Sif Holding N.V.

Supporting the energy transition

Financial-Social-Environmental Annual Report 2023 of Sif Holding N.V.

Highlights 2023

People Planet Profit

Safety

8.28 LTIF

Contribution

€149.0 mln

Gross CO2 emission

6,665 mT

Adjusted EBITDA

€42.2 mln

Participation in projects resulting in

2,622 MW

renewable energy capacity

Order book

507 kton

Reference is made to the section Reporting Criteria of the annual report for further details

2023Sif Annual Report

Table of contents

Highlights 2023

3 Message from our CEO

7 About Sif: our spirit

7 > our vision:

7 > our mission:

7 > our core values: teamwork,

ownership, focus on results.

8 > our management

12 Key figures 2019 - 2023

17 How we create value: our

strategy and our business model

17 > external challenges

17 > stakeholder engagement

19 > our material themes

and management approach

22 > our strategy: safe-smart-size

29 How our business performed in 2023

29 > financial

33 > social

35 > environmental

37 > eU taxonomy

47 How we manage our

business and related risk

47 > corporate governance

58 > risk and opportunity management

67 > executive Board statement

69 Supervisory Board report

69 > duties of the Supervisory Board

69 > fulfilment of duties in 2023

71 > composition and functioning

of the Supervisory Board

73 > epilogue

74 Remuneration report

79 Financial Statements

141 Other Information

142 > articles of association

related to profit appropriation

143 > corporate information

145 > independent auditor’s report

156 > limited assurance report of the

independent auditor on Sif Holding

N.V.’s selected ESG key performance

indicators and the section "Our

material themes and management

approach"

159 Reporting Criteria

172 Glossary

2023Sif Annual Report

Message from our CEO

Dear Reader,

Our focus in 2023 was on managing critical milestones relating to our investment in

the expansion of our manufacturing facilities and on increasing our safety-culture

while diligently executing our orderbook. The decision to invest €328 million was

made exactly on time to be granted the necessary permits and to start construction

works in early April. Launching clients to fill capacity from the early days following

the facilities’ completion and signed contracts with strong partners for factory

equipment and construction enabled us to start instantly after agreeing the

necessary funding at attractive conditions. We achieved a healthy balance of

financing by shareholders, customers and lenders, with strong support from the

Dutch government.

Finding a new equilibrium

The timing was right to adjust processes and manufacturing lay-out to the new

standards in the industry that demand more and larger foundations. We have

focussed on our expansion project amid the turmoil of an ongoing war in Ukraine

and hostilities in Israel and Gaza, which have led to intense human tragedy and

affected the availability and costs of money, energy and basic materials. Despite

serious project cancellations due to increased interest rates and pipeline instability

in the USA and despite a failing contracts for differences (CfD) round in the UK, we

continue to see offshore wind as a key driver for the world’s energy transition and

pivotal in meeting the goal of limiting global warming to no more than 1.5 degree

Celsius. We stay on course, keep calm and carry on despite some projects or

regions being hit by temporarily unbalanced energy prices or the incidence of cost

issues and/or disruptions in the supply chain. Among the cancelled projects is

Empire Wind 2, one of the launching projects for our expanded manufacturing

facilities. We provided communications to our stakeholders explaining the related

impact on Sif, how we will pursue mitigation of the effects of the termination and

how contractual termination fees will protect us against the costs of underuse of

our capacity. It is our firm belief that, once the dust has fully settled and the parties

have found a new equilibrium, the industry will show resilience and swiftly return to

the production levels of earlier projections.

2023Sif Annual Report

Our belief that the industry will return to the earlier projected production levels is

underpinned by the EU announcements that EU governments support the pursuit of

offshore wind capacity targets as listed in the EU Wind Power Package (Member

States agree new ambition for expanding offshore renewable energy (europa.eu)).

There is a 15-point action plan to increase efficiency in the supply chain to achieve

the connection of 111 GW offshore wind to the grid by 2030 as targeted by the EU in

January 2023. Our belief is also supported by the announced Contracts-for-

Difference round 6 in the UK whereby strike prices will be increased by 66% to GBP

73/Mwh (price level 2012) for bottom-fixed offshore wind projects assuming the

provisioned subsidies will be sufficient to comfort the expected number of projects.

On a global level the 200 countries that signed the agreement to triple the wind

energy base at COP28 demonstrates the need to accelerate the energy transition

process.

‘Offshore wind is a key driver for

the world’s energy transition and

limitation of global warming to no

more than 1.5 degree Celsius’

Progress on the expansion of our facilities and operational performance

We made good progress on realizing our expansion plans in the year under review.

We commenced construction works in April and reached the highest point in August

2023. Meanwhile, all the buildings are under a roof and most of the equipment has

been received at the building site or is in the final stages of passing the Factory

Acceptance Tests (FAT). Cranes and other equipment have been installed and are

undergoing Site Acceptance Tests (SAT). This is progressing on schedule and within

the budget. The first production of the new integrated factory is scheduled for late

July 2024. This is in accordance with the initial plan.

During the year under review, long-term political ambitions for offshore wind were

raised again and most of the initiated projects continued as planned. We completed,

continued or started projects for, amongst others, Dogger Bank, Noirmoutier and He

Dreiht. These projects were booked at healthy margins that could compensate for

the lower 2023 manufactured volumes caused by inefficiencies relating primarily to

the disrupted labor market. More specifically, the lack of experienced personnel in

combination with the physical barriers of our current manufacturing set-up are the

underlaying factors for this lower than expected manufacturing volume. The balance

enabled us to reach the forecast EBITDA figure of €42.2 million, which was just

above the level of the previous year with production of 192 Kton. Our ESG-related

performance indicators demonstrate that, while we are on the right track, we have

not yet achieved the level of our ambitions. Following a sharp increase in our

incident rates in the first half of 2023, our 2-day safety stand downs in May

2023 resulted in a far better safety performance in the second half of 2023. While

a full year 2023 LTIF of 8.28 is still too high, the trend from Q3 2023 is promising

with a sharp decline in LTI’s but a still too high TRIF. The carbon footprint for scope

1 and 2 decreased on the back of using hydrotreated vegetable oil instead of diesel

for road and shipping transportation, the further implementation of electric pre-

heating technologies and more compensation from the Haliade X turbine on Sif’s

production site compared to 2022. The completion of the new factory will contribute

even further towards reaching the targets in this field as it is based on more

sustainable industrialized production technology and processes.

2023Sif Annual Report

THE EXPANDED FACTORY TAKING SHAPE

Our strategic agenda for 2024

Expanding our production facilities is an important item on our strategic agenda.

The priority for 2024 is to deliver on the expansion and to successfully start up the

new factory. By early 2025 all production lines should be fully operational to match

the theoretical annual production capacity of 200 monopiles, each with a length of

100 meter and a weight of 2,500 tonnes or an equivalent of in total 400 Kton at 80%

utilization. It will be high on my personal agenda to achieve maximized safety,

environmental performance and operational efficiency of the expanded factory. Our

key performance indicators on these items should improve drastically in the new

production environment.

‘Our priority for 2024 is to improve

safety, successfully start up the

factory and ensure all production

lines are fully operational by early

2025’

High on our strategic agenda is also the restart of marshalling and logistics

activities. While we had a few very successful years with this activity, we had to slow

down our operations in this field to create space for the expansion of our production

facilities. We are in promising talks with the Port of Rotterdam to lease additional

space for both a restart of marshalling activities and for potential wind farm

decommissioning works. In our scenarios for future growth, we expect the

decommissioning market to develop within the next several years and as this is an

activity which is fully in line with our ambitions for carbon footprint reduction, we

decided to investigate the viability of a business plan including a return of the scrap

of the decommissioned foundations to our steel partner to re-use it to produce

green steel. This exploratory process is carried out based on a memorandum of

understanding with our partner Ballast Nedam in Sif Decom for decommissioning of

obsolete and aged wind farms and Decom Cockpit, which is a joint venture with

CRC, Jansen Recycling and ECHT for onshore processing of decommissioned

materials.

2023Sif Annual Report

A permanent item on our strategic agenda is innovation. It is at the heart of Sif, and

we once again focussed on multiple innovation initiatives in 2023. The inhouse

availability of the engineering services of KCI the engineers has proven a strong

support for the progress we booked here. These initiatives aim to help achieve Sif’s

ambition to be a total solutions provider for monopile foundations. These innovation

projects include Electric Beam Welding, a guided monopile concept, a revival study

of the Tripod, the development of Skybox and participation in various studies on low-

noise monopile installation techniques.

Leadership and personnel

In line with the schedule of resignation of the Supervisory Board, chairman André

Goedée and member Caroline van den Bosch resigned in May 2023. Two new

members were selected and proposed for appointment to the General Meeting of

Shareholders. Angelique Heckman was appointed for a four-year term in May

2023 and Annabelle Vos was appointed in September 2023 for a period until May

2027. I am grateful to André Goedée and Caroline van den Bosch for the contribution

they made to the development of Sif. Especially the last two years were very

demanding as set out in the Supervisory Board report included in this annual report.

The question that has been at the top of my mind for the past two to three years is:

How do we ensure the availability of sufficient well-trained staff? We need an

additional 190 colleagues to properly run the expanded factory at full capacity. To

achieve this, we have doubled the recruitment capacity that would normally be

required to hire the needed number of employees. In addition, we have set up

dedicated training support for technical jobs such as rolling, welding and steel-fitting.

We have furthermore arranged good housing and commute services to provide

employees with maximum support.

Sif is an important contributor to the energy transition. Our products are pivotal in

realizing offshore wind ambitions and our mission commands setting the right

example in our own organization and way of working. We organize all our processes

in a responsible and sustainable way, assuring value for our customers, employees

and society. To further support and enhance this ambition, we joined the IMVO/IRBC

covenant for the renewable energy sector, a coalition of solar and wind energy

companies, industry associations, the Dutch government, knowledge institutions,

NGOs and trade unions that jointly committed themselves to making international

value chains more sustainable. We have also committed to the principles and

sustainable development goals of the UN Global Compact that should end poverty,

inequality and climate change. Our contribution to five of these goals is explained in

the chapter on our performance in 2023 of this annual report.

‘We apply the international

responsible business conduct

standards of IRBC to limit the

actual or potential negative impact

of our operations on people and

the environment’

We look back on a year in which we celebrated our 75th year anniversary. In 2023,

we also prepared for the decades ahead by building on Sif’s long and successful

history. I am looking forward to putting our new factory into operation in 2024 and

to serving our clients with the best foundations for their wind farms. Most of all,

I focus on providing everyone at Sif with a safe working place and pleasant working

conditions that further stimulate us to generate a decent return for our shareholders

on their investment in Sif Holding.

Roermond, the Netherlands, 18 March 2024

Fred van Beers

2023Sif Annual Report

About Sif: our spirit

Founded in 1948 as a metal working firm, the company focused on pressure vessels

and from the 1970’s on tubular steel pipes for jacket foundations. From 2000, Sif

capitalized on the introduction of offshore wind and became a first mover in

monopiles and transition pieces, the foundation of choice for offshore wind turbines.

Throughout this journey, rolling and welding of thick steel plates were core skills of

the company. Since 2000, Sif has manufactured more than 2,500 monopile

foundations, mainly for European wind farms. Sif has evolved into a leading provider

of monopile solutions and a pivotal contributor to clean offshore energy markets and

the energy transition.

Sif has been listed on the Euronext Amsterdam stock exchange since 2016.

‘Sif is a pivotal contributor to the

energy transition’

Our vision:

To accelerate the growth of offshore wind power generation as a key driver to the

world’s energy transition.

Our mission:

To be the best monopile solutions provider through innovation, engineering and

excellent manufacturing with commitment to the environment and our employees’

wellbeing, all as confirmed by our customers.

Our core values: teamwork, ownership, focus on results.

Our reputation is determined by our focus on quality and reliability. We are always on

time and do not allow for mistakes to go offshore. We deliver a critical and vital

component in the offshore wind supply chain and as a result our services must be

‘first-time right’. The sheer magnitude of our products requires commitment,

teamwork and ownership. Our employees are the key to our success. Together we

make a difference, guided by our three core values.

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.

Ownership Another word for commitment and responsibility. This starts with clarity about who does what and an open

culture in which we foster mutual accountability, focus on solutions and respect everyone’s contribution to the

bigger picture.

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.

2023Sif Annual Report

Our management

Supervisory Board

FROM LEFT TO RIGHT: PETER GERRETSE, PETER VISSER, ANGELIQUE HECKMAN, PETER WIT,

ANNABELLE VOS

Peter Gerretse, chairman (1955, male, Dutch). Relevant expertise and experience in

international business, project management, manufacturing, industrialization, and

automation. First appointed in February 2016, reappointed in May 2020. Has served

on the Supervisory Board of Vanderlande industries since 2017 and was on the

Supervisory Board of Aeronamic Holding from 2010 to 2017. From 1995 to

2013 Peter Gerretse was employed by Vanderlande industries, most recently as

president and CEO. Before joining Vanderlande he held several management

positions at Fokker aircraft. Peter Gerretse holds an engineering degree in Aerospace

engineering from Delft University of Technology. He holds no shares in Sif Holding

N.V.

Peter Wit, vice-chairman (1967, male, Dutch). Relevant expertise and experience in

financial management and accounting, risk and risk-management, legal, tax, IT

operations, compliance and auditing. First appointed in May 2018, reappointed in

May 2022. Peter Wit is CFO at Iqip holding B.V. and was COO of staffing company

Atlas Professionals from 2018 to 2021, CFO and managing director of Inashco from

2014 to 2017, CFO of Dockwise from 2009 to 2013 and employed by Royal Dutch

Shell Group in various positions between 1992 and 2009. Between 2018 and

2022 Peter Wit was on the Supervisory Board of Doedijns Group. Peter Wit holds

a master’s degree in business administration from the University Groningen and

obtained a post-doctorate controlling degree from VU University Amsterdam. He

holds no shares in Sif Holding N.V.

Annabelle Vos (1978, female, Dutch). Relevant expertise and experience in offshore

energy markets, ESG, legal, regulatory, compliance and risk management. Annabelle

Vos has served as General Counsel and Chief Compliance Officer at Fugro N.V since

2016 and since 2019 as a member of the executive leadership team. Before joining

Fugro she was a Corporate M&A and Corporate Litigation lawyer at De Brauw

Blackstone Westbroek from 2006 through 2015. Annabelle Vos has a master’s

degree in arts from John Hopkins University School of Advanced International

Studies and a master’s degree in law from Leiden University. She holds no shares in

Sif Holding N.V.

2023Sif Annual Report

Angelique Heckman (1968, female, Dutch). Relevant expertise and experience in

human resources, governance, organization, safety, corporate culture and coaching.

First appointed in May 2023. Angelique Heckman has served as a member of the

Supervisory Board and the president of remuneration committees for multiple

organizations including De Domijnen and Bernhoven Hospital. She has also worked

as Chief People & Culture Officer and as CHRO for various organizations including

Royal Swinkels Family Brewers, Royal Cosun / Aviko Group, and Etam Groep.

Angelique Heckman has also held various HR roles in Royal DSM ranging from

Project Manager to VP HR. She holds an Executive master’s degree in Consulting

& Coaching for Change from Oxford and HEC Paris, a master’s degree in HR

Management from Lesley School of Management, a certificate program in Human

Resources from Harvard University, and a master’s degree in Civil and Criminal Law

from law school at Utrecht University. Angelique Heckman holds no shares in Sif

Holding N.V.

Peter Visser (1956, male, Dutch). Relevant expertise and experience in offshore

energy, general management, finance, auditing, risk management, M&A. First

appointed in May 2018 and reappointed in May 2022 upon nomination of Sif’s

largest shareholder Grachtenheer 10 BV (related to Egeria Group of whom Peter

Visser is a co-founder and director). From 1992 until 1997 Peter Visser was director

at MeesPierson and responsible for private equity activities of the bank in Europe.

Between 1983 and 1992 he worked for McKinsey & Cy. Peter Visser holds a degree

in economics from Groningen University. Peter Visser, through Grachtenheer/Egeria,

is a shareholder in Sif Holding N.V.

Executive Board

Fred van Beers, CEO (1962, male, Dutch). First appointed to the Executive Board in

September 2018, reappointed in May 2022. Fred van Beers was employed as

a business unit manager at Alcoa from 1989 to 1994 and at LIPS from 1994 to

2002 before joining Wärtsilä. He served Wärtsilä as managing director Netherlands

between 2007 and 2010 and as VP services North Europe between 2010 and 2015.

From 2015 until 2017 Fred van Beers was CEO at Blohm + Voss in Hamburg. He

holds a degree in marine engineering and owns 38,999 shares in Sif Holding N.V. at

the end of 2023 (right on picture).

FROM LEFT TO RIGHT: BEN MEIJER, FRED VAN BEERS

Ben Meijer, CFO (1976, male, Dutch). First appointed to the Executive Board in May

2021. Ben Meijer was a financial consultant at First Dutch Capital between 2000 and

2004 and held various financial positions at Stahl Group between 2005 and 2019.

Before joining Sif, Ben Meijer was concern-controller at HAL Investments subsidiary

Broadview from 2019 until 2021. He holds a master’s degree in Business

Administration from Tilburg University and an executive master’s degree in Finance

and Control from TIAS school for business and society in Tilburg. Ben Meijer owns

11,814 shares in Sif Holding N.V. at the end of 2023 (left on picture).

2023Sif Annual Report

Management Team

FROM LEFT TO RIGHT: FRANK KEVENAAR, JOOST HEEMSKERK, FRED VAN BEERS, MONIQUE VAN DEN

BOOGAARD, BEN MEIJER, ROBERT VERKROOST

In addition to the CEO and CFO, the members of the Management Team are:

Monique van den Boogaard, Director Projects (1962, female, Dutch). Monique van

den Boogaard has held various managerial positions at Oschatz Energy and

Environment in Germany and China in the 2016-2023 timeframe, including director

projects, managing director execution and most recently as managing director.

Before Oschatz, Monique van den Boogaard was employed by NEM Energy between

2013 and 2016 as global director of projects. Monique van den Boogaard studied

management and organization (higher professional education) and attended various

management and leadership training courses.

Joost Heemskerk, CCO (1977, male, Dutch). Appointed in June 2020. He has held

various positions in engineering, project management, commercial and strategy

consulting in the offshore energy business and was employed by 2-B energy, Bain

& Company and most recently by SBM Offshore. Joost Heemskerk holds a master’s

degree in civil/offshore engineering from Delft University of Technology.

Frank Kevenaar, COO (1963, male, Dutch). Appointed in April 2019. He has held

various positions in the automotive and maritime industries, amongst others at

Wärtsilä, Brabant Components and Stork. Frank Kevenaar holds a bachelor degree in

engineering and business administration.

Robert Verkroost, HR director a.i. (1967, male, Dutch). Appointed in July 2023. He

has held various consultancy positions in the field of HR amongst others at BJ

Brabant, Le Grand Bernard and Berendsen. Between 2010 and 2018 Robert

Verkroost was HR director at GGN and between 2018 and 2021 at DPD Nederland.

Since 2021 Robert Verkroost is active in HR interim management and consultancy.

He holds a bachelor degree from Fontys and studied executive change management

at Sioo in Utrecht and organisational change at ST Group.

2023Sif Annual Report

Key Figures 2019-2023

Key figures 2019 – 2023

X € 1,000 2023 2022 2021 2020 2019 Reference *

Revenue 454,299 374,543 422,541 335,433 325,600

Contribution 148,989 130,511 114,230 101,592 101,517 (a)

Contribution/ton 669 674 637 609 542 (a)

EBITDA 36,806 36,426 39,061 31,756 26,371 (b)

Adjusted EBITDA 42,168 41,792 39,760 31,756 26,371 (b)

Adjusted EBITDA (ex IFRS 16) 34,726 27,487 34,173 naf naf (b)

EBIT 13,909 12,200 17,349 11,408 9,164 (c)

Adjusted EBIT 19,271 17,566 18,048 11,408 9,164 (c)

Profit attributable to the shareholders 10,863 7,217 11,590 7,271 5,488

Net cash from operating activities 106,483 50,360 91,230 34,336 30,853

Net cash from investing activities (169,858) (20,283) (11,493) (4,927) (14,485)

Net increase/(decrease) in cash and cash equivalents 41,557 16,631 70,556 1,066 1,074

Depreciation and amortization (22,897) (24,226) (21,712) (20,348) (17,207)

Net debt 427 17,566 32,482 52,119 80,291 (d)

Net debt (ex IFRS 16) (111,463) (89,832) (73,201) (2,645) 21,293 (d)

Net working capital (133,405) (81,484) (65,840) (2,859) 4,300 (e)

* Reference is made to section 'Definition and Explanation of use of non-IFRS financial measures' and 'Reconciliation of non-IFRS financial measures' in the Other Information section for the definition and

explanation of use, reconciliation and restatements (if applicable)

2023Sif Annual Report

Key figures 2019 – 2023

2023 2022 2021 2020 2019 Reference *

IN KTON

Production 192 169 171 164 185

PER SHARE X €

Earnings 0.32 0.28 0.45 0.29 0.22

Dividend 0.00 0.00 0.19 0.12 0.00

Number of shares issued 29,889 25,501 25,501 25,501 25,501

RATIOS %

ROACE 22.3 28.3 43.2 18.9 8.3 (f)

ROACE (adjusted) 110.7 43.6 46.0 18.9 8.3 (g)

COVENANT RATIOS **

Solvency 43.8 41.0 47.7 50.0 47.2 (h)

Leverage *** 0.00 0.00 0.00 0.00 1.04 (i)

NON-FINANCIAL KPI'S

LTIF per mln exposure hours 8.28 6.50 4.98 2.48 2.75

Sickness leave % 6.86 7.89 5.10 5.50 6.59

Gross CO2 footprint in tons 6,665 10,422 7,378 3,538 4,392

Net CO2 footprint in tons 6,665 10,422 7,378 3,538 4,392

Participation in projects that will result in

renewable energy capacity (in MW)

2,622 1,954 1,873 1,298 naf

Usage of gasses in (pre-)heating of welds -

natural gas in m3 per kg welding material

0.67 0.83 naf naf naf

Usage of gasses in (pre-)heating of welds -

propane gas in kg per kg welding material

0.45 0.57 naf naf naf

naf = not accounted for

explanation of use, reconciliation and restatements (if applicable)

** The definition of the covenant ratio's have changed in 2023 as compared to prior periods. Reference is made to section 'Definition and Explanation of use of non-IFRS financial measures' for more information.

*** In prior period annual report presented as "Total debt/EBITDA (ex IFRS16)"

2023Sif Annual Report

LTIF

(PER MLN EXPOSURE HOURS)

2023 2022 2021 2020 2019 2018

8.3

6.5

5.0

2.5

2.8

1.1

Participation in projects that will result in installed

renewable energy capacity (in MW).

2,750

2,500

2,250

2,000

1,750

1,500

1,250

1,000

750

500

250

2023 2022 2021 2020

2,622

1,954

1,873

1,298

TRIF

(PER MLN EXPOSURE HOURS)

2023 2022 2021 2020 2019 2018

18.2

18.6

19.9

9.9

19.1

15.6

USAGE OF GASSES IN (PRE-)HEATING OF WELDS

per KG welding material

1.00

0.80

0.60

0.40

0.20

0.00

natural gas m³

propane gas kg

2023 2022

0.67

0.45

0.83

0.57

CO2 FOOTPRINT

in tons (restated, reference is made to page 47 for more information)

15,000

12,000

9,000

6,000

3,000

gross net

2023 2022 2021 2020 2019 2018

6,665

10,422

7,378

3,538

4,392

5,866

SICKNESS LEAVE

(IN %)

2023 2022 2021 2020 2019 2018

6.9

7.9

5.1

5.5

6.6

7.2

2023Sif Annual Report

PRODUCTION

(IN KTON)

250

200

150

100

2023 2022 2021 2020 2019 2018

192

169

171

164

185

138

CONTRIBUTION

(IN € 1,000)

168,000

140,000

112,000

84,000

56,000

28,000

2023 2022 2021 2020 2019 2018

148,989

130,511

114,230

101,592

101,517

74,336

EMPLOYEES

(IN FTE at YE)

750

600

450

300

150

Permanent Flexible

2023 2022 2021 2020 2019 2018

651

587

548

569

658

429

EBITDA ADJUSTED

(IN € 1,000)

62,500

50,000

37,500

25,000

12,500

2023 2022 2021 2020 2019 2018

42,168

41,792

39,434

31,756

26,371

12,550

CONTRIBUTION PER TON

750

600

450

300

150

contribution/ton production Kton

2023 2022 2021 2020 2019 2018

€ 669

€ 674

€ 637

€ 609

€ 549

€ 539

200

175

150

125

100

EBITDA

(IN € 1,000)

42,000

35,000

28,000

21,000

14,000

7,000

2023 2022 2021 2020 2019 2018

36,806

36,426

39,061

31,756

26,371

12,550

2023Sif Annual Report

EBIT

(IN € 1,000)

24,000

18,000

12,000

6,000

2023 2022 2021 2020 2019 2018

13,909

12,200

17,349

11,408

9,164

-1,132

NET WORKING CAPITAL

(IN € 1,000)

20,000

-20,000

-40,000

-60,000

-80,000

-100,000

-120,000

-140,000

2023 2022 2021 2020 2019 2018

-133,405 -81,484 -65,840 -2,859

4,300

14,200

NET EARNINGS

(IN € 1,000)

32,000

24,000

16,000

8,000

2023 2022 2021 2020 2019 2018

10,863

7,217

11,590

7,271

5,488

-2,051

NET DEBT EX IFRS16

(IN € 1,000)

45,000

30,000

15,000

-15,000

-30,000

-45,000

-60,000

-75,000

-90,000

-105,000

-120,000

2023 2022 2021 2020 2019 2018

-111,463 -89,832 -73,201 -2,645

21,293

30,377

EARNINGS PER SHARE

(IN €)

0.60

0.45

0.30

0.15

0.00

2023 2022 2021 2020 2019 2018

0.32

0.28

0.45

0.29

0.22

-0.08

ADJUSTED RETURN ON AVERAGE CAPITAL EMPLOYED

(IN %)

120

100

2023 2022 2021 2020 2019 2018

110.7

43.6

46.0

18.9

8.3

-0.9

2023Sif Annual Report

How we create value: our strategy and our business model

External challenges

Global issues

Climate change and wealth differences are thought to be the main drivers of global

unrest. There are wars in Ukraine, Syria and Israel, conflicts in Sudan, Congo and

Myanmar and natural disasters with flooding, earthquakes and fires. All result in

human tragedy, food and housing shortages and people seeking refuge. Stopping

global warming through transition from fossil fuels to more renewable energy is one

of the major challenges of our time. Sif is dedicated to contributing towards meeting

this challenge.

In 2015 (COP21 12 December 2015, Paris), global leaders agreed on a global

response to the threat of climate change aimed at: ‘Keeping a global temperature

rise this century well below 2 degrees Celsius above pre-industrial levels and to

pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius’.

The Paris agreement requests each signatory to outline and communicate climate

actions and to update these Nationally Determined Contributions (NDCs) every five

years from 2020. Europe, for its member states, submitted a version 3 update on

19 October 2023. Amongst other things, this update commits to a ‘domestic

reduction of net greenhouse gas emissions by at least 55% compared to 1990 by

2030’. In 2023 (COP28 12 December 2023, Dubai), global leaders for the first time

collectively agreed that transitioning away from fossil fuels by 2050 is needed to

limit the global warming. As an alternative to fossil, offshore wind cannot be ignored

and the acceleration, which is already envisaged by so many countries, needs to

become a reality.

Regional issues

Supply chain issues, higher interest rates and failure to obtain tax credits have

caused hick-ups in the world of offshore wind and have resulted in project

cancellations and postponements in the USA. One of these projects concerns Sif’s

Empire Wind 2 project. These hick-ups are expected to be less prolonged in non-US

jurisdictions where governments have legally binding energy transition targets,

where supply-chain issues are less material and where costs of offshore wind are

lower. Governments in these jurisdictions have shown commitment through support

measures for the industry. These include the increase of energy strike prices in

contracts for differences for bottom fixed offshore wind in the UK, the promotion of

and investment in grid availability and the release of the Wind Power Action Plan by

the EU.

Local challenges

Sif’s activities are based in the Netherlands that, as a country, faces the global

challenges that relate to climate change as well as challenges that have a more

local character. Pressure on the labour market and meeting strict regulations on the

preservation of nature are challenges that required a lot of our attention in 2023 and

that we expect will require our extensive attention in the years to come.

Labor market challenges originate from the structural unbalance we have witnessed

over the past years in interest for technical studies. There is a large demand in the

Netherlands for technically educated and trained labor on all levels.

As a member of the European Union, the Netherlands has committed to regulations

on the preservation of nature. The country is densely populated and has highly

industrialized and intensive agricultural regions. This demands strict regulations with

respect to the burden we as a country impose on nature and has resulted in very

strict permitting procedures.

Stakeholder engagement

As a critical partner in the energy transition and as a manufacturer of offshore wind

foundations, we interact with a broad spectrum of stakeholders including wind farm

owners, wind farm developers, employees, shareholders and other capital providers,

as well as suppliers and subcontractors. We exchange a great deal of knowledge

with the industry, the public sector, educational institutions and civil society groups.

2023Sif Annual Report

Client contacts

Depending on the size and timing of projects, we work at any time on 5 to

10 Prequalification Questionnaires (PQQs), approximately 15 Requests for Proposal

(RFPs), Requests for Quotation (RFQs) or Invitations to Tenders (ITTs) and 3 to

4 Contract negotiations. Annually we execute 3 to 6 contracts. The period from RFP/

ITT to final delivery of the project is on average between 3 and 4 years. During this

period, we are in regular contact with various representatives of our clients. As part

of this process, we jointly evaluate the project once it is finished. We use an

electronical questionnaire on a no-name-basis for this purpose.

(Potential) shareholders, sell-side analysts and lenders

Sif is in contact with its (potential) shareholders and lenders at various moments

during the year. We regularly meet with them during both lender presentations,

investor conferences and roadshows and General Meetings of Shareholders. In

addition, we have regular meetings with sell-side analysts who follow the company.

Analyst meetings and General Meetings of Shareholders can be followed through

live or on-demand webcast. Webcasts of special events such as the Capital Markets

Day that we organized in March 2023 in relation to the FID on the expansion plans

are also available.

Suppliers and subcontractors

Sif cooperates with a limited number of suppliers, subcontractors or other supply

chain partners (such as installation companies). We view them as co-makers,

partners in innovation, contributors to our always-right approach and to our

circularity ambitions and as crucial partners in business integrity. Contacts are

frequent through project-related discussions, audits and more strategic meetings.

Employees, Works Council

The Sif management has meetings with the Works Council several times a year. Sif

organizes town-hall meetings with all employees to discuss material topics such as

safety, labor conditions, organization, strategy, performance and remuneration.

Supervisory Board member Angelique Heckman was appointed following the

enforced recommendation by the Works Council. The Supervisory Board member

representing the Works Council attends a meeting of the Works Council with the

Executive Board twice per year.

(Online) media

Sif values an open relationship with media. We often talk to media on a one-to-one

basis and use online and social media (mainly LinkedIn, Instagram and Facebook)

to convey our messages.

Trade associations, industry representations

Given that offshore wind is a young industry, societal and political presence is

critical to developing and maturing the sector. We are a partner in Offshore Wind

Foundation Alliance and Wind Europe to represent our interests with the EU in

Brussels and the Dutch government in The Hague. We have joined the IMVO

covenant (Renewable Energy Sector Agreement) and the UN Global Compact to

show our commitment to our business principles. We actively participate and

support the Dutch branch organizations IRO (Organization for Dutch suppliers to

Offshore Energy Industry) and NWEA (Dutch Wind Energy Association) to promote

and develop the Dutch energy/offshore wind cluster together with the Dutch

Government.

2023Sif Annual Report

Our material themes and management approach

Sif conducted a double materiality assessment in 2023 as part of the annual

strategy process aiming the creation of sustainable long term value. We applied our

own reporting criteria, that are inspired by ESRS, to all defined KPI’s. We were

assisted by Deloitte and started the assessment by making a value chain analysis

and listing our most important stakeholders. The selection of stakeholders reflects

their strategic importance in Sif’s long-term value creation model. Applying peer

group and regulatory analysis - in which we analyzed the European Sustainability

Reporting Standards (ESRS) in relation to Sif’s business model - we identified

34 ESG topics that were compiled into a long list. From this long list, 12 material

ESG aspects through which the organization may have an impact on the economy,

the environment and people were shortlisted. These material ESG aspects were then

discussed with the listed stakeholders using personal interviews to prioritize and

score significance on a scale from one to five in accordance with the stipulations

outlined in ESRS 2 (chapters 4.2 and 5). To determine impact materiality, Sif used

thresholds based on scoring on a scale from one to five whereby materiality of

a topic was assessed high if the highest consolidated score for the short, medium or

long term exceeded 3.0 and as low if it scored less than 3.0. Sif assumes less than

one year for short term, two to five years for medium term and more than five years

for long term.

The financial materiality was assessed through a workshop with internal

stakeholders only, including members of the Executive Board, and based on risk

management thresholds. During the financial materiality assessment, stakeholders

assessed the financial materiality per topic based on “likelihood” and “impact” in the

short, medium and long-term. The highest score resulting from the rating on the

short, medium and long term is considered in the double materiality assessment

with a view to ensuring Sif can measure and steer on all material topics in a timely

manner.

We analysed the financial and reputational impact of these aspects on the company,

using short, medium and long-term EBITDA impact to determine materiality. Aspects

are material from a financial perspective if the aspect triggers financial effects on

the organization, i.e., generates risks or opportunities that are likely to influence the

future cash flows in the short, medium or long term.

Of the shortlist of 12, ultimately 8 aspects were classified material from both an

impact and a financial perspective with climate change and resource use and

circularity rated very high, five topics rated high and the non-GHG air pollution rated

medium from an impact perspective only since this was determined to have very

low impact on Sif from a financial materiality perspective. Main reason for this is

that Sif has established effective procedures to ensure nitrogen emissions remain

within the permitted levels. Aspects such as diversity, human rights in the supply

chain, water management and affected communities near operations remain on the

agenda of Sif’s management but are not classified material in the assessment that

was performed in 2023. The result of this analysis is shown in the materiality matrix

on page 20. For climate change, resource and circularity and talent development,

risk and opportunity were separately assessed on their materiality.

Important conclusions we gained from the discussions with stakeholders were that

Sif’s stakeholders consistently recognize Sif’s sustained position in the renewable

energy sector and the crucial role of health and safety procedures in Sif’s

operations. Stakeholders suggest and expect a potentially higher impact from Sif in

the areas of resource use and circularity and biodiversity and ecosystems in the

medium and long term. This is largely due to a growing social interest in re-use and

recycling and to the exponential growth in knowledge, technical advancements and

emerging business opportunities. Internal stakeholders indicated an increase in the

likelihood of a positive financial impact on Sif from talent development efforts and

a decrease in the likelihood of a negative financial impact related to health and

safety and talent development risks due to ongoing enhancements in employee

compensation, training initiatives and work environment. Sif’s stakeholders,

particularly its management, consider employee conditions as highly relevant from

both an impact and a financial materiality perspective. The relatively high employee

turnaround negatively impacts Sif’s results and requires management attention and

efforts to retain staff. This encompasses employees' development through targeted

trainings. It also includes working conditions, employees’ perception of equality and

inclusion, wages, working hours, housing and social security benefits. The

successful implementation of these factors is fundamental for Sif’s ability to

maintain its reputation as an employer of choice.

2023Sif Annual Report

Impact materiality

(impact Sif on people and environment)

Not material Material

Financial materiality

(impact on the business)

Not material Material

78 9

1. Climate change risk (with sub-topics climate change adaption, climate change

mitigation and energy)

2. Climate change opportunity as a leading supplier of the globally preferred

monopile foundation for the growth-market of offshore wind energy

3. Resource use and circularity risk (with sub-topics resource inflows

including resource use, resource outflows related to products and services and

waste)

4. Resource use and circularity opportunity with marshalling and logistic services to

the forthcoming decommissioning market

5. Biodiversity and ecosystems (with sub-topics direct impact drivers of

biodiversity loss, impact on the state of species, impacts on the extent and

condition of ecosystems, impacts on the dependencies on ecosystem services)

6. Non-GHG air pollution (material from impact perspective only) (sub-topic air-

pollution)

7. Health and safety (sub-sub-topic health and safety)

8. Talent development risk (sub-sub-topic training and skills development)

9. Talent development opportunity

10. Employee conditions (sub-topic working conditions and sub-sub-topic adequate

housing and

sub-topic equal treatment and opportunities for all)

11. Business ethics and compliance (sub-topic corruption and bribery, corporate

culture, protection of whistleblowers, political engagement and management of

relationships with suppliers including payment practices)

The CSRD requires Sif to report policies, targets, actions and collect data for each

material ESG topic on the basis of ESRS (European Sustainability Reporting

Standards), determining Sif’s scope of reporting which is mandatory for the full year

2024 annual report.

Within this context, a gap analysis was conducted on the 2022 reporting and it was

assessed in discussions with internal stakeholders to what extent already available

information could be applied to progress compliance with CSRD. Based on the

outcomes of this gap assessment, Sif must further mature in the field of ESG

reporting to be fully compliant with the CSRD. Management appreciates the

importance and benefits for the company. Like most of our peers, Sif requires

additional time and resources to fully implement the new standards effectively. The

process of qualifying the gaps as ‘policies’, ‘actions’, ‘metrics’ and ‘targets’ is in

progress and expected to be completed in the first half of 2024. Based on

materiality, CSRD reporting timelines and Sif’s current maturity per material topic, an

overview will be made of prioritized actions that we will report in compliance with

CSRD. Finally, a KPI list, including definitions, scope and data-points, will be defined

in time for CSRD compliant reporting on 2024. In the meantime, we will continue

reporting on the KPIs that we have reported in earlier years and some of which were

subject to limited assurance. These KPIs relate to the aspects of climate change,

health & safety and employee conditions. At present the following list of goals for

2024 and 2026 that relate to ESG topics applies.

2023Sif Annual Report

Environmetal, Social and Governance goals ESRS goals 2024 goals 2026

Climate Change E1, E2 Full definition and actionplan per scope in place

(including greenhouse gas reduction)

Scope 1-3 reduction according to plan 2024

Climate Change E1, E2 Shore power business plan approved Shorepower for seagoing vessels

Climate Change E1, E2 Complete longlist for hybrid/0 emission inland waterway

partners

First hybrid/0 emission inland waterway transport

Climate Change E1, E2 80% electrical pre-heating Roermond, 100% Rotterdam Zero use of natural or propane gasses for pre-heating

Climate Change E1 60% of 19.1 mln KwH required electric power from

renewable sources

75% of 65 mln KwH required electric power from renewable

sources

Climate Change E1 All new carlease hybrid or electric CO2 ladder concept implemented

Climate Change E1 ISO 50001 certified

Climate Change E2 Impact analyses and mitigation plan on air, water and soil

polution

Circularity and resource use E5 Project manager appointed for Decommissioning

(Decom)

Business plan decommissioning approved incl scrap return

agreement

Circularity and resource use E5 Green steel agreement with Dillinger Hütte First projects booked with green steel

Circularity and resource use E5 LCA/EDP plan for key partners in place Green steel agreement with flange supplier

Biodiversity E4 Participation in joint industrial research & pilot project

Employee conditions S1 Exit meetings, employee management system and talent

development plan in place

Employee satisfaction score >75%

Employee conditions S1 Supervisory Board 33% gender diversity Management Team 33% gender diversity

Employee conditions S1 65% on Sif payroll

Talent development S1 Employee training program in place All employees trained according to Sif academy training

program

Health & safety S1 LTIF < 1.5 LTIF< 0.75

Health & safety S1 Sick leave < 6.5% Sick leave < 5.5%

Health & safety S1 Safety ladder concept implemented Safety ladder phase 3 achieved

Business ethics & compliance G1 Revised & implemented Code of conduct and policies Update & complete policies

2023Sif Annual Report

Our strategy: safe-smart-size

The global energy transition market

In the IEA’s Stated Policies Scenario (STEPS), global demand for fossil fuels is

expected to reach its peak before 2030 (International Energy Agency, world energy

outlook 2023). Although still growing in absolute terms, the share of coal, oil and

natural gas in the global energy supply has been stable at around 80% for decades.

It however is beginning to edge downwards and is expected to reach 73% by 2030.

The share of renewables rising from 14% of total energy use in 2022, can be

considered a turning point but a more aggressive drop in fossil fuel consumption will

be required to reach global climate goals. Good stewardship calls for a relentless

focus on energy transition as the key to a successful mitigation of global warming. It

is furthermore beyond doubt that offshore wind will be part of the alternatives for

fossil fuels, together with other renewables such as solar, onshore wind, bioenergy

and geothermal.

To reach the EU goal for reduction of greenhouse gas emissions by 40% in 2030,

targets for reduction are set on member-state level. The use of renewable energy is

the main driver of this reduction that needs to more than triple in the years until

2030. Annual additions to the installed global offshore wind capacity are expected to

increase five times by 2030 on the 65 GW in 2022. This expectation is highly

ambitious but last year’s number of Final Investment Decisions on a global level was

at a record high.

Sif has and maintains a focus on monopile foundations for offshore wind and aims

to capture its share of the required increase in offshore wind capacity. Sif’s focus is

on the European market for offshore wind as it is a mature market with year-on-year

growth and as it is a market highly suitable for the application of monopile

foundations. Given the stable characteristics of seabed, water depth and wave

impact, approximately 80% of offshore wind foundations in Europe is expected to be

monopiles (the diagram below shows an overview of foundation alternatives for

offshore wind).

‘Our contribution to the energy

transition is based on enabling

growth of offshore wind capacity

and volume (size), on more

efficient and highly automated

manufacturing (smart) and on

increasing safety for our

employees and business partners

(safe)’

2023Sif Annual Report

Our place in the offshore wind supply chain

An offshore wind farm is initiated by government ambitions to develop offshore wind

energy. In some countries, these ambitions are supported by the presence of an

electricity grid connection. The realization of a wind farm can be divided into

a development phase (minimum 3 to 4 years for site-surveying, design, financing

and contracting of the wind farm), a construction and installation phase (3 to

5 years for contracting, manufacturing and installation of the wind farm parts) and

a grid connection phase (1 to 2 years for cable laying and connection of the wind

farm). It is decided during the design phase which foundations and turbines to use.

Sif is part of the 3-to-5-year construction phase that comprises foundations, towers,

nacelles, blades, cables and related transport & installation. Depending on the

location, substations and grid connection as well as permit procedures can be part

of the process. In this supply chain, Sif is responsible for the manufacturing of the

monopile foundations only. For a typical 70 to 90 turbine wind farm the production

time for monopiles is between 5 and 7 months.

The monopile and the monopile supply chain

Each monopile is unique since it is designed for its specific location in a wind farm.

The design considers the soil conditions, wave and wind impact of the specific

location, water depth and characteristics of the selected turbine, bridging the unique

conditions of the seabed and water to the more standard size tower and turbines.

This makes the monopile the only customized piece of equipment in a wind farm.

2023Sif Annual Report

A monopile is a large tubular structure made of large and heavy steel plates,

typically with conical sections to reduce from the often bigger bottom diameter to

the smaller top section. Unique monopiles are traditionally combined with project

specific but for the project standardized transition pieces for which Sif manufactures

the primary steel. The transition piece contains secondary steel components such

as boat landings, ladders and switchboards that are sensitive to the impact of

offshore installation of the foundation. The completed transition piece is installed on

the monopile once the monopile is installed in the seabed. Since approximately

5 years, alternative, so called transition-piece-less solutions are applied whereby the

individual elements like boat landings etc are installed onto the monopile, once the

monopile is installed offshore.

The monopile foundation (including transition piece) is made of rolled and welded

steel to which a corrosive protection is applied. Steel plates for Sif are mostly

supplied by Dillinger Hütte (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. Our flanges are mostly supplied by Euskal (Spain). Flanges

and steel from decommissioned foundations can be recycled as scrap feed-in for

green steel production. Our partner Smulders in Hoboken (Belgium) takes care of

the outfitting and coating of our transition pieces. Most of the outfitted materials

can also be recycled as feed-in for new steel production. Corrosive protection of

monopiles is applied in our coating shops at Maasvlakte 2, Rotterdam, by our

partner Van Ginkel Groep according to client specifications.

At the end of their lifetime, monopiles become obsolete and a valuable component

for scrap – and thus a vital feed-in material for new steel production. Application-

orientated recycling assures infinite reuse. Sif and Dillinger have teamed up and

signed an agreement to develop a process to recycle steel after decommissioning of

wind farms. Sif has teamed up with Ballast Nedam and signed a memorandum of

understanding to investigate and develop a turn-key solution for the

decommissioning of entire wind farms.

The transportation of cans, cones, sections and transition pieces from Roermond to

Maasvlakte Rotterdam or to Hoboken is carried out by Rederij de Jong using barges

that are long term and spot market rented or partly Sif-owned. The carbon footprint

of Rederij de Jong is included in Sif’s scope 1 emissions. The plan is to become

carbon neutral on all inland river transports by 2030 at the latest. Sif is investigating

both hydrogen and hybrid solutions for the inland water transports of both steel

plates and (semi) finished products.

Picture: the diameter of a monopile refers to the diameter at the bottom. Towards

the top of the monopile, the diameter reduces to 7.5-8.5 meters using cones to

match the diameters of the tower or transition piece

2023Sif Annual Report

The size of the monopile has increased over time as shown in the overview above.

While a monopile with 4 meters diameter could support a 2 or 3 MW turbine in early

2000, monopiles with up to 11 meters diameter are required for 15 MW turbines and

bigger. From 2025 until 2030, the vast majority of monopiles in Europe is expected

to be in the 9 to 11 meters diameter range. For applications along the east coast of

the USA, diameter sizes are typically larger due to more difficult soil conditions,

greater water depths and more robust requirements to withstand the hurricane

season and ocean swell. Monopiles with diameters above 11.5 meters are therefore

expected to 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 and took a final

investment decision on 13 February 2023 to invest 328 million euro in the extension

of its existing manufacturing facilities. The plan comprises expansion of the

manufacturing facilities at Maasvlakte 2 Rotterdam for which the works began in

April 2023. The expanded manufacturing facilities are scheduled to be ready for

testing by the end of July 2024 and fully operational by early January 2025. The

investment will increase Sif’s theoretical annual manufacturing capacity to 500 kton

(reference base of 200, 2,500 tons, 11-meter diameter monopiles per year) or

400kton based on 80% factory load (24/5 with limited weekend shifts). The

expansion is financed through a mix of €100 million Advanced Factory Payments

from launching customers Ecowende and Empire Offshore Wind, €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 cumulative

preference shares to Equinor amounting to €50 million and issuance of common

shares in an underwritten rights issue to raise another €50 million. Following the

termination of the Empire Wind 2 contract late December 2023, the €30.5 million

Advanced Factory Payment that relates to that project is converted into a perpetual

bond arrangement. Following the irrevocable grant of the nature permit, the bridge

loan from Invest-NL terminated and was transferred to the banking consortium.

Based on the launching orders and market visibility, Sif expects 2025 EBITDA to

reach €135 million and at least at €160 million for 2026 and beyond, yielding an earn

back period of a maximum of 4 years.

The expansion plan will enable Sif to double its contribution per annum to the grid-

connected renewable energy capacity from 2026 on base-year 2023. Sif will also

endeavour for smarter manufacturing and higher quality predictability processes. In

whatever we do, Sif will pursue safety, both in the manufacturing and marshalling

process as when installing and maintaining the monopiles at sea.

2023Sif Annual Report

Merits of the P11 Investment and Financing Plan

Investment Returns Financing (millions)

Capex mln

€328

Earn back max

4 yrs

AFP and perpetual

€100

Start Building

1 April 2023

Improved safety Term Loan Facility

€81

Fully operational

January 2025

new jobs

200

CumPref shares

€50

Launching clients

Empire Wind & Eco-

wende

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

2023Sif Annual Report

Over the past 20 years the growth in offshore wind production has resulted in

a decreasing trend in the costs of energy and in a reduction of our carbon footprint.

Offshore wind is inevitably part of the future energy-mix equation. Since early 2000,

Sif has manufactured more than 2,500 monopiles. Sif aims to contribute to a further

increase in the production of robust and affordable energy through offshore wind as

a driver for the world’s energy transition. We run in total 73 hectares of fully

permitted manufacturing plants in Roermond and Maasvlakte 2 Rotterdam in the

Netherlands, equipped with specialized production equipment. All permits required

for the expansion and the operation of the expanded facilities are in place after the

nature permit for the expanded Rotterdam factory was irrevocably granted in

January 2024.

Our clients are mostly European energy-majors and in 2023 included amongst

others Equinor, SSE, ENI, Aker, Crosswind (Shell/Eneco), EnbW, EMYN and Abel. At

the end of 2023, we employed 651 persons of whom 389 on a permanent basis and

262 on a flexible contract. The average number of payroll employees amounted to

386 in 2023 (365 in 2022). Our employees are mainly European citizens. Revenues

of the company in 2023 were € 454 million.

To accelerate the growth of

offshore wind power generation as

a key driver to the world’s energy

transition.

Sif’s strategy and goals are geared towards the following short-term and longer-term

activities to expand and secure our niche position of the leading supplier of total

monopile solutions:

1. We will optimize our manufacturing assets. It is expected that Europe will

remain a growth market for at least the period until 2050. Europe (the EU and

UK) aims for more than 160 GW of offshore wind capacity by 2030 compared to

the approximately 35 GW that was installed at the end of 2023. To achieve this,

we need more and larger turbines and more and larger foundations to carry

these units. Given this demand and the supply-demand (im)balance, Sif decided

in 2023 to more than double its manufacturing capacity in kilotonnes in the

Netherlands to be able to match the requirements to size of tomorrow’s

turbines. The ability to manufacture 200 monopiles per annum with a diameter

of 11 meters and 120 meters length, increases capacity to a theoretical

500 kilotonnes. The manufacturing process will be more industrialized and

process-optimized. This will reduce the risk of incidents and rework and will

significantly improve the output per manhour. The targeted earn-back period for

the investment is a maximum of four years. Through this investment we will:

a. Increase our contribution to projects that potentially add 4 to 6 GW

renewable energy per annum.

b. Contribute to a reduction of our Lost Time Injury Frequency to below 1.5 in

the short term and to below 0.75 in 2026 as well as a reduction of our sick

leave to below 6.5% in the short term and to below 5.5% in 2026 .

c. Contribute to a reduction of carbon footprint by replacing gas pre-heating by

electrical pre-heating, by replacing fossil fuel propulsion of all transportation

equipment by biodiesel or electrical propulsion and by upgrading the facilities

in Roermond. We will decrease our carbon footprint to net zero by 2045 the

latest for scopes 1, 2 and 3.

d. Quadruple our EBITDA 2023 to at least €160 million by 2026.

2. We will further develop value-added design engineering. Early engagement with

engineering know-how will:

a. Result in solutions of enhanced quality for clients with less manufacturing

and installation expenses.

b. Lead to responsible and sustainable installation methodologies to promote

biodiversity and protect sea life through less noise nuisance.

3. We will continue optimization of the monopile foundation concept. This will:

2023Sif Annual Report

a. Limit offshore installation activities resulting in safer projects by limiting the

amount of weather-sensitive offshore installation activities. We will continue

to invest in monopile-based foundation alternatives such as Tripod and

Guided Monopiles and further develop Skybox during the period until 2026 to

achieve full 1:1 certification.

4. We will revive logistic & marshalling activities. The expansion activities in

Rotterdam have slowed down marshalling activities. With offshore equipment

increasing in size, demand for onshore pre-assembly increases. Future

decommissioning activities will also require onshore marshalling space with

unrestricted access from the sea. We will:

a. Acquire space for marshalling activities and revive the business in the

midterm.

b. Increase marshalling activities to contribute double digit EBITDA to the group.

5. We study the feasibility of support to circular solutions for offshore wind

farms. Early-day wind farms are reaching the end of their technical or

economical lifetime. Demand for decommissioning (and replacement) is

expected to grow. We will:

a. Develop a business plan for the supply chain for decommissioning, transport

and recycling in the period until 2026.

6. We will focus on specific financial criteria that contribute to the long-term

financial health of the company:

a. We will observe healthy pay-back and return criteria when making

investments.

b. We will observe a healthy, at least neutral, working capital requirement when

tendering for projects.

c. We will pay an attractive dividend of between 25 and 40% of net earnings in

any year, observing the constraints of our lending covenants.

7. We will make our internal processes more sustainable to be aligned with the

products we manufacture and the markets we serve. We contribute to the

Sustainable Development Goals 7, 8, 9, 12 and 13 of the United Nations. Our

actions for the midterm include:

a. Implementing shore power and green transport.

b. Deepen our partnership with Dillinger Hütte on capturing green steel (up to

70% CO2 reduction) that will leave their new manufacturing plant from

2028 onwards.

c. Concluding similar agreements for steel flanges and production materials.

d. 75% of the total power demand of Sif coming from renewable sources by

2026.

e. Aiming for at least 33% of our Management Team and Supervisory Board to

have a diverse background.

f. Pursuing that 33% of middle management and support staff has a diverse

background.

g. The Sif academy for shopfloor talent development at both locations is

educating or refreshing knowledge for 150 colleagues annually.

h. Compliance to our code of conduct is 100% and monitored and protected on

an annual basis.

2023Sif Annual Report

How our business performed in 2023

Financial

Our financial performance

Our reporting is based on IFRS. To assess and monitor Sif’s underlying financial

performance, the Company’s management team uses certain non-IFRS financial

measures, 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 also uses certain accounting indicators corrected for

IFRS16 effects. This mainly relates to the land lease at Maasvlakte 2.

ACTIVITY LEVELS AND PROFITABILITY

AMOUNTS IN EUR '000 2023 2022

Wind Marshalling Other Total Wind Marshalling Other Total

- Revenue from contracts with customers 428,580 3,275 16,217 448,072 352,863 3,422 7,606 363,891

- Operational lease income - 4,733 1,494 6,227 - 9,084 1,568 10,652

Total revenue 428,580 8,008 17,711 454,299 352,863 12,506 9,174 374,543

- Raw materials (251,120) (1) (1,251) (252,372) (191,494) (46) (134) (191,674)

- Subcontracted work and other external charges (30,145) 0 (558) (30,703) (36,104) (30) (427) (36,561)

- Logistic and other project related expenses (19,697) (1,515) (1,023) (22,235) (14,097) (1,368) (332) (15,797)

Segment contribution 127,618 6,492 14,879 148,989 111,168 11,062 8,281 130,511

- Direct personnel expenses (39,263) (1) (7,702) (46,966) (32,329) (13) (5,268) (37,610)

- Production and general manufacturing expenses (19,523) 0 (560) (20,083) (17,307) 0 (174) (17,481)

Gross profit 68,832 6,491 6,617 81,940 61,532 11,049 2,839 75,420

Indirect personnel expenses (26,073) (21,204)

Depreciation and amortization (22,897) (24,226)

Facilities, housing and maintenance (5,456) (4,947)

Selling expenses (892) (628)

General expenses (12,718) (12,305)

Finance costs and impairment losses (268) (2,013)

Other income 5 90

Share of profit / (loss) of joint ventures 13 1

Total profit before tax 13,654 10,188

2023Sif Annual Report

Revenue, expenses and earnings

Revenues and expenses are invoiced and paid in euros. Currency effects do not

affect Sif’s financial results. The price of steel is a charge-on item. As a result,

fluctuations in steel prices immediately affect revenues and expenses but not

earnings. The level of revenues is also subject to the structure of joint ventures. This

means that if Sif subcontracts part of its scope, the revenues of the subcontractor

are accounted for in Sif’s revenues. If Sif operates within a partnership, the revenues

of the joint venture partner are not accounted for by Sif unless accounting rules

dictate otherwise.

Because of the above, the 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 including VAT. However, in view of the predominantly cross-

border business-to-business nature of the operations, this is not applicable in most

cases.

In 2023, the contribution at €149.0 million was more than 14% higher than in the

previous year (2022: €130.5 million). The unconditional part of the Empire Wind

2 termination fee is accounted for in this contribution. Of total contribution,

€6.5 million was generated by marshaling activities (€11.1 million in 2022) and

€7.0 million was generated by engineering activities (€5.5 million in 2022).

Contribution per ton throughput, adjusted for Marshalling, Engineering and fees for

projects with no production volume, levelled at €669/ton (2022: €674/ton).

The trend reflects the improving pricing environment that was offset by the

increased logistics and other project related expenses. The increase in revenues

from €375 million to €454 million reflects higher production volumes and higher

steel prices. Raw materials (mainly steel) with €252 million were substantially higher

in 2023 compared to €192 million in 2022.

After direct personnel expenses, overhead and production & general manufacturing

expenses, this resulted in gross profit of €82.0 million (18.0% of total revenues)

compared to €75.4 million (20.1% of total revenues) in 2022. Production and general

manufacturing expenses include maintenance of machinery, energy consumption

and support materials. The 24.9% higher direct personnel expenses relate to the

higher-than-forecast amount of flexible workforce we engaged to complete the

projects, the training efforts required to bring the additional flexible workers up to

speed, labor inflation (caused by amongst others incentive premiums that also

applied to the flexible workforce) and inefficiencies due to a tight labor market, high

sick leave rates and unexperienced production personnel. Production and general

manufacturing expenses increased by €2.6 million, mainly due to higher expenses

for the maintenance of our facilities. EBITDA in 2023 arrived at €36.8 million

compared to €36.4 million in 2022. Also in 2023, Sif incurred non-recurring expenses

related directly to the adjustment and expansion project for production facilities and

business acquisitions amounting to €5.4 million (€5.4 million in 2022). If the

reported EBITDA of €36.8 million is adjusted for these results, it amounts to

€42.2 million (€41.8 million in 2022).

2023Sif Annual Report

RESULTS FROM OPERATIONS

X € 1,000 2023 2022

Revenues 454,299 374,543

Raw materials (252,372) (191,674)

Subcontracted (30,703) (36,561)

Logistics and other project related (22,235) (15,797)

Contribution 148,989 130,511

Direct personnel (46,966) (37,610)

Production, general manufacturing (20,083) (17,481)

Gross profit 81,940 75,420

Indirect personnel (26,073) (21,204)

Facilities, housing (5,456) (4,947)

SG&A (13,610) (12,933)

Other income 5 90

EBITDA 36,806 36,426

Depreciation & amortization (22,897) (24,226)

Operating result (EBIT) 13,909 12,200

Net financing expenses (268) (2,013)

Share in profit of joint ventures 13 1

Income tax (2,434) (2,670)

Profit after tax 11,220 7,518

Non-controlling interests 357 301

Profit after tax attributable to the Equity Holders of

Sif Holding N.V.

10,863 7,217

Depreciation and amortization

In 2023, Sif invested €180.4 million in tangible and intangible fixed assets

(€23.4 million in 2022). This relates to €168.7 million of investments in the

expansion of production facilities at Maasvlakte 2, Rotterdam and to €3.6 million of

investments in induction equipment to replace the gas torches for the pre-heating of

welds to lower our carbon footprint. 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 accounting standard (IAS 17) is

approximately €111.9 million on net debt in 2023. The depreciation of the right-of-

use assets recognized as a result of IFRS 16 amounts to €10.8 million in 2023.

Tax

Sif has two manufacturing facilities, which are both located in the Netherlands. From

a quantity and value perspective, the most important raw materials are steel plates,

almost 100% of which are purchased in Germany, flanges that are nearly all

purchased in Spain, secondary steel items that are purchased in Belgium and

coating services that are purchased in the Netherlands. The value of shaping the

steel plates into cylinders, cones and ultimately complete monopile foundations 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 €15.3 million were realized in the

Netherlands, €277.3 million in the United Kingdom, €8.2 million in Norway,

€47.1 million in France, €89.3 million in Germany, €4.8 million in Belgium,

€8.6 million in the USA, €1.9 million in other EU countries and €1.9 million in the rest

of the world.

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 through which they are

seconded. Sif profits are subject to corporate income tax. In 2023, this amounted to

€2.4 million (€2.7 million in 2022). 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 € nil in 2023, due to the taxable loss in the year.

Sif’s effective tax burden in 2023 was 17.8% compared to 26.2% in 2022. The

difference originates from the revaluation of the deferred tax liabilities, due to lower

expected tax rates in the years of reversal of the temporary differences due to the

tax rate discounts.

2023Sif Annual Report

Financial expenses

Sif applies financial resources that its equity owners provide, that lenders provide

and that business partners provide. Sif aims for optimal financing at the lowest cost

of capital with a specific acceptable risk. These financial sources are balanced

through the dividend policy and banking arrangements, assuming minimal net

working capital requirements.

Sif had debt and guarantee facilities in 2023 with Invest-NL capital N.V, and with

a banking consortium comprising ABN AMRO Bank N.V., Euler-Hermes, ING Bank

N.V., Coöperatieve Rabobank U.A., Tokio Marine Europe SA, AKA Ausfuhrkredit-

Gesellschaft mbH, DNB Bank ASA and DNB (UK) Ltd, with 5 June 2029 as the expiry

date. Interest on the revolving credit facility is based on Euribor plus a surcharge

that depends on quarterly covenant levels. Margins on the term loan do not depend

on covenant levels. 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. These sustainability targets were not met

in 2023. Therefore, no discount was applied.

The facilities comprise:

Facility

Term loan facility €81 million

Revolving credit facility €50 million

Committed guarantee facility €350 million

Leverage covenant* Ranging from max 4.00 in 2024 to max 2.5

from 31 December 2025 onwards

Solvency* Ranging from min 25% in 2024 to min 35%

from 31 December 2025 onwards

*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 2022), with the covenant at 3.5. Solvency was 43.8% as at

31 December 2023 (41.0% as at 31 December 2022), with the covenant at 30%.

Covenant discipline over time

4.00

3.50

3.00

2.50

2.00

1.50

1.00

0.50

0.00

Leverage covenant Actual leverage

Q1 2020 Q3 2020 Q1 2021 Q3 2021 Q1 2022 Q3 2022 Q1 2023 Q3 2023 Q1 2024 Q3 2024 Q1 2025 Q3 2025

Net working capital, liquidity, cash and cash flows

Net working capital amounted to -/-€133.4 million at the end of 2023 compared to

-/-€81.5 million at the end of 2022. Cash from operations depends on invoicing

milestones agreed with customers, subcontractors and suppliers and did not affect

revenue or earnings recognition. Cash from operations includes the cash receipt

related to the Advance Factory Payments (€100 million), the conversion of part of

that amount (€30.5 million) to a perpetual bond is a non-cash transaction. The

balance of cash and cash equivalents at the end of 2023 amounted to €131.4 million

compared to €89.8 million at the end of 2022. Even though Sif did not use financial

instruments in 2023, Sif may use financial instruments to reduce risks related to

interest rate volatility if required. Sif applies a non-speculative approach in this

respect.

2023Sif Annual Report

CASH FLOW SUMMARY

X € 1,000 2023 2022 2021 2020

Net cash from operating activities 106,483 50,360 91,230 34,336

Net cash from investing activities (169,858) (20,283) (11,493) (4,927)

Net cash from financing activities 104,932 (13,446) (9,181) (28,343)

Cash and cash equivalents at year end 131,389 89,832 73,201 2,645

Net debt, Solvency

Net debt at the end of 2023 was -/-€111.5 million (-/-€89.8 million end of 2022) on

an ex-IFRS 16 basis and €0.4 million (€17.6 million end of 2022) under

IFRS16 reporting. The lease of land at Maasvlakte 2 Rotterdam largely determines

the difference. Lease-commitments are amortized on the balance sheet. At the end

of 2023, consolidated tangible net worth amounted to €214.3 million on an ex-IFRS

16 consolidated balance sheet total (adjusted for intangible assets, upward

revaluation of assets and advance factory payments converted into perpetual bond

instruments) of €489.3 million (solvency of 43.8%). The solvency at the end of

2022 was based on a slightly different definition, total equity (ex IFRS 16) of

€101.9 million on a assets total (ex IFRS 16) of €248.8 million (solvency of 41.0%).

Financial outlook

The drive for larger MW capacity per turbine and increase of the number of turbines

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 507 kton extends well into 2026 with an estimated production

output of 165 kton in 2024, approximately 250 kton in 2025 and the remainder in

2026. Market conditions remain favorable, tender activity is high, and demand is

expected to increase further, based on the ambitions of governments around the

globe.

Adjusted EBITDA for 2024 is expected to arrive at approximately €35 million. Once

the expanded facilities start producing, projected EBITDA is expected to increase to

€135 million for 2025 and to at least €160 million for 2026 and the years beyond.

Depreciation and amortization of €22.9 million in 2023 will increase to an annual

depreciation close to €50 million from 2025.

Social

Healthy and safe working conditions are 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. We target zero incidents.

In 2023 we registered a total of 22 recordable injuries (“TRI”) of which 10 incidents

resulted in lost time and 12 resulted in restricted work or required medical

treatment. Lost time injury frequency (“LTIF”), our key performance indicator for

safety, rose to 8.28 per million hours worked in 2023 (6.50 in 2022). In addition 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 required follow-up

actions at the workplace. TRIF decreased to 18.21 per million hours worked in

2023 (18.56 in 2022). We recorded a total of 65 incidents (42 in 2022) of which

18 at our Maasvlakte plant and 47 in Roermond (Total Injury Frequency, “TIF”). Of

these incidents, 10 resulted in lost time, 2 in restricted work, 10 in required medical

treatment and 43 in required first aid. Most injuries involved arms, hands or fingers

and heads or eyes.

2023Sif Annual Report

SAFETY STATISTICS

2023 2022 2021 2020

fatalities 0 0 0 0

LTI 10 7 5 3

TRI 22 20 20 15

LTIF (per mln hours worked) 8.28 6.5 6.50 2.48

TRIF (per mln hours worked) 18.21 18.56 19.94 9.93

Sickness leave % 6.86 7.89 5.10 5.50

The root cause for most incidents in 2023 related to deviating from working

procedures or instructions, followed by inadequate workplace layout and by

situations in which two or more operations or activities occur at the same time and

place in a manufacturing facility. Corrective measures were defined by the

departments involved, also in order to prevent reoccurrence in the future. Incidents

are reported in EHS software (‘Capptions’), with actions assigned to specific

employees and monitored on follow-up. In 2023, 266 unsafe situations were

reported in Capptions compared to 139 in 2022, illustrating an increased willingness

to record safety incidents or hazards. These unsafe situations were reported in

addition to 4,178 safety observations (compared to 3,186 in 2022).

Our safety statistics in 2023 were reason for concern, both internally and for external

parties. Management introduced seven lifesaving rules, placed safety at the top of

every meeting agenda, intensified on-the-job indoctrination and organized two two-

day safety standdowns to increase safety awareness. In most of the incidents, we

noticed a relation with frequent changes in staff or language differences causing

misunderstandings. Training and language proficiency requirements should

contribute to better safety awareness. After the safety standdowns, the number of

incidents reduced drastically.

SAFETY STANDDOWN MAY 2023

The company emergency services (‘bedrijfshulpverlening’) were trained and tested

in 2023. As part of the training, five simulation trainings with fire brigade and several

evacuation drills were organized.

In 2023, sickness absence decreased to 6.9% for the full year (7.9% full year 2022).

This is still higher than historic numbers at Sif and higher than the Q3 2023 CBS

number of 5.5% for the Dutch industrial sector. It calls for a closer look and action

for improvement. Almost 50% of sick leave relates to leave for a longer period

(between 43 days and one year), which was higher than in previous years. Sick leave

relating to short, middle and extra-long leave was in line with the statistics in

previous years. The reporting frequency for sickness at Sif lies above 1.5, while the

sector average lies between 1 and 1.5. This could imply the reporting threshold is

too low.

‘Wind is our primary non-fossil

energy solution and we aim to use

green steel as the material for

plates and flanges.’

2023Sif Annual Report

Environmental

We engineer and manufacture mission-critical components for clean energy

production at SIf. If we multiply the number of monopiles and/or transition pieces

produced by the turbine capacities that are installed or to be installed, Sif has thus

far contributed to a capacity of almost 12,000 MW of clean, sustainable wind

energy. In 2023, Sif completed 141 monopiles and primary steel for 182 transition

pieces to serve as foundations for potentially 2,622 MW (1,954 MW in 2022)

installed offshore wind capacity. These foundations were manufactured for projects

including Dogger Bank, Noirmoutier and He Dreiht. Compared to 2022, activity in

marshalling and logistics was lower, which relates to a lack of available land since

that is needed for building activities for the expansion plans. Besides the

contribution to the energy transition, Sif has also examined its own carbon footprint

and environmental impact. A delineation of the targets of the Company in respect of

sustainability aspects is shown in the table on page 21.

In 2023, three environmental incidents at Maasvlakte were reported to the

authorities (“DCMR”). All incidents related to leakage and spills of liquids and were

cleaned and settled according to instructions.

The most important effects of the activities of the company and its value chain

relate to the nitrogen deposition and carbon footprint of the production of the steel,

the transportation of the steel from Saarland to Roermond, the transportation of

fabricated products from Roermond to Rotterdam and Hoboken and to the

manufacturing of the foundations in both Roermond and Rotterdam. Ambitions to

reduce both the carbon footprint and nitrogen deposition are shown in the table on

page 21 first production of green steel from 2028, carbon neutral production of steel

from 2045 by supplier Dillinger Hütte and first carbon neutral inland transportation

of steel plates and (semi-finished) products from 2026.

While end-of-lifetime solutions for the foundations are not yet currently relevant, they

will be in 5 to 10 years’ time when replacement of offshore wind farms is due. The

supply chain has ambitions for full circular production and re-use of steel.

The installation of monopile foundations may have a (temporary) disturbing effect

on the seabed, sea life and biodiversity, caused by factors including the noise of the

piling works at sea. While this does not form part of Sif’s scope, Sif does participate

in initiatives to investigate installation methods with a lower noise or disturbing

effect.

Sif’s limitation of carbon footprint, nitrogen deposition and use of

irreplaceable natural resources

The consumption of energy is largely determined by welding volumes- that depend

on the wall thicknesses of products, product diameters and product lengths

- weather impact and production flaws. We aim to reduce the consumption of non-

renewable natural resources (fossil fuels) per kton production for both

manufacturing and logistics. We primarily look for replacement of fossil resources

with sustainably generated electricity, biofuels or hydrogen. We also pursue further

reduction, repurposing and re-use of the amount of waste per kton production. The

products Sif consumes the most during the manufacturing process are shown

below.

SIF ENVIRONMENTAL FOOTPRINT

USAGE PER KTON STEEL 2023 2022 2021 2020 2019

Steel (Kton) 192 169 171 164 185

Mega joules (fossil fuels) 309,907 411,015 403,362 341,210 373,458

Natural Gas (cubic meters) 2,852 3,459 2,826 2,239 2,861

Propane (kilogrammes) 3,630 4,835 5,098 4,402 4,576

Electricity (megawatthour)) 99.7 114.6 101.3 103.4 104.8

Water (cubic meters) 54.9 43.7 59.3 40.8 42.2

Oxygen (cubic meters) 7.5 10.6 10.5 8.7 9.7

Welding powder (ton) 10.6 10.7 9.4 10.0 10.1

Welding wire (ton) 9.4 10.2 8.6 8.8 9.0

Scrap metal (ton) 34.4 22.5 22.9 33.0 31.5

Table: showing the consumption per kton manufactured

2023Sif Annual Report

We use water mainly for preservation activities such as cleaning before blasting and

coating and for the cleaning of finished products before they are delivered to the

customer. Consumption per kton finished product increased by 24.9% in 2023 from

43.7m3/kton in 2022 to 54.6 m3/kton in 2023. Total use of water in 2023 was

10,543 m3 and this relates primarily to obligations under the contracts with clients

to clean finished products before FAT inspection and load-out.

In 2023, Sif had 4.8% residual waste per kton steel manufactured compared to 3.6%

in 2022. Of all waste materials, 97.9% was recycled in 2023 compared to 97.7% in

2022. The main cause for the higher percentage of waste lies in the site cleaning

operation that resulted in disposal of stored scrap metal. All scrap steel and welding

slag are 100% recycled.

WASTE AND RESIDUALS IN TONS 2023 2022 2021 2020 2019

Steel 6,602 3,805 3,910 5,413 5,822

welding slag 2,144 1,917 1,627 1,677 1,903

industrial waste 312 229 313 254 377

wood 310 107 141 208 379

paper 44 25 21 18 17

oil 4 1 4 5 5

chemical waste 14 5 12 8 6

In 2023, Sif used 59,536 gigajoule energy in its production process (69,461 gigajoule

in 2022). The strong decrease relates to replacement of gas pre-heating by

induction and reduced use of propane in coating halls. The use of propane in coating

halls largely depends on the coating specifications and on environmental conditions.

The use of propane increased when determined on the number of kilotonnes of steel

manufactured as shown in the table above. A more representative ratio would be the

use of natural gas and propane per kilogram welding material. The target for natural

gas for 2023 was 0.65 cubic meter per kilogram welding material. Actual use was

0.83 in 2022 and 0.67 in 2023. The 2023 target for propane was 0.10 kilogram per

kilogram welding material. Actual use was 0.57 in 2022 and 0.45 in 2023. The

2023 targets were not met because not all induction equipment was delivered and

installed on time.

2023Sif Annual Report

CARBON FOOTPRINT

2023 2022 2021 2020 2019

Production Kton 192 169 171 164 185

CO2 emission

Scope 1 - Direct emissions 3,267 3,479 3,551 3,020 4,064

Scope 2 - indirect GHG

emissions associated with the

purchase of electricity, steam,

heat, or cooling

10,258 10,231 9,628 9,429 10,776

- Compensation by

Guarantees of Origin

(7,070) (3,496) (5,919) (9,047) (10,776)

Total Scope 2 3,188 6,735 3,709 382 -

Scope 3 - other indirect

emissions

210 208 118 136 328

Sum gross CO2 emission 6,665 10,422 7,378 3,538 4,392

Net CO2 emission 6,665 10,422 7,378 3,538 4,392

Gross kg per Kton 34.7 61.7 43.1 21.6 23.7

In 2022, Sif decided to compensate only the reported CO2 emissions in relation to

scope 2 with guaranties of origin of wind energy to bring the 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,

guaranties 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.

CO2 emission decreased in 2023 compared to the previous year mainly thanks to

compensation with guarantees of origin for the Maasvlakte 2 turbine. This results in

a reduction of 3,574 mT CO2 on the 2022 footprint. CO2 emission also decreased

from using Diesel Hydrotreated Vegetable Oil (HVO) 100 instead of Diesel B7 which

results in a reduction of 515 mT CO2 for 2023. And finally, CO2 emission decreased

by using induction pre-heating instead of gas pre-heating. Total carbon emission for

scope 1 was 3,267 mT (compared to 3,497 mT in 2022), for scope 2 this was

3,188 mT (compared to 6,735 mT in 2022) and for scope 3 this included 210 mT as

a result of business travel, compared to 208 mT in 2022. Other scope 3 emissions

are currently not reported. CO2 emission for 2023 was higher than anticipated due

to the 4.5-month maintenance-related standstill of the turbine on Sif’s premises.

Because of this, guarantees of origin could not be used for an estimated 3,200 mT

CO2 compensation of electricity consumption. Sif pursues reporting on the full

scope 3 emissions and is talking to its main suppliers about the provision of the

necessary information, also on the present status of the plans to reduce to the net

zero target by 2045 the latest.

Environmental management systems are in line with ISO 14001. The facilities in

Roermond comply with EU Directive 2010/75/EU (on industrial emissions).

We aim for 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 specifically as shown in the figure on page 46 We explain

how we contributed to these five SDGs of the United Nations by serving our markets

and applying our resources within the constraints and principles of our Code of

Conduct.

EU taxonomy

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.

2023Sif Annual Report

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.

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 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. 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 six objectives.

Sif has completed an assessment of its activities that are eligible for, and aligned

with, the EU taxonomy. For assessing the extent of alignment we reviewed the

criteria in article 3 of the Regulation (EU) 2022/852 and the associated technical

screening criteria included in the Delegated Acts. The criteria used for the EU

Taxonomy information are the Regulation (EU) 2020/852 as supplemented with

Commission Delegated Regulation (EU) 2021/2139, Commission Delegated

Regulation (EU) 2021/2178, Commission Delegated Regulation (EU) 2023/2485 and

Commission Delegated Regulation (EU) 2023/2486. Details of the assessment and

definitions of the specific KPIs 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 six objectives. The

eligible economic activities of Sif are:

> CCM 3.1 Manufacture of renewable energy technologies (production of

monopiles, transition pieces and pin piles for the offshore wind market, NACE

code C25.11)

> CCM 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 are analyzed to verify the

compliance with the substantial contribution criteria for climate change mitigation or

climate change adaptation.

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.

2023Sif Annual Report

Assessment of not causing significant harm to the other environmental objectives (Do No Significant

Harm- 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 Do No Significant Harm (DNSH) criteria results in

an ’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 KPIs - 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 the section ‘EU taxonomy assessment details.’

Conclusion of the assessment

In 2023, in total 95% of revenue was generated by business activities which are EU

Taxonomy eligible (CCM 3.1 Manufacture of renewable energy technologies and

CCM 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 yet aligned with the

EU Taxonomy. 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). Sif uses various types of coating and substances for

weld testing which can vary project by project, and Sif is in the process of identifying

the relevant substances for future use.

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 yet report

compliance with minimum safeguards in relation to the EU Taxonomy alignment

assessment.

2023Sif Annual Report

EU taxonomy assessment details

This appendix contains an elaboration on the EU taxonomy eligibility and alignment

assessment, following 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 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 the six environmental objectives.

> It meets the substantial contribution criteria in the EU taxonomy regulation for

this specific eenvironmental 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 the six environmental objectives.

> 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 the six environmental objectives and,

therefore, no criteria have been developed. The rationale of the European

Commission’s policy is that such activities may not have a significant impact on the

six environmental objectives 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.

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, amortization and any re-measurements. The capex

covers 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.

2023Sif Annual Report

Financial metric calculation process

Eligible activities assessment

Sif had six activities in the financial year 2023:

1. 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 CCM 3.1 “Manufacture of renewable energy technologies”.

2. The production of piles and legs for the offshore oil and gas market. While this

activity is entirely mapped to NACE code C25.11 “Manufacture of metal

structures and parts of structures”, it is not EU taxonomy eligible because it

relates to the oil and gas market.

3. 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, the activities in this area are not EU taxonomy eligible.

4. 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 CCM 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.

5. Renting out the wind turbine generator untill 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, the activities in this area are not EU

taxonomy eligible.

6. Transferring the Sif trademark and intellectual property. Sif signed

a “cooperation, support and license agreement” with GS Entec Corp whereby Sif

grants GS Entec the right to use the Sif trademark and assists GS Entec in the

conversion of its production facility to produce monopiles, by transferring Sif

intellectual property. This activity is mapped to NACE code M71.12 and EU

Taxonomy eligible as activity CCM 9.1 “Close to market research, development

and innovation”.

Sif therefore has two EU Taxonomy eligible activities:

> CCM 3.1 Manufacture of renewable energy technologies (Production of

monopiles, transition pieces and pinpiles for the offshore wind market)

> CCM 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 to those economic activities is assessed.

Revenue eligibility

The allocation of the portion of revenue to the economic activities performed is

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 and the

last activities identified above. The fifth activity is accounted for in a separate legal

entity.

Capital expenditure - eligibility

The eligibility scan for capital expenditures in 2023 (Capex additions) is performed

in line with the eligibility scan for revenue. It was determined for each of the

additions whether a specific allocation to an economic activity as described above

was possible. 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.

2023Sif Annual Report

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.

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 for all projects in these activities. Sif’s alignment

assessment includes the analysis of all substantial contribution criteria and Do No

Significant Harm criteria for the relevant objectives.

For the assessment and disclosures in 2023, Sif has allocated all capex and opex to

the economic activities based on the eligibility percentages of the revenue KPI.

Sif has issued environmentally sustainable loans with the purpose of financing

specific identified Taxonomy-aligned activities.

Disclosure tables

In 2023, 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 significant harm

to other environmental objectives (DNSH) and the minimum safeguards, is included

in the following tables:

2023Sif Annual Report

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 2023

Proportion

revenue

2023

Climate

change

mitiga-

tion

Climate

change

adapta-

tion

Water

and

marine

resourc

Circu-

lar eco-

nomy

Pollu-

tion

Biod-

iversity

and

ecosys-

tems

Climate

change

mitiga-

tion

Climate

change

adapta-

tion

Water

and

marine

resourc

Circu-

lar eco-

nomy

Pollu-

tion

Bio-

diversit

y and

ecosys-

tems

Min-

imum

safe-

guards

Taxonomy

aligned

proportion

of Revenue

Enablin

g activ-

ity

Trans-

itional

activity

€ '000 % Y;N;N/

Y;N;N/

Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T

A. Taxonomy eligible activities

A.1 Environmental sustainable

activities (Taxonomy-aligned)

- 0% 0%

Revenue of environmentally

sustainable activities (Taxonomy-

aligned)

- 0% 0%

Of which enabling - 0%

Of which transitional - 0%

A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)

CCM 3.1 Manufacture of

renewable energy

technologies

C25.11 428,580 94% N/EL N N N N N Y Y Y N Y N 0%

CCM 9.1 Close to market

research, development and

innovation

M71.12 5,715 1% N/EL N N N N N Y Y Y Y Y N 0%

Revenue of Taxonomy-eligible but

not environmentally sustainable

activities (not Taxonomy-aligned

activities)

434,295 95% 95% 0% 0% 0% 0% 0% 0%

Total revenue of Taxonomy eligible

activities (A.1+A.2)

434,295 95% 95% 0% 0% 0% 0% 0% 0%

B. Taxonomy-non-eligible activities

Revenue of Taxonomy non-

eligible activities

20,004 5%

Total (A+B) 454,299 100%

2023Sif Annual Report

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 2023

Proportion

Capex 2023

Climate

change

mitiga-

tion

Climate

change

adapta-

tion

Water

and

marine

resourc

Circu-

lar eco-

nomy

Pollu-

tion

Biod-

iversity

and

ecosys-

tems

Climate

change

mitiga-

tion

Climate

change

adapta-

tion

Water

and

marine

resourc

Circu-

lar eco-

nomy

Pollu-

tion

Bio-

diversit

y and

ecosys-

tems

Min-

imum

safe-

guards

Taxonomy

aligned

proportion

of Revenue

Enablin

g activ-

ity

Trans-

itional

activity

€ '000 % Y;N;N/

Y;N;N/

Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T

A. Taxonomy eligible activities

A.1 Environmental sustainable

activities (Taxonomy-aligned)

- 0% 0%

Capex of environmentally

sustainable activities (Taxonomy-

aligned)

- 0% 0%

Of which enabling - 0%

Of which transitional - 0%

A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)

CCM 3.1 Manufacture of

renewable energy

technologies

C25.11 188,923 100% N/EL N N N N N Y Y Y N Y N 0%

CCM 9.1 Close to market

research, development and

innovation

M71.12 154 0% N/EL N N N N N Y Y Y Y Y N 0%

Capex of Taxonomy-eligible but not

environmentally sustainable

activities (not Taxonomy-aligned

activities)

189,077 100% 100% 0% 0% 0% 0% 0% 0%

Total Capex of Taxonomy eligible

activities (A.1+A.2)

189,077 100% 100% 0% 0% 0% 0% 0% 0%

B. Taxonomy-non-eligible activities

Capex of Taxonomy non-eligible

activities

32 0%

Total (A+B) 189,109 100%

2023Sif Annual Report

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 2023

Proportion

Opex 2023

Climate

change

mitiga-

tion

Climate

change

adapta-

tion

Water

and

marine

resourc

Circu-

lar eco-

nomy

Pollu-

tion

Biod-

iversity

and

ecosys-

tems

Climate

change

mitiga-

tion

Climate

change

adapta-

tion

Water

and

marine

resourc

Circu-

lar eco-

nomy

Pollu-

tion

Bio-

diversit

y and

ecosys-

tems

Min-

imum

safe-

guards

Taxonomy

aligned

proportion

of Revenue

Enablin

g activ-

ity

Trans-

itional

activity

€ '000 % Y;N;N/

Y;N;N/

Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T

A. Taxonomy eligible activities

A.1 Environmental sustainable

activities (Taxonomy-aligned)

- 0% 0%

Opex of environmentally sustainable

activities (Taxonomy-aligned)

- 0% 0%

Of which enabling - 0%

Of which transitional - 0%

A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)

CCM 3.1 Manufacture of

renewable energy

technologies

C25.11 14,174 96% N/EL N N N N N Y Y Y N Y N 0%

CCM 9.1 Close to market

research, development and

innovation

M71.12 72 1% N/EL N N N N N Y Y Y Y Y N 0%

Opex of Taxonomy-eligible but not

environmentally sustainable

activities (not Taxonomy-aligned

activities)

14,245 97% 97% 0% 0% 0% 0% 0% 0%

Total Opex of Taxonomy eligible

activities (A.1+A.2)

14,245 97% 97% 0% 0% 0% 0% 0% 0%

B. Taxonomy-non-eligible activities

Opex of Taxonomy non-eligible

activities

457 3%

Total (A+B) 14,703 100%

2023Sif Annual Report

Our commitment to the Sustainable Development Goals

Commitment Goals 2023 Realized 2023 Impact

Participate in projects resulting in renewable energy

capacity

Reduce carbon footprint

Manufactured foundations for 2,622 GW offshore wind

capacity

Started expansion of manufacturing facilities to

accelerate energy transition, improve safety & limit

impact on the environment

Replaced 70% of Gas-preheating stations by electrical

stations

Develop integrated transition piece alternatives Successfully tested Skybox solutions that limit offshore

installation

Pursue circular production of monopile foundations

Improve safety statistics to < 1.5 LTIF and decrease

sick leave to <5%

Limit waste to <5%

Founded joint ventures for development of

decommissioning and recycling solutions

Safety standstill in May 2023 was start of improvement

on 12 month rolling basis

97.9% of waste recycled

2023Sif Annual Report

How we manage our business and related risk

corporate governance

Shares and shareholders

This paragraph includes the information that is referred to under Article 1, paragraph

one of the Decree Implementing Article 10 of the Takeover Directive.

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. The telephone number is +31 475 385777 and

website address www.sif-group.com.

Sif is included in the Commercial Trade Register under number 1301 6026. Its legal

entry identifier code (‘LEI’) is 724500 JOBPD 5CLHCK040.

Sif’s authorized share capital is €25,000,000 divided into 115,000,000 ordinary

shares with nominal value of €0.20 each and 200,000,000 preference shares with

nominal value of €0.01 each. At the 2023 year-end, 29,888,612 ordinary shares and

50,000 preference shares had been issued. Each ordinary share bears 20 voting

rights, each preference share bears 1 voting right. In total 597,822,240 votes can be

cast during General Meetings of Shareholders. No depositary receipts were issued

on the share capital of the company.

Sif’s ordinary shares are listed on the Euronext Amsterdam stock exchange with

ticker SIFG.AS and ISIN code NL011660485. All issued shares are fully paid-up.

Ordinary shares are entered into a collective deposit by transfer to Euroclear

Nederland or an intermediary. Euroclear is listed in the shareholders’ register held by

the Company. All 50,000 preference shares were issued to Equinor Renewables B.V.,

who is listed in the shareholder’s register held by the company. Sif’s preference

shares are not listed on a stock exchange. The company has a call option to buy

back the preference shares until 1 July 2028. If the option is not called by 1 July

2028, Equinor Renewables B.V. has the right to convert the preference share to

ordinary shares at €12 per share.

SHARE INFORMATION

2023 2022 2021 2020 2019

Closing price at year-end in € 10.44 11.60 12.24 16.54 12.50

Highest price during the year in € 15.24 13.32 19.08 17.16 14.72

Lowest price during the year in € 8.56 9.19 11.18 7.50 8.72

Average daily trading in number of shares 17,124 23,908 24,912 44,915 40,766

Market capitalization at year-end in €

1,000,000

312 296 312 422 319

Earnings per share in € 0.32 0.28 0.45 0.29 0.22

Dividend per ordinary share in € - - 0.19 0.12 -

Weighted average number of shares

outstanding (in 1,000)

27,787 25,501 25,501 25,501 25,501

Total dividend in € 1,000 - - 4,845 3,060 -

The free float in Sif’s ordinary shares is approximately 40% of the issued shares as

at 31 December 2023. 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 Financiéle Markten (Netherlands

Authority for the Financial Markets/AFM). The AFM should subsequently be notified

again when the substantial holdings (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%. 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. These reported

percentages are not necessarily the actual percentages held.

2023Sif Annual Report

Shareholder Distribution Date of

disclosure

Capital

interest

Voting

interest

Equinor ASA Indirectly

potential

July 2023 13.94% 0.70%

Schroders Plc Indirectly real September

2022

5.00%

Grachtenheer 10 BV Directly real March 2022 49.20% 49.20%

Moneta Asset

Management

Directly real May 2020 5.00% 5.00%

Egeria Capital Holding

Directly real April 2017 6.46% 6.46%

REGULATORY FILING OF SHARE OWNERSHIP AT THE END OF 2023

Sif’s preference shares are subject to a disbursement of dividend as follows:

> 5% for the period until 1 July 2025

> 5.5% for the period 1 July 2025-30 June 2026

> 6.25% for the period 1 July 2026-30 June 2027

> 7% for the period 1 July 2027-30 June 2028

> 8% for the period from 1 July 2028

Subject to the approval of the Supervisory Board, the Executive Board transfers as

much of the remaining profit to reserves as it deems necessary. Insofar as the profit

is not transferred to reserves subject to the provisions of the previous sentence, it is

available to the Annual General Meeting of Shareholders in whole or in part for

transfer to the reserves or in whole or in part for distribution to the shareholders in

proportion to the shares owned. All ordinary shares are entitled to a dividend pay-out

of Sif’s profit reserves. Sif applies a dividend policy for the holders of its ordinary

shares in which the company expects to pay a dividend in line with Sif’s medium to

long term financial performance. The Company aims to increase dividends-per-

ordinary-share over time. Sif envisages that, because of this policy, the dividend pay-

out ratio for ordinary shares will range between 25-40% of the Group’s profit in any

given year. For the duration of the construction of the new factory at Maasvlakte 2,

pay-out of a dividend to holders of ordinary shares is prohibited under the term loan

arrangement.

The most important rights and obligations of the Annual General Meeting of

Shareholders are the issue of additional shares or the granting of rights for 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 Board and Supervisory Board members and the appointment

of the auditor.

Sif endorses the principles of the Dutch Corporate Governance Code 2022 (‘Code’)

and applies most of the best practice provisions of the Code. An explanation is

included in Sif’s website under the corporate governance paragraph.

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.

> 1.4.1 Risk management accountability.

2023Sif Annual Report

> 2.2.5 Committees. The Supervisory Board has not installed a Selection

& Appointment Committee.

> 2.3.10 Company Secretary.

> 4.2.3 Meetings and presentations. Group structure and organization

Sif is subject to the Large Company Regime (‘volledig structuurregime’) in

accordance with Dutch law and has a two-tier board structure. The Executive Board

is responsible and accountable for the management of Sif and comprises two

Executive Board members, one appointed CEO, and one appointed CFO.

A Supervisory Board supervises and advises the Executive Board and comprises five

Supervisory Board members.

ORGANIZATIONAL STRUCTURE

Our way of working is based on teamwork and collaboration whereby the areas of

attention for the CEO are health, safety, quality & environment, business

(commercial, production, projects and innovation & business development), human

resources, engineering, marketing & communications. The areas of attention for the

CFO are finance & control, procurement, tax, risk & compliance, legal and IT. The

Management Team is in charge of the day-to-day operational management of the

company. In addition to the members of the Executive Board, the Management

Team consists of the Chief Commercial Officer (CCO), the Chief Operational Officer

(COO), the Human Resource Director (HRD) and the Projects Director (PD).

This management structure applies to all activities that Sif develops and that are

organized along legal lines as follows:

LEGAL STRUCTURE

SSSF B.V. is a cooperation between Sif and Smulders for specific projects, for the

supply of monopiles and transition pieces for contractual structures in which Sif and

Smulders operate as joined and several liable contract partners to the client.

SBR engineering GmbH serves the development of special purpose welding

equipment.

Twinpark SIF B.V. operates and exploits the GE Haliade X wind turbine at Maasvlakte

2, Rotterdam.

2023Sif Annual Report

KCI the engineers B.V. offers engineering skills, both inhouse and for external clients.

Sif Decom B.V. is founded in relation to potential future decommissioning of

(technically or economically) depreciated wind farms that must be removed from

the seabed and recycled into new products.

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 internal rules are published on Sif’s website

under ESG/governance named ‘Executive Board rules June 2023’. The Supervisory

Board supervises the implementation of the strategy for sustainable long-term value

creation and advises the Executive Board on the day-to-day management of the

Company. In performing its duties, 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 Sif’s website under ESG/governance named ‘Supervisory Board rules

June 2023’. These rules imply that certain rights have been delegated by the annual

General Meeting of Shareholders to the Executive and Supervisory Boards. This

applies to the designation of the Executive Board, with the Supervisory Board's

approval, as the body authorized to issue or acquire shares or to limit pre-emptive

rights on newly issued shares. The scope and duration of these powers are

stipulated by the General Meeting of Shareholders and reflected in the minutes of

meeting of the annual General Meeting of Shareholders that are published on the

website of Sif (agm2023minutesofmeeting.pdf (sif-group.com)).

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 and in the relationship agreement of the

company with its largest shareholder Grachtenheer 10 B.V. 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. 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 or her term of office as an Executive Board member

without having the title of CEO.

Relationship agreement with large 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 Grachtenheer 10 BV have entered into a relationship agreement that

was revised in 2023. The main elements of the relationship agreement between Sif

and Grachtenheer 10 BV 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 issued capital of Sif, Grachtenheer 10 BV is entitled to

nominate (and eventually propose replacements for) two Supervisory Board

members. When holding between 20 and 50% of the issued capital of Sif,

Grachtenheer 10 BV is entitled to nominate (and potentially propose replacement of)

one Supervisory Board member. The relationship agreement will terminate once

Grachtenheer 10 BV ceases to hold at least 20% of the issued capital of Sif.

2023Sif Annual Report

Board remuneration policy

The Supervisory Board determines the remuneration of the Executive Board

members as reflected in the remuneration policy of the Company that was approved

by the General Meeting of Shareholders in May 2020. A revised proposal for

a remuneration policy will be presented for approval to the General Meeting of

Shareholders in May 2024. In this proposal, the definition for pay-ratio will be aligned

with the Dutch Corporate Governance Code, the STI-LTI balance will be geared more

to long term remuneration with at-target percentages becoming equal for STI and

LTI, settlement will take place in shares and the remuneration of Supervisory Board

members/Chair will be rebalanced to reflect appreciation of committee

memberships.

The most recent remuneration policy is published on Sif’s website under

ESG\governance. Sif’s remuneration policy aims to attract, motivate and retain

qualified executives and staff with relevant experience. The remuneration policy

provides a framework for a result-driven remuneration structure that should drive

strong business performance, promote accountability and incentivize members of

the Executive Board to achieve short-term and long-term performance targets with

the objective of substantially increasing the Company’s equity value and its social

and environmental performance. The starting point is a 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 that is related to share price performance. To

ensure 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. An alignment is

assumed between the remuneration package of the members of the Executive

Board and the salary conditions of the employees of Sif, reflected in the pay ratio

level. The main components of the prevailing remuneration policy are:

a. A fixed base salary. Reviewed annually at the discretion of the Supervisory

Board.

b. A variable annual cash bonus for performance and results in any calendar year.

Maximum of 60% of the fixed base salary for the CEO of which 73% is dependent

on the achievement of financial targets and 27% on personal targets. Maximum

of 50% of fixed base salary for the CFO of which 72% is dependent on the

achievement of financial targets and 28% on personal targets. Financial targets

include adjusted EBITDA ex IFRS16, contribution and adjusted ROACE. Personal

targets differ for each member of the Executive Board and can, for example,

include safety performance, sick leave, carbon footprint, corporate culture,

reporting discipline and communication. The on-target bonus is 40% for the CEO

and 35% for the CFO. Personal targets are set by the Supervisory Board at the

beginning of each calendar year.

c. Pension accrual for a pensionable salary arrangement based on the fixed base

salary.

d. 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. 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 holding period applies in addition to the three-year vesting period.

e. Executive Board members are engaged through a four-year service agreement.

Diversity

Sif acknowledges the value of diversity in a broader perspective. That will be the

basis for the diversity policy that is being developed and that will be implemented in

2024.

Executive Board

Sif’s Executive Board has always consisted of two officers: a CEO and a CFO. The

terms for the present Executive Board members will end in 2026 (CEO, second term)

and 2025 (CFO, first term). The Supervisory Board is responsible for the

composition of the Executive Board and generally engages an executive search

consultant for the selection of candidates when expedient. Specific attention is paid

to candidates of a different gender that should represent at least 50% of the longlist.

In the event of equal eligibility, a candidate of a different gender will have preference.

2023Sif Annual Report

Management Team

Sif’s Management Team consists of four managers when excluding the Executive

Board members. Of these four managers, one is female. Recruitment agencies that

work for Sif when recruiting members for the Management Team are aware of our

desire for diversity in the workforce. The aim is for at least 50% of the invited

candidates to be of a different gender.

Supervisory Board

As a listed company, Sif is subject to legal requirements regarding Supervisory

Board composition. At the end of 2023, the Supervisory Board consists of two

women and three men, which is in compliance with the requirement to have at least

one-third men and one-third women. Recruiting of new Supervisory Board members

will often be contracted to executive search agencies. Decisive for nomination will be

‘the best candidate for the job’.

Our people: sustained working relationship

First time right is of vital importance to our business. Production recalls, repairs and

incidents frustrate our workflow and have a significant operational and financial

impact. Our key strength is the people who (detail)engineer the end products, that

design the work processes and who operate the machines and equipment that

enable us to do things right the first time.

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 through staffing agencies for certain activities

such as welding, rolling, grinding and preservation for corrosion, transportation and

testing. At year-end 2023, our flexible staff comprised 51.4% of our workforce

compared to 37.0% at year-end 2022. At the end of 2023, the total workforce was

762 compared to 587 at the end of 2022. Of the 762 total staff, 47% was Dutch and

53% came from other EU member states.

Anticipating the shortage of skilled technical labor and the need for 180 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

from 50:50% to 67:33%. An extensive recruitment plan has been developed for this

purpose. The entrepreneurial spirit, technical environment, role in the energy

transition and the continuation of investments in innovation and capacity play an

important part in attracting new colleagues. Our pursuit of equal remuneration of

permanent and flexible staff is also important. In 2023, we aligned additional

(variable) remuneration components for both groups.

Given the quality demands with respect to our products and their ever-increasing

dimensions and complicated manufacturing processes, it is a necessity to nurture

a future-proof workforce and sustained working relationship. This means attracting,

training, committing and retaining the best people, empowering them to optimize

team performance, take ownership and focus on results are key in today’s labor

market. An increased share of permanent staff promotes safety and quality, while

reducing sick leave and the efforts and expenses of hiring and training flexible staff.

Employee turnover was 11.4% of the average number of permanent employees in

2023.

Attract; technical jobs serving energy transition

The Management Team is putting strong emphasis on connecting with potential

candidate groups via various recruitment channels and on promoting diversity in the

broadest sense with respect to ethnicity, nationality, age, gender, education,

experience, sociodemographic background and perspective. Diversity offers a larger

pool of candidates, enhances recruitment efforts and improves the performance of

teams. Providing an inclusive workplace makes diversity work. Improving our gender

diversity, however, remains a challenge, especially among members of our flexible

shopfloor workforce who often originally come from Eastern European countries and

do not always wish to settle in the Netherlands permanently.

2023Sif Annual Report

Gender distribution of staff

(IN %)

89.0

11.0

Male

Female

The above graph relates to permanent male and female staff as per 31 December

2023. At year-end 2023, 11% of our total workforce on Sif’s paylist were women.

Albeit slowly, we see more women entering various management levels. Four out of

seven senior staff recruitments in the first two months of 2024 were women. We

also see a slow but increasing interest among women in technical studies. This is

why we have developed special programs for attracting women in technical roles

with specialized staffing agencies and through contacts with ROCs (regional training

centers). In addition, we have programs for attracting refugees who have

a residence permit and for attracting people with a disadvantaged position on the

labor markets.

About 10% of women in college in the Netherlands opt for technical secondary

education (Life Science and Technology major). The proportion of women following

Dutch secondary vocational education (MBO) courses of study is higher at

approximately 20%. The proportion of women in higher professional education

(HBO) in the Netherlands stands at nearly 20%. Women make up between 35% and

40% of the total number of students in Dutch university education. The Netherlands

Education Council found that gender segregation in technology is declining but still

reflected in the working environment with only 14% of technical jobs in the

Netherlands held by women.

New ventures with business partners and student teams to break new grounds like

a program on testing of green hydrogen production at sea, enable Sif to learn from

the next generation and to connect with key universities.

Age distribution of permanent staff

(IN %)

1.0

2.0

32.0

30.0

23.0

12.0

0-20

21-30

31-40

41-50

51-60

61+

In addition to gender, Sif pursues more balance in terms of age and background. 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.

2023Sif Annual Report

Staff distribution: nationalities

(IN %)

36.5

13.5

10.5

39.5

permanent Dutch

permanent Other

flexible Dutch

flexible Other

Other than supervised interns, Sif does not employ anyone under the age of 18 and

uncourageous its suppliers and subcontractors not to employ anyone under 18.

Since all of Sif’s activities are all carried out in the Netherlands and because the

purchased materials and services are predominantly manufactured or rendered in

European countries, the risks of child labor are very limited with the partners we

certified. 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 negotiations with social partners to conclude collective labor agreements for the

industry. The current Collective Labor Agreement for Metal and Technology (CAO

metaal en techniek) has a duration of 30 months starting 1 October 2021. It

includes an 8% wage increase, which is rolled out in a few phases over the 30-month

period. Employment conditions at Sif are in line with or exceed the average

employment conditions applicable in the Netherlands or the industry and include

clauses for special leave situations. Tax and other deductions and remittances are in

line with European standards, regulations and legislation. Sif stipulates 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.

Staff distribution: flexible - permanent

(IN %)

51.4

48.6

Flexible

Permanent

Train and reward

Key positions in our production and engineering teams often require multi-year

training, education and experience. Retaining our people is crucial. We demonstrate

our commitment to retaining these colleagues by investing in safe workplaces,

education and remuneration.

Our training programs are designed to improve personal and team performance. An

annual amount is reserved for training in addition to permanent education at the

rolling and welding school of Sif in Roermond.

2023Sif Annual Report

In close cooperation with and based on the approval of the Works Council

(Instemming), a new appraisal and salary increase policy was introduced in January

2023. This new policy allows for performance-related remuneration in 2024 based

on targets set in early 2023. A more team-oriented approach stimulates the

development of individual employees and craftmanship within the various teams.

Performance assessment cycles apply in order to support and monitor the roll-out of

the pay-for-performance remuneration system.

In addition to the collective labor agreement, we paid all our employees a “premium

of appreciation” of €350 (based on full year employment).

Commit and retain

It is our responsibility to offer our employees a safe workplace, provide them with

opportunities for training and contribute to their personal development.

Our social and community involvement is reflected in specific 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 with a view to retaining and

nurturing internal talent and offering opportunities for career development. This

requires a strong commitment from the management in order to facilitate internal

moves and to make them successful. All these efforts contribute to building

a sustainable people-centric organization.

In order to get to grips with the relatively high employee turnover rates, Sif will start

measuring the commitment of employees (including exit assessments) and

translating the results into improvement plans in 2024.

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 Angelique Heckman for appointment

to the Supervisory Board. Furthermore, the Works Council, together with the

Executive Board, ensures that working conditions remain good or are improved

when necessary, 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 seats. In 2023, the Works Council held five consultation

meetings with the Executive Board. During these meetings, Sif’s Strategy and

operations plan, the Health-Safety-Environment policies, the Job Evaluation System

and Sick Leave Policy were presented and discussed. The CFO explained the annual

2022 results and the interim 2023 results in June and September 2023 respectively.

The Supervisory Board members representing the Works Council, Angelique

Heckman (from May 2023) and Caroline van den Bosch (until May 2023), did not

attended any of the Works Council consultation meetings in 2023.

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.

Risk and opportunity management. control framework

Effective risk management is pursued through various measures, including

a compliance framework that focuses on Sif’s organizational structure, processes

and culture.

2023Sif Annual Report

The organizational structure includes good governance and allows for appropriate

checks and balances. Supervisory Board rules, Executive Board rules, an

authorization matrix and whistle-blower policies support Sif’s processes. Operating

procedures are written in accordance with various standards and audited several

times per year. Sif is certified according to ISO 9001, ISO 3834-2, EN 1090-2, VCA**,

ISO 45001, ISO 14001, DNV-CP-0352 and DNVGL-SE-0436.

Sif is involved annually in a limited number of very large projects with a certain

repetitive pattern. ‘First time right’ is therefore important and the number of weld

repairs and number of product non-conformities are important performance

indicators. Frequent controls are critical. Internal audits at Sif and external audits at

our suppliers are consequently key components of our risk management. In addition

to several internal health and safety audits, ten audits were executed at suppliers

and potential suppliers, subcontractors, and business partners in the Netherlands,

Spain, France and Germany. Audits on quality, health, safety and environmental were

carried by or on behalf of our clients at Sif’s production sites. Certification

institutions DNV and TÜV carried out six audits at Sif on ISO standards and VCA.

Internal ISO 9001 audits are carried out on an ongoing basis, also in 2023, and six

audits on Sif’s HSE management system (ISO 45001, ISO 14001 and VCA) were

carried out.

Sif continuously reviews its quality and operational procedures because 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 to 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

meet 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

the Executive Board. The development of the risk profile is also reviewed during

these meetings. Adjustments to anticipated man-hours, project expenses and

results are made if and as required. This is reflected in the progress of the projects.

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 monthly, 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. These values and have been translated

into standards by formulating policies and exemplary leadership that promote the

drive for safety and innovation 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.

2023Sif Annual Report

Our business integrity and compliance

Sif is committed to conducting its business according to applicable laws, regulations

and its Code of Conduct. In 2022 and 2023, Sif engaged an integrity and compliance

advisory firm to assist it 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. A compliance director joined Sif early 2024. The principle-based

Code of Conduct was revised and presented to the Works Council for comments in

2023. In early 2024 the Executive Board and the Supervisory Boards approved and

adopted the revised text of the Code of Conduct that will be published on Sif’s

website and that will be implemented in 2024. The principle-based Code of Conduct

is standardized in different policies. The principles of the Code of Conduct relate to:

Workplace safety: We avoid and prevent business accidents and discrimination,

intimidation or (sexual) harassment on the work floor. 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

a whistleblower policy and appointed two external confidants, performed a privacy

impact assessment, appointed a privacy officer and is GDPR compliant. In 2023 one

(potential) privacy violation and zero incidents were reported under the whistle

blower policy and the confidant was approached in seven occasions (seven in 2022)

that all relate to workplace safety. The privacy violation was reported to the

Authority for Personal Data (‘Autoriteit Persoonsgegevens’) in August 2023.

Fair labour and employment practices: We commit ourselves to fair labor and

employment practices. There is no room in our organization for discrimination,

inappropriate behavior of any kind or forced labor or child labor.

Environment: We take responsibility for the protection of the environment, and we

minimize the environmental impact of our activities and products. We incorporate

environmental awareness into our designs, fabrication and distribution.

Fair competition, anti-bribery and corruption: We promote a fair and respectful

cooperation culture with customers, suppliers and other business and industry

partners. 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. Sif was notified by

the market supervisor AFM of a late notification of an insider transaction in 2023. Sif

incurred no legal or other expenses related to a possible violation of these principles.

Sif is not aware of investigations by authorities that relate to anti-trust, corruption or

the like.

Conflicts of interest: We avoid and prevent situations in which personal interests

can conflict with the interests of Sif. One Supervisory Board member refrained from

participating in Supervisory Board meetings for that reason for a certain period of

time in 2023.

Selection and fair treatment of suppliers: We operate with respect, transparency

and impartiality. We expect our business partners to follow the ethical standards set

out in our Code of Conduct.

Confidentiality and data protection: We handle information entrusted to us

responsibly by respecting confidentiality and data protection. We adhere to the

protection of personal data in our operations.

2023Sif Annual Report

Risk and opportunity management

Executing its strategy and running its day-to-day operations exposes Sif to new

opportunities and risks. Sif published a prospectus on 16 June 2023 that comprises

an extensive overview of risks on the pages 12-40. An overview of the most

important opportunities and risks is shown in the following table. The demand to

address climate change and to gain independence from fossil fuels and fossil fuel

owners offers opportunities for companies that are active in renewable energy.

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

have potentially different effects. The risk matrix below defines the types of risk we

distinguish, the extent to which they have materialized in 2023, the measures Sif

took to manage the risk and the level of risk we are willing to accept.

2023Sif Annual Report

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 with

high-tech expanded factory from 2025

> Access to capital

> Dependent on one dominant product

> Workforce composition (age, location, diversity)

> Dependent on governmental policies

> Volatility due to size and number of projects

> Dependent on limited number of suppliers

> Dependent on limited number of countries

EXTERNAL > Limited exposure to movement in prices of raw

materials

> Strong reputation for on-time and zero-defects

performance

OPPORTUNITIES STRATEGY STRATEGY

> Global focus on climate change and pressure on

reduction of climate change effects

> Pressure from geopolitical situation for

independency from fossil fuels and owners of

fossil fuel-sources

> Maturing and growing market in Europe with

massive ambitions for North Sea and Baltic Sea

> Emerging markets

> Expansion in adjacent services to clients

> Push for circularity

> 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 in BNS

Decom for fully circular products and services

> Investigate local USA/Asian partnerships and/or

license agreements

> Strengthen leadership role through engineering,

marshalling & logistics 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

decommissioning of depreciated wind farms

> Support alternative installation technology pilots

2023Sif Annual Report

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 size

> 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 scope

> Hire topclass project management and include

sufficient financial headroom in budget

> Investigate opportunities for local footholds by

partnering with local strong partners

> 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. With respect to

strategic opportunities in either new geographical markets or 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. With respect to new geographical markets, we will only start

activities in joint venture with one or more local partners who are familiar with the

local culture, requirements and regulations. With respect to expansion of services to

our existing clients, we will only offer technology that has been proven by others or

on a laboratory scale.

In relation to 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-tolerance approach; we do not accept any risk of

violation. This is also the case for the quality of our products because the purpose

for which Sif’s products are used means 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 from this.

2023Sif Annual Report

Risk matrix

Certain risks in the Sif risk matrix may have emerged or may have become more

imminent during the year under review. This mainly concerned the risks related to

the global unrest and the effects of increasing interest rates and shortage of

materials on pricing and availability of components and services in the global

offshore supply chain. It also concerned the risk of volatility in production because

of ever-increasing product dimensions and increasing project sizes. Despite the

increased sizes and weights of most of the products and projects on the market we

were able to assure a healthy factory utilization.

2023Sif Annual Report

Important mitigation tools to level out capacity utilization variance are investments

in innovation, product development and in-house detail engineering. The risk table

lists the main strategic, legal & regulatory, financial and operational risks.

2023Sif Annual Report

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 2023 Measures to mitigate strategic risk Risk appetite Status

1. A variety of large, globally spread wind farm

developments can distract management attention

In 2023 Sif tendered for

European projects mainly and

incidentally for projects

outside Europe

Focus on mature markets in North sea territory

and select clients or joint venture partners in

emerging markets for controlled geographical

diversification

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

(floating) but with approx.

80% market share monopiles

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 will assure Sif to be the supplier of LCOE

optimized total MP solutions.

Re-start marshaling activities and grow KCI the

Engineers’ engineering activities

Ongoing monitoring of market developments

Sif will only develop new products for

existing markets or enter new

markets with existing products

Safeguard balance between

permanent and flexible workforce.

3. Increasing competition from new and existing

industry participants

New entrants Haizea and

Navantia-Windar SeAH in UK

operational from 2024, Orsted-

EEW in USA, more presence in

EU from Chinese suppliers

oEuropean market

Promote customer loyalty and render best-in-class

services. Maintain investments in innovation.

Pursue level playing field through Offshore Wind

Foundation Alliance (lobbying organization for EU

legislation on fair competition)

The current market is healthy

enough to absorb the announced

new manufacturers of monopiles

4. Sif does not succeed in getting the manufacturing

expansion operational in time, within budget and

with the expected output and efficiency

No new factory from

competition is on schedule

and on budget

Focus on costs and stable supply partners Present facilities stay operational

while expansion works continue.

5. The significant investments in the Manufacturing

Expansion do not necessarily lead to profitable

results

Margins in order book justify

forecast EBITDA

Thorough preparation by operations based on

existing know-how and experience

Use of proven technology and

inhouse know-how

2023Sif Annual Report

Strategic risk Materialized Measures to mitigate Risk appetite Status

6. The production of XXXL monopile foundations

involve technical, operational and financial risks

that could affect Sif’s business, results and

financial condition

All production workstation

tests were successful

Thorough preparation by operations based on

existing know-how and experience

Use of proven technology and

inhouse know-how

7. The current governmental support of renewable

energy is modified, not renewed at the current

levels or at all

EU wind power pack indicates

even stronger support

Active lobby in Bruxelles through WindEurope and

OWFA supports EU supply chain. Active lobby

through NWEA and IRO to strengthen Dutch

governmental support for offshore wind

8. The sale of products is impacted by the general

economic environment and the current financing

environment, making offshore wind projects more

expensive

Interest rates and material

costs have risen, making

projects more expensive.

Termination of Empire Wind 2

for Sif

Preference for experienced developers in mature

offshore wind markets

Include cancellation and

postponement fees in contracts

Prioritize EU projects

9. Offshore wind becomes less attractive as an

energy source

Offshore wind confirmed

crucial for energy

independence of EU

10. Sif has a concentrated business model in terms of

suppliers, products, clients and geographical focus

Sif less dependent through strategy of total

solutions and supplier independence in new

factory set-up

11. Sif may be harmed by safety incidents Increasing number safety

incidents in 2023

Training of employees & continued promotion of

safety-culture

Mitigate unsafe situations

Safety as the priority

2023Sif Annual Report

Legal, Regulatory and Financial risk Materialized Measures to mitigate 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

No. Termination of Empire

Wind was financial decision

without reputational angles

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)

No Sif actively supports OWFA and Wind Europe as

their ears and voice in the public and political

environment in EU. And NWEA and IRO in the

Netherlands

Sif hands over foundations and

responsibility to client while still

ashore

4. IT-cyber-security Storage of private information

of certain employees on

server temporary accessible

for sif-employees

phishing awareness training on security and

privacy, annual penetration tests and use of i-babs

as a secure environment for confidential meeting

documents, replace/protect servers. I-cloud data

storage policy. Additional actions to install and

maintain firewalls

Back-up organization and systems in

place

5. Inadequate reporting process None Strengthening finance function and upgrade of

ERP AX to D365

Timely and reliable monthly financial

reporting

6. 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 but normalized in 2023

Pass-through costs for certain materials (steel)

Limited hedging and fixing of energy prices

Limited to no exposure to pricing of

key raw materials like steel

Indexation of energy prices in

tenders and contracts.

7. 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

8. Changes to global economic conditions Unstable geopolitical situation

impacts interest, pricing etc

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

2023Sif Annual Report

Operational risk Materialized 2023 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

Continued war in Ukraine,

unrest in middle east/ Red

Sea transport routes.

Increased tension China-

Taiwan

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

Termination of Empire Wind 2 Maintaining a flexible workforce to adjust the

workforce to the workload.

Apply contractual cancellation and postponement

fees

Safeguard balance between

permanent and flexible workforce

and allow time for maintenance and

repair

3. 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

4. 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

5. Insufficient flexibility or resources to adapt to

changing regulations and specifications

Insufficient labor Talent development, training and in-house

engineering know-how

Market leadership in manufacturing

capacity and skills

6. Increase in dimensions of turbines requires larger

foundations that are too large for present

production facilities and processes

Capacities of turbines still

increase

Invest in expansion of facilities and adjusted

production procedures and equipment (P11)

Earn back max 4 years

7. 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

8. Risk of low water levels in rivers No 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

2023Sif Annual Report

Executive Board statement

The Executive Board report (consisting of the pages 3 up to and including 68) and

such parts of the financial statements as referred to in the Executive Board report,

comprise the ‘Bestuursverslag’ within the meaning of article 2:391 of the DCC.

In control and responsibility statement

The Executive Board states, in accordance with best practice provision 1.4.3 of the

Code, that:

> the Executive Board report provides sufficient insight into any important

deficiencies in the effectiveness of the internal risk management and control

systems that may have been detected during the 2023 financial year and no

major failings have been detected;

> the risk management and control systems provide a reasonable assurance that

the 2023 financial statements do not contain any errors of material importance.

Details are set out in the Risk management and control section;

> based on Sif’s current situation, it is justified that the financial reporting is

prepared on a going concern basis. This is based upon the strong cash position

and the expected medium- and long-term free cash flow generation of the

company and the risks facing the company. Commentary on the company’s

cash flow, liquidity and financial position is set out in the Financial Review. The

financial risk management is set out in note 25 of our consolidated financial

statements; and

> the Executive Board report discloses all material risks and uncertainties that are

relevant regarding the expectation as to the continuity of Sif for the 12- month

period after the date of issue of this Executive Board report. The Risk

management and control section of the Executive Board report provides a clear

substantiation of the above mentioned statement.

With reference to section 5:25c sub 2c of the Financial Markets Supervision Act, the

Executive Board states that, to the best of its knowledge:

> the annual financial statements give a true and fair view of the assets, liabilities,

financial position and profit of the company and the undertakings included in the

consolidation taken as a whole; and

> the Executive Board report provides a fair view of the development and

performance of the business and the position of the company and the

undertakings included in the consolidation taken as a whole, together with

a description of the principal risks and uncertainties that the company faces.

Corporate governance statement

The information required to be included in this Corporate Governance Statement as

described in articles 3, 3a, 3b and 3d of the Dutch Decree on the contents of

Directors’ Report (the Decree) are incorporated in the Executive Board Report and

the Supervisory Board Report sections. The main characteristics of the company’s

internal risk management measures and control systems connected to its financial

reporting process, as required by article 3a sub a of the Decree, are described in the

In Control and Responsibility Statement.

Sif complies with all the relevant best practice provisions of the Code, with the

exception of best practice provisions 1.3.1-1.3.3, 1.4.1, 2.2.5, 2.3.10 and 4.2.3. The

nature of and reasons for these deviations are explained on the website of Sif

Compliance-Corporate-Governance-Code-2023.16March2023.pdf (sif-group.com)

Article 10 takeover directive

The Executive Board states that all information, which must be disclosed pursuant

to the Decree Article 10 Takeover Directive (‘Besluit artikel 10 overnamerichtlijn’), is

included in the Corporate Governance section, the Supervisory Board report and the

notes referred to herein, to the extent that it is applicable to Sif.

Non-financial statement

Directive 2014/95/EU on the disclosure of non-financial information requires

companies to publish a non-financial statement. The relevant provision has been

implemented into Dutch law through the Decree disclosure on nonfinancial

information (‘Besluit bekendmaking niet-financiële informatie’). The information

regarding environmental, anticorruption and bribery, social and employee matters,

and respect for human rights, as required by this Decree, is incorporated in the

chapters ‘How we manage our business and related risks’ and ‘How our business

performed in 2023’.

2023Sif Annual Report

The Executive Board states that all information to be disclosed under Article 2a of

the “Besluit inhoud bestuursverslag” (Decree on the content of the Report of the

Executive Board) is included in this Executive Board Report.

Roermond, 18 March 2024

Fred van Beers (CEO)

Ben Meijer (CFO)

2023Sif Annual Report

Supervisory Board

The Supervisory Board has taken notice of the report of the Executive Board for the

2023 financial year. EY (Ernst & Young Accountants LLP) have audited the financial

statements and have issued an unqualified auditor’s report on 18 March 2024. This

auditor’s report has been added to the financial statements for Sif’s 2023 annual

report. 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. We recommend that the General Meeting of Shareholders

adopt the 2023 financial statements and discharge the members of the Executive

Board for their management of the company and the members of the Supervisory

Board for their supervision. Profit attributable to the shareholder for 2023 amounted

to €10.9 million. We approve the Executive Board’s proposal to award a dividend of

€1,875,000 on cumulative preference shares, to add this amount to the accumulated

retained dividends and to retain the remainder of the profit attributable to the

shareholder and add this amount to the general reserve of the Company.

Duties of the Supervisory Board

The Supervisory Board supervises the strategy of the Executive Board and the

general course of business of the Company. It provides the Executive Board with

advice. Furthermore, the Supervisory Board focuses on the effectiveness of the

Company’s risk management and control systems, on the quality of its financial,

social and environmental reporting, on compliance with legal and regulatory

requirements and on the maintenance and enforcement of the corporate culture and

business ethics. In the performance of its duties, the Supervisory Board acts in the

interest of the Company and its affiliated companies. In doing so, the Supervisory

Board considers the legitimate interests of all stakeholders of the Company. The

articles of association of Sif Holding N.V. and the Supervisory Board rules include

rules with respect to board meetings and resolutions. Both documents are available

on Sif’s website in the section ESG/Governance.

Fulfilment of duties in 2023

Strategy

Each year, the Executive Board reviews Sif’s strategy with the Supervisory Board and

discusses progress on the implementation of the strategy. In 2023, this very much

related to the decision to invest €328 million in an expansion of manufacturing

facilities in the Netherlands and to increase the presence in the Asian offshore wind

market through a cooperation, support and license agreement with GS Entec from

South-Korea. Both decisions are aimed at long-term value creation through the

confirmation and strengthening of Sif’s leadership position in the market for

offshore wind foundations. Specific aspects that required the Supervisory Board’s

involvement in 2023 relate to the lagged negative effects from the Ukraine-Russia

war such as volatility in pricing of raw-materials and energy and increased interest

rates. All had an impact on the pricing of offshore wind projects and final investment

decisions. A specific risk to the implementation of the strategy is the situation on the

Dutch labor market, particularly in view of the expansion plans and the workforce

that these require. A specific opportunity to the implementation of the strategy is the

development of new products and services. Throughout 2023, the Executive Board

made assessments of the trends and their possible impact on Sif, enabling Sif to

take appropriate mitigating, accelerating, preventing or enabling measures. These

assessments were supported by knowledge carriers of Sif that presented progress

on product development and staffing optimization during meetings of the

Supervisory Board.

Results

In the interest of pursuing a more predictable, robust and less volatile development

of results, the ‘solidity over margin’ policy, the ongoing professionalization and the

improvement to internal processes were discussed extensively during meetings of

the Supervisory Board. A permanent item on the Supervisory Board’s agenda is

safety. Disappointing safety statistics were discussed and analyzed, especially given

the size of the products that keep on increasing, which minimizes the room to

maneuver for employees. Any incident can have huge consequences, emphasizing

the importance of a zero-incident ambition.

2023Sif Annual Report

Financing and dividend

The expansion of the manufacturing plant in Rotterdam is financed with a mix of

equity, debt, lease facilities and Advanced Factory Payments. Given the investment

plans and the conditions of the term loans supporting this program, the pay-out of

any dividend is suspended until construction activities have been finished and the

expanded manufacturing plant has successfully been taken into operation and only

after a dividend is paid on the cumulative preference shares. There is no dividend

proposal relating to results realized in 2023. The dividend on cumulative preference

shares may be accumulated and paid-out if and when the shares are redeemed or

converted into ordinary shares.

Corporate governance

The Supervisory Board was informed of the revised Dutch Corporate Governance

Code and its impact on Sif, the process of revision of Sif’s Code of Conduct

following the maturity assessment that was made of Sif’s ethics and compliance

program and of ESG-related European legislation that Sif needs to comply with from

2024.

Meeting discipline

In 2023, the Supervisory Board held five regular meetings in the presence of the

Executive Board and one regular meeting without attendance of executives. Auditor

EY was present during two of these regular meetings when interim and full-year

results were discussed. Peter Visser was absent from one of these five regular

meetings. In addition, seven TEAMS-meetings were held on the expansion plans that

were not attended by Peter Visser or other large shareholder representatives for

reasons of a potential conflict of interest. Caroline van den Bosch was absent from

one of these seven meetings. These TEAMS-meetings were all attended by the

Executive Board.

The audit committee held five meetings in 2023, which were all attended by CFO and

occasionally by managers responsible for finance and IT. Two of these meetings

were not attended by Peter Visser and two were attended by Auditor EY. Among

other things, the audit committee 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. Key audit findings were

discussed, and progress on follow-up was reported during the meetings. The auditor

was also consulted by the audit committee in the absence of Executive Board

members.

The remuneration committee had four meetings in 2023, all attended by the CEO

except for one. All the members of the remuneration committee attended the

meetings. The remuneration report for 2023 and the confirmation of the

performance indicators for variable remuneration were on the agenda for the first

meeting in 2023. Furthermore, the 2023 targets for the Executive Board members

were discussed for advice to the Supervisory Board. Related to the investment in the

expansion of manufacturing facilities, the remuneration committee advised on two

additional cash bonusses for specific achievements as referred to in article 5 of the

remuneration policy to Executive Board members in combination with their

investment in Sif-shares.

A special Supervisory Board committee (P11 committee) was installed in 2023 to

monitor and advise on the execution of the €328 million expansion project of Sif.

The committee convenes monthly and exists for as long as the construction

activities last and until the plant is operating according to plan. The P11 committee

held eight meetings in 2023, two of which were conducted in TEAMS. Four meetings

were attended by all P11 committee members. All the meetings were attended by

CEO and CFO and by the project director of the expansion project.

The Supervisory Board was represented at one consultation meeting of the Works

Council.

2023Sif Annual Report

Important Supervisory Board resolutions in 2023 included the proposal to the

extraordinary General Meeting of Shareholders in March 2023 to amend the articles

of association of the Company, the proposal to the extraordinary General Meeting of

Shareholders in March 2023 to designate the Executive Board to issue and

repurchase preference shares and to grant rights to subscribe for ordinary shares

and exclude pre-emptive rights to subscribe for ordinary shares and exclude pre-

emptive rights for purposes of conversion of preference shares, the approval of the

final investment decision for the €328 million investment in the expansion of the

manufacturing facilities, the grant of Rights in the proportion as set out in the Equity

Prospectus and the Underwriting Agreement and the exclusion of the statutory pre-

emptive rights (wettelijke voorkeursrechten) in connection therewith, the issue of up

to 4,353,890 Offer Shares and the exclusion of the statutory pre-emptive rights

(wettelijke voorkeursrechten) in connection therewith, the approval of the

Prospectus related to the issue of the Offer Shares, the issue of 33,366 Ordinary

Shares to employees of Sif and the exclusion of the statutory pre-emptive rights in

connection therewith, the approval of the 2024 business plan and budget for Sif

Holding N.V, the proposal to reappoint the auditor, the nomination of Angelique

Heckman and Annabelle Vos as members of the Supervisory Board to the annual

General Meeting of Shareholders and the extraordinary General Meeting of

Shareholders in May and September respectively, the approval of the criteria for

bonus remuneration of the Executive Board, the appointment of Peter Gerretse and

Peter Wit as chairman and vice-chairman respectively of the Supervisory Board and

the presentation of the annual report 2022 for approval by the annual General

Meeting of Shareholders in May 2023.

Composition and functioning of the Supervisory Board

In 2023, André Goedée and Caroline van den Bosch resigned as Supervisory Board

members and Angelique Heckman and Annabelle Vos were appointed in May and

September respectively. During the first months of 2023, Peter Visser did not

participate in Supervisory Board meetings for reasons of a possible conflict of

interest. It was decided that a Supervisory Board self-assessment was not expedient

in these circumstances. The next self-assessment of the Supervisory Board’s

functioning is scheduled for November 2024. For further background information

about the Supervisory Board reference is made to chapter ‘Our management’ of this

annual report.

ROTATION SCHEDULE SUPERVISORY BOARD

2024 2025 2026 2027

Peter Gerretse

Peter Wit

Angelique Heckman

Peter Visser

Annabelle Vos

Resigning, not available for re-appointment

Resigning, eligible for re-appointment

The Supervisory Board currently has five members. According to the rotation

schedule, Peter Gerretse is due to retire from the Supervisory Board in May 2024.

Angelique Heckman and Annabelle Vos were appointed in 2023. The present

composition of the Supervisory Board can be found in chapter ‘Our management’ of

this annual report. Of the Supervisory Board members, four qualify as independent

as referred to in article 2.1.8 of the Dutch Corporate Governance Code. As stipulated

in the Relationship Agreement between Sif Holding N.V. and Grachtenheer 10 B.V.,

Grachtenheer 10 B.V. has appointed a listener to attend all the meetings of the

Supervisory Board and its committees. In 2023 listener Mathijs Koster attended

most of the meetings of the Supervisory Board and of the board-committees. He is

subject to the same conflict-of-interest regime that applies to Supervisory Board

member Peter Visser.

All transactions conducted between Sif Holding N.V. and any of the Supervisory

Board members are agreed on market terms. Decisions to enter into transactions of

material significance between 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 2023.

2023Sif Annual Report

None of Sif’s Supervisory Board members holds more than two Supervisory Board

positions at other stock-market listed companies as provided for in the Dutch

Management and Supervision of Legal Entities Act.

SUPERVISORY BOARD PROFILE MATRIX

Area of expertise Supervisory Board Member

Offshore energy market; Peter Visser, Peter Wit, Annabelle Vos

General management & strategy; Peter Gerretse, Peter Visser

Project management; Peter Gerretse, Peter Wit

Finance, administration and accounting; Peter Wit, Peter Visser

Marketing and sales; Peter Visser

Manufacturing, logistics, innovation & R&D; Peter Gerretse

Safety, environment & governance; Annabelle Vos, Angelique Heckman

Human resources, personnel and organisation;Angelique Heckman

Information technology; Peter Wit, Peter Gerretse

Risk management, regulatory and compliance.Annabelle Vos, Peter Wit

Board committees

The Supervisory Board may install Supervisory Board committees. The Supervisory

Board has installed three board committees: the audit committee, the remuneration

committee and the P11 committee. Rules are drawn up for the more structural audit

and remuneration committees. The P11 committee has a more temporary character

and is expected to be dissolved sometime in 2025 once the expansion plans have

been completed and the new factory is running according to expectations. The

P11 committee does not have a specific set of rules. The audit and remuneration

committee rules are available on the Sif website under ESG/governance. The

committees are tasked with laying the groundwork for the decision-making process

of the Supervisory Board.

The audit committee comprises three members of the Supervisory Board. Up until

May 2023, the members of the audit committee were Peter Wit (chairman) and

Peter Visser. From May 2023, the members were Peter Wit (chairman), Peter Visser

and Peter Gerretse. Mathijs Koster attends meetings of the audit committee as

a listener. Expertise in financial reporting and auditing of financial statements is

covered by the members of the committee. 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, the integrity of

the financial information disclosed by the Company and of the non-financial

information that is included in the annual report of 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.

The remuneration committee comprises two members of the Supervisory Board. Up

until 12 May 2023, the members of the remuneration committee were Peter Gerretse

(chair), Caroline van den Bosch and Peter Visser. From 13 May up until 7 September

2023, the members were Angelique Heckman (chair) and Peter Wit and from

8 September up until 31 December 2023 the members were Angelique Heckman

(chair) and Annabelle Vos. The remuneration committee rules define the duties,

roles and responsibilities of the remuneration committee. They include Sif’s

remuneration policy, the remuneration of the individual Executive Board members

(remuneration structure, level of fixed remuneration, shares or other variable

remuneration components, pension entitlements, severance payments and the

performance criteria and their application), scenario analyses regarding different

levels of variable remuneration and the Supervisory Board’s remuneration report.

The P11-committee comprises two members of the Supervisory Board (Peter

Gerretse (chair) and Peter Visser) with Mathijs Koster as listener. The

P11 committee has monthly meetings with the Executive Board and project director

Frank Keizer to discuss progress and budget for the project.

2023Sif Annual Report

The Supervisory Board has not installed a selection and nomination committee since

the selection and appointment and reappointment of the two Executive Board and

five Supervisory Board members is considered a full board duty. The rules governing

the appointment and resignation of members of the boards are included in Sif’s

articles of association and in the relationship agreement between Sif and

Grachtenheer 10 BV. 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

(Grachtenheer 10 BV) and Sif’s Works Council. In 2023, the Works Council

recommended Angelique Heckman for appointment to the Supervisory Board and

the Supervisory Board’s primary contact for the Sif Works Council. The Supervisory

Board may appoint and reappoint Executive Board members following a 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 on

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.

COMPOSITION OF SUPERVISORY BOARD COMMITTEES

audit committee remuneration committee P11 committee

Peter Gerretse member chairman

Peter Wit chairman

Angelique Heckman chairman

Peter Visser member member

Annabelle Vos member

Epilogue

It has been an exciting year for Sif. A record investment, a license agreement for the

Asian market, a project cancellation, tight labor markets and meanwhile, amongst all

these distractions, delivering on the well-filled order book. Sif has strengthened its

organization to be ready for the busy years ahead. Closing the year as promised

demonstrates Sif’s resilience, flexibility and perseverance. The Supervisory Board

expresses its respect and gratitude to the management and employees of Sif whose

hard work and commitment is the foundation for the success of the company in

2023 and for the years to come.

Roermond, 18 March 2024

Peter Gerretse (chairman)

Peter Wit (vice-chairman)

Angelique Heckman

Peter Visser

Annabelle Vos

2023Sif Annual Report

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 Annual General

Meeting of Shareholders 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. A revised draft of the remuneration policy will be

presented to the shareholders for their approval at the Annual General Meeting of

Shareholders in 2024.

The remuneration policy is instrumental to realizing Sif’s strategy and sustainable

longer-term value creation for all the stakeholders of Sif. In 2020, Sif undertook

a market analysis with the support of external consultants. This resulted in a revised

peer group of 14 companies of which seven companies are stock-listed and seven

are private. The main criteria for peer group selection were a combination of the type

of business (project-business), ownership (public-private) 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

2023 remuneration is based on the policy approved by the Annual General Meeting

of Shareholders in 2020. The use of non-financial KPIs in addition to financial KPIs,

align to Sif’s business and the strategy it is following. Together with the short term

incentive (STI)-long term incentive (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.

EXECUTIVE BOARD REMUNERATION

Fred van Beers Ben Meijer

Type of recompense In €, excluding VAT 2023 2022 2023 2022

Base salary 432,555 398,879 261,938 235,980

Employer´s pension contributions 27,847 24,458 23,626 20,604

Pension compensation 35,696 33,742 18,095 16,649

Annual bonus (expenses) 163,932 149,619 94,922 69,917

Non-recurring bonus (expenses) 46,758 - 28,073 -

LTIP, including spot bonus (expenses) 120,964 63,564 64,820 20,689

Other benefits (car lease, travel

expenses and relocation expenses)

51,853 50,463 42,955 40,471

Social security and other payments 11,168 9,881 11,168 9,881

Total remuneration 890,773 730,606 545,596 414,191

% variabel of total remuneration 37.2 29.2 34.4 21.9

Paid annual bonus in the year, earned

over the previous year

149,619 201,906 69,917 59,273

Paid vested LTIP 85,507 85,026 - -

Total actual paid variable

remuneration

235,126 286,932 69,917 59,273

The remuneration package includes the following elements:

Base salary

The fixed base salary for Executive Board members increased following

a benchmark study by a global consulting firm specialized in remuneration topics

and a discretionary review by the Supervisory Board as implied in article 4 of Sifs

remuneration policy. This resulted in a 3% increase of the base salary of the CEO

and a raise of the base salary of the CFO to €280,000 as of 1 January 2024 to

decrease the gap to the median pay that Sif is pursuing.

2023Sif Annual Report

Annual bonus

The annual bonus is in cash and based on pre-defined KPIs that may differ for each

Executive Board member. The Supervisory Board confirms that the results on which

the 2023 short-term incentive for the Executive Board members is based are derived

from the audited financial statements. The bonus for 2023 will be paid in cash in

2024 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.

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% and 50% of the fixed

base salary for the CEO and CFO respectively. For 2023, the pay-out percentages

(actual annual bonus as a percentage of the fixed base salary in the year of pay-out)

for Executive Board members are 37.9% for the CEO and 36.2% for the CFO. Targets

for safety and ESG/compliance policies were not met and therefore did not score for

the bonus award. The CEO scored 100% of 8% for the execution of the expansion

plan. The CFO scored 100% of 4% for implementation of Dynamics 365 and 100% of

7% for financial close of the financing plan for the expansion project. The CFO did

not score for the set-up and performance of a full pre-post analysis of delivered

projects from a controlling perspective. In 2022, the pay-out percentage for the

annual bonus was 37.5% of the fixed base salary for the CEO and 29.6% of the fixed

base salary for the CFO. For 2024, the KPIs 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 any financial impact that relates

to the research into, preparations for and expansion of our production facilities).

Non-financial targets relate to safety performance, carbon footprint and certain

organizational achievements.

max score 2023 score

target actual

For CEO

Adjusted EBITDA (ex IFRS 16) 14.7% 35,700 34,726 6.5%

Contribution margin 14.7% 146,600 148,989 8.7%

ROACE (adjusted) % 14.7% 28.2 110.7 14.7%

ESG/Safety LTIF 4.0% <1.5 8.28 0.0%

P11 execution in line with roll

out plan

8.0% in line in line 8.0%

Concretisation ESG and

compliance policies

4.0% new policy not completed 0.0%

Total

For CFO

Adjusted EBITDA (ex IFRS 16) 12.0% 35,700 34,726 5.7%

Contribution margin 12.0% 146,600 148,989 7.5%

ROACE (adjusted) % 12.0% 28.2 110.7 12.0%

Financial close and financing

plan P11

7.0% completed completed 7.0%

Implementation D365 4.0% completed completed 4.0%

Pre/post controlling analyses

projects

3.0% completed not completed 0.0%

Total

2023Sif Annual Report

Non-recurring awards

It is the opinion of the Supervisory Board that the members of the Executive Board

have delivered an exceptional performance in the past years in respect of the

expansion of the manufacturing facilities that the Supervisory Board considers

pivotal in the realization of Sif’s long term strategy. The expansion plan took more

than 3 years to reach final investment decision and will take more than 18 months

from the moment of final investment decision (FID) to materialize in expanded

production facilities. In connection with the decision to invest in expansion of the

manufacturing facilities, members of the Executive Board have committed to invest

more than 60% of their annual base salary in Sif-shares with a lock-up period of

4 years. For the CEO this involved an investment of €249,990 and for the CFO an

investment of €150,037. For these amounts they bought shares in the market in the

period 19-30 June 2023. The Supervisory Board has decided to compensate the

Executive Board members for the difference between the price in the rights issue

(€11.50 per share) and the price that was paid by CEO and CFO in the market

(€12.70 per share average). This results in gross awards of €46,758 for CEO and

€28,073 annual for CFO respectively, payable in May 2024.

These investments by Executive Board members are closely linked to two additional

cash bonusses for specific achievements with value of two times one year base

salary. These grants are determined by the Supervisory Board subject to article 5 of

the remuneration policy and as such reflected in the table Executive Board

remuneration. These additional grants are linked to the exceptional performance.

The first grant is subject to a total shareholder return (TSR) modifier. It was

awarded in June 2023. The second grant is also subject to the TSR modifier but also

subject to KPI’s that relate to the new factory being operational at the end of 2024.

A similar incentive and retention instrument has been adopted for a small group of

key employees being instrumental for the successful execution of the expansion

plan. The group of key employees participated in the rights issue of Sif and

collectively invested in 33,366 shares for which they paid an amount equal

to €384 thousand and for which they agreed to a lock-up period of 4 years. The

employees that participated in the investment were also awarded a cash bonus for

specific achievements, the level of which is dependent of the individual level of

investment. These grants are also conditional to a 3-year employment and a Total

Shareholder Return (TSR)-modifier that adjusts the cash-payment (up- or

downward) depending on the outcome of the indexed TSR performance, measured

during a 3-year period after award. These additional grants are not awarded under

the standard LTI-arrangement of the company.

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.

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, 7,122 PSUs with a value

of €86,532 were conditionally awarded to the CEO (6,963 in 2022 with a value of

€78,463). 4,313 PSUs with a value of €52,403 were conditionally awarded to the CFO

(4,188 in 2022 with a value of €47,196). The 2020-awards under this LTIP were

vested in 2023. The pay-out on vested LTIP arrangements to the CEO was €85,507.

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.

2023Sif Annual Report

Internal pay ratio

The 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

on Sif’s paylist 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 2023 numbers brings

the pay-ratio to 11.0 compared to 9.6 in 2022 (for CEO compared to all employees).

According to EY’s 2021 analysis of Executive Remuneration in the Netherlands, the

median for AScX companies listed on Euronext was 11.6. This median was based on

reported pay-out ratio’s by the AScX companies.

The 2022 remuneration report was discussed in the Annual General Meeting of

shareholders in May 2023 and presented for an advisory vote. Of the shares voted

for (76.12% of shares issued), 99.22% voted in favor.

Remuneration and company performance

2023 2022 2021 2020 2019

Executive

Remuneration (in €)

Fred van Beers 890,773 730,606 858,464 593,691 629,091

Ben Meijer

545,596 414,191 256,951

Leon Verweij

- - 409,312 537,338 456,883

Average full-time

remuneration of

employees

88,597 83,869 82,428 80,358 81,838

Pay ratio (CEO

compared to all other

employees)

9.8 8.5 10.1 9.5 10.2

Company

performance

indicators

Contribution/ton* 669 674 637 609 542

EBITDA 36,806 36,426 39,061 31,756 26,371

Net debt (ex-IFRS 16)

year-end

(111,463) (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.

* Reference is made to section 'Definition and Explanation of use of non-IFRS financial measures' and

'Reconciliation of non-IFRS financial measures' in the Other Information section for the definition and

explanation of use, reconciliation and restatements (if applicable)

2023Sif Annual Report

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-based payment, nor are they awarded Sif shares or share

options in Sif as part of their remuneration.

SUPERVISORY BOARD REMUNERATION

Remuneration

in €

2023 2022 2021 2020 2019

André Goedée 25,577 70,000 70,000 70,000 70,000

Peter Gerretse 60,625 45,000 45,000 45,000 45,000

Caroline van den Bosch 16,875 45,000 45,000 45,000 45,000

Peter Wit 45,000 45,000 45,000 45,000 45,000

Peter Visser 45,000 45,000 45,000 45,000 45,000

Angelique Heckman 28,515 0 0 0 0

Annabelle Vos 14,178 0 0 0 0

Total remuneration 235,770 250,000 250,000 250,000 250,000

excluding VAT and expenses

2023Sif Annual Report

Financial Statements

80 Consolidated statement of profit or loss for the year ended

31 December 2023

81 Consolidated statement of financial position as at 31 December 2023

(before appropriation of result)

82 Consolidated statement of changes in equity for the year ended

31 December 2023

83 Consolidated cash flow statement for the year ended

31 December 2023

84 Consolidated cash flow statement for the year ended

31 December 2023 (continued)

85 Notes to the consolidated financial statements for the year ended

31 December 2023

134 Separate statement of profit or loss for the year ended

31 December 2023

135 Separate statement of financial position as at 31 December 2023

(before profit appropriation)

136 Notes to the separate financial statements for the year ended

31 December 2023

2023Sif Annual Report

Consolidated statement of profit or loss

for the year ended 31 December 2023

AMOUNTS IN EUR '000 Notes 2023 2022

Revenue from contracts with customers 448,072 363,891

Operating lease income 6,227 10,652

Total revenue 6 454,299 374,543

Raw materials (252,372) (191,674)

Subcontracted work and other external charges (30,703) (36,561)

Logistic and other project related expenses (22,235) (15,797)

Direct personnel expenses 7 (46,966) (37,610)

Production and general manufacturing expenses (20,083) (17,481)

Indirect personnel expenses 7 (26,073) (21,204)

Depreciation and amortization 14,15,31 (22,897) (24,226)

Facilities, housing and maintenance (5,456) (4,947)

Selling expenses 8 (892) (628)

General expenses 9 (12,718) (12,305)

Operating profit 13,904 12,110

Finance income 3,053 -

Impairment (losses) / reversals on financial assets (34) (3)

Finance costs 10 (3,287) (2,010)

Finance costs and impairment losses (268) (2,013)

Other income 5 90

Share of profit / (loss) of joint ventures 11,17 13 1

Profit before tax 13,654 10,188

Income tax expense 12 (2,434) (2,670)

Profit after tax 11,220 7,518

Attributable to:

Non-controlling interests 23 357 301

Equity holders of Sif Holding N.V. 10,863 7,217

Profit after tax 11,220 7,518

Earnings per share * 13

Basic/diluted earnings per share (EUR) 0.32 0.28

* The 2022 earnings per share has been restated. Reference is made to note 13 for more information.

2023Sif Annual Report

Consolidated statement of financial position as at 31 December 2023

(before appropriation of result)

AMOUNTS IN EUR '000 Notes 31-Dec-2023 31-Dec-2022

Assets

Intangible assets 14 1,915 860

Property, plant and equipment 15 283,604 116,415

Right-of-use assets 31 108,342 104,466

Investment property 16 520 515

Investments in joint ventures 17 89 76

Total non-current assets 394,470 222,332

Inventories 18 517 427

Contract assets 19 28,712 18,315

Trade receivables 20 23,330 22,463

VAT receivable 7,758 -

Prepayments and other receivables 10,853 2,102

CIT receivable 2,991 1,832

Cash and cash equivalents 21 131,389 89,832

Total current assets 205,550 134,971

Total assets 600,020 357,303

AMOUNTS IN EUR '000 Notes 31-Dec-2023 31-Dec-2022

Equity

Share capital 22 5,978 5,100

Share premium 22 49,711 1,059

Other capital reserves 22 80,500 -

Retained earnings 98,483 91,266

Result for the year 10,863 7,217

Equity attributable to shareholder 245,535 104,642

Non-controlling interests 1,479 1,122

Total equity 247,014 105,764

Liabilities

Loans and borrowings - non-current 24 19,926 -

Lease Liabilities - non-current 24,31 102,875 99,006

Employee benefits - non-current 26 727 468

Deferred tax liabilities 12 1,814 688

Contract liabilities - non-current 19 71,768 -

Other non-current liabilities 28 409 810

Total non-current liabilities 197,519 100,972

Lease Liabilities - current 24,31 9,015 8,392

Provisions - 228

Trade payables 87,324 92,333

Contract Liabilities - current 19 37,725 32,458

Employee benefits - current 26 4,029 3,310

Wage tax and social security 1,836 1,589

VAT payable - 4,172

CIT payable 58 13

Other current liabilities 28 15,500 8,072

Total current liabilities 155,487 150,567

Total liabilities 353,006 251,539

Total equity and liabilities 600,020 357,303

2023Sif Annual Report

Consolidated statement of changes in equity for the year ended 31 December 2023

AMOUNTS IN EUR '000 Share capital

premium

Other cap-

ital reserves

Retained

earnings

Result for

the year Total

Non-con-

trolling

interests Total equity

Balance as at 1 January 2023 5,100 1,059 - 91,266 7,217 104,642 1,122 105,764

Appropriation of result - - - 7,217 (7,217) - - -

Total comprehensive income

Result for the year - - - - 10,863 10,863 357 11,220

Total comprehensive income - - - - 10,863 10,863 357 11,220

Transactions with owners of the Company

Issuance of cumulative preference shares - - 50,000 - - 50,000 - 50,000

Conversion of advance factory payment to perpetual bond - - 30,500 - - 30,500 - 30,500

Issuance of additional ordinary shares 878 49,576 - - - 50,454 - 50,454

Fair value of share investment awards - 87 - - - 87 - 87

Transaction costs related to issuance cumulative

preference shares and additional ordinary shares (net of

tax) - (1,011) - - - (1,011) - (1,011)

Total transactions with owners of the Company 878 48,652 80,500 - - 130,030 - 130,030

Balance as at 31 December 2023 5,978 49,711 80,500 98,483 10,863 245,535 1,479 247,014

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 at 31 December 2022 5,100 1,059 - 91,266 7,217 104,642 1,122 105,764

2023Sif Annual Report

Consolidated cash flow statement for the year ended 31 December 2023

AMOUNTS IN EUR '000 Notes 2023 2022

Cash flows from operating activities

Profit before tax 13,654 10,188

Adjustments for:

Depreciation and amortization of Property, Plant and Equipment and Intangible assets 14,15 12,132 14,116

Depreciation of right-of-use assets 31 10,765 10,110

Fair value adjustments on investment property 16 (5) (90)

Unrealised changes in joint ventures 17 (13) 39

Fair value of share investment awards 22 87 -

Impairment (losses) / reversals on financial assets (34) 3

Net finance costs 234 2,010

Changes in net working capital

o Inventories 18 (90) 185

o Contract assets and liabilities 19 95,896 (10,626)

o Trade receivables 20 (833) (4,539)

o Prepayments and other receivables (5,162) 125

o Trade payables (12,127) 26,544

Total changes in net working capital 77,684 11,689

VAT payable and receivable (11,930) 4,222

Initial direct costs on operating lease contracts - (605)

Employee benefits 978 902

Provisions (228) 228

Wage tax and social security 247 798

Other liabilities 4,515 2,326

Government grants received 632 380

Income taxes received / (paid) (2,071) (5,134)

Interest paid (2,236) (822)

Interest received 2,072 -

Net cash from operating activities 106,483 50,360

2023Sif Annual Report

Consolidated cash flow statement for the year ended 31 December 2023 (continued)

AMOUNTS IN EUR '000 2023 2022

Cash flows from investing activities

Purchase of intangible fixed assets 14 (1,055) (760)

Purchase of property, plant and equipment 15 (168,803) (19,523)

Net cash from (used in) investing activities (169,858) (20,283)

Cash flows from financing activities

Proceeds from new borrowing 24 20,250 -

Transaction costs paid related to new finance facility 24 (3,647) -

Proceeds from cumulative preference shares 22 50,000 -

Transaction costs paid on issue of cumulative preference shares 22 (68) -

Proceeds from rights issue 22 50,454 -

Transaction costs paid on issue of ordinary shares 22 (1,294) -

Payment of lease liabilities 31 (10,763) (8,595)

Dividends paid 22 - (4,851)

Net cash from (used in) financing activities 104,932 (13,446)

Net increase / (decrease) in cash and cash equivalents 41,557 16,631

Cash and cash equivalents at 1 January 89,832 73,201

Cash and cash equivalents at 31 December 131,389 89,832

2023Sif Annual Report

Notes to the consolidated financial statements for the year ended 31 December 2023

1 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.

These consolidated financial statements comprise the Company and its subsidiaries

(collectively the ‘Group’ and individually ‘Group companies’). Information on the

structure of the Group is provided in note 30. The company is registered with the

Netherlands Chamber of Commerce Business Register under number 13016026.

The consolidated financial statements of the Group for the year ended 31 December

2023, were authorised for issue in accordance with a resolution of the Executive

Board on 18 March 2024.

The Group is primarily involved in the manufacturing of foundation piles for offshore

wind farms and metal structures, parts of metal structures, pipes, pipe structures,

and components for the offshore industry.

As from 12 May 2016 the shares of the company have been listed on Euronext

Amsterdam.

2 Basis of preparation

These consolidated financial statements have been prepared in accordance with

International Financial Reporting Standards as adopted by the European Union (EU-

IFRS). The financial statements also comply with the financial reporting

requirements included in section 9 of Book 2 of the Netherlands Civil Code.

The consolidated financial statements have been prepared on a historical cost basis,

except for the liability for share based payments and investment property that are

measured at fair value and the jubilee provision that is based on the actuarial

method. The Group’s consolidated financial statements are presented in EUR (‘000),

which is also the Company’s functional currency, if not stated otherwise. All values

are rounded to the nearest thousands (EUR ‘000) on individual line items which can

result in minor rounding differences in sub-totals and totals, except when otherwise

indicated.

The consolidated financial statements provide comparative information in respect of

the previous period.

Manufacturing facility expansion

As per 13 Febuary 2023, the Executive Board of the Group has taken the Final

Investment Decision (‘FID’) for the manufacturing facility expansion (hereafter

‘expansion’). The Group is financing the expansion, which is estimated to amount to

approximately EUR 328 million (including appropriate contingencies), through

a combination of equity and debt, as well as advance factory payment by two

launching customers, with the remainder being funded through cash and cash

equivalents:

> EUR 100 million of advance factory payments from Launching Customers;

> EUR 50 million of newly issued cumulative preference shares;

> EUR 50 million raised through a rights offering;

> EUR 81 million Term-loans, as part of a EUR 481 million finance facility which in

addition includes a guarantee facility of EUR 350 million and revolving credit

facility of EUR 50 million; and

> EUR 40 million lease facility;

> EUR 7 million cash and cash equivalents.

(together, the ‘Funding Package’).

2023Sif Annual Report

The effective date of the finance facility is 5 June 2023 and has a term of 6 years.

The interest rate consists of EURIBOR (3 months) + margin, which is 2% for the

term loans and for the revolving facility depended on the level of net leverage. As per

31 December 2023, the advance factory payments that have been received by the

Group are classified in the balance sheet as non-current contract liability for EUR

69.5 million and other capital reserve for EUR 30.5 million. The other capital reserve

relates to the advance factory payment related to cancelled Empire Wind 2 project,

which contract is on 29 December 2023 terminated by launching customer Empire

Offshore Wind LLC. Based on the specific contractual agreements, the AFP related

to this contract (EUR 30.5 million) is converted into a perpetual bond. The total cash

receipt of the advance factory payments is part of the changes in net working

capital in the operating cash flow in the cash flow statement, the conversion of the

advance factory payment to perpetual bond is a non-cash transaction. The

cumulative preference shares are issued and the rights offering has been completed.

One drawdown of the term-loans amounting to EUR 20,25 million has been made

and the lease facility will only be used during 2024.

2.1 Going concern

In determining the appropriate basis of preparation of the consolidated financial

statements, management is required to consider whether the Group can continue in

operational existence for the foreseeable future.

The future financial performance of the Group is dependent upon the wider

economic environment in which it operates. The factors that particularly affect the

performance of the Group include political decision making and global economic

conditions. The ongoing war in Ukraine and geopolitical tensions in other parts of

the world continue to bring uncertainties and implications on global economy

impacting various industries and sectors. The effects are wide ranging, including

amongst others, inflation, volatile energy prices, pressure on supply chains, and

fluctuating interest rates in most parts of the world. Mainly the high inflation and

interest rates have resulted in cancelations of projects in the USA and UK, which

also resulted in the cancelation of the Empire Wind 2 order for the Group.

Furthermore, the development in relation to regulations about nitrogen deposition in

the Netherlands have an effect on the execution of business operations.

We continue to monitor the developments and assess the implications on our

business operations and we concluded that the impact on the performance of the

business is not material for the 2023 financial period. In addition, the assessment

did not result in any impairment or other material changes in the valuation of other

assets and liabilities. Due to the unpredictable nature of this risk, we are actively

monitoring the economic developments as the severity of the impact on our

customers and our own business operations remain uncertain for the future.

However, the outlook remains positive: the orderbook is well filled with 2024 fully

booked and large orders being booked or under exclusive negotiations for 2025 and

2026 and the financing arrangements are renewed until June 2029. The recent

cancelations are expected to have limited impact on the Group because of a solid

order book and the recent cancelations are considered a temporary hick-up in the

offshore wind market, with mid- to longterm demand outlook continuing to be

strong. Due to the solid financing arrangements related to the expansion plans,

a significant cash buffer has been created by the end of 2023, which is expected to

be sufficient to fund the expected negative net cash flow during 2024 as a result of

the finalisation of the expansion plans. In addition, the usage of the revolving credit

facility of EUR 50 million is currently not foreseen, and is therefore an additional

buffer for operational setbacks.

The Group assessed where climate related matters could have a significant impact

on the going concern situation. As a consequence of emission-reduction legislation

the demand for offshore wind energy is increasing and therewith increases the

demand for the products of the Group. Therefore, management assesses that the

current climate related matters have a positive impact on the future volume of

projects in the offshore wind market, and therefore lower the risk in relation to going

concern of the Group.

Accordingly, management considers there to be no material uncertainties that may

cast significant doubt on the Group’s ability to continue to operate as a going

concern. Therefore, the Group continues to adopt the going concern basis in the

preparation of the consolidated financial statements.

2023Sif Annual Report

3 Material accounting policies

The Group has consistently applied the following accounting policies to all periods

presented in these consolidated financial statements.

3.1 Basis of consolidation

Subsidiaries

The consolidated financial statements comprise the financial statements of the

Group and its subsidiaries as at 31 December 2023. Control is achieved when the

Group is exposed, or has rights, to variable returns from its involvement with the

investee and has the ability to affect those returns through its power over the

investee. Specifically, the Group controls an investee if, and only if, the Group has:

1. Power over the investee (i.e., existing rights that give it the current ability to

direct the relevant activities of the investee);

2. Exposure, or rights, to variable returns from its involvement with the investee;

3. The ability to use its power over the investee to affect its returns.

The Group re-assesses whether or not it controls an investee if facts and

circumstances indicate that there are changes to one or more of the three elements

of control. Consolidation of a subsidiary begins when the Group obtains control over

the subsidiary and ceases when the Group loses control of the subsidiary. Assets,

liabilities, income and expenses of a subsidiary acquired or disposed of during the

year are included in the consolidated financial statements from the date the Group

gains control until the date the Group ceases to control the subsidiary. A change in

the ownership interest of a subsidiary, without a loss of control, is accounted for as

an equity transaction. If the Group loses control over a subsidiary, it derecognizes

the related assets (including goodwill), liabilities, non-controlling interest and other

components of equity while any resultant gain or loss is recognized in profit or loss.

Any investment retained is recognized at fair value.

Business combinations

Business combinations are accounted for using the acquisition method. The cost of

an acquisition is measured as the aggregate of the consideration transferred, which

is measured at acquisition date fair value, and the amount of any non-controlling

interests in the acquiree. For each business combination, the Group elects whether

to measure the non-controlling interests in the acquiree at fair value or at the

proportionate share of the acquiree’s identifiable net assets. Acquisition-related

costs are expensed as incurred and included in general expenses.

The Group determines that it has acquired a business when the acquired set of

activities and assets include an input and a substantive process that together

significantly contribute to the ability to create outputs. The acquired process is

considered substantive if it is critical to the ability to continue producing outputs,

and the inputs acquired include an organised workforce with the necessary skills,

knowledge, or experience to perform that process or it significantly contributes to

the ability to continue producing outputs and is considered unique or scarce or

cannot be replaced without significant cost, effort, or delay in the ability to continue

producing outputs.

When the Group acquires a business, it assesses the financial assets and liabilities

assumed for appropriate classification and designation in accordance with the

contractual terms, economic circumstances and pertinent conditions as at the

acquisition date.

If the fair value of the net assets acquired is in excess of the aggregate

consideration transferred, the Group re-assesses whether it has correctly identified

all of the assets acquired and all of the liabilities assumed and reviews the

procedures used to measure the amounts to be recognized at the acquisition date. If

the reassessment still results in an excess of the fair value of net assets acquired

over the aggregate consideration transferred, then the gain is recognized in profit or

loss.

Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses

arising from intra-group transactions, are eliminated. Unrealised gains arising from

transactions with equity-accounted investees are eliminated against the investment

to the extent of the Group’s interest in the investee. Unrealised losses are eliminated

in the same way as unrealised gains, but only to the extent that there is no evidence

of impairment.

2023Sif Annual Report

3.2 Management estimates and judgements

The preparation of the Group’s consolidated financial statements requires

management to make estimates and assumptions. To make these estimates and

assumptions the Group uses factors such as experience and expectations about

future events that are reasonably expected to occur given the information that is

currently available. Furthermore, climate related matters are taken into account,

however the Group concluded that those have no significant impact on the

estimates and assumptions. The estimates and assumptions are reviewed on an

ongoing basis.

Revisions of accounting estimates and assumptions, or differences between

accounting estimates and assumptions and the actual outcomes, may result in

adjustments to the carrying amounts of assets and liabilities, which would be

recognized prospectively.

Contract assets and liabilities

Revenues from contracts with customers and direct costs are recognized in the

statement of profit or loss in proportion to the satisfaction of each performance

obligation. In the Wind segment and offshore steel structure projects in the Other

segment the satisfaction is assessed based on the actual hours incurred compared

with the estimated hours needed to complete the full performance obligation. In

addition, management estimates at each reporting date the total expected costs to

be incurred, the variable considerations and any claims/litigations for each individual

performance obligation and adjustments are made where appropriate. Furthermore,

judgement is applied in relation to licensing contracts, which concerns the

identification of performance obligations and the relative stand-alone selling prices

based on which the transaction price is allocated to the identified performance

obligations.

Detailed explanations of the degree of judgment and assumptions used are included

under the respective section in the significant accounting policies related to

revenues from contracts with customers.

Leases

The Group rents warehouse/factory equipment and several housing units in order to

carry out its activities. Furthermore, the Group entered into a lease agreement with

Havenbedrijf Rotterdam N.V. for the lease of three plots in the Rotterdam harbor.

Extension options or cancellation options are included in the lease term when the

group has such an economic incentive that exercising the option is reasonably

certain. The group considers available evidence at the time of the assessment,

including potential favourable terms upon extension, potential termination penalties,

the relative costs associated with potential relocation or termination of the lease and

the extent of leasehold improvements undertaken. Additionally, the size and the

relative importance of the leased premises as well as the availability of easily

substitutable assets is taken into consideration when assessing whether the group

has an economic incentive to extend a lease for which it holds an option to do so.

The Group applies judgement in evaluating whether it is reasonably certain it will or

will not exercise the option to renew or terminate the lease. That is, it considers all

relevant factors that create an economic incentive for it to exercise either the

renewal or the termination. After the commencement date, the Group reassesses

the lease term if there is a significant event or change in circumstances that is

within its control and affects its ability to exercise or not to exercise the option to

renew or to terminate (e.g., construction of significant leasehold improvements or

significant customisation to the leased asset).

2023Sif Annual Report

3.3 Summary of material accounting policies

Revenue from contracts with customers

The Group is primarily involved in the manufacturing of foundation piles for offshore

wind farms and metal structures, parts of metal structures, pipes, pipe structures,

and components for the offshore industry. In addition, the Group is providing

Marshalling and logistics services to its clients. In addition, with the acquisition of

KCI The Engineers B.V. during 2021, the Group is also involved in the engineering of

solutions for renewables market, the oil & gas market and other equipment.

Furthermore, during 2023 the Group started licensing its technology and trademarks

to customers.

Revenue from contracts with customers is recognized when control of the goods or

services is transferred to the customer at an amount that reflects the consideration

to which the Group expects to be entitled in exchange for those goods or services.

The Group has generally concluded that it is the principal in its revenue

arrangements, because it typically controls the (series of) goods or services before

transferring them to the customer.

The Group applied the following judgements that significantly affect the

determination of the amount and timing of revenue from contracts with customers:

Construction contracts

Identify the contract(s) with a customer

The Group identifies a contract with a customer when all the criteria of IFRS 15 are

met. The price as agreed upon may vary in the beginning of the project. The initial

contract price is normally determined based on situations in the past and the

company is working with its customers on the final design and development of the

project. The change in the contract price is a change within the existing contract and

relates mainly to adjustments before the start of the production. A combination of

contracts is considered for every individual contract, although mostly not applicable

as contract prices are determined on a standalone basis and no discounts are given

related to other contracts. Contract modifications are relatively limited.

Under IFRS 15 cost to obtain a contract - when they are incremental - and if they are

expected to be recovered —should be capitalized and then amortized consistently

with the pattern of revenue for the related contract. However, the Group incurs costs

of obtaining a contract, but these are not incremental costs (the costs would have

incurred if the contract had not been obtained) and are recognized as an expense

when incurred.

Identify the performance obligations in the contract

The goods of the Group include mainly monopiles, transition pieces, legs, piles and

pilesleeves. Goods within a contract that are substantially the same and that have

the same pattern of transfer to the customer are considered as series of distinct

goods. These series and the other individual goods are identified as separate

performance obligations as the customer can benefit from the goods on its own or

with readily available resources and the goods are distinct within the context of the

contract. This results in an accounting treatment with a series of goods on

a performance obligation for the aforementioned goods, as the series of goods are

designed for a specific project and connected to each other without having the

opportunity to adjust these easily. The aforementioned goods are separated as

these can be considered to be distinct. Storage of goods is not considered

a performance obligation, as it is not a promise in the contract. When the customer

requires additional storage of goods (in addition to the agreed schedules for

production and load-out), this is assessed in light of the guidance for identification

of performance obligations (at contract inception) or contract modifications (when

the request comes during the execution of the contract). If applicable, the additional

storage service is not considered a service in the Marshalling segment, as it does

not qualify as a lease (the customers does not obtain right to control the use the

storage area) and no specific logistical handling services are provided.

2023Sif Annual Report

Determine the transaction price

The transaction price is the price that the company expects to receive for the

satisfaction of the performance obligations taking into account among others:

discounts, financing components and liquidated damages. Before including any

amount of variable consideration in the transaction price, the Group considers

whether the amount of variable consideration is constrained. In case the Group

determined that the estimates of variable consideration are constrained, the

transaction price is adjusted accordingly. The main variable consideration that can

be applicable to the contracts of the Group is related to steel prices (of which the

impact of changes is passed through to the customers of the Group), liquidated

damages (which are performance penalties in the contract in case agreed

milestones are not met) and cancelation fees. Based on facts and circumstances in

relation to the respective project, the Group assesses to what extend it is highly

probable that a significant revenue reversal will not occur in future periods once the

uncertainty related to the variable consideration is resolved. Other forms of variable

consideration are relatively limited, as the Group provides no volume rebates, no

rights of returns, no performance bonuses, no refunds nor credits.

Allocate the transaction price to the performance obligations in the contract

The transaction price is separately agreed for the relevant performance obligation or

are allocated to the relevant performance obligation in proportion to their stand-

alone selling price which was the basis for the contract.

Recognize revenue when (or as) the entity satisfies a performance obligation

The Group recognizes revenue when (or as) a performance obligation is satisfied,

i.e., when control of the (series of) goods or services underlying the particular

performance obligation is transferred to the customer. The Group recognize revenue

over time, since its performance creates or enhances an asset that the customer

controls as the asset is created, its performance does not create an asset with an

alternative use to the entity and the entity has an enforceable right to payment for

performance completed to date. The Group uses the input method to measure

progress over time, based on labour hours spent. The actual hours spent in relation

to the total expected hours to the satisfaction of that performance obligation is

considered a reliable measure to recognize revenue over time.

Termination of contracts

In case of a termination of a contract with a customer, based on the specific

contractual agreements the financial consequences are determined.

Marshalling services

During 2019 the Group started to provide marshalling and logistic services to its

clients. These services can comprise of (a combination of) renting out logistical and

facilities, and providing logistical handling services.

Contracts with bundled sales of renting out space and logistical handling services

are comprised of at least two performance obligations, because the renting and

handling services are both sold on a stand-alone basis and are distinct within the

context of the contract. Accordingly, the Group allocates the transaction price based

on the relative stand-alone selling prices of the services. In the assessment of the

applicable performance obligations in contracts with customers in the Marshalling

segment it is considered whether the control of any goods or services is transferred

to the Group, or the control remains at the customer.

As renting out logistical space is considered a lease contract within the scope of

IFRS 16, the related accounting is performed in accordance with the policies as

described in the section “Leases”.

The logistical handling services agreed in the contract can be distinct, or a series of

distinct services that are substantially the same and that have the same pattern of

transfer to the customer. As a customer simultaneously receives and consumes the

benefits provided by the Group’s performance and the throughput time of an

individual performance obligation is limited, the Group considers the control of the

service to be transferred at a point in time. Therefore, revenue for logistical handling

services is recognized at the moment the service is provided to the customer.

2023Sif Annual Report

For some contracts the Group needs to incur costs in order to enable the Group to

fulfil the performance obligations in the contract (initial direct costs). In accordance

with IFRS 15 and 16, in the accounting of those costs to fullfill a contract, any other

applicable accounting standards are considered first. If other standards are not

applicable to contract fulfilment costs, the following criteria are applied for

capitalisation of these costs as contract costs in case of an IFRS 15 contract:

1. The costs directly relate to a contract or to a specifically identifiable anticipated

contract (e.g., costs relating to services to be provided under renewal of an

existing contract or costs of designing an asset to be transferred under

a specific contract that has not yet been approved).

2. The costs generate or enhance resources of the entity that will be used in

satisfying (or in continuing to satisfy) performance obligations in the future.

3. The costs are expected to be recovered.

In case the initial direct costs related to an operational lease contact for which the

Group acts as the (intermediate) lessor, the initial direct costs incurred in obtaining

an operating lease are added to the carrying amount of the underlying asset and

recognized as an expense over the lease term on the same basis as the lease

income.

Other revenue

In addition to revenue from construction contracts and marshalling contracts, the

Group has limited revenue from engineering services, operational lease of the

windmill on the Group’s site in Rotterdam and the licensing of the Group’s

technology and trademarks.

The revenue for engineering services is recognised in line with the accounting

policies for construction contracts. The operational lease of the windmill is

considered a lease contract within the scope of IFRS 16, the related accounting is

performed in accordance with the policies as described in the section “Leases”. The

licensing revenue is generated through licensing of the Group’s technology and

trademarks to customers, to enable them to produce and sell offshore wind

products in line with the Group’s quality standards. The technology license is

granted as ‘right to use’ license while the license of the Group’s trademark is

granted as ‘right to access’. Revenue from ‘right to access’ licenses is recognized

over the (estimated) period during which the Group is obliged to provide access to

the customers. License revenue for ‘right to use’ licenses is recognized at the

moment the control passes to the customer, except for the usage-based royalties,

which are recognized when the usage has taken place based on royalties the Group

is entitled to for the period.

Bundeled goods and services

When products and services are offered as a bundle under one agreement or under

a series of agreements that are commercially linked, the (estimated) total

transaction price of the agreement is allocated to each of the identified ‘distinct’

performance obligation based on the relative stand-alone selling price of each

element. Depending on their nature, the revenue from each of the ‘distinct’

performance obligations is recognized based on the applicable revenue recognition

policy as described above.

The relative stand-alone selling price of each element in a bundled arrangement is

based on the available stand-alone selling price or is estimated using methods

allowed under IFRS, such as the cost plus reasonable margin method, residual

method or a combination thereof. In making such estimates, management makes

use of judgment and assumptions to arrive at an outcome that best reflects

a transaction’s substance.

Contract balances

Contract assets

Contract assets represent the gross amount expected to be collected from

customers for contract work performed to date. The contract assets are measured

as costs incurred plus profits recognized to date less progress billings and

recognized losses. Contract assets are subject to impairment assessment. Refer to

accounting policies on impairment of financial assets.

2023Sif Annual Report

Contract liabilities

A contract liability is recognized if a customer pays consideration, or the Group has

a right to an amount of consideration that is unconditional (i.e. a receivable), before

the Group transfers the related goods or services. Contract liabilities are recognized

as revenue when the Group performs under the contract (i.e., transfers control of the

related goods or services to the customer).

Furthermore, the Group provides warranty bonds for completed contracts. The

estimated bond costs for the duration of the warranty bonds are recorded as part of

the contract liabilities, and are revised periodically.

Trade receivables

A receivable is recognized if an amount of consideration that is unconditional is due

from the customer (i.e., only the passage of time is required before payment of the

consideration is due). Refer to accounting policies of financial assets.

Government grants

Government grants are recognized where there is reasonable assurance that the

grant will be received and all attached conditions will be complied with. When the

grant relates to an expense item, it is recognized as income on a systematic basis

over the periods that the related costs, for which it is intended to compensate, are

expensed. When the grant relates to an asset, it is recognized as income in equal

amounts over the expected useful life of the related asset.

Employee benefits

Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided.

A liability is recognized for the amount expected to be paid if the Group has

a present legal or constructive obligation to pay this amount as a result of past

service provided by the employee and the obligation can be estimated reliably. Wage

tax deductions (WBSO) are recognized in profit or loss over the periods in which the

Group recognizes the related costs which the grants are intended to compensate.

Post-employment benefit plan

The Group has a defined benefit scheme for which premiums are payable to an

industry pension fund (Bedrijfstakpensioenfonds) that is separately managed: the

Pensioenfonds Metaal en Techniek (PMT). This pension scheme is administered

together with those of other legal entities. The pension obligation is based on the

duration of the participation in the plan and their salary levels. The related

obligations are covered by the periodical premiums to the industry pension fund. The

associated businesses are not obliged to compensate any deficits in the pension

funds, nor are they entitled to any surpluses. Furthermore, the structure of the

administration does not allow for providing the required information to the Group for

accounting for the pension scheme as a defined benefit scheme in accordance with

IAS 19. As such, this pension scheme has been accounted for as a defined

contribution scheme in the financial statements.

Obligations for contributions to the industry pension fund are expensed as the

related service is provided. Prepaid contributions are recognized as an asset to the

extent that a cash refund or a reduction in future payments is available.

Share-based compensation

Employees of the Group receive remuneration in the form of share-based payments,

whereby employees render services in exchange for equity instruments (equity-

settled transactions) and/or share appreciation rights which are settled in cash

(cash-settled transactions).

Equity-settled transactions

The cost of equity-settled transactions is determined by the fair value at the date

when the grant is made using an appropriate valuation model (further details are

given in note 27).

2023Sif Annual Report

That cost is recognised in employee benefits expense, together with a corresponding

increase in equity (share premium), over the period in which the service and, where

applicable, the performance conditions are fulfilled (the vesting period). The

cumulative expense recognised for equity-settled transactions at each reporting date

until the vesting date reflects the extent to which the vesting period has expired and

the Group’s best estimate of the number of equity instruments that will ultimately

vest. The expense or credit in the statement of profit or loss for a period represents

the movement in cumulative expense recognised as at the beginning and end of that

period.

Service and non-market performance conditions are not taken into account when

determining the grant date fair value of awards, but the likelihood of the conditions

being met is assessed as part of the Group’s best estimate of the number of equity

instruments that will ultimately vest. Market performance conditions are reflected

within the grant date fair value. Any other conditions attached to an award, but

without an associated service requirement, are considered to be non-vesting

conditions. Non-vesting conditions are reflected in the fair value of an award and

lead to an immediate expensing of an award unless there are also service and/or

performance conditions.

No expense is recognised for awards that do not ultimately vest because non-

market performance and/or service conditions have not been met. Where awards

include a market or non-vesting condition, the transactions are treated as vested

irrespective of whether the market or non-vesting condition is satisfied, provided that

all other performance and/or service conditions are satisfied.

When the terms of an equity-settled award are modified, the minimum expense

recognised is the grant date fair value of the unmodified award, provided the original

vesting terms of the award are met. An additional expense, measured as at the date

of modification, is recognised for any modification that increases the total fair value

of the share-based payment transaction, or is otherwise beneficial to the employee.

Where an award is cancelled by the entity or by the counterparty, any remaining

element of the fair value of the award is expensed immediately through profit or

loss.

The dilutive effect of outstanding options is reflected as additional share dilution in

the computation of diluted earnings per share (further details are given in Note 13).

Cash-settled transactions

A liability is recognised for the fair value of cash-settled transactions. The fair value

is measured initially and at each reporting date up to and including the settlement

date, with changes in fair value recognised in employee benefits expense. The fair

value is expensed over the period until the vesting date with recognition of

a corresponding liability. The fair value is determined using a binomial model

(further details are given in note 27). The approach used to account for vesting

conditions when measuring equity-settled transactions also applies to cash-settled

transactions.

Other long-term employee benefits

The Group’s net obligation in respect of long-term employee benefits is the amount

of future benefit that employees have earned in return for their service in the current

and prior periods. That benefit is discounted to determine its present value.

Remeasurements are recognized in profit or loss in the period in which they arise.

Finance income and finance costs

The Group’s finance income and finance costs include:

> interest income;

> interest expense; and

> the foreign currency gain or loss on financial assets and financial liabilities.

Interest income or expense is recognized using the effective interest method.

Taxes

Current tax

Current tax comprises the expected tax payable or receivable on the taxable income

or loss for the year and any adjustment to tax payable or receivable in respect of

previous years. It is measured using tax rates enacted or substantively enacted at

the reporting date in the countries where the Group operates and generates taxable

income.

2023Sif Annual Report

Income tax expense comprises current and deferred tax. Income taxes are

recognized in profit or loss except to the extent that they relate to items recognized

directly in equity or in other comprehensive income. Management periodically

evaluates positions taken in the tax returns with respect to situations in which

applicable tax regulations are subject to interpretation and establishes provisions

where appropriate.

Deferred tax

Deferred tax is provided using the liability method on temporary differences between

the carrying amounts of assets and liabilities for financial reporting purposes and

their tax bases, except for:

> deferred tax liabilities arising from the initial recognition of goodwill or assets or

liabilities in a transaction that is not a business combination and, at the time of

the transaction, affects neither accounting nor taxable profit or loss and;

> temporary differences related to investments in subsidiaries, associates and joint

arrangements to the extent that the Group is able to control the timing of the

reversal of the temporary differences and it is probable that they will not reverse

in the foreseeable future.

Deferred tax assets are recognized for all deductible unused tax losses, tax credits

and unused deductible temporary differences to the extent that it is probable that

future taxable profits will be available against which they can be utilised. Deferred

tax assets are reviewed at each reporting date and are reduced to the extent that it

is no longer probable that the related tax benefit will be realised. Such reductions are

reversed when the probability of future taxable profits improves.

Unrecognized deferred tax assets are reassessed at each reporting date and

recognized to the extent that it has become probable that future taxable profits will

be available against which they can be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to

apply in the year when the asset is realised or the liability is settled, based on tax

rates (and tax laws) that have been enacted or substantively enacted at the

reporting date.

Deferred tax relating to items recognized outside profit or loss is recognized outside

profit or loss. Deferred tax items are recognized in correlation to the underlying

transaction either in other comprehensive income (OCI) or directly in equity.

The Group offsets deferred tax assets and deferred tax liabilities if and only if it has

a legally enforceable right to set off current tax assets and current tax liabilities and

the deferred tax assets and deferred tax liabilities relate to income taxes levied by

the same taxation authority on either the same taxable entity or different taxable

entities which intend either to settle current tax liabilities and assets on a net basis,

or to realise the assets and settle the liabilities simultaneously, in each future period

in which significant amounts of deferred tax liabilities or assets are expected to be

settled or recovered.

Value added tax

Expenses and assets are recognized net of the amount of value added tax, except

when the value added tax incurred on a purchase of assets or services is not

recoverable from the taxation authority, in which case, the value added tax is

recognized as part of the cost of acquisition of the asset or as part of the expense

item, as applicable.

The net amount of value added tax recoverable from, or payable to, the taxation

authority is included as part of receivables or payables in the statement of financial

position.

Intangible assets

Research and development costs

Research costs are expensed as incurred. Development expenditures on an

individual project are recognized as an intangible asset when the Group can

demonstrate:

> The technical feasibility of completing the intangible asset so that the asset will

be available for use or sale

> Its intention to complete and its ability and intention to use or sell the asset

> How the asset will generate future economic benefits

> The availability of resources to complete the asset

2023Sif Annual Report

> The ability to measure reliably the expenditure during development

Following initial recognition of the development expenditure as an asset, the asset is

carried at cost less any accumulated amortization and accumulated impairment

losses. Amortization of the asset begins when development is complete, and the

asset is available for use. It is amortized over the period of expected future benefit,

which is determined per project (with a standard assumption of 5 years).

Amortization is recorded in depreciation and amortization costs. During the period of

development, the asset is tested for impairment annually.

Property, plant and equipment

Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated

depreciation and accumulated impairment losses, if any. Such cost includes the cost

of replacing part of the plant and equipment and borrowing costs for long-term

construction projects if the recognition criteria are met.

Borrowing costs directly attributable to the acquisition, construction or production of

an asset that necessarily takes a substantial period of time to get ready for its

intended use or sale are capitalised as part of the cost of the asset. All other

borrowing costs are expensed in the period in which they occur. Borrowing costs

consist of interest and other costs that an entity incurs in connection with the

borrowing of funds. Interest expense arising from customer contracts with

a significant financing component are capitalized as borrowing costs if they are

directly attributable to the acquisition, construction or production of a qualifying

asset.

When significant parts of plant and equipment are required to be replaced at

intervals, the Group depreciates them separately based on their specific useful lifes.

Likewise, when a major renovation or overhaul is performed, its cost is recognized in

the carrying amount of the plant and equipment as a replacement if the recognition

criteria are satisfied. All other repair and maintenance costs are recognized in profit

or loss as incurred.

If significant parts of an item of property, plant and equipment have different useful

lifes, they are accounted for as separate items (major components) of property,

plant and equipment.

Subsequent expenditure

Subsequent expenditure is capitalised only when it is probable that the future

economic benefits associated with the expenditure will flow to the Group.

Depreciation

Depreciation is calculated using the cost of items of property, plant and equipment

using the straight-line method over their estimated useful lifes, and is recognized in

profit or loss. Land is not depreciated.

Assets which are under construction are capitalised under property, plant or

equipment whereby depreciation will start when the asset is available for use.

The estimated useful lifes of property, plant and equipment for current and

comparative periods are as follows:

> Buildings: 6 – 20 years

> Plant and equipment: 5 – 20 years

> Other fixed assets: 5 – 10 years

Depreciation methods and useful lifes are reviewed at each reporting date and

adjusted if appropriate.

Derecognition

An item of property, plant and equipment and any significant part initially recognized

is derecognized upon disposal (i.e., at the date the recipient obtains control) or when

no future economic benefits are expected from its use or disposal. Any gain or loss

arising on derecognition of the asset (calculated as the difference between the net

disposal proceeds and the carrying amount of the asset) is included in the

statement of profit or loss when the asset is derecognized.

2023Sif Annual Report

Investment property

Investment property is initially measured at cost. Subsequent to initial recognition,

investment properties are stated at fair value, which reflects market conditions at

the reporting date. Gains or losses arising from changes in the fair values of

investment properties are included in profit or loss in the period in which they arise,

including the corresponding tax effect.

Investment properties are derecognized either when they have been disposed of (i.e.,

at the date the recipient obtains control) or when they are permanently withdrawn

from use and no future economic benefit is expected from their disposal. Any gain

or loss on disposal of an investment property (calculated as the difference between

the net proceeds from disposal and the carrying amount of the item) is recognized

in profit or loss in the period of derecognition.

Leases

The Group assesses at contract inception whether a contract is, or contains, a lease.

That is, if the contract conveys the right to control the use of an identified asset for

a period of time in exchange for consideration.

Group as a lessee

The Group applies a single recognition and measurement approach for all leases,

except for short-term leases and leases of low-value assets. The Group recognizes

lease liabilities to make lease payments and right-of-use assets representing the

right to use the underlying assets.

Right-of-use assets

The Group recognizes right-of-use assets at the commencement date of the lease

(i.e., the date the underlying asset is available for use). Right-of-use assets are

measured at cost, less any accumulated depreciation and impairment losses, and

adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets

includes the amount of lease liabilities recognized, initial direct costs incurred, and

lease payments made at or before the commencement date less any lease

incentives received. Right-of-use assets are depreciated on a straight-line basis over

the shorter of the lease term and the estimated useful lifes of the assets. For more

information related to the estimated useful life of the assets reference is made to

note 3.2.

If ownership of the leased asset transfers to the Group at the end of the lease term

or the cost reflects the exercise of a purchase option, depreciation is calculated

using the estimated useful life of the asset.

The right-of-use assets are also subject to impairment. Refer to the accounting

policies in section “Impairment of non-financial assets”.

Lease liabilities

At the commencement date of the lease, the Group recognizes lease liabilities

measured at the present value of lease payments to be made over the lease term.

The lease payments include fixed payments (including in-substance fixed payments)

less any lease incentives receivable, variable lease payments that depend on an

index or a rate, and amounts expected to be paid under residual value guarantees.

The lease payments also include the exercise price of a purchase option reasonably

certain to be exercised by the Group and payments of penalties for terminating the

lease, if the lease term reflects the Group exercising the option to terminate. Variable

lease payments that do not depend on an index or a rate are recognized as

expenses (unless they are incurred to produce inventories) in the period in which the

event or condition that triggers the payment occurs.

2023Sif Annual Report

In calculating the present value of lease payments, the Group uses its incremental

borrowing rate at the lease commencement date because the interest rate implicit in

the lease is not readily determinable. After the commencement date, the amount of

lease liabilities is increased to reflect the accretion of interest and reduced for the

lease payments made. In addition, the carrying amount of lease liabilities is

remeasured if there is a modification, a change in the lease term, a change in the

lease payments (e.g., changes to future payments resulting from a change in an

index or rate used to determine such lease payments) or a change in the

assessment of an option to purchase the underlying asset.

The repayment of lease liabilities is separately shown in cash flow statement under

financing activities. The interest part is shown as part of the interest paid. The

Group‘s lease liabilities are separately shown in the balance sheet.

Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term

leases of machinery and equipment (i.e., those leases that have a lease term of

12 months or less from the commencement date and do not contain a purchase

option). It also applies the lease of low value assets recognition exemption to leases

of office equipment that are considered to be low value. Lease payments on short-

term leases and leases of low value assets are recognized as expense on a straight-

line basis over the lease term.

Significant judgement in determining the lease term of contracts with renewal options

The Group determines the lease term as the non-cancellable term of the lease,

together with any periods covered by an option to extend the lease if it is reasonably

certain to be exercised, or any periods covered by an option to terminate the lease, if

it is reasonably certain not to be exercised. The Group applies judgement in

evaluating whether it is reasonably certain to exercise the option to terminate or

extend the lease. That is, it considers all relevant factors that create an economic

incentive for it to exercise the renewal. After the commencement date, the Group

reassesses the lease term if there is a significant event or change in circumstances

that is within its control and affects its ability to exercise (or not to exercise) the

option to renew or to terminate (e.g., a change in business strategy).

During 2023 no adjustments have been made to the estimations of the lease terms

which had a material impact.

Group as a lessor

Leases in which the Group does not transfer substantially all the risks and rewards

incidental to ownership of an asset are classified as operating leases. Rental income

arising is accounted for on a straight-line basis over the lease terms and is included

in operational lease income in the statement of profit or loss due to its operating

nature. Initial direct costs incurred in negotiating and arranging an operating lease

are added to the carrying amount of the leased asset and recognized over the lease

term on the same basis as rental income. Rents are recognized as revenue in the

period in which they are earned.

Investments in joint ventures

A joint venture is a type of joint arrangement whereby the parties that have joint

control of the arrangement have rights to the net assets of the joint venture. Joint

control is the contractually agreed sharing of control of an arrangement, which

exists only when decisions about the relevant activities require the unanimous

consent of the parties sharing control. The considerations made in determining

significant influence or joint control are similar to those necessary to determine

control over subsidiaries. The Group’s investments in its joint ventures are

accounted for using the equity method. Under the equity method, the investment in

a joint venture is initially recognized at cost. The carrying amount of the investment

is adjusted to recognize changes in the Group’s share of net assets of the joint

ventures since the acquisition date.

The statement of profit or loss reflects the Group’s share of the results of operations

of the associate or joint venture. In addition, when there has been a change

recognized directly in the equity of the associate or joint venture, the Group

recognizes its share of any changes, when applicable, in the statement of changes in

equity. Unrealised gains and losses resulting from transactions between the Group

and the associate or joint venture are eliminated to the extent of the interest in the

associate or joint venture.

2023Sif Annual Report

Non-controlling interests

Non-controlling interest is defined as the equity in a subsidiary non attributable,

directly or indirectly, to a parent. For each business combination, in which the

company holds less than 100% of the equity interests in the acquiree, the Group

values the non-controlling interest using its proportionate share of the acquiree’s

identifiable net assets.

Inventories

Inventories are measured at the lower of cost and net realisable value. The cost of

inventories is based on the first-in first-out principle. Net realisable value is the

estimated selling price in the ordinary course of business, less estimated costs of

completion and the estimated costs necessary to make the sale.

Cash and cash equivalents

Cash and cash equivalents in the statement of financial position comprise cash at

banks and in hand, which are subject to an insignificant risk of changes in value.

Because of the short term nature of the instrument, the Group recognizes the

current account at its contractual par amount. Similar to trade receivables, the

current account involves one single cash flow which is the repayment of the

principal. Therefore, the cash flows resulting from the receivables meet the SPPI test

of payments of principal and interest despite the interest component being zero.

The Group holds the current account in order to collect contractual cash flows. The

current account is therefore classified as measured at amortized cost.

Financial assets

IFRS 9 sets out requirements for recognizing and measuring financial assets,

financial liabilities and some contracts to buy or sell non-financial items.

Initial recognition and measurement

Financial assets are classified, at initial recognition, as subsequently measured at

amortized cost, fair value through other comprehensive income (OCI), and fair value

through profit or loss.

The classification of financial assets at initial recognition depends on the financial

asset’s contractual cash flow characteristics and the Group’s business model for

managing them. With the exception of trade receivables that do not contain

a significant financing component or for which the Group has applied the practical

expedient of IFRS 15.63 associated with the determination of whether a significant

financing component exists, the Group initially measures a financial asset at its fair

value plus, in the case of a financial asset not at fair value through profit or loss,

transaction costs. Trade receivables that do not contain a significant financing

component or for which the Group has applied the practical expedient are measured

at the transaction price determined under IFRS 15.

In order for a financial asset to be classified and measured at amortized cost or fair

value through OCI, it needs to give rise to cash flows that are ‘solely payments of

principal and interest (SPPI)’ on the principal amount outstanding. This assessment

is referred to as the SPPI test and is performed at an instrument level. The Group’s

business model for managing financial assets refers to how it manages its financial

assets in order to generate cash flows. The business model determines whether

cash flows will result from collecting contractual cash flows, selling the financial

assets, or both.

Subsequent measurement

Financial assets at amortized cost are the most relevant to the Group. The Group

measures financial assets at amortized cost if both of the following conditions are

met:

> The financial asset is held within a business model with the objective to hold

financial assets in order to collect contractual cash flows, and

> The contractual terms of the financial asset give rise on specified dates to cash

flows that are solely payments of principal and interest on the principal amount

outstanding

Financial assets at amortized cost are subsequently measured using the effective

interest rate (EIR) method and are subject to impairment. Gains and losses are

recognized in profit or loss when the asset is derecognized, modified or impaired.

The Group’s financial assets at amortized cost includes trade receivables, contract

assets and a loan to an associate.

2023Sif Annual Report

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group

of similar financial assets) is derecognized (i.e., removed from the Group’s

consolidated statement of financial position) when:

> the rights to receive cash flows from the asset have expired;

> the Group has transferred its rights to receive cash flows from the asset or has

assumed an obligation to pay the received cash flows in full without material

delay to a third party under a ‘pass-through’ arrangement and either (a) the

Group has transferred substantially all the risks and rewards of the asset, or (b)

the Group has neither transferred nor retained substantially all the risks and

rewards of the asset, but has transferred control of the asset.

Impairment

The Group recognizes an allowance for expected credit losses (ECLs) for all debt

instruments not held at fair value through profit or loss. ECLs are based on the

difference between the contractual cash flows due in accordance with the contract

and all the cash flows that the Group expects to receive, discounted at an

approximation of the original effective interest rate.

For trade receivables and contract assets, the Group applies a simplified approach in

calculating ECLs, as these positions do not contain a significant financing

component. Therefore, the Group does not track changes in credit risk, but instead

recognizes a loss allowance based on lifetime ECLs at each reporting date. The

Group has established a provision matrix that is based on its historical credit loss

experience, adjusted for forward-looking factors such as macro economic

information and the loss given default, specific to the debtors and the economic

environment.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair

value through profit or loss, loans and borrowings and payables. All financial

liabilities are recognized initially at fair value and, in the case of loans and

borrowings and payables, net of directly attributable transaction costs.

The Group’s material financial liabilities include trade and other payables and loans

and borrowings including bank overdrafts.

In case a financial liability does not meet the initial recognition criteria, the financial

liability is disclosed as contingent liability.

Subsequent measurement

Financial liabilities at amortized cost (loans and borrowings) is the category most

relevant to the Group. After initial recognition, interest-bearing loans and borrowings

are subsequently measured at amortized cost using the EIR method. Gains and

losses are recognized in profit or loss when the liabilities are derecognized as well as

through the EIR amortization process. Amortized cost is calculated by taking into

account any discount or premium on acquisition and fees or costs that are an

integral part of the EIR. The EIR amortization is included as finance costs in the

statement of profit or loss.

Derecognition

A financial liability is derecognized when the obligation under the liability is

discharged or cancelled or expires. When an existing financial liability is replaced by

another from the same lender on substantially different terms, or the terms of an

existing liability are substantially modified, such an exchange or modification is

treated as the derecognition of the original liability and the recognition of a new

liability. The difference in the respective carrying amounts is recognized in the

statement of profit or loss.

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Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in

the consolidated statement of financial position if there is a currently enforceable

legal right to offset the recognized amounts and there is an intention to settle on

a net basis, to realise the assets and settle the liabilities simultaneously.

Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer

a liability in an orderly transaction between market participants at the measurement

date. The Group uses valuation techniques that are appropriate in the circumstances

and for which sufficient data are available to measure fair value, maximising the use

of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial

statements are categorised within the fair value hierarchy, described as follows,

based on the lowest level input that is significant to the fair value measurement as

a whole:

> Level 1: quoted prices (unadjusted) in active markets for identical assets or

liabilities.

> Level 2: Valuation techniques for which the lowest level input that is significant

to the fair value measurement is directly or indirectly observable

> Level 3: Valuation techniques for which the lowest level input that is significant

to the fair value measurement is unobservable.

For assets and liabilities that are recognized in the financial statements at fair value

on a recurring basis, the Group determines whether transfers have occurred

between levels in the hierarchy by re-assessing categorisation (based on the lowest

level input that is significant to the fair value measurement as a whole) at the end of

each reporting period.

Share capital

Cash dividend and non-cash distribution to the shareholder

The Company recognizes a liability to make cash or non-cash distributions to the

shareholders when the distribution is authorised and the distribution is no longer at

the discretion of the Company. As per the corporate laws in the Netherlands,

a distribution is authorised when it is approved by the shareholders. A corresponding

amount is recognized directly in equity.

Non-cash distributions are measured at the fair value of the assets to be distributed

with fair value remeasurement recognized directly in equity. Upon distribution of

non-cash assets, any difference between the carrying amount of the liability and the

carrying amount of the assets distributed is recognized in the statement of profit or

loss.

Cumulative preference shares and perpetual bond

Cumulative preference shares and the perpetual bond are classified as either

a financial liability or equity components based on the terms of the contract.

A financial liability is any liability that is:

> a contractual obligation to deliver cash or another financial asset to another

entity, or to exchange financial assets or financial liabilities with another entity

under conditions that are potentially unfavourable to the entity; or

> a contract that will or may be settled in the entity’s own equity instruments and

is a non–derivative for which the entity is or may be obliged to deliver a variable

number of the entity’s own equity instruments, or a derivative that will or may be

settled other than by the exchange of a fixed amount of cash or another financial

asset for a fixed number of the entity’s own equity instruments.

The cumulative preference shares and perpetual bond have been classified as

equity, because there is no mandatory redemption and distributions to the holders of

the respective instrument are at the discretion of Sif.

The cash received is classified as other capital reserve in equity, the transaction

costs (net of tax) are accounted for as a deduction from equity. The Group has

chosen to recognise the charge as a reduction of share premium.

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Provisions

Provisions are recognized when the Group has a present obligation (legal or

constructive) as a result of a past event, it is probable that an outflow of resources

embodying economic benefits will be required to settle the obligation and a reliable

estimate can be made of the amount of the obligation. When the Group expects

some or all of a provision to be reimbursed, for example, under an insurance

contract, the reimbursement is recognized as a separate asset, but only when the

reimbursement is virtually certain. The expense relating to a provision is presented in

the statement of profit or loss net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using

a current pre-tax rate that reflects, when appropriate, the risks specific to the liability.

When discounting is used, the increase in the provision due to the passage of time is

recognized as a finance cost.

Impairment of non-financial assets

Each reporting date, the Group assesses whether there is any indication that the

Group’s assets have been impaired. If any indication exists, an estimate is made of

the recoverable amount of the asset concerned. An impairment is only recognized

when the carrying amount of an asset or its cash-generating unit exceeds its

recoverable amount. Any impairments are recognized in the statement of profit or

loss under depreciation and impairment expenses.

The recoverable amount of an asset or cash-generating unit is the higher of the

value in use and the fair value less costs of disposal. The recoverable amount is

calculated for each asset individually, unless that asset does not generate any cash

flows that are largely independent from those of other assets or groups of assets.

The calculation of the value in use is based on a discounting of the estimated future

cash flows, using a discount rate that reflects the current market assessments of

the time value of money and the specific risks associated with the asset. For the

calculation of fair value minus cost of disposal use is made of an appropriate

valuation model.

A previously recognized impairment loss is only reversed if the assumptions used to

determine the asset’s recoverable amount have changed since the most recent

impairment loss. The reversal is limited so that the carrying amount of the asset

does not exceed its recoverable amount, nor exceed the carrying amount that would

have been determined, net of depreciation, had no impairment loss been recognized

for the asset in prior years.

4 Changes in accounting policies and disclosures

New and amended standards and interpretations

The Group applied for the first-time certain standards and amendments, which are

effective for annual periods beginning on or after 1 January 2023. The Group has

not early adopted any other standard, interpretation or amendment that has been

issued but is not yet effective.

The amendments marked with an (*) have not been endorsed by the EU per the date

of these financial statements.

Amendments to IAS 1 Presentation of Financial Statements and IFRS

Practice Statement 2: Disclosure of Accounting policies, effective 1 January

2023

The amendments provide guidance on the application of materiality judgements to

accounting policy disclosures. The amendments to IAS 1 replace the requirement to

disclose ‘significant’ accounting policies with a requirement to disclose ‘material’

accounting policies.

These amendments had no impact on the consolidated financial statements of the

Group.

Amendments to IAS 8 Accounting policies, Changes in Accounting

Estimates and Errors: Definition of Accounting Estimates, effective

1 January 2023

The amendments introduce a new definition of accounting estimates. Accounting

estimates are defined as “monetary amounts in financial statements that are

subject to measurement uncertainty”.

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The amendments clarify what changes in accounting estimates are and how these

differ from changes in accounting policies and corrections of errors. Also, they

clarify how entities use measurement echniques and inputs to develop accounting

estimates.

These amendments had no impact on the consolidated financial statements of the

Group.

Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and

Liabilities arising from a Single Transaction, effective 1 January 2023

The Amendments narrow the scope of the initial recognition exception under IAS

12 Income Taxes, so that it no longer applies to transactions that give rise to equal

taxable and deductible temporary differences.

The Amendments also clarify that where payments that settle a liability are

deductible for tax purposes, it is a matter of judgement (having considered the

applicable tax law) whether such deductions are attributable for tax purposes to the

liability recognized in the financial statements (and interest expense) or to the

related asset component (and interest expense). This judgement is important in

determining whether any temporary differences exist on initial recognition of the

asset and liability.

The amendments apply prospectively to transactions that occur on or after the

beginning of the earliest comparative period presented.

These amendments had no impact on the consolidated financial statements of the

Group.

Amendments to IAS 12 International Tax Reform – Pillar Two Model Rules

The Amendments introduce:

> A mandatory temporary exception to the accounting for deferred taxes arising

from the jurisdictional implementation of the Pillar Two model rules; and

> Disclosure requirements for affected entities to help users of the financial

statements better understand an entity’s exposure to Pillar Two income taxes

arising from that legislation, particularly before its effective date.

The Group has adopted these amendments, however they are not yet applicable for

the current reporting year as the Group's consolidated revenue is currently below the

threshold of €750 million.

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5 Standards issued but not yet effective

The new and amended standards and interpretations that are issued, but not yet

effective, up to the date of issuance of the Group’s financial statements are

disclosed below. The Group intends to adopt these new and amended standards

and interpretations, if applicable, when they become effective.

The amendments marked with an (*) have not been endorsed by the EU per the date

of these financial statements.

Amendments to IAS 1 Presentation of Financial Statements – Classification

of Liabilities as Current or Non-current (the 2020 amendments and

2022 amendments)

The amendments clarify the criteria for determining whether to classify a liability as

current or non-current. The amendments clarify:

> Right to defer settlement - the amendments provide clarification that if an

entity’s right to defer settlement of a liability is subject to the entity complying

with future covenants, the entity has a right to defer settlement of the liability

even if it does not comply with those covenants at the end of the reporting

period.

> Expected deferrals - the amendments clarify that classification of a liability is

unaffected by the likelihood that the entity will exercise its right to defer

settlement of the liability for at least twelve months after the reporting period.

> Settlement by way of own equity instruments - the amendments clarify that

there is an exception to the requirement that settlement of liabilities by way of

own equity instruments impacts the classification of liabilities.

> Disclosures - the amendments require additional disclosures by an entity that

classifies liabilities arising from loan arrangements as non-current when it has

a right to defer settlement of those liabilities that are subject to the entity

complying with future covenants within twelve months.

Companies are required to apply the amendments for annual periods beginning on

or after 1 January 2024. The amendments must be applied retrospectively in

accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and

Errors.

Since the Group’s current practice is in line with the amendments, the Group does

not expect any effect on its consolidated financial statements.

Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial

Instruments: Disclosures(*)

The amendments require an entity to provide information about the impact of

supplier finance arrangements on liabilities and cash flows, including:

> Terms and conditions

> As at the beginning and end of the reporting period:

> The carrying amounts of supplier finance arrangement financial liabilities and the

lie items in which those liabilities are presented

> The carrying amounts of financial liabilities and the line items, for which the

finance providers have already settled the corresponding trade payable

> The range of payment due dates for financial liabilities owed to the finance

providers and for comparable trade payables that are not part of those

arrangements

> The type and effect of non-cash changes in the carrying amounts of supplier

finance arrangement financial liabilities, which prevent the carrying amounts of

the financial liabilities from being comparable.

The amendments require an entity to aggregate information about its supplier

finance arrangements, however, the entity must disaggregate information about

unusual or unique terms and conditions of individual arrangements when they are

dissimilar. Furthermore the amendments require that explanatory information about

payment due dates, when those payment due date ranges are wide, to be

disaggregated.

The amendments will be effective for annual reporting periods beginning on or after

1 January 2024. Early adoption is permitted but will need to be disclosed.

The Group is currently assessing the impact the amendments will have on current

practice.

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Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback,

effective 1 January 2024

The amendments specify how a seller-lessee measures the lease liability arising in

a sale and leaseback transaction in a way that it does not recognise any amount of

the gain or loss that relates to the right of use retained. The amendment does not

prescribe specific measurement requirements for lease liabilities arising from

a leaseback. The initial measurement of the lease liability arising from a leaseback

may result in a seller-lessee determining ‘lease payments’ that are different from the

general definition of lease payments in Appendix A of IFRS 16. The seller-lessee will

need to develop and apply an accounting policy that results in information that is

relevant and reliable in accordance with IAS 8 Accounting Policies, Changes in

Accounting Estimates and Errors.

Companies are required to apply the amendments for annual periods beginning on

or after 1 January 2024. The amendments must be applied retrospectively in

accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and

Errors.

The Group currently has had no sale and leaseback transactions since the

implementation date of IFRS 16. In case these will occur in future periods, these

amendments will be taken into account.

Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rate:

Lack of Exchangeability, effective 1 January 2025

The amendments specify how an entity should assess whether a currency is

exchangeable and how it should determine a spot exchange rate when

exchangeability is lacking. The amendments also require disclosure of information

that enables users of financial statements to understand the impact of a currency

not being exchangeable.

The amendments apply to annual reporting periods beginning on or after 1 January

2025 and can be applied earlier, in which case, an entity is required to disclose that

fact. However, an entity cannot restate comparative information

The Group is currently assessing the impact the amendments will have on current

practice.

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6 Operating segments

For management purposes, the Group is organised into divisions based on its

products and services and has three operating segments:

> Wind, which produces and delivers monopiles, transition pieces or other

foundation components for the off-shore wind industry;

> Marshalling, which includes renting-out of logistical area and facilities and the

delivery of logistical services to customers, mainly in the off-shore wind industry;

> Other, which includes mainly engineering services and production of offshore

steel structures, and limited amounts for licensing fees and operational lease

income for the windmill on the Group’s site in Rotterdam.

These divisions offer different products and services, and require different

technology and target different markets.

Information related to each operating segment is set out below.

Segment contribution constitutes the difference between revenue from contracts

with customers and cost of sales. Cost of sales includes the costs of raw materials,

subcontracted work and other external charges as well as logistic and other project

related expenses. The gross profit is determined by segment contribution subtracted

by costs relating to direct personnel expenses and production and general

manufacturing expenses.

All accounts below gross profit are not allocated to individual segments as these are

managed on an overall group basis. Costs of sales like raw materials, subcontracted

work and other charges and logistic and other project related expenses depend on

underlying contracts with customers. Gross profit is used to measure performance

because management believes that this information is the most relevant in

evaluating the results of the respective segments relative to other entities that

operate in the same industries. Total assets, which are located in the Netherlands,

are not allocated to individual segments as these are managed on an overall group

basis.

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Information about operating segments