Supporting the energy transition
Financial-Social-Environmental Annual Report 2022 of Sif Holding N.V.
Highlights 2022
People Planet Profit
Safety
6.50 LTIF
Contribution
€130.5 mln
Gross CO2 emission
10,422 mt
Adjusted EBITDA
€41.8 mln
Participation in projects resulting in
1,954 MW
renewable energy capacity
Adjusted ROACE
43.6%
(*) reference is made to the section Reporting Criteria of the annual report for further details
2022Sif Annual Report
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2022Sif Annual Report
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Table of contents
Highlights 2022
3 Message from our CEO
8 Key figures 2018 - 2022
13 About Sif
13 > our spirit
13 > our history and present profile
14 > vision and mission: supporting
the energy transition
14 > our strategy and objectives
16 The Supply Chain
for Offshore Wind Energy
31 Stakeholder- interaction
36 Our Performance in 2022
36 > the European Green
Deal: EU taxonomy and CSRD
44 > our contribution to
sustainable development goals
44 > operational, financial, social
and environmental performance
58 Corporate governance
64 > composition of the Executive Board
65 > composition of the management team
66 > risk and opportunity management
66 > swot analysis
75 > business integrity and compliance
77 Supervisory Board report
84 Remuneration report
90 Financial Statements
151 Other Information
151 > articles of association
related to profit appropriation
151 > corporate information
153 > independent auditor’s report
153 > report on the audit of the financial
statements 2022 included in the
annual report
153 > information in support of our opinion
158 > report on other information
included in the annual report
158 > report on other legal and
regulatory requirements and ESEF
159 > description of responsibilities
regarding the financial statements
161 > limited assurance report of the
independent auditor on Sif’s selected
ESG performance indicators
164 Reporting Criteria
174 Glossary
2022Sif Annual Report
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Message from our CEO
Dear Reader,
As was the case with many other companies, 2022 was a turbulent year for Sif.
During the year under review, we had to manage the ongoing impact of the
COVID-19 pandemic and the effects of the war in Ukraine on the delivery of our
orderbook. Also in 2022, we further developed our investment plans to help us
deliver on our strategy of supporting and accelerating the growth of offshore wind
power generation. We see offshore wind as a key driver to the world’s energy
transition and as a meaningful contributor towards meeting the goal of limiting
global warming to no more than 1.5 degree Celsius as set out in the Paris Climate
Agreement.
I would like to thank all of my Sif colleagues for their hard work and dedication, often
under dynamic circumstances, and for their unfaltering focus on our purpose and
values.
Living our purpose
Enabling and accelerating the energy transition by designing and manufacturing the
foundations for offshore wind farms to serve our customers, communities, the
planet and its future inhabitants, is what drives us forward and guides the decisions
we make. We do however feel that the world is not moving fast enough with the
energy transition process. In recent decades we have seen clear signs of climate
change and experienced the consequences ensuing from the world’s dependence on
just a few supplying countries of fossil fuels in times of geopolitical instability.
Recent developments have increased the need to accelerate the energy transition by
means including increasing offshore wind capacity from 65 GW in 2022 to more
than 200 GW in 2030. Acceleration of the energy transition can be realized by
shortening the development procedures of offshore wind farms that currently take
7 to 11 years and by developing the entire Offshore Wind supply chain and not only
larger offshore turbines. Our purpose is to help bring about and drive this
acceleration by expanding our manufacturing facilities. In parallel we are working on
measures to reduce the environmental impact of our own activities. We continue to
engage with stakeholders both inside and outside the business to explain our
company’s strategy and targets, to align the activities of the whole supply chain and
to address any concerns and ambitions stakeholders may have.
This is also reflected in the performance goals we have set for our key sustainability
measures. A significant part of the Executive Board’s remuneration depends on
progress made on carbon and waste reduction in our own operations and on our
safety performance.
2022Sif Annual Report
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Picture: development of offshore wind turbines and foundations over the past
20 years
Yielding offshore wind capacity
The capacity of individual offshore wind turbines has increased from 2 MW in the
early 2000s to 14 MW in 2022 with diameters of monopile foundations increasing
from 4 meters to almost 9 meters during the same period. In 2000, a turbine
installed on a monopile could supply electricity to 2,000 households, whereas this
figure rose to 14,000 households in 2022. The timeline on top of this page illustrates
the evolution of turbines and monopiles. There are now reports of turbines being
developed and tested in the 15 to 18 MW range. If and when even bigger turbines
will be realized, is an increasingly important topic given the high investment impact
and challenging financial performance reported by various offshore equipment
manufacturers. At Sif, we favor a stabilization at the 15-18 MW level in order to be
able to maximize the ramp up of offshore wind and to enable the entire supply chain
to efficiently align their operations to this turbine size. The increasing power range of
turbines has given rise to the project for the expansion of our manufacturing
facilities (which is known as P11). Following an extensive dialogue with our
customers and suppliers, we have presented our plans for future manufacturing to
financial stakeholders. Shortly after the closing of 2022, more than 3.5 years after
the start of P11, we were able to take a final investment decision and share our
plans with the markets. Our Rotterdam facilities will be expanded in order to be able
to manufacture bigger diameter monopiles at the same Takt Time. Based on
monopiles with a weight of 2,500 ton and a diameter of 11 meters we will be able to
manufacture 200 monopiles per year. This is unique in the market and we will
further strengthen our position as the leading supplier of foundations for the
offshore wind industry. Assuring this high output volume is a booster for the energy
transition. Assuming an average of 16 MW turbines for the period until 2030, Sif can
enable an annual addition of potentially just over 3 GW offshore wind capacity or
a total of more than 22 GW by 2030. The metrics, financials and managerial
implications of the €328 million manufacturing expansion investment are explained
in the factsheet on page 24 of this annual report. Ambitions for offshore wind are
clearly also growing in other parts of the world. For the Asian market, we signed
a memorandum of understanding on a license agreement in 2022 with South Korea
based GS Entec to assist them in converting their existing factory into a monopile
production plant. First deliveries by GS Entec are expected late 2023.
2022Sif Annual Report
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During the course of 2022, we were honored to host a large group of interested
persons and organizations at our Maasvlakte production site. The guests included
the Dutch Minister for Climate and Energy, Mr. Rob Jetten, who showed keen
interest in how Sif could further contribute to the growth of offshore wind energy.
Picture: visit of Minister for Climate and Environmental Policy, Rob Jetten to
Maasvlakte 2, Rotterdam
Minimizing our own environmental and safety footprint
While ramping up the energy transition is the longer-term objective, it is equally
important that we remain focused on reducing the direct impact of our operational
activities on the environment year-on-year and on the side-effects of offshore wind
installations on sea life and the preservation and improvement of biodiversity. How
can we limit nitrogen deposition in the environment and protected nature areas?
How can we limit our carbon dioxide footprint? How can we improve the circularity
of our products and production? All these topics are being addressed either through
investments in specific equipment to replace high carbon and nitrogen emission
sources, such as our investment in the replacement of gas pre-heating by electrical
induction pre-heating or through investment in research on alternative technologies
in association with industry partners. Examples of this are the cradle-to-cradle
circularity study on the future decommissioning challenges of wind farms and the
feasibility study on producing green hydrogen at sea (the AmpHytrite project).
Together with our partner Pondera, we hosted General Electrics at our
Maasvlakte2 site and invited them to install the Haliade X pilot wind turbine which,
on its own, can potentially supply more than twice Sif’s total electricity demand for
the two combined production locations.
Likewise, it is important that we reduce the direct impact of our operational activities
on the health and safety of the people working with and for us. The gas explosion
we had in August 2022 shocked us and prompted us to an integral safety risk
inventory to prevent repetition of such or similar events.
Offshore wind has formed the core of our business since 2005. Our products and
services enable us to help bring about the required acceleration of the energy
transition. Yttre Stengrund, for which we delivered our first monopiles in 2000, has
now been decommissioned. Other projects dating back to that period are
approaching the end of their technical and economic lifetime. As many more
projects have been built over the years, we expect the replacement and
decommissioning market to grow from 2030 onwards.
2022Sif Annual Report
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Consistently and safely delivering our orderbook
Alongside the development of our P11 investment plan, we produced 130 monopiles
and 126 transition pieces, or 169 kton, in 2022, and delivered foundations for
1,954 MW of offshore wind (1,873 MW in 2021). That brings the total of green
electricity generated on Sif foundations to more than 14,700 MW.
Picture: artist’s impression of P11 expanded manufacturing facilities at Maasvlakte
2, Rotterdam
Foundations were manufactured or are in production for Hollandse Kust Noord,
Dogger Bank A and B, Maasvlakte 2 and pin piles for Aibel. Surging energy prices
had a serious impact on the production cost of these projects, which in turn
impacted our gross margin. Healthy margin contributions came from our marshaling
and logistics operations for Siemens. The company KCI the engineers made good
progress in increasing its Offshore Wind engineering services and recovered from
the COVID-19 dip in their traditional concept, system and detail engineering services.
All this developed in line with our guidance throughout the year. EBITDA adjusted for
expenses related to the research into and preparations for the P11 expansion plan is
reported at €41.8 million with contribution at €130.5 million. This resulted in a return
on average capital employed (adjusted for the effects of the expansion project for
production facilities) of 43.6%.
Our orderbook for 2023 is well filled with 221 kton. For 2024 and beyond, we foresee
monopile projects for increased turbine capacities, greater water depths and soil
conditions requiring larger diameters. This development is fully in line with our
expectations and explains why we embarked on a strategic analysis of what our
future production methodology and facilities should look like. With 441 kton, our
orderbook is well filled for the period 2024 and beyond. It includes the launching
capacity for the expanded manufacturing facilities.
We monitor and manage our operations based on a set of key performance
indicators, including safety statistics, personnel attendance and well being and
carbon footprint. Some of the non-financial indicators are included in the bonus
award program for executive management and are subject to limited assurance by
our auditor EY. Our key safety indicator – lost time injury frequency (“LTIF”) – is
6.50, which is worse compared to the 4.98 of 2021 and as such still a long way from
our target level of 1.5. The biggest impacting factor is the ever increasing seize and
weight ratio of our products whereas the overall basic safety awareness and
experience of employees has decreased. This has led to an adjusted and intensified
safety awareness program in the entire company. Owing to the negative effect of
the COVID-19 pandemic followed by the flu wave during the early months of 2022,
our absenteeism, at 7.9%, was higher than the 5.1% of the previous financial year.
The green electricity generated by the Haliade X at our Maasvlakte site
compensated part of the carbon emissions generated by our primary manufacturing
and logistical process. In addition to the non-financial performance indicators, we
look at financial indicators EBITDA, Contribution and Return on Average Capital
Employed.
2022Sif Annual Report
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’During the last two decades, we
have provided enough offshore
wind energy foundations to supply
the combined population of the
Netherlands and Belgium with
electricity.’
Personnel changes
All members of the Executive and Supervisory Boards are appointed for four years.
Executive Board member and CEO Fred van Beers was reappointed for a four-year
term until the Annual General Meeting of Shareholders in May 2026 following the
announcement by the Supervisory Board at the Annual General Meeting of
Shareholders in May 2022.
At the same meeting both Peter Visser and Peter Wit were reappointed as members
of the Supervisory Board for another four-year term. Peter Visser did not participate
in meetings of the Supervisory Board and Supervisory Board committees from
March 2022 for reasons of possible conflicting interests of his position as
a representative of our cornerstone shareholder with the investment plans P11.
Before March 2022 he only participated as long as no P11 related subjects were
discussed.
In line with the rotation schedule, André Goedée and Caroline van den Bosch will
resign at the closing of the Annual General Meeting of Shareholders in 2023. Both
are not available for reappointment. The Supervisory Board has decided to
commence the process of replacing them by two new board members. The
Supervisory Board, Executive Board and Works Council are grateful to Caroline and
André for their constructive and valuable contributions to the transformation of Sif
during their terms since 2016. In general, 2022 was a demanding and intense year
for all the Supervisory Board members due to their deep involvement in the plans for
P11 and the effects of geopolitics and COVID-19 on Sif.
Our strategic agenda for 2023
Now that the final investment decision for P11 has been taken and financing is fully
committed, our full focus is on executing the project, construction of which will
begin in April 2023 for delivery in the second half of 2024 to be fully operational from
early 2025 after test-runs in the second half of 2024. Once operational, we expect an
earn back period for the investment of max 4 years at EBITDA levels of €135 million
in 2025 and at least €160 million from 2026 onwards.
We will carefully oversee this complex execution process without losing focus on
our day-to-day business. At 221 kton for 2023, we have a major delivery challenge
ahead of us, also given the effects of high energy prices and continuing limited
workforce availability. Projects for 2023 mostly relate to Dogger Bank B, He Dreiht,
Noirmoutier and the start of Dogger Bank C. The start of building activities related to
the expansion of our facilities in Rotterdam will leave limited to no space for
marshaling activities. The loss of revenues from marshaling activities will be
compensated by higher production compared to 2022 and we expect adjusted
EBITDA in 2023 to arrive at the level of 2022.
All in all, we have exciting times ahead of us. This will demand our best efforts in
safety, project management, manufacturing and innovation. We are well aware of
the importance of our contribution to the energy transition, which requires tier-one
products and a proactive focus on sustainable manufacturing. We thank our
employees, suppliers, shareholders and customers for their solid support and
commitment during 2022. In the end, it is all about delivering today to allow for the
energy transition of tomorrow.
Fred van Beers, CEO
Roermond, the Netherlands,
29 March 2023
2022Sif Annual Report
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Key figures 2018 – 2022
X € 1,000 2022 2021 2020 2019 2018 Reference *
Revenue 374,543 422,541 335,433 325,600 235,140
Contribution 130,511 114,230 101,592 101,517 74,336 (a)
EBITDA 36,426 39,061 31,756 26,371 12,550 (b)
Adjusted EBITDA 41,792 39,434 31,756 26,371 12,550 (d)
EBITDA (ex IFRS 16) 22,121 33,474 25,189 22,038 12,550 (c)
Adjusted EBITDA (ex IFRS 16) 27,487 33,847 naf naf naf (e)
EBIT 12,200 17,349 11,408 9,164 (1,132) (f)
Adjusted EBIT 17,566 17,722 11,408 9,164 (1,132) (f)
Profit attributable to the shareholders 7,217 11,590 7,271 5,488 (2,051)
Net cash from operating activities 50,360 91,230 34,336 30,853 5,548
Net cash from investing activities (20,283) (11,493) (4,927) (14,485) (3,218)
Net increase/(decrease) in cash and cash equivalents 16,631 70,556 1,066 1,074 (372)
Depreciation and amortization (24,226) (21,712) (20,348) (17,207) (13,682)
Net debt 17,566 32,482 52,119 80,291 30,377 (g)
Net debt (ex IFRS 16) (89,832) (73,201) (2,645) 21,293 30,377 (h)
Net working capital (81,484) (65,840) (2,859) 4,300 14,200 (i)
naf = not accounted for
Reference to section 'Definition and Explanation of use of non-IFRS financial measures' and 'Reconciliation of non-IFRS financial measures' in the Other Information section*
2022Sif Annual Report
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Key figures 2018 – 2022
2022 2021 2020 2019 2018 Reference *
IN KTON
Production 169 171 164 185 138
PER SHARE X €
Earnings 0.28 0.45 0.29 0.22 (0.08)
Dividend 0.00 0.19 0.12 0.00 0.10
Number of shares issued 25,501 25,501 25,501 25,501 25,501
RATIOS %
ROACE 28.3 43.2 18.9 8.3 (0.9) (j)
ROACE (adjusted) 43.6 46.0 18.9 8.3 (0.9) (k)
Solvency 29.6 32.1 39.0 35.6 43.6 (l)
COVENANT RATIOS
Total debt/EBITDA (ex IFRS16 ) 0.00 0.00 0.00 1.04 n/a (n)
Solvency (ex IFRS 16) 42.1 47.7 50.0 47.2 43.6 (m)
NON-FINANCIAL KPI'S
LTIF per mln exposure hours 6.50 4.98 2.48 2.75 1.12
Sickness leave % 7.89 5.10 5.50 6.59 7.24
Gross CO2 footprint in tons ** 10,422 7,378 3,538 4,392 5,866
Net CO2 footprint in tons ** 10,422 7,378 3,538 4,392 5,866
Participation in projects that will result in
renewable energy capacity
1,954 1,873 1,298 naf naf
naf = not accounted for
Reference to section 'Definition and Explanation of use of non-IFRS financial measures' and 'Reconciliation of non-IFRS financial measures' in the Other Information section*
** Prior period numbers are restated, reference is made to page 47 for more information
2022Sif Annual Report
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LTIF
(PER MLN EXPOSURE HOURS)
10
8
6
4
2
0
2022 2021 2020 2019 2018
6.5
5.0
2.5
2.8
1.1
CONTRIBUTION
(IN € 1,000)
140,000
112,000
84,000
56,000
28,000
0
2022 2021 2020 2019 2018
130,511
114,230
101,592
101,517
74,336
CO2 footprint
in tons (restated, reference is made to page 47 for more information)
15,000
12,000
9,000
6,000
3,000
0
gross net
2022 2021 2020 2019 2018
10,422
7,378
3,538
4,392
5,866
EBITDA
(IN € 1,000)
60,000
48,000
36,000
24,000
12,000
0
2022 2021 2020 2019 2018
36,426
39,061
31,756
26,371
12,550
contribution to installed renewable energy capacity
in MW
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
2022 2021 2020
1,954
1,873
1,298
NET EARNINGS
(IN € 1,000)
32,000
24,000
16,000
8,000
0
2022 2021 2020 2019 2018
7,217
11,590
7,271
5,488
-2,051
2022Sif Annual Report
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PRODUCTION
(IN KTON)
250
200
150
100
50
0
2022 2021 2020 2019 2018
169
171
164
185
138
EARNINGS PER SHARE
(IN €)
1.20
0.90
0.60
0.30
0.00
2022 2021 2020 2019 2018
0.28
0.45
0.29
0.22
-0.08
CONTRIBUTION PER TON
750
600
450
300
150
0
contribution/ton production Kton
2022 2021 2020 2019 2018
€ 674
€ 637
€ 609
€ 549
€ 539
200
175
150
125
100
75
50
25
0
EBIT
(IN € 1,000)
48,000
36,000
24,000
12,000
0
2022 2021 2020 2019 2018
12,200
17,349
11,408
9,164
-1,132
NET WORKING CAPITAL
(IN € 1,000)
20,000
10,000
0
-10,000
-20,000
-30,000
-40,000
-50,000
-60,000
-70,000
-80,000
-90,000
2022 2021 2020 2019 2018
-81,484 -65,840 -2,859
4,300
14,200
RETURN ON AVERAGE CAPITAL EMPLOYED
(IN %)
50
40
30
20
10
0
2022 2021 2020 2019 2018
43.6
46.0
18.9
8.3
-0.9
2022Sif Annual Report
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TOTAL DEBT EX-IFRS16
(IN € 1,000)
36,000
24,000
12,000
0
-12,000
-24,000
-36,000
-48,000
-60,000
-72,000
-84,000
-96,000
2022 2021 2020 2019 2018
-89,832 -73,201 -2,645
21,293
30,377
EMPLOYEES
(IN FTE at YE)
750
600
450
300
150
0
Permanent Flexible
2022 2021 2020 2019 2018
587
548
569
658
429
TRIF
(PER MLN EXPOSURE HOURS)
20
18
16
14
12
10
8
6
4
2
0
2022 2021 2020 2019 2018
18.6
19.9
9.9
19.1
15.6
SICKNESS LEAVE
(IN %)
8
7
6
5
4
3
2
1
0
2022 2021 2020 2019 2018
7.9
5.1
5.5
6.6
7.2
2022Sif Annual Report
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About Sif
Our spirit
SIF’S CORE VALUES
Teamwork The ‘we’ of Sif is strong as a rock, both internally and externally. That is important, as we are a critical and
vital component in the supply chain for offshore wind energy.
Focus on results That’s why we do the things we do. Together, we think carefully about the proper focus to ensure that today is
better than yesterday. Safe, sustainable, at the highest quality level and quantifiable.
Ownership Another word for commitment and responsibility. This starts with clarity about who does what and an open
culture in which we approach one another, focusing on solutions and respect for everyone’s contribution to
the bigger picture.
Our history and present profile
Sif Holding N.V. (“Sif”) is a public limited company incorporated under Dutch law
with its registered office and its principal place of business at Mijnheerkensweg 33,
6041 TA Roermond, the Netherlands. Its telephone number is +31 475 385777 and
its website is www.sif-group.com. Sif is filed in the Commercial Trade Register under
number 13016026. Sif’s legal entry identifier (“LEI”) is 724500JOBPD5CLHCK040.
Sif is domiciled and incorporated in the Netherlands under Dutch law.
Sif was founded in 1948 in Sittard by Jan Jacob Schmeitz (Schmeitz Industrial
Fabrication, Sif) as a metal working firm. In the 1970s, the company focused on
pressure vessels and tubular steel pipes for jacket foundations for the oil & gas
industry. The growth of the products and the related water transport requirement
compelled the company to relocate to its current facilities in Roermond in 1972.
From 2000, Sif capitalized on the growth of offshore wind and became a first mover
in monopiles and transition pieces. Sif produced its first monopiles for the Yttre
Stengrund wind farm in 2000. Since then, Sif has opened a second manufacturing
location at Maasvlakte 2 Rotterdam in 2016, manufactured more than
2,500 foundations for offshore wind farms and has evolved to a leading mission-
critical tubular steel foundations provider to the offshore energy markets.
2022Sif Annual Report
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In its 75-year existence, Sif has
developed from a local
manufacturer for oil and gas to
a leading global supplier of tubular
steel foundations for the offshore
wind business
Vision and mission: supporting the energy transition
The world is in an urgent need of stopping global warming as a result of man
created climate change. At the COP21 in Paris, held in 2015, Global leaders agreed
on actions to reduce emissions, to build resilience and decrease vulnerability to the
adverse effects of climate change and to uphold and promote regional and
international cooperation. The most important climate goal is to limit the earth’s
warming to 1.5 degree Celsius.
To stay below the 1.5 degree Celsius goal, carbon dioxide emission in the EU would
need to be reduced by 55% by 2030 compared to 1990 levels and to reach net zero
by 2050. To achieve the 2030 target, at least 40% of energy consumption would
need to come from renewable energy sources in the EU’s overall energy mix as
targeted in the 2020 European Green Deal. This means renewable energy needs to
more than triple over the next 7 years.
Measured in Terrawatt-hours, more than 83% of global energy consumption in
2021 came from fossil sources (oil, coal and gas). More than 4% came from nuclear
sources and almost 13% was renewable energy of which almost 3% generated by
wind (source: BP Statistical Review of World Energy 2022). Of the 830 GW total
globally installed wind capacity in 2021, 65 GW is generated by offshore wind.
The capacity of offshore wind turbines has gone up drastically over the past two
decades and growth of offshore wind needs to fivefold from 2022 to 2030 to match
the clean energy ambitions of the world. Our vision is to support and accelerate the
growth of offshore wind power generation as a key driver to the world’s energy
transition.
Our mission is to propel the energy transition through the design, engineering and
manufacturing of monopile solutions for offshore wind turbines. Innovation, safety
and reliability are key drivers to accomplish this mission.
Our strategy and objectives
Global energy demand continues to rise as well as the demand for cleaner, more
locally available energy. The growth in diameter sizes of the monopiles is required to
support the ever increasing turbine sizes and power absorption.
Over the years we saw a growing offshore wind production that contributed to
decreasing levelized cost of energy, to reducing the world’s carbon footprint while
repealing government subsidies and at the same time safeguarding bio-diversity.
Offshore wind energy can now compete with any alternative source of energy. Sif
aims to contribute to a further increase in the production of robust and affordable
energy through offshore wind as a key driver to the world’s energy transition and is
now moving towards ‘total solutions partnerships’ by offering engineering,
manufacturing of extremely large (XXXL) unique monopiles and marshaling services
for installation and decommissioning of offshore wind equipment. It takes a long-
term view to acknowledge and prepare for these developments. Sif is undertaking
the following short- and longer-term activities to expand and secure this niche
position:
Optimize manufacturing assets; on the back of the expected growing demand
for offshore wind energy, demand for more and larger monopiles is foreseen
from 2025 onwards. Sif has decided to adjust and expand production facilities to
meet this demand and annually produce 200 monopiles with diameters up to
ø 11 meters with an initial maximum of ø 11.5 meters and a total annual volume
up to 500 kton;
a.
2022Sif Annual Report
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Develop value-add design engineering; early engagement with engineering
know-how leads to solutions of enhanced quality for clients, designed-to-
manufacture solutions for Sif and responsible and sustainable installation
methodologies to protect sea life;
b.
Develop integrated transition piece alternatives; limiting offshore installation
activities results in safer projects at lower risks and expenses. Single-piece
foundations limit the amount of weather-sensitive offshore installation activities;
c.
Logistic and marshaling services for installation and decommissioning of
offshore wind farms. With offshore equipment and parts increasing in size,
demand for onshore preparations and pre-assembly increases. Locations close
to the wind farm sites limit the sailing time and, therefore, transportation
expenses and risks (during the building period of the new factory and as long as
expansion options for the leased land are not available, possibilities for
marshaling and logistics operations are limited);
d.
Support circular solutions for offshore foundations; early-day wind farms are
reaching the end of their technical or economic lifetime. It is expected that within
the next 5 to 10 years, demand for replacement will grow, including the removal
of depreciated wind farm parts like foundations.
e.
To maintain focus on our strategic direction, we rely on a management team that is
responsible for day-to-day leadership of the people & culture, quality, health & safety,
sales & business development, marketing & communications, project management,
legal, finance & tax, information technology and innovation networks. Today’s
project-oriented manufacturing company employs 370 full-time equivalents at year-
end 2022, realizing revenues of €375 million. The transitional milestones that were
recorded for 2022 are reflected in the timeline on page 1 of this report.
To support our primary services, we participate in (i) SSSF B.V. for the supply of
monopiles and transition pieces, in (ii) SBR Engineering GmbH for the development
of special-purpose welding equipment, in (iii) Twinpark SIF B.V. for the exploitation
of the GE Haliade X wind turbine at Maasvlakte 2 and in (iv) KCI the Engineers BV
for in-house engineering capabilities. While Sif traditionally serves the northwestern
European markets, we consider the offshore wind market a global market.
Sif has two manufacturing facilities, both situated in the Netherlands, equipped with
47 Sif design welding machines and 8 rollers. The factory in Roermond (owned
property since 1972; 10.8 hectares of which 6.1-hectare buildings) specializes in
manufacturing cans and cones, transition pieces, pin piles, legs and pile sleeves with
wall thicknesses up to 250mm and diameters up to 9,3 meters. Cans and cones are
transported by ship to the facilities in Rotterdam for assembly and coating.
Transition pieces are transported by ship to Smulders in Hoboken, Belgium for
outfitting and coating. The factory in Rotterdam (leased land with privately-owned
buildings since 2016; 62 hectares, of which 20 hectares since 2019) is an assembly
and coating facility, where cans and cones are assembled into monopiles and
provided with a protective coating. The factory in Rotterdam is situated on reclaimed
land with direct access to open sea.
Sif has defined the following mid- and longer-term strategic goals:
Strategic Goals Mid term 2-3 years Longer term 4-7 years
Optimize manufacturing assets to enable larger and heavier monopiles manufacture 330 kton 2025 375 kton in 2026
Participate in projects resulting in renewable energy 7 GW by 2025 20 GW by 2030
Decrease Lost time Safety incidents LTIF < 1.5 LTIF< 0.75
Reduce carbon footprint and nitrogen deposition electrical pre-heating electrical or bio-fueled propulsion and heating
Earn back on investment 3-4 years €135 million EBITDA 2025 at least €160 million EBITDA from 2026
onwards
Develop integrated transition piece alternatives develop Skybox and revive tripod commercialize Skybox
Expand marshaling extend options for marshalling build marshaling activities
Set-up chain for recycling of decommissioned wind farms prepare for cooperation and testing first projects
2022Sif Annual Report
16
The Supply Chain for Offshore Wind Energy
Vindeby Offshore Wind Farm was the first offshore wind farm in the world, erected
in 1991 off the coast of the town of Vindeby in Danmark. The 11 turbines with
450 KW capacity each, were decommissioned in 2017, after 25 years of service
during which it had produced 243 GWh. In the next years, numerous new wind farms
will be developed with much larger turbines and older wind farms will reach the end
of their lifetime. It raises questions on tuning the supply chain and on
decommissioning and circularity. At Vindeby, most of the components were recycled
into new use except for the fiberglass blades that ended up in landfill. How does the
supply chain look and operate, how does circularity evolve and how does this apply
to Sif’s activities and supply chain?
Source: Renewable energy world 3 March 2022. Graphic courtesy: US dept of
energy.
Graph: the offshore wind construction supply chain from raw materials to end
product
The development, construction and grid connection of an offshore wind farm
generally takes between 7 and 11 years, with 3 to 5 years dedicated to the
development phase, 1 to 3 to the pre-construction phase and 2 to 4 years to
construction (source: Iberdrola: Construction of an offshore wind farm, https:/
/www.iberdrola.com/about-us/our-activity/offshore-wind-energy/offshore-wind-park-
construction). This implies that the lead time for the part of the project where Sif is
involved (pre-construction and construction) is between 3 and 7 years. This includes
tendering and contracting of all parts of the total supply chain. A large wind farm
often includes between 70 and 90 turbines, less than 50% of Sif’s annual production
capacity of 200 monopiles; actual manufacturing of the monopiles by Sif generally
takes less than 1 year. Including preparations before and load-out after the
manufacturing, the total throughput time of a contract for Sif normally exceeds
1 year.
Our business
Products and Services
Offshore foundations
As illustrated in the image on page 17 there is a range of foundations for offshore
energy projects. Sif designs and manufactures monopile foundations. These
foundations represent approximately 80% of all foundations applied for offshore
wind farms in Europe. On a global scale, between 60 and 70% of all offshore wind
turbines are based on monopiles. Sif also manufactures piles that are used to
anchor jacket foundations into the seabed. The monopile consists of a large tubular
structure, typically with conical sections to reduce from the bigger bottom diameter
to the smaller top section. Monopiles are always customized on a piece-by-piece
basis in accordance with specific requirements to the product's design. Each
monopile in a wind farm is engineered as a one-off to bridge the unique conditions
of its location in the wind farm to the standard tower and turbine dimensions.
2022Sif Annual Report
17
Picture: the range of foundations applied for offshore wind turbines
The selection of a foundation depends on several factors, the main ones being water
depth, wind- and wave impact, and the seabed composition. Of the different types of
foundations, the monopile is the only one solely used for the offshore wind sector.
The monopile provides the best value for money. It can be used in water depths up
to 60 meters. Other foundations serve both wind- and oil & gas markets. Since
monopiles are not suitable for rocky seabed, jackets or gravity-based foundations
are used as alternatives in these situations. Floating foundations are the only viable
solution for deep(er)-water applications. Monopile foundations are often combined
with a transition piece. Sif manufactures the primary steel for these transition
pieces. Whereas the monopile is uniquely designed and manufactured for its
position in a wind farm, transition pieces have the same design for all foundations in
a specific wind farm. After installing the monopile, the transition piece is installed on
top of the monopile. Our partner Smulders adds all secondary steel components
such as boat-landings, ladders and switchboards to the primary steel of the
transition piece and assures the right quality coating is applied. More recently
alternative monopile designs are based on transition-piece-less solutions whereby
the secondary steel items are installed on the monopile offshore, after installation of
the monopile in the seabed.
2022Sif Annual Report
18
The supply chain for offshore foundations consists of:
the foundation design which is based on site-
survey information,
>
iron ore mining,>
steel plate manufacturing,>
steel flange manufacturing,>
detail-engineering,>
rolling and welding of steel for monopile and
transition piece manufacturing,
>
outfitting of transition pieces or transition-piece-
less monopiles with platforms, boat landings,
switchboards, and
>
blasting and coating of completed foundations.>
After that, the completed foundations are transported
to the wind farm location for installation.
Sif’s core competencies are value- and detailed
manufacturing engineering, serial rolling, automated
welding and coating of the extremely thick steel plates.
This results in unique tubular offshore foundations
(monopiles and transition pieces) and foundation
components (jacket legs, pin piles, and pile sleeves).
You will find an overview of Sif’s manufacturing steps
on this spread. Iron ore mining, steel plate and steel
flange manufacturing, outfitting of transition pieces
and transition-piece-less monopiles and coating
completed products are competencies of Sif’s
business partners (suppliers, joint venture partners or
subcontractors).
2022Sif Annual Report
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2022Sif Annual Report
20
2022Sif Annual Report
21
Engineering
In 2021, Sif acquired KCI the Engineers. The purpose of the acquisition was to
reinforce the detail engineering capacity of Sif in order to serve clients with in-house
value engineering services with the aim to reduce the overall product costs and to
optimize the manufacturing. KCI the Engineers is an established brand in offshore
engineering and services clients in the offshore renewable energy, hydrogen and
structural design sector with value-engineering.
Marshaling and logistics
With marshaling activities, Sif anticipates both on the trend towards larger
dimensions for offshore installations and on the demand from clients to keep
assembly hubs close to the sail-out location and the wind farm. Furthermore, we
anticipate the decommissioning market that will open once wind farms come to the
end of their lifetime which is expected five to ten years from now. Sif started
marshaling activities in 2019. Clients are served with space and (possibly manned)
equipment to assemble and commission before installation offshore. For
decommissioning activities, Sif offers to bring their decommissioned products
ashore in order to prepare them for dismantling, recycling or scrapping. For this
purpose, Sif expanded the Maasvlakte 2 area by leasing an additional 20 hectares in
2019.
Business partners, co-makers
Sif has strategic partnerships with Dillinger Hüttenwerke AG in Germany for the
supply of the required steel plates, Euskal Forging AG in Spain for steel flanges,
Eiffage Smulders in Belgium for steel applications to transition pieces, Glacier
Energy in Scotland for non-destructive testing, Rederij De Jong in the Netherlands
for inland barge transportation and Van Ginkel Groep in the Netherlands for blasting
and coating.
Picture: forefront the roll-on-roll-off quay at Maasvlakte 2 Rotterdam
2022Sif Annual Report
22
Monopiles are composed of unique, large and heavy steel plates measuring up to
26 by 4 meters and weighing up to 42 ton each that are manufactured and supplied
by Dillinger Hütte, based in Saarland, Germany. Dillinger has the ambition to be
climate-neutral by 2045. To achieve this, they decided to invest in transforming their
steelmaking process from traditional blast furnaces to electric arc and direct iron
reduction technology. Enough (green) hydrogen and green electricity should be
available to make the production of green steel possible. The same applies to the
availability of large amounts of steel scrap. Construction of a direct reduced iron
plant and two electric arc furnaces will begin in Dillingen and Völklingen in 2023, and
production of 3.5 million ton of “green” steel per year is to start in 2027/2028.
Dillinger’s aim is to cut carbon emissions by 55 percent by 2030– 4.9 million metric
ton per year. In a second phase, a third electric arc furnace will be completed by
2045, enabling Dillinger to produce a total of 4.9 million ton of climate-neutral crude
steel per year. This will require an investment of around EUR 3.5 billion (source: Pure
Steel+ – Our path to green steel (pure-steel.com). At the end of their lifetime,
monopiles become scrap – and thus a vital feed material for new steel production.
Application-orientated recycling assures infinite reuse. Sif and Dillinger are preparing
to recycle steel after decommissioning wind farms.
The connection between monopiles and the turbine tower (TP less design) or
between a transition piece and the tower is realized by means of a flange
connection. These flanges are welded with tight tolerances to the top of the
monopile or transition piece and are mostly supplied by Euskal from Bilbao in Spain.
Flanges can be recycled as feed-in for green steel production.
Secondary steel applications are installed on transition pieces by Eiffage Smulders in
Hoboken, Belgium. These steel applications can also be recycled as feed for new
steel production.
All blasting and coating are executed and supervised by the staff of Van Ginkel at
Sif’s facilities at Maasvlakte 2 in Rotterdam, complying with Sif’s safety, quality and
environmental standards.
Non-destructive testing is subcontracted to Glacier Energy and executed on location
(Roermond or Rotterdam).
Transportation of cans, cones, sections and transition pieces from Roermond to
Maasvlakte Rotterdam or to Hoboken is done by Rederij de Jong, using barges that
are long term and spot market rented and partly Sif-owned. The carbon footprint of
Rederij de Jong is included in Sif’s scope 1 emissions. The plan to reduce the
carbon footprint is partially based on the replacement of diesel for the propulsion of
the river push or tug vessels by bio-diesels or investment in green propulsion
concepts able to run on alternative green fuel solutions like hydrogen. The plan is to
become carbon neutral on the inland river transports by 2030 the latest.
Picture: the diameter of a monopile refers to the diameter at the bottom. Towards
the top of the monopile, the diameter reduces to 8 meters through the use of cones
to match the diameters of the towers or transition pieces
2022Sif Annual Report
23
Product development and expansion plans
From 2025 until 2030, the vast majority of monopiles in Europe will be in the 9 to
11.5 meters diameter range. For applications along the east coast of the USA,
diameter sizes are typically larger due to more difficult soil conditions, bigger water
depths and more robust requirements to withstand the hurricane season and ocean
swell. Monopiles with diameters above 11.5 meters will therefore become more
common in the USA in the future. To be able to manufacture large monopiles for the
EU market and, to some extent, specific USA projects, Sif has initiated the project
internally referred to as P11 in 2019 and has taken a final investment decision on
13 February 2023 to invest 328 million euro in the extension of its existing
manufacturing facilities. The plan comprises new manufacturing facilities to be built
at Maasvlakte 2 Rotterdam, starting April 2023 and fully operational by 1
st
January
2025. The investment will increase Sif’s annual manufacturing capacity to 500 kton
(reference base of 200, 2,500 tons, 11-meter diameter monopiles per year). Sif has
contracted orders or is exclusively negotiating with launching customers Ecowende
and Empire Wind for all together 348 kton capacity. The expansion will be financed
through a mix of €100 million Advanced Factory Payments from the launching
customers, €81 million term loans from Invest-NL and a banking consortium of ABN
AMRO, ING, RABO Bank, AKA and DNB, €40 million lease agreement from RABO
Bank, issuance of preferred shares to raise €50 million preferred equity to Equinor
and issuance of common shares to raise €50 million (via a rights issue that is
underwritten by cornerstone shareholder Grachtenheer 10). Based on the launching
orders and market visibility, Sif expects EBITDA to arrive at €135 million for
2025 and at least at €160 million for 2026 and beyond, yielding an earn back period
of max 4 years.
More information on P11 on the next page of this annual report.
2022Sif Annual Report
24
Merits of the P11 Investment and Financing Plan
Investment Returns Financing (millions)
Capex mln
€328
Earn back max
4 yrs
Advanced Payments
€100
Start Building
1 April 2023
Improved safety Term Loan Facility
€81
Fully operational
January 2025
new jobs
200
CumPref shares
€50
Launching Capacity
348 kt
Lower carbon footprint Ordinary shares
€50
Annual Capacity
500 kt
EBITDA mln
€160
from 2026
Lease Facility
€40
*details of the project and the financing thereof are in the 13 February 2023 press release of Sif Holding NV
2022Sif Annual Report
25
Sif has a permanent innovation agenda consisting of either offshore wind energy
projects with embedded innovations or dedicated innovation projects aiming at
higher output, lower manufacturing costs, lower installation expenses, shorter and
safer offshore installation, faster manufacturing, extended lifetime or less
environmental nuisance. An example of embedded innovation is the value
engineering concept for the transition piece-less designed monopile, where savings
are realized in steel costs and installation times at sea are shortened. For some
recent projects Sif successfully applied the value based concept.
The innovation that also contributes to shorter and safer offshore installation is the
Skybox, where Sif's designers worked together with DOT (Delft Offshore Turbines)
and consulted with technicians to design an innovative access platform concept
that slides over the monopile with a slip joint connection. The Skybox concept
makes it possible to apply one offshore hoist only to complete the transition piece-
less design monopile with all required secondary equipment.
‘Innovations that increase output,
reduce costs, extend lifecycles and
limit residual nuisance contribute
to sustainable energy production
and affordable energy over
a longer-term.’
Sif is a member of “Growth through Research development and demonstration in
Offshore Wind (“GROW”)” and is involved in a number of innovative projects that
support the application of monopiles in offshore wind projects, which in
2021 included floater designs, alternative materials for monopiles and sustainable
installation of very large monopiles.
‘Sif’s innovations are project-
embedded, innovation-projects or
in partnership under the GROW
umbrella.’
Markets
Sif serves the global offshore wind energy markets to contribute to the global energy
transition.
Trends and developments
The world needs to halt the rapidly increasing climate change. The most important
climate goal is to limit the earth’s warming to 1.5 degree Celsius. To stay below the
1.5 degree Celsius goal, global carbon emissions need to be reduced drastically.
World leaders have agreed that a net-zero emission should be pursued by 2050.
Initiatives have been announced in Europe through the European Green Deal, setting
out priorities for 2019-2024 that should enable a net reduction of greenhouse gas of
55% by 2030 compared to 1990 and a net-zero exhaust of greenhouse gas by 2050.
To achieve that net-zero target, Europe is looking at a minimum of 300 GW
European offshore wind capacity. In the USA, the Biden administration announced
its intention to cut greenhouse gas emissions by 50-52% by 2030 compared with
2005 levels and a longer-term goal of net-zero emissions by 2050.
2022Sif Annual Report
26
Measured in Terrawatt-hours, fossil sources (oil, coal and gas) contributed for more
than 83% of the global energy consumption in 2021. This has hardly changed in
comparison to 2020. More than 4% came from nuclear sources and renewable
energy contributed almost 13% of which almost 3% was generated by wind (source:
BP Statistical Review of World Energy 2022). Of the 830 GW total installed wind
capacity in 2021, only 7% was generated offshore. Offshore wind on a global scale is
still at the early stage of expansion. Analysts at WoodMackenzie assessed the global
addition in 2022 at 9.5 GW of which 4 GW in China and 5.5 GW in the rest of the
world, mainly Europe, bringing the global total at 65 GW.
There is a direct relation between offshore wind energy and the levelized cost of
electricity (“LCOE”). According to Wood Mackenzie, offshore wind leads the cost
reduction race, with LCOE reducing 68% by 2050 making offshore wind the most
cost-effective source of energy in 2050 after solar and onshore wind. Transmission
and storage cost is a key cost area for this technology as farms scale up and move
further offshore. The idea to develop offshore wind production hubs, with average
turbine hub heights almost doubling to 200m by 2050 and turbine ratings growing
from 9 to 18, maybe 25 MW raises the question whether or not integrated cost
synergies and facilitate systems integration still apply. Industry analysts at Wood
Mackenzie expect offshore wind production capacity to increase from 65 GW in
2022 to 340 GW in 2030. In 2022, 449 GW was added to the pipeline and increased
the total to 1.4 TW (sources: Wood Mackenzie: Europe Levelised Cost of Electricity
(LCOE) 2022 outlook to 2050, October 2022 and WoodMackenzie, 2022 in review for
offshore wind dated January 2023).
Customers
Clients for both foundations and marshaling activities include energy companies
such as Eneco, E-on, Equinor, Iberdrola, Innogy, RWE, Shell, Vattenfall, developers
such as Orsted, SSE, Triton Knoll and Engineering, Procurement, Construction and
Installation (“EPCI”) contractors and fabricators such as Boskalis, Dragados,
Eiffage, Geosea DEME, Heerema Marine Contractors, Jan de Nul, Kvaerner, Van
Oord, Saipem and Subsea7.
Sif’s geographic focus is on projects in north western Europe and the Baltic area,
with a growing interest in north east American initiatives. Most of Sif’s projects are
for clients in Europe, and relate to the manufacturing of monopiles for contract
partners in the offshore wind industry. On average Sif has 3 to 6 projects at hand in
any calendar-year. The first table below reflects the geographical revenue-split in
2022, based on the domicile of the client. The second table reflects the revenue-split
over segments in 2022.
AMOUNTS IN EUR '000 2022 2021
The Netherlands 156,074 270,701
United Kingdom 198,353 143,252
Norway 12,483 547
France 790 2,320
Japan 60 3,308
Rest of the European Union (EU) 5,933 2,413
Rest of the world 851 -
Total revenue 374,543 422,541
AMOUNTS IN EUR '000 2022
Wind Marshalling Other Total
- Revenue from construction contracts 352,863 3,422 7,606 363,891
- Operational lease income - 9,084 1,568 10,652
Total revenue 352,863 12,506 9,174 374,543
Competition
In 2022, Sif manufactured its 2,500
th
monopile. Sif (the Netherlands), EEW Special
Pipe Constructions GmbH (Germany), Steelwind Nordenham GmbH (Germany) and
Bladt Industries A/S (Danmark) are the main industrial manufacturers of monopile
foundations with an established manufacturing history. They have built up
a combined market share of almost 100% in Europe with a total annual production
capacity of approximately 575 monopiles.
2022Sif Annual Report
27
‘Sif has manufactured its 2,500th
monopile in 2022 and historically
has a market share of close to
40% in monopiles.’
Picture: load-out monopiles for Dogger bank
Haizea in Spain and Dajin from China have joined the supply side and are together
able to manufacture approximately 125 monopiles on an annual basis for the
European market. EEW-Orsted in New Jersey, USA, US Wind in USA, SeAH in the
United Kingdom and Navantia/Windar from Spain as well as Bladt and Haizea have
announced initiatives for investing in (extension of) monopile manufacturing plants.
Total potential additions to the supply side are more than 1,000 monopiles per year,
Sif’s P11 extension plans included.
Our people
First time right is of vital importance to our business. Production step recalls, repairs
and incidents frustrate our workflow and have a significant operational and financial
impact. Our key strength are the people who engineer the end products, that design
the work processes and who operate the machines and equipment that enable us to
do things first time right.
Given the increasing quality demands on our products and products getting bigger
and more complicated, it is a necessity to nurture a future-proof workforce:
attracting, training, committing to and retaining of the best people, empowering
them to optimize team-performance, to take ownership and to focus on results are
key in today’s labour market. The (executive) Management Team is putting strong
emphasis on connecting with potential candidate groups via various recruitment
channels and to promote diversity in the broadest sense on, amongst others,
ethnicity, religion, nationality, age, gender, education, experience and perspective.
Diversity ensures that we reinforce each other, bring out the best in each other and
cooperate optimally. Promoting diversity also offers a larger pool of candidates and
enhances recruitment efforts. Providing an inclusive workplace makes diversity
work. It’s widely acknowledged that gender imbalance is more common in
operational or heavy industries. Improving our gender diversity therefore remains
a challenge, especially on the shopfloor. At year-end, 6% of our total workforce were
women. Be it slowly, we see more women entering various management levels. And
we also see a slow but nevertheless increasing interest amongst women in technical
studies. We see a shared value proposition in working with people with disabilities,
labour immigrants, refugees or un (and under)-employed people and apply the
equal-pay principle for equal jobs.
2022Sif Annual Report
28
New ventures with business partners and student teams to break new grounds like
a program on testing of green hydrogen production at sea, enable us to learn from
the next generation and to connect with key universities.
Picture: monopile for Hollandse Kust Zuid on SPMT
Attract
To absorb the volatility of our project business, we need a degree of flexibility in our
workforce and activities. In addition to our permanent (payroll) workforce, Sif
employs external (flexible) workers on a project-by-project basis or through staffing
agencies and subcontracts for certain activities such as, welding, rolling, grinding
and preservation for corrosion, transportation and testing. Anticipating the expected
supply-demand imbalance in combination with a shortage of skilled technical labor
and the need for 200 FTE additional workforce once the expansion of our production
capacity is completed in 2024, Sif has started to rebalance the workforce in favor of
more permanent jobs. Part of this ambition is an extensive recruitment plan. A new
employer branding campaign will be the key focus area for Sif to attract people.
Activity and engagement on our own digital and social channels is increasing. The
Sharepoint portal at Sif is fundamental in enhancing our employer branding and
informing our international employee community and is supplemented by quarterly
townhall meetings, quarterly magazines and monthly newsletters for department-
managers. The entrepreneurial voice, the technical environment, our role in the
energy transition and the continuation of investments in innovation and capacity
play an important part in attracting new colleagues.
In 2022, based on year-end, our flexible staff was 37.0% compared to 32.8% at year-
end 2021. At the end of 2022, the total workforce was 587 FTEs (full-time
equivalents) compared to 548 FTE at the end of 2021.
Sif does not employ anyone under the age of 18 and pursues that its suppliers and
subcontractors do not employ anyone under 18. Since activities at Sif are all
executed in the Netherlands, and since purchased materials and services are
manufactured or rendered in European countries, the risks of child labor are very
limited and non-existent with the partners we certified.
Most employees at Sif are remunerated based on the collective labor agreement for
the metal industry (“CAO metal and technique”). Collective labor agreements are
agreed upon between the metal industry employers, the Dutch government, and
employee trade unions. All Sif-employees are free to join trade unions and
participate in social partners negotiations to close collective labor agreements for
the industry. The present “CAO metal and technique” has a duration of 30 months
starting1 October 2021. It includes an 8% wage-increase, rolled out in a few phases
over the 30-month period. Employment conditions are in line with or exceed the
average employment conditions applicable in the Netherlands and include clauses
for special leave situations. Tax and other deductions and remittances are in line
with European standards, regulations, and legislation. Sif pursues that its suppliers
and subcontractors pay their workers a fair salary based on fair working hour
regulations and assure fair employment conditions according to the applicable
legislation.
2022Sif Annual Report
29
Staff distribution: flexible - permanent
(IN %)
37.0
63.0
Flexible
Permanent
Train and Reward
Our training programmes are designed to improve personal and team performance.
An annual amount of 250 thousand euro is reserved for training. An additional
150 thousand euro per annum is budgeted for the roll-out of personal development
plans (‘PDP’s’).
In total approximately 350 employees, both permanent and flexible, participated in
our 2022 development programmes. In close collaboration with labour unions, the
Works Council and employers’ organisation FME, we introduced a new function
appraisal system (ISF system) in 2022 in which functions are (re)weighed and
classified. This forms the basis for the salary scales as well as the education
policies. In close cooperation with and based on the approval of the works council
(Instemming) a new appraisal and salary increase policy is introduced from
2 January 2023 onwards. This new policy allows for performance related
remuneration in 2024 based on targets set early 2023.
A more team oriented approach stimulates the development of individual employees
and craftmanship within the various teams. To support and monitor the roll-out of
the pay-for-performance remuneration system, performance assessment cycles
apply.
Commit and Retain
Key positions in our production and engineering teams often require multi-year
training, education and experience. Obviously, retaining our people is crucial. Even
more crucial than attracting new colleagues. We managed to commit and retain
these colleagues also by leveraging strict rules and by investing in safe workplaces.
Safety is the number-one priority for Sif but unfortunately the ever increasing
weights and dimensions of our products combined with a reduced level of
experience of the incoming workforce has resulted in an LTIF increase compared to
2021. A continued effort to implement safety refreshment trainings (Tool box
meetings) and organization of specific safety culture workshops, personal
protection and investments in safer workspaces should result in a structurally safer
workplace.
It is our responsibility to offer our employees a safe workplace, provide them with
opportunities for training and contribute to their personal development. To assure
a safe mental and physical workspace all employees have access to
a physiotherapist and are offered an annual medical check-up to support their health
and well-being.
Following onboarding, every new employee (permanent and temporary) receives
a login for the Sif-academy. They are obliged to follow safety instructions
through the Sif-academy and are only allowed into their workspace after
successfully passing the English, German or Dutch exam for the safety
certificate (VCA or VCO-vol);
>
once started at Sif, permanent employees maintain their 24/7-access-login for
various e-learnings. These e-learnings include information on COVID-19 and
working from home but also include training of job or business specific skills,
leadership and communications;
>
our manufacturing staff follows safety and first-aid training and job-related
training such as hoisting and lifting, forklift truck, electrical etc;
>
2022Sif Annual Report
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an absenteeism process with coaching is in place to improve and maintain the
wellbeing of our staff. Related to COVID-19 and the impact on mental health of
measures to prevent infection, additional measures were introduced to
safeguard wellbeing.
>
In addition to the collective labour agreement, we paid all our employees in
2022 a “premium of appreciation” of net €100 and a net €200 allowance for
compensation of energy costs and inflation. In December 2022 this was
complemented by a gross €750 award to all employees, permanent and flexible, with
more than 12 months service and €375 to all employees with less than 12 months
service.
Our social and community involvement is reflected in countless regional and local
philanthropic and community engagement initiatives, such as donations to charities,
sports clubs, cultural initiatives and partnering with schools and universities to share
knowledge.
When recruiting, internal candidates are given priority in order to retain and nurture
internal talent and to offer opportunities for career development. For management,
this requires a strong commitment to facilitate internal moves and to make them
successful. All these efforts contribute to building a sustainable people centric
organisation.
2022Sif Annual Report
31
Stakeholder- interaction
With products and services geared to offshore wind energy growth, Sif contributes
to a more sustainable world. Sif applies integrated reporting on its environmental,
social, financial and governance performance. In this section of the annual report,
we report on how Sif engages with its various stakeholders to ensure alignment
between the sustainability of our ambitions and the needs of stakeholders including
those outside Sif’s direct value chains.
Stakeholder dialogue
As a company active in the energy transition, we interact with owners, developers
and EPCI contractors, we interact with employees, suppliers and subcontractors, we
interact with shareholders and other capital providers and we communicate with
other stakeholders such as end-users, governmental and non-governmental
organizations. We interact with all these groups and with some more intensively
than with others. These interactions give us an idea of the environmental, social and
governance topics relevant to stakeholders that impact our business. In 2022, we
conducted such impact analysis on the basis of desk-study and intensive dialogue
with clients, suppliers, government, financers and employees during one-on-one or
one-on-few meetings. In 2022 this was for a large part the case in relation to our
P11 expansion plans. To get a broader and more integrated view and to assess the
significance of the topics, we have scheduled stakeholder interaction sessions for
2023. In these sessions we will discuss our strategy and we aim to prioritize the
most significant topics that impact Sif and the different stakeholders as defined by
the EU Sustainability Reporting Standards (ESRS).
In 2022 we had interactions with several industry-related stakeholders to discuss
material industry issues. One example is our commitment to the Offshore Wind
Foundations Alliance, a coalition founded by experienced European offshore wind
foundations manufacturers to jointly pursue a coordinated EU-policy on the supply
of foundations for offshore wind farms in Europe.
Already in 2020, Sif joined the getting-to-zero coalition to jointly give a push to
accelerating maritime shipping's decarbonization with the development and
deployment of commercially viable deep-sea zero-emission vessels by 2030 ‘Getting
to Zero Coalition’ (globalmaritimeforum.org).
Material topics
Unprioritized topics that impact Sif’s business and seem relevant to stakeholders:
Recruiting, training and retaining labor Investments, returns and earn back
Safe and healthy working conditions Timely and flawless delivery
Limited sourcing steel plates and flanges Pay-for-performance, equal pay
Earnings predictability Circularity of materials
Large shareholder overhang and liquidity
of shares
Unit growth; impact on LCOE and
supplychain
Nitrogen deposition, carbon emission Disturbance of sea life and bio diversity
Lead times of projects and capacity
utilization
We are convinced that dialogues with business partners, financers, employees lead
to substantive results and stimulates innovation. Examples of our stakeholder
consultations and the topics that were discussed in 2022:
2022Sif Annual Report
32
Stakeholder Topics discussed
Employees, schools
and Works Council
Recruit, train and retain
skilled labor
Labor markets for skilled labor are tight. Sif recruits internationally through staffing agencies. For more permanent
positions, Sif maintains in close contact with technical schools and educational institutes and is often represented at
Labor trade fairs. Sif applies the master-student principle for training rolling and welding specialists. The planned
expansion of production facilities will require an additional 100 FTE. For that purpose, Sif has initiated a recruitment
plan in 2022, including an extensive labor market recruitment campaign.
Safety and healthy working
conditions
Most of our employees have limited access to online communication tools during working hours. Quarterly town-hall
meetings and information sessions at shift changing moments are used to interact with the workforce. In 2022 this
was done amongst others to talk about safety and about the job-appraisal and remuneration policy Sif has recently
introduced.
Interactive dialogue is held with (representatives of) the Works Council. In 2022 five meetings took place of the Works
Council and executive management during which consultations were done on topics like HSE (Health, Safety,
Welfare), investments amongst others in manufacturing facilities, impact of the war in Ukraine and working
conditions. Availability of skilled employees, remuneration and working conditions (safety in relation to increasing
product sizes more in particular) were items of concern for the Works Council. Once in 2022 the Supervisory Board
member that was recommended for appointment by the Works Council participated in a meeting. Various project
related meetings were held on both P11 and the appraisal and remuneration policy.
Pay-for-performance, equal
pay for equal work
Sif has a large representation of foreign labor, often coming from Eastern European countries. Sif applies pay-for-
performance and equal pay for equal work as standard conditions. Same applies to work by different genders,
religions, races and ages.
2022Sif Annual Report
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Stakeholder Topics discussed
Shareholders and sell-
side analysts
Earnings predictability Post releases of interim and full year results, we discuss results with sell-side analysts. These presentations are
audio-webcast and transcript, both archived on our website. During the year, except during black-out periods, we are in
contact with sell-side analysts and investors on a regular basis to discuss amongst others the dynamics of the
industry, the effects thereof on Sif-earnings and Sif’s financial, social and environmental plans and performance.
Investments and earn back
periods
To discuss strategic developments, we occasionally organize capital markets days for which we invite a broader
audience. These events are also webcast.
The strategic direction and earn back of investments are discussed at these occasions.
Large shareholder overhang
and liquidity of shares
In 2022 we talked to our largest shareholder Grachtenheer 10 (49.2% of issued shares) under the confidentiality
arrangements of the Relationship Agreement during 19 meetings, mainly about expansion plans.
Suppliers Limited sources for delivery
of steel plates and flanges
We view our suppliers and subcontractors as long-term co-makers and we work closely with them on production but
also in areas such as innovation and circularity and supply chain integrity. For that purpose, we organize regular
audits at the plants of our suppliers.
Circularity of materials We are in close contact with other parties in the supply chain to establish and solve constraints to circularity of
materials, mostly steel.
2022Sif Annual Report
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Stakeholder Topics discussed
Customers Lead times of projects and
capacity utilization
On average, Sif has between three and six ongoing projects in any year. The development and construction time of
offshore wind farms is between 7 and 11 years. It often takes between 3 and 6 years to build and grid-connect a wind
farm. A large wind farm often includes between 70 and 90 turbines, less than 50% of Sif’s annual production capacity
of 200 monopiles; actual manufacturing of the monopiles by Sif generally takes less than 1 year. Including
preparations before and load-out after the manufacturing, the total throughput time of a contract for Sif normally
exceeds 1 year. We are in constant touch with our clients from the tender phase through to the delivery phase. This
implies we have close and long relationships with our clients, who often buy our products and services based on co-
development.
Timely and flawless delivery
in support of unthwarted
logistics operations
Timely and flawless delivery are key for our customers. To control this, they audit our works and working-methods on
a frequent or sometimes ongoing basis. We engage with our clients on a person-to-person basis, and we meet clients
and potential clients at trade shows or other events. In 2022 Sif held two digital customer satisfaction surveys just
after closing of a tender process. The results of these surveys contribute to manufacturing improvement
opportunities.
A feedback template has been made for project evaluation, which we customize to the specifics of each customer or
new project. General feedback indicates Sif's high reliability and quality products and services.
Turbine capacity, unit growth
and impact on LCOE and
supply chain
With a view to the longer term (the period from 2025), we engaged with our clients to discuss their plans to increase
turbine capacity. Increases may result in demand for bigger foundations and may require Sif to invest in adjustment
or expansion of production skills and facilities. Our shared mission was to establish at what level the price per MW
production would still benefit from increased capacity offset against the expenses this increase would command. To
get a clear view, we engage with other parties in the supply chain that need to adjust or increase size: installation
companies for their vessels and equipment, flange suppliers, steel manufacturers etc.
2022Sif Annual Report
35
Stakeholder Topics discussed
Lenders, Banks,
Insurance companies
Healthy earn back period
(returns on average capital
employed)
Sif finances its business through equity and bank facilities. We keep the banking syndicate informed of our risk
management and guide them on future results and expectations of activities. We communicate through bank
meetings, on a one-on-one basis, and quarterly reporting. This is subject to the rules of our Fair Disclosure Policy.
Governments and
industry bodies, NGO’s
Supply chain alignment Governments make decisions regarding energy-sourcing and commit to sustainability targets. They issue regulations,
initiate wind energy projects, and sometimes subsidize innovations or projects. We communicate through media and
at networking events as well as directly with governmental representatives. The Dutch Minister for Climate and
Energy, Mr. Rob Jetten, visited the Maasvlakte 2 factory in late 2022.
Nitrogen deposition, carbon
emission
Governments issue permits for operations. In 2022 we were in close dialogue on the environmental, nature and
building permits for expansion of the manufacturing facilities at Maasvlakte 2, Rotterdam.
Disturbance of sea life and
bio diversity
Tuning developments with the various parties in the supply chain can improve efficiency and benefit the required
energy transition. Companies involved in the design and manufacturing of foundations have joined forces in the
Offshore Wind Foundations Alliance to pursue a level playing field and standardization of certification processes
related to the foundations of offshore wind turbines. The Offshore Wind Foundations Alliance is an interlocutor for the
European Union and EU member states and a platform for setting standards and for protection of the industry.
Ranking agencies and
consultants
Industry and sustainability analysts closely track Sif, our competition and our markets. We are in a permanent
dialogue with industry and sustainability analysts and participate in the sustainability surveys of CDP, ISS and MSCI.
Results of these ESG surveys are included in our website under ESG.
Local residents,
neighbors
Safety and incident
management
Sif’s plants involve traffic flows, heavy transport movements, nightwork and may cause noise pollution. Although they
are in industrial areas, we may cause nuisance. We maintain contact with our neighbors and guide them on activities
we undertake, especially during night and weekend hours. In 2022 we organized information sessions for neighbors of
the Roermond factory in respect of the gas explosion in August 2022.
Media Our website is an archive of developments at Sif and a medium to disclose information and news. We are also active
on Linkedin (11,000 followers, 63 posts in 2022) and Facebook.
2022Sif Annual Report
36
Our Performance in 2022
The European Green Deal: EU taxonomy and CSRD
Introduction and understanding of the assessment
In pursuit of a 55% reduction in greenhouse gas emissions in the European Union
(“EU”) by 2030 from 1990 levels and the objective of becoming climate neutral by
2050, the EU has issued laws and regulations as an element of the European Green
Deal.
This includes Transparency Regulations and the EU Taxonomy that entered effect in
March 2021 and January 2022 respectively. The EU taxonomy for sustainable
activities, i.e. ‘green taxonomy’, is a classification system to clarify which economic
activities are environmentally sustainable, in the context of the European Green Deal,
a set of policy initiatives by the European Commission supporting the ambition of
the EU to be climate-neutral by 2050. The EU taxonomy was adopted by the
European Union with Regulation 2020/852, and requires entities to assess and
disclose the percentage of environmentally sustainable economic activities for the
proportion of revenue, capital expenditures and operational expenditures. The
Taxonomy Regulation is relatively new and there are after the first year of reporting
(2021) still significant uncertainties around its phased implementation. It is
expected, however, that the EU Taxonomy will develop into a comprehensive and
detailed framework over the coming years. Sif closely monitors EU taxonomy
developments, to ensure correct assessments of, and full compliance with, the EU
taxonomy reporting requirements.
The EU taxonomy comprises six environmental objectives to identify
environmentally sustainable economic activities: climate change mitigation, climate
change adaptation, the sustainable use and protection of water and marine
resources, the transition to a circular economy, pollution prevention and control, and
the protection and restoration of biodiversity and ecosystems.
Accordingly, an economic activity is defined as environmentally sustainable if it
meets the technical screening criteria:
Substantial contribution criteria: the activity contributes substantially to at least
one of the six environmental objectives;
>
Do no significant harm (DNSH) criteria: the activity does no significant harm to
any of the other environmental objectives;
>
Minimum safeguards criteria: the activity is carried out in compliance with
minimum safeguards.
>
The EU taxonomy provides a standardized, science-based classification system,
including technical screening criteria, in order to create transparency in non-financial
statements. In 2022, Sif is required to disclose what proportion of its revenue, its
capital expenditure, and operating expenditure is reported as eligible and aligned
under the EU taxonomy on the first two objectives (climate change mitigation and
climate change adaptation).
Sif has completed an assessment of its activities that are eligible for, and aligned
with, the EU taxonomy. Details of the assessment and definitions of the specific
KPI’s as used for the EU taxonomy are explained in section ‘EU taxonomy
assessment details’.
Identification of eligible economic activities
All the activities within the Group’s portfolio included in the Climate Delegated Act
have been identified. This process considered activities under the climate change
mitigation and climate change adaptation objectives. The eligible economic activities
of Sif are:
3.1 Manufacture of renewable energy technologies (Production of monopiles,
transition pieces and pin piles for the offshore wind market, NACE code C25.11)
>
9.1 Close to market research, development and innovation (Providing
engineering services for projects in the markets of renewable energy, NACE code
M71.12).
>
Analysis of substantial contribution
The eligible activities identified in the previous phase is analyzed to verify the
compliance with the substantial contribution criteria for climate change mitigation or
climate change adaptation.
2022Sif Annual Report
37
The production of monopiles, transition pieces and pin piles for the offshore wind
market and the engineering services for projects in the markets of renewable energy
is for the sole purpose of enabling offshore renewable energy production, which
contributes significantly to climate change mitigation and therefore this activity fully
contributes to the climate change mitigation objectives.
Assessment of not causing significant harm to the other environmental
objectives (Do No Significant Harm or DNSH)
An analysis of existing environmental procedures was performed to verify
compliance of the eligible activities with the DNSH criteria. Sif has evaluated these
DNSH criteria to establish enough detail for the procedures involved, whereby for
example:
A climate risk and vulnerability assessment are performed on the manufacturing
process and logistic flows within Sif;
>
An analysis is performed on the reuse, recycling and other material recovery of
waste;
>
Studies are performed related to a cradle-to-cradle circularity on the future
decommissioning challenges of wind farms;
>
For substantiation of the DNSH’s biodiversity criteria, Sif relies on the
environmental permits, which prescribes that an Environmental Impact
Assessment is performed when required by the Dutch implementation of
Directives 2014/52/EU.
>
Non-compliance with any of the DNSH criteria results in a ’eligible-not aligned’
outcome of the assessment.
Verification of compliance with minimum safeguards
Sif has verified if the eligible economic activities are carried out in compliance with
minimum safeguards. Four core topics have been identified:
Human rights, including workers’ rights;>
Bribery and corruption;>
Taxation;>
Fair competition.>
For each of these topics, Sif assessed the steps of the due diligence process
described in the minimum safeguard requirements:
Embed responsible business conduct into policies and management systems;>
Identify and assess adverse impacts in operations, supply chains and business
relationships;
>
Cease, prevent or mitigate adverse impacts;>
Track implementation and results;>
Communicate how the topics and related measures are addressed.>
Calculation of financial metrics
In concluding the outcome of the four previous steps, Sif has classified all the
economic activities across its portfolio in the following three categories: eligible-
aligned, eligible-not aligned, and not-eligible. The explanations related to each of
these categories are presented in section ‘EU taxonomy assessment details’.
In order to arrive at the EU taxonomy KPI’s – the proportion of revenue, capital
expenditure (capex) and operational expenditure (opex), Sif mapped its financial
performance to the relevant EU taxonomy aligned economic activities. Details are
reported in in section ‘EU taxonomy assessment details.’
Conclusion of the assessment
The conclusion of Sif’s 2022 EU taxonomy assessment is disclosed below.
2022
Revenue Capex Opex
Total (€ '000) 374,543 29,696 11,921
Taxonomy eligible-aligned 0% 0% 0%
Taxonomy eligible-not aligned 95% 97% 94%
Taxonomy not eligible 5% 3% 6%
2022Sif Annual Report
38
In 2022, in total 95% of revenue was generated by business activities which are EU
Taxonomy eligible (3.1 Manufacture of renewable energy technologies and 9.1 Close
to market research, development and innovation). This activity is assessed to
contribute significantly to climate change mitigation and therefore this activity fully
contributes to the climate change mitigation objectives.
Based on the assessment of the DNSH-criteria and the verification of compliance
with minimum safeguards, Sif concludes that the activity is not aligned with the EU
Taxonomy yet. Sif is currently in the process of assessing its compliance with the
criteria in relation to pollution prevention and control (Appendix C of Annex I of
Regulation (EU) 2020/852). The criteria include an extensive overview of
substances that should not be used in the process of manufacturing to be able to
comply. Sif uses various types of coating and substances for weld testing which can
vary project by project, and Sif is in the process of identification of the relevant
substances included.
Furthermore, Sif is in the process of preparing a human rights impact assessment in
line with OECD Guidelines for Multinational Enterprises and the UN Guiding
Principles on Business and Human Rights. Therefore, Sif does not report compliance
with minimum safeguards in relation to the EU Taxonomy alignment assessment.
EU taxonomy assessment details
This appendix contains an elaboration on the EU taxonomy eligibility and alignment
assessment, following on from the previous section.
Definitions of eligibility and alignment
The EU taxonomy requires companies to examine whether an economic activity is
included in the Delegated Regulation 2020/852 by the European Commission
(eligibility) and whether or not these eligible economic activities are environmentally
sustainable (alignment). The following categories are identified:
Eligible-aligned: this refers to an economic activity that simultaneously meets the
following three conditions:
it is explicitly included in the EU taxonomy regulation for its substantial
contribution to climate change mitigation and/or adaptation;
>
it meets the substantial contribution criteria in the EU taxonomy regulation for
this specific environmental objective;
>
it meets all Do No Significant Harm (DNSH) criteria and minimum safeguards.>
Eligible-not aligned: this refers to an economic activity that:
is explicitly included in the EU taxonomy regulations for its substantial
contribution to climate change mitigation or adaptation; but
>
it does not meet the specific criteria in the EU taxonomy regulation for these
specific environmental objectives; or
>
it does not meet at least one of the DNSH conditions and/or the minimum
safeguards.
>
Not eligible: this refers to an economic activity that has not (yet) been identified by
the EU taxonomy as a substantial contributor to climate change mitigation or
adaptation and, therefore, no criteria have been developed. The rationale of the
European Commission is that such activities may not have a significant impact on
climate change mitigation or adaptation, or may be integrated into the EU taxonomy
regulation at a later stage.
Clarification and definitions
The consolidated financial statements of Sif have been prepared in accordance with
IFRS (EU). Sif reconciled the denominators for revenue, capital expenditure, and
operational expenditure with the reported data in the consolidated financial
statements, or in the underlying records, to mitigate the risk of double counting.
The basis for the calculation of the EU taxonomy eligibility and alignment metrics for
respectively revenue, capital expenditure and operational expenditure are based on
the following definitions:
Revenue
Revenues accounted for in the Consolidated statement of profit or loss in
accordance with International Financial Reporting Standards as adopted by the
European Union (EU-IFRS). Reference is made to section 3.3 Summary of significant
accounting policies for more information and note 6 of the Consolidated financial
statements regarding the revenues accounted for.
2022Sif Annual Report
39
Capital expenditure (capex)
Additions to tangible and intangible assets and right-of-use assets accounted for in
the Consolidated financial statements under EU-IFRS during the financial year,
considered before depreciation, amortisation and any re-measurements. The capex
cover the costs accounted for in accordance with IAS 16 (Property, Plant and
Equipment, IAS 38 (Intangible assets), IAS 40 (Investment property) and IFRS
16 (Leases). For more information, reference is made to note 14, 15 and 31 of the
Consolidated financial statements. Any leases that do not result in the recognition of
a right to use the asset are not accounted for as capex.
Operational expenditure (opex)
The operating expenditure covers direct, non-capitalized costs relating to research
and development, renovation measures, short-term lease, maintenance and other
direct spending relating to the day-to-day servicing of assets of property, plant and
equipment that are necessary to ensure the continued and effective use of such
assets.
Financial metric calculation process
Eligible activities assessment
Sif has five activities in financial year 2022:
The production of monopiles, transition pieces and pinpiles for the offshore wind
market. This activity is entirely mapped to NACE code C25.11 “Manufacture of
metal structures and parts of structures”. The activity is EU taxonomy eligible as
activity 3.1 Manufacture of renewable energy technologies.
1.
The production of piles and legs for the offshore oil and gas market. This activity
is entirely mapped to NACE code C25.11 “Manufacture of metal structures and
parts of structures”, but as it relates to the oil and gas market the activity is not
EU taxonomy eligible.
2.
Marshaling and logistics services to clients for their offshore wind installation
activities. This activity is mapped to NACE code H52.22 “Service activities
incidental to water transportation”, which includes “operation of terminal
facilities such as harbors and piers”. As these activities are not related to Sif’s
activities, those activities in this area are not EU taxonomy eligible;
3.
Engineering services for renewable energy, oil and gas and leisure. Concerning
engineering services for the renewable energy market, the engineering services
enable the economic activities of Sif’s customers to meet the criteria for
a substantial contribution to climate change mitigation. The operators of wind
farms and installation vessels are applying the results of the engineering service
in their contribution to renewable energy technologies. This activity is mapped to
NACE code M71.12 and EU Taxonomy eligible as activity 9.1 Close to market
research, development and innovation. The engineering activities related to the
oil and gas and leisure market are not enabling Sif’s customers to meet the
criteria for making a substantial contribution to climate change mitigation;
4.
Renting out the wind turbine generator once the certification period is completed
and ownership of the wind turbine generator is transferred to Sif. This activity
relates to renting out the wind turbine generator (WTG). As these activities are
not associated with Sif’s activities, those activities in this area are not EU
taxonomy eligible.
5.
Therefore, Sif has two EU Taxonomy eligible activities:
3.1 Manufacture of renewable energy technologies (Production of monopiles,
transition pieces and pinpiles for the offshore wind market)
>
9.1 Close to market research, development and innovation (Providing
engineering services for projects in the markets of renewable energy)
>
Process eligibility assessment
Based on article 8(2) of the EU Taxonomy Regulation, the portion of revenue, capital
expenditure (capex) and operating expenditure (opex) that relates to assets or
processes associated those economic activities is assessed.
Revenue-eligibility
The allocation of the portion of revenue to the economic activities is performed
based on the underlying projects, which is also the basis for the segment reporting
in the Consolidated financial statements. This is applicable for the first four activities
identified above. The last activity is accounted for in a separate legal entity.
2022Sif Annual Report
40
Capital expenditure - eligibility
The eligibility scan for capital expenditures in 2022 (Capex additions) was
performed in line with the eligibility scan for revenue. For each of the additions was
determined if there was a
specific allocation possible to an economic activity as described above. Most of the
capital expenditures are specifically associated with the production activities 1 and
2. The allocation between the two activities is done based on the relative production
output of the activities. The allocation of the remaining capital expenditures is done
based on the nature of the Capex.
Operational expenditure – eligibility
The expense accounts identified from the Consolidated statement of profit or loss to
determine operational expenditures according to the EU taxonomy definition are the
following:
Production and general manufacturing expenses>
Facilities, housing and maintenance>
General expenses>
Within these financial statement accounts, an assessment is done on the level of
general ledger which amounts meet the definition of Opex in the EU Taxonomy. The
method of allocation of Opex to economic activities is aligned with the allocation of
Capex.
The assessments above result in the following EU Taxonomy eligible overview:
2022 2021
Revenue Capex Opex Revenue Capex Opex
Taxonomy eligible
activities
95% 97% 94% 98% 55% 93%
Taxonomy non-
eligible activities
5% 3% 6% 2% 45% 7%
Total (€ '000) 374,543 29,696 11,921 422,541 15,642 10,603
Reference to FS Note 6 Note 14,
15, 31
Alignment assessment
For the purpose of the taxonomy alignment assessment of the revenue in the
eligible activities, Sif performed an assessment of the process-steps in its projects,
which are generally comparable over all projects in these activities. Sif’s alignment
assessment includes the analysis of all substantial contribution criteria and Do Not
Significant Harm criteria for the relevant objectives.
For the assessment and disclosures in 2022, Sif has allocated all capex and opex to
the economic activities based on the eligibility percentages of the revenue KPI.
Sif has not issued environmentally sustainable bonds or debt securities with the
purpose of financing specific identified Taxonomy-aligned activities.
Disclosure tables
In 2022, the level of alignment of Sif’s economic activities with the EU taxonomy due
to their substantial contribution to climate change mitigation and climate change
adaptation objectives, in compliance with the principle of not doing significantly
harm to other environmental objectives (DNSH) and the minimum safeguards, is
included in the following tables:
2022Sif Annual Report
41
PROPORTION OF REVENUE ASSOCIATED WITH EU TAXONOMY-ALIGNED ECONOMIC ACTIVITIES
Substantial
contribution to Do no significant harm to
Economic activities
Tax-
onomy
code
Absolute
revenue 2022
Proportion of
revenue 2022
Climate
change
mitiga-
tion
Climate
change
adapta-
tion
Climate
change
mitiga-
tion
Climate
change
adapta-
tion
Water
and
marine
resources
Circular
economy Pollution
Bio-
diversity
and eco-
systems
Minimum
safe-
guards
Taxonomy
aligned
proportion of
Revenue
Enabling
activity
Trans-
itional
activity
€ '000 % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. EU Taxonomy eligible activities
A.1 Environmental sustainable
activities (eligible-aligned)
- 0% 0%
Revenue of environmentally
sustainable activities (eligible-
aligned)
- 0% 0%
A.2 EU taxonomy-eligible but not
environmentally sustainable
activities (eligible-not aligned)
3.1 Manufacture of renewable energy
technologies
C25.11 352,863 94% 100% Y Y Y N Y N 0%
9.1 Close to market research,
development and innovation
M71.12 2,802 1% 100% Y Y Y Y Y N 0%
Revenue of EU taxonomy-eligible
but not environmentally sustainable
activities (eligible-not aligned)
355,665 95% 0%
Total revenue of EU taxonomy
eligible activities (A.1+A.2)
355,665 95% 0%
B. EU taxonomy not-eligible
activities
Revenue of taxonomy not-eligible
activities
18,878 5%
Total (A+B) 374,543 100%
2022Sif Annual Report
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PROPORTION OF CAPEX ASSOCIATED WITH EU TAXONOMY-ALIGNED ECONOMIC ACTIVITIES
Substantial
contribution to Do no significant harm to
Economic activities
Tax-
onomy
code
Absolute
Capex 2022
Proportion of
Capex 2022
Climate
change
mitiga-
tion
Climate
change
adapta-
tion
Climate
change
mitiga-
tion
Climate
change
adapta-
tion
Water
and
marine
resources
Circular
economy Pollution
Bio-
diversity
and eco-
systems
Minimum
safe-
guards
Taxonomy
aligned
proportion of
Capex
Enabling
activity
Trans-
itional
activity
€ '000 % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. EU Taxonomy eligible activities
A.1 Environmental sustainable
activities (eligible-aligned)
- 0% 0%
Capex of environmentally
sustainable activities (eligible-
aligned)
- 0% 0%
A.2 EU taxonomy-eligible but not
environmentally sustainable
activities (eligible-not aligned)
3.1 Manufacture of renewable energy
technologies
C25.11 28,497 96% 100% Y Y Y N Y N 0%
9.1 Close to market research,
development and innovation
M71.12 338 1% 100% Y Y Y Y Y N 0%
Capex of EU taxonomy-eligible but
not environmentally sustainable
activities (eligible-not aligned)
28,835 97% 0%
Total Capex of EU taxonomy eligible
activities (A.1+A.2)
28,835 97% 0%
B. EU taxonomy not-eligible
activities
Capex of taxonomy not-eligible
activities
861 3%
Total (A+B) 29,696 100%
2022Sif Annual Report
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PROPORTION OF OPEX ASSOCIATED WITH EU TAXONOMY-ALIGNED ECONOMIC ACTIVITIES
Substantial
contribution to Do no significant harm to
Economic activities
Tax-
onomy
code
Absolute
Opex 2022
Proportion of
Opex 2022
Climate
change
mitiga-
tion
Climate
change
adapta-
tion
Climate
change
mitiga-
tion
Climate
change
adapta-
tion
Water
and
marine
resources
Circular
economy Pollution
Bio-
diversity
and eco-
systems
Minimum
safe-
guards
Taxonomy
aligned
proportion of
Opex
Enabling
activity
Trans-
itional
activity
€ '000 % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. EU Taxonomy eligible activities
A.1 Environmental sustainable
activities (eligible-aligned)
- 0% 0%
Opex of environmentally
sustainable activities (eligible-
aligned)
- 0% 0%
A.2 EU taxonomy-eligible but not
environmentally sustainable
activities (eligible-not aligned)
3.1 Manufacture of renewable energy
technologies
C25.11 11,121 93% 100% Y Y Y N Y N 0%
9.1 Close to market research,
development and innovation
M71.12 54 0% 100% Y Y Y Y Y N 0%
Opex of EU taxonomy-eligible but
not environmentally sustainable
activities (eligible-not aligned)
11,175 94% 0%
Total Opex of EU taxonomy eligible
activities (A.1+A.2)
11,175 94% 0%
B. EU taxonomy not-eligible
activities
Opex of taxonomy not-eligible
activities
746 6%
Total (A+B) 11,921 100%
2022Sif Annual Report
44
Our contribution to sustainable development goals
The European Green Deal also includes the Corporate Sustainability Reporting
Directive (“CSRD”) to replace the NFRD and to improve reporting of non-financial
information, under the CSRD referred to as sustainability information. Herewith the
EU pursues a European market that contributes to a transition to a fully sustainable
and inclusive economical and financial system. Pursuant to this CSRD and
anticipating its entry into force in 2025 when reporting on the financial year 2024, Sif
reports on environmental, social and employment matters as well as on compliance
with human rights and corruption prevention.
We aim to have a positive impact on the Sustainable Development Goals (“SDGs”)
that the United Nations have identified in their Global Compact strategy. We engage
with SDGs 7, 8, 9, 12 and 13 as shown in the figure on page 45 We explain how we
contributed to these five SDG’s of the United Nations by serving our markets and
applying our resources within the constraints and principles of our Code of Conduct.
Operational, financial, social and environmental performance
Sif’s contribution to a sustainable economy and to a limitation of
global warming to 1.5 degree Celsius
At Sif, we engineer and manufacture mission-critical components for clean energy
production. If we multiply the number of monopiles produced with the turbine
capacities that were or are installed on them, Sif has thus far contributed to
a capacity of almost 12,000 MW of clean, sustainable wind energy. In 2022 Sif
completed 130 monopiles and (primary steel for) 126 transition pieces to serve as
foundations for 1,954 MW (1,873 MW in 2021) installed offshore wind capacity.
These foundations were manufactured for projects like Dogger bank and Hollandse
Kust. In addition, there has been high activity in 2022 in marshaling and logistics for
the Siemens project Hollandse Kust. Towards the end of 2022 the activity level
decreased and space was taken from the marshaling and logistics department to
store transition pieces and to prepare for the expansion project P11. Besides the
contribution to the displacement of carbon-emitting energy, Sif has also examined
its own carbon footprint. A delineation of the targets of the company in respect of
sustainability aspects and of the progress the company has made in pursuing these
targets is reflected in the table on page 45.
‘Wind is our primary energy
solution, green steel our ambition
for the main raw material used for
plates and flanges.’
The most important effects of the activities of the company and its value chain are
the nitrogen deposition and carbon footprint of the present production of the steel,
the transportation of the steel and fabricated products and of the manufacturing of
the foundations. Ambitions to reduce the carbon footprint as well as nitrogen
deposition are reflected in the table on page 45: carbon neutral production of steel
by supplier Dillinger Hütte in 2045, carbon neutral inland transportation of steel
plates and (semi-finished) products and carbon neutral manufacturing of monopile
foundations by Sif in 2025.
End of lifetime solutions for the foundations are not yet relevant but will be in 5- or
10-years’ time when replacement of offshore wind farms is due. The supply chain
has set a target for full circular production and re-use of steel.
The installation of monopile foundations may have a (temporary) disturbing effect
on the seabed, sealife and bio diversity, amongst others caused by the (noise of the)
piling works at sea. This does not form part of Sif’s scope but Sif participates in
initiatives to investigate installation methods with less noise or a less disturbing
effect.
2022Sif Annual Report
45
Our commitment to the sustainable development goals
Our Commitment Our goals Our performance Our impact
Renewable energy from 2025 to reduce > 90% carbon
• All pre-heating electrical.
• All heavy transport on bio-diesel
Explore alternatives for inland shipping
Pre-heating stations transferred to electrical
SPMT’s on bio-diesel
Circular production of monopiles from 2045 Zero waste
from 2027
Confirm leadership in the global supply of monopiles;
Include scope 3 emissions for main suppliers in
reporting from 2024
Plan for the circular and carbon- neutral production of
steel for monopiles. By 2045, a sufficient supply of
green energy and hydrogen is expected to be secured
to establish complete conversion of production;
Sif participates in studies to also make floating
solutions technically and economically feasible;
Safety incidents disrupt production and impacts
witnesses to the incident.
Target LTIF of <0.75 from 2026
Sif’s limitation of carbon footprint, nitrogen deposition and use of
irreplaceable natural resources
The consumption of energy is largely determined by wall-thicknesses of products,
weather impact and production-flaws. We aim to reduce the consumption of non-
renewable natural resources (gas, oil and water) per kton production for both
manufacturing and logistics. We primarily look for replacement of fossil resources
with sustainably generated electricity, bio-fuels or hydrogen. We also pursue
reduction of the amount of waste per kton production. The products Sif consumes
the most during the manufacturing process are shown below.
2022Sif Annual Report
46
SIF ENVIRONMENTAL FOOTPRINT
USAGE PER KTON STEEL 2022 2021 2020 2019
Steel (Kton) 169 171 164 185
Welding powder (ton) 10.7 9.4 10.0 10.1
Welding wire (ton) 10.2 8.6 8.8 9.0
Natural Gas (cubic meters) 3,459 2,826 2,239 2,861
Propane (kilogrammes) 4,835 5,098 4,402 4,576
Electricity (megawatthour)) 114.6 101.3 103.4 104.8
Water (cubic meters) 43.7 59.3 40.8 42.2
Scrap metal (ton) 22.5 22.9 33.0 31.5
Oxygen (cubic meters) 10.6 10.5 8.7 9.7
Table: reflects the consumption per kton manufactured
We use water mainly for corrosive protection activities like blasting and coating and
for cleaning of finished products before these are delivered to the customer.
Consumption per kton finished product decreased by 26% in 2022 from
59.3m3/kton in 2021 to 43.7 m3/kton.
In 2022 Sif had 4% residual waste per kton steel, the same percentage as in 2021. Of
all waste materials, 97.7% was recycled compared to 96.6% in 2021.
In 2022 Sif used 70,134 gigajoule energy (68,975 gigajoule in 2021) in its production
process. The increase by 1.7% relates to weather conditions during the first half of
the year (it was colder in January-May 2022 compared to the same period in
2021 which requires more gas for pre-heating). It furthermore relates to the
diameters and wall-thicknesses of monopiles that were larger in 2022 compared to
2021 and therefore required more pre-heating and finally it relates to the impact of
coating systems that required longer heating of coating-halls.
CARBON FOOTPRINT
2022 2021 2020 2019 2018
Production Kton 169 171 164 185 138
CO2 emission *
Scope 1 - Direct emissions
from owned or controlled
sources
3,479 3,551 3,020 4,064 5,620
Scope 2 - indirect GHG
emissions associated with the
purchase of electricity, steam,
heat, or cooling
10,231 9,628 9,429 10,776 9,806
- Compensation by
Guarantees of Origin
(3,496) (5,919) (9,047) (10,776) (9,806)
Total Scope 2 6,735 3,709 382 - -
Scope 3 - other indirect
emissions
208 118 136 328 246
Total gross CO2 emission 10,422 7,378 3,538 4,392 5,866
Net CO2 emission 10,422 7,378 3,538 4,392 5,866
Gross kg per Kton 61.7 43.1 21.6 23.7 42.5
Prior period numbers are restated, reference is made to next page for more information*
The reported CO2 emissions for 2021 and 2020 have been restated in 2022. During
2021 and 2020 an incorrect carbon emission factor was applied to convert the
electricity usage to carbon emissions as result of a change to a new energy
contract. The impact of the restatement is an increase of the gross CO2 emissions
by 9,628 tonnes in 2021 and by 7,205 tonnes in 2020.
2022Sif Annual Report
47
In addition to the restatement as set out above, Sif has decided in 2022 to
compensate only the reported CO2 emissions in relation to scope 2 with Certificates
of Origin of wind energy (in previous year: all reported scope 1, 2 and 3 emissions),
to bring their reporting criteria more in line with the Green House Gas protocol.
Certificates of Origin were purchased from the electricity supplier up until
31 January 2020. Starting from February 2020 Certificates of Origin are generated
by the Wind Turbine Generator on Sif’s premises. The reported CO2 emissions for
2018 up to 2022 have been adjusted to reflect this change and the reporting criteria
have been updated (section ‘Reporting Criteria’) accordingly.
After compensating of the adjusted gross CO2 emissions with guarantees of origin,
the adjusted net CO2 emissions amount to 7,378 tonnes CO2 for 2021 and 3,538 for
2020. As a result, Sif incorrectly claimed that the gross CO2 emission were
compensated to zero in 2021 and 2020.
The change in reporting criteria has also been applied on the 2019 and
2018 CO2 emissions, resulting in an increase of the net CO2 emissions by
402 tonnes for 2019 and 3.434 for 2018.
Below the overview of the restatements based on the former reporting criteria
(Restated former) and the current (revised) reporting criteria (Restated current).
CARBON FOOTPRINT PRIOR YEAR ADJUSTMENTS, IN RELATION TO CURRENT AND FORMER REPORTING CRITERIA
2021 2020 2019 2018
Restated
(current)
Restated
(former)
Reported
previously
Restated
(current)
Restated
(former)
Reported
previously
Restated
(current)
Restated
(former)
Reported
previously
Restated
(current)
Restated
(former)
Reported
previously
Gross CO2 emission 7,378 13,297 3,669 3,538 10,361 3,157 4,392 4,392 4,392 5,866 5,866 5,866
Net CO2 emission 7,378 7,378 - 3,538 3,538 - 4,392 3,990 3,990 5,866 2,432 2,432
Sif pursues reporting on the full scope 3 emissions and is talking to its main
suppliers on the provision by them of the necessary information.
Environmental management systems are in line with ISO 14001. The facilities in
Roermond comply with EU Directive 2010/75/EU (on industrial emissions).
Sif’s crusade for a safe and healthy workplace
Healthy and safety working conditions is a priority at Sif. Our manufacturing staff
are SCC (Safety Health and Environment Checklist Contractors) or VCA**
certificated. Our safety management systems are in accordance with ISO
45001 (Occupational Health and Safety Assessment Series), and safety is the first
item on the agendas of all Supervisory Board and Executive Board meetings.
2022Sif Annual Report
48
We have recorded LTIF for many years. This was 6.50 per million hours worked in
2022 (4.98 in 2021). Next to LTIF, we record the total recordable injury frequency
(“TRIF”) that also includes restricted work injuries and medical treatment injuries
that have not resulted in lost time. TRIF provides insight into the total number of
incidents and therefore offers better tools for action in the workplace. TRIF was
18.56 per million hours worked in 2022 (19.94 in 2021) and related to 42 incidents
(49 in 2021), 7 at our Maasvlakte plant and 35 in Roermond (Total Injury Frequency,
“TIF”). Of these incidents, 7 resulted in lost time, 1 in restricted work, 12 required
medical treatment and 22 required first aid. Most LTI were a result of injuries related
to hands and fingers (4) and were incurred during vertical transportation, hoisting
and grinding. In one case, the injury to the employee’s hand is permanent. All other
cases were of such nature that 100% recovery and return to the working place was
possible. Root cause analysis indicated that incidents were caused by (lack of)
awareness of procedures in changing working situations and availability of the right
operating instructions for equipment. Corrective actions have been implemented to
avoid repeat effects and will be monitored using recently introduced Capptions
software.
Both performance indicators LTIF and TRIF ended well above the target, and extra
efforts are required to reach the 2023 targets for safe operations. These efforts
emphasize cultural aspects that should result in better safety awareness, especially
where we are manufacturing to the limits of our production facilities. Audits from
clients and certification institutions addressed management of Sif with findings on
these working conditions as did labor inspection. This resulted in corrective actions,
as did incidents, observations of unsafe situations, HSE observation visits and
management inspections. Corrective actions included toolbox meetings, incident-
investigations and client-meetings. Ergonomics and further automation in the
production halls should help to structurally reduce the number of incidents from
2023. As should the follow-up of the 7 Life Saving Rules that were implemented and
the investment in expansion of the manufacturing facilities, effective 2025.
The company emergency services (‘bedrijfshulpverlening’) were trained in 2022 and
7 simulation trainings and 1 evacuation drill were organized.
In 2022 sickness absence increased to 7.9% (5.1% in 2021). A contributor to the
absence rate was people reporting ill due to COVID-19 and flu in the beginning of
2022. This resulted in an increase in short-term absenteeism. Considerable attention
is being paid to improving working conditions, including alternative positions, to
avoid wear and tear impact on employees that causes longer term absenteeism.
Together with the Works Council, a structural improvement plan with clear actions
has been developed in 2020, resulting in increased labor vitality, lowered risk of sick
leave, and a better and safer working place. Of this three-phase plan, phase two of
three continued in 2022.
The ‘Corona Crisis Response Team’ (management team, HSE manager,
communications manager, Chairman of the Works Council) stayed on duty for large
part of 2022. Measures recommended by the government were implemented and,
together with testing facilities on the job, allowed operations at Sif to largely
continue. Sif did not apply for government support in relation to COVID-19.
SAFETY STATISTICS
2022 2021 2020 2019
LTI 7 5 3 3
TRI 20 20 15 22
LTIF (per mln hours worked) 6.5 4.98 2.48 2.75
TRIF (per mln hours worked) 18.56 19.94 9.93 19.1
Sickness leave % 7.89 5.10 5.50 6.59
2022Sif Annual Report
49
In 2022 Sif updated the risk assessment that was earlier performed in 2019. In this
update with all target groups, special attention was paid to psycho-social burden
from discrimination, bullying and other misbehavior on the work floor and to noise
nuisance and to measures to prevent longer term hearing strains. Hearing protection
aids were presented as final source of prevention; hearing strains should be
prevented at the noise source. In 2022 the seven life-saving rules were implemented
and enforced. Since 2022 alle employees at Sif are VCA certified. It was
disappointing that despite these efforts, new incidents were reported. On all
incidents root cause analysis was performed. These provided management with
good insights as to behavior on the work floor and job-routines. This especially
applies to the gas explosion we had in August 2022, a high impact incident for
employees and Sif’s neighborhood that fortunately had limited immediate and visible
injuries. One employee stayed in hospital for observation but could return to work
although the psychological impact affects his functioning for Sif. A root cause
analysis was performed and labor inspection investigated the production facilities
where the explosion occurred.
Pictures: induction pre-heating to replace gas pre-heating
2022Sif Annual Report
50
Meeting our objectives
Objective Measurement Target 2022 Realized 2022 Target 2023 Target 2026
1 People: safe workplace LTIF <1.5 6.50 <1.5 <0.75
Healthy workplace Sick-leave < 5.0% 7.9% <5.0% <4%
Permanent education Training expenses in thousands € 400 € 285 € 500 Nd
2 Leadership: contribution to
energy transition
Participation in projects that will
result in renewable energy capacity
Nd 1,954 MW Nd Nd
Product leadership Expansion plan for state-of-the-art
production facilities
FID FID 13 February
2023
start of construction
1 April 2023
New factory
operational
Expand services Improve EPC position Integrate KCI the
Engineers
More contracts for
end-users/
developers
More contracts for
end-users/
developers
Number of EPC-
Projects in orderbook
Innovations Develop integrated transition piece
alternatives
Certify scaled model
for Skybox
Model certified 1:1 certificate 50% of orderbook TP-
less
3 Sustainability: limit waste % Recycling of manufacturing-waste 95% 97.7% 95% 95%
Natural resources Reduction of natural & propane gas
consumption
< 0.79 cubic meters
per kilogram and
<0.62 kilogram per
kilogram respectively
0.76 cubic meters
per kilogram and
0.62 kilogram per
kilogram
respectively; gas
torches replaced by
induction
<0.62 cubic meters
per kilogram and
<0.10 kilogram per
kilogram
respectively; replace
remaining gas
torches
Replace gas by
electricity
Carbon footprint Reduction of gross carbon emission no target for gross 10.4 kton gross
carbon
<2.8 kton gross
carbon
4 Strategy: emerging markets Diversify geographically Project or joint
venture in US or Asia
License agreement
GS Entec
Empire Wind USA
booked
Execute US project
Launch GS Entec
production
2022Sif Annual Report
51
5 Financial: Gearing covenant Gearing: Total debt/EBITDA (ex-IFRS
16)
<1.5 0 Nd Nd
Solvency covenant Solvency; Equity/Total assets (ex
IFRS 16)
>35% after dividend 42.1% Nd Nd
Healthy net working capital Neutral net working
capital
-82.9 Neutral Neutral
ROACE (adjusted) EBIT/average equity+loans-cash excl
lease commitments, all values are
adjusted for the effects that relate to
the research into and preparations
for the required adjustment and
expansion of our production
facilities.
ND 43.6% Nd Nd
Attractive return for
shareholders
Return for shareholders 25- 40% of net
earnings
€0.19/share = 42% of
earnings
Term loan P11 does
not allow dividends
25-40% of net earnings
Nd=not defined
Our financial performance
Reporting is based on IFRS. To assess and monitor Sif’s underlying financial
performance, the Company’s management team uses certain non-IFRS financial
indicators, such as contribution and EBITDA (reference is made to the Glossary in
this annual report for definitions). To compare previous reports and banking
covenant ratios, Sif will also use certain accounting indicators corrected for
IFRS16 effects. This mainly relates to the land lease at Maasvlakte 2.
2022Sif Annual Report
52
ACTIVITY LEVELS AND PROFITABILITY
AMOUNTS IN EUR '000 2022 2021
Wind Marshalling Other Total Wind Marshalling Other Total
- Revenue from contracts with customers 352,863 3,422 7,606 363,891 411,055 3,344 4,097 418,496
- Operational lease income - 9,084 1,568 10,652 - 2,455 1,590 4,045
Total revenue 352,863 12,506 9,174 374,543 411,055 5,799 5,687 422,541
- Raw materials (191,494) (46) (134) (191,674) (160,165) (76) (70) (160,311)
- Subcontracted work and other external charges (36,104) (30) (427) (36,561) (125,958) (100) (32) (126,090)
- Logistic and other project related expenses (14,097) (1,368) (332) (15,797) (18,180) (3,515) (215) (21,910)
Segment contribution 111,168 11,062 8,281 130,511 106,752 2,108 5,370 114,230
- Direct personnel expenses (32,329) (13) (5,268) (37,610) (28,526) (57) (3,630) (32,213)
- Production and general manufacturing expenses (17,307) 0 (174) (17,481) (11,228) 0 (10) (11,238)
Gross profit 61,532 11,049 2,839 75,420 66,998 2,051 1,730 70,779
Indirect personnel expenses (21,204) (20,208)
Depreciation and amortization (24,226) (21,712)
Facilities, housing and maintenance (4,947) (4,127)
Selling expenses (628) (632)
General expenses (12,305) (8,096)
Finance costs and impairment losses (2,013) (2,336)
Other income 90 1,345
Share of profit / (loss) of joint ventures 1 82
Total profit before tax 10,188 15,095
2022Sif Annual Report
53
Revenue, expenses and earnings
Currency effects do not affect Sif’s financial results. Revenues and expenses are
invoiced and paid in euros. The price of steel is a charge-on item. Therefore,
fluctuations in steel prices immediately affect revenues but not earnings. The level
of revenues is also subject to the structure of joint ventures; if Sif subcontracts part
of its scope, revenues of the subcontractor are accounted for in Sif’s revenues. If Sif
teams up in partnership, revenues of the joint venture partner are not accounted for
by Sif unless accounting rules dictate otherwise.
Because of the above constraints, total contribution and contribution per kton are
better performance indicators for Sif than revenue. All Sif’s activities take place in
the Netherlands, and products are as a rule delivered ‘free alongside ship’ or ‘free on
board’ Rotterdam. Less occasionally products are ‘delivered at place’. This mainly
applies to primary steel for transition pieces or pin piles for jackets. When applicable,
activities are invoiced inclusive of VAT. However, in view of the predominantly cross-
border business-to-business nature of the performances, this is not applicable in
most cases.
In 2022, the contribution (revenue minus the cost of raw materials, subcontracted
work, other external charges and logistic and other project-related expenses) at
€130.5 million was more than 14% higher than in the previous year (2021:
€114.2 million). Of the total contribution, €11.1 million was generated by marshaling
activities (€2.1 million in 2021). Contribution per kton of throughput, corrected for
marshaling and other (excluding Oil & Gas), increased to €674 per ton (2021:
€637 per ton). The increase reflects the improving pricing environment, largely
related to inflation and variation orders relating to additional storage(time). The
decrease in revenues from €423 million to €375 million reflects the contracting
structure: in 2021 Sif had projects with a relatively high subcontracting component
which explains the decrease in subcontracting from €126 million in 2021 to
€37 million in 2022. Raw materials with €192 million were much higher in
2022 compared to €160 million in 2021. This reflects the price increase in steel
prices. Escalation of steel prices during the contract period are a passthrough cost
for Sif.
After direct personnel expenses, overhead and production & general manufacturing
expenses, this resulted in gross profit of €75.4 million (20.1% of total revenues)
compared to €70.8 million (16.8% of total revenues) in 2021. Production and general
manufacturing expenses include maintenance of machinery, gas consumption,
energy consumption, support materials, and inventory of critical spare parts. The
16.8% higher direct personnel relate to higher than forecast amount of flexible
workforce we needed to complete the projects, to labor inflation (caused by
amongst others incentive premiums that also applied to the flexible workforce) and
to inefficiencies from tight labor market and unexperienced production personnel.
Production and general manufacturing expenses increased by €6.2 million, mainly
due to higher energy expenses. Sif did not apply for subsidies or other
COVID-19 pandemic-related government- or lender support. EBITDA in 2022 arrived
at €36.4 million compared to €39.1 million in 2021. The IFRS 16 impact on EBITDA
is + €14.3 million (€5.6 million in 2021). Also in 2022, Sif incurred non-recurring
expenses related directly to the adjustment and expansion project for production
facilities and business acquisitions amounting to €5.4 million (€0.3 million in 2021).
If the reported EBITDA of €36.4 million is adjusted for these results, it amounts to
€41.8 million (€39.4 million in 2021).
2022Sif Annual Report
54
RESULTS FROM OPERATIONS
X € 1,000 2022 2021
Revenues 374,543 422,541
Raw materials (191,674) (160,311)
Subcontracted (36,561) (126,090)
Logistics and other project related (15,797) (21,910)
Contribution 130,511 114,230
Direct personnel (37,610) (32,213)
Production, general manufacturing (17,481) (11,238)
Gross profit 75,420 70,779
Indirect personnel (21,204) (20,208)
Facilities, housing (4,947) (4,127)
SG&A (12,933) (8,728)
Other income 90 1,345
EBITDA 36,426 39,061
Depreciation & amortization (24,226) (21,712)
Operating result (EBIT) 12,200 17,349
Net financing expenses (2,013) (2,336)
Share in profit of joint ventures 1 82
Income tax (2,670) (3,208)
Profit after tax 7,518 11,887
Non-controlling interests 301 297
Profit after tax attributable to the Equity Holders of
Sif Holding N.V.
7,217 11,590
Tax
Sif has two manufacturing facilities, both located in the Netherlands. From
a quantity and value perspective, the most important semi-finished products are
steel plates, almost 100% of which are purchased in Germany and flanges that are
nearly all purchased in Spain. The value of shaping the steel plates into cylinders or
cones is mainly added in the Netherlands. Sometimes handling takes place by
subcontractors in Belgium when appendages or coatings are added. The value-
added tax follows the products. Revenues of €156.1 million were realized in the
Netherlands, €198.4 million in the United Kingdom, €12.4 million in Norway,
€6.7 million in other EU countries and €0.9 million in the rest of the world
(€270.7 million, €143.3 million, €0.5 million, €4.7 million and €3.3 million respectively
in 2021).
Work in the Netherlands is carried out by employees who are either on the Sif payroll
and for whom wage tax and social premiums are withheld and paid, or by
employees who work for Sif temporarily and are taxable at the agency they are
seconded by. Sif profits are subject to corporate income tax. In 2022, this amounted
to €2.7 million (€3.2 million in 2021). Sif allocates profit in the jurisdiction in which
the economic activity occurs, namely the Netherlands, and is therefore fully liable for
corporate income tax in the Netherlands. The Netherlands has no regional corporate
taxes. The standard tax rate is 25,8%. Sif receives discounts on this tax rate,
including discounts related to innovation activities and expenses. These
“Innovatiebox-discounts” relate to €0.2 million in 2022. Sif’s effective tax burden in
2022 was 26.2% compared to 21.3% in 2021. Sif does not use tax-haven
constructions.
Depreciation and amortization
In 2022, Sif invested €23.4 million in tangible and intangible fixed assets
(€12.8 million in 2021). This relates to investments in production facilities that are
sometimes associated with specific commercial projects. More than €13 million
relates to investments in (reservations of) equipment for the expansion project P11.
Sif has leased approximately 62 hectares of land in Rotterdam. As of 2019, IFRS
16 obliges Sif to capitalize the right of use for land lease and amortize this over
a period in line with the contract term. The positive effect of IFRS16 compared to
the former leasing accountant standard (IAS 17) is approximately €14.3 million on
EBITDA in 2022. The impact on net debt amounts to approximately € 107.4 million.
The depreciation of the Right-of-use assets recognized as a result of IFRS
16 amounts to €10.1 million in 2022.
2022Sif Annual Report
55
Financial Resources
Sif applies financial resources that its equity owners provide (paid-up capital,
premium and retained earnings), that lenders provide and that business partners
provide (net working capital). Sif aims for optimal financing at the lowest cost of
capital given a specific acceptable risk. These financial sources are balanced
through the dividend policy and banking arrangements, assuming minimal net
working capital requirements.
Equity
Sif Holding N.V. shares (SIFG.AS) have been listed on the Euronext Amsterdam
stock exchange since May 2016 with ISIN code NL011660485. Sif’s authorized
share capital is €25 million, divided into 125 million ordinary shares with a par value
of €0.20. At the end of 2022, 25,501,356 ordinary shares had been issued with a par
value of € 0.20 each. All the shares bear equal voting rights and are entitled to
a dividend pay out of Sif’s profit reserves (the ‘one share one vote’ principle). At the
end of 2022, market capitalization amounted to € 296 million (€ 312 million at the
end of 2021). All issued shares are fully paid up, registered, and entered into
a collective deposit by transfer to Euroclear Nederland or an intermediary. Euroclear
Nederland is listed in the shareholders’ register held by the Company. The LEI code
of 13016026 Sif Holding N.V. is 724500J0BPD5CLHCK040.
SHARE INFORMATION
2022 2021 2020 2019 2018
Closing price at year-end in € 11.60 12.24 16.54 12.50 11.66
Highest price during the year in € 13.32 19.08 17.16 14.72 19.50
Lowest price during the year in € 9.19 11.18 7.50 8.72 11.02
Average daily trading in number of shares 23,908 24,912 44,915 40,766 30,660
Market capitalization at year-end in €
1,000,000
296 312 422 319 297
Earnings per share in € 0.28 0.45 0.29 0.22 (0.08)
Dividend per share in € - 0.19 0.12 - 0.10
Average number of shares issued in 1,000 25,501 25,501 25,501 25,501 25,501
Total dividend in € 1,000 - 4,845 3,060 - 2,550
Ownership
The free float in Sif shares is approximately 40% of the issued shares as at
31 December 2022. The following holdings were disclosed under the Decree on the
Disclosure of Major Holdings and Capital Interests in Securities-Issuing Institutions
as part of the Dutch Financial Supervision Act:
REGULATORY FILING OF SHARE OWNERSHIP
(Ultimate beneficial) shareholder % of total capital
and/or voting rights
Date of disclosure Shareholders rights
Schroders Plc 5.00% 30 September 2022 Indirectly real voting rights
Moneta Asset Management 5.00% 18 May 2020 Directly real voting rights and capital
interest
The Vanguard Group 3.00% 18 November 2019 Directly real capital interest
Grachtenheer 10 BV 49.2% 17 March 2022 Directly real voting rights and capital
interest
Egeria Capital Holding B.V. 6.46% 13 April 2017 Directly real voting rights and capital
interest
2022Sif Annual Report
56
Substantial holdings (or short positions) equal to or exceeding 3% of the issued
capital of Sif Holding N.V. should be reported to the Dutch financial markets’
regulator Autoriteit Financiele Markten (Netherlands Authority for the Financial
Markets/AFM). The AFM should subsequently be notified again when the
substantial holding (or short position) reaches, exceeds or falls below a certain
threshold. Thresholds for reporting are 3%, 5%, 10%, 15%, 20%, 25%, 30%, 40%, 50%,
60%, 75% and 95%. As reflected in the table “regulatory filing of share ownership,”
the reported percentage is not necessarily the actual percentage held.
Debt
Sif had debt and guarantee facilities in 2022 with a banking consortium comprising
ABN AMRO, Euler-Hermes, ING, Rabobank and Tokio Marine, with 31 March 2022 as
the expiry date. Sif and the banking consortium agreed on an extension of the
facilities by two years, therefore now expiring on 31 March 2024. Interest is based
on Euribor plus a surcharge that depends on covenants quarterly. Total debt,
solvency and EBITDA numbers are based on ex-IFRS 16 numbers. Discounts of up
to 0.05% can be achieved when realizing certain safety and carbon footprint
sustainability targets. In 2022 these sustainability targets were not met. Therefore,
no discount was applied.
The facilities comprise:
Facility
Revolving credit facility € 100 million
Committed guarantee facility € 250 million
Leverage covenant (Total debt/EBITDA)* Max 2.5
Solvency* Min 35%
*normalized for IFRS16 effects
The debt facilities are subject to covenant ratios based on results and balance sheet
corrected for IFRS16 effects and reflected in the above table. Leverage amounted to
0.00 (0.00 in 2021), with the covenant at 2.5. Solvency was 42.1% as at
31 December 2022 (47.7% as at 31 December 2021), with the covenant at 35%.
Convenant discipline over time
2.50
2.00
1.50
1.00
0.50
0.00
Leverage covenant Actual leverage
Q1 2018 Q3 2018 Q1 2019 Q3 2019 Q1 2020 Q3 2020 Q1 2021 Q3 2021 Q1 2022
Net working capital, liquidity, cash and cash flows
Net working capital (inventories+contract assets+trade receivables+current
prepayments–trade payables–contract liabilities) amounted to -/-€ 81.5 million at
the end of 2022 compared to -/-€65.8 million at the end of 2021. Cash from
operations depends on invoicing milestones agreed with customers, subcontractors
and suppliers and did not affect revenue or earnings recognition. The balance of
cash and cash equivalents at the end of 2022 amounted to €89.8 million compared
to €73.2 million at the end of 2021. Even though Sif did not use financial
instruments in 2022, Sif may use financial instruments to reduce risks related to
interest rate volatility if required. Sif applies a non-speculative approach in this
respect.
2022Sif Annual Report
57
CASH FLOW SUMMARY
X € 1,000 2022 2021 2020 2019
Net cash from operating activities 50,360 91,230 34,336 30,853
Net cash from investing activities (20,283) (11,493) (4,927) (14,485)
Net cash from financing activities (13,446) (9,181) (28,343) (15,294)
Cash and cash equivalents at year end 89,832 73,201 2,645 2
Net debt, Solvency
Net debt at the end of 2022 was -/-€89.8 million (-/-€73.2 million end of 2021) on an
ex-IFRS16 basis and €17.6 million (€32.5 million end of 2021) under
IFRS16 reporting. The lease of land largely determines the difference at Maasvlakte
2 Rotterdam, lease-commitments amortized on the balance sheet. At the end of
2022, total equity (paid-in capital + retained earnings + non-controlling interests)
amounted to € 107.8 million on an ex-IFRS 16 balance sheet total of €256.1 million
(solvency of 42.1%) compared to €103.9 million on a balance sheet total of
€217.9 million (solvency of 47.7%) at the end of 2021. When determined on
IFRS16 basis, total equity amounted to €105.8 million, which gives solvency of
29.6% on a balance sheet total of €357.3 million.
Financial Outlook
The drive for larger MW capacity per turbine and increase of the number of turbines
has led to a Final Investment Decision in February 2023 for investments to facilitate
the foundation increases that these larger capacities require, leaving the takt time
unchanged at 200 monopiles per year. At the date of signature of this annual report,
the orderbook with 662 kton extends even into 2026 with an estimated production
output of 221 kton in 2023, 203 kton in 2024, 225 kton in 2025 and 13 kton in 2026.
Market conditions remain favorable, tender activity is high and demand is expected
to further increase, based on ambitions of governments around the globe. Supported
by an international consultant firm, Sif has assessed that annual GW-additions to
offshore wind will eight-fold during the period 2022-2030. Based on these market
conditions, Sif expects to see utilization of the expanded production facilities at
approximately 330 kton in 2025 and 375 kton in 2026. The implications of the
investment decision on Sif’s financials are highlighted in the below fact sheet P11 in
this annual report.
Adjusted EBITDA for 2023 is expected to arrive at the same level as 2022’s adjusted
EBITDA Once the expanded facilities start producing, projected EBITDA will increase
to €135 million for 2025 and to at least €160 million for 2026 and the years beyond.
Depreciation and amortization of €24.2 million in 2022 will increase to an annual
depreciation close to €50 million from 2025.
IFRS (EU) – Dutch GAAP bridge
The overview below indicates the impact of the application of IFRS (EU) as
compared to Dutch GAAP on the most important line items:
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
2022
AMOUNTS IN EUR '000 IFRS Differences Dutch GAAP
Total revenue 374,543 - 374,543
Contribution 130,511 8,101 138,612
Gross profit 75,420 8,207 83,627
EBITDA 36,426 14,396 50,822
EBIT 12,200 (4,286) 7,914
Profit after tax 7,518 (3,431) 4,087
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
2022
AMOUNTS IN EUR '000 IFRS Differences Dutch GAAP
Total assets 357,303 (107,503) 249,800
Total equity 105,764 (3,188) 102,576
Solvency 29.6% 41.1%
2022Sif Annual Report
58
Corporate Governance
Group structure and organization
Sif Holding N.V. is a public company whose shares are listed on the Euronext
Amsterdam stock exchange. Grachtenheer 10 B.V. (an Egeria company)
(“Grachtenheer”) holds a 49.2% interest in Sif (source: filing with Autoriteit
Financiële Markten (“AFM”) dated 17 March 2022).
Sif is subject to the Full Large Company Regime (‘Volledig Structuurregime’)
required by Dutch law and has a two-tier board structure. The Executive Board is
responsible for the management of Sif and consists of two Executive Board
members, one appointed CEO and one appointed CFO. The Supervisory Board
supervises and advises the Executive Board and comprises five Supervisory Board
members.
The day-to-day operations are managed by the management team that, in addition
to the CEO and CFO, has a CCO, a COO and an HR director. The most important
rights and duties of the Annual General Meeting of Shareholders are the issue of
additional shares or the granting of rights to them, the authorization to acquire fully
paid-up shares, the reduction of issued share capital, the approval of material
changes to the identity or the character of Sif, the approval of the remuneration
policy, the appointment of Supervisory Board members, the remuneration of
Supervisory Board members, distribution of a dividend, amendments to Sif’s articles
of association, adoption of the annual accounts, discharge of Executive and
Supervisory Board members and instruction of an auditor.
Sif endorses the principles of the Dutch Corporate Governance Code 2022 (“Code”)
and applies virtually all the best practice provisions of the Code one year ahead.
Non-compliance is explained in this annual report and on the Sif website under the
Corporate Governance paragraph.
Board responsibilities
The powers of the Executive Board are set out in Sif’s articles of association and
arise from legislation and regulations. The Executive Board has adopted internal
rules regulating its organization, decision-making process and other internal
Executive Board-related matters. These Executive Board Rules are published on Sif’s
website on the Corporate Governance page.
The Supervisory Board primarily supervises the implementation of the strategy for
sustainable long-term value creation and advises the Executive Board on the day-to-
day management. In performing this task, the Supervisory Board serves the interests
of all Sif’s stakeholders: owners, clients, employees, suppliers and other
stakeholders. The Supervisory Board rules that define these duties, roles and
responsibilities are published on the Corporate Governance page of Sif’s website.
These rules imply that certain rights have been delegated by the Annual Meeting of
Shareholders to the Executive and Supervisory Boards.
Under Article 10 of the Supervisory Board rules, the Supervisory Board can install
Supervisory Board committees. The committees all have their own set of rules
defining their conduct: the audit committee rules and remuneration committee rules,
both published on Sif’s website on the Corporate Governance page. These
committees are tasked with laying the groundwork for the decision-making process
of the Supervisory Board.
The remuneration committee rules define the duties, roles and responsibilities for
the remuneration committee. They include Sif’s remuneration policy, the
remuneration of the individual Executive Board members (remuneration structure,
amount of the fixed remuneration, shares and other variable remuneration
components, pension entitlements, redundancy payments and the performance
criteria and their application), scenario analyses regarding different levels of variable
remuneration and the Supervisory Board’s remuneration report.
The audit committee rules define the duties, roles and responsibilities of the audit
committee and include supervising the effectiveness of the internal risk
management and control systems and the financial information to be disclosed by
Sif. The audit committee also oversees Sif’s compliance program, tax-planning
policy, information and communication technology, cybersecurity and financing. The
audit committee maintains regular contact with the external auditor and nominates
the external auditor for appointment by the General Meeting of Shareholders.
2022Sif Annual Report
59
Appointment and resignation of Executive Board and Supervisory Board members
The rules governing the appointment and resignation of members of the Boards are
included in Sif’s articles of association. To summarize these rules: Supervisory
Board members are appointed by the General Meeting of Shareholders with certain
rights of (enforced) recommendation for the Supervisory Board, the largest
shareholder of Sif and Sif’s works council (“Works Council”). Both the General
Meeting of Shareholders and the Works Council may recommend candidates for
nomination and appointment to the Supervisory Board. The Supervisory Board
appoints Executive Board members following notification of a proposed
appointment to the General Meeting of Shareholders. The Supervisory Board may at
any time suspend or dismiss any member of the Executive Board provided that the
General Meeting of Shareholders has been consulted about a proposed dismissal.
Appointments for members of the boards are generally for four years. The
Supervisory Board elects an Executive Board member to be the CEO. The
Supervisory Board may dismiss the CEO, provided that the CEO so dismissed shall
subsequently continue his term of office as an Executive Board member without
having the title of CEO.
Board remuneration policy
As referred to in Section 2:135b of the Dutch Civil Code. According to the
Remuneration policy, most recently approved by the General Meeting of
Shareholders in May 2020 and published on Sif’s website, the Supervisory Board
determines the Executive Board members’ remuneration.
Sif’s Remuneration policy aims to attract, motivate and retain qualified managers
with relevant experience. The remuneration policy provides a framework for a result-
driven remuneration that is linked to short- and longer-term strategic financial, non-
financial and personal objectives. The starting point is remuneration based on
achieving the best possible balance between short-term results and longer-term
value creation. To link individual remuneration to Sif’s performance, the
remuneration package includes a variable part in the form of an annual cash bonus
incentive and a long-term incentive in the form of performance shares. To ensure
the market competitiveness of remuneration, Sif offers a remuneration package
around the median level of the market with a defined peer group of industry peers
plus a range of companies of a similar scale and level of complexity. There should
be an alignment between the remuneration package of the Executive Board and the
salary conditions of the employees of Sif, partially expressed by the pay ratio level.
The main components of the remuneration policy are:
A fixed base salary. Reviewed annually based on the (index for the) cost of living;a.
Variable annual cash bonus for short-term results. Linked to the results of Sif
(one calendar year). Maximum 60% of fixed base salary for the CEO with 73%
dependent on the achievement of financial targets and 27% dependent on
personal targets. Maximum 50% of base fixed wage for the CFO with 72%
dependent on financial targets and 28% on personal targets. Financial targets
include adjusted EBITDA ex IFRS 16, contribution and adjusted ROACE. Personal
targets differ for each Executive Board member and can include safety and sick
leave, carbon footprint, corporate culture, reporting and communication. The on-
target bonus is 40% for the CEO and 35% for the CFO. Personal targets are
based on areas of responsibility and set by the remuneration committee at the
beginning of the year;
b.
Pension accrual for a pensionable salary-arrangement based on the fixed base
salary;
c.
A long-term incentive Plan (“LTIP”). Based on the discretionary award of
performance share units (“PSU”), granted annually up to a maximum pay-out of
20% of fixed base salary with a three-year vesting period, conditional upon
continued employment. Settlement is, in principle, in cash with an option to settle
in shares. A minimum holding period following vesting of the shares does not
apply unless settlement has taken place in shares. In that case, an extra two-
year blocking period applies in addition to the three-year vesting period;
d.
Executive Board members are engaged through a services agreement, which is
set at four years.
e.
2022Sif Annual Report
60
Anti-takeover measures and relationship with major shareholder
The duties and powers of the General Meeting of Shareholders, the Supervisory
Board and the Executive Board are balanced in terms of control and influence. Sif
has no actual or potential anti-takeover measures or change-of-control clauses in
place. Sif and (Egeria related) Grachtenheer 10 BV (“Grachtenheer”) have entered
into a relationship agreement. The main elements of this agreement relate to the
composition of the Supervisory Board and the Supervisory Board committees. The
relationship agreement also contains terms regarding an orderly market
arrangement and information sharing. When holding more than 50% of the shares in
Sif, Grachtenheer is entitled to nominate and propose replacements for two
Supervisory Board members. At least one of these two Supervisory Board members
must be independent as defined by the Code. When holding between 20 and 50% of
the shares in Sif, Grachtenheer is entitled to nominate and propose a replacement
for one Supervisory Board member. The Relationship Agreement will terminate once
Grachtenheer ceases to hold at least 20% of the shares in Sif. From March 2022,
Grachtenheer’s representative in the Supervisory Board, Peter Visser, withdrew from
all discussions, decision making and correspondence between the company and the
Supervisory Board in consideration of the ongoing discussions on the investment in
expansion of the company’s manufacturing facilities.
Dividends
The dividend policy stipulates that Sif will pay a regular dividend in line with the
medium-term to long-term financial performance of Sif to gradually increase the
dividend per share if and as long as earnings attributable to the shareholders are not
required for investment programs of the company. The policy states that Sif will pay
out 25% to 40% of annual net earnings as reported in the approved financial
statements of the company in any year. The retained earnings will be added to Sif’s
reserves to finance future investments or other Sif spending, improve liquidity, or
other purposes. However, achieving this reserve and dividend policy is subject to
certain legal limitations and Sif’s liquidity position. Dividends may be distributed in
cash, in stock or a combination of cash and stock as an optional dividend. For the
year 2022, the proposal for dividend-distribution will be zero in consideration of the
FID taken 13 February 2023 to invest €328 million in expansion of the existing
manufacturing facilities. Related to the expansion project 11, it is stipulated by the
lender syndicate that no dividends can be distributed for the duration of the building
activities.
Authorization to acquire and issue shares
The acquisition and issue of Sif shares are exclusively reserved to the General
Meeting of Shareholders. The General Meeting of Shareholders has authorized the
Executive Board to acquire and issue shares and limit or exclude legal pre-emption
rights. On 12 May 2022, the General Meeting of Shareholders extended the
authorization of the Executive Board to resolve, subject to Supervisory Board
approval, to issue shares or grant rights to subscribe for shares or to limit or exclude
pre-emption rights in relation to issuing shares or granting rights to subscribe for
shares by a period of 18 months (i.e. until 12 November 2023). The authorization is
limited to a maximum of 5% of the issued share capital of Sif as at 12 May
2022 plus, in the case of and related to acquisitions, mergers, unraveling of mergers
and strategic alliances, an additional 5% of the issued share capital of Sif as at
12 May 2022.
The General Meeting of Shareholders has authorized the Executive Board to acquire
fully paid-up shares subject to certain legal and statutory constraints. The Executive
Board has been authorized for a period of 18 months (therefore until 12 November
2023) to resolve, subject to Supervisory Board approval, to repurchase shares for
a price that is higher than €0.20 and that does not exceed 110% of the average
market price of the Company’s shares during the five consecutive trading days
before the date the Company decides upon the repurchase. The authorization is
limited to 10% of the Company’s issued share capital as of 12 May 2022. On
13 February 2023 a notice for an Extraordinary General Meeting of Shareholders
(“EGM”) held on 28 March 2023 was released, proposing, amongst others, certain
changes to the articles of association of the company that relate to the envisaged
financing of the project through issuance of preferred and ordinary equity and
delegation of authorizations of the Executive Board to issue equity.
2022Sif Annual Report
61
Insider trading
Sif Holding N.V. has an insider trading policy. The company secretary maintains
a list of permanent and deal-related insiders and informs insiders of all obligations
deriving from the applicable regulations. The full text of the insider trading policy is
published on Sif’s website on the Corporate Governance.
Non-Compliance with the code
The best practice provisions of the Code with which Sif does not comply are as
follows (paragraph numbers refer to the best practice provisions of the Corporate
Governance Code as revised in December 2022):
1.3.1-1.3.3 Internal audit function. Given the size of Sif and the functioning of its
corporate bodies, the Boards do not consider it appropriate at this stage to
appoint an internal auditor or set up a separate audit department. Related to this,
no third party is appointed for five-yearly performance assessment of the internal
audit function and there is no integrated audit plan. The absence of an internal
auditor is remedied by certain financial and operational (Quality Health Safety
Environmental “QHSE”) audit activities carried out by internal and external
parties;
>
1.4.1 Risk management accountability. Internal risk management and control
systems are not discussed with audit committee on an annual basis;
>
2.1.5 and 2.1.6 Policy on Diversity and Inclusion. Sif does not yet have an explicit
policy. This is expected in 2023-2024.
>
2.2.5 Committees. The Supervisory Board has not installed a Selection
& Appointment Committee. The relevant best practice conditions apply to the full
Supervisory Board
>
2.3.10 Company Secretary. The secretary of the Executive Board monitors
compliance with procedures and statutory obligations, provides the Supervisory
and Executive Boards with the necessary information and supports the
Supervisory Board during its meetings.
>
4.2.3 Meetings and presentations. Sif’s policy on provision of information is
outlined in its Fair Disclosure and Bilateral Dialogue Policy. Sif announces press
releases, presentations and press conferences in advance. Analyst conference
calls and meetings are scheduled and announced for full- and half-year
presentations and are webcast. Transcripts of the calls are published on Sif’s
website. Meetings with individual investors (‘one-on-one’) or presentations at
investor conferences are not webcast for practical reasons, nor can they be
followed through direct phone connections or otherwise.
>
2022Sif Annual Report
62
Employee representation: Works Council
Sif’s employees are represented by the Works Council, which is consulted on the
Executive Board’s intended business-economic, strategic or organizational
decisions. The Works Council has nominated Caroline van den Bosch for
appointment in the Supervisory Board. Furthermore, the Works Council, together
with the Executive Board, ensures that working conditions remain good or improve
where required, that the rules related to employment conditions, working hours and
rest periods are complied with, that employees are treated equally and remunerated
fairly and in accordance with applicable laws and collective labor agreements and
that Sif stays alert to and constantly investigates ways of employing people with
disabilities or residents of the Netherlands who have an immigrant background.
Consultation meetings between the Works Council and the Executive Board during
which the Sif’s general business progress is discussed are held on average every
two months formally and on a need-to-discuss basis as often as deemed necessary
by one of the parties. The Executive Board notifies the Works Council of the
important decisions the Executive Board is preparing and how it proposes to involve
the Works Council.
The Works Council has nine members. In 2022 the Works Council held
5 consultation meetings with the Executive Board. During three of these meetings,
the Executive Board presented and explained the strategy and the operations plan.
During these meetings, the Health-Safety-Environment policies of Sif, the Job
Evaluation System and the Sick Leave Policy were presented and discussed. The
CFO explained the annual 2021 results and the interim 2022 results in June and
September 2022 respectively. The Supervisory Board member representing the
Works Council, Caroline van den Bosch, attended 1 Works Council consultation
meeting in 2022.
The Executive Board encourages frequent and open cooperation with and
involvement of the Works Council. The discussions with the Works Council are and
were fruitful and highly appreciated by the Boards.
Diversity at board-level
As published on Sif’s website on the Corporate Governance page, the Supervisory
Board Profile defines the required expertise, experience, and competencies of the
Supervisory Board members. The Supervisory Board profile matches the profiles of
the individual Supervisory Board members. Sif will pursue the nomination of one
female candidate for appointment as Supervisory Board member during the Annual
General Meeting of Shareholders in May 2023 and another one at the next earliest
occasion thereafter.
In 2023 a diversity and inclusion policy will be presented to the Supervisory Board
for approval. This diversity policy includes provisions for the Executive Board and
permanent staff and is based on a best-candidate-for-the-job-basis. Sif’s Executive
Board has two members. Both are male. Achieving a more balanced male/female
representation is a challenge since new appointments may take a few years. The
present members of the Executive Board are appointed until 2026 and
2025 respectively. Selection of new members of the Executive Board is always
contracted to executive search consultancies. They are instructed to include
a certain percentage of female candidates on the longlist. The management team of
Sif has five members (Executive Board members included) and will expand to six
from 1
st
April 2023 when the recently appointed female director Project management
will join. All other members are male. Also, for vacancies in the management team,
search consultants are instructed to present a certain percentage female candidate
on the longlist. In the case of equal capabilities, preference is given to female
candidates. Sif targets 20% female representation in management team and middle
management from 2023 onwards.
Given the nature of the industry Sif operates in, combined with the availability of
technically educated or experienced candidates, recruitment of female members for
management positions and other (technical) staff positions appears to be
challenging.
2022Sif Annual Report
63
Gender distribution of staff
(IN %)
94.0
6.0
Male
Female
The above graph relates to permanent and flexible staff as per 31 December 2022.
The majority of Sif’s workforce, on the work floor and project management and
support staff, needs technical skills and education. About 10% of women in college
opt for technical secondary education. The proportion of women in MBO (secondary
vocational education) is higher at approximately 20%. In higher professional
education, it was also close to 20% and between 35% and 40% of the total number
of students in university education. The education council found that gender
segregation in technology is declining but still reflected in the working environment.
Staff distribution: nationalities
(IN %)
46
6
7
22
19
Dutch
German
Portugese
Polish
Other
In addition to gender, Sif pursues more balance in distribution to countries of origin
and a broader spread and better balance in terms of age.
Sif does not discriminate between men and women, native or immigrant, Dutch and
foreign, flexible or permanent or otherwise in remuneration levels and applies the
principle of equal opportunity and equal pay for equal work.
2022Sif Annual Report
64
Age distribution of permanent staff
(IN %)
2.4
35.1
55.1
7.4
18-25
26-40
41-60
61+
The above graphs relate to the situation as per 31 December 2023 and includes both
permanent and flexible staff unless indicated different.
Composition of the Executive Board
The members of the Executive Board of Sif Holding NV are:
Fred van Beers (born 1962, male, Dutch nationality, right on the picture of the
management team, CEO. He was appointed to the Executive Board and CEO for
a second term of four years following the Supervisory Board’s notification of the
intended re-appointment to the Annual General Meeting of Shareholders in May
2022. Fred van Beers worked as a business unit manager at aluminium
manufacturing company Alcoa (1989-1994) and ship propeller manufacturing
company LIPS (1995-2002) before joining Wärtsilä (technologies and complete
lifecycle solutions for the marine and energy markets). He served at Wärtsilä as
Managing Director Netherlands from 2007 to 2010 and as Vice President Services
Area North Europe from 2010 to 2015. More recently Fred van Beers was the CEO of
Blohm + Voss shipyards in Hamburg (2015-2017) and served in various other
management positions on an interim basis (2017-2018). Fred van Beers holds
a degree in marine engineering and owns 16,500 shares in Sif Holding NV.
Ben Meijer (born 1976, male, Dutch nationality, second from the right on the picture
of the management team, CFO. He was appointed to the Executive Board in May
2021 for a period of four years ending at closing of the Annual General Meeting of
Shareholders in 2025. Following four years of financial consultancy at First Dutch
Capital (2000-2004), Ben Meijer held several financial positions (financial analyst,
business controller and group controller) at Stahl Group (2005-2019). Before joining
Sif, he worked two years as concern controller at Broadview (2019-2021), a HAL
Investments subsidiary. Ben Meijer holds a master’s degree in Business
Administration from Tilburg University and an Executive master’s degree in Finance
and Control (RC) from TIAS school for Business and Society in Tilburg.
2022Sif Annual Report
65
Composition of the management team
The day-to-day business is managed by Sif’s management team. In addition to the
CEO and CFO, the management team members are:
Joost Heemskerk (born 1977, male, Dutch nationality), central on the picture of the
management team, is Sif’s Chief Commercial Officer (CCO) since June 2020. Joost
Heemskerk holds a Master’s degree in civil/offshore engineering from Delft
University of Technology. Over the last 15 years he has held various positions within
engineering, project management, commercial and strategy consulting, and general
management in the global offshore oil and gas, offshore wind and marine
renewables markets. He has worked for companies such as 2-B Energy, Bain
& Company and, most recently, SBM Offshore.
Frank Kevenaar (born 1963, male, Dutch nationality), left on the picture of the
management team, is Sif’s Chief Operating Officer (COO) since April 2019. After
gaining his bachelor degrees in engineering and business administration, Frank
Kevenaar gained experience in the international automotive and maritime industry.
He has held various management positions at Wärtsilä, Brabant Components and
Stork, and has extensive knowledge and expertise in the field of production and
engineering.
Caspar Kramers (born 1968, male, Dutch nationality), second from the left on the
picture of the management team, is Sif’s Chief Human Resource Officer (CHRO)
since April 2022. After gaining his master’s degree in human resource studies from
Tilburg University, Caspar gained experience in organizational development, talent
management and cultural change at amongst others Sabic, Watts Water
Technologies and, most recently, at Signify and DS Smith.
2022Sif Annual Report
66
Risk and opportunity management
Executing its strategy and running its day-to-day operations exposes Sif to new
opportunities and risks. An overview of the most important opportunities and risks is
reflected in the table hereafter. The demand for climate change and for
independence on fossil fuels and fossil fuel owners offers huge opportunity with
emerging markets and demand for new services and derived opportunities. Facing
risks while taking on these opportunities is inherent to entrepreneurship. Our day-to-
day attention is given to the management of the risks that potentially have a large
financial, environmental, social or reputational impact. Different types of risk
potentially have different effects. The risk matrix hereafter defines the types of risk
we distinguish, the extent to which these have materialized in 2022, the measures
Sif took to manage the risk and the level of risk we are willing to accept.
swot analysis
INTERNAL STRENGTHS WEAKNESSES
History and track-record>
Innovative core technology with specific
manufacturing and process know-how and
experience
>
Inhouse engineering services>
Attractive market segment with tier one clients>
Strategic location Maasvlakte 2, Rotterdam>
Access to capital>
Single product/market>
Workforce composition (age, location, diversity)>
Dependent on governmental policies>
Volatility due to size and low number of projects>
Dependent on limited number of suppliers>
Risk of dependence on limited number of
countries
>
EXTERNAL Limited exposure to movement in prices of raw
materials
>
OPPORTUNITIES STRATEGY STRATEGY
Global focus on climate change and pressure on
reduction of climate change effects
>
Pressure for independency from fossil fuels and
owners of fossil fuel-sources
>
Maturing and growing market>
Emerging markets in USA and Asia>
Expansion in adjacent services to clients>
Use engineering skills and core technology for
development towards total solutions provider
>
Use the strategic location of Maasvlakte 2,
Rotterdam to serve clients with new products
and services
>
Build on business partner relationships for fully
circular products and services
>
Investigate local USA/Asian partnerships and/or
license agreements
>
Strengthen leadership role through diversification
and circular production
>
Build on reputation as a tier-one employer in the
industry of the future
>
Product development: optimized TP-less
monopile design (Skybox) and sustainable
installation and decommissioning of depreciated
wind farms
>
2022Sif Annual Report
67
THREATS STRATEGY STRATEGY
Country specific permitting and lease contracts
for new wind farms
>
Local content requirements>
Shortage of raw materials>
Shortage of skilled labor>
New entrants>
Competing clean energy sources to offshore wind>
Ongoing growth of turbine capacity>
Failure of realizing expansion plans (on time)>
Total solutions provider based on technological
and geographical position and engineering
capacity
>
Optimize production and cost-efficiency>
Focus on offshore wind pipeline of stable and
experienced countries and wind farm developers
>
Focus on opportunities that fall well in our
manufacturing envelope
>
Hire to-class project management and include
sufficient financial headroom in budget
>
Diversify geographically to decrease dependence
on the single market
>
Investigate opportunities for local footholds by
partnering with local assembly contractors or
manufacturers
>
Build and maintain long-term co-maker
relationships with key-suppliers
>
Our Risk appetite
Given the ever-increasing financial consequences of risks in the offshore wind
business, our risk appetite is relatively limited and decreasing.
For strategic opportunities in either new geographical markets or related to the
expansion of services or products in our existing markets (new ventures), we first
make an in-depth analysis of the opportunities and risks via a disciplined gate model
decision making process.
For new geographical markets we will only start activities in joint-venture with (a)
local partner(s) who is/are familiar with local culture, requirements and regulations.
For expansion of services to our existing clients, we will only offer proven
technology, be it by others or on a laboratory scale.
For operations, we are willing to invest in production technology and facilities that
enable a step-up in size of Sif’s products and accept the risks that are inherent to
these investments based on thorough analysis, simulations and technical expert
verifications. We will never compromise or accept risks related to a safe and healthy
work environment.
Complying with laws, regulations and our Code of Conduct is fundamental to Sif’s
reputation which implies a zero approach; we do not accept any risk of violation.
This is also the case for the quality of our products since the purpose for which Sif’s
products are used commands that even the smallest product flaws are
unacceptable.
We apply constraints to our investments in respect of earn back periods or ROACE.
Our guidance and timely reporting to the market needs to be consistent and reliable.
We do not accept any deviations therefrom.
Management control framework
Risk and opportunity management is part of day-to-day business. The Executive
Board is responsible for realizing the company’s strategy and objectives. The
Management Team supports them with adequate risk management and compliance
with internal control systems that are key to Sif’s success.
Effective risk management is pursued through various measures, including
a compliance framework that focuses on Sif’s organizational structure, processes
and culture.
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68
The organizational structure includes good governance and allows for appropriate
checks and balances. Supervisory Board rules, Management Board rules, an
authorization matrix, contracting, insider trading, fair disclosure, bilateral dialogue
and whistle-blower policies support Sif’s processes. Operating procedures are
designed in accordance with various standards and audited on a semi-annual basis.
Sif is certified to ISO 9001, ISO 3834-2, EN1090-1/EN1090-2, VCA**, ISO 45001, ISO
14001, DNV-SE-0436 and DNVGL-CP-0352 standards
Annually, Sif is involved in a limited number of very large projects with a certain
repetitive pattern. First time right is therefore important but frequent controls are
critical. Internal and client audits at Sif and external audits at our suppliers are
therefore key in our risk management. Also in 2022, the COVID-19 pandemic has
impacted site inspections and audits. Some audits in the first months of the year
were performed remotely. In addition to several internal health and safety audits,
7 audits were executed at suppliers and potential suppliers, subcontractors, and
business partners in the Netherlands, Poland and Sweden. By or on behalf of our
clients, audits on quality, health, safety and environmental were carried out at Sif’s
production sites. Internal audits are carried out on an ongoing basis.
Sif continuously reviews its quality and operational procedures since the impact of
single projects on annual results may be substantial. Quality control procedures
start with contract and design review, document and data control, and continue
through purchasing procedures, production process control, equipment inspection
and testing, materials, parts and components, ultrasonic weld testing, and specific
coating tests. These procedures and included check-points ensure Sif’s products
met all customer-requirements before being handed over to the client.
Before tendering, sales, operations, QHSE, engineering project management, legal
and finance, engage in a process of thorough contract review. The review includes
manufacturability, availability of required resources, overall planning and project
specifics. Once contracted, projects are monitored through monthly progress and
financial review meetings, attended by project controllers, project management and
Executive management. During these meetings also the development of the risk
profile is reviewed. Adjustments to anticipated man-hours, project expenses and
results are made if and as required. This is reflected in the progress of the projects
and, therefore, in results on the projects measured as a percentage of progress. The
statement of financial position, the statement of profit and loss and other
comprehensive income and cash flow statements that reflect eventual changes in
project forecasts are reported to the Supervisory Board on a monthly basis whereby
the amount of steel used (in kton) and man-hours spent in relation to completed
products and anticipated man-hours are key- indicators.
The key component to sound risk management is Sif’s corporate culture. Sif’s
values are codified in a Code of Conduct and have been translated into standards by
formulating policies and exemplary leadership that promote the drive for innovation,
the acquisition and transfer of knowledge and that safeguard a rewarding, non-
punitive, non-discriminatory and inclusive working environment where employees are
encouraged to speak out.
Based on the above and the mitigated risks that materialized during the year under
review, the Executive Board of Sif believes that Sif’s internal risk management and
control systems provide reasonable assurances that the financial reporting does not
contain any material errors and that the risk management and control systems
worked properly in the year under review.
2022Sif Annual Report
69
Risk matrix
2022Sif Annual Report
70
The outbreak of the war between Russia and Ukraine with all its effects on
availability of energy and raw materials supplies and pricing was not anticipated in
Sif’s risk matrix. Other risks in the Sif risk matrix may have emerged or may have
become more imminent during the year under review. This mainly concerned the risk
related to the volatility in production because of ever-increasing product dimensions
and increasing project sizes whereas new competitors entering the market try to
take their share of the market. Despite increased sizes and weights of most of the
products and projects on the market we were able to assure an optimized factory
utilization. In 2022, the final production for the Hollandse Kust Zuid project, the
Dogger Bank A project and the Hollandse Kust Noord project were the main projects
in production. Sif was able to level out the impact of sizes and weights through
extended project preparation and detailed production simulation but was facing
a set-back in the execution from high illness rates and serious shortage in personnel.
Important mitigation tools to level out capacity utilization variance are investments
of working hours in innovation, product development and in-house detail
engineering. The risktable lists the main strategic, legal & regulatory, financial and
operational risks, in order of impact of the occurrence on Sif’s business (the higher
in the table, the more severe the impact)
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71
Formulated
We identified risks and considered the measures and risk
appetite.
In progress
We identified risks, formulated measures and risk appetite.
Implementation is in progress.
Completed
We identified risks, related measures and risk appetite. This
resulted in an adequate response, and the status has now been
completed and incorporated into our internal control
environment.
Strategic risk Materialized 2022 Measures to mitigate strategic risk Risk appetite Status
1. A variety of large, globally spread
wind farm developments can distract
management attention
In 2022 Sif tendered for various,
globally spread projects
License agreement with GS Entec in
South Korea for projects in Asia
Focus on mature markets in North sea territory
and select joint venture partners in emerging
markets to diversify geographically
Sif will bring know-how and equipment to
markets outside north west Europe only
when not jeopardizing home markets and
only in a joint venture structure with a local
partner.
2. Alternatives to bottom-fixed offshore
wind farms get cheaper or are for
other reasons preferred over bottom-
fixed solutions
Increase number of global projects
with other than monopile
foundations but percentage wise
monopiles with approx. 80% remain
foundations of choice
Developing new products and add-on services and
pursue that monopiles remain the solution of
choice for bottom fixed until 60 meters water
depth by being the supplier of LCOE optimized
total MP solutions.
Start marshaling activities and acquire KCI the
Engineers to grow engineering activities
Sif will only develop new products for
existing markets or enter new markets with
existing products
Safeguard balance between permanent and
flexible workforce and include critical
positions in the permanent workforce
(instead of flexible).
3. Increasing competition from new
and existing industry participants
Haizea and Navantia-WIndar more
present in the market. SeAH in UK
and Orsted-EEW in USA delayed
Promote customer loyalty and render best-in-class
services. Maintain investments in innovation.
The current market is healthy enough to
absorb the announced new manufacturers
of monopiles
4. Increasing scale of offshore wind
turbines may require larger
foundations than Sif can
manufacture
Sif received requests for quotation
for larger diameter monopiles than
manufacturing facilities allow
Invest in facilities that can manufacture larger
monopiles (P11 project)
Earn back period of max 4 years
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72
Legal and Regulatory Materialized 2022 Measures to mitigate strategic risk Risk appetite Status
1. Any reputational damage to Sif or to
offshore wind may result in
customers withdrawing orders or a
decrease in demand for Sif’s
products
none Communicate on benefits of monopiles as the
best value for money solution but also the best
solution for bio diversity and sealife
Zero doubt on monopiles as best solution
2. Violation of values in the Code of
Conduct may cause reputational
damage and exclusion from projects
none E-learnings accessible to all employees and
stimulation of a speak-up culture. Appointment of
external confidants to employees of both
locations.
Set-up ethics and compliance revival project with
external support.
Zero violations of company values
3. Sif operates in a highly regulated
environment with far-in-advance
visibility on planning with interest
groups and NGO’s that may feel
threatened by new projects
(shipping, fishing, environmental)
Ship collided with offshore wind
foundation of Dutch wind farm
Sif joined the Offshore Wind Coalition to discuss
issues with authorities, NGO’s etc
Sif hands over foundations and
responsibility to client while still ashore
4. The factory in Maasvlakte Rotterdam
is situated near the Natura-2000
areas ‘Voordelta’ and ‘Voornes Duin’.
The factory Roermond is situated
near the Nature-2000 area ‘Roerdal’
and operations in Rotterdam and
Roermond are subject to a nature
permit restricting nitrogen
depositions and to environmental
permit
Courts have ruled against approach
of Dutch politics to tolerate nitrogen
deposition without permit
Sif, as PAS-melder for nature permit in Rotterdam,
will apply for a new nitrogen permit.
Zero risk on environmental and building
permits. Reasonable expectation for grant
of nature permit
5. IT-cyber-security No serious issues 2022 Implement multi-factor authentication, awareness
training on security and privacy, annual
penetration tests and introduction of i-babs as a
secure environment for confidential meeting
documents
Back-up organization and systems in place
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73
Financial risk Materialized 2022 Measures to mitigate financial risk Risk appetite Status
1. Inadequate reporting process No issues 2022 Strengthening project management and control
function and preparation for upgrade of ERP AX to
365 (cloud)
Timely and reliable monthly financial
reporting (monthly reporting latest on 15
th
day subsequent to end of the month)
2. Fluctuations in the prices of
materials and of other sources of
energy could materially and
adversely impact the cost
competitiveness of Sif’s products
Steel and energy had war related
pricing volatility in 2022
Pass-through costs for certain materials (steel)
Limited hedging and fixing of energy prices
Limited to no exposure to pricing of raw
materials like steel
Indexation of energy prices in tenders and
contracts.
Diversified energy procurement policy
introduced
3. Sif is exposed to interest rate risk,
which could reduce Sif’s profits and
materially and adversely affect its
financial results.
Sif could be subject to unexpected
needs for liquidity and debt financing,
which could be exacerbated by
factors beyond its control, including
adverse capital and credit market
conditions
none Pursuing a credit policy, maintaining solvency and
healthy cash levels and following treasury policy
guidelines as explained in Note 25 to the Financial
Statements 2020 paragraphs ‘credit risk’, ‘liquidity
risk’ and ‘market risk,’ respectively
Zero breaches of banking covenants or
covenant holidays when needed
4. Changes to global economic
conditions
Economy standstill due to pandemic Good contracting policies, flexible workforce,
strong balance sheet and cash management
Zero risk of changes of prices for raw
materials; steel is a 100% pass-through
item
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74
Operational risk Materialized 2022 Measures to mitigate operational risk Risk appetite Status
1. Sif is dependent on a limited number
of key suppliers and partners and is
subject to suppliers’ and partners’
credit risk and supply chain risks
which may affect timely delivery and
quality of raw materials and
components and thus disrupt Sif’s
production
Outbreak of war in Ukraine Maintain and develop a strong relationship with
key suppliers based on mutual interest.
Develop relationships with suppliers in other
regions.
Treat steel as a pass-through cost to avoid pricing
risk. Negotiate sound payment conditions,
performance bonds or credit insurance.
Tweak production methods to allow for products
from other producers (steel plates, flanges,
coating)
Maintaining conditions as defined in
contracting policies
Steel is always a pass-through cost
Positive cash flow from projects
2. Deviations or delays in relation to
projects may have a material
adverse effect on Sif’s revenue,
earnings and cash-flow
No delays, no deviations 2022 Maintaining a flexible workforce to adjust the
workforce to the workload. Scale up in-house
design engineering for earlier involvement; engage
in flexible capacity agreements
Safeguard balance between permanent and
flexible workforce and allow time for
maintenance and repair
Inadequate alignment of existing and
new factories may cause delays or
disruptions
Loss of efficiency due to sub-
optimization
Transferring working methods and techniques
from experienced Roermond-staff to Maasvlakte2.
Scaling up in-house detail engineering capabilities
Uninterrupted production flow
3. Limited availability of skilled and
experienced staff may cause delays
or deficiencies
Tight labor market in Western Europe
for technical personnel (welders and
rollers) has impacted the growth of
payroll-based expertise and resulted
in increased re-work costs
Strengthening talent development and developing
employee training and loyalty program to retain
key personnel.
Maintaining good relationships with staffing
agencies that are able to contract the right quality
craftsmen
Uninterrupted production flow
Insufficient flexibility or resources to
adapt to changing regulations and
specifications
Turn fear for change into
opportunities
Talent development, training and in-house
engineering know-how
Market leadership in manufacturing
capacity and skills
4. Increase in dimensions of turbines
requires larger foundations that are
too large for present production
facilities and processes
Sif cannot meet clients demands Invest in expansion of facilities and adjusted
production procedures and equipment (P11)
Earn back max 4 years
5. Risk of flooding of Roermond
facilities that are situated outside the
dykes
None Work on a sustainable high water protection
program together with government bodies and
industry partners
Flooding of facilities once every 50 years
6. Risk of low water levels in rivers Different dry summers lowered water
levels in rivers
Split cargoes (steel plates from Dillinger in
Germany to Roermond en semi-finished products
from Roermond to Rotterdam or Hoboken in
Belgium)
Additional expenses for transportation
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75
Business integrity and compliance
Sif is committed to conducting its business according to applicable laws and
regulations and under its Code of Conduct. The principle-based Code of Conduct
formulates Sif’s values. The standards that must be adhered to in order to promote
these values are laid down in different policies. These principles of the Code of
Conduct relate to:
Fair competition: Sif operates in a relatively young market environment with
a limited number of clients, vendors and suppliers. Articles 7 and 8 of the Code of
Conduct deal with competition and anti- trust matters and with bribery and money
laundering. Sif promotes a fair and respectful dealing culture with customers,
suppliers and other business and industry partners. Fair and respectful dealing
means that Sif employees refrain from influencing business partners and obtaining
personal opportunities or advantages by offering or accepting valuable items. Fair
dealing also implies that insider trading regulations are observed. New employees
are instructed on this when hired. In 2022, Sif incurred no legal or other expenses
related to a possible violation of these principles.
Workplace safety: Workplace safety is dealt with in articles 4 and 5 of the Code of
Conduct. This relates to safety to avoid business accidents and discrimination,
intimidation, or (sexual) harassment on the work floor. Sif does not do business with
organizations that make use of forced child labor or do not respect human rights.
The Sif business environment is mainly Northwestern Europe with European clients
and predominantly European suppliers and contractors. When interpreting workplace
safety, we assume our corporate responsibility as stated in the ‘Guiding Principles
on Business and Human Rights: Implementing the United Nations ‘Protect, Respect
and Remedy’ Framework.’ Workplace safety also implies that the privacy of
employees or business partners is observed and respected. The GDPR (General
Data Protection Regulation) has been in effect from May 2018. Sif has appointed
external confidant, performed a privacy impact assessment, appointed a data
security officer, and is compliant with the GDPR.
Company property & sustainable business: articles 6 and 10 to 13 of the Code of
Conduct deal with environmental impact and the obligation of record keeping of all
financial transactions. The efficient and legitimate use of Sif’s property & resources,
e-mail and Internet usage for professional purposes only is pursued, and corporate
opportunities for personal benefits are prohibited.
Permits necessary to operate both the factories in Roermond and Rotterdam include
de ‘Omgevingswetvergunning’ (“environmental permit”) and the
‘Natuurwetvergunning’ (“nature permit”). Environmental permits are in place for
both locations. Sif has all permits in place for Roermond. For the location
Rotterdam, Sif, at the time the plant was built, did legally not need a nature permit.
This governmental approach to nature permits was overruled in court in 2019 and
since then a tolerance procedure applies which means that although Sif does not
have a nature permit, the authorities will not enforce closing the operations or apply
other measures like fines. This tolerance procedure is also known in the Netherlands
as ‘gedoog-beleid PAS-melder’ which refers to a situation that needs to be legalized
by the Dutch government in due time. Sif officially filed for this legalization program
and will apply for a nature permit as well in 2023 following FID on project 11.
In 2022 clients carried out 3 audits at Sif’s location Roermond and 1 at Maasvlakte
2. In 3 instances this related to manufacturing audits for offshore wind projects and
once this related to a supplier audit. Certification institutions carried out 8 audits in
the context of ISO 3834-2, 9001, 14001, 45001, VCA and EN1090-1 and
2 certifications. Certification in conformance with ISO 3834-2 is linked to ISO
9001 and has been subject to surveillance audits in 2022. No non-conformities were
reported on these audits. Both Roermond and Maasvlakte 2 are ISO 45001, ISO
14001 and VCA** certified. ASME certification applies to the facilities in Roermond.
In 2022 Sif continued internal auditing of processes and process risks; in
2022 3 audits were done on the HSE management system under ISO 45001,
14001 and VCA**.
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76
Our whistleblower policy encourages Sif employees, who may remain anonymous if
they wish to, to report contraventions of the Code of Conduct or other
transgressions. Reports are immediately followed up appropriately, and the
Executive Board is notified. There have been no reports under the whistle blower
regulation in 2022, and no violations of the Code of Conduct were assessed.
Programs to further embed the Code of Conduct in the organization were continued
in 2022. In 2022 Sif involved an integrity and compliance advisory firm to assist the
company in assessing the compliance maturity of the company, to update the code
of conduct and policies and to roll out an upgraded onboarding and training program
for employees, suppliers and subcontractors. The compliance maturity of the
company has been assessed in 2022 and in the first half of 2023 the remaining part
of the consultancy project will be carried out.
The compliance maturity assessment was based on the consultant’s Global
Compliance Program Framework, which has been calibrated against applicable
regulatory expectations and requirements as well as industry standards. The
assessment was primarily focused on the design of the Ethics and Compliance
Program of SIF. The findings of the assessment were plotted against a 5-point scale
(1-Absent, 2-Fragmented, 3-Organised, 4-Integrated, 5-Advanced). The results of this
maturity assessment will drive the prioritisation and urgency of recommendations to
be implemented in the road mapping phase.
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77
Supervisory Board report
Message of the chairman of our Supervisory Board
History repeated itself in 2022. The step up in size of the monopiles in 2016 created
the need for an investment in larger manufacturing facilities at a site close to open
sea. This was realized on reclaimed land in Rotterdam named Maasvlakte 2. The
more than €100 million new factory set up allowed Sif to increase diameters beyond
6 meters that can support turbine sizes of 6 MW and larger. Rapidly, turbine sizes
further increased and already in 2020, we started realizing that beyond 2024,
turbines would require monopiles with diameters above 9 meters. This was the start
of a greenfield, detailed investigation on how a follow-up investment in a larger
manufacturing plant should look to not only manufacture larger monopiles but to
also make use of a different and even more efficient production process. Project
P11 was born.
In 2016 we underestimated the effect on the returns on the investment of additional
costs we were faced with in the years after commissioning the new plant at
Maasvlakte 2. This resulted in a longer earn back period than was initially expected.
A thorough Industry analysis shows that in this type of fast growing industries, the
earn back period should be short. For the investment P11 we now target an earn
back of max 4 years. In that timeframe, monopiles will vary, in 80% of the cases,
between 9 and 11.5 meters diameter in order to support up to 15-18 MW turbines.
The Supervisory Board had intense discussions with the Executive Board,
challenging them to substantiate assumptions on technology and earnings capacity
and encouraging them to involve external specialists to confirm these assumptions.
For the design of the facilities, Sif consulted a renowned engineering consultancy
firm and for the business model we consulted a renowned business consultant. It
took us 18 months to complete and challenge a substantiated, solid, financially
sound plan for expansion of our existing factory in Rotterdam. Assisted by
investment bankers, we arranged a solid financing for the €328 million expansion
plan which enabled us to take a final investment decision on 13 February 2023, no
sooner than we had all the identified risks managed and financing committed. It will
enable Sif to build the world’s largest monopile manufacturing plant and to enforce
its global leadership position in monopile foundations.
In parallel, the day-to-day business continued and an orderbook had to be executed.
Despite all the consequences of global turmoil, we managed to deliver on our
promises to clients, suppliers, employees and shareholders.
The P11 plan development put high pressure on the management and the
organization of Sif for a long period. It also kept stakeholders in uncertainty,
sometimes to their frustration since they were highly convinced of the necessity of
the step-up project. And though it still needs to be realized, this is a moment to
thank employees, suppliers, clients and financing parties for their support and
commitment and management for their perseverance.
Composition of the Supervisory Board
The Supervisory Board is composed in such way that knowledge, experience and
insights concerning the current issues at Sif and the markets and activities relevant
to Sif are well represented. Effective the closing of the AGM in 2023, André Goedée
and Caroline van den Bosch will resign in accordance with the rotation schedule. The
Supervisory Board proposes to nominate Angelique Heckman as one of their
successors if no recommendation is received from the Annual General Meeting of
Shareholders. Angelique Heckman will be nominated on the basis of an enhanced
recommendation by the works council. A brief resumé of Angelique Heckman is
included in the notice and agenda for the AGM on 12 May 2023.
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78
The composition of the Supervisory Board is as follows:
André Goedée (born 1951, male, Dutch nationality, to the right of the photo).
Chairman. Relevant expertise and experience: offshore contracting (EPCI), project
management, human resources and international business. He was first appointed
to the Supervisory Board in January 2016 for four years but served on the preceding
Supervisory Board from December 2015. He was reappointed at the close of the
2019 Annual General Meeting of Shareholders for a four-year term until 2023. André
Goedée will resign at the AGM in 2023 and is not eligible for reappointment. He is
currently also board member of FSC (Flight Simulation Company for pilot and crew
training).
Between 2003 and 2013, André Goedée was the CEO of Dockwise Ltd. Following the
acquisition of Dockwise by dredging and energy services company Boskalis, André
Goedée was first appointed a member of the Executive Board of Boskalis and later
on an advisor to the Board. Before joining Dockwise André Goedée was CEO of
European Staffing for Vedior Professional Human Resource Services (1999–2003),
Executive vice-president of EPCI offshore energy services contractor Heerema
Offshore Services (1989–1999) and Executive vice-president of Neddrill Drilling
Contractors (1977–1989). In 1978, André Goedée obtained a Mariner Master’s
degree (maritime technical engineering) from the Mercantile Marine College in
Scheveningen/Rotterdam. He has also participated in several management and
marketing programs at various academic institutions, including the New Board
Program at Nijenrode University. André Goedée holds no shares in Sif Holding N.V.
Peter Wit (born 1967, male, Dutch nationality, second from the right in the photo).
Vice-chairman. Relevant expertise and experience: stock exchange-listed
environment, financial and management accounting, risk and risk-management,
legal, tax and compliance, auditing, IT and operations. He was first appointed to the
Supervisory Board in May 2018 for four years and re-appointed for the same term in
2022. Peter Wit is currently CFO at Iqip holding B.V. (offshore equipment) and before
that (2018-2021) was COO of staffing company Atlas Professionals B.V. (staffing
for energy industry), and member of the Supervisory Board at Doedijns Group
International. Previously, Peter Wit was CFO and managing director at recycling
company Inashco B.V. (2014-2017), CFO at offshore energy services provider
Dockwise Ltd (2009-2013), Supervisory Board member at staffing company Atlas
Professionals (2013-2018) and held several positions (finance manager Albania,
M&A advisor in the UK and COO/CFO for Shell’s asset management company) at
Royal Dutch Shell Group between 1992 and 2009. Peter Wit holds a Master’s degree
in Business Administration from the University of Groningen and obtained a post-
doctorate controlling degree (RC) from the VU University Amsterdam. Peter Wit
holds no shares in Sif Holding N.V.
2022Sif Annual Report
79
Caroline van den Bosch (born 1964, female, Dutch nationality, center of the photo).
Relevant expertise and experience: procurement, human resources, information
technology, sales & marketing. She was first appointed to the Supervisory Board in
February 2016 for four years. Caroline van den Bosch was reappointed at closing the
2019 Annual General Meeting of Shareholders for a four-year term until 2023.
Caroline van den Bosch will resign at the AGM in 2023 and is not eligible for
reappointment. Caroline van den Bosch is a booster for NL2025 and mentor for
NLGroeit. Until December 2022 she owned 50% in Emeritor (Procurement services)
Caroline van den Bosch holds a marketing degree from the school of Business
Administration and Economics (HEAO) in Utrecht and a NIMA-C marketing degree
(MBA level). Caroline van den Bosch holds no shares in Sif Holding N.V.
Peter Gerretse (born 1955, male, Dutch nationality, second from the left in the
photo). Relevant expertise and experience: international business, project
management, production, industrialization and automation, international B2B
marketing. He was first appointed to the Supervisory Board in February 2016 for four
years. Peter Gerretse was reappointed at the closing of the 2020 Annual General
Meeting of Shareholders. Peter Gerretse has been a member of the Supervisory
Board of Vanderlande Industries B.V. since 2017. He was a member of the
Supervisory Board of Aeronamic Holding from 2010 to 2017. Between 1995 and
2013, Peter Gerretse worked for Vanderlande Industries, a leading supplier of logistic
process automation at airports and in the parcel market, where his last position was
President and CEO. Before joining Vanderlande Industries, Peter Gerretse held
several management positions at Fokker Aircraft. Peter Gerretse holds an
engineering degree in Aerospace Engineering from Delft University of Technology.
Peter Gerretse holds no shares in Sif Holding N.V.
Peter Visser (born 1956, male, Dutch nationality, to the left of the photo). Relevant
expertise and experience: general management, finance, auditing, risk management,
M&A. He was first appointed to the Supervisory Board on an interim basis as of
1 November 2017 for the period until the closing of the 2018 Annual General
Meeting of Shareholders. Upon nomination of Sif’s largest shareholder Egeria, Peter
Visser was appointed to the Supervisory Board on 3 May 2018 and re-appointed on
12 May 2022 for four years. Peter Visser is co-founder of Egeria and director of
Egeria Capital Management B.V. From 1992 until 1997 he was director of the bank
MeesPierson N.V. responsible for private equity activities in Europe. From 1983 until
1992, Peter Visser worked for McKinsey & Company and founded his own consulting
firm, Management & Investment B.V. Peter Visser holds an economics degree from
the University of Groningen. For reasons of a possible conflicting situation, Peter
Visser did not participate in meetings in 2022 of the Supervisory Board, nor did he
have access to agenda’s, attachments and minutes of meetings of the Supervisory
Board that dealt with the P11 expansion project.
Each Supervisory board member possesses the specific expertise necessary to fulfill
this role and carry out this task. The Supervisory Board aims for diversity in its
composition in terms of age, gender, professional and educational background and
professional experience. The above-mentioned elements are included in the
Supervisory Board's profile and published on Sif’s website on the Corporate
Governance page.
SUPERVISORY BOARD PROFILE MATRIX AFTER RESIGNATION OF ANDRÉ GOEDÉE AND CAROLINE VAN
DEN BOSCH
Area of Expertise Supervisory Board member
Offshore Energy Services Industry Peter Wit, Peter Visser
General Management, Project
Management
Peter Visser, Peter Gerretse
Finance, Administration, Accounting Peter Wit, Peter Visser
Strategy Peter Visser
Marketing, Sales
Manufacturing, Production Peter Gerretse
Innovation, Research, Development Peter Gerretse
Safety, Environment Peter Gerretse
Human Resources, Personnel,
Organization
Information Technology Peter Wit
Risk-Management Peter Visser, Peter Wit
Regulatory Peter Wit
2022Sif Annual Report
80
Dutch law – Section 142b of Book 2 of the Dutch Civil Code –- stipulates an
obligation for listed companies to appoint at least one-third women and at least one-
third men on Supervisory Boards. The Supervisory Board of Sif currently consists of
five members, one of whom is female (20%). Following appointment of the
proposed candidate and resignation of André Goedée and Caroline van den Bosch at
closing of the Annual General Meeting of Shareholders on 12 May 2023, Sif’s
Supervisory Board will consist of 4 members, one of whom is female.
ROTATION SCHEDULE SUPERVISORY BOARD
2023 2024 2025 2026
André Goedée
Caroline van den Bosch
Peter Gerretse
Peter Visser
Peter Wit
Resigning, not available for re-appointment
Resigning, eligible for re-appointment
The composition of the Supervisory Board is such that the members are able to
operate critically and independently of one another, the Executive Board and any
particular interests. Other than those described below, there were no circumstances
that may lead to a (potential) conflict of interest with Supervisory Board members
as set out in articles 2.7.3-2.7.4 of the Code in 2022.
Until December 2022 Caroline van den Bosch held 50% of the shares in Emeritor
(procurement services and software). Emeritor was consulted by Sif on
procurement related advice at market conditions in 2022.
As a Supervisory Board member and as a board member of 49.2% shareholder
Grachtenheer 10 BV (part of Egeria Industrials AG), Peter Visser was potentially in
a conflicting position. Whether this situation can lead to a conflict-of-interest is
evaluated at every Supervisory Board meeting and before each agenda item. Peter
Visser did not participate in Supervisory Board meetings or audit committee
meetings as of 17 March 2022 nor in remuneration committee meetings all the way
through to Final Investment Decision.
The Works Council recommends Angelique Heckman for appointment to the
Supervisory Board and the Supervisory Board’s primary contact for the Sif Works
Council.
All transactions conducted between Sif Holding N.V. and any of the Supervisory
Board members are agreed on market terms. Decisions to enter transactions of
material significance to Sif and any of its Supervisory Board members require the
approval of the Supervisory Board. Such transactions are published in the annual
report. There were no such transactions in 2022.
The Supervisory Board’s organization and activities
As a standard, the Supervisory Board convenes six times per calendar year. Four of
these meetings are organized around the scheduled results and quarterly trading
updates. The other two meetings are organized to discuss Sif’s strategy and
approve the budget. Monthly results are distributed to the Supervisory Board around
each 15
th
day of the succeeding month and discussed during full Board-calls the
week after distribution. During two meetings, the Supervisory Board has discussions
with the auditor out of presence of the Executive Board and discusses the
functioning of Executive and Supervisory Board, also out of presence of the
Executive Board. The audit committee and the remuneration committee prepare
certain agenda items for Supervisory Board meetings. The members of the two
Supervisory Board committees are as tabled below. The Supervisory Board did not
install a Selection & Nomination Committee since nominations and appointments
are considered full-board subjects for preparation and decision making.
2022Sif Annual Report
81
COMPOSITION OF SUPERVISORY BOARD COMMITTEES
audit committee remuneration committeeP11 committee (from
16.03.2023)
André Goedée
Caroline van den
Bosch
Member
Peter Gerretse Member (from
16.03.2023)
Chairman Chairman
Peter Visser Member Member Member
Peter Wit Chairman
Remuneration committee
The remuneration committee convened twice in 2022 in the presence of the CEO. All
the members of the remuneration committee attended the meeting except for Peter
Visser. The remuneration report for 2022 and the confirmation of the performance
indicators for variable remuneration were on the agenda for the meeting in February
2022. Furthermore, were the targets 2022 for the management team members
discussed for advice to the Supervisory Board. The remuneration committee also
discussed the Long-Term Incentive plan (“LTIP”) and the idea to structurally expand
the group of participants under the LTIP to all the management team members and
incidentally to selected staff members that made special contributions to the
P11 expansion plan. In its August meeting, the remuneration committee discussed
the merits of the LTI plan and the adjustments to salaries in relation to the inflation
and increases in energy prices. All proposals were adopted by the Supervisory
Board.
Audit committee
The audit committee convened on five occasions in 2022. They amongst others
assessed the audit requirements and discussed the audit plan and the key audit
findings with the external auditor. Sif has not appointed an internal auditor but has
implemented alternative measures to ensure contacts between the audit committee
and the external auditor proceed properly and provide proper documentation of
these contacts. The CFO of Sif attended all the audit committee meetings. Key audit
findings were discussed, and progress on follow-up was reported during the
meetings. The audit committee and the Supervisory Board as a whole met once with
the external auditor in the absence of the Executive Board. The external auditor was
present at two meetings of the audit committee.
P11 committee
The P11 committee was recently installed to monitor and advise on the execution of
the €328 million expansion project of Sif. The committee will convene monthly and
exist as long as the construction activities last until the plant is operating according
to plan.
Supervisory Board
The plans to expand the production facilities are of strategic importance for the
company and are assessed to have a huge financial and organizational impact. It
was for that reason that 25 so-called RVC P11 meetings were scheduled in 2022, in
addition to the regular 6 meetings and in addition to the regular monthly results-
calls. For 24 of these RVC P11 meetings Supervisory Board member Peter Visser did
not receive an invitation, a notice of meeting, an agenda or attachments to the
agenda because of a possible conflicting position as a cornerstone shareholder.
During these 25 RVC P11 meetings, the Executive Board informed the Supervisory
Board on progress of the project and consultation and sound boarding of the
Supervisory Board took place. The Supervisory Board challenged the Executive
Board on the perceived risks, the proposed management thereof and on fulfilment of
conditions precedent. These risks contained amongst others commitments of
suppliers ahead of a final investment decision and the financial impact thereof,
commitments to launching projects, compliance to governmental permitting and the
mix of financing instruments. A main risk that was discussed on a regular basis was
the impact of the project and possible distraction thereof on the regular business,
especially given the lead time of the project.
2022Sif Annual Report
82
The altogether 31 Supervisory Board meetings and monthly calls with Executive
Board to discuss financial developments were partially attended in person and
partially through MS Teams. Nearly all meetings were attended by all the invited
Supervisory Board members. One Supervisory Board meeting was convened to
discuss the budget for 2022 and one meeting to prepare for the AGM in 2022. The
remaining four standard Supervisory Board meetings had financial reporting on the
agenda and several other items such as commercial and operational progress, risks,
the license agreement with GS Entec for the Asian market, IT security and
implementation, staffing and business development.
Ernst & Young Accountants LLP was appointed external auditor for the reporting
year 2022 by the Annual General Meeting of Shareholders. Ernst & Young
Accountants LLP audited the 2022 financial statements and explained their findings
during a Supervisory board meeting. Other topics discussed during the same
meeting included the Executive Board and the Supervisory Board reports regarding
2022.
In May 2022, it was decided to nominate the two resigning Supervisory Board
members, Peter Visser and Peter Wit, for a successive term of four years. Except for
the above items on the agenda, all other items on agendas for Supervisory Board
meetings were attended by the Executive Board, a listener representing Egeria and
a secretary. On two occasions, the auditor attended part of the Supervisory Board
meeting. The listener is an Egeria-representative and for the same reasons as Peter
Visser did not attend the Supervisory Board meetings, he did neither.
The Supervisory Board maintains a good working relationship with the Executive
Board, the management team and the Works Council.
None of the Supervisory Board members holds more than two supervisory positions,
as provided for in the Dutch Management and Supervision of Legal Entities Act.
Based on the list of suppliers and clients and the confirmations at the start of each
Supervisory Board meeting that no participants at the meeting have conflicts of
interest, the Supervisory Board has no indications of any other kind of conflict of
interest between Sif and Supervisory Board members.
Financial accountability and dividends
The report of the Executive Board and the 2022 financial statements were submitted
to the Supervisory Board in accordance with the provisions of Article 30 of Sif’s
articles of association. The financial statements were submitted for auditing to Ernst
& Young Accountants LLP (‘EY’), which subsequently issued an unqualified auditor’s
report on the financial statements based on its audit.
The Supervisory Board discussed the financial statements with the Executive Board
in the presence of the external auditor and subsequently approved the financial
statements on 16 March 2023. The Supervisory Board will submit the financial
statements for the 2022 financial year to the Annual General Meeting of
Shareholders on 12 May 2023 and recommends that the financial statements be
adopted. The Supervisory Board is of the opinion that the financial statements
constitute a sound basis for the account given by the Executive Board of its
management and by the Supervisory Board of its supervision of the management.
The Supervisory Board also proposes that the Executive Board be discharged from
liability for the policy pursued and that the Supervisory Board should be discharged
from liability for the supervision conducted. Profit attributable to the shareholder for
2022 amounted to €7.2 million. The Supervisory Board has approved the proposal by
the Executive Board to retain 100% of the profit attributable to shareholders and add
this amount to the general reserve of the Company.
Acknowledgments
The members of the Supervisory Board have signed the financial statements in
compliance with their statutory obligations under section 2:101, subsection 2 of the
Dutch Civil Code.
With a well-filled orderbook for the midterm, a bright outlook for future offshore wind
plans and a final investment decision for the expansion of production facilities, Sif
can confidently face the longer-term challenges. A solid analysis was made of the
required technology, skills and factory lay-out to manufacture the monopile of the
future and best serve our clients. While writing this annual report, we have just taken
Final Investment Decision for our plans to expand our capacity to 500 kton and
produce at least 200 monopiles per year.
2022Sif Annual Report
83
With 169 kton of production, 2022 was satisfactory from a utilization perspective,
especially considering the hurdles from COVID-19 and the war in Ukraine that
created uncertainty about supplies and pricing, also for our clients and mainly for
our suppliers. Adjusted EBITDA for the full year with €41.8 million ended in line with
our guidance.
It is gratifying to note the high level of loyalty and involvement that Sif employees
maintained in 2022 and that were of decisive importance to Sif’s successes. We
wish to express our sincere appreciation to the Executive Board and all employees
for their commitment and resilience over the past year. We also want to thank all our
stakeholders, including shareholders, for their confidence in the company.
Roermond, the Netherlands, 29 March 2023
André Goedée (Chairman)
Peter Wit
Caroline van den Bosch
Peter Gerretse
Peter Visser
2022Sif Annual Report
84
Remuneration report
As referred to in section 2:135b of the Dutch Civil Code and chapter 3.1 of the Dutch
Corporate Governance Code, this remuneration report is based on Sif’s remuneration
policy. A draft of this policy was presented to the shareholders, together with the
Works Council’s advice, for their approval at the Annual General Meeting of
Shareholders in 2020. The remuneration policy was approved by the AGM and
published on the Corporate Governance page of the website of Sif. An outline of the
Remuneration policy is included in the Governance-paragraph of this annual report.
The remuneration policy is instrumental to realizing Sif’s strategy and sustainable
longer-term value creation for all the stakeholders of Sif. For the remuneration of
Executive Board members, Sif applies a peer group comparison. In 2020 Sif
undertook a market analysis with the support of external consultants. This resulted
in a revised peer group including seven listed and seven non-listed companies. The
main criteria for peer group selection were a combination of the type of business
(project-business), ownership (public ownership) and size (revenues and
employees).
The following overview summarizes the salaries and performance-related bonuses
and other remuneration elements of the Executive Board for the past two years. The
2022 remuneration is based on the policy approved by the Annual General Meeting
of Shareholders in 2020. The adoption of non-financial KPI’s in addition to financial
KPI’s that now also include ROACE, better aligns to Sif’s business and the strategy it
is following. Together with the STI-LTI-balance on which the Works Council advised
when presenting the remuneration policy to the Annual General Meeting of
Shareholders for approval, these support the ambition to create sustainable long-
term value. Scenarios have been analyzed and taken into consideration when
designing the remuneration policy.
In connection with the decision to invest in expansion of the manufacturing facilities,
members of the Executive Board have committed to participating in the announced
rights issue and to invest more than 60% of their annual base salary in Sif-shares
with a lock-up period of 4 years. This investment is closely linked to an additional,
one-time, grant under the LTIP-arrangement with value of one year base salary. The
expansion plan took more than 3 years to reach final investment decision and will
take more than 18 months to materialize in expanded production facilities. Against
that background, a similar incentive and retention instrument is considered for
a small group of key employees being instrumental for the successful execution of
the expansion plan
EXECUTIVE BOARD REMUNERATION
Fred van Beers Ben Meijer
Type of recompense In €, excluding VAT 2022 2021 2022 2021
Base salary 398,879 382,398 235,980 138,730
Employer´s pension contributions 24,458 22,706 20,604 12,428
Pension compensation 33,742 34,230 16,649 9,768
Annual bonus (accrual) 149,619 224,330 69,917 59,273
LTIP (accrual) 118,114 139,714 27,839 7,234
Termination fee - - - -
Other benefits (car lease, travel
expenses and relocation expenses)
50,463 45,082 40,471 23,718
Social security and other payments 9,881 10,004 9,881 5,800
Total remuneration 785,156 858,464 421,341 256,951
% variabel of total remuneration 34.1 42.4 23.2 25.9
Paid annual bonus in the year, earned
over the previous year
201,906 192,117 59,273 -
Paid vested LTIP 85,026 - - -
Total actual paid variable
remuneration
286,932 192,117 59,273 -
The remuneration package includes the following elements:
Base salary
The fixed base salary for Executive Board members increased with the cost-of-living
index in 2022. This implies a 5% increase for CEO and CFO as of 1 January 2023.
2022Sif Annual Report
85
Annual bonus
The annual bonus is in cash and based on pre-defined KPI’s that may differ for each
Executive Board member. The Supervisory Board confirms that the results on which
the 2022 short-term incentive for the Executive Board members is based are derived
from the audited financial statements. The bonus for 2022 will be paid in cash in
2023 as soon as the Supervisory Board approves the audited annual accounts for
presentation to the Annual General Meeting of Shareholders. The annual bonus is
based on at least 60% financial performance indicators as outlined in the
remuneration policy.
max score 2022 score
target actual
For CEO
Adjusted EBITDA (ex IFRS 16) 14.7% 34,100 27,487 0.0%
Contribution margin 14.7% 117,700 130,511 12.8%
ROACE (adjusted) % 14.7% 34.1 43.6 14.7%
ESG/Safety LTIF 4.0% <1.5 6.50 0.0%
Concretisation ESG policy 4.0% 2.0%
Progress production expansion 8.0% 8.0%
Total
For CFO
Adjusted EBITDA (ex IFRS 16) 12.0% 34,100 27,487 0.0%
Contribution margin 12.0% 117,700 130,511 10.6%
ROACE (adjusted) % 12.0% 34.1 43.6 12.0%
Business controls 4.0% 2.0%
Financials business case for
expansion plan
5.0% 5.0%
Upgrade AX to M365 5.0% 0.0%
Total
On target, the short-term incentive is 40% of the fixed base salary for the CEO and
35% for the CFO. The maximum short-term incentive is 60% or 50% of the fixed base
salary for the CEO and CFO, respectively. For 2022 the pay-out percentages (actual
paid annual bonus as a percentage of the fixed base salary in the year of pay-out)
for Executive Board members are 37.5% for the CEO and 29.6% for the CFO. The
Supervisory Board acknowledges that during the year there were different demands
than anticipated when the individual and team objectives were determined for 2022.
The Supervisory Board assessed that the Ukraine crises was well managed by the
Executive Board, as was progressing P11 to the final investment decision of
February 2023. The Supervisory Board acknowledged the volatile and challenging
year and assessed the individual and team performance in the context of the year.
For that reason, the FID target for expansion of production facilities was scored.
Targets for EBITDA, safety and upgrade of information system AX to M365 were not
met and therefore did not score for the bonus-award. The CEO scored 2 of 4% for
the ESG target since use of gas in the production process decreased in line with the
ambitions of the company. The CFO scored 2 of 4% for improvement of business
controls that have improved with the assistance of an interim controller for
operations since the second quarter of 2022. In 2021, the pay-out percentage for the
annual bonus was 50.2% of the fixed base salary for the CEO and 48.2% of the fixed
base salary for the CFO. For 2023, the KPI’s for the annual bonus are adjusted
EBITDA ex IFRS16, contribution and adjusted ROACE for the 60% that is based on
financial targets (EBITDA and ROACE adjusted for expenses that relate to the
research into and preparations for the required adjustment and expansion of our
production facilities). Non-financial targets relate to safety performance, carbon
footprint and certain organisational achievements.
Pension
Executive Board members are offered a pension arrangement for a pensionable
salary based on the fixed annual compensation, including holiday allowance. Sif may
contribute 100% to the pension premiums or reimburse the Executive Board
member with an equal amount if he/she decides to refrain from participation in Sif’s
pension arrangement. The pension contribution covers the maximum pension
amount; the pension compensation covers the excess arrangements with or without
director contribution.
2022Sif Annual Report
86
LTIP
The LTIP is based on the share price performance of Sif’s shares. Performance
Share Units (“PSU”) are awarded. No actual shares are involved in the LTIP and all
LTIP are settled in cash. Under the long-term incentive plan, 6,963 PSUs with a value
of €78,463 were conditionally awarded to the CEO (4,623 in 2021 with a value of
€76,464). 4,188 PSUs with a value of €47,196 were conditionally awarded to the CFO
(2,780 in 2021 with a value of €45,981). The 2019-awards under this LTIP vested in
2022. The pay-out on vested LTIP-arrangements to the CEO was €85,026.
Severance payment
Executive Board members are entitled to contractual severance payments
amounting to six months’ salary in the event of a change of control of the Company
and the case of premature dismissal at the request of the Supervisory Board and the
General Meeting of Shareholders other than for termination due to cause.
Internal pay ratio
The average total pay per FTE of members of the Executive Board (CEO and CFO) in
comparison to a reference group of all Sif employees (the pay ratio) is 7.3 (8.2 in
2021). The difference compared to 2021 is caused by the succession of Leon
Verweij by Ben Meijer and the severance payment to Leon Verweij. The pay ratio at
Sif is calculated as the average gross expenses of all Sif employees (Executive
Board members excluded) per FTE plus the average gross expenses of Executive
Board members per FTE, divided by the average gross expenses of all Sif employees
(Executive Board members excluded) per FTE. Gross expenses for all Sif employees
include wages and salaries, social security contributions and pension expenses as
reported in Note 7 to the financial statements. This results in total gross
expenditures of €30,444 thousand for 363 FTEs (€29,344 thousand for 356 FTEs in
2021) when excluding Executive Board members or €83,869 (€82,428 in 2021) per
Sif employee based on the average number of employees for the year under review.
The comparable expenses for Executive Board members include fixed base salary,
employer’s pension contributions, pension compensation, annual bonus and social
security and other payments as reported in Note 33 to the financial statements. This
results in total gross expenses of €1,060,544 for two FTE (€1,182,496 for two FTE in
2021) or €530,272 (€591,248 in 2021) per Executive Board member. The pay ratio is
thus within the bandwidth of 6.8–8.9 that the Works Council advised observing
when commenting on the proposed remuneration policy in 2021. The revised
Corporate Governance Code defines the pay-ratio as the total annual remuneration
of the CEO (all remuneration components such as fixed remuneration, variable
remuneration in cash (bonus), the share-based part of the remuneration, social
security contributions, pension, expense allowance, etc), as included in the
(consolidated) financial statements, divided by the average annual remuneration of
the employees (determined by dividing the total wage costs in the financial year (as
included in the (consolidated) financial statements) by the average number of FTEs
during the financial year). The value of the share-based remuneration is determined
at the time of assignment, in line with the applicable rules under the applied
reporting requirements. Applying this definition to Sif’s 2022 numbers would bring
the pay-ratio to 10.3 compared to 11.3 in 2021 (for CEO compared to all
employees).
The 2021 Remuneration report was discussed in the Annual General Meeting of
shareholders in May 2022 and presented for an advisory vote. Of the shares voted
for (73.55% of shares issued), 99.12% voted in favor. Shareholders appreciate that
the maximum bonus is now reflected per performance criterion, as well as the score
per individual criterion. This is an improvement compared to the previous
remuneration report. Shareholders would also like to be able to judge on the
predetermined targets compared to the realisation. The chairman explained that Sif,
being a listed company, would then give a lot of competitive information to the
market and therefore will not release targets upfront. Considering the voting result,
the shareholders expressed their appreciation for the remuneration report.
2022Sif Annual Report
87
Remuneration and company performance
2022 2021 2020 2019
Executive Remuneration
(in €)
Fred van Beers 785,156 858,464 593,691 629,091
Ben Meijer
1
421,341 256,951
Leon Verweij
2
409,312 537,338 456,883
Average full-time
remuneration of
employees
83,869 82,428 80,358 81,838
Pay ratio 7.3 8.2 7.6 8.2
Pay ratio 2022 Corporate
Governance Code*
10.3 11.3
Company performance
indicators
Contribution/ton** 674 637 609 542
EBITDA 36,426 39,061 31,756 26,371
Net debt (ex-IFRS 16)
year-end
(89,832) (73,201) (2,645) 21,293
1. Chief Financial Officer as of 12 May 2021.
2. Chief Financial Officer until 12 May 2021
*Corporate governance code 2022 defines pay ratio on basis of CEO remuneration only. In previous years
Sif based pay ratio on remuneration of executive board
** ex marshalling, engineering and other revenues
Supervisory Board remuneration
The General Meeting of Shareholders determines the remuneration of the
Supervisory Board members. The remuneration is in no way dependent on Sif’s
results. Supervisory Board members receive a fixed remuneration; they do not
receive a performance-related payment, nor are they awarded Sif shares or share
options in Sif as part of their remuneration.
SUPERVISORY BOARD REMUNERATION
Remuneration
in €
1
2022 2021 2020 2019
André Goedée 70,000 70,000 70,000 70,000
Peter Gerretse 45,000 45,000 45,000 45,000
Caroline van den Bosch 45,000 45,000 45,000 45,000
Peter Wit 45,000 45,000 45,000 45,000
Peter Visser 45,000 45,000 45,000 45,000
Total remuneration 250,000 250,000 250,000 250,000
excluding VAT and expenses
1
2022Sif Annual Report
88
FINANCIAL CALENDAR 2023
17 March Capital Markets Day
24 March Deadline for registration or voting for EGM
28 March EGM
30 March Annual report 2022
30 March Notice of AGM and agenda
14 April AGM record date
10 May Deadline for registration or voting for AGM
12 May Release of Q1 2023 trading update
12 May Annual General Meeting of Shareholders
25 August Publication of 2023 interim results
3 November Publication of Q3 2023 trading update
2022Sif Annual Report
89
2022Sif Annual Report
90
Financial Statements
91 Consolidated statement of profit or loss for the year ended
31 December 2022
92 Consolidated statement of financial position as at 31 December 2022
(before appropriation of result)
93 Consolidated statement of changes in equity for the year ended
31 December 2022
94 Consolidated cash flow statement for the year ended
31 December 2022
95 Consolidated cash flow statement for the year ended
31 December 2022 (continued)
96 Notes to the consolidated financial statements for the year ended
31 December 2022
143 Separate statement of profit or loss for the year ended
31 December 2022
144 Separate statement of financial position as at 31 December 2022
(before profit appropriation)
145 Notes to the separate financial statements for the year ended
31 December 2022
2022Sif Annual Report
91
Consolidated statement of profit or loss
for the year ended 31 December 2022
AMOUNTS IN EUR '000 Notes 2022 2021
Revenue from contracts with customers 363,891 418,496
Operating lease income 10,652 4,045
Total revenue 6 374,543 422,541
Raw materials (191,674 ) (160,311 )
Subcontracted work and other external charges (36,561 ) (126,090 )
Logistic and other project related expenses (15,797 ) (21,910 )
Direct personnel expenses 7 (37,610 ) (32,213 )
Production and general manufacturing expenses (17,481 ) (11,238 )
Indirect personnel expenses 7 (21,204 ) (19,833 )
Depreciation and amortization 14,15,31 (24,226 ) (21,712 )
Facilities, housing and maintenance (4,947 ) (4,127 )
Selling expenses 8 (628 ) (632 )
General expenses 9 (12,305 ) (8,471 )
Operating profit 12,110 16,004
Impairment (losses) / reversals on financial assets (3 ) 16
Finance costs 10 (2,010 ) (2,352 )
Finance costs and impairment losses (2,013 ) (2,336 )
Other income 90 1,345
Share of profit / (loss) of joint ventures 11,17 1 82
Profit before tax 10,188 15,095
Income tax expense 12 (2,670 ) (3,208 )
Profit after tax 7,518 11,887
Attributable to:
Non-controlling interests 23 301 297
Equity holders of Sif Holding N.V. 7,217 11,590
Profit after tax 7,518 11,887
Earnings per share 13
Number of ordinary shares outstanding 25,501,356 25,501,356
Basic/diluted earnings per share (EUR) 0.28 0.45
2022Sif Annual Report
92
Consolidated statement of financial position as at 31 December 2022
(before appropriation of result)
AMOUNTS IN EUR '000 Notes 31-Dec-2022 31-Dec-2021
Assets
Intangible assets 14 860 477
Property, plant and equipment 15 116,415 107,612
Right-of-use assets 31 104,466 104,598
Investment property 16 515 425
Investments in joint ventures 17 76 115
Deferred tax assets 12 - 748
Total non-current assets 222,332 213,975
Inventories 18 427 612
Contract assets 19 18,315 12,944
Trade receivables 20 22,463 17,927
VAT receivable - 50
Prepayments 2,102 2,472
CIT receivable 1,832 -
Cash and cash equivalents 21 89,832 73,201
Total current assets 134,971 107,206
Total assets 357,303 321,181
AMOUNTS IN EUR '000 Notes 31-Dec-2022 31-Dec-2021
Equity
Share capital 22 5,100 5,100
Additional paid-in capital 22 1,059 1,059
Retained earnings 91,266 84,527
Result for the year 7,217 11,590
Equity attributable to
shareholder 104,642 102,276
Non-controlling interests 1,122 821
Total equity 105,764 103,097
Liabilities
Lease Liabilities - non-current 24,31 99,006 100,573
Employee benefits - non-current 26 468 416
Deferred tax liabilities 12 688 -
Other non-current liabilities 28 810 1,407
Total non-current liabilities 100,972 102,396
Lease Liabilities - current 24,31 8,392 5,110
Provisions 228 -
Trade payables 92,333 62,082
Contract Liabilities 19 32,458 37,713
Employee benefits - current 26 3,310 2,460
Wage tax and social security 1,589 791
VAT payable 4,172 -
CIT payable 13 2,081
Other current liabilities 28 8,072 5,451
Total current liabilities 150,567 115,688
Total liabilities 251,539 218,084
Total equity and liabilities 357,303 321,181
2022Sif Annual Report
93
Consolidated statement of changes in equity for the year ended 31 December 2022
AMOUNTS IN EUR '000 Share capital
Additional paid-
in capital
Retained
earnings
Result for the
year Total
Non-controlling
interests Total equity
Balance as at 1 January 2022 5,100 1,059 84,527 11,590 102,276 821 103,097
Appropriation of result - - 11,590 (11,590 ) - - -
Total comprehensive income
Result for the year - - - 7,217 7,217 301 7,518
Total comprehensive income - - - 7,217 7,217 301 7,518
Transactions with owners of the Company
Dividend distributions - - (4,851 ) - (4,851 ) - (4,851 )
Total transactions with owners of the
Company - - (4,851 ) - (4,851 ) - (4,851 )
Balance as at 31 December 2022 5,100 1,059 91,266 7,217 104,642 1,122 105,764
Balance as at 1 January 2021 5,100 1,059 80,316 7,271 93,746 524 94,270
Appropriation of result - - 7,271 (7,271 ) - - -
Total comprehensive income
Result for the year - - - 11,590 11,590 297 11,887
Total comprehensive income - - - 11,590 11,590 297 11,887
Transactions with owners of the Company
Dividend distributions - - (3,060 ) - (3,060 ) - (3,060 )
Total transactions with owners of the
Company - - (3,060 ) - (3,060 ) - (3,060 )
Balance at 31 December 2021 5,100 1,059 84,527 11,590 102,276 821 103,097
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Consolidated cash flow statement for the year ended 31 December 2022
AMOUNTS IN EUR '000 Notes 2022 2021
Cash flows from operating activities
Profit before tax 10,188 15,095
Adjustments for:
Depreciation and amortization of Property, Plant and Equipment and Intangible
assets 14,15 14,116 16,524
Depreciation of right-of-use assets 31 10,110 5,189
Fair value adjustments on investment property 16 (90 ) (25 )
Unrealised changes in joint ventures 17 39 (82 )
Gain on bargain purchase - (1,320 )
Impairment (losses) / reversals on financial assets 3 (16 )
Net finance costs 2,010 2,352
Changes in net working capital
o Inventories 18 185 (237 )
o Contract assets and liabilities 19 (10,626 ) 40,386
o Trade receivables 20 (4,539 ) 26,637
o Prepayments 125 (605 )
o Trade payables 26,544 (1,720 )
Total changes in net working capital 11,689 64,461
VAT payable and receivable 4,222 (5,542 )
Initial direct costs on operating lease contracts (605 ) (2,095 )
Other financial assets - 859
Employee benefits 902 198
Provisions 228 -
Wage tax and social security 798 (1,000 )
Other liabilities 2,326 (1,291 )
Government grants received 380 841
Income taxes received / (paid) (5,134 ) (1,971 )
Interest received / (paid) (822 ) (947 )
Net cash from operating activities 50,360 91,230
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Consolidated cash flow statement for the year ended 31 December 2022 (continued)
AMOUNTS IN EUR '000 2022 2021
Cash flows from investing activities
Purchase of intangible fixed assets 14 (760 ) (100 )
Purchase of property, plant and equipment 15 (19,523 ) (10,826 )
Acquisition of subsidiaries - (567 )
Net cash from (used in) investing activities (20,283 ) (11,493 )
Cash flows from financing activities
Movements in revolving credit facility 24 - (174 )
Payment of lease liabilities 31 (8,595 ) (5,947 )
Dividends paid 22 (4,851 ) (3,060 )
Net cash from (used in) financing activities (13,446 ) (9,181 )
Net increase / (decrease) in cash and cash equivalents 16,631 70,556
Cash and cash equivalents at 1 January 73,201 2,645
Cash and cash equivalents at 31 December 89,832 73,201
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Separate statement of profit or loss for the year ended 31 December 2022
AMOUNTS IN EUR ’000 Notes 2022 2021
Management fee 39 1,716 1,942
Total revenue 1,716 1,942
Indirect personnel expenses 40 (1,903) (1,929)
General income / (expenses) (8,028) (5,437)
Operating profit (8,215) (5,424)
Finance costs (547) (555)
Net finance costs (547) (555)
Profit before tax (8,762) (5,979)
Income tax expense 1,304 783
Result of participation in subsidiaries 42 14,653 16,775
Result of participation in joint ventures 22 11
Profit after tax 7,217 11,590
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Separate statement of financial position as at 31 December 2022 (before profit appropriation)
AMOUNTS IN EUR ’000 Notes 31-Dec-2022 31-Dec-2021
Assets
Investments in subsidiaries and
joint ventures 42 185,786 171,127
Other non-current financial assets 195 195
Deferred tax assets 7 -
Total non-current assets 185,988 171,322
VAT receivable 417 243
CIT receivable 1,821 -
Prepayments 303 580
Cash and cash equivalents 422 228
Total current assets 2,963 1,051
Total assets 188,951 172,373
AMOUNTS IN EUR ’000 31-Dec-2022 31-Dec-2021
Equity
Share capital 5,100 5,100
Additional paid-in capital 1,059 1,059
Legal reserves 860 -
Retained earnings 90,406 84,527
Result for the year 7,217 11,590
Total equity 43 104,642 102,276
Liabilities
Provisions 44 20,259 16,430
Employee benefits - non-
current 74 -
Total non-current liabilities 20,333 16,430
Trade payables 402 186
Amounts due to group
companies 45 61,388 50,224
Employee benefits -
current 325 263
Wage tax and social
security 58 60
CIT payable - 2,463
Other current liabilities 1,803 471
Total current liabilities 63,976 53,667
Total liabilities 84,309 70,097
Total equity and liabilities 188,951 172,373
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Notes to the separate financial statements for the year ended 31 December 2022
36 Reporting entity
Sif Holding N.V. (the ‘Company’) is a public limited liability company domiciled in the
Netherlands. The Company’s registered office is at Mijnheerkensweg 33, Roermond.
The company is registered with the Netherlands Chamber of Commerce Business
Register under number 13016026.
37 Basis of preparation
The separate financial statements (before profit appropriation) of Sif Holding N.V.
have been prepared in accordance with the provisions of Part 9, Book 2, of the
Netherlands Civil Code. The Company uses the option of Article 362.8 of Part 9,
Book 2, of the Netherlands Civil Code to prepare the separate financial statements,
using the same accounting policies as those used for the consolidated financial
statements (we refer to note 3). The separate financial statements have therefore
been prepared in accordance with the measurement and recognition requirements
of the International Financial Reporting Standards as adopted by the European
Union (EU-IFRS). Investments in subsidiaries are accounted for using the equity
value. The separate financial statements are presented in EUR (‘000), which is also
the Company’s functional currency, if not stated otherwise.
38 Significant accounting policies
The Group has consistently applied the accounting policies to all periods presented
in these separate financial statements. For the principles of valuation of assets and
liabilities and for the determination of the result, reference is made to the notes of
the consolidated financial statements.
Taxes
For corporate income tax purposes, the Company is the parent of a fiscal unity that
contains the Dutch wholly-owned group companies. The Company is therefore
jointly and severally liable for the corporate income tax liabilities of the tax unity. KCI
The Engineers B.V. has joined this fiscal unity as from 1 September 2021.
In the fiscal unity, current tax is allocated to the legal entity based on its relative
share in total taxable income, before temporary differences and tax incentives.
Temporary differences are allocated to the legal entity they relate to and tax
incentives are fully allocated to the parent of the fiscal unity.
39 Management fee
The management fee contains the settlement of charges between Sif Holding N.V.
and Sif Netherlands B.V. The management fee also includes compensation of the
Executive Board and Supervisory Board.
40 Personnel expenses
Number of employees
The average number of employees employed by the Company in 2022 amounts to
2 FTE (2021: 2 FTE), which are the members of the Executive Board.
41 List of subsidiaries and joint ventures
Included in the separate financial statements are the following entities:
Name Location Share in issued
capital %
Sif Property B.V. Roermond 100
Sif Netherlands B.V. Roermond 100
Sif Japan K.K.
1
Tokyo 95
Twinpark Sif B.V.
2
Roermond 59,4
SBR Engineering GmbH Siegen-Netphen 50
KCI The Engineers B.V.
3
Schiedam 100
1 – Sif Japan K.K. is liquidated per 26 August 2022
2 - Legally the Group holds 59,4% of the shares, but 60% in result appropriation.
3 – Acquired per 15 March 2021
Sif Holding N.V. issued a guarantee as mentioned in Article 403, Part 9, Book 2 of the
Netherlands Civil Code for its subsidiaries Sif Property B.V. and Sif Netherlands B.V.
Furthermore Sif issued a parent company guarantee on behalf of Twinpark Sif BV.
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42 Investments in subsidiaries and joint ventures
AMOUNTS IN EUR '000
Balance at 1 January 2022 171,127
Share in income of subsidiaries 14,675
Dividend / capital repayment (16)
Balance at 31 December 2022 185,786
Balance at 1 January 2021 151,509
Acquisition 2,760
Share in income of subsidiaries 16,786
Other movements 72
Balance at 31 December 2021 171,127
Sif Property B.V. has a negative equity value of EUR 20.3 million (2021: EUR
16.4 million) and a loss for the year of EUR 3.8 million (2021: EUR 5.6 million). For
more information related to the provision reference is made to note 44.
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43 Equity
Below the statement of changes in equity for the year ended 31 December 2022:
AMOUNTS IN EUR '000 Share capital
Additional paid-
in capital Legal reserves
Retained
earnings
Result for the
year
Balance as at 1 January 2022 5,100 1,059 - 84,527 11,590
Appropriation of result - - - 11,590 (11,590)
Movement in legal reserves - - 860 (860) -
Total comprehensive income
Result for the year - - - - 7,217
Total comprehensive income - - - - 7,217
Transactions with owners of the Company
Dividend distributions - - - (4,851) -
Total transactions with owners of the Company - - - (4,851) -
Balance as at 31 December 2022 5,100 1,059 860 90,406 7,217
Balance as at 1 January 2021 5,100 1,059 - 80,316 7,271
Appropriation of result - - - 7,271 (7,271)
Total comprehensive income
Result for the year - - - - 11,590
Total comprehensive income - - - - 11,590
Transactions with owners of the Company
Dividend distributions - - - (3,060) -
Total transactions with owners of the Company - - - (3,060) -
Balance at 31 December 2021 5,100 1,059 - 84,527 11,590
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Share capital
On 14 January 2016, the authorised capital of the Group was increased to EUR
25 million, consisting of 125,000,000 shares with a nominal value of EUR
0.20 (20 eurocents) per share. The issued shares were converted into
25,501,356 shares, each having a nominal value of EUR 0.20 (20 eurocents per
share). All ordinary shares rank equally with regard to the Company’s residual
assets. No changes have occured during 2022.
Additional paid-in capital
The additional paid-in capital results from contributions in kind by the shareholder in
relation to the issuance of loans as the transaction costs related to the issuance of
additional loans were not passed on by the shareholder.
No differences are identified in the capital and paid-in capital for tax purposes.
Legal reserve
The legal reserve results from the capitalisation of internally generated intangible
assets, related to research and development projects.
Dividends
The following dividends were declared and settled by the Company during the year:
2022 2021
Number of ordinary shares dividend eligible 25,501,356 25,501,356
Rounded dividend per ordinary share (€) 0.19 0.12
Dividends declared and settled during the
year (€ '000) 4,851 3,060
Sif’s dividend policy is a payout of dividend in line with Sif’s medium to long-term
financial performance and targets, with the aim of increasing dividends-per-share
over time. For 2023 no dividend pay-out will be proposed.
44 Provisions
The provisions of Sif Holding N.V. at 31 December 2022 relate to a provision for
negative equity of a direct subsidiary of the Company (Sif Property B.V.), in
accordance with article 2:403 paragraph 1 of the Dutch Civil Code amounted to EUR
20.3 million. (2021: EUR 16.4 million). The movement in the year of EUR 3.8 million
(2021: EUR 5.6 million) equals the loss for the year of Sif Property B.V., which is
recorded through General income / (expenses) in the Seperate statement of profit or
loss.
45 Amounts due to group companies
AMOUNTS IN EUR ’000 2022 2021
Payables to group companies (current
liabilities) 61,388 50,224
Total amounts due to group companies 61,388 50,224
Payable to Sif Netherlands B.V. 52,410 42,889
Payable to Sif Property B.V. 8,597 7,141
Payable to KCI The Engineers B.V. 381 194
Total amounts due to group companies 61,388 50,224
The amounts due to group companies are free of interest and are frequently settled.
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Amounts due from group companies
Amounts due from group companies are stated initially at fair value and
subsequently at amortized cost. Amortized cost is determined using the effective
interest rate. The company recognize a credit loss for financial assets (such as
a loan) based on an expected credit loss (ECL) which will occur in the coming
twelve months or — after a significant decrease in credit quality or when the
simplified model can be used — based on the entire remaining loan term. For
intercompany receivables the ECL would be applicable as well, however this could
cause differences between equity in the consolidated and separate financial
statements. For this reason, the company elected to eliminate these differences
through the respective receivable account in the separate financial statements.
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46 Related parties
Transactions with subsidiaries
During the year several transactions between Sif Holding N.V., Sif Netherlands B.V.,
Sif Property B.V. and KCI the Engineers B.V. took place. These transactions include
compensation of the Executive Board and Supervisory Board. Transactions between
Sif Holding N.V. and its subsidiaries takes place through the amounts due to group
companies. As per year-end the amounts due to group companies amount to
a liability to Sif Netherlands B.V. of approximately EUR 51.6 million (2021: EUR
43.3 million), a liability to Sif Property B.V. of approximately EUR 8.6 million (2021:
EUR 7.1 million) and a liability to KCI The Engineers B.V. of approximately EUR
0.4 million (2021: EUR 0.2 million).
Transactions with joint ventures
During the year, the Group received invoices for work performed by SBR Engineering
GmbH for a total amount of EUR 192 thousand (2021: EUR 180 thousand).
Transactions with key management personnel
Reference is made to note 33 of the consolidated financial statements for the
overview of Executive Board remuneration. The annual bonus is based on pre-
defined KPI’s that may differ for each Executive Board member. Reference is made
to the Remuneration Report for further details.
47 Events after the reporting period
Reference is made to note 35 of the Consolidated financial statements.
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Other Information
Articles of association related to profit appropriation
Article 34
34.1 Subject to Article 32.1, the profits shown in the Company's annual accounts
in respect of a financial year shall be appropriated as follows, and in the
following order of priority:
a. the Executive Board shall determine with the approval of the Supervisory
Board which part of the profits shall be added to the Company's reserves;
and
b. subject to Article 29, any remaining profits shall be at the disposal of the
General Meeting for distribution to the shareholders.
34.2 Without prejudice to Article 32.1, a distribution of profits shall be made after
the adoption of the annual accounts that show that such distribution is
allowed.
34.3 The Executive Board may resolve with the approval of the Supervisory Board
to make interim distributions, provided that it appears from interim accounts
to be prepared in accordance with Section 2:105(4) DCC that the
requirement referred to in Article 32.1 has been met.
Corporate information
Corporate office
Sif Holding N.V.
Mijnheerkensweg 33,
6040 AM Roermond
The Netherlands
Tel. +31 475 385777
e-mail: info@sif-group.com
Trade register
Chamber of Commerce
Roermond, the Netherlands
Number 13016026
Legal form / Principal place of business
Naamloze vennootschap
Roermond
The Netherlands
Shareholder, clearing and settlement agent
Euroclear Nederland
Herengracht 459-469
1017 BS Amsterdam
The Netherlands
Listing and payment agent
ABN AMRO Bank NV
Gustav Mahlerlaan 10
1082 PP Amsterdam
The Netherlands
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Independent auditor’s report
To: the shareholders and supervisory board of Sif Holding N.V.
Report on the audit of the financial statements 2022 included in
the annual report
Our opinion
We have audited the financial statements 2022 of Sif Holding N.V. based in
Roermond, the Netherlands. The financial statements comprise the consolidated
and separate financial statements.
In our opinion:
the accompanying consolidated financial statements give a true and fair view of
the financial position of Sif Holding N.V. as at 31 December 2022 and of its result
and its cash flows for 2022 in accordance with International Financial Reporting
Standards as adopted by the European Union (EU-IFRS) and with Part 9 of Book
2 of the Dutch Civil Code
>
the accompanying separate financial statements give a true and fair view of the
financial position of Sif Holding N.V. as at 31 December 2022 and of its result for
2022 in accordance with Part 9 of Book 2 of the Dutch Civil Code.
>
The consolidated financial statements comprise:
the consolidated statement of financial position as at 31 December 2022>
the following statements for the year ended 31 December 2022: the consolidated
statements of profit or loss, changes in equity and the consolidated cash flow
statement
>
the notes comprising a summary of the significant accounting policies and other
explanatory information.
>
The separate financial statements comprise:
the separate statement of financial position as at 31 December 2022>
the separate statement of profit or loss account for the year ended 31 December
2022
>
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.
We are independent of Sif Holding N.V. (the company or the group) 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 and any findings were addressed in this
context, and we do not provide a separate opinion or conclusion on these matters.
Our understanding of the business
Sif Holding N.V. is primarily involved in engineering and manufacturing of foundation
piles for offshore wind farms and metal structures, parts of metal structures, pipes,
pipe structures, and components for the offshore industry. The group is structured
in components and we tailored our audit approach accordingly. We paid specific
attention in our audit to a number of areas driven by the operations of the group and
our risk assessment.
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We determined materiality and identified and assessed the risks of material
misstatement of the financial statements, whether due to fraud or error in order to
design audit procedures responsive to those risks and to obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion.
Materiality
Materiality € 2,000,000 (2021: € 1,800,000)
Benchmark
applied
1,6% of contribution (2021: 1,6% of contribution)
Explanation Consistent with last year, we selected contribution to
benchmark materiality as, in our professional judgment,
contribution is a key performance indicator and users of
the financial statements focus on earnings based
measures. Contribution is calculated as the total revenue
minus cost of raw materials, subcontracted work, other
external charges, logistic and other project related
expenses, as disclosed in the Key figures 2018-2022.
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.
We agreed with the supervisory board that misstatements in excess of € 100,000,
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
Sif Holding N.V. is at the head of a group of entities. The financial information of this
group is included in the consolidated financial statements.
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 for group
entities. Decisive were the size and/or the risk profile of the group entities or
operations. On this basis, we selected group entities for which an audit or review had
to be carried out on the complete set of financial information or specific items.
Our group audit mainly focused on significant group entities, for which the majority
of transactions is initiated, recorded, processed and reported within one
organization. For all entities of the Sif group, except for KCI the Engineers B.V., we
performed the audit of the complete financial information (full scope). For KCI the
Engineers B.V. (full year) we performed analytical procedures (desktop review) to
corroborate our assessment that there are no significant risks of material
misstatements. We have applied a centralized audit approach and all audit
procedures have been performed by one audit team.
In total these procedures represent 99% of the group’s total assets, 98% of revenues
and 95% of contribution.
By performing the procedures mentioned above for components of the group,
together with additional procedures at group level, we have been able to obtain
sufficient and appropriate audit evidence about the group’s financial information to
provide an opinion on the consolidated financial statements.
Teaming and use of specialists
We ensured that the audit team included the appropriate skills and competences
which are needed for the audit of a listed client in the offshore wind industry. We
included specialists in the areas of IT audit, forensics, sustainability and income tax.
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Our focus on climate-related risks and the energy transition
Climate change and the energy transition are high on the public agenda. Issues such
as CO2 reduction impact financial reporting, as these issues entail risks for the
business operation, the valuation of assets and provisions or the sustainability of
the business model and access to financial markets of companies with a larger
CO2 footprint. The executive board reported in the section ‘Our performance in
2022’ of the management report, how the company is addressing climate-related
and environmental risks, how the company supports the energy transition and the
company’s targets and ambitions to reduce the negative effects of the activities of
the company and its value chain.
As part of our audit of the financial statements, we evaluated the extent to which
climate-related risks and the effects of the energy transition and the company’s
targets and ambitions, are taken into account in estimates and significant
assumptions. Furthermore, we read the management report and considered whether
there is any material inconsistency between the non-financial information in section
‘Our performance in 2022’ and the financial statements.
Based on the audit procedures performed, we do not deem climate-related risks to
have a material impact on the financial reporting judgements, estimates or
significant assumptions as at 31 December 2022.
Our focus on fraud and non-compliance with laws and regulations
Our responsibility
Although we are not responsible for preventing fraud or non-compliance and we
cannot be expected to detect non-compliance with all laws and regulations, it is our
responsibility to obtain reasonable assurance that the financial statements, taken as
a whole, are free from material misstatement, whether caused by fraud or error. 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.
Our audit response related to fraud risks
We identified and assessed the risks of material misstatements of the financial
statements due to fraud. During our audit we obtained an understanding of the
company and its environment and the components of the system of internal control,
including the risk assessment process and the executive board’s process for
responding to the risks of fraud and monitoring the system of internal control and
how the supervisory board exercises oversight, as well as the outcomes. We refer to
section ‘Risk and opportunity management’ of the management report for the
executive board’s risk assessment after consideration of potential fraud risks.
We evaluated the design and relevant aspects of the system of internal control and
in particular the fraud risk assessment, as well as the code of conduct and
whistleblower regulation. We evaluated the design and the implementation and,
where considered appropriate, tested the operating effectiveness, of controls
designed to mitigate fraud risks.
As part of our process of identifying fraud risks, we evaluated fraud risk factors with
respect to financial reporting fraud, misappropriation of assets and bribery and
corruption in co-operation with our forensic specialists. We evaluated whether these
factors indicate that a risk of material misstatement due to fraud is present.
We incorporated elements of unpredictability in our audit. We also considered the
outcome of our other audit procedures and evaluated whether any findings were
indicative of fraud or non-compliance.
As in all of our audits, we addressed the risks related to management override of
controls. For these risks we have performed procedures among others to evaluate
key accounting estimates for management bias that may represent a risk of material
misstatement due to fraud, in particular relating to important judgment areas and
significant accounting estimates as disclosed in Note 3.2 to the financial
statements. We have also used data analysis to identify and address high-risk
journal entries and evaluated the business rationale (or the lack thereof) of
significant extraordinary transactions, including those with related parties.
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These risks did however not require significant auditor’s attention, besides the
following specific fraud risk identified during our audit:
Valuation of contract assets and liabilities (including management override / revenue
recognition)
Fraud risk In our audit approach we considered the fraud risk of
management override of controls and the presumed fraud risk in
revenue recognition in the valuation of contract assets and
liabilities and related revenue recognition. Judgments and
assumptions in this area represent a risk of material
misstatement due to fraud.
Our audit
approach
We described the audit procedures responsive to the fraud risk as
aforementioned in the description of our audit approach for the
key audit matter “Valuation of contract assets and liabilities
(including revenue recognition)”.
We considered available information and made enquiries of relevant executives,
directors, legal / compliance officer and the supervisory board. The fraud risk we
identified, enquiries and other available information did not lead to specific
indications for fraud or suspected fraud potentially materially impacting the view of
the financial statements.
Our audit response related to risks of non-compliance with laws and
regulations
We performed appropriate audit procedures regarding compliance with the
provisions of those laws and regulations that have a direct effect on the
determination of material amounts and disclosures in the financial statements.
Furthermore, we assessed factors related to the risks of non-compliance with laws
and regulations that could reasonably be expected to have a material effect on the
financial statements from our general industry experience, through discussions with
the executive board and the legal / compliance officer, reading minutes and
performing substantive tests of details of classes of transactions, account balances
or disclosures. We also inspected lawyers’ letters and correspondence with
regulatory authorities and remained alert to any indication of (suspected) non-
compliance throughout the audit. Finally we obtained written representations that all
known instances of non-compliance with laws and regulations have been disclosed
to us.
Our audit response related to going concern
As disclosed in section ‘Going concern’ in Note 2 to the financial statements, the
financial statements have been prepared on a going concern basis. When preparing
the financial statements, the executive board made a specific assessment of the
company’s ability to continue as a going concern and to continue its operations for
the foreseeable future, including the considerations of the impact relating to the
expansion decision.
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.
We discussed and evaluated the specific assessment with the executive board
exercising professional judgment and maintaining professional skepticism. We
considered whether the executive board’s going concern assessment, based on our
knowledge and understanding obtained through our audit of the financial
statements or otherwise, contains all relevant events or conditions that may cast
significant doubt on the company’s ability to continue as a going concern, including
considerations about the decision to expand and (re-)financing.
Based on our procedures performed, we did not identify material uncertainties about
going concern. 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.
Our key audit matters
Key audit matters are those matters that, in our professional judgment, were of
most significance in our audit of the financial statements. We have communicated
the key audit matter to the supervisory board. The key audit matter is not
a comprehensive reflection of all matters discussed. In comparison with previous
year, our key audit matters did not change.
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Valuation of contract assets and liabilities (including revenue recognition)
Risk Revenues from construction contracts with customers and direct costs in relation to contract assets and liabilities are recognized over time. At
each reporting date management assesses the progress towards the complete satisfaction of the performance obligations taking into consideration
all aspects in order to finalize the projects in line with contractual agreements. The progress towards complete satisfaction of the performance
obligation over time is measured based on the actual hours incurred compared with the total estimated hours needed to complete the project. As
circumstances and related significant assumptions by management change over time, fluctuations in the expected project result may occur.
Revenue recognition requires management to make a number of estimates and assumptions surrounding e.g. total estimated hours and costs to
complete the project, variable considerations for potential liquidated damages and (any) claims / contingencies. We considered the potential risk of
management override of controls and we presume that there are risks of fraud in revenue recognition. The valuation of contract assets and
liabilities (including revenue recognition) is therefore considered to be a key audit matter.
Reference is made to Note 3, 6 and 19 of the consolidated financial statements for the significant accounting policies and disclosures on revenue
recognition.
Our audit
approach
Our audit procedures included, amongst others, evaluating the appropriateness of the company’s accounting policies related to the valuation of
contract assets and liabilities including revenue recognition according to IFRS 15 “Revenue from contracts with customers” and whether the
accounting policies have been applied consistently or whether changes, if any, are appropriate in the circumstances. In addition, we evaluated the
design and implementation of internal controls related to the completeness, accuracy and timing of the revenue recognized.
Furthermore, to assess that management estimates and assumptions are within a reasonable range, our audit procedures include inspecting
contractual arrangements and reconciling total contract revenues to signed contracts, challenging management’s estimates of total expected
hours, costs to complete the project, and the assessment of potential variable considerations for liquidated damages. We performed physical
observations at the production sites as per year-end to observe the progress towards the complete satisfaction of the performance obligation. We
performed procedures on management’s assessment of expected profitability or losses on the projects and any claims/contingencies.
Furthermore, we performed a look back analysis to challenge prior years estimates and to validate whether assumptions and estimates made by
management in prior periods support the actual results of significant estimates. We obtained audit evidence from events occurring up to the date of
the auditor’s report to determine whether any events require adjustment to the financial statements.
We evaluated the adequacy of the Company’s disclosures related to revenue recognition and accounting estimates, particularly whether disclosures
adequately convey significant judgments and the degree of estimation uncertainty.
Key observations We consider that the management’s estimates and assumptions used in revenue recognition for the valuation of contract assets and liabilities are
within an acceptable range.
2022Sif Annual Report
158
Report on other information included in the annual report
The annual 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
>
contains the information as required by Part 9 of Book 2 of the Dutch Civil Code
for the management report and the other information as required by Part 9 of
Book 2 of the Dutch Civil Code and as required by Sections 2:135b and
2:145 subsection 2 of the Dutch Civil Code for the remuneration report.
>
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 and Section 2:135b sub-Section 7 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.
The executive board 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 required by Part 9 of Book 2 of the Dutch Civil
Code. The executive board and the supervisory board are responsible for ensuring
that the remuneration report is drawn up and published in accordance with
Sections 2:135b and 2:145 subsection 2 of the Dutch Civil Code.
Report on other legal and regulatory requirements and ESEF
Engagement
We were engaged by the supervisory board as auditor of Sif Holding N.V. , as of the
audit for the year 2007 and have operated as statutory auditor ever since that date.
The company became an EU – public interest entity in 2016.
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.
European Single Electronic Reporting Format (ESEF)
Sif Holding N.V. has prepared the annual 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 report prepared in the XHTML format, including the
(partially) marked-up consolidated financial statements as included in the reporting
package by Sif Holding N.V., complies in all material respects with the RTS on ESEF.
The executive board is responsible for preparing the annual report, including the
financial statements, in accordance with the RTS on ESEF, whereby the executive
board combines the various components into a single reporting package.
Our responsibility is to obtain reasonable assurance for our opinion whether the
annual 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 amongst others:
obtaining an understanding of the company’s financial reporting process,
including the preparation of the reporting package
>
identifying and assessing the risks that the annual 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:
>
2022Sif Annual Report
159
obtaining the reporting package and performing validations to determine whether
the reporting package containing the Inline XBRL instance document and the
XBRL extension taxonomy files, has been prepared in accordance with the
technical specifications as included in the RTS on ESEF
>
examining the information related to the consolidated financial statements in the
reporting package to determine whether all required mark-ups have been applied
and whether these are in accordance with the RTS on ESEF.
>
Description of responsibilities regarding the financial statements
Responsibilities of the executive board and the supervisory 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 Part 9 of Book 2 of the Dutch
Civil Code. Furthermore, the executive board is responsible for such internal control
as the executive board determines is necessary to enable the preparation of the
financial statements that are free from material misstatement, whether due to fraud
or error.
As part of the preparation of the financial statements, the executive board is
responsible for assessing the company’s ability to continue as a going concern.
Based on the financial reporting framework 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. 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 judgment and have maintained professional
skepticism throughout the audit, in accordance with Dutch Standards on Auditing,
ethical requirements and independence requirements. The ‘Information in support of
our opinion’ section above includes an informative summary of our responsibilities
and the work performed as the basis for our opinion.
Our audit further included among others:
Performing audit procedures responsive to the risks identified, and obtaining
audit evidence that is sufficient and appropriate to provide a basis for our
opinion
>
Obtaining an understanding of internal control relevant to the audit in order to
design audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the company’s
internal control
>
Evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made by the
executive board
>
Evaluating the overall presentation, structure and content of the financial
statements, including the disclosures
>
Evaluating whether the financial statements represent the underlying
transactions and events in a manner that achieves fair presentation
>
2022Sif Annual Report
160
Communication
We communicate with the supervisory board regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any
significant findings in internal control that we identify during our audit. In this
respect we also submit an additional report to the audit committee of the
supervisory board in accordance with Article 11 of the EU Regulation on specific
requirements regarding statutory audit of public-interest entities. The information
included in this additional report is consistent with our audit opinion in this auditor’s
report.
We provide the supervisory board with a statement that we have complied with
relevant ethical requirements regarding independence, and to communicate with
them all relationships and other matters that may reasonably be thought to bear on
our independence, and where applicable, related safeguards.
From the matters communicated with the supervisory board, 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.
Eindhoven, 30 March 2023
Ernst & Young Accountants LLP
J.R. Frentz
2022Sif Annual Report
161
Limited assurance report of the independent auditor on Sif’s
selected ESG performance indicators
To: the shareholders and supervisory board of Sif Holding N.V.
Our conclusion
We have performed a limited assurance engagement on selected ESG performance
indicators in the accompanying annual report for the year 2022 of Sif Holding N.V. at
Roermond.
Based on our procedures performed and the evidence obtained, nothing has come to
our attention that causes us to believe that the selected ESG performance indicators
are not prepared, in all material respects, in accordance with the reporting criteria as
included in the “Reporting criteria” section of our report.
The selected ESG performance indicators consist of and are included on the
following pages of the annual report:
Lost Time Injury Frequency (LTIF) (p.10)>
Carbon footprint (p.10))>
Involvement in projects that will result in installed renewable energy capacity
(wind) in MW (p.10)
>
Basis for our conclusion
We have performed our limited assurance engagement on the selected ESG
performance indicators
in accordance with Dutch law, including Dutch Standard 3000A “Assurance-
opdrachten anders dan opdrachten tot controle of beoordeling van historische
financiële informatie (attest-opdrachten)” (Assurance engagements other than
audits or reviews of historical financial information attestation engagements). Our
responsibilities under this standard are further described in the Our responsibilities
for the assurance engagement on the selected ESG performance indicators section
of our report.
We are independent of Sif Holding N.V. 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). This
includes that we do not perform any activities that could result in a conflict of
interest with our independent assurance engagement. Furthermore, we have
complied with the Verordening gedrags- en beroepsregels accountants (VGBA,
Dutch code of ethics).
We believe that the assurance evidence we have obtained is sufficient and
appropriate to provide a basis for our conclusion.
Reporting criteria
The reporting criteria used for the preparation of the selected ESG performance
indicators are the reporting criteria developed by Sif Holding N.V. and are disclosed
in section “Reporting criteria” of the annual report.
The absence of an established practice on which to draw, to evaluate and measure
the selected ESG performance indicators allows for different, but acceptable,
measurement techniques and can affect comparability between entities and over
time.
Consequently, the selected ESG performance indicators need to be read and
understood together with the reporting criteria used.
Unassured corresponding information
No assurance engagement has been performed on the selected ESG performance
indicators for the period 2014 up to 2020. Consequently, the corresponding selected
ESG performance indicators and thereto related disclosures for the period 2014 up
to 2020 are not assured.
Limitations to the scope of our assurance engagement
Our assurance engagement is restricted to the selected ESG performance indicators.
We have not performed assurance procedures on any other information as included
in the annual report in light of this engagement.
2022Sif Annual Report
162
The selected ESG performance indicators include prospective information such as
ambitions, strategy, plans, expectations and estimates. Inherent to this prospective
information, the actual future results are uncertain. We do not provide any
assurance on the assumptions and achievability of prospective information in the
selected ESG performance indicators.
The references to external sources or websites are not part of our assurance
engagement on the selected ESG performance indicators. We therefore do not
provide assurance on this information.
Our conclusion is not modified in respect to these matters.
Responsibilities of the executive board and the supervisory board
for the selected ESG performance indicators
The executive board is responsible for the preparation of the selected ESG
performance indicators in accordance with the reporting criteria as included in the
“Reporting criteria” section of our report.
The executive board is solely responsible for selecting and applying these reporting
criteria, taking into account applicable law and regulations related to reporting. In
this context, the executive board is responsible for the identification of the intended
users and the criteria being applicable for their purposes. The choices made by the
executive board regarding the scope of the selected ESG performance indicators
and the reporting policy are summarized in in section “Reporting criteria” of the
annual report.
Furthermore, the executive board is responsible for such internal control as it
determines is necessary to enable the preparation of the selected ESG performance
indicators that are free from material misstatement, whether due to error or fraud.
The supervisory board is responsible for overseeing the reporting process of Sif
Holding N.V.
Our responsibilities for the assurance engagement on the selected
ESG selected performance indicators
Our responsibility is to plan and perform our limited assurance engagement in
a manner that allows us to obtain sufficient and appropriate assurance evidence for
our conclusion.
Procedures performed to obtain a limited level of assurance are aimed to determine
the plausibility of information and vary in nature and timing from, and are less in
extent, than for a reasonable assurance engagement. The level of assurance
obtained in a limited assurance engagement is therefore substantially less than the
assurance obtained in a reasonable assurance engagement.
We apply the Nadere voorschriften kwaliteitssystemen (NVKS, regulations for quality
management systems) and accordingly maintain a comprehensive system of quality
control including documented policies and procedures regarding compliance with
ethical requirements, professional standards and other relevant legal and regulatory
requirements.
The procedures of our limited assurance engagement included among others:
Performing an analysis of the external environment and obtaining an
understanding of the sector, insight into relevant sustainability themes and
issues, relevant laws and regulations and the characteristics of the company as
far as relevant to the selected ESG performance indicators
>
Evaluating the appropriateness of the reporting criteria used, their consistent
application and related disclosures on the selected ESG performance indicators.
This includes the evaluation of the reasonableness of estimates made by the
executive board
>
Obtaining through inquiries a general understanding of internal control, reporting
processes and information systems relevant to the preparation of the selected
ESG performance indicators, without obtaining evidence about implementation
or testing the operating effectiveness of controls
>
2022Sif Annual Report
163
Identifying areas of the selected ESG performance indicators with a higher risk of
misleading or unbalanced information or material misstatements, whether due to
error or fraud. Designing and performing further assurance procedures aimed at
determining the plausibility of the selected ESG performance indicators
responsive to this risk analysis. These further assurance procedures consisted
amongst others of:
>
Interviewing management and relevant staff at corporate level responsible for
the strategy, policy and results relating to the selected ESG performance
indicators
>
Interviewing relevant staff responsible for providing the information for,
carrying out internal control procedures on, and consolidating the data in the
selected ESG performance indicators
>
Obtaining assurance information that the selected ESG performance
indicators reconcile with underlying records of the company
>
Reviewing, on a limited test basis, relevant internal and external
documentation
>
Performing an analytical review of the data and trends>
Evaluating the consistency of the selected ESG performance indicators with the
information in the annual report which is not included in the scope of our
assurance engagement
>
Eindhoven, 30 March 2023
Ernst & Young Accountants LLP
signed by A.B.E. Laan
2022Sif Annual Report
164
Reporting Criteria
Lost Time Injury
Frequency (LTIF)
Sif defines its Lost Time Injury Frequency (LTIF) as the number
of Sif’s permanent and flexible employees involved in reported
injuries leading to absence from work (more than 1 lost working
day, excluding the day of the injury) per million exposure hours.
Reportable injuries are based on actual occurrences and are
never extrapolated or estimated. Despite all measures and an
open safety culture there is an inherent risk of incomplete
accident reporting.
Sif is partially dependent on information provided by the person
involved in an accident. The exposure hours are registered
actual hours in our system. The LTIF KPI refers to all reported
cases.
CO2 footprint Sif reports its greenhouse emissions as CO2 equivalent,
considering other greenhouse gasses than CO2. Sif calculates
CO2 emissions using conversion factors from
CO2emissiefactoren.nl. Sif uses well-to-wheel emission factors.
All conversion factors are reviewed annually and updated if
necessary.
Sif’s reporting scope includes its direct CO2 emissions (scope 1
emissions, from Sif’s own sources), indirect CO2 emissions
from the generation of purchased electricity consumed by Sif
(scope 2 emissions) and other emissions related to activities
not owned or controlled by Sif (scope 3 emissions) for
employee travel.
Activity data, mostly based on meter readings, invoices and data
provided by suppliers, are used to calculate Sif’s footprint.
Where complete and accurate data are not available, Sif uses
calculations or estimates using reliable methods and input data.
The CO2 emission from electricity consumption (scope 2) is
compensated by the Certificates of Origin as generated by the
Wind Turbine Generator on Sif’s premises, supplemented with
additional purchased Certificates of Origin if necessary. Sif owns
the related Guarantees of Origin.
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165
Participation in
projects that will
result in installed
renewable energy
capacity
Sif reports its participation in projects that will result in installed
renewable energy capacity in number of megawatts (MW) of
wind turbine generator capacity that will be installed on a
monopile completed by Sif.
Sif measures complete monopiles by the number of monopiles
with a completion certificate after production. The future
installed renewable energy capacity per monopile is the
estimated capacity of the wind turbine generator that will be
installed on the respective monopile in MW. This estimated
capacity is determined by the nameplate capacity (in intended
full-load sustained output) of the respective wind farm and
actual capacity may deviate from this.
2022Sif Annual Report
166
Definition and Explanation of use of non-IFRS financial measures
(a) Contribution Total revenue from contracts with customers minus raw
materials, subcontracted work and other external charges and
logistic and other project-related expenses.
Contribution is an important KPI since it excludes pass-through
expenses. Together with production in Kton and EBIT it indicates
the quality of Sif’s performance in any reporting period.
(b) EBITDA
(c) EBITDA (ex
IFRS 16)
(d) Adjusted
EBITDA
(e) Adjusted
EBITDA (ex IFRS
16)
Earnings before net finance costs, tax, depreciation and
amortization.
The company discloses EBITDA and Adjusted EBITDA (both
including and excluding the effect of IFRS 16) as supplemental
non-IFRS financial measures, as the company believes these are
meaningful measures to evaluate the performance of the
company’s business activities over time. The company
understands that these measures are used by analysts, rating
agencies and investors in assessing the company’s
performance. The company also believes that the presentation
of EBITDA and Adjusted EBITDA provide useful information to
investors on the development of the company’s business. The
company also uses EBITDA and Adjusted EBITDA as key
financial measures to assess operational performance.
Adjusted EBITDA is adjusted for expenses that relate to the
research into and preparations for the required adjustment and
expansion of our production facilities.
Both measures excluding IFRS 16 are provided to be able to be
compared with non-IFRS reporting Companies, as the IFRS 16
impact on EBITDA is significant for Sif. (Adjusted) EBITDA is
adjusted for expenses of lease contracts other than 'short-term
leases’ and ‘low-value leases’ and the impact of the difference in
accounting treatment of lease incentives between IFRS 16 and
the former lease standard IAS 17.
2022Sif Annual Report
167
(f) EBIT
(f) Adjusted EBIT
Operating result plus other income. Adjusted EBIT is adjusted for
expenses that relate to the research into and preparations for
the required adjustment and expansion of our production
facilities.
EBIT is an important KPI since it mitigates the effect
depreciation and amortization has on EBITA. Together with
production in Kton and contribution it indicates the quality of
Sif’s performance in any reporting period.
(g) Net debt
(h) Net debt (ex
IFRS 16)
Loans and borrowings minus cash and cash equivalents.
Net debt is presented to express the financial strength of the
Company. The Company understands that analysts, rating
agencies and investors use this measure in assessing the
company’s performance.
Net debt (ex IFRS 16) is presented to be compared with non-
IFRS reporting Companies, as the IFRS 16 impact on loans and
borrowings is significant for Sif.
(i) Net working
capital
Inventories plus contract assets plus trade receivables plus
current prepayments minus trade payables and contract
liabilities)
The company discloses net working capital as a supplemental
non-IFRS financial measure, as the company believes it is a
meaningful measure to evaluate the company’s ability to
maintain a solid balance between growth, profitability and
liquidity. Net working capital is broadly analysed and reviewed
by analysts and investors in assessing the company’s
performance. This measure serves as a metric for how
efficiently a company is operating and how financially stable it is
in the short term. It is an important measure of a company’s
ability to pay off short-term expenses or debts.
(j) ROACE
(k) ROACE
(adjusted)
Return on average capital employed, EBIT as a % of average
equity plus loans and borrowings excluding lease-commitments
minus cash. In the adjusted measure all values are adjusted for
the effects that relate to the research into and preparations for
the required adjustment and expansion of our production
facilities.
The company discloses the measure as supplemental non-IFRS
financial measures, as the Company believes these are
meaningful measures to evaluate the performance of the
Company’s business activities over time. The measure is
therefore also included in the performance targets of
management.
(l) Solvency
(m) Solvency (ex
IFRS 16)
Total Equity/Total assets
This measure (ex IFRS 16) is a bank covenant, and is presented
to express the financial strength of the Company.
(n) Total debt /
EBITDA (ex IFRS
16)
Total debt (loans and borrowings excluding lease liabilities)
devided by EBITDA (ex IFRS 16)
This measure is a bank covenant, and is presented to express
the financial strength of the Company.
2022Sif Annual Report
168
Reconciliation of non-IFRS financial measures
AMOUNTS IN EUR '000 2022 2021 Reference to consolidated financial statements
(a) Calculation of contribution
Total revenue 374,543 422,541 Consolidated statement of profit and loss, note 6
Raw materials (191,674) (160,311) Consolidated statement of profit and loss
Subcontracted work and other external charges (36,561) (126,090) Consolidated statement of profit and loss
Logistic and other project related expenses (15,797) (21,910) Consolidated statement of profit and loss
Contribution 130,511 114,230
(b) Reconciliation operating profit to EBITDA
Operating profit 12,110 16,004 Consolidated statement of profit and loss
- Other income 90 1,345 Consolidated statement of profit and loss
- Depreciation and amortization 24,226 21,712 Consolidated statement of profit and loss, note 14,15,31
EBITDA 36,426 39,061
(c) Reconciliation of EBITDA to EBITDA ex IFRS 16
EBITDA 36,426 39,061 (b)
- Expenses of lease contracts other than 'short-term leases' and 'low-value
leases'
(8,544) (5,658)
- Initial direct costs (2,160) -
- Expenses of lease contracts other than 'short-term leases' and 'low value
leases' accounted for as project costs based on progress
(3,646) -
- Net impact of the difference in accounting treatment of lease incentives
between IFRS 16 and the former lease standard IAS 17
45 71
EBITDA (ex IFRS 16) 22,121 33,474
(d) Reconciliation of EBITDA to Adjusted EBITDA
EBITDA 36,426 39,061 (b)
- Expenses that relate to the research into and preparations for the required
adjustment and expansion of our production facilities and business acquisitions
5,366 373
Adjusted EBITDA (€ '000) 41,792 39,434
2022Sif Annual Report
169
AMOUNTS IN EUR '000 2022 2021 Reference to consolidated financial statements
(e) Reconciliation of EBITDA (ex IFRS 16) to Adjusted EBITDA (ex IFRS 16)
EBITDA (ex IFRS 16) 22,121 33,474 (c)
- Expenses that relate to the research into and preparations for the required
adjustment and expansion of our production facilities and business acquisitions
5,366 373
Adjusted EBITDA (ex IFRS 16) 27,487 33,847
(f) Reconciliation of operating profit to EBIT to adjusted EBIT
Operating profit 12,110 16,004 Consolidated statement of profit and loss
- Other income 90 1,345
EBIT 12,200 17,349
- Expenses that relate to the research into and preparations for the required
adjustment and expansion of our production facilities and business acquisitions
5,366 373
Adjusted EBIT 17,566 17,722
(g) Calculation of Net debt
Lease liabilities - non-current 99,006 100,573 Consolidated statement of financial position, note 24, 31
Lease liabilities - current 8,392 5,110 Consolidated statement of financial position, note 24, 31
Cash and cash equivalents (89,832) (73,201) Consolidated statement of financial position, note 21
Net debt 17,566 32,482
(h) Reconciliation of Net debt to Net debt (ex IFRS 16)
Net debt 17,566 32,482 (g)
Lease liabilities - non-current (99,006) (100,573) Consolidated statement of financial position, note 24, 31
Lease liabilities - current (8,392) (5,110) Consolidated statement of financial position, note 24, 31
Net debt (ex IFRS 16) (89,832) (73,201)
(i) Calculation of Net working capital
Inventories 427 612 Consolidated statement of financial position, note 18
Contract assets 18,315 12,944 Consolidated statement of financial position, note 19
Trade receivables 22,463 17,927 Consolidated statement of financial position, note 20
Prepayments 2,102 2,472 Consolidated statement of financial position
Trade payables (92,333) (62,082) Consolidated statement of financial position
Contract liabilities (32,458) (37,713) Consolidated statement of financial position, note 19
Net working capital (81,484) (65,840)
2022Sif Annual Report
170
2022
AMOUNTS IN EUR '000 Average Q1 Q2 Q3 Q4 Reference to consolidated financial statements
(j) Calculation of ROACE - EBIT / Average capital
employed
Total equity 104,152 105,183 102,993 102,668 105,764 Consolidated statement of financial position
Cash and cash equivalents (61,077) (35,731) (57,569) (61,175) (89,832) Consolidated statement of financial position, note 21
Loans and borrowings (excl lease liabilities) - - - - - Consolidated statement of financial position, note 24
Capital employed 43,075 69,452 45,424 41,493 15,932
EBIT 12,200 (f)
ROACE 28.3%
2021
AMOUNTS IN EUR '000 Average Q1 Q2 Q3 Q4 Reference to consolidated financial statements
Total equity 98,633 96,387 98,429 97,441 102,276 Consolidated statement of financial position
Cash and cash equivalents (58,495) (36,670) (61,710) (62,398) (73,201) Consolidated statement of financial position, note 21
Loans and borrowings (excl lease liabilities) - - - - - Consolidated statement of financial position, note 24
Capital employed 40,138 59,717 36,719 35,043 29,075
EBIT 17,349 (f)
ROACE 43.2%
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2022
AMOUNTS IN EUR '000 Average Q1 Q2 Q3 Q4 Reference to consolidated financial statements
(k) Calculation of ROACE (adjusted) - EBIT
(adjusted) / Average capital employed
(adjusted)
Total equity 104,152 105,183 102,993 102,668 105,764 Consolidated statement of financial position
- Expenses that relate to the research into and
preparations for the required adjustment and
expansion of our production facilities and business
acquisitions
2,895 773 1,991 3,449 5,366
Total equity (adjusted) 107,047 105,956 104,984 106,117 111,130
Cash and cash equivalents (61,077) (35,731) (57,569) (61,175) (89,832) Consolidated statement of financial position, note 21
- Cash-out related to expenses that relate to the
research into and preparations for the required
adjustment and expansion of our production
facilities and business acquisitions
(5,659) (215) (3,063) (5,657) (13,699)
Cash and cash equivalents (adjusted) (66,736) (35,946) (60,632) (66,832) (103,531
)
Loans and borrowings (excl lease liabilities) - - - - - Consolidated statement of financial position, note 24
Capital employed (adjusted) 40,311 70,010 44,352 39,285 7,599
EBIT 12,200 (f)
- Expenses that relate to the research into and
preparations for the required adjustment and
expansion of our production facilities and business
acquisitions
5,366
EBIT (adjusted) 17,566
ROACE (adjusted) 43.6%
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2021
AMOUNTS IN EUR '000 Average Q1 Q2 Q3 Q4 Reference to consolidated financial statements
(k) Calculation of ROACE (adjusted) - EBIT
(adjusted) / Average capital employed
(adjusted)
Total equity 98,633 96,387 98,429 97,441 102,276 Consolidated statement of financial position
- Expenses that relate to the research into and
preparations for the required adjustment and
expansion of our production facilities and business
acquisitions
440 337 493 556 373
Total equity (adjusted) 99,073 96,724 98,922 97,997 102,649
Cash and cash equivalents (58,495) (36,670) (61,710) (62,398) (73,201) Consolidated statement of financial position, note 21
- Cash-out related to expenses that relate to the
research into and preparations for the required
adjustment and expansion of our production
facilities and business acquisitions
(2,093) (1,605) (1,933) (1,996) (2,836)
Cash and cash equivalents (adjusted) (60,588) (38,275) (63,643) (64,394) (76,037)
Loans and borrowings (excl lease liabilities) - - - - - Consolidated statement of financial position, note 24
Capital employed (adjusted) 38,485 58,449 35,279 33,603 26,612
EBIT 17,349 (f)
- Expenses that relate to the research into and
preparations for the required adjustment and
expansion of our production facilities and business
acquisitions
373
EBIT (adjusted) 17,722
ROACE (adjusted) 46.0%
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AMOUNTS IN EUR '000 2022 2021 Reference to consolidated financial statements
(l) Calculation of Solvency - total equity / total assets
Total equity 105,764 103,097
Total assets 357,303 321,181
Solvency 29.6% 32.1%
(m) Calculation of Solvency (ex IFRS 16) - total equity (ex IFRS 16) / total
assets (ex IFRS 16)
Total equity 105,764 103,097 Consolidated statement of financial position
- Right-of-use assets 104,466 104,598 Consolidated statement of financial position, note 24, 31
- Lease liabilities - non-current (99,006) (100,573) Consolidated statement of financial position, note 24, 31
- Lease liabilities - current (8,392) (5,110) Consolidated statement of financial position, note 24, 31
- Lease incentives capitalised on the balance sheet 2,200 2,173
- Expenses of lease contracts other than 'short-term leases' and 'low value
leases' accounted for as project costs based on progress
3,646 -
- (Deferred tax) on above items (896) (272)
Total equity (ex IFRS 16) 107,782 103,913
Total assets 357,303 321,181 Consolidated statement of financial position
- Right-of-use assets (104,466) (104,598) Consolidated statement of financial position, note 31
- Initial direct costs operational lease contracts 540 2,095 Note 31
- Expenses of lease contracts other than 'short-term leases' and 'low value
leases' accounted for as project costs based on progress
3,646 -
- Deferred tax asset on Right-of-use assets and lease liabilities (896) (797)
Total assets (ex IFRS 16) 256,127 217,881
Solvency (ex IFRS 16) 42.1% 47.7%
(n) Calculation of Total debt / EBITDA (ex IFRS 16)
Total debt 107,398 105,683 Consolidated statement of financial position, note 24
Lease liabilities - non-current (99,006) (100,573) Consolidated statement of financial position, note 24, 31
Lease liabilities - current (8,392) (5,110) Consolidated statement of financial position, note 24, 31
Total debt ex lease liabilities - -
EBITDA (ex IFRS 16) 22,121 33,474 (d)
Total debt / EBITDA (ex IFRS 16) - -
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Glossary
EPIC Engineering procurement installation and commissioning: A
contract form including the engineering, the procurement,
installation and commissioning of a building or other form of
construction.
Executive Board Board of Executive Directors responsible for the day-to-day
business at Sif. In 2021 comprised of CEO and CFO.
IEA International energy agency.
Kton/ton (kilo)ton: A weight measurement used in the steel industry. One
(kilo)ton equals one million/ thousand kilograms.
LCOE Levelized costs of energy.
LTI Lost Time Injury. Incident resulting in Lost Time including
possibly required medical treatment.
LTIF Lost Time Injury Frequency.
Orderbook The total signed contracts and contracts under exclusive
negotiations.
Production
capacity
The capacity of the plants operated by Sif Group: The theoretical
capacity is 300 kton for the combined Maasvlakte 2 and
Roermond plants. Actual capacity is between 80 and 90% of
theoretical maximum capacity.
RWI Restricted Work Injury. Incident without Lost Time that required
modified work, including possibly required medical treatment
Sif Group The group of companies that establish the Sif Group: Also
referred to as ‘Company’ or ‘Sif.’
Sif Holding N.V. The entity whose shares are listed on the stock exchange.
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Sif Group Companies
Sif has subsidiaries as reflected in the organization chart below (together referred to
as “Sif group”). Sif Netherlands B.V. (the Netherlands) manufactures and trades
pipes, pipe structures, and components for offshore wind farms. Twinpark Sif B.V.
(the Netherlands) and Sif Property B.V. (the Netherlands) are financial holdings.
Twinpark is a joint venture with Pondera Consult and GE Renewable Energy to test
and, in a later stage, exploit a 12 MW wind turbine on Sif’s premises at Maasvlakte
2. Sif Property is the owner of Sif’s real estate property. KCI the Engineers B.V. (the
Netherlands) operates a consulting engineering firm in shipbuilding and industry.
Zonnepanelen Maasvlakte B.V. (the Netherlands) invests in renewable energy, in
particular, but not limited to, investing and operating in solar panels. Sif has a 50%
interest in SBR Engineering GmbH (Germany) and Smulders Sif Steel Foundations
B.V., a joint venture focusing on project management in the offshore- wind industry.
Sif Japan K.K. is liquidated on 26 August 2022.
SIF GROUP LEGAL ORGANIZATION STRUCTURE
2022Sif Annual Report
Sif Holding N.V.
Mijnheerkensweg 33
6040 AM Roermond
The Netherlands
Telephone: +31 475 385777
Email: info@sif-group.com