The New Kendrion
Annual Integrated Report 2024
Our flow control valves make sure your favorite soft drinks
taste just right, every time. By automating recipe-based
dispensing, cutting down on labor and using cost-effective
materials, they make everyday refreshment easy and
reliable.
Our Power Pinch Valve provides reliable control for
agricultural irrigation and fertilization, even with tough PVC
tubing. It’s a rugged, cost-effective alternative to expensive
motorized options, making it easy to use resources
efficiently while keeping operations simple and affordable.
HOW OUR PRODUCTS IMPACT EVERYDAY LIFE
A perfectly refreshing drink every time Precision irrigation made easy
Intelligent automation for efficient processes
Our Compact Door Lock delivers tamper-resistant
protection for lockers in train stations and other public
spaces, ensuring travelers can safely store their
belongings. Engineered for tight spaces, it offers reliable
performance and exceptional shock resistance up to
300g, combining durability and peace of mind in even the
busiest environments.
Compact security for peace of mind
Our Automation Line products – stopper modules, sorting
gates, and vibrating solenoids − ensure precise and
efficient material flow in systems like apple sorting.
By electrifying automation, we boost speed, accuracy,
and reliability, helping streamline the food supply chain
so fresh produce reaches stores effortlessly.
As a trusted development partner, Kendrion provides
a diverse range of robotics solutions, including industrial
brakes, joint lockers, and custom motion control systems.
Our advanced products enable safe, smooth, and precise
operation, enhanced by modern visualization technology
for superior performance in industrial and service robotics.
Empowering robotics for the future
Our high-torque permanent magnet brakes are vital to the
dependable performance of surgical robots, ensuring life-
saving procedures are carried out with precision and safety.
Featuring a compact design and backlash-free operation,
they hold robotic arms in exact positions, delivering
unmatched repeatability, durability, and the highest
standard of patient care.
Precision at the heart of surgical robotics
2
Annual Integrated Report 2024
State-of-the-art rescue tools provide top-tier performance
without cords, enabling fast, reliable operation when every
second counts. Kendrion develops advanced motor control
and power supply modules to ensure smooth, powerful
battery-powered system operation, delivering life-saving
efficiency in critical moments.
In critical situations, respiratory equipment must operate
with absolute reliability and precision. Kendrion’s pure flow
control valves are essential in ensuring patient safety by
delivering precise flow and reliable control of oxygen.
Designed to meet the highest medical standards, they are
vital components in life-saving respiratory care.
The semiconductor industry is the backbone of modern
technology, powering everything from smartphones to
medical devices. At 3T, we create high-end capacitive
sensing solutions for advanced semiconductor production
equipment. With our precision sensor electronics, we
ensure the reliable production of the microchips that power
the technology shaping our everyday lives.
Our spring-applied brakes are critical to the safety of wind
turbines, preventing uncontrolled rotor blade movement
and ensuring dependable operation. Engineered to
withstand extreme conditions and deliver exceptional
functional safety, Kendrion brakes reduce downtime and
support a consistent, sustainable energy supply for
a greener future.
Inductive heating is transforming industrial processes like
battery manufacturing by delivering precise, efficient and
eco-friendly heat. With energy efficiency of up to 90%, our
systems ensure exact surface temperatures through
advanced inductor designs and multi-zone heating, all
seamlessly controlled by induction generators and process
management software.
Reliable braking for renewable energy
A trusted supplier of brakes for conventional forklifts,
Kendrion is now at the forefront of the shift to automated
guided vehicles (AGVs). Our compact, fail-safe AGV braking
solutions, paired with advanced safety and motion control
modules, ensure safe, reliable and efficient operation in the
future of automated logistics.
Driving the future of logistics
Efficiency redefined: inductive heating
in industrial processes
HOW OUR PRODUCTS IMPACT EVERYDAY LIFE
High precision shaping our digital world
When precision matters most
Design partner for life-saving innovation
3
Annual Integrated Report 2024
This document is the PDF version of the 2024 Annual Integrated Report of Kendrion N.V. and has been prepared for ease of use.
The European Single Electronic Format (ESEF) reporting package is available on the company’s website at www.kendrion.com.
In case of discrepancies or ambiguities between this PDF version and the ESEF reporting package, the latter prevails.
2 How our products impact everyday life
5 Profile
6 Organization
7 Facts and figures
9 World map
10 Preface Joep van Beurden, CEO
12 Members of the Executive Board
13 Business Groups
24 Strategy and financial objectives
27 Financial review
CONTENTS
PHOTOGRAPHY
AND IMAGES
Wessel de Groot Fotografie
Kendrion N.V.
Shutterstock
iStock
A digital version of this Report
is available on the website
www.kendrion.com
along with other publications
such as press releases.
30 Outlook
31 Risk management
38 Corporate governance report
43 Sustainability statements
107 Preface Frits van Hout,
Chairman of the Supervisory Board
108 Members of the Supervisory Board
110 Report of the Supervisory Board
115 Remuneration report
131 Share and shareholder information
134 Financial statements
211 Other information
212 Independent auditor’s report financial statements
224 Limited assurance report of the independent
auditor on the sustainability statements
228 Principal subsidiaries
230 Glossary – definitions of non IFRS financial
measures
232 Reconciliation of non IFRS financial measures
Annual Integrated Report 2024
4
PROFILE
Kendrion is shaping the future with high-
precision brakes, electromagnetic components,
fluid technology, control systems, and embedded
systems.
Our solutions offer precise control, maximum safety, and
smooth motion across a wide range of applications – from
machinery and robotics to high-end technology, automation,
medical and energy sectors, mobility, and process industries.
With a broad portfolio of off-the-shelf products and a project-
based approach, we work closely with our customers to deliver
customized solutions tailored to their needs. By leveraging
our deep technical expertise across multiple technologies
and the flexibility to integrate them intelligently, we provide
systems that are ready for tomorrow's challenges. Kendrion’s
deep engineering knowledge and cross-technology capabilities
make us a trusted partner for creating innovative and reliable
solutions across industries.
Rooted in Germany, headquartered in the Netherlands,
and listed on Euronext Amsterdam, Kendrion’s expertise spans
Europe, the Americas, and Asia. For more
than a century, we’ve engineered precision parts for the world’s
leading innovators in industrial applications, making us
a trusted partner for creating reliable, cutting-edge solutions
across industries.
Innovative solutions built on
precision, safety, and motion
for tomorrow’s challenges
5
Annual Integrated Report 2024
ORGANIZATION
INDUSTRIAL ACTUATORS
AND CONTROLS
INDUSTRIAL
BRAKES
We offer a comprehensive range of electromagnetic brakes for electric
motors and industrial applications. From spring-applied and permanent
magnet brakes to tailored braking systems, our extensive portfolio
ensures precision, safety, and performance, driving advancements in
industrial applications worldwide.
We develop advanced solutions for medical technology, energy,
automation, and beyond. From solenoid components and high-precision
electronics to inductive heating systems and fluid assemblies, our
diverse portfolio drives innovation across industries, empowering the
technologies of tomorrow.
6
Annual Integrated Report 2024
1
Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measure, refer to reconciliation of non-IFRS financial measures, starting on page 230.
2
Invested capital excluding intangibles arising from acquisitions.
3
Not Meaningful
Revenue
(EUR million)
2%
301.5
2023 309.0
Profit for
the period
(EUR million)
NM
3
(4.5)
2023 9.9
Normalized
EBITDA
1
(EUR million)
11%
37.0
2023 41.4
Dividends
(proposed)
(EUR million)
1%
7.0
2023 6.9
ROI
1, 2
(in %)
11%
12.0%
2023 13.5%
FACTS AND FIGURES
Free cash flow
1
(EUR million)
551%
44.3
2023 6.8
7
Annual Integrated Report 2024
Total number
of employees
by gender
(in % F vs M)
2.0%
43/57
2023 44/56
Total number of
employees (FTE)
(at 31 December)
5.0%
1,609
2023 1,699
Illness rate
(in %)
0%
5.2%
2023 5.2%
Accidents
(per 1,000 FTE)
10%
9.3
2023 8.4
Relative energy
consumption (in
tonnes kWh/million
added value)
6.8%
105.8
2023 99.1
Relative CO
2
emission
(in tonnes kWh/
million added value)
29.4%
12.9
2023 18.2
Number of
CSR supplier
audits
16.6%
15
2023 18
For more information we refer to our sustainability statements on page 43.
8
Annual Integrated Report 2024
FACTS AND FIGURES
WORLD MAPWORLD MAP
Revenue (in EUR million) segmented by customer location
FTE segmented by region
72.9
24%
Kendrion
business
location
1
Including other countries with revenue of EUR 2.3 million.
19.6
7%
209.0
69%
43% 57%
302
44% 56%
1,257
38% 62%
50
EUROPE
THE AMERICAS
ASIA
1
9
Annual Integrated Report 2024
PREFACE
The new Kendrion: a focused future
2024 has been a pivotal year for Kendrion. We made and
implemented the important strategic decision to divest our
automotive business – a cornerstone of our history – to refocus
on selected, higher-growth, high-margin industrial markets.
This bold decision also provides the opportunity to simplify our
organization and sharpen our focus. We are now positioned
as an innovative, pure-play industrial company.
Strategic shift to high-value sectors
In October, we completed the sale of our automotive activities
to Solero Technologies, LLC. This decision was driven by the
increasing competitiveness and declining profitability of the
automotive sector, particularly in Europe and the USA. The sale
allows us to allocate more resources toward our industrial
business, where our value proposition is stronger, margins are
better, and long-term growth potential is higher.
Our industrial portfolio offers significant structural advantages,
with a strong presence in growing niche markets such as wind
power, medical technology, robotics, and inductive heating.
These sectors generally involve long-term, stable design-in
processes, followed by many years of revenue visibility at
attractive margins. Additionally, we benefit from enduring
partnerships and shared success with our customers once
our products are integrated into their end-products.
While we transition away from automotive in Europe, we retain
a strategic presence in China through our state-of-the-art
Suzhou facility. This location enables us to tap into China’s
rapidly growing electric vehicle market. The entirely local supply
chain, combined with relationships with local customers, helps
shield our operations from potential geopolitical tensions, such
as trade barriers, should they arise.
Sharpened focus on profitability
The divestment has acted as a catalyst for deeper operational
changes. By offloading our automotive operations – with their
demanding standards and complex processes – we are
simplifying our operations and reducing complexity across the
organization. The strategic shift has also enabled us to move
to an ‘off-the shelf’, cloud-based and lower-cost ERP system.
These operational changes position us for greater agility and
efficiency, with anticipated annual savings of EUR 9 million
starting in January 2025.
Maximizing growth markets
As a global niche leader, we will invest in selected industrial
market segments that support profitability of at least 15%
EBITDA. We focus on opportunities where we can differentiate
our products by leveraging our deep expertise in valves,
actuators, brakes and control technology.
Joep van Beurden,
CEO
10
Annual Integrated Report 2024
Examples include industrial robots, collaborative robots, and
logistics within Industrial Brakes. In IAC, we see strong potential
for our inductive heating modules and innovative industrial
locks. Furthermore, China presents an attractive suspension
market for our smart actuators, with significant potential in
the global EV industry.
Our financial targets prioritize profitability over growth. I am
confident that we can achieve an EBITDA of 15-18% from
2025 and an ROI of 23-27% by 2027. From 2025 onwards,
we also commit to paying annual dividends of at least 50%
of normalized net profit.
Acknowledging our people
I am incredibly proud of Kendrion’s progress this year as part
of our strategic transformation, though it has not come without
challenges. The decision to part with 900 loyal colleagues from
our automotive business was not made lightly, and I am deeply
grateful for the dedication shown by all our employees during
this critical year. Their patience and commitment have been
vital to Kendrion’s evolution and to our continued success.
With a clear path ahead, we are focused on driving the next
phase of profitability-led growth. Our increased focus and
streamlined operations position us to further innovate and find
additional opportunities based on our technology platforms in
valves, actuators, brakes, and control technology.
Kendrion has roots going back to 1809. With the current team,
we continue the journey to build a Kendrion that thrives for the
long term.
The New Kendrion, entirely focused
on high value industrial niches, and
significantly more profitable.
11
Annual Integrated Report 2024
PREFACE
J.H. (Jeroen) Hemmen
Position Chief Financial Officer
Year of birth 1973
Nationality Dutch
Joined Kendrion 1 June 2005
Appointment to position
Current term
1 July 2019
1 July 2023 – 1 July 2027 (AGM 17 April 2023)
Other positions None
MEMBERS OF THE EXECUTIVE BOARD
J.A.J. (Joep) van Beurden
Position Chief Executive Officer
Year of birth 1960
Nationality Dutch
Joined Kendrion 1 December 2015
Appointment to position 1 December 2015
Current term 1 December 2023 – 1 December 2027 (AGM 17 April 2023)
Other positions
Member of the Supervisory Board & Member of the Nomination
and Remuneration Committee of Adyen N.V.
12
Annual Integrated Report 2024
OUR PRODUCTS ARE USED IN
Cranes & Hoists
Electric Motors
Elevators
Industrial Robots
Industrial Trucks & AGV
Medical Surgical Robots
Wind Power
OUR CUSTOMERS INCLUDE
Bosch Rexroth AG
Hyundai
Jiangxi Special Motor
Juli
Lenze
Nord
Raymond
Schneider Electric
SEW
Siemens
Toyota
BUSINESS GROUPS
Industrial Brakes
Industrial Brakes is a full-line provider of high-
performance electromagnetic brakes for electric
motors, serving diverse industrial markets. With a
focus on precision and safety, the business group
offers both standard and customized braking
solutions.
INDUSTRIAL BRAKES REVENUE
(in EUR)
116.5 million
2023 129.0 million
Europe
75%
Asia and
Rest of the world
20%
The Americas
5%
Kendrion locations with regional revenue breakdown
13
Annual Integrated Report 2024
OUR CUSTOMERS INCLUDE
ABB
ASML
Collins Aerospace
Dräger
Electrolux
Euchner
Fresenius
Gorenje
Oerlikon
Schmersal
Siemens
OUR PRODUCTS ARE USED IN
AGV
Aviation
Energy generation & distribution
Food & beverage machinery
Industrial appliances
Industrial automation
Robotics
Print & paper handling
Analysis Technology
Anesthesia & respiration machines
Dental treatment units
Dialysis machines
Laboratory equipment
Industrial Actuators and Controls develops
customized solutions for industrial applications,
leveraging expertise in electromagnetic
actuators, control technology, and fluid
technology. With a focus on precision and
reliability, the business group delivers tailored
solutions for a wide range of industries.
INDUSTRIAL ACTUATORS AND
CONTROLS REVENUE
(in EUR)
121.7 million
2023 127.5 million
Europe
85%
Asia and
Rest of the world
8%
The Americas
7%
Kendrion locations with regional revenue breakdown
Industrial Actuators and Controls
14
Annual Integrated Report 2024
BUSINESS GROUPS
In an era demanding smarter, more efficient solutions, Kendrion
is driving innovation across industries ranging from robotics
and automation to medical devices and sustainable energy.
Specializing in high-performance electromagnetic brakes,
actuators, and control systems, Kendrion is transforming ideas
into cutting-edge products that advance progress,
sustainability, and technological innovation.
Kendrion operates through two Business Groups: Industrial
Brakes (IB), specializing in electromagnetic brakes for electric
motors, and Industrial Actuators and Controls (IAC), focused
on advanced actuators, valves, and control systems.
Industrial Brakes (IB): Innovating for the future
The IB Business Group develops groundbreaking
electromagnetic brake systems for markets including AGVs,
industrial automation, intralogistics, medical devices, robotics,
and wind energy. Demand in these sectors is driven by the
need for more efficient, compact designs and electric motors
with higher energy density. Kendrion is one of the few
companies globally offering a complete portfolio of both
spring-applied and permanent magnet brake technologies,
positioning us as a top choice for motor manufacturers seeking
suppliers with deep industry expertise.
IB has a strong global presence in Aerzen, Atlanta, Pune,
Suzhou, and Villingen, with notable growth in emerging markets
such as China, the USA, and India. In 2024, India became a
key growth market, reflecting a rising demand for advanced
industrial technologies. IB is strengthening its position in
electrification and sustainable energy, particularly in the growing
AGV sector, driven by increasing automation in logistics and
e-commerce.
Industrial Actuators and Controls (IAC):
Leading automation forward
IAC serves diverse industries, including machine automation,
energy distribution, medical technology, and industrial
appliances, all of which are driven by the global energy
transition. IAC has established itself as a leader in inductive
heating, energy distribution, and specialized valves for nuclear
power applications, providing tailored solutions that offer
Kendrion a competitive advantage. The Automotive activities
retained after the divestment to Solero, have been
organizationally integrated into IAC, but are reported on
separately in Other Business.
Despite economic challenges, IAC has shown resilience
through growth in aviation, medical, and energy sectors.
Key achievements include pinch valve agreements for dialysis
machines and patented electronic locking solutions, reinforcing
Kendrion’s leadership in secure technology.
Driving resilience and innovation
across industries
15
Annual Integrated Report 2024
BUSINESS GROUPS
2024 Financial performance
Kendrion's industrial activities generated EUR 238.2 million in
revenue in 2024, compared to EUR 256.5 million in 2023.
The decline reflects global challenges, including high interest
rates and reduced demand for capital goods. However, the
company's strategic resilience ensured continued progress
in its core sectors. The IB business group reported
EUR 116.5 million in revenue (FY 2023: EUR 129.0 million), as
sales remained impacted by the ongoing industrial downturn,
with the machine-building market in Germany being particularly
affected. Meanwhile, IAC generated EUR 121.7 million in
revenue (FY 2023: EUR 127.5 million). While also affected by
the broader industrial slowdown, IAC benefited from a more
diversified product portfolio, mitigating some of the negative
effects. Other revenue, which includes the retained
Automotive activities, amounted to EUR 63.3 million (FY 2023:
EUR 52.5 million), reflecting growth driven by new project
ramp-ups in China.
Key milestones IB
In 2024, IB experienced varied market conditions. While
performance remained stable in Europe and Asia, India stood
out with good growth, driven by increasing demand for
advanced industrial technologies. Despite the challenges of the
broader economic environment, IB successfully maintained a
strong revenue pipeline. The group saw promising opportunities
across sectors like intralogistics, medical technology, robotics,
and wind energy. Partnerships with leading medical robotics
manufacturers in the USA and Europe further cemented IB’s
reputation for delivering precision-engineered solutions.
The expansion of IB's mid- and long-term revenue pipeline was
particularly evident in the medical technology sector, where
opportunities in the USA and Europe are growing. In the field
of medical robotics, the demand for compact designs,
backlash-free torque transmission, and high-precision solutions
is creating a strong growth driver. This sector, alongside
established industrial robots, will play a key role in IB’s future
revenue growth. New partnerships in Japan, a market known
for its high-quality standards, have further strengthened IB's
global market presence.
To address slower market conditions, IB implemented cost-
control measures toward the end of the previous year. These
actions included streamlining operational costs at key global
locations, optimizing resource allocation, and focusing on
managing stock levels to align with shifting demand. By
selectively approving new investments and maintaining a focus
on profitability, IB ensured its continued resilience while
pursuing growth in emerging markets.
Key milestones IAC
Despite the downturn in capital goods demand, IAC showed
resilience through a diversified customer base and successful
product launches. Growth in medical technology (dialysis,
anesthesia, and dental), and energy sectors strengthened IAC’s
performance. Key wins included major contracts for pinch
valves used in dialysis machines and ongoing negotiations for
Airboard
®
valve modules, underscoring Kendrion’s ability to
meet stringent regulatory standards.
IAC also secured a major contract for patented electronic
locking solutions with a European laundry machine
manufacturer, expected to enter series production in Q2 2025,
reinforcing Kendrion’s leadership in secure technology
solutions.
To navigate the slower economic environment, IAC
implemented targeted measures to mitigate its impact.
These included reducing working capital by focusing on
inventory optimization and implementing short-time work at
one location to adapt to fluctuating demand. Additionally,
IAC adopted a cost-conscious approach, exercising caution
when replacing certain positions.
16
Annual Integrated Report 2024
BUSINESS GROUPS
Focus and opportunities for 2025 and beyond
Moving forward, IB will focus on expanding partnerships with
autonomous forklift providers in the USA and continuing to
supply high-performance brakes for industrial robots. It will also
strengthen its leadership in the wind energy sector, particularly
with pitch and yaw brakes for onshore and offshore wind
turbines. Additionally, IB will target growing markets like
Japanese servo motors and high-margin niches in agricultural
automation, cranes, hoists, elevators, and security doors.
The completion of new production facilities in China for both
spring-applied and permanent magnet brakes is expected by
the end of Q1 2025. This will help Kendrion establish a
counterbalance to Chinese manufacturers in the regional
market, attracting new premium customers. IB will also
continue expanding its medical sector presence in the USA,
where minimal local competition offers substantial growth
potential for technically demanding projects.
IAC will focus on expanding its product portfolio, particularly for
pressure regulators in its three medical segments, addressing
rising biocompatibility requirements driven by stricter medical
device regulations, and developing high-flow capabilities. IAC
will also advance in the competitive electronic locking market
with new technologies and patented products designed to
meet customer-driven requirements. Growth in sectors such as
commercial aircraft, electrical grid switches, and beverage
dispensers will further leverage IAC’s actuator technology.
IAC’s expertise in niche market research, combined with its
technological capabilities, will enable the company to weather
economic challenges, ensuring above-average profitability
and growth.
Conclusion
In conclusion, Kendrion’s IB and IAC groups are well-positioned
to capitalize on emerging opportunities. IB will continue to lead
in electrification and sustainable energy, with strong growth in
AGVs, robotics, and wind energy, driven by partnerships and
innovations in key markets such as the USA and Japan.
IAC is poised for growth in demand-driven markets like food
production, medical devices, and energy-saving technologies.
Its advancements in solenoid-based actuators, inductive
heating, and high-voltage controls will maintain IAC’s
competitiveness and profitability.
Kendrion’s focus on innovation, sustainability, and customer-
centric solutions keeps it at the forefront of industrial progress.
The company is shaping a safer, more sustainable future for
industries worldwide.
Looking ahead, we anticipate both
Industrial groups to benefit from
favorable trends towards renewable
energy, electrification, and industrial
automation.
17
Annual Integrated Report 2024
BUSINESS GROUPS
Kendrion’s inductive heating systems deliver precise, efficient,
and emission-free solutions for industrial processes. Leveraging
the eddy current principle, these systems enable rapid heat
generation, uniform distribution, and dynamic control.
Applications range from coffee and cocoa bean roasting to
paper finishing, where uniform heating, precise temperature
control, and high reproducibility are critical for achieving optimal
results.
By minimizing CO
2
emissions, eliminating unnecessary heat
loss, and enabling dynamic process control, Kendrion’s
inductive heating technology helps customers meet modern
Inductive heating—future-oriented and sustainable technology
sustainability goals. With decades of experience and a modular
approach, Kendrion continues to lead in advanced heating
solutions for demanding industrial processes.
Kendrion is a trusted expert in high-performance solutions
for niche markets with demanding and complex
requirements. Through precision engineering and
customized designs, Kendrion delivers technologies that
thrive under extreme conditions and meet the exacting
demands of specialized applications.
With decades of experience, Kendrion has earned a
reputation as a trusted partner for industries that value
reliability, adaptability, and innovation. This blend of
technical expertise and commitment to excellence has
positioned Kendrion as a global leader in industrial niche
markets.
Global leader in industrial niche solutions —precision for the most demanding applications
18
Annual Integrated Report 2024
BUSINESS GROUPS
Kendrion’s expertise in valve technology and fluid systems has
established it as a trusted development partner in the dental
industry. A recent highlight is the Water- and Air Supply Unit,
developed in collaboration with Dürr Dental. This modular,
customized assembly for air and water control offers energy
efficiency, precise performance, and service-friendly features,
including an integrated plug-and-play filter system.
Kendrion’s portfolio extends far beyond individual projects.
With decades of experience, we have developed numerous
customized solutions specifically tailored to the needs of the
dental market, including valves, pressure regulators, and
complete assemblies for dental chairs. These products are
Dental technology—precision and innovation for tailored solutions
Wind power is one of the fastest-growing renewable energy
sectors, and Kendrion plays a crucial role in enabling this
transformation. With decades of experience in brake
technology, we provide solutions engineered to withstand
the harshest environmental conditions —extreme
temperatures, high humidity, dust, and strong winds.
Brakes like the INTORQ BFK470 and High Torque Line
ensure safe stopping and precise control for azimuth and
pitch drives in wind turbines. Kendrion’s Cold Climate
Version brakes are designed to operate reliably even in
temperatures as low as -40°C, making them essential for
turbines in remote or extreme environments. By combining
engineered to meet the highest standards, such as ISO
7494-2:2022, and are capable of handling demanding media
like hydrogen peroxide with unmatched reliability and precision.
Kendrion’s deep understanding of the industry ensures that
our technologies address the unique challenges of dental
applications, from water and air control to patient comfort.
By combining engineering expertise with close customer
collaboration, Kendrion delivers innovative and reliable
customized solutions that set new benchmarks in the dental
sector.
Wind power—expertise in the harshest conditions
robust designs, modular customization options, and decades
of engineering expertise, Kendrion stands out as a trusted
partner in the wind power sector, enabling safer and more
efficient turbine operation.
19
Annual Integrated Report 2024
BUSINESS GROUPS
Kendrion excels in markets with extreme or highly specific
demands—where standard solutions simply aren’t enough.
Combining deep technical expertise, a commitment to
customization, and decades of experience, Kendrion has
earned a strong reputation as a leader in niche markets.
Specialized industries trust Kendrion’s to deliver innovative,
reliable, and high-quality solutions designed to meet their
unique challenges.
Strength in niche markets
Kendrion is a key partner in the industrial laundry sector,
with a primary focus on developing customized locking
solutions for washers, dryers, and other equipment.
Decades of collaboration with leading manufacturers have
enabled Kendrion to refine its expertise in designing robust,
reliable mechanisms tailored to the unique demands
of industrial laundry applications.
Building on this extensive knowledge and experience,
Kendrion has developed a standardized locking solution
to provide smaller customers with access to high-quality,
proven technology. This standard product benefits from
the same engineering excellence and performance as
Industrial laundry machines —expertise in tailored and standardized locking solutions
Kendrion’s custom solutions, offering a cost-effective option
without compromising safety or reliability.
Through this dual approach—delivering bespoke
solutions for specific needs and offering
accessible standard options—Kendrion solidifies
its position as a trusted leader in the industrial
laundry market.
20
Annual Integrated Report 2024
BUSINESS GROUPS
Focus industry:
medical technology
precision, safety, and reliability
for life-critical applications
In medical technology, precision, safety, and
reliability form the bedrock of every innovation.
Kendrion develops components and systems
engineered to meet the highest standards for
mission-critical applications, where flawless
performance is essential.
From neonatal care to advanced imaging,
Kendrion’s solutions are integral to life-saving
devices. Biocompatible pressure regulators
ensure precise oxygen delivery in incubators,
protecting the most vulnerable patients. Fluid
isolation valves maintain sterility in ultrapure
water systems, which is critical for achieving
the highest levels of cleanliness in medical
environments.
In surgical systems, Kendrion’s permanent
magnet brakes and spring-applied brakes
enable stable positioning for robotic arms and
surgical microscopes, providing surgeons with
absolute confidence during procedures.
Meanwhile, embedded systems developed in
collaboration with subsidiary 3T, power
groundbreaking technologies, such as the
Sirius Pintuition System, which delivers
millimeter-accurate tumor localization for
minimally invasive procedures.
Kendrion’s decades of expertise in
electromagnetics, fluid technology, and control
systems form the backbone of medical
technologies that demand precision, safety,
and reliability. Trusted by innovators in
healthcare, Kendrion delivers solutions that
empower the next generation of medical
advancements, meeting the rigorous demands
of life-critical applications.
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Annual Integrated Report 2024
BUSINESS GROUPS
Focus industry:
automation and robotics
tailored solutions for unique customer
requirements
Automation and robotics are transforming
industries, driving smarter and more efficient
operations across diverse applications.
Kendrion specializes in providing customized
solutions, working closely with customers to
meet specific requirements and deliver
systems that integrate seamlessly into varied
environments.
Kendrion’s expertise in material handling is
exemplified by its electromagnetic pallet
stoppers and rotary solenoids. These
technologies replace pneumatic systems,
offering faster, quieter, and more precise
sorting and stopping. Designed for high-cycle
environments, they enhance reliability, while
improving energy efficiency and control.
In robotics, Kendrion excels at crafting tailored
solutions for dynamic applications. Bistable
solenoid fingers and permanent magnet
brakes provide accurate positioning and
secure motion control for robotic arms and
automated storage systems. Modular I/O
systems and safety controllers further elevate
automation by enabling advanced
functionalities and seamless coordination
of drives, sensors, and actuators.
What distinguishes Kendrion is its customer-
focused approach. Every solution is developed
with a deep understanding of the application,
leveraging decades of expertise to address
even the most complex requirements. By
combining technical excellence with close
customer collaboration, Kendrion delivers
systems that are not only innovative but also
precisely aligned with operational needs.
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Annual Integrated Report 2024
BUSINESS GROUPS
AGVs are revolutionizing logistics and mobility,
meeting global demands for greater efficiency,
adaptability, and automation. Kendrion
specializes in advanced components and
control solutions that enhance AGV
performance, offering a versatile portfolio
tailored to the diverse needs of AGV
manufacturers.
Kendrion’s expertise in safety and control
ensures reliable and efficient AGV operation.
Spring-applied and permanent magnet brakes
deliver secure stopping and load holding, even
in critical scenarios. High-torque brakes offer
dependable stopping power and load holding
in heavy-duty AGVs handling large loads, such
as in industrial warehouses. Their robust
design ensures consistent performance, even
in challenging environments, maintaining safety
and reliability under demanding conditions.
Holding magnets are ideal for securing loads or
precise positioning in AGV applications. Their
energy-efficient design allows them to maintain
holding force without continuous power,
making them suitable for operations involving
metal goods or high-precision tasks.
Kendrion’s modular I/O systems and Safety
PLCs add intelligence to AGV operations.
The Safety PLC continuously monitors AGV
speed and position, ensuring deceleration,
emergency stops, and compliance with the
highest safety standards. Modular I/O systems
integrate seamlessly with sensors, actuators,
and drives, supporting advanced functionality
and adaptable system design. These solutions
enhance operational safety while maintaining
the flexibility required for diverse applications.
Customization is central to Kendrion’s
approach. Bistable solenoids improve energy
efficiency in compact service robots, fluid
isolation valves ensure precise handling of
aggressive media in agricultural robots, and
Servo Slim Line brakes deliver compact, high-
performance solutions for hollow shaft drives.
As a trusted partner to AGV manufacturers,
Kendrion combines innovation, versatility, and
reliability in every solution. By focusing on
cutting-edge components and control
systems, Kendrion plays a pivotal role in
advancing the future of logistics and mobility.
Focus Industry: AGVs
pioneering components and control
systems for the future of logistics
23
Annual Integrated Report 2024
BUSINESS GROUPS
STRATEGY AND FINANCIAL OBJECTIVES
In 2024, as in 2023, the global economy faced significant
challenges and overall trading conditions remained tough.
Industrial production in Europe, particularly in Germany, was
weak, marking its second consecutive year with little to no
growth. China continued to grapple with its property crisis and
deflation, alongside reduced investment in capital good and
other assets compared to previous years. Only the USA
showed stronger performance. On the positive side, 2024 saw
interest rates lower in both the USA and Europe. Towards the
end of the year, China announced several measures aimed at
stimulating its economy, though these will take some time to
show tangible effects. Amid this challenging environment, 2024
for Kendrion was defined by the critical strategic decision to
divest most of our Automotive franchise.
On 12 April 2024 we announced an agreement to sell our
automotive business in Europe and the United States to Solero
Technologies, LLC (“Solero Technologies”) and affiliates. This
transaction marked a strategic repositioning for Kendrion,
allowing us to focus entirely on industrial growth opportunities
in Europe, the USA and China. The divestment represents
approximately EUR 210 million in 2023 pro-forma revenue,
roughly 80% of Kendrion’s automotive revenue. The European
Automotive Sound and Electronics business, along with China
Automotive, was excluded from the agreement and remains
with Kendrion. These activities have been organizationally
integrated into the Industrial Actuators and Controls (IAC)
Business Group and reported on seperately as other bussiness.
The transaction was finalized on 30 September 2024 with the
legal transfer of the Rumanian shares occurring on 21
November.
The New Kendrion: more focused, more profitable
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Annual Integrated Report 2024
STRATEGY AND FINANCIAL OBJECTIVES
With our focus now entirely on industrial opportunities within our IB and IAC Business Groups
in Europe, China, and the USA, we present a clear investment narrative. As a global niche
leader, we select industrial market segments that support a minimum profitability of 15%
EBITDA. We seek opportunities where we can leverage our deep expertise in valves,
actuators, brakes and control technology to differentiate our products. These niche markets
are poised to drive continued growth of 5% per year or more. During our Capital Markets Day
on 5 September 2024, we shared further insights into the market segments we have chosen
to fuel this profitable growth.
Industrial Brakes
Kendrion is a leading player in both permanent magnet and
spring-applied brakes. With these brake technologies closely
integrated into electromotors, the accelerating transition
towards electrification presents Industrial Brakes (IB) with
substantial opportunities. Although 2024 revenue was under
pressure due to weak markets for machine-building equipment,
we remain optimistic about IB’s future, anticipating substantial
long-term, profitable growth. Our focus is on high-potential
applications such as industrial robots, collaborative robots,
wind turbines, logistics, and other key segments.
Industrial Actuators and Controls
In Industrial Actuators and Controls (IAC) we have identified
a range of niche segments with strong, profitable growth
opportunities. These include induction heating systems for
industrial processes, industrial locks for professional kitchens,
laboratory equipment and parcel lockers, safety valves for
nuclear power plants, and solenoids for high-voltage circuit
breakers. With Kendrion’s renewed focus on industrial
applications, IAC is well-positioned to capitalize on these
opportunities.
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Annual Integrated Report 2024
China
Despite the relatively subdued local economy, we achieved
solid double-digit revenue growth, driven by the ramp-up
of several product lines, particularly in smart actuation for
shock absorbers in electrical vehicles. The project pipeline
supports ongoing growth, and the Chinese market offers
substantial additional opportunities for continued expansion.
Our 28,000 m
2
production facility at the renowned Suzhou
Industrial Park (SIP) is ready to support several more years of
double-digit revenue growth. selling ACES-related products.
This strategic move aligns with our focus on products
facilitating the shift towards cleaner energy.
ACTUAL
12.0%
TARGET AS FROM 2027
23-27%
ACTUAL
12.3%
TARGET FROM 2025
15-18%
ACTUAL
59%
TARGET
>50%
Return on
investment
1, 2
EBITDA margin
2
Dividend pay-out
1
Invested capital excluding intangibles arising from acquisitions.
2
Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measures, refer to reconciliation of non-
IFRS financial measures, starting on page 230.
Financial targets
As a pure-play industrial company, Kendrion is poised to be
significantly more profitable than in the past. We focus on
carefully selected opportunities within specific product niches
that leverage our expertise in valves, actuators, brakes and
control technology, driving an EBITDA of at least 15% of
revenue.
Aligned with our updated strategy and financial targets, we are
prioritizing profitability over growth, aiming for an EBITDA of
15-18% from 2025 and an ROI of 23-27% by 2027. As part of
our capital allocation plan, we have revised our dividend policy
to distribute at least 50% of normalized annual net profit (up
from the previous range of 35%-50%) starting from 2025.
26
Annual Integrated Report 2024
STRATEGY AND FINANCIAL OBJECTIVES
FINANCIAL REVIEW
27
Annual Integrated Report 2024
Key figures
2024 2023
EUR million Reported Adjustments Normalized Reported Adjustments Normalized
Revenue
301.5 – 301.5 309.0 – 309.0
Other income 1.7 – 1.7 0.1 – 0.1
Total revenue and other income 303.2 – 303.2 309.1 – 309.1
Changes in inventories of finished goods and work in progress (2,0) – (2,0) 0.3 – 0.3
Raw materials and subcontracted work 151.6 1.2 150.4 151.4 – 151.4
Staff costs 94.3 0.7 93.6 97.8 1.5 96.3
Impairments of fixed assets 1.2 1.2 – 0.0 – 0.0
Other operating expenses 24.2 0.0 24.2 20.1 0.4 19.7
EBITDA
1
33.9 (3.1) 37.0 39.5 (1.9) 41.4
Depreciation and amortization 19.1 – 19.1 17.3 – 17.3
Finance income and expense 6.0 – 6.0 6.1 – 6.1
Share profit or loss of an associate 0.1 – 0.1 – – –
Income tax expense 2.6 (0.1) 2.7 4.3 (0.8) 5.1
Profit for the period continuing operations 6.1 (3.0) 9.1 11.8 (1.1) 12.9
Amortization after tax 2.4 – 2.4 2.4 – 2,4
Net profit before amortization from discontinued operations 0.3 – 0.3 (1.4) – (1,4)
Profit for the period before amortization
1
8.8 (3.0) 11.8 12.8 (1.1) 13.9
Cash flows
Cash flow from operations
18.5 5.2 23.7 36.4 4.1 40.5
Cash flow from investing activities 25.8 (52.5) (26.7) (29.6) 0.4 (29.2)
Free cash flow
1
44.3 (47.3) (3.0) 6.8 4.5 11.3
1
Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measures, refer to reconciliation of non-IFRS financial measures, on page 230.
Group performance
Kendrion reported revenue of EUR 301.5 million from continued
operations in 2024, compared to EUR 309.0 million in the
previous year. Currency translation did not have a material
impact, and revenue at constant exchange rates decreased
by 2%, The Industrial Brakes business group generated
revenue of EUR 116.5 million, down 10% from the previous
year reflecting weak global industrial production and particularly
challenging conditions in Germany’s general machine building
sector. The decline was concentrated in the first half of the year,
with revenue dropping 22%, while the second half showed
improvement compared to the same period last year. Revenue
in Industrial Actuators and Controls reached 121.7 million,
a 5% decline from the EUR 127.5 million revenue in the
previous year. While IAC revenue was also affected by the
broader industrial downturn, this was partially offset by growth
in the medical and energy segments. The retained Automotive
business achieved revenue of EUR 63.3 million, up from
EUR 52.5 million in the prior year. The increase was entirely
driven by the ramp-up of new suspension projects in China.
Kendrion recorded EUR 1.7 million other operating income
(2023: EUR 0.1 million) primarily related to IT transition services
and rental income from the buyer of the divested Automotive
business, who continues to use two Kendrion-owned facilities.
Profit for the period ended with a loss of EUR 4.5 million,
compared to a profit of EUR 9.9 million n the previous year.
Profit from continued operations was EUR 6.1 million (2023:
EUR 11.8 million, while discontinued operations recorded a loss
of EUR 10.6 million (2023: loss of EUR 1.9 million). Profit from
discontinued operations includes EUR 2.8 million loss from
the operations up to the divestment completion date, and
a EUR 7.8 million loss on the disposal, including transaction
costs.
For a meaningful analysis of the group’s underlying financial
performance, Kendrion presents certain performance measures
on a normalized basis. The normalized performance measures
exclude costs and benefits outside the ordinary course of
business and include restructuring charges, asset impairments
and other items of an incidental nature. Definitions and detailed
reconciliations of these alternative performance measures to
the closest applicable IFRS performance measures are
available from page 230 of this annual integrated report.
Normalized EBITDA
1
from continued operations in 2024 was
EUR 37.0 million, compared to EUR 41.4 million in the previous
year. As a percentage of revenue, normalized EBITDA stood
at 12.3% (2023: 13.4%). Costs for raw materials and
subcontracted work decreased by EUR 1.0 million, or 1%,
driven by lower revenues, partially offset by the higher revenue
share from retained Automotive-related activities. Automotive
revenue has on average higher material costs as a percentage
of revenue compared to Industrial revenue. Normalized staff
costs fell by EUR 2.7 million, or 3%, as cost-saving measures
outweighed wage inflation. Conversely, normalized other
operating expenses rose by EUR 4.5 million, largely due to
reduced income from group services following the Automotive
divestment. This was partially offset by EUR 1.7 million in
additional other operating income, primarily from rent and IT
services provided to the divested Automotive activities.
Depreciation charges increased by EUR 1.8 million to
EUR 15.9 million, driven by the commencement of depreciation
for a new production line. Net finance expenses remained
stable at EUR 6.0 million, compared to EUR 6.1 million in 2023.
Normalized tax charges
1
decreased by EUR 2.4 million to
EUR 2.7 million, resulting in an effective tax rate of 22.9%
(2023: 28.3%). Normalized net profit from discontinued
operations amounted to EUR 0.3 million, improving from
a loss of EUR 1.4 million in the previous year. Normalized
profit before amortization
1
totaled EUR 11.8 million, (2023:
EUR 13.9 million). In 2024, continued operations incurred
EUR 3.1 million in costs outside the normal course of business
(2023: EUR 1.9 million). These costs were mainly related to
impairment charges and write-offs associated with Automotive
Sound customers. After-tax, the normalized costs amounted
to EUR 3.0 million (2023: EUR 1.1 million).
Cash from operating activities totaled EUR 18.5 (2023:
EUR 36.4 million). Cash flows from investing activities
amounted to EUR 25.8 million (2023: negative
EUR 29.6 million), bolstered by EUR 52.5 million in cash
receipts from the Automotive divestment finalized at the end
of September. In 2024, cash flows included EUR 5.2 million
(2023: EUR 4.5 million) related to normalized costs, primarily
for transaction and restructuring expenses linked to the
Automotive divestment. Total normalized free cash flow
1
was
negative EUR 3.0 million (2023: EUR 11.3 million). Continuing
operations contributed EUR 12.1 million to normalized free
cash flow, while discontinued operations had a negative impact
of EUR 15.1 million. The timing of the divestment, completed at
the end of the third quarter, prevented discontinued operations
from benefiting from the usual positive seasonal working capital
effects seen toward year-end. Additionally, a receivables
factoring program was terminated shortly before the
divestment, further influencing cash flow performance.
Total net debt
1
as of 31 December 2024 stood at
EUR 103.4 million, marking a decrease of EUR 41.6 million
compared to 31 December 2023. This reduction was primarily
driven by proceeds from the Automotive divestment, partially
offset by negative cash flow and the cash dividend.
1
Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measures, refer to reconciliation of non-IFRS financial measures, starting on page 230.
28
Annual Integrated Report 2024
FINANCIAL REVIEW
Total invested capital as of 31 December 2024 was
EUR 162.6 million (31 December 2023: EUR 217.5 million),
excluding goodwill and other intangibles from acquisitions.
Return on invested capital
1
was 12.0% (2023: 13.5%).
Liquidity position
Kendrion’s liquidity position comprises freely available cash
balances and undrawn credit facilities. As of 31 December
2024, cash balances amounted to EUR 8.5 million (2023:
EUR 20.6 million). Additionally, Kendrion had EUR 66 million
(2023: EUR 46 million) available under undrawn credit facilities.
The company’s primary credit facility is a EUR 75.0 million
agreement with HSBC Bank and ING Bank, which runs until
26 April 2027. The facility is subject to certain covenants,
including a maximum leverage ratio of 3.25, with a temporary
spike to 3.75 under certain conditions. Kendrion’s leverage
ratio1 based on the definitions in the facility agreement as of
31 December 2024 was 2.7 (31 December 2023: 2.7).
Research & Development
R&D expenses for 2024 amounted to EUR 14.8 million
(2023: EUR 13.5 million), of which EUR 11.4 million (2023:
EUR 11.7 million) related to staff costs. An additional
EUR 0.7 million in R&D expenses (2023: EUR 0.0 million)
was capitalized on the balance sheet. R&D costs represented
4.9% of revenue in 2024 (2023: 4.4%).
The Kendrion Group employed 145 FTE in R&D during the year.
Key R&D activities focused on advancing existing
electromagnetic brake technology for growth markets, including
automated guided vehicles (AGVs) and surgical robots.
Other activities included developing locking solutions for
industrial applications, refining inductive heating technology for
industrial processes, and finalizing the Automotive AVAS sound
application.
Management statement
Pursuant to article 5:25c of the Financial Supervision Act
(Wet op het Financieel Toezicht), the Executive Board confirms,
to the best of its knowledge, that:
(i) The consolidated financial statements present a true and fair
view of the assets, liabilities, financial position, and profit and
loss of Kendrion N.V. and its consolidated companies.
(ii) The Annual Integrated Report provides a true and fair
account of Kendrion N.V.’s position as of 31 December
2023, as well as the developments during the financial year
of Kendrion N.V. and its group of companies included in
the consolidated financial statements.
(iii) The Annual Integrated Report outlines the primary risks
faced by Kendrion.
The members of the Executive Board have signed the
consolidated financial statements in compliance with their
statutory obligations under Article 2:101, paragraph 2 of
the Dutch Civil Code and article 5:25c of the Financial
Supervision Act.
1
Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measures, refer to reconciliation of non-IFRS financial measures, starting on page 230.
29
Annual Integrated Report 2024
FINANCIAL REVIEW
OUTLOOK
Reflecting on 2024, trading conditions proved difficult overall.
The European economy, particularly Germany, remained weak,
while China continued to grapple with its property crisis and
deflation.
Additionally, lower interest rates have yet to drive significant
increases in capital investment or economic activity.
For Kendrion, 2024 was a transformative year, dominated by
the sale of our automotive business in Europe and the United
States to Solero Technologies, LLC (“Solero Technologies”) and
its affiliates. This milestone completed a significant repositioning
of the company, allowing us to focus entirely on industrial
growth opportunities in Europe, the USA, and China. The
transaction closed on 30 September 2024, and since then we
have concentrated on maximizing the potential of our new
strategic focus and improved profitability. To accelerate
progress, we have implemented a comprehensive agenda of
projects and initiatives, many of which were completed before
1 January 2025. Key actions included fully implementing
EUR 9 million in cost reduction measures, integrating the
retained portion of our automotive business into IAC, and
beginning our transition towards a streamlined, off-the-shelf,
cloud-based ERP system.
Therefore, as of 1 January 2025, our focus is exclusively on
industrial opportunities within our IB and IAC Business Groups
across Europe, China, and the USA. As a global niche leader,
we strategically invest in select industrial market segments that
support a minimum profitability of 15% EBITDA. Our approach
centers on opportunities where we can differentiate through our
expertise in valves, actuators, brakes and control technology.
Looking ahead to 2025, economic forecasts suggest that
industrial production in Europe and China will remain sluggish.
Our top priority is clear: achieving significantly higher profitability
than in the past, with a financial target of at least 15% EBITDA.
To this end, we are shifting from a growth-focused strategy to
one centered on profitability. Growth remains important, but
only if new business meets our 15% profitability benchmark.
The New Kendrion
Segments that align with this strategy include induction heating
systems for industrial processes, industrial locks for ovens,
laboratory equipment and parcel lockers, safety valves for
nuclear power plants, brakes for industrial and collaborative
robots and logistics, and smart actuation for shock absorbers
in electrical vehicles.
Despite ongoing economic challenges, we are confident in our
ability to achieve our new financial targets: an EBITDA of
15-18% from 2025 and an ROI of 23-27% by 2027. We also
commit to paying out annual dividends of at least 50% of
normalized net profit from 2025 onwards.
30
Annual Integrated Report 2024
Effective risk management
Effective risk management is critical to executing Kendrion’s
strategy, delivering long-term value for stakeholders, protecting
the company’s reputation, and ensuring sound corporate
governance. While Kendrion promotes entrepreneurship and
empowers management to exercise appropriate discretionary
powers, its risk management approach acknowledges that
exposure to risk is an inherent part of doing business.
Rather than attempting to eliminate all risks, Kendrion seeks
to balance fostering an entrepreneurial spirit with maintaining
a strong culture of risk awareness. The goal is to manage risks
in line with Kendrion’s risk appetite, reducing the likelihood and
impact of adverse events while staying competitive in
a dynamic business environment. The Executive Board
underscores that, while Kendrion’s risk management and
control systems are robust, they cannot guarantee the
achievement of objectives or entirely prevent material errors,
losses, fraud, or regulatory breaches.
Risk management framework
Kendrion’s risk management framework is seamlessly
integrated into its business practices, encompassing culture,
policies, processes, and behaviors. This comprehensive
approach comprises two main complementary elements:
a top-down strategic view of risk at the enterprise level and a
bottom-up view of risk at the operational level. Together, these
perspectives ensure a consistent and systematic approach to
identifying risks and implementing appropriate controls in line
with Kendrion’s risk appetite. By fostering a culture of risk
awareness, the framework empowers employees at all levels
to actively contribute to risk mitigation and management.
RISK MANAGEMENT
The Executive Board oversees the comprehensive risk
management and internal control system, ensuring alignment
with the company’s strategic objectives and activities. The
Board is responsible for embedding these systems into daily
operations and regularly reviewing their effectiveness. An annual
risk assessment is conducted to evaluate potential adjustments
to the risk management and internal control system as market
conditions and circumstances evolve. This assessment
includes a dedicated focus on fraud risks relevant to Kendrion.
The outcomes of the annual risk assessment are discussed
within Kendrion’s Management Team and subsequently shared
with the Supervisory Board.
To enhance risk management and oversight, risk owners are
assigned to the most significant risks identified. Each risk owner
is tasked with preparing and updating mitigation plans.
At the operational level, Kendrion’s plants maintain
internationally recognized certifications that assess and improve
their processes. Local management is responsible for
implementing internal controls and procedures, regularly
testifying their effectiveness, and maintaining full awareness of
operational risks. This approach ensures that internal controls
remain robust and aligned with Kendrion’s overarching risk
management framework.
CONTROL ENVIRONMENT
Annual corporate
risk management
cycle
Code of conduct
Speak-up procedure
Corporate policies
Internal audit
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M
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a
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Local entity
risk management
process
OPERATIONAL
LEVEL
Periodic business reviews
Planning & Control cycle
Local policies and procedures
I
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s
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s
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M
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ENTERPRISE
LEVEL
Project risk
management
process
Certificates
Quarterly
reporting
Risk
owners
Corporate
top 10
31
Annual Integrated Report 2024
Risk appetite
Kendrion’s risk management framework balances risk and
opportunity, while clearly identifying the Executive Board’s
appetite for risk. The Executive Board and the Management
Team periodically review and discuss Kendrion’s approach to
risk management, as the company’s risk appetite may evolve
in response to societal developments, geopolitical shifts, the
competitive and customer landscape, and internal changes.
Kendrion’s risk appetite provides an indicative bandwidth that
guides decision-making processes across the organization.
This bandwidth is defined for each of the following risk areas:
Strategic, Operational, Financial & Financial reporting and (Tax)
Compliance. The width of the bandwidth and its position on the
risk spectrum —from risk averse to risk taking —vary by risk
area. For instance, as illustrated in the visual, Kendrion adopts
a risk-averse approach to compliance risks, while the
bandwidth for strategic risks is significantly broader, enabling
a higher degree of risk-taking in pursuit of strategic objectives.
RISK AREA RISK APPETITE TARGET
Risk averse Risk taking
Strategic
Operational
Financial & reporting
Compliance
Entrepreneurial
Innovative
Punctual
Sincere
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Annual Integrated Report 2024
RISK MANAGEMENT
Risk overview
Risk area Risk name Risk description
Strategic
M&A activities or strategic projects fail to deliver results Mergers, acquisitions or strategic projects may not achieve the expected synergies and results or could
negatively impact the company.
Insufficient margin expansion Limited progress in expanding product margins through pricing strategies, cost efficiencies and added value
enhancements may constrain profit margin growth, potentially affecting the company’s ability to achieve
financial targets and maintain competitive positioning.
Insufficient new profitable business Insufficient lead generation and new customer acquisition in both new and existing profitable niches could
hinder sustainable revenue growth and the company’s ability to achieve its financial targets.
Operational IT hardware and/or software issues or implementation delays Issues with IT hardware, software, or implementation delays could disrupt system transactions, create data
gaps, or fail to meet business requirements, leading to potential revenue losses or increased costs.
IT and cyber security risks Cyber risks, such as failures in information systems or unauthorized access leading to the alteration,
destruction or theft of data, could cause business interruptions, loss of confidential data, or damage to
the company’s reputation.
Increased customer order volatility Increased volatility in customer orders, including larger deviations in quantities or project cancellations,
could lead to missed revenue opportunities and higher operational costs.
Intellectual property protection Insufficient protection of intellectual property could allow potential competitors to use or copy our products,
potentially undermining growth and impacting product margins.
Compliance CSRD compliance Failure to fully comply with CSRD regulations could result in reputational damage, commercial setbacks, and
possible legal and financial penalties.
In addition to the key risks outlined in the table above,
Kendrion explicitly identifies risks associated with financial
reporting, climate change, tax compliance, and fraud. Each of
these risk areas, along with their corresponding key risks, will
be elaborated on in more detail.
Strategic risks
M&A activities or strategic projects do not deliver results
Strategic risks arise when mergers, acquisitions, or internal
strategic projects fail to deliver the anticipated benefits, such
as margin expansion, cost reductions or the realization of
synergies. This could result in inefficiencies, missed financial
targets, or a loss of stakeholder confidence.
Kendrion recognizes the importance of planning and executing
strategic changes, as well as remaining flexible to adapt to
changing circumstances. For strategic projects, including M&A,
dedicated oversight teams are established to ensure focused
execution and accountability. Additionally, regular reviews
of actions related to strategic projects, such as the sale
of Automotive in 2024, are conducted to monitor progress,
address bottlenecks, and ensure alignment with strategic and
financial objectives. Kendrion also undertakes an in-depth
annual strategic review process in which concrete strategic
options are evaluated. This includes a review of the M&A
strategy to ensure alignment with overarching business goals
and adjustments based on market conditions and strategic
priorities.
Insufficient margin expansion
Failure to make sufficient progress in expanding product
margins through pricing strategies, cost efficiencies, and
added-value enhancements can limit profit margin growth,
potentially leading to missed financial targets, eroded
shareholder confidence, and a weakened competitive position
in the market. Kendrion actively invests in innovative solutions
to enhance product differentiation, support premium pricing
and address customer needs. Cross-functional teams foster
collaboration between commercial and operational
departments, ensuring strategies are aligned to improve or
protect margins. The company pursues ongoing initiatives to
reduce costs across production, operations, and the supply
chain, by leveraging approaches such as automation, material
optimization, and supplier renegotiations.
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Annual Integrated Report 2024
RISK MANAGEMENT
To monitor progress, Kendrion conducts regular reviews of
pricing strategies, cost reduction efforts, and value addition
initiatives using clearly defined KPIs. This enables the timely
identification of gaps and the implementation of corrective
actions, ensuring continued progress toward financial and
strategic goals.
Limited new profitable business
Insufficient lead generation and new customer acquisition in both
new and existing profitable niches could hinder sustainable
revenue growth, potentially compromising the company’s ability
to meet financial targets, reducing market share, and weakening
its long-term competitive position. To address this, Kendrion
develops and implements focused marketing campaigns tailored
to specific profitable niches, leveraging market insights to identify
and engage high-potential customers. The commercial
organization is supported by advanced CRM systems that
optimize lead generation and improve conversion rates.
Additionally, Kendrion provides continuous training and resources
to its sales teams, enhancing their ability to identify opportunities,
pitch effectively, and secure contracts with both existing and new
customers. To explore growth opportunities, annual strategic
meetings are conducted to evaluate potential entry into adjacent
or emerging niches with strong profitability prospects.
Operational risks
IT hardware and / or software issues or implementation
delays
Issues with IT hardware, software, or implementation delays
pose significant risks to business operations. Such challenges
could lead to transaction failures, missing or corrupted data, and
the inability to meet business requirements. The consequences
include operational inefficiencies, revenue loss, increased costs,
and a reduced ability to serve customers effectively. To mitigate
these risks, Kendrion adopts a proactive and structured
approach to IT system management.
Rigorous testing protocols are applied prior to deploying new
hardware or software to identify and address potential issues
before they impact operations. Critical systems are supported
by redundant infrastructure and robust backup solutions to
ensure business continuity in case of hardware failure or data
loss. To minimize implementation delays, Kendrion uses
detailed project planning with clear timelines and milestone
tracking. Collaboration between IT teams and business groups
ensures that system upgrades and implementations align with
operational needs. Additionally, employee training is conducted
to help users operate new systems effectively and mitigate
errors. Regular maintenance schedules, continuous monitoring
of IT performance, and strong vendor partnerships for timely
updates and support further enhance system reliability and
safeguard business operations.
IT and cyber security risks
Cyber risks, including failures of information systems and
unauthorized access, alteration, destruction, or copying of
data, could result in business interruptions, compromise
confidential data, and damage the company’s reputation.
Recognizing the critical importance of cybersecurity to
operational integrity and stakeholder trust, Kendrion intensified
its focus on cyber risks in 2024. Advanced security monitoring
tools were implemented to provide 24/7 threat detection,
network monitoring, and real-time alerts, ensuring swift
identification and response to potential threats. The company
also prioritizes robust contingency planning, including
redundant data storage, backup systems, and disaster
recovery protocols to ensure business continuity and data
integrity.
Additionally, Kendrion strengthens its defenses through regular
software updates, employee training on cybersecurity best
practices, and continuous vulnerability assessments. This multi-
layered approach combines cutting edge technology with
proactive risk management, safeguarding our digital
infrastructure and sensitive data while reinforcing Kendrion’s
commitment to secure, resilient, and responsible operations.
Increased customer order volatility
External events, such as economic downturns, uncertainty,
supply chain disruptions, or changes in regulations and
preferences, could lead to a structural decline in demand for
certain products. This may result in reduced order volumes or
project cancellations. Additionally, shortages of raw materials
for our customers may increase the risk of order adjustments
due to a lack of critical components, causing unpredictable
fluctuations in order levels. These variations require swift plant
capacity adjustments which can result in underutilized capacity
costs or production backlogs due to insufficient capacity.
Moreover, order volatility can drive increased inventory levels,
whether from canceled orders or to ensure readiness for
demand surges.
Kendrion actively strengthens customer relationships and
engages constructively to monitor order volumes and timing.
We synchronize frame contracts with suppliers and customers
wherever possible to reduce supply chain volatility. Contractual
terms are negotiated to secure price increases when volumes
drop and to ensure reimbursement for investments in
development costs, tools, and equipment in the event of
cancellations or unmet volume commitments. Demand levels
are closely monitored, and production capacity and purchase
volumes are adjusted to mitigate impacts on profitability and
working capital.
Intellectual property protection
Insufficient protection of intellectual property (IP) can allow
competitors to copy or use Kendrion’s products, potentially
impacting growth and eroding product margins. This risk could
result in a loss of competitive advantage, reduced market
share, and diminished profitability. To mitigate this risk, Kendrion
employs a comprehensive IP protection strategy. Key
innovations and product designs are safeguarded through
patents, trademarks, and copyrights, filed in all relevant
markets to ensure legal protection.
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Confidentiality agreements and secure data-handling protocols
are strictly enforced to minimize the risk of unauthorized
disclosure or misuse. Additionally, Kendrion actively monitors
competitor activities and responds decisively to any IP
infringement through appropriate legal action. These combined
efforts help Kendrion maintain its competitive edge, protect
product margins, and support sustainable growth by securing
the value of its intellectual property.
Financial & reporting risks
As a globally operating, publicly listed company, Kendrion
must comply with financial reporting requirements. Material
misstatements in reporting could negatively affect Kendrion’s
reputation and stock market value. Kendrion reports quarterly
to the market, following IFRS standards for financial figures.
Given the risk appetite in this area leans toward the adverse
side, Kendrion has established several controls in place to keep
risk exposure within acceptable boundaries.
It is critical that all operating entities report to the same
standards and deliver consistent, high-quality reports, in line
with applicable accounting and reporting principles. Local
planning and control cycles provide financial and non-financial
information to the group on a weekly, monthly, or annual basis,
following standardized reporting formats, outlined in the group
reporting manual. To ensure the integrity and accuracy of the
reported information without relying on manual controls, effective
general IT controls are crucial, such as proper segregation of
duties, access control for key systems, and source data
protection through proportionate change control procedures for
all accounting and reporting systems and their critical
infrastructure. While Kendrion previously mitigated sub-optimal
general IT controls by performing additional manual checks,
these manual controls have gradually shifted to automated IT
controls through continuous improvement actions, informed by
recommendations from external auditors.
the Code, and all applicable laws and regulations.
These include employment laws, data protection laws and
regulations, accounting standards, tax laws, health and safety
requirements, and corporate governance and statutory filing
obligations relevant to the countries in which it operates. Senior
management is responsible for promoting awareness and
ensuring adherence to these laws and regulations.
To support compliance, Kendrion develops and maintains
global and local policies. Its global policies include a range of
procedures and policies, such as the Code of Conduct, Insider
Trading Code, Speak-up procedure, among others. The Code
of Conduct, central to Kendrion’s operations, reflects the core
values of “The Kendrion Way,” an inspiring motto that lies at the
heart of the organization.
The Code of Conduct outlines the principles and expectations
that guide the behavior of everyone at Kendrion. To support
employees in navigating compliance dilemmas, Kendrion
provides guidance and training, enabling them to recognize
issues and report actual or suspected misconduct or
irregularities through the Speak-up procedure. For more details
about “The Kendrion Way”, refer to the People & Culture
section of this Annual Integrated Report.
Compliance with Kendrion’s internal policies, procedures, and
applicable local laws and regulations is regularly assessed by
the internal audit department managed by our finance function.
The Group Finance & Control department is responsible for
designing and executing the annual audit plan, which evaluates
the adequacy of Kendrion’s internal control systems. Audit
findings are reported to the Executive Board, and key insights
are discussed with the Audit Committee and external auditors
on a regular basis. In 2024, audit results were reviewed with
local management, and all identified control deficiencies were
effectively addressed.
Kendrion will continue to enhance its general IT controls with a
focus on increasing automation while balancing available
resources against the benefits of improvement.
On a quarterly basis, all responsible officers provide a letter of
representation confirming the correct and complete reporting
of financial and non-financial information, and the absence of
material violations of applicable laws, rules, regulations, and
internal policies, including the Kendrion Code of Conduct. This
process also involves continuous monitoring of upcoming
changes in accounting and/or reporting standards, as well as
laws and regulations, alongside periodic discussions with
finance leaders and senior management across the business
units. Kendrion acknowledges the financial and reporting risks
related to debt financing, credit exposure and fluctuations in
interest and exchange rates (refer to pages 159-162 and
following of the financial statements for a detailed outline of
Kendrion’s financial market risks and the policies in place to
mitigate these risks or their potential impact). Proportionate
mitigating measures are implemented for these risks and are
monitored
at various levels within the company.
Kendrion is also exposed to financial market risks, such as
interest rates and exchange rates. Kendrion makes use of
financial instruments to hedge against material market risk
exposure where feasible and in accordance with its treasury
policy. For Kendrion’s policies and objectives with regard to the
use of financial instruments, please refer to note (s) of the
financial statements from pages 159-162.
Compliance risks
Kendrion is committed to conducting business in full
compliance with its Code of Conduct, the values underpinning
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CSRD compliance
Failure to comply with the Corporate Sustainability Reporting
Directive (CSRD) regulations could result in reputational damage,
commercial losses, and legal or financial penalties. Non-
compliance risks undermining stakeholder trust, weakening
competitive positioning, and reducing access to capital from
sustainability-focused investors. Considering the size of its
operations, Kendrion is mindful of balancing the effort required to
meet CSRD obligations with the value and impact of the output.
To address this, Kendrion has established a dedicated
sustainability function to integrate CSRD requirements into
business processes while ensuring the reporting efforts remain
proportional to its scale and resources. Regular assessments
of the reporting framework ensure accurate, transparent, and
efficient disclosures. Advanced tools streamline the collection
and analysis of sustainability data, minimizing resource demands
while maintaining compliance. Collaboration with external
advisors and auditors keeps Kendrion aligned with regulatory
standards and industry best practices.
To further mitigate risks, Kendrion conducts employee
awareness sessions to enhance understanding of CSRD
requirements and foster a culture of accountability. Engaging
with stakeholders ensures evolving expectations are met, while
the company’s approach remains practical and value-driven.
These measures enable Kendrion to comply effectively with
CSRD regulations effectively, safeguard its reputation, and
reinforce its commitment to sustainable business practices.
Tax compliance risks
In line with its overall risk-averse appetite for compliance risks,
Kendrion specifically reiterates this approach for tax compliance
and associated risks. Tax risks arise from local tax rules and
regulations as well as international regulatory frameworks.
These include transfer pricing risks on intercompany cross-
border deliveries of goods and services, tax risks related to
acquisitions and divestments, tax losses, taxes carried forward,
permanent establishments and potential changes in tax law.
Such risks may result in financial impacts, including tax
expenses and payments, tax adjustments, accrued interest,
fines, litigation against Kendrion’s management, and damage to
Kendrion’s reputation with (local) authorities and stakeholders.
The Group Finance & Control department is responsible for
establishing and overseeing group wide tax policies. Potential
risks are periodically monitored and assessed based on their
likelihood of occurrence and potential impact on both local and
group-wide financial tax results. For the most significant tax
jurisdictions, Kendrion holds regular meetings with external tax
specialists to review the tax position, evaluate tax risks, and,
where applicable, assess the impact of potential changes in tax
laws and legislation. To actively mitigate risks, Kendrion involves
external tax advisors where specialist knowledge is required
and consults (local) authorities when interpretations of tax
requirements could have a significant impact.
Climate change
Society, shareholders, and other stakeholders are placing
greater emphasis on environmental challenges and the impact
of climate change, driving demand for more sustainable
operations, solutions, and products. The socioeconomic effects
of climate change, combined with new regulations and
initiatives such as the CSRD, present Kendrion with both
challenges and opportunities for its product portfolio. Besides
the potential direct impact of climate change on Kendrion’s
facilities, there can be as well broader consequences such as
extreme weather events can disrupt supply chains, delay
production, cause inefficiencies, and lead to inefficiencies and
material shortages.
Rising material costs and potential government measures, such
as carbon taxes, are expected to increase supply chain
expenses. The ultimate effect on Kendrion will depend on
whether these cost increases trigger industry-wide pricing
adjustments, including changes to sales prices. Climate change
also drives shifts in customer preferences and demand
patterns, creating both risks and opportunities. These shifts
may open new markets for sustainable solutions while requiring
adaptation to evolving expectations and regulations. Revenues
from products like inductive heating control units,
electromagnetic brakes for wind turbines, and safety valves for
nuclear power plants are expected to grow. Conversely,
revenues tied to products such as those for combustion engine
vehicles are likely to decline as the market transitions to cleaner
energy solutions. On balance, Kendrion’s Business Groups are
well-positioned to capitalize on the global shift toward
electrification of industrial processes, reducing reliance on fossil
fuels, and lowering greenhouse gas emissions.
The divestment of Kendrion’s European and American
Automotive activities as of 30 September 2024 has significantly
decreased its exposure to the internal combustion engine
market. Aligned with CSRD requirements, Kendrion remains
committed to reducing its carbon footprint through renewable
energy adoption, energy conservation, waste reduction, and
increased recycling. The company continues to invest in a
responsible product portfolio, supporting customers in
achieving their sustainability and emission reduction goals.
These efforts reinforce Kendrion’s commitment to sustainability,
long-term growth, and resilience.
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Fraud
With its global footprint, Kendrion is exposed to a broad
spectrum of fraudulent activities. As an industrial production
company, the most significant fraud risks are identified in areas
such as the supply chain, where risks include kickbacks, shop-
in-shop arrangements, bribery, and false invoices; inventory and
asset management, which may involve theft and manipulation;
administrative processes, including fraudulent payments and
falsified records; and cyberattacks. Fraud can result in a range
of consequences, from minor financial loss due to petty theft of
(office) materials to significant financial losses, damage to the
organization's reputation, and a loss of customer trust,
particularly in jurisdictions with strict anti-fraud regimes and
legal penalties. Fraud risks are explicitly included in Kendrion’s
annual corporate risk assessment as a separate category,
ensuring active monitoring of fraud risk developments and
raising continuous awareness amongst (senior) management
about the importance of fraud prevention.
Kendrion has implemented a range of measures to significantly
reduce its exposure to fraud. A core element of these measures
is the restriction of access— both physical and digital—to only
the areas necessary for employees to carry out their daily tasks,
coupled with segregation of duties (SoD) to ensure that
essential checks and balances are not concentrated in the
hands of a single individual. Both user access and SoD are
reviewed annually and adjusted to align with the company’s
risk appetite if any changes occur. A considerable number of
general IT controls have been put into place around user
access and SoD; however, some deficiencies in the design
and effectiveness of these controls still exist. Where such
deficiencies are identified, Kendrion has additional fraud-
detecting and preventing measures in place, such as variance
and margin analysis, as well as comprehensive reviews of key
master data changes.
Simultaneously, Kendrion continues to refine and enhance the
design and effectiveness of its IT controls. In addition to access
management and SoD, Kendrion has established an
authorization matrix to clearly define responsibilities and
authorization limits for each function within the company. This
matrix ensures that the appropriate employees are involved in
processing information or making decisions that carry potential
(fraud) risk. Every employee is introduced to Kendrion’s Code
of Conduct (CoC) when they join the company, with the CoC
specifically addressing common forms of fraud and the
expected employee behavior regarding these issues. On an
annual basis, the CoC (or relevant topics) is refreshed for all
employees through various communication formats such
as posters, videos, e-learning, workshops, and more.
In control statement
Based on the approach described above, the Executive Board
is of the opinion that, to the best of its knowledge:
■ the Report of the Executive Board provides sufficient
insights into any failings in the effectiveness of the risk
management and internal control systems;
■ the risk management and internal control systems provide
reasonable assurance that the financial reporting, including
tax, does not contain any material inaccuracies;
■ based on the current state of affairs, it is justified that the
financial reporting is prepared on a going concern basis;
and the Report of the Executive Board states those material
risks and uncertainties that are relevant to the expectation
of Kendrion’s continuity for the period of twelve months
after the date of the Report of the Executive Board.
While well-designed and implemented risk management and
internal control systems significantly reduce risks, they cannot
fully eliminate human errors, poor judgement, deliberate
circumvention of controls, fraud, legal violations, or
unforeseeable events. Additionally, risk management efforts
should be weighed against the costs of implementation and
maintenance.
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Kendrion’s governance framework is rooted in the statutory
requirements applicable to public limited liability companies in
the Netherlands. This framework incorporates the principles
and best practice provisions outlined in the Dutch Corporate
Governance Code, most recently updated on 20 December
2022 (the ”Code”), along with Kendrion’s Articles of
Association, last amended on 25 June 2020. Key topics from
the Code are addressed in the various sections of this
Integrated Annual Report. The Articles of Association, alongside
related policies such as the Supervisory Board Regulations and
the regulations for its committees form a framework for
Kendrion’s governance and operations. This framework
establishes a sound and transparent system of checks and
balances. For the Articles of Association, the Supervisory Board
Regulations, the regulation of its committees, and additional
information about Corporate Governance at Kendrion, please
visit our corporate website at www.kendrion.com.
Kendrion N.V.
Kendrion N.V. is a public limited liability company incorporated
under the laws of the Netherlands, with its corporate seat in
Amsterdam, the Netherlands. Details regarding Kendrion N.V.’s
share capital can be found in the section ‘Share and
Shareholder Information on pages 131-133 of this report.
As the ultimate parent company, Kendrion N.V. holds all shares
in Kendrion Finance B.V., a private limited liability company
incorporated under Dutch law, with its corporate seat in Zeist,
the Netherlands. Kendrion Finance B.V., directly or indirectly,
holds shares in all Kendrion’s operating companies, each of
which is directly or indirectly a wholly owned subsidiary.
Kendrion N.V. is not subject to the large company structure
regime. Additionally, no works council has been established at
the level of Kendrion N.V., nor is there a statutory requirement
to establish one. For information on works councils and
employee representation within certain Kendrion operating
companies, please refer to the ‘Sustainability Statements -
Social’ section of this Annual Integrated Report.
CORPORATE GOVERNANCE REPORT
Two-tier governance structure
The Executive Board, consisting of the CEO and the CFO, is
responsible for managing Kendrion, under the supervision of
the Supervisory Board. Members of the Executive Board and
the Supervisory Board are appointed and dismissed by the
General Meeting of Shareholders. The General Meeting of
Shareholders may amend the Articles of Association upon a
proposal by the Executive Board, subject to the prior approval
of the Supervisory Board. Such amendments require an
absolute majority of the votes cast at the General Meeting
of Shareholders.
Executive Board
The Executive Board is responsible for managing Kendrion and
ensuring the continuity of Kendrion’s long-term, sustainable
value creation strategy, objectives, results, and policies. This
includes defining strategies and plans that align with the goals
of the Paris Agreement to limit global warming. In carrying out
its duties, the Executive Board considers the impact of
Kendrion and its affiliated enterprise on people and the
environment, carefully balancing the interests of all relevant
stakeholders. A key aspect of the Executive Board’s
responsibilities is fostering and maintaining a culture focused on
sustainable long-term value creation. A strong, healthy
company culture, as outlined in the ‘Sustainability Statements -
Social’ section in this Annual Integrated Report, plays a vital
role in preventing misconduct and irregularities. The Executive
Board is accountable to the Supervisory Board and the General
Meeting of Shareholders. Certain decisions made by the
Executive Board require approval from the Supervisory Board.
In accordance with Kendrion’s Articles of Association, which
stipulate that the Executive Board must consist of at least two
members, the Supervisory Board determines the number of
members on the Executive Board. Executive Board members
are appointed by the General Meeting of Shareholders, at the
recommendation of the Supervisory Board. In line with provision
2.2.1 of the Code, Executive Board members are appointed for
a maximum term of four years, with the possibility of
reappointment for successive terms of no more than four years
each. The selection process for Executive Board members
takes into account the diversity objectives outlined in Kendrion’s
diversity policy, which can be found on the corporate website at
www.kendrion.com.
Other than upon proposal of the Supervisory Board, members
of the Executive Board can also be suspended or dismissed by
the General Meeting of Shareholders. In that case, a resolution
to suspend or dismiss Executive Board members is adopted by
an absolute majority, representing at least one-third of the
issued share capital. If the Supervisory Board recommends
suspension or dismissal, the resolution is adopted by an
absolute majority of the votes cast at the General Meeting of
Shareholders. Executive Board members comply with statutory
requirements regarding the number of supervisory or non-
executive roles they may hold in large enterprises.
For further details on the composition of the Executive Board
and its members, please refer to page 12 of this Annual
Integrated Report.
An Executive Board member refrains from participating in
deliberations or decision-making on any matter where they
have a personal interest that conflicts with Kendrion’s interests.
In such cases, the Executive Board member must promptly
report the conflict to the Chairman of the Supervisory Board.
Transactions involving a conflict of interest with an Executive
Board member require Supervisory Board approval. In 2024, no
transactions involving conflicts of interest with Executive Board
members occurred. Kendrion maintains a policy of not
providing loans or guarantees to Executive Board members.
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Annual Integrated Report 2024
Management Team
The Management Team comprises the CEO, CFO, and
executives with clear accountability for delivering all aspects of
the strategic plan. It includes Business Group Directors from
Industrial Actuators and Controls, Industrial Brakes, and the
Kendrion President Asia. Functional areas such as Information
Technology, Sustainability and Compliance, are represented by
the CIO and General Counsel within the Management Team.
The number of members of the Management Team is
determined by the Executive Board in consultation with the
Supervisory Board. For Management Team members not part
of the Executive Board, appointments and dismissals are made
by the Executive Board, following consultation with the
Supervisory Board. The diversity objectives outlined in
Kendrion’s diversity policy are considered when appointing
members to the Management Team.
The Management Team convenes regularly, and members not
part of the Executive Board are often invited to attend
Supervisory Board meetings.
Leadership Team
The Leadership team comprises the Management Team and
the executives reporting to its members, all playing a key role in
delivering Kendrion’s strategic and operational performance.
Consisting of approximately 35 executives, the Leadership
Team represents all operating companies of Kendrion across
Europe, the USA and Asia. For members of the Leadership
Team not part of the Management Team, appointments and
dismissals are made by the Executive Board.
The Leadership holds monthly online meetings and convenes
annually in person at the ‘Top 35’ meeting.
the Management Team, and the General Meeting of
Shareholders. Regular contact is maintained between the
Chairman and the CEO on matters within the Supervisory
Board’s scope. Similarly, the Chair of the Audit Committee
maintains regular contact with the CFO regarding the Audit
Committee’s responsibilities.
Supervisory Board members step down in accordance with a
rotation schedule adopted by the Supervisory Board. Members
whose term expires may be reappointed, with consideration
given to their performance,, the diversity objectives outlined in
Kendrion’s diversity policy for the Supervisory Board, and best
practice provision 2.2.2 of the Code regarding appointment and
reappointment periods. Each Supervisory Board member may
be dismissed by the General Meeting of Shareholders.
New members of the Supervisory Board undergo an
introductory program, providing them with an overview of
Kendrion’s business activities, including manufacturing
operations, and essential internal procedures and processes
required for fulfilling their duties as Supervisory Board members.
Regular meetings of the Supervisory Board typically involve the
attendance of the Executive Board and, periodically, members
of the Management Team. The Supervisory Board also holds
independent meetings, without the Executive Board present.
The Company Secretary assists the Supervisory Board by
ensuring adherence to correct procedures, statutory
obligations, and the Articles of Association. The Company
Secretary also facilitates information exchange between the
Executive Board and the Supervisory Board, and assists the
Chairman in organizing Board affairs.
The Supervisory Board has established two committees: the
Audit Committee and the HR Committee (which combines the
Remuneration Committee and the Selection and Appointment
Committee).
Supervisory Board
The Supervisory Board supervises and advises the Executive
Board in executing its responsibilities, while overseeing
Kendrion’s overall development and performance. It prioritizes
the interests of Kendrion and its stakeholders, emphasizing the
effectiveness of risk management, internal control systems, and
the integrity and quality of financial and sustainability reporting.
The composition of the Supervisory Board ensures that its
members can operate critically and independently, free from
influence by each other, the Executive Board, the Management
Team, or any specific interests. Each member brings the
expertise, experience, and background required to perform
their duties, in line with the 'Profile' for the Supervisory Board,
and the diversity objectives outlined in Kendrion’s diversity
policy for the Supervisory Board. Both the 'Profile' and the
diversity policy are available on the corporate website at www.
kendrion.com.
The Supervisory Board currently comprises four independent
members, as defined by the Code. All members comply with
statutory requirements regarding the maximum number of
supervisory or non-executive functions in large enterprises.
The Supervisory Board’s composition also aligns with the
statutory provisions of the Dutch Gender Balance Act.
Members of the Supervisory Board are appointed by the
General Meeting of Shareholders upon the recommendation
of the Supervisory Board, serving a term of four years. The
Supervisory Board internally elects a Chairman from among its
members.
The Chairman presides over Supervisory Board meetings,
ensuring their effective operation, as well as that of its
committees. The Chairman also facilitates communication
between the Supervisory Board, the Executive Board,
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Annual Integrated Report 2024
CORPORATE GOVERNANCE REPORT
These committees are responsible for preparing decisions for
the Supervisory Board. The regulations outlining the tasks and
procedures of the committees can be found on the corporate
website at www.kendrion.com. For detailed information on the
composition of the Supervisory Board, its committees, and its
members, please refer to the section ‘Report of the Supervisory
Board’ in this Annual Integrated Report.
Annually, the Supervisory Board evaluates its own functioning,
the performance of its committees, and that of individual
Supervisory Board members. The results of this evaluation are
discussed among the members of the Supervisory Board, and
the Chairman subsequently informs the Executive Board as
appropriate.
Members of the Supervisory Board do not receive shares
or rights to acquire shares in Kendrion as compensation.
Kendrion does not provide loans or guarantees to Supervisory
Board members. In accordance with the Supervisory Board
regulations, a member may not participate in the deliberation
or decision-making process on any matter in which they have
a personal interest that conflicts with Kendrion’s interests.
In 2024, there were no transactions involving a conflict of
interest with any member of the Supervisory Board.
As of 31 December 2024, the following Supervisory Board
members hold shares in Kendrion: Mr. Van Hout (26,500
shares), Mrs. Slijkhuis (3,500 shares), and Mr. Doll (1,000
shares).
Diversity within the Executive Board,
Management Team, Leadership Team and
Supervisory Board
Kendrion places significant importance on fostering diversity
across its workforce, including the Executive Board, the
Management Team, the Leadership Team and the Supervisory
Board. As part of Kendrion’s 2024-2028 ESG program, the
Social and Human Capital pillar emphasizes advancing diversity
throughout the organization. Ambitious diversity targets, aligned
with Kendrion’s diversity framework, have been set for each
Business Group. Details of the framework and targets can be
found in the ‘Sustainability Statements - Social’ section of this
Annual Integrated Report.
A diverse range of competences, skills and backgrounds within
the Executive Board, the Management Team, the Leadership
Team and the Supervisory Board enhances decision-making
and contributes to long-term, sustainable value creation.
Kendrion prioritizes diversity aspects such as gender,
nationality, and background (including education and (work)
experience) as essential to its business. The company remains
committed to ongoing efforts to improve diversity across all
leadership levels.
According to Kendrion’s diversity policy for the Supervisory
Board, at least 33% must be women, and at least 33% must
be men. The current composition of the Supervisory Board,
with two female members and two male members, meets the
33% gender diversity target.
Gender diversity targets have also been set for Kendrion’s
Leadership Team and for the global so-called Indirect staff.
Kendrion is committed to reshaping the composition of both
groups so that, per 2028, at least 33% of the Leadership Team
and the Indirect staff will be women, and at least 33% will be
men. As of December 31, 2024, the Leadership Team
comprises [84%] men and [16%] women, while the Indirect
Staff comprises [29]% women and [71]% men. These figures
indicate that the targets for both groups have not yet been met.
In 2024, there were no changes to the Executive Board and
there was one change to the Management Team.
As a global company, Kendrion has also set nationality-related
targets. According to the diversity policy, the Management
Team must include representatives from at least two regions
where Kendrion operates. This nationality diversity objective for
the Management Team has been met. For the Supervisory
Board and the Executive Board, the objective is to maintain
appropriate nationality diversity. In the Supervisory Board one
member holds German nationality, reflecting Kendrion’s
significant operations in Germany.
Furthermore, Kendrion’s diversity policy includes a background
diversity objective. According to this policy, at least one member
of the Executive Board and at least three members of the
Management Team must have experience in international
industrial business. For the background diversity objective of
the Supervisory Board, please refer to the Supervisory Board
‘Profile’, available on Kendrion’s corporate website. The
compositions of the Executive Board, the Management Team
and the Supervisory Board align with their respective
background diversity objectives.
The Supervisory Board’s composition is both diverse and
experienced, reflecting a balanced participation of two female
members and two male members. The Executive Board
comprises qualified, knowledgeable, and experienced
members. The Management Team demonstrates a strong blend
of skills, nationalities, ages, backgrounds, and other relevant
factors.
Kendrion’s diversity policy outlines specific objectives that will
be explicitly considered – beyond functional requirements –
when selecting individuals for (re)appointment to the
Supervisory Board and Executive Board, as well as when filling
vacancies within the Management Team. When engaging
external recruitment consultants, Kendrion provides search
instructions underpinning the diversity policy. The diversity policy
is available on the corporate website at www.kendrion.com.
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CORPORATE GOVERNANCE REPORT
General Meeting of Shareholders
At least once a year, Kendrion convenes a shareholders
meeting. These meetings are convened by the Executive Board
and/or Supervisory Board. Additionally, meetings may be
convened at the request of shareholders jointly representing
at least 10% of Kendrion’s issued share capital, subject to
authorization by the competent Dutch court. Shareholders
holding at least 3% of the issued share capital have the right
to propose items for inclusion on the agenda. Kendrion will
generally include such items if a substantiated proposal, clearly
stating the matter to be discussed or a draft resolution, is
submitted in writing, at least 60 days before the meeting date.
Each shareholder is entitled to attend shareholders meeting in
person or by written proxy and may exercise voting rights in
accordance with the Articles of Association. Each outstanding
share carries one vote. Resolutions are adopted by an absolute
majority of votes cast unless otherwise specified by the Articles
of Association or applicable law.
Shareholders representing 59.17% (2023: 73.52%) of the total
number of shares entitled to vote were represented at the
General Meeting of Shareholders held on 15 April 2024.
For further details about the authority of the General Meeting
of Shareholders and Kendrion’s Articles of Association, please
refer to the corporate website at www.kendrion.com.
Special provisions relating to shares
Unless otherwise indicated, there are no restrictions on the
transfer of shares, the exercise of voting rights, or the term for
exercising those rights Additionally, no special controlling rights
are attached to shares. On 15 April 2024, the General Meeting
of Shareholders granted the Executive Board the authority to:
(i) issue shares or grant rights to acquire shares and restrict or
exclude pre-emptive rights in relation to such issuances of
shares; and (ii) acquire shares in Kendrion N.V., within the limits
prescribed by the Articles of Association and applicable
statutory provisions. This authority was granted for a period
of 18 months from the date of the General Meeting of
Shareholders (i.e. until 15 October 2025) and is subject to
the prior approval by the Supervisory Board.
Auditor
Before being presented to the General Meeting of Shareholders
for adoption, the annual financial statements, as prepared by
the Executive Board, must be audited by an external certified
public auditor. The General Meeting of Shareholders holds the
authority to appoint the auditor. On 15 April 2024, the General
Meeting of Shareholders appointed Forvis Mazars Accountants
N.V. for an initial three-year term, beginning with the financial
year 2024. The General Meeting of Shareholders may direct
questions to the external auditor regarding their opinion on the
financial statements. As a result, the external auditor is required
to attend and is entitled to address the General Meeting of
Shareholders.
Kendrion maintains an internal audit department managed by
our finance function, with reporting lines to the CFO. The
internal audit department, managed by our finance function,
evaluates the design and effectiveness of the internal risk
management and control systems. In line with the Code,
both the Executive Board and the Audit Committee of the
Supervisory Board are involved in preparing and approving
the internal audit plan.
The annual internal audit plan is submitted for approval to the
Executive Board and the Supervisory Board. Internal audit
reports are reviewed with the Executive Board and the Audit
Committee, and the external auditor is informed accordingly.
For further details on the Audit Committee and the performance
of its duties, reference is made to the ‘Report of the
Supervisory Board’ on pages 110.
For the management statement of the Executive Board,
required under article 5:25c of the Financial Supervision Act
(Wet op het Financieel Toezicht), please refer to the ‘Financial
Review’ on page 27.
Agreements in the meaning of the decree for
the implementation of article 10 of the takeover
directive (besluit artikel 10 overnamerichtlijn)
The credit facilities of Kendrion N.V. include a change of control
provision. An early repayment obligation is triggered if a party
acquires more than half of Kendrion’s issued share capital or
voting rights.
Corporate Governance Statement
This Corporate Governance Report, along with the section
‘Share and shareholder information’ on pages 131-133,
contains the information specified in the Decree for the
implementation of article 10 of the Takeover Directive.
Furthermore, when combined with the sections ‘Risk
management’ and 'Report
of the Supervisory Board' included in this Annual Integrated
Report, it should be considered as the Corporate Governance
Statement as required by the Decree on the contents of the
management report (Besluit inhoud bestuursverslag).
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CORPORATE GOVERNANCE REPORT
Relevant documents on corporate website
■ Articles of Association
■ Supervisory Board Regulations and Committee Regulations
■ Diversity Policy for the Supervisory Board, Executive Board
and Management Team
■ Profile for the Supervisory Board
■ Insider Trading Code
■ Policy on Bilateral Contacts with Shareholders
■ Code of Conduct
■ Speak-up Procedure
Taxes
Kendrion’s tax policy is based on the core values embedded in
Kendrion’s Code of Conduct and aligned with Kendrion’s
strategy and the rationale underlying the value creation pillar
‘Responsible Business Conduct’, which is part of Kendrion’s
global sustainability program.
Taxable profits are recognized in jurisdictions in which value is
created, in accordance with the applicable tax regulations and
standards, including the OECD Guidelines for Multinational
Enterprises and local transfer pricing and other applicable tax
regulations. Tax is not limited to corporate income tax but
also includes VAT, wage withholding tax, social security
contributions, dividend withholding tax, real estate tax and
any other taxes payable by Kendrion in the relevant
jurisdictions. Kendrion explicitly avoids tax practices that result
in double non-taxation, profit shifting, or the artificial transfer of
profits to low-tax jurisdictions and does not seek to establish
aggressive tax-driven structures that are not compliant with the
letter or spirit of applicable tax regulations. This means that
Kendrion does not pursue any aggressive tax planning or has
entities established in tax haven jurisdictions solely for tax
optimization purposes and without commercial substance.
Kendrion provides adequate transparency towards tax
authorities and builds and maintains a professional relationship
with them. When appropriate, tax authorities are consulted
in advance on certain material transactions or business
restructuring to, for instance, ascertain compliance with
the applicable tax regulations. Kendrion makes tax-related
disclosures in accordance with the applicable statutory
regulations and applicable reporting requirements and
standards, such as IFRS. Stringent controls are implemented
to identify, monitor and address (potential) tax risks, aiming to
mitigate and avoid these risks. Accredited tax advisors are
engaged in reviewing and preparing material corporate income
tax returns, if appropriate. Tax compliance is integrated into
Kendrion’s internal audit plan, with material tax risks and topics,
including Kendrion’s tax policy, reported and discussed within
the Audit Committee.
Kendrion takes responsibility and shows prudence regarding
corporate tax obligations. The effective tax rate of Kendrion
or any of its affiliates is not a key performance indicator for
Kendrion’s finance and tax department, nor do individual bonus
schemes contain effective tax rate performance targets.
Kendrion’s tax strategy and compliance are reviewed annually
by the Audit Committee, ensuring alignment with the
company’s ethical and strategic objectives. Additional
information about the reconciliation of the effective tax rate
can be found in the financial statements on page 199 of this
Annual Integrated Report.
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Annual Integrated Report 2024
CORPORATE GOVERNANCE REPORT
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Annual Integrated Report 2024
Content sustainability statements
SOCIAL 87
ESRS S1 – Own workforce 87
Introduction value & culture 87
Employees 88
Employees – Actions 88
Human Rights 89
Human Rights – Policies 89
Human Rights – Actions 89
Health & Safety 89
Health & Safety – Policies 89
Health & Safety – Actions 89
Health & Safety – Metrics & targets 90
Diversity 90
Diversity – Policies 90
Diversity – Actions 90
Diversity – Metrics & targets 91
Engaging with own workforce 91
Engaging with own workforce – Policies 92
Engaging with own workforce – Actions 92
Engaging with own workforce – Metrics & targets 92
Own workforce - Metrics & targets 93
ESRS S2 – Workers in the value chain 96
Policies 96
Actions 96
Metrics & targets 97
ESRS S4 – Consumers and end-users 98
Commitment to Consumer and End-User Well-Being 98
Policies 98
Actions 99
Metrics & targets 99
GOVERNANCE 101
ESRS G1 – Business conduct 101
Responsible Business Conduct 101
Policies 101
Actions 102
Metrics & targets 102
Reference Table 103
GENERAL 44
ESRS 2 General disclosure requirements 44
Introduction to sustainability 44
General basis for preparation 44
Strategy and ESG Program 47
Double materiality assessment 48
Impact, Risks and Opportunities 51
Value Chain Overview 58
Stakeholder engagement 59
CSRD Key figures overview 61
ENVIRONMENT 65
Climate Scenario Analysis 65
ESRS E1 – Climate Change 67
Our commitment to Climate Responsibility 67
Our Role in the Transition to Clean Energy 67
Policies 67
Actions 67
Metrics & targets 69
EU Taxonomy 75
ESRS E2 – Pollution 81
Materials 81
Hazardous materials 81
Policies 81
Actions 81
Metrics & targets 82
ESRS E5 – Resource Use and Circular Economy 83
Raw Material Lifecycle in Electromagnet Production 83
Policies 83
Actions 83
Metrics & targets 85
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Annual Integrated Report 2024
Introduction to sustainability
Sustainability is an important driver for how we operate as a
business. In the turbulent and unpredictable world we live in
today, with geopolitical instability and climate change effects
having an increasing impact on economies and populations,
the transition to a more sustainable world is pressing and more
urgent than ever. At Kendrion, we are eager to deliver our fair
share and help reducing the negative impact our activities have
on climate change. Recognizing that sustainability extends
beyond environmental concerns, we also place a strong
emphasis on social and governance aspects. Our people are
the driving force behind our sustainability journey, and we need
good governance for enabling right decision-making upholding
ethical standards and promoting responsible business.
Together, these pillars from the foundation of our long-term
success and contribution to a sustainable future.
We realize that the extent to which meaningful contributions
can be made is subject to an unambiguous approach
throughout our industry’s supply chain. We are supported by
our customers, suppliers, and other business stakeholders,
who have also inspired and pushed the sustainability
transformation. We remain committed to scaling up our own
and our supply chain partners’ efforts.
Kendrion´s 2024 - 2028 ESG program forms an integral part of
our strategic plan and our short- and longer-term objectives.
Our ambition to continuously improve our sustainability
performance required cultural and organizational changes.
Our program and its ambitions are aligned with our
organizational structure in which decision makers are
empowered to prioritize and fundamentally enhance our
sustainability performance. Sustainability objectives have been
GENERAL
ESRS 2 General disclosure requirements
cascaded to our Business Groups and have been made an
explicit component of performance-based remuneration
schemes of Kendrion´s management team. For more
information on remuneration for our Executive Board and the
Supervisory Board, please refer to the Remuneration Report on
pages 115 to 130.
We are confident that our 2024 - 2028 ESG program serves
the long-term interests of our stakeholders, including the
communities where we operate. With increasing sustainability
demands, we remain motivated to further sharpen, strengthen,
and execute our ambitions and strategy in this area.
In the following sections of this Annual Integrated Report, we
explain how we identify impacts and risks through a double
materiality assessment. For detailed information on each topic,
including available policies, actions, targets, and performance
data, we refer to the sections under ‘Environment’, ‘Social’ and
‘Governance’.
General basis for preparation
General framework and data selection
Currently, the Corporate Sustainability Reporting Directive
(CSRD) has not yet been transposed into Dutch national law
and the final outcome currently remains uncertain. Depending
on the timing hereof, reporting under the CSRD may apply
retroactively to financial year 2024. Kendrion is prepared to
comply with mandatory requirements or voluntarily report for
this financial year 2024. Under the CSRD, we are required to
report in accordance with the European Sustainability Reporting
Standards (ESRS) as issued by the European Financial
Reporting Advisory Group (EFRAG) and the sustainability
statements have been prepared with reference to these
standards. All data points, as included in this Annual Integrated
Report in the respective E, S and G sections have been
assessed as material to us according to our Double Materiality
Assessment (DMA). Our sustainability statement addresses the
Impacts, Risks, and Opportunities (IROs) associated with our
operations, as well as those stemming from our upstream and
downstream value chain.
Reference is made to the relevant pages 48 to 51 of this Annual
Integrated Report for more information on our DMA
methodology and scope limitations. All greenhouse gas
datapoints (GHG Scope 1-3) are reported based on the
Greenhouse gas protocol. Scope 3 emissions for the upstream
value chain have been calculated using a cost-based
methodology with the support of a Scope 3 Analyzer tool.
Further information on the calculation of Scope 1 to 3 can be
found on the pages 71 to 72. Our 2024 waste hierarchy data
and Scope 3 calculations are subject to a high level of
uncertainty. The 2024 waste hierarchy is estimated based on
reported data from 2023, as the required information is not
available in time for the year-end audit. Further details can be
found in Chapter ESRS E5 – Resource Use and Circular
Economy. Scope 3 data is considered more uncertain than
other datasets due to the cost-based methodology, which is
influenced by market price fluctuations. Additional information
on Scope 3 can be found in Chapter ESRS E1 – Climate
Change.
The policies outlined in this Integrated Annual Report apply to
the entire company unless stated otherwise in specific chapters.
In general, these policies are prepared by or with the
involvement of the General Counsel, adopted by the Executive
Board and, where required, approved by the Supervisory Board.
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Annual Integrated Report 2024
They are accessible to all our employees via our internal
Intranet and, if required, available to external stakeholders on
our corporate website.
We use the ESRS reference claims for most of the general
information and material topics, including economic
performance, anti-corruption, energy efficiency, emissions to air,
occupational safety and health, non-discrimination and equal
opportunities, and gender pay gap. For the material themes
‘responsible procurement practices’, ‘training and education’,
and ‘disability’ Kendrion has developed its own indicators.
Data used has been collected from the existing management
and reporting systems. Any estimates or forecasts included are
explicitly referred to as such.
The time horizons short-, medium-, and long-term were
established based on Kendrion´s risk assessment and are
defined as follows: short-term as one to two years, medium-
term as three to five years, and long-term as more than five
years.
In each of the E, S and G section of the sustainability
statements we provide further references to the definitions and
scope of reporting used for each of the data points. This Annual
Integrated Report has been reviewed to confirm that no
classified information has been omitted.
Kendrion ensures compliance with CSRD by conducting due
diligence processes, integrating double materiality principles to
identify and manage sustainability related IROs. Our approach
includes value chain analysis, stakeholder engagement,
financial materiality assessments, and continuous monitoring of
structural changes. While not yet fully integrated into our overall
risk management, we are actively working towards alignment
with corporate risk frameworks and conducting resilience
analyses.
Core Elements of Due Diligence Paragraph in the sustainability
statement
a) Embedding due diligence
in governance, strategy and
business model
General basis for preparation;
Remuneration report (not in
sustainability statement); Double
materiality assessment; Impact,
Risks and Opportunities
b) Engaging with affected
stakeholders in all key steps
of the due diligence
General basis for preparation ;
Stakeholder engagement
c) Identifying and assessing
adverse impacts
General basis for preparation ;
Double materiality assessment;
Impact, Risks and Opportunities
Core Elements of Due Diligence Paragraph in the sustainability
statement
d) Taking actions to address
those adverse impacts
Action chapters under ESRS E1,
ESRS E2, ESRS E5, ESRS S1,
ESRS S2, ESRS S4; ESRS E1
Metrics & Targets
e) Tracking the effectiveness of
these efforts and communicating
Metrics & Targets Chapters under
ESRS E1, ESRS E5, ESRS S1,
ESRS S4, ESRS G1
Strategy and 2024-2028 ESG program
Focus on projects that deliver on our environmental targets
Our Environment framework focuses on reducing the negative
impact of climate change by increasing energy efficiency and
use of renewable energy, reducing CO
2
e emissions and
strengthening pollution practices and resource use and circular
economy transitions.
A culture that empowers our people to contribute
The Social framework is centered around the well-being of both
our workforce and our customers and end-users. For our
employees, we prioritize maintaining a high-quality, safe work
environment. For our customers and end-users, we focus on
delivering products designed to ensure safety and promote
health.
Governance that enables responsible business
The Governance framework focuses on business conduct,
integrity, accountability, and transparency. Material themes
revolve around the principles of ethical business conduct.
■ Achieve a further 48%
1
reduction in CO
2
emissions
■ Establish reporting
frameworks for Scope 1, 2
and 3 reporting (including
disclosure)
Implement gender diversity
targets at Business Group level
for indirect staff
■ Sustainable sourcing:
Enhance supplier selection
and screening through
integration of ESG metrics
into sourcing process
■ Sustain ESG ratins from
EcoVadis and CDP
Read more >
p. 65 - 86
Read more >
p. 87 - 100
Read more >
p. 101 - 102
Environmental
Social
Governance
GENERAL
Table 1: ESG overview
1
Target has been recalculated excluding the divested Automotive business
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Annual Integrated Report 2024
Consolidation
The quantitative ESG data we present in this report include
the relevant data for the parent company Kendrion N.V., as well
as its (directly or indirectly) wholly owned subsidiaries, unless
explicitly stated otherwise. Acquisitions in any calendar year
are reported as from the effective date of the acquisition.
The scope of the sustainability statement is fully aligned with
the scope of the financial statement. Both financial and non-
financial reporting are prepared using the same boundaries,
for consistency and comparability in accordance with the
requirements of ESRS. The only metric in our reporting that
extends beyond our consolidation scope is Scope 3 –
Purchased Goods and Services.
Divestments are reported distinctly as discontinued operations
in the calendar year in which the divestment is completed, and
the activity is no longer part of the consolidation scope of
Kendrion N.V. For financial year 2024, this applies to the ESG
data for our European and American automotive activities, that
were divested in 2024. For a comprehensive overview of all
entities included in the scope, please refer to page 228 of this
Annual Integrated Report.
Threshold for restatements
We follow the financial statements, in case of adjustments
to financial numbers. For adjustments to our ESG data, we
evaluate on a case-by-case basis as to whether we should
restate numbers. We clearly indicate where we use restated
data.
External review
All quantitative and qualitative data points in the tables in
sections E, S and G, as applicable, are covered by the ESG
review (limited assurance), performed by our auditor Forvis
Mazars Accountants N.V.. We refer to the auditor’s limited
assurance report on page 224 of this Annual Integrated Report.
How to read our sustainability statements
Our sustainability statements are structured into four overall
sections: ‘General’, ‘Environment’, ‘Social’, and ‘Governance’.
We have chosen to incorporate some of the strategy and
governance disclosures, as mandatory under ESRS, in other
sections of this Annual Integrated Report, where these are
better placed, given the context of that section. For ease of
reading, we have, where applicable, included references in
the sustainability statements to these other sections.
Leadership and Accountability in Sustainability
At Kendrion, sustainability is deeply integrated into our
governance framework, ensuring comprehensive oversight and
accountability across all leadership levels. The Executive Board
(EB) holds the primary responsibility for managing the
company's long-term value creation strategy and target setting,
with sustainability as a core element. The General Counsel,
a member of the Management Team (MT), represents
sustainability interests, ensuring that material topics and
updates are communicated promptly. Our Supervisory Board
(SB) oversees sustainability matters, including the DMA, IRO´s
and targets, through updates, reviews and discussions to
ensure well-informed decision making and effective oversight.
Our administrative, management, and supervisory bodies
integrate the assessment of impacts, risks, and opportunities
into strategy, major transactions, and risk management by
incorporating these factors into board discussions and risk
assessments. Through regular oversight and evaluation, we
ensure that trade-offs are considered to balance financial
performance, sustainability goals, and stakeholder interests.
Natural Capital
■ Renewable energy
■ Energy efficiency
■ CO
2
emission values
cradle to gate
■ Waste prevention /
Waste management
Social and Human Capital
■ Human Rights
■ Labour Rights
■ Diversity, equality
and inclusion
■ Occupational health
and safety
Responsible Business Conduct
■ Export controls and
economic sanctions /
Sanction monitoring
■ Environmental
management system
(ISO14001)
Materials
■ Percentage of recycled materials
■ Product less CO
2
impact than
comparable products
■ Reuse and recycling
■ Regulations - Conflict Minerals,
RoHS, REACH, VDA etc.
■ Hazardous substances
Ecology
■ Land, forest and water rights
■ Biodiversity, land use and
deforestation
■ Soil quality
Compliance
■ Whistleblower / Anti-Corruption
& anti-bribery
■ Data Security / personal data
protection
■ Intellectual Property
GENERAL
Table 2: Sustainable sourcing metrics
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Annual Integrated Report 2024
Stakeholder engagement (page 59) is a vital component of our
sustainability approach. Upon finalizing the DMA, the main
findings from stakeholder views are communicated to the
Leadership Team, General Counsel, and Executive Board,
facilitating informed decision-making. As part of our stakeholder
engagement in the DMA process, employee representation is
ensured through the involvement of the Human Resources
department. We continuously assess ways to improve the
involvement of our employees.
Both the Executive Board and Supervisory Board bring
substantial expertise relevant to Kendrion's sectors, products,
and geographic locations. Notably, all members of the
Executive Board and the Management Team have experience
in international industrial and/or automotive businesses or
adjacent industries. Our management and supervisory board
bodies leverage sustainability-related expertise through internal
knowledge and by engaging with external specialists every
so often. This ensures that sustainability considerations are
appropriately integrated into decision-making and governance
processes.
Our policies and related documents undergo a thorough review
process. Depending on their scope, these documents are
prepared and reviewed with the input from the General Counsel
and ultimately adopted by the Executive Board. Local policies
for certain jurisdictions or legal entities may not always require
the aforementioned adoption and approval process, in which
case they are handled under the responsibility of the local
management.
Sustainability is primarily managed by the Executive Board and
the General Counsel, with a dedicated Sustainability Manager
reporting directly to the General Counsel. The Sustainability
Manager facilitates communication across all entities within
scope and their relevant departments, ensuring that key
information is effectively relayed to the General Counsel and
the Executive Board.
We maintain a robust monitoring system for our sustainability
metrics and targets. Our Scope 1 and 2 emissions are
measured on a monthly or quarterly basis. Key Performance
Indicators (KPIs) related to health and safety, such as illness
rates, accident rates, and Lost Time Injuries (LTI) due to
accidents, are reported monthly to the Executive Board and to
the Supervisory Board on a quarterly basis.
Strategy and 2024-2028 ESG program
The completion of the divestment of our automotive activities in
2024 also marked the start of the implementation of our new
strategy ‘The New Kendrion’, with a full focus on two business
groups Industrial Actuators and Controls (IAC) and Industrial
Brakes (IB). The implementation of the new strategy ran parallel
to the introduction of our 2024 - 2028 ESG program. This
program is an integrated part of ‘The New Kendrion’ strategy.
For a further description of the new strategy, we refer to the
section ‘Strategy and Financial & ESG objectives’ of this Annual
Integrated Report (page 24).
The new 2024-2028 ESG program was launched at the
beginning of 2024. With this new program, we are building on
the 2019-2023 framework and have set ourselves new, targets
and objectives that align with our company and industry.
The targets are based on the reported values for 2023, which
have been restated to reflect the impact of the divested
automotive activities. To arrive at these new objectives, we
used various external and internal analyses of possible areas
for improvement and an evaluation of the targets from the
2019-2023 framework.
An overview of the key components and targets of the 2024-
2028 ESG program is included in the table on page 45.
Our current 2024 - 2028 ESG program includes advancing on
sustainable sourcing practices. We have developed new tools
to gain deeper insights into the actions of our Tier-1 suppliers
across key areas and to evaluate potential risk factors more
effectively.
This year, we implemented a new approach to sustainable
sourcing by introducing a supplier sustainability questionnaire,
which was sent to our top 50 suppliers. These 50 suppliers
represent around 19% of Kendrion´s annual sourcing volume.
This tool helps us assess each supplier's sustainability
practices and align them with our sustainability objectives.
By integrating sustainability into our sourcing processes, we
prioritize it as an important requirement, in order to meet both
stakeholder expectations and regulatory demands.
Additionally, we introduced an internal risk assessment process
that evaluates suppliers based on globally recognized indices.
This process allows us to identify and focus on high-risk areas
within our supply chain, exclusively among Tier 1 suppliers. For
those identified as high-risk, we’ve also used the sustainability
questionnaire to gain insights into their ESG practices.
Outside-in-effect
Inside-out-effect
Double Materiality Assessment
GENERAL
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Annual Integrated Report 2024
ESRS Matrix
S1 Own Workforce
S2 Workers in the value chain
G1 Business Conduct
S3 Affected communities
S 4 Consumers and end users
E3 Water and
marine resource
E4 Biodiversity
and ecosystems
E2 Pollution
E1 Climate change
E5 Resource use
and circular economy
Financial Materiality
Impact Materiality
This proactive engagement with suppliers aims to support not
only risk management but also the collaborative improvement
of social and environmental practices within our supply chain.
Our sustainability metrics displayed on page 7 cover key areas
including environmental impact, human rights, labour
standards, business conduct, materials sourcing, and
compliance.
GENERAL
The sustainable sourcing metrics do not directly correspond to
our material ESRS topics but cover a broad range of
sustainability related topics, we wanted to address to our
suppliers. These metrics were defined before the initiation of the
DMA process.
Based on the results of the DMA and the comprehensive
analysis of stakeholder perspectives, the ESG Strategy and
potential actions will undergo a thorough review in the coming
reporting years, with the aim to further enhance alignment with
CSRD requirements and improve overall compliance.
Double materiality assessment
DMA Introduction
In compliance with the new CSRD legislation, we have
conducted a Double Materiality Assessment (DMA) aligned with
the ESRS guidelines of 2023. This assessment is a critical
component of our strategy for CSRD reporting.
Building on previous materiality assessments focused on
sustainability-related topics, our approach has evaluated
materiality through two key dimensions: (i) "significance to
stakeholders" and (ii) "significance to Kendrion." These
assessments enabled us to identify the most relevant topics for
our activities, which have formed our previous (2019-2023)
ESG program and served as foundational input for our current,
first double materiality assessment (DMA).
In the last quarter of 2023, we initiated the first DMA step,
implementing a detailed, step-by-step process. We engaged
external experts to enhance the rigor of our approach. In the
first half of 2024, we have finalized the IRO data gathering,
which allowed us to complete the DMA process in the second
half of 2024, with a full assessment of the IROs.
In this chapter, we provide an overview of our DMA
methodology and present the results of our assessment. While
we believe the findings accurately reflect our impacts and risks,
we recognize the limitations of our methodology and the
potential for improvement. Therefore, we are committed to
regularly refining our DMA in line with the relevant and updated
EFRAG guidance.
DMA Methodology
We have developed our methodology with reference to the
principles in the ESRS and available guidelines. Learnings from
our previous materiality assessments, including stakeholder
dialogues, have been used to support the process.
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Annual Integrated Report 2024
Scoping boundaries
The DMA has been conducted for all Kendrion entities, with no
exclusions of any legal entity. The resulting IRO’s have been
evaluated across the two Business Groups collectively, as the
operational structures of Kendrion’s Business Groups are
uniform and do not necessitate separate evaluations, unless
specific, relevant IROs are identified.
As part of our commitment to maintaining a thorough DMA, we
actively monitor structural changes within the organization,
including mergers, acquisitions, divestments, or internal
reorganizations, to identify potential new IROs.
When significant organizational changes occur, we will perform
a detailed assessment to evaluate their impact on both financial
materiality and impact materiality. This assessment will focus
on:
■ New or former entities or divisions: Identifying potential
changed environmental, social, or governance risks, or
opportunities for positive impact.
■ Operational scale or geographic presence: Evaluating
changes that could affect the company’s risk exposure,
particularly in regions with varying regulatory or
sustainability challenges.
■ Integration of new technologies or business models:
Assessing opportunities for improved sustainability
performance or new financial risk.
Each of these factors is intended to be reviewed in accordance
with the principles of double materiality, ensuring both
sustainability impacts on external stakeholders (impact
materiality) and risks to financial performance (financial
materiality) are thoroughly considered.
As part of this structural change analysis, any newly identified
IROs intend to be incorporated into our materiality matrix,
involving:
■ Risk Identification: Assessing the emergence of new
sustainability-related risks, including supply chain
vulnerabilities and regulatory challenges.
■ Opportunity Exploration: Identifying avenues to leverage
sustainability trends, such as enhancing energy efficiency,
promoting circular economy initiatives, and innovating in
sustainable product design.
■ Stakeholder Engagement: Engaging with relevant
stakeholders, including employees, investors, suppliers,
and customers, to understand how structural changes may
influence their expectations and introduce new sustainability
priorities.
The divestment of our automotive business in Europe and the
USA has been evaluated for potential impacts on our DMA and
ESRS considerations. Our analysis confirms that the integrity
and conclusions of the assessment remain intact, as we have
retained automotive-related activities in China and the
European Sound and Electronics business in Germany and
Romania.
Despite the significance of the Automotive activities for our
companies, our industrial segment (the two Business Groups
IAC and IB) constitutes a substantial share of our financial
performance. This segment continues to drive significant
revenue and earnings, ensuring that the financial risks and
opportunities identified in our assessment remain valid and
resilient.
Fair labour conditions
Human rights
Business ethics & integrity
Sustainable procurement
Resource extraction
Responsible & innovative product portfolio
Resource price dynamics
Regulations & Policies
Pollution
Mobility & Logistics Management
Material & waste management
Inclusive workplace
Energy management & emissions
Employee health & safety
Employee development
Diversity
Customer engagement
Climate change
Financial Materiality Impact Materiality
Material topics
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50
Annual Integrated Report 2024
The environmental and social impacts from the remaining
Business Groups, including emissions, energy consumption,
and responsible supply chain practices, are comparable to
those of the automotive sector. Consequently, our DMA
remains robust, as these sustainability challenges and
opportunities are prevalent across our ongoing operations.
In this Annual Integrated Report, the sustainability data related
to the divested Automotive activities have been disclosed
separately. Please refer to pages 61 to 64 for ESG data on
these divested activities. Comparable data for the previous year
have been restated.
DMA Process
To conduct our DMA, we adhered to a structured process in
alignment with CSRD regulatory requirements. The initiative
commenced with the formation of a project team. As a
preparatory step for the DMA, we conducted a thorough
analysis of our existing status in collaboration with employees
who have knowledge of our sites and leveraging insights from
previous materiality assessments. This analysis was followed by
a thorough review of our value chain to identify key activities.
Additional data sources utilized include the MVO Risk Checker,
SASB Materiality Finder, and the MSCI Industry Materiality Map.
These public tools were also used to consider perspectives
from affected communities and identify potential IROs for all
environmental matters within our DMA.
The findings from this review provided essential insights for the
materiality assessment. We engaged stakeholders through
interviews to evaluate the impact and financial materiality of
various ESRS topics. Subsequently, the main project team
members convened to validate the assessment outcomes and
finalized the identification of material issues. A final validation
was conducted by Kendrion´s Management Team.
As part of our assessment, we considered dependencies
related to our suppliers and social actors, including employees.
However, since our operations are not reliant on biodiversity or
ecosystem services, we did not identify any material
dependencies on these factors within our value chain material.
We reviewed the locations of our sites using the recognized
biodiversity risk assessment tools, WWF Risk Filter. Our analysis
identified sites in biodiversity-sensitive areas, such as Atlanta
(USA), Amsterdam (NL), Maharashtra (IN), and Suzhou (CN).
However, our review did not indicate any significant impact from
our activities that would contribute to the deterioration of
natural habitats, the disruption of species, or the degradation of
designated protected areas.
The DMA processes between 2023 and 2024 differ significantly.
In the 2023 materiality assessment, material topics were
identified based on internal documents, Sustainable
Development Goals (SDG) relevant to Kendrion's industry, and
an evaluation of the most critical topics for the company. This
initial assessment has been the fundament of our ESG efforts
and reporting disclosures, establishing a solid basis for the
material topics we have focused on in recent years.
However, the approach in the recent DMA has evolved using
the framework provided by the ESRS. Consequently, we
gathered more detailed IROs, which were rigorously assessed
for materiality. Stakeholders were engaged through more
in-depth interviews, whereas previously their input on material
topics was captured through a numerical rating system. In this
DMA, we thoroughly explained the purpose of the assessment
to the stakeholders, allowing us to collect individual insights
from our stakeholders that were crucial for evaluating IROs and
were prioritized equally. An assessment was conducted to
determine whether the identified impacts and dependencies
resulted in risks and opportunities.
Stakeholder involvement
The stakeholder involvement process for our DMA has been
designed to ensure high-quality qualitative input, supplemented
by a limited range of stakeholder interviews. This process is
integrated with our ongoing stakeholder interactions.
Interviews were conducted with a selective number of
employees covering all Kendrion entities and group functions to
ensure a complete input for our DMA. Additionally, we engaged
with key external stakeholders, including our largest
shareholder, one of our major customers for our Business
Group Industrial Brakes, and our major supplier of copper wire.
Regular engagement with our lenders is also maintained due to
our sustainability linked financing arrangements.
Given the significant investment from our largest shareholder,
their expectations and priorities play an important role in
influencing our strategic direction. The relevance of
Environmental, Social, and Governance (ESG) topics for future
alignment highlights the value of this stakeholder's insights into
our sustainability initiatives and potential risks or opportunities.
Our major customer has articulated their commitment to
sustainability through direct discussions with our sales team,
expressing a clear expectation for collaboration with their
suppliers who prioritize sustainability. This customer has already
implemented sustainability measures, making them an ideal
partner for further collaboration and knowledge exchange in the
DMA.
Our primary copper wire supplier is critical to our operations, as
copper wire, alongside steel components, is essential to
produce electromagnets and valves. Their extensive market
knowledge and importance within our supply chain establish
them as a key contributor to the DMA.
The feedback collected from various stakeholders has been
validated and weighed equally in the DMA process. The insights
gained were largely consistent with the primary impacts, risks,
and opportunities identified already recognized by our
Sustainability team and the external consultancy firm
supporting us. Their input, informed by both industry
knowledge and familiarity with our organization, has been
instrumental in this process.
GENERAL
51
Annual Integrated Report 2024
Our direct collaboration with major customers in our two
Business Groups concerning their sustainability requests has
been ongoing, providing us with a clear understanding of the
expectations have for their supply chains. Further details
regarding supplier engagement are included in the Stakeholder
engagement section of this report (see page 59). We intend to
further expand our stakeholder assessment and integrate this in
our overall sustainability efforts.
Scoring and thresholds
In accordance with the ESRS guidance, we assessed our
impacts using the parameters of 'scale,' 'scope,' and
'irremediability' (applicable only for negative impacts). During
the evaluation of risks and opportunities, we analysed the
potential magnitude and likelihood for each ESRS.
The highest-rated risk or opportunity for each ESRS represents
the overall financial materiality for that specific standard, while
the highest-rated impact denotes the total value of impact
materiality.
We established materiality thresholds of 20 for impact
materiality and 10 for financial materiality out of a maximum
defined value of 25. This indicates that any impacts, risks, or
opportunities meeting or exceeding these thresholds, along
with their corresponding ESRS topics, are considered material
to Kendrion.
DMA Result
We have identified and assessed our impacts (positive or
negative) on the environment and society (impact materiality
assessment), as well as the sustainability related risks and
opportunities that we are exposed to (financial materiality
assessment). Next to that, all impacts have been identified as
‘actual’ or ‘potential’, and the same has been applied to risks
and opportunities.
The outcome of our assessment has been aggregated per
ESRS topic and is presented in the graph below. As the graph
shows, we consider the following topics as our most material
sustainability topics:
E1 Climate change
E2 Pollution
E5 Resource use and circular economy
S1 Own workforce
S2 Workers in the value chain
S4 Customers & end users
G1 Business conduct
Kendrion anticipates future improvements in the ongoing due
diligence and double materiality assessment process, including
robust engagement with affected stakeholders. Due diligence is
an on-going practice that responds to and may trigger changes
in the company’s strategy, business model, activities, business
relationships, operating, sourcing and sales contexts. The
double materiality assessment process may also be impacted
in time by sector-specific standards to be adopted. The
sustainability statement may not include every impact, risk and
opportunity or additional entity-specific disclosure that each
individual stakeholder (group) may consider important in its own
particular assessment.
The processes for identifying, assessing, and managing
impacts, risks, and opportunities has not yet been fully
integrated into our overall risk management and broader
management processes, as outlined in points (e) and (f) of
ESRS IRO-1. These processes will be reassessed in the
upcoming reporting year to determine how they can be
integrated into the overall risk and management frameworks of
Kendrion. This evaluation will help ensure alignment with the
company's broader risk management and strategic objectives.
Impact, Risks and Opportunities
The following tables present the sustainability related IROs
identified and assessed as material through our DMA process.
For each material ESRS topic, we outline the relevant sub-
topics associated with our impacts, risks, and opportunities.
We indicate whether these factors are actual or potential and
provide brief descriptions in the tables. Additional details on
how we address the effects of these impacts, risks, and
opportunities can be found in the subsequent sections covering
‘Environment,’ ‘Social,’ and ‘Governance.’ While our current
IRO assessment followed a pragmatic mid-level granularity
approach, future assessments will incorporate adjustments as
necessary to further align with the structure recommended
under ESRS 1, in preparation for future reporting periods.
The financial impacts of the identified IROs have not been
precisely defined or calculated. However, Kendrion has utilized
estimated bandwidths to assess potential impacts and support
decision-making processes. This will be further evaluated and
refined in future reporting periods as more data becomes
available. A resilience analysis, as required under ESRS 2 SBM-
3, was not conducted for this reporting period. Going forward,
we plan to assess the possibility to include a resilience analysis
to evaluate the robustness of our business model in addressing
these material impacts, risks, and opportunities, ensuring our
strategy remains resilient and adaptable to evolving conditions.
The IRO assessment will be reviewed and updated annually,
taking into account emerging risks, mitigating actions, and
ongoing developments in our business operations and supply
chain, in collaboration with internal and external stakeholders.
GENERAL
52
Annual Integrated Report 2024
E1 | Climate change
Climate change mitigation (*)
Impact or Financial
Materiality
Impact, Risk or
Opportunity
Actual or
Potential Topic Description
Location
in value chain Time horizon
Impact Negative impact Actual Product portfolio Less negative contribution to climate change by reducing GHG
emissions through product portfolio that enables a clean energy
transition (downstream)
Downstream Longterm
Impact Negative impact Actual Valves (Automotive) in cars
reducing CO
2
emissions
Less negative contribution to climate change by reducing GHG
emissions valves produced for the automotive industry reducing
CO
2
emission (downstream)
Own operations Longterm
Impact Negative impact Actual Own production & facilities Negative contribution to climate change through GHG emissions
from own production and facilities
Own operations Longterm
Impact Negative impact Actual Primary alumnium
production
Negative contribution to climate change through GHG emissions
from primary aluminium production in the upstream supply chain
Upstream Longterm
Impact Negative impact Actual Steel production Negative contribution to climate change through GHG emissions
from steel production in the upstream supply chain
Upstream Longterm
Impact Negative impact Actual Copper processing Negative contribution to climate change through GHG emissions
from copper processing in the upstream supply chain
Upstream Longterm
Impact Negative impact Actual Purchase of pre-processed
parts
Negative contribution to climate change through GHG emissions
from purchased pre-processed parts
Upstream Longterm
Impact Negative impact Actual Business travel Negative contribution to climate change through GHG emissions
from own business travel
Own operations Longterm
Impact Negative impact Actual Transport & logistics Negative contribution to climate change through GHG emissions
from transport & logistics in the upstream & downstream supply
chain steps
Upstream, Downstream Longterm
Impact Negative impact Actual Product use phase & end of
life
Negative contribution to climate change through GHG emissions in
the product use phase & end of life treatment (downstream)
Downstream Longterm
Impact Negative impact Actual Company cars (fleet) Negative contribution to climate change through greenhouse gas
emissions when commuting with own fleet (combustion engine)
Own operations Longterm
Financial Opportunity Potential Low-carbon products Increase revenue by retaining and attracting customers who are
increasingly demanding low-carbon products (low carbon footprint).
Own operations Longterm
Financial Opportunity Actual Growing market demand Increased revenue through growing B2B market demand for
environmentally friendly products
Own operations Longterm
Financial Risk Potential Rising energy market prices
for fossil fuels
Increased costs due increased prices for fossil-fuel based energy Own operations Longterm
GENERAL
53
Annual Integrated Report 2024
Climate change adaptation (to climate-related risks)
Impact or Financial
Materiality
Impact, Risk or
Opportunity
Actual or
Potential Topic Description Location in value chain Time horizon
Financial Risk Potential Extreme weather events
(supply chain)
Increased costs due to instability and material shortages through
materialized physical impacts of climate change and severity of
extreme weather events within the supply chain leading
Upstream Longterm
Financial Risk Potential Increased costs for
resources
Increased costs for raw materials through policy changes
deprioritizing energy intensive & non-renewable raw materials
Upstream Midterm
E2 | Pollution
Pollution of air, water and soil
Impact or Financial
Materiality
Impact, Risk or
Opportunity
Actual or
Potential Topic Description Location in value chain Time horizon
Impact Negative impact Actual Product portfolio enables
less pollution
Less negative contribution to reducing air pollution through a
product portfolio that enables a clean energy transition
Downstream Longterm
Impact Negative impact Actual Resource extraction and
processing
Contribution to water and air pollution through the release of
pollutants during resource extraction and processing of raw
materials in the upstream supply chain
Upstream Longterm
Impact Negative impact Actual Pollution in the use phase Contribution to environmental pollution caused by the release of
pollutants into natural ecosystems during the use phase of certain
products
Downstream Longterm
Impact Negative impact Potential Mining Contribution to environmental pollution (soil, water, air) due to
mining
Upstream Longterm
Financial Risk Potential Regulatory and policy
changes
Increased costs of keeping up and compliying with environmental
regulatory and policy changes
Own operations Longterm
Use of microplastics
Impact or Financial
Materiality
Impact, Risk or
Opportunity
Actual or
Potential Topic Description Location in value chain Time horizon
Impact Negative impact Actual Microplastic creation during
transport
Contribution to environmental pollution caused by microplastics
from transport that end up in natural ecosystems
Upstream, Own operations,
Downstream
Longterm
GENERAL
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Annual Integrated Report 2024
Use of substances of high / very high concern
Impact or Financial
Materiality
Impact, Risk or
Opportunity
Actual or
Potential Topic Description Location in value chain Time horizon
Impact Negative impact Actual Nuclear waste Contribution to environmental pollution caused by the release of
radioactive material due to inadequate storage of nuclear waste
Downstream Longterm
E5 | Resource Use & Circular Economy
Resource inflows (*)
Impact or Financial
Materiality
Impact, Risk or
Opportunity
Actual or
Potential Topic Description Location in value chain Time horizon
Impact Negative impact Actual Non-circular product
portfolio
Contribution to a linear use of resources through product design
that follows a linear life cycle.
Own operations, Downstream Longterm
Impact Negative impact Actual Natural resource depletion Contribution to natural resource depletion through the use of
various input materials and rare earth metals
Upstream Longterm
(*) E.g. packaging and other products, (critical) raw materials, rare earths, equipment
Resource outflows
Impact or Financial
Materiality
Impact, Risk or
Opportunity
Actual or
Potential Topic Description Location in value chain Time horizon
Financial Opportunity Potential "Sustainability" as
evaluation criterion for
strategic product
development
Increased revenue through increased demand by introducing
sustainability as a criterion for product development
Own operations Longterm
GENERAL
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Annual Integrated Report 2024
S1 | Own Workforce
Secure employment
Impact or Financial
Materiality
Impact, Risk or
Opportunity
Actual or
Potential Topic Description Location in value chain Time horizon
Impact Positive impact Actual Jobs create social
prosperity
Positive impact on employees by creating jobs and ensuring social
prosperity for the own workforce
Own operations Longterm
Gender equality & equal pay
Impact or Financial
Materiality
Impact, Risk or
Opportunity
Actual or
Potential Topic Description Location in value chain Time horizon
Impact Positive impact Potential Equal opportunities at work Positive impact on societal (gender) equality through leading by
example on equal opportunities in the workplace
Own operations Longterm
Impact Positive impact Actual Empower women in careers Positive impact on women and female employees by equal pay and
opportunities
Own operations Longterm
Financial Risk Actual Diversity in management
roles
Revenue loss through decreased team performance because of
non-diverse leadership positions.
Own operations Longterm
Inclusive workspace
Impact or Financial
Materiality
Impact, Risk or
Opportunity
Actual or
Potential Topic Description Location in value chain Time horizon
Impact Positive impact Actual International teams Positive impact on an inclusive workplace and cultural exchange
through diverse and internally focused teams
Own operations Longterm
Health & Safety
Impact or Financial
Materiality
Impact, Risk or
Opportunity
Actual or
Potential Topic Description Location in value chain Time horizon
Impact Negative Impact Actual Occupational accidents and
injuries
Negative impact on individuals who experience an accident at work
and get injured
Own operations Longterm
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Annual Integrated Report 2024
S2 | Workers in the value chain
Child and forced labour
Impact or Financial
Materiality
Impact, Risk or
Opportunity
Actual or
Potential Topic Description Location in value chain Time horizon
Impact Negative impact Potential Forced labour in metal
supply chain
Negative impact on workers in the upstream value chain due to
forced labour practices
Upstream Longterm
Impact Negative impact Potential Child labour in metal supply
chain
Negative impact on workers in the upstream value chain due to
regional practices like child labour
Upstream Longterm
S4 | Customers & End Users
Personal safety & comfort of consumers and end-users
Impact or Financial
Materiality
Impact, Risk or
Opportunity
Actual or
Potential Topic Description Location in value chain Time horizon
Impact Positive impact Actual Product portfolio (safety) Positive impact on safety of endusers during daily life situations
through own product portfolio
Downstream Longterm
Impact Positive impact Actual Product portfolio (health) Positive impact on health of endusers through own product
portfolio
Downstream Longterm
GENERAL
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Annual Integrated Report 2024
G1 | Business Conduct
Business ethics
Impact or Financial
Materiality
Impact, Risk or
Opportunity
Actual or
Potential Topic Description Location in value chain Time horizon
Financial Risk Potential Corruption and fraud Increased costs through cases of corruption and fraud Own operations Midterm
Impact Positive impact Actual Ethical business behaviour Positive contribution to ethical business conduct in regard to fraud
and corruption through various internal and external policies
Upstream, own operations,
downstream
Longterm
Financial Risk Potential Harassment and
Discrimination
Increased costs through cases of harassment and discrimination Own operations Longterm
Impact Positive impact Actual Ethical business behaviour Positive contribution to ethical business conduct in regard to
harassment and discrimination through various internal and external
policies
Upstream, own operations Longterm
GENERAL
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Annual Integrated Report 2024
• Resource extraction
Sustainable procurement
Sustainable products
Water management
Human rights
Labour conditions
• Emission own facilities
• Energy markets
• Legal regulations
Financing
Regulation & Policies
• Business travel
E-cars
• Health & safety
• Inclusive workplace
• Labour conditions
Customer engagement
Community involvement
• Business ethics & integrity
Employee development
• Market growth for
sustainable products
• Consumption /
disposal of products
• Transportation
OWN ENTITIES DOWNSTREAMUPSTREAM
• Transportation
Topics valid in upstream, own entities and downstream
INDEX
• Material
Non-material
Topic valid in upstream and own entities Environmental
E
Social
S
Governance
G
Recyclabe materials
Transportation
(ship, airplane, train, truck)
Climate change
Ecosystem preservation
Environmental pollution
VALUE CHAIN OVERVIEW
5
4 3
5 4
3
3
1
4
2
1
2
2 2
2
1
1 1 1
1 4
21
1
1
1
1
1
1
1
1
1
1
1
Business conduct
• Transportation
Increasing costs
Climate change
Pollution
Ecosystem preservation
Resource use and circular economy
Own workforce
Workers in the value chain
Affected communities
Consumers and end-users
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Annual Integrated Report 2024
STAKEHOLDER ENGAGEMENT
On a regular basis, and next to the stakeholder involvement in
the context of the DMA, we engage in an open and continuous
dialogue with our stakeholders about sustainability themes to
deepen our insights into their needs and expectations. This
regular engagement helps us to improve our global 2024-2028
ESG program, in both design and management and execution.
By doing so, we aim to build trust, identify trends, and address
critical issues, including the implications of climate change for
our business operations and products as well as the impact of
our operations on the environment and society.
Through dialogue, we provide transparency in our plans and
actions to reduce the negative impact of climate change and to
address other related challenges. When developing strategies
and mitigation plans, we always consider input provided by our
stakeholders.
Our key stakeholder groups include customers, suppliers,
employees, shareholders, local communities, technical
universities, and institutions of higher technical education. For
each group, our stakeholder engagement varies and includes
formal and informal channels that are being used with varying
degrees of regularity. Our key stakeholder groups are described
below as are the communication resources and channels used,
including the stakeholder group’s relevance to Kendrion’s 2024-
2028 ESG program.
Relevance
Communication sources
and channels Topics discussed
Relevance to Kendrion’s 2024-2028
ESG program
Customers
Kendrion’s customer base comprises industrial
companies that use our components to manufacture
a range of industrial applications as well as Tier 1
suppliers and OEMs in the automotive sector.
Kendrion’s customers are increasingly implementing
sustainability requirements for their suppliers.
Kendrion focuses on consistent compliance with
these requirements.
Customer and sales meetings, Kendrion
websites, contract meetings, press releases.
Engagement with customers takes place at
regular intervals.
Quality of products and services, Kendrion’s
2024-2028 ESG program and objectives,
customer satisfaction, waste, energy, water
use, use of rare earth materials, conflict
minerals, responsible business conduct, ISO
and IATF certification.
Obtain views and observations concerning
sustainability from the customer’s
perspective, further insight into customer
needs and expectations, sharing experiences
and best practices, continuous improvement,
and development of sustainability
contribution.
Suppliers
Kendrion is consistently looking for ways to increase
transparency in the supply chain and expects its
suppliers to adhere to the standards of the Kendrion
Supplier Code of Conduct and follows a consistent
approach towards the performance of supplier audits
to verify compliance. In addition, we have implemented
a sustainability questionnaire to gather more in-depth
information on the ESG commitment of our suppliers.
These efforts contribute to a continuous improvement
in compliance with the Supplier Code of Conduct.
Supplier Code of Conduct, supplier
sustainability and quality audits,
Kendrion websites, supplier, and contract
meetings.
Engagement with suppliers takes place at
regular intervals.
Quality of products and services, Kendrion’s
2024-2028 ESG program and objectives,
management of supply chain risks (e.g.
material shortages) and joint pursuit of
improvements in the supply chain,
responsible business conduct, Supplier
Code of Conduct, waste, energy, water use,
use of rare earth materials, conflict minerals.
Obtain views and observations concerning
sustainability from the supplier’s perspective
(incl. the improvement of transparency in the
supply chain), further insight into supplier
needs and expectations, sharing experiences
and best practices, continuous improvement
and development of sustainability
contributions.
Employees
Our talented and highly skilled employees play a crucial
role in the way in which Kendrion operates its business.
Kendrion fosters a culture that empowers its employees
to reach their full potential and to achieve the best
results. As reflected in ‘The Kendrion Way’ and the
Code of Conduct we create an open and inclusive
culture to recruit, motivate and retain a highly
diverse workforce that reflects the communities in
which we operate.
An engaged and committed workforce contributes to
the achievement of Kendrion’s financial and non-
financial targets.
Works Council meetings, meetings with
employee representatives, employee
satisfaction and culture surveys, workshops,
training courses, intranet, internal personnel
magazine, e-mail newsletters, feedback
meetings, staff and townhall meetings
Engagement with employees takes place
on a daily basis.
Kendrion’s 2024-2028 ESG program and
objectives, particularly regarding health and
safety, employability, training, and
development, employee satisfaction and
company culture, responsible business
conduct, compliance and ethical behavior.
Obtain views and observations concerning
sustainability from the employee’s
perspective, further insight into employees’
capabilities and motivations, strengthening
business sustainability culture, enhancing
employee commitment, participation, and
awareness
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Annual Integrated Report 2024
Relevance
Communication sources
and channels Topics discussed
Relevance to Kendrion’s 2024-2028
ESG program
Shareholders
The endorsement of sustainable development and
addressing ESG related issues is becoming increasingly
important for Kendrion’s shareholders. Kendrion
engages with its major shareholders and financiers,
not only concerning Kendrion’s 2024-2028 ESG
program and its material topics and objectives, but also
with respect to the ESG policies and activities of its
major shareholders and financiers. Kendrion provides
adequate transparency towards its shareholders and
financiers about climate change and reducing the
negative impact of climate change and addressing other
social issues, strategy, and financial performance.
General Meeting of Shareholders, analyst,
and investor meetings, conferences, Capital
Markets Day, press releases, Kendrion’s
corporate website Engagement with
shareholders takes place at least on a
quarterly basis.
Kendrion’s 2024-2028 ESG program and
objectives.
Obtain views and observations concerning
sustainability from the investor’s perspective
(incl. climate change and reducing the
negative impact of climate change and
addressing other social issues), further
insight into shareholders needs and
expectations, sharing experiences and best
practices, continuous improvement, and
development of sustainability contributions.
Local
communities
Kendrion is making a positive contribution to the
reduction of social and economic gaps. Kendrion
appreciates the importance of maintaining constructive
and appropriate contacts with local communities and
authorities.
Local meetings, Kendrion websites, open
days Engagement with local communities
takes place at regular intervals.
Communities’ participations and
investments.
Community connection, involvement and
participation.
Technical
universities and
institutions of
higher technical
education
Active engagement with students is key to
understanding their views and observations on
sustainability and forms a valuable platform for the
exchange of knowledge and experiences. Dialogues
with students are often inspirational and stimulate the
formulation of innovative sustainability goals and
ambitions, including our ambition to encourage
young talented female students to take an interest in
Science, Technology, Engineering and Mathematics
(STEM) related studies. These dialogues also raise
awareness among students about sustainability and
its importance.
Presence at fairs, organization of student
events, projects and internships engagement
with universities, schools, and institutes
takes place at regular intervals.
Kendrion’s 2024-2028 ESG program and
objectives (incl. advancement of gender
diversity), also with a view to creating
awareness and stressing the importance and
relevance of sustainability
.
Obtain
views and observations concerning
sustainability of new generation and raise
awareness.
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Annual Integrated Report 2024
KEY FIGURES OVERVIEW
The following section provides a comprehensive overview
of our ESG KPIs, presenting the figures for our continued
business compared to the previous year, alongside our targets.
To ensure comparability, the values for the previous year have
been recalculated, excluding the divested business. The
metrics of the stand-alone divested business of 2024 are
shown in a separate column in the table. A total including both
continued and divested business is also added to show to
combined metric for 2024. The European Sustainability
Reporting Standards do not specifically address the treatment
of acquisitions and divestments. The automotive business is
largely divested which in the financial statements is shown as
a discontinued operation. Management is of the opinion that
the continued operations for sustainability reporting purposes
are important as policies, actions, targets and metrics are
aimed at the future of the business. To offer transparency, we
have included, the metrics of the divested business up to the
moment of the effectuation of the divestment (30 September
2024), where possible. The data for the metrics mainly followed
the same reporting processes and procedures as the continued
operations data and the data for flow information such as for
example energy usage were largely collected during the year.
Ratio information using year-end information relates to the
continued business. Due to the sale, access to information
for the divested business after Q3, is limited, which affects
the possibility of the verification of these data. Consequently
estimations have been made where deemed necessary.
As a consequence the metrics provided in the divested
business column have a higher level of uncertainty than
the metrics in the 2024 column representing the continued
business. Further information is given below and also in
the ‘reporting definition & scope’ paragraphs.
Environmental KPIs:
For the divested business all presented figures in the divested
business column were reported as actual data, except for
Scope 3 values, which were estimated based on internal
reporting of 2023 and key allocations derived from the
development of added value between 2023 and 2024.
Product-related hazardous waste was not reported as actual
data at all, and waste management figures were estimated
using reported 2023 data and estimated based on added value
developments between 2023 and 2024. All values displayed
under E1 represent the consumption recorded from January to
September 2024.
Sustainability matter Value chain Time horizon UoM 2024 2023 Target 2028
2024 - Divested
Business
2024 - Divested
+ Continued
Business
Environment
E1 Direct Energy Consumption Own operations ST, MT, LT kWh 5,171,333 5,933,606 – 1,437,089 6,608,422
Indirect Energy Consumption Own operations kWh 11,088,152 9,662,829 – 9,411,894 20,500,046
Relative Direct Energy Consumption - Added value Own operations – 33,661 37,702 – 15,544 28,215
Relative Direct Energy Consumption - Revenue Own operations – 17,152 19,195 – 6,542 13,521
Relative Indirect Energy Consumption - Added value Own operations – 72,173 61,398 – 142,559 93,329
Relative Indirect Energy Consumption - Revenue Own operations – 36,777 31,259 – 59,998 44,724
Self-generated renewable energy - solar energy Own operations kWh 1,215,110 – – 0 1,215,110
GENERAL
Social KPIs:
For the divested business the information relates to former
employees of Kendrion. All presented figures in the divested
business column are based on actual data until Q3 2024.
In general, we start own work force ratio type of metrics of the
continued business by using the position of 31 December 2024
headcount figures. Some figures on the former workforce
(divested business) were not included due to the manual data
collection process occurring at year-end, by which time the
divested business had already been sold. For S1 all numbers in
the divested column represent the values using 30 September
2024 as a starting point. Except for illness, accidents, LTI,
people who left the company, employees that took family leave,
and the supplier audits, which represent cumulative values from
January to September 2024.
Governance KPIs:
These KPIs remain independent of the continued or divested
business and are therefore only reported under the continued
business.
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Annual Integrated Report 2024
Sustainability matter Value chain Time horizon UoM 2024 2023 Target 2028
2024 - Divested
Business
2024 - Divested
+ Continued
Business
Self-generated non-renewable energy - fossil sources Own operations kWh 1,621,879 – – 0 1,621,879
Scope 1 Own operations t CO
2
e 1,435 1,182 – 345 1,780
Biogenic emissions in Own operations t CO
2
e 33 35 – N/A 33
Scope 2 location-based Own operations t CO
2
e 6,018 5,993 – 4,356 10,374
Scope 2 market-based Own operations t CO
2
e 667 1,687 877 2,586 3,253
Total Gross indirect Scope 3 Upstream t CO
2
e 147,039 – – 53,669 200,708
3.1 Purchased Goods Upstream t CO
2
e 131,450 – – 49,117 180,567
3.2 Capital Goods Upstream t CO
2
e 7,170 – – 2,300 9,470
3.3 Fuel- and Energy Related Activities Upstream t CO
2
e 520 – – 204 724
3.4 Upstream Transportation and Distribution Upstream t CO
2
e 3,880 – – 337 4,217
3.5 Waste generated in Operations Upstream t CO
2
e 235 – – 130 365
3.6 Business Travel Upstream t CO
2
e 790 – – 502 1,292
3.7 Employee Commuting Upstream t CO
2
e 2,280 – – 1,005 3,285
3.8 Upstream Leased Assets Upstream t CO
2
e 714 – – 74 788
Relative Scope 1 Emission - Added value Own operations – 9.3 7.5 – 5.2 8.1
Relative Scope 1 Emission - Revenue Own operations – 4.8 3.8 – 2.2 3.9
Relative Scope 2 Emission - Added value Own operations – 4.3 10.7 – 39.2 21.2
Relative Scope 2 Emission - Revenue Own operations – 2.2 5.5 – 16.5 7.1
Total GHG (location-based) per net revenue
(tCO
2
e/EUR 1,000)
Own operations – 512 – – 374 465
Total GHG (market-based) per net revenue
(tCO
2
e/EUR 1,000)
Own operations – 495 – – 361 449
E5 Copper Own operations t 1,093 1,104 – 615 1,708
Waste total in t Own operations t 661.93 715.4 – 935.48 1,597.41
Hazardous waste in t Own operations t 83.09 88.06 – 51.0 134.1
Non-hazardous waste in t Own operations t 578.84 627.3 – 884.5 1,472.34
Waste recycling rate in % Own operations % 78.0 75.6 – 79.7 79.0
GENERAL
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Annual Integrated Report 2024
Sustainability matter Value chain Time horizon UoM 2024 2023 Target 2028
2024 – Divested
Business
2024 – Divested
+ Continued
Business
Social
S1 % Male / Female employee Own operations ST, MT % 57 / 43 56 / 44 – 45 / 55
% Male / Female employee Leadership team Own operations % 84 / 16 81 / 19 67 /33 81 / 19 82 / 18
Employees represented by works´council Own operations % 77.4 76.9 – 63.2 71.5
Employees covered by collective bargaining agreements Own operations % 73.0 56.6 – 58.8 67.1
Permanent employee Own operations FTE 1,343 1,318 – 998 2,341
Fixed term employee Own operations FTE 185 277 – 92 277
Temporary employee Own operations FTE 81 71 – 54 135
Total FTE Own operations FTE 1,609 1,699 – 1,143 2,752
Headcount by age - Under 30 years Own operations Headcount 250 – – N/A 250
Headcount by age - 30 - 50 years Own operations Headcount 882 – – N/A 882
Headcount by age - Over 50 years Own operations Headcount 518 – – N/A 518
Number of Accidents Own operations 15 14 – 9 24
Lost Time Injuries Own operations Days 248 193 – 76 324
Illness rate Own operations % 5.2 5.2 – 4.1 4.8
Total remuneration pay ratio Own operations 21 N/A – N/A N/A
Gender Pay Gap Total in % Own operations % 40.7 – – N/A N/A
Gender Pay Gap adjusted Direct / Indirect in % Own operations % 11 / 7 – – N/A N/A
Male Employees that took family related leave Own operations FTE 18 – – 3 21
Female Employees that took family related leave Own operations FTE 17 – – 29 46
Employees with disabilities Own operations % 3.1 – – 2.1 2.7
Overall employee turnover rate Own operations % 20 20 – 13 17
Employees who left the company Own operations Headcount 348 298 – 156 504
Employee at top management level % Own operations % 2 2 – N/A
Wage cost per FTE Own operations x1,000 € 56.2 55.9 – 40.9 49.8
S2 Number of Supplier CSR audits Upstream 16 18 17 2 18
S4 Responsible product portfolio (% of revenue) Own operations,
Downstream
% >40.0 39.5 – N/A N/A
GENERAL
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Annual Integrated Report 2024
Sustainability matter Value chain Time horizon UoM 2024 2023 Target 2028
2024 – Divested
Business
2024 – Divested
+ Continued
Business
Governance
G1 Reports Speak-Up line Own operations ST, MT – 2 7 – – 2
65
Annual Integrated Report 2024
ENVIRONMENT
Climate Scenario Analysis
At this stage, transition risks, such as those related to
regulatory, market, or reputational changes, were not assessed.
As we advance our climate scenario analysis, we plan to further
assess the possible transition risks in future frameworks. In
terms of physical impacts, the analysis utilized projections for
temperature, precipitation, and sea level rise; however, their
specific effects on the value chain were not fully assessed. This
scenario analysis was conducted internally, reflecting our
commitment to developing in-house expertise on climate-
related issues.
Western, Eastern and Central Europe: The Netherlands,
Germany, and Austria
In the Netherlands, our headquarters in Amsterdam and
facilities in Drachten are expected to experience significant
vulnerabilities due to sea-level rise, even under a minimal
increase scenario of 0.1 meters projected from 2030 onward.
The low-lying geography of these cities heightens the risk of
flooding, which could pose challenges to infrastructure
resilience and continuity of operations. Risks for our entities in
Eindhoven and Enschede have not been detected.
Similarly, our locations in Germany (Villingen, Donaueschingen,
Malente, and Aerzen) and Austria (Linz) are forecasted to
encounter moderate increases in annual temperatures (2.7°C
median change) and slight shifts in precipitation. These
changes could elevate the frequency of heatwaves, strain water
resources, and impact operational efficiency.
For our location in Romania no risks have been detected.
Eastern North America: United States
In the United States, our site in Atlanta is projected to face a
2.5°C increase in mean annual temperature and a 3.9%
increase in precipitation. This change could lead to an
increased frequency of heavy rainfall events, resulting in urban
flooding and elevated cooling demands during warmer months.
However, there are presently no flood prevention systems,
stormwater management upgrades, or heat resilience programs
in place for our Atlanta operations.
Northern Europe: Sweden
For our facility in Kristianstad, Sweden, projected temperature
increases of 2.7°C, combined with a significant rise in
precipitation (5.9%), are expected to impact both winter
snowfall and summer rainfall. Without enhanced drainage
systems or climate-resilient infrastructure, our operations may
face challenges in managing increased rainwater, especially
given the reduced snowfall that could alter seasonal dynamics.
East Asia: China
Our facility in Suzhou, China, is anticipated to experience
considerable long-term risks from sea-level rise, with
projections indicating over 1.5 meters by 2050. This level of
increase could disrupt operations, transport, and supply chains
in the area.
South Asia: India
In Pune, India, expected climate changes include a 1.8°C rise
in mean temperature and a 5.6% increase in precipitation.
These factors could contribute to higher risks of extreme heat
and urban flooding.
In alignment with the latest Intergovernmental
Panel on Climate Change (IPCC) climate
scenarios, we have conducted an analysis to
evaluate the projected climate impacts across
our operational regions. This scenario analysis
focuses on temperature changes, sea-level rise,
precipitation variability, and other climate-related
factors across key cities in our network. Our
objective is to ensure a proactive understanding
of potential climate risks and the necessary
adaptations to safeguard our assets, operations,
and employees.
Our analysis leveraged well-regarded tools, including the IPCC’s
CMIP6 Interactive Atlas for temperature and precipitation
projections and Climate Central’s Coastal Risk Screening Tool
for sea level rise. These tools allowed us to assess scenarios
under the pathway SSP5-8.5, with a 2°C warming threshold as
a benchmark. The SSP5-8.5 scenario is driven by high fossil
fuel consumption and rapid economic growth, with minimal
climate mitigation efforts, leading to intense greenhouse gas
emissions and severe warming. The timelines considered for
the analysis are 2050 for the sea level rise and the median of
the predicted temperature and precipitation changes from now
until 2100. While these scenarios provided meaningful insights
about physical risks for our own entities, we aim to clarify their
implications more effectively in future reports. However, we
have not conducted a detailed assessment of the likelihood,
magnitude, or duration of these hazards. Additionally, we have
not yet incorporated geospatial coordinates or evaluated
potential exposure and sensitivity across our supply chains.
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Annual Integrated Report 2024
Outlook
Our analysis acknowledges the potential climate risks facing
our operations across various regions, particularly related to
sea-level rise, increasing temperatures, and changing
precipitation patterns. Although no active measures have been
implemented to date, we recognize the importance of these
insights and are committed to incorporating them into our
future planning. As part of our long-term strategy, we intend to
assess site-specific adaptation needs, explore opportunities for
climate-resilient infrastructure, and consider partnerships with
local authorities to strengthen our preparedness.
This commitment reflects our recognition of the evolving climate
landscape and our intention to support the resilience and
sustainability of our operations in the years to come.
ENVIRONMENT
67
Annual Integrated Report 2024
ESRS E1 - Climate Change
Our commitment to Climate Responsibility
At Kendrion, we are committed to reducing the negative
impact on climate change by actively contributing to the global
energy transition. We are actively working to minimize the
environmental impact of our operations. Our ongoing efforts
focus on enhancing energy efficiency, increasing the use of
renewable energy sources, and reducing CO
2
emissions
throughout the design and production of our products.
Minimizing our environmental impact is a key objective, and
we've introduced several initiatives aimed at reducing our
carbon footprint and improving energy efficiency. These actions
include transitioning largely to renewable energy sources and
implementing energy efficiency measures.
To ensure a comprehensive and aligned approach to climate
change reporting in line with ESRS requirements, Kendrion
engaged external consultants to identify relevant IROs of
Climate Change. This assessment was carried out with input
from various departments, including purchasing, product
management, plant operations, and R&D, as well as external
stakeholders such as customers and suppliers ensuring a
cross-functional approach to understanding and addressing
climate change impacts. Among the identified IROs of E1, only
GHG emissions from owned production facilities and the
increasing market demand for environmentally friendly products
have been directly addressed, as outlined in the subsequent
chapters of E1.
For the remaining IROs, we have acknowledged their material
relevance but have not yet implemented any specific policies,
actions, or targets, despite measuring their emissions under
Scope 3.1, 3.2, 3.4, and 3.6. Possibilities to address these
IROs will be assessed in 2025.
Our Role in the Transition to Clean Energy
The energy transition is reshaping the industries we serve, with
sustainable products and technologies becoming the preferred
choice for a growing number of consumers. As a developer and
manufacturer of advanced actuator systems, we are well
positioned to support global electrification and the shift toward
cleaner energy solutions.
Our diverse product portfolio contributes directly to the
expanding demand for clean energy and the accelerating shift
toward electrification in both industrial processes and mobility.
Key trends such as wind energy, industrial automation,
induction heating technology, and electric mobility are driving
demand for our solutions, which support the transition from
fossil fuels to electric alternatives. Our business strategies are
aligned to prioritize these segments accordingly.
Our Industrial Brakes Business Group leverages growth in
areas like wind power, intralogistics, and robotics, while
Industrial Actuators and Controls meets the rising need for
sustainable solutions with electrified induction heating systems,
circuit breakers for electricity distribution, and safety actuators
for nuclear power facilities. Our electronics and embedded
systems developer 3T, further designs embedded solutions for
smart buildings controlling and measuring the heating and
therefore CO
2
emission of buildings.
Our retained Automotive activities in China enable the
driveability of electric vehicles via its offering of smart
suspension technology.
Policies
A policy has not yet been adopted as other priorities have
taken precedence. We intend to develop and publish an
environmental policy that will incorporate climate change
perspectives, ensuring alignment with our overarching
sustainability strategy in the next reporting period. This policy
will guide our future considerations, including any potential
operational and strategic adjustments. Currently there is no
policy in place regarding the ESRS Climate Change.
Actions
Minimizing Carbon Impact
We prioritize reducing CO
2
emissions and optimizing resource
use in our production processes, while also aligning our
initiatives with the United Nations’ Sustainable Development
Impact Risk Opportunity
+
Product portfolio that enables a clean energy transition (positive)
-
GHG emissions through own production facilities
-
Purchase and consumption of raw materials such as steel, copper
and aluminium
-
GHG emissions from acquisition of pre-processed parts such as
coils, plastic, electronic parts
-
Business travel & company cars fleet
-
Transport & logistics of acquired and sold products
-
GHG emissions in the product us phase & end of life treatment
-
Raising energy market
prices
-
Extreme weather events
affecting the upstream
supply chain
-
Increased costs of raw
materials
+
Low-carbon products
+
Growing market demand for
environmentally friendly
products
ENVIRONMENT
68
Annual Integrated Report 2024
Goals (SDGs) 13 – Climate action. By integrating sustainability
into our business operations, we aim to contribute to a greener,
more responsible future.
A significant achievement in our renewable energy initiatives
was the installation of solar panels at our new 28,000 m²
manufacturing site in Suzhou, China, expected to generate
approximately 650,000 kWh annually. Whilst the installation of
solar panels was already finalized in 2023, we achieved in 2024
the full potential of solar generated electricity. Additionally, solar
panels in Romania provide 50% of electricity needs for the plant
in Sibiu, and in Aerzen, Germany, they cover approximately
20% of the energy consumption at that site. For the remaining
energy needs, we have committed to purchasing green energy
through Renewable Energy Certificates (REC) to further reduce
our reliance on non-renewable sources where possible. No
nature-based solutions have been implemented as part of our
actions to reduce GHG emissions to date.
Our ESG program for 2024–2028 will guide our continued
efforts to integrate sustainability deeply across our operations.
across our operations. We are currently enhancing our
reporting and expanding our focus on measuring and reducing
both Scope 1 and Scope 2 emissions. To track the
effectiveness of our measures, we monitor energy reductions
achieved through renewable energy initiatives. Additionally, as
we build a foundation for our data, we will determine how it can
be used to assess the impact of future actions. As mentioned
in our strategy on page 47 we are additionally gathering
information from our suppliers through a sustainability
questionnaire, with the aim to achieve a better understanding of
their climate engagements.
Executing an effective sustainability strategy requires significant
investments in time and resources, especially to create
meaningful impacts across the entire industry supply chain.
While we are committed to funding our planned actions for
climate change adaptation and mitigation, we have not yet
earmarked specific resources upfront. To this end, we plan to
actively collaborate with customers and suppliers who share
our commitment to climate action, working together to drive
reductions in emissions throughout the supply chains that we
are part of. As mentioned under page 51 a resilience analysis
has not been conducted yet.
Transition climate risks are acknowledged as significant.
However, it is essential to first establish a robust foundation of
reliable data to drive effective decision-making. With this
improved understanding, we plan to explore potential transition
plans in subsequent reporting periods, ensuring our actions are
informed and impactful.
88%
renewable
electricity
Global Sites with renewable electricity
reneawable electricity
grey electricity
ENVIRONMENT
69
Annual Integrated Report 2024
Sustainability Rating & Environmental Certification
For many years, we have actively worked to reduce our
environmental impact, utilizing a systematic reporting system to
monitor CO
2
emissions and energy use across all production
facilities. Our dedication to sustainable improvement has
consistently enhanced our processes, lowering the
environmental footprint of our operations. In 2024, our
EcoVadis sustainability rating placed us in the top 15% of
manufacturing companies, a steady improvement since we
began reporting in 2022. This progress is further evidenced by
our second CDP score of 2024 (B-), highlighting our effective
environmental management efforts. Our commitment to
sustainability is also reinforced through our global certifications:
ISO 50001 supports our energy management, guiding facilities
to optimize energy efficiency, while ISO 14001 sets the
standard for enhancing environmental performance. Currently,
our locations in Villingen, Donaueschingen / Engelswies and
Malete are ISO 50001 certified, and all our largest production
sites are ISO 14001 certified, underscoring our proactive
approach to sustainable and responsible operations.
Metrics & targets
This section presents and explains our energy consumption as
well GHG emissions for the reporting year 2024 compared to
2023.
Please note that comparative data of 2023 has been restated
to exclude the divested Automotive business.
ENVIRONMENT
70
Annual Integrated Report 2024
Energy consumption
Direct Energy
Country
Consumed kWh
2024
2023
1
Diff. %
China 0 0 0%
Germany 4,724,145 5,518,002 -14.4%
India 73,000 45,200 61.5%
Romania 256,224 216,465 18.4%
USA 117,964 153,939 -23.4%
Total
5,171,333 5,933,606 -12.8%
Relative Scope 1 Energy Consumption – Added value 33,661 37,702 -10.7%
Relative Scope 1 Energy Consumption – Revenue 17,152 19,195 -10.6%
1
2023 values have been recalculated excluding the divested Automotive business.
Indirect Energy
Country
Consumed kWh
2024
2023 Diff. %
China 3,644,400 2,775,111 31.3%
Germany 4,866,520 5,165,950 -5.8%
India 218,852 204,036 7.3%
Romania 2,059,563 1,232,008 67.2%
USA 298,817 285,723 4.6%
Total
11,088,152 9,662,829 15.2%
Relative Scope 2 Energy Consumption – Added value 72,173 61,398 17.6%
Relative Scope 2 Energy Consumption – Revenue 36,777 31,259 17.7%
Reporting definition & scope
Energy Source
The information on energy consumption is based on the consumption of
Kendrion’s production facilities (electricity, natural gas, fuel oil) in Germany,
the USA, China, India and Romania. The consumed values derive from
the invoices supplierd from the energy provider and are centrally reported
as energy consumption values. Our organization sources direct energy
primarily from gas, fuel oil, biogas, and natural gas, with gas emissions
being offset through REDD+ projects. For the indirect energy we rely on a
diversified energy mix that includes solar, wind, biomass, water, gas, coal,
and nuclear sources. Renewable energy is secured through both on-site
solar panels and REC provided by our energy suppliers. REC are acquired
as bundled certificates Germany and unbundled certificates in China and
cover 71% of our consumed electricity. Kendrion has not sold any REC.
This information is sourced directly from entities with solar installations and
from our general energy provider.
In line with our commitment to sustainability, we are actively working to
reduce reliance on grey (non-renewable) energy sources, as well as
nuclear energy, in favor of renewables. Our global strategy prioritizes the
shift toward renewable energy sources, which undergo continuous
assessment to maximize renewable input wherever possible across our
operations.
Scope 1 & 2
For greenhouse gas emissions, Kendrion applies the same reporting
scope as for energy consumption, only operational control. In our
calculations we only included CO
2
e emissions.
Scope 1 emissions from natural gas consumed in most of our German
entities are compensated with REDD+ projects in Brazil that focus on
reducing the CO
2
emissions. The gross Scope 1 emissions values
represent the non-compensated natural gas emissions. The compensated
Scope 1 emissions sums to a total of 786 t CO
2
e for the year 2024 and
945 t CO
2
e for the year 2023. We aim to continue to compensate the
consumption of natural gas through compensation certificates. Exact
quantities cannot be quantified as of now, as it depends on the consumed
resources.
Internal carbon pricing is not applied at Kendrion.
ENVIRONMENT
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Annual Integrated Report 2024
Self-generated renewable energy
Energy source
Self-generated
kWh
Self-consumed
kWh
Solar energy 1,215,110 1,006,399
The relative energy consumption and CO
2
emissions are calculated based
on the added value of the relevant production facilities. Added value is
defined as revenue plus other income, minus the changes in inventory and
work in progress, raw materials and subcontracted work.
The absolute and relative energy consumption and CO
2
emissions are
reported for a 12-month period. Where information is timely available, the
absolute and relative energy consumption and CO
2
emissions are
reported for the period 1 January 2024 up to and including 31 December
2024. Comparative figures for previous years are calculated based on
identical timeframes. Calculation of the CO
2
emissions is based on the
following conversion factors:
■ Electricity generated from renewable sources: 0
■ Electricity generated from non-renewable sources (average):
0.259 kg/kWh (2023: 0.375 kg/kWh)
■ Renewable gas for plants with carbon neutral contracts: 0
■ Natural gas for other plants (average): 0.212 kg/kWh
(2023: 0.106 kg/kWh)
■ Fuel oil (average): 0.322 kg/kWh (2023: 0.208 kg/kWh)
The conversion factors of Scope 1 & 2 are mainly derived from the
relevant energy provider. Emission factors that are not available from the
energy provider will be sourced from secondary data available for each
national or international standard.
Scope 3
Scope 3 emissions are calculated using a cost-based method with the
Scope 3 Analyzer, a tool provided by the Ministry of the Environment in
Baden-Württemberg, Germany. This tool, accessible through the
Umwelttechnik BW website, allows organizations to estimate their
emissions by inputting specific operational data, though the underlying
emissions data remain invisible to users. The tool is free of costs and can
be used by all companies. We have validated the reliability of the tool
through its approval by the Science Based Targets initiative (SBTi), the
Greenhouse Gas Protocol, and the CDP sustainability rating system
For these calculations, several data types are required, including
purchasing revenue by commodity and country, energy consumption for
electricity, gas, fuel oil across different countries, and upstream
transportation data taken from financial transportation accounts.
Self-generated non-renewable energy
Energy source
Self-generated
kWh
Self-consumed
kWh
Fossil sources 1,621,879 1,566,383
Energy Source
Direct Energy in kWh
(in Thousands)
Fuel Oil
Biogas
Natural Gas
Gas (comp.)
0 500 1,000 1,500 2,5002,000 3,5003,000
10%
12%
15%
63%
Non-renewable energy Renewable energy
Indirect Energy in kWh
(in Thousands)
Miscellaneaous
Nuclear
Coal
Gas
Water
Solar (own production)
Solar
0 1,000 4,0002,000 6,0003,000 5,000
0%
4%
5%
3%
28%
11%
50%
Non-renewable energy Renewable energy
ENVIRONMENT
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Annual Integrated Report 2024
Waste management emissions are calculated separately based on the
organization's primary data from the waste hierarchy management, using
average emission factors provided by the United Nations Framework on
Climate Change (UNFCCC). As mentioned in chapter E5 our waste
hierarchy is reported retrospectively due to data availability and reporting
cycle mismatches. As a result, the provided waste emission value is an
estimation of the 2024 waste hierarchy based on the waste quantities of
2023 and the development of the added value between those years.
Additional data include travel expenses categorized by type, such as
flights, train travel, hotel stays, car use, and other categories, along with
commuting information, for which the number of employees is entered
directly into the Scope 3 Analyzer. The annual fuel consumption of leased
and owned vehicles is also considered. Once entered, the results from
these various inputs are processed in the Scope 3 Analyzer and
subsequently visualized in a report.
0.7% of the disclosed Scope 3 emissions are calculated using primary
data. Those include emissions from Scope 3.5 Waste generated in
Operations and Scope 3.8 Upstream Leased Assets containing leased
company cars and air conditioning emissions from leased buildings.
As an intermediate product manufacturer, we serve a diverse range of
industries and end-use applications, each with unique greenhouse gas
(GHG) emissions profiles. Given the wide variety of potential downstream
uses, it is not feasible to accurately estimate the emissions associated
with each possible application of our products. Therefore, in alignment
with the guidance provided in the GHG Protocol’s Scope 3 Standard, we
have excluded the reporting of Scope 3, categories 9 to 12 (downstream
transportation and distribution, processing of sold products, use of sold
products, and end-of-life treatment of sold products) from our GHG
emissions disclosures. This approach allows us to maintain transparency
and accuracy in our reporting by focusing on emissions sources we can
reasonably quantify.
Scope 3 categories 3.9 to 3.12 are currently considered out of scope.
Currently, our Scope 3 emissions are calculated primarily using a cost-
based method. For the next reporting year, we aim to enhance our
calculation approach by transitioning to at least the average data method.
This improvement will provide a more accurate and comparable
understanding of our Scope 3 emissions, laying the groundwork for
identifying reduction opportunities.
Scope 1, 2 & 3
Scope 1 market-based reporting values from CDR reporting / location-based shows the non compentsated natural gas emissions
Retrospective Milestones and target years
2023 2024 Diff. Diff. % 2025 2030
Annual %
target /
Base year
Scope 1 GHG emissions
Gross Scope 1 GHG emissions (tCO
2
eq) 1,182 1,435 253 17.6% – – 0% / 2023
Percentage of Scope 1
GHG emissions from regulated emission trading
schemes (%) 0 % 0 % 0 % 0% – – –
Biogenic emissions in (tCO
2
eq) 35 33 –2 –6% – – –
Scope 2 GHG emissions
Gross location-based Scope 2 GHG emissions
(tCO
2
eq) 5,993 6.018 25 0.4% – – –
Gross market-based Scope 2 GHG emissions
(tCO
2
eq) 1,687 667 –1,020 –65.4% – 877
48% /
2023
Significant Scope 3 GHG emissions
Total Gross indirect (Scope 3) GHG emissions
(tCO
2
eq) – 147,039 – – – – –
3.1 Purchased Goods and Services – 131,450 – – – – –
3.2 Capital Goods – 7,170 – – – – –
3.3 Fuel- and Energy Related Activities – 520 – – – – –
3.4 Upstream Transportation and Distribution – 3,880 – – – – –
3.5 Waste generated in Operations – 235 – – – – –
3.6 Business Travel – 790 – – – – –
3.7 Employee Commuting – 2,280 – – – – –
3.8 Upstream Leased Assets _ 714 – – – – –
Total GHG emissions _ 149,141 – – – – –
Total GHG emissions (location-based) (tCO
2
eq) 154,568 – – – – –
Total GHG emissions (market-based) (tCO
2
eq) – 149,141 – – – – –
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Direct Energy by country and relative emissions
(in tonnes)
Explain difference of location-based to market-based with the REDD+ compensations for Germany
Country 2024 2023 Diff. Diff. %
China 0 0 0 0.0%
Germany 1,049 1,102 –53 –4.8%
India 20 12 8 66.7%
Romania 47 40 7 17.5%
USA 47 40 4 10.0%
Relative Direct Energy CO
2
Emission – Added value 9.3 7.5 1.8 24.4%
Relative Direct Energy CO
2
Emission – Revenue 4.8 3.8 1.0 24.5%
Indirect Energy by country and relative emissions
(in tonnes)
Country 2024 2023 Diff. Diff. %
China 0 1,287 –1,287 –100%
Germany 0 0 0 0.0%
India 201 167 34 20.4%
Romania 330 122 208 170.5%
USA 136 111 25 22.5%
Relative Indirect Energy CO
2
Emission – Added value 4.3 10.7 –6.4 –59.5%
Relative Scope 2 CO
2
Emission – Revenue 2.2 5.5 –3.3 –59.5%
Total GHG emissions intensity
Country 2024 2023 Diff. Diff. %
Total GHG (location-based) per net revenue
(tCO
2
e/EUR 1,000) 512 – – –
Total GHG (market-based) per net revenue
(tCO
2
e/EUR 1,000) 495 – – –
Targets
In our commitment to sustainability, we recognize that, while
not yet aligned with the 1.5°C target, we have made substantial
progress in reducing our scope 1 and 2 CO
2
emissions,
achieving a 50% absolute reduction since 2015 and 37%
absolute reduction compared to the previous reporting year
2023. This reduction has been mainly achieved through the
procurement of REC and the implementation of energy
efficiency measures. In addition, we have prioritized energy
efficiency and are proud to report that approximately 88% of
our consumed electricity in 2024 is generated from renewable
sources. We aim to increase renewable energy use to 97% by
2028 and reduce our Scope 2 emissions by an additional 48%
compared to 2023, which represents the practical upper limit
given current constraints. This target aims to be met through
additional REC acquisitions, without relying on new
technologies, and was established independently of the
scenario analysis. The baseline year for measuring progress
toward our target is 2023. This is in line with our phased target
framework, which was structured in three periods: 2015–2018,
2019–2023, and now the next phase based on 2023 values.
This approach ensures consistency in tracking emissions
reductions over time, with a continued focus on reducing
Scope 1 and 2 emissions. By using 2023 as the baseline, we
maintain alignment with our established reduction trajectory
while accounting for the latest energy consumption and GHG
emission data. At present, there are no establishedbaselines or
targets for Scope 3 emissions, and no targets have been set
for 2030 for either scope.
The target-setting process was driven by our dedication to
minimize our environmental impact and proactive efforts to
minimize our environmental impact, and further encouraged by
stakeholder input advocating for greenhouse gas emission
reductions.
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The planned target will however not comply with the needed
reductions to meet the 1.5°C target of the Paris Agreement and
have not been approved by a third-party. No formal science-
based methodology, sectoral decarbonization pathway, or
climate and policy scenarios have been applied in setting this
target. Instead, the target has been based on an assessment of
our current energy consumption and greenhouse gas
emissions, with a focus on achieving zero emissions for Scope
1 and 2, which will not be reachable as of now. Furthermore, no
evaluation of future developments—such as regulatory
changes, shifts in customer demand, or emerging
technologies—has been conducted. Our approach relies on
transitioning the entire electricity supply to renewable energy,
independent of the quantity consumed.
In line with our commitment to sustainability and the
requirements of the ESRS E1, we recognize the importance of
addressing climate change thoroughly and holistically. Over the
next year, we will reassess our approach to key topics,
including the potential establishment of a transition plan,
mitigation targets, and planned actions, as well as the financial
implications of such measures. This reassessment will carefully
evaluate our current strategy and identify the most appropriate
steps forward based on the outcomes of this analysis.
Moving forward, we intend to focus on reducing Scope 1
emissions, actively exploring new strategies to further lower
these emissions as part of our ongoing environmental
commitment. As of now we cannot report on concrete actions
and required resources.
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EU Taxonomy
The EU Taxonomy Regulation establishes a legal
framework for classifying sustainable economic
activities. This classification and identification of
sustainable activities help improve transparency,
making it easier to compare how extensively
companies are engaging in sustainable practices
as defined by the EU Taxonomy Regulation.
Under the EU Taxonomy Regulation, Kendrion is required to
disclose its economic activities in terms of revenue, capital
expenditures, and operational expenditures, specifically where
these financial indicators relate to eligible and aligned activities
as defined by the EU Taxonomy Regulation and its Delegated
Acts.
An economic activity is considered eligible under the EU
Taxonomy Regulation if it falls within the scope of the Delegated
Acts to the Regulation, meaning it is classified as contributing
to one of the six environmental objectives: (i) climate change
mitigation; (ii) climate change adaptation; (iii) sustainable use
and protection of water and marine resources; (iv) transition to
a circular economy; (v) pollution prevention and control; and (vi)
protection and restoration of biodiversity and ecosystems.
Alignment with the EU Taxonomy involves more than just
eligibility. For an economic activity to be considered taxonomy-
aligned, it must meet specific requirements, including: (i) making
a substantial contribution to one or more environmental
objectives under the EU Taxonomy Regulation by satisfying
relevant technical screening criteria in the applicable Delegated
Acts; (ii) ensuring that it does not significantly harm other
environmental objectives by adhering to the ‘Do No Significant
Harm’ criteria; and (iii) being conducted in compliance with
minimum safeguards outlined in the Delegated Acts. Only when
an economic activity is compliant with the aforementioned
conditions, criteria, and the relevant minimum safeguards is the
activity considered to be taxonomy aligned.
Eligible activities
We carried out an analysis of our activities to identify activities
that correspond to the activities included in the taxonomy
Delegated Acts. The assessment and determination of
Kendrion’s taxonomy eligible activities is based on current
insights and best judgement in the absence of certain data that
is not yet in full obtainable through existing reporting systems.
We have been able to make progress during 2024, with a need
for additional changes to our reporting systems and data
collection processes to further improve our taxonomy data
collection process and analysis.
Our 2024 taxonomy assessment led to the identification of the
following eligible activities.
Eligible activity Description
3.1 Manufacture of renewable
energy technology
Electromagnetic brakes
for wind power turbines
3.3 Manufacture of low carbon
technologies for transport
Components and
subsystems for electric
vehicles
3.6 Manufacture of other low
carbon technologies
Components and
subsystems for induction
heating
as well as
embedded electronic
solutions
4.1 Electricity generation using
solar photovoltaic technology
Generated electricity from
installed solar photovoltaic
devices
Consistent with current guidance, where taxonomy eligible
economic activities could cover both the 'climate change
mitigation' and the 'climate change adaptation' environmental
objective, economic activities have been allocated to the EU
taxonomy environmental objective 'climate change mitigation'
as the contribution to 'climate change adaptation' is considered
less significant.
Electromagnetic brakes for wind power turbines
Kendrion has been active in the wind energy industry for years
and is well-positioned to support manufacturers of wind
turbines. Tens of thousands of Kendrion’s brakes are installed in
wind parks worldwide and with factories in the EU, China, India
and the USA, Kendrion can provide locally customized, high-
quality brakes.
Components and subsystems for electric vehicles
Kendrion supports the change towards clean, electric mobility,
with actuators and valves for sound and suspension systems.
This includes subsystems and components for active
suspension and Acoustic Vehicle Alerting Systems (AVAS) for
electric vehicles.
Components and subsystems for induction heating
Kendrion’s Industrial Actuators and Controls Business Group
product portfolio includes modular, electrified heating systems
to replace traditional heating solutions that use gas or oil.
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Embedded electronic solutions
Through our subsidiary 3T, we design embedded electronic
solutions for a variety of applications. For sustainable buildings
3T has created an embedded solution controlling the heat
management and climate in buildings, contributing to a
reduction of CO
2
through an optimized energy consumption
control.
Electricity generation through solar PV technology
Kendrion has installed solar panels on the three locations
producing electricity from solar photovoltaic technology. The
electricity is mostly used for own production, however small
quantities are also sold to the national grids.
Assessment of alignment of activities
We conducted an assessment of the technical screening
criteria for eligible activities by analysing relevant product
offerings. This assessment involved Kendrion’s sustainability
expert task force, along with business controllers and
managers across various functions who oversee the
development, manufacturing, or sales of eligible products. For
economic activities to be aligned with the EU Taxonomy, they
must fully meet the ‘Substantial Contribution’ criteria for at least
one of the six environmental objectives, as well as all applicable
‘Do No Significant Harm’ (DNSH) criteria specified in the
Delegated Acts supporting the EU Taxonomy Regulation.
Without complete compliance with these criteria, the identified
eligible activities are not considered to be EU Taxonomy-
aligned.
The minimum safeguards include criteria related to human
rights and responsible business practices, particularly focusing
on anti-bribery and anti-corruption, fair competition, and
taxation. Kendrion adheres to the OECD Guidelines for
Multinational Enterprises and the UN Guiding Principles on
Business and Human Rights. These principles are embedded in
several policies, including our Fair Labour and Human Rights
Policy, Anti-Bribery and Anti-Corruption Policy, Tax Policy, Code
of Conduct, Supplier Code of Conduct, and Competition
Compliance Manual. Kendrion’s Compliance Committee
evaluates and monitors implementation of and compliance with
these policies and procedures.
As a member of the UN Global Compact, Kendrion supports its
Ten Principles across human rights, labour, environment, and
anti-corruption, with our policies reflecting these commitments.
This membership underscores our commitment to responsible
business practices and sustainability. While Kendrion has
established policies to support fair labour and human rights, the
full measures needed to align completely with the minimum
safeguards outlined above have not yet been implemented.
Human Rights
Kendrion suppliers are required to adhere to Kendrion’s
Supplier Code of Conduct – which includes the recognition of
human rights. We have in place a supplier audit procedure
pursuant to which compliance with Kendrion’s Supplier Code of
Conduct is assessed. Our Fair Labour and Human Rights
Policy contains global standards and principles endorsing fair
labour practices and respect for human rights.
Anti-bribery and anti-corruption
Kendrion takes a zero-tolerance approach to bribery and
corruption. Our commitment to prevent corruption has been
recorded in Kendrion’s Anti-bribery and anti-corruption policy
as well as our Code of Conduct. We currently have an online
anti-bribery and anti-corruption training in place which is
mandatory for our employees.
Taxation
Our sustainability commitments, our company values as
embedded in the Code of Conduct and The Kendrion Way, also
form the foundation of our approach to taxation. Kendrion’s tax
policy is based on the values laid down in the Code of Conduct
and aligned with Kendrion’s strategy and rationale underlying
the value creation pillar Responsible Business Conduct, which
is part of Kendrion’s current 2024-2028 ESG program.
Fair competition
We support the principle of free enterprise and unrestricted
competition as a basis for conducting business and we
adhere to the applicable competition laws and regulations. Our
Competition Compliance Manual provides guidance and
principles on fair competition.
Financial performance indicators
The figures reported below relate to the consolidated
companies included in Kendrion’s consolidated financial
statements.
Revenue
As per 31 December 2024, the total revenue used for the
calculation of the taxonomy revenue performance indicator
amounts to EUR 301.5 million and corresponds to the group
revenue from continues operations as included in the
consolidated financial statements. Our consolidated revenue
can be reconciled to our consolidated financial statements on
page 136 of this Annual Integrated Report.
Kendrion’s taxonomy eligible revenue amounts to EUR 47.5
million representing close to 15.8% of total revenue for 2024
and corresponds to revenue generated by the manufacturing
and sale of electromagnetic brakes for wind power turbines,
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components and subsystems for electric vehicles, components
and subsystems for induction heating, and embedded
electronic solutions. As per the assessment performed, these
products fall within the scope of the relevant Delegated Acts
supplementing the EU Taxonomy Regulation. Moreover, the
technologies relevant to these products contribute to the
reduction of CO
2
emission. Various internal controls – including
organizational data structuring - are in place with a view to
avoid double counting in respect of the financial metrics
disclosed under the EU Taxonomy Regulation.
Capital expenditures
Total capital expenditure consists of all additions to tangible and
intangible fixed assets during the financial year, before
depreciation, amortization, and any other re-measurements.
Additions resulting from business combinations are also
included, except for goodwill. Our total capital expenditure can
be reconciled to our consolidated financial statements.
Taxonomy eligible capital expenditure includes capital
expenditure directly related to the taxonomy eligible economic
activities, including the construction of an energy efficient
building in China.
As per 31 December 2024, the total amount of capital
expenditures used for the calculation of the taxonomy capital
expenditure performance indicator amounts to EUR 13.6
million.
As per 31 December 2024, taxonomy eligible capital
expenditures amount to EUR 4.4 million and relate to
investments in the development and manufacture of
components and subsystems for electric vehicles as well as
investments relevant to the construction of the manufacturing
facility in China. The amount of taxonomy eligible capital
expenditures does not qualify as taxonomy aligned
Operating expenditures
Total operational expenditures consist of direct non capitalized
costs related to research and development, repair and
maintenance and any other direct expenditure relating to the
day-to-day servicing of assets of property, plant and
equipment. This includes research and development
expenditure recognized as an expense during the reporting
period in the statement of comprehensive income, as referred
to in note 23 of the financial statements in this Annual
Integrated Report. Maintenance and repair and other direct
expenditures relating to the day-to-day servicing of assets of
property, plant and equipment were determined based on
expenses that are recorded as repair and maintenance and
housing costs, including in different line items as other
operating expenses in note 23 of the financial statements in this
Annual Integrated Report.
As per 31 December 2024, the total amount of operating
expenditures used for the calculation of the taxonomy operating
expenditures performance indicator amounts to
EUR 20.3 million.
As per 31 December 2024, taxonomy eligible operating
expenditures amount to EUR 1.4 million and relate to costs
relevant to development and manufacturing of components and
subsystems for electric vehicles as well as costs relevant to the
development and manufacturing of components and
subsystems for inductive heating. The amount of taxonomy
eligible operating expenditures does not qualify as taxonomy
aligned.
Nuclear-energy-related activities
1 The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative
electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle.
NO
2 The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce
electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well
as their safety upgrades, using best available technologies.
NO
3 The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity of
processes heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear
energy, as well as their safety upgrades.
NO
Fossil-gas-related activities
4 The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce
electricity using fossil gaseous fuels.
NO
5 The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power
generation facilities using fossil gaseous fuels.
NO
6 The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that
produce heat/cool using fossil gaseous fuels.
NO
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Year Substantial Contribution Criteria DNSH criteria
TURNOVER
Economic activities
A. Taxonomy Eligible activities
A.1 Environmentally sustainable activities (Taxonomy aligned)
Manufacture of renewable energy technologies 3.1 - 0% N N N N N N N N N N N N N 0% Enabling
Manufacture of low carbon technologies for transport 3.3 - 0% N N N N N N N N N N N N N 0% Enabling
Manufacture of other low carbon technologies 3.6 - 0% N N N N N N N N N N N N N 0% Enabling
Electricity generation using solar photovoltaic technology 4.1 - 0% N N N N N N N N N N N N N 0% Enabling
Turnover of environmentally sustainable activities
(Taxonomy-aligned) (A.1.) - 0% 0% 0% 0% 0% 0% 0% N N N N N N N 0%
Of which enabling - 0% 0% 0% 0% 0% 0% 0% N N N N N N N 0% Enabling
Of which transitional - 0% 0% N N N N N N N 0%
A.2 Taxonomy Eligible but not environmentally sustainable
activities, non-aligned Taxonomy activities
Manufacture of renewable energy technologies 3.1 21.8 7.2% EL EL N/EL N/EL N/EL N/EL 2.50%
Manufacture of low carbon technologies for transport 3.3 20.0 6.6% EL EL N/EL N/EL N/EL N/EL 3.50%
Manufacture of other low carbon technologies 3.6 5.7 1.9% EL EL N/EL N/EL N/EL N/EL 0.60%
Electricity generation using solar photovoltaic technology 4.1 - 0.0% EL EL N/EL N/EL N/EL N/EL
Turnover of Taxonomy-eligible but not environmentally
sustainable activities (not Taxonomy-aligned activities) (A.2)
47.5 15.8% 100% 100% 0% 0% 0% 0% 6.60%
A. Turnover of Taxonomy-eligible activities Total A.1+ A.2 47.5 15.8% 100% 100% 0% 0% 0% 0%
B. Taxonomy-non-eligible-activities
Turnover of Taxonomy-non-eligible activities 254.0 84.2%
Total (A+B) 301.5 100%
Code
Turnover in mio €
Proportion of Turnover, year 2024
Climate change mitigation
Climate change adaption
Water
Pollution
Circular Economy
Biodiversity
Climate change mitigation
Climate change adaption
Water
Pollution
Circular Economy
Biodiversity
Minimum safeguards
Proportion of Taxonomy-aligned (A.1.)
or -eligible (A.2.) Turnover, year 2023
Category enabling activity
Category transitional activity
Definition:
Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective
N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective
EL – eligible, Taxonomy eligible activity for the relevant environmental objective
N/EL – not eligible, Taxonomy non-eligible activity for the relevantenvironmental objective
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Code
OpEx in mio €
Proportion of OpEx, year 2024
Climate change mitigation
Climate change adaption
Water
Pollution
Circular Economy
Biodiversity
Climate change mitigation
Climate change adaption
Water
Pollution
Circular Economy
Biodiversity
Minimum safeguards
Proportion of Taxonomy-aligned (A.1.)
or -eligible (A.2.) OpEx, year 2023
Category enabling activity
Category transitional activity
Year Substantial Contribution Criteria DNSH criteria
OPEX
Economic activities
A. Taxonomy Eligible activities
A.1 Environmentally sustainable activities (Taxonomy aligned)
Manufacture of low carbon technologies for transport 3.3 - 0% N N N N N N N N N N N N N 0% Enabling
Manufacture of other low carbon techologies 3.6 - 0% N N N N N N N N N N N N N 0% Enabling
OpEx of environmentally sustainable activities
(Taxonomy-aligned) (A.1.) - 0% 0% 0% 0% 0% 0% 0% N N N N N N N 0%
Of which enabling - 0% 0% 0% 0% 0% 0% 0% N N N N N N N 0% Enabling
Of which transitional - 0% 0% N N N N N N N 0%
A.2 Taxonomy Eligible but not environmentally sustainable
activities, non-aligned Taxonomy activities
Manufacture of low carbon technologies for transport 3.3 0.7 3.3% EL EL N/EL N/EL N/EL N/EL 7.3%
Manufacture of other low carbon technologies 3.6 0.7 3.4% EL N/EL N/EL N/EL N/EL N/EL 1.8%
OpEx of Taxonomy-eligible but not environmentally sustainable
activities (not Taxonomy-aligned activities) (A.2)
1.4 6.8% 100% 100% 0% 0% 0% 0%
A. OpEx of Taxonomy-eligible activities Total A.1+ A.2 1.4 6.8% 100% 100% 0% 0% 0% 0% 9.1%
B. Taxonomy-non-eligible-activities
OpEx of Taxonomy-non-eligible activities 18.9 93.2%
Total (A+B) 20.3 100%
Definition:
Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective
N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective
EL – eligible, Taxonomy eligible activity for the relevant environmental objective
N/EL – not eligible, Taxonomy non-eligible activity for the relevantenvironmental objective
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Year Substantial Contribution Criteria DNSH criteria
CAPEX
Economic activities
A. Taxonomy Eligible activities
A.1 Environmentally sustainable activities (Taxonomy aligned)
Manufacture of low carbon technologies for transport 3.3 - 0% N N N N N N N N N N N N N 0% Enabling
Manufacture of other low carbon technologies 3.6 - 0% N N N N N N N N N N N N N 0% Enabling
Construction of new building 7.1 - 0% N N N N N N N N N N N N N 0% Enabling
CapEx of environmentally sustainable activities
(Taxonomy-aligned) (A.1.) - 0% 0% 0% 0% 0% 0% 0% N N N N N N N 0%
Of which enabling - 0% 0% 0% 0% 0% 0% 0% N N N N N N N 0% Enabling
Of which transitional - 0% 0% N N N N N N N 0%
A.2 Taxonomy Eligible but not environmentally sustainable
activities, non-aligned Taxonomy activities
Manufacture of low carbon technologies for transport 3.3 3.9 28.9% EL EL N/EL N/EL N/EL N/EL 13.8%
Manufacture of other low carbon technologies 3.6 0.1 1.0% EL EL N/EL N/EL N/EL N/EL 0%
Construction of new building 7.1 0.3 2.2% EL EL N/EL N/EL N/EL N/EL 38.5%
CapEx of Taxonomy-eligible but not environmentally sustainable
activities (not Taxonomy-aligned activities) (A.2)
4.4 32.2% 100% 100% 0% 0% 0% 0% 9.1%
A. CapEx of Taxonomy-eligible activities Total A.1+ A.2 4.4 32.2% 100% 100% 0% 0% 0% 0%
B. Taxonomy-non-eligible-activities
CapEx of Taxonomy-non-eligible activities 9.2 67.8%
Total (A+B) 13.6 100%
Code
CapEx in mio €
Proportion of CapEx, year 2024
Climate change mitigation
Climate change adaption
Water
Pollution
Circular Economy
Biodiversity
Climate change mitigation
Climate change adaption
Water
Pollution
Circular Economy
Biodiversity
Minimum safeguards
Proportion of Taxonomy-aligned (A.1.)
or -eligible (A.2.) CapEx, year 2023
Category enabling activity
Category transitional activity
Definition:
Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective
N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective
EL – eligible, Taxonomy eligible activity for the relevant environmental objective
N/EL – not eligible, Taxonomy non-eligible activity for the relevantenvironmental objective
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ESRS E2 – Pollution
Materials
Our pollution assessment identified material impacts primarily
originating from activities across our supply chain. Specifically,
the extraction of raw materials such as rare earth elements,
copper, and steel poses notable environmental risks,
particularly when considering the long-term effects on
ecosystems. Additionally, our activities for nuclear power plants
introduce pollution-related risks, including nuclear waste
management. However, it is important to note that nuclear
waste is solely a concern at the downstream end of the value
chain, impacting the very end customer rather than us or our
direct customers. Furthermore, the products we supply for
nuclear power plants are designed with high safety standards,
and in the unlikely event of a failure, they do not pose severe
risks to the plant’s overall safety or functionality.
Our assessment of pollution risks is primarily based on publicly
available sources. Further details on our approach can be
found in the DMA process under page 50.
For our production sites, we maintain ISO 14001 certification at
major facilities, reflecting our commitment to managing
environmental risks proactively. Our processes aim to ensure
that hazardous materials are handled responsibly, from
acquisition to disposal, with safety protocols to mitigate
potential pollution risks.
Hazardous materials
The management of hazardous substances is a key area of
focus in our pollution strategy. Across our organization,
protocols govern the safe use, storage, and disposal of these
materials. While no dedicated policy on pollution has been
established, our Supplier Code of Conduct addresses pollution-
related concerns within our supply chain, particularly for
suppliers involved in high-risk activities. Furthermore, the
management of hazardous substances is internally monitored
to ensure compliance with applicable legal standards.
For the current year, our primary pollution related Key
Performance Indicator (KPI) pertains to hazardous substances,
and we are evaluating the feasibility of aggregating relevant
data across our operations. We expect to conclude this
assessment by year-end 2025.
Policies
As part of our DMA, we evaluated the relevance of pollution-
related issues specific to our operations. Based on these
findings, we plan to develop a targeted environmental policy in
2025 to address both direct and supply chain-related pollution
risks more systematically.
Actions
Our organization’s most pressing pollution risks relate to air,
water, and soil contamination from upstream and downstream
supply chain activities. During our DMA, we identified
hazardous substances and trace levels of microplastics as our
primary pollution concerns. Because these trace amounts of
microplastics are minimal, their quantification is not feasible at
this stage. For other pollutants, our assessment found no
additional significant pollutants from our operations. Further
quantification of specific pollutants (air, water, and soil) is
pending.
Impact Risk
+
Product portfolio enables less pollution (positive)
-
Resource extraction and processing
-
Microplastic creation during transport
-
Nuclear waste
-
Pollution in the use phase
-
Mining of raw materials
-
Regulatory and policy changes
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Metrics & targets
Pollution-related measures include the safe handling of
hazardous materials at our production sites and CSR audits for
Tier 1 suppliers, which include questions on pollution
management practices.
Our pollution related IROs analysis highlighted that many
pollution drivers are linked to our upstream and downstream
supply chains, where our influence is more indirect, particularly
regarding resource extraction. Due to the lack of available
alternatives in extraction methods and substitute materials,
we have not set outcome-oriented pollution targets at this time.
However, we monitor our hazardous materials management
closely as part of our pollution control efforts. In addition, we
have added specific questions related to hazardous substances
and ecology protection to our sustainability questionnaire
referred to in our ESG strategy on page 47, in order get a better
understanding of pollution related topics about our Tier-1
suppliers.
Currently, no operational or capital expenditures (OpEx or
CapEx) are designated specifically for pollution-related
incidents, as no such incidents occurred this year. Estimated
financial impacts related to pollution risks remain in a
preliminary phase and do not meet the thresholds for material
financial reporting under ESRS criteria.
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ESRS E5 – Resource use and circular economy
By incorporating sustainability into the decision-making
process, the organization can foster a more responsible and
innovative product portfolio while capitalizing on growing
demand, and ultimately increasing revenue. This strategic
approach not only aligns with market expectations but also
helps addressing global sustainability challenges.
At the same time, ongoing product redesign projects are being
assessed with a long-term vision on integrating circular
practices wherever feasible. These initiatives aim to extend
product lifecycles, reduce waste, and contribute to a more
sustainable value chain, further strengthening the organization's
commitment to sustainable growth and innovation.
Continuing with traditional linear business practices may pose
challenges for Kendrion, particularly given the evolving
environmental regulations. Failing to adopt sustainable
practices may lead to non-compliance, exposing the company
to legal penalties and reputational damage. Moreover, as
consumers and clients place greater emphasis on
environmentally responsible products, the absence of
sustainability initiatives could weaken Kendrion's market
competitiveness. Additionally, linear models often result in
resource inefficiencies and higher waste management costs,
negatively impacting profitability and operational resilience.
Implementing circular practices offers a multifaceted
opportunity for organizations, including significant cost savings
through resource optimization and waste reduction. By
designing products for reuse, refurbishment, or recycling,
businesses can unlock new market opportunities and meet the
growing demand for sustainable solutions. However, the shift to
a circular economy also presents challenges, such as the need
for significant upfront investments in technology, process
redesign, and collaboration with suppliers and customers to
establish closed-loop systems. The financial effects from above
mentioned impacts and opportunities have not been identified.
Policies
At present, Kendrion has not formalized a dedicated policy on
resource use and circular economy. Following the DMA
findings, we plan to develop and implement a formal
environmental policy 2025 that systematically addresses these
issues.
Actions
Current actions related to resource use and circular economy
are guided by the established waste management hierarchy,
emphasizing prevention, reuse, recycling, and responsible
disposal. Additional actions are on hold pending further insights
from the DMA; this assessment is expected to provide areas of
focus for new initiatives anticipated to commence in 2025.
Raw material lifecycle in electromagnet
production
Kendrion’s approach to assessing resource use and circular
economy practices spans all production entities within the
organization, as defined by our DMA process. These
boundaries include not only internal resource management
practices but also engagement with suppliers to gain a clearer
understanding of the recycled materials embedded within the
components they provide. Additionally, we have examined
customer requirements, particularly for solenoid production, to
assess possible internal adjustments that align with evolving
customer expectations on sustainability and circularity.
To enable a complete and aligned approach to resource use
and circular economy reporting, Kendrion collaborated with
external consultants to meet ESRS requirements and to identify
relevant IROs. This assessment involved mutliple internal
departments such as purchasing, product management, plant
operations, and R&D, providing a cross-functional perspective
on resource use, material sourcing, and waste management.
While Kendrion fully complies with legal waste management
requirements, ongoing technological advancements in the
industry are influencing the feasibility of some product
redesigns and circular economy innovations across our value
chain.
Our double materiality assessment highlights the importance of
integrating sustainability into strategic product development.
This approach can foster innovation and enhance responsibility
throughout the product portfolio.
Impact Opportunity
-
Non-circular product portfolio (negative)
-
Natural resource depletion
+
“Sustainability” as evaluation criterion for strategic product
development
ENVIRONMENT
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Annual Integrated Report 2024
Setting measurable, outcome-oriented targets for resource use
and circular economy initiatives presents complex challenges.
Our consultations with suppliers revealed a gradual shift in the
supply chain toward reducing virgin material use and
implementing circular practices. Given this slow adaptation,
Kendrion has found it challenging to define specific, outcome-
based targets. However, we are actively assessing supply chain
readiness through a sustainable sourcing questionnaire as
mentioned in our strategy on page 47, which evaluates the
percentage of recycled content in supplier-provided
components and tracks engagement with circular economy
principles. We expect to disclose the outcome of this
questionnaire in the reporting cycle for the financial year 2025.
Our facilities are supported by an extensive supplier network.
Frequently used materials are steel components, aluminium
components, copper wire, and plastic components. In many
cases, semi-finished products are purchased based on
specifications of Kendrion’s customers.
Through these practices and a commitment to continuous
improvement, Kendrion strives to enhance resource efficiency
and drive circular economy initiatives, aiming to minimize
environmental impact and contribute to a more sustainable
future.
Waste management
Our approach emphasizes both waste reduction and optimized
waste utilization, following the established waste management
hierarchy: prevention, reuse, recycling, recovery, and as a last
resort, disposal via landfill. Kendrion’s ISO 14001-certified
manufacturing facilities systematically track waste production
and processing, collaborating with certified waste processors
as required by local regulations. As part of maintaining ISO
14001 certification, we implement new waste reduction
initiatives annually, ensuring continuous improvement.
To streamline waste tracking, we have centralized waste data
collection using standardized data sheets and registers,
ensuring consistency across all facilities.
This standardization in our internal reporting and control
processes allows us to conduct thorough waste category
reviews and address differences in local waste management
practices, which may vary due to production processes or
regulatory requirements.
Waste components
Hazardous Non-hazardous
Iron and Steel
cardboard
commercial waste
cooling fluide, solvent
wood
plastic
others
copper
permanent magnets
workshop waste
dissolvent, flux
old oil
packaging of hazardous substances
aluminum
electrical appliances
others
paints and varnishes
batteries
workshop waste
toner cartridges/ printer cartridges
fluorescent tubes
spray cans
spray cans
fluorescent tubes
toner cartridges/ printer cartridges
0 100 200 300
1
2023 values have been recalculated excluding the divested Automotive business.
ENVIRONMENT
85
Annual Integrated Report 2024
Our waste management task force, comprising of experts in
waste management and quality from the Business Groups, is
actively evaluating the feasibility of new indicators and
monitoring parameters for zero landfill waste, recycling
(particularly of Critical Raw Materials, or CRMs), and waste per
unit sale (kg). Kendrion has taken steps to implement eco-
friendly waste disposal methods and maximize recycling rates
within our operations. With our current practices—and planned
improvements—we aim to minimize environmental impact and
advance our commitment to a sustainable future.
Metrics & targets
In 2024 Kendrion used 1,093 tons of copper (best estimate) in
the manufacture of its products (2023: 1,104
1
). To date, the
only raw material quantity tracked is copper, as it is the primary
material used in our products and is subject to significant price
volatility. The remaining materials are acquired as pre-designed
components rather than raw materials, meaning we do not
procure them in their base form. Since these components are
purchased according to predefined designs, we do not receive
detailed weight specifications and are therefore unable to
precisely quantify their total weight. However, we have already
begun collecting weight data for these components, a process
that must be conducted piece by piece and is not yet complete.
TAKING RESPONSIBILITY
Prevention
Reuse
Recycling
Other recovery
Disposal
WASTE MANAGEMENT HIERARCHY
Total waste
83.09
(12.55%)
578.84
(87.45%)
Waste by disposal method
5
00
400
300
200
100
0
Recycling Incineration
(mass burn)
Recovery,
including
enery
recovery
Chemical,
physical
treatment
Not
provided
Reuse
515
126
15
2
2
1
86
476
39 40
Hazardous Non-hazardous
1
2023 values have been recalculated excluding the divested Automotive business.
We recognize the importance of improving data accuracy and
are actively working on enhancing our weight tracking
processes. In the future, we aim to refine our data collection
methods to enable the disclosure of this information in
compliance with the CSRD requirements.
Our products are typically designed and tested for a durability
of 20,000 hours, ensuring long-lasting performance under
standard operating. However, the actual lifespan may vary
depending on the specific end application and operating
conditions. To support this durability claim, one of the key
pillars of our quality assurance framework is End-of-Line
Testing, which ensures that each product meets rigorous
performance, safety, and durability standards. For further details
on our EOL Testing process, please refer to the relevant section
on page 99 of this report. In addition to durability, we also aim
to address the long-term sustainability of our products. While
we have implemented a standardized returns process to
support timely resolution of any issues and improve reparability
based on customer feedback, we are currently unable to
provide complete information on the recyclability of our
products and their packaging.
ENVIRONMENT
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Annual Integrated Report 2024
This is due to a lack of thorough recyclability data from our
suppliers, as well as certain manufacturing processes (such as
moulding) that prevent the separation of components into
individual parts for recycling.
Our primary KPI for resource use and circular economy are
based on waste management hierarchy data. Due to the nature
of data availability and collection cycles, Kendrion’s reporting on
the waste hierarchy is retrospective; for example, in this Annual
Integrated Report, we disclose waste data of 2023 financial
year received from the third-party waste disposal service
providers, including estimated figures of 2024 based on the
development of the added value between 2023 and 2024.
This standard time-lag aligns with our reporting framework,
which compiles waste data once it has been fully validated.
The latest analysis of our waste data indicated an increase in
total waste compared to the previous year, with an overall
recycling rate of 78.0% (2023
1
: 75.6%). The absolute waste
values are divided between 516.3 tonnes of recycled waste
and 145.6 tonnes of non-recycled waste. Hazardous waste
represented 12.6% (2023: 12.3%), while non-hazardous waste
represented 87.5% (2023: 87.7%). No waste was disposed of
in landfills, achieving a zero-landfill waste status. We confirm
that no radioactive waste was generated in our operations.
The KPI of the previous year have been restated to exclude the
divested Automotive business. The top three hazardous
materials are cooling fluid, solvents, dissolvent, and workshop
waste, while iron and steel, cardboard, and commercial waste
continued to dominate non-hazardous waste categories.
The KPI of the previous year have been restated to exclude
the divested Automotive business. The top three hazardous
materials are cooling fluid, solvents, dissolvent, and workshop
waste, while iron and steel, cardboard, and commercial waste
continued to dominate non-hazardous waste categories.
ENVIRONMENT
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Annual Integrated Report 2024
SOCIAL
political opinion, national extraction, social origin, or any other
protected characteristic. We are committed to conducting our
business in a transparent and responsible manner and will
continue to review and update our Code of Conduct to ensure
that our norms and values remain relevant and effective. The
Code of Conduct can be found on the corporate website at
www.kendrion.com.
Increasing awareness, education, training, and providing
concrete examples of expected behaviours, dilemmas and
actions are key to promoting and preserving our culture. With
the support of value teams, managers are entrusted with
enhancing awareness and assisting their team members in their
value journey, and to help them understand what each value
means for themselves, their team, and the organization. A mix
of interactive trainings is available to help our employees
internalize and embody the values outlined in The Kendrion
Way and the Code of Conduct. Kendrion considers it essential
that every employee understands, complies with, and conveys
the shared norms and universal ethical values and behaviours
as laid down in the internal policies and procedures.
Our policies and procedures are fundamental to ensuring
responsible business conduct. It is the responsibility of senior
management to lead by example and to ensure that all
Kendrion employees are aware of and behave in accordance
with the spirit and the letter of Kendrion’s policies and
procedures.Our Intranet page includes a dedicated page that
provides a description of our Code of Conduct with additional
explanations. A direct link to this page is prominently available
on the front page of our Intranet, ensuring easy access to the
Code of Conduct page. In addition, the Code of Conduct is
part of the onboarding process in multiple entities within our
organization. At these locations, the employees are required to
understand, sign off on, and comply with the Code of Conduct.
We envisage to further implement this process in our remaining
entities in 2025. To enable continued awareness of the values
underlying the Code of Conduct and the relevance of continued
compliance – a new online training was introduced in the
course of 2023. This online training specifically addressed
matters such as corruption, bribery, conflicts of interest etc.
As part of our transition towards greener and climate-neutral
operations, we conducted a materiality assessment in line with
ESRS 2 IRO 1. No material transitional risks were identified that
could impact our workforce, nor were any specific groups
found to be at a higher risk due to their characteristics, roles,
or working contexts.
ESRS S1 – Own workforce
Introduction Value & Culture
Our culture and its underlying values underpin all we do. The
key values exemplifying our culture are articulated in The
Kendrion Way: ‘A global team of actuator specialists, with
courage to act, curiosity to learn from successes and mistakes,
confidence to share, and open to feedback’. The Kendrion Way
offers our employees guidance on ‘’how we do things” at our
company, irrespective of location, level of responsibility or
functional role. We are also committed to maintaining the
highest standards of conduct in all our business activities. Key
internal policies and procedures include Code of Conduct, Anti-
Bribery and Anti-Corruption Policy, Speak-up Policy, Fair
Labour and Human Rights Policy, Competition Compliance
Manual, Insider Trading Code, Data Protection Governance
Guidelines, Personal Data Breach Reporting Procedure,
Supplier Code of Conduct and related internal policies and
procedures.
Our Code of Conduct is intended to further develop and
implement our corporate norms and values, with a particular
emphasis on ‘integrity’. The Code of Conduct sets guidance for
our business decisions. It provides principles of ethical business
behaviour and is integral to our culture. Containing clear and
universal standards, The Code of Conduct establishes
expected behaviours for all employees, contributing to the
creation of a safe and respectful environment for everyone. We
are dedicated to maintaining a positive, diverse, and inclusive
work environment, and do not tolerate any form of
discrimination, harassment, or misconduct. This includes
discrimination based on racial or ethnic origin, colour, sex,
sexual orientation, gender identity, disability, age, religion,
Impact Opportunity Risk
+
Occupation creates social prosperity
+
Equal opportunities at work
+
International teams
+
Empower women in Careers
-
Occupational accidents and injuries
+
Effectiveness through diversity
-
Diversity in management roles
88
Annual Integrated Report 2024
The impacts, risks, and opportunities identified apply to all
employees, with the exception of initiatives aimed at
empowering women, which specifically supports female
employees by enhancing representation and leadership
opportunities. Overall, our transition efforts are focused on
creating inclusive opportunities. Kendrion's strategy and
business model are integral to the material impacts on our
workforce. The positive impacts, such as the creation of social
prosperity, equal opportunities at work, international teams, and
the empowerment of women in careers, stem directly from our
business model, which is focused on fostering an inclusive and
supportive work environment.
Tracking and measuring specific actions related to employees,
human rights, health & safety, diversity, and workforce
engagement remains challenging, as these aspects are
inherently embedded in daily business operations. Due to their
integrated nature, allocating dedicated resources solely to
these topics and defining clear, standalone actions is complex.
While initiatives and policies are already in place, further
tracking mechanisms and defined action plans have yet to be
developed. These areas will be further assessed in the 2025
financial year to enhance visibility and strategic alignment.
As such, no additional disclosures can be made in this report.
Employees
Our workforce is crucial to the successful execution of our
strategy. We strive to cultivate a purpose-driven and
professional environment where people are valued, recognized,
and compensated fairly. In an increasingly competitive talent
market, our employee value proposition is crucial to retaining
and attracting talent.
Employees – Actions
We consistently invest in talent attraction and employer brand
strategies to recruit new talent. Our strategy involves targeted
advertising, networking events, and partnerships with technical
universities and institutions. Digital innovation contributed to
targeted marketing campaigns across various social media
platforms, enabling us to reach broader talent pools. Attracting
and selecting young, early-career professionals is particularly
important. Our offices at attractive locations, such as the
High Tech Campus in Eindhoven and the renowned Suzhou
Industrial Park in China, further enhance our recruitment efforts.
Career-advancing development opportunities, international
exchange programs, workstyle flexibility, and a positive,
inclusive company culture are key elements of our employee
value proposition.
Our joint value journey so far…
2019
The Kendrion Way
2020
Update Code of Conduct:
a diverse and inclusive culture
and atmosphere
2021
Strategic diversity framework
2022
Circle of Trust
German Charta der Vielfalt
Update Fair Labour &
Human Rights Policy
2023
Celebrations:
International Women’s Day
World Day for Cultural
Diversity
2024
Updated SpeakUp policy
Introduction new diversity
targets
SOCIAL
89
Annual Integrated Report 2024
Once onboard, we focus on fostering growth and development.
Our employee development programs are designed to equip
our talented employees for future leadership roles. We have
implemented a succession management plan, identifying
successors for critical positions, and monitoring their
development. Our talent management and succession-planning
tool helps us conduct performance reviews and determine
training and development needs. It incorporates a competency
framework, which forms the basis of our performance reviews.
Strengthening our holistic approach across wellbeing pillars, we
established The Circle of Trust, providing female Kendrion
employees access to a trusted network and a confidential
support line. The primary objective is to foster a safe and ethical
working environment, promoting female empowerment and
well-being.
We strive to retain talent by maintaining an engaging and
supportive work environment. We facilitate flexible workstyles
that contribute to employee performance and satisfaction.
Understanding our employees’ expectations in a changing
market is key. We regularly assess our progress through
employee satisfaction and culture surveys. We provide
competitive compensation and benefits to promote fairness
and transparency. Our schemes include performance-based
and share-based compensation, designed to incentivize
sustainable objectives.
By focusing on attraction, development, and retention, we want
to create an environment where our employees can grow,
perform, and thrive in their careers.
Human Rights
Respecting human rights is fundamental to a sustainable
society and an essential component of promoting sustainable
business practices throughout our organization. We recognize
and support the human rights outlined in the Ten Principles of
the United Nations Global Compact.
We also acknowledge and respect children’s rights to
education and development, and the applicable minimum
employment age and related conditions. Kendrion does not
tolerate any form of forced or involuntary labour and applies the
UN Guiding Principles on Business and Human Rights.
Acknowledging and respecting fair labour practices and human
rights are an essential component of conveying and practicing
sustainable business standards.
Human Rights – Policies
Our commitment to endorse fair labour practices and to
respect human rights is recorded in our Fair Labour and Human
Rights Policy, which contains global standards and principles
applicable across all Kendrion business operations. Our policy
explicitly addresses forced labour and child labour. However,
the issue of human trafficking is not explicitly covered within the
policy. Nonetheless, our company remains fully committed to
upholding the highest standards of human rights and ethical
practices throughout our value chain. We affirm that no entities
within our operations are at risk of engaging in or being
associated with incidents of child labour or forced labour. The
Fair Labour and Human Rights Policy can be found on the
corporate website at www.kendrion.com. No material human
rights or labour issues were raised in relation to our activities in
2024.
Human Rights – Actions
We consider ourselves a responsible corporate citizen. We take
responsibility for the living conditions and career opportunities
at our locations and maintain strong ties to the communities in
which we operate. Intercultural understanding and respect, fair
working conditions, career development, (gender) diversity and
employee representation are some of the focal points of our
corporate citizenship initiatives. These are also areas in which
we aim to contribute to the advancement of selected UN
SDGs, towards SDG 5 (Gender equality) and SDG 8 (Decent
work and economic growth).
Health & Safety
Health and safety have the highest priority in every aspect of
Kendrion’s operations and we are keen to ensuring due
compliance with all applicable occupational health and safety
regulations at our locations. The health and safety of employees
are a crucial aspect of any manufacturing operation and
essential to the successful conduct of our business. We apply
the most stringent quality and health and safety standards to
protect our people from potential risks that may occur in the
workplace and to reduce the risk of accidents and injuries. Due
to a continued focus on the safety of the production processes,
Kendrion achieved good safety results across its production
plants. Our health and safety procedures contribute to the
advancement of selected UN SDGs, towards SDG 3 (Good
health and well-being) and SDG 8 (Decent work and economic
growth).
Health & Safety – Policies
Although a global framework for health and safety policies has
not been established, each location has implemented
customized policies to meet specific safety management
systems. These include work-related instructions for production
areas, procedures for handling hazardous substances, and
emergency contact protocols, all aligned with local
requirements and operational needs.
Health & Safety – Actions
Day-to-day responsibility for health and safety is concentrated
within the Business Groups in which health and safety are
managed systematically and in a standardized manner with
clear rules and procedures based on recognized industry
standards and best practices that are laid down in Health,
Safety & Environmental (HSE) policies affecting 100% of
workers within Kendrion. Each production plant further
implements initiatives to enhance its HSE standards depending
on plant-specific needs, production lines and technologies.
SOCIAL
90
Annual Integrated Report 2024
HSE audits are performed to assess implementation and
compliance with HSE policies at regular intervals. All employees
are required to adhere to local health and safety procedures
and practices and participate in training programs. These
trainings cover proper use of machinery, protective equipment,
handling of substances, emergency procedures, and other safe
work practices. Employees working in production areas face a
higher inherent risk of workplace accidents and injuries.
However, this risk is effectively managed through the
implementation of health and safety management systems at
each of the company’s sites. These systems are designed to
proactively address potential hazards, ensure compliance with
safety standards, and promote a culture of workplace safety.
Beyond physical health, we recognize the significance of
prioritizing our employees’ mental well-being. Mental well-being
is an important part of Kendrion’s culture as it relates to all
aspects of our employees’ working life at Kendrion. Promoting
cohesion – within a professional community where all
employees feel welcome and respected, regardless of their
background or position – enables engagement, innovation, and
performance. We have made a concerted effort to prioritize the
well-being of our employees through a variety of initiatives, e.g.
collaboration with psychological institutions to achieve quick
psychological consultancy for our employees.
We offer our employees the opportunity to work on meaningful
tasks and innovative projects. Another essential component of
our efforts to maintain an engaged and committed workforce
involves offering a wide range of measures and tools aimed at
cultivating a healthy, safe, and sustainable workplace culture.
This includes annual ‘Health Days’, medical check-ups, sports
opportunities, and other events. At selected locations
employees have the option to consult with a psychologist at
their request. Increasing mental health awareness and showing
respect and acceptance contributes to removing potential
barriers for employees to seek help when struggling with mental
health issues. Good physical and mental health creates a more
resilient workforce and enhances employee well-being.
Locations with an ‘above average’ illness rate get specific
attention from Kendrion’s Health Task Force, chaired by the
CEO. This task force monitors our global health and safety
figures and coordinates the implementation of improvement
measures in all our facilities. The Task Force meets monthly or
more often as needed. We introduced the concept of ‘Healthy
Leadership’ in 2024, providing training and documentation to
all managers about raising awareness to the mental, emotional,
and physical health of themselves and their employees.
Health & Safety – Metrics & targets
Specific and measurable performance targets for Kendrion’s
business units and local management include health and safety
metrics, which are determined by the number of accidents per
1,000 FTE, Lost Time Injury (LTI) rates and illness rates.
For accidents, LTIs, and illnesses, our objective is to ensure
these metrics do not exceed the previous year’s figures, with
the aim of achieving consistent reductions over time. No
additional targets have been established at this stage for other
workforce-related topics. We confirm that no work-related
fatalities occurred in the reporting period.
Diversity
Diversity is crucial for creating a fair and inclusive society. It
promotes equal opportunities and helps break down barriers of
prejudice and unconscious bias. We recognize that the diversity
of our workforce, particularly within management roles, plays a
critical role in driving both opportunities and risks for our
business. A diverse leadership team enhances innovation,
strengthens decision-making, and aligns with our strategic
objectives. Conversely, the lack of diversity in management can
pose a risk to achieving these goals and maintaining long-term
business effectiveness. This understanding informs our
approach to fostering diversity across all levels of the
organization and our ESG strategy. We provide an environment
where all employees have equal opportunity to develop and
contribute to the realization of our strategy, regardless of their
age, background, gender, nationality, ethnicity, religion, or any
other (protected) characteristic.
Diversity – Policies
As part of the Social Capital and Human Capital value creation
pillar of our 2024-2028 ESG program, we are committed to
creating and maintaining a diverse and inclusive workforce
where all employees feel welcome and respected. This is
captured in our diversity policy for Supervisory Board, Executive
Board and Leadership Team. The Supervisory Board oversees
the process by regularly reviewing this diversity policy and its
implementation to ensure enforcement. We actively promote
diversity across the employee lifecycle, leveraging this
framework to address these aspects and the complexity
around (gender) diversity, especially in a company like Kendrion
where the demand for technical and Science, Technology,
Engineering and Mathematics (STEM) skills is high.
Diversity – Actions
Diverse and inclusive teams make our organization more agile,
creative, and innovative. While our overarching focus embraces
diversity in its broadest sense, our strategic approach is for
now directed at the improvement of gender balance in
leadership and technical roles. Through building engagement
around gender equality among managers and other (senior)
employees, implementing concrete actions and initiatives, and
providing insights into possible barriers, we aim to increase
sustainable gender diversity across the organization.
Leadership support and shared responsibility form the
backbone of our approach, guiding us in establishing a truly
diverse and inclusive workplace. Key priorities within our
diversity framework include:
■ Recruitment of diverse employees: Ensuring that our
recruitment process is unbiased, signalling our interest in
a diverse candidate pool; supporting applications from
a diverse group; and clearly communicating these
expectations to our recruitment teams.
SOCIAL
91
Annual Integrated Report 2024
■ Developing and maintaining a robust pipeline of diverse
talent.
■ Retention and promotion of talents with diverse
backgrounds, nationalities, and genders: Covering various
aspects such as reward, recognition, benefits, work
allocation, performance management, and career
development.
■ Advancement into management roles: Preserving an
environment that fosters the growth of a diverse group of
talents into management, technical, and other leadership
roles.
Achieving social change for female employees, particularly in
the workforce, remains a topical theme. Overall, social change
for female employees is a multifaceted topic that requires
consistent effort not only from employers but also from their
employees. Building on our employee wellbeing program we
established The Circle of Trust, providing female Kendrion
employees access to a trusted network and a confidential
support line. The primary objective of The Circle of Trust is to
foster a safe and ethical working environment and promoting
female empowerment and well-being. Through our trusted
network and confidential support line of The Circle of Trust, we
create a sense of community, contributing to the advancement
of social progress for female employees.
Kendrion is also a proud signatory of the German Charta der
Vielfalt (Diversity Charter). Supported by the German
Commissioner of the Federal Government for Migration,
Refugees and Integration, the charter promotes the recognition,
appreciation, and integration of diversity in business culture.
Diversity – Metrics & targets
To meet the minimum threshold requirement of 33%, our 2024–
2028 target framework sets a current necessary improvement
of 13.8% in female FTE for our indirect staff within our Business
Groups, to be achieved over multiple years. Kendrion is
committed to reshaping the composition of Kendrion´s
Leadership Team, so that, over time, at least 33% the team
comprises women, and at least 33% comprises men.
According to Kendrion’s diversity policy for the Supervisory
Board, at least 33% of the Supervisory Board shall consist of
women, and at least 33% shall consist of men. The target-
setting process was led by the Executive Board and General
Counsel, with limited direct involvement from the internal
workforce.
We developed our diversity targets through a detailed
assessment of the current state across business groups,
focusing on diversity within functional areas. The Management
Team (MT) then discussed and set ambitious yet achievable
targets, considering diversity metrics and staff turnover rates to
gauge feasibility. The HR Committee reviewed and aligned the
approach with Kendrion’s diversity objectives before the final
targets were presented to leadership, ensuring clarity and
commitment across the organization.
To track progress and effectiveness, the diversity figures are
reviewed quarterly and reported to the Executive Board and
Supervisory Board. This allows us to monitor the progress of
the targets, assess trends, and make adjustments where
necessary. While the target-setting process was informed by
internal discussions and data, it is an ongoing effort to
continuously improve and address any lessons learned or
challenges along the way.
Kendrion has also established targets related to nationality.
According to the diversity policy, the Management Team should
include representatives from at least two regions where
Kendrion operates. Furthermore, Kendrion’s diversity policy
incorporates a background diversity objective. According to this
policy, at least one member of the Executive Board, and at least
three members of the Management Team, and 30% of the
Leadership Team should possess experience in international
industrial business.
Kendrion’s workforce comprises 37 nationalities (2023
1
: 43)
across 8 countries (2023: 8). Furthermore, 43% of our
workforce is female (2023: 44%), reflecting a healthy balance of
backgrounds, nationalities, and gender throughout the
organization. The current composition of the Supervisory
Board, consisting of two female members and two male
members, aligns with the 33% gender diversity target. The
Leadership Team consists of 16% women and 84% men,
thereby the identified gender diversity targets for the Leadership
Team have not yet been met. The nationality diversity objective
for the Management Team has been met. In the case of the
Supervisory Board and the Executive Board, the objective is to
maintain appropriate nationality diversity. In the Supervisory
Board one member holds German nationality, reflecting
Kendrion’s significant operations in Germany. For the
background diversity objective for the Supervisory Board,
please refer to the Supervisory Board ‘Profile outline’ which is
available on Kendrion’s corporate website. The composition of
the Executive Board, the Management Team and the
Supervisory Board align with their respective background
diversity objectives.
Engaging with own workforce
Kendrion upholds freedom of association and the right to
collective bargaining. Works councils and employee
representatives have been appointed at Kendrion’s major
operating companies in Germany as well as Kendrion’s
operating companies in the Netherlands and Romania. These
works councils and employee representatives are involved in a
wide range of employment, health & safety, and social issues, in
accordance with local labour legislation. Regular meetings and
consistent communication provide employees with
opportunities to raise questions and contribute valuable input.
1
2023 values have been recalculated excluding the divested Automotive business.
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Annual Integrated Report 2024
We believe that constructive interaction with our works councils
and employee representatives fosters a more engaged and
satisfied workforce, leading to improved productivity and morale.
We appreciate the efforts of our works councils and employee
representatives in voicing and addressing the needs and
questions of our employees.
Engaging with own workforce – Policies
To foster a culture of trust, transparency, and accountability, it is
essential for the company to provide employees with a safe
avenue to voice concerns anonymously. Recognizing this need,
the implementation of the Speak-Up Policy underscores our
commitment to creating an environment where employees feel
empowered to address issues without fear of retaliation.
The Speak-Up Policy outlines the importance of open
communication, aligns with our core values of integrity and
respect, and defines a clear and confidential process for raising
concerns. By enabling anonymous reporting, the company
reinforces its dedication to identifying and addressing potential
problems promptly, ensuring a workplace where everyone can
thrive.
Engaging with own workforce – Actions
We perform regular employee satisfaction and culture surveys.
Monitoring the results enables us to better understand
developments and requirements to uphold our positive,
engaging, and inclusive company culture. Our most recent
survey took place in 2022 and we anticipate preparing a
subsequent employee survey in 2025. The outcomes of
the 2022 survey revealed, among other insights, that our
employees feel a strong connection with Kendrion as
an employer and that they feel valued and appreciated.
Specifically, satisfaction regarding recognition and
opportunities for growth and development were positive.
SOCIAL
Moreover, the survey affirmed our employees’ capacity and
willingness to thrive in times of change, going the extra mile to
contribute to Kendrion’s success.
Direct managers play a crucial role in fostering a positive
employee experience. At the same time, employees have
requested more support and communication concerning
changes affecting the organization or their work. The CEO
holds the most senior role in the company, overseeing and
ensuring effective engagement with the internal workforce.
In some of our sites in Germany, we have a dedicated
representative body for employees with disabilities. Elected by
disabled employees employed with our German entities, this
body serves as an advocacy group, ensuring their interests are
represented and their needs are addressed. Working closely
with management and the works council, it plays a key role in
fostering an inclusive and supportive work environment.
We encourage our employees who have a concern about a
(suspected) violation of our Code of Conduct or any related
policy – to speak up and express their concerns. Our Speak-up
Policy provides guidance on how to raise concerns and the
way in which reported concerns are handled. Our reporting
procedure includes a global Speak-up line managed by an
external party through which employees who feel
uncomfortable raising their concerns with their direct manager,
higher management, or their HR manager, can speak-up and
raise their concerns anonymously. The Speak-up line offers
phone and web-based reporting and is available to our
employees twenty-four hours, seven days a week. The
Speak-up line is also accessible to external stakeholders of
Kendrion that wish to make a report and raise their concerns
about a(n) (alleged) breach of the Code of Conduct or related
policies. The Speak-up Policy and the contact details of our
Speak-up line are also published on our corporate website.
Engaging with own workforce - Metrics & targets
Allowing employees to form unions and engage in collective
bargaining forms a part of fair labor practices and human rights.
Kendrion upholds freedom of association and the right to
collective bargaining. Works counsels and employees have
been appointed at Kendrion's major operating companies in
Germany as well as certain operating companies in the
Netherlands, Romania and Austria. Approximately 77.4%
(2023
1
: 76.9%) of all Kendrion employees are represented by
these works’ councils and employee representatives. Moreover,
approximately 73.0% (2023: 56.6%) of employment contracts
are governed by or follow the collective bargaining agreements
for the metal industry. We do not have any agreements in place
for employee representation through a European Works Council
(EWC), a Societas Europaea (SE) Works Council, or a Societas
Cooperativa Europaea (SCE) Works Council.
Reports of potential or suspected misconduct or other issues
can be made by employees in their native language. In 2024, 2
(2023: 7) reports were made through the Speak-up line. These
reports were assessed by the Compliance Committee and,
where appropriate, further investigated or advised upon.
Violation of the Code of Conduct may lead to sanctions,
including termination of employment. None of the reports made
through the Speak-up line in 2024 resulted in a dismissal of
employees. In addition, no material fines or damages have
been reported. No specific targets are set for the engaging with
own workforce metrics.
1
2023 values have been recalculated excluding the divested Automotive business.
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Own workforce - Metrics & targets
FTE Permanent Fixed Term Temporary Total FTE
Male Female Male Female Male Female Male Female Total FTE
Netherlands 82 87% 14 81% 6 7% 1 3% 5 6% 3 15% 93 84% 18 16$ 111 100%
Germany 472 92% 227 93% 35 7% 14 6% 7 1% 2 1% 514 68% 244 32% 758 100%
Sweden 1 100% 1 100% 0 0% 0 0% 0 0% 0 0% 1 50% 1 50% 2 100%
Austria 8 89% 3 100% 0 0% 0 0% 1 11% 0 0% 9 75% 3 25% 12 100%
Romania 83 99% 287 99% 1 1% 2 1% 0 0% 0 0% 84 23% 289 77% 373 100%
India 37 84% 5 71% 7 16% 2 29% 0 0% 0 0% 44 86% 7 14% 51 100%
China 24 18% 48 41% 77 57% 39 34% 34 25% 29 25% 135 54% 116 46% 251 100%
USA 31 100% 19 100% 0 0% 0 0% 0 0% 0% 0% 31 62% 19 38% 50 100%
Total 738 81% 605 87% 127 14% 58 8% 47 5% 34 5% 912 57% 696 43% 1,609 100%
Headcount Netherlands Germany Sweden Austria Romania India China USA Total
Under 30
years 25 10% 142 57% 0 0% 1 0% 28 11% 25 10% 18 7% 11 4% 250 100%
30 – 50 years 59 7% 385 44% 0 0% 5 1% 226 26% 25 3% 166 19% 16 2% 882 100%
Over 50 years 32 6% 333 64% 2 0% 4 1% 119 23% 1 0% 4 1% 23 4% 518 100%
Total 116 7% 860 52% 2 0% 10 1% 373 23% 51 3% 188 11% 50 3% 1,650 100%
2024 TARGET
Diversity@Kendrion
37 nationalities
8 countries
43% female workforce
2024
248
2024
9.3
2024
5.2%
8.4
2024 TARGET
5.2%
Illness rate
2024 TARGET
193
Accidents
(per 1,000 FTE)
Lost Time Injuries
(in days)
Reporting Definition & Scope
The reported figures for FTE and Headcount represent the year-end
numbers of the reporting period. An FTE (Full-Time Equivalent) represents
the hours worked by an employee as a proportion of the standard full-time
workload. As an headcount counts each employee independent of the
number of working hours hired through a Kendrion legal entity.
Kendrion reports the total number of work-related accidents during
working time or on the way to or from work for its own employees and
independent contractors under supervision of Kendrion. Only the
accidents that the group entity had to report to an external institution are
reported. As of 2017, Kendrion reports accidents from all group entities
that caused an absence of more than three calendar days, not including
the day of the accident. This definition is based on regulations applicable
in Germany. In addition, Kendrion reports the absence resulting from
work-related accidents.
The Lost Time Injury (LTI) is time (‘scheduled working days’) that could not
be worked (and is thus ‘lost’) as a consequence of an employee being
unable to perform the usual work due to an occupational accident (‘at
work accident’ as well as ‘way-to work accident’) or disease. Kendrion
makes no difference in whether the salaries or wages were paid by
Kendrion or by an external institution during that time. A return to limited
duty or alternative work for the same organization does not count as ‘lost
days’. Counting of ‘lost days’ begins with the first scheduled working day
of full absence (e.g. the day after the accident). The count of ‘absent days’
due to a work-related accident ends when the employee either is fully
back to work or is absent from work for other reasons (e.g. vacation,
reduction in overtime, etc.). A lost day counts as one full day regardless of
whether the employee has a part-time or a full-time contract. Kendrion
does not specify LTI data per region, worker type or gender as Kendrion
considers this information not relevant to its current operations. No
fatalities have taken place due to work related accidents or injuries.
The reported illness rate is based on the total illness hours. The total
illness hours with and without wage continuation is divided by the total
timetable hours.
An employee at Kendrion is defined as a person who holds a direct
employment contract with one of Kendrion's legal entities. Non-
employees at Kendrion sites are exclusively temporary workers hired
through third parties.
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The annual total remuneration ratio is the annual total remuneration of the
highest paid individual divided by the median annual total remuneration
minus the highest paid individual remuneration. The pay ratio is influenced
amongst others by the geographical locations, type of business, part-time
employees and currency volatility.
The disclosure of gender pay gap contains the basic salary plus
remunerations for each entity, separated by direct and indirect employees.
Remuneration includes payment for overtime and bonuses. For part time
employees the regular monthly salary and remuneration is calculated to 1
full time equivalent (FTE), to have a common ground for comparison.
The gender pay gap is affected by the geographical areas and types of
business (such as manufacturing or developing) in which Kendrion
operates and consequently country differences exist. Kendrion will
continue to improve on its analysis and further alignment to ensure a good
basis for future actions. We calculate the gender pay gap as the difference
between the average hourly pay for men and the average hourly pay for
women, divided by the average hourly pay for men.
Based on the country the regulation for disability reporting can vary.
Kendrion´ s CSR reporting is aimed to achieve an aligned reporting
standard for the disability KPI. Employees with disabilities refers
individuals employed by Kendrion who have a documented physical or
mental impairment that restricts their ability to perform certain activities.
These impairments can include but are not limited to: 1. Physical
disabilities, 2. Sensory disabilities, 3. Mental disabilities, 4. Invisible
disabilities. Kendrion distinguishes two criteria for the determination of
disabled employees:
1. The reporting of a disability indicator is relevant where the company
must adjust the workplace or the defined job description to adapt to the
circumstances of the employee. The adjustments in this relation should be
beyond the standard safe and healthy measures implemented in the
company.
2. As already mentioned, the disability regulations can vary based on the
country the company is located in. These specifications should not be
neglected in the CSR reporting and as well considered in the calculation
of the disability indicators.
Both definitions add up to a set of criteria to identify the disabled
employee and to report the indicator accordingly. 5.7% of the reported
people with disabilities are subject to legal restrictions on the collection of
data.
We have calculated the unadjusted gender pay gap at 40.7%,
based on all employees who received a salary in 2024. The
unadjusted gender pay gap is influenced by a significant
number of female direct production workers, particularly in our
production location in Romania. To provide a more accurate
view, we have also estimated an adjusted gender pay gap
based on location and age group cohorts for direct employees,
indirect employees, and the Leadership Team.
56.2
Wage costs per
FTE
(EUR 1,000)
2023 55.9
52
Employees with
disabilities
(headcount)
no data
1,205 (73%)
Employees covered
by collective
bargaining
(number)
2023 819 (56.6%)
20
Overall employee
turnover rate
(%)
2023 20
31
Employees at top
management
level (FTE)
32 (6f/26m)
348
Employee who
left the company
(number)
2023 298
35 (18m /17f)
Employees that
took family
related leave
no data
1.9
(84% m/ 16% f)
Employee at top
management
level (%)
2023 1.9%
(81% m/19% f)
922/729
(m/f)
Headcount
by gender
2023 861m/587f
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The adjusted gender pay gap for the Leadership Team is not
meaningful due to the absence of comparable roles performed
by both genders. The estimated adjusted pay gap for direct
workers is 11%, and for indirect workers, it is 7%. The annual
total remuneration ratio in 2024 was 21.
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Annual Integrated Report 2024
At Kendrion all employees are generally entitled to family-related leave.
We are committed to fair and competitive wages that support our
employees’ well-being and reflect their valuable contributions. We
regularly review our pay structure to meet or exceed industry standards,
ensuring our team can thrive both inside and outside of work. We
believe that adequate wages are fundamental to building a resilient,
motivated workforce and, ultimately, to the success of our company.
Our Leadership Team consists of around 30 executives of the company
and include the Executive Board (CEO and CFO) and the Management
Team (which in addition to the Executive Board members also consists
of Managing Director IAC, IB, President of Asia, CIO, General Counsel
next to the Executive Board).
The wage cost used to calculate the wage cost per FTE is calculated
based from the staff costs detailed in our financial statement on page
198 subtracted by other staff costs that is not specified in detail in the
financial statement, but is displayed in the total value of staffed costs.
SOCIAL
Collective bargaining agreement Social dialogue
Coverage Rate
Employees – EEA (for
countries with > 50
empl. Representing >
10% total empl.)
Employees – Non-EEA (for
countries with > 50 empl.
Representing > 10% total
empl.)
Workplace representation (EEA only) (for countries
with > 50 empl. Representing > 10% total empl)
0 – 19% Germany
20 – 39%
40 – 59%
60 – 79%
80 – 100% Germany; Romania China Germany; Romania
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Annual Integrated Report 2024
ESRS S2 – Workers in the value chain
reassessment of the double materiality analysis, which will
include a peer review to benchmark practices and align with
industry standards. Kendrion may choose to adjust its reporting
scope based on this reassessment and not report on "Workers
in the Value Chain" in future reporting periods if it is no longer
deemed material
Policies
Kendrion's Supplier Code of Conduct highlights the company's
commitment to ethical business practices and the well-being of
workers across its supply chain. The policy was signed-off by
our General Counsel and Executive Board. The code requires
suppliers to uphold fundamental human rights, ensuring fair
wages, safe working conditions, the prohibition of child and
forced labour and environmental protection including the
responsible management of materials. It also emphasizes the
importance of non-discrimination and the right to freely chosen
employment. While trafficking is not explicitly mentioned in our
Supplier Code of Conduct, our commitment to human rights
includes addressing industry-specific risks. Our Supplier Code
of Conduct contains an explicit section on the prohibition of
forcibly removing individuals from their land or region, which
more closely reflects the potential risks relevant to our industry.
While our Supplier Code of Conduct does not explicitly
reference specific international standards, it is guided by the
core principles of the International Labour Organization (ILO)
standards and the Universal Declaration of Human Rights.
Additionally, our tier-1 suppliers commit to imposing a Supplier
Code of Conduct within their own supply chains, further
strengthening the connection to our Impact, Risk, and
Opportunity (IRO) considerations and reinforcing responsible
business practices throughout the value chain. New suppliers
are required to adhere to the principles and standards outlined
in our Supplier Code of Conduct, which includes Kendrion’s
right to audit the supplier’s site to assess compliance. Over
time, our goal is for all suppliers, both new and existing, to fully
comply with these standards. As part of our ongoing efforts, we
are currently reviewing our full supplier base in 2024 to identify
any suppliers who have not yet adhered to the Code, and we
are reaching out to them to ensure they align with our
expectations. By upholding these standards, Kendrion aims to
foster a responsible and sustainable supply chain that reflects
its core values and commitment to social responsibility.
Actions
Sustainable Sourcing
Kendrion is committed to improving efficiency and transparency
in its supply chain by sourcing materials in ways that are both
environmentally responsible and socially sustainable. Our long-
term sustainability goals go beyond energy efficiency and
carbon footprint reduction, extending our commitments to
multiple facets of the value chain. A key part of this
commitment is the careful selection of suppliers, based on
selected criteria that include sustainability standards. Each
supplier is required to sign and comply with the Kendrion
Supplier Code of Conduct, which addresses adherence to
essential standards around human rights, workplace safety,
environmental protection, and ethical business practices.
Our responsibility to the workforce driving
the value chain
The workforce within the value chain plays a crucial role in
ensuring the efficiency, sustainability, and ethical operation of
any organization. From raw material extraction to production,
distribution, and beyond, workers at every stage contribute
to the creation and delivery of goods and services. In our
operations, the value chain is primarily impacted by the
extraction of key raw materials such as steel, copper, and
aluminium.
Understanding the impacts on these workers, especially within
these sectors, is critical given the risks and opportunities
identified in our value chain. These include negative impacts
such as forced labour and child labour in the metal supply
chain. Addressing these issues is not only essential to fostering
a value chain that aligns with organizational values, meets
regulatory expectations, and promotes social responsibility,
but also for mitigating risks and seizing opportunities to drive
positive change.
For the 2024 reporting , "Workers in the Value Chain" has been
identified as a material topic under the ESRS. However, it is
important to note that this issue is considered materially
relevant primarily for Tier 3 and Tier 4 suppliers, where
Kendrion´s direct control is inherently limited. Therefore, this
assessment of risks is primarily based on publicly available
sources. Further details on our approach can be found in the
DMA process under page 50. The workers in the downstream
value chain are reported under chapter S4 which focuses on
customer, consumers and end-users. For the reporting period
2025, Kendrion intends to conduct a comprehensive
Impact
-
Forced labour in metal supply chain (negative)
-
Child labour in metal supply chain (negative)
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Annual Integrated Report 2024
As an integral part of a supply chain with a strong focus on
product development and manufacturing, Kendrion
collaborates with its Tier-1 suppliers to maintain high standards
for quality and sustainability of materials and end products.
We are committed to making a meaningful contribution to our
supply chain’s impact by engaging proactively with suppliers
to assess and enhance their environmental and social
performance. This emphasis on responsible sourcing includes
a continuous focus on ESG criteria within our supplier selection
and evaluation processes.
Concerns from workers in the value chain can be raised
through our Speak-Up Policy referred in chapter G2 – Business
Conduct on page 101. In 2024, no severe human rights
violations were reported under our closed reports raised
through the Speak-Up line.
The sourcing of certain minerals—particularly tantalum, tin,
tungsten, and gold, collectively known as “conflict minerals”—
is associated with human rights concerns and conflict.
Although Kendrion does not source these minerals directly,
we conduct thorough inquiries to ensure that materials supplied
to us are conflict-free, and we require suppliers to submit a
conflict mineral reporting template or similar documentation to
validate compliance. As stated under “Policies” adherence to
our Supplier Code of Conduct is mandatory, which includes
specific restrictions on the use of conflict minerals to prevent
links to unethical practices.
Permanent magnets, some of which contain rare earth metals,
are essential to the functionality of certain Kendrion products,
especially in achieving product specifications such as torque in
industrial brakes. Although the volume of rare earth magnets
we use is limited, we strive to minimize reliance on them due
to the energy-intensive nature of rare earth metal mining and
refining. We aim to use the smallest feasible amount while
ensuring product performance.
In alignment with our 2024-2028 ESG program, Kendrion has
advanced its supplier selection and evaluation processes. This
year, we introduced a supplier sustainability questionnaire, sent
to our top 50 suppliers, containing specific questions aligned
with our sustainable sourcing metrics visible in our ESG
strategy on page 47. This tool allows us to better understand
each supplier’s sustainability practices and to comply with both
stakeholder expectations and regulatory demands.
Additionally, Kendrion has implemented an internal supplier risk
assessment process. This system uses internationally
recognized indices—such as the Country Risk Classification,
Global Rights Index, Global Slavery Index, Environmental
Performance Index, Transparency International Corruption
Index, Human Freedom Index, and Human Development
Index—to evaluate and prioritize risks within our Tier 1 supply
chain. By focusing on high-risk areas, this assessment enables
Kendrion to address and mitigate potential risks in the riskiest
segments of our upstream supply chain. The suppliers
identified as high-risk have as well received the forementioned
questionnaire in order to achieve an initial understanding of their
actions regarding ESG topics. This proactive engagement with
suppliers is not only intended to manage risks but also to
collaboratively foster social and environmental improvements,
keeping sustainability as a fundamental part of our supply chain
operations.
Metrics & targets
Kendrion carries out audit procedures to confirm that suppliers
adhere to the standards and principles outlined in the Supplier
Code of Conduct. These supplier audits are conducted
internally by Kendrion employees, following an established
procedure. This includes collecting corporate responsibility
documentation from suppliers who are ISO certified, and
utilizing standardized self-assessment questionnaires for those
who are not ISO certified.
If an audit reveals that a supplier does not meet the Supplier
Code of Conduct's requirements, a meeting is held to request
that the supplier develops a remediation plan. Failure to
properly implement the plan may lead to the termination of the
supplier relationship.
The results of the 16 supplier audits conducted in 2024 (2023
1
:
18) have been positive, as most suppliers complied with our
audit procedures. Similar to 2023, no suppliers failed to meet
the recommended requirements for adherence to the Supplier
Code of Conduct. However, there were a few instances where
follow-up was necessary to clarify certain responses.
Kendrion has set a target to send the sustainability
questionnaire each year to a new group of 50 suppliers, with
a focus on those providing product-related materials. This
approach ensures that we gather updated information from
each material supplier every two to three years, allowing us to
track progress and maintain a comprehensive understanding
of their sustainability practices over time. The results of the
questionnaire are currently still under review. Any additional
targets arising from these responses will be reported in the next
reporting period.
Through this approach and these initiatives, Kendrion actively
encourages its suppliers to take responsibility for addressing
issues within the supply chain.
1
2023 values have been recalculated excluding the divested Automotive business.
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ESRS S4 – Consumers and end-users
In line with the EFRAG requirements, the consideration of
customers in this report is addressed under the chapter S4, as
it pertains to end-users and consumers. While we recognize
that certain impacts related to product safety in the
downstream value chain might affect workers, these are
appropriately covered in S2. There is no double reporting of
customer-related matters between S2 and S4, with clear
distinctions made between customer and worker impacts
across these sections.
Policies
Our operations are focused on delivering high-quality products
that aim to provide value to consumers and end-users. We
work to meet or exceed expectations in terms of safety,
reliability, and performance. This commitment is outlined in our
quality policy, which is designed to uphold and continuously
improve our standards. Kendrion's quality policies are managed
independently at each site, ensuring alignment with local
requirements while reflecting the high-quality standards we
uphold across our business. As these policies are managed at
the local level, they require approval from the General Managers
of each location to ensure compliance and consistency with our
overall quality framework.
Our quality approach emphasizes process-oriented thinking
and action throughout the entire value chain, ensuring efficiency
and consistency in all aspects of production. By achieving
certification in accordance with ISO 9001, we adhere to
internationally recognized quality management standards. We
prioritize the continuous development and improvement of our
quality management system to enhance its performance and
effectiveness.
A key aspect of our commitment to quality is the involvement
and development of our suppliers, ensuring that materials and
components meet our high standards. Additionally, we invest in
the training and development of our employees to foster
expertise and maintain a strong culture of quality.
Our quality policy also incorporates a risk management process
aligned with ISO 31000, enabling proactive identification and
mitigation of potential quality issues. Furthermore, we define
and measure quality objectives and costs, ensuring
accountability and fostering continuous improvement.
Our quality policy serves as a general guideline for our quality
standards. For identified material impacts, risks, and
opportunities, we do not have a dedicated policy in place and
currently have no plans to implement one.
Through our focus on quality, we strive to provide products that
fulfil their purpose while prioritizing the safety, satisfaction, and
trust of end-users. This commitment not only benefits our
customers but also reinforces our reputation as a company
dedicated to excellence.
Commitment to Consumer and End-User
Well-Being
At Kendrion, we recognize the pivotal role our direct customers
and end-users play in driving the development and delivery of
actuators and control systems that not only meet but exceed
expectations. We are dedicated to aligning our operations and
products with the principles outlined in ESRS S4, ensuring the
well-being, safety, and satisfaction of those who interact with
our offerings.
The positive impacts identified in our DMA highlight the wide
range of end-users benefiting from our products. Products
designed with enhanced safety features help reduce the risks of
accidents and injuries for consumers, industrial workers, and
machinery operators. Similarly, products that prioritize safety,
such as fire prevention and security systems, benefit individuals
in transportation, drivers, and passengers, as well as factory
workers and communities.
Products that improve health have an impact on patients and
healthcare professionals, providing reliable medical devices and
systems that enhance care quality and outcomes. These
innovations also support broader consumer well-being by
promoting health and reducing risks. Additionally, products that
reduce climate change positively affect communities,
businesses, and individuals by lowering carbon emissions and
contributing to a cleaner, more sustainable environment. This
includes renewable energy solutions, energy-efficient vehicles,
and sustainable industrial technologies.
Together, these products reflect a focus on developing
sustainable solutions that positively impact end-users across
diverse sectors and demographics.
Impact
+
Products safety (positive)
+
Products that keep you safe (positive)
+
Products that improve health (positive)
+
Products that reduce climate change (positive)
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Annual Integrated Report 2024
Actions
Quality as a Cornerstone
At Kendrion, quality is not just a metric—it is the foundation of
everything we do. Our components and systems are critical to
the safe, efficient, and reliable operation of our customers’ end
products, often in demanding and safety-critical applications.
Whether it's a precise electromagnetic actuator in medical
devices, a high-performance brake in industrial automation, or
an energy-efficient heating solution, the success of our
customers’ products is among other criteria also dependent on
the consistent quality and performance of our solutions.
Our focus on quality is about ensuring the functionality,
reliability, and longevity of the end products that incorporate our
technology. By embedding excellence into every stage of
development, from design to manufacturing and rigorous
testing, we ensure that our customers can trust Kendrion to
deliver components that seamlessly integrate into their systems
and enhance overall product performance.
Through this commitment, we not only fulfil customer
expectations but also contribute to their innovation and market
success, reinforcing our position as a trusted partner in
delivering high-quality, reliable, and safe solutions across
industries.
All producing Kendrion locations are ISO 9001 certified, but our
commitment to quality transcends compliance with ISO 9001
standards. By implementing robust quality management
systems and leveraging advanced process control
mechanisms, we ensure that every product leaving our facilities
adheres to the highest standards of excellence.
For instance, the Kuhnke FIO Safety PLC and Safety I/O
modules are designed to integrate seamlessly into any
EtherCAT
®
network and comply with IEC 61508 SIL3 and DIN
EN ISO 13849 PLe requirements.
These certifications confirm the products' reliability and safety
in demanding industrial applications.
Additionally, Kendrion's product portfolio includes components
tailored for safety-critical applications. For example, the
INTORQ BFK458 spring-applied brake is certified for use in
explosive environments (Zone 2 and Zone 22) and meets the
requirements of temperature class T4. It is also validated as an
operational brake, showcasing Kendrion's commitment to
safety even in the most challenging conditions.
One of the key pillars of our quality assurance framework is
End-of-Line (EOL) Testing. This rigorous testing ensures that
products undergo a comprehensive evaluation before being
delivered to the end-user. EOL testing is specifically designed
to simulate real-world conditions and verify that each
component meets or exceeds performance, safety, and
durability requirements. By incorporating this final validation
step, we significantly reduce the risk of product defects and
enhance consumer confidence.
This thorough testing not only safeguards product quality but
also aligns with our ESRS S4 goals by prioritizing consumer
safety and reducing the likelihood of defects or recalls.
Customer-Centric Practices
Kendrion conducts customer satisfaction surveys every two
years to assess and improve products and services. These
surveys evaluate key aspects such as product quality, delivery
schedules, service availability, response times, and the handling
of customer concerns. Feedback from these surveys provides
actionable insights that drive enhancements across our
operations.
Agile Collaboration with Customers
Kendrion adopts an agile approach in product development,
working closely with customers to meet their specific
requirements efficiently.
This collaborative method fosters:
■ Constant Communication: Maintaining an open dialogue to
understand customer needs.
■ Quick Clarifications: Resolving potential ambiguities early in
the process.
■ Intermediate Goals: Setting milestones to minimize risks
and ensure alignment.
Kendrion prioritizes engagement with direct customers to
understand and address their needs. However, due to our
position in the value chain, direct interaction with consumers
and end-users is limited, as our products are components
within broader applications involving multiple downstream
customers. Consequently, an involvement of the stakeholder
consumers and end-users does not take place. Nevertheless,
we remain committed to responsible business practices, and
our Speak-Up Procedure, detailed in chapter S1 and G1 of this
integrated annual report, provides a channel for stakeholders to
raise concerns or report misconduct.
Metrics & targets
A Responsible Product Portfolio
Kendrion takes pride in maintaining a responsible product
portfolio that emphasizes safety, health, and sustainability.
The categories include:
■ Products that keep you safe: including safety brakes for
elevators and FIO safety PLC’s
■ Products that improve health: including respiratory support
components and valves for dialysis equipment
■ Products that reduce climate impact: including
electromagnetic brakes for wind turbines and emission free
heating solutions for various industrial processes. These
products categorized under ESRS S4 are aligned with the
objectives of ESRS E1 on climate change mitigation and
adaptation.
SOCIAL
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A significant and growing portion of Kendrion’ s portfolio is
allocated to these impact-driven products. In 2024 total
revenue from these products made up more than 40% of
Kendrion’ s total product portfolio. Kendrion targets the growth
of these products to outpace the growth of the general
portfolio. Actions in this area are expected to grow in response
to the market trends.
Contributing to a sustainable future
Kendrion’s alignment with ESRS S4 is underpinned by our
commitment to consumer and end-user well-being. Through
stringent quality standards, innovative product development,
and active customer engagement, we strive to create value
while driving positive societal impact. No specific external
targets have been set in this regard, due to the inherent
distance to the actual end-users of our products, as well as the
measurement limitations outlined above. As part of our
commitment to customer satisfaction, we have established
processes for handling reported failures and complaints from
clients. These processes are managed at the business group
level, ensuring timely and effective resolution by those closest
to the issue. Claims involving material financial amounts or
significant risk factors are escalated and consolidated at the
group level for further assessment and resolution.
Kendrion remains committed to upholding the highest
standards by continuously increasing the delivery of our
responsible product portfolio designed to keep consumers and
end-users safe and healthy. By integrating sustainability, safety,
and collaboration into our practices, Kendrion strives to be the
benchmark for excellence in the industrial components sector.
SOCIAL
Products that keep you safe • Products that keep you healthy • Products that reduce climate impact
Products that reduce climate impact
Environmentally sustainable economic activities
AUTOMOTIVE
RETAINED
ELECTRIC VEHICLES
Products that keep you healthy
INDUSTRIAL
ACTUATORS AND
CONTROLS
INDUCTIVE HEATING AND ENERGY
DISTRIBUTION
Products that keep you safe
INDUSTRIAL BRAKES
WINDPOWER AND AUTOMATED
WAREHOUSES
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GOVERNANCE
ESRS G1 – Business conduct
Policies
Corporate Values and Internal Policies
Our commitment to ethics is guided by a set of internal policies
and procedures that define our expectations and provide a
framework for ethical behavior. These policies are designed to
ensure compliance with all relevant laws and regulations while
fostering an environment where integrity is at the core of every
decision. Key policies include the Code of Conduct, Anti-
Bribery and Anti-Corruption Policy, Speak-Up Policy, Fair
Labour and Human Rights Policy, Competition Compliance
Manual, Insider Trading Code, Data Protection Governance
Guidelines, Personal Data Breach Reporting Procedure, and
Supplier Code of Conduct, among others. All policies are
communicated through internal and external channels such as
Kendrion´s website or the Intranet and are directly sent to all
employees when necessary.
These policies are not only designed to set standards but also
to ensure that our practices align with both legal requirements
and global ethical norms. Our Code of Conduct serves as the
cornerstone of these efforts, reflecting the values of The
Kendrion Way and emphasizing integrity as a core principle.
With a diverse workforce of over 1,609 employees spanning 37
nationalities, we recognize the importance of having a unified
set of ethical standards that guide our behavior across all
locations and cultures.
Zero Tolerance for Bribery and Corruption
Kendrion maintains a strict zero-tolerance policy toward bribery
and corruption. We define bribery not only as the offering,
promising, or giving of payments or benefits to improperly
influence business outcomes, but also the acceptance of such
offers. Certain departments may naturally face heightened
exposure to corruption and bribery, such as finance and sales,
respectively. Our Anti-Bribery and Anti-Corruption Policy
outlines guidelines for preventing unethical practices,
emphasizing the importance of integrity in financial reporting
and business conduct. Compliance with this policy is a shared
responsibility, and all employees are expected to uphold the
highest ethical standards in every business interaction.
Speak-Up Policy
We encourage employees to report any concerns or suspected
violations of our Code of Conduct or related policies. Our
Speak-Up Policy provides a safe, anonymous way for
employees to raise concerns, whether related to ethical
violations, misconduct, or other issues. It also provides for
adequate protection for employees who file reports under the
policy. The Speak-Up line at Kendrion is compliant with
whistleblowing regulations, providing a secure and confidential
platform for employees to report concerns.
Responsible Business Conduct
At Kendrion, we strive to conduct our business with fairness,
integrity, and transparency. We aim to uphold the highest
standards of ethical conduct across all our business activities.
Our commitment to fostering a strong corporate culture is
rooted in integrity, and we provide clear guidance to our
employees on expected behaviours, while also setting
expectations for our stakeholders, including suppliers.
As part of this commitment, we have identified in our DMA
Business Conduct as a material topic and a key priority for our
organization. This includes a focus on business ethics and
sustainable sourcing practices, which are integral to our long-
term success and responsible business conduct.
References to the expertise of our Executive Board,
Supervisory Board and Management Team including
compliance and business conduct will be further disclosed
under chapter ESRS 2 on page 46.
Commitment to Ethical Business Practices
We are keen to uphold the highest standards of business ethics
across all our operations. We believe that ethical behavior is
foundational to our success and to building trust with our
stakeholders. To this end, we have established a culture in
which ethical values and responsible conduct are not just
encouraged but expected at all levels of the organization.
Impact Risk
+
Ethical business behavior
-
Corruption and fraud
-
Harassment and discrimination
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Annual Integrated Report 2024
The Speak-Up Line is managed by an independent third party
and is available 24/7 through both phone and web-based
reporting systems. Reports can be made in any language, and
employees can feel confident that their concerns will be
handled discreetly and with respect. In December 2024, we
transitioned to a more user-friendly platform for our Speak-up
line. During this update, we also reviewed and revised our
Speak-up policy. Additionally, we took the opportunity to
remind employees about the Speak-up line and its procedures.
The Speak-Up Line is also available to external stakeholders
who may wish to report potential violations of our policies.
Information about the Speak-Up Policy and how to contact the
Speak-Up Line is published on our corporate website to ensure
transparency and accessibility.
Responsible tax practices
Our approach to taxation is consistent with the ethical
standards set forth in our Code of Conduct and reflects our
commitment to responsible business conduct. We report
taxable profits in the jurisdictions where value is created, in
compliance with local tax regulations and international
standards, including the OECD Guidelines for Multinational
Enterprises. Kendrion does not engage in aggressive tax
planning or the creation of entities in tax haven jurisdictions for
the sole purpose of tax optimization. Our tax policy prioritizes
transparency and aligns with our overall strategy of sustainable,
ethical business practices.
For more details on our tax policy, please refer to page 42 of
our Corporate Governance Report.
Leadership and accountability
Senior management plays a critical role in leading by example
and ensuring that all employees adhere to the values and
principles outlined in our policies. We aim to hold ourselves
accountable to the highest standards of integrity and strive to
apply these principles consistently across all our operations.
By fostering a culture of ethical conduct and reinforcing the
importance of compliance, we aim to maintain the trust of our
employees, customers, shareholders, and all other
stakeholders.
Actions
Training and Education for Ethical Behavior
We are committed to ensuring that every employee
understands, embodies, and promotes the ethical principles
laid out in our Code of Conduct. The Code of Conduct is part
of the onboarding process in multiple entities within our
organization. At these locations, the employees are required to
understand, sign off on, and comply with the Code of Conduct.
We envisage to further implement this process in our remaining
entities in 2025. To reinforce this, we provide ongoing training
to all employees, including specialized online courses that focus
on critical topics such as bribery, corruption, conflicts of
interest, and human rights. 1,520 employees including the
Executive Board and Leadership Team have been requested to
conduct the anti-bribery and corruption training and 88%
completed the training. These training programs empower that
employees are equipped with the knowledge and skills to
navigate ethical challenges in their everyday work.
Monitoring
To promote adherence to our ethical standards, we have
established a monitoring and accountability framework.
Compliance with the Code of Conduct and other internal
policies is regularly reviewed through quarterly internal reporting
procedures. These reports are discussed with senior
management to identify areas of improvement and to ensure
that we are meeting our ethical commitments.
In addition, we have a Compliance Committee that meets
quarterly, or more frequently if necessary.
Our Compliance Committee consists of our (i) CFO, (ii) General
Counsel (who acts as the Compliance Officer) and (iii) Group
HR. The Compliance Committee is responsible for overseeing
our compliance framework, setting annual priorities, and
monitoring the execution of those priorities. Furthermore, the
Compliance Committee is the key body responsible for
reviewing and addressing concerns raised through our
Speak-Up Policy, aiming that any complaints are handled
appropriately and in a timely manner.
The members of the Compliance Committee are the Chief
Financial Officer, the Global HR manager, and the General
Counsel (acting Compliance Officer and Secretary of the
Committee). If a complaint involves a member of the Executive
Board—either directly or indirectly—or a member of the
Compliance Committee, the Audit Committee will be engaged
to ensure an independent review.
Kendrion Policies
Fair Labour and Human Rights Anti-bribery and Corruption
Code of Conduct Diversity
Supplier Code of Conduct Grundsatzerklärung
Speak-up Policy
Metrics & targets
Incidents reported in 2024
In 2024, 2 reports were submitted through the Speak-Up Line,
compared to 7 in 2023. Each report was reviewed by the
Compliance Committee, and appropriate action was taken
where necessary.
Other than those 2 reports under the Speak-Up Policy, no
other incidents were reported, or complaints have been filed.
No targets are currently set for the ESRS business conduct.
GOVERNANCE
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Annual Integrated Report 2024
Reference Table
ESRS Description Disclosure Requirement Reference chapter in annual report Pages
ESRS 2 - GENERAL DISCLOSURES
BP-1 General basis for preparation of sustainability statements General -> ESRS 2 General disclosure requirements -> General basis for
preparation
44 - 47
BP-2 Disclosures in relation to specific circumstances General -> ESRS 2 General disclosure requirements -> General basis for
preparation
44 - 47
GOV-1 The role of the administrative, management and
supervisory bodies
Members of the Supervisory Board; Coporate Governance Report 108 - 109; 38 - 42
GOV-2 Information provided to and sustainability matters
addressed by the undertaking’s administrative,
management and supervisory bodies
General -> ESRS 2 General disclosure requirements -> General basis for
preparation
44 - 47
GOV-3 Integration of sustainability-related performance in incentive
schemes
Remuneration Report 115 - 130
GOV-4 Statement on due diligence General -> ESRS 2 General disclosure requirements -> General basis for
preparation
44 - 47
GOV-5 Risk management and internal controls over sustainability
reporting
Risk management; General -> ESRS 2 General disclosure requirements ->
General basis for preparation
31 - 37; 44 - 47
SBM-1 Strategy, business model and value chain Business Groups; ESRS 2 General disclosure requirements -> Strategy & 2024-
2028 ESG program
13 - 23; 47 - 48
SBM-2 Interests and views of stakeholders General -> ESRS 2 General disclosure requirements -> Stakeholder engagement 59 - 60
SBM-3 Material impacts, risks and opportunities and their
interaction with strategy and business model
General -> ESRS 2 General disclosure requirements -> Impact, Risks and
Opportunities
51 - 57
IRO-1 Description of the process to identify and assess material
impacts, risks and opportunities
General -> ESRS 2 General disclosure requirements -> Double materiality
assessment
48 - 51
IRO-2 Disclosure requirements in ESRS covered by the
undertaking’s sustainability statement
Reference Table 103 - 106
MDR-P Policies adopted to manage material sustainability matters Environment -> ESRS E1 - Climate Change -> Policies, ESRS E2- Pollution ->
Policies, ESRS E5 - Resource use and circular economy -> Policies; Social ->
ESSRS S1 - Own workforce -> Human Rights - Policies, Health & Safety -
Policies, Diversity - Policies, Engaging with own workforce - Policies; ESRS S2 -
Workers in the value chain - Policies; ESRS S4 - Consumers and end-users ->
Policies; Governance -> ESRS G1 - Business conduct -> Policies
67; 81; 83; 89; 90; 92; 96; 98; 101
MDR-A Actions and resources in relation to material sustainability
matters
ESRS E1 - Climate Change -> Actions;
ESRS E2 - Pollution -> Hazardous materials, Actions; ESRS E5 - Resource Use
and Circular Economy -> Raw Material Lifecycle in Electromagnet Production,
Actions; Social -> ESRS S1 - Own workforce -> Employees - Actions, Human
Rights - Actions, Health & Safety - Actions, Diversity - Actions, Engaging with
own workforce - Actions; ESRS S2 - Workers in the value chain -> Actions;
ESRS S4 - Consumers and end-users -> Actions; Governance -> ESRS G1 -
Business conduct -> Responsible Business Conduct -> Actions
67 - 68; 81; 83 - 85; 88 - 89; 89; 90 - 91; 92;
96 - 97; 99; 102
GOVERNANCE
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Annual Integrated Report 2024
ESRS Description Disclosure Requirement Reference chapter in annual report Pages
MDR-M Metrics in relation to material sustainability matters Environement -> ESRS E1 - Climate Change -> Metrics & targets;
ESRS E2 - Pollution -> Metrics & targets; ESRS E5 - Resource Use and Circular
Economy -> Metrics & targets; Social -> ESRS S1 - Own workforce -> Metrics &
targets; ESRS S2 - Workers in the value chain -> Metrics & targets; ESRS S4 -
Consumers and end-users -> Metrics & targets; ESRS G1 - Business conduct
-> Metrics & targets
69 - 74; 82; 85 - 86; 93 - 95; 97; 99 - 100; 102
MDR-T Tracking effectiveness of policies and actions through
targets
ESRS E1 - Climate Change -> Actions;
ESRS E2 - Pollution -> Hazardous materials, Actions; ESRS E5 - Resource Use
and Circular Economy -> Raw Material Lifecycle in Electromagnet Production,
Actions; Social -> ESRS S1 - Own workforce -> Employees - Actions, Human
Rights - Actions, Health & Safety - Actions, Diversity - Actions, Engaging with
own workforce - Actions; ESRS S2 - Workers in the value chain -> Actions;
ESRS S4 - Consumers and end-users -> Actions; Governance -> ESRS G1 -
Business conduct -> Responsible Business Conduct, Actions
67 - 68; 81; 83 - 85; 88 - 89; 89; 90 - 91; 92;
96 - 97; 99; 102
E1 - CLIMATE CHANGE
ESRS 2 GOV-3 Integration of sustainability-related performance in incentive
schemes
Remuneration Report 115 - 130
E1-1 Transition plan for climate change mitigation Environement -> ESRS E1 - Climate Change -> Actions 67 - 68
ESRS 2 SBM-3 Material impacts, risks and opportunities and their
interaction with strategy and business model
ESRS E1 - Climate Change -> Our commitment to Climate Responsibility, Our
Role in the Transition to Clean Energy
67
ESRS 2 IRO-1 Description of the processes to identify and assess material
climate-related impacts, risks and opportunities
General -> ESRS 2 General disclosure requirements -> Double materiality
assessment
48 - 51
E1-2 Policies related to climate change mitigation and
adaptation
Environment -> ESRS E1 - Climate Change -> Policies 67
E1-3 Actions and resources in relation to climate change policies ESRS E1 - Climate Change -> Actions 67 - 68
E1-4 Targets related to climate change mitigation and adaptation Environement -> ESRS E1 - Climate Change -> Metrics & targets 69 - 74
E1-5 Energy consumption and mix Environement -> ESRS E1 - Climate Change -> Metrics & targets 69 - 74
E1-6 Gross Scopes 1, 2, 3 and Total GHG emissions Environement -> ESRS E1 - Climate Change -> Metrics & targets 69 - 74
E1-7 GHG removals and GHG mitigation projects financed
through carbon credits
E1-8 Internal carbon pricing 67 - 68
E1-9 Anticipated financial effects from material physical and
transition risks and potential climate-related opportunities
Environement -> ESRS 1 - Climate Change -> Actions
E2 - POLLUTION
ESRS 2 IRO-1 Description of the processes to identify and assess material
pollution-related impacts, risks and opportunities
General -> ESRS 2 General disclosure requirements -> Double materiality
assessment
48 - 51
E2-1 Policies related to pollution ESRS E - Pollution -> Policies 81
E2-2 Actions and resources related to pollution ESRS E2 - Pollution -> Hazardous materials / Actions 81
E2-3 Targets related to pollution ESRS E - Pollution -> Metrics & targets 82
E2-4 Pollution of air, water and soil ESRS E2 - Pollution -> Actions 81
E2-5 Substances of concern and substances of very high
concern
ESRS E2 - Pollution -> Hazardous materials 81
E2-6 Anticipated financial effects from pollution-related impacts,
risks and opportunities
ESRS E - Pollution -> Metrics & targets 82
GOVERNANCE
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Annual Integrated Report 2024
ESRS Description Disclosure Requirement Reference chapter in annual report Pages
E5 - RESOURCE USE AND CIRCULAR ECONOMY
ESRS 2 IRO-1 Description of the processes to identify and assess material
resource use and circular economy-related impacts, risks
and opportunities
General -> ESRS 2 General disclosure requirements -> Double materiality
assessment
48 - 51
E5-1 Policies related to resource use and circular economy ESRS E5 - Resource Use and Circular Economy -> Policies 83
E5-2 Actions and resources related to resource use and circular
economy
ESRS E5 - Resource Use and Circular Economy -> Actions 83 - 85
E5-3 Targets related to resource use and circular economy ESRS E5 - Resource Use and Circular Economy -> Metrics & targets 85 - 86
E5-4 Resource inflows ESRS E5 - Resource Use and Circular Economy -> Metrics & targets 85 - 86
E5-5 Resource outflows ESRS E5 - Resource Use and Circular Economy -> Metrics & targets 85 - 86
E5-6 Anticipated financial effects from resource use and circular
economy-related impacts, risks and opportunities
ESRS E5 - Resource Use and Circular Economy -> Raw Material Lifecycle in
Electromagnet Production
83
S1 - OWN WORKFORCE
ESRS 2 SBM-2 Interests and views of stakeholders General -> ESRS 2 General disclosure requirements -> Stakeholder engagement 59 - 60
ESRS 2 SBM-3 Material impacts, risks and opportunities and their
interaction with strategy and business model
Social -> ESRS S1 - Own workforce -> Introduction and value creation 87 - 88
S1-1 Policies related to own workforce Social -> ESRS S1 - Own workforce -> Introduction and value creation 87 - 88
S1-2 Processes for engaging with own workforce and workers’
representatives about impacts
Social -> ESRS S1 - Own workforce -> Engaging with own workforce 91 - 92
S1-3 Processes to remediate negative impacts and channels for
own workforce to raise concerns
Social -> ESRS S1 - Own workforce -> Engaging with own workforce 91 - 92
S1-4 Taking action on material impacts on own workforce, and
approaches to managing material risks and pursuing
material opportunities related to own workforce, and
effectiveness of those actions
Social -> ESRS S1 - Own workforce -> Employees / Human Rights / Health &
Safety / Diversity / Engaging with own workforce
88 - 92
S1-5 Targets related to managing material negative impacts,
advancing positive impacts, and managing material risks
and opportunities
Social -> ESRS S1 - Own workforce -> Metrics & targets 93 - 95
S1-6 Characteristics of the undertaking’s employees Social -> ESRS S1 - Own workforce -> Metrics & targets 93 - 95
S1-7 Characteristics of non-employees in the undertaking’s own
workforce
Social -> ESRS S1 - Own workforce -> Metrics & targets 93 - 95
S1-8 Collective bargaining coverage and social dialogue Social -> ESRS S1 - Own workforce -> Metrics & targets 93 - 95
S1-9 Diversity metrics Social -> ESRS S1 - Own workforce -> Metrics & targets 93 - 95
S1-10 Adequate wages Social -> ESRS S1 - Own workforce -> Metrics & targets 93 - 95
S1-12 Persons with disabilities Social -> ESRS S1 - Own workforce -> Metrics & targets 93 - 95
S1-14 Health and safety metrics Social -> ESRS S1 - Own workforce -> Metrics & targets 93 - 95
S1-15 Work-life balance metrics Social -> ESRS S1 - Own workforce -> Metrics & targets 93 - 95
S1-16 Remuneration metrics (pay gap and total remuneration) Social -> ESRS S1 - Own workforce -> Metrics & targets 93 - 95
S1-17 Incidents, complaints and severe human rights impacts Social -> ESRS S1 - Own workforce -> Metrics & targets 93 - 95
GOVERNANCE
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Annual Integrated Report 2024
ESRS Description Disclosure Requirement Reference chapter in annual report Pages
S2 - WORKERS IN THE VALUE CHAIN
ESRS 2 SBM-2 Interests and views of stakeholders General -> ESRS 2 General disclosure requirements -> Stakeholder engagement 59 - 60
ESRS 2 SBM-
3
Material impacts, risks and opportunities and their
interaction with strategy and business model
ESRS S2 - Workers in the value chain -> Our responsibility to the Workforce
Driving the Value Chain
96
S2-1 Policies related to value chain workers ESRS S2 - Workers in the value chain -> Policies 96
S2-2 Processes for engaging with value chain workers about
impacts
ESRS S2 - Workers in the value chain -> Actions 96 - 97
S2-3 Processes to remediate negative impacts and channels for
value chain workers to raise concerns
ESRS S2 - Workers in the value chain -> Actions 96 - 97
S2-4 Taking actions on material impacts on value chain workers,
and approaches to managing materials risks and pursuing
material opportunities related to value chain workers, and
effectiveness of those action
ESRS S2 - Workers in the value chain -> Actions 96 - 97
S2-5 Targets related to managing material negative impacts,
advancing positive impacts, and managing material risks
and opportunities
ESRS S2 - Workers in the value chain ->
Metrics & targets
97
S4 - CONSUMERS AND END-USERS
ESRS 2 SBM-2 Interests and views of stakeholders General -> ESRS 2 General disclosure requirements -> Stakeholder engagement 59 - 60
ESRS 2 SBM-
3
Material impacts, risks and opportunities and their
interaction with strategy and business model
ESRS S4 - Consumers and end-users ->
Commitment to Consumner and End-User Well-Being
98
S4-1 Policies related to consumers and end-users ESRS S4 -> Policies 98
S4-2 Processes for engaging with consumers and end-users
about impacts
ESRS S4 - Consumers and end-users -> Actions 99
S4-3 Processes to remediate negative impacts and channels for
consumers and end-users to raise concerns
ESRS S4 - Consumers and end-users -> Actions 99
S4-4 Taking action on material impacts on consumers and end-
users, and approaches to managing material risks and
pursuing material opportunities related to consumers and
end-users, and effectiveness of those actions
ESRS S4 - Consumers and end-users -> Metrics & targets 99 - 100
S4-5 Targets related to managing material negative impacts,
advancing positive impacts, and managing material risks
and opportunities
ESRS S4 - Consumers and end-users -> Metrics & targets 99 - 100
G1 - BUSINESS CONDUCT
ESRS 2 GOV-1 The role of the administrative, supervisory and
management bodies
General -> ESRS 2 General disclosure requirements -> General basis for
preparation
44 - 47
ESRS 2 IRO-1 Description of the processes to identify and assess material
impacts, risks and opportunities
General -> ESRS 2 General disclosure requirements -> Double materiality
assessment
48 - 51
G1-1 Business conduct policies and corporate culture Governance -> ESRS G1 - Business conduct ->Policies 101 - 102
G1-3 Prevention and detection of corruption and bribery Governance -> ESRS G1 - Business conduct -> Actions 102
G1-4 Incidents of corruption or bribery Governance -> ESRS G1 - Business conduct -> Metrics & targets 102
GOVERNANCE
As we navigate an economic landscape that is unlikely to return
to the stability and growth of the past, Kendrion has taken
decisive steps to position itself for long-term resilience. Rather
than relying on hopes for a market recovery, we have embraced
transformation to ensure we are agile, efficient, and prepared
for whatever the future holds. These changes are central to our
strategy of becoming a more focused, less complex industrial
company – one ready to thrive even if the economic
environment remains challenging.
Streamlining Kendrion for a sustainable future
reduce complexity, and adopt leaner systems. Streamlining IT
and organizational workflows reduces costs, enhances
decision-making speed, and brings our development teams
closer to our customers. This enables us to adapt swiftly to
their evolving needs – a critical advantage in today’s volatile
market landscape.
Financial stability amid uncertainty
Despite a challenging economic environment, our 2024
financial results mirrored those of 2023, underscoring our
resilience. We remain confident that our industrial focus and
operational efficiencies will begin driving more stable and
profitable growth, laying a solid foundation for the years to
come.
Looking to the future
As Chairman of the Supervisory Board, I have had the privilege
of working closely with Kendrion’s leadership to guide this
transformation. Our role has been to ensure that these strategic
shifts align with our long-term vision and to support the team in
navigating these changes.
The new Kendrion is being built today – a leaner, more agile,
and focused organization positioned to excel in niche industrial
markets. On behalf of the Supervisory Board, I would like to
thank the Kendrion team for their dedication and adaptability
during this transformative period. Your commitment to our
shared vision is the cornerstone of our success, and together,
we are shaping a Kendrion ready to thrive in the face of any
challenge.
Frits van Hout, Chairman of the Supervisory Board
Pivoting to a pure-play industrial company
In October 2024, we completed the sale of our Automotive
business unit (BU) to Solero Technologies, LCC, a pivotal step
in refining our focus. Exiting the highly competitive European
automotive industry, particularly in Germany, has enabled us to
channel resources toward industrial markets where we can
achieve more sustainable growth and financial stability.
Our niche industrial solutions, built on a limited number of
underlying technological platforms, are designed for
applications with longer design-in cycles but also with long-
term revenue and profitability visibility. Once integrated into a
customer’s product, our components foster enduring
partnerships and stable profitability. This approach, paired with
our ability to expand into additional niche markets, ensures
consistent growth, a stronger value proposition, and enhanced
customer retention.
Retaining strength in China’s EV market
While stepping away from automotive in Europe and the USA,
we have retained automotive activities at our state-of-the-art
factory in Suzhou, China. This facility, operating with a self-
sufficient Chinese supply chain, protects us from geopolitical
risks and ensures uninterrupted operations. The fast-growing
Chinese electric vehicle (EV) market presents significant
opportunities for us to leverage our expertise in this rapidly
expanding sector.
Streamlined for agility and efficiency
Our transformation extends beyond strategic focus to our
organizational structure and processes. A singular focus on
industrial markets has enabled us to simplify operations,
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Annual Integrated Report 2023
PREFACE
F.J. (Frits) van Hout (Chairman), male, 1960
Chairman / Member HR Committee
E.H. (Everien) Slijkhuis, female, 1968
Chair Audit Committee
Nationality Dutch Dutch
International expertise Yes Yes
Date of first appointment 12 April 2021 17 April 2023
Term of office 2021-2025 (first term) 2023-2027 (first term)
Current number of SB positions 5 3
Shares in Kendrion 26,500 3,500
Professional experience Semiconductors Finance/ IT
Other positions
Former positions
Chairman of the Investment Committee of the DeepTech Fonds
(Dutch Ministry of Economic Affairs and InvestNL); Vice-Chairman of
the Supervisory Board, Aixtron SE; Member of the Supervisory
Board, Bambi Belt Holding BV; Member of the Supervisory Board,
Stichting Pho-tonDelta; Member of the Supervisory Board,
Smart Photonics BV; Member of the Technical Advisory Board,
BE Semi-conductors Industries NV
Executive Vice President and Member of the Board of Management,
ASML; Chief Strategy Officer, Chief Program Officer, Chief Marketing
Officer and other various functions, ASML; CEO, Beyeler Group;
Chief Technology Officer, Datacolor.
Co-CEO and CFO, Hydratec Industries NV; Member of the Supervisory
Board and member of the Audit Committee, Deventer Ziekenhuis
CFO Veco B.V.; Interim & Project Manager Finance & IT; Senior
Management function Aviko; Consultant Eiffel; Finance Director
Galegoid; Auditor Deloitte
108
Annual Integrated Report 2023
MEMBERS OF THE SUPERVISORY BOARD
M. (Mirjam) Baijens, female, 1969
Chair HR Committee
E. (Erwin) Doll (vice-chairman), male, 1959
Member Audit Committee
Nationality Dutch German
International expertise Yes Yes
Date of first appointment 15 April 2024 24 June 2020 (1st appointment) 15 April 2024 (2nd appointment)
Term of office 2024-2028 (first term) 2024-2028 (second term)
Current number of SB positions 2 3
Shares in Kendrion No 1,000
Professional experience Human resources, Sales excellence & Sales develop-ment,
Leadership & Executive Development, Conference management
Automotive, plastics, industrial, medical, chemical
Other positions
Former positions
Executive Vice President and Chief Human Resources Officer,
Grundfos Group; Member of the MSC in Management Practitioner
Advisory Board at Cranfield School of Management
Global Head of Talent & Development, Schindler Group; Head of
Human Resources Europe North & East (EUN), Schindler Group;
Vice President Human Resources & Communications, Amcor
Flexibles Europe & Americas; Human Resources Director,
Masco Europe; Global Human Resources Director Sales&Marketing,
Hewlett Packard
Vice Chairman of Supervisory Board, WITTE Automotive GmbH;
Non-Executive Director, Aeristech Ltd.
President & CEO, Röchling Automotive SE; Vice Chairman of the Executive
Board, Röchling Group; Executive Vice President, Plastic Omnium Auto
Exterior; Managing Director, Plastic Omnium GmbH; General Manager,
Johnson Controls GmbH; Business Manager, BASF SE
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Annual Integrated Report 2023
MEMBERS OF THE SUPERVISORY BOARD
The Supervisory Board provides oversight,
evaluates progress and performance, maintains
a sound and transparent system of checks and
balances, and advises the Executive Board when
appropriate.
This Report of the Supervisory Board sets out the way in which
the Supervisory Board fulfilled its duties and responsibilities
in 2024.
Performance in 2024
Under the guidance of the Supervisory Board, the Executive
Board has made significant progress in executing our strategy
for sustainable, long-term value creation. An important
milestone was achieved with the announcement in April 2024
of the sale of the majority of Kendrion’s automotive activities,
which has been completed in the last quarter of this year.
This strategic move marks a crucial turning point for Kendrion,
as the company will now operate as a pure-play industrial
entity, reinforcing our position as a global leader in innovative
actuator and brakes solutions. In various publications and
during our Capital Markets Day on 5 September 2024, we have
referred to Kendrion post the sale of its automotive franchise
as ‘The New Kendrion’.
This transformation to the New Kendrion is not only a reflection
of the company’s commitment to long-term growth but also
serves to sharpen our focus on the core business areas that will
drive future success. With our operations centered around two
business groups, Industrial Actuators & Controls (IAC) and
Industrial Brakes (IB), our global teams have worked diligently
to streamline the organization, optimize overhead costs, and
enhance operational efficiency.
These efforts are essential to ensuring that we remain
competitive and well-positioned to continue delivering value to
our customers worldwide.
Focus points in 2024
In coordination with the Executive Board, the Supervisory
Board previously determined certain focus areas for 2024.
The Supervisory Board placed special emphasis on the
following 4 points in 2024:
Execution of divestment of Automotive Core activities
On 12 April 2024, Kendrion announced the sale of the majority
of its automotive activities to Solero Technologies, LCC. The
transaction was finalized on 30 September 2024, with the
exception of the operations in Sibiu, Romania, which closed on
21 November 2024. The revenue associated with this
divestment is approximately EUR 210 million, representing
80% of Kendrion’s automotive revenue. The European
automotive sound and electronics business, along with the
automotive operations in China, were not part of the transaction
and remain with Kendrion. These activities have now been
integrated into the Business Group Industrial Actuators &
Controls (IAC).
The Supervisory Board commends the Executive Board for
successfully completing this strategic divestment and fully
supports the new strategy of positioning Kendrion as a pure-
play industrial company.
Advancing the execution of the 2024-2028 sustainability
program
s
The shift toward a more sustainable world, driven by clean
energy, has never been more urgent. At Kendrion, we are
committed to actively mitigating the effects of climate change
while addressing important social issues.
Towards the end of 2023, Kendrion finalized the development
of an ambitious sustainability program for the period
2024-2028, which was publicly launched in February 2024.
This new program not only supports a more sustainable future
but also creates commercial opportunities and strengthens
Kendrion’s competitive edge. Sustainable products and
technologies are increasingly becoming the default choice for
a growing number of businesses, unlocking significant market
potential. Our smart actuation technology aligns seamlessly
with the rising demand for solutions that facilitate the transition
to cleaner forms of energy.
In 2024, the company took significant strides in implementing
the 2024-2028 ESG program adopted earlier this year. Notably,
we developed an ESG supplier dashboard, providing insights
into the environmental, social, and governance (ESG)
performance of individual suppliers. This tool allows for more
focused, constructive discussions on relevant areas with our
suppliers. Additionally, we completed the scope 3 emissions
analysis, marking a key milestone in our sustainability efforts.
We also dedicated considerable resources to ensuring
compliance with the Corporate Sustainability Reporting
Directive (CSRD), and in this report, Kendrion reports for the
first time under this new legislation.
Reference is made to the Sustainability Statements (see
pages 43-106), which form an integral part of our 2024 Annual
Integrated Report.
The Supervisory Board commends and supports the
company’s strong commitment to ESG principles and
expresses its gratitude for the extensive efforts put into meeting
the CSRD's mandatory sustainability reporting requirements
for this year.
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REPORT OF THE SUPERVISORY BOARD
Intensify efforts to progress operational flexibility and
operational leverage within Industrial Brakes
In the Business Group Industrial Brakes (IB), Kendrion will
continue to capitalize on the growing demand for electric
motors and electrified solutions in sectors such as intralogistics,
medical and collaborative robotics, and wind power. Faced with
a challenging year, particularly due to tough market conditions
in the German machine-building industry, IB management has
focused on enhancing its operational flexibility to better weather
cyclical downturns. This strategy enabled the alignment of the
direct workforce with revenue trends, while also streamlining
indirect roles.
The Supervisory Board fully supported the measures taken and
is confident that these steps will lead to improved performance
and resilience in the Business Group IB, moving forward.
Ramping our new Automotive E products in China in line
with our customer’s schedule
In the year 2024, Kendrion China successfully ramped several
automotive projects, in line with the customer’s schedule and
demand. Despite a more challenging economic situation than
anticipated this has led to double digit revenue growth.
A robust pipeline for our China based Automotive products,
the expanding electric vehicle market, and promising cross-
selling opportunities for industrial brakes bode well for further
growth going forward.
The Supervisory Board has confidence in Kendrion China’s
growth ambitions and considered the results of 2024 as
evidence that the investment in the new facility, together with
ongoing management attention to ensure maximum use of the
capacity of the facility, is paying off.
REPORT OF THE SUPERVISORY BOARD
Focus points for 2025
The Supervisory Board has defined the following attention
points for 2025:
■ Continue implementation of all actions related to Kendrion
as pure play industrial company, to fully utilize the potential
of 'the New Kendrion'. with special focus on increasing
product margins.
■ Actively track and manage all cost, direct, indirect and other
operating expenses to further improve the effectiveness and
efficiency of the two Business Groups
■ Implement a new off the shelf and cloud-based IT system
■ Further advancing the execution of Kendrion’s 2024-2028
ESG program, with a specific focus on optimizing CSRD
reporting and disclosures.
Meetings and attendance
The Supervisory Board conducted 7 regularly scheduled
meetings and 3 extraordinary sessions throughout 2024 for
a total of 10 sessions.
The regularly scheduled Supervisory Board meetings were
attended by the Executive Board, occasionally joined by
members of the Management Team. Additionally, pre-
scheduled meetings without the Executive Board and
Management Team were held before each regular Supervisory
Board meeting. The attendance rate for all 10 Supervisory
Board meetings in 2024 was 98% (2023: 100%). Mrs. Baijens
was unable to attend one of the 10 Supervisory Board
meetings.
Furthermore, the Chairman of the Supervisory Board and the
Chair of the Audit Committee conducted monthly meetings with
the CEO and CFO, respectively.
The Supervisory Board also focused on direct interaction with
the Management Team and other senior management. This
included presentations in the areas of responsibility and one-
on-one meetings between the Chairman of the Supervisory
Board and members of the Management Team.
The agenda for the Supervisory Board meetings encompassed
the different focus points outlined above, along with recurring
topics routinely addressed each year. These included
discussions on operational and financial performance,
advancements in the strategic plan, principal risks associated
with operations, progress and milestone achievements in
special projects, fraud and risk management, the internal
control system, governance and compliance matters, and
considerations related to the General Meeting of Shareholders.
Evaluation
As is usual practice, the Supervisory Board invested in its
ongoing training, staying updated on governance and
compliance matters. Annually, a comprehensive self-
assessment, encompassing evaluations of both the Supervisory
Board committees and individual members, is conducted.
In a meeting without the presence of the Executive Board,
the Supervisory Board critically assessed its own performance,
whereby aspects such as team dynamics, competencies,
and market knowledge have been considered. Furthermore,
a self-assessment has been conducted through a questionnaire
completed by both Supervisory Board and Executive Board
members. The questionnaire covered various aspects, including
the composition and expertise of the Supervisory Board, the
dynamics and functionality of both the Supervisory Board and
its committees, the performance of individual Supervisory
Board members, the interaction between the Supervisory
Board and the Executive Board, and the tasks and
responsibilities for the Supervisory Board.
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Annual Integrated Report 2023
The evaluation results affirmed a positive and constructive
relationship between the Supervisory Board and the Executive
Board. Members of the Supervisory Board consistently
demonstrate appropriate responsibility, dedication, expertise,
and commitment. The Supervisory Board has a clear
awareness of the difference in roles and responsibilities
between the Supervisory Board and the Executive Board
and are keen to maintain these distinctions.
In Supervisory Board-only meetings, members evaluated the
performance of the Executive Board members. Engaging with
the CEO and CFO, the Supervisory Board deliberated on
performance metrics from the previous year, strategic and
operational priorities for 2024, and opportunities for personal
development.
Composition
The Supervisory Board consists of four members: Frits van
Hout (Chairman), Everien Slijkhuis (Chair of the Audit
Committee), Marion Mestrom until 15 April 2024 (Chair of the
HR Committee), Mirjam Baijens from 15 April 2024 (Chair of
the HR Committee) and Erwin Doll. All members of the
Supervisory Board are independent within the meaning of
the Dutch Corporate Governance Code.
The composition of the Supervisory Board is designed to
ensure that its members can operate critically and
independently, free from influence by each other, the Executive
Board, the Management Team, or any other specific interests.
Each member possesses the necessary expertise, experience,
and background to fulfill their role. The composition of the
Supervisory Board reflects a balanced gender profile of two
men and two women.
REPORT OF THE SUPERVISORY BOARD
The members of the Supervisory Board satisfy the statutory
requirements concerning the number of supervisory or non-
executive functions that they can have with large enterprises.
The composition of the Supervisory Board is in line with the
Profile for the Supervisory Board as drawn up by the
Supervisory Board and the diversity objectives described in the
Diversity Policy for the Supervisory Board. Both the Profile and
the Diversity Policy are available on the corporate website at
www.kendrion.com.
Committees of the Supervisory Board
The Supervisory Board has established two committees:
the Audit Committee and the HR Committee. The primary
task of the committees of the Supervisory Board is to advise
and facilitate the Supervisory Board with respect to its
responsibilities and to prepare decision-making by the
Supervisory Board. The committees of the Supervisory Board
have their own regulations, which include a detailed description
of the committee’s tasks and responsibilities.
Audit Committee
The Audit Committee uses its knowledge and expertise to
advise on and prepare Supervisory Board’s decision-making,
particularly concerning matters relating to Kendrion’s financing,
financial statements, the integrity and quality of financial and
non-financial reporting, IT and information security, the
effectiveness of risk management and internal controls, and the
approach and operation of the internal audit department as
managed by our finance function, and internal audit program.
The Audit Committee consists of Everien Slijkhuis (Chair) and
Erwin Doll (member).
The Audit Committee held 4 meetings in 2024. Attendance
during 2024 was 100% (2023: 100%). The CFO and the
General Counsel & Company Secretary attended all meetings.
The external auditor Forvis Mazars Accountants N.V. attended
the meetings of the Audit Committee during 2024 which the
full-year financial statements for 2023, the half-year financial
statements for 2024 and the management letter were
discussed. The Chair of the Audit Committee also met with
the external auditor without the CFO
The Audit Committee informed itself of the relevant
developments around ESG, including the reporting
requirements under the CSRD and was regularly informed by
management on progress to become CSRD compliant, as
2024 is the first year Kendrion will report under the CSRD.
The Audit Committee monitored and reviewed regular topics
such as: the quarterly financial results, the half-year and full-year
financial statements, the auditor’s report, the risk management
framework and internal control system, the internal audit plan
and key findings of internal audits performed, the external audit
plan and management letter of the external auditors, transfer
pricing, tax policy, treasury policy, the group insurance program,
the speak-up procedure, legal and compliance, the annual
evaluation of the external auditor and the annual evaluation of
the activities of the internal audit department, which is managed
by our finance function.
Regular updates were provided on the maintenance and
effectiveness of the risk management framework and internal
control system relating to strategic, financial, operational, tax
control and compliance matters.
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Annual Integrated Report 2023
With reference to 1.3.6 of the Code, we believe that there is
currently no need to recommend the installation of a dedicated
internal audit function. Considering our company's size and
operational structure, we have determined that the
responsibilities typically assigned to an internal audit
department are effectively managed by our finance function.
This approach ensures robust internal controls and risk
management without the need for a separate internal audit
department. We will continue to assess this decision annually
to ensure it remains appropriate for our governance needs.
Kendrion monitors its internal controls through a systematic
approach, which is supported by a solid risk management
framework and the internal audit program. The effectiveness
of internal and external audit processes are assessed through
a qualitative rating system, evaluating key factors such as
technical skills, experience, communication, quality of findings,
availability of resources, and overall audit performance.
The Audit Committee also discussed tax and treasury matters,
including Kendrion’s policies relating to transfer pricing. With
respect to tax, the Audit Committee also monitored and
discussed the status of pending tax audits.
In addition to the above, the Audit Committee monitored
progress on the execution of the 2020-2025 IT strategic
framework, including a comprehensive session about
information security and information security management and
the investment in a new public cloud system.
At the General Meeting of Shareholders held on 15 April 2024,
Forvis Mazars Accountants N.V. was appointed as the new
external auditor for a three-year term, commencing with the
current financial year. Throughout 2024, the Audit Committee
engaged with the new external auditor, overseeing its
performance and evaluating the effectiveness of the external
audit process. The Audit Committee also reviewed and
REPORT OF THE SUPERVISORY BOARD
approved the 2024 external audit plan, including its scope and
materiality thresholds. Discussions were held regarding the
findings outlined in the auditor's management letter, and
appropriate actions have been taken to address the auditor's
recommendations and observations.
HR Committee
The HR Committee consists of Marion Mestrom until
15 April 2024 (Chair), Mirjam Baijens from 15 April 2024 (Chair)
and Frits van Hout. The HR Committee held 2 meetings, with
an attendance rate of 100% (2023: 100%). The CEO and
Company Secretary attended both meetings. In addition to the
scheduled meetings, the HR Committee had several informal
meetings with and without the members of the Executive Board
being present.
Succession planning
At its meetings, the HR Committee regularly reviews its
composition, with particular attention to succession planning.
As of the 2025 Annual General Meeting of Shareholders, the
first term of Mr. Van Hout is set to expire. Mr. Van Hout has
confirmed his availability for reappointment. Following the HR
Committee's recommendation, the Supervisory Board intends
to propose the reappointment of Mr. Van Hout, and this
nomination will be presented to shareholders at the Annual
General Meeting on 14 April 2025.
Performance management and remuneration of the
Executive Board
The HR Committee considered and prepared the performance
reviews of the members of the Executive Board for discussion
in the Supervisory Board. The outcome of the performance
reviews process was discussed in a Supervisory Board-only
meeting.
Furthermore, the HR Committee agreed the financial and non-
financial performance criteria for the short-term and long-term
variable remuneration of the Executive Board and reviewed
progress on these performance criteria.
The Executive Board provided the HR Committee with
information on the main components of the remuneration
structure applying to members of the Management Team who
are not members of the Executive Board. The variable
remuneration of the Management Team is aligned to the
structure of the Executive Board variable remuneration.
Financial statements and auditor’s opinion
The 2024 financial statements included in this Annual
Integrated Report have been audited and Forvis Mazars
Accountants N.V. has issued an unqualified opinion. These
were discussed with the Supervisory Board and the Audit
Committee in the presence of the external auditor and the
Executive Board.
The Supervisory Board is of the opinion that the 2024 financial
statements meet all requirements for transparency and
correctness. Therefore, the Supervisory Board recommends
that the General Meeting of Shareholders to be held on
14 April 2025 adopt the 2024 financial statements and the
appropriation of net income.
This Annual Integrated Report furthermore contains a limited
assurance report of Forvis Mazars Accountants N.V. on the
Sustainability statements on pages 43-106.
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Annual Integrated Report 2023
Profit appropriation
Kendrion reported a loss of EUR 4.5 million in 2024 (2023
EUR 9.9 million profit). Normalized net profit before
amortization
1
of intangibles amounted to EUR 11.8 million
(2023 EUR 13.9 million).
The Supervisory Board approved the proposal of the Executive
Board to pay out 59% of normalized net profit before
amortization as dividend (2023: 50%), which is in line with the
updated dividend policy of the company.
The members of the Supervisory Board have signed the 2024
financial statements to comply with their statutory obligation
pursuant to article 2:101, paragraph 2, of the Dutch Civil Code.
Concluding remarks
The financial year 2024 was defined by the divestment of
the majority of our automotive activities and a strategic
reorientation, positioning Kendrion as a pure-play industrial
company. Despite ongoing challenging market conditions, the
company delivered a solid financial performance and improved
its balance sheet. As Supervisory Board, we would like to
express our sincere gratitude to the Executive Board, the
Management Team, and the entire staff of Kendrion for their
flexibility, dedication, and commitment throughout what has
been a demanding year. We also extend our appreciation to our
shareholders for their continued trust and support. Looking
ahead, we are confident that Kendrion is well-positioned for
sustained growth and success in the future.
REPORT OF THE SUPERVISORY BOARD
Supervisory Board
Frits van Hout, Chairman
Mirjam Baijens
Erwin Doll
Everien Slijkhuis
28 February 2025
1
Non-IFRS financial measure. For the definition and reconciliation of
the most directly comparable IFRS measures, refer to reconciliation
of non-IFRS information, starting on page 230.
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Annual Integrated Report 2023
REMUNERATION REPORT
Introduction
This Remuneration Report describes the application of the
Remuneration Policy for the Executive Board and the actual
performance in 2024 against the predefined performance
criteria. In addition, the Remuneration report provides an
overview of the remuneration of the Supervisory Board in 2024.
Performance in 2024
In 2024, Kendrion faced a challenging business environment,
with the year marked by the strategic decision to divest the
majority of our Automotive activities. Throughout the year, the
Executive Board remained fully focused on executing this
divestment, which was successfully completed by the end of
September. As a result, Kendrion is now a pure-play industrial
company, concentrating on select high-growth, high-margin
industrial markets. The Executive Board has successfully
transitioned the company into the New Kendrion and has
started the implementation of initiatives to simplify the
organization and to sharpen its focus. While the foundational
steps were laid in the final quarter of this year, the anticipated
annual savings will begin to materialize in full in 2025.
Additionally, the 2024-2028 ESG program was successfully
launched in February of this year. The key components of this
program include:
■ Achieve a further 48% reduction in CO
2
emissions
■ Establish reporting frameworks for Scope 1, 2 and 3
reporting and disclosure
■ Implement gender diversity targets for the Leadership Team
and at Business Group level for Indirect Staff, aiming for a
minimum of 33% women and a minimum of 33% man in
2028 for both groups
■ Sustain ESG ratings from EcoVadis and CDP
Remuneration Policy Executive Board
The Remuneration Policy for the Executive Board has been
developed by the Supervisory Board and adopted by the
General Meeting of Shareholders in April 2023. During the April
2023 General Meeting of Shareholders, a commitment was
made to propose a further adjustment to the share ownership
guideline included in the Remuneration Policy for the Executive
Board. This proposed amendment has been adopted at the
April 2024 General Meeting of Shareholders.
The Remuneration Policy is evaluated at least once every four
years by the Supervisory Board. The Remuneration Policy
adopted by the General Meeting of Shareholders in April 2023
is applicable to (i) remuneration granted in the years 2024 up to
and including 2027 – irrespective whether pay-outs and vesting
of performance shares become due, occur or are made after
2027; and to (ii) remuneration of Executive Board members
reappointed by the General Meeting of Shareholders in April
2023 as of the date on which the new term of office of the
relevant reappointed Executive Board member commences.
The HR Committee will continue to keep the Supervisory Board
informed about relevant market and legislative developments to
support the periodic evaluation of the Remuneration Policy and
related decision-making. For more information about Kendrion’s
Remuneration Policy, please visit the corporate website at
www.kendrion.com.
Remuneration objectives
The Remuneration Policy is designed to attract, retain, and
motivate qualified, experienced, and diverse executives who are
capable of driving Kendrion's sustainable long-term value
creation. Specifically, the policy aims to: (i) maintain a strong link
between pay and performance, (ii) align the interests of the
Executive Board with those of shareholders and other key
stakeholders, and (iii) encourage long-term performance by
promoting share ownership while ensuring adherence to high
standards of corporate governance.
Given Kendrion’s size (in terms of revenue, market
capitalization, total assets, and workforce), market position,
geographical reach, and the competitive labor market, the
company considers firms listed in the AScX Index on Euronext
Amsterdam as a relevant benchmark. Companies in the
financial services, real estate, and entertainment sectors are
excluded from the reference group. Within the defined reference
group, Kendrion is positioned around the median in terms of
the average of the aforementioned parameters revenues,
market capitalization, total assets, and number of employees.
The Executive Board’s remuneration structure and levels are set
to align with the median of this reference group.
The Remuneration Policy excludes variable incentives that
could conflict with the Executive Board’s responsibility to define
and implement Kendrion’s strategy for sustainable long-term
value creation.
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Annual Integrated Report 2023
Temporary deviations
In exceptional circumstances, the Supervisory Board can
decide to temporarily deviate from the Remuneration Policy for
the Executive Board. Exceptional circumstances refer to
circumstances where a deviation is deemed necessary to
support the long-term interests and sustainability of Kendrion or
to ensure its continued viability. Depending on the exceptional
circumstances, the Supervisory Board can resolve to deviate
from any or all the four remuneration components included in
the Remuneration Policy for the Executive Board.
When considering a temporary deviation from the
Remuneration Policy, the Supervisory Board shall consider
Kendrion’s sustainable long-term value creation strategy,
ongoing business, and operational requirements as well as the
financial situation of Kendrion. In addition, the temporary
deviation considered should be assessed against the principles
of reasonableness and fairness.
Upon having resolved a temporary deviation from the
Remuneration Policy, the Supervisory Board will (i) cancel and
withdraw all deviations from the Remuneration Policy prior to
the first annual General Meeting of Shareholders following the
effective date of the deviation; or (ii) propose the necessary
amendments to the Remuneration Policy for adoption during
the first annual General Meeting of Shareholders following
the effective date of the deviation. Deviations from the
Remuneration Policy will be reported in Kendrion’s
remuneration policy.
The Supervisory Board did not decide to deviate temporarily
from the Remuneration Policy for the members of the Executive
Board in 2024.
Remuneration components
The Remuneration Policy for the Executive Board members
consists of four components: a fixed base salary, a short-term
variable remuneration, a long-term variable remuneration and
other benefits such as a pension scheme and a car allowance
or lease budget.
The sum of the fixed base salary, the short-term variable
remuneration and the long-term variable remuneration for the
Executive Board members are considered appropriate in
relation to: (i) the identity, the purpose, and values of Kendrion,
(ii) the pay-ratios within Kendrion, (iii) the (international) context
in which Kendrion operates and (iv) reasonable views of
relevant stakeholder groups.
The variable remuneration components are subject to a
maximum value determined in advance in accordance with the
Remuneration Policy. The Supervisory Board will conduct
scenario analyses to assess whether the pay-out level of
variable remuneration components appropriately reflects
performance.
Fixed base salary
Members of the Executive Board receive a fixed base salary,
the amount of which is set around the median level relative to
the aforementioned reference group. The fixed base salary
levels can be adjusted, following a decision of the Supervisory
Board, based on general market movement and inflation
figures.
In addition to the above, any increase of the annual fixed base
salary up to and around the prevailing median level relative to
the aforementioned reference group, can be decided upon by
the Supervisory Board and will not be regarded as an
amendment to the Remuneration Policy.
In 2024, the Executive Board members received the fixed gross
base salaries as indicated in the table below.
2024 Annual base salary (gross)
CEO (J.A.J. van Beurden) EUR 590,000
CFO (J.H. Hemmen) EUR 350,000
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Annual Integrated Report 2023
REMUNERATION REPORT
The table below provides an overview of the development of the annual gross base salary levels of the members of the Executive Board during previous financial years.
2024 gross
base salary
2023 annual
gross base salary
2022 annual
gross base salary
2021 annual
gross base salary
2020 annual
gross base salary
2019 annual
gross base salary
2018 annual
gross base salary
2017 annual
gross base salary
CEO (J.A.J. van Beurden) EUR 590,000 EUR 550,000
6
EUR 590,000
7
EUR 553,333.32 (actual) EUR 550,000 EUR 550,000 EUR 550,000 EUR 504,645
1
EUR 490,900 EUR 474,300
EUR 550,000
2
EUR 517,916.67
(actual)
4
EUR 508,424.58
3
(actual)
CFO (J.H. Hemmen) EUR 350,000 EUR 335,000
8
EUR 350,000
9
EUR 342,500 (actual) EUR 335,000 EUR 310,788 EUR 270,250 EUR 235,000
5
EUR 254,485.41
(actual)
4
EUR 117,500
(actual)
1
Effective until 1 December 2019.
2
Effective as of 1 December 2019 (i.e. the commencement date of the CEO’s second term).
3
The sum of EUR 462,591.25 (i.e. 11/12
th
of EUR 504,645) and EUR 45,833.33 (i.e. 1/12
th
of EUR 550,000).
4
Voluntary salary reduction of 15% during April through July 2020 inclusive and voluntary salary reduction of 10% for the month August 2020 in view of COVID-19 prompted cost measures.
5
Effective as of 1 July 2019 (i.e. the effective date of appointment to the Executive Board).
6
(CEO) As of 1 January 2023 until expiry 2nd term on 1 December 2023.
7
(CEO) As of commencement 3rd term on 1 December 2023.
8
(CFO) As of 1 January 2023 until expiry of 1st term on 1 July 2023.
9
(CFO) As of commencement 2nd term on 1 July 2023.
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Annual Integrated Report 2023
REMUNERATION REPORT
Short-term variable remuneration
The short-term variable remuneration is payable in cash, the
amount of which is based on the achievement of
predetermined, specific, and measurable financial and non-
financial performance criteria.
The overview below describes the key elements of the short-
term variable remuneration as per the Executive Board’s
Remuneration Policy.
CEO
The short-term variable remuneration ranges from 0%
to 90% of the annual fixed gross base salary of the
CEO, with 60% being the target amount
CFO
The short-term variable remuneration ranges from 0%
to 67.5% of the annual fixed gross base salary of the
CFO, with 45% being the target amount
Performance criteria
The performance criteria for the short-term variable
remuneration are based on Kendrion’s strategic intent to
continuously grow revenue and profitability in a sustainable way,
with a lean and focused organisation, and to provide a safe and
high-quality work environment to its employees. Supportive to
Kendrion’s strategic intent, the performance criteria for the
short-term variable remuneration include financial and non-
financial criteria.
The financial performance criteria determine 60% of the short-
term variable remuneration and reflect the financial priorities of
Kendrion. The remaining 40% of the short-term variable
remuneration is determined by non-financial performance
criteria and reflect sustainability/ESG ambitions and other
priorities directly linked to Kendrion’s strategic intent.
Financial performance criteria
The financial performance criteria determine 60% of the short-
term variable remuneration. Each year the Supervisory Board
selects at least three financial performance criteria from the list
below with a view to incentivise delivery of financial priorities
that support Kendrion’s strategic and operational spearheads.
The Supervisory Board may allocate different weight
percentages to the different financial performance criteria it
selects for a particular year, provided a minimum weight of 10%
shall apply to a financial performance criterion.
■ Financial performance criteria
1
■ Net profit
■ Return on sales (ROS)
■ Return on investment (ROI)
■ Organic growth
■ Free cash flow
■ Revenue
■ EBITA
■ EBITDA
Non-financial performance criteria
The non-financial performance criteria determine 40% of the
short-term variable remuneration. Each year the Supervisory
Board selects a certain number of on-financial performance
criteria derived from the strategic and operational spearheads
for the respective performance year, which will in any event
include performance criteria in the area of sustainability/ESG
(i.e. environmental, social and/or governance criteria).
Achievement of each individual non-financial performance
criterion will be measured by applying a binary scoring model.
The amount of the pay-out for the achievement of non-financial
performance criteria depends on the number of non-
performance criteria achieved. A predefined step curve will be
applied to calculate the pay-out between the achievement of
the minimum threshold number of selected non-financial
performance criteria and achievement of all selected non-
financial performance criteria. No pay-out will be made for
below threshold performance.
Investment
Members of the Executive Board must invest at least 50% of
the net amount of the pay-out of the short-term remuneration
earned until the required ownership level has been reached as
prescribed under the ‘Share ownership guideline’ described in
the Remuneration Policy.
1
In each case excluding items that are generated outside the ordinary course of business and the amortization of intangibles arising on acquisitions or similar corporate events.
The performance incentive zone (threshold, target and
maximum) for each financial performance criterion will be
determined in advance by the Supervisory Board by reference
to the strategic and operational spearheads for the respective
performance year. No pay-out will be made for below threshold
performance. In the case of performance equal to the threshold
performance of the relevant performance criterion, the pay-out
of the short-term incentive will be equal to 50% of the relevant
target amount. A linear curve will be applied to calculate the
pay-out between threshold performance and maximum
performance.
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REMUNERATION REPORT
2024 short-term variable remuneration
Within the framework of the Executive Board Remuneration
Policy, the Supervisory Board takes an informed decision
relevant to the variable remuneration of the Executive Board
members. For the determination of the financial and non-
financial performance criteria of the 2024 short-term incentive,
the Supervisory Board considered – amongst others – the 2024
focus items as previously defined by the Supervisory Board; the
increasing demands and complexity around ESG and ESG
reporting and disclosure requirements, the volatile economic
climate and trading environment; and the importance of long-
term value creation through continued investments in
sustainable growth areas. The 2024 focus items of the
Supervisory Board included the following: (i) the execution of
divestment of automotive core activities; (ii) advancing the
execution of the 2024-2028 ESG program; (iii) increase the
operational flexibility and operational leverage within Industrial
Brakes; (iv) ramping the new automotive E-products in China in
line with customers’ schedule (CEO); and (v) manage
Kendrion's financial position and maintain a leverage ratio at or
below 3.0 (CFO).
The Supervisory Board reported on the progression made and
the key points of attention relevant to the 2024 focus items in
the Report of the Supervisory Board included in this Annual
Integrated Report.
For the 2024 short-term variable remuneration, the Supervisory
Board followed the recommendations of the HR Committee
and selected four financial performance criteria, a non-financial
performance criterion in the area of sustainability/ESG and
other non-financial performance criteria that are linked to the
Supervisory Board’s 2024 focus items and Kendrion’s strategic
plan and operational spearheads. The 2024 financial and non-
financial performance criteria reflect the collective responsibility
of the Executive Board members and make no distinction
between the applicable performance criteria for the CEO and
CFO.
In 2024, the following short-term incentive target amounts
applied to the members of the Executive Board:
2024 short-term incentive
target amount
CEO (J.A.J. van Beurden) EUR 354,000 (= 60% of 2024
fixed gross base salary of EUR
590,000)
CFO (J.H. Hemmen) EUR 157,500 (= 45% of 2024
fixed gross base salary of EUR
350,000)
For the performance year 2024, the short-term incentive
performance criteria are allocated as follows:
Short-term remuneration as percentage of annual
gross base salary
Performance
criterion
Weight Minimum At target Maximum
Financial performance criteria (60%)
ROI 15% 0 CEO 9% 13.5%
CFO 6.75% 10.2%
ROS 15% 0 CEO 9% 13.5%
CFO 6.75% 10.2%
EBITDA 10% 0 CEO 6% 9%
CFO 4.5% 6.75%
Free cash flow 20% 0 CEO 12% 18%
CFO 9% 13.5%
Non-financial performance criteria (40%)
0 CEO 24% 36%
CFO 18% 27%
TOTAL 100% 0 CEO 60% 90%
100% 0 CFO 45% 67.5%
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Annual Integrated Report 2023
REMUNERATION REPORT
2024 short-term financial performance criteria
In 2024, the actual performance against the financial performance criteria was as follows:
2024 short-term incentive performance on financial performance criteria
Financial
performance
criterion
Pay-out as % of
short-term incentive
target amount
Pay-out as % of
2024 annual gross base salary (actual)
Pay-out in EUR (gross)
CEO (J.A.J. van
Beurden)
CFO (J.H. Hemmen) CEO (J.A.J. van
Beurden)
CFO (J.H. Hemmen)
ROI 0.0% 0% 0% EUR 0 EUR 0
ROS 11.3% 6.78% 5.09% EUR 40,002 EUR 17,815
EBITDA 0.0% 0% 0% EUR 0 EUR 0
Free cash flow 11.1% 6.66% 5.00% EUR 39,294 EUR 17,500
TOTAL 22.4% 13.44% 10.09% EUR 79,296 EUR 35,315
2024 short-term non-financial performance criteria
The non-financial performance criteria for the 2024 short-term incentive reflect the collective responsibility of the Executive Board
and are aligned with the Supervisory Board’s 2024 focus items, as well as Kendrion’s strategic and operational spearheads.
This results in four targets for each of the CEO and CFO, with three of those targets overlapping.
The table below provides a summary description of the non-financial performance criteria.
Summarized description 2024 non-financial performance criteria
Strategic
Sustainability
Successful divestment of Kendron’s Automotive business
Finalize scope 3 analyses and establish internal reporting set-up to enable reliable scope 3
reporting and disclosure; implement Kendrion’s supplier ESG dashboard
Industrial Brakes Increase the operational flexibility and operational leverage within Industrial Brakes
China (CEO only) Successfully ramp the China based Automotive projects in line with customers’ schedule
Cash flow management (CFO only) Manage Kendrion’s financial position and maintain a leverage ratio at or below 3.0
Consistent with the Remuneration Policy, achievement of an
individual non-financial performance criterion will be measured
by applying a binary scoring model where a non-financial
performance criterion can either be achieved or not achieved.
The amount of the pay-out for the non-performance criteria
depends on the number of non-financial performance criteria
achieved. The following step curve is applicable for the 2024
non-financial performance criteria.
Number of non-financial
performance criteria achieved
Short-term
incentive pay-out
% of target amount
All 4 non-financial performance criteria achieved 150%
3 out of the 4 non-financial performance criteria achieved 100%
2 out of the 4 non-financial performance criteria achieved 50%
1 out of the 4 non-financial performance criteria achieved 0%
0 out of the 4 non-financial performance criteria achieved 0%
Throughout the year, the Supervisory Board reviewed progress
against the non-financial performance criteria and received
detailed updates about relevant developments and actions
taken. During the December 2024 Supervisory Board meeting,
the Executive Board presented the results and progress
realized for each of the performance criteria. During its
discussion at that meeting, the Supervisory Board and the
Executive Board also considered the persistent challenging
operating environment, the need and urgency for continued
focus on operational costs, as well as the increasing demands
and complexity around ESG and the implementation of CSRD
and related disclosure requirements.
With the announcement of the divestment of the majority of its
automotive activities in April 2024, Kendrion has transformed
into a pure-play industrial company. The Executive Board has
successfully executed the divestment and the implementation
of the New Kendrion, while continued focus on costs and
operational efficiency remains key.
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Annual Integrated Report 2023
REMUNERATION REPORT
During the annual performance reviews, the Supervisory Board
paid specific attention to the individual performance and
development of the Executive Board members against the non-
financial criteria and the key competencies like leadership and
organizational alignment and strategic business orientation.
Based on these reviews, the Supervisory Board resolved that
the Executive Board members realized all four non-financial
performance criteria as set under the 2024 short-term variable
remuneration.
Following completion of its sustainability framework at the end
of 2023, Kendrion launched its new 2024-2028 ESG program
in February 2024. Notable actions this year included the
development of a supplier ESG dashboard, completing the
scope 3 analysis, and the implementation of CSRD and related
disclosures.
Kendrion was also able to successfully ramp several automotive
projects in China, in line with the customers’ schedule and
planning, which resulted in significant growth in China, despite
the challenging economy.
The Executive Board also succeeded in improving both the
financial and the operational performance at IB, in the face of a
continued weak trading environment. Kendrion’s leverage ratio
stayed below 3.0 at the end of each of the four quarters in
2024.
Consistent with the step-up curve, the score on the non-
financial performance criteria results in a pay-out of 150% of
the short-term target amount corresponding to a pay-out of
EUR 212,400 (gross) for the CEO and EUR 94,500 (gross) for
the CFO, representing 36% of the CEO’s 2024 annual gross
base salary of EUR 590,000 and 27% of the CFO’s 2024
annual gross base salary of EUR 350,000.
2024 pay-out short term incentive
Overall performance resulted in the following pay-out of the
short-term incentive in 2024:
Total pay-out 2024 short-term incentive (gross) Pay-out as % of 2024 annual gross base salary (actual)
CEO (J.A.J. van Beurden) EUR 291,696
(i.e. sum of EUR 79,296 and EUR 212,400)
49.44% of the gross annual base salary
of EUR 590,000
CFO (J.H. Hemmen) EUR 129,815
(i.e. sum of EUR 35,315 and EUR 94,500)
37.09% of the gross annual base salary
of EUR 350,000
The table below provides an overview of the development of the pay-out under the applicable short-term incentive scheme
of the members of the Executive Board during previous financial years.
Short-term incentive
2023
*
2022
*
2021
*
2020
*
2019
*
2018
*
2017
*
CEO (J.A.J. van Beurden) EUR 269,584
(gross)
EUR 267,438
(gross)
EUR 429,000
(gross)
EUR 358,600
(gross)
EUR 191,282.90
(gross)
EUR 117,816
(gross)
EUR 170,748 (gross) based on 90% achievement of
2017 performance criteria, representing 36% of gross
annual base salary (i.e. 36% of EUR 474,300),
one-third paid in cash and two-thirds awarded
conditionally in shares.
CFO (J.H. Hemmen) EUR 111,548
(gross)
EUR 95,023
(gross)
EUR 141,408.80
(gross)
EUR 102,965
(gross)
EUR 37,012.50
(gross)
Not applicable – effective date of appointment to the Executive Board
1July 2019
*
Pay-out amounts calculated in accordance with the then prevailing remuneration policy.
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Annual Integrated Report 2023
REMUNERATION REPORT
Long-term variable remuneration
The long-term variable remuneration component incentivizes
the Executive Board members to focus on long-term
sustainable value for shareholders and other stakeholders; it
thereby serves to align the interests of the Executive Board
members with the long-term interests of shareholders and
other stakeholder groups.
The Executive Board members annually receive conditional
performance shares. The conditional performance shares will
vest upon achievement of performance measured over a period
of three years, including the year in which the conditional
performance shares are granted. Vested performance shares
are restricted by a two-year holding period as of vesting.
The size of the award is defined as a percentage of the annual
fixed gross base salary of the relevant Executive Board member
as per the year in which the conditional performance shares are
granted. The actual grant (i.e. the number of conditional
performance shares) is determined by the percentage of the
annual fixed gross base salary and calculated based on the
average share price during the fourth quarter of the year
immediately preceding the year in which the conditional
performance shares are granted.
The target value as per the year in which conditional
performance shares are granted is as follows:
CEO 60% of the annual fixed gross base salary of the CEO
CFO 50% of the annual fixed gross base salary of the CFO
The maximum opportunity for the long-term variable
remuneration shall not exceed 150% of the target value.
Performance measure
The vesting percentage of the performance shares is
conditional upon the achievement of performance measured
as:
Weight Performance measure
40% Relative total shareholder return (relative TSR)
40% Basic earnings per share (EPS)
20% Sustainability/ESG (i.e. environmental, social and/or
governance)
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Annual Integrated Report 2023
REMUNERATION REPORT
Relative TSR
To determine achievement of this performance measure, the relative TSR is measured, which
means share price movements, including dividends and assuming that dividends are reinvested.
For the calculation of the relative TSR position, the reinvestment of cash dividend in fixed-
income securities and the reinvestment of stock dividend in the relevant share are taken into
account. The TSR performance of Kendrion is measured against the performance of 20 selected
TSR peer companies included in the table below.
# Company Industry Country
Market value
(EUR x 1 mln)*
1. Schneider Electric SE Electrical components France 74,653
2. Eaton Corporation plc Diversified industrials USA 58,485
3. Sensata Technologies
Holding NV
Electronic equipment: gauges and
meters USA 5,787
4. Aalbers Industries NV Electronic equipment: control and filter Netherlands 4,006
5. Emerson Electric Co Electronic equipment: other USA 53,229
6. Continental AG Auto parts Germany 11,272
7. Schaeffler AG Auto parts Germany 1,057
8. TKH Group NV Electrical components Netherlands 1,568
9. Borg Warner Inc Auto parts USA 8,831
10. SKF AB Metal fabricating Sweden 6,096
11. Phoenix Mecano AG Machinery: industrial Switzerland 320
12. Grammar AG Auto parts Germany 158
13. Regal Beloit Electrical components USA 7,437
14. IMI Plc Electronic equipment: control and filter UK 3,786
15. Autoneum Holding AG Auto parts Switzerland 483
16. Akwel Auto parts France 465
17. Elringklinger AG Auto parts Germany 436
18. VBG Group publ AB Auto parts Sweden 299
19. Kongsberg Automotive
ASA
Auto parts Norway 253
20. Sogefi SpA Auto parts Italy 112
Identified possible replacements in case of delisting or other corporate events in respect of any
of the above selected TSR peer companies.
# Company Industry Country
Market value
(EUR x 1 mln)*
ABB Ltd Electrical components Switzerland 55,833
VAT Group AG Electronic equipment: control and filter Switzerland 7,681
Addtech AB Electrical components Sweden 3,475
Incap Oyj Electrical components Finland 501
Katek SE Electrical components Germany 204
Freni Brembo SpA Auto parts Italy 3,489
Vitesco Technologies
Group AG
Auto parts Germany 2,185
JOST Werke AG Auto parts Germany 788
hGears AG Auto parts Germany 75
*
Per reporting date 31 December 2022.
The position of Kendrion in the TSR performance peer group, upon expiry of the three-year
performance period, determines the score for the relative TSR measure in accordance with the
following performance incentive zone:
Ranking 1-3 4 5 6 7 8 9 10 11-21
Vesting 150% 137.5% 125% 112.5% 100% 83% 67% 50% 0%
The position of Kendrion in the ranking defines the vesting for this part of the conditional grant of
shares. The calculation to determine Kendrion’s ranking shall be conducted by an external
independent and reputable specialized firm.
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REMUNERATION REPORT
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Annual Integrated Report 2023
REMUNERATION REPORT
EPS
EPS is disclosed in Kendrion’s consolidated financial statements
and is calculated by dividing the profit or loss attributable to
shareholders of Kendrion by the weighted average number of
shares outstanding during the relevant period, excluding ordinary
shares purchased by Kendrion and held as treasury shares.
Earnings are adjusted for changes in accounting principles
during the performance period.
The Supervisory Board sets the performance incentive zone
(threshold, target and maximum) annually by reference to the
mid-term plan as approved by the Supervisory Board in the year
of the grant date. Given that these targets are considered
commercially sensitive, EPS targets and the achieved
performance are disclosed in the Annual Integrated Report after
the relevant performance period.
The following performance incentive zone will be used to define
the vesting for this part of the conditional grant of shares:
< Threshold Target Maximum
EPS 0 100% 150%
Vesting is linear between threshold performance and on target
performance and between on-target performance and
maximum performance.
Sustainability/ESG
The Supervisory Board sets annually a sustainability target that
is aligned with Kendrion’s sustainability ambitions. The
Supervisory Board also sets the performance incentive zone
(threshold, target and maximum) annually. The achieved
performance will be disclosed in the Annual Integrated Report
after expiry of the relevant three-year performance period.
The following performance incentive zone will be used to define
the vesting for this part of the conditional grant of shares:
< Threshold Target Maximum
Sustainability/
ESG
0 100% 150%
Vesting is linear between threshold performance and on target
performance and between on-target performance and
maximum performance.
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Annual Integrated Report 2023
2024 long-term variable remuneration
Consistent with the applicable Remuneration Policy as adopted
by the General Meeting Shareholders on 16 April 2024, the
members of the Executive Board were granted conditional
performance shares as described in the table below.
2024 annual
gross base salary (actual)
Target amount
Average share
price Q4 2023
Conditional
performance shares
Performance period Expiry holding period
CEO (J.A.J. van Beurden) EUR 590,000 EUR 354,000
(i.e. 60% of EUR
590,000)
EUR 11.57 30,596 Performance period 2024-2026 End of 2028
CFO (J.H. Hemmen) EUR 350,000 EUR 175,000
(i.e. 50% of EUR
350,000)
EUR 11.57 15,126 Performance period 2024-2026 End of 2028
In accordance with the applicable Remuneration Policy, the
vesting percentage of the performance shares is conditional to
the realization of the performance criteria Relative TSR, EPS
and a non-financial measure relating to sustainability/ESG. The
sustainability/ESG performance criteria for the 2024 long-term
incentive are related to the achievement of a 60% reduction in
CO
2
emissions in line with the 2024-2028 ESG program, which
will result in a 70% reduction in CO
2
emissions by the end of
2028.
Based on the contents and quality of the actions taken and
strategies developed, the Supervisory Board shall determine
the actual performance at the end of the performance period
along the lines as described above.
REMUNERATION REPORT
2022 long-term variable remuneration
Pursuant to the 2022 long-term incentive scheme, 16,144 conditional performance shares have been granted to Joep van Beurden
and 8,194 conditional performance shares have been granted to Jeroen Hemmen. The number of conditional performance shares
has been calculated as follows:
2022 annual
gross base salary
Target amount
Average share
price Q4 2020
Conditional
performance shares
CEO (J.A.J. van Beurden) EUR 550,000 EUR 330,000 (i.e. 60% of EUR 550,000) EUR 20.44 16,144
CFO (J.H. Hemmen) EUR 335,000 EUR 167,500 (i.e. 50% of 350,000) EUR 20.44 8,194
Consistent with the Remuneration Policy governing the 2022 long-term variable remuneration, the vesting percentage of the
performance shares is conditional upon the achievement (during the performance period 2022-2024) of performance measured as:
Weight Performance measure
40% Relative total shareholder return (relative TSR)
40% Basic earnings per share (EPS)
20% Sustainability (i.e. environmental, social and/or governance)
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Annual Integrated Report 2023
A summary description of the performance measure in the area of sustainability for the performance period 2022-2024 has been
included in the table below.
Summary description sustainability performance measure 2022-2024
Development of strategies aimed at the increase of
the share of environmentally sustainable economic
activities in line with the EU taxonomy, and
Realization of diversity targets
■ On target performance (i.e. 100% vesting)
■ Max. performance (i.e. 150% vesting)
■ Min. threshold performance (i.e. 0% vesting)
REMUNERATION REPORT
This achievement results in a at target performance under the
2022 long-term incentive scheme for the sustainability/ESG
performance measure and thereby results in 100% vesting of
the 20% of the target-value. As a result, 3,229 performance
shares have vested for Mr. Van Beurden, and 1,639
performance shares have vested for Mr. Hemmen for this
performance measure.
Summary 2022 long-term variable remuneration
This means that under the 2022 long-term incentive plan, a
total number of 3,229 shares have vested for Mr. Van Beurden
and a total number of 1,639 shares have vested for
Mr. Hemmen. The vested shares remain subject to a holding
period until the end of 2026.
In accordance with the long-term incentive plan, Mr. Van
Beurden and Mr. Hemmen will be entitled to accrued dividends
for each of the 3,229 and 1,639, respectively, vested shares.
Accrued dividends will be paid in cash.
Vesting is linear between min. threshold performance and
on-target performance and between on-target performance
and max. performance.
TSR and EPS
When measuring the relative TSR, the position of Kendrion
within the predefined TSR performance peer group, as
stipulated in the Remuneration Policy for the 2022 long-term
incentive plan, is eleven. As per the Remuneration Policy
governing the 2022 long-term variable remuneration, the
eleventh position leads to a 0% vesting.
Based on the EPS performance incentive zones determined by
the Supervisory Board by reference to the 2022 mid-term plan,
the actual 2024 EPS falls below the predetermined minimum
threshold performance level and therefore leads to a 0%
vesting.
Sustainability/ESG
The sustainability / ESG performance measure comprised two
elements: (i) the development of strategies aimed at increasing
the share of environmentally sustainable economic activities in
line with the EU taxonomy, and (ii) the realization of diversity
targets.
As per the end of 2024, we progressively increased the
percentage of eligible revenue under the EU taxonomy
accomplished by a focus on and significant investments in
product development in inductive heating in IAC, suspension
valves and sound systems for electric vehicles in Automotive
and by maintaining the market leading position in wind power
in IB.
In addition, a target and reporting framework has been set up
per business group, targeting a minimum of 25% improvement
between 2023 and 2028, reaching at least 33% female and
33% male indirect staff per business group. The percentage of
female indirect employees per 31 December 2024 has
increased with 1% to 31% compared to the start of the
measurement period.
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Annual Integrated Report 2023
Development long-term incentive
The table below provides an overview of the development of
the conditional share awards under the long-term incentive plan
for the Executive Board members during previous financial
years. The table also specifies the expiry of vesting periods and
holding periods for conditional shares awarded.
Long-term
incentive
2023
number
of shares
Expiry
vesting
period
2022
number
of shares
Expiry
vesting
period
2021
number
of shares
Expiry
vesting
period
holding
period
2020
number
of shares
Expiry
vesting
period
holding
period
2019
number
of shares
Expiry
vesting
period
holding
period
2018*
number
of shares
Expiry
vesting
period
holding
period
2017
number
of shares
Expiry
vesting
period
holding
period
CEO (J.A.J.
van Beurden)
4,049 End of
2025
16,465 End of
2024
20,245 End of
2023
End of
2025
16,533 End of
2022
End of
2024
11,559 End of
2021
End of
2023
6,960 End of
2020
End of
2022
3,383 End of
2019
End of
2021
CFO (J.H.
Hemmen)
1,906 End of
2025
6,740 End of
2024
9,533 End of
2023
End of
2025
6,769 End of
2022
End of
2024
2,409 End of
2021
End of
2023
*
2018 and earlier years: not applicable for the CFO, as his effective
date of appointment to the Executive Board was 1 July 2019.
Pension arrangement and other benefits
Executive Board members participate in the defined
contribution pension scheme. Kendrion N.V. will pay: (i) the cost
of contributions for participation in the defined contribution
scheme; (ii) the risk premium for the surviving dependents’
pension (nabestaandenpensioen) and (iii) the cost of
contributions for participation in the occupational disability
insurance (including WIA excedentverzekering) (collectively
the “Pension and Disability Insurance Contribution”). In addition,
Executive Board members are entitled to an annual gross
allowance to compensate for the loss of accrual of pension
benefits because of the Dutch Wage Tax Act, provided that the
sum of the Pension and Disability Insurance Contribution and
such annual allowance (the ''Total Amount'') shall annually not
exceed an amount of EUR 75,000. This amount may be
adjusted based on market developments.
REMUNERATION REPORT
No schemes have been agreed for the voluntary early
retirement of members of the Executive Board.
Kendrion maintains a car lease policy for members of the
Executive Board. The lease budget (including fuel) is EUR 2,000
per month. Alternatively, members of the Executive Board are
entitled to a monthly gross car allowance of EUR 2,000.
In addition, Kendrion pays a monthly expense allowance to
Executive Board members of up to EUR 450, to cover costs
that are not suitable for individual reimbursement.
The amount of the car allowance and the expense allowance
are not included as a basis for calculation of the Pension and
Disability Insurance Contribution, or any other (variable)
remuneration or allowance, severance amount or benefit.
Kendrion has arranged for a directors’ and officers’ liability
insurance. The costs for this insurance are for the account
of Kendrion.
The Executive Board participates in the defined contribution
plan of Kendrion. The pension contribution in 2024 was
EUR 78,115 (2023: EUR 75,000) for the CEO and EUR 80,758
(2023: EUR 75,000) for the CFO. The overpaid amounts will be
reconciled through deductions from salary payments in 2025.
In 2024, a monthly car allowance of EUR 2,000 gross was
provided to the CFO. Both amounts exceed the Total Amount
resulting from an error in the administrative process.
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Annual Integrated Report 2023
Share ownership guideline
An objective of the Remuneration Policy is to appropriately align
the interests of the members of the Executive Board with the
interests of shareholders by encouraging share ownership. As
per the Remuneration Policy adopted by the General Meeting
of Shareholders on 15 April 2024, Kendrion applies a share
ownership guideline for Executive Board members of 200% of
the annual fixed gross base salary for the CEO and 100% of the
annual fixed gross base salary for the CFO. This shareholding
must be gradually built up with performance shares earned
under the long-term incentive plan, although it is permitted to
sell shares to finance taxes due at the date of vesting of the
performance shares, and by purchasing shares with at least
50% of the net amount of the pay-out of the short-term
incentive.
Although the abovementioned adjustments will be proposed to
the General Meeting of Shareholders for adoption on 15 April
2024, the management agreements with the current members
of the Executive Board covering the third term for the CEO and
the second term of the CFO, include the abovementioned
share ownership requirements and provisions.
Policy in case of change of control
Unvested performance shares awarded shall be deemed
vested as per the date of the change of control assuming on
target performance, subject to: (i) pro rating to reflect the
proportion of the normal performance period that has elapsed
as per the date of the change of control, and (ii) the
discretionary authority of the Supervisory Board to determine
otherwise, should such deemed vesting of performance shares
result in unreasonable or unequitable remuneration.
Adjustment and claw back
The Supervisory Board is authorized to adjust the amount of
the short-term and long-term variable remuneration to an
appropriate level should payment thereof result in unreasonable
or unequitable remuneration. In addition, a so-called claw-back
provision applies pursuant to which the Supervisory Board has
the authority to recover in whole or in part short-term and long-
term variable remuneration awarded to members of the
Executive Board should it transpire that such variable
remuneration was unjustifiably awarded based on incorrect
information.
Other key elements
Term and termination
Management agreements with Executive Board members are
entered for a definite period of four years. The management
agreement may be terminated with due observance of a notice
period of six months. Kendrion is entitled to terminate the
management agreement with immediate effect for cause (i.e.
seriously culpable or negligent behavior on the part of the
Executive Board member).
Termination fee
In the event of termination of the management agreement on
Kendrion’s initiative, the termination fee for members of the
Executive Board shall not exceed 100% of the annual fixed
gross base salary (i.e. excluding short-term and long-term
incentive and other elements such as pension contributions).
The members of the Executive Board are not entitled to a
termination fee if the contract is terminated for cause on the
part of the Executive Board member or if the contract is
terminated at the initiative of the Executive Board member.
Pay ratio
The CEO to employee pay-ratio is approximately 18 (2023: 18).
This pay ratio is based on the remuneration of the CEO
including pensions and other expenses and the average wage
costs per FTE in 2024 as disclosed on page 94 of this Annual
Integrated Report.
Remuneration Policy Supervisory Board
Objectives
The remuneration policy of the Supervisory Board serves to
recruit and retain diverse, qualified, and experienced members
to supervise the way the Executive Board implements
Kendrion’s long-term value creation strategy. Considering the
nature of the supervisory responsibilities of the Supervisory
Board, the remuneration is not linked to Kendrion’s
performance, and therefore includes a fixed component only.
In line with good corporate governance, Supervisory Board
members will not receive a share-based incentive.
The remuneration of the Supervisory Board is as described in
the table below. The base fee and committee fee levels in the
table below are the same as determined by the General
Meeting of Shareholders on 11 April 2022.
Base fee
Chairman Supervisory Board EUR 59,000
Member Supervisory Board EUR 41,800
Committee fee
Chair Audit Committee EUR 7,200
Member Audit Committee EUR 6,000
Chair HR Committee EUR 7,200
Member HR Committee EUR 6,000
REMUNERATION REPORT
129
Annual Integrated Report 2023
Expenses
All reasonable and documented expenses incurred by the
Supervisory Board members while performing their duties are
reimbursed.
Benefits and loans
Members of the Supervisory Board are not eligible to participate
in any benefits scheme offered by Kendrion to its employees,
nor shall Kendrion provide loans.
The aggregate amount of the remuneration of the Supervisory
Board members in 2024 was EUR 212,850 (2023: EUR
214,883). The table below gives a breakdown of the
remuneration per Supervisory Board member.
Supervisory Board member 2023
F.J. van Hout (Chairman) EUR 65,000
M.J.G. Mestrom (until 15 April 2024) EUR 14,300
M.Baijens (as of 15 April 2024) EUR 36,750
E.H. Slijkhuis EUR 49,000
E.M. Doll EUR 47,800
Total
EUR 212,850
Advisory vote remuneration report 2023
The remuneration report 2023 has been discussed with the
shareholders and put to the General Meeting of Shareholders
for an advisory vote during the annual General Meeting of
Shareholders held on 15 April 2024. Of the votes cast, 99.99%
voted in favor of the 2023 remuneration report. Supported by
this advisory vote, the Executive Board and the Supervisory
Board considered that no substantive changes are needed
relevant to the application of the Remuneration Policy.
The voting results of the General Meeting of Shareholders held
on 15 April 2024 can be found on the corporate website at
www.kendrion.com.
Taking account of the content of this Remuneration Report
pertaining to financial year 2024, it is determined that the
aggregate amount of remuneration awarded is in line with the
Remuneration Policy and contributes to the performance of
Kendrion and the execution of its long-term value creation
strategy.
This 2024 Remuneration Report will be discussed with
shareholders and put to the General Meeting of Shareholders
for an advisory vote during the upcoming annual General
Meeting of Shareholders to be held on 14 April 2025.
REMUNERATION REPORT
Remuneration components 2024
(in EUR) CEO % CFO %
Base salary 590,000 59.07% 350,000 57.83%
Short term incentive 291,696 29.20% 129,815 21.45%
Long term incentive 33,581.60 3.36% 17,045.60 2.82%
Pension contribution 78,115* 7.82% 80,758* 13.34%
Other 5,400 0.54% 27,600 4.56%
Total compensation
998,792.60 100% 605,218.60 100%
*
These amounts include the overpayments as described on page 127.
130
Annual Integrated Report 2023
Executive Board remuneration comparative
EUR Thousand 2024 2023 2022 2021 2020
J.A.J. van Beurden, CEO 998.8 951.4 1,153.0 1,118.0 984.2
J.H. Hemmen, CFO 605.2 555.0 632.0 565.8 450.4
Pay ratio 17 18 19 20 25
Company performance
Revenue (EUR million) 301.5 518.6 519.3 464.0 396.4
Normalized EBITDA (EUR million) 37 53.1 57.4 55.8 44.6
Normalized EBITDA margin 12.3% 10.2% 11.1% 12.0% 11.3%
1
Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measures, refer to reconciliation of
non-IFRS information, starting on page 230.
Supervisory Board remuneration comparative
2024 2023 2022 2021
2020 (excl. fee
reduction)
Base fee
Chairman Supervisory Board EUR 59,000 EUR 59,000 EUR 59,000 EUR 45,000 EUR 45,000
Member Supervisory Board EUR 41,800 EUR 41,800 EUR 41,800 EUR 35,000 EUR 35,000
Committee fee
Chair Committee EUR 7,200 EUR 7,200 EUR 7,200 EUR 6,000 EUR 6,000
Member Committee EUR 6,000 EUR 6,000 EUR 6,000 EUR 5,000 EUR 5,000
Total Supervisory Board remuneration EUR 210,800 EUR 210,800 EUR 210,800 EUR 172,000 EUR 172,000
REMUNERATION REPORT
SHARE AND SHAREHOLDER INFORMATION
Movements in the number of outstanding shares
Shares entitled
to dividend
Shares owned
by Kendrion
Total number of
issued shares
At 1 January 2024 15,276,014 - 15,276,014
Issued shares (share dividend) 211,787 211,787
Issued registered shares (share plan) 12,256 - 12,256
At 31 December 2024
15,500,057 - 15,500,057
Other information
EUR, unless otherwise stated 2024 2023 2022
Number of shares x 1,000 at 31 December 15,500 15,276 15,115
Market capitalization at 31 December (EUR million) 161.2 184.5 234.3
Highest share price in the financial year 14.50 19.60 22.40
Lowest share price in the financial year 10.08 10.82 13.02
Share price on 31 December 10.40 12.08 15.50
Average daily ordinary share volume 22,730 15,260 7,022
Result per share (0.29) 0.65 (3.09)
Normalized net profit before amortization per share
1
0.76 0.91 1.44
Major shareholders as at 31 December 2024
2
Interest in % Date of report
Teslin Participaties Coöperatief U.A. 21.30 At 23 March 2023
Kempen Capital Management N.V. 15.33 At 11 April 2023
Cross Options Beheer B.V. 5.33 At 20 December 2023
Add Value Fund NV 3.22 At 13 July 2022
T.L. Kuo 3.17 At 21 June 2024
Midlin N.V. 3.08 At 11 December 2020
Total
51.43
1
Non-IFRS financial measure. For the definition and reconciliation of
the most directly comparable IFRS measures, refer to reconciliation
of non-IFRS information, starting on page 230.
2
On the basis of the information in the register of the AFM and listed
on the website at www.afm.nl.
Share capital
The authorized share capital of Kendrion N.V. as at
31 December 2024 amounts to EUR 80,000,000 and is divided
into 40,000,000 ordinary shares with a nominal value of
EUR 2.00 each. At year-end 2024, the total number of or-dinary
shares issued was 15,500,057. There is one class of ordinary
shares and no depositary receipts for shares have been issued.
Kendrion’s ordinary shares are listed on NYSE Euronext
Amsterdam Small Cap Index (AScX).
from 1 January 2024 to 31 December 2024
Kendrion N.V. share
AEX
ASCX
AMX
Treasury shares
As at 31 December 2024, Kendrion N.V. does not hold any
shares in its own capital.
Movements in the share price
131
Annual Integrated Report 2023
Dividend policy
Kendrion endeavours to realize an attractive return for
shareholders supported by a suitable dividend policy. In view of
safeguarding a healthy financial position, consideration is also
given to the amount of profit to be retained to support the
company’s medium and long-term strategic plans and to
maintaining a solvency ratio of at least 35%. Kendrion strives to
distribute dividends representing at least 50% of its normalized
net profit before amorti-zation.
In principle, Kendrion offers shareholders an opportunity to opt
for dividends in cash or in the form of ordinary shares in
Kendrion N.V.’s capital.
SHARE AND SHAREHOLDER INFORMATION
Supervision Act (Wet op het Financieel Toezicht), to disclose
such a holding to the Dutch Authority for the Financial Markets
(AFM). The disclosure is recorded in the register of the AFM and
listed on the website at www.afm.nl/en.
Participation
Kendrion maintains a share-based incentive plan for its senior
management and certain key employees.
Effective as of 2019, members of the Management Team
became eligible for a grant of conditional performance shares.
In 2021, participation in this share-based incentive program
was extended to selected members of the Kendrion Leadership
Team, with their participation limited to that year only.
The conditional performance shares granted will vest upon
achievement of performance measured over a three-year
period. The actual number of shares that will be allocated upon
expiry of the three-year vesting period is subject to the
realization of predefined performance criteria. Under the 2021
long-term incentive plan for the Management Team and
Leadership team (i.e. performance period 2021 through 2023),
40,433 conditional performance shares were granted. Of these
conditional performance shares granted to the Management
Team and the Leadership team, a total of 6,301 shares have
vested in 2024.
In 2024, conditional performance shares have been granted to
the members of the Executive Board pursuant to the Executive
Board long-term incentive plan. More information about
(conditional performance) shares granted to the members of
the Executive Board is set out on page 125. A comprehensive
description of the long-term in-centive plan is included in the
‘Remuneration Report’ section on pages 127 and further of this
report.
Kendrion will propose a dividend of EUR 0.45 per share,
representing a payment of dividend of 59% of normalized net
profit before amortization for 2024 at the Annual General
Meeting of Shareholders on 14 April 2025. The total amount of
dividend is EUR 7.0 million. It will be proposed that payment of
the dividend will be made in cash, or at the option of
shareholders, in the form of ordinary shares charged to the
share premium reserve with any remain-ing fraction being
settled in cash.
Major shareholders
Any person holding or acquiring an interest of 3% or more in a
Dutch publicly listed company is bound, based on the Financial
132
Annual Integrated Report 2023
SHARE AND SHAREHOLDER INFORMATION
Investor relations
Kendrion attaches great importance to appropriate
communications with financial stakeholders such as inves-tors,
debt capital providers and analysts, providing them with good
insights into recent developments. Transparency is intended to
lead to healthy pricing, and to support liquidity.
Regulations to prevent insider trading
Kendrion has regulations covering securities transactions by
members of the Executive Board, members of the Supervisory
Board, members of the Management Team and other
designated employees. The Insider Trading Code is published
on the corporate website at www.kendrion.com.
The Insider Trading Code is intended to ensure the avoidance
of insider trading or the appearance thereof, and any mixing of
business and private interests.
Analysts
The following stock exchange analysts actively monitor the Kendrion share:
ABN AMRO Oddo BHF Bank Martijn den Drijver
Degroof Petercam Frank Claassen
ING Bank Tijs Hollestelle
The Idea-Driven Equities Analyses Company Maarten Verbeek
Kepler Cheuvreux Tim Ehlers
Financial calendar
Friday, 28 February 2025 Publication annual results 2024
Monday, 17 March 2025 Record date General Meeting of Shareholders
Monday,14 April 2025 Annual General Meeting of Shareholders
Wednesday, 16 April 2025 Ex-dividend date
Thursday, 17 April 2025 Dividend record date
Tuesday, 22 April - Tuesday, 6 May 2025, 5.45pm Dividend election period (stock and/or cash)
Wednesday, 7 May 2025 Determination stock dividend exchange ratio
Friday, 9 May 2025 Cash dividend made payable and delivery stock dividend
Tuesday, 13 May 2025 Publication first quarter results 2025
Wednesday, 27 August 2025 Publication half-year results 2025
Tuesday, 11 November 2025 Publication third quarter results 2025
133
Annual Integrated Report 2023
FINANCIAL STATEMENTS
Annual Integrated Report 2024
134
FINANCIAL STATEMENTS
134
FINANCIAL STATEMENTS - CONTENTS
135 Consolidated statement of financial position
as at 31 December
136 Consolidated statement of profit and loss and
other comprehensive income
137 Consolidated statement of changes in equity
139 Consolidated statement of cash flows
140 Notes to the consolidated financial statements
163 Property, plant and equipment
166 Intangible assets
169 Other investments, including derivatives
170 Deferred tax assets and liabilities
172 Contract costs
172 Inventories
173 Trade and other receivables
173 Cash and cash equivalents
174 Assets classified as held for sale and discontinued
operations
175 Capital and reserves
177 Earnings per share
178 Loans and borrowings
181 Employee benefits
185 Provisions
185 Contract liabilities
186 Trade and other payables
186 Financial instruments
195 Leases
195 Capital commitments
195 Contingent assets and liabilities
196 Operating segments
198 Staff costs
198 Other operating expenses
199 Net finance costs
199 Income tax
199 Reconciliation of effective tax rate
200 Related parties
202 Other notes
202 Post-balance sheet events
203 Company balance sheet at 31 December
204 Company income statement
205 Notes to the company financial statements
205 General
205 Principles of valuation of assets and liabilities
and determination of results
205 Financial fixed assets
205 Receivables
206 Equity
207 Current liabilities
207 Financial instruments
208 Other income
208 Staff costs
208 Profit appropriation
208 Commitments not appearing on the balance sheet
209 Post-balance sheet events
209 Fees to the auditor
209 Remuneration of and share ownership
by the Executive Board and Supervisory Board
FINANCIAL STATEMENTS
Annual Integrated Report 2024
135
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER
Note | EUR million | 2024 | 2023 | Note | EUR million | 2024 | 2023 | |
| Assets | Equity and liabilities | |||||||
| Non-current assets | 10, 11 | Equity | ||||||
1 | Property, plant and equipment | Share capital | ||||||
2 | Intangible assets | Share premium | ||||||
3 | Other investments, including | Reserves | ||||||
derivatives | Retained earnings | ( | ||||||
4 | Deferred tax assets | Total equity 1 | ||||||
5 | Contract costs | |||||||
| Total non-current assets | Liabilities | |||||||
12 | Loans and borrowings | |||||||
| Current assets | 13 | Employee benefits | ||||||
6 | Inventories | 4 | Deferred tax liabilities | |||||
Current tax assets | 14 | Provisions | ||||||
7 | Trade and other receivables | Total non-current liabilities | ||||||
8 | Cash and cash equivalents | |||||||
9 | Assets classified as held for sale | 8 | Bank overdraft | |||||
| Total current assets | 12 | Loans and borrowings | ||||||
14 | Provisions | |||||||
Current tax liabilities | ||||||||
15 | Contract liabilities | |||||||
16 | Trade and other payables | |||||||
| Total current liabilities | ||||||||
| Total liabilities | ||||||||
| Total assets | Total equity and liabilities | |||||||
| 1 |
Equity is attributable to owners of the company as non-controlling interests are not applicable.
FINANCIAL STATEMENTS
Annual Integrated Report 2024
136
1
This item will never be reclassified to profit or loss.
2
These items may be reclassified to profit or loss.
3
All profits are attributable to owners of the company as non-controlling interests are not applicable.
4
2023 numbers were restated to present the continuing operations only in accordance with IFRS 5.
Reference is made to note 9 for more details on results from discontinued operations.
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME
| 4 | |||
Note | EUR million | 2024 | 2023 |
| Other comprehensive income | |||
13 | Remeasurements of defined benefit plans 1 | ( | |
10 | Foreign currency translation differences for | ( | ( |
foreign operations 2 | |||
10 | Net change in fair value of cash flow hedges, | ( | ( |
net of income tax 2 | |||
| Other comprehensive income for the period, | |||
| net of income tax | ( | ( | |
Total comprehensive income for the period 3 | ( |
11 | Basic earnings per share (EUR), | ||
based on weighted average | ( | ||
11 | Basic earnings per share (EUR), | ||
based on weighted average (diluted) | ( | ||
| Earnings per share for continuing operations | |||
| Basic earnings per share (EUR) from continuing | |||
operations, based on weighted average | |||
| Basic earnings per share (EUR) from continuing | |||
operations, based on weighted average (diluted) |
| 4 | |||
Note | EUR million | 2024 | 2023 |
21 | Revenue | ||
Other income | |||
| Total revenue and other income | |||
| Changes in inventories of finished goods and work | |||
in progress | ( | ||
Raw materials and subcontracted work | |||
22 | Staff costs | ||
1, 2 | Depreciation and amortization | ||
1, 2 | Impairments of fixed assets | ||
23 | Other operating expenses | ||
| Result before net finance costs | |||
24 | Finance income | ||
24 | Finance expense | ( | ( |
Share profit or loss of an associate | ( | ||
| Profit before income tax | |||
25, 26 | Income tax expense | ( | ( |
| Profit for the period continuing operations | |||
9 | Loss after tax from discontinued operations | ( | ( |
| (Loss)/Profit for the period | ( |
FINANCIAL STATEMENTS
Annual Integrated Report 2024
137
| Share | Share | Translation | Hedge | Reserve for | Other | Retained | Total | ||
| Note | EUR million | capital | premium | reserve | reserve | own shares | reserves | earnings | equity |
Balance as at 1 January 2023 | ( | ( | |||||||
| Total comprehensive income for the period | |||||||||
Profit for the period | |||||||||
| Other comprehensive income | |||||||||
13 | Remeasurements of defined benefit plans | ||||||||
10 | Foreign currency translation differences | ( | ( | ||||||
| for foreign operations | |||||||||
10 | Net change in fair value of cash flow hedges, | ||||||||
net of income tax | ( | ( | |||||||
| Other comprehensive income for the period, | |||||||||
| net of income tax | | ( | ( | | ( | ||||
| Total comprehensive income for the period | ( | ( | |||||||
| Transactions with owners, recorded | |||||||||
| directly in equity | |||||||||
10 | Issue of ordinary shares | ( | |||||||
10 | Treasury shares issued | ( | |||||||
Share–based payment transactions | ( | ||||||||
10 | Dividends to equity holders | ( | ( | ( | |||||
10 | Appropriation of retained earnings | ( | |||||||
| Balance as at 31 December 2023 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FINANCIAL STATEMENTS
Annual Integrated Report 2024
138
| Share | Share | Translation | Hedge | Reserve for | Other | Retained | Total | ||
| Note | EUR million | capital | premium | reserve | reserve | own shares | reserves | earnings | equity |
Balance as at 1 January 2024 | |||||||||
| Total comprehensive income for the period | |||||||||
Loss for the period | ( | ( | |||||||
| Other comprehensive income | |||||||||
13 | Remeasurements of defined benefit plans | ( | ( | ||||||
10 | Foreign currency translation differences | ( | ( | ||||||
| for foreign operations | |||||||||
10 | Net change in fair value of cash flow hedges, | ||||||||
net of income tax | ( | ( | |||||||
| Other comprehensive income for the period, | ( | ( | ( | ( | |||||
| net of income tax | |||||||||
| Total comprehensive income for the period | ( | ( | ( | ( | ( | ||||
| Transactions with owners, recorded | |||||||||
| directly in equity | |||||||||
10 | Issue of ordinary shares | ( | |||||||
Share-based payment transactions | ( | ( | |||||||
10 | Dividends to equity holders | ( | ( | ( | |||||
10 | Appropriation of retained earnings | ( | |||||||
| Balance as at 31 December 2024 | ( | ( |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FINANCIAL STATEMENTS
Annual Integrated Report 2024
139
Note | EUR million | 2024 | 2023 | Note | EUR million | 2024 | 2023 |
| Cash flows from operating activities | Cash flows from investing activities | ||||||
(Loss) / profit for the period | ( | Sale of subsidiaries, net of cash 2 | |||||
| Adjustments for: | 1 | Purchase of property, plant and equipment | ( | ( | |||
24 | Net finance costs | 1 | Disposal of property, plant and equipment | ||||
Share profit or loss of an associate | 2 | Purchase of intangible fixed assets | ( | ( | |||
Result on sale of subsidiaries before tax, non cash | ( | 2 | Disposal of intangible fixed assets | ||||
25 | Income tax expense | 3 | Investments in other investments | ( | ( | ||
1, 2 | Depreciation of property, plant and equipment and | Net cash from investing activities | ( | ||||
software | |||||||
2 | Amortization of other intangible assets | Cash flows from financing activities | |||||
| 1, 2 | Impairments of fixed assets | 12 | Payment of lease liabilities | ( | ( | ||
Share-based payments | ( | 12 | Repayments of borrowings (non- current) | ( | ( | ||
| Cash flows used in operations before changes | 12 | Proceeds from borrowings (current) | |||||
| in working capital | 12 | Repayments of borrowings (current) | ( | ||||
10 | Dividends paid | ( | ( | ||||
Change in trade and other receivables | ( | Net cash from financing activities | ( | ( | |||
Change in inventories | ( | ||||||
Change in trade and other payables | Change in cash and cash equivalents | ( | ( | ||||
Change in provisions | ( | ||||||
Change in contract liabilities | ( | ( | 8 | Cash and cash equivalents as at 1 January | |||
| Cash flows used in operations | Effect of exchange rate fluctuations on cash held | ( | |||||
8 | Cash and cash equivalents as at 31 December | ||||||
Interest paid | ( | ( | |||||
Interest received | |||||||
Tax paid | ( | ( | |||||
| Net cash flows from operating activities |
CONSOLIDATED STATEMENT OF CASH FLOWS
1
1
The statement of cash flows includes the cash flows of discontinued operations. The notes of the
Consolidated financial statements referred to include information excluding discontinued operations.
The total net cash flows from discontinued operations have been disclosed in note 9.
2
Refer to note 9 Assets held for sale and discontinued operations.
FINANCIAL STATEMENTS
Annual Integrated Report 2024
140
Reporting entity
Basis of preparation
The financial statements were authorized for issue by the Executive Board on 28 February 2025.
(a)
(b)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
Annual Integrated Report 2024
141
In preparing these consolidated financial statements, the Executive Board has made judgements and estimates that affect the application of the Group’s
(a)
(i)
FINANCIAL STATEMENTS
Annual Integrated Report 2024
142
(ii)
(iii)
FINANCIAL STATEMENTS
Annual Integrated Report 2024
143
(b)
(i)
(ii)
(c)
(i)
(ii)
FINANCIAL STATEMENTS
Annual Integrated Report 2024
144
FINANCIAL STATEMENTS
Annual Integrated Report 2024
145
(iii)
(iv)
(v)
(d)
(i)
FINANCIAL STATEMENTS
Annual Integrated Report 2024
146
(ii)
(iii)
(iv)
(v)
(e)
FINANCIAL STATEMENTS
Annual Integrated Report 2024
147
FINANCIAL STATEMENTS
Annual Integrated Report 2024
148
FINANCIAL STATEMENTS
Annual Integrated Report 2024
149
FINANCIAL STATEMENTS
Annual Integrated Report 2024
150
(f)
(g)
(i)
(ii)
FINANCIAL STATEMENTS
Annual Integrated Report 2024
151
(iii)
(iv)
(h)
(i)
(ii)
FINANCIAL STATEMENTS
Annual Integrated Report 2024
152
(iii)
(i)
(i)
(ii)
FINANCIAL STATEMENTS
Annual Integrated Report 2024
153
(iii)
(iv)
(v)
(vi)
(j)
FINANCIAL STATEMENTS
Annual Integrated Report 2024
154
(k)
(l)
FINANCIAL STATEMENTS
Annual Integrated Report 2024
155
FINANCIAL STATEMENTS
Annual Integrated Report 2024
156
(ii)
(n)
FINANCIAL STATEMENTS
Annual Integrated Report 2024
157
(o)
(p)
(q)
FINANCIAL STATEMENTS
Annual Integrated Report 2024
158
(r)
(i)
(ii)
(iii)
(iv)
FINANCIAL STATEMENTS
Annual Integrated Report 2024
159
(v)
(vi)
(vii)
(viii)
(ix)
(x)
(s)
FINANCIAL STATEMENTS
Annual Integrated Report 2024
160
(i)
(ii)
(iii)
(iv)
FINANCIAL STATEMENTS
Annual Integrated Report 2024
161
(v)
(vi)
(vii)
(viii)
FINANCIAL STATEMENTS
Annual Integrated Report 2024
162
(ix)
(t)
FINANCIAL STATEMENTS
Annual Integrated Report 2024
163
| Property, plant and equipment | ||
EUR million | 2024 | 2023 |
Property, plant and equipment owned | 89.0 | 122.0 |
Property, plant and equipment right-of-use assets | 7.0 | 12.5 |
| Total | 96.0 | 134.5 |
| Property, plant and equipment owned | Land and | Plant and | Other fixed | Under | |
| EUR million | buildings | equipment | assets | construction | Total |
| Balance as at 1 January 2023 | |||||
Costs | 68.0 | 172.7 | 68.9 | 36.5 | 346.1 |
Accumulated depreciation and impairment losses | (37.4) | (130.9) | (55.1) | (4.4) | (227.8) |
| Carrying amount as at 1 January 2023 | 30.6 | 41.8 | 13.8 | 32.1 | 118.3 |
Purchases | 6.8 | 6.1 | 4.4 | 5.6 | 22.9 |
Disposals | (0.1) | (0.7) | (0.3) | (0.0) | (1.1) |
Transfer | 21.1 | 3.8 | 1.7 | (24.6) | 2.0 |
Currency translation differences | (0.1) | (0.3) | (0.1) | (1.6) | (2.1) |
Depreciation for the year | (2.5) | (10.7) | (4.7) | – | (17.9) |
Impairments | (0.0) | (0.1) | (0.0) | – | (0.1) |
| Carrying amount as at 31 December 2023 | 55.8 | 39.9 | 14.8 | 11.5 | 122.0 |
Costs | 95.7 | 181.6 | 74.6 | 15.9 | 367.8 |
Accumulated depreciation and impairment losses | (39.9) | (141.7) | (59.8) | (4.4) | (245.8) |
| Carrying amount as at 31 December 2023 | 55.8 | 39.9 | 14.8 | 11.5 | 122.0 |
1
FINANCIAL STATEMENTS
Annual Integrated Report 2024
164
| Property, plant and equipment owned | Land and | Plant and | Other fixed | Under | |
| EUR million | buildings | equipment | assets | construction | Total |
| Balance as at 1 January 2024 | |||||
Costs | 95.7 | 181.6 | 74.6 | 15.9 | 367.8 |
Accumulated depreciation and impairment losses | (39.9) | (141.7) | (59.8) | (4.4) | (245.8) |
| Carrying amount as at 1 January 2024 | 55.8 | 39.9 | 14.8 | 11.5 | 122.0 |
Purchases | 0.3 | 2.0 | 2.6 | 4.8 | 9.7 |
Disposals | (0.0) | (0.0) | (0.0) | (0.0) | (0.0) |
Transfers | 0.0 | 6.0 | 0.7 | (6.7) | – |
Currency translation differences | 0.9 | 0.2 | 0.1 | 0.2 | 1.4 |
Divestments cost value 1 | (8.7) | (129.9) | (20.5) | (0.9) | (160.0) |
Depreciation for the year | (3.1) | (6.6) | (3.6) | (0.1) | (13.4) |
Impairments | – | – | (0.0) | (0.1) | (0.1) |
Divestments accumulated amortization and impairment losses 1 | 0.7 | 110.4 | 18.3 | 0.0 | 129.4 |
| Carrying amount as at 31 December 2024 | 45.9 | 22.0 | 12.4 | 8.7 | 89.0 |
Costs | 88.2 | 59.9 | 57.5 | 13.3 | 218.9 |
Accumulated depreciation and impairment losses | (42.3) | (37.9) | (45.1) | (4.6) | (129.9) |
| Carrying amount as at 31 December 2024 | 45.9 | 22.0 | 12.4 | 8.7 | 89.0 |
| Right-of-use assets | Land and | Plant and | Other fixed | Under | |
| EUR million | buildings | equipment | assets | construction | Total |
| Balance as at 1 January 2023 | |||||
Costs | 23.6 | 0.2 | 4.4 | – | 28.2 |
Accumulated depreciation and impairment losses | (11.1) | (0.2) | (3.6) | – | (14.9) |
| Carrying amount as at 1 January 2023 | 12.5 | 0.0 | 0.8 | – | 13.3 |
Purchases | 3.3 | – | 0.7 | – | 4.0 |
Disposals | (0.1) | – | (0.0) | – | (0.1) |
Transfer | (2.0) | − | − | − | (2.0) |
Currency translation differences | (0.1) | (0.0) | (0.0) | – | (0.1) |
Depreciation for the year | (2.1) | (0.0) | (0.5) | – | (2.6) |
| Carrying amount as at 31 December 2023 | 11.5 | 0.0 | 1.0 | – | 12.5 |
1
FINANCIAL STATEMENTS
Annual Integrated Report 2024
165
| Right-of-use assets | Land and | Plant and | Other fixed | Under | |
| EUR million | buildings | equipment | assets | construction | Total |
| Balance as at 1 January 2024 | |||||
Costs | 24.7 | 0.2 | 5.1 | – | 30.0 |
Accumulated depreciation and impairment losses | (13.2) | (0.2) | (4.1) | – | (17.5) |
| Carrying amount as at 1 January 2024 | 11.5 | 0.0 | 1.0 | – | 12.5 |
Purchases | 0.1 | – | 0.3 | – | 0.4 |
Disposals | (0.5) | – | (0.0) | – | (0.5) |
Currency translation differences | 0.0 | – | 0.0 | – | 0.0 |
Divestments cost value 1 | (15.2) | (0.2) | (4.6) | – | (20.0) |
Depreciation for the year | (1.7) | – | (0.3) | – | (2.0) |
Divestments accumulated amortization and impairment losses 1 | 12.3 | 0.2 | 4.1 | – | 16.6 |
| Carrying amount as at 31 December 2024 | 6.5 | – | 0.5 | – | 7.0 |
Costs | 9.1 | – | 0.8 | – | 9.9 |
Accumulated depreciation and impairment losses | (2.6) | – | (0.3) | – | (2.9) |
| Carrying amount as at 31 December 2024 | 6.5 | – | 0.5 | – | 7.0 |
FINANCIAL STATEMENTS
Annual Integrated Report 2024
166
| Development | ||||||
EUR million | Goodwill | costs | Software | Concessions | Other | Total |
| Balance as at 1 January 2023 | ||||||
Costs | 135.4 | 13.5 | 32.9 | 1.1 | 75.4 | 258.3 |
Accumulated amortization and impairment losses | (54.7) | (5.7) | (26.4) | (0.1) | (44.9) | (131.8) |
| Carrying amount as at 1 January 2023 | 80.7 | 7.8 | 6.5 | 1.0 | 30.5 | 126.5 |
Purchases | − | 3.3 | 3.1 | − | − | 6.4 |
Disposals | − | (0.1) | (0.0) | − | − | (0.1) |
Currency translation differences | (0.2) | (0.4) | (0.0) | (0.1) | − | (0.7) |
Amortisation for the year | − | (1.3) | (1.8) | (0.0) | (3.2) | (6.3) |
Impairments | − | − | − | − | − | − |
| Carrying amount as at 31 December 2023 | 80.5 | 9.3 | 7.8 | 0.9 | 27.3 | 125.8 |
Costs | 135.2 | 16.3 | 36.0 | 1.0 | 75.4 | 263.9 |
Accumulated amortization and impairment losses | (54.7) | (7.0) | (28.2) | (0.1) | (48.1) | (138.1) |
| Carrying amount as at 31 December 2023 | 80.5 | 9.3 | 7.8 | 0.9 | 27.3 | 125.8 |
| Balance as at 1 January 2024 | ||||||
Costs | 135.2 | 16.3 | 36.0 | 1.0 | 75.4 | 263.9 |
Accumulated amortization and impairment losses | (54.7) | (7.0) | (28.2) | (0.1) | (48.1) | (138.1) |
| Carrying amount as at 1 January 2024 | 80.5 | 9.3 | 7.8 | 0.9 | 27.3 | 125.8 |
Purchases | – | 0.7 | 3.4 | – | – | 4.1 |
Disposals | – | – | (0.2) | – | – | (0.2) |
Currency translation differences | 0.4 | 0.0 | 0.0 | 0.0 | – | 0.4 |
Divestments cost value 1 | (59.1) | (5.7) | (2.4) | – | (28.9) | (96.1) |
Amortisation for the year | – | (1.1) | (1.7) | (0.0) | (3.2) | (6.0) |
Impairment | – | (3.4) | (2.6) | – | – | (6.0) |
Divestments accumulated amortization and impairment losses 1 | 54.7 | 4.9 | 2.3 | – | 28.9 | 90.8 |
| Carrying amount as at 31 December 2024 | 76.5 | 4.7 | 6.6 | 0.9 | 24.1 | 112.8 |
Costs | 76.5 | 11.3 | 36.8 | 1.0 | 46.5 | 172.1 |
Accumulated amortization and impairment losses | – | (6.6) | (30.2) | (0.1) | (22.4) | (59.3) |
| Carrying amount as at 31 December 2024 | 76.5 | 4.7 | 6.6 | 0.9 | 24.1 | 112.8 |
2
FINANCIAL STATEMENTS
Annual Integrated Report 2024
167
Goodwill EUR million | 2024 | 2023 |
Industrial Actuators and Controls (IAC) | 39.8 | 39.4 |
Industrial Brakes (IB) | 33.8 | 33.8 |
Automotive E (E) | − | 7.3 |
Other business (OB) | 2.9 | − |
76.5 | 80.5 |
FINANCIAL STATEMENTS
Annual Integrated Report 2024
168
Key assumptions | Pre-tax discount rate | Terminal value growth rate | ||
2024 | 2023 | 2024 | 2023 | |
Industrial Actuators and Controls (IAC) | 12.3% | 13.4% | 1.5% | 1.5% |
Industrial Brakes (IB) | 12.3% | 13.4% | 1.5% | 1.5% |
Automotive E (E) | – | 12.9% | – | 2.0% |
Other business (OB) | 11.0% | − | 1.0% | − |
FINANCIAL STATEMENTS
Annual Integrated Report 2024
169
EUR million | 2024 | 2023 |
Equity-accounted investee | 3.7 | 0.0 |
Other | 0.2 | 0.5 |
3.9 | 0.5 |
3
FINANCIAL STATEMENTS
Annual Integrated Report 2024
170
| Assets | Liabilities | Net | ||||
EUR million | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
Property, plant and equipment | 1.0 | 1.4 | 2.4 | 3.8 | (1.4) | (1.4) |
Intangible assets | 1.3 | 3.0 | 11.3 | 13.0 | (10.0) | (10.0) |
Inventories | 1.2 | 1.3 | 0.4 | 0.3 | 0.8 | 0.8 |
Employee benefits | 0.4 | 0.4 | 0.0 | 0.2 | 0.4 | 0.4 |
Provisions | 0.0 | 0.0 | 0.0 | 0.0 | (0.0) | 0.0 |
Other items | 2.5 | 4.4 | 0.6 | 1.7 | 1.9 | 1.9 |
Tax value of recognized loss carry-forwards | 15.0 | 9.6 | 0.0 | – | 15.0 | 15.0 |
| Deferred tax assets/liabilities | 21.4 | 20.1 | 14.7 | 19.0 | 6.7 | 6.7 |
4
FINANCIAL STATEMENTS
Annual Integrated Report 2024
171
| 2023 | ||||
| Recognized | ||||
| in other | ||||
| Recognized | comprehensive | At 31 | ||
Net, EUR million | At 1 January | in profit and loss | income | December |
Property, plant and equipment | (0.9) | (1.5) | – | (2.4) |
Intangible assets | (8.0) | (2.0) | – | (10.0) |
Inventories | 0.7 | 0.3 | – | 1.0 |
Employee benefits | 0.6 | (0.4) | (0.0) | 0.2 |
Provisions | 0.2 | (0.2) | – | 0.0 |
Other items | 2.2 | 0.1 | 0.4 | 2.7 |
Tax value of loss carry-forwards | 7.4 | 2.2 | – | 9.6 |
2.2 | (1.5) | 0.4 | 1.1 |
FINANCIAL STATEMENTS
Annual Integrated Report 2024
172
| 2024 | |||||
| Recognized | |||||
| in other | |||||
| Recognized | comprehensive | At 31 | |||
| 1 | |||||
Net, EUR million | At 1 January | in profit and loss | income | Divested | December |
Property, plant and equipment | (2.4) | (0.4) | – | 1.4 | (1,4) |
Intangible assets | (10.0) | (0.4) | – | 0.4 | (10.0) |
Inventories | 1.0 | (0.1) | – | (0.1) | 0.8 |
Employee benefits | 0.2 | 0.1 | 0.1 | 0.0 | 0.4 |
Provisions | (0.0) | (0.0) | – | 0.0 | (0.0) |
Other items | 2.7 | 1.0 | (0.3) | (1.5) | 1.9 |
Tax value of loss carry-forwards | 9.6 | 5.4 | – | – | 15.0 |
1.1 | 5.6 | (0.2) | 0.2 | 6.7 |
| Contract costs | ||
EUR million | 2024 | 2023 |
Balance as at 1 January | 0.6 | 0.3 |
Costs to obtain a contract with customers | – | 0.4 |
Divestments 1 | (0.6) | – |
Amortization | – | (0.1) |
| Balance as at 31 December | – | 0.6 |
5
| Inventories | ||
EUR million | 2024 | 2023 |
Raw materials, consumables, technical materials and packing materials | 37.0 | 57.2 |
Work in progress | 9.2 | 16.2 |
Finished goods | 10.6 | 11.4 |
Goods for resale | 1.7 | 2.6 |
58.5 | 87.4 |
The value of inventory recorded as an expense in 2024 amounts to EUR 234.7 million (2023: EUR 263.1 million). The inventories are presented after
accounting for a provision of EUR 6.2 million (2023: EUR 8.1 million) for obsolescence. In 2024, the release of the write-down to net realisable value of
the inventories in earlier years was EUR 0.8 million (2023: EUR 0.5 million release). The write-down and reversals are included in Raw material and
subcontracted work. The decrease is mainly attributable to the sale of automotive business, refer to note 9.
6
FINANCIAL STATEMENTS
Annual Integrated Report 2024
173
| Trade and other receivables | ||
EUR million | 2024 | 2023 |
Trade receivables | 40.3 | 54.4 |
Other taxes and social security | 1.9 | 2.4 |
Other receivables | 15.0 | 6.2 |
Derivatives used for hedging | 0.2 | 1.0 |
Prepayments | 1.2 | 1.2 |
58.6 | 65.2 |
Other receivables included a receivable from Solero Technologies LLC relating to the sale of the automotive business, no provision has been recorded
for this receivable. Refer to note 9 and note 20. The decrease of trade receivables is mainly attributable to the sale of automotive business.
The credit and currency risks associated with trade and other receivables are disclosed in note 17, and in the financial risk management paragraph of
note s. The provision for doubtful debts amounts to EUR 0.3 million (2023: EUR 0.2 million). The receivables are mainly held according to the ‘held-to-
collect’ business model. At the end of 2024, an amount of EUR 0.0 million (2023: EUR 6.8 million) was sold to a factoring company and was
derecognized.
7
| Cash and cash equivalents | ||
EUR million | 2024 | 2023 |
Cash and cash equivalents | 8.5 | 20.6 |
Bank overdrafts | (1.7) | (7.1) |
| Cash and cash equivalents in the statement of cash flows | 6.8 | 13.5 |
The cash and cash equivalents include EUR 0.2 million (2023: EUR 0.5 million) of cash that is held in countries where the Group faces cross-border
foreign exchange controls and/or other legal restrictions that inhibit the Groups ability to make these balances available for general use by the Group.
The other bank balances are freely available. The interest rate risk for the Group and a sensitivity analysis for financial assets and liabilities are disclosed
in notes 17 and accounting policy’s.
8
FINANCIAL STATEMENTS
Annual Integrated Report 2024
174
EUR million | 2024 | 2023 |
Revenues | 156.9 | 209.5 |
Expenses | 159.7 | 207.9 |
| Result before remeasurements, finance costs and tax | (2.8) | 1.6 |
Remeasurement of assets to fair value less cost to sell | (4.9) | – |
Financial income and expenses | (2.2) | (3.8) |
Income tax | 3.3 | 0.3 |
| Loss before result on sale of Automotive business | (6.6) | (1.9) |
Result on the sale of the Automotive business after tax | (4.0) | – |
| Loss after tax from discontinued operations | (10.6) | (1.9) |
EUR million | 2024 | 2023 |
Cash flows from operating activities | (10.4) | 9.4 |
Cash flows from investing activities | (9.4) | (4.4) |
Cash flows from financing activities | 17.9 | (1.3) |
| Net cash flows from discontinued operations | (1.9) | 3.7 |
| The net cashflow from the sale of the automotive business amounted to EUR 52.5 million in 2024, net of cash amounting to EUR 9.8 million. Refer to note 7 for |
EUR million | 2024 | 2023 |
Basic earnings per share from discontinued operations (in Euro) | (0.68) | (0.12) |
Diluted earnings per share from discontinued operations (in Euro) | (0.68) | (0.12) |
9
FINANCIAL STATEMENTS
Annual Integrated Report 2024
175
| Capital and share premium | ||||||
Shares entitled to dividend | Shares owned by Kendrion | Total number of issued shares | ||||
2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |
As at 1 January | 15,276,014 | 15,026,305 | − | 88,316 | 15,276,014 | 15,114,621 |
Issued shares (share dividend) | 211,787 | 199,358 | − | (40,038) | 211,787 | 159,320 |
Issued shares (share plan) | 12,256 | 2,073 | − | – | 12,256 | 2,073 |
Granted shares | − | 48,278 | − | (48,278) | − | – |
| As at 31 December | 15,500,057 | 15,276,014 | − | – | 15,500,057 | 15,276,014 |
EUR million | 2024 | 2023 |
40,000,000 ordinary shares of EUR 2.00 | 80.0 | 80.0 |
| Issued share capital | ||
Balance as at 1 January 2024: 15,276,014 ordinary shares (2023: 15,114,621) | 30.6 | 30.2 |
Balance as at 31 December 2024: 15,500,057 ordinary shares (2023: 15,276,014) | 31.0 | 30.6 |
| Share premium | ||
EUR million | 2024 | 2023 |
Balance as at 1 January | 37.3 | 38.4 |
Dividend payment | (2.7) | (3.8) |
Share premium on issued shares | 2.5 | 2.7 |
| Balance as at 31 December | 37.1 | 37.3 |
10
FINANCIAL STATEMENTS
Annual Integrated Report 2024
176
EUR million | 2024 | 2023 |
6.9 | 10.9 |
EUR million | 2024 | 2023 |
7.0 | 6.9 |
FINANCIAL STATEMENTS
Annual Integrated Report 2024
177
Earnings per share
Basic earnings per share
The calculation of the basic earnings per share as at 31 December 2024 is based on the result for the period of EUR -4.5 million (2023: EUR 9.9 million)
attributable to the holders of ordinary shares and the weighted average number of shares outstanding during the year 2024: 15,425,000
(2023: 15,197,000).
EUR million | 2024 | 2023 |
Net result attributable to ordinary shareholders | (4.5) | 9.9 |
| Weighted average number of ordinary shares | ||
In thousands of shares | 2024 | 2023 |
Issued ordinary shares at 1 January | 15,276 | 15,115 |
Effect of shares issued as share dividend | 212 | 159 |
Effect of shares issued as share plan | 12 | 2 |
| Ordinary shares outstanding at 31 December | 15,500 | 15,276 |
Weighted average number of ordinary shares entitled to dividend | 15,425 | 15,197 |
Basic earnings per share (EUR), based on ordinary shares outstanding at 31 December | (0.29) | 0.65 |
Basic earnings per share (EUR), based on weighted average | (0.29) | 0.65 |
Diluted earnings per share
The calculation of the diluted earnings per share as at 31 December 2024 is based on the result of EUR -4.5 million (2023: EUR 9.9 million) attributable
to the holders of ordinary shares and the weighted average numbers of shares during the year after adjustment for the effects of all dilutive potential
ordinary shares of 15,631,000 (2023: 15,384,000).
EUR million | 2024 | 2023 |
Net profit attributable to ordinary shareholders | (4.5) | 9.9 |
Effect of dilution | (0.0) | (0.0) |
| Net profit attributable to ordinary shareholders (diluted) | (4.5) | 9.9 |
| Weighted average number of ordinary shares (diluted) | ||
In thousands of shares | 2024 | 2023 |
Weighted average number of ordinary shares entitled to dividend | 15,425 | 15,197 |
Weighted average numbers of ordinary shares (diluted) | 15,631 | 15,384 |
Basic earnings per share (EUR), based on weighted average (diluted) | (0.29) | 0.64 |
11
FINANCIAL STATEMENTS
Annual Integrated Report 2024
178
EUR million | 2024 | 2023 |
| Non-current liabilities | ||
Bank syndicate loans | 13.1 | 62.0 |
Schuldschein loans | 72.2 | 72.2 |
Lease liabilities | 5.7 | 10.9 |
Other loans | 6.8 | 8.1 |
97.8 | 153.2 |
EUR million | 2024 | 2023 |
| Current liabilities | ||
Current portion lease liabilities | 2.2 | 2.6 |
Current portion loans | 10.2 | 2.7 |
12.4 | 5.3 |
| Bank syndicate | Schuldschein | Lease | |||
| EUR million | loans | loans | liabilities | Other loans | Total 2023 |
Carrying amount as at 1 January 2023 | 82.5 | 72.1 | 13.2 | 7.2 | 175.0 |
New liabilities | – | – | 3.3 | 6.7 | 10.0 |
Repayments | (20.6) | – | (3.2) | (3.1) | (26.9) |
Foreign currency translation differences for foreign operations | – | – | (0.1) | (0.0) | (0.1) |
Other movements | 0.1 | 0.1 | 0.3 | – | 0.5 |
| Carrying amount as at 31 December 2023 | 62.0 | 72.2 | 13.5 | 10.8 | 158.5 |
12
FINANCIAL STATEMENTS
Annual Integrated Report 2024
179
| Bank syndicate | Schuldschein | Lease | |||
| EUR million | loans | loans | liabilities | Other loans | Total 2024 |
Carrying amount as at 1 January 2024 | 62.0 | 72.2 | 13.5 | 10.8 | 158.5 |
New liabilities | – | – | 1.3 | 8.4 | 9.7 |
Repayments | (49.0) | – | (3.0) | (2.7) | (54.7) |
Foreign currency translation differences for foreign operations | – | – | 0.0 | 0.5 | 0.5 |
Divestments 1 | – | – | (3.8) | – | (3.8) |
Other movements | 0.1 | – | (0.1) | – | (0.0) |
| Carrying amount as at 31 December 2024 | 13.1 | 72.2 | 7.9 | 17.0 | 110.2 |
FINANCIAL STATEMENTS
Annual Integrated Report 2024
180
EUR million | 2024 | 2023 |
< 1 year | 2.2 | 2.6 |
1 - 5 years | 5.6 | 9.1 |
> 5 years | 0.1 | 1.8 |
7.9 | 13.5 |
FINANCIAL STATEMENTS
Annual Integrated Report 2024
181
| Employee benefits | ||
EUR million | 2024 | 2023 |
Present value of unfunded obligations | 5.0 | 4.8 |
Present value of funded obligations | 0.8 | 3.4 |
Fair value of plan assets | (0.2) | (0.8) |
| Recognized net liability for defined benefit obligations | 5.6 | 7.4 |
Liability for long-service leave and anniversaries | 2.3 | 2.4 |
| Total employee benefits | 7.9 | 9.8 |
Non current portion | 7.1 | 8.7 |
Current portion * | 0.8 | 1.1 |
*
The total employee benefit provision as of 31 December 2024 amounts to EUR 7.8 million. An amount of EUR 7.0 million is presented as non-current employee benefits
in the statement of financial position. The remainder of EUR 0.8 million is presented under trade and other payables.
13
FINANCIAL STATEMENTS
Annual Integrated Report 2024
182
Defined benefit obligation | Fair value of plan assets | Net defined benefit liability | ||||
EUR million | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
Balance as at 1 January | 8.2 | 9.2 | 0.8 | 0.8 | 7.4 | 8.4 |
| Included in statement | ||||||
| of comprehensive income | ||||||
Current service cost | – | 0.0 | – | – | 0 | 0.0 |
Past service cost | – | – | – | – | – | – |
Interest cost (income) | 0.2 | 0.3 | 0.0 | – | 0.2 | 0.3 |
0.2 | 0.3 | 0.0 | – | 0.2 | 0.3 | |
| Included in OCI | ||||||
| Remeasurement loss (gain): | ||||||
| - Actuarial loss (gain) arising from: | ||||||
- Demographic assumptions | 0.0 | 0.0 | 0.0 | – | 0 | – |
- Financial assumptions | 0.3 | (0.3) | – | – | 0.3 | (0.3) |
- Experience adjustment | 0.1 | (0.2) | – | – | 0.1 | (0.2) |
| - Return on plan assets excluding | ||||||
interest income | – | – | – | – | 0 | – |
Effect of movements in exchange rates | – | – | – | – | – | – |
0.4 | (0.5) | 0.0 | – | 0.4 | (0.5) | |
Other Contributions paid by the employer | – | – | – | – | – | – |
Divestments 1 | (2.6) | – | (0.6) | – | (2.0) | – |
Benefits paid | (0.4) | (0.8) | 0.0 | – | (0.4) | (0.8) |
(3.0) | (0.8) | (0.6) | – | (2.4) | (0.8) | |
| Balance as at 31 December | 5.8 | 8.2 | 0.2 | 0.8 | 5.6 | 7.4 |
FINANCIAL STATEMENTS
Annual Integrated Report 2024
183
The Group contributes to the following post-employment defined benefits plans in several countries, mainly in Germany. Below the characteristics
of the major plans are included.
■ A direct commitment in the form of capital has been agreed upon with the employees, who directly receive this commitment as an one-off payment
upon retirement. An alternative version is a plan where the employees receive monthly payments instead of an one-off payment. The plans are
reviewed on periodic basis;
■ The Defined-Benefit plan entitles a retired employee to receive a monthly pension payment. The amount of these payments is based on individual
contracts with the respective employee. The person has to be employed for a certain time. Each further year of employment the employee receives
an amount in addition to the contractual fixed amount.
The defined benefit plans are administered by multiple pension funds which are legally separated from the Group. The board of the pension fund is
required to act in the best interest of the plan participants and is responsible for setting certain policies (e.g. investment, contribution and indexation
policies) of the fund. The defined benefit plans expose the Group to actuarial risks, such as longevity risk, interest rate risk and market (investment) risk.
The expenses relating to the defined benefit pension arrangements are included in the following line items of the statement of comprehensive income:
| Expense recognized in the consolidated statement of comprehensive income regarding defined benefit arrangements | ||
EUR million | 2024 | 2023 |
Staff costs | 0.0 | 0.0 |
Net finance costs | 0.2 | 0.3 |
0.2 | 0.3 |
| Principal actuarial assumptions (expressed as weighted averages) | ||
2024 | 2023 | |
Discount rate as at 31 December | 3.3% | 4.1% |
Future salary increases | 1.9% | 1.3% |
Future pension increases | 2.2% | 2.1% |
| Composition plan assets | ||
EUR million | 2024 | 2023 |
Bonds | 0.2 | 0.8 |
Equity | 0.0 | 0.0 |
Real estate | 0.0 | 0.0 |
Government loans | 0.0 | 0.0 |
| Total | 0.2 | 0.8 |
FINANCIAL STATEMENTS
Annual Integrated Report 2024
184
Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have
affected the defined benefit obligation by the amounts shown below.
| Sensitivity analysis | Defined benefit obligation | |
EUR million | Increase | Decrease |
Discount rate (0.5 percent) | (0.2) | (0.3) |
Future salary growth (1.0 percent) | 0.3 | 0.2 |
Future pension (1.0 percent) | 0.3 | 3.1 |
Future mortality (1.0 percent) | 0.0 | 0.0 |
Although the analysis does not take account of the full distribution of cash flows expected under the plans, it does provide an approximation of the
sensitivity of the assumptions shown. The method for preparing the sensitivity analyses did not changed from prior year.
Assumptions regarding future longevity have been based on published statistics and mortality tables.
As at 31 December 2024, the weighted-average duration of the defined benefit obligation was 5.7 years (2023: 7.1 years). The expected payment for
2025 amounts to EUR 0.8 million (2024: EUR 1.1 million).
Liabilities arising from employee benefits
The pension plans included defined contribution plans as well as defined benefit plans. In the case of defined contribution plans, the contribution is
charged to the year to which it relates. With defined benefit plans, benefit obligations are calculated using the projected unit credit method. Calculations
are made by qualified actuaries. The pension liability shown in the statement of financial position represents the present value of the defined benefit
obligation at the financial position date minus the fair value of the plan assets at this date. The discount rate methodology for accounting long-term
employee benefits in accordance with IAS 19 is determined by the Executive Board. Significant judgement is required when setting the criteria for bonds
to be included in the population from which the yield curve is derived. The most significant criteria considered for the selection of bonds include the
issue size of the corporate bonds, quality of the bonds and the identification of outliers which are excluded. The discount rate used to calculate the
defined benefit obligation is based on the yield on corporate bonds issued in Euros.
Since the pension arrangements involve long-term obligations and uncertainties, it is necessary to make assumptions in order to estimate the amount
that the Group needs to invest to fund its pension obligations. External actuaries calculate the obligation for defined benefit plans partly on the basis
of information provided by the Executive Board, such as future pay rises, the return on plan assets, mortality tables and the probable extent to which
pension scheme members will leave the scheme because they have reached retirement age, become incapacitated or left the Group.
FINANCIAL STATEMENTS
Annual Integrated Report 2024
185
The greater part of the defined benefit obligation at year-end 2024 relates to post employment arrangements in Germany. The group companies
account individually for the pension schemes. The individual group company is fully liable for its benefit obligation. A portion for the German group
companies is reinsured. All pension arrangements accounted for as defined benefit obligations are not open for new participants (< 15% active
participants).
Liabilities arising from employee benefits also include liabilities relating to long-service, early retirement and service anniversaries of EUR 2.3 million
(2023: EUR 2.4 million) in Germany.
| Provisions | ||
EUR million | 2024 | 2023 |
Balance as at 1 January | 0.7 | 2.0 |
Provisions made during the period | 5.5 | 0.0 |
Provisions transferred/used during the period | (0.1) | (1.3) |
Provisions released during the period | (0.0) | – |
| Balance as at 31 December | 6.1 | 0.7 |
Non-current portion | 0.9 | 0.7 |
The provisions include a restructuring provision of EUR 4.3 million (2023: EUR 0.0 million).
14
| Contract liabilities | ||
EUR million | 2024 | 2023 |
Balance as at 1 January | 4.4 | 4.7 |
Consideration received | 0.2 | 0.2 |
Recognized as revenue in the period | (1.1) | (0.5) |
Divestments 1 | (3.3) | – |
| Balance as at 31 December | 0.2 | 4.4 |
15
FINANCIAL STATEMENTS
Annual Integrated Report 2024
186
Trade and other payables
EUR million | 2024 | 2023 |
Trade payables | 35.4 | 58.3 |
Other taxes and social security contributions | 2.8 | 2.3 |
Derivatives used for hedging | 0.5 | 0.3 |
Non-trade payables | 8.5 | 7.4 |
Accrued expenses | 11.5 | 16.2 |
58.7 | 84.5 |
16
EUR million | 2024 | 2023 |
Cash and cash equivalents | 8.5 | 20.6 |
Other long-term investments | 0.2 | 0.5 |
Current tax assets | 3.2 | 5.7 |
Trade and other receivables | 58.6 | 65.2 |
| Total | 70.5 | 92.0 |
| Aging analysis of the trade and other receivables | ||||
2024 | 2023 | |||
EUR million | Gross | Provision | Gross | Provision |
Within the term of payment | 52.2 | – | 47.8 | − |
0 – 30 days due | 4.1 | – | 6.6 | − |
31 – 60 days due | 0.8 | – | 2.2 | − |
> 60 days due | 1.8 | (0.3) | 2.3 | (0.2) |
| Total trade and other receivables | 58.9 | (0.3) | 58.8 | (0.2) |
17
FINANCIAL STATEMENTS
Annual Integrated Report 2024
187
31 December 2024 | 2024 | ||||||
| External | Internal | 12-month | Gross carrying | Loss | Net carrying | ||
| Note | credit rating | credit rating | or lifetime ECL | amount | allowance | amount | |
Trade receivables | 7 | N/A | Low risk 1 | Lifetime ECL | 40.6 | (0.3) | 40.3 |
| Contract costs | 5 | N/A | Low risk | Lifetime ECL | − | − | − |
| Equity-accounted investee | 3 | N/A | Low risk | Lifetime ECL | 3.7 | − | 3.7 |
| Other investments | 3 | N/A | Low risk | Lifetime ECL | 0.2 | − | 0.2 |
44.5 | (0.3) | 44.2 | |||||
31 December 2023 | 2023 | ||||||
| External | Internal | 12-month | Gross carrying | Loss | Net carrying | ||
| Note | credit rating | credit rating | or lifetime ECL | amount | allowance | amount | |
Trade receivables | 7 | N/A | Low risk 1 | Lifetime ECL | 54.6 | (0.2) | 54.4 |
| Contract costs | 5 | N/A | Low risk | Lifetime ECL | 0.6 | − | 0.6 |
| Equity-accounted investee | 3 | N/A | Low risk | Lifetime ECL | 0.0 | − | 0.0 |
| Other investments | 3 | N/A | Low risk | Lifetime ECL | 0.5 | − | 0.5 |
55.7 | (0.2) | 55.5 |
1
Amongst the trade receivables there are a number of items that are considered doubtful
FINANCIAL STATEMENTS
Annual Integrated Report 2024
188
| 31 December 2024 | Carrying | Contractual | |||||
| EUR million | amount | cash flows | 0 – 6 months | 6 – 12 months | 1 – 2 years | 2 – 5 years | › 5 years |
| Non-derivative financial liabilities | |||||||
Bank syndicate loans | (13.1) | (14.4) | (0.3) | (0.3) | (0.6) | (13.2) | – |
Schuldschein loans | (72.2) | (80.2) | (21.3) | (1.0) | (2.0) | (55.9) | – |
Lease liabilities | (7.9) | (9.1) | (1.1) | (1.1) | (2.0) | (4.2) | (0.7) |
Bank overdrafts | (1.7) | (1.7) | (1.7) | – | – | – | – |
Other loans and borrowings | (17.0) | (17.7) | (2.2) | (8.5) | (2.5) | (3.9) | (0.6) |
Trade and other payables | (58.9) | (58.9) | (58.9) | – | – | – | – |
Tax liabilities | (7.6) | (7.4) | (7.4) | – | – | – | – |
| Derivative financial assets / liabilities | |||||||
Interest rate swap contracts | 0.2 | (0.0) | 0.1 | (0.1) | (0.0) | 0.0 | – |
Forward exchange contracts | 0.0 | 0.0 | 0.0 | – | – | – | – |
| Total | (178.2) | (189.4) | (92.8) | (11.0) | (7.1) | (77.2) | (1.3) |
| 31 December 2023 | Carrying | Contractual | |||||
| EUR million | amount | cash flows | 0 – 6 months | 6 – 12 months | 1 – 2 years | 2 – 5 years | › 5 years |
| Non-derivative financial liabilities | |||||||
Bank syndicate loans | (62.0) | (69.5) | (1.6) | (1.6) | (3.2) | (63.1) | − |
Schuldschein loans | (72.2) | (82.5) | (1.8) | (1.8) | (23.0) | (55.9) | − |
Lease liabilities | (13.5) | (15.7) | (1.4) | (1.4) | (2.8) | (6.9) | (3.2) |
Bank overdrafts | (7.1) | (7.1) | (3.0) | (4.1) | − | − | − |
Other loans and borrowings | (10.8) | (12.1) | (1.6) | (1.0) | (1.5) | (5.5) | (2.5) |
Trade and other payables | (84.5) | (84.5) | (84.5) | − | − | − | − |
Tax liabilities | (7.4) | (7.4) | (7.4) | − | − | − | − |
| Derivative financial assets | |||||||
Interest rate swap contracts | 0.7 | 1.5 | 0.7 | 0.4 | 0.4 | 0.0 | − |
Forward exchange contracts | (0.2) | (0.2) | (0.1) | (0.1) | − | − | − |
| Total | (257.0) | (277.5) | (100.7) | (9.6) | (30.1) | (131.4) | (5.7) |
FINANCIAL STATEMENTS
Annual Integrated Report 2024
189
| 2024 | Carrying | Contractual | |||||
| EUR million | amount | cash flows | 0 – 6 months | 6 – 12 months | 1 – 2 years | 2 – 5 years | › 5 years |
| Interest rate swap contracts | |||||||
Assets | 0.2 | 0.1 | 0.1 | – | – | – | – |
Liabilities | (0.5) | (0.2) | (0.1) | (0.1) | (0.0) | – | – |
| Forward exchange contracts | |||||||
Assets | – | – | – | – | – | – | – |
Liabilities | – | 0.0 | 0.0 | – | – | – | – |
| Total | (0.3) | (0.1) | 0.0 | (0.1) | (0.0) | – | – |
| 2023 | Carrying | Contractual | |||||
| EUR million | amount | cash flows | 0 – 6 months | 6 – 12 months | 1 – 2 years | 2 – 5 years | › 5 years |
| Interest rate swap contracts | |||||||
Assets | 1.1 | 1.2 | 0.6 | 0.4 | 0.2 | 0.0 | − |
Liabilities | (0.4) | 0.3 | 0.1 | 0.1 | 0.1 | 0.0 | − |
| Forward exchange contracts | |||||||
Assets | − | − | − | − | − | − | − |
Liabilities | (0.2) | (0.2) | (0.1) | (0.1) | − | − | − |
| Total | 0.5 | 1.3 | 0.6 | 0.4 | 0.3 | 0.0 | − |
FINANCIAL STATEMENTS
Annual Integrated Report 2024
190
| 2024 | Carrying | Contractual | |||||
| EUR million | amount | cash flows | 0 – 6 months | 6 – 12 months | 1 – 2 years | 2 – 5 years | › 5 years |
| Interest rate swap contracts | |||||||
Assets | 0.2 | 1.2 | 0.6 | 0.4 | 0.2 | 0.0 | – |
Liabilities | (0.5) | 0.3 | 0.1 | 0.1 | 0.1 | 0.0 | – |
| Forward exchange contracts | |||||||
Assets | – | – | – | – | – | – | – |
Liabilities | – | 0.0 | 0.0 | – | – | – | – |
| Total | (0.3) | 1.5 | 0.7 | 0.5 | 0.3 | 0.0 | – |
| 2023 | Carrying | Contractual | |||||
| EUR million | amount | cash flows | 0 – 6 months | 6 – 12 months | 1 – 2 years | 2 – 5 years | › 5 years |
| Interest rate swap contracts | |||||||
Assets | 0.2 | 0.1 | 0.1 | – | – | – | – |
Liabilities | (0.5) | (0.2) | (0.1) | (0.1) | (0.0) | – | – |
| Forward exchange contracts | |||||||
Assets | – | – | – | – | – | – | – |
Liabilities | – | 0.0 | 0.0 | – | – | – | – |
| Total | (0.2) | (0.1) | 0.0 | (0.1) | (0.0) | – | – |
FINANCIAL STATEMENTS
Annual Integrated Report 2024191
2024 | 2023 | ||||||
| Nominal | Year of | Carrying | Carrying | ||||
| Currency | interest | redemption | Fair value | amount | Fair value | amount | |
Bank syndicate loans | EUR | IBOR + 1.8% | 2027 | 13.1 | 13.1 | 62.0 | 62.0 |
Schuldschein | EUR | IBOR +1% to 1.25% | 2025-2027 | 72.2 | 72.2 | 72.2 | 72.2 |
Other loans | Various | 1.40%-4.55% | 2024-2030 | 17.0 | 17.0 | 10.8 | 16.3 |
Bank overdrafts | EUR | IBOR + 1.8% | 2025 | 1.7 | 1.7 | 1.6 | 1.6 |
| Lease liabilities | Various | 0.9% - 8.3% | Various | 7.9 | 7.9 | 13.5 | 13.5 |
| Total interest-bearing debt | 111.9 | 111.9 | 160.1 | 165.6 |
FINANCIAL STATEMENTS
Annual Integrated Report 2024
192
31 December 2024 | Equity | Result |
US dollar | 1.1 | (0.3) |
Czech koruna | – | – |
Chinese yuan | 4.8 | 0.1 |
Romanian lei | 1.2 | (0.1) |
Indian rupee | 0.2 | (0.1) |
31 December 2023 | Equity | Result |
US dollar | 3.7 | 0.1 |
Czech koruna | 0.8 | (0.3) |
Chinese yuan | 6.0 | 0.1 |
Romanian lei | 1.6 | (0.2) |
Indian rupee | 0.2 | (0.1) |
| Applicable currency rates | |||
Value of EUR | At 31 December 2024 | At 31 December 2023 | Average over 2024 |
Pound sterling | 0.8292 | 0.8690 | 0.8467 |
Czech koruna | 25.1851 | 24.7237 | 25.1206 |
Chinese yuan | 7.5833 | 7.8509 | 7.7785 |
US dollar | 1.0389 | 1.1050 | 1.0822 |
Romanian lei | 4.9743 | 4.9756 | 4.9753 |
Swedish krona | 11.4590 | 11.0959 | 11.4198 |
Indian rupee | 88.9363 | 91.9033 | 90.6043 |
FINANCIAL STATEMENTS
Annual Integrated Report 2024
193
2024 | 2023 | |||
EUR million | Carrying amount | Fair value | Carrying amount | Fair value |
| Assets carried at amortized costs | ||||
Receivables (including current tax assets) | 61.8 | 61.8 | 70.9 | 70.9 |
Cash and cash equivalents | 8.5 | 8.5 | 20.6 | 20.6 |
Held to maturity investments | 0.2 | 0.2 | 0.5 | 0.5 |
70.5 | 70.5 | 92.0 | 92.0 | |
| Liabilities carried at amortized costs | ||||
Bank syndicate loans | (13.1) | (13.1) | (62.0) | (62.0) |
Schuldschein loans | (72.2) | (72.2) | (72.2) | (72.2) |
Other loans | (17.0) | (17.0) | (10.8) | (10.8) |
Lease liabilities | (7.9) | (7.9) | (13.5) | (13.5) |
Bank overdraft | (1.7) | (1.7) | (7.1) | (7.1) |
Trade and other payables (including current tax liabilities) | (66.3) | (66.3) | (91.9) | (91.9) |
(178.2) | (178.2) | (257.5) | (257.5) | |
| Assets / (Liabilities) carried at fair value | ||||
Interest derivatives | 0.2 | 0.2 | 0.7 | 0.7 |
Forward exchange contracts | 0.0 | 0.0 | (0.2) | (0.2) |
0.2 | 0.2 | 0.5 | 0.5 |
FINANCIAL STATEMENTS
Annual Integrated Report 2024
194
2 | ||
Level 1 | Level 2 | Level 3 | Total | |
| 31 December 2024 | ||||
Derivative contracts used for hedging | – | (0.2) | – | (0.2) |
| Total | – | (0.2) | – | (0.2) |
| 31 December 2023 | ||||
Derivative contracts used for hedging | − | 0.5 | − | 0.5 |
| Total | − | 0.5 | − | 0.5 |
FINANCIAL STATEMENTS
Annual Integrated Report 2024
195
Leases
The Group leases buildings, cars, office equipment and forklifts. The lease term varies between 3 to 15 years. For buildings an option to renew the lease
after the lease period is customary. Information about leases for which the Group is a lessee is presented on several places throughout the financial
statements:
■ total cash outflow for leases is included in the consolidated statement of cash flows for repayments of lease liabilities EUR 3.0 million
(2023: EUR 3.2 million) and in note 24 for interest EUR 0.7 million (2023: EUR 0.8 million);
■ the carrying amount of right-of-use assets at the end of the reporting period by class of underlying assets, addition to these assets and
the depreciation charge for these assets are included in note 1;
■ lease liabilities are included in note 12 and interest expense on lease liabilities are included in note 24;
■ expenses relating to short-term leases or low-value assets amount to EUR 0.2 million (2023: EUR 0.2 million).
18
Capital commitments
As at 31 December 2024 the Group had capital commitments totaling to EUR 2.2 million (2023: EUR 6.5 million).
19
20
FINANCIAL STATEMENTS
Annual Integrated Report 2024
196
The Netherlands | Germany | Other | European countries | |||
| 1 | 1 | |||||
EUR million | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
Revenue from transactions with third parties | 15.5 | 15.0 | 175.4 | 205.0 | 39.3 | 27.6 |
| Other non-current assets | 22.5 | 24.2 | 125.9 | 157.7 | 7.8 | 22.8 |
Deferred tax assets | 1.0 | 1.7 | 11.3 | 9.3 | 0.2 | 0.3 |
Net liability for defined benefit obligations | – | – | 4.6 | 6.0 | 0.2 | 0.3 |
| 2 | ||||||
| Asia | The Americas | Consolidated | ||||
| 1 | 1 | |||||
EUR million | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
Revenue from transactions with third parties | 56.7 | 45.3 | 14.6 | 16.1 | 301.5 | 309.0 |
Other non-current assets | 43.2 | 41.2 | 13.3 | 15.5 | 212.7 | 261.4 |
Deferred tax assets | 6.5 | 6.9 | 2.4 | 1.9 | 21.4 | 20.1 |
Net liability for defined benefit obligations | – | – | – | – | 4.8 | 6.3 |
| Revenue segmented by customer location | ||
EUR million | 2024 | 2023 1 |
Germany | 115.9 | 129.6 |
Other European countries | 93.1 | 97.5 |
Asia 2 | 70.6 | 57.3 |
The Americas | 19.6 | 22.1 |
Other countries | 2.3 | 2.5 |
| Total | 301.5 | 309.0 |
21
FINANCIAL STATEMENTS
Annual Integrated Report 2024
197
Industrial | Other Business | Consolidated | ||||
| 1 | 1 | |||||
EUR million | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
Revenue from transactions with third parties | 238.2 | 256.5 | 63.3 | 52.5 | 301.5 | 309.0 |
Inter-segment revenue | 0.0 | 0.0 | 0.1 | 0.1 | 0.1 | 0.1 |
EBITDA 2 | 29.8 | 34.6 | 4.1 | 4.9 | 33.9 | 39.5 |
EBITDA as a % of revenue 2 | 12.5% | 13.5% | 6.4% | 9.3% | 11.2% | 12.8% |
Normalized EBITDA 2 | 30.7 | 36.1 | 6.3 | 5.3 | 37.0 | 41.4 |
Normalized EBITDA as a % of revenue 2 | 12.9% | 14.1% | 9.9% | 10.0% | 12.3% | 13.4% |
Reportable segment assets | 261.7 | 278.9 | 103.1 | 183.4 | 364.8 | 462.3 |
Reportable segment employees (FTE) | 1,170 | 1,233 | 439 | 466 | 1,609 | 1,699 |
| Disaggregation revenue | ||
EUR million | 2024 | 2023 1 |
Revenue from serial produced goods | 298.4 | 303.8 |
Revenue from engineering and samples | 3.1 | 5.2 |
| Total | 301.5 | 309.0 |
FINANCIAL STATEMENTS
Annual Integrated Report 2024
198
| Staff costs | ||
| 1 | ||
EUR million | 2024 | 2023 |
Wages and salaries | 75.1 | 78.6 |
Social security charges | 11.9 | 11.6 |
Temporary personnel | 3.4 | 3.7 |
Contributions to defined contribution plans | 1.2 | 1.0 |
Expenses related to defined benefit plans | – | – |
Increase in liability for long-service leave | (0.1) | 0.1 |
Other costs of personnel | 2.8 | 2.8 |
94.3 | 97.8 |
22
| Other operating expenses | ||
| 1 | ||
EUR million | 2024 | 2023 |
Increase/(Decrease) in provision for doubtful debts | 0.2 | 0.0 |
Premises costs | 5.0 | 4.0 |
Maintenance expenses | 6.8 | 5.7 |
Transport expenses | 1.7 | 1.7 |
Consultancy expenses | 3.7 | 2.9 |
Sales and promotion expenses | 0.7 | 0.7 |
Car, travel and representation costs | 1.8 | 2.3 |
Insurance | 1.7 | 1.7 |
Other | 2.6 | 1.1 |
24.2 | 20.1 |
23
1
FINANCIAL STATEMENTS
Annual Integrated Report 2024
199
| Net finance costs | ||
| 1 | ||
EUR million | 2024 | 2023 |
Interest income | 0.1 | 0.2 |
Net exchange gain | – | – |
| Finance income | 0.1 | 0.2 |
Interest expenses | (5.1) | (4.8) |
Interest expenses related to lease liabilities | (0.5) | (0.5) |
Interest expenses related to employee benefits | (0.2) | (0.3) |
Net exchange loss | (0.3) | (0.7) |
| Finance expense | (6.1) | (6.3) |
| Net financing costs | (6.0) | (6.1) |
24
| Income tax | ||
EUR million | 2024 | 2023 1 |
Current tax charge | 4.6 | 4.2 |
Deferred tax charge | (2.0) | 0.1 |
| Total corporation tax expenses in the income statement | 2.6 | 4.3 |
| 25 | |||||
| Reconciliation of effective tax rate | |||||
Reconciliation effective tax rate | Reconciliation in EUR million | ||||
| 1 | 1 | ||||
2024 | 2023 | 2024 | 2023 | ||
Profit before income tax | 8.7 | 16.1 | |||
| Income tax expense at local corporation tax rate | 25.8% | 25.8% | 2.2 | 4.1 | |
Effect of tax rates in foreign jurisdictions | (1.6)% | (3.9)% | (0.4) | (0.2) | |
Non-deductible expenses | 2.3% | 3.3% | 0.3 | 0.4 | |
Tax exempt income | (0.3)% | (0.1)% | 0.0 | (0.1) | |
Changes in estimates related to prior years | 4.2% | 4.0% | 0.4 | 0.7 | |
Current-year losses for which no deferred tax asset is recognized | 0.0% | (1.2)% | (0.1) | – | |
Additional deductible items | (4.1)% | – | – | (0.7) | |
Other movements | 0.5% | 2.2% | 0.2 | 0.1 | |
26.8% | 30.1% | 2.6 | 4.3 |
Non-deductible expenses include the effect of partially deductible interest cost, additional deductible items reflect double deduction of R&D cost in China.
26
FINANCIAL STATEMENTS
Annual Integrated Report 2024
200
EUR thousand | 2024 | 2023 |
Short-term benefits | 1,607.4 | 1,500.8 |
Post-employment benefits | 158.9 | 150.0 |
Other long-term benefits | - | – |
Share-based payments | 50.6 | 71.9 |
Termination benefits | - | – |
1,816.9 | 1,722.7 |
27
FINANCIAL STATEMENTS
Annual Integrated Report 2024
201
CEO (J.A.J. van Beurden) | Number of shares | Expiry vesting period | Expiry holding period |
2024 | 30,596 | Expiry performance period 2024-2026 | End of 2028 |
2023 | 22,030 | Expiry performance period 2023-2025 | End of 2027 |
2022 | 16,144 | Expiry performance period 2022-2024 | End of 2026 |
2021 | 20,245 | Expiry performance period 2021-2023 | End of 2025 |
2020 | 16,533 | Expiry performance period 2020-2022 | End of 2024 |
CFO (J.H. Hemmen) | Number of shares | Expiry vesting period | Expiry holding period |
2024 | 15,126 | Expiry performance period 2024-2026 | End of 2028 |
2023 | 11,363 | Expiry performance period 2023-2025 | End of 2027 |
2022 | 8,194 | Expiry performance period 2022-2024 | End of 2026 |
2021 | 9,533 | Expiry performance period 2021-2023 | End of 2025 |
2020 | 6,769 | Expiry performance period 2020-2022 | End of 2024 |
FINANCIAL STATEMENTS
Annual Integrated Report 2024
202
Other notes
28
Post-balance sheet events
There were no post-balance sheet events that have to be taken into account in the consolidated financial statements for the year ended
31 December 2024.
29
FINANCIAL STATEMENTS
Annual Integrated Report 2024
203
Note EUR million 2024 2023
Fixed assets
Property, plant and equipment 0.7 0.6
Other investments, including derivatives 0.2 0.1
1.3 Financial fixed assets 180.1 228.4
Total non-current assets
181.0 229.1
| Current assets | |||
1.4 | Receivables | 3.0 | 1.2 |
Cash and cash equivalents | 0.0 | 0.0 | |
| Total current assets | 3.0 | 1.2 | |
| Total assets | 184.0 | 230.3 | |
1.5 | Equity | ||
Share capital | 31.0 | 30.6 | |
Share premium | 37.1 | 37.3 | |
Legal reserves | 5.7 | 14.2 | |
Other reserves | 89.2 | 80.0 | |
Net profit/ (loss) for the period | (4.5) | 9.9 | |
| Total equity | 158.5 | 172.0 | |
1.6 | Current liabilities | ||
Loans and borrowings | 23.2 | 56.5 | |
Payables | 2.3 | 1.8 | |
| Total current liabilities | 25.5 | 58.3 | |
| Total equity and liabilities | 184.0 | 230.3 |
COMPANY BALANCE SHEET AT 31 DECEMBER
(before profit appropriation)
FINANCIAL STATEMENTS
Annual Integrated Report 2024
204
COMPANY INCOME STATEMENT
Note | EUR million | 2024 | 2023 |
Revenue | – | – | |
1.8 | Other income | 4.5 | 5.5 |
| Total revenue and other income | 4.5 | 5.5 | |
1.9 | Staff costs | 5.0 | 4.6 |
Depreciation and amortization | 0.1 | 0.1 | |
Other operating expenses | 1.2 | 1.8 | |
| Result before net finance costs | (1.8) | (1.0) | |
Finance income | – | – | |
Finance expense | (0.8) | (2.3) | |
| Profit/(loss) before income tax | (2.6) | (3.3) | |
Income tax expense | (0.8) | (0.4) | |
| Profit/(loss) for the period | (3.4) | (3.7) | |
Share in results of Group companies after tax | (1.1) | 13.6 | |
1.10 | Net profit/(loss) for the period | (4.5) | 9.9 |
FINANCIAL STATEMENTS
Annual Integrated Report 2024
205
Notes to the company financial statements
General
The Company financial statements are part of the 2024 financial statements of Kendrion N.V. (the ‘Company’). The Company is registered
at the Chamber of Commerce in The Netherlands under number: 30113646.
Principles of valuation of assets and liabilities and determination of results
In selecting the principles employed in the company financial statements for the valuation of assets and liabilities and determination of results,
Kendrion N.V. has made use of the option provided by Section 362, subsection 8, of Book 2 of the Netherlands Civil Code. Consequently, the principles
employed in the Company financial statements of Kendrion N.V. for the valuation of assets and liabilities and determination of results (the ‘accounting
policies’) are identical to those employed in the consolidated EU-IFRS financial statements. Interests in entities in which Kendrion N.V. has significant
influence are measured using the equity method. The consolidated EU-IFRS financial statements have been prepared in accordance with the standards
adopted by the International Accounting Standards Board as endorsed for use in the European Union (hereinafter referred to as ‘EU-IFRS’).
These policies are discussed in notes a – t
Financial fixed assets
| EUR million | companies | Deferred tax | Total 2024 | Total 2023 |
Carrying amount at 1 January | 227.8 | 0.6 | 228.4 | 221.2 |
Results of Group companies | (1.1) | – | (1.1) | 13.6 |
Movements in deferred tax assets | – | (0.4) | (0.4) | (0.5) |
Foreign currency translation differences for foreign operations | (3.4) | – | (3.4) | (4.8) |
Dividends received | (42.0) | – | (42.0) | – |
Other movements | (1.4) | – | (1.4) | (1.1) |
| Carrying amount at 31 December | 179.9 | 0.2 | 180.1 | 228.4 |
Interest in Group
| Receivables | ||
EUR million | 2024 | 2023 |
Receivables from Group companies | 2.4 | 0.6 |
Prepayments and accrued income | 0.6 | 0.6 |
3.0 | 1.2 |
All receivables are due within one year.
1
1.1
1.2
1.3
1.4
NOTES TO THE COMPANY FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
Annual Integrated Report 2024
206
Equity
| EUR million | capital | premium | reserve | reserve | participations | own shares | reserves | year | Total 2024 | Total 2023 |
Balance as at 1 January | 30.6 | 37.3 | 4.6 | 0.3 | 9.3 | – | 80.0 | 9.9 | 172.0 | 175.0 |
Appropriation of retained earnings | – | – | – | – | – | – | 9.9 | (9.9) | – | – |
| Foreign currency translation differences | ||||||||||
for foreign operations | – | – | (3.4) | – | – | – | – | – | (3.4) | (4.8) |
Net change in fair value of cash flow hedges, net of income tax | – | – | – | (0.5) | – | – | – | – | (0.5) | (1.5) |
Issue of ordinary shares | 0.4 | 2.5 | – | – | – | – | (0.2) | – | 2.7 | 3.1 |
Own shares issued | – | – | – | – | – | – | – | – | – | 0.8 |
Share-based payment transactions | – | – | – | – | – | – | (0.2) | – | (0.2) | 0.0 |
Dividends to equity holders | – | (2.7) | – | – | – | – | (4.1) | – | (6.8) | (10.9) |
Other | – | – | – | – | (4.6) | – | 3.8 | – | (0.8) | 0.4 |
Net profit/(loss) for the period | – | – | – | – | – | – | – | (4.5) | (4.5) | 9.9 |
| Balance as at 31 December | 31.0 | 37.1 | 1.2 | (0.2) | 4.7 | – | 89.2 | (4.5) | 158.5 | 172.0 |
Share
Share
Translation
Hedge
Reserve for
Reserve for
Other
Result for the
Share capital
The authorized capital of the Company amounts to EUR 80 million, divided into 40 million ordinary shares of EUR 2.00 each, of which 15,500,057
ordinary shares have been issued (2023: 15,276,014).
Share premium
The share premium represents revenue from shares issued at more than their nominal value (issued above par). The issued and paid share capital,
including share premium, is fiscally recognized capital.
Translation reserve (Legal reserve)
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of subsidiaries outside the euro
zone. Gains and losses relating to the translation risk are recognized in equity. The build-up of the cumulative figure commenced on 1 January 2004.
In 2024, the translation reserve pertaining to the automotive subdiaries in USA and Czech Republic, were recycled to the statement of profit and loss,
upon disposal of the subsidiaries. In total an amount of EUR 5.6 million (gain) was recycled from the translation reserve to consolidated statement of
profit and loss upon disposals of the subsidiaries outside the euro zone.
1.5
1.5.1
1.5.2
1.5.3
FINANCIAL STATEMENTS
Annual Integrated Report 2024
207
Hedge reserve
The hedge reserve comprises the effective share of the cumulative net movement in the fair value of cash-flow hedging instruments relating to hedged
transactions that have not yet been executed.
Statutory reserve for participations (Legal reserve)
This reserve pertains to participating interests that are accounted for according to the equity accounting method. The reserve represents the difference
between the participating interests’ retained profit and direct changes in equity, as determined on the basis of the Company’s accounting policies, and
the share thereof that the Company may distribute. It is shown as the share in the undistributed results of the subsidiaries since they were first valued
using the equity method. The amount of any dividend – from these subsidiaries – to which there is an entitlement on adoption of the financial statements
is deducted from this reserve.
Reserve for own shares (Legal reserve)
The reserve for the Company’s own shares comprises the cost of the Company shares that are held by the Company for the remuneration package for
the Executive Board. As at 31 December 2024, the Company did not hold its own shares (2023:nil).
Other reserves
Other reserves are all the reserves other than those shown separately and comprise primarily the cumulative, undistributed profits from previous financial
years.
Retained earnings
In 2024, the full result for 2023 was included in other reserves. Retained earnings consequently consist solely of the result for 2024.
| Current liabilities | ||
EUR million | 2024 | 2023 |
Debts to Group companies | 22.8 | 56.0 |
Lease liability | 0.4 | 0.5 |
Trade payables | 1.1 | 0.7 |
Other payables and accrued expenses | 1.2 | 1.1 |
25.5 | 58.3 |
An amount of EUR 0.3 million is included on the line lease liability that is due after 2024 (2023: EUR 0.4 million).
Financial instruments
See note 17 to the consolidated financial statements for details on financial instruments.
1.5.4
1.5.5
1.5.6
1.5.7
1.5.8
1.6
1.7
FINANCIAL STATEMENTS
Annual Integrated Report 2024
208
Other income
EUR million 2024 2023
Management fee 4.5 5.5
| 4.5 5.5 |
| Staff costs | ||
EUR million | 2024 | 2023 |
Wages and salaries | 3.9 | 3.5 |
Social security charge | 0.2 | 0.2 |
Pension costs | 0.6 | 0.6 |
Other costs of personnel | 0.3 | 0.3 |
5.0 | 4.6 | |
Total number of employees and temporary workers at 31 December (FTE) | 19 | 19 |
| All employees were posted in the Netherlands. The Company has only defined contribution plans for its employees. |
| Profit appropriation | ||
| Appropriation of net result | ||
EUR million | 2024 | 2023 |
Net (loss)/profit | (4.5) | 9.9 |
The Executive Board has decided, with the approval of the Supervisory Board, that the net loss of EUR 4.5 million will be deducted from the other
reserves.
Commitments not appearing on the balance sheet
Joint and several liability and guarantees
The Company and its Group companies have issued guarantees mainly in the context of the financing by financial institutions.
The Company has issued declarations of joint and several liability, as referred to in Section 403 of Book 2 of the Netherlands Civil Code, for:
■ Combattant Holding B.V., De Bilt;
■ Kendrion Finance B.V., Zeist;
■ 3T B.V., Enschede;
■ Kendrion Marketing B.V., Zeist.
1.8
1.9
1.10
1.11
1.11.1
FINANCIAL STATEMENTS
Annual Integrated Report 2024
209
Fiscal unity
The Company and its Dutch subsidiaries excluding 3T B.V. form a tax group for corporation tax purposes.
According to the standard terms, each of the companies is jointly and severally liable for corporation tax payable by all the members of the fiscal unity.
Post-balance sheet events
There were no post-balance sheet events that have to be taken into account in the consolidated financial statements for the year ended
31 December 2024.
Fees to the auditor
With reference to Section 2:382a of the Netherlands Civil Code, the following fees have been charged by Forvis Mazars Accountants N.V. and its
member firms and affiliates in 2024 to the Company, its subsidiaries and other consolidated entities:
2024 | 2023 | ||||||
| Other Forvis | Other Deloitte | ||||||
| Forvis Mazars | Mazars member | Deloitte | Deloitte | member firms | Total | ||
| EUR thousand | Accountants N.V. | firms and affiliates | Accountants B.V. | Total | Accountants B.V. | and affiliates | Deloitte |
Audit of financial statements | 389.5 | 406.3 | 72.2 | 868.0 | 516.9 | 405.0 | 921.9 |
Other assurance services | 100.0 | – | – | 100.0 | 33.5 | − | 33.5 |
Tax advisory services | – | – | – | – | − | − | − |
Other non-audit services | – | – | – | – | − | − | − |
| Total | 489.5 | 406.3 | 72.2 | 968.0 | 550.4 | 405.0 | 955.4 |
Remuneration of and share ownership by the Executive Board and Supervisory Board
Remuneration of the Executive Board
The remuneration of current Executive Board members charged to the Company and Group companies, including pension expenses as referred to
in Section 383, subsection 1, of Book 2 of the Netherlands Civil Code, amounted to EUR 1,604,000 (2023: EUR 1,507,800). This remuneration is as
follows:
2024 | 2023 | |||||
| J.A.J. van | J.A.J. van | |||||
| EUR thousand | Beurden | J. H. Hemmen | Total | Beurden | J. H. Hemmen | Total |
Short-term fixed remuneration | 590.0 | 350.0 | 940.0 | 553.3 | 342.5 | 895.8 |
Short-term variable remuneration | 291.7 | 129.8 | 421.5 | 269.6 | 111.5 | 381.1 |
Long-term variable remuneration | 33.6 | 17.0 | 50.6 | 48.9 | 23.0 | 71.9 |
| Subtotal | 915.3 | 496.8 | 1,412.1 | 871.8 | 477.0 | 1,348.8 |
Post-employment benefits and other expenses | 83.5 | 108.4 | 191.9 | 80.4 | 78.6 | 159.0 |
| Total | 998.8 | 605.2 | 1,604.0 | 952.2 | 555.6 | 1,507.8 |
1.11.2
1.12
1.13
1.14
FINANCIAL STATEMENTS
Annual Integrated Report 2024
210
The 2023 short-term variable remuneration will be paid in cash after income tax.
For more information on the long-term variable remuneration see page 200.
Remuneration of the Supervisory Board
The total remuneration of current and former Supervisory Board members in 2024 amounts to EUR 213 thousand (2023: EUR 215 thousand).
This remuneration is as follows:
EUR thousand | 2024 | 2023 |
| Supervisory Board Members: | ||
E. Slijkhuis (appointed as of 17 April 2023) | 49 | 37 |
F. van Hout | 65 | 65 |
M.J.G. Mestrom (stepped down as from 15 April 2024) | 14 | 49 |
M. Baijens (appointed as of 15 April 2024) | 37 | – |
J.T.M. van der Meijs (stepped down as from 17 April 2023) | – | 16 |
E.M. Doll | 48 | 48 |
213 | 215 |
No loans, advances or related guarantees have been given to the Executive Board or Supervisory Board members.
| Share ownership by the Executive Board and the Supervisory Board | |||
31 December 2024 | 31 December 2023 | ||
Executive Board | J.A.J. van Beurden | 66,990 | 56,835 |
J.H. Hemmen | 18,283 | 11,403 | |
Supervisory Board | F. van Hout | 26,500 | 11,800 |
E. Slijkhuis | 3,500 | – | |
E. Doll | 1,000 | – |
Amsterdam, February 28, 2025
Executive Board Supervisory Board
J.A.J. van Beurden F. van Hout
J.H. Hemmen M. Baijens
E. Slijkhuis
E.M. Doll
Annual Integrated Report 2024
211
Provisions in the Articles of Association governing the appropriation of profit
Under article 35.1 and 35.2 of the Articles of Association of the Company, the Executive Board shall, with the approval of the Supervisory Board,
determine which part of the profit is added to the reserves. The profit remaining after transfer to the reserves is available to the General Meeting of
Shareholders. The Company can only make payments to the shareholders and other parties entitled to the distributable result insofar as the
shareholders’ equity exceeds the paid-up and called-up part of the capital plus the statutory reserves and exceeds the amounts resulting from the
distribution test, performed by the Executive Board at the date of each dividend payment.
OTHER INFORMATION
Annual Integrated Report 2024
212
INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS
To the shareholders and Supervisory Board of Kendrion N.V.
Report on the audit of the financial statements 2024 included in the Annual Integrated Report
Our opinion
We have audited the accompanying financial statements for the year ended 31 December 2024 (hereafter “financial statements”) of Kendrion N.V.
(hereafter “Company” refers to the legal entity, and “Group” refers to the company and its subsidiaries, based in Amsterdam, Netherlands. The
Company is the head of a group of entities (“components”). The financial information of this group is included in the 2024 consolidated financial
statements of the Group. The financial statements include the 2024 consolidated financial statements and the 2024 company financial statements.
In our opinion:
■ The accompanying consolidated financial statements give a true and fair view of the financial position of the Group as at 31 December 2024 and
of its result and its cash flows for 2024 in accordance with IFRS Accounting Standards as adopted by the European Union (EU) and with Part 9 of
Book 2 of the Dutch Civil Code.
■ The accompanying company financial statements give a true and fair view of the financial position of the Company as at 31 December 2024 and of
its result for 2024 in accordance with IFRS Accounting Standards as adopted by the European Union (EU) and with Part 9 of Book 2 of the Dutch
Civil Code.
The consolidated financial statements comprise:
1. the consolidated statement of financial position as at 31 December 2024;
2. the following statements for 2024: the consolidated statement of profit and loss and other comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows; and
3. the notes comprising a summary of the material accounting policies and other explanatory information.
The company financial statements comprise:
1. the company balance sheet as at 31 December 2024;
2. the company income statement for 2024; and
3. the notes comprising a summary of the accounting policies and other explanatory information.
Basis for our opinion
We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are
further described in the ‘Our responsibilities for the audit of the financial statements’ section of our report.
Annual Integrated Report 2024
213
INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS
We are independent of the Group and the Company in accordance with the EU 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 assurance-opdrachten (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).
We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion
Information in support of our opinion
We designed our audit procedures in the context of our audit of the financial statements as a whole and in forming our opinion thereon. The following
information in support of our opinion was addressed in this context, and we do not provide a separate opinion or conclusion on these matters.
First-year audit consideration
After our appointment as the Company’s auditors, we developed and executed a comprehensive transition plan. As part of this transition plan, we
carried out a process of understanding the strategy of the Group, its business, its internal control environment and IT systems. We examined where
and how this affected the Company’s and the Group’s financial statements and internal control framework. Additionally, we read the prior year financial
statements and we reviewed the predecessor auditor’s files and discussed and evaluated the outcome of the audit procedures included therein. We
attended the closing meeting and audit committee meeting related to the 2023 audit. Based on these procedures, amongst others, we obtained
sufficient and appropriate audit evidence regarding the opening balances.
Materiality
Based on our professional judgement we determined the materiality for the financial statements as a whole at € 2.2 million. The materiality is based on
0.75% of revenues from continuing operations. We have also taken into account misstatements and/or possible misstatements that in our opinion are
material for the users of the financial statements for qualitative reasons.
Audits of group entities (components) were performed using materiality levels determined by the judgement of the group audit team.
We communicated with the Audit Committee that misstatements in excess of € 66.000, which are identified during the audit, would be reported to
them, as well as smaller misstatements that in our view must be reported on qualitative grounds.
Scope of the group audit
The Company is at the head of a group of entities (“components”). The financial information of this group is included in the 2024 consolidated financial
statements of the Group.
We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on the financial statements as a whole. We
used the outputs of our risk assessment, our understanding of the Group, its environment, controls and critical process, to consider qualitative factors in
order to ensure that we obtained sufficient audit evidence.
Annual Integrated Report 2024
214
INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS
As part of designing our audit, we assessed the risk of material misstatement in the financial statements whether due to fraud or error and then
designed and performed audit procedures responsive to those risks. In particular, we looked at where management made subjective judgement such as
making assumptions on significant accounting estimates.
Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising and performing the group audit. In this respect
we have determined the nature and extent of the audit procedures to be carried out on the components. Our group audit is focusing on components
in terms of audit risk and or where significant risks or complex activities were present, leading to full scope audits and specific scope audits having been
performed on the components in Germany, Austria, Czech, Sweden, China, Romania, USA and the Netherlands.
We performed audit procedures at group level on areas such as consolidation, financial statement disclosures and impairment testing for intangible
assets (including goodwill). Specialists were involved amongst others in the areas of information technology, forensic and valuation.
We also involved component auditors from the Forvis Mazars Network and other audit firms, who are familiar with local laws and regulations. For these
component auditors, the group audit team provided detailed written instructions, which include the requirements for component audit teams, the audit
approach for significant audit areas, other information obtained centrally and the need for awareness for fraud risks. Our oversight procedures also
included a combination of remote and on-site reviews of working papers of the auditors of the material components, (virtual) meetings with component
auditors and management of the components, and reviewing deliverables supplied by the component auditors to gain sufficient understanding of the
work performed. We varied the nature, timing and extent of these procedures based on both quantitative and qualitative considerations. For smaller
components, we performed substantive audit procedures on material but non-significant financial statement line items, along with analytical procedures,
to corroborate our assessment that there are no remaining risks of material misstatements.
By performing the procedures mentioned above we have been able to obtain sufficient and appropriate audit evidence about the consolidated and
company financial information and to provide an opinion on the financial statements as a whole.
Audit approach fraud risks
We refer to section ‘Risk management’ of the Executive Board Report for management’s fraud risk assessment. We note that management regularly
updates its risk assessment including fraud and updates its risk and control framework.
Annual Integrated Report 2024
215
INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS
As part of our procedures of identifying fraud risks, we evaluated fraud risks factors with respect to financial reporting fraud, misappropriation of assets
and corruption. We identified the following fraud risks and performed the following specific procedures:
Fraud risk 1 Our audit work performed
Management override of controls
Management is ordinarily in a unique position to adjust the
financial statements by overriding controls that otherwise appear
to be operating effectively.
In this context, we paid attention to:
■ The appropriateness of journal entries and other adjustments
made in the preparation of the financial statements, such as
manual journal entries related to revenue that are made during
the year; journal entries made close to the year end date and
consolidation adjustments and reclassifications.
■ Potential biases in estimates, such as impairment of intangible
assets (goodwill and other intangible assets).
■ Significant transactions, if any, outside the normal course of
business.
Amongst others we have performed the following audit procedures:
■ An understanding of the internal control framework and evaluated the design and implementation of the relevant controls
in the financial closing process.
■ with regard to the Executive Board’s key accounting estimates, we have evaluated judgements and decisions for bias of
the Executive Board. This is mainly related to the key accounting estimates in the management forecast used for the
impairment analysis of the cash-generating units, the management forecast of cashflows to determine whether customer
relations are impaired and the management forecast to determine the future utilisation of tax losses,
■ we made enquiries of individuals with different levels of responsibility involved in the financial reporting process about
inappropriate or unusual activity relating to the processing of journal entries and other adjustments,
■ we performed analyses of high risk journals within the consolidation with a pre assessed risk of material misstatments, as
part of our audit approach to address fraud risks which could have a risk of material misstatement on the financial
statements;
■ we performed audit procedures on journal entries in the various processes, amongst other the closing and consolidation,
based on fraud selection criteria in which at least the following criteria have been applied:
■ Material adjustments made during the course of preparing the financial statements;
■ Manual journal entries on the operational related revenue ledgers;
■ Adjustments on group level which relate to regular activities on component level.
For these journal entries we have tested the appropriateness by obtained supporting documentation:
■ For significant and risk-related transactions we evaluated whether the business rationale of the transactions suggests that
they may have been entered into to engage in fraudulent financial reporting or to conceal misappropriation of assets.
Annual Integrated Report 2024
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INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS
Fraud risk 2 Our audit work performed
Risk of fraud in revenue recognition
The accounting principles in relation to revenue recognition are
included in the basis of accounting paragraph (l) of the
consolidated financial statements.
The risk of fraud in revenue recognition is a presumed audit risk.
For the Company this has been assessed as a risk for
overstatement of revenue through the occurrence of inappropriate
manual transactions (non-standard transactions).
Amongst others we have performed the following audit procedures:
■ An update of our understanding of the Group’s revenue recognition policies where relevant to our audit;
■ we assessed the internal control framework and evaluated the design and implementation of the relevant controls in the
financial closing process, revenue reporting process and in the processes for generating and processing manual journal
entries related to the revenue.
■ we assessed the IT environment and relevant systems.
■ we performed audit procedures on non-standard journal entries made within the operational cycles of revenue (classified
as unexpected journals).
In addition, we also performed the following more general procedures:
■ We assessed the speak-up and compliance matters followed up by management.
■ We have incorporated an element of unpredictability in the selection of the nature, timing and extent of our audit procedures.
■ We evaluated whether the selection and application of accounting policies by the entity, particularly those related to subjective measurements and
complex transactions, may be indicative of fraudulent financial reporting.
In performing these procedures, we used the support of our component auditors and IT-specialists. Our forensic specialists participated in the planning
of the audit and aided to identify areas where the Group’s financial statements may be susceptible to material misstatement due to fraud and reviewed
our fraud risk assessment.
Our response to the risk of non-compliance of laws and regulations
We have obtained an understanding of the relevant laws and regulations. We have identified the following laws and regulations that have an indirect
effect on the financial statements: anti-bribery and corruption laws & regulations, competition and data privacy laws, and human rights laws and
regulations.
We held enquiries with management and the audit committee if the entity is compliant with laws and regulations which directly or indirectly have a
material impact on the financial statements. We also inspected lawyers’ letters and remained alert to indications of identified and suspected non-
compliance throughout the audit, held enquiries with legal counsel, and obtained a written representation from management that all known instances of
identified and suspected non-compliance with laws and regulations were disclosed to us.
Observations
The aforementioned audit procedures have been performed in the context of the audit of the financial statements. Consequently, they are not planned
and performed as a specific investigation regarding fraud and non-compliance with laws and regulations. Our audit procedures have not led to any
findings.
Annual Integrated Report 2024
217
INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS
Audit approach going concern
Our responsibilities, as well as the responsibilities of the Executive Board, related to going concern under the prevailing accounting standards are
outlined in the “Description of responsibilities regarding the financial statements” section below. The Executive Board has performed its going concern
assessment and has not identified any going concern risks. Our main procedures to assess the Executive Board assessment were:
■ We considered whether the Executive Board assessment of the going concern risks includes all relevant information of which we are aware as a
result of our audit.
■ We evaluated the consistency of information used in the Executive Board going concern assessment (including cash flow projections and stress test
scenarios) and information obtained through auditing other areas such as impairment assessments.
■ Reading the terms of debt covenants and determining whether any have been breached.
■ Inquiring of the entity’s Legal Counsel regarding the existence of litigation and claims and the reasonableness of management’s assessments of their
outcome and the estimate of their financial implications.
■ Performing audit procedures regarding subsequent events to identify those that either mitigate or otherwise affect the entity’s ability to continue as a
going concern.
■ We analysed the Company’s financial position as at year-end and compared it to the previous financial year in terms of indicators that could identify
going concern risks.
■ Reading minutes of the Executive Board, Supervisory Board and relevant committees for reference to financing difficulties.
■ Discussions with component auditors about facts and circumstances which might be relevant for the going concern assessment at group level.
■ Analysing the Company’s assessment on the impact of the current market developments (i.e. demand volatility and increasing raw material prices.
■ We inquired with the Executive Board on the key assumptions and principles underlying the Executive Board assessment of the going concern risks.
■ We inspected agreements in terms of conditions that could lead to going concern risks.
Observations
Based on these procedures, we did not identify any reportable findings related to the Company’s ability to continue as going concern.
Annual Integrated Report 2024
218
INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS
Our key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements. We have
communicated the key audit matters to the Executive Board. The key audit matters are not a comprehensive reflection of all matters discussed.
These matters were addressed in the context of the audit of the financial statements as a whole and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Key Audit Matter How our scope addressed this matter
Impairment testing of goodwill
The group accounting policies in respect of goodwill and
impairment are set out in the accounting policy notes of the
consolidated financial statements. For further financial information
on the goodwill and related impairment test, we refer to Note 2 of
the consolidated financial statements.
For purposes of impairment testing, goodwill is allocated and
monitored on a (group of) Cash Generating Unit (‘CGU’) level.
Other intangibles and property, plant, and equipment are grouped
to CGUs. For goodwill, management is required to assess the
recoverable amount of the respective CGUs.
In view of the inherent uncertainties, including those related to the
current macro-economic environment, the projection of sales
volumes, revenues, margins, and discount rates in management’s
impairment tests, involved an increased level of judgement for
CGUs. As a result of impairment testing for the current year, no
impairment loss has been identified.
Given the high level of judgement made by management to
estimate the recoverable amounts used in management’s
impairment tests for intangible assets (including goodwill) and
property, plant and equipment, the impairment testing was a key
audit matter.
We involved our valuation specialists during our audit procedures.
Our audit procedures included the following:
■ We evaluated the design effectiveness of controls related to the impairment assessment including the appropriateness of
management’s assessment of the CGUs, indicators of impairment, discount rates and forecasts.
■ we assessed and evaluated the reasonableness of key assumptions in the fair value less cost of disposal and value in use
calculations, including the received offer(s) supporting the fair value less cost of disposal and the projected revenue
growth, operating margin, discount rates and growth rates used in the value in use model.
■ we benchmarked key assumptions against external data and challenged management by comparing the assumptions to
historic performance of the company and local economic developments, taking into account the sensitivity test of the
goodwill balances for any changes in the respective assumptions;
■ we engaged with our internal valuation experts to assist us in evaluating the appropriateness of the fair value less cost of
disposal and value in use impairment models, including the key assumptions and supporting documentation, and
conclude on the overall reasonableness;
■ we audited management‘s sensitivity analysis to assess the impact of potential changes in assumptions;
■ we verified the mathematical accuracy of the models and agreed these models with relevant data;
■ we evaluated the reasonableness of the disclosures made in the financial statements in relation to the carrying value of
goodwill.
Our observation
Applying the aforementioned materiality, we did not identify any reportable findings in management’s assessment of the
recoverability of intangible assets (including goodwill) and property, plant and equipment.
Annual Integrated Report 2024
219
INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS
Key Audit Matter How our scope addressed this matter
Accounting of the sale of the majority of
the Automotive business
Refer to note 9 to the consolidated financial statements for
financial information.
In October 2024, the sale of the automotive activities to Solero
Technologies LLC has been finalized..
These disposed entities are presented as discontinued operations
where results for the year and the deal result are presented as part
of a single consolidated statement of comprehensive income line
item ‘Net Income/(Loss) from Discontinued operations.
The result on the sale and management’s application of IFRS 5 is
significant to our audit because:
■ it concerns a material transaction
■ the non-routine nature of the transaction and accounting
implications within the consolidation.
Our audit procedures included, amongst others, the following:
■ reviewing the share purchase agreement(s) and other relevant documents to assess: 1) the transaction details and any
elements that may affect the sales price and 2) any remaining obligation and risk for Kendrion N.V. that could have an
impact on the consolidated financial statements.
■ evaluating managements conclusion on the date of classifying its subsidiaries as “held for sale”.
■ assessing the accuracy and completeness of the deal result in the financial statements.
■ using component auditor to audit the accuracy and completeness of the income statement and balance sheet per the
closing date of the transaction.
■ assessing the overall presentation in the consolidated financial statements, as well as the required disclosures of IFRS 5
in the consolidated financial statements.
Our observation
Applying the aforementioned materiality, we did not identify any reportable findings.
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220
INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS
Report on the other information included in the Annual Integrated Report 2024
In addition to the financial statements and our auditor’s report thereon, the Annual Integrated Report 2024 contains other information that consist of:
■ Report of the Executive Board;
■ Report of the Supervisory Board;
■ Remuneration report;
■ Other information as included in the report;
■ Other information as required by Part 9 of Book 2 of the Dutch Civil Code
The Annual Integrated Report contains other information, in addition to the financial statements and our auditor’s report thereon.
Based on the following procedures performed, 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 management report and the other information as required by Part 9 of Book 2 of the Dutch Civil Code.
We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial statements or otherwise,
we have considered whether the other information contains material misstatements.
By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720. The scope
of the procedures performed is substantially less than the scope of those performed in our audit of the financial statements.
Management is responsible for the preparation of the other information, including the management report in accordance with Part 9 of Book 2 of the
Dutch Civil Code and other information as required by Part 9 of Book 2 of the Dutch Civil Code.
Report on other legal and regulatory requirements and ESEF
Engagement
We were appointed as auditors of the consolidated financial statements for FY 24 of the Company by the Supervisory Board. This was followed by
the passing of a resolution of the shareholders at the annual general meeting held on 15 April 2023. This has been followed by confirmation of our
engagement via an engagement letter dated 29 May 2024 for FY24. We have operated as statutory auditor since that financial year.
No prohibited non-audit services
We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on specific requirements regarding statutory audit
of public-interest entities.
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INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS
European Single Electronic Format (ESEF)
The Company has prepared its Annual Integrated Report in ESEF. The requirements for this are set out in the Delegated Regulation (EU) 2019/815 with
regard to regulatory technical standards on the specification of a single electronic reporting format (hereinafter: the RTS on ESEF).
In our opinion the Annual Integrated Report prepared in XHTML format, including the partly marked-up consolidated financial statements as included in
the reporting package by the Group, complies in all material respects with the RTS on ESEF.
The Executive Board is responsible for preparing the Annual Integrated Report including the financial statements in accordance with the RTS on ESEF,
whereby management combines the various components into one single reporting package.
Our responsibility is to obtain reasonable assurance for our opinion whether the Annual Integrated Report in this reporting package complies with the
RTS on ESEF.
We performed our examination in accordance with Dutch law, including Dutch Standard 3950N ‘Assurance-opdrachten inzake het voldoen aan de
criteria voor het opstellen van een digitaal verantwoordingsdocument’ (assurance engagements relating to compliance with criteria for digital reporting).
Our examination included among others:
■ obtaining an understanding of the Group’s financial reporting process, including the preparation of the reporting package;
■ identifying and assessing the risks that the Annual Integrated Report does not comply in all material respects with the RTS on ESEF and
designing and performing further assurance procedures responsive to those risks to provide a basis for our opinion, including:
■ 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 have been prepared in accordance with the technical specifications as included in the
RTS on ESEF;
■ examining the information related to the 2024 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.
Description of responsibilities regarding the financial statements
Responsibilities of the Executive Board for the financial statements
The Executive Board is responsible for the preparation and fair presentation of the financial statements in accordance with EU-IFRS and with Part 9 of
Book 2 of the Dutch Civil Code. Furthermore, the Executive Board is responsible for such internal control as the Executive Board determine 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 Executive Board is responsible for assessing the Group’s and the Company’s ability to
continue as a going concern. Based on the financial reporting frameworks mentioned, the Executive Board should prepare the financial statements
using the going concern basis of accounting, unless the Executive Board either intends to liquidate the Company or to cease operations or has no
realistic alternative but to do so.
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INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS
The Executive Board should disclose events and circumstances that may cast significant doubt on the Company’s ability to continue as a going
concern in the financial statements.
The Supervisory Board is responsible for overseeing the Company’s financial reporting process.
Our responsibilities for the audit of the financial statements
Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufficient and appropriate audit evidence for our opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material errors and fraud during our
audit.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements. The materiality affects the nature, timing and extent of our
audit procedures and the evaluation of the effect of identified misstatements on our opinion.
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 included among others:
■ 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 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 Group’s and the Company’s internal control;
■ evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the
Executive Board;
■ concluding on the appropriateness of the Executive Board use of the going concern basis of accounting, and based on the audit evidence obtained,
whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s and 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. However, future events or conditions may cause a 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.
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223
INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS
We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings,
including any significant findings in internal control that we identify during our audit. In this respect we also submit 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 Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence, and to
communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the Audit Committee, we determine the key audit matters: those matters that were of most significance in the
audit of the financial statements. 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.
Rotterdam, 28 February 2025
Forvis Mazars Accountants N.V.
M. Vazel RA
Annual Integrated Report 2024
224
LIMITED ASSURANCE REPORT OF THE INDEPENDENT AUDITOR ON THE SUSTAINABILITY STATEMENTS
To: the shareholders and Supervisory Board of Kendrion N.V.
Our conclusion
We have performed a limited assurance engagement on the sustainability statements for 2024 of Kendrion N.V. based in Amsterdam, The Netherlands
(hereinafter: the company) of the accompanying management report including the information incorporated in the sustainability statements by reference
(hereinafter: the sustainability statement).
Based on our procedures performed and the assurance evidence obtained, nothing has come to our attention that causes us to believe that the
sustainability statement is not, in all material respects:
■ prepared in accordance with the European Sustainability Reporting Standards (ESRS) as adopted by the European Commission and in accordance
with the double materiality assessment process carried out by the company to identify the information reported pursuant to the ESRS; and
■ compliant with the reporting requirements provided for in Article 8 of Regulation (EU) 2020/852 (Taxonomy Regulation).
Basis for our conclusion
We have performed our limited assurance engagement on the sustainability statement in accordance with Dutch law, including Dutch Standard 3810N,
“Assurance-opdrachten inzake duurzaamheidsverslaggeving” (Assurance engagements relating to sustainability reporting) which is a specified Dutch
standard that is based on the International Standard on Assurance Engagements (ISAE) 3000 (Revised) ’Assurance engagements other than audits or
reviews of historical financial information’.
Our responsibilities in this regard are further described in the section ‘Our responsibilities for the limited assurance engagement on the sustainability
statement’ of our report.
We are independent of the company in accordance with, the Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten (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 for
Professional Accountants). The ViO and VGBA are at least as demanding as the International code of ethics for professional accountants (including
International independence standards) of the International Ethics Standards Board for Accountants (the IESBA Code).
We believe that the assurance evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion.
Emphasis of matters
The sustainability statement has been prepared in a context of new sustainability reporting standards, requiring entity-specific interpretations and
addressing inherent measurement or evaluation uncertainties. In this context, we want to emphasize the following matters:
Annual Integrated Report 2024
225
LIMITED ASSURANCE REPORT OF THE INDEPENDENT AUDITOR ON THE SUSTAINABILITY STATEMENTS
Emphasis on the most significant uncertainties affecting the quantitative metrics and monetary amounts
We draw attention to sections ‘General basis of preparation’ (on page 44) and ‘Key figures overview (on pages 61-64)’. The Key figures overview
describes the metrics with respect to the continued business and the divested automotive business in the sustainability statement that identifies the
quantitative metrics and monetary amounts that are subject to a high level of measurement uncertainty and discloses information about the sources of
measurement uncertainty and the assumptions, approximations and judgements the company has made in measuring these in compliance with the
ESRS.
The comparability of sustainability information between entities and over time may be affected by the lack of historical sustainability information in
accordance with the ESRS and by the absence of a uniform practice on which to draw, to evaluate and measure this information. This allows for the
application of different, but acceptable, measurement techniques, especially in the initial years.
Emphasis on the double materiality assessment process
We draw attention to section Double materiality assessment (on pages 48-51) in the sustainability statement. This disclosure explains future
improvements in the ongoing due diligence and double materiality assessment process, including robust engagement with affected stakeholders. Due
diligence is an on-going practice that responds to and may trigger changes in the company’s strategy, business model, activities, business relationships,
operating, sourcing and sales contexts. The double materiality assessment process may also be impacted in time by sector-specific standards to be
adopted. The sustainability statement may not include every impact, risk and opportunity or additional entity-specific disclosure that each individual
stakeholder (group) may consider important in its own particular assessment.
Comparative information not subject to assurance procedures
The 2024 sustainability statement is the first sustainability statement prepared in accorandance with the European Sustainability Reporting Standards
(ESRS) as adopted by the European Commission. Sustainability information for 2023 (and earlier), was prepared in accordance with the specific criteria
as included in the ‘Criteria’ section of the 2023 report. Consequently, we do not provide any assurance on the comparative information and thereto
related disclosures in the sustainability statement for 2023 (and earlier).
Limitations to the scope of our assurance engagement
In reporting forward-looking information in accordance with the ESRS, management of the company is required to prepare the forward-looking
information on the basis of disclosed assumptions about events that may occur in the future and possible future actions by the company. The actual
outcome is likely to be different since anticipated events frequently do not occur as expected. Forward-looking information relates to events and actions
that have not yet occurred and may never occur. We do not provide assurance on the achievability of this forward-looking information.
Our conclusion is not modified in respect of these matters.
Annual Integrated Report 2024
226
Responsibilities of the Executive Board and the Supervisory Board for the sustainability statement
Management is responsible for the preparation of the sustainability statement in accordance with the ESRS, including the double materiality assessment
process carried out by the company as the basis for the sustainability statement and disclosure of material impacts, risks and opportunities in
accordance with the ESRS. As part of the preparation of the sustainability statement, the Executive Board is responsible for compliance with the
reporting requirements provided for in Article 8 of Regulation (EU) 2020/852 (Taxonomy Regulation).
The Executive Board is also responsible for selecting and applying additional entity-specific disclosures to enable users to understand the company’s
sustainability-related impacts, risks or opportunities and for determining that these additional entity-specific disclosures are suitable in the circumstances
and in accordance with the ESRS.
Furthermore, the Executive Board is responsible for such internal control as it determines necessary to enable the preparation of the sustainability
statement that is free from material misstatement, whether due to fraud or error.
The Supervisory Board is responsible for overseeing the sustainability reporting process including the double materiality assessment process carried out
by the company.
Our responsibilities for the limited assurance engagement on the sustainability statement
Our responsibility is to plan and perform the limited assurance engagement in a manner that allows us to obtain sufficient appropriate assurance
evidence for our conclusion.
Our assurance engagement is aimed to obtain a limited level of assurance that the sustainability statement is free from material misstatements. The
procedures vary in nature and timing from, and are less in extent than for a reasonable assurance engagement. Consequently, the level of assurance
obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance
engagement been performed.
We apply the applicable quality management requirements pursuant to the Nadere voorschriften kwaliteitsmanagement (NV KM, regulations for quality
management and the International Standard on Quality Management (ISQM) 1, and accordingly maintain a comprehensive system of quality
management including documented policies and procedures regarding compliance with ethical requirements, professional standards and other relevant
legal and regulatory requirements.
Our limited assurance engagement included among others:
■ Performing inquiries and an analysis of the external environment and obtaining an understanding of relevant sustainability themes and issues, the
characteristics of the company, its activities and the value chain and its key intangible resources in order to assess the double materiality
assessment process carried out by the company as the basis for the sustainability statement and disclosure of all material sustainability-related
impacts, risks and opportunities in accordance with the ESRS.
LIMITED ASSURANCE REPORT OF THE INDEPENDENT AUDITOR ON THE SUSTAINABILITY STATEMENTS
Annual Integrated Report 2024
227
■ Obtaining through inquiries a general understanding of the internal control environment, the company’s processes for gathering and reporting entity-
related and value chain information, the information systems and the company’s risk assessment process relevant to the preparation of the
sustainability statement and for identifying the company’s activities, determining eligible and aligned economic activities and prepare the disclosures
provided for in Article 8 of Regulation (EU) 2020/852 (Taxonomy Regulation), without obtaining assurance information about the implementation, or
testing the operating effectiveness, of controls.
■ Assessing the double materiality assessment process carried out by the company and identifying and assessing areas of the sustainability
statement, including the disclosures provided for in Article 8 of Regulation (EU) 2020/852 (Taxonomy Regulation) where misleading or unbalanced
information or material misstatements, whether due to fraud or error, are likely to arise (‘selected disclosures’). We designed and performed further
assurance procedures aimed at assessing that the sustainability statement is free from material misstatements responsive to this risk analysis.
■ Considering whether the description of the double materiality assessment process in the sustainability statement made by the Executive Board
appears consistent with the process carried out by the company;
■ Performing analytical review procedures on quantitative information in the sustainability statement, including consideration of data and trends
(optioneel: in the information submitted for consolidation at corporate level.);
■ Assessing whether the company’s methods for developing estimates are appropriate and have been consistently applied for selected disclosures.
We considered data and trends, however, our procedures did not include testing the data on which the estimates are based or separately
developing our own estimates against which to evaluateestimates;
■ Analysing, on a limited sample basis, relevant internal and external documentation available to the company (including publicly available information
or information from actors throughout its value chain) for selected disclosures; and
■ Reading the other information in the Annual Integrated Report to identify material inconsistencies, if any, with the sustainability statement.
■ Considering whether:
■ the disclosures provided to address the reporting requirements provided for in Article 8 of Regulation (EU) 2020/852 (Taxonomy Regulation) for
each of the environmental objectives
■ reconcile with the underlying records of the company and are consistent or coherent with the sustainability statement; and
■ appear reasonable, in particular whether the eligible economic activities meet the cumulative conditions to qualify as aligned and whether the
technical screening criteria are met.
■ the key performance indicators disclosures have been defined and calculated in accordance with the Taxonomy reference framework as defined
in Appendix 1 Glossary of Terms of the CEAOB Guidelines on limited assurance on sustainability reporting adopted on 30 September 2024 ,
and in compliance with the reporting requirements provided for in Article 8 of Regulation (EU) 2020/852 (Taxonomy Regulation), including the
format in which the activities are presented.
■ Considering the overall presentation, structure and the fundamental qualitative characteristics of information (relevance and faithful
representation: complete, neutral and accurate) reported in the sustainability statement, including the reporting requirements provided for in
Article 8 of Regulation (EU) 2020/852 (Taxonomy Regulation); and
■ Considering, based on our limited assurance procedures and evaluation of the assurance evidence obtained, whether the sustainability
statement as a whole, is free from material misstatements and prepared in accordance with the ESRS.
Rotterdam, 28 February 2025
Forvis Mazars Accountants N.V.
M. Vazel RA
LIMITED ASSURANCE REPORT OF THE INDEPENDENT AUDITOR ON THE SUSTAINABILITY STATEMENTS
Annual Integrated Report 2024
228
Industrial
Industrial Actuators and Controls (Robert Lewin) Managing Director
Kendrion (Donaueschingen/Engelswies) GmbH, Donaueschingen, Germany Robert Lewin
Kendrion (China) Co. Ltd, Suzhou, P.R. China Telly Kuo
Kendrion (Mishawaka) LLC, Mishawaka, USA Corey Hurcomb
Kendrion Industrial (Sibiu) S.R.L., Sibiu, Romania Mihai Petculescu
Kendrion (Linz) GmbH, Linz, Austria Christian Edelmaier
Kendrion Kuhnke Automation GmbH, Malente, Germany Robert Lewin
Kendrion Kuhnke (Sweden) AB, Kristianstad, Sweden Niklas Sjöström
3 T B.V., Enschede, the Netherlands Michiel Bloemen
Industrial Brakes (Olaf Detlef) Managing Director
Kendrion (Villingen) GmbH, Villingen-Schwenningen, Germany Robert Lewin
Kendrion (China) Co. Ltd, Suzhou, P.R. China Telly Kuo
Kendrion (Mishawaka) LLC, Mishawaka, USA Corey Hurcomb
Kendrion INTORQ GmbH, Aerzen, Germany Lars Knoke
INTORQ (Shanghai) Co. Ltd, Shanghai, P.R. China Telly Kuo
Kendrion (Atlanta) Inc., Atlanta, USA Olaf Detlef
INTORQ India Private Limited, Pune, India Aniket Gujrathi
Other Business (Robert Lewin) Managing Director
Kendrion (China) Co. Ltd, Suzhou, P.R. China Telly Kuo
Kendrion Automotive (Sibiu) S.R.L, Sibiu, Romania Christian Fritz
Kendrion Kuhnke Automotive GmbH, Malente, Germany Robert Lewin
Kendrion N.V. has, directly or indirectly, a 100% interest in all subsidiaries.
PRINCIPAL SUBSIDIARIES
As at 31 December 2024
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229
Blasio Grundstückverwaltungsgesellschaft mbh & Co. Vermietungs KG, Mainz, Germany
Combattant Holding B.V., De Bilt, the Netherlands
Kendrion OG GmbH (previously Kendrion Eibiswald GmbH), Linz, Austria
INTORQ Beteiligungs GmbH, Aerzen, Germany
Kendrion FAS Controls Holding GmbH, Villingen-Schwenningen, Germany
Kendrion Finance B.V., Zeist, the Netherlands
Kendrion Holding Germany GmbH, Markdorf, Germany
Kendrion Holding USA Inc., Indianapolis, USA
Kendrion IP Management GmbH, Malente, Germany
Kendrion Kuhnke GmbH, Malente, Germany
Kendrion Marketing B.V., Zeist, the Netherlands
Kendrion Toluca, SA de CV, Mexicaltzingo, Mexico
Kendrion (UK) Ltd., Bradford, United Kingdom
Landfort I B.V., Zeist, the Netherlands
Kendrion N.V. has, directly or indirectly, a 100% interest in all subsidiaries.
Other Holding and dormant entities
As at 31 December 2024
PRINCIPAL SUBSIDIARIES
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230
GLOSSARY – DEFINITIONS OF NON IFRS FINANCIAL MEASURES
Added value is a non-IFRS financial measure, which is defined
as total revenue and other income plus changes in inventory
of finished goods and work in progress and subtracted by raw
materials and subcontracted work. Added value is a measure
of the group’s ability to generate a variable profit contribution
on its revenue that is sufficient to absorb the total staff and
other operating expenses. It is an important factor is assessing
to what extent increasing or decreasing revenue volumes will
contribute to the group’s profit.
EBITA is a non IFRS financial measure, which is defined
as profit for the period before income tax expense, finance
income, finance expense, share of profit or loss of an associate
and amortization of other intangible fixed assets. EBITA is a
measure of the group’s ability to realize a positive return on the
group’s operations and continue to provide shareholder returns.
EBITDA is a non IFRS financial measure which is defined
as profit for the period before income tax expense, finance
income, finance expense, share of profit or loss of an associate,
depreciation and amortization. EBITDA is a measure of the
group’s ability to continue to invest in the group’s operations
and provide shareholder returns.
Free cash flow is a non IFRS financial measure that is defined
as cash from operating activities less cash from investing
activities. Free cash flow is a measure of cash flow which is
available for repayment of outstanding interest-bearing debt or
dividend to the shareholders.
Invested capital is a non IFRS financial measure that is defined
as the sum of property plant and equipment, intangible assets,
other fixed assets and net working capital. Invested capital is
a measure to assess the amount of equity and interest-bearing
debt the company has invested in assets and is an important
measure for investors to assess how well a company is using
its financial resources to generate shareholder returns. Invested
capital is a measure widely used by investors and security
analysts to evaluate a group’s profitability relative to other
investment opportunities.
Leverage ratio is a non IFRS financial measure that is defined
as net debt divided by EBITDA. The leverage ratio is a measure
to evaluate the credit worthiness of the group and the ability
of the group to continue to fund its operations with debt.
The leverage ratio is widely used by investors, analysts,
lenders and others to assess the groups credit worthiness in
comparison to other industrial and automotive manufacturing
companies and in relation to the financial covenant agreed in
the group’s financing arrangement which its main lenders.
Net debt is a non IFRS financial measure that is defined as
bank overdraft, current and non-current loans and borrowings
subtracted by cash and cash equivalents. Net debt is a
measure in determining the group’s financial position.
In comparison to the available credit facilities, the total net debt
is an important factor in assessing the group’s liquidity and
in combination which the group’s EBITDA, the net debt is an
important factor in determining the group’s credit worthiness
and ability to fund future investments.
Normalized EBITA is non IFRS financial measures, which is
defined as EBITA before restructuring expense and other
adjustments not related to the group’s normal course of
business including but not limited to gains or losses on
divestitures, transaction costs related to business combinations
and impairments. Normalized EBITA is a measure of the group’s
ability to realize a positive return on the core operations and
continue to provide shareholder returns. We use normalized
EBITA in assessing the effectiveness of business strategies.
In addition to its use by management, we also believe
normalized EBITA is a measure widely used by securities
analysts, investors and others to evaluate financial performance
of the group relative to other industrial and automotive suppliers.
Normalized EBITDA is a non IFRS financial measure which
is defined as EBITDA before restructuring expense and
other adjustments not related to the group’s normal course
of business including but not limited to gains or losses on
divestitures, transaction costs related to business combinations
and impairments. Normalized EBITDA is a measure of the
group’s ability to continue to invest in the operations and provide
shareholder returns based on the core operations. We use
normalized EBITDA in assessing the effectiveness of business
strategies, evaluating and pricing potential acquisitions and as
a factor in management incentive decisions. In addition to its
use by management, we also believe normalized EBITDA is
a measure widely used by securities analysts, investors and
others to evaluate financial performance of the group relative to
other industrial and automotive suppliers.
Normalized effective tax rate is a non IFRS measure that is
defined as reported income tax expenses before adjustments
not related to the group’s normal course of business, including
but not limited to income tax expense on restructuring costs
and impairments, divided by normalized profit before tax which
is defined as profit before tax before adjustments not related to
core operations, including but not limited to restructuring costs
and impairments. Normalized effective tax rate is used to assess
the group’s tax expense in relation to the profit before tax from
its core activities. The normalized effective tax rate is used to
evaluate the effective tax rate relative to previous periods and
other companies.
Normalized free cash flow is a non IFRS financial measure that
is defined as free cash flow before cash flow related to
restructuring expense and other adjustments that are not related
to the group’s core operations, including but not limited to
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231
acquisitions and divestitures. Normalized free cash flow is
a measure of cash flow from the group’s core activities which is
available for repayment of outstanding interest-bearing debt or
dividend to the shareholders. We use normalized free cash flow
as a factor in management incentive decisions. In addition to its
use by management, we also believe normalized free cash flow
is a measure widely used by securities analysts and investors
and others to evaluate the value of the group.
Normalized invested capital is a non IFRS measure that is
defined as invested capital adjusted for items in the statement
of financial position that are considered not to be part of the
group’s normal course of business, including but not limited
to provisions or liabilities related to restructurings. Normalized
invested capital is used to assess the return the company
generates on the amount the company has invested in assets
related to its core operations and is a measure for investors
to assess how well a company is using its financial resources
to generate shareholder returns.
Normalized interest charges is a non IFRS measure that is
defined as financing costs before adjustments not related to
the group’s normal course of business including but not limited
to gains or losses on the recycling of currency translation
results previously recorded in equity upon the liquidation of
a legal entity. Normalized interest charges is used to assess
the amount of net financing costs recognized related to the
core operations of the group. Normalized interest charges
is used to be able to compare interest charges to previous
reporting periods and other companies.
Normalized net profit before amortization is a non IFRS
measure that is defined as profit for the period before
amortization and restructuring expense and other adjustments
not related to the group’s core operations including but not
limited to gains or losses on divestitures, transaction costs
related to business combinations and impairments. Normalized
net profit before amortization is a measure of the group’s ability
to realize a positive return on core operations and continue to
provide shareholder returns when excluding any profit impact
from amortizing intangibles arising from business combinations.
The measure is used by management, investors and security
analysts in order to evaluate the shareholder return relative to
companies that do not include business combinations.
Normalized staff and other operating expense is a non
IFRS measure that is defined as operating expense before
restructuring expense and other adjustments not related to
the group’s normal course of business including but not limited
to gains or losses on divestitures, transaction costs related to
business combinations and impairments. Normalized operating
expense is used to assess the amount of operating expense
recognized related to the core operations of the group.
Normalized operating expense is used to be able to evaluate
expenses to previous reporting periods and other companies.
Normalized working capital is a non IFRS measure that is
defined as working capital adjusted for items in the statement
of financial position that are considered not to be part of the
group’s core operations, including but not limited to provisions
or liabilities related to restructurings. Normalized working
capital is used to assess the amount of cash the company has
invested in short term and non-interest-bearing assets and
liabilities in order to run its core operations.
Organic growth is a non IFRS financial measure that is defined
as revenue in the period under review divided by the revenue
in the previous period, excluding revenue that is attributable
to a business combination in one of both periods and/or
the revenue contribution that attributable to a divestiture in one
of both periods. Organic growth is a measure to which extent
the group has been able to increase its revenue compared
to the previous period on a comparable basis and therefore
excluding the impact from acquisitions. Organic growth is
one of the groups long term financial targets. We use organic
growth in assessing the effectiveness of business strategies.
In addition to its use by management, we also believe organic
growth is a measure widely used by securities analysts,
investors and others to evaluate the success of the company’s
commercial strategies and effectiveness relative to other
industrial and automotive suppliers.
ROI or Return On Invested Capital is a non IFRS financial
measure that is defined as EBITA dividend by the sum of
property plant and equipment, intangible assets, other fixed
assets and net working capital subtracted with the amount
of goodwill and other intangible assets arising from business
combinations. ROIC is a measure that assesses the result
from operations is generated per currency equivalent that the
group has invested in property plant and equipment and other
net assets that are part of the group’s operations. ROIC is an
important factor in assessing relative profitability and used as
a factor in management incentive decisions. Besides the use by
management, we believe ROIC is widely use by investors and
securities analysts to assess the performance of the group in
comparison to other manufacturing companies or alternative
investment propositions.
Solvency is a non IFRS financial measure that is defined as total
equity divided by the sum of total equity and total liabilities.
Solvency is a measure that assesses the portion of the total
assets that is funded by equity. We use solvency as a measure
of financial position and credit worthiness. In addition to its use
by management we believe solvency is a measure widely use
by lenders and analysts to evaluate the credit worthiness of
the group.
GLOSSARY – DEFINITIONS OF NON IFRS FINANCIAL MEASURES
Annual Integrated Report 2024
232
RECONCILIATION OF NON IFRS FINANCIAL MEASURES
Measures related to the statement of profit and loss
Organic growth (revenue)
EUR million - unless stated otherwise 2024 2023
1
Reported revenue 301.5 309.0
Exclude: currency effects on revenue 0.9 –
Normalized revenue (excl. currency effects)
302.4 309.0
Organic growth -2.1%
Added value
EUR million 2024 2023
1
Reported total revenue and other income 303.2 309.1
less: Reported changes in inventories of finished goods and
work in progress
2.0 (0.3)
less: Reported raw materials and subcontracted work (151.6) (151.4)
Reported added value 153.6 157.4
Reported added value margin % 50.3% 51.0%
Normalization of other costs outside the normal course of business 1.2 –
Added value
154.8 157.4
Added value margin % 50.7% 51.0%
Normalized staff, impairments and other operating expenses
EUR million 2024 2023
1
Reported staff costs 94.3 97.8
Reported impairments of fixed assets 1.2 0.0
Reported other operating expenses 24.2 20.1
Reported staff, impairments and other operating expenses
119.7 117.9
Normalization of restructuring charges (0.7) (1.7)
Normalization of impairments PP&E, goodwill and other intangibles (1.2) (0.0)
Normalization of other (costs) and benefits outside the normal course of
business
– (0.2)
Normalized staff, impairments and other operating expenses
117.8 116.0
Currency effects 0.4 1.6
Normalized staff, impairments and other operating expenses
(excl. currency effects)
118.2 117.6
1
Restated. Reference is made to note 9 of Financial Statements
Annual Integrated Report 2024
233
Bridge from EBITDA to normalized net profit before amortization
EUR million 2024 2023
1
Reported result before net finance costs 14.8 22.2
Reported depreciation and amortization 19.1 17.3
Reported operating result before depreciation &
amortization (EBITDA)
33.9 39.5
less: Depreciation on PP&E and amortization on non-PPA
related intangibles
(15.9) (14.1)
Reported operating result before amortization (EBITA)
18.0 25.4
Normalization of costs and (benefits) related to:
Restructuring measures - Industrial 0.8 1.5
Restructuring measures - Other 0.0 0.2
Impairments PP&E - Industrial 0.1 0.0
Impairments PP&E - Other 0.1 –
Impairments goodwill and other intangbles - Other 1.0 –
Other costs / (benefits) outside the normal course of business
- Other
1.1 0.2
Total Normalizations
3.1 1.9
Normalized EBITDA 37.0 41.4
Normalized EBITDA margin % 12.3% 13.4%
Normalized EBITA
21.1 27.3
Normalized EBITA margin % 7.0% 8.8%
Reported amortisation on PPA related intangibles (3.2) (3.2)
Reported net finance costs (6.0) (6.1)
Reported share profit or loss of an associate (0.1) –
Other normalizations of net finance costs – (0.0)
Normalized profit before income tax
11.8 18.0
EUR million 2024 2023
1
Reported income tax expense (2.6) (4.3)
Normalization related to tax audits 0.7 0.6
Normalization related to deferred income tax adjustment (0.1) (0.8)
Impact costs / (benefits) outside the normal course of business
on income tax expense
(0.7) (0.6)
Amortization after tax 2.4 2.4
Net profit before amortization from discontinued operations 0.3 (1.4)
Normalized net profit for the period before amortization
11.8 13.9
Measures related to the Statement of financial position
Invested capital at 31 December
EUR million 2024 2023
Property, plant and equipment 96.0 134.5
Intangible assets 112.8 125.8
Net working capital 50.5 63.9
Other fixed assets 3.9 1.1
Invested capital
263.2 325.3
Goodwill and other intangibles related to acquisitions (100.6) (107.8)
Operating invested capital
162.6 217.5
Impact costs / (benefits) outside the normal course of business
on invested capital
13.1 1.4
Normalized invested capital
175.7 218.9
1
Restated. Reference is made to note 9 of Financial Statements
RECONCILIATION OF NON IFRS FINANCIAL MEASURES
Annual Integrated Report 2024
234
Net Debt
EUR million - unless stated otherwise 2024 2023
Total interest bearing loans 111.9 165.6
less: Cash and cash equivalents (8.5) (20.6)
Net Debt
103.4 145.0
Net working capital at 31 December
EUR million 2024 2023
Inventories 58.5 87.4
Trade and other receivables, tax receivable and assets clasified
as held for sale
63.7 72.8
Less: Trade and other payables, tax payables, current provision (71.7) (96.3)
Net working capital
50.5 63.9
Impact one-off costs and benefits on working capital 1.1 1.7
Normalized working capital
51.6 65.6
As % of revenue 17.1% 12.6%
Measures related to the Statement of cash flows
Free cash flow
EUR million 2024 2023
Net cash flow from operating activities 18.5 36.4
Net cash flow from investing activities 25.8 (29.6)
Free cash flow
44.3 6.8
Normalizations 47.3 (4.5)
Normalized free cash flow
(3.0) 11.3
Ratios
Return on Investment % (ROI)
EUR million - unless stated otherwise 2024 2023
Normalized EBITA 21.1 29.5
Normalized Invested capital 175.7 218.9
Return on Investment % (ROI)
12.0% 13.5%
Solvency
EUR million - unless stated otherwise 2024 2023
Total equity 158.5 172.0
Total assets 364.8 462.3
Solvency %
43.4% 37.2%
Normalized effective tax rate
EUR million - unless stated otherwise 2024 2023
1
Reported income tax expense (2.6) (4.3)
Normalization related to tax audits 0.7 0.6
Normalization related to deferred income tax adjustment (0.1) (0.8)
Impact costs / (benefits) outside the normal course of business
on income tax expense
(0.7) (0.6)
Normalized income tax expense
(2.7) (5.1)
Normalized profit before tax 11.8 18.0
Normalized effective tax rate %
22.9% 28.3%
1
Restated. Reference is made to note 9 of Financial Statements
RECONCILIATION OF NON IFRS FINANCIAL MEASURES
Contact information
Any questions or comments about this Annual Integrated Report
or Kendrion’s activities can be raised with:
Investor Relations
Vesta Building 5
th
floor
Herikerbergweg 213
1101CN Amsterdam, Netherlands
Phone: + 31 85 073 15 00
Email: ir@kendrion.com
www.kendrion.com
Kendrion N.V.
Euronext code 0000383511
ISIN code 0000383511
Chamber of Commerce 30113646