alf-2022-12-31-en

About Alfen

___

Company profile

Alfen operates at the heart of the energy transition providing smart energy solutions to enable the electricity

grid of the future: reliable, sustainable and innovative. We have a unique combination of activities as we

design, engineer, develop, produce and service smart grids, energy storage systems, and electric vehicle

charging equipment. We combine our activities in integrated solutions to address the electricity challenges of

our clients.

We build on our vast experience of 85 years in the energy industry. We have a market leading position in the

Netherlands and are on track for fast international growth benefitting from our first mover advantage.

We are headquartered in Almere, the Netherlands, where we reside in four buildings with associated

production facilities. In addition we are present in 12 other European countries: Austria, Belgium, Finland,

France, Germany, Italy, Norway, Poland, Spain, Sweden, Switzerland and the United Kingdom and serve the rest

of Europe through our partners and resellers.

Our growing business


Smart grid solutions	EV charging equipment	Energy storage systems
Since 1937	Since 2008	Since 2011
Solutions: Alfen offers an in-house developed, produced and assembled range of secondary transformer substations for grid operators. Alfen supplies microgrids (incl. substations) and supplementary offerings to grid connect amongst others PV farms, EV fast-charging hubs and industrial companies. What makes it smart? Alfen offers in- house developed and produced devices for grid automation and a proprietary back-end system for remote management and control of electricity grids. Markets: Focus on Benelux, Finland & Sweden.	Solutions: Alfen offers an in-house developed and produced range of smart and connected electric vehicle (EV) chargers for use at destinations such as home, retail, workplace and public locations in the range of 3 – 22kW. Alfen is a pure B2B player. What makes it smart? Alfen has a proprietary online management platform for our charging infrastructure and offer standardized solutions for smart charging, load balancing, charging hubs and Plug&Charge functionality. Markets: Europe with local sales presence in 13 countries and products installed in 30+ countries.	Solutions: We offer an in-house developed and produced range of stationary and mobile battery energy storage solutions. Our systems are used for applications such as load balancing, peak shaving, grid frequency control and energy trading. What makes it smart? Our proprietary developed embedded software and back-office enables remote monitoring and control and supports all major storage applications. Markets: Europe with products installed in 12 countries.



	Integrated solutions
	Besides offering smart products and services for all three business lines, we also offer integrated solutions across our business lines where we can seamlessly combine and integrate our products and services. This is increasingly needed to address the growing complexity of the energy challenges emerging from the energy transition.

4Alfen - Annual Report 2022

5Alfen - Annual Report 2022

6Alfen - Annual Report 2022

Business review

___

Growing in a turbulent world

Early 2022, many of the Covid-19 restrictions were

still enforced by governments around Europe. In

February, after a massive vaccination campaign that

had started in 2021, many societies and economies

finally unlocked and reinstated normal daily life. This

boosted demand for mobility solutions. Many

businesses and municipalities started to catch-up on

their roll-out plans for EV charging infrastructure to

meet the demands from drivers who purchased an EV

during Covid, albeit with limited use during lockdown.

In general, the economy started to recover and has

been growing strongly in 2022. Our markets continue

to be less and less effected by the pandemic.

While the impact of the pandemic was decreasing,

the impact of the invasion of Ukraine was building up.

The war that began in February has not ended yet.

While the Ukraine is where the military battle is

taking place, the entire globe is feeling geopolitical

and supply chain impact. The invasion disrupted

several supply chains, most notably energy.

Disruptions in the supply of fossil fuels triggered a

global energy crisis. Gas and electricity prices rose to

unprecedented heights resulting in high inflation

figures. Climate change and the need for

decarbonization pushed the energy transition mostly

until the Russian invasion, but now the energy

security benefits of clean energy also gained ground

among European and national policymakers.

Evolving regulation and policies

The European Commission released the REPowerEU

plan in May 2022 that proposes ending Europe’s

dependence on fossil fuel imports from Russia by

2027. The plan sets the ambition to increase the

share of renewables in final energy consumption to

45% by 2030, exceeding the 40% previously under

negotiation. The European Parliament, Commission

and Council of the EU reached consensus on the

proposed overhaul of the bloc’s carbon market in

December. The deal cements a future scarcity of

emission allowances, which will elevate carbon prices

for Europe’s power and industrial sectors.

Also individual Member States passed or proposed

action plans to raise ambitions in the energy

transition with further policy support to address non-

financial challenges. For instance, Germany increased

its renewable electricity targets, introduced higher

auction volumes and improved remuneration for

distributed PV while reducing permitting timelines.

Spain streamlined permitting for solar PV and wind

plants, and increased grid capacity for new renewable

energy projects.

The 27th United Nations Climate Change Conference

of Parties (COP27) elevated the concerns of the

developing world to manage adaptation to climate

change and establish a finance facility for loss and

damage. COP27 also brought a further shift from

pledges to implementation with concrete projects,

along with calls for greater accountability from

governments and corporations.

Favourable market developments for

all our business lines

Throughout 2022, our markets continued to develop

favourably as the energy transition gained more

momentum across Europe.

EV Charging

The European market for EV charge points has a long-

term growth trend with a CAGR of 25-30% from

2020-2030 (source: Guidehouse). This long-term

growth trend was also visible in 2022 with the

number of Battery Electric Vehicles being registered

in Europe increasing with ~29% in Europe versus

2021. However, the number of Plugin Hybrid Electric

Vehicles (PHEV) decreased by ~3% over the same

period. In general, national governments started to

shift subsidies mostly towards BEVs, while the PHEVs

subsidies diminished.

Alfen demonstrated enormous growth in EV charging

in 2022. Growth figures in the first three quarters of

2022 were close to tripling in revenue year-on-year.

7Alfen - Annual Report 2022

The market grew exceptionally due to a peak in

demand after Covid measures were released and

some of our customers built inventory given the

supply chain pressures. Alfen was well positioned to

benefit from this market growth with our reliable and

innovative EV charging equipment that covers all

segments in destination charging (home, workplace,

retail and public). We are present across Europe and

we can ramp up production capacity fast.

Alfen benefitted from increasing volumes in

framework agreements set-up over the past years,

new client wins and further internationalisation. Our

internationalisation strategy continued to deliver

growth across Europe with approximately 70% of our

2022 EV charging revenues generated outside of the

Netherlands.

We continued to diversify our customer base. Select

commercial successes are strengthening our

partnership with E-On Drive resulting in several new

projects in the up-and-coming EV market in Central

and Eastern Europe and winning a supplier contract

for our full Alfen portfolio with TotalEnergies across

Europe until January 2025. With Equance, we won

the public charging infrastructure tender in

Amsterdam with our Alfen Twin with new ISO15118

charging functionalities.

Smart Grids Solutions

Markets for our Smart Grid Solutions business line

keep growing and it is becoming increasingly clear

what the impact on the grid will be as more electricity

is consumed and produced. On the demand side,

more electricity is needed to power EVs, heat and

electric cooking as well as to electrify businesses that

are decarbonising business processes. On the supply

side, we need to grid connect decentralized

generation such as solar and wind power.

Dutch grid operators progressively discuss the grid

limitations and need to expand and reinforce it. The

three biggest grid operators in the Netherlands

(Alliander, Enexis and Stedin) are expected to invest

30 billion euro to expand and strengthen the Dutch

grid until 2030. This calls for expanding equity for the

grid operators. In November, the Dutch government

shared a framework agreement with the parliament,

in which the Dutch state can inject capital and

become a shareholder. The urgency to meet the goals

from the Dutch Climate Agreement is high, even more

so given the energy crisis.

The agreement is under approval with Supervisory

Boards, Workers’ Councils and shareholders of the

grid operators. The first application will take place at

Stedin. The Dutch government announced to have

reserved funds for a capital injection of 500 million

euro into Stedin last September.

At the same time, Dutch grid operators are stepping

up to strengthen and expand the grid. Alfen is well

positioned to benefit from this ongoing electrification

with our grid knowledge and expertise. We started to

deliver the first Pacto25 and Pacto30 substations for

the new Alliander Framework agreement. We also

won the tender with Enexis with our transformer

covers (for which the patent-process is pending).

With the Altro1, we introduced the first Alfen built

walk-in substation. The market received this new

product well and we expanded the number of moulds

to produce these walk-in substations to meet

demand.

Additionally, we remain focused on providing smart

grid solutions to customers with significant private

grids, such as solar parks and rooftop solar locations,

greenhouses, EV fast charging stations and industrial

locations. We see specific momentum in the EV fast

charging stations market. These chargers are now not

only installed near highways, but also at large

supermarkets and DIY stores. Also the market for

renewables continues to grow. We earned significant

wins at Pfalzsolar, Bejulo and HVC among others. We

grid connected almost 300 MWp capacity of solar

panels (~20% growth versus 2021), despite supply

chain pressures from delayed delivery of

components.

Energy storage systems

Our Energy Storage Systems business line has been

hampered the most by Covid-19. The uncertain

economic circumstances caused several investors to

postpone decisions to financially close a project in

this nascent market.

We started to see momentum in the market return in

late 2021, resulting in an increased qualified lead

pipeline. In 2022, we saw this pipeline convert into

backlog and a step-up in revenues in Q3 and Q4. The

total revenue for Energy Storage is ~2.5 times our

2021 revenue. The increase in revenue comes from

both TheBattery Elements and TheBattery Mobile.

Our TheBattery Elements has more projects in the

execution phase and the average size of projects is

increasing. Market momentum remains strong and

our backlog continues to grow in a healthy manner

due to new contract wins.

Also the regulatory environment continues to

develop favourably in Europe with for instance

measures to shorten the permitting cycle for energy

storage systems. Another positive development is

that double taxation of battery energy storage

systems (i.e. at the time of recharging and at feed-

into the grid) no longer applies in the Netherlands

since 1 January 2022. The United Kingdom did the

same and introduced a clear framework for grid

stabilisation services. Belgium allowed energy storage

to bid into the capacity market and Germany provides

a subsidy for batteries in combination with solar

fields. Although the regulatory environment is

improving, there is more ground to win. For instance,

in the Netherlands The Electricity Act 1998 prohibits

grid operators (both regional operators and the

national grid operator) from owning, developing,

managing and operating energy storage facilities,

while this can be a viable solution to manage grid

congestion.

In 2022, Alfen entered a new phase in our ESS

business by commissioning its first newly developed

TheBattery Elements project. We are now well

positioned to realise bigger grid scale projects and we

earned our first project above 50 MWh. In 2022 we

continued to win new contracts that will support

2023 revenue, among others with Semperpower,

Greener and EPV.

Navigating through supply chain

challenges

Due to the rapidly recovering economy after

Covid-19, demand has grown strongly for metals such

as aluminium, copper and steel, but also for electrical

components. This has put pressure on global supply

chains.

Throughout the year this pressure remained high and

introduced challenges to secure deliveries of

components and materials to our factories and our

contract manufacturers. Moreover, it is not only a

matter of securing components, but also a logistical

challenge.

The global supply chain challenges affect Alfen

directly through its own supply chain and indirectly,

for example, through the EV supply chain. Until now,

Alfen has effectively managed these challenges.

Above all we prioritise delivery to our customers. We

focus on pro-active planning with our customers to

continue to optimally support them in their business

models. Alfen expects that the supply chain pressures

remain in 2023. Therefore, Alfen continues to deploy

its measures to maximise grip on the supply chain and

secure supplies: (1) Frequent meetings of an

integrated team (purchasing, R&D, sales and

operations) to make purchasing and logistical

decisions, under direct supervision of Alfen’s Board,

(2) engagement with Alfen’s tier 2 and tier 3

suppliers, next to tier 1 suppliers and (3) strategic

down payments to safeguard strategic stock levels for

batteries, inverters, containers and electrical

components.

Continuing to deliver our profitable

growth strategy

In 2022 we maintained relentless focus on the

execution of our strategy of profitable growth. We

achieved an average revenue growth >40% since our

IPO in 2018 and achieved an EBITDA margin in the

range of 15-20% (18% to be exact). This made us

achieve two of our financial objectives as set at the

time of our IPO in 2018.

8Alfen - Annual Report 2022

We continued to further build out our presence

across Europe. We opened physical offices in

Germany and France. We strengthened our

international teams and continued to deliver

international revenue growth. The international

growth is a result of the internationalisation of our

own organisation as well as the internationalisation

of our customers. In 2022, our revenues generated

outside of the Netherlands reached 51% which made

us realise our third IPO financial objective.

Our rapid growth throughout Europe is mostly driven

by the expansion of our EV charging business line and

Energy Storage Systems. As such, we kept expanding

our service network for our charge points and

significantly strengthened our coverage to support

our customers even better with agreements with

partners like Diebold Nixdorf in multiple European

countries.

In order to support further growth, we continued to

invest in our organisation. We significantly expanded

our R&D teams in order to drive our innovation

roadmap. We also expanded our production facilities

for EV charging, and we received the building permit

for an additional production facility in Almere that

will contain offices, warehousing and production.

Our profitable growth model is based on growing our

revenue quicker than our cost base. With our 76%

revenue growth in 2022 versus 38% growth in OPEX

we once again further leveraged our cost base.

Contributing to sustainability

Alfen has a business model that directly contributes

to a sustainable economy and society. We are at the

heart of the energy transition as we continue to

enable the generation, distribution and consumption

of emission-free electricity with our smart grids, EV

charging equipment and energy storage systems. This

link with sustainability is reflected in our vision: “to

build a connected, smart and sustainable energy

system for future generations”. And our mission: “to

boost the energy transition by engineering,

manufacturing, integrating and connecting high

quality energy solutions that are innovative, reliable

and smart”.

Next to the positive impact of its business activities,

Alfen sees running the business in a sustainable

manner as a moral duty.

We renewed our CSR framework in 2019 and we

started reporting our impact since 2020. In 2022, we

potentially avoided up to 3.8 Mtons of CO2e

equivalent emissions as our installed charge points

power EVs and avoid harmful emissions. This is a

strong increase compared to the 2.2 Mtons of CO2e

we potentially avoided by 2021 demonstrating how

we continue to make impact with our EV charging

solutions. Moreover, we enabled the supply of

renewable energy to around 283,000 households

(cumulatively) by connecting solar PV farms to the

public grid through our Smart grid solutions, which is

significantly more compared to the 206,000

households in the previous year.

We are committed to continuing to further improve

our sustainability performance as we transition

towards a truly sustainable society for future

generations. As such, we will work out the

implications of the new Corporate Sustainability

Reporting Directive (CSR-D) for Alfen in 2023. We plan

to set specific sustainability targets of our own

business activities, for instance science-based and in

line with global warming limitation targets. We aim to

communicate this early 2024.

To provide more details and transparency of our

sustainability activities, we included a section in this

Annual Report called ‘Performance on broader range

of ESG topics’. This section is structured largely along

the hierarchy introduced by CSR-D and will be further

expanded in next year’s reporting.

Creating long-term shareholder value

We operate at the heart of the energy transition with

our smart energy solutions. The energy transition is a

long-term megatrend and with our strong market

position we are convinced that we can deliver value

over the long term for our Shareholders. In this

context, we believe that value is generated by both

our financial and non-financial business performance.

Financially, we set the following four medium-term

objectives at the time of the IPO in March 2018, to

drive shareholder value: (i) grow our topline with an

average 40% a year, (ii) increase our adjusted EBITDA

margins to mid to high teens, (iii) reduce CAPEX to

under 3% of revenues, and (iv) realise more than 50%

of revenues outside the Netherlands.

To realise our objectives, we have put in place a long-

term growth strategy that consists of four elements.

First, we aim to benefit from strong market growth

trends and to further grow our market share. Second,

we internationalise with a focus on Europe, further

strengthening our position in existing countries and

entering new countries. Third, we expand our existing

service & maintenance offering and benefit from an

increasing installed base. Finally, we have the

ambition to increase cross-selling across Alfen’s three

business lines and offer integrated solutions.

Non-financially, we have put in place a CSR

framework which was established jointly with key

stakeholders of Alfen such as employees, customers,

Shareholders and suppliers. Moreover, we have a

Sustainable Development Policy in place.

In September, the Alfen share has been included in

the STOXX Europe 600 Index. Inclusion in the index is

based on Alfen’s free-float adjusted market

capitalisation and liquidity. We are proud to be

included in this index. The profitable growth model

we have executed upon since our IPO in 2018 has led

us to this milestone. We are confident that inclusion

in this index will further increase shareholder interest

in our stock.

Investing in growth and innovations

We continued to invest in our organisation to prepare

for anticipated business growth. As such, our

organisation has grown from 683 FTE at 31 December

2021 to 893 FTE at 31 December 2022. Despite a

challenging labour market, we were able to attract

over 200 new colleagues benefitting from our

growing brand across Europe, the interest in the

energy transition that increasingly gains momentum,

and our in-house education program.

We further strengthened our organisation as for

example we hired more international sales people to

further drive our internationalisation, we added

production personnel to increase our production

capacity and we expanded our R&D department to

work on new innovations. Furthermore, we enhanced

our staff departments.

In terms of production, we invested in semi-

automating production lines for EV charging to

increase our capacity. We have introduced a new

production concept for these semi-automated

assembly lines, reducing takt times and improving

efficiency. We automated a number of steps on the

production lines, including the testing cells on the

line, the packaging of chargers into boxes and

palletising the boxes.

Furthermore, to be ready for future growth, we

received the building permit for a new production

facility that is located next to our other buildings in

Almere. The premisses consists of 33,000m2 and is

three times as large as our current largest building.

The new building will accommodate new production

space, warehousing and offices. The new building is

planned to be completed early 2024. We also kept

investing in our IT landscape, both in infrastructure

and in our applications.

Additionally, we continued to invest in innovations

which led to new technologies, features and

products. For instance, in EV charging, Alfen

implemented the ISO 15118 standard end-to-end,

which provides more extensive communication

between our chargepoints and EVs and can for

instance allow an EV to identify itself without the

need for a charge card. This is also the required

technology for implementing vehicle-to-grid in the

future. Alfen also further developed the Mobile App

MyEve: an app that can connect directly with our

chargers. In first instance for the installer (in use

currently) and later also for the user to directly

connect with the charger to manage, configure and

get insights.

In our Smart grids business line we introduced an

innovative cover for the high voltage transformer

covers (CANO). The protection cover prevents severe

accidents from happening by protecting service

operators from accidentally touching the HV parts of

a transformer. We will sell this product as an

9Alfen - Annual Report 2022

accessory in our product range. Also we have brought

a special substation to the market for DC high

performance chargers with a low voltage rack that is

optimised for function and cost to this specific use

case of the substation.

Finally, selected innovations of our Energy storage

business include development of an energy and

power management function (EMS/PMS) that allows

TheBattery to optimise the energy usage of local

grids, such as locations with solar PV or with limited

grid connections. Also we developed an application

that enables the support of 60Hz grids with our

Mobile energy storage solutions. This to support

locations that run on 60Hz, such as offshore and

maritime locations.

Such innovations for the future allows us to remain

the partner of choice for our customers.

Welcoming Jeanine van der Vlist to

our Supervisory Board

In November, we welcomed Jeanine van der Vlist as

new member to our Supervisory Board. The

Supervisory Board extended its board with a 4th

member in order to anticipate on future growth and

further internationalisation of the company. Ms. Van

der Vlist brings relevant Supervisory Board experience

from her current positions as non-executive board

member at the Belgium company DPG Media Group

and at the Dutch company BDR Thermea Group

(smart thermal solutions). In the past, Ms. Van der

Vlist held several senior executive management

positions at a multitude of international companies,

like Fujitsu, Dell, Nokia/Alcatel-Lucent and Eurofiber

Group. With these positions, she accumulated

relevant experience in the field of internationally

growing companies as well as digitalisation.

Furthermore, she gained specific experience with the

energy transition and electricity grids, having served

Essent (Dutch utility) as Managing Director B2B.

Outlook

We expect the markets for all our business lines will

continue to develop favourably, driven by the energy

transition. We are convinced that we are well

positioned to benefit from this market growth and to

continue to grow our business rapidly as we continue

to execute our strategy.

Additionally, we anticipate supply chain pressures to

continue into 2023. As such, we will keep managing

our supply chain closely and continue to monitor the

situation carefully. Also in 2023, our priority remains

continuous delivery to our customers.

As we anticipate further growth of our business in

2023, we plan to further invest in our organisation,

our people, facilities, production and new

innovations. Like 2022, we expect our capital

investments to exceed depreciation and amortisation.

We also anticipate a further increase in the number

of personnel. In terms of financing, we increased our

working capital facility from EUR 30 million to EUR

100 million and our bank guarantee facility from EUR

10 million to EUR 40 million.

Growing together with our partners

We aim to be a powerful forward-thinking leader in

developing, producing and connecting the key

elements of our future electricity grid. We leverage

our vast knowledge and experience in the distribution

and storage of electrical energy to provide smart, safe

and sustainable products and solutions, working as a

reliable and adaptive partner.

As we develop, design and produce all our products

and systems in-house, we can accommodate

maximum flexibility and very rapid time-to-market of

new innovations. We look forward to continuing to

grow together with our customers, partners and

employees as we accelerate the rapidly evolving

energy transition.

Board of Directors

Marco Roeleveld (CEO),

Jeroen van Rossen (CFO),

Michelle Lesh (CCO)

10Alfen - Annual Report 2022

2022 month-by-month

___


3 February	Alfen supplies mobile battery storage to accelerate Bredenoord’s path to sustainability

Bredenoord, an international company that develops, supplies, maintains and operates mobile energy systems

worldwide, has selected Alfen to supply multiple mobile energy storage systems. With the purchase of the

Alfen batteries, Bredenoord is expanding its existing energy storage fleet in order to meet its customers'

growing demand to reduce emissions.


26 April	Alfen and its partners complete solar park with trading hub for up to 22 mobile energy storage systems

With its trusted partners, Alfen has built an innovative project for solar park De Dijken in the province of North

Holland, the Netherlands. The park houses 30,000 bifacial solar panels with a total capacity of 13.5MW, enough

to power 4,200 households. The park is unique: its solar energy can be stored in the adjacent trading hub of 22

mobile Alfen batteries from its partner Greener, so both the available energy and the grid infrastructure can be

used more efficiently.


27 May	Alfen chooses Diebold Nixdorf as its preferred Field Services Provider for its European EV charging infrastructure

Alfen announces a multi-year framework agreement with its new partner Diebold Nixdorf, a world leader in

enabling connected commerce. As a preferred partner, Diebold Nixdorf will provide field services for Alfen’s

charging equipment across its expanding electric vehicle charging infrastructure throughout Europe. Diebold

Nixdorf is the ideal international partner to help Alfen meet the fast-growing demand for its smart, robust and

high-tech charging stations and improve availability for electric vehicle drivers.


31 May	Alfen builds 12MW energy storage system with black start functionality for Finnish wind farm

Alfen is building Finland’s third largest electrical energy storage facility for EPV Energy's Teuva wind farm. When

completed in spring 2023, the facility will support EPV Energy's renewable electricity strategy and enable

several innovative applications like black start functionality. The facility will have 12MW of power and 12MWh

of energy capacity.


30 Augustus	Alfen Partners with Ellevio to Deliver Sweden's Largest Grid-Scale Battery

Swedish energy company Ellevio is expanding its scope to help industries and businesses become fossil-free

through electrification. Its first project - Sweden’s largest grid-scale battery – includes Alfen’s 10MW modular

energy storage system TheBattery Elements™ which enables optimal use of renewable energy and stability in

the power grid.


13 December	Alfen celebrates 15 years of innovation in Belgium

15 years ago, Alfen entered the Belgian market as we took our first steps in internationalisation. In 2007, we

entered the market initially with our transformer substations because of the technical commonalities with the

Dutch market. Through the years, we expanded our presence with more products, including our EV charging

equipment in 2013 and our energy storage systems in 2016. Today Alfen is a household name in the field of EV

charging and industrial battery storage projects in Belgium, and we are a thought leader at the heart of the

energy transition focused on limiting climate change.

11Alfen - Annual Report 2022

Financial

performance

___

Alfen is operating internationally in the heart of the

energy transition, being a specialist in energy

solutions for the future. With over 85 years history,

Alfen has a unique combination of activities. Alfen

designs, engineers, develops, produces and services

Smart grid solutions, Energy storage systems and EV

chargers and combines these in integrated solutions

to address the electricity challenges of its clients. As

there is a strong interrelationship between Alfen’s

different business activities, management reviews the

profitability of the Company on an aggregate level.

All financial segment information can be found in the

consolidated financial statements.

Revenue and other income

Revenue and other income increased by 76% from

€249.7 million in 2021 to €439.9 million in 2022,

driven by growth across all business lines, but with a

very strong growth in the EV charging equipment

business line. Alfen continued to drive its strategy and

benefitted from market growth, further

internationalisation, cross-selling and service.

Revenue and other income

(in EUR million)

12Alfen - Annual Report 2022

In the EV charging equipment business line, 2022

revenues were €251.8 million, a 143% growth

compared with €103.8 million in 2021. Across Europe,

Alfen has seen positive market developments for

electric driving. At one hand because the number of

EVs on the road is growing. ~29% more Battery

Electric Vehicles were registered in 2022 compared to

2021. Car manufacturers also increasingly have

committed to electrification of their portfolios and

are rapidly increasing and diversifying EV supply in

the market. At the other hand stimulants continue to

be in place such as financial incentives, but also

regulatory stimulants to support the transition to

electric driving. Alfen benefitted from increasing

volumes under framework agreements that have

been set-up over the past years, new client wins and

further internationalisation.

In the Smart grid solutions business line, 2022

revenues were €142.6 million, a 11% growth

compared with €128.2 million in 2021. Markets for

our Smart Grid Solutions business line keep growing

and it is becoming increasingly clear what the impact

on the grid will be as more electricity is consumed

and produced. On the demand side, more electricity

is needed to power EVs, heat and electric cooking as

well as to electrify businesses that are decarbonising

business processes. On the supply side, we need to

grid connect decentralized generation such as solar

and wind power.

Grid operators continued to expand and reinforce the

distribution grid for the energy transition. Alfen

continued to benefit through existing framework

agreements with the grid operators. The private

networks business did not show as much growth in

2022; project execution took longer under the supply

chain conditions in 2022.

In the Energy storage systems business line, 2022

revenues were €45.5 million, a 157% growth

compared with €17.7 million in 2021. The battery

energy storage market picked up momentum after

COVID-19 headwinds. With markets being less

affected, momentum in the energy storage market

continued to develop favourably, mostly driven by

the growth of renewables and the need to balance

electricity demand and supply.

In 2022, the backlog that Alfen has communicated

about at the start of the year has come through in our

revenue figures. The increase in revenues comes from

both TheBattery Elements and TheBattery Mobile.

For TheBattery Elements, Alfen has more projects in

the execution phase and the average size of projects

is increasing.

Alfen entered a new phase in our ESS business by

commissioning its first newly developed TheBattery

Elements project. We are now well positioned to

realise bigger grid scale projects. We earned our first

project above 50 MWh.

Gross margin, EBITDA and net profit

(loss)

Gross margin was 34.9% in 2022 compared with

36.0% in 2021. Alfen was able to leverage its growing

scale and strong market position to dampen the

effect of challenges in the global supply chain.

EBITDA increased by 115% from €36.2 million in

financial year 2021 to €77.9 million in financial year

2022. The EBITDA margin improvement is driven by

operational leverage.

Depreciation and amortisation charges increased

from €8.5 million in 2021 to €10.2 million in 2022 and

is mainly caused by increased amortisation in

alignment with prior years capitalisation of

development costs.

Finance income and costs in financial year 2022 are in

line with previous year.

The effective tax rate for the financial year 2022 is

with 20.6% lower than the standard Dutch tax rate of

25.8%. This is primarily driven by the impact of the

innovation box facility.

As a consequence, the net profit of €21.5 million in

the financial year 2021 grew with 147% to €53.0

million in the financial year 2022.

In the financial year 2021, Alfen incurred one-off

costs and special items of €0.6 million related to

share-based payment expenses associated with the

Long-Term Incentive Plans. EBITDA adjustments in

financial year 2022 amounted to €1.5 million and

comprised of Alfen's 85 Years Anniversary and share-

based payment expenses associated with the Long-

Term Incentive Plans (see Note 11).

Adjusted EBITDA

(in EUR million)

The following summary reconciles EBITDA and net

profit with the adjusted EBITDA and adjusted net

profit:


(in EUR '000)	2022	2021
EBITDA	77,904	36,204
Alfen's 85 Years Anniversary	471	—
Share-based payment expenses	995	641
Adjusted EBITDA	79,370	36,845

Net profit / (loss)	53,047	21,450
Aggregated one-off costs and special items after tax	1,346	641
Adjusted Net profit / (loss)	54,393	22,091

Adjusted EBITDA amounted to €79.4 million, an

increase of 115% versus €36.8 million in financial year

2021. Adjusted for one-off costs and special items

after tax, adjusted net profit amounted to €54.4

million (versus €22.1 million in financial year 2021).

13Alfen - Annual Report 2022

Finance and investments

Net cash position at 31 December 2022 amounted to

€4.4 million, compared to a net cash position of €28.9

million at 31 December 2021. The decrease in the net

cash position is the result of an increase of working

capital which is mainly related to our increased stock

levels. Given the supply chain challenges we maintain

higher safety stock levels, further supported by

strategic stock down payments for batteries,

inverters, containers and electrical components

(presented under Trade and other receivables) in

order to safeguard and enhance resilience in our

global supply chain.

In October 2022, Alfen increased its existing working

capital facility of €30 million and bank guarantee

facility of €10 million to a new revolving credit facility

("RCF") of €100 million and a bank guarantee facility

of €40 million to align our financing structure with the

growth and the increased sizing of the company.

Under this new facility the previous minimal EBITDA-

covenant has been replaced for a Net Debt-to-EBITDA

Ratio that shall not exceed 3.00:1.00. This covenant

was met given our net cash position at 31 December

2022.

The solvency ratio (equity divided by total assets) is

46.9% at 31 December 2022 compared to 49.6% at

31 December 2021.

Capital expenditure amounts to €21.0 million (or 4.8%

of revenues) compared to €11.7 million (or 4.7% of

revenues) in 2021. Capex includes investments in new

moulds for our EV Charging and Smart grids business

lines, followed by product line automation for EV

Charging, ongoing investments in IT-infrastructure

and Data Security as well as investments in additional

solar panels for our buildings. Alfen capitalised €9.6

million of development costs (2021: €7.7 million)

which demonstrates the company’s continued efforts

to invest in innovations for the future.

14Alfen - Annual Report 2022

15Alfen - Annual Report 2022

EU Taxonomy

___

Alfen operates at the heart of the energy transition

providing smart energy solutions to enable the

electricity grid of the future: reliable, sustainable and

innovative. We have a unique combination of

activities as we design, engineer, develop, produce

and service smart grids, energy storage systems, and

electric vehicle charging equipment. We combine our

activities in integrated solutions to address the

electricity challenges of our clients. As such, Alfen’s

vision is a connected, smart and sustainable energy

system for future generations.

In accordance with the Regulation (EU) 2020/852 of

the European Parliament and of the Council of 18

June 2020 on the establishment of a framework to

facilitate sustainable investment, we applied the

reporting requirements for financial year 2022 and

disclose our Taxonomy-eligible, Taxonomy-aligned

and non-eligible economic activities relating to the

climate change mitigation and climate change

adaptation environmental objectives.

In the coming years the EU Taxonomy regulation and

the requirements for non-financial undertakings will

continue to change. A requirement to report

eligibility and alignment under the remaining four

environmental objectives of the Green Deal will be

added for future reporting periods. Alfen will keep

monitoring the developments in order to report in

line with the requirements.


EU Taxonomy KPI's - Summary	Revenue	CAPEX	OPEX
Taxonomy-Eligible and Aligned Activities (%)	99.2%	79.5%	100.0%
Taxonomy-Eligible but not aligned Activities (%)	—%	—%	—%
Taxonomy-Non-Eligible Activities (%)	0.8%	20.5%	—%
Total	100%	100%	100%

The Taxonomy Non-Eligible Revenue stated in the

table are solely related to our activities in Belgium

concerning the delivery of concrete cabinets, which

are used to create a transformer substation for

electric power distribution.

16Alfen - Annual Report 2022

Assessment of compliance with

Regulation (EU) 2020/852

In preparing this disclosure, the Management Board

has interpreted, integrated and contextualised the EU

Taxonomy regulation with the specific activities

carried out by the Company in its three business lines:

Smart grid solutions, EV charging equipment and

Energy storage systems.

The paragraphs below provides a summary of the

eligible- and of the aligned-activities of Alfen. The

Taxonomy-aligned activities all make a substantial

contribution to the climate change mitigation

environmental objective, comply with the “Do No

Significant Harm” criteria and the minimum social

safeguards.

Eligibility and Alignment Assessment

of our Smart Grid Solutions and EV

Charging equipment business lines

The Company considers that both its Smart Grid

Solutions and EV Charging business line are eligible

under economic activity:

Transmission and distribution of electricity

According to the EU Taxonomy regulation this

economy activity comprise either:

•The construction and operation of transmission

systems that transport the electricity on the extra

high-voltage and high-voltage interconnected

system; or

•The construction and operation of distribution

systems that transport electricity on high-voltage,

medium-voltage and low-voltage distribution

systems.

Our Smart Grid and EV Charging solutions, being

medium and/or low-voltage solutions, are an

extension of the grid and allow electricity to be

transported on distribution systems. As such we

conclude these activities are eligible under activity 4.9

Transmission and distribution of electricity.

Substantial contribution and Do No

Significant Harm

Transmission and distribution of electricity

Alfen’s Smart Grid Solutions business line makes a

substantial contribution to climate change mitigation

as the Company delivers its products to customers in

Europe for use in the interconnected European

system. In addition and in case substations are used

by our customers in an off-grid environment the

substantial contribution is still met as all our

transformers comply with the Tier 2 requirements.

Alfen’s EV charging equipment business line supports

the electric infrastructure for the electrification of

transport, either inside and outside the European

Union.

The Do No Significant Harm criteria for both our

Smart Grid Solutions and EV Charging business line

are assessed at production site and product level.

Project location is not assessed for do not significant

harm as the Company does not have control on these

project locations. The latter always falls under the

responsibility of the customer. In addition, the

products are considered movable products that, upon

discretion of our customers, can be directed to

another project location without substantial costs.

Climate change adaption: The Climate Risk and

Vulnerability Assessments performed provided

insights into the most important identified physical

climate risks that are material for the activity;

adaptation solutions have been implemented.

Transition to circular economy: Alfen has a waste

management plan in place relating to the packaging

materials, which is the only material waste that the

Company itself has from its own activities. There is no

legal requirement at the moment for Alfen to take

back the product at the end-of-life. Noted is that

smart grid solutions are sometimes refurbished by

the Company on request of the customer and that

the first EV charging equipment that the Company

sold has not reached the end-of-life yet.

Pollution prevention and control: Alfen does not use

the chemical compound polyclorinated biphenyls

(PCBs) in its own process, nor do the components

that it purchases from suppliers include PCBs.

Protection and restoration of biodiversity and

ecosystems: Alfen has an Environmental Impact

Assessment or screening in place for its own

locations. In case use of the products at a specific

client location requires an Environmental Impact

Assessment, this is the responsibility of the customer

(as documented in the contracts) and outside the

control of Alfen.

Based on the aforementioned elaboration on the

individual “Do No Significant Harm” criteria, the

Company concludes that the eligible activities related

to its Smart Grid Solutions and EV Charging business

line are also considered Taxonomy-aligned activities.

Eligibility and Alignment Assessment

of our Energy Storage Systems

business line

The Company considers that its Energy Storage

business line is eligible under the following economic

activity:

Storage of electricity

According to the EU Taxonomy regulation this

economic activity comprises of:

•The construction and operation of facilities that

store electricity and return it at a later time in

the form of electricity.

Our Energy Storage Solutions, being either TheBattery

Mobile or TheBattery Elements, are directly

facilitating the storage of electricity and the

possibility to return it at a later time. As such, the

description of economic activity is considered met.

Substantial contribution and Do No

Significant Harm

Storage of electricity

Alfen’s activities make a substantial contribution to

climate change mitigation as the Company assembles

and delivers energy storage systems.

The Do No Significant Harm criteria is similar to

economic activity: “Transmission and distribution of

electricity" only assessed at production site and

product level. Project location level is not assessed as

the Company does not have control over these

project locations.

The latter always falls under the responsibility of the

customer given the fact that TheBattery Mobile is

never installed by the Company and are also,

together with TheBattery Elements, considered

movable products that, upon discretion of our

customers, can be directed to another project

location.

Climate change adaptation: The Climate Risk and

Vulnerability Assessments performed shows that the

most important identified physical climate risks that

are material for the activity are the same as for

economic activity "Transmission and distribution of

electricity".

Sustainable use and protection of water and marine

resources: In relation to Water and Marine resources

it is noted that Alfen does not perform any activities

in the surrounding of pumped hydro activities.

Transition to circular economy: As already mentioned

at economic activity: “Transmission and distribution

of electricity”, Alfen has a waste management plan in

place.

For batteries, the Company is not required to take

back the product at the end-of-life, except for those

that it imported itself in the European Union. Alfen

has the following in place to ensure reuse or

recycling:

•The Company is connected to / has a license

with STiBat, a prominent Foundation within The

Netherlands that provides guidelines and

solutions to collect, reuse, maintain, refurbish or

recycle batteries and accumulators.

•The Company is already working together with a

company in The Netherlands certified to collect,

reuse, maintain, refurbish or recycle batteries.

Protection and restoration of biodiversity and

ecosystems: The Environmental Impact Assessment

or screening is performed similar to economic

activity: “Transmission and distribution of electricity”.

Based on the aforementioned elaboration on the

individual “Do No Significant Harm” criteria, the

Company concludes that the eligible activities related

to its Energy Storage business line are also considered

Taxonomy-aligned activities.

17Alfen - Annual Report 2022

Summary of EU Taxonomy related

accounting policies and contextual

information

KPI related accounting policies

The metrics for taxonomy-aligned economic activities

were calculated as follows:


Revenue	Proportion of revenue from eligible and aligned activities (numerator) of total revenue (denominator). Total revenue equals the total revenue in financial year 2022 from continuing operations as disclosed in note 8.
CapEx	Proportion of CAPEX relating to assets and/or processes that are associated with Taxonomy-eligible-and- aligned economic activities (numerator) of total CapEx (denominator). Total CAPEX equals the additions in financial year 2022 to property, plant and equipment and additions to right-of-use assets as disclosed in note 16 and additions to intangible assets and goodwill as disclosed in note 17. Any depreciation, amortisation, re-measurements, fair value changes and additions for leases that do not lead to the recognition of a right-of-use asset are not part of the CAPEX.
OpEx	Proportion of OPEX relating to assets and/or processes that are associated with Taxonomy-eligible-and-aligned economic activities (numerator) of total direct non-capitalised costs that relate to research and development, building renovation measures, short-term lease, maintenance and repair, and any other direct expenditures relating to the day-to-day servicing of assets of property, plant and equipment by Alfen or third parties to whom activities are outsourced that are necessary to ensure the continued and effective functioning of such assets (denominator).

The financial information for calculating the metrics

was gathered from Alfen’s accounting system and

exclude intercompany transactions.

The economic activities identified currently

contribute to one environmental objective being

climate change mitigations, but would they

contribute to several environmental objectives than

the numerator would only take into account the

allocation of revenues and expenditures to one

environmental objective so that double counting is

avoided.

KPI related contextual information

EU Taxonomy Revenue

The breakdown by business line was as follows:


In EUR '000	2022
Smart grid solutions	139,132
EV charging equipment	251,761
Energy storage systems	45,498
Total Taxonomy-aligned revenue	436,391

The revenues related to Taxonomy-aligned activities

pursued for Alfen’s own internal consumption was nil.

EU Taxonomy CapEx

The majority of our CapEx is directly contributing -

e.g. new moulds for Smart grids - or will be directly

contributing in the near future - e.g. capitalised

development - to our business lines. However, also

investments were made in IT-infrastructure and Data

Security as well as General Staff related CAPEX, which

are both labelled as head office costs and are

therefore not directly contributing to one of our three

business lines. Hence, these are not considered

eligible and aligned.

The breakdown by type of CapEx was as follows:


In EUR '000	2022
Additions to property, plant and equipment - owned	8,487
Additions to property, plant and equipment - right-of-use assets	1,380
Additions to intangible assets and goodwill	9,568
Total Taxonomy-aligned CapEx	19,435

EU Taxonomy OpEx

All of our OpEx is directly contributing or will be

directly contributing in the near future to our three

business lines and are hence considered eligible and

aligned.

The breakdown by type of OpEx was as follows:


In EUR '000	2022
Non-capitalised research & development costs	6,797
Maintenance and repair costs	790
Costs related to day-to-day servicing of assets	437
Total Taxonomy-aligned Opex	8,024

The expenditures relating to the day-to-day servicing

of assets solely relate to cleaning costs.

18Alfen - Annual Report 2022

EU Taxonomy KPI disclosure tables

The KPI tables included on the next three pages

summarise the outcome of Alfen’s assessment of its

Revenue, Capital Expenditure (CapEx) and operating

expenditure (OpEx). None of the capital and

operating expenditures relate to a so-called CapEx

plan for allowing Taxonomy-eligible economic

activities to become Taxonomy-aligned.

The Company does not have any issued

environmentally sustainable bonds or debt securities

with the purpose of financing specific identified

Taxonomy-aligned activities.

Comparatives figures on Taxonomy-aligned economic

activities are not disclosed as such reporting over

financial year 2021 was not required.

EU Taxonomy Revenue

In EUR '000

SUBSTANTIAL CONTRIBUTION CRITERIA

DNSH CRITERIA

(Does Not Significant Harm)

Economic activities (1)

Code(s) (2)

Absolute

turnover

(3)

Proportion

turnover

(4)

Climate

change

mitigation

(5)

Climate

change

adaptation

(6)

Water

and

marine

resources

(7)

Circular

economy

(8)

Pollution

(9)

Bio-

diversity

and eco-

systems

(10)

Climate

change

mitigation

(11)

Climate

change

adaptation

(12)

Water

and

marine

resources

(13)

Circular

economy

(14)

Pollution

(15)

Bio-

diversity

and eco-

systems

(16)

Minimum

safeguards

(17)

Taxonomy

-aligned

proportion

turnover,

year N (18)

Taxonomy

-aligned

proportion

turnover,

year N-1

(19)

Category

(enabling

activity or)

(20)

Category

‘(trans-

itional

activity)’

(21)

Currency

Y/N

A. TAXONOMY-ELIGIBLE ACTIVITIES

A.1. Environmentally sustainable activities (Taxonomy-aligned)

Smart grid solutions

4.9 - Transmission and distribution of electricity

139,132

31.7%

100%

N/A

31.7%

N/A

EV charging equipment

4.9 - Transmission and distribution of electricity

251,761

57.2%

100%

N/A

57.2%

N/A

Energy storage systems

4.10 - Storage of electricity

45,498

10.3%

100%

N/A

10.3%

N/A

Turnover of environmentally sustainable activities

(Taxonomy-aligned) (A.1)

436,391

99.2%

A.2 Taxonomy-Eligible but not environmentally sustainable activities

(not Taxonomy-aligned activities)

—

—%

Turnover of Taxonomy-eligible but not environmentally sustainable

activities (not Taxonomy-aligned activities) (A.2)

—

—%

Total (A.1 + A.2)

436,391

99.2%

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES

Turnover of Taxonomy-non-eligible activities (B)

3,485

0.8%

Total (A + B)

439,876

100%

19Alfen - Annual Report 2022

EU Taxonomy CapEx

In EUR '000

SUBSTANTIAL CONTRIBUTION CRITERIA

DNSH CRITERIA

(Does Not Significant Harm)

Economic activities (1)

Code(s) (2)

Absolute

CapEx (3)

Proportion

of CapEx

(4)

Climate

change

mitigation

(5)

Climate

change

adaptation

(6)

Water

and

marine

resources

(7)

Circular

economy

(8)

Pollution

(9)

Bio-

diversity

and eco-

systems

(10)

Climate

change

mitigation

(11)

Climate

change

adaptation

(12)

Water

and

marine

resources

(13)

Circular

economy

(14)

Pollution

(15)

Bio-

diversity

and eco-

systems

(16)

Minimum

safeguards

(17)

Taxonomy

-aligned

proportion

of CapEx,

year N (18)

Taxonomy

-aligned

proportion

of CapEx,

year N-1

(19)

Category

(enabling

activity or)

(20)

Category

‘(trans-

itional

activity)’

(21)

Currency

Y/N

A. TAXONOMY-ELIGIBLE ACTIVITIES

A.1. Environmentally sustainable activities (Taxonomy-aligned)

Smart grid solutions

4.9 - Transmission and distribution of electricity

4,416

18.0%

100%

N/A

18.0%

N/A

EV charging equipment

4.9 - Transmission and distribution of electricity

11,705

47.9%

100%

N/A

47.9%

N/A

Energy storage systems

4.10 - Storage of electricity

3,314

13.6%

100%

N/A

13.6%

N/A

CapEx of environmentally sustainable activities

(Taxonomy-aligned) (A.1)

19,435

79.5%

A.2 Taxonomy-Eligible but not environmentally sustainable activities

(not Taxonomy-aligned activities)

—

—%

CapEx of Taxonomy-eligible but not environmentally sustainable activities

(not Taxonomy-aligned activities) (A.2)

—

—%

Total (A.1 + A.2)

19,435

79.5%

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES

CapEx of Taxonomy-non-eligible activities (B)

5,009

20.5%

Total (A + B)

24,444

100%

EU Taxonomy OpEx

In EUR '000

SUBSTANTIAL CONTRIBUTION CRITERIA

DNSH CRITERIA

(Does Not Significant Harm)

Economic activities (1)

Code(s) (2)

Absolute

OpEx (3)

Proportion

of OpEx (4)

Climate

change

mitigation

(5)

Climate

change

adaptation

(6)

Water

and

marine

resources

(7)

Circular

economy

(8)

Pollution

(9)

Bio-

diversity

and eco-

systems

(10)

Climate

change

mitigation

(11)

Climate

change

adaptation

(12)

Water

and

marine

resources

(13)

Circular

economy

(14)

Pollution

(15)

Bio-

diversity

and eco-

systems

(16)

Minimum

safeguards

(17)

Taxonomy

-aligned

proportion

of OpEx,

year N (18)

Taxonomy

-aligned

proportion

of OpEx,

year N-1

(19)

Category

(enabling

activity or)

(20)

Category

‘(trans-

itional

activity)’

(21)

Currency

Y/N

A. TAXONOMY-ELIGIBLE ACTIVITIES

A.1. Environmentally sustainable activities (Taxonomy-aligned)

Smart grid solutions

4.9 - Transmission and distribution of electricity

1,593

19.8%

100%

N/A

19.8%

N/A

EV charging equipment

4.9 - Transmission and distribution of electricity

4,196

52.3%

100%

N/A

52.3%

N/A

Energy storage systems

4.10 - Storage of electricity

2,235

27.9%

100%

N/A

27.9%

N/A

OpEx of environmentally sustainable activities

(Taxonomy-aligned) (A.1)

8,024

100.0%

100%

A.2 Taxonomy-Eligible but not environmentally sustainable activities

(not Taxonomy-aligned activities)

—

—%

OpEx of Taxonomy-eligible but not environmentally sustainable activities

(not Taxonomy-aligned activities) (A.2)

—

—%

Total (A.1 + A.2)

8,024

100.0%

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES

OpEx of Taxonomy-non-eligible activities (B)

—

—%

Total (A + B)

8,024

100%

20Alfen - Annual Report 2022

Risks and uncertainties

___

Risks and Uncertainties

Summary of risks, our risk appetite, likelihood and potential impact:


Risk category	Risk description	Risk appetite	Likelihood	Impact
Strategic and commercial	The energy transition embodied by current trends towards alternative energy sources may be addressed by various solutions and there is no certainty that any of the solutions offered by Alfen will prove to be acceptable for addressing these.	High	Low	High
	The market for electric vehicles is rapidly developing and evolving which makes it difficult to predict the future demand for charging equipment as well as charging behaviour.	High	Medium	High
	The market for energy storage is still nascent and developing which may result in uncertainty regarding the future performance of its Energy storage business line.	Medium	Medium	Medium
	Competition in the industries and market segments in which Alfen operates may materially adversely affect its market shares, margins and overall profitability.	High	Medium	Medium
	Alfen’s business depends, in part, on contracts with certain significant clients. If one or more of such contracts were discontinued, Alfen’s financial position and results of operation could be materially adversely affected.	Medium	Low	Low
	Alfen may be unsuccessful in adequately protecting its technological know-how and trade secrets.	Medium	Low	Medium
	A looming recession and continued inflationary pressures might slow down the energy transition and as such the markets that Alfen operates in, which could adversely affect or delay revenues, profits and cash flows.	High	Medium	Medium
Operational	Alfen depends on its ability to hire and retain management, key employees and other qualified and skilled employees and may not be able to attract and retain such personnel.	Medium	Medium	Medium
	Failure to properly manage customer projects, or project delays, may result in additional costs or claims and adversely affect or delay revenues, profits and cash flows.	Medium	Medium	Medium
	Alfen is dependent on third-party suppliers to deliver raw materials and components for its products and may experience supply problems.	Low	High	Medium
	Disruptions of Alfen’s information technology systems could have a material adverse effect on its business.	Low	Low	High
	Alfen’s IT systems’ security could be breached by a third party that might misuse or hijack Alfen assets or information which could have a material adverse effect on its business.	Low	Medium	High
Compliance	Alfen is exposed to risks associated with product liability, warranties, recall claims or other lawsuits or claims that may be brought against it.	Medium	Low	Medium
Compliance	Alfen may not fully comply to laws and regulations across multiple jurisdictions, which are becoming increasingly stringent, particularly related to environmental, health and safety and transportation.	Low	Medium	Medium

For information about Alfen’s credit risk, liquidity and market risks as well as the capital management structure,

please refer to the information outlined in note 3 and 4 of the financial statements. Furthermore, risks related

to external reporting are considered limited due to the limited amount of estimates in the financial statements.

21Alfen - Annual Report 2022

Strategic and commercial risks and

uncertainties

The energy transition embodied by the

current trends towards alternative energy

sources may be addressed by various

solutions and there is no certainty that any

of the solutions offered by Alfen will prove

to be acceptable for addressing these.

Various solutions are and may be brought to market

to address the energy transition and current trends

affecting the energy landscape. Technologies such as

hydrogen storage or fuel cells may compete with

Alfen’s products, systems and solutions of its Energy

storage or EV charging business lines. If Alfen fails to

achieve market acceptance for its products, systems

or services as solutions to current trends, Alfen’s

business, financial condition, results of operations

and prospects could be materially adversely affected.

To mitigate this risk, Alfen continuously monitors

market developments and initiates R&D efforts

accordingly. Through its open-architecture approach

and its technology-agnostic solutions it is relatively

flexible to adapt its products and solutions to

changing market trends.

The market for electric vehicles is rapidly

developing and evolving which makes it

difficult to predict the future demand for

charging equipment as well as charging

behaviour.

The market for electric vehicles is rapidly developing

and is continuously evolving. As such, it is

characterised by changing technologies, price

competition, additional competitors, evolving

government regulation and industry standards,

frequent new vehicle announcements and changing

consumer demand and behaviour. Future

developments in technology trends can be uncertain.

A slower than anticipated increase, or even a

decrease, in the sales of electric vehicles in the

countries in which Alfen operates could lead to a

slower than anticipated growth of revenues in Alfen’s

EV charging business line, which may have a material

adverse effect on Alfen’s business, financial condition,

results of operations and prospects.

To mitigate this risk, Alfen continuously monitors

market developments with regard to EV charging

behaviour and initiates new R&D projects to address

possible future trends with regard to EV charging. In

addition, as a result of its internationalisation

strategy, Alfen is becoming less dependent on

country-specific, often regulation or subsidy related,

fluctuations in demand patterns for EVs or EV

charging equipment.

The market for energy storage is still

nascent and developing which may result in

uncertainty regarding the future

performance of its Energy storage business

line.

Alfen started its activities in the development,

production and installation of energy storage systems

in 2011 and released its first meaningful commercial

successes in 2016, in a relatively new market. The

market has since then been maturing but is still in a

relative nascent stage. As such, the development and

expansion of this business line may be subject to

significant uncertainty and volatility. In addition, as

the market evolves, the costs involved in developing

the Energy storage business line may be significantly

greater than currently anticipated and the estimated

amount of capital expenditures required may be

insufficient to cover the actual cost due to cost

overruns or other unexpected expenses.

This risk is reducing over time, as the market for

energy storage is gradually maturing and Alfen’s

customers are gaining more experience with energy

storage projects, including business case

development, internal approval procedures and

project management. Alfen further reduces this risk

by continuously focusing on expanding its range of

storage applications, making it less vulnerable to a

change in business case dynamics for a specific

storage application. In addition, as a result of its

internationalisation strategy, Alfen is becoming less

dependent on country-specific, often regulation or

subsidy related, fluctuations in demand patterns for

energy storage systems.

Competition in the industries and market

segments in which Alfen operates may

materially adversely affect its market

shares, margins and overall profitability.

Alfen’s industries and market segments are highly

competitive, and it faces significant competition from

large international competitors as well as smaller

regional competitors in certain markets. In addition,

certain industry players who currently do not

compete with Alfen in terms of quality and market

share may enter Alfen’s market and disrupt the

competitive environment which may reduce Alfen’s

market share. Current clients may decide to develop

or acquire certain capabilities in-house, reducing

demand for Alfen’s products, systems and services.

If Alfen is unable to compete successfully in its

product and geographic markets, its business,

financial condition, results of operations and

prospects could be materially adversely affected.

To mitigate this risk, Alfen is continuously focusing on

product upgrades and new product development,

cost engineering and purchasing savings. In addition,

Alfen continuously monitors its competitive

environment and, through SWOT analyses, seeks to

identify its unique selling points that are valuable to

its customers. Alfen also increasingly focusses on

integrated solutions covering multiple business lines,

in order to further differentiate from the majority of

its competitors who focus on individual business lines

only.

Alfen’s business depends, in part, on

contracts with certain significant clients. If

one or more of such contracts were

discontinued, Alfen’s financial position and

results of operation could be materially

adversely affected.

The success of Alfen’s business depends, in part, on

significant customer contracts entered into with a

limited number of grid operators and large

companies. Alfen may not be able to renew such

contracts upon their expiry which could have a

negative impact on Alfen’s revenue and profits.

This risk is mitigated by strong growth in recent years

in EV charging equipment and Energy Storage

Systems business lines. Within Smart Grids Solution,

there is a continuous effort to further diversify its

customer base. The clients Enexis and Alliander,

representing a large part of the Smart grid solutions

business line, separated their commercial activities in

the past into separate entities, which further

contributed to a diversification of customers.

This risk is further mitigated by a structured approach

to tenders in the market supported by multi-

disciplinary tender teams.

Alfen may be unsuccessful in adequately

protecting its technological know-how and

trade secrets.

Alfen relies on certain technology, know-how and

business and trade secrets. There is a risk that third

parties, in particular competitors, may copy such

technology and know-how or develop it

independently and later challenge Alfen’s use of it. In

addition, employees who in the course of their

employment with Alfen have access to important

proprietary information which may or may not be

protected by intellectual property rights may leave to

go work for a competitor.

To mitigate this risk Alfen relies on confidentiality

agreements with suppliers and customers, non-

compete clauses in contracts with employees and

technical precautions to protect its technology, know-

how and other proprietary information. However,

there is no guarantee that these agreements and

precautions or Alfen’s ability to enforce its

contractual rights, will provide sufficient protection in

the case of any unauthorised access or use,

misappropriation or disclosure of such information.

Defending against any unauthorised access or use

may result in lengthy and costly litigation or

administrative proceedings and cause significant

disruption to the business and operations of Alfen.

A looming recession and continued

inflationary pressures might slow down the

energy transition and as such the markets

that Alfen operates in, which could

adversely affect or delay revenues, profits

and cash flows.

A looming recession and continued inflationary

pressures might impact the wider economy and also

the end-markets of Alfen. This could have the effect

that businesses in these markets reduce their capital

expenditures in light of such an investment climate,

which in return may result in lower order intake for

Alfen. These events could materially impact revenue,

profits and cash flows.

22Alfen - Annual Report 2022

To mitigate this risk, Alfen is continuously diversifying

its customer base. Not only in the markets Alfen

currently operates in, but also by further

internationalising in Europe. In general, Alfen

operates in markets driven by the long-term energy

transition, which is not expected to be highly cyclical.

To mitigate this risk, Alfen is continuously diversifying

its customer base. Not only in the markets Alfen

currently operates in, but also by further

internationalising in Europe. To safeguard the health

and safety of its employees, Alfen complies to all

relevant national and international guidelines,

standards and policies for health and safety. Also,

Alfen can implement additional safety measures

where required to continue safe and responsible

operations during a pandemic, as evidenced during

the COVID-19 crisis.

Operational risks and uncertainties

Alfen depends on its ability to hire and

retain management, key employees and

other qualified and skilled employees and

may not be able to attract and retain such

personnel.

Alfen’s future performance depends in significant

part on the continued service of the Senior

Management and other key personnel, including the

heads of Alfen’s business lines and other employees

involved in research and development, staff,

marketing and sales personnel and employees with

critical know-how and expertise. The loss of the

services of one or more members of Senior

Management or other key personnel could have a

material adverse effect on Alfen’s business, financial

condition, results of operations and prospects.

Alfen’s success also depends on its continuing ability

to attract, retain and develop qualified and skilled

personnel, including scientists, designers, technical

employees and engineers with the requisite technical

background. This is especially important given the

expected high growth in the segments in which Alfen

is active. Competition for such personnel is intense, in

particular for technical and industrial employees. This

is particularly relevant in the Netherlands, since it is

the country where Alfen has its headquarters,

significant business operations and research and

development activities.

To mitigate this risk, Alfen seeks to make optimally

use of its increased public profile after the IPO and

the widespread interest in the energy transition in

order to attract talent. Retention and development

are key focus areas of the HR department and

management.

Through Alfen’s in-house Academy (for which it was

awarded a prize for best program in the Netherlands

in 2017) important personnel continues to be

attracted and incentivised to further develop at Alfen.

Failure to properly manage customer

projects, or project delays, may result in

additional costs or claims and adversely

affect or delay revenues, profits and cash

flows.

Alfen generates part of its business by participating in

projects for the installation of its products, systems

and solutions, and it expects that in the future there

will be an increase in the number and size of the

projects that it undertakes. Alfen may not be

successful in executing these projects or its project

management services, or a project may be delayed by

events beyond its control which may lead to delays in

revenue streams that may adversely affect Alfen’s

profits or cash flows.

Alfen mitigates this risk by continuously working on

further professionalisation of its project management

department, supply chain management and the

interrelation between these two by, for example,

weekly meetings in which project management

together with supply chain management identified

and determined bottlenecks and priorities,

respectively.

Alfen is dependent on third-party suppliers

to deliver raw materials and components

for its products and may experience supply

problems.

Alfen’s production and assembly processes depend

on the availability and timely supply of raw materials,

components and finished goods, from third-party

suppliers. Alfen obtains a significant portion of certain

of its processed raw materials from a limited number

of key suppliers.

If any of Alfen’s suppliers are unable to meet their

obligations under purchase orders or supply

agreements, Alfen may be forced to pay higher prices

to obtain the necessary raw materials from other

suppliers, change suppliers, or may not be able to

locate suitable alternatives at all. Supply interruption

could lead to interruption of Alfen’s own production

at one or more production facilities.

This could be particularly relevant for the supply of

batteries, since the rapidly developing market for

energy storage projects and the roll-out of EVs may

put significant pressure on the production and supply

capacities of a relatively small number of global

battery suppliers.

Alfen may experience supply problems and may be

unable to fill clients’ orders on a timely and cost-

effective basis or in the required quantities, which

could result in damage claims, order cancellations,

decreased sales or loss of market share and damage

to Alfen’s reputation.

To mitigate this risk, Alfen seeks to have multiple

interchangeable suppliers for its key purchases. Alfen

is in continuous dialogue with its key suppliers to

discuss potential supply chain challenges and, in case

of any disruptions, seeks to jointly address these and

return to normal course of business as quickly as

possible. Any potential disruptions can further be

mitigated by, temporarily, increasing stock levels or

pre-down payments to secure components and

adjusting working procedures. In case of more

structural challenges with certain suppliers, Alfen has

the in-house capabilities to adjust product design and

configurations to develop alternatives.

Disruptions of Alfen’s information

technology systems could have a material

adverse effect on its business.

Alfen depends on its information technology systems

to, among other things, conduct operations, to

interface with clients (for example through its web

shop) and to maintain financial records and accuracy.

Alfen also develops and supplies software to clients.

Information technology systems failures could disrupt

operations leading to increased costs. In addition,

Alfen’s computer systems, including its back-up

systems, could be damaged, hacked or interrupted

which could impair its ability to effectively and timely

provide products, systems, solutions and services,

and could damage Alfen’s reputation.

The mitigation of these risks starts with an IT security

policy that is in place and sufficient resources to

manage the IT related risks. As such, Alfen further

strengthened the IT department and continues to do

so in 2023. To further mitigate the risks related to

privacy related information as well as data protection

in general several actions have been taken and Alfen

maintains a cyber-security insurance policy.

Alfen’s IT systems’ security could be

breached by a third party that might misuse

or hijack Alfen assets or information which

could have a material adverse effect on its

business.

Alfen’s business activities are increasingly online. It

uses collaborative software and data in the cloud and

its IT systems are increasingly accessible remotely for

more efficient operations. Also, its smart energy

solutions are more and more connected to the

internet of things to allow remote monitoring and

operation of its products and services. Third parties

might be able to breach security and get access to

Alfen’s IT systems and/or products, and as such, they

could hijack or misuse sensitive information or they

could hijack or misuse Alfen’s products. This could

impair Alfen’s ability to effectively and timely conduct

its business and/or damage Alfen’s reputation.

To mitigate this risk, Alfen uses cloud based solutions

for its own IT systems from suppliers that have

proven and tested security which they continuously

update to protect it from the latest threads.

Furthermore, to mitigate the risks related to privacy

related information as well as data protection in

general several actions have been taken and Alfen

maintains a cyber-security insurance policy.

Additionally, Alfen has implemented an information

security policy to safeguard and secure remote

communication and operation of its products &

services. For this, Alfen is certified by ISO 27001.

Compliance risks and uncertainties

Alfen is exposed to risks associated with

product liability, warranties, recall claims or

other lawsuits or claims that may be

brought against it.

In the normal course of business Alfen is exposed to

product liability, warranty and recall claims, lawsuits

and any other claims that might lead to higher costs

and/ or reputational damage.

Furthermore, Alfen may become subject to other

proceedings alleging violations of due care, safety

23Alfen - Annual Report 2022

provisions and claims arising from breaches of

contract or fines imposed by government or

regulatory authorities in relation to its customised

and semi-customised products, systems and

solutions.

To mitigate this risk, Alfen aims to have back-to-back

agreements in place with its suppliers. Furthermore,

throughout the design and production phases, there

is a continuous focus on quality with quality

assurance being an integral part of Alfen’s working

processes. Moreover Alfen is able to continuously

improve its products and services through valuable

performance information obtained from its

integrated service offering. Finally, Alfen has

insurance policies in place to limit the costs of

manufacturing defaults and design flaws.

Alfen may not fully comply to laws and

regulations across multiple jurisdictions,

which are becoming increasingly stringent,

particularly related to environmental,

health and safety and transportation.

Alfen is subject to numerous environmental, health

and safety laws and regulations across multiple

jurisdictions, which are becoming increasingly

stringent. Additionally, Alfen’s products and business

operations are subject to a broad range of local,

state, national and multi-national laws and

regulations in the jurisdictions in which it operates

and markets its products. Amendments or revisions

to such laws and regulations may require changes to

Alfen’s product designs or production processes and

may lead to additional costs or failure to comply.

To mitigate this risk, the quality of Alfen’s products

and compliance to the relevant safety and quality

certificates is strictly monitored by the QHSE-

department. Additionally, Alfen’s in-house general

counsel monitors or requests specialist assistance

from foreign outside counsel about laws and

regulations across multiple jurisdictions. Finally, in

order to increase the safety awareness and

accreditations of its personnel Alfen uses its in-house

education centre to train its people in a controlled

environment where real-life situations can be

simulated.

Risk management and control

systems

Management Board responsibility and

approach towards risk management

The Management Board is responsible for the control

environment, including risk management and internal

control systems in order to properly manage the

strategic, operational and other risks and

uncertainties that could have a material adverse

effect on Alfen’s business and day-to-day operations.

The applicable risks and uncertainties for Alfen are

evaluated on a periodic basis by the Management

Board and discussed with the Supervisory Board.

The Management Board is convinced that actual

control should start with setting the right mind-set

(‘tone at the top’), allocating the right responsibilities

and implementing day-to-day working procedures for

all employees within Alfen.

The Management Board recognises the importance of

a formalised approach towards risk management for

a rapidly growing organisation like Alfen. In practice

this means that it is important to maintain the right

balance between formalised systems and procedures

and the informal hands-on approach that is necessary

to further boost the growth of the company. Alfen’s

corporate culture is also an important ‘soft-control’ to

mitigate risks and fraud.

During financial year 2022, Alfen continued to

support its corporate culture and other foundations

of its risk management and control systems with its

Code of Conduct, Whistle blower policy, insider

trading policy, safety and quality certifications,

periodic reports and meetings. In addition, further

consolidation and professionalisation has been

achieved by means of the implemented Alfen

Integrated Management System (“AIM”), in which our

business processes as well as our day-to-day working

procedures are formally documented in one central

system.

The Management Board, to the best of its knowledge,

is not aware of any significant deficiencies in its

control environment, including risk management and

internal control systems.

Management Board responsibility and

approach towards fraud

The Management Board has the primary

responsibility for the prevention and detection of

fraud, including designing and implementing

appropriate (group) programs and controls to

identify, assess and mitigate inherent fraud risks and

the creation of proper awareness and attitude

towards fraud incentives and corresponding fraud

risks.

Creating the proper awareness and attitude towards

fraud (‘tone at the top’) within the Company starts

with establishing and promoting a culture of honesty

and ethical behaviour by means of leading by

example from The Management Board, further

supported by compliance training. This culture is

further formally enforced by Alfen’s Code of Conduct,

the Whistle blower policy, the Insider trading policy

and the annual fraud risk assessment process,

including assessment of mitigating (anti-fraud)

controls.

Code of Conduct

Alfen has a Code of Conduct that applies to all

employees. The principles and best practices

established in the Code of Conduct reflect the

corporate culture that the Management Board wants

to embed in the day-to-day routines of all employees.

The core values included in the Code of Conduct are

related to professional conduct, flexibility, reliability

and integrity and safety. The Code of Conduct

includes topics including acting with integrity, gifts,

anti-bribery, corporate social responsibility and

health and safety. The Code of Conduct can be found

on Alfen’s website. Alfen also has a Supplier Code of

Conduct in order to ensure our supply chain abides by

our culture and values.

Without impacting its content the Code of Conduct

and the Supplier Code of Conduct were reviewed and

refreshed in 2021.

Furthermore, a Code of Conduct online training has

been initiated for new employees and the

management team received a Code of Conduct

refresh training. No violations of the Code of Conduct

were reported in the financial year 2022.

Whistle-blower policy

Alfen employees are offered the opportunity to

report irregularities or suspicions with regards to

violations of the Code of Conduct, the law, safety

policies, the environment or any other forms of

misbehaviour without bringing their (legal) position in

jeopardy. Reporting of such instances by Alfen

employees can be either by designated ‘persons of

trust’ or in complete anonymity through a prescribed

website. No violations or irregularities were reported

under the Whistle blower policy in financial year

2022.

Insider trading policy

Alfen continues to adhere to its implemented

regulations covering security transactions by the

members of the Management Board and Supervisory

Board, the Management Team, independent

contractors and other designated employees that

have insight into market-sensitive information. The

Insider trading policy is published on Alfen’s website.

Alfen’s Insider trading policy aims to promote

compliance with the relevant obligations and

restrictions under applicable securities law, including

The European Market Abuse Regulation ((EU) No

596/2014) and intends to limit the risk of Alfen’s good

reputation and business integrity being harmed as a

result of prohibited or undesirable dealing in Alfen

Securities. During the financial year 2022, several

questions were asked about the insider trading policy

and addressed by the compliance officer. No

violations or irregularities were reported in financial

year 2022.

24Alfen - Annual Report 2022

Fraud risk assessment process

Alfen’s fraud risk assessment started with an initial

assessment made in a joint-effort between the

Finance department, including the CFO, and Director

Strategy & IR by means of several discussions and

brainstorm sessions held, in which the fraud triangle

was taken into account to determine inherent fraud

risks that Alfen is facing and the appropriate

mitigating actions that are already in place or require

implementation, if any.

Subsequently, identical sessions, including a thorough

explanation of the fraud triangle, were held with the

business line directors in order to validate the

completeness of initial fraud risks identified. As such,

the initial identified risks were not provided upfront

with the business line directors in order to avoid

possible anchoring bias.

The identified fraud risks on business line level were

assessed on their significance related to the Company

as a whole and included in Alfen’s fraud risk

assessment document, presented to and discussed

with the Management Board in detail. After approval

by the Management Board, the fraud risk assessment

document was also formally presented and discussed

in the Supervisory Board meeting of 6 December

2022.

Safety and quality certifications

Alfen has been awarded with several ISO

certifications and possesses other relevant safety and

quality certificates. The quality of Alfen’s products

and compliance to the relevant safety and quality

certificates is strictly monitored by the QHSE-

department.

25Alfen - Annual Report 2022

26Alfen - Annual Report 2022

Corporate

Sustainability

Reporting

___

27Alfen - Annual Report 2022

Sustainable development is a development that

meets the needs of present generations without

jeopardizing the ability of future generations to meet

their needs (United Nations, report Brundtland

Commission, 1987).

Alfen has a business model that directly contributes

to a sustainable economy and society. Alfen plays in

the centre of the energy transition through enabling

the generation, distribution and consumption of

emission-free electricity with its Smart grids, EV

charging equipment and Energy storage solutions.

This link with sustainability is reflected in our vision:

“to build a connected, smart and sustainable energy

system for future generations”. And also in our

mission: “to boost the energy transition by

engineering, manufacturing, integrating and

connecting high quality energy solutions that are

innovative, reliable and smart”.

Next to the positive impact of its business activities,

Alfen sees running the business in a sustainable

manner as a moral duty. This is reflected in our

company values ‘SPARK’: Sustainable, Partnership,

Adaptive, Reliable and Knowledgeable, but also in our

Code of Conduct.

This section provides further details on (1) Alfen’s

current framework for CSR and corresponding

performance (2) Alfen’s work on implementing CSR-D

(3) Alfen’s performance on broader range of ESG

topics.

Current CSR framework

In 2019, we updated our Corporate Sustainability

Reporting (CSR) framework. Historically, the Alfen CSR

agenda was based on three pillars: product lifecycle

approach, footprint minimisation, and people,

knowledge & safety. During 2019, a materiality

assessment was performed in order to understand

stakeholder views of the most important

environmental, social and economic factors to Alfen’s

business success and to re-assess whether the three

CSR pillars were still relevant. The outcome of the

assessment validated the relevance of the three

pillars. Subsequently, the most material topics

derived from the assessment have been mapped to

the UN Sustainable Development Goals (SDGs) to

understand Alfen’s relevance to the global priorities

and aspirations.

The Materiality assessment and its

outcome

A materiality assessment is a formal exercise aimed at

engaging stakeholders to establish and rank the

importance of environmental, social and economic

materiality topics. Alfen identified the materiality

topics using internationally recognised frameworks

including the Global Reporting Initiative (GRI)

Materiality principle and ISO-26000 Guidance on

social responsibility.

The materiality assessment resulted in 20 material

topics which were derived from environmental, social

and economic materiality topics. Of those 20, 6 were

identified as most material according to carefully

selected stakeholders consisting of clients,

employees, investors, suppliers, community members

and the Supervisory Board.

1.Occupational health & safety

2.Compliance

3.Business ethics & integrity

4.Product quality performance

5.Management of customer relationships

6.Research & development

7.Financial performance

8.Resource scarcity

9.Risk management

10.Energy efficiency of end products

11.Employee engagement

12.Information security

13.Training & development

14.Diversity & equal opportunities

15.Carbon neutrality

16.Sustainable supply chain

17.Energy efficiency of operations

18.Product circularity

19.Hazardous substances

20.Social return

The following six topics were scored the highest and

were then identified as a priority to Alfen and its key

stakeholders:

1.Occupational health & safety

2.Compliance

3.Business ethics & integrity

4.Product quality performance

5.Management of customer relationships

6.Research & development

Subsequently, the material topics were aligned to the

UN Sustainable Development Goals (SDGs). The

material topics ‘Business ethics & integrity’ and

‘Compliance’ are considered core to Alfen’s business

as we are committed to operating in a responsible,

compliant and ethical manner in accordance with our

published Code of Conduct. Therefore, together with

the supporting company values summarised in

‘SPARK’ (Sustainable, Partner, Adaptive, Reliable and

Knowledgeable), they are captured under Business

Resilience as a foundation of Alfen’s CSR framework.

28Alfen - Annual Report 2022

The remaining four most material topics are

considered to be key focus areas for Alfen, and

therefore are at the heart of the CSR framework.

These were mapped to the following four SDGs (i)

SDG 7 – Affordable and clean energy, (ii) SDG 8 –

Decent work and Economic Growth, (iii) SDG 9 –

Industry, innovation and infrastructure, and (iv) SDG

12 – Responsible Consumption and Production.

Based on the outcome of the materiality assessment

and the UN SDG alignment, the Alfen CSR framework

was shaped.

Alfen’s CSR framework

CSR Framework

The most material topics mapped to four SDGs,

together with Business Resilience as well as our vision

and mission, collectively comprise the CSR framework

which is shown in the figure below. The vision and

mission are the guiding beacon for Alfen’s journey to

a connected and smart sustainable energy system for

future generations.

To measure our impact under the CSR framework, we

report on key performance indicators for each focus

area. The KPIs are:

•For SDG7 – Affordable and Clean Energy:

potentially avoided CO2 emissions by the use of

Alfen’s EV charging equipment, as well as the

potential number of households powered by solar

PV parks where Alfen provided its microgrid

solution;

•For SDG8 - Decent Work and Economic Growth:

safe working environment performance captured

by the Lost Time Injury Frequency Rate, as well as

the sickness absence rate;

•For SDG9 - Industry, Innovation and

Infrastructure: provide insight through sharing

Alfen’s investments in R&D together with

impactful innovation examples;

•For SDG12 - Responsible Consumption and

Production: results of Alfen’s Operational

Excellence program.

Alfen’s impact under its CSR framework

As described in the previous section, we measure our

impact through a set of key performance indicators

under the focus areas.

For SDG 7, we potentially avoided up to 3.8 Mtons of

CO2 equivalent emissions as our installed charge

points power electric vehicles and avoid harmful

emissions. This is a strong increase compared to the

2.2 Mtons of CO2e we potentially avoided by 2021

demonstrating how we continue to make impact with

our EV charging solutions. Moreover, we enabled the

supply of renewable energy to around 283,000

households (cumulatively) by connecting solar PV

farms to the public grid through our Smart grid

solutions, which is significantly more compared to the

206,000 households previous year.

For SDG 8, our Lost Time Injury (LTI) performance

improved further compared to previous years. In

2022 we utilized the SPARK programme to drive

further improvements and we prepared for the

implementation of the Life Saving Rules in 2023 (9

core activities where we apply additional focus on

maintaining safe working practices). Alfen is

committed to further improve its safety performance.

For SDG 8, the increase in absence rates is driven

mostly by Covid-19, as there are a large number of

people who could not work from home with

symptoms of Covid. Examples include employees in

assembly, warehousing and service.

In 2022 we did another health check amongst our

employees on voluntary basis. Over 40 % of the

population joined this health check. Both a

questionnaire as well as an individual medical check

and a personal follow up were conducted for the

participants. The most important overall conclusions

are that health and lifestyle are areas of

improvement. Another is the remarkably high score

of 98% with a positive answer on the question “Do

you generally enjoy going to work?”.

For SDG 9, we continued to invest in R&D and

innovations for the future. In 2022, we invested €20

million compared to €16 million in 2021, a 25%

growth. This demonstrates our commitment to drive

our technology forward to remain a product leader in

the energy transition

For SDG 12, our operational excellence team

continued to further optimise our business

operations and product quality. Various projects were

completed in 2022. For instance, Alfen has

standardised the communication with suppliers by

integrating its procurement orders to a supply chain

platform with international standards. The

connection to this platform enables more effective

handling and steering in our supply chain network

due to standardised communication with suppliers

and vice versa from suppliers to our ERP system.

Alfen has also implemented a sales order processing

configurator. This integrated order entry and

processing system has a 10 times faster order

handling time than before. A third example is a fault

reduction program in the assembly process for Smart

Grids Solutions. After careful registration of faults in

assembly and a corresponding learning program,

faults in the assembly have been reduced with 50%.

An overview of our 2022 impact is shown on the next

page.

29Alfen - Annual Report 2022

30Alfen - Annual Report 2022

CO2 performance

Alfen aims to have full insights in its CO2 footprint

with the ambition to reduce it and report it. Alfen has

an annual audit on its CO2 performance by an

external auditor. In recent years, the business has

been growing strongly, and as such, naturally our CO2

emissions would also grow with the growth of our

business without any further action. To counter this,

we had set ourselves the goal to achieve at least

equivalent CO2 emissions per FTE in 2022 compared

with 2019, despite the growth.

Various measures have been taken in 2022 to further

reduce our CO2 footprint per FTE. All Alfen offices,

warehouses and terrains are lighted by means of LED

lighting and we started to use additional rooftop solar

panels and improved insulation. Also, we further

increased the share of electric vehicles in accordance

with our active EV policy and currently ~63% of our

fleet (company cars and service vans) across

countries is fully electric. Finally, a hybrid working

model (home vs office) reduced Alfen’s mobility CO2

emissions as well. On the other hand, scope 3

emissions increased due to more flights for

international projects and conferences, after a low

number of flights in 2020 and 2021 due to Covid-19.

Further details can be found in our CO2 performance

report available in the Sustainability section of our

website.

The measures that we took in combination with the

influence of Covid-19, resulted in a reduction of the

absolute CO2 emissions in 2022 compared with 2019.

In 2022, we were able to drive down the CO2

emissions per FTE with 10%, even while the business

has been growing rapidly with a 76% revenue growth.

Therefore, we have achieved our objective and have

beaten the set target.

Looking forward, Alfen anticipates to further grow the

business strongly. Therefore, we have decided to

apply the current objective also for 2023. With effect

from reporting year 2021, this objective has been

divided into three parts: Scope 1, Scope 2 and Scope

3 “business travel”. Note that the reporting is based

on the Dutch CO2 performance index (“CO2

prestatieladder”). For Scope 3 we report our business

travel emissions only, which is in line with the CO2

performance index handbook 3.1. Alfen’s

performance over the last 4 years is detailed in the

tables below.

Table: Overview of Alfen CO2-emissions

by scope since 2019


CO2-emissions	2019		2020		2021		2022		Realisation 2022<->2019
Scope 1	1,073	(72)%	854	(86)%	825	(82)%	795	(70)%		(26)%
Scope 2	214	(14)%	63	(6)%	93	(9)%	128	(11)%		(40)%
Scope3*	202	(14)%	82	(8)%	96	(9)%	206	(18)%		2%
Total	1,489		999		1,014		1,129			(24)%

Emissions CO2e/FTE Scope 1	2.31		1.50		1.30		1.01			(56)%
Emissions CO2e/FTE Scope 2	0.46		0.11		0.15		0.16			(65)%
Emissions CO2e/FTE Scope 3*	0.44		0.14		0.15		0.26			(40)%
Emissions CO2e/FTE Scope 1,2,3*	3.21		1.75		1.60		1.44			(55)%

* Scope 3 consists of Business Travel, in line with the CO2 performance index handbook 3.1

Table: Overview of Alfen CO2-emissions

2022 targets and actual performance


Parameter/KPI	2019 actual		Target 2022		Actual 2022
Emissions CO2e/FTE Scope 1 (tonne)		2.31		+0%		1.01
Emissions CO2e/FTE Scope 2 (tonne)		0.46		+0%		0.16
Emissions CO2e/FTE Scope 3* (tonne)		0.44		+0%		0.26
Emissions CO2e/FTE Scope 1,2,3* (tonne)		3.21		+0%		1.44

* Scope 3 consists of Business Travel, in line with the CO2 performance index handbook 3.1

Update on CSRD

In November 2022, the European Union has adopted

the Corporate Sustainability Reporting Directive

(CSRD). CSRD is a non-financial disclosure regime

from the EU for companies of 250+ employees and/or

40+ M€ revenue. Disclosure should provide a holistic

picture of sustainability performance across

Environmental, Social and Governance (ESG) topics

from reporting year 2024 onwards. Aim of this

legislation is to stimulate investments in sustainable

stocks by making ESG performance more transparent.

While the legislative framework was developing this

year, Alfen has initiated an internal strategic program

early 2022 to understand its implications for Alfen

and take corresponding action. The program consists

of an interdisciplinary team with representatives from

Finance, QHSE, Strategy, HR, Product Management

and the Management Board.

31Alfen - Annual Report 2022

A double materiality assessment will be completed to

define the topics for Alfen within CSRD with

significant impact. Inside-out: Alfen determines topics

for which Alfen has a significant impact on the

environment and/or society. Outside-in: Alfen

determines topics for which the environment and/or

society has a significant impact on Alfen’s financial

performance.

In 2023, Alfen will work out further the material

Environment, Social and Governance topics. This

involves amongst others setting KPIs and data

requirements, collecting data, setting targets and

developing action plans to achieve those targets.

Highlighting the environmental topic of greenhouse

gas emissions, Alfen plans to commit to emission

targets for our scope 1, 2 and 3 emissions, which are

science-based and in line with global warming

limitation targets.

Performance on broader range of ESG

topics

Before reporting in full on these sustainability topics,

Alfen reports in this Annual Report 2022 already

more extensively on current performance on a wide

range of ESG topics, structured in the following

sections on Environment, Social and (corporate)

Governance.

Environmental topics

Alfen recognises that the economic activities of its

business operations can have consequences for the

environment. That is why we strive to act responsibly

with the environment and we take into account the

consequences of our activities. We have a specific

environmental commitment to:

•Protect and enhance the environment;

•Avoid the use of harmful or hazardous

components in used (auxiliary) materials and

articles;

•Reduce packaging waste;

•Use natural resources efficiently and optimally;

•Operate climate neutral and energy efficient and

to provide insight into this;

•Use renewable energy sources where possible;

•Reduce the CO2 footprint and making this

transparent;

•Minimise our exposure to suppliers who have a

material negative social and environmental

impact;

•Reduce the environmental impact in the life cycle

of products and making this transparent;

•Promote the development of a circular economy.

Furthermore, Alfen monitors the performance of

other environmental and social aspects that influence

sustainable production and consumption. Think of

waste management, circular products and CO2

emissions. In recent years, Alfen has taken various

measures to reduce waste. For example, Alfen

internally separates waste streams, enabling

optimum recycling options. Circularity of products is

seen as the cornerstone of Alfen's design processes,

using fair trade materials with a low carbon footprint

and focusing on reuse and recycling of materials.

Governance: Environmental Management

System

Alfen has developed the Alfen Integrated

Management system (AIM) to control its processes.

This management system is set-up as per the

requirements of and certified towards ISO

9001:2015, ISO 14001:2015, ISO 45001:2018, ISO

27001:2013 and ISO 50001:2018. The certification

covers all Alfen N.V. entities except Alfen Elkamo

which has its own certification. The ISO 14001:2015

Management System certificate (specifically related

to environment) can be found here (https://

alfen.com/file-download/download/public/1277).

Emissions & waste management

GHG Reduction Programme

Alfen strives for complete insight into its CO2

footprint with the objective to reduce this and to

report on this. Alfen maintains for years a CO2

performance and Energy management performance

reporting system where the below topics are

included. More information on the carbon intensity

trend and renewable energy use can be found in the

latest Carbon Footprint report. This report can be

accessed at our website (https://alfen.com/file-

download/download/public/1660).

Alfen is currently in a process to set Science-Based

Targets for its GHG reduction. So far, Alfen has set its

targets based on the voluntarily Dutch CO2

Performance scheme and measured towards these

stringent requirements.

Renewable Energy programmes

All production related activities of Alfen are executed

using 100% renewable electricity. Certificates of

origins are purchased from Certiq and Fingrid based

on the anticipated consumption of electricity. In

addition, Alfen has invested in its own PV installation

which is operational since the second half of 2022.

Non-GHG Air Emissions Programmes

The production process of Alfen is as such set-up that

there are no non-GHG air emissions to be accounted

for.

Water Management Programmes & Effluent

Management

Alfen uses no water for its production process. Water

is only used for sanitation, hygiene, and drinking

water purposes. This water output is monitored. We

have been able to keep water usage relatively stable,

while the business has grown with more than 40% in

revenues year-on-year on average. Table below

indicates water usage in our facilities in the

Netherlands, Belgium and Finland.


	2022
Alfen usage of water in m3	3,780

Hazardous Waste Management

Alfen has a very limited amount of hazardous waste.

This is related to the fact that no hazardous waste is

produced during its production process. The only

hazardous waste that is produced is related to a small

amount of empty cannisters, cans and bottles of

paint, grease, degreaser and anti-corrosion.

Supplier Environmental Programmes

Alfen co-develops with its main partners sustainable

initiatives. For instance, our transport partner set-up

initiatives to reduce its CO2 footprint of its transport

activities. Another partner focusses on the circularity

of the raw material used for the production of the

housing of the transformer substations.

32Alfen - Annual Report 2022

Circularity

Eco-Design and sustainable products

Alfen has chosen to use the ‘LiDS Wheel’. The

methodology uses universal EcoDesign guidelines and

gives engineers incentives to push the development

to more eco-efficient decisions. The tool is widely

used to evaluate and compare products and services

throughout the life-cycle, from beginning-of-life (idea)

to end-of-life (reuse, recycle or landfill). The LiDS

Wheel is a qualitative tool that gives the ability to

seek for a quantitative foundation and verification. In

2022 this tool is further implemented within Alfen.

Recycled Material Use

Alfen provides support towards the Dutch national

grid companies in establishing a material passport for

all products used in the distribution of electrical

energy. This so called Ksandr trade initiative, will

provide insight in raw material data and possibilities

for reuse. Further information can be found on

https://ksandr.nl/ (in Dutch). With the development

of material passports we identify the recyclability of

our products and gain insight into where

improvements can be made. The use of recycled

materials is also promoted with the use of the

discussed LiDS Wheel.

Product Stewardship Programmes

For our charging stations, we have set up agreements

with the respective National WEEE organisation of

the European countries where we sell our products.

Furthermore, Alfen requires for all wood used in its

products, the Forest Steward Council (FSC)

certification.

Social topics

Next to Environment, ESG is also about Social topics.

In this section, we address topics related to Alfen’s

workforce, work-related rights in general, consumer

& end-users, quality, workers in the value chain,

equal opportunities and the local community.

Workforce characteristics

Alfen keeps on investing in its workforce and also

throughout 2022 the workforce has grown

significantly from 683 FTE on 31 December 2021 to

893 FTE on 31 December 2022. The majority of its

employees work in the Netherlands or through Alfen

Elkamo in Finland.


FTE end-of-year	2022	2021
Netherlands	772	575
Finland	74	75
Other countries	47	33

Working conditions

Diversity

We promote diversity and inclusion at Alfen not just

because it is the right thing to do. We promote

diversity and inclusion because it’s essential for

delivering on the Alfen strategy. Diversity increases

our pool of potential candidates. It helps us attract

and retain the best and brightest talent. It allows us

to better understand different customers and

technical challenges. It makes us more adaptable,

helps us to avoid group-think, and contributes to

disrupting the status quo. In order to stay a step

ahead, we need teams with a healthy mix of

contrasting perspectives and backgrounds.

Diversity does not exist without inclusion. When

employees feel included, they feel a sense of

belonging that drives increased positive performance

results and creates collaborative teams who are

innovative and engaging. Employees that feel

included are more likely to be positively engaged

within the organisation. Higher employee

engagement drives higher levels of productivity,

retention, and a company’s overall success.

All of our practices can be read in our diversity and

inclusion policy (https://alfen.com/file-download/

download/public/1732). Alfen’s practices are

applicable to recruitment and selection, performance

and appraisal, compensation and benefits,

professional development and training, promotions,

succession planning, layoffs, terminations, social and

recreational programs, and the ongoing development

of our work environment.

Alfen strives that its workforce is a reflection of

society. We have many different nationalities

employed in our organisation. Although the number

of nationalities was already quite high in 2021, we

have seen this number further increasing in 2022. In

2022, Alfen employed 44 different nationalities

compared with 36 different nationalities in 2021.


Year (as per December 31)	Number of nationalities
2019	27
2020	32
2021	36
2022	44

“Wet ingroeiquotum en streefcijfers”

("Diversity Act")

Alfen believes that diversity and inclusion are key to a

sustainable future. Equal appreciation of different

cultures, ethnic groups and backgrounds is of great

importance. In our belief, this also ensures that issues

are looked at from different perspectives, which

enables us to create more balanced solutions. Alfen

now employs over 40 different nationalities and this

number is only increasing.

Apart from these principles, we are bound by the

obligations laid down in the Act on Growth Quotas

and Targets ("Diversity Act"), which came into force

on 1 January 2022.

Supervisory Board

Since the EGM of 21 November 2022, the Supervisory

Board has been expanded from 3 to 4 members,

adding a female member to the Supervisory Board.

This means that the board consists of 2 women and 2

men; a 50/50 split between female and male

members. Alfen thereby meets the diversity quota of

at least one-third woman and one-third man on the

Supervisory Board and will continue doing so.

Management Board

Since the appointment of the female CCO on 1 July

2021, Alfen's Management Board consists of 1

woman and 2 men; a 1/3-2/3 split between female

and male members. Alfen thereby meets the diversity

quota of at least one-third woman and one-third man

on the Management Board and will continue doing

so.

EU legislation

The adoption in November 2022 of the so-called

“Women on Boards” Directive in the EU parliament

aims to introduce transparent recruitment

procedures in companies, so that at least 40% of non-

executive director posts or 33% of all director posts

are occupied by the under-represented sex by the

end of June 2026.

Alfen is a supporter of this directive as we believe in

the importance of having gender diversity in our

corporate boards. Alfen meets the criteria of this

directive and we pledge to do our part to continue to

ensure that this directive is met.

Sub-top

This Sub-top group consisted of 39 employees as of

1 January 2022, and reached a total number of 42

employees per 31 December 2022.


Date	# Women	# Men	% Women	% Men
1-1-2022	7	32	18%	82%
31-12-2022	9	33	21%	79%

Sub-top objective

For the purpose of the Diversity Act, Alfen has

defined the sub-top as follows:

a.those executives who report directly to the

management board ( e.g. N-1); and

b.those executives that lead a team and whose

direct manager reports directly to the

management board (N-2).

This includes all entities within Alfen, therefore also

including all countries in which Alfen is based.

Plans to promote a proportionate split between

women and men

Given its activities, Alfen in the Netherlands is

operating in the so called Metalektro sector. Within

this sector, the average % of women in general is

16%. For Alfen in the Netherlands, this is slightly

higher at 17% at the end of 2022.

In order to ensure a proportionate split, i.e. a larger

share of women, we mainly focus on the new

employees, which, given Alfen's growth, involves a

considerable number of employees every year.

Looking at numbers of new employees we see that

the % of women joining Alfen has increased from 16%

in 2019 to almost 25% in 2022.

33Alfen - Annual Report 2022

Below, therefore, is a graph showing that the

percentage of women within Alfen is clearly

increasing.

Share of women in the company for 2019, 2020, 2021

and 2022 in %


	Total population		New employees
Year (as per December 31)	% female	% male	% female	% male
2019	11%	89%	15%	85%
2020	12%	88%	19%	81%
2021	14%	86%	21%	79%
2022	18%	82%	24%	76%

For increasing the number of women in our

organisation we will focus for the coming years on the

following pillars:

1.Inflow and internal promotions;

2.Cooperation with educational institutions;

3.External appearance.

Re 1. Inflow and internal promotions

Given Alfen's growth, many employees are recruited

every year. Both by our internal recruitment team

and with the help of external parties. The value of

diversity is explicitly discussed within the recruitment

team and with external parties and targets are set for

the supply of female candidates. For internal

promotion, the possibility of promoting women to

management positions is explicitly discussed and

stimulated.

Re 2. Cooperation with educational institutions

We strongly believe that, in order to show the

attractiveness of technology in general, one needs to

focus on the employees of the future. Therefore it is

essential that we provide children with the guidance

and resources they need to make informed decisions

about their future (education).

We will intensify the cooperation with schools

(ranging from vocational education to universities) to

offer interesting insights in our organisation as well as

technology in general. This will take place in various

forms ranging from participation in the Girls day to

lectures for students in for example Sustainable

Energy. This also includes offering internships as well

as graduation assignments.

Doing so, we will specifically focus on attracting

female students for our organisation.

Re 3. External appearance

We will focus on increasing the visibility of women in

our company in recruitment activities and social

media activities, among others. Female speakers at

conferences and events will also contribute to the

desired image of our Company.

Social return

Alfen creates sustainable employment opportunities

for people with a distance to the labour market. The

emphasis here is on employment of people receiving

benefits or people with other distances to the labour

market. Job seekers with a technical affinity,

education or working experience have a great chance

of finding a position within Alfen. However, we do not

only focus on technical profiles but see various

opportunities in other fields as well.

Employee development

Human capital can be broadly defined as the stock of

knowledge, skills and other personal characteristics

embodied in people that helps them to be

productive. Pursuing formal education (early

childhood, formal school system, adult training

programmes) but also informal and on-the-job

learning and work experience all represent

investment in human capital. Our people are key to

the success of the business.

Training

To ensure sustainable success, Alfen offers and

provides learning opportunities to all Alfen workers.

This is ranging from the mandatory training and

education required for the job as well as educational

opportunities to enlarge the knowledge of our

workers for further specialisation or career

development within Alfen.

Not only do we encourage building further expertise,

we also focus on professional development (e.g.

leadership skills), by offering various programmes at

various levels to increase the skills of our (potential)

leaders in the company.

Recruitment

Alfen acknowledges that for continuation of growth,

talent is required to make this growth happen.

Therefore, a dedicated recruitment team is active to

ensure that the open vacancies are filled with

competent candidates. Alfen policy is to assess first

whether the open vacancy can be fulfilled with

internal candidates. If this is not possible, external

candidates are recruited.

Alfen Academy

Alfen acknowledges as well the current limitations in

the availability of technical personnel. For many years

now Alfen has an in-house company school (Alfen

Academy) in cooperation with Deltion College (ROC in

Zwolle), where young adults start their

apprenticeship within Alfen to become an electrician

in combination with normal school activities to obtain

a college diploma as well. To optimally facilitate and

integrate the educational activities, we have our own

classroom and practise facilities at our own premises.

Founded in 2008, the Alfen Academy continues to

have significant scale, from 25 students in 2017, to 37

in 2018, 49 in 2019, 60 in 2020, 75 in 2021 and 54 in

2022. With this initiative, Alfen ensures a stable

source of technical personnel. Since we started our

own company school in 2008, we have already been

able to award over 150 diplomas.

Performance management

Performance management is an ongoing process that

can help to ensure that employees are performing to

the best of their abilities and meeting the goals of the

organisation. It helps to increase employee

engagement, as it allows employees to understand

their role and how it contributes to the success of the

company. Additionally, performance management

can help to uncover any underlying issues that could

be hindering performance, allowing for more

effective solutions to be put in place.

Therefore, the performance cycle at Alfen consist of

at least 3 different types of conversation between the

employee and their direct manager, being the target

setting meeting, the development meeting and

performance appraisal at the end of the year.

34Alfen - Annual Report 2022

Alfen has a yearly assessment cycle where last year

performance is discussed as well as personal

development and target setting. A Personal

Development Plan is applicable in case of further

career development or to improve personal

performance.

Performance management also provides us with

valuable insights into our employees’ strengths and

weaknesses. We use this information to provide

targeted training and development opportunities to

help employees reach their full potential.

Additionally, performance management also helps to

identify high-performing employees, allowing them to

be properly developed, rewarded or promoted.

Talent management

Regular talent review meetings are an essential part

of any organisation’s success. By providing an

opportunity to assess both performance and

potential, we get insight in potential talents within

the company and are able to maximise the potential

of our talents. Talent is regardless of whether the role

is in an individual contributor role or management

role. Within a technological and innovative company

like Alfen we need talents in specialist roles as much

as talents in more managerial roles. In management

roles, talent can help foster our culture of learning

and development, as well as create a positive working

environment.

Employee well-being

Employee well-being is essential to the success of our

business. Mental well-being is just as important as

physical health. Stress and anxiety can lead to job

dissatisfaction. Alfen provides their employees with

resources to help them manage stress, such as stress

management classes, mental health counselling, and

1 on 1 coaching. Due to corona we have seen the

number of mental related absences increasing.

The increase in absence rates is driven mostly by

Covid-19, as there are a large number of people who

could not work from home with symptoms of Covid.

Examples include employees in assembly,

warehousing and service.


FTE end-of-year	2019	2020	2021	2022
Alfen absence rate	3.1%	4.3%	4.1%	6.1%
Industry average	5.4%	5.0%	8.0%	Not available yet

In 2022 we did another health check amongst our

employees on voluntary basis. Over 40% of the

population participated in this health check.

Participants filled in a questionnaire and an individual

medical check and a personal follow up were

conducted for them. We are proud on the remarkably

high score of 98% with a positive answer on the

question “Do you generally enjoy going to work?”.

Also we identified areas for improvement, especially

around health and lifestyle.

Working hours policy

Alfen ensures that its working hours policy complies

with the applicable working hours acts of the country

where the company is registered or have personnel

working on its behalf.

Employee financial support

At Alfen, we recognize that the recent increase in

prices of goods and services, as well as the current

situation in Ukraine has created a challenging

economic environment for our employees. As a

result, we are committed to providing additional

compensation to our employees to help them cope

with the increasing cost of living. We have

implemented a number of measures in 2022 to

ensure our employees are to some extent

compensated for the increased expenses they face.

Health and Safety Management System

To ensure a healthy and safe workplace to work,

Alfen has a health and safety management system in

place based on the requirements of the countries

where Alfen is registered or have personnel working

on their behalf, and on the ISO 45001:2018

requirements. The system is included in the Alfen

Integrated Management system (AIM) to control its

processes. This management system is set-up as per

the requirements of ISO 9001:2015, ISO 14001:2015,

ISO 45001:2018, ISO 27001:2013 and ISO 50001:2018

and certified towards these standards accordingly.

Alfen has a QHSE policy where for the safety part it

has adopted the ‘safety differently’ view. When we

think of safety it is usually by reference to its

opposite, the absence of safety. The traditional view

of safety, called Preventative Safety (Safety-I), has

consequently been defined by the absence of

accidents and incidents, or as the ‘freedom from

unacceptable risk.’

35Alfen - Annual Report 2022

As a result, the focus of safety research and safety

management has usually been on unsafe system

operation rather than on safe operation.

In contrast to the traditional view, Alfen wants to

adopt the resilience engineering approach which

maintains that ‘things go wrong’ and ‘things go right’

for the same basic reasons. This corresponds to a

view of safety, called Productive Safety (Safety-II),

which defines safety as the ability to succeed under

varying conditions. The learning from normal work is

therefore a necessary prerequisite for the

understanding of the safety performance of Alfen.

The above view is supported by the SPARK

programme (Alfen’s company values) which was

specifically related to safety kicked off at the end of

2022.

The QHSE policy statement can be found on the Alfen

website under ‘downloads’.

Health and Safety Certifications

Alfen has a management system that complies and

are certified accordingly towards the ISO 45001:2018

standards. The certification covers all Alfen N.V.

entities except for Alfen Elkamo, which has its own

certification.

Safety Performance

Alfen monitors its safety performance and reports

about its KPIs. The indicators are Lost Time Injury

Frequency Rate (LTIFR), Total Recordable Rate (TRIR),

Fatality Rate (FAR) and Severity Rate. That FAR has

been 0 since 2020 when measurement began.

The safety performance of 2022 is as follows

(reference date 1/12/22).

Other work-related rights

Freedom of Association Policy

The right of workers and employers to form and join

organisations of their own choosing is an integral part

of a free and open society. We are committed to

promoting an open and inclusive workplace where all

employees feel more engaged and inspired to achieve

their maximum potential. Alfen recognises and

respects the basic right of all employees to associate

freely, to join or form a trade union and bargain

collectively. Where employees are represented by a

recognised trade union, we are committed to

establishing and maintaining a constructive dialogue

with their chosen union. We are committed to

bargaining in a constructive manner to seek mutually

beneficial collective agreements that protect and

improve the company’s business model while

delivering competitive pay, benefits and work life

balance for our people. Alfen fully respects and

supports workers democratic rights to participate or

not participate in trade unions without fear of

intimidation, pressure or reprisal. We support the

International Labour Organisation’s (ILO) Declaration

on Fundamental Rights and Principles at Work,

including the ILO declaration on the freedom of

association and the right to collective bargaining.

Collective Bargaining Agreements

For Alfen B.V. and Alfen ICU B.V. the Metalektro

Collective Labour Agreements (the 'CAO' or ‘CLA’)

applies. The Metalektro CLA consists of a standard

CLA and a CLA for senior staff.

For Alfen Elkamo Oy Ab the Technology Industry

Union in Finland applies.

Across Alfen N.V., more than 90% of employees are

covered by collective bargaining agreements, and if

employees are not covered by a collective bargaining

agreement, then it is because there is no bargaining

agreement in that country that is applicable to Alfen.

Human Rights Policy

The UN Guiding Principles for Business and Human

Rights also outline the corporate responsibility to

respect human rights. Beyond this, businesses are

increasingly recognising their own moral, legal, and

commercial responsibility. The OECD Guidelines for

Multinational Enterprises and the UN Guiding

Principles for Business and Human Rights form the

basis for what businesses should adhere to and are as

such adopted by Alfen.

On the one hand, businesses can hinder human

rights, as evidenced by reports around the world of

unsafe working conditions, migrant worker

exploitation, and harm done to communities. On the

other hand, businesses can help advance human

rights by offering access to decent work, creating

higher living standards, protecting people’s rights and

procuring goods in a responsible manner.

Our business centres around trust, as we can only

maintain our stakeholders’ confidence and preserve

our company’s reputation by acting with

professionalism and integrity. This, and more, is all

outlined in our Code of Conduct.

Everyone working at Alfen is expected to adhere to

this code of conduct. It builds on our values and

behaviours that underpin our way of working – and is

based on the policies and guidelines we follow in our

daily business.

We value our employees and seek to be a good

employer. We promote the personal and professional

growth of our employees by providing good primary

and secondary benefits and development

opportunities. This creates an environment where our

people not only do well but can also do good.

We provide a healthy and safe workplace where

mutual respect is key and discrimination isn’t

tolerated. Our whistle-blower policy allows

employees to safely and confidentially air any

concerns, should they arise.

The human rights we consider fundamental and

universal for our workforce include the right to

freedom of association, the right to collective

bargaining and freedom from discrimination based on

race, colour, sex, religion, political opinion and

national and social origin.

We have implemented a Supplier Code of Conduct

that determines the level of social, environmental

and ethical requirements towards a supplier.

Suppliers are required to agree to Alfen’s Supplier

Code of Conduct and confirm that they operate in line

with the principles of the UN Global Compact. These

principles encompass human rights, forced and child

labour, fair labour conditions, environmental

protection and anti-corruption amongst other topics.

36Alfen - Annual Report 2022

Workers in the value chain

Scope of Social Supplier Standards

To ensure that Suppliers conduct their business on

the same level as Alfen, a supplier Code of Conduct

has been developed covering all relevant ESG topics

that suppliers are required to address. This Supplier

Code of Conduct can be found on the Alfen website

under ‘downloads’ (https://alfen.com/file-download/

download/public/1720).

Conflict Minerals Policy / Conflict Minerals

Programmes

Conflict Minerals Suppliers are expected to ensure

that parts and products supplied to Alfen are DRC

conflict-free (do not contain metals derived from

“conflict minerals”; columbitetantalite (tantalum),

cassiterite (tin), gold, wolframite (tungsten), or their

derivatives such that they do not directly or indirectly

finance or benefit armed groups through mining or

mineral trading in the Democratic Republic of the

Congo or an adjoining country). Suppliers are to

establish policies, due diligence frameworks, and

management systems, consistent with the OECD Due

Diligence Guidance for Responsible Supply Chains of

Minerals from Conflict-Affected and High-Risk Areas,

that are designed to accomplish this goal.

Supply Chain Monitoring

Based on the criticality of the Suppliers towards the

production process of Alfen, supplier evaluation is

continually performed by the purchasing department

on KPIs like timely delivery, price, responses, and

deviations. In addition to this, for critical suppliers,

audits are executed by the Alfen QHSE department in

collaboration with the purchasing department to

assess the actual implementation of the Alfen

requirements.

Activities in Sensitive Countries

Alfen operates mainly in the countries of the

European Union and the European Economic Area.

Furthermore, we operate in the United Kingdom and

Switzerland. Alfen has no activities in sensitive

countries.

Modern Slavery

Alfen supports eliminating all forms of forced labour

and child labour. It has therefore developed a

Modern Slavery Policy that can be accessed here

(https://alfen.com/file-download/download/

public/1454).

Equal opportunities

Discrimination

Alfen denounces all forms of discrimination.

Discrimination is when a person is treated differently

or excluded, for example from a job opportunity,

because of their race, gender, religion, cultural

background, ethnicity, sexual orientation, disability,

political opinion, family responsibility, age, social

origin or any other status. It has the effect of

nullifying or impairing equal opportunity. Alfen has

measures in place to prevent discrimination towards

customers and employees. These include our Code of

Conduct and Whistle-blower policy, which expects all

employees to create and maintain a safe working

environment and to speak up and report misconduct.

We make a conscious effort to include all.

Further details can be found in the Diversity &

Inclusion policy, the Code of Conduct (https://

alfen.com/file-download/download/public/1832), the

Supplier Code of Conduct (https://alfen.com/file-

download/download/public/1720), and the Whistle-

blower policy (https://alfen.com/media/1092) which

all can be found on the Alfen website under

‘downloads’.

Quality

QMS Certifications

Alfen has a management system that complies and

are certified accordingly towards the ISO 9001:2015

standards. The certification covers all Alfen N.V.

entities except Alfen Elkamo which has its own

certification.

Consumers and end-users

Product and Service Safety Programme

Alfen ensures that its products and services are safe

for use and are of such quality standards that these

last for a long time. To ensure this, Alfen has

developed the Alfen Integrated Management system

(AIM) to control its processes. This management

system is set-up as per the requirements of ISO

9001:2015, ISO 14001:2015, ISO 45001:2018, ISO

27001:2017 and ISO 50001: 2018 and certified

towards these standards accordingly.

The implementation of the AIM system lies with the

CEO of Alfen and line management. Product / Service

Safety is therefore considered a line management

responsibility.

Alfen has a risk management process in place that

meets the requirements of ISO 30001:2018 including

risk assessments of our products and services (e.g.

FMEA, HAZID).

In the unlikely event that unforeseen circumstances

require a product recall, a recall process is in place.

In case of unwanted events (i.e. Product/ Service

related incidents), these are investigated by a multi-

disciplinary team with QHSE in the lead.

Methodologies used are ranging from 5 x why, 8D, up

to Kelvin TOP-SET.

Product/ Service Safety performance is measured and

targets are annually set by the Alfen QHSE

department. Targets are set on Customer complaints,

NCRs and incidents.

During production dedicated QC teams ensure that

the final product has received a Factory Acceptance

Test (either manually or automated). Where required,

a site Acceptance Testing is performed by dedicated

Commissioning engineers to ensure that the product

is safe to operate.

For each product line of Alfen dedicated After-Sales /

Service teams are established to ensure that

malfunctions, disturbances, and complaints are

adequately and swiftly handled. Based on the service

level of these contracts, 24/7 monitoring of the

products is possible.

In the unlikely event that Alfen products require a

recall, the public will be informed by means of

appropriate and proportioned communication in

relation to the unwanted event.

Local community

The company has been located in Almere since 1983

and has built up a strong, two-way relationship with

the municipality. There are various initiatives that

Alfen undertakes to strengthen this even further.

Not only does a significant part of our employees live

in Almere, we also have our own Alfen Academy

where we train and educate our students &

employees in cooperation with a public school in

order for them to get their accreditation and

diplomas. The Alfen Academy is a fundamental asset

in our collaboration with the local municipality to

help unemployed people get a job at Alfen. The latter

is also a diversity objective of Alfen.

Moreover, we sponsor the local, professional football

club FC Almere City, which besides being a football

club also supports and promotes the physical and

sportive development of children.

37Alfen - Annual Report 2022

38Alfen - Annual Report 2022

Corporate

Governance

___

General

Alfen N.V. is a publicly limited liability company

incorporated under the laws of the Netherlands, with

its registered seat in Amsterdam and its offices at

Hefbrugweg 28, 1332 AP Almere, the Netherlands,

chamber of commerce registration number 64462846

(“Alfen” or the “Company”) . For details regarding

Alfen’s share capital, reference is made to the section

“Capital Structure”.

Alfen, as the ultimate parent company, directly holds

all the shares of Alfen B.V., Alfen ICU B.V., Alfen

Projects B.V. and Alfen International B.V., and

indirectly holds all the shares of Alfen België BV and

Alfen Elkamo Oy Ab. Alfen has a works council. The

Company, Alfen B.V. and Alfen ICU B.V. meet all three

criteria as laid down in Section 2:263 paragraph 2 of

the Dutch Civil Code regarding the large company

regime (“structuurregime”). The Company, Alfen B.V.

and Alfen ICU B.V. have therefore deposited the

statement as referred to in Section 2:263 paragraph 1

of the Dutch Civil Code with the Chamber of

Commerce. The Company will amend its articles of

associations in accordance with the statutory

requirements in connection with the large company

regime in 2024.

Corporate governance within Alfen is based on

statutory requirements applicable to public limited

liability companies in the Netherlands as well as

Alfen’s articles of association. Alfen’s articles of

association are published on the Investor Relations

section of its website www.alfen.com (Articles of

Association) (the “Articles of Association”).

This section gives an overview of the information

concerning the Management Board, the Supervisory

Board and the General Meeting of Shareholders.

Alfen has a two-tier board structure consisting of the

Management Board and the Supervisory Board. The

Management Board is responsible for the day-to-day

management of the Company. The Management

Board and the Supervisory Board are jointly

responsible for the governance structure of Alfen.

39Alfen - Annual Report 2022

Management Board

Powers, responsibilities and functioning

The Management Board is the executive body and is

entrusted with the management of Alfen and

responsible for the continuity of Alfen, under the

supervision of the Supervisory Board.

The Management Board timely provides the

Supervisory Board with the information necessary for

the performance of the Supervisory Board’s duties.

The Management Board keeps the Supervisory Board

informed and consults with the Supervisory Board on

important matters. The Management Board has

informed the Supervisory Board of the main outlines

of the Company’s strategic policy, the general and

financial risks, and the risk management and control

systems.

Two Managing Directors are jointly authorized to

represent the Company. Pursuant to the Articles of

Association, the Management Board may grant one

or more persons, whether or not employed by the

Company, a power of attorney or other form of

continuing authority to represent the Company or to

grant one or more persons such titles as it sees fit. No

long term powers of attorney have been granted.

The General Meeting of Shareholders (the “General

Meeting”) appoints the Managing Directors who

constitute the Management Board. A resolution of

the General Meeting to appoint a Managing Director

can be adopted by a majority of the votes cast,

without a quorum being required. The Articles of

Association provide that a Managing Director may be

suspended or dismissed by the General Meeting at

any time. A resolution of the General Meeting to

suspend or dismiss a Managing Director can be

adopted by a majority of the votes cast, without a

quorum being required.

The Supervisory Board has appointed one of the

Managing Directors as CEO (Chief Executive Officer).

In addition, the Supervisory Board has appointed one

of the Managing Directors as CFO (Chief Financial

Officer) to specifically oversee the Company’s

financial affairs and one of the Managing Directors as

CCO (Chief Commercial Officer) to specifically oversee

the Company’s commercial affairs.

Members of the Management Board

The Management Board is composed of the following

members:


Name	Age	Position	Member since	End of current term
Mr Marco Roeleveld	61	CEO and COO	November 2015	AGM of 2026
Mr Jeroen van Rossen	49	CFO	August 2017	AGM of 2026
Ms Michelle Lesh	44	CCO	April 2022	AGM of 2026

Marco Roeleveld (born 1962, Dutch) is Alfen’s CEO

(Chief Executive Officer) and COO (Chief Operations

Officer). Marco Roeleveld is a member of the

Management Board since the Company’s

incorporation in November 2015. He joined the

subsidiary of the Company, Alfen B.V., as a Managing

Director in 1997. Prior to joining Alfen, Marco

Roeleveld was commercial director of Hitec Power

Protection in the Netherlands. He holds a master of

science degree in Business Administration from the

Technical University in Eindhoven, the Netherlands.

Jeroen van Rossen (born 1973, Dutch) is Alfen’s CFO

(Chief Financial Officer) since September 2015 and a

member of the Management Board since August

2017. Prior to joining Alfen, he was a partner at KPMG

(2010-2015) and worked as an auditor and advisor for

a number of large and mid-size companies in the

Netherlands. Jeroen van Rossen holds an accounting

degree from Nyenrode University in Breukelen, the

Netherlands.

Michelle Lesh (born 1978, American) was appointed

as Alfen’s new CCO (Chief Commercial Officer) per

July 2021. She is a member of the Management Board

since the AGM of 2022. Prior to joining Alfen, she

gained experience as the Chief Commercial Officer for

GE Digital’s Grid Software business supporting electric

utility customers globally. Prior to that she held

various commercial roles across General Electric’s

business units focused on the energy sector, including

power generation and Transmission & Distribution

hardware and software. Michelle Lesh has a

Mechanical Engineering degree from Bucknell

University and earned her MBA from University of

California, Irvine, United States of America.

The business address of the Management Board of

the Company is Hefbrugweg 28, 1332 AP in Almere,

the Netherlands.

Supervisory Board

Powers, responsibilities and functioning

The Supervisory Board supervises the Management

Board and the general course of affairs of the

Company, its subsidiaries and the business affiliated

therewith. The Supervisory Board is accountable for

these matters to the General Meeting. The

Supervisory Board also provides advice to the

Management Board. In performing its duties, the

Supervisory Directors focus on the effectiveness of

Alfen’s internal risk management and control systems

and the integrity and quality of the financial

reporting. The Supervisory Directors assist the

Management Board with advice on general policies

related to the activities of Alfen. In the fulfilment of

their duty, the Supervisory Directors focusses on the

interests of the Company and its related business.

Members of the Supervisory Board

The Supervisory Board is composed of the following

members:


Name	Age	Position	Member since	End of current
Mr Henk ten Hove	70	Chairman	22 March 2018	AGM of 2026
Ms Eline Oudenbroek	53	Member	6 July 2020	AGM of 2023
Mr Willem Ackermans	67	Member	6 July 2020	AGM of 2024
Ms Jeanine van der Vlist	58	Member	21 November 2022	AGM of 2027

The business address of the Supervisory Board of the

Company is Hefbrugweg 28, 1332 AP in Almere, the

Netherlands.

Henk ten Hove (born 1952, Dutch) is the Chairman of

the Supervisory Board since 22 March 2018. He held a

supervisory board position at the publicly listed

company Kendrion from 2013 until 12 April 2021 (as

chairman) and still holds a supervisory board position

at Unica since 2014. He is also chairman of the

foundation owning the shares in BDR Thermea group.

Henk ten Hove has spent most of his career at Wavin,

where he started in 1982 and held various positions

over time, including that of financial manager,

general manager Germany, member of the executive

board and, between 2010 and 2013, CEO of the

group. Henk ten Hove is independent within the

meaning of the corporate governance code.

He does not hold any shares in the Company. Henk

ten Hove holds a master’s degree in Economics from

the University of Amsterdam, the Netherlands.

Willem Ackermans (born 1955, Dutch) is a member of

the Supervisory Board since 6 July 2020. He is also a

member of the investment committees of BOM and

FSFE Fûns Skjinne Fryske Enerzjy. He is further a

member of the Advisory Board of GBM Works, a

member of the Board of Norges Bank Investment

Management for Offshore Wind Project Borssele I+II

and he is the chairman of the Supervisory Board for

the Ludwig Cardiology clinic in Groningen. He has

worked as Treasurer/Finance Director at Boskalis

International B.V., as Corporate Treasurer at

Koninklijke KPN N.V., as CFO at KPN International and

KPNQwest N.V., and as Director Corporate

Development, Strategy & Innovations at Eneco N.V.

Willem Ackermans is independent within the meaning

of the corporate governance code. He does not hold

any shares in the Company. Willem Ackermans holds

a degree in Construction and Architecture from the

Technical University of Delft, the Netherlands.

Eline Oudenbroek (born 1969, Dutch) is a member of

the Supervisory Board since 6 July 2020. She is Vice

President Operations EMEA at Interface Inc. She is

also the president of the Supervisory Board of Tauw

Group B.V. Previously she worked as operations

manager at The Royal Dutch Mint N.V. and

Gelderblom CNC Machines AV and as Managing

Director at Elysee Dental Solutions B.V. and Holland

Lift International B.V. Eline Oudenbroek is

independent within the meaning of the corporate

governance code. She does not hold any shares in the

Company. Eline Oudenbroek holds a degree in

Chemical Engineering (MSc) from the Technical

University in Eindhoven.

Jeanine van der Vlist (born 1964) is a member of the

Supervisory Board since 21 November 2022. She is a

non-executive director/supervisory director by

profession. In the past she held several senior

management positions in a number of international

companies, like Fujitsu, Dell, Alcatel-Lucent and

Eurofiber. She has supervisory board experience with

BDR Thermea Group and DPG Media Group.

Currently she is a (non-executive) board member of

the Belgium company DPG Media N.V. and a

supervisory director of the Remeha Group. Recently

she was appointed as a supervisory board member of

Koninklijke Brill N.V. Furthermore she is a board

member of the non-profit foundation Worldgranny.

40Alfen - Annual Report 2022

Jeanine van der Vlist is independent within the

meaning of the corporate governance code. She does

not hold any shares in the Company. Jeanine van der

Vlist holds a bachelor degree in information and

communication technology from the HEAO in the

Hague, an MBA from Ashridge Business school and a

management executive degree from Insead.

Remuneration

The remuneration policy applicable to the

Management Board and the Supervisory Board (the

“Remuneration Policy”) was adopted by the General

Meeting after the Works Council had been granted

the opportunity to determine its point of view

thereon. The remuneration policy applicable to the

Management Board was adopted by the General

Meeting on 7 April 2022 and for the Supervisory

Board on 8 April 2020. A subsequent amendment to

this remuneration policy for the Supervisory Board

may be proposed for adoption by the General

Meeting in April 2023. The current remuneration of,

and other agreements with, the Managing Directors

have been determined by the Supervisory Board in

2022, with due observance of the remuneration

policy.

The Remuneration Policy aims to attract, motivate

and retain highly qualified individuals and reward

them with a market competitive remuneration

package that focuses on achieving sustainable

financial results aligned with the long-term business

strategy of the Company. The Remuneration Policy

fosters alignment of interests of the Managing

Directors with its shareholders and other

stakeholders. It is designed in the context of

competitive market trends, statutory requirements,

corporate governance best practice, the societal

context around remuneration and the interests of the

Company’s shareholders and other stakeholders.

Based on the Remuneration Policy, the remuneration

of the Managing Directors consists of the following

components: annual base pay, a share-based long-

term incentive plan (LTIP), a short term incentive plan

(STIP) and pension and other benefits. A summary of

the remuneration of the Management Board is

available on ir.alfen.com and is set out in the

Remuneration Report of the Supervisory Board

below.

Related Party Transactions

All legal entities that can be controlled, jointly

controlled or significantly influenced are considered

to be a related party. Also, entities which can control,

jointly control or significantly influence the Company

are considered a related party. In addition, statutory

and Supervisory Directors and close relatives are

regarded as related parties.

Intercompany transactions are carried out at arm’s

length.

The following transactions were carried out with

related parties:

•Key management compensation;

•Share-based payments;

•Remuneration of the Management Board and

Supervisory Board.

Share award plans

The Management Board recognised the importance

of its key employees to the future success of the

Company. Therefore, on 4 October 2018, a long-term

incentive plan (‘LTIP’) was introduced for a number of

designated employees within the group of the

Company. The fourth grant under this plan was made

at 1 January 2022 and comprises of a total of 9,747

Ordinary Shares for no consideration.

The conditional rights to acquire existing Ordinary

Shares granted will be exercisable in exchange for

Ordinary Shares on the day that is four years after the

grant date, on the condition that the relevant

employee of Alfen continues to be employed by the

Company on this date (subject to certain

arrangements for exceptional circumstances, such as

death of the employee). Besides the aforementioned

service vesting condition no other vesting conditions

are applicable for the LTIP.

None of the outstanding shares related to the LTIP

are exercisable at 31 December 2022. The first grant

under the plan made at 1 January 2019 will be

exercisable at 2 January 2023.

Remuneration of the Management Board

and Supervisory Board

Details of the remuneration of the Management

Board and Supervisory Board can be found in the

Remuneration Report by the Supervisory Board.

The transactions which were carried out with related

parties are also set out in Note 30 in the Consolidated

Financial Statements.

General Meetings of Shareholders

General Meetings must be held in Almere or

Amsterdam, each in the Netherlands. The 2022

Annual General Meeting of Shareholders was

announced on 23 February 2022 to be held

electronically at the head offices of Alfen N.V.,

Hefbrugweg 28 in Almere, the Netherlands on

Thursday 7 April 2022 (the “AGM”).

For the AGM, in accordance with the provisions of the

Temporary Act Covid-19 Justice and Safety,

shareholders were only able to attend the meeting

electronically through an audio webcast, which also

provided the opportunity to ask questions. Votes for

the meeting could only be cast by proxy to the

Notary. During the Annual Meeting, the following

agenda items were scheduled, whereby the * Items

were put on the agenda for voting:

1.2021 Annual Report

a.Report of the Management Board for 2021

b.Remuneration report for 2010 (advisory

vote) *

c.Proposal to adopt the Financial Statements

for 2021 as included in the 2021 Annual

Report *

2.Reservation and Dividend

a.Explanation of dividend and reserve policy

b.Explanation of reservation of profits for

2021

3.Discharge of the members of the Management

Board and the Supervisory Board from liability for

the exercise of their respective duties

a.Proposal to discharge the members of the

Management Board from liability *

b.Proposal to discharge the (current and

former) members of the Supervisory Board

from liability *

4.Proposal to amend the remuneration policy of the

Management Board *

5.Management Board

a.Proposal to reappoint Mr. M. Roeleveld as

member of the Management Board*

b.Proposal to reappoint Mr. J. van Rossen as

member of the Management Board*

c.Proposal to appoint Ms. M.K. Lesh as

member of the Management Board*

6.Proposal to reappoint Mr. H. ten Hove as member

of the Supervisory Board*

7.Authorities of the Management Board

a.Proposal to extend the designation of the

Management Board to issue shares and/or

grant rights to subscribe for shares and to

limit or exclude pre-emptive rights for a

period of 18 months *

b.Proposal to authorise the Management

Board to cause the Company to acquire

own shares for a period of 18 months *

8.Proposal to appoint the external auditor PwC for

2022 *

During the Annual Meeting, the Shareholders voted

to:

•Adopt the Remuneration Report for 2021, as

included in the 2021 Annual Report;

•Adopt the Financial Statements for 2021 as

included in the 2021 Annual Report;

•Discharge of members of the Management Board

from liability as stipulated in article 30 of the

Articles of Association, insofar as the exercise of

such duties was reflected in the 2021 Annual

Report or information was otherwise disclosed to

the General Meeting of Shareholders prior to the

adoption of the Financial Statements. The scope

of the release from liability shall be subject to

limitations by virtue of the law;

•Discharge the members of the Supervisory Board

from liability for the exercise of their respective

duties, as stipulated in article 30 of the Articles of

Association, insofar as the exercise of such duties

was reflected in the 2021 Annual Report or

information was otherwise disclosed to the

General Meeting of Shareholders prior to the

adoption of the Financial Statements. The scope

of the release from liability shall be subject to

limitations by virtue of the law;

•Amend certain aspects of the current

remuneration policy for the Management Board,

whereby the full proposal for the amendment of

this remuneration policy and the explanation, as

well as the positive advice of the Works Council

are available at the Company’s website;

•To reappoint Mr. Roeleveld for a period of four

years, which will end at the close of the Annual

General Meeting of Shareholders to be held in

2026;

41Alfen - Annual Report 2022

•To reappoint Mr. Van Rossen in accordance with

this nomination for a period of four years, ending

at the Annual General Meeting of Shareholders in

2026;

•To appoint Ms. Lesh for a period of four years,

also ending at the Annual General Meeting of

Shareholders in 2026;

•To reappoint Mr. Henk ten Hove in accordance

with this nomination by the Supervisory Board for

a period of four years, ending at the close of the

Annual General Meeting of Shareholders to be

held in 2026;

•Extend the designation of the Management Board

to issue shares and/or grant rights to subscribe for

shares for a period of 18 months following the

Annual Meeting 2022, subject to the approval of

the Supervisory Board, and to limit or exclude pre-

emptive rights of existing shareholders up to a

maximum of 10% of the issued share capital on 7

April 2022, which authorization will therefore end

on 7 October 2023;

•Authorize the Management Board, subject to the

approval of the Supervisory Board, to cause the

Company to acquire its own shares up to a

maximum of 10% of the issued share capital on 7

April 2022, either through a purchase on a stock

exchange or otherwise at a price, excluding

expenses, not lower than the nominal value of the

shares and not higher than the opening price on

Euronext Amsterdam on the day of the

repurchase plus 10%, for a period of 18 months

following the Annual Meeting 2022, which

authorization will therefore end on 7 October

2023;

•Re-appoint PwC as the external auditor for the

financial reporting year 2023.

Whenever the Company’s interests so require, the

Supervisory Board or the Management Board may

convene extraordinary General Meetings. In addition

to the rights of the Supervisory Board and the

Management Board, shareholders representing alone

or in aggregate at least one-tenth of the issued and

outstanding share capital may, pursuant to the Dutch

Civil Code, request that a General Meeting be

convened. If no General Meeting has been held

within eight weeks of the shareholders making such

request, the shareholders making such request may,

upon their request, be authorised by the district court

in summary proceedings to convene a General

Meeting.

The convocation of the General Meeting must be

published through an announcement by electronic

means. Notice of a General Meeting must be given by

at least such number of days prior to the day of the

meeting as required by Dutch law, which is currently

42 days. The notice convening any General Meeting

must include, among other items, the subjects to be

dealt with, the venue and time of the General

Meeting, the requirements for admittance to the

General Meeting, the address of the Company’s

website and such other information as may be

required by Dutch law. The agenda for the annual

General Meeting must contain certain subjects,

including, among other things, the adoption of the

annual accounts, the discussion of any substantial

change in the corporate governance structure of the

Company and the allocation of the results, insofar as

these are at the disposal of the General Meeting. In

addition, the agenda must include such items as have

been included therein by the Management Board, the

Supervisory Board or shareholders (with due

observance of Dutch law as described below).

Shareholders holding at least 3% of the Company’s

issued and outstanding share capital may request by

a motivated request that an item is added to the

agenda. Such requests must be made in writing, must

either be substantiated or include a proposal for a

resolution, and must be received by the Company at

least 60 days before the day of the General Meeting.

No resolutions may be adopted on items other than

those that have been included in the agenda (unless

the resolution would be adopted unanimously during

a meeting where the entire issued capital of the

Company is present or represented).

Shareholders who, individually or with other

shareholders, hold Ordinary Shares that represent at

least 3% (three percent) of the issued and

outstanding share capital may request the Company

to disseminate information that is prepared by them

in connection with an agenda item for a General

Meeting, provided that the Company has done a so-

called ‘‘identification round’’ in accordance with the

provisions of the Securities (Bank Giro Transactions)

Act. The Company can only refuse disseminating such

information, if received less than seven business days

prior to the day of the General Meeting, if the

information gives or could give an incorrect or

misleading signal or if, in light of the nature of the

information, the Company cannot reasonably be

required to disseminate it.

More information about the authority of the General

Meeting of Shareholders and the Articles of

Association can be found on Alfen’s website.

Extra ordinary General Meeting of

Shareholders

An Extra Ordinary General Meeting of Shareholders

was announced on 7 October 2022 to be held

electronically at the head offices of Alfen N.V.,

Hefbrugweg 28 in Almere, the Netherlands on

Monday 21 November 2022 (the “EGM”).

For the EGM, in accordance with the Temporary Act

COVID-19 Justice and Safety, shareholders were only

able to attend the meeting electronically through an

audio webcast, which also provided the opportunity

to ask questions. Votes for the meeting could only be

cast by proxy to the Notary. During the Extra Ordinary

Meeting, only the following agenda item was

scheduled, which was put on the agenda for voting:

1.Change to the Supervisory Board: Proposal to

appoint Ms. Jeanine van der Vlist as member of

the Supervisory Board.

During the EGM, the Shareholders voted to appoint

Ms. Van der Vlist for a period of four years and 5

months, ending at the Annual General Meeting of

Shareholders in 2027.

Special provisions relating to shares

Unless indicated otherwise, there are no restrictions

on the transfer of shares, the exercise of voting rights

or the term for exercising those rights, and there are

no special controlling rights attached to shares.

Diversity

On 1 January 2022, the Diversity Act entered into

force. In accordance with the Diversity Act Alfen has

set an appropriate and ambitious target figure for a

balanced number of men and women on the

Management Board, the Supervisory Board and the

sub-top. For more details we refer to the chapter on

Corporate Sustainability Reporting.

The Management Board and the Supervisory Board

collectively are considered diverse and balanced from

an educational background and work experience. The

Management Board and the Supervisory Board

consist of people with a good mix of sector

knowledge, financial expertise and management

capabilities. Annually, the Supervisory Board assesses

the composition of the Supervisory Board and of the

Management Board. The Supervisory Board agrees to

measurable objectives for achieving diversity on the

Boards and on the sub-top. The Supervisory Board

comprises of two men and two women. The

Management Board comprises of two men and one

woman. Therefore the Supervisory Board and the

Management Board meet the quota as previously

prescribed by Section 2:166 of the Dutch Civil Code.

In a broader sense, Alfen has a very diverse group of

employees with men and women from different

backgrounds, cultures and religions.

Dutch Corporate Governance Code

The applicable Dutch Corporate Governance Code

entered into force on, and applies to financial years

starting on or after, 1 January 2017, and finds its

statutory basis in Book 2 of the Dutch Civil Code (the

‘‘Dutch Corporate Governance Code’’). The new

Dutch Corporate Governance Code which has been

released on 20 December 2022 is not applicable for

the financial year 2022. However, the Company will

take good notice of the new Corporate Governance

Code for the next financial year. The Dutch Corporate

Governance Code applies to Alfen as Alfen has its

registered office in the Netherlands and its Ordinary

Shares are listed on Euronext Amsterdam.

The Dutch Corporate Governance Code is based on

the ‘comply or explain’ principle. Accordingly,

companies are required to disclose in their

management report whether or not they are

complying with the various best practice principles of

the Dutch Corporate Governance Code that are

addressed to the Management Board or, if applicable,

the Supervisory Board of a company. If a company

deviates from a best practice principle in the Dutch

Corporate Governance Code, the reason for such

deviation must be properly explained in its

management report. No violations of the Corporate

Governance Code were reported in the financial year

2022. If Alfen does not indicate below that the

Company deviates from a certain best practice

principle, the Company complies with the best

practice principle of the Dutch Corporate Governance

Code.

42Alfen - Annual Report 2022

Deviations from the best practice

principles of the Dutch Corporate

Governance Code

The Company acknowledges the importance of good

corporate governance. The Company agrees with the

general approach and with the majority of the

provisions of the Dutch Corporate Governance Code.

However, considering Alfen’s interests and the

interest of its stakeholders, the Company deviates

from two best practice principles, which are the

following:

•The Company is not in compliance with the best

practice principle 2.3.3 to appoint an audit,

remuneration, selection and appointment

committee. Under the bylaws of the Supervisory

Board, the Supervisory Board may, and will do

so when it consists of four or more members. No

such committees have been established due to

the fact that the Supervisory Board consisted of

three members for more than 10 months and of

four members for the last almost 2 months.

Instead of the committees, the following two

members of the Supervisory Board have a

specific focus area: Willem Ackermans - Finance

and audit, Eline Oudenbroek - Remuneration,

selection and appointments;

•The Company is not in compliance with best

practice principle 5.3.1-5.3.3 that requires the

external auditor and the audit committee to be

involved in drawing up the work schedule of the

internal auditor. The current size of the

Company does not justify the appointment of an

internal auditor. In 2022 the Supervisory Board

has reassessed the need for an internal auditor.

Based on this review, the Supervisory Board has

recommended the Management Board that the

current size of the Company still does not justify

the appointment of an internal auditor.

Tax practices

Alfen regards taxation as part of its social

responsibility and follows the principle of responsible

tax practices whereby the interests of all stakeholders

(including customers, shareholders, local

governments and communities in the countries in

which Alfen operates) are taken into consideration.

We strive to comply with the letter and spirit of

applicable laws, are guided by relevant international

standards and do not use ‘artificial’ structures in tax

haven jurisdictions to avoid taxes. The design of the

Alfen organization is based on operational

considerations, not on taxation. This means that taxes

are paid where factual economic activities are

executed and that transactions should have a

business rationale.

Takeover Directive (Article 10)

In the context of the EU Takeover Directive (Article

10) Decree, the following notifications must be given

insofar as they are not included in this Annual Report.

Capital structure

The Company’s share capital at 31 December 2022 of

€2,175,000 is divided into 21,750,000 ordinary shares,

fully paid-up, with a par value of €0.1 each (the

“Ordinary Shares”). 54,643 treasury shares are held

by the Company. The remainder of the Ordinary

Shares: 21,695,357 are outstanding. Each share

confers the right to cast one vote.

Limitations on the transfer of shares

Alfen has not imposed any limitations on the transfer

of its shares and therefore there are no outstanding

or potential protection measures against a takeover

of control of the company. No depositary receipts for

shares have been issued with the cooperation of the

company.

Substantial holdings

See ‘Shareholders’.

Material subsidiaries of Alfen

Special controlling rights

No special controlling rights are attached to the

shares in the company.

Long term incentive plan

The Management Board recognized the importance

of its key employees to the future success of the

Company. Therefore, on 4 October 2018, a long-term

incentive plan (‘LTIP’) was introduced for a number of

designated employees within the group of the

Company. The fourth grant under this plan was made

at 1 January 2022 and comprise of a total of 9,747

Ordinary Shares for no consideration.

The conditional rights to acquire existing Ordinary

Shares granted will be exercisable in exchange for

Ordinary Shares on the day that is four years after the

grant date, on the condition that the relevant

employee of Alfen continues to be employed by the

Company on this date (subject to certain

arrangements for exceptional circumstances, such as

death of the employee). Besides the aforementioned

service vesting condition no other vesting conditions

are applicable for the LTIP.

None of the outstanding shares related to the LTIP

are exercisable at 31 December 2022.

43Alfen - Annual Report 2022

Limitations on voting rights

Each share confers the right to cast one vote. The

voting rights attached to the shares in the company

are not restricted, and neither are the terms in which

voting rights may be exercised restricted.

Agreements on limitations on the transfer

of shares

Eligible and selected managers of the Company have

been given the opportunity to participate indirectly in

the share capital of the Company. These indirect

share investments were held via a foundation

(“Stichting Administratiekantoor”), which has issued

Depositary Receipts (“DRs”) to participating

managers. This management participation plan is

classified as an equity-settled share-based payment

arrangement.

As of the IPO date these DRs have been cancelled as a

result of which these participating managers

ultimately received Ordinary Shares and cash. These

Ordinary Shares of the key managers and certain

members of senior management of the Company

were subject to lock-up restrictions. The Ordinary

Shares transferred to the key managers and certain

members of senior management of the Company are

released from the lock-up restrictions as follows: 60%

of the Ordinary Shares have been unconditionally

released from the lock-up restrictions on the day that

was one year after the first day of trading after the

IPO, 20% of the Ordinary Shares have been

unconditionally released from the lock-up restrictions

on the day that is two years after the first day of

trading after the IPO, and the final 20% of the

Ordinary Shares were unconditionally released from

the lock-up restrictions on the day that was three

years after the first day of trading after the IPO. As

such no lock-up restrictions existed anymore per 31

December 2021.

Appointment and dismissal of Management

Board members and Supervisory Directors

and amendment of the Articles of

Association

The General Meeting appoints the Managing

Directors. A resolution of the General Meeting to

appoint a Managing Director can be adopted by a

majority of the votes cast, without a quorum being

required. The Articles of Association provide that a

Managing Director may be suspended or dismissed by

the General Meeting at any time. A resolution of the

General Meeting to suspend or dismiss a Managing

Director can be adopted by a majority of the votes

cast, without a quorum being required.

The Articles of Association provide that the number

of Managing Directors is determined by the

Supervisory Board after consultation with the

Management Board, but there will be at least two

Managing Directors. The Supervisory Board has

appointed one of the Managing Directors as CEO

(chief executive officer). In addition, the Supervisory

Board has appointed one of the Managing Directors

as CFO (chief financial officer) to specifically oversee

the Company’s financial affairs and one of the

Managing Directors as CCO (Chief Commercial

Officer) to specifically oversee the Company’s

commercial affairs.

The Supervisory Board Rules provide that the

Supervisory Board must consist of a minimum of

three members. The exact number of Supervisory

Directors shall be determined by the Supervisory

Board. The Supervisory Board currently consists of

four members. Only natural persons may be

appointed as Supervisory Directors.

In accordance with the Articles of Association, the

Supervisory Board has prepared a profile for its size

and composition, taking account the nature and

activities of the business, the desired expertise and

background of the Supervisory Directors, the desired

mixed composition and the size of the Supervisory

Board and the independence of the Supervisory

Directors. The Supervisory Board profile can be found

on the Alfen website and in this profile independence

is indicated as an important factor in chapter 2 of the

Supervisory Board profile. The Company’s diversity

policy is also taken into account.

The General Meeting appoints the Supervisory

Directors. A resolution of the General Meeting to

appoint a Supervisory Director can be adopted by a

majority of the votes cast. A Supervisory Director may

be suspended or dismissed by the General Meeting at

any time.

The General Meeting may pass a resolution to amend

the Articles of Association with an absolute majority

of the votes cast, but only (i) on a proposal of the

Management Board that has been approved by the

Supervisory Board or (ii) in the absence of such a

proposal, with the explicit approval of the

Management Board and the Supervisory Board or (iii)

on the proposal of a Shareholder, or Shareholders

acting jointly provided that they belong to the same

group, for as long as they solely or jointly represent at

least 30% of the issued capital of the Company. Any

such proposal must be stated in the notice of the

General Meeting.

In the event of a proposal to the General Meeting to

amend the Articles of Association, a copy of such

proposal containing the verbatim text of the

proposed amendment will be deposited at the

Company’s office, for inspection by shareholders and

other persons holding meeting rights, until the end of

the meeting. Furthermore, a copy of the proposal will

be made available free of charge to shareholders and

other persons holding meeting rights from the day it

was deposited until the day of the meeting. A

resolution by the General Meeting to amend the

Articles of Association requires an absolute majority

of the votes cast. A resolution of the General Meeting

to amend the Articles of Association that has the

effect of reducing the rights attributable to holders of

shares of a particular class, is subject to approval of

the meeting of holders of shares.

The Management Board’s powers especially

to issue shares

On the 7th of April, 2022 the General Meeting of

Shareholders granted the Management Board the

authority to, subject to the prior approval of the

Supervisory Board, (i) issue shares or grant rights to

subscribe for shares and/ or (ii) cause the Company to

acquire its own shares (including shares issued as

stock dividend) both for a period of 18 months

following the Annual Meeting. The Management

Board did not use this authority in 2022.

Significant agreements and changes in the

control of the company

Alfen’s credit facility agreement, contains events of

default customary for this type of facility, including

change of control events.

Redundancy agreements in the event of a

public takeover bid

Alfen has not concluded any agreements with a

Management Board member or employee that

provides for any severance pay in the case of a

termination of employment in connection with a

public bid within the meaning of Article 5:70 of the

Financial Supervision Act.

Shareholders

As of 31 December 2022, there are 21,750,000 shares

outstanding in the market. Pursuant to the Dutch

Disclosure of Major Holdings in Listed Companies Act

(Wet Melding Zeggenschap, or WMZ), interests

(whether it be a capital interest or a voting interest)

in the issued capital of Alfen of 3% or more are

required to be disclosed to the Netherlands Authority

for the Financial Markets (AFM). At year-end 2022,

the following shareholders were known to hold an

interests of at least 3% directly in the Company on 31

December 2022 as per AFM disclosures:


Shareholder	Capital Interest	Voting Interest	Notification date
Capital Research & Management Company	—%	6.88%	2 March 2022
Mirova	3.94%	3.94%	18 July 2019
Schroders Plc	—%	3.18%	23 February 2021
Smallcap World Fund, Inc.	4.86%	4.86%	9 November 2022
Goldman Sachs Group Inc.	4.54%	4.54%	11 April 2022

Dividend policy

The dividend policy is to reserve all profits until the

policy is revised. Alfen does not pay dividends to its

Shareholders at this moment in time.

Financial calendar


Date	Event
15 February 2023	Publication full year results 2022
6 April 2023	Annual General Meeting of Shareholders
17 May 2023	Q1 2023 trading update
23 August 2023	Publication half-year results 2023
8 November 2023	Q3 2023 trading update

44Alfen - Annual Report 2022

The following closed periods are applicable for

transactions directly or indirectly, relating to, shares

and other financial instruments in Alfen:

•From 15th of January until 15th of February 2023

•From 17th of April until 17th of May 2023

•From 23th of July until 23th of August 2023

•From 8th of October until 8th of November 2023

In accordance with best practice provision 1.4.3. of the

Corporate Governance Code, the Management Board

states to the best of its knowledge that:

•The report provides sufficient insight into any

possible shortcomings in the effectiveness of the

internal risk management and control systems;

•Those systems provide reasonable assurance that

the financial report does not contain any material

misstatements;

•In the current situation, it is appropriate for the

financial report to be prepared on a going concern

basis; and

•The report states those material risks and

uncertainties that are relevant to the expectation of

the company’s continuity for the period of twelve

months after the preparation of the report.

As required by the relevant statutory provisions, the

Management Board hereby declares that to the best of its

knowledge:

•The Report of the Management Board provides a

true and fair view of the position of Alfen and its

subsidiaries included in the consolidation on the

reporting date and of the course of their affairs

during the financial year. The Report of the

Management Board provides information on any

material risks to which Alfen is exposed;

•The Consolidated Financial Statements as at and for

the year ended 31 December 2022, give a true and

fair view of the assets, liabilities, financial position

and result of the financial year of Alfen and its

subsidiaries included in the consolidation as a whole.

Almere, 14 February 2023

Board of Directors

Marco Roeleveld (CEO),

Jeroen van Rossen (CFO),

Michelle Lesh (CCO)

45Alfen - Annual Report 2022

46Alfen - Annual Report 2022

Report of the

Supervisory Board

___

2022 in summary

This year Alfen N.V. celebrated its 85th anniversary.

Again the Company achieved stable growth in the

substation business, spectacular growth in EV

charging and a very promising pipeline in energy

storage. Challenging sourcing issues for various key

components have been addressed through a

combination of creativity, flexibility and proactive

pre-stocking measurements and organising back up

suppliers.

The number of employees has grown substantially

with (a) focus on retaining current employees, (b)

intensive recruitment and (c) an uplift of the Alfen

academy. Specific attention is being paid to foster the

well being of personnel by developing a work at home

policy with flexibility and other skills to support their

health. Financially the employees were supported

with additional travel cost and with a one-time

payment to respond to the rising energy bills.

Business wise the EV Charging business unit and the

energy storage business accelerated their

international roll out with attention for the hiring of

qualified local staff and local governance. Important

steps have been taken by expanding the capacity in

the Almere premises to anticipate on the ongoing

growth.

For 2022, the Supervisory Board had selected 4 areas

of special attention with the following status:

•Recruitment and retention of key personnel

Recruitment and retention of key personnel

remained a key priority in the Company, which

translates to a dedicated, successful recruitment

team, a higher score of the Alfen Academy and a

lot of attention to a low percentage of regretted

losses. Additional actions in progress are (i) a

further improvement of the on-boarding program,

(ii) a further extension of the Alfen Academy and

(iii) the introduction of an employee satisfaction

survey to filter the relevant improvement areas.

•Monitoring the commercial expansion of EV

Charging and Energy Storage in our key markets

In 2022 the international sales generated more

than 50% of the Company’s revenues. The

Management Board is setting up local commercial

hubs in selected key markets, addressing the right

skills and knowledge of local markets and local

culture. The internationalisation is facilitated by

the right IT infrastructure and the required

governance. The Company’s knowledge and

flexibility to address the complexity of the

accelerated cross border expansion is growing.

47Alfen - Annual Report 2022

•Monitoring the step up in Energy Storage

Much progress has been made in preparing the

internal organisation for a step up in the energy

storage market. Choices have been made about

how to address key markets while the business

has realised a certain degree of standardisation

and modularisation. Engineering and

development skills have been extended and

improved. Especially in the 2nd half of the year, a

number of pending projects could be transferred

successfully in deals leading to a substantial

increase in revenues in 2022 and a promising

order book for 2023.

•Organisational development

With management, we discussed the organisation

going forward in the light of the expected

development of the three business segments and

their further internationalisation. Strategically this

concerns among others the relation between the

Management board and the business units and

the level of centralisation of certain functions.

Other elements are the personnel development of

employees and the future role of the Alfen

Academy as possible enabler.

For 2023, the Supervisory Board will focus its

attention on the following topics:

•International growth

With the fast growth and further

internationalisation, a skilled and flexible

workforce is a key factor. To attract and keep key

employees, Alfen needs to continue to be the

employer of choice in the sector, reflected in

elements like company culture, development

opportunities, working atmosphere and a

competitive remuneration package.

•ESG

In 2023 we will follow the further implementation

of a workable ESG policy and agenda with long

term KPI’s and an effective monitoring vehicle. We

will also discuss with management how, in a

practical way, the Company can address the

challenges of new EU regulations regarding

substantial financial disclosure and EU taxonomy.

•Expansion plans

We will monitor the extensive expansion plan for

the Almere location and the organisational and

financial consequences.

•Employee satisfaction survey

We will discuss the outcome of the employee

engagement survey and discuss with management

if and where follow up actions need to be taken.

Responsibility and composition

The Supervisory Board provides oversight, evaluates

progress and performance, maintains a sound and

transparent system of checks and balances and

advises the Management Board, when appropriate.

The focus is on long-term value creation to the best

interest of all stakeholders of the Company. In

November 2022, the Supervisory Board has been

extended with a fourth member being Jeanine van

der Vlist. With her competences and experience we

consider Jeanine as a very valuable contribution to

the Supervisory Board. We have started the search

for the succession of Eline Oudenbroek, who decided

not to extend her position as Supervisory Board

member for a next term because of lack of time and a

challenging agenda.


Name	Age	Position	Member since	End of current term
Mr Henk ten Hove	70	Chairman	22 March 2018	AGM of 2026
Ms Eline Oudenbroek	53	Member	6 July 2020	AGM of 2023
Mr Willem Ackermans	67	Member	6 July 2020	AGM of 2024
Ms Jeanine van der Vlist	58	Member	21 November 2022	AGM of 2027

The Supervisory Board members operate

independently from (a) each other, (b) the

Management Board and (c) any other stakeholders.

Each of the Supervisory Board members has the

necessary expertise, experience and background to

perform his or her tasks and responsibilities.

All four members of the Supervisory Board are

independent within the meaning of the Dutch

Corporate Governance Code.

Meetings and Attendance

In 2022, the Supervisory Board held 7 regular

meetings, all with an attendance of 100%. The agenda

of the meetings covered standard items like financial

and operational performance, personnel and

organisation, governance and compliance and risks

associated with operations. During every meeting one

or two key managers were invited to update the

Supervisory Board about plans and progress of their

responsibility.

This year, we covered the BU EV Charging, the R&D

Department, an IT Update and a strategic discussion

on the key managers. One of the 7 meetings

concerned the budget for 2023, where the

opportunities and challenges for the upcoming year

were discussed. A special strategy meeting was held

in July this year.

In addition to the regular meetings, the Chairman

holds monthly meetings with the CEO and once a year

with key managers reporting to the Management

Board. Willem Ackermans, as finance and control

specialist and Eline Oudenbroek with a focus on

remuneration, selection and appointments, meet

with the CFO regarding their focus areas on a regular

basis. Willem Ackermans meets with the CCO

regularly to discuss for all three business units: supply

chain challenges, strategy and marketing with a focus

on opportunities with possible customers, products,

growth opportunities, marketing challenges and

opportunities.

Evaluation Supervisory Board and the

Management Board

Every year an evaluation of the Supervisory Board

takes place, whereby once per three years such

evaluation is organised by an external advisor. This

year the evaluation of the Supervisory Board was

done with a self-evaluation questionnaire. The main

takeaways are the following:

The frequency of the Supervisory Board meetings,

including the pre-meetings without the Management

Board, was considered sufficient. The Supervisory

Board is happy with the content of the meetings and

the input of the Management Board. The regular

contributions and presentations by other key

managers are appreciated as well. The dialogue with

the Management Board, in and outside the meetings,

is perceived as open, transparent and constructive.

The result of the evaluation of this year is that with a

fourth member in the Supervisory Board, it is possible

to start the process to establish an audit and a

selection and remuneration committee.

The evaluation and performance of the Management

Board took place on an individual basis. We discussed

last year’s achievements and observations as well as

goals and improvements for 2023, including the

relevant KPI’s and key attention points.

Audit Committee

Under the bylaws of the Supervisory Board, the

Supervisory Board may appoint an audit committee

when it consists of four or more members. For 2022,

no audit committee existed yet due to the fact that

the Supervisory Board only consisted of three

members for almost 11 of the 12 months. However,

in the absence of an audit committee, Willem

Ackermans has audit and finance as his focus areas

and he was involved in the discussions with the

external auditor on the audit plan for financial year

2022 and the Management letter over 2022. On

behalf of the Supervisory Board Willem Ackermans is

also paying special attention to risk management and

other financial and IT items.

Selection and Remuneration

Committees

Under the bylaws of the Supervisory Board, the

Supervisory Board may appoint a selection and

remuneration committee. For 2022, no selection and

remuneration committee existed yet due to the fact

that the Supervisory Board only consisted of three

members for almost 11 of the 12 months. In the

absence of the committee, Eline Oudenbroek has a

specific focus on selection, remuneration and other

HR matters. In 2022, Eline Oudenbroek paid special

attention to the employee engagement survey and

was intensively involved in the organisational and

personnel development of employees, remuneration

of the Management Board and Supervisory Board and

target setting for the STIP and LTIP.

2023 Committees

With the appointment of the 4th Supervisory Board

member, the Supervisory Board will propose to

establish an HR Selection & Remuneration Committee

and an Audit Committee during the Annual General

Shareholders meeting of 2023.

48Alfen - Annual Report 2022

Remuneration report

During the annual general meeting of shareholders of

the Company on 7 April 2022 the Shareholders

adopted (i) the Company’s amended remuneration

policy for the Management Board with effect as from

1 January 2022 (the Remuneration Policy) and (ii) the

long-term incentive plan for the Management Board.

In conformity with paragraph 3.4.2 of the Dutch

Corporate Governance Code, the essential elements

of the agreements between the Company and the

Managing Directors are summarized below and the

amounts for 2022 are specified.

In 2022 the Company was able to perform in line with

its financial guidance and able to realise its planned

expansion program. The Supervisory Board will stick

to the agreed Short Term and Long Term bonus

schemes and approves the cash bonus for 2022,

which will result as outcome of the calculation of the

KPI’s.

The Remuneration Policy and business strategy have

been aligned through the creation of specific short

and long term targets that link each Managing

Director’s variable pay to the success of the

Company. As such, both the short term and long term

incentive plans are linked to the business strategy and

accordingly to longer term value creation and

sustainability of the Company. Reference is made to

the STIP and LTIP paragraphs below on target setting.

Variable remuneration is higher when targets are

exceeded and no variable remuneration is payable if

threshold targets are not met. This helps to ensure

the alignment of the Managing Directors’ interests

with that of the Company's stakeholders and create a

true pay-for-performance culture.

Before setting proposed targets the Supervisory

Board carried out scenario analyses of the possible

financial outcomes of meeting target levels as well as

maximum performance levels and how they may

affect the total remuneration of the Management

Board.

Fixed remuneration

In accordance with the Remuneration policy, the fixed

gross remuneration for the Management Board is as

follows:


Board Member	Annual base fee as per 1 January 2022
Marco Roeleveld - CEO	€392,000
Jeroen van Rossen - CFO	€332,000
Michelle Lesh - CCO	€294,000

Pensions and other benefits

The Managing Directors will participate in the pension

scheme of the industry wide pension fund for

Metalektro, whereby the pensionable compensation

is capped in line with the Dutch fiscal regime. Other

benefits are a company car and participation in a

collective health insurance plan. The Company has

also arranged a Director liability insurance for the

members of the Management Board.

Notice period

The management agreements for the CEO and CFO

are entered into for an indefinite term. The

management agreement for the CCO is up and until

the AGM of 2026. The notice period for the Managing

Directors is three months and for Alfen N.V. six

months.

Severance payment

In line with current employment arrangements, the

maximum severance payment, applicable to the

Management Board members, is one year base pay in

the proceeding financial year. No severance payment

will be paid if the agreement is terminated earlier at

the request or in the event of a seriously negligent

behavior of the Director. No such severance

payments were made in 2022.

The variable remuneration

The variable remuneration consists of a short-term

incentive (“STI”) and a long-term incentive (“LTI”).

STI Plan Summary

•The STI allows Managing Directors to receive

annual awards in cash;

•The ‘at target’ amount of the STI is 30% of the

annual base fee with a bandwidth of 20-40%,

whereby the performance conditions, weighting

and bonus percentages for 2022 are set out

below;

•A one-year performance period applies.


STI performance KPI’s for the CEO - Marco Roeleveld		Weight	Realisation	Net Bonus
Financial performance conditions	Revenues and other income	32.5%	40.00%	13.00%
	Adjusted EBITDA	32.5%	40.00%	13.00%
Non-financial performance conditions	New product introductions	17.5%	30.00%	5.25%
	Footprint reduction	17.5%	40.00%	7.00%
STI 2022		100%		38.25%

The revenues and other income in 2022 amount to

€439.9 million. The on target bonus was set on

€360.6 million and the maximum bonus was set on

€ 396.7 million thus resulting in a bonus of 40.00%.

The adjusted EBITDA in 2022 amounts to €79.4

million. The on target bonus was set on €54.6 million

and the maximum bonus on €65.5 million thus

resulting in a bonus of 40.00%. The new product

introductions are evaluated by the Supervisory Board

as an on target performance, resulting in a bonus of

30.00%. With regard to the footprint reduction the

maximum bonus of 40.00% is achieved.

Based on the realised STI bonus percentage

multiplied by the fixed remuneration the cash bonus

for 2022 amounts to €150 thousand (2021: €40

thousand).


STI performance KPI’s for the CFO - Jeroen van Rossen		Weight	Realisation	Net Bonus
Financial performance conditions	Revenues and other income	32.5%	40.00%	13.00%
	Adjusted EBITDA	32.5%	40.00%	13.00%
Non-financial performance conditions	Procurement	17.5%	40.00%	7.00%
	Footprint reduction	17.5%	40.00%	7.00%
STI 2022		100%		40.00%

The revenues and other income in 2022 amount to

€439.9 million. The on target bonus was set on

€360.6 million and the maximum bonus was set on

€396.7 million thus resulting in a bonus of 40.00%.

The adjusted EBITDA in 2022 amounts to €79.4

million. The on target bonus was set on €54.6 million

and the maximum bonus on €65.5 million thus

resulting in a bonus of 40.00%.

With regard to procurement as well as to the

footprint reduction for both items the maximum

bonus of 40.00% is achieved.

Based on the realised STI bonus percentage

multiplied by the fixed remuneration the cash bonus

for 2022 amounts to €133 thousand (2021: €31

thousand).

49Alfen - Annual Report 2022


STI performance KPI’s for the CCO - Michelle Lesh		Weight	Realisation	Net Bonus
Financial performance conditions	Revenues and other income	32.5%	40.00%	13.00%
	Adjusted EBITDA	32.5%	40.00%	13.00%
Non-financial performance conditions	Internationalisation	17.5%	40.00%	7.00%
	Footprint reduction	17.5%	40.00%	7.00%
STI 2022		100%		40.00%

The revenues and other income in 2022 amount to

€439.9 million. The on target bonus was set on

€360.6 million and the maximum bonus was set on

€396.7 million thus resulting in a bonus of 40.00%.

The adjusted EBITDA in 2022 amounts to €79.4

million. The on target bonus was set on €54.6 million

and the maximum bonus on €65.5 million thus

resulting in a bonus of 40.00%. Regarding the

internationalisation item the revenue outside of the

Netherlands in 2022 amounts to €222.7 million. The

on target bonus was set on €144.0 million and the

maximum bonus on €154.0 million thus resulting in a

bonus of 40.00%. With regard to the footprint

reduction the maximum bonus of 40.00% is achieved.

Based on the realised STI bonus percentage

multiplied by the fixed remuneration the cash bonus

for 2022 amounts to €118 thousand (2021: €14

thousand, based upon a service period from 1 July

2021 until 31 December 2021).

LTI Plan Summary

•The LTI allows Managing Directors to receive

annual conditional awards of performance shares,

i.e. fully paid ordinary shares in the capital of the

Company;

•The value of the ‘at target’ number of

performance shares is 40% of the annual base fee

at the start of the performance period with a

bandwidth of 30-50% taking into account the

value of a fully paid ordinary share in the capital of

the Company, based on the average closing share

price of the last three trading days of the

preceding year, at the start of the performance

period;

•A three year performance period applies;

•Dependent on the actual achievement of the

performance criteria after the three years

performance period and, subject to continued

engagement, the Managing Directors will be

granted an unconditional award of performance

shares;

•In case the performance shares are

unconditionally granted, an additional holding

period applies for one year and two years for

grants made in 2020-2021 and 2022, respectively.

The following grants, comprising of Ordinary Shares in

the Company, have been made under this plan:


Board Member	Grant date	Number of Awards Granted *	Grant date fair value	Exercise price
CEO - Marco Roeleveld	8 April 2020	7,848	€24.55	Nil
CEO - Marco Roeleveld	29 April 2021	1,752	€68.75	Nil
CEO - Marco Roeleveld	26 April 2022	1,818	€82.54	Nil
CFO - Jeroen van Rossen	8 April 2020	5,935	€24.55	Nil
CFO - Jeroen van Rossen	29 April 2021	1,363	€68.75	Nil
CFO - Jeroen van Rossen	26 April 2022	1,539	€82.54	Nil
CCO Michelle Lesh	22 July 2021	638	€80.25	Nil
CCO Michelle Lesh	26 April 2022	1,363	€82.54	Nil

* At 100% realisation of the applicable performance conditions. The actual number of

Awards that will vest can range between 0% realisation and 125% realisation.

50Alfen - Annual Report 2022


LTI performance KPI’s for the CEO - Marco Roeleveld		Weight	Realisation	Net Bonus
Financial performance conditions	Revenues and other income	32.50%	45.21%	14.69%
	Adjusted EBITDA	32.50%	45.00%	14.62%
Non-financial performance conditions	Internationalisation	11.67%	40.60%	4.74%
	HSE evaluation	11.67%	50.00%	5.84%
	Footprint reduction and CO2 emissions	11.67%	50.00%	5.84%
LTI 2020		100%		45.73%

The revenues and other income in 2022 amount to

€439.9 million. The on target bonus was set on

€393.0 million thus resulting in a bonus of 45.21%.

The adjusted EBITDA percentage in 2022 amounts to

18.0%. The on target bonus was set on 17.0% thus

resulting in a bonus of 45.00%. The revenue outside

of the Netherlands as percentage of the overall

revenue is 50.6%. The on target bonus was set on

50.0% thus resulting in a bonus of 40.60%. The HSE

item is evaluated by the Supervisory Board as an

above target performance, resulting in a bonus of

50.00%. With regard to the footprint reduction the

maximum bonus of 50.00% is achieved.

Based on the realised LTI bonus percentage

multiplied by the on target number of shares of 7,848

the LTI bonus for 2022 amounts to 8,972 shares.


LTI performance KPI’s for the CFO - Jeroen van Rossen		Weight	Realisation	Net Bonus
Financial performance conditions	Revenues and other income	32.50%	45.21%	14.69%
	Adjusted EBITDA	32.50%	45.00%	14.62%
Non-financial performance conditions	Internationalisation	11.67%	40.60%	4.74%
	HSE evaluation	11.67%	50.00%	5.84%
	Footprint reduction and CO2 emissions	11.67%	50.00%	5.84%
LTI 2020		100%		45.73%

The revenues and other income in 2022 amount to

€439.9 million. The on target bonus was set on

€393.0 million thus resulting in a bonus of 45.21%.

The adjusted EBITDA percentage in 2022 amounts to

18.0%. The on target bonus was set on 17.0% thus

resulting in a bonus of 45.00%. The revenue outside

of the Netherlands as percentage of the overall

revenue is 50.6%. The on target bonus was set on

50.0% thus resulting in a bonus of 40.60%. The HSE

item is evaluated by the Supervisory Board as an

above target performance, resulting in a bonus of

50.00%. With regard to the footprint reduction the

maximum bonus of 50.00% is achieved.

Based on the realised LTI bonus percentage

multiplied by the on target number of shares of 5,935

the LTI bonus for 2022 amounts to 6,785 shares.

The LTI grants for the financial year 2022 and 2021

are subject to the following selection of performance

conditions as determined by the Supervisory Board:


LTI performance KPI’s for the Management Board (i.e. under the long-term incentive plan)		Weight
Financial performance conditions	Revenues and other income	32,50%
	Adjusted EBITDA percentage	32,50%
Non-financial performance conditions	Internationalisation	11,67%
	HSE evaluation	11,67%
	Footprint reduction and CO2 emissions	11,67%

Please note that the realisation of the LTI grant of

2022 and 2021 will be based on the outcome of

financial year 2024 and 2023, respectively, and thus

cannot be determined yet.

Total remuneration

The total remuneration of the Management Board,

split by component and presented in relative

proportion between fixed and variable remuneration

is as follows:


	M. Roeleveld - CEO		J. van Rossen - CFO		M. Lesh - CCO
In EUR '000	2022	2021	2022	2021	2022	2021
Salaries and wages	392	356	332	277	294	130
Short-term incentive plan	150	40	133	31	118	46
Social security contributions	16	18	14	16	13	6
Pension contributions (DC)	23	21	18	17	16	8
Share-based payments	211	88	165	67	56	76
Other	25	34	13	27	13	3
Total	817	557	675	435	510	269

Percentage of variable remuneration	44%	23%	44%	23%	34%	45%

51Alfen - Annual Report 2022

Internal pay ratio


In EUR '000	2022	2021*
Management Board compensation
Salaries and wages	1,018	763
Short-term incentive plan	401	117
Social security contributions	43	40
Pension contributions (DC)	57	46
Share-based payments	432	231
Total	1,951	1,197

Average number of FTE's	—	—
Average compensation	650	479

Employee compensation
Salaries and wages	44,356	33,658
Social security contributions	6,951	4,900
Pension contributions (DC)	4,603	3,492
Share-based payments	563	410
Total	56,473	42,460

Average number of FTE's	784	634
Average compensation	72	67

Internal pay ratio	9.0	7.1

* 2021 adjusted for comparison purposes in alignment with the appointment of Michelle

Lesh (CCO) as member of the Board of Directors.

The Remuneration policy for the Management Board

takes into account the pay ratio within the

organisation. The Alfen internal pay ratio is calculated

by dividing the average total Management Board

compensation by the average employee

compensation. The average employee compensation

is based on the total personnel cost (defined as

salaries and wages, social security contributions,

pension contributions and share-based payment

costs) and the average number of FTE’s excluding the

Management Board (see also Note 9, Note 11 and

Note 15 of the Consolidated Financial Statements)1.

The internal pay ratio increased from 7.1 in 2021 to

9.0 in 2022 as a result of the revised remuneration

policy for the Management Board as adopted in the

AGM of April 2022. This effect is further amplified by

above target performance for LTI 2020 and STI 2022.

5-year comparison


(in EUR '000)	2022		2021		2020		2019		2018
	Actual	△ (%)	Actual	△ (%)	Actual	△ (%)	Actual	△ (%)	Actual	△ (%)
Revenue and other income	439,876	76%	249,679	32%	189,010	32%	143,169	41%	101,893	n/a
Adjusted EBITDA *	79,370	115%	36,845	51%	24,374	68%	14,525	301%	3,623	n/a

Average Management Board compensation **	650	36%	479	23%	388	44%	269	3%	262	n/a
Average employee compensation **	72	7%	67	5%	64	3%	62	15%	54	n/a

* Adjusted EBITDA in 2018 is excluding IFRS 16 as this standard was not yet adopted by

the Company.

** 2021 adjusted for comparison purposes in alignment with the appointment of Michelle

Lesh (CCO) as member of the Board of Directors.

As Alfen was listed on 22 March 2018 the 5-year

comparison of average compensation and business

performance started in 2018. The business

performance of Alfen is related to the strategy of

profitable growth. The suitable criteria to measure

the business performance are defined as growth in

revenue and other income as well as growth in

adjusted EBITDA.

Benchmark analysis remuneration policy

In 2021 a benchmark analysis was performed by an

external agency on the remuneration policy for the

Management Board. This resulted in an adjusted

remuneration policy which was adopted by the

Annual General Meeting on 7 April 2022.

Remuneration information for the

Supervisory Board

The remuneration of the Supervisory Board is not

dependent on the company’s results. The members

will not receive ordinary shares or rights to ordinary

shares as remuneration.

The total remuneration of the members of the

Supervisory Board is shown below:


In EUR '000	2022	2021
H. ten Hove	50	50
W.W.M. Ackermans	40	40
E.M. Oudenbroek	40	40
J. van der Vlist - Date of entry 21 November 2022	4	—
Total	134	130

No options have been awarded to the Supervisory

Board, nor any loans, advances or guarantees.

52Alfen - Annual Report 2022

1 In light of transparency and clarity, Alfen applies a methodology to

calculate the internal pay ratio that is IFRS-driven and thus is linked to

Alfen’s Notes to the Consolidated Financial Statements

Internal audit function

Alfen does not have an internal audit function. The

need for an internal audit function is assessed on a

yearly basis by the Supervisory Board. For 2022, the

Supervisory Board concluded that the size of the

company and the combination of a finance and

control department with accounting and audit

knowledge, are presently covering the requirements

sufficiently. However, Willem Ackermans paid special

attention to internal audit and was involved with the

Management letter over 2022. On behalf of the

Supervisory Board he is also paying special attention

to risk management and other financial and IT items.

Financial statements and auditor’s

opinion

The financial statements 2022, included in this Annual

report, have been audited by PwC who have given

their unqualified opinion. They have discussed their

audit and conclusions in detail with the Supervisory

Board.

As a result, the Supervisory Board is of the opinion

that the financial statements meet all the necessary

requirements for transparency and correctness.

Therefore the Supervisory Board will recommend to

the Annual General Meeting of Shareholders, to be

held on 6 April 2023, to approve the financial

statements.

Related Party Transactions

assessment

The transactions which were carried out with related

parties are set out in Note 30 in the Consolidated

Financial Statements. During Supervisory Board

meetings, the Supervisory Board periodically assesses

if these Related Party Transactions are concluded in

the ordinary course of business and on normal

market conditions. The conclusion of the Supervisory

Board is that the Related Party Transactions are all

concluded at arm’s length in the ordinary course of

business.

Result appropriation

Over 2022 Alfen realised a profit of € 53.0 million. The

proposal to the Annual General Meeting is to

recognise this profit as retained earnings. The

members of the Supervisory Board have signed the

financial statements to comply with their statutory

obligation pursuant to article 2:101, paragraph 2 of

the Dutch Civil Code.

In summary

The year 2022 was again a very challenging but also

memorable year for our company. Challenging as

management and employees, despite ongoing

COVID-19 restrictions and laborious supply chain

challenges, were able to successfully progress on

realising its ambitions. Memorable, since in the past

year employees and management more than

succeeded in shaping the strong growth of the

organisation and people in a responsible and

balanced manner. At the same time, this organisation

has been able to maintain and strengthen the trust of

its customers by consistently delivering its products

and services thereby maintaining its characteristic

quality and achieving an outstanding financial result.

The Supervisory Board is impressed by the resilience

and determination of our employees and has been

proud to oversee the many accomplishments of the

Company in the past year. We emphasize again that

our employees are the essential asset to realise our

plans and ambitions. We build on their skills and

creativity with the aim of further advancing Alfen to

take a prominent position in the energy transition

process. We are grateful for their motivation and

flexibility.

Last but not least, we would like to thank our

(growing) international shareholders base.

We very much appreciate the support and increasing

confidence that our shareholders show in Alfen's

strategy and ambitions.

Almere, 14 February 2023

The Supervisory Board

Henk ten Hove (Chairman),

Eline Oudenbroek,

Jeanine van der Vlist

Willem Ackermans

53Alfen - Annual Report 2022

54Alfen - Annual Report 2022

Alfen N.V.

Amsterdam, The Netherlands

Consolidated financial statements

for the year ended 31 December 2022

Consolidated financial statements


Consolidated Statement of Comprehensive Income ....................................................................................	56

Consolidated Statement of Financial Position ..............................................................................................	56

Consolidated Statement of Changes in Equity ..............................................................................................	57

Consolidated Statement of Cash Flows .........................................................................................................	57

Notes to the Consolidated Financial Statements ..........................................................................................	58

55Alfen - Annual Report 2022

Consolidated Statement of Comprehensive Income


In EUR '000	Note	2022	2021
Continuing operations
Revenue	8	439,876	249,679
		439,876	249,679

Operating expenses
Costs of raw materials and consumables		(262,957)	(148,594)
Costs of outsourced work and other external costs		(23,407)	(11,287)
Personnel expenses	9	(53,749)	(40,051)
Amortisation on intangible assets	17	(3,883)	(3,408)
Depreciation on property, plant and equipment	16	(6,275)	(5,105)
Impairment loss on trade receivables and contract assets	3	(563)	50
Other operating costs	10	(21,296)	(13,594)
		(372,130)	(221,989)

Operating profit		67,746	27,690

Finance income	12	3	4
Finance costs	12	(976)	(996)
Finance income (costs) - net		(973)	(992)

Profit (loss) before income tax		66,773	26,698
Income tax expense	13	(13,726)	(5,248)
Profit (loss) for the period		53,047	21,450

Other comprehensive income for the period		—	—
Total comprehensive income for the period		53,047	21,450

Total comprehensive income for the period (attributable to the owners of the Company)		53,047	21,450

Earnings per share for profit attributable to the ordinary equity holders	14
Basic earnings per share		2.45	0.99
Diluted earnings per share		2.43	0.99

Weighted average number of outstanding ordinary shares	14
Basic		21,695,256	21,694,584
Diluted		21,786,054	21,774,962

The above statement of comprehensive income should be read in conjunction with the accompanying notes.

Consolidated Statement of Financial Position


In EUR '000	Note	31 December 2022	31 December 2021
Assets
Non-current assets
Property, plant and equipment	16	33,556	24,955
Intangible assets and goodwill	17	23,533	17,848
Deferred tax assets	18	—	—
Other financial assets	19	1,589	316
Total non-current assets		58,678	43,119

Current assets
Inventories	20	131,815	41,582
Trade and other receivables	22	107,686	62,197
Current tax receivables		54	9
Cash and cash equivalents	23	22,841	47,277
Total current assets		262,396	151,065

Total assets		321,074	194,184

Group equity	24
Share capital		2,175	2,175
Share premium		50,651	50,429
Retained earnings		44,710	22,265
Result for the year		53,047	21,450
Total group equity		150,583	96,319

Liabilities
Non-current liabilities
Borrowings	25	12,793	13,639
Deferred tax liabilities	18	5,742	4,221
Provisions	26	47	56
Total non-current liabilities		18,582	17,916

Current liabilities
Trade and other payables	27	136,077	71,384
Current tax liabilities		10,221	3,804
Bank overdrafts	23	—	—
Borrowings	25	5,611	4,761
Total current liabilities		151,909	79,949
Total liabilities		170,491	97,865

Total equity and liabilities		321,074	194,184

The above statement of financial position should be read in conjunction with the accompanying notes.

56Alfen - Annual Report 2022

Consolidated Statement of Changes in Equity


In EUR '000	Note	Attributable to equity owners of Alfen N.V.
		Share capital *	Share premium	Retained earnings	Result for the year	Total equity
Balance - 1 January 2021		2,175	50,429	9,637	11,987	74,228

Profit (loss) for the period		—	—	—	21,450	21,450
Other comprehensive income (loss)		—	—	—	—	—
Total comprehensive income (loss) for the period		—	—	—	21,450	21,450

Transactions with owners in their capacity as owners
Issuance of ordinary shares, net of tax		—	—	—	—	—
Purchase of treasury shares		—	—	—	—	—
Share-based payment transactions	11	—	—	641	—	641
Dividend		—	—	—	—	—
Allocation of profit (loss)		—	—	11,987	(11,987)	—
Balance - 31 December 2021		2,175	50,429	22,265	21,450	96,319

Profit (loss) for the period		—	—	—	53,047	53,047
Other comprehensive income (loss)		—	—	—	—	—
Total comprehensive income (loss) for the period		—	—	—	53,047	53,047

Transactions with owners in their capacity as owners
Issuance of ordinary shares, net of tax		—	—	—	—	—
Purchase of treasury shares		—	222	—	—	222
Share-based payment transactions	11	—	—	995	—	995
Dividend		—	—	—	—	—
Allocation of profit (loss)		—	—	21,450	(21,450)	—
Balance - 31 December 2022	24	2,175	50,651	44,710	53,047	150,583

* The outstanding ordinary shares of 21,750,000 includes 54,643 treasury shares as per 31 December 2022 (2021: 55,416)

The above statement of changes in equity should be read in conjunction with the accompanying notes.

Consolidated Statement of Cash Flows


In EUR '000	Note	2022	2021
Cash flows from operating activities
Operating profit		67,746	27,690
Adjustments for:
- Depreciation, amortisation and impairment expenses	16/17	10,158	8,514
- Change in provision	26	(9)	14
- Change other financial assets	19	(1,273)	(179)
- Share-based payment expenses	11	995	641
Changes in operating assets and liabilities:
- (Increase)/decrease inventories	20	(90,233)	(21,596)
- (Increase)/decrease contract balances	22	12,001	6,781
- (Increase)/decrease trade and other receivables	22	(34,741)	(28,275)
- Increase/(decrease) trade and other payables	27	42,079	21,026
Cash generated from operations		6,723	14,616
Income taxes (paid)/ received	13	(5,567)	(3,452)
Interest (paid)	12/25	(730)	(630)
Interest received	12	3	4
Net cash inflow/ (outflow) from operating activities		429	10,538

Cash flows from investing activities
Payment for property, plant and equipment	16	(11,457)	(4,028)
Payment for intangible assets	17	(9,568)	(7,654)
Net cash inflow/ (outflow) from investing activities		(21,025)	(11,682)

Cash flows from financing activities
Proceeds from issuance of shares		—	—
Purchase of treasury shares		(42)	—
Repayments of borrowings	4/25	(3,798)	(3,923)
Dividends paid to company's shareholders		—	—
Net cash inflow/ (outflow) from financing activities		(3,840)	(3,923)

Net increase/ (decrease) in cash and cash equivalents		(24,436)	(5,067)
Cash and cash equivalents at the beginning of the year		47,277	52,344
Cash and cash equivalents at the end of the year		22,841	47,277

The above statement of cash flows should be read in conjunction with the accompanying notes.

57Alfen - Annual Report 2022

Notes to the consolidated

financial statements

___


Note 1	General information

Alfen N.V. (hereafter “Alfen” or “the Company”) is a

public limited liability company (N.V.) which main

activity is to develop, produce and sell products,

systems and services related to the electricity grid,

including smart grid solutions, charging equipment

for electric vehicles and energy storage systems.

Alfen’s main geographic focus is the Netherlands,

followed by Germany, Belgium, Finland, the United

Kingdom, France and the rest of Europe.

Alfen is the holding company of the Group. The

companies included in the consolidated financial

statements are the following:


Company name	Location and country of incorporation	Shareholding in %
Alfen B.V.	Almere, The Netherlands	100 %
Alfen ICU B.V.	Almere, The Netherlands	100 %
Alfen Projects B.V.	Almere, The Netherlands	100 %
Alfen België BV	Gent, Belgium	100 %
Alfen International B.V.	Almere, The Netherlands	100 %
Alfen Elkamo Oy Ab	Pietarsaari, Finland	100 %

Alfen was listed on the Amsterdam Stock Exchange on

22 March 2018 and has its registered office at

Hefbrugweg 28, 1332 AP, Almere, the Netherlands.

Before the listing, Alfen was a private limited liability

company named Alfen Beheer B.V. with its statutory

seat in Almere, the Netherlands. Alfen converted into

a public company with limited liability with its

statutory seat in Amsterdam, the Netherlands, and

was renamed to Alfen N.V. as per the date of the

listing.

Alfen is registered in the Chamber of Commerce

under number 644.62.846.

The Group’s financial year covers the first day of

January and ends on the last day of December of each

year.

This annual report was authorised for issue by the

Company’s Board of Directors and approved by the

Supervisory Board on 14 February 2023. The annual

report will be presented to the Annual General

Meeting of Shareholders for their adoption on 6 April

2023.


Note 2	Summary of significant accounting policies

The principal accounting policies applied in the

preparation of these consolidated financial

statements are set out below. These policies have

been consistently applied to all the years presented,

unless otherwise stated.

Basis of preparation

The consolidated financial statements of Alfen N.V.

have been prepared in accordance with International

Financial Reporting Standards (IFRS) as adopted by

the European Union. They also comply with the

financial reporting requirements included in section 9

of Book 2 of the Dutch Civil Code.

The preparation of the consolidated financial

statements in conformity with IFRS requires the use

of certain critical accounting estimates. It also

requires management to exercise its judgement in

the process of applying the Company’s accounting

policies. The areas involving a higher degree of

judgement or complexity, or areas where

assumptions and estimates are significant to the

financial statements are disclosed in Note 6.

The consolidated financial statements are prepared

on the basis that it will continue to operate as a going

concern.

Basis of measurement

The consolidated financial statements have been

prepared on a historical cost convention, unless

stated otherwise. The consolidated financial

statements are presented in euro, which is the

Company’s functional currency. All amounts have

been rounded to the nearest thousand, unless

otherwise indicated.

Changes in accounting policies and

disclosures

New standards and interpretations adopted

A number of new amendments to standards are

effective from 1 January 2022 but they do not have a

material effect on the Company’s consolidated

financial statements.

New standards and interpretations not yet adopted

Certain new accounting standards and amendments

to standards have been published that are not

mandatory for reporting periods starting on or after

1 January 2022 and have not been early adopted by

the Company. For none of these standards that are

not yet effective it is expected that they have a

material impact on the Company in the current or

future reporting periods and on foreseeable future

transactions.

Principles for consolidation

Subsidiaries

Subsidiaries are all entities over which the Group has

control. The Group controls an entity when the Group

is exposed to, or has rights to, variable returns from

its involvement with the entity and has the ability to

affect those returns through its power to direct the

activities of the entity. Subsidiaries are fully

consolidated from the date on which control is

transferred to the Group. Subsidiaries are

deconsolidated from the date that control ceases.

The financial data of the subsidiaries and other

entities included in the consolidation have been

included in full, to the exclusion of intercompany

relationships, intercompany profit and intercompany

receivables and liabilities between subsidiaries and

other entities included in the consolidation, to the

extent that the results are not realised by a third

party outside the Group. Unrealised losses on

intercompany transactions are eliminated unless they

concern impairments.

58Alfen - Annual Report 2022

Business combinations

The Company accounts for business combinations

using the acquisition method when control is

transferred to the Group. Goodwill arises on the

acquisition of subsidiaries and represents the excess

of the consideration transferred over the Group’s

interest in the net fair value of the net identifiable

assets, liabilities and contingent liabilities of the

acquiree and the fair value of the non-controlling

interest in the acquiree. Negative goodwill arising

from an acquisition is recognised directly in the

income statement. Acquisition-related costs are

expensed as incurred, except if related to the issue of

debt or equity securities.

The consideration transferred for the acquisition of a

subsidiary is the fair value of the assets transferred

and the liabilities incurred to the former shareholders

of the acquiree. The consideration transferred

includes the fair value of any asset or liability

resulting from a contingent consideration

arrangement.

Subsequent changes to the fair value of the

contingent consideration that is deemed to be an

asset or liability are recognised in the income

statement.

If the business combination is achieved in stages, the

acquisition date carrying value of the acquirer’s

previously held equity interest in the acquiree is

remeasured to fair value at the acquisition date. Any

gains or losses arising from such remeasurement are

recognised in the income statement.

Changes in ownership interests in subsidiaries

without change of control

Transactions with subsidiaries that do not result in

loss of control are accounted for as equity

transactions that is, as transactions with the owners

in their capacity as owners. The difference between

fair value of any consideration paid and the relevant

share acquired of the carrying value of net assets of

the subsidiary is recorded in equity. Gains or losses on

disposals to non-controlling interests are also

recorded in equity.

Disposal of subsidiaries

If the Group ceases to have control of an entity, any

retained interest in the entity is remeasured to fair

value at the date when control is lost with the change

in carrying amount recognised in the income

statement. The fair value is the initial carrying

amount for the purpose of subsequently accounting

for the retained interest as an associate, joint venture

or other financial asset. Amounts previously

recognised in other comprehensive income are

reclassified to profit or loss. Deconsolidation occurs

when the Group no longer controls a subsidiary.

Foreign currency translation

Functional and presentational currency

Items included in the financial statements are

measured using the currency of the primary

economic environment in which the entity operates

(‘the functional currency’). The financial statements

are presented in euro, which is the functional

currency of all companies within the Group and the

Group’s presentation currency.

Transactions and balances

Foreign currency transactions are translated into the

functional currency using the exchange rates at the

dates of the transactions. Foreign exchange gains and

losses resulting from the settlement of such

transactions and from the translation of monetary

assets and liabilities denominated in foreign

currencies at year-end exchange rates are generally

recognised in profit or loss.

Foreign exchange gains and losses that relate to

borrowings and cash and cash equivalents are

presented in the statement of comprehensive

income, within finance costs.

Non-monetary items that are measured at fair value

in a foreign currency are translated using the

exchange rates at the date when the fair value was

determined. Translation differences on assets and

liabilities carried at fair value are reported as part of

the fair value gain or loss.

Property, plant and equipment

Property, plant and equipment are carried at

historical cost less accumulated depreciation and

impairment losses. Historical cost includes

expenditure that is directly attributable to the

acquisition of the items.

Subsequent costs are included in the asset’s carrying

amount or recognised as a separate asset, as

appropriate, only when it is probable that future

economic benefits associated with the item will flow

to the Company and the cost of the item can be

measured reliably.

The carrying amount of any component accounted for

as a separate asset is derecognised when replaced. All

other repairs and maintenance are charged to profit

or loss during the reporting period in which they are

incurred.

Depreciation on assets is calculated by recognising

the difference between historical cost and the

estimated residual values using the straight-line

method over their estimated useful life in profit or

loss.

The estimated useful lives of property, plant and

equipment for current and comparable periods are as

follows:


Building	5 - 30 years
Furniture, fittings and equipment	5 - 10 years
Other fixed operating assets	5 years

The assets’ residual values and useful lives are

reviewed, and adjusted if appropriate, at the end of

each reporting period. The costs of future

replacement are capitalised based on the component

approach. Under this approach the total costs are

allocated to the ‘component assets’. Government

grants on investments are deducted from the

purchase price or manufacturing price of the assets to

which the government grants relate.

An asset’s carrying amount is written down

immediately to its recoverable amount if the asset’s

carrying amount is greater than its estimated

recoverable amount.

Gains and losses on disposals are determined by

comparing proceeds with the carrying amount and

are recognised within the income statement.

Intangible assets

Goodwill

Goodwill arising on the acquisition of subsidiaries is

measured at historical cost less accumulated

impairment losses. Goodwill is not amortised but it is

tested for impairment annually, or more frequently if

events or changes in circumstances indicate that it

might be impaired.

Other intangible assets

Research and development

Development costs that are directly attributable to

the design and testing of identifiable and unique

products and systems controlled by the Company are

recognised as intangible assets only if all of the

following conditions are met:

•it is technically feasible to complete the product

or system so that it will be available for use;

•management intends to complete the product or

system and use or sell it;

•there is an ability to use or sell the product or

system;

•it can be demonstrated how the product or

system will generate probable future economic

benefits;

•adequate technical, financial and other resources

to complete the development and to use or sell

the product or system are available; and

•the expenditure attributable to the product or

system during its development can be reliably

measured.

Directly attributable costs that are capitalised as part

of the product include the development employee

costs and an appropriate portion of relevant

overheads. Other development expenditures that do

not meet these criteria are recognised as an expense

as incurred. Development costs previously recognised

as an expense are not recognised as an asset in a

subsequent period. Expenditure on research activities

is recognised as expense in the period in which it is

incurred.

59Alfen - Annual Report 2022

Customer related intangibles

Customer related intangibles that are acquired by the

Company with finite useful lives are recognised at fair

value at the acquisition date and are subsequently

carried at cost less accumulated amortisation and

impairment losses.

Amortisation

Amortisation of intangible assets is calculated by

recognising the difference between historical cost

and the estimated residual values using the straight-

line method over their estimated useful lives in the

income statement. Amortisation is recognised in the

income statement on a straight-line basis and

commences as soon as the assets are ready for use.

The estimated useful lives of intangible assets for

current and comparable periods are as follows:


Development costs	5 years
Customer related intangibles	1 - 7 years

The expected useful life and the amortisation method

are reviewed each reporting period.

Impairment of non-financial assets

Non-financial assets are tested for impairment

whenever events or changes in circumstances

indicate that the carrying amount may not be

recoverable. Capitalised development projects in

progress are not amortised but are tested for

impairment annually, or more frequently if events or

changes in circumstances indicate that it might be

impaired.

An impairment loss is recognised for the amount by

which the asset’s carrying amount exceeds its

recoverable amount.

The recoverable amount is the higher of an asset’s

fair value less costs of disposal and value in use. For

the purposes of assessing impairment, assets are

grouped at the lowest levels for which there are

separately identifiable cash inflows which are largely

independent of the cash inflows from other assets or

groups of assets (cash-generating units).

Non-financial assets other than goodwill that suffered

an impairment are reviewed for possible reversal of

the impairment at the end of each reporting period.

Financial instruments

Financial assets - Classification and measurement

The Company classifies its financial assets in the

following measurement categories:

(i)those to be measured subsequently at fair value

(either through OCI or through profit or loss),

and

(ii)those to be measured at amortised cost.

The classification depends on the entity’s business

model for managing the financial assets and the

contractual terms of the cash flows.

Financial assets - Recognition and derecognition

Regular purchases and sales of financial assets are

recognised on the trade-date, the date on which the

Company commits to purchase or sell the asset.

Financial assets are derecognised when the rights to

receive cash flows from the financial assets have

expired or have been transferred and the Company

has transferred substantially all the risks and rewards

of ownership.

Financial assets - Measurements

At initial recognition the Company measures a

financial asset at its fair value plus, in the case of a

financial asset not at fair value through profit or loss,

transaction costs that are directly attributable to the

acquisition of the financial asset. Transaction costs of

financial assets carried at fair value through profit or

loss are expensed in profit or loss.

Debt instruments

Subsequent measurement of debt instruments

depends on the Company’s business model for

managing the asset and the cash flow characteristics

of the asset. There are three measurement categories

into which the Company classifies its debt

instruments: (i) Amortised cost, (ii) Fair value through

profit or loss; and (iii) Fair value through other

comprehensive income.

The Company only has financial assets at amortised

cost and makes no use of derivative financial

instruments.

Amortised costs

Assets that are held for collection of contractual cash

flows where those cash flows represent solely

payments of principal and interest are measured at

amortised cost. Interest income from these financial

assets is included in finance income using the

effective interest rate method. Any gain or loss arising

on derecognition is recognised directly in profit or

loss and presented in other gains/losses together

with foreign exchange gains and losses.

Financial assets - Impairment

The Company assesses on a forward looking basis the

expected credit losses associated with its debt

instruments carried at amortised cost.

The Company has no trade receivables nor amounts

due from customers for contract work including a

significant finance component and is therefore

required to apply the simplified approach under

IFRS 9, in which the credit losses are measured using

a lifetime expected loss allowance for all trade

receivables and amounts due from customers for

contract work.

Information about the Company’s exposure to credit

risk and measurement of impairment losses for trade

receivables and amounts due from customers for

contract work is included in Note 3.

Financial liabilities - Recognition and measurement

Financial liabilities are recognised when the Company

becomes a party to the contractual provisions of the

financial instrument.

The Company only has financial liabilities at

amortised cost and makes no use of derivative

financial instruments.

Financial liabilities at amortised costs

Financial liabilities at amortised cost include trade

and other payables and long-term debt.

Trade and other payables and long-term debt are

initially recognised at fair value equalling the amount

required to be paid, less, when material, a discount to

reduce the payables to fair value. Subsequently, trade

and other payables and long-term debt are measured

at amortised cost using the effective interest method.

Trade and other payables are classified as current

liabilities due to their short-term nature, except for

maturities greater than 12 months after the end of

the reporting period. These are classified as non-

current liabilities.

Financial liabilities - Derecognition

The Company derecognises a financial liability when

its contractual obligations are discharged or

cancelled, or expire. On derecognition of a financial

liability, the difference between the carrying amount

extinguished and the consideration paid (including

any non-cash assets transferred or liabilities assumed)

is recognised in the income statement.

The Company also derecognises a financial liability

when its terms are modified and the cash flows of the

modified liability are substantially different, in which

case a new financial liability based on the modified

terms is recognised at fair value. However, when the

cash flows of the modified liability are not

substantially different, the Company (i) recalculates

the amortised cost of the modified financial liability

by discounting the modified contractual cash flows

using the original effective interest rate and (ii)

recognises any adjustment in the income statement.

Offsetting financial instruments

Financial assets and liabilities are offset and the net

amount reported in the balance sheet when there is a

legally enforceable right to offset the recognised

amounts and there is an intention to settle on a net

basis or realise the asset and settle the liability

simultaneously. The Company does not have any

legally enforceable right to offset the recognised

amounts in the balance sheet.

60Alfen - Annual Report 2022

Inventories

Inventories mainly relate to raw materials and are

valued at the lower of cost and net realisable value.

Costs comprise direct materials and, where

applicable, direct labour costs and those overheads

that have been incurred in bringing the inventories to

their present location and condition. Costs are

determined using the weighted average price

method. Net realisable value represents the

estimated selling price less all estimated costs of

completion and costs to be incurred in marketing,

selling and distribution.

Contract assets and liabilities

Contract assets and liabilities comprise of revenue

recognised (based on the costs for contract work

performed plus the profit recognised to date) less

progress billings when the Company constructs an

asset that is built on the customers site or when the

costs incurred are related to a product or project with

no alternative use and for which the Company has an

enforceable right to payment.

Contract assets are stated as a receivable (amounts

due from customers for contract work) when the

balance is positive. If negative, it is stated as a

contract liability (amounts due to customers for

contract work).

Contract assets are subject to the expected credit

losses, for which the Company applies the IFRS 9

simplified approach to measuring expected credit

losses which uses a lifetime expected loss allowance

in line with trade and other receivables. Please refer

to note 3 for further information.

Trade and other receivables

Trade and other receivables are amounts due from

customers for products delivered and services

performed in the ordinary course of business. If

collection is expected in one year or less, they are

classified as current assets. If not, they are presented

as non-current assets. Trade receivables are generally

due for settlement immediately and therefore all

classified as current assets.

Trade and other receivables are recognised initially at

fair value and subsequently measured at amortised

cost using the effective interest method, less

provision for impairment.

Cash and cash equivalents

Cash and cash equivalents are recognised at nominal

value. Cash and cash equivalents include cash at

banks and cash in hand. In the cash flow statement

cash and cash equivalents comprises cash at banks,

cash in hand and bank overdrafts.

Share capital

Ordinary shares are classified as equity. Incremental

costs directly attributable to the issuance of new

ordinary shares or options are shown in equity as a

deduction, net of tax, from the proceeds.

Dividends

Dividends are recognised as a liability in the period in

which they are declared.

Borrowings

Borrowings are initially recognised at fair value, net of

transaction costs incurred. Borrowings are

subsequently measured at amortised cost. Any

difference between the proceeds (net of transaction

costs) and the redemption amount is recognised in

profit or loss over the period of the borrowings using

the effective interest method. Borrowings are

removed from the balance sheet when the obligation

specified in the contract is discharged, cancelled or

expired. The difference between the carrying amount

of a financial liability that has been extinguished or

transferred to another party and the consideration

paid, including any non-cash assets transferred or

liabilities assumed, is recognised in profit or loss as

other income or finance costs.

Borrowings are classified as current liabilities unless

the Company has an unconditional right to defer

settlement of the liability for at least 12 months after

the end of the reporting period.

Provisions

Provisions are recognised when the Company has a

present legal or constructive obligation as a result of

past events; it is more likely than not that an outflow

of resources will be required to settle the obligation;

and the amount can be reliably estimated. Provisions

are measured at management’s best estimate of the

expenditure required to settle the obligation at the

end of the reporting period, and are discounted

where the effect is material using a pre-tax rate that

reflects current market assessments of the time value

of money and the risks specific to the obligation.

Jubilee provision

Based on the collective labour agreement, a provision

for jubilee benefits for employees is recognised based

on the estimated future cost, using actuarial

calculations to determine the amount to be

recognised.

Onerous contracts

A provision for onerous contracts is measured at the

present value of the lower of expected costs of

terminating the contract and the expected net costs

of continuing with the contract. Before a provision is

established, the Company recognises any impairment

loss on the asset associated with that contract.

Trade and other payables

These amounts represent liabilities provided to the

Company prior to the end of the financial year which

are unpaid. Trade and other payables are presented

as current liabilities unless payment is not due within

12 months after the reporting period. They are

recognised initially at their fair value and

subsequently measured at amortised cost using the

effective interest method.

Revenue recognition

Revenue is measured based on the consideration

specified in a contract with a customer. The Company

recognises revenue when it transfers control over a

good or service to a customer.

The Company has no specific obligations for returns,

refund clauses nor any other similar obligations

specified in the contract with customers. However,

standard product compliance warranty is provided to

customers, which is not considered a separate

performance obligation.

The following paragraphs provide information about

the nature and timing of the satisfaction of

performance obligations in contracts with customers

and the related revenue recognition policies per

business line. For all revenue streams, invoices are

usually payable within 30 days. In general there are

no variable consideration clauses, such are volume

related discounts, included in the contracts with

customers. However, direct discounts can be

provided on a customer-by-customer basis.

Smart grid solutions

Revenue within the Smart grid solutions business line

is classified as contract manufacturing, meaning that

every designed and manufactured transformer

substation or series of transformer substations by the

Company is tailor-made for a specific customer and

has as such no alternative use. If in addition, the

Company has an enforceable right to payment,

revenue is recognised over time - i.e. before delivered

to the customers’ premises - in the income statement

using the cost-to-cost method.

In case the Company does not have an enforceable

right to payment, revenue is recognised at a point-in-

time when control of the products are transferred to

the customer, being when the goods are delivered to

the customer and when there is no unfulfilled

obligation that could affect the customers’

acceptance of the product.

Within the Smart grid solutions business line, the

Company always acts as a principal, because all

purchased (input) materials are subsequently

integrated into end products for which the Company

provides significant integration services.

Uninvoiced amounts are presented as amounts due

from customers for contract work, while advances

received are included in the amounts due to

customers for contract work.

61Alfen - Annual Report 2022

Service related revenue within Smart grid solutions

comprises additional service and/or maintenance sold

to a customer by means of a separate contract for

periods up to 4 years. Revenues generated through

services rendered are recognised over time in the

income statement as customers simultaneously

receive and consume the benefits when the Company

performs the services.

Energy storage systems

Energy storage systems revenue comprise of tailor-

made energy storage systems for a specific customer

or a commingling of multiple tailor-made energy

storage systems designed and manufactured by the

Company in combination with third party purchased

manufactured products for which the Company

subsequently provides overall project management

and significant system integration services. For this

reason, the Company acts as a principle for the third

party purchased manufactured products.

Energy storage systems are always tailor-made for a

specific customer and have as such no alternative

use. For these contracts, the Company always has an

enforceable right to payment. Consequently, revenue

is recognised over time - i.e. before delivered to the

customers’ premises - in the income statement using

the cost-to-cost method.

Uninvoiced amounts are presented as amounts due

from customers for contract work, while advances

received are included in the amounts due to

customers for contract work.

Service related revenue within Energy storage

systems comprises additional service and/or

maintenance sold to a customer by means of a

separate contract for periods usually up to 5 years.

Revenues generated through services rendered are

recognised over time in the income statement as

customers simultaneously receive and consume the

benefits when the Company performs the services.

EV charging equipment

The Company sells products related to charging

equipment for electric vehicles. Revenue from the

sale of these goods sold is recognised at a point-in-

time when control of the products is transferred to

the customer, being when the goods are delivered to

the customer and when there is no unfulfilled

obligation that could affect the customers’

acceptance of the product.

Service related revenue within EV charging

equipment comprises additional service and/or

maintenance sold to a customer by means of a

separate contract for periods usually between 3 and 5

years. Revenues generated through services rendered

are recognised over time on a straight-line basis in

the income statement as customers simultaneously

receive and consume the benefits when the Company

performs the services.

Employee benefits

Salaries, wages and social security contributions are

charged to the income statement based on the terms

of employment, when they are due to employees and

the tax authorities respectively.

Termination benefits are expensed at the earlier of

when the Company can no longer withdraw the offer

of those benefits and when the Company recognises

costs for a restructuring.

Pension obligations

The Company has a multi-employer pension plan

which is a defined benefit plan for which there is

insufficient information available for the Company to

account for the pension plan as a defined benefit

plan. There is not sufficient information available as

the pension fund does not administer the pension

plan on a company-by-company basis. Therefore, the

Company accounts for this pension plan as a defined

contribution plan.

For the defined contribution plans, the Company pays

contributions to publicly or privately administered

pension insurance plans on a mandatory and

contractual basis. The Company has no further

payment obligations once the contributions have

been paid.

The contributions are recognised as employee benefit

expense when they are due. Prepaid contributions

are recognised as an asset to the extent that a cash

refund or a reduction in the future payments is

available.

Share-based payments

The grant-date fair value of equity-settled share-

based payment awards granted to employees is

recognised as an expense, with a corresponding

increase in equity, over the vesting period of the

awards.

The amount recognised as an expense is adjusted to

reflect the number of awards for which the related

service and non-market performance conditions are

expected to be met, such that the amount ultimately

recognised is based on the number of awards that

meet the related service and non-market

performance conditions at the vesting date. The

Company has no share-based payment awards with

non-vesting conditions nor with market performance

conditions.

Government grants

Grants from the government are recognised at their

fair value where there is a reasonable assurance that

the grant will be received and the Company will

comply with all attached conditions. Government

grants relating to costs are recognised in the

statement of income over the period necessary to

match them with the costs they are intended to

compensate.

Expenses

Expenses arising from the Company’s business

operations are accounted for in the year incurred.

Leases

At the inception of an agreement, the Company

assesses whether a contract is, or contains, a lease. A

contract is, or contains, a lease if the contract conveys

the right to control the use of an identified asset for a

period of time in exchange for consideration. To

assess whether a contract conveys the right to control

the use of an identified asset, the Company uses the

definition of a lease in IFRS 16.

The Company, as a lessee, recognises a right-of-use

asset representing its right to use the underlying

asset and a lease liability representing its obligation

to make lease payments at the lease commencement

date.

However, the Company elected to apply the

recognition exemption for both short-term and low

value leases – e.g. office equipment. As such, the

Company recognises lease payments associated with

these leases as an expense on a straight-line basis

over the lease term.

The right-of-use 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

dismantle and remove the underlying asset or to

restore the underlying asset or the site on which it is

located, less any lease incentives received.

The right-of-use asset is subsequently depreciated

using the straight-line method from the

commencement date to the end of the lease term,

unless the lease transfers ownership of the

underlying asset to the Company by the end of the

lease term or the cost of the right-of-use asset

reflects that the Company will exercise a purchase

option. In that case the right-of-use asset will be

depreciated over the useful life of the underlying

asset, which is determined on the same basis as those

of property, plant and equipment. In addition, the

right-of-use asset is periodically reduced by

impairment losses, if any, and adjusted for certain

remeasurements of the lease liability.

The lease liability is initially measured at the present

value of the lease payments that are not paid at the

commencement date, discounted using the interest

rate implicit in the lease or, if that rate cannot be

readily determined, the Company’s incremental

borrowing rate. Subsequently, the lease liability is

increased by the interest costs on the lease liability

and decreased by lease payments made.

Lease payments included in the measurement of the

lease liability comprise the following:

•fixed payments, including in-substance fixed

payments;

•variable lease payments that depend on an index

or a rate, initially measured using the index or rate

as at the commencement date;

•amounts expected to be payable under a residual

value guarantee; and

62Alfen - Annual Report 2022

•the exercise price under a purchase option that

the Company is reasonably certain to exercise,

lease payments in an optional renewal period if

the Company is reasonably certain to exercise an

extension option, and penalties for early

termination of a lease unless the Company is

reasonably certain not to terminate early.

The lease liability is measured at amortised cost using

the effective interest method. The lease liability is

remeasured when there is a change in future lease

payments arising from a change in index or rate, a

change in the estimate of the amount expected to be

payable under a residual value guarantee, or as

appropriate, changes in the assessment whether a

purchase or renewal option is reasonably certain to

be exercised or a termination option is reasonably

certain not to be exercised.

When the lease liability is remeasured as

abovementioned, a corresponding adjustment is

made to the carrying amount of the right-of-use

asset, or is recorded in profit or loss if the carrying

amount of the right-of-use asset has been reduced to

zero.

The Company’s right-of-use assets and lease liabilities

are presented under Property, plant and equipment

and Borrowings, respectively.

Finance income and expenses

Finance income and expenses are recognised using

the effective interest method. Financial expenses

include interest incurred on borrowings calculated

using the effective interest method and interest

accruals for provisions that are recognised in the

income statement.

In calculating finance income and expense, the

effective interest rate is applied to the gross carrying

amount of the asset (when the asset is not credit-

impaired) or to the amortised cost of the liability.

However, for financial assets that have become

credit-impaired subsequent to initial recognition,

interest income is calculated by applying the effective

interest rate to the amortised cost of the financial

asset. If the asset is no longer credit-impaired, then

the calculation of interest income reverts to the gross

basis.

Corporate income tax

The income tax expense or credit for the period is the

tax payable on the current period’s taxable income

based on the applicable income tax rate for each

jurisdiction adjusted by changes in deferred tax assets

and liabilities attributable to temporary differences

and to unused tax losses.

The current income tax charge is calculated on the

basis of the tax laws enacted or substantively enacted

at the end of the reporting period in the countries

where the Company’s subsidiaries operate and

generate taxable income.

Deferred income tax is provided in full, using the

liability method, on temporary differences arising

between the tax bases of assets and liabilities and

their carrying amounts in the financial statements.

However, deferred tax liabilities are not recognised if

they arise from the initial recognition of goodwill.

Deferred income tax is also not accounted for if it

arises from initial recognition of an asset or liability in

a transaction other than a business combination that

at the time of the transaction affects neither

accounting nor taxable profit or loss. Deferred income

tax is determined using tax rates (and laws) that have

been enacted or substantially enacted by the end of

the reporting period and are expected to apply when

the related deferred income tax asset is realised or

the deferred income tax liability is settled.

Deferred tax assets are recognised only if it is

probable that future taxable amounts will be

available to utilise those temporary differences and

losses. Deferred tax liabilities and assets are not

recognised for temporary differences between the

carrying amount and tax bases of investments in

foreign operations where the Company is able to

control the timing of the reversal of the temporary

differences and it is probable that the differences will

not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when

there is a legally enforceable right to offset current

tax assets and liabilities and when the deferred tax

balances relate to the same taxation authority.

Current tax assets and tax liabilities are offset where

the entity has a legally enforceable right to offset and

intends either to settle on a net basis, or to realise

the asset and settle the liability simultaneously.

Current and deferred tax is recognised in profit or

loss, except to the extent that it relates to items

recognised in other comprehensive income or directly

in equity. In this case, the tax is also recognised in

other comprehensive income or directly in equity,

respectively.

Notes to the cash flow statement

The cash flow statement has been prepared using the

indirect method, whereby profit or loss is adjusted for

the effects of transactions of a non-cash nature, any

deferrals or accruals of past or future operating cash

receipts or payments, and items of income or

expense associated with investing or financing cash

flows.

Non-cash transactions are not included in the

statement of cash flows.


Note 3	Financial risk management

As result of regular business practices, the Company

holds positions in a variety of financial instruments.

The financial instruments are presented in the

balance sheet and consists of cash and cash

equivalents, receivables and other receivables,

interest-bearing loans, trade payables and other

payables.

The Company does not use foreign exchange

contracts and/or foreign exchange options and does

not deal with such financial derivatives. On each

balance date, financial instruments are reviewed to

see whether or not an objective indication exists for

the impairment of a financial asset or a group of

financial assets. If an objective indication for

impairment exists, the company determines the

amount of impairment losses and charges this

amount to the income statement. As a result of the

use of financial instruments, the company incurs

credit risks, liquidity risks and market risks.

The market risks consist of currency risks, price risks

and interest risks. The company has a strict policy

that aims to minimise and control these risks as much

as possible.

Credit risk

Credit risk is the risk of a financial loss in case a

customer does not comply with the contractual

obligations. Credit risks are mainly incurred from

receivables to customers. The company executes a

strict policy to minimise credit risks. To control these

risks, the company makes use of information from

licensed credit agencies. If necessary, credit risks will

be mitigated by the use of credit insurances, bank

guarantees, prepayments and other insurances. Cash-

and cash equivalents may be placed by a number of

banks.

The company determines the credit risk of cash- and

cash equivalents that are placed with these banks, by

solely doing business with highly respectable banks.

The Company evaluates the concentration risk with

respect to trade receivables and amounts due from

customers for contract work as low.

Expected credit losses

The Company has two types of financial assets that

are subject to the expected credit loss model:

•Trade and other receivables

•Amounts due from customers for contract work

Trade and other receivables and amounts due from

customers for contract work

The Company applies the IFRS 9 simplified approach

to measuring expected credit losses which uses a

lifetime expected loss allowance for all trade and

other receivables and amounts due from customers

for contract work.

To measure the expected credit losses, trade and

other receivables and amounts due from customers

for contract work have been grouped based on

shared credit risk characteristics and the days past

due. The amounts due from customers for contract

work relate to unbilled work in progress and have

substantially the same risk characteristics as the trade

receivables for the same types of contracts.

63Alfen - Annual Report 2022

The Company has therefore concluded that the

expected loss rates for trade and other receivables

are a reasonable approximation of the loss rates for

the amounts due from customers for contract work.

The expected loss rates used at 31 December 2022

and at 31 December 2021 are based on the payment

profiles of sales over a period of 12 months of the

preceding financial year and the corresponding

historical credit losses experienced related to these

sales.

The historical loss rates are adjusted to reflect current

and forward-looking information based on macro-

economic factors affecting the ability of the

customers to settle the receivables. The Company

retrieves the latter from externally available

information from credit rating agencies. Credit

insured amounts are excluded from the

determination of the loss allowance.

On that basis, the loss allowance as at 31 December

2022 and 31 December 2021 was determined as

follows for both trade and other receivables and

amounts due from customers for contract work:


In EUR '000	31 December 2022
	Current	Overdue <	Overdue	Overdue	Overdue >
	amount	30 days	31-60 days	61-90 days	90 days
Expected loss rate	0.2%	0.2%	0.2%	4.8%	7.0%
Gross carrying amount – trade receivables and other receivables	64,399	14,600	4,945	3,439	3,688
Gross carrying amount – amounts due from customers for contract work	17,240	—	—	—	—
Loss allowance	161	29	10	166	259

	31 December 2021
	Current	Overdue <	Overdue	Overdue	Overdue >
	amount	30 days	31-60 days	61-90 days	90 days
Expected loss rate	0.1%	0.1%	0.1%	0.3%	3.5%
Gross carrying amount – trade receivables and other receivables	43,757	7,131	3,320	765	794
Gross carrying amount – amounts due from customers for contract work	6,492	—	—	—	—
Loss allowance	26	4	2	2	28

The movement in the loss allowance in respect of

trade and other receivables and amounts due from

customers for contract work during the year was as

follows.


In EUR '000	2022	2021
Balance - At 1 January	62	112
Amounts written off	—	—
Net remeasurement of loss allowance	563	(50)
Balance – At 31 December	625	62

Trade and other receivables and amounts due from

customers for contract work are written off when

there is no reasonable expectation of recovery.

Indicators that there is no reasonable expectation of

recovery include, amongst others, the failure of a

debtor to engage in a repayment plan with the

Company and a failure to make contractual

payments.

Impairment losses on trade and other receivables and

amounts due from customers for contract work are

recognised in the income statement as a separate line

item. Subsequent recoveries of amounts previously

written off are credited against the same line item.

Liquidity risk

Liquidity risk is the risk that the Company will not be

able to meet its financial obligations. The Company’s

approach to managing liquidity is to ensure that, as

far as possible, it will always have sufficient liquidity

to meet its obligations when they become due,

avoiding unacceptable losses or damages to the

Company’s reputation. The Company monitors its

liquidity risk on an ongoing basis. Management

believes the current capital structure of the Group

will safeguard the Group's ability to continue as a

going concern.

The liquidity planning considers the maturity of the

financial assets (e.g. accounts receivable and other

financial assets) and projected cash flows from

operations. Due to the nature of the business, the use

of cash- and cash equivalents is not highly sensitive to

liquidity risks. However, the Company does notice a

seasonal pattern in liquidity risks.

64Alfen - Annual Report 2022

The tables below analyses the Company’s financial

liabilities on their contractual maturities for all non-

derivative financial liabilities for which the

contractual maturities are essential for an

understanding of the timing of the cash flows.


In EUR '000	31 December 2022
	Less than 3 months	3 months to 1 year	Between 1 and 5 years	Over 5 years	Total
Trade and other payables (excluding deferred revenue)	135,683	394	—	—	136,077
Borrowings	281	832	1,697	1,124	3,934
Factoring Alfen Elkamo	1,817	—	—	—	1,817
Lease liabilities	716	2,035	8,341	1,765	12,857
Total non-derivatives	138,497	3,261	10,038	2,889	154,685

	31 December 2021
	Less than 3 months	3 months to 1 year	Between 1 and 5 years	Over 5 years	Total
Trade and other payables (excluding deferred revenue)	70,950	434	—	—	71,384
Borrowings	286	849	2,652	1,289	5,076
Factoring Alfen Elkamo	1,188	—	—	—	1,188
Lease liabilities	663	1,864	6,704	3,205	12,436
Total non-derivatives	73,087	3,147	9,356	4,494	90,084

Market risk

Foreign exchange risk

The Company mainly operates in the European Union,

in which the Euro is the basis currency (see Note 22

and 27 for further details). The currency risk is limited

and largely concerns positions and (future)

transactions in euros. Management has determined,

based on a risk assessment, that these currency risks

do not need to be hedged.

The Company's net exposure at 31 December 2022 to

other foreign exchange movements is €115 thousand

in case foreign currency exchange rates are increasing

with 1% and is mainly concentrated in the following

currency: USD (i.e. procurement) and GBP (i.e. sales).

Price risk

The Company incurs price risks on the purchase of

(raw) materials and subcontracting for the difference

between the market price at the time of the purchase

and during the actual performance. For purchases

related to larger projects, the companies policy aims

to use indexation clauses in its sales contracts.

If indexation is impossible, prices and conditions are

negotiated with existing (key) suppliers to minimise

price risk.

In addition, the company controls price risk by using

framework purchase agreements, tender procedures

and other high valued information sources. The

Company evaluates the concentration risk with

respect to prices as low.

In case the costs of raw materials and consumables

and costs of outsourced work and other external

costs prices increase with 1%, the impact on profit

before tax is €2.6 million.

Interest rate risk

The Company is exposed to interest rate risks on its

borrowings. Management has determined, based on

a risk assessment, that the interest rate risks on its

borrowings do not need to be hedged.

In case the Company’s interest rate increases with

1%, the impact on profit before tax is € 190 thousand.


Note 4	Capital management

The Company’s objectives when managing capital is

to safeguard the Company’s ability to continue as a

going concern and maintain an optimal capital

structure to reduce the cost of capital.

In order to maintain the Company’s capital structure,

the Company may adjust its dividend policy, issue

new shares or sell assets to reduce debt. The

Company monitors capital on the basis of the gearing

ratio.

This ratio is calculated as net debt divided by total

equity. Net debt is calculated as total borrowings

(including ‘current and non-current borrowings’ as

shown in the balance sheet) less cash and cash

equivalents.

Total capital is calculated as ‘equity’ as shown in the

balance sheet plus net debt. The gearing ratios at 31

December 2022 and 31 December 2021 were as

follows:


In EUR '000	31 December 2022	31 December 2021
Borrowings (note 25)	18,404	18,400
Plus: bank overdrafts (note 23)	—	—
Less: cash and cash equivalents (note 23)	(22,841)	(47,277)
Net debt (cash)	(4,437)	(28,877)
Total equity	150,583	96,319
Total capital	146,146	67,442
Gearing ratio	(3)%	(30)%

The gearing ratio increased during 2022 due to

increased working capital, which is mainly caused by

our increased inventory levels.

65Alfen - Annual Report 2022

Below table sets out an analysis of net cash/(debt)

and the movements in net cash/(debt) for each of the

periods presented.


In EUR '000	Cash and bank overdrafts	Borrowings	Factoring Alfen Elkamo	Lease liabilities	Net cash/ (debt)
Net cash/(debt) - 1 January 2021	52,344	(5,827)	(1,119)	(13,042)	32,356

Cash flows	(5,067)	1,059	(67)	2,931	(1,144)
New leases and remeasurements	—	—	—	(1,980)	(1,980)
Other changes	—	(10)	—	(345)	(355)
Net cash/(debt) - 31 December 2021	47,277	(4,778)	(1,186)	(12,436)	28,877

Cash flows	(24,436)	1,048	(628)	3,378	(20,638)
New leases and remeasurements	—	—	—	(3,419)	(3,419)
Other changes	—	(8)	—	(375)	(383)
Net cash/(debt) - 31 December 2022	22,841	(3,738)	(1,814)	(12,852)	4,437

Other changes comprise a non-cash movement and

relates to effective interest accounting on borrowings

and lease liabilities.


Note 5	Fair value estimation

The Company has no financial assets and liabilities

measured at fair value.

At 31 December 2022 and 31 December 2021 the

carrying amounts of cash and cash equivalents, trade

and other receivables and trade and other payables

approximated their fair values due to the short-term

maturities of these assets and liabilities.

The fair values of the long-term debt are not

materially different from the carrying amounts as the

interest rate risk is a floating rate plus spread where

the spread equals the current market spread.


Note 6	Critical accounting estimates and judgements

The preparation of the financial statements requires

management to make judgements, estimates and

assumptions that affect the reported amounts of

assets and liabilities and the reported amounts of

revenues and expenses during the reported periods.

The estimates and associated assumptions are based

on historical experiences and various other factors

that are believed to be reasonable under the

circumstances. Actual results may differ from these

estimates.

Development costs

The capitalised development costs are based on

management judgements taken into account:

•the technical feasibility to complete the product

or system so that it will be available for use;

•management intends to complete the product or

system and use or sell it;

•the ability to use or sell the product or system;

•the availability of adequate technical, financial

and other resources to complete the

development.

In determining the development costs to be

capitalised, the Company estimates the expected

future economic benefits of the respective product or

system that is the result of a development project.

Furthermore management estimates the useful life of

such product or system.

The carrying amount of capitalised development costs

is €22.4 and €16.3 million at 31 December 2022 and

31 December 2021, respectively. The Company

estimates the useful life of the development costs to

be at 5 years based on the expected lifetime of such

assets. However, the actual useful life may be shorter

or longer than 5 years, depending on innovations,

market developments and competitor actions.

Impairment of non-financial assets

The Company assesses whether there are any

indicators of impairment for all non-financial assets at

each reporting date. Goodwill is tested for

impairment annually and at other times when such

indicators exist. Other non-financial assets are tested

for impairment when there are indicators that the

carrying amounts may not be recoverable. When

value-in-use calculations are undertaken,

management estimates the expected future cash

flows from the asset or cash-generating unit and

determines a suitable discount rate in order to

calculate the present value of those cash flows.

Further details about impairment testing are included

in Note 17.

Estimates in contract work

The Company recognises revenue and costs over time

- i.e. before delivered to the customers’ premises - in

the income statement using the cost-to-cost method.

Under this method, actual costs are compared with

the total estimated costs to measure progress

towards complete satisfaction of the performance

obligation.

To measure the progress toward complete

satisfaction of the performance obligation, the

Company has a robust process and system for cost

estimating, forecasting and revenue and costs

reporting. The system also requires a consistent

forecast of the project profitability, including variance

analyses of forecasted profitability compared to

budget and earlier assessment dates. Estimates are

an inherent part of this assessment and actual future

outcome may deviate from the estimated outcome,

specifically for major and complex contracts.

However, historical experience has shown that

estimates in total are sufficiently reliable.

66Alfen - Annual Report 2022


Note 7	Segment information

Operating segments

The Company is engaged in the business of

developing, producing and selling various products,

systems and services related to the electricity grid.

There is a strong interrelationship between our three

product groups - i.e. Smart grid solutions, EV charging

equipment and Energy storage systems.

IFRS 8 requires disclosures of segment information in

alignment with internal management reporting to the

Chief Operating Decision Maker (‘CODM’). Alfen’s

CEO is considered the CODM, who is ultimately

responsible for reviewing and assessing the

performance of the three separately identified

product groups.

The CODM monitors the performance of the three

product groups, despite the split in revenue, solely on

an aggregated basis for resource allocation and

overall performance measurement. All financial

segment information can therefore be found in the

consolidated financial statements.

Entity wide disclosures

Geographic information

The following table is summarising (i) revenue and

other income and (ii) non-current assets, excluding

financial instruments and deferred tax assets,

attributable to the Company’s countries of domicile.


In EUR '000
Revenue	2022	2021
The Netherlands	413,476	226,472
Finland	20,284	19,155
Belgium	6,116	4,052
Total	439,876	249,679

Non-current assets	31 December 2022	31 December 2021
The Netherlands	50,754	35,708
Finland	5,761	6,857
Belgium	574	238
Total	57,089	42,803

Revenue and other income by region based on the

destination of products and location of projects is

presented in Note 8.

Major customers

There are no customers who individually account for

more than 10% of the Company’s consolidated

revenue.


Note 8	Revenue

The Company derives the following revenues and

other income per business line:


In EUR '000	2022	2021
Smart grid solutions	142,617	128,178
Energy storage systems	45,498	17,732
EV charging equipment	251,761	103,769
Total	439,876	249,679

Smart grid solutions and Energy storage systems

revenue generated by entities domiciling in the

Netherlands and Belgium amounting to €161.7 and

€6.1 million, respectively, is considered to be over

time revenue for which the cost-to-cost method is

applied by the Company. Smart grid solutions

revenue generated by Alfen Elkamo - i.e. €20.3

million - as well as the Company’s EV charging

equipment revenue of €251.8 million is considered to

be point-in-time revenue.

Revenue and other income by region based on the

destination of products and location of projects:


In EUR '000	2022	2021
The Netherlands	217,189	153,708
Other European Union countries	195,028	83,622
Rest of Europe	27,622	12,179
Outside Europe	37	170
Total	439,876	249,679

67Alfen - Annual Report 2022


Note 9	Personnel expenses

The personnel expenses can be divided into the

following cost categories:


In EUR '000	2022	2021
Salaries and wages	45,775	34,538
Social security contributions	6,994	4,940
Pension contributions (DC)	4,660	3,538
Hire indirect personnel	4,141	1,690
Capitalised personnel expense	(7,821)	(4,655)
Total	53,749	40,051

The average number of FTE's are:


	2022	2021
Direct Employees	399	330
Indirect Employees	388	306
Total	787	636

As per 31 December 2022, a total of 121 employees

were employed outside the Netherlands.

Dutch pensions

The company has a defined contribution scheme and

a defined benefit scheme. The defined benefit plan is

a multi-employer (industry) pension plan, based on

average salary pay, for which insufficient information

is available to account for as a defined benefit plan.

Therefore, the Company accounts for this pension

plan as a defined contribution plan. The pension

schemes are financed through monthly contributions

to the pension providers, being the insurance

companies and the industry pension fund (PME). The

contribution with the industry pension fund is

calculated using a maximum annual gross salary level

and a premium of approximately 28% for 2022.

The base premium for 2023 is set at approximately

28%. Total expected contributions for 2023 amount

to €8.1 million. The company applies the liability

approach for all pension schemes. The premium

payable during the financial year is charged to the

income statement and is classified as costs of

personnel.

Alfen has approximately 805 active participants in

the industry pension plan, which has 170,000 active

participants in the total plan. The industry pension

fund has a surplus and the coverage ratio per

December 2022 is 111.7%. The company does not

have any commitments for additional contributions in

case of a deficit of the pension fund, other than

paying increased future premiums. If applicable, the

industry-wide pension fund applies an annual

indexation for the pension fund.

Aside from the premium payables, the company does

not have any additional obligations in respect to the

pension schemes.

Finnish pensions

Alfen Elkamo has a defined contribution scheme, in

which the pension contribution is predetermined and

based on the gross salary of the individual employee.

The annual net contribution for 2022 is 18% (2021:

18%). The pension contributions are paid on a

monthly basis to the pension fund. The expected net

contribution for 2023 amounts to €634 thousand. The

premium payable during the financial year is charged

to the income statement and is classified as costs of

personnel.

Aside from premium payables, Alfen Elkamo does not

have any additional obligations in respect to the

pension schemes.

Key management compensation

Key management includes directors, having authority

and responsibility for planning, directing and

controlling the activities of the Company.


In EUR '000	2022	2021
Salaries and wages	1,018	925
Short-term incentive plan(s)	401	117
Social security contributions	43	40
Pension costs	57	46
Share-based payments	432	231
Other	51	75
Total	2,002	1,434

Key management collectively hold 107,851 Ordinary

Shares (2021: 127,851) in the share capital of the

Company.

In addition, key management collectively hold

conditional rights, granted under the long-term

incentive plan for the Board of Directors and subject

to certain performance conditions, to receive 15,757

(at actual realisation based on the LTIP 2020) and

8,473 (at 100% realisation based on the LTIP

2021-2022) Ordinary Shares. Reference is made to

Note 11 for further details.

68Alfen - Annual Report 2022


Note 10	Other operating costs

The operating costs can be divided into the following

cost categories:


In EUR '000	2022	2021
Housing expenses	2,285	1,329
Other personnel expenses	4,355	2,948
Development expenses	830	865
Other general expenses	13,826	8,452
Total	21,296	13,594


Note 11	Share-based payments

Share award plans

Long-term incentive plan – Key employees

The Management Board of Alfen recognises the

importance of its key employees to the future success

of the Company. Therefore, on 4 October 2018, a

long-term incentive plan (‘LTIP Key employees’) was

introduced for a number of designated employees

within the group of the Company.

The following grants, comprising of Ordinary Shares in

the Company, have been made under this plan:


Grant date	Number of Awards Granted	Exercise price
1 January 2019	37,316	Nil
1 January 2020	38,434	Nil
1 January 2021	8,147	Nil
1 January 2022	9,747	Nil

The conditional rights to receive existing Ordinary

Shares granted will be exercisable in exchange for

Ordinary Shares on the day that is four years after the

grant date, on the condition that the relevant

employee of Alfen continues to be employed by the

Company on this date (subject to certain

arrangements for exceptional circumstances, such as

death of the employee). Besides the aforementioned

service vesting condition no other vesting conditions

are applicable for the LTIP Key employees.

Long-term incentive plan – Board of Directors

As part of the remuneration policy, which has been

adopted by the general meeting of shareholders on 7

April 2022, a long-term incentive plan for the Board

of Directors is applicable in order to increase the

alignment between shareholder’s interest and the

interest of the Board of Directors.

The following grants, comprising of Ordinary Shares in

the Company, have been made under this plan:


Grant date	Number of Awards Granted *	Exercise price
8 April 2020	13,783	Nil
29 April 2021	3,115	Nil
20 July 2021**	638	Nil
26 April 2022	4,720	Nil

* At 100% realisation of the applicable performance conditions. The actual number of

Awards that will vest can range between nil (at 0% realisation) and 27,820 (at 125%

realisation).

** Transferred from Key employees to Board of Directors in alignment with the

appointment of Michelle Lesh (CCO) as member of the Board of Directors.

The conditional rights to receive existing Ordinary

Shares granted will be exercisable in exchange for

Ordinary Shares on the day that is three years after

inception of the service and performance period,

subject to continued employment as a member of the

Board of Directors and certain non-market based

performance vesting conditions.

The service and performance period are starting on

the 1st of January of the applicable financial year, in

which the grant has been made. Besides the

aforementioned service and performance vesting

conditions there is one additional condition in place,

which is an one year and a two year holding period

after vesting date for grants made in 2020-2021 and

2022, respectively.

In addition, the following discretionary share-based

sign-on bonus, with a grant date fair value of €74.25,

was made to our CCO on 6 April 2021, which has been

vested on 31 December 2021 and transferred on

1 January 2022.


Grant date	Number of Awards Granted	Exercise price
6 April 2021	825	Nil

69Alfen - Annual Report 2022

Summary of changes in outstanding shares

Changes in outstanding shares for the period:


	LTIP Key employees	LTIP Board of Directors
Balance – 1 January 2021	70,372	13,783

Granted	9,610	3,115
Forfeited	(349)	—
Exercised	—	—
Expired	—	—
Balance – 31 December 2021	79,633	16,898

Granted	9,747	4,720
Performance adjustment	—	1,974
Forfeited	(5,787)	—
Exercised	(1,225)	—
Transferred *	(638)	638
Expired	—	—
Balance – 31 December 2022	81,730	24,230

* Transferred from Key employees to Board of Directors in alignment with the

appointment of Michelle Lesh (CCO) as member of the Board of Directors.

None of the outstanding shares related to the LTIP

Key employees and LTIP Board of Directors are

exercisable at 31 December 2022.

Fair value measurement

The Company used the Black & Scholes model to

determine the fair value of the share-based payments

plans at grant date. The market price of the

Company’s Ordinary Shares for the different plans at

grant date was:


Share award Plans	Grant date	Grant date fair value
Long-term Incentive Plan - Key employees	1 January 2019	€12.31
Long-term Incentive Plan - Key employees	1 January 2020	€16.44
Long-term Incentive Plan - Key employees	1 January 2021	€82.60
Long-term Incentive Plan - Key employees	1 January 2022	€88.25
Long-term Incentive Plan - Board of Directors	8 April 2020	€24.55
Long-term Incentive Plan - Board of Directors	29 April 2021	€68.75
Long-term Incentive Plan - Board of Directors**	22 July 2021	€80.25
Long-term Incentive Plan - Board of Directors	26 April 2022	€82.54

** Transferred from Key employees to Board of Directors in alignment with the

appointment of Michelle Lesh (CCO) as member of the Board of Directors.

The present value for expected dividend over the

vesting period for all plans is nil, because the

Company has currently no intention to distribute

dividends in the foreseeable future in order to be able

to further invest in the growth of the Company.

Consequently and in conjunction with an exercise

price of nil, both the expected volatility and risk-free-

rate have no impact on the fair value determination

at grant date.

Share-based payment expenses

Share-based payment expenses recognised as other

operating costs in the statement of comprehensive

income:


In EUR '000	2022	2021 *
Long-term Incentive Plan - Key employees	563	410
Long-term Incentive Plan - Board of Directors	432	231
Total	995	641

* 2021 adjusted for comparison purposes in alignment with the appointment of Michelle

Lesh (CCO) as member of the Board of Directors.


Note 12	Finance income and costs


In EUR '000	2022	2021
Finance costs
Interest expenses related to lease liabilities	(375)	(345)
Other interest expenses	(601)	(651)
Total finance costs	(976)	(996)

Finance income
Other interest income	3	4
Total finance income	3	4

Net finance income/ (costs)	(973)	(992)


Note 13	Income tax expense

This note provides an analysis of the Company’s

income tax expense, showing how the tax expense is

affected by non-deductible items. It also explains

significant estimates made in relation to the

Company’s tax position.

70Alfen - Annual Report 2022


In EUR '000	2022	2021
Current tax:
Current tax on profits for the year	(12,109)	(4,051)
Adjustments for previous years	(96)	113
Total current tax expense	(12,205)	(3,938)

Deferred income tax:
Income tax on continuing operations	(1,521)	(1,187)
Change in tax rates	—	(123)
Total deferred tax (expense) benefit	(1,521)	(1,310)

Total income tax expense	(13,726)	(5,248)

The tax on the Company’s profit before tax differs

from the statutory amount that would arise using the

tax rate applicable to profits of the entity. The

reconciliation of the effective tax rate is as follows:


In EUR '000	2022	2021
Result from continuing operations	53,047	21,450
Total income tax	(13,726)	(5,248)
Profit (loss) before income tax	66,773	26,698

Tax calculated based on Dutch tax rate	25.8%	25.0%

Tax effects of:
- adjustments for previous years	0.1%	(0.4%)
- effect of tax rates in other countries	0.1%	0.1%
- effect of tax incentives	(6.0%)	(5.8%)
- non-taxable expenses	0.4%	0.7%
- change in tax rates	0.0%	0.5%
- other differences	0.2%	(0.4%)

Effective tax rate	20.6%	19.7%
Applicable tax rate	25.8%	25.0%

Effect of tax incentives

To drive innovation, Dutch corporate income tax law

provides a specific tax incentive scheme known as the

Innovation Box facility. Based on this facility, qualified

income associated with R&D activities is subject to an

effective tax rate of 9% as compared to the Dutch

statutory rate of 25.8%.

In financial year 2021, Alfen concluded an agreement

with the Dutch tax authorities, in which the

application of the innovation box benefit is

determined in alignment with Dutch corporate

income tax law. This agreement applies for the years

2019 through 2024 assuming facts and circumstances

do not change.

The total tax effect of applying the innovation box is

6.0% for financial year 2022.

Non-taxable expenses

Non-taxable items are mainly related to non-

deductible share-based payment expenses relating to

the Long-term incentive plans.


Note 14	Earnings per share


	2022	2021
Weighted average number of ordinary shares in issue (x1)	21,695,256	21,694,584
Net result attributable to shareholders	53,047,054	21,449,990
Basic earnings per share	2.45	0.99

Allowing for dilution, the earnings per share are as follows:
Weighted average number of ordinary shares in issue (x1)	21,786,054	21,774,962
Net result attributable to shareholders	53,047,054	21,449,990
Diluted earnings per share	2.43	0.99

71Alfen - Annual Report 2022


Note 15	Remuneration of the Management Board and Supervisory Board

Management Board

The following statement shows how the

remuneration policy was applied in practice during

the reporting period.


	M. Roeleveld - CEO		J. van Rossen - CFO		M. Lesh - CCO
In EUR '000	2022	2021	2022	2021	2022	2021
Salaries and wages	392	356	332	277	294	130
Short-term incentive plan	150	40	133	31	118	46
Social security contributions	16	18	14	16	13	6
Pension contributions (DC)	23	21	18	17	16	8
Share-based payments	211	88	165	67	56	76
Other	25	34	13	27	13	3
Total	817	557	675	435	510	269

The following table sets out the shareholdings of the

Management Board.


	Number of Ordinary Shares
M. Roeleveld - CEO	100,582
J. van Rossen - CFO	6,730
M. Lesh - CCO	548

The following table sets out the grant made under the

long-term incentive plan for the Management Board.


Number of Awards Granted *	2022	2021
M. Roeleveld - CEO	1,818	1,752
J. van Rossen - CFO	1,539	1,363
M. Lesh - CCO	1,363	638

* At 100% realisation of the applicable performance conditions. The actual number of

Awards that will vest can range between 0% realisation and 125% realisation.

The number of Awards granted to the Management

Board are subject to certain performance conditions

as described in Note 11.

No other options have been awarded to the

Management Board, nor any loans, advances or

guarantees.

Supervisory Board

The total remuneration of the members of the

Supervisory Board is shown below:


In EUR '000	2022	2021
H. ten Hove	50	50
W.W.M. Ackermans	40	40
E.M. Oudenbroek	40	40
J. van der Vlist - Date of entry 21 November 2022	4	—
Total	134	130

No options have been awarded to the Supervisory

Board, nor any loans, advances or guarantees.


Note 16	Property, plant and equipment

Property, plant and equipment can be divided into:


In EUR '000	31 December 2022	31 December 2021
Property, plant and equipment - Owned	20,862	12,635
Property, plant and equipment - Right-of-Use	12,694	12,320
Total net book value	33,556	24,955

The movement in property, plant and equipment

during the years was as follows:

72Alfen - Annual Report 2022

Owned assets


In EUR '000	Buildings	Furniture, fittings and equipment	Assets under construction	Total
At 1 January 2021
Cost	7,033	9,410	1,614	18,057
Accumulated impairments and depreciation	(3,093)	(3,931)	—	(7,024)
Net book value	3,940	5,479	1,614	11,033

Year ended 31 December 2021
Opening net book value	3,940	5,479	1,614	11,033
Additions	—	3,567	461	4,028
Reclassification assets under construction	939	500	(1,439)	—
Disposal	—	(348)	—	(348)
Depreciation for the year	(444)	(1,982)	—	(2,426)
Depreciation of disposal	—	348	—	348
Consolidation and deconsolidation	—	—	—	—
Closing net book value	4,435	7,564	636	12,635

At 1 January 2022
Cost	7,972	13,129	636	21,737
Accumulated impairments and depreciation	(3,537)	(5,565)	—	(9,102)
Closing net book value	4,435	7,564	636	12,635

Year ended 31 December 2022
Opening net book value	4,435	7,564	636	12,635
Additions	134	10,786	537	11,457
Reclassification assets under construction	156	7	(163)	—
Disposal	—	(142)	—	(142)
Depreciation for the year	(453)	(2,777)	—	(3,230)
Depreciation of disposal	—	142	—	142
Consolidation and deconsolidation	—	—	—	—
Closing net book value	4,272	15,580	1,010	20,862

At 31 December 2022
Cost	8,262	23,780	1,010	33,052
Accumulated impairments and depreciation	(3,990)	(8,200)	—	(12,190)
Closing net book value	4,272	15,580	1,010	20,862

Right-of-use assets


In EUR '000	Land & buildings	Manufacturing equipment	Cars	Total
At 1 January 2021
Cost	11,027	1,395	4,693	17,115
Accumulated impairments and depreciation	(1,586)	(313)	(2,193)	(4,092)
Net book value	9,441	1,082	2,500	13,023

Year ended 31 December 2021
Opening net book value	9,441	1,082	2,500	13,023
Additions	784	307	940	2,031
Disposal	—	—	(542)	(542)
Depreciation for the year	(1,250)	(212)	(1,217)	(2,679)
Depreciation of disposal	—	—	487	487
Consolidation and deconsolidation	—	—	—	—
Closing net book value	8,975	1,177	2,168	12,320

At 1 January 2022
Cost	11,811	1,702	5,091	18,604
Accumulated impairments and depreciation	(2,836)	(525)	(2,923)	(6,284)
Closing net book value	8,975	1,177	2,168	12,320

Year ended 31 December 2022
Opening net book value	8,975	1,177	2,168	12,320
Additions	1,592	220	1,607	3,419
Disposal	—	—	—	—
Depreciation for the year	(1,625)	(246)	(1,174)	(3,045)
Depreciation of disposal	—	—	—	—
Consolidation and deconsolidation	—	—	—	—
Closing net book value	8,942	1,151	2,601	12,694

At 31 December 2022
Cost	13,403	1,922	6,698	22,023
Accumulated impairments and depreciation	(4,461)	(771)	(4,097)	(9,329)
Closing net book value	8,942	1,151	2,601	12,694

At 31 December 2022, the net carrying amount of

leased equipment held under finance lease was €236

thousand (31 December 2021: €295 thousand).

73Alfen - Annual Report 2022


Note 17	Intangible assets and goodwill

The movement in intangible assets and goodwill

during the years was as follows:


In EUR '000	Goodwill	Customer related intangibles	Development costs	Total
At 1 January 2021
Cost	127	3,302	19,478	22,907
Accumulated impairments and amortisation	—	(1,470)	(7,835)	(9,305)
Net book value	127	1,832	11,643	13,602

Year ended 31 December 2021
Opening net book value	127	1,832	11,643	13,602
Additions	—	—	7,654	7,654
Acquisitions	—	—	—	—
Amortisation for the year	—	(407)	(3,001)	(3,408)
Consolidation and deconsolidation	—	—	—	—
Closing net book value	127	1,425	16,296	17,848

At 1 January 2022
Cost	127	3,302	27,132	30,561
Accumulated impairments and amortisation	—	(1,877)	(10,836)	(12,713)
Net book value	127	1,425	16,296	17,848

Year ended 31 December 2022
Opening net book value	127	1,425	16,296	17,848
Additions	—	—	9,568	9,568
Acquisitions	—	—	—	—
Amortisation for the year	—	(407)	(3,476)	(3,883)
Consolidation and deconsolidation	—	—	—	—
Closing net book value	127	1,018	22,388	23,533

At 31 December 2022
Cost	127	3,302	36,700	40,129
Accumulated impairments and amortisation	—	(2,284)	(14,312)	(16,596)
Net book value	127	1,018	22,388	23,533

Goodwill

Goodwill is completely allocated to the cash-

generating unit (hereinafter: ‘CGU’) Alfen Elkamo.

The recoverable amount of this CGU was determined

on the higher of the value-in-use calculation or fair

value less costs of disposal. The valuation uses future

cash flows, based on the financial budgets and

forecasts of the CGU over a period of 5 years and a

terminal growth rate thereafter.

The key assumptions used in the estimation of value

in use were as follows:

•Revenue growth rate: based on actual

experience and an analysis of expected

market growth within the energy transition

sector.

•Discount rate: based on the historical

industry average weighted-average cost of

capital, by using the capital asset pricing

model (“CAPM”). The applied discount rate

for 2022 was 17.1% (2021: 15.4%).

•Residual value: based on a terminal growth

rate of 2.0% (2021: 2.0%).

Considering the limited amount of Goodwill, the

Company’s impairment exposure is not significant

and therefore no sensitivity analysis is included.

Customer related intangibles

Customer related intangibles comprise the customer

list and order backlog related to the acquisition of

Alfen Elkamo as at 1 July 2018 and are amortised over

a period of 7 years and 0.5 year, respectively.

Consequently, the remaining amortisation period for

the customer list is 2.5 years and for the order

backlog nil.

Development costs

Additions to intangible fixed assets relate to

development projects for new products or systems or

development projects for new features to existing

products and systems for amongst others; smart grid

solutions, electric vehicle charging equipment and

energy storage.

The closing net book value amounts € 22.4 million for

the year ended 31 December 2022 (2021: €16.3

million) and includes €2.6 million (2021: €4.6 million)

of development projects still in progress.

Total costs for R&D, including amortisation of the

capitalised development costs amount to €10.7 and

€8.0 million for the years ended 31 December 2022

and 31 December 2021, respectively.

74Alfen - Annual Report 2022


Note 18	Deferred tax balances

The balance comprises temporary differences

attributable to:


In EUR '000
Deferred tax assets	31 December 2022	31 December 2021
Property, plant and equipment	—	—
Carry forward losses	—	—
Goodwill	116	154
Lease liabilities	79	75
Total	195	229

Of which:
Current (< 1 year)	38	38
Non-current (> 1 year)	157	191

Deferred tax liabilities	31 December 2022	31 December 2021
Property, plant and equipment	—	—
Intangible assets	5,937	4,450
Total	5,937	4,450

Of which:
Current (< 1 year)	1,472	968
Non-current (> 1 year)	4,465	3,482

Net deferred tax assets	—	—
Net deferred tax liabilities	5,742	4,221


Note 19	Other financial assets

Other financial assets comprise of long-term deposits

paid to international payroll service providers of €276

thousand and a long-term receivable of €1.3 million

with the lessor responsible for the construction of a

new production location and office building. At 7 July

2021, Alfen concluded a lease contract for a new

production location and office building.

During the construction period of the new production

location and office building, financing will be provided

by Alfen. The construction period is expected to be

finalised in the first quarter of 2024. After finalisation

of the construction period the financing provided by

Alfen will be repaid. At that same moment, a lease

will start for a period of 15 years, comprising the land,

the production location and the office building.


Note 20	Inventories


In EUR '000	31 December 2022	31 December 2021
Raw materials	131,815	41,582
Total	131,815	41,582

During 2022 inventories of €1.170 thousand were

written down to net realisable value (2021: €757

thousand).


Note 21	Financial instruments by category


In EUR '000	31 December 2022	31 December 2021
Assets	Financial assets at amortised cost	Financial assets at amortised cost
Other financial assets	1,589	316
Trade and other receivables	107,686	62,197
Cash and cash equivalents	22,841	47,277
Total	132,116	109,790

	31 December 2022	31 December 2021
Liabilities	Financial liabilities at amortised cost	Financial liabilities at amortised cost
Borrowings	18,404	18,400
Trade and other payables	136,077	71,384
Total	154,481	89,784


Note 22	Trade and other receivables


In EUR '000	31 December 2022	31 December 2021
Trade receivables	71,943	47,078
Less: loss allowance	(625)	(62)
Trade receivables – net	71,318	47,016

Amounts due from customers for contract work	17,240	6,492
Other taxes	364	328
Other receivables	18,764	8,361
Total	107,686	62,197

Less non-current portion:	—	—
Current portion	107,686	62,197

75Alfen - Annual Report 2022

The fair value of the receivables approximates the

carrying amounts. No breakdown of the fair values of

trade and other receivables and the non-current

portion of the receivables has been included as the

differences between the carrying amounts and the

fair values are insignificant.

Information about the Company’s exposure to credit

and market risks, and impairment losses for trade and

other receivables and amounts due from customers

for contract work is included in Note 3. The carrying

amounts of the Company’s trade and other

receivables are denominated in the following

currencies:


In EUR '000
Currency	31 December 2022	31 December 2021
EURO	102,835	59,307
GBP	4,849	2,396
SEK	2	494

Transfer of trade receivables

In order to manage seasonality, Alfen Elkamo sold its

trade receivables with recourse to a bank for cash

proceeds - i.e. factoring. These trade receivables have

not been derecognised from the statement of

financial position, because Alfen Elkamo retains

substantially all of the risks and rewards - i.e.

primarily credit risk.

The amount received on the transfer of trade

receivables has been recognised as a factoring liability

under short-term borrowings (see Note 25). The

arrangement with the bank is such that the

customers remit cash directly to the bank.

The receivables are considered to be held within a

held-to-collect business model consistent with the

Group’s continuing recognition of the receivables.

The following information shows the carrying amount

of trade receivables at the reporting date that have

been transferred but not derecognised and the

associated liabilities.


In EUR '000	31 December 2022	31 December 2021
Carrying amount of trade receivables transferred to a bank	2,267	1,482
Carrying amount of associated liabilities	(1,814)	(1,186)

Contract assets and liabilities

The net balance sheet position for contract work is as

follows:


In EUR '000	31 December 2022	31 December 2021
Amounts due from customers for contract work	17,240	6,492
Amounts due to customers for contract work	(32,374)	(9,625)
Total	(15,134)	(3,133)

The net position relates to:
Revenue recognised to date	79,238	39,986
Less: progress billings	(94,372)	(43,119)
Total	(15,134)	(3,133)

Amounts due from customers for contract work

concern the Company’s right to consideration for

work completed but not invoiced at 31 December

2022, for both the Smart grid solutions and Energy

storage solutions business lines. Amounts due from

customers for contract work will be transferred to

trade receivables when the Company’s right to

consideration is unconditional. This usually occurs

when the Company issues an invoice to the customer.

Amounts due to customers for contract work concern

received prepayments for performance obligations,

which are not yet realised at year-end. The amount of

€9.6 million recognised in the amounts due to

customers for contract work at the beginning of the

reporting period has been recognised as revenue for

the period ended 31 December 2022.

Both amounts due from customers and amounts due

to customers have a remaining term of less than one

year.

The amount of revenue recognised in the period

ended 31 December 2022 from performance

obligations satisfied (or partly satisfied) in prior

reporting period is € nil.

No information is provided about remaining

performance obligations at 31 December 2022 that

have an original expected duration of one year or

less, as allowed by IFRS 15.

76Alfen - Annual Report 2022


Note 23	Cash and cash equivalents


In EUR '000	31 December 2022	31 December 2021
Cash and cash equivalents	22,841	47,277
Total	22,841	47,277

The cash and cash equivalents are freely disposable

to the Company, except for an amount of €509

thousand on so called G-accounts.


Note 24	Equity

Share capital

Share capital at 31 December 2022 of €2,175,000

(2021: €2,175,000) is divided into 21,750,000

ordinary shares (2021: 21,750,000), fully paid-up,

with a par value of €0.1 each (2021: €0.1). Total

shares authorised comprise of 40,000,000 ordinary

shares (2021: 40,000,000).

The outstanding ordinary shares of 21,750,000

includes 54,643 treasury shares as per 31 December

2022 (2021: 55,416).

Share premium

The share premium reserve relates to contribution on

issued shares in excess of the nominal value of the

shares (above par value).

Retained earnings

The retained earnings of €44.7 million are restricted

due to a legal reserve of €22.4 million (2021: €16.3

million) which is not available for distribution.

Result for the year

The proposal to the General Meeting is that an

amount of €53.0 million will be recognised in retained

earnings.


Note 25	Borrowings


In EUR '000	31 December 2022	31 December 2021
Borrowings	3,738	4,778
Factoring Alfen Elkamo	1,814	1,186
Lease liabilities	12,852	12,436
Total	18,404	18,400

The repayment obligations as per 31 December 2022

are as follows:


In EUR '000	31 December 2022	Repayment obligation in 2023	Remaining term > 1 year and <5 year	Remaining term >5years
Borrowings	3,738	1,048	1,599	1,091
Factoring Alfen Elkamo	1,814	1,814	—	—
Lease liabilities	12,852	2,749	8,341	1,762
Total	18,404	5,611	9,940	2,853

The fair values of the long-term debt are not

materially different from the carrying amounts as the

interest rate risk is a floating rate plus spread where

the spread equals the current market spread.

Alfen N.V. holds a group credit facility for all entities

located in the Netherlands. The credit facility consists

of:

(i)a mortgage loan with a duration of 10 years and

a principal amount of €1.5 million used for the

purchase of the building located at the

Hefbrugweg Almere;

(ii)a mortgage loan with a duration of 15 years and

a principal amount of €900 thousand used for

the purchase of the building located at the

Vlotbrugweg Almere;

(iii)two loans with each a principal amount of €875

thousand and a duration of 10 years used for the

refurbishment of the buildings located at the

Hefbrugweg Almere;

(iv)a loan with a principle amount of €5 million and

a redemption period of 7 years used for the

acquisition of Alfen Elkamo at 1 July 2018;

(v)a CapEx facility up to €27.5 million that will be

used to finance our new production location and

office building (see note 19); and

(vi)a committed revolving credit facility ("RCF") up

to €100 million (2021: €30 million) and a

separate committed facility of €40 million (2021:

€ 10 million) for bank guarantees. The duration

of the RCF is three years with two extension

options, each for one year.

The 2022 interest rate is 2.5% (2021: 1.9%).

The bank has first ranked mortgages on the real

estate owned by the Company with a carrying

amount of €2.1 million per 31 December 2022. The

real estate has an economic value of € 7.7 million.

The following securities have been issued:

•a first ranked mortgage of €1.8 million for land

and buildings on the Hefbrugweg 28, 1332 AP

Almere cadastral known as section M number 70,

Almere;

•a first ranked mortgage of €900 thousand for land

and buildings on the Vlotbrugweg 24, 1332 AJ

Almere, cadastral known as section M number 60,

Almere;

•a second mortgage right on the abovementioned

buildings of €1.7 million;

77Alfen - Annual Report 2022

•a first pledge for

◦all current and future equipment of the

Company;

◦all current and future stocks of the Company;

◦all current and future rights and receivables

whether or not resulting from current and

future relationships, including the rights

from insurance agreements.

•a mandatory redemption clause in case the

Company decides to sell its interest in Alfen

Elkamo, which is capped at the proceeds from

selling the interest.

Other specific conditions related to the CAPEX-facility

are:

•a negative pledge and the “pari passu”;

•comply with a Net Debt-to-EBITDA Ratio

(adjusted for capitalised development costs)

that shall not exceed 3.00:1.00, except for a

period of six months after an acquisition, during

which period the ratio shall not exceed

3.50:1.00. This covenant was met given our net

cash position at 31 December 2022.

Other specific conditions related to the revolving

credit facility are:

•a negative pledge and the “pari passu”;

•comply with a Net Debt-to-EBITDA Ratio that

shall not exceed 3.00:1.00. This covenant was

met given our net cash position at 31 December

2022.

Alfen Elkamo Oy Ab holds a separate working capital

credit facility up to €1.5 million (2021: €1.5 million)

for which a solvency-convenant of 25% is applicable.

This solvency-convenant was met at 31 December

2022.


Note 26	Provisions


In EUR '000
Balance – 1 January 2022	56	Balance – 1 January 2021	42
Additions	—	Additions	29
Deductions	(4)	Deductions	(15)
Other	(5)	Other	—
Balance – 31 December 2022	47	Balance – 31 December 2021	56

Of which:		Of which:
Current(< 1 year)	11	Current(< 1 year)	12
Non-current (> 1 year)	36	Non-current (> 1 year)	44

The provision relates to a jubilee provision and is

calculated based on the discounted value of future

jubilee payments to the Company’s employees. The

calculation includes estimated remaining

employment terms and a discount rate of 4%.


Note 27	Trade and other payables


In EUR '000	31 December 2022	31 December 2021
Trade payables	71,500	48,325
Amounts due to customers for contract work	32,374	9,625
Other taxes	2,316	3,452
Other liabilities	29,887	9,982
Total	136,077	71,384

All current liabilities fall due in less than one year. The

fair value of the current liabilities approximates the

carrying amount due to its short term character.

The carrying amounts of the Company’s trade and

other payables are denominated in the following

currencies:


In EUR '000
Currency	31 December 2022	31 December 2021
EURO	119,709	68,408
USD	13,990	2,400
GBP	2,378	576

78Alfen - Annual Report 2022


Note 28	Leases

The Company leases several assets, which can be

combined into the asset classes: (i) Land & Buildings,

(ii) Manufacturing equipment, (iii) Office equipment

and (iv) Company cars. These contracts are typically

entered into for a period between 3 and 10 years, but

some leases may include renewal and/or termination

options.

The Company leases Office equipment (e.g. printers).

These leases are considered low-value leases for

which the Company has elected not to recognise

right-of-use assets and lease liabilities.

Right-of-use assets

Right-of-use assets relate to leases that do not meet

the definition of investment property are presented

as property, plant and equipment, which are

separately disclosed in Note 16. The Company has no

right-of-use assets that meet the definition of

investment property.

Amounts recognised in the statement of

comprehensive income and cash flows

Besides the interest expenses related to lease

liabilities and depreciation charges on right-of-use

assets as disclosed in Note 12 and Note 16,

respectively, the Company recognised within the

statement of comprehensive income €0.2 million

(2021: €0.1 million) relating to leases of low value

leases and short-term leases.

Total cash outflow for leases in 2022 was €3.6 million

(2021: €2.9 million).

Extension and termination options

The Company has several contracts within asset class

Land & Buildings and Manufacturing equipment that

include renewal and termination options or a

combination of both. At 31 December 2022, all

renewal options are included in the measurement of

the lease liabilities. Consequently, no termination

options are included.


Note 29	Contingencies and commitments

Bank guarantees

Bank guarantees amounting to €4.2 million are

outstanding at 31 December 2022 with different end

dates in financial year 2023 and further.

Fiscal unity

The Company forms a fiscal unity with Alfen B.V.,

Alfen ICU B.V. Alfen International B.V. and Alfen

Projects B.V. for corporate income tax (CIT). For

value-added tax (VAT) purposes the fiscal unity

consists of Alfen N.V., Alfen B.V., Alfen ICU B.V. and

Alfen Projects B.V. Pursuant to the Collection of State

Taxes Act, the Company, along with the subsidiary

that is part of the fiscal entity, is wholly and severally

liable for taxation payable by the fiscal unity.

Joint and several liabilities

Alfen N.V. has assumed joint and several liabilities in

accordance with article 403 Part 9 of Book 2 of The

Dutch Civil Code with respect to its subsidiaries Alfen

B.V. and Alfen ICU B.V.


Note 30	Related party transactions

All legal entities that can be controlled, jointly

controlled or significantly influenced are considered

to be a related party. Also, entities which can control,

jointly control or significantly influence the Company

are considered a related party. In addition, statutory

and supervisory directors and close relatives are

regarded as related parties.

Intercompany transactions are carried out at arm’s

length.

The following transactions were carried out with

related parties:

•Key management compensation (Note 9);

•Share-based payments (Note 11);

•Remuneration of the Management Board

and Supervisory Board (Note 15).


Note 31	Events after reporting period

There a no events after the reporting period.

79Alfen - Annual Report 2022

Alfen N.V.

Amsterdam, The Netherlands

Company financial statements

for the year ended 31 December 2022

Company financial statements


Company balance sheet ...................................................................................................................................	81
Company income statement ...........................................................................................................................	81
Notes to the company financial statements ...................................................................................................	82

80Alfen - Annual Report 2022

Company balance sheet


In EUR '000	Note	31 December 2022	31 December 2021
(before appropiation of profit)

Assets

Non-current assets
Property, plant and equipment	4	1,051	1,122
Investments in subsidiaries	5	108,590	53,965
		109,641	55,087

Current assets
Receivables	6	28,820	4,013
Cash and cash equivalents	7	26,496	43,887
		55,316	47,900

Total assets		164,957	102,987

Equity and liabilities

Shareholders' equity	8
Share capital		2,175	2,175
Share premium		50,651	50,429
Legal and statutory reserves		22,388	16,296
Retained earnings		22,322	5,969
Result for the year		53,047	21,450
		150,583	96,319

Provisions	5	2,888	1,859

Non-current liabilities	9	440	495

Current liabilities	10	11,046	4,314

Total equity and liabilities		164,957	102,987

Company income statement


In EUR '000	Note	2022	2021
Depreciation on property, plant and equipment	4	(71)	(72)
General expenses		67	46
Operating profit (loss)		(4)	(26)

Finance income		—	—
Finance expenses		—	—
Finance income (costs) - net		—	—

Profit (loss) before income tax		(4)	(26)
Income tax expense		—	6
Share of net profit of investments in subsidiaries	5	53,051	21,470
Profit (loss) for the period after income tax		53,047	21,450

81Alfen - Annual Report 2022

Notes to the Company

financial statements

___


Note 1	General information

The company financial statements are part of the

consolidated financial statements of Alfen N.V.

(hereafter: the Company).


Note 2	Basis of preparation

The Company financial statements of Alfen N.V. have

been prepared in accordance with Part 9, Book 2 of

the Dutch Civil Code. In accordance with sub 8 of

article 362, Book 2 of the Dutch Civil Code, the

Company financial statements are prepared based on

the accounting principles of recognition,

measurement and determination of profit, as applied

in the consolidated financial statements. These

principles also include the classification and

presentation of financial instruments, being equity

instruments or financial liabilities.

In case no other policies are mentioned, refer to the

accounting policies as described in the accounting

policies in the consolidated financial statements of

this Annual Report. For an appropriate interpretation,

the company financial statements of Alfen N.V.

should be read in conjunction with the consolidated

financial statements.

All amounts have been rounded to the nearest

thousand, unless otherwise indicated. The balance

sheet and income statement include references.

These refer to the notes.

The company prepared its consolidated financial

statements in accordance with the International

Financial Reporting Standards (‘IFRS’) as adopted by

the European Union.


Note 3	Financial fixed assets

Investments in consolidated subsidiaries

Consolidated subsidiaries are all entities (including

intermediate subsidiaries) over which the Company

has control. The Company controls an entity when it

is exposed, or has rights, to variable returns from its

involvement with the subsidiary and has the ability to

affect those returns through its power over the

subsidiary. Subsidiaries are recognised from the date

on which control is transferred to the company or its

intermediate holding entities. They are derecognised

from the date control ceases.

Investments in consolidated subsidiaries are

measured at net asset value. Net asset value is based

on the measurement of assets, provisions and

liabilities and determination of profit based on the

principles applied in the consolidated financial

statements. In case of a negative net equity value of a

subsidiary, the negative value is initially deducted

from loans due from the respective subsidiary, if any,

and subsequently accounted for as a provision for

loss making subsidiaries.


Note 4	Property, plant and equipment

Property, plant and equipment concerns solely

owned assets. The movement in property, plant and

equipment during the years was as follows:


In EUR '000	Buildings
At 1 January 2021
Cost	1,468
Accumulated impairments and depreciation	(274)
Net book value	1,194

Movements in book value
Additions	—
Disposals	—
Depreciation for the year	(72)
Depreciation of disposals	—
	(72)

At 31 December 2021
Cost	1,468
Accumulated impairments and depreciation	(346)
Closing net book value	1,122

At 1 January 2022
Cost	1,468
Accumulated impairments and depreciation	(346)
Net book value	1,122

Movements in book value
Additions	—
Disposals	—
Depreciation for the year	(71)
Depreciation of disposals	—
	(71)

At 31 December 2022
Cost	1,468
Accumulated impairments and depreciation	(417)
Closing net book value	1,051

82Alfen - Annual Report 2022


Note 5	Investments in subsidiaries

The movement in subsidiaries during the years was as

follows:


In EUR '000	Investment in subsidiaries
At 1 January 2021
Investment in subsidiaries	31,212

Movements in book value
Investments	486
Share of profit in participations	21,470
Reclassification to provision for loss making subsidiaries	797
Capital contribution	—
Dividend received	—
	22,753

At 31 December 2021
Investment in subsidiaries	53,965

At 1 January 2022
Investment in subsidiaries	53,965

Movements in book value
Investments	545
Share of profit in participations	53,051
Reclassification to provision for loss making subsidiaries	1,029
Capital contribution	—
Dividend received	—
	54,625

At 31 December 2022
Investment in subsidiaries	108,590

The reclassification of €1,029 thousand (2021: €797

thousand) to provision for loss making subsidiaries is

related to the negative equity value of Alfen

International B.V.

The Company is wholly and severally liable for the

loans of Alfen International B.V. Consequently, a

provision for loss making subsidiaries of €2,888

thousand (2021: €1,859 thousand) is recognised

related to the negative equity value of Alfen

International B.V.

The share in the equity of the subsidiaries was as

follows:


	Share in Issued share capital 31 December 2022
Alfen B.V., Almere	100%
Alfen ICU B.V., Almere	100%
Alfen International B.V., Almere	100%
Alfen Projects B.V., Almere	100%
Alfen België BV, Gent	100%
Alfen Elkamo Oy Ab, Pietarsaari	100%


Note 6	Receivables


In EUR '000	31 December 2022	31 December 2021
Due from affiliated companies	28,361	4,001
Other receivables	459	12
Total	28,820	4,013

Receivables all have a remaining term to maturity of

less than one year, unless stated otherwise. The fair

value of the receivables approximates the carrying

amount. No breakdown of the fair values of the

receivables has been included as the differences

between the carrying amounts and the fair values are

insignificant.

The receivables due from affiliated companies bear

no interest. With respect to repayment and securities

nothing has been agreed.


Note 7	Cash and cash equivalents


In EUR '000	31 December 2022	31 December 2021
Cash and cash equivalents	26,496	43,887
Total	26,496	43,887

The cash and cash equivalents are freely disposable

to the Company.

83Alfen - Annual Report 2022


Note 8	Shareholders' equity

Share capital

Share capital at 31 December 2022 of €2,175,000

(2021: €2,175,000) is divided into 21,750,000

ordinary shares (2021: 21,750,000), fully paid-up,

with a par value of €0.1 each (2021: €0.1). Total

shares authorised comprise of 40,000,000 ordinary

shares (2021: 40,000,000).

The outstanding ordinary shares of 21,750,000

includes 54,643 treasury shares as per 31 December

2022 (2021: 55,416).


In EUR '000	Share capital	Share premium	Legal and statutory reserves	Retained earnings	Result for the year	Total equity
Balance – 1 January 2021	2,175	50,429	11,643	(2,006)	11,987	74,228

Issuance of ordinary shares, net of tax	—	—	—	—	—	—
Purchase of treasury shares	—	—	—	—	—	—
Share-based payment transactions	—	—	—	641	—	641
Dividend	—	—	—	—	—	—
Allocation of prior result	—	—	—	11,987	(11,987)	—
Additions	—	—	4,653	(4,653)	—	—
Profit (loss) for the period	—	—	—	—	21,450	21,450
Balance – 31 December 2021	2,175	50,429	16,296	5,969	21,450	96,319

Issuance of ordinary shares, net of tax	—	—	—	—	—	—
Purchase of treasury shares	—	222	—	—	—	222
Share-based payment transactions	—	—	—	995	—	995
Dividend	—	—	—	—	—	—
Allocation of prior result	—	—	—	21,450	(21,450)	—
Additions	—	—	6,092	(6,092)	—	—
Profit (loss) for the period	—	—	—	—	53,047	53,047
Balance – 31 December 2022	2,175	50,651	22,388	22,322	53,047	150,583

Share premium

The share premium reserve relates to contribution on

issued shares in excess of the nominal value of the

shares (above par value).

Retained earnings

The retained earnings of €44.7 million are restricted

due to a legal reserve of €22.4 million (2021: €16.3

million) which is not available for distribution.

Result for the year

The proposal to the General Meeting is that an

amount of €53.0 million will be recognised in retained

earnings.


Note 9	Non-current liabilities


In EUR '000	31 December 2022	31 December 2021
Borrowings	500	555
Total	500	555

The repayment obligation as per 31 December 2022 is

as follows:


In EUR '000	31 December 2022	Repayment obligation in 2023	Remaining term > 1 year and <5 year	Remaining term >5years
Borrowings	500	60	240	200
Total	500	60	240	200

Repayments due within 12 months of the reporting

date in the sum of €60 thousand (2021: €60

thousand) have been recognised as current liabilities.

Reference is made to Note 25 of the consolidated

financial statements.


Note 10	Current liabilities


In EUR '000	31 December 2022	31 December 2021
Repayment obligation borrowings	60	60
Trade payables	30	42
Due to affiliated companies	145	120
Corporate income tax	10,155	3,793
Other taxes	55	35
Other liabilities and accrued expenses	601	264
Total	11,046	4,314

All current liabilities fall due in less than one year. The

fair value of the current liabilities approximates the

carrying amounts due to its short term character.

The payables due to affiliated companies bear no

interest. With respect to repayment and securities

nothing has been agreed. Reference is made to Note

27 of the consolidated financial statements.

84Alfen - Annual Report 2022


Note 11	Contingencies and commitments

Fiscal unity

The Company forms a fiscal unity with Alfen B.V.,

Alfen ICU B.V. Alfen International B.V. and Alfen

Projects B.V. for corporate income tax (CIT). For

value-added tax (VAT) purposes the fiscal unity

consists of Alfen N.V., Alfen B.V., Alfen ICU B.V. and

Alfen Projects B.V. Pursuant to the Collection of State

Taxes Act, the Company, along with the subsidiary

that is part of the fiscal entity, is wholly and severally

liable for taxation payable by the fiscal unity.

Joint and several liabilities

Alfen N.V. has assumed joint and several liabilities in

accordance with article 403 Part 9 of Book 2 of The

Dutch Civil Code with respect to its subsidiaries Alfen

B.V. and Alfen ICU B.V.


Note 12	Audit fees

The following audit fees were expensed in the income

statement in the reporting period:


In EUR '000	PricewaterhouseCoopers Accountants N.V.		Other network		Total network
	2022	2021	2022	2021	2022	2021
Audit of the financial statements	210	169	—	—	210	169
Other audit procedures	—	—	5	5	5	5
Tax services	—	—	—	—	—	—
Other non-audit services	—	—	—	—	—	—
Total	210	169	5	5	215	174

These fees relate to the audit of the 2022 and 2021

financial statements, regardless of whether the work

was performed during the financial year.


Note 13	Average number of employees

During the year 2022, the average number of

employees, based on full-time equivalents, was 3

(2021: 3). Of these employees no employees were

employed outside the Netherlands.


Note 14	Events after reporting date

There are no events after the reporting period.

85Alfen - Annual Report 2022

Authorisation of the financial statements

Almere, 14 February 2023

Alfen N.V.

Board of Directors,


Marco Roeleveld	Jeroen van Rossen	Michelle Lesh
CEO	CFO	CCO

Supervisory Board,


Henk ten Hove		Eline Oudenbroek		Willem Ackermans		Jeanine van der Vlist

86Alfen - Annual Report 2022

Alfen N.V.

Amsterdam, The Netherlands

Other information

for the year ended 31 December 2022

Other information


Provision in the Articles of Association relating to profit appropriation .........................................................................	88
Independent auditor's report .............................................................................................................................................	89

87Alfen - Annual Report 2022

Provision in the Articles of

Association relating to profit

appropriation

Article 31 in the articles of association include the

following information concerning profit

appropriation:

1.The Management Board, with the approval of the

Supervisory Board, may decide that the profits

realised during a financial year fully or partially be

appropriated to increase and/or form reserves.

2.The profits remaining after application of Article

31.1 shall be put at the disposal of the General

Meeting. The Management Board, with the

approval of the Supervisory Board, shall make a

proposal for that purpose. A proposal to pay a

dividend shall be dealt with as a separate agenda

item at the General Meeting of Shareholders.

3.Distributions from the Company's distributable

reserves are made pursuant to a resolution of the

Management Board, with the approval of the

Supervisory Board.

4.Provided it appears from an interim statement of

assets signed by the Management Board that the

requirement mentioned in Article 31.7 concerning

the position of the Company's assets has been

fulfilled, the Management Board may, with the

approval of the Supervisory Board, make one or

more interim distributions to the holders of

Shares.

5.The Management Board may, with the approval of

the Supervisory Board, decide that a distribution

on Shares shall not take place as a cash payment

but as a payment in Shares, or decide that holders

of Shares shall have the option to receive a

distribution as a cash payment and/or as a

payment in Shares, out of the profit and/or at the

expense of reserves, provided that the

Management Board is designated by the General

Meeting pursuant to Articles 6.2. With the

approval of the Supervisory Board, the

Management Board shall determine the

conditions applicable to the aforementioned

choices.

6.The Company's policy on reserves and dividends

shall be determined and can be amended by the

Management Board, subject to the approval of

the Supervisory Board. The adoption and

thereafter each amendment of the policy on

reserves and dividends shall be discussed and

accounted for at the General Meeting of

Shareholders under a separate agenda item.

7.Distributions may be made only insofar as the

Company's equity exceeds the amount of the paid

in and called up part of the issued capital,

increased by the reserves which must be kept by

virtue of the law or these Articles of Association.

Independent auditor’s report

We refer to the following page.

88Alfen - Annual Report 2022

Independent auditor's

report

___

To: the general meeting and the supervisory board of

Alfen N.V.

Report on the financial statements

2022

Our opinion

In our opinion, the financial statements of Alfen N.V.

(‘the Company’) give a true and fair view of the

financial position of the Company and the Group (the

company together with its subsidiaries) as at 31

December 2022, and of its result and its cash flows

for the year then ended in accordance with

International Financial Reporting Standards as

adopted by the European Union (‘EU-IFRS’) and with

Part 9 of Book 2 of the Dutch Civil Code.

What we have audited

We have audited the accompanying financial

statements 2022 of Alfen N.V., Amsterdam.

The financial statements comprise the consolidated

financial statements of the Group and the company

financial statements.

The financial statements comprise:

•the consolidated statement of financial position as

at 31 December 2022;

•the following statements for 2022: the

consolidated statements of comprehensive

income, changes in equity and cash flows; and

•the notes, comprising a summary of the significant

accounting policies and other explanatory

information.

The company financial statements comprise:

•the company balance sheet as at 31 December

2022;

•the company income statement for the year then

ended; and

•the notes, comprising a summary of the significant

accounting policies and other explanatory

information.

The financial reporting framework applied in the

preparation of the financial statements is EU-IFRS and

the relevant provisions of Part 9 of Book 2 of the

Dutch Civil Code for the consolidated financial

statements and Part 9 of Book 2 of the Dutch Civil

Code for the company financial statements.

The basis for our opinion

We conducted our audit in accordance with Dutch

law, including the Dutch Standards on Auditing. We

have further described our responsibilities under

those standards in the section ‘Our responsibilities for

the audit of the financial statements’ of our report.

We believe that the audit evidence we have obtained

is sufficient and appropriate to provide a basis for our

opinion.

Independence

We are independent of Alfen N.V. in accordance with

the European Union Regulation on specific

requirements regarding statutory audit of public-

interest entities, the ‘Wet toezicht

accountantsorganisaties’ (Wta, Audit firms

supervision act), the ‘Verordening inzake de

onafhankelijkheid van accountants bij

assuranceopdrachten’ (ViO, Code of Ethics for

Professional Accountants, a regulation with respect to

independence) and other relevant independence

regulations in the Netherlands.

Furthermore, we have complied with the

‘Verordening gedrags- en beroepsregels

accountants’ (VGBA, Dutch Code of Ethics).

Our audit approach

We designed our audit procedures with respect to

the key audit matters, fraud and going concern, and

the matters resulting from that, in the context of our

audit of the financial statements as a whole and in

forming our opinion thereon. The information in

support of our opinion, such as our findings and

observations related to individual key audit matters,

the audit approach fraud risk and the audit approach

going concern was addressed in this context, and we

do not provide a separate opinion or conclusion on

these matters.

Overview and context

Alfen N.V. (hereafter ‘Alfen’ or ‘the Company’) is a

public limited liability Company (N.V.) which main

activity is to develop, produce and sell products,

systems and services related to the electricity grid,

including smart grid solutions, charging equipment

for electrical vehicles and energy storage systems.

The Group is comprised of several components and

therefore we considered our group audit scope and

approach as set out in the section ‘The scope of our

group audit’. We paid specific attention to the areas

of focus driven by the operations of the Group, as set

out below.

As part of designing our audit, we determined

materiality and assessed the risks of material

misstatements in the financial statements. In

particular, we considered where the management

board made important judgements, for example, in

respect of significant accounting estimates that

involved making assumptions and considering future

events that are inherently uncertain.

In these considerations, we paid attention to,

amongst others, the assumptions underlying the

physical and transition risk related to climate change.

In note 6 of the financial statements, the Company

describes the areas of judgement in applying

accounting policies and the key sources of estimation

uncertainty. Given the estimation uncertainty and the

related higher inherent risks of material

misstatement in the estimate of contract work, we

considered this matter as key audit matter as set out

in the section ‘Key audit matters’ of this report.

Furthermore, we identified the capitalisation of

development costs as key audit matter given the

judgement involved in determining whether such

costs should be capitalised.

Other areas of focus, that were not considered as key

audit matters, were the impairment of non-financial

assets and the existence/occurrence and accuracy of

the different revenue streams due to their magnitude

to the financial statements.

Alfen N.V. assessed the possible effects of climate

change to its financial position; refer to the report of

the management board, section ‘favourable markets

developments for all our business lines’. We

discussed Alfen N.V.’s assessment and governance

thereof with the management board and evaluated

the potential impact on the financial position

including underlying assumptions and estimates. The

expected effects of climate change do not impact the

key audit matters.

We ensured that the audit teams at both group and

component level included the appropriate skills and

competences which are needed for the audit of Alfen.

89Alfen - Annual Report 2022

The outline of our audit approach was as follows:

Materiality

The scope of our audit was influenced by the

application of materiality, which is further explained

in the section ‘Our responsibilities for the audit of the

financial statements’.

Based on our professional judgement we determined

certain quantitative thresholds for materiality,

including the overall materiality for the financial

statements as a whole as set out in the table below.

These, together with qualitative considerations,

helped us to determine the nature, timing and extent

of our audit procedures on the individual financial

statement line items and disclosures and to evaluate

the effect of identified misstatements, both

individually and in aggregate, on the financial

statements as a whole and on our opinion.


Overall group materiality	€3,515,000 (2021: €1,997,000).
Basis for determining materiality	We used our professional judgement to determine overall materiality. As a basis for our judgement, we used 0,8% of total revenues.
Rationale for benchmark applied	We used total revenues as the primary benchmark, a generally accepted auditing practice, based on our analysis of the common information needs of the users of the financial statements. On this basis, we believe that total revenues is the most relevant metric for the financial performance of the Company, as the Company is currently investing in the execution of its growth strategy, resulting in top-line growth.
Component materiality	Based on our judgement, we allocate materiality to each component in our audit scope that is less than our overall group materiality. The range of materiality allocated across components was between €580,000 and €3,515,000.

Materiality

•Overall materiality: €3,515,000.

Audit scope

•We conducted audit work in the Netherlands and in Finland.

•Audit coverage: 99% of consolidated revenue, 98% of consolidated total

assets and 99% of consolidated profit before tax.

Key audit matters

•Estimates in contract work

•Capitalisation of development costs

We also take misstatements and/or possible

misstatements into account that, in our judgement,

are material for qualitative reasons.

We agreed with the supervisory board that we would

report to them any misstatement identified during

our audit above €175,750 (2021: €99,900) as well as

misstatements below that amount that, in our view,

warranted reporting for qualitative reasons.

The scope of our group audit

Alfen N.V. is the parent company of a group of

entities. The financial information of this group is

included in the consolidated financial statements of

Alfen N.V.

We tailored the scope of our audit to ensure that we,

in aggregate, provide sufficient coverage of the

financial statements for us to be able to give an

opinion on the financial statements as a whole, taking

into account the management structure of the Group,

the nature of operations of its components, the

accounting processes and controls, and the markets

in which the components of the Group operate. In

establishing the overall group audit strategy and plan,

we determined the type of work required to be

performed at component level by the group

engagement team and by each component auditor.

We subjected three components, Alfen B.V., Alfen

ICU B.V. and Alfen Elkamo Oy Ab, to audits of their

complete financial information, to achieve

appropriate coverage on financial line items in the

consolidated financial statements. Alfen International

B.V. was subject to audit procedures on long-term

liabilities to achieve appropriate coverage on that

financial statements’ line item.

In total, in performing these procedures, we achieved

the following coverage on the financial line items:


Revenue	99%
Total assets	98%
Profit before tax	99%

None of the remaining components represented

more than 1% of total group revenue or total group

assets. For those remaining components we

performed, among other things, analytical procedures

to corroborate our assessment that there were no

significant risks of material misstatements within

those components.

The group engagement team performed the audit

work for the group entities Alfen N.V., Alfen B.V. and

Alfen ICU B.V. For the component Alfen Elkamo Oy Ab

we used a component auditor, who is familiar with

the local laws and regulations to perform the audit

work.

Where component auditors performed the work, we

determined the level of involvement we needed to

have in their work to be able to conclude whether we

had obtained sufficient and appropriate audit

evidence as a basis for our opinion on the

consolidated financial statements as a whole.

We issued instructions to the component audit team

in our audit scope. These instructions included

amongst others our risk analysis, materiality and the

scope of the work. We explained to the component

audit team the structure of the Group, the main

developments that were relevant for the component

auditor, the risks identified, the materiality levels to

be applied and our global audit approach. We had

calls with the component audit team both during the

year and upon conclusion of their work. During these

calls, we discussed the significant accounting and

audit issues identified by the component auditor,

their reports, the findings of their procedures and

other matters, that could be of relevance for the

consolidated financial statements.

The group engagement team performed the audit

work on the group consolidation, financial statement

disclosures and a number of more complex items at

the head office.

By performing the procedures outlined above at the

components, combined with additional procedures

exercised at group level, we have been able to obtain

sufficient and appropriate audit evidence on the

Group’s financial information, to provide a basis for

our opinion on the financial statements.

90Alfen - Annual Report 2022

Audit approach fraud risks

We identified and assessed the risks of material

misstatements of the financial statements due to

fraud. During our audit we obtained an understanding

of Alfen N.V. and its environment and the

components of the internal control system. This

included the management board’s risk assessment

process, the management board’s process for

responding to the risks of fraud and monitoring the

internal control system and how the supervisory

board exercised oversight, as well as the outcomes

thereof. We refer to the section ‘Risk management

and control systems’ of the report of the

management board for management’s fraud risk

assessment.

We evaluated the design and relevant aspects of the

internal control system and in particular the fraud risk

assessment, as well as among others the code of

conduct and whistle blower procedures. We

evaluated the design and the implementation and,

where considered appropriate, tested the operating

effectiveness of internal controls designed to mitigate

fraud risks.

As part of our process of identifying fraud risks, we

evaluated fraud risk factors with respect to financial

reporting fraud, misappropriation of assets and

bribery and corruption. We evaluated whether these

factors indicate that a risk of material misstatement

due to fraud is present.

We identified the following fraud risks and performed

the following specific procedures:


Identified fraud risk	Our audit work and observations
The risk of management override of controls In all our audits, we pay attention to the risk of management override of controls, including risks of potential misstatements due to fraud based on an analysis of potential interest of management. In this context, we paid attention to: •estimates in the valuation of construction contracts; •judgements applied in the capitalisation of development costs; •manual journal entries.	Where relevant to our audit, we evaluated the design of the internal control measures that are intended to mitigate the risks of management override of controls. We also paid specific attention to the access safeguards in the IT system and the possibility that these lead to violations of the segregation of duties. We conclude that, in the context of our audit, we could rely on this risk relevant measures of internal control. We performed data analysis of high-risk journal entries. Where we identified instances of unexpected journal entries or other risks through our data analytics, we performed additional audit procedures to address each identified risk. We also conducted specific audit activities for these entries, as part of which we paid attention to significant transactions outside the normal course of business. We evaluated key estimates and judgements for bias by the management board of Alfen, including retrospective reviews of prior year’s estimates related to important estimates of the management board, including the valuation of construction contracts and capitalisation of development costs. We also refer to the key audit matters including our audit work and observations. These procedures also included testing of transactions using inspection of source documents. We considered the outcome of our other audit procedures and evaluated whether any findings or misstatements were indicative of fraud. Our procedures did not identify any material misstatements in the information provided by the management board in the financial statements and the report of the management board compared with the financial statements. Our procedures did not lead to specific indications of fraud or suspicions of fraud with respect to management override of controls.


Identified fraud risk	Our audit work and observations
The risk of fraudulent financial reporting due to overstating the revenues Alfen’s objective is to grow, to be innovative in energy products and to realise increase in revenue/results in the future in order to increase shareholder’s value. In general, there might be pressure on management to achieve results and increase market share, creating an incentive for management to overstate revenues.	Where relevant to our audit, we evaluated the design and effectiveness of the internal control measures related to revenues and in the processes for generating and processing journal entries related to the revenues. We conclude that, in the context of our audit, we could rely on this risk relevant measures of internal control. We selected journal entries based on risk criteria and performed specific audit procedures for these entries, as part of which we also paid attention to significant transactions outside the normal course of business. We selected a sample of revenue transactions and reconciled these to the contracts or orders, the sales invoices, the shipping documents and the payments. In addition, we evaluated the performance indicators as included in the contracts of Alfen and the accurate recognition of the revenues overtime versus point-in-time. In addition, we selected a sample of accounts receivable for confirmation. Our procedures did not identify any material misstatement in the information provided by the management board in the financial statements and the report of the management board compared with the financial statements. Our procedures did not lead to specific indications of fraud or suspicions of fraud with respect to accuracy and existence/occurrence of revenue.

91Alfen - Annual Report 2022

We incorporated an element of unpredictability in

our audit. During the audit we remained alert to

indications of fraud. We also considered the outcome

of our other audit procedures and evaluated whether

any findings were indicative of fraud or non-

compliance with laws and regulations. Therefore, we

reviewed lawyer’s letters and correspondence with

regulators. Whenever we identified any indications of

fraud, we re-evaluated our fraud risk assessment and

its impact on our audit procedures.

Audit approach going concern

The management board performed their assessment

of the entity’s ability to continue as a going concern

for at least twelve months from the date of

preparation of the financial statements and has not

identified events or conditions that may cast

significant doubt on the entity’s ability to continue as

a going concern (hereafter: going-concern risks).

Our procedures to evaluate the management board’s

going-concern assessment included, amongst others:

•considering whether the management board’s

going-concern assessment includes all relevant

information of which we are aware as a result of

our audit, inquire with the management board

regarding the management board’s most

important assumptions underlying its going-

concern assessment and considering whether the

management board identified events or

conditions that may cast significant doubt on the

entity’s ability to continue as a going concern,

including for example the supply chain challenges

and the current macroeconomic environment;

•analysing the financial position as at balance sheet

date in relation to the financial position as at prior

year’s balance sheet date to assess whether

events or circumstances exist that may lead to a

going-concern risk;

•evaluating the management board’s current

budget including cash flows for at least twelve

months from the date of preparation of the

financial statements, taken into account current

developments in the industry and all relevant

information of which we are aware as a result of

our audit;

•analysing whether the current and the required

financing has been secured to enable the

continuation of the entirety of the entity’s

operations, including compliance with relevant

covenants;

•performing inquiries of the management board as

to its knowledge of going-concern risks beyond

the period of the management board’s

assessment.

Our procedures did not result in outcomes contrary

to the management board’s assumptions and

judgements used in the application of the going-

concern assumption:

•analysing whether the current and the required

financing has been secured to enable the

continuation of the entirety of the entity’s

operations, including compliance with relevant

covenants;

•performing inquiries of the management board as

to its knowledge of going concern risks beyond

the period of the management board’s

assessment.

We concluded that the management board’s use of

the going-concern basis of accounting is appropriate,

and based on the audit evidence obtained, that no

material uncertainty exists related to events or

conditions that may cast significant doubt on the

entity’s ability to continue as a going concern.

Key audit matters

Key audit matters are those matters that, in our

professional judgement, were of most significance in

the audit of the financial statements. We have

communicated the key audit matters to the

supervisory board. The key audit matters are not a

comprehensive reflection of all matters identified by

our audit and that we discussed. In this section, we

described the key audit matters and included a

summary of the audit procedures we performed on

those matters.


Key audit matter	Our audit work and observations
Estimates in contract work Refer to note 6 to the financial statements Contract assets and liabilities are recognised when the Group builds an asset on the customer site or when the costs incurred are related to a product with no alternative use and for which the Company has an enforceable right to payment. The net balance sheet position of contract work amounts to €15.1 million and consists of smart grid solutions and energy storage systems. This net balance consists of €79.2 million amounts due from customers for contract work, being the revenue recognised to date less €94.3 million progress billing. For contract work, Alfen uses the cost incurred on the contract in relation to the estimated total costs. The estimated total cost is a critical estimate for Alfen for determining measurement towards complete satisfaction of the performance obligation, as well as for assessing the need for provision for loss-making contracts. The estimated total cost comprises the materials used for production and hours needed for production and transportation costs. Due to the magnitude, the most critical estimated total costs relate to the materials used for production. The contracts of the Company generally contain one performance obligation and include client-specific and detailed technical descriptions and breakdowns of expected costs. The management board periodically monitors the financial and technical progress of the performance obligation by analysing project profitability and variance analyses of forecasted profitability compared to budget and earlier assessments. The estimates in contract work are considered a key audit matter due to the magnitude of this balance and the estimate required from the management board to determine the estimated total costs.	We gained an understanding of Alfen’s contract work, including significant estimates made by the management board, such as those regarding the estimated total cost, the measurement of progress towards complete satisfaction of performance obligations, contract modifications and variable considerations. We determined that the estimated total cost is the most critical input to determine the measurement of progress towards complete satisfaction of the performance obligation. In addition, we gained an understanding of and evaluated Alfen’s internal controls and processes including IT systems, relevant to the estimates in contract work. We evaluated how estimation uncertainty is addressed by the management board in their monthly detailed review of project progress. As part of our risk assessment procedures, we performed look-back procedures to assess the quality of the management board’s estimates, by comparing actual costs in the current financial year to the estimated total costs in prior year’s financial statements. Based on these procedures we assessed the management board’s estimate in prior year to be well-balanced. We used our risk assessment procedures, understanding and assessment of the effectiveness of the internal controls to determine our audit approach. We primarily relied on substantive testing procedures, based on efficiency considerations. We selected a sample of contracts to test the progress towards complete satisfaction of the performance obligation, based on qualitative factors, such as the risk profile and the stage of the project and quantitative factors, such as the revenue attributable to the performance obligation and the balance of the contract asset as at 31 December 2022. In our selection, we included energy storage systems projects and smart grid solutions projects with a high contract balance or with a higher estimation uncertainty. For the remaining projects, smart grid solutions projects and energy storage systems projects were included on a haphazard basis. We performed audit procedures on the accuracy of the costs, which serve as the input for the management board’s measurement of the progress towards the completion of the contract. We performed audit procedures on the estimated total costs and challenged the management board’s estimates applied by comparing the inputs to supporting evidence, such as external prices of materials in inventory or other projects, progress reports and progress meetings held. In addition, we performed audit procedures on the mathematical accuracy of the budgets and progress reports used and reconciled these to the project administration. Furthermore, we performed look-back/subsequent testing procedures to assess whether events took place which impacts the margin at balance sheet date. Based on our audit procedures, we consider the management board’s estimate in contract work to be supported by available evidence. In addition, we consider the related disclosure to be adequate.

92Alfen - Annual Report 2022


Key audit matter	Our audit work and observations
Capitalisation of development costs Refer to note 6 to the financial statements The intangible assets of Alfen amount to €23.5 million of which €22.4 million relates to capitalised development costs for smart grid solutions, electric vehicle charging equipment and energy storage solutions. During 2022, Alfen capitalised €9.6 million of development costs related to new products and systems or related to new features of existing products and systems. The management board applies significant judgement regarding the determination on whether to capitalise development costs. This determination is highly dependent on: •whether it is technically feasible to complete the product or system so that it will be available for use; •the management board’s intention to complete the product or system and use or sell it; •the ability to use or sell the product or system; •the probability that the product or system will generate probable future economic benefits; •the availability of adequate technical, financial and other resources to complete the development; and •the reliability of the measurement of expenditures attributable to the product or system during its development. Given the level of judgement required from the management board to determine whether or not the capitalisation criteria are met, we considered this area to be a key audit matter.	We gained an understanding of and evaluated Alfen’s process with regard to the capitalisation of development costs. We primarily relied on substantive testing procedures, based on efficiency considerations. As part of our risk assessment procedures, we performed look-back procedures. We verified that the products or systems capitalised in prior years were sold in 2022. The products and systems generated sales or are further developed in 2022. We obtained a listing of all projects for which development costs were capitalised in the period. We selected several projects based on the amount of capitalised development costs and obtained explanations and documentation from the management board and the R&D manager on how criteria for capitalisation of development costs were met. We obtained the technical business plan for the projects and discussed this with the R&D manager. The technical business plans indicate that the projects are technically feasible to be completed and the products and systems will be available for use. We evaluated the reasonableness of future economic benefits and the management board’s intention to sell the products and systems by obtaining evidence such as new contracts with customers. The future economic benefits and the management board’s intention were supported with available evidence. We discussed the ability of the Company to sell the products and systems with the R&D manager and determined that the new products are strongly related to the products and systems currently produced by the Company. We performed procedures to confirm that the R&D department employees are engaged in the projects. We performed procedures to confirm that the Company has sufficient room in the financial position, resulting in sufficient financial and technical resources to complete the development. We performed audit procedures on the accuracy of directly attributable costs that are capitalised by tracing a sample of external costs back to the invoices received. In addition, we assessed the hourly rate used for the development employee costs and traced the capitalised hours back to the time registration. No differences were noted in these procedures. Based on the procedures performed, we found the capitalised development costs to be supported with available evidence.

Report on the other information

included in the annual report

The annual report contains other information. This

includes all information in the annual report in

addition to the financial statements and our auditor’s

report thereon.

Based on the procedures performed as set out below,

we conclude that the other information:

•is consistent with the financial statements and

does not contain material misstatements; and

•contains all the information regarding the

directors’ report and the other information that is

required by Part 9 of Book 2 and regarding the

remuneration report required by the sections

2:135b and 2:145 subsection 2 of the Dutch Civil

Code.

We have read the other information. Based on our

knowledge and the understanding obtained in our

audit of the financial statements or otherwise, we

have considered whether the other information

contains material misstatements.

By performing our procedures, we comply with the

requirements of Part 9 of Book 2 and section 2:135b

subsection 7 of the Dutch Civil Code and the Dutch

Standard 720. The scope of such procedures was

substantially less than the scope of those procedures

performed in our audit of the financial statements.

The management board is responsible for the

preparation of the other information, including the

directors’ report and the other information in

accordance with Part 9 of Book 2 of the Dutch Civil

Code. The management board and the supervisory

board are responsible for ensuring that the

remuneration report is drawn up and published in

accordance with sections 2:135b and 2:145

subsection 2 of the Dutch Civil Code.

Report on other legal and regulatory

requirements and ESEF

Our appointment

We were appointed as auditors of Alfen N.V. on 11

March 2018 by the supervisory board. This followed

the passing of a resolution by the shareholders at the

annual general meeting held on 11 March 2018. Our

appointment has been renewed annually by

shareholders and now represents a total period of

uninterrupted engagement of four years.

European Single Electronic Format (ESEF)

Alfen N.V. has prepared the annual report, including

the financial statements, in ESEF. The requirements

for this format are set out in the Commission

Delegated Regulation (EU) 2019/815 with regard to

regulatory technical standards on the specification of

a single electronic reporting format (these

requirements are hereinafter referred to as: the RTS

on ESEF).

In our opinion, the annual report prepared in XHTML

format, including the partially marked-up

consolidated financial statements, as included in the

reporting package by Alfen N.V., complies, in all

material respects, with the RTS on ESEF.

The management board is responsible for preparing

the annual report, including the financial statements,

in accordance with the RTS on ESEF, whereby the

management board combines the various

components into a single reporting package. Our

responsibility is to obtain reasonable assurance for

our opinion on whether the annual report in this

reporting package complies with the RTS on ESEF.

Our procedures, taking into account Alert 43 of the

NBA (Royal Netherlands Institute of Chartered

Accountants), included amongst others:

•Obtaining an understanding of the entity’s

financial reporting process, including the

preparation of the reporting package.

•Obtaining the reporting package and performing

validations to determine whether the reporting

package, containing the Inline XBRL instance

document and the XBRL extension taxonomy files,

has been prepared, in all material respects, in

accordance with the technical specifications as

included in the RTS on ESEF.

93Alfen - Annual Report 2022

•Examining the information related to the

consolidated financial statements in the reporting

package to determine whether all required mark-

ups have been applied and whether these are in

accordance with the RTS on ESEF.

No prohibited non-audit services

To the best of our knowledge and belief, we have not

provided prohibited non-audit services as referred to

in article 5(1) of the European Regulation on specific

requirements regarding statutory audit of public-

interest entities.

Responsibilities for the financial

statements and the audit

Responsibilities of the management board

and the supervisory board for the financial

statements

The management board is responsible for:

•the preparation and fair presentation of the

financial statements in accordance with EU-IFRS

and Part 9 of Book 2 of the Dutch Civil Code; and

for

•such internal control as the management board

determines is necessary to enable the preparation

of the financial statements that are free from

material misstatement, whether due to fraud or

error.

As part of the preparation of the financial statements,

the management board is responsible for assessing

the Company’s ability to continue as a going concern.

Based on the financial reporting frameworks

mentioned, the management board should prepare

the financial statements using the going-concern

basis of accounting unless the management board

either intends to liquidate the Company or to cease

operations or has no realistic alternative but to do so.

The management board should disclose in the

financial statements any event and circumstances

that may cast significant doubt on the Company’s

ability to continue as a going concern.

The supervisory board is responsible for overseeing

the Company’s financial reporting process.

Our responsibilities for the audit of the

financial statements

Our responsibility is to plan and perform an audit

engagement in a manner that allows us to obtain

sufficient and appropriate audit evidence to provide a

basis for our opinion. Our objectives are to obtain

reasonable assurance about whether the financial

statements as a whole are free from material

misstatement, whether due to fraud or error and to

issue an auditor’s report that includes our opinion.

Reasonable assurance is a high but not absolute level

of assurance, which makes it possible that we may

not detect all material misstatements. Misstatements

may arise due to fraud or error. They are considered

material if, individually or in the aggregate, they could

reasonably be expected to influence the economic

decisions of users taken on the basis of the financial

statements.

Materiality affects the nature, timing and extent of

our audit procedures and the evaluation of the effect

of identified misstatements on our opinion.

A more detailed description of our responsibilities is

set out in the appendix to our report.

Zwolle, 14 February 2023

PricewaterhouseCoopers Accountants N.V.

F.S. van der Ploeg RA

94Alfen - Annual Report 2022

Appendix to our auditor’s report on

the financial statements 2022 of

Alfen N.V.

In addition to what is included in our auditor’s report,

we have further set out in this appendix our

responsibilities for the audit of the financial

statements and explained what an audit involves.

The auditor’s responsibilities for the audit

of the financial statements

We have exercised professional judgement and have

maintained professional scepticism throughout the

audit in accordance with Dutch Standards on

Auditing, ethical requirements and independence

requirements. Our audit consisted, among other

things of the following:

•Identifying and assessing the risks of material

misstatement of the financial statements,

whether due to fraud or error, designing and

performing audit procedures responsive to those

risks, and obtaining audit evidence that is

sufficient and appropriate to provide a basis for

our opinion. The risk of not detecting a material

misstatement resulting from fraud is higher than

for one resulting from error, as fraud may involve

collusion, forgery, intentional omissions,

misrepresentations, or the intentional override of

internal control.

•Obtaining an understanding of internal control

relevant to the audit in order to design audit

procedures that are appropriate in the

circumstances, but not for the purpose of

expressing an opinion on the effectiveness of the

Company’s internal control.

•Evaluating the appropriateness of accounting

policies used and the reasonableness of

accounting estimates and related disclosures

made by the management board.

•Concluding on the appropriateness of the

management board’s use of the going-concern

basis of accounting, and based on the audit

evidence obtained, concluding whether a material

uncertainty exists related to events and/or

conditions that may cast significant doubt on the

Company’s ability to continue as a going concern.

If we conclude that a material uncertainty exists,

we are required to draw attention in our auditor’s

report to the related disclosures in the financial

statements or, if such disclosures are inadequate,

to modify our opinion. Our conclusions are based

on the audit evidence obtained up to the date of

our auditor’s report and are made in the context

of our opinion on the financial statements as a

whole. However, future events or conditions may

cause the Company to cease to continue as a

going concern.

•Evaluating the overall presentation, structure and

content of the financial statements, including the

disclosures, and evaluating whether the financial

statements represent the underlying transactions

and events in a manner that achieves fair

presentation.

Considering our ultimate responsibility for the

opinion on the consolidated financial statements, we

are responsible for the direction, supervision and

performance of the group audit. In this context, we

have determined the nature and extent of the audit

procedures for components of the Group to ensure

that we performed enough work to be able to give an

opinion on the financial statements as a whole.

Determining factors are the geographic structure of

the Group, the significance and/or risk profile of

group entities or activities, the accounting processes

and controls, and the industry in which the Group

operates. On this basis, we selected group entities for

which an audit or review of financial information or

specific balances was considered necessary.

We communicate with the supervisory board

regarding, among other matters, the planned scope

and timing of the audit and significant audit findings,

including any significant deficiencies in internal

control that we identify during our audit. In this

respect, we also issue an additional report to the

audit committee in accordance with article 11 of the

EU Regulation on specific requirements regarding

statutory audit of public-interest entities. The

information included in this additional report is

consistent with our audit opinion in this auditor’s

report.

We provide the supervisory board with a statement

that we have complied with relevant ethical

requirements regarding independence, and to

communicate with them all relationships and other

matters that may reasonably be thought to bear on

our independence, and where applicable, related

actions taken to eliminate threats or safeguards

applied.

From the matters communicated with the supervisory

board, we determine those matters that were of

most significance in the audit of the financial

statements of the current period and are therefore

the key audit matters. We describe these matters in

our auditor’s report unless law or regulation

precludes public disclosure about the matter or

when, in extremely rare circumstances, not

communicating the matter is in the public interest.

95Alfen - Annual Report 2022


Contents

2022 at a glance	3
About Alfen	4

Report of the Management Board	6
Business review	7
2022 month-by-month	11
Financial performance	12
EU Taxonomy	16
Risks and uncertainties	21
Corporate Sustainability Reporting	27
Corporate governance	39

Report of the Supervisory Board	46

Financial statements	54
Consolidated financial statements	55
Company financial statements	80
Other information	87