMEA | 277.1 | 191.8 |
US | 674.2 | 499.2 |
Rest of North America | 44.5 | 77.4 |
Latin America | 193.8 | 83.7 |
Asia | 234.8 | 193.8 |
Corbion total operations | 1,457.9 | 1,070.8 |
\nThe above sales information is based on the location of the customer.\u00a0
\n| \u00a0 | Non-current assets | |
| \u00a0 | 2022 | 2021 |
The Netherlands | 214.4 | 197.0 |
Rest of EMEA | 30.7 | 27.2 |
US | 304.9 | 259.0 |
Rest of North America | 9.8 | 9.4 |
Brazil | 103.7 | 73.4 |
Thailand | 252.9 | 144.8 |
Rest of Asia | 4.6 | 3.2 |
Corbion total operations | 921.0 | 714.0 |
\nThe above information is based on the geographical location of the assets. Non-current assets exclude those relating to financial instruments, deferred tax assets, and post-employment benefit assets.
\n\n\nAt year end 2022, Corbion had a total number of employees (FTEs) of 2.601, of which 643 in the Netherlands, 200 in the rest of Europe, 897 in North America, 526 in Latin America and 335 in Asia.\u00a0At year end 2021, Corbion had a total number of employees (FTEs) of 2.493, of which 628 in the Netherlands, 182 in the rest of Europe, 878 in North America, 496 in Latin America and 309 in Asia.
\n\n| \u00a0 | Net sales | |
| \u00a0 | 2022 | 2021 |
Preservation | 357.1 | 248.2 |
Functional systems | 330.6 | 256.4 |
Single ingredients | 92.3 | 79.6 |
Sustainable Food Solutions | 780.0 | 584.2 |
Lactic acid | 169.1 | 147.4 |
Lactate esters | 83.6 | 55.8 |
Lactates | 59.7 | 44.0 |
Biopolymers | 49.2 | 37.3 |
Other | 38.5 | 27.8 |
Lactic Acid & Specialties | 400.1 | 312.3 |
Algae Ingredients | 74.3 | 30.7 |
Incubator | 0.0 | 0.0 |
Non-core activities | 203.5 | 143.6 |
Corbion total operations | 1,457.9 | 1,070.8 |
\nFulfillment of the performance obligations related to goods sold is measured using the commercial shipment terms as an\u00a0indicator for the transfer of control. Fulfillment of the performance obligations for services rendered is identified\u00a0according to the individual contract. The payment terms are determined per business segment on a customer basis. Corbion\u00a0has neither specific obligations for returns or refunds, nor specific warranties or other related obligations.
\n\n| \u00a0 | 2022 | 2021 |
|---|---|---|
Bookprofit sale Totowa warehouse | 9.7 | \u00a0 |
Bookprofit on sale of a plot of land in the Dutch municipality of Breda | -0.2 | 18.4 |
Bookprofit on sale of the Frozen Dough activities | \u00a0 | 11.8 |
Release of milestone as a result of impairment on the FiberLive development | \u00a0 | 5.0 |
Remeasurement contingent purchase price SB Renewable Oils | -2.3 | -0.2 |
Total | 7.2 | 35.0 |
| \u00a0 | 2022 | 2021 |
Payroll | 194.1 | 169.5 |
Pension expenses \u2013 defined benefit pension plans | 0.5 | 0.5 |
Pension expenses \u2013 defined contribution pension plans | 14.6 | 13.0 |
Other social insurance | 20.5 | 18.1 |
Share-based remuneration | 4.8 | 3.5 |
Total | 234.5 | 204.6 |
| \u00a0 | 2022 | 2021 |
Depreciation of tangible fixed assets | 60.7 | 51.0 |
Amortization of intangible fixed assets | 15.7 | 13.1 |
Impairment of (in)tangible fixed assets | \u00a0 | 25.3 |
Total | 76.4 | 89.4 |
| \u00a0 | 2022 | 2021 |
Interest income | -3.4 | -1.9 |
Interest charges | 14.8 | 9.3 |
Exchange rate differences | -9.1 | 2.9 |
Interest expense on defined benefit pension plans - net | \u00a0 | -0.1 |
Capitalized borrowing costs | -1.6 | \u00a0 |
Unwinding of contingent consideration | 1.2 | 2.2 |
Interest expense on lease liabilities | 2.6 | 2.2 |
Other | 0.8 | -0.4 |
Total | 5.3 | 14.2 |
| \u00a0 | 2022 | 2021 |
Current tax | 20.4 | 10.6 |
Current tax (prior-year adjustments) | -0.2 | -0.6 |
Deferred tax | 6.2 | -1.8 |
Tax charge (income) | 26.4 | 8.2 |
| \u00a0 | 2022 | 2021 |
Result before taxes | 116.4 | 86.5 |
Applicable tax charge at average statutory tax rate | 28.2 | 21.4 |
Income not subject to tax | -4.1 | -7.6 |
Expenses not deductible for tax purposes | 2.5 | 2.4 |
Effect of the reversal of tax assets | 1.1 | -8.1 |
Currency effects | -0.3 | 1.9 |
Additions to/releases from tax provision | \u00a0 | -0.9 |
Changes in tax rates | \u00a0 | -0.5 |
Other effects | -1.0 | -0.4 |
Tax charge (income) | 26.4 | 8.2 |
Average tax rate on operations | 22.7% | 9.5% |
\nThe average statutory tax rate is the average of the statutory tax rates in the countries where Corbion operates, weighted on the basis of the result before taxes in each of these countries.
\n\n\nThe main impact of income not subject to tax is caused by the positive result recognized with respect to the joint venture with TotalEnergies which is not subject to tax under the provisions of the participation exemption (impact \u20ac -2.8 million). The impact of investment deductions and other non-taxable income amount to \u20ac -1.3 million.
\n\n\nExpenses not deductible for tax purposes include the effect of non-deductible costs in multiple jurisdictions (impact \u20ac 2.5 million).
\n\n\nThe effect of the reversal of tax assets is caused by the recognition of a valuation allowance of tax assets related to tax loss carry forwards and temporary differences in certain jurisdictions (\u20ac 2.2 million) as well as the recognition of previously unrecognized deferred tax assets related to tax loss carry forwards in certain jurisdictions (\u20ac -1.1 million).
\n\n\nThe impact of currency effects (\u20ac -0.3 million) is caused by reporting entities which have a tax reporting currency which deviates from their functional currency.
\n\n\nOther effects include adjustments in respect of current-year events and the impact of changes to relevant regulations, facts, or other factors compared to those used in establishing the current tax position or deferred tax balance in previous years (impact \u20ac -1.0 million).
\n\n\nThe difference between the average tax rates 2022 (22.7%) and 2021 (9.5%) is mainly attributable to the effect in 2021 of the recognition of the previously unrecognized deferred tax asset which materialized as a result of the sale of the plot of land in Breda.
\n\n\nThe realization of deferred tax assets depends on the expected future profitability. Deferred tax assets are not recognized if it is not likely that a tax benefit can be realized.
\n| \u00a0 | 2022 | 2021 |
Tax liability due to loan-related exchange rate differences | -3.9 | -4.5 |
Tax liability due to hedge results of financial instruments | -1.8 | 0.9 |
Tax charge (income) recognized in equity | -5.7 | -3.6 |
\nEarnings per ordinary share are calculated by dividing the profit available for holders of ordinary shares by the weighted average number of outstanding ordinary shares in Corbion nv.
\n\n\nDiluted earnings per ordinary share are calculated by dividing the profit available for holders of ordinary shares by the weighted average number of outstanding ordinary shares in Corbion nv adjusted for the effects of potential exercise of share rights by the Board of Management and senior management.
\n| \u00a0 | 2022 | 2021 |
Result after taxes | 90.0 | 78.3 |
Profit available for holders of ordinary shares (A) | 90.0 | 78.3 |
| \u00a0 | \u00a0 | \u00a0 |
Weighted average number of outstanding ordinary shares (B) | 59.0 | 58.9 |
Plus: ordinary shares related to share rights | 0.5 | 0.5 |
Weighted average number of outstanding ordinary shares after dilution (C) | 59.5 | 59.4 |
| \u00a0 | \u00a0 | \u00a0 |
Per ordinary share in euros | \u00a0 | \u00a0 |
Basic earnings (A/B) | 1.53 | 1.33 |
Diluted earnings (A/C) | 1.51 | 1.32 |
| \u00a0 | Land | Buildings | Machinery and equipment | Other fixed assets | Under construction | Total |
1\u00a0January 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Acquisition prices | 14.3 | 178.6 | 653.3 | 65.9 | 64.2 | 976.3 |
Cumulative depreciation/impairments | \u00a0 | -87.2 | -486.3 | -47.4 | \u00a0 | -620.9 |
Book value | 14.3 | 91.4 | 167.0 | 18.5 | 64.2 | 355.4 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Movements | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Capital expenditure | \u00a0 | 0.1 | 0.7 | 0.4 | 149.7 | 150.9 |
Divestments | \u00a0 | \u00a0 | -0.9 | -0.1 | \u00a0 | -1.0 |
Exchange rate differences | \u00a0 | 1.6 | 4.0 | 0.2 | 1.9 | 7.7 |
Acquisition of group companies | \u00a0 | \u00a0 | 0.3 | 0.2 | \u00a0 | 0.5 |
Depreciation | \u00a0 | -6.0 | -30.1 | -4.1 | \u00a0 | -40.2 |
Impairment | \u00a0 | \u00a0 | -2.0 | \u00a0 | \u00a0 | -2.0 |
Assets classified as held for sale | -0.6 | -0.5 | \u00a0 | \u00a0 | \u00a0 | -1.1 |
Other | 0.6 | 11.2 | 45.9 | 0.7 | -61.8 | -3.4 |
Net movement in book value | 0.0 | 6.4 | 17.9 | -2.7 | 89.8 | 111.4 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
31\u00a0December 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Acquisition prices | 14.3 | 189.8 | 707.0 | 63.6 | 154.0 | 1,128.7 |
Cumulative depreciation/impairments | \u00a0 | -92.0 | -522.1 | -47.8 | \u00a0 | -661.9 |
Book value | 14.3 | 97.8 | 184.9 | 15.8 | 154.0 | 466.8 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Movements | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Capital expenditure | \u00a0 | \u00a0 | 1.3 | 2.3 | 212.7 | 216.3 |
Divestments | \u00a0 | \u00a0 | -0.4 | -0.1 | \u00a0 | -0.5 |
Exchange rate differences | 0.8 | 6.9 | 9.0 | 1.3 | 6.9 | 24.9 |
Depreciation | \u00a0 | -6.7 | -35.6 | -4.4 | \u00a0 | -46.7 |
Other | \u00a0 | 6.3 | 61.7 | 2.4 | -70.1 | 0.3 |
Net movement in book value | 0.8 | 6.5 | 36.0 | 1.5 | 149.5 | 194.3 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
31\u00a0December 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Acquisition prices | 15.1 | 207.8 | 794.5 | 71.4 | 303.5 | 1,392.3 |
Cumulative depreciation/impairments | \u00a0 | -103.5 | -573.6 | -54.1 | \u00a0 | -731.2 |
Book value | 15.1 | 104.3 | 220.9 | 17.3 | 303.5 | 661.1 |
Depreciation rates | \u00a0 | 2.5 - 4% | 6.7-12.5% | 20-50% | \u00a0 | \u00a0 |
\nIn 2022, no impairments were recorded.
\n\n\nFor the Algae Ingredients business, management has identified triggers to reassess the valuation of\u00a0tangible fixed assets because of improved business performance, offset by adverse developments in the WACC. The cash flow projections are derived from\u00a0the financial and business plans for 2023 which have been approved by the Board of Management. The\u00a0key assumptions in the cash flow projections are related to revenue projections, EBITDA developments,\u00a0the rates used for discounting cash flows and the terminal growth rate. In 2022 no additional impairment\u00a0loss or a reversal of an impairment was recognized.
\n\n\nIn 2021, an impairment was recorded for assets related to the FiberLive project.
\n\n\nThe Other line item relates to transfers from Under construction to other categories within Property, plant, and equipment and transfers to intangible fixed assets and inventories.
\n\n| \u00a0 | Land | Buildings | Machinery and equipment | Other fixed assets | Total |
Book value 31\u00a0December 2021 | 0.2 | 59.6 | 1.1 | 5.2 | 66.1 |
Additions | \u00a0 | 3.2 | 0.8 | 7.3 | 11.3 |
Modification to lease term | \u00a0 | 0.1 | 0.1 | 0.7 | 0.9 |
Exchange rate differences | \u00a0 | 3.8 | \u00a0 | 0.3 | 4.1 |
Depreciation | \u00a0 | -9.1 | -1.0 | -3.9 | -14.0 |
Book value 31\u00a0December 2022 | 0.2 | 57.6 | 1.0 | 9.6 | 68.4 |
\nThe maturity of the lease liabilities is as follows.
\n| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Current | 12.3 | 9.9 |
Non-current | 61.2 | 59.5 |
Total lease liabilities | 73.5 | 69.4 |
\nCorbion's main leases are contracts for office locations, warehouses, and leased vehicles (the main category in Other fixed assets). Some property leases contain extension options exercisable by Corbion. Corbion assesses at the lease commencement date whether it is reasonably certain that the extension options will be exercised. Corbion reassesses whether it is reasonably certain that the extension options will be exercised if there is a significant event or significant change in circumstances within its control. As at 31 December 2022, potential future undiscounted cash outflows of \u20ac 80.8 million (31 December 2021: \u20ac 67.8 million) have not been included in the lease liability because it is not reasonably certain that the leases will be extended. Lease payments are in substance fixed and the group had no leases with variable lease payments.
\n\n| \u00a0 | Goodwill | Customer base | Brands and licenses | Development costs | Other intangible fixed assets | Total |
1 January 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Acquisition prices | 73.2 | 22.6 | 33.2 | 41.6 | 64.9 | 235.5 |
Cumulative amortization/impairments | -3.1 | -17.8 | -8.7 | -10.2 | -30.0 | -69.8 |
Book value | 70.1 | 4.8 | 24.5 | 31.4 | 34.9 | 165.7 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Movements | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Capital expenditure | \u00a0 | \u00a0 | \u00a0 | 2.6 | 11.5 | 14.1 |
Exchange rate differences | 4.5 | 0.1 | 0.2 | 0.5 | 0.2 | 5.5 |
Acquisition of group companies | 3.1 | 2.0 | 0.1 | 2.9 | \u00a0 | 8.1 |
Amortization | \u00a0 | -0.8 | -0.5 | -3.3 | -8.5 | -13.1 |
Impairment | \u00a0 | \u00a0 | -19.9 | -3.4 | \u00a0 | -23.3 |
Other | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 0.9 | 0.9 |
Net movement in book value | 7.6 | 1.3 | -20.1 | -0.7 | 4.1 | -7.8 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
31\u00a0December 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Acquisition prices | 81.0 | 25.6 | 34.1 | 47.9 | 75.5 | 264.1 |
Cumulative amortization/impairments | -3.3 | -19.5 | -29.7 | -17.2 | -36.5 | -106.2 |
Book value | 77.7 | 6.1 | 4.4 | 30.7 | 39.0 | 157.9 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Movements | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Capital expenditure | \u00a0 | \u00a0 | \u00a0 | 0.7 | 13.9 | 14.6 |
Exchange rate differences | 5.8 | 0.7 | 0.2 | 0.2 | 0.2 | 7.1 |
Amortization | \u00a0 | -1.0 | -0.6 | -3.7 | -10.4 | -15.7 |
Other | \u00a0 | \u00a0 | \u00a0 | -0.3 | \u00a0 | -0.3 |
Net movement in book value | 5.8 | -0.3 | -0.4 | -3.1 | 3.7 | 5.7 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
31\u00a0December 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Acquisition prices | 87.0 | 27.2 | 34.8 | 49.2 | 90.1 | 288.3 |
Cumulative amortization/impairments | -3.5 | -21.4 | -30.8 | -21.6 | -47.4 | -124.7 |
Book value | 83.5 | 5.8 | 4.0 | 27.6 | 42.7 | 163.6 |
Amortization rates | \u00a0 | 7 - 20% | 5 - 10% | 5 - 33.3% | 33.3% | \u00a0 |
\nGoodwill is allocated to Corbion's cash-generating units identified as the operating segments. The operating segments Sustainable Food Solutions and Lactic Acid & Specialties represent the levels to which company goodwill is allocated for the purposes of impairment testing. The Algae Ingredients and Incubator segments do not contain any goodwill.
\n\n\nKey reasons for this approach are:
\n\nIt represents a non-arbitrary, reasonable, and consistent basis for the allocation of goodwill.
\n\n\nThe allocation is in line with the expected synergies at the time of an acquisition with benefits for more than one entity.
\n\n\nThe allocation represents the lowest level where goodwill is monitored by the Board of Management, while not being larger than the operating segments.
\n\n| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Sustainable Food Solutions | 81.3 | 75.5 |
Lactic Acid & Specialties | 2.2 | 2.2 |
Total operations | 83.5 | 77.7 |
\nThe recoverable amount of both segments is determined using a value-in-use method. The main assumptions used are derived from the financial and business plans for 2023 which have been approved by the Board of Management. From 2024 onwards a stable growth of 1% (consistent with the goodwill impairment test in prior year) is taken into account in combination with a relatively constant cost structure.
\n\n\nThe future cash flows are discounted on the basis of the WACC before tax.
\n| \u00a0 | As at 31-12-2022 | As at 31-12-2021 | ||
| \u00a0 | pre-tax | post-tax | pre-tax | post-tax |
Sustainable Food Solutions | 10.4% | 8.4% | 6.9% | 5.8% |
Lactic Acid & Specialties | 11.9% | 9.5% | 7.2% | 5.8% |
\nIn addition, sensitivity analyses have been carried out in respect of the assumptions using:
\n\nterminal value growth of 0%;
\n\n\na discount rate of +1%.
\n\n\nBoth assumptions applicable at the same time would not lead to any impairment.
\n\n\nGiven the above assumptions and the outcome of analyses, the Board of Management has concluded that the value in use of both segments is not lower than the book value of the segments including goodwill.
\n\n\nThe majority of the brands and licenses consist of assets not yet available for use.
\n\nIn 2022, no impairments were recorded.
\n\n\nIn 2021, the following impairments were recorded:
\n\n\n
\n\nA partial impairment of \u20ac 19.6 million (recorded partly in the 'Brands and licenses' and partly in the 'Development costs' category) related to our FiberLive activities (part of the Lactic Acid & Specialties segment). This was based on a reassessment of\u00a0volume development and timing due to slower than expected technological developments. The\u00a0impairment on the intangible fixed assets has been recorded on the income statement line item 'Research and development costs'. Further, an impairment of \u20ac 2.0 million on Property, plant, and equipment has been recorded on the income statement line item 'Cost of sales'.
The recoverable amount (based on the value-in-use method)\u00a0of the projected cash flows underlying the impairment calculation amounts to \u20ac 2.4 million and is\u00a0sensitive to various assumptions, especially the volume, technological, and price development.\u00a0
\nA full impairment of \u20ac 3.8 million (recorded in the 'Brands and licenses' category) related to our FDCA business (part of the Incubator segment) based on a reassessment of\u00a0volume development and timing due to slower than expected technological developments. The\u00a0impairment has been recorded on the income statement line item 'Research and development costs'.
\n\n\nSet out below are the associates and joint ventures of the group as at 31 December 2022 which, in the opinion of management, are material to the group. The entity listed below has share capital consisting solely of ordinary shares, which are held directly by the group. The proportion of ownership interest is the same as the proportion of voting rights held.
\nName of entity | Country of incorporation | % of ownership interest | Nature of relationship | Measurement method | Carrying amount | |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 2022 | 2021 |
TotalEnergies Corbion bv | The Netherlands | 50% | Joint venture | Equity method | 27.9 | 23.2 |
\nTotalEnergies Corbion bv is a global leader in marketing, sale, and production of PolyLactic Acid (PLA). The principal places of business are the Netherlands for marketing and sales activities and Thailand for the main production activities.
\n\n\nAs it is a private entity, no quoted fair value price is available.
\n\n\nThe tables below provide summarized financial information on the joint ventures and associates that are material to the group. The information disclosed reflects the amounts presented in the financial statements of the respective joint ventures and associates, rather than Corbion's share of those amounts. They have been amended to reflect adjustments made by the entity when using the equity method, including fair value adjustments and modifications for differences in accounting policy.
\nTotalEnergies Corbion bv | 2022 | 2021 |
| \u00a0 | \u00a0 | \u00a0 |
Current assets | \u00a0 | \u00a0 |
Cash and cash equivalents | 15.1 | 31.7 |
Other current assets | 61.2 | 63.3 |
Total current assets | 76.3 | 95.0 |
Non-current assets | 138.0 | 128.1 |
Current liabilities | \u00a0 | \u00a0 |
Other current liabilities | 17.7 | 44.5 |
Total current liabilities | 17.7 | 44.5 |
Non-current liabilities | 137.0 | 129.2 |
Net assets | 59.6 | 49.4 |
| \u00a0 | \u00a0 | \u00a0 |
Reconciliation to carrying amounts | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 |
Opening net assets | 49.4 | 30.3 |
Comprehensive income for the period | 21.4 | 32.8 |
Dividends declared | -14.2 | -16.9 |
Exchange rate differences | 3.0 | 3.2 |
Closing net assets | 59.6 | 49.4 |
| \u00a0 | \u00a0 | \u00a0 |
Group's share (50%) | 29.8 | 24.7 |
Elimination of unrealized profit on downstream sales | -1.9 | -1.5 |
Carrying amount | 27.9 | 23.2 |
| \u00a0 | \u00a0 | \u00a0 |
Summarized statement of comprehensive income | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 |
Revenue | 165.8 | 159.8 |
Operating result | 36.0 | 47.8 |
Depreciation and amortization | -6.8 | -6.8 |
Interest expense | -6.7 | -4.0 |
Income tax expense | -7.5 | -10.9 |
| \u00a0 | \u00a0 | \u00a0 |
Profit for the period | 21.8 | 32.9 |
Other comprehensive income | -0.4 | -0.1 |
Total comprehensive income | 21.4 | 32.8 |
| \u00a0 | \u00a0 | \u00a0 |
Dividends received by Corbion | 14.3 | 4.2 |
\nThe agreement between shareholders stipulates an equal distribution of dividends between shareholders. For 2020 and 2021, the shareholders agreed to an uneven distribution, in such a way that the shareholders received an equal cumulative amount of (interim) dividend over those two years, but that amounts per shareholder in an individual year can differ.
\n\n\nIn December 2021 a dividend of $\u00a015 million was declared (of which $\u00a07.5 million to be distributed to Corbion) which was received in 2022.\u00a0Further, in 2022, a dividend of $\u00a015 million was declared (of which $\u00a07.5 million to be distributed to Corbion) which was also received in 2022.
\n\n| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Loans granted to joint venture TotalEnergies Corbion bv | 64.6 | 60.7 |
Long-term tax receivables | 32.7 | 22.9 |
Other | 2.1 | 11.2 |
Total | 99.4 | 94.8 |
| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Raw materials, consumables, technical materials, and packaging | 93.7 | 56.7 |
Work in progress | 17.4 | 11.2 |
Finished product | 226.8 | 167.0 |
Impairment provision | -6.7 | -4.9 |
Total | 331.2 | 230.0 |
\nThis increase in inventories is a result of currency effects, higher raw material prices, higher safety stocks, and longer lead times in the supply chain.
\n\n| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Trade receivables | 211.8 | 164.4 |
Impairment provision | -1.3 | -1.2 |
Total trade receivables | 210.5 | 163.2 |
Other receivables | 30.2 | 39.4 |
Derivatives | 3.7 | 10.1 |
Prepayments and accrued income | 12.0 | 8.7 |
Total other receivables | 45.9 | 58.2 |
Total receivables | 256.4 | 221.4 |
\nTrade receivables are not interest-bearing and generally have an average term of credit of 30-90 days. The group applies the IFRS 9 simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance for all trade receivables.
\n| \u00a0 | Total | < 30 days | 30-60 days | 60-90 days | > 90 days |
Sustainable Food Solutions | 22.9 | 15.7 | 3.2 | 1.6 | 2.4 |
Lactic Acid & Specialties | 9.3 | 6.4 | 1.3 | 0.6 | 1.0 |
Algae Ingredients | 1.7 | 1.2 | 0.2 | 0.1 | 0.2 |
Incubator | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Total | 33.9 | 23.3 | 4.7 | 2.3 | 3.6 |
| \u00a0 | 2022 | 2021 |
As at 1 January | -1.2 | -1.4 |
Additions/releases | -0.9 | -0.5 |
Use | 0.8 | 0.8 |
Exchange rate differences | \u00a0 | -0.1 |
As at 31 December | -1.3 | -1.2 |
\nThe additions to / releases from the trade receivables impairment provision are recognized as selling expenses.
\n\n| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Cash and bank balances | 58.2 | 42.2 |
Short-term deposits | \u00a0 | \u00a0 |
Total | 58.2 | 42.2 |
\nThere are no significant cash and cash equivalent balances held by the entity that are not\u00a0available for use by the group.
\n\n| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Property, plant, and equipment | \u00a0 | 1.1 |
Total assets held for sale | \u00a0 | 1.1 |
\nNo impairment loss was recognized upon reclassification as held for sale as the fair value less costs to sell is higher than the carrying amount. The held for sale item in 2021 relates to a warehouse in Totowa (US) which has been sold in January 2022.\u00a0
\n\n\nAs at 31 December 2022, the authorized share capital totaled \u20ac\u00a045.5 million, consisting of 182 million ordinary shares with a nominal value of \u20ac\u00a00.25 each.
\n| \u00a0 | Ordinary shares |
As at 1\u00a0January 2022 | 59,242,792 |
As at 31\u00a0December 2022 | 59,242,792 |
| \u00a0 | Ordinary shares |
As at 1 January 2022 | 58,950,269 |
Share-based remuneration | 62,649 |
As at 31\u00a0December 2022 | 59,012,918 |
| \u00a0 | Number |
As at 1\u00a0January 2022 | 292,523 |
Share-based remuneration | -62,649 |
As at 31\u00a0December 2022 | 229,874 |
\nAs at 31\u00a0December 2022, Corbion had a treasury stock of 229,874 ordinary shares at its disposal with a nominal value of \u20ac 0.25 each (representing 0.39% of the total share capital issued). Treasury stock shares have no dividend rights.
\n| \u00a0 | Movements in legal reserves | \u00a0 | \u00a0 | ||
| \u00a0 | Translation reserve | Hedge reserve | Development costs | Share plan reserve | Total |
As at 1 January 2021 | -1.0 | 5.4 | 31.4 | 6.6 | 42.4 |
\u2022 Net investment hedge | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
- Exchange rate differences foreign currency loan | -20.1 | \u00a0 | \u00a0 | \u00a0 | -20.1 |
- Tax effect | 5.0 | \u00a0 | \u00a0 | \u00a0 | 5.0 |
\u2022 Translation difference | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
- Foreign group companies | 25.4 | \u00a0 | \u00a0 | \u00a0 | 25.4 |
- Tax effect | -0.5 | \u00a0 | \u00a0 | \u00a0 | -0.5 |
\u2022 Cash flow hedge | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
- Fluctuations in fair value derivatives | \u00a0 | 3.6 | \u00a0 | \u00a0 | 3.6 |
- Tax effect | \u00a0 | -0.9 | \u00a0 | \u00a0 | -0.9 |
\u2022 Share-based remuneration charged to result | \u00a0 | \u00a0 | \u00a0 | 3.5 | 3.5 |
\u2022 Share-based remuneration transfers | \u00a0 | \u00a0 | \u00a0 | -3.8 | -3.8 |
\u2022 Movement in capitalization of development costs | \u00a0 | \u00a0 | -0.7 | \u00a0 | -0.7 |
As at 31\u00a0December 2021 | 8.8 | 8.1 | 30.7 | 6.3 | 53.9 |
\u2022 Net investment hedge | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
- Exchange rate differences foreign currency loan | -16.8 | \u00a0 | \u00a0 | \u00a0 | -16.8 |
- Tax effect | 4.3 | \u00a0 | \u00a0 | \u00a0 | 4.3 |
\u2022 Translation difference | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
- Foreign group companies | 28.2 | \u00a0 | \u00a0 | \u00a0 | 28.2 |
- Tax effect | -0.3 | \u00a0 | \u00a0 | \u00a0 | -0.3 |
\u2022 Cash flow hedge | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
- Fluctuations in fair value derivatives | \u00a0 | -7.0 | \u00a0 | \u00a0 | -7.0 |
- Tax effect | \u00a0 | 1.7 | \u00a0 | \u00a0 | 1.7 |
\u2022 Share-based remuneration charged to result | \u00a0 | \u00a0 | \u00a0 | 4.8 | 4.8 |
\u2022 Share-based remuneration transfers | \u00a0 | \u00a0 | \u00a0 | -3.8 | -3.8 |
\u2022 Movement in capitalization of development costs | \u00a0 | \u00a0 | -3.1 | \u00a0 | -3.1 |
As at 31\u00a0December 2022 | 24.2 | 2.8 | 27.6 | 7.3 | 61.9 |
\nIn specific circumstances legal reserves must be created in accordance with Part 9, Book 2 of the Dutch Civil Code. The legal reserves comprise the translation reserve, hedge reserve, and development cost reserve. Whenever a legal reserve has a negative value no payments can be made from the retained earnings up to the level of the negative value(s). The positive legal reserves as at 31 December 2022 amount to \u20ac 54.6 million.
\n\n\nA reserve for non-transferable profits is not applicable as Corbion has no restrictions to transfer profits from its operations in the different countries.
\n\nThe translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations, as well as the effective portion of any foreign currency differences arising from hedges of a net investment in a foreign operation.
\n\nThe hedge reserve comprises the effective portion of the cumulative net change in the fair value of hedging instruments used in cash flow hedges pending subsequent recognition in profit or loss as the hedged cash flows or items affect profit or loss.
\n\nThe development cost reserve comprises a\u00a0statutory reserve\u00a0for capitalized development expenditure in accordance with the Dutch Civil Code.
\n\nThe share plan reserve comprises all movements in equity-settled share-based remuneration plans.
\n\nFor the year 2022, a regular dividend in cash of \u20ac 0.56 per ordinary share (2021: \u20ac 0.56), in total \u20ac 33.0 million (2021: \u20ac 33.0 million) will be submitted for approval to the annual General Meeting of Shareholders, to be held on 17 May 2023.\u00a0Proposed dividends on ordinary shares\u00a0are subject to approval at the annual General Meeting of Shareholders and are not recognized as a liability as at 31 December.
\n\n| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Reorganization and restructuring | 0.4 | 0.5 |
Other | 9.5 | 8.4 |
Total | 9.9 | 8.9 |
| \u00a0 | Reorganization and restructuring | Other | Total |
As at 1\u00a0January 2022 | 0.5 | 8.4 | 8.9 |
Addition charged to result | 0.4 | 1.4 | 1.8 |
Release credited to result | \u00a0 | -0.3 | -0.3 |
Withdrawal for intended purpose | -0.5 | -0.3 | -0.8 |
Exchange rate differences | \u00a0 | 0.3 | 0.3 |
As at 31\u00a0December 2022 | 0.4 | 9.5 | 9.9 |
\nThe other provisions relate mainly to loss-making contracts, legal disputes, and other litigation risks. An amount of \u20ac 9.0 million was recorded in other receivables related to expected reimbursement for insurance claims.
\n\n| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Net defined benefit asset | -0.1 | -0.5 |
Net defined benefit liability | 2.5 | 3.7 |
Other long-term employee benefit commitments | 1.5 | 1.4 |
Total | 3.9 | 4.6 |
\nNet defined benefit assets and liabilities relate to post-employment defined benefit arrangements.
\n\nOther long-term employee benefit commitments relate mainly to anniversary commitments, conditional incentive plans, and health insurance.
\n\nCorbion sponsors defined benefit pension plans in the US and the UK. Both plans are closed schemes and based on final pay. Further, Corbion sponsors a legal severance payment plan in Thailand. All plans have been established in accordance with the legal requirements of the countries involved. The defined benefit plans are administered by a separate fund that is legally separated from the entity. The board of the pension fund is composed of an equal number of representatives from both employers and (former) employees. \t
\n\n\nThe plans typically expose the group to actuarial risks such as investment risk, interest rate risk, and longevity risk.
\n\nInvestment risk -\u00a0The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to high-quality corporate bond yields; if the return on plan assets falls below this rate, it will create a plan deficit.
\n\n\nInterest rate risk -\u00a0A decrease in the bond interest rate will increase the plan liability; however, this will be partly offset by an increase in the return on the plan's debt investments.
\n\n\nLongevity risk -\u00a0The present value of the defined benefit liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan's liability.
\n\n\nThe defined benefit obligation as per year-end consisted almost entirely of the UK plan and is summarized below:
\n\nThe Normal Retirement Age (NRA) is 65; however, Section 1 members are able to take their benefits in respect of pre 1 October 2003 service unreduced from age 60.
\n\n\nPensions in deferment increase in line with statutory revaluation with the exception of pre 1 October 2003 benefits for Section 1 members, which have an underpin linked to the level of pension increases in payment (which are linked to the Consumer Price Index (CPI)).
\n\n\nPensions in payment increase in line with CPI capped at 5% for benefits in respect of pre 1 January 2006 service and CPI capped at 2.5% for benefits in respect of post 31 December 2005 service.\t
\n\n\nIn 2021, an insurance policy was acquired to fund all the employee benefits in the plan. Corbion retained the legal obligation to pay further amounts if the insurer does not pay the employee benefits specified in the insurance policy.
\n\n\nThe average duration of the defined benefit obligation as at 31 December 2022 is 18 years.
\n| \u00a0 | 2022 | 2021 |
Current-service costs | 0.5 | 0.5 |
Net interest income | \u00a0 | -0.1 |
Total pension costs recognized in income statement | 0.5 | 0.4 |
| \u00a0 | \u00a0 | \u00a0 |
Remeasurements net defined benefit liability | \u00a0 | \u00a0 |
- Return on plan assets (excluding amounts included in interest income) | 35.3 | 23.8 |
- Actuarial (gains)/losses arising from changes in demographic assumptions | -3.3 | -0.2 |
- Actuarial (gains)/losses arising from changes in financial assumptions | -36.6 | -4.5 |
- Actuarial (gains)/losses arising from experience adjustments | 3.4 | 1.0 |
Total pension costs recognized in other comprehensive income | -1.2 | 20.1 |
Total | -0.7 | 20.5 |
| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Present value of defined benefit obligations | 54.1 | 92.9 |
Fair value of plan assets | -51.7 | -89.7 |
Funded status | 2.4 | 3.2 |
Restrictions on assets recognized | \u00a0 | \u00a0 |
Net liability/(asset) | 2.4 | 3.2 |
| \u00a0 | 2022 | 2021 |
As at 1 January | 92.9 | 97.5 |
Current-service costs | 0.5 | 0.5 |
Interest charges | 1.7 | 1.5 |
Pension payments | -2.4 | -10.0 |
Remeasurement (gains)/losses | \u00a0 | \u00a0 |
- Actuarial (gains)/losses arising from changes in demographic assumptions | -3.3 | -0.2 |
- Actuarial (gains)/losses arising from changes in financial assumptions | -36.6 | -4.5 |
- Actuarial (gains)/losses arising from experience adjustments | 3.4 | 1.0 |
Exchange rate differences | -2.1 | 7.1 |
As at 31 December | 54.1 | 92.9 |
| \u00a0 | 2022 | 2021 |
As at 1 January | 89.7 | 107.4 |
Interest income | 1.7 | 1.6 |
Pension payments | -2.4 | -10.0 |
Contributions from the employer | 0.3 | 6.7 |
Remeasurement gains/(losses) | \u00a0 | \u00a0 |
- Return on plan assets (excluding amounts included in interest income) | -35.3 | -23.8 |
Exchange rate differences | -2.3 | 7.8 |
As at 31 December | 51.7 | 89.7 |
\nThe return on plan assets (excluding amounts included in interest income) is significantly influenced by the acquired insurance policy in 2021 to fund all the employee benefits in the UK plan. The insurance policy is an exact match of the covered liabilities and is held by the scheme as an asset.
\n\n\nThe investment strategy is based on the composition of the obligations of the pension schemes. Based on Asset Liability Management models analyses have been performed on a regular basis to define the investment portfolio. At year-end the asset allocation was as follows.
\n| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Bonds | 4.8 | 0.4 |
Equities | 2.7 | 8.6 |
Other | 44.2 | 80.7 |
Total assets | 51.7 | 89.7 |
| \u00a0 | 2022 | 2021 |
Discount rate | 4.7% | 2.0% |
Pension growth rate | \u00a0 | 2.8% |
| \u00a0 | Change in assumption | Increase in assumption | Decrease in assumption |
Discount rate | 0.50% | (3.4) | 3.9 |
Pension growth rate | 0.50% | - | - |
\nThe above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. To calculate the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method is applied (calculation of the present value of the defined benefit obligation using the projected unit credit method at the end of the reporting period) which is also used to calculate the pension liability recognized within the consolidated statement of financial position.
\n\n\nThe anticipated contributions to the defined benefit pension plans in the coming year will amount to \u20ac\u00a00.2 million.
\n\n| \u00a0 | 2022 | 2021 |
Deferred tax liabilities | 25.4 | 15.3 |
Deferred tax assets | -27.3 | -13.1 |
As at 1 January | -1.9 | 2.2 |
Tax charge in income statement | 6.2 | -1.8 |
Translation differences foreign group companies | 0.8 | 1.3 |
Tax charge movements in equity | -5.7 | -3.6 |
As at 31 December | -0.6 | -1.9 |
| \u00a0 | \u00a0 | \u00a0 |
Deferred tax liabilities | 30.0 | 25.4 |
Deferred tax assets | -30.6 | -27.3 |
As at 31 December | -0.6 | -1.9 |
| \u00a0 | As at 31-12-2022 | As at 31-12-2021 | ||
| \u00a0 | Deferred tax assets | Deferred tax liabilities | Deferred tax assets | Deferred tax liabilities |
Property, plant, and equipment | -2.0 | 30.7 | -1.3 | 26.6 |
Intangible fixed assets | -5.9 | 15.1 | -5.8 | 13.4 |
Current assets/liabilities | -23.6 | 2.0 | -19.2 | 2.2 |
Tax loss carry forward | -15.0 | \u00a0 | -17.7 | \u00a0 |
Provisions | -2.6 | 0.7 | -2.8 | \u00a0 |
Financial instruments | \u00a0 | \u00a0 | \u00a0 | 2.7 |
| \u00a0 | -49.1 | 48.5 | -46.8 | 44.9 |
Netting | 18.5 | -18.5 | 19.5 | -19.5 |
Total | -30.6 | 30.0 | -27.3 | 25.4 |
\nThe short-term part of deferred tax assets, after write-down and netting with the short-term part of deferred tax liabilities, amounts to \u20ac 5.9 million (2021: \u20ac 5.3 million).
\n| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Total tax loss carry forward | 167.5 | 168.2 |
Tax loss carry forward not qualified as deferred tax asset | -113.3 | -103.0 |
Tax loss carry forward qualified as deferred tax asset | 54.2 | 65.2 |
Average tax rate | 27.7% | 27.1% |
Deferred tax asset | 15.0 | 17.7 |
| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Less than 1 year | \u00a0 | \u00a0 |
Within 5 years | \u00a0 | \u00a0 |
Between 5 and 10 years | \u00a0 | \u00a0 |
10 years or longer | \u00a0 | \u00a0 |
No expiry date | 113.3 | 103.0 |
Tax loss carry forward not qualified as deferred tax asset | 113.3 | 103.0 |
| \u00a0 | 2022 | 2021 |
Property, plant, and equipment | 1.7 | 8.0 |
Intangible fixed assets | 1.0 | -3.2 |
Current assets/liabilities | -3.8 | 1.7 |
Tax loss carry forward | 3.3 | -13.0 |
Provisions | 1.0 | 0.1 |
Exchange rate differences loans | 3.9 | 4.5 |
Financial instruments | -0.9 | 0.6 |
Rate changes | \u00a0 | -0.5 |
Total | 6.2 | -1.8 |
| \u00a0 | Balance sheet value | Effective interest % | Average term in years | |||
| \u00a0 | As at 31-12-2022 | As at 31-12-2021 | As at 31-12-2022 | As at 31-12-2021 | As at 31-12-2022 | As at 31-12-2021 |
Private placement | 276.5 | 259.7 | 2.79 | 2.84 | 4.4 | 5.4 |
Subordinated loan | 99.5 | 99.4 | 1.98 | 1.89 | 5.6 | 6.6 |
Total | 376.0 | 359.1 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Weighted average | \u00a0 | \u00a0 | 2.54 | 2.57 | 4.7 | 5.7 |
\nThe weighted average term has been calculated on the basis of the remaining terms of the individual loans.
\n\n\nRepayments on the above amounts are due within five years (\u20ac 213.2 million) and after five years (\u20ac\u00a0162.8 million).
\n| \u00a0 | Balance sheet value as at 31-12-2022 | Fair value as at 31-12-2022 | Balance sheet value as at 31-12-2021 | Fair value as at 31-12-2021 |
Private placement | 276.5 | 245.2 | 259.7 | 259.1 |
Subordinated loan | 99.5 | 84.7 | 99.4 | 99.8 |
| \u00a0 | Balance sheet value | Effective interest % | ||
| \u00a0 | As at 31-12-2022 | As at 31-12-2021 | As at 31-12-2022 | As at 31-12-2021 |
Owed to credit institutions | 309.7 | 74.7 | 2.86 | 0.73 |
Total | 309.7 | 74.7 | \u00a0 | \u00a0 |
| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Contingent considerations | 14.2 | 15.0 |
Deferred considerations | 1.6 | 1.9 |
Total | 15.8 | 16.9 |
| \u00a0 | As at 31-12-2022 | As at 31-12-2021 |
Accruals and deferred income | 53.8 | 43.8 |
Taxation and social security | 9.3 | 6.6 |
Contingent considerations | 3.5 | \u00a0 |
Pension liabilities | 2.8 | 1.0 |
Derivatives | \u00a0 | 0.6 |
Other financial accruals | 7.1 | 7.6 |
Other payables | 33.9 | 38.2 |
Total | 110.4 | 97.8 |
\nOn 30 June 2021, Corbion acquired certain assets of Granotec Mexico S.A. de C.V., a key player in functional blends for the Mexican bakery and fortification industries. The company is based in Quer\u00e9taro, Mexico, employs around 60 staff, and operates a production facility and an application and development center.
\n\n\nDetails of the purchase consideration, net assets acquired are as follows.
\n| \u00a0 | Granotec Mexico |
Property, plant, and equipment | 0.7 |
Intangible fixed assets | 5.0 |
Inventories | 2.3 |
Identifiable assets minus liabilities | 8.0 |
Cash | 9.3 |
Holdback amounts | 1.8 |
Total consideration | 11.1 |
Goodwill arising on acquisition | 3.1 |
\nGoodwill arose in the acquisition of Granotec Mexico as the consideration paid effectively included amounts in relation to the benefit of expected synergies, revenue growth and future market development. These benefits are not recognized separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets. The goodwill is not expected to be deductible for tax purposes. No adjustments were recognized during 2022 for the business combination.
\n\n\nThe table below shows the pro-forma result of Corbion if the acquisition had been made as at 1\u00a0January 2021.
\n| \u00a0 | Corbion | Pro-forma adjustment full-year effect | Pro forma Corbion |
Net sales | 1,070.8 | 3.7 | 1,074.5 |
Result after taxes | 78.3 | 0.1 | 78.4 |
\nFor the six-month period ended 31 December 2021, the acquisition contributed \u20ac 3.8 million in revenue and \u20ac 1.3 million in loss to Corbion's results.
\n\nOn 11 January 2021, Corbion reached an agreement to sell its Frozen Dough business, classified as held for sale in the 2020 consolidated financial statements.
\n| \u00a0 | Frozen Dough business |
Consideration transferred | \u00a0 |
Payment in cash | 20.4 |
Total consideration | 20.4 |
| \u00a0 | \u00a0 |
Property, plant, and equipment | 6.8 |
Inventories | 0.5 |
Receivables | 2.0 |
Total sold assets | 9.3 |
| \u00a0 | \u00a0 |
Trade payables | 0.7 |
Total sold liabilities | 0.7 |
| \u00a0 | \u00a0 |
Gross result from divestment | 11.8 |
| \u00a0 | \u00a0 |
Consideration received in cash and cash equivalents | 20.4 |
Total consideration received | 20.4 |
\nIn 2022 no acquisitions or disposals were made.
\n\n\nCorbion's activities are exposed to a variety of financial risks including currency, interest rate, commodity, liquidity, capital, and credit risk. The treasury department identifies and manages these risks, except the commodity risk which is managed by procurement. Treasury and procurement operate within a framework of policies and procedures which have been approved by the Board of Management, which has overall responsibility for the Group's Risk Management Framework. The Audit Committee oversees the Group's Risk Management Framework. The treasury and commodity risk policies are reviewed at least on an annual basis to ensure the policies are up to date with respect to relevant risks and changing business environment. Corbion uses derivatives solely for the purpose of hedging exposure mainly to the commodity, currency, and interest rate risks arising from the company's sources of finance and business. The Treasury Committee and Commodity Risk Management Committee meet periodically to review treasury and commodity activities and compliance with both policies. The Treasury Committee resides within the finance discipline and is chaired by the CFO. In the Commodity Risk Management Committee, the procurement and finance disciplines are represented, with executive level involvement of the CEO, CFO, and COO.
\n\nCorbion is active on the international market, which means that it is exposed to risks arising from currency fluctuations, particularly in the US dollar, Brazilian real, Japanese yen, and Thai baht. Foreign currency exchange risk arises from future commercial transactions, recognized assets and liabilities, and net investments in foreign operations.
\n\nCorbion is subject to foreign exchange rate movements in connection with the translation of its foreign subsidiaries' income, assets, and liabilities into euros in the consolidated financial statements.
\n\n\nThe USD-denominated US Private Placement is treated as a net investment hedge to partially mitigate the foreign exchange risk when translating the US net assets. Currency fluctuations particularly in the US dollar can have a material effect on Corbion\u2019s income statement. Corbion has policies in place that monitor these risks and if required, mitigation actions are discussed in the Treasury Committee. Currently, no other translation effects than part of the US net asset values are being hedged.
\n\n\nIntercompany financing is denominated in the functional currency of the entity receiving the funding, hence the currency risk is at Corbion group level. According to our treasury policy, currency risks above the threshold are hedged using foreign exchange forward contracts. No hedge accounting is applied and both gains and losses on the derivatives and the foreign currency gains and losses on the intercompany financing positions are recognized as a net position in the income statement as financial income or financial charge.
\n\nThe currency transaction risk arises in the course of ordinary business activities when a company trades, borrows, or lends in a currency other than its functional currency. During the time interval between anticipation/commitment and actual payment, exchange rates will fluctuate and the company is exposed to a currency risk. Corbion uses forward currency contracts and currency swaps in order to hedge risks arising from purchase and sales deals and/or commitments from current purchase and sales deals. Committed transaction exposures and anticipated transaction exposures with high probability are hedged and included in cash flow hedge accounting. Anticipated transaction exposures with reasonable probability are partially hedged. For practical reasons a threshold is applied per currency and operating company. Group treasury is responsible for monitoring transaction risks and defining the appropriate hedging strategy, which is approved by the Treasury Committee.
\n\nThe following sensitivity shows the impact of movements in exchange rates on the exchange rate hedging instruments in place as at 31 December 2022. A 10% weakening of the euro against the Japanese yen would decrease the hedge reserve (equity) by \u20ac 1.5 million, while the net result would not be impacted. A 10% weakening of the euro against the US dollar would decrease the hedge reserve (equity) by\u00a0\u20ac 1.6 million, while the net result would not be impacted.
\n\nInterest rate risk is the risk that interest paid or received on loans and cash investments will vary over a period of time as a direct consequence of changes in the level of interest rates. With regard to interest rate risk, group treasury has the objective to reduce the sensitivity of financial income and charge in the income statement and resulting cash flows to interest rate fluctuations, by actively managing this risk. To reduce the sensitivity, Corbion prefers variable/ floating interest rates for short-term (< one year) financing instruments (including short-term drawings), while opting for fixed interest rates for long-term (> one year) financing instruments. As to cap the maximum potential P&L volatility at all times, a threshold is defined for the maximum floating exposure. Interest rate swaps and forward interest rate contracts may be used to adjust the nature of the interest rate and currency of long-term financing to fit the desired risk profile. Interest rate hedging by group treasury requires approval from the Treasury Committee.
\n\n\nCorbion's interest rate risk arises primarily from its debt. Corbion has an interest rate policy aimed at reducing volatility in its interest expense. As at 31 December\u00a02022 long-term debt (\u20ac 376.0 million) is financed at fixed rates (2.54% on average) for a period of on average 4.7 years. Drawings under the revolving credit facility\u00a0have a floating interest rate for a period shorter than one year.\u00a0Corbion has two interest rate options in place with a cap of 3% and nominal amount of \u20ac 205 million to limit the interest rate risk on the floating debt. The fair value of these options is zero.
\n\nAssuming a constant mix of variable and fixed interest rate instruments, an interest rate increase by 50 basis points versus the rates on 31 December 2022 with all other variables held constant, would have a negative impact on the net result of \u20ac 1.6 million and no impact on the equity.
\n\nCommodity risk is the risk of unfavorable changes in commodity prices that may lead to losses in Corbion\u2019s profit and loss statement and that can lead to fluctuations in the statement of cash flows. The Commodity Risk Committee establishes the overall risk tolerance framework for Corbion and ensures that the commodity price risk associated with Corbion's business margins is identified, considered, and managed. The main responsibilities of the Commodity Risk Committee are to monitor the price risk exposure of selected commodities (e.g. sugar, corn, wheat, soybean oil, and energy) and key chemicals, to define methodologies, procedures, and systems to control the risks, to select appropriate risk management tools, and to monitor execution of the commodity risk policy by procurement.
\n\n\nCorbion uses commodity derivative contracts to reduce the risk of price fluctuations in the main commodities used, including natural gas and sugar.
\n\n\nCorbion entered into commodity derivative contracts to hedge the variable price risk of the main commodities used. The fair value of these contracts amounted to an asset of \u20ac 3.2 million as at 31 December 2022 (31 December 2021: asset of \u20ac 11.2 million). Hedge accounting is applied for the major part of these commodity derivative contracts. More information can be found in the section on hedge transactions.
\n\nIf the market price of the involved commodities would increase by 10%, the related derivative contracts for which no hedge accounting is applied would impact the profit & loss by \u20ac 0.3 million.
\n\nLiquidity risk is the risk of Corbion not being able to obtain sufficient financial means to meet its obligations in time. Liquidity risk management is the most important pillar for the group treasury function of Corbion and therefore the treasury policy defines the active management of the liquidity risk as the primary objective of group treasury, so that at all times the company is able to meet its financial obligations of the whole group in the short and long term. Liquidity risk is managed by ensuring sufficient liquidity capacity through (incoming) cash and cash equivalents and the availability of committed borrowing capacity as well as a solid financial risk profile. Corbion manages liquidity risk by means of cash-flow projections for the short term (daily), medium term (quarterly review for running year) and long term (up to 5 years, bi-annual review).
\n\n\nIn 2022, Corbion\u00a0signed a new 5-year syndicated Revolving Credit Facility (RCF). The new RCF\u00a0replaced the company\u2019s existing RCF, providing liquidity for general corporate purposes and giving Corbion flexibility to fund further business growth. The facility has a 5-year initial termination date extending the maturity to 2027, and provides two additional 1-year extension options. The interest margin grid remains unchanged compared to the previous RCF. The committed credit facilities at Corbion\u2019s long-term disposal amounted to \u20ac 450 million as at 31\u00a0December 2022.
\n\n\nCorbion also has a private placement of $ 295 million and a subordinated private placement of \u20ac 100 million with American institutional investors.
\n\n\nTo provide insight into the liquidity risk the table below shows the contractual terms of the financial obligations (converted at balance sheet date), including interest paid.
\n\n\nThe table below analyzes Corbion\u2019s financial obligations which will be settled on a net basis, according to relevant expiration dates, based on the remaining period from the balance sheet date to the contractual expiration date. The amounts shown are contractual non-discounted cash flows.
\n| \u00a0 | Less than 1 year | Between 1 and 5 years | More than 5 years | Total |
As at 31 December 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Private placement | 8.5 | 221.5 | 85.7 | 315.7 |
Subordinated loan | 2.0 | 23.6 | 84.8 | 110.4 |
Owed to credit institutions | 313.2 | \u00a0 | \u00a0 | 313.2 |
Lease liabilities | 17.4 | 41.1 | 29.9 | 88.4 |
Contingent considerations | 4.3 | 24.7 | \u00a0 | 29.0 |
Trade payables | 148.3 | \u00a0 | \u00a0 | 148.3 |
Other non-interest-bearing current liabilities | 106.9 | \u00a0 | \u00a0 | 106.9 |
Total | 600.6 | 310.9 | 200.4 | 1,111.9 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
As at 31 December 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Private placement | 8.0 | 137.7 | 158.9 | 304.6 |
Subordinated loan | 2.0 | 23.9 | 87.4 | 113.3 |
Owed to credit institutions | 75.1 | \u00a0 | \u00a0 | 75.1 |
Lease liabilities | 15.7 | 36.0 | 31.9 | 83.6 |
Contingent considerations | 3.0 | 19.8 | \u00a0 | 22.8 |
Trade payables | 128.0 | \u00a0 | \u00a0 | 128.0 |
Other non-interest-bearing current liabilities | 97.8 | \u00a0 | \u00a0 | 97.8 |
Total | 329.6 | 217.4 | 278.2 | 825.2 |
\nCredit risk refers to the losses that would be recognized if a customer or a counterparty to a financial instrument fails to meet its contractual obligations. In respect of disbursed loans, other receivables, and cash and cash equivalents the maximum credit risk equals the book value. In respect of derivatives it equals the fair value.
\n\n\nGiven the credit rating that it requires of its partners Corbion has no reason to assume that they will not honor their contractual obligations. Based on today's insights, the actual credit risk is limited.
\n\nCorporate finance, which is the process of optimizing the capital structure and capital allocation of the group, is an important pillar of the group treasury function within Corbion, as it is closely linked to the management of the liquidity risk. A prudent corporate finance policy and approach aims to maintain sufficient access to liquidity and supports a solid financial risk profile. Corbion\u2019s size, geographical presence in different financial markets, financial strength, consolidated cash flow generation, and public share listing gives access to multiple financing instruments. Group treasury is responsible for managing the optimized overall capital structure of the group, which is set by the Treasury Committee, using multiple financing sources (e.g. debt, mezzanine or equity instruments), both at a group level and at an operating company level. Group treasury is responsible for defining the funding requirements and funding strategy of the group, which is reviewed and approved annually by the Treasury Committee.
\n\n\nThe capital structure of Corbion consists of net debt (borrowings as detailed in Note 23) offset by cash and cash equivalents (as detailed in Note 17).
\n| \u00a0 | 2022 | 2021 |
Private placement | 276.5 | 259.7 |
Revolving credit facility | 309.7 | 74.7 |
Subordinated loan | 99.5 | 99.4 |
Lease commitments | 73.5 | 69.4 |
Total financial liabilities part of net debt | 759.2 | 503.2 |
Cash and cash equivalents | -58.2 | -42.2 |
Net debt | 701.0 | 461.0 |
-/- Subordinated loan | -99.5 | -99.4 |
Covenant net debt for covenant ratio calculation | 601.5 | 361.6 |
| \u00a0 | Private placement | Revolving credit facility | Subordinated loan | Leases | Total |
As at 1 January 2022 | 259.7 | 74.7 | 99.4 | 69.4 | 503.2 |
Financing cash flows | \u00a0 | 236.0 | \u00a0 | \u00a0 | 236.0 |
Repayments | \u00a0 | \u00a0 | \u00a0 | -14.1 | -14.1 |
New lease commitments | \u00a0 | \u00a0 | \u00a0 | 14.0 | 14.0 |
Exchange rate differences | 16.8 | \u00a0 | \u00a0 | 4.2 | 21.0 |
Other | \u00a0 | -1.0 | 0.1 | \u00a0 | -0.9 |
As at 31 December 2022 | 276.5 | 309.7 | 99.5 | 73.5 | 759.2 |
\nThe Corbion Treasury Committee reviews the capital structure of Corbion on a quarterly basis. As part of this review, the committee considers the cost of capital and the risks associated with each class of capital.
\n\n\nThe main covenants for the revolving credit facility and the US private placement are:
\n\nThe ratio of covenant net debt position divided by covenant EBITDA (Earnings Before Interest, Taxes, Depreciation, Amortization, and impairment of (in)tangible fixed assets, excluding adjustments, increased by cash dividend of joint ventures received and annualization effect of newly acquired and/or divested subsidiaries) may not exceed the factor 3.75.
\n\n\nA minimum interest cover (covenant EBITDA divided by net interest income and charges) of 3.5.
\n\n\nThese external conditions were met in 2022 as well as in 2021.\u00a0Corbion targets a Covenant net debt/ EBITDA ratio below 2.9x in 2023 and between 1.5x and 2.5x from 2024 onwards.
\n| \u00a0 | 2022 | 2021 |
Covenant net debt position/covenant EBITDA | 3.0 | 2.6 |
Interest cover | 14.2 | 14.6 |
\nCorbion is using financial derivatives to control the risks related to fluctuations in foreign currencies, commodities, and interest rates. Only when there is an underlying exposure Corbion will enter into financial derivatives.\u00a0Hedging instruments need to be approved by the Treasury Committee and hedge accounting is applied where appropriate.
\n\nCorbion measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:
\n\nLevel 1: Fair value measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities.
\n\n\nLevel 2: Fair value measurements based on inputs other than Level 1 quoted prices that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
\n\n\nLevel 3: Fair value measurements based on valuation techniques that include inputs for the asset or liability that are based on observable market data (unobservable inputs).
\n\n31 December 2022 | Level 1 | Level 2 | Level 3 | Total |
Derivatives | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u2022 Foreign exchange contracts | \u00a0 | 0.5 | \u00a0 | 0.5 |
\u2022 Commodity swaps/collars | \u00a0 | 3.2 | \u00a0 | 3.2 |
Financial fixed assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u2022 Loans, receivables, and other | \u00a0 | 96.3 | \u00a0 | 96.3 |
Interest bearing liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u2022 Private placement | \u00a0 | -245.2 | \u00a0 | -245.2 |
\u2022 Subordinated loan | \u00a0 | -84.7 | \u00a0 | -84.7 |
Other (non-)current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u2022 Contingent and deferred considerations | \u00a0 | \u00a0 | -19.3 | -19.3 |
Total | \u00a0 | -229.9 | -19.3 | -249.2 |
31 December 2022 | Balance sheet value | Fair value |
Financial fixed assets | \u00a0 | \u00a0 |
\u2022 Loans, receivables, and other | 99.4 | 96.3 |
| \u00a0 | \u00a0 | \u00a0 |
Receivables | \u00a0 | \u00a0 |
\u2022 Trade receivables | 210.5 | 210.5 |
\u2022 Other receivables | 30.2 | 30.2 |
\u2022 Prepayments and accrued income | 12.0 | 12.0 |
| \u00a0 | \u00a0 | \u00a0 |
Cash | \u00a0 | \u00a0 |
\u2022 Cash other | 58.2 | 58.2 |
| \u00a0 | \u00a0 | \u00a0 |
Borrowings | \u00a0 | \u00a0 |
\u2022 Private placement | -276.5 | -245.2 |
\u2022 Owed to credit institutions | -309.7 | -309.7 |
\u2022 Subordinated loan | -99.5 | -84.7 |
| \u00a0 | \u00a0 | \u00a0 |
Other non-current liabilities | \u00a0 | \u00a0 |
\u2022 Contingent and deferred considerations | -15.8 | -15.8 |
| \u00a0 | \u00a0 | \u00a0 |
Non-interest-bearing liabilities | \u00a0 | \u00a0 |
\u2022 Trade payables | -148.3 | -148.3 |
\u2022 Other payables | -106.9 | -106.9 |
| \u00a0 | \u00a0 | \u00a0 |
Other current liabilities | \u00a0 | \u00a0 |
\u2022 Contingent and deferred considerations | -3.5 | -3.5 |
| \u00a0 | \u00a0 | \u00a0 |
Derivatives | \u00a0 | \u00a0 |
\u2022 Foreign exchange contracts | 0.5 | 0.5 |
\u2022 Commodity swaps/collars | 3.2 | 3.2 |
| \u00a0 | \u00a0 | \u00a0 |
Total | -546.2 | -503.2 |
\nFair values are determined as follows:
\n\nAs there is no market quotations for the financial fixed assets, the fair value\u00a0 is determined by discounting the future cash flows at the yield curve applicable as at 31 December.
\n\n\nThe fair value of receivables equals the book value because of their short-term character.
\n\n\nCash and cash equivalents are measured at nominal value which, given the short-term and risk-free character, corresponds to the fair value.
\n\n\nMarket quotations are used to determine the fair value of debt owed to private parties, credit institutions, and other debts. As there are no market quotations for most of the loans the fair value of short- and long-term loans is determined by discounting the future cash flows at the yield curve applicable as at 31 December.
\n\n\nGiven the short-term character, the fair value of non-interest-bearing liabilities equals the book value.
\n\n\nContingent and deferred considerations are measured on the basis of the present value of the current expected future cash flows.
\n\n\nCurrency and interest rate derivatives are measured on the basis of the present value of future cash flows over the remaining term of the contracts, using the bank interest rate (such as Euribor) as at the reporting date for the remaining term of the contracts. The present value in foreign currencies is converted using the exchange rate applicable as at the reporting date.
\n\n\nCommodity derivatives are measured on the basis of the present value of future cash flows, using market quotations or own variable market price estimations of the involved commodity as at the reporting date.
\n\n\nThe amount of \u20ac 2.8 million in hedge reserve (see Note 19) relates to the hedging of risks arising from future purchase and sales deals and/or commitments from current purchase and sales contracts amounting to \u20ac 55.5 million. \u00a0
\n\n\nThe amount of \u20ac 24.2 million in translation reserve (see Note 19) relates to currency fluctuations in respect of the net investments in foreign operations less the currency fluctuations of the corresponding net investment hedges. In case of divestment of a net investment in a foreign operation, the corresponding net impact of the currency fluctuations is moved from the translation reserve to the income statement.
\n\n\nIn the past year no cash flow hedges were terminated early due to changes to the expected future transaction. No ineffective parts were recorded in respect of the net investment hedge and cash flow hedge.
\n| \u00a0 | Short < 1 year | Long > 1 year | ||
| \u00a0 | As at 31-12-2022 | As at 31-12-2021 | As at 31-12-2022 | As at 31-12-2021 |
Derivatives receivables/(liabilities) used as hedge instrument in cash flow hedge relations: | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Foreign exchange contracts | 0.5 | -0.8 | \u00a0 | \u00a0 |
Commodity swaps | 4.4 | 10.1 | \u00a0 | 0.8 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Derivatives receivables/(liabilities) used as hedge instrument in fair value hedge relations: | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Commodity swaps | -0.8 | -0.2 | \u00a0 | \u00a0 |
Total derivatives in hedge relations | 4.1 | 9.1 | \u00a0 | 0.8 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Derivatives receivables/(liabilities) not used in a hedge relation with value change through income statement: | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Commodity swaps | -0.4 | 0.4 | \u00a0 | 0.1 |
Total derivatives through income statement | -0.4 | 0.4 | \u00a0 | 0.1 |
Total derivatives | 3.7 | 9.5 | \u00a0 | 0.9 |
\nFor more information on the remuneration policy see the Remuneration report. For more information on share-based payments see Note 29.
\n| \u00a0 | Granted in | At target number outstanding as at 31-12-2022 | Maximum number outstanding as at 31-12-2022 | Year of vesting |
O. Rigaud | 2020 | 22,260 | 33,390 | 2023 |
| \u00a0 | 2021 | 14,722 | 22,083 | 2024 |
| \u00a0 | 2022 | 23,323 | 34,985 | 2025 |
| \u00a0 | 2022 | 1,487 | 1,487 | 2023 |
E. van Rhede van der Kloot | 2020 | 13,491 | 20,237 | 2023 |
| \u00a0 | 2021 | 8,854 | 13,281 | 2024 |
| \u00a0 | 2022 | 12,237 | 18,356 | 2025 |
| \u00a0 | 2022 | 780 | 780 | 2023 |
Total as at 31 December 2022 | \u00a0 | 97,154 | 144,599 | \u00a0 |
| \u00a0 | Maximum number outstanding as at 31-12-2021 | Maximum number granted in 2022 | Vested 2022 | Expired 2022 | Maximum number outstanding as at 31-12-2022 |
O. Rigaud | 89,730 | 36,472 | 19,755 | 14,502 | 91,945 |
E. van Rhede van der Kloot | 53,508 | 19,136 | 11,553 | 8,437 | 52,654 |
T. de Ruiter | 13,277 | \u00a0 | 7,126 | 6,151 | \u00a0 |
Total | 156,515 | 55,608 | 38,434 | 29,090 | 144,599 |
| \u00a0 | IAS 24.17 category | Short-term employee benefits | Share-based payments | Post-employment benefits | Other long-term benefits | Termination benefits | Total | |
Thousands of euros | 2022 | Base salary1 | STIP | LTIP | Pension benefits | Other benefits | Termination benefits | \u00a0 |
O. Rigaud | 860 | 516 | 832 | \u00a0 | \u00a0 | \u00a0 | 2,208 | |
E. van Rhede van der Kloot | 583 | 271 | 487 | \u00a0 | \u00a0 | \u00a0 | 1,341 | |
Total Board of Management | 1,443 | 787 | 1,319 | \u00a0 | \u00a0 | \u00a0 | 3,549 |
| \u00a0 | IAS 24.17 category | Short-term employee benefits | Share-based payments | Post-employment benefits | Other long-term benefits | Termination benefits | Total | |
Thousands of euros | 2021 | Base salary1 | STIP | LTIP | Pension benefits | Other benefits | Termination benefits | \u00a0 |
O. Rigaud | \u00a0 | 779 | 496 | 542 | \u00a0 | \u00a0 | \u00a0 | 1,817 |
E. van Rhede van der Kloot | \u00a0 | 572 | 299 | 391 | \u00a0 | \u00a0 | \u00a0 | 1,262 |
Total Board of Management | 1,351 | 795 | 933 | \u00a0 | \u00a0 | \u00a0 | 3,079 |
\nThe tables above show the costs based on the applicable IFRS standard and do not necessarily reflect the actual amounts paid.
\n\nThe table below specifies the remuneration of the Executive Committee (ExCo), comprising the Board of Management members as listed above and the additional ExCo members who are not part of the Board of Management.
\nThousands of euros | 2022 | 2021 |
Short-term employee benefits | 5,810 | 5,402 |
Share-based payments | 2,305 | 2,211 |
Post-employment benefits | 19 | 15 |
Other long-term benefits | \u00a0 | \u00a0 |
Termination benefits 1 | \u00a0 | \u00a0 |
| \u00a0 | IAS 24.17 category | Short-term employee benefits1 | Share-based payments | Post-employment benefits | Other long-term benefits | Termination benefits | Total | |
Thousands of euros | Year | Base fee | Committee fee | LTIP | Pension benefits | Other benefits | Termination benefits | \u00a0 |
Mathieu Vrijsen, Chair (Chair Appointment & Governance Committee / member Remuneration Committee / member Science and Technology Committee) | 2022 | 70 | 23 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 93 |
2021 | 70 | 23 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 93 | |
Ilona Haaijer, Vice-Chair since 18 May 2022 (Chair Remuneration Committee since 18 May 2022 / member Appointment and Governance Committee since 18 May 2022 / member Audit Committee until 18 May 2022 / member Science and Technology Committee) | 2022 | 56 | 21 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 77 |
| \u00a0 | 2021 | 50 | 17 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 67 |
Rudy Markham, Vice-Chair (Chair Remuneration Committee / member Appointment and Governance Committee) until 18 May 2022 | 2022 | 23 | 6 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 29 |
2021 | 60 | 16 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 76 | |
Liz Doherty (Chair Audit Committee / member Sustainability and Safety Committee) | 2022 | 50 | 22 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 72 |
2021 | 50 | 15 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 65 | |
William Lin (Chair Sustainability and Safety Committee / member Audit Committee) since 18 May 2022 | 2022 | 31 | 12 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 43 |
Dessi Temperley (member Audit Committee / member Sustainability and Safety Committee) | 2022 | 50 | 17 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 67 |
| \u00a0 | 2021 | 31 | 6 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 37 |
Steen Riisgaard (Chair Science and Technology Committee / member Remuneration Committee / member Appointment and Governance Committee) | 2022 | 50 | 23 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 73 |
2021 | 50 | 23 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 73 | |
Jack de Kreij (Chair Audit Committee) until 19 May 2021 | 2021 | 19 | 6 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 25 |
| \u00a0 | Total 2022 | 330 | 124 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 454 |
| \u00a0 | Total 2021 | 330 | 106 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 436 |
\nNo loans or advance payments or any guarantees to that effect have been made or issued to the members of the Supervisory Board. None of the members of the Supervisory Board have shares in the company or any option rights relating thereto.
\n| \u00a0 | Transaction values for the year ended | Balance outstanding at year-end | ||
| \u00a0 | 2022 | 2021 | 2022 | 2021 |
Sales | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Joint ventures | 77.7 | 85.3 | 8.4 | 13.7 |
Purchases | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Joint ventures | 7.8 | 8.7 | 0.9 | 2.3 |
Others | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Joint ventures | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
- Dividend | \u00a0 | \u00a0 | \u00a0 | 6.6 |
- Loans | \u00a0 | \u00a0 | 64.6 | 60.7 |
\nCorbion has an outstanding loan granted to the joint venture TotalEnergies Corbion bv of \u20ac 64.6 million with an interest rate of 7.17% and a remaining term of 7 years.
\n\n\nA share plan is in place for the Board of Management. The (former) members of the Board of Management have a total of 144,599 unvested share rights in the company as at 31\u00a0December 2022 (2021: 156,515). The nominal amount of the shares which are claimable under unvested share rights equals \u20ac\u00a036,150 per that date.
\n\n\nThe share grant program was introduced in 2020 as part of the new remuneration policy adopted by the annual General Meeting of Shareholders (AGM) on 29 June 2020, measuring performance over a period of three calendar years. Each year members of the Board of Management are entitled to a conditional grant of Corbion shares. There are two target levels for this incentive: one applies to the CEO and one to the CFO. The CEO is entitled to a conditional share grant value of 120% of base salary. The CFO is entitled to a conditional share grant value of 100% of base salary. The total number of conditionally granted shares is determined by dividing the at target amount applicable for the respective Board member (as a percentage of base salary) by the share price. The share price is defined as the average closing price of the Corbion share during the last full calendar quarter preceding the conditional grant of shares.
\n\n\nAt the beginning of the three-year performance period, targets for the LTIP are set by the Supervisory Board as follows.
\nThe TSR performance is benchmarked against the TSR performance of Corbion\u2019s TSR peer group and the relative ranking determines the actual payout for 30% of the LTIP.
\n\n\nA target based on organic sales growth, a threshold (minimum) and a range around the performance target to determine the actual payout for 25% of the LTIP.
\n\n\nA target based on adjusted EBITDA, a threshold (minimum) and a range around the performance target to determine the actual payout for 20% of the LTIP.
\n\n\nA target based on return on capital employed (ROCE), a threshold (minimum) and a range around the performance target to determine the actual payout for 12.5% of the LTIP.
\n\n\nA target based on return on sustainability goals, a threshold (minimum) and a range around the performance target to determine the actual payout for 12.5% of the LTIP.
\n\n\nPrior to each conditional grant the Supervisory Board sets a target level for the performance measures, i.e. organic net sales growth, adjusted EBITDA, ROCE, and sustainability. A threshold\u00a0performance level is determined below which no pay-out is granted and a maximum performance level where maximum pay-out is reached.
\n\nFor share grants before 2020 a different program is in place. This program was introduced in 2015, as part of the remuneration policy adopted by the AGM on 22 May 2015, measuring performance over a period of three calendar years. The LTIP targets are the following: 60% is determined by EBITDA, 20% by Earnings Per Share (EPS), and 20% of the LTIP depends on relative TSR as compared to a specific TSR peer group.
\n\n\nThere are two target levels for this incentive: one applies to the CEO and one to the CFO. The CEO is entitled to a conditional share grant value of 100% of base salary. The CFO is entitled to a conditional share grant value of 80% of base salary. The total number of conditionally granted shares is determined by dividing the at target amount applicable for the respective Board member (as a percentage of base salary) by the share price. The share price is defined as the average closing price of the Corbion share during the last full calendar quarter preceding the conditional grant of shares.
\n\n\nAt the beginning of the three-year performance period, targets for the LTIP were set by the Supervisory Board as follows.
\n\nA target based on EBITDA, a threshold (minimum) and a range around the performance target to determine the actual payout for 60% of the LTIP.
\n\n\nA target based on EPS, a threshold (minimum) and a range around the performance target to determine the actual payout for 20% of the LTIP.
\n\n\nThe TSR performance is benchmarked against the TSR performance of Corbion\u2019s TSR peer group and the relative ranking determines the actual payout for another 20% of the LTIP.
\n\n\nMeeting the performance target(s) results in an LTIP payout at target level. A range of 50% around the performance target(s) (or lower as determined by the Supervisory Board) is set for the EBITDA and EPS performance to determine the actual payout. There is no payout below the low end of the range and no additional upside above the top end of the range. For the TSR performance, threshold payout is set at meeting the eighth position in the peer group. Target payout is achieved at the fourth and fifth position in the peer group and maximum payout is achieved at reaching the first and second position in the peer group.
\nYear of allocation | Total as at 31-12-2021 | Allocated in 2022 | Vested and expired in 2022 | Total as at 31-12-2022 |
2019 | 62,786 | \u00a0 | 62,786 | \u00a0 |
2020 | 53,627 | \u00a0 | \u00a0 | 53,627 |
2021 | 40,102 | \u00a0 | 4,738 | 35,364 |
2022 | \u00a0 | 55,608 | \u00a0 | 55,608 |
Total | 156,515 | 55,608 | 67,524 | 144,599 |
\nThe fair value of the non-market-based components of the above-mentioned performance-related shares allocated in 2022 was \u20ac 31.84 per share (2021: \u20ac 47.54). The fair value of the market-based components of the above-mentioned performance-related shares allocated in 2022 was \u20ac 38.79 per share (2021: \u20ac 57.06). The fair value of the market-based components is estimated by using the Black & Scholes model and the assumptions set forth below.
\n| \u00a0 | 2022 | 2021 |
Risk-free interest rate | 0.42% | 0.00% |
Expected dividend gains | \u00a0 | \u00a0 |
Expected volatility in share price | 31% | 29% |
Term | 3 years | 3 years |
\nAn equity-settled plan similar to the program for the Board of Management is in place for senior management.
\nYear of allocation | Total as at 31-12-2021 | Allocated in 2022 | Vested and expired in 2022 | Total as at 31-12-2022 |
2019 | 108,247 | \u00a0 | 108,247 | \u00a0 |
2020 | 123,185 | \u00a0 | 4,399 | 118,786 |
2021 | 122,266 | \u00a0 | 24,198 | 98,068 |
2022 | \u00a0 | 171,082 | \u00a0 | 171,082 |
Total | 353,698 | 171,082 | 136,844 | 387,936 |
\nThe CFO has 6,019 outstanding shares related to commitment awards. These shares were granted before he was appointed as CFO and are held in a separate blocked account until the end of his employment at Corbion.
\n\n\nThe capital expenditure commitments not yet incurred amounted to \u20ac 35.4 million for (in)tangible fixed assets as at 31 December 2022 (2021: \u20ac 50.7 million).
\n\nThird-party guarantees amounted to \u20ac 5.4 million as at 31 December 2022 (2021: \u20ac\u00a03.5 million). No significant future losses are expected from these guarantees.
\n\n\nNo significant events occurred between the end of the reporting period and the date that the\u00a0financial statements were authorized for issue that would affect the ability of users to make\u00a0proper evaluations and decisions.
\n\n